10-Q

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 September 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

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 November 7, 2022, there were 26,422,761 shares of common stock of Williams Industrial Services Group Inc. outstanding.

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 September 30, 2022 and December 31, 2021 (unaudited)	2
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2022 and 2021 (unaudited)	3
Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2022 and 2021 (unaudited)	4
Condensed Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2022 and 2021 (unaudited)	5
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 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	25
Item 3. Quantitative and Qualitative Disclosures about Market Risk	34
Item 4. Controls and Procedures	35
Part II—OTHER INFORMATION
Item 1. Legal Proceedings	36
Item 1A. Risk Factors	36
Item 6. Exhibits	37
SIGNATURES	38

1

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)	September 30, 2022		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	1,013	$	2,482
Restricted cash		468		468
Accounts receivable, net of allowance of $318 and $427, respectively		37,339		35,204
Contract assets		10,076		12,683
Other current assets		10,675		11,049
Total current assets		59,571		61,886
Property, plant, and equipment, net		1,016		653
Goodwill		35,400		35,400
Intangible assets		12,500		12,500
Other long-term assets		7,732		5,712
Total assets	$	116,219	$	116,151
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	11,732	$	12,168
Accrued compensation and benefits		14,312		12,388
Contract liabilities		3,440		3,412
Short-term borrowings		14,525		676
Current portion of long-term debt		1,050		1,050
Other current liabilities		4,630		11,017
Current liabilities of discontinued operations		106		316
Total current liabilities		49,795		41,027
Long-term debt, net (Note 9)		21,809		30,328
Deferred tax liabilities		2,263		2,442
Other long-term liabilities		4,440		1,647
Long-term liabilities of discontinued operations		3,513		4,250
Total liabilities		81,820		79,694
Commitments and contingencies (Note 11)
Stockholders’ equity:
Common stock, $0.01 par value, 170,000,000 shares authorized and 26,865,064 and 26,408,789 shares issued, respectively, and 26,422,761 and 25,939,621 shares outstanding, respectively		264		261
Paid-in capital		93,705		92,227
Accumulated other comprehensive loss		(440)		(95)
Accumulated deficit		(59,124)		(55,930)
Treasury stock, at par (442,303 and 469,168 common shares, respectively)		(6)		(6)
Total stockholders’ equity		34,399		36,457
Total liabilities and stockholders’ equity	$	116,219	$	116,151

See accompanying notes to condensed consolidated financial statements.

2

WILLIAMS INDUSTRIAL SERVICES GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share data)	2022		2021		2022		2021
Revenue	$	56,685	$	73,351	$	182,303	$	225,773
Cost of revenue		55,936		66,590		173,564		203,561
Gross profit		749		6,761		8,739		22,212
Selling and marketing expenses		322		267		1,054		709
General and administrative expenses		6,657		4,248		19,022		16,931
Depreciation and amortization expense		61		50		173		137
Total operating expenses		7,040		4,565		20,249		17,777
Operating income (loss)		(6,291)		2,196		(11,510)		4,435
Interest expense, net		1,485		1,227		3,965		3,733
Other (income) expense, net		(11,114)		181		(11,533)		(1,411)
Total other (income) expense, net		(9,629)		1,408		(7,568)		2,322
Income (loss) from continuing operations before income tax		3,338		788		(3,942)		2,113
Income tax expense (benefit)		(272)		(6)		(214)		256
Income (loss) from continuing operations		3,610		794		(3,728)		1,857
Income (loss) from discontinued operations before income tax		(45)		(34)		(92)		130
Income tax expense (benefit)		(3)		22		(626)		59
Income (loss) from discontinued operations		(42)		(56)		534		71
Net income (loss)	$	3,568	$	738	$	(3,194)	$	1,928
Basic income (loss) per common share
Income (loss) from continuing operations	$	0.14	$	0.03	$	(0.14)	$	0.07
Income (loss) from discontinued operations		—		(0.00)		0.02		0.00
Basic income (loss) per common share	$	0.14	$	0.03	$	(0.12)	$	0.07
Diluted income (loss) per common share
Income (loss) from continuing operations	$	0.14	$	0.03	$	(0.14)	$	0.07
Income (loss) from discontinued operations		(0.01)		(0.00)		0.02		0.00
Diluted income (loss) per common share	$	0.13	$	0.03	$	(0.12)	$	0.07

See accompanying notes to condensed consolidated financial statements.

3

WILLIAMS INDUSTRIAL SERVICES GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Net income (loss)	$	3,568	$	738	$	(3,194)	$	1,928
Foreign currency translation adjustment		(318)		(98)		(345)		(64)
Comprehensive income (loss)	$	3,250	$	640	$	(3,539)	$	1,864

See accompanying notes to condensed consolidated financial statements.

4

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
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
Stock-based compensation	—		—		834		—		—	—		—		834
Foreign currency translation	—		—		—		(98)		—	—		—		(98)
Net income	—		—		—		—		738	—		—		738
Balance, September 30, 2021	26,384,670	$	260	$	91,670	$	(36)	$	(56,745)	(469,168)	$	(6)	$	35,143

							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
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
Restricted stock units forfeited	(4,874)		—		—		—		—	—		—		—
Tax withholding on restricted stock units	—		1		3		—		—	—		—		4
Stock-based compensation	—		—		494		—		—	—		—		494
Foreign currency translation	—		—		—		(318)		—	—		—		(318)
Net income	—		—		—		—		3,568	—		—		3,568
Balance, September 30, 2022	26,865,064	$	264	$	93,705	$	(440)	$	(59,124)	(442,303)	$	(6)	$	34,399

See accompanying notes to condensed consolidated financial statements.

5

WILLIAMS INDUSTRIAL SERVICES GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Nine Months Ended September 30,
(in thousands)	2022		2021
Operating activities:
Net income (loss)	$	(3,194)	$	1,928
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Net income from discontinued operations		(534)		(71)
Deferred income tax benefit		(178)		(304)
Depreciation and amortization on plant, property, and equipment		173		137
Amortization of deferred financing costs		636		623
Amortization of debt discount		150		150
Bad debt expense		(26)		(123)
Stock-based compensation		1,120		2,579
Changes in operating assets and liabilities:
Accounts receivable		(2,551)		(11,896)
Contract assets		2,547		(4,824)
Other current assets		2		(5,113)
Other assets		(2,202)		(214)
Accounts payable		(331)		2,121
Accrued and other liabilities		(692)		6,628
Contract liabilities		29		(39)
Net cash used in operating activities, continuing operations		(5,051)		(8,418)
Net cash used in operating activities, discontinued operations		(413)		(348)
Net cash used in operating activities		(5,464)		(8,766)
Investing activities:
Purchase of property, plant, and equipment		(536)		(537)
Net cash used in investing activities		(536)		(537)
Financing activities:
Repurchase of stock-based awards for payment of statutory taxes due on stock-based compensation		(159)		(501)
Debt issuance costs		(175)		—
Proceeds from short-term borrowings		211,875		208,421
Repayments of short-term borrowings		(198,026)		(204,101)
Repayments of long-term debt		(8,844)		(788)
Net cash provided by financing activities		4,671		3,031
Effect of exchange rate change on cash		(140)		112
Net change in cash, cash equivalents and restricted cash		(1,469)		(6,160)
Cash, cash equivalents and restricted cash, beginning of period		2,950		9,184
Cash, cash equivalents and restricted cash, end of period	$	1,481	$	3,024
Supplemental Disclosures:
Cash paid for interest	$	2,778	$	2,781
Cash paid for income taxes, net of refunds	$	—	$	1,841

See accompanying notes to condensed consolidated financial statements.

6

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 (loss), 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

7

NOTE 2—LIQUIDITY

As noted above, the accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP and on a basis consistent with the 2021 Report, which contemplates that the Company will continue to operate as a going concern, which means that it will be able to meet its obligations and continue its operations during the twelve-month period following the issuance of this Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2022 (this “Form 10-Q”).  Therefore, these financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

The Company had negative cash flows from operations during the nine months ended September 30, 2022.  These negative cash flows were primarily a consequence of the four factors described in the paragraph below.  

In connection with the preparation of the accompanying unaudited condensed consolidated financial statements, management assessed the Company’s financial condition and concluded that the following primary factors, taken in the aggregate, raised substantial doubt regarding the Company’s ability to continue as a going concern for the twelve-month period following the issuance of this Form 10-Q.

• Significant losses incurred on a number of fixed price contracts in our Florida water business, which have been the subject of prior disclosures.

• Start-up costs related to the Company’s entry into the transmission and distribution market, which have utilized cash resources and, while ultimately anticipated to benefit the Company’s business, have negatively impacted liquidity.

• Failure to convert pipeline opportunities into revenue, which have had the effect of delaying the Company’s receipt of cash from such opportunities.

• Delays in collecting cash receipts from customers.

To address the negative cash flows in the Company’s business, the Company has developed a liquidity plan, the implementation of which management believes will alleviate the substantial doubt about the Company’s ability to continue as a going concern during the twelve-month period following the issuance of this Form 10-Q.  The liquidity plan, which will continue to be refined as circumstances dictate, contemplates the following key elements, in which the Company will:

• Take steps to enhance profitability of non-performing businesses;

• Lower the cost of services by removing nonbillable expenses that cannot be recovered;

• Aggressively reduce operating expenses; and

• Shorten the collection cycle time on the Company’s accounts receivable and lengthen the payment cycle time on its accounts payable.

On August 3, 2022, as a result of the Company being unable to comply with its debt covenants as of June 30, 2022, the Company amended its existing Revolving Credit Agreement and the Term Loan Agreement (as defined below), which among other things, amended the calculation of EBITDA (as defined in the Revolving Credit Agreement), and Consolidated EBITDA (as defined in the Term Loan Agreement) to include (or “add back”) certain non-recurring losses and expenses relating to projects executed in Jacksonville, Florida, one-time costs and expenses incurred in connection with the Company’s transmission and distribution business unit start-up, and costs and expenses arising out of the Company’s litigation with a former executive and his employer (in each case, subject to certain specified dollar limits), as well as to amend and increase the Total Leverage Ratio (as defined in the Term Loan Agreement) applicable to the Company for certain periods. For additional information regarding the amendments, see “Note 9—Debt.”

8

While the above-mentioned factors have negatively affected the Company’s liquidity, there were two developments in the third and fourth quarter of 2022 that resulted in material cash receipts by the Company.  Specifically, the Company settled two legal claims.  The first such settlement involved a cash collection in the third quarter of 2022 of approximately $8.1 million related to an arbitration proceeding initiated by the Company against a third party in connection with the restatement of the Company’s financial statements in 2017 for the 2012 to 2014 period.  The second matter, settled in the fourth quarter of 2022, involved litigation against a former executive and his employer that resulted in the employer of the former executive agreeing to pay a cash settlement of $2.7 million.  The Company recognized both settlements as other income during the third quarter of 2022. The $8.1 million settlement proceeds were used to prepay part of the Company’s Term Loan and the $2.7 million settlement, which was collected on October 13, 2022, was used to repay a portion of the Revolving Credit Facility.  As a result, the full amount of these settlement receipts could not be used for general working capital purposes and did not materially affect the Company’s liquidity.  For additional information about the arbitration and legal settlements, please refer to “Note 9—Debt” and “Note 14—Subsequent Events” to the unaudited condensed consolidated financial statements included in this Form 10-Q.

In the first nine months of 2022, the Company’s principal sources of liquidity were borrowings under the Revolving Credit Facility and efforts to effectively manage its working capital.  The Company anticipates that this will continue to be the case in the fourth quarter of 2022, subject to the anticipated benefits of the liquidity plan outlined above.  The Company continues to monitor its liquidity and capital resources closely. If market conditions were to change, and revenue is reduced or operating costs either increased or could not be reduced as contemplated by the Company’s liquidity plan, cash flows and liquidity could be materially negatively impacted.

While management believes its liquidity plan alleviates the substantial doubt regarding the Company’s ability to continue as a going concern during the ensuing twelve-month period, the Company cannot provide any assurance that it will be able to implement its liquidity plan successfully or, even if successfully implemented, that the plan will ultimately result in the Company continuing as a going concern. In addition, the Company could be unable to meet its obligations under its existing indebtedness, including failing to comply with any of its covenants. If any such failures are not waived by the Company’s lenders, it would result in an event of default under such indebtedness and the potential acceleration of outstanding indebtedness thereunder and the potential foreclosure on the collateral securing such debt, and would likely cause a cross-default under the Company’s other outstanding indebtedness. If the liquidity plan does not have the intended effect, the Company may need to seek relief from the Company’s lenders or take steps to raise additional capital, such as selling equity or debt securities or entering into additional borrowing arrangements, to sustain operations, which may not be available on favorable terms, or at all, in which case the Company will be required to pursue other alternatives, which may include selling assets, selling or merging its business, ceasing operations or filing a petition for bankruptcy (either liquidation or reorganization) under applicable bankruptcy laws.

NOTE 3—RECENT ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Pronouncements

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

NOTE 4—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.

9

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 $44,000 of sublease income during the nine months ended September 30, 2022.

The components of lease expense were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
Lease Cost/(Sublease Income) (in thousands)	2022		2021		2022		2021
Operating lease cost	$	549	$	619	$	1,668	$	1,711
Short-term lease cost		2,125		1,051		5,353		2,484
Sublease income		(14)		(5)		(44)		(5)
Total lease cost	$	2,660	$	1,665	$	6,977	$	4,190

Lease cost related to finance leases was not significant for the three and nine months ended September 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	September 30, 2022		December 31, 2021
Lease Assets
Right-of-use assets	Other long-term assets	$	3,738	$	1,527
Lease Liabilities
Short-term lease liabilities	Other current liabilities	$	1,572	$	1,606
Long-term lease liabilities	Other long-term liabilities		2,582		511
Total lease liabilities		$	4,154	$	2,117

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

	Nine Months Ended September 30,
(dollars in thousands)	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash used by operating leases	$	1,810	$	1,810
Right-of-use assets obtained in exchange for new operating lease liabilities		3,669		1,549
Weighted-average remaining lease term - operating leases		5.34 years		1.47 years
Weighted-average remaining lease term - finance leases		1.48 years		2.48 years
Weighted-average discount rate - operating leases		9%		9%
Weighted-average discount rate - finance leases		9%		9%

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

	Operating Leases		Finance Leases
Nine Months Ended September 30,	(in thousands)
Remainder of 2022	$	557	$	1
2023		1,490		6
2024		653		1
2025		375		-
2026		381		-
Thereafter		1,873		-
Total lease payments	$	5,329	$	8
Less: interest		(1,183)		-
Present value of lease liabilities	$	4,146	$	8

NOTE 5—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 nine 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.

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As of September 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:

(in thousands)	September 30, 2022		December 31, 2021
Liabilities:
Current liabilities of discontinued operations	$	106	$	316
Liability for pension obligation		2,307		2,368
Liability for uncertain tax positions		1,206		1,882
Long-term liabilities of discontinued operations		3,513		4,250
Total liabilities of discontinued operations	$	3,619	$	4,566

The following table presents a reconciliation of the major classes of line items constituting the net income (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 September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
General and administrative expenses	$	—	$	5	$	—	$	39
Loss (gain) on disposal - Electrical Solutions		—		(17)		17		(245)
Interest expense		45		46		75		76
Income (loss) from discontinued operations before income tax		(45)		(34)		(92)		130
Income tax expense (benefit)		(3)		22		(626)		59
Income (loss) from discontinued operations	$	(42)	$	(56)	$	534	$	71

NOTE 6—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.

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Disaggregated revenue by type of contract was as follows:  

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Cost-plus reimbursement contracts	$	44,237	$	63,363	$	138,263	$	201,027
Fixed-price contracts		12,448		9,988		44,040		24,746
Total	$	56,685	$	73,351	$	182,303	$	225,773

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

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
United States	$	56,685	$	64,379	$	176,801	$	197,287
Canada		-		8,972		5,502		28,486
Total	$	56,685	$	73,351	$	182,303	$	225,773

Contract Balances

The Company enters into contracts that allow for periodic billings over the contract term that are dependent upon specific advance billing terms, as services are provided, or as milestone billings based on completion of certain phases of work. Projects with performance obligations recognized over time that have costs and estimated earnings recognized to date in excess of cumulative billings are reported in the Company’s unaudited condensed consolidated balance sheets as contract assets. Projects with performance obligations recognized over time that have cumulative billings in excess of costs and estimated earnings recognized to date are reported in the Company’s unaudited condensed consolidated balance sheets as contract liabilities. At any point in time, each project in process could have either contract assets or contract liabilities.

The following table provides information about contract assets and contract liabilities from contracts with customers:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Costs incurred on uncompleted contracts	$	55,936	$	66,590	$	173,564	$	203,561
Earnings recognized on uncompleted contracts		749		6,761		8,739		22,212
Total		56,685		73,351		182,303		225,773
Less—billings to date		(50,049)		(63,034)		(175,667)		(215,456)
Net	$	6,636	$	10,317	$	6,636	$	10,317
Contract assets	$	10,076	$	12,811	$	10,076	$	12,811
Contract liabilities		(3,440)		(2,494)		(3,440)		(2,494)
Net	$	6,636	$	10,317	$	6,636	$	10,317

For the three and nine months ended September 30, 2022, the Company recognized revenue of approximately $0.1 million and $2.2 million, respectively, on approximately $3.4 million that was included in the corresponding contract liability balance on December 31, 2021.

Remaining Performance Obligations

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that were unsatisfied (or partially unsatisfied) as of September 30, 2022:

(in thousands)	Remainder of 2022		2023		2024		Thereafter		Total
Remaining performance obligations	$	64,529	$	122,093	$	61,135	$	104,966	$	352,723

NOTE 7—EARNINGS (LOSS) PER SHARE

As of September 30, 2022, the Company’s 26,422,761 shares outstanding included 321,142 shares of contingently issued but unvested restricted stock. As of September 30, 2021, the Company’s 25,915,502 shares outstanding included 215,956 shares

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of contingently issued but unvested restricted stock. Restricted stock is excluded from the calculation of basic weighted average shares outstanding, but its impact, if dilutive, is included in the calculation of diluted weighted average shares outstanding.

Basic earnings per common share are calculated by dividing net income by the weighted average common shares outstanding during the period. Diluted earnings per common share are based on the weighted average common shares outstanding during the period, adjusted for the potential dilutive effect of common shares that would be issued upon the vesting and release of restricted stock awards and units and stock options, if any.

Basic and diluted earnings per common share from continuing operations were calculated as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except share data)	2022		2021		2022		2021
Income (loss) from continuing operations	$	3,610	$	794	$	(3,728)	$	1,857
Basic income (loss) per common share:
Weighted average common shares outstanding		26,102,308		25,699,545		26,009,465		25,306,130
Basic income (loss) per common share	$	0.14	$	0.03	$	(0.14)	$	0.07
Diluted income (loss) per common share:
Weighted average common shares outstanding		26,102,308		25,699,545		26,009,465		25,306,130
Diluted effect:
Unvested portion of restricted stock units and awards		335,373		807,030		—		791,570
Weighted average diluted common shares outstanding		26,437,681		26,506,575		26,009,465		26,097,700
Diluted income (loss) per common share	$	0.14	$	0.03	$	(0.14)	$	0.07

The weighted average number of shares outstanding used in the computation of basic and diluted earnings per common share does not include the effect of the following potential outstanding common stock. The effects of the potentially outstanding service-based restricted stock and restricted stock unit awards were not included in the calculation of diluted earnings per common share because the effect would have been anti-dilutive. The effects of the potentially outstanding performance- and market-based restricted stock unit awards were not included in the calculation of diluted earnings per common share because the performance and/or market conditions had not been satisfied as of September 30, 2022 and 2021.

	Three Months Ended September 30,		Nine Months Ended September 30,
	2022	2021	2022	2021
Unvested service-based restricted stock and restricted stock unit awards	573,517	16,666	229,102	—
Unvested performance- and market-based restricted stock unit awards	887,559	833,111	887,559	833,111

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NOTE 8—INCOME TAXES

The effective income tax expense rate for continuing operations for the three and nine months ended September 30, 2022 and 2021 was as follows:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2022	2021	2022	2021
Effective income tax rate for continuing operations	(8.2)%	(0.8)%	5.4%	12.1%

The effective income tax rate differs from the statutory federal income tax rate of 21% primarily because of the partial valuation allowances recorded on the Company’s deferred tax assets and the Canadian income tax provision.  

For the three months ended September 30, 2022, the Company recorded income tax benefit from continuing operations of $0.3 million, or (8.2)% of pretax income from continuing operations, compared with income tax benefit from continuing operations of $0.01 million, or (0.8)% of pretax income from continuing operations, in the corresponding period of 2021. For the nine months ended September 30, 2022, the Company recorded income tax benefit from continuing operations of $0.2 million, or 5.4% of pretax loss from continuing operations, compared with income tax expense from continuing operations of $0.3 million, or 12.1% of pretax income from continuing operations, in the corresponding period of 2021. The $0.3 million decrease in income tax provision from continuing operations for the three months ended September 30, 2022, compared with the corresponding period in 2021, was primarily related to a $0.6 million decrease in the Canadian income tax provision, partially offset by a $0.3 million decrease in the U.S. income tax benefit related to the indefinite lived deferred tax assets. The $0.5 million decrease in income tax provision from continuing operations for the nine months ended September 30, 2022, compared with the corresponding period in 2021, was primarily related to a $0.7 million decrease in the Canadian income tax provision, partially offset by a $0.2 million decrease in the U.S. income tax benefit related to the indefinite lived deferred tax assets.

The Company’s net deferred balance was primarily composed of indefinite lived deferred tax liabilities attributable to goodwill and trade names, and the indefinite lived deferred tax assets related to the post 2017 net operating losses and Section 163(j) interest addback. A full valuation allowance was applied to most of the remaining deferred balances. The indefinite lived deferred tax assets enabled the release of the valuation allowance to the extent that it can offset the indefinite lived deferred tax liabilities. Because all indefinite lived deferred tax liabilities are part of continued operations, and the release of valuation allowance is attributable to the future taxable income related to these deferred tax liabilities, the entire valuation allowance released was recorded in continuing operations according to ASC 740-20-45-3. As of September 30, 2022, the Company had $2.3 million net deferred tax liabilities, mainly composed of $12.4 million indefinite lived deferred tax liabilities attributable to goodwill and trade names, partially offset by $6.8 million indefinite lived deferred tax assets attributable to post 2017 net operating losses, $3.4 million indefinite lived deferred tax assets attributable to Section 163(j) interest addback, $0.2 million deferred tax assets accrued for the current period as a result of the Canadian net operating loss, plus $0.3 million deferred tax liability accrued with respect to the Company’s outside basis difference in its investment in Canada.

As of September 30, 2022, and 2021, the Company would have needed to generate approximately $287.2 million and $270.4 million, respectively, of future taxable income in order to realize its deferred tax assets.

The Company’s foreign subsidiaries may generate earnings that are not subject to U.S. income taxes so long as they are permanently reinvested in its operations outside of the U.S. Pursuant to ASC 740-30, undistributed earnings of foreign subsidiaries that are no longer permanently reinvested would become subject to deferred income taxes.

As of September 30, 2022, the Company projects that its Canadian subsidiary will have generated approximately $5.1 million undistributed earnings by the end of 2022. The Company’s management expects that all of the undistributed earnings will be repatriated back to the United States within the next 12 months. The Company formed the Canadian subsidiary in 2018 without significant capital investment, and the majority of the undistributed earnings was expected to be repatriated as dividends to the United States at the United States-Canada treaty rate of 5%. As a result, the Company accrued a deferred tax liability of $0.3 million related to its investment in Canada for its outside basis difference as of September 30, 2022.

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As of September 30, 2022 and 2021, the Company provided for a total liability of $2.3 million and $3.0 million, respectively, for uncertain income tax positions, which include the unrecognized tax benefits related to various federal, foreign and state income tax matters, and the accrual of interest, penalties, and foreign currency adjustments that can potentially arise from these positions. For the period ended September 30, 2022, the $2.3 million reserved for uncertain income tax positions was included in long-term liabilities of discontinued operations and other long-term liabilities, of which $1.2 million was related to discontinued operations, compared to $1.9 million for the corresponding period in 2021. If the unrecognized tax benefit is recognized, the reduction in the liability would be recorded as a tax benefit and reduce the effective tax rate. Of the $2.3 million reserved for uncertain income tax positions as of September 30, 2022, approximately $1.1 million was accrued for potential payment of interest and penalties, of which, $0.5 million was related to discontinued operations.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was enacted and signed into U.S. law to provide economic relief to individuals and businesses facing economic hardship as a result of the COVID-19 pandemic. The Company has incorporated the impact of the CARES Act to the tax provision. In addition, the Company deferred payments of federal employer payroll taxes of approximately $4.9 million, as permitted by the CARES Act. The first half of the deferred amounts were paid in December 2021, and the second half will be paid by December 2022.

On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (“IRA”) into law. The IRA contains a number of revisions to the Internal Revenue Code, including a 15% corporate minimum income tax and a 1% excise tax on corporate stock repurchases in tax years beginning after December 31, 2022. While these tax law changes have no immediate effect and are not expected to have a material adverse effect on the Company’s results of operations going forward, the Company will continue to evaluate the IRA’s impact as further information becomes available.

