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2014 Media Kit
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RailAmerica Posts Q/3 results

By: | at 07:00 PM | Intermodal  

RailAmerica, Inc. reported third quarter 2005 earnings from continuing operations of $7.7 million, or $0.20 per diluted share, compared to a loss of $30.6 million in the 2004 comparable quarter. The 2005 results include a $2.3 million charge ($1.6 million after-tax, or $0.04 per share) for expenses incurred as a result of the previously announced tank car incident in Cincinnati, Ohio. The 2004 results include $12.6 million, ($8.7 million net-of-tax, or $0.25 per share) for the write-down of the Company’s investment in the E&N Railway, and a $39.5 million charge, ($26.9 million net-of-tax, or $0.78 per share) for debt refinancing.

Consolidated revenue from continuing operations for the third quarter of 2005 increased $12.5 million, or 12.5%, to $112.5 million, from $100.0 million in the third quarter of 2004. On a “same railroad” basis, revenue for the third quarter of 2005 increased $10.2 million, or 10.2%, from the third quarter of 2004. “Same railroad” amounts exclude revenue associated with acquired railroads until twelve months after the date of acquisition. Consolidated operating income for the third quarter of 2005 was $13.3 million, compared to $16.0 million in 2004. The operating ratio for the third quarter of 2005 was 88.2% compared to 84.0% in the 2004 quarter. The 2004 operating income and operating ratio are adjusted to exclude the $12.6 million charge for the write-down of the company’s investment in the E&N Railway.

The Company’s average fuel price increased to $1.84 per gallon in the third quarter of 2005 compared to $1.40 per gallon in the third quarter of 2004. Net of fuel surcharges, fuel expense increased $1.1 million in the third quarter of 2005. Excluding the costs associated with the tank car incident and fuel increases, the Company’s operating ratio in the third quarter of 2005 would have been 85.2%. Additionally, in August, the Company incurred $0.6 million in other expense related to the repurchase of the remaining $4.3 million balance of senior subordinated notes. All of the senior subordinated notes have now been redeemed.

For the nine months ended September 30, 2005, the Company reported earnings from continuing operations of $22.9 million, or $0.61 per diluted share, compared to a loss of $25.9 million for the comparable period in 2004. The 2005 results include a $0.01 per share charge from the sale of the LaHarpe - Hollis line of the Toledo, Peoria & Western Railway (TPW), the $0.04 per share charge for the tank car incident in Cincinnati, and a $0.01 per share benefit from a change in the State of Ohio’s tax laws. The 2004 results include $12.6 million, ($8.7 million net-of-tax, or $0.25 per share) for the write down of the E&N Railway, a $39.5 million charge, ($26.9 million net-of-tax, or $0.78 per share) for debt refinancing, and a $6.7 million, ($5.6 million net-of-tax, or $0.16 per share) charge for the former CEO’s retirement.

Consolidated revenue from continuing operations for the nine months ended September 30, 2005 increased $41.3 million, or 14.2%, to $333.4 million, from $292.1 million in 2004. On a “same railroad” basis, revenue for the nine months ended September 30, 2005 increased $28.6 million, or 9.8%, from the nine months ended September 30, 2004. Consolidated operating income for the nine months ended September 30, 2005 was $39.9 million, compared to $29.9 million for the nine months ended September 30, 2004. The effective tax rate is 9% for the nine month period ended September 30, 2005 due to lower than previously projected pre-tax earnings.

Charles Swinburn, RailAmerica’s Chief Executive Officer, said, “While we are pleased by our revenue growth in the third quarter, the tank car incident in Cincinnati, higher than forecasted fuel prices, Class I congestion and continued losses in our Ohio operation contributed to higher than expected expenses. We are very pleased with our safety improvement efforts, notwithstanding the costs associated with the tank car incident which we view as an isolated event. Excluding the tank car incident, casualty and in