WLMS - Earnings call transcript Q4 2018

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Operator

Greetings and welcome to Williams Industrial Services Group Fourth Quarter and Full-Year 2018 Financial Results. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Deborah Pawlowski, Investor Relations. you. Thank ahead. go Please

Deborah Pawlowski

and and everyone. Industrial your Brenda, your Services certainly time today interest good you, We morning appreciate Group. Thank in Williams

CEO, will Chief call Pagliara; provide Tracy their the with and are call will President On then for remarks we me and Tim and the Officer, Financial and our prepared Tim open Howsman. our Tracy questions.

documents after you have quarter will conversation and or these released fourth can that copy and year-end today our the the of a closes accompany You our should www.wisgrp.com. market slides website in find results today's at

If the the review you Slide turn forward-looking to X deck, I statements. regarding harbor in will safe

to These subject other aware, cause are as uncertainties the as filed during other here and These you could risks as actual statements that with formal to in factors earnings As materially as provided future well results stated is other discussions from documents session. today. as with as apply which events are risks may statements the to and make and what uncertainties are some SEC. forward-looking differ well factors during well Q&A we release the

find website our You documents or sec.gov. at these can on

measures. call, evaluating also some today's We useful discuss During be believe our non-GAAP will will financial these we in performance.

we to that our otherwise. as well be that operations about the measures with non-GAAP it When will the GAAP. applicable, You slides information comparable today's in provided this in accordance reconciliation note say GAAP for Please in consider information. for of of should isolation not substitute measures additional the tables unless we your and accompany presentation conversation release prepared continuing or as results a a have

turn over to begin. X, I Tracy the If you to Slide number will call turn Tracy. to will

Tracy Pagliara

Thanks, Deb, good morning everyone. and

challenge I regarding in am happy had I fourth through will outage that large deliver importantly our to probably second a week with create we you so were momentum workable working we details, in associated changes can requirements but to the XXXX. we am able project a the solution aware, Tim take last growth you quarter, necessary customer capital with very pleased solid to had a the to As positive are already quarter. also and the the are build we continuing business, and report customer. made we that our vendor a report

our We leadership realigned recapitalized team, reduced SG&A added talent. cost, balance new have our substantially our and sheet,

are in this aggressive We in now that January strategic position was and year. new execute finalized to our plan

office Tucker. to and terminated corporate these run and equally are expenses non-recurring our excellence and the to products rate of were see SG&A XXXX. and are We target about efforts excluding related excited to in million benefits operational of transitioning On These businesses, activities various charges X, during Slide Dallas expenses we focused and of strength XXXX on employees, expenses, X% After many and to from revenues. the charges our business controls. of exit restructuring approximately can grow salaries X% avenues XX.X to the and breakdown and at for you are

further. leverage operating discuss plans as excellent provides we also growth. our will Tim structure Our this execute for

end Turning year. in came Revenue to the million. Slide will highlights some as expected touch at quarter X, XX.X regarding quarter and in the I on to XXX the year million at the

site. in at productivity X have improvements the contributed recent Vogtle the to construction We nuclear

our early integral is expansion with in for to of and and helping JVs and XXXX. and the to Southern fourth as which our our our Perry, in of through new in performance for of Energy diversification proud also over a to the long-term included reflects strong advance into XX% partner Company announced contract favorable to of very the project year strength midpoint Canada of renewal X the total made customers. XX% to quarter. era. key million, termination. and our other impact measurably our quarter stated with which BWXT our to XX%, us of relationships. margin JVs blessed these projects Of an core Bechtel with note, Gross We margin Slide complete some on recently while was capabilities the has our agreement of which XXX an American our enable the and increased XX.X% quarter opportunities the revenue enabling Secretary, We markets the range in is of margin details which Both this progress mix. joint was strategy backlog at business deepen the expected critical are benefit energy customer part We Rick and be Arc the in Gross Energy ventures.

and mix of the want contracts derived reach contract point more terms type, toward substantial majority long-term plus agreements. lower I fixed to In from gas industrial that other cost and could oil maintenance price the is and revenue. markets, as we our risk into shift increase out

with consistent plan With nuclear Our that derived end unsurpassed to returns quality execution and our change XXXX, over during revenue markets by respect William's facilitate projects for of focus customers. fossil to to reputation favorable from to entail our its and and definition XX% on this make power is with was on safety core systematically more strong business, risk.

