UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 1995
TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-17604
PROVIDENCE AND WORCESTER RAILROAD COMPANY
_________________________________________________________________________
(Exact name of registrant as specified in its charter)
_________________________________________________________________________
Rhode Island 05-0344399
_________________________________ _____________________________
(State or other jurisdiction of I.R.S. Employer Identification No.
incorporation or organization)
75 Hammond Street, Worcester, Massachusetts 01610
_________________________________ _____________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (508) 755-4000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.)
YES [X] NO
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
As of April 28, 1995, the registrant has 2,052,200 shares of common stock,
par value $.50 per share, outstanding.
<PAGE>
<TABLE>
PROVIDENCE AND WORCESTER RAILROAD COMPANY
BALANCE SHEETS
MARCH 31, 1995 AND DECEMBER 31, 1994
<CAPTION>
MARCH 31, DECEMBER 31,
1995 1994
(UNAUDITED)
____________ ____________
<S> <C> <C>
ASSETS
Current assets:
Cash and equivalents................. $ 313,000 $ 595,000
Accounts receivable, net of allowance
for doubtful accounts of $125,000... 2,023,000 1,791,000
Materials and supplies............... 776,000 663,000
Prepaid expenses and other........... 103,000 127,000
Deferred income taxes................ 929,000 893,000
____________ ____________
Total current assets............... 4,144,000 4,069,000
____________ ____________
Properties:
Land and land improvements........... 8,520,000 8,520,000
Deep-water pier project.............. 9,231,000 9,091,000
Track structure...................... 42,826,000 42,550,000
Buildings and other structures....... 5,553,000 5,531,000
Equipment............................ 13,507,000 13,393,000
____________ ____________
79,637,000 79,085,000
Less accumulated depreciation........ 21,984,000 21,658,000
____________ ____________
Total properties, net.............. 57,653,000 57,427,000
____________ ____________
$61,797,000 $61,496,000
____________ ____________
____________ ____________
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Notes payable, bank.................. $ 212,000 $ 120,000
Current portion of long-term debt.... 657,000 638,000
Accounts payable..................... 3,458,000 2,904,000
Accrued expenses..................... 1,446,000 1,774,000
____________ ____________
Total current liabilities.......... 5,773,000 5,436,000
____________ ____________
Long-term debt, less current portion... 10,297,000 10,485,000
____________ ____________
Deferred grant income.................. 4,343,000 4,371,000
____________ ____________
Deferred income taxes.................. 8,363,000 8,290,000
____________ ____________
Contingencies (Note 6).................
Shareholders' equity (Notes 2 and 7):
Preferred stock, 10% noncumulative,
$50 par; authorized, issued and
outstanding 653 shares.............. 33,000 33,000
Common stock, $.50 par; authorized
2,273,436 shares; issued and
outstanding 2,010,896 shares in
1995 and 2,010,061 shares in 1994. 1,005,000 1,005,000
Capital in excess of par............. 5,051,000 5,046,000
Retained earnings.................... 26,932,000 26,830,000
____________ ____________
Total shareholders' equity......... 33,021,000 32,914,000
____________ ____________
$61,797,000 $61,496,000
____________ ____________
____________ ____________
<FN>
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
PROVIDENCE AND WORCESTER RAILROAD COMPANY
STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 1995 AND 1994
(Unaudited)
<CAPTION>
1995 1994
____________ ____________
<S> <C> <C>
Revenues:
Operating revenues, freight and
other.............................. $4,629,000 $4,366,000
Other income (Note 3)............... 176,000 130,000
____________ ____________
Total revenues................... 4,805,000 4,496,000
____________ ____________
Expenses:
Operating:
Maintenance of way and structures.. 1,013,000 976,000
Maintenance of equipment........... 546,000 519,000
Transportation..................... 1,074,000 1,046,000
General............................ 1,002,000 857,000
Taxes, other than income........... 532,000 515,000
Car hire, net...................... 169,000 97,000
____________ ____________
4,336,000 4,010,000
Interest............................ 302,000 331,000
____________ ____________
Total expenses................... 4,638,000 4,341,000
____________ ____________
Income before income taxes........... 167,000 155,000
____________ ____________
Income taxes:
Current............................. 28,000 49,000
Deferred............................ 37,000 10,000
____________ ____________
65,000 59,000
____________ ____________
Net income........................... $102,000 $96,000
____________ ____________
____________ ____________
Earnings per weighted average common
and common equivalent share
outstanding, 2,075,906 shares in
1995 and 2,053,083 shares in 1994
(Note 4)............................ $ .05 $ .05
____________ ____________
____________ ____________
Dividends per share:
Old preferred (Note 4).............. $ -0- $ .05
____________ ____________
____________ ____________
Common.............................. $ -0- $ -0-
____________ ____________
____________ ____________
<FN>
