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Section 1: 8-K (8-K)

8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported) March 29, 2018

 

 

WILLBROS GROUP, INC.

(Exact Name of Registrant as Specified in Its Charter)

 

 

Delaware

(State or Other Jurisdiction of Incorporation)

 

1-34259   30-0513080

(Commission

File Number)

 

(IRS Employer

Identification No.)

4400 Post Oak Parkway, Suite 1000, Houston, Texas 77027

(Address of Principal Executive Offices) (Zip Code)

(713) 403-8000

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 2.02. Results of Operations and Financial Condition.

On March 29, 2018, Willbros Group, Inc. (the “Company”) issued a press release announcing fourth quarter and full year 2017 results. A copy of the press release dated March 29, 2018, is attached as Exhibit 99 to this Form 8-K.

This information is being furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

Item 9.01. Financial Statements and Exhibits.

 

  (d) The following exhibit is furnished herewith:

 

99    Press release dated March 29, 2018, issued by the Company.

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  WILLBROS GROUP, INC.
Date: April 3, 2018   By:  

/s/ Jeffrey B. Kappel

       Jeffrey B. Kappel
     

 Senior Vice President and Chief Financial Officer

 

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Section 2: EX-99 (EX-99)

EX-99

Exhibit 99

 

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Willbros Reports Fourth Quarter and Full Year 2017 Results

 

    Q1 2018 Backlog Additions of $212 Million for the Utility T&D Segment

 

    Willbros shares are now traded on the OTC under the symbol WGRP

 

    Due to the Recent Transaction Announcement with Primoris Services Corporation, No Conference Call will be Held

HOUSTON, TX, MARCH 29, 2018 — Willbros Group, Inc. (OTC:WGRP) today announced financial results for the fourth quarter and full year of 2017. The company reported a net loss in the fourth quarter of 2017 of $55.0 million, or $(0.89) per diluted share, on revenue of $217.9 million, compared to a net loss of $14.2 million, or $(0.23) per diluted share, on revenue of $164.4 million in the fourth quarter of 2016. For the full year 2017, the company reported a net loss of $108.1 million, or $(1.74) per diluted share, on revenue of $850.0 million, compared to a net loss of $47.8 million, or $(0.77) per diluted share, on revenue of $731.7 million for the full year of 2016.

Operating loss for the fourth quarter of 2017 was $49.1 million, compared to an operating loss of $27.8 million in the third quarter of 2017 and $12.1 million in the fourth quarter of 2016. The increase in the operating loss of $21.3 million compared to the third quarter of 2017 was primarily driven by a significant increase in losses associated with three mainline pipeline construction projects in the Oil & Gas segment. For the full year 2017, the company reported an operating loss of $91.3 million compared to a full year 2016 operating loss of $30.7 million. In January 2018, the company completed the sale of its tank services business and also reached agreement to sell assets comprising its mainline pipeline construction business.

On March 28, 2018, the company announced that it entered into a definitive agreement to be acquired by Primoris Services Corporation (NASDAQ:PRIM) (“Primoris”). The transaction has been unanimously approved by the Boards of Directors of both companies, is not subject to a financing condition, and is anticipated to close during the second quarter of 2018, subject to approval by the requisite vote of the Company’s stockholders and certain other closing conditions.

Michael J. Fournier, President and CEO, commented, “We look forward to working with Primoris to complete the transaction. The announced sale and additional liquidity of up to $20 million adds stability to the company as we move towards closing of this transaction.”

Segment Operating Results

Utility T&D

For the fourth quarter of 2017, the Utility T&D segment reported an operating loss of $9.6 million on revenue of $109.9 million compared to an operating loss of $7.5 million on revenue of $129.9 million in

 

 

 

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Stephen W. Breitigam

VP Investor Relations

Willbros

713-403-8172


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the third quarter of 2017. The fourth quarter 2017 operating results were impacted by losses on two large discrete projects. These discrete projects were completed in the first quarter of 2018. For the full year 2017, the segment reported an operating loss of $5.3 million on revenue of $507.0 million. For the full year 2016, the segment reported operating income of $15.6 million on revenue of $418.4 million.