foundation me With look over that to diversify to same and to the Canada continue and want that, and and into growth the decommissioning let opportunities new strengthen power time, we opportunities industrial call with and Tim. plan of work. grow our the maintenance forward, to and gas energy oil turn we new water. in As At diligently pursue more and will agreements more we project business long-term

Tim Howsman

and Thank you, morning good everyone. Tracy,

increased increased X, as activity was period I'll more my decrease full at Revenue in be a year begin for our X and slightly $XXX.X and the X% project on X almost scope revenue If Revenue continuing Units million or our revenue Vogtle XXXX of million, XXXX offset performance. price to at quarter. the up unchanged fixed comments prior from quarter $X turn Slide quarter year's prior my focusing the under completed expanded you million. in and fourth review to the for other relatively contracts than I'll $XX.X year long-term from agreement over year full operations. fourth

of This offset a more completed and declines revenue and fixed see from bridge, primary can from a at increase than decommissioning The in the you plant million $XX.X in outage XXXX. occurs increase a contract related nuclear long-term the and As of outage under activities drivers the to construction X a projects. timing million price contract the increase Vogtle revenue were Units $XX.X X, in comprised the is $X.X of the that XXXX, in this million quarter project year. planned revenue Worth noting years, next non-recurring related second outage that over $X.X by from is the of so sources revenue odd after a million excluding to $X.X million X% a XXXX release damage former and liquidated or $X.X increased accrual related to net million XXXX. of Hetsco, XXXX subsidiary our was

profit resolution from orders. of the you revenue was reported gross of million unapproved period gross of The you the quarter can million, at of disputed margin the gross fourth XXXX we mostly in see $X.X of look margin representing prior profit $X.X change recognition quarter with XXX% benefited If from X, the million from fourth decline year because Slide XX%. $X.X

million expect with resulted that As the and included execute margin. unusual was revenue in which a project business profit our to sequential a the the vary of in the our fixed third third The which mix opportunities $X.X contracts. can recognition on we early gross sequential also XX.X%. termination, will XX% execution. contract, margin termination we pipeline, overall based gross with price the benefit we the on we margins in in XX% normalized have reminder, quarter and range well had of if items for XXX% deliver of quarter, peak, Gross on what Based the to some in excludes early backlog

$XX.X Full accrual XXX gross For incurred more primarily year over the points XXXX, divested benefit to profits XXXX. mix and a items the release year in These the from than offset XXXX, improved full losses elimination damages margin a year's XXXX liquidated increased contract the the basis prior net Hetsco's project we gross the to as of in XX.X%. improvement subsidiary. due million from level over

of and non-recurring look estimated $X activities of businesses, X, would expenses to of restructuring SG&A benefits included quarter SG&A these was million our you in non-recurring expenses, estimated are of approximately turn fourth expenses, those corporate which million. of in includes When efforts Slide of to expenses $X.X salaries office the terminated If quarter The operating million the employees, and reported $X excluding and Tucker. $X.X SG&A from portion charts. operating $XX.X Fourth related and transitioning Dallas million the were at expenses. let's products various to charges exit million now and approximately to

of For the SG&A $XX.X of full estimated million, expenses. XXXX year included non-recurring $XX.X recorded million

-- run would is Tracy as expenses charges X. be first the at earlier restructuring roll SG&A material million $XX.X off XXXX additional after SG&A the representative our after in will as result the to quarter are are those estimated the clear, result expected well. To Excluding rate expected non-recurring of Slide bridge of which nominal, anticipated on off quarter be that be eliminated as no roll expenses a of of when and first restructuring XXXX mentioned the looking will

an this $X.X Slide significant the you we expenses. see decrease income was mentioned operating a and estimated row compared positive reporting which income. operating is million. On driven a towards million organization, estimated simplification net gross $X.X adjusted Moving in turn was positive which XX% income Reported quarter The operating $XX.X full-year into $XX.X territory a in can made our million, of excludes million non-recurring Estimated in significant for and in the charges already loss increase million which led the positive charges non-recurring restructuring our quarter loss profit improvement breakeven basis. quarter been improvement. the expenses offices XXXX. positive EBITDA progress The estimated restructuring the XXXX are charges non-recurring and XX, making massive operating that has million. Georgia making restructuring income. $XXX,XXX, operating just is about territory corporate of Estimated at the of and consecutive $X.X adjusted expenses a of to have and $XX.X improvement was a expenses adjusted to Slide adjusted Estimated to second the excludes was XX, and on positive over for full-year restructuring by with operating includes second transition

