Railamerica (NYSE:RRA)
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From May 2019 to May 2024
RailAmerica, Inc. (NYSE:RRA) ("RailAmerica" or the
"Company") today reported second quarter 2006 earnings from continuing
operations of $5.4 million, or $0.14 per diluted share, compared to
$9.0 million, or $0.24 per diluted share, for the second quarter of
2005. The 2006 results include expenses of $3.0 million, or $0.04 per
share, relating to the Company's recently announced reorganization,
including $1.7 million in employee severance costs.
Net income for the three months ended June 30, 2006, which
includes discontinued operations, was $7.8 million, or $0.20 per
share, compared to $9.3 million, or $0.24 per share in the three
months ended June 30, 2005. The 2006 income from discontinued
operations includes a pre-tax gain of $2.5 million ($2.4 million net
of tax) on the disposition of the Company's E & N Railway on June 30.
Additionally, a change in Canadian tax laws resulted in a continuing
operations tax benefit of $1.7 million, or $0.04 per share, in the
second quarter of 2006.
Revenue for the second quarter of 2006 increased $13.4 million, or
13%, to $116.8 million, from $103.4 million in the second quarter of
2005. On a "same railroad" basis, revenue for the second quarter of
2006 increased $7.0 million, or 7%, from the second quarter of 2005,
while "same railroad" carloads declined 4%. Operating income for the
second quarter of 2006 decreased 37%, to $9.2 million, from $14.5
million in the second quarter of 2005. The operating ratio for the
second quarter of 2006 was 92.2% compared to 86.0% in the 2005 second
quarter.
For the six months ended June 30, 2006, the Company reported
earnings from continuing operations of $12.0 million, or $0.31 per
diluted share, compared to earnings from continuing operations of
$13.9 million, or $0.36 per diluted share for the six months ended
June 30, 2005. Net income for the six months ended June 30, 2006,
which includes discontinued operations, was $22.9 million, or $0.59
per share, compared to $15.5 million, or $0.40 per share in the six
months ended June 30, 2005. The 2006 results include the recognition
of a $13.4 million pre-tax gain ($8.3 million net of tax) for the
expiration of the warranty period related to the sale of Freight
Australia and a resulting adjustment to the reserves in discontinued
operations.
Revenue for the six months ended June 30, 2006, increased $26.7
million, or 13%, to $231.2 million, from $204.5 million in 2005. On a
"same railroad" basis, revenue for the six months ended June 30, 2006
increased $14.2 million, or 7%, while "same railroad" carloads
declined 2%, from the six months ended June 30, 2005. Operating income
for the six months ended June 30, 2006 was $23.4 million, compared to
$24.4 million for the six months ended June 30, 2005.
Michael Howe, RailAmerica's Chief Financial Officer, said, "Our
financial results in the second quarter were impacted by several
isolated factors, including a work stoppage at a paper facility in
Nova Scotia, the Native Indian blockade in Southern Ontario, costs
related to our reorganization, an accrual for a final contingent
obligation to our former CEO and the costs of disposing of industrial
waste in a Canadian landfill from a derailment in Alabama.
Additionally, our revenue was affected by a decline in shipments of
lumber, attributable to a slowdown in housing starts."
Charles Swinburn, RailAmerica's Chief Executive Officer, said,
"While our financial results lagged last year's results, we made
significant progress during the second quarter toward achieving our
improvement objectives for the next several years. We carried out our
reorganization and have begun the process of consolidating our
customer service, dispatching and revenue functions. Those steps will
make our company more efficient and effective going forward.
Additionally, our marketing initiatives to increase traffic on our
existing railroads have begun to significantly payoff. I am very
pleased to say that Honda has recently announced its' intention to
build an automobile assembly plant on one of our railroads in Indiana.
Our marketing people worked hard with the state of Indiana to assist
Honda in their decision. This plant should generate as many as 13,000
additional rail carloads annually for us, beginning in mid to late
2008. To the best of our knowledge, this is the only new automobile
assembly plant to be located on a short line anywhere in the country
in recent years. Other marketing and sales initiatives have resulted
in significant commercial gains on our Ohio railroads, where two
shippers have agreed to ship in excess of 8,000 carloads per year,
commencing this month."
RailAmerica, Inc. (NYSE:RRA) is a leading short line and regional
rail service provider with 42 railroads operating approximately 7,800
miles in the United States and Canada. The Company is a member of the
Russell 2000(R) Index. Its website may be found at
http://www.railamerica.com.
