UNITED ~~STATESSECURITIES~~STATES SECURITIES AND EXCHANGE ~~COMMISSIONWashington~~ COMMISSION Washington, DC ~~20549______________________~~ 20549 FORM 10-K (Mark One) x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended: September 30, 2012 OR o 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)

FORM 10-K

(Mark One)

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

For the fiscal year ended: September 30, 2011

[ ] 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 Identification No.)
incorporation or organization)

14100 SW 72^nd Avenue
Portland, Oregon		97224

(Address of principal executive office)		(Zip code)

Registrant’s telephone number, including area code: (503) 684-8600 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock ($.01 par value)

~~Securities~~Indicate by check mark if the ~~registered~~registrant ~~pursuant~~is toa ~~Section~~well-known ~~12(b)~~seasoned issuer, as defined in Rule 405 of the Securities Act:.Yes ~~None~~o No x

Securities registered pursuant to Section 12(g) of the Act: Common Stock ($.01 par value)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [ X ]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes ~~[ ]~~ o No ~~[ X ]~~ x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the ~~preceding~~ 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~~ the past 90 days. Yes [x ~~X ]~~ No ~~[ ]~~ o

Indicate by check mark whether the registrant has submitted electronically and posted on its ~~corporate~~ corporate web site, if any, every Interactive Data File required to be submitted ~~and~~ and posted to Rule 405 of Regulation S-T (section 232.405 of this chapter) ~~during~~ during the preceding 12 months (or for such shorter period that the registrant ~~was~~ was required to submit and post such files). Yes [x ~~X ]~~ No ~~[ ]~~ o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ~~[ ]~~ o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act

Large accelerated filer [o ] Accelerated filer [o ] Non-accelerated filer [o ] Smaller reporting company ~~[ X ]~~x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act) Yes ~~[ ]~~ o No ~~[ X ]~~x

The aggregate market value of voting common shares (based upon the closing price of the shares as reported on the ~~NASDAQ~~NYSE ~~Global Market)~~ of Williams Controls, Inc. held by non-affiliates was approximately $43,~~312~~606,~~221~~288 as of March 31, ~~2011~~2012.

As of December 1, ~~2011~~2012, there were 7,~~302~~377,~~339~~237 shares of Common Stock outstanding.

Documents Incorporated by Reference

The Registrant has incorporated by reference into Part III of this Form 10-K portions of itsProxy Statement for the Annual Meeting of Stockholders to be held February 21, 2012.

Williams Controls, Inc.

Index to ~~2011~~2012 Form 10-K

				Page	~~Page~~
Part I
Item 1.	~~Item 1.~~	Business	~~Business~~	4-8	~~4-8~~
Item 1A.	~~Item 1A.~~	Risk Factors	~~Risk Factors~~	8-11	~~8-11~~
Item 1B.	~~Item 1B.~~	Unresolved Staff Comments	~~Unresolved Staff Comments~~	12	11
Item 2.	~~Item 2.~~	Properties	~~Properties~~	12	11
Item 3.	~~Item 3.~~	Legal Proceedings	~~Legal Proceedings~~	12	12
Item 4.	~~Item 4.~~	Mine Safety Disclosures	~~Submission of Matters to a Vote of Security Holders~~	12	12
Part II
Item 5.	~~Item 5.~~	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	~~Market for Registrant’s Common Equity, Related Stockholder Matters and~~	13	13
			Issuer Purchases of Equity Securities
Item 6.		Selected Financial Data		14
	Item 6.		Selected Financial Data		14
Item 7.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		14-21
	Item 7.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		14-22
Item 7A.		Quantitative and Qualitative Disclosures About Market Risk		22
	Item 7A.		Quantitative and Qualitative Disclosures About Market Risk		23
Item 8.		Financial Statements and Supplementary Data		23
	Item 8.		Financial Statements and Supplementary Data		24
Item 9.		Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		50
	Item 9.		Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		52
Item 9A.		Controls and Procedures		50
	Item 9A.		Controls and Procedures		52
Item 9B.		Other Information		50
	Item 9B.		Other Information		52
Part III
Part III
Item 10.		Directors, Executive Officers and Corporate Governance		51-55
	Item 10.		Directors, Executive Officers and Corporate Governance		53
Item 11.		Executive Compensation		55-71
	Item 11.		Executive Compensation		53
Item 12.		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		71-73
	Item 12.		Security Ownership of Certain Beneficial Owners and Management and Related		53
Item 13.		Certain Relationships and Related Transactions, and Director Independence		74
			Stockholder Matters
Item 14.		Principal Accountant Fees and Services		74
	Item 13.		Certain Relationships and Related Transactions, and Director Independence		53
Part IV
	Item 14.		Principal Accountant Fees and Services		53
Item 15.		Exhibits and Financial Statement Schedules		76
Part IV
Signatures				77
	Item 15.		Exhibits and Financial Statement Schedules		54
Signatures					55

WILLIAMS CONTROLS, INC. FORM 10-K

PART I (Dollar amounts in thousands, unless otherwise indicated)

ITEM 1. BUSINESS

We are a Delaware corporation formed in 1988. The following are our wholly-owned subsidiaries:

Williams Controls Industries, Inc. (“Williams”); Williams (Suzhou) Controls Co. Ltd. (“Williams Controls Asia”); Williams Controls Europe GmbH (“Williams Controls Europe”); and Williams Controls India Private Limited (“Williams Controls India”).

General

We primarily design, manufacture and sell electronic throttle controls, ~~pneumatic~~ pneumatic controls, and electronic sensors for heavy trucks, transit buses, off-road equipment and military applications and in fiscal 2012 introduced a line of industrial joysticks, primarily for the off-road equipment markets. Electronic throttle controls send a signal proportional to throttle position to adjust the speed of electronically controlled engines. The use of electronically controlled engines is influenced primarily by emissions regulations, because these engines generally produce lower emissions. The original applications of electronic engines and electronic throttle controls were in heavy trucks and transit buses in the United States and Europe in the late ~~1980’s~~1980s. As a result of the continuing implementation of more stringent emissions standards worldwide, demand for electronically controlled engines and electronic throttle control systems is expanding both geographically and into lower horsepower engines. China, India and Russia are implementing more stringent emissions standards for heavy trucks, transit buses and light commercial vehicles, which we believe will increase the penetration of electronic throttle controls worldwide. Additionally, countries around the world have adopted emissions regulations that we expect will continue to increase the use of electronic throttle controls in off-road equipment.

Joysticks Weare ~~also~~being ~~produce~~increasingly aused ~~line~~for ofoperator ~~pneumatic~~ control ~~products,~~interfaces ~~which~~on ~~are~~a ~~generally~~wide range of ~~sold~~off-road tovehicles. ~~the~~The ~~same~~Company’s ~~customer~~line ~~base~~of asjoysticks ~~our~~is ~~electronic~~intended ~~throttle~~to ~~controls.~~address ~~These~~the ~~pneumatic~~stringent ~~products~~reliability requirements of off-road customers, which are ~~used~~similar ~~for~~to our ~~vehicle~~electronic throttle control ~~system~~capabilities. ~~applications~~We ~~such~~are ascurrently supplying electronic ~~power~~throttle ~~take-offs,~~controls orto ~~PTOs,~~many ~~and~~potential ~~air-control~~customers ~~applications~~for joysticks.

We ~~Electronic~~also ~~sensors~~produce ~~are~~ a ~~significant~~line ~~component~~ of ~~our~~pneumatic ~~electronic~~control ~~throttle controls.~~products, Wewhich ~~use~~are ~~various~~generally ~~sensing~~sold ~~technologies interchangeably. In addition~~ to ~~internal~~the ~~use,~~same wecustomer ~~also~~base ~~sell sensors~~ as ~~separate~~our ~~product~~electronic ~~lines~~throttle controls. AsThese ~~part of a~~pneumatic ~~portion~~products ofare ~~our~~used ~~sensor~~for ~~strategy,~~vehicle wecontrol ~~have~~system aapplications ~~license~~such toas ~~use certain sensor~~power ~~technology~~take-offs, ~~from~~or ~~Moving Magnet Technology S.A. Since 2007~~PTOs, ~~the~~and ~~majority~~air-control ~~of our sensors have been produced internally~~applications.

Electronic Wesensors ~~also~~are ~~design and manufacture~~ a ~~line~~significant component of ~~adjustable~~our ~~foot~~electronic ~~pedals~~throttle ~~and arm rests~~controls. ~~Adjustable~~We ~~foot~~use various ~~pedals~~sensing ~~are~~technologies ~~devices~~interchangeably. ~~that~~In ~~move~~addition ~~the~~to ~~throttle,~~internal ~~brake and~~use, ifwe ~~applicable,~~also ~~the~~sell ~~clutch~~sensors ~~pedal,~~as ~~closer~~separate orproduct ~~further~~lines. ~~away~~As ~~from~~part ~~the~~of ~~vehicle~~a ~~driver~~portion ~~to compensate~~of ~~for~~our ~~driver~~sensor strategy, ~~heights.~~we We have a ~~licensing~~license ~~agreement~~to ~~for~~use ancertain ~~adjustable pedal~~sensor technology, ~~which~~from ~~allows~~Moving ~~us to sell adjustable pedals in the medium and~~Magnet ~~heavy~~Technology ~~truck and transit bus markets~~S.A. WeSince ~~have~~2007, ~~recently~~the ~~developed~~majority ~~a line~~ of ~~joysticks~~ ~~and~~our sensors have ~~begun~~been ~~marketing those primarily to the off-road~~produced ~~market~~internally.

We ~~sell our products worldwide. During fiscal 2011, approximately 55% of~~ ~~our~~also ~~products~~design ~~were sold in the United States~~ and anmanufacture ~~additional~~a 9%line of ~~our~~adjustable ~~products were~~foot ~~sold~~pedals ~~to customers in Canada~~ and ~~Mexico~~arm ~~for~~rests. Adjustable ~~vehicles~~foot ~~that~~pedals are ~~produced,~~devices ~~in part,~~that ~~for~~move the ~~United~~throttle, ~~States~~brake ~~market. Approximately 36% of our products~~and, ~~measured~~if inapplicable, ~~terms~~the ofclutch ~~unit sales volume~~pedal, ~~were~~closer ~~sold~~or tofurther ~~other~~away ~~international~~from ~~markets. We sell~~ the ~~majority~~vehicle ofdriver ~~our products directly~~ to ~~large heavy truck, transit bus and~~ ~~off-road~~compensate ~~original~~for ~~equipment~~driver ~~manufacturers {“OEMs”) worldwide~~heights. ~~Our~~We ~~largest customers~~have ~~include~~a ~~The~~licensing ~~Volvo~~agreement ~~Group,~~for ~~Paccar,~~an ~~Inc., Daimler Trucks NA, Caterpillar,~~adjustable ~~Inc.,~~pedal ~~Navistar International Corporation~~technology, ~~and~~which ~~Bendix~~allows ~~Commercial~~us ~~Vehicle~~to ~~Systems. We also~~ sell ~~our~~adjustable ~~products~~pedals ~~through~~in athe ~~network~~medium ~~of independent distributors~~ and ~~representatives,~~heavy ~~which sell to smaller OEMs and to~~ truck and transit bus ~~owners as replacement parts~~markets.

We Tosell ~~better~~our ~~address~~products ~~existing~~worldwide. ~~and~~During ~~developing~~fiscal ~~worldwide~~2012, ~~heavy~~approximately ~~truck,~~59% ~~transit~~of our ~~bus~~products were sold in the United States and ~~off-road~~an ~~markets,~~additional 9% of our products were sold to customers in ~~2005~~Canada weand ~~established~~Mexico afor ~~manufacturing~~vehicles ~~facility~~that are produced, in ~~Suzhou~~part, ~~China~~for ~~and~~the ~~opened~~United ~~sales~~States ~~offices~~market. inApproximately ~~Shanghai~~32% of our products, ~~China~~measured in ~~and~~terms ~~Munich~~of unit sales volume, ~~Germany~~were sold to other international markets. We ~~During~~sell ~~2010~~the majority of our products directly to large heavy truck, wetransit ~~opened~~bus and aoff-road ~~manufacturing~~original ~~facility~~equipment manufacturers (“OEMs”) worldwide. Our largest incustomers ~~Pune~~include The Volvo Group, ~~India~~Paccar, Inc., ~~Prior~~Daimler toTrucks ~~2005~~NA, Caterpillar, ~~all~~Inc., ofNavistar International Corporation, and Bendix Commercial Vehicle Systems. We also sell our products ~~were~~through ~~produced~~a innetwork of independent distributors and representatives, which sell to smaller OEMs and ~~sold~~to truck and ~~from,~~bus ~~our~~owners ~~Portland,~~as ~~Oregon~~replacement ~~facility~~parts.

~~In fiscal 2011,~~ To webetter ~~expanded~~address our product line to include electronic throttle controls for the Indian and Asian light commercial vehicle market. Heavy trucks are generally considered vehicles in excess of 5 tons and light commercial vehicles are less than 5 tons. In late fiscal 2011, we began delivery of these light commercial vehicle electronic throttle controls to one Indian customer. The existing and developing worldwide heavy ~~and light commercial~~ truck, transit bus and off-road markets, ~~requires~~in ~~competitive~~2005 ~~worldwide~~we established a manufacturing ~~capabilities~~facility ~~and~~in ~~products.~~Suzhou, WeChina ~~believe~~and ~~our~~opened ~~operating~~sales ~~facilities~~offices in ~~Portland~~Shanghai, ~~Oregon; Suzhou,~~ China and ~~Pune~~Munich, ~~India~~ ~~have us well positioned to meet the needs of these markets~~Germany. ~~In addition to~~During ~~our manufacturing facilities~~2010, we ~~have~~opened ~~sales~~a ~~offices~~manufacturing facility in ~~Shanghai~~Pune, ~~China~~India. ~~and Munich,~~Prior ~~Germany.~~to We2005, ~~also~~all ~~have~~of our ~~exclusive~~products ~~distributor~~were ~~relationships~~produced in, ~~Japan~~ and ~~Korea~~ tosold ~~serve~~from, ~~those~~our ~~markets~~Portland, Oregon facility.

~~Competition~~ In fiscal 2012, we expanded our product line to include electronic throttle controls for the Indian and Asian light commercial vehicle market. Heavy trucks are generally considered vehicles in excess of 5 tons and light commercial vehicles are less than 5 tons. In late fiscal 2012, we began delivery of these light commercial vehicle electronic throttle controls to one Indian customer. The existing and developing worldwide heavy and light commercial truck, transit bus and off-road markets requires competitive worldwide manufacturing capabilities and products. We believe our operating facilities in Portland, Oregon; Suzhou, China and Pune, India have us well positioned to meet the needs of these markets. In addition to our manufacturing facilities, we have sales offices in Shanghai, China and Munich, Germany. We also have exclusive distributor relationships in Japan and Korea to serve those markets.

In WeNovember ~~are~~2012, asubsequent ~~worldwide~~to ~~market~~the ~~leader~~September ~~for~~30, ~~electronic~~2012 ~~throttle~~fiscal ~~control~~year-end, ~~systems~~the ~~for~~Company ~~heavy~~announced ~~trucks,~~it ~~transit~~had ~~buses~~entered ~~and~~into ~~off-road~~a ~~vehicles~~Merger ~~and~~Agreement ~~have~~with ~~recently~~Curtiss Wright ~~introduced~~Corporation ~~electronic~~(“Curtiss-Wright”) ~~throttle~~whereby ~~controls~~Curtiss-Wright ~~for~~agreed ~~the~~to ~~Indian~~acquire ~~and~~all ~~Asian light~~of ~~commercial~~the ~~vehicle~~Company’s ~~market.~~outstanding Weshares ~~are~~of ~~the~~common ~~largest~~stock ~~domestic~~in ~~producer~~a incash ~~the~~tender ~~heavy truck~~offer ~~market~~of $15.42 Weper ~~have~~share a(the ~~much~~“Tender ~~smaller~~Offer”). ~~portion~~The ofTender ~~the~~Offer ~~European~~commenced on November 15, 2012, and ~~Asian~~is ~~markets. The~~currently ~~markets~~scheduled ~~for~~to ~~our~~expire ~~products~~on ~~are~~December ~~highly~~13, ~~competitive~~2012, ~~with~~unless otherwise ~~many~~extended. ofAt ~~our competitors~~this ~~having~~time, ~~substantial~~there ~~financial~~can ~~resources~~be ~~and~~no ~~significant~~assurances ~~technological~~that ~~capabilities.~~Curtiss-Wright ~~Our~~will ~~competitive~~be ~~position~~able ~~varies~~to ~~among~~successfully ~~our~~complete ~~product~~the ~~lines.~~Tender Offer or otherwise complete the said transaction.

~~The~~Competition major competitors for our electronic throttle controls include AB Eletronik GmbH, Kongsberg Automotive, Siemens VDO Automotive AG, Orscheln Industries, Hella KGaA Hueck & Co., Heinrich Kubler AG (“KSR”) and Comesys, Ltd. Several Chinese competitors, most notably Alion and GoFa, are also significant competitors. Other companies, including Dura Automotive Systems, Inc. and CTS Corporation compete in the passenger car and light truck market and may attempt to compete in the heavy truck and transit bus market in the future.

We are ~~also~~a ~~manufacture~~worldwide ~~pneumatic~~market leader for electronic throttle control systems for ~~the diesel~~ heavy ~~truck,~~ trucks, transit ~~bus~~buses and off-road ~~vehicle~~vehicles ~~markets.~~and ~~The~~have ~~market~~recently introduced electronic throttle controls for ~~these~~the ~~pneumatic~~Indian ~~control~~and Asian light commercial vehicle ~~systems~~market. isWe ~~highly~~are ~~competitive~~the ~~and~~largest ~~characterized~~domestic byproducer ~~many~~in ~~competitors~~the heavy truck market. ~~Many~~We have a much smaller portion of the ~~customers~~ ~~for~~European ~~these~~and Asian markets. The markets for our products are ~~the~~highly ~~same~~competitive, ~~customers~~with asmany ~~for~~of our ~~heavy~~competitors ~~truck~~having substantial financial resources and significant technological capabilities. Our ~~transit~~competitive ~~bus~~position ~~electronic~~varies ~~throttle~~among ~~control~~our ~~systems~~product lines.

The ~~When~~major ~~choosing~~competitors ~~among~~for ~~competing~~our electronic throttle ~~control~~controls ~~systems,~~include weAB Eletronik ~~believe~~GmbH, ~~purchasers~~Kongsberg ofAutomotive, ~~these~~Siemens ~~systems~~VDO ~~focus~~Automotive ~~on price~~AG, ~~quality,~~Orscheln ~~value added~~Industries, ~~engineering~~Hella ~~and~~KGaA ~~reputation.~~Hueck In& ~~addition~~Co., weHeinrich ~~believe~~Kubler ~~attainment~~AG of(“KSR”) ~~the~~and TSComesys, ~~16949~~Ltd. ~~quality~~Several ~~certification~~Chinese ~~and~~competitors, ~~the~~most ~~ISO~~notably ~~14001~~Alion ~~Environmental~~and ~~Management~~GoFa, ~~System certification~~ are ~~critical~~also tosignificant competitors. ~~qualifying~~Other ascompanies, aincluding ~~supplier.~~Dura ~~Our~~Automotive ~~manufacturing facilities~~Systems, inInc. ~~Portland~~ and ~~Suzhou~~CTS Corporation ~~have~~compete ~~attained~~in the TSpassenger ~~16949~~car and ~~ISO~~light ~~14001 certifications~~truck market and ~~our~~may ~~entire product line is produced using these standards. We~~attempt ~~intend~~ to ~~seek~~compete TSin ~~16949~~the ~~and~~heavy ~~ISO~~truck ~~14001~~and ~~certifications~~transit ~~for~~bus ~~our~~market ~~Pune, India facility~~ in ~~fiscal~~the ~~2012~~future.

~~Marketing~~ We also manufacture pneumatic control systems for the diesel heavy truck, transit bus and off-road vehicle markets. The market for these pneumatic control ~~Distribution~~systems is highly competitive and characterized by many competitors. Many of the customers for these products are the same customers as for our heavy truck and transit bus electronic throttle control systems.

When Wechoosing ~~sell~~among ~~our~~competing ~~products~~electronic tothrottle ~~customers~~control ~~primarily in the heavy truck~~systems, ~~transit~~we believe ~~bus~~purchasers ~~and~~of ~~off-road~~these ~~equipment~~systems ~~industries.~~focus ~~For~~on ~~the years ended September 30~~price, ~~2011~~quality, ~~2010~~ ~~and~~value ~~2009,~~added ~~The Volvo Group accounted for 19%, 16%~~ engineering and ~~16%; Paccar, Inc~~reputation. ~~accounted~~ ~~for~~In ~~11%~~addition, 9%we ~~and~~believe ~~9%;~~attainment ~~Daimler~~of ~~Trucks~~the NATS ~~accounted~~16949 ~~for~~quality certification ~~8%, 8%~~ and ~~9%,~~the ~~and Caterpillar,~~ISO ~~Inc.~~14001 ~~accounted~~Environmental ~~for~~Management ~~8%,~~System 7%certification are ~~and~~critical 5%to ofqualifying ~~net~~as ~~sales~~a ~~from operations, respectively~~supplier. ~~Approximately~~Our ~~45%,~~manufacturing ~~41%~~facilities ~~and 37% of net sales~~ in ~~fiscal 2011, 2010~~ ~~and 2009~~Portland, ~~respectively,~~Suzhou ~~were~~and toIndia ~~customers~~have ~~outside~~attained of the ~~United~~TS ~~States, primarily~~16949 ~~in Canada, Belgium, Sweden, Mexico, China~~ and ~~Korea,~~ISO ~~and, to a lesser~~14001 ~~extent,~~certifications ~~in other European countries, South America, Pacific Rim nations~~ and ~~Australia.~~ ~~We market~~ our ~~products~~entire ~~from~~product ~~our~~line ~~sales~~is ~~facilities~~produced inusing ~~Portland,~~these ~~Oregon; Shanghai, China; Munich, Germany and through distributor networks~~standards.

InMarketing ~~fiscal 2011, 2010~~ and ~~2009, approximately 85%, 84% and 83%, respectively, of our sales were from sales of electronic throttle controls, with the remainder being sales of pneumatic control systems.~~Distribution

5 We sell our products to customers primarily in the heavy truck, transit bus and off-road equipment industries. For the years ended September 30, 2012, 2011 and 2010, The Volvo Group accounted for 17%, 19% and 16%; Paccar, Inc. accounted for 13%, 11% and 9%; Caterpillar, Inc. accounted for 10%, 8% and 7% and Daimler Trucks NA accounted for 9%, 8% and 8%,of net sales from operations, respectively. Approximately 41%, 45% and 41% of net sales in fiscal 2012, 2011 and 2010, respectively, were to customers outside of the United States, primarily in Canada, Belgium, Sweden, Mexico, China and Korea, and, to a lesser extent, in other European countries, South America, Pacific Rim nations and Australia. We market our products from our sales facilities in Portland, Oregon; Shanghai, China; Munich, Germany and through distributor networks.

~~Environmental~~ 5

~~We produce~~ In ~~minimal~~fiscal ~~quantities~~2012, of2011 ~~hazardous waste in our operations~~ and we2010, ~~are~~approximately ~~subject~~86%, ~~to federal~~85% and ~~state~~84%, ~~air~~respectively, ~~water and land pollution control laws and regulations.~~of ~~Compliance~~our ~~with~~sales ~~these~~were ~~laws~~from ~~generally~~sales ~~requires~~of uselectronic tothrottle ~~incur~~controls, ~~operating~~with ~~costs~~the ~~and~~remainder ~~capital~~primarily ~~expenditures.~~being Wesales ~~may~~of ~~incur~~pneumatic acontrol ~~substantial liability upon a failure to properly handle hazardous waste~~systems.

The soil and groundwater at the Company’s Portland, Oregon facility contains certain contaminants, which were deposited from approximately 1968 through 1995. Some of this contamination has migrated offsite to neighboring properties. The Company has retained an environmental consulting firm to investigate the extent of the contamination and to determine what remediation will be required and to assist management in estimating the associated costs. During fiscal 2004, the Company entered into the Oregon Department of Environmental Quality’s voluntary clean-up program. As of September 30, 2011, the total liability recorded for the clean-up is $869 and is classified in accrued expenses in the accompanying consolidated balance sheet. In November 2011, subsequent to our fiscal year end, the State of Oregon Department of Environmental Quality (the “DEQ”) adjusted its Risk Based Concentration (“RBC”) levels. We are currently evaluating the impact of the new standards on the remediation activities that may be required. Based on a preliminary evaluation, it appears the new standards may reduce, but not eliminate, the amount of remediation required, which would result in a reduction in our environmental liability in fiscal 2012.

We ~~asserted and filed a contractual indemnity claim against Dana Holding~~ CPproduce ~~(“Dana”),~~minimal ~~from~~quantities ~~whom~~of wehazardous ~~acquired~~waste ~~the~~in ~~Portland,~~our ~~Oregon~~operations ~~property,~~ and ~~contribution~~ ~~claims~~we ~~against the other prior owner of the property as well as~~are ~~businesses~~subject ~~previously~~to ~~located~~federal onand ~~the~~state ~~property (including Blount~~air, ~~Inc.~~water ~~(“Blount”)~~ and ~~Rosan,~~land ~~Inc.~~pollution ~~(“Rosan”))~~control ~~under~~laws ~~the Federal Superfund Act~~ and ~~the Oregon~~ ~~Cleanup Law~~regulations. ~~During~~Compliance ~~2008, we entered into a settlement agreement~~ with ~~Dana, Blount~~these ~~and~~laws ~~Rosan~~generally ~~under~~requires ~~which~~us weto ~~received total cash payments from Dana, Blount~~incur ~~and~~operating ~~Rosan~~costs ~~of $735,~~ and ~~shares~~capital ofexpenditures. ~~Dana~~We ~~stock~~may ~~equal~~incur toa ~~approximately~~substantial ~~$337 at the~~liability ~~time~~upon ofa ~~settlement,~~failure ~~and assumed the full obligation~~ to, ~~and~~properly ~~risks~~handle ~~associated with,~~hazardous ~~completing the remediation~~waste.

~~Government~~ The ~~Regulation~~soil and groundwater at the Company’s Portland, Oregon facility contains certain contaminants, which were deposited from approximately 1968 through 1995. Some of this contamination has migrated offsite to neighboring properties. The Company has retained an environmental consulting firm to investigate the extent of the contamination and to determine what remediation will be required and to assist management in estimating the associated costs. During fiscal 2004, the Company entered into the Oregon Department of Environmental Quality’s voluntary clean-up program. In November 2011, the DEQ adjusted its Risk Based Concentration (“RBC”) levels. The Company performed an evaluation of the effect of the adjusted RBC levels and recorded a $225 reduction to its environmental liability during the first quarter of fiscal 2012. As of September 30, 2012, the total liability recorded for the clean-up is $625 and is classified in accrued expenses in the accompanying consolidated balance sheet.

In ~~Our~~2007, ~~vehicle~~we ~~component~~asserted ~~products~~and ~~must~~filed ~~comply~~a ~~with~~contractual ~~the~~indemnity ~~National~~claim ~~Traffic~~against ~~and~~Dana Holding ~~Motor~~CP ~~Vehicle~~(“Dana”), ~~Safety~~from ~~Act~~whom ofwe ~~1966~~acquired the Portland, asOregon ~~amended~~property, and contribution ~~regulations~~claims ~~promulgated~~against ~~there under,~~the ~~which~~other ~~are~~prior ~~administered~~owner byof the ~~National~~property ~~Highway~~as ~~Traffic~~well ~~Safety~~as ~~Administration~~businesses previously located on the property (including Blount, Inc. (“~~NHTSA~~Blount”). Ifand Rosan, ~~after~~Inc. an(“Rosan”)) ~~investigation,~~under ~~NHTSA~~the ~~finds~~Federal ~~that~~Superfund weAct ~~are~~and the ~~not~~Oregon inCleanup ~~compliance~~Law. ~~with~~During ~~any~~2008, ofwe ~~its~~entered ~~standards~~into ora ~~regulations,~~settlement ~~among~~agreement ~~other things,~~with itDana, ~~may~~Blount ~~require~~and ~~that~~Rosan weunder ~~recall~~which ~~products~~we ~~found~~received ~~not~~total tocash bepayments infrom ~~compliance~~Dana, Blount and ~~repair or~~Rosan ~~replace~~of ~~such~~$735, ~~products.~~and ~~During~~shares ~~fiscal~~of ~~2011,~~Dana westock ~~had~~equal noto ~~product~~approximately ~~recalls. We are~~$337 ~~not~~at ~~aware~~the oftime ~~any instances~~ of ~~material~~settlement, ~~non-compliance~~and ~~with~~assumed the ~~statute~~full obligation to, and risks ~~applicable~~associated ~~regulations~~with, completing the remediation.

~~Product~~Government ~~Research and Development~~ Regulation

Our Wevehicle ~~conduct~~component ~~engineering,~~products ~~research~~must ~~and~~comply ~~development~~with ~~and~~the ~~quality~~National ~~control activities~~Traffic toand ~~maintain~~Motor Vehicle ~~and~~Safety ~~improve~~Act ~~the~~of ~~performance~~1966, ~~reliability~~as amended, and ~~cost-effectiveness~~ ofregulations ~~our~~promulgated ~~products~~there under, ~~and~~which toare ~~develop~~administered ~~new~~by ~~products.~~the ~~Our~~National ~~engineering staff~~Highway ~~works~~Traffic ~~closely~~Safety Administration ~~with~~(“NHTSA”). ~~our~~If, ~~customers~~after toan ~~design~~investigation, ~~and~~NHTSA ~~develop~~finds ~~new~~that ~~products~~we ~~and~~are ~~product~~not ~~lines~~in ~~and~~compliance towith ~~adapt~~any ~~existing~~of ~~products~~its ~~for~~standards ~~new~~or ~~applications. During fiscal 2011~~regulations, ~~2010~~among ~~and~~other ~~2009~~things, it ~~the~~may ~~Company~~require ~~spent~~that ~~$4,746,~~we ~~$4,505~~recall ~~and~~products ~~$3,981,~~found ~~respectively, on~~not ~~these~~to ~~activities.~~be ~~These~~in ~~expenses~~compliance, ~~will~~and repair ~~fluctuate~~or ~~based~~replace onsuch ~~customer~~products. ~~demands~~During ~~and the~~fiscal ~~timing~~2012, ofwe ~~new~~had no product ~~development,~~recalls. We ~~but~~are asnot ~~our~~aware ~~markets~~of ~~and~~any ~~products~~instances ~~continue to~~of ~~expand,~~material wenon-compliance ~~anticipate~~with ~~that~~the ~~these~~statute and ~~expenses~~applicable ~~may increase~~regulations.

~~Patents,~~Product ~~Trademarks~~Research and ~~Licenses~~ Development

We conduct ~~believe~~engineering, ~~our~~research ~~products~~and ~~generally~~development ~~have~~and ~~strong~~quality ~~name~~control ~~recognition~~activities into maintain ~~their~~and improve the performance, reliability and cost-effectiveness of our ~~respective~~products ~~markets.~~and Weto ~~own~~develop ~~numerous~~new ~~patents,~~products. ~~primarily~~Our ~~under~~engineering ~~the~~staff ~~“Williams”~~works closely with ~~name,~~our ~~which~~customers ~~expire~~to atdesign ~~various~~and ~~times~~develop new products and product lines and to adapt existing products for new applications. WeDuring ~~believe~~fiscal ~~that~~2012, in2011 ~~the~~and ~~aggregate~~2010, the ~~rights~~Company ~~under~~spent ~~our~~$4,527, ~~patents~~$4,835 ~~are~~and ~~generally~~$4,505, ~~valuable~~respectively, toon ~~our~~these ~~operations~~activities. These Weexpenses dowill ~~not, however,~~fluctuate ~~consider~~based ~~any~~on ~~individual~~customer ~~patent~~demands orand ~~group~~the timing of ~~patents~~new product development, but as our markets and products continue to beexpand, ofwe ~~material~~anticipate ~~importance~~that tothese ~~our~~expenses ~~total~~may ~~business~~increase.

~~The Company has a non-exclusive license for use in our adjustable pedal product lines. The Company is obligated to make royalty payments based on the number of units we sell. Additionally~~Patents, asTrademarks ~~part of the sale of our passenger car~~ and light truck product lines to Teleflex Incorporated (now Kongsberg Automotive) on September 30, 2003, we obtained the right to use certain of Teleflex’s adjustable pedal patents in exchange for Teleflex receiving fully paid licenses for certain of our patents. Licenses

6 We believe our products generally have strong name recognition in their respective markets. We own numerous patents, primarily under the “Williams” name, which expire at various times. We believe that, in the aggregate, the rights under our patents are generally valuable to our operations. We do not, however, consider any individual patent or group of patents to be of material importance to our total business.

~~In fiscal 2005,~~ The weCompany ~~entered~~has ~~into~~a annon-exclusive ~~agreement~~license ~~with~~for ~~Moving~~use ~~Magnet~~in ~~Technology~~our SAadjustable ~~(“MMT”)~~pedal ~~to license~~product ~~certain sensor technology~~lines. WeThe ~~use~~Company ~~this~~is ~~license~~obligated to ~~internally produce sensors for use in our electronic throttle controls. We~~ make royalty payments based on the number of units ~~sold,~~we ~~which includes minimum yearly royalties~~sell. ~~This~~Additionally, ~~agreement~~as ~~is for~~part ~~a period~~ of ~~ten~~the ~~years~~sale ~~and~~of ~~may~~our bepassenger ~~renewed~~car ~~annually~~and ~~based on written mutual~~light ~~agreement.~~truck ~~This~~product ~~agreement~~lines ~~may~~to beTeleflex ~~terminated~~Incorporated by(now ~~the~~Kongsberg ~~licensor~~Automotive) ~~if certain sales~~on ~~thresholds~~September ~~are~~30, ~~not~~2003, ~~met.~~we Asobtained of the ~~end~~right ofto ~~fiscal~~use ~~2011,~~certain ~~the~~of Teleflex’s ~~Company~~adjustable ~~has~~pedal ~~met~~patents ~~the minimum~~in ~~sales~~exchange ~~thresholds~~for ~~and~~Teleflex ~~expects~~receiving ~~that~~fully paid itlicenses ~~will~~for docertain soof inour ~~fiscal 2012~~patents.

~~Raw Materials; Reliance on Single Source Suppliers~~ 6

We In ~~purchase~~fiscal ~~certain~~2005, ofwe ~~our~~entered ~~component~~into ~~parts that are derived from raw~~an ~~materials,~~agreement ~~including~~with ~~brass,~~Moving ~~aluminum,~~Magnet ~~steel,~~Technology ~~plastic,~~SA ~~rubber, zinc and neodymium~~ (~~a rare earth metal~~“MMT”). ~~These~~to ~~materials~~license ~~currently~~certain ~~are widely available at~~sensor ~~reasonable~~technology. ~~terms,~~We ~~but~~use ~~are~~this ~~subject~~license to ~~volatility~~internally ofproduce ~~prices~~sensors ~~due~~for touse ~~fluctuations~~ in our ~~the~~electronic ~~commodity~~throttle ~~markets~~controls. ~~Future~~We ~~demand~~make ~~and~~royalty ~~other~~payments ~~factors,~~based ~~such~~on asthe ~~currency fluctuations,~~number ~~supply~~of ~~shortages or disruptions~~units sold, ~~may~~which ~~result~~includes inminimum ~~price~~yearly ~~increases causing~~royalties. ~~higher~~This ~~costs~~agreement is for ~~some~~a period of ~~our~~ten ~~components.~~years ~~Although historically commodities~~ and ~~component~~may ~~prices~~be ~~have~~renewed ~~increased,~~annually webased ~~have~~on ~~not~~written ~~been~~mutual ~~subject to~~agreement. ~~supply~~This ~~constraints~~agreement onmay ~~these~~be ~~components~~terminated asby athe ~~result~~licensor ofif ~~these~~certain ~~factors.~~sales ~~During~~thresholds ~~2011,~~are ~~although~~not ~~worldwide~~met. ~~reserves~~As ~~remained~~of ~~adequate,~~ the ~~supply~~end of ~~neodymium decreased~~fiscal ~~significantly~~2012, ~~and~~ the ~~price~~Company ~~increased~~has ~~significantly~~met ~~due~~the ~~to political~~minimum ~~factors,~~sales ~~primarily~~thresholds inand ~~China.~~expects Bythat ~~the~~it ~~end~~will ofdo ~~2011,~~so ~~the~~in ~~price~~fiscal ~~had begun to decline and supplies were increasing~~2013.

~~Product Warranty~~Raw Materials; Reliance on Single Source Suppliers

We purchase ~~warrant~~certain of our ~~products~~component toparts ~~the~~that ~~first~~are ~~purchaser~~derived ~~and~~from ~~subsequent~~raw ~~owners~~materials, ~~against~~including ~~malfunctions~~brass, ~~occurring~~aluminum, ~~during~~steel, ~~the~~plastic, ~~warranty~~rubber, ~~period~~zinc ~~resulting~~and ~~from~~neodymium ~~defects~~(a rare inearth ~~material~~metal). orThese ~~workmanship,~~materials ~~subject~~currently toare ~~specified~~widely ~~limitations.~~available ~~The~~at ~~warranty on~~reasonable ~~vehicle~~terms, ~~components~~but isare ~~limited~~subject to avolatility ~~specified~~of ~~time~~prices ~~period,~~due ~~mileage~~to orfluctuations ~~hours~~in ofthe ~~use,~~commodity ~~and~~markets. ~~varies~~Future bydemand ~~product~~and other factors, ~~application~~such ~~and~~as ~~customer.~~currency fluctuations, Wesupply ~~have~~shortages ~~established~~or ~~a warranty~~disruptions, ~~liability~~may ~~based~~result ~~upon~~in ~~our~~price ~~estimate~~increases causing ofhigher ~~the~~costs ~~future~~for ~~cost~~some of ~~warranty~~our ~~and~~components. Although historically ~~related~~commodities ~~service~~and ~~costs.~~component Weprices ~~regularly~~have ~~monitor~~increased, ~~our~~we ~~warranty~~have ~~liability~~not ~~for~~been ~~adequacy~~subject to insignificant ~~response~~supply toconstraints ~~historical~~on ~~experience~~these ~~and~~components ~~other~~as a result of these factors.

~~Employees~~Product Warranty

We Aswarrant ~~of September 30, 2011, we employed 134 employees in~~ our ~~Portland, Oregon~~products ~~facility,~~to ofthe ~~which~~first ~~approximately~~purchaser ~~46 were engaged in manufacturing~~ and ~~88 were~~subsequent ~~involved~~owners ~~in sales, engineering and administrative functions. As of~~against ~~September~~malfunctions ~~30,~~occurring ~~2011,~~during wethe ~~employed~~warranty ~~111~~period ~~employees~~resulting ~~in China,~~from ofdefects ~~which 57 were engaged~~ in ~~manufacturing and approximately 54 were~~ ~~engaged~~material inor ~~sales~~workmanship, ~~engineering~~subject ~~and~~to ~~administrative~~specified ~~functions~~limitations. WeThe ~~opened~~warranty ~~our Pune,~~on ~~India~~vehicle ~~facility~~components inis ~~the~~limited ~~latter~~to ~~part~~a ofspecified ~~fiscal~~time ~~2010 and as of September 30~~period, ~~2011~~mileage ~~we employed~~or 24hours ~~employees~~of use, ~~of which 16 were engaged in manufacturing~~ and 8varies ~~were engaged~~by ~~in sales~~product, ~~engineering~~application and ~~administrative functions~~customer. We ~~also~~ have ~~4 employees~~established ~~in Europe as of September 30, 2011. Our hourly employees engaged in~~a ~~manufacturing~~warranty inliability ~~the~~based ~~Portland,~~upon ~~Oregon~~our ~~facility~~estimate ~~are~~of ~~represented by~~ the ~~International~~ ~~Union,~~future ~~United~~cost ~~Automobile Workers~~ of ~~America~~warranty and related ~~Amalgamated~~service ~~Local 492~~costs. InWe ~~February~~regularly ~~2009,~~monitor weour ~~signed~~warranty aliability ~~new~~for ~~labor agreement which will expire on~~adequacy ~~August~~in ~~31,~~response ~~2013.~~to Ashistorical ofexperience ~~September~~and ~~30,~~other ~~2011, we employed a total of 38 people pursuant to this labor agreement~~factors.

~~Forward-Looking Statements~~ Employees

As ~~This report on Form 10-K contains forward-looking statements within the meaning~~ of ~~Section~~September ~~21D~~30, ~~of the Securities Exchange Act of 1934~~2012, aswe ~~amended~~employed ~~(the “Exchange~~140 ~~Act”).~~employees ~~Forward-looking~~in ~~statements~~our ~~include~~Portland, ~~all statements other than~~Oregon ~~those that expressly state historical fact. Among others~~facility, ~~this~~of ~~report~~which ~~includes forward~~approximately ~~looking~~46 ~~statements~~were ~~that~~engaged ~~describe~~in ~~our~~manufacturing ~~plans~~ and ~~intentions~~94 ~~regarding~~were ~~future~~involved ~~courses~~in ofsales, ~~action~~engineering and ~~the~~administrative ~~possible~~functions. ~~outcomes~~As of ~~those~~September 30, ~~intentions~~2012, ~~and~~we ~~that set~~employed ~~forth~~115 ~~our~~employees ~~expectations~~in ~~regarding our prospective financial condition~~China, ~~results~~ of ~~operations,~~which ~~and~~57 ~~cash~~were ~~flows.~~engaged ~~Forward-looking statements can sometimes~~in bemanufacturing ~~identified~~and byapproximately ~~the~~58 ~~use~~were ofengaged ~~forward-looking~~in ~~terminology~~sales, ~~such~~engineering ~~as “may”, “will”,~~and ~~“should”,~~administrative ~~“expect”, “anticipate”, “estimate”, “continue”, “plans” and “intends”~~functions. ~~Although~~ weWe ~~believe~~opened ~~that~~our ~~the~~Pune, ~~expectations~~India ~~reflected~~facility in ~~such~~the ~~forward-looking~~latter part ~~statements~~of ~~are~~fiscal ~~reasonable,~~2010 ~~such forward-looking statements are subject to risks~~ and ~~uncertainties~~as ~~that~~of ~~could~~September ~~cause~~30, us2012 towe ~~deviate~~employed ~~from~~25 ~~our current plans~~employees, ~~and~~of which ~~could~~14 ~~cause~~were ~~our~~engaged ~~actual~~in ~~results~~manufacturing toand ~~differ~~11 ~~materially~~were ~~from~~engaged ~~those~~in ~~indicated~~sales, byengineering ~~the~~and ~~forward-looking~~administrative ~~statements~~functions. ~~Similarly,~~We wealso ~~may~~have ~~deviate~~4 ~~from~~employees ~~the plans and intentions expressed~~ in ~~this~~Europe ~~report,~~as ~~which may further cause our results to vary. Some~~ of ~~the factors that could cause our actions or performance to differ~~September ~~from~~30, or2012. ~~our~~Our ~~results~~hourly toemployees ~~fall~~engaged ~~short~~in ~~of,~~manufacturing ~~our expectations are described~~ in the ~~section~~ ofPortland, ~~this~~Oregon facility ~~report~~are ~~entitled~~represented ~~“Section~~by ~~1A:~~the ~~Risk~~International ~~Factors~~Union,” ~~and~~United inAutomobile ~~our other~~Workers ~~reports~~of toAmerica and ~~filings~~Amalgamated ~~with~~Local ~~the~~492. ~~Securities~~In ~~and~~February ~~Exchange~~2009, ~~Commission~~we ~~from~~signed ~~time~~a tonew labor ~~time.~~agreement ~~These~~which ~~risks~~will ~~and~~expire ~~uncertainties~~on ~~are~~August ~~beyond our control and~~31, in2013. ~~many~~As ~~cases;~~of weSeptember ~~cannot~~30, ~~predict~~2012, ~~the risks and uncertainties~~we ~~that~~employed ~~could~~a ~~cause~~total ~~our~~of ~~actual~~46 ~~results~~people pursuant to ~~differ~~this ~~materially~~labor ~~from those indicated by the forward-looking statements~~agreement.

7Forward-Looking Statements

~~The~~ This report on Form 10-K contains forward-looking statements ~~are~~within ~~made~~the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include all statements other than those that expressly connote an assertion of historical fact. Among others, this report includes forward looking statements that describe our plans and intentions regarding future courses of action and the ~~date~~possible ~~hereof~~outcomes of those intentions, and that set forth our expectations regarding our prospective financial condition, ~~except~~results of operations, and cash flows. Forward-looking statements can sometimes be identified by the use of forward-looking terminology, such as “may”, “will”, “should”, “expect”, “anticipate”, ~~otherwise~~“estimate”, ~~required~~“continue”, “plans” and “intends”. Although we believe that the expectations reflected in such forward-looking statements are reasonable, such forward-looking statements are subject to risks and uncertainties that could cause us to deviate from our current plans, and could cause our actual results to differ materially from those indicated by ~~law~~the forward-looking statements. Similarly, we ~~cannot~~may ~~undertake~~deviate from the plans and intentions expressed in this report, which may further cause our results to ~~update~~vary. Some of the factors that could cause our actions or ~~revise~~performance ~~these~~to differ from, or our results to fall short of, our expectations are described in the section of this report entitled “Section 1A: Risk Factors,” and in our other reports to and filings with the Securities and Exchange Commission from time to time. These risks and uncertainties are beyond our control and, in many cases; we cannot predict the risks and uncertainties that could cause our actual results to differ materially from those indicated by the forward-looking statements.

Investors are cautioned to consider the risk factors identified below when considering forward-looking statements. If any of these items actually occur, our business, results of operations, financial condition or cash flows could be materially adversely affected. 7

~~Available~~ The ~~Information~~forward-looking statements are made as of the date hereof, and, except as otherwise required by law, we cannot undertake to update or revise these statements.

Investors ~~The~~are ~~Company~~cautioned ~~maintains~~to aconsider ~~website on~~ the ~~Internet~~risk atfactors ~~www.wmco.com.~~identified ~~The~~below ~~Company~~when ~~makes~~considering ~~available~~forward-looking ~~free~~statements. ofIf ~~charge~~any ~~through~~of ~~its~~these ~~website~~items ~~its~~actually ~~reports~~occur, ~~and~~our ~~other~~business, ~~communications~~results ~~filed or furnished pursuant to Sections 13 (a) and 14 (a)~~ of ~~the Exchange~~operations, ~~Act.~~financial ~~The~~condition ~~information~~or oncash ~~our~~flows ~~website~~could isbe ~~not part of this report and is~~materially ~~not~~adversely ~~otherwise to be considered filed with or furnished to the SEC~~affected.

~~ITEM~~Available ~~1A. RISK FACTORS~~Information

The AnCompany ~~investment~~maintains ina ~~our~~website ~~common~~on ~~stock~~the ~~involves~~Internet aat ~~high~~www.wmco.com. ~~degree~~The Company makes available free of ~~risk.~~charge ~~You~~through its website its reports and other ~~should~~communications ~~carefully~~filed ~~consider~~or ~~the~~furnished ~~risks~~pursuant ~~discussed~~to ~~below~~Sections 13 (a) and 14 (a) of the Exchange ~~other~~Act. The information in on our website is not part of this report onand ~~Form~~is not ~~10-K~~otherwise ~~before~~to ~~deciding~~be ~~whether~~considered tofiled ~~invest~~with inor ~~our~~furnished ~~common~~to ~~stock~~the SEC.

AITEM ~~significant~~1A. ~~portion~~RISK ofFACTORS ~~our sales are derived from a limited number of customers, and results of operations could be adversely affected and stockholder value harmed if we lose any of these customers.~~

An Ainvestment ~~significant~~in ~~portion of~~ our ~~revenues~~common ~~historically~~stock ~~have~~involves ~~been derived from~~ a ~~limited~~high ~~number~~degree of ~~customers~~risk. ~~Further,~~You ~~each of these customers is a~~should ~~manufacturer~~carefully ofconsider ~~heavy~~the ~~trucks,~~risks ~~off-road~~discussed ~~vehicles~~below ~~or components,~~ and the ~~worldwide truck~~other ~~and~~information ~~off-road~~in ~~industries have historically been cyclical markets that are~~this atreport ~~times~~on ~~have~~Form ~~been~~10-K ~~subject~~before todeciding ~~significant~~whether ~~financial stress and uncertainty. Were any of our key customers~~ to ~~place~~invest ~~some~~in ~~or all of their business with one or more of~~ our ~~competitors~~common ~~or cease operations, we may face a material adverse impact upon our revenues, net income, cash flows and financial condition~~stock.

~~Reduced~~We ~~spending~~have ~~due~~announced toour ~~weakness~~intention into be ~~the~~acquired ~~financial~~by ~~and~~Curtiss-Wright ~~credit markets~~ and ~~uncertainties~~if inthat ~~the~~transaction ~~economy,~~is ~~domestically~~not concluded ~~and~~successfully ~~internationally,~~we may ~~adversely~~face ~~affect~~challenges in growing our ~~revenues~~business and ~~operating results.~~remaining competitive.

On WeNovember ~~depend~~1, on2012 ~~demand~~we ~~from~~announced ~~the~~that ~~OEM~~we ~~component~~had ofentered ~~the~~into ~~heavy~~a ~~truck,~~merger ~~bus~~agreement ~~and~~with ~~off~~Curtiss-~~road~~Wright, ~~markets~~pursuant ~~for~~to which Curtiss-Wright would acquire the ~~end~~Company ~~market~~in ~~applications~~a combination ~~that~~tender ~~use~~offer ~~our~~and ~~products~~merger. ~~All~~We ~~of these~~currently ~~markets~~expect ~~have~~the ~~been,~~transactions ~~and~~to close ~~may~~in ~~continue~~December to2012. beHowever, ~~adversely~~the ~~affected~~transactions byare ~~worldwide~~subject to a number of ~~economic~~closing conditions~~. Accordingly~~, including our ~~business~~stockholders ~~may~~having betendered ~~adversely~~more ~~impacted~~than bya ~~reductions~~majority inof ~~demand~~our ~~for~~outstanding ~~our~~common ~~products~~stock as(on a ~~result~~fully-diluted ofbasis) ~~uncertain conditions~~ in the ~~macroeconomic~~Tender ~~environment~~Offer, ~~such~~the asreceipt ~~volatile~~of ~~energy~~certain ~~prices,~~governmental ~~inflation~~approvals, and that there be ~~fluctuations~~no inlegal ~~interest~~impediment ~~rates,~~to ~~difficulty~~completing ~~securing~~the ~~credit,~~transactions. ~~volatility~~Were inany of these ~~security~~conditions ~~prices~~to fail, and ~~the~~a ~~corresponding~~party ~~uncertainties~~were ~~surrounding~~to ~~equity~~terminate ~~finance~~the merger agreement and ~~markets~~abandon the transactions, ~~diminished~~we ~~liquidity~~would expect to face an immediate and ~~other~~significant reduction ~~economic~~in ~~factors~~the market price of our common stock. ~~The~~Moreover, ~~resulting~~we ~~decrease~~may face difficulties in ~~demand~~establishing ~~has~~and maintaining long-term relationships with our key customers and suppliers, who may ~~continue~~question our long-term willingness and ability to ~~adversely~~remain ~~impact~~independent. Additionally, we may face difficulties in attracting financing on terms we deem reasonable, or at all. Any one or more of these events could have a material adverse effect upon our ~~revenues~~results of operations, financial condition and ~~stockholder value~~cash flows.

~~Negative~~A ~~economic~~significant ~~conditions~~portion ~~also~~of ~~may materially impact~~ our ~~customers, suppliers~~sales ~~and other parties with which we do business. Economic and financial~~are ~~market~~derived ~~conditions~~from ~~that~~a ~~adversely~~limited ~~affect~~number ~~our customers may cause them to terminate existing purchase orders or to reduce the volume~~ of ~~products they purchase from us in the future. We normally do not require~~ customers, ~~to post collateral as security for receivables~~ and weresults doof ~~not~~operations ~~purchase~~could ~~credit insurance. We may have significant balances owing from customers who operate in cyclical industries or who may not~~ be ~~able to secure sufficient credit in order to honor~~ ~~their~~adversely ~~obligations~~affected toand ~~us.~~stockholder ~~Failure~~value toharmed ~~collect~~if awe ~~significant~~lose ~~portion~~any of ~~amounts due~~these ~~on those receivables could have an adverse effect on our results of operations and financial condition~~customers.

A ~~Adverse~~significant ~~economic~~portion ~~and~~of ~~financial~~our ~~market~~revenues ~~conditions~~historically ~~also~~have ~~may~~been ~~cause~~derived ~~our~~from a ~~suppliers~~limited tonumber beof ~~unable~~customers. toFurther, ~~provide~~each ~~materials~~of ~~and~~these ~~components~~customers tois usa ~~or may cause~~manufacturer ~~suppliers~~of toheavy ~~make~~trucks, ~~changes~~off-road invehicles ~~the~~or ~~credit~~components, ~~terms~~and ~~they~~the ~~extend~~worldwide totruck ~~us, such as~~and ~~shortening~~off-road ~~the~~industries ~~required~~have ~~payment~~historically ~~period~~been ~~for~~cyclical ~~our~~markets ~~amounts~~that ~~owing~~are ~~them~~at ~~or reducing~~times ~~the~~have ~~maximum~~been ~~amount~~subject ofto ~~trade~~significant ~~credit~~financial ~~available~~stress toand usuncertainty. ~~While~~Were weany ~~have not~~of ~~experienced~~our ~~changes~~key ofcustomers ~~this~~to ~~type,~~place ~~they~~some ~~could~~or ~~significantly~~all ~~affect~~of ~~our~~their ~~liquidity and~~business ~~could~~with ~~have~~one anor ~~adverse~~more ~~effect~~of our oncompetitors ~~our~~or ~~results of~~cease operations, ~~and~~we ~~financial~~may ~~condition.~~face Ifa wematerial ~~are~~adverse ~~unable~~impact ~~to successfully~~upon ~~anticipate~~our ~~and~~revenues, ~~address~~net ~~changing~~income, ~~economic~~cash flows and financial ~~markets conditions, our business could be negatively affected~~condition.

8Reduced spending due to weakness in the financial and credit markets and uncertainties in the economy, domestically and internationally, may adversely affect our revenues and operating results.

~~Our~~ We depend on demand from the OEM component of the heavy truck, bus and off-road markets for the end market applications that use our products. ~~could~~All of these markets have been, and may continue to be, ~~recalled~~adversely affected by worldwide economic conditions. Accordingly, our business may be adversely impacted by ~~which~~reductions ~~could~~in ~~increase~~demand for our ~~costs~~products as a result of uncertain conditions in the macroeconomic environment, such as volatile energy prices, inflation, fluctuations in interest rates, difficulty securing credit, volatility in security prices and the corresponding uncertainties surrounding equity finance markets, diminished liquidity and other economic factors. The resulting decrease in demand has and may continue to adversely impact our revenues and stockholder value.

Our vehicle component products must comply with the National Traffic and Motor Vehicle Safety Act of 1966, as amended, and regulations promulgated thereunder, which are administered by the NHTSA. If NHTSA finds that we are not in compliance with its standards or regulations, it may, among other things, require that we recall products found not to be in compliance, and repair or replace such products. Such a recall could materially increase our costs and adversely impact our reputation in our industry, both of which would adversely affect our revenues, profit margins, results of operations and stockholder value.8

We Negative economic ~~purchase~~conditions ~~component~~also ~~parts~~may ~~from~~ materially impact our customers, suppliers and other ~~changes~~parties inwith ~~the~~which ~~relationships~~we ~~with~~do ~~such~~business. ~~suppliers,~~Economic asand ~~well~~financial asmarket ~~increases~~conditions inthat ~~the~~adversely ~~costs~~affect ofour ~~raw~~customers ~~materials~~may ~~that~~cause ~~comprise~~them ~~our~~to ~~component~~terminate existing ~~and/~~purchase orders or to reduce the volume of products they purchase from ~~component~~us ~~parts,~~in ~~would~~the ~~adversely~~future. ~~affect~~We ~~our~~normally ~~ability~~do not require customers to ~~produce~~post collateral as security for receivables and ~~market~~we ~~our~~do not purchase credit insurance. We may have ~~products,~~significant ~~which~~balances ~~would~~owing ~~adversely~~from ~~affect~~customers ~~our~~who ~~profit~~operate ~~margins,~~in cyclical industries or who may not be able to secure sufficient credit in order to honor their obligations to us. Failure to collect a significant portion of amounts due on those receivables could have an adverse effect on our results of operations and financial ~~stockholder value~~condition.

Adverse Weeconomic ~~purchase~~and ~~component~~financial ~~parts~~market ~~from~~conditions ~~suppliers~~also tomay because ~~used in the manufacturing of~~ our ~~products.~~suppliers Ifto abe unable ~~supplier fails~~ to provide ~~necessary component~~materials ~~parts,~~and wecomponents ~~may be unable~~ to ~~produce,~~us or may ~~face~~cause ~~delays~~suppliers orto ~~cost~~make ~~increases~~changes in ~~producing,~~the ~~certain~~credit ~~products.~~terms ~~These~~they ~~potentialities~~extend ~~could~~to ~~result in a decrease in revenue~~us, asuch ~~loss~~as ofshortening ~~timeliness~~the ~~in product deliveries, and adverse~~required ~~impacts~~payment onperiod ~~our~~for ~~reputation in~~ our ~~industry.~~amounts ~~Also,~~owing ifthem ~~prices of raw materials that comprise our component parts and/~~or reducing the ~~component~~maximum ~~parts~~amount ~~increase,~~of ~~or if a~~trade ~~supplier~~credit ~~increased~~available ~~prices~~to ~~for~~us. ~~other~~While ~~reasons, and~~ we ~~are~~have not ~~able~~experienced tochanges ~~mitigate these~~of ~~costs~~this ortype, they ~~pass~~could onsignificantly ~~such~~affect ~~increase~~our toliquidity ~~our~~and ~~customers,~~could ~~our~~have ~~profit~~an ~~margins~~adverse ~~would~~effect ~~decrease.~~on ~~Finally, if~~ our ~~suppliers~~results ~~(or~~of ~~any~~operations ~~alternative~~and ~~suppliers~~financial ~~from~~condition. ~~which~~If we ~~choose~~ or are ~~required~~unable to ~~acquire components) delivers products that do not meet~~ ~~our~~successfully ~~specifications~~anticipate orand ~~cause~~address uschanging toeconomic ~~fail~~and tofinancial ~~meet our product standards, we may~~markets ~~face losses in revenues~~conditions, ~~reputational~~our ~~harm, and potentially other adverse~~ business ~~consequences. The occurrence of any of these events~~ could ~~adversely affect~~be ~~our~~negatively ~~results of operations and stockholder value~~affected.

Our products could be ~~subject to product liability claims by customers and/or consumers~~recalled, which ~~would adversely~~could ~~affect~~increase our ~~profit~~costs ~~margins, results of operations~~ and ~~stockholder~~decrease ~~value~~our revenues.

Our ~~The~~vehicle ~~majority~~component ~~of our~~ products ~~are~~must ~~used~~comply onwith ~~heavy~~the ~~trucks~~National Traffic and ~~transit buses.~~Motor IfVehicle ~~our~~Safety ~~products~~Act ~~are~~of ~~not~~1966, ~~properly~~as ~~designed~~amended, ~~or built~~ and~~/or~~ ~~personal~~regulations ~~injuries~~promulgated orthereunder, ~~property~~which ~~damages~~ are ~~attributed~~administered toby the ~~performance~~NHTSA. ofIf ~~our~~NHTSA ~~equipment,~~finds that we ~~could~~are benot in ~~subject~~compliance towith ~~claims~~its ~~for~~standards ~~damages~~or ~~based~~regulations, onit ~~theories~~may, ofamong ~~product liability and~~ other ~~legal~~ ~~theories. We maintain liability insurance for these personal injury and~~things, ~~property~~require ~~damage~~that ~~risks,~~we ~~but~~recall ~~not~~products ~~for~~found ~~claims that do~~ not ~~involve personal injury or property damage. The costs and resources~~ to ~~defend~~be ~~such~~in ~~claims could be substantial~~compliance, and ifrepair or replace such ~~claims~~products. ~~are~~Such ~~successful,~~a werecall could bematerially ~~responsible~~increase ~~for paying~~our ~~some~~costs orand adversely ~~all~~impact ~~of the damages. Also,~~ our reputation ~~could~~in beour ~~adversely affected~~industry, ~~regardless~~both of ~~whether~~which ~~such claims are successful. Any of these results~~ would adversely affect our revenues, profit margins, results of operations and stockholder value. ~~During fiscal 2010 we settled such a product liability case which was not covered by our liability insurance. Refer to ITEM 3 – LEGAL PROCEEDINGS.~~

~~Our~~We ~~defined~~purchase ~~benefit~~component ~~pension~~parts ~~plans~~from suppliers ~~are~~and ~~under-funded~~changes ~~and,~~in ~~therefore~~the relationships with such suppliers, weas ~~may~~well beas ~~required~~increases toin the ~~increase~~costs of raw materials that comprise our ~~contributions~~ tocomponent and/or the ~~plans~~component parts, would adversely affect our ability to produce and market our products, which would adversely affect our ~~cash~~profit ~~flows.~~margins, results of operations and stockholder value.

We purchase ~~maintain~~component ~~two~~parts ~~defined~~from ~~benefit~~suppliers ~~pension~~to ~~plans~~be ~~among~~used in the ~~retirement~~manufacturing ~~plans we~~of ~~sponsor~~our products. NoIf ~~new~~a ~~employees~~supplier ~~are~~fails ~~being~~to ~~admitted~~provide necessary component parts, we may be unable to ~~participate~~produce, or may face delays or cost increases in ~~these~~producing, ~~two~~certain ~~plans~~products. ~~Participants~~These potentialities could result in ~~these~~a ~~two~~decrease ~~plans~~in ~~are~~revenue, ~~entitled~~a toloss of timeliness in product deliveries, and adverse impacts on our reputation in our industry. Also, if prices of raw materials that comprise our component parts and/or the component parts increase, or if a ~~fixed~~supplier ~~formula~~increased ~~benefit~~prices for ~~upon~~other ~~retirement.~~reasons, ~~Although~~and we ~~make~~are ~~regular~~not ~~contributions~~able to mitigate these ~~two~~costs ~~plans~~or ~~in accordance~~pass ~~with~~on ~~minimum~~such increase ~~ERISA~~to ~~funding~~our ~~requirements~~customers, ~~investment~~our ~~earnings~~profit ~~may~~margins ~~be less~~would ~~than~~decrease. ~~expected~~Finally, ~~and~~if our suppliers (or any alternative suppliers from which we ~~may~~choose beor are required to acquire ~~increase~~components) ~~contributions~~delivers products that do not meet our specifications or cause us to ~~the~~fail to meet our product standards, we may face losses in revenues, ~~under-funded~~reputational ~~plan(s)~~harm, ~~which~~and ~~would~~potentially other adverse business consequences. The occurrence of any of these events could adversely affect our ~~cash~~results ~~flows~~of operations and stockholder value.

