North Carolina Railroad Company rehabbing three bridges

Construction is wrapping up and kicking off to improve three railroad bridges in eastern North Carolina, all part of ongoing capital investment by the North Carolina Railroad Company. The repairs in New Bern and replacements in Kinston are being undertaken in partnership between NCRR and Norfolk Southern Railway Company.

"Agricultural, chemical, and fuel business continues to grow in the east," said Scott Saylor, NCRR president. "We continue to invest in capital projects that will improve rail service for existing customers, attract new industries to create jobs, enhance the rail infrastructure and continue to serve our military bases. Our joint capital investments with Norfolk Southern foster economic growth along our rail line."

The Kinston-based project, which is nearing completion, will rebuild two wooden trestle bridges over the Neuse River in Lenoir County and is a 50/50 cost share with Norfolk Southern Railway, totaling $8 million. In New Bern, repairs will soon start on the Trent River Bridge to encase steel piles, corroded by saltwater for more than 30 years in concrete. NCRR will invest $1.5 million in the project, also a 50/50 cost share with Norfolk Southern.

"Preserving and improving infrastructure like rail bridges and trestles helps maintain or increase train speed and weight capacities," said Saylor. "Our investment of railroad revenues into capital projects keeps rail service safe, reliable and efficient. That’s good for keeping businesses in our state and attracting new ones, at no cost to taxpayers."

The North Carolina Railroad Company owns and manages the 317-mile rail corridor extending from the Morehead City Port to Charlotte. The railroad carries 50-60 freight trains and ten passenger trains daily. NCRR is the oldest private company in the state and remains at the forefront of rail improvements and partnership development to promote jobs and rail-served industry across the state. It touches nearly a quarter of the state’s economy.

Siemens transports wind turbine nacelles by rail from new U.S. factory

Using a greener, more reliable and cost-effective method of transportation, Siemens transported 22 wind turbine nacelles and hubs by rail from its new wind turbine nacelle assembly facility in Hutchinson, Kan. Shipping the 87-metric-ton nacelles by train has significant efficiency and environmental benefits, including an up to 80 percent carbon footprint reduction compared to truck transportation over long distances.

"I’m very pleased that we mark yet another milestone in our quest to provide leading-edge wind turbine technology in the U.S.," said Jan Kjaersgaard, vice president and general manager of Siemens’ Wind Power business in the Americas. "We are transporting our first nacelles from our newly opened wind turbine nacelle assembly facility and, we are shipping them by rail, which offers the greatest efficiency and environmental benefits. I am very proud to work for a company that not only makes products that are good for the environment, but that also operates in a way that is environmentally responsible."

In addition to the nacelles, Siemens Energy is also transporting towers and blades via rail to various projects throughout the U.S.

The inaugural shipment of 22 wind turbine nacelles and hubs is headed to Puget Sound Energy’s Lower Snake River Wind Project near Pomeroy, Washington, where they will be combined with blades from Siemens’ Fort Madison, Iowa, wind turbine blade manufacturing facility and towers for installation.

"Puget Sound Energy’s wind-power facilities are producing clean, green energy for tens of thousands of homes and businesses, and with our new Siemens turbines, I’m thrilled to say, we’re also helping to generate new green jobs for American workers," said Kimberly Harris, PSE president and CEO.

 

Chicago to St. Louis line receives $186M from Florida’s rejected HSR Funds

The U.S. Department of Transportation awarded $186 million in high-speed rail funding to finance track and other improvements on the Chicago to St. Louis corridor between Dwight and Joliet, Ill. The U.S. Department of Transportation notified Congressional Appropriators that they have reprogrammed $400 million of the $2 billion in funding that was rejected by the governor of Florida.

"Illinois will be able to use this funding to upgrade an important segment of the Chicago to St. Louis corridor," said Senator Dick Durbin (D-IL), a co-chair and founding member of the Bi-Cameral High-Speed & Intercity Passenger Rail Caucus. "Improvements to this route will improve on-time performance, increase travel speeds and create jobs that our state badly needs.

