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PORTLAND, OR -- 12/05/2005 -- Williams Controls, Inc. (the "Company") (OTC: WMCO) today announced results for its 2005 fourth quarter and full year ended September 30, 2005.
Net sales of $17,488,000 for the fourth quarter ended September 30, 2005 were up 9.9% from $15,908,000 reported in the fourth quarter last year. Net sales for the year ended September 30, 2005 increased $9,366,000, or 16.1%, to $67,416,000 from $58,050,000 for the comparable period in fiscal 2004. The Company reported net income in the fourth quarter of fiscal 2005 of $2,396,000, or $.05 per diluted share, compared to a net loss of $7,782,000, or ($0.33) per diluted share, for the corresponding quarter in 2004. For the year ended September 30, 2005, net income was $7,495,000, or $.16 per diluted share, compared to a net loss of $4,058,000, or ($0.19) per diluted share, for the year ended September 30, 2004. Included in the fiscal 2004 fourth quarter and full year 2004 results is a charge of $19,770,000 for loss on extinguishment of debt related to the elimination of all outstanding Series B preferred stock and accrued dividends, and an income tax benefit of $9,401,000, primarily relating to reversal of the valuation allowance on certain deferred tax assets.
The increase in 2005 sales for both the fourth quarter and year ended September 30, 2005 was primarily due to higher unit volumes to our heavy truck, transit bus and off-road customers in North America, Europe and Asia.
Gross profit improvements in both the fourth quarter and the full year were driven by the higher sales volumes. Gross profit improved to $5,986,000 in the fourth quarter of fiscal 2005, a 9.2% increase from the $5,484,000 in the fourth quarter of fiscal 2004. Gross profits for the year ended September 30, 2005 improved to $23,013,000, a 22.3% increase from gross profits in fiscal 2004 of $18,816,000.
During fiscal 2005, the Company embarked on several strategic growth initiatives, which included establishing sales and manufacturing operations in China, opening a sales and technical office in Europe, and developing sensors for use in our electronic throttle control product lines. These initiatives, as well as other factors, resulted in an overall increase in operating expenses during fiscal 2005 as compared to fiscal 2004. Operating expenses for the fourth quarter of 2005 decreased $144,000 compared to the same quarter in 2004; however, for the full year ended September 30, 2005, operating expenses increased $1,173,000 over the prior year.
Interest expense on debt for the fourth quarter and year ended September 30, 2005 of $325,000 and $1,459,000, respectively, is related to the new bank debt drawn on September 30, 2004 in conjunction with the 2004 recapitalization. During fiscal 2004, the Company had minimal bank debt. In the fourth quarter and year ended September 30, 2004, the Company recorded $863,000 and $3,245,000, respectively, of interest expense related to dividends and accretion of outstanding Series B preferred stock. As part of the 2004 recapitalization, all outstanding Series B preferred stock and associated dividends were eliminated.
For the year ended September 30, 2005, the Company recorded tax expense of $4,279,000 at an effective tax rate of 36.3%. Prior to the fourth quarter of fiscal 2004, the Company had recorded a full valuation allowance on its deferred tax assets. During the fourth quarter of fiscal 2004, the Company reduced the valuation allowance, which resulted in an income tax benefit during the quarter of $9,401,000.
Williams Controls' President and Chief Executive Officer, Patrick W. Cavanagh stated, "We are pleased with our performance over the last year. The Company achieved substantial growth in sales and net profits while significantly reducing our debt." He continued, "Progress at our recently opened manufacturing facility in China and our sales and technical center in Germany has been promising." He continued, "In addition, we anticipate that our technology license for advanced non-contacting sensor technology will enable us to respond faster and at lower costs to our customers' requirements." He concluded, "During the last year we have positioned the Company to take advantage of international opportunities while investing in improving our competitive position with better technology and lower costs."
Williams will hold an investor conference call at 1:15 Pacific Time on Tuesday, December 6, 2005 to provide an overview of the fourth quarter and fiscal 2005 financial performance and business highlights.