NOTE 9—DEBT

The following table provides information about the Company’s debt, net of unamortized deferred financing costs:

(in thousands)	September 30, 2022		December 31, 2021
Short-term borrowings	$	14,525	$	676
Term loan, current portion of long-term debt		1,050		1,050
Current debt	$	15,575	$	1,726
Term loan, noncurrent portion of long-term debt	$	24,056	$	32,900
Debt discount		(641)		(791)
Unamortized deferred financing costs		(1,606)		(1,781)
Long-term debt, net	$	21,809	$	30,328
Total debt, net	$	37,384	$	32,054

Debt Refinancing

On December 16, 2020 (the “Closing Date”), the Company and certain of its subsidiaries refinanced and replaced its prior revolving credit facility and term loan facility and entered into (i) the Term Loan Agreement (as defined below), which provided for senior secured term loan facilities in an aggregate principal amount of up to $50.0 million (collectively, the “Term Loan”), consisting of a $35.0 million closing date term loan facility (the “Closing Date Term Loan”) and up to $15.0 million of borrowings under a delayed draw facility (the “Delayed Draw Term Loan Facility”) with EICF Agent LLC, as agent, and CION Investment Corporation,  as a lender and a co-lead arranger, and the other lenders party thereto; and (ii) a senior secured asset-based revolving line of credit of up to $30.0 million (the “Revolving Credit Facility”) with PNC Bank, National Association (“PNC”). In connection with the refinancing, the Company repaid the outstanding balance of the prior facilities and all interest in full.

As of September 30, 2022, the Company had $14.5 million outstanding debt under the Revolving Credit Facility and $25.1 million outstanding (including both the noncurrent and current portion of the Term Loan) under the Term Loan. Total liquidity (the sum of unrestricted cash and availability under the Revolving Credit Facility) was $7.3 million at the end of the third quarter of 2022. As of September 30, 2022, the Company was in compliance with all debt covenants, as amended.

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Effective as of August 23, 2022, the Company entered into a confidential settlement agreement and general release (the “Settlement Agreement”), dated August 22, 2022, that resolved a pending arbitration proceeding initiated by the Company against a third-party respondent in May 2020. The claims made by the Company against the respondent relate to the restatement of the Company’s financial statements in 2017 for the 2012 to 2014 period. The Company received net proceeds (after payment of attorney’s fees and third-party funding costs) of approximately $8.1 million, which was recorded as other income on the income statement during the third quarter of 2022. In the third quarter of 2022, the Company used the $8.1 million of net proceeds received under the Settlement Agreement to repay part of the Term Loan. As of September 30, 2022, the Company reduced the Term Loan to $25.1 million compared to $34.0 million on December 31, 2021 (including both the noncurrent and current portion of the Term Loan).

The Revolving Credit Facility

On the Closing Date, the Company and certain of its subsidiaries (the “Revolving Loan Borrowers”) entered into the Revolving Credit and Security Agreement with PNC, as agent for the lenders, and the lenders party thereto (the “Revolving Credit Agreement”), which provides for the Revolving Credit Facility. As part of the Revolving Credit Facility, the Company may access a letter of credit sublimit in an amount up to $2.0 million, a swing loan sublimit in an aggregate principal amount of up to $3.0 million, and a Canadian dollar sublimit in an aggregate principal amount of up to $5.0 million. The Revolving Credit Agreement matures on December 16, 2025.

As of September 30, 2022, borrowings under the Revolving Credit Facility bore interest, at the Company’s election, at either (1) the base commercial lending rate of PNC, as publicly announced, plus 1.25%, payable in cash on a monthly basis, (2) the Term SOFR Rate (as defined in the Revolving Credit Agreement, as amended,) based on the secured overnight financing rate (“SOFR”) rate, subject to a minimum SOFR floor of 1.00%, plus 2.25%, payable in cash on the last day of each interest period, or (3) with respect to Canadian dollar loans, the Canadian Dollar Offered Rate (“CDOR”), subject to a minimum CDOR rate of 1.00%, plus 2.25%, payable in cash on a monthly basis. In addition, upon the occurrence of an event of default, and for so long as such event of default continues, default interest equal to 2.00% per year in excess of the rate otherwise applicable will be payable.

The Revolving Loan Borrowers’ Obligations (as defined in the Revolving Credit Agreement) are guaranteed by certain of the Company’s material, wholly owned subsidiaries, subject to customary exceptions (the “Revolving Loan Guarantors” and, together with the Revolving Loan Borrowers, the “Revolving Loan Credit Parties”). The Revolving Loan Credit Parties’ obligations are secured by first-priority security interests on substantially all of the Revolving Loan Credit Parties’ accounts receivable and a second-priority security interest in substantially all other assets of the Revolving Loan Credit Parties, subject to the terms of the Intercreditor Agreement between PNC and EICF Agent LLC, as the Revolving Loan Agent and the Term Loan Agent, respectively (as each such term is defined in the Intercreditor Agreement), as described below (the “Intercreditor Agreement”).  

The Revolving Loan Borrowers may from time to time voluntarily prepay outstanding amounts, plus any accrued but unpaid interest on the aggregate amount being prepaid, under the Revolving Credit Facility, in whole or in part. There is no required minimum prepayment amount. If at any time the amount outstanding under the Revolving Credit Agreement exceeds the borrowing base, or any sublimit, in effect at such time, the excess amount will be immediately due and payable. Subject to the Intercreditor Agreement, the Revolving Credit Agreement also requires mandatory prepayment of outstanding amounts in the event the Revolving Loan Borrowers receive proceeds from certain events and activities, including, among others, certain asset sales and casualty events, the issuance of indebtedness and equity interests, and the recovery of any proceeds from certain specified arbitration proceedings.

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The Revolving Credit Agreement provides for (1) a closing fee of $0.2 million, which was paid on the Closing Date, (2) a customary unused line fee equal to 0.25% per year on the unused portion of the Revolving Credit Facility, which is payable on a quarterly basis, and (3) a collateral monitoring fee of $2,500, which is payable on a monthly basis. The Revolving Credit Agreement also provides for an early termination fee (the “Early Termination Fee”), payable to the revolving lenders thereunder upon (1) any acceleration of the Obligations and termination of the Revolving Credit Agreement and the obligation of the revolving lenders to make advances thereunder following the occurrence of an Event of Default (as defined in the Revolving Credit Agreement), or (2) any other termination of the Revolving Credit Agreement and the obligation of revolving lenders to make advances thereunder for any reason (the “Early Termination Date”). The Early Termination Fee is calculated as follows: if the Early Termination Date occurred on or prior to the first anniversary of the Closing Date, the Early Termination Fee would have been 2.00% of the Revolving Credit Facility; and if prepayment occurs after the first anniversary of the Closing Date and on or prior to the second anniversary of the Closing Date, the Early Termination Fee will be 1.00% of the Revolving Credit Facility. While any letter of credit is outstanding under the Revolving Credit Facility, the Revolving Loan Borrowers must pay a letter of credit fronting fee at a rate equal to 0.25% per year, payable quarterly, in addition to any other customary fees required by the issuer of the letter of credit.

The Revolving Credit Agreement contains customary representations and warranties, as well as customary affirmative and negative covenants, in each case, with certain exceptions, limitations and qualifications. The Revolving Credit Agreement also requires the Revolving Loan Borrowers to regularly provide certain financial information to the lenders thereunder, maintain a springing minimum fixed charge coverage ratio, and comply with certain limitations on capital expenditures.

Events of default under the Revolving Credit Agreement include, but are not limited to, a breach of certain covenants or any representations or warranties, failure to timely pay any amounts due and owing, the commencement of any bankruptcy or other insolvency proceeding, judgments in excess of certain acceptable amounts, the occurrence of a change in control, certain events related to ERISA matters, impairment of security interests in collateral or invalidity of guarantees or security documents, or a default or event of default under the Term Loan Agreement or the Intercreditor Agreement, in each case, with customary exceptions, limitations, grace periods and qualifications. If an event of default occurs, the revolving lenders may, among other things, declare all Obligations outstanding under the Revolving Credit Facility to be immediately due and payable, together with accrued interest and fees, and exercise remedies under the collateral documents relating to the Revolving Credit Agreement.

On August 3, 2022, the Company entered into an Amendment to the Revolving Credit Agreement (the “Revolving Credit Amendment”) that, among other things, (i) amended the calculation of EBITDA (as defined in the Revolving Credit Agreement), effective as of June 30, 2022, to include (or “add back”) certain non-recurring losses and expenses relating to projects executed in Jacksonville, Florida, one-time costs and expenses incurred in connection with the Company’s transmission and distribution business unit start-up, and costs and expenses arising out of the Company’s litigation with a designated former executive and his employer (in each case, subject to certain specified dollar limits), (ii) permitted advances against certain eligible receivables of one of the Company’s joint ventures (also subject to specified dollar limits), (iii) included provisions that replace the London Interbank Offered Rate (LIBOR) interest rate with customary provisions based on SOFR, and (iv) provided for the payment of a $25,000 amendment fee, plus applicable fees and expenses. The $25,000 amendment fee will be expensed as incurred.

EICF Agent LLC, as the Term Loan Agent, and PNC, as the Revolving Loan Agent, entered into an Intercreditor Agreement, dated as of the Closing Date, to which the Term Loan Credit Parties (as defined below) and Revolving Loan Credit Parties consented. The Intercreditor Agreement, among other things, specifies the relative lien priorities of the Term Loan Agent and Revolving Loan Agent in the relevant collateral, and contains customary provisions regarding, among other things, the rights of the Term Loan Agent and Revolving Loan Agent to take enforcement actions against the relevant collateral and certain limitations on amending the documentation governing each of the Term Loan and Revolving Credit Facility.

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The Term Loan

On the Closing Date, the Company and certain of its subsidiaries (the “Term Loan Borrowers”) entered into the Term Loan, Guarantee and Security Agreement with EICF Agent LLC, as agent for the lenders, CION Investment Corporation, as a lender and co-lead arranger, and the other lenders party thereto (the “Term Loan Agreement”), which provides for the Term Loan. The Closing Date Term Loan was fully drawn on the Closing Date, while the Delayed Draw Term Loan Facility was available upon the satisfaction of certain conditions precedent for up to 18 months following the Closing Date and expired in June 2022. The Term Loan Agreement matures on December 16, 2025.

Borrowings under the Term Loan Agreement bear interest at SOFR, plus a margin of 8.50% (if the Total Leverage Ratio (as defined in the Term Loan Agreement) is less than 2.50:1) or 9.00% per year (if the Total Leverage Ratio is greater than or equal to 2.50:1), subject to a minimum SOFR floor of 1.00%, payable in cash on a quarterly basis. In addition, upon the occurrence of an event of default, and for so long as such event of default continues, default interest equal to 2.00% per year in excess of the rate otherwise applicable will be payable.

The Term Loan Borrowers’ Obligations (as defined in the Term Loan Agreement) are guaranteed by certain of the Company’s material, wholly owned subsidiaries, subject to customary exceptions (the “Term Loan Guarantors” and, together with the Term Loan Borrowers, the “Term Loan Credit Parties”). The Term Loan Credit Parties’ obligations are secured by first-priority security interests on substantially all of the Term Loan Credit Parties’ assets, as well as a second-priority security interest on the Term Loan Credit Parties’ accounts receivable and inventory, subject to the Intercreditor Agreement.

Subject to certain conditions, the Term Loan Borrowers may voluntarily prepay the Term Loan on any Payment Date (as defined in the Term Loan Agreement), in whole or in part, in a minimum amount of $1.0 million of the outstanding principal amount, plus a prepayment fee. The prepayment fee was amended effective June 30, 2022, as described below.

Subject to certain exceptions, within 120 days of the end of each calendar year, beginning with the year ended December 31, 2021, the Term Loan Borrowers must prepay the Obligations in an amount equal to (1) (i) if the Total Leverage Ratio is greater than 3:00:1:00, 50.0% of Excess Cash Flow (as defined in the Term Loan Agreement) or (ii) if the Total Leverage Ratio is equal to or less than 3:00:1:00 and greater than 2:00:1:00, 25.0% of Excess Cash Flow, less (2) all voluntary prepayments made on the Term Loan during such calendar year; provided that, so long as no default or event of default has occurred and is continuing or would result therefrom, no such prepayment will be required unless Excess Cash Flow for such calendar year equals or exceeds $0.5 million. The Company was not required to prepay any Obligations for the year ended December 31, 2021. The Term Loan Agreement also requires mandatory prepayment of certain amounts in the event the Term Loan Borrowers receive proceeds from certain events and activities, including, among others, certain asset sales and casualty events, the issuance of indebtedness and equity interests, and the receipt of extraordinary receipts (with certain exclusions), plus, in certain instances, the applicable prepayment fee.

The Term Loan Agreement contains customary representations and warranties, as well as customary affirmative and negative covenants, in each case, with certain exceptions, limitations and qualifications. The Term Loan Agreement also requires the Term Loan Borrowers to regularly provide certain financial information to the lenders thereunder, maintain a maximum total leverage ratio and a minimum fixed charge coverage ratio, and comply with certain limitations on capital expenditures.

Events of default under the Term Loan Agreement include, but are not limited to, a breach of certain covenants or any representations or warranties, failure to timely pay any amounts due and owing, the commencement of any bankruptcy or other insolvency proceeding, judgments in excess of certain acceptable amounts, the occurrence of a change in control, certain events related to ERISA matters, impairment of security interests in collateral or invalidity of guarantees or security documents, or a default or event of default under the Revolving Credit Agreement or the Intercreditor Agreement, in each case, with customary exceptions, limitations, grace periods and qualifications. If an event of default occurs, the Term Loan lenders may, among other things, declare all Obligations to be immediately due and payable, together with accrued interest and fees, and exercise remedies under the collateral documents relating to the Term Loan Agreement.

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On August 3, 2022 (the “Signing Date”), effective as of June 30, 2022, the Company entered into an Amendment to the Term Loan Agreement (the “Term Loan Amendment”) that, among other things, (i) amended and increased the Total Leverage Ratio (as defined in the Term Loan Agreement) applicable to the Company for certain periods, (ii) amended the calculation of Consolidated EBITDA (as defined in the Term Loan Agreement) to include (or “add back”) certain non-recurring losses and expenses relating to projects executed in Jacksonville, Florida, one-time costs and expenses incurred in connection with the Company’s transmission and distribution business unit start-up, and costs and expenses arising out of the Company’s litigation with a designated former executive and his employer (in each case, subject to certain specified dollar limits), (iii) provided for a fee of 1% of the then-outstanding principal balance due upon maturity of the term loan without duplication of fees paid in connection with the Company’s prepayment fee structure, (iv) extended the Company’s existing prepayment fee structure to require upon repayment (a) prior to the first anniversary of the Signing Date, a fee of 3% of the principal amount being repaid, (b) on or after the first anniversary of the Signing Date and prior to the second anniversary of the Signing Date, a fee of 2% of the principal amount being repaid, and (c) on or after the second anniversary of the Signing Date, a fee of 1% of the principal amount being repaid, and (v) provided for the payment of a $0.2 million amendment fee, plus applicable fees and expenses.  The Company’s expense related to the Term Loan Amendment was $0.2 million and will be recognized as interest expense over the remaining term of the modified Term Loan Agreement.

Effective as of August 23, 2022, the Company entered into a Settlement Agreement, which resolved a pending arbitration proceeding related to the restatement of the Company’s financial statements in 2017 for the 2012 to 2014 period. The Company received net proceeds of $8.1 million (after payment of attorney’s fees and third-party funding costs), and used these net proceeds to prepay a substantial amount of the Term Loan. The $8.1 million net proceeds, coupled with $0.3 million scheduled principal payments, reduced the Term Loan by a total of $8.4 million to $25.1 million as of September 30, 2022 (including both the noncurrent and current portion of the Term Loan).

Letters of Credit and Bonds

In line with industry practice, the Company is often required to provide letters of credit and payment and performance surety bonds to customers. These letters of credit and bonds provide credit support and security for the customer if the Company fails to perform its obligations under the applicable contract with such customer.

The Revolving Credit Facility provides for a letter of credit sublimit in an amount up to $2.0 million. As of September 30, 2022, the Company had $0.5 million letters of credit outstanding under this sublimit and $0.4 million cash collateralized standby letters of credit outstanding pursuant to its prior revolving credit facility with Wells Fargo Bank, National Association. There were no amounts drawn upon these letters of credit as of September 30, 2022.

In addition, as of September 30, 2022 and December 31, 2021, the Company had outstanding payment and performance surety bonds of $65.6 million and $67.6 million, respectively.

Deferred Financing Costs and Debt Discount:

Deferred financing costs and debt discount is amortized over the terms of the related debt facilities using the straight-line method. The following table summarizes the amortization of deferred financing costs and debt discount related to the Company's debt facilities and recognized in interest expense on the unaudited condensed consolidated statements of operations:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Term loan	$	125	$	113	$	350	$	338
Debt discount on term loan		50		50		150		150
Revolving credit facility		96		96		286		286
Total	$	271	$	259	$	786	$	774

The following table summarizes unamortized deferred financing costs and debt discount included on the Company's unaudited condensed consolidated balance sheets:

(in thousands)	Location	September 30, 2022		December 31, 2021
Term loan	Long-term debt, net	$	1,606	$	1,781
Debt discount on term loan	Long-term debt, net		641		791
Revolving credit facility	Other long-term assets		1,223		1,509
Total		$	3,470	$	4,081

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NOTE 10—FINANCIAL INSTRUMENTS

Fair Value of Financial Instruments

ASC 820–Fair Value Measurement defines fair value as the exit price, which is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a three-tier fair value hierarchy, which categorizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in the active markets for identical assets and liabilities and the lowest priority to unobservable inputs.

The Company’s financial instruments as of September 30, 2022 and December 31, 2021 consisted primarily of cash and cash equivalents, restricted cash, receivables, payables, and debt instruments. The carrying values of these financial instruments approximate their respective fair values, as they are either short-term in nature or carry interest rates that are periodically adjusted to market rates.

NOTE 11—COMMITMENTS AND CONTINGENCIES

Litigation and Claims

The Company is from time-to-time party to various lawsuits, including personal injury claims and other proceedings that arise in the ordinary course of its business. With respect to all such lawsuits, claims and proceedings, the Company records a reserve when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. The Company does not believe that the resolution of any currently pending lawsuits, claims and proceedings, either individually or in the aggregate, will have a material adverse effect on its financial position, results of operations or liquidity. However, the outcomes of any currently pending lawsuits, claims and proceedings cannot be predicted, and therefore, there can be no assurance that this will be the case.

The Company completed a bankruptcy filing of its Koontz-Wagner subsidiary on July 11, 2018. This could require the Company to incur legal fees and other expenses related to liabilities from this bankruptcy filing. While the Company does not anticipate these liabilities will have a material adverse effect on its results of operations, cash flows and financial position, and although the statute of limitations has run on certain claims that the Chapter 7 Trustee for the Koontz-Wagner estate might assert, there can be no assurance of the outcome. 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. For additional information, please refer to “Note 5—Changes in Business” to the unaudited condensed consolidated financial statements.

The acquiror of certain assets from a former operating unit of the Company has been named as a defendant in an asbestos personal injury lawsuit and has submitted a claim for indemnification and tendered defense of the matter to the Company. The Company has assumed defense of the matter subject to a reservation of rights and objection to the claim for indemnification. Neither the Company nor its predecessors ever mined, manufactured, produced, or distributed asbestos fiber, the material that allegedly caused the injury underlying this action. The Company does not expect that this claim will have a material adverse effect on its financial position, results of operations or liquidity. Moreover, during 2012, the Company secured insurance coverage that will help to reimburse the defense costs and potential indemnity obligations of its former operating unit relating to these claims. The Company intends to vigorously defend all currently active actions, and it does not anticipate that this action will have a material adverse effect on its financial position, results of operations or liquidity. However, the outcomes of any legal action cannot be predicted and, therefore, there can be no assurance that this will be the case.

Insurance

The Company maintains insurance coverage for most insurable aspects of its business and operations. The Company’s insurance programs, including, but not limited to, health, general liability, and workers’ compensation, have varying coverage limits depending upon the type of insurance. For the three and nine months ended September 30, 2022, insurance expense, including insurance premiums related to the excess claim coverage and claims incurred for continuing operations, was $1.6 million and $4.7 million, respectively.

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The Company’s unaudited condensed consolidated balance sheets include amounts representing its probable estimated liability related to insurance-related claims that are known and have been asserted against the Company, and for insurance-related claims that are believed to have been incurred but had not yet been reported as of September 30, 2022. As of September 30, 2022, the Company provided $0.9 million in letters of credit and $1.5 million of non-depleting cash collateral as security for possible general liability and workers’ compensation claims.

Executive Severance

As of September 30, 2022, the Company had outstanding severance arrangements with senior executives. The Company’s maximum commitment under all such arrangements, which would apply if the employees covered by these arrangements were each terminated without cause, was $6.4 million on September 30, 2022. The Company did not accrue executive severance expenses as of September 30, 2022.

NOTE 12—STOCK-BASED COMPENSATION PLANS

During the first nine months of 2022, the Company granted 291,894 service-based restricted stock awards under the 2015 Equity Incentive Plan (as amended and restated, the “2015 Plan”), at a grant date fair value of $1.85 per share, to its non-employee directors, which vest in full on February 3, 2023.

During the first nine months of 2022, the Company granted 362,356 service-based restricted stock units to its employees under the 2022 long-term incentive (“LTI”) program and the 2015 Plan at a grant date fair value of $1.99 per share. These service-based restricted stock units can be paid in cash or shares at the election of the Compensation Committee of the Board of Directors and shall vest in equal annual installments over a period of three years.

During the first nine months of 2022, the Company also granted 724,726 performance-based restricted stock units to its employees under the 2022 LTI program and the 2015 Plan at a grant date fair value of $1.99 per share. The 2022 performance-based restricted stock units have three annual performance periods (fiscal years 2022, 2023 and 2024), with operating income and free cash flow goals (equally weighted) for each year, and threshold performance resulting in awards earned at 50% of the target opportunity and maximum performance resulting in awards earned at 200% of the target. The annual achievement levels are accumulated over the three-year performance period and the earned amounts, if any, will vest on March 31, 2025. The three-year average payout level for each performance objective replaces the actual payout level for any fiscal year where the actual payout is less than the three-year average. These performance-based restricted stock units can be paid in cash or shares at the election of the Compensation Committee of the Board of Directors.

During the first nine months of 2021, the Company granted 307,616 service-based restricted stock units under the 2021 LTI program and the 2015 Plan at a grant date fair value of $3.48 per share. These service-based restricted stock units can be paid in cash or shares at the election of the Compensation Committee of the Board of Directors and shall vest in full on March 31, 2024.  

Additionally on June 15, 2021, the Company granted an employee 41,666 service-based restricted stock units under the 2015 Plan at a grant date fair value of $6.27 per share. The service-based restricted stock units vested with respect to 25,000 shares of common stock on the date of grant (June 15, 2021), while 8,333 vested on March 31, 2022 and the remaining 8,333 will vest on March 31, 2023. These awards may be paid in cash or shares at the election of the Compensation Committee of the Board of Directors.

During the first nine months of 2021, the Company also granted performance-based restricted stock units under the 2021 LTI program and the 2015 Plan with an aggregate cash value of approximately $2.2 million, which could be paid in cash or shares at the election of the Compensation Committee of the Board of Directors. The 2021 performance-based restricted stock units have three annual performance periods (fiscal years 2021, 2022 and 2023), with operating income and free cash flow goals (equally weighted) for each year, and threshold performance resulting in awards earned at 50% of the target opportunity and maximum performance resulting in awards earned at 200% of the target. The annual achievement levels are accumulated over the three-year performance period and the earned amounts, if any, vest on March 31, 2024. The three-year average payout level for each performance objective replaces the actual payout level for any fiscal year where the actual payout is less than the three-year average. These are cash-based awards that were included in other current liabilities on the consolidated balance sheet beginning in April 2021.

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Additionally on May 17, 2021, the Company granted an employee 37,500 performance-based restricted stock units as an inducement award outside of the 2015 Plan at a grant date fair value of $5.00 per share. The performance-based restricted stock units, if any, vest on March 31, 2024. The performance-based awards have three annual performance periods (fiscal years 2021, 2022 and 2023), with operating income and free cash flow goals (equally weighted) for each year, and threshold performance resulting in awards earned at 50% of the target opportunity and maximum performance resulting in awards earned at 200% of the target. These awards may be paid in cash or shares at the election of the Compensation Committee of the Board of Directors.

The Company previously granted (i) performance-based restricted stock units under the 2016 LTI program, which were scheduled to vest if the Company achieved a per share stock price of $5.50 for 30 consecutive trading days prior to August 5, 2021, (ii) performance-based restricted stock units under the 2017 LTI program, which were scheduled to vest if the Company achieved a per share stock price of $6.00 for 30 consecutive trading days prior to March 31, 2021 (pursuant to an extension from the initial vesting date of March 31, 2020, which extension was approved by the Compensation Committee in February 2020), and (iii) performance-based restricted stock units under the 2018 LTI program, which were scheduled to vest if the Company achieved a per share stock price of at least $5.00 for any period of 30 consecutive trading days prior to June 30, 2021 (collectively, the “LTI Performance Awards”). On March 5, 2021, the Compensation Committee of the Board of Directors extended the performance period for each of the LTI Performance Awards to December 31, 2022. In accordance with ASC Topic 718, “Compensation—Stock Compensation” (“ASC 718”), the Company conducted a lattice valuation model in order to revalue the market price for the LTI Performance Awards at the March 5, 2021 modification date. The 2018 LTI program met the market objective by achieving a per share stock price of $5.00 for 30 consecutive days, and approximately 189,640 shares will vest for recipients remaining employed through December 31, 2022.

