Williams Controls Reports First Quarter 2003 Results
PORTLAND, Ore., Feb. 13 -- Williams Controls, Inc. (BULLETIN BOARD: WMCO) today reported results for the first fiscal quarter of 2003 ended December 31, 2002. Net sales of $12,112,000 for the first quarter ended December 31, 2002 were 6.1% higher than the net sales of $11,419,000 recorded for the corresponding quarter last year. Net income allocable to common shareholders was $246,000 or $.01 per share (basic and diluted) for the first quarter 2003 compared to a net loss allocable to common shareholders of $906,000 or ($.05) per share for the corresponding 2002 quarter.
The first quarter 2003 sales increase was the direct result of higher unit sales volume in the heavy truck business, offset by lower sales volumes in the automotive business over the sales reported in the first quarter of fiscal 2002. Gross margin in 2003's first quarter improved over the 2002 first quarter by 11% to $2,996,000 from $2,691,000 primarily due to the higher sales volumes to our truck customers. In the first quarter of fiscal 2003 income from continuing operations improved to $673,000 compared to a loss of $171,000 for the same quarter of 2002. The significant increase is primarily due to reductions in operating expenses, specifically reductions in research and development and administrative costs. Research and development expenses decreased due to a decline in research and development spending for the automotive business. Administrative costs declined due to lower operating costs at the Company's Florida production facility resulting from the consolidation of two Florida production facilities into one facility in the second quarter of fiscal 2002. Also in the first quarter of fiscal 2002, we recorded $170,000 related to our Employee Stock Ownership plan, whereas in the first fiscal quarter of 2003, no amount was recorded.
Net income allocable to common shareholders included a charge for dividends and accretion on preferred stock of $649,000, or ($.02) per diluted share, for the first quarter ended December 31, 2002 compared to $241,000, or ($.01) per diluted share, for the corresponding quarter in fiscal 2002. The first quarter of fiscal 2003 included a $300,000, or $.01 per diluted share, income tax benefit from amending a prior year's tax return and the first quarter of fiscal 2002 included a gain of $417,000, or $.02 per diluted share, from discontinued operations from an exchange of an agricultural equipment segment building for debt.
Williams Controls' Board Chairman Gene Goodson stated, "Although the first fiscal quarter of the year is traditionally slow for Williams, we still managed to increase sales over last year, reduce our overhead expenses and significantly improve our profitability over the same quarter last year. The improved results were led by strong sales in our heavy truck market, where we have increased our global market share over last year." He continued, "We have successfully met our customers' delivery schedules and maintained our quality with permanent replacement workers during the UAW strike at our Portland facility, which is in its sixth month." Mr. Goodson concluded, "Financially, we are stronger than we have been in several years and are in a position to respond to our many opportunities. We appreciate the confidence our customers and suppliers have shown us as Williams positions itself for growth."
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 statements involve risks and uncertainties 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, the ability of the Company to successfully identify and implement any strategic alternatives, and an adverse outcome to the strike at the Company's Portland, Oregon location. 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 12/31/02 ended 12/31/01
(unaudited) (unaudited)
Net sales $12,112 $11,419
Cost of sales 9,116 8,728
Gross margin 2,996 2,691
Research and development expense 773 964
Selling expense 346 242
Administration expense 1,204 1,656
Income (loss) from
continuing operations 673 (171)
Interest and other (income)
expenses, net 78 911
Income (loss) from continuing
operations before income taxes 595 (1,082)
Income tax benefit 300 -
Net income (loss) from
continuing operations 895 (1,082)
Gain from exchange of building for
debt of the previously discontinued
agricultural equipment segment - 417
Net income (loss) 895 (665)
Preferred dividends and accretion
for Series B Preferred Stock (649) (241)
Net income (loss) allocable to
common shareholders $246 $(906)
Earnings per share information:
Basic -
Income (loss) per share from
continuing operations $0.01 $(0.07)
Income per share from
discontinued operations - 0.02
Net income (loss) per share
allocable to common shareholders $0.01 $(0.05)
Weighted common shares
outstanding - basic 20,059,835 19,926,022
Diluted -
Income (loss) per share from
continuing operations $0.01 $(0.07)
Income per share from
discontinued operations - 0.02
Net income (loss) per share
allocable to common shareholders $0.01 $(0.05)
Weighted common shares
outstanding - diluted 33,882,562 19,926,022
Williams Controls, Inc.
Consolidated Balance Sheets
(Dollars in thousands)
December 31, 2002 September 30, 2002
(unaudited)
Assets
Current Assets:
Cash and cash equivalents $263 $829
Trade and other accounts
receivable, net 7,197 8,764
Inventories, net 4,907 4,940
Prepaid expenses and
other current assets 789 624
Total current assets 13,156 15,157
Property, plant and equipment, net 10,390 10,530
Other assets, net 272 635
Total assets $23,818 $26,322
Liabilities and Stockholders' Equity (Deficit)
Current Liabilities:
Accounts payable $3,765 $5,326
Accrued expenses 5,678 6,856
Current portion of long-term debt
and capital leases 2,773 4,084
Total current liabilities 12,216 16,266
Long-term debt and capital
lease obligations 1,241 1,483
Employee benefit obligations 7,059 6,293
Subordinated debt 2,139 2,139
Mandatory redeemable Convertible
Series B Preferred Stock, net 13,755 13,109
Shareholders' Equity (Deficit):
Preferred stock (Series A and A-1) 1 1
Common stock 201 199
Additional paid-in capital 23,687 23,559
Accumulated deficit (32,079) (32,325)
Treasury Stock (377) (377)
Other Comprehensive Loss -
Pension liability adjustment (4,025) (4,025)
Total shareholders' equity
(deficit) (12,592) (12,968)
Total liabilities and
shareholders' equity (deficit) $23,818 $26,322