-----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, QwKm36dKipOOqj8eLHofFqTrdCng3BzeOrMRJ6x8h6JkwO0vzYctvY0UA4/VxdTc i4vsL6csKNKBN3WqlC/VEQ== 0000107294-03-000014.txt : 20030311 0000107294-03-000014.hdr.sgml : 20030311 20030311080202 ACCESSION NUMBER: 0000107294-03-000014 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030131 FILED AS OF DATE: 20030311 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: 1934 Act SEC FILE NUMBER: 000-08190 FILM NUMBER: 03598699 BUSINESS ADDRESS: STREET 1: 8624 JD READING DR CITY: MANASSAS STATE: VA ZIP: 20109 BUSINESS PHONE: 703357800 MAIL ADDRESS: STREET 1: PO BOX 1770 CITY: MANASSAS STATE: VA ZIP: 20108 10-Q 1 wq103.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10Q Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended January 31, 2003 Commission File No. 0-8190 WILLIAMS INDUSTRIES, INCORPORATED (Exact name of registrant as specified in its charter) Virginia 54-0899518 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 8624 J.D. Reading Drive, Manassas, Virginia 20109 (Address of principal executive offices) P.O. Box 1770, Manassas, VA 20108 (Mailing address of principal executive offices) (703) 335-7800 (Registrant's telephone number, including area code) Not Applicable (Former names, former addresses and former fiscal year, if change since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. YES X NO Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 126-2 of the Exchange Act). Yes NO X As of January 31, 2003, the Registrant had outstanding 3,569,776 shares of Common Stock. WILLIAMS INDUSTRIES, INCORPORATED FORM 10-Q FOR THE QUARTER ENDED JANUARY 31,2003 TABLE OF CONTENTS PART I - FINANCIAL INFORMATION PAGE ITEM 1. FINANCIAL STATEMENTS Condensed Consolidated Balance Sheets - January 31, 2003 and July 31, 2002 (Unaudited) 1 Condensed Consolidated Statements of Operations - Three months and six months ended January 31, 2003 and 2002 (Unaudited) 2 Condensed Consolidated Statements of Cash Flows - Six months ended January 31, 2003 and 2002 (Unaudited) 3 Notes to Condensed Consolidated Financial Statements (Unaudited) 4 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 8 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS 13 ITEM 4. CONTROLS AND PROCEDURES 13 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS 15 ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 16 ITEM 3. DEFAULTS UPON SENIOR SECURITIES 17 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 17 ITEM 5. OTHER INFORMATION 17 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 17 CERTIFICATIONS AND SIGNATURES 17 WILLIAMS INDUSTRIES, INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) ASSETS ($000 Omitted) January 31, July 31, 2003 2002 CURRENT ASSETS --------- --------- Cash and cash equivalents $ 2,658 $ 3,380 Restricted cash 13 50 Certificates of deposit 597 705 Accounts receivable, net 14,676 17,731 Inventory 5,082 4,866 Costs and estimated earnings in excess of billings on uncompleted contracts 3,179 1,509 Prepaid expenses and other assets 1,981 2,263 --------- --------- Total current assets 28,186 30,504 --------- --------- PROPERTY AND EQUIPMENT, AT COST 20,559 20,209 Accumulated depreciation (12,939) (12,238) --------- --------- Property and equipment, net 7,620 7,971 --------- --------- OTHER ASSETS Deferred income taxes 2,441 2,246 Other 2,196 1,535 --------- --------- Total other assets 4,637 3,781 --------- --------- TOTAL ASSETS $40,443 $42,256 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ CURRENT LIABILITIES Current portion of notes payable $ 1,836 $ 2,120 Accounts payable 6,341 4,900 Billings in excess of costs and estimated earnings on uncompleted contracts 3,964 4,104 Deferred income 86 99 Other liabilities 3,958 5,457 --------- --------- Total current liabilities 16,185 16,680 --------- --------- LONG-TERM DEBT Notes payable, less current portion 6,898 7,649 --------- --------- Total Liabilities 23,083 24,329 --------- --------- MINORITY INTERESTS 223 212 --------- --------- COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Common stock - 3,569,776 and 3,573,021 issued and outstanding 357 358 Additional paid-in capital 16,327 16,348 Retained earnings 453 1,009 --------- --------- Total stockholders' equity 17,137 17,715 --------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $40,443 $42,256 ========= ========= See Notes To Condensed Consolidated Financial Statements. WILLIAMS INDUSTRIES, INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) ($000 omitted) Three Months Ended Six Months Ended January 31, January 31, 2003 2002 2003 2002 REVENUE -------- -------- -------- -------- Construction $ 4,582 $ 5,781 $10,012 $11,547 Manufacturing 7,141 9,302 16,553 16,479 Other 74 38 123 282 -------- -------- -------- -------- Total revenue 11,797 15,121 26,688 28,308 -------- -------- -------- -------- DIRECT