<PAGE> 1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
COMMISSION FILE NO. 1-13782
WESTINGHOUSE AIR BRAKE COMPANY
(Exact name of registrant as specified in its charter)
Delaware 25-1615902
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1001 Air Brake Avenue
Wilmerding, Pennsylvania 15148
(Address of principal executive offices)
(412) 825-1000
Registrant's telephone number, including area code
Indicate by checkmark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
------ -----
Number of shares of common stock outstanding, excluding unearned ESOP shares,
as of May 1, 1997:
24,632,157
----------
Number of shares of common stock outstanding, including unearned ESOP shares,
as of May 1, 1997:
33,488,733
----------
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<PAGE> 2
WESTINGHOUSE AIR BRAKE COMPANY
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
PART I FINANCIAL INFORMATION
ITEM 1 Financial Statements
Condensed Consolidated Statement of Operations 3
Condensed Consolidated Balance Sheet 4
Condensed Consolidated Statement of Cash Flows 5
Condensed Consolidated Statement of
Shareholders' Equity 6
Notes to Condensed Consolidated Financial Statements 7
ITEM 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
PART II OTHER INFORMATION
Exhibits and Reports on Form 8-K 13
SIGNATURES 14
</TABLE>
<PAGE> 3
WESTINGHOUSE AIR BRAKE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(Dollars in thousands except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------
1997 1996
---- ----
<S> <C> <C>
NET SALES $136,508 $105,731
COST OF SALES 90,948 70,634
-------- --------
Gross Profit 45,560 35,097
SELLING AND MARKETING EXPENSES 5,626 3,556
GENERAL AND ADMINISTRATIVE EXPENSES 9,260 6,274
ENGINEERING EXPENSES 5,997 4,254
AMORTIZATION EXPENSE 2,135 1,792
-------- --------
Total Operating Expenses 23,018 15,876
INCOME FROM OPERATIONS 22,542 19,221
OTHER INCOME AND EXPENSES:
Interest expense 6,871 6,432
Other (income) expense, net (48) (37)
-------- --------
Income before income taxes 15,719 12,826
INCOME TAXES 6,130 5,130
-------- --------
NET INCOME $ 9,589 7,696
======== ========
EARNINGS PER COMMON SHARE $ 0.34 $ 0.27
======== ========
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 28,552 28,482
======== ========
</TABLE>
The accompanying notes are an integral part of this statement.
3
<PAGE> 4
WESTINGHOUSE AIR BRAKE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 1997 AND DECEMBER 31, 1996
(Dollars in thousands)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
---- ----
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 3,986 $ 618
Accounts receivable 78,930 73,507
Inventories 59,731 62,355
Other current assets 14,149 13,689
--------- ---------
Total current assets 156,796 150,169
PROPERTY, PLANT AND EQUIPMENT 164,046 162,324
Less: Accumulated depreciation (67,941) (66,480)
--------- ---------
Property, plant and equipment, net 96,105 95,844
OTHER ASSETS:
Prepaid pension costs 4,648 4,608
Goodwill 60,083 60,490
Intangibles 42,986 44,241
Debt issuance costs 8,923 7,383
Other noncurrent assets 440 501
--------- ---------
Total other assets 117,080 117,223
TOTAL ASSETS $ 369,981 $ 363,236
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 18,200 29,700
Accounts payable 24,858 23,789
Accrued income taxes 6,868 2,634
Advanced deposits 11,679 13,330
Accrued compensation 10,886 10,947
Accrued warranty 8,895 8,172
Accrued interest 5,233 3,532
Other accrued liabilities 7,162 9,889
--------- ---------
Total current liabilities 93,781 101,993
Long-term debt 360,510 311,990
Reserve for Post Retirement Benefits 13,577 13,309
Accrued Pension Costs 5,304 4,724
Deferred Income Taxes 7,414 7,415
--------- ---------
Total liabilities 480,586 439,431
SHAREHOLDERS' EQUITY:
Common stock, $.01 par value;
100,000,000 shares authorized and
47,426,600 shares issued 474 474
Additional paid-in capital 104,171 104,321
Less: Treasury stock, at cost,
13,937,867 and 9,937,867 shares (193,331) (149,331)
Less: Unearned ESOP shares,
8,856,576 and 8,927,565 shares (133,009) (133,914)
Retained earnings 114,671 105,363
Cumulative translation adjustment (3,581) (3,108)
--------- ---------
Total shareholders' equity (110,605) (76,195)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 369,981 $ 363,236
========= =========
</TABLE>
The accompanying notes are an integral part of this statement.
