Volume 2, Issue 7
July 13, 2001

Inside this issue:
First-time construction of table ends with success
Finance & Accounting Department gains new CFO
Employee News
Anniversaries
Jacksonville, Florida, provides multitude of services

The list of accomplishments of Watco Companies, Inc. is wide and vast. Almost constantly, something is improved or created and those moments deserve recognition. This past February, a first-time project turned into a success.

Fabrication of a railcar transfer table weighing 40 tons, with a 70-ton capacity, began mid-February at the Watco Companies Warehouse in Pittsburg, Kansas.

Transfer tables are made to do just as the name suggests, transfer a railcar from one place to another. Similar to an overhead crane in appearance, the table runs in a ground pit and has rails on top for a railcar or locomotive to run on. Once the car is loaded onto the table, it delivers it to a different track location.

How did Watco come to build this table? Dennis Madison, Vice President of Mechanical Marketing, received an order from Gunderson Southwest, a Greenbrier Company, located in Cleburne, Texas. Cleburne is about 60 miles south of Dallas/Fort Worth.

Gunderson's present table was over 50 years old and not only needed replaced, but also updated electrification.

The Watco Companies Warehouse was chosen because of it’s capacity to house a 16 foot wide, 63 foot long weldment that weighed 80,000 pounds. Also, thinking ahead to the finished product, the warehouse already had the overhead crane capacity to load the table for transport.

The employees from the Pittsburg car shop had never built a transfer table and in fact this table was the first ever to be built by Watco. After a few small modifications this location provided all the ingredients needed to fabricate such a piece of machinery.

With Dennis Madison overseeing the project, the warehouse employees went to work. It took a team effort to finish the table. Buehl Pool along with his brother, Lee Pool, and Jason Dunbar performed the welding of the table. Once the table was constructed, car shop painters Matt Wahl and Jon Holt painted the table. Also, Brian Guy of the warehouse staff provided many personal tools to assist with the project.

Two and a half months later, on May 2nd, the table was completed and loaded onto a semi-tractor trailer. After the difficult task of traveling down to Texas with the table, it was installed on May 5th. The table is in use between Gunderson's two largest repair shops and serves 23 track locations. This particular table can creep at 30 feet per minute or travel up to 150 feet per minute.

Proof yet again, that Watco's employees, when given a challenge no matter how complex, will succeed.

Eight years…two states… 12 offices… eight job titles…six buildings…

To some that may add up to equal a roamer, but to most it adds up to experience and dependability. Those are two qualities Randall Readinger can claim.

Randall also lays claim to one other title these days. Chief Financial Officer of Watco Companies, Inc. So rack up one more job title, one more office and one more building. Who's counting anyway?

Graduating from Pittsburg State University in 1984, Randall began a career in Finance and Accounting shortly after. Working for Tulsa, Oklahoma, based companies such as Transok, Lowrance Electronics, Inc, and Arthur Andersen and Co. (a Large 8 Firm) Randall has clocked many hours of experience and learned how to make a Finance and Accounting department work smoothly. He has worn the shoes of public accountant, controller, senior auditor and director.

It's only been a month since Randall began his position with Watco, but he will be the first to tell you he's already taking in a lot.

"There are many things to address in this department, but right now I'm very busy with this acquisition of the K&O Railroad. This is a major gain for Watco, and increases the stakes. I've had the opportunity to work more overtime this month than I've ever worked."

Of course, besides the acquisition there are multiple issues to deal with as CFO. Cashflow may be the easiest way to describe it.

Not everyone has the understanding of finance like those who juggle numbers for a living, but three commonalities ring out within offices of CFO's. Interpretations of these goals can be found in many mission statements or job descriptions, but all boil down to the same point. The following goals are expressed according to the Office of the Chief Financial Advisor of the United States Department of Agriculture. 1)Promote sound financial management through leadership, policy and oversight. 2)Create an infrastructure to carry out financial management policies. 3)Operate a financial center that produces timely and reliable information.

These are goals Randall plans to implement on a daily basis. Randall's arrival at Watco is only the first of a line of improvements that will be seen. All of those improvements will result in meeting the above mentioned goals.

"We are going to improve our flow of information, and I would like to see more timely implementation of information, the reports to the field. We want to provide rock solid information. Timeliness and accuracy are extremely important. I would also like to see this company be able to forecast, so we don't just use historical data, but can predict beyond the present," Randall said.

