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): July 29, 2021 (July 29, 2021 )
(Exact Name of Registrant as Specified in Its Charter)
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(State or other Jurisdiction
of Incorporation)
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(Commission File No.)
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(I.R.S. Employer Identification No.)
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,
(Address of Principal Executive Offices)
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(Zip Code)
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(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):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of exchange on which registered
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2
of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ☐
| Item 2.02 |
Results of Operations and Financial Condition.
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On July 29, 2021, Westinghouse Air Brake Technologies Corporation (the “Company”) issued a press release reporting, among other things, the
Company’s 2021 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. The Company is also furnishing an investor presentation
relating to its second quarter of 2021 (the “Presentation”), which will be used by the management team for presentations to investors and others. A copy of the Presentation is attached hereto as Exhibit 99.2 and incorporated into this Item 2.02
by reference. The Presentation is also available on the Company’s website at www.wabteccorp.com.
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 Exhibits 99.1 and 99.2, 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.
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On July 29, 2021, the Company issued a press release which, among other things, updated sales and earnings guidance for fiscal year 2021. A copy of
the press release is attached to this report as Exhibit 99.1 and the paragraph under the heading “2021 Financial Guidance” which discusses 2021 guidance is incorporated into this Item 7.01 by reference. The Company also furnished a Presentation
relating to its second quarter of 2021, which is incorporated into this Item 7.01 by reference. A copy of the Presentation is attached to this report as Exhibit 99.2.
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 Exhibits 99.1 and 99.2, 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.
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(d) Exhibits.
The following exhibits are furnished with this report on Form 8-K:
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Exhibit
No.
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Description
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Press release dated July 29, 2021
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Wabtec 2nd Quarter 2021, Financial Results & Company Highlights
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document)
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Caution Concerning Forward-Looking Statements
This communication contains “forward-looking” statements as that term is defined in Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995, including statements regarding the acquisition by Wabtec of GE Transportation (the “GE Transportation merger”), statements
regarding Wabtec’s expectations about future sales and earnings and statements about the impact of evolving global conditions on Wabtec’s business. All statements, other than historical facts, including statements synergies from the GE
Transportation merger; statements regarding Wabtec’s plans, objectives, expectations and intentions; and statements regarding macro-economic conditions and evolving production and demand conditions; and any assumptions underlying any of the
foregoing, are forward-looking statements. Forward-looking statements concern future circumstances and results and other statements that are not historical facts and are sometimes identified by the words “may,” “will,” “should,” “potential,”
“intend,” “expect,” “endeavor,” “seek,” “anticipate,” “estimate,” “overestimate,” “underestimate,” “believe,” “could,” “project,” “predict,” “continue,” “target” or other similar words or expressions. Forward-looking statements are based upon
current plans, estimates and expectations that are subject to risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary
materially from those indicated or anticipated by such forward-looking statements. The inclusion of such statements should not be regarded as a representation that such plans, estimates or expectations will be achieved. Important factors that
could cause actual results to differ materially from such plans, estimates or expectations include, among others, (1) unexpected costs, charges or expenses resulting from acquisitions, including the GE Transportation merger; (2) uncertainty of
Wabtec’s expected financial performance; (3) failure to realize the anticipated benefits of acquisitions, including as a result of integrating acquired targets into Wabtec; (4) Wabtec’s ability to implement its business strategy; (5) difficulties
and delays in achieving revenue and cost synergies; (6) inability to retain and hire key personnel; (7) evolving legal, regulatory and tax regimes; (8) changes in general economic and/or industry specific conditions, including the impacts of tax
and tariff programs, industry consolidation and changes in the financial condition or operating strategies of our customers; (9) changes in the expected timing of projects; (10) a decrease in freight or passenger rail traffic; (11) an increase in
manufacturing costs; (12) actions by third parties, including government agencies; (13) the severity and duration of the evolving COVID-19 pandemic and the resulting impact on the global economy and, in particular, our customers, suppliers and
end-markets; and (14) other risk factors as detailed from time to time in Wabtec’s reports filed with the SEC, including Wabtec’s annual report on Form 10-K, periodic quarterly reports on Form 10-Q, periodic current reports on Form 8-K and other
documents filed with the SEC. The foregoing list of important factors is not exclusive. Any forward-looking statements speak only as of the date of this communication. Wabtec does not undertake any obligation to update any forward-looking
statements, whether as a result of new information or development, future events or otherwise, except as required by law. Readers are cautioned not to place undue reliance on any of these forward-looking statements.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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WESTINGHOUSE AIR BRAKE
TECHNOLOGIES CORPORATION
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By:
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/s/ Patrick D. Dugan
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Patrick D. Dugan
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Executive Vice President and Chief Financial Officer
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Date: July 29, 2021
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Exhibit 99.1
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News Release |
Wabtec Reports 2nd Quarter 2021 Results;
Updates 2021 Guidance
| • |
Strong Cash Flow from Operations of $223 Million; Year-to-Date Cash Flow From Operations of $515 Million
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Second Quarter Reported GAAP Earnings Per Share of $0.66; Adjusted EPS of $1.06
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| • |
Raising Full-Year Sales, GAAP EPS and Adjusted EPS Guidance
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12-month Backlog Highest Since 2nd Quarter 2019; Year-To-Date Book-To-Bill Above 1.0
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On-track to Deliver $250 Million Run-Rate of Synergies From GE Transportation Merger in 2021
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PITTSBURGH, July 29, 2021 – Wabtec Corporation (NYSE: WAB) today reported second quarter 2021 earnings per diluted share of $0.66 and adjusted earnings per diluted share of $1.06, versus earnings per diluted share of $0.46 and adjusted earnings
per diluted share of $0.87 a year ago. Total sales were $2.0 billion and cash from operations was strong at $223 million.
“Our team delivered strong execution in the second quarter and strengthened our financial position, despite severe disruption in India stemming from the pandemic, continued
challenges in our OE end-markets and inflationary pressures globally,” said Rafael Santana, Wabtec’s president and chief executive officer. “As a result of this performance and the team’s disciplined execution, coupled with our solid balance sheet,
strong cash flow, backlog and the outlook for the remainder of the year, we’re raising Wabtec’s full-year revenue and earnings per share guidance, and are confident we will continue to position the company for long-term profitable growth.”
