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) October 25, 2005
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 October 25, 2005, Westinghouse Air Brake Technologies Corporation (the “Company”) issued a press release reporting, among other things, the Company’s financial results for the quarter and year to date period ended September 30, 2005. 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 October 25, 2005, the Company issued a press release providing, among other things, updated earnings guidance for fiscal year 2005. A copy of the press release is attached to this report as Exhibit 99.1 and the first two paragraphs thereof are incorporated into this Item 8.01 by reference.
| Item 9.01. | Financial Statements and Exhibits. |
| (c) | Exhibits |
The following exhibit is furnished and portions thereof are filed (as described in Item 8.01) with this report on Form 8-K:
| Exhibit No. |
Description | |
| 99.1 | Press release dated October 25, 2005. |
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: October 27, 2005
EXHIBIT INDEX
| Number |
Description |
Method of Filing | ||
| 99.1 | Press release dated October 25, 2005 | Filed herewith. |
Exhibit 99.1
 |
1001 Air Brake Avenue |
 | ||
| Wilmerding, PA 15148 | ||||
| Phone: 412.825.1543 | ||||
| Fax: 412.825.1789 |
| Contact: | Tim Wesley at (412) 825-1543 |
Wabtec Reports Third Quarter EPS Of 31 Cents, Up 55 Percent;
Raises 2005 Annual Guidance To EPS Of About $1.15
WILMERDING, Pa., Oct. 25, 2005 — Wabtec Corporation (NYSE: WAB) today announced that its third quarter 2005 earnings per diluted share increased 55 percent, compared to the year-ago quarter, the sixth consecutive quarter the company has reported an earnings increase. Wabtec also raised its 2005 annual guidance to earnings per diluted share of about $1.15, compared to its previous guidance of about $1.10.
“We posted strong results in the third quarter, including meaningful margin improvement,” said William E. Kassling, Wabtec’s chairman, president and chief executive officer. “We continue to benefit from strong demand in our end markets, which gives us the confidence to raise our earnings guidance for the second time this year. Based on current market conditions and the results we expect to achieve from internal growth and cost-improvement programs, we are optimistic about our prospects.”
2005 Third Quarter Results
In the third quarter of 2005, Wabtec had earnings per diluted share of 31 cents, net income of $15.1 million and EBITDA of $31.9 million. In the third quarter of 2004, the company had earnings per diluted share of 20 cents, net income of $9.4 million and EBITDA of $17 million. The improved results were mainly due to higher sales and margins.
Sales increased 26 percent compared to the prior-year quarter, to $255.9 million, the company’s second-highest quarterly sales figure ever. Sales increased primarily due to strong demand for locomotive and freight car components, and the CoFren acquisition, which closed in the first quarter of this year.
Gross margin was 26.2 percent compared to 24.6 percent in the year-ago quarter and 24.9 percent in the second quarter of 2005. The higher margin was primarily due to increased sales and the company’s cost-improvement programs.
“Our action plans that are focused on improving gross margins, initiated within the past year, are beginning to have a significant impact,” Kassling said. “These actions include lower-cost sourcing, internal productivity programs, and applying our traditional lean principles throughout the organization.”
Operating expenses decreased 1 percent, as slightly lower selling, general and administrative expenses and engineering expense more than offset slightly higher amortization expense. In the year-ago third quarter, SG&A included a litigation charge of $3.2 million.
|
|
1001 Air Brake Avenue |
| ||
| Wilmerding, PA 15148 | ||||
| Phone: 412.825.1543 | ||||
| Fax: 412.825.1789 |
Interest expense, net decreased to $2.2 million, due to the company’s lower debt level and higher interest income. Other expense, net increased to $1.2 million, mainly due to a foreign exchange loss. The company accrued income tax expense at a rate of 35.3 percent in the 2005 third quarter. In the year-ago quarter, Wabtec recorded a tax benefit of $4.9 million, after resolving certain outstanding tax issues from prior years.
At Sept. 30, 2005, the company had debt, net of cash, of $44.2 million (11 percent of total capital), compared to $53.4 million (13 percent of total capital) at June 30, 2005.
Wabtec Corporation (www.wabtec.com) is one of North America’s largest providers of value-added, technology-based products and services for the rail industry.
This release contains forward-looking statements, such as statements regarding the company’s expectations about future earnings and market conditions. 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 slowdown in the North American economy; lower-than-expected orders for new rolling stock; and other factors contained in the company’s regulatory filings, which are herein incorporated by reference. The company assumes no obligation to update these forward-looking statements or advise of changes in the assumptions on which they were based.
The company will conduct a conference call with analysts at 10 a.m., eastern time, today. To listen to the call via webcast, please go to www.wabtec.com.
