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, 1998.

                                       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,
1998: 17,932,040

 


<PAGE>
                             Williams Controls, Inc.

                                      Index


                                                                           Page
                                                                          Number

Part I.  Financial Information
 
     Item 1. Financial Statements

          Consolidated  Balance Sheets,  June 30, 1998  (unaudited) 
          and September 30, 1997                                             3

          Unaudited  Consolidated Statement of Shareholders' Equity, 
          nine months ended June 30, 1998                                    4

          Unaudited Consolidated Statements of Operations, three 
          and nine months ended June 30, 1998 and 1997                       5
 
          Unaudited  Consolidated  Statements  of Cash Flows, 
          nine months ended June 30, 1998 and 1997                           6
 
          Notes to Unaudited Consolidated Financial Statements              7-11
 
     Item 2.  Management's  Discussion  and Analysis of
              Financial  Condition and Results of Operations               12-16


Part II.  Other Information

     Item 1.       Legal Proceedings                                        17

     Item 2.       Changes in Securities and Use of Proceeds                17

     Item 3.       Defaults Upon Senior Securities                          17

     Item 4.       Submission of Matters to a Vote of Security Holders      17

     Item 5.       Other Information                                        17

     Item 6.       Exhibits and Reports on Form 8-K                         18

                   Signature Page                                           19




                                       2
<PAGE>
                             Williams Controls Inc.
                           Consolidated Balance Sheets
     (Dollars in thousands, except share amounts and per share information)
<TABLE>
<CAPTION>
<S>                                                                   <C>                 <C>    

                                                                      June 30, 1998       September 30,
                                                                       (unaudited)            1997
                                                                      -------------       -------------
ASSETS 
Current Assets:
   Cash and cash equivalents                                            $  1,615            $    700
   Trade and other accounts receivable, less allowance of $249 and
     $185 at June 30, 1998 and September 30, 1997, respectively           11,274               8,468
   Inventories                                                            14,988              14,517
   Prepaid expenses                                                          997                 713
   Net assets held for disposition                                             -                 638
   Other current assets                                                    3,347               1,098
                                                                        --------            -------- 
     Total current assets                                                 32,221              26,134

Property plant & equipment, net                                           18,642              18,080
Investment in affiliate                                                    4,750                 559
Receivables from affiliate                                                     -               3,645
Notes Reivable                                                             3,200                   -
Net assets held for disposition                                                -               1,610
Other assets                                                               3,257               1,348
                                                                        ========            ========
     Total assets                                                       $ 62,070            $ 51,376
                                                                        ========            ========


LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
   Accounts payable                                                     $  5,850            $  5,070
   Accrued expenses                                                        2,436               3,008
   Current portion of long-term debt and capital leases                    1,004               1,428
   Other current liabilities                                                 299                 500
                                                                        --------            --------
      Total current liabilities                                            9,589              10,006

Long-term debt and capital lease obligations                              23,427              22,857
Other liabilities                                                          1,662               1,214

Commitments and contingencies
Minority interest in consolidated subsidiaries                               347                 464

Shareholders' equity:
   Preferred stock ($.01 par value, 50,000,000 authorized; 80,000 and 0
      issued at June 30, 1998 and September 30, 1997, respectively)            1                   -
   Common stock ($.01 par value, 50,000,000 authorized;
      18,062,240 and 17,912,240 issued at June 30, 1998 and
      September 30, 1997, respectively)                                      180                 179
   Additional paid-in capital                                             17,238               9,822
   Retained earnings                                                      10,194               7,402
   Unearned ESOP shares                                                     (191)               (191)
   Treasury stock (130,200 shares at June 30, 1998 and
      September 30, 1997, respectively)                                    (377)                (377)
                                                                        --------            --------
      Total shareholders' equity                                          27,045              16,835
                                                                        --------            --------
        Total liabilities and shareholders' equity                      $ 62,070            $ 51,376
                                                                        ========            ========

</TABLE>




        The accompanying notes are an integral part of these statements.

                                       3
<PAGE>


<TABLE>
                             Williams Controls, Inc.
                 Consolidated Statement of Shareholders' Equity
     (Dollars in thousands, except share amounts and per share information)
                                   (unaudited)

<S>                             <C>           <C>       <C>      <C>      <C>         <C>         <C>         <C>          <C>
                                        Issued              Issued
                                     Common Stock       Preferred Stock   Additional               Unearned                  Share
                                 --------------------   ---------------     Paid in    Retained      ESOP      Treasury     Holders'
                                  Shares      Amount    Shares   Amount     Capital    Earnings     Shares       Stock       Equity
                                 --------------------   ---------------   ----------   --------    --------    --------     --------
Balance, September 30, 1997      17,912,240    $ 179          -   $ -      $ 9,822      $ 7,402     $ (191)    $ (377)     $ 16,835

Net earnings                              -        -          -     -            -        2,912          -          -         2,912

Preferred Stock dividends                                                                  (120)         -          -          (120)

Common stock issued pursuant 
to exercise of options:             150,000        1          -     -           60                                               61

Sale of preferred stock                                  80,000     1        7,356                                            7,357

                                 ==================================================================================================
Balance, June 30, 1998           18,062,240    $ 180     80,000   $ 1     $ 17,238     $ 10,194     $ (191)    $ (377)     $ 27,045
                                 ==================================================================================================
</TABLE>














        The accompanying notes are an integral part of these statements.

