Willbros Reports Second Quarter 2014 Results from Continuing Operations

HOUSTON, Aug. 4,2014 /PRNewswire/ --Willbros Group, Inc. (NYSE: WG) announced today results from continuing operations for the second quarter of 2014. The Company reported net income from continuing operations of $7.0 million, or $0.14 per diluted share, on revenue of $543.6 million, compared to a net loss from continuing operations in the second quarter of 2013 of $2.6 million, or $0.05 per share, on revenue of $435.8 million. Second quarter results included a non-cash debt extinguishment charge of $948 thousand, or $0.02 per share. The Company reported operating income of $18.5 million, a $12.2 million improvement compared to operating income of $6.3 million in the second quarter of 2013. Adjusted EBITDA⁽¹⁾ of $28.3 million for the second quarter of 2014 was a $9.8 million improvement from the same period last year.

Randy Harl, Chief Executive Officer, commented, "We continue to deliver more stable and predictable results and our second quarter performance reflects the benefit of having a diversified business model, with broad end-market exposure. Our operating results again improved quarter-over-quarter and exceeded any quarter in the last four years. Three of our four segments continue to generate strong operating performance. Canada delivered record second quarter results with operating margins of 11.0 percent, even with the Spring breakup.

"We had a $14.0 million operating income improvement in the Oil & Gas segment over the second quarter of 2013. As we anticipated, our regional delivery services business became profitable for the first time since 2012."

Segment Operating Results

Oil & Gas
For the second quarter of 2014, the Oil & Gas segment reported contract revenue of $237.8 million, an increase of $103.4 million compared to the second quarter of 2013. The operating loss of $7.8 million was an improvement of $14.0 million from the second quarter of 2013. This improvement was primarily driven by the return to profitability in the regional service lines, reflectingtheCompany's focus on larger midstream opportunities and right-sizing the regional offices to align resources with the markets whereit can be successful. However, cost increases on one project in Oil & Gas led to a loss for the segment.

Utility T&D
Distribution related revenue and operating margins increased as the segment expands its geographic footprint in areas adjacent to Texas and along the Atlantic seaboard. For the second quarter of 2014, the Utility T&D segment reported operating income of $9.0 million on revenue of $111.9 million compared to operating income of $15.6 million on revenue of $128.3 million in the second quarter of 2013. The Company is successfully transitioning to a more balanced customer base for transmission and distribution services.

Canada
The Canada segment delivered another strong quarter of operating results in what is historically a seasonally weaker quarter due to the Spring breakup. Canada reported a record second quarter operating income of $10.5 million, with operating margins of 11.0 percent, on revenue of $95.3 million compared to operating income of $4.3 million, with operating margins of 4.9 percent, on revenue of $87.4 million in the second quarter of 2013. Canada continues to benefit from its focus on the oil sands mining and in-situ markets.

Professional Services
Revenue generated by the Professional Services segment increased 14.8 percent to $100.4 million compared to $87.4 million in the second quarter of 2013. The segment reported operating income of $6.9 million, a decrease of $1.3 million compared to the second quarter of 2013. The decrease quarter-over-quarter was driven by the delayed start on a government services fueling facility. Strong execution and operational performance on EPC projects, as well as higher margins in locating and integrity field services, partially offset the impact ofthis delay. The Company continues to expect that the investments made in new offices and technology will result in margin improvement going forward.

Backlog⁽²⁾
At June 30, 2014, Willbros total backlog was $1.7 billion compared to $1.9 billion at March 31, 2014, primarily due to the continued work-off of long-term master service agreements, which are subject to renewal options in future years, as well as the burn-off of backlog on several significant Oil & Gas projects during the quarter. At June 30, 2014, twelve month backlog also decreased slightly to $943.8 million from $1.0 billion at March 31, 2014.

Liquidity
At June 30, 2014, the Company had $28.3 million of cash and cash equivalents. As previously indicated, the Company borrowed $30.0 million on its revolver during the second quarter to finance working capital increases due to seasonal work levels, major projects and growth in revenue. Unused availability under our revolver at June 30, 2014 was $47.1 million on a borrowing base of $142.9 million. With letters of credit outstanding of $65.8 million, total liquidity at June 30, 2014 was $75.4 million.

Conference Call
In conjunction with this release, Willbros has scheduled a conference call, which will be broadcast live over the Internet, on Tuesday, August 5, 2014 at 9:00 a.m. Eastern Time (8:00 a.m. Central).

What:	Willbros Second Quarter Earnings Conference Call
When:	Tuesday, August 5, 2014 - 9:00 a.m. Eastern Time
How:	Live via phone - By dialing 719-325-2244 or 888-510-1785 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.

For those who cannot listen to the live call, a replay will be available through August 12, 2014 and may be accessed by calling 719-457-0820 or 888-203-1112 using pass code 8525159#. 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, 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 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.

