Printer Friendly


 ROSEMONT, Ill., Aug. 2 /PRNewswire/ -- Wisconsin Central Transportation Corp. (WCTC) today reported record second quarter operating revenues, operating income and net income and record year-to- date operating revenues and operating income. WCTC's earnings for the quarter increased by 36.5 percent over 1992 to $3.9 million, while quarterly earnings per common share increased 6.7 percent to 48 cents per share despite a 28.6 percent increase in the average number of common shares outstanding.
 The company's operating revenues increased $3.3 million or 10.7 percent to $34.7 million, and traffic volume increased 11.6 percent to almost 58,000 carloads during the quarter. Edward A. Burkhardt, WCTC president, said, "Our growth reflects the continued strength of our customers and their satisfaction with the quality of our service. During the quarter, we hauled our one millionth carload -- a significant milestone of which we are proud." Burkhardt indicated that the quarterly traffic increase was primarily due to growth in the company's shipments of paper, woodpulp, lumber and coal, offset by a decline in intermodal revenues. This revenue growth, coupled with smaller increased in operating expenses, led to record second quarter operating income of $7.8 million for 1993, an 11.3 percent increase over 1992.
 The company's second quarter results also benefitted from a $1.0 million or 38.3 percent decline in interest expense due to the prepayment of debt during the first quarter of 1993 as discussed below.
 Operating revenues for the first six months of 1993 increased by 12.7 percent or $7.6 million to $67.6 million. Operating income increased to $13.2 million as compared to $11.5 million in the year ago period as stronger revenues were offset by smaller volume-related increased in expenses. Income before an extraordinary charge and accounting change increased $1.9 million or 44.2 percent to $6.2 million for the first six months of 1993 as compared to the same period in 1992. An extraordinary charge and an accounting change totalling $3.5 million, net of income taxes, or 42 cents per share recorded in the first quarter of 1993 caused net income for the first six months of 1993 to decline to $2.8 million or 34 cents per share, versus net income of $4.3 million or 67 cents per share for the year ago period.
 The extraordinary charge was associated with the company's prepayment of debt during the first quarter of 1993 in which the company temporarily used cash from its December 1992 public offering to prepay $20.5 million in 13 percent fixed-rate subordinated notes and to retire an additional $1.1 million of other debt. In connection with these prepayments, the company wrote off $1.0 million of non-cash deferred financing costs and incurred a prepayment penalty of $1.3 million. Combined, these factors led to a $1.4 million extraordinary charge, net of income taxes, or $0.17 per common share. The prepayments temporarily reduce WCTC's overall debt until the consummation of the company's pending acquisitions of the rail operating assets of the Fox River Valley Railroad Corp. and the Green Bay and Western Railroad Co. expected to close before the end of the third quarter of 1993. These acquisitions will be financed with a combination of cash on hand and new debt. At current annual interest rates, the company anticipates that the new debt will bear a floating rate of approximately 4.5 percent, which is lower than the debt that was repaid.
 Results for the first six months of 1993 were also impacted by the company's required Jan. 1, 1993, adoption of the Financial Accounting Standards Board's Statement No. 109, "Accounting for Income Taxes." This adoption, combined with legislation effective Jan. 1, 1991, which retroactively eliminated the exemption for railroads from income taxes in the state of Wisconsin, resulted in the establishment of a deferred state tax liability with a cumulative effect of $2.1 million or $0.25 per common share for this required change in method of accounting for income taxes.
 The company also indicated that it plans to close on its recently announced investment in New Zealand Rail Limited ("NZ Rail") early in the fourth quarter of 1993. The company is part of a consortium of investors who submitted the bid that was accepted by the New Zealand government which is privatizing the country's only railroad, NZ Rail. For its $16.5 million equity investment, the company will receive approximately a 27 percent share ownership of NZ Rail, a 2,500-mile railroad which has 5,300 employees, 269 locomotives and about 6,000 freight cars and had earnings of $19.9 million in the year ended June 30, 1992, on revenue of $272 million.
 Shares of Wisconsin Central Transportation Corp. are publicly traded on the NASDAQ National Market System under the ticker symbol WCLX. The company's principal subsidiary, Wisconsin Central Ltd., operates more than 2,000 miles of railroad serving Wisconsin, Illinois, Minnesota, Michigan's Upper Peninsula and Ontario.
 Quarter ending June 30: 1993 1992
 Operating revenues $34,670,000 $31,332,000
 Net income $ 3,927,000 $ 2,876,000
 Average number of common shares
 outstanding 8,248,000 6,415,000
 Earnings per common share $0.48 $0.45
 Six months ending June 30:
 Operating revenues $67,586,000 $59,950,000
 Income before extraordinary item
 and cumulative effect of
 accounting change $ 6,235,000 $ 4,324,000
 Extraordinary item $(1,398,000)(a) $ ---
 Cumulative effect of accounting
 change $(2,067,000)(b) $ ---
 Net income $ 2,770,000 $ 4,324,000
 Average number of common shares
 outstanding 8,247,000 6,415,000
 Earnings per common share:
 Income before extraordinary item
 and cumulative effect of
 accounting change $0.76 $0.67
 Extraordinary item $(0.17)(a) $ --
 Cumulative effect of accounting
 change $(0.25)(b) $ --
 Net income $ 0.34 $0.67
 (a) Represents an extraordinary charge (net of income taxes) for the write-off of non-cash deferred financing costs and the effects of a prepayment penalty associated with early debt repayment.
 (b) Represents the cumulative effect of a change in the method of accounting for income taxes.
 -0- 8/2/93
 /CONTACT: Tom Power, executive vice president and chief financial officer, 708-318-4602, Wisconsin Central Transportation/

CO: Wisconsin Central Transportation Corp. ST: Illinois IN: TRN SU: ERN

LG -- NY048 -- 8308 08/02/93 11:07 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Aug 2, 1993

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters