Williams Reports Second Quarter 2022 Financial Results
Williams Industrial Services Group Inc. (NYSE American: WLMS) reported a revenue decline to $56.1 million for Q2 2022, down from $91.6 million a year prior. The company incurred a net loss of $5.3 million, or $(0.20) per diluted share, compared to a profit of $2.6 million in Q2 2021. Adjusted EBITDA also fell to negative $3.2 million. Backlog decreased to $234.3 million, with $144.6 million expected to convert to revenue in the next year. The company revised its 2022 guidance, projecting revenue between $275-$295 million, down from $305-$325 million, reflecting delayed projects and margin pressures.
- Backlog remains significant at $234.3 million, with $144.6 million expected to convert to revenue over the next 12 months.
- Increase in project pipeline to approximately $400 million, up from $360 million.
- Revenue dropped by $35.5 million compared to Q2 2021, primarily due to reduced nuclear work and exit from the Canadian market.
- Net loss of $5.3 million compared to a net income of $2.6 million in the previous year.
- Adjusted EBITDA significantly decreased to negative $3.2 million from $4.9 million.
Performance Reflects Delayed Awards, Non-recurring Margin Pressure
Recent Highlights
-
Williams posted revenue of
in the second quarter of 2022 compared with$56.1 million in the prior-year period$91.6 million -
The Company reported a net loss from continuing operations of
, or$5.3 million per diluted share, in the second quarter of 2022 compared with net income from continuing operations of$(0.20) , or$2.6 million per diluted share, in the second quarter of 2021$0.10 -
Adjusted EBITDA1 was negative
for the second quarter of 2022 compared with$3.2 million in the prior-year period$4.9 million -
As of
June 30, 2022 the Company’s backlog was compared to$234.3 million as of$257.0 million March 31, 2022 ; approximately of the$144.6 million June 30, 2022 backlog is expected to be converted to revenue over the following twelve months - As previously announced, the Company has updated its guidance to reflect delayed awards and certain non-recurring costs
“Although Williams’ future remains promising, we were disappointed in how the second quarter played out, causing us to reduce guidance on
“Looking ahead, with bid activity accelerating, we’re optimistic about revenue and backlog growth and better operating performance in the quarters to come. We remain focused on new business development, expense controls and working capital management. We’re confident in our ability to position Williams for expansion and increased shareholder returns going forward.”
1 See 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. |
Second Quarter 2022 Financial Results Compared to Second Quarter 2021
Revenue in the second quarter was
Operating expenses were
The Company reported a net loss from continuing operations of
Balance Sheet
The Company’s total liquidity (the sum of unrestricted cash and availability under the Company’s revolving credit facility) was
Backlog
Total backlog as of
|
|
Three Months Ended
|
|
Six Months Ended
|
||||
Backlog - beginning of period |
|
$ |
256,956 |
|
|
$ |
631,693 |
|
New awards |
|
|
17,227 |
|
|
|
55,520 |
|
Adjustments and cancellations, net |
|
|
16,179 |
|
|
|
(327,292 |
) |
Revenue recognized |
|
|
(56,059 |
) |
|
|
(125,618 |
) |
Backlog - end of period |
|
$ |
234,303 |
|
|
$ |
234,303 |
|
Williams estimates that approximately
Outlook
The Company adjusted guidance on
2022 Guidance |
|
Revenue: |
|
Gross margin: |
|
SG&A: |
|
Adjusted EBITDA*: |
|
*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,
An audio replay of the call will be available later that day by dialing 412-317-6671 and entering conference ID number 13731982; alternatively, a webcast replay can be found at http://ir.wisgrp.com/, where a transcript will be posted once available.