During the first nine months of 2021, the Compensation Committee of the Board of Directors approved modifying the 2020 and 2019 performance-based restricted stock units granted in 2020 and 2019. The 2020 and 2019 performance-based restricted stock units did not achieve the 2021 performance objectives. The 2019 performance-based restricted stock units expired because their final performance period was 2021.

On April 13, 2022, the Company’s management analyzed the probability of achieving the 2022 performance objectives for the 2021 and 2020 performance-based restricted stock units granted in 2021 and 2020 and determined that, after comparing the actual year-to-date results to the forecasted results, it is unlikely the Company will achieve the minimum performance metric for the 2022 performance period. This resulted in a $0.3 million adjustment for the 2021 performance-based restricted stock units and an entire reversal of $0.5 million for the 2020 performance-based restricted stock units within the first three months of 2022. The 2020 performance-based restricted stock units will expire after the 2022 performance period and the 2021 performance-based restricted stock units were adjusted to vest at 55% of their original cash value and as of September 30, 2022, will be expensed by approximately $0.5 million until the end of the service requisite period of March 31, 2024.

While the majority of  restricted stock units and awards were granted as equity, in accordance with ASC 718, the Company has one cash-based plan that is classified as a liability. Stock-based compensation expense for the three months ended September 30, 2022 and 2021 was $0.5 million and $1.1 million, respectively, and for the nine months ended September 30, 2022 and 2021 was $1.1 million and $2.6 million, respectively, and was included in general and administrative expenses on the Company’s unaudited condensed consolidated statements of operations.

NOTE 13—OTHER SUPPLEMENTARY INFORMATION

The following table summarizes other current assets included on the Company's unaudited condensed consolidated balance sheets:

(in thousands)	September 30, 2022		December 31, 2021
Unamortized commercial insurance premiums	$	3,674	$	2,389
Litigation settlement receivable		2,675		—
Security deposits - real estate		1,978		1,978
Prepaid expenses		1,826		1,136
Sales tax receivable - Canada		6		4,866
Other current assets		516		680
Total	$	10,675	$	11,049

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The following table summarizes other current liabilities included on the Company's unaudited condensed consolidated balance sheets:

(in thousands)	September 30, 2022		December 31, 2021
Short-term lease liability	$	1,572	$	1,606
Accrued job cost		1,318		2,433
Cloud computing software liability		692		-
Stock Compensation		418		938
Legal fees		245		113
Sales tax payable - Canada		-		5,135
Other current liabilities		385		792
Total	$	4,630	$	11,017

The following table summarizes other long-term assets included on the Company's unaudited condensed consolidated balance sheets:

(in thousands)	September 30, 2022		December 31, 2021
Right-of-use lease assets	$	3,738	$	1,527
Equity method investment in RCC		1,848		2,521
Unamortized Debt Issuance Cost		1,223		1,509
Unamortized cloud computing software		757		—
Other long-term assets		166		155
Total	$	7,732	$	5,712

The following table summarizes other long-term liabilities included on the Company's unaudited condensed consolidated balance sheets:

(in thousands)	September 30, 2022		December 31, 2021
Long-term lease liability	$	2,582	$	511
Liability for uncertain tax positions		1,102		1,136
Other long-term liabilities		756		-
Total	$	4,440	$	1,647

NOTE 14—SUBSEQUENT EVENTS

The Company settled a legal dispute related to the loss of a multi-year contract against a former Company executive and current competitor. The former Company executive was hired by the competitor and breached a non-compete agreement. The legal settlement resulted in $2.7 million and was included on the income statement as other income for the third quarter of 2022. The Company collected the $2.7 million in cash related to the settlement on October 13, 2022. The $2.7 million settlement was used to pay a portion of the Revolving Credit Facility in the fourth quarter of 2022.

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

Cautionary Statement Regarding Forward-Looking Statements

This Form 10-Q and its exhibits contain or incorporate by reference various forward-looking statements that express a belief, expectation or intention or are otherwise not statements of historical fact. Forward-looking statements generally use forward-looking words, such as “may,” “will,” “could,” “should,” “would,” “project,” “believe,” “anticipate,” “expect,” “estimate,” “continue,” “potential,” “plan,” “forecast” and other words that convey the uncertainty of future events or outcomes. These forward-looking statements are not guarantees of our future performance and involve risks, uncertainties, estimates and assumptions that are difficult to predict. Therefore, our actual outcomes and results may differ materially from those expressed in these forward-looking statements. Investors should not place undue reliance on any of these forward-looking statements. Except as required by law, we undertake no obligation to further update any such statements, or the risk factors described in our 2021 Report under the heading “Part I—Item 1A. Risk Factors,” to reflect new information, the occurrence of future events or circumstances or otherwise. The forward-looking statements in this Form 10-Q do not constitute guarantees or promises of future performance. Forward-looking statements may include information concerning the following, among other items:

● implementation of our liquidity plan and our ability to continue as a going concern;

● our ability to make interest and principal payments on our debt and satisfy the amended financial and other covenants contained in our debt facilities, as well as our ability to engage in certain transactions and activities due to limitations and covenants contained in such facilities;

● our ability to generate sufficient cash resources to continue funding operations, including investments in working capital required to support growth-related commitments that we make to our customers, and the possibility that we may be unable to obtain any additional funding as needed or incur losses from operations in the future;

● exposure to market risks from changes in interest rates, including changes to or replacement of the LIBOR;

● our ability to obtain adequate surety bonding and letters of credit;

● our ability to maintain effective internal control over financial reporting and disclosure controls and procedures;

● our ability to attract and retain qualified personnel, skilled workers, and key officers;

● failure to successfully implement or realize our business strategies, plans and objectives of management, and liquidity, operating and growth initiatives and opportunities, including any expansion into new markets, and our ability to identify potential candidates for, and consummate, acquisition, disposition, or investment transactions;

● the loss of one or more of our significant customers;

● our competitive position;

● market outlook and trends in our industry, including the possibility of reduced investment in, or increased regulation of, nuclear power plants and declines in public infrastructure construction and reductions in government funding, including funding by state and local agencies;

● costs exceeding estimates we use to set fixed-price contracts;

● harm to our reputation or profitability due to, among other things, internal operational issues, poor subcontractor performances or subcontractor insolvency;

● potential insolvency or financial distress of third parties, including our customers and suppliers;

● our contract backlog and related amounts to be recognized as revenue;

● our ability to maintain our safety record, the risks of potential liability and adequacy of insurance;

● adverse changes in our 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.;

● our 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, the effects of the Ukraine-Russia conflict and a possible recession;

● our ability to meet publicly announced guidance or other expectations about our business, key metrics and future operating results;

● the impact of the COVID-19 pandemic on our business, results of operations, financial condition, and cash flows, including global supply chain disruptions and the potential for additional COVID-19 cases to occur at our active or future job sites, which potentially could impact cost and labor availability;

● information technology vulnerabilities and cyberattacks on our networks;

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● our failure to comply with applicable laws and regulations, including, but not limited to, those relating to privacy and anti-bribery;

● our ability to successfully implement our new enterprise resource planning (ERP) system;

● our 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 worsen or increase due to the effects 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 our common stock;

● our ability to maintain our stock exchange listing;

● the effects of anti-takeover provisions in our organizational documents and Delaware law;

● the impact of future offerings or sales of our common stock on the market price of such stock;

● the potential impact of activist stockholder actions;

● expected outcomes of legal or regulatory proceedings (whether claims made by or against us) and their anticipated effects on our results of operations; and

● any other statements regarding future growth, future cash needs, future operations, business plans and future financial results.

These forward-looking statements represent our intentions, plans, expectations, assumptions, and beliefs about future events and are subject to risks, uncertainties, and other factors, including unpredictable or unanticipated factors that we have not discussed in this Form 10-Q. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by the forward-looking statements.

In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. Investors should consider the areas of risk and uncertainty described above, as well as those discussed in the 2021 Report under the heading “Part I—Item 1A. Risk Factors.” Except as may be required by applicable law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, and we caution investors not to rely upon them unduly.

The following discussion provides an analysis of the results of continuing operations, an overview of our liquidity and capital resources and other items related to our business. Unless otherwise specified, the financial information and discussion in this Form 10-Q are as of and for the three and nine months ended September 30, 2022 and are based on our continuing operations; they exclude any results of our discontinued operations. Please refer to “Note 5—Changes in Business” to the unaudited condensed consolidated financial statements included in this Form 10-Q for additional information on our discontinued operations.

This discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and notes thereto included in this Form 10-Q and our audited consolidated financial statements and notes thereto included in the 2021 Report.

Backlog

The services we provide are typically carried out under construction contracts, long-term maintenance contracts and master service agreements. Total backlog represents the dollar amount of revenue expected to be recorded in the future for work performed under awarded contracts.

Revenue estimates included in our backlog can be subject to change as a result of project accelerations, cancellations or delays due to various factors, including, but not limited to, the customer’s budgetary constraints and adverse weather. These factors can also cause revenue amounts to be recognized in different periods and at levels other than those originally projected. Additional work that is not identified under the original contract is added to our estimated backlog when we reach an agreement with the customer as to the scope and pricing of that additional work. Backlog is reduced as work is performed and revenue is recognized, or upon cancellation.

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Backlog is not a measure defined by GAAP, and our methodology for determining backlog may vary from the methodology used by other companies in determining their backlog amounts. Backlog may not be indicative of future operating results and projects in our backlog may be cancelled, modified, or otherwise altered by our customers. We utilize our calculation of backlog to assist in measuring aggregate awards under existing contractual relationships with our customers. We believe our backlog disclosures will assist investors in better understanding this estimate of the services to be performed pursuant to awards by our customers under existing contractual relationships.

The following tables summarize our backlog:

(in thousands)	September 30, 2022		December 31, 2021
Cost plus	$	313,022	$	559,417
Lump sum		39,701		72,276
Total	$	352,723	$	631,693

(in thousands)	Three Months Ended September 30, 2022		Nine Months Ended September 30, 2022
Backlog - beginning of period	$	234,303	$	631,693
New awards		158,960		214,480
Adjustments and cancellations, net		16,145		(311,147)
Revenue recognized		(56,685)		(182,303)
Backlog - end of period	$	352,723	$	352,723

Total backlog as of September 30, 2022 was $352.7 million, compared with $631.7 million on December 31, 2021, a decrease of $279.0 million, which was primarily driven by the loss of a multi-year contract within the nuclear decommissioning market in February 2022, contributing to a loss of approximately $374.6 million in backlog for the years 2022 through 2029. We estimate that $168.2 million, or 47.7% of total backlog on September 30, 2022, will be converted to revenue within the next twelve months and $64.5 million, or 18.3% of total backlog, will be converted to revenue within the remainder of the fiscal year. As of December 31, 2021, we estimated that approximately $157.2 million of our year-end backlog, as adjusted for the loss of the multi-year contract in February 2022, would be converted to revenue during 2022. Please refer to Item 1, Business under “Backlog” and “Note 17—Subsequent Events” included in the 2021 Report for additional information.

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Results of Operations

The following summary and discussion of our results of operations is based on our continuing operations and excludes any results of our discontinued operations:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Revenue	$	56,685	$	73,351	$	182,303	$	225,773
Cost of revenue		55,936		66,590		173,564		203,561
Gross profit		749		6,761		8,739		22,212
Selling and marketing expenses		322		267		1,054		709
General and administrative expenses		6,657		4,248		19,022		16,931
Depreciation and amortization expense		61		50		173		137
Total operating expenses		7,040		4,565		20,249		17,777
Operating income (loss)		(6,291)		2,196		(11,510)		4,435
Interest expense, net		1,485		1,227		3,965		3,733
Other (income) expense, net		(11,114)		181		(11,533)		(1,411)
Income (loss) from continuing operations before income tax		3,338		788		(3,942)		2,113
Income tax expense (benefit)		(272)		(6)		(214)		256
Income (loss) from continuing operations	$	3,610	$	794	$	(3,728)	$	1,857

Revenue for the three months ended September 30, 2022 decreased $16.7 million, or 22.7%, compared with the corresponding period in 2021. This decrease was primarily related to lost nuclear decommissioning projects, resulting in a $13.5 million reduction in revenue, the Company exiting the Canadian nuclear market, contributing to a $9.0 million reduction in revenue and a reduction in volume related to our United States nuclear market of $4.0 million compared to the corresponding period in 2021. These declines were partially offset by increased volume in the Company’s transmission and distribution businesses by $4.1 million, water business by $2.1 million, chemical business by $2.1 million and fossil business by $1.2 million.

Revenue for the nine months ended September 30, 2022 decreased $43.5 million, or 19.3%, compared with the corresponding period in 2021. This decrease was primarily related to lost nuclear decommissioning projects, resulting in a $29.0 million reduction, the Company exiting the Canadian nuclear market, contributing to a $23.0 million reduction and a $22.7 million reduction largely driven by the timing of a nuclear outage compared to the corresponding period in 2021. These declines were partially offset by a $5.1 million year-over-year increase with several key customers in our nuclear market, a $4.8 million increase in our chemical market, a $13.0 million increase in our water business and growth in our transmission and distribution businesses contributing to $5.3 million.

Gross profit for the three months ended September 30, 2022 decreased by $6.0 million, or 88.9%, compared with the corresponding period in 2021, while gross margin declined to 1.3% from 9.2%. The decrease in gross profit reflects start-up costs relating to our transmission and distribution markets and the impact of additional losses on certain lump sum projects in our Florida water markets. We anticipate that these projects will continue to generate revenues with no associated profits until completion in the third quarter of 2023. Excluding the impact relating to start-up costs in the transmission and distribution markets and the lump sum projects in the water market for which losses were incurred, the Company would have realized a gross margin of 9.7% rather than 1.3%.

Gross profit for the nine months ended September 30, 2022 decreased by $13.5 million, or 60.7%, compared with the corresponding period in 2021, while gross margin declined to 4.8% from 9.8%. The decrease in gross profit reflects start-up costs relating to our entry into the transmission and distribution markets and the impact of additional losses on certain lump sum projects in our Florida water markets. We anticipate that these projects will continue to generate revenues with no associated profits until completion in the third quarter of 2023. Excluding the impact relating to start-up costs in the transmission and distribution markets and the lump sum projects in the water market for which losses were incurred, the Company would have realized a gross margin of 10.9% rather than 4.8%.

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The following table reconciles our adjusted gross margin to our actual gross margin by deducting the energy transmission and distribution projects that are incurring start-up costs and lump sum projects in the water markets that are generating a loss. We believe this information is meaningful as it isolates the impact that our start-up costs and the non-profitable lump sum projects have on our gross margin. Because adjusted gross margin is not calculated in accordance with GAAP, it may not be comparable to other similarly titled measures of other companies and should not be considered in isolation or as substitute for, or superior to, financial measures prepared in accordance with GAAP.

(in thousands)	Three Months Ended September 30, 2022		Nine Months Ended September 30, 2022
Revenue	$	56,685	$	182,303
Cost of revenue		55,936		173,564
Gross profit		749		8,739
Gross margin		1.3%		4.8%
Minus: revenue from transmission and distribution start-up business		(2,900)		(5,440)
Minus: revenue from Florida lump sum water projects		(3,322)		(16,995)
Minus: total revenue deducted		(6,222)		(22,435)
Minus: cost of revenue from transmission and distribution start-up business		(3,622)		(8,947)
Minus: cost of revenue from the Florida lump sum water projects		(6,759)		(22,178)
Minus: total cost of revenue deducted		(10,381)		(31,125)
Adjusted revenue		50,463		159,868
Adjusted cost of revenue		45,555		142,439
Adjusted gross profit	$	4,908	$	17,429
Adjusted gross profit margin		9.7%		10.9%

The Company recorded an operating loss for the three months ended September 30, 2022 of $6.3 million compared to operating income of $2.2 million for the corresponding period in 2021. This operating loss was primarily related to the decrease of gross profits due to the start-up costs in the energy transmission and distribution markets and the non-profitable lump sum projects in our water market. These losses were coupled with operating costs related to general and administrative expenses (see below).

The Company recorded an operating loss for the nine months ended September 30, 2022 of $11.5 million compared to operating income of $4.4 million for the corresponding period in 2021. This operating loss was primarily due to the decrease in gross profits due to the start-up costs in the energy transmission and distribution markets and the non-profitable lump sum projects in our water market. These losses were coupled with operating costs related to general and administrative expenses (see below).

General and Administrative Expenses

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Employee-related expenses	$	2,740	$	1,946	$	8,469	$	8,916
Stock-based compensation expense		543		1,119		1,120		2,579
Professional fees		1,499		(10)		4,443		1,876
Other expenses		1,875		1,193		4,990		3,560
Total	$	6,657	$	4,248	$	19,022	$	16,931

Total general and administrative expenses for the three months ended September 30, 2022 increased $2.4 million, or 56.7%, compared with the corresponding period in 2021. The increase was largely driven by a $1.4 million increase in professional fees involving legal expenses, a $1.0 million increase largely driven by the reversal of short-term incentives not achieving targets in 2021 and a $0.6 million increase in other expenses related to computer software and subscription costs. These increased costs were partially offset by a $0.6 million decrease in stock-based compensation involving forfeitures of previously-granted equity awards and adjustments related to performance objectives.

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Total general and administrative expenses for the nine months ended September 30, 2022 increased $2.1 million, or 12.4% compared with the corresponding period in 2021. The increase was largely driven by a $2.6 million increase in professional fees involving legal expenses and a $1.4 million increase in other expenses related to software and subscriptions costs. These increased costs were partially offset by a $1.5 million decrease in stock-based compensation involving forfeitures and adjustments related to performance objectives and a $0.4 million reduction in employee-related costs for salaries.

Total Other (Income) Expense, Net

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Interest expense, net	$	1,485	$	1,227	$	3,965	$	3,733
Other (income) expense, net		(11,114)		181		(11,533)		(1,411)
Total	$	(9,629)	$	1,408	$	(7,568)	$	2,322

Total other income, net, for the three months ended September 30, 2022 increased $11.0 million compared with the corresponding period in 2021. The increase was primarily driven by an $8.1 million settlement of an arbitration proceeding related to the restatement of the Company’s financial statements in 2017 for the 2012 to 2014 period, coupled with a $2.7 million settlement related to a former executive and his employer. Additionally, the Company had $0.7 million decrease in other expenses related to a lease impairment and other small miscellaneous expenses compared with the corresponding period in 2021. The increase was partially offset by a $0.3 million increase in interest expense related to interest rate increases on our borrowings and a $0.2 million reduction in joint venture earnings due to lower volume as construction activities for Plant Vogtle move closer to completion.

Total other income, net, for the nine months ended September 30, 2022 increased $9.9 million compared with the corresponding period in 2021. The increase was primarily driven by an $8.1 million settlement of an arbitration proceeding related to the restatement of the Company’s financial statements in 2017 for the 2012 to 2014 period, coupled with a $2.7 million settlement related to a former executive and his employer. These awards were partially offset by a $0.2 million increase in interest expense related to interest rate increases on our borrowings and a $0.6 million reduction in joint venture earnings due to lower volume as construction activities for Plant Vogtle move closer to completion.

For additional information about the arbitration and legal settlements, please refer to “Note 9—Debt” and “Note 14—Subsequent Events” to the unaudited condensed consolidated financial statements included in this Form 10-Q.

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Income Tax Expense

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Income tax expense (benefit)	$	(272)	$	(6)	$	(214)	$	256

Income tax expense for the interim periods is based on estimates of the effective tax rate for the entire fiscal year. The effective income tax rate is based upon the estimated income during the calendar year, the estimated composition of the income in different jurisdictions and discrete adjustments, if any, in the applicable quarterly periods for settlements of tax audits or assessments and the resolution or identification of tax position uncertainties.

For the three months ended September 30, 2022, the Company recorded income tax benefit from continuing operations of $0.3 million, or (8.2)% of pretax income from continuing operations, compared with income tax benefit from continuing operations of $0.01 million, or (0.8)% of pretax income from continuing operations, in the corresponding period of 2021. For the nine months ended September 30, 2022, the Company recorded income tax benefit from continuing operations of $0.2 million, or 5.4% of pretax loss from continuing operations, compared with income tax expense from continuing operations of $0.3 million, or 12.1% of pretax income from continuing operations, in the corresponding period of 2021.

The $0.3 million decrease in income tax provision from continuing operations for the three months ended September 30, 2022 compared with the corresponding period in 2021 was primarily related to a $0.6 million decrease in the Canadian income tax provision, partially offset by a $0.3 million decrease in the U.S. income tax benefit related to the indefinite lived deferred tax assets. The $0.5 million decrease in income tax provision from continuing operations for the nine months ended September 30, 2022, compared with the corresponding period in 2021, was primarily related to a $0.7 million decrease in the Canadian income tax provision, partially offset by a $0.2 million decrease in the U.S. income tax benefit related to the indefinite lived deferred tax assets.

Discontinued Operations

See “Note 5—Changes in Business” to the unaudited condensed consolidated financial statements included in this Form 10-Q for information regarding discontinued operations.

Liquidity and Capital Resources

During the nine months ended September 30, 2022, our principal sources of liquidity were borrowings under the Revolving Credit Facility and effective management of our working capital. Our principal uses of cash were to pay for customer contract-related material, labor and subcontract labor, operating expenses, principal payments on the Term Loan and interest expense on the Term Loan and the Revolving Credit Facility. See discussion in “Note 9—Debt” to the unaudited condensed consolidated financial statements included in this Form 10-Q for additional information about the Term Loan and the Revolving Credit Facility.

Net Cash Flows

Our net consolidated cash flows, including cash flows related to discontinued operations, consisted of the following:

	Nine Months Ended September 30,
(in thousands)	2022		2021
Cash flows provided by (used in):
Operating activities	$	(5,464)	$	(8,766)
Investing activities		(536)		(537)
Financing activities		4,671		3,031
Effect of exchange rate changes on cash		(140)		112
Net change in cash, cash equivalents and restricted cash	$	(1,469)	$	(6,160)

Cash and Cash Equivalents

As of September 30, 2022, our operating unrestricted cash and cash equivalents decreased $1.5 million to $1.0 million from $2.5 million as of December 31, 2021. As of September 30, 2022, $0.4 million of operating cash was held in U.S. bank accounts and $0.6 million was held in Canada. Total liquidity (the sum of unrestricted cash and availability under the Revolving Credit Facility) was $7.3 million at the end of the third quarter of 2022.

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Operating Activities

Cash flows from operating activities result primarily from earnings sources and are affected by changes in operating assets and liabilities, which consist primarily of working capital balances related to our projects. For the nine months ended September 30, 2022, cash used in operating activities totaled $5.5 million, a decrease in cash used of $3.4 million compared to the corresponding period in 2021. The cash used in operating activities was primarily due to a $3.2 million net loss, $2.6 million increase to accounts receivable, a $1.0 million decrease to accounts payable and a $2.2 million increase to other assets, partially offset by a $2.6 million decrease to contract assets and a $1.1 million increase to stock-compensation costs for the nine months ended September 30, 2022.

Investing Activities

Cash flows from investing activities were insignificant for the nine months ended September 30, 2022, consistent with the corresponding period in 2021.

Financing Activities

For the nine months ended September 30, 2022, net cash provided by financing activities of $4.7 million was primarily composed of cash provided by our borrowings exceeding our repayments under the Revolving Credit Facility by $13.9 million, partially offset by an $8.8 million payment on our Term Loan, a $0.2 million payment related to the amendment of our Term Loan and Revolving Credit Facility and approximately $0.2 million for payment of statutory taxes related to stock-based compensation. The $8.8 million principal payment included an $8.1 million prepayment related to cash awarded to the Company from settlement of an arbitration proceeding.  

During the first nine months ended September 30, 2021, net cash provided by financing activities of $3.0 million was primarily due to cash provided by our borrowings under the Revolving Credit Facility exceeding our repayments from customer cash receipts by $4.3 million, which was partially offset by cash used in connection with our stock-based awards for payments of statutory taxes of $0.5 million and a $0.8 million principal payment we made on the Term Loan.

For additional information about the settlement of the arbitration and amendment fee, please refer to “Note 9—Debt” to the unaudited condensed consolidated financial statements included in this Form 10-Q

Effect of Exchange Rate Changes on Cash

For both the nine months ended September 30, 2022 and 2021, the effect of Canadian foreign exchange rate changes on our cash balances was not material.

Dividends

We do not currently anticipate declaring dividends in the near future. As of September 30, 2022, the terms of the Term Loan and Revolving Credit Facility restricted our ability to pay dividends. In addition, the timing and amounts of any dividends would be subject to determination and approval by our Board of Directors.

