Williams Industrial Services Group Inc.

Greetings and welcome to Williams Industrial Third 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. 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 Advisor. Thank you. You may begin.

Thank you, and good morning, everyone. Welcome to the Williams Third Quarter Conference Call. With me on the call today are Tracy Pagliara, President and CEO, Randy Lay, EVP and COO, and Damian Vassal, Vice President and CFO. After Tracy and Damian provide the prepared remarks, we'll open the call for questions. Our third quarter results were issued yesterday afternoon, and a slide presentation is available on the company's website at www.wisgroup.com. If you now turn to slide two in our presentation, I'll review the Safe Harbor Stable. 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 could cause actual results to differ materially from the company's expectations are disclosed in this conference call as well as with 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 release and slides. Please note that our conversation today will be about continuing operations unless noted otherwise. Starting with slide three, I'll now turn the call over to Tracy Palliera. Please go ahead, Tracy.

Thanks, Chris, and good morning, everyone. Williams posted third quarter revenue of $56.7 million, which while up slightly from Q2, was down significantly from last year's comparable period. As I'll review further in a moment, we've continued to face challenges converting pipeline to revenue in 2022. Our gross margin was 1.3% for the quarter, reflecting the previously discussed issues associated with our Florida water business, as well as costs tied to expanding into the transmission and distribution markets. Without such expenses, our adjusted gross margin was 9.7%. I will discuss these issues near the end of the call when reviewing our current guidance and outlook. Operating expenses were $7 million this quarter, which included professional fees and legal expenses related to matters settled during the quarter. In addition, the variance year-over-year reflects the fact that in 2021, we reversed approximately $1.2 million of incentive compensation, reducing costs accordingly. Adjusted EBITDA was $6.2 million for the quarter, reflecting the fact that we received net proceeds of approximately $10.8 million related to two legal settlements during the period. Without such payments, which are counted as other income, EBITDA would have been negative. At the end of the quarter, the company's backlog stood at roughly $353 million, up more than 1%. $100 million from Q2's $234 million. This reflects several recent wins, most notably the multi-year extension of business with a large southern utility providing maintenance and modification services at various sites throughout their footprint. This work, through a longstanding joint venture, is estimated to be worth approximately $120 million of revenue over the next four years. Now turning to slide four, I'd like to discuss the state of the business and current growth outlook. It goes without saying that our results continue to be negatively impacted by several factors, including the slower than anticipated award environment, additional losses in our Florida water business, and not recurring startup costs and legal fees. While our top line has been depressed due to delayed customer decisions, We remain optimistic about the long-term prospects for the business. There is strong demand for our services driven by the large capital budgets of our customers, as well as government funding, reflecting bipartisan support in Congress for the prioritization of infrastructure spending. In addition, our recent wins and strengthening backlog give us reason to be more positive about the future. We can continue to actively focus on new business development while concurrently taking measures to streamline the company's operations and reduce costs. We remain steadfastly dedicated to improving WIM's growth and profitability profile. I'll have more comments at the end of the call, but we'll now hand it over to Damien to discuss our quarterly financial results.