UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): January 13, 2020

 

 

Williams Industrial Services Group Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

 

001-16501

 

73-1541378

(State or Other Jurisdiction of
Incorporation)

 

(Commission
File Number)

 

(IRS Employer
Identification Number)

 

100 Crescent Centre Parkway, Suite 1240

Tucker, Georgia 30084

(Address of Principal Executive Offices, Zip Code)

 

Registrant’s telephone number, including area code: 770-879-4400

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o                              Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o                              Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o                              Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o                              Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class

 

Trading Symbol(s)

 

Name of Each Exchange on Which Registered

None

 

N/A

 

N/A

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company       o

 

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.  o

 

 

 

 

Item 1.01                                           Entry into a Material Definitive Agreement.

 

On January 13, 2020, Williams Industrial Services Group Inc. (the “Company”) amended each of its outstanding credit agreements, as further described below.

 

Amendment to the Centre Lane Agreement

 

The Company previously disclosed that it entered into certain amendments to its Senior Secured Credit Agreement, dated September 18, 2018, by and among the Company, as borrower, Centre Lane Partners Master Credit Fund II, L.P., an affiliate of Centre Lane Partners, LLC, as administrative agent and collateral agent (“Centre Lane”), and the other lenders from time to time party thereto (as amended or supplemented from time to time, the “Centre Lane Agreement”).

 

On January 13, 2020 (the “CL Closing Date”), the Company entered into the Third Amendment to the Centre Lane Agreement (the “Centre Lane Amendment”) to, among other things, change the leverage ratio requirement to a “net” leverage ratio, enabling the Company to net unrestricted cash and cash equivalents in excess of $2.5 million against its Total Debt (as defined in the Centre Lane Agreement) when determining the total net leverage ratio; amend the calculation of Consolidated Adjusted EBITDA (as defined in the Centre Lane Agreement); revise the required levels of the total net leverage ratio and minimum Consolidated Adjusted EBITDA for certain future periods; decrease the minimum required liquidity to $1.5 million; increase the prepayment premium required when voluntarily prepaying amounts outstanding under the Centre Lane Agreement to 2% for the year following the CL Closing Date and 1% for the second year following the CL Closing Date; require the payment of a $175,000 amendment fee; and make certain other changes to the Centre Lane Agreement, in each case subject to the terms and conditions of the Centre Lane Amendment. The amount of principal indebtedness outstanding under the Credit Lane Agreement remains unchanged.

 

Amendment to the MidCap Agreement

 

The Company also previously disclosed that it entered into certain amendments to its Credit and Security Agreement, dated October 11, 2018, by and among the Company and certain of its wholly-owned U.S. subsidiaries, each as a borrower, MidCap Funding IV Trust, an affiliate of MidCap Financial Trust, as agent and as a lender, and other lenders from time to time party thereto (as amended or supplemented from time to time, the “MidCap Agreement”).

 

On January 13, 2020 (the “MC Closing Date”), the Company entered into the Third Amendment to the MidCap Agreement (the “MidCap Amendment”) to, among other things, extend the maturity date of the revolving loan facility by one year to October 11, 2022 and increase the maximum principal amount of revolving loans by $10.0 million to $25.0 million. The MidCap Amendment also changes the leverage ratio requirement to a “net” leverage ratio, enabling the Company to net unrestricted cash and cash equivalents in excess of $2.5 million against its Total Debt (as defined in the MidCap Agreement) when determining the total net leverage ratio; amends the calculation of consolidated adjusted EBITDA; revises the required levels of the total net leverage ratio and minimum consolidated adjusted EBITDA for certain future periods; requires the payment of a $150,000 amendment fee; increases the monthly collateral management fee and a certain prepayment fee; and makes certain other changes to the MidCap Agreement, in each case subject to the terms and conditions of the MidCap Amendment.

 

In addition to the above, both the Centre Lane Amendment and the MidCap Amendment require certain Canadian subsidiaries of the Company to become guarantors under the respective credit agreement and to grant liens on their assets to secure such guarantees, and the Company is required to complete its proposed rights offering, for which it filed a Registration Statement on Form S-1 (File No. 333-234702) on November 14, 2019, on or before March 13, 2020. The Company does not have any obligation to repay debt under the MidCap Agreement with the proceeds of the rights offering and Centre Lane has agreed to exclude the proceeds of the rights offering from the applicable mandatory prepayment provisions of the Centre Lane Agreement. Therefore, as previously disclosed, the Company expects to use the net proceeds from the rights offering and the refinancing for working capital and general corporate purposes to fund the Company’s strategic growth initiatives.

 

The Company expects to include each of the Centre Lane Amendment and MidCap Amendment as an exhibit to a future periodic report, to be filed with the U.S. Securities and Exchange Commission. The foregoing descriptions do not constitute a complete summary of the terms of the Centre Lane Amendment or the MidCap Amendment and are qualified in their entirety by reference to the full text of the respective amendment.

 

 

Item 2.03                                           Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.

 

Item 8.01                                           Other Events.

 

On January 15, 2020, the Company issued a press release relating to the matters described in this report, a copy of which is attached hereto as Exhibit 99.1.

 

Item 9.01                                           Financial Statements and Exhibits.

 

Exhibit Number

 

Description

 

 

 

99.1

 

Press release, dated January 15, 2020.

 

 

SIGNATURE

 

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

 

Dated: January 15, 2020

 

 

 

 

Williams Industrial Services Group Inc.