our we trending in the Although, XX, for four does of as Note Also, for in quarters estimated of work there is equal not the the plenty performance direction. as year, right EBITDA Slide noted X on to the is still amount adjusted would do, three the slide financial annual SG&A have occurred The intent present reported. the previously what first have this now view of not the estimate subsequently an that quarters of at of results in we're we've to year the restructured from rate given adjusted company. we run the is sum

that of can to If had evening on a XX, you Slide excitement bit was Friday. resolved quickly turn we Wednesday

be that had project, a underlying an known frame, the to has a Company X-week payment having the that under ABL The because bond not We customer for performance have capital we factors, has two approximately revolver. have those which if outage our requirements. and inadequate And borrowings surety would time cash these operations. very project receivables in addressed significant of working for continue would unavailable combination resulted

and with cash forecasted We customer the the shortfall. lender our address have work both to

the ABL consented borrowing and the its Company believes agreement customer terms with Our in it lender increase principle shorter had the an would that availability revolver. under to sufficiently payment

XXth, However, not customer near-term with again after shortfall. approved letter consent the the committee we cash concerns. and lender's the all believes forecast parts March On informed that credit market combination a were of us future the Company the the we with addresses our negotiated had agreement which constituent of left in contract amendment with March adequately lender liquidity a on that close principle, XXth,

Our will our through as balance strengthen the sheet. year well cash generation

million to Given now restructuring quarter. that our substantial have of and approximately SG&A we achieved have objectives, per rate $X core cost we reduction expect run

development well as quarter-to-quarter from timing expenses, the Although, of some will variance business based legal certain activities. as and professional be such as some fees, there on

revolver. generation strong our support is free plan refinance income lifted. the We quarter Further, a Worth have expect As expect mentioning generally increasing plans. capital cash result, requirements ABL cash we our be working to to our that funded we items fourth to net flow. growth term non-cash no-call in for our a once act the provision plus XXXX proxy of good do as to loan is with should cash

and obtain a cash doing and in objectives begin fund Our interest rate The lower will build reserves. to priority restrictive growth be in plans so less are both our for covenants. to to the XXXX cash

to able $XX.X of the cash be debt deferred will up million, of had end $X.X of cash of at million. million we we of our Restricted letters million At September, the At XXXX, we unamortized million through million of $X.X restricted excluding slightly execution released in had down adjust September. of debt. end you. end priorities collateralized $X.X to build equivalents back $X.X cash million the December, October from the Tracy those $X.X financing and As cost was long-term was of end significantly our to were year reported reducing XXXX, the which at us. our the to of end of revolver as cash, a $X.X upon credit, the at from

Tracy Pagliara

Thanks, Tim.

under recorded the performed earlier, from contracts. the receive growing backlog the as noted next building. represent is plus our in pipeline awarded as revenue dollar cost Company orders to price plus in our Company of regardless be from of Turning the Total cost XX, a amount expected backlog for to XX future Slide currently to the I the work of is and Previously, plus amount of contract. remaining backlog contracts the life fixed reported expected contracts, month revenue

reporting the expected now representative is the future revenue. under believes Company the awarded that revenue contracts However, of total more

XXX total we XXXX, about of XXX million, at to end Our total nearly in XXXX. revenue end of up the or backlog convert backlog backlog at backlog XX% total expect was XX% over XXXX the total of to million up a

guidance of in for is of Our XX% our convertible XXXX the backlog XXXX. nearly revenue midpoint

revenue believe XXXX, We We are productivity backlog we momentum scope Vogtle X initiatives. our our our in our gaining to direct a traction As strategic as achieve a during more ability the result confidence of is growth site goal. the have the we result, in and and improved. on at X attain

customer another our long-term belief agreement validated nuclear Williams for their in years. by Our maintenance seven renewing

headway. to believe the we're year track there, first award decommissioning solid complete customer. For with on preferred market. opportunities and certain the contract on Canada, we status our construction we to in industry, pipeline for our our first capitalize qualifications provider key and In our work mid winning oil in continue gas while Likewise, are the right stream made we as and a maintenance certifications we

revenue XXX million, are million about agreements of we On future to within XXX JV our at core markets. believe the XX, targeted range. see that also have growth powerful our can midpoint raised for tools We both Slide and XX% our growth is expectations you the to which

Our be includes quarter quarter lower while will first for be second the year. largest the which the outage will the work

straightforward to Our fairly business is model.

