WLMS - Earnings call transcript Q2 2022

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Operator

Greetings and welcome to Williams Industrial Services Group Second Quarter 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to, Chris Witty, Investor Relations Advisor. you. Thank

begin. may You

Chris Witty

Vice good Damien call. Welcome call With President open CFO. for Lay, Tracy and Vassall, call and second President the their Vice today the prepared quarter Pagliara, and Executive Randy CEO; conference me Tracy and and morning, you COO; to Damien and everyone. After Williams are President provide Thank questions. on we'll the remarks,

company's is Web were results yesterday and available issued on presentation the at Our second quarter site a afternoon www.wisgrp.com. slide

If the slide I'll other or All are you performance such includes in review uncertainties statements. may the concerning conference statements two the that and call in than by risks indicated to and actual company's from beliefs company's statements cause turn This implied statements, future the historical statements. now call to involve the events performance expectations this facts, and Safe presentation, Harbor of forward-looking forward-looking included that represent different statement. be materially

company will Although cause materially other expectations statements as the give documents such that believes such results been could company's Important differ the the no disclosed are actual conference expectations this call assurance factors it as forward-looking to reflected are correct. that reasonable, in to from can the in with SEC. have prove the expectations that well with filed

on site at or documents Web www.sec.gov. our all these You can find

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

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

Tracy Pagliara

projects, to in everyone. losses, sales, second reflect morning, call The $XX.X million $XX.X our today. nuclear delayed We work lack XXXX work the appreciate fiscal The benefit you of annual a for compared guidance customer that assumed in good the the Williams earnings did customer from previously Chris, -- utility. outage XXXX posted in lower of outage XXXX. announced by revenue were and as quarter fact for our original Thanks, and losses of joining impact year-over-year, XXXX. million, and not

second we the reflecting speak as but Accordingly, the pipeline convert more rate remain this as for I'll runoff has the X.X% well for certain in of previously quarter detail, and transmission our not Damien costs to business customers. greater locations we quarter, future expenses disclosed Florida and the in water include $XXX,XXX expense. will serve $X.X our consider regarding which nonrecurring the to and be company's investments outlook at to our the overall for these items startup contracts anticipated reduced, primarily startup growth We optimistic million critical previously litigation did we project profitability. the discuss roughly in year new gross associated but about been with to However, second-half a distribution second achieved the the of moment. revenue Operating were improved delays. XXXX. revenue in of margin to costs due quarter,

orders. due period finished loss all Reflecting and than action these tied quarter. wrongful a being of to discussed, business. Williams' $X.X We lower negative of $XXX these backlog taken was an to a the also employee fees the the competitor relating million, million are for adjusted EBITDA factors, to which with previously As against delayed legal anticipated was former

versus of active of end March. the have $XXX approximately However, approximately $XXX at million we pipeline currently opportunities, million

of state Now to outlook. further like the and I'd to slide the discuss four, current turning business

when expectations company's for X, the events several about Williams August our adjusted, the markets, as near-recession-proof even current business the overall and XXXX guidance recent on future dampened remain macroeconomic and for earnings robust a demand, was trends. second-half outlined end solid we year. of optimistic As is with strong Williams

million in and the past, $XXX core expected nuclear As nicely in markets, energy. as shortly Act, support future. billion for continues And Washington. existing fuel Williams development $XXX the billion billion and very in use new a signed the Infrastructure production in for billion Jobs the credits mentioned [HALEU] of gain operating, This $XXX $X $XX includes facilities a designed nuclear critical [Ph] energy nuclear Act are to Investment of in to estimated be clean to bullish also for source up Infrastructure to end delivery, of keep water, energy Reduction investments advanced attention and reactors Moreover, stacks over Williams' nuclear.

advantage and of decisions company. the key in plan I'll underlying investments provide line near-future of strategic Damien industry a on to driving today, will years about focused top benefit Importantly, the are to based we're including taking commentary future that the speaks, the more After back growth and thoughts trends new Williams making and Damien? favorable in come markets, some accelerated performance, on come.

