<PAGE>
                                 
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                               Revision 3, 2/12/96
                                    FORM 10-Q


          [ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

               For the quarterly period ended: December 31, 1995.

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                        For the transition period from to


                         Commission file number 0-18083


                             Williams Controls, Inc.
             (Exact name of registrant as specified in its charter)

          Delaware                                                84-1099587
(State or other jurisdiction of                                (I.R.S. Employer
incorporation or organization)                               Identification No.)

      14100 SW 72nd Avenue
          Portland, Oregon                                               97224
(Address of principal executive office)                               (zip code)

               Registrant's telephone number, including area code:
                                 (503) 684-8600


         Indicate by check mark whether the registrant (1) has filed all reports
         required to be filed by Section 13 or 15(d) of the Securities  Exchange
         Act of 1934 during the preceding 12 months (or for such shorter  period
         that the  registrant  was required to file such  reports),  and (2) has
         been subject to such filing requirements for the past 90 days.
                                    Yes X No

         The number of shares outstanding of the registrant's common stock as of
         January 15, 1996: 17,224,287.


<PAGE>


                             WILLIAMS CONTROLS, INC.

                                      Index


                                                                           Page
                                                                          Number

Part I.   Financial Information

  Item 1.       Financial Statements

                Consolidated Balance Sheets, December 31, 1995 (unaudited)
                and September 30, 1995                                         1

                Unaudited Consolidated Statement of Stockholders' Equity,
                  three months ended December 31, 1995                         2

                Unaudited Consolidated Statements of Operations,
                  three months ended December 31, 1995 and 1994                3

                Unaudited Consolidated Statements of Cash Flows,
                  three months ended December 31, 1995 and 1994                4

                Notes to Unaudited Consolidated Financial Statements         5-8

  Item 2.       Management's Discussion and Analysis
                  of Financial Condition and Results
                  of Operations                                             9-10


Part II.  Other Information

  Item 6.       Exhibits and Reports on Form 8-K                              11



                    Signature Page                                            12

<PAGE>
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)         Williams Controls, Inc.
<TABLE>
<CAPTION>
                                                                              December 31,           September 30,
                                                                                      1995                    1995
                                                                               (unaudited)
                                                                               -----------           -------------
<S>                                                                               <C>                     <C>
Assets
   Current Assets:
     Cash                                                                         $    790                $  1,653
     Accounts receivable, net                                                       11,442                  10,521
     Inventories                                                                    14,284                  12,987
     Other                                                                           1,117                     627
                                                                                    ------                 -------
           Total current assets                                                     27,633                  25,788
                                                                                    ------                  ------

   Investment in affiliate                                                           1,048                   1,118

   Property, plant and equipment:
     Land and land improvements                                                      2,723                   2,713
     Buildings                                                                       9,252                   9,221
     Machinery and equipment                                                         9,556                   9,169
     Office furniture and equipment                                                  1,436                   1,426
                                                                                    ------                  ------
                                                                                    22,967                  22,529
     Less accumulated depreciation and amortization                                  4,036                   3,731
                                                                                    ------                  ------
                                                                                    18,931                  18,798
                                                                                    ------                  ------
   Other assets                                                                      1,139                   1,478
                                                                                    ------                  ------
                                                                                  $ 48,751                $ 47,182
                                                                                    ======                  ======
Liabilities and Stockholders' Equity

   Current Liabilities:
     Current portion of long-term debt                                            $    441                $    462
     Accounts payable and accrued expenses                                           6,385                   7,419
                                                                                    ------                  ------
           Total current liabilities                                                 6,826                   7,881
                                                                                    ------                  ------
   Long-term debt                                                                   19,546                  18,112
   Other liabilities                                                                 2,222                   2,132
   Minority interest in consolidated subsidiaries                                      775                     764

