Global Railway Reports Q2 Results for 2008



    
    Second Quarter Investor Conference Call on August 14th, 2008 @ 11am ET

    Stock Symbol: GBI
    Listing: Toronto Stock Exchange
    Outstanding Shares: 15.2 Million
    Web Site: www.globalrailway.com
    

    LONDON, ON, Aug. 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 2008 second quarter financial results
for the 3 month and 6 month periods ended June 30, 2008. All dollar figures
are reported in Canadian currency unless otherwise noted.

    
    2008 Q2 Financial Highlights - Three months ended June 30, 2008:

    -   Total revenue increased to $14.6 million compared with $9.2 million
        in 2007
    -   Net earnings of $99,788 compared with $1,086,628 in 2007
    -   Earnings per share of $0.01 (diluted) compared with $0.07 (diluted)
        in 2007

    2008 Q2 Financial Highlights - Six months ended June 30, 2008:

    -   Total revenue increased to $30.1 million compared with $18.7 million
        in 2007
    -   Net earnings of $741,386 compared with $2,275,073 in 2007
    -   Earnings per share of $0.05 (diluted) compared with $0.15 (diluted)
        in 2007

    2008 Q2 Operational Highlights:

    -   Global's subsidiary G&B Specialties Inc. ("G&B") was awarded multiple
        contract extensions valued at US $10.7 million. The first contract
        designates G&B as the sole supplier, during a 5 year term, of
        track & signal products for a US Class 1 Railroad, valued at
        approximately US $7.5 million. The second contract with another
        US Class 1 Railroad is to supply track & signal products over a
        3 year term and is valued at approximately US $3.2 million.

    -   Global's subsidiary Bach-Simpson Corporation ("Bach-Simpson") signed
        contracts to provide event recorders with a major transit car builder
        and a large transit authority for $2.3 million during the next
        four years. If the options on these contracts are exercised, the
        contracts will be worth over $3.9 million. Revenues from these
        contracts will commence in 2009.

    -   Bach-Simpson signed a contract with a major rail OEM for a standard
        platform event recorder system for use on new passenger cars as well
        as new electric and locomotives built in Germany and supplied to
        North American and European customers. Revenue from this contract
        will commence in 2009.

    -   Global's subsidiary CAD Railway Industries Inc. ("CADRI") start up of
        the 5 year $101.5 million VIA Rail Canada ("VIA") locomotive
        remanufacturing contract is progressing on schedule to release the
        first VIA unit in the first quarter of 2009 as per the contract.

    -   CADRI submitted a contract bid for the refurbishment of 93 VIA Rail
        LRC passenger cars valued at over $100 million.

    -   CADRI completed the first environmentally friendly locomotive
        prototype for Electro Motive Diesel ("EMD"). The EMD 710ECO Repower
        locomotive achieves 25% fuel savings, 50% lube oil reductions and up
        to 70% reduction in green house gas emissions. The first 710ECO
        locomotive unit is in revenue service with a Class 1 Railroad and is
        receiving very positive reports. CADRI expects that this initiative
        with EMD will generate new sales for the Company in 2009 and beyond.

    -   Subsequent to the end of the second quarter, CAD was awarded a 1 year
        US $3.2 million contract from a major OEM of power generation units
        to provide diagnostics services measuring the performance, fuel
        efficiency and emissions for new engine products currently in
        development by the OEM.
    

