# UNITED STATESSECURITIES AND
EXCHANGE COMMISSIONWashington, D.C. 20549

# 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: March 31, 2003

# Commission file number
0-18083

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

| | Delaware(State or other jurisdiction ofincorporation or organization)        |  | 84-1099587(I.R.S. EmployerIdentification No.) | 
| | ---------------------------------------------------------------------------- |  | --------------------------------------------- | 
| |                                                                              |  |                                               | 
| | 14100 SW 72nd Avenue,Portland, Oregon(Address of principal executive office) |  | 97224(zip code)                               | 

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

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 [   ]

Indicate by check mark whether the
registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act)

Yes [   ] No [X]

The
number of shares outstanding of the registrants common stock at April 30, 2003:
20,125,492

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# Williams Controls, Inc. March 31, 2003 Table of Contents

|                                                                                                                  | PageNumber
|----------------------------------------------------------------------------------------------------------------- | ----------
|Part I. Financial Information                                                                                     |           
|Item 1. Financial Statements (unaudited)                                                                         
|Consolidated Balance Sheets, March 31, 2003 and
            September 30, 2002                                    | 1         
|Consolidated Statements of Operations, three and six months            ended March 31, 2003 and 2002              | 2         
|Consolidated Statements of Cash Flows, six months ended            March 31, 2003 and 2002                        | 3         
|Notes to Consolidated Financial Statements                                                                        | 4         
|Item 2.  Management's Discussion and Analysis of Financial Condition
                   and Results of Operations | 12        
|Item 3.  Quantitative and Qualitative Disclosures About Market Risk                                               | 20        
|Item 4.  Controls and Procedures                                                                                  | 20        
|Part II. Other Information                                                                                       
|Item 1.  Legal Proceedings                                                                                        | 21        
|Item 2.  Changes in Securities and Use of Proceeds                                                                | 21        
|Item 3.  Defaults Upon Senior Securities                                                                          | 21        
|Item 4.  Submission of Matters to a Vote of Security Holders                                                      | 21        
|Item 5.  Other Information                                                                                        | 21        
|Item 6.  Exhibits and Reports on Form 8-K                                                                         | 21        
|Signature Page                                                                                                    | 23        

---

# Part I

# Item 1. Financial
Statements

# Williams Controls, Inc. Consolidated Balance
Sheets(Dollars in thousands,
except share and per share information)(Unaudited)

|ASSETS                                                                                                                                                                            | March 31,2003 | September 30,2002
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------- | -----------------
|Current Assets:                                                                                                                                                                   |               |                  
|Cash and cash equivalents                                                                                                                                                         | $      159    | $      829       
|Trade and other accounts receivable, less allowance of
      $291 and $334 at March 31, 2003 and September 30
      2002, respectively                                            | 8,227         | 8,764            
|Inventories, net                                                                                                                                                                  | 5,123         | 4,940            
|Prepaid expenses and other current assets                                                                                                                                         | 716           | 624              
|Total current assets                                                                                                                                                              | 14,225        | 15,157           
|Property, plant, and equipment, net                                                                                                                                               | 10,336        | 10,530           
|Other assets, net                                                                                                                                                                 | 355           | 635              
|Total assets                                                                                                                                                                      | $ 24,916      | $ 26,322         
|LIABILITIES AND SHAREHOLDERS' DEFICIT                                                                                                                                            
|Current Liabilities:                                                                                                                                                             
|Accounts payable                                                                                                                                                                  | $   4,111     | $   5,326        
|Accrued expenses                                                                                                                                                                  | 6,329         | 6,856            
|Current portion of long-term debt and capital leases                                                                                                                              | 2,483         | 4,084            
|Total current liabilities                                                                                                                                                         | 12,923        | 16,266           
|Long-term debt and capital lease obligations                                                                                                                                      | 1,122         | 1,483            
|Employee benefit obligations                                                                                                                                                      | 7,217         | 6,293            
|Subordinated debt                                                                                                                                                                 | 1,989         | 2,139            
|Mandatory redeemable Convertible Series B Preferred Stock, net
   (150,000 issued and outstanding at March 31, 2003 and
   September 30, 2002)                                    | 14,294        | 13,109           
|Commitments and contingencies                                                                                                                                                    
|Shareholders' Deficit:
   Preferred stock ($.01 par value, 50,000,000 authorized)
      Series A-1 (77,550 issued and outstanding at March 31,
      2003 and September 30, 2002) | 1             | 1                
|Series A (650 issued and outstanding at March 31, 2003
      and September 30, 2002)                                                                                              | --            | --               
|Common stock ($.01 par value, 50,000,000 authorized; 20,125,492
      and 19,928,522 issued and outstanding at March 31, 2003 and
      September 30, 2002)                       | 201           | 199              
|Additional paid-in capital                                                                                                                                                        | 23,687        | 23,559           
|Accumulated deficit                                                                                                                                                               | (32,116)      | (32,325)         
|Treasury stock (130,200 shares at March 31, 2003 and
      September 30, 2002)                                                                                                    | (377)         | (377)            
|Other comprehensive loss - Pension liability adjustment                                                                                                                           | (4,025)       | (4,025)          
|Total shareholders' deficit                                                                                                                                                       | (12,629)      | (12,968)         
|Total liabilities and shareholders' deficit                                                                                                                                       | $ 24,916      | $ 26,322         

See accompanying notes
to Unaudited Consolidated Financial Statements.

1

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# Williams Controls, Inc.
Consolidated
Statements of Operations
(Dollars in thousands,
except share and per share information)
(unaudited)

|                                                                    | Three Months EndedMarch 31, | Six Months EndedMarch 31,
|------------------------------------------------------------------- | --------------------------- | -------------------------
|
|Net sales                                                           | $        13,173             | $        12,848          
|Cost of sales                                                       | 10,916                      | 9,358                    
|Gross margin                                                        | 2,257                       | 3,490                    
|Operating expenses (income):                                       
|Research and development                                            | 978                         | 695                      
|Selling                                                             | 361                         | 360                      
|Administration                                                      | 1,277                       | 1,636                    
|Gain on settlement with customer                                    | (951)                       | --                       
|Loss on impairment of investment - Ajay                             | --                          | 3,565                    
|Total operating expenses                                            | 1,665                       | 6,256                    
|Income (loss) from continuing operations                            | 592                         | (2,766)                  
|Other (income) expenses:                                           
|Interest income                                                     | (21)                        | --                       
|Interest expense                                                    | 158                         | 632                      
|Other income, net                                                   | (50)                        | (15)                     
|Total other (income) expenses                                       | 87                          | 617                      
|Income (loss) from continuing operations before income taxes        | 505                         | (3,383)                  
|Income tax benefit                                                  | --                          | --                       
|Net income (loss) from continuing operations                        | 505                         | (3,383)                  
|Discontinued operations:                                           
|Gain from settlement of obligations                                 | 120                         | --                       
|Net income (loss)                                                   | 625                         | (3,383)                  
|Preferred dividends and accretion of Series B Preferred Stock       | (662)                       | (293)                    
|Net income (loss) allocable to common shareholders                  | $            (37)           | $       (3,676)          
|Income (loss) per common share from continuing operations - basic   | $         (0.01)            | $         (0.18)         
|Income per common share from discontinued operations - basic        | 0.01                        | --                       
|Net income (loss) per common share - basic                          | $            0.00           | $         (0.18)         
|Weighted average shares used in per share calculation - basic       | 20,125,492                  | 19,928,522               
|Income (loss) per common share from continuing operations - diluted | $         (0.01)            | $         (0.18)         
|Income per common share from discontinued operations - diluted      | 0.01                        | --                       
|Net income (loss) per common share - diluted                        | $            0.00           | $         (0.18)         
|Weighted average shares used in per share calculation - diluted     | 20,125,492                  | 19,928,522               

See accompanying notes
to Unaudited Consolidated Financial Statements.

2

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

|                                                                                                    | Six Months EndedMarch 31, |           
|--------------------------------------------------------------------------------------------------- | ------------------------- | ----------
|
|Cash flows from operating activities:                                                               |                           |           
|Net income (loss)                                                                                   | $ 1,520                   | $(4,048)  
|Adjustments to reconcile net income (loss) to net cash provided by
 (used in) operating activities:
|Gain from discontinued operations                                                                   | (120)                     | (417)     
|(Gain) loss from sale of fixed assets                                                               | 78                        | (45)      
|Depreciation                                                                                        | 818                       | 893       
|Amortization                                                                                        | 17                        | 738       
|Loss from impairment of investment - Ajay                                                           | --                        | 3,565     
|Gain on settlement with customer                                                                    | (151)                     | --        
|Gain from settlement of liabilities                                                                 | (275)                     | --        
|Changes in operating assets and liabilities                                                        
|Receivables, net                                                                                    | 721                       | (483)     
|Inventories                                                                                         | (183)                     | 551       
|Accounts payable and accrued expenses                                                               | (1,173)                   | (851)     
|Other                                                                                               | 1,095                     | 88        
|Net cash provided by (used in) operating activities                                                 | 2,347                     | (9)       
|Cash flows from investing activities:                                                              
|Purchases of property, plant and equipment                                                          | (798)                     | (445)     
|Proceeds from sale of fixed assets                                                                  | 7                         | 45        
|Proceeds from collection on note receivable                                                         | 5                         | --        
|Net cash used in investing activities                                                               | (786)                     | (400)     
|Cash flows from financing activities:                                                              
|Net (payments) borrowings of debt and lease obligations                                             | (1,962)                   | 640       
|Net change in book overdraft                                                                        | --                        | (193)     
|Repayment of subordinated debt                                                                      | (150)                     | --        
|Financing costs related to recapitalization                                                         | (119)                     | --        
|Net cash (used in) provided by financing activities                                                 | (2,231)                   | 447       
|Net increase (decrease) in cash and cash equivalents                                                | (670)                     | 38        
|Cash and cash equivalents at beginning of period                                                    | 829                       | --        
|Cash and cash equivalents at end of period                                                          | $    159                  | $      38 
|Supplemental disclosure of cash flow information:                                                  
|Interest paid                                                                                       | $    304                  | $    324  
|Income taxes paid (refund)                                                                          | $  (300)                  | $       --
|Supplemental disclosure of non-cash investing and financing activities:                            
|Preferred dividends accrued but not paid and Series B accretion                                     | $ 1,311                   | $    534  
|Issuance of common stock for services previously accrued                                            | $    130                  | $       --
|Issuance of notes receivable for sale of property                                                   | $      89                 | $       --
|Debt modification fee accrued, not paid                                                             | $       --                | $    225  
|Accrued fees/interest converted to debt                                                             | $       --                | $    397  

See accompanying
notes to Unaudited Consolidated Financial Statements.

