Williams Industrial Services Group Reports 17.5% Revenue Growth and Diluted EPS of $0.02 in First Quarter 2019

• Execution of growth strategy drove first quarter revenue up 17.5%
  to $50.7 million
• Recorded first quarter of earnings in five years; Net income was
  $0.3 million, or
  $0.02 per diluted share
• Strong cost containment efforts reduced selling, general and
  administrative expenses (“SG&A”) by 28.7% to $5.0 million, or 9.9% of
  revenue
• Achieved operating margin of 3.2%; first positive quarter since the
  restated first quarter of 2014
• Net cash provided by operating activities was $2.4 million;
  continuing operations generated
  $2.6 million in cash

ATLANTA–(BUSINESS WIRE)–Williams Industrial Services Group Inc. (OTCQX:WLMS) (“Williams” or the
“Company”), a construction and maintenance services company, today
reported its financial results for its first quarter ended March 31,
2019. Unless otherwise noted, amounts and disclosures throughout this
release relate to continuing operations.

Tracy Pagliara, President and CEO of Williams, commented, “The Company
completed a milestone in the first quarter of 2019 by attaining
quarterly earnings for the first time in five years. This represents
another positive step in our efforts to turn Williams into a greater
organization with a more diversified revenue base, improved overall
execution and substantially more scale and profitability. While we still
have much work to do, these results validate our conviction to achieve
our strategic goals. We are building on our reputation to win new
customers and expand our business with existing customers in the end
markets we serve.”

First Quarter 2019 Highlights

• First quarter 2019 revenue increased $7.5 million, or 17.5%, to $50.7
  million with gross margin of 13.2%.
• Total operating expenses were $5.1 million; SG&A expenses were reduced
  28.7% compared with the prior-year and represented 9.9% of revenue.
• Operating income for the 2019 first quarter was $1.6 million, an
  improvement of $2.4 million over the operating loss in the prior-year
  period.
• Income from continuing operations was $0.4 million and net income was
  $0.3 million, or $0.02 per diluted share.
• Adjusted EBITDA from continuing operations was $2.4 million. See
  NOTE 1—Non-GAAP Financial Measures in the attached tables for
  important disclosures regarding Williams’ use of adjusted EBITDA, as
  well as a reconciliation of income (loss) from continuing operations
  to adjusted EBITDA.
• Backlog at the end of the first quarter 2019 expected to convert to
  revenue in the next twelve months was
  $181.8 million, or 38.0% of
  total backlog, compared with $173.3 million, or 34.6% of total
  backlog, at the end of 2018.

First Quarter 2019 Financial Results Review

First Quarter 2019 Revenue Bridge

*Table does not sum due to rounding

Revenue for the three months ended March 31, 2019 increased $7.5 million
compared with the corresponding period in 2018 as a result of increases
in a number of projects, including increases from new work in Canada,
diversification in midstream oil and gas, and $0.9 million related to
pre-outage activity in preparation for the significant outage work that
will occur in the second quarter. Partially offsetting these increases
was a decrease of $1.5 million in revenue from dry storage and
decommissioning activities due to delays encountered by the customer.

Gross profit for the first quarter of 2019 increased $0.2 million
compared with the prior-year period, while gross margin declined to
13.2% from 15.0%. The decrease in gross margin was due to project mix
and the downward pressure on near-term margins from our entry into the
nuclear industry in Canada, as well as the midstream oil and gas and
nuclear decommissioning markets.

Operating expenses for the first quarter of 2019 were $5.1 million, a
decrease of 29.9% when compared with the prior-year period. The
significant decline in expenses was a result of extensive restructuring
measures taken in 2018. The current level is expected to be
representative of the forward run rate.

Interest expense was $1.5 million for the quarter compared with $1.4
million in the prior-year period as the net result of higher loan
balances but lower interest rates.

Balance Sheet

As of March 31, 2019, Williams had $3.8 million in cash, including
restricted cash. During 2018, the Company refinanced its term-debt
facility with a four-year, $35 million term loan and also secured a
three-year, $15 million revolving credit facility.

Backlog

Total backlog as of March 31, 2019 was $478.7 million, compared with
$501.6 million at the end of 2018. Williams estimates that approximately
$181.8 million, or 38.0% of total backlog at the end of first quarter
2019, will be converted to revenue in the next twelve months. This
compares with $173.3 million of backlog at the end of 2018 that the
Company anticipated would be converted to revenue in 2019.

Outlook

The Company is reiterating its expectations in 2019 for revenue, gross
margins, SG&A as a percent of sales and adjusted EBITDA from continuing
operations. The Company anticipates that revenue in the first quarter of
2019 will be the lowest, while the second quarter will have the most
revenue because of the timing of a customer outage.

*See Note 1 – Non-GAAP Financial Measures for information regarding the
use of adjusted EBITDA and forward-looking non-GAAP financial measures.

Mr. Pagliara concluded, “As previously stated, our strategy is to
aggressively grow our core business, expand to new customers and
markets, strengthen and diversify specialty service offerings and drive
best-in-class execution – which we believe will result in a much larger
and more profitable business in the years to come. Our backlog, pipeline
of opportunities and first quarter performance provide us confidence in
our outlook for 2019 and beyond. To that end, we also continue to focus
on driving disciplined execution on a consistent basis and to reinforce
our culture of accountability and integrity.”

