UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, 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: June 30, 2001


                                       OR

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

                        For the transition period from to


                         Commission file number 0-18083


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

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

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


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


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                  Yes  X   No
                                      ---     ---

The number of shares outstanding of the registrant's  common stock as of July
31, 2001: 19,921,114


<PAGE>


                             Williams Controls, Inc.

                                      Index


                                                                           Page
                                                                          Number

Part I.  Financial Information

  Item 1.  Financial Statements

           Consolidated Balance Sheets, June 30, 2001
             (unaudited) and September 30, 2000                             1

           Unaudited Consolidated Statements of Operations,
             three and nine months ended June 30, 2001 and 2000
             (as restated)                                                  2

           Unaudited Consolidated Statements of Cash Flows,
             nine months ended June 30, 2001 and 2000
             (as restated)                                                  3

           Notes to Unaudited Consolidated Financial Statements            4-7

  Item 2.  Management's Discussion and Analysis
             of Financial Condition and Results of Operations              8-11


Part II.  Other Information

  Item 1.  Legal Proceedings                                                12

  Item 2.  Changes in Securities and Use of Proceeds                        12

  Item 3.  Defaults Upon Senior Securities                                  12

  Item 4.  Submission of Matters to a Vote of Security Holders              12

  Item 5.  Other Information                                                12

  Item 6.  Exhibits and Reports on Form 8-K                                 12

           Signature Page                                                   12








<PAGE>


                                     Part I

Item 1.
                             Williams Controls Inc.
                           Consolidated Balance Sheets
         (Dollars in thousands, except share and per share information)
<TABLE>
<CAPTION>
<S>                                                                   <C>                     <C>

                                                                            June 30,              September 30,
                                                                              2001                    2000
                                                                          (unaudited)
                                                                       -------------------    ---------------------
                           ASSETS
Current Assets:
   Cash and cash equivalents                                                 $      -                 $      30
   Trade and other accounts receivable, less allowance of $234
     and $508 at June 30, 2001 and September 30, 2000, respectively             8,237                    11,357
   Inventories                                                                  4,563                     8,016
   Other current assets                                                         1,801                     1,158
                                                                       -------------------    ---------------------
     Total current assets                                                      14,601                    20,561

   Property plant and equipment, net                                           14,620                    21,486
   Investment in and note receivable from affiliate                             3,065                     1,615
   Goodwill and intangible assets, net                                            125                     5,165
   Other assets                                                                    69                       322
                                                                       -------------------    ---------------------
     Total assets                                                            $ 32,480                 $  49,149
                                                                       ===================    =====================

            LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

Current Liabilities:
   Accounts payable                                                          $ 10,393                 $  11,363
   Accrued expenses                                                             7,464                     4,574
   Non-refundable deposit                                                           -                       500
   Current portion of long-term debt and capital leases                         8,143                    21,802
   Secured subordinated debt, net                                               4,476                         -
                                                                       -------------------     --------------------
      Total current liabilities                                                30,476                    38,239

Long-term debt and capital lease obligations                                    3,609                     4,567
Other liabilities                                                               3,878                     3,259
Convertible subordinated debt, net                                              2,071                     2,040

Commitments and contingencies

Shareholders' equity (deficit):
   Preferred stock ($.01 par value, 50,000,000 authorized;
      78,400 issued and outstanding at June 30, 2001
      and September 30, 2000)                                                       1                         1
   Common stock ($.01 par value, 50,000,000 authorized;
      19,921,114 issued at June 30, 2001 and
      September 30, 2000)                                                         199                       199
   Additional paid-in capital                                                  23,069                    21,744
   Accumulated deficit                                                        (29,946)                  (20,023)
   Treasury stock (130,200 shares at June 30, 2001
      and September 30, 2000)                                                    (377)                     (377)
   Note receivable                                                               (500)                     (500)
                                                                       -------------------     --------------------
      Total shareholders' equity (deficit)                                     (7,554)                    1,044
                                                                       -------------------     --------------------

        Total liabilities and shareholders' equity (deficit)                 $ 32,480                 $  49,149
                                                                       ===================     ====================




        The accompanying notes are an integral part of these balance sheets.
</TABLE>

<PAGE>


                                       1



                             Williams Controls, Inc.
                      Consolidated Statements of Operations
         (Dollars in thousands, except share and per share information)
                                  (unaudited)
<TABLE>
<CAPTION>
<S>                                            <C>                <C>                <C>                <C>



                                               Three months       Three months        Nine months       Nine months
                                                   Ended              Ended              Ended             Ended
                                                  June 30,           June 30,           June 30,          June 30,
                                                    2001               2000               2001              2000
                                                                   (as restated,                        (as restated,
                                                                    see Note 3)                          see Note 3)
                                               --------------     --------------     --------------     --------------

Sales                                             $12,601            $18,022            $42,610            $51,495
Cost of sales                                      10,533             13,368             35,364             37,843
                                               --------------     --------------     --------------     --------------
Gross margin                                        2,068              4,654              7,246             13,652

Operating expenses:
  Research and development                          1,213              2,068              3,180              5,239
  Selling                                             292                516              1,058              1,381
  Administration                                    1,970              2,308              6,748              6,564
  Gain on sale of land and building - Aptek        (1,837)                 -             (1,837)                 -
  Gain on sale of Geofocus                         (2,486)                 -             (2,486)                 -
  Loss on impairment of assets - PPT                    -                  -              1,996                  -
  Loss on impairment of assets - ProActive              -                  -              4,366                  -
                                               --------------     --------------     --------------     --------------

Earnings (loss) from operations                     2,916               (238)            (5,779)               468

Other (income) expenses:
   Interest income                                     (8)              (180)                (3)              (290)
   Interest expense                                 1,210                862              3,346              2,053
   Other (income) expense, net                        (70)               (10)               (95)               (46)
   Equity interest in loss of                           -                624                  -              2,857
     affiliate                                 --------------     --------------     --------------     --------------

     Total other expenses                           1,132              1,296              3,248              4,574
                                               --------------     --------------     --------------     --------------


Income (Loss) from operations before
   income tax benefit                               1,784             (1,534)            (9,027)            (4,106)
Income tax expense (benefit)                            -               (361)                 -               (633)
                                               --------------     --------------     --------------     --------------

Net income (loss)                                   1,784             (1,173)            (9,027)            (3,473)

Dividends on preferred stock                         (147)              (148)              (896)              (442)
                                               --------------     --------------     --------------     --------------
Net income (loss) allocable to common
  shareholders                                    $ 1,637            $(1,321)          $ (9,923)           $(3,915)
                                               ==============     ==============     ==============     ==============


Net income (loss) per common share - basic        $  0.08            $ (0.07)           $ (0.50)           $ (0.20)
                                               ==============     ==============     ==============     ==============
Weighted average shares used in per share
  calculation basic                              19,921,114         19,789,396         19,921,114         19,787,131
                                               ==============     ==============     ==============     ==============

Net income (loss) per common share - diluted      $  0.07            $ (0.07)           $ (0.50)           $ (0.20)
                                               ==============     ==============     ==============     ==============
Weighted  average  shares  used in per  share
calculation - diluted                            26,356,023         19,789,396         19,921,114         19,787,131
                                               ==============     ==============     ==============     ==============


</TABLE>

        The accompanying notes are an integral part of these statements.