                                       4
<PAGE>

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

<CAPTION>
<S>                                                  <C>          <C>         <C>          <C>
                                                        Three        Three        Nine         Nine
                                                        months       months      months       months
                                                        Ended        Ended       Ended        Ended
                                                       June 30,     June 30,    June 30,     June 30,
                                                         1998         1997        1998         1997
                                                      ----------   ----------  ----------   ----------

Sales                                                 $  16,922    $  14,536   $  49,757    $  42,305
Cost of sales                                            12,026       11,570      35,401       32,573
                                                      ----------   ----------  ----------   ----------
Gross margin                                              4,896        2,966      14,356        9,732

Operating expenses:
  Research and development                                  728          512       2,018        1,472
  Selling                                                   896          730       2,323        2,183
  General and administrative                              1,438        1,064       3,862        3,001
                                                      ----------   ----------  ----------   ----------
    Total operating expenses                              3,062        2,306       8,203        6,656
                                                      ----------   ----------  ----------   ----------
                                                                  
Earnings from continuing operations                       1,834          660       6,153        3,076

Other expenses:
   Interest expense                                         422          463       1,228        1,435
   Equity interest in (income) loss of affiliate            (25)          25         373          204
                                                      ----------   ----------  ----------   ----------
     Total other expenses                                   397          488       1,601        1,639
                                                      ----------   ----------  ----------   ----------

Earnings from continuing operations before 
   income tax expense                                     1,437          172       4,552        1,437
Income tax expense                                          385           78       1,596          591
                                                      ----------   ----------  ----------   ----------
Earnings from continuing operations before 
   minority interest                                      1,052           94       2,956          846
Minority interest in net loss of consolidated 
   subsidiaries                                              77           85         116          116
                                                      ----------   ----------  ----------   ----------
Net earnings from continuing operations                   1,129          179       3,072          962

Discontinued operations:                                                                   
   Loss from operations of automotive accessories 
      segment                                                 -       (2,271)       (160)      (3,172)
                                                      ----------   ----------  ----------   ----------
   Loss from discontinued operations                          -       (2,271)       (160)      (3,172)
                                                      ----------   ----------  ----------   ----------

Net earnings (loss)                                       1,129       (2,092)      2,912       (2,210)

Preferred dividends                                         120            -         120            -
                                                      ----------   ----------  ----------   ----------          

Net earnings allocable to common stockholders         $   1,009    $  (2,092)  $   2,792    $  (2,210)
                                                      ==========   ==========  ==========   ==========



Basic earnings per share from continuing operations       $ 0.06       $ 0.01      $ 0.16       $ 0.05
Basic loss per share from discontinued operations           -           (0.13)      (0.01)       (0.17)
                                                      ----------   ----------  ----------   ----------
Basic net earning (loss) per share                        $ 0.06      $ (0.12)     $ 0.15      $ (0.12)
                                                      ==========   ==========  ==========   ==========
Diluted earnings per share from continuing operations     $ 0.05       $ 0.01      $ 0.16       $ 0.05
Diluted loss per share from discontinued operations         -           (0.13)      (0.01)       (0.17)
                                                      ----------   ----------  ----------   ----------
Diluted net earnings (loss) per share                     $ 0.05      $ (0.12)     $ 0.15      $ (0.12)
                                                      ==========   ==========  ==========   ==========
</TABLE>


        The accompanying notes are an integral part of these statements.

                                       5
<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, 1998    June 30, 1997
                                                                      -------------    -------------

Cash flows from operating activities:
  Net earnings (loss)                                                    $ 2,912         $ (2,210)
Adjustments to reconcile net earnings (loss) 
to net cash from continuing operations:
  Loss from discontinued operations                                          160            1,171
  Depreciation and amortization                                            1,090            1,303
  Minority interest in earnings (loss) in consolidated subsidiaries         (116)            (116)
  Equity interest in loss of affiliate                                       373              204
Changes in working capital of continuing operations:
  Receivables                                                                492              869
  Prepaid Expenses                                                          (279)               -
  Inventories                                                             (2,737)             409
  Income tax receivable and other                                         (1,010)             290
  Accounts payable and accrued expenses                                   (1,276)             820
                                                                       ---------         ---------
  Net cash provided by operating activities of continuing operations        (391)           2,740


Cash flows from investing activities:
  Loans made for sale/leaseback financing                                 (3,200)               -
  Proceeds from the sale of discontinued operations                        1,124                -
  Payments for property, plant and equipment                              (1,602)          (1,013)
  Payments to affiliates                                                    (919)               -
                                                                       ---------         ---------
Net cash used in investing activities of continuing operations            (4,597)          (1,013)

Cash flows from financing activities:
  Proceeds (repayments) of long-term debt and capital lease obligations      165           (4,289)
  Net proceeds from sale/leaseback                                             -            4,274
  Payment of cash dividends                                                 (120)               -
  Proceeds from sale of preferred stock                                    7,357                -
  Proceeds from sale and issuance of common stock                             62                -
                                                                       ---------         ---------
Net cash provided by (used in) financing activities  
  of continuing operation                                                  7,464              (15)

Net cash used in discontinued operations                                  (1,561)               -
                                                                       ---------         ---------

Net increase in cash and cash equivalents                                    915           1,712


Cash and cash equivalents at beginning of period                             700            1,379
                                                                       ---------         ---------
                                    
Cash and cash equivalents at end of period                               $ 1,615          $ 3,091
                                                                       =========         =========



Supplemental disclosure of non-cash investing and financing activities:

Disposition of Kenco:
    Net assets and liabilities sold                                  $     2,374       $        -
    Allowances                                                             1,376                -
    Preferred stock                                                       (2,000)               -
    Other receivable                                                        (250)               -
    Receivable for inventory sold                                           (430)               -
    Net gain on disposition                                                   54                -
                                                                     -----------       -----------
    Cash received                                                    $     1,124       $        -
                                                                     ===========       ===========

Conversion of note receivable from affiliate 
     to investment in affiliate                                      $     5,000       $        - 
                                                                     ===========       ===========
                                                                     

</TABLE>



        The accompanying notes are an integral part of these statements.

                                       6
<PAGE>
                             Williams Controls, Inc.
              Notes to Unaudited Consolidated Financial Statements
               Three and Nine Months ended June 30, 1998 and 1997
           (Dollars in thousands, except share and 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, 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
has acquired,  disposition of any  businesses of the Company,  and the Company's
investment in and relationship with Ajay Sports, Inc., a related company.  These
forward-looking  statements are subject to the business and economic risks faced
by the Company.  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");  Williams Automotive,  Inc.; 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");
WC Sales  Management,  Inc. ("WC Sales") and its 80% owned  subsidiaries  Hardee
Williams,  Inc.  ("Hardee") and Waccamaw Wheel Williams,  Inc.  ("Waccamaw") are
hereinafter referred to as the "Company."


