HOUSTON, July 29, 2016 /PRNewswire/ — Willbros Group, Inc. (NYSE: WG) today reported a second quarter 2016 net loss of $6.4 million, or $(0.10) per share, on revenue of $193.4 million, compared to a net loss of $18.9 million, or $(0.32) per share, in the second quarter of 2015 on revenue of $218.8 million. Net loss before special items was $5.4 million, or $(0.09) per share, in the second quarter of 2016, compared to a net loss before special items in the second quarter of 2015 of $7.8 million, or $(0.13) per share, and a $9.2 million net loss before special items, or $(0.16) per share, in the first quarter of 2016.
An operating loss of $2.7 million in the second quarter of 2016 compares to a $13.0 million operating loss in the second quarter of 2015, a $10.3 million improvement, and a $9.5 million operating loss in the first quarter of 2016, a $6.8 million improvement. The Company’s second quarter of 2016 operating results include other charges totaling $1.4 million, primarily related to employee severance, equipment impairment and idle equipment costs related to extensive forest fires in Canada, and a $0.2 million gain related to a business that we have exited. Excluding these special items, the operating loss before special items was $1.5 million in the second quarter of 2016, which represents a $3.6 million improvement from the Company’s operating loss before special items of $5.1 million in the first quarter of 2016. Adjusted EBITDA from continuing operations before special items for the second quarter of 2016 was $2.9 million, a $2.1 million improvement from Adjusted EBITDA from continuing operations before special items in the first quarter of 2016.
On July 26, 2016, the Company reached agreement with its lender to amend the financial covenants associated with its Term Loan. These amendments provide for a covenant holiday for the remainder of 2016 and less stringent covenants for all of 2017.
Michael J. Fournier, President and CEO, commented, “While our second quarter operating results were in line with our expectations, we elected to provide further cushion on covenants via an amendment to our term loan facility. We believe this covenant amendment also addresses potential concerns that some clients may have had in considering longer term project awards. We believe we have positioned ourselves well to compete in the current market and benefit when the oil and gas markets recover. This was accomplished by reducing corporate G&A, rightsizing our core businesses without eliminating capabilities and by allocating resources to areas of the business where we see short term growth opportunities. Despite current headwinds in the oil and gas markets, we are optimistic regarding 2017 opportunities.”
Included in this press release are certain non-GAAP financial measures, including revenue, operating income (loss), net income (loss) and Adjusted EBITDA from continuing operations before special items. A related reconciliation of each of these non-GAAP measures is included in the accompanying schedules.
At June 30, 2016, Willbros reported total backlog of $672.0 million, a decrease of $111.3 million from the March 31, 2016 balance. Twelve month backlog of $373.2 million at June 30, 2016 compares to $457.3 million at March 31, 2016. A substantial portion of the total backlog decline is attributable to the expiration of existing multi-year MSA contracts. We will rebid these MSA’s as they come up for renewal but we do not include these new contracts in backlog until they are signed. To a lesser degree, the erosion in twelve month backlog is being affected by Canadian MSA contracts that expire at the end of 2016.
Segment Operating Results
Utility T&D generated revenue of approximately $109.4 million in the second quarter of 2016, a 12% increase from the first quarter of 2016. The segment reported an operating loss of $0.5 million in the second quarter of 2016. The segment reported an operating loss before special items of $0.4 million, or a $2.9 million reduction from the first quarter of 2016 operating income before special items.
Oil & Gas
For the second quarter of 2016, the Oil & Gas segment generated revenue of $54.7 million, an 8% decrease when compared to the first quarter of 2016. The segment reported an operating loss of $2.3 million in the second quarter of 2016. The segment reported an operating loss before special items of $2.2 million, or a $4.3 million improvement from the first quarter of 2016 operating loss before special items.
The Canada segment generated revenue of $29.5 million for the second quarter of 2016, a $13 million reduction from the first quarter of 2016, partially due to the impact of the forest fires. The segment reported operating income of $0.1 million in the second quarter of 2016. The segment reported operating income before special items of $1.2 million, or a $2.2 million improvement from the first quarter of 2016 operating loss before special items.
Liquidity and Debt
Total liquidity (defined as cash and cash equivalents plus revolver availability) remained relatively flat compared to the end of the first quarter of 2016 and totaled $84.5 million at June 30, 2016 including $48.7 million of cash and cash equivalents. There were no revolver borrowings at June 30, 2016.
At June 30, 2016, the principal amount due on the term loan remained unchanged from the prior quarter at $92.2 million.
Van Welch, Willbros Chief Financial Officer, commented, “Both our Oil & Gas and Canadian businesses continue to face difficult challenges in this current market. Therefore, for 2016, we now expect annual revenue to range between $750 million to $800 million.”
In conjunction with this release, Willbros has scheduled a conference call, which will be broadcast live over the Internet, on Monday, August 1, 2016 at 10:00 a.m. Eastern Time (9:00 a.m. Central Time).
For those who cannot listen to the live call, a replay will be available through August 08, 2016 and may be accessed by calling 877-660-6853 or 201-612-7415 using pass code 13639813#. Also, an archive of the webcast will be available shortly after the call on www.willbros.com.
Willbros is a specialty energy infrastructure contractor serving the oil and gas and power industries with offerings that primarily include construction, maintenance and facilities development 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 unanticipated accounting or other issues regarding any material weaknesses in internal control over financial reporting; inability of the Company or its independent auditor to confirm relevant information or data; unanticipated issues that prevent or delay the Company’s independent auditor from completing its review of financial statements or that require additional efforts, procedures or review; the untimely filing of financial statements; pending and potential investigations and lawsuits; the identification of one or more issues that require restatement of one or more other prior period financial statements; ability to remain in compliance with, or obtain additional waivers or amendments under, the Company’s existing loan agreements; the existence of other material weaknesses in internal control over financial reporting; contract and billing disputes; availability of quality management; availability and terms of capital; changes in, or the failure to comply with, government regulations; 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; development trends of the oil, gas, and power 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.
Stephen W. Breitigam
VP Investor Relations
SOURCE Willbros Group, Inc.