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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 20, 1999
REGISTRATION STATEMENT NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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RAILAMERICA, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 65-0328006
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
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GARY O. MARINO
CHAIRMAN, CHIEF EXECUTIVE OFFICER AND PRESIDENT
RAILAMERICA, INC. RAILAMERICA, INC.
5300 BROKEN SOUND BLVD., N.W. 5300 BROKEN SOUND BLVD., N.W.
BOCA RATON, FLORIDA 33487 BOCA RATON, FLORIDA 33487
(561) 994-6015 (561) 994-6015
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(Address, Including Zip Code, and Telephone Number, (Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices) Include Area Code, of Agent for Service)
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Copies of Communications to:
GARY M. EPSTEIN, ESQ.
GREENBERG TRAURIG, P.A.
1221 BRICKELL AVENUE, SUITE 2200
MIAMI, FLORIDA 33131
(305) 579-0500
(FACSIMILE) (305) 579-0717
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO
THE PUBLIC: From time to time after this Registration
Statement becomes effective.
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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, as amended (the "Securities Act"), 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 statement 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, check the following box and list the Securities Act
registration statement 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. [ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
AMOUNT TO BE AGGREGATE OFFERING AGGREGATE OFFERING REGISTRATION
TITLE OF SHARES TO BE REGISTERED REGISTERED(1) PRICE PER UNIT(2) PRICE(2) FEE(2)
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Common Stock, $.001 par value per share............ 3,130,907 $9.875 $30,917,706.62 $8,595.12
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(1) Includes (i) 2,254,544 shares of common stock issuable upon the
conversion of the Registrant's outstanding 6% Junior Convertible
Subordinated Debentures; (ii) 876,363 shares of common stock issuable upon
the exercise of outstanding warrants and (iii) in each case, such
indeterminate number of shares of common stock as may be issuable pursuant
to the anti-dilution provisions contained therein.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457 under the Securities Act of 1933, as
amended. Calculated pursuant to Rule 457(c) based on the average high and
low sales price of the Common Stock as reported on the Nasdaq Stock Market
on September 16, 1999.
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, 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
3,130,907 SHARES
RAILAMERICA, INC.
COMMON STOCK
RailAmerica, Inc. is a leading owner and operator of short line and
regional freight railroads.
The selling shareholders are offering 3,130,907 shares of our common
stock under this prospectus. Some of the selling shareholders may obtain their
shares of common stock upon conversion of our 6% junior convertible
subordinated debentures purchased by them in our private placement completed in
August 1999 and upon the exercise of warrants issued to them in connection with
that private placement. Additionally, some of these shares of common stock may
be obtained upon exercise of warrants issued to our placement agent in our
August 1999 private placement. None of the shares of common stock are being
sold by RailAmerica, Inc.
Our common stock is listed for trading on the Nasdaq National Market
under the symbol "RAIL." On September 17, 1999, the last reported sales price
of our common stock on the Nasdaq National Market was $9.75 per share.
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SEE "RISK FACTORS" BEGINNING ON PAGE 3 TO READ ABOUT THE FACTORS YOU
SHOULD CONSIDER BEFORE BUYING SHARES OF OUR COMMON STOCK.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER
REGULATORY BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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This prospectus is dated September ___, 1999.
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PROSPECTUS SUMMARY
This summary highlights selected information found in greater detail
elsewhere in this prospectus. We urge you to read the entire prospectus
carefully, including the financial statements and the notes thereto, before you
decide whether to buy our common stock. You should pay special attention to the
risks of investing in our common stock discussed under "Risk Factors."
RAILAMERICA
OUR BUSINESS
We are a leading owner and operator of short line and regional freight
railroads. We own and operate, or have a significant equity interest in, 25
freight railroads with approximately 8,400 miles of track in the United States,
Australia, Canada and Chile. We are also a leading manufacturer of specialized
truck trailers for U.S. governmental and commercial customers.
OUR RAILROAD OPERATIONS
We have grown rapidly through acquisitions of short line railroads in
North America and newly privatized regional railroads internationally. Pro
forma revenue from railroad operations for the six months ended June 30, 1999
after giving effect to our 1999 acquisitions was $86 million, compared to our
actual 1998 annual revenue from railroad operations of $30 million. We expect
to continue to grow our business by making additional acquisitions and by
increasing revenues and improving operating margins generated from railroads
that we currently own.
OUR OPERATING STRENGTHS. We have grown successfully because:
o We select and acquire appropriate acquisition candidates in new
and existing markets. We believe that sellers, when they evaluate
potential acquirers, consider, in addition to price, criteria
such as a prospective acquirer's operating experience, its
reputation among shippers and its ability to close a transaction
and commence operations smoothly. We believe that we have
established an excellent record in each of these areas.
o We increase rail freight traffic from existing, former and new
customers in each of our markets through the aggressive marketing
of our enhanced customer service, renegotiation of rates where
prudent, and implementation of other incentive arrangements for
shippers.
o We reduce costs and control expenses through rationalized
staffing, centralized purchasing and corporate administrative
services, efficient equipment deployment and utilization and,
where appropriate, outsourced maintenance. When we acquire a new
railroad within an existing market, we capitalize on operating
efficiencies resulting from the presence of our other railroads
within that market.
o We select and motivate effective management through our centrally
supported and locally executed management philosophy. We reward
productivity through separate performance-based, incentive
compensation programs for a significant number of our railroads.
o We enhance customer service and make it responsive to the needs
of local customers by upgrading and providing specialized
equipment and by increasing reliability and frequency of service.
o Through these operating strengths, we make profitable railroads
that have been historically under performing.
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OUR RECENT ACQUISITIONS. Since January 1, 1997, we have acquired eight
domestic and international short line and regional freight railroads,
comprising approximately 7,600 miles of rail lines. We completed the following
four acquisitions in 1999:
o in April 1999, we acquired the business of V/Line Freight
Corporation, the freight railroad of Australia's Victorian
Government, with approximately 3,150 miles of rail lines in
Australia, for total consideration of $103 million; we operate
this business through our wholly owned subsidiary, Freight
Victoria Limited;
o in July 1999, we acquired RaiLink Ltd., the third largest freight
rail system in Canada; it owns or operates approximately 1,620
miles of rail lines and has an approximately 26% interest in a
railroad company operating another 740 miles; the aggregate
purchase price was $71 million, including the repayment of debt;
o in September 1999, we acquired The Toledo, Peoria and Western
Railroad Corporation, a regional freight railroad with 369 miles
of rail lines in the central United States, for an aggregate
purchase price of $18 million, including the assumption of debt
and subject to closing adjustments; and
o in January 1999, we acquired the Esquimalt and Nanaimo Railroad,
a 181 mile rail line in British Columbia, Canada, which operates
as E&N Railway Corporation, for an aggregate purchase price of
$11 million.
