(Source: RailAmerica press release, July 25, 2012)
JACKSONVILLE, Fla. — RailAmerica, Inc. today reported financial results for the quarter ended June 30, 2012. Second quarter 2012 revenue increased 12% to $156.1 million from $139.2 million in the second quarter of 2011. Freight revenue increased 8% to $113.6 million with average revenue per car up 4% and carloads up 4%. Non-freight revenue increased 26% to $42.5 million.
Second Quarter Highlights
• Revenue increased 12% versus second quarter 2011.
• Operating income up 19%; (up 28% excluding 45G benefit, asset sales and impairments(1)).
• Net income of $0.23 per share.
• Adjusted net income per share(1) of $0.34.
RailAmerica President and Chief Executive Officer John Giles said “Exceptional execution by our team drove another strong quarter with operating income on a comparable basis up 28%. We remain well positioned for continued progress in the months ahead. During the second quarter we began integrating our two recent acquisitions. Additionally, our commercial and industrial development teams are pursuing a robust pipeline of opportunities.”
RailAmerica reported second quarter 2012 net income of $11.4 million, or $0.23 per diluted share. This compares to net income of $8.7 million, or $0.17 per diluted share in the second quarter of 2011. Noteworthy items impacting the second quarters of 2012 and 2011 include:
• Early retirement of debt: Second quarter of 2012 included $5.7 million of charges related to the redemption of the remaining $74 million of our 9.25% senior notes.
• Acquisition / Transaction costs: In the second quarter of 2012 the Company incurred $2.2 million of transaction related expenses. A large portion was due to the Company’s previously announced exploration of strategic alternatives. In the second quarter of 2011 the Company spent $0.2 million on acquisition related activity.
• 45G tax credits: A $5.1 million income statement benefit was recorded in the second quarter of 2011, but no benefit was recognized in the second quarter of 2012 since the credit is currently not in effect for 2012.
• Amortization of swap termination costs: Non-cash charges of $1.4 million and $3.2 million were recorded in interest expense during the second quarters of 2012 and 2011, respectively, due to the June 2009 termination of an interest rate swap agreement.
• Asset impairment: Second quarter of 2011 includes a non-cash, $3.2 million impairment charge resulting from a comprehensive evaluation of our locomotive fleet and the identification of surplus units.
The Company reported operating income of $34.2 million in the second quarter of 2012 compared to $28.7 million in the second quarter of 2011. In addition to the items mentioned above impacting operating income, second quarter 2012 expenses were up primarily due to operating expenses from acquisitions and higher engineering services activity.
On July 23, 2012 RailAmerica and Genesee & Wyoming Inc. (GWI) (NYSE: GWR) issued a joint press release announcing they had entered into an agreement under which GWI will acquire RailAmerica for an all cash purchase price of $27.50 per share. RailAmerica will not be holding a conference call to present its second quarter earnings. The Company will post a presentation containing supplemental information for the second quarter and year to date results in the Investors section of RailAmerica’s website (http://www.railamerica.com/).