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 April 30, 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 April 30, 2003, the Registrant had outstanding
3,583,542 shares of Common Stock.
WILLIAMS INDUSTRIES, INCORPORATED
FORM 10-Q
FOR THE QUARTER ENDED APRIL 30, 2003
TABLE OF CONTENTS
PAGE
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets - April 30,
2003 and July 31,2002
(Unaudited) 1
Condensed Consolidated Statements of Operations -
Three months and nine months ended April 30,
2003 and 2002
(Unaudited) 2
Condensed Consolidated Statements of Cash Flow -
Nine months ended April 30, 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 10
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISKS 15
ITEM 4. CONTROLS AND PROCEDURES 15
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 16
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 17
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 18
WILLIAMS INDUSTRIES, INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
ASSETS
--------
($000 Omitted) April 30, July 31,
2003 2002
--------- ---------
CURRENT ASSETS
Cash and cash equivalents $ 1,551 $ 3,380
Restricted cash 32 50
Certificates of deposit 417 705
Accounts receivable, net 19,103 17,731
Inventory 5,393 4,866
Costs and estimated earnings in excess
of billings on uncompleted contracts 2,537 1,509
Prepaid expenses and other assets 1,877 2,263
--------- ---------
Total current assets 30,910 30,504
--------- ---------
PROPERTY AND EQUIPMENT, AT COST 23,134 20,209
Accumulated depreciation (13,390) (12,238)
--------- ---------
Property and equipment, net 9,744 7,971
--------- ---------
OTHER ASSETS
Deferred income taxes 2,631 2,246
Other 741 1,535
--------- ---------
Total other assets 3,372 3,781
--------- ---------
TOTAL ASSETS $ 44,026 $ 42,256
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
-------------------------------------
CURRENT LIABILITIES
Current portion of notes payable $ 1,785 $ 2,120
Accounts payable 7,689 4,900
Billings in excess of costs and estimated
earnings on uncompleted contracts 4,862 4,104
Deferred income 30 99
Other liabilities 4,318 5,457
--------- ---------
Total current liabilities 18,684 16,680
--------- ---------
LONG-TERM DEBT
Notes payable, less current portion 8,320 7,649
--------- ---------
Total Liabilities 27,004 24,329
--------- ---------
MINORITY INTERESTS 186 212
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock - 3,583,542 and 3,573,021
issued and outstanding 358 358
Additional paid-in capital 16,381 16,348
Retained earnings 97 1,009
--------- ---------
Total stockholders' equity 16,836 17,715
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 44,026 $ 42,256
========= =========
See Notes To Condensed Consolidated Financial Statements.
WILLIAMS INDUSTRIES, INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
($000 omitted)
Three Months Ended Nine Months Ended
April 30, April 30,
2003 2002 2003 2002
REVENUE -------- -------- -------- --------
Construction $ 3,909 $ 5,384 $13,921 $16,931
Manufacturing 8,295 8,684 24,848 25,163
Other 45 36 168 318
-------- -------- -------- --------
Total revenue 12,249 14,104 38,937 42,412
-------- -------- -------- --------
DIRECT COSTS
Construction 2,574 3,585 10,127 11,591
Manufacturing 5,505 5,194 16,253 14,458
-------- -------- -------- --------
Total direct costs 8,079 8,779 26,380 26,049
-------- -------- -------- --------
GROSS PROFIT 4,170 5,325 12,557 16,363
-------- -------- -------- --------
EXPENSES
Overhead 2,106 2,113 6,079 5,960
General and administrative 1,972 2,070 6,032 6,624
Depreciation 451 393 1,272 1,146
Interest 145 189 457 529
-------- -------- -------- --------
Total expenses 4,674 4,765 13,840 14,259
-------- -------- -------- --------
(LOSS) EARNINGS BEFORE INCOME TAXES,
AND MINORITY INTERESTS (504) 560 (1,283) 2,104
INCOME TAX (BENEFIT) PROVISION (151) 210 (385) 828
-------- -------- -------- --------