2021 Financial Guidance
| • |
Wabtec updated its 2021 sales guidance to a range of $7.9 billion to $8.2 billion, GAAP earnings per diluted share guidance to between $2.87 to $3.07 and adjusted earnings per diluted share to between $4.15 to $4.35. The adjusted
guidance excludes estimated expenses for restructuring, transaction and amortization expenses.
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| • |
With cost actions and synergies stemming from the Wabtec and GE Transportation merger on-track, we expect to achieve a run rate savings of $250 million in 2021, as well as margin expansion through continued cost actions. For full year
2021, Wabtec expects strong cash flow generation with operating cash flow conversion greater than 90%.
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News Release |
2021 Second Quarter Consolidated Results
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Sales were $2.0 billion versus $1.7 billion in the same period a year ago. Organic sales increased by $153 million, while acquisitions added sales of $38 million and favorable foreign currency exchange rates increased sales by $84 million
versus the second quarter a year ago. The organic increase compared to the year-ago quarter was primarily driven by higher sales in Transit, Freight Services and Components, offset partially by lower sales in Freight Equipment.
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Income from operations was $203 million (10.1 percent of sales) and adjusted income from operations was $306 million (15.2 percent of sales). Adjusted income from operations improved 16.5 percent from last year as result of higher sales
in Freight and Transit, along with the realization of synergies and cost actions. Adjusted income from operations excluded pre-tax expenses of $103 million, of which $73 million is for non-cash amortization expense and $30 million is for
restructuring and transaction costs (see reconciliation table).
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Net interest expense declined 13 percent from last year to $45 million due to lower debt levels. The effective tax rate for the quarter was 25.8 percent, while the adjusted effective tax rate was 25.3 percent.
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EBITDA, which Wabtec defines as earnings before interest, taxes, depreciation and amortization was $338 million and adjusted EBITDA was $368 million. Adjusted EBITDA excluded pre-tax expenses of $30 million for transaction and
restructuring costs (see reconciliation table).
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2021 Second Quarter Freight Segment Results
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Freight segment sales of $1.34 billion increased by 11 percent from the year-ago quarter. The increase was due to higher organic sales of $73 million, $38 million from the acquisition of Nordco and $21 million from favorable foreign
currency exchange rates. Organic Freight segment sales benefited from higher demand of locomotive and railcar Components, and Services as result of higher modernizations, lower equipment parking and higher utilization. This growth was offset
by on-going disruption due to the COVID-19 pandemic and lower deliveries of locomotives in North America.
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| • |
Freight segment income from operations was $173 million (13.0 percent of segment sales) and adjusted income from operations of $247 million (18.5 percent of segment sales). Freight segment adjusted income from operations increased 7.8
percent from the year-ago quarter primarily driven by higher segment sales, realization of synergies and lower operating costs offset somewhat by lower absorption of fixed costs due to decreased locomotive deliveries and higher input costs.
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2021 Second Quarter Transit Segment Results
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Transit segment sales of $676 million increased by 27 percent from the year-ago quarter. Organic sales increased by $81 million, while favorable foreign currency exchange rates increased sales by $63 million. Organic transit segment sales
increased from higher original equipment (OE) and aftermarket sales driven by recovery from the COVID-19 pandemic and increased global infrastructure investment.
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| • |
Transit segment income from operations was $45 million (6.7 percent of segment sales) and adjusted income from operations was $73 million (10.8 percent of segment sales). Transit segment adjusted income from operations increased from the
year-ago quarter by 42.7 percent primarily driven by lessening disruption caused by the COVID-19 pandemic partially offset by a warranty adjustment in the second quarter 2021 and higher mix of OE sales.
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News Release |
Backlog
At June 30, 2021 the 12-month backlog was $5.8 billion which was $117 million higher than March 31, 2021 as a result of increased orders for Freight Equipment, Components
and Digital Electronics. The 12-month backlog was at the highest level since March 31, 2019. At June 30, 2021, Wabtec’s total multi-year backlog was $21.5 billion.
Cash Flow and Liquidity Summary
| • |
Year-to-date the company generated cash from operations of $515 million versus $229 million in the same period of 2020. The strong cash performance during the second quarter was driven by good operational performance and focused working
capital management. The company generated cash from operations of $223 million for the second quarter compared to $311 million a year ago.
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| • |
At the end of the quarter, the company had cash and cash equivalents of $454 million and debt of $4.1 billion. At June 30, 2021 the company’s total available liquidity, which includes $454 million in cash and cash equivalents plus $1.2
billion available under current credit facilities, was $1.7 billion.
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| • |
During the second quarter, the company successfully completed a €500 million Euro Green bond offering, the proceeds of which are intended to further fund investments in sustainable rail projects.
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Conference Call Information
Wabtec will host a call with analysts and investors at 8:30 a.m., ET, today. To listen via webcast, go to Wabtec’s new website at www.WabtecCorp.com and click on
“Events & Presentations” in the “Investor Relations” section. Also, an audio replay of the call will be available by calling 1-877-344-7529 or 1-412-317-0088 (access code: 10156180).
Wabtec Corporation is a leading global provider of equipment, systems, digital solutions and value-added services for freight and transit rail. Drawing on nearly four
centuries of collective experience across Wabtec, GE Transportation and Faiveley Transport, the company has unmatched digital expertise, technological innovation, and world-class manufacturing and services, enabling the digital-rail-and-transit
ecosystems. Wabtec is focused on performance that drives progress, creating transportation solutions that move and improve the world. The freight portfolio features a comprehensive line of locomotives, software applications and a broad selection of
mission-critical controls systems, including Positive Train Control (PTC). The transit portfolio provides highly engineered systems and services to virtually every major rail transit system around the world, supplying an integrated series of
components for buses and all train-related market segments that deliver safety, efficiency and passenger comfort. Along with its industry-leading portfolio of products and solutions for the rail and transit industries, Wabtec is a leader in mining,
marine, and industrial solutions. Based in Pittsburgh, PA, Visit: www.WabtecCorp.com
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News Release |
Information about non-GAAP Financial Information and Forward-Looking Statements
Wabtec’s earnings release and 2021 financial guidance mentions certain non-GAAP financial performance measures, including adjusted gross profit, adjusted operating
expenses, adjusted operating margin, EBITDA, adjusted EBITDA, adjusted effective tax rate, adjusted income tax expense, adjusted income from operations, adjusted interest and other expense, adjusted earnings per diluted share and book-to-bill ratio.
