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Mike Baynes Always interested in changing the subject...
mbaynes@teleport.com
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> HOLLYWOOD, Fla.--(BUSINESS WIRE)--March 17, 1997--First American
>Railways, Inc. (NASDAQ, Small Cap:FTRN) an entertainment-based
>passenger rail company, announced today that it has acquired from
>Charles E. Bradshaw, Jr. all of the common stock of The Durango &
>Silverton Narrow Gauge Railroad Company (D&SNG), a scenic railroad
>based in Durango, Colorado, that attracts approximately 200,000
>passengers annually and has been a popular site for motion picture
>productions, including Butch Cassidy and the Sundance Kid, among many
>others.
> First American Railways will maintain the strict standards of
>authenticity and safety of this registered National Historic Landmark
>while also promoting the magnificent scenery of the Rocky Mountains.
> The D&SNG operates a three and one-half-hour, 45-mile scenic
>railroad passenger service between the old-western town of Durango
>and the 19th century mining town of Silverton, operating four trains
>daily during the peak of the summer season. After an approximate
>two-hour layover in Silverton for lunch, shopping and sightseeing,
>the train returns to Durango. Durango was built in the 1880's and
>the historic town combines a Victorian atmosphere with modern day
>shopping and dining.
> The purchase price consisted of seller financing in the amount of
>approximately $10 million; cash payments totaling approximately $5
>million comprised of $2 million which had been paid as a deposit
>prior to closing and $3 million provided by institutional financing
>from NationsBank N.A. (South); 200,000 shares of First American
>Railways common stock; and, common stock purchase warrants to
>purchase 1,610,000 shares exercisable at $3.50 per share.
> NationsBank financing was also utilized to replace existing debt
>of the D&SNG and provide working capital for the company's
>operations.
> Also under the agreement, Charles E. Bradshaw, the former owner,
>president and chief executive officer of the D&SNG, has been elected
>to the First American Railways board of directors, expanding the
>board to eight.
> Raymond Monteleone, president and chief operating officer of
>First American Railways, Inc., remarked, "The D&SNG's present $45
>average revenue per passenger will generate substantial revenue and
>cash flow from operations to the company well before we launch our
>Florida Fun-Train. We are planning marketing and revenue
>enhancements that are intended to significantly increase the number
>of passengers and passenger revenue.
> "This acquisition is an important step towards our goal to
>include scenic tourist destination trains with entertainment- based
>Fun Trains in our growth strategy," Monteleone concluded.
> Mr. Bradshaw added, "We have great confidence that First
>American Railways will operate the railroad in the same manner as has
>been the practice for the past 16 years. They have the commitment
>and demonstrated expertise that we believe will assure the continued
>success of the D&SNG."
> At a formal ceremony scheduled for later today, Mr. Bradshaw
>will present Allen C. Harper, chairman and chief executive officer,
>and Mr. Monteleone to the employees of the D&SNG.
> The unaudited results of operation (after proforma acquisition
>adjustments) for D&SNG's fiscal year ended December 31, 1996 were
>approximately:
> Revenue $9 million
> Pre-Tax Income $2 million
> (Excluding Acquisition Debt Costs)
> Operating Cash Flow $3 million
> (Before Acquisition Debt Costs)
> Operating Cash Flow $1 million
> (After Acquisition Debt Cost but excluding Bank Loan
> Principal Payments and Capital Expenditures)
> First American Railways, Inc. is a publicly held,
>entertainment-based passenger rail company with headquarters in
>Hollywood, Fl., whose mission statement is:
> To be the recognized leader in providing an innovative, quality
>entertainment-based passenger rail service, offering our customers,
>communities, employees and shareholders an experience which exceeds
>their expectations.
> Certain statements in this Press Release constitute "forward-
>looking statements" within the meaning of the private Securities
>Litigation reform Act of 1995. In particular, statements contained
>herein regarding the consummation of future acquisitions, as well as
>expectations with respect to future revenues and business expansion,
>are subject to known and unknown risks, uncertainties and
>contingencies, many of which are beyond the control of First American
>Railways, Inc., which may cause actual results, performance or
>achievements to differ materially from anticipated results,
>performance, or achievements. Factors that might affect such
>forward-looking statements include, among others, overall economic
>and business conditions, the demand for the company's services
>competitive factors, regulatory approvals and the uncertainty of
>consummation of future acquisitions. Additional factors which may
>affect the company's business and performance are set forth in the
>company's filings with the Securities and Exchange Commission.
> CONTACT: David Mandy John Chuhran, Media Consultant
> Porter, Le Vay & Rose, Inc. Porter, Le Vay & Rose, Inc.
> (212) 564-4700 (212) 564-4700
> or
> Contact:
> Raymond Monteleone, President
> (954) 920-0606
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