Williams Controls Inc. ( WMCO) Q4 2011 Earnings Call December 8, 2011 10:30 AM ET Executives Dennis Bunday – Chief Financial Officer Pat Cavanagh – Chief Executive Officer Analysts John Nobile – Taglich Brothers Matthew Berry – Lane Five Capital Presentation Operator
Previous Statements by WMCO
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I will now turn the call over to our CEO, Pat Cavanagh, for his comments on the quarter.Pat Cavanagh Thank you, Dennis. Good morning, everyone. And welcome to our fiscal fourth investor conference call. This morning we released our financial results for our 2011 fourth quarter and year end. We are holding our call today from the New York Stock Exchange where we had the opportunity to ring the opening bell yesterday. We move from the NASDAQ to the NYSE Amex because we believe that for our stock the NYSE Amex platform may reduce spreads and increase trading volume making it easier for investors to own our stock. Sales for the year ended September 30, 2011 increased $9.6 million or 18.4% to $61.9 million from $52.3 million for the comparable period last year. Net income for the year ended September 30, 2011 was $3.3 million or $0.45 per diluted share, compared to net income of $1.4 million or $0.19 per diluted share for the year ended September 30, 2010. There were number of one-time costs in both fiscal ’10 and fiscal ’11, and Dennis will cover those later in his call, later in this call. Over the last five years we have made a conservative effort to broaden our product offering and expand our international footprint. Overall, in fiscal ’11 55% of our products were sold in United States, 9% in Canada and Mexico, 22% in Europe and 14% in Asia. Also in fiscal ’11 over $3 million in sales came from new products introduced in the last year. We expect to see similar results going forward based on over $18 million of new business that we won in the last two fiscal years. Many of these new products wins were for off-highway customers where sales were at a record level this year $14 million or 24% of our total sales.
In fiscal ’11, we were specially pleased with our new bulldozer pedal systems and power armrest adjusters, where those products contributed over a $1 million in new sales at the key off-highway OEM.We also launched another rocker pedal system for major agricultural OEM, which will contribute the meaningful sales in fiscal ’13. We recently introduced our new state-of-the-art joystick systems and have them in the field under customer evaluation. So far we have received very good feedback from our existing customers and potential customers. We expect to start selling these products in fiscal ’12, because of the sophistication and software contained in these products, the selling price is substantially higher than our existing throttle pedals. In fiscal ’11 20% of our business was tied directly to production of medium and heavy trucks in North America. So I thought to make a couple of comments about the outlook in this market. In calendar 2012 the industry is projected to build 295,000 Class 8 trucks, up from approximately 250,000 in calendar year 2011. I think there is some risk in this number, the kiosk in Europe continues, but the backlog of Class 8 trucks are strong, fleet profits are up, used truck prices are firm, exports are strong and the current fleet is old. Class 8 trucks are normally owned by fleets that transport goods for leaving. While the Class 8 market gets a lot of attention, the North American Class 5 through 7 medium duty vehicle market is also very important player. In 2010, medium demand was made up of three components, medium trucks of about 68% of the market, school and buses at about 22% and recreational vehicles at 10%. The medium duty market in North America this year is showing a 40% year-over-year increase compared to 2010 at 165,000 vehicles. The next year’s production is expected to increase to 176,000 vehicles. Read the rest of this transcript for free on seekingalpha.com