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Westinghouse Air Brake Technologies Annual Report, Year Ended Dec 31, 2002

Filing Date
Filed March 31, 2003
Period End
December 31, 2002
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 31, 2003. Cited figures are marked; the original filing is the authoritative source.

Westinghouse Air Brake Technologies Corporation (Wabtec), a Delaware corporation based in Wilmerding, Pa., reported net sales of $696.2 milliona for 2002, down 11.2% from $783.7 million in 2001, as weak freight and transit demand and the completion of a major New York City transit contract reduced sales.

The Freight Group accounted for $443.4 millionb and the Transit Group for $252.8 million. Income from operations fell to $47.5 million from $54.1 million, and interest expense dropped to $16.2 million from $33.5 million, helped by debt reduction. The company reported a net loss of $45.5 million, or $(1.04) per diluted share, driven by a $61.7 million after-tax cumulative effect charge for goodwill written off under SFAS No. 142.

Income from continuing operations was $17.5 millionc, or $0.40 per diluted share. Cash flow weakened sharply, with operating cash flow of $15.7 million versus $119.1 million in 2001, which had included proceeds tied to the 2001 sale of assets to GE Transportation Systems for $238 million. Total debt declined to $195.2 million from $241.9 million after the $175 million 9.375% Senior Notes were redeemed in July 2002, and the revolving credit agreement balance rose to $189.7 million.

Shareholders' equity fell to $199.3 milliond from $245.3 million. The company expects 2003 industry deliveries of about 700 new locomotives and 22,000 new freight cars, and says the credit facility expires in November 2004. The filing states that the company's products are on virtually all U.S. locomotives, freight cars and passenger transit vehicles, and that it believes it holds a 50% or greater North American market share for its primary braking equipment.

About 54% of sales are aftermarket. One Transit Group customer accounted for 11% of consolidated sales in both 2002 and 2001.

02—Key points

Key Highlights

  1. Net sales of $696.2 million in 2002, down 11.2% from $783.7 million in 2001, with both the Freight Group ($443.4 million) and Transit Group ($252.8 million) lower.
  2. Net loss of $45.5 million, or $(1.04) per diluted share, including a $61.7 million after-tax goodwill write-off under SFAS No. 142; income from continuing operations was $17.5 million, or $0.40 per diluted share.
  3. Income from operations declined to $47.5 million from $54.1 million; interest expense fell to $16.2 million from $33.5 million.
  4. Operating cash flow dropped to $15.7 million from $119.1 million, and the filing notes a $30 million tax payment in 2002 tied to the 2001 GE asset sale.
  5. Total debt decreased to $195.2 million from $241.9 million after redeeming $175 million of 9.375% Senior Notes in July 2002.
  6. Shareholders' equity declined to $199.3 million from $245.3 million, and the backlog at December 31, 2002 was $418.6 million versus $513.0 million a year earlier.
  7. Management expects 2003 industry deliveries of about 700 new locomotives and 22,000 new freight cars, both below the 10-year averages cited in the filing.

03—Questions

Frequently Asked Questions

  1. Why did Wabtec report a net loss in 2002 when it earned money from continuing operations?

    The net loss of $45.5 million reflects a $61.7 million after-tax, non-cash charge for the cumulative effect of adopting SFAS No. 142, which wrote off goodwill. Income from continuing operations was $17.5 million, or $0.40 per diluted share.

  2. What drove the decline in sales?

    The filing attributes the 11.2% sales decline to weak freight market conditions, lower sales of components for new freight cars and locomotives, a downturn in the locomotive overhaul market, and the completion of a major New York City subway supply contract in the third quarter of 2002.

  3. How did the company's debt and interest costs change?

    Total debt fell to $195.2 million from $241.9 million, and interest expense fell to $16.2 million from $33.5 million. The company redeemed $175 million of 9.375% Senior Notes in July 2002, financing the repayment with cash and credit agreement borrowings, and the revolving credit agreement balance rose to $189.7 million.

  4. What does the company's outlook look like for the rail industry?

    The filing says the company expects about 700 new locomotive deliveries and about 22,000 new freight car deliveries in 2003, both below normal levels. It also expects railroads may return to more typical maintenance spending as the economy strengthens, and it expects transit vehicle deliveries of about 700 units in 2003, with a range of 500-800 units over the next several years.

04—Continue

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