http://fasb.org/us-gaap/2021-01-31#OtherAssetsNoncurrenthttp://fasb.org/us-gaap/2021-01-31#OtherLiabilitiesCurrenthttp://fasb.org/us-gaap/2021-01-31#OtherLiabilitiesNoncurrent0001136294--12-312022Q2falseP1Yhttp://fasb.org/us-gaap/2021-01-31#OtherAssetsNoncurrenthttp://fasb.org/us-gaap/2021-01-31#OtherLiabilitiesCurrenthttp://fasb.org/us-gaap/2021-01-31#OtherLiabilitiesNoncurrentP6MP1YP1YP1YP120DP3YP3Y0001136294us-gaap:CommonStockMember2021-04-012021-06-300001136294us-gaap:RestrictedStockMemberwlms:ModificationTo2020LongTermIncentiveProgramMemberwlms:PerformanceVestingMember2022-01-012022-06-300001136294srt:MinimumMemberus-gaap:RestrictedStockMemberwlms:TwoThousandTwentyTwoLongTermIncentivePlanAndTwoThousandFifteenPlanMemberwlms:PerformanceVestingMember2022-01-012022-06-300001136294srt:MinimumMemberus-gaap:RestrictedStockMemberwlms:TwoThousandTwentyOneLongTermIncentiveProgramAndTwoThousandFifteenPlanMemberwlms:PerformanceVestingMember2022-01-012022-06-300001136294srt:MaximumMemberus-gaap:RestrictedStockMemberwlms:TwoThousandTwentyTwoLongTermIncentivePlanAndTwoThousandFifteenPlanMemberwlms:PerformanceVestingMember2022-01-012022-06-300001136294srt:MaximumMemberus-gaap:RestrictedStockMemberwlms:TwoThousandTwentyOneLongTermIncentiveProgramAndTwoThousandFifteenPlanMemberwlms:PerformanceVestingMember2022-01-012022-06-300001136294srt:MinimumMemberus-gaap:RestrictedStockMemberwlms:TwoThousandTwentyOneLongTermIncentiveProgramAndTwoThousandFifteenPlanMemberwlms:PerformanceVestingMember2021-01-012021-06-300001136294srt:MaximumMemberus-gaap:RestrictedStockMemberwlms:TwoThousandTwentyOneLongTermIncentiveProgramAndTwoThousandFifteenPlanMemberwlms:PerformanceVestingMember2021-01-012021-06-300001136294us-gaap:RestrictedStockMemberwlms:ModificationTo2021LongTermIncentiveProgramMemberwlms:PerformanceVestingMember2022-01-012022-06-300001136294country:CA2021-12-310001136294srt:MinimumMemberus-gaap:RevolvingCreditFacilityMember2022-01-012022-06-300001136294wlms:CashBasedAwardsMember2022-06-300001136294wlms:DebtInstrumentIfEarlyTerminationOccursOnOrPriorToFirstAnniversaryOfClosingDateMemberwlms:SeniorSecuredAssetBasedRevolvingCreditFacilityPncMember2022-01-012022-06-300001136294wlms:DebtInstrumentIfEarlyTerminationOccursAfterFirstAnniversaryOfClosingDateMemberwlms:SeniorSecuredAssetBasedRevolvingCreditFacilityPncMember2022-01-012022-06-3000011362942021-09-0200011362942021-09-022021-09-020001136294wlms:PensionMemberus-gaap:DiscontinuedOperationsDisposedOfByMeansOtherThanSaleMemberwlms:ElectricalSolutionsMember2021-05-122021-05-120001136294srt:MinimumMemberwlms:DebtInstrumentIfTotalLeverageRatioIsGreaterThan3.00Memberwlms:TermLoanDueDecember2025Member2022-01-012022-06-300001136294srt:MinimumMemberwlms:DebtInstrumentIfTotalLeverageRatioIsEqualToOrLessThan3.00AndGreaterThan2.00Memberwlms:TermLoanDueDecember2025Member2022-01-012022-06-300001136294srt:MaximumMemberwlms:DebtInstrumentIfTotalLeverageRatioIsEqualToOrLessThan3.00AndGreaterThan2.00Memberwlms:TermLoanDueDecember2025Member2022-01-012022-06-300001136294srt:MinimumMemberwlms:TermLoanDueDecember2025Member2022-01-012022-06-300001136294wlms:TermLoanDueDecember2025Memberus-gaap:SubsequentEventMember2022-08-030001136294srt:MinimumMemberwlms:TermLoanFacilityMember2022-06-300001136294wlms:DebtInstrumentIfTotalLeverageRatioIsGreaterThan3.00Memberwlms:TermLoanDueDecember2025Member2022-01-012022-06-300001136294wlms:DebtInstrumentIfTotalLeverageRatioIsEqualToOrLessThan3.00AndGreaterThan2.00Memberwlms:TermLoanDueDecember2025Member2022-01-012022-06-300001136294srt:MinimumMemberwlms:TermLoanDueDecember2025Memberus-gaap:LondonInterbankOfferedRateLIBORMember2022-01-012022-06-300001136294wlms:SeniorSecuredAssetBasedRevolvingCreditFacilityPncMemberwlms:CanadianDollarOfferedRateMember2022-01-012022-06-300001136294srt:MaximumMemberwlms:TermLoanDueDecember2025Member2022-01-012022-06-300001136294wlms:TermLoanFacilityMember2022-01-012022-06-300001136294us-gaap:RevolvingCreditFacilityMember2022-06-300001136294us-gaap:RestrictedStockMemberwlms:TwoThousandTwentyTwoLongTermIncentivePlanAndTwoThousandFifteenPlanMemberwlms:PerformanceVestingMember2022-01-012022-06-300001136294us-gaap:RestrictedStockMemberwlms:TwoThousandTwentyOneLongTermIncentiveProgramAndTwoThousandFifteenPlanMemberwlms:PerformanceVestingMember2021-01-012021-06-300001136294wlms:PaymentSuretyBondMember2022-06-300001136294wlms:PerformanceBondMember2021-12-310001136294wlms:TermLoanDueDecember2025Member2022-04-012022-06-300001136294wlms:TermLoanDueDecember2025Member2022-01-012022-06-300001136294wlms:TermLoanDueDecember2025Member2021-04-012021-06-300001136294wlms:TermLoanDueDecember2025Member2021-01-012021-06-300001136294wlms:LongTermLiabilitiesOfDiscontinuedOperationsAndOtherLongTermLiabilitiesMemberus-gaap:SegmentDiscontinuedOperationsMember2021-06-300001136294wlms:LongTermLiabilitiesOfDiscontinuedOperationsAndOtherLongTermLiabilitiesMember2021-06-300001136294us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310001136294us-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-300001136294us-gaap:TreasuryStockMember2022-04-012022-06-300001136294us-gaap:CommonStockMember2022-01-012022-03-310001136294us-gaap:TreasuryStockMember2021-01-012021-03-310001136294us-gaap:CommonStockMember2021-01-012021-03-310001136294us-gaap:RetainedEarningsMember2022-06-300001136294us-gaap:AdditionalPaidInCapitalMember2022-06-300001136294us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300001136294us-gaap:RetainedEarningsMember2022-03-310001136294us-gaap:AdditionalPaidInCapitalMember2022-03-310001136294us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-3100011362942022-03-310001136294us-gaap:RetainedEarningsMember2021-12-310001136294us-gaap:AdditionalPaidInCapitalMember2021-12-310001136294us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001136294us-gaap:RetainedEarningsMember2021-06-300001136294us-gaap:AdditionalPaidInCapitalMember2021-06-300001136294us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-300001136294us-gaap:RetainedEarningsMember2021-03-310001136294us-gaap:AdditionalPaidInCapitalMember2021-03-310001136294us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-3100011362942021-03-310001136294us-gaap:RetainedEarningsMember2020-12-310001136294us-gaap:AdditionalPaidInCapitalMember2020-12-310001136294us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001136294srt:MaximumMemberwlms:TwoThousandEighteenLongTermIncentiveProgramMember2022-06-300001136294wlms:TwoThousandSixteenLongTermIncentiveProgramMember2022-06-300001136294wlms:TwoThousandSeventeenLongTermIncentiveProgramMember2022-06-300001136294wlms:TwoThousandEighteenLongTermIncentiveProgramMember2022-06-300001136294wlms:Plan2015Member2022-01-012022-03-310001136294wlms:Plan2015Member2021-06-152021-06-150001136294wlms:TwoThousandEighteenLongTermIncentiveProgramMember2021-01-012021-06-300001136294wlms:NonEmployeeDirectorMemberus-gaap:RestrictedStockMemberwlms:EquityIncentivePlan2015Memberwlms:ServiceVestingMember2022-06-300001136294wlms:EmployeesMemberus-gaap:RestrictedStockMemberwlms:TwoThousandTwentyTwoLongTermIncentivePlanAndTwoThousandFifteenPlanMemberwlms:ServiceVestingMember2022-06-300001136294wlms:EmployeesMemberus-gaap:RestrictedStockMemberwlms:TwoThousandTwentyTwoLongTermIncentivePlanAndTwoThousandFifteenPlanMemberwlms:PerformanceVestingMember2022-06-300001136294us-gaap:RestrictedStockMemberwlms:TwoThousandTwentyOneLongTermIncentiveProgramAndTwoThousandFifteenPlanMemberwlms:ServiceVestingMember2021-06-300001136294us-gaap:RestrictedStockMemberwlms:Plan2015Member2021-06-150001136294us-gaap:RestrictedStockMemberwlms:OutsideOf2015PlanMemberwlms:PerformanceAndServiceVestingMember2021-05-170001136294us-gaap:RestrictedStockMember2022-06-300001136294us-gaap:RestrictedStockMember2021-06-300001136294wlms:Plan2015Member2021-06-150001136294wlms:NonEmployeeDirectorMemberus-gaap:RestrictedStockMemberwlms:EquityIncentivePlan2015Memberwlms:ServiceVestingMember2022-01-012022-06-300001136294wlms:EmployeesMemberus-gaap:RestrictedStockMemberwlms:TwoThousandTwentyTwoLongTermIncentivePlanAndTwoThousandFifteenPlanMemberwlms:ServiceVestingMember2022-01-012022-06-300001136294wlms:EmployeesMemberus-gaap:RestrictedStockMemberwlms:TwoThousandTwentyTwoLongTermIncentivePlanAndTwoThousandFifteenPlanMemberwlms:PerformanceVestingMember2022-01-012022-06-300001136294us-gaap:RestrictedStockMemberwlms:Plan2015Member2021-06-152021-06-150001136294us-gaap:RestrictedStockMemberwlms:OutsideOf2015PlanMemberwlms:PerformanceAndServiceVestingMember2021-05-172021-05-170001136294us-gaap:RestrictedStockMemberwlms:TwoThousandTwentyOneLongTermIncentiveProgramAndTwoThousandFifteenPlanMemberwlms:ServiceVestingMember2021-01-012021-06-3000011362942025-01-012022-06-3000011362942022-07-012022-06-3000011362942024-01-012022-06-3000011362942023-01-012022-06-300001136294us-gaap:TimeAndMaterialsContractMember2022-04-012022-06-300001136294us-gaap:FixedPriceContractMember2022-04-012022-06-300001136294country:US2022-04-012022-06-300001136294us-gaap:TimeAndMaterialsContractMember2022-01-012022-06-300001136294us-gaap:FixedPriceContractMember2022-01-012022-06-300001136294country:US2022-01-012022-06-300001136294us-gaap:TimeAndMaterialsContractMember2021-04-012021-06-300001136294us-gaap:FixedPriceContractMember2021-04-012021-06-300001136294country:US2021-04-012021-06-300001136294country:CA2021-04-012021-06-300001136294us-gaap:TimeAndMaterialsContractMember2021-01-012021-06-300001136294us-gaap:FixedPriceContractMember2021-01-012021-06-300001136294country:US2021-01-012021-06-300001136294country:CA2021-01-012021-06-300001136294wlms:TermLoanDueDecember2025Memberus-gaap:SubsequentEventMember2022-08-032022-08-030001136294wlms:AmendmentOfRevolvingCreditFacilityMemberus-gaap:SubsequentEventMember2022-08-032022-08-030001136294us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-012022-06-300001136294us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310001136294us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-012021-06-300001136294us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310001136294wlms:OtherLongTermAssetsMember2022-06-300001136294wlms:OtherLongTermAssetsMember2021-12-310001136294wlms:OtherLongTermLiabilitiesMember2022-06-300001136294wlms:OtherLongTermLiabilitiesMember2021-12-310001136294us-gaap:OtherCurrentLiabilitiesMember2022-06-300001136294us-gaap:OtherCurrentLiabilitiesMember2021-12-310001136294us-gaap:RetainedEarningsMember2022-04-012022-06-300001136294us-gaap:RetainedEarningsMember2022-01-012022-03-3100011362942022-01-012022-03-310001136294us-gaap:RetainedEarningsMember2021-04-012021-06-300001136294us-gaap:RetainedEarningsMember2021-01-012021-03-310001136294wlms:SeniorSecuredAssetBasedRevolvingCreditFacilityPncMember2022-01-012022-06-300001136294wlms:SwingLoanMemberMember2022-06-300001136294wlms:CanadianDollarLoansMember2022-06-300001136294wlms:TermLoanDueDecember2025Member2020-12-160001136294wlms:SeniorSecuredAssetBasedRevolvingCreditFacilityPncMember2020-12-160001136294wlms:DelayedDrawTermLoanFacilityMember2020-12-160001136294wlms:ClosingDateTermLoanMember2020-12-160001136294us-gaap:LetterOfCreditMember2022-06-300001136294srt:MinimumMember2022-06-300001136294srt:MaximumMember2022-06-300001136294wlms:LongTermLiabilitiesOfDiscontinuedOperationsAndOtherLongTermLiabilitiesMemberus-gaap:SegmentDiscontinuedOperationsMember2022-06-300001136294wlms:LongTermLiabilitiesOfDiscontinuedOperationsAndOtherLongTermLiabilitiesMember2022-06-300001136294wlms:RichmondCountyConstructorsMember2022-06-300001136294wlms:RichmondCountyConstructorsMember2021-12-310001136294us-gaap:RestrictedStockMemberwlms:ModificationTo2021LongTermIncentiveProgramMemberwlms:PerformanceVestingMember2022-06-300001136294country:CA2022-01-012022-06-300001136294wlms:PensionMemberus-gaap:DiscontinuedOperationsDisposedOfByMeansOtherThanSaleMemberwlms:ElectricalSolutionsMember2018-07-110001136294us-gaap:DiscontinuedOperationsDisposedOfBySaleMember2022-04-012022-06-300001136294us-gaap:DiscontinuedOperationsDisposedOfBySaleMember2022-01-012022-06-300001136294us-gaap:DiscontinuedOperationsDisposedOfBySaleMember2021-04-012021-06-300001136294us-gaap:DiscontinuedOperationsDisposedOfBySaleMember2021-01-012021-06-300001136294us-gaap:DiscontinuedOperationsDisposedOfBySaleMemberwlms:ElectricalSolutionsMember2022-04-012022-06-300001136294us-gaap:DiscontinuedOperationsDisposedOfBySaleMemberwlms:ElectricalSolutionsMember2022-01-012022-06-300001136294us-gaap:DiscontinuedOperationsDisposedOfBySaleMemberwlms:ElectricalSolutionsMember2021-04-012021-06-300001136294us-gaap:DiscontinuedOperationsDisposedOfBySaleMemberwlms:ElectricalSolutionsMember2021-01-012021-06-300001136294country:CA2022-06-300001136294us-gaap:OtherNoncurrentAssetsMemberwlms:SeniorSecuredAssetBasedRevolvingCreditFacilityPncMember2022-06-300001136294us-gaap:LongTermDebtMemberwlms:TermLoanDueDecember2025Member2022-06-300001136294us-gaap:OtherNoncurrentAssetsMemberwlms:SeniorSecuredAssetBasedRevolvingCreditFacilityPncMember2021-12-310001136294us-gaap:LongTermDebtMemberwlms:TermLoanDueDecember2025Member2021-12-310001136294us-gaap:LongTermDebtMember2022-06-300001136294us-gaap:LongTermDebtMember2021-12-310001136294wlms:TermLoanDueDecember2025Member2022-06-300001136294wlms:TermLoanDueDecember2025Member2021-12-310001136294wlms:TermLoanDueDecember2025Memberus-gaap:LondonInterbankOfferedRateLIBORMember2022-01-012022-06-300001136294wlms:TermLoanDueDecember2025Memberus-gaap:BaseRateMember2022-01-012022-06-300001136294wlms:SeniorSecuredAssetBasedRevolvingCreditFacilityPncMemberus-gaap:LondonInterbankOfferedRateLIBORMember2022-01-012022-06-300001136294wlms:SeniorSecuredAssetBasedRevolvingCreditFacilityPncMemberus-gaap:BaseRateMember2022-01-012022-06-300001136294wlms:SeniorSecuredAssetBasedRevolvingCreditFacilityPncMember2022-06-300001136294wlms:SeniorSecuredAssetBasedRevolvingCreditFacilityPncMember2021-12-310001136294us-gaap:TreasuryStockMember2022-06-300001136294us-gaap:CommonStockMember2022-06-300001136294us-gaap:TreasuryStockMember2022-03-310001136294us-gaap:CommonStockMember2022-03-310001136294us-gaap:TreasuryStockMember2021-12-310001136294us-gaap:CommonStockMember2021-12-310001136294us-gaap:TreasuryStockMember2021-06-300001136294us-gaap:CommonStockMember2021-06-300001136294us-gaap:TreasuryStockMember2021-03-310001136294us-gaap:CommonStockMember2021-03-310001136294us-gaap:TreasuryStockMember2020-12-310001136294us-gaap:CommonStockMember2020-12-3100011362942021-06-3000011362942020-12-310001136294us-gaap:DiscontinuedOperationsDisposedOfBySaleMemberwlms:ElectricalSolutionsAndMechanicalSolutionsMember2022-06-300001136294us-gaap:DiscontinuedOperationsDisposedOfBySaleMemberwlms:ElectricalSolutionsAndMechanicalSolutionsMember2021-12-310001136294us-gaap:RestrictedStockMemberwlms:ServiceVestingMember2022-04-012022-06-300001136294us-gaap:RestrictedStockMemberwlms:PerformanceAndMarketVestingMember2022-04-012022-06-300001136294us-gaap:RestrictedStockMemberwlms:ServiceVestingMember2022-01-012022-06-300001136294us-gaap:RestrictedStockMemberwlms:PerformanceAndMarketVestingMember2022-01-012022-06-300001136294us-gaap:RestrictedStockMemberwlms:PerformanceAndMarketVestingMember2021-04-012021-06-300001136294us-gaap:RestrictedStockMemberwlms:PerformanceAndMarketVestingMember2021-01-012021-06-300001136294us-gaap:RevolvingCreditFacilityMember2022-04-012022-06-300001136294us-gaap:RevolvingCreditFacilityMember2022-01-012022-06-300001136294us-gaap:RevolvingCreditFacilityMember2021-04-012021-06-300001136294us-gaap:RevolvingCreditFacilityMember2021-01-012021-06-3000011362942021-04-012021-06-3000011362942021-01-012021-06-300001136294us-gaap:CommonStockMember2022-04-012022-06-300001136294us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-3000011362942022-04-012022-06-300001136294us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-3100011362942021-01-012021-03-3100011362942022-06-3000011362942021-12-3100011362942022-08-0800011362942022-01-012022-06-30xbrli:sharesiso4217:USDiso4217:USDxbrli:sharesxbrli:purewlms:itemwlms:D

