Exhibit 99.1
Williams Controls Reports Second Quarter 2004 Results
PORTLAND, Ore., May 3 /PRNewswire-FirstCall/ -- Williams Controls, Inc.
(OTC Bulletin Board: WMCO) today announced results for its 2004 second quarter
ended March 31, 2004. Net sales of $14,477,000 were 10.9% higher than the net
sales of $13,054,000 recorded for the corresponding quarter last year. Net
sales for the six months ended March 31, 2004 increased $1,980,000 or 7.9% to
$27,015,000 from $25,035,000 for the comparable period in fiscal 2003. Net
income allocable to common shareholders was $1,412,000 or $.04 per diluted
share for the second quarter of fiscal 2004 compared to a net loss of $37,000
or $.00 per diluted share for the corresponding 2003 quarter. For the six
months ended March 31, 2004, net income allocable to common shareholders was
$2,502,000 or $.07 per diluted share compared to net income of $209,000 or
$.01 per diluted share for the six months ended March 31, 2003.
The $1,423,000 sales increase for the second quarter was driven by higher
unit sales volumes in our heavy truck business resulting in an increase of
$2,688,000, or 22.8% in sales from those product lines. This increase was
partially offset by reduced sales of $1,265,000 due to the sale of the
passenger car and light truck product lines on September 30, 2003.
Second Quarter 2004 operating income from continuing operations improved
to $2,358,000 compared to $642,000 for the same quarter of 2003 due to
elimination of the negative gross margins from the passenger car and light
truck product lines, improved gross margins from the higher truck sales
volumes, and an overall reduction in operating expenses. Operating income in
the second quarter of fiscal 2003 included a $951,000 gain on a settlement
with a prior automotive customer. Additionally the gross margin component of
operating income in fiscal 2003 was negatively impacted by a $985,000 charge
for higher than normal warranty claims with one heavy truck customer.
Research and development, selling and administration expenses were all reduced
in the second quarter of fiscal 2004 compared to the second quarter of 2003
due to the sale of the passenger car and light truck product lines.
Offsetting part of the decrease in research and development spending was an
increase of $155,000 for our heavy truck and transit bus product lines.
Sales for the six months ended March 31, 2004 also increased due to higher
unit sales volume in our heavy truck business. Sales for those product lines
increased $4,008,000 or 17.4% compared to the same period in fiscal 2003.
This increase was partially offset by the elimination of $2,028,000 of sales
related to the passenger car and light truck product lines.
Gross margins improved 57.7% to $8,303,000 in the first six months due to
the higher heavy truck sales volumes and elimination of the negative gross
margins from the passenger car and light truck product lines. Additionally,
six month 2003 gross margins were negatively impacted by a $985,000 charge for
higher than normal warranty claims with one heavy truck customer. Research
and development, selling and administration expenses were all reduced in the
first six months of fiscal 2004 compared to the prior year due to the sale of
the passenger car and light truck product lines. Research and development
spending for our heavy truck and transit bus product lines increased $347,000,
while legal, accounting and professional fees declined $220,000 for the six
months ended March 31, 2004. The first six months of fiscal 2003 also
included a gain of $951,000 from a settlement with a prior automotive
customer. Overall, operating income from continuing operations for the first
six months of 2004 improved to $4,437,000 compared to $1,364,000 for the same
period in 2003.
Williams Controls' Board Chairman Gene Goodson stated, "At this time, we
have several positive factors operating for us. The North American heavy truck
market continues to improve, the union strike that distracted us through
fiscal 2003 is behind us and we sold our passenger car and light truck ETC
product lines, which was a cash drain and has allowed us to focus on our core
business." He continued, "We also have been able to strengthen our balance
sheet by using the proceeds from the sale of the passenger car and light truck
product lines to pay down most of our long-term and revolver debt and build
cash." He concluded, "This combination of improving market conditions, a
stronger balance sheet and improved operating results will give us greater
flexibility to address opportunities as they arise."
ABOUT WILLIAMS CONTROLS
Williams Controls is a designer, manufacturer and integrator of sensors
and controls for the motor vehicle industry. For more information, you can
find Williams Controls on the Internet at www.wmco.com.
