UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10Q
Quarterly Report Under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For Quarter Ended January 31, 2003
Commission File No. 0-8190
WILLIAMS INDUSTRIES, INCORPORATED
(Exact name of registrant as specified in its charter)
Virginia 54-0899518
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
8624 J.D. Reading Drive, Manassas, Virginia 20109
(Address of principal executive offices)
P.O. Box 1770, Manassas, VA 20108
(Mailing address of principal executive offices)
(703) 335-7800
(Registrant's telephone number, including area code)
Not Applicable
(Former names, former addresses and former fiscal year,
if change since last report)
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 X NO
Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 126-2 of the Exchange Act).
Yes NO X
As of January 31, 2003, the Registrant had outstanding
3,569,776 shares of Common Stock.
WILLIAMS INDUSTRIES, INCORPORATED
FORM 10-Q
FOR THE QUARTER ENDED JANUARY 31,2003
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION PAGE
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets -
January 31, 2003 and July 31, 2002
(Unaudited) 1
Condensed Consolidated Statements of Operations -
Three months and six months ended January 31,
2003 and 2002 (Unaudited) 2
Condensed Consolidated Statements of Cash Flows -
Six months ended January 31, 2003 and 2002 (Unaudited) 3
Notes to Condensed Consolidated Financial Statements
(Unaudited) 4
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 8
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISKS 13
ITEM 4. CONTROLS AND PROCEDURES 13
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 15
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 16
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 17
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS 17
ITEM 5. OTHER INFORMATION 17
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 17
CERTIFICATIONS AND SIGNATURES 17
WILLIAMS INDUSTRIES, INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
ASSETS
($000 Omitted)
January 31, July 31,
2003 2002
CURRENT ASSETS --------- ---------
Cash and cash equivalents $ 2,658 $ 3,380
Restricted cash 13 50
Certificates of deposit 597 705
Accounts receivable, net 14,676 17,731
Inventory 5,082 4,866
Costs and estimated earnings in excess
of billings on uncompleted contracts 3,179 1,509
Prepaid expenses and other assets 1,981 2,263
--------- ---------
Total current assets 28,186 30,504
--------- ---------
PROPERTY AND EQUIPMENT, AT COST 20,559 20,209
Accumulated depreciation (12,939) (12,238)
--------- ---------
Property and equipment, net 7,620 7,971
--------- ---------
OTHER ASSETS
Deferred income taxes 2,441 2,246
Other 2,196 1,535
--------- ---------
Total other assets 4,637 3,781
--------- ---------
TOTAL ASSETS $40,443 $42,256
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Current portion of notes payable $ 1,836 $ 2,120
Accounts payable 6,341 4,900
Billings in excess of costs and estimated
earnings on uncompleted contracts 3,964 4,104
Deferred income 86 99
Other liabilities 3,958 5,457
--------- ---------
Total current liabilities 16,185 16,680
--------- ---------
LONG-TERM DEBT
Notes payable, less current portion 6,898 7,649
--------- ---------
Total Liabilities 23,083 24,329
--------- ---------
MINORITY INTERESTS 223 212
--------- ---------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock - 3,569,776 and 3,573,021
issued and outstanding 357 358
Additional paid-in capital 16,327 16,348
Retained earnings 453 1,009
--------- ---------
Total stockholders' equity 17,137 17,715
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $40,443 $42,256
========= =========
See Notes To Condensed Consolidated Financial Statements.
