Not every company can blame Congress for its financial problems, but Williams Industries Inc. did just that last fall.
Frank E. Williams III, president and chief executive of the Manassas company that fabricates and erects steel for bridges and highway overpasses, said "political haggling" over a transportation bill was hanging up construction projects that his firm was counting on for revenue. Williams said delay of the bill was one reason the company shuttered its Bessemer, Ala., plant last year.
In May, the company defaulted on its loans with United Bank. In July, the lender gave Williams an extension until February to pay off its $5.4 million loan. The Williams family that founded the company and is still the largest shareholder sold some land to pay down the debt and put up other properties as collateral for the loan.
The company's troubles drew expressions of concern from Washington area officials counting on Williams Industries for big projects. Williams has a $30 million contract for the Wilson Bridge project and a $22 million contract for work on the Springfield interchange.
But things started looking up for Williams this month. On Aug 1, when Congress gave final approval to the long-delayed transportation bill, Williams' share price increased to a 52-week high of $4.97 from a low of $3.31 on July 27. By Friday, though, the shares closed at $3.62 apiece. Even though President Bush has signed the transportation bill into law, the money is still working its way through the system.
"There's hope that everything will improve when the money from this bill actually starts to hit the streets," said Marianne Pastor, vice president of Williams Industries. Company officials plan to bid for contracts in Virginia, Maryland and the District. They hope that once building of the new Washington Nationals baseball stadium begins, they'll get a piece of that construction. And they want to win "the ones with the largest profit margins," Pastor said.
In the meantime, though, gasoline prices are crimping margins at Williams, as at many companies. Williams's construction cranes require fuel, as do the trucks used to transport steel from the plant to construction sites.
And more highway funds won't solve the company's other big problem: soaring steel prices that have squeezed margins on existing contracts. Although prices have stabilized lately, Pastor said: "We are still a little bit shell-shocked from the spike in the steel prices that happened in the last two years."
-- Jenalia Moreno