ACQUISITION OPPORTUNITIES. We plan to continue to expand our rail
operations through selective acquisitions of rail properties.
o In North America, we plan to continue to acquire short line and
regional railroads; we believe they may become available as a
result of (1) sales by other short line and regional owners and
operators, (2) divestitures resulting from the consolidation of
larger owners and operators, and (3) rationalizations and
divestitures by Class I carriers;
o Outside North America, we plan to acquire regional railroads that
become available primarily as a result of governmental
privatizations, either alone or through joint ventures with local
partners familiar with market conditions in the region.
OUR TRUCK TRAILER MANUFACTURING OPERATIONS
While we expect our core business to continue to be the acquisition
and operation of domestic and international railroads, we intend to maintain
our position as a leading manufacturer of specialized truck trailers through
our wholly-owned subsidiary, Kalyn/Siebert L.P. Kalyn manufactures specialty
and custom truck trailers for U.S. governmental and commercial customers.
Kalyn's profit margins typically exceed those of manufacturers of commodity or
stock trailers because its trailers are designed, built or modified to meet
customer specifications. This allows greater pricing flexibility and reduced
inventory requirements. Our trailer manufacturing operations generated
approximately $39.9 million in revenue in 1998 and $22.9 million in revenue for
the six months ended June 30, 1999. These results include Kalyn's January 1998
acquisition of a Canadian trailer manufacturer of lightweight aluminum
specialty bulk-handling trailers used in the solid waste, agricultural and
construction industries.
CORPORATE INFORMATION
We are a Delaware corporation with our principal executive offices
located at 5300 Broken Sound Boulevard, N.W., Boca Raton, Florida 33487. Our
telephone number is (561) 994-6015.
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RISK FACTORS
You should carefully consider the following risks before making an
investment decision. If any of the following risks occurs, our business,
financial condition or results of operations could be adversely affected. In
that case, the trading price of our common stock could decline, and you might
lose all or part of your investment.
BECAUSE OUR GROWTH STRATEGY IS LARGELY DEPENDENT ON ACQUISITIONS, IF WE ARE
UNABLE TO ACQUIRE BUSINESSES ON FAVORABLE TERMS OR SUCCESSFULLY INTEGRATE AND
MANAGE THE BUSINESSES WE ACQUIRE, OUR BUSINESS AND FINANCIAL RESULTS WILL BE
ADVERSELY AFFECTED.
We have experienced significant growth through acquisitions.
Acquisitions result in greater administrative burdens and operating costs and,
to the extent financed with debt, additional interest costs.
Acquisitions also involve a number of other risks, including the following:
o diversion of management's attention to the assimilation of operations
and personnel of the acquired companies;
o possible adverse short-term effects on our operating results; and
o to the extent financed by the sale of equity securities, potential per
share dilution to existing stockholders.
o difficulty in integrating acquired companies into our management
information and financial reporting systems;
Additionally, there can be no assurance that we will be able to find,
finance and complete suitable acquisitions on terms acceptable to us or that
the businesses acquired can be operated profitably.
WE HAVE SUBSTANTIAL DEBT AND DEBT SERVICE REQUIREMENTS WHICH COULD HAVE ADVERSE
CONSEQUENCES ON OUR BUSINESS.
As of June 30, 1999, on a pro forma basis after giving effect to our
recent acquisitions, our total debt was approximately $280 million. Our
substantial debt could have adverse consequences on our business, including the
following:
o our ability to borrow additional amounts for acquisitions, working
capital, capital expenditures and other purposes may be limited or
financing may not be available on terms favorable to us or at all; and
o a substantial portion of our cash flows from operations may be used to
pay our interest expense, pay our preferred stock dividends and repay
our debt, which would reduce the funds that would otherwise be
available to us for our operations and future business opportunities.
WE MAY INCUR ADDITIONAL INDEBTEDNESS IN THE FUTURE, WHICH COULD ADVERSELY
AFFECT OUR FINANCIAL CONDITION.
If new debt is added to our current debt levels, the risks discussed
above could intensify. Our substantial degree of leverage may limit our ability
to adjust to changing market conditions, reduce our ability to withstand
competitive pressures and make us more vulnerable to a downturn in general
economic conditions or in our business. We expect to continue to incur
significant levels of additional debt in connection with future acquisitions.
Additionally, we could incur substantial additional indebtedness in the future
for other reasons.
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IF WE DO NOT SUCCESSFULLY IMPLEMENT OUR BUSINESS STRATEGY, WE MAY NOT BE ABLE
TO REPAY OR REFINANCE OUR CURRENT DEBT.
We may not be able to successfully implement our strategy or realize
our anticipated financial results. Accordingly, our cash flows and capital
resources may not be sufficient to pay our interest expense, pay our preferred
stock dividends and repay our debt. Failure to pay our interest expense would
result in a default. A default, if not waived, could result in acceleration of
our indebtedness, in which case the debt would become immediately due and
payable. If this occurs, we may be forced to reduce or delay capital
expenditures and implementation of our business strategy, sell assets, obtain
additional equity capital or refinance or restructure all or a portion of our
outstanding debt. In the event that we are unable to do so, we may be left
without sufficient liquidity and we may not be able to repay our debt and the
lenders will be able to foreclose on our assets. Even if new financing is
available, it may not be on terms that are acceptable to us.
OUR DEBT AGREEMENTS CONTAIN COVENANTS THAT SIGNIFICANTLY RESTRICT OUR
OPERATIONS.
Our current debt agreements contain a number of covenants imposing
significant financial and operating restrictions on our business. These
covenants limit our ability to, among other things:
o incur more debt;
o pay dividends, redeem or repurchase our stock or make other
distributions;
o make acquisitions or investments;
o use assets as security in other transactions;
o enter into transactions with affiliates;
o merge or consolidate with others;
o dispose of assets or asset sale proceeds;
o create liens on our assets; and
o extend credit.
In addition, our debt agreements require us to maintain specified
financial ratios. We cannot assure you that we will meet those ratios. Our
ability to meet these and other provisions of our existing indebtedness can be
affected by events beyond our control. A breach of any of these covenants could
result in a default, with the consequences described in the preceding
paragraph. Compliance with these restrictions may prevent us from raising funds
to service our debt and our preferred stock obligations.
WE FACE COMPETITION FROM OTHER MODES OF TRANSPORTATION AND FROM OTHER RAIL
OPERATORS.
Our primary source of competition in our rail operations comes from
trucks. While we must build or acquire and maintain our rail system, trucks are
able to use public roadways. Any future expenditures materially increasing the
roadway system in the locations in which we operate, or legislation granting
materially greater latitude for trucks with respect to size or weight
limitations, could have a material adverse effect on our results of operations
and financial condition.
In addition, we compete for acquisitions with other rail operators.
Some of these competitors are larger and have significantly greater resources
than we do and may possess greater local market knowledge as well.
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The truck trailer manufacturing industry is highly competitive and has
relatively low barriers to entry. Kalyn competes with a number of other trailer
manufacturers, some of which are larger and have greater financial resources
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 for existing or potential
customers or with alternative forms of shipping containers.