3

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# Williams Controls, Inc.Notes to Consolidated Financial Statements
Three and Six Months
ended March 31, 2003 and 2002
(Dollars in thousands, except
share and per share amounts)(Unaudited)

Cautionary Statement: This report,
including these Notes to Unaudited Consolidated Financial Statements, contains
forward-looking statements within the meaning of the Private Securities Litigation Reform
Act of 1995. Forward-looking statements include, without limitation, those statements
relating to development of new products, the financial condition of the Company, the
ability to increase distribution of the Companys products, integration of businesses
the Company acquires, and disposition of any current business of the Company. These
forward-looking statements are not guarantees of future performance and involve risks,
uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes
and results may differ materially from what is anticipated or forecasted in these
forward-looking statements due to numerous factors, including, but not limited to, the
ability of the Company to generate or obtain sufficient working capital to continue its
operations, changes in demand for the Companys products, the timing of customer
orders and deliveries, and the impact of competitive products and pricing. In addition,
such statements could be affected by general industry and market conditions and growth
rates, and general domestic and international economic conditions.

# Note 1. Organization

Williams Controls, Inc., including
its wholly-owned subsidiaries, Williams Controls Industries, Inc. (Williams);
Aptek Williams, Inc. (Aptek); Premier Plastic Technologies, Inc.
(PPT); ProActive Acquisition Corporation (ProActive); WMCO-Geo,
Inc. (GeoFocus); NESC Williams, Inc. (NESC); Williams
Technologies, Inc. (Technologies); Williams World Trade, Inc.
(WWT); Kenco/Williams, Inc. (Kenco); Techwood Williams, Inc.
(TWI); Agrotec Williams, Inc. (Agrotec) and its 80% owned
subsidiaries Hardee Williams, Inc. (Hardee) and Waccamaw Wheel Williams, Inc.
(Waccamaw) are hereinafter referred to as the Company,
we, our, or us.

# Note 2. Basis of
Presentation

The accompanying unaudited interim
consolidated financial statements have been prepared by the Company and, in the opinion of
management, reflect only normal recurring adjustments, except as otherwise
disclosed in the Notes to Unaudited Consolidated Financial Statements, which are necessary
to present fairly the Companys financial position as of March 31, 2003 and the
results of operations and cash flows for the three and six months ended March 31, 2003 and
2002. The results of operations for the three and six months ended March 31, 2003 are not
necessarily indicative of the results to be expected for the entire fiscal year.

Certain information and footnote
disclosures 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, 2002 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.

The preparation of consolidated
financial statements in conformity with accounting principles generally accepted in the
United States requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosures of contingent assets and
liabilities at the date of the consolidated financial statements and the reported amounts
of revenues and expenses during the reported periods. On an ongoing basis, the Company
evaluates its estimates, including those related to its allowance for doubtful accounts,
impairment of long-lived assets, warranties, pensions and post-retirement benefit
obligations, income taxes, and commitments and contingencies. Actual results could differ
from these estimates and assumptions.

Certain reclassifications of amounts
reported in the prior period financial statements have been made to conform to
classifications used in the current period financial statements.

4

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# Note 3. Accounting for
stock based compensation

The Company has elected to account
for its stock-based compensation plans using the intrinsic value-based method under
Accounting Principles Board Opinion No. 25 (APB 25). Based on the provisions of Statement
of Financial Accounting Standards (SFAS) No. 148, Accounting for Stock-Based
Compensation  Transition and Disclosure, and SFAS No. 123, Accounting
for Stock-Based Compensation, the Company has computed, for pro forma disclosure
purposes, net income (loss) and net income (loss) per share as if the fair value based
method of accounting had been adopted.

For the three and six months ended
March 31, 2003 and 2002, there were no stock option grants. Since no options were granted
in the periods presented, the pro forma effect of compensation expense shown below is
based on recognizing the fair value of stock options issued after December 31, 1994 and in
periods prior to these shown over their average vesting period. If the Company had
accounted for its stock-based compensation plans using the fair value-based method in
accordance with SFAS No. 123, the Companys net income (loss) and net income (loss)
per share would approximate the pro forma disclosures below:

|                                                                                                                             | Three Months EndedMarch 31, | Six Months EndedMarch 31,
|---------------------------------------------------------------------------------------------------------------------------- | --------------------------- | -------------------------
|
|Net income (loss) allocable to common
shareholders as reported                                                               | $    (37)                   | $   (3,676)              
|Deduct: Total stock-based employee compensation
expense determined under fair value based method,
net of related tax effects | (31)                        | (87)                     
|Pro forma net income (loss)                                                                                                  | $    (68)                   | $   (3,763)              
|Earnings per share:
     Basic - as reported                                                                                 | $        0.00               | $          (0.18)        
|Basic - pro forma                                                                                                            | $        0.00               | $          (0.19)        
|Diluted - as reported                                                                                                        | $        0.00               | $          (0.18)        
|Diluted - pro forma                                                                                                          | $        0.00               | $          (0.19)        

# Note 4. Comprehensive
Income (Loss)

SFAS No. 130, Reporting
Comprehensive Income, requires companies to report a measure of all changes in
equity except those resulting from investments by owners and distributions to owners.
Total comprehensive income (loss) for the three months ended March 31, 2003 and 2002 was
$625 and ($3,383), respectively, and for the six months ended March 31, 2003 and 2002 was
$1,520 and ($4,048) respectively, and consisted solely of net income (loss). As of March
31, 2003, accumulated other comprehensive loss was ($4,025) and consisted of accumulated
benefit obligations in excess of the plan assets for both the Hourly Employees Pension
plan and the Salaried Employees Pension Plan.

# Note 5. Income (Loss)
Per Share

Basic earnings per share
(EPS) and diluted EPS are computed using the methods prescribed by SFAS No.
128, Earnings Per Share. Basic EPS is based on the weighted-average number of
common shares outstanding during the period. Diluted EPS is based on the weighted-average
number of common shares outstanding and the dilutive impact of common equivalent shares
outstanding.

5

---

Following is a reconciliation of
basic EPS and diluted EPS from continuing operations:

|                                                                                              | Three Months EndedMarch 31, 2003 | Three Months EndedMarch 31, 2002
|--------------------------------------------------------------------------------------------- | -------------------------------- | --------------------------------
|
|Net income (loss) from continuingoperations                                                   | $       505                      |                                 
|Less - Preferred dividends and accretion
of Series B preferred stock                          | (662)                            |                                 
|Basic EPS -
      Loss allocable to common shareholders from continuing operations            | $  (157)                         | 20,125,492                      
|Effect of dilutive securities -
      Stock options and warrants                              | --                               | --                              
|Preferred Stock - Series A                                                                    | --                               | --                              
|Preferred Stock - Series A-1                                                                  | --                               | --                              
|Preferred Stock - Series B                                                                    | --                               | --                              
|Diluted EPS -
      Loss allocable to common shareholders from continuing operations          | $  (157)                         | 20,125,492                      
|
|
|Net income (loss) from continuing operations                                                  | $      1,400                     |                                 
|Less - Preferred dividends and accretion
for Series B preferred stock                         | (1,311)                          |                                 
|Basic EPS -
      Income (loss) allocable to common
shareholders from continuing
operations   | $      89                        | 20,091,942                      
|Effect of dilutive securities -
      Stock options and warrants                              | --                               | --                              
|Preferred Stock - Series A                                                                    | --                               | --                              
|Preferred Stock - Series A-1                                                                  | --                               | 13,822,727                      
|Preferred Stock - Series B                                                                    | --                               | --                              
|Diluted EPS -
      Income (loss) allocable to common
shareholders from continuing
operations | $      89                        | 33,914,669                      

For the three months ended March 31,
2003, the Company had options, warrants, convertible preferred stock  Series A and
convertible preferred stock  Series B covering 40,953,635 shares that were not
considered in the EPS calculation compared to 27,130,908 shares for the six months ended
March 31, 2003 that were not considered in the dilutive EPS calculation since they would
have been antidilutive. For both the three and six months ended March 31, 2002, the
Company had options, warrants, convertible preferred stock  Series A, and
convertible subordinated debt covering 12,520,873 shares not considered in the dilutive
EPS calculation since they would have been antidilutive.