Damien Vassall

Thank Tracy, and you, morning, good everyone.

mentioned, delayed business If you XXXX. some Sales to fewer timing decommissioning to due with reflecting as along contracts year-over-year and five, slower of work, nuclear slide project versus reduced and revenue million $XX.X $XX.X million award activity. for posted the declined generally turn we Tracy quarter, in

outlook the certain While XXXX, the impacted second-half, Tracy have overall delays to discussed. been for as our projects award out pushed

contracts projections six demand award shows federal the target operating our in pent contract anticipate Slide markets. shortly and expect based industry, to our or posted healthy company. and for overall gross up fully backlog trends mix, pick utilities, and year. XXXX. by municipalities certain of into second The government, we growth spending heading on However, less along of is of activity up revenue This including the Florida, margin ongoing work nuclear of We revenue or as X.X% in reflects quarter, the $X.X XX.X% previously of lower profit announced. million the million versus $X.X with impact project for last project

additional also costs to incurred market. into expansion tied the the delivery company's energy startup We

distribution Excluding impact the the gross our adjusted the projects, in Florida aforementioned of compression of the would fiscal A release. quarter. our transmission revenue million, impact company's second the water from 'XX margin business, and $X.X associated have of into million and $X.X provided margin been is of in gross gross margin with negative XX% entry earnings QX reconciliation this

substantially gross expect $X.X quarter, last expenses end improve year. will including We million by margins year. litigation second-half, $XXX,XXX were versus the million for the the the business the expense Operating of to that and $X.X in Florida of complete second

closing our down results going of line back to I'll improve streamline for Tracy? progress While guidance bottom and review a making now bringing overhead ways and expenses, continue XXXX we the forward. call turn assess Tracy remarks. his our further to

Tracy Pagliara

Thanks, to XXXX that Damien. revise last forth sets Slide issued week. guidance we seven

to margins be that of to SG&A As nonrecurring We between and reflecting upgrading for to post X.XX% of X.X%. revenue to to which, to previously be revenue. changed systems. mentioned, QX now near-term several our envision issues is X% impacted revenue, between million X.XX% outlook to results. some expected our X.X% and million Without and SG&A and between due gross anticipate $XXX $XXX be to expect We year X% the IT ongoing investments

for outlook is caused second million the prospects half between long-term forecast been near-term for horizon. with trajectory year. $X.X the diminished matter nor to robust for None we many strong numerous our that to EBITDA The transition half the a end factors. opportunities million. dampened by of a $X the XXXX and see headwinds in the of be consider company the have competitor adjusted the first Our remains period on markets that XXXX We of

interest in which our team. shareholders. was First, the is left of to taken purpose of to crucial company former to response both who by drive protecting business strategic advancing our pursuing This better actions and our employee of reorganization The after matter litigation is plan. legal of management and execution the a

further operations and management wrapped emerge. new our is Florida we no ensure cash issues run-off problems the in project execution Second, year Florida identified We anticipate this contracted process up to and business. managing execution actively the are fully Water addressing

businesses prudent space, has XXXX. transmission funding in been and the has Williams impacted negatively in thus Finally, far start-up our results which distribution

anticipate and improvement capital better our municipality relationships, with second management Overall, things line blue an expected growth southeast utility supporting water to more by chip higher continuous half. impact government among growth turning and continued risk demand complete, top for mix However, turns, favorable spending in territories and population substantial through of power infrastructure with and our and sustainable we industry and corresponding results progressively and improving funding positive other grid with customer particularly are a largely investments budgets building facilities. operating systems organization processes, the of margins the such in corner. are driven we with gross And better businesses a operating margin

carbon-free about energy In base in U.S. load of the addition, provides electricity nuclear the currently of XX%

will years Investment to about and To supplement to Infrastructure the facilities. $XX Act While the the will Reduction the utility incent budgets operations and for to and existing median XX these over Jobs of capital customers, keep nuclear reiterate, provide require major up means Inflation just brilliance nuclear continued is capital a expenditures age of Act as customers billion from running. operation that of existing reactor they

following. To you means quarters shareholders, to XX% and confident Revenue sequentially margins rising third quarter. target get of future the we have year track year. the and in quarter in expected to be our we to the Williams' of anticipate And about during consistent second the remain third this back last on the end, For with to gross that come the that of the performance and XX% our the normal improve fourth in with fourth expect. ability upbeat range half to strongest and the provide previously the

to future company for margins X% are XXXX also to was return for in or as growth planning XXXX. double-digit EBITDA better of the We adjusted to the the and average

we accretive have And of prove to will during transition investments earnings. partners this the period. our support Our strong lending to continue

