Williams Industrial Services Group Inc. (NYSE American: WLMS)
(“Williams” or the “Company”), an energy and industrial
infrastructure services company, today reported financial results
for the fiscal first quarter ended March 31, 2023.
Recent Highlights
- Williams posted revenue of $103.5 million in the first quarter
of 2023 compared with $69.6 million in the corresponding period of
2022, largely resulting from increased nuclear business due to a
customer outage which is scheduled to conclude in the second
quarter.
- Williams reported a net loss from continuing operations of $0.1
million, or $(0.01) per diluted share, in the first quarter of 2023
compared with $2.0 million, or $(0.08) per diluted share, in the
first quarter of 2022.
- Adjusted EBITDA1 for the Company was $3.3 million for the first
quarter of 2023 compared with $0.1 million in the prior-year
period.
- As of March 31, 2023, the Company’s backlog was $234.9 million
compared with $333.2 million as of December 31, 2022; approximately
$100.5 million of the current backlog is expected to be converted
to revenue over the next twelve months.
- The Company’s liquidity issues will likely persist throughout
2023 and into 2024 based on negative cash flows related to lower
revenue expectations in the second half and costs associated with
exiting its underperforming water, chemical and transmission and
distribution (“T&D”) operations.
- The Company exited its Tampa-based T&D operations during
the quarter and, thereafter; it expects to finalize the closure of
its Norwalk-based T&D operations in the second quarter.
Williams’ wind-down of its chemical and water operations is
ongoing. The Company incurred losses of $3.8 million in these
underperforming operations during the first quarter.
- Williams continues to work with Greenhill & Company to
review strategic alternatives.
“Greater than anticipated customer outage-related work in the
first quarter of 2023 positively impacted Williams, resulting in
higher revenue and EBITDA year-over-year,” said Tracy Pagliara,
President and CEO of Williams. “In addition, consistent with our
overall strategic review of the business, we are further
streamlining the Company by exiting underperforming water, chemical
and T&D operations. While our core nuclear and fossil business
exceeded our forecast for this quarter, the underperforming
operations negatively impacted results. Given our reduced
expectations for the second half of the year and corresponding
liquidity challenges, we continue to evaluate further strategic
alternatives for the Company.”
1See NOTE 1 — Non-GAAP Financial Measures
in the attached tables for important disclosures regarding
Williams’ use of Adjusted EBITDA, as well as a reconciliation of
income (loss) from continuing operations to Adjusted EBITDA.
First Quarter 2023 Financial Results Compared to First
Quarter 2022
Revenue in the first quarter rose to $103.5 million from $69.6
million in the first quarter of 2022, largely reflecting $40.8
million of incremental nuclear business year-over-year; the
increase was primarily due to project work performed during a
customer outage, which is now scheduled to conclude in the second
quarter. Gross profit was $7.7 million, or 7.4% of revenue,
compared with $5.7 million, or 8.2% of revenue, in the prior-year
period, with the lower margin primarily due to the impact of
certain underperforming water contracts in Florida and chemical
projects in Texas and costs tied to the Company’s ongoing process
to exit the T&D business. Excluding the aforementioned,
adjusted gross margin would have been 12.2% of revenue.
Operating expenses were $6.1 million in the 2023 first quarter
compared with $6.5 million in the prior-year period. The Company
reported operating income of $1.6 million during the first quarter
of 2023 versus an operating loss of $0.8 million in the
corresponding period of 2022. Interest expense was $1.8 million in
the first quarter of 2023 versus $1.2 million in 2022. The Company
reported a net loss from continuing operations of $0.1 million, or
$(0.01) per diluted share, in the first quarter of 2023 compared
with a net loss from continuing operations of $2.0 million, or
$(0.08) per diluted share, in the first quarter of 2022.
Liquidity and Balance Sheet
The Company’s total liquidity (the sum of unrestricted cash and
availability under the Company’s revolving credit facility) was
$6.2 million as of March 31, 2023 versus $3.8 million at the
beginning of the year. As of March 31, 2023, the Company had
approximately $48,000 of unrestricted cash and cash equivalents,
$0.5 million of restricted cash, and $43.6 million of bank debt
compared with $0.5 million of unrestricted cash and cash
equivalents, $0.5 million of restricted cash, and $40.8 million of
bank debt as of December 31, 2022.