OUR BUSINESS MAY BE ADVERSELY AFFECTED BY NEGATIVE CONDITIONS IN THE
AGRICULTURAL INDUSTRY BECAUSE A SUBSTANTIAL PORTION OF OUR RAILROAD TRAFFIC
CONSISTS OF AGRICULTURAL COMMODITIES.
Factors that negatively affect the agricultural industry in the
regions in which we operate could have a material adverse effect on our results
of operations and financial condition. These factors include weather
conditions, export and domestic demand and total world supply, and fluctuations
in agricultural prices. We believe that agricultural commodities will continue
to represent a principal component of our rail traffic base in the near future.
WE ARE SUBJECT TO THE RISKS OF DOING BUSINESS IN FOREIGN COUNTRIES.
We have railroad operations in Australia, Chile and Canada. We may
also consider acquisitions in other foreign countries. The risks of doing
business in foreign countries include:
o adverse changes in the economy of those countries;
o adverse effects of currency exchange controls;
o restrictions on the withdrawal of foreign investment and earnings;
o government policies against ownership of businesses by non-nationals;
and
o the potential instability of foreign governments.
Our operations in foreign countries are also subject to economic
uncertainties, including among others, risk of renegotiation or modification of
existing agreements or arrangements with governmental authorities, exportation
and transportation tariffs, foreign exchange restrictions and changes in
taxation structure.
BECAUSE SOME OF OUR SIGNIFICANT SUBSIDIARIES TRANSACT BUSINESS IN FOREIGN
CURRENCIES, WE MAY BE ADVERSELY AFFECTED BY FUTURE EXCHANGE RATE FLUCTUATIONS.
While our operations are predominantly in U.S. dollars, some of our
significant subsidiaries transact business in foreign currencies, including the
Australian dollar, the Canadian dollar and the Chilean peso. Changes in the
relation of these and other currencies to the U.S. dollar could affect our
revenues and could result in exchange losses. The impact of future exchange
rate fluctuations on our results of operations cannot be accurately predicted.
We do not engage or intend to engage in hedging. However, if circumstances
change, we may seek to limit our exposure to the risk of currency fluctuations
by engaging in hedging or other transactions. These transactions could expose
us to substantial risk of loss. We cannot assure you that we will successfully
manage our exposure to currency fluctuations.
YEAR 2000 COMPLICATIONS MAY DISRUPT OUR OPERATIONS AND HARM OUR BUSINESS.
Some of the software and hardware products which we use in our
international operations may not be Year 2000 compliant. This could result in a
system failure or miscalculations causing disruptions of operations, including,
among other things, a temporary inability to process transactions and
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interchange information with connecting railroads or engage in similar normal
business activities. We have commenced projects to develop and implement new
systems to replace those non-compliant products; however, some of these
projects may not be completed prior to December 31, 1999.
We also rely on customers and other third parties who provide services
or access to infrastructure in our railroad and manufacturing operations. We
have initiated efforts to evaluate the status of these third parties' efforts
and to determine alternatives and contingency plan requirements. An inability
of a connecting railroad to process information could cause delays in services
to customers and could adversely affect our ability to invoice and collect on
shipments. Failure of a third party supplier to deliver materials to our
trailer manufacturing facilities could cause either a slowdown in production or
a temporary shutdown of the facility.
The failure to correct a material Year 2000 problem could result in an
interruption in, or failure of, some of our normal business activities or
operations. These failures could materially and adversely affect our results of
operations, liquidity and financial condition. Due to the general uncertainty
inherent in the Year 2000 problem, resulting in part from the uncertainty of
the Year 2000 readiness of our customers and third party suppliers, we are
unable to determine at this time whether the consequences of Year 2000 failures
will have a material impact on our results of operations, liquidity or
financial condition.
WE ARE SUBJECT TO SIGNIFICANT GOVERNMENTAL REGULATION OF OUR RAILROAD AND
MANUFACTURING OPERATIONS AND THE FAILURE TO COMPLY WITH THESE REGULATIONS COULD
HAVE A MATERIAL ADVERSE EFFECT ON US.
We are subject to governmental regulation by a number of foreign,
federal, state and local regulatory authorities with respect to our railroad
and manufacturing operations, the rates we charge and a variety of health,
safety, labor, environmental and other matters. Governments may change the
legislative framework within which we operate without providing us with any
recourse for any adverse effects that the change may have on our business.
Also, some of the regulations require us to obtain and maintain various
licenses, permits and other authorizations and we cannot be sure that we will
continue to be able to do so.
Additionally, in Australia, where a significant portion of our
operations are located, the applicable legislative framework enables third
party rail operators to gain access to the railway infrastructure on which we
operate. As part of this regime, we have executed, and we may be required to
execute access agreements governing access to the railway infrastructure. We
may be required to make significant expenditures and to incur significant
expenses in order to comply with the applicable regulatory framework and these
access agreements.
WE MAY BE REQUIRED TO PAY PENALTY FEES UNDER SOME CIRCUMSTANCES TO A THIRD
PARTY RAIL OPERATOR THAT HAS ACCESS TO THE AUSTRALIAN RAILWAYS.
An access agreements with a third party rail operator in Australia contains
penalty provisions if trains using the railway infrastructure are delayed,
early or cancelled under a variety of circumstances. The formulas for
calculation of the penalty are complex. The penalties apply unless the penalty
event is primarily due to force majeure, which includes events such as natural
disasters, war, changes in applicable laws, power shortages and Year 2000
events. We cannot assure you that we will not incur significant penalties under
the Australian access agreement.
WE COULD INCUR SIGNIFICANT COSTS FOR VIOLATIONS OF APPLICABLE ENVIRONMENTAL
LAWS AND REGULATIONS.
Our railroad and manufacturing operations and real estate ownership
are subject to extensive foreign, federal, state and local environmental laws
and regulations concerning, among other things, emissions to the air,
discharges to waters, and the handling, storage, transportation and disposal of
waste and other materials. We may be subject to allegations or findings to the
effect that we have violated these laws or regulations. We could incur
significant costs as a result. We may be required to incur significant expenses
to remediate this contamination. Some reports prepared in connection with the
recent acquisitions of the business of V/Line Freight Corporation and The
Toledo, Peoria and Western Railroad Corporation identified a number of
contaminated sites on the properties leased or licensed to us, which we may be
required to remediate.
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BECAUSE WE DEPEND ON CLASS I CARRIERS FOR OUR NORTH AMERICAN OPERATIONS, OUR
BUSINESS AND FINANCIAL RESULTS MAY BE ADVERSELY AFFECTED IF OUR RELATIONSHIPS
WITH THEM DETERIORATE.
