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As filed with the Securities and Exchange Commission on May 28, 1999
Registration No. 333-76771
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
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)
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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
(561) 994-6015
(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
(561) 994-6015
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code of Agent for Service)
Please send copies of all communications to:
FERN S. WATTS, ESQ.
GREENBERG TRAURIG, 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 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. [ ]
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PROPOSED PROPOSED
MAXIMUM MAXIMUM
AMOUNT TO BE AGGREGATE PRICE AGGREGATE AMOUNT OF
TITLE OF SHARES TO BE REGISTERED REGISTERED PER SHARE(3) OFFERING PRICE(3) REGISTRATION FEE(1)
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Common Stock, $.001 par value.......................... 4,326,617(2) $9.625 $41,643,689 $8,329
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(1) $3,551 of such fee was paid upon the initial filing of this registration
statement on April 22, 1999.
(2) Includes (i) 1,407,272 shares issuable upon conversion of the Registrant's
outstanding shares of Series A Convertible Redeemable Preferred Stock, (ii)
1,227,686 shares issuable upon the exercise of outstanding warrants and
(iii) 268,566 shares issuable upon the conversion of an outstanding
convertible note, together with such indeterminate number of shares as may
be issuable pursuant to the anti-dilution provisions contained therein and
8,057 shares of common stock that may be issued pursuant to the conversion
of interest payments of 6% per annum under the Company's convertible note.
(3) Estimated solely for the purposes of calculating the registration fee on the
basis of the average of the bid and ask prices of the Company's common stock
on May 27, 1999, as reported by the Nasdaq National Market.
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.
4,326,617 SHARES OF COMMON STOCK
The selling shareholders are offering 4,326,617 shares of our common
stock under this prospectus. Some of the selling shareholders may obtain their
shares of common stock upon conversion of shares of our Series A Convertible
Redeemable Preferred Stock purchased by them in our private placement completed
in January 1999, or upon the exercise of warrants purchased by them in our
private placement completed in March 1999. Other selling shareholders may obtain
their shares of common stock upon conversion of the principal amount and
interest on a convertible note or the exercise of warrants issued to them in
connection with other financing arrangements. Additionally, some of these shares
of common stock may be obtained upon exercise of warrants issued to our
placement agent in our January and March 1999 private placements.
Our common stock trades on the Nasdaq National Market under the symbol
"RAIL." On May 27, 1999, the closing sale price of one share of common stock
on the Nasdaq National Market was $9.625.
The selling shareholders may offer the shares through public or private
transactions, on or off the Nasdaq National Market, at prevailing market prices
or at privately negotiated prices. They may make sales directly to purchasers or
through agents, dealers or underwriters.
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YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS BEGINNING ON PAGE 4 IN
THIS PROSPECTUS.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is May __, 1999.
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THE COMPANY
THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION AND DOES NOT CONTAIN ALL
THE INFORMATION THAT IS IMPORTANT TO YOU. YOU SHOULD CAREFULLY READ THIS
PROSPECTUS AND THE DOCUMENTS WE HAVE REFERRED YOU TO IN "WHERE YOU CAN FIND MORE
INFORMATION" ON PAGE 16 FOR INFORMATION ABOUT OUR COMPANY AND OUR FINANCIAL
STATEMENTS.
We are a leading operator of short line freight railroads in North
America, based on total track miles, and an operator of major regional freight
railroads in Australia and the Republic of Chile. We have grown rapidly through
acquisitions since December 31, 1994, at which time we operated only 300 miles
of track. We currently operate over 5,600 miles of rail lines, with over 1,000
miles in North America, approximately 3,000 in Australia and over 1,400 miles in
Chile. Although our core business is the acquisition and operation of short line
and regional railroads, we are also a leading manufacturer of specialized truck
trailers through our wholly-owned subsidiary, Kalyn/Siebert, Inc. Our revenues
and net income increased to approximately $77.1 million and $4.4 million,
respectively, in the year ended December 31, 1998 from approximately $47.4
million and $1.9 million, respectively, in the year ended December 31, 1997 and
approximately $25.7 million and $504,000, respectively, in the year ended
December 31, 1996. Our revenues and net income for the quarter ended March 31,
1999 were $20.6 million and $1.2 million, respectively, as compared to $14.4
million and $0.6 million, respectively, in the same quarter for the previous
year.
We plan to continue to acquire short line railroads in North America
from Class I railroads and from other short line railroad operators, as well as
to examine opportunities to acquire regional railroads in North America. We also
continue to evaluate opportunities to acquire regional railroads in foreign
markets that are being privatized by foreign governments. Since industry
deregulation in 1980, major North American railroads have streamlined their
operations by systematically divesting themselves of branch lines to short line
rail operators that have advantageous cost structures mainly due to greater
labor flexibility associated with non-unionized work forces. The divestiture
activity has accelerated in recent years as a result of the consolidation among
Class I railroads, which has led to the disposition of redundant and
light-density routes. Similarly, an increasing number of foreign governments are
seeking to encourage private investment in infrastructure and stimulate economic
activity by privatizing their national rail systems through sale or by
concession to qualified operators.
We believe that we are well-positioned to take advantage of the
opportunities emerging in the international rail industry. We have developed a
disciplined acquisition evaluation program identifying rail properties that can
be acquired on attractive terms and that can be improved by the implementation
of our operating practices. These practices focus on raising customer service
levels, increasing rail traffic and reducing expenses. As a result, we have
achieved operating ratios that are significantly lower and internal traffic
growth rates that are significantly higher than those prevailing in the
industry. We believe that we have become a desirable partner for Class I
railroads as a result of our ability to pursue and consummate acquisitions
swiftly and increase traffic on lines that interchange with those of the
seller.
RECENT EVENTS
CANADIAN ACQUISITION
In May 1999, we entered into an agreement to commence, on or prior to
May 28, 1999, an all cash bid for all of the common shares of RaiLink, Ltd., at
a price of Cdn. $8.75 per share. The agreement is the result of RaiLink's
previously announced process to identify parties interested in pursuing a
transaction with such company to enhance shareholder value. RaiLink has
approximately 8.36 million common shares outstanding on a fully diluted basis,
giving the transaction a potential equity value of approximately Cdn. $73.2
million (U.S.$ 50.1 million).
RaiLink is a publicly traded regional railway company based in
Edmonton, Alberta and provides freight transportation services to the national
railways of Canada and to a wide variety of shippers. RaiLink and its 26.3%
owned affiliate, Quebec Railway Corporation, currently operate 11 regional
railways covering approximately 2,500 miles of track in Alberta, the Northwest
Territories, Ontario, Quebec and New Brunswick. RaiLink's common shares trade
under the symbol RLK on The Toronto Stock Exchange.