Wabtec defines EBITDA as earnings before interest, taxes, depreciation and amortization. Wabtec defines book-to-bill ratio, for which there is no comparable GAAP financial measure, as orders divided by sales. While Wabtec believes these are useful
supplemental measures for investors, they are not presented in accordance with GAAP. Investors should not consider non-GAAP measures in isolation or as a substitute for net income, cash flows from operations, or any other items calculated in
accordance with GAAP. In addition, the non-GAAP financial measures included in this release have inherent material limitations as performance measures because they add back certain expenses incurred by the company to GAAP financial measures,
resulting in those expenses not being taken into account in the applicable non-GAAP financial measure. Because not all companies use identical calculations, Wabtec’s presentation of non-GAAP financial measures may not be comparable to other similarly
titled measures of other companies. Included in this release are reconciliation tables that provide details about how adjusted results relate to GAAP results.
This communication contains “forward-looking” statements as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995, including statements regarding the acquisition by Wabtec of GE Transportation (the “GE Transportation merger”), statements regarding Wabtec’s expectations about
future sales and earnings, and statements about the impact of evolving global conditions on Wabtec’s business. All statements, other than historical facts, including statements regarding synergies from the GE Transportation merger; statements
regarding Wabtec’s plans, objectives, expectations and intentions; and statements regarding macro-economic conditions and evolving production and demand conditions; and any assumptions underlying any of the foregoing, are forward-looking statements.
Forward-looking statements concern future circumstances and results and other statements that are not historical facts and are sometimes identified by the words “may,” “will,” “should,” “potential,” “intend,” “expect,” “endeavor,” “seek,”
“anticipate,” “estimate,” “overestimate,” “underestimate,” “believe,” “could,” “project,” “predict,” “continue,” “target” or other similar words or expressions. Forward-looking statements are based upon current plans, estimates and expectations that
are subject to risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such
forward-looking statements. The inclusion of such statements should not be regarded as a representation that such plans, estimates or expectations will be achieved. Important factors that could cause actual results to differ materially from such
plans, estimates or expectations include, among others, (1) unexpected costs, charges or expenses resulting from acquisitions, including the GE Transportation merger; (2) uncertainty of Wabtec’s expected financial performance; (3) failure to realize
the anticipated benefits of acquisitions, including the GE Transportation merger, including as a result of integrating acquired targets into Wabtec; (4) Wabtec’s ability to implement its business strategy; (5) difficulties and delays in achieving
revenue and cost synergies; (6) inability to retain and hire key personnel; (7) evolving legal, regulatory and tax regimes; (8) changes in general economic and/or industry specific conditions, including the impacts of tax and tariff programs,
industry consolidation and changes in the financial condition or operating strategies of our customers; (9) changes in the expected timing of projects; (10) a decrease in freight or passenger rail traffic; (11) an increase in manufacturing costs;
(12) actions by third parties, including government agencies; (13) the severity and duration of the evolving COVID-19 pandemic and the resulting impact on the global economy and, in particular, our customers, suppliers and end-markets, and (14) other
risk factors as detailed from time to time in Wabtec’s reports filed with the SEC, including Wabtec’s annual report on Form 10-K, periodic quarterly reports on Form 10-Q, periodic current reports on Form 8-K and other documents filed with the SEC.
The foregoing list of important factors is not exclusive. Any forward-looking statements speak only as of the date of this communication. Wabtec does not undertake any obligation to update any forward-looking statements, whether as a result of new
information or development, future events or otherwise, except as required by law. Readers are cautioned not to place undue reliance on any of these forward-looking statements.
Wabtec Investor Contact
Kristine Kubacki, CFA / Kristine.Kubacki@wabtec.com / 412-450-2033
Wabtec Media Contact
Deia Campanelli / Deia.Campanelli@wabtec.com / 773-297-0482
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021 AND 2020
(AMOUNTS IN MILLIONS EXCEPT PER SHARE DATA)
(UNAUDITED)
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Three Months Ended
June 30,
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Six Months Ended
June 30,
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2021
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2020
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2021
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2020
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Net sales
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$
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2,012.3
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$
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1,737.4
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$
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3,842.5
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$
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3,667.3
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||||||||
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Cost of sales
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(1,432.2
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)
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(1,250.7
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)
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(2,728.2
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)
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(2,601.9
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)
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||||||||
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Gross profit
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580.1
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486.7
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1,114.3
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1,065.4
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||||||||||||
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Gross profit as a % of Net Sales
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28.8
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%
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28.0
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%
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29.0
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%
|
29.1
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%
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||||||||
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Selling, general and administrative expenses
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(262.1
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)
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(216.8
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)
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(497.5
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)
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(460.2
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)
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||||||||
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Engineering expenses
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(42.0
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)
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(38.2
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)
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(79.7
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)
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(87.2
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)
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||||||||
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Amortization expense
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(72.7
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)
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(72.3
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)
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(142.2