                                       2
<PAGE>


                             Williams Controls, Inc.
                      Consolidated Statements of Cash Flows
                             (Dollars in thousands)
                                   (Unaudited)
<TABLE>
<CAPTION>
<S>                                         <C>                  <C>


                                              Nine Months         Nine Months
                                                 Ended               Ended
                                                June 30,            June 30,
                                                  2001                2000
                                                                  (as restated,
                                                                   see Note 3)
                                             --------------      ---------------
Cash flows from operating activities:
  Net loss                                     $(9,027)             $ (3,473)
Adjustments  to reconcile net loss
  to net cash provided by operations:
      Depreciation and amortization               2,809                2,185
      Gain on sale of Aptek land and building    (1,837)                   -
      Gain on sale of GeoFocus                   (2,486)                   -
      Equity interest in loss of affiliate            -                2,857
      Loss from impairment of assets - PPT        1,996                    -
      Loss from impairment of assets - ProActive  4,366                    -
      Deferred income taxes                           -                 (788)
Changes in working capital:
      Receivables, net                            3,102                 (303)
      Inventories                                 3,393                  254
      Accounts payable and accrued expenses         885                  344
      Other                                         561                  903
                                             --------------      ---------------
Net cash provided by operating activities         3,762                1,979


Cash flows from investing activities:
  Payments for property, plant and equipment       (804)              (2,156)
  Proceeds from sale of Aptek land and building   5,750                    -
  Proceeds from sale of Geofocus                  2,900                    -
  Increase in investment in and notes            (1,450)                   -
      receivable from affiliate
                                             --------------      ---------------
Net cash provided by investing activities         6,396               (2,156)


Cash flows from financing activities:
  Borrowing under term notes                          -                1,800
  Proceeds from note payable                          -                  500
  Net repayments  of long-term debt and
     capital lease obligations                  (14,617)              (5,524)
  Net proceeds from subordinated debt             4,576                1,965
  Payment of other liability                          -                  (79)
  Preferred dividends                              (147)                (442)
  Proceeds from issuance of common stock              -                   32
                                             --------------      ---------------
Net cash used in financing activities           (10,188)              (1,748)

Net cash used in discontinued operations              -                 (211)

Net increase (decrease) in cash and cash            (30)              (2,136)
  equivalents
Cash and cash equivalents at beginning of
  period                                             30                2,323
                                             --------------      ---------------
Cash and cash equivalents at end of period     $      -             $    187
                                             ==============      ===============

Supplemental disclosure of cash flow
  information:
      Interest paid                           $   3,346             $  1,851

      Income taxes paid (refund)              $    (158)            $   (331)
                                             --------------      ---------------
Supplemental disclosure of non-cash
  investing and financing activities

Capital leases for equipment                   $      -             $    200

Dividends accrued not paid                     $    294             $      -

Dividends for implied return on preferred      $    455             $      -
  stock

Secured subordinated debt issuance costs       $     57             $    231

Secured subordinated debt discount             $    813             $    110

Debt modification fee accrued not paid         $    300             $      -

Tax benefits related to stock options          $      -             $      1
                                             --------------      ---------------



        The accompanying notes are an integral part of these statements.
</TABLE>

                                      3
<PAGE>

                             Williams Controls, Inc.
              Notes to Unaudited Consolidated Financial Statement
                Three and Nine Months ended June 30, 2001 & 2000
            (Dollars in thousands, except share & per share amounts)


Cautionary Statement: This report contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements   include,   without  limitation   statements  using  terms  such  as
"believes","expects",  "may", "will", "should",  "opinion",  "anticipates",  and
similar  phrases as well as 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,   disposition   of  any  current   business  of  the  Company.   These
forward-looking  statements are subject to the business and economic risks faced
by the  Company  including  the  ability of the  Company to  generate  or obtain
sufficient  working  capital to continue its  operations.  The Company's  actual
results could differ materially from those anticipated in these  forward-looking
statements  as a  result  of the  factors  described  above  and  other  factors
described elsewhere in this report.

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");  GeoFocus,  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") is
hereinafter referred to as the "Company" or "Registrant."

2.  Interim Consolidated Financial Statements

The unaudited interim  consolidated  financial  statements have been prepared by
the Company and, in the opinion of management,  reflect all material adjustments
necessary to a fair statement of results for the interim periods presented.  The
interim results are not necessarily  indicative of the results  expected for the
entire fiscal year. Certain information and footnote disclosure made in the last
annual  report on Form  10-K have been  condensed  or  omitted  for the  interim
consolidated  statements.  Certain  costs  are  estimated  for the full year and
allocated  to interim  periods  based on  activity  associated  with the interim
period.  Accordingly,  such costs are subject to year-end adjustment.  It is the
Company's  opinion that,  when the interim  consolidated  statements are read in
conjunction  with the  September  30,  2000  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  inter-company  accounts and transactions
have been eliminated.

3.  Restatement

During the fourth  quarter of the fiscal  year ended  September  30,  2000,  the
Company applied the provisions of Emerging  Issues Task Force 99-10  "Percentage
Used to  Determine  the  amount of Equity  Method  Losses"  (EITF  99-10) in the
calculation  of  Equity  Interest  in  Loss  of  Affiliate  in its  Consolidated
Financial  Statements.   This  pronouncement  provides  for  the  percentage  of
ownership to be determined by the  liquidation  order of the investment  held to
the total of each particular level of investment held by the investor  contained
in the financial  statements of the investee.  The Company's  investment in Ajay
Sports,  Inc.,  an affiliate,  consists of common and preferred  stock and notes
receivable.  For the first three-quarters of the fiscal year ended September 30,
2000, the Equity  Interest in Loss of Affiliate was computed  utilizing only the
percentage of common stock  ownership held by the Company in Ajay. The effect of
EITF  99-10 in the  fourth  quarter of 2000 was to  substantially  increase  the
Company's  Equity  Interest in Loss of Affiliate from amounts that were recorded
using only the  percentage of common stock  ownership.  EITF 99-10 was effective
for the  Company's  first quarter of fiscal 2000,  accordingly,  the Company has
restated its previously reported quarterly and nine month amounts to reflect the
proper  application  of  EITF  99-10.  The  effect  of this  restatement  on the
operating  results  for the  three and nine  months  ended  June 30,  2000 is as
follows:
<TABLE>
<CAPTION>
<S>                                 <C>              <C>            <C>                  <C>

                                         Three Months Ended                 Nine Months Ended
                                           June 30, 2000                      June 30, 2000
                                    As Previously        As            As Previously        As
                                       Reported      Restated             Reported       Restated

Loss from operations
  before income tax benefit         $    (940)       $ (1,534)       $   (1,649)         $ (4,106)

Net loss                                 (579)         (1,173)           (1,016)           (3,473)

Net loss allocable to common
 shareholders                            (727)          (1,321)          (1,458)           (3,915)

Net loss per common share-basic         (0.04)           (0.07)           (0.07)           ( 0.20)

Net loss per common share-diluted       (0.04)           (0.07)           (0.07)            (0.20)

No additional  income tax benefit was recorded in the three or nine months ended
June 30, 2000 as a result of the  restatement of the Equity  Interest in Loss of
Affiliate.
</TABLE>


4.  Going Concern Matters

The accompanying consolidated financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. For the three months ended June
30, 2001, the Company recognized income of $1,637 and for the three months ended
June 30, 2000 the company incurred losses of $(1,321), respectively, and for the
nine months ended June 30, 2001 and 2000 the Company incurred losses of $(9,923)
and $(3,915),  respectively. In addition, the majority of the Company's accounts
payable are  significantly  past due.  Although the  Company's  working  capital
deficit  improved from  $(17,678) at September 30, 2000 to $(15,875) at June 30,
2001 it still remained in a deficit position. Stockholders' equity has decreased
from $1,044 at  September  30,  2000 to a deficit of $(7,554) at June 30,  2001.
During the third quarter of fiscal 2001, the Company  obtained a forbearance and
extension of its loan agreement with the bank through  December 31, 2001.  Also,
as described in Note 8 to the Unaudited Consolidated  Financial Statements,  the
Company was in compliance with convenants of the amended forebearance  agreement
but the Company was not in compliance  with its debt covenants  under the credit
facility with its primary bank (the Bank).  Although a forbearance agreement was
reached with the Bank through  December 31, 2001,  no waivers have been obtained
and the default has not been cured.  The Company has classified its debt owed to
the Bank of $6,343  as  current  liabilities  in the  accompanying  Consolidated
Balance Sheet at June 30, 2001.

