WILMERDING, Pa., July 24 /PRNewswire-FirstCall/ -- Wabtec Corporation (NYSE:WAB) today reported its 2009 second quarter results, including the following: -- Earnings per diluted share were 64 cents, including a tax benefit of $9.7 million and pre-tax expenses of about $8.3 million primarily from severance and other costs related to downsizing and consolidation actions. The tax benefit resulted from the successful resolution of certain outstanding tax issues from prior years. The downsizing and consolidation actions are expected to yield $8 million in annualized cost savings. -- Sales decreased to $334 million, as 4 percent growth in the Transit Group was more than offset by lower sales in the Freight Group. Growth in Transit was mainly due to increased sales of components for subway cars, while Freight continued to be affected negatively by the global recession, which has led to sharply lower rail traffic levels. -- During the quarter, the company generated cash from operations of $44 million, or 13% of sales. At June 30, 2009, the company had cash of $121 million and debt of $352 million. -- During the quarter, Wabtec repurchased 379,700 shares of company stock for $12 million. Based on these results and weaker-than-expected conditions in the freight rail market, especially rail traffic and locomotive production, Wabtec updated its 2009 earnings guidance as follows: Revenues are now expected to be about 10 percent lower than in 2008, with earnings per diluted share expected to be between $2.35-$2.55. Previously, the company expected revenues to be slightly down, with EPS expected to be between $2.45-$2.75. Albert J. Neupaver, Wabtec's president and chief executive officer, said: "Despite operating in very difficult market conditions, we posted good results in the second quarter, with strong cash generation and solid strategic progress. Going forward this year, we expect stability in our transit operations, while the freight businesses will continue to be affected negatively by the global recession. In this environment, we will remain focused on applying lean principles and managing what we can manage in the short term -- especially reducing costs and maximizing cash generation -- while continuing to invest prudently in our long-term growth strategies." Wabtec (http://www.wabtec.com/) is a global provider of technology-based products and services for the freight rail and passenger transit industry. This release contains forward-looking statements, such as those regarding expectations about future earnings. Actual results could differ materially from the results suggested in any forward-looking statement. Factors that could cause or contribute to these material differences include, but are not limited to, a further economic slowdown in the markets we serve; a continued decrease in freight rail traffic; and other factors discussed in Wabtec's filings with the Securities and Exchange Commission. Wabtec assumes no obligation to update these statements or advise of changes in the assumptions on which they are based. Wabtec will conduct a conference call with analysts and investors at 10 a.m., eastern time, today. To listen via webcast, please go to http://www.wabtec.com/ and click on the "Webcasts" tab in the "Investor Relations" section. WABTEC CORPORATION CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA) (UNAUDITED) Second Second For the For the Quarter Quarter Six Months Six Months 2009 2008 2009 2008 ---- ---- ---- ---- Net sales $334,013 $390,194 $711,973 $773,521 Cost of sales (242,380) (281,693) (513,855) (559,805) -------- -------- -------- -------- Gross profit 91,633 108,501 198,118 213,716 Gross profit as a % of Net Sales 27.4% 27.8% 27.8% 27.6% Selling, general and administrative expenses (42,346) (42,036) (81,133) (82,481) Engineering expenses (10,765) (9,631) (21,324) (19,612) Amortization expense (1,795) (912) (3,186) (1,815) ------ ---- ------ ------ Total operating expenses (54,906) (52,579) (105,643) (103,908) Operating expenses as a % of Net Sales 16.4% 13.5% 14.8% 13.4% Income from operations 36,727 55,922 92,475 109,808 Income from operations as a % of Net Sales 11.0% 14.3% 13.0% 14.2% Interest (expense) income, net (3,525) (1,293) (8,461) (2,774) Other (expense) income, net (134) (696) 255 (1,079) ---- ---- --- ------ Income from continuing operations before income taxes 33,068 53,933 84,269 105,955 Income tax expense (2,232) (20,171) (20,767) (39,680) ------ ------- ------- ------- Effective tax rate 6.7% 37.4% 24.6% 37.4% Income from continuing operations 30,836 33,762 63,502 66,275 Discontinued operations Income (loss) from discontinued operations (net of tax) - - - (3) -- -- -- -- Net income $30,836 $33,762 $63,502 $66,272 ======= ======= ======= ======= Earnings Per Common Share Basic Income from continuing operations $0.65 $0.70 $1.33 $1.36 Income from discontinued operations - - - - Net income $0.65 $0.70 $1.33 $1.36 Diluted Income from continuing operations $0.64 $0.69 $1.32 $1.35 Income from discontinued operations - - - - Net income $0.64 $0.69 $1.32 $1.35 Weighted average shares outstanding Basic 47,487 48,095 47,594 48,306 ====== ====== ====== ====== Diluted 48,013 48,655 48,088 48,924 ====== ====== ====== ====== Sales by Segment Freight Group $136,079 $199,631 $316,026 $391,397 Transit Group 197,934 190,563 395,947 382,124 ------- ------- ------- ------- Total $334,013 $390,194 $711,973 $773,521 ======== ======== ======== ======== DATASOURCE: Wabtec Corporation CONTACT: Tim Wesley of Wabtec Corporation, +1-412-825-1543, Web Site: http://www.wabtec.com/

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