6

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# Note 6. Inventories

Inventories consist of the following:

|                | March 31,2003 | September 30,2002
|--------------- | ------------- | -----------------
|Raw materials   | $    3,543    | $    3,294       
|Work in process | 595           | 574              
|Finished goods  | 985           | 1,072            
|                | $    5,123    | $    4,940       

# Note 7. Investment in
and Receivables from Affiliate

Previously, the Company had notes and
accounts receivable from Ajay Sports, Inc. (Ajay) with a carrying value of
$3,565, including a $500 note receivable, which was reflected as a reduction in the
Companys shareholders equity. The Companys former chief executive
officer and former Chairman of the Board, Thomas W. Itin, is an officer and shareholder of
Ajay. The investment in and certain loans of the Company to Ajay were guaranteed by Thomas
W. Itin.

The Company evaluated the
realizability of its investment in and receivables from Ajay and based on the
Companys collection efforts determined the investment in and receivables from Ajay
were impaired; accordingly, an impairment loss for the entire carrying value of $3,565 was
recorded in the second quarter of fiscal 2002. Additionally, the Company evaluated the
collectability of the guarantees of Mr. Itin, including the cost of collections and
concluded that these guarantees were worthless.

In November 2002, the Company settled
all claims related to Ajay and Mr. Itin, including previously filed suits in the Circuit
Court for Oakland County, Michigan and the Multnomah Circuit Court for the State of
Oregon. As part of the settlement, the Company retained a $2,500 interest in the notes
receivable owed to the Company by Ajay; however, no amounts have been recorded on the
financial statements for these interests. Additionally, as part of the settlement,
although the Company believed the guarantees of Mr. Itin were enforceable, based on the
Companys evaluation of the ultimate collectability of the guarantees, including the
cost of collections, Mr. Itin was relieved of his guaranty obligation.

# Note 8. Financing
Arrangements  Recapitalization

On July 1, 2002 the Company completed
the previously announced recapitalization transaction with American Industrial Partners
(AIP) whereby an affiliate of AIP invested $13,000, less fees and expenses,
into the Company by acquiring 130,000 shares of the Companys newly authorized Series
B Preferred Stock, 15% Redeemable Convertible Series (Series B Preferred). As a result of
the transaction, AIP is entitled to and has elected a majority of the members of the
Companys Board of Directors. Along with the investment by AIP, an investor group
that held $2,000 of the Companys 12% secured Subordinated Debentures exchanged those
securities for $2,000 of Series B Preferred. As additional elements of the
recapitalization transaction, the Company (i) entered into a new five-year revolving and
term loan agreement with its existing primary lender, Wells Fargo Credit, Inc.
(Wells); (ii) repaid from the cash proceeds of sale of Series B Preferred the
remaining $3,000 face amount of 12% secured subordinated debentures, after giving
consideration to the $2,000 of debentures converted to Series B Preferred; (iii)
eliminated the conversion feature, increased the interest rate to 12.0% (further
increasing to 15.0% in July 2003) and extended the maturity to July 1, 2004 of
approximately $2,139 face amount of convertible subordinated debentures; (iv) exchanged
approximately $7,755 in Series A Preferred Stock, 7 1/2% Convertible Redeemable Series,
(Series A Preferred) shares for Series A-1 Preferred Stock, Non-Redeemable Convertible
Series, (Series A-1 Preferred); (v) cancelled in the fourth quarter of fiscal 2002 accrued
but unpaid dividends of $1,413 on Series A preferred exchanged for Series A-1 Preferred
which were outstanding as of July 14, 2002 and (vi) accrued in the fourth quarter of 2002
a one-time dividend on the new Series A-1 Preferred in an amount equal to the dividends
canceled as a result of the exchange of the Series A Preferred. The remaining cash
proceeds from the recapitalization are being used for working capital purposes, including
the payment of certain past due accounts payable.

7

---

The Series B Preferred is convertible
into shares of common stock at $.85 per share. The shares of Series A-1 Preferred are
convertible into shares of common stock at $.66. Both conversion prices are subject to
customary anti-dilution adjustment. The Series B and Series A-1 conversion price may also
be adjusted based on certain future transactions. Series B Preferred is mandatorily
redeemable on July 1, 2009 or following a change of control of the Company. Dividends on
Series B Preferred are payable in cash when and if declared by the Companys Board of
Directors. Accrued dividends can be converted by the holders into the Companys
common stock at the then current conversion rate. The Series B Preferred has been recorded
net of expenses and is being accreted to its redemption value of $15,000 over seven years.
Dividends accrued on the Series B Preferred are included in the carrying value of the
Series B Preferred stock. In the second quarter of 2003, the Company recognized additional
expense of $119 related to the issuance of the Series B Preferred, which was netted
against the carrying value of the Series B Preferred.

Note 9. Settlement of accounts
payable and customer contingencies

During fiscal 2001, the Company had a
product recall related to weld failures on certain electronic throttle control systems. In
November 2002, the Company reached a $163 total release and settlement of its accounts
payable balance to one of its vendors to recover certain previously incurred costs of the
recall. The settlement was recorded as a reduction of cost of sales during the first
quarter ended December 31, 2002 and is included in the accompanying statement of
operations for the six months ended March 31, 2003.

In January 2003, the Company reached
a settlement with a prior customer on a cancelled supply contract from 1999. Under the
terms of the settlement, the Company would receive $900, of which $800 was received in
January with the remainder due in May 2003. Also included in this settlement was the
waiver of an accounts payable obligation with a certain vendor. The amount recorded on the
books for this obligation was $51. Based on this obligation being waived, this amount is
included in the overall gain recognized from this settlement. The gain of $951 is
reflected as Gain from settlement with customer within operating expenses of
the consolidated statements of operations for the three and six months ended March 31,
2003.

# Note 10. Debt

As part of the recapitalization
transaction on July 1, 2002, the Company entered into a new five-year credit facility with
Wells, which replaced the Companys prior loan Facility with Wells. On July 1, 2002,
the Companys existing term loan balances of $2,175 and the existing revolving credit
balance of $5,692 from the prior loan agreement with Wells were converted to the new
credit terms. The new loan facility with Wells provides for $12,200 in revolving and term
loans. Interest rates under the new agreement are currently Wells prime rate plus
2.00% for the revolving debt and Wells prime rate plus 2.25% for the term loans.
Fees under the loan agreement include an unused revolver fee of .25% on the unused
portion, a term loan prepayment fee of 2% in the first year and 1% thereafter, and a
revolving loan termination fee of $200 in year 1 and $100 thereafter. The revolver and
term loan A mature on July 1, 2007 and term loan B matures on July 1, 2004. The loans are
secured by essentially all of the assets of the Company. The Company had available under
its revolving credit facility $6,040 and $4,400 at March 31, 2003 and September 30, 2002,
respectively.

The Company's long-term debt
consists of the following:

|                                                                                                                                                   | March 31,2003 | September 30,2002
|-------------------------------------------------------------------------------------------------------------------------------------------------- | ------------- | -----------------
|Bank revolving credit facility due July 1, 2007, bearing
interest at a variable rate, (6.25% at March 31, 2003)
included in current liabilities    | $1,459        | $2,981           
|Bank Term Loan A due July 1, 2007, balance bearing
interest at a variable rate, (6.50% at March 31, 2003)
payable in monthly installments of $23   | 1,190         | 1,330            
|Bank Term Loan B due July 1, 2004, balance bearing
interest at a variable rate, (6.50% at March 31, 2003)
payable in monthly installments of $33   | 500           | 700              
|Note Payable - terminated lease - Mitsubishi due
August 1, 2003, balance bearing interest at 8.5% per
annum payable in monthly installments of $14 | 56            | 137              

8

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|                                                                                                                                                                     |        |       
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------ | ------
|Note Payable - terminated lease - Wells Fargo leasing,
balance bearing interest at 10.0% per annum payable in
monthly installments of $15, due in full March 1, 2003 | --     | 155   
|Note Payable - Imperial Premium Finance, balance
Bearing interest at 5.75% per annum payable in monthly
Installments of $56, due in full July 1, 2003                | 166    | --    
|Capital Leases                                                                                                                                                       | 234    | 264   
|                                                                                                                                                                     | 3,605  | 5,567 
|Less current portion                                                                                                                                                 | 2,483  | 4,084 
|                                                                                                                                                                     | $1,122 | $1,483

# Note 11. Product
Warranties

In November 2002, the Financial
Accounting Standards Board (FASB) issued FASB Interpretation No. 45,
Guarantors Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others (FIN 45). This
interpretation elaborates on the disclosures to be made by a guarantor in its interim and
annual financial statements about its obligations under certain guarantees that it has
issued. It also clarifies that a guarantor is required to recognize, at the inception of a
guarantee, a liability for the fair value of the obligation undertaken in issuing the
guarantee. The disclosure requirements in this interpretation are effective for financial
statements of interim or annual periods ending after December 15, 2002.

