Williams Industrial Services : Q1 2023 Financial Results Presentation

Q1 2023 Financial Results: May 18, 2023

Tracy Pagliara	Randy Lay
President & CEO	EVP & Chief Operating Officer

Damien Vassall

VP & Chief Financial Officer

NYSE American: WLMS

Cautionary Notes

Forward-looking Statement Disclaimer

This presentation contains "forward-looking statements" within the meaning of the term set forth in the Private Securities Litigation Reform Act of 1995. The forward-looking statements include statements or expectations regarding the Company's liquidity situation and the outcome of the Company's review of strategic alternatives, including engaging in a potential sale, restructuring or refinancing its debt, seeking additional debt or equity capital, reducing or delaying its business activities and strategic initiatives, or selling assets, other strategic transactions and/or other measures, including obtaining relief under the U.S. Bankruptcy Code, the Company's ability to successfully implement its liquidity improvement plan and, if necessary, to obtain additional funding on reasonable terms, or at all, the Company's ability to performance in the nuclear and fossil sectors, to streamline overhead, and to exit certain operations that have negatively impacted results in a timely manner, the Company's ability to obtain support from customers in dealing with its liquidity challenges, future demand for the Company's services, the Company's funding levels and ability to continue operations as a going concern, and expectations regarding future revenues, cash flow, and other related matters. These statements reflect the Company's current views of future events and financial performance and are subject to a number of risks and uncertainties, including the Company's ability to continue to implement its liquidity improvement plan and to continue as a going concern; the Company's level of indebtedness and ability to make payments on, and satisfy the financial and other covenants contained in, its amended debt facilities, as well as its ability to engage in certain transactions and activities due to limitations and covenants contained in such facilities; its ability to generate sufficient cash resources to continue funding operations, including investments in working capital required to support growth-related commitments that it makes to customers, and the possibility that it may be unable to obtain any additional funding as needed or incur losses from operations in the future; the results of the Company's ongoing strategic alternatives review process; the Company's ability to obtain adequate surety bonding and letters of credit; the Company's ability to maintain effective internal control over financial reporting and disclosure controls and procedures; the Company's ability to attract and retain qualified personnel, skilled workers, and key officers; failure to successfully implement or realize its business strategies, plans and objectives of management, and liquidity, operating and growth initiatives and opportunities, including any expansion into new markets and its ability to identify potential candidates for, and consummate, acquisition, disposition, or investment transactions (including any that may result from the Company's review of strategic alternatives); the loss of one or more of its significant customers; its competitive position; market outlook and trends in the Company's industry, including the possibility of reduced investment in, or increased regulation of, nuclear power plants, declines in public infrastructure construction, and reductions in government funding; costs exceeding estimates the Company uses to set fixed-price contracts; harm to the Company's reputation or profitability due to, among other things, internal operational issues, poor subcontractor performance or subcontractor insolvency; potential insolvency or financial distress of third parties, including customers and suppliers; the Company's contract backlog and related amounts to be recognized as revenue; its ability to maintain its safety record, the risks of potential liability and adequacy of insurance; adverse changes in the Company's relationships with suppliers, vendors, and subcontractors, including increases in cost, disruption of supply or shortage of labor, freight, equipment or supplies, including as a result of the COVID-19 pandemic, geopolitical conditions and other economic factors; compliance with environmental, health, safety and other related laws and regulations, including those related to climate change; limitations or modifications to indemnification regulations of the U.S.; the Company's expected financial condition, future cash flows, results of operations and future capital and other expenditures; the impact of unstable market and economic conditions on our business, financial condition and stock price, including inflationary cost pressures, supply chain disruptions and constraints, labor shortages, instability in the global banking system, the effects of the Ukraine-Russia conflict, and a possible recession; our ability to meet expectations about our business, key metrics and future operating results; information technology vulnerabilities and cyberattacks on the Company's networks; the Company's failure to comply with applicable laws and regulations, including, but not limited to, those relating to privacy and anti-bribery; the Company's ability to successfully implement its new enterprise resource planning (ERP) system; the Company's participation in multiemployer pension plans; the impact of any disruptions resulting from the expiration of collective bargaining agreements; the impact of natural disasters, which may be exacerbated as a result of climate change, and other severe catastrophic events; the impact of corporate citizenship and environmental, social and governance matters; the impact of changes in tax regulations and laws, including future income tax payments and utilization of net operating loss and foreign tax credit carryforwards; volatility of the market price for the Company's common stock; the Company's ability to maintain its stock exchange listing; the effects of anti-takeover provisions in the Company's organizational documents and Delaware law; the impact of future offerings or sales of the Company's common stock or related contractual obligations on the market price of such stock; the potential impact of activist stockholder actions; expected outcomes of legal or regulatory proceedings and their anticipated effects on the Company's results of operations; and any other statements regarding future growth, future cash needs, future operations, business plans and future financial results.

Other important factors that may cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the Company's filings with the U.S. Securities and Exchange Commission, including the "Risk Factors" section of the Annual Report on Form 10-K for its 2022 fiscal year. Any forward-looking statement speaks only as of the date of this press release. Except as may be required by applicable law, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, and you are cautioned not to rely upon them unduly.

Non-GAAP Financial Measures

This presentation will discuss some non-GAAP financial measures, which the Company believes are useful in evaluating its performance. You should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP. The Company has provided reconciliations of comparable GAAP to non-GAAP measures in tables found on the slides following the "Supplemental Information" slide of this presentation.

Note: Unless otherwise noted, all discussion is based upon continuing operations.	2

Q1-2023 Highlights

1. • 2023 Q1 revenue of $103.5 million versus $69.6 million in the prior-year period, reflecting higher nuclear business due to services performed during customer outage
   • Gross margin of 7.4% versus 8.2% in the 2022 first quarter
   • • Excluding underperforming projects and T&D expense, 2023 adjusted gross margin of 12.2%
   • Operating expenses of $6.1 million for Q1 versus $6.5 million in the prior-year period
   • Adjusted EBITDA (1) of $3.3 million versus $0.1 million last year
   • Backlog $235 million versus $333 million as of December 31, 2022
   • Company continues assessing strategic alternatives
2. Adjusted EBITDA is a non-GAAP financial measure. Please see supplemental slides for a reconciliation of GAAP to non-GAAP financial results.

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FY2023 Outlook

• Revenue expected to fall in second half due to lower backlog and slow bid environment
• Additional costs and/or funding anticipated related to underperforming operations
• Liquidity challenges continue

$235 M Backlog

March 31, 2023

Industrial / Water / Other

7%

Fossil 48%

US Nuclear

33%

Energy Delivery

4%Decommissioning

8%

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Revenue Review

$ Millions

$103.5

$69.6

$56.1 $56.7 $55.8

1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023

First Quarter Revenue Bridge

(in millions)		$ Change
First quarter 2022 revenue	$	69.6
U.S. Nuclear		40.8
Fossil		4.7
Transmission & Distribution		1.6
Decommissioning		(4.6)
Canada Nuclear		(5.5)
Other		(3.1)
Total change		33.9
First quarter 2023 revenue*	$	103.5

*Numbers may not sum due to rounding

End Market Revenue

1Q-2023

Fossil	Industrial / Water / Other
12%	9%

Energy Delivery

Decommissioning 6%

1%

US Nuclear

72%

Vogtle 3 & 4

2023 1Q revenue:

$18.0 million

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