   Stockholders' equity:
     Preferred stock of $.01 par value, 50,000,000 shares authorized                     -                        -
     Common stock of $.01 par value, 50,000,000 shares
       authorized, 17,319,987 and 17,264,987 shares issued                             173                     173
     Additional paid-in capital                                                      9,122                   9,023
     Unearned ESOP shares                                                            (630)                   (630)
     Pension liability adjustment                                                    (273)                   (273)
     Retained earnings                                                              10,990                  10,000
                                                                                    ------                  ------
                                                                                    19,382                  18,293
                                                                                    ------                  ------
                                                                                  $ 48,751                $ 47,182
                                                                                    ======                  ======
</TABLE>
        The accompanying notes are an integral part of these statements.
                                        1
<PAGE>

Consolidated Statements of Stockholders' Equity
Unaudited
(Dollars in thousands, except per share amounts)         Williams Controls, Inc.
<TABLE>
<CAPTION>


                                          Number of               Additional    Unearned       Pension
                                             Shares      Common      Paid-in        ESOP     Liability    Retained   Stockholders'
                                             Issued       Stock      Capital      Shares    Adjustment    Earnings          Equity
                                         ----------   ---------  -----------  ----------    ----------    --------   -------------
<S>                                      <C>              <C>         <C>       <C>            <C>         <C>             <C>    
Balance, September 30, 1995              17,264,987       $ 173       $9,023    $  (630)       $ (273)     $10,000         $18,293


Issuance of shares under
   employee benefit plans                     5,000           -           15           -             -           -              15

Issuance of shares upon
   exercise of warrants                      50,000           -           84           -             -           -              84

Net earnings                                      -           -            -           -             -         990             990
                                         ----------        ----        -----      -----         -----       ------          ------

Balance, December 31, 1995               17,319,987       $ 173       $9,122     $ (630)       $ (273)     $10,990         $19,382
                                         ==========        ====        =====      ======        ======      ======          ======
</TABLE>





        The accompanying notes are an integral part of these statements.

                                        2

<PAGE>


Consolidated Statements of Operations
Unaudited
(Dollars in thousands, except per share amounts)         Williams Controls, Inc.

<TABLE>
<CAPTION>


                                                                        Three months ended      Three months ended
                                                                              December 31,            December 31,
                                                                                      1995                    1994
                                                                        ------------------       -----------------

<S>                                                                               <C>                     <C>    
Net sales                                                                         $ 16,428                $ 11,576
Cost of sales                                                                       12,024                   8,242
                                                                                    ------                  ------
Gross margin                                                                         4,404                   3,334
                                                                                    ------                  ------

Operating expenses:
  Research and development                                                             507                     275
  Selling                                                                              740                     480
  Administrative                                                                     1,014                     536
                                                                                    ------                  ------
                                                                                     2,261                   1,291
                                                                                    ------                  ------

Earnings from operations                                                             2,143                   2,043
                                                                                    ------                  ------

Other (income) expense:
  Interest income, affiliate                                                             -                   (147)
  Interest expense                                                                     464                     411
  Equity interest in loss of affiliate                                                  70                     216
                                                                                   -------                  ------
                                                                                       534                     480
                                                                                    ------                  ------

Earnings before income taxes                                                         1,609                   1,563
Income taxes                                                                           608                     575
                                                                                    ------                  ------

Earnings before minority interest                                                    1,001                     988

Minority interest in net earnings of consolidated subsidiaries                          11                       -
                                                                                   -------                --------

Net earnings                                                                      $    990                $    988
                                                                                    ======                  ======

Earnings per common share                                                         $    .06                $    .06
                                                                                   =======                 =======

</TABLE>


        The accompanying notes are an integral part of these statements.

                                        3

<PAGE>


Consolidated Statements of Cash Flows
Unaudited
(Dollars in thousands)                                   Williams Controls, Inc.

