Find a RailroadGenesee & Wyoming Reports Results for the First Quarter of 2010
GREENWICH, Conn., April 29, 2010 /PRNewswire via COMTEX/ --Genesee & Wyoming Inc. (GWI) (NYSE: GWR) reported net income in the first quarter of 2010 of $16.0 million, compared with net income of $13.9 million in the first quarter of 2009. GWI's diluted earnings per share (EPS) in the first quarter of 2010 were $0.39 with 41.4 million weighted average shares outstanding, compared with diluted EPS of $0.38 with 36.4 million weighted average shares outstanding in the first quarter of 2009.
GWI's effective income tax rate in the first quarter of 2010 was 37.6%, compared with 27.0% in the first quarter of 2009, primarily due to the expiration of the short line tax credit on December 31, 2009.
Results from Continuing Operations
In the first quarter of 2010, GWI's total revenues increased $7.1 million, or 5.1%, to $145.6 million, compared with $138.5 million in the first quarter of 2009. During the first quarter of 2010, the appreciation of the Australian and Canadian dollars and the Euro versus the U.S. dollar increased revenues by $8.4 million. Excluding foreign currency appreciation, GWI's revenues declined $1.3 million, or 0.9%.
Freight revenues in the first quarter of 2010 increased by $0.4 million, or 0.4%, to $89.6 million, compared with $89.2 million in the first quarter of 2009. Freight revenues increased by $4.3 million due to the appreciation of the Australian and Canadian dollars versus the U.S. dollar. Excluding foreign currency appreciation, GWI's freight revenues decreased by $3.9 million, or 4.4%.
Of particular importance in reviewing the first quarter of 2010 was the timing of carloadings, which increased significantly in the month of March. In March 2010, GWI's traffic increased 5.0% compared with March 2009 and 17.8% compared with February 2010. GWI's total traffic in the first quarter was 202,368 carloads, a decrease of 12,071 carloads, or 5.6%, compared with the first quarter of 2009.
Average freight revenues per carload increased 6.5% in the first quarter of 2010. The appreciation of the Australian and Canadian dollars versus the U.S. dollar increased average revenues per carload by 4.9%, and higher fuel surcharges increased average revenues per carload by 0.1%. Excluding these factors, average revenues per carload increased 1.4%.
GWI's non-freight revenues in the first quarter of 2010 increased $6.7 million, or 13.6%, to $56.0 million, compared with $49.3 million in the first quarter of 2009. The increase in non-freight revenues included a $4.1 million increase due to the appreciation of the Australian and Canadian dollars and the Euro versus the U.S. dollar. Excluding foreign currency appreciation, GWI's non-freight revenues increased $2.6 million, or 5.3%.
GWI's operating income in the first quarter of 2010 was $30.1 million, an increase of $4.0 million, or 15.3%, compared with $26.1 million in the first quarter of 2009. GWI's operating ratio was 79.3% in the first quarter of 2010, a 1.8 percentage point improvement over the 81.1% operating ratio in the first quarter of 2009.
Comments from the Chief Executive Officer
John C. Hellmann, President and CEO of GWI, commented, "Our first quarter financial results were a good start to 2010. In late February, our traffic began to strengthen in several commodity groups including steel and grain, and we continued to control our costs. The result was an operating ratio of 79.3%, which is a first quarter record in the history of GWI. We are focused on sustaining this level of operating efficiency for the remainder of the year, regardless of the pace of improvement in the economy."
Mr. Hellmann continued, "We generated $30 million of free cash flow in the first quarter of 2010, further strengthening our balance sheet for acquisitions and investments. While not our exclusive focus, we continue to actively evaluate opportunities that relate to the natural resources sector, similar to the recent contract that we signed to provide rail haulage services for export iron ore in Labrador, Canada."
Free Cash Flow from Continuing Operations (1)
Three Months
($ in millions) Ended
March 31,
2010 2009
---- ----
Net cash provided by
operating activities $33.6 $25.5
Net cash used in
investing activities (3.3) (19.1)
Net cash (received)/paid
for divestitures/
acquisitions (a) (0.2) 5.8
---- ---
Free cash flow (1) $30.2 $12.2
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(a) The 2010 period includes $0.2 million in net cash received from
the sale of our investment in South America. The 2009 period
includes: 1) $4.8 million in net cash paid for final working capital
adjustments related to the acquisition of the Ohio Central Railroad
System (OCR) and 2) $1.0 million in net cash paid for contingent
consideration related to the Rotterdam Rail Feeding B.V. (RRF)
acquisition.
