U.S. Markets closed

Edited Transcript of WLMS earnings conference call or presentation 15-Aug-19 1:00pm GMT

Q2 2019 Williams Industrial Services Group Inc Earnings Call

Tulsa Sep 7, 2019 (Thomson StreetEvents) -- Edited Transcript of Williams Industrial Services Group Inc earnings conference call or presentation Thursday, August 15, 2019 at 1:00:00pm GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* Michael Kelly Powers

Williams Industrial Services Group Inc. - President of Power

* Tracy D. Pagliara

Williams Industrial Services Group Inc. - President, CEO, Interim CFO & Director

================================================================================

Conference Call Participants

================================================================================

* Evan Wax

Wax Asset Management, LLC - Founder

* John Butler Walthausen

Walthausen & Co., LLC - CIO & Portfolio Manager

* John Eric Deysher

Bertolet Capital Trust - Pinnacle Value Fund - Portfolio Manager

* John S. Sturges

Oppenheimer & Co. Inc. - Director of Investments

* Deborah K. Pawlowski

Kei Advisors LLC - Chairman, CEO and Founder

================================================================================

Presentation

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Greetings and welcome to the Williams Industrial Services Group Inc. Second Quarter 2019 Financial Results Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Deborah Pawlowski, Investor Relations. Thank you. You may begin.

--------------------------------------------------------------------------------

Deborah K. Pawlowski, Kei Advisors LLC - Chairman, CEO and Founder [2]

--------------------------------------------------------------------------------

Thank you, Donna, and good morning, everyone. Welcome to the review of our second quarter 2019 financial results. We certainly appreciate your time today as well as your interest in Williams Industrial Services Group.

Joining me on the call today are Tracy Pagliara, our President, CEO and interim Chief Financial Officer. Also with us are Kelly Powers, President, Power; Matt Petrizzo, President, Energy and Industrial; and [Don Jenkins], our Treasurer. Tracy will provide his prepared remarks and then we will open the call for questions.

You should have a copy of our second quarter 2019 financial results release that went out after the market closed yesterday as well as the slides that will accompany today's conversation. If you don't have them, they are available on our website at wisgrp.com in the Investor Relations section.

If you turn to Slide 2 in the deck, I will review the safe harbor regarding forward-looking statements. As you are aware, we may make some forward-looking statements during the formal discussions as well as during the Q&A session. These statements apply to future events, which are subject to risks and uncertainties as well as other factors that could cause actual results to differ materially from what is stated here today. These risks and uncertainties and other factors are provided in the earnings release and slides as well as with other documents filed with the SEC. You can find all these documents on our website or at sec.gov.

During today's call, we will also discuss some non-GAAP financial measures. We believe these will be useful in evaluating our performance. You should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP. When applicable, we have provided reconciliation of non-GAAP measures with comparable GAAP measures in the tables that accompany today's release and slides for your information. Please note as well that our conversation today will be about continuing operations unless we note otherwise.

If you will turn to Slide #3, I will turn the call over to Tracy to begin. Tracy?

--------------------------------------------------------------------------------

Tracy D. Pagliara, Williams Industrial Services Group Inc. - President, CEO, Interim CFO & Director [3]

--------------------------------------------------------------------------------

Thanks, Deb, and good morning, everyone.

We delivered another solid quarter of successful execution for our customers, including our long-term maintenance agreement customer. This customer's outage work occurs every other year at the Columbia Generating Station in Washington State.

We also continued to focus on the key initiatives defined in our strategic plan to grow our core business, expand with new customers and markets, diversify our service offerings and to drive best-in-class execution through improved processes and strengthened accountability. As we strive to fulfill our strategic goals, we are also building our leadership team. We announced yesterday that Kelly Powers and Matt Petrizzo have been promoted as corporate officers in the presence of our Power and in Energy and Industrial operations. Both Kelly and Matt are instrumental in driving our opportunities for growth.

Revenue for the quarter grew 49% to approximately $71.5 million largely due to the planned outage work. In addition, we had solid performance in our core markets and continued progress in Canada as well. Gross profit increased 36% to $9.2 million as we gain scale. Gross margin for the quarter was 12.9%, in line with our expected range of 11% to 13%. As we grow in new markets, the entry price does affect gross margin. In addition, outage work in general is lower-margin business.