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                 to                

Commission File No. 001-16501

Graphic

Williams Industrial Services Group Inc.

(Exact name of registrant as specified in its charter)

Delaware

73-1541378

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

200 Ashford Center North, Suite 425

Atlanta, GA 30338

(Address of principal executive offices) (Zip code)

(770) 879-4400

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

WLMS

NYSE American

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes   No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

As of August 8, 2022, there were 26,422,761 shares of common stock of Williams Industrial Services Group Inc. outstanding.

Table of Contents

WILLIAMS INDUSTRIAL SERVICES GROUP INC. AND SUBSIDIARIES

Table of Contents

Part I—FINANCIAL INFORMATION

2

Item 1. Financial Statements

2

Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021 (unaudited)

2

Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2022 and 2021 (unaudited)

3

Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2022 and 2021 (unaudited)

4

Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2022 and 2021 (unaudited)

5

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021 (unaudited)

6

Notes to Condensed Consolidated Financial Statements (unaudited)

7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

23

Item 3. Quantitative and Qualitative Disclosures about Market Risk

31

Item 4. Controls and Procedures

31

Part II—OTHER INFORMATION

Item 1. Legal Proceedings

32

Item 1A. Risk Factors

32

Item 6. Exhibits

33

SIGNATURES

34

1

Table of Contents

Part I—FINANCIAL INFORMATION

Item 1. Financial Statements.

