WLMS - Earnings call transcript Q3 2020

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Operator

Greetings, and welcome to Williams Industrial Services Group Inc.

Third Quarter 2020 Financial Results. [Operator Instructions]. Please note, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Relations. Investor Witty, Chris

Chris Witty

Senior good the call. Welcome call With President prepared Randy Tracy and and After third provide for Randy today the questions. quarter Pagilara, their Lay, and CEO; conference me we'll and and morning, you, CFO. to Tracy open everyone. remarks, Williams are VP call Thank on the

www.wisgrp.com. Our on the available slide presentation third quarter is results were website issued at this morning and a company's

Harbor statement. If to Safe will X review the in I you deck, turn Slide the

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

You all www.sec.gov. at can these find documents

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

However, with for note call Please GAAP. should measures prepared Starting a that today the in as will conversation Tracy otherwise. Pagilara. our X, be now isolation accordance not substitute today's GAAP note results operations Tracy. tables go reconciliation comparable Please accompany continuing unless slides. to that additional we with presentation and have consider or release this you of I with over about ahead, turn Slide provided we When information non-GAAP applicable, in a results the of the in will

Tracy Pagilara

again spite business pleased of climate XXXX, continuing and performance Chris, uncertain to good operating the Thanks, of strong Williams. morning, by In I'm and everyone. report challenging

reflecting the the addition, million $XX.X higher margins XXXX in are to largely positive as XXXX, We quarter, will in will our I changing versus few of discuss review. we Canada to $XX.X for in in a from million in of X% work, QX XXXX. revenue operating increased highest QX further Randy guidance of And decommissioning detail QX not this and rose XXXX. year, remainder in this minutes. X.X% Gross which our XX.X% margin In reported

expenses $XXX,XXX While severance and rose this due was primarily operating year-over-year, compensation. of to stock-based

Our SG&A of was for last versus those for adjusted expenses QX X.X% XXXX year. revenues X%

was Adjusted on backlog tight total currently next total the third This, for are decommissioning. XX We $XXX XXXX months. and in costs better in quarter. backlog quarter, operations, of second Please orders that from recall $XXX the the million million, to down growing in $X anticipate nearly QX million debt. and a of XXXX, We end million drive controls used generated fuel we QX to convert helping million of new business. will largely second of compared pay performance. in $X.X $XXX added the storage $XXX maintaining our we cash million turn, We in of million EBITDA revenue at the while overall which with we that bottom down from the ended is was line $X.X to quarter which

Now Slide turn X. let's to

of likely With and our to which before the our continue Contract some gives development we bullish. efforts XXXX, us XXXX, QX During will by for have reiterate, active COVID-XX certain the business markets mind, closure new the our come delayed these this to and delayed pipeline were for pandemic. near-term in still robust of XXXX. and foreseeable curtailed end including confidence awards awards conditions usual, growth from the and end company progress the of momentum our in anticipate Nonetheless, will be future. than outlook constrained of We prospects, QX economic currently otherwise third awards in quarter remains high to more respects. visibility with tentative customers an were

opportunities contract U.S. even At to best the and our business quarter, for modifications are geographies of outside construction time, focus This Since in underscores our quarter. of certain broader our and range end the our with X persistent new project. have the still margin on same just a backlog, expanding we million nuclear reflecting orders face customers includes the importantly, gross board. margins and markets end significantly of over Our that XXXX, our posted nuclear X Vogtle increase quarterly of the presenting services. we expanding unfavorable new gross $XX across of during success the backlog. the Most to in third added diversifying

more still We operating interest to expense. improvements as We're capacity margins, cost sometimes though taking quarter-to-quarter. steady, to provide control returns now are serve attractive and working The hard results line lower process actions ensure well to also as will facilities top provide we're implementing revenue company's refinance as vary accelerates. credit initiatives the growth better to