    "In Q2, Management continued the transformation of Global as we integrate
the acquisition of CADRI (which doubles our size) and start up phase of the
5-year 101.5 million VIA Rail locomotive remanufacturing contract," said Terry
McManaman, CEO of Global. "These initiatives while on track, do have a
negative short term impact on our earnings as we continue to invest management
time and money in improving CADRI's processes, procedures, training, testing
and capital infrastructure to position the Company for future growth and
improved financial results in 2009 and beyond."
    McManaman continues, "During Q2, we also experienced some softening of
track and signal sales ("T&S") at our G&B subsidiary. The reasons for reduced
sales are primarily due to the unprecedented rise in fuel prices resulting in
railroads tightening their belts in all expenditure categories as they deal
with the increasing fuel costs. Although railroads have tightened their T&S
spending in the short term to deal with their increased cost of operations due
to spiraling fuel prices, in the long term, they will be seeking solutions to
offset their increased fuel costs. This bodes extremely well for our
locomotive remanufacturing business at CADRI. Once remanufactured, locomotives
are over 20% more fuel efficient and remanufacturing costs are about 60% of a
new locomotive."
    McManaman continues, "With the inclusion of CADRI, Global's revenues
jumped 58.6% to $14.6 million in the second quarter of 2008. Similarly for the
first six months of 2008, revenues are up 61% to $30.1 million. We continue to
explore opportunities to accelerate our revenue growth by expanding product
lines and services, and seeking accretive acquisitions as we continue to
consolidate the railway supplier base."
    "Reflective of a growth company in a transformation period, net earnings
for the second quarter of 2008 were $99,788 or $0.01 per diluted share
compared with net earnings of $1.1 million or $0.07 per diluted share for the
second quarter in 2007. For the first six months of 2008 net earnings were
$741,386 or $0.05 per diluted share compared with net earnings of $2.3 million
or $0.15 per diluted share for the same period in 2007," said McManaman.

    
    Financial Summary:

    -------------------------------------------------------------------------
                                Three        Three
                               months       months
                               ending       ending
    Summary                   June 30,     June 30,
    Income Statement             2008         2007       Change     % Change
    Unaudited
    -------------------------------------------------------------------------
    Revenues              $14,615,870   $9,215,968   $5,399,902        58.6%
    Net earnings              $99,788   $1,086,628    ($986,840)      -90.8%
    Earnings per share
     (diluted)                  $0.01        $0.07       ($0.06)      -85.7%
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                  Six          Six
                               months       months
                               ending       ending
    Summary                   June 30,     June 30,
    Income Statement             2008         2007       Change     % Change
    Unaudited
    -------------------------------------------------------------------------
    Revenues              $30,134,977  $18,709,013  $11,425,964        61.1%
    Net earnings             $741,386   $2,275,073  ($1,533,687)      -67.4%
    Earnings per share
     (diluted)                  $0.05        $0.15       ($0.10)      -66.7%
    -------------------------------------------------------------------------
    

    Second Half Outlook for 2008:

    "We exited the second quarter of 2008 at the peak level of the up front
costs associated with the first few locomotive units in the remanufacturing
process for the $101.5 million VIA contract," said McManaman. "As up front
costs stabilize, we expect in the second half of 2008 earnings will improve
with a more favorable contribution from CADRI to Global's overall financial
results."
    McManaman concludes, "Looking further ahead, despite a slowing US
economy, the US Department of Transportation (DOT) recently forecasted that US
freight railroad demand will rise 88% by 2035 which undoubtedly will require
significant new investment in rail capacity to meet this demand in years to
come. Future demand for rail will also be driven by rising oil prices and the
substantial fuel savings achieved by moving long haul freight by rail compared
to trucks. Long term the growth prospective of the rail industry remains very
positive for diversified rail product and service suppliers like Global."
    The Company's 2008 second quarter 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.

    Q2 Investor Call:

    A conference call to review the 2008 second quarter financial results
will take place on Thursday August 14th, 2008 at 11AM ET.
    Mr. Terry McManaman, CEO of Global, Bill Sturtz, COO 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 2008 second quarter
financial results and update on the Company's operations and growth
strategies.
    To listen and/or participate in this conference call, please dial
1-800-594-3790 (from Toronto: 416-644-3424) approximately 10 minutes prior to
the beginning of the conference call.
    For those unable to participate in the conference call, a recording of
the conference call will be available from 2:00 PM ET, Thursday August 14,
2008, until 11:59 PM ET, Thursday August 21, 2008. Please dial 1-877-289-8525
(from Toronto use: 416-640-1917) and enter the reservation number 21278959
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". The
Company has a total of 15.2 million shares outstanding. 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,
Web: www.globalrailway.com; Investor Relations: Gerry Wimmer,
INVESTORFILE.com, Tel: (416) 360-8895, Toll Free: 1-888-894-8222, E-mail:
gwimmer@investorfile.com, Web: www.investorfile.com

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