(LOSS) EARNINGS BEFORE
MINORITY INTERESTS (353) 350 (898) 1,276
Minority interests (3) (6) (14) (20)
-------- -------- -------- --------
NET (LOSS) EARNINGS $(356) $ 344 $ (912) $ 1,256
======== ======== ======== ========
NET (LOSS) EARNINGS PER
COMMON SHARE- BASIC $(0.10) 0.10 (0.25) 0.35
======== ======== ======== ========
NET (LOSS) EARNINGS PER
COMMON SHARE-DILUTED $(0.10) 0.10 (0.25) 0.35
======== ======== ======== ========
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING: BASIC AND DILUTED 3,576,172 3,568,886 3,573,470 3,578,923
--------- --------- --------- ---------
See Notes To Condensed Consolidated Financial Statements
WILLIAMS INDUSTRIES, INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
($000 Omitted) Nine Months Ended
April 30,
2003 2002
-------- --------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES $ 581 $(1,492)
NET CASH USED IN INVESTING ACTIVITIES (2,739) (1,160)
NET CASH PROVIDED BY FINANCING ACTIVITIES 329 952
-------- --------
NET DECREASE IN CASH AND CASH EQUIVALENTS (1,829) (1,700)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 3,380 3,748
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,551 $ 2,048
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Income Taxes $ 178 $ 59
======== ========
Interest $ 455 $ 526
======== ========
See Notes To Condensed Consolidated Financial Statements.
WILLIAMS INDUSTRIES, INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
April 30, 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 April 30, 2003, as well as the results of its
operations for the three and nine months ended April 30, 2003 and 2002,
respectively, and cash flows for the nine months then ended.
During the quarter ended April 30, 2003, the Company issued stock
options for 35,000 shares effective February 7, 2003. The options were
issued at the closing price on February 7, 2003 of $3.55 per share. The
Company continues to use the intrinsic method of valuing stock options,
under which it does not expense the value of stock options. Under Statement
of Financial Accounting Standards No. 148- Accounting for Stock-Based
Compensation - Transition and Disclosure, the Company is required to
disclose the income effect of the stock options issued if the Company was
using the fair value method of accounting for these options. The table
below shows the effect the stock options would have had if the Company had
chosen the fair value method.
Three Months Ended Nine Months Ended
April 30, April 30,
------------------ -------------------
2003 2002 2003 2002
-------- -------- -------- --------
AS REPORTED
- ---------------------------------
Net (Loss) Earnings (in thousands) $ (356) $ 344 $ (912) $1,256
Net(Loss) Earnings Per Common
Share Basic and Diluted (0.10) 0.10 (0.25) 0.35
Stock-based compensation
- ---------------------------------
Net of tax (in thousands) (11) - (11) (88)
PRO-FORMA
- ---------------------------------
Net (Loss) Earnings (in thousands) (367) 344 (923) 1,168
Net(Loss) Earnings Per Common
Share Basic and Diluted (0.10) 0.10 (0.25) 0.35
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).
Revenue earned and costs incurred with these entities during the three and
nine months ended April 30, 2003 and 2002 are reflected below. In addition,
amounts receivable and payable to these entities at April 30, 2003 and 2002
are also reflected below.
Three Months Ended Nine Months Ended
April 30, April 30,
------------------ -------------------
($000 omitted) 2003 2002 2003 2002
-------- -------- -------- --------
Billings to entities $ 499 $ 876 $1,077 $2,799
Costs incurred from $ 160 $ 662 $1,168 $1,472
Balance April 30, 2003 2002
-------- --------
Accounts receivable $1,837 $1,942
Accounts Payable $ 314 $ 412
The Company is obligated to the estate of F. Everett Williams, a former
director of the Company, for a Demand Note Payable of approximately $88,000.