Our process completed plan original early we March. the rights in second after begin quarter, to refinancing in was offering our our

engendered us in However, to capital our plan. caused the markets by the COVID-XX alter turmoil

subsequently future. future. XXXX this a and details like the currently the circumstances. to efforts January, feasibility and to of about in closing next and the team the During further the expect leading confident operating moving effort, the of announce in the off review with thank anticipate third near this second to quarter, intend of refinancing to forward determine about our we the optimistic and At year. this end we that refinancing the more are year's unforeseen we state I'd guidance review, market on we year, barring by environment. instead remain point, of Randy in provide for Overall, the his our findings We company kicked conducted any the early we quarter. Based refinancing

volumes, next results. our that guidance together Given year have another margins and flow the fact is a solid, the year make at to make not that few our about our results our of everything backlog our and our increasing call, of speaks discuss end financial comments hand but changed in good, demand of the the for skill commitment over to now and will employees. improved Randy? close detail. this services greater more gross operations, refinancing is completed, we to I'll the cash strength is pipeline are and one Randy appears being coming The to of the

Randall Lay

Thank you, Tracy, everyone. and good morning,

on of revenue Turning Sales from well sites Tracy revenue continued the additional to X. as Vogtle Canada. year-over-year, posted as million and as $X the reflecting decommissioning million rose for higher We $XX.X quarter, Slide of mentioned. work $X.X million of slightly work

last due are operating expense XX.X% shows gross to for Slide modification, of mentioned. XX.X% improved revenue operations for $X.X indicated, versus quarter As a as benefited X product third or million Tracy than offsetting more the to we from to disruptions year. million quarter XXXX $X COVID-XX. Tracy not due The the any seeing We trends posted contract company. some material of mix of our profit or revenue costs

the $X.X G&A and We the expect to XXXX with $X compensation. XX% reporting between expenses solid with million unchanged a coming related in increase third were Operating and quarters continue last million stock-based to higher margins XX%. to guidance severance quarter versus year, due the our for

a range X.X% last Our in adjusted to year. severance fourth quarter be and stock-based the We margins for X% rose from for operating similar anticipate to operating margin compensation.

of in entire a I conclusion some the about close as the bringing COVID-XX. and to Tracy, call to the playing with process is refinancing. to out he albeit We're largely the this reiterate QX. priority our said wanted planned, to due what to status has turning Before This been process year, delays very back

We will, of posted plays course, keep as investors the timing our out.

while guidance lowering remarks. now flexibility, Our maximum our turn call Tracy? his meaningfully closing Tracy forward. strategy a is XXXX our burden for ensure of going interest review and back expense financial to to the I'll

Tracy Pagilara

Randy. Thanks,

to X. Turning Slide

reaffirming XXXX. our guidance are We for fiscal

XXXX. to to reminder, EBITDA X% million, margins far the million as be forecasted range in to million range. of revenue X.X%. to already adjusted expect of $XX thus a upper is $XX EBITDA to we've of $XXX to of end generated XX% be We Adjusted And the XX% and million million in of at gross the $XX.X $XXX SG&A

to bid completing possible operator, refinancing into build we that, is backlog more bolster improved to said poised on myriad confident balance we opportunities potential debt We're I up continue our drive also as sheet, XXXX. and shareholders. on business earlier, As its open for QX to a are during backlog, XXXX. actively about add line near-term company our With the focused of as returns can Overall, for the results soon the heading and increase questions.

Operator

Instructions]. [Operator

with Hills Litchfield question comes Research. Theodore first O'Neill from Our

Theodore O'Neill

could and business nuclear was general. give in opportunities if into Canada you wondering us for XXXX outlook I in your

Tracy Pagilara

outside -- quarter of we closed outlook strong. opportunities are professional X orders construction Canada, particularly The in of projects. in and we've -- the are already services couple a this opportunities And for Vogtle X as with I indicated, for

about well. good feeling we're So that as

Theodore O'Neill

debt. both? the center Is refinancing the lane or debt about talking that or new you're the And mid-cap,

Tracy Pagilara

them. Both of It's both.

Operator

Our next question Ryan Dick with from comes Colliers.

Richard Ryan

on Tracy, of work? between new markets, maybe other parse the you water end, X. And million, since new X awards you've nuclear business how would quarter outside I of decommissioning Vogtle the booked $XX add-in think, you Any like said some some So and and treatment? that

Tracy Pagilara

are at outside other Randy, in then -- help have that me our scattered some you that least There X maybe this, And among I'd of are and the markets. X/X. are nuclear orders say, comprised other X, with -- probably orders end can we Vogtle --

Randall Lay

Yes.

have, also terms of that are I of some diversify, think also working in And awards right, we markets have some we in to that we and that's Tracy. the actively category.

