Exhibit 99.1
WILLIAMS CONTROLS REPORTS FIRST QUARTER 2005 RESULTS
PORTLAND, Ore., Feb. 2 /PRNewswire-FirstCall/ -- Williams Controls, Inc.
(the "Company") (OTC: WMCO) today announced its results for the 2005 first
quarter ended December 31, 2004. Net sales of $15,169,000 were 21.0% higher than
the net sales of $12,538,000 in the corresponding quarter last year. The Company
reported net income of $1,714,000, or $.04 per diluted share, for the first
quarter 2005, compared to net income of $1,090,000, or $.02 per diluted share,
for the corresponding 2004 quarter.
The increase in sales was driven by increased sales volumes of electronic
throttle control systems resulting from a general increase in truck production
in our North American and European markets. Operating income from continuing
operations improved to $2,792,000, an increase of 34.3%, compared to $2,079,000
for the same quarter of 2004. Gross profit in the first fiscal quarter improved
to $5,121,000 compared to $3,842,000 in the first quarter of fiscal 2004. This
gross profit improvement is primarily due to the higher sales volumes to our
heavy truck and industrial customers and to a lesser degree, reductions in
overhead expenses. Operating expenses increased $566,000 due to increased
research and development spending to support a larger number of new product
development efforts, an increase in legal fees, and increased staffing levels to
support growth initiatives.
The incurrence of new bank debt on September 30, 2004 to complete our 2004
recapitalization resulted in interest expense on debt increasing from $21,000
for the first quarter of fiscal 2004 to $462,000 for the first quarter of fiscal
2005. Immediately prior to the recapitalization, the Company had minimal bank
debt. In the first quarter of fiscal 2004, the Company recorded $769,000 of
interest expense related to dividends and accretion on the Series B Preferred
Stock. Part of the 2004 recapitalization transaction included the elimination of
all outstanding Series B Preferred Stock and the associated dividends. Other
income reported in fiscal 2005 first quarter primarily relates to a gain of
$355,000 for the quarterly revaluation of the Put and Call Option agreement
between the Company and American Industrial Partners, which was entered into as
part of the fiscal 2004 recapitalization transaction on September 30, 2004.
Tax expense of $989,000 was recorded during the first quarter of fiscal 2005
at an effective rate of 36.6%. Prior to the first quarter of fiscal 2005, the
Company had provided for a full valuation allowance on its deferred tax assets,
resulting in no tax provision related to the income in the first quarter of
fiscal 2004. The Company reduced the valuation allowance during the fourth
quarter of fiscal 2004.
Williams Controls' Chief Executive Officer, Patrick W. Cavanagh stated, "The
truck and industrial markets continued to improve in North America, Europe and
Asia, which fueled our improved earnings for the quarter." He concluded,
"Although our operating expenses have increased over the prior year's first
quarter, we believe that this increased spending will position us for growth
opportunities worldwide."
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 months Three months
ended ended
12/31/04 12/31/03
------------- -------------
(unaudited) (unaudited)
Net sales $ 15,169 $ 12,538
Cost of sales 10,048 8,696
Gross profit 5,121 3,842
Research and development expense 730 610
Selling expense 316 274
Administration expense 1,283 879
Operating income from continuing operations 2,792 2,079
Interest expense - Debt 462 21
Interest expense - Series B Preferred Stock
dividends and accretion -- 769
Other income, net (373) (5)
Income from continuing operations before
income taxes 2,703 1,294
Income tax expense 989 40
Net income from continuing operations 1,714 1,254
Loss from discontinued operations -- 164
Net income $ 1,714 $ 1,090
Earnings per share information:
Basic -
Income per share from continuing operations $ 0.04 $ 0.02
Loss per share from discontinued operations -- (0.00)
Net income per common share $ 0.04 $ 0.02
Weighted average shares used in per share
calculation - basic 46,629,411 54,145,821
Diluted -
Income per share from continuing operations $ 0.04 $ 0.02
Loss per share from discontinued operations -- (0.00)
Net income per common share $ 0.04 $ 0.02
Weighted average shares used in per
share calculation - diluted 47,338,915 54,147,843
Williams Controls, Inc.
Consolidated Balance Sheets
(Dollars in thousands)
December 31, September 30,
2004 2004
------------- -------------
(unaudited) (unaudited)
Current Assets:
Cash and cash equivalents $ 3,995 $ 2,482
Trade accounts receivable, net 7,081 8,193
Other receivables 461 424
Inventories 3,502 3,777
Deferred income taxes 2,116 2,116
Prepaid expenses and other current assets 690 290
Total current assets 17,845 17,282
Property, plant and equipment, net 6,054 5,402
Deferred income taxes 6,300 7,247
Other assets, net 1,181 1,194
Total assets $ 31,380 $ 31,125
Liabilities and Stockholders' Deficit
Current Liabilities:
Accounts payable $ 3,775 $ 4,084
Accrued expenses 4,437 4,969
Current portion of employee benefit obligations 1,638 1,240
Current portion of long-term debt and
capital leases 3,455 3,454
Total current liabilities 13,305 13,747
Long-term debt and capital lease obligations 16,066 16,640
Employee benefit obligations 7,330 7,440
Other long-term liabilities -- 333
Stockholders' Deficit:
Preferred stock (Series C) -- --
Common stock 466 466
Additional paid-in capital 35,960 35,960
Accumulated deficit (35,744) (37,458)
Treasury stock (377) (377)
Other comprehensive loss -
Pension liability adjustment (5,626) (5,626)
Total stockholders' deficit (5,321) (7,035)
Total liabilities and stockholders'
deficit $ 31,380 $ 31,125
SOURCE Williams Controls, Inc.
-0- 02/02/2005
/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)