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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Amendment No. 1 to
Current Report
Pursuant to Section 13 or 15(D) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
November 19, 1999
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION
-----------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-13782 25-1615902
- ------------------------------- ------------- -------------------
(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification Number)
1001 Air Brake Avenue, Wilmerding PA 15148
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(Address of principal executive offices)
(412) 825-1000
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(Registrant's telephone number)
Wabtec Corporation
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(Former name or former address, if changed since last report)
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
This Amendment No. 1 to the Current Report on Form 8-K dated as of
November 30, 1999 of the Registrant relates to the acquisition of MotivePower
Industries, Inc., a Pennsylvania corporation ("MotivePower") by Westinghouse Air
Brake Technologies Corporation, formerly known as Westinghouse Air Brake
Company, ("Wabtec", the "Company" or the "Registrant") pursuant to an Amended
and Restated Agreement and Plan of Merger, dated as of September 26, 1999. The
purpose of this amendment is to provide the financial statements of MotivePower
required by Item 7(a) and Item 7(a)(2) of Form 8-K and the pro forma audited
financial information required by Item 7(b) of Form 8-K, which information was
excluded from the original filing in reliance upon Item 7(a)(4) of Form 8-K.
Item 7(a) Financial Statements. The financial statements of MotivePower
described below are incorporated herein by reference.
MotivePower SEC Filings
(SEC File No. 001-13225) Period
- ------------------------ ------
Annual Report on Form 10-K Fiscal Year ended December 31, 1998
Filed with the Commission on March 8, 1999
(Commission File No. 023802) and incorporated
herein by reference.
Quarterly Report on Form 10-Q For the Quarterly Period Ended March 31, 1999
Filed with the Commission on May 14, 1999
(Commission File No. 023802) and incorporated
herein by reference.
Quarterly Report on Form 10-Q For the Quarterly Period Ended June 30, 1999
Filed with the Commission on August 16, 1999
(Commission File No. 023802) and incorporated
herein by reference.
Quarterly Report on Form 10-Q For the Quarterly Period Ended September 30,
1999
Filed with the Commission on November 12,
1999 (Commission File No. 023802) and
incorporated herein by reference.
Item 7(a)(2) Accountants' Report. The accountants' report is filed
herewith.
Item 7(b) Pro Forma Financial Information. The pro forma financial
information of the combined company as of December 31, 1998 and for the years
ended December 31, 1996, 1997 and 1998 is incorporated herein by reference to
Form S-4/A, Registration No. 333-88903, filed on October 15, 1999 and the pro
forma financial information of the combined company as of September 30, 1999 and
for the nine months ended September 30, 1999 and 1998 is filed herewith in Annex
A.
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INDEPENDENT AUDITORS' REPORT
To the Stockholders and Board of Directors
of MotivePower Industries, Inc.:
We have audited the accompanying consolidated balance sheets of MotivePower
Industries, Inc. and subsidiaries as of December 31, 1998 and 1997, and the
related statements of income, cash flows and stockholders' equity for each of
the three years in the period ended December 31, 1998. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of MotivePower Industries, Inc. and
subsidiaries as of December 31, 1998 and 1997, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1998 in conformity with generally accepted accounting principles.
/s/ DELOITTE & TOUCHE LLP
Pittsburgh, Pennsylvania
February 11, 1999 (March 2, 1999 as to Note 18)
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Unaudited Pro Forma Condensed Combined Financial Statements
The following unaudited pro forma condensed combined financial
statements combine the historical consolidated balance sheets and statements of
income of MotivePower and the Company giving effect to the merger using the
pooling of interests method of accounting for a business combination.
The information is derived from the unaudited consolidated financial
statements of MotivePower and Wabtec, for the nine months ended September 30,
1999 and 1998. The information is only a summary and should be read in
conjunction with the historical financial statements and related notes contained
in the annual reports and other information that have been filed with the
Securities and Exchange Commission.
The unaudited pro forma condensed combined statements of income for the
nine months ended September 30, 1999 and 1998 assume the merger was effected on
January 1, 1996. The unaudited pro forma balance sheet gives effect to the
merger as if it had occurred on September 30, 1999. The accounting policies of
MotivePower and Wabtec are substantially comparable. However, adjustments were
made to conform the classification of amortization expense in the unaudited pro
forma condensed combined financial statements.
The unaudited pro forma combined financial information is for
illustrative purposes only. The MotivePower and Wabtec combined company may have
performed differently had they always been combined. The unaudited pro forma
condensed combined financial information may not be indicative of the historical
results that would have been achieved had the companies always been combined or
the future results that the combined company will experience after the merger.
