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    Westinghouse Air Brake Technologies Corp (WAB)

    Board Change

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    Business Description

    Wabtec is a global company that operates in the transportation industry, focusing on the manufacturing and servicing of locomotives and transit vehicles. The company is divided into two main business segments: the Freight Segment and the Transit Segment, which together provide a wide range of products and services, including diesel-electric, battery, and liquid natural gas-powered locomotives, engines, and digital intelligence products like Positive Train Control equipment . Wabtec's operations span over 100 countries, with a significant portion of its sales coming from international customers .

    1. Freight Segment - Manufactures new and modernized locomotives, provides aftermarket parts and services, and supplies components for freight cars. Offers rail control and infrastructure products, software-enabled solutions for safety and efficiency, and services such as locomotive overhauls.
      • Locomotives - Produces diesel-electric, battery, and liquid natural gas-powered locomotives.
      • Aftermarket Parts and Services - Supplies parts and services for maintaining and upgrading freight locomotives.
      • Rail Control and Infrastructure - Provides products and solutions for rail safety and efficiency, including software-enabled solutions.
    2. Transit Segment - Manufactures and services components for passenger transit vehicles, including trains and buses, and refurbishes transit vehicles.
      • Passenger Transit Components - Produces and services parts for trains and buses.
      • Vehicle Refurbishment - Offers refurbishment services for transit vehicles.
    3. Digital Intelligence Products - Develops products such as Positive Train Control equipment and railway electronics.
    4. Transport Intelligence and Logistics Solutions - Provides network optimization and logistics solutions for the transportation industry.
    5. Marine and Mining Products - Offers engines and electric motors for marine and mining applications.

    Key Metrics

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    Executive Team

    NamePositionStart DateShort Bio
    Rafael SantanaPresident and Chief Executive OfficerJuly 1, 2019Rafael Santana has been serving as the President and Chief Executive Officer of Wabtec since July 1, 2019. Before this role, he was the President and CEO of GE Transportation from November 2017 to February 2019. He joined GE in 2000 and held various global leadership roles .
    David L. DeNinnoExecutive Vice President, General Counsel and SecretaryDecember 2016David L. DeNinno was named Executive Vice President, General Counsel and Secretary of Wabtec effective December 2016. Prior to this role, he served as Senior Vice President, General Counsel and Secretary since February 2012 .
    John A. OlinExecutive Vice President and Chief Financial OfficerOctober 1, 2021John A. Olin was named Executive Vice President and Chief Financial Officer of Wabtec effective October 1, 2021. Before joining Wabtec, he served as Senior Vice President and CFO of Harley-Davidson .
    Nicole TheophilusExecutive Vice President and Chief Human Resources OfficerOctober 2020Nicole Theophilus was named Executive Vice President and Chief Human Resources Officer at Wabtec in October 2020. Prior to joining Wabtec, she served as Chief Human Resource Officer of West Corporation from March 2016 through February 2018 .
    Eric GebhardtExecutive Vice President and Chief Technology OfficerOctober 2020Eric Gebhardt was named Executive Vice President and Chief Technology Officer at Wabtec in October 2020. Before joining Wabtec, he served as Managing Director of KCK-US from May 2019 through September 2020 .
    Gina TrombleyExecutive Vice President, Sales & Marketing & Chief Commercial Officer - AmericasSeptember 8, 2020Gina Trombley was named Executive Vice President, Sales & Marketing & Chief Commercial Officer - Americas at Wabtec, effective September 8, 2020. Prior to joining Wabtec, she served in various executive roles at Bombardier Transportation .
    Greg SbroccoExecutive Vice President, Global OperationsFebruary 2019Greg Sbrocco was named Executive Vice President, Global Operations in February 2019. Prior to this, he served as Global Supply Chain Leader for GE Transportation since September 2014 .
    Michael E. FetskoPresident, Freight and Industrial ComponentsJanuary 2017Michael E. Fetsko was named President, Freight and Industrial Components at Wabtec effective January 2017. Prior to this role, he served as Vice President and Group Executive from January 2014 .
    Alicia HammersmithPresident, Freight ServicesApril 2023Alicia Hammersmith was named President, Freight Services in April 2023. Prior to this role, she served as Group Vice President, Transit Operations from 2020 to 2023 .
    Rogerio MendoncaPresident, Freight EquipmentFebruary 2021Rogerio Mendonca was named President, Freight Equipment at Wabtec in February 2021. Prior to this role, he served as Vice President for Baker Hughes starting in July 2017 .
    Nalin JainPresident, Digital IntelligenceDecember 2020Nalin Jain was named President of the Digital Intelligence business at Wabtec effective December 2020. Prior to this role, he served as President, Global Equipment since May 2019 .
    Pascal SchweitzerPresident, TransitApril 2023Pascal Schweitzer was named President, Transit in April 2023. Prior to this role, he served as President, Freight Services from February 2019 to April 2023 .
    Lillian LerouxChief Strategy and Sustainability OfficerApril 2023Lillian Leroux was named Chief Strategy and Sustainability Officer in April 2023. Prior to this role, he served as President, Transit from March 2019 to April 2023 .
    John A. MastalerzSenior Vice President of Finance and Chief Accounting OfficerFebruary 2020John A. Mastalerz was named Senior Vice President of Finance and Chief Accounting Officer at Wabtec in February 2020. Prior to this role, he served as Senior Vice President, Corporate Controller and Principal Accounting Officer from July 2017 to February 2020 .
    Kristine KubackiVice President, Investor RelationsApril 2019Kristine Kubacki was named Vice President of Investor Relations at Wabtec in April 2019. Before joining Wabtec, she worked on Wall Street as a sell-side equity analyst covering industrials from January 2004 to April 2019 .

    Questions to Ask Management

    1. "Given that North American carloads continued to be up but Wabtec's active locomotive fleet was largely flat compared to last year's third quarter, how do you anticipate driving growth in the North American market, and what strategies are you implementing to capitalize on this discrepancy? "

    2. "With the international locomotive orders pipeline being the strongest in the last five years, and significant contracts like the $2 billion MOU with KTZ in Kazakhstan, how are you managing potential risks associated with geopolitical uncertainties in these markets? "

    3. "Can you elaborate on the margin dynamics between your international and North American operations, given that margins vary by country and contract, and how does this variability impact your overall profitability? "

    4. "As you focus on digital acquisitions and expanding your digital portfolio, particularly in international markets where you see gaining momentum, how do you plan to address the softer North American market for digital products and transition to more recurring revenue streams? "

    5. "Despite adjusted gross margin being down modestly due to unfavorable mix, you mentioned that service revenue is expected to shift due to production planning; what steps are you taking to improve margins and stabilize service revenue amidst these fluctuations? "

    Share Repurchase Program

    Program DetailsProgram 1
    Approval DateFebruary 9, 2024
    End Date/DurationNo time limit
    Total additional amount$1 billion
    Remaining authorization amount$123 million (as of September 30, 2024)
    DetailsThe program allows the company to repurchase shares at any time based on market conditions, capital needs, and other factors. Purchases can be made through open market or privately negotiated transactions and may be conducted pursuant to a Rule 10b5-1 plan. The program conforms to the requirements under the 2022 Credit Agreement, the 2024 Credit Agreement, and the indentures for the Senior Notes currently outstanding.

    Debt Maturity Schedule

    YearAmount Due (in millions)Debt TypeInterest Rate (%)% of Total Debt
    2024$5004.15% Senior Notes3.912.4% = (500 / 4,017) * 100
    2025$5003.20% Senior Notes3.412.4% = (500 / 4,017) * 100
    2026$7503.45% Senior Notes3.518.7% = (750 / 4,017) * 100
    2027€500 (~$552)1.25% Senior Notes (EUR)1.513.7% = (552 / 4,017) * 100
    2028$1,2504.70% Senior Notes4.831.1% = (1,250 / 4,017) * 100
    2029$225Term Loan under 2024 Credit Agreement6.75.6% = (225 / 4,017) * 100
    2034$5005.611% Senior Notes5.712.4% = (500 / 4,017) * 100

    Auditor

    NameStart DateEnd DateReason for Change
    Ernst & Young LLP2002PresentCurrent auditor

    Latest news

    Recent developments and announcements about WAB.

    Financial Reporting

      Earnings Report

      ·
      Jan 14, 2025, 12:40 PM

      Wabtec Corporation (NYSE: WAB) has announced its earnings results and strategic acquisition of Evident's Inspection Technologies division. Here are the key highlights:

      Earnings and Financial Performance

      • Evident's Inspection Technologies division is projected to achieve $433 million in revenue for 2024, with an EBITDA of $112 million, reflecting a 25.9% margin.
      • The acquisition is expected to be immediately accretive to Wabtec's adjusted EPS and EBIT margins in the first year of ownership.
      • The purchase price of $1.78 billion (~$1.68 billion after tax benefits) represents a 12.0x multiple of projected 2025 EBITDA, adjusted for transaction and separation costs, tax benefits, and cost synergies.

      Strategic Acquisition Details

      • The acquisition will double Wabtec's Digital Intelligence total addressable market (TAM) from $8 billion to $16 billion.
      • It strengthens Wabtec's portfolio in rail, mining, and industrial sectors, while expanding into high-growth, high-margin complementary sectors.
      • The transaction is expected to close by the end of the first half of 2025, subject to regulatory approvals and customary closing conditions.

      Significant Trends and Impacts

      • The acquisition aligns with Wabtec's strategy to accelerate innovation in scalable technologies and expand its recurring revenue streams.
      • Evident's Inspection Technologies division brings advanced capabilities in Non-Destructive Testing (NDT), Remote Visual Inspection (RVI), and Analytical Instruments (ANI), which are critical for ensuring the safety and reliability of mission-critical assets.
      • The integration is expected to generate $25 million in run-rate cost synergies by the end of year three, with additional revenue synergies anticipated.

      Conference Call Information

      • Wabtec hosted a call with analysts and investors at 8:30 a.m. Eastern Time on January 14, 2025, to discuss the acquisition. A replay is available via Wabtec's website or by calling the provided numbers.

      This acquisition positions Wabtec for accelerated growth in its Digital Intelligence business, enhancing its ability to deliver innovative solutions globally while driving shareholder value.

    Corporate Leadership

      Board Change

      ·
      Dec 4, 2024, 7:54 PM

      Juan Perez has been elected to the Board of Directors of Westinghouse Air Brake Technologies Corporation, effective January 29, 2025. He will join the class of directors whose term expires in 2025 and will be part of the Audit Committee, the Governance and Sustainability Committee, and the Environmental, Social and Governance Subcommittee .