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As filed with the Securities and Exchange Commission on June 14, 1996
Registration No. 33-49026
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 8
ON FORM S-3 TO
REGISTRATION STATEMENT
ON FORM SB-2
UNDER THE SECURITIES ACT OF 1933
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RAILAMERICA, INC.
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(Exact Name of Registrant as Specified in its Charter)
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DELAWARE 4011 65-0328006
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)
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301 YAMATO ROAD
SUITE 1190
BOCA RATON, FLORIDA 33431
(407) 994-6015
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(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
GARY O. MARINO
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
RAILAMERICA, INC.
301 YAMATO ROAD
SUITE 1190
BOCA RATON, FLORIDA 33431
(407) 994-6015
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(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code of Agent for Service)
Please send copies of all communications to:
GARY EPSTEIN, ESQ.
GREENBERG, TRAURIG, HOFFMAN, LIPOFF, ROSEN & QUENTEL, P.A.
1221 BRICKELL AVENUE
MIAMI, FLORIDA 33131
(305) 579-0500
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time upon the exercise of Warrants after this registration
statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.[ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box.[X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration number of the earlier effective
registration statement for the same offering.[ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the
Securities Act registration number of the earlier effective registration
statement for the same offering.[ ]
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box.[ ]
Pursuant to Rule 416, this Registration Statement also covers such
indeterminable number of additional shares of Common Stock and Warrants, if
any, which may become issuable by virtue of the anti-dilution provisions of the
Warrants.
The Registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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PROSPECTUS
RAILAMERICA, INC.
799,579 Shares of Common Stock
This Prospectus relates to the sale of up to 799,579 shares of Common
Stock, par value $.001 per share (the "Common Stock"), by RailAmerica, Inc.
(the "Company"), a Delaware corporation, upon the exercise of its presently
outstanding Class B Warrants. On the date of this Prospectus, there were
615,062 outstanding Class B Warrants. On the date of this Prospectus, each
Class B Warrant entitled its holder to purchase 1.3 shares of Common Stock at
an exercise price of $3.50 per share and was exercisable until November 9,
1997. No fractional shares will be issued upon exercise of a Class B Warrant.
If a fractional share of Common Stock is issuable upon the exercise of a Class
B Warrant, the Company will, within twenty (20) days after the exercise date,
deliver to the purchaser a check payable to the purchaser, in lieu of such
fractional share, in an amount equal to the market price of such fractional
share as of the close of business on the exercise date. See "Plan of
Distribution" for additional information regarding the Class B Warrants.
The Company's Common Stock and Class B Warrants are listed on the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") under
the symbols "RAIL" and "RAILZ," respectively.
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" ON PAGES 3 TO 5.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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Exercise Maximum Proceeds to
Price Solicitation Fee (1) Company (2)
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Per Share....... $ 3.50 $ .14 $ 3.36
Total........... $2,798,526.50 $111,941.06 $2,686,585.44
===========================================================================
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(1) The Company will pay a solicitation fee equal to four percent (4%) of the
aggregate exercise price of the Class B Warrants exercised under certain
conditions. See "Solicitation of Warrants."
(2) Before deducting expenses of the Offering which are estimated to be
$35,000.
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The date of this Prospectus is June 14, 1996.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information may be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Atlanta Regional Office of the Commission at
3475 Lenox Road, N.E., Suite 1000, Atlanta, Georgia 30326-7232. Copies of such
materials may also be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. The Common Stock of the Company is quoted on the NASDAQ Small-Cap
Market. Reports, proxy statements and other information concerning the Company
may be inspected at the offices of NASDAQ, 1735 K. Street, N.W., Washington,
D.C. 20006.
The Company has filed with the Commission a registration statement under
the Securities Act of 1933, as amended (the "Securities Act"), with respect to
the Common Stock offered hereby. This Prospectus, which is a part of the
registration statement, does not contain all the information set forth in, or
annexed as exhibits to, such registration statement, certain portions of which
have been omitted pursuant to rules and regulations of the Commission. For
further information with respect to the Company and the Common Stock, reference
is made to such registration statement, including the exhibits thereto, copies
of which may be inspected and copied at the aforementioned facilities of the
Commission. Copies of such registration statement, including the exhibits, may
be obtained from the Public Reference Section of the Commission at the
aforementioned address upon payment of the fee prescribed by the Commission.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents which have been filed by the Company with the
Commission pursuant to the Exchange Act or the Securities Act are incorporated
by reference in this Prospectus:
- The Company's Annual Report on Form 10-KSB for the year ended
December 31, 1995.
- The Company's Quarterly Report on Form 10-QSB for the quarterly period
ended March 31, 1996.
- The Company's Current Report on Form 8-K/A filed on January 12, 1996.
- The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A, declared effective by
the Commission on September 14, 1992.
In addition, all documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Common Stock
offered hereby shall be deemed to be incorporated herein by reference and to be
a part hereof from the date of filing of such documents.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus is delivered,
upon the written or oral request of any such person, a copy of any and all of
the above documents (not including exhibits to any of such documents unless
such exhibits are specifically incorporated by reference into such documents).
Such requests should be addressed to the Secretary, RailAmerica, Inc., 301
Yamato Road, Suite 1190, Boca Raton, Florida 33431.