<TABLE>
<CAPTION>


                                                                        Three months ended      Three months ended
                                                                              December 31,            December 31,
                                                                                      1995                    1994
                                                                        ------------------      ------------------
<S>                                                                                <C>                     <C>
Cash flows from operations:
   Net earnings                                                                    $   990                 $   988
   Non-cash adjustments to net earnings:
      Depreciation and amortization                                                    428                     281
      Equity interest in loss of affiliate                                              70                     216
      Minority interest in earnings of consolidated subsidiaries                        11                       -
  Changes in working capital items net of the effect of acquisitions:
      Receivables, net                                                               (921)                   (895)
      Inventories                                                                  (1,297)                 (1,367)
      Accounts payable and accrued expenses                                        (1,034)                     869
      Other                                                                          (184)                 (1,135)
                                                                                   -------                 -------

      Net cash used for operations                                                 (1,937)                 (1,043)
                                                                                    ------                 -------

Cash flows from investing:
   Payments for property, plant and equipment                                        (438)                   (316)
                                                                                    ------                  ------

   Net cash used for investing                                                       (438)                   (316)
                                                                                    ------                  ------

Cash flows from financing:
   Net borrowings under revolving loan                                                   -                   1,129
   Payments of long-term debt                                                         (57)                   (247)
   Proceeds from long-term debt                                                      1,500                     565
   Payments of capital leases                                                         (30)                    (33)
   Payment of debt issuance cots                                                         -                    (34)
   Proceeds from stock issuances                                                        99                       -
                                                                                    ------                 -------

   Net cash provided by financing                                                    1,512                   1,380
                                                                                    ------                  ------

Net increase (decrease) in cash                                                      (863)                      21

Cash at beginning of period                                                          1,653                     242
                                                                                    ------                  ------

Cash at end of period                                                              $   790                 $   263
                                                                                    ======                  ======

</TABLE>


        The accompanying notes are an integral part of these statements.

                                        4

<PAGE>


Notes to Unaudited Consolidated Financial Statements
Three Months ended December 31, 1995 and 1994
(Dollars in thousands, except per share amounts)         Williams Controls, Inc.


1.     Organization

       The Company includes its  wholly-owned  subsidiaries,  Williams  Controls
       Industries,  Inc.; Kenco Williams,  Inc.; NESC Williams,  Inc.;  Williams
       Technologies,  Inc.;  Williams World Trade,  Inc.;  Williams  Automotive,
       Inc.;  Aptek Williams,  Inc.;  Agrotec  Williams,  Inc. and its 80% owned
       subsidiaries Hardee Williams, Inc. and Waccamaw Wheel Williams, Inc.


2.     The Interim Consolidated Financial Statements

       The interim  consolidated  financial statements have been prepared by the
       Company  and,  in  the  opinion  of  management,   reflect  all  material
       adjustments  which are  necessary to a fair  statement of results for the
       interim periods presented.  Certain  information and footnote  disclosure
       made in the last  annual  report  on Form 10-K  have  been  condensed  or
       omitted  for the  interim  consolidated  statements.  Certain  costs  are
       estimated  for the full year and  allocated to interim  periods  based on
       activity associated with the interim period. Accordingly,  such costs are
       subject to year-end  adjustment.  It is the Company's  opinion that, when
       the interim  consolidated  statements  are read in  conjunction  with the
       September  30,  1995  annual  report on Form 10-K,  the  disclosures  are
       adequate to make the information  presented not  misleading.  The interim
       consolidated financial statements include the accounts of the Company and
       its subsidiaries.  All significant intercompany accounts and transactions
       have been eliminated.


3.     Earnings per Share

       Earnings per share are based on the weighted average number of shares and
       common stock  equivalent  shares  outstanding  during the period assuming
       proceeds  therefrom  are used to  purchase  common  stock at the  average
       market  price during the period  (treasury  stock  method).  The weighted
       average number of common shares used in computation of earnings per share
       was  17,900,000  for  the  three  months  ended  December  31,  1995  and
       17,500,000  for the three  months ended  December 31, 1994.  Common stock
       equivalents  which are  antidilutive are not included in the earnings per
       share calculation.





                                        5

<PAGE>



Notes to Unaudited Consolidated Financial Statements
Three Months ended December 31, 1995 and 1994
(Dollars in thousands, except per share amounts)         Williams Controls, Inc.