COSTS Construction 3,358 4,033 7,553 8,006 Manufacturing 4,656 5,193 10,748 9,264 -------- -------- -------- -------- Total direct costs 8,014 9,226 18,301 17,270 -------- -------- -------- -------- GROSS PROFIT 3,783 5,895 8,387 11,038 -------- -------- -------- -------- EXPENSES Overhead 2,055 2,189 3,973 3,847 General and administrative 2,065 2,514 4,060 4,554 Depreciation 410 377 821 753 Interest 150 167 312 340 -------- -------- -------- -------- Total expenses 4,680 5,247 9,166 9,494 -------- -------- -------- -------- (LOSS) EARNINGS BEFORE INCOME TAXES, AND MINORITY INTERESTS (897) 648 (779) 1,544 INCOME TAX (BENEFIT) PROVISION (284) 260 (234) 618 -------- -------- -------- -------- (LOSS) EARNINGS BEFORE MINORITY INTERESTS (613) 388 (545) 926 -------- -------- -------- -------- Minority interests (5) (4) (11) (14) -------- -------- -------- -------- NET (LOSS) EARNINGS $ (618) $ 384 $ (556) $ 912 ======== ======== ======== ======== NET (LOSS) EARNINGS PER COMMON SHARE- BASIC $(0.17) $ 0.10 $ (0.16) $ 0.25 ======== ======== ======== ======== NET (LOSS) EARNINGS PER COMMON SHARE-DILUTED $(0.17) $ 0.10 $ (0.16) $ 0.25 WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED 3,571,297 3,571,945 3,572,163 3,583,776 --------- --------- --------- --------- See Notes To Condensed Consolidated Financial Statements WILLIAMS INDUSTRIES, INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) ($000 Omitted) Six Months Ended January 31, 2003 2002 -------- -------- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES $ 660 $(3,345) NET CASH USED IN INVESTING ACTIVITIES (325) (621) NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (1,057) 1,865 -------- -------- NET DECREASE IN CASH AND CASH EQUIVALENTS (722) (2,101) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 3,380 3,748 -------- -------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 2,658 $ 1,647 ======== ======== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for: Income Taxes $ 177 $ 59 ======== ======== Interest $ 317 $ 338 ======== ======== See Notes To Condensed Consolidated Financial Statements. WILLIAMS INDUSTRIES, INCORPORATED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JANUARY 31, 2003 1. INTERIM FINANCIAL STATEMENTS This document includes unaudited interim financial statements that should be read in conjunction with the Company's latest audited annual financial statements. However, in the opinion of management, these financial statements contain all adjustments, consisting only of normal recurring items,necessary for a fair presentation of the Company's financial position as of January 31, 2003, as well as the results of its operations for the three and six months ended January 31, 2003 and 2002, respectively, and cash flows for the six months then ended. 2. RELATED-PARTY TRANSACTIONS Director Frank E. Williams, Jr., who owns or controls approximately 40% of the Company's stock, also owns controlling interests in the outstanding stock of Williams Enterprises of Georgia, Inc., and Structural Concrete Products, LLC. Additionally, Mr. Williams, Jr. owns a substantial interest in Bosworth Steel Erectors, Inc. (formerly Williams and Beasley Company). Each of these entities did business with the company during the three and six months ended January 31, 2003 and 2002. Billings to these entities were approximately $475,000 and $964,000 for the three months ended January 31, 2003 and 2002, respectively. Billings to these entities were approximately $874,000 and $1,898,000 for the six months ended January 31, 2003 and 2002, respectively. Costs incurred with these entities were approximately $434,000 and $570,000 for the three months ended January 31, 2003 and 2002, respectively. Costs incurred with these entities were approximately $973,000 and $757,000 for the six months ended January 31, 2003 and 2002, respectively. At January 31, 2003 and 2002 the Accounts Receivable due from these entities were $1,707,000 and $1,616,000, respectively. Accounts Payable to these entities was $404,000 and $463,000 at January 31, 2003 and 2002, respectively. The Company is obligated to the Williams Family Limited Partnership Under a lease agreement for real property with an option to purchase. The partnership is controlled by individuals, directly or indirectly, who own approximately 43% of the Company. The lease, which has an original term of five years and an extension option for five years, commenced February 15, 2000. The Company recognized lease expense for the three months ended January 31, 2003 and 2002 of $14,000 and $14,000, respectively. The Company recognized lease expense for the six months ended January 31, 2003 and 2002 of $28,000 and $28,000, respectively. Mr. George Pocock, an officer of the Company, owns a controlling interest in Construction Insurance Agency (CIA). Costs incurred with CIA, for