U.S. Senator Mark Kirk (R-IL) said, "High-speed rail projects like this one will ensure that Illinois remains at the center of the nation’s infrastructure network, attracting more jobs and making us more economically competitive."

"Today’s announcement is an important step toward faster trains and even better rail service on the route between Chicago and St. Louis, ultimately making Illinois the Midwest’s hub for high-speed rail," Illinois Governor Pat Quinn said. "We are committed to quickly turning federal investment in rail into jobs and economic development across the state. This latest award is another example of our ongoing efforts to lead the nation in development of high-speed rail."

Last month, Durbin and Kirk led a group of Illinois Congressional Delegation members in expressing support for Illinois’ application for the federal funding for high-speed rail projects that was rejected by the governor of Florida. In their letter to the Secretary of Transportation, Ray LaHood, the members stressed the importance of the Chicago to St. Louis route as the backbone of the Midwest passenger rail system.

 

FTA sends RTD

On May 2, the Federal Transit Administration sent the Regional Transportation District of Denver’s Full Funding Grant Agreement for $1.03 billion to Congress for the required 60-day review period. This is FTA’s notification that it intends to award the FFGA to RTD for its Eagle P3 Project, giving members of Congress and their staff an opportunity to review the FFGA and ask clarifying questions about it. This is the final step before FTA can award the $1.03 billion FFGA to RTD

Following this 60-day period, FTA and RTD will hold a signing ceremony, which is the official execution of the FFGA. The $1.03 billion grant will help fund the East Rail Line to Denver International Airport and the Gold Line to Arvada and Wheat Ridge, which are the core of RTD’s Eagle P3 project.

UTU will represent Georgia & Florida Railway MOW employees

Maintenance-of-way employees on Georgia & Florida Railway, where train and engine workers have been UTU members since 2006, have voted unanimously in favor of UTU representation.

Georgia & Florida Railway, an OmniTrax property, is a 264-mile shortline serving southcentral Georgia. It interchanges with CSX Transportation and Norfolk Southern. Its principal commodities include beer, wood pulp, ethanol and agricultural products.

WMATA gets two new Board members, alternate director appointed

Two new members from Maryland, Michael D. Barnes and Alvin Nichols joined the Washington Metropolitan Area Transit Authority Board of Directors and Board member Anthony Giancola has become an alternate director representing the federal government as of April 28. 



Barnes represents Montgomery County and succeeds Peter Benjamin, as a principal director on the Metro Board.

Nichols succeeds principal director Elizabeth Hewlett and represents Prince George’s County.

Giancola had represented the District of Columbia as an alternate director since February 2007. 



 

CSXT’s Spatafore named rail industry’s top environmentalist

CSX Transportation’s Richard Spatafore, division engineer, Jacksonville, Fla., received the 2010 Association of American Railroads’ John H. Chafee Environmental Excellence Award. CSXT nominated Spatafore for the award, named for the late Rhode Island senator who devoted his long career in public service to protecting the environment and who understood the important environmental advantages of rail.

"Richard Spatafore personifies CSXT’s long-standing commitment to environmental stewardship," said Skip Elliott, vice president public safety and environment for CSXT. "His innovative resource re-use program is a model of how every CSXT employee can make a difference in protecting our environment while enhancing CSX’s efficiency."

Spatafore, a 36-year veteran of CSXT, developed the "No Spike Left Behind" program, a successful, first-of-its-kind environmental business model for CSXT. The program involves evaluating all rail yards and CSXT right-of-way to identify accumulated on-track material, equipment and other railroad-related materials. Materials are then tagged as appropriate for re-use or recycling.

Additionally, Spatafore oversaw the design and construction of new environmentally safe storage centers within designated rail yards to serve as centralized material storage and usage hubs. Under his leadership, Spatafore’s team achieved 100 percent compliance with federal, state and local environmental regulations.

UP wins Texas environmental award

The Texas Commission on Environmental Quality presented Union Pacific Railroad with an Environmental Excellence Award for developing some of the most environmentally friendly locomotives, which are now operating in Texas.