During the second quarter of fiscal 2001, the Company had fully borrowed and was
in an overadvance  position  under its credit  facility until the Company raised
$4,576, net of expenses,  from a private placement of debt in February 2001. The
$4,576 raised was in the form of $4,950 of secured subordinated debentures which
are due March 1, 2002,  bearing interest at 12% and include warrants to purchase
the  Company's  common  stock at $1.375  per share for each  $2.00 of  principal
amounts of the debentures  purchased.  The Private  Placement funds were used to
pay down bank debt,  including the overadvance  from the Bank and to support the
operations  of the  Company.  Due to the lack of  borrowing  capacity  under the
credit facility,  the Company's  working capital  deficit,  the Company's debts,
including  accounts payable,  and other factors as outlined herein,  the Company
has a significant lack of liquidity.  Accordingly, the Company's continuation as
a going concern is dependent upon,  among other things,  its ability to generate
sufficient  cash flow to meet its  obligations on a timely basis, to comply with
the terms of its credit facility,  to obtain additional financing or refinancing
as may be required,  and ultimately to attain  profitability.  The above matters
raise a  substantial  doubt about the  Company's  ability to continue as a going
concern. The financial statements do not include any adjustments relating to the
recoverability  and  classification  of asset carrying amounts or the amount and
classification  of liabilities that might result should the Company be unable to
continue as a going concern.

5.  Comprehensive Income (Loss)

In June 1997, the Financial Accounting Standards Board ("FASB") issued Statement
of  Financial  Accounting  Standards  ("SFAS")  130,  "Reporting   Comprehensive
Income",  which 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 June 30, 2001 and
2000 was $1,784 and $(1,173),  respectively,  and for the nine months ended June
30, 2001 and 2000 the total  comprehensive  (loss) was  $(9,027)  and  $(3,473),
respectively, and consisted solely of net loss. As of June 30, 2001, accumulated
other comprehensive loss was $(29,946) and consisted of accumulated deficit.

6.  Earnings (loss) per Share

Basic  earnings per share ("EPS") and diluted EPS are computed using the methods
prescribed by Statement of Financial Accounting Standards No. 128, "Earnings Per
Share."  Basic EPS is  calculated  using the  weighted-average  number of common
shares  outstanding  for the  period  and  diluted  EPS is  computed  using  the
weighted-average  number of common shares and dilutive common  equivalent shares
outstanding

Following  is a  reconciliation  of basic EPS and  diluted  EPS:

<TABLE>
<CAPTION>
<S>                                      <C>       <C>          <C>          <C>      <C>         <C>
                                               Three Months Ended                  Three Months Ended
                                                 June 30, 2001                       June 30, 2000
                                                                                     (as restated)
                                         --------------------------------    -------------------------------
                                                                  Per                                Per
                                                                 Share                              Share
                                           Loss      Shares      Amount        Loss      Shares     Amount

       Net income (loss) from operations  $1,784                              $(1,173)
       Less-Preferred stock dividends       (147)                                (148)
                                         ---------                           ---------
       Basic EPS-
         Net income (loss) allocable to
         common shareholders              $1,637   19,921,114   $  0.08       $(1,321)  19,789,396   $(0.07)
                                                                =========                          =========
       Effect of dilutive securities -
         Stock options and warrants            -    2,475,000                       -           -
         Convertible preferred stock         147    2,850,909                       -           -
         Convertible subordinated debt        40    1,109,000                       -           -
       Diluted EPS -                     ---------  ----------                --------  ----------
         Net income (loss) allocable to
         common shareholders              $1,824    26,356,023   $  0.07      $(1,321)  19,789,396   $(0.07)
                                         ========= ============ =========    ========= =========== =========


                                               Nine Months Ended                   Nine Months Ended
                                                 June 30, 2001                       June 30, 2000
                                                                                     (as restated)
                                         --------------------------------    -------------------------------
                                                                  Per                                Per
                                                                 Share                              Share
                                           Loss      Shares      Amount        Loss      Shares     Amount

       Net loss from operations           $(9,027)                           $(3,473)
       Less-Preferred stock dividends        (896)                              (442)
                                         ---------                          ---------
       Basic EPS-
         Net loss allocable to
         common shareholders              $(9,923) 19,921,114   $ (0.50)     $(3,915)  19,787,131   $(0.20)
                                                                =========                          =========
       Effect of dilutive securities -
         Stock options and warrants            -           -                        -           -
         Convertible preferred stock           -           -                        -           -
         Convertible subordinated debt         -           -                        -           -
       Diluted EPS -                     ---------  ----------                --------  ----------
         Net loss allocable to
         common shareholders              $(9,923)  19,921,114  $ (0.50)      $(3,915)  19,787,131  $(0.20)
                                         ========= ============ =========    ========= =========== =========

</TABLE>

     For the three months ended June 30, 2001 and 2000,  the Company had options
     and warrants  covering  3,761,879  and 3,412,106  shares,  and for the nine
     months  ended June 30, 2001 and 2000,  the Company had options and warrants
     covering  6,236,879 and  3,412,106  shares  respectively,  of the Company's
     common  stock  that were not  considered  in the  respective  dilutive  EPS
     calculations  since they would  have been  antidilutive.  For the three and
     nine months  ended June 30, 2000 and the nine months  ended June 30,  2001,
     conversion of the preferred shares and convertible  subordinated debt would
     have been  antidilutive and therefore was not considered in the computation
     of diluted earnings per share.

7.   Inventories

     Inventories consisted of the following:

                                        June 30,             September 30,
                                          2001                   2000
                                  -------------------     ------------------
       Raw material                     $3,068                 $6,108
       Work in process                     841                  1,088
       Finished goods                      654                    820
                                  -------------------     -------------------
                                        $4,563                 $8,016
                                  -------------------     -------------------

Finished goods include  component parts and finished product ready for shipment.
The significant  decline in inventories is due to lower overall inventory levels
as a result of the Company's  liquidity  restrictions and termination of the PPT
operations.


8.  Debt

On June 30, 1998, the Company  restructured its credit facility with the Bank to
consist of a revolving  credit  facility  of up to  $16,500,  a $3,100 term loan
(Term Loan I) and a $2,700  real estate  loan.  In  December  1998,  the Company
borrowed  $2,500 under Term Loan II. In July 1999, the Company  borrowed  $2,500
under  Term Loan III.  In  February  2000,  the  Company  borrowed  $1,000 as an
over-advance  (Term Loan IV) of its credit  agreement.  Under the revolver,  the
Company  can borrow up to $14,000  (as per  amendment  to the credit  agreement)
based upon a borrowing base availability  calculated using specified percentages
of eligible  accounts  receivable and  inventory.  Term Loans III and IV and the
real estate loan were  repaid in the third  quarter  2001.  The  revolver  bears
interest at the Bank's  prime rate plus 2.00%,  (8.75% at June 30,  2001).  Term
Loan I bears  interest at the Bank's  prime rate plus  2.25%.  The loans and the
revolving credit facility matured on July 11, 2001, however the Company obtained
an extension of the credit  agreement  under an amended  forebearance  agreement
until December 31, 2001.  Term Loan I was being  amortized over seven years with
all remaining  principal  outstanding due at July 11, 2001;  however,  under the
amended forebearance agreement,  all scheduled principal payments due subsequent
to June 30,  2001 have been  deferred  with the due date of the Term  Loan.  The
entire Term Loan plus the  revolver  will be due on December  31,  2001,  unless
extended.  All loans  are  secured  by  substantially  all of the  assets of the
Company.


