RailWorks' 4th-quarter loss put at $19.8 million

Company says sale of its subsidiary FMC drove up charges

March 02, 2001|By Meredith Cohn | Meredith Cohn,SUN STAFF

Restructuring and other charges recorded in the fourth quarter left financially troubled RailWorks Corp. with a quarterly loss of $19.8 million, or $1.29 per share, compared with $6.6 million, or 43 cents a share, in the corresponding quarter the year before, the company reported yesterday.

The charges amounted to $15.3 million, or $1 a share, at the Baltimore County company that provides rail industry products and services.

Revenue for the quarter that ended Dec. 31 was $170.1 million, up 19 percent from the corresponding quarter in 1999, when revenue was $142.2 million.

For the year, RailWorks reported a net loss of $60 million, or $4.04 per share, compared with $20.1 million, or $1.31 per share, in 1999. The restructuring and other charges of $63.3 million amounted to $4.25 a share.

Revenue for 2000 was $614 million, a 32 percent increase from the year before, when revenue was $468.1 million.

The charges were partly the result of the sale of FCM Rail Ltd. for an undisclosed sum, the company said in announcing it yesterday. FCM, a Detroit-based subsidiary, leases specialized construction and maintenance equipment to railroads and rail contractors.

"The sale of FCM represents the next step in the ongoing RailWorks program to refine its strategic focus, concentrate on its core competencies and reduce debt," Chief Executive Officer John G. Larkin said in a statement. "RailWorks intends to continue working closely with FCM as an important source for the financing of its specialty equipment needs."

The company said in December that as part of the company reorganization it would streamline operations, pare corporate staff and seek the sale of non-core businesses.

Larkin said in a conference call to analysts yesterday that the sale was part of that plan. But because the sale price was not disclosed it was unclear if it would generate enough cash for the company to pay interest on its debt due in April. The company did not identify any other subsidiaries that it could sell to raise money.

Larkin said he was optimistic about the coming year because of new contracts, which the company also announced yesterday, that would add $100 million in future revenues to the backlog of $970 million in projects.

Shares of RailWorks closed yesterday at $1.88, up 38 cents.

The company employs about 30 people at its Baltimore headquarters and more than 3,500 nationwide.

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