UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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): April 25, 2017 (April 25, 2017)

 

 

WESTINGHOUSE AIR BRAKE

TECHNOLOGIES CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

 

 

Delaware

(State or other Jurisdiction

of Incorporation)

 

033-90866		25-1615902
(Commission File No.)		(I.R.S. Employer Identification No.)
1001 Air Brake Avenue Wilmerding, Pennsylvania		15148
(Address of Principal Executive Offices)		(Zip Code)

(412) 825-1000

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

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Item 2.02    Results of Operations and Financial Condition.

On April 25, 2017, Westinghouse Air Brake Technologies Corporation (the “Company”) issued a press release reporting, among other things, the Company’s 2017 first 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.

Item 7.01.    Regulation FD Disclosure.

On April 25, 2017, the Company issued a press release which, among other things, affirmed previously provided earnings guidance for fiscal year 2017. A copy of the press release is attached to this report as Exhibit 99.1 and the paragraph discussing 2017 guidance is incorporated into this Item 7.01 by reference.

In accordance with General Instruction B.2 of Form 8-K, the information furnished pursuant to this Item 7.01 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.

Item 9.01.    Financial Statements and Exhibits.

 

(d)

Exhibit.

The following exhibit is furnished with this report on Form 8-K:

 

Exhibit No.		Description
99.1		April 25, 2017

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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.

 

Date: April 25, 2017

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EXHIBIT INDEX

 

Exhibits
99.1		Press release issued by Westinghouse Air Brake Technologies Corporation on April 25, 2017

Exhibit 99.1

 

Wabtec Reports Results For 1Q, Affirms Guidance

WILMERDING, PA, April 25, 2017 – Wabtec Corporation (NYSE: WAB) today reported results for the first quarter and affirmed its financial guidance for 2017.

2017 First Quarter

 

•

During the quarter, Wabtec acquired the remaining shares of Faiveley Transport and made progress on the integration. Also during the quarter Wabtec acquired Aero Transportation Products, a manufacturer of hatch covers and outlet gates for freight cars with annual sales of about $40 million; and announced the signing of a $97 million contract to provide signaling and communications services to TEX Rail, a new commuter rail line being developed by the Forth Worth Transportation Authority. Following the end of the quarter, Wabtec acquired Thermal Transfer, a manufacturer of heat exchangers for industrial markets, with annual sales of about $25 million; and Semvac, a European-based manufacturer of sanitation systems for transit vehicles, with annual sales of about $15 million.

•

Sales for the first quarter were $916 million, with higher sales in the Transit Group offsetting lower sales in the Freight Group. Transit sales increased mainly due to the Faiveley acquisition, while Freight sales were affected mainly by lower revenues from train control-related equipment and services, and lower industry deliveries of new freight cars and locomotives. Changes in foreign exchange rates reduced sales by $25 million compared to the year-ago quarter.

•

Income from operations in the first quarter was $115 million, including restructuring and transaction expenses of $8.9 million related mainly to the Faiveley integration and ongoing cost-reduction activities.

•

Net interest and other expense was $15 million in the first quarter, reflecting a higher debt balance due to the Faiveley acquisition.

•

Income tax expense was $27 million in the first quarter, with an effective tax rate of 27.6 percent. This included an expense of $2.1 million for an adjustment related to the Faiveley acquisition.

•

Earnings per diluted share in the first quarter were 77 cents. The net effect of the restructuring and transaction expenses, tax adjustment and non-controlling interest related to the Faiveley acquisition reduced earnings per diluted share by 7 cents.

•

At March 31, the company had cash of $280 million and debt of $1.87 billion.

2017 Financial Guidance

Also today, Wabtec affirmed its 2017 financial guidance, with revenues expected to be about $4.1 billion and adjusted earnings per diluted share expected to be between $3.95 and $4.15 excluding expected restructuring and transaction expenses, and non-controlling interest related to the Faiveley acquisition. Due to the ramp up of projects already in backlog and the timing of synergies from the Faiveley acquisition, the company expects its quarterly results to improve sequentially during the rest of the year. Wabtec estimates synergies from the acquisition to be about $15 million to $20 million in 2017, with long-term synergies expected to exceed $50 million.

 

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Raymond T. Betler, Wabtec’s president and chief executive officer, said: “Our first quarter adjusted earnings were in line with expectations, and we expect improvement during the year. As we work to integrate Faiveley and our other recent acquisitions, we are managing our costs aggressively based on market conditions. We continue to invest in our balanced growth strategies and expect to benefit from our diversified business model and rigorous application of the Wabtec Excellence Program.”

Wabtec Corporation (www.wabtec.com) is a leading global provider of equipment, systems and value-added services for transit and freight rail. Through its subsidiaries, the company manufactures a range of products for locomotives, freight cars and passenger transit vehicles. The company also builds new switcher and commuter locomotives, and provides aftermarket services. The company has facilities located throughout the world.

This release contains forward-looking statements, such as statements regarding the company’s expectations about future earnings and synergies from the Faiveley Transport acquisition. 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, a further economic slowdown in the markets we serve; a further 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.

Wabtec will host a call with analysts and investors at 10 a.m., eastern time, today. To listen via webcast, go to www.wabtec.com and click on “Webcasts” in the “Investor Relations” section.

 

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WABTEC CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 2017 AND 2016

(AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)

(UNAUDITED)

 

		First Quarter 2017				First Quarter 2016
Net sales		$	916,034			$	772,031
Cost of sales			(646,327	)			(516,851	)
Gross profit			269,707				255,180
Gross profit as a % of Net Sales			29.4	%			33.1	%
Selling, general and administrative expenses			(122,341	)			(89,751	)
Engineering expenses			(23,464	)			(17,953	)
Amortization expense			(9,044	)			(5,295	)
Total operating expenses			(154,849	)			(112,999	)
Operating expenses as a % of Net Sales			16.9	%			14.6	%
Income from operations			114,858				142,181
Income from operations as a % of Net Sales			12.5	%			18.4	%
Interest expense, net			(17,712	)			(4,871	)
Other income(expense), net			2,319				154
Income from operations before income taxes			99,465				137,464
Income tax benefit (expense)			(27,461	)			(43,301	)
Effective tax rate			27.6	%			31.5	%
Net Income			72,004				94,163
Less: Net income attributable to noncontrolling interest			1,885				—
Net income attributable to Wabtec shareholders		$	73,889			$	94,163
Earnings Per Common Share
Basic
Net income attributable to Wabtec shareholders		$	0.77			$	1.03
Diluted
Net income attributable to Wabtec shareholders		$	0.77			$	1.02
Weighted average shares outstanding
Basic			95,243				91,258
Diluted			95,991				92,149
Net Sales by Segment
Freight Group		$	347,946			$	442,669
Transit Group			568,088				329,362
Total		$	916,034			$	772,031