The railroad industry in the United States and Canada is dominated by
a small number of Class I carriers that have substantial market control and
negotiating leverage. Almost all of the traffic on our North American railroads
is interchanged with Class I carriers. A decision by any of these Class I
carriers to discontinue transporting commodities or to use alternate modes of
transportation, such as motor carriers, could have a material adverse effect on
our business and results of operations. Our ability to provide rail service to
our customers in North America depends in large part upon our ability to
maintain cooperative relationships with Class I carriers with respect to, among
other matters, freight rates, car supply, reciprocal switching, interchange and
trackage rights. A deterioration in the operations of or service provided by
those interchange partners, or in our relationship with our interchange
partners, would adversely affect our business. In addition, much of the freight
transported by our railroads in North America moves on railcars supplied by
Class I carriers. If the number of railcars supplied by Class I carriers is
insufficient, we might not be able to obtain replacement railcars on favorable
terms and shippers may seek alternative forms of transportation.
Portions of our North American rail properties are operated under
leases, operating agreements or trackage rights agreements with Class I
carriers. Failure of our railroads to comply with these leases and agreements
in all material respects could result in the loss of operating rights with
respect to these rail properties, which would adversely affect our results of
operations and financial condition. In addition, traditionally Class I carriers
also have been significant sources of business for us, as well as sources of
potential acquisition candidates as they continue to divest themselves of
branch lines to smaller rail operators. Because we depend on Class I carriers
for our North American operations, our business and financial results may be
adversely affected if our relationships with them deteriorate.
BECAUSE OUR TRAILER MANUFACTURING OPERATIONS DEPEND ON GOVERNMENT PURCHASES,
OUR BUSINESS MAY BE ADVERSELY AFFECTED IF ORDERS PLACED BY GOVERNMENT ENTITIES
DECREASE.
For the years ended December 31, 1997 and 1998, approximately 37% and
35%, respectively, of Kalyn's revenue was derived from sales of truck trailers
to U.S. governmental customers. For the six months ended June 30, 1999,
approximately 29% of Kalyn's revenue was derived from sales to these customers.
The majority of these sales are to the General Services Administration ("GSA"),
the purchasing arm of non-military agencies, and to the United States Tank
Automotive Command ("TACOM"), a Department of Defense unit established to
consolidate purchases for various branches of the military. We cannot assure
you that there will not be a substantial decrease in orders for new trailers
placed by the GSA or TACOM which may be caused by budget reductions or
otherwise.
BECAUSE THE INDUSTRY DEMAND FOR TRUCK TRAILERS IS CYCLICAL, FUTURE ECONOMIC
DOWNTURNS OR CYCLICAL DECREASES IN DEMAND FOR TRUCK TRAILERS MAY HAVE A
MATERIAL ADVERSE EFFECT ON OUR BUSINESS.
Unit sales of new truck trailers have historically been subject to
substantial variation. Sales of new truck trailers have historically been
subject to a five- to seven-year replacement cycle. Additionally, periods of
economic recession in the United States have previously resulted in declines in
the profitability of the trucking industry. Future decreases in the demand for
truck trailers due to economic downturns or cyclical decreases would likely
have a material adverse effect on our business and results of operations.
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A LONG-TERM INTERRUPTION IN THE OPERATION OF OUR PLANTS FROM A NATURAL DISASTER
OR OTHER CAUSES, WHETHER OR NOT COVERED BY INSURANCE, COULD HAVE A MATERIAL
ADVERSE EFFECT ON OUR BUSINESS AND RESULTS OF OPERATIONS.
Our trailer manufacturing operations consist of two facilities in Texas
and Canada which operate at approximately 80% and 50% of their respective
capacities. Although we believe that our manufacturing capacity could be
increased through the expansion of our manufacturing facilities or the addition
of a partial second work shift, these capacity increases would increase the
marginal cost of producing truck trailers. Sustained growth of production and,
in turn, net sales of our manufacturing operations are dependent on our ability
to increase production efficiency. In the years ended December 31, 1996, 1997
and 1998, sales from our trailer manufacturing operations accounted for 53%, 48%
and 52%, respectively, of our total revenue. For the six months ended June 30,
1999 on a pro forma basis after giving effect to our recent acquisitions,
however, sales from our trailer manufacturing operations accounted for only 19%
of our total revenue. A long-term interruption in the operation of our plants
from a natural disaster or other causes, whether or not covered by insurance,
could have a material adverse effect on our business and results of operations.
SOME OF OUR EMPLOYEES BELONG TO LABOR UNIONS AND STRIKES OR WORK STOPPAGES
COULD ADVERSELY AFFECT OUR OPERATIONS.
We are a party to collective bargaining agreements with various labor
unions in the United States, Australia, Chile and Canada. Our inability to
negotiate acceptable contracts with these unions could result in, among other
things, strikes, work stoppages or other slowdowns by the affected workers. If
the unionized workers were to engage in a strike, work stoppage or other
slowdown, or other employees were to become unionized, we could experience a
significant disruption of our operations and higher ongoing labor costs.
WE MAY FACE LIABILITY FOR CASUALTY LOSSES THAT ARE NOT COVERED BY INSURANCE.
We have obtained insurance coverage for losses arising from personal
injury and for property damage in the event of derailments or other accidents
or occurrences. There could be losses or other liabilities that are not covered
by insurance. In addition, under catastrophic circumstances our liability could
exceed our insurance limits. Insurance is available from a limited number of
insurers and there can be no assurance that insurance protection at our current
levels will continue to be available or, if available, will be obtainable on
terms acceptable to us.
THERE ARE MANY SHARES OF OUR COMMON STOCK ELIGIBLE FOR FUTURE SALE WHICH MAY
CAUSE THE MARKET PRICE OF OUR COMMON STOCK TO DROP SIGNIFICANTLY, EVEN IF OUR
BUSINESS IS DOING WELL.
The possibility that substantial amounts of our common stock may be
issued or freely resold in the public market may adversely affect prevailing
market prices for our common stock, even if our business is doing well. As of
September 17, 1999, we had 11,673,485 shares of common stock issued and
outstanding and approximately 8.3 million shares of common stock reserved for
issuance.
Of the approximately 11.7 million shares of common stock issued and
outstanding, we believe that approximately 9.9 million of the shares are
freely tradable without restriction or further registration under the
Securities Act, excluding any shares held or purchased by one of our
"affiliates" (in general, a person who has a control relationship with us). We
believe the approximately 1.8 million shares of common stock remaining are
"restricted securities", as that term is defined under Rule 144 promulgated
under the Securities Act, and may be resold thereafter in compliance with Rule
144.
