EX-99.1
2
form8k_press-030207.txt
PRESS RELEASE

                                                                   Exhibit 99.1


For Immediate Release
---------------------
Thursday, March 1, 2007


For further information contact
Richard J. Jarosinski
President and Chief Executive Officer
Portec Rail Products, Inc.
(412) 782-6000, ext. 4230

Press Release

Portec Rail Products,  Inc.  Reports  2006  Fourth Quarter  and Annual Operating
Results (unaudited)

PITTSBURGH,  PA -- Thursday,  March 1, 2007 - Portec Rail Products, Inc. (NASDAQ
Global Market -"PRPX") today announced unaudited net income of $864,000 or $0.09
per share for the fourth  quarter  ended  December  31, 2006 and  unaudited  net
income of $4,620,000 or $0.48 per share for the year ended  December 31, 2006 on
average  basic and diluted  shares  outstanding  of 9,601,779  for both periods.
Earnings  were  negatively  affected by  non-recurring  charges of $139,000  and
$270,000  or  approximately  $0.02 and $0.03 per share for the three and  twelve
months ended December 31, 2006, respectively. These results compare to unaudited
net income of $1,401,000  or $0.15 per share for the quarter ended  December 31,
2005 and  $5,827,000 or $0.61 per share for the year ended  December 31, 2005 on
average basic and diluted shares outstanding of 9,601,779 for both periods.  Net
sales  during  the fourth  quarter  2006 were $22.9  million  compared  to $21.7
million  during the fourth  quarter 2005.  Net sales for the year ended December
31,  2006 were  $99.2  million  compared  to $90.8  million  for the year  ended
December 31, 2005.

During the  fourth  quarter  2006,  the  Company  had  non-recurring  charges of
$139,000,  net of income taxes, for costs  associated with the  restructuring of
its  United   Kingdom  and  Vancouver,   British   Columbia   operations.   This
non-recurring  charge includes employee  termination  costs, which in the United
Kingdom resulted from closing two of the Company's four operating locations. For
the year ended  December  31,  2006,  the Company had  non-recurring  charges of
$204,000,  net of income taxes,  for costs  associated with the  above-mentioned
restructurings and also recorded an impairment charge of $66,000,  net of income
taxes, for the write-down of non-operating assets at its Troy, New York property
during 2006.

Richard J. Jarosinski, President and Chief Executive Officer, said, "Much of our
attention  during 2006 was devoted to  integrating  our prior  acquisitions  and
making strategic moves to eliminate  identified  inefficiencies  in our business
units.  On a more positive note, our core business  segments  remain strong,  as
evidenced  by a 9% growth in revenues and a $20 million  dollar  backlog at year
end,  nearly double the December 31, 2005 backlog.  We will continue to focus on
better cost  control and  profitability.  The outlook for our  industry  and the
capital  spending plans of our railway  customers  remain very positive.  During
2006, we initiated  actions aimed at improving  profitability  in areas where we
were not meeting our profit objectives. We have met our implementation goals and
the following is a brief summary of key points at our operating locations."

"Our largest division,  Railway Maintenance Products (RMP), had a good year with
both the core Track Components and the innovative  Friction  Management products
by substantially  equaling the record operating profit  performance of 2005. Our
Shipping Systems Division (SSD) had an unexpected decrease in demand for much of
the  securement  products  that had been driven in recent  years by the military
buildup,  forest products,  and other non-container  shipping  requirements.  We
addressed this issue by broadening  SSD's product  offering with the acquisition
of the  railroad  product  line of Vulcan  Chain in  October  2006,  and we have
completed a 20,000  square foot  addition  to RMP's  Huntington,  WV facility to
absorb  this  production.  This move helps two of our  business  units by adding
volume  to the  overall  Huntington,  WV  operation  of the RMP  Division  while
providing SSD with better supply  management.  This product line acquisition has
the potential to double the sales of our Shipping Systems Division."

"We had a disappointing year at Kelsan relative to achieving operating goals. As
a result,  we have  restructured  the Kelsan  business by reducing  the level of
staffing and reducing planned selling,  general and administrative  spending for
2007.  There has been  implementation  in January  2007 of top of rail  friction
management at several United States Class I railroads."