The takeover bid offer will be open for acceptance for a period of 21
days from the date of the mailing of the offer, unless the offer is withdrawn
or extended. The bid is conditional upon, among other things, the valid deposit
of at least 66 2/3% (on a fully diluted basis) of the common shares of RaiLink,
which are not withdrawn, and the receipt of any required regulatory approvals.
In connection with the agreement, RaiLink has agreed not to initiate or seek a
competing transaction to our offer. RaiLink has also agreed to pay a "break
fee" equal to a minimum of Cdn. $2.86 million (U.S.$1.96 million) in certain
specified circumstances, including if any other person acquires shares of
RaiLink carrying more than 50% of the outstanding voting rights.
ACQUISITION OF AUSTRALIAN V/LINE FREIGHT CORPORATION
On April 30, 1999, through our wholly owned Australian subsidiary,
Freight Victoria Limited, we completed the acquisition of the assets comprising
the railroad freight business of V/Line Freight Corporation, a corporation
established by the Government of the State of Victoria, Australia. V/Line
Freight was established in March 1997 as part of Victoria's public
transportation privatization process and assumed many of the activities
formerly carried out by the V/Line Freight business unit of the Public
Transportation Corporation of the Government of Victoria.
Under the Sale of Assets Agreement dated February 22, 1999 between
Freight Victoria, V/Line Freight and us, Freight Victoria acquired all of the
locomotives, wagons, motor vehicles, equipment, stock, spare parts inventory
and accounts receivable, certain business, brand and trade names and trade
marks, and the outstanding business contracts of V/Line Freight for a purchase
price of AUD$73.4 million in cash (approximately U.S.$49.0 million). In
connection with this acquisition, Freight Victoria also entered into other
agreements, including a primary infrastructure lease with the Director of
Public Transport of Australia and various facilities leases, access agreements,
maintenance and service agreements and other miscellaneous agreements. Pursuant
to the infrastructure lease, Freight Victoria received a 45-year lease of the
non-electrified intrastate Victorian railway tracks and infrastructure.
Pursuant to certain other agreements, Freight Victoria is responsible for,
among other things, track and rolling stock maintenance, train control, access
to the railway infrastructure by other rail operators and safety and signaling.
Under a letter issued by Freight Victoria in connection with its bid for the
V/Line Freight business, Freight Victoria prepaid in cash the net present value
of the rental payments for the infrastructure lease totaling AUD$89.7 million
(approximately U.S.$60.0 million). Freight Victoria commenced operations of the
rail-based freight business on May 1, 1999.
To facilitate this acquisition, Barclays Bank PLC provided Freight
Victoria with a U.S. $100.0 million bridge loan under a senior secured loan
facility. Upon the execution of this loan facility, we issued to Barclays Bank
warrants to acquire 750,000 shares of our common stock at an exercise price per
share of $9.75. These shares are included in the shares being offered under
this prospectus. We also used approximately U.S.$19.0 million in proceeds from
two private offerings of our equity securities to fund a portion of the
purchase price for this acquisition.
PRIVATE PLACEMENT OF SERIES A CONVERTIBLE REDEEMABLE
PREFERRED STOCK.
In January 1999, we completed a private placement of an aggregate of
464,400 shares of our Series A Preferred Stock at $25.00 per share. We received
net proceeds of $ 10.8 million from the sale of Series A Preferred Stock after
deduction of commissions and fees. The Series A Preferred Stock is convertible
at the option of the stockholder into shares of our common stock, at a
conversion price of $ 8.25 per share. The shares of our common stock issuable
upon conversion of the Series A Preferred Stock comprise a portion of the
shares of common stock being offered by the selling shareholders under this
prospectus.
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PRIVATE PLACEMENT OF COMMON STOCK AND WARRANTS.
In March 1999, we completed a private placement of an aggregate of 1.4
million shares of our common stock at $8.8125 per share, and 210,000 warrants to
purchase an equivalent number of shares of common stock at a price of $10.125
per share within one year of the closing. We received net proceeds of
approximately $12.0 million from the sale of common stock and warrants after
deduction of commissions and fees. We used the proceeds primarily to help fund
our equity investment in Freight Victoria, the entity that acquired the assets
of Australia's V/Line Freight Corporation. The shares of common stock issued in
this private placement, as well as the shares of common stock issuable upon
exercise of the warrants issued in this private placement, comprise a portion of
the shares of common stock being offered by the selling shareholders under this
prospectus.
PRIOR CANADIAN RAIL ACQUISITION
In January 1999, through a newly-formed subsidiary, Esquilmalt and
Nanaimo Railway Company (E&N), we acquired and/or leased a 181-mile rail line in
British Columbia, Canada. E&N provides freight and passenger rail service
between Victoria and Courtenay, and freight service between Port Alberni and
Nanaimo, on British Columbia's Vancouver Island.
KALYN
Our trailer manufacturing operations are conducted through our
wholly-owned subsidiary, Kalyn. We purchased Kalyn in August 1994 for $7.3
million. Kalyn manufactures specialty and custom truck trailers for U.S.
governmental and commercial customers. Kalyn's profitability margins exceed
those of commodity or stock trailers because its trailers are designed or
modified to meet customer specifications. Inventory levels are relatively low
because trailers are manufactured only after receipt of confirmed purchase
orders.
In January 1998, Kalyn acquired all of the outstanding stock of
Canadian trailer manufacturer Fabrex, Inc., and its affiliate Services Remorques
Plus, Inc., which are collectively referred to in this prospectus as "Fabrex".
Fabrex, a manufacturer of lightweight aluminum specialty bulk-handling truck
trailers used in the solid waste, agricultural and construction industries, was
founded in 1985. Fabrex's operations have been combined into Kalyn/Siebert
Canada, Inc., a wholly-owned subsidiary of Kalyn. Kalyn/Seibert Canada employs
approximately 120 people in its 150,000 square foot manufacturing facility
located in Trois Revieres, Quebec.
FERRONOR
In February 1997, through our wholly-owned subsidiary RailAmerica de
Chile S.A., we acquired a 55% interest in Empresa de Transporte Ferroviario,
S.A., or Ferronor, a 1,400 mile regional rail line serving northern Chile, for
approximately $7 million. The railroad serves important mining interests in
northern Chile and annually hauls more than approximately 70,000 carloads, or
more than 6,000,000 tons, of iron ore, copper concentrate, copper anodes,
nitrates, limestone, cement and chemicals. Ferronor provides access to Pacific
coast ports for the northern Chile mining interests and international traffic
from Argentina and Bolivia. Ferronor has also entered into a new 20-year
take-or-pay agreement with CMH, a large Chilean mining company. The contract
outlines the terms for the transport of approximately 5.2 million tons of iron
pellets annually, commencing July 1998. The contract guarantees a minimum of 4.0
million tons per year at a rate of $1.45/ton. The contract has escalators based
on general inflation rates and the cost of fuel. We expect the contract to yield
a minimum of $8.6 million per year in additional revenue. Revenues for Ferronor
for the ten-month period from acquisition to December 31, 1997 were $8.1
million, and for the year ended December 31, 1998, were $15.9 million.
