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Westinghouse Air Brake Technologies Annual Report, Year Ended Dec 31, 2003

Filing Date
Filed March 15, 2004
Period End
December 31, 2003
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 15, 2004. Cited figures are marked; the original filing is the authoritative source.

Westinghouse Air Brake Technologies Corporation (doing business as Wabtec Corporation) reported 2003 net sales of $717.9 milliona, up from $696.2 million in 2002, and net income of $22.7 million, compared with a net loss of $45.5 million in 2002 that included a $61.7 million after-tax goodwill write-down.

Income from operations rose to $51.7 millionb from $47.5 million, and gross margin increased to 26.4% from 25.8%. The Freight Group accounted for $522.3 million of sales and the Transit Group for $195.6 million; the Transit Group's sales fell 23% as major contracts completed in 2002. Cash generation improved, with operating cash flow of $55.9 million compared with $15.7 million in 2002.

Total debt declined to $190.2 millionc at year-end 2003 from $195.1 million, and cash rose to $70.3 million. The company issued $150 million of 6.875% senior notes due 2013 and, in January 2004, refinanced its bank credit agreement into a $175 million five-year revolving facility. Debt as a percentage of book capitalization is stated as 43% at December 31, 2003, down from 73% at December 31, 2000.

Management expects demand to improve in 2004 for components for new freight cars and locomotives, with the industry expected to deliver about 37,500 new freight cars and about 1,050 new locomotives, while aftermarket demand is not expected to grow. Stated risks include rising steel costs, higher medical and insurance premiums, foreign currency fluctuations, and the outcome of a pending GETS-GS motion seeking damages, along with asbestos-related claims against a subsidiary.

02—Key points

Key Highlights

  1. Net sales rose 3.1% to $717.9 million in 2003, with the Freight Group up to $522.3 million and the Transit Group down to $195.6 million.
  2. Net income was $22.7 million ($0.52 diluted EPS), compared with a net loss of $45.5 million in 2002 that included a $61.7 million after-tax goodwill write-off.
  3. Gross margin improved to 26.4% from 25.8%, and income from operations increased to $51.7 million from $47.5 million.
  4. Operating cash flow more than tripled to $55.9 million from $15.7 million in 2002.
  5. Total debt was $190.2 million at December 31, 2003, and cash increased to $70.3 million; the company issued $150 million of 6.875% senior notes due 2013.
  6. In January 2004 the company refinanced its credit agreement with a $175 million five-year revolving facility expiring in 2009.
  7. Aftermarket sales represented about 56% of 2003 net sales, and the filing states that 2004 aftermarket growth is not expected.

03—Questions

Frequently Asked Questions

  1. How did Wabtec's profitability change in 2003?

    Net income was $22.7 million in 2003 compared with a net loss of $45.5 million in 2002, which included a $61.7 million after-tax goodwill write-down. Income from operations rose to $51.7 million from $47.5 million, helped by higher sales and a gross margin of 26.4%, versus 25.8% in 2002.

  2. How is the company's debt position?

    Total debt was $190.2 million at December 31, 2003, slightly below $195.1 million a year earlier, and cash rose to $70.3 million. The company issued $150 million of 6.875% senior notes due 2013 and refinanced its bank credit agreement in January 2004 with a $175 million five-year revolving facility. The filing states debt as 43% of book capitalization at year-end 2003, down from 73% at December 31, 2000.

  3. What does management expect for 2004?

    Management expects demand to improve in 2004 for components used in new freight cars and locomotives, citing expected industry deliveries of about 37,500 new freight cars and about 1,050 new locomotives. It does not expect growth in the aftermarket, which represented about 56% of sales. Stated challenges include higher steel costs, higher medical and insurance premiums, and foreign currency fluctuations.

  4. Which business segment drove the sales change?

    The Freight Group drove the increase, with sales rising to $522.3 million from $443.4 million on higher sales of components for new freight cars and locomotives and higher international sales. The Transit Group's sales fell to $195.6 million from $252.8 million because a New York City subway contract was completed in 2002 and aftermarket sales were lower.

  5. What legal and environmental matters does the filing disclose?

    The filing discloses asbestos-related bodily injury suits, mostly against subsidiary Railroad Friction Products Corporation, with claims rising since 2000 and the company stating it has not incurred material costs to date. It also discloses a pending GETS-GS motion alleging the company acted beyond a 2000 settlement and license agreement, seeking substantial damages, with a decision awaited. The company states that it is involved in no litigation it believes will have a material adverse effect.

04—Continue

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