Westinghouse Air Brake Technologies Corporation

Good morning and welcome to the Wabtec first quarter 2024 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Kyra Yates, Vice President of Investor Relations. Please go ahead.

Thank you, Operator. Good morning, everyone, and welcome to Wabtec's first quarter 2024 earnings call. With us today are President and CEO Rafael Santana, CFO John Olin, and Senior Vice President of Finance John Mastelers. Today's slide presentation, along with our earnings release and financial disclosures, were posted to our website earlier today and can be accessed on the Investor Relations tab on webtechcorp.com. Some statements we are making are forward-looking and based on our best view of the world and our business today. For more detailed risks, uncertainties, and assumptions relating to our forward-looking statements, please see the disclosures in our earnings release and presentations. We will also discuss non-GAAP financial metrics and encourage you to read our disclosures and reconciliation tables carefully as you consider these metrics. I will now turn the call over to Rafael.

Thanks, Kyra, and good morning, everyone. Let's move to slide four. I'll start with an update on our business, my perspectives on the quarter, and progress against our long-term value creation framework, and then John will cover the financials. Last quarter, when we met, we talked about the strong momentum that we had when we exited 2023. Well, that momentum continues. Sales were $2.5 billion, which was up 13.8% versus prior year. Revenue growth was driven by strong performance, largely from the trade segment. And adjusted EPS was up 47.7% from the year-ago quarter, driven by increased sales and margin expansion. Total cash flow from operations for the quarter was $334 million. The 12-month backlog was $7.7 billion, up 11%, signifying continued momentum and visibility across the business. In total, multi-year backlog was $22 billion. Overall, we had a strong start to the year, the underlying strength and momentum across the business is evident. We remain confident in our ability to execute, to deliver for our customers, and to continue to make progress against our long-term growth strategies. Shifting our focus to slide five, let's talk about 2024 and market expectations in more details. While key metrics across our freight business remain mixed, we are encouraged by the strength of our business, the strength of our international markets, and our robust pipeline of opportunities across geographies. North America car loads were up 1.8% in the quarter. Despite this car load growth, the industry's active locomotive fleet was down when compared to last year's first quarter, while WAPTAC's active fleet was higher. As we look forward, we continue to see significant opportunities across the globe in demand for new locomotives, modernizations, and digital technologies as our customers invest in solutions that continue to drive reliability, productivity, safety, and fuel efficiency. Looking at the North American rail car builds, last quarter we discussed the industry outlook for 2024 to be about 38,000 cars to be delivered. which has now been lowered by the industry sources to reflect an expected 36,000 cars. Internationally, activity is strong across most of our core markets. Significant investments to expand and upgrade infrastructure are supporting a robust international orders pipeline. In mining, commodity prices and an aging fleet are supporting activity to refresh and upgrade the truck fleet. Finally, moving to the transit sector, the megatrends of urbanization and decarbonization remain in place, driving the need for clean, safe, and efficient transportation solutions around the globe. Next, let's turn to slide six to discuss a few business highlights. Late in Q1, we signed a $270 million strategic order for new locomotives with a large mining customer in Africa. This, coupled with a recent service order in the region for $64 million, highlights the significant opportunity that we believe exists in Africa. Within mining, we're seeing continued strength in the business, in particular aftermarket, and the team has signed orders totaling over $250 million in the quarter. In Indonesia, We won a long-term parts agreement with PTK. And finally, our Maintenance Away team launched its Shuttle-Aggle Commander NXT, the next generation of railcar movers. The new model was specifically designed for the needs of the customers to optimize tractive effort, reduce wheel slipping, and extend tire life. All of this demonstrates the continued momentum across the business the team's relentless focus on execution, the strong pipeline of opportunities we continue to deliver on. WAPTEC is well positioned to capture profitable growth with innovative and scalable technologies that address our customers' most pressing needs. Moving to slide seven, before turning it over to John, I want to briefly discuss our progress that we're making against one of our company's key strategies, which is to lead the decarbonization of rail. Our highly capable team, our installed base of locomotives, and our advanced locomotive technologies puts Wattek in a unique position to lead the industry on fuel efficiency and to reduce carbon emissions. With this in mind, we're driving progress on two fronts. First, is to enable our customers to transition to a near-zero emissions using their current installed base of locomotives. Our focus here leverages our customers' existing fleets and wayside infrastructure. Our customers can improve fuel efficiency and carbon emission by up to 18% through replacing the older fleets with our Tier IV and modernized locomotives, along with realizing improved durability eligibility, reliability, and fuel efficiency. We're also enabling our existing locomotive portfolio to be capable of reductions of up to 60% in carbon through the use of bio and renewable fuels. And when further mixed with hydrogen in the locomotive's internal combustion engine, up to 80% total carbon reduction. In addition, we believe we have a competitive advantage given the fact that our locomotives are more fuel efficient. And our four-stroke engine architecture facilitates the use of hydrogen in our internal combustion engines. And the best part of this approach is that it provides significant optionality for our customers. And this approach is completely reversible back to diesel if supplies of alternative fuels are not available or not economical. On our second path to decarbonization, we're developing zero emissions technology and equipment. As you are aware, we recently introduced the world's first heavy haul battery electric locomotive to a mining customer in Australia. Given the customer's application, they plan to operate this locomotive relying on regenerative braking to charge the batteries. And later this month, we will ship our first battery hybrid locomotive. Finally, we are investing and partnering with government agencies to develop heavy haul locomotives powered by hydrogen fuel cells. We believe that the commercialization of hydrogen fuel cells for heavy haul locomotives is farther down the road. Consequently, we are facing our investments with our customers' readiness to adopt the technology. With that, I'll turn the call over to John to review the quarter, segment results, and our overall financial performance. John?