	CONTACT:
Michael W. Collier	Connie Dever
Senior Vice President	Director Investor Relations
Corporate Communications	Willbros
Willbros	713-403-8035
713-403-8038

TABLE TO FOLLOW

WILLBROS GROUP, INC.
(In thousands, except per share amounts)
					Three Months Ended				Six Months Ended
					June 30,				June 30,
					2014		2013		2014		2013
Income Statement
	Contract revenue
		Oil & Gas			$ 237,777		$ 134,368		$ 431,831		$ 302,904
		Utility T&D			111,936		128,321		208,269		241,525
		Canada			95,277		87,425		212,356		199,420
		Professional Services			100,395		87,423		187,820		165,888
		Eliminations			(1,828)		(1,692)		(3,335)		(2,981)
					543,557		435,845		1,036,941		906,756
	Operating expenses
		Oil & Gas			245,626		156,198		441,860		339,209
		Utility T&D			102,968		112,693		199,532		224,004
		Canada			84,796		83,117		189,302		184,605
		Professional Services			93,489		79,238		178,676		157,090
		Eliminations			(1,828)		(1,692)		(3,335)		(2,981)
					525,051		429,554		1,006,035		901,927
	Operating income (loss)
		Oil & Gas			(7,849)		(21,830)		(10,029)		(36,305)
		Utility T&D			8,968		15,628		8,737		17,521
		Canada			10,481		4,308		23,054		14,815
		Professional Services			6,906		8,185		9,144		8,798
	Operating income				18,506		6,291		30,906		4,829
	Other expense
		Interest expense, net			(7,477)		(7,419)		(15,195)		(15,109)
		Loss on early extinguishment of debt			(948)		-		(948)		-
		Other, net			(151)		(308)		(111)		(77)
					(8,576)		(7,727)		(16,254)		(15,186)
	Income (loss) from continuing operations before income taxes				9,930		(1,436)		14,652		(10,357)
	Provision for income taxes				2,962		1,126		6,297		3,738
	Income (loss) from continuing operations				6,968		(2,562)		8,355		(14,095)
	Income (loss) from discontinued operations net of provision for income taxes				(10,620)		(4,339)		(18,614)		11,386
	Net loss				$ (3,652)		$ (6,901)		$ (10,259)		$ (2,709)
	Basic income (loss) per share attributable to Company shareholders:
		Continuing operations			$ 0.14		$ (0.05)		$ 0.17		$ (0.29)
		Discontinued operations			(0.22)		(0.09)		(0.38)		0.24
					$ (0.08)		$ (0.14)		$ (0.21)		$ (0.05)
	Diluted income (loss) per share attributable to Company shareholders:
		Continuing operations			$ 0.14		$ (0.05)		$ 0.17		$ (0.29)
		Discontinued operations			(0.21)		(0.09)		(0.37)		0.24
					$ (0.07)		$ (0.14)		$ (0.20)		$ (0.05)
Cash Flow Data
Continuing operations
	Cash provided by (used in)
		Operating activities			$ (47,798)		$ 30,611		$ (48,084)		$ 5,512
		Investing activities			22,367		(2,031)		41,626		34,741
		Financing activities			3,577		14,889		(19,583)		(44,009)
		Foreign exchange effects			717		(291)		(106)		(519)
Discontinued operations					(4,466)		734		10,811		3,505
Other Data (Continuing Operations)
	Weighted average shares outstanding
		Basic			49,337		48,587		49,093		48,447
		Diluted			49,779		48,587		49,726		48,447
	Adjusted EBITDA from continuing operations(1)				$ 28,301		$ 18,505		$ 51,362		$ 27,361
	Purchases of property, plant and equipment				4,718		1,674		8,353		4,600
Reconciliation of Non-GAAP Financial Measure
	Adjusted EBITDA from continuing operations (1)
		Income (loss) from continuing operations			$ 6,968		$ (2,562)		$ 8,355		$ (14,095)
		Interest expense, net			7,477		7,419		15,195		15,109
		Provision for income taxes			2,962		1,126		6,297		3,738
		Depreciation and amortization			9,395		10,444		18,559		20,726
		Loss on early extinguishment of debt			948		-		948		-
		Stock based compensation			2,030		1,958		4,509		2,761
		Restructuring and reorganization costs			-		58		220		154
		(Gain) loss on disposal of property and equipment			(1,479)		62		(2,721)		(1,032)
		Adjusted EBITDA from continuing operations(1)			$ 28,301		$ 18,505		$ 51,362		$ 27,361
Balance Sheet Data					6/30/2014		3/31/2014		12/31/2013
	Cash and cash equivalents				$ 28,274		$ 53,877		$ 42,569
	Working capital				235,152		233,483		248,086
	Total assets				842,394		865,588		870,668
	Total debt				258,103		254,094		277,208
	Stockholders' equity				179,333		180,328		188,774
Backlog Data (2)
	Total By Reporting Segment
		Oil & Gas			$ 297,011		$ 343,493		$ 368,776
		Utility T&D			946,321		990,004		978,535
		Canada			255,812		285,364		365,946
		Professional Services			213,557		256,594		256,981
	Total Backlog				$1,712,701		$1,875,455		$1,970,238
	Total Backlog By Geographic Area
		United States			$1,453,981		$1,586,092		$1,599,796
		Canada			255,812		285,364		365,946
		Other International			2,908		3,999		4,496
	Total Backlog				$1,712,701		$1,875,455		$1,970,238
	12 Month Backlog				$ 943,824		$1,044,037		$1,039,386

(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.

SOURCE Willbros Group, Inc.