JACKSONVILLE, Fla., April 27, 2011 /PRNewswire/ --
First Quarter Highlights
- Revenue increased 9% and carloads declined 1% versus first quarter 2010.
- Income from continuing operations of $0.07 per share.
- Adjusted income from continuing operations(1) of $0.12 per share.
- Announced agreement to acquire three Alabama railroads.
RailAmerica, Inc. (NYSE: RA) today reported financial results for the quarter ended March 31, 2011. First quarter 2011 revenue increased 9% to $124.9 million from $114.9 million in the first quarter of 2010. Freight revenue increased 3% to $97.6 million with carloads down 1%. Non-freight revenue increased 36% to $27.3 million. Excluding the acquisition of Atlas Railroad Construction Company, non-freight revenue increased 22% versus first quarter 2010.
RailAmerica President and Chief Executive Officer John Giles, said, "Our operations performed well in the quarter in the face of challenging weather and a sharp run up in fuel prices. We remain encouraged as we look ahead. The outlook for traffic is favorable and we continue to make progress on our growth and productivity initiatives. We are also continuing our strong, disciplined push in the corporate development area and were pleased to announce earlier this month an agreement to acquire three railroads in Alabama."
RailAmerica reported first quarter 2011 income from continuing operations of $4.1 million, or $0.07 per diluted share. This compares to a loss from continuing operations of $2.5 million, or $0.05 per diluted share in the first quarter of 2010. Noteworthy items impacting the first quarters of 2011 and 2010 include:
- 45G tax credits: Because the latest extension of the credits (for 2010 and 2011) did not occur until December 2010, no benefits were recognized in the first quarter of 2010. A $4.2 million income statement benefit was recorded in the first quarter of 2011.
- Amortization of swap termination costs: Non-cash charges of $3.7 million and $6.1 million were recorded in interest expense during the first quarters of 2011 and 2010, respectively, due to the June 2009 termination of an interest rate swap agreement.
- Severance costs: First quarter 2011 labor and benefits costs include $1.6 million in severance expenses related to consolidating dispatching services and other organizational changes.
- Styrene resolution: The Company resolved outstanding legal issues from a 2005 styrene car incident resulting in a $1.2 million favorable adjustment to casualty and insurance costs during the first quarter of 2011.
- Taxes: Cash taxes paid in the first quarter of 2011 were $1.3 million compared to the financial statement provision for income tax expense of $2.1 million.
For the Three Months Ended March 31, ($ in thousands except EPS) 2011 2010 --------------- --------------- Pre Tax EPS Pre Tax EPS --------------- --------------- 45G tax credits $4,150 $0.05 $0 $0.00 Amortization of swap termination costs (3,677) (0.04) (6,073) (0.07) Severance costs (1,587) (0.02) - - Styrene resolution 1,200 0.01 - - Note: Effective tax rates of 39% and 40% for 2011 and 2010 respectively.
The Company reported operating income of $24.2 million in the first quarter of 2011 compared to $19.2 million in the first quarter of 2010. First quarter 2011 operating income and expenses were impacted by 45G tax credits, severance costs and the styrene matter discussed above. Other first quarter 2011 operating expenses were up due to higher fuel prices, weather and the inclusion of Atlas Railroad Construction Company. Operating income excluding the impact of the 45G tax credits and asset sales is shown below.
For the Three Months Ended March 31, -------------------------- 2011 2010 --------- --------- ($ in thousands) Operating revenue $124,937 $114,941 Operating expense 100,734 95,740 -------- -------- Operating income, reported 24,203 19,201 Less: Benefit from 45G tax credit monetization (4,150) - -------- -------- Operating income before 45G Benefit (1) 20,053 19,201 Less net (gain) / loss on sale of assets 207 (34) -------- -------- Operating income before 45G Benefit and Asset Sales (1) 20,260 19,167 (1) See schedule at the end of press release for a reconciliation of non-GAAP financial measure
As previously announced, RailAmerica, Inc. will present its first quarter earnings on Thursday, April 28, 2011 at 8:30 a.m. Eastern Time via live teleconference and webcast. Those interested in participating via teleconference may dial (877) 756-2088. Callers outside the U.S. may dial (706) 643-9763. The conference ID number is 57447874. Participants should dial in no later than 10 minutes prior to the call. Presentation materials and access to the live webcast will be available in the Investors section of RailAmerica's website (www.railamerica.com). Following the earnings call, a webcast replay will be archived on the Company's website. A telephone replay will be available through May 12, 2011 beginning approximately two hours after the call. The recording can be accessed by dialing (800) 642-1687 or (706) 645-9291. The conference ID number is 57447874.