2.     The 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
which are  necessary  to a fair  statement  of results for the  interim  periods
presented. The interim results for the three and nine months ended June 30, 1998
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, 1997 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.     Earnings (loss) per Share

As required, the Company adopted Statement of Financial Accounting Standards No.
128 during the quarter ended  December 31, 1997.  This  statement  requires dual
presentation of basic and diluted earnings per share (EPS) with a reconciliation
of the  numerator  and  denominator  of the EPS  computations.  Basic  per share
amounts are based on the weighted  average  shares of common stock  outstanding.
Diluted  earnings per share assume the  conversion,  exercise or issuance of all
potential  common stock  instruments  such as options,  warrants and convertible
securities,  unless  the  effect is to reduce a loss or  increase  earnings  per
share.  Accordingly,   this  presentation  has  been  adopted  for  all  periods
presented.  The basic and diluted  weighted  average shares  outstanding  are as
follows:

<TABLE>
<CAPTION>
<S>                                         <C>              <C>              <C>            <C>   
                                            Three Months     Three Months      Nine Months      Nine Months
                                                Ended           Ended             Ended            Ended
                                            June 30, 1998    June 30, 1997    June 30, 1998    June 30, 1997
Reconciliation of net income:               -------------    -------------    -------------    -------------
-----------------------------

Net earnings (loss)                               1,129            (2,092)           2,912           (2,210)
Less preferred stock dividends                     (120)                -             (120)               -
                                             ----------        ----------       ----------       ----------                     
Net earnings allocable to common
   stockholders                                   1,009            (2,092)           2,792           (2,210)
                                             ==========        ==========       ==========       ==========


                                            Three Months     Three Months      Nine Months      Nine Months
                                                Ended           Ended             Ended            Ended
Reconciliation of weighted average shares:  June 30, 1998    June 30, 1997    June 30, 1998    June 30, 1997
------------------------------------------  -------------    -------------    -------------    -------------

Weighted average shares outstanding          18,062,240        17,912,240       18,029,462       17,912,240
   Less unallocated ESOP shares                  85,888           140,000           85,888          140,000
                                             ----------        ----------       ----------       ----------
Weighted average outstanding shares 
   used for basic EPS                        17,976,352        17,772,240       17,943,574       17,772,240
Plus incremental shares from assumed
   Issuance of stock options and other
     contingent issuances                     3,053,181           727,760        1,353,158          227,760

                                             ----------        ----------       ----------       ----------
Weighted average outstanding shares 
   used for diluted EPS                      21,029,533        18,500,000       19,296,732       18,000,000
                                             ==========        ==========       ==========       ==========
</TABLE>

                                       7
<PAGE>
                             Williams Controls, Inc.
              Notes to Unaudited Consolidated Financial Statements
               Three and Nine Months ended June 30, 1998 and 1997
           (Dollars in thousands, except share and per share amounts)


4.       Inventories

Inventories consisted of the following:

                                    June 30,              September 30,
                                      1998                    1997
                                ----------------        ----------------

     Raw material               $       6,203           $       5,305
     Work in process                    2,317                   2,035
     Finished goods                     6,468                   7,177
                                ----------------        ----------------
                                $      14,988           $      14,517
                                ================        ================

Finished goods include component parts and finished product ready for shipment.


5.     Year 2000 Conversion

The Company  recognizes the need to ensure its operations  will not be adversely
impacted by Year 2000  software  failures.  Software  failures due to processing
errors  potentially  arising  from  calculations  using the Year 2000 date are a
known  risk.  The  Company  is  addressing  this  risk to the  availability  and
integrity of financial  systems and the reliability of the operational  systems.
The Company has established  processes for evaluating and managing the risks and
cost  associated  with this problem,  including  communicating  with  suppliers,
dealers  and  others  with  which  it does  business  to  coordinate  Year  2000
conversion.  The total cost of compliance and its effect on the Company's future
results of  operations is being  determined  as part of the detailed  conversion
planning process.


6.     Refinance of Sale/Leaseback

Although  the Company  believes  that it does not have a  reportable  event with
respect to environmental  matters as discussed in Note 9, in accordance with the
terms of the  sale/leaseback  agreement for the Portland,  Oregon  manufacturing
facility, on April 20, 1998 the Company provided $3,200 of debt financing to the
purchaser  until the  Company  receives a  "no-further  action"  letter from the
Oregon  Department  of  Environmental  Quality  related  to these  environmental
matters.  This debt is due April 21,  2000 with an  interest  rate of 8.5% until
October 31, 1998,  when it increases to 9.75%.  The Company may  repurchase  the
facility  before the maturity  date and has the  obligation  to  repurchase  the
facility at the  maturity  date at the  original  purchase  price of $4,600 plus
out-of-pocket  costs of the  purchaser if a  "no-further  action"  letter is not
obtained.


                                       8
<PAGE>
                             Williams Controls, Inc.
              Notes to Unaudited Consolidated Financial Statements
               Three and Nine Months ended June 30, 1998 and 1997
           (Dollars in thousands, except share and per share amounts)


7.     Private Placement of Preferred Stock

On April 21, 1998, the Company completed a private placement of 80,000 shares of
Series A convertible  redeemable preferred stock at $100 per share, or $8,000 in
gross proceeds and received net proceeds of $7,357.  The preferred stock bears a
dividend rate of 7.5%,  which is payable  quarterly,  and is  convertible at the
option of the holder into 2,909,091  shares of the Company's  common stock.  The
preferred  stock is redeemable at the Company's  option  anytime after April 21,
2001.  The  preferred  stock is not  mandatorily  redeemable.  In addition,  the
Company can force  conversion of the  preferred  stock into common shares if the
Company's  common  stock  trades at or above  $4.125  for  twenty  out of thirty
consecutive  trading days.  Holders of the Series A preferred stock are entitled
to a number of votes  equal to those they would have  assuming  conversion  into
common stock, without taking into account fractional shares.

