Wabtec Reports 3Q EPS Of 57 Cents, Cash From Operations of $51 Million And Updates Guidance

WILMERDING, Pa., Oct. 29 /PRNewswire-FirstCall/ -- Wabtec Corporation (NYSE: WAB) today reported its 2009 third quarter results, including the following:

• Earnings per diluted share were 57 cents.
• Income from operations was $46 million, or 13.8 percent of sales compared to 13.2 percent of sales in the year-ago quarter. The increase in operating margin was due to cost reduction initiatives and other benefits from the Wabtec Performance System.
• Sales decreased to $330 million, due mainly to lower sales in the Freight Group, which has been affected negatively by sharply lower rail traffic levels.
• Cash generated from operations was $51 million, or 15 percent of sales. At Sept. 30, 2009, Wabtec had cash of $255 million and debt of $432 million. Following the end of the quarter, the company acquired Unifin International for $93 million, which reduced cash on hand by that amount.
  

Based on its third quarter results and outlook for the rest of the year, Wabtec updated its 2009 guidance as follows: Revenues are now expected to be about 12 percent lower than 2008, with earnings per diluted share expected to be between $2.40-$2.50. Previously, the company expected revenues to be down about 10 percent, with EPS expected to be between $2.35-$2.55.

Albert J. Neupaver, Wabtec's president and chief executive officer, said: "Market conditions continued to be very difficult in the third quarter for our freight rail business, while the Transit Group remained stable. Even in this environment, we still improved margins and generated strong cash flow. We will continue to manage what we can in the short term, while remaining focused on our long-term strategies and growth opportunities, such as the acquisition of Unifin International. With annual sales of about $45 million, Unifin is a leading manufacturer of cooling systems and related equipment for the power generation and transmission industry. We expect it to be a strategic complement to our Young Touchstone unit, which is well established in the industrial cooling systems market."

Wabtec Corporation (www.wabtec.com) is a global provider of value-added, technology-based products and services mainly for the freight rail and passenger transit industry.

This release contains forward-looking statements, such as statements regarding the company's 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, an economic slowdown in the markets we serve; a 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.

                                WABTEC CORPORATION
                  CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
          FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
                   (DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
                                    (UNAUDITED)

                                 Third     Third      For the      For the
                                Quarter   Quarter  Nine Months  Nine Months
                                  2009      2008         2009         2008
                                  ----      ----         ----         ----

    Net sales                  $330,455  $396,017   $1,042,428   $1,169,538
    Cost of sales              (235,629) (288,343)    (749,484)    (848,148)
                               --------  --------     --------     --------
      Gross profit               94,826   107,674      292,944      321,390
      Gross profit as
       a % of Net Sales           28.7%     27.2%        28.1%        27.5%

    Selling, general and
     administrative expenses    (37,395)  (43,841)    (118,528)    (126,322)
    Engineering expenses        (10,157)   (9,713)     (31,481)     (29,325)
    Amortization expense         (1,515)   (1,666)      (4,701)      (3,481)
                                 ------    ------       ------       ------
      Total operating
       expenses                 (49,067)  (55,220)    (154,710)    (159,128)
      Operating expenses as
       a % of Net Sales           14.8%     13.9%        14.8%        13.6%

        Income from operations   45,759    52,454      138,234      162,262
        Income from operations
         as a % of Net Sales      13.8%     13.2%        13.3%        13.9%

    Interest (expense) income,
     net                         (3,687)   (1,943)     (12,148)      (4,717)
    Other (expense) income, net     394      (100)         649       (1,179)
                                    ---      ----          ---       ------
        Income from continuing
         operations before
         income taxes            42,466    50,411      126,735      156,366

    Income tax expense          (15,118)  (17,241)     (35,885)     (56,921)
                                -------   -------      -------      -------
        Effective tax rate        35.6%     34.2%        28.3%        36.4%

        Income from
         continuing
         operations              27,348    33,170       90,850       99,445

    Discontinued operations
        Income (loss) from
         discontinued
         operations
         (net of tax)                 -         -            -           (3)
                                      -         -            -           --

        Net income              $27,348   $33,170      $90,850      $99,442
                                =======   =======      =======      =======

      Earnings Per Common Share
                Basic
        Income from
         continuing
         operations               $0.58     $0.68        $1.90        $2.05
        Income from
         discontinued
         operations                   -         -            -            -
        Net income                $0.58     $0.68        $1.90        $2.05

               Diluted
        Income from
         continuing
         operations               $0.57     $0.68        $1.89        $2.03
        Income from
         discontinued
         operations                   -         -            -            -
        Net income                $0.57     $0.68        $1.89        $2.03

    Weighted average
     shares outstanding
        Basic                    47,289    48,161       47,537       48,269
                                 ======    ======       ======       ======
        Diluted                  47,752    48,827       48,019       48,918
                                 ======    ======       ======       ======

          Sales by Segment
    Freight Group              $124,453  $183,276     $440,479     $574,673
    Transit Group               206,002   212,741      601,949      594,865
                                -------   -------      -------      -------
        Total                  $330,455  $396,017   $1,042,428   $1,169,538
                               ========  ========   ==========   ==========

SOURCE Wabtec Corporation