ATLANTA, Nov. 12, 2020 (GLOBE NEWSWIRE) -- Williams Industrial Services Group Inc. (OTCQX: WLMS), a construction and maintenance services company, today reported its financial results for the fiscal third quarter ended September 30, 2020.
Recent Highlights
- Williams posted revenue of $66.2 million for the third quarter of 2020 compared with $56.9 million in the prior-year period
- The Company reported net income of $1.0 million, or $0.04 per share, in the third quarter of 2020 versus a net loss of $0.3 million, or $(0.02) per share, in the third quarter of 2019
- Adjusted EBITDA1 was $4.0 million for the third quarter of 2020 compared with $1.8 million in the third quarter of 2019
- As of September 30, 2020, the Company’s backlog was $457.9 million compared to $494.9 million as of December 31, 2019 and $538.9 million as of June 30, 2020, with approximately $166.7 million expected to be converted to revenue over the next twelve months
- Williams generated $3.2 million of operating cash in the third quarter of 2020 and reduced debt by $3.2 million concurrently
- Williams is in the final stages of refinancing its debt, which it expects to be completed in the fourth quarter
“The third quarter of 2020 once again illustrated the strength and resilience of our business during a tumultuous year,” said Tracy Pagliara, President and CEO of Williams. “The Company posted revenue of $66.2 million, up 16.5%, expanded gross margins by 260 basis points, to 13.1%, and generated $0.04 earnings per share versus a loss of $(0.02) per share, on a year-over-year basis. We ended the quarter with a backlog of $457.9 million.
“Such performance reinforces our confidence in the Company’s strategic plan as we also strive to complete the refinancing of our credit facilities. We have advanced that project significantly over the past two months and feel optimistic it will be finalized during the fourth quarter, setting the stage for reduced interest expense heading into 2021. At the same time, we are continuing to pursue our growth initiatives by building our talent base and enhancing internal controls and processes, while also remaining focused on leveraging SG&A. Such actions – combined with anticipated lower interest costs and our solid backlog and pipeline – represent exciting progress as we near the end of an extraordinary year and look forward to a further improved 2021.”
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.
Third Quarter 2020 Financial Results Compared to Third Quarter 2019
Revenue in the third quarter of 2020 was $66.2 million compared with $56.9 million in the third quarter of fiscal 2019, reflecting $3.3 million of higher revenue from Canadian nuclear contracts, a $5.0 million increase related to fuel storage/decommissioning work, and $0.6 million of additional revenue from the Vogtle 3 & 4 nuclear construction project.
Gross profit was $8.7 million, or 13.1% of revenue, compared with $6.0 million, or 10.5% of revenue, in the prior-year period. The current year gross margin reflects $2.4 million for prior-year unfavorable adjustments related to a customer contract. Operating expenses were $6.0 million versus $5.2 million in the third quarter of 2019, reflecting higher general and administrative (G&A) costs due primarily to a $0.8 million increase in severance and stock-based compensation expense. The Company’s operating margin rose to 4.0% from 1.3% in the prior-year third quarter, reflecting the improvement in gross margin year-over-year. Interest expense was $1.5 million in the third quarter of both fiscal 2020 and 2019.
The Company reported net income of $1.0 million, or $0.04 per share, in the third quarter of 2020 compared with a net loss of $0.3 million, or $(0.02) per share, in the prior-year period.
Balance Sheet
As of September 30, 2020, the Company had $4.5 million of cash (including restricted cash) and $41.5 million of bank debt compared with $7.8 million of cash and $44.2 million of bank debt as of December 31, 2019. Debt was reduced by $3.2 million in the third quarter, and further reductions are anticipated going forward as the Company utilizes cash generation to lower indebtedness.
Backlog
Total backlog as of September 30, 2020 was $457.9 million compared with $494.9 million at December 31, 2019 and $538.9 million as of June 30, 2020. The Company recognized revenue of $66.2 million in the third quarter combined with net adjustments and cancellations of $26.9 million, which were primarily driven by scope reduction and revision to the completion date on a particular contract. Revenue recognized and net adjustments and cancellations were partially offset with new awards of $12.2 million.
| Three Months Ended September 30, 2020 | Nine Months Ended September 30, 2020 | ||||
| Backlog - beginning of period | $ | 538,860 | $ | 494,904 | |
| New awards | 12,235 | 146,651 | |||
| Adjustments and cancellations, net | (26,923 | ) | 21,313 | ||
| Revenue recognized | (66,240 | ) | (204,936 | ) | |
| Backlog - end of period | $ | 457,932 | $ | 457,932 | |
The Company reaffirmed previously-issued guidance for fiscal 2020.
| 2020 Guidance | |
| Revenue: | $270 million to $290 million |
| Gross margin: | 11% to 13% of revenue |
| SG&A: | 8% to 8.5% of revenue |
| Adjusted EBITDA*: | $13 million to $15 million |
*See Note 1—Non-GAAP Financial Measures for information regarding the use of Adjusted EBITDA and forward-looking non-GAAP financial measures.
About Williams
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 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: www.wisgrp.com.