PRIOR AUSTRALIAN ACQUISITION
In August 1997, a consortium in which we have a minority participation
of approximately 11% was awarded the passenger rail concession for three
interstate passenger rail lines by the Australian National Railway Commission
for a payment of approximately $12.0 million. The acquired rail lines extend
over 4,000 miles and
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during the year ended December 31, 1998, carried approximately 200,000
passengers and generated approximately $29 million in revenue. We believe that
our participation in the consortium was instrumental in our successful bid for
the acquisition of V/Line Freight which has allowed us to position ourselves to
participate in further rail freight privatizations expected to take place in
Australia over the next several years.
OUR GROWTH STRATEGY
Our objective is to become a premium operator of short line and
regional railroads through the implementation of the following growth strategy:
o NORTH AMERICAN ACQUISITIONS. We plan to continue to acquire
short line and regional railroads that become available as a
result of the rationalizations and divestitures in North
America, especially in geographic regions where we can
"cluster" a number of acquired rail lines to achieve economies
of scale.
o INTERNATIONAL ACQUISITIONS. We plan to acquire additional
foreign regional railroads that become available as a
result of governmental privatization. International rail
acquisitions often offer us better growth opportunities due to
historical operating inefficiencies typical of government
entities.
o EXPANSION OF MANUFACTURING OPERATIONS. We plan to acquire
additional specialized truck trailer manufacturing companies
as they become available.
o FOCUSED SALES AND MARKETING. We continue to increase traffic
from existing, former and new customers in each of our markets
through the aggressive marketing of our enhanced customer
service, re-negotiation of rates where prudent and
implementation of other incentive arrangements for shippers.
Once we reestablish frequent service for a newly acquired
railroad, we market our newly restored service to existing
customers as well as to customers who may have dropped service
when the former owner had operational control.
o OPERATING EFFICIENCY. We improve our operating efficiency
through rationalized staffing, incentivized local management
and staff, centralized purchasing and corporate services,
efficient equipment utilization and outsourced maintenance.
We acquire rail properties by purchase of assets, lease or operating
contract. Typically, we bid against other short line and regional operators for
available properties. The structure of each transaction is determined by the
seller based upon economic and strategic considerations. In addition to the
financial terms of the transaction, we believe sellers generally consider more
subjective criteria such as a prospective acquirer's operating experience, our
reputation among shippers, and our ability to close a transaction and commence
operations smoothly. We believe we have established an excellent record in each
of these areas. In addition, by growing revenues on our acquired lines and
providing improved service to shippers, we are able to provide increased revenue
to the Class I carriers that connect with its lines. We see this ability to
provide increased revenue to Class I carriers as an advantage in bidding for
properties.
Our principal executive offices are located at 301 Yamato Road, Suite
1190, Boca Raton, Florida 33431 and our telephone number is (561) 994-6015.
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RISK FACTORS
IN ADDITION TO THE INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS
OR INCORPORATED IN THIS PROSPECTUS BY REFERENCE, YOU SHOULD CONSIDER CAREFULLY
THE FOLLOWING RISK FACTORS.
WE ARE SUBJECT TO THE RISKS OF DOING BUSINESS IN FOREIGN COUNTRIES.
We have railroad operations in Australia, Chile and Canada. The risks
of doing business in foreign countries include:
- adverse changes in the economy of such countries;
- adverse effects of currency exchange controls;
- restrictions on the withdrawal of foreign investment and
earnings;
- government policies against ownership of businesses by
non-nationals;
- potential adverse changes in the diplomatic relations of
foreign countries with the United States;
- expropriations of property;
- hostility from local populations;
- the potential instability of foreign governments; and
- the risk of insurrections that could result in losses against
which we are not insured.
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 tariff, foreign exchange restrictions and changes in taxation
structure.
OUR GROWTH STRATEGY PARTIALLY DEPENDS ON ACQUISITIONS. IF WE ARE UNABLE
TO ACQUIRE BUSINESSES ON FAVORABLE TERMS OR SUCCESSFULLY INTEGRATE AND
MANAGE THE BUSINESSES ACQUIRED, OUR BUSINESS AND FINANCIAL RESULTS MAY
BE ADVERSELY AFFECTED.
We have experienced significant growth in revenues, primarily through
the completion of acquisitions. We plan to continue to evaluate opportunities to
acquire additional regional railroads in North American and international
markets. We also plan to continue to acquire short line railroads in North
America from Class I railroads and from other short line railroad operators.
Acquisitions result in greater administrative burdens and in additional
operating costs and, if financed with debt, additional interest costs.
Acquisitions also involve a number of other risks, including the following:
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- diversion of management's attention to the assimilation of
operations and personnel of the acquired companies;
- the difficulty of integrating acquired companies into our
management information and financial reporting systems;
- possible adverse short-term effects on our operating results
and an adverse impact on earnings from the amortization of
acquired intangible assets; and
- if financed with equity, potential per share dilution to
existing stockholders.
There can be no assurance that we will be able to find, finance and
complete further suitable acquisitions on terms acceptable to us, that we will
be able to integrate effectively any acquisitions made, that the businesses
acquired can be operated profitably, or that we can assimilate the operations of
such businesses into our own operations.
WE HAVE SUBSTANTIAL DEBT AND DEBT SERVICE REQUIREMENTS WHICH COULD HAVE
IMPORTANT CONSEQUENCES ON OUR BUSINESS.
We have substantial debt and debt service requirements. As of March 31,
1999, our total debt was $85 million. Our substantial debt could have important
consequences including:
- our substantial degree of leverage could make it more
difficult for us to satisfy our obligations under this debt;
- our ability to borrow additional amounts for working capital,
capital expenditures and other purposes will be limited or
such financing may not be available on terms favorable to us;
- a substantial portion of our cash flows from operations will
be used to pay our interest expense, pay our preferred stock
dividends and repay our debt, which will reduce the funds that
would otherwise be available to us for our operations and
future business opportunities; and
- our substantial degree of leverage may limit our flexibility
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 our business.
WE AND OUR SUBSIDIARIES MAY INCUR ADDITIONAL INDEBTEDNESS IN THE
FUTURE.
We and our subsidiaries may be able to incur substantial additional
indebtedness in the future. This could further exacerbate the risks described
above. If new debt is added to our and our subsidiaries
current debt levels, the related risks that we and they now face could
intensify.
OUR ABILITY TO REPAY OR REFINANCE OUR CURRENT DEBT DEPENDS ON OUR
ABILITY TO SUCCESSFULLY IMPLEMENT OUR BUSINESS STRATEGY.
