Guidance Unchanged as Market Dynamics Point to
Improving Award Environment
Williams Industrial Services Group Inc. (NYSE American: WLMS)
(“Williams” or the “Company”), an energy and industrial
infrastructure services company, today reported its financial
results for the fiscal first quarter ended March 31, 2022.
Recent Highlights
- Williams posted revenue of $69.6 million in the first quarter
of 2022 compared with $60.9 million in the prior-year period
- The Company reported a net loss from continuing operations of
$2.0 million, or $(0.08) per diluted share, in the first quarter of
2022 compared with a net loss from continuing operations of $1.6
million, or $(0.06) per diluted share, in the first quarter of
2021
- Adjusted EBITDA1 was $0.1 million for the first quarter of 2022
compared with $0.6 million in the prior-year period
- As of March 31, 2022, the Company’s backlog was $257.0 million,
compared to $270.7 million as of December 31, 2021 (excluding
approximately $361 million of decommissioning work subsequently
transferred to a competitor, as previously announced);
approximately $139 million of the March 31, 2022 backlog is
expected to be converted to revenue over the following twelve
months
- The Company announced its financial guidance for fiscal 2022
remains unchanged
“As anticipated, the first quarter of 2022 was negatively
impacted by downward pressure on margins related to residual
operating challenges in our Florida water business as well as
start-up costs associated with expanding service to the energy
delivery end market,” said Tracy Pagliara, President and CEO of
Williams. “However, we saw a decline in general and administrative
expenses both year-over-year and sequentially, even as we
recognized $0.7 million of one-time expenses for litigation against
a former employee and competitor during the first quarter of 2022.
We are squarely focused on reducing expenses and improving bottom
line results going forward.
“We added $38 million in new orders during the quarter and
believe this is just the beginning of robust opportunities ahead.
The prospects for nuclear power are being enhanced by the clean
energy mandate, national security concerns and federal and
state-level subsidies, including $6 billion of Infrastructure
Investment and Jobs Act ('IIJA') funding designed to extend the
life of existing nuclear facilities. Moreover, the capital budgets
of our utility and municipality customers are substantial, and the
IIJA will also add more than $45 billion of supplemental
investments to enhance water and power grid infrastructure in the
coming years. Overall, we are experiencing increased demand for our
services, with strengthening market dynamics expected to benefit
Williams for the foreseeable future. Accordingly, we are
reiterating our 2022 financial guidance.”
First Quarter 2022 Financial Results Compared to First
Quarter 2021
Revenue in the first quarter, typically the lightest period of
the fiscal year due to seasonal work factors, was $69.6 million
compared with $60.9 million in the first quarter of 2021, largely
reflecting an increase in nuclear and water work. Gross profit was
$5.7 million, or 8.2% of revenue, compared with $6.1 million, or
10.0% of revenue, in the prior-year period, with the lower margin
primarily due to changes in project mix, including the ongoing
impact of certain contracts in Florida, as previously announced,
which will reach completion in the fourth quarter of 2022, and
start-up costs tied to the Company’s further expansion into the
energy delivery market. Excluding the aforementioned business
start-up expenses and negative impact from the Company’s Florida
water projects, adjusted gross margin would have been 10.5% of
revenue.
Operating expenses were $6.5 million compared with $6.6 million
in the first quarter of 2021, reflecting lower general and
administrative expenses, inclusive of $0.7 million in professional
fees relating to an ongoing legal matter. The Company reported an
operating loss of $0.8 million versus $0.5 million in the
prior-year period. Interest expense was $1.2 million in the first
quarter of 2022 versus $1.3 million in 2021.
The Company reported a net loss from continuing operations of
$2.0 million, or $(0.08) per diluted share, in the first quarter of
2022 compared with a net loss from continuing operations of $1.6
million, or $(0.06) per diluted share, in the prior-year
period.
Balance Sheet
The Company’s total liquidity (the sum of unrestricted cash and
availability under the Company’s revolving credit facility) was
$26.1 million as of March 31, 2022, versus $27.7 million at the
beginning of 2022. As of March 31, 2022, the Company had $4.3
million of unrestricted cash and cash equivalents, $0.5 million of
restricted cash, and $31.3 million of bank debt compared with $2.5
million of unrestricted cash and cash equivalents, $0.5 million of
restricted cash, and $32.1 million of bank debt as of December 31,
2021.
