Exhibit 99.1
WILLIAMS CONTROLS REPORTS FISCAL YEAR END 2004 RESULTS
PORTLAND, Ore., Dec. 20 /PRNewswire-FirstCall/ -- Williams Controls, Inc.
(the "Company") (OTC: WMCO) today announced its results for the fourth quarter
and full year ended September 30, 2004.
Net sales for the quarter of $15,908,000 were 14.6% higher than the net
sales of $13,886,000 recorded for the corresponding quarter last year. Net
sales for the year ended September 30, 2004 increased $6,748,000, or 13.2%, to
$58,050,000 from $51,302,000 for the comparable period in fiscal 2003.
The Company reported a net loss of $9,754,000, or ($0.42) per diluted
share, for the fourth quarter of fiscal 2004, compared to a net loss of
$908,000, or ($0.05) per diluted share for the corresponding quarter in 2003.
For the year ended September 30, 2004, net loss allocable to common
shareholders was $6,030,000, or ($0.28) per diluted share, compared to a net
loss allocable to common shareholders of $1,075,000, or ($0.05) per diluted
share, for the year ended September 30, 2003. Included in the fiscal 2004
fourth quarter and full year results are a charge of $19,770,000 for loss on
extinguishment of debt related to the elimination of all outstanding Series B
preferred stock and accrued dividends and an income tax benefit of $7,293,000
relating to reversal of the valuation allowance on certain deferred tax
assets.
On September 30, 2004 the Company completed a capital restructuring, which
resulted in the redemption of 98,114 shares of Series B preferred stock for
$26,436,000; the conversion of the remaining 55,436 shares of Series B
preferred stock into 11,761,495 shares of common stock; and the conversion of
the 77,550 of Series A-1 preferred stock into 11,848,740 shares of common
stock.
The fourth quarter sales increase was driven by higher unit sales volumes
for heavy truck and transit busses. Sales from these product lines increased
$3,323,000, or 26.4%. This increase was partially offset by reduced sales of
$1,301,000 due to the sale of the passenger car and light truck product lines
on September 30, 2003.
Operating income from continuing operations in the fourth quarter of 2004
improved to $2,885,000, compared to $39,000 for the same quarter of 2003.
Elimination of the negative gross margins from the passenger car and light
truck product lines and higher truck sales volumes were the primary factors
creating the improvement. Overall, research and development, selling and
administration expenses were lower in the 2004 fourth quarter due to the sale
of the passenger car and light truck product lines; however the same costs for
heavy truck and transit bus were $266,000 higher primarily due to increased
product and customer development efforts and the recording of a $700,000
environmental accrual related to the Company's Portland, Oregon facility.
Net sales for the year ended September 30, 2004 increased due to higher
unit sales volumes for the heavy truck and transit bus product lines. Sales
for these product lines increased $11,356,000, or 24.3%, compared to the same
period in fiscal 2003. This increase was partially offset by the absence of
$4,608,000 of sales related to the passenger car and light truck product
lines.
Operating income from continuing operations for the year ended September
30, 2004 improved to $9,718,000, compared to $1,786,000 for the prior year.
Gross margins improved to $18,816,000 in fiscal 2004 due to elimination of the
negative gross margins from the passenger car and light truck product lines,
higher heavy truck sales volumes and lower warranty expense. Fiscal 2003
operating income included a gain of $951,000 related to a settlement with a
former passenger car and light truck customer. Research and development,
selling and administration expenses for the full year 2004 were higher for
heavy truck and transit bus primarily due to increased product and customer
development efforts and the recording of a $950,000 environmental accrual
related to the Company's Portland, Oregon facility; however, overall these
expenses were lower than the comparable period in fiscal 2003 due to the sale
of the passenger car and light truck product lines.
Williams Controls' Chief Executive Officer, Patrick W. Cavanagh stated,
"excluding the costs of the recapitalization completed on September 30, 2004,
we had positive earnings for the fourth quarter." He continued, "our core
heavy truck markets continued to strengthen in the fourth quarter, following a
pattern established earlier in the year. This market recovery, combined with
the sale at the end of fiscal 2003 of our passenger car and light truck
product lines, have been the primary factors driving our earnings growth." He
concluded "our earnings improvement, combined with the completion of our
recapitalization, positions the Company well to take advantages of future
growth opportunities."
