|RailAmerica, Inc. Reports Third Quarter 2011 Results
JACKSONVILLE, Fla., Oct. 25, 2011 /PRNewswire via COMTEX/ -- Third Quarter Highlights
- Revenue increased 9% versus third quarter 2010.
- Income from continuing operations of $0.17 per share.
- Adjusted income from continuing operations (1) of $0.24 per share.
RailAmerica, Inc. (NYSE: RA) today reported financial results for the quarter ended September 30, 2011. Third quarter 2011 revenue increased 9% to $139.7 million from $128.3 million in the third quarter of 2010. Freight revenue increased 7% to $104.7 million with average revenue per car up 14% and carloads down 6%. Non-freight revenue increased 14% to $35.0 million.
RailAmerica President and Chief Executive Officer John Giles, said, "This was another strong quarter for us. Operating income excluding 45G credits, impairments and asset sales increased 10%. We achieved these results through our continuing focus on pricing, non-freight revenue and productivity. Our success in these areas allowed us to perform well despite lower carloads and the temporary disruption of service on our New England Central Railroad from Hurricane Irene."
RailAmerica reported third quarter 2011 income from continuing operations of $9.1 million, or $0.17 per diluted share. This compares to $8.0 million, or $0.15 per diluted share in the third quarter of 2010. Noteworthy items impacting the third quarters of 2011 and 2010 include:
- 45G credits: Because the latest extension of the tax credits (for 2010 and 2011) did not occur until December 2010, no maintenance reimbursements were recognized in the third quarter of 2010. A $3.9 million reduction of expense was recorded in the third quarter of 2011.
- Amortization of swap termination costs: Non-cash charges of $2.7 million and $4.9 million were recorded in interest expense during the third quarters of 2011 and 2010, respectively, due to the June 2009 termination of an interest rate swap agreement.
- Asset impairment: Third quarter of 2011 includes a non-cash, $1.9 million impairment charge resulting from further evaluation of our locomotive fleet.
- Credit facility replacement: Third quarter of 2011 includes a $0.7 million non-cash charge related to the replacement of our asset backed loan facility with a new revolving credit facility.
- Acquisition income and expenses: The Company received a break-up fee in the third quarter of 2010 that offset other acquisition expenses resulting in a net $1.7 million of income.
- Asset sales: Third quarter of 2010 includes $1.7 million of gains on asset sales.
- Taxes: Cash taxes paid in the third quarter of 2011 were $1.1 million compared to the financial statement provision for income tax expense of $4.4 million.
The Company reported operating income of $31.5 million in the third quarter of 2011 compared to $28.5 million in the third quarter of 2010. Third quarter 2011 operating income and expenses were favorably impacted by 45G credits as discussed above. In addition, third quarter 2011 operating expenses were up primarily due to higher fuel prices, labor expense and increases in materials and purchased services expenses largely due to growth in engineering services revenue. Operating income excluding the impact of 45G benefit, asset sales and impairments is shown below.
As previously announced, RailAmerica, Inc. will present its third quarter earnings on Wednesday, October 26, 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 14222844. 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 (http://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 November 2, 2011 beginning approximately two hours after the call. The recording can be accessed by dialing (800) 585-8367 or (404) 537-3406. The conference ID number is 14222844.
RailAmerica, Inc. owns and operates short-line and regional freight railroads in North America, operating a portfolio of 43 individual railroads with approximately 7,400 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 end of press release for a reconciliation of non-GAAP financial measure.
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 transaction costs related to debt and credit facility extinguishment, acquisitions, impairment of assets and swap termination. The following table sets forth the reconciliation of Adjusted income from continuing operations.
Note: Numbers may not add due to rounding
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP MEASURES
Operating Income Excluding 45G Benefit, Operating Ratio Excluding 45G Benefit, Operating Income Excluding 45G Benefit, Asset Sales & Impairments and Operating Ratio Excluding 45G Benefit, Asset Sales & Impairments 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 Excluding 45G Benefit, Operating Ratio Excluding 45G Benefit, Operating Income Excluding 45G Benefit, Asset Sales & Impairments and Operating Ratio Excluding 45G Benefit, Asset Sales & Impairments have limitations as analytical tools. They are not measurements of our profitability under GAAP and should not be considered as alternatives to Operating Income or Operating Ratio as measures of profitability.
Operating Income Excluding 45G Benefit and Operating Ratio Excluding 45G Benefit assist us in measuring our performance and profitability of our operations without the impact of monetizing the 45G tax benefit. Operating Income Excluding 45G Benefit, Asset Sales & Impairments and Operating Ratio Excluding 45G Benefit, Asset Sales & Impairments assist us in measuring our performance and profitability of our operations without the impact of monetizing the 45G tax benefit, Asset Sales and Impairments. The following table sets forth the reconciliation of Operating Income Excluding 45G Benefit from our Operating Income, Operating Ratio Excluding 45G Benefit from our Operating Ratio, Operating Income Excluding 45G Benefit, Asset Sales & Impairments from our Operating Income and Operating Ratio Excluding 45G Benefit, Asset Sales & Impairments from our Operating Ratio.
Note: Numbers may not add due to rounding
SOURCE RailAmerica, Inc.