SOURCE: Williams Controls, Inc.

Williams Controls, Inc.

August 08, 2012 09:30 ET

Williams Controls Reports Third Quarter 2012 Results and Declares Quarterly Dividend

PORTLAND, OR--(Marketwire - Aug 8, 2012) - Williams Controls, Inc. (the "Company") (NYSE MKT: WMCO) today announced financial results for its third fiscal quarter ended June 30, 2012. 

Net sales for the quarter were $16,382,000, down 2.3%, from net sales of $16,767,000 reported in the third quarter of fiscal 2011 and down 2.7% from the second quarter of fiscal 2012. The Company reported net income in the third fiscal quarter of $845,000, or $0.11 per diluted share, compared to net income of $1,506,000, or $0.20 per diluted share, for the corresponding quarter of fiscal 2011. Although sales in the third quarter were down 2.7% from the second quarter of fiscal 2012, net income remained level with the net income of $895,000 reported in the second quarter. The performance in the third quarter of fiscal 2012 results largely from a decline in sales to both European and Chinese off-road customers partially offset by increased sales to our NAFTA truck customers. 

Net sales for the first nine months of fiscal 2012 increased $3,620,000, or 8.0%, to $48,722,000 from $45,102,000 for the comparable period last year. Net income for the nine months ended June 30, 2012 was $2,753,000, or $0.36 per diluted share, compared to net income of $2,373,000, or $0.32 per diluted share, for the nine months ended June 30, 2011. 

In the first nine months of fiscal 2012, the financial results include a reduction in our environmental provision of $145,000 on an after-tax basis, or $0.02 per diluted share. For fiscal 2011, the first nine months results include after-tax charges of approximately $395,000, or $0.05 per diluted share, for costs related to special projects and settlement of a long-standing legal matter. 

Sales to our NAFTA truck customers increased in both the third quarter and first nine months of fiscal 2012 with increases of 13% for the third quarter and 36% for the first nine months as truck build rates were generally higher this year than last. With the continued economic uncertainty in Europe, sales to our European truck customers declined 21% from the prior year third quarter and 16% year to date. China off-road, which had shown consistent growth over the last several quarters, declined 49% in the second quarter compared to last year due to a general slow-down in demand for off-road vehicles in China. Off-road continues to be an increasingly important component of our business, comprising 25% of our overall sales. Although world-wide off-road sales were down 6% quarter over quarter due to weakness in China, for the first nine months world-wide off-road sales were up 15% over the prior year as new product introductions in both NAFTA and Europe outpaced the slowdown in China.

Commenting on the third quarter results Patrick W. Cavanagh, Williams Controls' President and Chief Executive Officer stated, "As we have commented previously, we have targeted the off-road market as a significant growth opportunity and although we are seeing what we feel is some temporary weakness in the China off-road market due to some economic difficulties in that country, new product introductions in both Europe and NAFTA have pushed off-road sales 15% higher than last year." He continued, "We also see future growth opportunities in off-road, particularly with our line of newly-introduced joysticks."

He concluded, "Although we are seeing some economic weakness and uncertainty in several of our world-wide markets, our market position remains strong and we are in an excellent position when those markets strengthen." 

Today the Company also announced its regular quarterly dividend of $0.12 per share payable on August 28, 2012 to stockholders of record as of August 21, 2012. 

Williams Controls will hold an investor conference call at 4:15 P.M. Eastern Time on Wednesday, August 8, 2012 to provide an overview of the third quarter of fiscal 2012 financial performance and business highlights. You are invited to listen to the conference call by dialing 1-888-665-2348 (domestic) or 1-973-200-3386 (international). Participants should call prior to the start time to allow for registration. The conference access code is 12422673. An audio replay will be available by telephone through August 17, 2012. The telephone number to access the replay is 1-855-859-2056 (domestic) and 1-404-537-3406 (international). The access code will be 12422673. 

Williams Controls is a leading global designer and manufacturer of Electronic Throttle Control Systems ("ETCs") for the heavy truck, bus and off-road markets. Williams Controls is headquartered in Portland, Oregon and employs more than 300 people worldwide at locations in North America, Europe, and Asia. For more information, visit Williams Controls' website at Information posted on our website is not incorporated into, and does not constitute a part of, this release.