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RISK FACTORS
The Securities offered hereby involve a high degree of risk. Prospective
investors should carefully consider, among other things, the following factors
before a decision is made to purchase any Common Stock.
DEPENDENCE ON INDUSTRY DEMAND FOR TRUCK TRAILERS. Through its wholly
owned subsidiary, Kalyn/Siebert, Inc. ("Kalyn"), the Company manufacturers a
broad range of specialty truck trailers. Kalyn's operations are dependent on
the demand for its products. Unit sales of new truck trailers have
historically been subject to substantial cyclical variation. In addition,
periods of economic recession in the United States have historically caused
declines in the profitability of the trucking industry, have had a materially
adverse effect on industry-wide demand for new truck trailers and may have a
materially adverse effect on Kalyn's results of operations. Future economic
downturns or cyclical decreases in demand for truck trailers would likely have
a material adverse effect on Kalyn and the Company. Kalyn believes that if it
satisfies its current orders for truck trailers, sales to governmental agencies
may account for as much as 35% of its sales in the year ended December 31,
1996. In the year ended December 31, 1995, sales to commercial accounts and
governmental agencies represented 71% and 29%, respectively, of Kalyn's sales.
The majority of Kalyn's sales to governmental agencies are to the ("GSA"), the
purchasing arm of non-military agencies, and to TACOM, a department of defense
unit established to consolidate purchases for various branches of the military.
Accordingly, Kalyn believes the loss of GSA's and/or TACOM's business could
have a material adverse effect on Kalyn.
DEPENDENCE ON ONE TRUCK TRAILER MANUFACTURING SITE. Kalyn operates one
manufacturing facility which, as of the date of this Prospectus, was operating
at approximately 70% of capacity. Although the Company believes its
manufacturing capacity could be increased through the expansion of its
manufacturing facility and/or the addition of a partial second work shift, such
capacity increases may increase the marginal cost of producing truck trailers.
Sustained growth of Kalyn's production and, in turn, its net sales are
dependent on its ability to cost efficiently increase production at its plant.
Long-term interruption in the operation of Kalyn's plant, from labor strikes, a
natural disaster or other cause, whether or not covered by insurance, could
have a material adverse effect on Kalyn.
DEPENDENCE ON SUPPLIERS. Kalyn's ability to manufacture truck trailers is
dependent upon receiving supplies, or components and raw materials from a
limited number of sources. To date, Kalyn has experienced no material
difficulties in procuring supplies, components or materials. However, if
deliveries of such items are delayed, Kalyn's production ability may be
decreased which could have a negative effect on Kalyn's results of operations.
RAILROAD OPERATIONS - DEPENDENCE ON AGRICULTURAL INDUSTRY. Through its
wholly owned subsidiaries, the Company operates seven short line railroads in
the States of Delaware, Michigan, Minnesota, Pennsylvania, Tennessee and Texas.
The Company's traffic base in Michigan includes agricultural commodities,
automotive parts, chemicals and fertilizer, ballast and other stone products.
Its traffic base in Tennessee includes wood chips, paper, chemicals and
processed foods. Traffic handled in Pennsylvania and Delaware includes iron
and steel products, chemicals, agricultural products, lumber and processed
foods. The Company's traffic base in Minnesota includes plastics, lumber,
denatured alcohol, scrap iron and steel. The Company's traffic base in Texas
consists of cotton, sodium sulfate, chemicals, fertilizer, scrap iron and
steel. A substantial portion of the Company's traffic has consisted of
agricultural commodities. As a result, the Company could be materially and
adversely affected by factors that generally affect the agricultural industry
in the regions in which it operates. Such factors include, without limitation,
the weather and fluctuations in agricultural prices. Sellers of agricultural
commodities typically hold back shipment of their products until they deem
prices to be advantageous. As a result, the number of carloads handled by the
Company and its recognition of revenue may vary significantly from period to
period as a result of fluctuations in the price for those commodities.
Shipments of agricultural commodities, on an overall basis, occur seasonally,
with the majority of the agricultural products being shipped from September
through May. As a result, the Company's revenues will normally be higher
during these months than during the summer. The Company
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believes that agricultural commodities will continue to represent the
primary component of the Company's rail traffic base for the near future.
ACQUISITION STRATEGY; POTENTIAL NEED FOR ADDITIONAL FINANCING; DILUTION.
The Company's business strategy includes the acquisition of additional railroad
properties or other transportation related businesses. The Company's ability
to implement this strategy is dependent on the availability of financing
alternatives for such acquisitions. There can be no assurance, however, that
such financing will be available or, if available, will be obtainable by the
Company on favorable terms. On June 13, 1996, the Company had 25,137,090
shares of authorized but unissued common stock. The Company could issue
authorized but unissued common stock in the future to finance future
acquisitions on terms which could be dilutive to the stock ownership of
existing shareholders. Due to the Company's business strategy which places an
emphasis on additional acquisitions of transportation-related companies, it is
anticipated that deferred acquisition costs will continue to accumulate.
Termination of acquisition efforts prior to successful completion will result
in write-downs or write-offs of deferred acquisition costs and corresponding
charges against earnings. Depending on the deferred acquisition costs
associated with a terminated acquisition effort, these charges may be material.
