BOCA RATON, Fla. — RailAmerica, Inc., the world’s largest short line and regional railroad operator, today reported its results for the third quarter ended September 30, 2002 in a press release. Year-over-year financial highlights for the quarter included:
* Diluted earnings per share from continuing operations of $.22 versus $.20
* Record third quarter income from continuing operations of $7.3 million, up 41% from $5.2 million
* Record third quarter revenues of $113.9 million, up 22% from $93.2 million
Income from continuing operations for the quarter ended September 30, 2002 increased 41% to a record $7.3 million, or $.22 per diluted share, on 34.7 million shares, compared to $5.2 million, or $.20 per diluted share, on 27.5 million shares, for the quarter ended September 30, 2001. The 2002 results exclude charges of $.03 per share related to the previously announced restructuring, now substantially complete, and the Company’s previously discontinued motor carrier business. Including such costs, income from continuing operations for the 2002 quarter was $6.1 million, or $.19 per diluted share.
Consolidated revenues for the quarter ended September 30, 2002 increased 22% to a record $113.9 million, from $93.2 million during the same period in 2001. Operating income and EBITDA for the third quarter of 2002 increased 4% and 13% to $19.8 million and $28.8 million, respectively, compared to operating income of $19.1 million and EBITDA of $25.6 million for the same period in 2001.
Net income for the third quarter of 2002 was a record $5.9 million, or $.18 per share, after the aforementioned charges as well as an after-tax charge to discontinued operations of $0.2 million, or $.01 per share, related to the Company’s former truck trailer manufacturing business. This compares with net income of $4.9 million, or $.19 per share, for the third quarter of 2001.
“We are pleased to report record third quarter revenues, income from continuing operations, and net income, which were achieved despite the prevailing economic weakness in North America and severe drought conditions in Australia. These solid results were driven by the contributions of our recently acquired ParkSierra and StatesRail railroads, our new copper contract in Chile, lower fuel costs, reduced interest expense, and stringent cost controls,” said Gary O. Marino, Chairman, President and Chief Executive Officer of RailAmerica. “As previously reported, one of the worst droughts in 50 years significantly impacted our Freight Australia revenues, reducing earnings by $.10 per share compared to last year’s third quarter. To help mitigate such impact in the future, Freight Australia has been successful in securing three new long-term transportation contracts valued at over $18 million. We expect that as the Australian grain industry begins to recover, these new contracts and others that are in negotiation should significantly increase and diversify Freight Australia’s revenue base going forward. Further, we are encouraged by the strengthening in North American carloads as reported in September, which has continued into October as well.”
North American revenues for the third quarter of 2002 increased 38% to $84.8 million, from $61.7 million during the same period in 2001, reflecting the contribution of the ParkSierra and StatesRail railroads acquired in January 2002. Metals, chemicals, and intermodal experienced the greatest increase in carloads in the third quarter of 2002 compared to the same period in 2001, while low margin bridge traffic and coal decreased. For the third quarter of 2002, the North American operating ratio improved to 71.5% from the 72.6% reported for the same period in 2001, due primarily to lower fuel expense and rigorous cost controls.
International revenues for the third quarter of 2002 were $29.1 million, down 8% from $31.5 million during the same period in 2001. As noted in prior guidance from the Company, this decline in revenue was due principally to the stockpiling of grain by the Australian Wheat Board in response to the severe drought affecting southeast Australia. Revenues in Chile increased in the third quarter due to new copper business.
Bennett Marks, Executive Vice President and Chief Financial Officer, added, “In the third quarter, we realized the first full quarter’s benefit of the new financing which we completed in May 2002. As a result, interest expense decreased $2.5 million from the third quarter of 2001. In addition, our overall capital structure remains solid, with strong balance sheet ratios and liquidity from cash and unused availability on our revolving line of credit totaling approximately $130 million.”
RailAmerica, Inc. (www.railamerica.com), the world’s largest short line and regional railroad operator, owns 49 railroads operating approximately 12,800 route miles in the United States, Canada, Australia and Chile. In North America, the Company’s railroads operate in 27 states and six Canadian provinces. Internationally, the Company operates an additional 4,300 route miles under track access arrangements in Australia and Argentina. RailAmerica is a member of the Russell 2000® Index and in October 2001 was ranked 85th on Forbes magazine’s list of the 200 Best Small Companies in America.