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)
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(141.3
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)
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||||||||
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Total operating expenses
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(376.8
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)
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(327.3
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)
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(719.4
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)
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(688.7
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)
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||||||||
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Operating expenses as a % of Net Sales
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18.7
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%
|
18.8
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%
|
18.7
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%
|
18.8
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%
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||||||||
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Income from operations
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203.3
|
159.4
|
394.9
|
376.7
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||||||||||||
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Income from operations as a % of Net Sales
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10.1
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%
|
9.2
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%
|
10.3
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%
|
10.3
|
%
|
||||||||
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Interest expense, net
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(44.9
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)
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(51.4
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)
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(92.5
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)
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(104.7
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)
|
||||||||
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Other income (expense), net
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10.3
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6.3
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24.5
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(8.5
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)
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|||||||||||
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Income before income taxes
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168.7
|
114.3
|
326.9
|
263.5
|
||||||||||||
|
Income tax expense
|
(43.5
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)
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(28.5
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)
|
(87.0
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)
|
(66.5
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)
|
||||||||
|
Effective tax rate
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25.8
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%
|
24.9
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%
|
26.6
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%
|
25.2
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%
|
||||||||
|
Net income
|
125.2
|
85.8
|
239.9
|
197.0
|
||||||||||||
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Less: Net (income) loss attributable to noncontrolling interest
|
(0.4
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)
|
1.0
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(2.7
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)
|
1.4
|
||||||||||
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Net income attributable to Wabtec shareholders
|
$
|
124.8
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$
|
86.8
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$
|
237.2
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$
|
198.4
|
||||||||
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Earnings Per Common Share
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||||||||||||||||
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Basic
|
||||||||||||||||
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Net income attributable to Wabtec shareholders
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$
|
0.66
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$
|
0.46
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$
|
1.25
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$
|
1.04
|
||||||||
|
Diluted
|
||||||||||||||||
|
Net income attributable to Wabtec shareholders
|
$
|
0.66
|
$
|
0.46
|
$
|
1.25
|
$
|
1.04
|
||||||||
|
Basic
|
188.6
|
189.8
|
188.5
|
190.3
|
||||||||||||
|
Diluted
|
188.9
|
190.2
|
188.9
|
190.8
|
||||||||||||
|
Segment Information
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||||||||||||||||
|
Freight Net Sales
|
$
|
1,335.9
|
$
|
1,204.7
|
$
|
2,519.2
|
$
|
2,505.7
|
||||||||
|
Freight Income from Operations
|
$
|
173.2
|
$
|
141.5
|
$
|
315.0
|
$
|
303.2
|
||||||||
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Freight Operating Margin
|
13.0
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%
|
11.7
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%
|
12.5
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%
|
12.1
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%
|
||||||||
|
Transit Net Sales
|
$
|
676.4
|
$
|
532.7
|
$
|
1,323.3
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$
|
1,161.6
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||||||||
|
Transit Income from Operations
|
$
|
45.3
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$
|
40.2
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$
|
115.4
|
$
|
108.8
|
||||||||
|
Transit Operating Margin
|
6.7
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%
|
7.5
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%
|
8.7
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%
|
9.4
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%
|
||||||||
|
Backlog Information (Note: 12-month is a sub-set of total)
|
June 30, 2021
|
March 31, 2021
|
||||||||||||||
|
Freight Total
|
$ |
17,836.3
|
$ |
18,005.5
|
||||||||||||
|
Transit Total
|
3,693.3
|
3,666.0
|
||||||||||||||
|
Wabtec Total
|
$ |
21,529.6
|
$ |
21,671.5
|
||||||||||||
|
Freight 12-Month
|
$ |
4,098.1
|
$ |
3,910.2
|
||||||||||||
|
Transit 12-Month
|
1,724.8
|
1,796.0
|
||||||||||||||
|
Wabtec 12-Month
|
$ |
5,822.9
|
$ |
5,706.2
|
||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
|
June 30, 2021
|
December 31, 2020
|
|||||||
|
In millions
|
||||||||
|
Cash and cash equivalents
|
$
|
453.5
|
$
|
598.7
|
||||
|
Receivables, net
|
1,452.6
|
1,412.5
|
||||||
|
Inventories
|
1,661.2
|
1,642.1
|
||||||
|
Other current assets
|
240.9
|
226.5
|
||||||
|
Total current assets
|
3,808.2
|
3,879.8
|
||||||
|
Property, plant and equipment, net
|
1,544.3
|
1,601.6
|
||||||
|
Goodwill
|
8,653.2
|
8,485.2
|
||||||
|
Other intangible assets, net
|
3,876.0
|
3,869.2
|
||||||
|
Other noncurrent assets
|
630.7
|
618.7
|
||||||
|
Total assets
|
$
|
18,512.4
|
$
|
18,454.5
|
||||
|
Current liabilities
|
$
|
2,844.7
|
$
|
3,226.3
|
||||
|
Long-term debt
|
4,079.6
|
3,792.2
|
||||||
|
Long-term liabilities - other
|
1,260.3
|
1,283.3
|
||||||
|
Total liabilities
|
8,184.6
|
8,301.8
|
||||||
|
Shareholders’ equity
|
10,294.4
|
10,122.3
|
||||||
|
Noncontrolling interest
|
33.4
|
30.4
|
||||||
|
Total shareholders’ equity
|
10,327.8
|
10,152.7
|
||||||
|
Total Liabilities and Shareholders’ Equity
|
$
|
18,512.4
|
$
|
18,454.5
|
||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
Six Months Ended June 30,
|
||||||||
|
2021
|
2020
|
|||||||
|
In millions
|
||||||||
|
Operating activities
|
||||||||
|
Net income
|
$
|
239.9
|
$
|
197.0
|
||||
|
Non-cash expense
|
250.6
|
184.0
|
||||||
|
Receivables
|
(28.8
|
)
|
246.1
|
|||||
|
Inventories
|
7.8
|
(30.3
|
)
|
|||||
|
Accounts Payable
|
82.4
|
(148.5
|
)
|
|||||
|
Other assets and liabilities
|
(36.5
|
)
|
(219.7
|
)
|
||||
|
Net cash provided by operating activities
|
515.4
|
228.6
|
||||||
|
Net cash used for investing activities
|
(452.4
|
)
|
(98.2
|
)
|
||||
|
Net cash used for financing activities
|
(212.5
|
)
|
(123.5
|
)
|
||||
|
Effect of changes in currency exchange rates
|
4.3
|
(23.2
|
)
|
|||||
|
Decrease in cash
|
(145.2
|
)
|
(16.3
|
)
|
||||
|
Cash and cash equivalents, beginning of period
|
598.7
|
604.2
|
||||||
|
Cash and cash equivalents, end of period
|
$
|
453.5
|
$
|
587.9
|
||||
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.
