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 October 31, 2004
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 October 31, 2004, the Registrant had outstanding 3,634,687
shares of Common Stock
WILLIAMS INDUSTRIES, INCORPORATED
FORM 10-Q
FOR THE QUARTER ENDED OCTOBER 31, 2004
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
PAGE
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets - October 31,
2004 and July 31, 2004
(Unaudited)_________________________________ 1
Condensed Consolidated Statements of Operations -
Three months ended October 31, 2004 and 2003
(Unaudited)_________________________________ 2
Condensed Consolidated Statements of Cash Flows -
Three months ended October 31, 2004 and 2003
(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 14
ITEM 4. CONTROLS AND PROCEDURES 14
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS_____________________ 16
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 16
ITEM 3. DEFAULTS UPON SENIOR SECURITIES_______ 16
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS______________________ 16
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 - in thousands except share data)
ASSETS
----------
October 31, July 31,
2004 2004
CURRENT ASSETS ---------- ----------
Cash and cash equivalents $ 1,158 $ 1,343
Restricted cash 1,025 1,003
Accounts receivable, net 16,133 17,458
Inventory 8,515 5,133
Costs and estimated earnings in excess of
billings on uncompleted contracts 2,443 1,161
Prepaid and other assets 1,832 1,413
---------- ----------
Total current assets 31,106 27,511
---------- ----------
PROPERTY AND EQUIPMENT, AT COST 26,634 24,601
Accumulated depreciation (13,977) (13,486)
---------- ----------
Property and equipment, net 12,657 11,115
---------- ----------
OTHER ASSETS
Deferred income taxes 3,439 3,089
Other 379 419
---------- ----------
Total other assets 3,818 3,508
---------- ----------
TOTAL ASSETS $47,581 $42,134
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Current portion of notes payable $ 6,383 $ 5,390
Accounts payable 8,614 8,099
Billings in excess of costs and estimated
earnings on uncompleted contracts 7,285 3,633
Deferred income 16 19
Other liabilities 3,025 3,391
---------- ----------
Total current liabilities 25,323 20,532
LONG-TERM DEBT
Notes payable, less current portion 6,453 5,229
---------- ----------
Total Liabilities 31,776 25,761
---------- ----------
MINORITY INTERESTS 189 180
---------- ----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock - 3,634,687 and 3,633,655
shares issued and outstanding 363 363
Additional paid-in capital 16,537 16,537
Accumulated deficit (1,284) (707)
---------- ----------
Total stockholders' equity 15,616 16,193
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $47,581 $42,134
========== ==========
See Notes To Condensed Consolidated Financial Statements.
WILLIAMS INDUSTRIES, INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited - in thousands, except share data)
Three Months Ended
October 31,
2004 2003
---------- ----------
REVENUE
Construction $ 5,089 $ 4,266
Manufacturing 7,373 9,298
Other 68 54
---------- ----------
Total revenue 12,530 13,618
DIRECT COSTS
Construction 3,588 2,806
Manufacturing 5,712 5,841
---------- ----------
Total direct costs 9,300 8,647
---------- ----------
GROSS PROFIT 3,230 4,971
---------- ----------
EXPENSES
Overhead 1,672 1,975
General and administrative 1,754 1,967
Depreciation 535 483
Interest 187 163
---------- ----------
Total expenses 4,148 4,588
---------- ----------
(LOSS) EARNINGS BEFORE INCOME TAXES
AND MINORITY INTERESTS (918) 383
INCOME TAX (BENEFIT) PROVISION (350) 153
---------- ----------
(LOSS) EARNINGS BEFORE MINORITY INTERESTS (568) 230
Minority interests (9) (3)
---------- ----------
NET (LOSS) EARNINGS $ (577) $ 227
========== ==========
(LOSS) EARNINGS PER COMMON SHARE- BASIC $ (0.16) $ 0.06
========== ==========
(LOSS) EARNINGS PER COMMON SHARE- DILUTED $ (0.16) $ 0.06
========== ==========
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
BASIC 3,634,687 3,586,893
---------- ----------
DILUTED 3,634,687 3,586,893
---------- ----------
See Notes To Condensed Consolidated Financial Statements
WILLIAMS INDUSTRIES, INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - in thousands)
Three Months Ended
October 31,
2004 2003
---------- ----------
NET CASH (USED IN) PROVIDED BY
OPERATING ACTIVITIES $ (303) $ 1,502
NET CASH USED IN INVESTING ACTIVITIES (2,099) (1,532)
NET CASH PROVIDED BY FINANCING ACTIVITIES 2,217 1,318
---------- ----------
NET (DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS (185) 1,288
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 1,343 2,023
---------- ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,158 $ 3,311
========== ==========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Income Taxes $ 5 $ 18
========== ==========
Interest $ 181 $ 162
========== ==========
See Notes To Condensed Consolidated Financial Statements.
