Portec Rail Products Inc (1263074) SEC Filing 10-K Annual report for the fiscal year ending Friday, December 31, 2004

EX-99.1
2
form8k_022305ex991.txt

For Immediate Release
---------------------
Wednesday, February 23, 2005

For further information contact
John S. Cooper
President and Chief Executive Officer
Portec Rail Products, Inc.
(412) 782-6000, ext. 201

Press Release

Portec  Rail  Products,  Inc.  Reports  Record  2004  Fourth  Quarter and Annual
Operating Results (Unaudited)

PITTSBURGH,  PA,  --(BUSINESS  WIRE)-- February 23, 2005 - Portec Rail Products,
Inc.  (NASDAQ  National Market "PRPX") today  announced  unaudited net income of
$976,000  or $.10 per share  (basic  and  diluted)  for the three  months  ended
December 31, 2004 on 9,584,945 weighted average shares outstanding and unaudited
net income of $4.1  million or $.46 per share  (basic and  diluted) for the year
ended December 31, 2004 on 8,929,599 weighted average shares  outstanding.  This
compares  to  $538,000  or $.08 per share  (basic  and  diluted)  for the fourth
quarter of 2003 and $3.4  million or $.52 per share  (basic and diluted) for the
year ended December 31, 2003, on 6,524,002  (weighted  average shares) that were
outstanding prior to the Company's initial public offering.

Record net sales during the fourth  quarter of 2004 were $18.7 million  compared
to $12.8 million  during the fourth quarter of 2003 and full year 2004 net sales
were also a record reaching,  $69.4 million which eclipses the prior year record
net sales of $57.6 million by $11.8 million or 20.6%.

Total assets  increased by $48.2  million to $88.6  million at December 31, 2004
compared to $40.4  million at December  31,  2003  primarily  as a result of the
acquisitions of Salient Systems,  Inc. and Kelsan  Technologies Corp. during the
last quarter of 2004.

Mr. John Cooper, President and Chief Executive Officer, of Portec Rail Products,
Inc. said: " Our Company reached a number of significant  milestones in 2004. In
January and February  2004, we completed our initial  public  offering,  selling
approximately  2.1 million shares and receiving  approximately  $18.0 million in
net proceeds.  We then set our sights on growing the business through  strategic
acquisitions  and  completed the  acquisitions  of Salient  Systems,  located in
Columbus,  Ohio on  September  30,  2004 and  Kelsan  Technologies,  located  in
Vancouver,  British  Columbia  on  November  30,  2004.  Along  with  the  solid
performance  by our core business  units,  our fourth  quarter net sales and net
income were positively  affected by the three-month results from our acquisition
of  Salient  Systems  and one  month of  results  of  Kelsan  Technologies.  Our
consolidated net sales and net income for the full year grew by 20.6% and 19.9%,
respectively. Our



strategy is to continue to grow our friction  management,  wayside detection and
data  management  product lines through both  internal  growth and  acquisitions
while  continuing to manage and strengthen our core track component  products by
developing new products and acquiring  additional product lines as opportunities
arise."

Portec  Rail  Products,   Inc.,   headquartered  in  Pittsburgh,   Pennsylvania,
manufactures,  supplies  and  distributes  a broad range of  railroad  products,
including  rail joints,  rail anchors and spikes,  railway  friction  management
products,  railway wayside data collection and data management  systems and load
securement systems. The Company's largest business unit, the Railway Maintenance
Products  Division,  operates a manufacturing  and assembly plant in Huntington,
West Virginia,  an engineering  and assembly  facility in Dublin,  Ohio (Salient
Systems),  and is also  headquartered  in  Pittsburgh.  The Company also has two
Canadian  subsidiaries,  one of  which is  headquartered  near  Montreal  with a
manufacturing  operation  in St.  Jean,  Quebec and the other  headquartered  in
Vancouver,  British  Columbia that is a technology  and  manufacturing  facility
(Kelsan Technologies). In addition, the Company sells load securement systems to
the railroad  freight car market through its Shipping  Systems  Division located
near  Chicago,  Illinois.  The Company also  manufactures  railway  products and
material handling equipment at its wholly-owned subsidiary in the United Kingdom
with operations in Wrexham, Wales and Leicester,  England. Portec Rail Products,
Inc.'s web site address is www.portecrail.com.

