Williams Controls Inc. (WMCO, Financial) filed Quarterly Report for the period ended 2011-12-31.
Williams Controls Inc. has a market cap of $80.7 million; its shares were traded at around $11.1 with a P/E ratio of 22.6 and P/S ratio of 1.3. The dividend yield of Williams Controls Inc. stocks is 4.3%.
Net sales increased $1,959 in the first quarter of fiscal 2012 compared to the first quarter of fiscal 2011. The increase in sales primarily results from an increase in NAFTA truck sales of 58% when compared to the first quarter of fiscal 2011, due to continued improvements in the economic environment and freight hauling industry. Offsetting the increase in NAFTA truck sales were decreases in European truck sales of 28% over the prior year first quarter due primarily to timing of shipments to one European customer. In addition, sales to Asian truck customers decreased 57% over the prior year quarter primarily due to timing of orders with one customer in Korea. We do not believe these decreases to be representative of any long-term changes in those customers’ market shares or expected level of future orders. Worldwide off-road sales increased 35% for the quarter ended December 31, 2011 with increases in all markets due to both improving markets for off-road products and new product introductions by the Company to serve that market.
As a percent of sales, cost of sales remained relatively flat between quarters. As anticipated, material costs were higher in the first quarter of fiscal 2012 due to several components increasing in price over the prior year first quarter, including die cast components and rare earth magnets. It is likely that component pricing for several components will be higher throughout fiscal 2012 as compared to fiscal 2011. Offsetting these increases in component pricing were reductions in manufacturing overhead costs as a percentage of sales, primarily due to higher sales volumes to distribute fixed overhead costs. In addition, freight and duty costs were up on a quarter over quarter basis, due to increased sales volumes and higher expedited freight costs due to some delivery timing difficulties by one of our major suppliers. The higher expedited freight costs due to the supplier delivery issues were approximately $105 during the first quarter of fiscal 2012. Warranty costs were down $90 quarter over quarter.
Gross profit was $4,889, or 31.5% of net sales in the first quarter of fiscal 2012, an increase of $592 compared to the gross profit of $4,297, or 31.7% of net sales, in the comparable fiscal 2011 period.
Changes in working capital items used cash of $1,543 in the first quarter of fiscal 2012 compared to a use of cash of $2,231 in the first quarter of fiscal 2011. The decrease in receivables in both the first quarter of 2012 and 2011 is primarily due to lower sales volumes in the first quarter which usually has fewer shipping days as compared to sales volumes in the preceding fourth quarter of the prior year and to a lesser degree timing of collections. Inventories decreased $462 in the first quarter of fiscal 2012 from the fourth fiscal quarter in 2011 compared to an increase of $649 in the first quarter of fiscal 2011 from the fourth fiscal quarter in 2010. Inventories increased during fiscal 2011 due to the start-up of our Indian facility, safety stock and increasing inventory to meet customers’ rapidly escalating delivery schedules. The inventory reduction in the first quarter of fiscal 2012 related to reducing some safety stock and more closely balancing inventory requirements with sales mix. Accounts payable and accrued expenses decreased in the first quarter of fiscal 2012 from the fourth fiscal quarter in 2011, primarily due to timing of payments on accounts payable and increased seasonal payments over the fourth fiscal quarter of 2011. Accounts payable and accrued expenses decreased in the first quarter of fiscal 2011 from the fourth fiscal quarter in 2010, primarily due to timing of payments on accounts payable, increased seasonal payments over the fourth fiscal quarter of 2010 and a reduction in our warranty provision of $392 related to payments to one customer for prior warranty claims. Cash flows from operations for the three months ended December 31, 2011 included payments to our pension plans of $214 compared to $146 for the three months ended December 31, 2010. We believe it is likely we will continue to generate positive cash from operations, however, depending on the continued uncertainty in the world-wide economic market, we could experience periods of negative cash flow from operations.
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Williams Controls Inc. has a market cap of $80.7 million; its shares were traded at around $11.1 with a P/E ratio of 22.6 and P/S ratio of 1.3. The dividend yield of Williams Controls Inc. stocks is 4.3%.