RailAmerica, Inc. owns and operates short line and regional freight railroads in North America, operating a portfolio of 40 individual railroads with approximately 7,300 miles of track in 27 U.S. states and three Canadian provinces.
Cautionary Note Regarding Forward-Looking Statements
Certain items in this press release and other information we provide from time to time may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, but not necessarily limited to, statements relating to future events and financial performance. Words such as "anticipates," "expects," "intends," "plans," "projects," "believes," "appears," "may," "will," "would," "could," "should," "seeks," "estimates" and variations on these words and similar expressions are intended to identify such forward-looking statements. These statements are based on management's current expectations and beliefs and are subject to a number of factors that could lead to actual results materially different from those described in the forward-looking statements. RailAmerica, Inc. can give no assurance that its expectations will be attained. Accordingly, you should not place undue reliance on any forward-looking statements contained in this press release. Factors that could have a material adverse effect on our operations and future prospects or that could cause actual results to differ materially from RailAmerica, Inc.'s expectations include, but are not limited to, prolonged capital markets disruption and volatility, general economic conditions and business conditions, our relationships with Class I railroads and other connecting carriers, our ability to obtain railcars and locomotives from other providers on which we are currently dependent, legislative and regulatory developments including rulings by the Surface Transportation Board or the Railroad Retirement Board, strikes or work stoppages by our employees, our transportation of hazardous materials by rail, rising fuel costs, goodwill assessment risks, acquisition risks, competitive pressures within the industry, risks related to the geographic markets in which we operate; and other risks detailed in RailAmerica, Inc.'s filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q. In addition, new risks and uncertainties emerge from time to time, and it is not possible for RailAmerica, Inc. to predict or assess the impact of every factor that may cause its actual results to differ from those contained in any forward-looking statements. Such forward-looking statements speak only as of the date of this press release. RailAmerica, Inc. expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in its expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.
(1) See schedule at the end of press release for a reconciliation of non-GAAP financial measure
RAILAMERICA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data) For the Quarters Ended March 31, 2011 2010 -------- -------- Operating revenue $124,937 $114,941 Operating expenses: Labor and benefits 41,617 37,751 Equipment rents 8,666 8,499 Purchased services 9,106 8,555 Diesel fuel 14,167 11,244 Casualties and insurance 2,134 3,633 Materials 5,085 3,925 Joint facilities 2,205 2,146 Other expenses 9,933 9,098 Track maintenance expense reimbursement (4,150) - Net loss (gain) on sale of assets 207 (34) Depreciation and amortization 11,764 10,923 -------- -------- Total operating expenses 100,734 95,740 -------- -------- Operating income 24,203 19,201 Interest expense, including amortization costs (18,591) (22,704) Other income 540 459 -------- -------- Income (loss) from continuing operations before income taxes 6,152 (3,044) Provision for (benefit from) income taxes 2,067 (530) -------- -------- Net income (loss) $4,085 $(2,514) ======== ======== Basic earnings (loss) per common share: Net income (loss) $0.07 $(0.05) Diluted earnings (loss) per common share: Net income (loss) $0.07 $(0.05) Weighted average common shares outstanding: Basic 54,651 54,568 Diluted 54,651 54,568 RAILAMERICA, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) March 31, December 31, 2011 2010 ----------- ------------ (In thousands, except share data) ASSETS Current assets: Cash and cash equivalents $130,054 $152,968 Accounts and notes receivable, net of allowance of $7,440 and $6,767, respectively 77,931 74,668 Current deferred tax assets 25,809 12,769 Other current assets 19,136 15,200 ---------- ---------- Total current assets 252,930 255,605 Property, plant and equipment, net 986,188 981,622 Intangible assets 140,102 140,546 Goodwill 212,721 212,495 Other assets 12,936 13,385 ---------- ---------- Total assets $1,604,877 $1,603,653 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current maturities of long-term debt $290 $403 Accounts payable 72,780 66,258 Accrued expenses 38,885 36,913 ---------- ---------- Total current liabilities 111,955 103,574 Long-term debt, less current maturities 1,997 2,147 Senior secured notes 571,750 571,161 Deferred income taxes 218,701 202,985 Other liabilities 18,687 19,037 ---------- ---------- Total liabilities 923,090 898,904 ----------- ---------- Commitments and