UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Date of Report (Date of Earliest Event Reported): September 30, 2003
WILLIAMS CONTROLS, INC.
(Exact name of Company as specified in its charter)
| Delaware | 0-18083 | 84-1099587 | ||
| (State or other jurisdiction of incorporation) | (Commission File No.) | (I.R.S. Employer Identification No.) |
14100 S.W. 72nd Avenue, Portland, OR 97224
(Address of Principal Executive Offices)
(503) 684-8600
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report.)
Williams Controls, Inc. (“Williams”) through its wholly owned subsidiary ProActive Acquisition Corporation (“ProActive”) entered into an Asset Purchase Agreement with Teleflex Incorporated and its subsidiary Teleflex Automotive Incorporated (“Teleflex”) on September 30, 2003, whereby Williams through ProActive agreed to sell to Teleflex substantially all of their assets used to manufacture the passenger car and light truck electronic throttle control (“ETC”) products. The sold assets included accounts receivable, inventories, deposits, prepaid expenses, and property, plant and equipment. Certain Williams patent agreements were licensed to Teleflex and certain Teleflex patent agreements were licensed to Williams. These licenses are described in the Intellectual Property Agreement included as an exhibit in the Asset Purchase Agreement. In addition, Teleflex assumed certain liabilities such as accounts payable and accrued expenses as described in the Asset Purchase Agreement, which is attached to this Form 8-K as Exhibit 2.1.
After applying the adjustments specified in the Asset Purchase Agreement at the closing, the net purchase price for the assets sold and liabilities assumed was $6.4 million. The net proceeds of this transaction were received on October 1, 2003. The net proceeds of the sale were used to reduce outstanding bank debt and for other corporate purposes.
| Item 7. | Financial Statements, Pro Forma Financial Information, and Exhibits |
| (a) | Financial Statements of Business Acquired. Not applicable. |
| (b) | Pro Forma Financial Information. |
| (i) | Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2003. |
| (ii) | Unaudited Pro Forma Condensed Consolidated Statement of Operations for the nine months ended June 30, 2003. |
| (iii) | Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended September 30, 2002. |
| (iv) | Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet and Condensed Consolidated Statements of Operations. |
| (c) | Exhibits. |
| 2.1 | Asset Purchase Agreement dated September 30, 2003 by and among Williams Controls, Inc., ProActive Acquisition Corporation, Teleflex Incorporated, and Teleflex Automotive Incorporated. |
| 99.1 | Williams Controls, Inc. Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2003; Unaudited Pro Forma Condensed Consolidated Statement of Operations for the nine months ended June 30, 2003; Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended September 30, 2002; and Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet and Condensed Consolidated Statements of Operations. |
2
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed for and on its behalf by the undersigned hereunto duly authorized.
| WILLIAMS CONTROLS, INC. | |||
|---|---|---|---|
| Date: December 09, 2003 | By: | /s/ DENNIS E. BUNDAY Dennis E. Bunday Chief Financial Officer | |
3
The following unaudited pro forma condensed consolidated financial statements as of and for the nine months ended June 30, 2003 and for the year ended September 30, 2002 have been derived from the historical financial statements of Williams Controls, Inc. and subsidiaries (“Williams”) to give effect to the sale of substantially all assets related to the manufacturing of its passenger car and light truck electronic throttle control products. The passenger car and light truck electronic throttle control products represent a component of the Company’s continuing vehicle component segment, which consists of the manufacturing of electronic throttle controls primarily for trucks and other vehicles.
The unaudited pro forma condensed consolidated statements of operations for the nine months ended June 30, 2003 and for the year ended September 30, 2002 reflect adjustments as if the transaction had taken place at the beginning of each period. The unaudited condensed consolidated balance sheet as of June 30, 2003 reflects adjustments as if the transaction occurred on June 30, 2003.
Certain pro forma adjustments described in the accompanying notes are based on estimates and various assumptions that Williams believes are reasonable under the circumstances.