|
Wabtec Corporation
Reconciliation of Reported Results to Adjusted Results
|
||||||||||||||||||||||||||||||||||||||||
|
(in millions)
|
Second Quarter 2021 Actual Results
|
|||||||||||||||||||||||||||||||||||||||
|
Net Sales
|
Gross
Profit
|
Operating
Expenses
|
Income from
Operations
|
Interest &
Other Exp
|
Tax
|
Net Income
|
Noncontrolling
Interest
|
Wabtec
Net Income
|
EPS
|
|||||||||||||||||||||||||||||||
|
Reported Results
|
$
|
2,012.3
|
$
|
580.1
|
$
|
(376.8
|
)
|
$
|
203.3
|
$
|
(34.6
|
)
|
$
|
(43.5
|
)
|
$
|
125.2
|
$
|
(0.4
|
)
|
$
|
124.8
|
$
|
0.66
|
||||||||||||||||
|
Restructuring & Transaction costs
|
-
|
21.1
|
8.5
|
29.6
|
-
|
(6.4
|
)
|
23.2
|
-
|
$
|
23.2
|
$
|
0.12
|
|||||||||||||||||||||||||||
|
Non-cash Amortization expense
|
-
|
-
|
72.7
|
72.7
|
-
|
(18.8
|
)
|
54.0
|
-
|
54.0
|
$
|
0.29
|
||||||||||||||||||||||||||||
|
Foreign Exchange Gain
|
-
|
-
|
-
|
-
|
(2.3
|
)
|
0.6
|
(1.8
|
)
|
-
|
(1.8
|
)
|
$
|
(0.01
|
)
|
|||||||||||||||||||||||||
|
Adjusted Results
|
$
|
2,012.3
|
$
|
601.2
|
$
|
(295.6
|
)
|
$
|
305.6
|
$
|
(36.9
|
)
|
$
|
(68.1
|
)
|
$
|
200.6
|
$
|
(0.4
|
)
|
$
|
200.2
|
$
|
1.06
|
||||||||||||||||
|
Fully Diluted Shares Outstanding
|
188.9
|
|||||||||||||||||||||||||||||||||||||||
|
Wabtec Corporation
Reconciliation of Reported Results to Adjusted Results
|
||||||||||||||||||||||||||||||||||||||||
|
(in millions)
|
Second Quarter Year-to-Date 2021 Actual Results
|
|||||||||||||||||||||||||||||||||||||||
|
Net Sales
|
Gross
Profit
|
Operating
Expenses
|
Income from
Operations
|
Interest &
Other Exp
|
Tax
|
Net Income
|
Noncontrolling
Interest
|
Wabtec
Net Income
|
EPS
|
|||||||||||||||||||||||||||||||
|
Reported Results
|
$
|
3,842.5
|
$
|
1,114.3
|
$
|
(719.4
|
)
|
$
|
394.9
|
$
|
(68.0
|
)
|
$
|
(87.0
|
)
|
$
|
239.9
|
$
|
(2.7
|
)
|
$
|
237.2
|
$
|
1.25
|
||||||||||||||||
|
Restructuring & Transaction costs
|
-
|
25.2
|
19.9
|
45.1
|
-
|
(10.7
|
)
|
34.4
|
-
|
$
|
34.4
|
$
|
0.18
|
|||||||||||||||||||||||||||
|
Non-cash Amortization expense
|
-
|
-
|
142.2
|
142.2
|
-
|
(37.8
|
)
|
104.4
|
-
|
104.4
|
$
|
0.55
|
||||||||||||||||||||||||||||
|
Foreign Exchange Gain
|
-
|
-
|
-
|
-
|
(10.9
|
)
|
2.9
|
(8.0
|
)
|
-
|
(8.0
|
)
|
$
|
(0.04
|
)
|
|||||||||||||||||||||||||
|
Adjusted Results
|
$
|
3,842.5
|
$
|
1,139.5
|
$
|
(557.3
|
)
|
$
|
582.2
|
$
|
(78.9
|
)
|
$
|
(132.6
|
)
|
$
|
370.7
|
$
|
(2.7
|
)
|
$
|
368.0
|
$
|
1.94
|
||||||||||||||||
|
Fully Diluted Shares Outstanding
|
188.9
|
|||||||||||||||||||||||||||||||||||||||
|
Wabtec Corporation
Reconciliation of Reported Results to Adjusted Results
|
||||||||||||||||||||||||||||||||||||||||
|
(in millions)
|
Second Quarter 2020 Actual Results
|
|||||||||||||||||||||||||||||||||||||||
|
Net Sales
|
Gross
Profit
|
Operating
Expenses
|
Income from
Operations
|
Interest &
Other Exp
|
Tax
|
Net Income
|
Noncontrolling
Interest
|
Wabtec
Net Income
|
EPS
|
|||||||||||||||||||||||||||||||
|
Reported Results
|
$
|
1,737.4
|
$
|
486.7
|
$
|
(327.3
|
)
|
$
|
159.4
|
$
|
(45.1
|
)
|
$
|
(28.5
|
)
|
$
|
85.8
|
$
|
1.0
|
$
|
86.8
|
$
|
0.46
|
|||||||||||||||||
|
Restructuring & Transaction costs
|
-
|
17.2
|
13.4
|
30.6
|
-
|
(7.7
|
)
|
22.9
|
-
|
$
|
22.9
|
$
|
0.12
|
|||||||||||||||||||||||||||
|
Non-cash Amortization expense
|
-
|
-
|
72.3
|
72.3
|
-
|
(18.0
|
)
|
54.3
|
-
|
54.3
|
$
|
0.29
|
||||||||||||||||||||||||||||
|
Foreign Exchange Gain
|
-
|
-
|
-
|
-
|
0.3
|
(0.1
|
)
|
0.2
|
-
|
0.2
|
$
|
-
|
||||||||||||||||||||||||||||
|
Adjusted Results
|
$
|
1,737.4
|
$
|
503.9
|
$
|
(241.6
|
)
|
$
|
262.3
|
$
|
(44.8
|
)
|
$
|
(54.3
|
)
|
$
|
163.2
|
$
|
1.0
|
$
|
164.2
|
$
|
0.87
|
|||||||||||||||||
|
Fully Diluted Shares Outstanding
|
190.2
|
|||||||||||||||||||||||||||||||||||||||
|
Wabtec Corporation
Reconciliation of Reported Results to Adjusted Results
|
||||||||||||||||||||||||||||||||||||||||
|
(in millions)
|
Second Quarter Year-to-Date 2020 Actual Results
|
|||||||||||||||||||||||||||||||||||||||
|
Net Sales
|
Gross
Profit
|
Operating
Expenses
|
Income from
Operations
|
Interest &
Other Exp
|
Tax
|
Net Income
|
Noncontrolling
Interest
|
Wabtec
Net Income
|
EPS
|
|||||||||||||||||||||||||||||||
|
Reported Results
|
$
|
3,667.3
|
$
|
1,065.4
|
$
|
(688.7
|
)
|
$
|
376.7
|
$
|
(113.2
|
)
|
$
|
(66.5
|
)
|
$
|
197.0
|
$
|
1.4
|
$
|
198.4
|
$
|
1.04
|
|||||||||||||||||
|
Restructuring, Transaction, & Litigation costs
|
-
|
18.6
|
28.9
|
47.5
|
-
|
(12.0
|
)
|
35.5
|
-
|
35.5
|
$
|
0.19
|
||||||||||||||||||||||||||||
|
Non-cash Amortization expense
|
-
|
-
|
141.3
|
141.3
|
-
|
(35.6
|
)
|
105.7
|
-
|
105.7
|
$
|
0.55
|
||||||||||||||||||||||||||||
|
Foreign Exchange Loss
|
-
|
-
|
-
|
-
|
14.1
|
(3.6
|
)
|
10.5
|
-
|
10.5
|
$
|
0.05
|
||||||||||||||||||||||||||||
|
Adjusted Results
|
$
|
3,667.3
|
$
|
1,084.0
|
$
|
(518.5
|
)
|
$
|
565.5
|
$
|
(99.1
|
)
|
$
|
(117.7
|
)
|
$
|
348.7
|
$
|
1.4
|
$
|
350.1
|
$
|
1.83
|
|||||||||||||||||
|
Fully Diluted Shares Outstanding
|
190.8
|
|||||||||||||||||||||||||||||||||||||||
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.