Commencing with the quarterly period beginning July 1, 2001, the annual dividend
rate will  increase  each  quarter by 2.5% up to a maximum  dividend  of 24% per
annum.  The Company used the proceeds of the offering to provide debt  financing
to the purchaser of the Portland, Oregon manufacturing facility,  repayment of a
bank  term loan of $667 and an  investment  of  $2,000  in Ajay.  The  remaining
balance was used for general working capital purposes.









                                       9
<PAGE>
                             Williams Controls, Inc.
              Notes to Unaudited Consolidated Financial Statements
               Three and Nine Months ended June 30, 1998 and 1997
           (Dollars in thousands, except share and per share amounts)


8.     Business Segment Information
<TABLE>
<CAPTION>
<S>                                                       <C>               <C>               <C>               <C>    
                                                           Three months      Three months      Nine months       Nine months
                                                              Ended             Ended             Ended             Ended
                                                           June 30, 1998     June 30, 1997     June 30, 1998     June 30, 1997
                                                           -------------     -------------     -------------     ------------- 
Net sales by classes of similar products 
  from continuing operations
     Vehicle components                                    $    14,182       $    11,119       $    40,409       $    31,696
     Agricultural equipment                                      2,094             2,352             6,619             7,864
     Electrical components and GPS                                 646             1,065             2,729             2,745
                                                           -------------     -------------     -------------     ------------- 
                                                                16,922            14,536            49,757            42,305
                                                           =============     =============     =============     =============

Earnings (loss) from continuing operations
     Vehicle components                                          2,866             1,702             8,349             4,961
     Agricultural equipment                                       (540)             (810)             (887)           (1,017)
     Electrical components and GPS                                (492)             (232)           (1,309)             (868)
                                                           -------------     -------------     -------------     ------------- 
                                                                 1,834               660             6,153             3,076
                                                           =============     =============     =============     =============
Capital expenditures
     Vehicle components                                            901               233             1,139               410
     Agricultural equipment                                         16                40               119               169
     Electrical components and GPS                                 196                72               344               156
                                                           -------------     -------------     -------------     ------------- 
Total capital expenditures - continuing operations               1,113               345             1,602               735
Automotive accessories  - discontinued operations                    -                59                 -               278
                                                           -------------     -------------     -------------     ------------- 
Total capital expenditures                                       1,113               404             1,602             1,013

Depreciation and amortization
Vehicle components                                                 240               272               626               711
Agricultural equipment                                             167                40               226               185
Electrical components and GPS                                       72                78               238               220
                                                           -------------     -------------     -------------     ------------- 
Total depreciation and amortization - continuing operations        479               390             1,090             1,116
Automotive accessories - discontinued operations                    23                65              (332)              187
                                                           -------------     -------------     -------------     ------------- 
Total depreciation and amortization                        $       502       $       455       $       758       $     1,303


Identifiable assets                                                                            June 30, 1998     June 30, 1997
                                                                                               -------------     -------------
Vehicle components                                                                             $    35,488       $    24,319
Agricultural equipment                                                                              10,351            11,265
Electrical components and GPS                                                                        8,212            10,565
                                                                                               -------------     -------------   
Total assets - continuing operations                                                                54,051            46,149
Automotive accessories - discontinued operations                                                     8,019             7,793
                                                                                               -------------     -------------   
Total assets                                                                                   $    62,070       $    53,942
                                                                                               =============     =============
</TABLE>

                                       10
<PAGE>
                             Williams Controls, Inc.
              Notes to Unaudited Consolidated Financial Statements
               Three and Nine Months ended June 30, 1998 and 1997
           (Dollars in thousands, except share and per share amounts)


9.    Commitments and Contingencies

Environmental  Matters - The Company has identified certain  contaminants in the
soil and groundwater at and around its Portland,  Oregon manufacturing  facility
which the Company  believes may have been  disposed of by the previous  property
owner. The Company believes that the  contamination is not a reportable event as
defined under the current Oregon statutes.  Under Oregon  statutes,  the Company
and other potentially  responsible  parties are required to investigate  further
and  possibly  remediate  the  contamination.  The  Company  believes  that,  if
required, the remediation would take the form of permanent monitoring, but could
include the  treatment  and removal of the  contamination  or both.  The Company
cannot estimate the costs of permanent  monitoring,  treatment or cleanup at the
present time.

The acquisition  agreement  between the Company and the previous  building owner
contains provisions for indemnification of any environmental cleanup costs after
the  Company  spends $25  towards  such  cleanup.  The  Company  intends to seek
indemnification  from the prior  property  owner  for  permanent  monitoring  or
cleanup costs,  if any. The prior property owner has advised the Company that it
would dispute any liability for remediation  costs. The Company believes that it
can enforce  available  claims against the prior property owner for any costs of
investigation or remediation or both.


10.   Debt Facility Restructuring 

On June 30, 1998, the Company  restructured its credit facility with Wells Fargo
Bank,  National  Association to eliminate Ajay Sports, Inc. and its subsidiaries
("Ajay")  as  borrowers  under the  credit  facility.  The  credit  facility  as
restructured provides for a maximum borrowing capacity of approximately $22,300,
consisting of a revolving  credit facility of up to $16,500,  a $3,100 term loan
and a $2,700 real estate loan.  Under the restructured  facility,  all joint and
several  liability,  cross  collateral  agreements and guarantees of the Company
with respect to the portion of the Wells Fargo credit facility allocable to Ajay
prior to the restructuring have been terminated.


