Wabtec Reports Operating Results (10-Q)
Wabtec has a market cap of $2.21 billion; its shares were traded at around $46.4 with a P/E ratio of 20 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, Manning & Napier Advisors, Inc, Steven Cohen of SAC Capital Advisors, First Pacific Advisors of First Pacific Advisors, LLC.
Highlight of Business Operations: The North American transit industry is driven by government spending and ridership. Spending under SAFETEA-LU, the federal governments transportation funding bill, increased about 6% in 2009, while ridership decreased about 4% due to the recession and its impact on employment levels. Although SAFETEA-LU expired in September 2009, the bill has been extended through December 2010, with funding at about 2009 levels. 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
Freight Group sales decreased by $14.8 million, or 8.2%, due to lower sales of $26.8 million for specialty products, $4.8 million for brake products and $2.9 million for other products. Offsetting those reductions was an increase in sales of $12.7 million from acquisitions. For the Freight Group, net sales were increased by $6.6 million due to favorable effects of foreign exchange on sales mentioned above.
Investing activities Cash used for investing activities in the first three months of 2010 was $41.2 million as compared to cash provided by investing activities of $0.2 million for the same period of 2009. Capital expenditures were $3.6 million and $3.4 million in the first three months of 2010 and 2009, respectively. During the first three months of 2010 the Company received $2.4 million as part of the working capital settlement for the Ricon acquisition. During the first three months of 2010, Wabtec acquired Xorail, a provider of signal
Financing activities In the first three months of 2010, cash provided by financing activities was $27.1 million, which included $111.0 million in proceeds from debt and $67.0 million of repayments of debt on the revolving credit facility, $16.3 million of debt repayments on the term loan and other debt, $0.5 million of dividend payments and $3.1 million for the repurchase of 75,000 shares of stock. In the first three months of 2009, cash used for financing activities was $33.0 million, which included $23.0 million of debt repayments and $6.0 million in proceeds from debt on the revolving credit facility, $8.1 million of debt repayments on the term loan and other debt, $0.5 million of dividend payments and $7.3 million for the repurchase of 290,000 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 March 31, 2010, the Company had available bank borrowing capacity, net of $27.0 million of letters of credit, of approximately $158.0 million, subject to certain financial covenant restrictions.
On July 31, 2006, the Board of Directors authorized the repurchase of up to $50 million of the Companys outstanding shares. On February 20, 2008, the Board of Directors authorized the repurchase of up to an additional $100 million of the Companys outstanding shares. During the first quarter of 2008, the Company completed the $50 million authorization made in 2006. Cumulative purchases under both plans have totaled $105.3 million, leaving $44.7 million under the authorization.
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