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. These forward looking statements are based on management's assumptions and projections, and are sometimes identifiable by use of the words, "expect to," "plan," "will," "believe" and words of similar predictive nature. Because management's assumptions and projections are based on anticipation of future events, you should not place undue emphasis on forward-looking statements. You should anticipate that our actual performance may vary from these projections, and variations may be material and adverse. You should not rely on forward-looking statements in evaluating an investment or prospective investment in our stock, and when reading these statements you should consider the uncertainties and risks 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 Company's Securities and Exchange Commission filings. These factors include our ability to maintain positive relationships with key customers; the concentration of our sales revenues among a limited number of large customers; our status as a component manufacturer and the resulting impact on our revenues of demand for vehicles and equipment in which our products are installed; the effect of products liability lawsuits that directly affect us and that indirectly impact us because of their effect on the transportation and equipment industries generally; the impact of foreign currency exchange rates on our gross income; the impact of federal monetary and trade policies that impact the market for our products; our ability to comply with U.S. and foreign laws applicable to our oversees operations; and the status of our relationships with our employees and organized labor force. These risks and uncertainties are beyond our control and, in many cases; we cannot predict the risks and uncertainties that could cause our actual results to differ materially from those indicated by the forward-looking statements. Some of the factors that may cause our actual results in future periods to differ materially from those currently expected or desired because of a number of risks and uncertainties include, but are not limited to, those risk discussed in the section entitled "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended September 30, 2011.

Williams Controls, Inc.  
Unaudited Condensed Consolidated Statements of Operations  
(Dollars in thousands, except share and per share amounts)  
    Three months ended 6/30/12 (unaudited)     Three months ended 6/30/11 (unaudited)     Nine months ended 6/30/12 (unaudited)     Nine months ended 6/30/11 (unaudited)  
Net sales   $ 16,382     $ 16,767     $ 48,722     $ 45,102  
Cost of sales     11,517       11,099       33,972       30,692  
Gross profit     4,865       5,668       14,750       14,410  
Research and development expense     1,048       1,318       3,445       3,688  
Selling expense     760       704       2,230       2,080  
Administration expense     1,445       1,412       4,119       5,034  
Operating income     1,612       2,234       4,956       3,608  
Interest income     (3 )     (2 )     (5 )     (4 )
Interest expense     31       25       106       51  
Other expense, net     111       28       219       69  
Income before income taxes     1,473       2,183       4,636       3,492  
Income tax expense     628       677       1,883       1,119  
Net income   $ 845     $ 1,506     $ 2,753     $ 2,373  
Earnings per share information:                                
Basic -                                
Net income per common share   $ 0.11     $ 0.20     $ 0.37     $ 0.32  
Weighted average shares used in per share calculation - basic     7,338,423       7,300,277       7,321,202       7,294,519  
Diluted -                                
Net income per common share   $ 0.11     $ 0.20     $ 0.36     $ 0.32  
Weighted average shares used in per share calculation -diluted     7,517,291       7,503,313       7,511,933       7,469,173  
Cash dividends per share   $ 0.12     $ 0.12     $ 0.36     $ 0.12  
Williams Controls, Inc.  
Unaudited Condensed Consolidated Balance Sheets  
(Dollars in thousands)  
    June 30,
    September 30,
Current Assets:                
  Cash and cash equivalents   $ 2,577     $ 1,339  
  Trade accounts receivable, net     10,397       10,561  
  Other accounts receivable     657       944  
  Inventories     8,940       11,334  
  Deferred income taxes     847       847  
  Prepaid expenses and other current assets     556       552  
    Total current assets     23,974       25,577  
Property, plant and equipment, net     8,708       9,446  
Deferred income taxes     3,061       3,181  
Other assets, net     317       337  
    Total assets   $ 36,060     $ 38,541  
Liabilities and Stockholders' Equity                
Current Liabilities:                
  Revolving loan facility   $ 908     $ 1,575  
  Accounts payable     4,557       5,599  
  Accrued expenses     4,798       5,536  
  Current portion of employee benefit obligations     201       201  
    Total current liabilities     10,464       12,911  
Long-term Liabilities:                
  Employee benefit obligations     7,287       8,069  
  Other long-term liabilities     134       126  
Stockholders' Equity:                
  Preferred stock     -       -  
  Common stock     73       73  
  Additional paid-in capital     39,019       38,521  
  Accumulated deficit     (11,024 )     (11,108 )
  Treasury stock     (2,734 )     (2,734 )
  Accumulated other comprehensive loss     (7,159 )     (7,317 )
    Total stockholders' equity     18,175       17,435  
    Total liabilities and stockholders' equity   $ 36,060     $ 38,541  

Contact Information

  • Contact:
    Mike Rusk
    Corporate Controller
    Telephone: (503) 684-8600