The loan agreement  prohibits payment of dividends by the Company except for the
Series A Preferred  dividend,  and  requires  the  Company to  maintain  minimum
working  capital of $12,000  and minimum  tangible  net worth,  as  defined,  of
$11,500.  The loan also  prohibits  additional  indebtedness  and  common  stock
repurchases except through the use of proceeds from stock options exercised, and
restricts  capital  expenditures  to an amount not to exceed $10,500 for the two
years ended September 30, 1999 and not to exceed $2,500 annually thereafter.  In
addition,  the loan  limits  incremental  operating  lease  obligations  to $600
annually.  Fees under the loan agreement include an unused revolver fee of .25%,
a prepayment  penalty fee declining from 3% in 1998 to 0.5% in the year 2001 and
$500 in loan  accommodation  fees in connection with the loan extensions granted
in fiscal 2001.  The  accommodation  fee can be reduced by $100 if the Company's
repayment  of the Term Loans  through  September  30, 2001 exceeds  $2,100.  The
prepayment  fee is waived if the loan is repaid with  proceeds  from the sale of
assets or is  refinanced  with an affiliate of the Bank.  At June 30, 2001,  the
Company was in compliance with covenants of the amended  forebearance  agreement
with the Bank but not in  compliance  with its debt  covenants  for the original
loan  agreement.  No waivers  have been  obtained  and the  default has not been
cured. As a result,  the Company has classified all of its debt with the Bank of
$6,343 as a current liability in the accompanying  Consolidated Balance Sheet at
June 30, 2001. (See Note 4)


9.  Subordinated Debt and Preferred Stock

In  February  2001,  the  Company  issued 12%  secured  subordinated  debentures
totaling $4,950,  due March 1, 2002. Net proceeds to the Company after expenses,
were $4,576 and were used for the payment of bank debt  obligations  and general
operating  purposes.  The  debentures  are secured by  mortgages on certain real
property owned by the Company,  subordinate to certain other senior indebtedness
(as defined). In addition,  the Company issued to each purchaser of debentures a
three year warrant to purchase common stock of the Company,  par value $0.01 per
share,  at $1.375 per share for each  $2.00 of  principal  amount of  debentures
purchased.  The Company also issued the placement  agent a three year warrant to
purchase  shares of the  Company's  common  stock equal to 7.0% of the number of
warrants  issued to the  purchasers.  The exercise price of the placement  agent
warrants is $1.375 per share. The fair value of warrants issued,  totaling $870,
is included as "Additional Paid in Capital" within  Shareholders' Equity with an
offset of $813 against the "Secured  Subordinated  Debt" for the warrants issued
to debenture  holders and an increase of $57 in other  assets for the  placement
agent warrants in the accompanying Consolidated Balance Sheet. The fair value of
the warrants has been allocated using relative fair values.  The discount of the
debentures and the debt issuance costs are being  amortized  using the effective
interest method over the lives of the debt, which is one year.

The  conversion  price for the warrants  issued in  connection  with the secured
subordinated  debt shall be adjusted if the Company sells or distributes  common
stock,  options or warrants to purchase  common stock or securities  convertible
into common stock at a price below the conversion  price of the warrants  issued
in connection with the secured  subordinated debt, subject to certain exceptions
defined  in the  agreement.  The  formula  for  adjustment  is as defined in the
agreement.


In April 2000, the Company issued 7.5% convertible subordinated debentures in an
aggregate  principal amount of $2,140,  due March 31, 2003 including $140 issued
in lieu of the  underwriting  fee. The  debentures  are  unsecured  obligations,
subordinate  to  all  senior  indebtedness  (as  defined).  The  debentures  are
convertible  into shares of the Company's common stock, at a conversion price of
$2.00 per share. In addition, the Company issued to each purchaser of debentures
a three year warrant to purchase common stock of the Company equal to 20% of the
shares of common stock into which such purchaser's debenture is convertible. The
exercise price of the warrants is $2.375 per share. The conversion price for the
convertible  subordinated  debt and  warrants  shall be  adjusted if the Company
sells or distributes common stock,  options or warrants to purchase common stock
or  securities  convertible  into common  stock at a price below the  conversion
price of the  convertible  subordinated  debt,  subject  to  certain  exceptions
defined  in the  agreement.  The  formula  for  adjustment  is as defined in the
agreement.  As a result of the  issuance  of the  secured  subordinated  debt in
February 2001, the conversion  prices of the convertible  subordinated  debt and
the warrants were adjusted to approximately $1.93 and $2.28,  respectively.  The
revised  conversion price does not represent a beneficial  conversion feature to
the holders of the convertible subordinated debt.



In April 1998,  the Company  completed a private  placement of 80,000  shares of
Series A convertible redeemable preferred stock at $100 per share. The preferred
stock  bears a  dividend  rate of 7.5%,  which  is  payable  quarterly,  and was
convertible at the option of the holder into  2,909,091  shares of the Company's
common stock.  Dividends are  cumulative and have  preference  over other equity
distributions.  The preferred  stock  conversion  price shall be adjusted if the
Company  sells or  distributes  common  stock,  options or  warrants to purchase
common stock or  securities  convertible  into common stock at a price below the
preferred stock  conversion  price.  The formula for adjustment is as defined in
the agreement.  The preferred stock conversion price was previously  adjusted to
approximately $2.70 as a result of the issuance of the convertible  subordinated
debt in April 2000. As a result of the issuance of the secured subordinated debt
in  February  2001,  the  preferred  stock  conversion  price  was  adjusted  to
approximately  $2.54.  The revised  conversion  price  resulted in a  beneficial
conversion  feature.  Accordingly,  the  Company  recorded a non-cash  charge of
approximately $455 for additional preferred dividends to account for the implied
value of the beneficial conversion feature.
<PAGE>

10.  Dispositions

PPT
In July 2000,  the Company  entered  into an  agreement to sell PPT, its plastic
injection molding subsidiary,  subject to certain  conditions.  This transaction
was not  consummated  and has been  terminated.  As a result of the inability to
sell PPT and after  reviewing  PPT's  history of operating  problems,  workforce
levels and profitability, PPT operations have been terminated. Management of PPT
evaluated  the  realizability  of the assets of PPT based on the closure and the
Company  recorded an impairment loss on PPT's property,  plant, and equipment of
$1,996 for the three  months  ended  December  31,  2000.  The Company  recorded
additional  losses at PPT for the three months ended June 30, 2001 in connection
with the closure.  Total assets of PPT at June 30, 2001 and  September  30, 2000
were $3,753 and $9,469, respectively.  Net sales and loss from operations of PPT
were $0 and $(750),  and $3,721 and $(352) for the three  months  ended June 30,
2001 and 2000,  respectively.  Net sales  and loss from  operations  of PPT were
$4,029 and  $(6,854)  and $7,517 and $(1,877) for the nine months ended June 30,
2001 and 2000, respectively.

Geofocus
The Company sold its GPS equipment  subsidiary,  Geofocus,  in the quarter ended
June 30, 2001.  The sale price was $3,500.  Proceeds  from the sale were used to
pay down  secured  bank debt.  The gain  recognized  on the sale of Geofocus was
$2,486.  Excluding the gain on the sale, net sales and income (loss) of GeoFocus
were $475 and $(478) and $46 and $(156) for the three months ended June 30, 2001
and 2000,  respectively.  Net sales and income  (loss) of GeoFocus were $807 and
$(858)  and $705 and $(191) for the nine  months  ended June 30,  2001 and 2000,
respectively.