GOVERNMENTAL REGULATION OF RAILROAD OPERATIONS. The Company is subject to
governmental regulation by the Surface Transportation Board ("STB"), the
Federal Railroad Administration and other federal, state and local regulatory
authorities with respect to certain rates and railroad operations, as well as a
variety of health, safety, labor, environmental and other matters, all of which
could potentially affect the competitive position and profitability of the
Company. All railroad industry employees are covered by the Railroad Retirement
Act and the Railroad Unemployment Insurance Act in lieu of Social Security and
other federal and state unemployment insurance programs. Employer contributions
under Railroad Retirement are currently about triple those required under
Social Security. Management of the Company believes that the regulatory
freedoms granted by the Staggers Rail Act amendments have been beneficial to
the Company by giving it flexibility to adjust prices and operations to respond
to market forces and industry changes. However, various interests, and certain
members of the committees in the United States House of Representatives and
Senate that have jurisdiction over federal regulation of railroads, have from
time-to-time expressed their intention to support legislation that would
eliminate or reduce certain significant freedoms granted by the Staggers Rail
Act. If enacted, these proposals, or court or administrative rulings to the
same effect under current law, could have a significant adverse effect on the
Company.
GOVERNMENTAL REGULATION OF TRUCKING INDUSTRY. Through its wholly owned
subsidiary, Steel City Carriers, Inc. ("Steel City"), the Company operates a
regional motor carrier from Sault Ste. Marie, Ontario. Truck trailer length,
height, width, gross vehicle weight and other specifications are regulated
within Canada by Transport Canada and the individual Provinces of Canada and
within the United States of America by the National Highway Traffic Safety
Administration and individual states within the United States of America.
Historically, changes and anticipated changes in these regulations have
resulted in significant fluctuations in demand for new trailers, thereby
contributing to a cyclical industry. Changes or anticipation of changes in
these regulations can have a materially adverse impact on Kalyn's manufacturing
operations and sales.
MOTOR CARRIER OPERATIONS - WEATHER CONDITIONS; CUSTOMER DEMAND; FUEL
PRICES. Steel City's operations and results of operations have historically
been and may in the future be negatively affected by severe weather conditions.
Steel City's largest customer, Algoma Steel, accounted for 42% of Steel City's
sales in the year ended December 31, 1995. Although Steel City expects Algoma
Steel to account for a smaller percentage of sales in the year ended December
31, 1996, Steel City believes that the loss of Algoma Steel's business would
have a material adverse effect on Steel City. For the year ended December 31,
1995, fuel costs accounted for approximately 11% of Steel City's motor carrier
transportation expenses. Accordingly, Steel City believes that its results of
operations would be negatively affected by material increases in the price of
fuel. Even if Steel City was capable of passing the increased cost of fuel on
to its customers, Steel City's results of operations may be negatively affected
by a relative reduction in demand for its services as a result of the higher
cost of service.
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COMPETITION. The Company's primary source of competition in its rail
operations comes from over-the-road trucks. While the Company must build or
acquire and maintain its rail system, trucks are able to use public roadways.
Any future expenditures materially increasing the roadway system in the
Company's present or proposed areas of operation (or legislation granting
materially greater latitude for trucks with respect to size or weight
limitations) could have a significant adverse effect on the Company's
competitiveness.
The Company faces significant competition in the truck trailer
manufacturing industry which is highly competitive and has relatively low
barriers to entry. Kalyn competes with a number of other trailer
manufacturers, some of which have greater financial resources and higher sales
than Kalyn. Furthermore, Kalyn's products compete with alternative forms of
shipping, such as intermodal containers. There can be no assurance that Kalyn
will be able to continue to compete effectively with existing or potential
competitors or alternative forms of shipping containers.
DEPENDENCE ON KEY PERSONNEL. The Company's success is dependent on
certain management and personnel, including Messrs. John Marino, its President
and Chief Operating Officer, and Gary Marino, its Chairman and Chief Executive
Officer. The Company's success is also dependent upon the efforts of Robert B.
Coward, the Vice President and General Manager of Kalyn. The loss of the
services of one or more of these executives could have an adverse effect upon
the business of the Company. While the Company believes that it would be able
to locate suitable replacements for these executives if their services were
lost to the Company, there can be no assurance it would be able to do so.
Messrs. John Marino and Gary Marino have agreed, pursuant to employment
agreements, to serve the Company until, at a minimum, March 1, 1998. Mr.
Coward has agreed, pursuant to an employment agreement, to serve the Company
until, at a minimum, February 1997.
CERTAIN ANTI-TAKEOVER PROVISIONS. The Company's Amended and Restated
Certificate of Incorporation contains certain anti-takeover provisions that
could have the effect of making it more difficult for a third party to acquire,
or of discouraging a third party from attempting to acquire control of the
Company without negotiating with its Board of Directors. Such provisions could
limit the price that certain investors might be willing to pay in the future
for the Company's securities. Certain of such provisions provide for a
classified Board of Directors with staggered terms, and allow the Company to
issue preferred stock with rights senior to those of the common stock or impose
various procedural and other requirements which could make it more difficult
for stockholders to effect certain corporate actions.
