Exhibit 99.1
For Immediate Release
Thursday, April 30, 2009
For further information contact
Richard J. Jarosinski
President and Chief Executive Officer
Portec Rail Products, Inc.
(412) 782-6000, ext. 4230
Press Release
Portec Rail Products, Inc. Reports 2009 First Quarter Operating Results
(unaudited)
Pittsburgh, PA, - Thursday, April 30, 2009 - Portec Rail Products, Inc. (NASDAQ
Global Market -"PRPX") today announced unaudited net income of $1,136,000 or
$0.12 per share on average basic and diluted shares outstanding of 9,602,029 for
the three months ended March 31, 2009. This compares to unaudited net income of
$1,344,000 or $0.14 per share on average basic and diluted shares outstanding of
9,601,779 for the three months ended March 31, 2008. Net sales for the first
quarter of 2009 were $22.2 million compared to $24.8 million for the first
quarter 2008.
Richard J. Jarosinski, President and Chief Executive Officer said, "Even though
we are operating in one of the most challenging economic environments in recent
history, we are pleased with our financial results for the current quarter. Our
friction management product group continues to achieve strong sales growth and
improved profitability as more of our customers are implementing our Total
Friction Management TM technology across their network. Net sales and net income
for our Salient Systems business unit, which provides wayside data collection
products, were slightly higher this quarter than in the comparative period in
2008, reflecting very good order bookings. During the first quarter of 2009, we
were also impacted by much lower foreign exchange rates of the Canadian dollar
and the British pound sterling in relation to the U.S. dollar, which has had a
significant negative impact on our sales and net income."
Mr. Jarosinski continued, "North American heavy-haul freight traffic volume
showed a double-digit decline in the first quarter of 2009 compared to the first
quarter of 2008. This had a significant impact on the sales of our track
component product group this quarter. Despite the challenging sales environment,
we were able to achieve higher gross profit for this product group due to a more
efficient cost structure, manufacturing efficiencies, and a more favorable
product mix within this product group."
Mr. Jarosinski further continued, "Economic conditions also had a significant
impact on both our load securement product group and our United Kingdom non-rail
related material handling product group in the first quarter. The load
securement products are being negatively impacted by a significant downturn in
North American rolling stock requirements, which are impacted by a lower number
of new rail cars being built and lower rail traffic volume for various commodity
groups. The downturn in our material handling business is due to the current
state of the manufacturing climate in the United Kingdom, which is the primary
market for this product group."
Mr. Jarosinski concluded, "We are encouraged that dialogue is taking place among
economic experts suggesting that the recession may bottom out in 2009 and that
this may occur sooner rather than later. However, if the current economic
conditions become more severe or prolonged than is currently envisioned, our
operations may experience slower growth and lower revenues. We have had some
encouraging opportunities related to the desire of the United States government
to devote significant resources to rebuilding the nation's infrastructure. In
addition, we believe that that the North American railroads have a strong desire
to continue infrastructure investment even under these difficult and uncertain
economic times. We will continue to focus on providing value to our customers by
providing products and services that reduce their operating costs and improve
their overall efficiencies. We also believe that a favorable climate for
strategic acquisitions exists, and we will continue to expand our markets where
possible."
Portec Rail Products, Inc., headquartered in Pittsburgh, Pennsylvania,
manufactures, supplies and distributes a broad range of railroad products,
including rail joints, rail anchors and spikes, railway friction management
products, railway wayside data collection and data management systems and load
securement systems. The Company's largest business unit, the Railway Maintenance
Products Division, operates a manufacturing and assembly plant in Huntington,
West Virginia, an engineering and assembly facility in Dublin, Ohio (Salient
Systems), and is also headquartered in Pittsburgh. The Company also has two
Canadian subsidiaries, one of which is headquartered near Montreal with a
manufacturing operation in St. Jean, Quebec and the other headquartered in
Vancouver, British Columbia that is a technology and manufacturing facility
(Kelsan Technologies). In addition, the Company sells load securement systems to
the railroad freight car market through its Shipping Systems Division located
near Chicago, Illinois. The Company also manufactures railway products and
material handling equipment in the United Kingdom with operations in Leicester,
England and Sheffield, England. Portec Rail Products, Inc.'s web site address is
www.portecrail.com.
The foregoing information contains forward-looking statements. The Company
cautions that such statements are subject to a number of uncertainties. The
Company identifies below important factors that could affect the Company's
financial performance and could cause the Company's actual results for future
periods to differ materially from any opinions or statements expressed with
respect to future periods in any current statements. In particular, the
Company's future results could be affected by a variety of factors, such as
customer demand for our products; competitive dynamics in the North American and
worldwide railroad and railway supply industries; capital expenditures by the
railway industry in North America and worldwide; the development and retention
of sales representation and distribution agreements with third parties;
fluctuations in the cost and availability of raw materials and supplies;
currency rate fluctuations; and exposure to pension liabilities. Additional
cautions regarding forward-looking statements are provided in the Company's Form
10-K for the year ended December 31, 2008 under the heading "Cautionary
Statement Relevant to Forward-looking Statements." The Company does not
undertake, and specifically disclaims, any obligation to update or revise any
forward-looking statement, whether written or oral, that may be made from time
to time by or on behalf of the Company.
Portec Rail Products, Inc.
Consolidated Statements of Income
(In thousands, except share and per share data)
Three Months Ended
March 31
---------------------------------
2009 2008
---------------------------------
(Unaudited)
Net sales $ 22,164 $ 24,843
Cost of sales 14,891 17,133
---------------------------------
Gross profit 7,273 7,710
Selling, general and administrative 5,380 5,409
Amortization expense 253 298
---------------------------------
Operating income 1,640 2,003
Interest expense 74 226
Other expense (income), net 15 (78)
---------------------------------
Income before income taxes 1,551 1,855
Provision for income taxes 415 511
---------------------------------
Net income $ 1,136 $ 1,344
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Earnings per share - basic and diluted $ 0.12 $ 0.14
Average basic and diluted shares outstanding 9,602,029 9,601,779
Consolidated Condensed Balance Sheets
(In thousands)
March 31 December 31
2009 2008
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(Unaudited) (Audited)
Assets
Current assets $ 46,005 $ 44,638
Property, plant and equipment, net 9,808 10,203
Goodwill and other intangibles, net 40,424 41,145
Other assets 787 837
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Total assets $ 97,024 $ 96,823
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Liabilities and Shareholders' Equity
Current liabilities $ 22,154 $ 20,832
Other liabilities and long-term debt obligations 16,791 17,815
Shareholders' equity 58,079 58,176
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Total liabilities and shareholders' equity $ 97,024 $ 96,823
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