Willbros Reports First Quarter 2016 Results

What:

Willbros First Quarter 2016 Earnings Conference Call

When:

Tuesday, May 3, 2016 - 10:00 a.m. Eastern Time (9:00 a.m. Central Time)

How:

Live via phone - By dialing 877-404-9648 or 412-902-0030 a few minutes prior to the start time and asking for the Willbros' call.  Or live over the Internet by logging on to the web address below.

Where:

http://www.willbros.com. The webcast can be accessed from the investor relations home page.

WILLBROS GROUP, INC.

(In thousands, except per share amounts)

 Three Months Ended 

 March 31, 

2016

2015

Income Statement 

Contract revenue

Oil & Gas

$  59,335

$        76,440

Utility T&D

97,289

86,986

Canada

42,492

87,009

Eliminations

(86)

(81)

199,030

250,354

Operating expenses

Oil & Gas

68,412

87,415

Utility T&D

96,085

91,846

Canada

44,080

88,524

Unallocated Corporate Costs

-

3,935

Eliminations

(86)

(81)

208,491

271,639

Operating income (loss)

Oil & Gas

(9,077)

(10,975)

Utility T&D

1,204

(4,860)

Canada

(1,588)

(1,515)

Unallocated Corporate Costs

-

(3,935)

Operating loss

(9,461)

(21,285)

Non-operating expenses

Interest expense, net

(3,547)

(8,297)

Debt covenant suspension and extinguishment charges

(63)

(35,869)

Other, net

(60)

(97)

(3,670)

(44,263)

Loss from continuing operations before income taxes

(13,131)

(65,548)

Provision (benefit) for income taxes

167

(20,604)

Loss from continuing operations

(13,298)

(44,944)

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

(1,853)

35,120

Net loss

$ (15,151)

$         (9,824)

Basic income (loss) per share attributable to Company shareholders:

Continuing operations

$    (0.22)

$           (0.90)

Discontinued operations

(0.03)

0.70

$    (0.25)

$           (0.20)

Diluted income (loss) per share attributable to Company shareholders:

Continuing operations

$    (0.22)

$           (0.90)

Discontinued operations

(0.03)

0.70

$    (0.25)

$           (0.20)

Cash Flow Data

Continuing operations

Cash provided by (used in)

Operating activities

$    2,364

$        34,672

Investing activities

(882)

84,875

Financing activities

(5,433)

(66,005)

Foreign exchange effects

587

(834)

Discontinued operations

(3,782)

(36,993)

Other Data (Continuing Operations)

Weighted average shares outstanding

Basic

60,756

49,819

Diluted

60,756

49,819

Adjusted EBITDA from continuing operations⁽¹⁾

$        96

$         (9,980)

Purchases of property, plant and equipment

492

1,296

Reconciliation of Non-GAAP Financial Measure

Adjusted EBITDA from continuing operations ⁽¹⁾

Loss from continuing operations

$ (13,298)

$       (44,944)

Interest expense, net

3,547

8,297

Provision for income taxes

167

(20,604)

Depreciation and amortization

5,688

7,445

Debt covenant suspension and extinguishment charges

63

35,869

Stock based compensation

1,293

1,612

Restructuring and reorganization costs

3,352

283

Accounting and legal fees associated with the restatements

35

476

Loss on sale of subsidiary

123

-

(Gain) loss on disposal of property and equipment

(874)

1,586

Adjusted EBITDA from continuing operations⁽¹⁾

$        96

$         (9,980)

Balance Sheet Data

March 31,
2016

December 31,
2015

Cash and cash equivalents

$  51,686

$        58,832

Working capital

106,304

120,430

Total assets

431,372

441,577

Total debt

90,617

95,623

Stockholders' equity

165,682

177,400

Backlog Data ⁽²⁾

Total Backlog By Reporting Segment

Oil & Gas

$  71,314

$        48,810

Utility T&D

595,620

622,629

Canada

116,352

155,379

Total Backlog

$783,286

$       826,818

Total Backlog By Geographic Area

United States

$666,934

$       671,439

Canada

116,352

155,379

Total Backlog

$783,286

$       826,818

12 Month Backlog by Reporting Segment

Oil & Gas

$  69,514

$        46,810

Utility T&D

296,278

274,610

Canada

91,503

110,797

12 Month Backlog

$457,295

$       432,217

12 Month Backlog By Geographic Area

United States

$365,792

$       321,420

Canada

91,503

110,797

12 Month Backlog

$457,295

$       432,217

(1)

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.  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.