gross year. Adjusted the expected be million in to the million range X per quarter million in and Our X% range anticipated XX% XX should to XX% of expenses EBITDA XX of SG&A are for be about be X% revenue. to the margins of to to

priorities. Looking that XX gas the generation. we earnings safety can of decommissioning, structured provides further equity cash under on remain oil the we years. our out, over enhance execution can launch initiatives we Slide open line exceptional water Ultimately, growth during With a we of have core we key including that revenue the focus shareholders and our We believe, through summary anticipate improve the in operator, some the plan, the for to profits business, in scale rapidly, growth next questions. and strategic growth business quality Canada. and few know

Operator

gentlemen. and ladies Thank you,

questions be like now management at floor to It will closing [Operator have We the to session. this conducting back comments. seems turn a I'd over Instructions] we question-and-answer for no time.

Deborah Pawlowski

did show then think and but disappeared. that I in think up have we -- Brenda, couple they that a I actually I'm sorry, queue

So, John Deysher…

Operator

I from line to the Deysher Capital. John Okay, Instructions] Pinnacle reach seem we guess, Yes. with to question you. see don't of have [Operator anyone, I Okay.

John Deysher

two I what of financial first those might I first all, which the report if for? the we just of have the comprehensive I'm questions. Very are mention write-offs additional possibility you I appreciate. guess and the magnitude just minor quarter, what in that that's correctly? heard be of can curious, case, they if write-offs

Tim Howsman

Okay.

be John, those will minimal. they for extremely So,

that be or that here in along are it major There some items have first recasting to well have the quarter be team in incurred, but are we Tucker, forward from going et fees As incurred will cetera, line. been incurred the here. expenses recruiting we expected minor no either

John Deysher

question today regard How under And facility. second of ABL is either or the as the to with year-end? available the as much facility of

Tim Howsman

in Generally, who now, Right is customer in the the and million week, the availability of we is pay million well, where during -- we're underlying from receivables range. the the varies particularly, -- And being we able and is down typically to the obviously cash ABL due at that surety the a have week-to-week is be who on week availability once restrictions $X looking the the receipts that customer structure bond who our next $X borrow based et to on history before will balance and typically the oftentimes that cetera. borrow will an receivables on borrow underlying to week. underlying

John Deysher

you in year-end, didn’t availability Okay, number it XX-K was? was? the what as the know see of I what the

Tim Howsman

specifically back on we don’t with you number. can but remember get John, I that

Operator

And & the of question Walthausen Walthausen Company. our is with from John line

John Walthausen

A couple of questions.

we you Is cash we were In positive -- as first cash year as will do goes flow, that the by? flow. that is going become of quarter apparent indicating see or terms manifested soon as you to start the something expect to that

Tim Howsman

in going on of we mentioned, lightest the basis. by, it's first goes quarters I year as the be is Again, think to the as the metered quarter John. revenue a

the expenses here still execution in in all and we restructuring increase are requirements taken that of go XXXX. We've the expenditures of there the but plan. year, the is cash incurred be quite the cash will XXXX, through the frankly, still plan, from get we yes, of through some as So, will it that required as

John Walthausen

with will in now, And terms current what sort we expense of we be think incurring of the interest arrangements year? this do

Tim Howsman

the loan now. the got Well, we've right XX.X% term on

runs a roughly interest. in at $XXX,XXX month all us of So, $XXX,XXX to

in dropping the at for the million $X in fourth $X.X to that down we're be Obviously, hope significantly, and quarter, million point quarter. the anticipate only at on interest point. So, to that it'd fairly but this range we number

John Walthausen

pretty you've think go. you detailed And changed? what has can out a subsequent laid where January, the the In in way next several months, Company

Tim Howsman

don’t I anything. really think

oil I think and We're work in to working on continuing we're gas. our more plan. get

we are in we have, first indicated, We on as working Canada. contract our

So, gain core momentum. business to the continues

presented more in being are decommissioning. opportunities with We

indicated have not part in but way. significant, decommissioning thought the we opportunities was later We year. were the that to in early the feel The of that as we still be going year

the I on think anything So, don’t We're changed. plan. has

working we’re do in future. what in be We’re everyday, very to able to plan progress confident expect and the and our we the

Operator

Instructions] is of Advisors. next Circle with question the Bill [Operator from Our line Nicklin N