contingencies Stockholders' equity: Common stock, $0.01 par value, 400,000,000 shares authorized; 53,166,672 shares issued and outstanding at March 31, 2011; and 54,859,261 shares issued and outstanding at December 31, 2010 532 549 Additional paid in capital and other 603,602 636,757 Retained earnings 69,588 65,503 Accumulated other comprehensive income 8,065 1,940 ---------- ---------- Total stockholders' equity 681,787 704,749 ---------- ---------- Total liabilities and stockholders' equity $1,604,877 $1,603,653 ========== ========== RAILAMERICA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Quarters Ended March 31, --------------------- 2011 2010 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $4,085 $(2,514) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization, including amortization of debt issuance costs classified in interest expense 12,945 12,151 Amortization of swap termination costs 3,677 6,073 Net loss (gain) on sale or disposal of properties 207 (34) Equity compensation costs 2,609 1,525 Deferred income taxes and other 615 (1,952) Changes in operating assets and liabilities, net of acquisitions and dispositions: Accounts receivable (3,025) (9,980) Other current assets (3,924) 6,618 Accounts payable 4,198 9,220 Accrued expenses 2,124 4,169 Other assets and liabilities (388) 164 -------- -------- Net cash provided by operating activities 23,123 25,440 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment (15,786) (11,679) NECR government grant reimbursements 2,400 - Proceeds from sale/disposition of assets 848 343 -------- -------- Net cash used in investing activities (12,538) (11,336) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Principle payments on long term debt (263) (292) Repurchase of common stock (33,634) - Costs associated with sale of common stock - (106) Deferred financing costs paid (119) (95) -------- -------- Net cash used in financing activities (34,016) (493) -------- -------- Effect of exchange rates on cash 517 319 -------- -------- Net (decrease) increase in cash (22,914) 13,930 Cash, beginning of period 152,968 190,218 -------- -------- Cash, end of period $130,054 $204,148 ======== ======== RAILAMERICA, INC. AND SUBSIDIARIES SELECTED FINANCIAL INFORMATION (Amounts in thousands) (Unaudited) Quarters Ended March 31, --------------------------------------- 2011 2010 ------------------ ------------------ Operating revenue $124,937 100.0% $114,941 100.0% Operating expenses: Labor and benefits 41,617 33.3% 37,751 32.8% Equipment rent 8,666 6.9% 8,499 7.4% Purchased services 9,106 7.3% 8,555 7.4% Diesel fuel 14,167 11.3% 11,244 9.8% Casualties and insurance 2,134 1.7% 3,633 3.2% Materials 5,085 4.1% 3,925 3.4% Joint facilities 2,205 1.8% 2,146 1.9% Other expenses 9,933 7.9% 9,098 7.9% Track maintenance expense reimbursement (4,150) -3.3% - 0.0% Net loss (gain) on sale of assets 207 0.2% (34) 0.0% Depreciation and amortization 11,764 9.4% 10,923 9.5% -------- ------ -------- ------ Total operating expenses 100,734 80.6% 95,740 83.3% -------- ------ -------- ----- Operating income $24,203 19.4% $19,201 16.7% ======== ====== ======== ===== RAILAMERICA, INC. AND SUBSIDIARIES Railroad Freight Revenue, Carloads and Average Freight Revenue Per Carload Comparison by Commodity Group (Unaudited) Quarter Ended Quarter Ended March 31, 2011 March 31, 2010 -------------------------- -------------------------- Average Average Freight Freight Revenue Revenue Freight per Freight per Revenue Carloads Carload Revenue Carloads Carload ------- -------- ------- ------- -------- ------- (Dollars in thousands, except average freight revenue per carload) Chemicals $16,165 24,902 $649 $14,015 23,412 $599 Agricultural Products 14,935 30,710 486 15,486 33,942 456 Metallic Ores and Metals 10,197 16,599 614 9,623 17,059 564 Pulp, Paper and Allied Products 9,733 17,007 572 9,119 15,373 593 Non-Metallic Minerals and Products 9,053 19,850 456 7,893 17,764 444 Coal 8,587 40,745 211 9,585 42,775 224 Food or Kindred Products 7,091 13,636 520 6,852 14,018 489 Forest Products 6,834 11,432 598 6,592 11,486 574 Petroleum 5,649 11,316 499 5,645 11,823 477 Waste and Scrap Materials 5,235 13,093 400 5,305 13,115 404 Other 2,573 7,055 365 2,914 7,242 402 Motor Vehicles 1,583 2,697 587 1,806 3,241 557 ------- -------- ------- ------- -------- ------- Total $97,635 209,042 $467 $94,835 211,250 $449 ======= ======== ======= ======= ======== =======
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP MEASURES
Adjusted income from continuing operations is a supplemental measure of profitability that is not calculated or presented in accordance with U.S. generally accepted accounting principles ("GAAP"). We use non-GAAP financial measures as a supplement to our GAAP results in order to provide a more complete understanding of the factors and trends affecting our business. However, Adjusted income from continuing operations has limitations as an analytical tool. It is not a measurement of our profitability under GAAP and should not be considered as an alternative to Income (loss) from continuing operations as a measure of profitability.