Our ability to repay or refinance our current debt depends on our
successful financial and operating performance and on our ability to
successfully implement our business strategy. Unfortunately, we cannot assure
you that we will be successful in implementing our strategy or in realizing our
anticipated financial results. Our financial and operational performance depends
in part on prevailing economic conditions and on certain financial, business and
other factors beyond our control. We cannot assure you that our cash flows and
capital resources will be sufficient to pay our interest expense, pay our
preferred stock dividends and repay our debt. In the event that we are unable to
pay our obligations, 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. However, our ability to raise funds to service our debt and preferred
stock obligations may be restricted by the terms of our senior indebtedness and
our ability to effect equity financing will be dependent on our results of
operations and market conditions. In the event that we are unable to refinance
our indebtedness or raise funds through asset sales, sales of equity or
otherwise, our ability to pay principal of, and interest on our debt could be
adversely affected.
WE HAVE SIGNIFICANT RESTRICTIONS IMPOSED BY OUR DEBT AGREEMENTS
The terms of our debt agreements contain a number of significant
covenants. These covenants will limit our ability to, among other things:
- incur more debt;
- pay dividends, redeem or repurchase our stock or make
other distributions;
- make certain investments;
- use assets as security in other transactions;
- enter into transactions with affiliates;
- merge or issue certain securities or consolidate or dispose of
our assets;
- dispose of certain asset sale proceeds;
- create certain liens;
- extend credit;
- sell or discount receivables; and
- enter into certain leases.
A breach of any of these covenants could result in a default under our
debt agreements. 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 not be able to repay our debt or borrow sufficient funds
to refinance it. Even if new financing is available, it may not be on terms that
are acceptable to us.
In addition, our debt agreements contain other and more restrictive
covenants. These agreements require us to maintain specified financial ratios.
Our ability to meet those financial ratios can be affected by events beyond our
control, and there can be no assurance that we will meet those ratios. If we
were unable to borrow funds due to a default or if we fail to meet certain
specified prerequisites for borrowing, we could be left without sufficient
liquidity.
WE FACE COMPETITION FROM OTHER TYPES OF TRANSPORTATION AND FROM OTHER
RAIL OPERATORS.
Our primary source of competition in our rail operations comes from
motor carriers. 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.
Additionally, in Australia, the applicable legislative framework
enables third party rail operators to gain access to the railway and
infrastructure on which we operate. As part of this regime, we have executed,
and are required to execute upon proper request, access agreements governing
access to the railway infrastructure. The operation of these access agreements
and the applicable regulatory framework will have a significant impact on our
revenues and expenses. There can be no assurance that we will not be required to
make significant expenditures and to incur significant expenses in order to
comply with the rail access framework.
In addition, we compete for foreign acquisitions with other U.S. and
foreign rail operators. Some of these competitors have significantly greater
resources than we do and may possess greater local market knowledge as well.
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 inter-modal 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.
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WE ARE REQUIRED TO MAKE SIGNIFICANT CAPITAL EXPENDITURES.
The rail industry requires extensive investment in connection with the
maintenance and upkeep of tracks, locomotives and other equipment. For the 1999
year, we have allocated $36 million to capital expenditures. If we are unable
to borrow sufficient funds or raise additional equity capital, the resulting
capital shortage could materially limit our growth and profitability.
WE FACE RISKS RELATED TO YEAR 2000 COMPLIANCE FOR WHICH WE MAY NOT BE
PREPARED.
The "Year 2000 Issue" is the result of computer programs that were
written using two digits rather than four to define the applicable year. If our
computer programs with date-sensitive functions are not Year 2000 compliant,
they may recognize a date "00" as the Year 1900 rather than the Year 2000. This
could result in a system failure or miscalculations causing disruptions of
operations, including, among other things, a temporary inability to process
transactions, inability to interchange information with connecting railroads or
engage in similar normal business activities.
Many of our U.S. systems and related software are currently Year 2000
compliant and we have a program in place designed to bring the remaining
software and systems into Year 2000 compliance in time to minimize any
significant detrimental effect on operations. However, some of the software and
hardware products which we use in our international operations are not Year 2000
compliant. 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. A failure in our hardware or software
whether caused by Year 2000 or otherwise, could cause considerable losses and
damages to our operations, including causing us to default on our obligations to
customers.
We also rely on customers and other third parties who provide services
or access to infrastructure in our North American, international 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 impact our ability to invoice
and collect on shipments. Failure of a third party supplier to deliver materials
to our manufacturing facilities could cause either a slowdown in production
and/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, certain of our normal business activities or
operations. Such 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 third party suppliers and customers, we are unable to
determine at this time whether the consequences of Year 2000 failures will have
a material impact on our results
-8-
<PAGE> 9
of operations, liquidity or financial condition. We believe that, with the
implementation of new business systems and completion of the program as
scheduled, the possibility of significant interruptions of normal operations
should be minimized.
WE ARE SUBJECT TO SIGNIFICANT GOVERNMENTAL REGULATION OF OUR RAILROAD
AND MANUFACTURING OPERATIONS. THE FAILURE TO COMPLY WITH GOVERNMENTAL
REGULATION COULD HAVE A MATERIAL ADVERSE EFFECT ON US.
We are subject to governmental regulation by a significant number of
foreign, federal, state and local regulatory authorities with respect to our
railroad and manufacturing operations, our rates and a variety of health,
safety, labor, environmental and other matters. Some of these regulations
require us to obtain and maintain various licenses, permits and other
authorizations. Compliance with these regulations could potentially adversely
affect our competitive position and profitability. Additionally, our failure to
comply with any applicable laws and regulations could have a material adverse
effect on us. Such governments may change the legislative framework within which
we operate without us having any recourse for any adverse effects the such
change may have on our business. Changes in the legislative framework could have
a material adverse effect upon our results of operations and financial
condition.
WE ARE SUBJECT TO 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. Some reports prepared in connection with the V/Line Freight
acquisition identified a number of contaminated sites on the properties leased
or licensed to us in Australia, which we, as the occupier of those properties,
could be required to clean up, along with other properties to which the
contamination has migrated. While we believe we are in substantial compliance
with all such matters, any allegations or findings to the effect that we had
violated such laws or regulations could have a material adverse effect on our
business and results of operations.
-9-
<PAGE> 10
WE MAY FACE LIABILITY FOR CASUALTY LOSSES WHICH 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. While we believe, based upon our experience, that our insurance
coverage is adequate, 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. The occurrence of losses or other liabilities which are
not covered by insurance or which exceed our insurance limits could materially
adversely affect our business and results of operations.
WE DEPEND ON KEY PERSONNEL.
Our success is dependent on our key management personnel, including Mr.
Gary Marino, our Chairman, President and Chief Executive Officer. Our success is
also dependent upon the efforts of Marinus van Onselen, Chief Executive Officer
of Freight Victoria, and 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 our business. While we believe that we would
be able to locate suitable replacements for these executives if their services
were lost, there can be no assurance we would be able to do so.