The unaudited pro forma condensed consolidated financial statements should be read in conjunction with Williams financial statements, including the notes thereto, as of and for the nine months ended June 30, 2003, and the related Management’s Discussion & Analysis of Financial Condition and Results of Operations, contained in its Form 10-Q for the nine months ended June 30, 2003, as well as the financial statements, including the notes thereto, for the year ended September 30, 2002, and the related Management’s Discussion & Analysis of Financial Condition and Results of Operations, contained in its Form 10-K/A for the year ended September 30, 2002.
JUNE 30, 2003
(In thousands)
| Assets | As Reported | Pro Forma Adjustments | Pro Forma | ||
|---|---|---|---|---|---|
| Current assets | |||||
| Cash and cash equivalents | $ 860 | $ 980 | (a) (b) | $ 1,840 | |
| Trade and other accounts receivable, net | 8,022 | (1,498) | (a) | 6,524 | |
| Inventories, net | 5,532 | (1,099) | (a) | 4,433 | |
| Prepaid expenses and other current assets | 711 | (88) | (a) | 623 | |
| Total current assets | 15,125 | (1,705) | 13,420 | ||
| Property, plant and equipment, net | 10,201 | (4,306) | (a) | 5,895 | |
| Other assets, net | 346 | -- | 346 | ||
| Total assets | $ 25,672 | $(6,011) | $ 19,661 | ||
| Liabilities and Shareholders' Deficit | |||||
| Current liabilities | |||||
| Accounts payable | $ 4,137 | $ (307) | (a) | $ 3,830 | |
| Accrued expenses | 6,054 | (204) | (a) | 5,850 | |
| Current portion of long-term debt and capital leases | 4,991 | (4,573) | (b) | 418 | |
| Total current liabilities | 15,182 | (5,084) | 10,098 | ||
| Long-term debt and capital lease obligations | 935 | (457) | (b) | 478 | |
| Employee benefit obligations | 7,571 | -- | 7,571 | ||
| Mandatory redeemable Convertible Series B Preferred Stock, net | 14,986 | -- | 14,986 | ||
| Commitments and contingencies | |||||
| Shareholders' deficit | |||||
| Preferred stock | |||||
| Series A-1 | 1 | -- | 1 | ||
| Series A | -- | -- | -- | ||
| Common stock | 201 | -- | 201 | ||
| Additional paid-in capital | 23,687 | -- | 23,687 | ||
| Accumulated deficit | (32,489) | (470) | (a) | (32,959) | |
| Treasury stock | (377) | -- | (377) | ||
| Other comprehensive loss - Pension liability adjustment | (4,025) | -- | (4,025) | ||
| Total shareholders' deficit | (13,002) | (470) | (13,472) | ||
| Total liabilities and shareholders' deficit | $ 25,672 | $(6,011) | $ 19,661 | ||
See notes to unaudited pro forma condensed consolidated balance sheet and statements of operations.
5
NINE MONTHS ENDED JUNE 30, 2003
(In thousands, except per share data)
| As Reported | Pro Forma Adjustments | Pro Forma | |||
|---|---|---|---|---|---|
| Net sales | $ 37,919 | $ (3,307) | (c) | $34,612 | |
| Cost of sales | 29,763 | (4,411) | (c) | 25,352 | |
| Gross margin | 8,156 | 1,104 | 9,260 | ||
| Operating expenses | |||||
| Research and development | 2,726 | (1,002) | (c) | 1,724 | |
| Selling | 1,060 | (302) | (c) | 758 | |
| Administration | 3,654 | (685) | (c) | 2,969 | |
| Gain on settlement with customer | (951) | -- | (951) | ||
| Total operating expenses | 6,489 | (1,989) | 4,500 | ||
| Income from continuing operations | 1,667 | 3,093 | 4,760 | ||
| Other (income) expenses: | |||||
| Interest income | (23) | -- | (23) | ||
| Interest expense | 426 | (134) | (b) | 292 | |
| Other (income) expense, net | (160) | -- | (160) | ||
| Total other (income) expenses | 243 | (134) | 109 | ||
| Income from continuing operations before income taxes | 1,424 | 3,227 | 4,651 | ||
| Income tax benefit (e) | 300 | -- | 300 | ||
| Net income from continuing operations | $ 1,724 | $ 3,227 | $ 4,951 | ||
| Income (loss) per common share from continuing operations - basic (d) | $ (0.01) | $ 0.16 | $ 0.15 | ||
| Weighted average shares used in per share calculation - basic | 20,103 | 20,103 | 20,103 | ||
| Income (loss) per common share from continuing operations - diluted (d) | $ (0.01) | $ 0.06 | $ 0.09 | ||
| Weighted average shares used in per share calculation - diluted | 20,103 | 53,512 | 53,512 | ||
See notes to unaudited pro forma condensed consolidated balance sheet and statements of operations.
