01—Abstract
Summary
Summary of the 10-K filed February 21, 2014. Cited figures are marked; the original filing is the authoritative source.
Westinghouse Air Brake Technologies Corporation, doing business as Wabtec Corporation, reported 2013 net sales of $2,566.4 milliona, up from $2,391.1 million in 2012, and net income attributable to Wabtec shareholders of $292.2 million, or $3.01 per diluted share, versus $251.7 million in 2012.
Income from operations rose to $437.3 millionb, or 17.0% of sales, from $392.3 million, or 16.4% of sales. The Transit Segment drove growth, with sales up 31.4% to $1,168.3 million, while the Freight Segment declined 6.9% to $1,398.1 million. Acquisitions contributed $157.9 million of sales in 2013.
Backlog was about $1.69 billionc at December 31, 2013, compared with $1.66 billion a year earlier. Aftermarket sales were about 57% of 2013 total sales, and sales to customers outside the U.S. were about 48%. Cash from operations was $235.7 million, and capital expenditures were $41.2 million.
Total debt rose to $450.7 milliond, including $250.0 million of 4.375% senior notes due 2023 issued in August 2013, and cash was $285.8 million at year end. The filing highlights the Positive Train Control (PTC) mandate, with a December 31, 2015 deadline.
PTC generated about $235 million of revenue in 2013, and the filing notes that railroads have said they cannot meet the deadline, though no change has been made to it. The company also disclosed a definitive agreement signed February 12, 2014 to acquire Fandstan Electric Group Ltd. for approximately $215.0 million, with closing expected in the first quarter of 2014.
02—Key points
Key Highlights
- Net sales rose 7.3% to $2,566.4 million in 2013, and net income increased 16.1% to $292.2 million, or $3.01 per diluted share.
- Transit Segment sales increased 31.4% to $1,168.3 million, while Freight Segment sales decreased 6.9% to $1,398.1 million.
- Income from operations increased to $437.3 million, or 17.0% of sales, compared with $392.3 million, or 16.4% of sales, in 2012.
- Backlog was about $1.69 billion at December 31, 2013; aftermarket sales represented about 57% of 2013 total sales.
- Positive Train Control (PTC) revenue was about $235 million in 2013, with the federal December 31, 2015 deadline unchanged to date.
- In August 2013 the company issued $250.0 million of 4.375% senior notes due 2023; total debt was $450.7 million at year end.
- On February 12, 2014 the company agreed to acquire Fandstan Electric Group Ltd. for approximately $215.0 million, expected to close in the first quarter of 2014.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2013, Westinghouse Air Brake Technologies kept $0.11.
- Revenue$2.57B100.0%
- Cost of revenue−$1.80B70.2%
- Gross profit$764.0M29.8%
- Operating costs−$326.7M12.7%
- Operating income$437.3M17.0%
- Interest, other & tax−$145.1M5.7%
- Net income$292.2M11.4%
Where FY2013 revenue went
$2.57B- Cost of revenue: $1.80B, 70% of revenue
- Net income: $292.2M, 11% of revenue
- R&D: $46.3M, 1.8% of revenue
- SG&A: $262.7M, 10% of revenue
- Other operating costs: $17.7M, 0.7% of revenue
- Interest, other & tax: $145.1M, 5.7% of revenue
Kept 11% as net incomeNet income $292.2M · 11%R&D $46.3M · 1.8%Other operating costs $17.7M · 0.7%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2013filed February 21, 2014Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $2.57B$2.39B | +7.3% |
| Cost of Revenue | $1.80B$1.70B | +6.2% |
| Gross Profit | $764.03M$694.57M | +10.0% |
| R&D Expenses | $46.29M$41.31M | +12.1% |
| SG&A Expenses | $262.72M$245.71M | +6.9% |
| Operating Expenses | $326.72M$302.29M | +8.1% |
| Operating Income | $437.31M$392.28M | +11.5% |
| Net Income | $292.24M$251.73M | +16.1% |
| EPS (Basic) | $3.05$2.62 | +16.4% |
| EPS (Diluted) | $3.01$2.60 | +15.8% |
| Shares Outstanding (Basic) | 95.46M95.47M | 0.0% |
| Shares Outstanding (Diluted) | 96.83M96.74M | +0.1% |
05—Questions
Frequently Asked Questions
How did Wabtec perform financially in 2013?
Net sales were $2,566.4 million, up from $2,391.1 million in 2012. Income from operations was $437.3 million, and net income attributable to Wabtec shareholders was $292.2 million, or $3.01 per diluted share. Cash provided by operating activities was $235.7 million.
Which segment drove growth in 2013?
The Transit Segment grew 31.4% to $1,168.3 million, helped by $85.5 million from acquisitions and higher original equipment transit locomotive and brake sales. The Freight Segment declined 6.9% to $1,398.1 million, mainly due to lower Specialty Products and Electronics sales, partly offset by $72.4 million from acquisitions.
What is the outlook for Positive Train Control revenue?
The filing states that PTC revenue was about $235 million in 2013 and that the federal mandate requires on-board systems by December 31, 2015. Railroads and transit authorities have said they cannot meet that deadline, and various bills have been introduced to extend it, but no change has been made. An extension could affect the rate of industry spending on this technology.
What debt and liquidity does the company have?
Total debt was $450.7 million at December 31, 2013, including $250.0 million of 4.375% senior notes due 2023 and a $200.0 million revolving credit balance. The 2013 Refinancing Credit Agreement provides an $800 million revolving facility expiring December 19, 2018, with about $540.2 million of available borrowing capacity at year end. Cash was $285.8 million.
What acquisitions has the company announced or completed?
In 2013 Wabtec completed Napier Turbochargers, Transdyne, Turbonetics and Longwood, with a combined net purchase price of about $223.5 million in acquisitions cash outflows. On February 12, 2014 it agreed to acquire Fandstan Electric Group Ltd. for approximately $215.0 million, with completion expected in the first quarter of 2014, subject to customary conditions and competition authority clearance.
06—Continue