4.     Inventories
<TABLE>
<CAPTION>

                                                           December 31,                        September 30,
                                                                   1995                                 1995
       <S>                                                      <C>                                  <C>    
       Raw material                                             $ 7,141                              $ 6,401
       Work-in-process                                            1,145                                1,031
       Finished goods                                             5,998                                5,555
                                                                 ------                               ------

                                                                $14,284                              $12,987
                                                                 ======                               ======
</TABLE>

       Inventories  are  valued at the lower of cost  (first-in,  first  out) or
       market. Finished goods include component parts and finished product ready
       for shipment.


5.     Investment in Affiliate

       During  1994 the  Company  provided a $7,000  loan to Ajay  Sports,  Inc.
       ("Ajay")  for  Ajay's  operating   subsidiary.   Ajay   manufactures  and
       distributes  golf  and  billiard   accessories   primarily  to  retailers
       throughout the United States. In July 1995 Ajay obtained an $8,500 credit
       facility  (subsequently  increased to $13,500 in October  1995) which was
       used to pay  off the  loan  provided  by the  Company.  The  Company  has
       guaranteed Ajay's credit facility and is charging Ajay a fee of 1/2 of 1%
       per annum of the outstanding loan amount for providing this guaranty. The
       Chairman and  President of the Company is also  Chairman and President of
       Ajay, and has guaranteed  Ajay's obligation to the Company under the loan
       guaranty.

       In exchange  for the Company  providing  interim  financing,  the Company
       received  an option to purchase  up to  15,228,520  shares of Ajay common
       stock (which would represent approximately 45% of Ajay's then outstanding
       common  stock)  and  received   manufacturing   rights  in  certain  Ajay
       facilities through 2002, under a joint venture agreement. At December 31,
       1995 the Company has vested options to acquire  11,110,873 shares of Ajay
       common stock at prices  ranging  from $.34 to $.50 per share.  In October
       1994 the Company  exercised  options to acquire  4,117,647 shares of Ajay
       common  stock  through a  reduction  in the loan in the amount of $1,400,
       resulting  in  the  Company  owning  approximately  18%  of  Ajay's  then
       outstanding  common  stock.  The  investment  in Ajay is  recorded  as an
       investment  in affiliate in the  Consolidated  Balance  Sheets net of the
       Company's  equity  interest of $352 in Ajay's losses since  acquiring the
       investment. The Company is required to account for the investment in Ajay
       on the  equity  method  due to  common  ownership  by  the  Chairman  and
       President of the Company who is also Chairman and President of Ajay.


                                        6

<PAGE>



Notes to Unaudited Consolidated Financial Statements
Three Months ended December 31, 1995 and 1994
(Dollars in thousands, except per share amounts)         Williams Controls, Inc.



6.     Debt

       In July 1995 the Company obtained a $30,000 credit facility  comprised of
       a three year  revolving loan which carries an interest rate at the option
       of the Company at either the bank's prime rate or the Interbank  Offering
       Rate (IBOR) plus 2% to 3% depending  upon certain  financial  ratios.  At
       December 31, 1995 the Company had borrowed  approximately  $16,500  under
       the new credit  facility with interest at 7.5% which is IBOR plus 2%. The
       Company has pledged substantially all of its assets as collateral for the
       credit facility.  The Company is required to maintain a minimum net worth
       and maintain certain financial  ratios.  The loan agreement also contains
       certain  restrictions that limit  acquisitions,  investments,  payment of
       dividends, and capital expenditures.


7.     Stock Repurchase Program

       In January 1996 the Company initiated a stock repurchase program of up to
       one  million  shares  of  the  Company's  common  stock  in  open  market
       transactions.  Under this program the Company has acquired  approximately
       95,000 shares at an average price of $2.80 per share.


                                        7

<PAGE>



Notes to Unaudited Consolidated Financial Statements
Three Months ended December 31, 1995 and 1994
(Dollars in thousands, except per share amounts)         Williams Controls, Inc.