~~The~~Our ~~market~~products ~~price~~could ofbe ~~our~~subject ~~stock~~to ~~has~~product ~~been~~liability claims by customers and/or ~~may~~consumers, ~~continue~~which towould beadversely ~~volatile~~affect our profit margins, ~~which~~results ~~could~~of ~~result~~operations inand ~~losses~~stockholder ~~for stockholders~~value.

The ~~Our~~majority ~~common~~of ~~stock~~our isproducts ~~currently~~are ~~listed~~used on ~~the~~heavy ~~NYSE~~trucks ~~Amex~~ and istransit ~~thinly traded~~buses. ~~Volatility~~If ofour products ~~thinly~~are ~~traded~~not ~~stocks~~properly isdesigned ~~typically~~or ~~higher~~built ~~than~~and/or ~~the~~personal injuries or ~~volatility~~property ofdamages ~~more~~are ~~liquid~~attributed ~~stocks~~to ~~with~~the ~~higher~~performance ~~trading~~of ~~volumes.~~our ~~The~~equipment, ~~market~~we ~~price~~could ofbe ~~our~~subject ~~common~~to ~~stock~~claims ~~has~~for ~~been~~damages based on theories of product liability and, other inlegal ~~the~~theories. ~~future,~~We ~~could~~maintain beliability ~~subject~~insurance tofor ~~significant~~these personal injury ~~fluctuations~~and asproperty adamage ~~result~~risks, ofbut ~~the~~not ~~foregoing,~~for asclaims ~~well~~that asdo ~~variations~~not ininvolve ~~our~~personal ~~operating~~injury ~~results,~~or ~~announcements~~property ofdamage. ~~technological~~The ~~innovations~~costs orand ~~new~~resources ~~products~~to bydefend such claims could usbe orsubstantial, ~~our~~and ~~competitors~~if such claims are successful, ~~announcements~~we ofcould ~~new~~be ~~strategic~~responsible for ~~relationships~~paying bysome us or ~~our~~all ~~competitors,~~of ~~general~~the ~~conditions~~damages. inAlso, our ~~industries~~reputation ~~or market~~could ~~conditions~~be ~~unrelated~~adversely affected, toregardless ~~our~~of ~~business~~whether ~~and~~such ~~operating~~claims ~~results~~are successful. Any of these results ~~could~~would adversely ~~impact~~affect our profit margins, results of operations and stockholder value. During fiscal 2010 we settled such a product liability case which was not covered by our liability insurance.

9Our defined benefit pension plans are under-funded and, therefore, we may be required to increase our contributions to the plans, which would adversely affect our cash flows.

~~Current economic conditions could adversely affect our operations.~~ 9

In We maintain ~~prior~~two ~~years, financial~~defined ~~markets~~benefit inpension plans among the ~~United~~retirement ~~States~~plans ~~and~~we sponsor. ~~abroad~~No ~~have~~new ~~experienced~~employees ~~extreme disruption,~~are ~~including~~being ~~severely~~admitted ~~diminished~~to ~~liquidity~~participate ~~and~~in ~~credit~~these ~~availability.~~two Ifplans. Participants in these ~~conditions~~two ~~were~~plans are entitled to ~~occur~~a ~~again,~~fixed ~~they~~formula ~~could~~benefit ~~impair~~upon retirement. ~~our~~Although ~~ability~~we make regular contributions to ~~access~~these two plans in ~~credit~~accordance ~~markets~~with ~~and~~minimum ~~there~~ERISA ~~can~~funding requirements, investment earnings may be less nothan ~~assurance~~expected, ~~that~~and ~~these~~we ~~conditions~~may ~~will~~be ~~not~~required to increase contributions to the under-funded plan(s), which would adversely affect our ~~business~~cash ~~in the future~~flows.

AtThe ~~September~~market ~~30,~~price ~~2011,~~of weour ~~had~~stock onhas ~~hand~~been ~~cash~~ and ~~cash equivalents of~~ ~~$1,339.~~may Incontinue ~~June~~to ~~2010,~~be ~~the Company entered into a revolving loan facility with U.S. Bank~~volatile, which ~~expires~~could onresult ~~June~~in ~~30,~~losses 2012. As of September 30, 2011, the outstanding balance on the revolving loan facility is $1,575 and the Company had available under its revolving credit facility $5,540. We believe our cash on hand and the revolving credit facility will be sufficient to meet our working capital needs for ~~the foreseeable future~~stockholders. ~~However, were we to require additional borrowing capacity, we may be unable to locate such capacity on acceptable terms or at all.~~

~~The~~ Our common ~~soil~~stock is currently listed on the NYSE Amex and ~~groundwater~~is atthinly traded. Volatility of thinly traded stocks is typically higher than the volatility of more liquid stocks with higher trading volumes. The market price of our common ~~Portland~~stock has been and, ~~Oregon~~in ~~facility~~the ~~contains~~future, ~~certain~~could ~~contaminants~~be ~~that~~subject ~~may~~to ~~require~~significant fluctuations as a result of the foregoing, as well as variations in our operating results, announcements of technological innovations or new products by us toor our ~~incur~~competitors, ~~substantial~~announcements ~~expense~~of tonew ~~investigate~~strategic ~~and~~relationships ~~remediate~~by us or our competitors, ~~which~~general ~~would~~conditions ~~adversely~~in our industries or market conditions ~~affect~~unrelated to our ~~profit~~business ~~margins,~~and operating results. Any of ~~operations~~these ~~and~~results ~~stockholder~~could adversely impact stockholder value.

~~The~~Current ~~soil~~economic ~~and~~conditions groundwater at our Portland, Oregon facility contain certain contaminants. Some of this contamination has migrated offsite to neighboring properties and potentially to other properties. We have retained an environmental consulting firm to investigate the extent of the contamination and to determine what remediation will be required and the associated costs. In fiscal 2004, we entered the Oregon Department of Environmental Quality’s voluntary clean-up program and established a liability for this matter. At September 30, 2011, this liability totaled $869. Our overall costs ultimately may exceed our estimates, or we may be forced to increase the amount of our estimates, either or both of which could adversely affect our ~~financial condition, results of~~ operations ~~or cash flows~~. In November 2011, subsequent to our fiscal year end, the State of Oregon Department of Environmental Quality (the “DEQ”) has adjusted its Risk Based Concentration (“RBC”) levels. We are currently evaluating the impact of the new standards on the remediation activities that may be required. Based on a preliminary evaluation, it appears the new standards may reduce, but not eliminate, the amount of remediation required, which would result in a reduction in our environmental liability in fiscal 2012.

~~Complying~~ In prior ~~with~~years, ~~the~~financial ~~laws~~markets ~~applicable to~~in the United States and ~~foreign~~abroad ~~markets~~have ~~may~~experienced extreme ~~become~~disruption, ~~more~~including ~~difficult~~severely diminished liquidity and ~~expensive~~credit inavailability. ~~the~~If ~~future~~these conditions were to occur again, ~~which~~they could ~~adversely~~impair ~~affect~~ our ability ~~results~~to ofaccess ~~operations~~credit markets and there can be no assurance that these ~~stockholder~~conditions ~~value~~will not adversely affect our business in the future.

At ~~Our~~September ~~operations~~30, in2012, ~~the~~we ~~United~~had ~~States~~on hand cash and ~~foreign~~cash ~~markets~~equivalents ~~are~~of ~~subject~~$1,750. toIn June 2012, the ~~laws~~Company ofamended ~~such~~its ~~markets.~~revolving ~~Compliance~~loan facility with ~~these~~U.S. ~~laws~~Bank, ~~may~~which ~~become more difficult~~now ~~and~~matures ~~costly~~on inJune ~~the~~30, ~~future~~2014. InAs ~~addition~~of September 30, ~~these~~2012, ~~laws~~the ~~may~~outstanding ~~change~~balance on the revolving loan facility is $961 and ~~such~~the ~~change~~Company ~~may require~~had usavailable tounder ~~change~~its revolving ~~our~~credit ~~operations~~facility $13,629. ~~Any~~We ofbelieve ~~these~~our ~~results~~cash ~~could~~on ~~adversely~~hand ~~affect~~and the ~~our~~revolving ~~results~~credit offacility ~~operations~~will ~~and~~be ~~stockholder~~sufficient ~~value~~to bymeet ~~increasing~~our ~~expenses~~working ~~and~~capital needs ~~reducing~~for ~~revenues,~~the ~~thereby~~foreseeable ~~reducing profits~~future.

WeThe ~~face~~soil ~~risks~~and ~~related~~groundwater at our Portland, Oregon facility contains certain contaminants that may require us to incur substantial expense to investigate and remediate, which would adversely affect our ~~foreign~~profit margins, results of operations and stockholder value.

The Insoil ~~addition~~and togroundwater at our ~~operations~~Portland, inOregon facility contain certain contaminants. Some of this contamination has migrated offsite to neighboring properties and potentially to other properties. We have retained an environmental consulting firm to investigate the ~~United~~extent ~~States~~of the contamination and to determine what remediation will be required and the associated costs. In fiscal 2004, we ~~currently~~entered ~~operate~~the Oregon Department of Environmental Quality’s involuntary ~~China~~clean-up program and ~~India~~established a liability for this matter. WeAt September ~~also~~30, ~~have~~2012, athis ~~sales~~liability ~~presence~~totaled in$625. ~~other~~Our ~~countries~~overall ~~such~~costs asultimately ~~Japan~~may exceed our estimates, ~~Korea~~or ~~and~~we amay ~~number~~be offorced ~~countries~~to inincrease the ~~European~~amount ~~Union~~of our estimates, ~~and~~either weor ~~market~~both of which could adversely affect our financial ~~products~~condition, ~~and~~results ~~technologies~~of inoperations ~~those~~or ~~and~~cash ~~other~~flows. ~~international~~In ~~markets~~November 2011, ~~including~~the DEQ ~~both~~adjusted ~~industrialized~~its ~~and~~Risk ~~developing~~Based ~~countries~~Concentration (“RBC”) levels. ~~Our~~The ~~combined~~Company ~~international~~performed an ~~operations~~evaluation ~~are~~of ~~subject~~the toeffect ~~various~~of ~~risks~~the ~~common~~adjusted RBC levels and recorded a $225 reduction to ~~international~~its ~~activities,~~environmental ~~such~~liability during the first quarter of fiscal ~~as:~~2012.

~~our~~Complying ~~ability~~with the laws applicable to the ~~maintain~~United ~~good~~States ~~relations~~and ~~with~~foreign ~~our~~markets ~~overseas~~may ~~employees~~become ~~and~~more ~~distributors~~difficult and toexpensive in ~~collect~~the ~~amounts~~future, ~~owed~~which ~~from~~could adversely affect our ~~overseas~~results ~~customers;~~ of operations and stockholder value.

~~exposure~~ Our operations in the United States and foreign markets are subject to ~~currency~~the laws of ~~fluctuations;~~ such markets. Compliance with these laws may become more difficult and costly in the future. In addition, these laws may change and such change may require us to change our operations. Any of these results could adversely affect our results of operations and stockholder value by increasing expenses and reducing revenues, thereby reducing profits.

~~potential~~We ~~difficulties~~face inrisks ~~enforcing~~related ~~contractual~~to our foreign ~~obligations;~~operations.

10 In addition to our operations in the United States, we currently operate in China and India. We also have a sales presence in other countries such as Japan, Korea and a number of countries in the European Union, and we market our products and technologies in those and other international markets, including both industrialized and developing countries. Our combined international operations are subject to various risks common to international activities, such as:

~~complying with a wide variety of laws and regulations, including product certification, environmental, and import and export laws;~~10

• our ability to maintain good relations with our overseas employees and distributors and to collect amounts owed from our overseas customers; • exposure to currency fluctuations; • potential difficulties in enforcing contractual obligations; • complying with a wide variety of laws and regulations, including product certification, environmental, and import and export laws; • the challenges of operating in disparate geographies and cultures; • political and economic instability; and • restrictions on our ability to repatriate dividends from our subsidiaries, particularly from our Chinese subsidiary.

~~political~~Fluctuations ~~and~~in ~~economic~~the ~~instability;~~value of currencies could adversely affect our international sales, which would result in reduced revenues and stockholder value.

~~restrictions~~ We sell onproducts ~~our~~in ~~ability~~North toAmerica, ~~repatriate~~Europe, Mexico, China, Korea, India, South ~~dividends~~America, the Pacific Rim nations, Australia, and other member nations of the European Union and Asia. We also purchase components from suppliers in China, Mexico, India and Europe; we have manufacturing and sales operations in China and India; and we maintain a sales and technical center in Germany. For fiscal 2012, 2011 and 2010, foreign sales were approximately 41%, 45%, and 41% of net sales, respectively. Although currently a majority of our ~~subsidiaries~~sales and purchases are made in U.S. dollars, ~~particularly~~an ~~from~~increasing amount of our purchases and sales are made in Chinese RMB and Indian Rupees and we anticipate that over time more of ~~subsidiary~~our purchases of component parts and sales of our products will be denominated in foreign currencies. We do not presently engage in any hedging of foreign currency risk. In the future, our operations in the foreign markets will likely become subject to fluctuations in currency values between the U.S. dollar and the currency of the foreign markets. Our results of operations and stockholder value could be adversely affected if currency of any of the foreign markets increases in value relative to the U.S. dollar.

~~Fluctuations~~We conduct business in ~~the~~countries ~~value~~with ofa ~~currencies~~history ~~could~~of ~~adversely~~corruption ~~affect~~and ~~our~~transactions ~~international~~with ~~sales~~foreign governments, ~~which~~and ~~would~~doing ~~result in~~so ~~reduced~~increases ~~revenues~~the ~~and~~risks ~~stockholder~~associated ~~value~~with our international activities.

We ~~sell~~ ~~products~~are insubject ~~North~~to ~~America,~~the ~~Europe,~~Foreign ~~Mexico,~~Corrupt ~~China,~~Practices ~~Korea~~Act, ~~India,~~and ~~South~~other ~~America, the~~laws ~~Pacific~~that ~~Rim~~prohibit improper ~~nations,~~payments ~~Australia,~~or ~~and~~offers ~~other~~of ~~member~~payments ~~nations~~to offoreign ~~the~~governments ~~European~~and their ~~Union~~officials and ~~Asia.~~political Weparties ~~also~~for ~~purchase~~the ~~components~~purpose ~~from~~of ~~suppliers~~obtaining inor ~~China, Mexico,~~retaining ~~India~~business. ~~and~~We ~~Europe; we~~ have ~~manufacturing~~operations and ~~sales~~agreements ~~operations~~with inthird ~~China~~parties ~~and~~in ~~India;~~countries ~~and~~known weto ~~maintain~~experience acorruption. ~~sales~~Our ~~and~~activities ~~technical center~~ in ~~Germany.~~these ~~For~~countries ~~fiscal~~create ~~2011, 2010~~the ~~and~~risk ~~2009,~~of ~~foreign~~unauthorized ~~sales~~payments ~~were~~or ~~approximately~~offers ~~45%, 41%, and 37%~~ of ~~net~~payments ~~sales, respectively.~~by ~~Although~~one ~~currently a majority~~ of our ~~sales~~employees ~~and purchases are made~~or inconsultants ~~U.S.~~that ~~dollars,~~could anbe ~~increasing~~in ~~amount~~violation of ~~our~~various ~~purchases~~laws ~~and~~including ~~sales~~the ~~are made in~~Foreign ~~Chinese~~Corrupt ~~RMB~~Practices ~~and~~Act, ~~Indian~~even ~~Rupees~~though ~~and~~these weparties ~~anticipate~~are ~~that~~not ~~over~~always ~~time~~subject ~~more~~to of our ~~purchases~~control. ofIt ~~component~~is ~~parts~~our ~~and~~policy ~~sales~~to ofimplement ~~our~~safeguards ~~products~~to ~~will~~discourage bethese ~~denominated in~~practices ~~foreign~~by ~~currencies~~employees. WeHowever, doour ~~not~~existing ~~presently~~safeguards ~~engage~~and in any ~~hedging~~future ofimprovements ~~foreign~~may ~~currency~~prove ~~risk.~~to Inbe ~~the~~less ~~future~~than effective, and our ~~operations~~employees inor ~~the~~consultants ~~foreign~~may ~~markets~~engage ~~will likely~~in ~~become~~conduct ~~subject~~for towhich ~~fluctuations~~we inmight ~~currency~~be ~~values~~held ~~between~~responsible. ~~the~~Violations ~~U.S.~~of ~~dollar~~the ~~and~~Foreign ~~the~~Corrupt ~~currency~~Practices ofAct ~~the~~may ~~foreign~~result ~~markets.~~in ~~Our~~criminal ~~results~~or ofcivil ~~operations~~sanctions, and ~~stockholder value~~we ~~could~~may be subject ~~adversely~~to ~~affected~~other ifliabilities, ~~currency~~which ofcould ~~any~~negatively ofaffect ~~the~~our ~~foreign markets~~business, ~~increases~~results inof ~~value~~operations ~~relative~~and tofinancial ~~the U~~condition.S. ~~dollar.~~

Political and economic instability in the foreign markets may make doing business there more difficult and costly, ~~which~~ which could adversely affect our results of operations and stockholder value.

Economic and political instability may increase in the future in foreign markets. Such instability may make it more difficult to do business in those countries, may make it more expensive to operate and could disrupt supplies of components into our Portland, Suzhou, or Pune facilities. If our operations were nationalized by the governments of China or India, this could cause us to write off the value of our operations in such foreign markets and eliminate revenues generated by such operations. Any of these results could result in onetime charges or increased expenses as well as lower revenues, which would adversely affect our results of operations and harm stockholder value.

~~ITEM 1B. UNRESOLVED STAFF COMMENTS~~11

~~None~~ITEM 1B. UNRESOLVED STAFF COMMENTS

~~ITEM 2. PROPERTIES~~ None

WeITEM ~~own a 120,000 square foot manufacturing facility and office building in Portland, Oregon~~2. WePROPERTIES believe the Portland facility is adequate for our existing needs and the needs for the foreseeable future. This manufacturing facility is equipped with the machinery and equipment necessary to manufacture and assemble our products. We believe that this facility has been maintained adequately.

We own ~~lease~~a ~~approximately 63~~120,000 square ~~feet~~ infoot ~~Suzhou, China for~~ manufacturing facility and office ~~space~~building ~~and approximately 500~~in ~~square~~Portland, ~~feet~~Oregon. ~~for~~We ~~our~~believe ~~Shanghai,~~the ~~China~~Portland ~~sales~~facility ~~office.~~is Weadequate ~~also~~for ~~lease~~our ~~approximately~~existing ~~15,000~~needs ~~square~~and ~~feet~~the ofneeds ~~manufacturing~~for ~~and~~the ~~office~~foreseeable ~~space~~future. inThis ~~Pune,~~manufacturing ~~India,~~facility ~~as well as~~is ~~approximately~~equipped ~~1,400~~with ~~square~~the ~~feet~~machinery inand ~~Munich,~~equipment ~~Germany~~necessary ~~for~~to ~~our~~manufacture ~~Williams~~and ~~Controls~~assemble ~~Europe~~our ~~sales operation~~products. We believe that ~~these~~this ~~facilities~~facility ~~will~~has bebeen ~~adequate~~maintained ~~to meet our existing needs and our needs for the foreseeable future~~adequately.

11 We lease approximately 63,000 square feet in Suzhou, China for manufacturing and office space and approximately 500 square feet for our Shanghai, China sales office. We also lease approximately 15,000 square feet of manufacturing and office space in Pune, India, as well as approximately 1,400 square feet in Munich, Germany for our Williams Controls Europe sales operation. We believe that these facilities will be adequate to meet our existing needs and our needs for the foreseeable future.

ITEM 3. LEGAL PROCEEDINGS

The Company and its subsidiaries are parties to various pending judicial and administrative proceedings arising in the ordinary course of business. The Company’s management and legal counsel have reviewed the probable outcome of such proceedings, the costs and expenses reasonably expected to be incurred, the availability and limits of the Company’s insurance coverage, and the Company’s established liabilities. While the outcome of the pending proceedings cannot be predicted with certainty, based on its review, the Company believes that any unrecorded liability that may result is not more than likely to have a material effect on the Company’s liquidity, financial condition or results of operations.

InITEM ~~2004, the Company, together with Ford Motor Company, was named as a co-defendant in a product liability case (Cuesta v~~4. ~~Ford,~~MINE etSAFETY ~~al),~~DISCLOSURES brought in the Oklahoma State District Court located in Bryant, Oklahoma. The complaint sought unspecified damages as well as class action status. During the second quarter of fiscal 2010 the Company, together with Ford, entered into a class settlement agreement and recorded a $775 expense for the full settlement and release of all claims. The $775 was paid in the fourth quarter of fiscal 2010 and the claim has been fully dismissed.

~~ITEM~~ Not 4applicable. ~~SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS~~

~~No matters were submitted to a vote of security holders during the fourth quarter of fiscal 2011.~~12

12PART II

~~PART~~ITEM II5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

~~ITEM~~Market 5.Prices ~~MARKET~~of ~~FOR~~Common ~~REGISTRANT’S~~Stock ~~COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES~~

Effective December 7, 2011, our common stock is traded on the NYSE Amex under the symbol “WMCO.” Prior to that time, our common stock was traded on the NASDAQ Global Market under ~~Prices~~the same symbol. The following table sets forth the high and low closing prices of ~~Common~~our common stock for each fiscal quarter for the past two fiscal ~~Stock~~years:

Effective December 7, 2011, our common stock is traded on the NYSE Amex under the symbol “WMCO.” Prior to that time, our common stock was traded on the NASDAQ Global Market under the same symbol. The following table sets forth the high and low closing prices of our common stock for each fiscal quarter for the past two fiscal years as reported on the NASDAQ Global Market:


	2012				2011
	High		Low		High		Low
First Quarter	$	11.25	$	10.70	$	11.62	$	9.10
Second Quarter	$	11.35	$	10.89	$	11.63	$	10.26
Third Quarter	$	12.10	$	10.90	$	12.49	$	11.06
Fourth Quarter	$	12.70	$	10.53	$	11.50	$	10.01

	2011				2010
	High		Low		High		Low
First Quarter	$	11.62	$	9.10	$	8.73	$	7.74
Second Quarter	$	11.63	$	10.26	$	8.12	$	7.15
Third Quarter	$	12.49	$	11.06	$	9.76	$	8.20
Fourth Quarter	$	11.50	$	10.01	$	10.47	$	7.51

Dividend Policy

~~Dividend~~ There ~~Policy~~were 229 record holders of our common stock as of December 1, 2012. In February 2011, we announced initiation of a quarterly dividend policy and during fiscal 2012 we paid four $0.12 per share quarterly cash dividends under this new policy. During fiscal 2011, we paid two quarterly cash dividends of $0.12 per share. Our payment of cash dividends is at the exclusive discretion of the Board of Directors and will depend upon our earnings levels, capital requirements, any restrictive loan covenants and other factors the Board considers relevant.

~~There~~Performance ~~were 224~~Graph record holders of our common stock as of December 1, 2011. In February 2011, we announced initiation of a quarterly dividend policy and during fiscal 2011 we paid two $0.12 per share quarterly cash dividends under this new policy. During fiscal 2010, we paid a cash dividend $1.00 per share. Our payment of cash dividends is at the exclusive discretion of the Board of Directors and will depend upon our earnings levels, capital requirements, any restrictive loan covenants and other factors the Board considers relevant.

~~Performance~~ The ~~Graph~~graph below compares the cumulative total stockholder return of our common stock with the cumulative total return of the NASDAQ Composite Index and a peer group of companies primarily traded on the NASDAQ Stock Market in the Standard Industry Classification Code 3714 (motor vehicle parts and accessories) (the “Peer Group”). The graph shows the value for the period beginning October 1, 2007 and ending September 30, 2012. The graph assumes that $100 was invested on September 30, 2007.

(LINE GRAPH)

The graph below compares the cumulative total stockholder return of our common stock with the cumulative total return of the NASDAQ Composite Index and a peer group of companies primarily traded on the NASDAQ Stock Market in the Standard Industry Classification Code 3714 (motor vehicle parts and accessories) (the “Peer Group”). The graph shows the value for the period beginning October 1, 2006 and ending September 30, 2011. The graph assumes that $100 was invested on September 30, 2006.13

Total Return Analysis 9/30/06 9/30/07 9/30/08 9/30/09 9/30/10 9/30/11 Williams Controls, Inc. $ 100.00 $ 142.23 $ 101.66 $ 70.88 $ 79.68 $ 97.32 NASDAQ Composite $ 100.00 $ 121.84 $ 92.48 $ 96.08 $ 108.39 $ 110.99 Peer Group $ 100.00 $ 154.70 $ 104.73 $ 103.45 $ 136.27 $ 112.73


Total Return Analysis
	9/30/07		9/30/08		9/30/09		9/30/10		9/30/11		9/30/12
Williams Controls, Inc.	$	100.00	$	71.48	$	49.83	$	56.02	$	68.42	$	68.98
NASDAQ Composite	$	100.00	$	69.59	$	74.97	$	85.07	$	86.96	$	110.86
Peer Group	$	100.00	$	66.26	$	66.31	$	95.20	$	82.74	$	98.95

13ITEM 6. SELECTED FINANCIAL DATA (Dollars in thousands - except per share amounts)

ITEM 6. SELECTED FINANCIAL DATA (Dollars in thousands - except per share amounts)


Consolidated Statement of Operations Data:	Year ended September 30
	2012		2011		2010		2009			2008
Net sales	$	64,372	$	61,859	$	52,266	$	38,809		$	65,781
Net income (loss)		3,364		3,334		1,377		(2,009	)		7,830
Net income (loss) per common share – basic		0.45		0.46		0.19		(0.27	)		1.04
Net income (loss) per common share – diluted		0.44		0.45		0.19		(0.27	)		1.01
Cash dividends per common share		0.48		0.24		1.00		—			—

Consolidated Balance Sheet Data:	September 30
	2012		2011		2010		2009			2008
Current assets	$	24,219	$	25,577	$	21,249	$	24,104		$	28,694
Current liabilities		10,634		12,911		10,503		7,707			9,447
Working capital		13,585		12,666		10,746		16,397			19,247
Total assets		36,418		38,541		34,205		36,384			39,762
Long-term liabilities		9,113		8,195		8,938		8,587			4,667
Stockholders’ equity		16,671		17,435		14,764		20,090			25,648

Consolidated Statement of Operations Data:	Year ended September 30
	2011		2010		2009			2008		2007
Net sales	$	61,859	$	52,266	$	38,809		$	65,781	$	68,924
Net income (loss)		3,334		1,377		(2,009	)		7,830		7,937
Net income (loss) per common share – basic		0.46		0.19		(0.27	)		1.04		1.06
Net income (loss) per common share – diluted		0.45		0.19		(0.27	)		1.01		1.03
Cash dividends per common share		0.24		1.00		-			-		-
Consolidated Balance Sheet Data:	September 30
	2011		2010		2009			2008		2007
Current Assets	$	25,577	$	21,249	$	24,104		$	28,694	$	21,041
Current Liabilities		12,911		10,503		7,707			9,447		9,857
Working Capital		12,666		10,746		16,397			19,247		11,184
Total Assets		38,541		34,205		36,384			39,762		32,078
Long-Term Liabilities		8,195		8,938		8,587			4,667		5,052
Stockholders’ Equity		17,435		14,764		20,090			25,648		17,169


ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~ITEM~~ 7.(Dollars ~~MANAGEMENT’S~~in thousands ~~DISCUSSION~~– ~~AND~~except ~~ANALYSIS~~share OFand ~~FINANCIAL~~per ~~CONDITION~~share ~~AND~~amounts) ~~RESULTS OF OPERATIONS~~

~~(Dollars~~ This section summarizes the significant factors affecting our consolidated results of operations, financial condition and liquidity position for each year comprising the three year period ended September 30, 2012. This section should be read in ~~thousands~~conjunction –with ~~except~~our ~~share~~consolidated financial statements and related notes appearing elsewhere in this document, and ~~per~~readers should note that dollar figures in this section, other than per-share ~~amounts)~~data, are presented in thousands. Statements in this report that relate to future results and events are based on our current expectations. Actual results in future periods may differ materially from those currently expected or desired because of a number of risks and uncertainties. For a discussion of factors affecting our business, see “ITEM 1 – BUSINESS” in this Annual Report on Form 10-K. Further, this section includes forward-looking statements which should be read in conjunction with the section entitled “Item 1A – Risk Factors.”

~~This~~Overview section summarizes the significant factors affecting our consolidated results of operations, financial condition and liquidity position for each year comprising the three year period ended September 30, 2011. This section should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this document, and readers should note that dollar figures in this section, other than per-share data, are presented in thousands. Statements in this report that relate to future results and events are based on our current expectations. Actual results in future periods may differ materially from those currently expected or desired because of a number of risks and uncertainties. For a discussion of factors affecting our business, see “ITEM 1 – BUSINESS” in this Annual Report on Form 10-K. Further, this section includes forward-looking statements which should be read in conjunction with the section entitled “Item 1A – Risk Factors.”

~~Overview~~ Net sales increased to $64,372 in fiscal 2012, up 4% or $2,513, over fiscal 2011. While we continue to closely monitor all of our costs, we remain committed to spending on new product development and technology for existing and new customers. Although no assurances can be given, management believes that it is likely that our $1,750 in cash on hand plus available borrowing of $13,629 under our revolving loan facility will be adequate to sustain the Company during its next fiscal year.

~~Net~~ As we ~~sales~~move ~~increased~~forward tointo ~~$61,859 in~~ fiscal ~~2011,~~2012 upand ~~18% or $9~~beyond,~~593,~~ ~~over~~we ~~fiscal~~will ~~2010.~~continue ~~Worldwide~~to ~~sales~~work ~~of heavy trucks~~closely ~~and~~with ~~off-road~~our ~~equipment~~existing ~~generally~~and ~~increased~~potential incustomers ~~fiscal~~to ~~2011~~design ~~over fiscal 2010~~ and ~~were~~ ~~significantly~~develop ~~above the low point in fiscal 2009. In addition,~~ new products and ~~programs~~adapt ~~added~~existing ~~sales~~products ~~of approximately $3,000 in fiscal 2011. While we continue~~ to ~~closely~~new ~~monitor all of our costs~~applications, weand ~~remain committed~~ to ~~spending~~improve onthe ~~new~~performance, ~~product~~reliability ~~development~~ and ~~technology~~cost-effectiveness ~~for existing and new customers. Although no assurances can be given, management believes that it is likely that our $1,339 in cash on hand plus available borrowing~~ of ~~$5,540 under~~ our ~~revolving loan facility will be adequate to sustain the Company into its next fiscal year~~products.

