Williams Industrial Services Group Inc.

Deborah Pawlowski - Investor Relations Craig Holmes - Co-President and Co-Chief Executive Officer Erin Gonzalez - Chief Financial Officer Tracy Pagliara - Co-President and Co-Chief Executive Officer

John Walthausen - Walthausen & Co., LLC Bill Nicklin - Circle N Advisors, LLC Paul Essi - William Woodruff & Company Matthew Pilkington - Strategic Credit Dennis Scannell - Rutabaga Capital Management John Deysher - Pinnacle Capital

Thank you, operator, and good morning, everyone. We certainly appreciate your time today and your interest in Global Power.

On the call with me are Co-Presidents and Co- CEOs, Craig Holmes and Tracy Pagliara; and Chief Financial Officer, Erin Gonzalez. Craig and Erin will lead the call with prepared comments after which we will take questions.

We released after the close of market yesterday, our first and second quarter 2017 financial results and filed the 10-Qs for both of those periods as well. You can find these documents on our website at www.globalpower.com.

You will also find on the website the slides that accompany today's conversation. If you’ll turn to Slide 2 of that deck, I will review the Safe Harbor regarding forward-looking statement.

As you are aware, we may make some forward-looking statements during the formal discussions as well as during the Q&A session. These statements apply to future events that are subject to risks and uncertainties, as well as other factors that could cause actual results to differ materially from what is stated here today.

These risks and uncertainties and other factors are provided in the earnings release as well as with other documents filed with Securities and Exchange Commission. These documents can be found on our website or sec.gov.

During today's call, we will also discuss some non-GAAP financial measures. We believe these will be useful in evaluating our performance.

You should not consider the presentation of this additional information, isolation or the substitute for results prepared in accordance with GAAP. We've provided reconciliation of the non-GAAP measures to comparable GAAP measures in the tables that accompanies yesterday’s release and slides for your information.

So with that, please turn to Slide 3, and I will turn it over to Craig to begin. Craig?

Thank you, Deb, and good morning, everyone. I too want to welcome everybody to the call.

As Co-CEOs, Tracy and I have been aggressively advancing our mission to position our Company with adequate liquidity for future growth and profitability. We are determined in our pursuit to create a business that has a strong future and a clearly defined strategic path that can leverage its talent and experience to improve customer relationships and capitalized on opportunities in new and existing end markets.

This kind of change requires some rather bold strategic moves. In October, we successfully divested of our Mechanical Solutions business and our manufacturing facility in Mexico for net proceeds of about $45 million.

The majority of which was used to reduce debt and provide liquidity for other businesses. As we look strategically to add other opportunities for the Company, we recognized that similar to the Mechanical Solutions business, the Electrical Solutions business would also be better suited with the strategic partner that has the necessary capital resources that Electrical Solutions team could then used to invest in its operations and growth.

We also believe our shareholders will benefit from reduced debt and improved overall capital structure. We have initiated the evaluation of strategic alternatives for this business and have retained an investment banker to facilitate the process.

We can't guarantee when or at an acceptable strategic alternative will be available, but we will provide updates as future information becomes known. We have determined that our services, our largest business is the best area for us to focus our resources going forward.

We are working to expand the capabilities of the segment while pursuing a larger pipeline of opportunities. Also, we continue to be focused on liquidity at the corporate level.

As such, we are doing increasingly more stringent disciplines around working capital and management of operating expenses. In addition, we are making investments in personnel so that we can retain the talent we need as we reorganized and refocus the business.

I mentioned in September, how we have embraced a culture centered around our core values of safety, integrity, excellence, and results. During periods of significant challenges and stress, it is these core values within our organization that enable our people to drive through change and emerge stronger.

Now looking to our businesses. We had disclosed our revenue expectations for the first half of 2017 when we reported our 2016 results and as expected 2017 had a slow start to the year.

Given the divestiture of Mechanical Solutions in October, I am not going to spend time on it, except to say that we are very pleased with the timing and proceeds from the sale. Our ability to take down almost $36 million in debt from the sales proceeds was critical, so that entering 2018 we were not further penalized with an even higher cost capital structure than we currently have.

Our Electrical Solutions business had some operational challenges in the first half. Our Indiana and Idaho operations have been improving the timeliness of deliveries and quality of their product for their customers throughout 2017.

Our Houston plant continues to address some difficult issues tied to several large complex projects, but I am pleased to report that those complex projects that had caused the bottleneck in the facility are finally being delivered. This puts the Electrical Solutions business in a much better position going forward.