In connection with the  restructuring  of the Wells Fargo bank credit  facility,
the  Company  entered  into an  agreement  with Ajay under which the Company has
agreed to make the  second  advance  of $1,000  to Ajay for  total  advances  of
$2,000. These additional advances when combined with certain liabilities assumed
from Ajay by the Company and potential  additional  payments to a bank on Ajay's
behalf,  if  required to be made,  could  result in Ajay owing the Company up to
approximately  $8,650.  On June 30, 1998,  the Company  converted  $5,000 of the
potential  $8,650  debt  into 6  million  shares  of a newly  created  series of
preferred  stock  of  Ajay,  the  Series  D  Cumulative  Convertible  Non-Voting
Preferred  Stock,  and  agreed  to  accept  a  secured  promissory  note for any
unconverted  portion  of the debt.  The 6 million  shares are  convertible  into
3,333,334  shares of Ajay Common  Stock  after  giving  effect to a  one-for-six
reverse stock split by Ajay which became  effective on August 14, 1998. The note
is secured by a lien on Ajay's assets which is junior to the lien held by Ajay's
bank  lenders.   The  Company  continues  to  own  approximately  17.7%  of  the
outstanding  common  stock of Ajay and holds  options to purchase an  additional
1,851,813  shares of common stock after giving effect to a  one-for-six  reverse
stock split by Ajay which became effective on August 14, 1998.

11.   New Accounting Pronouncements

In June 1997, the FASB issued  Statement of Financial  Accounting  Standards No.
130 "Reporting  Comprehensive  Income" ("SFAS 130"). This statement  establishes
standards for reporting and displaying  comprehensive  income and its components
in a full set of general purpose financial statements. The objective of SFAS 130
is to report a measure of all  changes in equity of an  enterprise  that  result
from   transactions   and  other  economic  events  of  the  period  other  than
transactions with owners.  The Company adopted SFAS 130 during the first quarter
of 1998.  Comprehensive  loss did not differ from currently reported net loss in
the periods presented.

In June 1998, the FASB issued  Statement of Financial  Accounting  Standards No.
133, "Accounting for Derivative Instruments and Hedging Activities ("SFAS 133").
SFAS 133  establishes  accounting  and reporting  standards  for all  derivative
instruments.  SFAS 133 is effective  for fiscal years  beginning  after June 15,
1999. The Company does not have any derivative instruments and, accordingly, the
adoption of SFAS 133 will have no impact on the Company's  financial position or
results of operations.










                                       11
<PAGE>
                             Williams Controls, Inc.
                        Management Discussion & Analysis
           (Dollars in thousands, except share and per share amounts)


See "Cautionary Statement" contained at the beginning of this report.

Financial Condition, Liquidity and Capital Resources

The Company's  principal  sources of liquidity during the nine months ended June
30, 1998 were net proceeds  from the sale of  preferred  stock of $7,357 and net
proceeds  from  the  sale of  discontinued  operations  of  $1,124.  During  the
year-to-date  period, the Company used cash for operating activities of $391 and
purchased  equipment of $1,602.  At June 30, 1998 the Company's  working capital
increased to $22,632 from $16,128 at September 30, 1997.  The current ratio also
increased to 3.4 at June 30, 1998 from 2.61 at September 30, 1997.

The  Company  anticipates  that  cash  generated  from  continuing   operations,
borrowings  and proceeds from the sale of preferred  stock in April 1998 will be
sufficient to satisfy its working capital requirements for continuing operations
during the remainder of the current fiscal year.

Accounts  receivable  increased due to higher sales in the Company's vehicle and
component  segment  and  seasonality  in  the  agricultural  component  segment.
Investment in affiliate  increased  due to advances of $1,000 to affiliates  and
the  conversion  of previous  advances to  investments  in preferred  stock (see
footnote  10).  Notes  receivable  increased  due to  financing  provided to the
purchaser of the Portland,  Oregon manufacturing facility (see footnote 6). Long
term debt includes $4,700 of capitalized lease  obligations  related to the same
investment.

In April 1998 the Company  completed  a private  placement  of 80,000  shares of
Series A convertible  redeemable preferred stock at $100 per share, or $8,000 in
gross  proceeds.  The preferred  stock bears a dividend  rate of 7.5%,  which is
payable quarterly, and is convertible at the option of the holder into 2,909,091
shares of the Company's  common stock.  The preferred stock is redeemable  after
three years at the option of the  Company.  In  addition,  the Company can force
conversion  of the preferred  stock into common  shares if the Company's  common
stock  trades at or above  $4.125 for twenty out of thirty  consecutive  trading
days.  Holders of the Series A preferred stock are entitled to a number of votes
equal to those they would have assuming  conversion  into common stock,  without
taking into account  fractional  shares.  Proceeds of the offering  were used to
provide debt  financing to the purchaser of the Portland,  Oregon  manufacturing
facility,  repayment of a bank term loan of $667 and an  investment of $2,000 in
Ajay. The remaining balance was used for general working capital purposes.

During fiscal 1997 the Company sold its Portland,  Oregon manufacturing facility
in a sale-leaseback  transaction for $4,524. Under the terms of the agreement in
April 1998, the Company provided $3,200 of debt financing to the purchaser until
such time that the Company receives a "no further action" letter from the Oregon
Department  of  Environmental  Quality  related to  environmental  issues at the
property.  Upon  receipt  of such  letter  the  purchaser  will be  required  to
refinance  the mortgage  with a third party  lender.  If a  "no-further  action"
letter is not  obtained,  the Company may  repurchase  the  facility  before the
maturity date and has the  obligation to repurchase the facility at the maturity
date at the original  purchase price of $4,600 plus  out-of-pocket  costs of the
purchaser.

On June 30, 1998, the Company  restructured its credit facility with Wells Fargo
Bank,  National  Association to eliminate Ajay Sports, Inc. and its subsidiaries
("Ajay")  as  borrowers  under the  credit  facility.  The  credit  facility  as
restructured provides for a maximum borrowing capacity of approximately $22,300,
consisting of a revolving  credit facility of up to $16,500,  a $3,100 term loan
and a $2,700 real estate loan.  Under the restructured  facility,  all joint and
several  liability,  cross  collateral  agreements and guarantees of the Company
with respect to the portion of the Wells Fargo credit facility allocable to Ajay
prior to the restructuring have been terminated.