|
Wabtec Corporation
2021 Q2 EBITDA Reconciliation
(in millions)
|
|||||||||||||||||||||||||||||
|
Reported Income
from Operations
|
+ |
Other Income
(Expense)
|
+ |
Depreciation &
Amortization
|
=
|
EBITDA
|
+ |
Restructuring &
Transaction Costs
|
=
|
Adjusted
EBITDA
|
|||||||||||||||||||
|
Consolidated Results
|
$
|
203.3
|
$
|
10.3
|
$
|
124.8
|
$
|
338.4
|
$
|
29.6
|
$
|
368.0
|
|||||||||||||||||
|
Wabtec Corporation
2021 Q2 YTD EBITDA Reconciliation
(in millions)
|
|||||||||||||||||||||||||||||
|
Reported Income
from Operations
|
+ |
Other Income
(Expense)
|
+ |
Depreciation &
Amortization
|
=
|
EBITDA
|
+ |
Restructuring &
Transaction Costs
|
=
|
Adjusted
EBITDA
|
|||||||||||||||||||
|
Consolidated Results
|
$
|
394.9
|
$
|
24.5
|
$
|
243.1
|
$
|
662.5
|
$
|
45.1
|
$
|
707.6
|
|||||||||||||||||
|
Wabtec Corporation
2020 Q2 EBITDA Reconciliation
(in millions)
|
|||||||||||||||||||||||||||||
|
Reported Income
from Operations
|
+ |
Other Income
(Expense)
|
+ |
Depreciation &
Amortization
|
=
|
EBITDA
|
+ |
Restructuring &
Transaction Costs
|
=
|
Adjusted
EBITDA
|
|||||||||||||||||||
|
Consolidated Results
|
$
|
159.4
|
$
|
6.3
|
$
|
116.4
|
$
|
282.1
|
$
|
30.6
|
$
|
312.7
|
|||||||||||||||||
|
Wabtec Corporation
2020 Q2 YTD EBITDA Reconciliation
(in millions)
|
|||||||||||||||||||||||||||||
|
Reported Income
from Operations
|
+ |
Other Income
(Expense)
|
+ |
Depreciation &
Amortization
|
=
|
EBITDA
|
+ |
Restructuring &
Transaction Costs
|
=
|
Adjusted
EBITDA
|
|||||||||||||||||||
|
Consolidated Results
|
$
|
376.7
|
$
|
(8.5
|
)
|
$
|
230.8
|
$
|
599.0
|
$
|
47.5
|
$
|
646.5
|
||||||||||||||||
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION
SALES BY PRODUCT LINE
(UNAUDITED)
|
Three Months Ended June 30,
|
||||||||
|
In millions
|
2021
|
2020
|
||||||
|
Freight Segment
|
||||||||
|
Equipment
|
$
|
327.8
|
$
|
334.9
|
||||
|
Components
|
224.3
|
195.5
|
||||||
|
Digital Electronics
|
161.8
|
165.5
|
||||||
|
Services
|
622.0
|
508.8
|
||||||
|
Total Freight Segment
|
1,335.9
|
1,204.7
|
||||||
|
Transit Segment
|
||||||||
|
Original Equipment Manufacturer
|
$
|
320.4
|
$
|
227.3
|
||||
|
Aftermarket
|
356.0
|
305.4
|
||||||
|
Total Transit Segment
|
676.4
|
532.7
|
||||||
|
Six Months Ended June 30,
|
||||||||
|
In millions
|
2021
|
2020
|
||||||
|
Freight Segment
|
||||||||
|
Equipment
|
$
|
589.6
|
$
|
742.9
|
||||
|
Components
|
426.8
|
415.9
|
||||||
|
Digital Electronics
|
318.3
|
339.1
|
||||||
|
Services
|
1,184.5
|
1,007.8
|
||||||
|
Total Freight Segment
|
2,519.2
|
2,505.7
|
||||||
|
Transit Segment
|
||||||||
|
Original Equipment Manufacturer
|
$
|
607.2
|
$
|
514.3
|
||||
|
Aftermarket
|
716.1
|
647.3
|
||||||
|
Total Transit Segment
|
1,323.3
|
1,161.6
|
||||||
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION
RECONCILIATION OF REPORTED RESULTS TO ADJUSTED RESULTS - BY SEGMENT
(UNAUDITED)
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
|
In millions
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
|
Freight Segment Reported Income from Operations
|
$
|
173.2
|
$
|
141.5
|
$
|
315.0
|
$
|
303.2
|
||||||||
|
Freight Segment Reported Margin
|
13.0
|
%
|
11.7
|
%
|
12.5
|
%
|
12.1
|
%
|
||||||||
|
Restructuring & Transaction costs
|
5.8
|
19.9
|
13.6
|
34.7
|
||||||||||||
|
Non-cash Amortization expense
|
67.7
|
67.5
|
132.2
|
131.6
|
||||||||||||
|
Freight Segment Adjusted Income from Operations
|
$
|
246.7
|
$
|
228.9
|
$
|
460.8
|
$
|
469.5
|
||||||||
|
Freight Segment Adjusted Margin
|
18.5
|
%
|
19.0
|
%
|
18.3
|
%
|
18.7
|
%
|
||||||||
|
Transit Segment Reported Income from Operations
|
$
|
45.3
|
$
|
40.2
|
$
|
115.4
|
$
|
108.8
|
||||||||
|
Transit Segment Reported Margin
|
6.7
|
%
|
7.5
|
%
|
8.7
|
%
|
9.4
|
%
|
||||||||
|
Restructuring & Transaction costs
|
22.9
|
6.3
|
26.7
|
7.4
|
||||||||||||
|
Non-cash Amortization expense
|
5.0
|
4.8
|
10.0
|
9.7
|
||||||||||||
|
Transit Segment Adjusted Income from Operations
|
$
|
73.2
|
$
|
51.3
|
$
|
152.1
|
$
|
125.9
|
||||||||
|
Transit Segment Adjusted Margin
|
10.8
|
%
|
9.6
|
%
|
11.5
|
%
|
10.8
|
%
|
||||||||
Exhibit 99.2
Wabtec 2nd Quarter 2021 Financial Results & Company HighlightsJuly 29, 2021
Forward looking statements & non-GAAP financial information This communication contains
“forward-looking” statements as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995, including
statements regarding the acquisition by Wabtec of GE Transportation (the “GE Transportation merger”), statements regarding Wabtec’s expectations about future sales and earnings and statements about the impact of evolving global conditions on