WILLIAMS INDUSTRIES, INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
October 31, 2004
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 October 31, 2004 and July 31, 2004, as well as
the results of its operations and cash flows for the three
months ended October 31, 2004 and 2003, respectively. Operating
results for the three months ended October 31, 2004 are not
necessarily indicative of the results expected for the full
fiscal year. For further information, refer to the consolidated
financial statements and footnotes thereto included in the
Company's Annual Report on Form 10-K for the year ended July 31,
2004.
The Company applies Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees" and related
interpretations to account for its stock option plans. The
Company grants options for common stock at an option price equal
to the fair market value of the stock on the date of grant.
Accordingly, the Company does not record stock-based compensation
expense for these options. The Company's stock option plans are
more fully described in the Company's Annual Report on Form 10-K
for fiscal year ended July 31, 2004.
Since there were no grants during the three months ended
October 31, 2004 and 2003,respectively, and all prior grants were
fully vested as of July 31, 2004 and 2003, there is no stock
based compensation expense effect on net losses, net loss per
basic common share and net loss per diluted common share, as if
compensation cost for all options had been determined based on
the fair market value recognition provision of a Statement of
Financial Accounting Standards ("SFAS") No. 123, "Accounting for
Stock-Based Compensation" as amended by SFAS No. 148, "Accounting
for Stock-Based Compensation-Transition and Disclosure."
2. RELATED-PARTY TRANSACTIONS
Mr. Frank E. Williams, Jr., who owned or controlled
approximately 40% of the Company's stock at October 31, 2004,
and is a director of the Company, 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. Revenue earned and costs incurred
with these entities during the three months ended October 31,
2004 and 2003 are reflected below. Amounts receivable and
payable to these entities at October 31, 2004 and July 31,2004
are also reflected below.
Three Months Ended
October 31,
(in thousands) 2004 2003
-------- --------
Revenue $ 275 $ 54
Billings to entities $ 439 $ 257
Costs and expenses incurred $ 116 $ 131
Balance Balance
October 31, July 31,
2004 2004
-------- --------
Accounts receivable $1,055 $ 650
Costs and estimated earnings in excess of
billings on uncompleted contracts $ - $ -
Note Payable $ 100 $ -
Accounts Payable $ 216 $ 77
Billings in excess of costs and estimated
earnings on uncompleted contracts $ 248 $ -
At July 31, 2004, the Company was 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. During the three months ended
October 31, 2004, the Company borrowed an additional $200,000
from the estate, payable on demand, with interest at the prime
rate. The Company recognized interest expense for the three
months ended October 31, 2004 and 2003 as follows:
Three Months Ended
October 31,
(in thousands) 2004 2003
-------- --------
Interest Expense $ 3 $ 2
Balance Balance
October 31, July 31,
2004 2004
-------- --------
Note Payable $288 $ 88
Accrued interest payable $ 76 $ 73
The Company is obligated to the Williams Family Limited
Partnership (WFLP) under a lease agreement for real property
with an option to purchase. The partnership is controlled by
individuals who own, directly or indirectly, approximately 44%
of the Company's stock. The lease, which has an original term of
five years and an extension option for five years, commenced
February 15, 2000. The lease contains an option to purchase up
to ten acres at the "original pro-rata cost" of $567,500. The
Company currently pays annual lease payments of approximately
$43,000. Under the terms of the lease, the monthly lease
payments are adjusted quarterly based on the WFLP cost of funds.
