|Railpower RP switcher.|
Railpower Technologies, makers of systems for hybrid locomotives and switch engines and derivative markets, recently announced that it does not expect to meet its unit production target of 90 to 100 locomotives for 2006 and its gross margin target of 30% by the end of the fourth quarter. (Earlier post.)
The Company has reviewed its production capabilities and has revised its unit production target to between 50 and 65 units for 2006.
Railpower expects increased expenditures in the third and fourth quarters of 2006 as a result of increased inventory purchases necessary to increase production. Fixed costs will also temporarily increase as design and procurement activities accelerate to meet production demands. Management say they are comfortable with the projected cash position but are also in the process of evaluating certain financing alternatives in support of its business plan.
|Railpower’s Green Goat hybrid switcher.|
Subsequently, Railpower announced that Norfolk Southern Railway will purchase two Railpower RP-series multi-engine, low-emission, fuel-efficient, road switcher locomotives for delivery as kits in 2006. (Earlier post.)
The purchase order includes an option for Norfolk Southern to purchase additional units between 2007 and 2009.
Under the terms of the purchase order, Norfolk Southern will complete the conversion of its conventional locomotives with Railpower-supplied kits for the model RP20BD road switcher, which includes all components, drawings, and assembly support.
Railpower’s RP-Series road switchers can provide fuel savings of up to 35% and reduce NOx and particulate emissions by approximately 80% percent. With this order, Railpower’s order backlog currently stands at 152 units, of which 105 are RP-series locomotives.