Executives at Williams Industries Inc. shed new light on the construction firm's financial problems at a shareholders meeting Saturday, saying two work-related deaths contributed to $1.6 million in workers' compensation payouts this year.
At the annual meeting, a glum affair after Williams Industries of Manassas recently reported a $11.4 million loss for the fiscal year ended July 31, chief executive Frank E. Williams III said the two workers had not followed company safety rules.
The accidents involved "very seasoned veterans, and in both cases I believe the individuals put themselves in a situation where they shouldn't have been because of complacencies," Williams said, responding to a shareholder's question about the company's safety policies.
One employee died at a steel-fabrication plant in February, the other while working on the Springfield Interchange project in Northern Virginia in April, Williams said. He did not identify the workers or say how they died, and company Vice President Marianne V. Pastor said she was not aware of any lawsuits or other claims involving the deaths.
Williams said the company has new safety rules. "We have instituted a zero-tolerance policy in the field," he said. "If you are caught not obeying the company's safety rules you are terminated. There is no warning system. There is no probation. You are gone. We can no longer afford to allow a safety violation of company policy to occur."
Williams also told shareholders the firm lost money on the Springfield project partly because of "terrible job conditions." He was referring to severe traffic congestion at the site, Pastor said later.
The shareholders' meeting on Northern Virginia Community College's Annandale campus was far different from those in previous years. In better times, investors admired eye-catching displays showing off the company's big projects and collected keepsakes such as pens with the company logo before hearing enthusiastic updates on the company's projects from the Williams family -- Frank E. Williams Jr., who founded the firm in 1960, and son Frank III, who now runs it.
"When you walked away from a Williams meeting, it was almost as if you had been to a revival," said Wendie L. Wachtel, a longtime Williams investor who runs a District-based brokerage and investment firm with her sister, Bonnie.
Saturday morning, no gifts or display stands were in sight, and the Wachtels, who have seen their investment lose 65 percent of its value since mid-September, agreed with Williams's appraisal of his company's recent performance.
"Abysmal . . . dreadful . . . painful," were among the words he used.
About 60 of Williams Industries' 437 registered individual shareholders attended the meeting. Pastor called it a typical turnout. But Bonnie K. Wachtel, a regular at the shareholders' meetings since 1972, thought some discouraged investors stayed away. "People like to think they made a good decision with an investment," she said. "They don't want to come and think, 'I guess I blew it on this one.' "
As his father watched from the front row, Frank E. Williams III took just five minutes to assess the performance of his company, which fashions steel into bridges and highway girders.
"I realize these results could readily cause any rational person to say, 'How did you get in the current situation?' " he said. "Essentially, it comes down to three things: bad luck, bad timing, bad execution."
Bad luck, he said, because steel prices soared after the company signed contracts, without escalation clauses, to help build the Wilson Bridge and Springfield Interchange.
Bad timing, he said, because the company acquired a steel-fabrication facility in Alabama that failed, largely because Congress was slow to pass a highway spending bill.
Bad execution, he said, because the Springfield project was "very unprofitable."
To ensure the company's survival, Williams said the firm has taken measures including hiring a management consultant to "take a hard look at the company's strategy."
The Wachtels said they are not counting out Williams Industries because it has recovered from financial problems before. But the brokers would not advise buying the stock.
"I wouldn't recommend this, suggest this, consider this for anybody," Bonnie Wachtel said. "There are just too many variables with this company."