As we look towards 2018, our focus is on enhancing our Services business. We are excited about the potential benefits from our new joint venture with Bechtel and the potential to win additional work on other projects at the Vogtle 3 & 4 site.

Of course, this is dependent upon the Georgia Public Service Commission’s approval of the project as proposed for rate recovery. Their final decision is expected possibly as soon as tomorrow.

As many of you already know, our Services business has been a dependable and strong performer for many years. This business has consistently delivered low to mid-teens gross margins and mid single-digit EBITDA margins.

You can see in our press release that our Services business in the first quarter of 2017 had margins that were negatively impacted by cost for work done on some disputed change orders, which Erin will discuss more in a minute. Q1 results were disappointing, but we do remain optimistic that we will be able to recover some of those costs as we work through the dispute resolution process with our customer.

As you can see in our disclosures, Q2 2017 margins for services returned back to the levels we have seen in prior years. Our Services business has been a great business over a long period driven by the following, a highly respected brand with a rich history of serving blue-chip customers.

Our Services business has been recognized as the leading provider of maintenance, core craft, and highly specialized services to power generation industrial plant. The unique set of broad differentiated and complimentary capabilities competitively differentiates us within the marketplace, a broad geographic reach throughout the United States with opportunities to expand into Canada.

Our Company is recognized as an employer of choice for many highly-skilled craft labor throughout the United States, which enables us to deploy labor where and when it's needed and gives us the flexibility to ramp up our labor force as demand requires. Our experienced team of project managers, job sized supervisors, and other full-time operating employees are recognized for delivering projects on time, on budget with high quality and with strong safety records.

Our respected brands, our diversified services, our geographic reach, our customer and skilled labor relationships, our nuclear expertise together with a high performing operations team creates definite barriers to entry and positions our Services segment for strong performance over the long-term. It is important to recognize that the Services segment has been operating for several years in an extremely challenging environment created by restatement and liquidity issues at the parent company level.

Being a public company under these circumstances has not been good for business. These very public problems have harmed our competitors with damaging propaganda by potential bankruptcies or other potential growing concern issues, which in turn have given our blue-chip customers ample reason to direct projects to our competitors.

Even with this overhang, our Services business had continued to perform reasonably well due to our outstanding team and great long-term relationships with customers. So with that, let me turn it over to Erin for further review of our financial results.

Thank you.

Thank you, Craig, and good morning, everyone. During today's conference call, we will cover the financial results of our first half of 2017 and we will follow the presentation slides provided.

Let me start with revenue and gross profit as summarized on Slide 7 and 8. For the first half of 2017, consolidated revenue declined $71.6 million to $157.9 million, and consolidated gross profit declined $20.9 million to $3.2 million.

These reductions were impacted by divested businesses, lost contract, the loss of a major customer following a plant closure as well as the timing and magnitude of projects. In July 2016, we sold our TOG business and in January 2017, we divested our Hetsco business.

We closed our Chattanooga facility in the third quarter of 2016 and seized operations at our Mexico facility at the end of June 2016. Next, I will comment on the performance of each of our reporting segments, keeping in mind that in October 2017, we divest that our Mechanical Solutions segment.

Revenue for our Services segment declined $25.3 million, compared with the first half of 2016. The decrease in revenue was primarily due to the completion of work for the restart of the new build nuclear reactor resulting in $25.7 million of revenues during the first half of 2016.

We also have $13 million of revenue from large non-recurring fixed-price projects during the first half of last year. The sale of our Hetsco business since January 2017 resulted in a reduction in revenue of $8.7 million.

These decreases were offset by a couple of significant revenue increases. We’ve recorded $20.7 million in revenues during the first half of 2017 for a scheduled outage related to our maintenance and modification contract.

We also recognized $5 million of incremental revenue for nuclear construction site work in the first half of 2017. The overall decline in Services revenue unfavorably impacted gross profit.

The $14.3 million decrease in gross profit includes the accrual of $13.1 million for losses in the first half of 2017 compared with $2.6 million in the first half of 2016. These estimated losses in the first half of 2017 arose from our performance of work under unsigned and subsequently disputed change orders.

We are currently working with our customers to reach resolution on these disputes and a favorable outcome if any could result in the recognition of future revenue and equivalent gross profit. Separately gross profit decreased $3.1 million as a result of the Hetsco divestiture.

Revenue for our Electrical Solutions segment decreased $15.8 million. This includes a decrease of $9.8 million driven partially by the loss of a major customer following the closure of our Chattanooga plant in the third quarter of 2016.

