MRO Magazine

Railway maintenance spending deferred but not eliminated

Calgary, AB -- Dec. 6, 2001 -- "Historically the third quarter is the slowest period for our company as the railway...


Calgary, AB — Dec. 6, 2001 — “Historically the third quarter is the slowest period for our company as the railway maintenance season comes to an end,” says Mike Kohut, president of Global Railway Industries Ltd., a provider of railway products and service equipment. “This seasonality which is related to the sale of rail gear products from our Rafna division is reflected in our quarterly financial results and the downturn trend was not unexpected given the weak economic climate in 2001.”

Kohut added: “The positive side to the downturn in 2001 is that the Rafna division has very strong visibility on sales going forward into 2002. From our recent discussions with several of our major railroad customers it appears that they will resume normal spending levels on railway maintenance in 2002. This is not unexpected as maintenance spending can only be deferred and not eliminated.”

“Since our acquisition of Bach-Simpson in May of this year, this subsidiary has been profitable and performing very well,” said Kohut. “The expectation for this company is that the demand for its railroad instrumentation products will continue to grow in the future given the new long-term contracts we recently announced and contracts currently under bid. To date, Bach-Simpson has product backorders that extend out into year 2004 of which $3 million in sales are already booked for delivery in 2002.”

On Nov. 13, 2001, Global announced a letter of intent to acquire G&B Specialties Inc. This company’s main product line includes track switch layouts, which it supplies to most major railroads and transit operations in North America.

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The company’s website is www.globalrailway.com.

By Bill Roebuck, Editor