Wabtec Reports 2Q EPS of 64 Cents, Cash from Operations of $44 Million and Updates Guidance
July 24 2009 - 7:53AM
PR Newswire (US)
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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