Watco presents a significant change for Randall also. Coming from such companies as Arthur Anderson, which is a "Large 8 Firm" and Thrifty Rent-A-Car Systems with multi-million dollar annual revenues, there's a definite change in size.

"Watco is smaller than other companies, in terms of money. Thrifty was nearly 300 million dollars yearly. So this is a smaller scale, magnitude."

But there's a certain attraction to a small business, according to Randall.

"Watco has a good small company feel. Everyone has a function, yet supports one another. There's an attraction to a small company, less bureaucracy."

Those factors are not the main draw for Randall though. A success rate of a growing business and a man with a vision are what brought Randall back home.

"I have known Rick (Webb) since college, and met Terry Towner (Financial Consultant for Watco) back in 1997 while working on an acquisition. We all worked on that project and since then Rick and Terry have kept me up to date on the progress the company has made. I have been impressed with what Rick has done with the company…his vision for the future of Watco. It's exciting to be part of something growing like this, something so successful. And of course, the opportunity to come back close to my family helped."

Randall grew up in Fort Scott and his wife is from Neosho, Missouri. Coming home meant some positive changes for his family.

"I have family spread around here, Liberal (Missouri), Redfield and Fort Scott (Kansas). That's nice to be close again. Being able to have family at my daughters birthday party this month was something we couldn't do in Tulsa".

So it seems there are winners all around…Watco gains an experienced CFO and Randall gets to come back to a familiar area to become a team member of a company growing like wildfire.

"I just want to ensure we are contributing our part to the company's growth. We, as a department, need to become more sophisticated and disciplined. There are a lot of mountains and challenges to overcome as we grow."

Charles Higginbotham joined Watco Switching this past February. Charles is the Location Manager in Fernandina Beach, Florida. Charles brings years of experience as an electrician, welder, and industrial equipment mechanic. Charles also spent 3 years in the United States Army as an aircraft electrician. Charles has a wife, Angel, and two daughters, Alyson 2, and Elizabeth 8 months.

Also joining the Fernandina Beach location is Bryan Auck. Bryan’s position is Car Cleaner. During the last few years, Bryan has owned his own business and held positions as Supervisor.

March brought the addition of Robert (Bob) Davidson. Bob is the Vice President of Mechanical Services Marketing and works out of the corporate office in Pittsburg. Experience as VP of Sales for companies such as Coordinated Railway Services and United Industries back his knowledge. Bob and his wife of 33 years, Teresa have 2 daughters and 2 grandchildren.

In May, Watco Companies, Inc. added Robert (Bob) Snow as Maintenance Supervisor of the corporate office in Pittsburg, Kansas. Bob spent 13 years as Supervisor of Maintenance for the Columbus, Kansas, School district. Bob’s son, Brad Snow, is also employed in the corporate office, as Accounts Receivable Manager.

Also joining the Maintenance department in Pittsburg is Caleb White. Caleb brings 9 years of Farm Management experience and also spent time working construction. Caleb is a Biology/Pre-Med major at Pittsburg State University and a member of the football team.

Travis Stepps and Earl Henry also joined forces with the Maintenance department this summer. Both are students at Pittsburg State University. Travis is also a member of PSU’s football team.

On the finance side, with the addition of Randall Readinger, Cecil Taylor will now take the position of Controller for Railroads, and Tamara Hanson will be the Controller for Watco Companies, Inc.

The Information Technology department expanded in June with the addition of Larry Van Houten. Larry has over 20 years experience in mainframe programming and formerly was the Network Administrator for NPC, International. Married for 34 years, Larry and his wife Donna have 2 daughters and 3 grandchildren.

Seth Baker, I-T Assistant at corporate was married Friday, June 8 in Fredonia, Kansas. After a honeymoon to Key West, Florida, Seth and his wife Sarah are home in Pittsburg. Sarah will be a sophomore in nursing at Pittsburg State University in nursing and Seth will be a senior in Computer Information Systems.

Bobbie Pitts is the latest addition to the Finance and Accounting Department at Watco Companies in Pittsburg. Bobbie is a familiar face to many because she worked as receptionist 3 years ago. After starting a family with her husband Jerry, Bobbie returned in June to work in accounts payable. Bobbie and her husband have two sons, Austin 6 and Tanner 2.