In general, under Rule 144, a person (or persons whose shares are
aggregated) including an affiliate, who has beneficially owned those shares for
one year, may sell in the open market within any three-month period a number of
shares that does not exceed the greater of (i) 1% of the then outstanding
shares of our common stock or (ii) the average weekly trading volume in our
common stock on The Nasdaq National Market during the four calendar weeks
preceding such sale. Sales under Rule 144 are also subject to certain
limitations on the manner of sale, notice requirements and availability of
current public information about us. A person (or persons whose shares are
aggregated) who is deemed not to have been an "affiliate" of ours at any time
during the 90 days preceding a sale by that person and who has beneficially
owned his shares for at least two years, will be able to sell his shares in the
public market under Rule 144(k) without regard to the volume limitations,
manner of sale provisions, notice requirements or availability of current
information referred to above. Restricted shares properly sold in reliance upon
Rule 144 are thereafter freely tradeable without restrictions or registration
under the Securities Act, unless thereafter held by an "affiliate" of ours.
8
<PAGE> 11
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of any of the
securities being offered by the selling shareholders under this prospectus.
Expenses expected to be incurred by us in connection with this
offering are estimated to be approximately $50,000.
SELLING SHAREHOLDERS
Of the 3,130,907 shares of our common stock offered by this prospectus,
(1) 2,254,544 are issuable upon the conversion of our 6% Junior Convertible
Subordinated Debentures, issued in connection with the private placement we
completed in August 1999, (2) 676,363 are issuable upon the exercise of
warrants, issued in connection with the August 1999 private placement, at an
exercise price of $10.50 per share, and (3) 200,000 shares are issuable to
Stonegate Securities, Inc., or its permitted assignees, upon the exercise of
warrants we issued to Stonegate Securities, Inc. in connection with its
corporate finance consulting and financial advisory services performed on our
behalf, at an exercise price of $10.50 per share.
None of the selling shareholders listed below have been officers,
directors, or employees of ours, nor have they had a material relationship with
us beyond their investment in, or receipt of, our securities.
The following table sets forth certain information with respect to (1)
in column one, the amount of shares of our common stock that are beneficially
owned by the named selling shareholders (not including the shares of common
stock being offered hereby), (2) in column two, the number of shares of our
common stock that would beneficially be owned by the named selling shareholders
upon conversion of their respective 6% Junior Convertible Subordinated
Debentures, and (3) in column three, the number of shares of our common stock
that would beneficially be owned by the named selling shareholders upon
exercise of warrants, as applicable. The percentages listed below are adjusted
to reflect the sale of the shares of common stock offered. The following table
assumes that each of the selling shareholders: (i) converts all of its 6%
Junior Convertible Subordinated Debentures into common stock and exercises all
of its warrants as applicable; and (ii) sells all of its converted or exercised
shares of common stock registered under this prospectus, as applicable.
<TABLE>
<CAPTION>
OWNERSHIP OF SHARES OF
COMMON STOCK PRIOR TO OFFERING
--------------------------------------------- NUMBER OF OWNERSHIP OF
6% JUNIOR SHARES OF SHARES OF COMMON
CONVERTIBLE COMMON STOCK AFTER OFFERING**
COMMON SUBORDINATED STOCK ----------------------
SELLING SHAREHOLDER SHARES DEBENTURES WARRANTS PERCENTAGE OFFERED SHARES PERCENTAGE
------------------- ------- ------------ -------- ---------- --------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
ABN AMRO Incorporated, Cust. FBO
Delbert Henry Lutz............ 0 10,000 3,000 * 13,000 0 *
Charles R. Adams................ 5,000 10,000 3,000 * 18,000 5,000 *
Apogee Fund, L.P................ 0 50,000 15,000 * 65,000 0 *
Lee & Ramona Bass Foundation.... 0 25,000 7,500 * 32,500 0 *
G. Nicholas Beckwith III........ 0 10,000 3,000 * 13,000 0 *
James S. Beckwith III........... 0 10,000 3,000 * 13,000 0 *
Bennie M. Bray.................. 0 100,000 30,000 1.1% 130,000 0 *
Kathleen Cafaro................. 0 4,794 1,438 * 6,232 0 *
William R. Cline, Jr............ 0 2,500 750 * 32,750 0 *
Cohanzick Partners, LP.......... 0 30,000 9,000 * 39,000 0 *
Stanley Cohen................... 0 10,000 3,000 * 13,000 0 *
</TABLE>
9
<PAGE> 12
<TABLE>
<CAPTION>
OWNERSHIP OF SHARES OF
COMMON STOCK PRIOR TO OFFERING
--------------------------------------------- NUMBER OF OWNERSHIP OF
6% JUNIOR SHARES OF SHARES OF COMMON
CONVERTIBLE COMMON STOCK AFTER OFFERING**
COMMON SUBORDINATED STOCK ----------------------
SELLING SHAREHOLDER SHARES DEBENTURES WARRANTS PERCENTAGE OFFERED SHARES PERCENTAGE
------------------- ------- ------------ -------- ---------- --------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Combined Master Retirement
Trust, c/o Valhi.............. 0 50,000 15,000 * 65,000 0 *
Compass Bank CSDN FBO
Renaissance Capital Growth &
Income Fund III, Inc.......... 0 50,000 15,000 * 65,000 0 *
Compass Bank CSDN FBO
Renaissance US Growth & Income
Trust PLC..................... 0 50,000 15,000 * 65,000 0 *
Gerald B. Cramer................ 0 25,000 7,500 * 32,500 0 *
Cramer Rosenthal McGlynn, LLC... 0 6,500 1,950 * 8,450 0 *
CRM 1998 Enterprise Fund, LLC... 0 40,000 12,000 * 52,000 0 *
CRM 1999 Enterprise Fund, LLC... 0 40,000 12,000 * 52,000 0 *
CRM 20/20 Fund, LLC............. 0 25,000 7,500 * 32,500 0 *
CRM Madison Partners, LP........ 0 36,500 10,950 * 46,950 0 *
CRM Partners, LP................ 0 92,500 27,750 * 120,250 0 *
CRM Retirement Partners LP...... 0 71,000 21,300 * 92,300 0 *
Michael J. Doorey and Deborah
Doorey........................ 0 10,000 3,000 * 13,000 0 *
Duck Partners, L.P.............. 0 15,000 4,500 * 19,500 0 *
EBS Microcap Partners, L.P...... 36,453 10,000 3,000 * 13,000 36,453 *
Lucia A. Englander.............. 12,121 10,000 3,000 * 13,000 12,121 *
James Ferguson.................. 0 10,000 3,000 * 13,000 0 *
Fred M. Filoon.................. 0 5,000 1,500 * 6,500 0 *
Stanford C. Finney, Jr.......... 0 16,000 4,800 * 20,800 0 *
Forest Alternative Strategies
Fund II LP Series A 5I........ 0 7,500 2,250 * 9,750 0 *
Forest Alternative Strategies
Fund II LP Series A 5M........ 0 2,500 750 * 3,250 0 *
Forest Fulcrum Fund L.P......... 0 60,000 18,000 * 78,000 0 *
Forest Global Convertible Fund
Series A5..................... 0 125,000 37,500 1.4% 162,500 0 *
Frorer Partners, L.P............ 0 50,000 15,000 * 65,000 0 *
Francisco A. Garcia............. 0 3,500 1,050 * 4,550 0 *
Harvey Gelfenbein............... 0 10,000 3,000 * 13,000 0 *
401K Profit Sharing Plan FBO
Scott R. Griffith............. 0 2,500 750 * 3,250 0 *
Delaware Charter Trustee FBO 0
Scott R. Griffith, IRA........ 2,500 750 * 3,250 0 *
Gryphon Partners, L.P........... 0 40,000 12,000 * 52,000 0 *
Bernard J. Haasch and Gwen A.