The Company establishes a product
warranty reserve based on a percentage of product sales. The established reserve is based
on historical return rates of products and is included in accrued expenses on the
accompanying consolidated balance sheet. Following is a reconciliation of the changes in
the Companys warranty reserve for the three and six months ended March 31, 2003 as
required by FIN 45.

|Balance as ofSeptember 30,2002 | Payments | AdditionalAccruals | AccrualAdjustment | Balance as ofDecember 31,2002
|------------------------------ | -------- | ------------------ | ----------------- | -----------------------------
|$ 1,293                        | (186)    | 156                | -                 | $ 1,263                      

|Balance as ofDecember 31,2002 | Payments | AdditionalAccruals | AccrualAdjustments | Balance as ofMarch 31,2003
|----------------------------- | -------- | ------------------ | ------------------ | --------------------------
|$ 1,263                       | (211)    | 1,147              | (181)              | $ 2,018                   

Included in the warranty reserve is
an accrual for a product recall of $75 and $283 at March 31, 2003 and September 30, 2002,
respectively. The $181 accrual adjustment recorded in the second quarter of 2003 relates
to a reduction of the product recall accrual based on the Companys assessment of its
remaining obligation for this recall.

In January 2003, the Company was
notified of higher than normal warranty claims on one of its electronic throttle control
systems by one customer. Management is currently working with its customer to repair the
defective part. Management estimates that the total potential units involved is no more
than 30,000 and in the second quarter of fiscal 2003 recorded an accrual of $985 for the
estimated cost of the repairs. All units that were in the customers inventory have
been returned or replaced. The remaining possible defective parts are installed on
vehicles and vehicle owners will be notified that the parts should be replaced.

# Note 12. Gain from
Discontinued Operations

In October 2001, the Company
exchanged a building of its previously discontinued Agricultural Equipment segment with a
carrying value of $0 in satisfaction of mortgage debt of $417. The resulting gain has been
recorded in discontinued operations for the six months ended March 31, 2002 on the
accompanying statement of operations and reflected as a gain on sale of buildings, since
the fair value of the building was estimated to equal or exceed the carrying value of the
debt.

During the second quarter of fiscal
2003, the Company settled a lease obligation of its previously discontinued Kenco Williams
business. A gain of $120 resulted from this settlement, which has been recorded in
discontinued operations for the three and six months ended March 31, 2003 on the
accompanying statement of operations.

9

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# Note 13. Segment
Information

The Company accounts for its segments in
accordance with SFAS No. 131 Disclosures about Segments of an Enterprise and Related
Information. The Company operates in two business segments: (1) vehicle components
and (2) electrical components. As a result of terminating and selling certain product
lines, the Company has no significant current operations in the electrical components
segment. Accordingly, the operations for the three and six months ended March 31, 2003 are
presented as one segment. In the prior period the electrical components segment met
certain quantitative thresholds for disclosure pursuant to SFAS No. 131, therefore
financial information for the electrical components segment is shown for the three and six
months ended March 31, 2002.

|                                               | Three MonthsEndedMarch 31, 2002 | Six MonthsEndedMarch 31, 2002
|---------------------------------------------- | ------------------------------- | -----------------------------
|Net sales by classes of similar products       |                                 |                              
|Vehicle components                             | $ 12,696                        | 23,992                       
|Electrical components                          | 152                             | 275                          
|                                               | $ 12,848                        | 24,267                       
|Income (loss) from continuing operations      
|Vehicle components                             | 1,153                           | 1,471                        
|Electrical components                          | (354)                           | (843)                        
|Loss on impairment of investment - Ajay Sports | (3,565)                         | (3,565)                      
|                                               | $(2,766)                        | $(2,937)                     
|Identifiable assets                           
|Vehicle components                             |                                 | $ 23,370                     
|Electrical components                          |                                 | 2,470                        
|Corporate                                      |                                 | 131                          
|Total assets - continuing operations           |                                 | $ 25,971                     
|Capital expenditures                          
|Vehicle components                             | $      327                      | $      445                   
|Electrical components                          | --                              | --                           
|Total capital expenditures                     | $      327                      | $      445                   
|Depreciation and amortization                 
|Vehicle components                             | $      524                      | $   1,526                    
|Electrical components                          | 40                              | 105                          
|Total depreciation and amortization            | $      564                      | $   1,631                    

In December 2002, the Company
recorded a $100 gain from the release of escrow funds related to the sale of GeoFocus, the
Companys previously owned global positioning system business and part of the
electrical components segment. The gain has been recorded in other (income) expense on the
accompanying statement of operations for the six months ended March 31, 2003.

# Note 14. Labor issues

The Companys employees engaged
in the manufacturing of vehicle components in the Portland, Oregon facility are
represented by the International Union, United Automobile Workers of America and
Amalgamated Local 492. The five-year contract with the union expired on August 31, 2002
and on September 9, 2002 the union employees engaged in a strike action, which continues
as of the date of this filing. The Company has continued to negotiate with the union
during the strike; however no agreement on a contract has been reached. The Company
continues to operate the Portland facility with permanent replacement workers. No
significant disruptions of deliveries to customers have occurred during the strike.

In September and October 2002 the
union made various unfair labor practice claims against the Company. To conclude these
claims, the National Relations Regional Director directed the Company to post for 60 days
a notice to employees pledging no future violation of the claims with no admission of
unfair practices in the past. Management does not expect that the Company will incur any
financial liability as a result of this settlement. Additionally, during the six months
ended March 31, 2003, the union filed several additional unfair labor practice claims. The
Company has vigorously defended all such claims as we believe that they are without merit
and will continue to do so.

10

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Based upon current information, the
Company recorded a reduction to cost of sales of $112 during the three months ended March
31, 2003, related to obligations for certain union employee costs recorded primarily over
the first three months of fiscal 2003.

Subsequent to March 31, 2003, the
union submitted to the Company an unconditional offer to return to work and filed an
additional unfair labor practice charge alleging the Company must reinstate all the
striking workers. The Company notified the union that currently all positions are filled
with permanent replacements. The Company will vigorously defend the latest claim as it
believes that it is also without merit.

# Note 15. Employee
Benefit Plans

The Companys benefit plans were
audited by the Department of Labor (DOL) during fiscal 2001. The Company accrued $170 in
the first quarter of fiscal 2002 as an estimate of additional liability to participants of
the Companys Employee Stock Ownership Plan (ESOP). During the fourth
quarter of fiscal 2002, the Company made payments totaling $125 into the Companys
ESOP fund at the suggestions of the DOL, and now regards itself in full compliance with
DOL regulations.

In January 2003, the Company froze
the benefits under its Retirement Income Plan. The initial estimate of the curtailment
loss associated with freezing this plan was insignificant.

# Note 16. Employment
Agreements

In January 2003, the Company entered into
employment agreements with its three executive vice presidents. Each contract is for a
term of four years beginning October 1, 2002 and specifies an initial base salary per
year, plus bonus based on parameters established by the board of directors. The agreements
also provide for a one-year severance payment under certain circumstances in the event the
Company terminates the agreements prior to the end of the contract period.

11

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# Williams Controls, Inc.

|Item 2. |  | Management's Discussion and Analysis of Financial Condition and Results of Operations
(Dollars in thousands, except per share amounts)
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------

# Overview

We have a significant portion of the
United States market for electronic throttle controls systems for heavy trucks and busses
and a minor portion of the international markets for the same products. We sell the
majority of these products directly to large original equipment manufacturers such as
Freightliner, Volvo, Navistar and Paccar. We also sell our products through a network of
independent distributors who sell to smaller original equipment manufacturers and to truck
and bus owners as replacement parts. We also manufacture pneumatic and air control systems
for the diesel heavy truck, transit bus and off-highway vehicles market. Many of the
customers for these products are the same customers as for our diesel heavy truck and
transit bus electronic throttle control systems.

The demand for electronic throttle
control systems is expanding into smaller trucks, diesel-powered pick-up trucks,
automobiles and off-highway vehicles as the major automotive manufacturers and off-highway
vehicle producers are beginning to convert gasoline-powered vehicles to electronic
throttle control systems. Demand for electronic throttle controls will depend, in part, on
how quickly these manufacturers proceed with the ongoing engine modifications needed to
use such systems. We have supplied a limited number to Ford Motor Company and General
Motors and, through existing contracts, anticipate we will increase the number of such
systems sold to Ford Motor Company and General Motors throughout fiscal 2003.

We also manufacture sensors that we
use in our automotive and a limited number of our heavy truck electronic throttle
controls. We anticipate we will expand using our sensors in additional truck lines, bus
and off-highway electronic throttle control systems in fiscal 2003. We do not currently
have any outside customers for our sensors.

# Critical Accounting
Policies and Estimates

We have identified the most critical accounting
principles upon which our financial status depends. We have determined the critical
principles by considering accounting policies that involve the most complex decisions or
assessments. We identified the most critical accounting policies to be those related to
impairment of long-lived assets, warranty and product recall, and pensions and
post-retirement benefit obligations.

Impairment of Long-Lived
Assets

We account for the impairment of
long-lived assets in accordance with FASB Statement No. 144. We test for impairment when
factors indicate that the asset may not be recoverable from future undiscounted cash flows
and calculate the amount of impairment using discounted cash flows. Estimates of future
cash flows require judgment and may change based on, among other things, the market for
our products, technology advances, and customer relationships. For the three and six
months ended March 31, 2003, there was no impairment of long-lived assets.

Warranty and Product
Recall

We provide a warranty covering
defects arising from products sold. We have established a warranty reserve based on
historical return rates of products. In addition, the Company issued a product recall in
late fiscal year 2001. We recorded a reserve for this product recall based on estimates of
the number of units to be returned and the estimated costs of repair. At March 31, 2003,
the product recall accrual was $75. All of the units that were in distributors
inventories have been returned and replaced. The remaining possible defective units are
installed on vehicles, and will be replaced if and when they fail.

