Global Railway Reports Q1 Results for 2009



    
    Investor Conference Call on Thursday May 14, 2009 @ 11AM ET

    Company: Global Railway Industries Ltd.
    Stock Symbol: GBI
    Listing: Toronto Stock Exchange
    Outstanding Shares: 15.2 Million
    Web Site: www.globalrailway.com
    

    LONDON, ON, May 13 /CNW/ - Global Railway Industries Ltd., - (GBI:TSX):
Global Railway Industries Ltd., www.globalrailway.com, ("Global" or the
"Company"), a leading North American provider of railway products and
services, today reports the Company's 2009 first quarter financial result for
the three-month period ended March 31, 2009. All dollar figures are reported
in Canadian currency unless otherwise noted.

    
    2009 Q1 Financial Highlights:

    -   Total revenue of $14.7 million compared to $15.5 million in Q1 2008
    -   Net loss of $1.5 million compared to $642 thousand of net income in
        Q1 2008
    -   Loss per share of $0.10 compared to earnings per share $0.04 in Q1
        2008
    

    Terry McManaman, Chairman, President and CEO of Global commented, "The
economic recession has had a significant negative impact on our freight
railway related businesses in the latter half of 2008 and continuing into
2009. North American Class 1 Railroads continue to report carload decreases
exceeding twenty percent year over year. Global's business is directly
impacted as these railroads continue to increase the number of locomotives and
railcars put in storage. For the first quarter of 2009, Global reports a net
loss of $1.5 million, a loss per share of $0.10 and revenues of $14.7
million."
    McManaman continues, "The first quarter loss can be attributed to
Global's CAD Railway Industries (CADRI) subsidiary whose operating performance
did not meet Management's expectations. As freight railroad companies store
substantial numbers of locomotives and freight cars, there is a reduced demand
for locomotive and railcar maintenance and parts, a significant part of
CADRI's recurring business. In addition to lower locomotive and railcar
maintenance business, CADRI operations in Q1 as expected, were impacted by the
inefficiencies inherit and related to the start up phase of the VIA locomotive
remanufacturing contract."
    "Despite lower demand for track & signal products, G&B Specialties (G&B)
subsidiary sales and gross margins met Management's expectations in the first
quarter of 2009," said McManaman. "As part of Global's strategy to increase
worldwide market penetration, G&B continues to increase its sales volumes to
railroad companies in Mexico. G&B expects to have double digit percentage
sales growth to Mexico in 2009, as compared with 2008."
    "Global's Bach-Simpson ("Bach") subsidiary 2009 first quarter sales
greatly exceeded Management expectations, increasing approximately 47% as
compared to the first quarter of 2008. Bach does not expect its customers,
most of which are commuter and passenger rail related, to have the same slow
down that is currently being experienced by the customers of Global's other
subsidiaries," said McManaman. "In Q1, Bach received a $1.3 million order for
event recorders from a major OEM with first deliveries beginning in 2010.
Bach's backlog has increased to more than $12.0 million at March 31, 2009."
    McManaman continues, "Although the general North American economy
continues to be weak and the freight railroad companies continue to be
hesitant to commit to capital expenditures, opportunities for Global's growth
still exist. CADRI is in process of bidding on a large Canadian passenger
railcar remanufacturing contract. Management believes that CADRI is well
positioned to win this contract prior to the end of 2009. CADRI also has
recently bid on over $5.0 million of components business which, if successful
in winning, Management expects to start shipping this new business during the
second half of 2009."

    VIA Rail Contract

    Early in April 2009, Global delivered the first locomotive of a fleet of
53 F-40 VIA passenger locomotives to be remanufactured by CADRI. Delivery of
the second remanufactured locomotive is expected by the end of May 2009. CADRI
is scheduled to deliver a total of 9 remanufactured locomotive units to VIA in
2009.

