or Immediate Release Exhibit 99.1
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July 31, 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 Second Quarter and Six Month Operating
Results (unaudited)
Pittsburgh, PA, - July 31, 2009 - Portec Rail Products, Inc. (NASDAQ Global
Market -"PRPX") today announced unaudited net income of $2,203,000 or $0.23 per
share for the three months ended June 30, 2009, and $3,339,000 or $0.35 per
share for the six months ended June 30, 2009. These amounts compare to unaudited
net income of $2,403,000 or $0.25 per share, and $3,747,000 or $0.39 per share,
for the three and six months ended June 30, 2008, respectively. Average basic
and diluted shares outstanding were 9.6 million for all periods presented. Net
sales for the three and six months ended June 30, 2009 were $26.5 million and
$48.7 million, respectively, while net sales for the three and six months ended
June 30, 2008 were $30.2 million and $55.0 million, respectively.
Richard J. Jarosinski, President and Chief Executive Officer said, "We are
pleased with our overall performance for the second quarter and first half of
the year in what continues to be a tough economic climate for our industry. Our
friction management product group continues to lead our performance with
significant growth in the current quarter and year-to-date periods. Despite a
very challenging economic environment, we are satisfied with the performance of
our track component and wayside data management product groups this year. We
also continue to be challenged by the impact of lower foreign currency exchange
rates, which have had a significant negative impact on our sales and
profitability during the current quarter and year-to-date periods."
Mr. Jarosinski continued, "Our friction management product group has been fueled
by increased demand of our wide range of products and services. Demand has come
from a wide range of freight and transit customers, who find value in our
product group's ability to significantly reduce their operating expenses. Major
friction control programs were initiated or expanded for our Total Friction
Management(TM) technology across our primary North American customer base, but
also in other parts of the world where we continue our efforts to expand, such
as in China. Our track component product group's performance this quarter has
been led by our Canadian operation. During the current quarter we have
experienced increased demand for our new ExiTM rail anchor and higher shipments
of rail spikes. Operating cost reduction efforts and timely purchases of raw
materials have contributed to the overall performance of this product group.
We are also pleased with the performance of Salient Systems' wayside data
management product group this year, as the demand for new equipment
installations and equipment upgrades has been very active, mostly for our North
American market. We continue to explore new market opportunities for this
product group, and are expanding our sales efforts in Australia, Brazil and
China. We also continue to push a wide scope of activity for testing the Rail
Stress MonitorTM product in various markets."
Mr. Jarosinski further continued, "Our two other major product groups, the load
securement group provided by our Shipping Systems Division and our United
Kingdom-based non-rail related material handling division, CI Logistics, have
not met our operating expectations for this period or for the year, reflecting
the impact of the severe worldwide recession and the worst market conditions we
have seen in a very long time. The industry's new railcar builds, railcar
maintenance, traffic volumes, railcar loading, and other rolling stock metrics
are at some of the lowest levels in years. In addition, the manufacturing sector
in the United Kingdom has been in a deep decline. As a result, we have continued
to focus on cost control, selective pricing strategies, and aggressive sales
efforts with both of these operating divisions to minimize the effects of the
respective markets conditions."
Mr. Jarosinski concluded, "Despite the economic challenges we continue to face,
we still believe that there are opportunities for our products and services in
our established markets and in new markets if economic conditions do not
continue to further decline. We have some product groups such as friction
management that have been proven to reduce operating expenses by increasing
asset life and reducing fuel costs. Our global customer base recognizes this and
we believe that they will continue to invest in this technology. We continue to
look for strategic and accretive acquisitions, and to search for opportunities
presented by the U.S. American Recovery and Reinvestment Act stimulus package,
including the push for new high speed rail corridors across the United States."
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 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 and Form 10-Q for the
period ended March 31, 2009 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 Six Months Ended
June 30, June 30,
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2009 2008 2009 2008
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(Unaudited) (Unaudited)
Net sales $ 26,530 $ 30,194 $ 48,694 $ 55,037
Cost of sales 17,934 20,276 32,825 37,409
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Gross profit 8,596 9,918 15,869 17,628
Selling, general and administrative 5,480 5,986 10,860 11,395
Amortization expense 270 297 523 595
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Operating income 2,846 3,635 4,486 5,638
Interest expense 79 210 153 436
Other income, net (135) (43) (120) (121)
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Income before income taxes 2,902 3,468 4,453 5,323
Provision for income taxes 699 1,065 1,114 1,576
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Net income $ 2,203 $ 2,403 $ 3,339 $ 3,747
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Earnings per share
Basic and diluted $ 0.23 $ 0.25 $ 0.35 $ 0.39
Average basic shares outstanding 9,602,029 9,601,872 9,602,029 9,601,826
Average diluted shares outstanding 9,602,029 9,602,309 9,602,029 9,601,826
Consolidated Condensed Balance Sheets
(In thousands)
June 30, December 31,
2009 2008
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(Unaudited) (Audited)
Assets
Current assets $ 47,283 $ 44,638
Property, plant and equipment, net 10,155 10,203
Goodwill and other intangibles, net 41,994 41,145
Other assets 859 837
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Total assets $ 100,291 $ 96,823
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Liabilities and Shareholders' Equity
Current liabilities $ 20,651 $ 20,832
Other liabilities and long-term debt obligations 17,820 17,815
Shareholders' equity 61,820 58,176
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Total liabilities and shareholders' equity $ 100,291 $ 96,823
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