As previously announced, Williams has developed a liquidity plan
to reduce operating expenses and eliminate unprofitable businesses.
The Company exited its non-performing T&D operations in Florida
and completed some under-performing chemical projects in Houston.
The Company is also in the process of exiting the T&D market in
Connecticut, which it anticipates will be complete during the
second quarter. Due to contractual commitments, the Company
continues to fund Florida water projects resulting in further
losses, negatively impacting liquidity. The Company will need to
continue to refine its liquidity strategy as circumstances dictate,
particularly as revenue is expected to fall in the second half and
the Company’s borrowing base will contract as a result, costs to
complete the water projects continue, expenses related to the
review of strategic alternatives are incurred, and customer payment
terms fluctuate. Further funding will likely be necessary to
address liquidity issues in the future; additional information can
be found in Williams’ filings with the U.S. Securities and Exchange
Commission, including liquidity disclosures and related risk
factors.
Backlog
Total backlog as of March 31, 2023 was $234.9 million compared
with $333.2 million on December 31, 2022. During the first quarter
of 2023 the Company recognized revenue of $103.5 million, booked
new awards of $16.1 million, and saw net adjustments and
cancellations of $10.9 million.
Three Months Ended March 31,
2023 (in $ thousands)
Backlog - beginning of period
$
333,203
New awards
16,073
Adjustments and cancellations, net
(10,879
)
Revenue recognized
(103,470
)
Backlog - end of period
$
234,927
Williams estimates that approximately $100.5 million of its
current backlog will be converted to revenue within the next twelve
months compared with $178.6 million of backlog as of December 31,
2022 that the Company anticipated would be converted to revenue
over the succeeding twelve-month period. The decrease in backlog
was primarily driven by converting several large nuclear projects
to revenue and exiting the T&D end markets. At the same time,
current backlog also reflects the fact that the Company is pursuing
a narrower set of core markets for new business and that the
release of public funding under the Inflation Reduction Act and
Infrastructure Investment and Jobs Acts into those markets is
moving more slowly than originally anticipated.
Webcast and Teleconference
The Company will host a conference call tomorrow, May 18, 2023
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 13738722;
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
liquidity situation and the outcome of the Company’s review of
strategic alternatives, including engaging in a potential sale,
restructuring or refinancing its debt, seeking additional debt or
equity capital, reducing or delaying its business activities and
strategic initiatives, or selling assets, other strategic
transactions and/or other measures, including obtaining relief
under the U.S. Bankruptcy Code, the Company’s ability to
successfully implement its liquidity improvement plan and, if
necessary, to obtain additional funding on reasonable terms, or at
all, the Company’s ability to performance in the nuclear and fossil
sectors, to streamline overhead, and to exit certain operations
that have negatively impacted results in a timely manner, the
Company’s ability to obtain support from customers in dealing with
its liquidity challenges, future demand for the Company’s services,
the Company’s funding levels and ability to continue operations as
a going concern, 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 ability to continue to implement its liquidity
improvement plan and to continue as a going concern; 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; the results of the Company’s
ongoing strategic alternatives review process; 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 (including any
that may result from the Company’s review of strategic
alternatives); 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 performance 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, geopolitical conditions and other economic
factors; 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, instability in the global banking
system, the effects of the Ukraine-Russia conflict, and a possible
recession; our ability to meet expectations about our business, key
