RailAmerica's Marino steps down

Railway Age, May, 2004

After leading RailAmerica's growth from a $1 million, one-railroad operation to a $360 million, 47 railroad holding company, Gary O. Marino, 59, has retired. He served as chairman of the Board of Directors since the company's formation in 1992, taking on the roles of CEO in 1994 and president in 1996. The chairmanship position was sprit from his responsibilities in mid-March, when William Pagonis took over, after holding the positions of vice chairman of the Board and chairman of the Corporate Governance and Nominating Committee at RailAmerica.

"With the recent announcement of the execution of an agreement to sell Freight Australia, my work at RailAmerica is now complete," said Marino of the announcement last month. "The company is well positioned for future, sustained growth and the proceeds from the pending Australia railroad sale will further strengthen the balance sheet and provide the capital for the company to bolster its strong footprint in the North American railroad industry."

In a continued effort to reduce debt and focus on its core North American rail business, RailAmerica has agreed to sell 100% of its ownership of Freight Australia. Pacific National, an Australian rail freight logistics firm, will pay $214 million for the railroad, which RA purchased in April 1999 from the Victorian State Government for $103 million. Upon closing of the transaction-slated for this year's second quarter--$59 million of senior debt will be paid off with the proceeds of the sale, according to RailAmerica.

Ronald D. Redfearn will serve as active president in the interim, while the company searches for Marino's successor.

RailAmerica will record a charge of about $0.18 $0.20 per share in the second quarter for Marino's retirement benefits. Due to this payout, RailAmerica has revised its forecast for the first-quarter and full-year 2004. The company now expects full-year earnings from continuing operations to be $0.55 to $0.65 per share--about 26% lower than the $0.75 to $0.85 per share originally expected. Earnings from continuing operations for the first quarter, which ended March 31, were expected to be within a range of $0.12 to $0.14 per share--the low end of the company's annual guidance range.