filings.toolsWestinghouse Air Brake Technologies 10-Q 2025-09-30
Filed 2025-10-22. 8 sections, 205K characters. Original on sec.gov · Markdown · JSON
Cover and table of contents
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 September 30, 2025
OR
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number: 033-90866
WESTINGHOUSE AIR BRAKE TECHNOLOGIES
CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 25-1615902 | ||||||||||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
| 30 Isabella Street Pittsburgh, Pennsylvania | 15212 | ||||||||||
| (Address of principal executive offices) | (Zip code) |
412-825-1000
(Registrant’s telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
| Common Stock, $.01 par value per share | WAB | New York Stock Exchange |
Indicate by check mark 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 ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | ||||||||||||
| Emerging growth company | ☐ | Smaller reporting company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
As of October 17, 2025, there were 170,957,186 shares of common stock, par value $.01 per share, of the registrant outstanding.
WESTINGHOUSE AIR BRAKE
TECHNOLOGIES CORPORATION
September 30, 2025
FORM 10-Q
TABLE OF CONTENTS
PART I—FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
| Unaudited | |||||||||||
| In millions, except par value | September 30, 2025 | December 31, 2024 | |||||||||
| Assets | |||||||||||
| Assets | |||||||||||
| Cash, cash equivalents and restricted cash | $ | 528 | $ | 715 | |||||||
| Accounts receivable | 1,662 | 1,152 | |||||||||
| Unbilled accounts receivable | 536 | 550 | |||||||||
| Inventories, net | 2,747 | 2,314 | |||||||||
| Other current assets | 315 | 212 | |||||||||
| Total current assets | 5,788 | 4,943 | |||||||||
| Property, plant and equipment, net | 1,534 | 1,447 | |||||||||
| Goodwill | 9,853 | 8,710 | |||||||||
| Other intangible assets, net | 3,546 | 2,934 | |||||||||
| Other noncurrent assets | 806 | 668 | |||||||||
| Total noncurrent assets | 15,739 | 13,759 | |||||||||
| Total Assets | $ | 21,527 | $ | 18,702 | |||||||
| Liabilities and Shareholders’ Equity | |||||||||||
| Liabilities | |||||||||||
| Accounts payable | $ | 1,429 | $ | 1,300 | |||||||
| Customer deposits | 940 | 693 | |||||||||
| Accrued compensation | 424 | 425 | |||||||||
| Accrued warranty | 261 | 248 | |||||||||
| Current portion of long-term debt | 251 | 500 | |||||||||
| Other accrued liabilities | 759 | 626 | |||||||||
| Total current liabilities | 4,064 | 3,792 | |||||||||
| Long-term debt | 5,034 | 3,480 | |||||||||
| Accrued postretirement and pension benefits | 64 | 58 | |||||||||
| Deferred income taxes | 553 | 376 | |||||||||
| Other long-term liabilities | 717 | 863 | |||||||||
| Total Liabilities | 10,432 | 8,569 | |||||||||
| Commitments and contingencies (Note 14) | |||||||||||
| Equity | |||||||||||
| Common stock, $.01 par value; 500.0 shares authorized; 171.9 shares issued and 170.9 outstanding at September 30, 2025; 226.9 shares issued and 171.3 outstanding at December 31, 2024 | 1 | 2 | |||||||||
| Additional paid-in capital | 8,047 | 8,023 | |||||||||
| Treasury stock, at cost, 1.0 and 55.6 shares, at September 30, 2025 and December 31, 2024, respectively | (115) | (3,273) | |||||||||
| Retained earnings | 3,719 | 6,185 | |||||||||
| Accumulated other comprehensive loss | (604) | (846) | |||||||||
| Total Westinghouse Air Brake Technologies Corporation shareholders’ equity | 11,048 | 10,091 | |||||||||
| Noncontrolling interest | 47 | 42 | |||||||||
| Total Equity | 11,095 | 10,133 | |||||||||
| Total Liabilities and Equity | $ | 21,527 | $ | 18,702 | |||||||
The accompanying notes are an integral part of these statements.