Backlog
Total backlog as of March 31, 2022 was $257.0 million compared
with $270.7 million on December 31, 2021, after deducting
approximately $361 million of decommissioning work through 2029
which was subsequently transferred to a competitor, as previously
announced. During the first quarter of 2022, the Company recognized
revenue of $69.6 million, booked new awards of $38.3 million, and
(inclusive of the aforementioned contracts) saw net adjustments and
cancellations of $343.5 million.
Three Months Ended March 31,
2022
Backlog - beginning of period
$
631,693
New awards
38,293
Adjustments and cancellations, net
(343,471
)
Revenue recognized
(69,559
)
Backlog - end of period
$
256,956
Williams estimates that approximately $139 million of its
quarter-end backlog will be converted to revenue within the next
twelve months, compared with an adjusted $157.2 million of backlog
(after the loss of the aforementioned decommissioning contracts) as
of December 31, 2021 that the Company anticipated would be
converted to revenue over the succeeding twelve-month period.
Outlook
The Company confirmed that guidance previously provided January
28, 2022 for the current fiscal year remains unchanged.
2022 Guidance
Revenue:
$305 million to $325 million
Gross margin:
10.5% to 11.0%
SG&A:
8.75% to 9.25% of revenue (8.25% to 8.75%
excluding investments in upgrading systems)
Adjusted EBITDA*
$10.0 million to $12.5 million
*See Note 1 — Non-GAAP Financial Measures for information
regarding the use of Adjusted EBITDA and forward-looking non-GAAP
financial measures.
Webcast and Teleconference
The Company will host a conference call tomorrow, May 13, 2022,
at 10:00 a.m. Eastern time. A webcast of the call and an
accompanying slide presentation will be available at
www.wisgrp.com. To access the conference call by telephone,
listeners should dial 201-493-6780.
An audio replay of the call will be available later that day by
dialing 412-317-6671 and entering conference ID number 13728732;
alternatively, a webcast replay can be found at
http://ir.wisgrp.com/, where a transcript will be posted once
available.
About Williams
Williams Industrial Services Group has been safely helping plant
owners and operators enhance asset value for more than 50 years.
The Company is a leading provider of infrastructure related
services to blue-chip customers in energy and industrial end
markets, including a broad range of construction maintenance,
modification, and support services. Williams’ mission is to be the
preferred provider of construction, maintenance, and specialty
services through commitment to superior safety performance, focus
on innovation, and dedication to delivering unsurpassed value to
its customers.
Additional information about Williams can be found on its
website: www.wisgrp.com.
Forward-looking Statement Disclaimer
This press release contains “forward-looking statements” within
the meaning of the term set forth in the Private Securities
Litigation Reform Act of 1995. The forward-looking statements
include statements or expectations regarding the Company’s ability
to perform in accordance with guidance, build and diversify its
backlog and convert backlog to revenue, realize opportunities,
including receiving contract awards on outstanding bids and
successfully pursuing future opportunities, benefit from potential
growth in the Company’s end markets, including from increased
infrastructure spending by the U.S. federal government, and
successfully achieve its growth, strategic and business development
initiatives, including decreasing the Company’s outstanding
indebtedness, future demand for the Company’s services, and
expectations regarding future revenues, cash flow, and other
related matters. These statements reflect the Company’s current
views of future events and financial performance and are subject to
a number of risks and uncertainties, including the Company’s level
of indebtedness and ability to make payments on, and satisfy the
financial and other covenants contained in, its debt facilities, as
well as its ability to engage in certain transactions and
activities due to limitations and covenants contained in such
facilities; its ability to generate sufficient cash resources to
continue funding operations, including investments in working
capital required to support growth-related commitments that it
makes to customers, and the possibility that it may be unable to
obtain any additional funding as needed or incur losses from
operations in the future; exposure to market risks from changes in
interest rates; the Company’s ability to obtain adequate surety