(2)

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.  Backlog is not a term recognized under U.S. GAAP; however, it is a common measurement used in our industry.

Supplemental Schedule of Special Items

Three Months Ended March 31, 2016
(In thousands)

Oil & Gas

Utility T&D

Canada

Unallocated Corporate Costs

Gain On Sale Of Subsidiary

Eliminations

Consolidated

Contract revenue before special items ⁽¹⁾

Contract revenue, as reported

$ 59,335

$   97,289

$ 42,492

$            -

$          -

$           (86)

$      199,030

Contract revenue, exited subsidiaries ⁽²⁾

(645)

-

-

-

-

-

(645)

Contract revenue before special items

$ 58,690

$   97,289

$ 42,492

$            -

$          -

$           (86)

$      198,385

Operating income (loss) before special items ⁽¹⁾

Operating income (loss), as reported

$  (9,077)

$     1,204

$  (1,588)

$            -

$          -

$               -

$        (9,461)

Operating loss, exited subsidiaries ⁽²⁾

702

-

-

-

-

-

702

Other charges

1,828

1,294

566

-

-

-

3,688

Operating income (loss) before special items

$  (6,547)

$     2,498

$  (1,022)

$            -

$          -

$               -

$        (5,071)

Three Months Ended December 31, 2015 
(In thousands)

Oil & Gas

Utility T&D

Canada

Unallocated Corporate Costs

Gain On Sale Of Subsidiary

Eliminations

Consolidated

Contract revenue before special items ⁽¹⁾

Contract revenue, as reported

$ 77,863

$   97,282

$ 42,586

$            -

$             -

$           (71)

$      217,660

Contract revenue, exited subsidiaries ⁽²⁾

(1,285)

(156)

-

-

-

-

(1,441)

Contract revenue before special items

$ 76,578

$   97,126

$ 42,586

$            -

$             -

$           (71)

$      216,219

Operating income (loss) before special items ⁽¹⁾

Operating income (loss), as reported

$(12,895)

$    (4,548)

$     (791)

$            -

$   12,826

$               -

$        (5,408)

Operating loss, exited subsidiaries ⁽²⁾

3,046

3

-

-

-

-

3,049

Other charges

4,166

3,079

1,024

-

-

-

8,269

Gain on sale of subsidiary

-

-

-

-

(12,826)

-

(12,826)

Operating income (loss) before special items

$  (5,683)

$    (1,466)

$      233

$            -

$            -

$               -

$        (6,916)

Three Months Ended March 31, 2015 
(In thousands)

Oil & Gas

Utility T&D

Canada

Unallocated Corporate Costs

Gain On Sale Of Subsidiary

Eliminations

Consolidated

Contract revenue before special items ⁽¹⁾

Contract revenue, as reported

$ 76,440

$   86,986

$ 87,009

$               -

$          -

$           (81)

$      250,354

Contract revenue, exited subsidiaries ⁽²⁾

(35,128)

(2,842)

-

-

-

-

(37,970)

Contract revenue before special items

$   84,144

$ 87,009

$               -

$          -

$           (81)

$      212,384

Operating income (loss) before special items ⁽¹⁾

Operating income (loss), as reported

$(10,975)

$    (4,860)

$  (1,515)

$      (3,935)

$          -

$               -

$      (21,285)

Operating (income) loss, exited subsidiaries ⁽²⁾

47

(132)

-

-

-

-

(85)

Other charges

829

692

692

797

-

-

3,010

Operating loss before special items

$(10,099)

$    (4,300)

$     (823)

$      (3,138)

$          -

$               -

$      (18,360)

Adjusted EBITDA from continuing operations before special items ⁽¹⁾

Q1 2016

Q4 2015

Q1 2015

Adjusted EBITDA from continuing operations, as reported

$        96

$    (3,634)