In January 2003, the Company was
notified of higher than normal warranty claims on one of its electronic throttle control
systems by one customer. Management is currently working with this customer to repair the
defective part. Management estimates that the total potential units involved is no more
that 30,000 and in the second quarter of fiscal 2003 recorded an accrual of $985 for the
estimated cost of the repairs. All units that were in the customers inventory have
been returned or replaced. The remaining possible defective parts are installed on
vehicles and vehicle owners will be notified that the parts should be replaced.

The provisions for warranty requires
the use of estimates about the future rates of returns and costs and such estimates are
subject to change, which could be material.

12

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Pensions and
Post-retirement Benefit Obligations

We account for pensions and
post-retirement benefits in accordance with FASB Statement No. 87 and FASB Statement No.
106. FASB Statement No. 87 requires the Company to calculate its pension expense and
liabilities using actuarial assumptions, including a discount rate assumption and a
long-term asset rate return assumption. Changes in interest rates and market performance
can have a significant impact on the Companys pension expense and future payments.
FASB Statement No. 106 requires the Company to accrue the cost of post-retirement benefit
obligations. The accruals are based on interest rates and the costs of health care.
Changes in interest rates and health care costs could impact post-retirement expenses and
future payments.

# Results of Operations
 Three months ended March 31, 2003 compared to the three months ended March 31,
2002.

The following table sets forth, for
the periods indicated, selected statements of operations data expressed as a percentage of
net sales.

|                                                             | Three Months EndedMarch 31, |        
|------------------------------------------------------------ | --------------------------- | -------
|
|Net sales                                                    | 100.0%                      | 100.0% 
|Cost of sales                                                | 82.9                        | 72.8   
|Gross margin                                                 | 17.1                        | 27.2   
|Operating expenses (income):                                
|Research and development                                     | 7.4                         | 5.4    
|Selling                                                      | 2.7                         | 2.8    
|Administration                                               | 9.7                         | 12.7   
|Loss on impairment of investment - Ajay                      | --                          | 27.8   
|Gain on settlement with customer                             | (7.2)                       | --     
|Total operating expenses                                     | 12.6                        | 48.7   
|Income (loss) from continuing operations                     | 4.5                         | (21.5) 
|Interest income                                              | (0.1)                       | --     
|Interest expense                                             | 1.2                         | 4.9    
|Other income, net                                            | (0.4)                       | (0.1)  
|Income (loss) from continuing operations before income taxes | 3.8                         | (26.3) 
|Income tax benefit                                           | --                          | --     
|Net income (loss) from continuing operations                 | 3.8%                        | (26.3)%

Net Sales

Net sales increased $325 or 2.5% to
$13,173 in the second quarter of fiscal 2003 from $12,848 in the second quarter of fiscal
2002. The increase in net sales is primarily due to an increase in sales volumes of our
electronic throttle control systems to our heavy truck and transit bus customers, which is
offset by lower sales volumes of our automotive electronic throttle control systems,
pneumatic and air control systems and electrical components. Sales to the heavy truck and
transit bus customers increased $783 or 7.1% for the three months ended March 31, 2003
compared to the three months ended March 31, 2002. Sales of automotive electronic throttle
control systems decreased $450 or 26.7% for the three months ended March 31, 2003 compared
to the three months ended March 31, 2002, primarily due to elimination of sales for the
Dodge Viper program, which was completed in the fourth quarter of fiscal 2002 and a
significant decrease in Ford electronic throttle control system sales, due to product
change overs to new models. We anticipate that after the Ford model change over is
complete and previously awarded General Motors contracts begin to ship later this fiscal
year, sales to automotive customers will increase.

Gross margin

Gross margin was $2,257, or 17.1% of
net sales in the second quarter of 2003, a decrease of $1,233 compared to the gross margin
of $3,490, or 27.2% of net sales, in the comparable fiscal 2002 period.

13

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Electronic throttle control system
sales for heavy trucks and transit busses, which accounted for 89.5% of net sales for the
three months ended March 31, 2003, showed a decrease in gross margin of 7.1% from 23.2% of
net sales during the three months ended March 31, 2003 compared to 30.3% of net sales
during the comparable period of fiscal 2002. The decrease in gross margin for heavy trucks
and transit busses is mainly due to an increase of cost of sales related to recording a
$985 warranty accrual for product issues with one customer, as described in Note 11 of the
Unaudited Notes to the Consolidated Financial Statements. This decrease is offset by the
Company recording a $181 reduction in cost of sales related to its assessment of the
remaining obligation for the product recall accrual also described in Note 11. In
addition, based on current information, a reduction of cost of sales of $112 was recorded
related to the Companys obligations for certain union employee costs. Excluding
these items, gross margins for heavy trucks and transit busses was 29.0% of net sales, a
decrease of 1.3% compared to the same fiscal quarter in 2002.

The overall decrease in gross margin
for the three months ended March 31, 2003 also includes a decrease in gross margin for
sales of electronic throttle control systems for automotive customers. Automotive
electronic throttle control system sales, which accounted for 9.6% of the net sales for
the three months ended March 31, 2003, had negative margin for the three months ended
March 31, 2003 of (37.1%) of net sales compared to positive gross margin of 7.8% of net
sales during the comparable period of fiscal 2002. The decrease in margin for automotive
electronic throttle control systems is primarily due to an increase in direct material
costs, scrap, labor costs due to start-up problems associated with numerous contracts and
the elimination of sales for the Dodge Viper program.

Operating expenses

Operating expenses were $1,665 for
the three months ended March 31, 2003 compared to $6,256 for the three months ended March
31, 2002, a decrease of $4,591 or 73.4%. Operating expenses as a percentage of net sales,
were 12.6% for the second fiscal quarter of 2003, which were lower than the 48.7% for the
second fiscal quarter of 2002.

Included in operating expenses for
the three months ended March 31, 2002 is an impairment loss of $3,565 related to the
Companys investment in Ajay. The Company had previously accounted for its investment
in Ajay using the equity method of accounting. As a result of various changes within the
Company and Ajay, the Company felt it no longer had influence over the operations of Ajay
and accordingly changed to the cost method of accounting for its investment in and note
receivable from Ajay. The Company evaluated the realization of its investment in and note
receivable from Ajay. Based on the Companys assessment, the Company believed the
investment in and note receivable from Ajay had been impaired and accordingly an
impairment loss for the entire carrying value of $3,565 was recorded in the second quarter
of fiscal 2002. This amount has been reflected as a separate line Loss on impairment
of investment  Ajay within operating expenses of the consolidated statements
of operations for the three months ended March 31, 2002.

In January 2003, the Company reached
a settlement with a prior customer on a cancelled supply contract from 1999. Under the
terms of the settlement, the Company would receive $900, of which $800 was received in
January with the remainder due in May 2003. Also included in this settlement was the
waiver of an accounts payable obligation with a certain customer. The amount recorded on
the books for this obligation was $51. Based on this obligation being waived, this amount
is included in the overall gain recognized from this settlement. The entire gain of $951
is reflected as Gain from settlement with customer within operating expenses
of the consolidated statements of operations for the three months ended March 31, 2003.

Of the remaining operating expenses,
research and development, selling and administration costs were $2,616 or 19.9% of net
sales for the three months ended March 31, 2003 compared to $2,691 or 20.9% of net sales
for the corresponding quarter in fiscal 2002.

Research and development expenses
increased $283 or 40.7% to $978 for the second fiscal quarter of 2003 compared to $695 for
the comparable period in 2002. The largest factor in higher research and development
expenses was a $195 increase in research and development spending for heavy truck and
transit busses electronic throttle control systems related to several new projects.
Research and development spending for automotive electronic throttle control systems had
an increase of $88, mainly due to product launch costs. The Companys research and
development expenditures will fluctuate based on the products under development at any
given point in time.

Administration expenses for the three
months ended March 31, 2003 of $1,277 were lower than the $1,636 for the same fiscal
period in 2002, a reduction of $359 or 21.9%. This decrease is primarily due to
significant decreases in administration expenses for the automotive electronic throttle
control systems product line, which decreased $347 or 58.7% during the three months ended
March 31, 2003 compared to the comparable period in fiscal 2002. The significant decrease
is attributable to a reduction in personnel and the consolidation of our automotive
operations into one facility in Sarasota, Florida.

14

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Interest Expense

Interest expense decreased $474 or
75.0% to $158 in the second quarter of fiscal 2003 from $632 in the second quarter of
fiscal 2002. This reduction is the result of overall reduced interest rates and reduced
debt levels resulting from the receipt of cash proceeds associated with the
recapitalization transaction discussed in Note 8 of Notes to the Unaudited Consolidated
Financial Statements.

Income Taxes

The Company is in a net operating
loss carry-forward position and is providing a 100% valuation allowance on all deferred
tax assets due to the uncertainty regarding their realization. Federal net operating
losses are subject to provisions of the Internal Revenue Code, which restrict the
utilization of this type of tax attribute in the event of an ownership change
(as defined in the Internal Revenue Code Section 382). Changes in ownership resulting from
the recapitalization transaction coupled with other future changes in ownership may
significantly defer the utilization of net operating loss carry forwards in the future.