WILLIAMS INDUSTRIAL SERVICES GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands, except share data)

June 30, 2022

  

December 31, 2021

ASSETS

  

  

Current assets:

Cash and cash equivalents

$

656

$

2,482

Restricted cash

 

468

 

468

Accounts receivable, net of allowance of $327 and $427, respectively

 

33,267

 

35,204

Contract assets

 

13,483

 

12,683

Other current assets

 

10,812

 

11,049

Total current assets

 

58,686

 

61,886

Property, plant, and equipment, net

 

977

 

653

Goodwill

 

35,400

 

35,400

Intangible assets

 

12,500

 

12,500

Other long-term assets

 

7,640

 

5,712

Total assets

$

115,203

$

116,151

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

10,939

$

12,168

Accrued compensation and benefits

 

9,182

 

12,388

Contract liabilities

 

2,289

 

3,412

Short-term borrowings

10,223

676

Current portion of long-term debt

1,050

1,050

Other current liabilities

 

10,226

 

11,017

Current liabilities of discontinued operations

104

316

Total current liabilities

 

44,013

 

41,027

Long-term debt, net (Note 8)

 

30,128

 

30,328

Deferred tax liabilities

2,445

2,442

Other long-term liabilities

 

4,443

 

1,647

Long-term liabilities of discontinued operations

3,523

4,250

Total liabilities

 

84,552

 

79,694

Commitments and contingencies (Note 10)

Stockholders’ equity:

Common stock, $0.01 par value, 170,000,000 shares authorized and 26,869,938 and 26,408,789 shares issued, respectively, and 26,427,635 and 25,939,621 shares outstanding, respectively

 

263

 

261

Paid-in capital

 

93,208

 

92,227

Accumulated other comprehensive loss

 

(122)

 

(95)

Accumulated deficit

 

(62,692)

 

(55,930)

Treasury stock, at par (442,303 and 469,168 common shares, respectively)

 

(6)

 

(6)

Total stockholders’ equity

 

30,651

 

36,457

Total liabilities and stockholders’ equity

$

115,203

$

116,151

See accompanying notes to condensed consolidated financial statements.

2

Table of Contents

WILLIAMS INDUSTRIAL SERVICES GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands, except per share data)

  

2022

  

2021

2022

  

2021

Revenue

$

56,059

$

91,571

$

125,618

$

152,422

Cost of revenue

53,778

82,218

117,628

136,971

 Gross profit

2,281

9,353

7,990

15,451

Selling and marketing expenses

402

231

732

442

General and administrative expenses

6,294

6,372

12,365

12,683

Depreciation and amortization expense

46

46

112

87

Total operating expenses

6,742

6,649

13,209

13,212

Operating income (loss)

(4,461)

2,704

(5,219)

2,239

Interest expense, net

1,261

1,213

2,480

2,506

Other income, net

(240)

(1,232)

(419)

(1,592)

Total other (income) expense, net

1,021

(19)

2,061

914

Income (loss) from continuing operations before income tax

(5,482)

2,723

(7,280)

1,325

Income tax expense (benefit)

(171)

77

58

262

Income (loss) from continuing operations

(5,311)

2,646

(7,338)

1,063

Income (loss) from discontinued operations before income tax

(47)

243

(47)

164

Income tax expense (benefit)

(640)

18

(623)

37

Income (loss) from discontinued operations

593

225

576

127

Net income (loss)

$

(4,718)

$

2,871

$

(6,762)

$

1,190

Basic loss per common share

Income (loss) from continuing operations

$

(0.20)

$

0.10

$

(0.28)

$

0.04

Income from discontinued operations

0.02

0.01

0.02

0.01

Basic income (loss) per common share

$

(0.18)

$

0.11

$

(0.26)

$

0.05

Diluted income (loss) per common share

Income (loss) from continuing operations

$

(0.20)

$

0.10

$

(0.28)

$

0.04

Income from discontinued operations

0.02

0.01

0.02

0.01

Diluted income (loss) per common share

$

(0.18)

$

0.11

$

(0.26)

$

0.05

See accompanying notes to condensed consolidated financial statements.

3

Table of Contents

WILLIAMS INDUSTRIAL SERVICES GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands)

2022

  

2021

2022

  

2021

Net income (loss)

$

(4,718)

$

2,871

$

(6,762)

$

1,190

Foreign currency translation adjustment

 

(169)

 

30

 

(27)

 

34

Comprehensive income (loss)

$

(4,887)

$

2,901

$

(6,789)

$

1,224

See accompanying notes to condensed consolidated financial statements.

4

Table of Contents

WILLIAMS INDUSTRIAL SERVICES GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

Accumulated

Common Shares

Other

$0.01 Per Share

Paid-in

Comprehensive

Accumulated

Treasury Shares

(in thousands, except share data)

  

Shares

  

Amount

  

Capital

  

Income (Loss)

  

Deficit

  

Shares

  

Amount

  

Total

Balance, December 31, 2020

25,926,333

$

256

$

90,292

$

28

$

(58,673)

(589,891)

$

(8)

$

31,895

Restricted stock awards granted

164,388

Restricted stock units vested

274,448

4

120,723

2

6

Tax withholding on restricted stock units

(545)

(545)

Stock-based compensation

625

625

Foreign currency translation

4

4

Net loss

(1,681)

(1,681)

Balance, March 31, 2021

26,365,169

$

260

$

90,372

$

32

$

(60,354)

(469,168)

$

(6)

$

30,304

Issuance of common stock

Restricted stock units vested

19,501

Tax withholding on restricted stock units

40

40

Stock-based compensation

424

424

Foreign currency translation

30

30

Net income

2,871

2,871

Balance, June 30, 2021

26,384,670

$

260

$

90,836

$

62

$

(57,483)

