Williams Controls' Q2 Net Earnings up 6% on 7% Sales Increase
7 May 1999
Williams Controls' Second Quarter Net Earnings From Continuing Operations up 6% on 7% Sales Increase
PORTLAND, Ore., May 6 -- Williams Controls, Inc.
today reported net earnings from continuing operations for the
second quarter ended March 31, 1999 of $1.5 million, up 6% compared to net
earnings from continuing operations of $1.4 million for the same period a year
ago. Net earnings increased to $1.5 million for the second quarter ended
March 31, 1999, up 36% compared to $1.1 million in the prior year quarter
which was affected by net losses from discontinued operations of $0.3 million.
Sales for the second quarter were $16.6 million, up 7% from the $15.6 million
reported in the same period of the prior year.
Basic and diluted earnings per share from continuing operations decreased
to $.07 in the quarter ended March 31, 1999 from $.08 in the prior year period
due to higher weighted shares outstanding. Diluted shares outstanding
increased to 21.7 million from 18.5 million in the prior fiscal year primarily
as a result of a convertible preferred stock offering completed in April 1998.
For the six months ended March 31, 1999, net earnings from continuing
operations was $2.5 million, up 12% compared to $2.2 million in the prior six
month period. Net earnings increased to $2.5 million for the six months ended
March 31, 1999, up 41% compared to $1.8 million in the prior year quarter
which was affected by net losses from discontinued operations of $0.5 million.
Basic and diluted earnings per share from continuing operations for the six
months ended March 31, 1999 decreased to $.12 from $.13 in the prior period
due to higher weighted shares outstanding. Sales for the six months ended
March 31, 1999 were $31.6 million, up 12% from the $28.3 million reported in
the same period of the prior year.
The reported earnings for the second quarter reflect an increase in
research and development costs and losses from the Company's plastic injection
molding operations. The Company increased research and development 23% to
$0.9 million in the quarter ended March 31, 1999 primarily for the development
of passenger vehicle and off-road vehicle electronic throttle controls
("ETC"). The Company is working on customer programs to increase sales and
improve profitability at the plastic injection molding operation which moved
to a higher capacity facility in the fourth quarter of fiscal 1998.
"Our vehicle components business continues to perform exceptionally well
with sales up 10 percent in the second quarter over the prior year quarter,"
said Thomas W. Itin, chairman and chief executive officer. "The sales growth
during the quarter stemmed from increased demand from existing customers." He
noted that the second quarter results did not include sales to the company's
newest customer, Peterbilt, which will begin shipping in the fourth quarter.
Mr. Itin pointed out that manufacturers of passenger vehicles are moving
toward installing ETCs, having successfully introduced ETC in several small
production vehicles in 1998. The small truck and automobile manufacturers are
introducing ETC into higher production models and have invited the Company to
present designs and to bid on several models for award this summer. ETCs have
been used in heavy and medium duty trucks for more than a decade, and Williams
Controls has more than 65 percent share of this truck ETC market.
"The passenger vehicle market is a great opportunity for Williams
Controls," Itin said. "We are committed to gaining our fair share of this
emerging business which we anticipate to be substantially larger than our
current market for heavy- and medium-duty trucks in the United States."
Williams Controls is a manufacturer and integrator of sensors, controls
and communications systems for the transportation and communication
industries. For more information, you can find the Company at http://www.wmco.com on
the World Wide Web.
Forward-looking statements in this news release, if any, are made under
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Certain important factors could cause results to differ materially from
those anticipated by the statements, including the impact of changing economic
or business conditions, the impact of competition, the availability of
financing, the success of products in the marketplace, other factors inherent
in the industry and other factors discussed from time to time in reports filed
by the Company with the Securities and Exchange Commission.
Williams Controls, Inc.
Unaudited Consolidated Statements of Operations
(Dollars in thousands, except share and per share information)
Three months Three months Six months Six months
ended 3/31/99 ended 3/31/98 ended 3/31/99 ended 3/31/98
Sales $16,641 $15,613 $31,566 $28,310
Cost of sales 11,780 10,748 22,006 19,573
Gross margin 4,861 4,865 9,560 8,737
Operating expenses 2,173 2,203 4,548 4,072
Earnings from
continuing
operations 2,688 2,662 5,012 4,665
Other expenses, net 291 379 941 1,000
Earnings from continuing
operations before
income tax expense 2,397 2,283 4,071 3,665
Income tax expense 920 890 1,563 1,421
Net earnings from
continuing
operations 1,477 1,393 2,508 2,244
Loss from operations
of discontinued
agricultural equipment
segment - (146) - (302)
Loss from operations
of discontinued
automotive accessories
segment - (160) - (160)
Net earnings 1,477 1,087 2,508 1,782
Dividends on
preferred stock 150 - 300 -
Net earnings available
to common
shareholders $1,327 $1,087 $2,208 $1,782
Basic and diluted
earnings per common
share from continuing
operations $0.07 $0.08 $0.12 $0.13
Basic and diluted loss
per common share
from discontinued
operations - (0.02) - (0.03)
Basic and diluted
net earnings per
common share $0.07 $0.06 $0.12 $0.10
Weighted average shares
used in per share
calculation
- basic 18,327,711 17,874,989 18,288,667 17,845,319
Weighted average shares
used in per share
calculation
- diluted 21,683,999 18,506,530 21,491,682 18,449,473