Sale of Aptek Land and Building and Guarantee of Affiliate Debt
The Company sold its manufacturing  facility in Deerfield Beach,  Florida during
the third  quarter 2001 for cash  proceeds of $5,750.  Proceeds were used to pay
off the real  estate  term loan with the Bank,  and pay down  other Bank debt in
accordance  with the terms of the  agreement.  Additionally,  the United  States
National Bank (US Bank) had previously  notified the Company that it intended to
exercise its rights under the Company's  guaranty of $1.3 million of the debt of
Ajay Sports,  Inc.  ("Ajay"),  an  affiliate  of the  Company.  The guaranty was
secured by the Company's Deerfield Beach property and the guaranty was satisfied
from the proceeds of the sale of the Deerfield  Beach  property.  The payment by
the Company of the guaranty to US Bank was $1,450, including unpaid interest and
penalties, and is reflected as an increase in the investment in notes receivable
from  affiliate.  The Company  continues to occupy the building at Aptek under a
short term lease agreement with the new owner. The gain on the sale was $1,837.


11.      Loss on Impairment of Assets - ProActive

In July 1999, the Company purchased the ProActive Pedals (ProActive) division of
Active Tools  Manufacturing  Co., Inc.  ProActive is a designer and developer of
patented   adjustable  food  pedal  systems  and  modular  pedal  systems.   The
acquisition  was  accounted  for using the  purchase  method of  accounting  and
resulted in $1,820 being allocated to developed  technology,  $1,439 to a patent
and patent license agreement  acquired and $2,162 to goodwill,  representing the
excess of the  purchase  price over the fair value of the  assets  acquired  and
liabilities  assumed.

In  accordance  with  Statement  of  Financial  Accounting  Standards  No.  121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed of" (SFAS 121),  long-lived  assets held and used by the Company are
reviewed for impairment  whenever  events or changes in  circumstances  indicate
that the  carrying  amount of an asset may not be  recoverable.  For purposes of
evaluating the recoverability of long-lived  assets, the recoverability  test is
performed using undiscounted net cash flows of the assets.

ProActive's  current sales volumes of adjustable  and modular foot pedal systems
are limited to one contract that ProActive has with a third party. Additionally,
as a result of the Company's overall capital  constraints,  the Company does not
possess the financial  resources to further develop  additional sales volumes or
to achieve the sales volumes originally  projected for ProActive.  Further, as a
result of the recent efforts by W.Y. Campbell & Co. to assist in the sale of the
Company or its operating units, limited interest in ProActive has been expressed
by potential buyers.

As a result of the above  factors,  management  performed an analysis to measure
the impairment of the long-lived assets of ProActive in accordance with SFAS 121
as of March 31, 2001.  Based on management's  analysis it was concluded that the
undiscounted  value of the projected cash flows of ProActive's  current business
was less than the  carrying  value of the  assets of  ProActive  as of March 31,
2001. As a result of this conclusion,  the Company recorded an impairment charge
related to ProActive's  remaining  carrying value of the goodwill and intangible
assets,  totaling $4,366. This amount has been reflected as a separate line item
within the operating  expenses of the consolidated  statements of operations for
the nine month period ended June 30, 2001.


12.  Reclassifications

Certain amounts previously reported in the financial  statements as of September
30,  2000 and for the  three  and nine  months  ended  June 30,  2000  have been
reclassified to conform to current fiscal year presentation.







                                       6
<PAGE>

13.    Segment Information

<TABLE>
<CAPTION>
<S>                                                    <C>                 <C>                <C>                 <C>


                                                        Three months        Three Months        Nine months         Nine months
                                                           Ended               Ended               Ended               Ended
                                                          June 30,            June 30,            June 30,            June 30,
                                                            2001                2000                2001                2000
                                                       ---------------     --------------     ---------------     --------------

Sales by classes of similar products
Vehicle components                                            $11,879            $17,563            $40,073            $49,495
Electrical components and GPS                                     722                459              2,537              2,000
                                                       ---------------     --------------     ---------------     --------------
                                                              $12,601            $18,022            $42,610            $51,495
                                                       ===============     ===============    ===============     ==============

Earnings (loss) from operations
Vehicle components
  Before gain (loss) on disposition of assets                 $  (631)            $  946            $ (1,389)          $  3,066
  Gain on sale of Aptek land and building                       1,837                  -               1,837
  Loss on impairment of assets                                      -                  -              (6,362)                 -
                                                       ---------------     --------------      ---------------     --------------
  Total vehicle components                                      1,206                946              (5,914)             3,066
Electrical components and GPS before gain                        (776)            (1,184)             (2,351)            (2,598)
Gain on sale of Geofocus                                        2,486                  -               2,486
                                                       ---------------     --------------      ---------------     --------------
                                                              $ 2,916             $ (238)           $ (5,779)           $   468
                                                       ===============     ==============      ===============     ==============

Identifiable assets
Vehicle components                                                                                    $18,319            $44,410
Electrical components and GPS                                                                          10,954             11,911
Corporate                                                                                               3,207              6,492
                                                                                               ---------------     --------------
Total assets - continuing operations                                                                   32,480             62,813
                                                                                               ---------------     --------------
Agricultural equipment - discontinued operations                                                            -                  -
                                                                                               ---------------     --------------
Total assets                                                                                          $32,480            $62,813
                                                                                               ===============     ==============

Capital expenditures
Vehicle components                                            $   312            $   928              $   795            $ 1,889
Electrical components and GPS                                       -                 80                    9                267
                                                       ---------------     --------------      ---------------     --------------
Total capital expenditures                                    $   312            $ 1,008              $   804            $ 2,156
                                                       ===============     ==============      ===============     ==============


Depreciation and amortization
Vehicle components                                            $   511            $   646              $ 2,548            $ 1,910
Electrical components and GPS                                      82                100                  261                275
                                                       ---------------     --------------      ---------------     --------------
Total depreciation and amortization                           $   593            $   746              $ 2,809            $ 2,185
                                                       ===============     ==============      ===============     ==============
</TABLE>


                                       7
<PAGE>

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

Financial Position and Capital Resources
Financial Condition, Liquidity and Capital Resources

The Company  continued to  experience  liquidity  difficulties  during the third
fiscal quarter ended June 30, 2001. The Company's liquidity  position,  however,
improved in the third quarter 2001 from the second quarter 2001. The improvement
was primarily as a result of the sale of the Company's GPS subsidiary, GeoFocus,
and  the  sale of the  Company's  manufacturing  facility  in  Deerfield  Beach,
Florida.  The Company  continues to occupy the building under a short term lease
agreement with the new owner.  Even with the improved  liquidity,  the Company's
working capital remains  negative.  The deficit however decreased from $(20,856)
at March 31, 2001 and  $(17,678) at September  30, 2000 to $(15,875) at June 30,
2001. In accordance with the provisions of the Company's  lending agreement with
the Bank, the Company reduced its Bank borrowings from $13,598 at March 31, 2001
to $6,343 at June 30, 2001 primarily as a result of the sale of GeoFocus and the
Deerfield Beach  property.  Equity declined to a deficit of $(7,554) at June 30,
2001 from $1,044 at September 30, 2000.  Additionally,  the Company has accrued,
but not paid,  dividends on its preferred  stock since January 2001.  During the
third  quarter  of fiscal  2001 the  Company  reported  a $1,637  profit,  which
includes  gains on the sale of  GeoFocus  and the  Deerfield  Beach  building of
$4,323, compared to a loss of $(1,321) for the third quarter of fiscal 2000.

Also, as described in Note 8 to the Unaudited Consolidated Financial Statements,
the Company was not in  compliance  with its debt  covenants  with the Bank.  No
waivers have been obtained and the default has not been cured.  During the third
quarter a forbearance  agreement was reached with the Bank  providing  financing
through December 31, 2001. Accordingly,  all of the debt with the Bank of $6,343
has been  classified as current  liabilities  in the  accompanying  Consolidated
Balance Sheet at June 30, 2001.