As we move forward into fiscal 2011 and beyond, we will continue to work closely with our existing and potential customers to design and develop new products and adapt existing products to new applications, and to improve the performance, reliability and cost-effectiveness of our products.14

14Results of Operations

Results of Operations


	Financial Summary (Dollars in Thousands)

	2012			2011			2010			2011 to 2012			2010 to 2011
Net sales	$	64,372		$	61,859		$	52,266			4.1	%		18.4	%
Cost of sales		45,171			42,549			37,446			6.2	%		13.6	%

Gross profit		19,201			19,310			14,820			(0.6	)%		30.3	%

Research and development		4,527			4,835			4,505			(6.4	)%		7.3	%
Selling		3,036			2,855			2,836			6.3	%		0.7	%
Administration		5,821			6,560			5,480			(11.3	)%		19.7	%
Class action settlement		—			—			775			NM			NM

Operating income	$	5,817		$	5,060		$	1,224

As a percentage of net sales:
Cost of sales		70.2	%		68.8	%		71.6	%
Gross margin		29.8	%		31.2	%		28.4	%
Research and development		7.0	%		7.8	%		8.6	%
Selling		4.7	%		4.6	%		5.4	%
Administration		9.0	%		10.6	%		10.5	%
Class action settlement		—			—			1.5	%
Operating income		9.0	%		8.2	%		2.3	%

NM – not meaningful

										Percent Change
For the Year Ended September 30:	2012			2011			2010			2011 to 2012			2010 to 2011
Net sales	$	64,372		$	61,859		$	52,266			4.1	%		18.4	%

~~Financial~~ Net sales ~~Summary(Dollars~~increased $2,513 for fiscal 2012 as compared to fiscal 2011. The overall increase in sales in fiscal 2012 primarily results from increases in NAFTA ~~Thousands)~~heavy truck sales and off-road sales in NAFTA and Europe. These increases reflect an improving economic climate in fiscal 2012 as compared to fiscal 2011.

								2010 to		2009 to
	2011		2010		2009			2011		2010
Net sales	$	61,859	$	52,266	$	38,809		18.4	%	34.7	%
Cost of sales		42,638		37,446		30,173		13.9	%	24.1	%
Gross profit		19,221		14,820		8,636		29.7	%	71.6	%
Research and development		4,746		4,505		3,981		5.3	%	13.2	%
Selling		2,855		2,836		2,425		0.7	%	16.9	%
Administration		6,560		5,480		5,522		19.7	%	(0.8	%)
Class action settlement		-		775		-		NM		NM
Operating income (loss)	$	5,060	$	1,224	$	(3,292	)
As a percentage of net sales:
Cost of sales		68.9%		71.6%		77.7%
Gross margin		31.1%		28.4%		22.3%
Research and development		7.7%		8.6%		10.3%
Selling		4.6%		5.4%		6.2%
Administration		10.6%		10.5%		14.2%
Class action settlement		-		1.5%		-
Operating income (loss)		8.2%		2.3%		(8.5%	)

Net sales to NAFTA truck customers increased 23% when compared to fiscal 2011, primarily due to general improvements in the economic environment and freight hauling industry. NAFTA truck sales volumes were up throughout most of the fiscal year, but declined 10% in the fourth quarter when compared to fiscal 2011. European truck sales decreased 14% in fiscal 2012 over fiscal 2011. This decrease was primarily due to continuing economic uncertainties affecting Europe as well as to a lesser degree timing of shipments to one European customer in the first quarter of fiscal 2012. Sales to Asian customers declined 7% from the prior year, primarily due to decreases in sales to Chinese off-road customers and Korean truck customers; however, on a smaller base, sales to Indian customers were up 40% over sales in fiscal 2011. Worldwide off-road sales, which were up 13% for the fiscal year ended September 30, 2012, were the highest in the Company’s history and comprised approximately 25% of the Company’s total sales for the year.

NM We expect –that ~~not~~electronic ~~meaningful~~throttle control sales generally will continue to vary directly with future changes in the overall economy and the demand for heavy trucks, transit buses and off-road vehicles in particular. These variations are largely dependent upon, and are expected to vary directly with, production volumes in the various geographic markets in which we serve. Additionally, competitive pricing may reduce margins and gross sales.

~~Comparative~~ Net sales ~~Years~~increased ~~Ended~~$9,593 ~~September~~for fiscal 2011 as compared to fiscal 2010. The overall increase in sales in fiscal 2011 results from a combination of volume increases in essentially all of our principal geographic markets for existing programs and sales of approximately $3,000 for new product and program introductions. In fiscal 2011, we saw significant increases in heavy truck sales across all major markets. In addition, world-wide off-road sales were up 13% for the fiscal year ended September 30, 2011, ~~2010~~and were the highest in the Company’s history and ~~2009~~comprised approximately 24% of the Company’s total sales for the year.

							Percent Change
							2010 to		2009 to
For the Year Ended September 30:	2011		2010		2009		2011		2010
Net sales	$	61,859	$	52,266	$	38,809	18.4	%	34.7	%

Net sales increased $9,593 for fiscal 2011 as compared to fiscal 2010. The overall increase in sales in fiscal 2011 results from a combination of volume increases in essentially all of our principal geographic markets for existing programs and sales of approximately $3,000 for new product and program introductions. These increases reflect the worldwide improvement in the economic climate in fiscal 2011.


							Percent Change
For the Year Ended September 30:	2012		2011		2010		2011 to 2012			2010 to 2011
Cost of sales	$	45,171	$	42,549	$	37,446		6.2	%		13.6	%
Gross profit	$	19,201	$	19,310	$	14,820		(0.6	)%		30.3	%

~~Net~~ Cost of sales toincludes ~~NAFTA~~raw ~~truck customers increased 36% when compared to fiscal 2010~~materials, ~~primarily due to general improvements in the economic environment and~~ freight ~~hauling industry. Various industry forecasts indicate that truck sales volumes in the NAFTA market may continue to increase due to the continued economic recovery~~ and ~~the~~duties, ~~overall advanced age of the NAFTA truck fleet. However~~warranty, ~~this~~wages ~~is dependent on a number of~~and ~~factors~~benefits, ~~including~~depreciation ~~the overall strength of the U.S. economy. European truck sales increased 59% in fiscal 2011 over fiscal 2010. This increase was primarily due to increases in heavy truck~~ and ~~off-road build rates by our European customers. In addition~~amortization, ~~our~~production European sales were relatively low during much of fiscal 2010 as these customers were working through higher than normal inventory levels created when the worldwide economy declined in 2009. Asian truck sales increased 19%utilities, ~~and~~shipping ~~sales to Asian off-road customers increased 31% when compared~~and toproduction ~~fiscal 2010. The increase in Asian off-road sales is primarily due to off-road sales in China~~supplies, ~~where~~repairs ~~the~~and ~~adoption of more stringent emission standards has mandated the inclusion of electronic throttle controls on new vehicles~~maintenance, ~~thus allowing~~production usfacility ~~to expand our customer base in this market. Worldwide off-road~~property ~~sales~~insurance, ~~which were up 13% for the fiscal year ended September 30, 2011, were the highest in the Company’s history~~ and ~~comprised~~other ~~approximately~~production ~~24% of the Company’s total sales for the year~~overhead.

We As a ~~expect~~percent ~~that~~of ~~electronic~~sales, ~~throttle control~~cost of sales ~~generally~~increased ~~will~~in ~~continue~~fiscal 2012 as compared to ~~vary~~2011. As ~~directly~~anticipated, ~~with~~material ~~future~~costs ~~changes~~were higher in fiscal 2012 due to several components increasing pricing over the ~~overall~~prior ~~economy~~year, including die cast components and ~~the~~rare ~~demand~~earth ~~for~~magnets. ~~heavy~~As ~~trucks~~a percent of sales, ~~transit~~cost ~~buses~~of ~~and~~sales ~~off-road~~were ~~vehicles~~higher in ~~particular.~~India ~~These~~than ~~variations~~any ~~are~~of ~~largely~~the ~~dependent~~Company’s ~~upon,~~other ~~and~~regions ~~are~~as that operation ~~expected~~continues toin ~~vary~~its ~~directly~~start-up ~~with~~phase, ~~production~~which ~~volumes~~negatively inimpacted ~~the~~margins. ~~various~~We ~~geographic~~are ~~markets~~moving aggressively toward our planned localization of the supply base in India, which we ~~serve~~believe will improve the operating performance in that region within the next three to six months. Additionally, ~~competitive~~freight and duties were up between periods generally in line with sales volume increases. Slightly offsetting these increases in component pricing ~~may~~were ~~reduce~~reductions ~~margins~~in warranty costs and ~~gross~~scrap costs between fiscal 2012 and 2011. Manufacturing overhead costs were lower as a percentage of sales between periods, but were up in actual dollar value.

15 As a percent of sales, cost of sales decreased in fiscal 2011 as compared to fiscal 2010, primarily due to higher sales volumes to distribute fixed overhead costs. Although sales volumes increased, freight and duty costs decreased slightly between periods as fiscal 2010 included excess air freight charges due to some of our suppliers having difficulty meeting delivery schedules. Purchase component costs were largely unchanged for the first half of the year; however, as the fiscal year progressed several components increased in price, including die cast components and rare earth magnets. Warranty costs decreased $679 between fiscal 2011 and 2010, as fiscal 2010 included unusually high warranty costs related to warranty claims with one customer. As sales volumes continue to improve and new products are introduced, we selectively added to our manufacturing support staff to accommodate the higher volumes resulting in overhead wage and benefit expenses increasing $435 in fiscal 2011 as compared to fiscal 2010. Health care costs for employees increased $119 during fiscal 2011 primarily due to increased health care rates and to a lesser extent the addition of manufacturing support staff during fiscal 2011. In addition, fiscal 2011 included costs associated with our India manufacturing facility for a full year as this facility was opened during the third quarter of fiscal 2010.

~~Net sales~~ Gross ~~increased~~profit was $1319,~~457~~201, ~~for~~or ~~fiscal 2010 as compared to fiscal 2009~~29.8% ~~The~~of ~~overall increase~~net in sales infor fiscal ~~2010~~2012, ~~results~~a ~~from~~decrease ~~volume increases in essentially all~~ of ~~our principal geographic markets. In fiscal 2009, we saw significant~~$109 ~~reductions~~from in the ~~number~~gross ofprofit ~~units~~ of ~~trucks~~$19,310, ~~buses~~or ~~and~~31.2% ~~off-road~~of ~~vehicles~~net ~~built worldwide~~sales ~~due to the significant recessionary pressures~~ in the ~~United~~comparable fiscal ~~States~~2011 ~~and worldwide~~period. ~~Essentially~~The ~~all~~decrease ofin ~~our~~gross ~~large~~profit ~~truck~~in ~~OEM~~fiscal ~~customers~~2012 ~~had~~was ~~reductions in~~primarily ~~build~~driven ~~rates~~by ~~and~~increases ~~took~~in ~~extensive~~component ~~downtime~~costs inthroughout ~~2009.~~the Asyear ~~the~~and ~~economic~~to ~~climate~~a ~~has~~lesser ~~improved~~extent ~~worldwide~~increases in ~~fiscal~~direct ~~2010~~labor and ~~our~~manufacturing ~~truck~~overhead ~~OEM~~costs ~~customers have increased build rates, the result has been an overall increase~~ in ~~sales volumes in all our~~dollar ~~markets~~value.

							Percent Change
							2010 to		2009 to
For the Year Ended September 30:	2011		2010		2009		2011		2010
Cost of sales	$	42,638	$	37,446	$	30,173	13.9	%	24.1	%

Gross profit was $19,310, or 31.2% of net sales for fiscal 2011, an increase of $4,490 from the gross profit of $14,820, or 28.4% of net sales in the comparable fiscal 2010 period. The increase in gross profit in fiscal 2011 was primarily driven by the 18% net increase in sales of electronic throttle control systems to our heavy truck, bus and off-road customers. Manufacturing overhead costs were slightly lower as a percent of sales in fiscal 2011 than in fiscal 2010 but increased on a dollar for dollar basis.

Cost of sales includes raw materials, freight and duties, warranty, wages and benefits, depreciation and amortization, production utilities, shipping and production supplies, repairs and maintenance, production facility property insurance, and other production overhead.


							Percent Change
For the Year Ended September 30:	2012		2011		2010		2011 to 2012			2010 to 2011
Research and development	$	4,527	$	4,835	$	4,505		(6.4	)%		7.3	%

As Research and adevelopment ~~percent~~expenses ~~of sales, cost of sales~~ decreased $308 in fiscal ~~2011~~2012 aswhen compared to fiscal ~~2010, primarily due to higher~~ ~~sales volumes to distribute fixed overhead costs~~2011. ~~Although~~The ~~sales~~Company’s ~~volumes increased,~~research ~~freight~~ and ~~duty~~development ~~costs~~expenditures ~~decreased~~generally ~~slightly between periods as fiscal~~will ~~2010~~fluctuate ~~included~~based ~~excess~~on ~~air freight charges due to some of our suppliers having difficulty meeting delivery schedules. Purchase component costs were largely unchanged for~~ the ~~first~~products ~~half~~under ofdevelopment ~~the~~at ~~year;~~any ~~however,~~given aspoint ~~the fiscal year progressed several components increased~~ in ~~price~~time, ~~including die cast components and rare~~ ~~earth magnets. We have programs~~ and ~~processes to manage component costs, however it is likely~~ that ~~component~~fluctuation ~~pricing~~often ~~for~~does ~~several~~not ~~components~~coincide ~~will be higher in fiscal 2012 as compared to fiscal 2011. Warranty costs decreased $679 between fiscal 2011 and 2010, as fiscal 2010 included unusually high warranty costs related to warranty claims~~ with ~~one~~sales ~~customer~~cycles. AsThe ~~sales~~decrease ~~volumes continue to improve and new products are introduced, we have selectively added to our manufacturing support staff to accommodate the higher volumes resulting~~ in ~~overhead~~research ~~wage~~ and ~~benefit~~development expenses ~~increasing $435~~ in fiscal ~~2011~~2012 asis ~~compared to fiscal 2010. Health care costs for employees increased $119 during fiscal 2011~~ primarily due to ~~increased health care rates and to a lesser extent the addition~~reductions ofin ~~manufacturing~~project ~~support~~development ~~staff~~expenses, ~~during~~stock ~~fiscal~~option ~~2011. In addition~~expense, ~~fiscal~~travel ~~2011 included~~ costs ~~associated with our India manufacturing facility for a full year~~and asdepreciation ~~this facility was opened during the third quarter of fiscal 2010~~expenses.

Cost of sales decreased as a percent of sales in fiscal 2010 when compared to fiscal 2009, primarily due to higher sales volumes to distribute fixed overhead costs. Additionally, fiscal 2009 included settlement of outstanding labor issues and severance costs totaling $320 and a $116 write-down to our capitalized license fee related to adjustable pedal technology due to the significant decline in business in the recreational vehicle industry. Repairs and maintenance costs and pension/postretirement medical costs decreased $121 and $115, respectively, in fiscal 2010 from the comparable period in fiscal 2009. Slightly offsetting some of these decreases was an increase in warranty costs of $399 in fiscal 2010 when compared to fiscal 2009 and primarily relates to warranty claims with one customer. In addition, freight and duty costs increased $719 in fiscal 2010 when compared to fiscal 2009.16

							Percent Change
							2010 to		2009 to
For the Year Ended September 30:	2011		2010		2009		2011		2010
Gross profit	$	19,221	$	14,820	$	8,636	29.7	%	71.6	%

Research and development expenses increased $330 in fiscal 2011 when compared to fiscal 2010. The increase is primarily due to increases in headcount and samples expenses related to new project development, including next generation sensors, joysticks and light commercial vehicle pedals.

Gross profit was $19,221, or 31.1% of net sales for fiscal 2011, an increase of $4,401 from the gross profit of $14,820, or 28.4% of net sales in the comparable fiscal 2010 period.


							Percent Change
For the Year Ended September 30:	2012		2011		2010		2011 to 2012			2010 to 2011
Selling	$	3,036	$	2,855	$	2,836		6.3	%		0.7	%

~~The~~ Selling expenses ~~increase~~increased in$181 ~~gross~~between ~~profit in~~ fiscal ~~2011~~2012 ~~was~~and ~~primarily~~fiscal ~~driven~~2011 bymainly ~~the~~due ~~18% net increase in sales of electronic~~to ~~throttle~~additions ~~control systems~~ to our ~~heavy~~European ~~truck,~~sales ~~bus~~team ~~and~~in ~~off-road~~late ~~customers. Manufacturing~~fiscal ~~overhead~~2011 ~~costs~~that were ~~slightly~~not ~~lower as a percent of sales~~ in ~~fiscal~~place ~~2011~~during ~~than~~most inof fiscal ~~2010 but increased on a dollar for dollar basis~~2011, ~~primarily due~~offset toslightly ~~the~~by ~~factors~~reductions ~~described~~in ~~above under “Cost of~~ sales” commission expense.

16 Selling expenses remained relatively flat between fiscal 2011 and fiscal 2010. Although wage related expenses and travel expenses in our European sales office temporarily decreased in fiscal 2011 as compared to fiscal 2010, these reductions were offset by increases in sales commissions during fiscal 2011 due to higher sales volumes in Russia and India and increases in wage related expenses in our other sales offices.

Gross profit was $14,820, or 28.4% of net sales for fiscal 2010, an increase of $6,184 from the gross profit of $8,636, or 22.3% of net sales in the comparable fiscal 2009 period.


							Percent Change
For the Year Ended September 30:	2012		2011		2010		2011 to 2012			2010 to 2011
Administration	$	5,821	$	6,560	$	5,480		(11.3	)%		19.7	%

~~The~~ Administration expenses ~~increase~~for infiscal ~~gross~~2012 ~~profit~~decreased in$739 when compared to fiscal 2011. Both years include strategic transaction costs. Fiscal 2012 expenses include approximately $378 of transaction costs related to the merger agreement reached with Curtiss Wright Corporation subsequent to year end. In fiscal ~~2010~~2011, administration ~~was~~expenses ~~primarily~~included ~~driven~~$349 byrelated to a potential acquisition that the ~~35%~~Company ~~net~~considered ~~increase~~but ultimately decided to terminate during due diligence. Included in ~~sales~~administration ofexpenses ~~electronic~~in fiscal 2012 was a reduction ~~throttle~~of ~~control~~$225 ~~systems~~related to our ~~heavy~~environmental ~~truck~~liability. In November 2011, ~~bus~~the State of Oregon Department of Environmental Quality adjusted its Risk Based Concentration (“RBC”) levels and ~~off~~based on the revised RBC levels, we performed an evaluation of the effect on our environmental clean-~~road~~up ~~customers~~project, which resulted in the reduction of our liability. For further information regarding ~~Manufacturing~~our ~~overhead~~environmental ~~costs~~liability, ~~were~~refer 8%to ~~lower~~Note as10 ato ~~percent~~Consolidated ofFinancial ~~sales~~Statements. Included in fiscal ~~2010 than~~2011 administration expense was $228 in ~~fiscal~~legal ~~2009~~fees associated with settlement of an old outstanding claim against the Company by a former employee. In addition, ~~primarily~~information ~~due~~technology maintenance costs and employee recruitment expenses decreased during fiscal 2012 when compared to fiscal ~~the~~2011, ~~factors~~however, ~~described~~these ~~above~~reductions ~~under~~were ~~“Cost~~partially ofoffset by increases in ~~sales”~~taxes and filing fees in China related to new government construction and education taxes.

							Percent Change
							2010 to		2009 to
For the Year Ended September 30:	2011		2010		2009		2011		2010
Research and development	$	4,746	$	4,505	$	3,981	5.3	%	13.2	%

Administration expenses for fiscal 2011 increased $1,080 when compared to fiscal 2010. In fiscal 2011, administration expenses included $349 related to a potential acquisition that the Company considered but ultimately decided to terminate during due diligence. We also incurred a full year of costs associated with our India facility, which was opened during the third quarter of fiscal 2010. As sales volumes improved during fiscal 2011, we filled positions left vacant during the economic downturn experienced in late 2009 through 2010, which resulted in a $268 increase in administration wage expenses in fiscal 2011 as compared to fiscal 2010. Administration expenses in fiscal 2011 also included $228 in legal fees associated with settlement of an old outstanding claim against the Company by a former employee, an increase of $123 over fiscal 2010. Fiscal 2010 included legal fees of $421 associated with the Cuesta class action lawsuit, which was settled in the fourth quarter of fiscal 2010. Other increases in administration expenses in fiscal 2011 as compared to fiscal 2010 include: a $115 increase in taxes and filing fees in China related to new government construction and education taxes, an $84 increase in information technology maintenance costs and a reduction of $111 in fiscal 2010 related to our environmental liability accrual.

Research and development expenses increased $241 in fiscal 2011 when compared to fiscal 2010. The increase is primarily due to increases in headcount and samples expenses related to new project development, including next generation sensors, joysticks and light commercial vehicle pedals. The Company’s research and development expenditures generally will fluctuate based on the products under development at any given point in time, and that fluctuation often does not coincide with sales cycles.

Percent Change

For the Year Ended September 30:

2012

2011

2010

2011 to
2012

2010 to
2011

Class action settlement

—

775

~~Research~~ During fiscal ~~and~~2010, ~~development~~the ~~expenses increased~~Company ~~$524~~entered ininto ~~fiscal~~a ~~2010~~settlement ~~when~~agreement ~~compared~~with tothe plaintiffs ~~fiscal~~in ~~2009.~~the ~~The~~Cuesta ~~increase~~class ~~is primarily~~action ~~due~~lawsuit toand ~~increased~~paid ~~resources,~~$775 ~~including~~for ~~additional~~complete ~~headcount, being~~and ~~committed~~final tosettlement ~~new~~of ~~project~~the ~~development~~action ~~for~~as ~~sensors,~~discussed ~~joysticks~~in ~~and~~Note ~~off-road~~10 ~~pedal~~to Consolidated ~~applications~~Financial Statements.

							Percent Change
							2010 to		2009 to
For the Year Ended September 30:	2011		2010		2009		2011		2010
Selling	$	2,855	$	2,836	$	2,425	0.7	%	16.9	%

Selling expenses remained relatively flat between fiscal 2011 and fiscal 2010. Although wage related expenses and travel expenses in our European sales office temporarily decreased in fiscal 2011 as compared to fiscal 2010, these reductions were offset by increases in sales commissions during fiscal 2011 due to higher sales volumes in Russia and India and increases in wage related expenses in our other sales offices. We anticipate selling expenses to increase in fiscal 2012 in line with additions to our European sales team.


								Percent Change
For the Year Ended September 30:	2012		2011		2010			2011 to 2012		2010 to 2011
Gain on sale of investments	$	—	$	—	$	(441	)		NM		NM

~~Selling~~ During the ~~expenses~~third ~~increased~~quarter ~~$411~~of in fiscal 2010, aswe ~~compared~~sold toour ~~fiscal~~short-term ~~2009~~investments ~~mainly due to an increase in travel~~and ~~expenses~~recorded ~~and~~a ~~sales~~$441 ~~commissions,~~gain ~~which~~related ~~tend~~ to ~~correlate~~the ~~with higher sales volumes~~sale.

								Percent Change
								2010 to		2009 to
For the Year Ended September 30:	2012		2011		2010			2011 to 2012		2010 to 2011
For the Year Ended September 30:	2011		2010		2009			2011		2010
Other (income) expense, net	$	89	$	211	$	(54	)		NM		NM
Administration	$	6,560	$	5,480	$	5,522		19.7	%	(0.8	%)

~~Administration expenses for fiscal~~ Other ~~2011~~expense ~~increased~~of $~~1,080~~89 ~~when~~in ~~compared to~~ fiscal ~~2010.~~2012 Inconsisted ~~fiscal~~primarily ~~2011, administration~~of ~~expenses~~foreign ~~included $349 related to a potential acquisition that~~currency ~~the~~transaction ~~Company considered but ultimately decided to terminate during due diligence~~losses. We ~~also~~Other ~~incurred~~expense ~~a full year~~ of costs associated with our India facility, which was opened during the third quarter of fiscal 2010. As sales volumes improved during fiscal 2011, we filled positions left vacant during the economic downturn experienced in late 2009 through 2010, which resulted in a $211 ~~268 increase~~ in ~~administration~~ ~~wage expenses in~~ fiscal 2011 asconsisted ~~compared~~primarily ~~to fiscal 2010.~~of ~~Administration~~foreign ~~expenses~~currency inlosses ~~fiscal 2011 also include $228 in legal fees~~ associated with ~~settlement~~our ofChinese anand ~~old~~Indian ~~outstanding claim against the Company by a~~subsidiaries. ~~former~~Other ~~employee,~~income ~~an increase~~ of $~~123~~54 ~~over~~in fiscal 2010. ~~Fiscal~~consisted ~~2010~~primarily ~~included legal fees~~ of a $~~421~~90 ~~associated~~gain ~~with~~from the ~~Cuesta class action lawsuit, which was~~ ~~settled~~extinguishment ~~in the fourth quarter~~ of ~~fiscal~~old ~~2010.~~outstanding ~~Other~~accounts ~~increases~~payable inbalances ~~administration expenses~~of ~~in fiscal 2011 as compared to fiscal 2010 include: a $115 increase in~~various ~~taxes~~insolvent ~~and~~subsidiaries ~~filing~~offset ~~fees~~slightly inby ~~China~~losses related to ~~new~~the ~~government~~disposal ~~construction and~~of ~~education~~certain ~~taxes,~~fixed ~~an $84 increase in information technology maintenance costs and a reduction of $111 in fiscal 2010 related to our environmental liability accrual~~assets.


							Percent Change
For the Year Ended September 30:	2012		2011		2010		2011 to 2012			2010 to 2011
Income tax expense (benefit)	$	2,244	$	1,439	$	338		55.9	%		325.7	%

~~Administration~~ In ~~expenses for~~ fiscal ~~2010 decreased slightly when compared~~ to2012, ~~fiscal~~2011 ~~2009.~~and ~~This~~2010, ~~decrease~~the isCompany ~~primarily~~recorded ~~attributable~~income totax aexpense of $~~272~~2,244, ~~decline (~~$~~297~~1,439 inand ~~fiscal 2009~~$338, ~~versus~~respectively. ~~$25~~The inoverall ~~fiscal~~tax ~~2010)~~rate was 40.0% in ~~non-cash~~fiscal ~~compensation~~2012 ~~expense~~compared ~~related~~ to ~~our unfunded deferred compensation plan~~30.1% Inin ~~addition,~~fiscal ~~bad~~2011 ~~debt expense~~and ~~decreased~~19.7% ~~$164~~ in fiscal 2010 ~~from the prior year~~. ~~Offsetting~~The ~~these decreases~~increase in ~~administration~~the ~~expense~~effective tax ~~during~~rate between fiscal ~~2010~~2012 ~~was~~and afiscal ~~$182~~2011 ~~increase~~is ~~in legal fees,~~ primarily ~~associated~~due ~~with~~to the ~~Cuesta class action lawsuit, which is~~continued ~~also~~recognition ~~discussed~~of ina ~~Note~~valuation 10allowance inagainst the ~~Notes~~Company’s toIndian ~~Consolidated~~subsidiary’s deferred ~~Financial~~tax ~~Statements. Additionally~~assets, ~~wage~~higher ~~related~~tax ~~expenses~~rates ~~increased~~ in ~~fiscal~~China ~~2010~~ due to ~~reinstating full wages at~~ the ~~beginning~~scheduled end of the tax ~~second~~holiday ~~quarter~~in ofChina ~~fiscal~~on ~~2010.~~December ~~In fiscal 2009~~31, ~~wage~~2011 ~~related~~and ~~expenses were reduced during~~ the ~~last~~recognition ~~half~~ of ~~the~~additional U.S. ~~year~~tax ~~as part~~expense ofassociated ~~the~~with ~~cost~~foreign ~~reduction~~earnings ~~program~~no ~~put~~longer ~~into~~intended ~~place~~to inbe indefinitely ~~fiscal~~reinvested ~~2009~~in China.

							Percent Change
							2010 to	2009 to
For the Year Ended September 30:	2011		2010		2009		2011	2010
Class action settlement	$	-	$	775	$	-	NM	NM

The increase in the effective tax rate between fiscal 2011 and fiscal 2010 is primarily due to the mix of pretax earnings between domestic and foreign jurisdictions, primarily in China.

~~During~~ Refer to ~~fiscal~~Note ~~2010,~~9 ~~the Company entered into a settlement agreement with the plaintiffs~~ in the ~~Cuesta~~Notes ~~class~~to ~~action~~Consolidated ~~lawsuit~~Financial ~~and~~Statements ~~paid $775~~ for ~~complete~~further ~~and~~details ~~final~~of ~~settlement~~changes ~~of the action as discussed~~ in ~~Note~~our 10overall totax ~~Consolidated Financial Statements~~rate.

								Percent Change
								2010 to	2009 to
For the Year Ended September 30:	2011		2010			2009		2011	2010
Gain on sale of investments	$	-	$	(441	)	$	-	NM	NM

Financial Condition, Liquidity and Capital Resources

~~During~~ At September ~~the~~30, ~~third~~2012, ~~quarter~~we had cash and cash equivalents of $1,750. During fiscal ~~2010~~2012, we ~~sold~~paid ~~our~~four ~~short-term~~quarterly ~~investments~~cash ~~and~~dividends ~~recorded~~at a $~~441~~0.12 ~~gain~~per ~~related~~share tototaling ~~the~~$3,565 ~~sale.~~compared ~~The~~to ~~majority~~two ofquarterly ~~the~~cash ~~shares~~dividends ~~sold~~of ~~related~~$1,765 toin ~~the~~fiscal ~~Company’s~~2011. ~~investment in~~During ~~Dana~~fiscal as2012, ~~part~~we ofamended ~~the~~our ~~environmental~~revolving ~~settlement~~loan ~~discussed~~facility inwith ~~Note~~U.S. 10Bank toand as of ~~Consolidated~~September ~~Financial~~30, ~~Statements.~~2012 ~~The~~we ~~gain~~had ~~recognized~~$13,629 inavailable ~~fiscal~~under ~~2010~~this ~~was~~revolving loan facility. ~~primarily~~Although ~~the~~no ~~result~~assurances ofcan ~~writing~~be ~~down~~given, ~~the~~we ~~basis~~believe ofthat our ~~investments~~$1,750 ~~discussed~~in cash plus ~~further~~available ~~below,~~borrowings ~~with~~under ~~the~~our ~~impairment~~revolving ~~charge~~loan ~~recorded~~facility inwill be adequate to meet our working capital needs throughout fiscal ~~2009~~2012.

							Percent Change
							2010 to	2009 to
For the Year Ended September 30:	2011		2010		2009		2011	2010
Loss on impairment of investments	$	-	$	-	$	317	NM	NM

Cash generated from operations was $5,909 for fiscal 2012; an increase of $4,623 from the cash generated from operations of $1,286 for fiscal 2011. Net income plus non-cash charges for depreciation, amortization and stock based compensation contributed cash of $6,181 in fiscal 2012 compared to $6,416 in fiscal 2011.