insurance premiums and brokerage fees, were $25,000 and $162,000 for the three months ended January 31, 2003 and 2002, respectively. Costs incurred with CIA, for insurance premiums and brokerage fees, were $125,000 and $190,000 for the six months ended January 31, 2003 and 2002, respectively. Accounts payable to CIA were $30,000 and $107,000 at January 31,2003 and 2002, respectively. Directors Frank E. Williams, Jr. and Stephen N. Ashman are shareholders and directors of a commercial bank from which the Company obtained a $240,000 note payable during the quarter ended January 31, 2003. The note is payable in sixty equal monthly payments of principle plus interest at the greater of 5.75% or the current Prime rate, whichever is greater. The note, which replaced an existing current note payable that had a higher interest rate and payment, was negotiated at arms length under normal commercial terms. Payments made, including interest expense of approximately $1,000, were approximately $5,000 for the quarter ended January 31, 2003. 3. SEGMENT INFORMATION Information about the Company's operations in its operating segments For the three and six months ended January 31, 2003 and 2002 is as follows (in thousands): Three Months Ended Six Months Ended January 31, January 31, 2003 2002 2003 2002 Revenues: -------- -------- -------- --------- Construction $ 5,087 $ 6,196 $10,972 $12,600 Manufacturing 7,153 9,313 16,785 16,571 Other 255 236 478 638 -------- -------- -------- --------- 12,495 15,745 28,235 29,809 -------- -------- -------- --------- Intersegment revenues: Construction 505 415 960 1,053 Manufacturing 12 11 232 92 Other 181 198 355 356 -------- -------- -------- --------- 698 624 1,547 1,501 -------- -------- -------- --------- Consolidated revenues: Construction 4,582 5,781 10,012 11,547 Manufacturing 7,141 9,302 16,553 16,479 Other 74 38 123 282 Total Consolidated -------- -------- -------- --------- Revenues $11,797 $15,121 $26,688 $28,308 -------- -------- -------- --------- (Loss)earnings before income taxes and minority interest: Construction $ (352) $ (83) $ (568) $ 206 Manufacturing (124) 1,301 624 2,364 Other (421) (570) (835) (1,026) -------- -------- -------- --------- Total $ (897) $ 648 $ (779) $ 1,544 -------- -------- -------- --------- During the quarter ended January 31, 2003, the Company took action to curtail continuing losses associated with the Company's Sales and Services' segment. The Company closed the Jessup, Maryland office and the remaining essential activities previously performed by the Sales and Services segment were transferred to and consolidated in the Company's Construction Division. Revenues and direct costs from these activities, which were previously presented as a separate segment in the Company's financial statements are now included in the Company's Construction segment. The segment information presented above for the three and six month periods ended January 31, 2002 has been restated to include the Sales and Services information in the Construction segment. 4. INVENTORIES Materials inventory consists of structural steel, steel plates and galvanized steel coils. Costs of materials inventory is accounted for using either the specific identification method or average cost. The cost of supplies inventory is accounted for using the first-in, first-out, (FIFO) method. 5. PURCHASE OF ASSETS During the six months ended January 31, 2003, the Company purchased various fixed assets, for use in its operations, for approximately $415,000. Approximately $185,000 of the fixed asset purchases was financed at Prevailing rates, with $230,000 paid out of operating cash. 6. COMMON STOCK During the six months ended January 31, 2003, the Company purchased 6,093 shares of the Company's stock for approximately $25,000. 7. RECLASSIFICATIONS Certain Balance Sheet and Statement of Operations items for prior periods have been reclassified to conform to current period classifications. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations General The Company's operations serve the industrial, commercial and institutional construction markets, primarily in the Mid-Atlantic region of the United States. However, during Fiscal 2002, the Company expanded its operations, particularly in the manufacturing segment, to serve more of the southeastern region of the country. Demand for the Company's products and services has varied in recent months, with some projects being postponed and or delayed due to customers' schedule slippage, delays in raw material deliveries to the Company's plants and delays in submittals by government agencies. In some cases, weather had a significant impact on the Company's ability to do work. There continues to be strong demand for the Company's bridge deck girders and "stay-in-place" decking, due in part to continued governmental spending on