Additionally, we experienced delays in completing projects at our Houston facility, which had an unfavorable impact on revenue of $6 million. Electrical Solutions gross profit decreased $5.6 million on $15.8 million of lower revenue in the first half of 2017.

In addition to the impact of lower revenue, we recorded $3.8 million of cost related to an increase in estimated losses on certain contracts. The incremental amount results from an accrual of $6.5 million for loss contracts for the first six months of 2017, compared with $2.8 million in the comparable prior period.

These losses resulted from the incurrence of liquidated damages due to missed delivery dates as well as operating inefficiencies on certain projects particularly in our Houston facility. These declines were partially offset by a $600,000 increase in gross profits realized from targeted pricing changes, product mix, and improvements in productivity at certain facilities.

Revenue for our Mechanical Solutions segment declined $30.6 million. We experienced lower volume in the first half of 2017 as a result of non-recurring large air intake systems projects in the Middle East in 2016.

Revenue also decreased $3.3 million as a result of the divestiture of our TOG business in July of 2016. Despite lower revenue, Mechanical Solutions gross margin improved to 17.6% while gross profit dollars decreased by $1 million.

Gross margin benefited from $2.6 million of loss contract accruals that were recorded in the first half of 2016 while none were recorded in the first half of 2017. This was partially offset by lower gross profit of $600,000 as a result of the sale of TOG in July of 2016.

Please turn to Slide 9. Looking at operating expenses for the first half of 2017, we continue to make strides in reducing cost to better align with current levels of revenue.

We reduced selling and marketing expenses by $1.5 million primarily due to lower compensation expenses. We also reduced general and administrative expenses by $3.4 million through lowering labor expenses and maintaining a strong cost discipline, particularly regarding travel and entertainment expenses.

In addition, depreciation and amortization expenses decreased by $1.9 million primarily as a result of a decline in depreciable assets resulting from the sales of Hetsco in January of 2017. Several significant non-recurring items were included in total operating expenses in both the first half of 2017 and 2016.

In 2017, we incurred $2.4 million associated with the restatement of certain prior period financial results compared to $4.5 million in 2016. Additionally, in the first half of 2016, we recorded an $8.2 million loss to adjust Hetsco’s net asset as a result of our decision to sell that business.

On Slide 10, we have summarized our operating losses. The Company incurred a $27.5 million operating loss in the first half of 2017.

Now I'll recap these results by segment. Operating loss for our Services segment increased $900,000 to $6.1 million on $25.3 million of lower revenue.

The increased loss was driven by lower gross profit which resulted from the increase in estimated losses on certain fixed-price contract. The increase in operating loss was partially offset by several items.

Results for the first half of 2016 included the $8.2 million loss on Hetsco’s assets held for sale. We also realized $3.3 million of lower operating expenses in the first half of 2017 due to the sale of Hetsco.

Finally, we benefited from a $1.6 million lower operating expenses adjustment upon reorganizing our Williams business unit. Operating loss for our Electrical Solutions segment increased $5.1 million to $8.3 million primarily due to the increase in estimated losses on certain contract and the $15.8 million decrease in revenue.

Operating loss for our Mechanical Solutions segment increased $100,000 to $400,000 primarily due to lower gross profit on $30.6 million of lower revenue and $500,000 of additional severance expenses. These higher costs were partially offset by $900,000 of lower operating expenses due to the sale of TOG and lower compensation expense.

At our corporate levels, operating loss improved $2.6 million to $12.6 million primarily due to lower restatement expenses. Please turn to Slide 11 for a summary of our adjusted EBITDA.

Adjusted EBITDA decreased $15.6 million in the first half of 2017 primarily because gross profit decreased $20.9 million. This decline was partially offset by $4.9 million of lower selling and marketing and general and administrative costs.

Some of the EBITDA adjustments were related to liquidity initiatives including the loss on Hedco assets held for sale and restatement expenses. On Slide 12, we’ve provided an overview of the progress we've made with respect to our new credit facility and other liquidity matters.

As previously communicated, in June of this year, we entered into a $45 million senior secured term loans with an affiliate of Centre Lane Partners. The terms are shown here on the slide and the term loan expires in December 2021.

In August 2017, we amended that facility and added a $10 million first-out term loan, which expires in September of 2018. In October 2017, we sold our Mechanical Solutions segment and we applied $35.9 million of the $44.5 million net proceeds towards debt repayment, which included full repayment of the $10 million first-out loan.