The restructuring efforts of 2018 helped facilitate our substantially reduced SG&A costs. We're continuing to be vigilant in our cost discipline by making strong controls. Our SG&A target for 2019 continues to be 8% to 9% of revenue. We are confident the organization is now structured to have inherent operating leverage that will manifest in future years as the business is scaled. Our efforts are paying off as we achieved net income for the second consecutive quarter. This is all in the second quarter in 5 years that we have achieved positive earnings.

Adjusted EBITDA was $4 million for the quarter and $6.5 million for the first half of 2019. The decline in total backlog to $409 million reflects the aggressive site work plan in Vogtle Units 3 & 4 as Southern and Bechtel are focused on beating the approved in-service dates of November 21 -- November 2021 and 2022. The completion of the outage at the Columbia station also consumed backlog. Order levels, as expected, have been light in the first half of the year as we reengage with customers and prospects following our restructuring. We are highly encouraged with the strength of our pipeline and expect that order phase will accelerate in the second half of the year as we are gaining increasing momentum with our strategic growth initiatives. There are a number of opportunities that could lead to measurable awards by year-end.

Slide 4 provides details on our revenue mix. The majority of it is lower-risk, cost-plus revenue related to our core power business, which is still a primary strategic focus. Projects in the midstream oil and gas and other industrial markets will tend to be fixed-price contracts. We are being very diligent in our risk assessment in these areas to ensure that the projects we undertake advance shareholder value.

For the trailing 12-month period, the majority of our business is related to our power end market, including the outage work completed in the quarter. Of course, the nuclear newbuild project of Vogtle is a large contributor to revenue. This includes revenue direct with Southern and through our joint venture with Bechtel. We are proud to be a part of this massive undertaking to contribute to the productivity that is being realized on site.

If you turn to Slide 5, I'll delve in more into the financial details. As noted, we had a strong revenue growth in the quarter. The $25 million increase was driven by the outage work, which added $15.9 million. Also contributing to our growth was the addition of projects in Canada with $4.6 million in revenue and there were $6.1 million of greater scope with existing customers on projects.

Revenue for Vogtle Units 3 & 4, which continues to be substantial for us, was approximately $25 million for the quarter. Partially offsetting these increases was a $3.2 million decline in revenue from decommissioning activities. As we have discussed, this was related to the delay in a project we are working on. That project now started back up again this quarter. We have strength in our relationship with our key customer in this space and expect decommissioning to be a significantly larger component of revenue in the future.

Moving to Slide 6. Gross profit has steadily increased the last 3 quarters and reached $9.2 million in the second quarter. Gross margin was 12.9%. Gross margin contracted from the prior year period due to project mix.

If you now turn to Slide 7, second quarter operating expenses were $6.7 million, down $3.7 million. If you exclude the $2.2 million in restructuring expenses in the second quarter of 2019, operating expenses were down $1.5 million. The decline in OpEx reflects lower SG&A resulting from our 2018 restructuring. You'll note that since we are a service business and do not require capital investment, depreciation and amortization is a very small component of operating expenses.

Operating income, shown on Slide 8, was $2.5 million in the quarter, an improvement of $6.2 million over the prior year period. The improvement was the result of higher revenue and the leverage gains over our lower-cost structure. Increasing gross profit contribution over smaller-cost footprint will drive operating margin expansion. We think this is a great business model to scale.

On Slide 9, we reported income from continuing operations of $1.3 million, our second consecutive quarter of positive income from continuing operations in 5 years. The simplification and substantial restructuring of our business and reorganization of our corporate office in Tucker, Georgia in 2018, combined with growing revenue, drove our strong performance. In fact, we are on track to deliver significant improvement in operating net income in 2019, positioning us for even greater growth by implementing our strategic plan.

Adjusted EBITDA was $4 million for the second quarter. While we need to remain diligent in our efforts, it's clear that our financial performance is trending in the right direction.

If you'll turn to Slide 10, our nuclear outage in the second quarter requires significant working capital, but payment was quickly recovered. As a result, cash flow is expected to strengthen through the year. Because of the structure of our ABL and our need for working capital to grow, we won't necessarily see cash build on our balance sheet.

At the end of June, cash and cash equivalents were $3.4 million, down slightly from the $4.5 million we reported at the end of December. The restricted cash was unchanged at $500,000 at the end of the quarter. At the end of the second quarter, we had termed out of $33.5 million net of unamortized deferred financing cost of $1.2 million. The process for refinancing our term loan after the no-call provision is lifted in September is ongoing with the primary objective being greater flexibility to fund our growth opportunities. Our refinancing initiative is progressing, and we plan at this point to complete it as soon practical after the third quarter. We believe our strong performance thus far in 2019 should position us for more capacity and better turns.