infrastructure. During the quarter ended January 31, 2003, the Company took action to curtail continuing losses associated with the activities of the Company's former Sales and Services' segment. For many years, the Company has rented cranes and related heavy construction equipment to non-related entities in the construction industry. During the past 18 months, revenues from such rentals declined. After thorough analysis, the Company closed the Jessup, Maryland office, and essential activities were consolidated into the Company's Construction Division. However, the Company continues to incur ownership and operating costs on Company owned equipment and lease expense on leased equipment. The Company is attempting to sell items that are not necessary for its own operations, and to renegotiate or cancel leases on leased cranes and equipment to improve cash flow. Revenues and direct costs from these activities, which previously were shown separately in the Company's Condensed Consolidated Statements of Operations are now included in the Company's Construction segment. In the heavy construction industry, projects are generally contracted out by the owner to a general contractor or handled for the owner by a project manager, who, in turn, let out various portions of the work to be performed to various sub-contractors and sub-sub- contractors. The Company, with its combination of manufacturing, construction and heavy hauling and lifting capabilities, can and does offer, as appropriate, a turnkey approach for customers, reducing some of the complexity involved in awarding and overseeing a project. The company believes that this ability gives it a competitive advantage on some contracts over competitors without these broad capabilities. One of the most visible of recent large projects was work on a Virginia road project, Route 288, on which the Company fabricated the girders, erected the bridge girders using Company equipment and manufactured the "stay-in-place" forms for the bridge decks. During the quarter ended January 31, 2003, the Company changed its worker's compensation insurance carrier. The new program offers significantly better cash flow and slightly lower fixed costs. In the past, the Company paid in advance for its entire worker's compensation costs for the year. Under the new program, there are no upfront payments required. The carrier's base fee, which is a portion of the total program cost, is paid out over the policy year. All other costs are paid as incurred, resulting in improved cash flow during the year. Material Changes in Financial Condition For the six months ended January 31, 2003, the following changes occurred: The Company's Cash and Cash Equivalents, Restricted Cash and Certificates of Deposit decreased $867,000 as the Company used cash to pay down debt, fund plant expansion and fund operations. Accounts Receivable declined by approximately $3 million due to decreased revenues. Inventory increased by $216,000 as the Company held materials scheduled for projects that have incurred scheduling delays. The Company has adequate inventory on hand for current needs. Costs and Estimated Earnings in Excess of Billings increased by approximately $1.7 million. Due to adverse weather conditions, which caused delays in shipping, the Company was unable to bill its customers for completed product. Prepaid expenses and other assets declined $282,000 as the Company expensed its vehicle and equipment insurance premiums and other miscellaneous items. Other Assets increased $660,000 as the Company used its cash for: Site preparation for the Company's new headquarters to be located on its Manassas, Virginia property; plant expansion and manufacturing equipment in its Bedford, VA facility; and manufacturing equipment for its new Gadsden, AL facilities. At January 31, 2003, the Company has about $4.2 million in variable rate notes payable. Current low interest rates continue to benefit the Company and reduce interest expense. Notes Payable, current and long-term, declined approximately $1 million. The Company borrowed approximately $2.9 million, mainly for short-term operational uses, and paid back $3.9 million, mainly from operations. Accounts Payable increased $1.4 million due mainly to purchases of materials for the Manufacturing segment. Other Liabilities decreased by $1.5 million as the Company paid bonuses for the year-ended July 31, 2002 and paid accrued sales taxes in its Manufacturing segment. Stockholders' Equity declined $578,000 to $17,137,000. Of this total, $25,000 was due to the repurchase of company stock in the open market. For the six months ended January 31, 2003, the Company used net cash of $325,000 for investing activities, which consisted primarily of fixed asset purchases. Management believes that operations will generate sufficient cash to fund activities. However, as