<DOCUMENT> <TYPE>EX-99.1 <SEQUENCE>2 <FILENAME>e18855ex99-1.txt <DESCRIPTION>PRESS RELEASE <TEXT> Exhibit 99.1 Williams Controls Reports Third Quarter 2004 Results PORTLAND, Ore., Aug. 16 /PRNewswire-FirstCall/ -- Williams Controls, Inc. (OTC: WMCO) today announced results for its 2004 third quarter ended June 30, 2004. Net sales of $15,127,000 were 22.2% higher than the net sales of $12,381,000 recorded for the corresponding quarter last year. Net sales for the nine months ended June 30, 2004 increased $4,726,000, or 12.6%, to $42,142,000 from $37,416,000 for the comparable period in fiscal 2003. Net income was $1,472,000, or $.04 per diluted share, for the third quarter of fiscal 2004, compared to a net loss allocable to common shareholders of $373,000, or ($.02) per diluted share, for the corresponding quarter in 2003. For the nine months ended June 30, 2004, net income was $3,724,000, or $.11 per diluted share, compared to a net loss allocable to common shareholders of $164,000, or ($.01) per diluted share, for the nine months ended June 30, 2003. The $2,746,000 sales increase for the third quarter was driven by higher unit sales volumes for heavy truck and transit bus resulting in an increase of $4,026,000, or 36.3%, in sales from these product lines. This increase was partially offset by reduced sales of $1,280,000 due to the sale of the passenger car and light truck product lines on September 30, 2003. Operating income from continuing operations in the third quarter of 2004 improved to $2,646,000, compared to $383,000 for the same quarter of 2003, due to elimination of the negative gross margins from the passenger car and light truck product lines, higher truck sales volumes and an overall reduction in operating expenses. Research and development, selling and administration expenses were higher for heavy truck and transit bus primarily due to increased product and customer development efforts; however, these expenses in total were lower in the third quarter of fiscal 2004, compared to the third quarter of 2003, due to the sale of the passenger car and light truck product lines. Sales for the nine months ended June 30, 2004 also increased due to higher unit sales volume for the heavy truck and transit bus product lines. Sales for these product lines increased $4,726,000, or 12.6%, compared to the same period in fiscal 2003. This increase was partially offset by the elimination of $3,307,000 of sales related to the passenger car and light truck product lines. Operating income from continuing operations for the nine months ending June 30, 2004 improved to $6,833,000, compared to $1,747,000 for the corresponding nine months of 2003. Gross margins improved 64.5% to $13,332,000 in the first nine months of 2004, due to higher heavy truck sales volumes and elimination of the negative gross margins from the passenger car and light truck product lines. Additionally, gross margins for the first nine months of 2003 were adversely impacted by a $985,000 charge for higher than normal warranty claims with one heavy truck customer. For the first nine months of fiscal 2004, research and development, selling and administration expenses were higher for heavy truck and transit bus primarily due to increased product and customer development efforts; however, the total of these expenses were lower than the comparable nine months of 2003 due to the sale of the passenger car and light truck product lines. Additionally, the first nine months of fiscal 2003 included a gain of $951,000 from a settlement with a prior automotive customer, which improved fiscal 2003 operating income. Williams Controls' Board Chairman Gene Goodson stated, "This is the third consecutive quarter of continuing improvement in earnings following the sale of our passenger car and light truck product lines." He continued, "additionally we are also benefiting from the continuing improvement in our core heavy truck market." He concluded, "currently Williams is well positioned with the improved truck markets, improved balance sheet and the recently announced naming of Patrick Cavanagh as our new President and Chief Executive Officer." ABOUT WILLIAMS CONTROLS Williams Controls is a designer, manufacturer and integrator of sensors and controls for the motor vehicle industry. 