WILLIAMS INDUSTRIES, INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
($000 omitted)
Three Months Ended Six Months Ended
January 31, January 31,
2003 2002 2003 2002
REVENUE -------- -------- -------- --------
Construction $ 4,582 $ 5,781 $10,012 $11,547
Manufacturing 7,141 9,302 16,553 16,479
Other 74 38 123 282
-------- -------- -------- --------
Total revenue 11,797 15,121 26,688 28,308
-------- -------- -------- --------
DIRECT COSTS
Construction 3,358 4,033 7,553 8,006
Manufacturing 4,656 5,193 10,748 9,264
-------- -------- -------- --------
Total direct costs 8,014 9,226 18,301 17,270
-------- -------- -------- --------
GROSS PROFIT 3,783 5,895 8,387 11,038
-------- -------- -------- --------
EXPENSES
Overhead 2,055 2,189 3,973 3,847
General and administrative 2,065 2,514 4,060 4,554
Depreciation 410 377 821 753
Interest 150 167 312 340
-------- -------- -------- --------
Total expenses 4,680 5,247 9,166 9,494
-------- -------- -------- --------
(LOSS) EARNINGS BEFORE INCOME
TAXES, AND MINORITY INTERESTS (897) 648 (779) 1,544
INCOME TAX (BENEFIT) PROVISION (284) 260 (234) 618
-------- -------- -------- --------
(LOSS) EARNINGS BEFORE
MINORITY INTERESTS (613) 388 (545) 926
-------- -------- -------- --------
Minority interests (5) (4) (11) (14)
-------- -------- -------- --------
NET (LOSS) EARNINGS $ (618) $ 384 $ (556) $ 912
======== ======== ======== ========
NET (LOSS) EARNINGS PER
COMMON SHARE- BASIC $(0.17) $ 0.10 $ (0.16) $ 0.25
======== ======== ======== ========
NET (LOSS) EARNINGS PER
COMMON SHARE-DILUTED $(0.17) $ 0.10 $ (0.16) $ 0.25
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING: BASIC AND DILUTED 3,571,297 3,571,945 3,572,163 3,583,776
--------- --------- --------- ---------
See Notes To Condensed Consolidated Financial Statements
WILLIAMS INDUSTRIES, INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
($000 Omitted) Six Months Ended
January 31,
2003 2002
-------- --------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES $ 660 $(3,345)
NET CASH USED IN INVESTING ACTIVITIES (325) (621)
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (1,057) 1,865
-------- --------
NET DECREASE IN CASH AND CASH EQUIVALENTS (722) (2,101)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 3,380 3,748
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 2,658 $ 1,647
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Income Taxes $ 177 $ 59
======== ========
Interest $ 317 $ 338
======== ========
See Notes To Condensed Consolidated Financial Statements.
WILLIAMS INDUSTRIES, INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 2003
1. INTERIM FINANCIAL STATEMENTS
This document includes unaudited interim financial statements that
should be read in conjunction with the Company's latest audited annual
financial statements. However, in the opinion of management, these financial
statements contain all adjustments, consisting only of normal recurring
items,necessary for a fair presentation of the Company's financial position
as of January 31, 2003, as well as the results of its operations for the
three and six months ended January 31, 2003 and 2002, respectively, and cash
flows for the six months then ended.
2. RELATED-PARTY TRANSACTIONS
Director Frank E. Williams, Jr., who owns or controls approximately 40%
of the Company's stock, also owns controlling interests in the outstanding
stock of Williams Enterprises of Georgia, Inc., and Structural Concrete
Products, LLC. Additionally, Mr. Williams, Jr. owns a substantial interest in
Bosworth Steel Erectors, Inc. (formerly Williams and Beasley Company). Each
of these entities did business with the company during the three and six
months ended January 31, 2003 and 2002. Billings to these entities were
approximately $475,000 and $964,000 for the three months ended January 31,
2003 and 2002, respectively. Billings to these entities were approximately
$874,000 and $1,898,000 for the six months ended January 31, 2003 and 2002,
respectively. Costs incurred with these entities were approximately $434,000
and $570,000 for the three months ended January 31, 2003 and 2002,
respectively. Costs incurred with these entities were approximately $973,000
and $757,000 for the six months ended January 31, 2003 and 2002, respectively.
At January 31, 2003 and 2002 the Accounts Receivable due from these entities
were $1,707,000 and $1,616,000, respectively. Accounts Payable to these
entities was $404,000 and $463,000 at January 31, 2003 and 2002, respectively.
The Company is obligated to the Williams Family Limited Partnership
Under a lease agreement for real property with an option to purchase. The
partnership is controlled by individuals, directly or indirectly, who own
approximately 43% of the Company. The lease, which has an original term of
five years and an extension option for five years, commenced February 15,
2000. The Company recognized lease expense for the three months ended January
31, 2003 and 2002 of $14,000 and $14,000, respectively. The Company recognized
lease expense for the six months ended January 31, 2003 and 2002 of $28,000
and $28,000, respectively.