About Williams
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
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
Financial Tables Follow
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
($ in thousands, except share and per share amounts) |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Revenue |
|
$ |
56,059 |
|
|
$ |
91,571 |
|
|
$ |
125,618 |
|
|
$ |
152,422 |
|
Cost of revenue |
|
|
53,778 |
|
|
|
82,218 |
|
|
|
117,628 |
|
|
|
136,971 |
|
|
|
|
|
|
|
|
|
|
||||||||
Gross profit |
|
|
2,281 |
|
|
|
9,353 |
|
|
|
7,990 |
|
|
|
15,451 |
|
Gross margin |
|
|
4.1 |
% |
|
|
10.2 |
% |
|
|
6.4 |
% |
|
|
10.1 |
% |
|
|
|
|
|
|
|
|
|
||||||||
Selling and marketing expenses |
|
|
402 |
|
|
|
231 |
|
|
|
732 |
|
|
|
442 |
|
General and administrative expenses |
|
|
6,294 |
|
|
|
6,372 |
|
|
|
12,365 |
|
|
|
12,683 |
|
Depreciation and amortization expense |
|
|
46 |
|
|
|
46 |
|
|
|
112 |
|
|
|
87 |
|
Total operating expenses |
|
|
6,742 |
|
|
|
6,649 |
|
|
|
13,209 |
|
|
|
13,212 |
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss) |
|
|
(4,461 |
) |
|
|
2,704 |
|
|
|
(5,219 |
) |
|
|
2,239 |
|
Operating margin |
|
|
(8.0 |
)% |
|
|
3.0 |
% |
|
|
(4.2 |
)% |
|
|
1.5 |
% |
|
|
|
|
|
|
|
|
|
||||||||
Interest expense, net |
|
|
1,261 |
|
|
|
1,213 |
|
|
|
2,480 |
|
|
|
2,506 |
|
Other income, net |
|
|
(240 |
) |
|
|
(1,232 |
) |
|
|
(419 |
) |
|
|
(1,592 |
) |
Total other (income) expense, net |
|
|
1,021 |
|
|
|
(19 |
) |
|
|
2,061 |
|
|
|
914 |
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations before income tax |
|
|
(5,482 |
) |
|
|
2,723 |
|
|
|
(7,280 |
) |
|
|
1,325 |
|
Income tax expense (benefit) |
|
|
(171 |
) |
|
|
77 |
|
|
|
58 |
|
|
|
262 |
|
Income (loss) from continuing operations |
|
|
(5,311 |
) |
|
|
2,646 |
|
|
|
(7,338 |
) |
|
|
1,063 |
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from discontinued operations before income tax |
|
|
(47 |
) |
|
|
243 |
|
|
|
(47 |
) |
|
|
164 |
|
Income tax expense (benefit) |
|
|
(640 |
) |
|
|
18 |
|
|
|
(623 |
) |
|
|
37 |
|
Income from discontinued operations |
|
|
593 |
|
|
|
225 |
|
|
|
576 |
|
|
|
127 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) |
|
$ |
(4,718 |
) |
|
$ |
2,871 |
|
|
$ |
(6,762 |
) |
|
$ |
1,190 |
|
|
|
|
|
|
|
|
|
|
||||||||
Basic income (loss) per common share |
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations |
|
$ |
(0.20 |
) |
|
$ |
0.10 |
|
|
$ |
(0.28 |
) |
|
$ |
0.04 |
|
Income from discontinued operations |
|
|
0.02 |
|
|
|
0.01 |
|
|
|
0.02 |
|
|
|
0.01 |
|
Basic income (loss) per common share |
|
$ |
(0.18 |
) |
|
$ |
0.11 |
|
|
$ |
(0.26 |
) |
|
$ |
0.05 |
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted income (loss) per common share |
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations |
|
$ |
(0.20 |
) |
|
$ |
0.10 |
|
|
$ |
(0.28 |
) |
|
$ |
0.04 |
|
Income from discontinued operations |
|
|
0.02 |
|
|
|
0.01 |
|
|
|
0.02 |
|
|
|
0.01 |
|
Diluted income (loss) per common share |
|
$ |
(0.18 |
) |
|
$ |
0.11 |
|
|
$ |
(0.26 |
) |
|
$ |
0.05 |
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding (basic) |
|
|
26,106,493 |
|
|
|
25,683,258 |
|
|
|
26,034,907 |
|
|
|
25,306,130 |
|
Weighted average common shares outstanding (diluted) |
26,106,493 |
26,436,505 |
26,034,907 |
26,069,091 |
REVENUE BRIDGE ANALYSIS* |
||||
Second Quarter 2022 |
||||
|
|
|
||
(in millions) |
|
$ Change |
||
Second quarter 2021 revenue |
|
$ |
91.6 |
|
U.S. Nuclear |
|
|
(20.2 |
) |
Decommissioning |
|
|
(11.5 |
) |
Canada Nuclear |
|
|
(9.9 |
) |
Water |
|
|
4.0 |
|
Transmission and Distribution |
|
|
1.6 |
|
Other |
|
|
0.5 |
|
Total change |
|
|
(35.5 |
) |
Second quarter 2022 revenue* |
|
$ |
56.1 |
|
*Numbers may not sum due to rounding |
GROSS MARGIN RECONCILIATION NON-GAAP FINANCIAL MEASURE (UNAUDITED) |