Turning to Slide 11, strong revenue recognition from outage work and advancement toward in-service dates for Vogtle Units 3 & 4 more than offset a light level of new awards in the quarter. We provided a roll forward in the press release that provides the details of the change.

Total backlog represents the dollar amount of revenue expected to be recorded in the future for work performed under awarded contracts, which was approximately $409 million at the end of June. We expect about $138 million or 34% of total backlog to convert to revenue in the next 12 months.

Given we had more work completed than new awards, backlog came down. We had anticipated the first half year for awards to be smaller. Given our pipeline and the momentum we are building with our customers, we expect that award levels will increase in the second half of 2019. In fact, just since the end of the quarter, we have won over $815 million in new awards.

On Slide 12, you can see that we have adjusted our 2019 revenue expectation by raising it from the previous range of $220 million to $240 million to a new range of $230 million to $240 million. Given our expected level of revenue, gross profit and operating expenses, we are still anticipating adjusted EBITDA should be about $10 million to $12 million for the year. We are confident that Williams is implementing a robust strategic plan for a scalable organization that can win new business both in our core markets as well as with our new markets and customers. Risk management and quality execution will convert this growth into cash and earnings.

Slide 13 provides an update on these growth initiatives from our strategic plan. We have a strong reputation in the nuclear industry and are leveraging our expertise to win new business. We do not believe there are any other competitors that have the qualifications that we do to service nuclear power plants from initial construction through their operating life. In addition, our capabilities in electrical systems is providing us new contracts as utilities look to convert their fossil and nuclear facilities, controls and equipment from less efficient analog systems into digital.

Decommissioning has gained quite a bit of momentum with the NRC's approval to transfer the Oyster Creek license to Holtec in the related joint venture between Holtec and SNC-Lavalin to form Comprehensive Decommissioning International, or CDI. We believe we are well positioned to service long-staying partners with Holtec and CDI in the decommissioning space for years to come.

In energy and industrial, we recently won our first large midstream oil and gas project to provide simple and structural construction services on a crude oil export terminal. Valued at $8.6 million, this contract win is a testament to the successful execution of our strategy to diversify our markets. We entered this market just a year ago. And after demonstrating our strong project management execution and expertise, we have expanded our relationship and the scope of work we're doing for our customer. We are also making substantial progress in growing our wastewater infrastructure business in Florida. Canada is our next frontier. We had over $4 million in revenue in the quarter and $6 million year-to-date as we establish our presence in this market. We expect that if we execute well, this can become a meaningful part of our future over the next several years.

With that, operator, we can open the line for questions.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions) Our first question is coming from John Walthausen of Walthausen & Co.

--------------------------------------------------------------------------------

John Butler Walthausen, Walthausen & Co., LLC - CIO & Portfolio Manager [2]

--------------------------------------------------------------------------------

Congratulations on a good quarter.

--------------------------------------------------------------------------------

Tracy D. Pagliara, Williams Industrial Services Group Inc. - President, CEO, Interim CFO & Director [3]

--------------------------------------------------------------------------------

Thanks, John.

--------------------------------------------------------------------------------

John Butler Walthausen, Walthausen & Co., LLC - CIO & Portfolio Manager [4]

--------------------------------------------------------------------------------

I wanted to -- obviously, the last slide about the focus on growth is a really important one. You referenced a number of times was $6 million of revenue so far in the -- one of the bullet points, you talked about a $20 billion opportunity. Can you refine it a little bit more about where the opportunities are there? And you also mentioned that you're looking for Canadian financing for these projects, what that might involve.

--------------------------------------------------------------------------------

Tracy D. Pagliara, Williams Industrial Services Group Inc. - President, CEO, Interim CFO & Director [5]

--------------------------------------------------------------------------------

Sure. I've got with me Kelly Powers, who spends a lot of time on Canada. So I'm going to let him elaborate a bit.

--------------------------------------------------------------------------------

Michael Kelly Powers, Williams Industrial Services Group Inc. - President of Power [6]

--------------------------------------------------------------------------------

Yes. The $20 billion reference, it pertains to a $20 billion capital program that has been approved across Bruce Power and Ontario Power Generation sites to refurbish their aging plants. So that's a $20 billion spend over, say, 13- to 15-year period across 2 customers from a major component refurbishment standpoint, and that's what's driving the market need for vendors with our capacity and capabilities to enter that market to support that.