We were also very pleased that this repayment was sufficient to remove the minimum liquidity requirements under the Centre Lane facility and will allow us to avoid a payable-in-kind interest rate increase in January of 2018. In the first half of 2017, our operation used $5.8 million of cash.

To support our U.S. operations, we successfully repatriated $10 million of cash from our Netherlands facility in the first half of 2017.

In November of 2017, we received $6.4 million as a partial payment from pre-petition services due from Westinghouse. As of December 14, 2017, the outstanding balance on our Centre Lane term debt was $25.1 million.

Our cash position as of the same date was $15.4 million, which included $11.8 million of restricted cash that cover our cash collateralized, letters of credit and escrows related to the divestitures of TOG, Hetsco, and Mechanical Solutions. We have been managing our cash position very carefully.

We discussed our opportunities for 2018 and beyond on Slide 13. First as previously mentioned, we are evaluating strategic alternatives for Electrical Solutions.

Successful completion of this initiative could provide us with further liquidity and the ability to further reduce our debt with [indiscernible] as our initiative to create further financial flexibility. We are currently working to secure a new asset-based lending facility.

This could allow us to release the restriction we currently have on $9.7 million of our cash, which is primarily the security for our outstanding letters of credit. We also have ongoing initiatives to improve our working capital, specifically our account receivable, and accounts payable payment cycle.

Also I want to note that we may pursue our refinancing of our existing term-loan under more favorable terms, pending the successful outcome of our Electrical Solutions strategy. From an operational standpoint, our priority is to focus our resources on our Services segment.

Our momentum is building and our opportunity pipeline is developing nicely, both with existing and new customers. We have identified opportunities to further diversify and grow this business.

We believe our operational strength provides us a competitive advantage particularly for nuclear decommissioning work. While we have already significantly reduced our corporate and operating cost base, we have identified further opportunities to better align our cost structure with the current and anticipated future revenue environment.

And lastly, but certainly not least, we believe we are well-positioned to become current with our SEC filings upon completion of our Annual Report on Form 10-K for the year ended December 31, 2017, by the due date of April 2, 2018. Operator, we can now open the line for questions.

Yes. A quick question on the Electrical Solutions group.

You’ve isolated that the issues and profitability in Houston, but it wasn't clear, what you were saying about the trouble or the troublesome contracts there. When will they actually be completed and will there be warranty issues that you will be carrying on deep into next year?

Yes, good morning. Yes, so we've been talking about the problems on our Houston plant for a while.

They are related to some large complex projects that didn't have bottlenecks in the plant. Those projects have already started been delivering – delivered.

So we've seen your truckloads go out over the last few weeks and we expect more truckloads with additional buildings going out over the next few weeks. So we do feel like we’re in a better position as we go forward into 2018.

Your question about warranty exposure is a good one. We certainly – there's a series of final quality tests that we do on the projects as they are shipped.

Customers typically participate in those reviews. We believe that the projects are in good shape.

Historically, we have not had significant warranty issues post delivery and we at this point don't expect that to change.

So with shipments going out are you saying that actually those contracts should be fully shipped in the first quarter or is that something is good going on beyond that?

Definitely in the first quarter, we're seeing in a fourth quarter 2017 and first quarter 2018 shipments for those projects.

Okay. That's helpful.

And then is Houston have a reasonable backlog of business that is less troublesome or is that plant that questionable plant?

No that's the focus. I think it is a large plant and I think that our ability to handle these larger projects is actually a competitive differentiator and if we – earlier in the year, did not have the low property balance in the schedule, properly fine tuned in order to get those projects through the plant in the timeframe that was necessary to avoid the bottlenecks that we experienced.

So as we look forward, we will continue to do larger projects in that plant just because it is a big facility. We were also focused on what I’d say more of the standard, control houses that we've been doing for years and continue to deliver those through that plant as well.

All right. So when I look at the $24 million in Electrical Solutions booked in the first half of this year, was there any significant – were those projects part of the bookings there or are they just part of the cost during that period of time?

So the revenues from those larger Houston projects will be realized here in the fourth quarter and first quarter as I mentioned earlier for the most part.

Right. So those are straight shipment and build to revenues, those want to complete – percentage of completion upgrades like that.

Correct. And so when you think about the cost associated with those projects, those costs would typically be matched to the revenues when those projects are shipped, however.

If you end up with cost exceeding the revenues and you end up with loss contracts, which we did experienced in the first half of the year as Erin mentioned those incremental cost over and above the revenues are accrued in the earlier period. So the revenues will – yes, the revenues will be Q4, Q1, some of the cost have already been recognized in Q1, Q2 2017.

