Genesee & Wyoming Reports Results for the First Quarter of 2009
GWI’s income from continuing operations in the first quarter of 2009 was
GWI’s results in the first quarter benefited
Continuing Operations
In the first quarter of 2009, GWI’s revenues decreased
Freight revenues in the first quarter of 2009 increased by
GWI’s traffic in the first quarter of 2009 increased 25,012 carloads, or 13.2%, compared with the first quarter of 2008. Same railroad traffic decreased by 15,759 carloads, or 8.3%. The decrease was principally due to declines of 7,292 carloads of pulp and paper traffic, 6,494 carloads of metals traffic and 3,616 carloads of lumber and forest products traffic. These decreases were partially offset by a 6,353 carload increase in farm and food products traffic primarily in
Average freight revenues per carload declined 10.2% in the first quarter of 2009. Same railroad average revenues per carload declined 9.1%. Same railroad average revenues per carload were negatively impacted by three factors: changes in commodity mix, the depreciation of the Canadian and Australian dollars and lower fuel surcharges, which reduced average revenues per carload by 5.4%, 5.2%, and 3.1%, respectively. Excluding these three factors, same railroad average revenues per carload increased 4.6%. In
GWI’s non-freight revenues in the first quarter of 2009 decreased
GWI’s operating income in the first quarter of 2009 increased 22.5% to
Comments from the Chief Executive Officer
“Several areas of GWI’s business have been less affected by the recession, including our grain shipments in
Free Cash Flow from Continuing Operations (1)
($ in millions) Three Months Ended
March 31,
--------
2009 2008
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$25.5 $8.1
Net cash provided by operating activities
Net cash used in investing activities (19.1) (7.0)
Net cash paid for acquisitions (a) 5.8 3.6
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Free cash flow (1) $12.2 $4.7
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(a) 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 (or euro 0.8
million) in net cash paid in contingent consideration related to the
Rotterdam Rail Feeding B.V. (RRF) acquisition. The 2008 period
includes $3.6 million in net cash paid for the acquisition of
Maryland Midland Railway, Inc. (Maryland Midland).
GWI’s continuing operations generated free cash flow of
Net cash used in investing activities for the first quarter of 2009 included
Conference Call and Webcast Details
As previously announced, GWI’s conference call to discuss financial results for the first quarter will be held
About Genesee & Wyoming Inc.
GWI owns and operates short line and regional freight railroads in
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, 2009 AND 2008
(In thousands, except per share amounts)
(unaudited)
Three Months Ended
March 31,
---------
2009 2008
---- ----
OPERATING REVENUES $138,458 $140,681
OPERATING EXPENSES 112,358 119,375
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INCOME FROM OPERATIONS 26,100 21,306
INTEREST INCOME 182 585
INTEREST EXPENSE (7,180) (3,909)
OTHER INCOME, NET 42 98
-- --
INCOME FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES 19,144 18,080
PROVISION FOR INCOME TAXES 5,163 6,819
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INCOME FROM CONTINUING OPERATIONS, NET OF TAX 13,981 11,261
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX (33) (839)
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NET INCOME 13,948 10,422
LESS: NET INCOME ATTRIBUTABLE TO THE
NONCONTROLLING INTEREST (1) (25)
-- ---
NET INCOME ATTRIBUTABLE TO GENESEE & WYOMING INC. $13,947 $10,397
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BASIC EARNINGS PER SHARE ATTRIBUTABLE TO
GENESEE & WYOMING INC. COMMON STOCKHOLDERS:
BASIC EARNINGS PER COMMON SHARE FROM
CONTINUING OPERATIONS $0.42 $0.36
BASIC LOSS PER COMMON SHARE FROM DISCONTINUED
OPERATIONS - (0.03)
- -----
BASIC EARNINGS PER COMMON SHARE $0.42 $0.33
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WEIGHTED AVERAGE SHARES - BASIC 33,467 31,498
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DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO
GENESEE & WYOMING INC. COMMON STOCKHOLDERS:
DILUTED EARNINGS PER COMMON SHARE FROM
CONTINUING OPERATIONS $0.38 $0.31
DILUTED LOSS PER COMMON SHARE FROM
DISCONTINUED OPERATIONS - (0.02)
- -----
DILUTED EARNINGS PER COMMON SHARE $0.38 $0.29
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WEIGHTED AVERAGE SHARES - DILUTED 36,370 36,033
