Williams Controls Reports First Quarter Results
PORTLAND, Ore., March 28 Williams Controls, Inc.
today announced its results for the first quarter of fiscal
2001 ended December 31, 2000. The first quarter results were delayed while
the Company assessed the impact of several asset realization issues related to
the Company's Premier Plastic Technologies (PPT) subsidiary, which as
indicated below, is in the process of being closed.
Sales for the first quarter decreased 6% to $14,979,000 compared to
$15,877,000 reported in the first quarter of fiscal 2000. The reduced sales
were generally across all of the Company's major product lines and were caused
primarily by the overall reductions in sales volumes in the automotive and
heavy truck industries.
The net loss was $4,641,000 or $.23 per diluted share in the quarter ended
December 31, 2000, compared to a net loss of $1,459,000 or $.07 per diluted
share during the comparable period one year ago. The financial statements for
the fiscal quarter ended December 31, 1999 have been restated to reflect the
application, in the fourth quarter of fiscal 2000, of the provisions of the
Financial Accounting Standards Board Emerging Issues Task Force 99-10 relating
to the Company's investment in the Company's affiliate, Ajay Sports, Inc. As
a result of applying EITF 99-10, the Company recorded an additional $1,146,000
equity interest in loss of affiliate for the quarter ended December 31, 1999.
The net loss for the current quarter includes $2,600,000, or $.13 per diluted
share, of expenses for an estimated impairment loss and reserves related to
the assets of PPT. In addition to this amount, PPT recognized additional
ongoing losses of $1,115,000, or $.06 per diluted share. The decision was
made in February 2001 to permanently close the operations of PPT, and the
management of PPT is currently in the process of winding up the affairs of
PPT.
Excluding the impact of the PPT operations, the Company's Net Loss
Allocable to Common Shareholders was $926,000, or $.04 per diluted share.
Gross margins declined from the prior year on the lower sales levels and lower
sales margins due to reduced volumes in the higher margin Electronic Throttle
Control and electronic components markets. Excluding the impact of the PPT's
increased reserves, Operating Expenses were lower in the fiscal 2001 quarter
as the Company made reductions in this area in response to the slowing markets
and the Company's cash constraints.
The Company remained out of compliance with the covenants of its credit
agreement at December 31, 2000. In February 2001, the Company obtained
additional debt financing from a group of lenders and obtained a forbearance
agreement from its secured lender to assist the Company in pursuing a sale of
the Company or its individual operating subsidiaries. The forbearance
agreement continues through the original term of the loan, which expires on
July 11, 2001. The company announced the sale plans in a February 22, 2001
press release.
Williams Controls President and CEO Thomas K. Ziegler stated, "While we
are not pleased with the losses, most of the losses came from the impact of
Premier Plastic Technologies, and overall we believe the Company responded
well to the industry wide slowdown in the heavy truck and automotive markets.
Compared with last year's first quarter, we have made significant reductions
in our operating expenses, which helped to offset much of the margin erosion
from the reduced sales volumes."
Mr. Ziegler concluded, "We are continuing to pursue the sale plans
announced in our mid-February press release. Although we are early in the
sale process, we anticipate, after identifying a party committed to the
transaction, that we will conclude a sale or sales as rapidly as is prudently
reasonable to do so."
Williams Controls, Inc.
Unaudited Condensed Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
Three Months Three Months
Ended 12/31/00 Ended 12/31/99
(as restated)
Sales $14,979 $15,877
Cost of sales 12,624 11,386
Gross margin 2,355 4,491
Research and development 945 1,697
Selling 428 440
Administration 2,415 1,852
Loss on impairment of assets 1,996 -
Total operating expenses 5,784 3,989
Earnings (loss) from operations (3,429) 502
Other expenses 1,065 1,917
Earnings (loss) before income taxes (4,494) (1,415)
Income tax expense (benefit) - (103)
Net earnings (loss) (4,494) (1,312)
Dividends on preferred stock 147 147
Net earnings (loss) allocable
to common shareholders $(4,641) $(1,459)
Net earnings (loss) per
common share - basic $(.23) $(.07)
Net earnings (loss) per
common share - diluted $(.23) $(.07)
Weighted avg. shares used in
per share calculation - basic 19,790,914 19,776,843
Weighted avg. shares used in
per share calculation - diluted 19,790,914 19,776,843