Highlight of Business Operations:
Net sales increased to $15,509 for the first quarter of fiscal 2012, up 14.5% compared to the first quarter of fiscal 2011. However, net sales were down 7.4% compared to the fourth quarter of fiscal 2011. Our first quarter typically has fewer shipping days due to regularly scheduled holiday shutdowns by several of our NAFTA and European customers as well as a holiday shutdown in our Portland, Oregon facility, resulting in lower net sales. Worldwide sales of heavy trucks and off-road equipment generally increased in the first quarter of fiscal 2012 when compared to the first quarter of fiscal 2011. Additionally, we introduced several new products during fiscal 2011 and those new product and program introductions contributed approximately $750 of additional sales in the first quarter of fiscal 2012. While we continue to closely monitor all of our costs, we remain committed to spending on new product development and technology for existing and new customers.Net sales increased $1,959 in the first quarter of fiscal 2012 compared to the first quarter of fiscal 2011. The increase in sales primarily results from an increase in NAFTA truck sales of 58% when compared to the first quarter of fiscal 2011, due to continued improvements in the economic environment and freight hauling industry. Offsetting the increase in NAFTA truck sales were decreases in European truck sales of 28% over the prior year first quarter due primarily to timing of shipments to one European customer. In addition, sales to Asian truck customers decreased 57% over the prior year quarter primarily due to timing of orders with one customer in Korea. We do not believe these decreases to be representative of any long-term changes in those customers’ market shares or expected level of future orders. Worldwide off-road sales increased 35% for the quarter ended December 31, 2011 with increases in all markets due to both improving markets for off-road products and new product introductions by the Company to serve that market.
As a percent of sales, cost of sales remained relatively flat between quarters. As anticipated, material costs were higher in the first quarter of fiscal 2012 due to several components increasing in price over the prior year first quarter, including die cast components and rare earth magnets. It is likely that component pricing for several components will be higher throughout fiscal 2012 as compared to fiscal 2011. Offsetting these increases in component pricing were reductions in manufacturing overhead costs as a percentage of sales, primarily due to higher sales volumes to distribute fixed overhead costs. In addition, freight and duty costs were up on a quarter over quarter basis, due to increased sales volumes and higher expedited freight costs due to some delivery timing difficulties by one of our major suppliers. The higher expedited freight costs due to the supplier delivery issues were approximately $105 during the first quarter of fiscal 2012. Warranty costs were down $90 quarter over quarter.
Gross profit was $4,889, or 31.5% of net sales in the first quarter of fiscal 2012, an increase of $592 compared to the gross profit of $4,297, or 31.7% of net sales, in the comparable fiscal 2011 period.
Changes in working capital items used cash of $1,543 in the first quarter of fiscal 2012 compared to a use of cash of $2,231 in the first quarter of fiscal 2011. The decrease in receivables in both the first quarter of 2012 and 2011 is primarily due to lower sales volumes in the first quarter which usually has fewer shipping days as compared to sales volumes in the preceding fourth quarter of the prior year and to a lesser degree timing of collections. Inventories decreased $462 in the first quarter of fiscal 2012 from the fourth fiscal quarter in 2011 compared to an increase of $649 in the first quarter of fiscal 2011 from the fourth fiscal quarter in 2010. Inventories increased during fiscal 2011 due to the start-up of our Indian facility, safety stock and increasing inventory to meet customers’ rapidly escalating delivery schedules. The inventory reduction in the first quarter of fiscal 2012 related to reducing some safety stock and more closely balancing inventory requirements with sales mix. Accounts payable and accrued expenses decreased in the first quarter of fiscal 2012 from the fourth fiscal quarter in 2011, primarily due to timing of payments on accounts payable and increased seasonal payments over the fourth fiscal quarter of 2011. Accounts payable and accrued expenses decreased in the first quarter of fiscal 2011 from the fourth fiscal quarter in 2010, primarily due to timing of payments on accounts payable, increased seasonal payments over the fourth fiscal quarter of 2010 and a reduction in our warranty provision of $392 related to payments to one customer for prior warranty claims. Cash flows from operations for the three months ended December 31, 2011 included payments to our pension plans of $214 compared to $146 for the three months ended December 31, 2010. We believe it is likely we will continue to generate positive cash from operations, however, depending on the continued uncertainty in the world-wide economic market, we could experience periods of negative cash flow from operations.
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