 

 

 

 

 

 

 

By:

/s/ Charles E. Wheelock

 

 

Charles E. Wheelock

 

 

Senior Vice President, Chief Administrative Officer, General Counsel and Secretary

 

Exhibit 99.1

 

NEWS RELEASE

 

Williams Industrial Services Group Inc. · 100 Crescent Centre Parkway, Suite 1240 · Tucker, GA 30084

 

FOR IMMEDIATE RELEASE

 

Williams Industrial Services Group Increases
Revolving Credit Facility to $25 million to Fund
Strategic Growth Initiatives

 

ATLANTA, January 15, 2020 — Williams Industrial Services Group Inc. (OTCQX: WLMS) (“Williams” or the “Company”), a construction and maintenance services company, announced it has successfully amended the terms of its revolving credit facility with Midcap Financial (the “Revolver”), increasing borrowing capacity by $10 million to $25 million and extending the maturity of the facility by one year to October 11, 2022.  In addition, the structure of its $35 million term loan (the “Term Loan”) has been simplified through consolidation under the lead lender.  Terms governing both the Revolver and Term Loan were amended to accommodate the Company’s growth.

 

Randy Lay, Chief Financial Officer, commented, “We are executing well on our strategic initiatives to expand our core business while also growing and diversifying revenue through new customers and markets.  We made solid progress in 2019, evidenced by approximately $490 million in preliminary total backlog at year end of which approximately $190 million is expected to convert to revenue in 2020.  In light of this momentum, we expanded our Revolver to provide us the necessary funding to deliver on our building backlog.  This also enables us to launch the $7 million rights offering (the “Rights Offering”) with the full backstop provided by our largest shareholder.  We expect the registration statement we filed with the Securities and Exchange Commission (“SEC”) on Form S-1 relating to the Rights Offering to become effective in time for us to commence the offering process by the end of January.  The additional working capital from the expanded Revolver and the Rights Offering positions us well to appreciably advance our strategic plan.”

 

Under the terms of the amendments, the interest rates remain the same.  As a result of the increased borrowing capacity under the Revolver, the overall blended lending rate has improved.  The Revolver interest rate is LIBOR plus 6%, with a minimum LIBOR floor of 1%.  The Term Loan interest rate is LIBOR plus 10% with a minimum LIBOR floor of 2.5%.  Additional details regarding the amendments can be found in the Form 8-K filed by the Company with the SEC today.

 

About the Registration Statement

 

The Registration Statement has been filed with the SEC, but has not yet become effective.  The Company may not accept any offers pursuant to the Rights Offering prior to the time the Registration Statement becomes effective.

 

For additional information on the Rights Offering, please see the prospectus included in Williams’ Registration Statement on Form S-1, which is preliminary and subject to completion, and amendments to be filed with the SEC prior to the commencement of the Rights Offering.  The completion of the

 

 

Williams Industrial Services Group Increases Revolving Credit Facility to $25 million to Fund Strategic Growth Initiatives
January 15, 2020
Page 2 of 2

 

Rights Offering remains subject to the satisfaction of certain conditions, and Williams reserves the right to terminate the Rights Offering at any time prior to the expiration date of the Rights Offering.  There can be no assurance that the Rights Offering will be commenced or consummated.

 

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state

 

About Williams
Williams Industrial Services Group Inc. has been safely helping plant owners and operators enhance asset value for more than 50 years.  The Company provides a broad range of construction, maintenance and support services to customers in energy, power and industrial end markets. Williams’ mission is to be the preferred provider of construction, maintenance, and specialty services through commitment to superior safety performance, focus on innovation, and dedication to delivering unsurpassed value to its customers.

 

Additional information can be found at www.wisgrp.com.

 

Forward-looking Statement Disclaimer

 

This press release contains “forward-looking statements” within the meaning of the term set forth in the Private Securities Litigation Reform Act of 1995.  The forward-looking statements include statements or expectations regarding the Company’s strategic plan and growth initiatives, financial results, the Registration Statement becoming effective, commencement of the proposed Rights Offering, and other related matters.  These statements reflect the Company’s current views of future events and financial performance and are subject to a number of risks and uncertainties, including its ability to safely and effectively support accelerated decommissioning of retired nuclear plants, earn additional contract awards, grow its backlog and execute its strategy. Actual results, performance or achievements may differ materially from those expressed or implied in the forward-looking statements. Additional risks and uncertainties that could cause or contribute to such material differences include, but are not limited to, reduced demand for, or increased regulation of, nuclear power, loss of any of the Company’s major customers, whether pursuant to the loss of pending or future bids for either new business or an extension of existing business, termination of customer or vendor relationships, cost increases and project cost overruns, unforeseen schedule delays, poor performance by its subcontractors, cancellation of projects, competition, including competitors being awarded business by current customers, damage to the Company’s reputation, increased exposure to environmental or other liabilities, failure to comply with various laws and regulations, failure to attract and retain highly-qualified personnel, loss of customer relationships with critical personnel, volatility of the Company’s stock price, deterioration or uncertainty of credit markets, and changes in the economic and social and political conditions in the United States, including the banking environment or monetary policy.

 

Other important factors that may cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the Company’s filings with the SEC, including the section of the Annual Report on Form 10-K for its 2018 fiscal year titled “Risk Factors.” Any forward-looking statement speaks only as of the date of this press release. Except as may be required by applicable law, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, and you are cautioned not to rely upon them unduly.

 

Investor Contact:
Deborah K. Pawlowski
Kei Advisors LLC
(716) 843-3908
dpawlowski@keiadvisors.com

 

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