WABCO Holdings Inc. reported a record full-year 2008 diluted earnings per share (EPS) of $3.24 on a U.S. GAAP basis and diluted EPS of $3.75 on a performance basis, up 25 percent from the prior year.
Full-year 2008 sales reached $2.6 billion, up 7 percent over prior year and flat in local currencies, despite Q4 2008 sales of $455 million, down 33 percent from prior year and down 25 percent in local currencies.
WABCO Holdings Inc. reported a record full-year 2008 diluted earnings per share (EPS) of $3.24 on a U.S. GAAP basis and diluted EPS of $3.75 on a performance basis, up 25 percent from the prior year.
Full-year 2008 sales reached $2.6 billion, up 7 percent over prior year and flat in local currencies, despite Q4 2008 sales of $455 million, down 33 percent from prior year and down 25 percent in local currencies.
“Even with sales flat versus a year ago, we reached a record level of earnings per share in 2008, delivered superb execution, and continued gains in productivity,” said Jacques Esculier, WABCO Chief Executive Officer. “We also achieved major success in our ambitious cost-cutting program during Q4 2008, including elimination of 600 positions out of 1,000 positions targeted for termination by Q2 2009.
“The drop in the global commercial vehicle market in the fourth quarter was unprecedented for its speed and steepness, down 22 percent in Europe, 9 percent in North America, and 36 percent in China, based on preliminary market data. Facing this challenge, we demonstrated our ability to react rapidly and limit the decrease in our performance gross profit margin to 62 basis points in Q4 2008 compared with Q3 2008 when sales slightly rose. We more than doubled the results of our profit improvement plan that we launched in Q3 2008 by delivering $41 million in cost savings in Q4 2008, bringing total cost savings to $45 million for second half 2008.”
WABCO reported Q4 2008 Earnings Before Interest and Taxes (EBIT) of $15.2 million, down 80 percent from the prior year. Excluding separation and streamlining costs as well as a one-time transitional impact from a new accounting standard (SFAS No. 141R) that WABCO will adopt in 2009, performance EBIT declined to $43.3 million, down 51 percent from prior year and down 50 percent from prior year in local currencies.
WABCO’s EBIT margin in Q4 2008 decreased to 3.3 percent from 11.1 percent versus prior year. Performance EBIT margin decreased to 9.5 percent from 12.9 percent versus prior.
On a U.S. GAAP basis, Q4 2008 net income decreased to $21.2 million or $0.33 per diluted share from net income of $54.4 million or $0.79 per diluted share a year ago. Excluding separation and streamlining costs, one-time and discrete tax items as well as a one-time transitional impact from a new accounting standard (SFAS No. 141R) that WABCO will adopt in 2009, Q4 2008 performance net income decreased to $39.5 million versus $69.6 million a year ago. Performance earnings per diluted share decreased by 39.2 percent to $0.62 versus $1.02 per diluted share a year ago.
“Early in the third quarter, we anticipated market declines and quickly took measures to mitigate the slowdown in production of commercial vehicles. We also achieved approximately $12 million of materials and conversion productivity in Q4 2008, resulting in a total of nearly $72 million of materials and conversion productivity gained during 2008 through our WABCO Operating System,” said Esculier. “We acted fast and efficiently to focus on realigning WABCO for a new level of market demand while still supporting our strategy of global expansion, technology leadership and excellence in execution. We also remain determined to deliver the innovation and continuously improving services that customers expect in all regions.”
WABCO generated $79.1 million in net cash from operating activities in Q4 2008 and $57.7 million of free cash flow. WABCO also paid $4.5 million in dividends in Q4 2008.
In January 29, WABCO’s board of directors approved a cash dividend of 7 cents per share of common stock. The dividend is payable on March 20, to shareholders of record on March 4.