Discontinued Operations

During the second quarter of fiscal
2003, the Company settled a lease obligation of its previously discontinued Kenco Williams
business. A gain of $120 resulted from this settlement, which has been recorded in
discontinued operations for the three months ended March 31, 2003 on the accompanying
statement of operations.

Net income available to
common shareholders

Net loss allocable to common shareholders
decreased to a loss of $37 for the three months ended March 31, 2003 compared to a loss of
$3,676 in the comparative prior year period. There were higher interest expense and
operating expenses for the three month period ended March 31, 2002 when compared to the
same period of fiscal 2003. Excluding the loss on impairment of investment for Ajay of
$3,565, the net loss allocable to common shareholders for the second fiscal quarter 2002
would have been $111. The 2003 period also included higher dividends on preferred stock
due to the recapitalization transaction in July 2002.

# Results of Operations
 Six months ended March 31, 2003 compared to the six months ended March 31, 2002.

The following table sets forth, for
the periods indicated, selected statements of operations data expressed as a percentage of
net sales.

|                                         | Six Months EndedMarch 31,
|---------------------------------------- | -------------------------
|
|Net sales                                | 100.0%                   
|Cost of sales                            | 79.2                     
|Gross margin                             | 20.8                     
|Operating expenses (income):            
|Research and development                 | 6.9                      
|Selling                                  | 2.8                      
|Administration                           | 9.8                      
|Loss on impairment of investment - Ajay  | --                       
|Gain on settlement with customer         | (3.7)                    
|Total operating expenses                 | 15.8                     
|                                         |                          
|Income (loss) from continuing operations | 5.0                      
|                                         |                          
|Interest income                          | (0.1)                    
|Interest expense                         | 1.3                      
|Other income, net                        | (0.6)                    

15

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|Income (loss) from continuing operations before income taxes | 4.4  | (18.4) 
|------------------------------------------------------------ | ---- | -------
|Income tax benefit                                           | 1.2  | --     
|Net income (loss) from continuing operations                 | 5.6% | (18.4)%

Net Sales

Net sales increased $1,018 or 4.2% to
$25,285 in the first six months of fiscal 2003 from $24,267 in the first six months of
fiscal 2002. The increase in net sales is primarily due to a significant increase in sales
volumes of our electronic throttle control systems to our heavy truck and transit bus
customers, which is offset by lower sales volumes of our automotive electronic throttle
control systems, pneumatic and air control systems and electrical components. Sales for
the six months ended March 31, 2003 to the heavy truck and transit bus customers increased
$2,288 or 11.0% compared to the same period in fiscal 2002. Sales of automotive electronic
throttle control systems decreased $1,238 or 37.9% for the six months ended March 31, 2003
compared to the six months ended March 31, 2002, primarily due to elimination of sales for
the Dodge Viper program, which was completed in the fourth quarter of fiscal 2002 and a
decrease in Ford electronic throttle control system sales, due to product change overs to
new models. We anticipate that after the Ford model change over is complete and the
previously awarded General Motors contracts begin to ship later this fiscal year, sales to
automotive customers will increase.

Gross margin

Gross margin was $5,253, or 20.8% of
net sales in the first six months of 2003, a decrease of $928 compared to the gross margin
of $6,181, or 25.5% of net sales, in the comparable fiscal 2002 period.

Gross margins as a percentage of
sales for heavy trucks and transit busses, which accounted for 91.0% of net sales for the
six months ended March 31, 2003, showed a decrease of 3.5% from 30.0% of net sales during
the six months ended March 31, 2002 compared to 26.5% of net sales during the comparable
period in fiscal 2003. The decrease in gross margin for heavy trucks and transit busses is
directly attributable to the Company recording a $985 warranty accrual in cost of sales
related to product issues with one customer, as described in Note 11 of the Unaudited
Notes to the Consolidated Financial Statements. This decrease is offset by the Company
recording a $181 reduction in cost of sales related to its assessment of the remaining
obligation for the product recall accrual also described in Note 11. The Company also
recorded a $163 reduction of cost of sales related to the settlement of warranty product
recall costs as described in Note 9 of the Unaudited Notes to the Consolidated Financial
Statements. In addition, based on current information, a reduction of cost of sales of
$112 was recorded related to the Companys obligations for certain union employee
costs. Without these items, gross margins for heavy trucks and transit busses would have
been 28.8% of net sales, a decrease of 1.2% compared to the same fiscal period in 2002.

In addition to the decrease in gross
margins for heavy trucks and transit busses, the automotive electronic throttle control
system sales also showed a decrease in gross margin. Automotive electronic throttle
control system sales, which accounted for 8.0% of net sales for the six months ended March
31, 2003, had negative margin for the six months ended March 31, 2003 of 41.5% of net
sales compared to 6.9% of net sales during the comparable period of fiscal 2002. The
increase in negative margin for automotive electronic throttle control systems is
primarily due to an increase in direct material costs, scrap, labor costs due to start-up
problems associated with numerous contracts and the elimination of sales for the Dodge
Viper program.

Operating expenses

Operating expenses were $3,988 for
the six months ended March 31, 2003 compared to $9,118 for the six months ended March 31,
2002, a decrease of $5,130 or 56.3%. Operating expenses as a percentage of net sales, were
15.8% for the first six months of 2003, which were lower than the 37.6% for the first six
months of 2002.

As discussed above, the Company
recorded an impairment loss of $3,565 related to its investment in and note receivable
from Ajay in the second quarter of fiscal year 2002. This impairment loss was recorded
based on the Company evaluating the realization of its investment in and note receivable
from Ajay and determining through this assessment that the Companys interests had
been impaired. This amount has been reflected as a separate line Loss on impairment
of investment  Ajay within operating expenses of the consolidated statements
of operations for the three and six months ended March 31, 2002.

16

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Also discussed above, the Company
reached a settlement during the second quarter of fiscal year 2003 with a prior customer
on a cancelled supply contract from 1999. Under the terms of the settlement, the Company
would receive $900, of which $800 was received in January with the remainder due in April
2003. Also included in this settlement was the waiver of an accounts payable obligation
with a certain customer. The amount recorded on the books for this obligation was $51.
Based on this obligation being waived, this amount is included in the overall gain
recognized from this settlement. The entire gain of $951 is reflected as a separate line
Gain from settlement with customer within operating expenses of the
consolidated statements of operations for the six months ended March 31, 2003.

Of the remaining operating expenses,
research and development, selling and administration costs were $4,939 or 19.5% of net
sales for the six months ended March 31, 2003 compared to $5,553 or 22.9% of net sales for
the corresponding six months in fiscal 2002.

Research and development expenses
increased $92 or 5.5% to $1,751 for the first six months of 2003 compared to $1,659 for
the comparable period in 2002. The increase in research and development spending is due to
an increase in spending for the heavy truck and transit bus electronic throttle control
systems, which increased $144 to $1,031 for the six months ended March 31, 2003 compared
to $886 for the first six months of fiscal 2002. This increase was slightly offset by a
decrease in research and development spending for automotive electronic throttle control
systems of $52. The Companys research and development expenditures will fluctuate
based on the products under development at any given point in time.

Administration expenses for the six
months ended March 31, 2003 of $2,481 were lower than the $3,292 for the same fiscal
period in 2002, a reduction of $811 or 24.6%. This decrease is primarily due to
significant decreases in administration expenses for both the Corporate office and the
automotive electronic throttle control systems product line. Administration expenses for
Corporate decreased $249 or 16.3% during the first six months of fiscal 2003 compared to
the first six months of fiscal 2002. This decrease is attributable to significant
reductions in payroll and legal expenses due to the completion of the recapitalization
transaction, which is discussed in Note 8 in the Notes to Unaudited Consolidated Financial
Statements. During the six months ended March 31, 2002, the Company entered into a
settlement with the Department of Labor regarding certain of its employee benefit plans.
As part of this settlement, the Company recorded $170 in expenses related to the
Companys ESOP Plan. The recording of this expense is part of the overall decrease of
administrative expenses from fiscal 2002 to fiscal 2003 and at this time the Company does
not expect to incur any additional expenses related to the settlement with the Department
of Labor. The automotive electronic throttle control systems administration expenses
decreased $491 or 49.3% during the six months ended March 31, 2003 compared to the
comparable period in fiscal 2002. The decrease is attributable to a reduction in personnel
and the consolidation of our automotive operations into one facility in Sarasota, Florida.

Interest Expense and
Other Income

Interest expense decreased $1,245 or
79.2% to $327 in the first six months of fiscal 2003 from $1,572 in the first six months
of fiscal 2002. This reduction is the result of overall reduced interest rates and reduced
debt levels resulting from the receipt of cash proceeds associated with the
recapitalization transaction discussed in Note 8 of Notes to the Unaudited Consolidated
Financial Statements.

Other income increased $97 to $141
for the six months ended March 31, 2003 from $44 in the first six months of fiscal 2002.
This increase is primarily due to recording a $100 gain from the release of escrow funds
related to the sale of GeoFocus as described in Note 13 in the Notes to Unaudited
Consolidated Financial Statements.

Income Taxes

The Company is in a net operating
loss carry-forward position and is providing a 100% valuation allowance on all deferred
tax assets due to the uncertainty regarding their realization. Federal net operating
losses are subject to provisions of the Internal Revenue Code, which restrict the
utilization of this type of tax attribute in the event of an ownership change
(as defined in the Internal Revenue Code Section 382). Changes in ownership resulting from
the recapitalization transaction coupled with other future changes in ownership may
significantly defer the utilization of net operating loss carry forwards in the future.

