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RailAmerica, Inc. Reports Second Quarter 2010 Results
JACKSONVILLE, Fla., July 28 -- Second Quarter Highlights
-- Carloads up 11% versus second quarter 2009.
-- Revenue up 18% versus second quarter 2009.
-- Operating income of $22.5 million; depreciation/amortization of $10.7 million.
-- Adjusted income from continuing operations(1) 0.07 per share.
-- Loss from continuing operations of $0.08 per share, including $0.15 per share for debt redemption charges and swap amortization expense.
RailAmerica, Inc. (NYSE:RA) today reported financial results for the quarter ended June 30, 2010. Second quarter 2010 revenue increased 18% to $117.3 million from $99.7 million in the second quarter of 2009. Freight revenue increased 17% to $96.5 million with carloads up 11%. Non-freight revenue increased 22% to $20.8 million.
John Giles, RailAmerica's President and Chief Executive Officer, said, "During the second quarter, we made progress on each of our strategic priorities of organic growth, balance sheet strength and external growth. Our solid operating performance was driven by significantly higher revenue and further improvements in our underlying cost structure. Despite higher fuel prices, operating income was up 20% versus a year ago excluding the impact of 45G tax credit monetization recognized in the second quarter of 2009. Late in the second quarter of 2010 we redeemed an additional $74 million of our senior notes, further strengthening our balance sheet. With the acquisition of Atlas Railroad Construction Company early in the third quarter, we expanded our presence in growing rail-related markets."
Including charges totaling $8.5 million after tax, or $0.15 per share, for the early retirement of debt and interest rate swap termination costs, RailAmerica reported a second quarter 2010 loss from continuing operations of $4.6 million, or $0.08 per diluted share. This compares to income from continuing operations of $5.1 million, or $0.12 per diluted share, for second quarter 2009. Second quarter 2009 included a $0.7 million after tax loss, or $0.02 per diluted share, for the early retirement of debt, interest rate swap termination costs, and foreign exchange gain on debt. Net loss, which includes discontinued operations, was $0.08 per diluted share in the second quarter of 2010 compared to net income of $0.42 per diluted share for the second quarter of 2009. Prior year net income included a $12.8 million after tax benefit primarily resulting from the settlement of an Australian tax matter.
Second quarter 2010 operating income was $22.5 million compared to $22.9 million in the second quarter of 2009. A non-comparable item, $4.1 million of 45G tax credits in 2009, was a significant cause of the decline in operating income as shown in the table below. Labor costs increased $5.6 million primarily due to higher incentive compensation and health insurance costs. Fuel expense was up $3.3 million, with $2.6 million of the increase due to higher prices.
As previously announced, RailAmerica, Inc. will present its second quarter earnings on Thursday, July 29, 2010 at 8:30 a.m. Eastern Time via live teleconference and webcast. Those interested in participating via teleconference may dial (877) 756-2088. Callers outside the U.S. may dial (574) 941-1456. The conference ID number is 82843995. Participants should dial in no later than 10 minutes prior to the call. Presentation materials and access to the live webcast will be available in the Investors section of RailAmerica's website (www.railamerica.com). Following the earnings call, a webcast replay will be archived on the Company's website. A telephone replay will be available through August 12, 2010 beginning approximately two hours after the call. The recording can be accessed by dialing (800) 642-1687 or (706) 645-9291. The conference ID number is 82843995.
RailAmerica, Inc. owns and operates short line and regional freight railroads in North America, operating a portfolio of 40 individual railroads with approximately 7,400 miles of track in 27 U.S. states and three Canadian provinces.