Williams Controls Reports Third Quarter 2004 Results
PORTLAND, Ore., Aug. 16, 2004 -- Williams Controls, Inc. today announced results for its 2004 third quarter ended June 30, 2004. Net sales of $15,127,000 were 22.2% higher than the net sales of $12,381,000 recorded for the corresponding quarter last year. Net sales for the nine months ended June 30, 2004 increased $4,726,000, or 12.6%, to $42,142,000 from $37,416,000 for the comparable period in fiscal 2003. Net income was $1,472,000, or $.04 per diluted share, for the third quarter of fiscal 2004, compared to a net loss allocable to common shareholders of $373,000, or ($.02) per diluted share, for the corresponding quarter in 2003. For the nine months ended June 30, 2004, net income was $3,724,000, or $.11 per diluted share, compared to a net loss allocable to common shareholders of $164,000, or ($.01) per diluted share, for the nine months ended June 30, 2003.
The $2,746,000 sales increase for the third quarter was driven by higher unit sales volumes for heavy truck and transit bus resulting in an increase of $4,026,000, or 36.3%, in sales from these product lines. This increase was partially offset by reduced sales of $1,280,000 due to the sale of the passenger car and light truck product lines on September 30, 2003.
Operating income from continuing operations in the third quarter of 2004 improved to $2,646,000, compared to $383,000 for the same quarter of 2003, due to elimination of the negative gross margins from the passenger car and light truck product lines, higher truck sales volumes and an overall reduction in operating expenses. Research and development, selling and administration expenses were higher for heavy truck and transit bus primarily due to increased product and customer development efforts; however, these expenses in total were lower in the third quarter of fiscal 2004, compared to the third quarter of 2003, due to the sale of the passenger car and light truck product lines.
Sales for the nine months ended June 30, 2004 also increased due to higher unit sales volume for the heavy truck and transit bus product lines. Sales for these product lines increased $4,726,000, or 12.6%, compared to the same period in fiscal 2003. This increase was partially offset by the elimination of $3,307,000 of sales related to the passenger car and light truck product lines.
Operating income from continuing operations for the nine months ending June 30, 2004 improved to $6,833,000, compared to $1,747,000 for the corresponding nine months of 2003. Gross margins improved 64.5% to $13,332,000 in the first nine months of 2004, due to higher heavy truck sales volumes and elimination of the negative gross margins from the passenger car and light truck product lines. Additionally, gross margins for the first nine months of 2003 were adversely impacted by a $985,000 charge for higher than normal warranty claims with one heavy truck customer. For the first nine months of fiscal 2004, research and development, selling and administration expenses were higher for heavy truck and transit bus primarily due to increased product and customer development efforts; however, the total of these expenses were lower than the comparable nine months of 2003 due to the sale of the passenger car and light truck product lines. Additionally, the first nine months of fiscal 2003 included a gain of $951,000 from a settlement with a prior automotive customer, which improved fiscal 2003 operating income.
Williams Controls' Board Chairman Gene Goodson stated, "This is the third consecutive quarter of continuing improvement in earnings following the sale of our passenger car and light truck product lines." He continued, "additionally we are also benefiting from the continuing improvement in our core heavy truck market." He concluded, "currently Williams is well positioned with the improved truck markets, improved balance sheet and the recently announced naming of Patrick Cavanagh as our new President and Chief Executive Officer."
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.
Williams Controls, Inc.
Consolidated Statements of Operations
(Dollars in thousands, except share and per share amounts)
Three Three Nine Nine
months months months months
ended ended ended ended
6/30/04 6/30/03 6/30/04 6/30/03
(unaudited) (unaudited) (unaudited) (unaudited)
Net sales $15,127 $12,381 $42,142 $37,416
Cost of sales 10,098 9,541 28,810 29,311
Gross margin 5,029 2,840 13,332 8,105
Research and
development expense 858 974 2,236 2,725
Selling expense 339 330 901 993
Administration expense 1,186 1,153 3,362 3,591
Gain on settlement
with customer -- -- -- (951)
Operating income from
continuing operations 2,646 383 6,833 1,747
Interest income (1) (2) (2) (23)
Interest expense -
Series B Preferred
Stock dividends and
accretion 822 -- 2,382 --
Interest expense - Debt 17 99 56 426
Other (income) expense,
net 253 (19) 248 (160)
Income from continuing
operations before
income taxes 1,555 305 4,149 1,504
Income tax expense
(benefit) 42 - 136 (300)
Net income from
continuing operations 1,513 305 4,013 1,804
Discontinued Operations
- Loss (income) 41 (19) 289 (40)
Net income 1,472 324 3,724 1,844
Preferred dividends
and accretion of
Series B Preferred
Stock -- (697) -- (2,008)
Net income (loss)
allocable to common
shareholders $1,472 $(373) $3,724 $(164)
Earnings per share information:
Income (loss) per
common share from
continuing operations
- basic $0.04 $(0.02) $0.12 $(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 $0.04 $(0.02) $0.11 $(0.01)
Weighted average
shares used in per
share calculation
- basic 34,769,175 20,125,492 33,144,151 20,103,125
Income (loss) per
common share from
continuing operations
- diluted $0.04 $(0.02) $0.11 $(0.01)
Income (loss) per
common share from
discontinued operations
- diluted 0.00 0.00 0.00 0.00
Net income (loss)
per common share
- diluted $0.04 $(0.02) $0.11 $(0.01)
Weighted average
shares used in per
share calculation
- diluted 59,048,884 20,125,492 56,365,989 20,103,125
Williams Controls, Inc.
Consolidated Balance Sheets
(Dollars in thousands)
June 30, September 30,
2004 2003
(unaudited) (unaudited)
Assets
Current Assets:
Cash and cash equivalents $6,049 $101
Trade accounts receivable, net 8,630 7,015
Other receivables 491 7,185
Inventories, net 3,814 4,053
Prepaid expenses and other current assets 546 330
Total current assets 19,530 18,684
Property, plant and equipment, net 5,361 5,647
Other assets, net 551 576
Total assets $25,442 $24,907
Liabilities and Shareholders' Deficit
Current Liabilities:
Accounts payable $3,755 $4,027
Accrued expenses 3,938 6,698
Current portion of employee
benefit obligations 2,949 2,098
Current portion of long-term debt
and capital leases 332 4,658
Total current liabilities 10,974 17,481
Long-term debt and capital lease obligations 151 402
Employee benefit obligations 7,043 8,095
Mandatory redeemable Convertible Series B
Preferred Stock, net 18,454 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 (29,676) (33,400)
Treasury Stock (377) (377)
Other comprehensive loss -
Pension liability adjustment (5,792) (5,792)
Total shareholders' deficit (11,180) (17,143)
Total liabilities and
shareholders' deficit $25,442 $24,907