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
| Unaudited | Unaudited | ||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| In millions, except per share data | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Net sales: | |||||||||||||||||||||||
| Sales of goods | $ | 2,425 | $ | 2,171 | $ | 6,808 | $ | 6,323 | |||||||||||||||
| Sales of services | 461 | 492 | 1,394 | 1,481 | |||||||||||||||||||
| Total net sales | 2,886 | 2,663 | 8,202 | 7,804 | |||||||||||||||||||
| Cost of sales: | |||||||||||||||||||||||
| Cost of goods | (1,617) | (1,512) | (4,548) | (4,413) | |||||||||||||||||||
| Cost of services | (267) | (271) | (814) | (822) | |||||||||||||||||||
| Total cost of sales | (1,884) | (1,783) | (5,362) | (5,235) | |||||||||||||||||||
| Gross profit | 1,002 | 880 | 2,840 | 2,569 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Selling, general and administrative expenses | (375) | (318) | (1,029) | (915) | |||||||||||||||||||
| Engineering expenses | (59) | (50) | (155) | (155) | |||||||||||||||||||
| Amortization expense | (77) | (79) | (219) | (224) | |||||||||||||||||||
| Total operating expenses | (511) | (447) | (1,403) | (1,294) | |||||||||||||||||||
| Income from operations | 491 | 433 | 1,437 | 1,275 | |||||||||||||||||||
| Other income and expenses: | |||||||||||||||||||||||
| Interest expense, net | (65) | (52) | (157) | (148) | |||||||||||||||||||
| Other (expense) income, net | (1) | (3) | 21 | (1) | |||||||||||||||||||
| Income before income taxes | 425 | 378 | 1,301 | 1,126 | |||||||||||||||||||
| Income tax expense | (112) | (92) | (322) | (272) | |||||||||||||||||||
| Net income | 313 | 286 | 979 | 854 | |||||||||||||||||||
| Less: Net income attributable to noncontrolling interest | (3) | (3) | (11) | (10) | |||||||||||||||||||
| Net income attributable to Wabtec shareholders | $ | 310 | $ | 283 | $ | 968 | $ | 844 | |||||||||||||||
| Earnings Per Common Share | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Net income attributable to Wabtec shareholders | $ | 1.81 | $ | 1.63 | $ | 5.66 | $ | 4.81 | |||||||||||||||
| Diluted | |||||||||||||||||||||||
| Net income attributable to Wabtec shareholders | $ | 1.81 | $ | 1.63 | $ | 5.64 | $ | 4.80 | |||||||||||||||
| Weighted average shares outstanding | |||||||||||||||||||||||
| Basic | 170.5 | 173.4 | 170.5 | 175.1 | |||||||||||||||||||
| Diluted | 171.1 | 174.1 | 171.2 | 175.7 |
The accompanying notes are an integral part of these statements.
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
| |
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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the information in the unaudited condensed consolidated financial statements and notes thereto included herein and Westinghouse Air Brake Technologies Corporation’s Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in its Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission on February 12, 2025.
OVERVIEW
Wabtec is a global provider of value-added, technology-based locomotives, equipment, systems, and services for the freight rail and passenger transit industries, as well as the mining, marine and industrial markets. Our highly engineered products, which are intended to enhance safety, improve productivity and reduce maintenance costs for customers, can be found on most locomotives, freight cars, passenger transit cars and buses around the world. Our core products and services are essential in the safe and efficient operation of freight rail, passenger transit vehicles and other modes of transportation. Wabtec is a global company with operations in over 50 countries and our products can be found in more than 100 countries throughout the world. In the first nine months of 2025, approximately half of the Company’s Net sales came from customers outside the United States.
Business Update
On July 1, 2025, Wabtec completed the previously announced acquisition of Evident’s Inspection Technologies division ("Inspection Technologies"), formerly part of the Scientific Solutions Division of Olympus Corporation, for approximately $1.788 billion. Inspection Technologies is a global leader in Non-Destructive Testing, Remote Visual Inspection and Analytical Instruments solutions for mission critical assets. Inspection Technologies' industry presence and innovative product portfolio will significantly expand Wabtec's capabilities and complement the existing product portfolio of Digital Intelligence.
