SOURCE: WABCO Holdings Inc.

December 21, 2010 07:30 ET

WABCO Raises Q4 2010 and Full Year 2010 Guidance

BRUSSELS, BELGIUM--(Marketwire - December 21, 2010) - WABCO Holdings Inc. (NYSE: WBC) (www.wabco-auto.com), a global technology leader and tier-one supplier to the commercial vehicle industry, today announced that the company has raised its full year 2010 guidance due to stronger than expected aftermarket sales growth, further increased demand from original equipment manufacturers in Europe and stronger than anticipated demand from customers in China during the fourth quarter.

"Our business is developing even more favorably than we expected two months ago as severe winter conditions in Europe boost aftermarket sales and additional customer demand in Europe and China further grows our fourth quarter revenues," said Jacques Esculier, WABCO Chairman and Chief Executive Officer. "As we prepare to enter 2011, our expanding backlog means keeping factories running during year-end holidays, which in turn will further increase volume productivity. We also see more favorable impacts from year-end activities in Q4 2010 than previously expected."

WABCO now expects an estimated increase in Q4 2010 sales of 41.5 to 43.5 percent in local currencies or $623 to $633 million (at EUR to USD exchange rate of 1.37), which is up from 35 to 40 percent in local currencies or $595 to $615 million (at EUR to USD exchange rate of 1.35) in the company's previous guidance.

WABCO has also raised its Q4 2010 guidance for performance operating margin to range from 12.0 to 12.5 percent, up from its previous guidance of 9.0 to 10.0 percent, and operating margin on a U.S. GAAP basis to range from 11.2 to 11.7 percent, up from its previous guidance of 8.9 to 9.9 percent.

Furthermore, WABCO has raised its Q4 2010 guidance for diluted earnings per share on a performance basis to range from $0.88 to $0.93, an upgrade of previous guidance that ranged from $0.62 to $0.72. WABCO has adjusted its Q4 2010 guidance for diluted earnings per share on a U.S. GAAP basis to range from $0.89 to $0.94 per share, replacing previous guidance ranging from $0.64 to $0.74 per share.

As a result of upgraded Q4 2010 guidance, WABCO is raising its full year 2010 guidance to an estimated increase in 2010 sales of 47 to 48 percent in local currencies or $2,172 to $2,182 million (at EUR to USD exchange rate of 1.33), which is up from 46 to 47 percent in local currencies or $2,144 to $2,164 million (at EUR to USD exchange rate of 1.325) in the company's previous guidance.

WABCO has also raised its full year 2010 guidance for performance operating margin to range from 10.4 to 10.6 percent, up from its previous guidance of 9.7 to 10.0 percent, and operating margin on a U.S. GAAP basis to range from 9.8 to 10.0 percent, up from its previous guidance of 9.4 to 9.7 percent.

In addition, WABCO has raised its full year 2010 guidance for diluted earnings per share on a performance basis to range from $2.73 to $2.78, an upgrade of previous guidance that ranged from $2.47 to $2.57. WABCO has adjusted its full year 2010 guidance for diluted earnings per share on a U.S. GAAP basis to a loss ranging from $3.59 to $3.54 per share, replacing previous guidance of a loss ranging from $3.85 to $3.75 per share.

"Market developments continue to create increasingly better conditions for WABCO to perform on our three-pillar strategy of technology leadership, global expansion and excellence in execution," said Esculier. "Entering 2011, we continue to expect strong momentum on a path of growth while sustaining the outstanding success of WABCO."

About WABCO

WABCO (NYSE: WBC) is a leading supplier of safety and control systems for commercial vehicles. For over 140 years, WABCO has pioneered breakthrough electronic, mechanical and mechatronic technologies for braking, stability and transmission automation systems supplied to the world's leading commercial truck, trailer and bus manufacturers. With sales of $1.5 billion in 2009, WABCO is headquartered in Brussels, Belgium. For more information, visit www.wabco-auto.com

Forward-Looking Statements

This document contains certain "forward-looking statements" as defined by the Private Securities Litigation Reform Act of 1995 that are based on management's good faith expectations and beliefs concerning future developments. Statements preceded by, followed by or that otherwise include the words "believes," "expects," "anticipates," "strategies," "prospects," "intends," "projects," "estimates," "plans," "may increase," "may fluctuate," and similar expressions or future or conditional verbs such as "will," "should," "would," "may" and "could" are generally forward looking in nature and not historical facts. Actual results may differ materially from these expectations as a result of many factors. These factors include, but are not limited to, the actual level of commercial vehicle production in our end markets, adverse developments in the business of our key customers, pricing changes to our supplies or products, and the other risks and uncertainties described in the "Risk Factors" section and the "Information Concerning Forward Looking Statements" section of WABCO's Form 10-K, as well as in the "Management's Discussion and Analysis of Financial Condition and Results of Operations - Information Concerning Forward Looking Statements" section of WABCO's Form 10-Q Quarterly Reports. WABCO does not undertake any obligation to update such forward-looking statements. All market and industry data are based on company estimates.