WE DEPEND ON CLASS I RAILROADS FOR OUR NORTH AMERICAN OPERATIONS. IF
OUR RELATIONSHIPS WITH CLASS I RAILROADS DETERIORATE, OUR BUSINESS AND
FINANCIAL RESULTS MAY BE ADVERSELY AFFECTED.
The railroad industry in the United States 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 domestic 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 depends in large part upon our ability to maintain cooperative
relationships with Class I connecting 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 connecting carriers, or in our relationship with our connecting carriers,
would adversely affect our business. In addition, much of the freight
transported by our railroads moves on railcars supplied by Class I carriers. If
the number of railcars supplied by Class I carriers is insufficient, shippers
may seek alternative forms of transportation. Furthermore, were these carriers
to reduce the number of railcars available for use by our railroads, we might
not be able to obtain replacement railcars on favorable terms.
Portions of our 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 such 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 Class I carriers continue to divest themselves of
branch lines to smaller rail operators. As a result of
-10-
<PAGE> 11
these factors, a deterioration of our relationships with Class I carriers would
have a material adverse effect on our business and results of operations.
OUR RAILROAD OPERATIONS DEPEND ON THE AGRICULTURAL INDUSTRY. OUR
BUSINESS MAY BE ADVERSELY AFFECTED BY NEGATIVE CONDITIONS IN THE
AGRICULTURAL INDUSTRY.
A substantial portion of our traffic consists of agricultural
commodities. As a result, factors that generally 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. Additionally, in North America, sellers of
agricultural commodities typically do not ship their products until they deem
prices to be advantageous. As a result, the number of carloads that we handle
and our recognition of revenue may vary significantly from period to period as a
result of fluctuations in the prices for those commodities. Shipments of
agricultural commodities, on an overall basis, occur seasonally, with the
majority of the agricultural products typically being shipped from September
through May. As a result, our revenues from these shipments will normally be
higher during these months than during the summer months. We believe that
agricultural commodities will continue to represent a principal component of our
rail traffic base in the near future.
WE DEPEND ON GOVERNMENT PURCHASES FOR OUR MANUFACTURING OPERATIONS.
For the years ended December 31, 1997 and 1998, approximately 37% and
35%, respectively, of Kalyn's revenues were derived from sales of truck trailers
to U.S. governmental customers. The majority of Kalyn's sales to governmental
agencies are to the General Services Administration, the purchasing arm of
non-military agencies, and to the United States Tank Automotive Command, a
Department of Defense unit established to consolidate purchases for various
branches of the military. A substantial decrease in orders for new trailers
placed by the GSA and/or TACOM could have a material adverse effect on our
business and results of operations.
WE DEPEND ON INDUSTRY DEMAND FOR TRUCK TRAILERS, WHICH IS A CYCLICAL
BUSINESS.
Unit sales of new truck trailers have historically been subject to
substantial cyclical variation. Sales of new truck trailers have also
historically been subject to a five to seven-year replacement cycle. Periods of
economic recession in the United States have historically caused declines in the
profitability of the trucking industry, have had a material adverse effect on
industry-wide demand for new truck trailers and may have a material adverse
effect on our results of operations. Future economic downturns or cyclical
decreases in demand for truck trailers would likely have a material adverse
effect on our business and results of operations.
WE AND SOME OF OUR CUSTOMERS DEPEND ON GOVERNMENT GRANTS AND SUBSIDIES.
We have, in the past, attracted federal and state financial support for
rail infrastructure improvements in the United States. We believe that this
support is an important element of the transportation infrastructure in many of
our territories. Additionally, in Australia, one of our primary
-11-
<PAGE> 12
lines of business and some of our customers depend on government subsidies, as
well as some of the third party rail operator who have access to the Australian
rail infrastructure. There can be no assurance that these grants and subsidies
will be available in the future or that we, or our customers, as applicable,
will continue to be able to obtain them. The loss of grants or subsidies by us
or our customers could have a material adverse effect upon our results of
operations and financial condition.
OUR MANUFACTURING OPERATIONS DEPEND ON TWO TRUCK TRAILER MANUFACTURING
SITES.
Our manufacturing operations consist of two manufacturing 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 and/or the
addition of a partial second work shift, these capacity increases may 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 manufacturing operations accounted for 53%, 48%
and 52%, respectively, of our total revenues. A long-term interruption in the
operation of our plants from labor strikes, 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.
-12-
<PAGE> 13
WE ARE REQUIRED TO PAY PENALTY FEES UNDER CERTAIN CIRCUMSTANCES TO
THIRD PARTY RAIL OPERATORS WHO HAVE ACCESS TO THE AUSTRALIAN RAILWAYS.
Certain access agreements with third party rail operators in Australia
contain a lateness regime for penalizing us in the event that trains using the
railway infrastructure are delayed, early or cancelled in a variety of
circumstances which are described in the agreements. The formulas for
calculation of the penalty are complex and refer to performance data which are
not contained in the agreements. The penalties apply unless the delay, earliness
or cancellation is primarily due to a force majeure event, which includes events
such as natural disasters, war, changes in applicable laws, power shortages and
Year 2000 events. There can be no assurance that we will not incur significant
lateness penalties under the Australian access agreements.
OUR MANUFACTURING OPERATION IS DEPENDENT ON A LIMITED NUMBER OF
SUPPLIERS.
Our ability to manufacture trailers is dependent upon receiving
supplies, components and raw materials from a limited number of sources. If
supplies are delayed, our production ability may be decreased, which could have
a material adverse effect on our business and results of operations.
-13-
<PAGE> 14
OUR CORPORATE CHARTER CONTAINS ANTI-TAKEOVER PROVISIONS.
Our Amended and Restated Certificate of Incorporation contains
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 our company without negotiating with our Board of
Directors. These provisions could limit the price that investors might be
willing to pay in the future for our securities. These provisions provide:
- that we have a classified Board of Directors with staggered
terms, and
- that we can 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.
In January 1998, we implemented a Common Stock Purchase Rights Plan and
distributed one right for each share of our common stock outstanding. Each right
has an initial exercise price of $36 for one share of our common stock. The
rights are not exercisable or transferable, apart from our common stock, until
after a person or group acquires, or has the right to acquire, beneficial
ownership of 15% (except in certain specific instances) or more of our common
stock, which threshold may, under certain circumstances, be reduced to 10%, or
announces a tender or exchange offer to acquire such percentage of our common
stock. Upon such occurrence, each right, other than rights owned by such person
or group, will entitle the holder to purchase from us, or the particular
acquiring person or group under certain circumstances and conditions, the number
of shares of our, or such person's or group's, common stock having a market
value equal to twice the exercise price of the right. The rights are redeemable
by our Board of Directors under circumstances set forth in the rights agreement.
The rights plan could have the effect of making it more difficult for a third
party to acquire, or discourage a third party from attempting to acquire,
control of us without negotiating with our Board of Directors.
WE HAVE NEVER PAID DIVIDENDS.