bonding and letters of credit; the Company’s ability to maintain
effective internal control over financial reporting and disclosure
controls and procedures; the Company’s ability to attract and
retain qualified personnel, skilled workers, and key officers;
failure to successfully implement or realize its business
strategies, plans and objectives of management, and liquidity,
operating and growth initiatives and opportunities, including any
expansion into new markets and its ability to identify potential
candidates for, and consummate, acquisition, disposition, or
investment transactions; the loss of one or more of its significant
customers; its competitive position; market outlook and trends in
the Company’s industry, including the possibility of reduced
investment in, or increased regulation of, nuclear power plants,
declines in public infrastructure construction, and reductions in
government funding; costs exceeding estimates the Company uses to
set fixed-price contracts; harm to the Company’s reputation or
profitability due to, among other things, internal operational
issues, poor subcontractor performances or subcontractor
insolvency; potential insolvency or financial distress of third
parties, including customers and suppliers; the Company’s contract
backlog and related amounts to be recognized as revenue; its
ability to maintain its safety record, the risks of potential
liability and adequacy of insurance; adverse changes in the
Company’s relationships with suppliers, vendors, and
subcontractors, including increases in cost, disruption of supply
or shortage of labor, freight, equipment or supplies, including as
a result of the COVID-19 pandemic; compliance with environmental,
health, safety and other related laws and regulations, including
those related to climate change; limitations or modifications to
indemnification regulations of the U.S.; the Company’s expected
financial condition, future cash flows, results of operations and
future capital and other expenditures; the impact of general
economic conditions, including inflation, ongoing economic
disruption, including the effects of the Ukraine-Russia conflict,
and any recession resulting from the COVID-19 pandemic; the impact
of the COVID-19 pandemic on the Company’s business, results of
operations, financial condition, and cash flows, including global
supply chain disruptions and the potential for additional COVID-19
cases to occur at the Company’s active or future job sites, which
potentially could impact cost and labor availability; information
technology vulnerabilities and cyberattacks on the Company’s
networks; the Company’s failure to comply with applicable laws and
regulations, including, but not limited to, those relating to
privacy and anti-bribery; the Company’s ability to successfully
implement its new enterprise resource planning (ERP) system; the
Company’s participation in multiemployer pension plans; the impact
of any disruptions resulting from the expiration of collective
bargaining agreements; the impact of natural disasters, which may
worsen or increase due to the effects of climate change, and other
severe catastrophic events (such as the ongoing COVID-19 pandemic);
the impact of corporate citizenship and environmental, social and
governance matters; the impact of changes in tax regulations and
laws, including future income tax payments and utilization of net
operating loss and foreign tax credit carryforwards; volatility of
the market price for the Company’s common stock; the Company’s
ability to maintain its stock exchange listing; the effects of
anti-takeover provisions in the Company’s organizational documents
and Delaware law; the impact of future offerings or sales of the
Company’s common stock on the market price of such stock; expected
outcomes of legal or regulatory proceedings and their anticipated
effects on the Company’s results of operations; and any other
statements regarding future growth, future cash needs, future
operations, business plans and future financial results.
Other important factors that may cause actual results to differ
materially from those expressed in the forward-looking statements
are discussed in the Company’s filings with the U.S. Securities and
Exchange Commission, including the section of the Annual Report on
Form 10-K for its 2021 fiscal year titled “Risk Factors.” Any
forward-looking statement speaks only as of the date of this press
release. Except as may be required by applicable law, the Company
undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, and you are cautioned not to rely upon
them unduly.