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Liquidity Outlook

The accompanying financial statement have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. We anticipate we will continue to experience periodic constraints on our liquidity as a result of the cash flow requirements of specific projects through the third quarter 2023, and we are taking steps expected to strengthen operating results in order to improve our liquidity. Such constraints on our liquidity negatively affected our ability to remain in compliance with our debt covenants, and, accordingly, in August 2022, we entered the Term Loan Amendment and the Revolving Credit Amendment to revise certain terms contained in the Term Loan Agreement and the Revolving Credit Agreement, respectively, including, among other things, certain relevant financial covenants. Effective as of June 30, 2022, the Term Loan Amendment, among other things, amended and increased the Total Leverage Ratio (as defined in the Term Loan Agreement) for certain periods and amended the calculation of Consolidated EBITDA (as defined in the Term Loan Agreement) to include (or “add back”) certain non-recurring losses and expenses relating to projects executed in Jacksonville, Florida, one-time costs and expenses incurred in connection with the Company’s transmission and distribution business unit start-up, and costs and expenses arising out of the Company’s litigation with a designated former executive and his employer (in each case, subject to certain specified dollar limits). The Revolving Credit Amendment, among other things, amended the calculation of EBITDA (as defined in the Revolving Credit Agreement), effective as of June 30, 2022, to include (or “add back”) certain non-recurring losses and expenses relating to projects executed in Jacksonville, Florida, one-time costs and expenses incurred in connection with the Company’s transmission and distribution business unit start-up, and costs and expenses arising out of the Company’s litigation with a designated former executive and his employer (in each case, subject to certain specified dollar limits) and permitted advances against certain eligible receivables of one of the Company’s joint ventures (also subject to specified dollar limits). We expect to maintain sufficient liquidity by managing our expenses and borrowing and repayments of our Revolving Credit Facility, as well as through implementing our liquidity plan. For additional information about our liquidity plan, please refer to “Note 2—Liquidity” to the unaudited condensed consolidated financial statements included in this Form 10-Q.

During the third and fourth quarter of 2022, the Company settled two legal claims that impacted liquidity. The first involved a cash collection in the third quarter of 2022 of an approximately $8.1 million settlement related to an arbitration proceeding against a third party in connection with the restatement of our financial statement in 2017 for the 2012 to 2014 period, which was used to partially prepay our Term Loan. The second, settled in the fourth quarter of 2022, involved litigation against a former executive and his employer that resulted with the former executive and his employer agreeing to a cash settlement of $2.7 million. The Company recognized the settlement as other income during the third quarter of 2022 and collected the $2.7 million cash settlement on October 13, 2022. The $2.7 million settlement was used to pay a portion of the Revolving Credit Facility in the fourth quarter of 2022. For additional information about the arbitration and legal settlements, please refer to “Note 9—Debt” and “Note 14—Subsequent Events” to the unaudited condensed consolidated financial statements included in this Form 10-Q.

Our continuation as a going concern is dependent upon the Company’s ability to successfully implement its liquidity plan and obtain necessary debt or equity financing to continue operations until we return to generating positive cash flow. A high percentage of our cost of service comes from weekly craft labor payrolls, and the lag between incurrence of those payrolls and the subsequent collection of customer billings results in negative cash flows for that time period. Although we utilize the Revolving Credit Facility to address those time period negative cash flows, contract terms restricting customer invoicing frequency, delays in customer payments, and underlying surety bonds negatively impact our available borrowing base. Although these factors, among others, raise substantial doubt about our ability to continue as a going concern, we believe that we have sufficient resources to satisfy our working capital requirements through the next 12 months and our long-term liquidity needs and foreseeable material cash requirements, as we strategically use our $30.0 million borrowing availability under our Revolving Credit Facility and implement our liquidity plan. A variety of factors can affect our short- and long-term liquidity, which impact could be material, including, but not limited to: cash for operations; matters relating to our contracts, including contracts billed based on milestones that may require us to incur significant expenditures prior to collections from our customers and others that allow for significant upfront billing at the beginning of a project, which temporarily increases liquidity in the near term; the outcome of potential contract disputes, which may be significant; payment collection issues, including those caused by economic slowdowns or other factors which can lead to credit deterioration of our customers; required payments on the Term Loan and the Revolving Credit Facility and on our operating and finance leases; pension obligations requiring annual contributions to multiemployer pension plans; insurance coverage for contracts that require us to indemnify third parties; and issuances of letters of credit. We believe that, in conjunction with executing our liquidity plan, we have adequate sources of liquidity to meet our long-term liquidity needs of developing key management and craft personnel, enhancing our services to meet new opportunities and obtaining the amount of capital needed to drive our long-term growth initiatives of attracting new customers and expanding our market reach. In the event that we are unable to address any potential liquidity shortfalls that may arise in the future, management will need to seek additional funding, which may not be available on reasonable terms, if at all.

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While management believes its liquidity plan alleviates the substantial doubt regarding the Company’s ability to continue as a going concern during the ensuing twelve-month period, the Company cannot provide any assurance that it will be able to implement its liquidity plan successfully or, even if successfully implemented, that the plan will ultimately result in the Company continuing as a going concern. In addition, the Company could be unable to meet its obligations under its existing indebtedness, including failing to comply with any of its covenants. If any such failures are not waived by the Company’s lenders, it would result in an event of default under such indebtedness and the potential acceleration of outstanding indebtedness thereunder and the potential foreclosure on the collateral securing such debt, and would likely cause a cross-default under the Company’s other outstanding indebtedness. If the liquidity plan does not have the intended effect, the Company may need to seek relief from the Company’s lenders or take steps to raise additional capital, such as selling equity or debt securities or entering into additional borrowing arrangements, to sustain operations, which may not be available on favorable terms, or at all, in which case the Company will be required to pursue other alternatives, which may include selling assets, selling or merging its business, ceasing operations or filing a petition for bankruptcy (either liquidation or reorganization) under applicable bankruptcy laws.

While we do not expect the COVID-19 pandemic to materially adversely affect us, we currently cannot predict the ultimate impact of the COVID-19 pandemic on our business, results of operations, financial condition and cash flows, or on our customers, as such impact is dependent on future developments, including the duration and severity of the pandemic and the related length of its impact on the global economy. Management will continue to closely monitor conditions using the data available and will draw on the expertise of health officials. Any recovery from the COVID-19 pandemic and related economic impact may be slowed or reversed by a number of factors, including the continued sporadic outbreaks of COVID-19 cases, the ongoing spread of new COVID-19 variants and the impact of COVID-19 vaccines and treatments, and even after the COVID-19 pandemic has subsided, we may continue to experience an adverse impact to our business as a result of the pandemic’s global economic impact.

Off-Balance Sheet Transactions

Our liquidity is currently not dependent on the use of off-balance sheet transactions but, in line with industry practice, we are often required to provide payment and performance surety bonds to customers and may be required to provide letters of credit. If performance assurances are extended to customers, generally our maximum potential exposure is limited in the contract with our customers. We frequently obtain similar performance assurances from third-party vendors and subcontractors for work performed in the ordinary course of contract execution. However, the total costs of a project could exceed our original cost estimates, and we could experience reduced gross profit or possibly a loss for a given project. In some cases, if we fail to meet certain performance standards, we may be subject to contractual liquidated damages.

As of September 30, 2022, we had a contingent liability for issued and outstanding standby letters of credit, generally issued to secure performance on customer contracts. As of September 30, 2022, we had $0.5 million outstanding letters of credit under the Revolving Credit Facility sublimit and $0.4 million of outstanding cash collateralized standby letters of credit pursuant to a prior revolving credit facility with Wells Fargo Bank, National Association, and there were no amounts drawn upon these letters of credit. In addition, as of September 30, 2022, we had outstanding surety bonds of $65.6 million. Our subsidiaries also provide financial guarantees for certain contractual obligations in the ordinary course of business.

Critical Accounting Policies and Use of Estimates

There have been no material changes to our critical accounting policies as set forth in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in our 2021 Report.

Item 3.     Quantitative and Qualitative Disclosures About Market Risk.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are not required to provide the information required under this item.

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Item 4.     Controls and Procedures.

Disclosure controls and procedures are those controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. The Company’s management, under the supervision of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this Form 10-Q. Solely as a result of the material weaknesses described below, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2022, our disclosure controls and procedures were not effective. However, our management, including our Chief Executive Officer and Chief Financial Officer, has concluded that, notwithstanding the identified material weaknesses in our internal control over financial reporting, the financial statements in this Form 10-Q fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented in conformity with U.S. GAAP.

Material Weakness in Internal Control Over Financial Reporting

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.  As previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021, we identified a material weakness in our internal control over financial reporting. We have determined that we did not design and maintain effective user access controls to adequately restrict user access and the ability to modify financial data within certain financial applications, including ensuring appropriate segregation of duties relating to the preparation and review of journal entries in these financial applications. As part of closing our books for the second quarter of 2022, we identified immaterial errors that indicated an additional deficiency existed in the Company’s internal control over financial reporting. Specifically, we did not have controls designed effectively for the secondary review and approval of certain expenses. The foregoing control deficiencies did not result in a misstatement of the Company’s annual or interim consolidated financial statements. However, these control deficiencies could have resulted in misstatements of interim or annual consolidated financial statements and disclosures that may have been material. Therefore, management has concluded that: (1) each of the above control deficiencies constitutes a material weakness; and (2) in turn, the Company did not maintain effective internal control over financial reporting as of September 30, 2022.

Management’s Plan to Remediate the Material Weakness

Management has evaluated the user access controls material weakness described above and is in the process of updating its design and implementation of internal control over financial reporting to remediate that material weakness and enhance the Company’s internal control environment. However, the implemented and enhanced controls have not operated for a sufficient period of time to demonstrate that the material weakness was remediated as of September 30, 2022. Having identified the material weakness relating to the secondary review and approval of certain expenses described above, we will promptly be initiating a review and process to remediate such deficiency. We are committed to continuing to improve our internal control processes and will continue to diligently and vigorously review our financial reporting controls and procedures.

Changes in Internal Control over Financial Reporting

Under the applicable SEC rules, management is required to evaluate any changes in internal control over financial reporting that occurred during each fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other than the changes described above regarding enhancements associated with ongoing remediation efforts, there were no changes in our internal control over financial reporting during the period covered by this Quarterly Report on Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

In addition, we are engaged in a transformation project to upgrade our ERP system to a cloud-based platform to increase efficiency, provide additional process capabilities and enhance information security.

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Part II—OTHER INFORMATION

Item 1. Legal Proceedings.

The information included under “Litigation and Claims” in “Note 11—Commitments and Contingencies” to the unaudited condensed consolidated financial statements in this Form 10-Q is incorporated by reference into this Item.

Item 1A. Risk Factors.

Our business faces significant risks and uncertainties. Certain important factors may have a material adverse effect on our business prospects, financial condition, and results of operations, and you should carefully consider them. There have not been any material changes to our risk factors from those reported in our 2021 Report, except as set forth below.

Our ability to continue to operate as a going concern depends on our ability to successfully implement our liquidity plan and, if necessary, raise additional capital in the future.

Our ability to continue as a going concern is dependent on our ability to successfully implement our liquidity plan, as further described in “Note 2—Liquidity” to the unaudited condensed consolidated financial statements included in this Form 10-Q. While management believes its liquidity plan alleviates the substantial doubt regarding the Company’s ability to continue as a going concern during the ensuing twelve-month period, the Company cannot provide any assurance that it will be able to implement its liquidity plan successfully or, even if successfully implemented, that the plan will ultimately result in the Company continuing as a going concern. In addition, the Company could be unable to meet its obligations under its existing indebtedness, including failing to comply with any of its covenants. If any such failures are not waived by the Company’s lenders, it would result in an event of default under such indebtedness and the potential acceleration of outstanding indebtedness thereunder and the potential foreclosure on the collateral securing such debt, and would likely cause a cross-default under the Company’s other outstanding indebtedness.

If the liquidity plan does not have the intended effect, the Company may need to seek relief from the Company’s lenders or take steps to raise additional capital, such as selling equity or debt securities or entering into additional borrowing arrangements, to sustain operations, which may not be available on favorable terms, or at all, in which case the Company will be required to pursue other alternatives, which may include selling assets, selling or merging its business, ceasing operations or filing a petition for bankruptcy (either liquidation or reorganization) under applicable bankruptcy laws.

To the extent we cannot alleviate the substantial doubt about our ability to continue as a going concern, it may also have the effect of heightening many of the other risks set forth in Item 1A “Risk Factors” 2021 Report.

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Item 6. Exhibits.

Exhibit	Description
10.1	First Amendment to Term Loan, Guarantee and Security Agreement, dated as of June 30, 2022, by and among Williams Industrial Services Group Inc., Williams Industrial Services Group, L.L.C., Williams Industrial Services, LLC, Williams Specialty Services, LLC, Williams Plant Services, LLC, Williams Global Services, Inc., and Construction & Maintenance Professionals, LLC, as borrowers, Global Power Professional Services Inc., GPEG, LLC, Steam Enterprises LLC, WISG Canada Ltd., WISG Nuclear Ltd., and WISG Electrical Ltd., as guarantors, and EICF Agent LLC, as agent, and the lenders party thereto (filed as Exhibit 10.2 to our Form 10-Q filed with the SEC on August 11, 2022 and incorporated herein by reference).
10.2*	First Amendment to Revolving Credit and Security Agreement, dated as of August 3, 2022, by and among Williams Industrial Services Group Inc., Williams Industrial Services Group, L.L.C., Williams Industrial Services, LLC, Williams Specialty Services, LLC, Williams Plant Services, LLC, Williams Global Services, Inc., and Construction & Maintenance Professionals, LLC, as borrowers, Global Power Professional Services Inc., GPEG, LLC, Steam Enterprises LLC, WISG Canada Ltd., WISG Nuclear Ltd. and WISG Electrical Ltd., as guarantors, and PNC Bank, National Association, as agent, and the lenders party thereto (filed as Exhibit 10.3 to our Form 10-Q filed with the SEC on August 11, 2022 and incorporated herein by reference).
10.3*	Second Amendment, Joinder and Waiver to Revolving Credit and Security Agreement, dated as of October 7, 2022, by and among Williams Industrial Services Group Inc., Williams Industrial Services Group, L.L.C., Williams Industrial Services, LLC, Williams Specialty Services, LLC, Williams Plant Services, LLC, Williams Global Services, Inc., Construction & Maintenance Professionals, LLC, and WISG Electrical, LLC, as borrowers, Global Power Professional Services Inc., GPEG, LLC, Steam Enterprises LLC, WISG Canada Ltd., WISG Nuclear Ltd. and WISG Electrical Ltd., as guarantors, and PNC Bank, National Association, as agent, and the lenders party thereto.♦
31.1	Certification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.♦
31.2	Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.♦
32.1	Certification by the Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
32.2	Certification by the Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
101	The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended  September 30, 2022, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets; (ii) Condensed Consolidated Statements of Operations; (iii) Condensed Consolidated Statements of Comprehensive Income (Loss); (iv) Condensed Consolidated Statements of Stockholders’ Equity; (v) Condensed Consolidated Statements of Cash Flows; and (vi) Notes to Condensed Consolidated Financial Statements.♦
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).♦

♦ Filed herewith.

* Certain schedules and exhibits to this agreement have been omitted pursuant to Item 601(a)(5) of Registration S-K. A copy of any omitted schedule and/or exhibit will be furnished supplementally to the SEC upon request.

37

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	WILLIAMS INDUSTRIAL SERVICES GROUP INC.
Date: November 14, 2022	By:	/s/ Damien A. Vassall
		Damien A. Vassall
		Vice President, Chief Financial Officer (Duly authorized officer and principal financial and accounting officer of the registrant)

38

EX-10.3

Exhibit 10.3

SECOND AMENDMENT, JOINDER AND WAIVER

TO REVOLVING CREDIT AND SECURITY AGREEMENT

This Second Amendment, Joinder and Waiver to Revolving Credit and Security Agreement (this “Amendment”) dated as of October 7, 2022 by and among WILLIAMS INDUSTRIAL SERVICES GROUP INC., a Delaware corporation (“Holdings”), WILLIAMS INDUSTRIAL SERVICES GROUP, L.L.C., a Delaware limited liability company (“WISG”), WILLIAMS INDUSTRIAL SERVICES, LLC, a Georgia limited liability company (“WISI”), WILLIAMS SPECIALTY SERVICES, LLC, a Georgia limited liability company (“WSS”), WILLIAMS PLANT SERVICES, LLC, a Georgia limited liability company (“WPS”), WILLIAMS GLOBAL SERVICES, INC., a Georgia corporation (“Global”), CONSTRUCTION & MAINTENANCE PROFESSIONALS, LLC, a Georgia limited liability company (“Construction”, and together with Holdings, WISG, WISI, WSS, WPS and Global, collectively the “Existing Borrowers” and each individually an “Existing Borrower”), WISG ELECTRICAL, LLC, a New York limited liability company (“Joining Borrower”, and together with the Existing Borrowers, collectively the “Borrowers” and each individually a “Borrower”), GLOBAL POWER PROFESSIONAL SERVICES INC. a Delaware corporation (“Power”), GPEG, LLC, a Delaware limited liability company (“GPEG”), STEAM ENTERPRISES LLC, a Delaware limited liability company (“Steam”), WISG CANADA LTD., a limited company formed in the province of British Columbia, Canada (“WISG Canada”), WISG NUCLEAR LTD., a limited company formed in the province of British Columbia, Canada (“WISG Nuclear”), WISG ELECTRICAL LTD., a limited company formed in the province of British Columbia, Canada (“WISG Electrical”, and together with Power, GPEG, Steam, WISG Canada and WISG Nuclear, collectively, the “Guarantors” and together with the Borrowers, collectively, the “Loan Parties” and each individually a “Loan Party”), the financial institutions set forth on the signature pages hereto (collectively, the “Lenders” and each individually a “Lender”) and PNC BANK, NATIONAL ASSOCIATION (“PNC”), as agent for Lenders (PNC, in such capacity, the “Agent”).

BACKGROUND

A.The Existing Borrowers, Guarantors, Agent and Lenders entered into that certain Revolving Credit and Security Agreement dated as of December 16, 2020 (as the same has been and/or may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), pursuant to which Agent and Lenders established certain financing arrangements with the Loan Parties.  Capitalized terms used herein but not specifically defined herein shall have the respective meanings ascribed to them in the Credit Agreement.

B.On August 16, 2022, WISG formed Joining Borrower as its new wholly-owned Subsidiary.

C.An Event of Default has occurred and is continuing under Section 10.5 of the Credit Agreement for failure of the Loan Parties to provide at least thirty (30) days’ prior written notice of the formation of Joining Borrower as required by Section 7.12 of the Credit Agreement (the “Existing Default”).

D.Pursuant to Section 7.12 of the Credit Agreement, any new Subsidiary shall be

1

joined to the Credit Agreement as a Loan Party if required by Agent. Agent requires the Joining Borrower to become a Loan Party on the terms and conditions set forth herein.

E.The Loan Parties have requested that Agent and Lenders (a) waive the Existing Default, and (b) make certain amendments to the Credit Agreement, and Agent and Lenders have agreed to such requests on the terms and conditions set forth herein.

TERMS AND CONDITIONS

NOW, THEREFORE, with the foregoing Background incorporated by reference and made a part hereof and intending to be legally bound, the parties agree as follows:

1.Waiver. Upon the Effective Date (defined below), Agent and Lenders hereby waive the Existing Default, provided, however, that such waiver shall in no way constitute a waiver of any other Defaults or Events of Default which may have occurred but which are not specifically referenced as the “Existing Default,” nor shall this waiver obligate Agent or Lenders to provide any further waiver of any other Default or Event of Default (whether similar or dissimilar). Other than in respect of the Existing Default, this waiver shall not preclude the future exercise of any right, power, or privilege available to Agent or Lenders whether under the Credit Agreement, the Other Documents or otherwise.

2.Joinder.  Upon the Effective Date:

a.Joining Borrower hereby joins in as, assumes and adopts and agrees to bebound by the role, duties, obligations, indebtedness, liabilities, covenants and undertakings of, and becomes, a Borrower under the Credit Agreement and the Other Documents, and Joining Borrower also hereby agrees to comply with all of the terms and conditions of, and covenants and undertakings of the Borrowers under, the Credit Agreement and the Other Documents. All references to a “Borrower” or the “Borrowers” and/or to any “Loan Party” or the “Loan Parties” contained in the Credit Agreement and the Other Documents are hereby deemed for all purposes to also refer to and include Joining Borrower as a Borrower and/or a Loan Party, and Joining Borrower hereby agrees to comply with all terms and conditions of the Credit Agreement and the Other Documents, in each case, applicable to a Loan Party, as if Joining Borrower were an original signatory thereto.

b.Without limiting the generality of the above Section 2(a), Joining Borrower hereby becomes liable as a Borrower on a joint and several basis, along with all other Borrowers, for all Advances made by Lenders under the Credit Agreement and the Other Documents and all other Obligations under the Credit Agreement and the Other Documents.

c.To secure the prompt payment and performance to Agent and Lenders (and each other holder of any Obligations) of the Obligations:

i.Joining Borrower hereby assigns, pledges and grants to Agent for its benefit and for the ratable benefit of each Lender and each other Secured Party, a continuing security interest in and to and Lien on all of its Collateral, whether now owned or existing or hereafter created, acquired or arising and wheresoever located; and

2

ii.Schedule I to the Pledge Agreement is hereby amended and restated with the Schedule I set forth on Annex A to this Amendment, and, in accordance with and as more fully described in the Pledge Agreement, WISG hereby grants to Agent, for the ratable benefit of Agent and Lenders and all other holders of the Obligations, a continuing Lien on and security interest in all of the Pledged Collateral (as defined in the Pledge Agreement) issued to it by Joining Borrower.

3.Amendments to Credit Agreement.  Upon the Effective Date:

a.The following definition is added to Section 1.1 of the Credit Agreement in its correct alphabetical order:

“Second Amendment Effective Date” shall mean October 6, 2022.

b.The words “Closing Date” set forth in Sections 4.4(b), 4.8(j), 5.1 (solely with respect to Joining Borrower), 5.18 (solely with respect to the Joining Borrower), 5.21 and 5.23 of the Credit Agreement are hereby replaced with the words “Second Amendment Effective Date”.

c.Section 6.16(e) of the Credit Agreement shall be amended and restated as follows:

(e)On and after the Closing Date, continue to use commercially reasonable efforts to complete the dissolution of Braden and Braden Mexico and within three (3) Business Days of such dissolution provide evidence to Agent that Braden and Braden Mexico have been dissolved.

d.The schedules to the Credit Agreement shall be amended and restated as set forth on Annex B to this Amendment, which such amended and restated schedules shall include updated information with respect to each Existing Borrower and Guarantors and information with respect to Joining Borrower, in each case after giving effect to this Amendment on any such applicable schedule.

4.Effectiveness Conditions. This Amendment shall become effective on the first date that all of the following conditions have been fully satisfied by the Loan Parties in form and substance reasonably satisfactory to Agent or waived by Agent in writing (such date, the “Effective Date”):

a.Execution and delivery of this Amendment by each party hereto;

b.Agent shall have received an Amended and Restated Revolving Credit Note in the amount of $30,000,000, executed by Borrowers in favor of PNC;

c.Agent shall have received an Amended and Restated Swing Loan Note in the amount of $3,000,000, executed by Borrowers in favor of PNC;

3

d.Agent shall have received final executed copies of the joinder to the EICF/CION Term Loan Documents (the “EICF/CION Term Loan Amendment”);

e.Agent shall have received a certificate of the Secretary or Assistant Secretary (or other equivalent officer or manager) of Joining Borrower, dated as of the Effective Date which shall certify (i) copies of resolutions of the board of directors (or other equivalent governing body or member) of Joining Borrower authorizing (x) the execution, delivery and performance of this Amendment, the Credit Agreement and the Other Documents to which Joining Borrower is a party (including authorization of the incurrence of Indebtedness, borrowing of Advances and requesting of Letters of Credit on a joint and several basis with all Loan Parties as provided for herein and in the Credit Agreement), and (y) the granting by Joining Borrower of the Liens upon the Collateral to secure all of the joint and several Obligations of the Loan Parties (and such certificate shall state that such resolutions have not been amended, modified, revoked or rescinded as of the date of such certificate), (ii) the incumbency and signature of the officers of Joining Borrower authorized to execute this Amendment and the Other Documents, (iii) copies of the Organizational Documents of Joining Borrower as in effect on such date, complete with all amendments thereto, and (iv) the good standing (or equivalent status) of Joining Borrower in its jurisdiction of organization and each applicable jurisdiction where the conduct of Joining Borrower’s business activities or the ownership of its properties necessitates qualification and where the failure to so qualify could reasonably be expected to have a Material Adverse Effect on Joining Borrower, as evidenced by good standing certificates (or the equivalent thereof issued by any applicable jurisdiction) dated not more than thirty (30) days prior to the Effective Date, issued by the Secretary of State or other appropriate official of each such jurisdiction;

f.Agent shall have received the executed legal opinion of Thompson Hine LLP which shall cover such matters incident to this Amendment as Agent may reasonably require and each Loan Party hereby authorizes and directs such counsel to deliver such opinions to Agent and Lenders;

g.Since December 31, 2021, there shall not have occurred any Material Adverse Effect; and

h.Other than the Existing Default, no Event of Default shall have occurred or

be continuing.

