Williams Controls Reports Second Quarter Results
17 May 2000
Williams Controls Reports Second Quarter Results; Considering Possible Sale of Plastics Subsidiary
PORTLAND, Ore., May 16 Williams Controls, Inc.
announced its results for the second fiscal quarter ended
March 31, 2000. The Company also announced that, in connection with its
consideration of strategic alternatives for its plastic injection molding
subsidiary, Premier Plastics Technologies, Inc., a non-binding letter of
intent has been signed to explore a possible sale of Premier's business to a
new company to be formed and jointly owned by Premier and 3DM International,
Inc.
Sales for the second quarter of fiscal 2000 increased 8.2% to
$17.6 million compared to $16.3 million reported in the second quarter of
fiscal 1999 primarily as a result of increased sales at Premier and initial
sales of passenger vehicle electronic throttle control (ETC) products. The
net loss was $271,000, or $.02 per diluted share, for the quarter ended
March 31, 2000 compared to net earnings of $1.5 million, or $.07 per diluted
share, in the prior year quarter. Operating results were primarily affected
by decreased operating earnings of Premier, increased research and development
expenses, and increased administration due to automotive start-up costs. The
research and development expenditures, which are equivalent to $.05 per
diluted share, were primarily directed towards the development of adjustable
foot pedal and ETC's for passenger vehicles.
Gross margin declined $1.2 million, primarily as a result of decreased
margins at Premier, increased management information services costs associated
with implementation of an enterprise resource planning system ("ERP") and
decreased overhead absorption at the company's Portland facility.
Diluted shares were 19.8 million and 21.7 million for the three months
ended March 31, 2000 and 1999, respectively. Diluted shares were 19.8 million
and 21.5 million for the six months ended March 31, 2000 and 1999,
respectively. Diluted shares were lower in fiscal 2000 due to the exclusion
of convertible securities and options because of their anti-dilutive effect.
For the six months ended March 31, 2000, the net loss was $437,000, or
$.04 per diluted share, compared to net earnings of $2.5 million, or $.12 per
diluted share, in the prior six month period. Sales for the six months ended
March 31, 2000 increased $2.8 million, or 9.2%, to $33.5 million compared to
$30.7 million reported in the prior year period primarily as a result of
increased sales at Premier and initial sales of passenger vehicle ETC's.
As part of the proposed transaction to sell Premier, Premier would sell
substantially all of its assets, subject to certain stated liabilities, to the
new company, and would hold a minority interest in the new company. In
addition to the letter of intent, Premier has entered into an interim
operating agreement with an affiliate of 3DM International, Rapid Product
Technologies, Inc., under which Rapid will assume immediate responsibility for
the day-to-day operations of Premier and begin implementing a turnaround plan
for Premier's business.
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 3/31/00 ended 3/31/99 ended 3/31/00 ended 3/31/99
Sales $17,596 $16,257 $33,473 $30,656
Cost of sales 13,915 11,396 26,046 21,411
Gross margin 3,681 4,861 7,427 9,245
Operating
expenses 3,477 2,173 6,721 4,233
Earnings from
continuing
operations 204 2,688 706 5,012
Other expenses, net 644 291 1,415 941
Earnings (loss) before
income tax expense
(benefit) (440) 2,397 (709) 4,071
Income tax expense
(benefit) (169) 920 (272) 1,563
Net earnings (loss) (271) 1,477 (437) 2,508
Dividends on preferred
stock 147 150 294 300
Net earnings (loss)
allocable to common
shareholders $(418) $1,327 $(731) $2,208
Basic and diluted
earnings (loss) per
common share $(0.02) $0.07 $(0.04) $0.12
Weighted average shares
used in per share calculation
- basic 19,786,742 18,327,711 19,782,585 18,288,667
Weighted average shares
used in per share calculation
- diluted 19,786,742 21,683,999 19,782,585 21,491,682