DIVIDEND POLICY. The Company has never declared or paid a dividend on its
common stock, and management of the Company expects that the substantial
portion of the Company's future earnings will be retained for expansion or
development of the Company's business, which may include additional
acquisitions. Whether the Company will pay dividends in the future will be at
the discretion of the Company's Board of Directors and will depend upon, among
other things, future earnings, operations, capital requirements and surplus,
the general financial condition of the Company, restrictive covenants in loan
or other agreements to which the Company may be subject, and such other factors
as the Board of Directors may deem to be relevant, including the desirability
of cash dividends to stockholders.
SHARES ELIGIBLE FOR FUTURE SALE. On the date of this Prospectus, the
Company had 4,672,910 shares of Common Stock issued and outstanding and
3,262,461 shares of Common Stock reserved for issuance, including: (1) 849,208
shares of Common Stock reserved for issuance upon exercise of the Class B
Warrants; (2) 76,352 shares of Common Stock reserved for issuance upon exercise
of underwriter's warrants (exercise price of $8.32 per share); (3) 444,440
shares of Common Stock reserved for issuance upon conversion of $1,000,000 in
principal amount of Convertible Subordinated Promissory Notes (conversion price
$2.25); (4) 364,961 shares of Common Stock reserved for issuance upon
conversion of $2,000,000 in principal amount of Series A Convertible
Subordinated Debentures (conversion price $5.48); (5) 250,000 shares of Common
Stock reserved for issuance upon exercise of options granted under the 1992
Stock Option Plan (exercise price $3.50); (6) 350,000 shares of Common Stock
reserved for issuance upon the exercise of options granted to an executive
officer of the Company (exercise
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price $3.10 - $4.15); (7) 238,500 and 11,500 shares of Common Stock
reserved for issuance upon exercise of options granted and yet to be granted,
respectively, under the 1995 Stock Incentive Plan (exercise price $3.50 -
$3.625); (8) 110,000 and 140,000 shares of Common Stock reserved for
issuance upon exercise of options granted and yet to be granted, respectively,
under the 1995 Non-Employee Director Stock Option Plan (exercise price $3.50 -
$4.81); (9) 250,000 shares of Common Stock reserved for issuance upon exercise
of options yet to be granted under the 1995 Employee Stock Purchase Plan; (10)
127,500 shares of Common Stock issuable upon exercise of warrants (exercise
price $4.25); and (11) 50,000 shares of Common Stock to be issued on August 31,
1997 to certain employees of Kalyn. Of the 4,672,910 shares of Common Stock
issued and outstanding, the Company believes that 4,260,636 of the shares are
freely tradeable without restriction or further registration under the
Securities Act, except for any shares purchased by an "affiliate" of the
Company (in general, a person who has a control relationship with the Company).
The Company believes the remaining 412,274 shares of Common Stock are
"restricted securities", as that term is defined under Rule 144 promulgated
under the Securities Act, in that such shares were issued and sold by the
Company in private transactions not involving a public offering. Of such
412,274 shares of Common Stock, 40,274 will become eligible for sale under Rule
144 79 days from the date of this Prospectus. In general, under Rule 144,
subject to the satisfaction of certain other conditions, a person, including an
affiliate of the Company (or other persons whose shares are aggregated), who
has owned restricted shares of Common Stock beneficially for at least two years
is entitled to sell, within any three-month period, a number of shares that
does not exceed the greater of one percent of the total number of outstanding
shares of the same class or the average weekly trading volume during the four
calendar weeks preceding the sale. A person who has not been beneficially
owned shares of Common Stock for at least three years is entitled to sell such
shares under Rule 144 without regard to any of the limitations described above.
The possibility that substantial amounts of Common Stock may be issued
and/or freely resold in the public market may adversely affect prevailing
market prices for the Common Stock and could impair the Company's ability to
raise capital through the sale of its equity securities.
THE COMPANY
The Company is a multi-model transportation holding company that was
incorporated in Delaware on March 31, 1992. Through its 15 wholly owned
subsidiaries, the Company operates seven short-line railroads in the States of
Delaware, Michigan, Minnesota, Pennsylvania, Tennessee and Texas, leases
railroad tank cars for use throughout the United States of America, operates a
regional motor carrier in the Province of Ontario, Canada and the Northern
Midwest and Eastern States of the United States of America, manufactures a
broad range of specialty truck trailers in the State of Texas, transports
intermodal containers in the Province of Ontario, Canada and the Northern
Midwest and Eastern States of the United States of America and provides
third-party logistic management services to move bulk commodities around North
America. The Company's objective is to create a diversified, multimodal
transportation company by growing its existing subsidiaries and by acquiring
additional short-line railroads and other transportation-related companies.
The Company's principal executive offices are located at 301 Yamato Road,
Suite 1190, Boca Raton, Florida 33431, and its phone number is (407) 994-6015.
RAILROAD OPERATIONS. The Company developed its short-line and regional
railroads primarily through the acquisition of branch and light density rail
lines.
