Global Railway Reports Q2 Results for 2009



    
    Investor Conference Call on Thursday August 13, 2009 @ 11am ET

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

    LONDON, ON, Aug. 12 /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 second quarter financial results
for the three-month and six-month periods ended June 30, 2009. All dollar
figures are reported in Canadian currency unless otherwise noted.

    
    2009 Q2 Financial Highlights: 3-months ended June 30, 2009

    -   Total revenue of $17.4 million compared to $14.6 million in the
        second quarter of 2008
    -   Net loss of $875 thousand compared to $100 thousand of net income in
        the second quarter of 2008
    -   Loss per share of $0.06 compared to earnings per share of $0.01 in
        the second quarter of 2008

    2009 Financial Highlights: 6-months ended June 30, 2009

    -   Total revenue of $32.1 million compared to $30.1 million for the same
        6-month period in 2008
    -   Net loss of $2.4 million compared to $741 thousand of net income for
        the same 6-month period in 2008
    -   Loss per share of $0.16 compared to earnings per share of $0.05 for
        the same 6-month period in 2008
    

    Terry McManaman, Chairman, President and CEO of Global commented,
"Similar to the first quarter of 2009, the economic recession continues to
have a significant negative impact on our freight railway related businesses
as North American Class 1 Railroads experienced about a 20 percent decline in
carload traffic year over year. Global's business is directly impacted as
these railroads continue to store a significant number of their locomotives
and railcars. On the other hand, our passenger railroad and commuter systems
related businesses have been favourably impacted by the current market
conditions because of increased government investment in rail passenger
transit. Additionally, the recently announced stimulus spending in Canada and
the United States allocates significant monies for continued infrastructure
spending on rail passenger transit. Approximately 40 percent of the Company's
revenues are generated from transit customers, compared to 60 percent from
freight carriers."
    "As expected, diminishing sales volumes in the locomotive and component
markets, combined with a continued learning curve impact on the VIA Rail
project's margins, have negatively impacted Global's largest subsidiary's, CAD
Railway Industries ("CADRI"), operating results during the second quarter of
2009," said McManaman.
    Fausto Levy, President - CADRI commented, "Although it is too early to
arrive at final conclusions, initial trends on the VIA Rail project's learning
curve are starting to show positive trends for this $101.5 million contract.
Another positive signal for CADRI is that the railroad industry may have
reached the bottom in the downward spiral of railcar loadings. We could see
railroads commence returning stored locomotives and railcars back into revenue
service by the end of the year. In Q3, CADRI has seen a very recent increase
in its locomotive maintenance business which had materially dropped over the
past few quarters. CADRI has successfully bid on over $4 million of new
contracts in component sales, locomotive testing, passenger car overhauls and
locomotive repairs. A portion of these sales will occur during 2009, reducing
the overall impact of the economic downturn on CADRI's second half 2009
results."
    "Despite lower demand for track & signal and rail gear products, G&B
Specialties' (G&B) sales and gross margins met Management's expectations in
the second quarter of 2009," said McManaman. "During the quarter, G&B
management continued to focus on international markets with visits to
Argentina and Mexico. Latin America continues to be a growth market for G&B
and new orders were generated from Mexico and Argentina. Management will
continue to press the international markets to generate growth."
    "Bach-Simpson's ("Bach") 2009 second quarter sales continue to show
strong growth, increasing approximately 54% as compared to the second quarter
of 2008. Bach's customers, most of which are commuter and passenger rail
related, are markets that are mostly Government funded and therefore continue
to grow in spite of the recession," said McManaman.
    McManaman continued, "A major development for Bach in Q2 was the award of
an $800,000 contract for an integrated video and recorder safety/security
system to a major transit authority for installation in their next delivery of
new locomotives. Deliveries are expected to start late this year with the
majority of the new systems being delivered in 2010."

    VIA Rail Contract

    During the second quarter of 2009, CADRI delivered the second locomotive
for the VIA Rail contract and will be delivering the third locomotive during
the month of August 2009. Although CADRI has recovered some of the time lost
due to previous delays, the project delivery schedule is still behind the
original contract schedule. CADRI has implemented catch-up measures to avoid
future delays. The first locomotive delivered to VIA Rail under this contract
has been in revenue service for about two months. VIA Executives and crews are
pleased by the performance and reliability of this initial "one of a kind"
passenger locomotive.

    Bank Covenants and Liquidity

    Management has determined that the credit facilities currently in place
with its Lenders may no longer be sufficient to support the Company's fourth
quarter business requirements, due to the increased utilization of working
capital in connection with the VIA contract and the impact of the economic
downturn. Furthermore, as at June 30, 2009, the Company was not in compliance
with two of its banking covenants. As a result of the foregoing, the Company
has undertaken discussions with its Lenders to expand the credit facilities
and amend the covenant requirements. The Lenders are engaged in discussions
with the Company to seek a workable solution. If successful, the results of
these discussions are expected to be in place in the third quarter of 2009.
While the Company has undertaken these initiatives, the possibility remains
that the requested changes will not be forthcoming. Accordingly, Management
has commenced discussions with other parties as alternative sources to support
the Company's financing requirements. In Management's judgment, these efforts
will be successful in addressing the Company's cash resource requirements.

    
    Financial Summary:

    -------------------------------------------------------------------------
                                    Three months  Three months
    Summary                               ending        ending
    Income Statement                     June 30,      June 30,
    (unaudited)                             2009          2008        Change
    -------------------------------------------------------------------------
    Revenues                         $17,386,252   $14,615,870    $2,770,382
    Net earnings (loss)                ($874,554)      $99,788     ($974,342)
    Earnings (loss) per share
     (diluted)                            ($0.06)        $0.01        ($0.07)

    -------------------------------------------------------------------------
                                      Six months    Six months
    Summary                               ending        ending
    Income Statement                     June 30,      June 30,
    (unaudited)                             2009          2008        Change
    -------------------------------------------------------------------------
    Revenues                         $32,063,265   $30,134,977    $1,928,288
    Net earnings (loss)              ($2,423,703)     $741,386   ($3,165,089)
    Earnings (loss) per share
     (diluted)                            ($0.16)        $0.05        ($0.21)
    

    The Company's 2009 Q2 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, Mr. Fausto
Levy, President CADRI, Mr. Bill Sturtz CMO of Global and Mr. Brian McMullan,
CFO of Global, will speak on behalf of the Company. A question-and-answer
forum will follow the review of the 2009 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
1-800-731-5319 (from Toronto: 416-644-3420) approximately 10 minutes prior to
the beginning of the conference call, scheduled for Thursday August 13, 2009
at 11am 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 August, 13,
2009, until 11:59 pm ET, Thursday August 20, 2009. Please dial 1-877-289-8525
(from Toronto use: 416-640-1917) and enter the reservation number 21312802
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.

    %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

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