Oil & Gas

For the fourth quarter of 2017, the Oil & Gas segment reported an operating loss of $35.0 million on revenue of $75.2 million compared to an operating loss of $14.8 million on revenue of $75.3 million in the third quarter of 2017. The fourth quarter 2017 operating results were impacted by a significant increase in losses associated with three mainline pipeline construction projects. Two of these projects have reached mechanical completion and the company reached a settlement to conclude the work on the third project in the first quarter of 2018. For the full year 2017, the segment reported an operating loss of $60.5 million on revenue of $221.9 million. For the full year 2016, the segment reported an operating loss of $16.8 million on revenue of $170.4 million.

Canada

For the fourth quarter of 2017, the Canada segment reported operating income of $1.3 million on revenue of $32.9 million, compared to an operating loss of $0.3 million on revenue of $35.6 million in the third quarter of 2017. The $1.6 million increase was primarily driven by high productivity on an integrity dig project and gross margin increases on the close-out of other discrete projects. For the full year 2017, the segment reported an operating loss of $4.0 million on revenue of $121.2 million. For the full year 2016, the segment reported an operating loss of $0.7 million on revenue of $143.1 million.

Corporate

For the full year 2017, the company recorded $21.5 million of corporate overhead costs compared to $28.8 million of corporate overhead costs for the full year 2016.

Backlog

At December 31, 2017, the company reported total backlog of $616.3 million compared to $741.3 million at September 30, 2017. Twelve-month backlog of $477.1 million at December 31, 2017 decreased $66.8 million from September 30, 2017. The decrease in total and twelve-month backlog is primarily related to a reduction in discrete projects in the Oil & Gas segment, as well as a reduction in MSA backlog in the Utility T&D segment due to the overall timing of renewal.

During the first quarter of 2018, the Utility T&D segment received $212 million in contract extensions or new awards, including a one-year contract extension with one of our key clients amounting to approximately $180 million. The remaining $32 million in awards consists of multiple MSA contract extensions and small discrete projects.

 

 

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CONTACT:

Stephen W. Breitigam

VP Investor Relations

Willbros

713-403-8172


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Liquidity

Total liquidity (defined as cash and cash equivalents plus revolver availability) was $48.8 million at December 31, 2017. Cash and cash equivalents totaled $33.5 million at December 31, 2017. As a result of the operating loss we incurred in the fourth quarter 2017, we have had a significant reduction in our liquidity during the first quarter of 2018. In order to address this decrease in liquidity, in March 2018 we obtained additional liquidity up to $20.0 million through an amendment to our Term Credit Agreement. This additional liquidity was provided by Primoris and is repayable if the transaction does not close.

In addition, in March 2018, we entered into forbearance agreements with our lenders as a result of noncompliance with certain default provisions, including the inability to deliver audited financial statements without a going concern explanation and the inability to meet certain future financial covenants. The forbearance agreements provide that our lenders will refrain from pursuing any remedies with respect to certain events of default under our credit agreements for a limited period as we work to complete the merger transaction and provided we comply with the provisions of the agreements.

Conference Call

As a result of Willbros’ pending transaction with Primoris, the company will not hold a conference call to discuss quarterly and full year results.

About Willbros

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 the company’s stockholders may not approve the transaction; the conditions to the completion of the transaction may not be satisfied, or any regulatory approvals required for the transaction may not be obtained on the terms expected, on the anticipated schedule, or at all; closing of the transaction may not occur or may be delayed, either as a result of litigation related to the transaction or otherwise; the parties may be unable to achieve the anticipated benefits of the transaction; completing the merger may distract the company’s management from other important matters; inability to obtain additional waivers, amendments or other forbearance under the company’s existing loan agreements; inability to achieve anticipated margins on fixed price contracts; unanticipated accounting or other issues regarding any material weaknesses in internal control over financial reporting; 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; the existence

 

 

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CONTACT:

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Willbros

713-403-8172


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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 and 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.

