Company Engages Greenhill to Explore Strategic
Alternatives
Williams Industrial Services Group Inc. (NYSE American: WLMS)
(“Williams” or the “Company”), an infrastructure and maintenance
services company, today released certain preliminary financial
results for its full year ended December 31, 2022. The following
performance metrics have not yet been audited:
- Revenue of between $235 and $240 million
- Gross margin of approximately 2.75 to 3.00 percent, including
approximately $11.6 million of losses relating to the Company’s
Florida water business and $5.7 million of net start-up expenses
associated with the Company’s entry into the transmission and
distribution (“T&D”) market
- Negative adjusted EBITDA* of between $4.5 and $3.8 million,
including two legal settlements that in aggregate comprise $10.8
million of “other income” in the Company’s statement of
operations
- Year-end backlog of approximately $330 million, including a
recent contract win with a nuclear utility customer, primarily for
maintenance services during an upcoming outage period of
approximately 60 days, valued at approximately $35 million
“Based on our preliminary results, Williams ended the year
underperforming our most recent guidance parameters,” said Tracy
Pagliara, President and CEO of Williams. “This was largely because
an additional $6 million write-down in the fourth quarter was
deemed necessary for our two largest remaining Florida water
contracts, which we have discussed in the past. These two projects
are scheduled to be completed in the second and third quarter of
2023, respectively. The Company is no longer pursuing large fixed
price water projects.
“Notwithstanding these discrete and temporary execution issues,
there continues to be substantial funding strength and sizable
budgets across our end markets. Nuclear power is at an inflection
point, bolstered by the global push for decarbonization and
governments’ focus on energy security and independence. This is
exemplified in the US through the Infrastructure Act’s $6 billion
of expenditures for extending the lives of nuclear plants and the
Inflation Reduction Act’s estimated potential $30 billion of
production tax credits for existing nuclear facilities – making
this energy source cost competitive relative to renewables. The
Company’s other major end markets, including power and T&D, are
also well funded under the Infrastructure Act, with approximately
$30 billion allocated to strengthening the electrical grid.
“Even as our backlog was largely stable during the quarter –
boosted by a recent nuclear maintenance contract award – we have
engaged Greenhill & Co., LLC, an investment banking firm, to
explore a range of strategic alternatives for the Company to
maximize shareholder value, which could include a potential sale.
After facing numerous headwinds last year, we remain dedicated to
pursuing the course of action which results in the highest returns
going forward.”
The Company has not set a timetable for the conclusion of this
review, nor has it made any decisions related to any further
actions or possible strategic alternatives at this time. There can
be no assurance that the exploration of strategic alternatives will
result in the identification or consummation of any transaction, or
that any strategic alternative identified, evaluated and
consummated will provide the anticipated benefits or otherwise
preserve or enhance stockholder value. The Company does not intend
to comment further on its review of strategic alternatives until it
determines that further disclosure is appropriate or necessary.
Final audited results are expected to be released on or about
March 31, 2023. Separately, Williams disclosed that it has amended
its existing senior secured credit facilities to provide covenant
and liquidity relief and has secured additional subordinated debt
funding which, together with the relief obtained under its senior
secured credit facilities, is intended to permit the Company to
operate while it engages in its process to explore strategic
alternatives. Additional information can be found in the Company’s
filings with the SEC.
*See the Company’s prior filings for important disclosures
regarding Williams’ use of Adjusted EBITDA, as well as a
reconciliation of income (loss) from continuing operations to
Adjusted EBITDA.
About Williams Industrial Services Group
Williams Industrial Services Group Inc. has been safely helping
plant owners and operators enhance asset value for more than 50
years. The Company provides a broad range of building, maintenance
and support services to infrastructure customers in the 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 can be found at
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
preliminary full-year results, the outcome of the Company’s review
of strategic alternatives, including a potential sale, ability to
generate positive returns, to contain margin reductions within the
Florida business, build and diversify its backlog and convert
backlog to revenue, and realize opportunities, future demand for
the Company’s services, including the potential impact of energy
security and independence initiatives, the Infrastructure Act and
the Inflation Reduction Act on the Company’s end-markets, the
Company’s funding levels and ability to continue operations, 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 implementation of
the Company’s liquidity plan and its ability 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; 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 (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; 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 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 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 2021 fiscal year and its
Quarterly Report on Form 10-Q for the quarter ended September 30,
2022. 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.
The preliminary selected financial results for the year ended
December 31, 2022 in this press release are preliminary, are not a
comprehensive statement of financial results for the fiscal year,
and are provided prior to completion of all internal and external
review and audit procedures and, therefore, are subject to
adjustment. Actual results may vary from these estimates, and the
variations may be material. Among the factors that could cause or
contribute to material differences between the Company’s actual
results and expectations indicated by the forward-looking
statements are risks and uncertainties that include, but are not
limited to, changes to the Company’s financial results for the year
ended December 31, 2022 due to the completion of financial closing
procedures, final adjustments and other developments that may arise
between now and the time that the Company’s financial statements
for the fiscal year are finalized and publicly released and other
risks and uncertainties described above and in the Company’s
filings with the U.S. Securities and Exchange Commission.
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version on businesswire.com: https://www.businesswire.com/news/home/20230111005232/en/
Investor Contact: Chris Witty Darrow Associates
646-345-0998 cwitty@darrowir.com
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