The merger and restructuring plan involves the elimination of duplicate facilities and excess capacity, operational realignment and related workforce reductions, and the evaluation of certain assets as to their perceived ongoing benefit to the Company. This increase was attributable to higher Transit Group sales, reflecting continued significant shipments of product under the MTA contract, partially offset by lower OEM freight car and locomotive component sales volumes and lower locomotive overhauls, both within the Freight Group. Sales volumes within the Freight Group reflect a softening OEM market for freight cars, with approximately 11,000 freight cars delivered in the first quarter of 2001 compared with 16,867 in the same period in 2000.
Gross profit is dependent on a number of factors including pricing, sales volume and product mix.
The decrease in gross profit is primarily attributed to the effect of a decrease in sales volumes of OEM freight car components. This decrease, excluding restructuring charges, is due to benefits derived from cost reduction programs and synergies from the merger. Lower operating income resulted from decreased sales volumes of OEM freight car components in the Freight Group and overall changes to product mix. The following is a summary of selected cash flow information and other relevant data. The majority of capital expenditures for these periods relates to upgrades to existing equipment, replacement of existing equipment and purchases of new equipment due to expansion of Wabtec's operations, where the Company believes overall cost savings can be achieved through increasing efficiencies.