Financial Tables Follow
WILLIAMS INDUSTRIAL SERVICES
GROUP INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (UNAUDITED)
Three Months Ended March
31,
($ in thousands, except share and per
share amounts)
2022
2021
Revenue
$
69,559
$
60,851
Cost of revenue
63,850
54,753
Gross profit
5,709
6,098
Gross margin
8.2
%
10.0
%
Selling and marketing expenses
330
211
General and administrative expenses
6,071
6,311
Depreciation and amortization expense
66
41
Total operating expenses
6,467
6,563
Operating loss
(758
)
(465
)
Operating margin
(1.1
)%
(0.8
)%
Interest expense, net
1,219
1,293
Other income, net
(179
)
(360
)
Total other expense, net
1,040
933
Loss from continuing operations before
income tax
(1,798
)
(1,398
)
Income tax expense
229
185
Loss from continuing operations
(2,027
)
(1,583
)
Loss from discontinued operations before
income tax
—
(79
)
Income tax expense
17
19
Loss from discontinued operations
(17
)
(98
)
Net loss
$
(2,044
)
$
(1,681
)
Basic loss per common share
Loss from continuing operations
$
(0.08
)
$
(0.06
)
Loss from discontinued operations
—
(0.01
)
Basic loss per common share
$
(0.08
)
$
(0.07
)
Diluted loss per common share
Loss from continuing operations
$
(0.08
)
$
(0.06
)
Loss from discontinued operations
—
(0.01
)
Diluted loss per common share
$
(0.08
)
$
(0.07
)
Weighted average common shares outstanding
(basic)
25,838,562
24,933,894
Weighted average common shares outstanding
(diluted)
25,838,562
24,933,894
WILLIAMS INDUSTRIAL SERVICES
GROUP INC. AND SUBSIDIARIES REVENUE BRIDGE ANALYSIS*
First Quarter 2022 Revenue
Bridge
(in millions)
$ Change
First quarter 2021 revenue
$
60.9
Other U.S. Nuclear
7.1
Water
6.3
Plant Vogtle Units 3 and 4
1.8
Project mix
1.7
Canada
(4.2
)
Decommissioning
(4.0
)
Total change
8.7
First quarter 2022 revenue*
$
69.6
*Numbers may not sum due to rounding
WILLIAMS INDUSTRIAL SERVICES
GROUP INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
March 31,
December 31,
($ in thousands, except per share
amounts)
2022
2021
ASSETS
Current assets:
Cash and cash equivalents
$
4,260
$
2,482
Restricted cash
468
468
Accounts receivable, net of allowance of
$392 and $427, respectively
33,574
35,204
Contract assets
12,838
12,683
Other current assets
11,076
11,049
Total current assets
62,216
61,886
Property, plant and equipment, net
587
653
Goodwill
35,400
35,400
Intangible assets, net
12,500
12,500
Other long-term assets
6,998
5,712
Total assets
$
117,701
$
116,151
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
16,424
$
12,168
Accrued compensation and benefits
12,056
12,388
Contract liabilities
2,717
3,412
Short-term borrowings
-
676
Current portion of long-term debt
1,050
1,050
Other current liabilities
10,288
11,017
Current liabilities of discontinued
operations
337
316
Total current liabilities
42,872
41,027
Long-term debt, net
30,228
30,328
Deferred tax liabilities
2,447
2,442
Other long-term liabilities
3,539
1,647
Long-term liabilities of discontinued
operations
4,207
4,250
Total liabilities
83,293
79,694
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value, 170,000,000
shares authorized and 26,700,683 and 26,408,789 shares issued,
respectively, and 26,231,515 and 25,939,621 shares outstanding,
respectively
261
261
Paid-in capital
92,080
92,227
Accumulated other comprehensive income
(loss)
47
(95
)
Accumulated deficit
(57,974
)
(55,930
)
Treasury stock, at par (469,168 and
469,168 common shares, respectively)
(6
)
(6
)
Total stockholders’ equity
34,408
36,457
Total liabilities and stockholders’
equity
$
117,701
$
116,151
WILLIAMS INDUSTRIAL SERVICES
GROUP INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (UNAUDITED)
Three Months Ended March
31,
(in thousands)
2022
2021
Operating activities:
Net loss
$
(2,044
)
$
(1,681
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Net loss from discontinued operations
17
98
Deferred income tax provision
(benefit)
5
(13
)
Depreciation and amortization on plant,
property and equipment
66
41
Amortization of deferred financing
costs
208
208
Amortization of debt discount
50
50
Bad debt expense
(35
)
(18
)
Stock-based compensation
(31
)
715
Changes in operating assets and
liabilities:
Accounts receivable
1,713
(1,634
)
Contract assets
(153
)
(4,410
)
Other current assets
(27
)
59
Other assets
(1,369
)
(172
)
Accounts payable
4,231
(859
)
Accrued and other liabilities
619
5,112
Contract liabilities
(695
)
(548
)
Net cash provided by (used in) operating
activities, continuing operations