8.     Segment Information
<TABLE>
<CAPTION>

                                                                              1995                    1994
                                                                          --------                --------
       <S>                                                                <C>                     <C>    
       Net sales by classes of similar products
       Heavy vehicle components                                           $  8,214                 $ 7,687
       Automotive accessories                                                4,384                   3,889
       Landscape maintenance equipment                                       2,357                       -
       Electrical components                                                 1,473                       -
                                                                            ------                  ------
                                                                            16,428                  11,576
                                                                            ======                  ======

       Earnings from operations
       Heavy vehicle components                                              1,785                   1,855
       Automotive accessories                                                   39                     188
       Landscape maintenance equipment                                         166                       -
       Electrical components                                                   153                       -
                                                                            ------                  ------
                                                                             2,143                   2,043
                                                                            ======                  ======

       Identifiable assets
       Heavy vehicle components                                             18,606                  26,996
       Automotive accessories                                               13,408                   8,044
       Landscape maintenance equipment                                       9,060                       -
       Electrical components                                                 7,677                       -
                                                                            ------                  ------
       Total assets                                                         48,751                  35,040
                                                                            ======                  ======

       Capital expenditures
       Heavy vehicle components                                                100                      99
       Automotive accessories                                                   49                     217
       Landscape maintenance equipment                                         189                       -
       Electrical components                                                   100                       -
                                                                            ------                  ------
                                                                               438                     316
                                                                           =======                 =======

       Depreciation and amortization
       Heavy vehicle components                                                256                     240
       Automotive accessories                                                   65                      41
       Landscape maintenance equipment                                          48                       -
       Electrical components                                                    59                       -
                                                                            ------                  ------
                                                                          $    428                $    281
                                                                           =======                 =======
</TABLE>

                                        8

<PAGE>


Management's Discussion and Analysis of
Financial Condition and Results of Operations
(Dollars in thousands, except per share amounts)         Williams Controls, Inc.



Financial Condition, Liquidity and Capital Resources

On December  31, 1995 the  Company  had working  capital of $20,807  compared to
$17,907 at September  30, 1995.  The current  ratio on December 31, 1995 was 4.0
compared with 3.3 at September 30, 1995.  During the three months ended December
31, 1995, the Company's  accounts  receivable  increased by $921 and inventories
increased  by $1,297 due  primarily  to a 42% increase in sales for the quarter.
The increase in accounts receivable and inventories was financed by increases in
accounts payable, accrued expenses and debt financing.

In July 1995 the Company obtained a $30,000 credit facility comprised of a three
year  revolving loan which carries an interest rate at the option of the Company
at either the bank's prime rate or the Interbank Offering Rate (IBOR) plus 2% to
3% depending upon certain financial ratios. At December 31, 1995 the Company had
borrowed  approximately  $16,500 under the new credit  facility with interest at
7.9% which is IBOR plus 2%. The  Company has  pledged  substantially  all of its
assets as  collateral  for the  credit  facility.  The  Company is  required  to
maintain a minimum net worth and maintain  certain  financial  ratios.  The loan
agreement  also  contains   certain   restrictions   that  limit   acquisitions,
investments, payment of dividends, and capital expenditures.

During 1994 the Company provided a $7,000 loan to Ajay Sports, Inc. ("Ajay") for
Ajay's operating subsidiary. Ajay manufactures and distributes golf and billiard
accessories  primarily to retailers  throughout the United States.  In July 1995
Ajay obtained an $8,500 credit  facility  (subsequently  increased to $13,500 in
October  1995) which was used to pay off the loan  provided by the Company.  The
Company has guaranteed  Ajay's credit facility and is charging Ajay a fee of 1/2
of 1% per annum of the outstanding loan amount for providing this guaranty.  The
Chairman and  President of the Company is also  Chairman and  President of Ajay,
and has guaranteed Ajay's obligation to the Company under the loan guaranty.