SCHEDULES TO FOLLOW

###

 

 

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CONTACT:

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VP Investor Relations

Willbros

713-403-8172


WILLBROS GROUP, INC.

(In thousands, except per share amounts)

 

     Three Months Ended
December 31,
    Year Ended
December 31,
 
     2017     2016     2017     2016  

Income Statement

        

Contract revenue

        

Utility T&D

   $ 109,881     $ 105,321     $ 506,978     $ 418,387  

Canada

     32,876       35,797       121,151       143,140  

Oil & Gas

     75,191       23,274       221,939       170,448  

Eliminations

     (85     —         (85     (290
  

 

 

   

 

 

   

 

 

   

 

 

 
     217,863       164,392       849,983       731,685  

Operating expenses

        

Utility T&D

     119,455       103,236       512,259       402,820  

Canada

     31,571       37,561       125,196       143,790  

Oil & Gas

     110,160       29,038       282,444       187,231  

Corporate

     5,819       6,697       21,510       28,795  

Eliminations

     (85     —         (85     (290
  

 

 

   

 

 

   

 

 

   

 

 

 
     266,920       176,532       941,324       762,346  

Operating income (loss)

        

Utility T&D

     (9,574     2,085       (5,281     15,567  

Canada

     1,305       (1,764     (4,045     (650

Oil & Gas

     (34,969     (5,764     (60,505     (16,783

Corporate

     (5,819     (6,697     (21,510     (28,795
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating loss

     (49,057     (12,140     (91,341     (30,661

Non-operating expenses

        

Interest expense

     (5,045     (3,543     (16,017     (13,976

Interest income

     8       8       31       451  

Debt covenant suspension and extinguishment charges

     —         —         —         (63

Other, net

     (298     (63     (296     (63
  

 

 

   

 

 

   

 

 

   

 

 

 
     (5,335     (3,598     (16,282     (13,651
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from continuing operations before income taxes

     (54,392     (15,738     (107,623     (44,312

Benefit (provision) for income taxes

     701       (1,676     (964     (530
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from continuing operations

     (55,093     (14,062     (106,659     (43,782

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

     72       (141     (1,436     (3,977
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

   $ (55,021   $ (14,203   $ (108,095   $ (47,759
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic loss per share attributable to Company shareholders:

        

Continuing operations

   $ (0.89   $ (0.23   $ (1.72   $ (0.71

Discontinued operations

     —         —         (0.02     (0.06
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ (0.89   $ (0.23   $ (1.74   $ (0.77
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted loss per share attributable to Company shareholders:

        

Continuing operations

   $ (0.89   $ (0.23   $ (1.72   $ (0.71

Discontinued operations

     —         —         (0.02     (0.06
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ (0.89   $ (0.23   $ (1.74   $ (0.77
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash Flow Data

        

Continuing operations

        

Cash provided by (used in)

        

Operating activities

   $ (28,066   $ (3,760   $ (49,623   $ (11,992

Investing activities

     301       4,204       2,581       10,843  

Financing activities

     30,963       (45     40,115       (8,615

Foreign exchange effects

     (232     (649     823       (29

Discontinued operations

     (788     (589     (1,844     (7,619

Other Data

        

Weighted average shares outstanding

        

Basic

     62,330       61,683       62,161       61,365  

Diluted

     62,330       61,683       62,161       61,365  

Adjusted EBITDA from continuing operations(1)

   $ (43,928   $ (6,414   $ (70,882   $ (2,755

Purchases of property, plant and equipment

     318       1,266       2,450       3,794  

Reconciliation of Non-GAAP Financial Measures

        

Adjusted EBITDA from continuing operations (1)

        

