Willbros Launches Refinancing to Improve Its Financial Structure and Updates Operations

News provided by

Willbros Group, Inc.

Jul 08, 2013, 06:30 ET

HOUSTON, July 8, 2013 /PRNewswire/ -- Willbros Group, Inc. (NYSE: WG) announced today that it will pursue a refinancing of its outstanding term loan and revolving credit facilities. The Company expects the refinancing to enable it to borrow new funds at a lower interest rate, to extend the maturity of its debt to 2018 and to increase its flexibility under its loan covenants.

The Company is seeking to arrange a $250 million, six-year Senior Secured Term Loan Credit Facility.  The Company intends to use the net proceeds from the new term loan to repay all indebtedness under the Company's existing credit facilities and for general corporate purposes.  In addition to the new term loan, the Company expects to enter into a $150 million, five-year asset-based revolving credit facility. The revolver will be unfunded at close.

J.P. Morgan Securities LLC will act as Sole Lead Arranger and Bookrunner for the new Senior Secured Term Loan. Bank of America, N.A. will act as Sole Administrative Agent and Collateral Agent and Merrill Lynch, Pierce, Fenner & Smith Incorporated as Sole Lead Arranger and Sole Book Manager for the $150 million asset-based revolving credit facility.

The Company believes it has identified the causes for and has completed the appropriate actions to contain the losses in its regional oil and gas operations; however, it now expects an operating loss from continuing operations on a consolidated basis in the second quarter 2013 to range from $4.0 million to $7.0 million. Results from the regional delivery business are expected to improve slightly in the second quarter relative to the $16.2 million operating loss generated by that business in the first quarter of 2013. The Company is making solid progress on management and process improvements and believes that the recent changes in the Oil & Gas and Regions' leadership, improvements made in our estimating process and project management, and the short duration of the underperforming projects in the regional delivery business, which were essentially complete at June 30, 2013, should return the business' project operations to profitability in the short term. The Company continues to exercise patience and discipline with respect to the acquisition of new work in the regions and in its cross-country pipeline construction business where multiple opportunities are still available for execution in 2013. Aside from these two businesses in the Oil & Gas segment, the Company's remaining continuing operations are currently performing to plan and are on track to meet annual revenue and profit expectations. The Company continues to expect revenue for the full year 2013 to be in the range of $1.9 billion to $2.1 billion.

Our expected operating results for the second quarter 2013 are preliminary estimates since we have not yet closed our books for the second quarter.  In addition, our independent registered public accounting firm has not completed its review of our results for the second quarter.  Our actual results for the second quarter may differ materially from these estimates due to the completion of our final closing procedures, final adjustments and other developments that may arise between now and the time our results for the second quarter are finalized.

The following unaudited tables are included to provide details on the results we expect to report when we retrospectively adjust the periods presented to give effect to the segment changes and the sale of Oman.  To the extent this information is audited, our audited results, when reported, may differ materially from this information.

Willbros is a specialty energy infrastructure contractor serving the oil, gas, refining, petrochemical and power industries. Our offerings include engineering, procurement and construction (either individually or as an integrated EPC service offering), turnarounds, maintenance, facilities development and operations services. For more information on Willbros, please visit our web site at www.willbros.com.

This announcement contains forward-looking statements.  All statements, other than statements of historical facts, which address activities, events or developments the Company expects or anticipates will or may occur in the future, are forward-looking statements.  A number of risks and uncertainties could cause actual results to differ materially from these statements, including  the Company's inability to complete its anticipated refinancing of debt or to complete such refinancing on satisfactory terms; new legislation or regulations detrimental to the economic operation of refining capacity in the United States; the identification of one or more other issues that require restatement of one or more prior period financial statements; contract and billing disputes; the consequences the Company may encounter if it is unable to make payments required of it pursuant to its settlement agreement of the West African Gas Pipeline Company Limited lawsuit; the existence of material weaknesses in internal control over financial reporting; availability of quality management; availability and terms of capital; changes in, or the failure to comply with, government regulations; ability to remain in compliance with, or obtain waivers under, the Company's existing loan agreements; the promulgation, application, and interpretation of environmental laws and regulations; future E&P capital expenditures; oil, gas, gas liquids, and power prices and demand; the amount and location of planned pipelines; poor refinery crack spreads; delay of planned refinery outages and upgrades and development trends of the oil, gas, power, refining and petrochemical industries; as well as other risk factors described from time to time in the Company's documents and reports filed with the SEC.  The Company assumes no obligation to update publicly such forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.