"Salient  Systems  had a record  year from the  revenues  generated  by the core
products such as the Wheel Impact Load Detector systems. We decided to introduce
a fourth  generation  design of the Rail Stress  Monitor  further  delaying  its
commercialization.  We are confident in the current technology and we are in the
process of delivering units to four significant  customers.  We are pleased with
the  profitability  of the core  business and we are working  diligently  on the
commercialization of the Rail Stress Monitor."

Mr.  Jarosinski  continued,  "Our operating unit in Montreal,  Quebec had a good
year but did not reach the record sales and operating  profit levels of 2005 due
primarily to lower sales of rail anchors in 2006.  We are underway with plans to
enhance our  position on this  product  line and improve the  efficiency  of our
forging plant in St. Jean, Quebec,  Canada. The renovated rail anchor production
line has been operating to our satisfaction and we look forward to higher levels
of production and improved efficiency."

"The  acquisition of Coronet Rail, Ltd. in April 2006 gave us the opportunity to
consolidate our rail operations at an expanded site in Sheffield,  England.  All
of our European Friction Management and Track Component operations are now based
in  Sheffield.  This  move  allowed  us to close an  underutilized  facility  in
Wrexham, Wales, and consolidate our CI Logistics material handling operations in
Leicester,  England.  The material handling business had its best year for sales
and operating income in 2006, and we believe that the consolidation will further
improve our business  through better control and lower overall  operating costs.
These moves should  result in operating  improvements  at both of our  operating
locations in the United Kingdom."

"We have reached an  agreement  in  principle on the sale of our Wrexham,  Wales
property  in the  United  Kingdom.  We are  optimistic  that the deal will close
during the first quarter 2007. Also, we are continuing discussions with the City
of Troy, New York as we have also reached an agreement in principle to sell this
property and are  optimistic  that this will be finalized in 2007. We have taken
necessary write downs on the Troy property in 2006 to reflect its current market
value."

Mr. Jarosinski concluded, "In summary, we have taken a number of significant and
positive steps throughout 2006 to position our Company for growth in revenue and
earnings.  The backlog is strong and the outlook for the  industry  remains very
positive."

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,  Pennsylvania.  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 manufactures railway products and material
handling  equipment in the United Kingdom with operations in Leicester,  England
and  Sheffield,  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,  2005 and Form 10-Q for the period  ended
September  30,  2006  under  the  heading  "Cautionary   Statement  Relevant  to
Forward-looking  Statements."  Unaudited  information  at and for the year ended
December 31, 2006 is subject to  adjustment  as a result of the year-end  audit.
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) Three Months Ended Twelve Months Ended December 31, December 31, -------------------------------------------------------------- 2006 2005 2006 2005 -------------------------------------------------------------- (Unaudited) (Unaudited) (Audited) Net sales $ 22,856 $ 21,695 $ 99,225 $ 90,793 Cost of sales 15,445 14,289 68,848 61,235 -------------------------------------------------------------- Gross profit 7,411 7,406 30,377 29,558 Selling, general and administrative 5,891 5,035 22,117 19,641 Amortization expense 290 181 926 698 -------------------------------------------------------------- Operating income 1,230 2,190 7,334 9,219 Interest expense 313 190 1,105 856 Other (income) expense, net (33) 108 140 248 -------------------------------------------------------------- Income before income taxes 950 1,892 6,089 8,115 Provision for income taxes 86 491 1,469 2,288 -------------------------------------------------------------- Net income $ 864 $ 1,401 $ 4,620 $ 5,827 ============================================================== Earnings per share Basic and diluted $ 0.09 $ 0.15 $ 0.48 $ 0.61 Average basic and diluted shares outstanding 9,601,779 9,601,779 9,601,779 9,601,779
Consolidated Condensed Balance Sheets (In thousands)
December 31, December 31, 2006 2005 -------------------- ------------------- (Unaudited) (Audited) Assets Current assets $45,793 $41,358 Property, plant and equipment, net 10,403 12,173 Goodwill and other intangibles, net 44,920 35,020 Other assets 566 318 -------------------- ------------------- Total assets $101,682 $88,869 ==================== =================== Liabilities and Shareholders' Equity Current liabilities $21,022 $15,943 Other liabilities and long-term debt obligations 27,564 22,478 Shareholders' equity 53,096 50,448 -------------------- ------------------- Total liabilities and shareholders' equity $101,682 $88,869 ==================== ===================

The following information was filed by Portec Rail Products Inc on Friday, March 2, 2007 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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