PORTLAND, OR -- 05/07/08 --
Williams Controls, Inc. (the "Company")
(NASDAQ: WMCO) today announced financial results for its 2008 second
quarter ended March 31, 2008.
Sales for the quarter were $16,484,000, down 10.0% from sales of
$18,309,000 reported in the second quarter of fiscal 2007. Sales for the
six months ended March 31, 2008, decreased $5,295,000, or 14.4%, to
$31,456,000 from $36,751,000 for the comparable period last year. The
Company reported net income in the second quarter of fiscal 2008 of
$2,480,000, or $0.32 per diluted share, compared to net income of
$2,054,000, or $0.27 per diluted share, for the second quarter of fiscal
2007. Net income for the six months ended March 31, 2008 was $3,636,000,
or $0.47 per diluted share, compared to net income of $4,597,000, or $0.60
per diluted share, for the six months ended March 31, 2007. Included in
the second quarter and six months fiscal 2008 results was an after tax gain
of approximately $680,000, or $.09 per fully diluted share, related to
settlement of environmental claims.
Although our NAFTA heavy truck sales were down 43% when compared to the
second quarter of fiscal 2007, our overall NAFTA sales were only down 23%
and sales volumes in this market improved slightly from first quarter 2008
levels. Sales to the Company's European and Asian customers increased 16%
and 84%, respectively, over last year due to a continuing strong demand for
the Company's products.
For the first half of the year, NAFTA heavy truck sales volumes were down
51% when compared to the same period in fiscal 2007; however, overall NAFTA
sales were only down 26%. Sales to our European and Asian customers helped
offset a portion of the NAFTA decline, increasing approximately 15% and
36%, respectively. For the first six months of fiscal 2008, sales outside
of the NAFTA market were $1.9 million higher than in the first six months
of 2007 and represented over 35% of world-wide sales.
For the quarter, operating income increased 17.4%, to $3,622,000 from
$3,086,000 in the second quarter of fiscal 2007. For the first six months,
2008 operating income was $5,420,000, a 17.6% decline from the first six
months of fiscal 2007 operating income of $6,578,000. For both the quarter
and the six months, the earnings decline is primarily the result of the
decline in the NAFTA truck sales volume. However, a gain realized from the
settlement of environmental claims of $1,010,000 with prior operators of
the Company's Portland, Oregon site improved second quarter earnings. For
the quarter, the gross margin percentage improved even though sales were
down 10%. Included in the second quarter and six months ended March 31,
2007, the Company recognized $251,000 and $840,000 in other income,
respectively, related to the reversal of old accounts payable from which it
had been judicially released. No amounts were reversed during fiscal 2008.
"We continue to execute our diversification strategy in spite of the weak
NAFTA truck market, increasing international sales $1.4 million
quarter-over-quarter, with customers outside of NAFTA, which now account
for 36% of our total sales," said Patrick W. Cavanagh, Williams Controls'
President and Chief Executive Officer. He continued, "An example of the
success of this strategy is the award of a significant new vehicle platform
by a major Asian truck manufacturer." In addition, "We are confident that
this trend will continue as the China, India and other global markets
continue their conversion to emission compliant engines."
The Company will hold an investor conference call at 4:15 p.m. Eastern Time
on Wednesday, May 7, 2008, to provide an overview of the second quarter
fiscal 2008 financial performance and business highlights. You are invited
to listen to the conference call by dialing 1-888-665-2348 (domestic) or
1-706-643-4013 (international). Participants should call prior to the
start time to allow for registration. The conference access code is
44443140. An audio replay will be available by telephone through May 31,
2008. The telephone number to access the replay is 1-800-642-1687
(domestic) and
1-706-645-9291 (International). The access code will be 44443140.
ABOUT WILLIAMS CONTROLS
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 200 people worldwide at locations in North America,
Europe, and Asia. For more information, visit Williams Controls' website
at www.wmco.com.
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 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 Securities and Exchange Commission filings of the
Company, economic downturns affecting the operations of the Company or any
of its business operations, competition, and the ability of the Company to
successfully identify and implement any strategic alternatives. 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 Condensed Consolidated Statements of Operations
(Dollars in thousands, except share and per share amounts)
Three Three Six Six
months months months months
ended ended ended ended
3/31/08 3/31/07 3/31/08 3/31/07
(unaudited)(unaudited)(unaudited)(unaudited)
--------- --------- --------- ---------
Net sales $ 16,484 $ 18,309 $ 31,456 $ 36,751
Cost of sales 10,858 12,174 20,943 24,325
Gross profit 5,626 6,135 10,513 12,426
Research and development
expense 992 838 2,001 1,668
Selling expense 659 572 1,337 1,092
Administration expense 1,363 1,382 2,765 2,655
Gain from settlement of
environmental claims (1,010) - (1,010) -
Realignment of operations - 257 - 433
Operating income 3,622 3,086 5,420 6,578
Interest income (11) (25) (32) (61)
Interest expense 42 209 131 467
Other income, net (73) (259) (108) (863)
Income before income taxes 3,664 3,161 5,429 7,035
Income tax expense 1,184 1,107 1,793 2,438
Net income $ 2,480 $ 2,054 $ 3,636 $ 4,597
Earnings per share information:
Basic -
Net income per common share $ 0.33 $ 0.28 $ 0.48 $ 0.62
Weighted average shares used in
per share calculation - basic 7,518,217 7,460,709 7,513,488 7,450,112
Diluted -
Net income per common share $ 0.32 $ 0.27 $ 0.47 $ 0.60
Weighted average shares used in
per share calculation -diluted 7,743,835 7,735,525 7,749,198 7,718,489
Williams Controls, Inc.
Unaudited Condensed Consolidated Balance Sheets
(Dollars in thousands)
March 31, September 30,
2008 2007
(unaudited) (unaudited)
----------- -----------
Assets
Current Assets:
Cash and cash equivalents $ 3,250 $ 1,621
Short-term investments 381 -
Trade accounts receivable, net 10,629 8,054
Other accounts receivable 645 1,656
Inventories 8,069 9,152
Deferred income taxes 544 486
Prepaid expenses and other current assets 628 297
Total current assets 24,146 21,266
Property, plant and equipment, net 8,852 8,953
Deferred income taxes 1,514 1,461
Other assets, net 560 623
Total assets $ 35,072 $ 32,303
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 3,787 $ 3,811
Accrued expenses 4,975 4,983
Current portion of employee benefit
obligations 288 288
Current portion of long-term debt - 1,000
Total current liabilities 9,050 10,082
Employee benefit obligations 4,438 4,803
Other long-term liabilities 259 249
Stockholders' Equity:
Preferred stock (Series C) - -
Common stock 75 75
Additional paid-in capital 35,364 34,899
Accumulated deficit (8,923) (12,477)
Treasury Stock (377) (377)
Accumulated other comprehensive loss (4,814) (4,951)
Total stockholders' equity 21,325 17,169
Total liabilities and stockholders' equity $ 35,072 $ 32,303
Contact:
Mike Rusk
Financial Controller
Telephone: (503) 684-8600