Michael W. Collier 

Connie Dever

Vice President Investor Relations

Director Investor Relations

Willbros 

Willbros

713-403-8038 

713-403-8035

TABLE TO FOLLOW











Year Ended December 31, 2012

Year Ended December 31, 2011

Year Ended December 31, 2010

(Unaudited) (In thousands)

(Unaudited) (In thousands)

(Unaudited) (In thousands)

Consolidated Statements of Operations

As Reported

Oman

As Recasted

As Reported

Oman

As Recasted

As Reported

Oman

As Recasted

Contract revenue

$2,004,246

(75,446)

$1,928,800

$1,450,198

(73,829)

$1,376,369

$1,076,998

(73,589)

$1,003,409

Operating expenses:










  Contract

1,805,995

(67,018)

1,738,977

1,309,865

(60,840)

1,249,025

944,514

(57,562)

886,952

  Amortization of intangibles

14,985

-

14,985

15,108

-

15,108

9,437

-

9,437

  General and administrative

153,852

(2,036)

151,816

129,168

(1,785)

127,383

108,577

(2,491)

106,086

  Settlement of project dispute

-

-

-

8,236

-

8,236

-

-

-

  Goodwill impairment

8,067

-

8,067

178,575

-

178,575

60,000

-

60,000

  Changes in fair value of contingent earnout liability

-

-

-

(10,000)

-

(10,000)

(45,340)

-

(45,340)

  Acquisition costs

-

-

-

-

-

-

10,055

-

10,055

  Other charges

151

-

151

105

-

105

3,771

-

3,771

1,983,050

(69,054)

1,913,996

1,631,057

(62,625)

1,568,432

1,091,014

(60,053)

1,030,961

     Operating income (loss)

21,196

(6,392)

14,804

(180,859)

(11,204)

(192,063)

(14,016)

(13,536)

(27,552)

Other income (expense):










  Interest expense, net

(29,387)

(6)

(29,393)

(45,031)

(4)

(45,035)

(27,621)

(18)

(27,639)

  Loss on early extinguishment of debt

(3,405)

-

(3,405)

(6,304)

-

(6,304)

-

-

-

  Other, net

(402)

(168)

(570)

(458)

(81)

(539)

1,632

(79)

1,553

(33,194)

(174)

(33,368)

(51,793)

(85)

(51,878)

(25,989)

(97)

(26,086)

Loss from continuing operations before income taxes

(11,998)

(6,566)

(18,564)

(232,652)

(11,289)

(243,941)

(40,005)

(13,633)

(53,638)

  Provision (benefit) for income taxes

5,839

(1,112)

4,727

(32,293)

(1,265)

(33,558)

(27,184)

(1,767)

(28,951)

Loss from continuing operations

(17,837)

(5,454)

(23,291)

(200,359)

(10,024)

(210,383)

(12,821)

(11,866)

(24,687)

Income (loss) from discontinued operations, net of provision (benefit) for income taxes

(11,398)

5,454

(5,944)

(92,462)

10,024

(82,438)

(23,008)

11,866

(11,142)

  Net loss

(29,235)

-

(29,235)

(292,821)

-

(292,821)

(35,829)

-

(35,829)

Less: Income attributable to noncontrolling interest

(976)

-

(976)

(1,195)

-

(1,195)

(1,207)

-

(1,207)

  Net loss attributable to Willbros Group, Inc.

