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UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report: January 28, 1998
WISCONSIN CENTRAL TRANSPORTATION CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 0-19150 36-3541743
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification Number)
6250 North River Road, Suite 9000
Rosemont, Illinois 60018
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code (847) 318-4600
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<PAGE>
5. Other Events
See press release attached as Exibit No. 20.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WISCONSIN CENTRAL TRANSPORTATION
CORPORATION
Date: February 5, 1998 By: /s/ Walter C. Kelly
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Walter C. Kelly
Vice President, Finance
Date: February 5, 1998 By: /s/ Walter C. Kelly
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Walter C. Kelly
Chief Accounting Officer
<PAGE>
INDEX TO EXHIBITS
Sequentially
Numbered
Exhibit No. Description Page
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20 Press Release 4
(January 28, 1998)
Exhibit No. 20
January 28, 1998 Contact: Thomas F. Power, Jr.
Executive VP & CFO (847) 318-4602
WISCONSIN CENTRAL REPORTS RECORD FINANCIAL RESULTS
Annual net income increases nearly 60 percent
ROSEMONT, Ill.--Wisconsin Central Transportation Corporation (WCTC)
[NASDAQ:WCLX] today reported record annual and fourth quarter operating
revenues, operating income, net income and earnings per share. Net income for
the fourth quarter of 1997 increased 12 percent (2 percent before an
extraordinary charge in 1996) to $17.7 million from the year-ago quarter. Fourth
quarter earnings per basic common share rose by 13 percent (3 percent before an
extraordinary charge in 1996) to 35 cents from the fourth quarter of 1996.
WCTC's operating revenues for the fourth quarter of 1997 reached $83.1
million, which was $13.0 million, or 19 percent higher than the year-ago period.
Volume increased 19 percent to a fourth quarter record of nearly 140,000 revenue
units (excluding 4,700 additional revenue units handled under a haulage
arrangement), compared with the year-ago period. The largest volume increases
were in lumber and wood fibers, chemical and petroleum products, food and grain
and metallic ore. The company's Duck Creek North lines, acquired on January 27,
1997, contributed nearly 24,000 additional carloads, primarily metallic ore, for
the fourth quarter of 1997. Edward A. Burkhardt, WCTC chairman, president and
chief executive officer said "The company's increased volume reflects the
continued strength and diversity of our customer base as well as the integration
of the Duck Creek North lines into our North American operations."
Operating expenses for the fourth quarter of 1997 were $65.0 million, an
increase of $8.7 million or 15 percent over 1996. This increase consists
primarily of higher labor and materials expenses related to the increased volume
and higher casualty expenses (including a significant derailment) and
depreciation expense.
The company's operating ratio for the fourth quarter of 1997 was 78.2
percent, an improvement from 80.3 percent for the year-ago period. The company's
fourth quarter 1997 income from North American operations increased 31.2 percent
to $18.1 million from the year-ago quarter. Burkhardt stated, "I am pleased with
the steady improvement we are achieving in our North American operations."
The company's fourth quarter 1997 results include equity in net income of
affiliates of $9.0 million, or 18 cents per basic common share, a decrease of
$1.2 million or 2 cents per basic common share compared with the year-ago
quarter. The fourth quarter 1997 amount includes a contribution from English
Welsh & Scottish Railway Holdings Limited (EWS) of $7.0 million, versus $7.9
million for the year-ago period. EWS's fourth quarter 1997 results were
adversely affected by the inclusion of the initial results of its Rail Freight
Distribution subsidiary which was acquired on November 22, 1997, in addition to
higher depreciation and other expenses compared to the year-ago fourth quarter.
Also included in the company's 1997 fourth quarter equity in net income
of affiliates is a contribution from Tranz Rail Holdings Limited (Tranz Rail) of
$2.0 million, versus $2.3 million for the year-ago period. This decrease is
substantially the result of a decline in the value of the New Zealand dollar
versus the US dollar. This decrease in exchange rate relates to softness in both
the New Zealand and Asian economies.
Annual 1997 Results
For the year ended December 31, 1997, WCTC reported net income of $77.4
million, or $1.52 per basic common share, compared with $48.4 million, or 96
cents per basic common share for the year-ago period. Contributing to the 1997
results were record North American operating revenues, volume and operating
income, the Duck Creek North acquisition and the investment in EWS. EWS's 1996
contribution included less than a full year of results for the trainload freight
companies which were acquired from British Rail on February 24, 1996.
Net income for 1996 was reduced by $9.8 million due to an adverse
arbitration ruling for disputed switching charges and related interest and by an
extraordinary charge of $1.6 million (net of income taxes) resulting from the
early retirement of debt.