On July 7, 2025, the Company announced a definitive agreement to acquire Frauscher Sensor Technology Group, GmbH ("Frauscher"), a global market leader in train detection, wayside object control solutions and axle counting systems, for approximately €675 million. The acquisition positions Wabtec for accelerated, profitable growth, and further strengthens the Company’s product portfolio by adding highly attractive and complementary railway signaling technologies. Additionally, during the first quarter of 2025, Wabtec announced a definitive agreement to acquire Dellner Couplers for approximately €890 million. Dellner Couplers is a global leader in highly engineered safety-critical train connection systems and services for passenger rail rolling stock. The acquisition brings highly attractive and complementary technologies and provides synergies by complementing our core transit systems portfolio. Both announced acquisitions are subject to customary closing conditions and regulatory approval.
Transaction costs incurred during the three and nine months ended September 30, 2025 related to completed and announced acquisitions were approximately $9 million and $44 million, respectively.
On September 22, 2025, Wabtec announced an agreement with National Company Kazakhstan Temir Zholy ("KTZ"), the national railway of Kazakhstan, to deliver Evolution Series locomotives and provide long-term service support. The multi-national order, valued by the Company at approximately $4.2 billion, marks the largest locomotive agreement in Wabtec's history. Wabtec also continued to drive recurring revenue in the global market by winning a new service contract in Kazakhstan worth $299 million earlier in 2025. Additionally in the Freight Segment, during the third quarter of 2025, the first Simandou locomotives reached Guinea, marking the first exports from the Company's India locomotive facility. During the first nine months of 2025, the Freight Segment also signed a $140 million new locomotive order with a North American Class I railroad, signed new locomotive, mining and service orders in the Asia-Pacific region totaling $127 million, and signed a $125 million ultra class mining order.
During the three months ended September 30, 2025, the Transit Segment signed $140 million in new Transit brake orders. Additionally, during the first nine months of 2025, the Transit Segment signed two multi-year transit platform door contracts valued at $85 million and a $47 million order to provide brakes and couplers for servicing a North American customer. In March of 2025, Moody's upgraded the Senior Notes ratings to Baa2 from Baa3 and changed the outlook to stable from positive, and S&P Global Ratings reaffirmed Wabtec's credit rating at BBB with a stable outlook.
Wabtec is focused on driving operational efficiency and improving profitability while reducing manufacturing complexity. As a result, there are restructuring initiatives, including Integration 3.0, Portfolio Optimization and Integration 2.0, aimed at achieving these focus areas. During the first nine months of 2025, Wabtec incurred $21 million of restructuring costs primarily for employee-related costs on programs under these initiatives.
Future macroeconomic volatility, changes to tariffs and trade policies, supply chain disruptions, and labor availability, amongst other things, could cause a negative impact on revenue and cost increases resulting in an adverse effect on the Company’s operating results. Additionally, broad-based inflation, metals, energy and other commodity costs, transportation and logistics costs, labor costs, and foreign currency exchange rate fluctuations all continue to impact our results. The Company utilizes various mitigating actions intended to lessen the impact of macroeconomic volatility, including the impact of current tariffs. These actions include implementing price escalations and surcharges, driving operational efficiencies through various
cost mitigation efforts and discretionary spend management, strategically sourcing materials, reviewing and modifying distribution logistics, and accelerating integration synergies through our strategic initiatives. The Company has experienced increased tariff costs which unfavorably impacted our cash from operations for the nine months ended September 30, 2025. Although we do not expect a material impact to our results of operations in 2025 because of mitigation efforts, due to the volatility of trade policies, we are unable to reasonably predict the future impact.
During the first quarter of 2025, Management determined that certain businesses within the Services product line would be better aligned with Management oversight in the Components product line. As such, Sales by product line for 2024 and 2023 have been recast to conform to the current period presentation. These changes were within the Freight Segment and had no impact on Total Freight Segment Sales, Gross profit, or Income from operations.