$    (30,211)

$       -

$    (30,211)

$  (294,016)

$       -

$  (294,016)

$    (37,036)

$       -

$    (37,036)


 

Year Ended December 31, 2012 

(Unaudited) (In thousands)

Oil & Gas

UTD

Canada

Professional Services

Eliminations

Corporate

Consolidated

Contract revenue






Contract revenue, as reported

$1,262,954

$525,966

$216,793

$             -

$     (1,467)

$         -

$   2,004,246

Resegmentation - Professional Services

(330,594)

-

-

330,594

-

-

-

Resegmentation - TriState

42,363

(42,363)

-

-

-

-

-

Oman discontinuation

(75,446)

-

-

-

-

-

(75,446)

Change in eliminations

3,411

-

-

-

(3,411)

-

-

Contract revenue, as recasted

$   902,688

$483,603

$216,793

$   330,594

$    (4,878)

$         -

$   1,928,800








Adjusted operating income (loss) (1)






Operating income (loss), as reported

$     15,554

$    5,682

$       (40)

$               -

$             -

$         -

$       21,196

Resegmentation - Professional Services

(11,426)

-

-

11,426

-

-

-

Resegmentation - TriState

785

(785)

-

-

-

-

-

Oman discontinuation

(6,392)

-

-

-

-

-

(6,392)

Goodwill impairment

-

8,067

-

-

-

-

8,067

Adjusted operating income (loss), as recasted

$     (1,479)

$  12,964

$       (40)

$     11,426

$             -

$         -

$       22,871

Regional Delivery impact

9,513

-

-

-

-

-

9,513

Adjusted operating income (loss) excluding Regional Delivery, as recasted

 

$      8,034

$  12,964

 

$       (40)

 

$     11,426

 

$             -

 

$         -

$      32,384








Capital expenditures






Capital expenditures, as reported

$      7,127

$    2,138

$      661

$              -

$             -

$    944

$       10,870

Resegmentation - Professional Services

(1,227)

-

-

1,227

-

-

-

Resegmentation - TriState

77

(77)

-

-

-

-

-

Oman discontinuation

(211)

-

-

-

-

-

(211)

Capital expenditures, as recasted

$      5,766

$    2,061

$      661

$       1,227

$             -

$    944

$       10,659

Year Ended December 31, 2011 

(Unaudited) (In thousands)

Oil & Gas

UTD

Canada

Professional Services

Eliminations

Corporate

Consolidated

Contract revenue






Contract revenue, as reported

$885,521

$   411,573

$153,411

$              -

$          (307)

$           -

$   1,450,198

Resegmentation - Professional Services

(278,101)

-

-

278,101

-

-

-

Resegmentation - TriState

23,135

(23,135)

-

-

-

-

-

Oman discontinuation

(73,829)

-

-

-

-

-

(73,829)

Change in eliminations

3,476

-

-

-

(3,476)

-

-

Contract revenue, as recasted

$560,202

$   388,438

$153,411

$   278,101

$       (3,783)

$           -

$   1,376,369








Adjusted operating income (loss) (1)






Operating income (loss), as reported

$ (43,307)

$  (150,012)

$    2,460

$               -

$               -

$  10,000

$     (180,859)

Resegmentation - Professional Services

(361)

-

-

361

-

-

-

Resegmentation - TriState

(2,290)

2,290

-

-

-

-

-

Oman discontinuation

(11,204)

-

-

-

-

-

(11,204)

Goodwill impairment

30,709

143,543

2,210

2,113

-

-

178,575

Changes in fair value of contingent earnout liability

-

-

-

-

-

(10,000)

(10,000)

Adjusted operating income (loss), as recasted

$ (26,453)

$     (4,179)

$    4,670

$       2,474

$             -

$           -

$      (23,488)

Regional Delivery impact

3,565

-

-

-

-

-

3,565

Adjusted operating income (loss) excluding Regional Delivery, as recasted

$(22,888)

$     (4,179)