4
<PAGE> 5
WESTINGHOUSE AIR BRAKE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 9,589 $ 7,696
Adjustments to reconcile net income to cash provided by operations:
Depreciation and amortization 6,201 5,144
Provision for contribution to ESOP 755 500
Deferred income taxes -- 208
Changes in certain assets and liabilities:
Accounts receivable (5,693) (6,609)
Inventories 2,510 2,803
Other assets and liabilities 454 3,491
Accounts payable 1,213 (3,131)
Accrued income taxes 4,260 530
Accrued liabilities and advance deposits (1,942) 2,254
-------- --------
Net cash provided by operating activities 17,347 12,886
INVESTING ACTIVITIES:
Purchase of property, plant and equipment, net (4,409) (2,032)
Purchase of Futuris Industrial Products, Ltd. -- (15,040)
-------- --------
Net cash used for investing activities (4,409) (17,072)
FINANCING ACTIVITIES:
Payments of term debt -- (15,000)
Debt issuance fees (2,017) --
Purchase of treasury stock (44,000) (1,547)
Net borrowings on revolving credit arrangements 37,020 21,969
Cash dividends (281) (283)
-------- --------
Net cash provided by (used for) financing activities (9,278) 5,139
FOREIGN CURRENCY TRANSLATION ADJUSTMENT (292) 79
Increase in cash and cash equivalents 3,368 1,032
CASH AND CASH EQUIVALENTS, beginning of period 618 210
-------- --------
CASH AND CASH EQUIVALENTS, end of period $ 3,986 $ 1,242
======== ========
</TABLE>
The accompanying notes are an integral part of this statement.
5
<PAGE> 6
WESTINGHOUSE AIR BRAKE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 1997
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Additional Unallocated Cumulative Total
Common Paid-In Treasury ESOP Retained Translation Shareholders'
Stock Capital Stock Shares Earnings Adjustment Equity
----- ------- ----- ------ -------- ---------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, December 31, 1996 $474 $104,321 $(149,331) $(133,914) $105,363 $(3,108) $ (76,195)
Net income - - - - 9,589 - 9,589
Purchase of treasury stock - - (44,000) - - - (44,000)
Allocation of ESOP shares - (150) - 905 - - 755
Dividends paid - - - - (281) - (281)
Cumulative translation adjustment - - - - - (473) (473)
---- -------- --------- --------- -------- ------- ---------
BALANCE, March 31, 1997 $474 $104,171 $(193,331) $(133,009) $114,671 $(3,581) $(110,605)
==== ======== ========= ========= ======== ======= =========
</TABLE>
The accompanying notes are an integral part of this statement.
6
<PAGE> 7
WESTINGHOUSE AIR BRAKE COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
(Unaudited)
1. BASIS OF PRESENTATION:
The information contained in these financial statements and notes for the
quarter ended March 31, 1997, should be read in conjunction with the financial
statements and notes for the year ended December 31, 1996, contained in the
Company's Annual Report, as filed with the Securities and Exchange Commission
on Form 10-K. The accompanying unaudited Condensed Consolidated Financial
Statements have been prepared in accordance with generally accepted accounting
principles and the rules and regulations of the Securities and Exchange
Commission. These condensed interim statements do not include all of the
information and footnotes required for complete financial statements. It is
management's opinion that all adjustments (including all normal recurring
accruals) considered necessary for a fair presentation have been made; however,
results for the interim period are not necessarily indicative of results to be
expected for the full year.