(469,168)

$

(6)

$

33,669

Accumulated

Common Shares

Other

$0.01 Per Share

Paid-in

Comprehensive

Accumulated

Treasury Shares

(in thousands, except share data)

  

Shares

  

Amount

  

Capital

  

Income (Loss)

  

Deficit

  

Shares

  

Amount

  

Total

Balance, December 31, 2021

26,408,789

$

261

$

92,227

$

(95)

$

(55,930)

(469,168)

$

(6)

$

36,457

Restricted stock awards granted

291,894

Stock-based compensation

(147)

(147)

Foreign currency translation

142

142

Net loss

(2,044)

(2,044)

Balance, March 31, 2022

26,700,683

$

261

$

92,080

$

47

$

(57,974)

(469,168)

$

(6)

$

34,408

Issuance of common stock

Restricted stock units vested

169,255

26,865

Tax withholding on restricted stock units

2

(165)

(163)

Stock-based compensation

1,293

1,293

Foreign currency translation

(169)

(169)

Net loss

(4,718)

(4,718)

Balance, June 30, 2022

26,869,938

$

263

$

93,208

$

(122)

$

(62,692)

(442,303)

$

(6)

$

30,651

See accompanying notes to condensed consolidated financial statements.

5

Table of Contents

WILLIAMS INDUSTRIAL SERVICES GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Six Months Ended June 30,

(in thousands)

2022

  

2021

Operating activities:

Net income (loss)

$

(6,762)

$

1,190

Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:

Net income from discontinued operations

(576)

(127)

Deferred income tax provision (benefit)

3

(25)

Depreciation and amortization on plant, property, and equipment

112

87

Amortization of deferred financing costs

415

415

Amortization of debt discount

100

100

Bad debt expense

(101)

(51)

Stock-based compensation

577

1,460

Changes in operating assets and liabilities:

Accounts receivable

2,137

(3,040)

Contract assets

(787)

(4,268)

Other current assets

177

(1,561)

Other assets

(2,219)

(175)

Accounts payable

(1,251)

1,546

Accrued and other liabilities

(601)

4,432

Contract liabilities

(1,122)

(1,246)

Net cash used in operating activities, continuing operations

(9,898)

(1,263)

Net cash used in operating activities, discontinued operations

(365)

(139)

Net cash used in operating activities

(10,263)

(1,402)

Investing activities:

Purchase of property, plant, and equipment

(438)

(418)

Net cash used in investing activities

(438)

(418)

Financing activities:

Repurchase of stock-based awards for payment of statutory taxes due on stock-based compensation

(163)

(501)

Proceeds from short-term borrowings

144,220

140,194

Repayments of short-term borrowings

(134,673)

(138,482)

Repayments of long-term debt

(525)

(525)

Net cash provided by financing activities

8,859

686

Effect of exchange rate change on cash

16

128

Net change in cash, cash equivalents and restricted cash

(1,826)

(1,006)

Cash, cash equivalents and restricted cash, beginning of period

2,950

9,184

Cash, cash equivalents and restricted cash, end of period

$

1,124

$

8,178

Supplemental Disclosures:

Cash paid for interest

$

2,292

$

1,887

Cash paid for income taxes, net of refunds

$

$

1,553

See accompanying notes to condensed consolidated financial statements.

6

Table of Contents

WILLIAMS INDUSTRIAL SERVICES GROUP INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1—BUSINESS AND BASIS OF PRESENTATION

Business

Williams Industrial Services Group Inc. (together with its wholly owned subsidiaries, “Williams,” the “Company,” “we,” “us” or “our,” unless the context indicates otherwise) was initially formed in 1998 as GEEG Inc., a Delaware corporation, and in 2001 changed its name to “Global Power Equipment Group Inc.,” and, as part of a reorganization, became the successor to GEEG Holdings, L.L.C., a Delaware limited liability company. Effective June 29, 2018, the Company changed its name to Williams Industrial Services Group Inc. to better align its name with the Williams business, and the Company’s stock trades on the NYSE American LLC under the ticker symbol “WLMS.” Williams has been safely helping power plant owners and operators enhance asset value for more than 50 years. It provides a broad range of construction, maintenance, and support services to infrastructure customers in energy, power, and industrial end markets. The Company’s mission is to be the preferred provider of construction, maintenance, and specialty services through commitment to superior safety performance, focus on innovation, and dedication to delivering unsurpassed value to its customers.

Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) on a basis consistent with that used in the Annual Report on Form 10-K for the year ended December 31, 2021, filed by the Company with the U.S. Securities and Exchange Commission (“SEC”) on March 16, 2022 (the “2021 Report”). In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments, including all normal recurring adjustments, necessary to present fairly the unaudited condensed consolidated balance sheets and statements of operations, comprehensive income, stockholders’ equity and cash flows for the periods indicated. All significant intercompany transactions have been eliminated. The December 31, 2021 condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP. These unaudited condensed consolidated interim financial statements and accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the 2021 Report. Accounting measurements at interim dates inherently involve greater reliance on estimates than at year-end. The results of operations for any interim period are not necessarily indicative of operations to be expected for the full year.

