UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) July 26, 2011
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
| 1-13782 | 25-1615902 | |
| (Commission File Number) |
(IRS Employer Identification No.) | |
| 1001 Airbrake Avenue Wilmerding, Pennsylvania |
15148 | |
| (Address of Principal Executive Offices) | (Zip Code) | |
(412) 825-1000
(Registrant’s Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition.
On July 26, 2011, Westinghouse Air Brake Technologies Corporation (the “Company”) issued a press release reporting, among other things, the Company’s 2011 second quarter results. A copy of this press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated into this Item 2.02 by reference.
In accordance with General Instruction B.2 of Form 8-K, the information furnished pursuant to this Item 2.02 in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing, and as set forth in Item 8.01 herein.
Item 8.01. Other Events.
On July 26, 2011, the Company issued a press release providing, among other things, updated earnings guidance for fiscal year 2011. A copy of the press release is attached to this report as Exhibit 99.1 and the second paragraph discussing 2011 guidance is incorporated into this Item 8.01 by reference.
Item 9.01. Financial Statements and Exhibits.
| (d) | Exhibits. |
The following exhibit is furnished and a portion thereof is filed (as described in Item 8.01) with this report on Form 8-K:
| Exhibit No. |
Description | |
| 99.1 | Press release dated July 26, 2011. | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION | ||
| By: | /s/ Alvaro Garcia-Tunon | |
| Alvaro Garcia-Tunon | ||
| Chief Financial Officer | ||
Date: July 26, 2011
EXHIBIT INDEX
| Number |
Description |
Method of Filing | ||
| 99.1 |
Press release dated July 26, 2011. | Filed herewith. | ||
Exhibit 99.1
|
News Release
|
Wabtec Reports Record Quarterly Results and Increases Guidance Excluding Special Items; Backlog Increases To Record $1.51 Billion
WILMERDING, PA, July 26, 2011 – Wabtec Corporation (NYSE: WAB) today reported record quarterly results and increased its full-year guidance excluding special items, mainly a previously announced charge for a court ruling that Wabtec is planning to appeal. Second quarter highlights included:
| • | Sales were a record $479 million, 28 percent higher than the year-ago quarter, primarily due to strong growth in the Freight Group. |
| • | Earnings per diluted share were 75 cents. Excluding special items, earnings per diluted share were a record 94 cents (non-GAAP), 45 percent higher than the year-ago quarter. The special items were: the charge of $18.1 million for a court ruling (after-tax EPS effect of 25 cents), a benefit of $2.4 million from a settlement related to a prior acquisition (after-tax EPS effect of 3 cents), and a tax benefit of $1.7 million from the successful resolution of certain outstanding tax issues from prior years (after-tax EPS effect of 3 cents). For reconciliation with GAAP, see the table below. |
| • | Income from operations was $56 million. Excluding the special items, income from operations was a record $72 million (non-GAAP), or 15 percent of sales, compared to 13.3 percent in the year-ago quarter. For reconciliation with GAAP, see the table below. |
| • | For the quarter, cash from operations was $50 million. At June 30, 2011, the company had cash of $221 million and debt of $396 million. During the quarter, Wabtec repurchased 95,000 shares of company stock for $6 million and completed the acquisition of a transit aftermarket parts business. |
| • | Backlog at the end of the second quarter was a record $1.51 billion, 40 percent higher than at year-end 2010. |
Based on its second quarter results and outlook for the rest of the year, Wabtec increased its 2011 guidance for earnings per diluted share to between $3.45-$3.55 excluding the special items in this quarter, with revenues expected to be up about 20 percent for the year.
Albert J. Neupaver, Wabtec’s president and chief executive officer, said: “The company’s second quarter operating performance was strong, as we continued to execute our growth strategies and benefited from favorable market conditions, particularly in the freight rail sector. Based on our performance to date and our record backlog, we are optimistic about our outlook for the balance of the year. Longer-term, we are well positioned to take advantage of growth opportunities in our core markets around the world.”
Wabtec Corporation (www.wabtec.com) is a global provider of value-added, technology-based products and services for rail and other industrial markets.
| ||||
| Tim Wesley | Phone: 412.825.1543 | Wabtec Corporation | ||
| E-mail: twesley@wabtec.com Website: www.wabtec.com |
1001 Air Brake Avenue Wilmerding, PA 15148 | |||
|
|
News Release
|
This release contains forward-looking statements, such as statements regarding the company’s 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; a decrease in freight or passenger rail traffic; an increase in manufacturing costs; and other factors contained in the company’s filings with the Securities and Exchange Commission. The company assumes no obligation to update these statements or advise of changes in the assumptions on which they are based.