6
YEAR ENDED SEPTEMBER 30, 2002
(In thousands, except per share data)
| As Reported | Pro Forma Adjustments | Pro Forma | |||
|---|---|---|---|---|---|
| Net sales | $ 52,504 | $ (5,109) | (c) | $ 47,395 | |
| Cost of sales | 37,890 | (5,072) | (c) | 32,818 | |
| Gross margin | 14,614 | (37) | 14,577 | ||
| Operating expenses | |||||
| Research and development | 3,549 | (1,266) | (c) | 2,283 | |
| Selling | 1,349 | (424) | (c) | 925 | |
| Administration | 6,786 | (1,494) | (c) | 5,292 | |
| Loss on impairment of investment - Ajay | 3,565 | -- | 3,565 | ||
| Total operating expenses | 15,249 | (3,185) | 12,064 | ||
| Income (loss) from continuing operations | (635) | 3,148 | 2,513 | ||
| Other (income) expenses: | |||||
| Interest expense | 1,651 | (360) | (b) | 1,291 | |
| Other (income) expense, net | 190 | -- | 190 | ||
| Total other (income) expenses | 1,841 | (360) | 1,481 | ||
| Income (loss) from continuing operations before income taxes | (2,476) | 3,508 | 1,032 | ||
| Income tax benefit (e) | 131 | -- | 131 | ||
| Net income (loss) from continuing operations | $ (2,345) | $ 3,508 | $ 1,163 | ||
| �� | |||||
| Income (loss) per common share from continuing operations - basic (d) | $ (0.15) | $ 0.18 | $ 0.03 | ||
| Weighted average shares used in per share calculation - basic | 19,928 | 19,928 | 19,928 | ||
| Income (loss) per common share from continuing operations - diluted (d) | $ (0.15) | $ 0.16 | $ 0.02 | ||
| Weighted average shares used in per share calculation - diluted | 19,928 | 22,362 | 22,362 | ||
See notes to unaudited pro forma condensed consolidated balance sheet and statements of operations.
7
WILLIAMS CONTROLS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF June 30, 2003
AND STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED June 30, 2003
AND FOR THE YEAR ENDED September 30, 2002
(In thousands)
| a) | To record disposition of assets sold, liabilities assumed by buyer, and loss on net assets sold. The net proceeds from the sale were approximately $6,010 after transaction costs of $708 and would have resulted in a loss of $470 at June 30, 2003. |
| b) | To record repayment of outstanding bank debt with proceeds received from transaction and related interest expense effects. |
| c) | To reflect the elimination of net sales and cost of sales of the passenger car and light truck ETC products and estimated other costs associated with these products. The Company has made an estimate of pro forma adjustments of other costs based on what management believes to be reasonable estimates of such costs to be eliminated. |
| d) | Income (loss) per share from continuing operations includes the effect of preferred dividends and other adjustments related to preferred stock. Pro forma income per share from continuing operations include the effect of dilutive securities. |
| e) | The Company has net operating loss carryforwards for tax purposes and has provided a full valuation allowance on the related deferred tax assets. Accordingly, no income taxes have been provided on the pro forma income from continuing operations as such income would be offset by the net operating loss carryforwards |
8