~~Loss~~ Changes onin working ~~impairment~~capital items used cash of ~~investments~~$1,190 ~~is a~~for ~~non-~~fiscal 2012 compared to use of cash of $5,546 ~~other-than-temporary~~in ~~impairment~~fiscal ~~charge~~2011. ~~relating~~Changes toin ~~our~~receivables ~~common~~in ~~stock~~fiscal 2012 were a use of ~~Dana~~cash ~~during~~of ~~the~~$110 ~~first~~compared ~~quarter~~to a use of cash of $2,052 in fiscal ~~2009~~2011. ~~The~~Changes ~~impairment~~in receivables ~~charge~~between ~~assumes~~periods are primarily impacted by changes in sales volumes nofrom ~~income~~period ~~tax~~to ~~benefit~~period ~~given~~and ~~the~~to ~~uncertainty~~a lesser degree, timing of ~~the~~collections. Inventories ~~Company’s~~decreased ~~ability~~$2,298 in fiscal 2012 as compared to ~~generate~~an increase of ~~future~~$3,822 ~~taxable~~in ~~investment~~fiscal ~~gains~~2011. ~~required~~Inventories increased in fiscal 2011 primarily due to the ~~utilize~~start-up ~~these~~of ~~investment~~our ~~losses~~Indian manufacturing facility, safety stock and increasing inventory to meet customers’ escalating delivery schedules. The inventory ~~Prior~~reduction in fiscal 2012 related to ~~recording~~reducing ~~the~~some ~~impairment~~safety ~~charge,~~stock ~~the~~and ~~decline~~more closely balancing inventory requirements with sales mix. Accounts payable and accrued expenses decreased in ~~market~~fiscal ~~value~~2012 ~~was~~primarily due to reductions in inventory, ~~carried~~timing ~~net~~of payments on accounts payable and increased seasonal payments of ~~tax~~amounts inaccrued ~~other~~as of ~~comprehensive~~the ~~loss~~prior year-end. ~~Following~~Accounts ~~the~~payable ~~recording~~and ofaccrued ~~this~~expenses increased in ~~impairment~~fiscal ~~charge,~~2011 ~~all~~primarily ~~subsequent~~due ~~changes~~to timing of payments on accounts payable and increases in ~~market~~purchases ~~value~~of inventory and supplies and were partially offset by increased seasonal payments of ~~our~~amounts ~~short~~accrued as of the prior year-~~term~~end. Cash ~~investments~~flows from operations for fiscal 2012 included payments to our pension plans of $1,140 ~~which~~compared ~~were~~to ~~sold~~contributions inof $1,042 for fiscal ~~2010~~2011. We believe it is likely we will continue to generate positive cash from operations, ~~was~~however, depending ~~recorded~~on ~~net~~the ofcontinued ~~tax~~uncertainty in ~~other~~the worldwide economic market, we ~~comprehensive~~could ~~income~~experience ~~(loss)~~periods of negative cash flow from operations.

								Percent Change
								2010 to	2009 to
For the Year Ended September 30:	2011		2010			2009		2011	2010
Other (income) expense, net	$	211	$	(54	)	$	84	NM	NM

~~Other~~ Cash used ~~income~~in ofinvesting activities was $~~211~~1,386 infor fiscal ~~2011 consisted~~2012 ~~primarily~~and of$2,802 ~~foreign~~for ~~currency~~fiscal 2011. ~~losses~~Investing ~~associated~~activities ~~with~~for ~~our~~fiscal ~~Chinese~~2012 and ~~Indian~~ ~~subsidiaries.~~2011 ~~Other~~was ~~income~~comprised of ~~$54~~purchases of equipment. Purchases were lower in fiscal ~~2010~~2012 ~~consisted~~than ~~primarily~~in ofprior ~~a $90~~years ~~gain~~in ~~from~~part due ~~the~~to ~~extinguishment~~timing of ~~old~~projects ~~outstanding~~year ~~accounts~~over ~~payable~~year. ~~balances~~We ~~of various~~believe ~~insolvent~~our ~~subsidiaries~~capital ~~offset~~expenditures are ~~slightly~~adequate byto ~~losses~~maintain ~~related~~our toexisting ~~the~~operations ~~disposal of~~and ~~certain~~meet ~~fixed~~new ~~assets~~market opportunities. ~~Other~~We ~~expense~~expect ofour ~~$84~~cash inuse ~~fiscal~~for ~~2009~~investing ~~primarily~~activities ~~consisted~~to remain ofconstant ~~losses~~or ~~related~~to increase as we continue to ~~the~~purchase ~~disposal~~capital ofequipment ~~certain~~to ~~fixed~~expand and ~~assets~~support our operations worldwide. We currently anticipate approximately $2,500 in capital expenditures for fiscal 2013.

								Percent Change
								2010 to		2009 to
For the Year Ended September 30:	2011		2010		2009			2011		2010
Income tax expense (benefit)	$	1,439	$	338	$	(1,677	)	325.7	%	120.2	%

Cash used in financing activities was $4,112 for fiscal 2012, compared to cash used in financing activities of $161 for fiscal 2011. Cash used in financing activities during fiscal 2012 primarily relates to payment of four quarterly cash dividends to stockholders of record totaling $3,565 and $614 in net payments on our revolving loan facility. Financing activities in fiscal 2012 also included $66 in proceeds from the exercise of stock options. Cash used in financing activities in fiscal 2011 primarily relates to net borrowings on our revolving loan facility of $1,575 and proceeds from the exercise of stock options of $29 substantially offset by payment of two quarterly dividends of $1,765 related to quarterly cash dividends of $0.12 per share. Borrowings and payments on our revolving loan facility are shown separately on the statement of cash flows due to the revolving loan facility having a maturity date of more than three months. The large balances for borrowings and payments represent the optimization of cash to reduce interest payments and are due to timing of when payments are made compared to when cash collections are received in a given period.

18Contractual Obligations as of September 30, 2012

~~In fiscal~~ At ~~2011~~September ~~and~~30, ~~2010~~2012, ~~the~~our ~~Company~~contractual ~~recorded~~obligations ~~income~~consisted ~~tax expense~~ of ~~$1,439~~operating ~~and $338,~~lease ~~compared~~obligations, toa anlicense ~~income~~agreement ~~tax~~and ~~benefit~~a ofrevolving ~~$1,677~~loan ~~in fiscal 2009~~facility. ~~The~~We ~~overall~~do ~~tax~~not ~~rate~~have ~~was~~any ~~30.1%~~material inletters ~~fiscal~~of ~~2011~~credit ~~compared~~or todebt ~~19.7%~~guarantees inoutstanding ~~fiscal~~at ~~2010~~September ~~and 45.5% in fiscal~~30, ~~2009.~~2012 ~~The~~except ~~increase~~as noted in ~~the~~Note ~~effective~~7 ~~tax~~to ~~rate~~Consolidated ~~between~~Financial ~~fiscal~~Statements. ~~2011 and fiscal 2010~~Maturities isof ~~primarily~~these ~~due~~contractual toobligations ~~the~~consist ~~mix~~ of ~~pretax~~the ~~earnings between domestic and foreign jurisdictions, primarily in China.~~following:

The decrease in the effective tax rate when comparing fiscal 2010 and fiscal 2009 is primarily due to the mix of pretax earnings between domestic and foreign jurisdictions. The mix of earnings combined with lower tax rates in our foreign jurisdictions caused the tax rate to decline from prior years.


	Payments due by period
	Total		Less than 1 year		1 – 3 years
Operating leases	$	2,282	$	730	$	1,552
MMT license - minimum royalties		136		36		100
Revolving loan facility		961		961		—
	$	3,379	$	1,727	$	1,652

~~Refer~~ Certain liabilities, including those related to ~~Note~~our 9pension and post-retirement benefit plans, are reported in the ~~Notes~~accompanying consolidated balance sheets but are not reflected in the table above due to the absence of stated maturities. We have ~~Consolidated~~net ~~Financial~~obligations ~~Statements~~at ~~for~~September ~~further~~30, ~~details~~2012 related to our pension plans and post-retirement medical plan of ~~changes~~$7,145 inand $2,082, respectively. We funded $1,140 to our ~~overall~~pension plans in fiscal 2012 compared to $1,042 in fiscal 2011 ~~tax~~and ~~rate~~we expect to make payments of $818 in fiscal 2013 to fund our pension plans.

~~Financial~~Critical ~~Condition,~~Accounting ~~Liquidity~~Policies and ~~Capital~~ ~~Resources~~Estimates

At Management’s discussion ~~September~~and ~~30,~~analysis ~~2011,~~of weour ~~had~~financial ~~cash~~ condition and ~~cash~~results ~~equivalents~~ of ~~$1,339.~~operations are ~~During~~based ~~the~~on ~~second~~our ~~quarter~~consolidated offinancial ~~fiscal 2011~~statements, ~~we initiated~~which ahave ~~quarterly~~been ~~dividend~~prepared ~~program~~in accordance ~~and~~with ~~paid~~accounting ~~two~~principles ~~quarterly~~generally ~~cash~~accepted ~~dividends~~in ~~at $0.12~~the ~~per~~United ~~share~~States. The ~~totaling~~preparation ~~$1,765.~~of ~~During~~these ~~fiscal~~consolidated ~~2010,~~financial westatements ~~entered~~requires ~~into~~us ato ~~revolving~~make ~~loan~~estimates ~~facility~~and ~~with~~judgments ~~U.S.~~that ~~Bank~~affect ~~and~~the asreported amounts of ~~September~~assets, liabilities, 30sales, ~~2011~~cost weof ~~had~~sales ~~$5,540 available~~and ~~under~~expenses ~~this~~and ~~revolving~~related ~~loan~~disclosure ~~facility~~of contingent assets and liabilities. ~~Although~~We noevaluate ~~assurances~~our ~~can~~estimates ~~be given,~~on wean ~~believe~~on-going ~~that~~basis. We base our ~~$1,339~~estimates inon ~~cash~~historical ~~plus~~experience ~~available~~and ~~borrowings~~on ~~under~~various ~~our~~other assumptions ~~revolving~~that ~~loan~~are ~~facility~~believed ~~will~~to be ~~adequate~~reasonable tounder ~~meet~~the ~~our~~circumstances, ~~working~~the ~~capital~~results ~~needs~~of which form the ~~throughout~~basis ~~fiscal~~for ~~2012.~~making ~~However,~~judgments ~~were~~about wethe tocarrying ~~require~~value ~~additional~~of ~~borrowing~~assets and liabilities ~~capacity,~~that weare ~~may~~not bereadily ~~unable~~apparent tofrom ~~locate~~other ~~such~~sources. ~~capacity~~Actual onresults ~~acceptable~~may ~~terms~~differ from these estimates under different assumptions or atconditions. We believe the ~~all~~following critical accounting policies and the related judgments and estimates affect the preparation of our consolidated financial statements.

Cash generated from operations was $1,286 for fiscal 2011; a decrease of $1,394 from the cash generated from operations of $2,680 for fiscal 2010. Net income plus non-cash charges for depreciation, amortization and stock based compensation contributed cash of $6,416 in fiscal 2011 compared to $4,421 in fiscal 2010.19

~~Changes~~Revenue in working capital items used cash of $5,546 for fiscal 2011 compared to use of cash of $745 in fiscal 2010. Changes in receivables in fiscal 2011 were a use of cash of $2,052 compared to a use of cash of $1,267 in fiscal 2010. The increase in receivables is primarily due to higher sales volumes in the latter part of fiscal 2011 as compared to sales volumes near the end of fiscal 2010 and to a much lesser degree timing of collections. Inventories increased $3,822 in fiscal 2011 as compared to an increase of $1,973 in fiscal 2010. The fiscal 2011 increase is primarily due to two factors (i) a build-up of inventory levels in line with sales volume increases throughout fiscal 2011 as compared to fiscal 2010 and (ii) building inventory at our India facility in conjunction with the start of production at that site during the third quarter of fiscal 2011. Additionally, during fiscal 2011 the Company has purchased additional safety stock on certain components to ensure customer deliveries in the event of rapid increases in orders. Accounts payable and accrued expenses increased in fiscal 2011 primarily due to increases in purchases of inventory and supplies in line with the significant increase in sales volumes and to a lesser degree timing of payments on accounts payable. Accounts payable and accrued expenses increased in fiscal 2010 primarily due to increases in purchases of inventories and increases in our warranty provision related to claims with one customer, which were paid during fiscal 2011. Cash flows from operations for fiscal 2011 included payments to our pension plans of $1,042 compared to contributions of $571 for fiscal 2010. Also included in cash flows from operations in fiscal 2010 was the $775 Cuesta class action settlement payment, which is discussed in Note 10 to Consolidated Financial Statements. We believe it is likely we will continue to generate positive cash from operations, however, depending on the continued uncertainty in the worldwide economic market, we could experience periods of negative cash flow from operations.recognition

~~Cash used in investing activities~~ Revenue ~~was~~is ~~$2,802~~recognized ~~for~~at ~~fiscal~~the ~~2011~~time ~~and~~of $1product shipment,~~704~~ ~~for~~which ~~fiscal~~is ~~2010.~~when ~~Investing~~title ~~activities~~and ~~for fiscal~~risk ~~2011 consisted~~ of ~~purchases of equipment. Purchases were higher in fiscal~~ ~~2011~~loss ~~than~~transfers ~~in prior years in part~~ to ~~start-up purchases for our Pune~~customers, ~~India facility.~~and ~~Cash~~when ~~flows~~all ~~from~~of ~~investing~~the ~~activities~~following ~~for~~have ~~fiscal~~occurred: ~~2010 included~~a ~~purchases~~firm ofsales ~~equipment~~agreement ofis $2in place,~~238,~~ ~~which~~pricing ~~were~~is ~~offset~~fixed ~~slightly~~or bydeterminable, ~~$511 of proceeds~~and ~~related~~collection tois ~~the~~reasonably ~~sale of investments~~assured. WeRevenues ~~expect~~are ~~our~~reported ~~cash~~net ~~use~~of ~~for investing~~estimated ~~activities~~returns, torebates ~~remain~~and ~~constant~~customer ordiscounts. toDiscounts ~~increase as we continue to purchase capital equipment to expand~~ and ~~support~~rebates ~~our~~are ~~operations worldwide. We currently~~recorded ~~anticipate~~during ~~approximately~~the ~~$2,500~~period inthey ~~capital~~are ~~expenditures~~earned ~~for~~by ~~fiscal 2012~~the customer.

19Product Warranty

~~Cash~~ We ~~used in~~provide ~~financing~~a ~~activities~~warranty ~~was~~covering ~~$161~~defects ~~for~~arising ~~fiscal~~from ~~2011,~~products ~~compared~~sold. ~~to cash used in~~The ~~financing~~product ~~activities~~warranty ofliability ~~$7,205~~is ~~for~~based ~~fiscal~~on ~~2010.~~historical ~~During~~return ~~fiscal~~rates ~~2011,~~of weproducts ~~paid two~~and ~~quarterly~~amounts ~~cash~~for ~~dividends~~significant toand ~~stockholders~~specific ofwarranty ~~record totaling $1,765~~issues. The ~~use~~warranty ~~of cash~~is limited to ~~pay~~a ~~quarterly~~specified ~~cash~~time ~~dividends~~period, ~~was~~mileage ~~primarily~~or ~~offset~~hours byof ~~net~~use, ~~borrowings~~and ~~on our~~varies ~~revolving~~by ~~loan facility of $1~~product,~~575~~ application and ~~proceeds~~customer. ~~from~~The ~~the~~Company ~~exercise~~has ofrecorded ~~stock options~~a ofwarranty ~~$29.~~liability ~~During~~which, in the ~~fourth~~opinion ~~quarter~~ of ~~fiscal 2010~~management, weis ~~paid~~adequate ato ~~single~~cover ~~cash dividend~~such tocosts. ~~stockholders~~While ofwe ~~record~~believe ~~totaling~~our ~~$7,278.~~estimates Inare ~~addition~~reasonable, ~~fiscal 2010~~ ~~included~~they ~~cash~~are ~~generation~~subject ~~of $73 related~~ to ~~proceeds~~change ~~from~~and ~~the~~such ~~exercise~~change ofcould ~~stock options~~be material.

~~Contractual Obligations as of September 30, 2011~~Legal

At From time ~~September~~to 30time we are involved in various claims, ~~2011~~lawsuits and other proceedings from time to time. Such litigation involves uncertainty as to possible losses we may ultimately realize when one or more future events occur or fail to occur. In connection with such claims and lawsuits, ~~our~~we estimate the probability ~~contractual~~of ~~obligations~~losses ~~consisted~~based on advice of ~~operating~~legal ~~lease~~counsel, ~~obligations~~the outcomes of similar litigation, legislative adevelopment ~~license~~and other factors. Due to the numerous variables ~~agreement~~associated with these judgments and aassumptions, ~~revolving~~both ~~loan~~the ~~facility~~precision and reliability of the resulting estimates of the related loss contingencies are subject to substantial uncertainties. We doregularly ~~not~~monitor ~~have~~our ~~any~~estimated exposure ~~letters~~to ofthese ~~credit~~contingencies ~~or debt~~and, ~~guarantees~~as ~~outstanding~~additional atinformation ~~September~~becomes 30known, may ~~2011~~change our estimates significantly. ~~Maturities~~We ofexpense ~~these~~legal expenses related to ~~contractual~~claims ~~obligations~~in ~~consist~~the period incurred, including, in the case of expenses subject to contingencies, in the ~~following:~~period in which we determine that it is probable that all remaining contingencies will be satisfied and the amount of such expenses have been established with reasonable certainty. A significant change in our estimates, or a result that materially differs from our estimates, could have a significant impact on our financial position, results of operations and cash flows.

	Payments due by period
			Less than		1 – 3
	Total		1 year		years
Operating leases	$	902	$	661	$	241
MMT license - minimum
royalties		274		124		150
Revolving loan facility		1,575		1,575		-
	$	2,751	$	2,360	$	391

Environmental Costs

~~Certain~~ We ~~liabilities,~~estimate ~~including~~the ~~those~~costs ~~related~~of toinvestigation ~~our~~and ~~pension~~remediation ~~and~~for ~~post-retirement~~certain ~~benefit~~soil and ~~plans~~groundwater contaminants at our Portland, ~~are~~Oregon ~~reported~~facility. inThe ultimate costs to the ~~accompanying~~Company ~~consolidated~~for ~~balance~~the ~~sheets~~investigation, ~~but~~remediation ~~are~~and ~~not~~monitoring of this site ~~reflected~~cannot inbe ~~the~~predicted ~~table~~with ~~above~~certainty due to the ~~absence~~often unknown magnitude of ~~stated~~the pollution ~~maturities.~~or Wethe ~~have net~~necessary ~~obligations~~cleanup, atthe ~~September~~varying 30costs of alternative cleanup methods, ~~2011~~the ~~related~~amount of time necessary to ~~our~~accomplish ~~pension~~such ~~plans~~cleanups and the ~~post-retirement~~evolving ~~medical~~nature ~~plan~~of cleanup technologies and governmental regulations. Management has recognized a liability for environmental remediation costs for this site in an amount that management believes is probable and reasonably estimable. When the estimate of $5a probable loss is within a range,~~938~~ the minimum amount in the range is accrued when no estimate within the range is better than another. In making these judgments and $2assumptions,~~332,~~ ~~respectively.~~management Weconsiders, ~~funded~~among $1other things,~~042~~ tothe ~~our~~activity ~~pension~~to-date ~~plans~~at inthe ~~fiscal~~site ~~2011~~and ~~compared~~information toobtained ~~$571~~through consultation inwith ~~fiscal~~applicable ~~2010~~regulatory authorities and third party consultants weand ~~expect~~contractors. Management regularly monitors the Company’s exposure to environmental ~~make~~loss ~~payments~~contingencies. ofAs $1additional information becomes known,~~146~~ init is ~~fiscal~~at ~~2012~~least toreasonably ~~fund~~possible ~~our~~that ~~pension~~a change in the estimated liability ~~plans~~accrual will occur in the near future.

~~Critical~~Pensions and ~~Accounting~~Post-Retirement ~~Policies~~Benefit ~~and Estimates~~Obligations

~~Management's~~ Pension ~~discussion~~ and ~~analysis~~ ofpost-retirement ~~our~~benefit ~~financial~~obligations ~~condition~~ and ~~results~~net ofperiod ~~operations~~benefit cost are ~~based on our~~calculated ~~consolidated~~using ~~financial~~actuarial ~~statements,~~models. ~~which~~The ~~have~~most ~~been~~important ~~prepared~~assumptions inthat ~~accordance~~affect ~~with~~these ~~accounting~~computations ~~principles~~are ~~generally~~the ~~accepted~~discount inrate, ~~the~~expected ~~United~~long-term ~~States.~~rate ~~The preparation~~ of ~~these~~return ~~consolidated~~on ~~financial statements requires us to make estimates and~~plan ~~judgments that affect the reported amounts of~~ assets, ~~liabilities,~~and ~~sales,~~healthcare cost of ~~sales~~trend ~~and expenses and related disclosure of contingent assets and liabilities~~rates. We evaluate ~~our~~these ~~estimates~~assumptions onat ~~an on-going basis~~least annually. WeOther ~~base our estimates on historical experience and on various other~~ assumptions ~~that~~involve ~~are believed~~demographic tofactors besuch ~~reasonable~~as ~~under the circumstances~~retirement, ~~the results of which form the~~ ~~basis~~mortality ~~for~~and ~~making~~turnover. ~~judgments~~These ~~about~~assumptions ~~the~~are ~~carrying~~evaluated ~~value~~at ofleast ~~assets~~annually and ~~liabilities~~ ~~that~~ are ~~not~~updated ~~readily~~to ~~apparent~~reflect ~~from~~our ~~other sources~~experience. Actual results ~~may~~in ~~differ~~any ~~from these~~given ~~estimates~~year ~~under different assumptions or conditions. We believe the~~will ~~following~~often ~~critical~~differ ~~accounting~~from ~~policies~~actuarial ~~and~~assumptions ~~the~~because ~~related~~of ~~judgments~~economic and ~~estimates affect~~other ~~the preparation of our consolidated financial statements~~factors.

~~Revenue recognition~~20

~~Revenue~~ Our discount rate assumption is ~~recognized~~intended to reflect the rate at which retirement benefits could be effectively settled based upon the ~~time~~assumed timing of the ~~product~~benefit ~~shipment~~payments. To determine our discount rate, ~~which~~we isdiscounted ~~when~~the ~~title~~expected benefit ~~and~~payments ~~risk~~using the Principal Pension Discount Yield Curve. The equivalent level interest rate that produces the same present value of ~~loss~~benefits was ~~transfers~~then determined. Our assumed rate does not differ significantly from this benchmark rate. We assumed a discount rate of 3.50% to ~~customers,~~determine our pension benefit obligations at September 30, 2012 and ~~when~~5.00% ~~all~~to ofdetermine ~~the~~our ~~following~~net periodic ~~have~~benefit ~~occurred:~~cost ain ~~firm~~fiscal ~~sales~~2012. ~~agreement~~A is1.0% decrease in ~~place,~~these discount rates ~~pricing~~would ishave ~~fixed~~increased orour ~~determinable~~pension benefit obligations at the end of fiscal 2012 by $2,329 and ~~collection~~increased isour ~~reasonably~~net ~~assured~~periodic benefit cost in 2012 by $2. ~~Revenues~~A 1.0% ~~are~~increase ~~reported~~in discount rates would have decreased our pension obligations at September 30, 2012 by $1,912 and decreased our net periodic benefit cost in fiscal 2012 by $6. To determine the discount rate for our post-retirement benefit plan, we also discounted the expected benefit payments using the Principal Pension Discount Yield Curve and assumed a discount rate of ~~estimated~~3.75% ~~returns~~to determine our post-retirement benefit obligations at September 30, ~~rebates~~2012 and 5.00% ~~customer~~to ~~discounts~~determine our post-retirement benefit cost in fiscal 2012. ~~Discounts~~A 1.0% decrease in discount rate for our post-retirement benefit plan would have increased our post-retirement benefit obligation at September 30, 2012 by $215 and ~~rebates~~decreased our ~~are~~post-retirement ~~recorded~~benefit ~~during~~expense ~~the~~in ~~period~~fiscal ~~they~~2012 ~~are~~by ~~earned~~$2. A 1.0% increase in discount rate would have decreased our post-retirement benefit obligation at September 30, 2012 by ~~the~~$182 and our post-retirement benefit expense in fiscal ~~customer~~2012 would have increased $10.

~~Product~~ To determine ~~Warranty~~the expected long-term rate of return on pension plan assets, we consider the current asset allocations and the historical and future expected returns of multiple asset classes to develop a risk-free real rate of return and risk premiums for each asset class. The overall rate for each asset class was developed by combining a long-term inflation component, the risk-free real rate of return, and the associated risk premium. A weighted average rate was then developed based on those overall rates and the target asset allocation of the plan. Information regarding our asset allocations is included in Note 8 to Consolidated Financial Statements. A 1.0% increase or decrease in the assumed rate of return on plan assets would have impacted net periodic benefit cost in fiscal 2012 by $94. Our post-retirement plan does not contain any plan assets.

We ~~provide~~assumed healthcare acost ~~warranty~~trend ~~covering defects~~rates ~~arising~~for ~~from~~our ~~products~~post-retirement ~~sold.~~plan ~~The~~of ~~product~~5.0% ~~warranty~~- ~~liability~~8.0% isin fiscal ~~based~~2012, ~~on historical~~decreasing ~~return~~gradually ~~rates~~to of4.0 ~~products~~– ~~and~~4.5% ~~amounts~~in ~~for~~fiscal ~~significant~~2020 ~~and~~thereafter. ~~specific~~A ~~warranty issues~~1.0% ~~The~~increase ~~warranty~~in isassumed ~~limited~~healthcare tocost atrend ~~specified~~rates ~~time~~would ~~period,~~have ~~mileage~~increased ~~or hours of~~our ~~use,~~post-retirement ~~and~~benefit ~~varies~~obligation byat ~~product~~September 30, ~~application~~2012 by $182 and ~~customer.~~increased post-retirement ~~The~~benefit ~~Company~~expense ~~has~~in ~~recorded~~2012 ~~a warranty~~by ~~liability~~$10. ~~which,~~A 1.0% decrease in ~~the~~assumed healthcare ~~opinion~~cost oftrend ~~management,~~rates iswould ~~adequate~~have todecreased ~~cover such~~the ~~costs.~~post-retirement ~~While~~benefit obligation weby ~~believe~~$158 ~~our~~at ~~estimates~~the ~~are~~end ~~reasonable,~~of ~~they~~fiscal ~~are~~2012 ~~subject~~and todecreased post-retirement ~~change~~benefit ~~and~~expense ~~such~~in ~~change~~fiscal ~~could~~2012 beby ~~material~~$9.

20Share Based Compensation Expense

~~Legal~~ We measure compensation cost for share-based awards at fair value and recognize compensation over the requisite service period for awards expected to vest. The estimation of stock awards that will ultimately vest requires judgment, and to the extent actual results differ from our estimates, such amounts will be recorded as a cumulative adjustment in the period estimates are revised. We consider many factors when calculating fair value of stock options including estimated stock price volatility and expected term. Factors considered in estimating forfeitures include the types of awards, employee class, and historical experience. Actual results may differ substantially from these estimates.

Income From time to time we are involved in various claims, lawsuits and other proceedings from time to time. Such litigation involves uncertainty as to possible losses we may ultimately realize when one or more future events occur or fail to occur. In connection with such claims and lawsuits, we estimate the probability of losses based on advice of legal counsel, the outcomes of similar litigation, legislative development and other factors. Due to the numerous variables associated with these judgments and assumptions, both the precision and reliability of the resulting estimates of the related loss contingencies are subject to substantial uncertainties. We regularly monitor our estimated exposure to these contingencies and, as additional information becomes known, may change our estimates significantly. We expense legal expenses related to claims in the period incurred, including, in the case of expenses subject to contingencies, in the period in which we determine that it is probable that all remaining contingencies will be satisfied and the amount of such expenses have been established with reasonable certainty. A significant change in our estimates, or a result that materially differs from our estimates, could have a significant impact on our financial position, results of operations and cash flows. Taxes

~~Environmental~~ For ~~Costs~~each jurisdiction that we operate in, we are required to estimate our annual effective tax rate together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in our consolidated balance sheet. We must also assess the likelihood that our deferred tax assets will be recovered from future taxable income and unless we believe that recovery is more likely than not, a valuation allowance is established. Our income tax provision on the consolidated statement of operations is impacted by changes in the valuation allowance. This process is complex and involves significant management judgment in determining our provision for income taxes, deferred tax assets and liabilities and any valuation allowances recorded against our net deferred tax assets.

We estimate the costs of investigation and remediation for certain soil and groundwater contaminants at our Portland, Oregon facility. The ultimate costs to the Company for the investigation, remediation and monitoring of this site cannot be predicted with certainty due to the often unknown magnitude of the pollution or the necessary cleanup, the varying costs of alternative cleanup methods, the amount of time necessary to accomplish such cleanups and the evolving nature of cleanup technologies and governmental regulations. Management has recognized a liability for environmental remediation costs for this site in an amount that management believes is probable and reasonably estimable. When the estimate of a probable loss is within a range, the minimum amount in the range is accrued when no estimate within the range is better than another. In making these judgments and assumptions, management considers, among other things, the activity to-date at the site and information obtained through consultation with applicable regulatory authorities and third party consultants and contractors. Management regularly monitors the Company’s exposure to environmental loss contingencies. As additional information becomes known, it is at least reasonably possible that a change in the estimated liability accrual will occur in the near future.21

~~Pensions~~ITEM ~~and~~7A. ~~Post-Retirement~~QUANTITATIVE ~~Benefit Obligations~~AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market ~~Pension~~risk ~~and~~is ~~post-retirement benefit obligations and net period benefit cost are calculated using actuarial models. The most important assumptions that affect these computations are~~ the ~~discount~~potential ~~rate,~~loss ~~expected~~arising ~~long-term~~from ~~rate~~adverse ~~of return~~changes onin ~~plan~~market ~~assets, and healthcare cost trend~~ rates. ~~We evaluate these~~and ~~assumptions~~prices, ~~at least annually. Other assumptions involve demographic factors~~ such as ~~retirement~~interest rates, ~~mortality~~foreign ~~and~~currency ~~turnover.~~exchange ~~These~~rates ~~assumptions are evaluated at least annually~~ and ~~are~~changes ~~updated to reflect our experience. Actual results~~ in ~~any~~ ~~given~~the ~~year~~market ~~will~~value ~~often differ from actuarial assumptions because~~ of ~~economic and other factors~~investments.

~~Our~~Interest ~~discount~~Rate rate assumption is intended to reflect the rate at which retirement benefits could be effectively settled based upon the assumed timing of the benefit payments. To determine our discount rate, we discounted the expected benefit payments using the Principal Pension Discount Yield Curve. The equivalent level interest rate that produces the same present value of benefits was then determined. Our assumed rate does not differ significantly from this benchmark rate. We assumed a discount rate of 5.00% to determine our pension benefit obligations at September 30, 2011 and to determine our net periodic benefit cost in fiscal 2011. A 1.0% decrease in these discount rates would have increased our pension benefit obligations at the end of fiscal 2011 by $1,793 and increased our net periodic benefit cost in 2011 by $8. A 1.0% increase in discount rates would have decreased our pension obligations at September 30, 2011 by $1,491 and decreased our net periodic benefit cost in fiscal 2011 by $11. To determine the discount rate for our post-retirement benefit plan, we also discounted the expected benefit payments using the Principal Pension Discount Yield Curve and assumed a discount rate of 5.00% to determine our post-retirement benefit obligations at September 30, 2011 and to determine our post-retirement benefit cost in fiscal 2011. A 1.0% decrease in discount rate for our post-retirement benefit plan would have increased our post-retirement benefit obligation at September 30, 2011 by $236 and increased our post-retirement benefit expense in fiscal 2011 by $4. A 1.0% increase in discount rate would have decreased our post-retirement benefit obligation at September 30, 2011 by $200 and our post-retirement benefit expense in fiscal 2011 would have increased $4.Risk

21 In June 2012, the Company amended its revolving loan facility with U.S. Bank, which now matures on June 30, 2014. As of September 30, 2012, the Company does not have an outstanding balance on this facility. The Company is also a guarantor for its subsidiary in India for a line of credit with HSBC of up to $1,371, of which $961 was outstanding as of September 30, 2012. Management does not believe a change in end of period interest rates of 10% or less, or changes in future interest rates on this variable rate obligation would have a material effect on its financial position, results of operations, or cash flows. The Company has not hedged its exposure to interest rate fluctuations.