revenues increase, it may become necessary to increase the Company's credit facilities to handle short-term cash requirements, particularly in terms of inventory expansion for major fabrication projects. Management, therefore, is focusing on the proper allocation of resources to ensure stable growth. Material Changes in Results of Operations Three Months Ended January 31, 2003 Compared to Three Months Ended January 31, 2002 For the quarter ended January 31, 2003, the Company reported declines in revenues and earnings, due to a combination of bad weather and former sales and services activities. There was a net loss of $618,000 or $0.17 per share on total revenue of $11,797,000 for the quarter ended January 31, 2003 as compared to net income of $384,000 or $0.10 per share on total revenue of $15,121,000 for the quarter ended January 31, 2002. Losses from sales and services activities were 65% of the total loss for the quarter ended January 31, 2003. Management is downsizing these activities and is consolidating them into the Construction Segment. Management intends to sell assets as appropriate to reduce costs and improve cash flow. Overall direct costs, when viewed as a percentage of total revenue, increased. The Manufacturing Segment had a 9 percent increase in direct costs while the Construction Segment, which now includes sales and services activities, increased 3 percent. For the quarter ended January 31, 2002, overall direct costs were 61% of total revenue. In the quarter ended January 31, 2003, this increased to 68%. Weather was a major contributing factor to the overall decline in the Company's revenues for the quarter ended January 31, 2003. Less than optimal weather conditions, including floods, ice storms, and near record snow, hampered the Company's ability to perform construction work, and limited the delivery of materials to job sites. The Company attempts to time the manufacturing of its products with anticipated delivery schedules because of the terms and conditions surrounding payment for its products. Gross Profit as a percent of Revenue in the Manufacturing Segment declined from 44% for the three months ended January 31, 2002 to 35% for the three months ended January 31, 2003. This decrease was due to increased competition, and during the quarter ended January 31, 2002, Williams Bridge Company's Bessemer plant was working on time and material contracts that were residual from the plant's former owner. These contracts were produced at higher margins than those currently in the plant because the customer supplied the materials. Williams Bridge Company's current backlog is down by $6 million from the quarter ended January 31, 2002. This means that the hours the plants are working are down to a point where margins are substantially reduced. Six Months Ended January 31, 2003 Compared to Six Months Ended January 31, 2002 Net losses were $556,000 or $0.16 per share on total revenue of $26,688,000 for the six months ended January 31, 2003. These results compare to net income of $912,000 or $0.25 per share on total revenue of $28,308,000 for the six months ended January 31, 2002. Construction revenue went from $11,547,000 for the six months ended January 31, 2002 to $10,012,000 for the six months ended January 31, 2003. The Construction Segment also experienced revenue declines caused by project delays due to the inclement weather that has plagued much of the Company's traditional market areas during the second quarter of Fiscal 2003. Earning Before Taxes declined $2.3 million when the six months ended January 2003 is compared to the six months ended January 31, 2002. This decline is due in part to losses from Sales and Services' activities of $1,200,000 for the six months ended January 31, 2003 compared to losses of $368,000 for the six months ended January 31, 2002. Pre-Tax Earnings in the Manufacturing segment declined by $1.7 million when the same periods are compared. Gross Profit as a percent of Revenue in the Manufacturing Segment declined from 44% for the six months ended January 31, 2002 to 32% for the six months ended January 31, 2003. This decrease was due to increased competition, and during the six months ended January 31, 2002, Williams Bridge Company's Bessemer plant was working on time and material contracts that were residual from the plant's former owner. These contracts were produced at higher margins than those currently in the plant because the customer supplied the materials. The Company's manufacturing segment continues to benefit from consistent order flow for bridge girders and decking, both components of the federal government's multi- billion dollar infrastructure improvement (TEA 21) program. Manufacturing revenues increased slightly from $16,479,000 for the six months ended January 31, 2002 to $16,553,000 for the six months ended January 