Williams Controls Reports Fiscal Year End Results
18 January 2001
Williams Controls Reports Fiscal Year End Results; Moves Forward With Pursuit of Strategic Alternatives
PORTLAND, Ore., Jan. 17 Williams Controls, Inc.
reported its results for the fourth quarter and full year ended
September 30, 2000, and reiterated its plan to pursue strategic alternatives
for the company, including the possible sale of the company or its operating
units.
Sales increased 10.3% to $67.8 million, compared to $61.4 million in the
prior year. The Company reported a net loss for the fiscal year ended
September 30, 2000 of $16.7 million or $0.88 per share, compared to a net loss
of $9.5 million or $0.54 per share in the prior year. The Company reported a
loss from continuing operations of $16.7 million or $0.88 per share for the
2000 fiscal year, compared to a loss from continuing operations of $3.9
million or $0.24 per share for the year ended September 30, 2000. The Company
reported a net loss for the fourth quarter ended September 30, 2000 of $13.3
million or $0.68 per share, compared to a net loss of $9.7 million or $0.51
per share in the prior year quarter.
The loss from continuing operations for the year 2000 included expenses of
$5.0 million for the recognition of Equity Loss in Interest of Affiliate,
related to the company's interest in Ajay Sports, Inc., an increase of $4.6
million over 1999. In addition, the net loss includes $7.5 million of expense
for income taxes resulting primarily from the provision of a 100% valuation
allowance for previously recognized deferred income tax assets, including net
operating loss carryforwards. These non-cash charges have no impact on the
cash position or liquidity of the company.
Excluding the effect of the above charges, the company's operating loss
was $1.5 million for the 2000 fiscal year, compared to fiscal year 1999
operating income of $4.0 million, before special one-time charges of $1.8 and
$5.3 million. The decline in operating income was attributable to increased
research and development expenses, increased administration expenses and some
margin pressure.
Research and development expenses increased to support new product
development for the automotive and truck ETC and adjustable foot pedal
products, and for development of sensor-related products, for both new and
existing customers, as well as start-up costs related to the implementation of
operations at the company's automotive foot pedal plant in Florida. These R&D
and other start up costs have led to substantial new high volume automotive
ETC contracts for 2001 to 2005, contracts that have been previously announced
by Williams Controls.
The Company was not in compliance with the covenants of its credit
agreement at September 30, 2000, which credit agreement matures on July 11,
2001. Subsequent to September 30, 2000, the Company requested and received an
overadvance to support its ongoing operations. Due to limited borrowing
capacity under the credit facility and other factors, the Company has had a
lack of liquidity and its independent public accountants issued a going
concern qualification in its audit report.
A substantial portion of the liquidity problems experienced by the company
are a result of the operations of two of the company's subsidiaries, and the
company has taken steps to address this, including the pending sale of its
GeoFocus subsidiary and actions related to its Premier Plastics subsidiary.
The company is working with its primary bank to address these issues,
including the expansion of credit availability under the current agreement,
and is proceeding to obtain additional short-term financing from various
sources, including the sale and leaseback of two of the company's
manufacturing facilities.
Williams Controls president and chief executive officer Thomas K. Ziegler
stated, "While the company was able to increase sales in the face of the well
documented industry-wide slowdown in the heavy truck and automotive markets,
it has affected our overall operating results. We are taking cost cutting
measures and other actions to address this issue, and we are adjusting our
cost structure to reflect these market changes. We are also continuing to
move forward with the plan for pursuing strategic alternatives for the
business, including a possible sale of the company or its operating units."
Mr. Ziegler continued, "While we are not pleased with the financial
results and the performance of parts of our company, we believe that our core
automotive and heavy truck ETC and sensor businesses are sound and a great
deal of value exists in them. We are pursuing plans, including the recent
hiring of W.Y. Campbell & Company, to maximize and realize this value for the
benefit of our shareholders, and we will continue on an aggressive timetable
to do so."
Williams Controls, Inc.
Consolidated Statements of Operations
(Dollars in thousands, except share and per share amounts)
Three months Three months Twelve months Twelve months
ended 9/30/00 ended 9/30/99 ended 9/30/00 ended 9/30/99
Net sales $16,230 $15,017 $67,725 $61,422
Cost of sales 13,903 14,116 51,746 44,338
Gross margin 2,327 901 15,979 17,084
Operating expenses 4,343 3,779 17,527 13,087
Acquired in process
research and
development - 1,750 - 1,750
Loss from impairment
of assets - - - 5,278
Earnings (loss) from
continuing operations
before interest and
taxes (2,016) (4,628) (1,548) (3,031)
Interest and other
expenses 908 917 2,625 1,896
Equity interest in
loss of affiliate 2,187 81 5,044 488
Earnings (loss) from
continuing operations
before income
taxes (5,111) (5,626) (9,217) (5,415)
Income tax expense
(benefit) 8,160 (1,568) 7,527 (1,487)
Net earnings (loss)
from continuing
operations (13,271) (4,058) (16,744) (3,928)
Net loss from
discontinued
operations - Agriculture
Equipment segment - (5,611) - (5,611)
Net earnings
(loss) (13,271) (9,669) (16,744) (9,539)
Preferred dividends (146) (146) (588) (596)
Net earnings (loss)
allocable to common
shareholders $(13,271) $(9,815) $(17,332) $(10,135)
Earnings per share information:
Earnings (loss) per share
from continuing
operations - basic - $(0.22) - $(0.24)
Loss per share from
discontinued operations
- basic - (0.29) - (0.30)
Net earnings (loss) per
share - basic $(0.68) (0.51) $(0.88) (0.54)
Earnings (loss) per share
from continuing
operations -
diluted - (0.22) - (0.24)
Loss per share from
discontinued
operations - diluted - (0.29) - (0.30)
Net earnings (loss) per
share - diluted $(0.68) $(0.51) $(0.88) $(0.54)
Weighted common shares
outstanding -
basic 19,709,914 19,418,618 19,788,031 18,603,057
Weighted common shares
outstanding -
diluted 19,790,914 19,418,618 19,788,031 18,603,057
Williams Controls, Inc.
Consolidated Balance Sheets
(Dollars in thousands)
Sept. 30, 2000 Sept. 30, 1999
Assets
Current Assets:
Cash $30 $2,323
Trade and other accounts receivable, net 11,357 10,941
Inventories 8,016 9,828
Deferred income taxes and other 1,158 4,325
Net assets held for disposition - 360
Total current assets 20,561 27,777
Property, plant and equipment, net 21,486 20,775
Investment in and note receivable from
affiliate 1,615 6,398
Net assets held for disposition - 500
Goodwill and intangible assets, net 5,165 5,764
Deferred income taxes - 3,025
Other assets 322 265
Total assets $49,149 $64,504
Liabilities and Shareholders' Equity
Current Liabilities:
Accounts payable $11,363 $9,223
Accrued expenses 4,574 3,449
Non refundable deposit 500 -
Current portion of long-term debt and
capital leases 21,802 5,193
Estimated loss on disposal - 1,000
Total current liabilities 38,239 18,865
Long-term debt and capital lease obligations 4,567 24,743
Other liabilities 3,259 2,690
Convertible subordinated debt, net 2,040 -
Shareholders' Equity:
Preferred stock 1 1
Common stock 199 199
Additional paid-in capital 21,744 21,574
Accumulated deficit (20,023) (2,691)
Treasury stock (377) (377)
Note receivable (500) (500)
Total shareholders' equity 1,044 18,206
Total liabilities and shareholders' equity $49,149 $64,504