The Company reports on a fiscal quarter basis utilizing a “modified” 5-4-4 calendar (modified in that the fiscal year always begins on January 1 and ends on December 31). However, the Company has continued to label its quarterly information using a calendar convention. The effects of this practice are modest and only exist when comparing interim period results. The reporting periods and corresponding fiscal interim periods are as follows:

Reporting Interim Period

Fiscal Interim Period

  

2022

  

2021

Three Months Ended March 31

January 1, 2022 to April 3, 2022

January 1, 2021 to April 4, 2021

Three Months Ended June 30

April 4, 2022 to July 3, 2022

April 5, 2021 to July 4, 2021

Three Months Ended September 30

July 4, 2022 to October 2, 2022

July 5, 2021 to October 3, 2021

NOTE 2—RECENT ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Pronouncements

The Company did not implement any new accounting pronouncements during the first six months of 2022. However, the Company is currently evaluating the impact of future disclosures that may arise under recent SEC proposals.

7

Table of Contents

NOTE 3—LEASES

The Company primarily leases office space and related equipment, as well as equipment, modular units and vehicles directly used in providing services to its customers. The Company’s leases have remaining lease terms of one to ten years. Most leases contain renewal options for varying periods, which are at the Company’s sole discretion and included in the expected lease term if they are reasonably certain of being exercised. In accordance with ASU 2016-02, the Company accounts for lease components, such as fixed payments including rent, real estate taxes, and insurance costs, separately from the non-lease components, such as common area maintenance costs.

In accordance with ASU 2016-02, for leases with terms greater than twelve months, the Company records the related right-of-use assets and lease liabilities at the present value of the fixed lease payments over the lease term at the lease commencement date. The Company uses its incremental borrowing rate to determine the present value of the lease as the rate implicit in the lease is typically not readily determinable.

Short-term leases (leases with an initial term of twelve months or less or leases that are cancelable by the lessee and lessor without significant penalties) are expensed on a straight-line basis over the lease term. The majority of the Company’s short-term leases relate to equipment used in delivering services to its customers. These leases are entered into at agreed upon hourly, daily, weekly, or monthly rental rates for an unspecified duration and typically have a termination for convenience provision. Such equipment leases are considered short-term in nature unless it is reasonably certain that the equipment will be leased for a term greater than twelve months.

On September 2, 2021, the Company made the decision to relocate its corporate headquarters to Atlanta, Georgia and entered into a ten-year lease agreement. The Company completed its relocation in March 2022. The lease is presented as a right-of-use asset and lease liability and the lease liability amounts to $3.3 million with a present value of $2.2 million over a ten-year term. If the Company defaults, the landlord has the right to use the security deposit for rent or other payments due to other damages, injury, expense or liability as defined in the lease agreement. Although the security deposit shall be deemed the property of the landlord, any remaining balance of the security deposit shall be returned by the landlord to the Company after termination of the lease as the Company’s obligations under the lease have been fulfilled. The Company subleased a portion of its former office space and collected $30,000 of sublease income during the six months ended June 30, 2022.

The components of lease expense were as follows:

Three Months Ended June 30,

Six Months Ended June 30,

Lease Cost/(Sublease Income) (in thousands)

2022

2021

2022

2021

Operating lease cost

$

573

$

538

$

1,119

$

1,092

Short-term lease cost

1,611

813

3,228

1,433

Sublease income

(15)

-

(30)

-

Total lease cost

$

2,169

$

1,351

$

4,317

$

2,525

8

Table of Contents

Lease cost related to finance leases was not significant for the three and six months ended June 30, 2022 and 2021.

Information related to the Company’s right-of-use assets and lease liabilities were as follows:

Lease Assets/Liabilities (in thousands)

Balance Sheet Classification

June 30, 2022

December 31, 2021

Lease Assets

Right-of-use assets

Other long-term assets

$

3,379

$

1,527

Lease Liabilities

Short-term lease liabilities

Other current liabilities

$

1,467

$

1,606

Long-term lease liabilities

Other long-term liabilities

2,379

511

Total lease liabilities

$

3,846

$

2,117

Supplemental information related to the Company’s leases were as follows:

Six Months Ended June 30,

(dollars in thousands)

2022

2021

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash used by operating leases

$

1,211

$

1,154

Right-of-use assets obtained in exchange for new operating lease liabilities

2,854

737

Weighted-average remaining lease term - operating leases

5.70 years

1.38 years

Weighted-average remaining lease term - finance leases

1.73 years

2.73 years

Weighted-average discount rate - operating leases

9%

9%

Weighted-average discount rate - finance leases

9%

9%

9

Table of Contents

Total remaining lease payments under the Company’s operating and finance leases were as follows:

Operating Leases

Finance Leases

Six Months Ended June 30,

(in thousands)

Remainder of 2022

$

1,013

$

3

2023

905

6

2024

495

1

2025

375

-

2026

381

-

Thereafter

1,873

-

Total lease payments

$

5,042

$

10

Less: interest

(1,206)

-

Present value of lease liabilities

$

3,836

$

10

NOTE 4—CHANGES IN BUSINESS

Discontinued Operations

Electrical Solutions

During the fourth quarter of 2017, the Company made the decision to exit and sell its Electrical Solutions segment (which was comprised solely of Koontz-Wagner Custom Controls Holdings LLC (“Koontz-Wagner”), a wholly owned subsidiary of the Company) in an effort to reduce the Company’s outstanding term debt. The Company determined that the decision to exit this segment met the definition of a discontinued operation. As a result, this segment has been presented as a discontinued operation for all periods presented.