    Bank Covenants

    As at March 31, 2009, the Company was not in compliance with two of its
banking covenants. The Lenders have not agreed to waive the covenant defaults
at March 31, 2009; nor have the Lenders altered the terms and conditions of
the credit facility. Company management is in discussions with the Lenders to
amend the credit facility; however these discussions, and any resulting
amendments to the credit facility, will not likely be completed until the end
of the second quarter of 2009.

    
    Financial Summary:

    -------------------------------------------------------------------------
                                    Three months  Three months
    Summary                               ending        ending
    Income Statement                    March 31,     March 31,
    (unaudited)                             2009          2008        Change
    -------------------------------------------------------------------------
    Revenues                         $14,677,013   $15,519,107     ($842,094)
    Net earnings (loss)              ($1,549,149)     $641,598   ($2,190,747)
    Earnings (loss) per share
     (diluted)                            ($0.10)        $0.04        ($0.14)
    

    At the May 12, 2009 Annual General Meeting, Global's Board was reduced
from seven to six members. Two incumbents remain and four Board members were
replaced. The new Board will be exploring all available strategic options to
maximize shareholder value.
    The Company's 2009 Q1 financial statements and Management's discussion
and analysis will be posted later today in the investor information section of
Global's web site at www.globalrailway.com and are also available on SEDAR at
www.sedar.com.

    THIS NEWS RELEASE MAY CONTAIN FORWARD LOOKING INFORMATION. ACTUAL FUTURE
RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTEMPLATED. THE RISKS,
UNCERTAINTIES AND OTHER FACTORS, BOTH KNOWN AND UNKNOWN, THAT COULD INFLUENCE
ACTUAL RESULTS MAY BE SUBSTANTIAL AND INCLUDE THOSE DESCRIBED IN DOCUMENTS
FILED WITH REGULATORY AUTHORITIES, SUCH AS THE COMPANY'S MOST RECENTLY FILED
ANNUAL REPORT AND ANNUAL INFORMATION FORM. ACCORDINGLY, NO ASSURANCES CAN BE
GIVEN THAT ANY OF THE EVENTS ANTICIPATED BY THE FORWARD-LOOKING STATEMENTS
WILL TRANSPIRE OR OCCUR, OR IF ANY OF THEM DO SO, WHAT BENEFITS THE COMPANY
WILL DERIVE THEREFROM.

    Investor Conference Call

    Mr. Terry McManaman, Chairman, President & CEO of Global, Bill Sturtz CMO
of Global and Brian McMullan, CFO of Global will speak on behalf of the
Company. A question-and-answer forum will follow the review of the 2009 first
quarter financial results and update on the Company's operations and growth
strategies.
    To listen and/or participate in this conference call, please dial
1-800-588-4490 (from Toronto: 416-644-3429) approximately 10 minutes prior to
the beginning of the conference call, scheduled for Thursday, May 14, 2009 at
11:00 AM ET.
    For those unable to participate in the conference call, a recording of
the conference call will be available from 1:00 PM ET, Thursday May 14, 2009,
until 11:59 PM ET, Thursday May 21, 2009. Please dial 1-877-289-8525 (from
Toronto use: 416-640-1917) and enter the reservation number 21305163 followed
by the "pound sign" to listen to the rebroadcast.

    About Global Railway Industries: Global Railway Industries Ltd. is a
diversified rail product company serving the railway industry in North
America. Global Railway is a public company whose shares are listed for
trading on the Toronto Stock Exchange (TSX) under the symbol "GBI". For more
information: visit www.globalrailway.com or www.investorfile.com.

    %SEDAR: 00010076E




For further information:

For further information: Company Contact: Terry McManaman, Chairman,
President & CEO, Tel: (585) 419-9720, E-mail: tmcmanaman@globalrailway.com;
Company Contact: Brian McMullan, CFO, Tel: (585) 419-9720, E-mail:
bmcmullan@globalrailway.com; Investor Relations: Gerry Wimmer,
INVESTORFILE.com, Tel: (416) 360-8895, Toll Free: 1-888-894-8222, E-mail:
gwimmer@investorfile.com

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