In exchange for the Company providing interim financing, the Company received an
option to purchase up to  15,228,520  shares of Ajay common  stock  (which would
represent  approximately  45% of  Ajay's  then  outstanding  common  stock)  and
received  manufacturing  rights in certain Ajay facilities through 2002, under a
joint venture agreement.  At December 31, 1995 the Company has vested options to
acquire  11,110,873  shares of Ajay common stock at prices  ranging from $.34 to
$.50 per  share.  In  October  1994 the  Company  exercised  options  to acquire
4,117,647  shares of Ajay common  stock  through a reduction  in the loan in the
amount of $1,400,  resulting in the Company owning  approximately  18% of Ajay's
then  outstanding  common  stock.  The  investment  in  Ajay is  recorded  as an
investment in affiliate in the Consolidated  Balance Sheets net of the Company's
equity  interest of $352 in Ajay's losses since  acquiring the  investment.  The
Company is required to account for the  investment  in Ajay on the equity method
due to common ownership by the Chairman and President of the Company who is also
Chairman and President of Ajay.






                                        9

<PAGE>


Management's Discussion and Analysis of
Financial Condition and Results of Operations
(Dollars in thousands, except per share amounts)         Williams Controls, Inc.



Financial Condition, Liquidity and Capital Resources (continued)

The Company  anticipates  that cash generated from operations and debt financing
will  be  sufficient  to  satisfy  working   capital  and  capital   expenditure
requirements  for the  foreseeable  future and will  provide  the  Company  with
financial  flexibility to respond quickly to business  opportunities,  including
opportunities for growth through internal development or through strategic joint
ventures or acquisitions.


Results of Operations
Three months ended December 31, 1995 compared to the three months ended December
31, 1994.
(Dollars in thousands, except per share amounts)

SALES:  Sales for the three months ended December 31, 1995 were $16,428 compared
to sales of $11,576 for the three months  ending  December 31, 1994, an increase
of 42%. Heavy vehicle component sales were $8,214, an increase of 7% compared to
the same period in the prior year. Automotive  accessories sales were $4,384 for
the three  months ended  December  31, 1995,  an increase of 13% compared to the
same period in the prior year.  Acquisitions  made during 1995 accounted for 23%
of sales for the three months ended  December  31, 1995.  Landscape  maintenance
equipment sales were $2,357 and electrical component sales were $1,473.

GROSS  MARGIN:  Gross margin as a percentage of sales for the three months ended
December 31, 1995 was 27% compared to a gross margin of 29% for the three months
ended  December 31, 1994.  The decrease in gross margin as a percentage of sales
is due primarily to the  acquisitions  which have lower margin product lines and
the competitive automotive accessory market.

OPERATING  EXPENSES:  Operating expenses for the three months ended December 31,
1995 were $2,261 or 14% of sales compared to $1,291 or 11% of sales for the same
period in the prior year. The increase in operating expenses is due primarily to
the  administrative   and  additional  selling  expenses   associated  with  the
acquisitions made during 1995.

OTHER  EXPENSES:  Interest  expense for the three months ended December 31, 1995
was $464  compared to $411 for the three  months ended  December  31, 1994.  The
increase  in  interest  expense is due  primarily  to debt  incurred  to finance
acquisitions which have been offset by lower interest rates. The equity interest
in the loss of affiliate of $70 represents the Company's 18% ownership  interest
in the estimated losses of Ajay for the quarter ending December 31, 1995.

NET  EARNINGS:  Net earnings  for the three months ended  December 31, 1995 were
$990 or $.06 per share compared to $988 or $.06 per share for the same period in
the prior year.


                                       10

<PAGE>



Part II.  Other Information                              Williams Controls, Inc.



Item 6.  Exhibits and Reports on Form 8-K

       (a)     Exhibits

               None.

       (b)     Reports on Form 8-K

               None.




                                       11

<PAGE>



                             WILLIAMS CONTROLS, INC.

                                    Signature


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.




                                                         WILLIAMS CONTROLS, INC.




                                  By:/s/ Thomas W. Itin
                                     -------------------------------------------
                                     Thomas W. Itin, Chairman, President and CEO





                                  By:/s/ Dale J. Nelson
                                     -------------------------------------------
                                     Dale J. Nelson, Chief Financial Officer



February 10, 1996

                                       12

<PAGE>