--------------------------------------------------------------------------------

John Butler Walthausen, Walthausen & Co., LLC - CIO & Portfolio Manager [7]

--------------------------------------------------------------------------------

And what type of work is that primarily? Is that a lot of nuclear? Or you also referenced the conversion from analog to digital.

--------------------------------------------------------------------------------

Michael Kelly Powers, Williams Industrial Services Group Inc. - President of Power [8]

--------------------------------------------------------------------------------

Yes. So it's both. Like we are -- it's both. We are bidding -- actively bidding right now conversion of analog-to-digital for 6 operating nuclear plants with Bruce Power, as an example. So it's work comparable to our -- what we have done down here domestically very successfully for a long time that is now the market up there is opening up for comparable work.

--------------------------------------------------------------------------------

Tracy D. Pagliara, Williams Industrial Services Group Inc. - President, CEO, Interim CFO & Director [9]

--------------------------------------------------------------------------------

John, I would just add, the political environment in Canada is more welcoming for nuclear. And that's as evidenced by the $20 billion commitment that the Ontario is making to refurbish its nuclear power capabilities over the next 10 years. So that's why we think it's a good place for us to be.

--------------------------------------------------------------------------------

Operator [10]

--------------------------------------------------------------------------------

(Operator Instructions) Our next question is coming from John Deysher of Pinnacle Capital.

--------------------------------------------------------------------------------

John Eric Deysher, Bertolet Capital Trust - Pinnacle Value Fund - Portfolio Manager [11]

--------------------------------------------------------------------------------

I was just curious on the refinancing, whether you're going to be looking for a bigger facility given that, as you mentioned, you've got growing working capital needs. I was just wondering if you could flesh that out a little bit more and whether, in conjunction with that, there might be any kind of equity raise to help shore up the balance sheet.

--------------------------------------------------------------------------------

Tracy D. Pagliara, Williams Industrial Services Group Inc. - President, CEO, Interim CFO & Director [12]

--------------------------------------------------------------------------------

Okay. So first question, definitely, we'll be looking for a bigger facility with better covenants. In terms of potential equity raise, I think that would be something under consideration with -- if it related to existing shareholder. So a rights offering, if you will. I don't see us going out onto the market and raising capital or raising equity at this point. So I would say that would also be under consideration. But we haven't, at this point, advanced as far with potential for a rights offering as we have with the debt financing, which we know we want to move forward with as soon as we can possibly get past September 20 and get out from underneath some of the terms we have right now and under our existing debt agreements.

--------------------------------------------------------------------------------

John Eric Deysher, Bertolet Capital Trust - Pinnacle Value Fund - Portfolio Manager [13]

--------------------------------------------------------------------------------

Okay. That makes sense. What will determine whether a rights offering is part of a scenario or not?

--------------------------------------------------------------------------------

Tracy D. Pagliara, Williams Industrial Services Group Inc. - President, CEO, Interim CFO & Director [14]

--------------------------------------------------------------------------------

Well, I think we have to hit -- our existing shareholders have got to express an interest. And we probably need to have the comfort level that we'd have some formal backstop to go forward with that. So there's definitely interest in doing it. It's just whether the existing interest or the existing shareholders would have an interest in doing it and then how much of a backstop would we have because the last thing we want to do is go forward with a rights offering and then not have it materialized. That would be detrimental in the end to our debt offering efforts.

--------------------------------------------------------------------------------

John Eric Deysher, Bertolet Capital Trust - Pinnacle Value Fund - Portfolio Manager [15]

--------------------------------------------------------------------------------

No. I totally agree. I would suggest that you start canvassing shareholders sooner rather than later.

--------------------------------------------------------------------------------

Tracy D. Pagliara, Williams Industrial Services Group Inc. - President, CEO, Interim CFO & Director [16]

--------------------------------------------------------------------------------

I agree. We're actually -- have started that to a certain extent.

--------------------------------------------------------------------------------

John Eric Deysher, Bertolet Capital Trust - Pinnacle Value Fund - Portfolio Manager [17]

--------------------------------------------------------------------------------

Okay. The other key question is, what can we do about the liquidity in the stock? The OTCQX is kind of a dismal marketplace. It's very disturbing when 500 shares trade and the stock is down 8%. And I'm just wondering where specifically we are in terms of getting back on to a more liquid exchange, getting away from that OTCQX so that we have at least some hope that 500 or 1,000 shares does not move the price significantly.