GWI's continuing operations generated free cash flow of $30.2 million and $12.2 million for the quarters ended March 31, 2010 and 2009, respectively. For the quarter ended March 31, 2010, changes in working capital decreased net cash flow from operating activities by $0.1 million. For the quarter ended March 31, 2009, changes in working capital decreased net cash flow from operating activities by $3.5 million.
Net cash used in investing activities for the quarter ended March 31, 2010 included $14.3 million relating to the purchase of property and equipment, partially offset by $10.1 million relating to grant proceeds received from outside parties and $0.8 million from the sale of assets. Net cash used in investing activities in the quarter ended March 31, 2009 included $20.7 million relating to the purchase of property and equipment, partially offset by $3.8 million relating to grant proceeds received from outside parties and $3.6 million from the sale of assets.
Conference Call and Webcast Details
As previously announced, GWI's conference call to discuss financial results for the first quarter will be held Thursday, April 29, 2010, at 11:00 a.m. EDT. The dial-in number for the teleconference is (800) 288-8960; outside U.S., call (612) 332-0107, or the call may be accessed live over the Internet (listen only) under the "Investors" tab of GWI's website (http://www.gwrr.com), by selecting "First Quarter Earnings Audio Webcast." Management will be referring to a slide presentation that will also be available under the "Investors" tab of GWI's website prior to the conference call. An audio replay of the conference call will be accessible via the "Investors" tab of GWI's website starting at 1:00 p.m. on April 29, 2010, until the following quarter's results are posted. Telephone replay is available for 30 days beginning at 12 p.m. EDT on April 29, 2010, by dialing (800) 475-6701 (or outside U.S., dial (320) 365-3844). The access code is 121474.
About Genesee & Wyoming Inc.
GWI owns and operates short line and regional freight railroads in the United States, Canada, Australia and the Netherlands. Operations currently include 62 railroads organized in nine regions, with more than 6,000 miles of owned and leased track and approximately 3,400 additional miles under track access arrangements. GWI provides rail service at 16 ports in North America and Europe and performs contract coal loading and railcar switching for industrial customers.
Cautionary Statement Concerning Forward-Looking Statements
This press release contains forward-looking statements regarding future events and the future performance of Genesee & Wyoming Inc. that involve risks and uncertainties that could cause actual results to differ materially from its current expectations including, but not limited to, economic, political and industry conditions; customer demand, retention and contract continuation; legislative and regulatory developments; increased competition in relevant markets; funding needs and financing sources; susceptibility to various legal claims and lawsuits; strikes or work stoppages; severe weather conditions and other natural occurrences; and others. Words such as "anticipates," "intends," "plans," "believes," "seeks," "expects," "estimates," variations of these words and similar expressions are intended to identify these forward-looking statements. GWI refers you to the documents that it files from time to time with the Securities and Exchange Commission, such as GWI's Forms 10-Q and 10-K which contain additional important factors that could cause its actual results to differ from its current expectations and from the forward-looking statements contained in this press release. GWI disclaims any intention to update the current expectations or forward looking statements contained in this press release.
(1) Free Cash Flow is a non-GAAP financial measure and is not intended to replace net cash provided by operating activities, its most directly comparable GAAP measure. The information required by Regulation G under the Securities Exchange Act of 1934, including a reconciliation to net cash provided by operating activities is included in the tables attached to this press release.
Michael Williams of GWI Corporate Communications
1-203-629-3722
mwilliams@gwrr.com
GENESEE & WYOMING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009
(In thousands, except per share amounts)
(unaudited)
Three Months Ended
March 31,
---------
2010 2009
---- ----
OPERATING REVENUES $145,579 $138,458
OPERATING EXPENSES 115,473 112,358
------- -------
INCOME FROM OPERATIONS 30,106 26,100
INTEREST INCOME 423 182