###
WABTEC CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA
(UNAUDITED)
| Third Quarter 2005 |
Third Quarter 2004 |
For the Nine Months 2005 |
For the Nine Months 2004 |
|||||||||||||
| Net sales |
$ | 255,865 | $ | 202,894 | $ | 764,655 | $ | 597,630 | ||||||||
| Cost of sales |
(188,899 | ) | (152,990 | ) | (574,446 | ) | (447,555 | ) | ||||||||
| Gross profit |
66,966 | 49,904 | 190,209 | 150,075 | ||||||||||||
| Selling, general and administrative expenses |
(30,897 | ) | (31,114 | ) | (90,742 | ) | (83,144 | ) | ||||||||
| Engineering expenses |
(7,995 | ) | (8,381 | ) | (24,848 | ) | (25,450 | ) | ||||||||
| Amortization expense |
(918 | ) | (771 | ) | (2,962 | ) | (2,299 | ) | ||||||||
| Total operating expenses |
(39,810 | ) | (40,266 | ) | (118,552 | ) | (110,893 | ) | ||||||||
| Income from operations |
27,156 | 9,638 | 71,657 | 39,182 | ||||||||||||
| Interest expense, net |
(2,235 | ) | (3,136 | ) | (6,883 | ) | (9,462 | ) | ||||||||
| Other (expense) income, net |
(1,204 | ) | 658 | (2,989 | ) | (875 | ) | |||||||||
| Income from continuing operations before income taxes |
23,717 | 7,160 | 61,785 | 28,845 | ||||||||||||
| Income tax (expense) benefit |
(8,366 | ) | 2,268 | (22,216 | ) | (5,647 | ) | |||||||||
| Income from continuing operations |
15,351 | 9,428 | 39,569 | 23,198 | ||||||||||||
| Discontinued operations |
||||||||||||||||
| Loss from discontinued operations (net of tax) |
(275 | ) | — | (94 | ) | — | ||||||||||
| Net income |
$ | 15,076 | $ | 9,428 | $ | 39,475 | $ | 23,198 | ||||||||
| Earnings Per Common Share Basic |
||||||||||||||||
| Income from continuing operations |
$ | 0.32 | $ | 0.21 | $ | 0.85 | $ | 0.52 | ||||||||
| Loss from discontinued operations |
(0.01 | ) | — | — | — | |||||||||||
| Net income |
$ | 0.32 | * | $ | 0.21 | $ | 0.85 | $ | 0.52 | |||||||
| Diluted | ||||||||||||||||
| Income from continuing operations |
$ | 0.32 | $ | 0.20 | $ | 0.83 | $ | 0.51 | ||||||||
| Loss from discontinued operations |
(0.01 | ) | — | — | — | |||||||||||
| Net income |
$ | 0.31 | $ | 0.20 | $ | 0.83 | $ | 0.51 | ||||||||
| Weighted average shares outstanding |
||||||||||||||||
| Basic |
47,574 | 45,503 | 46,664 | 44,844 | ||||||||||||
| Diluted |
48,311 | 46,276 | 47,409 | 45,577 | ||||||||||||
| Sales by Segment | ||||||||||||||||
| Freight Group |
$ | 200,471 | $ | 146,148 | $ | 589,353 | $ | 426,638 | ||||||||
| Transit Group |
55,394 | 56,746 | 175,302 | 170,992 | ||||||||||||
| Total |
$ | 255,865 | $ | 202,894 | $ | 764,655 | $ | 597,630 | ||||||||
| EBITDA Reconciliation | ||||||||||||||||
| Net income |
$ | 15,076 | $ | 9,428 | $ | 39,475 | $ | 23,198 | ||||||||
| Interest expense |
2,235 | 3,136 | 6,883 | 9,462 | ||||||||||||
| Income tax expense (benefit) |
8,366 | (2,268 | ) | 22,216 | 5,647 | |||||||||||
| Depreciation |
5,344 | 5,892 | 16,722 | 16,726 | ||||||||||||
| Amortization |
918 | 771 | 2,962 | 2,299 | ||||||||||||
| EBITDA |
$ | 31,939 | $ | 16,959 | $ | 88,258 | $ | 57,332 | ||||||||
| 9/30/2005 |
12/31/2004 |
|||||||||||||||
| Debt, Net of Cash Reconciliation |
||||||||||||||||
| Long term debt |
$ | 150,312 | $ | 150,107 | ||||||||||||
| Cash and cash equivalents |
(106,092 | ) | (95,257 | ) | ||||||||||||
| Debt, net of cash |
$ | 44,220 | $ | 54,850 | ||||||||||||
| * | Basic earnings per common share does not add due to rounding. |