RESULTS OF OPERATIONS
Consolidated Results
THIRD QUARTER 2025 COMPARED TO THIRD QUARTER 2024
The following table shows our Condensed Consolidated Statements of Operations for the periods indicated.
| Three Months Ended September 30, | |||||||||||
| In millions | 2025 | 2024 | |||||||||
| Net sales: | |||||||||||
| Sales of goods | $ | 2,425 | $ | 2,171 | |||||||
| Sales of services | 461 | 492 | |||||||||
| Total Net sales | 2,886 | 2,663 | |||||||||
| Cost of sales: | |||||||||||
| Cost of goods | (1,617) | (1,512) | |||||||||
| Cost of services | (267) | (271) | |||||||||
| Total Cost of sales | (1,884) | (1,783) | |||||||||
| Gross profit | 1,002 |
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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
See "Quantitative and Qualitative Disclosures About Market Risk" in Item 7A of Part II of our Annual Report on Form 10-K for the year ended December 31, 2024. Our exposure to market risk has not changed materially since December 31, 2024. Refer to Note 13 - Fair Value Measurement and Derivative Instruments of "Notes to Condensed Consolidated Financial Statements" included in Part I, Item 1 of this report for additional information regarding interest rate and foreign currency exchange risk.
Item 4. CONTROLS AND PROCEDURES
Wabtec’s principal executive officer and its principal financial officer have evaluated the effectiveness of Wabtec’s “disclosure controls and procedures,” (as defined in Exchange Act Rule 13a-15(e)) as of September 30, 2025. Based upon their evaluation, the principal executive officer and principal financial officer concluded that Wabtec’s disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by Wabtec in the reports filed or submitted by it under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and to provide reasonable assurance that information required to be disclosed by Wabtec in such reports is accumulated and communicated to Wabtec’s Management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
There was no change in Wabtec’s “internal control over financial reporting” (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended September 30, 2025, that has materially affected, or is reasonably likely to materially affect, Wabtec’s internal control over financial reporting.
PART II—OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
Additional information with respect to legal proceedings is included in Note 14 of “Notes to Condensed Consolidated Financial Statements” included in Part I, Item 1 of this report.
Item 1A. RISK FACTORS
There have been no material changes in our risk factors from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following table summarizes the Company's stock repurchase activity for the three months ended September 30, 2025:
| Issuer Purchases of Common Stock | ||||||||||||||||||||||||||
| In millions, except shares and price per share | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Programs (1) | Maximum Dollar Value of Shares That May Yet Be Purchased Under the Programs (1) | ||||||||||||||||||||||
| July 2025 | — | $ | — | — | $ | 852 | ||||||||||||||||||||
| August 2025 | — | $ | — | — | $ | 852 | ||||||||||||||||||||
| September 2025 | — | $ | — | — | $ | 852 | ||||||||||||||||||||
| Total quarter ended September 30, 2025 | — | $ | — | — | $ | 852 |
(1) On December 3, 2024, the Board of Directors authorized an additional $1.0 billion to the Company's existing stock repurchase program for stock repurchases of the Company’s outstanding shares. This new authorization provides an additional $1.0 billion that became available for repurchases after the remaining availability as of December 3, 2024 was expended. No time limit was set for the completion of the program, which conformed to the requirements under the 2022 Credit Agreement and the 2024 Credit Agreement, and complies with the requirements under the 2025 Credit Agreement and the indentures for the Senior Notes currently outstanding. The Company may repurchase shares in the future at any time, depending upon market conditions, our capital needs and other factors. Purchases of shares may be made by open market purchases or privately negotiated purchases and may be made pursuant to Rule 10b5-1 plan or otherwise. As of September 30, 2025, approximately $852 million was remaining under the stock repurchase plan.
Item 4. MINE SAFETY DISCLOSURES
Not Applicable
Item 5. OTHER INFORMATION
None of Wabtec's Directors or Officers have adopted, terminated, or materially modified any trading plans, whether or not the plan was intended to qualify for the affirmative defense under Rule 10b5-1, during the third quarter ended September 30, 2025.
Item 6. EXHIBITS
The following exhibits are being filed with this report:
| 22.1 | List of Subsidiary Guarantors | ||||
| 31.1 | Rule 13a-14(a) Certification of Chief Executive Officer. | ||||
| 31.2 | Rule 13a-14(a) Certification of Chief Financial Officer. | ||||
| 32.1 | Section 1350 Certification of Chief Executive Officer and Chief Financial Officer. | ||||
| 101.INS | XBRL Instance Document. | ||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | ||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | ||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | ||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | ||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | ||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION | |||||
| By: | /s/ JOHN A. OLIN | ||||
| John A. Olin | |||||
| Executive Vice President and Chief Financial Officer | |||||
| (Duly Authorized Officer and Principal Financial Officer) | |||||
| DATE: | October 22, 2025 |