INTEREST EXPENSE (5,362) (7,180)
OTHER INCOME, NET 450 42
--- ---
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME
TAXES 25,617 19,144
PROVISION FOR INCOME TAXES 9,641 5,163
----- -----
INCOME FROM CONTINUING OPERATIONS 15,976 13,981
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX (16) (33)
--- ---
NET INCOME 15,960 13,948
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING
INTEREST - (1)
--- ---
NET INCOME ATTRIBUTABLE TO GENESEE & WYOMING INC. $15,960 $13,947
======= =======
BASIC EARNINGS PER SHARE ATTRIBUTABLE TO
GENESEE & WYOMING INC. COMMON STOCKHOLDERS:
BASIC EARNINGS PER COMMON SHARE FROM CONTINUING
OPERATIONS $0.41 $0.42
BASIC LOSS PER COMMON SHARE FROM DISCONTINUED
OPERATIONS - -
BASIC EARNINGS PER COMMON SHARE $0.41 $0.42
===== =====
WEIGHTED AVERAGE SHARES - BASIC 38,569 33,467
DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO
GENESEE & WYOMING INC. COMMON STOCKHOLDERS:
DILUTED EARNINGS PER COMMON SHARE FROM CONTINUING
OPERATIONS $0.39 $0.38
DILUTED LOSS PER COMMON SHARE FROM DISCONTINUED
OPERATIONS - -
DILUTED EARNINGS PER COMMON SHARE $0.39 $0.38
===== =====
WEIGHTED AVERAGE SHARES - DILUTED 41,418 36,370
====== ======
GENESEE & WYOMING INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2010 AND DECEMBER 31, 2009
(In thousands)
(unaudited)
March 31, December 31,
ASSETS 2010 2009
---- ----
CURRENT ASSETS:
Cash and cash equivalents $133,448 $105,707
Accounts receivable, net 108,269 109,931
Materials and supplies 8,918 8,939
Prepaid expenses and other 14,697 13,223
Deferred income tax assets, net 15,162 15,161
Current assets of discontinued
operations 265 282
Total current assets 280,759 253,243
------- -------
PROPERTY AND EQUIPMENT, net 1,022,857 1,024,297
GOODWILL 160,611 161,208
INTANGIBLE ASSETS, net 242,488 244,464
DEFERRED INCOME TAX ASSETS, net 3,053 3,122
OTHER ASSETS, net 10,855 10,698
Total assets $1,720,623 $1,697,032
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current portion of long-term
debt $27,954 $27,818
Accounts payable 103,042 104,813
Accrued expenses 40,226 38,181
Deferred income tax
liabilities, net 656 971
Current liabilities of
discontinued operations 13 11
Total current liabilities 171,891 171,794
------- -------
LONG-TERM DEBT, less current
portion 415,728 421,616
DEFERRED INCOME TAX
LIABILITIES, net 249,003 244,924
DEFERRED ITEMS -grants from
outside parties 146,616 146,345
OTHER LONG-TERM LIABILITIES 25,354 23,476
TOTAL EQUITY 712,031 688,877
Total liabilities and equity $1,720,623 $1,697,032
========== ==========
GENESEE & WYOMING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009
(In thousands)
(unaudited)
Three Months Ended
March 31,
---------
2010 2009
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $15,960 $13,948
Adjustments to reconcile net income to net
cash provided by operating activities:
Loss from discontinued operations,
net of tax 16 33
Depreciation and amortization 12,448 11,506
Compensation cost related to equity awards 2,074 1,564
Excess tax benefits from share-based
compensation (673) (10)
Deferred income taxes 4,357 2,240
Net gain on sale of assets (449) (239)
Changes in assets and liabilities
which provided (used) cash, net of
effect of acquisitions:
Accounts receivable, net (5,988) 5,253
Materials and supplies 155 368
Prepaid expenses and other (1,387) 175
Accounts payable and accrued expenses 6,402 (9,264)
Other assets and liabilities, net 722 (42)
Net cash provided by operating
activities from continuing
operations 33,637 25,532
Net cash used in operating
activities from discontinued
operations (23) (411)
--- ----
Net cash provided by operating
activities 33,614 25,121
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (14,328) (20,701)
Grant proceeds from outside parties 10,100 3,771
Cash paid for acquisitions, net - (5,780)
Proceeds from the sale of investment
in South America 208 -
Proceeds from disposition of property
and equipment 768 3,631
Net cash used in investing
activities from continuing
operations (3,252) (19,079)
------ -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term
borrowings, including capital leases (6,820) (76,671)
Proceeds from issuance of long-term debt - 69,000
Proceeds from employee stock purchases 3,096 660
Treasury stock purchases (491) -
Excess tax benefits from share-based
compensation 673 10
Net cash used in financing
activities from continuing
operations (3,542) (7,001)
EFFECT OF EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS 895 242
--- ---
CHANGE IN CASH BALANCES INCLUDED IN CURRENT
ASSETS OF DISCONTINUED OPERATIONS 26 158
--- ---
INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 27,741 (559)