2,555
(3,052
)
Net cash used in operating activities,
discontinued operations
(39
)
(69
)
Net cash provided by (used in) operating
activities
2,516
(3,121
)
Investing activities:
Purchase of property, plant and
equipment
—
(56
)
Net cash used in investing activities
—
(56
)
Financing activities:
Repurchase of stock-based awards for
payment of statutory taxes due on stock-based compensation
—
(541
)
Proceeds from short-term borrowings
66,618
57,971
Repayments of short-term borrowings
(67,294
)
(57,172
)
Repayments of long-term debt
(263
)
(263
)
Net cash used in financing activities
(939
)
(5
)
Effect of exchange rate change on cash
201
(90
)
Net change in cash, cash equivalents and
restricted cash
1,778
(3,272
)
Cash, cash equivalents and restricted
cash, beginning of period
2,950
9,184
Cash, cash equivalents and restricted
cash, end of period
$
4,728
$
5,912
Supplemental Disclosures:
Cash paid for interest
$
867
$
875
Cash paid for income taxes, net of
refunds
$
36
$
1,066
WILLIAMS INDUSTRIAL SERVICES
GROUP INC. AND SUBSIDIARIES NON-GAAP FINANCIAL MEASURE
(UNAUDITED)
This press release contains financial
measures not derived in accordance with accounting principles
generally accepted in the United States (“GAAP”). A reconciliation
to the most comparable GAAP measure is provided below.
ADJUSTED EBITDA - CONTINUING
OPERATIONS
Three Months Ended March
31,
(in thousands)
2022
2021
Loss from continuing operations
$
(2,027
)
$
(1,583
)
Add back:
Interest expense, net
1,219
1,293
Income tax expense
229
185
Depreciation and amortization expense
66
41
Stock-based compensation
(31
)
715
Severance costs
43
—
Other professional fees
714
—
Franchise taxes
64
60
Foreign currency gain
(135
)
(90
)
Adjusted EBITDA - continuing
operations
$
142
$
621
NOTE 1 — Non-GAAP Financial Measures
Adjusted EBITDA-Continuing
Operations
Adjusted EBITDA is not calculated through the application of
GAAP and is not the required form of disclosure by the U.S.
Securities and Exchange Commission. Adjusted EBITDA is the sum of
the Company’s income (loss) from continuing operations before
interest expense, net, and income tax (benefit) expense and unusual
gains or charges. It also excludes non-cash charges such as
depreciation and amortization and stock-based compensation. The
Company’s management believes adjusted EBITDA is an important
measure of operating performance because it allows management,
investors and others to evaluate and compare the performance of its
core operations from period to period by removing the impact of the
capital structure (interest), tangible and intangible asset base
(depreciation and amortization), taxes and certain non-cash
expenses and unusual gains or charges (such as stock-based
compensation, severance costs, other professional fees, and foreign
currency (gain) loss) which are not always commensurate with the
reporting period in which such items are included. Williams’ credit
facilities also contain ratios based on EBITDA. Adjusted EBITDA
should not be considered an alternative to net income or income
from continuing operations or as a better measure of liquidity than
net cash flows from operating activities, as determined by GAAP,
and, therefore, should not be used in isolation from, but in
conjunction with, the GAAP measures. The use of any non-GAAP
measure may produce results that vary from the GAAP measure and may
not be comparable to a similarly defined non-GAAP measure used by
other companies.
Note Regarding Forward-Looking Non-GAAP
Financial Measures
The Company does not provide a reconciliation of forward-looking
non-GAAP financial measures to their comparable GAAP financial
measures because it could not do so without unreasonable effort due
to the unavailability of the information needed to calculate
reconciling items and due to the variability, complexity and
limited visibility of the adjusting items that would be excluded
from the non-GAAP financial measures in future periods. When
planning, forecasting and analyzing future periods, the Company
does so primarily on a non-GAAP basis without preparing a GAAP
analysis.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220512006023/en/
Investor Contact: Chris Witty Darrow Associates
646-345-0998 cwitty@darrowir.com
Williams Industrial Serv... (AMEX:WLMS)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
Williams Industrial Serv... (AMEX:WLMS)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024