The Company provides its customers with local rail freight services and
access to the nation's rail system for delivery of goods both domestically and
internationally. The Company's traffic base in Michigan includes agricultural
commodities, automotive parts, chemicals and fertilizer, ballast and other
stone products. Its traffic base in Tennessee includes wood chips, paper,
chemicals and processed foods. Traffic handled in Pennsylvania and Delaware
includes iron and steel products, chemicals, agricultural products, lumber and
processed foods. The
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Company's traffic base in Minnesota includes plastics, lumber, denatured
alcohol, scrap iron and steel. The Company's traffic base in Texas
consists of cotton, sodium sulfate, fertilizer, scrap iron and steel. In
keeping with the general nature of business in its Michigan area of operation,
a substantial portion of the Company's traffic has consisted of agricultural
commodities. Although the addition of the Company's Delaware, Tennessee,
Minnesota, Pennsylvania and Texas operations has helped to diversify the
Company's traffic base, the Company believes that, absent subsequent
acquisitions, agricultural commodities will continue to represent the primary
component of the Company's rail traffic base for the near future. As of the
date of this Prospectus, the Company operated approximately 450 miles of rail
line and employed approximately 61 employees in its railroad operations.
One of the major precipitating factors leading to growth opportunities in
the short-line railroad industry was the passage of the Staggers Rail Act of
1980 (the "Staggers Rail Act"). The Staggers Rail Act was the first significant
amendment of the Interstate Commerce Act affecting railroads since 1920. As a
result of the 1980 Staggers Rail Act amendments, railroads have received
considerable rate and market flexibility, including the ability to obtain
wholesale exemptions from numerous provisions of the Interstate Commerce Act.
Under the Staggers Rail Act, all containerized and truck trailer traffic
handled by railroads has been deregulated. With respect to regulated traffic,
railroads and shippers have been allowed to enter into contracts for rates and
provision of transportation services without the need to file tariffs with the
STB. Moreover, on regulated traffic, the Staggers Rail Act amendments have
allowed railroads considerable freedom to raise or lower rates without
objection from captive shippers. While the STB termination retained maximum
rate regulation on traffic over which railroads have exclusive control, the new
law relieved railroads from the requirements of filing tariffs and rate
contracts with the STB on all traffic other than agricultural products.
In March 1996, the Company acquired 100 railroad tank cars. The Company
leases the tank cars to shippers throughout the United States of America.
MOTOR CARRIER AND INTERMODAL CONTAINER TRANSPORT OPERATIONS. Through its
subsidiary, Steel City Carriers, Inc. ("Steel City"), the Company operates a
regional motor carrier from Sault Ste. Marie, Ontario, Canada. As of the date
of this Prospectus, Steel City operated a fleet of approximately 140 tractors
and trailers, and served more than 50 customers in the steel, paper and lumber
industries by transporting a broad variety of products within Canada and
between Canada and the United States of America, particularly the states of
Michigan, Ohio, Indiana, New York and Wisconsin. As of the date of this
Prospectus, Steel City had approximately 55 employees, as well as 35
independent contractors who own and operate their own vehicles.
Through its subsidiary, RailAmerica Intermodal Services, Inc. ("RIS"),
since November 1995 the Company has transported intermodal containers within
the Province of Ontario, Canada and between Ontario and the United States of
America, particularly the state of Michigan. As of the date of this
Prospectus, RIS employed three persons.
TRAILER MANUFACTURING OPERATIONS. Through its subsidiary, Kalyn/Siebert,
Inc. ("Kalyn"), the Company manufactures a broad range of specialty truck
trailers in Gatesville, Texas. As of the date of this Prospectus, Kalyn
offered over 40 standard trailer models in 100 different variations. The
majority of Kalyn's sales are based on existing Kalyn trailer designs which are
modified with standard options. However, approximately 20% of sales must be
customized to satisfy customers' specifications.
Kalyn has served a wide variety of customers. From 1990 to 1994,
commercial accounts represented 55% to 50% of Kalyn's sales, with military and
governmental agency sales representing the balance. In the year ended December
31, 1995, sales to commercial accounts and governmental agencies represented
71% and 29%, respectively, of Kalyn's sales. The majority of Kalyn's sales to
governmental agencies are to the ("GSA"), the purchasing arm of non-military
agencies, and to TACOM, a department of defense unit established to consolidate
purchases for various branches of the military.
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As of the date of this Prospectus, Kalyn's sold trailers through its own
six person sales force and a network of approximately 163 independent dealers
in 49 states, Canada and Mexico. Historically, up to 50% of all of Kalyn's
commercial sales have been made to dealers with the balance of the sales being
made by Kalyn's internal sales force.
DISTRIBUTION SERVICES OPERATIONS. Through its subsidiary Huron
Distribution Services, Inc. ("HDS"), the Company provides third-party logistics
management services to move bulk commodities throughout North America. As of
the date of this Prospectus, HDS employed one person.
USE OF PROCEEDS
The net proceeds to the Company if all outstanding Class B Warrants are
exercised is estimated to be approximately $2,686,585. There can be no
assurance that the Company will receive any proceeds from the exercise of the
Class B Warrants. The original exercise prices of the Class B Warrants were
determined by the Company in conjunction with the underwriters of its initial
public offering. The Class B Warrants were subsequently adjusted as a result
of certain events described below.
The net proceeds may be used by the Company for general corporate
purposes, to redeem or paydown the outstanding indebtedness of the Company, to
finance capital expenditures for the Company's existing businesses and/or
finance future acquisitions.