Wabtec’s business. All statements, other than historical facts, including statements synergies from the GE Transportation merger; statements regarding Wabtec’s plans, objectives, expectations and intentions; and statements regarding
macro-economic conditions and evolving production and demand conditions; and any assumptions underlying any of the foregoing, are forward-looking statements. Forward-looking statements concern future circumstances and results and other
statements that are not historical facts and are sometimes identified by the words “may,” “will,” “should,” “potential,” “intend,” “expect,” “endeavor,” “seek,” “anticipate,” “estimate,” “overestimate,” “underestimate,” “believe,” “could,”
“project,” “predict,” “continue,” “target” or other similar words or expressions. Forward-looking statements are based upon current plans, estimates and expectations that are subject to risks, uncertainties and assumptions. Should one or more
of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. The inclusion of such statements should
not be regarded as a representation that such plans, estimates or expectations will be achieved. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include, among others, (1)
unexpected costs, charges or expenses resulting from acquisitions, including the GE Transportation merger; (2) uncertainty of Wabtec’s expected financial performance; (3) failure to realize the anticipated benefits of acquisitions, including as
a result of integrating acquired targets into Wabtec; (4) Wabtec’s ability to implement its business strategy; (5) difficulties and delays in achieving revenue and cost synergies; (6) inability to retain and hire key personnel; (7) evolving
legal, regulatory and tax regimes; (8) changes in general economic and/or industry specific conditions, including the impacts of tax and tariff programs, industry consolidation and changes in the financial condition or operating strategies of
our customers; (9) changes in the expected timing of projects; (10) a decrease in freight or passenger rail traffic; (11) an increase in manufacturing costs; (12) actions by third parties, including government agencies; (13) the severity and
duration of the evolving COVID-19 pandemic and the resulting impact on the global economy and, in particular, our customers, suppliers and end-markets; and (14) other risk factors as detailed from time to time in Wabtec’s reports filed with the
SEC, including Wabtec’s annual report on Form 10-K, periodic quarterly reports on Form 10-Q, periodic current reports on Form 8-K and other documents filed with the SEC. The foregoing list of important factors is not exclusive. Any
forward-looking statements speak only as of the date of this communication. Wabtec does not undertake any obligation to update any forward-looking statements, whether as a result of new information or development, future events or otherwise,
except as required by law. Readers are cautioned not to place undue reliance on any of these forward-looking statements.This presentation as well as Wabtec’s earnings release and 2021 financial guidance mention certain non-GAAP financial
performance measures, including adjusted gross profit, adjusted operating expenses, adjusted income from operations, adjusted interest and other expense, adjusted operating margin, adjusted income tax expense, adjusted effective tax rate,
adjusted earnings per diluted share, EBITDA and adjusted EBITDA, net debt, cash conversion rate and book-to-bill ratio. Wabtec defines EBITDA as earnings before interest, taxes, depreciation and amortization. Wabtec defines book-to-bill ratio
as new orders divided by sales. While Wabtec believes these are useful supplemental measures for investors, they are not presented in accordance with GAAP. Investors should not consider non-GAAP measures in isolation or as a substitute for net
income, cash flows from operations, or any other items calculated in accordance with GAAP. In addition, the non-GAAP financial measures included in this presentation have inherent material limitations as performance measures because they add
back certain expenses incurred by the company to GAAP financial measures, resulting in those expenses not being taken into account in the applicable non-GAAP financial measure. Because not all companies use identical calculations, Wabtec’s
presentation of non-GAAP financial measures may not be comparable to other similarly titled measures of other companies. Included in this presentation are reconciliation tables that provide details about how adjusted results relate to GAAP
results.