Thanks. Okay, I’ll step back and let somebody else jump in.

Okay. Did I say that correctly Erin?

Yes, you did.

Thanks, Erin. Okay.

Thank you.

Thanks.

Hey, good morning. On the Houston facility, is that owned or is that leased?

That was one of the facilities that was subject to the sale leaseback that we did last year and so it is currently leased – we sold it and leased it back.

All right. Fine.

Today, I had look back and I saw was owned and as it flip my mind that was part of the sale leaseback, what is the current run rate in the Electrical Solutions business and how is that broken down between the different businesses involved in that sector?

So the different businesses…

Well, Koontz this part of what now or is this all Koontz…?

Yes, Electrical Solutions of Koontz-Wagner.

And therefore all that’s in Electrical Solutions and as deal Koontz?

That’s correct.

Okay.

Yes. We acquired IBI – and then we merged it with Koontz-Wagner, so right now it’s just one legal entities and one brand called Koontz-Wagner that makes up a – segment…

All right. Yes, I remember there was another piece to it – I didn’t remember they were merged.

So could you give me some idea at least within some reasonable balance about what the revenue run rate is and what the revenue capacity is in that facility?

So we expect the revenues for Koontz-Wagner to be around $55 million to $60 million for this year, but that's certainly not reflective of what we expect the business to be able to do in the future. So we expect over a five-year that we could have revenues upward of around the $115 million, and so next year we expect it to significantly increase.

It was down this year mostly because of the issues we’ve discussed in Houston and the bottlenecks associated with those projects.

Right. So what I'm getting is that a potential buyer, if they thought they could run the business better than you guys are running it, as looking at a business with a potential revenue someplace between $60 million and $100 million?

Right. So the capacity is there to set to handle the $100 million plus revenues that’s the question.

Yes. I am just trying to do some mental gymnastics to figure out.

What a buyer might be willing to pay for the business, which I am not going to ask you because you are not going to tell me. But once I get the handle on the revenues and what the margins used to be in the business and what margins other guys get in some of your businesses.

We ought to have some idea of what a buyer might pay where you think that would be a reasonable statement?

Right. I mean I think – yes, you can definitely look at your margins, historical current estimates going forward as well as the revenue estimates and translate that into some kind of a calculated value as a buyer work, right.

All right. Good.

Now my next question is then what's going to be left in services and now is services all Williams?

Yes.

Yes.

Right. Okay.

And is there any reason to believe that Williams going forward won’t show similar financial characteristics of the way Williams is operated over the years?

No. I think that was the point I was making in my comments about – historically it has been a – I think low to mid-teens type gross margin business and we expect that to continue going forward.

Okay. So then if I was trying to figure out what the enterprises worth, I can take the cash, the debt whatever number I might put on the value of Electrical Solutions being sold and add that to what Williams would be if it's operating the way it did in the past, and I ought to be able to come up with some kind of a number of what the Global Power is worth?

Absolutely.

All right. Now, I'm getting to the end of my questions.

How much can you say about the Georgia Power contract thing? There is only one-day to go.

Is there some kind of a – unless make an assumption that they get to go ahead from Georgia Power, which thing that Toshiba have ponied up the full amount that they said they were going to – or it would be helpful, but what’s kind of MaxMin, the Georgia Power Bechtel, obviously Georgia Power out, but they're only part of it. Let's say the Bechtel contract – I'm trying to figure out in my mind, how much business is really there, so if you could tell me what you're legally allowed to tell me, I’d appreciate it?

So there's the partnership that's been announced and our participation in the partnership will be accounted for like our GUBMK partnerships that we will recognize net revenues and the net revenues from that partnership are not expected to be significant by any stretch, but there are additional services we are providing. So we're providing supervisory staff and other administrative services for the partnership and other projects for the Vogtle 3 & 4 site in those – we do expect revenues and margins associated with those, the total relationship to be meaningful for our Company going forward.

Okay. Do you think this would be any different than any other similar arrangement that you've had in the past and along with that question if you look at the Bechtel contract and a similar relationship moving forward, what you've seen and the situations like this in the past, what percentage of the Bechtel relationship would you assume would turn into revenues for way of…?

Not sure I've fully followed the question.

Okay, let's say that the Bechtel relationship under the contract that Georgia Power group is $100?

Right.

And that – when you get all said done about how much – what type of work and how much work you're going to do under that kind of track for Bechtel? Traditionally what percentage of the total Bechtel contract or the total cost to Georgia Power and another of that thing that this is going to be a cost again?