PLAN OF DISTRIBUTION
The Company is offering for issuance from time to time to holders of its
Class B Warrants up to 849,209 shares of Common Stock at an exercise price of
$3.50 per share. The Class B Warrants may be exercised at any time prior to
November 9, 1997. No fractional shares will be issued upon exercise of a Class
B Warrant. If a fractional share of Common Stock is issuable upon the exercise
of a Class B Warrant, the Company will, within twenty (20) days after the
exercise date, deliver to the purchaser a check payable to the purchaser, in
lieu of such fractional share, in an amount equal to the market price of such
fractional share as of the close of business on the exercise date.
The Company may pay a fee of up to four percent (4%) of the aggregate
exercise price of each Class B Warrant exercised if (i) the market price of the
Common Stock on the date of such exercise is greater than the exercise price of
the Class B Warrant, (ii) the exercise price of the Class B Warrant was
solicited by an NASD member, (iii) the Class B Warrant is not held in a
discretionary account and (iv) the solicitation was not in violation of Rule
10b-6 under the Exchange Act. The Company has retained Rickel & Associates,
Inc. ("Rickel"), a registered broker-dealer, to act as its solicitation agent
in connection with the exercise of its outstanding Class B Warrants. The
Company has entered into an agreement (the "Agreement") to pay Rickel 4% of the
aggregate exercise price of the Class B Warrants, the exercise of which is
solicited by Rickel, and to reimburse Rickel for all accountable expenses
incurred in connection with the Class B Warrant solicitation. Rickel may allow
to certain dealers who are members of the NASD and who participate in the
solicitation of the Class B Warrants a portion of such fee. The Agreement
contains certain provisions between the Company and Rickel regarding indemnity
and contribution against certain liabilities, including liabilities under the
Securities Act.
There were initially 576,886 Class B Warrants issued in connection with
the Company's initial public offering on November 9, 1992. At the time of
issuance, each Class B Warrant entitled its holder to purchase one share of
Common Stock at an exercise price of $4.55 per share. Class B Warrants were
initially exercisable until November 9, 1997. Under the Statement of Rights,
Terms and Conditions for Class B Callable Stock Purchase Warrants ("Statement
of Rights") the exercise price and the number of shares exercisable per Class B
Warrant is
-8-
<PAGE> 10
subject to adjustment in the event of certain occurrences. The Class B
Warrants were adjusted to their present terms as of September 2, 1994 based on
a series of events that involved the sale and issuance of Common Stock and
securities convertible into Common Stock, which occurred in connection with the
Company's acquisition of Kalyn.
The Class B Warrants were issued in registered form under a Warrant
Agreement (the "Warrant Agreement"), between the Company and American Stock
Transfer & Trust Company (the "Warrant Agent"). The following summary of the
provisions of the Class B Warrants is qualified in its entirety by reference to
the Warrant Agreement, a copy of which is filed as an exhibit to the Company's
Registration Statement of which this Prospectus is a part.
The Class B Warrants are redeemable, in whole or in part, at the election
of the Company on at least 30 days' written notice to the Warrant Agent, at a
redemption price of $.05 per Class B Warrant. The notice of redemption must be
given within ten days following any period of 20 consecutive trading days
during which the closing bid price for the Common Stock exceeds $5.6875. Any
Class B Warrant so called for redemption may be exercised until the close of
business on the business day preceding the redemption date specified in such
notice of redemption. On redemption of the Class B Warrants, the Class B
Warrants will be canceled and the right to purchase the shares of Common Stock
underlying the Class B Warrants will be forfeited if not exercised before the
date specified in the notice of redemption. The Company intends to redeem the
Class B Warrants only if a current registration statement is in effect covering
the Common Stock underlying the Class B Warrants.
The Company has reserved for issuance a number of shares of Common Stock
sufficient to provide for the exercise of the Class B Warrants. The exercise
price of the Class B Warrants and the number of shares of Common Stock issuable
upon exercise of the Warrants are subject to adjustment on the occurrence of
certain events.
The Class B Warrants may be exercised on surrender of the Class B Warrant
certificate on or prior to expiration of the Class B Warrants, with the form of
"Exercise Agreement" on the reverse side of the certificate executed as
indicated, and accompanied by payment of the full exercise price of the number
of Class B Warrants being exercised. Payment must be by certified funds
payable to the order of the Warrant Agent. In order for a holder to exercise a
Class B Warrant, there must be a current and effective registration statement
on file with the Securities and Exchange Commission and with various state
securities commissions registering the distribution of the shares of Common
Stock issuable upon exercise of the Class B Warrants. The Company will be
required to file post-effective amendments to the Registration Statement of
which this Prospectus forms a part when events require such amendments.
Although it is the Company's intention to file post-effective amendments when
necessary, there is no assurance that the Registration Statement will be kept
effective. If the Registration Statement is not kept current for any reason,
the Class B Warrants will not be exercisable, and holders thereof may be
deprived of any value.
LEGAL MATTERS
The validity of the issuance of the Common Stock offered hereby has been
passed upon for the Company by Greenberg, Traurig, Hoffman, Lipoff, Rosen &
Quentel, P.A., Miami, Florida.