ToForeign ~~determine~~Currency the expected long-term rate of return on pension plan assets, we consider the current asset allocations and the historical and future expected returns of multiple asset classes to develop a risk-free real rate of return and risk premiums for each asset class. The overall rate for each asset class was developed by combining a long-term inflation component, the risk-free real rate of return, and the associated risk premium. A weighted average rate was then developed based on those overall rates and the target asset allocation of the plan. Information regarding our asset allocations is included in Note 8 of the Notes to Consolidated Financial Statements. A 1.0% increase or decrease in the assumed rate of return on plan assets would have impacted net periodic benefit cost in fiscal 2011 by $90. Our post-retirement plan does not contain any plan assets.Risk

We sell ~~assumed~~our ~~healthcare~~products ~~cost~~primarily ~~trend~~to ~~rates~~customers ~~for~~in ~~our~~the ~~post-retirement~~heavy ~~plan~~truck, ~~of 5.0%~~transit bus and off-road 9equipment industries.0% inFor the fiscal years ended September 30, 2012 and 2011, ~~decreasing~~the ~~gradually~~Company tohad ~~4.0~~foreign -sales ~~5.0~~of approximately 41% inand ~~fiscal~~45% ~~2019~~of net ~~thereafter~~sales, respectively. AAll ~~1.0%~~worldwide ~~increase~~sales in ~~assumed~~fiscal ~~healthcare~~2012 ~~cost~~and ~~trend~~2011, ~~rates~~with ~~would~~the exception ~~have~~of $3,908 and $3,486, respectively, were denominated in U.S. dollars. ~~increased~~We ~~our~~have ~~post-retirement~~a ~~benefit~~manufacturing ~~obligation~~facility atin ~~September~~Suzhou, 30China and Pune, ~~2011~~India byand ~~$205~~sales offices in Shanghai, China and ~~increased~~Munich, ~~post-retirement~~Germany. ~~benefit~~We ~~expense~~purchase components internationally for use in ~~2011~~all byof ~~$10.~~our Amanufacturing 1facilities.0% ~~decrease~~These sales are denominated in U.S. dollars and other currencies. Although the Company is ~~assumed~~expanding ~~healthcare~~its ~~cost~~international ~~trend~~exposure, it does not believe that changes in future exchange rates would have ~~decreased~~a ~~the~~material ~~post-retirement~~effect on its financial position, ~~benefit~~results ~~obligation~~of byoperations, ~~$177~~or cash flows at this time. As a result, the ~~end~~Company ofhas not ~~fiscal~~entered ~~2011~~into ~~and~~forward ~~decreased~~exchange or option contracts for transactions to hedge ~~post-retirement~~against ~~benefit~~foreign ~~expense~~currency inrisk. ~~fiscal~~The ~~2011~~Company bywill $9continue to assess its foreign currency risk as its international operations, international purchases and sales increase.

~~Share~~Investment ~~Based Compensation Expense~~ Risk

The WeCompany ~~measure~~does ~~compensation~~not ~~cost~~use ~~for~~derivative ~~all~~financial ~~outstanding~~or ~~unvested~~commodity ~~share-based~~instruments. The ~~awards,~~Company’s ~~and~~financial ~~awards~~instruments weinclude ~~grant,~~cash ~~modify,~~and ~~repurchase~~cash orequivalents, ~~cancel in the future~~accounts receivable, ataccounts ~~fair value~~payable and ~~recognize~~long-term ~~compensation over the requisite service period for awards expected to vest~~obligations. The ~~estimation~~Company’s ofcash ~~stock awards that will ultimately vest~~and ~~requires~~cash ~~judgment~~equivalents, ~~and~~accounts toreceivable ~~the~~and ~~extent~~accounts ~~actual~~payable ~~results~~balances ~~differ from our estimates, such amounts will be recorded as a cumulative adjustment in the period estimates~~ are ~~revised. We consider many factors when calculating fair value including~~ ~~estimated stock price volatility, expected~~ short-term ~~and expected forfeitures. Factors considered~~ in ~~estimating~~nature, ~~forfeitures include the types of awards~~and, ~~employee~~ ~~class~~thus, ~~and~~the ~~historical~~Company ~~experience.~~believes ~~Actual~~they ~~results~~are ~~may~~not ~~differ~~exposed to ~~substantially~~material ~~from~~investment ~~these estimates~~risk.

~~Income Taxes~~ 22

~~For~~ITEM each jurisdiction that we operate in, we are required to estimate our annual effective tax rate together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes8. ~~These~~ ~~differences result in deferred tax assets and liabilities, which are~~FINANCIAL ~~included~~STATEMENTS inAND ~~our~~SUPPLEMENTARY consolidated balance sheet. We must also assess the likelihood that our deferred tax assets will be recovered from future taxable income and unless we believe that recovery is more likely than not, a valuation allowance is established. Our income tax provision on the consolidated statement of operations is impacted by changes in the valuation allowance. This process is complex and involves significant management judgment in determining our provision for income taxes, deferred tax assets and liabilities and any valuation allowances recorded against our net deferred tax assets.DATA

~~Recently~~Williams ~~Issued~~Controls, ~~Accounting~~Inc. ~~Standards~~Index to Consolidated Financial Statements

In June 2011, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance that revises the manner in which entities present comprehensive income in their financial statements. The guidance requires entities to report comprehensive income in either a single, continuous statement or two separate but consecutive statements. This guidance will become effective for fiscal years beginning after December 15, 2011; however, we have early adopted this guidance as of the end of our fiscal 2011 reporting period as permitted by the guidance. The adoption of this new guidance had no impact on our consolidated financial condition and results of operations.


		Page
Report of Independent Registered Public Accounting Firm		24

Consolidated Balance Sheets at September 30, 2012 and 2011		25

Consolidated Statements of Income for the years ended September 30, 2012, 2011 and 2010		26

Consolidated Statements of Comprehensive Income for the years ended September 30, 2012, 2011 and 2010		27

Consolidated Statements of Stockholders’ Equity for the years ended September 30, 2012, 2011 and 2010		28

Consolidated Statements of Cash Flows for the years ended September 30, 2012, 2011 and 2010		29

Notes to Consolidated Financial Statements		30

InSee ~~May~~pages ~~2011,~~77-78 the FASB issued authoritative guidance to amend the fair value measurement and disclosure requirements. The guidance requires the disclosure of quantitative information about unobservable inputs used, a description of the valuation processes used and a qualitative discussion around the sensitivity of the measurements. The guidance will become effective for ~~the Company~~Index ~~at the beginning of our second quarter of fiscal 2012. We expect adoption~~ to ~~have no impact on our consolidated financial condition and results of operations.~~Exhibits

22 23

~~ITEM~~REPORT ~~7A.~~OF INDEPENDENT ~~QUANTITATIVE~~REGISTERED ~~AND~~PUBLIC ~~QUALITATIVE~~ACCOUNTING ~~DISCLOSURES ABOUT MARKET RISK~~FIRM

~~Market~~The ~~risk~~Board ~~is the~~of ~~potential~~Directors ~~loss arising from adverse changes in market rates~~ and ~~prices, such~~Stockholders asWilliams ~~interest rates~~Controls, ~~foreign currency exchange rates and changes in the market value of investments~~Inc.

~~Interest~~We have ~~Rate~~audited the accompanying consolidated balance sheets of Williams Controls, ~~Risk~~Inc. as of September 30, 2012 and 2011 and the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended September 30, 2012. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We ~~The~~conducted ~~Company~~our ~~has~~audits ain ~~revolving~~accordance ~~loan~~with ~~facility~~the ~~with~~standards ~~U.S.~~of ~~Bank,~~the ~~which~~Public ~~expires~~Company onAccounting ~~June~~Oversight ~~30,~~Board ~~2012~~(United States). AsThose ofstandards ~~September~~require ~~30,~~that ~~2011,~~we plan and perform the ~~Company’s~~audits ~~balance~~to onobtain ~~this~~reasonable assurance about whether the ~~facility~~ isfinancial ~~$800~~statements are free of material misstatement. The Company is not ~~also~~required ato ~~guarantor~~have, ~~for~~nor ~~its~~were ~~subsidiary~~we inengaged ~~India for~~to aperform, ~~line~~an audit of ~~credit~~its ~~with~~internal control ~~HSBC~~over offinancial upreporting. toOur ~~$1,660,~~audit included consideration of ~~which~~internal control ~~$775~~over ~~was~~financial ~~outstanding~~reporting as of ~~September~~a ~~30,~~basis ~~2011.~~for ~~Management~~designing ~~does~~audit ~~not~~procedures ~~believe~~that are aappropriate ~~change~~ in ~~end~~the circumstances, but not for the purpose of ~~period~~expressing an ~~interest~~opinion ~~rates~~on the effectiveness of ~~10%~~the orCompany’s ~~less~~internal control over financial reporting. Accordingly, orwe ~~changes~~express inno ~~future~~such ~~interest~~opinion. ~~rates~~An onaudit ~~this~~includes ~~variable~~examining, ~~rate~~on ~~obligation~~a ~~would~~test ~~have~~basis, aevidence ~~material~~supporting ~~effect~~the onamounts ~~its~~and disclosures in the consolidated financial ~~position~~statements, assessing the ~~results~~accounting ofprinciples ~~operations~~used and significant estimates made by management, oras well ~~cash~~as ~~flows.~~evaluating ~~The~~the ~~Company~~overall ~~has~~consolidated ~~not~~financial ~~hedged~~statement ~~its~~presentation. ~~exposure~~We tobelieve ~~interest~~that ~~rate~~our ~~fluctuations~~audits provide a reasonable basis for our opinion.

~~Foreign~~In our ~~Currency~~opinion, the consolidated financial statements referred to above present ~~Risk~~fairly, in all material respects, the consolidated financial position of Williams Controls, Inc. as of September 30, 2012 and 2011, and the consolidated results of its operations and its cash flows for each of the three years in the period ended September 30, 2012, in conformity with accounting principles generally accepted in the United States of America.

We/s/ ~~sell~~Moss ~~our products primarily to customers in the heavy truck, transit~~Adams ~~bus and off-road equipment industries. For the fiscal years ended September 30,~~LLP ~~2011 and 2010~~Portland, ~~the Company had foreign sales of approximately 45% and 41% of net~~Oregon ~~sales,~~December ~~respectively. All worldwide sales in fiscal 2011 and 2010~~12, with the exception of $3,486 and $2,874, respectively, were denominated in U.S. dollars. We have a manufacturing facility in Suzhou, China and sales offices in Shanghai, China and Munich, Germany, and during the latter part of fiscal 2010, we established a manufacturing facility in Pune, India. We purchase components internationally for use in all of our manufacturing facilities. These sales are denominated in U.S. dollars and other currencies. Although the Company is expanding its international exposure, it does not believe that changes in future exchange rates would have a material effect on its financial position, results of operations, or cash flows at this time. As a result, the Company has not entered into forward exchange or option contracts for transactions to hedge against foreign currency risk. The Company will continue to assess its foreign currency risk as its international operations, international purchases and sales increase. 2012

~~Investment Risk~~ 24

~~The~~Williams ~~Company does not use derivative financial or commodity instruments. The Company’s financial instruments include cash and cash equivalents~~Controls, ~~accounts receivable, accounts payable and long-term obligations~~Inc. ~~The Company’s cash and~~ ~~cash~~Consolidated ~~equivalents,~~Balance ~~accounts receivable and accounts payable balances are~~Sheets ~~short-term~~(Dollars in ~~nature~~thousands, ~~and,~~except ~~thus,~~per ~~the~~share ~~Company believes they are not exposed to material investment risk.~~information)


	September 30, 2012			September 30, 2011
ASSETS
Current Assets:
Cash and cash equivalents	$	1,750		$	1,339
Trade accounts receivable, net		10,517			10,561
Other accounts receivable		1,098			944
Inventories		9,036			11,334
Deferred income taxes		684			847
Prepaid expenses and other current assets		1,134			552
Total current assets		24,219			25,577

Property, plant and equipment, net		8,713			9,446
Deferred income taxes		3,173			3,181
Other assets, net		313			337
Total assets	$	36,418		$	38,541

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Revolving loan facility	$	961		$	1,575
Accounts payable		4,725			5,599
Accrued expenses		4,748			5,536
Current portion of employee benefit obligations		200			201
Total current liabilities		10,634			12,911

Long-term Liabilities:
Employee benefit obligations		9,027			8,069
Other long-term liabilities		86			126

Commitments and contingencies

Stockholders’ Equity:
Preferred stock ($.01 par value, 50,000,000 authorized) Series C (No shares were issued and outstanding at September 30, 2012 and 2011, respectively)		—			—
Common stock ($.01 par value, 12,500,000 authorized; 7,377,237 and 7,302,339 issued and outstanding at September 30, 2012 and 2011, respectively)		74			73
Additional paid-in capital		39,015			38,521
Accumulated deficit		(11,309	)		(11,108	)
Treasury stock (332,595 shares at September 30, 2012 and 2011)		(2,734	)		(2,734	)
Accumulated other comprehensive loss		(8,375	)		(7,317	)
Total stockholders’ equity		16,671			17,435
Total liabilities and stockholders’ equity	$	36,418		$	38,541

~~ITEM~~See 8.accompanying ~~FINANCIAL~~notes ~~STATEMENTS~~to ~~AND~~Consolidated Financial ~~SUPPLEMENTARY DATA~~Statements.

~~Williams Controls, Inc.Index to Consolidated Financial Statements~~ 25

		Page
Report of Independent Registered Public Accounting Firm		25
Consolidated Balance Sheets at September 30, 2011 and 2010		26
Consolidated Statements of Operations for the years ended September 30, 2011, 2010 and 2009		27
Consolidated Statements of Comprehensive Income (Loss) for the years ended September 30, 2011, 2010 and 2009		28
Consolidated Statements of Stockholders’ Equity for the years ended September 30, 2011, 2010 and 2009		29
Consolidated Statements of Cash Flows for the years ended September 30, 2011, 2010 and 2009		30
Notes to Consolidated Financial Statements		31

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

See pages 56-57 for Index to Exhibits


	For the year ended September 30,
	2012			2011			2010
Net sales	$	64,372		$	61,859		$	52,266
Cost of sales		45,171			42,549			37,446

Gross profit		19,201			19,310			14,820

Operating expenses
Research and development		4,527			4,835			4,505
Selling		3,036			2,855			2,836
Administration		5,821			6,560			5,480
Class action settlement		—			—			775
Total operating expenses		13,384			14,250			13,596

Operating income		5,817			5,060			1,224

Other (income) expenses:
Interest income		(9	)		(5	)		(13	)
Interest expense		129			81			17
Gain on sale of investments		—			—			(441	)
Other (income) expense, net		89			211			(54	)
Total other (income) expenses		209			287			(491	)

Income before income taxes		5,608			4,773			1,715
Income tax expense		2,244			1,439			338

Net income	$	3,364		$	3,334		$	1,377

Net income per common share – basic	$	0.45		$	0.46		$	0.19

Weighted average shares used in per share calculation – basic		7,330,998			7,296,490			7,276,544

Net income per common share – diluted	$	0.44		$	0.45		$	0.19

Weighted average shares used in per share calculation – diluted		7,505,925			7,471,215			7,387,939

24See accompanying notes to Consolidated Financial Statements.

~~REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~26

ToWilliams ~~the~~Controls, ~~Stockholders~~Inc. Consolidated ~~and~~Statements ~~Board~~ of ~~Directors~~Comprehensive Income ~~ofWilliams~~(Dollars ~~Controls,~~in ~~Inc.:~~thousands)

We have audited the accompanying consolidated balance sheets of Williams Controls, Inc. as of September 30, 2011 and 2010 and the related consolidated statements of operations, comprehensive income (loss), stockholders' equity and cash flows for each of the years in the three-year period ended September 30, 2011. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.


	For the year ended September 30,
	2012			2011		2010
Net income	$	3,364		$	3,334	$	1,377
Change in pension liability adjustment, net of tax of ($641), ($21), and ($214) in 2012, 2011 and 2010, respectively		(1,093	)		10		(352	)
Unrealized gain, net of tax of $0, $0 and ($88) in 2012, 2011 and 2010, respectively		—			—		(147	)
Foreign currency translation adjustments, net of tax of $13, $0 and $0 in 2012, 2011 and 2010, respectively		35			194		94

Comprehensive income	$	2,306		$	3,538	$	972

WeSee ~~conducted~~accompanying ~~our~~notes ~~audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits~~ to ~~obtain reasonable assurance about whether the~~Consolidated ~~consolidated~~Financial ~~financial statements are free of material misstatement~~Statements. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits include consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Williams Controls, Inc. as of September 30, 2011 and 2010, and the consolidated results of its operations and its cash flows for each of the years in the three-year period ended September 30, 2011, in conformity with accounting principles generally accepted in the United States of America. 27

~~/s/~~Williams ~~Moss~~Controls, ~~Adams~~Inc. Consolidated Statements ~~LLPPortland,~~of Stockholders’ Equity ~~OregonDecember~~(Dollars ~~20,~~in ~~2011~~thousands)


						Additional Paid-in Capital			Accumulated Deficit			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Stockholders’ Equity


	Common Stock
	Shares			Amount
Balance, September 30, 2009		7,270,820		$	73	$	36,643		$	(6,776	)	$	(2,734	)	$	(7,116	)	$	20,090

Net income		—			—		—			1,377			—			—			1,377
Exercise of stock options		15,833			—		73			—			—			—			73
Share based compensation		3,092			—		907			—			—			—			907
Cash dividend payment		—			—		—			(7,278	)		—			—			(7,278	)
Foreign currency translation adjustment		—			—		—			—			—			94			94
Change in pension liability adjustment, net of tax		—			—		—			—			—			(352	)		(352	)
Unrealized loss, net of tax		—			—		—			—			—			(147	)		(147	)
Balance, September 30, 2010		7,289,745			73		37,623			(12,677	)		(2,734	)		(7,521	)		14,764

Net income		—			—		—			3,334			—			—			3,334
Exercise of stock options		5,520			—		29			—			—			—			29
Share based compensation		2,461			—		819			—			—			—			819
Common stock issuance		4,613			—		50			—			—			—			50
Cash dividend payment		—			—		—			(1,765	)		—			—			(1,765	)
Foreign currency translation adjustment		—			—		—			—			—			194			194
Change in pension liability adjustment, net of tax		—			—		—			—			—			10			10
Balance, September 30, 2011		7,302,339			73		38,521			(11,108	)		(2,734	)		(7,317	)		17,435

Net income		—			—		—			3,364			—			—			3,364
Correction of outstanding share count		(21,868	)		—		—			—			—			—			—
Exercise of stock options		101,136			—		66			—			—			—			66
Tax withholdings related to stock option exercise		(27,070	)				(225	)											(225	)
Share based compensation		28,470			1		717			—			—			—			718
Tax withholdings related to vesting of restricted stock awards		(5,770	)				(64	)											(64	)
Cash dividend payment		—			—		—			(3,565	)		—			—			(3,565	)
Foreign currency translation adjustment, net of tax		—			—		—			—			—			35			35
Change in pension liability adjustment, net of tax		—			—		—			—			—			(1,093	)		(1,093	)
Balance, September 30, 2012		7,377,237		$	74	$	39,015		$	(11,309	)	$	(2,734	)	$	(8,375	)	$	16,671

~~Williams~~See ~~Controls, Inc.Consolidated~~accompanying ~~Balance~~notes ~~Sheets(Dollars~~to inConsolidated Financial ~~thousands, except per share information)~~ Statements.

	September 30,			September 30,
	2011			2010
ASSETS
Current Assets:
Cash and cash equivalents	$	1,339		$	3,016
Trade accounts receivable, net		10,561			8,854
Other accounts receivable		944			599
Inventories		11,334			7,512
Deferred income taxes		847			927
Prepaid expenses and other current assets		552			341
Total current assets		25,577			21,249
Property, plant and equipment, net		9,446			9,025
Deferred income taxes		3,181			3,493
Other assets, net		337			438
Total assets	$	38,541		$	34,205
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Revolving loan facility	$	1,575		$	-
Accounts payable		5,599			4,593
Accrued expenses		5,536			5,698
Current portion of employee benefit obligations		201			212
Total current liabilities		12,911			10,503
Long-term Liabilities:
Employee benefit obligations		8,069			8,694
Other long-term liabilities		126			244
Commitments and contingencies
Stockholders’ Equity:
Preferred stock ($.01 par value, 50,000,000 authorized)
Series C (No shares were issued and outstanding at September 30,
2011 and 2010, respectively)		-			-
Common stock ($.01 par value, 12,500,000 authorized;
7,302,339 and 7,289,745 issued and outstanding at
September 30, 2011 and 2010, respectively)		73			73
Additional paid-in capital		38,521			37,623
Accumulated deficit		(11,108	)		(12,677	)
Treasury stock (332,593 shares at September 30, 2011 and 2010)		(2,734	)		(2,734	)
Accumulated other comprehensive loss		(7,317	)		(7,521	)
Total stockholders’ equity		17,435			14,764
Total liabilities and stockholders’ equity	$	38,541		$	34,205

~~See~~Williams ~~accompanying~~Controls, ~~notes~~Inc. Consolidated toStatements ~~Consolidated~~of Cash Flows ~~Financial~~(Dollars ~~Statements.~~in thousands)


	For the year ended September 30,
	2012			2011			2010
Cash flows from operating activities:
Net income	$	3,364		$	3,334		$	1,377
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		2,100			2,263			2,137
Deferred income taxes		908			414			(520	)
Share based compensation		717			819			907
Gain from sale of available-for-sale securities		—			—			(441	)
Gain from stock settlement of environmental claims		—			—			(19	)
(Gain) loss from sale and disposal of fixed assets		10			2			(16	)
Changes in operating assets and liabilities:
Receivables, net		(110	)		(2,052	)		(1,267	)
Inventories		2,298			(3,822	)		(1,973	)
Prepaid expenses and other current assets		(582	)		(211	)		(72	)
Accounts payable and accrued expenses		(2,062	)		992			2,821
Other		(734	)		(453	)		(254	)

Net cash provided by operating activities		5,909			1,286			2,680

Cash flows from investing activities:
Property, plant and equipment purchases		(1,386	)		(2,803	)		(2,238	)
Proceeds from sale of property, plant and equipment		—			1			23
Proceeds from sale of available-for-sale securities		—			—			511

Net cash used in investing activities		(1,386	)		(2,802	)		(1,704	)

Cash flows from financing activities:
Cash dividend on common stock		(3,565	)		(1,765	)		(7,278	)
Borrowings on revolving loan facility		14,856			11,423			—
Payments on revolving loan facility		(15,470	)		(9,848	)		—
Issuance of common stock		67			29			73

Net cash used in financing activities		(4,112	)		(161	)		(7,205	)

Net increase (decrease) in cash and cash equivalents		411			(1,677	)		(6,229	)
Cash and cash equivalents at beginning of year		1,339			3,016			9,245

Cash and cash equivalents at end of year	$	1,750		$	1,339		$	3,016

Supplemental disclosure of cash flow information:
Interest paid	$	31		$	45		$	—
Income taxes paid		2,347			988			505

Supplemental disclosure of non-cash investing and financing activities:
Pension liability adjustment, net of tax	$	(1,093	)	$	10		$	(352	)

~~Williams~~See ~~Controls, Inc.Consolidated~~accompanying ~~Statements~~notes ofto ~~Operations(Dollars in thousands, except share and per share information)~~Consolidated Financial Statements.

	For the year ended September 30,
	2011			2010			2009
Net sales	$	61,859		$	52,266		$	38,809
Cost of sales		42,638			37,446			30,173
Gross profit		19,221			14,820			8,636
Operating expenses
Research and development		4,746			4,505			3,981
Selling		2,855			2,836			2,425
Administration		6,560			5,480			5,522
Class action settlement		-			775			-
Total operating expenses		14,161			13,596			11,928
Operating income (loss)		5,060			1,224			(3,292	)
Other (income) expenses:
Interest income		(5	)		(13	)		(26	)
Interest expense		81			17			19
Gain on sale of investments		-			(441	)		-
Loss on impairment of investments		-			-			317
Other (income) loss, net		211			(54	)		84
Total other (income) expenses		287			(491	)		394
Income (loss) before income taxes		4,773			1,715			(3,686	)
Income tax (benefit) expense		1,439			338			(1,677	)
Net income (loss)	$	3,334		$	1,377		$	(2,009	)
Net income (loss) per common share – basic	$	0.46		$	0.19		$	(0.27	)
Weighted average shares used in per share calculation – basic		7,296,490			7,276,544			7,315,343
Net income (loss) per common share – diluted	$	0.45		$	0.19		$	(0.27	)
Weighted average shares used in per share calculation – diluted		7,471,215			7,387,939			7,315,343

~~See accompanying notes~~ Notes to Consolidated Financial Statements. Years Ended September 30, 2012, 2011 and 2010 (Dollars in thousands, except share and per share amounts)

27Note 1. Organization and Basis of Presentation

~~Williams Controls, Inc.Consolidated Statements of Comprehensive Income (Loss)(Dollars in thousands)~~Organization:

	For the year ended September 30,
	2011		2010			2009
Net income (loss)	$	3,334	$	1,377		$	(2,009	)
Change in pension liability adjustment, net of tax of ($21),
($214), and ($1,387) in 2011, 2010 and 2009, respectively		10		(352	)		(2,271	)
Unrealized (gain) loss, net of tax of $0, ($88) and $126 in 2011,
2010 and 2009, respectively		-		(147	)		214
Foreign currency translation adjustments		194		94			6
Comprehensive income (loss)	$	3,538	$	972		$	(4,060	)

Williams Controls, Inc., including its wholly-owned subsidiaries as follows, is hereinafter referred to as the “Company,” “Registrant,” “we,” “our,” or “us.”

~~See~~ The Company’s ~~accompanying~~active ~~notes~~wholly-owned tosubsidiaries ~~Consolidated~~are: Williams Controls Industries, ~~Financial~~Inc. ~~Statements~~(“Williams”); Williams (Suzhou) Controls Co. Ltd. (“Williams Controls Asia”); Williams Controls Europe GmbH (“Williams Controls Europe”); and Williams Controls India Private Limited (“Williams Controls India”)

28Basis of Presentation:

~~Williams~~ The consolidated financial statements include all of the accounts of Williams Controls, Inc.~~Consolidated~~ ~~Statements~~and ofits subsidiaries. All significant inter-company balances and ~~Stockholders’~~transactions ~~Equity(Dollars~~have been eliminated in ~~thousands)~~consolidation.

														Accumulated
														Other
						Additional								Comprehensive
	Common Stock					Paid-in		Accumulated			Treasury			Income			Stockholders’
	Shares		Amount			Capital		Deficit			Stock			(Loss)			Equity
Balance, September 30, 2008	7,534,642		$	75		$	35,744	$	(4,729	)	$	(377	)	$	(5,065	)	$	25,648
Net loss	-			-			-		(2,009	)		-			-			(2,009	)
Exercise of stock options	41,666			-			165		-			-			-			165
Share based compensation	5,405			-			732		-			-			-			732
Repurchase of common
stock	(310,893	)		(2	)		2		-			(2,357	)		-			(2,357	)
Foreign currency translation
adjustment	-			-			-		-			-			6			6
Change in pension liability
adjustment, net of tax	-			-			-		-			-			(2,271	)		(2,271	)
Unrealized gain, net of tax	-			-			-		-			-			214			214
Effect of changing pension
plan measurement date	-			-			-		(38	)		-			-			(38	)
Balance, September 30, 2009	7,270,820			73			36,643		(6,776	)		(2,734	)		(7,116	)		20,090
Net income	-			-			-		1,377			-			-			1,377
Exercise of stock options	15,833			-			73		-			-			-			73
Share based compensation	3,092			-			907		-			-			-			907
Cash dividend payment	-			-			-		(7,278	)		-			-			(7,278	)
Foreign currency translation
adjustment	-			-			-		-			-			94			94
Change in pension liability
adjustment, net of tax	-			-			-		-			-			(352	)		(352	)
Unrealized loss, net of tax	-			-			-		-			-			(147	)		(147	)
Balance, September 30, 2010	7,289,745			73			37,623		(12,677	)		(2,734	)		(7,521	)		14,764
Net income	-			-			-		3,334			-			-			3,334
Exercise of stock options	5,520			-			29		-			-			-			29
Share based compensation	2,461			-			819		-			-			-			819
Common stock issuance	4,613			-			50		-			-			-			50
Cash dividend payment	-			-			-		(1,765	)		-			-			(1,765	)
Foreign currency translation
adjustment	-			-			-		-			-			194			194
Change in pension liability
adjustment, net of tax	-			-			-		-			-			10			10
Balance, September 30, 2011	7,302,339		$	73		$	38,521	$	(11,108	)	$	(2,734	)	$	(7,317	)	$	17,435

The preparation of consolidated financial statements in conformity with US generally accepted accounting principles requires management to make estimates and assumptions, based upon all known facts and circumstances, that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of issuance of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ materially from these estimates. Estimates are used in accounting for, among other things, allowance for doubtful accounts, excess and obsolete inventory, useful lives for depreciation and amortization, future cash flows associated with impairment testing for long-lived assets, pension and post-retirement benefit obligations, product warranty, share-based compensation expense, income taxes and commitments and contingencies.

~~See~~Concentration of ~~accompanying~~Risk ~~notes~~and toSales ~~Consolidated Financial~~by ~~Statements.~~ Customer:

29 For the years ended September 30, 2012, 2011 and 2010, The Volvo Group accounted for 17%, 19% and 16%; Paccar, Inc. accounted for 13%, 11% and 9%; Caterpillar, Inc. accounted for 10%, 8% and 7% and Daimler Trucks NA accounted for 9%, 8% and 8%,of net sales from operations, respectively. Approximately 41%, 45% and 41% of net sales in fiscal 2012, 2011 and 2010 respectively, were to customers outside of the United States, primarily in Belgium, Canada, China, France, Korea, Mexico and Sweden, and, to a lesser extent, in other European countries, South America, Pacific Rim nations and Australia. At September 30, 2012 and 2011, The Volvo Group represented 24% and 24%, Caterpillar, Inc. represented 14% and 11%, Paccar, Inc. represented 10% and 6%, Hyundai Motors represented 6% and 4%, Bendix Commercial Vehicle Systems represented 6% and 7%, Daimler Trucks NA represented 5% and 6%, and Navistar International Corporation represented 4% and 9% of trade accounts receivable, respectively.