On July 11, 2018, Koontz-Wagner filed a voluntary petition for relief under Chapter 7 of Title 11 of the Bankruptcy Code with the U.S. Bankruptcy Court for the Southern District of Texas. The filing was for Koontz-Wagner only, not for the Company as a whole, and was completely separate and distinct from the Williams business and operations. As a result of the July 11, 2018 bankruptcy of Koontz-Wagner, the Company recorded a pension withdrawal liability of $2.9 million related to Koontz-Wagner’s International Brotherhood of Electrical Workers Local Union 1392 (“IBEW”) multi-employer pension plan.

After an arbitration process, on May 12, 2021, an arbitrator concluded that the IBEW used an incorrect per hour contribution rate in calculating the Company’s pension withdrawal liability, which resulted in the Company overpaying. The arbitrator directed IBEW to refund all overpayments, with interest, to the Company and to redetermine the Company’s payments going forward using the proper contribution rate. Accordingly, the Company’s overall pension withdrawal liability decreased by approximately $0.3 million. The pension liability is expected to be satisfied by annual cash payments of $0.3 million each, paid in quarterly installments, through 2038. The Company recorded a gain on disposal of approximately $0.2 million during the first six months of 2021 to reduce its previously recorded estimated withdrawal liability.

Mechanical Solutions

During the third quarter of 2017, the Company made the decision to exit and sell substantially all of the operating assets and liabilities of its Mechanical Solutions segment and determined that the decision to exit this segment met the definition of a discontinued operation. As a result, this segment has been presented as a discontinued operation for all periods presented.

As of June 30, 2022 and December 31, 2021, the Company did not have any assets related to its Electrical Solutions’ and Mechanical Solutions’ discontinued operations. The following table presents a reconciliation of the carrying amounts of major classes of liabilities of Electrical Solutions’ and Mechanical Solutions’ discontinued operations:

10

Table of Contents

(in thousands)

  

June 30, 2022

December 31, 2021

Liabilities:

Current liabilities of discontinued operations

$

104

$

316

Liability for pension obligation

2,287

2,368

Liability for uncertain tax positions

1,236

1,882

Long-term liabilities of discontinued operations

3,523

4,250

Total liabilities of discontinued operations

$

3,627

$

4,566

The following table presents a reconciliation of the major classes of line items constituting the net loss from discontinued operations. In accordance with GAAP, the amounts in the table below do not include an allocation of corporate overhead.

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands)

  

2022

  

2021

  

2022

  

2021

General and administrative expenses

$

$

6

$

$

34

Loss (gain) on disposal - Electrical Solutions

17

(228)

17

(228)

Interest expense (income)

30

(21)

30

30

Income (loss) from discontinued operations before income tax

(47)

243

(47)

164

Income tax expense (benefit)

(640)

18

(623)

37

Income (loss) from discontinued operations

$

593

$

225

$

576

$

127

NOTE 5—REVENUE

Disaggregation of Revenue

The Company’s contracts generally include a single performance obligation for which revenue is recognized over time, as performance obligations are satisfied, due to the continuous transfer of control to the customer. For cost-plus contracts, the Company recognizes revenue when services are performed and contractually billable based upon the hours incurred and agreed-upon hourly rates. Revenue on fixed-price contracts is recognized and invoiced over time using the cost-to-cost percentage-of-completion method. To the extent a contract is deemed to have multiple performance obligations, the Company allocates the transaction price of the contract to each performance obligation using its best estimate of the standalone selling price of each distinct good or service in the contract. The Company does not adjust the price of the contract for the effects of a significant financing component. Change orders are generally not distinct from the existing contract due to the significant integration service provided in the context of the contract and are accounted for as a modification of the existing contract and performance obligation. The Company believes these methods of revenue recognition most accurately reflect the economics of the transactions with its customers.

The Company’s contracts may include several types of variable consideration, including change orders, rate true-up provisions, retainage, claims, incentives, penalties, and liquidated damages. The Company estimates the amount of revenue to be recognized on variable consideration using estimation methods that best predict the amount of consideration to which the Company expects to be entitled. The Company includes variable consideration in the estimated transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur or when the uncertainty associated with the variable consideration is resolved. The Company’s estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based on an assessment of its anticipated performance and all information (historical, current, and forecasted) that is reasonably available. The Company updates its estimate of the transaction price each reporting period and the effect of variable consideration on the transaction price is recognized as an adjustment to revenue on a cumulative catch-up basis. In circumstances where the Company cannot reasonably determine the outcome of a contract, it recognizes revenue over time as the work is performed, but only to the extent of recoverable costs incurred (i.e. zero margin). A loss provision is recorded for the amount of any estimated unrecoverable costs in excess of total estimated revenue on a contract as soon as the Company becomes aware. The Company generally provides a limited warranty for a term of two years or less following completion of services performed under its contracts. Historically, warranty claims have not resulted in material costs incurred.

11

Table of Contents

Disaggregated revenue by type of contract was as follows:  

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands)

2022

2021

2022

2021

Cost-plus reimbursement contracts

$

39,771

$

82,071

$

94,026

$

137,664

Fixed-price contracts

16,288

9,500

31,592

14,758

Total

$

56,059

$

91,571

$

125,618

$

152,422

Disaggregated revenue by the geographic area where the work was performed was as follows:

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands)

2022

2021

2022

2021

United States

$

56,059

$

81,718

$

120,116

$

132,908

Canada

-

9,853

5,502

19,514

Total

$

56,059

$

91,571

$

125,618