The  foregoing  information  contains  forward-looking  statements.  The Company
cautions  that such  statements  are subject to a number of  uncertainties.  The
Company  identifies  below  important  factors that could  affect the  Company's
financial  performance  and could cause the Company's  actual results for future
periods to differ  materially  from any opinions or  statements  expressed  with
respect  to  future  periods  in any  current  statements.  In  particular,  the
Company's  future  results  could be affected  by a variety of factors,  such as
customer demand for our products; competitive dynamics in the North American and
worldwide  railroad and railway supply industries;  capital  expenditures by the
railway  industry in North America and worldwide;  the development and retention
of  sales  representation  and  distribution   agreements  with  third  parties;
fluctuations  in the  cost  and  availability  of raw  materials  and  supplies;
currency  rate  fluctuations;  and exposure to pension  liabilities.  Additional
cautions regarding forward-looking statements are provided in the Company's Form
10-K for the year ended  December  31,  2003 and Form 10-Q for the period  ended
September  30,  2004  under  the  heading  "Cautionary   Statement  Relevant  to
Forward-looking  Statements."  The Company does not undertake,  and specifically
disclaims,  any  obligation to update or revise any  forward-looking  statement,
whether  written or oral,  that may be made from time to time by or on behalf of
the Company.




         Portec Rail Products, Inc.
         Consolidated Statements of Income
         (In thousands, except share and per share data)



                                                            Quarters Ended                    Years Ended
                                                             December 31                      December 31
                                                   ------------------------------------------------------------------
                                                         2004            2003            2004             2003
                                                   ------------------------------------------------------------------
                                                             (Unaudited)              (Unaudited)

                                                                                          
    Net sales                                        $   18,708      $   12,827      $   69,437       $   57,564
    Cost of sales                                        12,780           9,233          49,720           40,986
                                                   ------------------------------------------------------------------
    Gross profit                                          5,928           3,594          19,717           16,578

    Selling, general and administrative                   4,265           2,815          13,347           10,880
    Amortization expense                                     68              20             116               78
                                                   ------------------------------------------------------------------
    Operating income                                      1,595             759           6,254            5,620

    Interest expense                                        112              75             203              353
    Other expense (income), net                              17              37             (25)              85
                                                   ------------------------------------------------------------------
    Income before income taxes                            1,466             647           6,076            5,182
    Provision for income taxes                              490             109           2,003            1,784
                                                   ------------------------------------------------------------------
    Net income                                       $      976      $      538      $    4,073       $    3,398
                                                   ==================================================================


    Earnings per share
        Basic                                           $ 0.10          $ 0.08          $ 0.46           $ 0.52
        Diluted                                         $ 0.10          $ 0.08          $ 0.46           $ 0.52

    Average basic shares outstanding                 9,584,945(1)    6,524,002       8,929,599(1)     6,524,002
    Average diluted shares outstanding               9,584,945(1)    6,524,002       8,929,599(1)     6,524,002


(1)  The increase in average basic and diluted shares outstanding, when compared
     to the respective prior year periods, is due to the issuance of additional
     shares in conjunction with the Company's initial public offering in January
     2004 and the merger with Salient Systems, Inc. in September 2004.

         Consolidated Condensed Balance Sheets
         (In thousands)



                                                     December 31          December 31
                                                         2004                 2003
                                                   -----------------    -----------------
                                                     (Unaudited)
                                                                    
    Assets
    Current assets                                   $   40,672           $   23,280
    Property, plant and equipment, net                   12,660               11,841
    Other assets                                            151                  170
    Goodwill and other intangibles, net                  35,142                5,096
                                                   -----------------    -----------------
        Total assets                                 $   88,625           $   40,387
                                                   =================    =================

    Liabilities and Shareholders' Equity
    Current liabilities                              $   15,411           $   17,125
    Other liabilities and long-term debt
       obligations                                       26,170                4,129
    Shareholders' equity                                 47,044               19,133
                                                   -----------------    -----------------
        Total liabilities and shareholders'          $   88,625           $   40,387
         equity
                                                   =================    =================