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
PROVIDENCE AND WORCESTER RAILROAD COMPANY
STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1995 and 1994
(Unaudited)
<CAPTION>
INCREASE (DECREASE) IN CASH
1995 1994
____________ ____________
<S> <C> <C>
Cash flows provided by (used in)
operating activities:
Net income........................... $102,000 $ 96,000
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation....................... 429,000 404,000
Amortization of deferred grant
income............................ (28,000) (24,000)
Gain from sales of properties and
easements......................... (33,000) (7,000)
Deferred income taxes.............. 37,000 10,000
Changes in assets and liabilities:
Accounts receivable.............. (232,000) 58,000
Materials and supplies........... (113,000) 26,000
Prepaid expenses and other....... 24,000 119,000
Accounts payable................. 764,000 (497,000)
Accrued expenses................. (328,000) 118,000
____________ ____________
Net cash provided by operations...... 622,000 303,000
____________ ____________
Cash flows provided by (used in)
investing activities:
Purchase of properties and equipment. (865,000) (484,000)
Proceeds from:
Sales of properties and easements... 33,000 48,000
Deferred grant income............... 129,000
____________ ____________
Net cash used in investing activities (832,000) (307,000)
____________ ____________
Cash flows provided by (used in)
financing activities:
Net borrowings (payments) under line
of credit........................... 92,000 (250,000)
Payments of:
Long-term debt...................... (169,000) (157,000)
Dividends........................... (31,000)
Proceeds from issuance of common
shares for stock options exercised. 5,000 1,000
____________ ____________
Net cash used in financing
activities.......................... (72,000) (437,000)
____________ ____________
Decrease in cash and equivalents....... (282,000) (441,000)
Cash and equivalents, beginning of
period................................ 595,000 574,000
____________ ____________
Cash and equivalents, end of period.... $313,000 $133,000
____________ ____________
____________ ____________
Supplemental disclosures:
Cash paid during the period for:
Interest............................. $371,000 $332,000
____________ ____________
____________ ____________
Income taxes......................... $138,000 $ -0-
____________ ____________
____________ ____________
<FN>
See notes to financial statements
</TABLE>
<PAGE>
PROVIDENCE AND WORCESTER RAILROAD COMPANY
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1995 AND 1994
(Unaudited)
1. In the opinion of management, the accompanying interim financial
statements contain all adjustments (consisting solely of normal
recurring adjustments) necessary to present fairly the financial
position as of March 31, 1995 and the results of operations and cash
flows for the three months ended March 31, 1995 and 1994. Results
for interim periods may not be necessarily indicative of the results
to be expected for the year.
2. Changes in shareholders' equity:
<TABLE>
Capital in
Preferred Common excess of Retained
Stock Stock par Earnings
_______ ________ ________ _________
<S> <C> <C> <C> <C>
Balance Dec. 31, 1994..... $33,000 $1,005,000 $5,046,000 $26,830,000
Issuance of 835 common
shares for stock options
exercised................ 5,000
Net income for the period. 102,000
_______ ________ ________ _________
Balance March 31, 1995.... $33,000 $1,005,000 $5,051,000 $26,932,000
_______ ________ ________ _________
_______ ________ ________ _________
</TABLE>
<TABLE>
3. Other income:
1995 1994
_______ _______
<S> <C> <C>
Gain from sales of
properties and easements,
net...................... $ 33,000 $ 7,000
Rentals................... 138,000 122,000
Interest.................. 5,000 1,000
_______ _______
$176,000 $130,000
_______ _______
_______ _______
</TABLE>
4. Earnings per share:
The Company considers its $50 par "New Preferred Stock", each share of
which is convertible into 100 shares of common stock, to be common
equivalent shares for purposes of computing earnings per share. New
Preferred Stock was issued in September 1994 in accordance with the terms
of a plan of recapitalization which called for conversion of the Company's
$.50 par "Old Preferred Stock" into New Preferred in a ratio of one share
of New Preferred Stock for one hundred shares of Old Preferred stock.
The Company has not given effect to the outstanding options to
purchase its common stock in calculating earnings per share since the
effect of such options is not material.
5. Dividends:
On April 26, 1995, the Company declared a dividend of $5.00 per share on
its outstanding New Preferred Stock and a dividend of $.05 per share on
its outstanding Common Stock payable May 25, 1995 to shareholders of
record May 11, 1995.
<PAGE>
PROVIDENCE AND WORCESTER RAILROAD COMPANY
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1995 AND 1994
(Unaudited)
6. Contingencies:
A number of lawsuits relating to casualty losses are pending against
the Company, many of which are covered by insurance subject to a
deductible. The Company has provided for its estimate of exposure to
such claims and in management's opinion additional liability, if any,
will not be material to the operations or financial position of the
Company.
