ATLANTA--(BUSINESS WIRE)--May 15, 2019--
Williams Industrial Services Group Inc. (OTCQX:WLMS) (“Williams” or the “Company”), a construction and maintenance services company, today reported its financial results for its first quarter ended March 31, 2019. Unless otherwise noted, amounts and disclosures throughout this release relate to continuing operations.
Tracy Pagliara, President and CEO of Williams, commented, “The Company completed a milestone in the first quarter of 2019 by attaining quarterly earnings for the first time in five years. This represents another positive step in our efforts to turn Williams into a greater organization with a more diversified revenue base, improved overall execution and substantially more scale and profitability. While we still have much work to do, these results validate our conviction to achieve our strategic goals. We are building on our reputation to win new customers and expand our business with existing customers in the end markets we serve.”
*Table does not sum due to rounding
Revenue for the three months ended March 31, 2019 increased $7.5 million compared with the corresponding period in 2018 as a result of increases in a number of projects, including increases from new work in Canada, diversification in midstream oil and gas, and $0.9 million related to pre-outage activity in preparation for the significant outage work that will occur in the second quarter. Partially offsetting these increases was a decrease of $1.5 million in revenue from dry storage and decommissioning activities due to delays encountered by the customer.
Gross profit for the first quarter of 2019 increased $0.2 million compared with the prior-year period, while gross margin declined to 13.2% from 15.0%. The decrease in gross margin was due to project mix and the downward pressure on near-term margins from our entry into the nuclear industry in Canada, as well as the midstream oil and gas and nuclear decommissioning markets.
Operating expenses for the first quarter of 2019 were $5.1 million, a decrease of 29.9% when compared with the prior-year period. The significant decline in expenses was a result of extensive restructuring measures taken in 2018. The current level is expected to be representative of the forward run rate.
Interest expense was $1.5 million for the quarter compared with $1.4 million in the prior-year period as the net result of higher loan balances but lower interest rates.
As of March 31, 2019, Williams had $3.8 million in cash, including restricted cash. During 2018, the Company refinanced its term-debt facility with a four-year, $35 million term loan and also secured a three-year, $15 million revolving credit facility.
Total backlog as of March 31, 2019 was $478.7 million, compared with $501.6 million at the end of 2018. Williams estimates that approximately $181.8 million, or 38.0% of total backlog at the end of first quarter 2019, will be converted to revenue in the next twelve months. This compares with $173.3 million of backlog at the end of 2018 that the Company anticipated would be converted to revenue in 2019.
The Company is reiterating its expectations in 2019 for revenue, gross margins, SG&A as a percent of sales and adjusted EBITDA from continuing operations. The Company anticipates that revenue in the first quarter of 2019 will be the lowest, while the second quarter will have the most revenue because of the timing of a customer outage.
*See Note 1 – Non-GAAP Financial Measures for information regarding the use of adjusted EBITDA and forward-looking non-GAAP financial measures.
Mr. Pagliara concluded, “As previously stated, our strategy is to aggressively grow our core business, expand to new customers and markets, strengthen and diversify specialty service offerings and drive best-in-class execution – which we believe will result in a much larger and more profitable business in the years to come. Our backlog, pipeline of opportunities and first quarter performance provide us confidence in our outlook for 2019 and beyond. To that end, we also continue to focus on driving disciplined execution on a consistent basis and to reinforce our culture of accountability and integrity.”
The Company will host a conference call on Thursday, May 16, 2019, at 10:00 a.m. Eastern time. A webcast of the call and an accompanying slide presentation will be available at . To access the conference call by telephone, listeners should dial 201-493-6780.
An audio replay of the call will be available from 1:00 p.m. Eastern time on the day of the teleconference until the end of day on May 30, 2019. To listen to the audio replay, dial 412-317-6671 and enter conference ID number 13689946. Alternatively, you may access the webcast replay at , where a transcript will be posted once available.
Williams Industrial Services Group has been safely helping plant owners and operators enhance asset value for more than 50 years. The Company provides a broad range of construction, maintenance and modification, and support services to customers in energy, power and industrial end markets. 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: .
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 realize opportunities and successfully achieve its growth and strategic initiatives, such as midstream oil & gas opportunities, water-related projects and expansion into Canada, as well as expectations for future growth, backlog conversion, revenue, profitability and earnings, the continuing impact of the Company’s cost reduction, reorganization and restructuring efforts, expectations relating to the Company’s performance, expected work in the energy and industrial markets, 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 its ability to comply with the terms of its debt instruments and access letters of credit, ability to implement strategic initiatives, business plans, and liquidity plans, and ability to maintain effective internal control over financial reporting and disclosure controls and procedures. Actual results, performance or achievements may differ materially from those expressed or implied in the forward-looking statements. Additional risks and uncertainties that could cause or contribute to such material differences include, but are not limited to, decreased demand for new gas turbine power plants, reduced demand for, or increased regulation of, nuclear power, loss of any of the Company’s major customers, whether pursuant to the loss of pending or future bids for either new business or an extension of existing business, termination of customer or vendor relationships, cost increases and project cost overruns, unforeseen schedule delays, poor performance by its subcontractors, cancellation of projects, competition, including competitors being awarded business by current customers, damage to the Company’s reputation, warranty or product liability claims, increased exposure to environmental or other liabilities, failure to comply with various laws and regulations, failure to attract and retain highly-qualified personnel, loss of customer relationships with critical personnel, volatility of the Company’s stock price, deterioration or uncertainty of credit markets, and changes in the economic and social and political conditions in the United States, including the banking environment or monetary policy.
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 2018 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.
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 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 our net income (loss) 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. 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 unusual gains or charges (stock-based compensation, restatement expenses, asset disposition costs, and severance costs), which are not always commensurate with the reporting period in which such items are included. Williams’ credit facility also contains ratios based on EBITDA. Adjusted EBITDA should not be considered an alternative to net income 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.
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.
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CONTACT: Investor Relations:
Deborah K. Pawlowski
Kei Advisors LLC
KEYWORD: UNITED STATES NORTH AMERICA GEORGIA
INDUSTRY KEYWORD: BUILDING SYSTEMS ENERGY ALTERNATIVE ENERGY OIL/GAS OTHER ENERGY MANUFACTURING OTHER MANUFACTURING PROFESSIONAL SERVICES BANKING FINANCE NUCLEAR CONSTRUCTION & PROPERTY OTHER CONSTRUCTION & PROPERTY
SOURCE: Williams Industrial Services Group Inc.
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PUB: 05/15/2019 04:30 PM/DISC: 05/15/2019 04:30 PM