DISCLAIMER REGARDING FORWARD-LOOKING STATEMENTS: This press
release contains forward-looking statements regarding future events
that involve risks and uncertainties that could cause actual results
to differ materially. Forward-looking statements speak only as of the
date the statement was made. The Company assumes no obligation to
update forward-looking information to reflect actual results, changes
in assumptions or changes in other factors affecting forward-looking
information. If the Company does update any forward-looking statement,
no inference should be drawn that the Company will make additional
updates with respect to that statement or any other forward-looking
statements. We refer you to the documents that RailAmerica files from
time to time with the Securities and Exchange Commission, such as the
Form 10-K, Form 10-Q and Form 8-K, which contain additional important
factors that could cause its actual results to differ from its current
expectations and from the forward-looking statements contained in this
press release.
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RAILAMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For the three and six months ended June 30, 2006 and 2005
(in thousands, except earnings per share)
(unaudited)
Three months ended Six months ended
June 30, June 30,
2006 2005 2006 2005
----------------------------------------------------------------------
Operating revenue $116,833 $103,409 $231,183 $204,466
----------------------------------------------------------------------
Operating expenses:
Transportation 71,998 60,627 139,349 123,078
Selling, general and
administrative 26,887 20,772 50,515 42,414
Net loss (gain) on sale of
assets (535) 323 (1,003) 242
Depreciation and amortization 9,315 7,171 18,948 14,340
----------------------------------------------------------------------
Total operating expenses 107,665 88,893 207,809 180,074
----------------------------------------------------------------------
Operating income 9,168 14,516 23,374 24,392
Interest expense (6,689) (4,623) (13,463) (8,933)
Other expense -- -- (480) --
----------------------------------------------------------------------
Income from continuing
operations before income
taxes 2,479 9,893 9,431 15,459
Provision for (benefit from)
income taxes (2,927) 865 (2,593) 1,514
----------------------------------------------------------------------
Income from continuing
operations 5,406 9,028 12,024 13,945
Gain from sale of discontinued
operations, net of income
taxes 2,354 -- 10,667 239
Income from discontinued
operations, net of income
taxes 74 250 163 1,310
----------------------------------------------------------------------
Net income $ 7,834 $ 9,278 $ 22,854 $ 15,494
======================================================================
Basic earnings per common
share:
Continuing operations $ 0.14 $ 0.24 $ 0.31 $ 0.37
Discontinued operations 0.06 0.01 0.28 0.04
----------------------------------------------------------------------
Net income $ 0.20 $ 0.25 $ 0.59 $ 0.41
======================================================================
Diluted earnings per common
share:
Continuing operations $ 0.14 $ 0.24 $ 0.31 $ 0.36
Discontinued operations 0.06 -- 0.28 0.04
----------------------------------------------------------------------
Net income $ 0.20 $ 0.24 $ 0.59 $ 0.40
======================================================================
Weighted average common shares
outstanding:
Basic 38,534 37,691 38,485 37,568
Diluted 38,969 38,302 38,894 38,261
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RAILAMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, 2006 and December 31, 2005
(in thousands, except share data)
(unaudited)
June 30, December 31,
2006 2005
----------------------------------------------------------------------
Assets
Current assets:
Cash and cash equivalents $ 13,191 $ 14,310
Accounts and notes receivable, net 80,486 82,395
Current assets of discontinued operations -- 3,140
Other current assets 11,633 14,114
----------------------------------------------------------------------
Total current assets 105,310 113,959
Property, plant and equipment, net 922,381 904,588
Long-term assets of discontinued operations -- 25,879
Other assets 100,395 102,950
----------------------------------------------------------------------
Total assets $1,128,086 $1,147,376
======================================================================
Liabilities and Stockholders' Equity
Current liabilities:
Current maturities of long-term debt $ 4,990 $ 6,079
Accounts payable 64,940 75,222
Accrued expenses 31,145 43,524
Current liabilities of discontinued
operations -- 4,275
----------------------------------------------------------------------
Total current liabilities 101,075 129,100
Long-term debt, less current maturities 401,011 427,794
Deferred income taxes 143,690 141,606
Long-term liabilities of discontinued
operations -- 2,261
Other liabilities 18,833 15,337