Earnings Per Share
Earnings per common and common equivalent share is based upon the weighted
average common and common equivalent shares outstanding during the period.
Primary and fully diluted earnings per share are the same.
Employee stock options, when dilutive, are considered common stock equivalents
using the treasury stock method. Also included in the weighted average shares
is the pro-rata amount of the annual allocation of approximately 284,000 shares
to the ESOP participants.
In February 1997, the Financial Accounting Standards Board issued Statement 128,
"Earnings per Share" (FAS 128). This statement is effective for financial
statements for both interim and annual periods ending after December 15, 1997.
The Company currently believes that the effect of adopting FAS 128 will not have
a material impact on its earnings per share.
2. STOCK REDEMPTION
On March 31, 1997, the Company repurchased from Scandinavian Incentive
Holdings, B.V., ("SIH"), 4,000,000 shares of the Company's Common Stock for a
purchase price of $11 per share in cash and an aggregate purchase price of $44
million plus fees and expenses of approximately $2 million (such transaction
being hereinafter referred to as the "Redemption"). The Redemption was effected
pursuant to a Redemption Agreement (the "Redemption Agreement") dated as of
March 5, 1997 among the Company, SIH and Incentive AB, the sole shareholder of
SIH ("Incentive"). Concurrently therewith, SIH sold its remaining 6,000,000
shares of Common Stock to a group of investors consisting of Vestar Equity
Partners, L.P. ("Vestar"), Harvard Private Capital Holdings, Inc. ("Harvard"),
American Industrial Partners Capital Fund II, L.P. ("AIP") and certain members
of management of the Company (the "Management Purchasers") for a purchase price
of $11 per share in cash, pursuant to a Stock Purchase Agreement dated as of
March 5, 1997, which sale was effective as of March 31, 1997 (such transaction
being hereinafter referred to as the "SIH Purchase").
In addition, the Company entered into a Common Stock Registration Rights
Agreement (the "Registration Rights Agreement") dated as of March 5, 1997 among
the Company, Harvard, AIP, the RAC Voting Trust (the "Voting
7
<PAGE> 8
Trust"), Vestar, Vestar Capital Partners, Inc. ("Vestar Capital") and the former
Pulse Shareholders, which Registration Rights Agreement provides for, among
other things, the registration of sales of shares of Common Stock under the
Securities Act of 1933, as amended, by Holders (as defined in the Registration
Rights Agreement) at the expense, subject to certain specified exceptions, of
the Company.
To finance the Redemption, the Company amended its credit agreement with The
Chase Manhattan Bank, The Bank of New York and the other financial institutions
named therein, to increase the revolving credit availability by $15 million
(from $125 million to $140 million) and to obtain a waiver of the requirement
to make a prepayment in an aggregate principal amount equal to 50% of excess
cash flow for 1996, or approximately $11.5 million. The Company borrowed $46
million to fund the Redemption and related expenses.
Also, the Company obtained consents from record owners as of March 3, 1997 of
its 9 3/8% Senior Notes Due 2005 (the "Notes") to certain amendments to a
covenant contained in the Indenture dated as of June 20, 1995 among the
Company, as issuer, and The Bank of New York, as trustee, pursuant to which the
Notes were issued (the "Indenture").
Upon the Company's receipt of the requisite consents, the Indenture was amended
(i) to permit additional Restricted Payments in an amount of approximately $22
million in order to complete the Redemption, and (ii) to permit up to $2
million of additional Restricted Payments to be made in advance of when they
would otherwise have been permitted.
In addition, an Amended and Restated Stockholders Agreement dated as of March 5,
1997 by and among the Voting Trust, Vestar, Harvard, AIP and the Company, and
joined for certain purposes by Vestar Capital, William E. Kassling, Emilio A.