Haasch........................ 0 10,000 3,000 * 13,000 0 *
</TABLE>
10
<PAGE> 13
<TABLE>
<CAPTION>
OWNERSHIP OF SHARES OF
COMMON STOCK PRIOR TO OFFERING
--------------------------------------------- NUMBER OF OWNERSHIP OF
6% JUNIOR SHARES OF SHARES OF COMMON
CONVERTIBLE COMMON STOCK AFTER OFFERING**
COMMON SUBORDINATED STOCK ----------------------
SELLING SHAREHOLDER SHARES DEBENTURES WARRANTS PERCENTAGE OFFERED SHARES PERCENTAGE
------------------- ------- ------------ -------- ---------- --------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Lawrence R. Herkimer............ 0 10,000 3,000 * 13,000 0 *
Ronald B. Herman Ltd. Partnership 0 7,500 2,250 * 9,750 0 *
John R. Howie................... 0 10,000 3,000 * 13,000 0 *
Delaware Charter FBO Garry W.
Hoyt IRA...................... 0 2,000 600 * 2,600 0 *
Richard T. Groos Trust.......... 12,121 10,000 3,000 * 13,000 12,121 *
Mark Gulis and Cynthia Gulis.... 0 3,000 900 * 3,900 0 *
Hull Overseas, Ltd.............. 24,242 20,000 6,000 * 26,000 24,242 *
Ingelside Company............... 0 25,000 7,500 * 32,500 0 *
Lena Khatcherian................ 0 1,500 450 * 1,950 0 *
Jay B. Langner.................. 0 10,000 3,000 * 13,000 0 *
Bailey Anne Lemak UGMA/TX John
S. Lemak Custodian............ 0 2,500 750 * 3,250 0 *
Eleanor J. Lemak UGMA/TX John S.
Lemak Custodian............... 0 2,500 750 * 3,250 0 *
John S. Lemak................... 11,500 10,000 3,000 * 13,000 11,500 *
John S. Lemak, Jr. UGMA/TX John
S. Lemak Custodian............ 0 2,500 750 * 3,250 0 *
Lacey Elizabeth Lemak UGMA/TX
John S. Lemak Custodian....... 0 2,500 750 * 3,250 0 *
LKCM Investment Partnership..... 132,250 50,000 15,000 1.5% 65,000 132,250 1.0%
LLT, Ltd........................ 0 5,000 1,500 * 6,500 0 *
N. Martin Co. Acting for
Nicholas Martin Jr. Living
Trust......................... 0 5,000 1,500 * 6,500 0 *
Nicholas Martin Jr. Living Trust 0 5,000 1,500 * 6,500 0 *
Sergio Mazza.................... 0 10,000 3,000 * 13,000 0 *
Ronald H. McGlynn............... 0 10,000 3,000 * 13,000 0 *
Montrose Investments Ltd........ 0 260,000 78,000 2.8% 338,000 0 *
Clement C. Moore II............. 0 10,000 3,000 * 13,000 0 *
Gregory E. Motlow............... 0 5,000 1,500 * 6,500 0 *
Delaware Charter Trustee FBO
Douglas D. Mulder IRA Acct.... 0 10,000 3,000 * 13,000 0 *
Noble Foundation................ 0 50,000 15,000 * 65,000 0 *
Pamela Equities Corp............ 0 10,000 3,000 * 13,000 0 *
Allan P. Peterson and Gayle K.
Peterson...................... 0 5,000 1,500 * 6,500 0 *
Rainbow Futures Partners........ 0 16,000 4,800 * 20,800 0 *
Rainbow Investors............... 0 16,000 4,800 * 20,800 0 *
Rainbow Trading Corporation..... 0 16,000 4,800 * 20,800 0 *
Rainbow Trading Systems, Inc.... 0 16,000 4,800 * 20,800 0 *
</TABLE>
11
<PAGE> 14
<TABLE>
<CAPTION>
OWNERSHIP OF SHARES OF
COMMON STOCK PRIOR TO OFFERING
--------------------------------------------- NUMBER OF OWNERSHIP OF
6% JUNIOR SHARES OF SHARES OF COMMON
CONVERTIBLE COMMON STOCK AFTER OFFERING**
COMMON SUBORDINATED STOCK ----------------------
SELLING SHAREHOLDER SHARES DEBENTURES WARRANTS PERCENTAGE OFFERED SHARES PERCENTAGE
------------------- ------- ------------ -------- ---------- --------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Rainbow Trading Venture Partners
L.P........................... 0 20,000 6,000 * 26,000 0 *
Sid Richardson Foundation....... 0 100,000 30,000 1.1% 130,000 0 *
Rosenthal Family Partnership.... 0 5,000 1,500 * 6,500 0 *
RoVest Partners................. 0 5,000 1,500 * 6,500 0 *
Peter J. Rozema................. 0 7,500 2,250 * 9,750 0 *
Victor E. Salvino............... 25,242 20,000 6,000 * 26,000 25,242 *
Craig and Mary Jo Sanford....... 0 10,000 3,000 * 13,000 0 *
SCAT Capital.................... 0 10,000 3,000 * 13,000 0 *
Sidney Singer................... 0 5,000 1,500 * 6,500 0 *
Peter P. Smith.................. 11,500 10,000 3,000 * 13,000 11,500 *
Stonegate Securities, Inc....... 0 0 200,000 1.7% 200,000 0 *
John L. Strauss................. 0 100,000 30,000 1.1% 130,000 0 *
John L. Strauss, Trustee FBO
Cheryl M. Strauss............. 0 2,000 600 * 2,600 0 *
John L. Strauss, Trustee FBO
Eric J. Strauss............... 0 2,000 600 * 2,600 0 *
John L. Strauss, Trustee FBO
Julie S. Stanton.............. 0 2,000 600 * 2,600 0 *
Patricia J. Thames and Willis W.
Thames II..................... 0 10,000 3,000 * 13,000 0 *
The FM Grandchildren's Trust.... 0 5,000 1,500 * 6,500 0 *
Jeffrey Thorp................... 17,250 35,000 10,500 * 45,500 17,250 *
Westover Investments L.P........ 0 140,000 42,000 1.5% 182,000 0 *
Barry A. Wohl and Dahlia R.