CASH AND CASH EQUIVALENTS, beginning of period 105,707 31,693
------- ------
CASH AND CASH EQUIVALENTS, end of period $133,448 $31,134
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GENESEE & WYOMING INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(dollars in thousands)
(unaudited)
Three Months Ended
March 31,
---------
2010 2009
---- ----
% of % of
Amount Revenue Amount Revenue
------ ------- ------ -------
Revenues:
---------
Freight $89,566 61.5% $89,166 64.4%
Non-freight 56,013 38.5% 49,292 35.6%
------ ---- ------ ----
Total revenues $145,579 100.0% $138,458 100.0%
======== ===== ======== =====
Operating Expense
Comparison:
-----------------
Natural Classification
----------------------
Labor and benefits $50,188 34.4% $49,998 36.1%
Equipment rents 7,649 5.2% 7,890 5.7%
Purchased services 10,397 7.1% 9,311 6.7%
Depreciation and
amortization 12,448 8.6% 11,506 8.3%
Diesel fuel used in
operations 11,037 7.6% 8,993 6.5%
Diesel fuel sold to
third parties 3,793 2.6% 3,389 2.4%
Casualties and insurance 3,904 2.7% 3,584 2.6%
Materials 5,477 3.8% 5,603 4.1%
Net gain on sale of
assets ( 449 ) (0.3%) (239) (0.2%)
Other expenses 11,029 7.6% 12,323 8.9%
Total operating expenses $115,473 79.3% $112,358 81.1%
Functional
Classification
---------------
Transportation $44,616 30.6% $43,129 31.1%
Maintenance of ways and
structures 12,829 8.8% 13,433 9.7%
Maintenance of equipment 16,904 11.6% 17,108 12.4%
Diesel fuel sold to
third parties 3,793 2.6% 3,389 2.4%
General and
administrative 25,332 17.4% 24,032 17.4%
Net gain on sale of
assets ( 449 ) (0.3%) (239) (0.2%)
Depreciation and
amortization 12,448 8.6% 11,506 8.3%
------
Total operating expenses $115,473 79.3% $112,358 81.1%
======== ==== ======== ====
GENESEE & WYOMING INC. AND SUBSIDIARIES
RAILROAD FREIGHT REVENUES, CARLOADS AND AVERAGE REVENUES PER CARLOAD
COMPARISON BY COMMODITY GROUP
(dollars in thousands, except average revenues per carload)
(unaudited)
Three Months Ended Three Months Ended
March 31, 2010 March 31, 2009
-------------- --------------
Average Average
Revenues Revenues
Freight Per Freight Per
Commodity Group Revenues Carloads Carload Revenues Carloads Carload
-------- -------- ------- -------- -------- -------
Coal, Coke & Ores $19,123 52,154 $367 $21,117 57,946 $364
Farm & Food
Products 12,507 24,895 502 10,803 26,392 409
Pulp & Paper 12,230 20,306 602 13,400 24,086 556
Metals 9,702 19,295 503 9,467 19,338 490
Minerals & Stone 9,401 30,786 305 8,507 31,250 272
Chemicals-Plastics 8,752 12,631 693 8,358 12,808 653
Lumber & Forest
Products 6,520 14,658 445 6,616 14,715 450
Petroleum Products 5,374 7,451 721 5,689 7,887 721
Autos & Auto Parts 1,766 2,679 659 1,104 1,708 646
Other 4,191 17,513 239 4,105 18,309 224
Totals $89,566 202,368 $443 $89,166 214,439 $416
======= ======= ======= =======
Reconciliation of non-GAAP Financial Measure
This earnings release contains free cash flow, which is a "non-GAAP financial measure" as this term is defined in Regulation G of the Securities Exchange Act of 1934. In accordance with Regulation G, GWI has reconciled this non-GAAP financial measure to its most directly comparable U.S. GAAP measure.
Free Cash Flow Description and Discussion
Management views Free Cash Flow as an important financial measure of how well GWI is managing its assets. Subject to the limitations discussed below, Free Cash Flow is a useful indicator of cash flow that may be available for discretionary use by GWI. Free Cash Flow is defined as Net Cash Provided by Operating Activities from Continuing Operations less Net Cash Used in Investing Activities from Continuing Operations, excluding the cost of acquisitions and proceeds from divestitures. Key limitations of the Free Cash Flow measure include the assumptions that GWI will be able to refinance its existing debt when it matures and meet other cash flow obligations from financing activities, such as principal payments on debt. Free Cash Flow is not intended to represent, and should not be considered more meaningful than, or as an alternative to, measures of cash flow determined in accordance with GAAP.
The following table sets forth a reconciliation of GWI's Net Cash Provided by Operating Activities from Continuing Operations to GWI's Free Cash Flow ($ in millions):
Three Months
Ended
March 31,
2010 2009
---- ----
Net cash provided by operating activities
from continuing operations $33.6 $25.5
Net cash used in investing activities from
continuing operations (3.3) ( 19.1)
Net cash (received)/paid for divestitures/
acquisitions (0.2) 5.8
---- ---
Free cash flow $30.2 $12.2
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SOURCE Genesee & Wyoming Inc.