We going us prospect operating volume open new positioning an even and flow, by line better operator, resulting results. Our improve questions. the With forward, and the mix cash we of and for XXXX, business greater thereafter. bottom rebound orders line that, the will the for stronger excited rest over in and can of for performance remain results EBITDA,

Operator

Thank you.

questions. & a your come of questions Our the first conducting Julio Please question-and-answer be proceed Instructions] now [Operator will session. Sidoti from We Romero with with Company. line

Julio Romero

it for did quarter the be I versus kind the but compared the gross of hoping last magnitude about of morning. guess on the and color off the mention how think the just start And Tracy, second-half pretty year more I on and revenues know the to you third margins to quarter? strongest, cadence the of a guidance, the first-half. a should quarter fourth good of little implies Hey, strong to expect you we

Tracy Pagliara

will quarter the fourth We the largest. be -- we well, as said there,

consistent And third be the third our The we're Vogtle in of X work the X looking XXXX. -- nuclear, at X the commissioning X at forward quarters. get prior that of we've quarter done Unit pickup Unit would earnest, experienced with as to and project toward try and particularly moves in in to big what year-end plans, actual by of a

Our picking having a getting We're margins. T&D we're up. is to where actually positive business also point

in bad and the of we water -- the So business are contract. end the seeing

So, a think go when think confidence to our and which where rate big more will together you we us have much achievable. on second-half that all we backlog the get can and first-half. are that than based quarter is the run pipeline But positive that we be combine fourth is gives have

Julio Romero

in about thinking into just what and Maybe you XXXX end guys expected side, substantially you are know potential expecting? said currently completed XXXX helpful. by baking impact 'XX, that's be Florida running in happen of what terms could of you the to I results further Okay, you're than that in,

Tracy Pagliara

to let I'm going about that. Damien talk

Damien Vassall

confidence at June, high completed we're will A what's those so a be contracts, projects this on we of few quarter. Yes, through completed will of look we the actually these and as them left have performed in get QX. work level

XXXX going schedules contracts. So, estimated and based on there completion will into run dates the the effect those off to just be of no minimal

Julio Romero

XXXX, at maybe getting transition of that all understanding of year, how the that's terms first-half how Just in two potentially the coming to business kind looking to of the And 'XX you capacity maybe helpful. Okay, capacity grow -- with much down have you see fiscal a while but of talk dollars sales additional might be beyond? and stimulus bills to on pipe? least and XXXX, then, have the about much ourselves, ahead take

Tracy Pagliara

ability the And more we success that Yes, to in bring -- for do the crews is staff feel TECO that's but union them. thus do to talented our to get we've pretty a talented working model confident is little our the very our company. that and and we've challenging, non-union leaders ability -- far with purely bit function a ability with side, craft to that. On of following, our into we're and key is had the it's That's good hire customers. Eversource us. The

about the I good as Williams feel up coming, our work. excited But but labor going we that we're definitely work. the same our that think of -- and we some to And over competitive so being we as advantages we opportunities more else market have it. to that to challenges it's can preferred ability place and meet staff live come in with are about certainly, So, terms does, in a everyone peers of

Julio Romero

follow-ups. Understood. Appreciate the questions, taking I'll and any you with back guys circle

Tracy Pagliara

you. Thank

Operator

O'Neill come proceed Hills Our next [Operator with Theodore your you. Thank with Litchfield questions. of from the Please line Research. Instructions] questions

Theodore O'Neill

much. what the to that detail are little and going investments be you the very repeating were us Thanks give distribution in on just more not forward? transmission costs Could a quarter going

Damien Vassall

Theo, earnings to we Yes, we provided costs night, to provided itemize a those what in release, were. last table our

So, $X.X of approximately our million in had in [dampered] [Ph] the the that gross that quarter, really results to so we impact margins, if you QX. look negative

-- forward. to forward our turned As increased activity business, in we T&D the look as which corner, seen gross beyond, so QX and going the margins improve significantly will we've we've

'XX. And the drive -- will of is to will it's which fixed the cover be increasing, So, able it's remainder one, that volume the costs. that

Theodore O'Neill

just was overhead Yes, it I it. I what like issue. sort But part; just some was for on detail it numerical causing looking was the of understood sounds an

Damien Vassall

correct. That's

Theodore O'Neill

you thank Okay, very much.

