Williams Industrial Services Group Inc.

Greetings, and welcome to Williams Industrial Service Group fourth quarter and full year 2021 financial results. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during a conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Chris Witte, Investor Relations. Thank you. You may begin.

Thank you, and good morning, everyone. Welcome to the Williams Fourth Quarter Conference Call. With me on the call today are Tracy Palliera, President and CEO, and Damian Vassell, Vice President and CFO. After Tracy and Damian provide their prepared remarks, we'll open the call for questions. Our fourth quarter results were issued yesterday afternoon, and a slide presentation is available on the company's website at www.wisgrp.com. If you now turn to slide two in our presentation, I'll briefly review the Safe Harbor Statement. This conference call may include forward-looking statements that represent the company's expectations and beliefs concerning future events that involve risks and uncertainties and may cause the company's actual performance to be materially different from the performance indicated or implied by such statements. All statements other than statements of historical facts included in this conference call are forward-looking statements. Although the company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors that can cause actual results to differ materially from the company's expectations are disclosed in this conference call as well as with the other documents filed with the SEC. You can find all these documents on our website or at www.sec.gov. During today's call, we will also discuss some non-GAAP financial measures. We believe these are useful in evaluating the company's performance. However, you should not consider this additional information in isolation or as a substitute for results prepared in accordance with GAAP. When applicable, we will have provided a reconciliation of non-GAAP measures with comparable GAAP results in the tables that accompany today's press release and slides. Please note that our conversation today will be about continuing operations unless otherwise noted. Starting with slide three, I'll now turn the call over to Tracy Pelliera. Please go ahead, Tracy.

Thanks, Chris, and good morning, everyone. A lot has happened since we last spoke. And the team and I are optimistic about the evolving landscape and outlook for 2022. But first, let me discuss how we ended 2021. Williams posted fourth quarter revenue of $799.2 million, up significantly year over year. And overall revenues for fiscal 2021 rose to $305 million from $269 million in 2020. We also posted a gross margin of 11.6 for the quarter and 10.3% for the year, and operating expenses of $6.8 million for the quarter, $24.5 million for 2021 in total. Adjusted EBITDA was $3.6 million for the quarter and $12.7 million for the year. While these metrics were within our revised guidance, they are not. where we want them to be, but rather reflect the factors I spoke about last quarter, including operating losses on projects in our Florida business and contract delays regarding a key Canadian nuclear contract. In early 2022, the company then announced it failed to renew the subject Canadian contract and separately that certain nuclear decommissioning work at three sites worth approximately $360 million of backlog through 2029 had been transferred to a competitor. As previously noted, the loss of the decommissioning business does not materially impact any particular year, including 2022. In addition, it was not high margin in nature. We began the year with roughly $271 million of backlog. While this is obviously materially lower than last quarter, it still leaves us in solid shape to meet our guidance for 2022. We also believe there are numerous opportunities to grow our backlog and accelerate the top line this year. After uplisting to the New York American Stock Exchange in 2021, we began a comprehensive review of our organization to determine whether we had the right people and structures in place to advance our core values, and meet our goals. As a result, and to address issues faced over the year, we reorganized and upgraded our leadership team in November and enhanced our business development focus and operating rigor. The company is also in the process of implementing new systems to streamline and strengthen the organization. In summary, Williams has addressed the root causes behind our operating and contract losses and is now poised to deliver good performance going forward with extensive opportunities to scale the organization in the future. Turning to slide four, I'd like to discuss the outlook a little bit further. As I just mentioned, our adjusted year-end backlog stood at approximately $271 million. However, on top of this backlog, we're betting on significant additional work currently in the pipeline. Some investors have recently wondered how we can make our current revenue guidance when the backlog itself is lower than this target. To this, I just want to clarify two things. First, the previously reported backlog had a significant percent of revenue to be recognized in future years, such that the impact of the decommissioning losses in 2022, as I mentioned, is small, only about $30 million. Second, we always have a meaningful portion of revenue in a given year that is actually won and booked within the 12-month period. In other words, there is nothing unusual about the amount of yet unbooked backlog in our anticipated total 2022 revenue. We're actually very excited by the opportunities on the horizon, including the 2021 Infrastructure Investment and Jobs Act. along with the expanding economy and overall demand for our services in general, lead us to be bullish about the future. There are multiple paths to grow our business based on the industries we serve, the investments and infrastructure being planned, and our diversified blue-chip customer base. William's reputation remains second to none, and we will continue to leverage our experience and relationships to penetrate new clients, expand business with existing ones, and pursue higher margin growth opportunities. I have more comments at the end, but we'll now hand it over to Damian to discuss our quarterly financial results in greater detail. Damian?