National Railway Utilization Corp., a company that supplies and manages freight boxcars for use on railroads across the country, is planning an initial offering of 1 million common shares to the general public.
A registration statement for the proposed sale, filed with the Securityand Exchange Commission, states firm and the balance by some current firm and the balance by some current
Investment companies that will handle the stock sale have estimated that National Railway shares will go to market at $12 to $16 a share. If sold at about $12, the boxcar firm would obtain about $7 million for its 600,000 shares.
Proceeds will be used to purchase, assemble or lease boxcars that often are in short supply in some regions of the country. For example, National Railway received about a third of all car rental revenues in the first half of 1978 from consolidated Railway Corp., which was established by the government as a successor to bankrupt railroads in the Northeast and Midwest.
Conrail's initial months in business have been hampered by the bad shape of many freight cars it inherited from bankrupt lines. The railroad turned to National Railway and other companies with boxcars for hire in an attempt to meet some of the demand for freight service along its lines.
Incorporated in 1968, in South Carolina, National Railway has three principal business lines: since 1973, supplying and managing boxcars for the company and for others; since 1968, the construction, repair, rebuilding and sales of boxcars in Pickens, S.C.; and operation of short railroads, such as the wholly owned Pickens Railroad (9.3 miles from Pickens to Easley, S.C.).
National Railway also is seeking to acquire the 43-mile Ogdensburg Bridge and Port Authority Railroad in upstate New York (which it is managing) and the 13-mile Peninsula Terminal Co. switching line in Portland, Ore.
National Railway's principal revenue source, the boxcar fleet, competes with other leasing companies, railroads and American Rail Box Car Co., owned by several major railroads.
Another attempt to enter this business ended up in failure for a former Georgetown firm, Railvest, which attempted to provide a tax shelter for affluent investors in a program of leasing boxcars to railroads but apparently failed because of the complexities of owning, leasing and accounting for the freight cars.
Based in Philadelphia, National Railway has 175 employes with offices in New York State, Washington and South Carolina. Reyenues for the first six months of 1978 totaled $13.3 million compared with $4.47 million a year earlier and profits were $978,729 (28 cents a share) compared with a loss in the 1977 period of $286.414.
Although the firm's cash flow improved in recent months, the registration statement notes that "financial resources remain limited," As of Aug. 31, National Railway had purchase orders and commitments which obligate it to buy boxcars and components through the end of 1979 in an amount of $140 million.
In addition, the company says a large portion of recent revenues and profits came from initial inspection and certification of boxcars and that boxcars it builds from component kits cannot be sold competitively with those from manufacturers - meaning that in periods of boxcar surplus, the firm could suffer a substantial adverse impact.
In the first half of 1978, National Railway managed 3,108 boxcars for its own account and 525 boxcars for others. The firm keeps a close watch on the location and use of its cars by computer to sustain a high level of utilization.
Brokerage firms in the syndicate that will sell off shares are Janney Montgomery Scott, J.C. Bradford and Legg Mason Wood Walker.
Top officers of the rail firm include chairman F.E. Haag, who was president from 1979 to 1974, and John Rees, who succeed Haag as president. Formerly, Rees was president of the Hoboken Shore Railroad.