Williams Industrial Services Group Inc. (AMEX:WLMS) Q3 2022 Earnings Call Transcript

Julio Romero: Understood. Maybe turning towards the balance sheet. Can you just talk about the accounts receivables balance? The press release mentioned delays in collecting cash receipts from customers and the day sales outstanding have kind of trended up over the last 2 quarters. Could you just talk about, is that a timing issue? Or are there some collections that you might not — that you think you might not eventually be able to collect on?

Damien Vassall: No. So it’s primarily timing. We did see our DSOs slip up during the quarter, and that was a result of 1 particular project where there was some delays in collecting on those receivables. As far as not being able to collect our receivables are — we still believe are very strong and collectible and as reflected in the allowance that we also show on the balance sheet. So we’ve got a reserve of approximately $300,000 on the $37 million receivable number. So we don’t see much risk in the collectability on our receivables.

Julio Romero: Okay. Just last 1 for me is just on the T&D start-up. Can you talk about maybe the revenue run rate you’re seeing, the volumes you’re seeing, you did $3 million of revenues in T&D in the third quarter or just under $3 million? Just what’s embedded for — what are you seeing on volumes? And what’s embedded in the revenues for T&D in the fourth quarter guide?

Damien Vassall: Yes. So as far as the fourth quarter goes, we expect the percentage of revenue to be approximately the same in the fourth quarter. However, we specifically on one of the T&D contracts, we did see that turn to profitability in the third quarter. So we expect that to continue in before.

Operator: . Our next question comes from the line of Theodore O’Neill with Litchfield Hills.

Theodore O’Neill: I was wondering if you could give us some more detail on what’s going on with Eversource and signing them up for another — for a couple of years with the master service agreement? And whether or not there’s additional opportunity on the natural gas pipeline side of the business?

Randy Lay: Yes, let me take that. The — what we signed on for an extension to our MSA with new rates and that’s what’s driving the financial performance, and that’s a 3-year extension with a 2-year option to extend to 5 years. The — we have been granted additional coverage in Connecticut in the natural gas distribution area of Eversource’s activities. And we are looking at the potential to extend that operation into the contiguous states of Rhode Island and Massachusetts. So that, together with — what that brings with it is an increase in activity but also an increase in volume and an increase in return. So that particular aspect of T&D is moving along now, it moving along quite well in the direction that we expected it to go once we signed off on the new MSA.

And so there’s upside. There’s certainly some volume upside to them. There certainly is some and we’ll talk more about that as we move into 2023. And there’s some additional upside that will come from expansion of our territory.

Theodore O’Neill: Okay. And I was wondering if you’re seeing any inflationary impacts in the business?