In connection with the  restructuring  of the Wells Fargo bank credit  facility,
the  Company  entered  into an  agreement  with Ajay under which the Company has
agreed to make the  second  advance  of $1,000  to Ajay for  total  advances  of
$2,000. These additional advances when combined with certain liabilities assumed
from Ajay by the Company and potential  additional  payments to a bank on Ajay's
behalf,  if  required to be made,  could  result in Ajay owing the Company up to
approximately  $8,650.  On June 30, 1998,  the Company  converted  $5,000 of the
potential  $8,650  debt  into 6  million  shares  of a newly  created  series of
preferred  stock  of  Ajay,  the  Series  D  Cumulative  Convertible  Non-Voting
Preferred  Stock,  and  agreed  to  accept  a  secured  promissory  note for any
unconverted  portion  of the debt.  The 6 million  shares are  convertible  into
3,333,334  shares of Ajay Common  Stock  after  giving  effect to a  one-for-six
reverse stock split by Ajay which became  effective on August 14, 1998. The note
is secured by a lien on Ajay's assets which is junior to the lien held by Ajay's
bank  lenders.   The  Company  continues  to  own  approximately  17.7%  of  the
outstanding  common  stock of Ajay and holds  options to purchase an  additional
1,851,813  shares of common stock after giving effect to a  one-for-six  reverse
stock split by Ajay which became effective August 14, 1998.



                                       12
<PAGE>
                             Williams Controls, Inc.
                        Management Discussion & Analysis
           (Dollars in thousands, except share and per share amounts)


Results of  Operations  
----------------------
Three  months  ended June 30, 1998  compared to the three  months ended June 30,
1997

Overview
--------

Net sales  from  continuing  operations  increased  16% to  $16,922 in the third
quarter  ended June 30,  1998 from  $14,536 in the same  period in fiscal  1997.
Increased  sales are  attributed  primarily to higher unit sales  volumes in the
Company's  vehicle component segment which were partially offset by a decline in
unit  sales  volumes  in the  electrical  components  and GPS  and  agricultural
equipment segments.

Net earnings from  continuing  operations  increased 531% to $1,129 in the third
quarter ended June 30, 1998 from $179 in the same fiscal 1997 quarter  primarily
due to  increases  in unit sales  volumes  and  profitability  in the  Company's
vehicle  component  segment, decreased  losses in the Company's  agricultural
equipment segment and a lower effective income tax rate.

Net  earnings  attributable  to common  shareholders  increased to $1,009 in the
third  quarter  ended June 30, 1998 from a net loss of $2,092 in the  comparable
fiscal 1997  quarter due to higher unit sales and  profitability  in the vehicle
component  segment,  decreased  losses in the  agricultural  equipment  segment,
reduced losses in the Company's  discontinued  automotive  accessories  segment,
which  was sold in March  1998 and a lower  effective  income  tax  rate.  These
increases  were partially  offset by preferred  dividends of $120 in the current
year quarter, compared to $0 in the prior year quarter.

Net sales from continuing operations
------------------------------------

Net sales from continuing operations increased $2,386, or 16%, to $16,922 in the
third quarter  ended June 30, 1998 from $14,536 in the prior year  quarter.  Net
sales as a  percent  of  total  sales in the  vehicle  components,  agricultural
equipment and electrical components segments were 84%, 12% and 4%, respectively,
in the 1998  quarter  compared  to 76%,  16% and 8%,  respectively,  in the 1997
quarter.  Vehicle  component  sales in the quarter ended June 30, 1998 increased
$3,063  or 28%,  due to  higher  unit  sales of  component  parts  to heavy  and
medium-duty truck manufacturers.  Sales of agricultural equipment declined $258,
or 11%, in the quarter  ended June 30,  1998  primarily  due to lower unit sales
resulting  from  excess  dealer   inventory  and  poor  weather   affecting  the
southeastern   agricultural  markets  which  this  segment  serves.   Electrical
component  and GPS  segment  sales  decreased  $419,  or 39%,  primarily  due to
decreased unit sales volume of electrical components.

Gross margin
------------

Gross margin from  continuing  operations  increased  65% to $4,896 in the third
quarter ended June 30, 1998 from $2,966 in the prior year quarter. Gross margins
as a percentage of net sales from  continuing  operations  were 29% in the third
quarter  of  fiscal  1998  compared  to 20% in the  same  fiscal  1997  quarter.
Increases  in dollar  amount  in the  third  quarter  of  fiscal  1998  resulted
primarily from higher unit sales volumes of higher margin products and increased
utilization of the Company's fixed assets in the vehicle  component  segment and
improved  gross  margins  at  the  agricultural  segment.  Gross  margins  as  a
percentage of net sales in the vehicle  components,  agricultural  equipment and
electrical  components  and GPS segments  were 33%,  4%, and 20%,  respectively,
during  the third  quarter  of fiscal  1998  compared  to 26%,  (11%),  and 29%,
respectively, for the same quarter in fiscal 1997.

Operating expenses - continuing operations
------------------------------------------

Operating  expenses for  continuing  operations  increased  33% during the third
quarter  ended June 30, 1998  compared to amounts in the same  quarter in fiscal
1997. Operating expenses as a percentage of net sales from continuing operations
were 18% and 16% in the third  quarter  of fiscal  1998 and 1997,  respectively.
Increases were  primarily  related to higher  personnel  costs needed to support
existing sales levels,  higher legal and professional fees,  additional research
and  development  activities and higher selling costs.  Operating  expenses as a
percentage of net sales in the vehicle  components,  agricultural  equipment and
electronic  components  and GPS segments  were 13%,  30% and 96%,  respectively,
compared to 11%, 24% and 51%, respectively, in the same quarter of fiscal 1997.