$  (9,980)

Adjusted EBITDA from continuing operations, exited subsidiaries ⁽²⁾

684

518

(1,062)

Adjusted EBITDA from continuing operations before special items

$      780

$    (3,116)

$(11,042)

Income (loss) from continuing operations before special items ⁽¹⁾

Q1 2016

Q4 2015

Q1 2015

Income (loss) from continuing operations, as reported

$(13,298)

$   19,209

$(44,944)

(Income) loss from continuing operations, exited subsidiaries ⁽²⁾

702

3,049

(85)

Other charges

3,688

8,269

3,010

Gain on sale of subsidiary

-

(12,826)

-

Debt covenant suspension and extinguishment charges

63

2,066

35,869

Interest expense, net

-

1,154

-

Benefit for income taxes ⁽³⁾

-

(34,664)

(20,921)

Loss from continuing operations before special items

$  (8,845)

$  (13,743)

$(27,071)

Income (loss) from discontinued operations before special items ⁽¹⁾

Q1 2016

Q4 2015

Q1 2015

Income (loss) from discontinued operations, as reported

$  (1,853)

$   58,183

$ 35,120

Other charges

-

-

940

(Gain) loss on sale of subsidiaries

1,545

(96,427)

(58,549)

Provision for income taxes ⁽³⁾

-

34,664

20,921

Loss from discontinued operations before special items

$     (308)

$    (3,580)

$  (1,568)

Net loss before special items ⁽¹⁾

Q1 2016

Q4 2015

Q1 2015

Net income (loss), as reported

$(15,151)

$   77,392

$  (9,824)

(Income) loss from continuing operations, exited subsidiaries (2)

702

3,049

(85)

Other charges

3,688

8,269

3,950

(Gain) loss on sale of subsidiaries

1,545

(109,253)

(58,549)

Debt covenant suspension and extinguishment charges

63

2,066

35,869

Interest expense, net

-

1,154

-

Provision (benefit) for income taxes

-

-

-

Net loss, before special items

$  (9,153)

$  (17,323)

$(28,639)

Diluted loss per share attributable to Company shareholders before special items ⁽¹⁾

Q1 2016

Q4 2015

Q1 2015

Diluted income (loss) per share attributable to Company shareholders, as reported

$    (0.25)

$       1.28

$    (0.20)

(Income) loss from continuing operations, exited subsidiaries (2)

-

0.04

-

Other charges

0.06

0.14

0.09

(Gain) loss on sale of subsidiaries

0.03

(1.79)

(1.18)

Debt covenant suspension and extinguishment charges

0.00

0.03

0.72

Interest expense, net

-

0.02

-

Provision (benefit) for income taxes

-

-

-

Diluted loss per share attributable to Company shareholders before special items

$    (0.16)

$      (0.28)

$    (0.57)

(1) Contract revenue before special items, operating income (loss) before special items, Adjusted EBITDA from continuing operations before special items, Income (loss) from continuing operations before special items, Income (loss) from discontinued operations before special items, Net loss before special items and Diluted loss per share attributable to Company shareholders before special items 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 construction companies.  In addition, management believes results excluding these items are more indicative of the future operating prospects for Willbros as a consolidated company in 2016.

(2) Contract revenue, exited subsidiaries, operating income (loss), exited subsidiaries, Adjusted EBITDA from continuing operations, exited subsidiaries and (Income) loss from continuing operations, exited subsidiaries relate to the Company's historical Downstream Oil & Gas (including Fabrication services sold in the first quarter of 2016), Regional Delivery and Bemis subsidiaries.  They 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 construction companies.  In addition, management believes results excluding these items are more indicative of the future operating prospects for Willbros as a consolidated company in 2016.

(3) The Company recorded a provision for income taxes on discontinued operations in connection with the 2015 gains on sale of the Professional Services segment and its historical subsidiaries. The provision for income taxes in discontinued operations was fully offset with a benefit for income taxes in continuing operations through the utilization of prior year net operating losses.  The net effect on the Company's consolidated financial results was $-0-.