--------------------------------------------------------------------------------

Tracy D. Pagliara, Williams Industrial Services Group Inc. - President, CEO, Interim CFO & Director [18]

--------------------------------------------------------------------------------

Yes. Our plan would be to do that when we get through this 2019. We have a full year of earnings. We file our 10-Q for '19. I think we'll be in a position as long as we meet the market cap requirement, which I believe we will, at that point. That's the only one we don't meet currently, the parliament we don't meet. So I think we'll be ready to do that by the end of the first quarter or in conjunction with filing of the 10-K for 2019.

--------------------------------------------------------------------------------

John Eric Deysher, Bertolet Capital Trust - Pinnacle Value Fund - Portfolio Manager [19]

--------------------------------------------------------------------------------

Okay. What's the minimum market cap again for getting on to a more liquid exchange?

--------------------------------------------------------------------------------

Tracy D. Pagliara, Williams Industrial Services Group Inc. - President, CEO, Interim CFO & Director [20]

--------------------------------------------------------------------------------

I think it's like $50 million, and we're just slightly below that.

--------------------------------------------------------------------------------

Operator [21]

--------------------------------------------------------------------------------

(Operator Instructions) Our next question is coming from John Sturges of Oppenheimer.

--------------------------------------------------------------------------------

John S. Sturges, Oppenheimer & Co. Inc. - Director of Investments [22]

--------------------------------------------------------------------------------

Nicely executed turnaround and obviously, hoping to see more. I'm just curious, is your strategic levels, fixed-price contracts that make sense to you? Or do you expect to see that go -- become a lower component of revenue?

--------------------------------------------------------------------------------

Tracy D. Pagliara, Williams Industrial Services Group Inc. - President, CEO, Interim CFO & Director [23]

--------------------------------------------------------------------------------

Well, right now, our revenue is about 85% time and material. And so fixed price is not a big component. We're certainly opportunistic about fixed price. We realize, as we grow in certain of our segments, including oil and gas, the new oil and gas order we just took on, $8.6 million oil and gas order, is fixed price; the water, wastewater projects are fixed price. So in -- often times, project work we do for our nuclear customers can be fixed price. So we're not afraid. The fixed price, we do well with it. And I think as we grow, a greater percentage of our revenue base will be fixed price. But we're also quite keen to make sure that we are applying proper risk management vetting our terms and conditions and, frankly, availability of qualified labor to fulfill those types of contracts.

--------------------------------------------------------------------------------

John S. Sturges, Oppenheimer & Co. Inc. - Director of Investments [24]

--------------------------------------------------------------------------------

Is there any labor availability issues at this point? And know last time you said no.

--------------------------------------------------------------------------------

Tracy D. Pagliara, Williams Industrial Services Group Inc. - President, CEO, Interim CFO & Director [25]

--------------------------------------------------------------------------------

Not in any material respect. We have -- we do have from time to time challenges at Vogtle 3 & 4, but we work collaboratively with SNC and Southern Nuclear and Bechtel. There clearly are labor shortages in the oil patch right now, but we don't take on -- again, we have a very rigorous risk management assessment process, and we don't take on big jobs unless we know we have the labor in place when we take a project on.

So it -- labor, in general, is a challenge. Qualified labor, qualified welders, qualified tradesmen are getting those people. Electricians is a problem across the U.S., but it hasn't been a material issue for Williams because of how we manage our business.

--------------------------------------------------------------------------------

John S. Sturges, Oppenheimer & Co. Inc. - Director of Investments [26]

--------------------------------------------------------------------------------

Terrific. The other question is a bit broader. I've seen U.S. dollars strength have some issues on the industrial sector. It tends to slow it down. Doesn't sound like you're having -- you're seeing that kind of an impact on the business at…

--------------------------------------------------------------------------------

Tracy D. Pagliara, Williams Industrial Services Group Inc. - President, CEO, Interim CFO & Director [27]

--------------------------------------------------------------------------------

No. No, not yet. I don't see us -- we're -- we don't do a lot outside the U.S., and so it hasn't been an impact for us at this point.

--------------------------------------------------------------------------------

John S. Sturges, Oppenheimer & Co. Inc. - Director of Investments [28]

--------------------------------------------------------------------------------

Yes. What I'm thinking of is that a lot of your companies do export to some degree and they tend to slow down...

