Providence and Worcester Railroad Company Announces Third Quarter Results

Providence and Worcester Railroad Company (NASDAQ: PWX) reported its results for the third quarter of 2009.

The Company had net income of $158,000 for the quarter compared to net income of $534,000 in the third quarter of 2008. Diluted income per common share was $0.03 for the quarter compared to $0.11 in the third quarter of 2008. Other income for the third quarter of 2008 included $484,000 of gains realized from the sale of surplus property and equipment compared to just $27,000 of such income in the current quarter.

Operating revenues for the third quarter of 2009 decreased $2.1 million, or 25.4%, to $6.1 million from $8.2 million in the third quarter of 2008. This decrease is primarily attributable to declines in the volume of both conventional and container freight traffic.

Due to the continuing state of the United States and world economies, shipments of most commodities handled by the Company continued to decline during the quarter. Signs indicating future increases in traffic volume have been mixed and, therefore, management cannot definitely predict when economic conditions will improve sufficiently to enable the Company to return to operating profitability.

Operating expenses for the quarter decreased by $2.0 million, or 24.4%, from the third quarter of 2008. Reductions in diesel fuel costs and usage accounted for $733,000 of the decrease. An additional $390,000 reduction in operating expenses resulted from net funds received from an unrelated third-party shipping customer to fund track maintenance expenditures in exchange for the right of that customer to utilize certain track maintenance credits, which had been available to the Company.

During the nine months ended September 30, 2009, the Company had a net loss of $902,000 ($0.19 per common share) compared to a net loss of $68,000 ($0.02 per common share) during the first nine months ended September 30, 2008.

Statement of Operations (Unaudited)
(Dollars in Thousands Except Per Share Amounts)
		For the Three Months						For the Nine Months
		Ended September 30,						Ended September 30,
		2009			2008			2009				2008
Operating Revenues		$	6,072		$	8,136		$	17,124			$	22,226
Other Income			160			617			1,494				924
Total Revenues			6,232			8,753			18,618				23,150
Operating Expenses			6,019			7,964			19,900				23,253
Income (Loss) before Income Taxes			213			789			(1,282	)			(103	)
Provision for Income Taxes (Benefit)			55			255			(380	)			( 35	)
Net Income (Loss)		$	158		$	534		$	(902	)		$	(68	)
Weighted Average Number of Shares Outstanding, Diluted			4,876,735			4,882,183			4,805,514				4,787,033
Diluted Income (Loss) Per Share		$	.03		$	.11		$	(.19	)		$	(.02	)

This release contains “forward-looking statements” within the meaning of section 21E of the Securities and Exchange Act of 1934, as amended. These forward-looking statements represent the Company’s present expectations or beliefs concerning future events. The Company cautions that such statements are necessarily based on certain assumptions which are subject to risks and uncertainties, including, but not limited to, changes in general economic condition, and changing competition which could cause actual results to differ materially from those indicated herein. Further information on these risk factors is included in the Company’s filings with the Securities and Exchange Commission.