We have never declared or paid a dividend on our common stock, and we
expect that a substantial portion of our future earnings will be retained for
expansion or development of our business, which may include additional
-14-
<PAGE> 15
acquisitions. Whether we will pay dividends in the future will be at the
discretion of our Board of Directors and will depend upon, among other things,
future earnings, operations, capital requirements and surplus, our general
financial condition, restrictive covenants in any of our loans or other
agreements, and other factors as the Board of Directors may deem to be relevant,
including the desirability of cash dividends to stockholders.
THERE ARE SUBSTANTIAL SHARES ELIGIBLE FOR FUTURE SALE WHICH MAY
ADVERSELY AFFECT OUR STOCK PRICE.
On the date of this prospectus, we had shares of common
stock issued and outstanding and shares of common stock reserved for
issuance. The possibility that substantial amounts of our common stock may be
issued and/or freely resold in the public market may adversely affect prevailing
market prices for our common stock and could impair our ability to raise capital
through the sale of our equity securities.
Of the shares of common stock issued and outstanding, we
believe that approximately 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 1.7 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 such 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.
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 $ .
-15-
<PAGE> 16
SELLING SHAREHOLDERS
Of the 4,326,617 shares of our common stock offered by this prospectus,
(1) 1,407,272 are issuable upon the conversion of shares of our Series A
Convertible Redeemable Preferred Stock, issued in connection with the private
placement we completed in January 1999, at a price of $8.25 per share, (2)
1,415,036 have been issued in connection with the private placement we completed
on March 3, 1999, (3) 195,455 are issuable upon the exercise of warrants, issued
in connection with the March 3, 1999 private placement, at a price of $10.125
per share, (4) 750,000 are issuable to Barclays Bank PLC upon exercise of
warrants, issued to Barclays Bank in connection with our most recent Australian
acquisition, at an exercise price of $9.75 per share, (5) 276,623 are issuable
to Macquarie Bank Limited upon conversion of Macquarie Bank's convertible note
in the principal amount of $2.64 million and interest thereon at a conversion
price of $9.83 per share, and (6) 141,504 shares and 127,026 shares are issuable
to First London Securities Corporation, or its permitted assignees, upon the
exercise of warrants we issued to First London in connection with its corporate
finance consulting and financial advisory services performed on our behalf, at a
price of $8.25 and $10.125 per share, respectively.
Except for certain principals of First London Securities Corporation,
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 receipts of, our common stock, Series A Convertible
Redeemable Preferred Stock, warrants or convertible notes.
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, (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 shares of Series A Convertible
Redeemable Preferred Stock, 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. In the instance of Macquarie Bank
Limited, the amount listed in column one consists of shares of our common stock
that would beneficially be owned upon conversion of a convertible note in the
principal amount of $2.64 million and interest thereon at a conversion price of
$9.83 per share. 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 his or her shares of Series A
Convertible Redeemable Preferred Stock into common stock, exercises all of its
warrants, or converts all of its convertible notes, as applicable; and (ii)
sells all of his or her shares of common stock, or converted or exercised shares
of common stock registered under this prospectus, as applicable.
<TABLE>
<CAPTION>
OWNERSHIP OF SHARES
OF COMMON STOCK OWNERSHIP OF SHARES
PRIOR TO OFFERING OF COMMON STOCK
-------------------------------------------- NUMBER OF SHARES AFTER OFFERING **
COMMON SERIES A OF COMMON STOCK ------------------------
SELLING SHAREHOLDER SHARES PREFERRED WARRANTS PERCENTAGE OFFERED SHARES PERCENTAGE
------------------- ------ --------- -------- ---------- ---------------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Betty Anderson 6,060 * 6,061 0 *
AOL Partnership Ltd. 12,121 * 12,121 0 *
Apogee Fund, L.P. 57,000 60,606 8,550 1.1% 117,606 0 *
Willard W. Askew 12,121 * 12,121 0 *
Clara Bandy 1,818 * 1,818 0 *
BEV Partners, L.P. 34,042 5,106 * 39,148 0 *
Barclays Bank PLC 750,000(1) 6.7% 750,000 0 *
Dale W. Brown 5,000 6,060 * 6,061 0 *
Boyd & Co. 112,000 16,800 1.2% 128,800 0 *
Timothy H. Brown & Vivian D. Brown,
TTEE 3,030 * 3,030 0 *
Chambers Family Interests 9,000 1,350 * 10,350 0 *
Bill Clement 11,000 1,650 * 12,650 0 *
Anne Dahlson 6,060 * 6,061 5,000 *
The Dechard Foundation 12,121 * 12,121 0 *
Paul & Patricia DiPietrantonio 3,030 * 3,030 0 *
Deborah Doorey 3,030 * 3,030 0 *
Michael Doorey 3,030 * 3,030 0 *
Dudley Profit Sharing Trust 6,060 * 6,061 0 *
EBS Asset Management P/S Plan 4,359 6,060 681 * 10,599 0 *
EBS Microcap Partners LP 8,510 24,242 1,277 * 37,602 0 *
EBS Partners LP 17,021 42,424 2,553 * 69,143 0 *
EGS Associates L.P. 68,085 10,213 * 78,298 0 *
Lucia A. Englander 12,121 * 12,121 0 *
Kathryn Esping Agency, GP 113,500 21,212 17,025 1.5% 161,212 0 *
First London Securities Corp. 282,231(2) 2.5% 282,231 0 *
Gladney Fund 12,121 * 12,121 0 *
Richard T. Groos Trust 12,121 * 12,121 0 *
Hull Overseas, Ltd. 24,242 * 24,242 0 *
Interstate Auto Insurance 6,060 * 6,061 0 *
Jonas Partners L.P. 22,6995 3,404 * 26,099 0 *
JPW Fund, Ltd. 380,000 22,500 1.6% 172,500 230,000 2.1
James P. Judge 12,121 * 12,121 0 *
Dorothy A. Kamp Trust 3,030 * 3,030 0 *
</TABLE>
<PAGE> 17
<TABLE>
<CAPTION>
OWNERSHIP OF SHARES
OF COMMON STOCK OWNERSHIP OF SHARES
PRIOR TO OFFERING OF COMMON STOCK
-------------------------------------------- NUMBER OF SHARES AFTER OFFERING **
COMMON SERIES A OF COMMON STOCK ------------------------
SELLING SHAREHOLDER SHARES PREFERRED WARRANTS PERCENTAGE OFFERED SHARES PERCENTAGE