Richard Ryan

just normal the that course into anything deal adjustments with? Okay. and million. just that Is of of is read to of $XX cancellations, kind kind business there that Or you number? In

Randall Lay

it I can course. think leave Tracy, that normal is go -- sorry. say, ahead, I I'll

Tracy Pagilara

experienced, little normal materially. than bit maybe but higher It's it's course. we've Yes, not a

have or change adjustments. Normally adjustments, don't favorable orders. we when we So have they're many that cancellations

addressing but -- for it's some -- unprecedented not to cancellations. have So not us certainly

Richard Ryan

Okay.

your X Vogtle the with has expectations timing anything there? On the changed of work, and X

Tracy Pagilara

of No. the XXXX November The Company November maintaining is publicly other XXXX. and dates in-service Southern

they is unit done than they maybe a X. July get respect I what the can latter, Is that that correct? that -- Kelly, what earlier with like August little bit may they that's probably think -- for or to feel that.

Kelly Powers

they That's on. Yes. are planning currently what

Tracy Pagilara

Yes.

Richard Ryan

But your still mean Do you additional Okay. have the obviously, of Canada? still limitations. Canadian the to some work travel some current COVID pipeline? And I state hanging with in out get what's ability bidding there, there's what's -- been

Tracy Pagilara

comment U.S. the starting I'll in was XXXX, the do that let contract So to further utilities back. In we're activity. bid with we do than come little more Canada Bruce to Canadian terms in Kelly professional the activity general, down but for very Power. The strong. We've probably doing essentially been our is well on with relationship impacted shut services bid really a work able see of that that.

Kelly Powers

unit, unit follow but there's They second X be for Yes. and have soon. the lead bid -- is have coming been unit refurbishment services bid bids they able refurbishment work. delayed, opportunities to anticipate their The unit second And their we well will on additional as as professional very of ongoing, refurbishments. being out

So still even quarters for for good follow though it very looks third it and and would and has we the XXXX book this burn occurred fourth years. during not year, opportunities that

Richard Ryan

comes submit what to have Just And the a time bid long a you how response follow-on, kind out, put trying line Kelly. of Just to the together. kind then a decision When of process? bid? is time do

Kelly Powers

being by of quarter quarter awarded first -- first and in work bidding anticipate We the the both XXXX. end of the Yes.

Operator

with is Partners. Walter Our MAZ Schenker from question next

Walter Schenker

in the past the labor wage you I availability are in inflation need? costs what the wondering skilled gone labor actually that at to COVID, starting getting have issues question and point, see And about to of given been regard labor asked what this having as a seeing you extent I'm any you've -- to curious inflation? you're you're if forward. I've any

Tracy Pagilara

evaluating In the general, pretty per in And se not on whether end front don't think us. a are about the it's we opportunities -- terms available we're Walter, labor. to of going problem for we rigorous have we

don't Kelly, So involved on bit elaborate if day? a day we more don't further because why little don't you're bid. point this we have you it, think we'll to

Kelly Powers

Yes.

bid anticipate not And at don't that We we on valid. availability we we absolutely can labor cost. have jobs is if or labor labor. get any point, the don't point Your impacts this seen,

lot of COVID, As slowed a labor delayed or the has availability. increased actually during fact, with a very matter being markets it of

by unaffected point, this at we've So been COVID.