A tax benefit of $300 was recorded in
the six months ended March 31, 2003 resulting from filing an amended federal 1998 tax
return in the first quarter of fiscal quarter 2003.

17

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Discontinued Operations

As of September 30, 2001, the Company
had recorded on its consolidated balance sheet $417 related to a mortgage payable on a
building of the Agricultural Equipment segment. The buildings carrying value was $0
at September 30, 2001. During the first quarter of fiscal 2002 the mortgage holder sold
the building at auction for approximately the mortgage value and completely and fully
released the Company from the mortgage. The Company recognized a gain from discontinued
operations for the six month period ended March 31, 2002 of $417 related to the
satisfaction of the mortgage. Since the estimated fair value of the building was equal to
or greater than the debt, the gain was recorded as a gain on sale of building from
discontinued operations.

During the second quarter of fiscal
2003, the Company settled a lease obligation of its previously discontinued Kenco Williams
business. A gain of $120 resulted from this settlement, which has been recorded in
discontinued operations for the six months ended March 31, 2003 on the accompanying
statement of operations.

Net income available to
common shareholders

Net income (loss) allocable to common
shareholders increased to income of $209 for the six months ended March 31, 2003 compared
to a loss of $4,582 in the comparative prior year period. There were significantly higher
interest expense and operating expenses for the six month period ended March 31, 2002 when
compared to the same period of fiscal 2003. Excluding the loss on impairment of investment
for Ajay of $3,565 and the gain on sale of building from discontinued operations of $417,
the net loss allocable to common shareholders for the first six months of fiscal 2002
would have been $1,434. The first six months of fiscal 2003 also included higher dividends
on preferred stock due to the recapitalization transaction in July 2002.

# Financial Condition,
Liquidity and Capital Resources

At March 31, 2002, we were
experiencing a significant lack of liquidity and, prior to the recapitalization
transaction, we had a significant amount of past due vendor debt and were on C.O.D or
prepayment terms with virtually all of our suppliers of goods and services. The
recapitalization plan has allowed us to address these issues and create borrowing capacity
under our revolving credit line with our lender to meet our cash needs in the foreseeable
future. We have returned to normal credit terms with essentially all of our suppliers. We
do not anticipate any material future supply disruptions similar to the ones we suffered
previously.

During the first six months of fiscal
2003, net cash provided by operating activities was $2,347 compared with cash used of $9
in the first six months of fiscal 2002. Cash flows from operations improved through net
income of $1,520 compared to a net loss of $4,048 for the six months ended March 31, 2002.
This increase in cash flows from higher earnings in the first six months of fiscal 2003 is
offset by a reduction in amortization of $721 due to a significant decrease in bank fees
and debt costs and a non-cash loss of $3,565 from the impairment of investment with Ajay.
For the six months ended March 31, 2003, there was an overall increase in cash generated
from net changes in operating assets and liabilities. The Company generated cash of $460
from net changes in operating assets and liabilities in the six months ended March 31,
2003, compared to a cash use of $695 from net changes in operating assets and liabilities
in the same period ended March 31, 2002. This increase in cash from net changes in
operating assets and liabilities is primarily due to increased collections on accounts
receivable and an increase in the Companys long-term pension obligation. Both of
these increases are offset by reductions in accounts payable and increases in inventory
balances.

Cash used in investing activities was
$786 for the six months ended March 31, 2003 compared to a cash use of $400 for the six
months ended March 31, 2002. The cash used position for the first six months of fiscal
2003 relates to purchases of equipment of $798 offset by proceeds of $12 from the sale of
assets and from collection of note receivables. The cash used position for the first six
months of fiscal 2002 relates to purchases of equipment of $445 offset by proceeds of $45
from the sale of assets.

Cash used in financing activities was
$2,231 for the six months ended March 31, 2003 compared to cash provided by financing
activities of $447 for the six months ended March 31, 2002. The change was primarily due
to repayments of short-term and long-term debt in fiscal 2003 compared to net borrowings
in the first six months of fiscal 2002. Cash provided by financing activities for the six
months ended March 31, 2002 also included a $193 net change in book overdraft.

18

---

At March 31, 2003, our contractual
obligations consist of bank debt, notes payable, capital leases, and operating lease
commitments. We do not have any material letters of credit, purchase commitments, or debt
guarantees outstanding at March 31, 2003. Maturities of these contractual obligations
consist of the following:

|           | Bank Debt andNotes Payable | Capital Leases | OperatingLeases
|---------- | -------------------------- | -------------- | ---------------
|2003       | $2,021                     | $110           | $177           
|2004       | 580                        | 60             | 212            
|2005       | 280                        | 59             | 47             
|2006       | 280                        | 30             | 26             
|2007       | 210                        | --             | 4              
|Thereafter | --                         | --             | --             
|           | $3,371                     | $259           | $466           

Due to the reduction in interest
rates and reduction in the fair value of assets, cash payments to fund our pension
obligation will increase significantly in fiscal 2003. However, we have $6,040 available
under our revolving credit facility at March 31, 2003 plus cash at March 31, 2003 of $159,
and we believe this availability along with cash provided by operations will be sufficient
to meet our working capital needs on a short term and long term basis.

Included in the accompanying
consolidated balance sheet is $1,626 of old accounts payable related to closed insolvent
subsidiaries of the Company. Management does not believe they will ultimately have to pay
the full amount of these payables.

# Recent FASB
Pronouncements

In June and August 2001, the FASB
issued SFAS No.s 143 and 144, Accounting for Asset Retirement
Obligations and Accounting for the Impairment or Disposal of Long-Lived
Assets. SFAS No. 143 requires the Company to record the fair value of an asset
retirement obligation as a liability in the period in which it incurs a legal obligation
associated with the retirement of tangible long-lived assets that result from the
acquisition, construction, development and/or normal use of the assets. We also record a
corresponding asset that is depreciated over the life of the asset. Subsequent to the
initial measurement of the asset retirement obligation, the obligation will be adjusted at
the end of each period to reflect the passage of time and changes in the estimated future
cash flows underlying the obligation. SFAS No. 144 amends SFAS No. 121 but retains many of
its fundamental provisions and provides a single accounting model for long-lived assets to
be disposed of. SFAS No. 144 also changes the criteria for classifying an asset as
held-for-sale and broadens the scope of businesses to be disposed of that qualify for
reporting as discontinued operations and changes the timing of recognizing losses on such
operations. These statements are effective for our fiscal year ended 2003. The adoption of
SFAS No. 143 and No. 144 did not have an impact on our financial position or results of
operations.

In June 2002, the FASB issued SFAS
No. 146, Accounting for Costs Associated with Exit or Disposal Activities.
This statement nullifies Emerging Issues Task Force Issue No. 94-3 (Issue 94-3),
Liability Recognition for Certain Employee Termination Benefits and Other Costs to
Exit an Activity (including Certain Costs Incurred in a Restructuring). SFAS No. 146
requires that a liability for a cost associated with an exit or disposal activity is
recognized when the liability is incurred. Under Issue 94-3, a liability for an exit cost
as defined in Issue 94-3 was recognized at the date of an entitys commitment to an
exit plan. The provisions of SFAS No. 146 are effective for exit or disposal activities
that are initiated after December 31, 2002.

In December 2002, the FASB issued
SFAS No. 148, Accounting for Stock-Based Compensation  Transition and
Disclosure, an amendment to SFAS No. 123. This statement amends SFAS No. 123 to
provide alternative methods of transition for a voluntary change to the fair value based
method of accounting for stock-based employee compensation. In addition, this statement
amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in
both the annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported results.
The Company adopted the disclosure provisions of this statement in the second quarter of
fiscal 2003.

19

---

# Item 3. Quantitative and
Qualitative Disclosures About Market Risk

The Company has $3,149 in short and
long-term debt, held by its bank, with interest rates that change in accordance with the
terms of the relevant debt instruments. As a result, the Company may be exposed to risks
associated with future interest rate changes on its debt. The Company does not believe
that a hypothetical 10 percent change in end of period interest rates would have a
material effect on the Companys cash flow.

# Item 4. Controls and
Procedures

Evaluation of Disclosure
Controls and Procedures

The Companys Chief Executive
Officer and Chief Financial Officer, after evaluating the effectiveness of the
Companys disclosure controls and procedures (as defined in Rule
13a-14(c) and Rule 15d-14(c) under the Securities Exchange Act of 1934, as amended (the
Act)) as of a date (the Evaluation Date) within 90 days before the
filing date of this quarterly report, have concluded that as of the Evaluation Date, the
Companys disclosure controls and procedures were effective and designed to
reasonably ensure that (a) material information relating to the Company and the
Companys consolidated subsidiaries is accumulated and communicated to them, and (b)
information required to be disclosed by the Company in the reports that it files or
submits under the Act is recorded, processed, summarized and reported, within the required
time periods.

Changes in Internal
Controls

There have not been any significant
changes in the Companys internal controls or in other factors that could
significantly affect those controls subsequent to the Evaluation Date, including any
corrective actions with regard to significant deficiencies and material weaknesses.

20

---

# Part II. Other
Information

# Item 1. Legal Proceedings

We are parties to various pending
judicial and administrative proceedings arising in the ordinary course of business. Our
management and legal counsel have reviewed the probable outcome of these proceedings, the
costs and expenses reasonably expected to be incurred, the availability and limits of our
insurance coverage, and our established reserves for uninsured liabilities. While the
outcome of the pending proceedings cannot be predicted with certainty, based on our
review, we believe that any liability that may result is not reasonably likely to have a
material effect on our liquidity, financial condition or results of operations.