What percentage of that do you think would fall to Williams?

So let me – and I appreciate you’re clarifying that. Let me answer the question a little bit different, maybe more specificity even.

As we look forward and we look at the work that we're doing related to that that relationship and we all fall underneath contract as I mentioned earlier because we are providing incremental services for supervision and other administrative support for the partnership that actually fall outside of the partnership contract. But with that being said, we look at that relationship to be a $25 million to $30 million per year relationship that does not include other projects that we're qualified to do and relationship that we have seen come up and become available to us, for Georgia Power or Southern related Vogtle 3 & 4 construction in the future.

So I think it's a $25 million to $30 million associated with work done in and around the partnership. And then additional work is hard to predict, but it's been meaningful in the past.

We got a couple projects they're working on now that fall outside of the partnership, but we would expect that relationship to continue. We have opportunities in our pipeline with Southern Vogtle 3 & 4 for additional project work going forward.

Okay, given a little success in your efforts to get more business could this whole relationship be $100 million a year relationship more or less annually?

I’m sorry. Could you ask the question one more time?

Sure. Sorry, I'm not having clear questions.

All right.

What I'm trying to find out is if you get what you would expect to fall under the contract plus peripheral opportunities and you being – having a reasonable rate of success on the peripheral opportunities. Could there be as much as $100 million a year worth of revenue to Global Power?

I think that’s a – it’s a great question and as I think about the answer to that, we are optimistic about the revenue levels that will be available and one of the data points that we use is – it wasn't that long ago we were working with Bechtel and completing the TVA and Watts Bar nuclear construction projects and in and during the final years of that construction we did see revenues approaching $100 million associated with the work that we were doing.

And that was one reactor right?

That’s too right.

That’s was too, so pretty much very, very similar to this one in that…?

I’m sorry…

Which is one reactor.

That was one yes, work on to now.

Right, well this was twice a thing.

Right.

At least certain aspect of a twice is big, the reactor.

Right, the part of the restructuring work a little bit differently to the partnership arrangement that Bechtel has set up, so there would be differences, but we are optimistic about the amount of work that we can do as this construction project progresses over the next four to five years.

All right. One more question if you don't mind.

How many opportunities for disassembling old nuclear plants or would you expect to see come up over the next couple of years?

So there's actually – so it’s decommissioning – it's a great market for us. We're getting – we’re earning a reputation as we speak on a decommissioning project with a large partner that's focused on decommissioning.

There is currently a five plants being decommissioned as we speak. There's another five that are expected to be decommissioned over the next five to 10 years.

And then as you look beyond 10 years, right now there's another seven plus or minus that have been identified that would be the decommissioning process would be initiated in that post 10-year period.

Okay. And the one you're working on now, what kind of an annual revenue run rate does that look like?

It’s been small today. We're earning our – kind of earning our wins on smaller projects.

So as we look into 2018 and let me just speak more generically because I want to speak about a specific customer relationship, but as we look into 2018 and beyond, we look at the decommissioning size in our core capabilities. We can see revenues on a particular site being significant for planning purposes, we're thinking $10 million to $20 million per site early on as we get more experience we’d expect that to increase.

So that would be 10% to 20% of normal $100 million decontamination – not contamination, but decommissioning project…?

Right, and some – that’s for decommissioning as high as $1 billion.

I see, okay. That’s larger than I have expected.

Very good. I appreciate it.

Let’s hope and get all this accomplished.

Yes, we've made great progress to-date, but we're not quite to the end of the caveat. So thanks for your continued support.

Sure. You're very welcome.

Good morning and thanks for taking my question. I wanted to go back to Electrical.

In the September call you mentioned that you expected margins to get back to normal in 2018. Do you still expect that and what would you consider normal?

Yes. We expect margins to definitely rebound in 2018.

They would probably be somewhere in this 15% to 18% range.

Okay, another operating…?

Yes, those will be the gross margins and we would expect that to be in the normal probably in the high teens for Electrical Solutions.

Okay. How would that work out to be on an operating basis, margin wise?

Probably somewhere on the mid single-digit of 4% to 6% on an EBITDA basis from an operating margin basis.

Okay. One last question.

How much of the backlog is still on a fixed-price basis?

For Services?

In the Electrical – in the Electrical.

It’s all project cost.

It's all fixed price.

Yes.

Okay. And you feel comfortable you have the controls in the Houston facility at this point to achieve the margins you're talking about?