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GENESEE & WYOMING INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2009 AND DECEMBER 31, 2008
(In thousands)
(unaudited)
March 31, December 31,
ASSETS 2009 2008
---- ----
CURRENT ASSETS:
Cash and cash equivalents $31,134 $31,693
Accounts receivable, net 109,127 120,874
Materials and supplies 7,272 7,708
Prepaid expenses and other 12,019 12,270
Current assets of discontinued operations 1,530 1,676
Deferred income tax assets, net 18,101 18,101
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Total current assets 179,183 192,322
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PROPERTY AND EQUIPMENT, net 995,735 998,995
INVESTMENT IN UNCONSOLIDATED AFFILIATES 4,987 4,986
GOODWILL 151,624 150,958
INTANGIBLE ASSETS, net 222,072 223,442
DEFERRED INCOME TAX ASSETS, net 16,540 16,578
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Total assets $1,570,141 $1,587,281
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $27,007 $26,034
Accounts payable 107,404 124,162
Accrued expenses 35,274 37,903
Current liabilities of discontinued operations 980 1,121
Deferred income tax liabilities, net 2 192
- ---
Total current liabilities 170,667 189,412
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LONG-TERM DEBT, less current portion 525,788 535,231
DEFERRED INCOME TAX LIABILITIES, net 239,157 234,979
DEFERRED ITEMS - grants from outside parties 113,934 113,302
OTHER LONG-TERM LIABILITIES 27,073 34,943
TOTAL STOCKHOLDERS' EQUITY 493,522 479,414
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Total liabilities and stockholders'
equity $1,570,141 $1,587,281
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GENESEE & WYOMING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2009 AND 2008
(In thousands)
(unaudited)
Three Months
Ended March 31,
----------------
2009 2008
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $13,948 $10,422
Adjustments to reconcile net income to net cash
provided by operating activities:
Loss from discontinued operations, net of tax 33 839
Depreciation and amortization 11,506 9,199
Compensation cost related to equity awards 1,564 1,338
Excess tax benefits from share-based compensation (10) (845)
Deferred income taxes 2,240 2,826
Net gain on sale of assets (239) (550)
Changes in assets and liabilities which provided
(used) cash, net of effect of acquisitions:
Accounts receivable, net 5,253 (2,994)
Materials and supplies 368 (268)
Prepaid expenses and other 175 594
Accounts payable and accrued expenses (9,264) (12,716)
Other assets and liabilities, net (42) 256
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Net cash provided by operating
activities from continuing operations 25,532 8,101
Net cash used in operating activities
from discontinued operations (411) (776)
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Net cash provided by operating
activities 25,121 7,325
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (20,701) (15,664)
Grant proceeds from outside parties 3,771 10,360
Cash paid for acquisitions, net (5,780) (3,613)
Proceeds from disposition of property and equipment 3,631 1,897
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Net cash used in investing activities
from continuing operations (19,079) (7,020)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term borrowings,
including capital leases (76,671) (30,058)
Proceeds from issuance of long-term debt 69,000 17,500
Net proceeds from employee stock purchases 660 2,353
Excess tax benefits from share-based compensation 10 845
-- ---
Net cash used in financing activities
from continuing operations (7,001) (9,360)
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EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH
EQUIVALENTS 242 1,067
--- -----
CHANGE IN CASH BALANCES INCLUDED IN CURRENT ASSETS OF
DISCONTINUED OPERATIONS 158 41
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DECREASE IN CASH AND CASH EQUIVALENTS (559) (7,947)
CASH AND CASH EQUIVALENTS, beginning of period 31,693 46,684
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CASH AND CASH EQUIVALENTS, end of period $31,134 $38,737
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GENESEE & WYOMING INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(dollars in thousands)
(unaudited)
Three Months Ended
March 31,
---------
2009 2008
---- ----
% of % of
Amount Revenue Amount Revenue
------ ------- ------ -------
Revenues:
---------