The Company owns a site which is contaminated with petroleum
products. It is currently productive as a part of the Company's
double-stack intermodal yard. The site is not the subject of any
agency proceedings. Environmental specialists have indicated that
natural biodegradation of the contamination is occurring. It is not
anticipated that the costs of remediation would have a materially
adverse effect upon the Company's financial statements.
The Company has been notified by a private party and the United
States Environmental Protection Agency (EPA) that the Company is
alleged to be a potentially responsible party for a portion of the
costs of remediation of a Superfund site, reportedly due to the
impact of a 1974 incident involving a rail car. The EPA's
preliminary estimate of the total cost of the clean-up alternative it
has recommended is approximately $7 million. The Company has no
ownership interest in the site. The Company has denied
responsibility to both parties. No formal claims or proceedings
against the Company have been initiated in this matter. The Company
believes it has strong defenses in the event any such claim or
proceeding is forthcoming. The Company is currently engaged in
discussions with EPA and the private party and expects to reach an
amicable resolution which would not have a materially adverse effect
upon the Company's financial statements.
7. Subsequent event:
In April 1995 the Company issued 40,606 shares of common stock to
fund the 1994 contribution to its profit sharing plan of $335,000,
which amount is included in "accrued expenses" on the accompanying
balance sheets.
<PAGE>
PROVIDENCE AND WORCESTER RAILROAD COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
As detailed in the accompanying statement of cash flows the Company
generated $622,000 of cash from operations during the first quarter of
1995. On an overall basis, however, the Company experienced a decrease
in cash for the quarter of $282,000. The principal uses of cash during
the quarter were expenditures for additions to property and equipment
and principal payments on long term borrowings.
Due to weather conditions etc., the Company's freight traffic volumes
are typically lower during the first quarter than during the remainder
of the year. As a result, management anticipates that cash generated
from operations during the remainder of 1995 will be sufficient to
enable the Company to meet its operating expense, debt service and
capital expenditure requirements.
Results of Operations
Operating revenues for the quarter increased by 6% over the first
quarter of 1994. This increase is the result of a 21% increase in
conventional traffic volume, offset, in part, by a 9% decrease in the
average revenue per conventional carload and a 29% decrease in net
revenue from containers on flatcars from $499,000 in 1994 to $356,000
in 1995. The increase in conventional traffic volume was largely due
to an increase in the carloads of construction aggregates hauled.
Since these are commodities which command lower rates of revenue the
large increase in this traffic also accounts for the reduction in the
average revenue per conventional carload. Container volume decreased
by 11% during the quarter due to the loss of one of the Company's
largest containership line customers in July 1994. The loss in
container traffic attributable to that customer was partially offset by
increased traffic volumes from remaining customers. The net revenue
per container decreased by 20% between quarters as a result of a change
in the mix of containers and rate adjustments necessitated by
competitive factors within the industry.
Operating expenses increased by 8% in 1995 over the first quarter of
1994. While this increase in the cost of operations is slightly
higher, on a percentage basis, than the increase in operating revenue,
it is significantly less than the percentage increase in conventional
traffic volume experienced between periods.
The 9% decrease in interest expense for the quarter, as compared with,
1993, results from lower levels of short and long-term borrowings
partially offset by the effects of increased interest rates on short
term borrowings.
<PAGE>
PART II
Item 6. "Exhibits and Reports on Form 8-K:
(b) No reports on Form 8-K were filed during the quarter ended
March 31, 1995.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
PROVIDENCE AND WORCESTER
RAILROAD COMPANY
Orville R. Harrold
By:______________________________
Orville R. Harrold, President
Robert J. Easton
By:______________________________
Robert J. Easton
Treasurer and Principal
Financial Officer
DATED: May 10, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 313
<SECURITIES> 0
<RECEIVABLES> 2148
<ALLOWANCES> 125
<INVENTORY> 776
<CURRENT-ASSETS> 4144
<PP&E> 79637
<DEPRECIATION> 21984
<TOTAL-ASSETS> 61797
<CURRENT-LIABILITIES> 5773
<BONDS> 10297
<COMMON> 1005
0
33
<OTHER-SE> 31983
<TOTAL-LIABILITY-AND-EQUITY> 61797
<SALES> 0
<TOTAL-REVENUES> 4805
<CGS> 0
<TOTAL-COSTS> 4336
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 302
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<INCOME-TAX> 65
<INCOME-CONTINUING> 102
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 102
<EPS-PRIMARY> 0.05
<EPS-DILUTED> 0.05
</TABLE>
