Exhibit 99.1
1001 Air Brake Avenue PRESS RELEASE
[Wabtec logo] Wilmerding, PA 15148
Phone: 412.825.1543
Fax: 412.825.1789
CONTACT: TIM WESLEY AT (412) 825-1543
WABTEC AFFIRMS FOURTH QUARTER 2003 EARNINGS GUIDANCE;
ISSUES EARNINGS GUIDANCE OF ABOUT 70 CENTS FOR FULL YEAR 2004
WILMERDING, Pa., Jan. 12, 2004 -- Wabtec Corporation (NYSE: WAB) today
affirmed its previous earnings guidance for the fourth quarter of 2003 and
issued earnings guidance of about 70 cents per diluted share for the full year
2004. The 2004 guidance represents a growth rate of about 30 percent, compared
to 2003.
"We're pleased to forecast a substantial increase in earnings for the
second consecutive year," said William E. Kassling, Wabtec chairman. "In
addition, our goal is to continue to generate free cash flow in excess of net
income. We expect to use this cash for debt reduction, accretive acquisitions or
other general corporate purposes."
FOURTH QUARTER 2003 EXPECTATIONS
As previously announced, Wabtec expects fourth quarter earnings per diluted
share to be between 13 cents and 16 cents from continuing operations. In
addition, the company expects to meet its 2003 target for free cash from
operations of about $40 million. Wabtec plans to report fourth quarter results
in mid-February, as usual.
FULL YEAR 2004 EXPECTATIONS
"With our original equipment markets expected to strengthen in 2004, a more
favorable product mix and our ongoing application of lean principles, we are
bullish on Wabtec's prospects for this year," said Gregory T.H. Davies,
president and chief executive officer.
The company is basing its 2004 financial guidance on the following
assumptions for industry deliveries of new rolling stock: about 36,000 freight
cars vs. about 31,000 in 2003; about 1,000 locomotives vs. about 750 in 2003;
and about 750 transit cars vs. about 650 in 2003. These original equipment
markets represent about half of total corporate sales, with sales of aftermarket
parts and services providing the other half. The company expects conditions in
its aftermarket-related businesses to continue to be sluggish in 2004, as
railroads and transit authorities continue to minimize maintenance and repair
expenses.
Based on these assumptions, Wabtec expects 2004 sales to be about $750
million, with increases of between 5 percent and 10 percent in both the Freight
Group and the Transit Group. At that level of sales, the company expects 2004
earnings per diluted share of about 70 cents, a growth rate of about 30 percent,
compared to 2003. The company will update its annual earnings guidance as
necessary during the year, but will no longer issue quarterly earnings guidance.
1001 Air Brake Avenue PRESS RELEASE
[Wabtec logo] Wilmerding, PA 15148
Phone: 412.825.1543
Fax: 412.825.1789
"As we work to take full advantage of the rebounding OEM markets in 2004,
we also are strengthening our businesses for the future through internal growth
initiatives," Davies said. "We have an active pipeline of new products,
particularly in the electronics arena, to help our customers improve their
efficiency and competitiveness. We have ample opportunities for international
growth in Europe and the Pacific Rim. Our strategy to leverage Wabtec's full
capabilities as a Tier I supplier of integrated packages has already resulted in
new contracts and sales. And, in driving for continuous improvement, we will
continue to expand the application of lean principles, which provides the engine
to improve margins and reduce working capital. This two-stage growth platform -
recovery of our OEM markets and our internal initiatives - positions Wabtec well
for the future."
Wabtec Corporation (www.wabtec.com) is one of North America's largest
providers of value-added, technology-based products and services for the rail
industry.
This press release contains forward-looking statements regarding the
company's earnings expectations. Wabtec's actual results could differ materially
from the results suggested in any forward-looking statement. Factors that could
cause or contribute to these material differences include, but are not limited
to, a slowdown in the North American economy; lower-than-expected deliveries of
new rolling stock in 2004; and other factors contained in the company's
regulatory filings, which are herein incorporated by reference. The company
assumes no obligation to update these forward-looking statements or advise of
changes in the assumptions on which they were based.
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