Adjusted income from continuing operations assists us in measuring our performance and profitability of our operations without the impact of foreign exchange loss (gain) on debt and transaction costs related to debt extinguishment, acquisitions and swap termination. The following table sets forth the reconciliation of Adjusted income from continuing operations.
------------------------------------------ (In thousands, except per Q1 2011 Q1 2010 share data) After Tax Per Share After Tax Per Share -------------------- -------------------- Income (loss) from continuing operations $4,085 $0.07 ($2,514) ($0.05) Add: Amortization of swap termination costs 2,243 $0.04 3,644 $0.07 Acquisition costs 44 $0.00 - - Adjusted income from continuing operations $6,372 $0.12 $1,130 $0.02 Weighted Average common shares outstanding (diluted) 54,651 54,568 Note: Numbers may not add due to rounding
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP MEASURES
Operating Income Before 45G Benefit, Operating Ratio Before 45G Benefit, Operating Income Before 45G Benefit and Asset Sales and Operating Ratio Before 45G Benefit and Asset Sales are supplemental measures of profitability that are not calculated or presented in accordance with U.S. generally accepted accounting principles ("GAAP"). We use non-GAAP financial measures as a supplement to our GAAP results in order to provide a more complete understanding of the factors and trends affecting our business. However, Operating Income Before 45G Benefit, Operating Ratio Before 45G Benefit, Operating Income Before 45G Benefit and Asset Sales and Operating Ratio Before 45G Benefit and Asset Sales have limitations as an analytical tool. They are not measurements of our profitability under GAAP and should not be considered as an alternative to Operating Income or Operating Ratio as a measure of profitability.
Operating Income Before 45G Benefit and Operating Ratio Before 45G Benefit assists us in measuring our performance and profitability of our operations without the impact of monetizing the 45G Tax Benefit. Operating Income Before 45G Benefit and Asset Sales and Operating Ratio Before 45G Benefit and Asset Sales assists us in measuring our performance and profitability of our operations without the impact of monetizing the 45G Tax Benefit and Asset Sales. The following table sets forth the reconciliation of Operating Income Before 45G Benefit from our Operating Income, Operating Ratio Before 45G Benefit from our Operating Ratio, Operating Income Before 45G Benefit and Asset Sales from our Operating Income and Operating Ratio Before 45G Benefit and Asset Sales from our Operating Ratio.
------------------------------- ($ in thousands) Q1 2011 Q1 2010 --------------- --------------- Operating revenue $124,937 $114,941 Operating expense 100,734 95,740 -------- -------- Operating Income, reported 24,203 19,201 Operating ratio Reported 80.6% 83.3% Less: Benefit from 45G tax credit monetization (4,150) 3.3% - 0.0% -------- ---- -------- ---- Operating income before 45G Benefit 20,053 19,201 Operating ratio before 45G Benefit 83.9% 83.3% Net (gain) loss on sale of assets 207 -0.2% (34) 0.0% -------- ---- -------- ---- Operating income before 45G Benefit and Asset Sales $20,260 $19,167 Operating ratio, before 45G Benefit and Asset Sales 83.8% 83.3% Note: Numbers may not add due to rounding
SOURCE RailAmerica, Inc.
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