                                       13
<PAGE>
                             Williams Controls, Inc.
                        Management Discussion & Analysis
           (Dollars in thousands, except share and per share amounts)


Results of Operations  (continued)
----------------------------------
Three  months  ended June 30, 1998  compared to the three  months ended June 30,
1997

Research and  development  expenses for continuing  operations  increased 42% to
$728,  or 4% of sales from  continuing  operations,  during the third quarter of
fiscal 1998 from $512, or 4% of sales in the same quarter of fiscal 1997. Higher
expenses in the 1998  quarter are  primarily  attributed  to  increased  product
development activities in the vehicle component segment.

Selling expenses for continuing operations increased 23% to $896, or 5% of sales
in the third  quarter of fiscal  1998,  from $730,  or 5% of sales,  in the same
quarter of fiscal 1997.  Increases  related  primarily  to increased  activities
associated with higher sales.

General and administrative  expenses for continuing  operations increased 35% in
the third quarter of fiscal 1998 to $1,438,  or 8% of sales,  from $1,064, or 7%
of sales,  in the same quarter of fiscal 1997.  Increases  were primarily due to
increased  personnel costs and higher legal and professional fees in the current
fiscal year quarter.

Income tax expense
------------------

The  effective  income  tax rate for the  quarter  ended  June 30,  1998 was 27%
compared  to 45% in the same period in 1997 due to  estimated  refunds for prior
year state taxes and a lower estimated state tax rate for fiscal 1998.

Net earnings from continuing operations
---------------------------------------

Net earnings from  continuing  operations  increased $950, or 531%, to $1,129 in
the third  quarter of fiscal 1998 from $179 in the same  quarter of fiscal 1997.
Increases  were  primarily  due to increases in operating  income of $548 in the
automotive  components  segment,  decreased  losses of $446 in the  agricultural
equipment  segment,  estimated  refunds of prior  year  state  taxes and a lower
estimated state tax rate for fiscal 1998.

Discontinued operations
-----------------------

The Company did not have a net loss from the discontinued automotive accessories
segment for the third quarter ended June 30, 1998,  compared to losses of $2,271
net of tax benefits of $1,515 in the same quarter of fiscal 1997.  The Company's
discontinued automotive accessories segment was sold on March 16, 1998.









                                       14
<PAGE>
                             Williams Controls, Inc.
                        Management Discussion & Analysis
           (Dollars in thousands, except share and per share amounts)


Results of Operations (continued)
---------------------------------
Nine months ended June 30, 1998 compared to the nine months ended June 30, 1997

Overview
--------

Net sales from continuing operations increased 18% to $49,757 in the nine months
ended June 30, 1998 from  $42,305 in the same period in fiscal  1997.  Increased
sales are  attributed  to higher  unit sales  volumes in the  Company's  vehicle
component  segment,  which were partially offset by declining unit sales volumes
in the agricultural equipment segment.

Net earnings from  continuing  operations  increased 219% to $3,072 for the nine
months  ended June 30, 1998 from $962 in the same  fiscal 1997 period  primarily
due to increased unit sales volumes and  profitability  in the Compan's  vehicle
component segment,  decreased losses in the agricultural equipment segment and a
lower effective income tax rate.

Net earnings  attributable  to common  stockholders  increased to $2,792 for the
nine  months  ended  June 30,  1998 from a net loss of $2,210 in the  comparable
fiscal  1997  period.  Higher  net  income  in the  current  year is  attributed
primarily to higher sales and  profitability in the Company's  vehicle component
segment,  decreased losses in the discontinued  automotive  accessories segment,
decreased  losses in the  agricultural  equipment  segment and a lower effective
income tax rate. These increases were partially offset by preferred dividends of
$120 in the current  year  nine-month  period,  compared to $0 in the same prior
year period.

Net sales from continuing operations
------------------------------------

Net sales  increased  $7,452,  or 18%, to $49,757 for the nine months ended June
30, 1998 compared to $42,305 for the nine months ended June 30, 1997. Sales as a
percent of total sales in the vehicle  components,  agricultural  equipment  and
electrical components segments were 81%, 13% and 6%, respectively,  for the nine
months  ended June 30, 1998  compared to 75%, 19% and 6%,  respectively,  in the
comparable prior year nine-month  period.  Vehicle  component sales for the nine
months ended June 30, 1998 increased  $8,979, or 28% due to higher unit sales of
component parts to heavy and medium truck  manufacturers.  Sales of agricultural
equipment  declined $1,245,  or 16%, for the nine months ended June 30, 1998 due
to lower unit sales  resulting  from excess  dealer  inventory  and poor weather
affecting the southeastern agricultural markets which this segment serves.
 
Gross margin
------------

Gross margin from  continuing  operations  increased 48% to $14,356 for the nine
months  ended June 30, 1998 from $9,732 in the nine months  ended June 30, 1997.
Gross margin as a percentage of net sales from continuing operations was 29% for
the 1998  period  compared to 23% in the same  fiscal  1997  nine-month  period.
Increases in dollar  amount in the 1998 period  resulted  primarily  from higher
unit sales volumes of higher margin  products and increased  utilization  of the
Company's  fixed  assets in the vehicle  component  segment.  Gross  margin as a
percentage of net sales in the vehicle  components,  agricultural  equipment and
electrical  components  and GPS  segments  were 32%,  11% and 23%  respectively,
during the fiscal 1998 period compared to 27%, 10% and 20%, respectively, during
the same nine-month period in fiscal 1997.

Operating expenses - continuing operations
------------------------------------------

Operating expenses for continuing operations increased 23% to $8,203 in the nine
months ended June 30, 1998 compared to $6,656 in the same period in fiscal 1997.
Operating expenses as a percentage of net sales from continuing  operations were
16% for the  nine-month  periods  ending June 30, 1998 and 1997.  Increases  are
primarily due to higher general and administrative  costs and increased research
and  development  activities in the Company's  vehicle  component and electrical
component  and GPS  segments  and  increased  selling  expenses  in the  vehicle
components  segment.  Operating  expenses  as a  percentage  of net sales in the
vehicle  components,  agricultural  equipment and electronic  components and GPS
segments  were 12%,  24% and 71%,  respectively,  in the fiscal 1998  nine-month
period compared to 11%, 23% and 51%, respectively, in the comparable fiscal 1997
period.