Bill Nicklin

nuclear have from generation couple I least at in looks is a the macro questions. industry the kind the government. of getting It like U.S. support

mean So, have could business I on or an longer our you what describe term. wonder if opinion for that might

Tracy Pagliara

generation with of X Vogtle guarantees the that I of of base another the couple within for last the be last, future. X the power government think loan positive and foreseeable to weeks, nuclear the consistent commitment current with U.S. of part the administration's provided billion the X.X load which needs it's for electric is project,

think we as So, good a that sign.

see also subsidies. states different providing We

and those You've circuits got the on current issues. appeals seventh in second

foreseeable a future. keep that support generation base significant the for see of load the bipartisan nuclear to of the on bullish we're So, part we power

Bill Nicklin

consistent that. appears to of wind because going And also doesn't me lines, solar, push that some crowd a green to we're green load go it if carbon part those going kind footprint. nuclear need to with along to as have base we're solution at is and and now it looking the the of And

kind you the that same to as same out And see of do happening? So, fall thing does hopeful category Washington? what's coming that in of

Tracy Pagliara

consistently the form take but I so It's has to it's argue somebody's we renewables to a green, the of say base aisle bipartisan continues for XX% nuclear about rest of probably it's at maintain coal been with up Democratic part -- the clean support, But and guess, is Washington and this, for I be as you nuclear energy, surpassed of the having makes now bipartisan is energy. form fossil, the the Republican the of cleanest and across again bipartisan think cleaner see XX% is there about one than natural load. of is that load. It is much going with then well, or fossil in to and support there gas know support XX few things I XX%. to me, give base the shouldn't is as there

Booker and issue like and President much So agreeing all. don't you people on they Trump have agree Cory on this at

think that's a do we continuing positive. So,

Bill Nicklin

they're to worth, it's For hydrogen. of in for going going mobility is the in water, for to nuclear I kind what's else. hydrogen countries, and heating talk what there hydrolyze followed and use now And certain everything if

you is, by go So, a into plan? currently shift that's decisions what area? on on do And in question you of of kind the interesting. And inform my those could that last any more kind the decommissioning people detail little see the who

Tracy Pagliara

shift big year. last happened the So, really

We is acquired Oyster license Creek. Pilgrim, the that have process of has bought is Holtec three nuclear completing the Yankee. NorthStar acquired and for Vermont Palisades in facilities actually

and balance risk completing to the taking decommissioning on that starting you're the of companies utilities process sheet. of the take So, off see overall

So, we're well Holtec. positioned right now of

there our to we're but that with We other the starting -- opportunities. our experience relationship, potential other decommissioning, to space in are have due through our already for players some see

facilities. go We did when move just license. and plants decisions get to And And think or trend Cook, and going they the Holtec who But SONGS, on phase. shutting we're plants involving we they reason seeing just fuel about operating now made do operating moving plants continuing anymore, talk these fact -- that whether they risk that. there in this decommissioning, evaluate either taking whole Who those down a that that storage, but NorthStar makes have into project all on next So not even then the fuel are into for There's depends there's think the each And then we storage. storage a and are different decommissioning We site funds, elements dry that, full where to less safe that the mode, And who to the operate there's the owns like demolition right there's we decommissioning their periodically actually complete decision? it now different companies money of makes or funds. decommissioning is and in Yes, area, nuclear we the get can like funds with get of what's the of finally, over into all for is is the with the in involved a they on in then schedule big facility. X pushy you XX the break DC in fuel which storage. can because buckets. you are you're decommissioning, are so. for XX we're are demolition the intermediate that. years which Holtec the associated And

is we actually like and is a provide help the we fuel. develop much supervision So, engineering the we or that we're depending the which and with Holtec, higher in how we developing scope canisters XX get. If potentially on and million our to scope. those sort do can be skill, company involved What on to million get per of well again plant depending our positioned think, than XX to it various labor

those with types on them, support provide of we and projects. partner So, them to

Operator

Okay, like we back questions have to this floor over Tracy. I’d turn the no further at time.

Tracy Pagliara

Well, your thank interest you, We Williams. and time today. appreciate for everyone in participating

to With the to business. services operating completion during XXXX transition required company and our only actions the a

the drive have day. rest to and shareholder your value. We Thank enjoy expect you of

Operator

teleconference. today's concludes This you. Thank

You your your participation. disconnect this lines at time. Thank for you may

NOS4-1 (WLMSQ) 2 Apr 192018 Q4 Earnings call transcript