Additional Business Investment, One Time
Expenses, and Contract Delays Impact Near-Term Outlook
Williams Industrial Services Group Inc. (NYSE American: WLMS)
(“Williams” or the “Company”), an energy and industrial
infrastructure services company, today announced revised guidance
for fiscal 2022, as follows:
- Revenue: $275 - $295 million (previously, $305 - $325
million)
- Gross Margin: 9.0% - 9.5% (previously, 10.5% - 11.0%)
- SG&A: 8.25% – 8.75% of revenue; 8.00% - 8.50% excluding
investments in upgrading systems (previously, 8.75% - 9.25%; 8.25%
- 8.75% excluding investments)
- Adjusted EBITDA: $5.0 – $7.5 million (previously, $10.0 - $12.5
million)
“While the long-term outlook for Williams remains favorable, it
has become necessary to adjust 2022 guidance due to several
non-recurring issues negatively impacting the achievement of
previously forecast performance levels,” said Tracy Pagliara,
President and CEO. “As will be explained in greater detail during
our upcoming earnings call on August 12, these items include
additional start-up costs associated with our transmission and
distribution business; further litigation expense related to a
competitor and former employee; and continued margin pressure
pertaining to previously-disclosed Florida projects, which are
expected to be substantially complete this calendar year. In
addition to these transitional costs, some awards and project work
have been delayed until the second half, dampening revenue
projections.
“However, we are excited by the prospect for meaningful new
orders and better operating performance over the rest of 2022 as
one-time costs subside and demand rises heading into next year. As
a provider of essential infrastructure services to the energy and
industrial markets, we believe Williams is largely recession-proof,
and our bid activity is accelerating even as certain parts of the
economy falter. Our pipeline1 is robust – approximately $400
million compared to approximately $360 million at the end of the
first quarter – and is expected to drive material increases to our
backlog in the quarters to come.
“The decisions we make every day are based on our strategic plan
focused around growth opportunities tied to our nuclear, energy
delivery, and water end markets under the $550 billion
Infrastructure Investment & Jobs Act, as well as billions in
additional capital investment from utilities and municipalities
expected during the next five years. Furthermore, over $350 billion
slated for energy security and climate change programs, including
for nuclear power, is included in the Inflation Reduction Act
currently being negotiated in Washington. While interim challenges
and business initiatives are causing 2022 to be a transition year
for Williams, we believe the Company is well positioned for
expansion and greater bottom-line results going forward.”
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 pipeline and convert pipeline to backlog and 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 utilities and municipalities, 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 the Company’s long-term outlook and 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 amended 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 unstable
market and economic conditions on our business, financial condition
and stock price, including inflationary cost pressures, supply
chain disruptions and constraints, labor shortages, the effects of
the Ukraine-Russia conflict and ongoing impact of COVID-19, and a
possible recession; our ability to meet publicly announced guidance
or other expectations about our business, key metrics and future
operating results; 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 (whether claims made by
or against the Company) 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.
1 Pipeline is the estimated value of business opportunities that
the Company plans to bid on.
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version on businesswire.com: https://www.businesswire.com/news/home/20220804005322/en/
Investor Contact: Chris Witty Darrow Associates
646-345-0998 cwitty@darrowir.com
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