Exhibit 99.1
For Immediate Release
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October 29, 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 Third Quarter and Nine Month Operating
Results (unaudited)
Pittsburgh, PA, - October 29, 2009 - Portec Rail Products, Inc. (NASDAQ Global
Market -"PRPX") today announced unaudited net income of $2,023,000 or $0.21 per
share for the three months ended September 30, 2009, and $5,362,000 or $0.56 per
share for the nine months ended September 30, 2009. These amounts compare to
unaudited net income of $2,516,000 or $0.26 per share, and $6,264,000 or $0.65
per share, for the three and nine months ended September 30, 2008, respectively.
Average basic and diluted shares outstanding were 9.6 million for all periods
presented. Net sales for the three and nine months ended September 30, 2009 were
$24.3 million and $73.0 million, respectively, while net sales for the three and
nine months ended September 30, 2008 were $29.6 million and $84.7 million,
respectively.
Richard J. Jarosinski, President and Chief Executive Officer said, "We are
pleased with our financial performance in what continues to be a very
challenging economic climate for our industry. We believe that the overall
diversification in our markets and product groups continue to help soften the
impact on our business from the global economic downturn. Lower traffic volumes
continue to be reported by the North American Class 1 heavy-haul railroads.
These customers continue to represent a large portion of our sales, and they
continue to invest in our products and services. We have also achieved sales
levels from new markets for some of our products due to our efforts to continue
global expansion of our products and services."
Mr. Jarosinski continued, "Our friction management product group, which has the
most significant worldwide product exposure and offers multiple operational
savings for both heavy-haul freight and passenger service, continues to grow
despite the economic downturn. Sales of North American Class 1 gage face and top
of rail friction control solutions were the catalyst for this growth while the
remainder of our diversified friction management markets and solutions continue
to expand into new markets. Our efforts have resulted in a second North American
Class 1 customer making a major expansion in the use of our top of rail friction
control solutions. Our wayside data management systems, provided by Salient
Systems, have also had growth for the quarter and year to date periods. We began
the year with a healthy backlog for our wayside data management systems and
received a substantial number of new orders early this year, which helped to
pave the way for the financial results posted thus far for Salient Systems.
Similar to our friction management product group, the North American Class 1
heavy-haul railroads invested in our wayside data management systems in
preparation for higher traffic volumes when economic conditions improve.
Additionally, product sales from areas outside the North American market have
contributed to Salient Systems' results. Our track component product group
continues to be challenged by lower traffic volume and fewer railcar loadings in
North America. We are pleased that some of our past efforts within this product
group have positioned us for better financial performance, which has yielded a
lower cost structure on some products. Our load securement product group has had
a challenging year, as the market for new railcars being built has declined
considerably in 2009. We are encouraged by the products within this product
group, which was strengthened by the Vulcan Chain product line acquisition and
now offers a platform for future growth. Our non-core material handling business
in the United Kingdom has had a difficult year with very challenging economic
conditions. We are optimistic, however, that our product line and engineering
talent in this product group will allow us to capitalize on new order
opportunities."
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. We have some product groups such as
friction management and wayside data management systems that have demonstrated
their ability to assist our customers in reducing operating expenses by
extending 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 will continue to focus on global expansion of our products and
services by organic growth and strategic and accretive acquisitions. We are
pleased with our balance sheet, favorable debt to equity ratio and operating
cash flow. We believe that we are well-positioned to achieve higher levels of
operating performance when favorable economic conditions return to our
industry."
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
June 30, 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 Nine Months Ended
September 30, September 30,
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2009 2008 2009 2008
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(Unaudited) (Unaudited)
Net sales $ 24,285 $ 29,644 $ 72,979 $ 84,681
Cost of sales 15,849 19,731 48,674 57,140
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Gross profit 8,436 9,913 24,305 27,541
Selling, general and administrative 5,411 5,872 16,271 17,267
Amortization expense 283 296 806 891
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Operating income 2,742 3,745 7,228 9,383
Interest expense 64 205 217 640
Other expense (income), net 37 44 (83) (77)
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Income before income taxes 2,641 3,496 7,094 8,820
Provision for income taxes 618 980 1,732 2,556
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Net income $ 2,023 $ 2,516 $ 5,362 $ 6,264
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Earnings per share
Basic and diluted $ 0.21 $ 0.26 $ 0.56 $ 0.65
Average basic and diluted shares
outstanding 9,602,029 9,602,029 9,602,029 9,601,894
Consolidated Condensed Balance Sheets
(In thousands)
September 30, December 31,
2009 2008
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(Unaudited) (Audited)
Assets
Current assets $ 48,258 $ 44,638
Property, plant and equipment, net 10,370 10,203
Goodwill and other intangibles, net 42,811 41,145
Other assets 956 837
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Total assets $ 102,395 $ 96,823
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Liabilities and Shareholders' Equity
Current liabilities $ 19,349 $ 20,832
Other liabilities and long-term debt obligations 18,319 17,815
Shareholders' equity 64,727 58,176
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Total liabilities and shareholders' equity $ 102,395 $ 96,823
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