$     4,670

$       2,474

$             -

$           -

$     (19,923)








Capital expenditures






Capital expenditures, as reported

$    5,339

$      2,849

$         52

$              -

$             -

$    1,989

$       10,229

Resegmentation - Professional Services

(1,255)

-

-

1,255

-

-

-

Resegmentation - TriState

21

(21)

-

-

-

-

-

Oman discontinuation

(182)

-

-

-

-

-

(182)

Capital expenditures, as recasted

$    3,923

$      2,828

$         52

$      1,255

$             -

$    1,989

$       10,047








Assets from continuing operations (at period end)






Assets from continuing operations, as reported

$292,137

$   343,510

$  57,783

$              -

$             -

$  79,054

$      772,484

Resegmentation - Professional Services

(37,753)

-

-

37,753

-

-

-

Resegmentation - TriState

19,590

(19,590)

-

-

-

-

-

Oman discontinuation

(33,220)

-

-

-

-

-

(33,220)

Assets from continuing operations, as recasted

$240,754

$   323,920

$  57,783

$     37,753

$             -

$  79,054

$      739,264








12 Month Backlog (2) (at period end)






12 Month Backlog, as reported

$383,653

$   334,737

$  98,902

$              -

$             -

$           -

$      817,292

Resegmentation - Professional Services

(174,579)

-

-

174,579

-

-

-

Resegmentation - TriState

12,508

(12,508)

-

-

-

-

-

Oman discontinuation

(48,423)

-

-

-

-

-

(48,423)

12 Month Backlog, as recasted

$173,159

$   322,229

$  98,902

$   174,579

$             -

$           -

$      768,869








Total Backlog (2) (at period end)






Total Backlog, as reported

$517,597

$1,261,654

$309,416

$              -

$             -

$           -

$   2,088,667

Resegmentation - Professional Services

(221,248)

-

-

221,248

-

-

-

Resegmentation - TriState

18,338

(18,338)

-

-

-

-

-

Oman discontinuation

(135,698)

-

-

-

-

-

(135,698)

Total Backlog, as recasted

$178,989

$1,243,316

$309,416

$   221,248

$             -

$           -

$   1,952,969

Year Ended December 31, 2010 

(Unaudited) (In thousands)

Oil & Gas

UTD

Canada

Professional Services

Eliminations

Corporate

Consolidated

Contract revenue






Contract revenue, as reported

$753,651

$165,989

$157,667

$            -

$          (309)

$         -

$   1,076,998

Resegmentation - Professional Services

(165,181)

-

-

165,181

-

-

-

Resegmentation - TriState

13,138

(13,138)

-

-

-

-

-

Oman discontinuation

(73,589)

-

-

-

-

-

(73,589)

Change in eliminations

1,770

-

-

-

(1,770)

-

-

Contract revenue, as recasted

$529,789

$152,851

$157,667

$   165,181

$       (2,079)

$         -

$   1,003,409








Adjusted operating income (loss) (1)






Operating income (loss), as reported

$ (36,543)

$ (22,387)

$     (426)

$            -

$             -

$  45,340

$      (14,016)

Resegmentation - Professional Services

2,161

-

-

(2,161)

-

-

-

Resegmentation - TriState

1,341

(1,341)

-

-

-

-

-

Oman discontinuation

(13,536)

-

-

-

-

-

(13,536)

Goodwill impairment

54,686

-

-

5,314

-

-

60,000

Changes in fair value of contingent earnout liability

-

-

-

-

-

(45,340)

(45,340)

Adjusted operating income (loss), as recasted

$    8,109

$ (23,728)

$     (426)

$       3,153

$             -

$         -

$      (12,892)








Capital expenditures






Capital expenditures, as reported

$    6,084

$    4,537

$    3,987

$            -

$             -

$    1,326

$       15,934

Resegmentation - Professional Services

(445)

-

-

445

-

-

-

Resegmentation - TriState

322

(322)

-

-

-

-

-

Oman discontinuation

(299)