5.Conditions Subsequent.  Within thirty (30) days after the Effective Date (or such later date as Agent shall agree to in its reasonable discretion), Agent shall have received (i) evidence that adequate insurance, including without limitation, casualty and liability insurance, required to be maintained under the Credit Agreement is in full force and effect with respect to Joining Borrower, and (ii) insurance certificates issued by the Loan Parties’ insurance broker containing such information regarding Joining Borrower’s casualty and liability insurance policies naming Agent as an additional insured and lenders loss payee, as applicable.

6.Representations, Warranties and Reaffirmation.  Each Loan Party hereby:

4

a.reaffirms all representations and warranties made to Agent and Lenders under the Credit Agreement and all of the Other Documents and confirms that, after giving effect to this Amendment, all such representations and warranties are true and correct in all material respects as of the date hereof (except to the extent any such representations and warranties specifically relate to a specific date, in which case such representations and warranties were true and correct in all material respects on and as of such other specific date);

b.reaffirms all of the covenants contained in the Credit Agreement and all of the Other Documents;

c.represents and warrants to the Agent and the Lenders that, other than the Existing Default, no Default or Event of Default has occurred and is continuing under the Credit Agreement or any of the Other Documents or would exist after giving effect to this Amendment, the EICF/CION Term Loan Amendment and the transactions contemplated hereby and thereby;

d.represents and warrants that such Loan Party has the requisite authority and legal right to execute, deliver and perform its obligations under this Amendment and the other documents to be executed by it in connection herewith (this Amendment and such other documents, collectively, the “Amendment Documents”), that such actions were duly authorized by all necessary limited liability company or corporate action of such Loan Party, as applicable, and that the officers executing the Amendment Documents on such Loan Party’s behalf were similarly authorized and empowered, and that the Amendment Documents do not contravene any provisions of such Loan Party’s certificate of incorporation or formation, operating agreement, bylaws, or other formation documents, as applicable, or of any Material Contract to which it is a party or by which any of its properties are bound; and

e.represents and warrants that each Amendment Document is valid, binding and enforceable in accordance with their respective terms, except as such enforceability may be limited by any applicable bankruptcy, insolvency, moratorium or similar laws affecting creditors’ rights generally.

7.Payment of Expenses.  The Loan Parties shall pay or reimburse Agent and Lenders for its/their reasonable out-of-pocket attorneys’ fees and expenses in connection with the preparation, negotiation and execution of this Amendment in accordance with Section 16.9 of the Credit Agreement.

8.Reaffirmation of Credit Agreement.  Except as modified by the terms hereof, all of the terms and conditions of the Credit Agreement and all of the Other Documents (i) are hereby reaffirmed and (ii) shall continue in full force and effect as therein written.

9.Miscellaneous.

a.Third Party Rights.  No rights are intended to be created hereunder for the benefit of any third party donee, creditor, or incidental beneficiary.

5

b.Other Document.  This Amendment is an “Other Document” as defined in the Credit Agreement and all of the terms and provisions of the Credit Agreement relating to Other Documents shall apply hereto.

c.Captions.  The captions at various places in this Amendment are intended for convenience only and do not constitute and shall not be interpreted as part of this Amendment.

d.Governing Law.  This Amendment and all matters relating hereto or arising herefrom (whether arising under contract law, tort law or otherwise) shall be governed by and construed in accordance with the laws of the State of New York.

e.Severability.  If any part of this Amendment is contrary to, prohibited by, or deemed invalid under Applicable Laws, such provision shall be inapplicable and deemed omitted to the extent so contrary, prohibited or invalid, but the remainder hereof shall not be invalidated thereby and shall be given effect so far as possible.

f.Counterparts.  This Amendment may be executed in any number of and by different parties hereto on separate counterparts, all of which, when so executed, shall be deemed an original, but all such counterparts shall constitute one and the same agreement.  Any signature delivered by a party by facsimile or electronic transmission (including email transmission of a PDF image) shall be deemed to be an original signature hereto.

g.Successors and Assigns.  This Amendment shall be binding upon and inure to the benefit of the parties hereto and its respective successors and assigns.

h.Modifications. No modification hereof or any agreement referred to herein shall be binding or enforceable unless in writing and signed on behalf of the party against whom enforcement is sought.

[Signature Pages Follow]

6

IN WITNESS WHEREOF, each of the parties has signed this Amendment as of the day and year first above written.

EXISTING BORROWERS:	WILLIAMS INDUSTRIAL SERVICES GROUP INC.
	By:
	Name:		Charles E. Wheelock
	Title:		Senior Vice President
	WILLIAMS INDUSTRIAL SERVICES GROUP, L.L.C.
	WILLIAMS GLOBAL SERVICES, INC.
	CONSTRUCTION & MAINTENANCEPROFESSIONALS, LLC
	By:
	Name:			Charles E. Wheelock
	Title:			Secretary
	WILLIAMS INDUSTRIAL SERVICES, LLC
	WILLIAMS SPECIALTY SERVICES, LLC
	WILLIAMS PLANT SERVICES, LLC
	By:
	Name:				Charles E. Wheelock
	Title:				Assistant Secretary
JOINING BORROWER:	WISG ELECTRICAL, LLC
	By:
	Name:	Charles E. Wheelock
	Title:	Secretary

Signature Page to Second Amendment, Joinder and Waiverto Revolving Credit and Security Agreement

GUARANTORS:	WISG CANADA LTD.
	By:
	Name:	Charles E. Wheelock
	Title:	Secretary
	WISG NUCLEAR LTD.
	WISG ELECTRICAL LTD.
	By:
	Name:	Damien A. Vassall
	Title:	Chief Financial Officer
	GLOBAL POWER PROFESSIONAL SERVICES INC.
	STEAM ENTERPRISES LLC
	By:
	Name:		Charles E. Wheelock
	Title:		President
	GPEG, LLC
	By:
	Name:			Charles E. Wheelock
	Title:			Vice President

Signature Page to Second Amendment, Joinder and Waiverto Revolving Credit and Security Agreement

GUARANTORS:	WISG CANADA LTD.
	By:
	Name:	Charles E. Wheelock
	Title:	Secretary
	WISG NUCLEAR LTD.
	WISG ELECTRICAL LTD.
	By:
	Name:	Damien A. Vassall
	Title:	Chief Financial Officer
	GLOBAL POWER PROFESSIONAL SERVICES INC.
	STEAM ENTERPRISES LLC
	By:
	Name:		Charles E. Wheelock
	Title:		President
	GPEG, LLC
	By:
	Name:			Charles E. Wheelock
	Title:			Vice President

Signature Page to Second Amendment, Joinder and Waiverto Revolving Credit and Security Agreement

AGENT AND LENDER:	PNC BANK, NATIONAL ASSOCIATION
	By:
	Name:	Ryan Begley
	Title:	Vice President

Signature Page to Second Amendment, Joinder and Waiverto Revolving Credit and Security Agreement

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Tracy D. Pagliara, certify that:

1.           I have reviewed this quarterly report on Form 10-Q of Williams Industrial Services Group Inc.;

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)          Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)          Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)          Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)          Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.           The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)          All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)          Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. 

Date: November 14, 2022	By:	/s/ Tracy D. Pagliara
		Tracy D. Pagliara
		President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Damien A. Vassall, certify that:

1.           I have reviewed this quarterly report on Form 10-Q of Williams Industrial Services Group Inc.;

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)          Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)          Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)          Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)          Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.           The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)          All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)          Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. 

Date: November 14, 2022	By:	/s/ Damien A. Vassall
		Damien A. Vassall
		Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Tracy D. Pagliara, the President and Chief Executive Officer of Williams Industrial Services Group Inc. (the “Company”), hereby certify, that, to my knowledge:

1.      The Quarterly Report on Form 10-Q for the period ended September 30, 2022 (the “Report”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.      The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 14, 2022	By:	/s/ Tracy D. Pagliara
		Tracy D. Pagliara
		President and Chief Executive Officer

A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Damien A. Vassall, the Vice President and Chief Financial Officer of Williams Industrial Services Group Inc. (the “Company”), hereby certify, that, to my knowledge:

1.      The Quarterly Report on Form 10-Q for the period ended September 30, 2022 (the “Report”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.      The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 14, 2022	By:	/s/ Damien A. Vassall
		Damien A. Vassall
		Vice President and Chief Financial Officer

A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2022	Nov. 07, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
Document Transition Report	false
Entity File Number	001-16501
Entity Registrant Name	Williams Industrial Services Group Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	73-1541378
Entity Address, Address Line One	200 Ashford Center North
Entity Address, Address Line Two	Suite 425
Entity Address, City or Town	Atlanta
Entity Address, State or Province	GA
Entity Address, Postal Zip Code	30338
City Area Code	770
Local Phone Number	879-4400
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	WLMS
Security Exchange Name	NYSEAMER
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		26,422,761
Entity Central Index Key	0001136294
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 1,013	$ 2,482
Restricted cash	468	468
Accounts receivable, net of allowance of $318 and $427, respectively	37,339	35,204
Contract assets	10,076	12,683
Other current assets	10,675	11,049
Total current assets	59,571	61,886
Property, plant, and equipment, net	1,016	653
Goodwill	35,400	35,400
Intangible assets	12,500	12,500
Other long-term assets	7,732	5,712
Total assets	116,219	116,151
Current liabilities:
Accounts payable	11,732	12,168
Accrued compensation and benefits	14,312	12,388
Contract liabilities	3,440	3,412
Short-term borrowings	14,525	676
Current portion of long-term debt	1,050	1,050
Other current liabilities	4,630	11,017
Current liabilities of discontinued operations	106	316
Total current liabilities	49,795	41,027
Long-term debt, net (Note 9)	21,809	30,328
Deferred tax liabilities	2,263	2,442
Other long-term liabilities	4,440	1,647
Long-term liabilities of discontinued operations	3,513	4,250
Total liabilities	81,820	79,694
Commitments and contingencies (Note 11)
Stockholders' equity:
Common stock, $0.01 par value, 170,000,000 shares authorized and 26,865,064 and 26,408,789 shares issued, respectively, and 26,422,761 and 25,939,621 shares outstanding, respectively	264	261
Paid-in capital	93,705	92,227
Accumulated other comprehensive loss	(440)	(95)
Accumulated deficit	(59,124)	(55,930)
Treasury stock, at par (442,303 and 469,168 common shares, respectively)	(6)	(6)
Total stockholders' equity	34,399	36,457
Total liabilities and stockholders' equity	$ 116,219	$ 116,151

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021	Sep. 30, 2021
CONDENSED CONSOLIDATED BALANCE SHEETS
Accounts receivable allowance for doubtful accounts	$ 318	$ 427
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01	$ 0.01
Common stock, shares authorized	170,000,000	170,000,000
Common stock, shares issued	26,865,064	26,408,789
Common stock, shares outstanding	26,422,761	25,939,621	25,915,502
Treasury stock at par	442,303	469,168

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Revenue	$ 56,685	$ 73,351	$ 182,303	$ 225,773
Cost of revenue	55,936	66,590	173,564	203,561
Gross profit	749	6,761	8,739	22,212
Operating expenses
Selling and marketing expenses	322	267	1,054	709
General and administrative expenses	6,657	4,248	19,022	16,931
Depreciation and amortization expense	61	50	173	137
Total operating expenses	7,040	4,565	20,249	17,777
Operating income (loss)	(6,291)	2,196	(11,510)	4,435
Interest expense, net
Interest expense, net	1,485	1,227	3,965	3,733
Other (income) expense, net	(11,114)	181	(11,533)	(1,411)
Total other (income) expense, net	(9,629)	1,408	(7,568)	2,322
Income (loss) from continuing operations before income tax	3,338	788	(3,942)	2,113
Income tax expense (benefit)	(272)	(6)	(214)	256
Income (loss) from continuing operations	3,610	794	(3,728)	1,857
Discontinued operations:
Income (loss) from discontinued operations before income tax	(45)	(34)	(92)	130
Income tax expense (benefit)	(3)	22	(626)	59
Income (loss) from discontinued operations	(42)	(56)	534	71
Net income (loss)	$ 3,568	$ 738	$ (3,194)	$ 1,928
Basic income (loss) per common share
Income (loss) from continuing operations	$ 0.14	$ 0.03	$ (0.14)	$ 0.07
Income (loss) from discontinued operations		0.00	0.02	0.00
Basic income (loss) per common share	0.14	0.03	(0.12)	0.07
Diluted income (loss) per common share
Income (loss) from continuing operations	0.14	0.03	(0.14)	0.07
Income (loss) from discontinued operations	(0.01)	0.00	0.02	0.00
Diluted income (loss) per common share	$ 0.13	$ 0.03	$ (0.12)	$ 0.07

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Net income (loss)	$ 3,568	$ 738	$ (3,194)	$ 1,928
Foreign currency translation adjustment	(318)	(98)	(345)	(64)
Comprehensive income (loss)	$ 3,250	$ 640	$ (3,539)	$ 1,864

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Shares $0.01 Per Share	Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit	Treasury Shares	Total
Balance, Beginning at Dec. 31, 2020	$ 256	$ 90,292	$ 28	$ (58,673)	$ (8)	$ 31,895
Balance, Beginning (in shares) at Dec. 31, 2020	25,926,333				(589,891)
Increase (Decrease) in Shareholders' Equity
Restricted stock awards granted (in shares)	164,388
Restricted stock units vested	$ 4				$ 2	6
Restricted stock units vested (in shares)	274,448				120,723
Tax withholding on restricted stock units		(545)				(545)
Stock-based compensation		625				625
Foreign currency translation			4			4
Net income (loss)				(1,681)		(1,681)
Balance, Ending at Mar. 31, 2021	$ 260	90,372	32	(60,354)	$ (6)	30,304
Balance, Ending (in shares) at Mar. 31, 2021	26,365,169				(469,168)
Balance, Beginning at Dec. 31, 2020	$ 256	90,292	28	(58,673)	$ (8)	31,895
Balance, Beginning (in shares) at Dec. 31, 2020	25,926,333				(589,891)
Increase (Decrease) in Shareholders' Equity
Net income (loss)						1,928
Balance, Ending at Sep. 30, 2021	$ 260	91,670	(36)	(56,745)	$ (6)	35,143
Balance, Ending (in shares) at Sep. 30, 2021	26,384,670				(469,168)
Balance, Beginning at Mar. 31, 2021	$ 260	90,372	32	(60,354)	$ (6)	30,304
Balance, Beginning (in shares) at Mar. 31, 2021	26,365,169				(469,168)
Increase (Decrease) in Shareholders' Equity
Restricted stock units vested (in shares)	19,501
Tax withholding on restricted stock units		40				40
Stock-based compensation		424				424
Foreign currency translation			30			30
Net income (loss)				2,871		2,871
Balance, Ending at Jun. 30, 2021	$ 260	90,836	62	(57,483)	$ (6)	33,669
Balance, Ending (in shares) at Jun. 30, 2021	26,384,670				(469,168)
Increase (Decrease) in Shareholders' Equity
Stock-based compensation		834				834
Foreign currency translation			(98)			(98)
Net income (loss)				738		738
Balance, Ending at Sep. 30, 2021	$ 260	91,670	(36)	(56,745)	$ (6)	35,143
Balance, Ending (in shares) at Sep. 30, 2021	26,384,670				(469,168)
Balance, Beginning at Dec. 31, 2021	$ 261	92,227	(95)	(55,930)	$ (6)	$ 36,457
Balance, Beginning (in shares) at Dec. 31, 2021	26,408,789				(469,168)	26,408,789
Increase (Decrease) in Shareholders' Equity
Restricted stock awards granted (in shares)	291,894
Stock-based compensation		(147)				$ (147)
Foreign currency translation			142			142
Net income (loss)				(2,044)		(2,044)
Balance, Ending at Mar. 31, 2022	$ 261	92,080	47	(57,974)	$ (6)	34,408
Balance, Ending (in shares) at Mar. 31, 2022	26,700,683				(469,168)
Balance, Beginning at Dec. 31, 2021	$ 261	92,227	(95)	(55,930)	$ (6)	$ 36,457
Balance, Beginning (in shares) at Dec. 31, 2021	26,408,789				(469,168)	26,408,789
Increase (Decrease) in Shareholders' Equity
Net income (loss)						$ (3,194)
Balance, Ending at Sep. 30, 2022	$ 264	93,705	(440)	(59,124)	$ (6)	$ 34,399
Balance, Ending (in shares) at Sep. 30, 2022	26,865,064				(442,303)	26,865,064
Balance, Beginning at Mar. 31, 2022	$ 261	92,080	47	(57,974)	$ (6)	$ 34,408
Balance, Beginning (in shares) at Mar. 31, 2022	26,700,683				(469,168)
Increase (Decrease) in Shareholders' Equity
Restricted stock units vested (in shares)	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 income (loss)				(4,718)		(4,718)
Balance, Ending at Jun. 30, 2022	$ 263	93,208	(122)	(62,692)	$ (6)	30,651
Balance, Ending (in shares) at Jun. 30, 2022	26,869,938				(442,303)
Increase (Decrease) in Shareholders' Equity
Restricted stock units forfeited (in shares)	(4,874)
Tax withholding on restricted stock units	$ 1	3				4
Stock-based compensation		494				494
Foreign currency translation			(318)			(318)
Net income (loss)				3,568		3,568
Balance, Ending at Sep. 30, 2022	$ 264	$ 93,705	$ (440)	$ (59,124)	$ (6)	$ 34,399
Balance, Ending (in shares) at Sep. 30, 2022	26,865,064				(442,303)	26,865,064

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Operating activities:
Net income (loss)	$ (3,194)	$ 1,928
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Net income from discontinued operations	(534)	(71)
Deferred income tax benefit	(178)	(304)
Depreciation and amortization on plant, property, and equipment	173	137
Amortization of deferred financing costs	636	623
Amortization of debt discount	150	150
Bad debt expense	(26)	(123)
Stock-based compensation	1,120	2,579
Changes in operating assets and liabilities:
Accounts receivable	(2,551)	(11,896)
Contract assets	2,547	(4,824)
Other current assets	2	(5,113)
Other assets	(2,202)	(214)
Accounts payable	(331)	2,121
Accrued and other liabilities	(692)	6,628
Contract liabilities	29	(39)
Net cash used in operating activities, continuing operations	(5,051)	(8,418)
Net cash used in operating activities, discontinued operations	(413)	(348)
Net cash used in operating activities	(5,464)	(8,766)
Investing activities:
Purchase of property, plant, and equipment	(536)	(537)
Net cash used in investing activities	(536)	(537)
Financing activities:
Repurchase of stock-based awards for payment of statutory taxes due on stock-based compensation	(159)	(501)
Debt issuance costs	(175)
Proceeds from short-term borrowings	211,875	208,421
Repayments of short-term borrowings	(198,026)	(204,101)
Repayments of long-term debt	(8,844)	(788)
Net cash provided by financing activities	4,671	3,031
Effect of exchange rate change on cash	(140)	112
Net change in cash, cash equivalents and restricted cash	(1,469)	(6,160)
Cash, cash equivalents and restricted cash, beginning of period	2,950	9,184
Cash, cash equivalents and restricted cash, end of period	1,481	3,024
Supplemental Disclosures:
Cash paid for interest	$ 2,778	2,781
Cash paid for income taxes, net of refunds		$ 1,841

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BUSINESS AND BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2022

BUSINESS AND BASIS OF PRESENTATION

BUSINESS AND BASIS OF PRESENTATION

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 (loss), 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

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LIQUIDITY

9 Months Ended

Sep. 30, 2022

LIQUIDITY

LIQUIDITY

NOTE 2—LIQUIDITY

As noted above, the accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP and on a basis consistent with the 2021 Report, which contemplates that the Company will continue to operate as a going concern, which means that it will be able to meet its obligations and continue its operations during the twelve-month period following the issuance of this Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2022 (this “Form 10-Q”).  Therefore, these financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

The Company had negative cash flows from operations during the nine months ended September 30, 2022.  These negative cash flows were primarily a consequence of the four factors described in the paragraph below.  

In connection with the preparation of the accompanying unaudited condensed consolidated financial statements, management assessed the Company’s financial condition and concluded that the following primary factors, taken in the aggregate, raised substantial doubt regarding the Company’s ability to continue as a going concern for the twelve-month period following the issuance of this Form 10-Q.

• Significant losses incurred on a number of fixed price contracts in our Florida water business, which have been the subject of prior disclosures.

• Start-up costs related to the Company’s entry into the transmission and distribution market, which have utilized cash resources and, while ultimately anticipated to benefit the Company’s business, have negatively impacted liquidity.

• Failure to convert pipeline opportunities into revenue, which have had the effect of delaying the Company’s receipt of cash from such opportunities.

• Delays in collecting cash receipts from customers.

To address the negative cash flows in the Company’s business, the Company has developed a liquidity plan, the implementation of which management believes will alleviate the substantial doubt about the Company’s ability to continue as a going concern during the twelve-month period following the issuance of this Form 10-Q.  The liquidity plan, which will continue to be refined as circumstances dictate, contemplates the following key elements, in which the Company will:

• Take steps to enhance profitability of non-performing businesses;

• Lower the cost of services by removing nonbillable expenses that cannot be recovered;

• Aggressively reduce operating expenses; and

• Shorten the collection cycle time on the Company’s accounts receivable and lengthen the payment cycle time on its accounts payable.

On August 3, 2022, as a result of the Company being unable to comply with its debt covenants as of June 30, 2022, the Company amended its existing Revolving Credit Agreement and the Term Loan Agreement (as defined below), which among other things, amended the calculation of EBITDA (as defined in the Revolving Credit Agreement), and Consolidated EBITDA (as defined in the Term Loan Agreement) to include (or “add back”) certain non-recurring losses and expenses relating to projects executed in Jacksonville, Florida, one-time costs and expenses incurred in connection with the Company’s transmission and distribution business unit start-up, and costs and expenses arising out of the Company’s litigation with a former executive and his employer (in each case, subject to certain specified dollar limits), as well as to amend and increase the Total Leverage Ratio (as defined in the Term Loan Agreement) applicable to the Company for certain periods. For additional information regarding the amendments, see “Note 9—Debt.”

While the above-mentioned factors have negatively affected the Company’s liquidity, there were two developments in the third and fourth quarter of 2022 that resulted in material cash receipts by the Company.  Specifically, the Company settled two legal claims.  The first such settlement involved a cash collection in the third quarter of 2022 of approximately $8.1 million related to an arbitration proceeding initiated by the Company against a third party in connection with the restatement of the Company’s financial statements in 2017 for the 2012 to 2014 period.  The second matter, settled in the fourth quarter of 2022, involved litigation against a former executive and his employer that resulted in the employer of the former executive agreeing to pay a cash settlement of $2.7 million.  The Company recognized both settlements as other income during the third quarter of 2022. The $8.1 million settlement proceeds were used to prepay part of the Company’s Term Loan and the $2.7 million settlement, which was collected on October 13, 2022, was used to repay a portion of the Revolving Credit Facility.  As a result, the full amount of these settlement receipts could not be used for general working capital purposes and did not materially affect the Company’s liquidity.  For additional information about the arbitration and legal settlements, please refer to “Note 9—Debt” and “Note 14—Subsequent Events” to the unaudited condensed consolidated financial statements included in this Form 10-Q.

In the first nine months of 2022, the Company’s principal sources of liquidity were borrowings under the Revolving Credit Facility and efforts to effectively manage its working capital.  The Company anticipates that this will continue to be the case in the fourth quarter of 2022, subject to the anticipated benefits of the liquidity plan outlined above.  The Company continues to monitor its liquidity and capital resources closely. If market conditions were to change, and revenue is reduced or operating costs either increased or could not be reduced as contemplated by the Company’s liquidity plan, cash flows and liquidity could be materially negatively impacted.

While management believes its liquidity plan alleviates the substantial doubt regarding the Company’s ability to continue as a going concern during the ensuing twelve-month period, the Company cannot provide any assurance that it will be able to implement its liquidity plan successfully or, even if successfully implemented, that the plan will ultimately result in the Company continuing as a going concern. In addition, the Company could be unable to meet its obligations under its existing indebtedness, including failing to comply with any of its covenants. If any such failures are not waived by the Company’s lenders, it would result in an event of default under such indebtedness and the potential acceleration of outstanding indebtedness thereunder and the potential foreclosure on the collateral securing such debt, and would likely cause a cross-default under the Company’s other outstanding indebtedness. If the liquidity plan does not have the intended effect, the Company may need to seek relief from the Company’s lenders or take steps to raise additional capital, such as selling equity or debt securities or entering into additional borrowing arrangements, to sustain operations, which may not be available on favorable terms, or at all, in which case the Company will be required to pursue other alternatives, which may include selling assets, selling or merging its business, ceasing operations or filing a petition for bankruptcy (either liquidation or reorganization) under applicable bankruptcy laws.

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RECENT ACCOUNTING PRONOUNCEMENTS

9 Months Ended

Sep. 30, 2022

RECENT ACCOUNTING PRONOUNCEMENTS

RECENT ACCOUNTING PRONOUNCEMENTS

NOTE 3—RECENT ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Pronouncements

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

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LEASES

9 Months Ended

Sep. 30, 2022

LEASES

LEASES

NOTE 4—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 $44,000 of sublease income during the nine months ended September 30, 2022.