The statements included in this news release concerning predictions of
economic performance and management's plans and objectives constitute
forward-looking statements made pursuant to the safe harbor provisions of
Section 21E of the Securities Exchange Act of 1934, as amended, and Section
27A of the Securities Act of 1934, as amended. These forward-looking
statements are based on management's assumptions and projections, and are
sometimes identifiable by use of the words, "expect to," "plan," "will,"
"believe" and words of similar predictive nature. Because management's
assumptions and projections are based on anticipation of future events, you
should not place undue emphasis on forward-looking statements. You should
anticipate that our actual performance may vary from these projections, and
variations may be material and adverse. You should not rely on
forward-looking statements in evaluating an investment or prospective
investment in our stock, and when reading these statements you should consider
the uncertainties and risks that could cause actual results to differ
materially from the forward-looking statements. Factors which could cause or
contribute to such differences include, but are not limited to, factors
detailed in the Securities and Exchange Commission filings of the Company;
economic downturns affecting the operations of the Company or any of its
business operations, competition, and the ability of the Company to
successfully identify and implement any strategic alternatives. The
forward-looking statements contained in this press release speak only as of
the date hereof and the Company disclaims any intent or obligation to update
these forward-looking statements.
Williams Controls, Inc.
Consolidated Statements of Operations
(Dollars in thousands, except share and per share amounts)
Three Three Six Six
months months months months
ended ended ended ended
3/31/04 3/31/03 3/31/04 3/31/03
(unaudited) (unaudited) (unaudited)(unaudited)
Net sales $14,477 $13,054 $27,015 $25,035
Cost of sales 10,016 10,792 18,712 19,770
Gross margin 4,461 2,262 8,303 5,265
Research and development
expense 768 978 1,378 1,751
Selling expense 288 335 562 663
Administration expense 1,047 1,258 1,926 2,438
Gain on settlement with
customer -- (951) -- (951)
Operating income from
continuing operations 2,358 642 4,437 1,364
Interest income (1) (21) (1) (21)
Interest expense - Series B
Preferred Stock dividends
and accretion 791 -- 1,560 --
Interest expense - Debt 18 158 39 327
Other (income) expense, net -- (50) (5) (141)
Income from continuing
operations before income
taxes 1,550 555 2,844 1,199
Income tax expense (benefit) 54 -- 94 (300)
Net income from continuing
operations 1,496 555 2,750 1,499
Discontinued Operations 84 (70) 248 (21)
Net income 1,412 625 2,502 1,520
Preferred dividends and
accretion of Series B
Preferred Stock -- (662) -- (1,311)
Net income (loss) allocable
to common shareholders $1,412 $(37) $2,502 $209
Earnings per share information:
Income (loss) per common share
from continuing operations
- basic $0.07 $0.00 $0.13 $0.01
Income (loss) per common share
from discontinued operations
- basic 0.00 0.00 (0.01) 0.00
Net income (loss) per common
share - basic $0.07 $0.00 $0.12 $0.01
Weighted average common
shares outstanding
- basic 21,051,728 20,125,492 20,586,079 20,091,942
Income (loss) per common
share from continuing
operations - diluted $0.04 $0.00 $0.08 $0.01
Income (loss) per common
share from discontinued
operations - diluted 0.00 0.00 (0.01) 0.00
Net income (loss) per
common share - diluted $0.04 $0.00 $0.07 $0.01
Weighted average common
shares outstanding
- diluted 56,039,412 20,125,492 55,059,478 33,914,669
Williams Controls, Inc.
Consolidated Balance Sheets
(Dollars in thousands)
March 31, Sept. 30,
2004 2003
(unaudited) (unaudited)
Assets
Current Assets:
Cash and cash equivalents $4,425 $101
Trade accounts receivable, net 8,039 7,015
Other receivables 419 7,185
Inventories, net 3,969 4,053
Prepaid expenses and other current assets 561 330
Total current assets 17,413 18,684
Property, plant and equipment, net 5,307 5,647
Other assets, net 559 576
Total assets $23,279 $24,907
Liabilities and Stockholders' Deficit
Current Liabilities:
Accounts payable $4,387 $4,027
Accrued expenses 5,946 8,796
Current portion of long-term debt and
capital leases 331 4,658
Total current liabilities 10,664 17,481
Long-term debt and capital lease obligations 234 402
Employee benefit obligations 7,313 8,095
Mandatory redeemable Convertible Series B
Preferred Stock, net 17,632 16,072
Shareholders' Deficit:
Preferred stock (Series A and A-1) 1 1
Common stock 230 201
Additional paid-in capital 24,434 22,224
Accumulated deficit (30,898) (33,400)
Treasury Stock (377) (377)
Other Comprehensive Loss - Pension
liability adjustment (5,792) (5,792)
Shareholder note receivable (162) --
Total shareholders' deficit (12,564) (17,143)
Total liabilities and shareholders'
deficit $23,279 $24,907
SOURCE Williams Controls, Inc.
-0- 05/03/2004
/CONTACT: Dennis E. Bunday, Executive Vice President and Chief Financial
Officer of Williams Controls, Inc., +1-503-684-8600/
/Web site: http://www.wmco.com /
(WMCO)
CO: Williams Controls, Inc.
ST: Oregon
IN: AUT CPR OTC
SU: ERN