Today’s participants Rafael SantanaPresident & Chief Executive Officer Pat DuganChief Financial
Officer & Executive Vice President Eric GebhardtChief Technology Officer & Executive Vice President Kristine KubackiVice President, Investor Relations PRESENTERS INVESTOR RELATIONS
2Q 2021 overview Proven execution driving growth through the recovery 2nd quarter cash from
operations was negatively impacted by securitization of accounts receivable of $11M. SALES ADJUSTED OPERATING MARGIN ADJUSTED EARNINGS PER SHARE CASH FROM OPERATIONS (1) BACKLOG $1.06 GAAP:
$0.66 $2.0B 15.2% $223M $21.5B Recovery continues across portfolioOrganic sales growth in Transit, Freight Services and Components, offset by lower locomotive deliveriesOn track to achieve $250M synergy run-rate in 2021 … continued focus
on Lean initiatives Robust cash generation … year-to-date cash from operations >$0.5BYear-to-date book-to-bill >1… strong order pipeline for international locomotives 2Q 2021 HIGHLIGHTS GAAP: 10.1%
2Q 2021 wins FDL Advantage engine upgrade International PTCorder with RumoInternational
locomotive order Strategic collaborationBattery technologyHydrogen fuel cells Transit brakes, doors, HVAC orders Recognized for continued commitment to innovation Locomotive modernizations Trip Optimizer Zero-to-Zero €500M green bond
2Q 2021 financial summary SALES 2021 OPERATING INCOME 2021 EPS 2021 Adj 2020 Adj(3) 2021
2020 2021 Adj 2020 Adj(2) $2.0B $203M $0.66 $1.7B $262M $306M $0.87 $1.06 16% Adj. Margin(1) 15.1% 15.2% 2Q 2020 GAAP margin was 9.2% and 2Q 2021 GAAP operating margin was 10.1%.2Q 2020 GAAP operating income was
$159.4 million.2Q 2020 GAAP EPS was $0.46 Solid execution drove sales growth and margin expansion
2Q 2021 Freight segment performance PRODUCT LINE YoY Equipment (2%) Lower loco deliveries
driven by NA; Mining in recovery Components 15% Improving aftermarket & industrial offset by 19% decline in NA OE railcar build Services 22% Improving YoY freight trends drove unparking of locos … Nordco acquisition Digital
Electronics (2%) Order momentum book-to-bill >1 … continued international expansion of PTC; constrained NA capex spend SALES 2021 OPERATING INCOME 2021 BACKLOG 2Q21 1Q21 2020 2021 Adj 2020
Adj(2) $1.3B $173M $1.2B $229M $247M(3) $18.0B $17.8B(4) 19.0% 18.5% 11% 2Q 2020 Freight segment margin was 11.7% and 2Q 2021 Freight segment margin was 13.0%. 2Q 2020 Freight segment operating income was $141.5 million.Freight
segment income from operations was positively impacted by below market intangible amortization of $7 million. Freight segment income was adjusted by the following expenses: $6 million for restructuring and transaction costs and $68 million for
amortization expenses. Foreign exchange rates had a positive $81 million impact on the segment backlog. Adj Margin(1)
2Q 2021 Transit segment performance PRODUCT LINE YoY OE 41% Recovery in global transit spend on
new projects Aftermarket 17% Aftermarket resilient despite COVID resurgence SALES 2021 OPERATING INCOME 2021 BACKLOG 2Q21 1Q21 2020 2021 Adj 2020
Adj(2) $0.68B $45M $0.53B $51M $73M(3) $3.7B $3.7B(4) 9.6% 10.8% 2Q 2020 Transit segment margin was 7.5% and 2Q 2021 Transit segment margin was 6.7%. 2Q 2020 Transit segment operating income was $40.2 million.Transit Segment
income from operations was adjusted by $23 million for restructuring expenses and $5 million for amortization expenses.Foreign exchange rates had a positive $21 million impact on segment backlog. Adj Margin(1) 27%
2Q 2021 orders and backlog TOTAL BACKLOG Backlog provides increased long-term visibility 12-MONTH
BACKLOG Freight 12-month backlog up 14% from 4Q20 … highest level since 3Q19 YTD book-to-bill >1 ... driven by broad based order activity across the portfolio Multi- year backlog
~$21.5B Services Digital Components Transit Equipment ~5% ~50% ~25% ~5% ~15%
Resilient business allows for execution on financial priorities FOCUSED ON CASH
CONVERSION 1H21 1H20 $229M $515M Cash from Ops Strong cash generation … solid cash conversion of net incomeFocused working capital management … YTD benefit from A/R securitization of $82MExecuting on synergy goals … on-track to
achieve $250M run-rate in ’21 STRONG FINANCIAL POSITION 2Q21 2Q20 $4.1B Total Debt $4.5B Strong balance sheet … successfully completed €500M Green bondAdj. net leverage declined to ~2.6x ... committed to maintain investment grade
ratingsDeploying capital to execute on strategic priorities Robust cash generation; investing in high-return opportunities to grow value
Market outlook and guidance (1) Cash from Operations conversion % is defined as GAAP Cash from
Operations divided by GAAP Net Income plus Depreciation & Amortization FREIGHT NA carloads Locomotive & railcar parkings International freight volumes NA railcar production Mining
commodities TRANSIT Infrastructure investment Global ridership 2021 Market Outlook(vs 2020) Prior 2021 Guidance(as of 1Q21 earnings call) Updated 2021 Guidance REVENUES $7.7B to $7.9B $7.9B to $8.2B GAAP EPS $2.80 to
$3.05 $2.87 to $3.07 ADJUSTED EPS $4.05 to $4.30 $4.15 to $4.35 CASH CONVERSION(1) >90% >90%
FLXdrive World’s first battery electric locomotive Loco safety/durability7+ mw432klbs / 76’6
powered axlesLead capable Loco safety/durability2.4 mw416klbs / 73’4 powered axlesDedicated consist FLXdrive 1.0 FLXdrive 2.0 Leveraging DIGITAL SOLUTIONS to deliver superior energy management~ 30% train level fuel savings; ~ 30t nox
removed/YR; ~ 3,000t co2 removed/YR Flxdrive 1.0 demonstration miles 13,320 Gallons of fuel saved 6,207 Major failures 0 Reduction in emissions 11% h h
Carbon-ZeroLocomotives Roadmap to Diesel-Electric(Bio-Diesel and Renewable
Diesel) Battery-ElectricOperating In Consist Battery-Electric Lead Hydrogen HYDROGEN AVAILABILITY GREY H2 BLUE H2 GREEN H2 Locomotive Carbonemissions
Solid foundation for growth and increased shareholder value PROFITABLE GROWTHInnovators of
scalable technologies. Leveraging robust installed base and scale to drive connected products and software, as well as recurring and service revenue streams. MARGIN EXPANSIONLean culture, operational excellence, flexible cost structure. Focus
on improved project execution, productivity, and cost actions across Transit. Delivering on $250M synergy run rate in ‘21. CASH FLOW GENERATIONDisciplined capital allocation to grow shareholder value. Executing on strategic priorities
supported by strong balance sheet. Generating strong cash flow.
Appendix
Income statement Appendix A ( 1 of 2)
Income statement(cont.) Appendix A ( 2 of 2)
Balance sheet Appendix B
Cash flow Appendix C
EPSand non-GAAP Reconciliation Appendix D(1 of 2)
EPSand non-GAAP Reconciliation Appendix D(2 of 2)
EBITDA reconciliation Appendix E
Sales by product line Appendix F
Segment reconciliation Appendix G