-

-

-

-

-

(299)

Capital expenditures, as recasted

$    5,662

$    4,215

$    3,987

$          445

$             -

$    1,326

$       15,635

Three Months Ended March 31, 2012

(Unaudited) (In thousands)

Oil & Gas

UTD

Canada

Professional Services

Consolidated

Adjusted operating income (loss) (1)




Operating loss, as reported

$ (2,686)

$ (3,563)

$ (3,051)

$ (420)

$ (9,720)

Regional Delivery impact

(1,685)

-

-

-

(1,685)

Adjusted operating loss excluding Regional Delivery

$ (4,371)

$ (3,563)

$ (3,051)

$ (420)

$ (11,405)







Three Months Ended June 30, 2012

(Unaudited) (In thousands)

Oil & Gas

UTD

Canada

Professional Services

Consolidated

Adjusted operating income (loss) (1)




Operating income (loss), as reported

$ 388

$ 8,376

$ (2,910)

$        -

$ 5,854

Resegmentation - Professional Services

(4,596)

-

-

4,596

-

Resegmentation - TriState

1,457

(1,457)

-

-

-

Hawkeye discontinuation

-

2,428

-

-

2,428

Oman discontinuation

(788)

-

-

-

(788)

Adjusted operating income (loss), as recasted

$ (3,539)

$ 9,347

$ (2,910)

$ 4,596

$ 7,494

Regional Delivery impact

1,096

-

-

-

1,096

Adjusted operating income (loss) excluding Regional Delivery, as recasted

$ (2,443)

$ 9,347

$ (2,910)

$ 4,596

$ 8,590







Three Months Ended September 30, 2012

(Unaudited) (In thousands)

Oil & Gas

UTD

Canada

Professional Services

Consolidated

Adjusted operating income (loss) (1)




Operating income (loss), as reported

$ 9,803

$ (2,364)

$ 43

$         -

$ 7,482

Resegmentation - Professional Services

(4,913)

-

-

4,913

-

Resegmentation - TriState

962

(962)

-

-

-

Hawkeye discontinuation

-

5,308

-

-

5,308

Oman discontinuation

(1,472)

-

-

-

(1,472)

Adjusted operating income, as recasted

$ 4,380

$ 1,982

$ 43

$ 4,913

$ 11,318

Regional Delivery impact

(1,158)

-

-

-

(1,158)

Adjusted operating income excluding Regional Delivery, as recasted

$ 3,222

$ 1,982

$ 43

$ 4,913

$ 10,160







Three Months Ended December 31, 2012

(Unaudited) (In thousands)

Oil & Gas

UTD

Canada

Professional Services

Consolidated

Adjusted operating income (loss) (1)




Operating income (loss), as reported

$ 4,517

$ (3,320)

$ 5,878

$        -

$ 7,075

Resegmentation - Professional Services

(2,337)

-

-

2,337

-

Resegmentation - TriState

(451)

451

-

-

-

Oman discontinuation

(1,363)

-

-

-

(1,363)

Goodwill impairment

-

8,067

-

-

8,067

Adjusted operating income, as recasted

$ 366

$ 5,198

$ 5,878

$ 2,337

$ 13,779

Regional Delivery impact

11,260

-

-

-

11,260

Adjusted operating income excluding Regional Delivery, as recasted

$ 11,626

$ 5,198

$ 5,878

$ 2,337

$ 25,039







Three Months Ended March 31, 2013

(Unaudited) (In thousands)

Oil & Gas

UTD

Canada

Professional Services

Consolidated

Adjusted operating income (loss) (1)




Operating income (loss), as reported

$ (14,571)

$ 1,893

$ 10,507

$   613

$ (1,558)

Regional Delivery impact

16,213

-

-

-

16,213

Adjusted operating income excluding Regional Delivery

$ 1,642

$ 1,893

$ 10,507

$   613

$ 14,655















Year Ended December 31, 2012

Year Ended December 31, 2011

Year Ended December 31, 2010


(Unaudited) (In thousands)

(Unaudited) (In thousands)

(Unaudited) (In thousands)

Adjusted EBITDA from continuing operations (3)

As Reported

Oman

As Recasted

As Reported

Oman

As Recasted

As Reported

Oman

As Recasted

Net loss from continuing operations attributable to Willbros Group, Inc.

