Williams Controls Reports Third Quarter Results
22 August 2000
Williams Controls Reports Third Quarter Results
PORTLAND, Ore., Aug. 22 Williams Controls, Inc.
announced financial results for the company's fiscal third
quarter ended June 30, 2000. Sales for the third quarter of 2000 reached
$18,022,000, an increase of 14.4% compared to the $15,749,000 reported in the
fiscal third quarter of 1999. For the nine months ended June 30, 2000, sales
increased to $51,495,000, or 11.0%, compared to $46,405,000 in the prior year
period.
The increase in sales was primarily the result of top line improvements at
the company's plastic injection molding subsidiary, Premier Plastic
Technologies, as the impact of business that began to be produced in the
second quarter ramped up to a full quarter's production level. On July 11,
2000, Williams Controls announced that it had signed a definitive agreement
for the merger of Premier into 3DM International, Inc.
The company reported a net loss for the quarter ended June 30, 2000 of
$727,000, or $.04 per diluted share, compared to a net loss of $2,527,000, or
$.14 per diluted share reported in the third quarter of the prior year. The
net loss for the nine months ended June 30, 2000 was $1,458,000, or $.07 per
diluted share, compared to a net loss of $319,000, or $.02 per diluted share
reported in the same period of the prior year. .
Results for the quarter were affected by a general slowdown in the heavy
and medium truck business caused by rising interest rates, higher fuel costs
and the high number of used trucks currently on the market. Increased
research and development expenses of $1,501,000 for the quarter were incurred
for the development of the automotive electronic throttle control (ETC) and
adjustable foot pedal products related to the 1999 acquisition of ProActive
Pedals, and in support of new product development for existing customers and
the development of sensor-related products. Research and development expenses
are expected to decrease in the fourth fiscal quarter and into fiscal 2001, as
the focus shifts to production of automotive pedals and sensor-related
products. Administration expenses increased $452,000 in the current quarter
primarily to support increased plastic molding contracts and the amortization
of intangible assets as a result of the ProActive Pedal acquisition.
Williams Controls chief executive officer Thomas W. Itin stated, "Our
third quarter continued to be affected by the losses at our Premier Plastics
subsidiary and the investments we are making in our business to become a force
in the automotive market for electronic throttle controls and derivative
products. Once the financing is complete, for the merger of Premier into 3DM
International that we announced last month, the sale will be closed and
Premier's future operations will no longer impact the financial results
reported by Williams."
Mr. Itin continued, "We believe that the merger of Premier into 3DM
International will be a good long term strategy for Williams Controls, as
Premier will benefit from 3DM's experienced management, access to capital and
track record in the plastics business, and Williams may benefit from its
ownership position in 3DM International as 3DM develops some revolutionary
patented blow molding process licensing strategies going forward."
Mr. Itin concluded, "We continue to make inroads into the non-
truck/automotive segments of our business as well. Williams has invested a
substantial amount of working capital and management time into our GeoFocus
subsidiary as it has entered the GIS/GPS tracking market, and some initiatives
on which we have been spending heavily over the last couple of years are now
beginning to yield results. We will be announcing those in the near future."
Williams Controls is a designer, manufacturer and integrator of sensors,
controls and communications systems for the transportation and communications
industries. The company designs, develops and manufactures driver control
systems for trucks, buses, passenger vehicles and off-highway vehicles,
utilizing state of the art sensor technology. Major products include
electronic throttle controls and adjustable foot pedal systems as well as a
broad array of exhaust brakes, pneumatic and hydraulic controls and other
components. For more information, you can find the company at http://www.wmco.com on
the World Wide Web.
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; competition,
economic downturns affecting the operations of the company or any of its
business operations, a delay in completion of the financing of the merger of
Premier Plastic Technologies and 3DM International, and the completion and
profitability of future automotive and GIS/GPS contracts. 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.
Unaudited Consolidated Statements of Operations
(Amounts in thousands, except per share amounts)
Three months Three months Nine months Nine months
ended 6/30/00 ended 6/30/99 ended 6/30/00 ended 6/30/99
Net sales $18,022 $15,749 $51,495 $46,405
Cost of sales 14,214 11,366 40,260 32,462
Gross margin 3,808 4,383 11,235 13,943
Operating expenses 4,046 2,520 10,767 7,068
Loss from impairment
of assets --- 5,278 --- 5,278
Earnings (loss) from
continuing
operations (238) (3,415) 468 1,597
Interest and other
expenses 702 445 2,117 1,386
Earnings (loss) from
continuing operations
before income
taxes (940) (3,860) (1,649) 211
Income tax expense
(benefit) (361) (1,482) (633) 81
Net earnings (loss) (579) (2,378) (1,016) 130
Preferred dividends 148 149 442 449
Net earnings (loss)
allocable to common
stockholders (727) (2,527) (1,458) (319)
Earnings (loss) per
share information:
Earnings (loss) per share
from continuing
operations - basic
and diluted $(0.04) $(0.14) $(0.07) $(0.02)
Basic weighted shares
outstanding 18,363 17,875 18,314 17,855