Wabtec Reports 3Q EPS of 63 Cents, Up 11%; Generates Cash From Operations of $51 Million

Oct 27, 2010, 08:12 ET from Wabtec Corporation

WILMERDING, Pa., Oct. 27 /PRNewswire-FirstCall/ -- Wabtec Corporation (NYSE: WAB) today reported its 2010 third quarter results, including the following:

  • Sales increased 14 percent to $376 million, as the Freight Group had a strong sales increase due to organic growth and acquisitions.
  • Income from operations increased 11 percent to $51 million, or 13.5 percent of sales.
  • Earnings per diluted share were 63 cents, an 11 percent increase compared to 57 cents in the year-ago quarter.
  • For the quarter, cash generated from operations was $51 million, or 13.5 percent of sales.  At Sept. 30, 2010, Wabtec had net debt of $233 million.
  • The company recently acquired G&B Specialties and Bach-Simpson, and completed a fourth joint venture in China.
  • Wabtec's total backlog at Sept. 30 increased to $1.04 billion, and now includes a $115 million contract to build 20 passenger locomotives for the Massachusetts Bay Transportation Authority.  The locomotives are scheduled to be delivered in 2012-13.

Based on Wabtec's third quarter results and outlook, the company updated its 2010 earnings guidance as follows:  Full-year earnings per diluted share are now expected to be between $2.50-$2.55; previously, the company expected EPS to be between $2.45-$2.55.  Full-year revenues are expected to increase about 6-7 percent over the previous year, primarily due to growth in the freight segment.

Albert J. Neupaver, Wabtec's president and chief executive officer, said: "We posted solid numbers in the third quarter, with strong sales and earnings increases, and good cash generation.  Driven by increased rail traffic and execution of our growth strategies, the Freight Group has rebounded strongly this year, even as industry deliveries of new locomotives and freight cars remain well below normal.  Transit Group results are lower than last year due in part to the completion of major contracts, as well as project delays and budget constraints at municipal transit authorities.  We remain excited about the company's long-term growth prospects, given our diversified business model, focus on cash generation, investment in growth strategies and rigorous application of the Wabtec Performance System."

Wabtec (www.wabtec.com) is a global provider of technology-based products and services for rail and other industrial markets.  This release contains forward-looking statements, such as those regarding expectations about future earnings.  Actual results could differ materially from the results suggested in any forward-looking statement.  Factors that could cause or contribute to these material differences include, but are not limited to, an economic slowdown in the markets we serve; fluctuations in freight and passenger rail traffic; and other factors discussed in Wabtec's filings with the Securities and Exchange Commission.  Wabtec assumes no obligation to update these statements or advise of changes in the assumptions on which they are based.  Wabtec will conduct a conference call with analysts and investors at 10 a.m., eastern time, today.  To listen via webcast, please go to www.wabtec.com and click on the "Webcasts" tab in the "Investor Relations" section.

WABTEC CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009

(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)

(UNAUDITED)

Third

Third

For the

For the

Quarter

Quarter

Nine Months

Nine Months

2010

2009

2010

2009

Net sales

$ 375,707

$ 330,455

$ 1,113,771

$ 1,042,428

Cost of sales

(266,470)

(235,629)

(782,681)

(748,764)

 Gross profit

109,237

94,826

331,090

293,664

  Gross profit as a % of Net Sales

29.1%

28.7%

29.7%

28.2%

Selling, general and administrative expenses

(46,604)

(37,162)

(142,478)

(117,827)

Engineering expenses

(9,362)

(10,157)

(30,482)

(31,481)

Amortization expense

(2,638)

(1,748)

(6,669)

(6,122)

 Total operating expenses

(58,604)

(49,067)

(179,629)

(155,430)

  Operating expenses as a % of Net Sales

15.6%

14.8%

16.1%

14.9%

    Income from operations

50,633

45,759

151,461

138,234

     Income from operations as a % of Net Sales

13.5%

13.8%

13.6%

13.3%

Interest (expense) income, net

(3,996)

(3,687)

(12,000)

(12,148)

Other income (expense), net

(791)

394

(426)

649

    Income from operations before income taxes

45,846

42,466

139,035

126,735

Income tax expense

(15,302)

(15,118)

(46,916)

(35,885)

     Effective tax rate

33.4%

35.6%

33.7%

28.3%

    Net income attributable to Wabtec shareholders

$   30,544

$   27,348

$      92,119

$      90,850

Earnings Per Common Share

Basic

    Net income attributable to Wabtec shareholders

$       0.64

$       0.58

$          1.93

$          1.90

Diluted

    Net income attributable to Wabtec shareholders

$       0.63

$       0.57

$          1.92

$          1.89

Weighted average shares outstanding

      Basic

47,677

47,289

47,577

47,537

      Diluted

48,064

47,752

47,956

48,019

Sales by Segment

Freight Group

$ 208,566

$ 124,453

$    563,684

$    440,479

Transit Group

167,141

206,002

$    550,087

$    601,949

         Total

$ 375,707

$ 330,455

$ 1,113,771

$ 1,042,428

SOURCE Wabtec Corporation



RELATED LINKS

http://www.wabtec.com