metrics and future operating results; 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 be
exacerbated as a result of climate change, and other severe
catastrophic events; 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 or related
contractual obligations on the market price of such stock; the
potential impact of activist stockholder actions; 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 “Risk Factors” section of the
Annual Report on Form 10-K for its 2022 fiscal year. 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)
2023
2022
Revenue
$
103,470
$
69,559
Cost of revenue
95,779
63,850
Gross profit
7,691
5,709
Gross margin
7.4
%
8.2
%
Selling and marketing expenses
136
330
General and administrative expenses
5,929
6,071
Depreciation and amortization expense
55
66
Total operating expenses
6,120
6,467
Operating income (loss)
1,571
(758
)
Operating margin
1.5
%
(1.1
)%
Interest expense, net
1,793
1,219
Other income, net
(61
)
(179
)
Total other expense, net
1,732
1,040
Loss from continuing operations before
income tax
(161
)
(1,798
)
Income tax expense (benefit)
(15
)
229
Loss from continuing operations
(146
)
(2,027
)
Loss from discontinued operations before
income tax
(44
)
—
Income tax expense
3
17
Loss from discontinued operations
(47
)
(17
)
Net loss
$
(193
)
$
(2,044
)
Basic loss per common share
Loss from continuing operations
$
(0.01
)
$
(0.08
)
Loss from discontinued operations
—
—
Basic loss per common share
$
(0.01
)
$
(0.08
)
Diluted loss per common share
Loss from continuing operations
$
(0.01
)
$
(0.08
)
Loss from discontinued operations
—
—
Diluted loss per common share
$
(0.01
)
$
(0.08
)
Weighted average common shares outstanding
(basic)
26,425,405
25,838,562
Weighted average common shares outstanding
(diluted)
26,425,405
25,838,562
WILLIAMS INDUSTRIAL SERVICES
GROUP INC. AND SUBSIDIARIES
REVENUE BRIDGE
ANALYSIS*
First Quarter 2023 Revenue
Bridge
(in millions)
$ Change
First quarter 2022 revenue
$
69.6
U.S. Nuclear
40.8
Fossil
4.7
Transmission & Distribution
1.6
Decommissioning
(4.6
)
Canada Nuclear
(5.5
)
Other
(3.1
)
Total change
33.9
First quarter 2023 revenue*
$
103.5
*Numbers may not sum due to rounding
WILLIAMS INDUSTRIAL SERVICES
GROUP INC. AND SUBSIDIARIES
GROSS MARGIN
RECONCILIATION
NON-GAAP FINANCIAL MEASURE
(UNAUDITED)
The following table reconciles our
adjusted gross margin to actual gross margin by deducting the
T&D, Chemical and large lump sum water projects that are
underperforming. The Company believes this information is
meaningful as it isolates the impact that these underperforming
projects have on gross margin. Because adjusted gross margin is not
calculated in accordance with GAAP, it may not be comparable to
other similarly titled measures of other companies and should not
be considered in isolation or as substitute for, or superior to,
financial measures prepared in accordance with GAAP.
(in thousands)
Three Months Ended March 31,
2023
Revenue
$
103,470
Cost of revenue
95,779
Gross profit
7,691
Gross margin
7.4
%
Minus: revenue from transmission and
distribution business
(1,356
)
Minus: revenue from Florida lump sum water
projects
(6,564
)
Minus: revenue from chemical projects
(1,104
)
Minus: total revenue deducted
(9,024
)
Minus: cost of revenue from transmission
and distribution business
(2,827
)
Minus: cost of revenue from the Florida
lump sum water projects
(8,510
)
Minus: cost of revenue from chemical
projects
(1,484
)
Minus: total cost of revenue deducted
(12,821
)
Adjusted revenue
94,446
Adjusted cost of revenue
82,958
Adjusted gross profit
$
11,488
Adjusted gross profit margin
12.2
%
WILLIAMS INDUSTRIAL SERVICES
GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS (UNAUDITED)
March 31,
December 31,
($ in thousands, except per share
amounts)
2023
2022
ASSETS
Current assets:
Cash and cash equivalents
$
48
$
495
Restricted cash
468
468
Accounts receivable, net of allowance of
$225 and $273, respectively
33,091
31,033
Contract assets
18,257
12,812
Other current assets
5,689
6,258
Total current assets
57,553
51,066
Property, plant and equipment, net
982
1,257
Goodwill
35,400
35,400
Intangible assets, net
12,500
12,500
Other long-term assets
8,026
8,275
Total assets
$
114,461
$
108,498
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
7,287
$
12,041
Accrued compensation and benefits
17,639
8,566
Contract liabilities
4,404
6,242
Short-term borrowings
16,425
17,399