31, 2003. The trend of manufacturing becoming a larger part of the Company's business began with federal funding increases in Fiscal 1999. The increasing proportion of revenues generated by manufacturing is expected to continue for several years as funding for infrastructure programs is scheduled to continue increasing for at least five years. BACKLOG At January 31, 2003, the Company's backlog was $36 million, which is a decline of $6 million from October 31, 2002 and more than $10 million from July 31, 2002. The Company currently has bids pending on several significant jobs. The Company's backlog includes a good mix of work for the Construction and Manufacturing segments. Most of the backlog will be completed within the next 12 months if contract schedules are followed. Management believes that the level of work is sufficient to allow the Company to have adequate work into Fiscal 2004. Item 3. Quantitative and Qualitative Disclosures About Market Risk Interest Rate Risk The Company's cash equivalents and restricted cash, invested in interest-bearing instruments, are presented at fair value on the Company's balance sheets. The Company's exposure to market risks for changes in interest rates relate primarily to these investments and long-term debt. Item 4. Controls and Procedures As of January 31,2003, an evaluation was performed under the supervision and with the participation of the Company's management, including Chief Executive Officer (CEO) and Controller, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on that evaluation, the Company's management, including the CEO and Controller, concluded that the disclosure controls and procedures were effective as of January 31, 2003. There have been no significant changes in the Company's internal controls or in other factors that could significantly affect internal controls subsequent to January 31, 2003. Disclosure controls and procedures are designed to ensure that information, required to be disclosed by the Company in the reports that are filed or submitted under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files under the Exchange Act are accumulated and communicated to management, including the principal executive officers and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Safe Harbor for Forward-Looking Statements The Company is including the following cautionary statements to make applicable and take advantage of the safe harbor provisions within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 for any forward-looking statements made by, or on behalf of, the Company in this document and any materials incorporated herein by reference. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements, which are other than statements of historical facts. Such forward-looking statements may be identified, without limitation, by the use of the words "anticipates," "estimates," "expects," "intends," and similar expressions. From time to time, the Company or one of its subsidiaries individually may publish or otherwise make available forward-looking statements of this nature. All such forward-looking statements, whether written or oral, and whether made by or on behalf of the Company or its subsidiaries, are expressly qualified by these cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the Company disclaims any obligation to update any forward- looking statements to reflect events or circumstances after the date hereof. Forward-looking statements made by the Company are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed in, or implied by, the forward-looking statements. These forward-looking statements may include, among others, statements concerning the Company's revenue and cost trends, cost reduction strategies and anticipated outcomes, planned capital expenditures, financing needs and the availability of such financing, and the outlook for future activity in the Company's market areas. Investors or other users of forward-looking statements are cautioned that such statements are not a guarantee of future performance by the Company and that such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, such statements. Some, but not all of the risks and uncertainties, in addition to those specifically set forth above, include general economic and weather conditions, market prices, environmental and safety laws and policies, federal and state regulatory and legislative actions, tax rates and policies, rates of interest and changes in accounting principles or the application of such principles to the Company. PART II - OTHER INFORMATION ITEM 1. Legal Proceedings General The Company is party to various claims arising in the ordinary course of its business. Generally, claims exposure in the construction services industry consists of workers compensation, personal injury, products' liability and property damage. The Company