During the second quarter of fiscal 2001, the Company had fully borrowed and was
in an overadvance  position under its credit  agreement until the Company raised
$4,576,  net of expenses,  from a Private Placement in February 2001. The $4,576
raised was in the form of $4,950 of secured  subordinated  debentures  which are
due March 1, 2002,  bearing interest at 12% and include warrants to purchase the
Company's  common stock at $1.375 per share for each $2.00 of principal  amounts
of the debentures  purchased.  The Private Placement funds were used to pay down
bank debt,  including an overadvance from the Bank and to support the operations
of the Company.

As previously reported,  the Company has retained the investment banking firm of
W.Y. Campbell & Co. to investigate  available strategic  alternatives  including
selling all or part of the Company to a third party or raising sufficient equity
and/or debt financing to support the operations of the Company.  On February 22,
2001,  the board of directors of the Company  announced that based on the review
of  these  strategic  alternatives,  it would  immediately  pursue a sale of the
Company, or its individual operating subsidiaries,  as a means to maximize value
to its  shareholders.  The Company has retained W.Y. Campbell & Co. to assist in
the sale of the  Company  or its  operating  units.  Although  the  Company  has
obtained the private  placement funds and a forbearance  from the Bank to enable
the Company to pursue the sale process,  additional financing may be required to
complete the sale  process.  There is no assurance  that (i) the Company will be
able to obtain  adequate  working  capital in the amounts  needed to sustain its
operations or sell its business or parts of it in a timely  fashion or (ii) that
the sole process will be  successful.  If the Company is not successful in these
sales or is unable to secure additional funding to operate the Company,  it may
be forced into a reorganization under the United States Bankruptcy Code.

In addition,  due to the Company's  financial  difficulties,  it has substantial
outstanding  payables with  essentially  all of its suppliers of raw  materials,
components and services. As a result of these long outstanding  payables,  these
vendors  could decide to  discontinue  the  Company's  supply of raw  materials,
components  and  services  which  could  cause  a  disruption  in the  Company's
production  and  operations.  The  Company's  business,   prospects,   financial
condition and results of operations may be materially adversely affected by such
a disruption or delay.

The above  matters  raise a  substantial  doubt about the  Company's  ability to
continue  as a going  concern.  The  financial  statements  do not  include  any
adjustments  relating to the recoverability and classification of asset carrying
amounts or the amount and classification of liabilities that might result should
the Company be unable to continue as a going concern.

Cash flow from operations increased to $3,762 for the nine months ended June 30,
2001 from $1,979 for the nine  months  ended June 30,  2000.  The  increase  was
primarily due to the decrease in  receivables  and  inventories  between  years,
offset by a greater  net loss in 2001 than  2000.  The  positive  cash flow from
operations  for the nine months  ended June 30, 2001  differs  from the net loss
from operations  primarily because of noncash  operating  expenses of $2,809 for
depreciation and amortization, an impairment loss on assets at PPT of $1,996, an
impairment  loss on assets at ProActive of $4,366,  a decrease in receivables of
$3,102,  a decrease in inventories of $3,393 and an increase in accounts payable
and  accrued  expenses of $885,  offset by the gains from sale of  Geofocus  and
Aptek land and building of $2,486 and $1,837, respectively.

Cash used in financing  activities  was $(10,188) for the nine months ended June
30, 2001 as compared  to a use of  $(1,748)  for the nine months  ended June 30,
2000,  reflecting  net  payments  on  debt of  $9,691,  $585  of  capital  lease
obligations, $147 of preferred stock dividends all partially offset by $4,576 of
net  proceeds  received  from the  secured  subordinated  debentures  issued  in
February 2001.  Additional sources of cash for the payment of debt were provided
by the proceeds  from the sale of Aptek land and building  and  Geofocus,  which
totaled $8,650.

Guaranty of Affiliate Debt
United States  National Bank (US Bank) had previously  notified the Company that
it intended to exercise its rights under the Company's  guaranty of $1.3 million
of the debt of Ajay Sports,  Inc.  ("Ajay"),  an  affiliate of the Company.  The
guaranty was secured by the Company's  Deerfield Beach property and the guaranty
was satisfied from the proceeds of the sale of the property.  The payment by the
Company of the guaranty to US Bank was $1,450,  and included unpaid interest and
penalties, and is reflected as an increase in Investment in and notes receivable
from affiliate.  The Company's former chief executive  officer,  Thomas W. Itin,
who is an officer and shareholder of Ajay, has guaranteed this obligation to the
Company,  along with certain loans and investments made by the Company to and in
Ajay. Mr. Itin has taken the position that, as a result of his retirement,  this
guarantee and his other  guarantees  of certain  loans and  investment in and to
Ajay are no longer in effect.  The Company  disagrees with the position taken by
Mr. Itin.

Delisting from the Nasdaq National Market
The Company stock was de-listed from the Nasdaq  National Market on July 2, 2001
as its net tangible  assets were below the  required  minimum for listing on the
Nasdaq National Market. The price of its common stock may be obtained on the OTC
Bulletin Board.

Recent Appointment of New Director
As  previously  disclosed in the  Company's  report on Form 10-Q for the quarter
ended March 31, 2001, the Company recently  appointed Douglas Hailey to fill the
vacant position on the Board of Directors. Mr. Hailey is a Vice President of the
Investment  Banking Division of the investment banking firm of Taglich Brothers,
Inc. As part of the Placement Agent  Agreement for the Private  Placement of the
$4,950 of Secured  Subordinated  Debentures due March 1, 2002 Taglich  Brothers,
Inc. was permitted one board seat. Mr Hailey was appointed on March 13, 2001 and
his term expires in 2002.

Market Risk
The Company may be exposed to future  interest rate changes on its variable rate
debt which totalled $6,343 at June 30, 2001. 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.

Recent FASB Pronouncements
In June 2000 the FASB issued Statement of Financial Accounting Standards No.138,
"Accounting  for Certain  Derivative  Instruments  and Hedging  Activities  - an
amendment of FASB Statement No. 133" ("SFAS 138").  In June 1999 the FASB issued
Statement of Financial  Accounting  Standards No. 137, Accounting for Derivative
Instruments  and Hedging  Activities."  ("SFAS 137") SFAS 137 is an amendment to
SFAS 133,  "Accounting for Derivative  Instruments and hedging Activities." SFAS
133,  as  amended  by SFAS  137 and 138  establishes  accounting  and  reporting
standards  for all  derivative  instruments.  SFAS 133 and 138 are effective for
fiscal years beginning after June 15, 2000. The Company adopted the new standard
in fiscal 2001.  The Company has made an assessment of its potential  derivative
instruments  and based on that  assessment  the adoption of SFAS 133 and 138 has
had no impact on the Company's financial position or results of operations.

In July 2001,  the  Financial  Accounting  Standards  Board issued SFAS No. 141,
"Business  Combinations,"  and SFAS No.  142,  "Goodwill  and  Other  Intangible
Assets" SFAS No. 141 requires that the purchase method of accounting be used for
all  business   combinations   initiated   after  June  30,  2001.  Use  of  the
pooling-of-interests method will be prohibited on a prospective basis only. SFAS
No. 142 changes the  accounting for goodwill from an  amortization  method to an
impairment-only  approach.  Thus,  amortization of goodwill,  including goodwill
recorded  in past  business  combinations,  will  cease  upon  adoption  of that
Statement,  which for the Company will be fiscal year 2002. The Company does not
expect  that the  adoption  of either  SFAS 141 or SFAS 142 to have  significant
impact on the financial condition or results of operations of the Company.
<PAGE>

Results of Operations
Three  months  ended June 30, 2001  compared to the three  months ended June 30,
2000, as restated (Note 3)

Sales

Total  sales  decreased  $5,421,  or 30.1%,  to $12,601 in the third  quarter of
fiscal 2001 from $18,022 in the third  quarter of fiscal 2000,  primarily due to
the closure of  operations  at PPT,  lower unit sales  volumes in the  Company's
vehicle  components  segment,  offset in part by  slightly  higher  sales in the
Company's  electrical  components and GPS business segment. The Company sold its
GPS business in June 2001.