Operator

Thank from Please Instructions] next with questions the John proceed your Pinnacle. questions. you. Our [Operator come line of with Deysher

John Deysher

Good for taking Thanks morning, questions. everyone. our

was business, those there Just a on Were as exactly composition costs million were associated of opened question, $X.X being the exactly of with? or offices follow-up the the the what prior new T&D what costs?

Damien Vassall

standing Connecticut, to as to standing relates combination of warehouse a addition Yes, materials up equipment new But Norwalk, locations. those Tampa, so offices costs experienced in we particularly in have it we there's a Florida. in as up as well that, two other and opened, as

storage tools warehouse for of you of you have costs, office fuel, have consumables. So, costs equipment, and other types

So, space. a which is to the that the our just It's more costs start expect equipment-intensive relative business, would to incur rest when in the standard labor. T&D new you business of you particularly primarily

John Deysher

to I But labor hire to there's and well, Okay. some as those guess people offices you correct? man had would warehouses,

Damien Vassall

Yes, not for that's costs. negative equipment it's correct, however that's -- really the margin the driver between those impact,

Tracy Pagliara

Yes, most the of billable. are people

Damien Vassall

right. That's

John Deysher

on Okay. that And new have sunk, road facilities in the costs and half? those been the you're now you're additional coming is profitability covering in from second suggesting that's the expenses, to revenue those the

Damien Vassall

Eversource On more it's the side, because mature. Eversource the average a yes bit

about months into are year business. We a -- XX that

in the we started we the business up of this year. Within business, Tampa T&D that first to stood -- month

to a on drive our to bit as in there, we Connecticut, - go have Norwalk, a more better little but to how there understanding there's model. experiences runway more the is economic little a So, bit based

some are lessons to that we could there the apply Eversource Tampa So, from business. learnt

John Deysher

you to -- Okay, in get with a that for to not just be you am feel operating is half. I how trying startups are certain losses going second the there the associated so

Damien Vassall

in volume, overheads behind to believe negative the there uptick And the enough cover given volume between Overall to we be gross businesses, startup are any cost those us. two margins. to issues the impact will minimizing

John Deysher

any year the that Okay, to next good. opened or so? business Are planned offices there other be for over

Tracy Pagliara

Yes.

we it the to be will where the being in this market plans looking year next year. and are monies for and the [IIJA] after, nothing But at are have opening where gauging appropriated. [Ph] year more southeast the We offices northeast

Tracy Pagliara

so Okay, of XXXX. more no

is Vogtle Okay, good. XXXX, side, startup And think December on X right? Vogtle or the will When be I you indicated of is December? commissioned that it?

Tracy Pagliara

current the - nuclear most the position that's current on That's southern of that.

John Deysher

what Vogtle And X? about

Tracy Pagliara

approval began significant from -- that next X. is just pretty year fuel they Unit NRC a milestone loading for Either early or later got which this the

months. So, forward a be next going that's six in is going of the there there lot work to

John Deysher

are saying? Williams that you Work benefits

Tracy Pagliara

that and joint Yes. mean Bechtel. Williams I venture with benefits our

John Deysher

Okay, good. going forward. Well, optimistic wish all picture. good we you an And that's right, luck

Tracy Pagliara

Thank you. Thanks, John.

Operator

there further Thank queue. to no appear you. callers At this in be time, the

over any So, Pagliara back Mr. call I remarks. turn for will to the closing

Tracy Pagliara

of as for that. patience the and for And Thank Williams in have remainder is upward had our the participating we've very challenges you the a everyone today, believe with the we've business your future we year. share we for on of But swing beyond half of as XXXX. strong first indicated,

next time and interest talking look care So, Take to again, appreciate and in be Williams. quarter. your And forward we safe.

Operator

We today's This does teleconference. conclude your participation. appreciate

may time. Enjoy the this at day. disconnect lines your your rest You of

NOS4-1 (WLMSQ) 12 Aug 222022 Q2 Earnings call transcript