You are invited to listen to the live webcast of our conference call at our website, www.wmco.com. You may also listen to the 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 3010689. An audio replay will be available by telephone through December 31, 2005. The telephone number to access the replay is 1-800-642-1687 (domestic) and 1-706-645-9291 (International). The access code will be 3010689.
ABOUT WILLIAMS CONTROLS
Williams Controls is a leading designer and manufacturer of Electronic Throttle Control Systems for the heavy truck and off-road markets. For more information, you can find Williams Controls on the internet 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 month Three month period ended period ended Year ended Year ended 9/30/05 9/30/04 9/30/05 9/30/04 ------- ------- ------- ------- Net sales $ 17,488 $ 15,908 $ 67,416 $ 58,050 Cost of sales 11,502 10,424 44,403 39,234 Gross profit 5,986 5,484 23,013 18,816 Research and development expense 788 806 3,233 3,042 Selling expense 368 291 1,342 1,192 Administration expense 1,299 1,502 5,696 4,864 Operating income from continuing operations 3,531 2,885 12,742 9,718 Interest income (26) (1) (59) (3) Interest expense - Debt 325 16 1,459 72 Interest expense - Series B Preferred Stock dividends and accretion - 863 - 3,245 Other (income) expenses, net (86) (469) (109) (221) Gain on put/call option agreement - - (323) - Loss on extinguishment of debt - 19,770 - 19,770 Income (loss) from continuing operations before income taxes 3,318 (17,294) 11,774 (13,145) Income tax expense (benefit) 922 (9,401) 4,279 (9,265) Net income (loss) from continuing operations 2,396 (7,893) 7,495 (3,880) (Gain) loss from discontinued operations - (111) - 178 Net income (loss) 2,396 (7,782) 7,495 (4,058) Earnings per share information: Income (loss) per common share from continuing operations - basic and diluted $ 0.05 $ (0.33) $ 0.16 $ (0.18) Loss per common share from discontinued operations - basic and diluted - (0.00) - (0.01) Net income (loss) per common share - basic and diluted $ 0.05 $ (0.33) $ 0.16 $ (0.19) Weighted average shares used in per share calculation - basic 46,734,006 23,275,809 46,659,499 21,867,137 Weighted average shares used in per share calculation - diluted 47,838,998 23,275,809 47,761,142 21,867,137 Williams Controls, Inc. Unaudited Condensed Consolidated Balance Sheets (Dollars in thousands) September 30, September 30, 2005 2004 ------------- ------------- Assets Current Assets: Cash and cash equivalents $ 5,052 $ 2,482 Trade accounts receivable, net 8,896 8,193 Other accounts receivable 579 424 Inventories 4,433 3,777 Deferred income taxes 1,868 2,116 Prepaid expenses and other current assets 308 290 Total current assets 21,136 17,282 Property, plant and equipment, net 7,455 5,402 Deferred income taxes 3,520 7,247 Other assets, net 1,394 1,194 Total assets $ 33,505 $ 31,125 Liabilities and Stockholders' Equity (Deficit) Current Liabilities: Accounts payable $ 5,449 $ 4,084 Accrued expenses 5,225 4,969 Current portion of employee benefit obligations 1,439 1,240 Current portion of long-term debt and capital lease obligations 5,503 3,454 Total current liabilities 17,616 13,747 Long-term Liabilities: Long-term debt and capital lease obligations 8,126 16,640 Employee benefit obligations 6,934 7,440 Other long-term liabilities 248 333 Stockholders' Equity (Deficit): Preferred stock (Series C) - - Common stock 467 466 Additional paid-in capital 36,093 35,960 Accumulated deficit (29,963) (37,458) Treasury stock (377) (377) Accumulated other comprehensive loss (5,639) (5,626) Total stockholders' equity (deficit) 581 (7,035) Total liabilities and stockholders' equity (deficit) $ 33,505 $ 31,125
Contact: Dennis E. Bunday Executive Vice President and Chief Financial Officer Telephone: (503) 684-8600
The following information was filed by Williams Controls Inc (WMCO) on Tuesday, December 6, 2005 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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