Walter Schenker

who've Is has that's then refinancing a question. so is like not much -- color And -- debt for companies taken don't and of a in in of common lot wash even hope this And close exaggeration. difficult it -- but case type Okay. you of some this know with have redone. forever, I taken not I an bit had been involved to give the literally been flash little small a has why delays a long, Can -- just am that the had a possible This world time. liquidity? refinancing it of you it shortly, I in getting to

Tracy Pagilara

Randy, at you that? want to a shot take

Randall Lay

Sure, absolutely.

answer short getting the the first part year very think I friendly the is were markets So capital of not done. a refinancing to the in

to we prospect market into of that it. very be we we a year before went the we wanted about So concluded good that sure getting had something this talked as

was So test done. likely market we that a something get we determined did could that that,

facilities. company, very us current partners, would there to I do. we've think going that's -- that this some as we grow out refinancing that case, think the in justify good financing had forward we And our we're set because, moving for opportunities what from that but are we

that you're do the level changing So lending I But yes, do you time. probably higher you a it's some group, whenever than diligence take amending partners. that have if of unfortunate a due these facility existing with you're a just think things

not getting I that this company. done. We're So went are those a the think small factors into

open was to to the that So financing really solve grow get solve of we're epidemic that the not against terms problem was frankly the the specifically lot in available, COVID that trying targeted platform us providing that financing nor a company. a was of to

here. on So that. all are solid also path don't Everything factors. we're disagree that I I it than takes a longer with think those But should.

Operator

John Our from Walthauser next Walthausen comes & with Company. question

John Walthausen

First on quarter. good of all, a congratulations

the level The low the other think new rate you had I bookings was what of question, in success why. quarter. But can understand your obviously, a in can But disappointingly it's talk actually on awarded the versus business we quarter? you expectation that about

Tracy Pagilara

a had I'd hit abnormal for into been it environment's that there's worth directly, to awards We're One getting rate of and about because I -- our into going that about terms the some other the point of reasons. to was expected. we converted of Thank say, had variety for -- been actual of little indicated, of we a you. an got $XX up in out typical from bid. of just bit as and a $XXX XX% couple million what we pushed in XXXX order. terms COVID-XX Well, award is million we -- an be unusual to of backlog

anything Bid our just so a it are typical not it XX%. -- our more down on our XX%. until backlog have And we rate say put And XX% below to order. brought it's technical. purchase and that like So wasn't don't processes more we But are things moving I -- probably -- definitely quickly. methodical was as hit much

news it work's the those we the the the why we still So get the that's But when able and position ready good we for we're to to awards forward been. where the They to work. win in reason a visibility good customers have backlog would going liked try weren't to of the -- move awards. is to have to They're still are have canceled. to still with done, the weren't that get

John Walthausen

Okay. the market... And on very competitors busy circle. of some to That's impediment helpful. the extent, an pricing just that's also is some in to or and pricing being Are keep the aggressive

Tracy Pagilara

to contract got bigger. get scope of then changed renewal that being made. why The period that rescoped, on renewed of period with certain There competitive of that the are had wasn't competitors was a There some and one got renewal -- certainly, issues awards the the we bids, were got the projects not -- renewal pricing, technical some of we for but going time. were thought

pricing. these So just be due issues we we're expect. environment we'd not lose of that -- what to things an that didn't in just are competitive It's seem business prevalent than more myriad a normally to uncertain

Operator

Management. [Operator question comes Pinnacle Capital next Instructions] John Deysher with Our from

John Deysher

curious. Just

for all rebound at request of proposal seeing this of are But than beginning still of point? now any how whole terms it's we those at in pandemic? probably I are realize at we this the levels terms RFPs In prepandemic. bid the process, versus less

Tracy Pagilara

Certainly, New for in instance, York.

standstill. close to York a New

work So we're although we've bid still it to is bids. on We're Canada new in Florida. is New nuclear bid slow, We're back. where with some of our been we're the expecting John, York. customer saw in work more But constrained, more some indicated, our as We seeing seeing certainly Kelly -- more come development. some bids more seeing -- again, customers.

still. more COVID-XX still that's we customers. curtailed able new So That's in put where for expected be by have would to to been bids

you this, do You than the on So see do. that bids to like picked I up. Kelly, add? any perspective have hasn't other you'd more

Kelly Powers

no, customers. we're volume. the No, through as with restrictions with little It's and accurate. as actually customers these up see big away, that increase new to able government I FP&L, a FP&L bit new we it's see a & COVID is in volume steady new But few COVID. -- been increase, I customers steady going increase actually and been pretty lower a customer and soon the think go few but new at with government not lower Canada. will travel seen with fairly And coming entities bids, industry, bids. existing been an a And We've in through a Florida our get that's Light, big anticipate, volume, Where we've to existing still customers we've Power yet.