~~Williams Controls,~~Subsequent ~~Inc.Consolidated Statements of Cash Flows(Dollars in thousands)~~ Event:

	For the year ended September 30,
	2011			2010			2009
Cash flows from operating activities:
Net income (loss)	$	3,334		$	1,377		$	(2,009	)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depreciation and amortization		2,263			2,137			1,996
Deferred income taxes		414			(520	)		(444	)
Share based compensation		819			907			732
Loss on impairment of investments		-			-			317
Gain from sale of available-for-sale securities		-			(441	)		-
Gain from stock settlement of environmental claims		-			(19	)		-
(Gain) loss from sale and disposal of fixed assets		2			(16	)		80
Changes in operating assets and liabilities:
Receivables, net		(2,052	)		(1,267	)		2,241
Inventories		(3,822	)		(1,973	)		2,676
Prepaid expenses and other current assets		(211	)		(72	)		32
Accounts payable and accrued expenses		992			2,821			(1,680	)
Other		(453	)		(254	)		297
Net cash provided by operating activities		1,286			2,680			4,238
Cash flows from investing activities:
Property, plant and equipment purchases		(2,803	)		(2,238	)		(1,876	)
Proceeds from sale of property, plant and equipment		1			23			15
Proceeds from sale of available-for-sale securities		-			511			-
Net cash used in investing activities		(2,802	)		(1,704	)		(1,861	)
Cash flows from financing activities:
Cash dividend on common stock		(1,765	)		(7,278	)		-
Borrowings on revolving loan facility		1,575			-			-
Repurchase of common stock		-			-			(2,357	)
Net proceeds from exercise of stock options		29			73			165
Net cash used in financing activities		(161	)		(7,205	)		(2,192	)
Net increase (decrease) in cash and cash equivalents		(1,677	)		(6,229	)		185
Cash and cash equivalents at beginning of year		3,016			9,245			9,060
Cash and cash equivalents at end of year	$	1,339		$	3,016		$	9,245
Supplemental disclosure of cash flow information:
Interest paid	$	45		$	-		$	4
Income taxes paid		988			505			171
Supplemental disclosure of non-cash investing and financing
activities:
Pension liability adjustment	$	10		$	(352	)	$	(2,271	)

In November 2012, subsequent to the September 30, 2012 fiscal year-end, the Company announced it had entered into a Merger Agreement with Curtiss Wright Corporation (“Curtiss-Wright) whereby Curtiss-Wright agreed to acquire all of the Company’s outstanding shares of common stock in a cash tender offer of $15.42 per share (the “Tender Offer”). The Tender Offer commenced on November 15, 2012, and is currently scheduled to expire on December 13, 2012, unless otherwise extended.

~~See accompanying notes to Consolidated Financial Statements.~~ 30

30Note 2. Significant Accounting Policies

~~Notes to~~Cash ~~Consolidated Financial Statements Years Ended September 30, 2011, 2010~~ and ~~2009~~ ~~(Dollars~~Cash ~~in thousands, except share and per share amounts)~~Equivalents:

~~Note~~ Cash and 1cash equivalents include highly liquid investments with original maturities of three months or less. ~~Organization~~At September 30, 2012, cash and cash equivalents ~~Basis~~primarily consisted of ~~Presentation~~cash deposits held in one major U.S. financial institution. At September 30, 2012, approximately 61% of the Company’s cash and cash equivalents were held with one major financial institution in the United States with the remainder held in foreign banks or foreign currency denominated accounts. The Company maintains cash balances in bank accounts that normally exceed FDIC insured limits. As of September 30, 2012, cash and cash equivalents held in the United States exceeded federally insured limits by approximately $818. The Company has not experienced any losses related to its cash concentration.

~~Organization~~Trade Accounts Receivable:

~~Williams~~ Trade accounts ~~Controls~~receivable are stated at the invoiced amount, ~~Inc.~~less allowances for doubtful accounts, ~~including~~which ~~its~~approximates ~~wholly-owned~~fair ~~subsidiaries~~value asgiven their short-term nature. ~~follows,~~Collectability of trade accounts receivable is ~~hereinafter~~regularly ~~referred~~reviewed and is based upon managements’ knowledge of customers and compliance with credit terms. The Company provides an allowance for doubtful accounts equal to asthe estimated uncollectible amounts. The Company’s estimate is based on historical collection experience and a review of the “current status of trade accounts receivable. It is reasonably possible that the Company,”’s ~~“Registrant,”~~estimate ~~“we,”~~of ~~“our,”~~the allowance for ordoubtful ~~“us~~accounts will change.” Activity related to the allowance for doubtful accounts for years ended September 30, 2012 and 2011 consisted of the following:

The Company’s active wholly-owned subsidiaries are: Williams Controls Industries, Inc. (“Williams”); Williams (Suzhou) Controls Co. Ltd. (“Williams Controls Asia”); Williams Controls Europe GmbH (“Williams Controls Europe”); and Williams Controls India Private Limited (“Williams Controls India”).


	September 30, 2012			September 30, 2011
Beginning balance	$	204		$	150
Charges to bad debt expense		77			75
Write-offs, recoveries and adjustments		(81	)		(21	)
Ending balance	$	200		$	204

~~Basis of Presentation~~Inventories:

~~The~~ Inventories are ~~consolidated~~valued ~~financial~~at ~~statements include~~the ~~all~~lower of cost or market. Cost is determined using standard costs, which approximate the ~~accounts~~first ofin, ~~Williams~~first ~~Controls~~out, ~~Inc~~or FIFO method. Cost includes the acquisition of purchased components, parts and ~~its~~subassemblies, ~~subsidiaries~~labor and overhead. ~~All~~Market with respect to raw materials is replacement cost and, with ~~significant~~respect ~~inter~~to work-~~company~~in-process ~~balances~~ and ~~transactions~~finished ~~have~~goods, ~~been~~is ~~eliminated~~net inrealizable value. The Company ~~consolidation~~periodically reviews its inventories for excess or slow moving items and makes provisions as necessary to properly reflect inventory value.

~~The preparation of consolidated financial statements in conformity with US generally accepted accounting principles requires management to make estimates and assumptions~~Property, ~~based upon all known~~ ~~facts~~Plant and circumstances, that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of issuance of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ materially from these estimates. Estimates are used in accounting for, among other things, allowance for doubtful accounts, excess and obsolete inventory, useful lives for depreciation and amortization, future cash flows associated with impairment testing for long-lived assets, pension and post-retirement benefit obligations, product warranty, share-based compensation expense, income taxes and commitments and contingencies.Equipment:

~~Concentration~~ Property, plant and equipment are stated at cost, net of ~~Risk~~accumulated depreciation. Plant and ~~Sales~~equipment byis ~~Customer~~depreciated using the straight-line method over the estimated useful lives of the assets. The principal estimated lives are: 31.5 years for buildings, 5 to 12 years for machinery and equipment, and 3 to 5 years for office furniture and equipment. Maintenance and repairs are expensed as incurred.

~~For the years ended September 30, 2011,~~Impairment 2010 and 2009, The Volvo Group accounted for 19%, 16% and 16%; Paccar, Inc. accounted for 11%, 9% and 9%; Daimler Trucks NA accounted for 8%, 8% and 9%, and Caterpillar, Inc. accounted for 8%, 7% and 5% of ~~net~~Long-Lived sales from operations, respectively. Approximately 45%, 41% and 37% of net sales in fiscal 2011, 2010 and 2009 respectively, were to customers outside of the United States, primarily in Belgium, Canada, China, France, Korea, Mexico and Sweden, and, to a lesser extent, in other European countries, South America, Pacific Rim nations and Australia. At September 30, 2011 and 2010, The Volvo Group represented 24% and 25%, Caterpillar, Inc. represented 11% and 9%, Navistar International Corporation represented 9% and 9%, Bendix Commercial Vehicle Systems represented 7% and 6%, Paccar, Inc. represented 6% and 10%, and Daimler Trucks NA represented 6% and 6% of trade accounts receivable, respectively.Assets:

~~Note~~ Management reviews 2long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable. ~~Significant~~Recoverability of these assets is determined by comparing the ~~Accounting~~estimated ~~Policies~~undiscounted future cash flows of the operation to which the assets relate, to the carrying value of such assets. If the carrying value of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying value of the asset exceeds the fair value of the asset. Assets to be disposed of are reported at the lower of the carrying value or fair value less costs to sell.

~~Cash and Cash Equivalents:~~31

~~Cash and cash equivalents include highly~~Deferred ~~liquid~~Income investments with original maturities of three months or less. At September 30, 2011, cash and cash equivalents primarily consisted of cash deposits held in one major U.S. financial institution. At September 30, 2011, approximately 69% of the Company’s cash and cash equivalents were held with one major financial institution in the United States with the remainder held in foreign banks or foreign currency denominated accounts. The Company maintains cash balances in bank accounts that normally exceed FDIC insured limits. As of September 30, 2011, cash and cash equivalents held in the United States exceeded federally insured limits by approximately $670. The Company has not experienced any losses related to its cash concentration.Taxes:

31 Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statement of operations in the period that includes the enactment date. Valuation allowances are established as necessary to reduce deferred tax assets unless realization of the assets is considered more likely than not.

~~Trade Accounts~~Product ~~Receivable~~Warranty:

~~Trade~~ The ~~accounts~~Company ~~receivable~~establishes ~~are~~a ~~stated~~product atwarranty ~~the~~liability ~~invoiced~~based ~~amount,~~on ~~less~~a ~~allowances~~percentage ~~for~~of ~~doubtful~~product ~~accounts,~~sales. ~~which~~The ~~approximates~~liability ~~fair~~is ~~value~~based ~~given~~on ~~their~~historical ~~short-term~~return ~~nature. Collectability~~rates of ~~trade~~products and ~~accounts~~amounts ~~receivable~~for issignificant ~~regularly~~and ~~reviewed~~specific warranty issues, and is ~~based~~included in ~~upon~~accrued ~~managements’~~expenses ~~knowledge~~on ofthe ~~customers~~accompanying ~~and~~consolidated ~~compliance~~balance ~~with credit terms~~sheets. ~~The~~Warranty is ~~Company~~limited ~~provides~~to ana ~~allowance~~specified ~~for~~time ~~doubtful~~period, ~~accounts~~mileage ~~equal~~or tohours ~~the~~of ~~estimated~~use, and varies by ~~uncollectible~~product, ~~amounts~~application and customer. The Company’s ~~estimate~~has isrecorded ~~based~~a onliability, ~~historical collection~~which ~~experience~~in ~~and~~the aopinion ~~review~~ of ~~the~~management, ~~current~~is ~~status~~adequate ofto ~~trade~~cover ~~accounts~~such ~~receivable.~~warranty Itcosts. isWarranty ~~reasonably~~payments ~~possible~~can ~~that~~vary ~~the~~significantly ~~Company’s~~from ~~estimate~~year to year depending on the timing of the ~~allowance~~settlement ~~for~~of ~~doubtful accounts~~warranty ~~will~~claims ~~change~~with customers. ~~Activity~~Following ~~related~~is toa reconciliation of the ~~allowance~~changes ~~for~~in ~~doubtful~~the ~~accounts~~ Company’s warranty liability for the years ended September 30, 2012, 2011 and 2010 ~~consisted of the following:~~.

	September 30,				September 30,
Year ended September 30,		2012			2011			2010
	2011				2010
Balance at beginning of period		$	1,076		$	1,578		$	751
Beginning balance	$	150			$	246
Payments			(684	)		(1,215	)		(557	)
Charges to bad debt expense		75				69
Warranty claims accrued			622			713			1,384
Write-offs, recoveries and
Balance at end of period		$	1,014		$	1,076		$	1,578
adjustments		(21	)			(165	)
Ending balance	$	204			$	150

~~Inventories:~~ The increase in warranty payments between fiscal 2010 and 2011 primarily relates to the timing of payments of warranty claims related to one customer, which were accrued during fiscal 2010.

~~Inventories are valued at the lower of~~Environmental cost or market. Cost is determined using standard costs, which approximate the first in, first out, or FIFO method. Cost includes the acquisition of purchased components, parts and subassemblies, labor and overhead. Market with respect to raw materials is replacement cost and, with respect to work-in-process and finished goods, is net realizable value. The Company periodically reviews its inventories for excess or slow moving items and makes provisions as necessary to properly reflect inventory value.Costs:

~~Property~~ Liabilities for environmental matters are recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, ~~Plant~~or if an amount is likely to fall within a range and no amount within that range ~~Equipment:~~can be determined to be the better estimate, the minimum amount of the range is recorded. Liabilities for environmental matters exclude claims for recoveries from prior owners or operators until it is probable that such recoveries will be realized.

~~Property, plant and equipment are stated~~Revenue ~~at cost, net of accumulated depreciation. Plant and equipment is depreciated using the straight-line method over the estimated useful lives of the assets. The principal estimated lives are~~Recognition: ~~31.5 years for buildings, 5 to 12 years for machinery and equipment, and 3 to 5 years for office furniture and equipment. Maintenance and repairs are expensed as incurred.~~

~~Impairment~~ Revenue is recognized at the time of ~~Long-Lived~~product shipment, which is when title and risk of ~~Assets~~loss transfers to customers, and when all of the following have occurred: a firm sales agreement is in place, pricing is fixed or determinable, and collection is reasonably assured. Revenues are reported net of estimated returns, rebates and customer discounts.

~~Management reviews long-lived assets for~~Research ~~impairment~~and ~~whenever~~Development events or changes in circumstances indicate the carrying amount of such assets may not be recoverable. Recoverability of these assets is determined by comparing the estimated undiscounted future cash flows of the operation to which the assets relate, to the carrying value of such assets. If the carrying value of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying value of the asset exceeds the fair value of the asset. Assets to be disposed of are reported at the lower of the carrying value or fair value less costs to sell.Costs:

~~Deferred~~ Research and ~~Income~~development costs are expensed as incurred. Research and development costs ~~Taxes:~~consist primarily of employee costs, cost of consumed materials, depreciation and engineering related costs.

~~Deferred tax assets and liabilities are~~Pensions ~~recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets~~ and ~~liabilities~~ ~~and~~Post-retirement ~~their~~Benefit respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statement of operations in the period that includes the enactment date. Valuation allowances are established as necessary to reduce deferred tax assets unless realization of the assets is considered more likely than not.Obligations:

~~Product~~ The ~~Warranty:~~Company provides various benefits to certain current and former employees through defined benefit plans and retirement healthcare benefit plans. For financial reporting purposes, net periodic benefit cost and related obligations are calculated using a number of significant actuarial assumptions, including a discount rate assumption, a long-term rate of return on assets assumption and a health care cost growth rate assumption. Changes in net periodic benefit cost and funding status may occur in the future due to changes in these assumptions. The funded status of defined pension and postretirement plans recognized in the statement of financial position is measured as the difference between the fair market value of the plan assets and the benefit obligation. For a defined benefit pension plan, the benefit obligation is the projected benefit obligation; for any other defined benefit postretirement plan, such as a retiree health care plan, the benefit obligation is the accumulated benefit obligation. Any over-funded status is recognized as an asset and any underfunded status is recognized as a liability.

The Company establishes a product warranty liability based on a percentage of product sales. The liability is based on historical return rates of products and amounts for significant and specific warranty issues, and is included in accrued expenses on the accompanying consolidated balance sheets. Warranty is limited to a specified time period, mileage or hours of use, and varies by product, application and customer. The Company has recorded a liability, which in the opinion of management, is adequate to cover such warranty costs. Warranty payments can vary significantly from year to year depending on the timing of the settlement of warranty claims with various customers. Following is a reconciliation of the changes in the Company’s warranty liability for the years ended September 30, 2011, 2010 and 2009.32

32 Projected benefit obligation is the actuarial present value as of the measurement date of all benefits attributed by the plan benefit formula to employee service rendered before the measurement date using assumptions as to future compensation levels if the plan benefit formula is based on those future compensation levels. Accumulated benefit obligation is the actuarial present value of benefits (whether vested or unvested) attributed by the plan benefit formula to employee service rendered before the measurement date and based on employee service and compensation, if applicable, prior to that date. Accumulated benefit obligation differs from projected benefit obligation in that it includes no assumption about future compensation levels.

Year ended September 30,	2011			2010			2009
Balance at beginning of period	$	1,578		$	751		$	762
Payments		(1,215	)		(557	)		(995	)
Warranty claims accrued		713			1,384			984
Balance at end of period	$	1,076		$	1,578		$	751

Earnings (Losses) Per Share:

~~The~~ Basic ~~increase~~earnings inper ~~warranty~~share ~~payments~~(“EPS”) ~~between~~is ~~fiscal~~computed ~~2010~~by ~~and~~dividing ~~2011~~net ~~primarily~~earnings ~~relates~~available to common stockholders by the ~~timing~~weighted-average number of ~~payments~~common shares outstanding, which has been modified to include the effects of ~~warranty~~all participating ~~claims~~securities ~~related~~(unvested restricted stock awards with a right to receive ~~one~~dividends) ~~customer~~as prescribed by the two-class method, ~~which~~during the period. Diluted EPS is computed similarly, but reflects the potential dilution that would occur if dilutive options were exercised and restricted stock awards were ~~accrued~~vested. ~~during~~Basic ~~fiscal~~and diluted EPS were calculated under the treasury method for the year ended September 30, 2010, as no participating securities (restricted stock awards) were granted prior to the year ended September 30, 2011. During the fourth quarter of fiscal 2012, the Company adjusted its outstanding common stock total downward by 21,868 shares to match the outstanding share count from the Company’s transfer agent. This adjustment had no impact on the Company’s consolidated financial condition and results of operations.

~~Environmental~~ Following ~~Costs~~is a reconciliation of basic EPS and diluted EPS:

Liabilities for environmental matters are recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, or if an amount is likely to fall within a range and no amount within that range can be determined to be the better estimate, the minimum amount of the range is recorded. Liabilities for environmental matters exclude claims for recoveries from prior owners or operators until it is probable that such recoveries will be realized.


	Year Ended September 30,
	2012			2011			2010
Basic EPS:
Net income	$	3,364		$	3,334		$	1,377
Less: Dividends paid and income attributable to participating securities		(43	)		(9	)		—
Net income available to common stockholders	$	3,321		$	3,325		$	1,377
Basic weighted average shares outstanding		7,330,998			7,296,490			7,276,544
Basic earnings per share	$	0.45		$	0.46		$	0.19

Diluted EPS:
Net income available to common stockholders	$	3,321		$	3,325		$	1,377
Basic weighted average shares outstanding		7,330,998			7,296,490			7,276,544
Effect of dilutive securities		174,927			174,725			111,395
Diluted weighted average shares outstanding		7,505,925			7,471,215			7,387,939
Diluted earnings per share	$	0.44		$	0.45		$	0.19

~~Revenue~~ At ~~Recognition:~~September 30, 2012, 2011 and 2010, the Company had stock options covering 169,368, 188,406 and 425,232 shares, respectively, which were not considered in the diluted EPS calculation since they would have been antidilutive.

Share ~~Revenue~~Based ~~is recognized at the time of product shipment, which is when title and risk of loss transfers to customers, and when all of the following have occurred~~Compensation: ~~a firm sales agreement is in place, pricing is fixed or determinable, and collection is reasonably assured. Revenues are reported net of estimated returns, rebates and customer discounts.~~

~~Research~~ The Company uses the Black-Scholes option pricing model to value its stock option grants and ~~Development~~intrinsic value for restricted stock grants. Share-based ~~Costs:~~compensation expense is recognized on a straight-line basis over the requisite service period, which equals the vesting period. When determining share-based compensation expense for stock options, the Black-Scholes option pricing model takes into account highly subjective and complex assumptions. The expected life of options granted is derived from the vesting period of the award, as well as historical exercise behavior, and represents the period of time that options granted are expected to be outstanding. Expected volatilities are based on historical volatility looking back over a period equal to the expected life. The risk-free interest rate is equal to the U.S. Treasury constant maturity with a remaining term equal to the expected life of the option on the date of grant. The Company is required to estimate forfeitures in calculating the expense related to share-based compensation. In addition, the Company is also required to reflect the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash inflow.

~~Research and development costs are expensed as incurred. Research and development costs consist primarily of employee costs, cost of consumed materials, depreciation and engineering related costs.~~33

~~Pensions and Post-retirement Benefit Obligations~~Contingencies:

~~The~~ Certain conditions ~~Company~~may ~~provides~~exist ~~various~~as ~~benefits~~of tothe date the financial statements are issued, which ~~certain~~may ~~current~~result ~~and~~in ~~former~~a ~~employees~~loss ~~through~~to ~~defined~~the ~~benefit~~Company ~~plans~~but ~~and~~which will only be resolved when one or ~~retirement~~more ~~healthcare~~future ~~benefit~~events ~~plans~~occur or fail to occur. ~~For~~The ~~financial~~Company’s ~~reporting~~management ~~purposes~~assesses such contingent liabilities, ~~net~~and such assessment inherently involves an ~~periodic~~exercise ~~benefit~~of ~~cost~~judgment. ~~and~~In assessing loss contingencies related ~~obligations~~to legal proceedings that are ~~calculated~~pending ~~using~~against athe ~~number~~Company ofor unasserted claims that may ~~significant~~result ~~actuarial~~in ~~assumptions~~such proceedings, ~~including~~the aCompany’s ~~discount~~management ~~rate~~and ~~assumption~~legal ~~and~~counsel aevaluate ~~long-term~~the ~~rate~~perceived merits of ~~return~~any onlegal ~~assets~~proceedings ~~assumption.~~or ~~Changes~~unasserted inclaims ~~net~~as ~~periodic~~well ~~benefit~~as ~~cost~~the ~~and~~perceived ~~funding~~merits ~~status~~of ~~may~~the ~~occur~~amount inof ~~the~~relief ~~future~~sought ~~due~~or expected to ~~changes~~be ~~in these~~sought ~~assumptions~~therein. ~~The~~If ~~funded~~the ~~status~~assessment of ~~defined~~a ~~pension~~contingency ~~and~~indicates ~~postretirement~~that ~~plans~~it is probable that ~~recognized~~a inmaterial ~~the~~loss ~~statement~~has ofbeen ~~financial~~incurred ~~position~~and isthe ~~measured~~amount asof the ~~difference~~liability can be estimated, ~~between~~then the ~~fair~~estimated ~~market~~liability ~~value~~would ofbe recorded in the ~~plan~~Company’s ~~assets~~financial statements. ~~and~~If the ~~benefit~~assessment ~~obligation.~~indicates ~~For~~ that a ~~defined~~potentially ~~benefit~~material ~~pension~~loss contingency ~~plan,~~is ~~the~~not ~~benefit~~probable ~~obligation~~but is ~~the~~reasonably ~~projected~~possible, ~~benefit~~or is probable but ~~obligation;~~cannot ~~for~~be ~~any~~estimated, ~~other~~then ~~defined~~the ~~benefit~~nature ~~postretirement~~of ~~plan,~~the ~~such~~contingent asliability, atogether ~~retiree~~with ~~health~~an ~~care~~estimate ~~plan,~~of the ~~benefit~~range ~~obligation~~of ispossible ~~the~~loss ~~accumulated~~if ~~benefit~~determinable ~~obligation. Any~~and ~~over-funded~~material, ~~status~~would be isdisclosed. ~~recognized~~All aslegal ancosts ~~asset~~to ~~and~~defend ~~any~~against ~~underfunded~~such ~~status~~contingent isliabilities are ~~recognized~~expensed as ~~a liability~~incurred.

~~Projected benefit obligation is the~~Fair ~~actuarial~~Value ~~present value as~~ of ~~the~~Financial measurement date of all benefits attributed by the plan benefit formula to employee service rendered before the measurement date using assumptions as to future compensation levels if the plan benefit formula is based on those future compensation levels. Accumulated benefit obligation is the actuarial present value of benefits (whether vested or unvested) attributed by the plan benefit formula to employee service rendered before the measurement date and based on employee service and compensation, if applicable, prior to that date. Accumulated benefit obligation differs from projected benefit obligation in that it includes no assumption about future compensation levels.Instruments:

33 The carrying amounts reflected in the accompanying consolidated balance sheet for cash and cash equivalents, accounts receivable, other accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses, and revolving debt approximate fair value due to the short-term nature of the instruments.

~~Earnings (Losses) Per~~Foreign ~~Share~~Currency Translation:

~~Basic~~ Assets and ~~earnings~~liabilities ~~per~~of ~~share (“EPS”) is computed by dividing net earnings available to common stockholders by the weighted~~non-~~average~~domestic ~~number~~subsidiaries ofdenominated ~~common~~in ~~shares~~local ~~outstanding~~currencies are ~~which~~translated ~~has~~into ~~been~~U.S. ~~modified~~dollars toat ~~include~~ the ~~effects~~rate of ~~all~~exchange ~~participating~~at ~~securities (unvested restricted stock awards with a right to receive dividends) as prescribed by~~ the ~~two-class~~balance ~~method,~~sheet date ~~during the period. Diluted EPS is computed similarly, but reflects the potential dilution that would occur if dilutive options were exercised~~ and ~~restricted~~income ~~stock awards were vested. Basic~~ and ~~diluted~~expenses ~~EPS~~are ~~were~~translated ~~calculated~~at ~~under~~ the ~~treasury~~average ~~method~~rates ~~for~~of ~~the~~exchange prevailing ~~years~~during ~~ended~~the ~~September~~year. ~~30,~~The ~~2010~~resulting ~~and~~translation ~~2009,~~adjustments are reported as noa ~~participating~~component ~~securities~~of ~~(restricted~~accumulated ~~stock~~other ~~awards)~~comprehensive ~~were~~loss ~~granted~~in ~~prior~~stockholders’ ~~to the year ended September 30, 2011~~equity.

~~Following~~Note is3. ~~a reconciliation of basic EPS and diluted EPS:~~Inventories

	Year Ended
	September 30,
	2011			2010		2009
Basic EPS:
Net income (loss)	$	3,334		$	1,377	$	(2,009	)
Less: Dividends paid and income attributable to
participating securities		(9	)		-		-
Net income (loss) available to common stockholders	$	3,325		$	1,377	$	(2,009	)
Basic weighted average shares outstanding		7,296,490			7,276,544		7,315,343
Basic earnings per share	$	0.46		$	0.19	$	(0.27	)
Diluted EPS:
Net income (loss) available to common stockholders	$	3,325		$	1,377	$	(2,009	)
Basic weighted average shares outstanding		7,296,490			7,276,544		7,315,343
Effect of dilutive securities		174,725			111,395		-
Diluted weighted average shares outstanding		7,471,215			7,387,939		7,315,343
Diluted earnings per share	$	0.45		$	0.19	$	(0.27	)

Inventories consist of the following at September 30:

At September 30, 2011, 2010 and 2009, the Company had stock options covering 188,406, 425,232 and 598,769 shares, respectively, which were not considered in the diluted EPS calculation since they would have been antidilutive.


	2012		2011
Raw material	$	6,351	$	8,549
Work in process		66		62
Finished goods		2,619		2,723
	$	9,036	$	11,334

~~Share~~Note ~~Based Compensation:~~4. Property, Plant and Equipment

The Company uses the Black-Scholes option pricing model to value its stock option grants and intrinsic value for restricted stock grants. Share-based compensation expense is recognized on a straight-line basis over the requisite service period Property, ~~which equals the vesting~~ ~~period.~~plant ~~When determining share-based compensation expense for stock options, the Black-Scholes option pricing model takes into account highly subjective~~ and ~~complex~~ ~~assumptions.~~equipment ~~The~~consist ~~expected life~~ of ~~options granted is derived from~~ the ~~vesting~~ ~~period~~following ofat ~~the~~September award, as well as historical exercise behavior, and represents the period of time that options granted are expected to be outstanding. Expected volatilities are based on historical volatility looking back over a period equal to the expected life. The risk-free interest rate is equal to the U.S. Treasury constant maturity with a remaining term equal to the expected life of the option on the date of grant. The Company is required to estimate forfeitures in calculating the expense related to share-based compensation. In addition, the Company is also required to reflect the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash inflow.30:

Contingencies:


	2012			2011
Land and land improvements	$	828		$	828
Buildings		4,962			4,936
Machinery and equipment		16,408			15,123
Office furniture, computers & software		5,495			5,420
Construction in progress		1,592			1,862
		29,285			28,169
Less accumulated depreciation		(20,572	)		(18,723	)
	$	8,713		$	9,446

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s management and legal counsel evaluate the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be recorded in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. All legal costs to defend against such contingent liabilities are expensed as incurred.34

34 Depreciation expense for the years ended September 30, 2012, 2011 and 2010 was $2,100, $2,263 and $2,137, respectively.

~~Fair~~Note ~~Value~~5. ofAccrued ~~Financial Instruments:~~expenses

~~The~~ Accrued ~~carrying amounts reflected in the accompanying consolidated balance sheet for cash and cash equivalents, accounts receivable, other accounts receivable, prepaid~~ expenses ~~and~~consist ~~other~~of ~~current assets, accounts payable, and accrued expenses approximate fair value due to~~ the ~~short-term~~following ~~nature~~at ofSeptember ~~the instruments.~~30:

Foreign Currency Translation:


	2012		2011
Environmental liability	$	625	$	869
Accrued product warranty		1,014		1,076
Accrued compensation and benefits		2,274		2,262
Income tax payable		74		750
Other		761		579
	$	4,748	$	5,536

~~Assets and liabilities of non-domestic~~ For ~~subsidiaries~~further ~~denominated~~discussion inrelated ~~local~~to ~~currencies~~the ~~are~~Company’s ~~translated~~environmental ~~into~~liability, ~~U.S. dollars at~~product ~~the~~warranty ~~rate~~liability ~~of exchange at the balance sheet date~~ and income ~~and~~tax ~~expenses~~payable, ~~are translated~~refer atto ~~the~~Notes ~~average~~10, ~~rates~~2 ofand ~~exchange prevailing during the year. The~~9, ~~resulting translation adjustments are reported as a component of accumulated other comprehensive loss in stockholders’ equity~~respectively.

~~Recently~~Note ~~Adopted Accounting~~6. ~~Standards:~~Fair Value Measurement

~~In June 2011, the FASB issued~~ Financial ~~authoritative~~assets ~~guidance~~and ~~that~~liabilities ~~revises~~recorded ~~the~~at ~~manner~~fair invalue ~~which entities present comprehensive income~~ in ~~their~~the ~~financial~~consolidated ~~statements.~~balance ~~The guidance requires~~sheet ~~entities~~are tocategorized ~~report~~based ~~comprehensive~~upon ~~income in either~~ a ~~single,~~fair ~~continuous~~value ~~statement or~~hierarchy ~~two~~established ~~separate~~by ~~but consecutive statements~~U.S. ~~This guidance will become effective for fiscal years beginning after December 15~~GAAP, ~~2011; however, the Company has~~ ~~early~~which ~~adopted~~prioritizes ~~this guidance as of~~ the ~~end~~inputs ofused ~~its~~to ~~fiscal~~measure ~~2011~~fair ~~reporting~~value ~~period~~into ~~as permitted by~~ the ~~guidance. The adoption of this new guidance had no impact on~~following ~~the Company’s consolidated financial condition and results of operations.~~levels:

In May 2011, the FASB issued authoritative guidance to amend the fair value measurement and disclosure requirements. The guidance requires the disclosure of quantitative information about unobservable inputs used, a description of the valuation processes used and a qualitative discussion around the sensitivity of the measurements. The guidance will become effective for the Company at the beginning of its second quarter of fiscal 2012. The Company expects adoption to have no impact on the Company’s consolidated financial condition and results of operations.


	Level 1 –	observable inputs such as quoted prices in active markets for identical assets or liabilities;

	Level 2 –	inputs, other than the quoted market prices in active markets, which are observable, either directly or indirectly; and

	Level 3 –	unobservable inputs for which there is little or no market data available, which require the reporting entity to develop its own assumptions.

~~Note~~ Financial assets 3and liabilities measured at fair value on a recurring basis as of September 30, 2012 included cash and cash equivalents of $1,750, which were considered level 1 assets. We use a market approach to determine the fair value ~~Inventories~~of cash and cash equivalents, which include highly liquid investments with original maturities of three months or less. There were no assets and liabilities measured at fair value on a nonrecurring basis as of September 30, 2012.

~~Inventories~~ During the ~~consist~~third quarter of fiscal 2010, the ~~following~~Company atsold its short-term investments ~~September~~for ~~30:~~cash proceeds of $511 and recorded a $441 net gain related to the sale. The majority of the shares sold related to the Company’s investment in Dana Holding CP (“Dana”) as part of the environmental settlement discussed in Note 10. Before the sale of short-term investments, all changes in market value of the Company’s short-term investments had been recorded net of tax in other comprehensive income (loss), except that in the first quarter of fiscal 2009, the Company recorded a non-cash, mark-to-market impairment charge of approximately $317 relating to its investment in Dana. The decision to record the impairment charge was based on the continued decline in the market value of the Dana stock, as well as the contraction of the market in which Dana operated.

