Global Railway Q3 Revenues Up 12%

Investor Conference Call on Friday November 13, 2009 @ 11am ET

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

LONDON, ON, Nov. 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 third quarter financial results for the three month and nine month periods ended September 30, 2009. All dollar igures are reported in Canadian currency unless otherwise noted.

    
    2009 Q3 Financial Highlights: 3 months ended September 30, 2009

    -   Total revenue of $16.9 million compared to $15.1 million in the third
        quarter of 2008
    -   Net loss of $532 thousand compared to $542 thousand of net income in
        the third quarter of 2008
    -   Loss per share of $0.03 compared to earnings per share of $0.04 in
        the third quarter of 2008

    2009 Financial Highlights: 9 months ended September 30, 2009

    -   Total revenue of $49.0 million compared to $45.2 million for the same
        9 month period in 2008
    -   Net loss of $3 million compared to $1.3 million of net income for the
        same 9 month period in 2008
    -   Loss per share of $0.19 compared to earnings per share of $0.08 for
        the same 9 month period in 2008
    

"Due to the economic recession in 2008 and 2009 year-to-date, Railroads continue to store about 20% of their locomotive and railcar fleets and maintain tight control over operating and capital expenditures to address reduced freight revenues and operating income." said Terry McManaman, Chairman, President and CEO of Global. "The Railroads' reduced spending has materially impacted Global's financial results in 2009 due to reduced locomotive and railcar maintenance and component sales being substantially lower than in prior years."

McManaman continues, "Global's rail product and service offering to passenger rail and transit operators was the catalyst to our overall revenue growth in Q3, rising 12%. Global subsidiary Bach-Simpson, whose customer's are mostly commuter and passenger rail related, has generated a year-to-date sales increase of 59% and continues to forecast strong growth throughout the remainder of the year. Approximately 40% of Global's total revenues are generated from passenger rail and transit operators."

Brian McMullan, Chief Financial Officer of Global said, "During the third quarter, the Company's subsidiary Presidents aggressively managed their respective subsidiary's net working capital which has strengthened the Company's cash flow. Global's quarterly financial performance has steadily improved in 2009 and Management expects the Company will return to profitability in 2010."

"Despite lower demand for track & signal and rail gear products, Global subsidiary G&B Specialties' sales and gross margins met Management's expectations in the third quarter of 2009," said McManaman. "In 2009, G&B has been able to maintain the same level of sales compared to 2008, aided by new international sales, new customer penetration in local markets, and a higher average US dollar."

McManaman continued, "Diminishing sales volumes in the locomotive and component markets combined with the learning curve impact on the VIA Rail Canada ("VIA") project's margins, continue to negatively impact Global's largest subsidiary's, CAD Railway Industries ("CADRI"), operating results and Global's overall financial results during the third quarter of 2009."

Fausto Levy, President of CADRI commented, "To date CADRI has delivered five remanufactured locomotives to VIA. CADRI's gross profit margins for the units in production under the $101.5 million VIA project have improved during Q3 versus Q2 and are expected to continue to improve as production line improvements are implemented. During the third quarter, we successfully negotiated a revised delivery schedule for the VIA locomotives which took into consideration prototyping and learning curve delays. Under the revised delivery schedule CADRI will deliver 8 locomotives to VIA in 2009."

Levy continues, "CADRI continues to experience decreased sales for locomotive maintenance and component parts. Management expects this trend to extend into early 2010 as railroads continue to store substantial numbers of locomotives and railcars."

"On a positive note, some of the freight railroads are starting to see some signs that several market groups are stabilizing, and if that is the case we expect a pent up demand for our products for 2010 as rail work and maintenance programs resume to more normalized levels," concluded McManaman.

Amended Credit Agreement with Lenders

Global has successfully negotiated the terms for an amended credit agreement with its Lenders. The amended credit agreement has proactively dealt with banking covenants and deferred two scheduled long-term-debt repayments until the expiry date of the term credit facility in 2012. These amendments provide the Company with greater utilization of its existing operating facility and to support the immediate working capital and liquidity needs of the Company. The operating facility has been renewed to the next annual review scheduled for March 31, 2010. The amendments to the Company's credit facility require the Company to enter into a binding agreement for the sale of one or more subsidiaries before January 31, 2010, with a transaction close date of no later than February 28, 2010; or alternatively obtain a commitment by January 31, 2010 for a new facility of not less than $5,000,000, for a combination of equity and subordinated debt, which is to include a minimum equity injection of $2,500,000, to be completed by March 31, 2010. Global, through its Special Committee, has been pursuing opportunities in respect of both of the courses of action mandated in the amendment to the credit agreement and anticipates, given the current status of those opportunities, compliance with the lenders' requirements within the specified timelines.

Special Committee

Global announced on May 12, 2009, after the Board was reconstituted at the Annual General Meeting, that the new Board would be exploring all available strategic options to maximize shareholder value. The Board established a Special Committee of the Board to consider and evaluate the Company's strategic options. These options include an en bloc sale of the Company or the sale of one or more of the Company's subsidiaries. The Special Committee engaged a financial advisor and is continuing its review, but has not completed its evaluation of the options available to the Company to maximize shareholder value. The mandate of the Special Committee was expanded in the third quarter to address issues related to the Company's liquidity and possible financing alternatives as they are closely inter-related with the strategic review process underway.

    
    Financial Summary:

    -------------------------------------------------------------------------
    Summary                     Three months    Three months          Change
    Income Statement                  ending          ending
    (unaudited)                 September 30,   September 30,
                                        2009            2008
    -------------------------------------------------------------------------
    Revenues                     $16,945,656     $15,068,561      $1,877,085
    Net earnings (loss)            ($531,528)       $541,869     ($1,073,397)
    Earnings (loss) per share
     (diluted)                        ($0.03)          $0.04          ($0.07)
    -------------------------------------------------------------------------
    Summary                      Nine months     Nine months          Change
    Income Statement                  ending          ending
    (unaudited)                 September 30,   September 30,
                                        2009            2008
    -------------------------------------------------------------------------
    Revenues                     $49,008,921     $45,203,538      $3,805,383
    Net earnings (loss)          ($2,955,231)     $1,283,255     ($4,238,486)
    Earnings (loss) per share
     (diluted)                        ($0.19)          $0.08          ($0.27)
    

The Company's 2009 Q3 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, 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 third quarter financial results and update on the Company's operations.

To listen and/or participate in this conference call, please dial 1-800-814-4861 (from Toronto: 416-644-3414) approximately 10 minutes prior to the beginning of the conference call, scheduled for Friday November 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, Friday November, 13, 2009, until 11:59 pm ET, Friday November 20, 2009. Please dial 1-877-289-8525 (from Toronto use: 416-640-1917) and enter the reservation number 4179723 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

SOURCE Chinook Tyee Industry Limited

For further information: For further information: Company Contact: Terry McManaman, Chairman, President & CEO, Tel: (585) 419-9720, E-mail: tmcmanaman@globalrailway.com; Brian McMullan, CFO, Tel: (585) 419-9720, E-mail: bmcmullan@globalrailway.com

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Chinook Tyee Industry Limited

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