Shares of Wisconsin Central Transportation Corporation are publicly
traded on the NASDAQ National Market System under the symbol WCLX. The company's
principal subsidiaries, Wisconsin Central Ltd., Fox Valley & Western Ltd.,
Algoma Central Railway Inc. and Sault Ste. Marie Bridge Company operate
approximately 3,000 route miles of railway serving Wisconsin, Illinois,
Minnesota, Michigan's Upper Peninsula, and Ontario, Canada. WCTC holds a 23
percent equity interest in Tranz Rail Holdings Limited, which operates 2,400
route miles of railway nationwide in New Zealand. WCTC also holds a 34 percent
equity interest in English Welsh & Scottish Railway Holdings Limited which
operates most of the freight railroad services in Great Britain. WCTC also holds
a 33 percent equity interest in Tasrail Services Pty. Limited (Tasrail) which
operates 300 route miles of railway statewide in Tasmania, Australia.
<PAGE>
<TABLE>
<CAPTION>
WISCONSIN CENTRAL TRANSPORTATION CORPORATION (NASDAQ)
1997 1996
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(unaudited)
<S> <C> <C>
Quarter ended December 31:
Operating revenues <F1> $ 83,088,000 $ 70,063,000
Operating expenses $ 64,953,000 $ 56,238,000
Income from operations <F1> $ 18,135,000 $ 13,825,000
Operating ratio <F1> 78.2% 80.3%
Interest on disputed switching charges $ 294,000 $ 210,000
Income before equity in net income of affiliates and
extraordinary item $ 8,680,000 $ 7,144,000
Equity in net income of Tranz Rail $ 1,981,000 $ 2,325,000
Equity in net income of EWS $ 7,019,000 $ 7,900,000
Equity in net income of Tasrail $ 30,000 $ --
Income before extraordinary item $ 17,710,000 $ 17,369,000
Extraordinary item $ -- $ (1,602,000)<F2>
Net income $ 17,710,000 $ 15,767,000
Average number of basic common shares outstanding 51,006,000 50,762,000
Basic earnings per common share outstanding:
Income before extraordinary item $ 0.35 $ 0.34
Extraordinary item $ -- $ (0.03)<F2>
Net income $ 0.35 $ 0.31
Average number of diluted common shares outstanding 51,411,000 51,422,000
Diluted earnings per common share outstanding:
Income before extraordinary item $ 0.34 $ 0.34
Extraordinary item $ -- $ (0.03)<F2>
Net income $ 0.34 $ 0.31
Year ended December 31:
Operating revenues:
Before disputed switching charges <F1> $ 333,510,000 $ 278,397,000
Disputed switching charges $ -- $ (13,278,000)
Total operating revenues <F1> $ 333,510,000 $ 265,119,000
Operating expenses $ 255,831,000 $ 226,388,000
Income from operations:
Before disputed switching charges $ 77,679,000 $ 52,009,000
After disputed switching charges $ 77,679,000 $ 38,731,000
Operating ratio:
Before disputed switching charges 76.7% 81.3%
After disputed switching charges 76.7% 85.4%
Interest on disputed switching charges $ 924,000 $ 2,910,000
Income before equity in net income of affiliates and
extraordinary item $ 38,808,000 $ 17,357,000
Equity in net income of Tranz Rail $ 8,707,000 $ 9,850,000
Equity in net income of EWS $ 29,881,000 $ 22,827,000
Equity in net income of Tasrail $ 30,000 $ --
Income before extraordinary item $ 77,426,000 $ 50,034,000
Extraordinary item $ -- $ (1,602,000)<F2>
Net income $ 77,426,000 $ 48,432,000
Average number of basic common shares outstanding 50,913,000 50,647,000
Basic earnings per common share outstanding:
Income before extraordinary item $ 1.52 $ 0.99
Extraordinary item $ -- $ (0.03)<F2>
Net income $ 1.52 $ 0.96
Average number of diluted common shares outstanding 51,423,000 51,254,000
Diluted earnings per common share outstanding:
Income before extraordinary item $ 1.51 $ 0.98
Extraordinary item $ -- $ (0.03)<F2>
Net income $ 1.51 $ 0.95
<FN>
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<F1> Certain amounts which were previously classified as non-operating have
been reclassified as operating revenues. The amounts reclassified were
$960,000 for the quarter ended December 31, 1996 and $2,959,000 for the
year ended December 31, 1996.
<F2> Represents an extraordinary charge (net of income taxes) for the effects
of early retirement of debt.
</FN>
# # #
Contact: Thomas F. Power, Jr. (847) 318-4602
Executive Vice President and Chief Financial Officer
Wisconsin Central Transportation Corporation
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