Auto-Train Corp. lost $3.3 million last year, will have to write off another $1.4 million in "audit adjustments" and will not show a profit for the first quarter of 1979, President Eugene Kerik Garfield announced yesterday.
The total 1978 deficit of $4.7 million is the biggest annual loss ever for Auto-Train, which recently applied for at least $3 million in federal aid.
The company announced the approximate size of its deficit, but said it has received an extension of time from the Securities and Exchange Commission in filing its complete annual report, which was due April 1.
The $4.7 million loss is an unaudited figure, the announcement said. The company did not supply comparative data for the previous year because it said its fiscal year has been changed twice recently.
In the eight months ended Dec. 31, 1977, Auto-Train lost $2.5 million. And in the three months ending Sept. 30, 1978, it reported a $1.59 million deficit.
The $1.4 million "audit adjustment" that Auto-Train plans to take includes the cost of equipment that was damaged in a derailment in February, 1978, provisions for settling lawsuits that have been filed against the company over accidental injuries, and unspecified "adjustments to year-end physical inventory.
Vice President Richard Goldstein said the extraordinary writeoff was taken " because its a bad year and its not going to hurt to make it a little worse by clearing up some of these things."
Added Goldstein, "essentially it was a very bad year. We've been under a great deal of pressure. But we're doing a lot better now."
Garfield, who could not be reached for comment on the company's announcement, said in a press release that "the company's major problems are behind it and it is apparent that Auto-Train's new tariff and marketing program introduced during the first quarter of 1979 are now contributing to improved operating results."
The announcement said, however, that "the company also anticipates reporteing a loss for the first quarter of calendar 1979."
Goldstein said the company's loses continued this year because "we lost momentum," because fares on the train to Florida were too high to compete with cut-rate airline flights and because of an unsuccessful advertising program.
Goldstein predicted profits will return later this year, saying passenger bookings are "running 10 percent ahead of last year" as a result of a new marketing campaign and fare cuts that went into effect in January.
The company expects action within 30 to 45 days on two applications for federal aid Goldstein added.
Auto-Train has applied to the Economic Development Administration, an agency of the Department of Commerce, for a $3 million loan guarantee and is also seeking possible help from the Federal Railroad Administration of the Department of Transportation.
The funds would be used, Garfield has said, to diversify into the freight car repair business and to extend the northern terminus of the Auto-Train line from Lorton, Va., to Newark, N.J.
Auto-Train carries passengers and their cars from Lorton to Sanford, Fla., and has announced plans to run a similar service from near Mexico City to the United States border.
Despite the heavy losses, Goldstein said the company has adequate cash to continue operations during the summer months, when it usually loses money because of the decline in tourist traffic to Florida.
Operating in the red for more than two years, Auto-Train has had trouble paying its bills in recent months. It's three biggest creditors have guaranteed a $3 million bank line of credit to keep the railroad running.