Pittsburgh-based Portec Rail Products, Inc. Thursday reported unaudited net income of $2.02 million, or 21 cents per share, for its third quarter, down 19.5% from $2.52 million, or 26 cents per share, in the comparable period in 2008. Sales of $24.3 million for the quarter were down a similar 18% from $29.6 million in the year-ago quarter.
For the 2009’s first nine months, unaudited net income of $5.36 million, or 56 cents per share, was down 14.4% from $6.26 million, or 65 cents per share, in the comparable period in 2008. Sales of $73.0 million for the period were down a similar 14% from $84.7 million in the year-ago period.
Portec President and Chief Executive Officer Richard J. Jarosinski remains upbeat, saying, “We are pleased with our financial performance in what continues to be a very challenging economic climate for our industry. We believe that the overall diversification in our markets and product groups continue to help soften the impact on our business from the global economic downturn. Lower traffic volumes continue to be reported by the North American Class I heavy-haul railroads. These customers continue to represent a large portion of our sales, and they continue to invest in our products and services. We have also achieved sales levels from new markets for some of our products due to our efforts to continue global expansion of our products and services.”
“Our friction management product group, which has the most significant worldwide product exposure and offers multiple operational savings for both heavy-haul freight and passenger service, continues to grow despite the economic downturn,” said Jarosinski. “Sales of North American Class I gage face and top-of-rail friction control solutions were the catalyst for this growth while the remainder of our diversified friction management markets and solutions continue to expand into new markets. . . . Our wayside data management systems, provided by Salient Systems, have also had growth for the quarter and year-to-date periods. We began the year with a healthy backlog for our wayside data management systems and received a substantial number of new orders early this year, which helped to pave the way for the financial results posted thus far for Salient Systems.
“Our track component product group continues to be challenged by lower traffic volume and fewer railcar loadings in North America. We are pleased that some of our past efforts within this product group have positioned us for better financial performance, which has yielded a lower cost structure on some products. Our load securement product group has had a challenging year, as the market for new railcars being built has declined considerably in 2009. . . . Our non-core material handling business in the United Kingdom has had a difficult year with very challenging economic conditions. We are optimistic, however, that our product line and engineering talent in this product group will allow us to capitalize on new order opportunities.
“Despite the economic challenges we continue to face, we still believe that there are opportunities for our products and services in our established markets and in new markets. We have some product groups such as friction management and wayside data management systems that have demonstrated their ability to assist our customers in reducing operating expenses by extending asset life and reducing fuel costs. Our global customer base recognizes this and we believe that they will continue to invest in this technology. We will continue to focus on global expansion of our products and services by organic growth and strategic and accretive acquisitions. We are pleased with our balance sheet, favorable debt to equity ratio and operating cash flow. We believe that we are well-positioned to achieve higher levels of operating performance when favorable economic conditions return to our industry.”