The components of lease expense were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
Lease Cost/(Sublease Income) (in thousands)	2022		2021		2022		2021
Operating lease cost	$	549	$	619	$	1,668	$	1,711
Short-term lease cost		2,125		1,051		5,353		2,484
Sublease income		(14)		(5)		(44)		(5)
Total lease cost	$	2,660	$	1,665	$	6,977	$	4,190

Lease cost related to finance leases was not significant for the three and nine months ended September 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	September 30, 2022		December 31, 2021
Lease Assets
Right-of-use assets	Other long-term assets	$	3,738	$	1,527
Lease Liabilities
Short-term lease liabilities	Other current liabilities	$	1,572	$	1,606
Long-term lease liabilities	Other long-term liabilities		2,582		511
Total lease liabilities		$	4,154	$	2,117

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

	Nine Months Ended September 30,
(dollars in thousands)	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash used by operating leases	$	1,810	$	1,810
Right-of-use assets obtained in exchange for new operating lease liabilities		3,669		1,549
Weighted-average remaining lease term - operating leases		5.34 years		1.47 years
Weighted-average remaining lease term - finance leases		1.48 years		2.48 years
Weighted-average discount rate - operating leases		9%		9%
Weighted-average discount rate - finance leases		9%		9%

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

	Operating Leases		Finance Leases
Nine Months Ended September 30,	(in thousands)
Remainder of 2022	$	557	$	1
2023		1,490		6
2024		653		1
2025		375		-
2026		381		-
Thereafter		1,873		-
Total lease payments	$	5,329	$	8
Less: interest		(1,183)		-
Present value of lease liabilities	$	4,146	$	8

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CHANGES IN BUSINESS

9 Months Ended

Sep. 30, 2022

CHANGES IN BUSINESS.

CHANGES IN BUSINESS

NOTE 5—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 nine 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 September 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:

(in thousands)	September 30, 2022		December 31, 2021
Liabilities:
Current liabilities of discontinued operations	$	106	$	316
Liability for pension obligation		2,307		2,368
Liability for uncertain tax positions		1,206		1,882
Long-term liabilities of discontinued operations		3,513		4,250
Total liabilities of discontinued operations	$	3,619	$	4,566

The following table presents a reconciliation of the major classes of line items constituting the net income (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 September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
General and administrative expenses	$	—	$	5	$	—	$	39
Loss (gain) on disposal - Electrical Solutions		—		(17)		17		(245)
Interest expense		45		46		75		76
Income (loss) from discontinued operations before income tax		(45)		(34)		(92)		130
Income tax expense (benefit)		(3)		22		(626)		59
Income (loss) from discontinued operations	$	(42)	$	(56)	$	534	$	71

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REVENUE

9 Months Ended

Sep. 30, 2022

REVENUE.

REVENUE

NOTE 6—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.

Disaggregated revenue by type of contract was as follows:  

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Cost-plus reimbursement contracts	$	44,237	$	63,363	$	138,263	$	201,027
Fixed-price contracts		12,448		9,988		44,040		24,746
Total	$	56,685	$	73,351	$	182,303	$	225,773

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

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
United States	$	56,685	$	64,379	$	176,801	$	197,287
Canada		-		8,972		5,502		28,486
Total	$	56,685	$	73,351	$	182,303	$	225,773

Contract Balances

The Company enters into contracts that allow for periodic billings over the contract term that are dependent upon specific advance billing terms, as services are provided, or as milestone billings based on completion of certain phases of work. Projects with performance obligations recognized over time that have costs and estimated earnings recognized to date in excess of cumulative billings are reported in the Company’s unaudited condensed consolidated balance sheets as contract assets. Projects with performance obligations recognized over time that have cumulative billings in excess of costs and estimated earnings recognized to date are reported in the Company’s unaudited condensed consolidated balance sheets as contract liabilities. At any point in time, each project in process could have either contract assets or contract liabilities.

The following table provides information about contract assets and contract liabilities from contracts with customers:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Costs incurred on uncompleted contracts	$	55,936	$	66,590	$	173,564	$	203,561
Earnings recognized on uncompleted contracts		749		6,761		8,739		22,212
Total		56,685		73,351		182,303		225,773
Less—billings to date		(50,049)		(63,034)		(175,667)		(215,456)
Net	$	6,636	$	10,317	$	6,636	$	10,317
Contract assets	$	10,076	$	12,811	$	10,076	$	12,811
Contract liabilities		(3,440)		(2,494)		(3,440)		(2,494)
Net	$	6,636	$	10,317	$	6,636	$	10,317

For the three and nine months ended September 30, 2022, the Company recognized revenue of approximately $0.1 million and $2.2 million, respectively, on approximately $3.4 million that was included in the corresponding contract liability balance on December 31, 2021.

Remaining Performance Obligations

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that were unsatisfied (or partially unsatisfied) as of September 30, 2022:

(in thousands)	Remainder of 2022		2023		2024		Thereafter		Total
Remaining performance obligations	$	64,529	$	122,093	$	61,135	$	104,966	$	352,723

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EARNINGS (LOSS) PER SHARE

9 Months Ended

Sep. 30, 2022

EARNINGS (LOSS) PER SHARE

EARNINGS (LOSS) PER SHARE

NOTE 7—EARNINGS (LOSS) PER SHARE

As of September 30, 2022, the Company’s 26,422,761 shares outstanding included 321,142 shares of contingently issued but unvested restricted stock. As of September 30, 2021, the Company’s 25,915,502 shares outstanding included 215,956 shares

of contingently issued but unvested restricted stock. Restricted stock is excluded from the calculation of basic weighted average shares outstanding, but its impact, if dilutive, is included in the calculation of diluted weighted average shares outstanding.

Basic earnings per common share are calculated by dividing net income by the weighted average common shares outstanding during the period. Diluted earnings per common share are based on the weighted average common shares outstanding during the period, adjusted for the potential dilutive effect of common shares that would be issued upon the vesting and release of restricted stock awards and units and stock options, if any.

Basic and diluted earnings per common share from continuing operations were calculated as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except share data)	2022		2021		2022		2021
Income (loss) from continuing operations	$	3,610	$	794	$	(3,728)	$	1,857
Basic income (loss) per common share:
Weighted average common shares outstanding		26,102,308		25,699,545		26,009,465		25,306,130
Basic income (loss) per common share	$	0.14	$	0.03	$	(0.14)	$	0.07
Diluted income (loss) per common share:
Weighted average common shares outstanding		26,102,308		25,699,545		26,009,465		25,306,130
Diluted effect:
Unvested portion of restricted stock units and awards		335,373		807,030		—		791,570
Weighted average diluted common shares outstanding		26,437,681		26,506,575		26,009,465		26,097,700
Diluted income (loss) per common share	$	0.14	$	0.03	$	(0.14)	$	0.07

The weighted average number of shares outstanding used in the computation of basic and diluted earnings per common share does not include the effect of the following potential outstanding common stock. The effects of the potentially outstanding service-based restricted stock and restricted stock unit awards were not included in the calculation of diluted earnings per common share because the effect would have been anti-dilutive. The effects of the potentially outstanding performance- and market-based restricted stock unit awards were not included in the calculation of diluted earnings per common share because the performance and/or market conditions had not been satisfied as of September 30, 2022 and 2021.

	Three Months Ended September 30,		Nine Months Ended September 30,
	2022	2021	2022	2021
Unvested service-based restricted stock and restricted stock unit awards	573,517	16,666	229,102	—
Unvested performance- and market-based restricted stock unit awards	887,559	833,111	887,559	833,111

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INCOME TAXES

9 Months Ended

Sep. 30, 2022

INCOME TAXES

INCOME TAXES

NOTE 8—INCOME TAXES

The effective income tax expense rate for continuing operations for the three and nine months ended September 30, 2022 and 2021 was as follows:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2022	2021	2022	2021
Effective income tax rate for continuing operations	(8.2)%	(0.8)%	5.4%	12.1%

The effective income tax rate differs from the statutory federal income tax rate of 21% primarily because of the partial valuation allowances recorded on the Company’s deferred tax assets and the Canadian income tax provision.  

For the three months ended September 30, 2022, the Company recorded income tax benefit from continuing operations of $0.3 million, or (8.2)% of pretax income from continuing operations, compared with income tax benefit from continuing operations of $0.01 million, or (0.8)% of pretax income from continuing operations, in the corresponding period of 2021. For the nine months ended September 30, 2022, the Company recorded income tax benefit from continuing operations of $0.2 million, or 5.4% of pretax loss from continuing operations, compared with income tax expense from continuing operations of $0.3 million, or 12.1% of pretax income from continuing operations, in the corresponding period of 2021. The $0.3 million decrease in income tax provision from continuing operations for the three months ended September 30, 2022, compared with the corresponding period in 2021, was primarily related to a $0.6 million decrease in the Canadian income tax provision, partially offset by a $0.3 million decrease in the U.S. income tax benefit related to the indefinite lived deferred tax assets. The $0.5 million decrease in income tax provision from continuing operations for the nine months ended September 30, 2022, compared with the corresponding period in 2021, was primarily related to a $0.7 million decrease in the Canadian income tax provision, partially offset by a $0.2 million decrease in the U.S. income tax benefit related to the indefinite lived deferred tax assets.

The Company’s net deferred balance was primarily composed of indefinite lived deferred tax liabilities attributable to goodwill and trade names, and the indefinite lived deferred tax assets related to the post 2017 net operating losses and Section 163(j) interest addback. A full valuation allowance was applied to most of the remaining deferred balances. The indefinite lived deferred tax assets enabled the release of the valuation allowance to the extent that it can offset the indefinite lived deferred tax liabilities. Because all indefinite lived deferred tax liabilities are part of continued operations, and the release of valuation allowance is attributable to the future taxable income related to these deferred tax liabilities, the entire valuation allowance released was recorded in continuing operations according to ASC 740-20-45-3. As of September 30, 2022, the Company had $2.3 million net deferred tax liabilities, mainly composed of $12.4 million indefinite lived deferred tax liabilities attributable to goodwill and trade names, partially offset by $6.8 million indefinite lived deferred tax assets attributable to post 2017 net operating losses, $3.4 million indefinite lived deferred tax assets attributable to Section 163(j) interest addback, $0.2 million deferred tax assets accrued for the current period as a result of the Canadian net operating loss, plus $0.3 million deferred tax liability accrued with respect to the Company’s outside basis difference in its investment in Canada.

As of September 30, 2022, and 2021, the Company would have needed to generate approximately $287.2 million and $270.4 million, respectively, of future taxable income in order to realize its deferred tax assets.

The Company’s foreign subsidiaries may generate earnings that are not subject to U.S. income taxes so long as they are permanently reinvested in its operations outside of the U.S. Pursuant to ASC 740-30, undistributed earnings of foreign subsidiaries that are no longer permanently reinvested would become subject to deferred income taxes.

As of September 30, 2022, the Company projects that its Canadian subsidiary will have generated approximately $5.1 million undistributed earnings by the end of 2022. The Company’s management expects that all of the undistributed earnings will be repatriated back to the United States within the next 12 months. The Company formed the Canadian subsidiary in 2018 without significant capital investment, and the majority of the undistributed earnings was expected to be repatriated as dividends to the United States at the United States-Canada treaty rate of 5%. As a result, the Company accrued a deferred tax liability of $0.3 million related to its investment in Canada for its outside basis difference as of September 30, 2022.

As of September 30, 2022 and 2021, the Company provided for a total liability of $2.3 million and $3.0 million, respectively, for uncertain income tax positions, which include the unrecognized tax benefits related to various federal, foreign and state income tax matters, and the accrual of interest, penalties, and foreign currency adjustments that can potentially arise from these positions. For the period ended September 30, 2022, the $2.3 million reserved for uncertain income tax positions was included in long-term liabilities of discontinued operations and other long-term liabilities, of which $1.2 million was related to discontinued operations, compared to $1.9 million for the corresponding period in 2021. If the unrecognized tax benefit is recognized, the reduction in the liability would be recorded as a tax benefit and reduce the effective tax rate. Of the $2.3 million reserved for uncertain income tax positions as of September 30, 2022, approximately $1.1 million was accrued for potential payment of interest and penalties, of which, $0.5 million was related to discontinued operations.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was enacted and signed into U.S. law to provide economic relief to individuals and businesses facing economic hardship as a result of the COVID-19 pandemic. The Company has incorporated the impact of the CARES Act to the tax provision. In addition, the Company deferred payments of federal employer payroll taxes of approximately $4.9 million, as permitted by the CARES Act. The first half of the deferred amounts were paid in December 2021, and the second half will be paid by December 2022.

On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (“IRA”) into law. The IRA contains a number of revisions to the Internal Revenue Code, including a 15% corporate minimum income tax and a 1% excise tax on corporate stock repurchases in tax years beginning after December 31, 2022. While these tax law changes have no immediate effect and are not expected to have a material adverse effect on the Company’s results of operations going forward, the Company will continue to evaluate the IRA’s impact as further information becomes available.

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DEBT

9 Months Ended

Sep. 30, 2022

DEBT

DEBT

NOTE 9—DEBT

The following table provides information about the Company’s debt, net of unamortized deferred financing costs:

(in thousands)	September 30, 2022		December 31, 2021
Short-term borrowings	$	14,525	$	676
Term loan, current portion of long-term debt		1,050		1,050
Current debt	$	15,575	$	1,726
Term loan, noncurrent portion of long-term debt	$	24,056	$	32,900
Debt discount		(641)		(791)
Unamortized deferred financing costs		(1,606)		(1,781)
Long-term debt, net	$	21,809	$	30,328
Total debt, net	$	37,384	$	32,054

Debt Refinancing

On December 16, 2020 (the “Closing Date”), the Company and certain of its subsidiaries refinanced and replaced its prior revolving credit facility and term loan facility and entered into (i) the Term Loan Agreement (as defined below), which provided for senior secured term loan facilities in an aggregate principal amount of up to $50.0 million (collectively, the “Term Loan”), consisting of a $35.0 million closing date term loan facility (the “Closing Date Term Loan”) and up to $15.0 million of borrowings under a delayed draw facility (the “Delayed Draw Term Loan Facility”) with EICF Agent LLC, as agent, and CION Investment Corporation,  as a lender and a co-lead arranger, and the other lenders party thereto; and (ii) a senior secured asset-based revolving line of credit of up to $30.0 million (the “Revolving Credit Facility”) with PNC Bank, National Association (“PNC”). In connection with the refinancing, the Company repaid the outstanding balance of the prior facilities and all interest in full.

As of September 30, 2022, the Company had $14.5 million outstanding debt under the Revolving Credit Facility and $25.1 million outstanding (including both the noncurrent and current portion of the Term Loan) under the Term Loan. Total liquidity (the sum of unrestricted cash and availability under the Revolving Credit Facility) was $7.3 million at the end of the third quarter of 2022. As of September 30, 2022, the Company was in compliance with all debt covenants, as amended.

Effective as of August 23, 2022, the Company entered into a confidential settlement agreement and general release (the “Settlement Agreement”), dated August 22, 2022, that resolved a pending arbitration proceeding initiated by the Company against a third-party respondent in May 2020. The claims made by the Company against the respondent relate to the restatement of the Company’s financial statements in 2017 for the 2012 to 2014 period. The Company received net proceeds (after payment of attorney’s fees and third-party funding costs) of approximately $8.1 million, which was recorded as other income on the income statement during the third quarter of 2022. In the third quarter of 2022, the Company used the $8.1 million of net proceeds received under the Settlement Agreement to repay part of the Term Loan. As of September 30, 2022, the Company reduced the Term Loan to $25.1 million compared to $34.0 million on December 31, 2021 (including both the noncurrent and current portion of the Term Loan).

The Revolving Credit Facility

On the Closing Date, the Company and certain of its subsidiaries (the “Revolving Loan Borrowers”) entered into the Revolving Credit and Security Agreement with PNC, as agent for the lenders, and the lenders party thereto (the “Revolving Credit Agreement”), which provides for the Revolving Credit Facility. As part of the Revolving Credit Facility, the Company may access a letter of credit sublimit in an amount up to $2.0 million, a swing loan sublimit in an aggregate principal amount of up to $3.0 million, and a Canadian dollar sublimit in an aggregate principal amount of up to $5.0 million. The Revolving Credit Agreement matures on December 16, 2025.

As of September 30, 2022, borrowings under the Revolving Credit Facility bore interest, at the Company’s election, at either (1) the base commercial lending rate of PNC, as publicly announced, plus 1.25%, payable in cash on a monthly basis, (2) the Term SOFR Rate (as defined in the Revolving Credit Agreement, as amended,) based on the secured overnight financing rate (“SOFR”) rate, subject to a minimum SOFR floor of 1.00%, plus 2.25%, payable in cash on the last day of each interest period, or (3) with respect to Canadian dollar loans, the Canadian Dollar Offered Rate (“CDOR”), subject to a minimum CDOR rate of 1.00%, plus 2.25%, payable in cash on a monthly basis. In addition, upon the occurrence of an event of default, and for so long as such event of default continues, default interest equal to 2.00% per year in excess of the rate otherwise applicable will be payable.

The Revolving Loan Borrowers’ Obligations (as defined in the Revolving Credit Agreement) are guaranteed by certain of the Company’s material, wholly owned subsidiaries, subject to customary exceptions (the “Revolving Loan Guarantors” and, together with the Revolving Loan Borrowers, the “Revolving Loan Credit Parties”). The Revolving Loan Credit Parties’ obligations are secured by first-priority security interests on substantially all of the Revolving Loan Credit Parties’ accounts receivable and a second-priority security interest in substantially all other assets of the Revolving Loan Credit Parties, subject to the terms of the Intercreditor Agreement between PNC and EICF Agent LLC, as the Revolving Loan Agent and the Term Loan Agent, respectively (as each such term is defined in the Intercreditor Agreement), as described below (the “Intercreditor Agreement”).  

The Revolving Loan Borrowers may from time to time voluntarily prepay outstanding amounts, plus any accrued but unpaid interest on the aggregate amount being prepaid, under the Revolving Credit Facility, in whole or in part. There is no required minimum prepayment amount. If at any time the amount outstanding under the Revolving Credit Agreement exceeds the borrowing base, or any sublimit, in effect at such time, the excess amount will be immediately due and payable. Subject to the Intercreditor Agreement, the Revolving Credit Agreement also requires mandatory prepayment of outstanding amounts in the event the Revolving Loan Borrowers receive proceeds from certain events and activities, including, among others, certain asset sales and casualty events, the issuance of indebtedness and equity interests, and the recovery of any proceeds from certain specified arbitration proceedings.

The Revolving Credit Agreement provides for (1) a closing fee of $0.2 million, which was paid on the Closing Date, (2) a customary unused line fee equal to 0.25% per year on the unused portion of the Revolving Credit Facility, which is payable on a quarterly basis, and (3) a collateral monitoring fee of $2,500, which is payable on a monthly basis. The Revolving Credit Agreement also provides for an early termination fee (the “Early Termination Fee”), payable to the revolving lenders thereunder upon (1) any acceleration of the Obligations and termination of the Revolving Credit Agreement and the obligation of the revolving lenders to make advances thereunder following the occurrence of an Event of Default (as defined in the Revolving Credit Agreement), or (2) any other termination of the Revolving Credit Agreement and the obligation of revolving lenders to make advances thereunder for any reason (the “Early Termination Date”). The Early Termination Fee is calculated as follows: if the Early Termination Date occurred on or prior to the first anniversary of the Closing Date, the Early Termination Fee would have been 2.00% of the Revolving Credit Facility; and if prepayment occurs after the first anniversary of the Closing Date and on or prior to the second anniversary of the Closing Date, the Early Termination Fee will be 1.00% of the Revolving Credit Facility. While any letter of credit is outstanding under the Revolving Credit Facility, the Revolving Loan Borrowers must pay a letter of credit fronting fee at a rate equal to 0.25% per year, payable quarterly, in addition to any other customary fees required by the issuer of the letter of credit.

The Revolving Credit Agreement contains customary representations and warranties, as well as customary affirmative and negative covenants, in each case, with certain exceptions, limitations and qualifications. The Revolving Credit Agreement also requires the Revolving Loan Borrowers to regularly provide certain financial information to the lenders thereunder, maintain a springing minimum fixed charge coverage ratio, and comply with certain limitations on capital expenditures.

Events of default under the Revolving Credit Agreement include, but are not limited to, a breach of certain covenants or any representations or warranties, failure to timely pay any amounts due and owing, the commencement of any bankruptcy or other insolvency proceeding, judgments in excess of certain acceptable amounts, the occurrence of a change in control, certain events related to ERISA matters, impairment of security interests in collateral or invalidity of guarantees or security documents, or a default or event of default under the Term Loan Agreement or the Intercreditor Agreement, in each case, with customary exceptions, limitations, grace periods and qualifications. If an event of default occurs, the revolving lenders may, among other things, declare all Obligations outstanding under the Revolving Credit Facility to be immediately due and payable, together with accrued interest and fees, and exercise remedies under the collateral documents relating to the Revolving Credit Agreement.

On August 3, 2022, the Company entered into an Amendment to the Revolving Credit Agreement (the “Revolving Credit Amendment”) that, among other things, (i) amended the calculation of EBITDA (as defined in the Revolving Credit Agreement), effective as of June 30, 2022, to include (or “add back”) certain non-recurring losses and expenses relating to projects executed in Jacksonville, Florida, one-time costs and expenses incurred in connection with the Company’s transmission and distribution business unit start-up, and costs and expenses arising out of the Company’s litigation with a designated former executive and his employer (in each case, subject to certain specified dollar limits), (ii) permitted advances against certain eligible receivables of one of the Company’s joint ventures (also subject to specified dollar limits), (iii) included provisions that replace the London Interbank Offered Rate (LIBOR) interest rate with customary provisions based on SOFR, and (iv) provided for the payment of a $25,000 amendment fee, plus applicable fees and expenses. The $25,000 amendment fee will be expensed as incurred.

EICF Agent LLC, as the Term Loan Agent, and PNC, as the Revolving Loan Agent, entered into an Intercreditor Agreement, dated as of the Closing Date, to which the Term Loan Credit Parties (as defined below) and Revolving Loan Credit Parties consented. The Intercreditor Agreement, among other things, specifies the relative lien priorities of the Term Loan Agent and Revolving Loan Agent in the relevant collateral, and contains customary provisions regarding, among other things, the rights of the Term Loan Agent and Revolving Loan Agent to take enforcement actions against the relevant collateral and certain limitations on amending the documentation governing each of the Term Loan and Revolving Credit Facility.

The Term Loan

On the Closing Date, the Company and certain of its subsidiaries (the “Term Loan Borrowers”) entered into the Term Loan, Guarantee and Security Agreement with EICF Agent LLC, as agent for the lenders, CION Investment Corporation, as a lender and co-lead arranger, and the other lenders party thereto (the “Term Loan Agreement”), which provides for the Term Loan. The Closing Date Term Loan was fully drawn on the Closing Date, while the Delayed Draw Term Loan Facility was available upon the satisfaction of certain conditions precedent for up to 18 months following the Closing Date and expired in June 2022. The Term Loan Agreement matures on December 16, 2025.

Borrowings under the Term Loan Agreement bear interest at SOFR, plus a margin of 8.50% (if the Total Leverage Ratio (as defined in the Term Loan Agreement) is less than 2.50:1) or 9.00% per year (if the Total Leverage Ratio is greater than or equal to 2.50:1), subject to a minimum SOFR floor of 1.00%, payable in cash on a quarterly basis. In addition, upon the occurrence of an event of default, and for so long as such event of default continues, default interest equal to 2.00% per year in excess of the rate otherwise applicable will be payable.

The Term Loan Borrowers’ Obligations (as defined in the Term Loan Agreement) are guaranteed by certain of the Company’s material, wholly owned subsidiaries, subject to customary exceptions (the “Term Loan Guarantors” and, together with the Term Loan Borrowers, the “Term Loan Credit Parties”). The Term Loan Credit Parties’ obligations are secured by first-priority security interests on substantially all of the Term Loan Credit Parties’ assets, as well as a second-priority security interest on the Term Loan Credit Parties’ accounts receivable and inventory, subject to the Intercreditor Agreement.

Subject to certain conditions, the Term Loan Borrowers may voluntarily prepay the Term Loan on any Payment Date (as defined in the Term Loan Agreement), in whole or in part, in a minimum amount of $1.0 million of the outstanding principal amount, plus a prepayment fee. The prepayment fee was amended effective June 30, 2022, as described below.

Subject to certain exceptions, within 120 days of the end of each calendar year, beginning with the year ended December 31, 2021, the Term Loan Borrowers must prepay the Obligations in an amount equal to (1) (i) if the Total Leverage Ratio is greater than 3:00:1:00, 50.0% of Excess Cash Flow (as defined in the Term Loan Agreement) or (ii) if the Total Leverage Ratio is equal to or less than 3:00:1:00 and greater than 2:00:1:00, 25.0% of Excess Cash Flow, less (2) all voluntary prepayments made on the Term Loan during such calendar year; provided that, so long as no default or event of default has occurred and is continuing or would result therefrom, no such prepayment will be required unless Excess Cash Flow for such calendar year equals or exceeds $0.5 million. The Company was not required to prepay any Obligations for the year ended December 31, 2021. The Term Loan Agreement also requires mandatory prepayment of certain amounts in the event the Term Loan Borrowers receive proceeds from certain events and activities, including, among others, certain asset sales and casualty events, the issuance of indebtedness and equity interests, and the receipt of extraordinary receipts (with certain exclusions), plus, in certain instances, the applicable prepayment fee.