Webcast and Teleconference

The Company will host a conference call on Thursday, May 16, 2019, at
10:00 a.m. Eastern time. A webcast of the call and an accompanying slide
presentation will be available at www.wisgrp.com.
To access the conference call by telephone, listeners should dial
201-493-6780.

An audio replay of the call will be available from 1:00 p.m. Eastern
time on the day of the teleconference until the end of day on May 30,
2019. To listen to the audio replay, dial 412-317-6671 and enter
conference ID number 13689946. Alternatively, you may access the webcast
replay at http://ir.wisgrp.com/,
where a transcript will be posted once available.

About Williams

Williams Industrial Services Group has been safely helping plant owners
and operators enhance asset value for more than 50 years. The Company
provides a broad range of construction, maintenance and modification,
and support services to customers in energy, power and industrial end
markets. Williams’ 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.

Additional information about Williams can be found on its website: www.wisgrp.com.

Forward-looking Statement Disclaimer

This press release 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 ability to realize opportunities
and successfully achieve its growth and strategic initiatives, such as
midstream oil & gas opportunities, water-related projects and expansion
into Canada, as well as expectations for future growth, backlog
conversion, revenue, profitability and earnings, the continuing impact
of the Company’s cost reduction, reorganization and restructuring
efforts, expectations relating to the Company’s performance, expected
work in the energy and industrial markets, 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 its ability to comply with the terms of its
debt instruments and access letters of credit, ability to implement
strategic initiatives, business plans, and liquidity plans, and ability
to maintain effective internal control over financial reporting and
disclosure controls and procedures. Actual results, performance or
achievements may differ materially from those expressed or implied in
the forward-looking statements. Additional risks and uncertainties that
could cause or contribute to such material differences include, but are
not limited to, decreased demand for new gas turbine power plants,
reduced demand for, or increased regulation of, nuclear power, loss of
any of the Company’s major customers, whether pursuant to the loss of
pending or future bids for either new business or an extension of
existing business, termination of customer or vendor relationships, cost
increases and project cost overruns, unforeseen schedule delays, poor
performance by its subcontractors, cancellation of projects,
competition, including competitors being awarded business by current
customers, damage to the Company’s reputation, warranty or product
liability claims, increased exposure to environmental or other
liabilities, failure to comply with various laws and regulations,
failure to attract and retain highly-qualified personnel, loss of
customer relationships with critical personnel, volatility of the
Company’s stock price, deterioration or uncertainty of credit markets,
and changes in the economic and social and political conditions in the
United States, including the banking environment or monetary policy.

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 section of the Annual Report on Form 10-K for
its 2018 fiscal year titled “Risk Factors.” 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.

Financial Tables Follow.

WILLIAMS INDUSTRIAL SERVICES GROUP INC. AND SUBSIDIARIES
NON-GAAP
FINANCIAL MEASURE (UNAUDITED)

This press release contains financial measures not derived in accordance
with accounting principles generally accepted in the United States
(“GAAP”). A reconciliation to the most comparable GAAP measure is
provided below.

ADJUSTED EBITDA-CONTINUING OPERATIONS

NOTE 1—Non-GAAP Financial Measures

Adjusted EBITDA

Adjusted EBITDA is not calculated through the application of GAAP and is
not the required form of disclosure by the U.S. Securities and Exchange
Commission. Adjusted EBITDA is the sum of our net income (loss) before
interest expense, net, and income tax (benefit) expense and unusual
gains or charges. It also excludes non-cash charges such as depreciation
and amortization. The Company’s management believes adjusted EBITDA is
an important measure of operating performance because it allows
management, investors and others to evaluate and compare the performance
of its core operations from period to period by removing the impact of
the capital structure (interest), tangible and intangible asset base
(depreciation and amortization), taxes and unusual gains or charges
(stock-based compensation, restatement expenses, asset disposition
costs, and severance costs), which are not always commensurate with the
reporting period in which such items are included. Williams’ credit
facility also contains ratios based on EBITDA. Adjusted EBITDA should
not be considered an alternative to net income or as a better measure of
liquidity than net cash flows from operating activities, as determined
by GAAP, and, therefore, should not be used in isolation from, but in
conjunction with, the GAAP measures. The use of any non-GAAP measure may
produce results that vary from the GAAP measure and may not be
comparable to a similarly defined non-GAAP measure used by other
companies.

Note Regarding Forward-Looking Non-GAAP
Financial Measures

The Company does not provide a reconciliation of forward-looking
non-GAAP financial measures to their comparable GAAP financial measures
because it could not do so without unreasonable effort due to the
unavailability of the information needed to calculate reconciling items
and due to the variability, complexity and limited visibility of the
adjusting items that would be excluded from the non-GAAP financial
measures in future periods. When planning, forecasting and analyzing
future periods, the Company does so primarily on a non-GAAP basis
without preparing a GAAP analysis.

Contacts

Investor Relations:
Deborah K. Pawlowski
Kei Advisors
LLC
(716) 843-3908
[email protected]