EXPERTS
The consolidated balance sheets of RailAmerica, Inc. and Subsidiaries as
of December 31, 1995 and 1994 and the consolidated statements of operations,
stockholders' equity, and cash flows for each of the two years in the period
ended December 31, 1995, in this Prospectus, have been included herein in
reliance on the report of Coopers & Lybrand, L.L.P, independent accountants
given on the authority of that firm as experts in accounting and auditing.
-9-
<PAGE> 11
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company has authority under Section 145 of the Delaware General
Corporation Law to indemnify its directors and officers to the extent provided
for in such statute. The Company's Amended and Restated Certificate of
Incorporation provides for indemnification of the Company's officers and
directors to the extent permitted under the Delaware General Corporation Law.
Insofar as indemnification for liabilities under the Securities Act may be
permitted to directors, officers or persons controlling the registrant,
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable.
-10-
<PAGE> 12
<TABLE>
<S> <C>
================================================= =================================================
No dealer, salesman or other person is 799,579 SHARES
authorized to give any information or to make any OF COMMON STOCK
representation other than as contained in this
Prospectus and, if given or made, such information
or representation must not be relied upon as having
been authorized by the Company. This Prospectus
does not constitute an offer to sell, or a RAILAMERICA, INC.
solicitation of an offer to buy, by any person in
any jurisdiction in which it is unlawful to make
such an offer or solicitation. Neither the
delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create
any implication that the information contained
herein is correct as of any time subsequent to the
date hereof.
--------------------
TABLE CONTENTS
Page
----
AVAILABLE INFORMATION ................... 2
INCORPORATION OF CERTAIN
INFORMATION BY REFERENCE................ 2
RISK FACTORS............................. 3 ----------------------
THE COMPANY.............................. 5 PROSPECTUS
USE OF PROCEEDS.......................... 7 ----------------------
PLAN OF DISTRIBUTION..................... 7
LEGAL MATTERS............................ 9
EXPERTS.................................. 9
INDEMNIFICATION OF DIRECTORS AND
OFFICERS............................... 10
June 14, 1996
================================================= =================================================
</TABLE>
<PAGE> 13
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses, excluding solicitation fees, in connection with
this offering are as follows:
<TABLE>
<CAPTION>
Amount
-------
<S> <C>
Printing (other than stock certificates)........ $ 1,000
Legal fees and expenses......................... 25,000
Blue Sky fees and expenses...................... 1,500
Accounting fees and expenses.................... 1,500
Transfer agent, warrant agent and registrar fees 1,000
Miscellaneous................................... 5,000
-------
Total......................................... $35,000
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company has authority under Section 145 of the Delaware General
Corporation Law to indemnify its directors and officers to the extent provided
for in such statute. The Company's Amended and Restated Certificate of
Incorporation provides for indemnification of the Company's officers and
directors to the extent permitted under the Delaware General Corporation Law.
The Registrant's Amended and Restated Certificate of Incorporation limits
the liability of Directors to the maximum extent permitted by Delaware General
Corporation Law. Delaware law provides that the directors of a corporation will
not be personally liable to such corporation or its stockholders for monetary
damages for breach of their fiduciary duties as directors, except for liability
(i) for any breach of their duty of loyalty to the corporation or its
stockholders; (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; (iii) for unlawful
payments of dividends or unlawful stock repurchases or redemptions as provided
in Section 174 of the Delaware General Corporation Law; or (iv) for any
transaction from which the director derives an improper personal benefit. The
Registrant's Amended and Restated Certificate of Incorporation provides that
the Registrant shall indemnify its Directors and officers to the fullest extent
permitted by Delaware law, except against actions by the Registrant approved by
the Board of Directors, and requires the Registrant to advance expenses to such
Directors and officers to defend any action for which rights of indemnification
are provided in the Certificate of Incorporation, and also permits the Board of
Directors to grant such rights to its employees and agents.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following exhibits are included as a part of this Registration
Statement:
1.1 Soliciting Agent Agreement with Rickel & Associates, Inc.*
3.1 Amended and Restated Articles of Incorporation of Registrant(3)
3.2 By-laws of Registrant(1)
4.2 Class B Warrant(2)
5.1 Opinion of Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel,
P.A.
23.1 Consent of Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel,
P.A. (contained in exhibit 5.1)
II-1
<PAGE> 14
23.2 Consent of Coopers & Lybrand L.L.P.
- ----------------------------------
* Previously filed
(1) Incorporated by reference to the same exhibit number filed as part of the
Registrant's Registration Statement on Form S-1, Registration No.
33-49026.
(2) Incorporated by reference to the same exhibit number filed as part of the
Registrant's Post-Effective Amendment No. 3 on Form SB-2 dated November
25, 1994, Registration No. 33-49026.
(3) Incorporated by reference to the same exhibit number filed as part of the
Company's Form 10-QSB for the quarter ended September 30, 1995, filed with
the Securities and Exchange Commission on November 12, 1995.
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes that it will:
(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to include any
additional or changed material information on the plan of distribution.
(2) For determining liability under the Securities Act of 1933, treat
each post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(3) File a post-effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable.
II-2
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Boca Raton, Florida, as of June 14, 1996.
RAILAMERICA, INC.