Hirsch........................ 0 4,750 1,425 * 6,175 0 *
WOW Associates Ltd.............. 0 5,000 1,500 * 6,500 0 *
</TABLE>
- --------------------
* Indicates less than 1%
** Assumes all of the shares of common stock registered hereby are sold.
12
<PAGE> 15
PLAN OF DISTRIBUTION
GENERAL
TRANSACTIONS. The selling shareholders may offer and sell their shares
of common stock in one or more of the following transactions:
o on the Nasdaq National Market,
o in the over-the-counter market,
o in negotiated transactions, or
o in a combination of any of these transactions.
PRICES. The selling shareholders may sell their shares of common stock
at any of the following prices:
o fixed prices which may be changed,
o market prices prevailing at the time of sale,
o prices related to prevailing market prices, or
o negotiated prices.
DIRECT SALES; AGENTS, DEALERS AND UNDERWRITERS. The selling
shareholders may effect transactions by selling the shares of common stock in
any of the following ways:
o directly to purchasers, or
o to or through agents, dealers or underwriters designated from time to
time.
Agents, dealers or underwriters may receive compensation in the form
of underwriting discounts, concessions or commissions from the selling
shareholders and/or the purchasers of shares for whom they act as agent or to
whom they sell as principals, or both. The selling shareholders and any agents,
dealers or underwriters that act in connection with the sale of shares might be
deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act, and any discount or commission received by them and any profit
on the resale of shares as principal might be deemed to be underwriting
discounts or commissions under the Securities Act.
SUPPLEMENTS. To the extent required, we will set forth in a supplement
to this prospectus filed with the SEC the number of shares to be sold, the
purchase price and public offering price, the name or names of any agent,
dealer or underwriter, and any applicable commissions or discounts with respect
to a particular offering.
STATE SECURITIES LAW. Under the securities laws of some states, the
selling shareholders may only sell the shares in those states through
registered or licensed brokers or dealers. In addition, in some states the
selling shareholders may not sell the shares unless they have been registered
or qualified for sale in that state or an exemption from registration or
qualification is available and is satisfied.
EXPENSES; INDEMNIFICATION. We will not receive any of the proceeds
from the sale of the shares of common stock sold by the selling shareholders
and will bear all expenses related to the registration of this offering but
will not pay for any underwriting commissions, fees or discounts, if any. We
will indemnify the selling shareholders against some civil liabilities,
including some liabilities which may arise under the Securities Act.
13
<PAGE> 16
LEGAL MATTERS
Greenberg Traurig, P.A., of Miami, Florida, has passed upon the
validity of the issuance of our shares of common stock offered in this
prospectus.
EXPERTS
The financial statements as of December 31, 1998 and 1997 and for the
three years in the period ended December 31, 1998, incorporated by reference
from our Annual Report on Form 10-K in this prospectus have been audited by
PricewaterhouseCoopers LLP, independent public accountants, as set forth in
their reports. In those reports, that firm states that with respect to Empresa
De Transporte Ferroviario S.A., its opinion is based on the reports of other
independent accountants, namely Arthur Andersen-Langton Clarke, a member firm of
Andersen Worldwide SC. The financial statements referred to above have been
included herein in reliance upon the authority of those firms as experts in
giving said reports.
The financial statements of V/Line Freight Corporation as of June 30,
1998 and for the year then ended, incorporated into this prospectus by reference
from our Current Report on Form 8-K/A, filed with the SEC on July 16, 1999, have
been so incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
audited and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and
other information with the SEC. You may read and copy any document that we file
at the Public Reference Room of the SEC at 450 Fifth Street, N.W., Washington,
D.C. 20549. You may also inspect our filings at the regional offices of the SEC
located at 7 World Trade Center, New York, New York 10048 and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Please call the
SEC at 1-800-SEC-0330 for further information on the operation of the public
reference rooms. Our SEC filings are also available to the public at the SEC's
web site at http://www.sec.gov. You can also inspect reports and other
information we file at the offices of The Nasdaq Stock Market, Inc., 1735 K
Street, Washington, D.C. 20006.
The SEC allows us to "incorporate by reference" some of the documents
that we file with it into this prospectus, which means:
o incorporated documents are considered part of this prospectus;
o we can disclose important information to you by referring you to those
documents; and
o information that we file with the SEC will automatically update and
supersede this incorporated information.
We incorporate by reference the documents listed below, which were
filed with the SEC under the Securities Exchange Act of 1934:
o our annual report on Form 10-K for the year ended December 31, 1998;
o our quarterly reports on Form 10-Q for the periods ended March 31,
1999 and June 30, 1999; and
o our current reports on Form 8-K dated May 17, 1999, August 6, 1999 and
September 20, 1999, each as subsequently amended.
14
<PAGE> 17
We also incorporate by reference each of the following documents that
we will file with the SEC after the date of this prospectus:
o any reports filed under Sections 13(a) and (c) of the Securities
Exchange Act;
o definitive proxy or information statements filed under Section 14 of
the Securities Exchange Act in connection with any subsequent
stockholders' meetings; and
o any reports filed under Section 15(d) of the Securities Exchange Act.
You should assume that the information appearing in this prospectus is
accurate as of the date of this prospectus only. Our business, financial
position and results of operations may have changed since that date. You may
request a copy of any filings referred to above (excluding exhibits), at no
cost, by contacting us at the following address:
RailAmerica, Inc.
5300 Broken Sound Boulevard, N.W.,
Boca Raton, Florida 33487
(561) 994-6015
Attn: Donald D. Redfearn, Secretary
15
<PAGE> 18
<TABLE>
<CAPTION>
======================================================================= ======================================================
<S> <C>
NO DEALER, SALES PERSON OR ANY OTHER PERSON IS AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN AS CONTAINED IN 3,130,907 SHARES
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY
US. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, BY ANY PERSON IN ANY JURISDICTION IN RAILAMERICA, INC.
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 COMMON STOCK
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF.
---------------
TABLE OF CONTENTS
PAGE
----
Prospectus Summary...........................................1
Risk Factors.................................................3
-------------------
Use of Proceeds..............................................9
PROSPECTUS
Selling Shareholders.........................................9
-------------------
Plan of Distribution........................................13
Legal Matters...............................................14
Experts.....................................................14
SEPTEMBER __, 1999
Where You Can Find More Information.........................14
======================================================================= ======================================================
</TABLE>
<PAGE> 19
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION(1)
The following table sets forth the costs and expenses (subject to
future contingencies) incurred or expected to be incurred by the Registrant in
connection with the offering. The Registrant has agreed to pay all the costs
and expenses of this offering.
Securities and Exchange Commission Registration Fee............... $ 8595
Accounting Fees and Expenses...................................... 15,000
Legal Fees and Expenses........................................... 20,000
Printing Expenses................................................. 6,000
Miscellaneous..................................................... 405
---------
Total.................................................... $ 50,000
=========
- ---------------------
(1) The amounts set forth above, except for the SEC fee, are in each case
estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant 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 Registrant's Amended and Restated Certificate of
Incorporation provides for indemnification of the Registrant'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.