Fernandez, Ofelia B. Fernandez, Robert J. Brooks, John M. Meister, Davideco,
Inc. and Suebro, Inc., as amended by Amendment No. 1 thereto dated as of March
28, 1997 (the "Stockholders Agreement"), was executed in connection with the SIH
Purchase. The Stockholders Agreement contains provisions regarding, among other
things, the disposition and voting of shares of Common Stock by the parties to
such agreement, as well as certain provisions regarding the composition of the
Board of Directors of the Company.
The redemption and related financing has been reflected in the accompanying
March 31, 1997 balance sheet. The following presents the Company's 1997 first
quarter results on a pro forma basis as if this transaction had occurred on
January 1, 1997:
<TABLE>
<CAPTION>
In thousands,
except per share data
---------------------
<S> <C>
Net Income $ 9,100
Earnings per Share $ .37
Weighted Average Shares 24,552
</TABLE>
8
<PAGE> 9
3. INVENTORIES:
Inventories are stated at the lower of cost or market. Cost is determined under
the first-in, first-out (FIFO) method. Inventory costs include material, labor
and overhead. The components of inventory at March 31, 1997, and December 31,
1996 are:
<TABLE>
<CAPTION>
(Dollars in Thousands)
March 31, December 31,
1997 1996
--------- ------------
<S> <C> <C>
Raw materials $18,850 $20,140
Work-in-process 28,684 31,294
Finished goods 12,197 10,921
------- -------
$59,731 $62,355
======= =======
</TABLE>
4. ACQUISITIONS:
Effective January 31, 1996, the Company acquired 100% of the stock of Futuris
Industrial Products Pty. Ltd. (Futuris), an Australian company, for a cash
purchase price of approximately $15 million. Futuris is a leading manufacturer
of brake shoes and disc brake pads for railroads in Australia and the Pacific
Rim, with annual revenues of approximately $10.5 million. The acquisition has
been accounted for under the purchase method and the excess of the purchase
price over the fair value of net assets acquired was approximately $9 million
and has been allocated primarily to goodwill.
On September 19, 1996, the Company acquired from Mark IV Industries Inc. the
Vapor Group (Vapor) for a cash purchase price of approximately $63.9 million.
The transaction, which has been accounted for as a purchase, was effective
September 1, 1996. Pursuant to an earn out provision, the purchase price may be
increased by up to $2 million based on a sales formula. Vapor is the leading
manufacturer of door controls for transit rail cars and metropolitan buses in
the United States, with annual revenues for its most recent fiscal year (prior
to the acquisition) of approximately $65 million. The net tangible assets of
Vapor were approximately $36 million at the date of purchase. The fair market
valuations and allocation of the purchase price to the acquired tangible and
intangible assets have been based upon an independent appraisal. The purchase
price paid in excess of the fair value of the acquired net tangible assets was
approximately $28.2 million and has been allocated to goodwill and other
intangibles.
9
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis by management of financial condition
provides information with respect to the results of operations of the Company
for the three month periods ended March 31, 1997 and 1996, respectively. This
discussion should be read in connection with the information in the condensed
consolidated financial statements and the notes pertaining thereto.
Certain statements in this quarterly report on Form 10-Q are forward-looking
statements concerning the future operations of the Company. Such statements are
made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, and there are many important factors that could
cause actual results to differ materially from those in the forward-looking
statements.
Results of Operations
The following table summarizes sales by market:
<TABLE>
<CAPTION>
For the three months ended
March 31,
1997 1996
---- ----
<S> <C> <C>
Electronics $ 23,093 $ 13,149
Freight Car 44,910 53,235
Transit 37,345 15,772
Locomotive 11,598 10,838
Friction & Other 19,562 12,737
-------- --------
$136,508 $105,731
======== ========
</TABLE>
FIRST QUARTER 1997 COMPARED TO FIRST QUARTER 1996
Net Sales
Net sales increased 29.1% or $30.8 million to $136.5 million in 1997 compared
to $105.7 million in 1996. The acquisitions of Vapor Corporation in September
1996 and Futuris Industrial Products in January 1996 accounted for $23 million
of the increase. Sales of the Company's electronic related products contributed
$9.9 million to the increase, primarily as a result of the mandate on the
two-way end-of-train monitoring device. Transit sales increased to $37.3
million in 1997 compared to $15.8 million in 1996. The acquisition of Vapor
accounted for $18.3 million of this increase.