The TCEQ honored the state’s most outstanding pollution prevention projects during a presentation in Austin. Union Pacific’s Genset switcher locomotives were recognized in the technical and technology category. Genset locomotives reduce emissions of particulate matter and oxides of nitrogen by 80 to 90 percent compared to older switching locomotives. In addition, Gensets use 37 percent less fuel and have an equal reduction in carbon dioxide emissions.

Union Pacific operates 98 Gensets in rail yards located in Texas. Instead of operating with one large engine, three 667-horsepower ultra-low emitting engines power the Genset locomotives. Gensets use a single engine for smaller jobs and activate the other two engines only when additional power is needed.

"We are honored to accept the Environmental Excellence Award," said Gregory Workman, Union Pacific vice president Operations for the Southern Region. "The Gensets are just one example of how our employees are using innovative technology to help Union Pacific protect the environment in the communities we serve."

 

Hallcon Corporation acquired by Southfield Capital Advisors

Southfield Capital Advisors, a private investment firm focused on the lower middle-market, has acquired majority ownership of Hallcon Corporation. Hallcon is a leading provider of specialty outsourced services to the railway and transit sectors in North America. Hallcon’s senior management team will continue in their current roles and will maintain a minority ownership position in the company.

Additional terms of the transaction were not released.

Founded in 1954 and headquartered in Toronto, Ontario, Hallcon provides rail operators with a complete outsourced solution for their crew transportation operations. In addition to the actual ground transportation, Hallcon manages its customers’ trip booking, dispatching, billing and reporting through the use of the Company’s proprietary software platform. Hallcon has established a dominant share in the Canadian crew transportation market and was recently awarded its first national contract to provide and administer crew transportation in the United States.

Tony Plut, president and CEO of Hallcon, said, "When selecting a partner, the Hallcon management team was focused on identifying a firm that could provide the operational, strategic and financial support to best position the company for future success. In addition to helping us manage our current growth, we believe Southfield Capital will help us identify and pursue new opportunities and assist us in implementing best practices across the entire platform. In collaboration, we expect to be able to continue on our exciting growth path and to fortify our industry leading position in North America."

Southfield Capital Operating Partner Vince Tyra said, "We are excited to have the opportunity to invest alongside such a talented management team with a proven track record and an unrelenting drive to make Hallcon a best-in-class provider of rail services in North America. Southfield Capital firmly believes that Hallcon is the ideal platform to take advantage of the favorable macroeconomic trends within the North American rail industry, which include considerable private and public investment towards freight and commuter rail."

 

U.S. Mayors want a voice in transportation infrastructure investment

The United States Conference of Mayors released a 176-city survey focusing on local transportation infrastructure investments. Atlanta, Georgia, Mayor Kasim Reed, USCM Transportation Committee chair, delivered the survey findings. Given the economic problems facing the nation, mayors believe it is more important than ever that federal transportation priorities be targeted to metropolitan areas, home to two-thirds of U.S. residents.

"As the federal government sets priorities for long-term spending and deficit reduction, future transportation infrastructure investments should focus spending on pressing metropolitan transportation infrastructure needs as opposed to low-priority highway expansion projects such as the infamous Bridge to Nowhere," said Atlanta Mayor Reed.

"The long-term productivity of transportation infrastructure spending is greater when it is invested where economic growth will occur, which is in the metropolitan areas, " Reed continued.

Findings of the United States Conference of Mayors Metropolitan Transportation Infrastructure survey include:

• Ninety-eight percent of the mayors point to investment in affordable, reliable transportation as an important part of their cities’ economic recovery and growth.

• Ninety-three percent of the mayors urge reforms in federal transportation programs to allow cities and their metropolitan areas to receive a greater share of federal funds directly.

• Absent a greater share of funding directly to cities and metropolitan areas, only seven percent of the mayors indicate support to increase the federal gas tax.

• Ninety-six percent of the mayors believe that the federal government should increase spending on transportation infrastructure to reverse decades of underinvestment in cities, with strong majorities indicating support to increase the federal gas tax to improve transportation infrastructure, if a greater share of the funding were invested in local road and bridge infrastructure (89 percent), and public transit (65 percent).