In reconciling the prior years accruals, the Company reduced its
lease expense this quarter by $9,000. Additionally, during the
quarter, the Company borrowed an additional $100,000 from the
partnership. Lease expense for the three months ended October
31, 2004 and 2003 is reflected below. Additionally, Notes
Payable, Accounts Payable, representing lease payments, and
Accrued Interest payable are reflected below.
Three Months Ended
October 31,
(in thousands) 2004 2003
-------- --------
Lease Expense $ 1 $14
Balance Balance
October 31, July 31,
2004 2004
-------- --------
Notes Payable $ 200 $ 100
Account Payable $ 117 $ 116
Accrued Interest Payable $ 3 $ -
The Company sold its interest in Construction Insurance
Agency (CIA) to George R. Pocock, an officer of the Company in
2001 and recorded a note receivable related to the sale. The
note bears interest at 7.5%, is secured by the CIA stock and is
due in monthly installments of $2,374, including principal and
interest, with a final payment of $138,812 due on October 31,
2005. The balance due on the note at October 31, 2004 and July
31, 2004 was $154,778 and $158,946, respectively. Costs incurred
with CIA, for insurance premiums and brokerage fees, for the
three months ended October 31, 2004 and 2003 are reflected
below. In addition, balances payable at October 31, 2004 and
July 31, 2004 are also reflected below.
Three Months Ended
October 31,
(in thousands) 2004 2003
-------- --------
Costs incurred $ 103 $ 88
Balance Balance
October 31, July 31,
2004 2004
-------- --------
Accounts Payable $ 126 $ 109
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 on December 23, 2002.
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 expense for the three months ended October 31,
2004 and 2003 is reflected below. The balance outstanding at
October 31, 2004 and July 31, 2004 is also reflected below.
Three Months Ended
October 31,
(in thousands) 2004 2003
-------- --------
Interest Expense $ 3 $ 3
Balance Balance
October 31, July 31,
2004 2004
-------- --------
Note Payable $ 152 $ 164
Directors
At October 31, 2004, the company owed the non-employee
members of the Board of Directors $44,000 for director and
consulting fees.
3. SEGMENT INFORMATION
Information about the Company's operations in its operating
segments for the three months ended October 31, 2004 and 2003 is
as follows (in thousands):
Three Months Ended
October 31,
2004 2003
-------- --------
Revenues:
Construction $ 5,913 $ 4,899
Manufacturing 8,096 9,340
Other 233 208
-------- --------
14,242 14,447
-------- --------
Intersegment revenues:
Construction 824 633
Manufacturing 723 42
Other 165 154
-------- --------
1,712 829
-------- --------
Consolidated revenues:
Construction 5,089 4,266
Manufacturing 7,373 9,298
Other 68 54
-------- --------
Total Consolidated Revenues $12,530 $13,618
-------- --------
Earnings (loss) before income taxes
and minority interest:
Construction $ 108 $ 51
Manufacturing (594) 741
Other (432) (409)
-------- --------
Total $ (918) $ 383
-------- --------
The majority of revenues have historically been derived
from projects on which the Company is a subcontractor of a
material supplier, other contractor or subcontractor. Where the
Company acts as a subcontractor, it is invited to bid by the
firm seeking construction services or materials; therefore,
continuing favorable business relations with those firms that
frequently bid on and obtain contracts requiring such services
or materials are important to the Company. Over a period of
years, the Company has established such relationships with a
number of companies. During the three months ended October 31,
2004, one customer, in the manufacturing segment, accounted for
23% of "Total revenue", while two customers accounted for 39%
and 17% of "Manufacturing revenue". No customer in the
construction segment accounted more than 10% of total revenues.