------------------- ------ --------- -------- ---------- ---------------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Felice M. Kantor 6,060 * 6,061 0 *
Edward Kennedy 6,060 * 6,061 0 *
Geraldine A. Kreutzjans 606 * 606 0 *
John S. Lemak 10,000 1,500 * 11,500 0 *
L. Family Management, Co. Ltd. 24,242 * 24,242 0 *
Lighthouse Genesis Partners, LP 7,272 * 7,273 0 *
LKCM Balanced Fund 8,500 1,275 * 9,775 0 *
LKCM Investment Partnership 115,000 17,250 1.2% 132,250 0 *
LKCM Small Cap Equity Fund 209,500 31,425 2.2% 240,925 0 *
Lockheed Martin Retirement Trust 215,602 32,340 2.5% 276,623 0 *
Macquarie Bank Limited 276,623(3) 2.5% 268,566 0 *
Bhupendra H. Mahida 6,060 * 6,061 0 *
John E. Meyer 22,695 54,545 3,404 * 77,241 0 *
John E. Meyer & Betty J. Meyer
Foundation 6,060 * 6,061 0 *
Jerome W. Neidfelt 12,121 * 12,121 0 *
Joe Neuhoff Equity 24,242 * 24,242 0 *
Ray Nixon, Jr. 12,121 * 12,121 0 *
Mildred M. Nizny Trust 2,424 * 2,424 0 *
Milo Noble 9,696 * 9,697 0 *
Oakley Park Co. 6,060 * 6,061 0 *
Marcia O'Rourke 6,060 * 6,061 0 *
John F. Popken 6,060 * 6,061 0 *
Peaquot Scout Fund, L.P. 484,848 4.4% 484,848 0 *
Pharos Genesis Fund Limited 67,878 * 67,879 0 *
Precept Capital Master Fund 12,121 * 12,121 0 *
R&D Investment Partnership, LP 11,347 36,363 1,702 * 41,212 0 *
John Roach Custody Sub. Acct. 6,060 * 6,061 0 *
Nancy Robinson 1,212 * 1,212 0 *
Victor E. Salvino 1,000 24,242 * 24,242 1,000 *
Michael Samis 5,000 750 * 5,750 0 *
George A. Shutt 24,242 * 24,242 0 *
Peter P. Smith 10,000 1,500 * 11,500 0 *
Peter P. and Bonnie B. Smith
Irrevocable Trust for Children 12,121 * 22,121 0 *
John S. and Bonnie P. Strauss 60,060 * 60,606 0 *
Robert L. Swisher, Jr. 578,400 18,000 1.2% 138,000 458,000 4.1%
Charles Tandoi TTEE 14,545 * 14,545 0 *
Charles C. Taylor 25,000 3,750 * 28,750 0 *
Jeffrey Thorp 15,000 2,250 * 17,250 0 *
Toby G. Weber 6,060 * 6,061 0 *
Walker Smith Asset Management 14,200 2,130 * 16,330 0 *
Walker Smith Capital 13,800 24,242 2,070 * 50,242 0 *
Walker Smith International 12,000 1,800 * 13,800 0 *
Ann T. Warinner Trust 3,030 * 3,030 0 *
Billy A. West Trust 6,060 * 6,061 0 *
Dorothy D. Winchester 15,000 6,060 * 6,061 15,000 *
Rush Winchester 6,060 * 6,061 0 *
</TABLE>
* Indicates less than 1%
** Assumes all of the shares of common stock registered hereby are sold.
(1) Consists of shares of our common stock issuable upon exercise of warrants
issued in connection with Barclay Bank's services with respect to our
Freight Victoria acquisition, at an exercise price of $9.75 per share.
(2) Consists of shares of common stock issuable upon exercise of warrants
issued in connection with services performed as placement agent with
respect to our January 1999 and March 1999 private placements, of which
127,062 are exercisable at a price of $8.25 per share and 141,504 are
exercisable at a price of $10.125 per share.
(3) Consists of 268,566 shares of common stock issuable upon exercise of the
principal amount of a convertible note in the amount of $2.64 million at a
conversion price of $9.83 per share, and 8,057 shares of common stock that
may be issued in connection with the conversion of interest payments on the
convertible note at 6% per annum.
-17-
<PAGE> 18
<TABLE>
<CAPTION>
Common Shares Series A Preferred Warrants
- ------------- ------------------ --------
<S> <C> <C>
6,060
12,121
57,000 60,606 8,550
12,121
1,818
34,042 5,106
750,000(1)
5,000 6,060
112,000 16,800
3,030
9,000 1,350
11,000 1,650
6,060
12,121
3,030
3,030
3,030
6,060
4,359 6,060 681
8,510 24,242 1,277
17,021 42,424 2,553
68,085 10,213
12,121
113,500 121,212 17,025
282,231(2)
12,121
12,121
24,242
6,060
22,6995 3,404
380,000 22,500
12,121
3,030
6,060
6,060
606
10,000 1,500
24,242
7,272
8,500 1,275
115,000 17,250
209,500 31,425
215,602 32,340
268,566(3)
6,060
22,695 54,545 3,404
6,060
12,121
24,242
12,121
2,424
9,696
6,060
6,060
6,060
484,848
67,878
12,121
11,347 36,363 1,702
6,060
1,212
1,000 24,242
5,000 750
24,242
10,000 1,500
12,121
60,060
578,400 18,000
14,545
25,000 3,750
15,000 2,250
6,060
14,200 2,130
13,800 24,242 2,070
12,000 1,800
3,030
6,060
15,000 6,060
6,060
</TABLE>
(1) Consists of shares of our common stock issuable upon exercise of warrants
issued in connection with Barclay Bank's services with respect to our
Freight Victoria acquisition, at an exercise price of $9.75 per share.
(2) Consists of shares of common stock issuable upon exercise of warrants
issued in connection with services performed as placement agent with
respect to our January 1999 and March 1999 private placements, of which
127,062 are exercisable at a price of $8.25 per share and 141,504 are
exercisable at a price of $10.125 per share.
(3) Consists of shares of common stock issuable upon exercise of a convertible
note in the principal amount of $2.64 million at a conversion price of
$9.83 per share.
-18-
<PAGE> 19
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.
-19-
<PAGE> 20
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, except as they relate to
Empresa De Transporte Ferroviario S.A., have been audited by
PricewaterhouseCoopers LLP, independent accountants, and, insofar as they relate
to Empresa De Transporte Ferroviario S.A. as of December 31, 1998 and for the
year then ended, by Arthur Andersen Langton Clarke, independent accountants.
Such financial statements have been so included in reliance on the reports of
such independent accountants given on the authority of such firms as experts in
accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference rooms located at 450 5th Street, N.W., Washington,
D.C. 20549, at Seven World Trade Center, 13th Floor, New York, New York 10048
and at Northwest Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our SEC filings are also available to
the public from the SEC's web site at: http://www.sec.gov. Our common stock
trades on the Nasdaq National Market. You can also inspect reports, proxy
statements and other information concerning our company at the offices of the
Nasdaq National Market, 1735 K Street, N.W., Washington, D.C. 20006.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information that we file
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings made
with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act.