• Eighty percent of the mayors indicate that highway expansion should be a low priority.

• Seventy-five percent of the mayors say a national infrastructure bank or expanded availability of federal financing tools such as Transportation Infrastructure Finance and Innovation Act or Build America Bonds would accelerate or increase the number of transportation projects that could be implemented.

In the United States, metropolitan areas account for 86 percent of employment, 90 percent of wage income and over the next 20 years, 94 percent of the nation’s economic growth, but they are burdened with the nation’s worst traffic jams, its oldest roads and bridges and transit systems at capacity. These areas are receiving significantly less in federal transportation investments than would reflect their role and importance to the nation’s economy.

Tom Corchran, USCM CEO stated, "The largest metropolitan areas account for 87 percent of the nation’s traffic. The three most congested areas, Los Angeles, New York and Chicago, account for 27 percent of that traffic. Our metropolitan areas rank high among world economies, but they are saddled with bus and rail systems at capacity. Given these factors, metropolitan areas should be at the center of federal transportation infrastructure investment. They are the drivers of the 21st century United States economy."

The President and CEO of Parsons Brinkerhoff, which sponsored the survey, spoke to the global benefit of increased infrastructure investments in this country.

"While the United States has been disinvesting in transportation infrastructure, we see other countries taking a cue from our history by making significant investments in transportation," said Parsons Brinckerhoff President and CEO George J. Pierson.

"Today, we are investing approximately two percent of our GDP on infrastructure; Europe and China are investing approximately five percent and nine percent, respectively. Growth in India, China, Brazil and other surging economies is being fueled in part by investment in transit systems, roads, airports and other infrastructure. Thousands of miles of high-speed rail systems are being built in Europe and Asia, connecting population and economic centers.

"When mayors in the United States speak to their need to improve the quality of roads and transit systems in their cities, they are responding to a public need in a way that will arm their cities for success in global competition."

 

MBTA goes to bid on Assembly Row Orange Line station

The Massachusetts Bay Transportation Authority has submitted a notice to bidders for the construction of a new Orange Line T station for Assembly Row at Assembly Square. The new station at Assembly Row will be the first to be built on the Orange line since the Southwest Corridor Stations in 1987 and will be located between Sullivan Square and Wellington Station.

"We are pleased that the MBTA went to bid on construction for the new Orange Line T station in Somerville. This is the latest great step forward in the progress of this project and we look forward to seeing the bids that come back," said Don Briggs, president Federal Realty Investment Trust in Boston. "The vision of Assembly Row at Assembly Square cannot be realized without the Orange Line T station. People from all over the Commonwealth are going to come to Assembly Row to work, shop, live and enjoy the parks and open space. A large number of them will rely on public transportation to get there."

Construction of the new T Station could begin as soon as fall of 2011, with the potential to be online in 2014. Undoubtedly Massachusetts’ largest development project, Assembly Row at Assembly Square will create more than 19,000 permanent jobs, more than 21,000 construction jobs and significant new revenue for the City of Somerville and the Commonwealth of Massachusetts.

 

Delaware seeks public comment on State Rail Plan

The Delaware Department of Transportation and DART First State prepared a new State Rail Plan, which is currently available for public review and comment. The SRP is a project of Delaware Transit Corporation and the DelDOT Division of Planning, with consultant services from Parsons Brinckerhoff and S.L. Bassford and Associates. The Plan was prepared specifically in response to the Passenger Rail Investment and Improvement Act of 2008, which requires states to maintain current rail plans as a condition for federal funding.

The SRP identifies the Delaware goals for freight and passenger rail as elements of the overall transportation system. Much of the SRP text comprises an inventory of railroads operating in the state, their tracks and facilities, commodities and customers and passenger services and stations.

The SRP identifies opportunities for expanded service as well as potential chokepoints and other obstacles. The Plan summarizes projects currently underway and those recently completed, some of which may serve as models for future public-private partnerships. The state plan discusses DelDOT’s organization for managing rail-related activities and cooperation with private rail companies, neighboring states and regional partnerships. The SRP concludes with a listing of all identified potential rail improvements and areas for further study.