Mr. George Pocock, an officer of the Company, owns a controlling interest
in Construction Insurance Agency (CIA). Costs incurred with CIA, for insurance
premiums and brokerage fees, were $25,000 and $162,000 for the three months
ended January 31, 2003 and 2002, respectively. Costs incurred with CIA, for
insurance premiums and brokerage fees, were $125,000 and $190,000 for the six
months ended January 31, 2003 and 2002, respectively. Accounts payable to CIA
were $30,000 and $107,000 at January 31,2003 and 2002, respectively.
Directors Frank E. Williams, Jr. and Stephen N. Ashman are shareholders
and directors of a commercial bank from which the Company obtained a $240,000
note payable during the quarter ended January 31, 2003. The note is payable
in sixty equal monthly payments of principle plus interest at the greater of
5.75% or the current Prime rate, whichever is greater. The note, which
replaced an existing current note payable that had a higher interest rate and
payment, was negotiated at arms length under normal commercial terms. Payments
made, including interest expense of approximately $1,000, were approximately
$5,000 for the quarter ended January 31, 2003.
3. SEGMENT INFORMATION
Information about the Company's operations in its operating segments
For the three and six months ended January 31, 2003 and 2002 is as follows
(in thousands):
Three Months Ended Six Months Ended
January 31, January 31,
2003 2002 2003 2002
Revenues: -------- -------- -------- ---------
Construction $ 5,087 $ 6,196 $10,972 $12,600
Manufacturing 7,153 9,313 16,785 16,571
Other 255 236 478 638
-------- -------- -------- ---------
12,495 15,745 28,235 29,809
-------- -------- -------- ---------
Intersegment revenues:
Construction 505 415 960 1,053
Manufacturing 12 11 232 92
Other 181 198 355 356
-------- -------- -------- ---------
698 624 1,547 1,501
-------- -------- -------- ---------
Consolidated revenues:
Construction 4,582 5,781 10,012 11,547
Manufacturing 7,141 9,302 16,553 16,479
Other 74 38 123 282
Total Consolidated -------- -------- -------- ---------
Revenues $11,797 $15,121 $26,688 $28,308
-------- -------- -------- ---------
(Loss)earnings before income taxes
and minority interest:
Construction $ (352) $ (83) $ (568) $ 206
Manufacturing (124) 1,301 624 2,364
Other (421) (570) (835) (1,026)
-------- -------- -------- ---------
Total $ (897) $ 648 $ (779) $ 1,544
-------- -------- -------- ---------
During the quarter ended January 31, 2003, the Company took action to curtail
continuing losses associated with the Company's Sales and Services' segment.
The Company closed the Jessup, Maryland office and the remaining essential
activities previously performed by the Sales and Services segment were
transferred to and consolidated in the Company's Construction Division.
Revenues and direct costs from these activities, which were previously
presented as a separate segment in the Company's financial statements are
now included in the Company's Construction segment. The segment information
presented above for the three and six month periods ended January 31, 2002
has been restated to include the Sales and Services information in the
Construction segment.
4. INVENTORIES
Materials inventory consists of structural steel, steel plates and
galvanized steel coils. Costs of materials inventory is accounted for using
either the specific identification method or average cost. The cost of
supplies inventory is accounted for using the first-in, first-out, (FIFO)
method.
5. PURCHASE OF ASSETS
During the six months ended January 31, 2003, the Company purchased
various fixed assets, for use in its operations, for approximately $415,000.
Approximately $185,000 of the fixed asset purchases was financed at
Prevailing rates, with $230,000 paid out of operating cash.
6. COMMON STOCK
During the six months ended January 31, 2003, the Company purchased
6,093 shares of the Company's stock for approximately $25,000.
7. RECLASSIFICATIONS
Certain Balance Sheet and Statement of Operations items for prior
periods have been reclassified to conform to current period classifications.
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
General
The Company's operations serve the industrial,
commercial and institutional construction markets,
primarily in the Mid-Atlantic region of the United States.
However, during Fiscal 2002, the Company expanded its
operations, particularly in the manufacturing segment, to
serve more of the southeastern region of the country.