The Company's bridge girder subsidiary is dependent upon
one supplier of rolled steel plate. The Company maintains good
relations with the vendor, generally receiving orders on a
timely basis at reasonable cost for this market. If the
relationship with this vendor were to deteriorate or the vendor
were to go out of business, the Company would have trouble
meeting production deadlines in its contracts, as the other
major supplier of steel plate has limited excess production
available to "new" customers.
4. INVENTORIES
Materials inventory consists of structural steel, steel
plates and galvanized steel coils. Cost of materials inventory
is accounted for using either the specific identification or the
average cost method. The cost of supplies inventory is accounted
for using the first-in, first-out, (FIFO) method. No significant
amount of inventory is included in contracts in process.
5. PURCHASE OF ASSETS
During the three months ended October 31, 2004, the Company
purchased Property and Equipment, for use in its operations, for
approximately $2.1 million. Approximately $2 million of the
Property and Equipment purchases were for two cranes that the
Company had previously leased and were financed at prevailing
rates. The additional $100,000 was paid out of operating cash.
6. RECLASSIFICATIONS
Certain Balance Sheet and Statement of Operations items for
the prior period have been reclassified to conform to current
period classifications.
7. SUBSEQUENT EVENT
Subsequent to October 31, 2004, the Company recognized
income of $828,000 on the write-off of debt on which the statute
of limitations had run. The debt was a bank loan, which was
personally obtained by Frank E. Williams, Jr. for the Company,
and for which he was indemnified by the Company. Mr. Williams,
Jr. was released from the loan by the bank, leaving the Company
directly liable. In the opinion of counsel, the bank is
precluded from collection of this debt. The loan has been
carried in "Other liabilities" on the Balance Sheet.
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
General
- -------
The subsidiaries of Williams Industries, Inc. provide
specialized services and products for the construction industry.
They operate in the commercial, industrial, governmental and
infrastructure construction markets, with the operating components
divided into construction and manufacturing segments. The services
provided include: steel, precast concrete and miscellaneous metals
erection and installation; crane rental; rigging; fabrication of
welded steel plate girders and rolled beams, "stay-in-place" bridge
decking, and light structural and other metal products.
The Company's manufacturing segment continues to be
impacted by steel price increases, which have increased by as
much as 100% over the past twelve months. Although steel product
costs have stabilized recently, the Company anticipates that
there will be additional increases. The manufacturing companies
are attempting to recover the additional cost of steel from
customers where possible, where contracts were awarded prior to
the rapid price increase. The manufacturing segment's operations
were also negatively affected by the costs associated with the
shutdown of the Bessemer, Alabama manufacturing plant. The last
girders have been fabricated and it is hoped that they will be
shipped by December 31, 2004. At that time the plant will be
closed. The Company is negotiating the final terms of the buy
out of the plant equipment with the owner. Under the terms of
the lease, the Company will be required to pay $500,000 for that
equipment.
In mid September, 2004, the Company's S.I.P., Inc of
Delaware (SIP) plant in Wilmington, Delaware became fully
operational again, when the main press, which had been
vandalized in March 2004, was finally repaired. At the same time
the Gadsden, Alabama plant was shut down until adequate
materials inventory and additional contracts can be obtained. At
current operating levels, management felt that SIP could operate
more efficiently from its Wilmington, Delaware plant.
Material Changes in Financial Condition
For the three months ended October 31, 2004, the following
changes occurred:
The Company's Cash and Cash Equivalents and Restricted Cash
decreased $163,000 as the Company used cash for operations.
Accounts Receivable decreased by approximately $1.3 million
as revenues for the quarter declined from the previous quarter
and the Company continued to aggressively collect receivables.