Public comment can be made via the DART website (www.DartFirstState.com), by mail or by telephone by calling 800-652-DART. After the public comment period concludes on May 16th, and approved by the Acting Secretary of DelDOT, the final plan will be filed with the Federal Railroad Administration and placed on the DART website.

 

LACMTA to hold public meeting on FY12 budget

The Los Angeles County Metropolitan Transit Authority will hold a public hearing on a draft $4.145 billion budget for Fiscal Year 2011-12 on Wednesday, May 18, at Metro Headquarters.

The public can view copies of the balanced budget proposal at Metro.net (type in keyword budget in Search). LACMTA directors could consider adopting the budget for the fiscal year beginning July 1, 2011, following the public hearing or at their Thursday, May 26, meeting.

LACMTA CEO Art Leahy’s budget proposal calls for keeping fares at current levels, however, the CEO is proposing to lower the cost of the Metro day pass from $6 down to $5 for a six month test to help attract commuters and others squeezed by rising gas prices.

In FY 12, LACMTA may expand the Metro Rail system. Trains are being tested for the first phase of the Expo light rail line that will run from downtown Los Angeles to Culver City past USC.

Leahy stressed that LACMTA is not skimping on maintenance or on street supervision and is focused on improving on-time performance, equipment reliability and cleanliness. He also said he is positioning the agency to strategically add service where it’s needed and to give commuters and others more incentives to beat the high price of gas. Service is being added to the Silver Line express bus service from the South Bay into downtown Los Angeles, the Metro Gold Line and the Metro Red Line subway.

For the third year in a row, the budget assumes no wage increase for employees. However, LACMTA is negotiating new contracts with its major labor unions representing operators, maintenance employees and clerks.

The FY 12 draft budget is $247 million or 6.3 percent more than the current $3.898 billion budget. This reflects a significant expansion of the Measure R program in the next fiscal year. In 2008 more than 2 million Los Angeles County voters approved the Measure R half cent sales tax to advance a dozen major transit projects and 15 highway projects. In the new fiscal year LACMTA will be spending $1.164 billion on Measure R projects and programs compared to $889 million this fiscal year.

And the remaining five percent of the budget will be for developing real time customer information such as Nextrip that uses GPS technology to track when buses will arrive, preparing the LACMTA workforce for the next generation, ensuring financial sustainability and advancing Metro’s environmental efforts.

Beware that there are risk factors for the draft budget. LACMTA is not immune to the state and federal budget woes that could cut transportation funding.

 

AAR lauds bill to limit truck size, weight

The Association of American Railroads has lauded the introduction of both House and Senate versions of the Safe Highways and Infrastructure Preservation Act, which propose to freeze national truck size and weight limits on the U.S. interstate highway system. The bills, introduced by Sen. Frank Lautenberg (D-N.J.) and Rep. Jim McGovern (D-Mass.), would keep the nation’s highways safe and stop bigger trucks from adding to American taxpayers’ already heavy federal budget burden. Rep. Frank Wolf (R-V.A.) is the lead co-sponsor of H.R. 1574.

"Big, heavy trucks today don’t pay their full share of damage to our nation’s highways, costing American taxpayers billions of dollars each year for pothole and bridge repairs," said AAR vice president of Communications Patricia M. Reilly. "Now isn’t the time to increase the infrastructure subsidy enjoyed by trucks, which in turn increases the cost burden on taxpayers."

"The additional cost of repairing bridge damage alone caused by raising truck size 20 percent could be as much as $65 billion," she said. "That’s not money that will come from the trucking companies. Rather, these costs will be paid by U.S. taxpayers and motorists to repair the damage trucks cause to our highway infrastructure, a cost that will be even higher if we allow heavier and longer trucks."

Florida’s SunRail receives final U.S. DOT approval

The SunRail commuter rail project moved from the U.S. Department of Transportation to the U.S. Congress. The DOT concluded its review of the project and has sent Congress a Full Funding Grant Agreement. Under law, Congress now has a 60-day review period of the SunRail FFGA.

