-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JgV3rBon7yCIvGmryeqRXnuHwfwa5bvpW7ovnWBl/qbLcOaSkmGxI2SEF2TkaBbN im+DGLeOYjSXNdcjxz7rMA== 0000107294-01-500007.txt : 20010612 0000107294-01-500007.hdr.sgml : 20010612 ACCESSION NUMBER: 0000107294-01-500007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010430 FILED AS OF DATE: 20010611 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WILLIAMS INDUSTRIES INC CENTRAL INDEX KEY: 0000107294 STANDARD INDUSTRIAL CLASSIFICATION: FABRICATED STRUCTURAL METAL PRODUCTS [3440] IRS NUMBER: 540899518 STATE OF INCORPORATION: VA FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-08190 FILM NUMBER: 1657939 BUSINESS ADDRESS: STREET 1: P.O. BOX 1770 CITY: MANASSAS STATE: VA ZIP: 20108 BUSINESS PHONE: 703357800 MAIL ADDRESS: STREET 1: 2849 MEADOW VIEW RD CITY: FALLS CHURCH STATE: VA ZIP: 22042 10-Q 1 w11q-430.txt WILLIAMS INDUSTRIES, INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS ($000 Omitted) ASSETS April 30, July 31, 2001 2000 (Unaudited) (audited) --------- --------- CURRENT ASSETS Cash and cash equivalents $ 1,599 $ 2,568 Restricted cash 76 68 Certificates of deposit 850 681 Accounts receivable, net 14,642 13,289 Inventory 3,799 1,500 Costs and estimated earnings in excess of billings on uncompleted contracts 2,187 1,545 Prepaid and other expenses 1,541 1,120 --------- --------- Total current assets 24,694 20,771 PROPERTY AND EQUIPMENT, AT COST 20,394 18,485 Accumulated depreciation (11,308) (9,475) --------- --------- Property and equipment, net 9,086 9,010 --------- --------- OTHER ASSETS Investments in unconsolidated affiliates - 1,043 Deferred income taxes 2,977 3,423 Other 512 759 --------- --------- Total other assets 3,489 5,225 --------- --------- TOTAL ASSETS $ 37,269 $ 35,006 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Current portion of notes payable $ 2,134 $ 1,515 Accounts payable 4,675 4,899 Billings in excess of costs and estimated earnings on uncompleted contracts 3,120 2,409 Deferred income 131 221 Other liabilities 4,979 4,286 --------- --------- Total current liabilities 15,039 13,330 LONG-TERM DEBT Notes payable, less current portion 7,190 7,724 --------- --------- Total Liabilities 22,229 21,054 --------- --------- MINORITY INTERESTS 376 279 --------- --------- COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Common stock - 3,600,304 and 3,587,877 shares issued and outstanding 360 359 Additional paid-in capital 16,458 16,436 Accumulated deficit (2,154) (3,122) --------- --------- Total stockholders' equity 14,664 13,673 --------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 37,269 $ 35,006 ========= ========= See Notes To Condensed Consolidated Financial Statements. WILLIAMS INDUSTRIES, INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) ($000 omitted) Three Months Ended Nine Months Ended April 30 April 30 2001 2000 2001 2000 -------- -------- -------- -------- REVENUE Construction $ 3,134 $ 3,514 $ 8,993 $ 9,391 Manufacturing 6,533 5,737 19,426 15,241 Sales and service 2,340 2,226 7,160 5,754 Other 202 188 824 592 -------- -------- -------- -------- Total revenue 12,209 11,665 36,403 30,978 -------- -------- -------- -------- DIRECT COSTS Construction 2,082 2,582 5,956 6,716 Manufacturing 4,107 3,911 12,570 10,418 Sales and service 1,560 1,341 4,433 3,454 -------- -------- -------- -------- Total direct costs 7,749 7,834 22,959 20,588 -------- -------- -------- -------- GROSS PROFIT 4,460 3,831 13,444 10,390 -------- -------- -------- -------- EXPENSES Overhead 1,325 1,141 3,831 3,335 General and admin. 2,088 1,733 6,059 4,738 Depreciation 392 295 1,178 873 Interest 189 226 701 657 -------- -------- -------- -------- Total expenses 3,994 3,395 11,769 9,603 -------- -------- -------- -------- EARNINGS BEFORE INCOME TAXES, EQUITY EARNINGS AND MINORITY INTERESTS 466 436 1,675 787 INCOME TAX PROVISION 175 128 636 237 -------- -------- -------- -------- EARNINGS BEFORE EQUITY EARNINGS AND MINORITY INTERESTS 291 308 1,039 550 Equity earnings and minority interest 23 20 (71) 36 -------- -------- -------- -------- NET EARNINGS $ 314 $ 328 $ 968 $ 586 ======== ======== ======== ======== EARNINGS PER COMMON SHARE - BASIC $ 0.09 $ 0.09 $ 0.27 $ 0.16 ======== ======== ======== ======== NET EARNINGS PER COMMON SHARE - DILUTED $ 0.09 $ 0.09 $ 0.27 $ 0.16 ======== ======== ======== ======== WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC 3,593,013 3,589,516 3,594,414 3,588,510 --------- --------- --------- --------- See Notes To Condensed Consolidated Financial Statements WILLIAMS INDUSTRIES, INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) ($000 Omitted) Nine Months Ended April 30, 2001 2000 -------- -------- NET CASH PROVIDED BY OPERATING ACTIVITIES $ 970 $ 1,927 NET CASH USED IN INVESTING ACTIVITIES (1,575) (1,346) NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (364) 1,669 -------- -------- NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (969) 2,250 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 2,568 1,145 -------- -------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,599 $ 3,395 ======== ======== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for: Income Taxes $143 $52 ======== ======== Interest $693 $644 ======== ======== See Notes To Condensed Consolidated Financial Statements. WILLIAMS INDUSTRIES, INCORPORATED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS April 30, 2001 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, 2001, as well as the results of its operations for the three and nine months ended April 30, 2001 and 2000, and cash flows for the nine months then ended. 