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Rail News: Financials

Global Railway's second-quarter revenue, expenses show effects from M&A transactions


During the second quarter, Global Railway Industries Ltd.’s revenue skyrocketed, but so did expenses because of costs associated with consolidating Rafna Industries Ltd.’s rail-gear manufacturing operations with G&B Specialties Inc.

Global Railway’s revenue of $11.3 million rose 30 percent compared with second-quarter 2004, primarily because the figure includes revenue generated by YSD Industries Inc., which Global Railway acquired in April 2004. A one-time cost of $805,164 tied to the consolidation led to a quarterly net loss of $230,240 compared with net income of $960,892 during the same 2004 period.

However, the consolidation will position Rafna to grow its product line, reduce overhead costs, improve quality-control processes and speed rail-gear manufacturing in the long term, Global Railway officials said in a prepared statement.

“Cumulatively, the company has significant confirmed orders to
the end of the year,” said Global Railway President and Chief Executive Officer Mike Kohut in a prepared statement. “Global's current base of operations are now positioned for growth.”

Through subsidiaries Rafna, G&B Specialties, YSD, Bach-Simpson Corp. and Prime Railway Services, Global Railway supplies rail-car doors, event recorder monitoring/control systems, train speedometers, track and signal components, and rail gear.