This action signifies that the DOT is ready to enter into a multi-year funding agreement with the State of Florida and provide federal funding to assist in constructing the SunRail project. The FFGA is the final step in securing the federal funding commitment for the project.

The Federal Transit Administration’s analysis of the project identified 10,800 jobs that will be generated directly by the construction and an estimated 150,000 future jobs resulting from transit-related corridor development.

After the 60-day Congressional review period, the State of Florida and the FTA must then sign the multi-year funding agreement, which will assure the grantee predictable federal financial support for the project. SunRail is scheduled to be operational in 2014.

After Congressional approval of the FFGA, Florida’s Governor Rick Scott will make the final decision to move forward with SunRail. 



Rep. John Mica (R-FL), the Chairman of the House Transportation and Infrastructure Committee, said, "I have consulted with Governor Scott and will work to ensure that approval of the Full Funding Grant Agreement by Congress coincides with his final review of the State’s participation in the project. The FTA has confirmed that this project will have a positive impact on improving Central Florida transportation, employment and future development in our region."

T&E employment up 7.47 percent in March

Train and engine employment on major U.S. railroads climbed by almost 7.5 percent in March 2011 to 62,627, versus March 2010, according to U.S. Surface Transportation Board data.

The 7.47 percent increase in train and engine employment is more than double the increase in any other craft.

The total Class 1 workforce totaled almost 156,000 in mid-March 2011, up almost 4.5 percent from March 2010.

The increased headcount reflects the rise in carloadings, especially intermodal, and an economy climbing out of recession.

Begeman sworn in as STB vice chairman

Ann D. Begeman was sworn in May 2, as a member of the U.S. Surface Transportation Board, bringing two decades of experience in transportation policy to the Board.

Begeman has served as a senior aide on Capitol Hill for 21 years, playing a key role in the crafting of major transportation legislation, including the ICC Termination Act, which created the STB.

Begeman was first nominated by President Obama on December 20, 2010. She was also nominated on January 5, 2011, and confirmed by the U.S. Senate on April 14, 2011, for a term that expires December 31, 2015. Begeman was then named vice chairman by the Board, a role that rotates between members each year. She was sworn in by STB Commissioner Francis P. Mulvey.

"I am honored to have been nominated and confirmed for this important post," Begeman said. "I look forward to working with all stakeholders, my new colleagues and Board staff."

CN’s Potash Service drives new supply chain efficiencies for key customers

Canadian National’s Scheduled Potash Service is focused on an end-to-end management of the supply chain in collaboration with customers. To drive new efficiencies, CN innovated with a tool giving sales and operations personnel clear visibility to customer orders for planning rail assets and scheduling shipments. With this approach, CN is working closely with its customers to minimize delays, expedite shipments and provide supply chain balance between placing empties and picking up loads.

CN also instituted a new potash fleet management team to work with customers to improve distribution of empty private hopper cars to mines for reloading. This initiative, with locomotives cycling between CN’s potash hub in Winnipeg and mines in Saskatchewan, has reduced switching requirements and car dwell times at terminals. As a result, CN has significantly reduced car cycles from mine to destination and return.

Jean-Jacques Ruest, executive vice-president and chief marketing officer of CN, said: "CN’s Scheduled Potash Service is the next chapter in our supply chain collaboration agenda, mirroring our Scheduled Grain Service and our comprehensive management of coal movements from Western Canadian mines to export terminals.

"By scheduling potash service, we have reduced car cycle times for privately owned hoppers from mine to destination and return to mine for loading by approximately 25 percent. This improvement helps our potash customers get to market faster and move more bulk product. CN has also benefited from the additional capacity provided by these efficiency gains."

Bob Felgenhauer, vice-president, transportation and distribution, of PotashCorp, said: "CN’s Scheduled Potash Service has brought a new level of supply chain efficiency to our operations, allowing us to more reliably serve our customers. This is very important to us. Looking ahead, CN will play a vital role in our logistics as we continue to grow our business."

 

L.B. Foster Q1 earnings report: Net income down, sales up

L.B. Foster reported its 2011 first quarter operating results and although net income took a negative hit due to its acquisition of Portec Rail Products and the closing of its Grand Island, Neb., facility, sales and gross profit margins were up.