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. In the event that a claim of
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-1
<PAGE> 20
ITEM 16. EXHIBITS
The following exhibits are included as part of this Registration
Statement:
EXHIBITS DESCRIPTION
-------- -----------
5.1 Opinion of Greenberg Traurig, P.A.
23.1 Consent of Greenberg Traurig, P.A. (contained in exhibit 5.1)
23.2 Consent of PricewaterhouseCoopers LLP (RailAmerica, Inc.)
23.3 Consent of Arthur Andersen Langton Clarke (Ferronor)
23.4 Consent of PricewaterhouseCoopers LLP (V/Line Freight Corporation)
24.1 Power of Attorney (filed with the signature page)
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from the
low or high end of the estimated maximum offering range be reflected in the
form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20% change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in the
registration statement;"
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purposes of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
II-2
<PAGE> 21
(4) If the registrant is a foreign private issuer, to file a
post-effective amendment to the registration statement to include any financial
statements required by Rule 3-19 of this chapter at the start of any delayed
offering or throughout a continuous offering. Financial statements and
information otherwise required by Section 10(a)(3) of the Act need not be
furnished, provided, that the registrant includes in the prospectus, by means
of a post-effective amendment, financial statements required pursuant to this
paragraph (a)(4) and other information necessary to ensure that all other
information in the prospectus is at least as current as the date of those
financial statements. Notwithstanding the foregoing, with respect to
registration statements on Form F-3, a post-effective amendment need not be
filed to include financial statements and information required by Section
10(a)(3) of the Act or Rule 3-19 of this chapter if such financial statements
and information are contained in periodic reports filed with or furnished to
the Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the Form
F-3.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act 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 Commission such
indemnification is against public policy as expressed in the Securities Act,
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
II-3
<PAGE> 22
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all 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 the City of Boca Raton, State of Florida, on the 20th day of
September, 1999.
RAILAMERICA, INC.
By: /s/ Gary O. Marino
-----------------------------------------------
Gary O. Marino
Chairman, Chief Executive Officer and President
(Duly Authorized Representative)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Gary O. Marino and Donald D. Redfearn,
and each of them, his true and lawful attorney-in-fact and agents, with full
power of substitution and resubstitution for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, including a
Registration Statement filed pursuant to Rule 462 under the Securities Act of
1933, as amended, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that each of said
attorneys-in-fact or his substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- -----
<S> <C> <C>
/s/ Gary O. Marino Chairman of the Board, Chief Executive September 20, 1999
- ---------------------------------------- Officer and President (Principal
Gary O. Marino Executive Officer and Chief Financial
Officer)
/s/ Donald D. Redfearn Executive Vice President, Secretary and September 20, 1999
- ---------------------------------------- Director
Donald D. Redfearn
/s/ John H. Marino Assistant Secretary and Director September 20, 1999
- ----------------------------------------
John H. Marino
/s/ Douglas R. Nichols Director September 20, 1999
- ----------------------------------------
Douglas R. Nichols
/s/ Richard Rampell Director September 20, 1999
- -------------------------------------------
Richard Rampell
/s/ Charles Swinburn Director September 20, 1999
- -------------------------------------------
Charles Swinburn
/s/ John M. Sullivan Director September 20, 1999
- ----------------------------------------
John M. Sullivan
</TABLE>
II-4
<PAGE> 1
EXHIBIT 5.1
GREENBERG TRAURIG, P.A.
SEPTEMBER 17, 1999
RailAmerica, Inc.
5300 Broken Sound Boulevard, N.W.
Boca Raton, Florida 33487
Ladies and Gentlemen:
We have acted as counsel for RailAmerica, Inc., a Delaware corporation
(the "Company"), in connection with the Company's Registration Statement on Form
S-3 (the "Registration Statement") being filed by the Company under the
Securities Act of 1933, as amended, with respect to 3,130,907 shares (the
"Shares") of the Company's common stock, par value $.001 per share (the "Common
Stock"), which may be disposed of from time to time by the selling shareholders
(the "Selling Shareholders") named therein. Of the shares of Common Stock
offered thereby, 2,254,544 are issuable to the Selling Shareholders, or their
permitted assignees, upon the conversion of the Company's 6% Junior Convertible
Subordinated Debentures (the "Debentures") issued in connection with the
Company's private placement completed in August 1999; 676,363 are issuable to
the Selling Shareholders, or their permitted assignees, upon exercise of
warrants issued in connection with the Company's August 1999 private placement;
and 200,000 are issuable to Stonegate Securities, Inc. ("Stonegate") or its
permitted assignees, upon the exercise of warrants issued to Stonegate in
connection with its placement agent services performed on behalf of the Company
(all of such warrants being referred to sometimes as the "Warrants").
In connection with the preparation of the Registration Statement and
this letter, we have examined, considered and relied upon the following
documents (collectively, the "Documents"): the letter agreement dated July 22,
1999, by and between Stonegate and the Company; the Debentures; the Warrants;
the Company's Certificate of Incorporation (as amended) as filed with the
Secretary of State of the State of Delaware; the Company's bylaws and corporate
minute book; and such other documents and 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 to be
sold by the Selling Shareholders pursuant to the Registration Statement have
been duly authorized and are, or when issued pursuant to the terms of the
Debentures and Warrants, as applicable, will be, validly issued and are, or
when issued in accordance with the terms thereof will be, 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.
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 "Legal
Matters" in the prospectus contained in the Registration Statement. In giving
<PAGE> 2
RailAmerica, Inc.
Page 2
such consent, we do not admit that we come within the category of persons whose
consent is required by Section 7 of the Securities Act of 1933, as amended, and
the rules and regulations thereunder.
Very truly yours,
GREENBERG TRAURIG, P.A.
By: /s/ Fern S. Watts
------------------------------
Fern S. Watts
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated March 12, 1999 relating to the
financial statements which appear in RailAmerica, Inc.'s Annual Report on Form
10-K for the year ended December 31, 1998. We also consent to the references to
us under the heading "Experts" in such Registration Statement.
PricewaterhouseCoopers LLP
Ft. Lauderdale, Florida
September 16, 1999
<PAGE> 1
EXHIBIT 23.3
September 20, 1999 Santiago, Chile
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-3 of our report dated March 12, 1999, on our audits of the financial
statements of Ferronor S.A. (a Chilean corporation and subsidiary of
RailAmerica) included in the RailAmerica, Inc. Form 10-K for the year ended
December 31, 1998.
Charles A. Bunce
Partner
ARTHUR ANDERSEN-LANGTON CLARKE
Santiago, Chile
<PAGE> 1
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated July 14, 1999 relating to the
financial statements of V/Line Freight Corporation as of June 30, 1998 and for
the year then ended, which appear in RailAmerica, Inc.'s Current Report on Form
8-K/A dated July 16, 1999. We also consent to the references to us under the
heading "Experts" in such Registration Statement.
PricewaterhouseCoopers LLP
Fort Lauderdale, Florida
September 16, 1999