Non-GAAP Financial Measures

To facilitate the understanding of our Q4 and full year 2010 guidance, a reconciliation table follows this news release. Sales excluding the effects of foreign exchange is a non-GAAP financial measure. Additionally, operating income margin, net income and net income per diluted share on a "performance basis" are non-GAAP financial measures that exclude separation and streamlining items, the European Commission fine indemnification, the one-time impact from the Indian joint venture transactions, the one-time impact from an adjustment to the UK pension plan, and discrete and other one-time tax items, as applicable. These measures should be considered in addition to, not as a substitute for, GAAP measures. Management believes that presenting these non-GAAP measures is useful to shareholders because it enhances their understanding of how management assesses the operating performance of the company's business. Certain non-GAAP measures may be used, in part, to determine incentive compensation for current employees.

Attachment

Reconciliation of GAAP to Non-GAAP Financial Measures for Quarter Ended December 31 and Full Year 2010 Guidance

                            WABCO HOLDINGS INC.
  Reconciliation of GAAP to Non-GAAP Financial Measures for Quarter Ended
                   December 31, Full Year 2010 Guidance
                                (Unaudited)


(Amounts in millions, except per
 share data)                            Previous             Revised
                                    Full Year 2010       Full Year 2010
                                        Estimate             Estimate
                                  -------------------  -------------------
Operating Income

Reported Operating Income Margin           9.4% - 9.7%         9.8% - 10.0%
   Streamlining cost, impact to
    margin                                        0.1%                 0.2%
   Separation costs, impact to
    margin                                        0.2%                 0.2%
   UK pension adjustment, impact
    to margin                                       -                  0.2%
                                  -------------------  -------------------
Performance Operating Income
 Margin                                   9.7% - 10.0%        10.4% - 10.6%
                                  ===================  ===================

Net Income

Reported Net (Loss)/Income        ($247.9) - ($241.3)   ($231.1) - ($227.8)
   Streamlining cost, net of tax                  2.0                  2.8
   Tax items                                      2.0                  3.0
   EC fine                                      400.4                400.4
   Separation costs, net of tax
    and separation related taxes                  7.0                  3.3
   UK pension adjustment, net of
    tax                                             -                  2.8
                                  -------------------  -------------------
Performance Net Income            $    163.5 - $170.1  $    181.2 - $184.5
                                  ===================  ===================


Reported Net (Loss)/Income per
 Diluted Common Share                ($3.85) - ($3.75)    ($3.59) - ($3.54)

Performance Net Income per
 Diluted Common Share             $      2.47 - $2.57  $      2.73 - $2.78

Diluted common shares outstanding
 (Reported)                                      64.4                 64.4

Diluted common shares outstanding
 (Performance)                                   66.2                 66.4



                                        Previous             Revised
(Amounts in millions, except per     Quarter Ended        Quarter Ended
 share data)                          December 31,         December 31,
                                     2010 Estimate        2010 Estimate
                                  -------------------  -------------------
Operating Income

Reported Operating Income Margin           8.9% - 9.9%        11.2% - 11.7%
   Streamlining cost, impact to
    margin                                        0.1%                 0.2%
   Separation costs, impact to
    margin                                          -                    -
   UK pension adjustment, impact
    to margin                                       -                  0.6%
                                  -------------------  -------------------
Performance Operating Income
 Margin                                   9.0% - 10.0%        12.0% - 12.5%
                                  ===================  ===================

Net Income

Reported Net (Loss)/Income        $      43.0 - $49.7  $      59.6 - $62.9
   Streamlining cost, net of tax                  0.4                  1.2
   Tax items                                     (2.9)                (1.9)
   EC fine                                          -                    -
   Separation costs, net of tax
    and separation related taxes                  1.0                 (2.7)
   UK pension adjustment, net of
    tax                                             -                  2.8
                                  -------------------  -------------------
Performance Net Income            $      41.5 - $48.2  $      59.0 - $62.3
                                  ===================  ===================


Reported Net (Loss)/Income per
 Diluted Common Share             $      0.64 - $0.74  $      0.89 - $0.94

Performance Net Income per
 Diluted Common Share             $      0.62 - $0.72  $      0.88 - $0.93

Diluted common shares outstanding
 (Reported)                                      67.0                 67.0

Diluted common shares outstanding
 (Performance)                                   67.0                 67.0

Note:  The presentation of performance operating income margin, performance
net income and performance net income per diluted common share is not in
conformity with generally accepted accounting principles (GAAP).  These
measures may not be comparable to similar measures of other companies as
not all companies calculate these measures in the same manner.

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