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Westinghouse Air Brake Technologies Annual Report, Year Ended Dec 31, 1996

Filing Date
Filed March 26, 1997
Period End
December 31, 1996
Security
WAB
In the record · 2016–202610-K1110-Q338-K132

WAB filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 132 current reports (8-K) between 2016 and 2026.

  1. Deal closed8-K · Mar ’17Mar ’17
  2. Leadership change8-K · Jul ’19Jul ’19
  3. Leadership change8-K · Aug ’21Aug ’21
  4. Material agreement8-K · May ’25May ’25

01—Abstract

Summary

Summary of the 10-K filed March 26, 1997. Cited figures are marked; the original filing is the authoritative source.

Westinghouse Air Brake Company (WABCO), now Westinghouse Air Brake Technologies Corporation, reported net sales of $453.5 milliona for 1996, up from $425.0 million in 1995, with the Vapor and Futuris acquisitions contributing $40.7 million of the increase.

Operating income fell to $79.7 millionb from $89.3 million, reflecting lower margins in the locomotive pneumatics and freight car divisions and higher operating expenses. Net income was $32.7 million, or $1.15 per share, compared with $33.7 million, or $1.27 per share, in 1995. Interest expense declined to $26.2 million from $31.0 million, aided by lower interest rates and reduced debt after the 1995 IPO.

By segment, freight car sales declined to $211.1 millionc from $240.5 million on lower OEM deliveries, while locomotive sales rose 21% to $118.5 million on electronic products and passenger transit sales rose to $107.1 million, driven by the Vapor acquisition. Total debt was $341.7 million at year-end 1996, and shareholders' equity was a deficit of $76.2 million. Operating cash flow was $58.9 million.

Backlog was approximately $214 milliond at December 31, 1996. The company disclosed a subsequent event: on March 4, 1997, it agreed to repurchase 4 million shares from Scandinavian Incentive Holding B.V. at $11 per share, totaling $44 million, funded largely by up to $46 million of additional borrowings and expected to close by March 31, 1997, subject to senior noteholder approval. Environmental matters and product liability are described as not presently material, with American Standard indemnifying certain claims.

02—Key points

Key Highlights

  1. Net sales rose to $453.5 million in 1996 from $425.0 million, with Vapor and Futuris acquisitions contributing $40.7 million of the increase.
  2. Operating income declined to $79.7 million from $89.3 million, due to lower margins in locomotive pneumatics and freight car divisions and higher operating expenses.
  3. Net income was $32.7 million, or $1.15 per share, versus $33.7 million, or $1.27 per share, in 1995.
  4. Freight car sales fell to $211.1 million from $240.5 million, while locomotive sales rose 21% to $118.5 million and passenger transit sales increased to $107.1 million.
  5. Total debt was $341.7 million at December 31, 1996, and shareholders' equity was a deficit of $76.2 million.
  6. On March 4, 1997, the company agreed to repurchase 4 million shares from SIH at $11 per share, a $44 million transaction funded mainly by up to $46 million of new borrowings.
  7. Operating cash flow was $58.9 million in 1996, up from $45.8 million in 1995.

03—Questions

Frequently Asked Questions

  1. Why did operating income decline in 1996 despite higher sales?

    The filing attributes the decline to lower margins in the locomotive pneumatics and freight car divisions, along with higher operating expenses and amortization, which more than offset the increase in gross profit. Gross margin fell slightly to 33.8% from 34.4%, mainly due to product mix changes.

  2. What is the stock repurchase from SIH, and how will it be financed?

    On March 4, 1997, the company agreed to buy 4 million shares from Scandinavian Incentive Holding B.V. at $11 per share, for a total of $44 million. The company plans to borrow up to $46 million under its credit facility, which was to be amended to increase revolving availability from $125 million to $140 million. Completion requires senior noteholder approval and is expected by March 31, 1997. The remaining 6 million SIH shares are to be sold to an investor group including Vestar Equity Partners, L.P. and management.

  3. How much debt does the company carry, and what are the key repayment obligations?

    Total debt was $341.7 million at December 31, 1996, including $163.7 million of term loans, $61.0 million of revolving credit notes, $100.0 million of 9 3/8% senior notes due 2005, and a $17.0 million Pulse acquisition note. Scheduled 1997 principal payments total $29.7 million, and total estimated 1997 debt service including interest is $57.0 million.

  4. What drove growth in the company's product lines in 1996?

    Passenger transit sales rose to $107.1 million from $72.2 million, mainly due to the Vapor acquisition, which added $30.1 million. Locomotive sales increased 21% to $118.5 million, driven by electronic safety and braking equipment. Freight car sales decreased 12% to $211.1 million, reflecting a 5% decline in the North American OEM market.

  5. What is the company's backlog and customer concentration?

    Backlog was approximately $214 million as of February 28, 1997, compared with approximately $214 million at December 31, 1996, of which $152 million related to passenger transit products. In 1996, no single customer accounted for more than 10% of net sales, and aftermarket sales comprised about 53% of net sales.

04—Continue

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