and to from and go volume. will customers it opening current new able be their lifted Canada, up anticipate to visit we the increase travel it bids being So restrictions being

John Deysher

That's helpful. Great.

on to million. shares We're to the I of the the that? market we cap NASDAQ? of status close question have other are Kind now. pretty a minimum what's you of $XX that have The is, where of with relisting think

Tracy Pagilara

to -- be We trading has $X share our above for or XX consecutive have to above days. price

share So get good above price to go. we be $X, then we'll to need the and

John Deysher

Okay.

little a got bit... You've

Tracy Pagilara

I to price for ready fixed. Yes, to not me, we're that just got file trading XX and forward. excuse -- take after can for got mean, above that. we've to -- XX it's We the -- -- be then it XX above It's listed consecutive above we share $X the long paperwork, to got to move us get won't XX and days, get be

Operator

Our next with Capital. comes from Mishra question Vishal Mishra

Vishal Mishra

hear to then the you backlog. question questioners already Good quarter, are -- mentioned so in it, decline being couple about good alluded refinancing. And My Randy future. to have results. on the good news was, of you And that had a Tracy, bullish

was wondering you're you which new it been I future, so it So nuclear expect talked think -- And do do -- -- which you decommissioning? when has areas the about about, U.S. nuclear orders? what did mean? you what Canada bullish -- Is is

Tracy Pagilara

in done next big expect wouldn't side, we're to We our chance markets. we grow be we're we'll very really, we've about there professional decommissioning in have Canada nuclear the on that backlog. got job year, professional do. them. that good bullish bullish there going -- good services to of all on and get a But We a We think end We've a have. opportunity contract services that to renewed. the

in to bid work think and Kelly As to projects year. we we're on indicated, maintenance have going Canada next actually

this anything year. had haven't We

work projects the to good nuclear and customers X now won for, it's do last we've years. been We years, see we done we Vogtle starting work had for -- X not in X, one, to that but at continue X X are

think had I X or X one been years.

been had years. X one Another

were and is great on into of our we've which fact we we work, long-term was at a which sheet do done based the the And that Vogtle win that was as -- agreements, sheet. balance result back to a balance able project work to we breaking improving. customers, unable we're should is that something our function again of doing So be nuclear maintenance think

other X very excited areas The are we're about Florida.

that's We hardening that of wastewater of business need is then of for natural called to going a us effect. over bring going to in gas working there There's to who there's the wastewater because storm put work that be in to the up give -- our and going And be Eversource that the done wastewater. start years. in down it's an of They're then we think explosion a utility billion billion been work legislation you have sweet infrastructure. replaced. future the and recall, have And spend in in $X.X to into distribution gas billion great that of for need $X.X do has water Florida replace on terms a so XXXX, infrastructure bought We We're $X next $XX that's to -- year billion that growing just infrastructure. natural Florida customer because already need natural Columbia. Eversource, us working a may them or about north, foreseeable gas that's helping to storm spot a to amount XX with new right infrastructure with there a to their is to Colombia, there's was the called infrastructure. Massachusetts upgrade replace on, definite replace work

expect sort So going didn't -- Canada. our build in what's really business the a the that in months, we're to core couple business, ago, those in business next excited would been we And in And of now, the to I in about decommissioning years core here big able markets near adjacent or backlog X any into go our future. we're have areas. we're have our of

-- adjacent well. we've to into and we're So markets proven do an ability go

bullish. I'm why that's So

Operator

be Pagilara there like back to point, questions remarks. for this further appears queue. over I'd closing Mr. the in turn At no call to to

Tracy Pagilara

you have much. Thank and look you Thank In be season, today. interest time hope Williams, and your all holiday care take you, Thanksgiving of very in participating appreciate and a forward happy happy everyone, meantime, next your again and and for to the very I safe. talking of quarter. We families

Operator

This concludes conference. today's

you your lines You thank disconnect time, this we may your participation. and at for

NOS4-1 (WLMSQ) 13 Nov 202020 Q3 Earnings call transcript