believes that its insurance and other expense accruals, coupled with its primary and excess liability coverage, are adequate coverage for such claims or contingencies. Following months of negotiations, Williams Bridge Company reached a contract with the United Steelworkers of America for representation of the workforce at the subsidiary's Bessemer, AL manufacturing facility. The covered employees ratified the agreement on January 28, 2003. The agreement offered wages and benefits similar to those offered at the company's other facilities. During the quarter ended October 31, 2002, Williams Steel Erection Company, the Company's primary construction division operation, became the target of The International Association of Bridge, Structural, Ornamental & Reinforcing Iron Worker's union attempts at organizing the subsidiary's workforce. The union lost the election held on October 24, 2002. After an appeal by the union, the National Labor Relations Board certified the results of the election on December 20, 2002 in favor of Williams Steel. The union continued a negative media campaign against both the subsidiary and the parent company. As a consequence of the union's activity, the subsidiary's apprenticeship program faced a legal challenge in Virginia. The initial ruling did not favor the subsidiary, but an appeal has been noted. Contrary to published statements issued by the union, management believes this issue will have no bearing on the subsidiary's ability to obtain governmental contracts. ITEM 2. Changes in Securities and Use of Proceeds As part of its non-employee director compensation, the Company has issued unregistered shares and options to current and former directors as compensation for services rendered. These shares and options are issued under Rule 144 and are not offered to the public or underwritten. Shares are accrued at $600 per month at the monthly closing price and issued annually, and options are granted at the market price on the date of issuance. The following summarizes the unregistered shares and options to buy shares issued to Directors in the past three years: 2/9/03 7,590 shares issued and 15,000 options granted @ $3.55 1/21/02 5,925 shares issued and 12,500 options granted @ $4.45 1/19/01 5,800 shares issued and 12,500 options granted @ $2.78 ITEM 3. Defaults Upon Senior Securities None. ITEM 4. Submission of Matters to a Vote of Security Holders None. ITEM 5. Other Information None. ITEM 6. Exhibits and Reports on Form 8-K (a) Exhibits (99.1) CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, (b) Reports on Form 8-K (1) January 28, 2003 Item 5: Other Events Ratification of a labor agreement Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized: Date March 10, 2003 Williams Industries, Incorporated Registrant /s/ Frank E. Williams, III --------------------------- Frank E. Williams, III Chairman of the Board, President, Chief Executive Officer, Chief Financial Officer SECTION 302 CERTIFICATION CERTIFICATIONS I, Christ H. Manos, certify that: I have reviewed this quarterly report of Williams Industries, Inc. on Form 10-Q as of January 31, 2003; 1. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 2. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report. 3. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) Presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 4. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 5. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date /s/ Christ H. Manos - ------------------- Christ H. Manos Treasurer, Controller SECTION 302 CERTIFICATION CERTIFICATIONS I, Frank E. Williams, III, certify that: I have reviewed this quarterly report of Williams Industries, Inc. on Form 10-Q as of January 31, 2003; 6. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 7. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report. 8. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) Presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 9. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 10. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date /s/ Frank E. Williams, III - -------------------------- Frank E. Williams, III Chairman of the Board, President, Chief Executive Officer, Chief Financial Officer EX-99 3 w_ex99.txt EXHIBIT 99.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Williams Industries, Incorporated (the "Company") on Form 10-Q for the quarter ending January 31, 2003, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Frank E. Williams, III, the Chairman of the Company, certify, pursuant to and for purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date March 10, 2003 -------------- /s/ Frank E. Williams, III - -------------------------- Frank E. Williams, III Chairman of the Board, President, Chief Executive Officer, Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----