Inventory increased $3.4 million as the Company purchased
steel plate and galvanized steel coils to produce its work,
mainly on the I95/395/495 Springfield Interchange Project in
Virginia and the Virginia approach to the Woodrow Wilson Bridge
near Washington, DC. The Company has adequate inventory on hand
to meet current needs.
Prepaid expenses and other assets increased $379,000 as the
Company, through cash payments and notes payable, pre-paid its
vehicle, equipment, general liability and umbrella insurance
policies. These insurance costs will be expensed over the next
eleven months.
Property and Equipment increased approximately $2 million
as the Company purchased two previously leased cranes for $2
million, financing the cranes at competitive rates
Deferred income taxes increased $350,000 due to the
Company's tax benefit for the quarter. In evaluating the
Company's ability to recover our deferred tax assets, we
consider all available positive and negative evidence including
our past operating results, the existence of cumulative losses
in the most recent fiscal years and our forecast of future
taxable income. In determining future taxable income, the
Company is responsible for assumptions utilized including the
amount of state and federal pre-tax operating income, the
reversal of temporary differences and the implementation of
feasible and prudent tax planning strategies. These assumptions
require significant judgment about the forecasts of future
taxable income and are consistent with the plans and estimates
the Company is using to manage the underlying businesses.
At October 31, 2004, the Company had about $4.6 million in
variable rate notes payable. Total Notes Payable increased $2.2
million during the three months ended October 31, 2004. The
Company borrowed approximately $2.9 million, of which $1.9
million was used to fund equipment purchases, $600,000 was used
to fund insurance financing and $400,000 was used to fund short-
term operations. The Company repaid $700,000 related to short
term borrowing, mainly from funds from operations.
Accounts Payable increased $515,000 as the Company recorded
operational expenses mainly related to the workers' compensation
insurance program of approximately $300,000.
Billings In Excess of Costs and Estimated Earnings on
Uncompleted Contracts, and Costs and Estimated Earnings in
Excess of Billings, decreased a net amount of $2.4 million as a
result of timing of revenue recognition on a mix of contracts in
process.
Other Liabilities decreased by $366,000 mainly related to
reduction in accruals for payroll related costs at October 31,
2004.
Stockholders' Equity decreased $577,000 to $15.616 million
related to the Company's net loss for the quarter.
For the three months ended October 31, 2004, the Company
used net cash of $185,000. $303,000 was used in operations, $2.9
million provided from borrowings of long-term debt, while the
Company paid back $730,000 against borrowings in financing
activities. The Company used $2.1 million for investing
activities, which consisted primarily of property and equipment
purchases.
The Company was not in compliance with its earnings
covenant with Wachovia Bank related to its Industrial Revenue
Bond for its Richmond, Virginia facility. The Company owed
approximately $925,000 on its notes payable to Wachovia at
October 31, 2004. These notes are reported in the "Current
portion of notes payable" at October 31, 2004 due to the current
expiration of the related Letter of Credit on March 31, 2005.
Management believes that operations will generate
sufficient cash to fund activities. However, as revenues
increase, raw material prices increase or suppliers restructure
payment terms, it will be necessary to increase the Company's
credit facilities to handle short-term cash requirements.
Management, therefore, is focusing on the proper allocation of
resources to ensure stable growth.
Material Changes in Results of Operations
- -----------------------------------------
Three Months Ended October 31, 2004 Compared to
Three Months Ended October 31, 2003
For the quarter ended October 31, 2004, the Company
reported a decline in revenues, gross profit and earnings when
compared to the quarter ended October 31, 2003.
The Company produced a net loss of $577,000, or $0.16 per
share, on total revenue of $12.5 million for the quarter ended
October 31, 2004 as compared to net earnings of $227,000, or
$0.06 per share, on total revenue of $13.6 million for the
quarter ended October 31, 2003.