Demand for the Company's products and services has
varied in recent months, with some projects being postponed
and or delayed due to customers' schedule slippage, delays
in raw material deliveries to the Company's plants and
delays in submittals by government agencies. In some cases,
weather had a significant impact on the Company's ability
to do work. There continues to be strong demand for the
Company's bridge deck girders and "stay-in-place" decking,
due in part to continued governmental spending on
infrastructure.
During the quarter ended January 31, 2003, the Company
took action to curtail continuing losses associated with
the activities of the Company's former Sales and Services'
segment. For many years, the Company has rented cranes and
related heavy construction equipment to non-related
entities in the construction industry. During the past 18
months, revenues from such rentals declined. After thorough
analysis, the Company closed the Jessup, Maryland office,
and essential activities were consolidated into the
Company's Construction Division. However, the Company
continues to incur ownership and operating costs on Company
owned equipment and lease expense on leased equipment. The
Company is attempting to sell items that are not necessary
for its own operations, and to renegotiate or cancel leases
on leased cranes and equipment to improve cash flow.
Revenues and direct costs from these activities, which
previously were shown separately in the Company's Condensed
Consolidated Statements of Operations are now included in
the Company's Construction segment.
In the heavy construction industry, projects are
generally contracted out by the owner to a general
contractor or handled for the owner by a project manager,
who, in turn, let out various portions of the work to be
performed to various sub-contractors and sub-sub-
contractors. The Company, with its combination of
manufacturing, construction and heavy hauling and lifting
capabilities, can and does offer, as appropriate, a turnkey
approach for customers, reducing some of the complexity
involved in awarding and overseeing a project. The company
believes that this ability gives it a competitive advantage
on some contracts over competitors without these broad
capabilities. One of the most visible of recent large
projects was work on a Virginia road project, Route 288, on
which the Company fabricated the girders, erected the
bridge girders using Company equipment and manufactured the
"stay-in-place" forms for the bridge decks.
During the quarter ended January 31, 2003, the Company
changed its worker's compensation insurance carrier. The
new program offers significantly better cash flow and
slightly lower fixed costs. In the past, the Company paid
in advance for its entire worker's compensation costs for
the year. Under the new program, there are no upfront
payments required. The carrier's base fee, which is a
portion of the total program cost, is paid out over the
policy year. All other costs are paid as incurred,
resulting in improved cash flow during the year.
Material Changes in Financial Condition
For the six months ended January 31, 2003, the
following changes occurred:
The Company's Cash and Cash Equivalents,
Restricted Cash and Certificates of Deposit decreased
$867,000 as the Company used cash to pay down debt, fund
plant expansion and fund operations.
Accounts Receivable declined by approximately $3
million due to decreased revenues.
Inventory increased by $216,000 as the Company held
materials scheduled for projects that have incurred
scheduling delays. The Company has adequate inventory on
hand for current needs.
Costs and Estimated Earnings in Excess of Billings
increased by approximately $1.7 million. Due to adverse
weather conditions, which caused delays in shipping, the
Company was unable to bill its customers for completed
product.
Prepaid expenses and other assets declined $282,000 as
the Company expensed its vehicle and equipment insurance
premiums and other miscellaneous items.
Other Assets increased $660,000 as the Company used
its cash for: Site preparation for the Company's new
headquarters to be located on its Manassas, Virginia
property; plant expansion and manufacturing equipment in
its Bedford, VA facility; and manufacturing equipment for
its new Gadsden, AL facilities.
At January 31, 2003, the Company has about $4.2
million in variable rate notes payable. Current low
interest rates continue to benefit the Company and reduce
interest expense. Notes Payable, current and long-term,
declined approximately $1 million. The Company borrowed
approximately $2.9 million, mainly for short-term
operational uses, and paid back $3.9 million, mainly from
operations.
Accounts Payable increased $1.4 million due mainly to
purchases of materials for the Manufacturing segment.
Other Liabilities decreased by $1.5 million as the
Company paid bonuses for the year-ended July 31, 2002 and
paid accrued sales taxes in its Manufacturing segment.
Stockholders' Equity declined $578,000 to $17,137,000.
Of this total, $25,000 was due to the repurchase of company
stock in the open market.