Set forth below is the calculation of the non-GAAP performance measures included in this press release. We believe that these measures provide useful supplemental information to assess our operating performance and to evaluate period-to-period comparisons. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, Wabtec’s reported results prepared in accordance with GAAP.
| Reconciliation of second quarter earnings per diluted share |
||||
| Net income per diluted share in accordance with GAAP |
75 cents | |||
| Add back after-tax charge for court ruling |
25 cents | |||
| Deduct after-tax benefit from settlement |
(3 cents | ) | ||
| Deduct tax benefit |
(3 cents | ) | ||
|
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| Net income per diluted share excluding special items |
94 cents | |||
| Reconciliation of second quarter income from operations (in thousands) |
||||
| Income from operations in accordance with GAAP |
$ | 56,362 | ||
| Add back pre-tax charge for court ruling |
$ | 18,100 | ||
| Deduct pre-tax benefit from settlement |
($ | 2,400 | ) | |
|
|
|
|||
| Income from operations excluding special items |
$ | 72,062 | ||
The company will conduct a conference call with analysts and investors at 10 a.m., eastern time, today. To listen to the call via webcast, please go to www.wabtec.com and click on the “Webcasts” tab in the “Investor Relations” section.
|
| ||||
| Tim Wesley | Phone: 412.825.1543 | Wabtec Corporation | ||
| E-mail: twesley@wabtec.com Website: www.wabtec.com |
1001 Air Brake Avenue Wilmerding, PA 15148 | |||
WABTEC CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2011 AND 2010
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
| Second Quarter 2011 |
Second Quarter 2010 |
For the Six Months 2011 |
For the Six Months 2010 |
|||||||||||||
| Net sales |
$ | 478,899 | $ | 374,137 | $ | 934,158 | $ | 738,064 | ||||||||
| Cost of sales |
(336,155 | ) | (260,673 | ) | (658,219 | ) | (516,211 | ) | ||||||||
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| Gross profit |
142,744 | 113,464 | 275,939 | 221,853 | ||||||||||||
| Gross profit as a % of Net Sales |
29.8 | % | 30.3 | % | 29.5 | % | 30.1 | % | ||||||||
| Selling, general and administrative expenses |
(73,943 | ) | (51,243 | ) | (128,759 | ) | (95,874 | ) | ||||||||
| Engineering expenses |
(9,132 | ) | (10,425 | ) | (18,020 | ) | (21,120 | ) | ||||||||
| Amortization expense |
(3,307 | ) | (2,144 | ) | (6,421 | ) | (4,031 | ) | ||||||||
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| Total operating expenses |
(86,382 | ) | (63,812 | ) | (153,200 | ) | (121,025 | ) | ||||||||
| Operating expenses as a % of Net Sales |
18.0 | % | 17.1 | % | 16.4 | % | 16.4 | % | ||||||||
| Income from operations |
56,362 | 49,652 | 122,739 | 100,828 | ||||||||||||
| Income from operations as a % of Net Sales |
11.8 | % | 13.3 | % | 13.1 | % | 13.7 | % | ||||||||
| Interest (expense) income, net |
(3,793 | ) | (4,092 | ) | (7,477 | ) | (8,004 | ) | ||||||||
| Other income (expense), net |
(410 | ) | 1,086 | 50 | 365 | |||||||||||
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| Income from operations before income taxes |
52,159 | 46,646 | 115,312 | 93,189 | ||||||||||||
| Income tax expense |
(15,825 | ) | (15,435 | ) | (38,026 | ) | (31,614 | ) | ||||||||
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| Effective tax rate |
30.3 | % | 33.1 | % | 33.0 | % | 33.9 | % | ||||||||
| Income from continuing operations |
36,334 | 31,211 | 77,286 | 61,575 | ||||||||||||
| Discontinued operations |
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| Income (loss) from discontinued operations (net of tax) |
— | — | — | — | ||||||||||||
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| Net income attributable to Wabtec shareholders |
$ | 36,334 | $ | 31,211 | $ | 77,286 | $ | 61,575 | ||||||||
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| Earnings Per Common Share |
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| Basic |
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| Income from continuing operations |
$ | 0.75 | $ | 0.65 | $ | 1.61 | $ | 1.29 | ||||||||
| Income from discontinued operations |
— | — | — | — | ||||||||||||
| Net income attributable to Wabtec shareholders |
$ | 0.75 | $ | 0.65 | $ | 1.61 | $ | 1.29 | ||||||||
| Diluted |
||||||||||||||||
| Income from continuing operations |
$ | 0.75 | $ | 0.65 | $ | 1.60 | $ | 1.28 | ||||||||
| Income from discontinued operations |
— | — | — | — | ||||||||||||
| Net income attributable to Wabtec shareholders |
$ | 0.75 | $ | 0.65 | $ | 1.60 | $ | 1.28 | ||||||||
| Weighted average shares outstanding |
||||||||||||||||
| Basic |
47,950 | 47,725 | 47,805 | 47,539 | ||||||||||||
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| Diluted |
48,463 | 48,089 | 48,303 | 47,911 | ||||||||||||
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| Sales by Segment |
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| Freight Group |
$ | 280,036 | $ | 189,974 | $ | 544,892 | $ | 355,118 | ||||||||
| Transit Group |
198,863 | 184,163 | $ | 389,266 | $ | 382,946 | ||||||||||
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| Total |
$ | 478,899 | $ | 374,137 | $ | 934,158 | $ | 738,064 | ||||||||
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