Wabtec Reports Operating Results (10-Q)
Wabtec has a market cap of $2.18 billion; its shares were traded at around $45.34 with a P/E ratio of 18.8 and P/S ratio of 1.6. The dividend yield of Wabtec stocks is 0.1%. Wabtec had an annual average earning growth of 10.9% over the past 10 years.WAB is in the portfolios of John Keeley of Keeley Fund Management, Chuck Royce of Royce& Associates, Ron Baron of Baron Funds, Columbia Wanger of Columbia Wanger Asset Management, Columbia Wanger of Columbia Wanger Asset Management, Steven Cohen of SAC Capital Advisors, Manning & Napier Advisors, Inc, First Pacific Advisors of First Pacific Advisors, LLC.
Highlight of Business Operations: in September 2009, the bill has been extended through December 2010, with funding at about 2009 levels. Spending in 2011 is expected to increase by about 5%, although a new bill has not yet been passed. In early 2009, the U.S. federal government passed new spending legislation designed to stimulate the U.S. economy, with up to $20 billion to be spent on freight and passenger transportation, as follows: $8.4 billion for public transportation, $8 billion for high-speed rail, $1.5 billion for discretionary intermodal projects, and $1.3 billion for AMTRAK. Most of this funding has already been allocated to specific projects, and Wabtec expects to benefit slightly from this additional spending, as transit authorities invest in new locomotives and buses.
Freight Group sales increased by $53.9 million, or 39.6%, due to higher sales of $14.3 million for electronics and specialty products, $4.3 million for remanufacturing, overhaul and build, $3.3 million for brake products and $20.5 million from acquisitions. For the Freight Group, net sales were increased by $3.9 million due to favorable effects of foreign exchange on sales mentioned above.
Transit Group sales decreased by $13.0 million or 3.3% primarily due to decreased sales of $13.8 million for brake products and $7.2 million for other transit-related products. Offsetting those decreases was an increase in sales of $6.4 million for remanufacturing, overhaul and build of locomotives. For the Transit Group, net sales were increased by $2.0 million due to favorable effects of foreign exchange on sales mentioned above.
Investing activities Cash used for investing activities in the first six months of 2010 was $44.5 million as compared to cash used for investing activities of $9.8 million for the same period of 2009. Capital expenditures were $7.0 million and $8.7 million in the first six months of 2010 and 2009, respectively. During the first six months of 2010 the Company received $2.4 million as part of the working capital settlement for the Ricon acquisition. During the first six months of 2010, Wabtec acquired Xorail, a provider of signal engineering and design services for $39.9 million, net of cash received. During the first six months of 2009 the Company sold a facility for net cash proceeds of $3.6 million to an unrelated third party. While certain portions of the building are being leased back, this transaction resulted in a gain of $2.1 million and deferred gain of $0.6 million. The deferred gain will be recognized over five years.
Financing activities In the first six months of 2010, cash provided by financing activities was $13.6 million, which included $166.4 million in proceeds from debt and $125.4 million of repayments of debt on the revolving credit facility, $24.8 million of debt repayments on the term loan and other debt, $1.0 million of dividend payments and $6.3 million for the repurchase of 154,600 shares of stock. In the first six months of 2009, cash used for financing activities was $56.0 million, which included $92.0 million of debt repayments and $72.0 million in proceeds from debt on the revolving credit facility, $15.7 million of debt repayments on the term loan and other debt, $1.0 million of dividend payments and $19.7 million for the repurchase of 669,700 shares of stock.
On November 4, 2008, the Company refinanced its existing unsecured revolving credit agreement with a consortium of commercial banks. This 2008 Refinancing Credit Agreement provides the company with a $300 million five-year revolving credit facility and a $200 million five-year term loan facility. The Company incurred $2.9 million of deferred financing cost related to the 2008 Refinancing Credit Agreement. Both facilities expire in January 2013. The 2008 Refinancing Credit Agreement borrowings bear variable interest rates indexed to the indices described below. At June 30, 2010, the Company had available bank borrowing capacity, net of $27.1 million of letters of credit, of approximately $160.9 million, subject to certain financial covenant restrictions.
Read the The complete Report