Monday, May 17, 2010

Global Railway breaks into the black

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Global Railway Industries Ltd. reports that net earnings for this year’s first quarter improved to $89,000 compared to a $1.5 million net loss in the first quarter of 2009. Total revenue increased 27.3% to $18.7 million. Earnings per share improved to $0.01 compared to a loss of $0.10 in the 2009 quarter.

“Management is pleased to report Global's return to profitability during the first quarter of 2010, and the reduction of its bank debt by $1.5 million,” said Terry McManaman, chairman, president, and CEO of Global. “Global's first-quarter earnings were in line with management's expectations and can be attributed to improved profitability of the VIA Rail Canada business, as well as operational efficiencies, cost cutting initiatives, and scale economies.”

Fausto Levy, president of CAD Railway Industries Ltd., commented, “The VIA project learning curve is now essentially behind us and CADRI is showing positive margins on the locomotives currently in production. Another positive signal for CADRI is that the railroad industry may have reached the bottom in the downward cycle of railcar loadings. We believe some railroads will return stored locomotives and railcars back into revenue service by the end of the current year which could further benefit CADRI's locomotive and railcar maintenance business.”

Levy said that as of at March 31, 2010, CADRI had successfully delivered a total of 12 locomotives to VIA in accordance with the agreed delivery schedule, including four delivered during the first quarter of 2010. “Additionally, CADRI continues to bid on contracts forthe overhaul of diesel engines for mid-size to large-size organizations,” said Levy.“Management believes that CADRI is well positioned to win additional contracts during 2010 as well as bolster its locomotive and components businesses.”

“Bach-Simpson Corporation (“Bach”) increased first-quarter 2010 sales by over 15% compared to the same prior year period, although gross margin was softened by the impact of a strengthening Canadian dollar, which approached parity with the U.S. dollar, and by the temporary delay of new, higher margin development projects,” said McManaman. “Bach's backlog as at March 31, 2010 was more than $8.5 million, still robust, although down from $9.7 million at December 31, 2009.”