For the six months ended January 31, 2003, the Company
used net cash of $325,000 for investing activities, which
consisted primarily of fixed asset purchases.
Management believes that operations will generate
sufficient cash to fund activities. However, as revenues
increase, it may become necessary to increase the Company's
credit facilities to handle short-term cash requirements,
particularly in terms of inventory expansion for major
fabrication projects. Management, therefore, is focusing
on the proper allocation of resources to ensure stable
growth.
Material Changes in Results of Operations
Three Months Ended January 31, 2003 Compared to Three
Months Ended January 31, 2002
For the quarter ended January 31, 2003, the Company
reported declines in revenues and earnings, due to a
combination of bad weather and former sales and services
activities.
There was a net loss of $618,000 or $0.17 per share on
total revenue of $11,797,000 for the quarter ended January
31, 2003 as compared to net income of $384,000 or $0.10 per
share on total revenue of $15,121,000 for the quarter ended
January 31, 2002.
Losses from sales and services activities were 65% of
the total loss for the quarter ended January 31, 2003.
Management is downsizing these activities and is
consolidating them into the Construction Segment.
Management intends to sell assets as appropriate to reduce
costs and improve cash flow.
Overall direct costs, when viewed as a percentage of
total revenue, increased. The Manufacturing Segment had a
9 percent increase in direct costs while the Construction
Segment, which now includes sales and services activities,
increased 3 percent. For the quarter ended January 31,
2002, overall direct costs were 61% of total revenue. In
the quarter ended January 31, 2003, this increased to 68%.
Weather was a major contributing factor to the overall
decline in the Company's revenues for the quarter ended
January 31, 2003. Less than optimal weather conditions,
including floods, ice storms, and near record snow,
hampered the Company's ability to perform construction
work, and limited the delivery of materials to job sites.
The Company attempts to time the manufacturing of its
products with anticipated delivery schedules because of the
terms and conditions surrounding payment for its products.
Gross Profit as a percent of Revenue in the
Manufacturing Segment declined from 44% for the three
months ended January 31, 2002 to 35% for the three months
ended January 31, 2003. This decrease was due to increased
competition, and during the quarter ended January 31, 2002,
Williams Bridge Company's Bessemer plant was working on
time and material contracts that were residual from the
plant's former owner. These contracts were produced at
higher margins than those currently in the plant because
the customer supplied the materials.
Williams Bridge Company's current backlog is down by
$6 million from the quarter ended January 31, 2002. This
means that the hours the plants are working are down to a
point where margins are substantially reduced.
Six Months Ended January 31, 2003 Compared to Six
Months Ended January 31, 2002
Net losses were $556,000 or $0.16 per share on total
revenue of $26,688,000 for the six months ended January 31,
2003. These results compare to net income of $912,000 or
$0.25 per share on total revenue of $28,308,000 for the six
months ended January 31, 2002.
Construction revenue went from $11,547,000 for the six
months ended January 31, 2002 to $10,012,000 for the six
months ended January 31, 2003. The Construction Segment
also experienced revenue declines caused by project delays
due to the inclement weather that has plagued much of the
Company's traditional market areas during the second
quarter of Fiscal 2003.
Earning Before Taxes declined $2.3 million when the
six months ended January 2003 is compared to the six months
ended January 31, 2002. This decline is due in part to
losses from Sales and Services' activities of $1,200,000
for the six months ended January 31, 2003 compared to
losses of $368,000 for the six months ended January 31,
2002. Pre-Tax Earnings in the Manufacturing segment
declined by $1.7 million when the same periods are
compared. Gross Profit as a percent of Revenue in the
Manufacturing Segment declined from 44% for the six months
ended January 31, 2002 to 32% for the six months ended
January 31, 2003. This decrease was due to increased
competition, and during the six months ended January 31,
2002, Williams Bridge Company's Bessemer plant was working
on time and material contracts that were residual from the
plant's former owner. These contracts were produced at
higher margins than those currently in the plant because
the customer supplied the materials.
The Company's manufacturing segment continues to
benefit from consistent order flow for bridge girders and
decking, both components of the federal government's multi-
billion dollar infrastructure improvement (TEA 21) program.
