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Wabtec Reports Operating Results (10-Q)

November 08, 2010 | About:
10qk

10qk

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Wabtec (WAB) filed Quarterly Report for the period ended 2010-09-30.

Wabtec has a market cap of $2.32 billion; its shares were traded at around $48.48 with a P/E ratio of 19.63 and P/S ratio of 1.66. The dividend yield of Wabtec stocks is 0.08%. 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, Manning & Napier Advisors, Inc, First Pacific Advisors of First Pacific Advisors, LLC.

Highlight of Business Operations:

available, ridership has decreased about 1% during the first half of 2010. Although SAFETEA-LU was scheduled to expire 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 $84.1 million, or 67.6%, due to higher sales of $42.5 million for electronics and specialty products, $9.6 million for brake products, $4.2 million for other products and $25.4 million from acquisitions. For the Freight Group, net sales were increased by $1.8 million due to favorable effects of foreign exchange on sales mentioned above.

Transit Group sales decreased by $38.8 million, or 18.9%, due to lower sales of $14.1 million for brake products, $11.1 million for remanufacturing, overhaul and manufacturing of locomotives and $7.8 million for transit products. Transit Group sales are lower due in part to the completion of major contracts, as well as project delays and budget constraints at municipal transit authorities. For the Transit Group, net sales were decreased by $5.5 million due to unfavorable effects of foreign exchange on sales mentioned above.

Freight Group sales increased by $123.2 million or 28.0% due to higher sales of $30.3 million for electronics and specialty products, $8.2 million for brake products and $58.6 million from acquisitions. For the Freight Group, net sales were increased by $12.2 million due to favorable effects of foreign exchange on sales mentioned above.

Investing activities Cash used for investing activities in the first nine months of 2010 was $103.2 million as compared to cash used for investing activities of $15.4 million for the same period of 2009. Capital expenditures were $12.4 million and $10.9 million in the first nine months of 2010 and 2009, respectively. During the first nine months of 2010 the Company received $2.4 million as part of the working capital settlement for the Ricon acquisition. During the first nine months of 2010, Wabtec acquired Xorail, a provider of signal engineering and design services for $39.9 million, net of cash received, G&B, a manufacturer of railroad track and signaling products for $31.8 million, net of cash received and Bach-Simpson, a manufacturer of safety-related instrumentation for locomotives and transit cars for $12.0 million, net of cash received. During the first nine months of 2010, Wabtec invested $9.5 million in two joint ventures in China. During the first nine 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 nine months of 2010, cash provided by financing activities was $13.7 million, which included $201.4 million in proceeds from debt and $150.4 million of repayments of debt on the revolving credit facility, $32.9 million of debt repayments on the term loan and other debt, $1.4 million of dividend payments and $8.4 million for the repurchase of 206,560 shares of stock. In the first nine months of 2009, cash provided by financing activities was $24.9 million, which included $176.0 million in proceeds from debt and $108.0 million of repayments of debt on the revolving credit facility, $23.3 million of debt repayments on the term loan and other debt, $1.4 million of dividend payments and $19.7 million for the repurchase of 669,700 shares of stock.

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