# Item 2. Changes in
Securities and Use of Proceeds

None

# Item 3. Defaults Upon
Senior Securities

None

# Item 4.  Submission of
Matters to a Vote of Security Holders

None

# Item 5. Other Information

None

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

(a)    Exhibits

| |  | 3.1 | Certificate of Incorporation of the Registrant as amended. (Incorporated by reference
to Exhibit 3.1 to the Registrants annual report on form 10-K for the fiscal
year ended September 30, 1995).
| |  | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 3.2 | Certificate to Provide for the Designation, Preferences, Rights, Qualifications,
Limitations or Restrictions Thereof, of the Series A Preferred Stock, 7 1/2% Redeemable
Convertible Series (Incorporated by reference to Exhibit 3.1 to the
Registrants quarterly report on form 10-Q for the quarter ended March 31,
1998).
| |  | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 3.3 | Certificate to Provide for the Designation, Preferences, Rights, Qualifications,
Limitations or Restrictions Thereof, of the Series A-1 Preferred Stock, Non-Redeemable
Convertible Series. (Incorporated by reference to Exhibit 3.3 to the
Registrants quarterly report on form 10-Q for the quarter ended June 30,
2002).
| |  | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 3.4 | Certificate to Provide for the Designation, Preferences, Rights, Qualifications,
Limitations or Restrictions Thereof, of the Series B Preferred Stock, 15% Redeemable
Convertible Series (Incorporated by reference to Exhibit (d)(v) to the Schedule
TO-I/A filed on July 5, 2002).
| |  | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 3.5 | Certificate of Elimination for Mandatory Preferred Stock (Incorporated by reference to
Exhibit (d)(vi) to the Schedule TO-I/A filed on July 5, 2002).
| |  | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 3.6 | Restated By-Laws of the Registrant as amended July 1, 2002. (Incorporated by reference
to Exhibit 3.6 to the Registrants quarterly report on form 10-Q for the
quarter ended June 30, 2002).
| |  | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 4.1 | Series
B Preferred Stock Purchase Agreement, dated May 31, 2002. (Incorporated by reference to
Exhibit (d)(i) to the                            Schedule TO-I/A filed on June 11, 2002).
| |  | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

21

---

| |  | 4.2 | Series B Preferred Registration Rights Agreement, dated as of July 1, 2002, by and among
the Company, American Industrial Partners Capital Fund III, L.P., and Dolphin Offshore
Partners L.P. (Incorporated by reference to Exhibit (d)(vii) to the Schedule
TO-I/A filed on July 5, 2002).
| |  | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 4.3 | Series
B Preferred Shareholder Agreement, by and among the Company, American Industrial Partners
Capital Fund III, L.P., Dolphin
Offshore Partners L.P. and Eubel, Brady & Suttman Asset Management, Inc.
(Incorporated by reference to Exhibit (d)(viii) to the Schedule TO-I/A filed on July 5, 2002).
| |  | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 4.4 | Series A-1 Preferred Registration Rights Agreement, dated as of July 15, 2002, by and
among the Company and the holders of Series A-1 Preferred Stock. (Incorporated by
reference to Exhibit 4.5 to the Registrants quarterly report on Form 10-Q
for the quarter ended June 30, 2002).
| |  | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 4.5 | Form of Amended and Restated Subordinated Debenture Due July 1, 2004 (Incorporated by
reference to Exhibit (d)(xii) to the Schedule TO-I/A filed on July 5, 2002).
| |  | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 4.6 | Form
of warrant (Incorporated by reference to Exhibit (d)(iii) to the Schedule TO-I/A filedon June 11, 2002).
| |  | --- | -------------------------------------------------------------------------------------------------------------

| |  | 99.1 | Certification
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 for                            R. Eugene Goodson.
| |  | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 99.2 | Certification
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
                           Sarbanes-Oxley Act of 2002 for Dennis E. Bunday.
| |  | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

(b)       
          Reports on Form 8-K

| | A
Current Report on Form 8-K was filed on January 3, 2003 reporting under Item 5 
Other Events, the resignation of Timothy S. Itin from the Board of Directors and the
election of Donn Viola as a director.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

22

---

# SIGNATURES

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.                                                                            | 
|------------------- |  | -------------------------------------------------------------------------------------------------- | 
|                    |  |                                                                                                    | 
|                    |  |                                                                                                    | 
|Date:  May 14, 2003 |  | /s/ R. EUGENE GOODSONR. Eugene GoodsonChairman of the
Board, President and Chief Executive Officer | 
|                    |  |                                                                                                    | 
|                    |  |                                                                                                    | 
|                    |  | /s/ DENNIS E. BUNDAYDennis E. BundayChief Financial
Officer                                        | 

23

---

# CERTIFICATION PURSUANT
TO
SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002

I, R. Eugene Goodson, certify that:

|1. | I have reviewed this quarterly report on Form 10-Q of Williams Control, Inc.;
|-- | -----------------------------------------------------------------------------

|2. | Based on my knowledge, this quarterly report does not contain any untrue
          statement of a material fact or omit to state a material fact necessary to make
          the statements made, in light of the circumstances under which such statements
          were made, not misleading with respect to the period covered by this quarterly
          report;
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. | Based on my knowledge, the financial statements, and other financial information
          included in this quarterly report, fairly present in all material respects the
          financial condition, results of operations and cash flows of the registrant as
          of, and for, the periods presented in this quarterly report;
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. | The registrants other certifying officer and I are responsible for
          establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | a) | designed such disclosure controls and procedures to ensure that material
               information relating to the registrant, including its consolidated subsidiaries,
               is made known to us by others within those entities, particularly during the
               period in which this quarterly report is being prepared;
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | b) | evaluated the effectiveness of the registrants disclosure controls and
               procedures as of a date within 90 days prior to the filing date of this
               quarterly report (the Evaluation Date); and
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | c) | presented in this quarterly report our conclusions about the effectiveness of
               the disclosure controls and procedures based on our evaluation as of the
               Evaluation Date;
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5. | The
registrants other certifying officer and I have disclosed, based on           our
most recent evaluation, to the registrants auditors and the audit committee of
registrants board of directors:
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | a) | all
significant deficiencies in the design or operation of internal controls           which
could adversely affect the registrants ability to record, process, summarize and
report financial data and have identified for the registrants auditors any material
weaknesses in internal controls; and
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | b) | any fraud, whether or not material, that involves management or other employees
               who have a significant role in the registrants internal controls; and
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

|6. | The registrants other certifying officer and I have indicated in this
          quarterly report whether or not there were significant changes in internal
          controls or in other factors that could significantly affect internal controls
          subsequent to the date of our most recent evaluation, including any corrective
          actions with regard to significant deficiencies and material weaknesses.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                    |  |                                                               | 
|------------------- |  | ------------------------------------------------------------- | 
|Date:  May 14, 2003 |  | /s/ R. EUGENE GOODSONR. Eugene GoodsonChief Executive Officer | 

---

# CERTIFICATION PURSUANT
TO
SECTION 302(a) OF THE
SARBANES-OXLEY ACT OF 2002

I, Dennis E. Bunday, certify that:

|1. | I have reviewed this quarterly report on Form 10-Q of Williams Control, Inc.;
|-- | -----------------------------------------------------------------------------

|2. | Based on my knowledge, this quarterly report does not contain any untrue
          statement of a material fact or omit to state a material fact necessary to make
          the statements made, in light of the circumstances under which such statements
          were made, not misleading with respect to the period covered by this quarterly
          report;
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. | Based on my knowledge, the financial statements, and other financial information
          included in this quarterly report, fairly present in all material respects the
          financial condition, results of operations and cash flows of the registrant as
          of, and for, the periods presented in this quarterly report;
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. | The registrants other certifying officer and I are responsible for
          establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | a) | designed such disclosure controls and procedures to ensure that material
               information relating to the registrant, including its consolidated subsidiaries,
               is made known to us by others within those entities, particularly during the
               period in which this quarterly report is being prepared;
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | b) | evaluated the effectiveness of the registrants disclosure controls and
               procedures as of a date within 90 days prior to the filing date of this
               quarterly report (the Evaluation Date); and
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | c) | presented in this quarterly report our conclusions about the effectiveness of
               the disclosure controls and procedures based on our evaluation as of the
               Evaluation Date;
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5. | The
registrants other certifying officer and I have disclosed, based on           our
most recent evaluation, to the registrants auditors and the audit committee of
registrants board of directors:
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | a) | all
significant deficiencies in the design or operation of internal controls           which
could adversely affect the registrants ability to record, process, summarize and
report financial data and have identified for the registrants auditors any material
weaknesses in internal controls; and
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | b) | any fraud, whether or not material, that involves management or other employees
               who have a significant role in the registrants internal controls; and
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

|6. | The registrants other certifying officer and I have indicated in this
          quarterly report whether or not there were significant changes in internal
          controls or in other factors that could significantly affect internal controls
          subsequent to the date of our most recent evaluation, including any corrective
          actions with regard to significant deficiencies and material weaknesses.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                    |  |                                                             | 
|------------------- |  | ----------------------------------------------------------- | 
|Date:  May 14, 2003 |  | /s/ DENNIS E. BUNDAYDennis E. BundayChief Financial Officer |