The note, at 10% simple interest, is not secured. The Company recognized
interest expense for the three and nine months ended April 30, 2003 and 2002
as follows:
Three Months Ended Nine Months Ended
April 30, April 30,
------------------ -------------------
($000 omitted) 2003 2002 2003 2002
-------- -------- -------- --------
Interest Expense $ 2 $ 2 $ 7 $ 7
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 who own, directly or indirectly,
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 and nine months
ended April 30, 2003 and 2002 as follows:
Three Months Ended Nine Months Ended
April 30, April 30,
------------------ -------------------
($000 omitted) 2003 2002 2003 2002
-------- -------- -------- --------
Lease Expense $ 14 $ 14 $ 42 $ 47
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, for the three and nine months
ended April 30, 2003 and 2002 are reflected below. In addition, amounts
payable at April 30, 2003 and 2002 are also reflected below.
Three Months Ended Nine Months Ended
April 30, April 30,
------------------ -------------------
($000 omitted) 2003 2002 2003 2002
-------- -------- -------- --------
Costs incurred from $ 62 $ 34 $ 185 $ 224
Balance April 30, 2003 2002
-------- --------
Accounts Payable $ 4 $ 2
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 three months ended January 31, 2003. The
note is payable in sixty equal monthly payments of principal of $4,000 plus
interest at 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. Interest expensed for the three and nine months ended April 30, 2003
and 2002 are reflected below. In addition, the balance outstanding at April
30, 2003 is also reflected below.
Three Months Ended Nine Months Ended
April 30, April 30,
------------------ -------------------
($000 omitted) 2003 2002 2003 2002
-------- -------- -------- --------
Interest Expense $ 3 $ - $ 4 $ -
Balance April 30, 2003 2002
-------- --------
Note Payable $ 224 $ -
3. SEGMENT INFORMATION
Information about the Company's operations in its operating segments
for the three and nine months ended April 30, 2003 and 2002 is as follows
(in thousands):
Three Months Ended Nine Months Ended
April 30, April 30,
------------------ -------------------
($000 omitted) 2003 2002 2003 2002
-------- -------- -------- --------
Revenues:
Construction $ 4,419 $ 5,685 $15,391 $18,285
Manufacturing 8,323 8,766 25,108 25,337
Other 188 197 666 835
-------- -------- -------- --------
12,930 14,648 41,165 44,457
-------- -------- -------- --------
Intersegment revenues:
Construction 510 301 1,470 1,354
Manufacturing 28 82 260 174
Other 143 161 498 517
-------- -------- -------- --------
681 544 2,228 2,045
-------- -------- -------- --------
Consolidated revenues:
Construction 3,909 5,384 13,921 16,931
Manufacturing 8,295 8,684 24,848 25,163
Other 45 36 168 318
-------- -------- -------- --------
Total Consolidated Revenues $12,249 $14,104 $38,937 $42,412
-------- -------- -------- --------
(Loss)earnings before income taxes
and minority interest:
Construction $ (107) $ 250 $ (675) $ 456
Manufacturing 121 740 745 3,104
Other (518) (430) (1,353) (1,456)
-------- -------- -------- --------
Total $ (504) $ 560 $(1,283) $ 2,104
-------- -------- -------- --------
Activities previously performed by the Sales and Services segment were
transferred to and consolidated in the Company's Construction Division
during the quarter ended January 31, 2003. 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 nine month periods ended April 30, 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 nine months ended April 30, 2003, the Company purchased
Property and Equipment, for use in its operations, for approximately $2.9
million. Approximately $1.9 million of the Property and Equipment purchases
were financed at prevailing rates, with $1 million paid out of operating cash.
6. COMMON STOCK
During the nine months ended April 30, 2003, the Company purchased
8,093 shares of the Company's stock for approximately $32,000.
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, beginning in Fiscal 2002, the Company expanded
its operations, particularly in the manufacturing segment, to serve more of
the southeastern region of the country.