Construction segment revenues increased $823,000. While
gross profit increased $95,000, the gross profit percentage
declined from 34.2% in 2003 to 29.5% in 2004. Earnings before
income taxes increased $57,000. The segment's rental equipment
company was more profitable as it began trucking bridge girders
for the bridge operation.
In the manufacturing segment, revenues for 2004 declined
$1.9 million or 20% when compared to 2003. Gross profit
decreased $1.8 million or 52% as jobs worked were affected by
price increases in the cost of materials, which began December
2003, as well as the additional cost from Williams Bridge
Company's Bessemer, Alabama plant operation, which is being
closed. The Company's Wilmington, Delaware plant produced
inefficiently until mid September when it's main press, which
had been vandalized in March 2004, was finally put back in
service. For 2004, the segment lost $594,000 before income taxes
and minority interest compared to a $741,000 profit in 2003.
Overhead decreased $303,000 related to the Company's close
down of its Bessemer, Alabama plant. General and Administrative
expenses decreased $213,000 as bonus accruals decreased $68,000
and the Company reduced other expenditures. Depreciation
increased $52,000 due to purchases of assets in the year ended
July 31, 2004 and the new cranes during the quarter ended
October 31, 2004. Interest expense increased $24,000 as the
prime interest rate has increased over the past twelve months.
BACKLOG
At October 31, 2004, the Company's backlog was $54.6
million, which is a decrease of approximately $4 million from
October 2003 and $5.4 million from July 31, 2004. Due to the
continuing delay of Congress in passing new transportation
funding, the bridge manufacturing companies have seen fewer jobs
on which they could bid. Until the new transportation act is
funded, many road jobs will be delayed, impairing the Company's
ability to maintain adequate backlog at acceptable levels.
Approximately $38 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 2006.
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 October 31, 2004, 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 October 31, 2004. There have
been no significant changes in the Company's internal controls
or in other factors that could significantly affect internal
controls subsequent to October 31, 2004.
Disclosure controls and procedures are the Company's
controls and procedures that are designed to ensure that
information required to be disclosed by the Company in the
reports that it files or submits 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.
The Company and its subsidiary Williams Equipment
Corporation were defendants in a suit in Prince William County,
Virginia, by SunTrust Leasing Corporation ("STL"). In the suit,
STL contended that the Company defaulted on the lease of a crane
and that STL was entitled to recover approximately $1.1 million.
During the quarter ended October 31, 2004, the Company settled
the suit through the purchase of the crane under lease for
$970,000, which was financed for 60 months at 6.71%.
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
On December 11, 2004, the shareholders of Williams
Industries, Inc. elected the Company's board of directors at the
annual meeting of shareholders. Elected were: Stephen N. Ashman,
R. Bentley Offutt, William J. Sim, Frank E. Williams, Jr., Frank
E. Williams, III and John A. Yerrick.
The results of the December 11, 2004 shareholder's election
of directors are as follows:
Nominee For Abstain
- ---------------------- --------- ----------
Stephen N. Ashman 3,421,277 70,176
R. Bentley Offutt 3,421,277 70,176
William J. Sim 3,445,082 46,371
Frank E. Williams, Jr. 3,415,435 76,018
Frank E. Williams, III 3,416,135 75,318
John A. Yerrick 3,414,070 77,383
ITEM 5. Other Information
None.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 31.1 Section 302 Certification for
Frank E. Williams, III
Exhibit 31.2 Section 302 Certification for
Christ H. Manos
Exhibit 32.1 Section 906 Certification for
Frank E. Williams, III and
Christ H. Manos
Exhibit 99 Press Release Dated December 15, 2004
(b) Reports on Form 8-K
None
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:
December 14, 2004 Williams Industries, Incorporated
---------------------------------
Registrant
/s/ Frank E. Williams, III
---------------------------------
Frank E. Williams, III
Chairman of the Board, President,
Chief Executive Officer,
Chief Financial Officer