ABOUT WILLIAMS CONTROLS
Williams Controls is a designer, manufacturer and integrator of sensors
and controls for the motor vehicle industry. For more information, please
visit the Company's website 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 Twelve Twelve
months months months months
ended ended ended ended
9/30/04 9/30/03 9/30/04 9/30/03
------------- ------------- ------------- -------------
(unaudited) (unaudited) (unaudited) (unaudited)
Net sales $ 15,908 $ 13,886 $ 58,050 $ 51,302
Cost of sales 10,424 11,015 39,234 40,326
Gross margin 5,484 2,871 18,816 10,976
Research and development
expense 806 849 3,042 3,575
Selling expense 291 374 1,192 1,367
Administration expense 1,502 1,609 4,864 5,199
Gain on settlement with
customer -- -- -- (951)
Operating income from
continuing operations 2,885 39 9,718 1,786
Interest expense - Series
B Preferred Stock dividends
and accretion 863 731 3,245 731
Interest and other (income)
expenses, net (453) 73 (152) 316
Loss on extinguishment of
debt 19,770 -- 19,770 --
Income (loss) from continuing
operations before income
taxes (17,295) (765) (13,145) 739
Income tax benefit (7,430) (5) (7,293) (305)
Net income (loss) from
continuing operations (9,865) (760) (5,852) 1,044
Discontinued operations (111) 148 178 108
Net income (loss) (9,754) (908) (6,030) 936
Preferred dividends and
accretion for Series B
Preferred Stock -- -- -- (2,011)
Net loss allocable
to common shareholders $ (9,754) $ (908) $ (6,030) $ (1,075)
Earnings per share information:
Loss per common share from
continuing operations
- basic $ (0.42) $ (0.04) $ (0.27) $ (0.05)
Loss per common share from
discontinued operations
- - basic (0.00) (0.01) (0.01) (0.00)
Net loss per common
share - basic $ (0.42) $ (0.05) $ (0.28) $ (0.05)
Weighted common shares
outstanding - basic 23,275,809 20,125,492 21,867,137 20,104,986
Loss per common share from
continuing operations
- diluted $ (0.42) $ (0.04) $ (0.27) $ (0.05)
Loss per common share from
discontinued operations
- diluted (0.00) (0.01) (0.01) (0.00)
Net loss per common share
- diluted $ (0.42) $ (0.05) $ (0.28) $ (0.05)
Weighted common shares
outstanding - diluted 23,275,809 20,125,492 21,867,137 20,104,986
Williams Controls, Inc.
Consolidated Balance Sheets
(Dollars in thousands)
September 30, September 30,
2004 2003
------------- -------------
(unaudited) (unaudited)
Assets
Current Assets:
Cash and cash equivalents $ 2,482 $ 101
Trade accounts receivable, net 8,193 7,015
Other accounts receivable 424 7,185
Inventories 3,777 4,053
Deferred income taxes 2,116 --
Prepaid expenses and other current assets 290 330
Total current assets 17,282 18,684
Property, plant and equipment, net 5,402 5,647
Deferred income taxes 7,247 --
Other assets, net 1,194 576
Total assets $ 31,125 $ 24,907
Liabilities and Shareholders' Deficit
Current Liabilities:
Accounts payable $ 4,084 $ 4,027
Accrued expenses 4,969 6,698
Current portion of employee benefit obligations 1,240 2,098
Current portion of long-term debt and capital
leases 3,454 4,658
Total current liabilities 13,747 17,481
Long-term Liabilities:
Long-term debt and capital lease obligations 16,640 402
Employee benefit obligations 7,440 8,095
Other long-term liabilities 333 --
Mandatory redeemable Convertible Series B
Preferred Stock, net -- 16,072
Shareholders' Deficit:
Preferred stock (Series A and A-1) -- 1
Common stock 466 201
Additional paid-in capital 35,960 22,224
Accumulated deficit (39,430) (33,400)
Treasury stock (377) (377)
Other Comprehensive Loss - Pension liability
adjustment (3,654) (5,792)
Total shareholders' deficit (7,035) (17,143)
Total liabilities and shareholders' deficit $ 31,125 $ 24,907
SOURCE Williams Controls, Inc.
-0- 12/20/2004
/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 /