Yes. We have a great management team that absolutely focused on getting these bottlenecks removed and they definitely have a better strategy in place for going forward, so we definitely believe we can achieve them the financial results we need to.

Thank you.

You’re welcome.

Thank you very much.

Good morning. Couple of questions.

The interest rate on the Centre Lane loan is currently LIBOR plus 9%, plus a 10% PIK, is that quarterly - is that a quarterly charge?

We pay cash interest monthly.

And when does it pick? Has it picks on a monthly basis as well?

That’s correct.

And there was a penalty, you talked about which you avoided was that on the $10 million or is that on the Centre Lane larger loan?

That was on the larger loan. So with the debt repayment that we made in October that eliminated the additional PIK interest that would have been on the core loan.

And that additional is additional to the 10% or it was the 10%?

No it was in addition to the 10%.

And that’s the prepayment of 0% to 3% premium on the face value of the loan whenever you prepay?

Yes for the first year.

And then following this normal prepayment penalty.

Yes. So it’s 3% for the first year, for any prepayments for the first year, 2% the second year, 1% the third year, and then 0% after that.

But on our $34 million payment that we made in October, we did not have the prepayment penalty.

And then I feel going for an asset backed loans, if you can get the asset backed loan before sale if it comes of Electrical Solutions, would that cover some of this? I mean, really it goes that crazy line.

I know it’s quite interesting tough times, but it's obviously a very high rate. Would the ABL cover more of that?

Yes.

Okay. Just couple more questions.

To get current on your filings, you only need right now the 10-Q for September 30. Do you say in your press release that you'd be current when you publish your 10-K for 2017 in April, but wouldn’t you be – are you planning to do the Q at the same time or earlier?

We plan to file our third quarter Form 10-Q next month in January.

So wouldn’t then you would be current rather than April of…

That’s correct.

This is a technical discussion as to whether your current when you file it or current when you file currently which would be the fourth quarter.

Yes. So we will be caught up, but we won't technically be current, we won't be technically current until we file the 10-K for 2017, but we will be caught up.

Is that makes sense?

Well, maybe that would suggest me that everybody is not current, if you doesn't follow the 10-K…

Our third quarter Q is filed late.

Okay. So the chance that you’re getting back into the normal exchange would not occur until the K would come out in April?

We wouldn’t qualify until after that.

Yes. Last question – sorry.

Can I clarify one of your earlier questions, so you asked about the revolver and whether that would be used to pay on term debt? The revolver would basically be to – be able to issue new letters of credit and to provide incremental liquidity to sort of smooth out the ebbs and flows of our cash position.

So it wouldn't be used to pay down term debt.

Okay. And then you said something about – one of you guys said that there was a no sign work order, which caused a lot of issues.

I presume that was at the Houston plant. Why would anybody do a no sign work order?

I mean, is that something which is normally done?

Yes, is your question is on services and the issue is when we do work on nuclear site a lot of times and the workers are there for many hours a day and given the nature of the work a lot of times – that there is certain administrative procedures you have to follow in order to get an approved change order and the work can't stop while you're waiting for those administrative procedures to happen, and so that was the case in this one particular instance that caused the issue in our first quarter.

Sure. So this is Craig.

So these outages that are scheduled at the nuclear plants are the other – the short period of time, a lot of the work is getting done because of course the goal is to get the plant back on site. We have teams of people working and assisting with the outages, there are times when on projects that are unknown become necessarily, unknown at the beginning of a project become necessary.

So for example you're moving or replacing a piece of equipment and you find out that the substructure or these equipment once that’s been moved needs to be replaced. That would be something that our customer comes out and say, hey, what we need to reconstruct the substructure?

Can you do that? And you'll have conversations at that point in time about yes there's a scope, here is what that would look like.

And so that back and forth with customers like that during the heat of the battle, one of these nuclear to – one of these outages are occurring that’s have back and forth occurs all the time. With that being said, there's no reason why we would be in a position, where we have literally millions of dollars of change orders that are now being disputed.

There is a poor communication, poor processes on our place, on our side as that we can certainly address and will improve and have already improved that will prevent that type of situation from arising again. It’s been that practice that I described has been typical within the industry, within our customer, within our customer base even in multiple customers and even with this particular customer, we handle change orders in a more immediate less formal process and it's always worked out well.

In this case, it did not and we need to address. We need to address the risk of that occurring in the future, which we have already begun to do, and then we are certainly not giving up on the fact that even though these change orders are being disputed.