Manufacturing revenues increased slightly from $16,479,000
for the six months ended January 31, 2002 to $16,553,000
for the six months ended January 31, 2003.
The trend of manufacturing becoming a larger part of
the Company's business began with federal funding increases
in Fiscal 1999. The increasing proportion of revenues
generated by manufacturing is expected to continue for
several years as funding for infrastructure programs is
scheduled to continue increasing for at least five years.
BACKLOG
At January 31, 2003, the Company's backlog was $36
million, which is a decline of $6 million from October 31,
2002 and more than $10 million from July 31, 2002. The
Company currently has bids pending on several significant
jobs. The Company's backlog includes a good mix of work
for the Construction and Manufacturing segments.
Most of the backlog will be completed within the next
12 months if contract schedules are followed. Management
believes that the level of work is sufficient to allow the
Company to have adequate work into Fiscal 2004.
Item 3. Quantitative and Qualitative Disclosures About
Market Risk
Interest Rate Risk
The Company's cash equivalents and restricted cash,
invested in interest-bearing instruments, are presented at
fair value on the Company's balance sheets. The Company's
exposure to market risks for changes in interest rates
relate primarily to these investments and long-term debt.
Item 4. Controls and Procedures
As of January 31,2003, an evaluation was performed
under the supervision and with the participation of the
Company's management, including Chief Executive Officer
(CEO) and Controller, of the effectiveness of the design
and operation of the Company's disclosure controls and
procedures. Based on that evaluation, the Company's
management, including the CEO and Controller, concluded
that the disclosure controls and procedures were effective
as of January 31, 2003. There have been no significant
changes in the Company's internal controls or in other
factors that could significantly affect internal controls
subsequent to January 31, 2003.
Disclosure controls and procedures are designed to
ensure that information, required to be disclosed by the
Company in the reports that are filed or submitted under
the Exchange Act, is recorded, processed, summarized and
reported within the time periods specified in the
Securities and Exchange Commission's rules and forms.
Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that
information required to be disclosed by the Company in the
reports that it files under the Exchange Act are
accumulated and communicated to management, including the
principal executive officers and principal financial
officer, as appropriate to allow timely decisions regarding
required disclosure.
Safe Harbor for Forward-Looking Statements
The Company is including the following cautionary
statements to make applicable and take advantage of the
safe harbor provisions within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 for any forward-looking
statements made by, or on behalf of, the Company in this
document and any materials incorporated herein by
reference. Forward-looking statements include statements
concerning plans, objectives, goals, strategies, future
events or performance and underlying assumptions and other
statements, which are other than statements of historical
facts. Such forward-looking statements may be identified,
without limitation, by the use of the words "anticipates,"
"estimates," "expects," "intends," and similar expressions.
From time to time, the Company or one of its subsidiaries
individually may publish or otherwise make available
forward-looking statements of this nature. All such
forward-looking statements, whether written or oral, and
whether made by or on behalf of the Company or its
subsidiaries, are expressly qualified by these cautionary
statements and any other cautionary statements which may
accompany the forward-looking statements. In addition, the
Company disclaims any obligation to update any forward-
looking statements to reflect events or circumstances after
the date hereof.
Forward-looking statements made by the Company are
subject to risks and uncertainties that could cause actual
results or events to differ materially from those expressed
in, or implied by, the forward-looking statements. These
forward-looking statements may include, among others,
statements concerning the Company's revenue and cost
trends, cost reduction strategies and anticipated outcomes,
planned capital expenditures, financing needs and the
availability of such financing, and the outlook for future
activity in the Company's market areas. Investors or other
users of forward-looking statements are cautioned that such
statements are not a guarantee of future performance by the
Company and that such forward-looking statements are
subject to risks and uncertainties that could cause actual
results to differ materially from those expressed in, or
implied by, such statements. Some, but not all of the
risks and uncertainties, in addition to those specifically
set forth above, include general economic and weather
conditions, market prices, environmental and safety laws
and policies, federal and state regulatory and legislative
actions, tax rates and policies, rates of interest and
changes in accounting principles or the application of such
principles to the Company.
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings
General
The Company is party to various claims arising in the
ordinary course of its business. Generally, claims
exposure in the construction services industry consists of
workers compensation, personal injury, products' liability
and property damage. The Company believes that its
insurance and other expense accruals, coupled with its
primary and excess liability coverage, are adequate
coverage for such claims or contingencies.