The Term Loan Agreement contains customary representations and warranties, as well as customary affirmative and negative covenants, in each case, with certain exceptions, limitations and qualifications. The Term Loan Agreement also requires the Term Loan Borrowers to regularly provide certain financial information to the lenders thereunder, maintain a maximum total leverage ratio and a minimum fixed charge coverage ratio, and comply with certain limitations on capital expenditures.

Events of default under the Term Loan Agreement include, but are not limited to, a breach of certain covenants or any representations or warranties, failure to timely pay any amounts due and owing, the commencement of any bankruptcy or other insolvency proceeding, judgments in excess of certain acceptable amounts, the occurrence of a change in control, certain events related to ERISA matters, impairment of security interests in collateral or invalidity of guarantees or security documents, or a default or event of default under the Revolving Credit Agreement or the Intercreditor Agreement, in each case, with customary exceptions, limitations, grace periods and qualifications. If an event of default occurs, the Term Loan lenders may, among other things, declare all Obligations to be immediately due and payable, together with accrued interest and fees, and exercise remedies under the collateral documents relating to the Term Loan Agreement.

On August 3, 2022 (the “Signing Date”), effective as of June 30, 2022, the Company entered into an Amendment to the Term Loan Agreement (the “Term Loan Amendment”) that, among other things, (i) amended and increased the Total Leverage Ratio (as defined in the Term Loan Agreement) applicable to the Company for certain periods, (ii) amended the calculation of Consolidated EBITDA (as defined in the Term Loan Agreement) to include (or “add back”) certain non-recurring losses and expenses relating to projects executed in Jacksonville, Florida, one-time costs and expenses incurred in connection with the Company’s transmission and distribution business unit start-up, and costs and expenses arising out of the Company’s litigation with a designated former executive and his employer (in each case, subject to certain specified dollar limits), (iii) provided for a fee of 1% of the then-outstanding principal balance due upon maturity of the term loan without duplication of fees paid in connection with the Company’s prepayment fee structure, (iv) extended the Company’s existing prepayment fee structure to require upon repayment (a) prior to the first anniversary of the Signing Date, a fee of 3% of the principal amount being repaid, (b) on or after the first anniversary of the Signing Date and prior to the second anniversary of the Signing Date, a fee of 2% of the principal amount being repaid, and (c) on or after the second anniversary of the Signing Date, a fee of 1% of the principal amount being repaid, and (v) provided for the payment of a $0.2 million amendment fee, plus applicable fees and expenses.  The Company’s expense related to the Term Loan Amendment was $0.2 million and will be recognized as interest expense over the remaining term of the modified Term Loan Agreement.

Effective as of August 23, 2022, the Company entered into a Settlement Agreement, which resolved a pending arbitration proceeding related to the restatement of the Company’s financial statements in 2017 for the 2012 to 2014 period. The Company received net proceeds of $8.1 million (after payment of attorney’s fees and third-party funding costs), and used these net proceeds to prepay a substantial amount of the Term Loan. The $8.1 million net proceeds, coupled with $0.3 million scheduled principal payments, reduced the Term Loan by a total of $8.4 million to $25.1 million as of September 30, 2022 (including both the noncurrent and current portion of the Term Loan).

Letters of Credit and Bonds

In line with industry practice, the Company is often required to provide letters of credit and payment and performance surety bonds to customers. These letters of credit and bonds provide credit support and security for the customer if the Company fails to perform its obligations under the applicable contract with such customer.

The Revolving Credit Facility provides for a letter of credit sublimit in an amount up to $2.0 million. As of September 30, 2022, the Company had $0.5 million letters of credit outstanding under this sublimit and $0.4 million cash collateralized standby letters of credit outstanding pursuant to its prior revolving credit facility with Wells Fargo Bank, National Association. There were no amounts drawn upon these letters of credit as of September 30, 2022.

In addition, as of September 30, 2022 and December 31, 2021, the Company had outstanding payment and performance surety bonds of $65.6 million and $67.6 million, respectively.

Deferred Financing Costs and Debt Discount:

Deferred financing costs and debt discount is amortized over the terms of the related debt facilities using the straight-line method. The following table summarizes the amortization of deferred financing costs and debt discount related to the Company's debt facilities and recognized in interest expense on the unaudited condensed consolidated statements of operations:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Term loan	$	125	$	113	$	350	$	338
Debt discount on term loan		50		50		150		150
Revolving credit facility		96		96		286		286
Total	$	271	$	259	$	786	$	774

The following table summarizes unamortized deferred financing costs and debt discount included on the Company's unaudited condensed consolidated balance sheets:

(in thousands)	Location	September 30, 2022		December 31, 2021
Term loan	Long-term debt, net	$	1,606	$	1,781
Debt discount on term loan	Long-term debt, net		641		791
Revolving credit facility	Other long-term assets		1,223		1,509
Total		$	3,470	$	4,081

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FINANCIAL INSTRUMENTS

9 Months Ended

Sep. 30, 2022

FINANCIAL INSTRUMENTS

FINANCIAL INSTRUMENTS

NOTE 10—FINANCIAL INSTRUMENTS

Fair Value of Financial Instruments

ASC 820–Fair Value Measurement defines fair value as the exit price, which is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a three-tier fair value hierarchy, which categorizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in the active markets for identical assets and liabilities and the lowest priority to unobservable inputs.

The Company’s financial instruments as of September 30, 2022 and December 31, 2021 consisted primarily of cash and cash equivalents, restricted cash, receivables, payables, and debt instruments. The carrying values of these financial instruments approximate their respective fair values, as they are either short-term in nature or carry interest rates that are periodically adjusted to market rates.

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2022

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

NOTE 11—COMMITMENTS AND CONTINGENCIES

Litigation and Claims

The Company is from time-to-time party to various lawsuits, including personal injury claims and other proceedings that arise in the ordinary course of its business. With respect to all such lawsuits, claims and proceedings, the Company records a reserve when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. The Company does not believe that the resolution of any currently pending lawsuits, claims and proceedings, either individually or in the aggregate, will have a material adverse effect on its financial position, results of operations or liquidity. However, the outcomes of any currently pending lawsuits, claims and proceedings cannot be predicted, and therefore, there can be no assurance that this will be the case.

The Company completed a bankruptcy filing of its Koontz-Wagner subsidiary on July 11, 2018. This could require the Company to incur legal fees and other expenses related to liabilities from this bankruptcy filing. While the Company does not anticipate these liabilities will have a material adverse effect on its results of operations, cash flows and financial position, and although the statute of limitations has run on certain claims that the Chapter 7 Trustee for the Koontz-Wagner estate might assert, there can be no assurance of the outcome. 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. For additional information, please refer to “Note 5—Changes in Business” to the unaudited condensed consolidated financial statements.

The acquiror of certain assets from a former operating unit of the Company has been named as a defendant in an asbestos personal injury lawsuit and has submitted a claim for indemnification and tendered defense of the matter to the Company. The Company has assumed defense of the matter subject to a reservation of rights and objection to the claim for indemnification. Neither the Company nor its predecessors ever mined, manufactured, produced, or distributed asbestos fiber, the material that allegedly caused the injury underlying this action. The Company does not expect that this claim will have a material adverse effect on its financial position, results of operations or liquidity. Moreover, during 2012, the Company secured insurance coverage that will help to reimburse the defense costs and potential indemnity obligations of its former operating unit relating to these claims. The Company intends to vigorously defend all currently active actions, and it does not anticipate that this action will have a material adverse effect on its financial position, results of operations or liquidity. However, the outcomes of any legal action cannot be predicted and, therefore, there can be no assurance that this will be the case.

Insurance

The Company maintains insurance coverage for most insurable aspects of its business and operations. The Company’s insurance programs, including, but not limited to, health, general liability, and workers’ compensation, have varying coverage limits depending upon the type of insurance. For the three and nine months ended September 30, 2022, insurance expense, including insurance premiums related to the excess claim coverage and claims incurred for continuing operations, was $1.6 million and $4.7 million, respectively.

The Company’s unaudited condensed consolidated balance sheets include amounts representing its probable estimated liability related to insurance-related claims that are known and have been asserted against the Company, and for insurance-related claims that are believed to have been incurred but had not yet been reported as of September 30, 2022. As of September 30, 2022, the Company provided $0.9 million in letters of credit and $1.5 million of non-depleting cash collateral as security for possible general liability and workers’ compensation claims.

Executive Severance

As of September 30, 2022, the Company had outstanding severance arrangements with senior executives. The Company’s maximum commitment under all such arrangements, which would apply if the employees covered by these arrangements were each terminated without cause, was $6.4 million on September 30, 2022. The Company did not accrue executive severance expenses as of September 30, 2022.

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STOCK-BASED COMPENSATION PLANS

9 Months Ended

Sep. 30, 2022

STOCK-BASED COMPENSATION PLANS.

STOCK-BASED COMPENSATION PLANS

NOTE 12—STOCK-BASED COMPENSATION PLANS

During the first nine months of 2022, the Company granted 291,894 service-based restricted stock awards under the 2015 Equity Incentive Plan (as amended and restated, the “2015 Plan”), at a grant date fair value of $1.85 per share, to its non-employee directors, which vest in full on February 3, 2023.

During the first nine months of 2022, the Company granted 362,356 service-based restricted stock units to its employees under the 2022 long-term incentive (“LTI”) program and the 2015 Plan at a grant date fair value of $1.99 per share. These service-based restricted stock units can be paid in cash or shares at the election of the Compensation Committee of the Board of Directors and shall vest in equal annual installments over a period of three years.

During the first nine months of 2022, the Company also granted 724,726 performance-based restricted stock units to its employees under the 2022 LTI program and the 2015 Plan at a grant date fair value of $1.99 per share. The 2022 performance-based restricted stock units have three annual performance periods (fiscal years 2022, 2023 and 2024), with operating income and free cash flow goals (equally weighted) for each year, and threshold performance resulting in awards earned at 50% of the target opportunity and maximum performance resulting in awards earned at 200% of the target. The annual achievement levels are accumulated over the three-year performance period and the earned amounts, if any, will vest on March 31, 2025. The three-year average payout level for each performance objective replaces the actual payout level for any fiscal year where the actual payout is less than the three-year average. These performance-based restricted stock units can be paid in cash or shares at the election of the Compensation Committee of the Board of Directors.

During the first nine months of 2021, the Company granted 307,616 service-based restricted stock units under the 2021 LTI program and the 2015 Plan at a grant date fair value of $3.48 per share. These service-based restricted stock units can be paid in cash or shares at the election of the Compensation Committee of the Board of Directors and shall vest in full on March 31, 2024.  

Additionally on June 15, 2021, the Company granted an employee 41,666 service-based restricted stock units under the 2015 Plan at a grant date fair value of $6.27 per share. The service-based restricted stock units vested with respect to 25,000 shares of common stock on the date of grant (June 15, 2021), while 8,333 vested on March 31, 2022 and the remaining 8,333 will vest on March 31, 2023. These awards may be paid in cash or shares at the election of the Compensation Committee of the Board of Directors.

During the first nine months of 2021, the Company also granted performance-based restricted stock units under the 2021 LTI program and the 2015 Plan with an aggregate cash value of approximately $2.2 million, which could be paid in cash or shares at the election of the Compensation Committee of the Board of Directors. The 2021 performance-based restricted stock units have three annual performance periods (fiscal years 2021, 2022 and 2023), with operating income and free cash flow goals (equally weighted) for each year, and threshold performance resulting in awards earned at 50% of the target opportunity and maximum performance resulting in awards earned at 200% of the target. The annual achievement levels are accumulated over the three-year performance period and the earned amounts, if any, vest on March 31, 2024. The three-year average payout level for each performance objective replaces the actual payout level for any fiscal year where the actual payout is less than the three-year average. These are cash-based awards that were included in other current liabilities on the consolidated balance sheet beginning in April 2021.

Additionally on May 17, 2021, the Company granted an employee 37,500 performance-based restricted stock units as an inducement award outside of the 2015 Plan at a grant date fair value of $5.00 per share. The performance-based restricted stock units, if any, vest on March 31, 2024. The performance-based awards have three annual performance periods (fiscal years 2021, 2022 and 2023), with operating income and free cash flow goals (equally weighted) for each year, and threshold performance resulting in awards earned at 50% of the target opportunity and maximum performance resulting in awards earned at 200% of the target. These awards may be paid in cash or shares at the election of the Compensation Committee of the Board of Directors.

The Company previously granted (i) performance-based restricted stock units under the 2016 LTI program, which were scheduled to vest if the Company achieved a per share stock price of $5.50 for 30 consecutive trading days prior to August 5, 2021, (ii) performance-based restricted stock units under the 2017 LTI program, which were scheduled to vest if the Company achieved a per share stock price of $6.00 for 30 consecutive trading days prior to March 31, 2021 (pursuant to an extension from the initial vesting date of March 31, 2020, which extension was approved by the Compensation Committee in February 2020), and (iii) performance-based restricted stock units under the 2018 LTI program, which were scheduled to vest if the Company achieved a per share stock price of at least $5.00 for any period of 30 consecutive trading days prior to June 30, 2021 (collectively, the “LTI Performance Awards”). On March 5, 2021, the Compensation Committee of the Board of Directors extended the performance period for each of the LTI Performance Awards to December 31, 2022. In accordance with ASC Topic 718, “Compensation—Stock Compensation” (“ASC 718”), the Company conducted a lattice valuation model in order to revalue the market price for the LTI Performance Awards at the March 5, 2021 modification date. The 2018 LTI program met the market objective by achieving a per share stock price of $5.00 for 30 consecutive days, and approximately 189,640 shares will vest for recipients remaining employed through December 31, 2022.

During the first nine months of 2021, the Compensation Committee of the Board of Directors approved modifying the 2020 and 2019 performance-based restricted stock units granted in 2020 and 2019. The 2020 and 2019 performance-based restricted stock units did not achieve the 2021 performance objectives. The 2019 performance-based restricted stock units expired because their final performance period was 2021.

On April 13, 2022, the Company’s management analyzed the probability of achieving the 2022 performance objectives for the 2021 and 2020 performance-based restricted stock units granted in 2021 and 2020 and determined that, after comparing the actual year-to-date results to the forecasted results, it is unlikely the Company will achieve the minimum performance metric for the 2022 performance period. This resulted in a $0.3 million adjustment for the 2021 performance-based restricted stock units and an entire reversal of $0.5 million for the 2020 performance-based restricted stock units within the first three months of 2022. The 2020 performance-based restricted stock units will expire after the 2022 performance period and the 2021 performance-based restricted stock units were adjusted to vest at 55% of their original cash value and as of September 30, 2022, will be expensed by approximately $0.5 million until the end of the service requisite period of March 31, 2024.

While the majority of  restricted stock units and awards were granted as equity, in accordance with ASC 718, the Company has one cash-based plan that is classified as a liability. Stock-based compensation expense for the three months ended September 30, 2022 and 2021 was $0.5 million and $1.1 million, respectively, and for the nine months ended September 30, 2022 and 2021 was $1.1 million and $2.6 million, respectively, and was included in general and administrative expenses on the Company’s unaudited condensed consolidated statements of operations.

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OTHER SUPPLEMENTAL INFORMATION

9 Months Ended

Sep. 30, 2022

OTHER SUPPLEMENTAL INFORMATION

OTHER SUPPLEMENTAL INFORMATION

NOTE 13—OTHER SUPPLEMENTARY INFORMATION

The following table summarizes other current assets included on the Company's unaudited condensed consolidated balance sheets:

(in thousands)	September 30, 2022		December 31, 2021
Unamortized commercial insurance premiums	$	3,674	$	2,389
Litigation settlement receivable		2,675		—
Security deposits - real estate		1,978		1,978
Prepaid expenses		1,826		1,136
Sales tax receivable - Canada		6		4,866
Other current assets		516		680
Total	$	10,675	$	11,049

The following table summarizes other current liabilities included on the Company's unaudited condensed consolidated balance sheets:

(in thousands)	September 30, 2022		December 31, 2021
Short-term lease liability	$	1,572	$	1,606
Accrued job cost		1,318		2,433
Cloud computing software liability		692		-
Stock Compensation		418		938
Legal fees		245		113
Sales tax payable - Canada		-		5,135
Other current liabilities		385		792
Total	$	4,630	$	11,017

The following table summarizes other long-term assets included on the Company's unaudited condensed consolidated balance sheets:

(in thousands)	September 30, 2022		December 31, 2021
Right-of-use lease assets	$	3,738	$	1,527
Equity method investment in RCC		1,848		2,521
Unamortized Debt Issuance Cost		1,223		1,509
Unamortized cloud computing software		757		—
Other long-term assets		166		155
Total	$	7,732	$	5,712

The following table summarizes other long-term liabilities included on the Company's unaudited condensed consolidated balance sheets:

(in thousands)	September 30, 2022		December 31, 2021
Long-term lease liability	$	2,582	$	511
Liability for uncertain tax positions		1,102		1,136
Other long-term liabilities		756		-
Total	$	4,440	$	1,647

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SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2022

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 14—SUBSEQUENT EVENTS

The Company settled a legal dispute related to the loss of a multi-year contract against a former Company executive and current competitor. The former Company executive was hired by the competitor and breached a non-compete agreement. The legal settlement resulted in $2.7 million and was included on the income statement as other income for the third quarter of 2022. The Company collected the $2.7 million in cash related to the settlement on October 13, 2022. The $2.7 million settlement was used to pay a portion of the Revolving Credit Facility in the fourth quarter of 2022.

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BUSINESS AND BASIS OF PRESENTATION (Policies)

9 Months Ended

Sep. 30, 2022

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 (loss), 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

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

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

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BUSINESS AND BASIS OF PRESENTATION (Tables)

9 Months Ended

Sep. 30, 2022

BUSINESS AND BASIS OF PRESENTATION

Reporting periods and corresponding fiscal interim periods

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

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LEASES (Tables)

9 Months Ended

Sep. 30, 2022

LEASES

Schedule of components of lease expense

	Three Months Ended September 30,				Nine Months Ended September 30,
Lease Cost/(Sublease Income) (in thousands)	2022		2021		2022		2021
Operating lease cost	$	549	$	619	$	1,668	$	1,711
Short-term lease cost		2,125		1,051		5,353		2,484
Sublease income		(14)		(5)		(44)		(5)
Total lease cost	$	2,660	$	1,665	$	6,977	$	4,190

Schedule of right-of use assets and lease liabilities

Lease Assets/Liabilities (in thousands)	Balance Sheet Classification	September 30, 2022		December 31, 2021
Lease Assets
Right-of-use assets	Other long-term assets	$	3,738	$	1,527
Lease Liabilities
Short-term lease liabilities	Other current liabilities	$	1,572	$	1,606
Long-term lease liabilities	Other long-term liabilities		2,582		511
Total lease liabilities		$	4,154	$	2,117

Schedule of supplemental information

	Nine Months Ended September 30,
(dollars in thousands)	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash used by operating leases	$	1,810	$	1,810
Right-of-use assets obtained in exchange for new operating lease liabilities		3,669		1,549
Weighted-average remaining lease term - operating leases		5.34 years		1.47 years
Weighted-average remaining lease term - finance leases		1.48 years		2.48 years
Weighted-average discount rate - operating leases		9%		9%
Weighted-average discount rate - finance leases		9%		9%

Schedule of remaining lease payments under operating leases

	Operating Leases		Finance Leases
Nine Months Ended September 30,	(in thousands)
Remainder of 2022	$	557	$	1
2023		1,490		6
2024		653		1
2025		375		-
2026		381		-
Thereafter		1,873		-
Total lease payments	$	5,329	$	8
Less: interest		(1,183)		-
Present value of lease liabilities	$	4,146	$	8

Schedule of remaining lease payments under finance leases

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

	Operating Leases		Finance Leases
Nine Months Ended September 30,	(in thousands)
Remainder of 2022	$	557	$	1
2023		1,490		6
2024		653		1
2025		375		-
2026		381		-
Thereafter		1,873		-
Total lease payments	$	5,329	$	8
Less: interest		(1,183)		-
Present value of lease liabilities	$	4,146	$	8

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CHANGES IN BUSINESS (Tables)

9 Months Ended

Sep. 30, 2022

Discontinued operations disposed of by sale

Schedule of Financial Information of Disposal Group

(in thousands)	September 30, 2022		December 31, 2021
Liabilities:
Current liabilities of discontinued operations	$	106	$	316
Liability for pension obligation		2,307		2,368
Liability for uncertain tax positions		1,206		1,882
Long-term liabilities of discontinued operations		3,513		4,250
Total liabilities of discontinued operations	$	3,619	$	4,566

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
General and administrative expenses	$	—	$	5	$	—	$	39
Loss (gain) on disposal - Electrical Solutions		—		(17)		17		(245)
Interest expense		45		46		75		76
Income (loss) from discontinued operations before income tax		(45)		(34)		(92)		130
Income tax expense (benefit)		(3)		22		(626)		59
Income (loss) from discontinued operations	$	(42)	$	(56)	$	534	$	71

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REVENUE (Tables)

9 Months Ended

Sep. 30, 2022

REVENUE.

Schedule of disaggregation of revenue

Disaggregated revenue by type of contract was as follows:  

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Cost-plus reimbursement contracts	$	44,237	$	63,363	$	138,263	$	201,027
Fixed-price contracts		12,448		9,988		44,040		24,746
Total	$	56,685	$	73,351	$	182,303	$	225,773

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

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
United States	$	56,685	$	64,379	$	176,801	$	197,287
Canada		-		8,972		5,502		28,486
Total	$	56,685	$	73,351	$	182,303	$	225,773

Costs and estimated earnings in excess of billings or billings in excess of costs and estimated earnings

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Costs incurred on uncompleted contracts	$	55,936	$	66,590	$	173,564	$	203,561
Earnings recognized on uncompleted contracts		749		6,761		8,739		22,212
Total		56,685		73,351		182,303		225,773
Less—billings to date		(50,049)		(63,034)		(175,667)		(215,456)
Net	$	6,636	$	10,317	$	6,636	$	10,317
Contract assets	$	10,076	$	12,811	$	10,076	$	12,811
Contract liabilities		(3,440)		(2,494)		(3,440)		(2,494)
Net	$	6,636	$	10,317	$	6,636	$	10,317

Schedule of transaction price allocated to the remaining performance obligations

(in thousands)	Remainder of 2022		2023		2024		Thereafter		Total
Remaining performance obligations	$	64,529	$	122,093	$	61,135	$	104,966	$	352,723

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EARNINGS (LOSS) PER SHARE (Tables)

9 Months Ended

Sep. 30, 2022

EARNINGS (LOSS) PER SHARE

Schedule of calculation of basic and diluted earnings per common share

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except share data)	2022		2021		2022		2021
Income (loss) from continuing operations	$	3,610	$	794	$	(3,728)	$	1,857
Basic income (loss) per common share:
Weighted average common shares outstanding		26,102,308		25,699,545		26,009,465		25,306,130
Basic income (loss) per common share	$	0.14	$	0.03	$	(0.14)	$	0.07
Diluted income (loss) per common share:
Weighted average common shares outstanding		26,102,308		25,699,545		26,009,465		25,306,130
Diluted effect:
Unvested portion of restricted stock units and awards		335,373		807,030		—		791,570
Weighted average diluted common shares outstanding		26,437,681		26,506,575		26,009,465		26,097,700
Diluted income (loss) per common share	$	0.14	$	0.03	$	(0.14)	$	0.07

Schedule anti-dilutive potentially outstanding shares were not included in the calculation of diluted earnings (loss) per share

	Three Months Ended September 30,		Nine Months Ended September 30,
	2022	2021	2022	2021
Unvested service-based restricted stock and restricted stock unit awards	573,517	16,666	229,102	—
Unvested performance- and market-based restricted stock unit awards	887,559	833,111	887,559	833,111

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INCOME TAXES (Tables)

9 Months Ended

Sep. 30, 2022

INCOME TAXES

Schedule of effective income tax expense rate for continuing operations

	Three Months Ended September 30,		Nine Months Ended September 30,
	2022	2021	2022	2021
Effective income tax rate for continuing operations	(8.2)%	(0.8)%	5.4%	12.1%

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DEBT (Tables)

9 Months Ended

Sep. 30, 2022

DEBT

Schedule of debt

(in thousands)	September 30, 2022		December 31, 2021
Short-term borrowings	$	14,525	$	676
Term loan, current portion of long-term debt		1,050		1,050
Current debt	$	15,575	$	1,726
Term loan, noncurrent portion of long-term debt	$	24,056	$	32,900
Debt discount		(641)		(791)
Unamortized deferred financing costs		(1,606)		(1,781)
Long-term debt, net	$	21,809	$	30,328
Total debt, net	$	37,384	$	32,054

Schedule of deferred financing costs amortized to Interest Expense

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Term loan	$	125	$	113	$	350	$	338
Debt discount on term loan		50		50		150		150
Revolving credit facility		96		96		286		286
Total	$	271	$	259	$	786	$	774