(1) Our Annual Report on Form 10-K for the year ended December 31,
1998;
(2) Our Quarterly Report on Form 10-Q for the quarter ended March
31, 1999;
(3) Our Current Report on Form 8-K, filed with the SEC on May 17,
1999; and
(4) The description of our common stock contained in our
Registration Statement on Form 8-A filed with the SEC under
Section 12 of the Exchange Act on September 10, 1992,
including any amendments or reports filed for the purpose of
updating the description.
We will provide without charge to each person, including any beneficial
owner, to whom a prospectus is delivered, upon written or oral request of that
person, a copy of any and all of the information that has been incorporated by
reference in this prospectus (excluding exhibits unless specifically
incorporated by reference into those documents). Please direct requests to us at
the following address:
Secretary
RailAmerica, Inc.
301 Yamato Road
Suite 1190
Boca Raton, Florida 33431
(561) 994-6015
This prospectus is part of a registration statement we filed with the
SEC. You should only rely on the information incorporated by reference or
provided in this prospectus or any supplement. We have not authorized anyone
else to provide you with different information. The selling shareholders are not
offering the common stock in any state where the offer is not permitted. You
should not assume that the information in this Prospectus or any supplement is
accurate as of any date other than the date on the front of those documents.
---------------
AS USED IN THIS PROSPECTUS, UNLESS THE CONTEXT REQUIRES OTHERWISE, (I)
"SECURITIES ACT" MEANS THE SECURITIES ACT OF 1933, AS AMENDED, AND (II)
"EXCHANGE ACT" MEANS THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
-20-
<PAGE> 21
================================================================================
NO DEALER, SALESPERSON OR ANY OTHER PERSON IS AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY 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 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 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 OF CONTENTS
PAGE
----
The Company............................................. 1
Risk Factors............................................ 6
Use of Proceeds......................................... 15
Selling Shareholders.................................... 16
Plan of Distribution.................................... 19
Legal Matters........................................... 20
Experts................................................. 20
Where You Can Find More Information..................... 20
================================================================================
================================================================================
4,326,617 SHARES
OF
COMMON STOCK
RAILAMERICA, INC.
--------------------------
PROSPECTUS
--------------------------
MAY , 1999
================================================================================
<PAGE> 22
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses, excluding solicitation fees, in connection with
this offering are as follows:
AMOUNT
------
Registration Fee................................. $ 8,313
Legal fees and expenses.......................... $ 40,000
Accounting fees and expenses..................... $ 10,000
Printing Fees.................................... $ 6,000
Miscellaneous.................................... $ 687
--------
Total.......................... $ 65,000
========
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.
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> 23
ITEM 16. EXHIBITS
The following exhibits are included as a part of this Registration
Statement:
EXHIBIT
NUMBER DESCRIPTION
------- -----------
4.1 Certificate of Designation of Series A Convertible Redeemable
Preferred Stock*
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 L.L.P.
23.3 Consent of Arthur Andersen Langton Clarke
24.1 Power of Attorney (filed with signature page)
- -----------
* Incorporated by reference to Exhibit 4.2 filed as part of the Company's
Form 10-K for the year ended December 31, 1998 filed with the Securities
and Exchange Commission on March 31, 1999.
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 and of the estimated maximum offering range may 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 percent
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 this registration statement.
(2) That, for the purpose 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> 24
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 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.
The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report, to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
II-3
<PAGE> 25
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
amendment no. 1 to its Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Boca Raton, Florida, as of May 28,
1999.
RAILAMERICA, INC.
By: /s/ Gary O. Marino
---------------------------------------------
Gary O. Marino
Chairman, Chief Executive Officer, President
and Treasurer (Duly Authorized Representative)
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
amendment no. 1 to the Registrant's 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, Chief Executive Officer, May 28, 1999
- ------------------------------------ President and Treasurer
GARY O. MARINO (principal executive officer)
* Vice Chairman and Director May 28, 1999
- ------------------------------------
JOHN H. MARINO
/s/ DONALD D. REDFEARN Executive Vice President, May 28, 1999
- ------------------------------------ Secretary and Director
DONALD D. REDFEARN
* Vice President and Controller May 28, 1999
- ------------------------------------ (principal accounting officer)
LARRY BUSH
* Director May 28, 1999
- -----------------------------------
RICHARD RAMPELL
* Director May 28, 1999
- -----------------------------------
JOHN M. SULLIVAN
* Director May 28, 1999
- -----------------------------------
CHARLES SWINBURN
* Director May 28, 1999
- -----------------------------------
DOUGLAS R. NICHOLS
</TABLE>
* By Gary O. Marino as attorney-in-fact.
II-4
<PAGE> 1
EXHIBIT 5.1
GREENBERG TRAURIG, P.A.
May 28, 1999
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 Amendment no. 1 to 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
4,326,617 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, 1,407,272 are issuable to the Selling
Shareholders, or their permitted assignees, upon the conversion of the Company's
Series A Convertible Redeemable Preferred Stock (the "Series A Preferred Stock"
issued in connection with the Company's private placement completed in January,
1999); 1,415,036 have been issued to the Selling Shareholders in connection with
the Company's private placement completed in March 1999; 195,455 are issuable to
the Selling Shareholders, or their permitted assignees, upon exercise of
warrants issued in connection with the Company's March 1999 private placement;
750,000 are issuable to Barclays Bank PLC upon exercise of warrants issued to
Barclays Bank PLC; 276,623 are issuable to Macquarie Bank Limited upon
conversion of convertible notes held by Macquarie Bank Limited; and 282,231 are
issuable to First London Securities Corporation ("First London") or its
permitted assignees, upon the exercise of a warrant (the "Warrant") issued to
First London in connection with its placement agent services performed on behalf
of the Company pursuant to their letter agreement dated December 2, 1998.
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 December
2, 1998, by and between First London and the Company; the Certificate of
Designation for the Series A Preferred Stock filed with the Secretary of State
of the State of Delaware; the Warrant Agreement dated April 30, 1999 between
Barclays Bank PLC and the Company, the Subscription Agreement dated April 30,
1999 between Macquarie Bank Limited and the Company, the 6% convertible
subordinated note in favor of Macquarie Bank Limited, 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 Series A
Preferred Stock, warrants or convertible notes, as applicable, will be, validly
issued and are, or when issued 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
<PAGE> 2
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
Amendment No. 1 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 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 consent to the incorporation by reference in this amendment no. 1 to the
registration statement on Form S-3 of our report dated March 12, 1999, on our
audits of the consolidated financial statements of RailAmerica, Inc. and
Subsidiaries as of December 31, 1998 and 1997 and for the three years in the
period ended December 31, 1998. We also consent to the reference to our firm
under the caption "Experts."
PricewaterhouseCoopers LLP
Fort Lauderdale, Florida
May 28, 1999
<PAGE> 1
EXHIBIT 23.3
May 28, 1999 Santiago, Chile
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the Incorporation by reference in this amendment no. 1 to
the registration statement filed 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.
Jesus Riveros G ARTHUR ANDERSEN
Partner LANGTON CLARKE
Santiago, Chile