--------------------------------------------------------------------------------

Tracy D. Pagliara, Williams Industrial Services Group Inc. - President, CEO, Interim CFO & Director [29]

--------------------------------------------------------------------------------

That's correct.

--------------------------------------------------------------------------------

John S. Sturges, Oppenheimer & Co. Inc. - Director of Investments [30]

--------------------------------------------------------------------------------

Slow down the expansion. Yes.

--------------------------------------------------------------------------------

Tracy D. Pagliara, Williams Industrial Services Group Inc. - President, CEO, Interim CFO & Director [31]

--------------------------------------------------------------------------------

Yes. Actually, a lot of our companies are big public utilities. And our local U.S. companies would do their business in the U.S. Some of our oil and gas folks would probably doing a little bit more exporting, but not -- we don't have as many multinational customers as you might -- as some of larger conglomerate might have. We tend to have U.S.-based customers.

--------------------------------------------------------------------------------

John S. Sturges, Oppenheimer & Co. Inc. - Director of Investments [32]

--------------------------------------------------------------------------------

Okay. Now you're still in the very early stages of where you expect to be. And I'm just -- what I'd like to have is, if you could, and I don't know whether your feel comfortable doing this at this point, a 5-year outlook should business conditions permit. Companies in your space that I see can do roughly upper-teens gross margins, even a size low-teens operating margins. I'm just curious where you see yourselves headed currently.

--------------------------------------------------------------------------------

Tracy D. Pagliara, Williams Industrial Services Group Inc. - President, CEO, Interim CFO & Director [33]

--------------------------------------------------------------------------------

At 5 years -- you're right, 5 years is a very long time. We're comfortable that our margin of -- range of margin of 11% to 13% is a good -- first of all, it's good relative to what our peers are able to do. And I think while we see some incremental improvements over that, at this point in time, I wouldn't be projecting high-teens in 5 years. What I would be doing is focusing more on how I leverage my SG&A costs as I scale the business. We'll be happy to keep mid-teen margins as we scale the business up.

--------------------------------------------------------------------------------

John S. Sturges, Oppenheimer & Co. Inc. - Director of Investments [34]

--------------------------------------------------------------------------------

And are we talking operating margins or gross margins on that particular number?

--------------------------------------------------------------------------------

Tracy D. Pagliara, Williams Industrial Services Group Inc. - President, CEO, Interim CFO & Director [35]

--------------------------------------------------------------------------------

Gross margins. Yes. Operating margins are going to be more in the 5% to 10% range.

--------------------------------------------------------------------------------

Operator [36]

--------------------------------------------------------------------------------

Our next question is coming from Evan Wax of Wax Asset Management.

--------------------------------------------------------------------------------

Evan Wax, Wax Asset Management, LLC - Founder [37]

--------------------------------------------------------------------------------

Just a quick question on the LTA market. I know that was one of our goals that we're going to impact heavily this year. And I was looking for an update on the timing of LTA awards and kind of what we're seeing in the competitive space for the LTA market.

--------------------------------------------------------------------------------

Tracy D. Pagliara, Williams Industrial Services Group Inc. - President, CEO, Interim CFO & Director [38]

--------------------------------------------------------------------------------

We are -- we have been actively pursuing every LTA award that makes sense for us to pursue. We have a couple that are pending. That's in nuclear. We're also in our -- on our fossil side, we are trying to develop an LTA relationship with some work we've started with a new customer. It -- we -- I think I mentioned before some of the larger LTAs that we thought might -- we might be more competitive on don't come out until after '19. But nonetheless, we are making a big push into that area and doing everything we can to position ourselves to win some, to get all or a portion of an LTA agreement as soon as we can. It's -- I don't have anything further to offer you at this point other than that's what we're trying to do.

--------------------------------------------------------------------------------

Operator [39]

--------------------------------------------------------------------------------

Thank you. At this time, I'd like to turn the floor back over to management for any additional or closing comments.

--------------------------------------------------------------------------------

Tracy D. Pagliara, Williams Industrial Services Group Inc. - President, CEO, Interim CFO & Director [40]

--------------------------------------------------------------------------------

Thank you, everyone, for participating today. We appreciate your time and interest in Williams. We're committed to delivering on our promises to our shareholders as well as our customers. This year should be a strong demonstration of the significant change -- changes that have been made Williams into a stronger business. Thank you and enjoy the rest of your day.