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Unaudited Pro Forma Condensed Combined
Balance Sheet
As of September 30, 1999
Dollars in thousands, except par value
MotivePower Wabtec Pro Forma Pro Forma
(as Reported) (as Reported) Adjustments Combined
----------- ----------- ----------- -----------
Assets
Current Assets
Cash $ 7,935 $ 7,487 $ $ 15,422
Accounts receivable 56,658 123,100 179,758
Inventories 105,308 110,966 216,274
Deferred taxes 7,531 13,132 20,663
Other 9,436 12,344 21,780
--------- --------- --------- -----------
Total current assets 186,868 267,029 -- 453,897
Property, plant and equipment 158,616 236,361 394,977
Accumulated depreciation (64,312) (103,413) (167,725)
--------- --------- --------- -----------
Property, plant and equipment, net 94,304 132,948 -- 227,252
Other Assets
Underbillings - MPI de Mexico 27,318 -- 27,318
Goodwill & other intangibles, net 86,105 192,441 278,546
Other non-current assets 14,573 13,194 27,767
--------- --------- --------- -----------
Total other assets 127,996 205,635 -- 333,631
Total Assets 409,168 605,612 -- 1,014,780
========= ========= ========= ===========
Liabilities and Shareholders' Equity
Current Liabilities
Current portion of long-term debt 572 27,666 28,238
Accounts payable 32,711 45,260 77,971
Accrued income taxes 96 8,228 8,324
Customer deposits 1,193 23,070 24,263
Other accrued liabilities 27,357 45,933 44,100 117,390
--------- --------- --------- -----------
Total current liabilities 61,929 150,157 44,100 256,186
Long-term debt 123,317 413,728 537,045
Reserve for post retirement benefits -- 17,103 17,103
Accrued pension costs -- 3,944 3,944
Deferred income taxes 2,978 3,606 6,584
Commitments and contingencies 16,751 -- 16,751
Other long-term liabilities 1,692 4,198 5,890
--------- --------- --------- -----------
Total liabilities 206,667 592,736 44,100 843,503
Shareholders' Equity
Preferred stock -- -- --
Common stock 263 474 (84) 653
Additional paid-in capital 208,357 109,186 (6,252) 311,291
Treasury stock (6,336) (184,716) 6,336 (184,716)
Unearned ESOP shares (126,191) (126,191)
Retained earnings (870) 219,198 (44,100) 174,228
Deferred Compensation 6,255 (59) 6,196
Accumulated other comprehensive income (loss) (5,168) (5,016) (10,184)
--------- --------- --------- -----------
Total shareholders' equity 202,501 12,876 (44,100) 171,277
--------- --------- --------- -----------
Liabilities and Shareholders' Equity $ 409,168 $ 605,612 $ -- $ 1,014,780
========= ========= ========= ===========
See Accompanying Notes to Unaudited Pro Forma Condensed
Combined Financial Statements
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Unaudited Pro Forma Condensed Combined
Statements of Income
For the Nine Months Ended September 30, 1999
MotivePower Wabtec Pro Forma Pro Forma
(as Reported) (as Reported) Adjustments Combined
------------- ------------- ----------- --------
Net sales $294,347 $ 557,656 $ $ 852,003
Cost of sales 218,752 374,605 593,357
-------- --------- ---------- ---------
Gross profit 75,595 183,051 258,646
Selling, general and administrative expenses 33,880 59,873 (2,970) 90,783
Engineering expenses -- 27,332 27,332
Amortization expense -- 7,724 2,970 10,694
-------- --------- ---------- ---------
Total operating expenses 33,880 94,929 -- 128,809
Income from operations 41,715 88,122 129,837
Other income and expenses
Interest expense 7,136 26,612 33,748
Other income (expense), net 262 (1,000) (738)
-------- --------- ---------- ---------
Income before income taxes and extraordinary item 34,841 60,510 -- 95,351
Income taxes 12,465 22,389 34,854
-------- --------- ---------- ---------
Income before extraordinary item $ 22,376 $ 38,121 $ -- $ 60,497
======== ========= ========== =========
Earnings per common share-Basic:
Income before extraordinary item $ 0.83 $ 1.50 $ -- $ 1.40
======== ========= ========== =========
Earnings per common share-Diluted:
Income before extraordinary item $ 0.80 $ 1.47 $ -- $ 1.36
======== ========= ========== =========
Weighted average basic shares outstanding:
Basic 27,058 25,449 (9,200) 43,307
Diluted 28,046 25,960 (9,536) 44,470
See Accompanying Notes to Unaudited Pro Forma Condensed
Combined Financial Statements
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Unaudited Pro Forma Condensed Combined
Statements of Income
For the Nine Months Ended September 30, 1998
MotivePower Wabtec Pro Forma Pro Forma
(as Reported) (as Reported) Adjustments Combined
------------- ------------- ----------- --------
Net sales $258,720 $490,664 $ $749,384
Cost of sales 196,946 332,487 529,433
-------- -------- --------- --------
Gross profit 61,774 158,177 -- 219,951
Selling, general and administrative expenses 29,395 55,831 (2,406) 82,820
Engineering expenses -- 20,453 20,453
Amortization expense -- 5,873 2,406 8,279
-------- -------- --------- --------
Total operating expenses 29,395 82,157 -- 111,552