Believe that there's still a likelihood that they will be resolved that a certain percentage of the open change orders where we resolved in our favor. So we're going to continue to work with the dispute resolution process and work hard to monetize as much of that work as possible.

Okay. Thank you.

Yes, good morning. I just had a couple quick things.

So it looks like the corporate expense in the segment data has been running around $20 million a year kind of a $25 million run rate, year-to-date in 2017. So if we are successful in selling Electrical Solutions and get reasonable proceeds, we can call back that term.

We're now running just with our Services business, which over the past few years that we've been in operating income level it's kind of generated between $13 million and $16 million. What do you think that corporate expense will look like in terms of how much can you you've reduced that so that we actually get the money going forward?

Yes, we would expect our corporate expenses to be somewhere in the $4 million to $6 million range in the future.

Okay, well that would do it. That's great.

And then so Erin, I'm not sure if I understood the timing on the ABL. Do we need to get – do we need to sell Electrical Solutions and eliminate the term debt to do it to get a revolver on there to fund these letters of credit or can that be done without the sale of Electrical – what’s holding the term loan and without the sale of Electrical Solutions?

It can be done with our business as it is today and in fact we're working on that as we speak.

Okay, great. Good luck on that.

That's great. That's all I have.

Thank you.

Thank you.

Yes. Hi, thanks for taking the question.

I just want to get back to some of the basic that to other company got to – where it is and stated in today. And my first and most obvious question is what took so long for a company of this size to get its accounting rate, so that you could file proper…?

All right. That’s’ a great question and quite honestly we’ve addressed this question before the term I usually use is that this particular restatement was the mother of all restatement.

So literally the company had to go back and recalculate revenue and costs for every transaction in its five-year history. So it could restate the five-year tables in the SEC documents.

It’s very, very complicated, administratively difficult process, literally thousands and thousands of transactions that would be recalculated and then recompiled and then reaudited. So that’s really we gave rise to the length of time involved in the restatement.

Hi, good morning. Back to KW for a second.

You said you’ve hired an investment banker to evaluate strategic alternatives. I was just curious as to where we are in that process in terms of books when put together or have potential parties being contacted.

Where is the sense of urgency in terms of moving this forward?

Hi. This is Tracy Pagliara.

We are actively pursuing the process that's been initiated. We have contacted parties and we’re in discussions with various parties.

So there's a great sense of urgency to move forward as quickly as possible and we’re applying all the necessary resources to move the process to a conclusion as early as possible in the first quarter.

In the first quarter you say. Okay, good.

That's encouraging. Switching gears to Williams, it sounds like the decommissioning arena would be a good one for you.

Obviously a lot of people are probably thinking the same thing. And I'm just curious, you mentioned you were partnering with a decommissioning firm already.

Can you share with us who that is?

We're trying to avoid maybe specific customers and partners for competitive reasons.

Okay. Let me rephrase that.

Who are the major players in the decommissioning market today?

Well, there is a variety out there. I think when I – the way I would address your question is as I think about the type of work that we're qualified to do and where we could play in the decommissioning space is we have experienced working on nuclear sites.

We can certainly handle hazardous material abatement, the lead – asbestos type we can handle the transfer even at nuclear field. We have experience in that.

We’ve worked with the dry storage providers and support companies out there. There is work that could be done to provide temporary utilities power, additional coatings, as decommissioning takes place, site restoration.

Our expertise is all around supervising and managing projects that involve highly-skillet craft labor. And we have a lot of experience working with nuclear sites.

So there's a variety of large companies that would be involved in that and we're certainly open to partnering with any of them.

Okay. At what point do you think you might disclose the decommissioning revenues as a percentage of Williams’ revenues?

I’d like it to be meaningful in 2018. So let's keep that part of the conversation going for 2018.

Okay.

To-date our decommissioning revenues were encouraged because we are doing projects, but the revenues have not been meaningful today.

Right. And that would just give us confidence that in fact you are moving the ball forward on the decommissioning front to be able to disclose what percentage is actually leveraged?

Absolutely, I mean we’re making a note that we made that commitment.

Okay, great. Thank you very much.

You bet.

Thank you. End of Q&A

Well, thank you so much. Yes, let me just conclude by saying that we recognized that we have more work to do, but we are making some nice progress simplifying and strengthening our Company.

The management team and other members of the Global team are working together with a common set of goals and core values to improve performance. I would like to thank all of our investors for your continued patience and support, and I thank the team here at Global Power for all the hard work that they do.

Thanks again. Have a great day.

And I hope you and your family have a wonderful holiday season. Thank you.