Loss from continuing operations

   $ (55,093   $ (14,062   $ (106,659   $ (43,782

Interest expense

     5,045       3,543       16,017       13,976  

Interest income

     (8     (8     (31     (451

Benefit (provision) for income taxes

     701       (1,676     (964     (530

Depreciation and amortization

     4,562       5,225       19,162       21,919  

Debt covenant suspension and extinguishment charges

     —         —         —         63  

Stock based compensation

     738       858       2,859       4,127  

Restructuring and reorganization costs

     804       346       1,339       4,933  

Accounting and legal fees associated with the restatements

     19       18       636       (24

Gain on disposal of equipment

     (696     (585     (3,241     (3,436

Fort McMurray wildfire related costs (income)

     —         (73     —         450  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA from continuing operations(1)

   $ (43,928   $ (6,414   $ (70,882   $ (2,755
  

 

 

   

 

 

   

 

 

   

 

 

 
  

 

 

   

 

 

   

 

 

   

 

 

 


     December 31,
2017
    September 30,
2017
     June 30,
2017
     March 31,
2017
 

Balance Sheet Data

          

Cash and cash equivalents

   $ 33,472     $ 31,294      $ 41,249      $ 36,693  

Working capital

     (83,884     56,620        84,033        75,756  

Total assets

     363,877       400,553        382,108        366,285  

Total debt

     133,283       100,927        88,179        87,466  

Stockholders’ equity

     31,708       86,295        118,624        118,614  

Backlog Data (2)

          

12 Month Backlog by Reporting Segment

          

Utility T&D

   $ 307,122     $ 329,531      $ 355,480      $ 362,749  

Canada

     51,714       55,127        75,051        77,918  

Oil & Gas

     118,278       159,213        116,366        87,750  
  

 

 

   

 

 

    

 

 

    

 

 

 

12 Month Backlog

   $ 477,114     $ 543,871      $ 546,897      $ 528,417  
  

 

 

   

 

 

    

 

 

    

 

 

 

12 Month Backlog exclusive of Tank Services & Mainline Pipeline Construction Services

          

12 Month Backlog, as reported

   $ 477,114     $ 543,871      $ 546,897      $ 528,417  

Mainline Pipeline Construction Services 12 Month Backlog

     20,734       47,123        58,097        45,084  

Tank Services 12 Month Backlog

     18,258       21,099        26,351        28,813  
  

 

 

   

 

 

    

 

 

    

 

 

 

12 Month Backlog, exclusive of Tank Services and Mainline Pipeline Construction Services

   $ 438,122     $ 475,649      $ 462,449      $ 454,520  
  

 

 

   

 

 

    

 

 

    

 

 

 

Total By Reporting Segment

          

Utility T&D

   $ 387,284     $ 459,417      $ 540,876      $ 605,706  

Canada

     110,770       122,644        151,336        158,999  

Oil & Gas

     118,278       159,213        116,366        87,750  
  

 

 

   

 

 

    

 

 

    

 

 

 

Total Backlog

   $ 616,332     $ 741,274      $ 808,578      $ 852,455  
  

 

 

   

 

 

    

 

 

    

 

 

 

Total Backlog exclusive of Tank Services & Mainline Pipeline Construction Services

          

Total Backlog, as reported

   $ 616,332     $ 741,274      $ 808,578      $ 852,455  

Mainline Pipeline Construction Services Total Backlog

     20,734       47,123        58,097        45,084  

Tank Services Total Backlog

     18,258       21,099        26,351        28,813  
  

 

 

   

 

 

    

 

 

    

 

 

 

Total Month Backlog, exclusive of Tank Services and Mainline Pipeline Construction Services

   $ 577,340     $ 673,052      $ 724,130      $ 778,558  
  

 

 

   

 

 

    

 

 

    

 

 

 

 

(1) Adjusted EBITDA from continuing operations is defined as income (loss) from continuing operations before interest expense (income), 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.
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