||||||||
The following table reconciles our adjusted gross margin to our actual gross margin by deducting the energy transmission and distribution projects that are incurring start-up costs and lump sum projects in the water markets that are generating a loss. We believe this information is meaningful as it isolates the impact that our start-up costs and the non-profitable lump sum projects have on our 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
|
|
Six Months Ended
|
||||
Revenue |
|
$ |
56,059 |
|
|
$ |
125,618 |
|
Cost of revenue |
|
|
53,778 |
|
|
|
117,628 |
|
|
|
|
|
|
||||
Gross profit |
|
|
2,281 |
|
|
|
7,990 |
|
Gross margin |
|
|
4.1 |
% |
|
|
6.4 |
% |
|
|
|
|
|
||||
Minus: revenue from transmission and distribution start-up business |
|
|
(1,597 |
) |
|
|
(2,540 |
) |
Minus: revenue from |
|
|
(3,687 |
) |
|
|
(9,928 |
) |
Minus: total revenue deducted |
|
|
(5,284 |
) |
|
|
(12,468 |
) |
|
|
|
|
|
||||
Minus: cost of revenue from transmission and distribution start-up business |
|
|
(3,228 |
) |
|
|
(5,325 |
) |
Minus: cost of revenue from the |
|
|
(4,861 |
) |
|
|
(11,868 |
) |
Minus: total cost of revenue deducted |
|
|
(8,089 |
) |
|
|
(17,193 |
) |
|
|
|
|
|
||||
Adjusted revenue |
|
|
50,775 |
|
|
|
113,150 |
|
Adjusted cost of revenue |
|
|
45,689 |
|
|
|
100,435 |
|
Adjusted gross profit |
|
$ |
5,086 |
|
|
$ |
12,715 |
|
Adjusted gross profit margin |
|
|
10.0 |
% |
|
11.2 |
% |
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
||||||||
|
||||||||
|
|
|
|
|
||||
($ in thousands, except per share amounts) |
|
2022 |
|
2021 |
||||
ASSETS |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
656 |
|
|
$ |
2,482 |
|
Restricted cash |
|
|
468 |
|
|
|
468 |
|
Accounts receivable, net of allowance of |
|
|
33,267 |
|
|
|
35,204 |
|
Contract assets |
|
|
13,483 |
|
|
|
12,683 |
|
Other current assets |
|
|
10,812 |
|
|
|
11,049 |
|
Total current assets |
|
|
58,686 |
|
|
|
61,886 |
|
|
|
|
|
|
||||
Property, plant and equipment, net |
|
|
977 |
|
|
|
653 |
|
|
|
|
35,400 |
|
|
|
35,400 |
|
Intangible assets, net |
|
|
12,500 |
|
|
|
12,500 |
|
Other long-term assets |
|
|
7,640 |
|
|
|
5,712 |
|
Total assets |
|
$ |
115,203 |
|
|
$ |
116,151 |
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
||||
|
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Accounts payable |
|
$ |
10,939 |
|
|
$ |
12,168 |
|
Accrued compensation and benefits |
|
|
9,182 |
|
|
|
12,388 |
|
Contract liabilities |
|
|
2,289 |
|
|
|
3,412 |
|
Short-term borrowings |
|
|
10,223 |
|
|
|
676 |
|
Current portion of long-term debt |
|
|
1,050 |
|
|
|
1,050 |
|
Other current liabilities |
|
|
10,226 |
|
|
|
11,017 |
|
Current liabilities of discontinued operations |
|
|
104 |
|
|
|
316 |
|
Total current liabilities |
|
|
44,013 |
|
|
|
41,027 |
|
Long-term debt, net |
|
|
30,128 |
|
|
|
30,328 |
|
Deferred tax liabilities |
|
|
2,445 |
|
|
|
2,442 |
|
Other long-term liabilities |
|
|
4,443 |
|
|
|
1,647 |
|
Long-term liabilities of discontinued operations |
|
|
3,523 |
|
|
|
4,250 |
|
Total liabilities |
|
|
84,552 |
|
|
|
79,694 |
|
Commitments and contingencies |
|
|
|
|
||||
Stockholders’ equity: |
|
|
|
|
||||
Common stock, |
|
|
263 |
|
|
|
261 |
|
Paid-in capital |
|
|
93,208 |
|
|
|
92,227 |
|
Accumulated other comprehensive loss |
|
|
(122 |
) |
|
|
(95 |
) |
Accumulated deficit |
|
|
(62,692 |
) |
|
|
(55,930 |
) |
|
|
|
(6 |
) |
|
|
(6 |
) |
Total stockholders’ equity |
|
|
30,651 |
|
|
|
36,457 |
|
Total liabilities and stockholders’ equity |
|
$ |
115,203 |
|
|
$ |
116,151 |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
||||||||
|
|
|
|
|
||||
|
|
Six Months Ended |
||||||
(in thousands) |
|
2022 |
|
2021 |
||||
Operating activities: |
|
|
|
|
||||
Net income (loss) |
|
$ |
(6,762 |
) |
|
$ |
1,190 |
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