Sales in the Vehicle  component  business segment  decreased $5,684, or 32.4% to
$11,879  from the sales  levels  achieved in the third  quarter of fiscal  2000.
Contributing to the decline was lower unit sales of electronic throttle controls
as a result of overall slow down in truck and  automobile  production.  However,
the largest factor in the reduced sales volume was the closure during the second
quarter  of Fiscal  2001 of the  Company's  Premier  Plastics  Technology  (PPT)
plastic  injection  molding and tooling  subsidiary.  The Company  recognized no
sales  from this  terminated  operation  in the  third  quarter  of fiscal  2001
compared  to sales of $3,271  from PPT in the  corresponding  quarter  of fiscal
2000. The Company  previously  recorded an impairment  loss of $1,996 related to
PPT in the first quarter of 2001.

The Electrical  Components and GPS component  business  segment sales  increased
$263 to $722 from the third quarter fiscal 2000 sales levels primarily due to an
increase in sales at Geofocus of $429.

Gross Margin
Gross  Margins  from  operations  were  $2,068,  or 16.4% of sales in the  third
quarter  of 2001  compared  to  $4,654,  or 25.8% of sales in the  corresponding
quarter of 2000.  The reduced  gross profit  margin was  primarily  due to lower
sales levels and costs related to the  settlement  of capital lease  obligations
related to the closure of PPT. Additionally, although much less significant than
the prior quarter, the Company's liquidity  constraints  continued to cause some
disruption   in  the   Company's   materials   flow,   resulting  in  production
inefficiencies and higher product shipping costs, thus further having a negative
effect on gross profit margins.

Operating Expenses

Operating  expenses,  excluding  gains on sale of Aptek  land and  building  and
Geofocus,  were  $3,475 for the three  months  ended June 30,  2001  compared to
$4,892 for the comparable  fiscal 2000 period,  a decrease of $1,417,  or 29.0%,
primarily as a result of decreased research and development expenses and selling
expenses and the closure of the PPT operations.  Operating  expenses,  excluding
the gains discussed  above, as a percentage of net sales,  remained  essentially
unchanged at 27.6% in the third  quarter of fiscal 2001 compared to 27.1% in the
comparable 2000 quarter.

Research and  development  expenses  decreased  $855, to $1,213 during the third
quarter of fiscal 2001 compared to $2,068 in the comparable  fiscal 2000 period.
As a percent of sales, research and development expenses decreased from 11.5% to
9.6%. This is primarily due to significant  expenditures  and higher payroll for
employees  working for the Chrysler RS Program in fiscal 2000.  This program was
cancelled  late in the  third  quarter  fiscal  2000.  Last  year  research  and
development  expenses  increased  to support  new  product  development  for the
automotive and truck ETC and adjustable foot pedal products, and for development
of sensor-related  products and for existing customers.  This year the focus has
shifted to production of adjustable foot pedals and sensor-related products.

Administrative  expenses  decreased  $338 to $1,970  during the third quarter of
fiscal  2001  compared to $2,308 in  comparable  fiscal 2000 period due to lower
overall spending on administrative expenditures and the closure of PPT offset by
expenses related to the closing of PPT.

Interest and Other Expenses
Interest  expense  increased  $348 or 40.4% to $1,210 in the  third  quarter  of
fiscal 2001 from $862 in the third  quarter of fiscal 2000 due to  amortization
of  the  Secured   Subordinated   Debenture   warrant  discounts  (Note  9)  and
amortization of costs related to obtaining the additional financing.

Net profit available to common shareholders
Basic net profit allocable to common shareholders was $0.08 in the quarter ended
June 30, 2001 compared to $(0.07) in the comparative prior year. The improvement
was due  recognitions  of gains on the sale of the Deerfield  Beach property and
the  GeoFocus   subsidiary,   and  decreased   research  and   development   and
administration  costs offset by decreased  gross margins and increased  interest
expense.  The  effective  income tax rates were 0.00% and 23.5% for the quarters
ended June 30, 2001 and 2000,  respectively.  The Company is in a net  operating
loss carry forward  position and is providing a 100% valuation  allowance on all
deferred tax assets in the current fiscal year due to going concern issues.

Results of Operations
Nine months ended June 30, 2001 compared to the nine months ended June 30, 2000,
as restated (Note 3)

Total sales decreased  $8,885, or 17.3%, to $42,610 for the first nine months of
fiscal 2001 from $51,495 for the first nine months of fiscal 2000, primarily due
to lower unit sales volumes in the Company's  vehicle  components  segment,  the
closure of  operations  at PPT slightly  offset by higher sales in the Company's
electrical components and GPS business segment.

Sales in the Vehicle  component  business segment  decreased $9,422, or 19.0% to
$40,073 over the sales levels  achieved in the first nine months of fiscal 2000.
A significant factor in the decline was lower unit sales of electronic  throttle
controls.  Additionally, in February the management of the Company began closing
the  operations  of PPT,  resulting  in lower  sales  volumes.  Except  for some
completion of existing  orders,  PPT ceased  operations  on March 31, 2001.  PPT
sales were $4,029 and $7,517 for the nine  months  ended June 30, 2001 and 2000,
respectively.

The Electrical Components and GPS component business segment sales for the first
nine  months  of fiscal  2001 were  $2,537,  a  increase  of $537 over the third
quarter  fiscal  2000  sales  levels.  Lower  sales  volumes  of  the  Company's
electronic  sensors  were  partially  offset  by  higher  sales  volumes  in the
Company's GPS business. The Company sold its GPS business in June 2001.

Gross Margin
Gross Margins from operations  were $7,246,  or 17.0% of sales in the first nine
months  of  fiscal  2001  compared  to  $13,562,   or  26.3%  of  sales  in  the
corresponding  nine month period of 2000.  The reduced gross profit margins were
partially  due to  lower  overall  sales  levels.  Additionally,  the  Company's
liquidity  constraints have caused disruptions in the Company's  materials flow,
resulting in production  inefficiencies  and higher shipping costs, thus further
reducing gross profit margins.

Operating Expenses
Operating expenses, excluding Loss on Impairment of Assets and Gains on the sale
of Aptek land and building and Geofocus,  were $10,986 for the nine months ended
June 30, 2001  compared  to $13,184 for the  comparable  fiscal 2000  period,  a
decrease of $2,198,  or 16.7%,  primarily as a result of decreased  research and
development  expenses.  Operating  expenses,  excluding  the  gains  and loss on
Impairment  of Assets,  as a  percentage  of net  sales,  was 25.7% in the third
quarter of fiscal 2001  essentially  unchanged from 25.6% in the comparable 2000
quarter.

Research and development  expenses  decreased $2,059, to $3,180 during the first
nine months of fiscal  2001  compared  to $5,239 in the  comparable  fiscal 2000
period,  a 39.3%  decline.  As a percent  of  sales,  research  and  development
expenses  decreased  from 10.2% to 7.5%.  This is primarily  due to  significant
expenditures  and higher  payroll  for  employees  working  for the  Chrysler RS
Program in early  fiscal  2000.  This  program was  cancelled  late in the third
quarter of fiscal 2000. Last year research and development expenses increased to
support new product  development for the automotive and truck ETC and adjustable
foot pedal products, and for development of sensor-related products for existing
customers.  This year the focus has shifted to  production  of  adjustable  foot
pedals and sensor-related products.