----------------------------------------------------------------------
Total liabilities 664,609 716,098
----------------------------------------------------------------------
Commitments and contingencies
Stockholders' equity:
Common stock 39 39
Additional paid-in capital and other 333,729 330,919
Retained earnings 90,482 67,628
Accumulated other comprehensive income 39,227 32,692
----------------------------------------------------------------------
Total stockholders' equity 463,477 431,278
----------------------------------------------------------------------
Total liabilities and stockholders'
equity $1,128,086 $1,147,376
======================================================================
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RAILAMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended June 30, 2006 and 2005
(in thousands)
(unaudited)
Six months ended
June 30,
2006 2005
----------------------------------------------------------------------
Cash flows from operating activities:
Net income $ 22,854 $ 15,494
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization, including
amortization of deferred loan costs 20,432 15,461
Net gain on sale or disposal of properties (16,946) (33)
Equity compensation costs 1,612 --
Deferred income taxes and other 911 834
Changes in operating assets and liabilities, net
of acquisitions and dispositions:
Accounts receivable 2,997 1,647
Other current assets 2,484 3,837
Accounts payable (10,139) (13,556)
Accrued expenses 1,573 (903)
Other assets and liabilities 63 496
----------------------------------------------------------------------
Net cash provided by operating activities 25,841 23,277
----------------------------------------------------------------------
Cash flows from investing activities:
Purchase of property, plant and equipment (32,363) (29,509)
Proceeds from sale of assets, net of cash
on-hand 31,402 6,253
Deferred transaction costs and other -- (19)
----------------------------------------------------------------------
Net cash used in investing activities (961) (23,275)
----------------------------------------------------------------------
Cash flows from financing activities:
Proceeds from issuance of long-term debt 39,700 7,800
Principal payments on long-term debt (67,573) (11,455)
Proceeds from exercise of stock options and
warrants 1,791 4,220
----------------------------------------------------------------------
Net cash provided by (used in) financing
activities (26,082) 565
----------------------------------------------------------------------
Effect of exchange rates on cash 83 (34)
----------------------------------------------------------------------
Net increase (decrease) in cash (1,119) 533
Cash, beginning of period 14,310 24,331
----------------------------------------------------------------------
Cash, end of period $ 13,191 $ 24,864
======================================================================
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RAILAMERICA, INC. AND SUBSIDIARIES
SELECTED FINANCIAL INFORMATION
(amounts in thousands)
(unaudited)
For the three months ended
June 30,
Functional Classification 2006 2005
----------------------------------------------------------------------
Operating revenue $116,833 100.0% $103,409 100.0%
----------------------------------------------------------------------
Operating expenses:
Maintenance of way 15,456 13.2% 12,044 11.7%
Maintenance of equipment 4,474 3.9% 4,011 3.9%
Transportation 39,034 33.4% 33,066 32.0%
Equipment rental 13,034 11.2% 11,506 11.1%
Selling, general and administrative 26,887 23.0% 20,772 20.1%
Net (gain) loss on sale of assets (535) -0.5% 323 0.3%
Depreciation and amortization 9,315 8.0% 7,171 6.9%
----------------------------------------------------------------------
Total operating expenses 107,665 92.2% 88,893 86.0%
----------------------------------------------------------------------
Operating income $ 9,168 7.8% $ 14,516 14.0%
======================================================================
For the three months ended
June 30,
Natural Classification 2006 2005
----------------------------------------------------------------------
Operating revenue $116,833 100.0% $103,409 100.0%
----------------------------------------------------------------------
Operating expenses:
Labor and benefits 38,307 32.8% 32,038 31.0%
Equipment rents 13,881 11.9% 12,193 11.8%
Purchased services 9,786 8.4% 7,802 7.6%
Diesel fuel 14,434 12.4% 10,689 10.3%
Casualties and insurance 6,151 5.2% 4,221 4.1%
Materials 2,783 2.4% 2,600 2.5%
Joint facilities 3,407 2.9% 3,192 3.1%
Other expenses 10,136 8.7% 8,664 8.4%
Net (gain) loss on sale of assets (535) -0.5% 323 0.3%
Depreciation and amortization 9,315 8.0% 7,171 6.9%
----------------------------------------------------------------------
Total operating expenses 107,665 92.2% 88,893 86.0%
----------------------------------------------------------------------