-------- -------- --------- --------
Income from operations 32,379 76,020 -- 108,399
Other income and expenses
Interest expense 3,739 22,284 26,023
Other income - Argentina 2,622 2,622
Other income (expense), net 2,989 141 3,130
-------- -------- --------- --------
Income before income taxes and extraordinary item 34,251 53,877 -- 88,128
Income taxes 11,549 20,473 32,022
-------- -------- --------- --------
Income before extraordinary item $ 22,702 $ 33,404 $ -- $ 56,106
======== ======== ========= ========
Earnings per common share-Basic:
Income before extraordinary item $ 0.85 $ 1.33 $ -- $ 1.31
======== ======== ========= ========
Earnings per common share-Diluted:
Income before extraordinary item $ 0.81 $ 1.30 $ -- $ 1.27
======== ======== ========= ========
Weighted average basic shares outstanding:
Basic 26,745 25,046 (9,093) 42,698
Diluted 27,899 25,696 (9,486) 44,109
See Accompanying Notes to Unaudited Pro Forma Condensed
Combined Financial Statements
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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL STATEMENTS
Note 1. Basis of Presentation
The unaudited pro forma condensed combined statements of income are
based on the consolidated financial statements of MotivePower and Wabtec for the
nine months ended September 30, 1999 and 1998. The unaudited pro forma condensed
combined balance sheet is based on the consolidated financial statements of
MotivePower and Wabtec at September 30, 1999.
MotivePower and Wabtec consolidated financial statements are prepared
in conformity with generally accepted accounting principles and require
MotivePower and Wabtec management to make estimates that affect the reported
amounts of assets, liabilities, revenues and expenses and the disclosure of
contingent assets and liabilities. In the opinion of MotivePower and Wabtec, the
unaudited pro forma condensed combined financial statements include all
adjustments necessary to present fairly the results of the periods presented.
Actual results are not expected to differ materially from these estimates.
Note 2. Accounting Policies and Financial Statement Classifications
The accounting policies of MotivePower and Wabtec are substantially
comparable. The unaudited pro forma combined condensed statements of income
reflect reclassification adjustments to conform to the presentation of
amortization expense.
Certain revenues, costs and other deductions in the consolidated
statements of income for Motive Power and Wabtec have been reclassified to
conform to the line item presentation in the pro forma condensed combined
statements of income.
Note 3. Earning Per Share (as reported) and Pro Forma Earnings Per Share
The MotivePower earnings per share (as reported) have been restated to
reflect a three-for-two common stock split in the form of a 50 percent stock
dividend effective April 2, 1999.
The pro forma combined income before extraordinary item per common
share is based on income before extraordinary item and the weighted average
number of outstanding common shares. Income before extraordinary item per common
share - diluted includes the dilutive effect of stock options and restricted
stock awards. The pro forma combined weighted average number of outstanding
common shares has been adjusted to reflect the exchange ratio of 0.66 shares of
Wabtec common stock for each share of MotivePower common stock.
Note 4. Intercompany Transactions
Intercompany sales and purchase transactions were not material between
the two companies and therefore are not reflected as adjustments to the
unaudited pro forma condensed combined financial statements.
Note 5. Merger-Related and Integration-Related Expenses
A merger related charge of $44.1 million, consisting primarily of
merger related fees, restructuring expenses and other integration
related expenses, has been reflected in the Unaudited Pro Forma
Condensed Combined Balance Sheet as of September 30, 1999 and is not
reflected in the Unaudited Pro Forma Condensed Combined Statements of
Income due to its non-recurring nature. The unaudited pro forma
condensed combined financial statements do not reflect the benefits
from expected merger synergies. The $44.1 million charge is based on
management's estimate of the merger-related costs ($70 million), net of
a 37% tax rate.
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Note 6. Other Pro Forma Adjustments
A pro forma adjustment has been made to reflect the cancellation of
MotivePower common stock accounted for as treasury stock and the issuance of
Wabtec common stock in exchange for all of the outstanding MotivePower common
stock based on the exchange ratio of 0.66.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
WESTINGHOUSE AIR BRAKE TECHNOLOGIES
CORPORATION
By: /s/ Robert J. Brooks
--------------------
Name: Robert J. Brooks
Title: Chief Financial Officer
Date: January 27, 2000