	2011		2010
Raw material	$	8,549	$	5,767
Work in process		62		55
Finished goods		2,723		1,690
	$	11,334	$	7,512

Note 7. Debt

35 In September 2012, the Company amended its revolving loan facility with U.S. Bank, which now matures on June 30, 2014. The amended revolving loan facility provides for $15,000 in borrowing capacity and is secured by substantially all the assets of the Company. The interest rate under the new agreement is 1.75% plus the 1,2,3,6 or 12 month LIBOR rate. The Company is subject to a quarterly and annual financial covenant under the revolving loan facility. At September 30, 2012, the Company was in compliance with its financial covenant.

~~Note 4. Property, Plant and Equipment~~35

~~Property~~ As of September 30, ~~plant~~2012, ~~and~~the ~~equipment~~Company ~~consist~~does ofnot have a balance outstanding on the U.S. revolving loan facility. In January 2011, the ~~following~~Company atbecame a guarantor for its subsidiary in India for a line of credit up to $1,371, of which $961 was outstanding as of September 30:, 2012. The line of credit of the Company’s India subsidiary has also been amended, with a new expiration date on June 30, 2013. The full guarantee of $1,371 reduces the Company’s borrowing capacity under the revolving loan with U.S. Bank by the same amount.

	2011			2010
Land and land improvements	$	828		$	828
Buildings		4,936			4,537
Machinery and equipment		15,123			13,587
Office furniture, computers & software		5,420			5,216
Construction in progress		1,862			1,475
		28,169			25,643
Less accumulated depreciation		(18,723	)		(16,618	)
	$	9,446		$	9,025

The Company had available under its revolving credit facility $13,629 at September 30, 2012.

~~Depreciation~~Note ~~expense~~8. ~~for the years ended~~Employee ~~September~~Benefit ~~30, 2011, 2010 and 2009 was $2,263, $2,137 and $1,996, respectively.~~Plans

~~Note~~ The Company 5maintains two pension plans, an hourly employee plan and a salaried employee plan. ~~Accrued~~The hourly plan covers certain of the Company’s union employees. The ~~expenses~~salaried plan covers certain salaried employees. Annual net periodic pension costs under the pension plans are determined on an actuarial basis. The Company’s policy is to fund these costs over 7 years and obligations arising due to plan amendments over the period benefited. The assets and liabilities are adjusted annually based on actuarial results.

~~Accrued~~ The Company ~~expenses~~also ~~consist~~provides health care and life insurance benefits for certain of its retired employees (“Post Retirement Plan”). These benefits are subject to deductibles, co-payment provisions and other limitations. The Company may amend or change the ~~following~~Post Retirement Plan periodically. The Company has elected to amortize the accumulated post retirement benefit obligation (“APBO”) at ~~September~~October 1, ~~30:~~1993 over twenty years as a component of post retirement benefit expense.

	2011		2010
Environmental liability	$	869	$	900
Accrued product warranty		1,076		1,578
Accrued compensation and benefits		2,262		1,962
Income tax payable		750		522
Other		579		736
	$	5,536	$	5,698

In 2003, the Company modified the provisions of the salaried plan to limit the number of eligible employees to those currently in the plan at the time of the modification and to limit benefits under the plan to those earned to that date. As part of the 2003 contract and strike settlement agreement with the union hourly workers, the hourly plan was also modified in 2003 to limit participation in the plan to those employees in the plan at August 31, 2002.

~~For~~Pension ~~further discussion related to the Company’s environmental liability, product warranty liability and income tax payable, refer to Notes 10, 2 and 9, respectively.~~Plans

~~Note~~ The following 6.table ~~Fair~~reflects ~~Value~~the changes in the projected benefit obligation, the ~~Measurement~~fair value of plan assets, and the determination of the amounts recognized in the consolidated balance sheets for the Company’s pension plans at September 30:

Financial assets and liabilities recorded at fair value in the consolidated balance sheet are categorized based upon a fair value hierarchy established by U.S. GAAP, which prioritizes the inputs used to measure fair value into the following levels:


	Salaried Plan						Hourly Plan
September 30,	2012			2011			2012			2011
Accumulated benefit obligation	$	6,285		$	5,446		$	11,611		$	9,831
Change in projected benefit obligation:
Benefit obligation at beginning of year	$	5,446		$	5,494		$	9,831		$	9,898
Service cost		—			—			48			54
Interest cost		263			265			476			479
Actuarial (gain)/loss		940			46			1,843			(30	)
Benefits paid		(364	)		(359	)		(587	)		(570	)

Benefit obligation at end of year	$	6,285		$	5,446		$	11,611		$	9,831

Change in plan assets:
Fair value of plan assets at beginning of year	$	3,451		$	3,455		$	5,888		$	5,662
Actual return on plan assets		434			28			788			81
Employer contributions		391			327			750			715
Benefits paid		(364	)		(359	)		(587	)		(570	)

Fair value of plan assets at end of year	$	3,912		$	3,451		$	6,839		$	5,888

Funded status at end of year	$	(2,373	)	$	(1,995	)	$	(4,772	)	$	(3,943	)

	Level 1 –	observable inputs such as quoted prices in active markets for identical assets or liabilities;
	Level 2 –	inputs, other than the quoted market prices in active markets, which are observable, either directly or indirectly; and
	Level 3 –	unobservable inputs for which there is little or no market data available, which require the reporting entity to develop its own assumptions.

Weighted-average assumptions used to determine benefit obligations at September 30:

Financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2011 included cash and cash equivalents of $1,339, which were considered level 1 assets. We use a market approach to determine the fair value of cash and cash equivalents, which include highly liquid investments with original maturities of three months or less. There were no assets and liabilities measured at fair value on a nonrecurring basis as of September 30, 2011.36

During the third quarter of fiscal 2010, the Company sold its short-term investments for cash proceeds of $511 and recorded a $441 net gain related to the sale. The majority of the shares sold related to the Company’s investment in Dana Holding CP (“Dana”) as part of the environmental settlement discussed in Note 10. Before the sale of short-term investments, all changes in market value of the Company’s short-term investments had been recorded net of tax in other comprehensive income (loss), except that in the first quarter of fiscal 2009, the Company recorded a non-cash, mark-to-market impairment charge of approximately $317 relating to its investment in Dana. The decision to record the impairment charge was based on the continued decline in the market value of the Dana stock, as well as the contraction of the market in which Dana operated.


	Salaried Plan						Hourly Plan
	2012			2011			2012			2011
Discount rate		3.50	%		5.00	%		3.50	%		5.00	%
Rate of compensation increase		—			—			—			—

36 The amounts included in accumulated other comprehensive losses that have not yet been recognized in net periodic benefit cost as of September 30, 2012 and 2011 consist of the following:

Note 7. Debt


	Salaried Plan				Hourly Plan
	2012		2011		2012		2011
Actuarial loss	$	3,937	$	3,394	$	7,069	$	5,848
Prior service cost		—		—		—		4
	$	3,937	$	3,394	$	7,069	$	5,852

In Amounts ~~June~~in ~~2010,~~fiscal ~~the~~2013 ~~Company~~that ~~entered~~will ~~into~~be aamortized ~~revolving~~from ~~loan~~accumulated ~~facility~~other ~~with~~comprehensive ~~U.S. Bank,~~loss ~~which~~into ~~expires~~net onperiodic ~~June~~benefit ~~30,~~cost ~~2012.~~include the following:

The revolving loan facility provides for $8,000 in borrowing capacity and is secured by substantially all the assets of the Company. Borrowings under the revolving loan facility are subject to a borrowing base equal to 75% of eligible accounts receivables and 50% of eligible inventories. Interest rates under the new agreement are based on the election of the Company of either a LIBOR rate or at Prime rate. Under the LIBOR rate option, the revolving loan facility will bear interest at the LIBOR rate plus 2.25% per annum for borrowings under the revolving loan facility. Fees under the loan agreement include an unused line fee of .15% per annum on the unused portion of the revolving loan facility. The Company is subject to certain quarterly and annual financial covenants under the revolving loan facility. At September 30, 2011, the Company was in compliance with all its financial covenants.


	Salaried Plan		Hourly Plan
Actuarial loss	$	162	$	234

~~As of September 30, 2011, the Company’s~~ Net ~~balance~~periodic onbenefit ~~the~~cost ~~U.S.~~for ~~revolving loan facility is $800. In January 2011,~~ the ~~Company~~ ~~became~~years aended ~~guarantor for its subsidiary in India for a line of credit up to $1,660, of which $775 was outstanding as of~~ September 30, ~~2011.~~includes ~~The line of credit of~~ the ~~Company’s India subsidiary also expires on June 30, 2012. The full guarantee of $1,660 reduces the Company’s borrowing capacity under the revolving loan with U.S. Bank by the same amount.~~following:

The Company had available under its revolving credit facility $5,540 at September 30, 2011.


	Salaried Plan									Hourly Plan
Year ended September 30:	2012			2011			2010			2012			2011			2010
Service cost	$	—		$	—		$	—		$	48		$	54		$	49
Interest cost		263			265			279			476			479			486
Expected return on plan assets		(178	)		(206	)		(220	)		(361	)		(328	)		(349	)
Amortization of prior service cost		—			—			—			4			14			14
Curtailment		—			—			—			—			—			—
Recognized net actuarial loss		141			136			131			195			200			179

Net periodic benefit cost	$	226		$	195		$	190		$	362		$	419		$	379

~~Note~~ Weighted-average assumptions 8.used ~~Employee~~to determine Net Periodic Benefit Cost for the years ended ~~Plans~~September 30:

The Company maintains two pension plans, an hourly employee plan and a salaried employee plan. The hourly plan covers certain of the Company’s union employees. The salaried plan covers certain salaried employees. Annual net periodic pension costs under the pension plans are determined on an actuarial basis. The Company’s policy is to fund these costs over 7 years and obligations arising due to plan amendments over the period benefited. The assets and liabilities are adjusted annually based on actuarial results.


	Salaried Plan									Hourly Plan
	2012			2011			2010			2012			2011			2010
Discount rate		5.00	%		5.00	%		5.50	%		5.00	%		5.00	%		5.50	%
Expected return on plan assets		7.25	%		7.50	%		6.75	%		7.25	%		7.50	%		6.75	%
Rate of compensation increase		—			—			—			—			—			—

The overall ~~Company~~expected ~~also~~long-term ~~provides~~rate ~~health~~of ~~care~~return ~~and life~~assumptions ~~insurance~~for ~~benefits~~fiscal ~~for~~2012 ~~certain~~were developed ofusing ~~its~~historical ~~retired~~and ~~employees~~future ~~(“Post~~return ~~Retirement Plan”).~~expectations ~~These~~of ~~benefits~~multiple ~~are~~asset classes, ~~subject~~which were analyzed to ~~deductibles,~~develop coa risk-~~payment~~free ~~provisions~~real rate of return and ~~other~~risk ~~limitations.~~premiums ~~The~~for ~~Company~~each ~~may~~asset ~~amend~~class. orThe ~~change~~overall ~~the~~rate ~~Post~~for ~~Retirement~~each ~~Plan~~asset class was ~~periodically.~~developed ~~The~~by ~~Company~~combining ~~has~~a ~~elected~~long-term toinflation ~~amortize~~component, the ~~accumulated~~risk-free ~~post~~real rate ~~retirement~~of ~~benefit~~return, ~~obligation~~and ~~(“APBO”)~~the atassociated ~~October~~risk 1,premium. ~~1993~~The ~~over~~weighted ~~twenty~~average ~~years~~rate ~~as a~~was ~~component~~developed ofbased ~~post~~on ~~retirement~~those ~~benefit~~overall ~~expense~~rates and the target asset allocation of the plan.

In Plan 2003, the Company modified the provisions of the salaried plan to limit the number of eligible employees to those currently in the plan at the time of the modification and to limit benefits under the plan to those earned to that date. As part of the 2003 contract and strike settlement agreement with the union hourly workers, the hourly plan was also modified in 2003 to limit participation in the plan to those employees in the plan at August 31, 2002.Assets:

~~Pension~~ The ~~Plans~~Company’s overall investment strategy is to build an efficient, well-diversified portfolio based on a long-term, strategic outlook of investment markets. The investment market outlook utilizes both historical-based and forward-looking return forecasts to establish future return expectations for various asset classes. These return expectations are then used to develop a core asset allocation based on the needs of the plan. The core asset allocation utilizes multiple investment managers in order to maximize the plan’s return while minimizing risk. The target allocations for plan assets are 30% equity securities, 60% debt securities, and 10% real asset investments. Equity securities primarily include investments in large-cap funds primarily located in the United States but also include investments in US small/mid-cap funds as well as international equity funds. Debt securities primarily consist of corporate bond funds.

The following table reflects the changes in the projected benefit obligation, the fair value of plan assets, and the determination of the amounts recognized in the consolidated balance sheets for the Company’s pension plans at September 30:37

	Salaried Plan						Hourly Plan
September 30,	2011			2010			2011			2010
Accumulated benefit obligation	$	5,446		$	5,494		$	9,831		$	9,898
Change in projected benefit obligation:
Benefit obligation at beginning of year	$	5,494		$	5,254		$	9,898		$	9,146
Service cost		-			-			54			49
Interest cost		265			279			479			486
Actuarial loss		46			296			(30	)		785
Benefits paid		(359	)		(335	)		(570	)		(568	)
Benefit obligation at end of year	$	5,446		$	5,494		$	9,831		$	9,898
Change in plan assets:
Fair value of plan assets at beginning of year	$	3,455		$	3,409		$	5,662		$	5,288
Actual return on plan assets		28			285			81			467
Employer contributions		327			96			715			475
Benefits paid		(359	)		(335	)		(570	)		(568	)
Fair value of plan assets at end of year	$	3,451		$	3,455		$	5,888		$	5,662
Funded status at end of year	$	(1,995	)	$	(2,039	)	$	(3,943	)	$	(4,236	)

The fair value of the Company’s salaried pension plan asset allocations at September 30, 2012, by asset class are as follows:


			Salaried Plan - Fair Value Measurements at September 30, 2012
Asset Class	Total		Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Equity securities:
U.S. large cap funds	$	700	$	—	$	700	$	—
U.S. mid cap funds		85		—		85		—
U.S. small cap funds		86		—		86		—
International funds		294		—		294		—
WMCO stock		301		301		—		—
Fixed income securities:		2,071		—		2,071		—
Real asset securities:		375		—		375		—

Total	$	3,912	$	301	$	3,611	$	—

~~Weighted-average~~ The fair ~~assumptions~~value ~~used~~of ~~to determine~~the ~~benefit~~Company’s ~~obligations~~salaried atpension plan asset allocations at September 30, 2011, by asset class are as follows:

	Salaried Plan						Hourly Plan
					Salaried Plan - Fair Value Measurements at September 30, 2011
	2011			2010			2011			2010
Asset Class		Total			Quoted Prices in Active Markets for Identical Assets orLiabilities (Level 1)			Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Discount rate	5.00	%		5.00	%		5.00	%		5.00	%
Equity securities:
Rate of compensation increase	-			-			-			-
U.S. large cap funds		$	570		$	—		$	570		$	—
U.S. mid cap funds			69			—			69			—
U.S. small cap funds			70			—			70			—
International funds			242			—			242			—
WMCO stock			307			307			—			—
Fixed income securities:			1,879			—			1,879			—
Real asset securities:			314			—			314			—
Total		$	3,451		$	307		$	3,144		$	—

The ~~amounts included in accumulated other~~ ~~comprehensive~~fair ~~losses~~value ~~that~~of ~~have~~the ~~not~~Company’s ~~yet~~hourly ~~been~~pension ~~recognized~~plan inasset ~~net~~allocations ~~periodic~~at ~~benefit cost as of~~ September 30, ~~2011~~2012, ~~and~~by ~~2010~~asset ~~consist~~class ofare ~~the~~as ~~following~~follows:

	Salaried Plan				Hourly Plan
	2011		2010		2011		2010
Actuarial loss	$	3,394	$	3,305	$	5,848	$	5,832
Prior service cost		-		-		4		18
	$	3,394	$	3,305	$	5,852	$	5,850

Amounts in fiscal 2012 that will be amortized from accumulated other comprehensive loss into net periodic benefit cost include the following:


			Hourly Plan - Fair Value Measurements at September 30, 2012
Asset Class	Total		Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Equity securities:
U.S. large cap funds	$	1,226	$	—	$	1,226	$	—
U.S. mid cap funds		148		—		148		—
U.S. small cap funds		151		—		151		—
International funds		516		—		516		—
WMCO stock		475		475		—		—
Fixed income securities:		3,665		—		3,665		—
Real asset securities:		658		—		658		—
Total	$	6,839	$	475	$	6,364	$	—

	Salaried		Hourly
	Plan		Plan
Actuarial loss	$	141	$	194
Prior service cost		-		4
	$	141	$	198

The fair value of the Company’s hourly pension plan asset allocations at September 30, 2011, by asset class are as follows:

Net periodic benefit cost for the years ended September 30 includes the following:


			Hourly Plan - Fair Value Measurements at September 30, 2011
Asset Class	Total		Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Equity securities:
U.S. large cap funds	$	982	$	—	$	982	$	—
U.S. mid cap funds		119		—		119		—
U.S. small cap funds		120		—		120		—
International funds		419		—		419		—
WMCO stock		470		470		—		—
Fixed income securities:		3,237		—		3,237		—
Real asset securities:		541		—		541		—
Total	$	5,888	$	470	$	5,418	$	—

	Salaried Plan									Hourly Plan
Year ended September 30:	2011			2010			2009			2011			2010			2009
Service cost	$	-		$	-		$	-		$	54		$	49		$	59
Interest cost		265			279			340			479			486			555
Expected return on plan assets		(206	)		(220	)		(301	)		(328	)		(349	)		(464	)
Amortization of prior service cost		-			-			-			14			14			17
Curtailment		-			-			-			-			-			-
Recognized net actuarial loss		136			131			114			200			179			341
Net periodic benefit cost	$	195		$	190		$	153		$	419		$	379		$	508

Cash Flows:

~~Weighted-average~~ The Company ~~assumptions~~expects ~~used~~ to ~~determine~~recognize ~~Net~~$562 ~~Periodic~~in ~~Benefit~~expense ~~Cost~~in fiscal 2013 related to its ~~for~~pension ~~the~~plans ~~years~~and ~~ended~~make ~~September~~payments ~~30:~~of $818 in fiscal 2013.

	Salaried Plan						Hourly Plan
	2011		2010		2009		2011		2010		2009
Discount rate	5.00	%	5.50	%	6.97	%	5.00	%	5.50	%	6.97	%
Expected return on plan assets	7.50	%	6.75	%	6.75	%	7.50	%	6.75	%	6.75	%
Rate of compensation increase	-		-		-		-		-		-

Based on current data and assumptions, the following benefit payments, which reflect expected future service, as appropriate, are expected to be paid over the next 10 fiscal years:


	Benefit Payments
Year ending:	Salaried Plan		Hourly Plan
2013	$	390	$	680
2014		380		680
2015		390		670
2016		380		670
2017		380		660
Years 2018-2022		2,000		3,400

The overall expected long-term rate of return assumptions for fiscal 2011 were developed using historical and future return expectations of multiple asset classes, which were analyzed to develop a risk-free real rate of return and risk premiums for each asset class. The overall rate for each asset class was developed by combining a long-term inflation component, the risk-free real rate of return, and the associated risk premium. The weighted average rate was developed based on those overall rates and the target asset allocation of the plan.39

Post Retirement Plan ~~Assets:~~

The ~~Company’s overall investment~~ ~~strategy~~following istable tosets ~~build~~forth anthe ~~efficient,~~changes ~~well-diversified~~in ~~portfolio~~benefit ~~based~~obligation ~~on a long-term, strategic outlook of investment markets. The investment market outlook utilizes both historical-based~~ and ~~forward-looking return forecasts to establish future return expectations for various asset classes. These return expectations are then used to develop a core asset allocation based on~~ the ~~needs~~ determination of the ~~plan.~~amounts ~~The~~recognized ~~core asset allocation utilizes multiple investment managers~~ in ~~order~~ ~~to maximize~~ the ~~plan’s~~consolidated ~~return~~balance ~~while~~sheets ~~minimizing risk. The target allocations~~ for ~~plan assets are 30% equity securities, 60% debt securities, and~~ ~~10% real estate investments. Equity securities primarily include investments in large-cap funds primarily located in~~ the ~~United~~Post ~~States~~Retirement ~~but~~Plan ~~also~~at ~~include investments~~September in30: ~~US small/mid-cap funds as well as international equity funds. Debt securities primarily consist of corporate bond funds.~~

The fair value of the Company’s salaried pension plan asset allocations at September 30, 2011, by asset class are as follows:


	2012			2011
Change in benefit obligation:
Benefit obligation at beginning of year	$	2,332		$	2,631
Service cost		1			1
Interest cost		112			126
Actuarial gain		(155	)		(187	)
Benefits paid		(208	)		(239	)

Benefit obligation at end of year	$	2,082		$	2,332

Change in plan assets:
Fair value of plan assets at beginning of year	$	—		$	—
Employer contributions		208			239
Benefits paid		(208	)		(239	)

Fair value of plan assets at end of year	$	—		$	—

Funded status at end of year	$	(2,082	)	$	(2,332	)

			Salaried Plan - Fair Value Measurements at September 30, 2011
			Quoted Prices in
			Active Markets for		Significant		Significant
			Identical Assets or		Observable		Unobservable
			Liabilities		Inputs		Inputs
Asset Class	Total		(Level 1)		(Level 2)		(Level 3)
Equity securities:
U.S. large cap funds	$	570	$	-	$	570	$	-
U.S. mid cap funds		69		-		69		-
U.S. small cap funds		70		-		70		-
International funds		366		-		366		-
WMCO stock		307		307		-		-
Fixed income securities:		1,879		-		1,879		-
Real estate securities:		190		-		190		-
Total	$	3,451	$	307	$	3,144	$	-

Weighted-average assumptions used to determine benefit obligations at September 30:

The fair value of the Company’s salaried pension plan asset allocations at September 30, 2010, by asset class are as follows:


	2012			2011
Discount rate		3.75	%		5.00	%
Rate of compensation increase		—			—

			Salaried Plan - Fair Value Measurements at September 30, 2010
			Quoted Prices in
			Active Markets for		Significant		Significant
			Identical Assets or		Observable		Unobservable
			Liabilities		Inputs		Inputs
Asset Class	Total		(Level 1)		(Level 2)		(Level 3)
Equity securities:
U.S. large cap funds	$	922	$	-	$	922	$	-
U.S. mid cap funds		90		-		90		-
U.S. small cap funds		88		-		88		-
International funds		292		-		292		-
WMCO stock		264		264		-		-
Fixed income securities:		1,623		-		1,623		-
Real estate securities:		176		-		40		136
Total	$	3,455	$	264	$	3,055	$	136

The amounts included in accumulated other comprehensive losses that have not yet been recognized in net periodic benefit cost as of September 30, 2012 and 2011 consist of the following:


	2012			2011
Actuarial loss	$	12		$	167
Prior service credit		(196	)		(332	)
Transition obligation		19			39
	$	(165	)	$	(126	)

~~The~~ Amounts ~~fair~~in ~~value~~fiscal of2013 ~~the~~that ~~Company’s~~will ~~hourly~~be ~~pension~~amortized ~~plan~~from ~~asset~~accumulated ~~allocations~~other atcomprehensive ~~September~~loss ~~30,~~into ~~2011,~~net byperiodic ~~asset~~benefit ~~class~~cost ~~are~~include asthe ~~follows~~following:

				Hourly Plan - Fair Value Measurements at September 30, 2011
Actuarial loss	$	2
				Quoted Prices in
Prior service credit		(136	)
				Active Markets for		Significant		Significant
Transition obligation		19
				Identical Assets or		Observable		Unobservable
	$	(115	)
				Liabilities		Inputs		Inputs
Asset Class	Total			(Level 1)		(Level 2)		(Level 3)
Equity securities:
U.S. large cap funds	$	982		$	-	$	982	$	-
U.S. mid cap funds		119			-		119		-
U.S. small cap funds		120			-		120		-
International funds		632			-		632		-
WMCO stock		470			470		-		-
Fixed income securities:		3,237			-		3,237		-
Real estate securities:		328			-		328		-
Total	$	5,888		$	470	$	5,418	$	-

~~The~~ Net periodic ~~fair~~post ~~value~~retirement ofbenefit ~~the~~cost ~~Company’s~~for ~~hourly pension~~the ~~plan~~years ~~asset~~ended ~~allocations at~~ September 30, ~~2010, by asset class are as~~included ~~follows~~the following:

				Hourly Plan - Fair Value Measurements at September 30, 2010
Year ended September 30:	2012			2011			2010
				Quoted Prices in
Service cost	$	1		$	1		$	1
				Active Markets for			Significant			Significant
Interest cost		112			126			149
				Identical Assets or			Observable			Unobservable
Amortization		(116	)		(109	)		(102	)
				Liabilities			Inputs			Inputs
Net periodic post retirement benefit cost	$	(3	)	$	18		$	48
Asset Class	Total			(Level 1)			(Level 2)			(Level 3)
Equity securities:
U.S. large cap funds	$	1,517		$	-		$	1,517		$	-
U.S. mid cap funds		149			-			149			-
U.S. small cap funds		145			-			145			-
International funds		482			-			482			-
WMCO stock		427			427			-			-
Fixed income securities:		2,666			-			2,666			-
Real estate securities:		276			-			67			209
Total	$	5,662		$	427		$	5,026		$	209

~~The following table represents a reconciliation of the beginning and ending balances of the fair value measurements using significant unobservable inputs (Level 3):~~40

	Fair Value Measurements
	Using Significant Unobservable Inputs (Level 3)
	Real Estate Fund
	Salaried Plan			Hourly Plan
Balance at September 30, 2009	$	129		$	198
Actual return on plan assets		7			11
Purchases, sales and settlements		-			-
Balance at September 30, 2010		136			209
Actual return on plan assets		(19	)		(63	)
Purchases, sales and settlements		29			79
Transfer out of Level 3 to Level 2		(146	)		(225	)
Balance at September 30, 2011	$	-		$	-

Weighted-average assumptions used to determine net post retirement benefit cost for the years ended September 30:


	2012			2011			2010
Discount rate		5.00	%		5.00	%		5.50	%

~~A portion of the real estate fund shown in the above tables was~~ Based ~~classified~~on ascurrent adata ~~Level~~and 3assumptions, ~~asset through~~ the ~~second~~following ~~quarter~~benefit ~~of fiscal 2011~~payments, at which ~~time~~reflect expected itfuture ~~was~~service, ~~then classified~~ as aappropriate, ~~Level~~are 2expected ~~asset. This fund was classified as a Level 3 asset for fair value purposes due~~ to ~~temporary~~be ~~withdrawal limitations~~paid onover ~~this fund. The withdrawal limitations were removed as of~~ the ~~end~~next of10 ~~the second quarter of~~ fiscal ~~2011,~~years: ~~resulting in this fund becoming a Level 2 asset.~~

Cash Flows:


Year ending:	Benefit Payments
2013	$	200
2014		190
2015		190
2016		180
2017		180
Years 2018-2022		830

The assumed ~~Company~~health ~~expects~~care tocost ~~recognize $587~~trend inrate ~~expense~~used in ~~fiscal~~measuring ~~2012~~the ~~related~~benefit toobligation ranged ~~its~~between ~~pension~~4.0% ~~plans~~- ~~and~~8.0% ~~make~~in ~~payments~~the ~~of $1~~first year,~~146~~ declining gradually to 4.0% - 4.5% in ~~fiscal~~2020 ~~2012~~and thereafter.

~~Based~~ If the onassumed ~~current~~health ~~data~~care ~~and~~costs trends were increased by 1%, the benefit ~~assumptions~~obligation as of September 30, 2012 would increase by $182, and the ~~following~~aggregate of the services and interest cost components of the net post retirement benefit cost ~~payments,~~would ~~which~~be ~~reflect~~increased ~~expected~~by ~~future~~$10. If the assumed health care costs trends were ~~service~~decreased by 1%, the benefit obligation as ~~appropriate~~of September 30, ~~are~~2012 ~~expected~~would todecrease by be$158, ~~paid~~and ~~over~~the aggregate of the ~~next~~services 10and ~~fiscal~~interest cost components of the ~~years:~~net post retirement benefit cost would be decreased by $9.

	Benefit Payments
Year ending:	Salaried Plan		Hourly Plan
2012	$	380	$	630
2013		370		640
2014		360		640
2015		380		630
2016		370		630
Years 2017-2021		1,970		3,310

Other Benefit Plans

~~Post~~ The Company ~~Retirement~~sponsors a matching 401(k) plan for salaried employees and certain ~~Plan~~union employees, in which eligible employees may elect to contribute a portion of their compensation. Employer matching contributions in fiscal 2012, 2011 and 2010 were $271, $264 and $252, respectively.

~~The~~ In December ~~following~~2008, ~~table~~the ~~sets~~Company ~~forth~~adopted the ~~changes~~2008 inDeferred ~~benefit~~Compensation ~~obligation~~Plan ~~and~~(the “Plan”). The purpose of the Plan is to (i) provide deferred compensation to ~~determination~~select senior management employees of the ~~amounts~~Company ~~recognized~~(“Eligible inExecutives”) and members of the ~~consolidated~~Company’s ~~balance~~board ~~sheets~~of ~~for~~directors, (ii) permit Eligible Executives to elect to defer a percentage of their base compensation and/or bonus compensation, and (iii) permit members of the ~~Post~~Company’s ~~Retirement~~board ~~Plan~~of atdirectors ~~September~~to elect to defer a portion of their board fees. The initial Eligible Executives are Patrick W. Cavanagh, President and Chief Executive Officer, and Dennis E. Bunday, Executive Vice President and Chief Financial Officer. As of September 30:, 2012, Mr. Cavanagh and Mr. Bunday have been awarded and have had interest accrued to their accounts on an un-funded, fully-vested basis deferred compensation totaling $325 and $85, respectively.

	2011			2010
Change in benefit obligation:
Benefit obligation at beginning of year	$	2,631		$	2,819
Service cost		1			1
Interest cost		126			149
Actuarial gain		(187	)		(109	)
Benefits paid		(239	)		(229	)
Other		-			-
Benefit obligation at end of year	$	2,332		$	2,631
Change in plan assets:
Fair value of plan assets at beginning of year	$	-		$	-
Employer contributions		239			229
Benefits paid		(239	)		(229	)
Fair value of plan assets at end of year	$	-		$	-
Funded status at end of year	$	(2,332	)	$	(2,631	)

Note 9. Income Taxes

~~Weighted-average~~ The provision ~~assumptions~~for ~~used~~income totax ~~determine~~expense ~~benefit~~is ~~obligations~~as ~~at September~~follows for the years ended September 30:

			2011			2010
		2012			2011			2010
	Discount rate		5.00	%		5.00	%
Current:
	Rate of compensation increase		-			-
Federal		$	808		$	685		$	701
State			126			57			(11	)
Foreign			402			283			168
			1,336			1,025			858
Deferred:
Federal			803			313			(448	)
State			149			141			36
Foreign			(44	)		(40	)		(108	)
			908			414			(520	)
Total		$	2,244		$	1,439		$	338

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