EMON - nice news..
September 09, 1999 09:50
Emons Transportation Group Reports Record Revenues for the Ninth Year in a Row and Record Pretax Income for the Third Consecutive Year
YORK, Pa.--(BUSINESS WIRE)--Sept. 9, 1999--Emons Transportation Group, Inc., (Nasdaq/SmallCap: EMON), a rail freight transportation and distribution services company today announced record operating revenues of $22.7 million for the fiscal year ended June 30, 1999, up 30% from last year's $17.4 million, and record pretax income of $2.7 million, up 81% from $1.5 million in the prior fiscal year. Reflecting results on a comparable basis, diluted earnings per share increased to $0.21 from $0.13, excluding income tax benefits recognized in both fiscal 1999 and 1998 of $0.14 and $0.50 per share, respectively, and excluding a charge of $0.09 per share in fiscal 1999 to income applicable to common stockholders in connection with the exchange of the Company's Convertible Preferred Stock for Common Stock. Including these items, net income decreased to $2.7 million in fiscal 1999 from $4.9 million in fiscal 1998 and diluted earnings per share decreased to $0.26 from $0.63.
For the fourth quarter ended June 30, 1999, operating revenues increased 26% to $6.2 million from $5.0 million for last year's similar quarter, and income before taxes was up 35% to $853,000 from $632,000. Once again reflecting results on a comparable basis, diluted earnings per share increased to $0.07 from $0.03, excluding income tax benefits recognized in both fiscal 1999 and 1998 fourth quarters of $0.14 and $0.50 per share, respectively, and excluding a charge of $0.09 per share to income applicable to common stockholders in the fiscal 1999 fourth quarter in connection with the exchange of the Company's Preferred Stock for Common Stock. Including these items, net income was $1.6 million, or $0.12 diluted earnings per share, for the quarter ended June 30, 1999, compared to net income of $4.1 million, or $0.53 diluted earnings per share, for the prior year's similar quarter.
Results for both fiscal years and fourth quarters include the recognition of tax benefits associated with the Company's net operating loss carryforwards of $1.1 million and $3.9 million for the fiscal 1999 and 1998 periods, respectively. The Company continually reassesses the estimated net operating loss carryforward benefits that it believes it will be able to utilize in the future. Based upon tax planning strategies implemented in connection with the acquisition of a significant rail line in Quebec, Canada this year, the Company recognized additional tax benefits at this time because its reassessment indicates that it is more likely than not that the benefits will be realized. The charge to income applicable to common shareholders of $705,000, or $0.09 diluted earnings per share, in the fiscal 1999 fourth quarter, is in connection with the exchange of the Company's Preferred Stock for Common Stock as a result of a recapitalization approved by shareholders in the fiscal 1999 fourth quarter.
Robert Grossman, Chairman and President commented, "Fiscal 1999 was an outstanding year in terms of results and a pivotal year in positioning the Company for continued growth through internal activities and acquisitions. We grew our base business by expanding our relationship with existing customers and adding new customers through industrial development and transload activities that utilize rail/truck combinations. We completed a significant acquisition of a 94-mile railroad in Quebec, Canada that should lead to improved profitability in the years ahead. We also improved our ability to execute our strategic plan by exchanging our Preferred Stock for Common Stock. The recent consolidations and mergers among Class I railroads have created exciting opportunities for our railroads by providing new and expanded links for our customers to the global marketplace."
Mr. Grossman added, "The results for the year, and fourth quarter, were strong because freight revenues, excluding intermodal, were up 31% for the year and 24% for the fourth quarter. Carloads increased 48% to 62,375 from 42,050 for the year, and increased 54% to 18,500 from 12,000 for the fourth quarter. Average revenues per carload decreased 12% for the year and 20% for the fourth fiscal quarter, primarily because the average revenue per carload on our recently acquired rail line in Quebec is lower than the average revenue per carload on our other railroads. Excluding acquired operations in fiscal 1998 and fiscal 1999, freight revenues increased 11% and carloads increased 7.5% for the year."
Mr. Grossman concluded, "As a result of the recent industry consolidations among the large railroads, both our New England/Quebec operations and Pennsylvania operations are better positioned for long-term growth because new and competitive rail routes are available for our customers to increase their rail shipments on a more cost-competitive basis. However, short-term, the acquisition of Conrail by Norfolk Southern Railroad and CSX Transportation is not without its problems. The implementation of the split-up of Conrail has caused service disruptions by our connecting Class I rail carriers in Pennsylvania and, therefore, carloadings are below plan to date in our first quarter of fiscal 2000. This will impact at least our first quarter results. When the service by CSX and NS improves to acceptable levels, we expect to resume the growth that we experienced from existing operations over the last several years. We remain optimistic about our long-term future and continue to pursue strategic acquisitions."
Emons Transportation Group, Inc., is a rail freight transportation and distribution services company serving the Mid-Atlantic and Northeast regions of the United States and Quebec, Canada, through its Pennsylvania and New England/Quebec operations. Emons currently owns five short line railroads, operates rail/truck transfer facilities and a rail intermodal terminal, and provides its customers with warehousing and logistics services for the movement and storage of their freight.
This press release contains forward-looking statements regarding future events and the future performance of Emons that involve risks and uncertainties that could cause actual results to differ materially. Those risks and uncertainties include, but are not limited to, economic conditions, customer demand, service of connecting rail carriers, increased competition in the relevant market, and others. We refer you to the documents that Emons files from time-to-time with the Securities and Exchange Commission, such as the Company's Form 10-K, Form 10-Q, and Form 8-K reports, which contain additional important factors that could cause its results to differ from its current expectations and the forward-looking statements contained in this press release.
Three Months Ended Year Ended
June 30, June 30,
------------------------------------------------
(Unaudited) (Audited)
1999 1998 1999 1998
Operating Revenues $ 6,249,315 $ 4,978,355 $ 22,663,560 $ 17,445,037
Income Before
Income Taxes 853,100 632,070 2,698,308 1,487,622
Provision (Benefit)
for Income Taxes (761,000) (3,509,000) (9,000) (3,430,000)
Net Income 1,614,100(1) 4,141,070(1) 2,707,308(1) 4,917,622(1)
Preferred Dividend
Requirements --- 53,541 103,949 218,275
Preferred Stock
Conversion Premium 704,898 --- 704,898 ---
Income Applicable
to Common Stock $ 909,202 $ 4,087,529 $ 1,898,461 $ 4,699,347
Earnings Per Common Share:
Basic $ 0.15(1)(2) $ 0.68(1) $ 0.31(1)(2) $ 0.79(1)
Diluted 0.12(1)(2) $ 0.53(1) 0.26(1)(2) $ 0.63(1)
Weighted Average
Number of
Common Shares:
Basic 6,211,871 6,038,442 6,114,126 5,953,586
Diluted 7,823,017 7,875,472 7,836,218 7,829,379
(1) Includes tax benefits of $1.1 million ($0.18 Basic and $0.14 Diluted earnings per share) in fiscal 1999 and $3.9 million ($0.66 Basic and $0.50 Diluted earnings per share) in fiscal 1998, associated with the Company's net operating loss carryforwards.
(2) Includes a charge of $0.12 Basic and $0.09 Diluted earnings per share related to the recapitalization of the Company's Convertible Preferred Stock.
CONTACT: Emons Transportation Group
Robert Grossman
717/771-1701
Tom Ennis
The Equity Group
212/836-9607
EMONS TRANSPORTATION GROUP - EMON
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09/09/99 09:54 AM EDT
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