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: the 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. Consolidated Statements of Operations (Dollars in thousands, except share and per share amounts) Three Three Nine Nine months months months months ended ended ended ended 6/30/04 6/30/03 6/30/04 6/30/03 (unaudited) (unaudited) (unaudited) (unaudited) Net sales $15,127 $12,381 $42,142 $37,416 Cost of sales 10,098 9,541 28,810 29,311 Gross margin 5,029 2,840 13,332 8,105 Research and development expense 858 974 2,236 2,725 Selling expense 339 330 901 993 Administration expense 1,186 1,153 3,362 3,591 Gain on settlement with customer -- -- -- (951) Operating income from continuing operations 2,646 383 6,833 1,747 Interest income (1) (2) (2) (23) Interest expense - Series B Preferred Stock dividends and accretion 822 -- 2,382 -- Interest expense - Debt 17 99 56 426 Other (income) expense, net 253 (19) 248 (160) Income from continuing operations before income taxes 1,555 305 4,149 1,504 Income tax expense (benefit) 42 - 136 (300) Net income from continuing operations 1,513 305 4,013 1,804 Discontinued Operations - Loss (income) 41 (19) 289 (40) Net income 1,472 324 3,724 1,844 Preferred dividends and accretion of Series B Preferred Stock -- (697) -- (2,008) Net income (loss) allocable to common shareholders $1,472 $(373) $3,724 $(164) Earnings per share information: Income (loss) per common share from continuing operations - basic $0.04 $(0.02) $0.12 $(0.01) Income (loss) per common share from discontinued operations - basic 0.00 0.00 (0.01) 0.00 Net income (loss) per common share - basic $0.04 $(0.02) $0.11 $(0.01) Weighted average shares used in per share calculation - basic 34,769,175 20,125,492 33,144,151 20,103,125 Income (loss) per common share from continuing operations - diluted $0.04 $(0.02) $0.11 $(0.01) Income (loss) per common share from discontinued operations - diluted 0.00 0.00 0.00 0.00 Net income (loss) per common share - diluted $0.04 $(0.02) $0.11 $(0.01) Weighted average shares used in per share calculation - diluted 59,048,884 20,125,492 56,365,989 20,103,125 Williams Controls, Inc. Consolidated Balance Sheets (Dollars in thousands) June 30, September 30, 2004 2003 (unaudited) (unaudited) Assets Current Assets: Cash and cash equivalents $6,049 $101 Trade accounts receivable, net 8,630 7,015 Other receivables 491 7,185 Inventories, net 3,814 4,053 Prepaid expenses and other current assets 546 330 Total current assets 19,530 18,684 Property, plant and equipment, net 5,361 5,647 Other assets, net 551 576 Total assets $25,442 $24,907 Liabilities and Shareholders' Deficit Current Liabilities: Accounts payable $3,755 $4,027 Accrued expenses 3,938 6,698 Current portion of employee benefit obligations 2,949 2,098 Current portion of long-term debt and capital leases 332 4,658 Total current liabilities 10,974 17,481 Long-term debt and capital lease obligations 151 402 Employee benefit obligations 7,043 8,095 Mandatory redeemable Convertible Series B Preferred Stock, net 18,454 16,072 Shareholders' Deficit: Preferred stock (Series A and A-1) 1 1 Common stock 230 201 Additional paid-in capital 24,434 22,224 Accumulated deficit (29,676) (33,400) Treasury Stock (377) (377) Other comprehensive loss - Pension liability adjustment (5,792) (5,792) Total shareholders' deficit (11,180) (17,143) Total liabilities and shareholders' deficit $25,442 $24,907 SOURCE Williams Controls, Inc. -0- 08/16/2004 /CONTACT: Dennis E. Bunday, Executive Vice President and Chief Financial Officer of Williams Controls, +1-503-684-8600/ /Web site: http://www.wmco.com / (WMCO) CO: Williams Controls, Inc. ST: Oregon IN: AUT CPR ECP OTC SU: ERN </TEXT> </DOCUMENT>