Sales in the Company's locomotive business increased 7% or $.8 million to $11.6
million in 1997 compared to $10.8 million in 1996. Sales of friction and other
products were 54%, or $6.8 million, higher in the first quarter of 1997 compared
to the same period in 1996. Increased demand for friction materials and
industrial rubber was the primary factor for this increase. Also positively
affecting other sales were sales of thermal boiler related products from the
Company's Vapor subsidiary. For the quarter ended March 31, 1997, sales
increased in all markets with the exception of the freight car market. Freight
car sales declined by $8.3 million to $44.9 million in 1997 compared to $53.2
million in 1996, principally as a result of a decrease in the number of new
freight car deliveries from 14,700 in the first quarter of 1996 to 11,500 in the
first quarter of 1997.
Gross Profit
Gross profit increased $10.5 million, or 29.8% to $45.6 million in 1997 versus
$35.1 million in 1996 while gross profit margins, as a percentage of sales,
were 33.4% in 1997 compared to 33.2% in 1996. Gross profit increased primarily
as a result of the overall 29.1% increase in net sales.
10
<PAGE> 11
Selling and Marketing Expenses
Selling and marketing expenses increased $2.1 million in 1997 compared to 1996
due principally to the 1996 acquisition of Vapor Corporation; with the balance
arising from increased marketing expenses associated with new products.
General and Administrative Expenses
General and administrative expenses increased $2.9 million to $9.2 million in
1997 from $6.3 million in 1996. Approximately half of the increase can be
attributed to the inclusion of Vapor in 1997 expenses. The remainder of the
increase was due to higher corporate expenses associated with international
expansion.
Engineering Expenses
Engineering expenses, which do not include that portion of engineering which
supports manufacturing, increased $1.7 million to $6.0 million in 1997 from
$4.3 million in 1996, due primarily to increased engineering incurred in new
product development, as well as the related effects of the 1996 acquisitions of
Vapor and Futuris.
Amortization Expense
Amortization expense increased $.3 million in 1997 due primarily to the
amortization of intangibles, including goodwill, associated with the
acquisitions of Vapor and Futuris.
Income from Operations
Operating income increased 17.3% to $22.5 million in 1997 from $19.2 million in
1996 due principally to the higher sales volume and associated profit margin.
Interest Expense
Interest expense increased $.4 million to $6.8 million in 1997 from $6.4
million in 1996, due primarily to the incremental borrowing costs of the
acquisitions.
Income Taxes
The provision for income taxes was $6.1 million in 1997 compared to $5.1
million in 1996. The effective tax rate declined from 40.0% in 1996 to 39.0% in
1997, due to the establishment of a Foreign Sales Corporation (FSC) late in
1996 and lower overall state tax rates.
Net Income
While the Original Equipment Manufacturing ("OEM") freight market decreased 22%,
net income increased 24.6% to $9.6 million in 1997 from $7.7 million in 1996,
and earnings per share increased by 25.9% to $.34 from $.27. The continued
implementation of the Company's strategy to become less dependent on the
cyclical freight market contributed to the favorable results in the first
quarter of 1997. The higher sales volume, increased gross profit margin and
lower effective tax rate were also principal reasons for the increase in
profitability.
Liquidity and Capital Resources
The Company has generated cash from operating activities of $17.3 million and
$12.9 million in the first three months of 1997 and 1996, respectively. During
the first quarter of 1997, the Company increased its bank debt obligations by a
net $37.0 million as a result of funding the $46 million payment for the stock
repurchase as is described below. Excluding the borrowing for the share
buyback, the Company would have decreased debt by approximately $9 million.
Also, cash and cash equivalents increased by $3.4 million during the quarter.
Cash generated from operating activities has remained strong due to continued
profitability and improved asset
11
<PAGE> 12
management, which has enabled the Company to fund both its anticipated
capital expenditures and the related working capital requirements.