During the three months ended April 30, 2003, demand for the Company's
products and services continued to be slow, due to inclement weather,
schedule delays by customers, raw material delivery delays and a decline in
submittals by government agencies. In February, near record snow in the
mid-Atlantic region, followed by heavy rains, shut down many jobs. Rain
continued to depress the Company's ability to work in March. In April, there
were signs of improvement, as work levels increased in most of the Company's
subsidiaries, although inclement weather still existed.
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. The Company's bridge company was successful in
its bid on the Woodrow Wilson Bridge contract to supply girders for the
Virginia approach. The contract, valued at over $28 million, the largest
single contract in the Company's history, will extend approximately over the
next four years.
Losses related to the activities of the Company's former Sales and
Services' segment declined during the quarter ended April 30, 2003 as
certain activities have been eliminated, and the reduced remaining
activities consolidated into the Construction segment. However, the Company
continues to incur ownership and operating costs on Company owned equipment
and lease expense on leased equipment. The Company continues to evaluate
potential sales of equipment that are not necessary for its own operations,
and to renegotiate or cancel leases on cranes and equipment to improve cash
flow.
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 assigns various portions of the work to be performed
to 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 for project managers or owners in awarding and
overseeing a project. The Company believes that this ability gives it an
advantage on some contracts over competitors who do not have these broad
capabilities. The Woodrow Wilson Bridge project reflects this advantage as
the Company will fabricate girders, deliver and erect the bridge girders
using Company equipment, and manufacture the "stay-in-place" forms for the
bridge decks.
Material Changes in Financial Condition
For the nine months ended April 30, 2003, the following changes
occurred:
The Company's Cash and Cash Equivalents, Restricted Cash and
Certificates of Deposit decreased $2.1 million as the Company used cash to
purchase equipment, pay down debt, fund plant expansion and fund operations.
Accounts Receivable increased by approximately $1.4 million, as the
Company is able to bill for raw materials in inventory on certain contracts.
Inventory increased by $527,000 as the Company held materials
scheduled for projects that have incurred customer imposed delivery delays
as well as purchasing materials for new projects. The Company has adequate
inventory on hand for current needs.
Costs and Estimated Earnings in Excess of Billings on Uncompleted
Contracts increased by approximately $1 million. Due to adverse weather
conditions, which caused delays in material shipping and construction
services, the Company was unable to bill certain customers for completed
product and contract services.
Prepaid expenses and other assets declined $386,000 as the Company
expensed its vehicle and equipment insurance premiums and other
miscellaneous items.
Property and Equipment, at Cost increased $2.9 million as the Company
purchased three cranes it previously leased, for approximately $900,000,
capitalized construction costs and plant equipment costs at its Bedford, VA
and Gadsden, AL plants for approximately $800,000 and purchased plant and
equipment for construction and manufacturing operations for approximately
$1.2 million.
Other Assets decreased approximately $800,000 as the Company
reclassified costs associated with the plant expansions at its Bedford,
VA and Gadsden, AL plants to Property and Equipment, at Cost.
At April 30, 2003, the Company had about $4.8 million in variable
rate notes payable. Current low interest rates continue to benefit the
Company and reduce interest expense. Total Notes Payable increased
$336,000 during the nine months ended April 30, 2003. The Company
borrowed approximately $4.8 million, of which, $1.4 million was used to
fund long-term plant and equipment purchases and $3.4 million was used to
fund short-term operations. The Company paid back $4.5 million related to
short term borrowing, mainly from operations.
Accounts Payable increased $2.8 million due mainly to purchases of
materials for the Manufacturing segment, some of which has been billed to
customers.
Billing In Excess of Costs and Estimated Earnings on Uncompleted
Contracts increased by $758,000. This increase relates to certain
contracts where the Company was able to bill for materials purchased for
jobs but not yet installed.
Other Liabilities decreased by $1.1 million as the Company paid
accrued sales taxes in its Manufacturing segment as well as bonuses for
the year-ended July 31, 2002.