Administrative  expenses of $6,748 were  essentially  unchanged during the first
nine months of 2001 compared to the comparable  fiscal 2000 period. As a percent
of sales, administrative expenses were 15.8% in fiscal 2001 compared to 12.7% in
fiscal  2000.  Lower plant  administrative  expenses  have been offset by higher
costs  related  to closing  PPT and higher legal and  accounting  costs.

After  reviewing  PPT's history of operating  losses and operating  problems and
profitability, the PPT operations have been terminated. During the quarter ended
December 31, 2000,  management of PPT evaluated the  realizability of the assets
of PPT based on the  expected  closure.  Accordingly,  the  Company  recorded an
impairment loss on PPT's  property,  plant and equipment of $1,966 for the three
months ended December 31, 2000.

In July 1999 the Company  acquired  the  adjustable  pedal  business  and patent
rights and contributed additional working capital for product development of the
Company's  adjustable pedal design.  The Company's  current sales volume of this
product is limited  and as a result of the  Company's  capital  constraints  the
Company  does not possess the  resources  to further  develop  additional  sales
volumes and to achieve the sale volumes originally projected.  The current level
of cash flows from the adjustable  pedal business do not support the realization
of the carrying  value of the  business'  intangible  assets.  Accordingly,  the
Company  recognized an impairment  loss of $4,366 in the quarter ended March 31,
2001 for the Goodwill and other intangible assets related to this business.

Interest and Other Expenses
Interest  expense  increased $1,293 or 63.0%, to $3,346 in the first nine months
of fiscal  2001  from  $2,053 in the  first  nine  months of fiscal  2000 due to
amortization of the Secured  Subordinated  Debenture  warrant discounts (Note 9)
and amortization of costs related to obtaining the additional financing.

Net loss available to common shareholders
Net loss allocable to common  shareholders was $(0.50) for the first nine months
ended June 30, 2001 compared to $(0.20) in the comparative prior year period due
to decreased gross margins, the loss on the impairment of the goodwill and other
intangible  assets related to the Company's  adjustable pedal business,  loss on
impairment of assets of PPT,  additional  expenses related to the closing of PPT
and increased  interest  expense offset by  recognitions of gains on the sale of
the Deerfield Beach property and the GeoFocus subsidiary, decreased research and
development  expenses.  The effective  income tax rates were 0.00% and 15.4% for
the nine months ended June 30, 2001 and 2000, respectively.  The Company is in a
net  operating  loss carry  forward  position and is providing a 100%  valuation
allowance  on all  deferred  tax assets in the current  fiscal year due to going
concern issues.




                                       11
<PAGE>



                                     Part II

Item 1.   Legal Proceedings

          None

Item 2.   Changes in Securities and Use of Proceeds

          On February 28, 2001, the Company completed a private placement of 200
          "units",   each  unit   consisting  of:  (i)  a  $25,000  12%  secured
          subordinated  debenture;  and (ii) a three year common stock  purchase
          warrant to purchase 12,500 shares of the Company's  common stock at an
          exercise  price of $1.375 per share  (the  "Warrant").  The  aggregate
          consideration  received  by the Company  was  $5,000,000.  The Company
          relied upon the exemptions from registration  provided by Section 4(2)
          and/or 4(6) of the Securities Act of 1933 (the  "Securities  Act"), as
          amended,  and/or Rule 506 of Regulation D promulgated thereunder based
          upon (i) representations from each of the purchasers of the Units that
          they  are  accredited   investors  with  experience  in  investing  in
          securities  such that they could evaluate the merits and risks related
          to the Company's securities;  (ii) that no general solicitation of the
          securities  was made by the Company;  (iii) each of the  purchasers of
          the Units  represented  to the Company  that they were  acquiring  the
          shares  for  their own  account  and not with a view  towards  further
          distribution;  (iv) the  securities  issued to the  purchasers  of the
          Units were "restricted  securities" as that term is defined under Rule
          144  promulgated  under the  Securities  Act;  (v) the Company  placed
          appropriate  restrictive legends on the Certificates  representing the
          securities;  and (vi)  prior to  completion  of the  transaction,  the
          Purchasers  of the Units were  informed  in writing of the  restricted
          nature of the securities,  provided with all information regarding the
          Company as required  under Rule 502 of Regulation D and were given the
          opportunity  to ask  questions of and receive  additional  information
          from the Company regarding its financial condition and operations. The
          Company issued a Warrant (as discussed in the following paragraph) and
          paid a cash fee of $350,000 to Taglich Brothers,  Inc. ("Taglich") for
          its  services  as  Placement  Agent in  connection  with  the  private
          placement.

          Concurrently  with the closing of the private  placement,  the Company
          issued a three year common stock purchase  warrant to purchase 175,000
          shares of the  Company's  common stock at an exercise  price of $1.375
          per share (the  "Warrant")  to Taglich.  The  Company  relied upon the
          exemptions from  registration  provided by Section 4(2) and/or 4(6) of
          the  Securities  Act, as  amended,  and/or  Rule 506 of  Regulation  D
          promulgated  thereunder based upon (i) representations from Taglich or
          its principals  that they are accredited  investors with experience in
          investing in securities  such that they could  evaluate the merits and
          risks  related  to the  Company's  securities;  (ii)  that no  general
          solicitation of the securities was made by the Company;  (iii) Taglich
          or its principals  represented to the Company that they were acquiring
          the  securities  for their  own  account  and not with a view  towards
          further distribution; (iv) the Warrants are "restricted securities" as
          that term is defined under Rule 144  promulgated  under the Securities
          Act; (v) the Company  placed  appropriate  restrictive  legends on the
          certificates  representing  the  securities  regarding the  restricted
          nature  of these  securities;  and (vi)  prior  to  completion  of the
          transaction, Taglich or its principals were informed in writing of the
          restricted  nature of the  securities,  provided with all  information
          regarding  the Company as required  under Rule 502 of Regulation D and
          were given the opportunity to ask questions of and receive  additional
          information  from the Company  regarding its  financial  condition and
          operations.

Item 3.   Defaults Upon Senior Securities

          On November 15,  2000,  the Company  defaulted  under the terms of its
          credit  agreement with the Bank when it failed to repay Term Loans III
          and  IV in  the  remaining  principal  amounts  of  $694  and  $1,000,
          respectively,  both due on November 15, 2000.  The full amounts  owing
          under Term Loans III and IV were  repaid in full in the third  quarter
          2001. As of June 30, 2001, the Company was not in compliance  with its
          debt  covenants  with the Bank  with the  original  loan  however  the
          Company has obtained a forebearance  agreement which provides  funding
          through December 31, 2001 and is in compliance with that  forebearance
          agreement.  Although a forebearance  agreement was reached in February
          2001 with the Bank no waivers  have been  obtained and the default has
          not been  cured,  All of the debt  with  the Bank of  $6,343  has been
          classified as current  liabilities  in the  accompanying  Consolidated
          Balance Sheet at June 30, 2001.

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
               None

(b)       Reports on Form 8-K
               None


                                       12
<PAGE>


                             Williams Controls, Inc.

                                    Signature


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




                             WILLIAMS CONTROLS, INC.






                                                By: /s/ Thomas K. Ziegler
                                                    ----------------------------
                                                    Thomas K. Ziegler
                                                    President and
                                                    Chief Executive Officer



                                                By: /s/ Dennis E. Bunday
                                                    ----------------------------
                                                    Dennis E. Bunday,
                                                    Chief Financial Officer








Date:  August 20, 2001








                                       13
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