$    (18,813)

(4,478)

$    (23,291)

$  (201,554)

(8,829)

$   (210,383)

$    (14,028)

(10,659)

$    (24,687)

Interest expense, net

29,387

6

29,393

45,031

4

45,035

27,621

18

27,639

Provision (benefit) for income taxes

5,839

(1,112)

4,727

(32,293)

(1,265)

(33,558)

(27,184)

(1,767)

(28,951)

Depreciation and amortization

46,954

(609)

46,345

54,976

(2,228)

52,748

46,077

(3,277)

42,800

Loss on early extinguishment of debt

3,405

-

3,405

6,304

-

6,304

-

-

-

Changes in fair value of contingent earnout liability

-

-

-

(10,000)

-

(10,000)

(45,340)

-

(45,340)

Goodwill impairment

8,067

-

8,067

178,575

-

178,575

60,000

-

60,000

DOJ monitor cost

1,588

-

1,588

3,567

-

3,567

4,002

-

4,002

Stock based compensation

7,623

(16)

7,607

9,724

(18)

9,706

8,404

(25)

8,379

Restructuring and reorganization costs

151

-

151

105

-

105

3,771

-

3,771

Acquisition costs

-

-

-

-

-

-

10,055

-

10,055

(Gain) loss on disposal of property and equipment

(3,400)

177

(3,223)

(5,395)

16

(5,379)

(2,364)

(127)

(2,491)

Noncontrolling interest

976

(976)

-

1,195

(1,195)

-

1,207

(1,207)

-

Adjusted EBITDA from continuing operations, as recasted(3)

$     81,777

(7,008)

$     74,769

$     50,235

(13,515)

$     36,720

$     72,221

(17,044)

$     55,177

(1)

Adjusted operating income (loss) and adjusted operating income (loss) excluding Regional Delivery are non-GAAP financial measures that exclude special items that management believes affect the comparison of results for the periods presented.  Management also believes results excluding these items are more comparable to estimates provided by securities analysts and therefore are useful in evaluating operational trends of the Company and its performance relative to other engineering and construction companies.













(2)

12 Month Backlog and Total Backlog is anticipated contract revenue from uncompleted portions of existing contracts and contracts whose award is reasonably assured.  Master Service Agreement ("MSA") backlog is estimated for the remaining term of the contract.  MSA backlog is determined based on historical trends inherent in the MSAs, factoring in seasonal demand and projecting customer needs based on ongoing communications.













(3)

Adjusted EBITDA from continuing operations is defined as income (loss) from continuing operations before interest expense, income tax expense (benefit) and depreciation and amortization, adjusted for items broadly consisting of selected items which management does not consider representative of our ongoing operations and certain non-cash items of the Company.  These adjustments are included in various performance metrics under our credit facilities and other financing arrangements.  Management uses Adjusted EBITDA from continuing operations as a supplemental performance measure for comparing normalized operating results with corresponding historical periods and with the operational performance of other companies in our industry and for presentations made to analysts, investment banks and other members of the financial community who use this information in order to make investment decisions about us.

Adjusted EBITDA from continuing operations is not a financial measurement recognized under U.S. generally accepted accounting principles, or U.S. GAAP.  When analyzing our operating performance, investors should use Adjusted EBITDA from continuing operations in addition to, and not as an alternative for, net income, operating income, or any other performance measure derived in accordance with U.S. GAAP, or as an alternative to cash flow from operating activities as a measure of our liquidity.  Because all companies do not use identical calculations, our presentation of Adjusted EBITDA from continuing operations may be different from similarly titled measures of other companies.

SOURCE Willbros Group, Inc.

21%

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