By: /s/ Gary O. Marino
-------------------
Gary O. Marino
Chairman, Chief Executive Officer and Treasurer
(Duly Authorized Representative)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Gary O. Marino and Larry Bush his true
and lawful attorneys-in-fact, each acting alone, with full powers of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities to sign any or all amendments, including any
post-effective amendments, to this registration statement, and to file the
same, with exhibits thereto, and other documents in connection therewith, with
the Securities and Exchange Commission, hereby ratifying and confirming all
that said attorneys-in-fact or their substitutes, each acting alone, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated as of June 14, 1996.
/s/ Gary O. Marino
-----------------------------------------------
Gary O. Marino
Chairman, Chief Executive Officer and Treasurer
(Principal Executive and Financial Officer)
/s/ John H. Marino
-----------------------------------------------
John H. Marino
President, Chief Operating Officer and Director
/s/ Donald D. Redfearn
-----------------------------------------------
Donald D. Redearn
Executive Vice President, Secretary and Director
/s/ Larry Bush
---------------------------------------------------
Larry Bush, Assistant Vice President and Controller
(Principal Accounting Officer)
/s/ Richard Rapell
---------------------------------------------------
Richard Rampell
Director
/s/ John M. Sullivan
---------------------------------------------------
John M. Sullivan
Director
/s/ Charles Swinburn
---------------------------------------------------
Charles Swinburn
Director
II-3
<PAGE> 1
EXHIBIT 5.1
GREENBERG
ATTORNEYS AT LAW
TRAURIG
June 12, 1996
RailAmerica, Inc.
301 Yamato Road, Suite 1190
Boca Raton, Florida 33431
Ladies and Gentlemen:
We have acted as counsel for RailAmerica, Inc., a Delaware corporation
(the "Company"), in connection with Post-Effective Amendment No. 8 on Form S-3
("Post-Effective Amendment No. 8") to the Company's Registration Statement on
Form SB-2 (the "Registration Statement") being filed by the Company under the
Securities Act of 1933, as amended, with respect to 799,579 shares (the
"Shares") of the Company's common stock, par value $.001 per share (the "Common
Stock"), which may be issued upon the exercise of Class B Warrants.
In connection with the preparation of Post-Effective Amendment No. 8 and
this letter, we have examined, considered and relied upon the following
documents (collectively, the "Documents"): Post-Effective Amendment No. 8; the
Warrant Agent Agreement, dated November 9, 1992, between the Company and
American Stock Transfer & Trust Company (the
<PAGE> 2
RailAmerica, Inc.
June 12, 1996
Page 2
"Warrant Agreement"); the Statement of Rights, Terms and Conditions for
Class B Callable Stock Purchase Warrants (the "Statement of Rights"); the Form
of Class B Warrants; the [ACompany's Amended and Restated Certificate of
Incorporation as filed with the Secretary of State of the State of Delaware on
July 27, 1995, Bylaws and corporate minute book; a certificate of good standing
of the Company issued on June 11, 1996, by the Secretary of State of the State
of Delaware; and such matters of law as we have considered necessary or
appropriate for the expression of the opinions contained herein.
In rendering the opinions set forth below, we have assumed without
investigation the genuineness of all signatures and the authenticity of all
documents submitted to us as originals, the conformity to authentic original
documents of all documents submitted to us as copies, and the veracity of the
Documents. As to questions of fact material to the opinions hereinafter
expressed, we have relied upon the representations and warranties of the
Company made in the Documents.
Based solely upon and subject to the Documents, and subject to the
qualifications set forth below, we are of the opinion that the Shares have been
duly authorized and when the Shares have been duly delivered against payment
therefor, as contemplated in the Warrant Agreement and the Statement of Rights,
the Shares will be validly issued, fully paid and nonassessable.
Although we have acted as counsel to the Company in connection with
certain other matters, our engagement is limited to certain matters about which
we have been consulted. Consequently, there may exist matters of a legal
nature involving the Company in connection with which we have not been
consulted and have not represented the Company. This opinion letter is limited
to the matters stated herein and no opinions may be implied or inferred beyond
the matters expressly stated herein. The opinions expressed herein are as of
the date hereof, and we assume no obligation to update or supplement such
opinions to reflect any facts or circumstances that may hereafter come to our
attention or any changes in law that may hereafter occur.
<PAGE> 3
RailAmerica, Inc.
June 12, 1996
Page 3
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the caption "Validity
of Shares" in the prospectus contained in the Registration Statement.
Very truly yours,
GREENBERG, TRAURIG, HOFFMAN,
LIPOFF, ROSEN & QUENTEL, P.A.
By:/s/ Gary M. Epstein
-------------------------
Gary M. Epstein
Director
<PAGE> 1
Exhibit 23.2
Consent of Independent Accountants
We consent to the incorporation by reference in the Post-Effective Amendment
No. 8 on Form S-3 to Registration Statement on Form SB-2 (File No.33-49026) of
our report dated March 15, 1996, on our audits of the consolidated financial
statements of RailAmerica, Inc. and Subsidiaries as of December 31, 1995 and
1994, and for the years then ended, appearing in the Company's Annual Report on
Form 10-KSB for the year ended December 31, 1995. We also consent to the
reference to our firm under the caption "Experts".
COOPERS & LYBRAND L.L.P.
West Palm Beach, Florida
June 14, 1996