Stan L. Hasselbusch, L. B. Foster’s president and chief executive officer, said, "Our performance in the first quarter, which is traditionally our weakest quarter due to seasonality, was negatively impacted by expenses related to the acquisition of Portec Rail Products, Inc., and to our Grand Island facility. The most significant of these costs, a $2.5 million charge to gross profit, is a non-recurring expense that relates to the requirement to write-up inventory purchased in an acquisition to net realizable value, which takes most of the margin away when it is sold. This negative adjustment has been completely flushed through our results in the first quarter and will not impact us the rest of the year."

Hasselbusch went on to say, "Our margins were not where we wanted them as they were negatively impacted by the Grand Island shut down, a weak precast buildings performance and a disadvantageous sales mix as distribution sales increased by 25% while distribution margins declined by 120 basis points. With regard to the Portec acquisition, we have moved past an intense 120-day integration period and are planning to continue these efforts for the remainder of the year. We continue to see many promising opportunities in the friction management and Salient product lines and are excited about the long-term prospects for these businesses. As we move through 2011, we expect to continue to experience a highly competitive market environment and we also anticipate significantly extended delays before a new transportation bill is passed, but we are optimistic that the overall economy is improving. Our bookings and backlog are very strong and we expect this strength to be reflected in our results for the remainder of this year."

L.B. Foster results by the numbers:

• First quarter sales increased by $35.1 million or 42.8 percent due to a strong sales quarter by Portec Rail Products Inc., as well as a 14.4 percent sales increase in the legacy L.B. Foster business.

• Gross Profit margin was 14.9 percent, 20 basis points better than the prior year.
    o The Portec Rail Products business contributed a gross margin of 21.7 percent, which, as expected, included charges from purchase accounting related asset step-ups.
    o The legacy Foster margins were lower than the prior year due to a weak first quarter in our precast buildings division, as well as unabsorbed plant costs at our Grand Island, Neb., concrete tie facility as a limited amount of production was concluded in the first quarter and we began dismantling the equipment.

• Selling and administrative expense increased $6.5 million, principally due to the inclusion of the Portec Rail Products results.

• First quarter net income was $0.7 million or $0.07 per diluted share compared to $1.8 million or $0.17 per diluted share last year. Factors negatively impacting net income for this quarter were:
    o The recognition of expense related to the sale of Portec inventory that was written up to fair market value as of the acquisition date resulting in increased cost of goods sold of $2.5 million ($0.17 per diluted share).
    o Acquisition related amortization and depreciation of definitive-lived intangible and tangible assets stepped up to market value of $0.8 million ($0.06 per diluted share).
   o LIFO adjustments were $0.4 million ($0.03 per diluted share) unfavorable compared to the prior year.

• Adjusted EBITDA was $6.5 million compared to $5.0 million in the prior year quarter.

• First quarter bookings were $163.8 million compared to $106.1 million last year, an increase of 54.4 percent. Excluding Portec, bookings were 27.3 percent higher than last year. At quarter end, our backlog was $237.1 million, 15.8 percent higher than the prior year (4.9 percent without Portec).

UTU, Class 1s reach labor agreement

The nation’s major freight railroads and the United Transportation Union have reached a tentative agreement on a new contract covering wages, benefits and other issues. The agreement with the UTU, covering more than 38,000 employees, is the first in the current round of bargaining.

UTU represents almost a third of the rail employees covered in negotiations that began in January 2010. Details of the agreement reached on April 21 were not released, pending ratification by UTU members.

"Our agreement demonstrates the strength of the collective bargaining process when both sides are acting in good faith and are committed to the hard work that leads to agreement," said A. Kenneth Gradia, chairman of the National Carriers’ Conference Committee, the railroads’ bargaining agent. "We are confident that this first agreement will set the pattern for successful resolution of our national negotiations with the other rail unions."

The NCCC represents more than 30 railroads, including BNSF, CSX Transportation, Kansas City Southern, Norfolk Southern and Union Pacific in national bargaining with the 13 major rail unions.

LOAD MORE