Stockholders' Equity declined $879,000 to $16,836,000. Of this total,
$32,000 was due to the repurchase of company stock in the open market.
For the nine months ended April 30, 2003, the Company used net cash
of $1.9 million for investing activities, which consisted primarily of
property and equipment purchases.
Management believes that operations will generate sufficient cash to
fund the Company's activities and service its debt. 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.
Material Changes in Results of Operations
Three Months Ended April 30, 2003
Compared to Three Months Ended April 30, 2002
For the quarter ended April 30, 2003, the Company reported declines in
revenues and earnings, due to a combination of weather conditions and
project and material delivery delays.
The Company experienced a net loss of $356,000, or $0.10 per share, on
total revenue of $12.2 million for the quarter ended April 30, 2003 as
compared to net earnings of $344,000, or $0.10 per share, on total revenue
of $14.1 million for the quarter ended April 30, 2002. Revenues in the
Construction Segment declined approximately $1.5 million as heavy snows and
above average rains caused project delays. Manufacturing revenues declined
approximately $400,000 due to project delays. Gross profit percentages
increased from thirty three percent to thirty four percent in the
Construction Segment. Manufacturing Segment gross profit percentages
declined six percent to thirty four percent when comparing the two periods.
This decrease was due to increased competition, and during the quarter ended
April 30, 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. Overhead, General and
Administrative, Depreciation and Interest expense each declined slightly.
Nine Months Ended April 30, 2003
Compared to Nine Months Ended April, 2002
Net losses were $912,000 or $0.25 per share on total revenue of $38.9
million for the nine months ended April 30, 2003. These results compare to
net earnings of $1,256,000 or $0.35 per share on total revenue of $42.4
million for the nine months ended April 30, 2002.
Construction revenue declined from $16.9 million for the nine months
ended April 30, 2002 to $13.9 million for the nine months ended April 30,
2003. The Construction segment 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 and third quarters of
Fiscal 2003.
Although the Manufacturing Segment revenue declined only slightly, the
gross profit percentage declined from forty two percent for the nine months
ended April 30, 2002 to thirty five percent for the nine months ended April
30, 2003. This decrease was caused by lower bid margins due to increased
competition, and during the nine months ended April 30, 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.
Overhead expenses increased slightly when the nine months ended April
30, 2003 and 2002 are compared. General and administrative expense decreased
approximately $600,000 for the same period. This decline was due to a
reduction in compensation related expenses.
Because of the reduction in revenue and reduced gross profit margins,
earning before taxes declined $3.4 million when the nine months ended April
30, 2003 is compared to the nine months ended April 30, 2002. Pre-Tax
Earnings declined by $2.3 million in the Manufacturing segment and $1.1
million in the Construction segment when the same periods are compared.
Despite the slight decline in revenue during the period, 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.
The trend of manufacturing becoming a larger part of the Company's
business began with federal funding increases in Fiscal 1999 and is expected
to continue.
BACKLOG
At April 30, 2003, the Company's backlog was $62.7 million, which is
an increase of approximately $19 million from April 30, 2002 and more than
$14 million from July 31, 2002. The Company was successful in its bid for
the Virginia approach on the Woodrow Wilson Bridge project between Virginia
and Maryland over the Potomac River. This project added more than $28
million to the backlog. The Company's backlog includes a variety of work
for the Construction and Manufacturing segments.
Approximately $40 million of the backlog will be completed within the
next twelve months. 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 current and
long-term debt.
Item 4. Controls and Procedures
As of April 30,2003, 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
April 30, 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 April 30, 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, provide adequate coverage for such claims or contingencies.
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
None.
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) April 28, 2003
Item 5: Other Events
Announcing the awarding of a major contract
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: June 11, 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 April 30, 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.
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: June 11, 2003
-------------
/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 April 30, 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.
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: June 11, 2003
-------------
/s/ Frank E. Williams, III
- --------------------------
Frank E. Williams, III
Chairman of the Board,
President,
Chief Executive Officer,
Chief Financial Officer