Operating income $ 9,168 7.8% $ 14,516 14.0%
======================================================================
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RAILAMERICA, INC. AND SUBSIDIARIES
SELECTED FINANCIAL INFORMATION
(amounts in thousands)
(unaudited)
For the six months ended June 30,
Functional Classification 2006 2005
----------------------------------------------------------------------
Operating revenue $231,183 100.0% $204,466 100.0%
----------------------------------------------------------------------
Operating expenses:
Maintenance of way 28,466 12.3% 26,032 12.7%
Maintenance of equipment 8,786 3.8% 7,723 3.8%
Transportation 76,485 33.1% 65,980 32.3%
Equipment rental 25,612 11.1% 23,343 11.4%
Selling, general and administrative 50,515 21.8% 42,414 20.8%
Net (gain) loss on sale of assets (1,003) -0.4% 242 0.1%
Depreciation and amortization 18,948 8.2% 14,340 7.0%
----------------------------------------------------------------------
Total operating expenses 207,809 89.9% 180,074 88.1%
----------------------------------------------------------------------
Operating income $ 23,374 10.1% $ 24,392 11.9%
======================================================================
For the six months ended June 30,
Natural Classification 2006 2005
----------------------------------------------------------------------
Operating revenue $231,183 100.0% $204,466 100.0%
----------------------------------------------------------------------
Operating expenses:
Labor and benefits 73,586 31.8% 65,055 31.8%
Equipment rents 27,235 11.8% 24,582 12.0%
Purchased services 18,033 7.8% 15,128 7.4%
Diesel fuel 28,734 12.4% 21,711 10.6%
Casualties and insurance 10,631 4.6% 10,197 5.0%
Materials 5,468 2.4% 5,183 2.6%
Joint facilities 6,597 2.8% 6,381 3.1%
Other expenses 19,580 8.5% 17,255 8.5%
Net (gain) loss on sale of assets (1,003) -0.4% 242 0.1%
Depreciation and amortization 18,948 8.2% 14,340 7.0%
----------------------------------------------------------------------
Total operating expenses 207,809 89.9% 180,074 88.1%
----------------------------------------------------------------------
Operating income $ 23,374 10.1% $ 24,392 11.9%
======================================================================
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RAILAMERICA, INC. AND SUBSIDIARIES
Railroad Freight Revenue, Carloads and Average Revenue
Per Carload
Comparison by Commodity Group
(dollars in thousands, except average revenue per carload)
(unaudited)
Three months ended June 30,
2006 2005
------------------------- ---------------------------
Average Average
Revenue Revenue
Commodity Freight per Freight per
Group Revenue Carloads Carload Revenue Carloads Carload
----------------------------------------------------------------------
Lumber & Forest
Products $ 14,870 31,752 $ 468 $ 14,435 33,135 $ 436
Chemicals 11,989 26,513 452 11,425 27,883 410
Metal 10,173 22,848 445 9,801 25,648 382
Agricultural &
Farm Products 9,592 27,945 343 8,089 26,385 307
Coal 9,206 39,148 235 8,159 36,335 225
Paper Products 7,870 20,172 390 8,222 22,840 360
Food Products 7,774 21,039 370 7,066 21,251 333
Metallic/Non-
metallic Ores 7,720 23,611 327 4,492 16,694 269
Railroad
Equipment/Bridge
Traffic 7,120 49,091 145 6,094 50,177 121
Minerals 6,419 14,801 434 5,920 15,267 388
Petroleum
Products 4,270 9,991 427 4,284 12,262 349
Other 3,853 10,618 363 3,169 10,894 291
Autos 1,466 4,927 298 1,546 5,946 260
Intermodal 999 8,255 121 917 8,137 113
----------------------------------------------------------------------
Totals $103,321 310,711 $ 333 $ 93,619 312,854 $ 299
======================================================================
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Six months ended June 30,
2006 2005
--------------------------- -------------------------
Average Average
Revenue Revenue
Commodity Freight per Freight per
Group Revenue Carloads Carload Revenue Carloads Carload
----------------------------------------------------------------------
Lumber & Forest
Products $ 29,540 63,798 $ 463 $ 27,586 63,961 $ 431
Chemicals 24,197 55,468 436 23,104 57,421 402
Metal 19,768 45,876 431 18,366 49,136 374
Agricultural &
Farm Products 18,955 55,639 341 16,847 54,706 308
Coal 18,232 79,044 231 16,190 74,447 217
Food Products 15,594 43,478 359 14,452 43,974 329
Paper Products 14,896 39,690 375 16,154 45,291 357
Metallic/Non-
metallic Ores 14,620 44,382 329 8,571 30,304 283
Railroad
Equipment/Bridge
Traffic 14,391 108,037 133 12,740 105,798 120
Minerals 12,664 29,890 424 10,955 28,902 379
Petroleum
Products 9,167 21,998 417 8,593 24,678 348
Other 7,459 21,597 345 5,801 19,299 301
Autos 3,044 10,739 283 3,074 12,691 242
Intermodal 2,070 16,329 127 1,963 17,636 111
----------------------------------------------------------------------
Totals $204,597 635,965 $ 322 $184,396 628,244 $ 294
======================================================================
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