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Road Bill, Steel Prices Blamed for Firm's Loss

By Michael Flagg
Washington Post Staff Writer
Thursday, November 4, 2004; Page PW01

Williams Industries Inc. may be one of the smaller publicly held companies in the region, but that didn't stop it from speaking in a loud voice in its last earnings release.

A small, specialty construction company in Manassas -- among other things, it fashions big pieces of steel for bridges and highway overpasses -- Williams blasted Congress and the Bush administration last month for letting an entire year go by without putting a new highway spending bill into law.

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Since that day two weeks ago, Williams has gotten more than four dozen calls from people applauding its public stance.

Among the callers was Bob Chase, president of the Northern Virginia Transportation Alliance, which lobbies in Richmond and the District of Columbia for new roads.

"I told them if we had more companies speaking out, we'd probably be a lot further along," Chase said. "It's unusual for an individual company to do this, but if more would get involved, some of these logjams might be broken."

In a news release explaining why the company lost almost $800,000 last year, President and Chief Executive Frank E. Williams III, a Republican, said last month, "The fact that Congress has been unwilling or unable to pass a new infrastructure spending bill after more than 18 months of political haggling is an indictment of our lack of domestic priorities. Our elected officials on both sides of the aisle can't seem to find time to focus on what is clearly a priority for the safety of the American people."

The callers weren't just from local advocates. Calls came in from as far away as California and Connecticut.

"The guy in L.A. wanted an investor packet," said Marianne V. Pastor, director of investor relations. "The fact we were fairly blunt about Congress's negligence got people's attention."

But Robert F. Norfleet, a stock analyst, said he thinks congressional inaction on the highway bill played only a small role in Williams's loss last fiscal year, which ended July 31. The far bigger factor was the high price of steel. Indeed, he said, the company's backlog of work increased over the year.

"Just because you have a lot of work, it doesn't mean you're going to make lots of money," said Norfleet, an analyst at Richmond brokers Davenport & Co., who recommends buying the stock as a long-term investment. "As a result of higher steel prices, your profits get hit. And that's what has really happened to Williams."

"Steel prices are killing us," said Edwin Jennings, president of Richmond's Liphart Steel Co., which fashions and erects steel beams and girders for the framework of buildings. "If you signed a construction contract a year ago, and you're buying steel for it now, you're dead."

Jennings said steel costs him $100 a ton, double what it cost a year ago.

Williams noted briefly that high steel prices contributed to its loss. But the company looks at the issue another way: The delay on the highway bill cost it contracts more profitable than the ones in its backlog because the new ones take into account the higher price of steel.

The delay in the highway bill hurt Williams by forcing it to close an Alabama plant for fashioning huge pieces of steel. The company hoped the plant, which it plans to close soon, would allow it to expand into the Southeast, but the plant doesn't have enough work.


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