Freight $89,166 64.4% $87,728 62.4%
Non-freight 49,292 35.6% 52,953 37.6%
------ ---- ------ ----
Total revenues $138,458 100.0% $140,681 100.0%
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Operating Expense Comparison:
-----------------------------
Natural Classification
----------------------
Labor and benefits $49,964 36.1% $46,117 32.8%
Equipment rents 7,890 5.7% 8,381 6.0%
Purchased services 9,311 6.7% 10,837 7.7%
Depreciation and
amortization 11,506 8.3% 9,199 6.5%
Diesel fuel used in
operations 8,993 6.5% 15,785 11.2%
Diesel fuel sold to third
parties 3,389 2.4% 8,567 6.1%
Casualties and insurance 3,584 2.6% 4,234 3.0%
Materials 5,603 4.1% 6,105 4.4%
Net gain on sale of assets (239) -0.2% (550) -0.4%
Other expenses 12,357 8.9% 10,700 7.6%
------ --- ------ ---
Total operating expenses $112,358 81.1% $119,375 84.9%
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Functional Classification
-------------------------
Transportation $43,129 31.1% $47,856 34.0%
Maintenance of ways and
structures 13,433 9.7% 12,968 9.3%
Maintenance of equipment 17,108 12.4% 17,941 12.8%
Diesel fuel sold to third
parties 3,389 2.4% 8,567 6.1%
General and administrative 24,032 17.4% 23,394 16.6%
Net gain on sale of assets (239) -0.2% (550) -0.4%
Depreciation and
amortization 11,506 8.3% 9,199 6.5%
------ --- ----- ---
Total operating expenses $112,358 81.1% $119,375 84.9%
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GENESEE & WYOMING INC. AND SUBSIDIARIES
RAILROAD FREIGHT REVENUE, CARLOADS AND AVERAGE REVENUES PER CARLOAD
COMPARISON BY COMMODITY GROUP
(dollars in thousands, except average revenue per carload)
(unaudited)
Three Months Ended Three Months Ended
March 31, 2009 March 31, 2008
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Average Average
Revenues Revenues
Freight Per Freight Per
Commodity Group Revenues Carloads Carload Revenues Carloads Carload
-------- -------- ------- -------- -------- -------
Coal, Coke & Ores $21,117 57,946 $364 $16,746 45,480 $368
Pulp & Paper 13,400 24,086 556 18,013 29,926 602
Farm & Food
Products 10,803 26,392 409 10,887 17,932 607
Metals 9,467 19,338 490 9,519 19,127 498
Minerals & Stone 8,507 31,250 272 9,214 31,653 291
Chemicals-Plastics 8,358 12,808 653 7,423 11,377 652
Lumber & Forest
Products 6,616 14,715 450 7,972 18,137 440
Petroleum Products 5,689 7,887 721 5,007 7,451 672
Autos & Auto Parts 1,104 1,708 646 1,755 3,345 525
Intermodal 52 174 299 124 259 478
Other 4,053 18,135 223 1,068 4,740 225
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Totals $89,166 214,439 416 $87,728 189,427 463
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Reconciliation of non-GAAP Financial Measure
This earnings release contains free cash flow, which is a “non-GAAP financial measure” as this term is defined in Regulation G of the Securities Exchange Act of 1934. In accordance with Regulation G, GWI has reconciled this non-GAAP financial measure to its most directly comparable U.S. GAAP measure.
Free Cash Flow Description and Discussion
Management views Free Cash Flow as an important financial measure of how well GWI is managing its assets. Subject to the limitations discussed below, Free Cash Flow is a useful indicator of cash flow that may be available for discretionary use by GWI. Free Cash Flow is defined as Net Cash Provided by Operating Activities from Continuing Operations less Net Cash Used in Investing Activities from Continuing Operations, excluding the cost of acquisitions. Key limitations of the Free Cash Flow measure include the assumptions that GWI will be able to refinance its existing debt when it matures and meet other cash flow obligations from financing activities, such as principal payments on debt. Free Cash Flow is not intended to represent, and should not be considered more meaningful than, or as an alternative to, measures of cash flow determined in accordance with GAAP.
The following table sets forth a reconciliation of GWI’s Net Cash Provided by Operating Activities from Continuing Operations to GWI’s Free Cash Flow ($ in millions):
Three Months Ended
March 31,
-----------------
2009 2008
-------- --------
Net cash provided by operating activities from
continuing operations $25.5 $8.1
Net cash used in investing activities from
continuing operations (19.1) (7.0)
Cash paid for acquisitions, net of cash acquired 5.8 3.6
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Free cash flow $12.2 $4.7
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SOURCE Genesee & Wyoming Inc.