Other current liabilities
6,361
5,710
Current liabilities of discontinued
operations
112
110
Total current liabilities
52,228
50,068
Long-term debt, net
27,160
23,360
Deferred tax liabilities
2,253
2,268
Other long-term liabilities
4,689
4,925
Long-term liabilities of discontinued
operations
3,501
3,479
Total liabilities
89,831
84,100
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value, 170,000,000
shares authorized and 27,532,064 and 26,865,064 shares issued,
respectively, and 27,210,391 and 26,543,391 shares outstanding,
respectively
266
264
Paid-in capital
94,438
94,151
Accumulated other comprehensive loss
(268
)
(404
)
Accumulated deficit
(69,801
)
(69,608
)
Treasury stock, at par (321,673 and
321,673 common shares, respectively)
(5
)
(5
)
Total stockholders’ equity
24,630
24,398
Total liabilities and stockholders’
equity
$
114,461
$
108,498
WILLIAMS INDUSTRIAL SERVICES
GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended March
31,
(in thousands)
2023
2022
Operating activities:
Net loss
$
(193
)
$
(2,044
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Net loss from discontinued operations
47
17
Deferred income tax provision
(benefit)
(15
)
5
Depreciation and amortization on plant,
property and equipment
55
66
Amortization of deferred financing
costs
208
208
Amortization of debt discount
50
50
Loss on disposals of property, plant and
equipment
52
—
Bad debt expense
48
(35
)
Stock-based compensation
614
(31
)
Paid-in-kind interest
387
—
Changes in operating assets and
liabilities:
Accounts receivable
(2,106
)
1,713
Contract assets
(5,445
)
(153
)
Other current assets
569
(27
)
Other assets
290
(1,369
)
Accounts payable
(4,754
)
4,231
Accrued and other liabilities
9,253
619
Contract liabilities
(1,838
)
(695
)
Net cash provided by (used in) operating
activities, continuing operations
(2,778
)
2,555
Net cash used in operating activities,
discontinued operations
(23
)
(39
)
Net cash provided by (used in) operating
activities
(2,801
)
2,516
Investing activities:
Proceeds from sale of property, plant and
equipment
168
—
Net cash provided by investing
activities
168
—
Financing activities:
Repurchase of stock-based awards for
payment of statutory taxes due on stock-based compensation
(90
)
—
Proceeds from short-term borrowings
98,660
66,618
Repayments of short-term borrowings
(99,634
)
(67,294
)
Proceeds from long-term debt
3,250
—
Repayments of long-term debt
—
(263
)
Net cash provided by (used in) financing
activities
2,186
(939
)
Effect of exchange rate change on cash
—
201
Net change in cash, cash equivalents and
restricted cash
(447
)
1,778
Cash, cash equivalents and restricted
cash, beginning of period
963
2,950
Cash, cash equivalents and restricted
cash, end of period
$
516
$
4,728
Supplemental Disclosures:
Cash paid for interest
$
1,834
$
867
Cash paid for income taxes, net of
refunds
$
45
$
36
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)
2023
2022
Loss from continuing operations
$
(146
)
$
(2,027
)
Add back:
Interest expense, net
1,793
1,219
Income tax expense (benefit)
(15
)
229
Depreciation and amortization expense
55
66
Stock-based compensation
614
(31
)
Severance costs
—
43
Other professional fees
934
714
Franchise taxes
63
64
Foreign currency gain
(16
)
(135
)
Adjusted EBITDA - continuing
operations
$
3,282
$
142
ADJUSTED EBITDA - CONTINUING OPERATIONS
– RECONCILIATION INCLUDING LOSS CONTRACTS
The following table reconciles our
adjusted EBITDA by adding back the T&D, Chemical and lump sum
Water projects that generated losses. The Company believes this
information is meaningful as it isolates the impact of these
underperforming service lines that the Company is in the process of
exiting.
Three Months Ended March
31,
(in thousands)
2023
2022
Loss from continuing operations
$
(146
)
$
(2,027
)
Add back:
Net loss projects
3,797
1,865
Interest expense, net
1,793
1,219
Income tax expense (benefit)
(15
)
229
Depreciation and amortization expense
55
66
Stock-based compensation
614
(31
)
Severance costs
—
43
Other professional fees
934
714
Franchise taxes
63
64
Foreign currency gain
(16
)
(135
)
Adjusted EBITDA - continuing
operations
$
7,079
$
2,007
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/20230517005637/en/
Chris Witty Darrow Associates 646-345-0998
cwitty@darrowir.com
Williams Industrial Serv... (AMEX:WLMS)
過去 株価チャート
から 11 2024 まで 12 2024
Williams Industrial Serv... (AMEX:WLMS)
過去 株価チャート
から 12 2023 まで 12 2024