Following months of negotiations, Williams Bridge
Company reached a contract with the United Steelworkers of
America for representation of the workforce at the
subsidiary's Bessemer, AL manufacturing facility. The
covered employees ratified the agreement on January 28,
2003. The agreement offered wages and benefits similar to
those offered at the company's other facilities.
During the quarter ended October 31, 2002, Williams
Steel Erection Company, the Company's primary construction
division operation, became the target of The International
Association of Bridge, Structural, Ornamental & Reinforcing
Iron Worker's union attempts at organizing the subsidiary's
workforce. The union lost the election held on October
24, 2002. After an appeal by the union, the National Labor
Relations Board certified the results of the election on
December 20, 2002 in favor of Williams Steel. The union
continued a negative media campaign against both the
subsidiary and the parent company. As a consequence of
the union's activity, the subsidiary's apprenticeship
program faced a legal challenge in Virginia. The initial
ruling did not favor the subsidiary, but an appeal has been
noted. Contrary to published statements issued by the
union, management believes this issue will have no bearing
on the subsidiary's ability to obtain governmental
contracts.
ITEM 2. Changes in Securities and Use of Proceeds
As part of its non-employee director compensation, the
Company has issued unregistered shares and options to
current and former directors as compensation for services
rendered. These shares and options are issued under Rule
144 and are not offered to the public or underwritten.
Shares are accrued at $600 per month at the monthly closing
price and issued annually, and options are granted at the
market price on the date of issuance. The following
summarizes the unregistered shares and options to buy
shares issued to Directors in the past three years:
2/9/03 7,590 shares issued and 15,000 options granted @ $3.55
1/21/02 5,925 shares issued and 12,500 options granted @ $4.45
1/19/01 5,800 shares issued and 12,500 options granted @ $2.78
ITEM 3. Defaults Upon Senior Securities
None.
ITEM 4. Submission of Matters to a Vote of Security Holders
None.
ITEM 5. Other Information
None.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(99.1) CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
(b) Reports on Form 8-K
(1) January 28, 2003
Item 5: Other Events
Ratification of a labor agreement
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:
Date March 10, 2003 Williams Industries, Incorporated
Registrant
/s/ Frank E. Williams, III
---------------------------
Frank E. Williams, III
Chairman of the Board, President,
Chief Executive Officer,
Chief Financial Officer
SECTION 302 CERTIFICATION
CERTIFICATIONS
I, Christ H. Manos, certify that:
I have reviewed this quarterly report of Williams Industries, Inc. on
Form 10-Q as of January 31, 2003;
1. Based on my knowledge, this quarterly 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 quarterly
report;
2. Based on my knowledge, the financial statements, and other
financial information included in this quarterly 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 quarterly report.
3. The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14)
for the registrant and have:
a) Designed such disclosure controls and procedures 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 quarterly report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation
Date"); and
c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
4. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors
and the audit committee of registrant's board of directors (or
persons performing the equivalent functions):
a) All significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and report
financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
5. The registrant's other certifying officers and I have indicated
in this quarterly report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of
our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date
/s/ Christ H. Manos
- -------------------
Christ H. Manos
Treasurer, Controller
SECTION 302 CERTIFICATION
CERTIFICATIONS
I, Frank E. Williams, III, certify that:
I have reviewed this quarterly report of Williams Industries, Inc. on
Form 10-Q as of January 31, 2003;
6. Based on my knowledge, this quarterly 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 quarterly
report;
7. Based on my knowledge, the financial statements, and other
financial information included in this quarterly 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 quarterly report.
8. The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14)
for the registrant and have:
a) Designed such disclosure controls and procedures 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 quarterly report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation
Date"); and
c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
9. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors
and the audit committee of registrant's board of directors (or
persons performing the equivalent functions):
a) All significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and report
financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
10. The registrant's other certifying officers and I have indicated
in this quarterly report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of
our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date
/s/ Frank E. Williams, III
- --------------------------
Frank E. Williams, III
Chairman of the Board,
President,
Chief Executive Officer,
Chief Financial Officer