Portec Rail Products, Inc. Reports 2007 Fourth Quarter and Annual Operating Results...

Portec Rail Products, Inc. Reports 2007 Fourth Quarter and Annual Operating
Results (unaudited)

PITTSBURGH, Pa., Feb. 25 /PRNewswire-FirstCall/ -- Portec Rail Products,
Inc. (Nasdaq: PRPX) today announced unaudited net income of $1,149,000 or
$0.12 per basic and diluted share for the fourth quarter ended December 31,
2007, a 33% increase over unaudited net income of $864,000 or $0.09 per basic
and diluted share for the fourth quarter 2006. The Company also announced
unaudited net income of $6,131,000 or $0.64 per basic and diluted share for
the year ended December 31, 2007, a 33% increase over unaudited net income of
$4,620,000 or $0.48 per basic and diluted share for the year ended December
31, 2006 on average basic and diluted shares outstanding of 9,601,779 for both
periods. Net sales during the fourth quarter 2007 were $24.9 million, a 9%
increase over sales of $22.9 million during the fourth quarter 2006. Net
sales for the year ended December 31, 2007 were $109.5 million, a 10% increase
over sales of $99.2 million for the year ended December 31, 2006.
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Richard J. Jarosinski, President and Chief Executive Officer, said, "We
are very pleased with our fourth quarter and annual results for 2007, and feel
that the year was a success in many areas. The outstanding performance of
Kelsan Technologies, Salient Systems and our Shipping Systems Division, in
particular, contributed greatly to the significant improvement of our top and
bottom line performance during 2007."
"Our friction management product group had a very good year, which was led
by significant top line growth from Kelsan Technologies, but also complemented
by the friction management product sales from our other divisions, with the
overall results helping rail operators to improve rail and wheel life and to
reduce energy consumption, among other benefits. Strong customer demand from
all market segments, a good product mix of highly engineered product models,
and a trend towards full service support and installation revenues were the
basis for our good results in this product group. We also sustained a high
level of research and development to continue to meet application demands of
our customers."
"Salient Systems had a record year, driven largely by strong demand for
wayside detection systems from North American and international customers.
During 2007, we also made good progress in introducing the Rail Stress
Monitor, a new product to manage the thermal forces in the rail, to various
domestic and international customers."
"Our Shipping Systems Division had a record year due to strong demand for
its core load securement products and the Vulcan Chain securement product
line, which was purchased in 2006 and integrated into our Huntington, West
Virginia manufacturing facility in early 2007. During the fourth quarter, we
also had a significant sales contribution from the WinChock(TM) Uni-Level
vehicle securement system, which will improve the railroads' capability to
make market share inroads for the transportation of Class VIII vehicles to
market."
"Our track component product group, which includes rail anchors, spikes
and rail joints, continued to significantly contribute to our operating
results during 2007. We faced many challenges in this product group,
including the absorption of the bonded joint warranty costs within our Railway
Maintenance Products Division. Despite these challenges, we invested in
research and development and capital improvements in order to better position
ourselves for what we see as continued long term demand for this group of
products as our customers continue to invest in rail infrastructure."
Mr. Jarosinski concluded, "We are cautiously optimistic about the outlook
of our industry despite some economic slow down predictions. We feel that we
are well positioned for maximizing the benefits of strong capital and
maintenance spending levels anticipated by our customers in 2008. Our
operational, product and marketing strategies implemented during 2007 have
made Portec Rail a stronger and more competitive company for the foreseeable
future."
Portec Rail Products, Inc., headquartered in Pittsburgh, Pennsylvania,
manufactures, supplies and distributes a broad range of railroad products,
including rail joints, rail anchors and spikes, railway friction management
products, railway wayside data collection and data management systems and load
securement systems. The Company's largest business unit, the Railway
Maintenance Products Division, operates a manufacturing and assembly plant in
Huntington, West Virginia, an engineering and assembly facility in Dublin,
Ohio (Salient Systems), and is also headquartered in Pittsburgh, Pennsylvania.
The Company also has two Canadian subsidiaries, one of which is headquartered
near Montreal with a manufacturing operation in St. Jean, Quebec and the other
headquartered in Vancouver, British Columbia that is a technology and
manufacturing facility (Kelsan Technologies). In addition, the Company sells
load securement systems to the railroad freight car market through its
Shipping Systems Division located near Chicago, Illinois. The Company
manufactures railway products and material handling equipment in the United
Kingdom with operations in Leicester, England and Sheffield, England. Portec
Rail Products, Inc.'s web site address is www.portecrail.com.
The foregoing information contains forward-looking statements. The
Company cautions that such statements are subject to a number of
uncertainties. The Company identifies below important factors that could
affect the Company's financial performance and could cause the Company's
actual results for future periods to differ materially from any opinions or
statements expressed with respect to future periods in any current statements.
In particular, the Company's future results could be affected by a variety of
factors, such as customer demand for our products; competitive dynamics in the
North American and worldwide railroad and railway supply industries; capital
expenditures by the railway industry in North America and worldwide; the
development and retention of sales representation and distribution agreements
with third parties; fluctuations in the cost and availability of raw materials
and supplies; currency rate fluctuations; and exposure to pension liabilities.
Additional cautions regarding forward-looking statements are provided in the
Company's Form 10-K for the year ended December 31, 2006 and Form 10-Q for the
period ended September 30, 2007 under the heading "Cautionary Statement
Relevant to Forward-looking Statements." Unaudited information at and for the
year ended December 31, 2007 is subject to adjustment as a result of the year-
end audit. The Company does not undertake, and specifically disclaims, any
obligation to update or revise any forward-looking statement, whether written
or oral, that may be made from time to time by or on behalf of the Company.

Portec Rail Products, Inc.
Consolidated Statements of Income
(In thousands, except share and per share data)

Three Months Ended Twelve Months Ended
December 31, December 31,
2007 2006 2007 2006
(Unaudited) (Unaudited) (Audited)

Net sales $24,931 $22,856 $109,503 $99,225
Cost of sales 16,767 15,445 74,995 68,848
Gross profit 8,164 7,411 34,508 30,377

Selling, general and
administrative 5,906 5,891 22,781 22,117
Amortization expense 317 290 1,241 926
Operating income 1,941 1,230 10,486 7,334

Interest expense 300 313 1,247 1,105
Other (income) expense,
net (43) (33) 246 140
Income before income
taxes 1,684 950 8,993 6,089
Provision for income
taxes 535 86 2,862 1,469

Net income $1,149 $864 $6,131 $4,620

Earnings per share
Basic and diluted $ 0.12 $ 0.09 $ 0.64 $ 0.48

Average basic and
diluted shares
outstanding 9,601,779 9,601,779 9,601,779 9,601,779

Consolidated Condensed Balance Sheets
(In thousands)

December 31, December 31,
2007 2006
(Unaudited) (Audited)
Assets
Current assets $45,635 $45,793
Property, plant and equipment, net 11,121 10,403
Goodwill and other intangibles, net 46,601 44,920
Other assets 869 566
Total assets $104,226 $101,682

Liabilities and Shareholders' Equity
Current liabilities $21,190 $21,022
Other liabilities and long-term debt
obligations 23,139 27,564
Shareholders' equity 59,897 53,096
Total liabilities and shareholders' equity $104,226 $101,682

SOURCE Portec Rail Products, Inc.

Richard J. Jarosinski, President and Chief Executive Officer of Portec Rail
Products, Inc., +1-412-782-6000, ext. 4230