                                       15
<PAGE>
                             Williams Controls, Inc.
                        Management Discussion & Analysis
           (Dollars in thousands, except share and per share amounts)


Results of Operations (continued)
---------------------------------
Nine months ended June 30, 1998 compared to the nine months ended June 30, 1997

Research and  development  expenses for continuing  operations  increased 37% to
$2,018, or 4% of sales from continuing operations,  during the nine months ended
June 30, 1998 from  $1,472,  or 3% of sales in the same  period in fiscal  1997.
Higher expenses in the fiscal 1998 period are primarily  attributed to increased
product development  activities in the electrical  component and GPS and vehicle
component segments.

Selling  expenses for  continuing  operations  increased 6% to $2,323,  or 5% of
sales from  continuing  operations,  during the first nine months of fiscal 1998
from $2,183,  or 5% of sales,  in the same period of fiscal  1997.  Increases in
dollar amount relate primarily to increased sales activities.

General and administrative  expenses for continuing  operations increased 29% in
the first nine months of fiscal 1998 to $3,862,  or 8% of sales, from $3,001, or
7% of sales in the same period in fiscal 1997.  Increases  were primarily due to
increased  personnel costs and higher legal and professional fees in the current
fiscal year period.
 
Income tax expense
------------------

The  effective  income tax rate for the nine months  ended June 30, 1998 was 35%
compared  to 41% in the same period in 1997 due to  estimated  refunds for prior
year state taxes and a lower estimated state tax rate for fiscal 1998.

Net earnings from continuing operations
---------------------------------------

Net earnings from continuing  operations  increased  $2,110 or 219% to $3,072 in
the nine months ended June 30, 1998 from $962 in the same period of fiscal 1997.
Increases were primarily due to increases in operating  income in the automotive
components  segment  of  $1,684,  decreased  losses of $620 in the  agricultural
equipment  segment,  estimated  refunds of prior  year  state  taxes and a lower
estimated state tax rate for fiscal 1998.

Discontinued Operations
-----------------------

Net losses from the discontinued automotive accessories segment were $160 net of
tax benefits of $107 for the nine months ended June 30, 1998, compared to $3,172
net of tax benefits of $2,121 in the same period of fiscal 1997.





                                       16
<PAGE>

                             Williams Controls, Inc.

                                     Part II

Item 1.   Legal Proceedings

          None


Item 2.   Changes in Securities and Use of Proceeds

          On April 21, 1998 the Company  completed a private placement of 80,000
          shares of Series A  Preferred  Stock,  7 1/2%  Redeemable  Convertible
          Series (the "Preferred Stock") at an offering price of $100 per share,
          for aggregate  gross  proceeds of  $8,000,000.  This offering was made
          solely to accredited  investors in reliance on certain exemptions from
          the  registration  requirements  under the  Securities Act of 1933, as
          amended (the "Securities  Act"), and applicable state securities laws,
          including the  exemptions  found in Section 4(6) of the Securities Act
          and/or in Rule 506 of  Regulation  D under  the  Securities  Act.  The
          investment  banking firm of Taglich Brothers,  D'Amadeo,  Wagner &Co.,
          Inc., New York, New York,  acted as placement  agent for this offering
          and for its  services,  received as  compensation  7 1/2% of the gross
          proceeds,  or $600,000,  and  five-year  placement  agent  warrants to
          purchase  203,637  shares of the Company's  common stock for $3.30 per
          share.

          The Preferred  Stock receives a dividend of 7 1/2% per annum,  payable
          quarterly,  and is redeemable at the option of the Company three years
          after the date of issuance.  The Preferred Stock is convertible at the
          option of the holders based on a conversion  price of $2.75 per share,
          or 2,909,091 shares of common stock, subject to future adjustment. The
          Company has the right to force  conversion of the  Preferred  Stock if
          the  company's  common  stock  publicly  trades at or above $4.125 per
          share  (150% of the  conversion  price) for 20 trading  days  within a
          consecutive 30 day trading period ending no more than 10 days prior to
          the date  notice of forced  conversion  is given by the Company to the
          holders.

          The  holders  of the  Preferred  Stock  have the  right to vote on all
          matters  brought  before the Company's  stockholders,  voting with the
          common  stockholders  without  regard  to class.  The  number of votes
          eligible  to be  cast  by  the  holders  of  the  Preferred  Stock  is
          determined by the number of votes they would have assuming  conversion
          of the Preferred Stock as of the record date for the vote being taken.


Item 3.   Defaults Upon Senior Securities

          None


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

          None


Item 5.   Other Information

          None


                                       17
<PAGE>

                             Williams Controls, Inc.

                                     Part II


Item 6.   Exhibits and Reports on Form 8-K

    (a)   Exhibits
          --------
          27  -   Financial Data Schedule

    (b)   Reports on Form 8-K
          -------------------
          On April 2, 1998,  the Company filed a report on Form 8-K reporting an
          event on March 16,  1998  under Item 2  concerning  the sale of assets
          related to its  discontinued  operations  and under  Item 5  reporting
          repayment of certain debt,  and filing  unaudited pro forma  financial
          statements related to this sale of assets.






                                       18
<PAGE>

                             Williams Controls, Inc.

                                   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:  August 14, 1998                     By: /s/ Gerard A. Herlihy
                                                    ----------------------------
                                                    Gerard A. Herlihy
                                                    Chief Financial and
                                                    Administrative Officer




     Date:  August 14, 1998                     By: /s/ William N. Holmes
                                                    ----------------------------
                                                    William N. Holmes,
                                                    Corporate Controller and
                                                    Principal Accounting Officer




                                       19
<PAGE>