2. RELATED-PARTY TRANSACTIONS Mr. Frank E. Williams, Jr., who owns or controls approximately 36% of the Company's stock, and is also a director of the Company, also owns controlling or substantial interest in the outstanding stock of Williams Enterprises of Georgia, Inc., Williams and Beasley Company, and Structural Concrete Products, LLC. Each of these entities did business with the company during the quarter. Net billings to and (from) these entities were approximately $115,000 and ($294,000) for the three months ended April 30, 2001 and 2000, respectively. Net billings to and (from) these entities were approximately $643,000 and ($1,340,000) for the nine months ended April 30, 2001 and 2000, respectively Mr. Williams, Jr. was repaid $840,000 on loans he made during the nine months ended April 30, 2001 to Williams Bridge Company, one of the Company's subsidiaries. The Company is liable to the Williams Family Limited Partnership under a lease/option agreement. The initial lease term is for five years, beginning February 15, 2000, with an extension option. The Company recognized lease expense for the three and nine months ended April 30, 2001 of $14,000 and $60,000. 3. COMMITMENTS/CONTINGENCIES None 4. SEGMENT INFORMATION Information about the Company's operations in its operating segments for the three and nine months ended April 30, 2001 and 2000 is as follows (in thousands): Three Months Ended Nine Months Ended April 30, April 30, 2001 2000 2001 2000 ------- ------- ------- ------- Revenues: Construction $ 3,614 $ 3,930 $10,582 $10,389 Manufacturing 6,536 5,774 19,448 15,364 Sales & Service 2,744 2,341 7,893 6,102 Other 438 307 1,335 972 -------- -------- -------- -------- 13,332 12,352 39,258 32,827 -------- -------- -------- -------- Intersegment revenues: Construction 480 416 1,589 998 Manufacturing 3 37 22 123 Sales & Service 404 115 733 348 Other 236 119 511 380 -------- -------- -------- -------- 1,123 687 2,855 1,849 -------- -------- -------- -------- Consolidated revenues: Construction 3,134 3,514 8,993 9,391 Manufacturing 6,533 5,737 19,426 15,241 Sales & Service 2,340 2,226 7,160 5,754 Other 202 188 824 592 Total -------- -------- -------- -------- Consolidated Revenues: $12,209 $11,665 $36,403 $30,978 ======== ======== ======== ======== Earnings before income taxes equity earnings and minority interest: Construction $ 213 $ 263 $ 719 $ 701 Manufacturing 672 535 1,942 1,086 Sales & Service 23 148 357 268 Other (442) (510) (1,343) (1,268) -------- -------- -------- -------- Total $ 466 $ 436 $ 1,675 $ 787 ======== ======== ======== ======== 5. INVENTORIES Inventory mainly consists of materials used in the manufacturing segment. 6. PURCHASE OF ASSETS Effective August 1, 2000, the Company purchased an additional 55.6% of the stock of S.I.P., Inc. for approximately $1,302,000 in cash and notes receivable. The Company now owns 98.1% of the stock of S.I.P., Inc. This acquisition has been accounted for as a purchase. 7. RECLASSIFICATIONS Certain Balance Sheet and Statement of Earnings items for prior periods have been reclassified to conform to current period classifications. Item 2. Management's Discussion and Analysis 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. Demand for the Company's products and services continues to be strong, due in part to increased governmental spending on infrastructure in recent years. The Company, like others in the construction industry, continues to experience difficulties in hiring and retaining qualified personnel to meet this demand. The Company does not believe it is at a competitive disadvantage as it relates to labor. The Company's subsidiaries, through the combination of manufacturing, construction, and heavy hauling and lifting capabilities, offer a turnkey approach for customers, thereby increasing its competitiveness on some contracts. Each of the subsidiaries maintains its own customer base, but works to translate individual projects into broader opportunities for the Company to obtain work. Financial Condition The Company's net working capital decreased from $9,939,000 at January 31, 2001 to $9,655,000 at April 30, 2001. When compared to the quarter ended January 31, 2001, inventory at April 30, 2001 increased by $393,000 due to timing of shipments from the Company's bridge girder manufacturing subsidiary. When compared to July 31, 2000, inventory increased by $2,299,000 due to the combination of increased volumes of work in the Company's manufacturing operations as well as purchases made to take advantage of favorable material prices. Stockholder's Equity increased. At April 30, 2001, Stockholder's Equity was $14,664,000, compared to $14,347,000 at January 31, 2001. The Company's issued and outstanding shares increased slightly from 3,598,796 shares at January 31, 2001 to 3,600,304 at April 30, 2001, primarily due to purchases through the Employee Stock Purchase Plan. Overall gross profit margins improved from the quarter ended April 30, 2000 to the quarter ended April 30, 2001 in both the Construction and Manufacturing segments, while declining in the Sales and Service segment. For the quarter ended April 30, 2000, direct costs were 67.2% of total revenue. At April 30, 2001, this had declined to 63.4%. The Company's total Notes Payable, both long and short term, increased by approximately $85,000 from July 31, 2000. Current Notes Payable increased by $600,000, due mainly to insurance financing. Long-term Notes Payable declined by $534,000 due to repayment of debt. The Company's Cash and Cash Equivalents declined from $3,395,000 at April 30, 2000 to the $1,599,000 at April 30, 2001. The Company continues to generate sufficient cash to sustain its operational activities, as well as service all outstanding debt. For the nine months ended April 30, 2001, the Company used net cash of $1,575,000 in its investing activities. Of this total, $656,000 was used to purchase additional shares of S.I.P. Inc., increasing its ownership to approximately 98% of the stock. During the nine months, the Company also used net cash for site preparation work for its new headquarters to be located in Manassas, Virginia. Williams Industries (parent company) and several of its subsidiaries moved to temporary facilities on Company-owned property during April 2001. Capital expenditures of approximately $2 million are anticipated over the course of Fiscal 2001 and 2002 in conjunction with the relocation and construction of the corporate facility. The Company currently has about $2.8 million in variable rate notes. Management believes that operations will generate sufficient cash to fund activities. However, as revenues increase, it may become necessary to continue increasing 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. Three Months Ended April 30, 2001 Compared to Three Months Ended April 30, 2000 The Company reported net income of $314,000 or $0.09 per share on total revenue of $12,209,000 for the quarter ended April 30, 2001. These results compare to net income of $328,000 or $0.09 per share on total revenue of $11,665,000 for the quarter ended April 30, 2000. The Construction segment experienced a decline in revenue. While the majority of this decline is due to a combination of weather-related issues and the timing of start-ups on new projects, the Construction segment has also encountered new competition on several recent projects. The new entry into the market is not anticipated to be a long-term competitor, but did have ramifications for the short-term. The Manufacturing segment experienced an increase in revenues of approximately $796,000. While all of the Company's manufacturing subsidiaries continue to book new work, this increase came from the consolidation of S.I.P., Inc. of Delaware, whose results were not included in the April 2000 report. The Sales and Services segment also had a slight increase in revenues. Some of this increase is attributed to the Company's recent consolidation of crane management, allowing higher utilization for both long and short-term projects. More coordinated scheduling also permits the Company to seize emergency and time-sensitive opportunities. Direct costs, when viewed as a percentage of total revenue, declined, while expenses, as viewed as a percentage of revenue, increased. The relative decline in direct costs is a result of higher margin jobs during the quarter. The increase in expenses is primarily due to the inclusion of the operations of S.I.P. in the consolidated results. Nine Months Ended April 30, 2001 Compared to Nine Months Ended April 30, 2000 For the nine months ended April 30, 2001, the Company had net earnings of $968,000 or $0.27 per share on revenue of $36,403,000 compared to net earnings of $586,000 or $0.16 per share on revenue of $30,978,000 for the nine months ended April 30, 2000. The Company's revenue growth is concentrated in the Manufacturing segment. New projects, as well as the addition of S.I.P., Inc. of Delaware to the Company's consolidated results, accounted for most of the Company's increased revenues. The Company's Manufacturing segment benefited from consistent order flow for bridge girders and decking, both components of the TEA 21 program. Manufacturing revenues increased from $15,241,000 for the nine months ended April 30, 2000 to $19,426,000 for the nine months ended April 30, 2001. The trend of manufacturing becoming a larger percentage 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 as funding for infrastructure programs is scheduled to continue for at least five years. Gross profit margins increased from 33.5% for the nine months ended April 30, 2000 to 36.9% for the nine months ended April 30, 2001. BACKLOG At April 30, 2001, the Company's backlog was approximately $45.5 million. While this is a modest increase of about $1.5 million from January 31, 2001, it is a significant increase, nearly $10 million, from April 30, 2000. It should be noted that the Company's consolidated backlog now includes S.I.P. Inc. of Delaware, which represents about $7 million of the April 2001 total. The Company's current backlog includes a good mix of work for the Construction and Manufacturing segments. Sales and Service's work is normally performed as needed. As a result, only a small percentage of the backlog is derived from this segment. 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 2002. 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 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. ITEM 2. Changes in Securities 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 None (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. WILLIAMS INDUSTRIES, INCORPORATED June 8, 2001 /s/ Frank E. Williams, III Frank E. Williams, III President, Chairman of the Board Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----