On March 4, 1997, one of the Company's major shareholders, Scandinavian
Incentive Holding B.V. ("SIH"), agreed to sell the 10 million shares of WABCO
Common Stock that it holds. Under the terms of the March 5, 1997 agreement, the
Company bought 4 million shares at $11 per share, upon obtaining approval of
the Company's senior note holders, and an investment group consisting of Vestar
Equity Partners, L.P., Harvard Private Capital Group, American Industrial
Partners Capital Fund II, L.P. and certain members of Company management
acquired the remaining 6 million shares at the same price. This transaction was
completed on March 31, 1997 and increased total bank debt obligations by $46
million.
The Company's primary source of liquidity, other than operations, is the $140
million revolving credit facility (the Revolving Credit Facility) pursuant to
the Amended Credit Agreement, of which approximately $98 million had been
utilized for borrowings at March 31, 1997. The financing for the stock
repurchase was made under the Company's Revolving Credit Facility.
At March 31, 1997, the total indebtedness of the Company is approximately
$378.7 million, of which approximately $261.7 million is outstanding under the
Amended Credit Agreement, $100.0 million is outstanding under the Company's
Senior Notes and $17.0 million is due to the former owners of Pulse. The
Company's total annual interest obligation on such indebtedness would be
approximately $31.1 million based on the interest rates in effect as of March
31, 1997 (using a weighted average interest rate of approximately 8.2%). The
interest rate for the Notes is fixed at 9.375%, which will result in an annual
interest obligation on the Notes of $9.4 million (based on a total outstanding
amount of $100 million). Most of the remaining indebtedness bears interest at
variable interest rates and, therefore, the Company's total annual interest
obligation will change based on the applicable interest rates in effect from
time to time. However, the Company has entered into interest rate swap
agreements that fix the interest cost on $75 million at a weighted average
interest rate of approximately 7.95%.
Management believes, based upon current levels of operations and forecasted
earnings, that cash flows from operations, together with borrowings under the
Amended Credit Agreement, will be adequate to make required payments of
principal and interest on debt, including the Notes, to permit anticipated
capital expenditures, and to fund working capital requirements and other cash
needs. Nevertheless, the Company will remain leveraged to a significant extent
with corresponding requirements for debt service obligations. Moreover, the
ability of the Company to comply with the covenants and other restrictions
contained in the Notes and the Amended Credit Agreement may be affected by
events beyond its control. If the Company's sources of funds were to be
inadequate to satisfy the Company's cash requirements, the Company may need to
refinance its existing debt or obtain additional financing. There is no
assurance that any such new financing alternatives would be available and, in
any case, such new financing, if available, could be expected to be more costly
and burdensome than the debt agreements currently in place.
12
<PAGE> 13
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K
(i) The Company filed a Form 8-K related to the Stock
Redemption on April 11, 1997.
13
<PAGE> 14
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 COMPANY
(Registrant)
May 9, 1997 By /s/ ROBERT J. BROOKS
----------------------------------
Robert J. Brooks
Vice President and Chief Financial Officer
14
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 3,986
<SECURITIES> 0
<RECEIVABLES> 78,930
<ALLOWANCES> 0
<INVENTORY> 59,731
<CURRENT-ASSETS> 156,796
<PP&E> 164,046
<DEPRECIATION> 67,941
<TOTAL-ASSETS> 369,981
<CURRENT-LIABILITIES> 93,781
<BONDS> 360,510
0
0
<COMMON> 474
<OTHER-SE> (111,079)
<TOTAL-LIABILITY-AND-EQUITY> 369,981
<SALES> 136,508
<TOTAL-REVENUES> 136,508
<CGS> 90,948
<TOTAL-COSTS> 90,948
<OTHER-EXPENSES> (48)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,871
<INCOME-PRETAX> 15,719
<INCOME-TAX> 6,130
<INCOME-CONTINUING> 9,589
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,589
<EPS-PRIMARY> .34
<EPS-DILUTED> .34
</TABLE>