|
|
|
|
||||
Net income from discontinued operations |
|
|
(576 |
) |
|
|
(127 |
) |
Deferred income tax provision (benefit) |
|
|
3 |
|
|
|
(25 |
) |
Depreciation and amortization on plant, property, and equipment |
|
|
112 |
|
|
|
87 |
|
Amortization of deferred financing costs |
|
|
415 |
|
|
|
415 |
|
Amortization of debt discount |
|
|
100 |
|
|
|
100 |
|
Bad debt expense |
|
|
(101 |
) |
|
|
(51 |
) |
Stock-based compensation |
|
|
577 |
|
|
|
1,460 |
|
Changes in operating assets and liabilities: |
|
|
|
|
||||
Accounts receivable |
|
|
2,137 |
|
|
|
(3,040 |
) |
Contract assets |
|
|
(787 |
) |
|
|
(4,268 |
) |
Other current assets |
|
|
177 |
|
|
|
(1,561 |
) |
Other assets |
|
|
(2,219 |
) |
|
|
(175 |
) |
Accounts payable |
|
|
(1,251 |
) |
|
|
1,546 |
|
Accrued and other liabilities |
|
|
(601 |
) |
|
|
4,432 |
|
Contract liabilities |
|
|
(1,122 |
) |
|
|
(1,246 |
) |
Net cash used in operating activities, continuing operations |
|
|
(9,898 |
) |
|
|
(1,263 |
) |
Net cash used in operating activities, discontinued operations |
|
|
(365 |
) |
|
|
(139 |
) |
Net cash used in operating activities |
|
|
(10,263 |
) |
|
|
(1,402 |
) |
Investing activities: |
|
|
|
|
||||
Purchase of property, plant and equipment |
|
|
(438 |
) |
|
|
(418 |
) |
Net cash used in investing activities |
|
|
(438 |
) |
|
|
(418 |
) |
Financing activities: |
|
|
|
|
||||
Repurchase of stock-based awards for payment of statutory taxes due on stock-based compensation |
|
|
(163 |
) |
|
|
(501 |
) |
Proceeds from short-term borrowings |
|
|
144,220 |
|
|
|
140,194 |
|
Repayments of short-term borrowings |
|
|
(134,673 |
) |
|
|
(138,482 |
) |
Repayments of long-term debt |
|
|
(525 |
) |
|
|
(525 |
) |
Net cash provided by financing activities |
|
|
8,859 |
|
|
|
686 |
|
Effect of exchange rate change on cash, continuing operations |
|
|
16 |
|
|
|
128 |
|
Net change in cash, cash equivalents and restricted cash |
|
|
(1,826 |
) |
|
|
(1,006 |
) |
Cash, cash equivalents and restricted cash, beginning of period |
|
|
2,950 |
|
|
|
9,184 |
|
Cash, cash equivalents and restricted cash, end of period |
|
$ |
1,124 |
|
|
$ |
8,178 |
|
|
|
|
|
|
||||
Supplemental Disclosures: |
|
|
|
|
||||
Cash paid for interest |
|
$ |
2,292 |
|
|
$ |
1,887 |
|
Cash paid for income taxes, net of refunds |
|
$ |
— |
|
|
$ |
1,553 |
NON-GAAP FINANCIAL MEASURE (UNAUDITED) |
||||||||||||||||
This press release contains financial measures not derived in accordance with accounting principles generally accepted in |
||||||||||||||||
ADJUSTED EBITDA - CONTINUING OPERATIONS | ||||||||||||||||
|
||||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
(in thousands) |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Income (loss) from continuing operations |
|
$ |
(5,311 |
) |
|
$ |
2,646 |
|
$ |
(7,338 |
) |
|
$ |
1,063 |
|
|
Add back: |
|
|
|
|
|
|
|
|
||||||||
Interest expense, net |
|
|
1,261 |
|
|
|
1,213 |
|
|
2,480 |
|
|
|
2,506 |
|
|
Income tax expense (benefit) |
|
|
(171 |
) |
|
|
77 |
|
|
58 |
|
|
|
262 |
|
|
Depreciation and amortization expense |
|
|
46 |
|
|
|
46 |
|
|
112 |
|
|
|
87 |
|
|
Stock-based compensation |
|
|
608 |
|
|
|
745 |
|
|
577 |
|
|
|
1,460 |
|
|
Severance costs |
|
|
— |
|
|
|
— |
|
|
43 |
|
|
|
— |
|
|
Other professional fees |
|
|
260 |
|
|
|
— |
|
|
974 |
|
|
|
— |
|
|
Franchise taxes |
|
|
65 |
|
|
|
62 |
|
|
129 |
|
|
|
122 |
|
|
Foreign currency (gain) loss |
|
|
12 |
|
|
|
86 |
|
|
(123 |
) |
|
|
(4 |
) |
|
Adjusted EBITDA - continuing operations |
|
$ |
(3,230 |
) |
|
$ |
4,875 |
|
$ |
(3,088 |
) |
|
$ |
5,496 |
|
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
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/20220811005726/en/
646-345-0998
cwitty@darrowir.com
Source:
FAQ
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