Willbros Group, Inc. announced results for the fourth quarter and full year 2009. For the full year 2009, Willbros reported net income from continuing operations of $19.3 million, or $0.50 per basic and diluted share, on revenue of $1.3 billion. The full year results for 2009 were impacted by increased margin pressure, charges associated with right-sizing the organization and lower than anticipated utilization rates due to delays and cancellations of anticipated projects. In the fourth quarter, the Company recorded a loss from continuing operations, as previously anticipated, of $8.3 million, or $0.21 per share, on revenue of $193.9 million, primarily due to a lack of pipeline construction activity and additional charges associated with cost reductions, high levels of bidding activity, DOJ monitor costs and deal activity. Additionally, the Company held people and equipment for the start of the Fayetteville Express Pipeline project which has begun mobilization. Current markets remain challenging, especially with respect to timing of anticipated capital projects in the Downstream Oil & Gas segment. Fundamentals support strengthening levels of U.S. and Canadian pipeline projects beginning in the latter half of 2010 and into 2011 and 2012.

Randy Harl, President and Chief Executive Officer, explained, “On the whole, our fourth quarter results were in-line with our expectations; however, we elected to take additional other charges that will result in cost savings going forward. Even in the face of a severe market contraction, we have had a profitable year which I attribute to the disciplined efforts of our people as we adhere to our values and guide the Company through turbulent times. We are successfully expanding our alliance programs and our initiatives to re-enter international markets and are seeing the first of many awards we expect for our Government Services unit. Additionally, we will continue to improve our systems, processes and execution skills, positioning the Company for growth opportunities.”

Segment Operating Results

The Upstream Oil & Gas segment reported operating income for the full year 2009 of $36.9 million on revenue of $982.6 million. For the fourth quarter of 2009, Upstream Oil & Gas reported an operating loss of $9.9 million on revenue of $128.5 million. Operating results were impacted by a slow-down in both Canada and U.S. pipeline construction, bidding costs and other charges associated with cost savings initiatives. The Downstream Oil & Gas segment reported full year operating income of $0.5 million on revenue of $277.3 million. For the fourth quarter of 2009, the Downstream segment reported an operating loss of $1.2 million on revenue of $65.4 million. The Downstream results for both the fourth quarter and the year were negatively impacted by curtailment of customer spending for small capital projects and maintenance in the refining sector and other charges associated with cost savings initiatives.

Organizational Alignment

For 2009, the Company incurred other charges of $12.7 million comprised of severance, accelerated stock vesting and lease abandonment charges to realign for changing market conditions. Total savings related to cost reductions in 2009 should result in annualized savings of approximately $46.1 million going forward. Management believes the significant process and systems improvements the Company has made over the last two years can be sustained once market activity increases.

Van Welch, Senior Vice President and Chief Financial Officer, commented, “Our processes and procedures to identify, price and manage the risk in fixed price work have been imbedded in the business model and successfully tested over the past four years. We will continue improving and adhering to these important management tools to ensure that the work we win and negotiate meets all our criteria to identify contractual and execution risks in any new work undertaken. We believe we have instilled the discipline to price, accept and book only work which meets stringent criteria for the Company’s commercial success and profitability.”

Strategic Initiatives

Willbros noted that its focus on diversification of its business model continues to provide new revenue opportunities as bid and work volumes increase in the Government Services, Pipeline Manage & Maintain and Pipeline Specialty Services businesses. Increased bid activities in these areas, as well as recent awards across business segments, have improved management’s visibility into the first half of 2010. Additionally, management believes the Company is entering a critical period with respect to the award and pricing of construction bids tendered but not yet awarded.

Randy Harl, President and CEO, commented, “We view the success we have had over the past four years as critical to preparing the Company for this new business environment; one hastened by the financial events of the past two years. Our focus on introducing and proving more robust and effective controls, processes and procedures will continue, and we are confident that we will be advantaged in our pursuit of expansion into new markets and new services to meet the growth objectives of our strategy. Our view of the opportunities for Willbros remains positive and we expect to see improvement across our business lines by the end of the second quarter 2010. While the market for large diameter pipeline construction in the U.S. and Canada is not as robust as it has been in the recent past, we have the ability to pursue opportunities in global markets such as North Africa, the Middle East and Australia.”

Backlog(1)

At December 31, 2009, Willbros reported backlog from continuing operations of $391.7 million compared to $501.4 million at September 30, 2009; approximately 37 percent of backlog was cost reimbursable contracts.

Conference Call

In conjunction with this release, Willbros has scheduled a conference call, which will be broadcast live over the Internet on Thursday, March 11, 2010 at 9:00 a.m. Eastern Time (8:00 a.m. Central).

What:    Willbros Group, Inc. Fourth Quarter and Full Year 2009 Earnings Conference Call
When:    Thursday, March 11, 2010 - 9:00 a.m. Eastern Time
Where:   Live via phone by dialing               888-277-7138         888-277-7138 or               913-312-1477         913-312-1477, passcode 1845874, and asking for the Willbros call at least 10 minutes prior to the start time.
Where:   Live over the Internet by logging onto www.willbros.com  on the home page under Events.

A telephonic replay of the conference call will be available through March 12, 2010 and may be accessed by calling               888-203-1112         888-203-1112 or               719-457-0820         719-457-0820 and using the passcode 1845874. Also, an archive of the webcast will be available shortly after the call on www.willbros.com  for a period of 12 months.

Willbros Group, Inc. is an independent contractor serving the oil, gas, power, refining and petrochemical industries, providing engineering, construction, turnaround, maintenance, life-cycle extension services and facilities development and operations services to industry and government entities worldwide. For more information on Willbros, please visit our web site at www.willbros.com.

Source: Willbros

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