Schedule of unamortized deferred financing costs

(in thousands)	Location	September 30, 2022		December 31, 2021
Term loan	Long-term debt, net	$	1,606	$	1,781
Debt discount on term loan	Long-term debt, net		641		791
Revolving credit facility	Other long-term assets		1,223		1,509
Total		$	3,470	$	4,081

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OTHER SUPPLEMENTAL INFORMATION (Tables)

9 Months Ended

Sep. 30, 2022

OTHER SUPPLEMENTAL INFORMATION

Schedule of other current assets

(in thousands)	September 30, 2022		December 31, 2021
Unamortized commercial insurance premiums	$	3,674	$	2,389
Litigation settlement receivable		2,675		—
Security deposits - real estate		1,978		1,978
Prepaid expenses		1,826		1,136
Sales tax receivable - Canada		6		4,866
Other current assets		516		680
Total	$	10,675	$	11,049

Schedule of other current liabilities

(in thousands)	September 30, 2022		December 31, 2021
Short-term lease liability	$	1,572	$	1,606
Accrued job cost		1,318		2,433
Cloud computing software liability		692		-
Stock Compensation		418		938
Legal fees		245		113
Sales tax payable - Canada		-		5,135
Other current liabilities		385		792
Total	$	4,630	$	11,017

Schedule of other long-term assets

(in thousands)	September 30, 2022		December 31, 2021
Right-of-use lease assets	$	3,738	$	1,527
Equity method investment in RCC		1,848		2,521
Unamortized Debt Issuance Cost		1,223		1,509
Unamortized cloud computing software		757		—
Other long-term assets		166		155
Total	$	7,732	$	5,712

Schedule of other long-term liabilities

(in thousands)	September 30, 2022		December 31, 2021
Long-term lease liability	$	2,582	$	511
Liability for uncertain tax positions		1,102		1,136
Other long-term liabilities		756		-
Total	$	4,440	$	1,647

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LIQUIDITY (Details) $ in Millions		3 Months Ended		6 Months Ended
	Oct. 13, 2022 USD ($)	Dec. 31, 2022 USD ($)	Sep. 30, 2022 USD ($)	Dec. 31, 2022 item claim
Loss Contingencies [Line Items]
Number of cash receipts | item				2
Number of legal claims settled | claim				2
Term loan
Loss Contingencies [Line Items]
Repayment of debt			$ 8.1
Revolving Credit Facility | Subsequent Event
Loss Contingencies [Line Items]
Repayment of debt	$ 2.7	$ 2.7
Arbitration relating to restatement of financial statements | Other income
Loss Contingencies [Line Items]
Cash collection related to arbitration against third party			8.1
Arbitration relating to restatement of financial statements | Term loan | Other income
Loss Contingencies [Line Items]
Cash collection related to arbitration against third party			8.1
Litigation against former executive and employer | Subsequent Event
Loss Contingencies [Line Items]
Cash collection related to arbitration against third party	2.7
Litigation against former executive and employer | Other income
Loss Contingencies [Line Items]
Cash collection related to arbitration against third party			$ 2.7
Litigation against former executive and employer | Other income | Subsequent Event
Loss Contingencies [Line Items]
Cash collection related to arbitration against third party	$ 2.7

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LEASES (Details) - USD ($)		3 Months Ended		9 Months Ended
	Sep. 02, 2021	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Lessee, Lease, Description [Line Items]
Leases contain renewal options				true
Lease agreement term	10 years
Lease Liabilities	$ 3,300,000
Lease liability payment due	$ 2,200,000
Sublease income		$ 14,000	$ 5,000	$ 44,000	$ 5,000
Minimum
Lessee, Lease, Description [Line Items]
Remaining lease term		1 year		1 year
Maximum
Lessee, Lease, Description [Line Items]
Remaining lease term		10 years		10 years

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LEASES - Lease Cost (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Components of lease expense:
Operating lease cost	$ 549,000	$ 619,000	$ 1,668,000	$ 1,711,000
Short-term lease cost	2,125,000	1,051,000	5,353,000	2,484,000
Sublease income	(14,000)	(5,000)	(44,000)	(5,000)
Total lease cost	$ 2,660,000	$ 1,665,000	$ 6,977,000	$ 4,190,000

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LEASES - Right-of use Assets and Lease Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Right-of-use assets	$ 3,738	$ 1,527
Short-term lease liabilities	1,572	1,606
Long-term lease liabilities	2,582	511
Total lease liabilities	4,154	2,117
Other long-term assets
Right-of-use assets	$ 3,738	$ 1,527
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Other Assets, Noncurrent	Other Assets, Noncurrent
Other current liabilities
Short-term lease liabilities	$ 1,572	$ 1,606
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Other Liabilities, Current	Other Liabilities, Current
Other long-term liabilities
Long-term lease liabilities	$ 2,582	$ 511
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]	Other Liabilities, Noncurrent	Other Liabilities, Noncurrent

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LEASES - Supplemental Information (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
LEASES
Cash paid for amounts included in the measurement of lease liabilities: Operating cash used by operating leases	$ 1,810	$ 1,810
Right-of-use assets obtained in exchange for new operating lease liabilities	$ 3,669	$ 1,549
Weighted-average remaining lease term - operating leases	5 years 4 months 2 days	1 year 5 months 19 days
Weighted-average remaining lease term - finance leases	1 year 5 months 23 days	2 years 5 months 23 days
Weighted-average discount rate - operating leases	9.00%	9.00%
Weighted-average discount rate - finance leases	9.00%	9.00%

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LEASES - Remaining Lease Payments (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Operating leases maturities:
Remainder of 2022	$ 557
2023	1,490
2024	653
2025	375
2026	381
Thereafter	1,873
Total lease payments	5,329
Less: interest	(1,183)
Present value of lease liabilities	4,146
Finance leases maturities:
Remainder of 2022	1
2023	6
2024	1
Total lease payments	8
Present value of lease liabilities	$ 8

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CHANGES IN BUSINESS - Discontinued Operation and Disposition (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
	May 12, 2021	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	Jul. 11, 2018
Liabilities:
Current liabilities of discontinued operations		$ 106		$ 106		$ 316
Long-term liabilities of discontinued operations		3,513		3,513		4,250
Income (loss) before income taxes
Interest expense, net		1,485	$ 1,227	3,965	$ 3,733
Income (loss) from discontinued operations before income tax		(45)	(34)	(92)	130
Income tax expense (benefit)		(3)	22	(626)	59
Income (loss) from discontinued operations		(42)	(56)	534	71
Discontinued operations, disposed of by means other than sale | Electrical Solutions | Pension
Liabilities:
Liability for pension obligation							$ 2,900
Decrease in liability for pension obligation	$ 300
Income (loss) before income taxes
Expected Periodic Payment	$ 300
Discontinued operations disposed of by sale
Income (loss) before income taxes
General and administrative expenses			5		39
Interest expense, net		45	46	75	76
Income (loss) from discontinued operations before income tax		(45)	(34)	(92)	130
Income tax expense (benefit)		(3)	22	(626)	59
Income (loss) from discontinued operations		(42)	(56)	534	71
Discontinued operations disposed of by sale | Electrical Solutions And Mechanical Solutions
Assets and liabilities
Assets of discontinued operations		0		0		0
Liabilities:
Current liabilities of discontinued operations		106		106		316
Liability for pension obligation		2,307		2,307		2,368
Liability for uncertain tax positions		1,206		1,206		1,882
Long-term liabilities of discontinued operations		3,513		3,513		4,250
Total liabilities of discontinued operations		$ 3,619		3,619		$ 4,566
Discontinued operations disposed of by sale | Electrical Solutions
Income (loss) before income taxes
Loss (gain) on disposal - Electrical Solutions			$ (17)	$ 17	$ (245)

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REVENUE - Disaggregation of revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Disaggregation of revenue
Revenue	$ 56,685	$ 73,351	$ 182,303	$ 225,773
Variable consideration
Maximum limited warranty term			2 years
U.S.
Disaggregation of revenue
Revenue	56,685	64,379	$ 176,801	197,287
Canada
Disaggregation of revenue
Revenue		8,972	5,502	28,486
Cost-plus reimbursement contracts
Disaggregation of revenue
Revenue	44,237	63,363	138,263	201,027
Fixed-price contracts
Disaggregation of revenue
Revenue	$ 12,448	$ 9,988	$ 44,040	$ 24,746

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REVENUE - Contract assets and the contract liabilities (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Changes in the contract assets and the contract liabilities
Costs incurred on uncompleted contracts	$ 55,936	$ 66,590	$ 173,564	$ 203,561
Earnings recognized on uncompleted contracts	749	6,761	8,739	22,212
Total	56,685	73,351	182,303	225,773
Less - billings to date	(50,049)	(63,034)	(175,667)	(215,456)
Net	6,636	10,317	6,636	10,317
Contract assets	10,076	12,811	10,076	12,811	$ 12,683
Contract liabilities	(3,440)	$ (2,494)	(3,440)	$ (2,494)	$ (3,412)
Revenue recognized from contracts in progress liability balance at September 30, 2022	$ 100		$ 2,200

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REVENUE - Remaining Performance Obligations (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Transaction price allocated to the remaining performance obligations
Remaining performance obligation	$ 352,723
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01
Transaction price allocated to the remaining performance obligations
Remaining performance obligation	$ 64,529
Expected timing of satisfaction	3 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Transaction price allocated to the remaining performance obligations
Remaining performance obligation	$ 122,093
Expected timing of satisfaction	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Transaction price allocated to the remaining performance obligations
Remaining performance obligation	$ 61,135
Expected timing of satisfaction	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01
Transaction price allocated to the remaining performance obligations
Remaining performance obligation	$ 104,966
Expected timing of satisfaction	1 year

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EARNINGS (LOSS) PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
EARNINGS PER SHARE
Common stock, shares outstanding	26,422,761	25,915,502	26,422,761	25,915,502	25,939,621
Net income (basic and diluted):
Income (loss) from continuing operations	$ 3,610	$ 794	$ (3,728)	$ 1,857
Basic income (loss) per common share:
Weighted average common shares outstanding	26,102,308	25,699,545	26,009,465	25,306,130
Basic income (loss) per common share	$ 0.14	$ 0.03	$ (0.14)	$ 0.07
Diluted income (loss) per common share:
Weighted average common shares outstanding	26,102,308	25,699,545	26,009,465	25,306,130
Diluted effect:
Unvested portion of restricted stock units and awards	335,373	807,030		791,570
Weighted average diluted common shares outstanding	26,437,681	26,506,575	26,009,465	26,097,700
Diluted income (loss) per common share	$ 0.14	$ 0.03	$ (0.14)	$ 0.07
Restricted Stock
EARNINGS PER SHARE
Unvested restricted stock included in reportable shares	321,142	215,956	321,142	215,956

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EARNINGS (LOSS) PER SHARE - Antidilutive (Details) - Restricted Stock - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Service-based Restricted stock unit awards
Anti-dilutive shares	573,517	16,666	229,102
Unvested performance- and market-based restricted stock unit awards
Anti-dilutive shares	887,559	833,111	887,559	833,111

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INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income tax expense (benefit)	$ (272)	$ (6)	$ (214)	$ 256
Effective income tax rate for continuing operations	(8.20%)	(0.80%)	5.40%	12.10%
Tax expense (benefit) computed at the maximum U.S. statutory rate, as a percent			21.00%
Increase (decrease) in Income Taxes	$ (300)		$ (500)
Income tax provision partially offset		$ 300		$ 200
Deferred tax liabilities, indefinite-lived intangibles	2,300		2,300
Amount of future financial taxable income needed to realize deferred tax assets	12,400		12,400
Amount of future financial taxable income needed to realize deferred tax assets	287,200	270,400	287,200	270,400
Indefinite lived deferred tax assets attributable to net operating losses	6,800		6,800
Increase (decrease) in indefinite-lived deferred tax assets related to interest expense			3,400
Deferred Federal Employer Payroll Taxes, Coronavirus Aid, Relief and Economic Security Act	4,900		4,900
Long Term Liabilities Of Discontinued Operations And Other Long Term Liabilities
Unrecognized tax benefits	2,300	3,000	2,300	3,000
Accrued interest and penalties related to uncertain income tax positions	1,100		1,100
Long Term Liabilities Of Discontinued Operations And Other Long Term Liabilities | Discontinued Operations
Unrecognized tax benefits	1,200	1,900	1,200	1,900
Accrued interest and penalties related to uncertain income tax positions	500		500
Canada
Foreign tax rate differences, amount		$ (600)		$ (700)
Deferred tax assets accrued	200		200
Undistributed earnings of the foreign subsidiaries	5,100		$ 5,100
US-Canada treaty rate			5.00%
Deferred tax liability, undistributed foreign earnings	300		$ 300
Deferred income tax liabilities related to indefinite-lived intangibles	$ 300		$ 300

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DEBT (Details) - USD ($)		3 Months Ended		9 Months Ended
	Aug. 03, 2022	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	Dec. 16, 2020
Debt
Current portion of term loan		$ 1,050,000		$ 1,050,000		$ 1,050,000
Current debt		15,575,000		15,575,000		1,726,000
Debt discount		(50,000)	$ (50,000)	(150,000)	$ (150,000)
Unamortized deferred financing fees		(3,470,000)		(3,470,000)		(4,081,000)
Long-term debt, net		21,809,000		21,809,000		30,328,000
Total debt, net		37,384,000		37,384,000		32,054,000
Amounts drawn upon letters of credit		0		0
Cash collateral for letters of credit		900,000		900,000
Amortization of deferred financing costs				636,000	623,000
Amortization of deferred financing costs excluding those costs written off upon extinguishment of debt.		271,000	259,000	786,000	774,000
Arbitration relating to restatement of financial statements | Other income
Debt
Net proceeds		8,100,000
Long-term debt, net
Debt
Debt discount		641,000		$ 641,000		791,000
Term Loan Facility
Debt
Default spread on interest rate (as a percent)				2.00%
Threshold excess cash flow				$ 500,000
Term Loan Facility | Minimum
Debt
Outstanding principal that can be prepaid in whole or in part		1,000,000.0		1,000,000.0
Revolving Credit Facility
Debt
Cash collateral for letters of credit		400,000		400,000
Revolving Credit Facility | Minimum
Debt
Required minimum prepayment amount				0
Term loan
Debt
Maximum borrowing capacity							$ 50,000,000.0
Term loan, periodic principal repayment		300,000
Reduction in term loan		8,400,000
Current portion of term loan		1,050,000		1,050,000		1,050,000
Term loan, noncurrent portion of long-term debt		24,056,000		24,056,000		32,900,000
Debt discount		(641,000)		(641,000)		(791,000)
Unamortized deferred financing fees		(1,606,000)		(1,606,000)		(1,781,000)
Total debt, net		25,100,000		25,100,000		34,000,000.0
Repayment of debt		8,100,000
Amortization of deferred financing costs excluding those costs written off upon extinguishment of debt.		125,000	113,000	350,000	338,000
Payments of financing costs	$ 200,000
Debt instrument provision percentage	1.00%
Debt Instrument provision percentage year one	3.00%
Debt Instrument provision percentage year two	2.00%
Debt Instrument provision percentage year three	1.00%
Scheduled maturities of the New Centre Lane Facility
Term loan		24,056,000		$ 24,056,000		32,900,000
Term loan | Arbitration relating to restatement of financial statements | Other income
Debt
Net proceeds		8,100,000
Term loan | If Total Leverage Ratio is Greater Than 3.00
Debt
Interest rate if required threshold leverage ratio is maintained				50.00%
Term loan | If Total Leverage Ratio is Equal to or Less Than 3.00 and Greater Than 2.00
Debt
Interest rate if required threshold leverage ratio is maintained				25.00%
Term loan | Minimum
Debt
Threshold total leverage ratio under debt instrument				2.50
Term loan | Minimum | If Total Leverage Ratio is Greater Than 3.00
Debt
Threshold total leverage ratio under debt instrument				3
Term loan | Minimum | If Total Leverage Ratio is Equal to or Less Than 3.00 and Greater Than 2.00
Debt
Threshold total leverage ratio under debt instrument				2
Term loan | Maximum
Debt
Number of days within which obligations must be prepaid subject to thresholds (in days)				120 days
Default spread on interest rate (as a percent)				2.50%
Term loan | Maximum | If Total Leverage Ratio is Equal to or Less Than 3.00 and Greater Than 2.00
Debt
Threshold total leverage ratio under debt instrument				3
Term loan | Long-term debt, net
Debt
Unamortized deferred financing fees		(1,606,000)		$ (1,606,000)		(1,781,000)
Term loan | Base Rate loans
Debt
Interest rate percentage (as a percent)				9.00%
Term loan | SOFR
Debt
Interest rate percentage (as a percent)				8.50%
Term loan | SOFR | Minimum
Debt
Floor rate (as a percent)				1.00%
Closing Date Term Loan
Debt
Maximum borrowing capacity							35,000,000.0
Delayed Draw Term Loan Facility
Debt
Maximum borrowing capacity							15,000,000.0
Senior Secured Asset-Based Revolving Line Of Credit
Debt
Maximum borrowing capacity							$ 30,000,000.0
Current debt		14,525,000		$ 14,525,000		676,000
Total liquidity		7,300,000		7,300,000
Closing fee under the line of credit facility				$ 200,000
Unused line fee (as a percent)				0.25%
Collateral monitoring fee				$ 2,500
Early termination fee				2.00%
Senior Secured Asset-Based Revolving Line Of Credit | If Early Termination Occurs on or Prior to First Anniversary of Closing Date
Debt
Early termination fee				1.00%
Senior Secured Asset-Based Revolving Line Of Credit | If Early Termination Occurs After First Anniversary of Closing Date
Debt
Fronting fee				0.25%
Senior Secured Asset-Based Revolving Line Of Credit | Other Noncurrent Assets
Debt
Unamortized deferred financing fees		(1,223,000)		$ (1,223,000)		(1,509,000)
Senior Secured Asset-Based Revolving Line Of Credit | Base Rate loans
Debt
Interest rate percentage (as a percent)				1.25%
Senior Secured Asset-Based Revolving Line Of Credit | SOFR
Debt
Interest rate percentage (as a percent)				2.25%
Floor rate (as a percent)				1.00%
Senior Secured Asset-Based Revolving Line Of Credit | Canadian Dollar Offered Rate
Debt
Floor rate (as a percent)				1.00%
Default spread on interest rate (as a percent)				2.00%
Swing Loan Member
Debt
Maximum borrowing capacity		3,000,000.0		$ 3,000,000.0
Letters of credit
Debt
Maximum borrowing capacity		2,000,000.0		2,000,000.0
Outstanding borrowings		500,000		500,000
Canadian Dollar Loans
Debt
Maximum borrowing capacity		5,000,000.0		5,000,000.0
Revolving Credit Facility
Debt
Amortization of deferred financing costs		96,000	$ 96,000	286,000	$ 286,000
Payment Surety Bond
Debt
Outstanding surety bond		$ 65,600,000		$ 65,600,000
Performance Bond
Debt
Outstanding surety bond						$ 67,600,000
Amendment of Revolving Credit Facility
Debt
Payments of financing costs	$ 25,000

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COMMITMENTS AND CONTINGENCIES (Details) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2022 USD ($)	Sep. 30, 2022 USD ($)
COMMITMENTS AND CONTINGENCIES
Employee severance benefits	$ 6.4	$ 6.4
Insurance expense	1.6	4.7
Cash collateral for letters of credit	0.9	0.9
Non-depleting cash collateral	$ 1.5	$ 1.5

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STOCK-BASED COMPENSATION PLANS (Details) $ / shares in Units, $ in Thousands			3 Months Ended			9 Months Ended
	Jun. 15, 2021 $ / shares shares	May 17, 2021 $ / shares shares	Sep. 30, 2022 USD ($) D item $ / shares shares	Mar. 31, 2022 shares	Sep. 30, 2021 USD ($) $ / shares shares	Sep. 30, 2022 USD ($) D item $ / shares shares	Sep. 30, 2021 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation | $						$ 1,120	$ 2,579
Stock-based compensation expense | $			$ 500		$ 1,100	$ 1,100	$ 2,600
2016 LTI program
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock price per share | $ / shares			$ 5.50			$ 5.50
Number of consecutive trading days | D			30			30
2017 LTI program
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock price per share | $ / shares			$ 6.00			$ 6.00
Number of consecutive trading days | D			30			30
2018 LTI program
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting shares of restricted stock awards						189,640
Stock price per share | $ / shares			$ 5.00			$ 5.00
Number of consecutive trading days | D			30			30
2018 LTI program | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock price per share | $ / shares			$ 5.00			$ 5.00
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested restricted stock included in reportable shares			321,142		215,956	321,142	215,956
Restricted Stock | 2022 LTI & 2015 Plan | Performance Vesting
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual performance objective term						3 years
Restricted Stock | 2022 LTI & 2015 Plan | Performance Vesting | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award payouts						50.00%
Restricted Stock | 2022 LTI & 2015 Plan | Performance Vesting | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award payouts						200.00%
Restricted Stock | Modification to 2021 LTI | Performance Vesting
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Cumulative effect of compensation expense reversal | $						$ 300
Adjusted vesting percentage on original cash value						55.00%
Unrecognized compensation expense related to unvested restricted stock award | $			$ 500			$ 500
Restricted Stock | Modification to 2020 Long-term Incentive Program | Performance Vesting
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Cumulative effect of compensation expense reversal | $						$ 500
Restricted Stock | 2021 long-term incentive program and 2015 plans | Service-based Restricted stock unit awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)							307,616
Weighted average grant date fair value | $ / shares					$ 3.48		$ 3.48
Restricted Stock | 2021 long-term incentive program and 2015 plans | Performance Vesting
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual performance objective term							3 years
Aggregate cash Value | $							$ 2,200
Restricted Stock | 2021 long-term incentive program and 2015 plans | Performance Vesting | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award payouts						50.00%	50.00%
Restricted Stock | 2021 long-term incentive program and 2015 plans | Performance Vesting | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award payouts						200.00%	200.00%
Restricted Stock | Outside of 2015 Plan | Performance and Service Vesting
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)		37,500
Weighted average grant date fair value | $ / shares		$ 5.00
Restricted Stock | Non-employee director | 2015 Equity Incentive Plan | Service-based Restricted stock unit awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)						291,894
Weighted average grant date fair value | $ / shares			$ 1.85			$ 1.85
Restricted Stock | Employees | 2022 LTI & 2015 Plan | Service-based Restricted stock unit awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)						362,356
Weighted average grant date fair value | $ / shares			1.99			$ 1.99
Restricted Stock | Employees | 2022 LTI & 2015 Plan | Performance Vesting
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)						724,726
Weighted average grant date fair value | $ / shares			$ 1.99			$ 1.99
Service-based Restricted stock unit awards | 2015 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	41,666
Weighted average grant date fair value | $ / shares	$ 6.27
Vesting on the date of grant | 2015 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting shares of restricted stock awards	25,000
Vesting on March 31, 2022 | 2015 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting shares of restricted stock awards				8,333
Vesting on March 31, 2023 | 2015 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested restricted stock included in reportable shares	8,333
Cash-based Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of cash based awards | item			1			1

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OTHER SUPPLEMENTAL INFORMATION - Other current assets (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Unamortized commercial insurance premiums	$ 3,674	$ 2,389
Litigation settlement receivable	2,675
Security deposits - real estate	1,978	1,978
Prepaid expenses	1,826	1,136
Other current assets	516	680
Total	10,675	11,049
Canada
Sales tax receivable	$ 6	$ 4,866

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OTHER SUPPLEMENTAL INFORMATION - Other current liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Short-term lease liability	$ 1,572	$ 1,606
Accrued job cost	1,318	2,433
Cloud computing software liability	692
Stock Compensation	418	938
Legal fees	245	113
Other accrued liabilities	385	792
Total	$ 4,630	11,017
Canada
Sales tax payable - Canada		$ 5,135

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OTHER SUPPLEMENTAL INFORMATION - Other long-term assets (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Right-of-use lease assets	$ 3,738	$ 1,527
Unamortized Debt Issuance Cost	1,223	1,509
Unamortized cloud computing software	757
Other long-term assets	166	155
Total	7,732	5,712
RCC
Equity method investment in RCC	$ 1,848	$ 2,521

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OTHER SUPPLEMENTAL INFORMATION - Other long-term liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
OTHER SUPPLEMENTAL INFORMATION
Long-term lease liability	$ 2,582	$ 511
Liability for uncertain tax positions.	1,102	1,136
Other long-term liabilities	756
Total	$ 4,440	$ 1,647

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SUBSEQUENT EVENTS (Details) - USD ($) $ in Millions		3 Months Ended
	Oct. 13, 2022	Dec. 31, 2022	Sep. 30, 2022
Litigation against former executive and employer | Other income
Subsequent Event [Line Items]
Cash collection related to arbitration against third party			$ 2.7
Subsequent Event | Litigation against former executive and employer
Subsequent Event [Line Items]
Cash collection related to arbitration against third party	$ 2.7
Subsequent Event | Litigation against former executive and employer | Other income
Subsequent Event [Line Items]
Cash collection related to arbitration against third party	2.7
Subsequent Event | Revolving Credit Facility
Subsequent Event [Line Items]
Repayment of debt	$ 2.7	$ 2.7