Hard-working, dedicated employees provide the backbone for a successful company. That is why we will now take the opportunity each month to congratulate and thank employees who have reached a milestone with Watco Companies, Inc. Please take the time to say "Thanks" to the following people when you see them.

1 year--Aaron Nelson, Curt Schepper, Jimmy McClain, Barbara Crawford, Lisa Grilz, Anthony Allender, Robin Kooken, Jesse Gage, Dean Bastian, Nancy Newberry, Anthony Taylor, Michael Lochner, Joel Greene, Michael Hooven, Ryan Smith, Timothy Edinger, James Franks III, Jamie Black, Robert Milwood Jr, Neil Sinclair, Darin Grundeman, Bob Schatzel, Gary Carnes.

2 years of service-, Isaac Parker, Reynaldo Moreno, Jimmy Loffer, Curtis Counts, Bill Miller, Steven Landis, Stephen Bruce, Curtis Brown, Sheila Smith, Harry Smith, Randy Peterson, Jerry Waun III.

3 years-Don Inman, Jr., Kaye Lynne Webb, Larry Scott, Dwayne Keeton, Artis McGinnis, Kenneth Davenport, Edward Truitt, Timothy Seymour, Jason Williams, Robert Drayton, Henry Euten, randy Wessel, John Chambers.

4 years-James Hagans, Chad Wilson, Danile Smith, Gary Brown, Rodger Crawley, Dale Anderson, Joe Bennett, Toddy Martin.

5 years-Edwin Knouse, Eddie Collins, James Hinson. 6 years-C. Davis, John Moore. 7 years-Tony Benson, David Monson Jr, Jose Hernandez, Kenny Rogers, Raymond Gray III, Ralph Bean. 9 years-Chad Stalford. 10 years-Gary Lundy, Richard Mansfield.

11 years-Earl Blythe, John Wise.?12 years-Shane Stalford. 13 years-William Crites. 14 years-Michael Skipper. 15 years-Deborah Moody. 16 years-Ed Foster, Jeff Van Buren. 18 years-Carl McKeown, Mark Blazer.

27 years-William Wise.

Watco Mechanical Services in Jacksonville, Florida is a Railcar and Locomotive Repair facility located on the west side of Jacksonville. This facility houses two additional Profit Centers, Railcar Mobile Services and Watco Leasing.

The Jacksonville facility was previously known as Quantum Rail Services. Quantum merged with Watco Companies in August of 1998 to give Watco a better presence in the southeast and add better locomotive repair support to the overall company.

The Shop is managed by Charlie Sigley and offers a wide variety of services. Light maintenance, heavy bad order and wreck repairs, along with exterior paint and interior lining of railcars are some of the services offered. Currently the railcar shop is running mostly Autorack type cars and preparing for an interior paint program on Covered Hopper cars. The railcar side of the business is also producing side frames, bolsters and boxcar doors as reconditioned component parts as well as a variety of new fabricated parts. A full service paint and blast facility is also available for both Railcar and Locomotives. Mechanical service's volume of business is beyond 400 railcars and 60 locomotives per year. Currently, 49 people are employed by this division and 36 of those are original employees.

The second component of the Jacksonville location is Mobile Repairs, which became a separate Profit Center in January of 2001. The Manager for this Profit Center is Jerry Klidies. The main service offered is railcar maintenance for our customers at their location. Currently these services are provided to Shortline Railroads (not owned by Watco Companies) , electrical power generating facilities and owners of small railcar fleets. Locations can be found in South Carolina, Georgia, Missouri and Florida, although services have been performed in Virginia, Vermont, Arkansas, Kansas, Oklahoma and surrounding states. Mobile repairs averages 300 railcars per month and of the units 20 employees, 6 of those are original from time of merger.

The third Profit Center in the Jacksonville location is Watco Leasing. It was added in May of 1999. Tony Bybee is the Manager, and he also serves as Mechanical Services Corporate Quality Assurance Manager. Watco Leasing provides locomotives and railcars to both internal and external Customers. Short and long term leasing and leasing with purchase options are available. Tony is charged with the task of providing a low cost option to both internal and external customers as well as asset utilization. Currently the main focus has been on providing the railroad side of our business with the right size locomotives for the new venture, K&O Railroad. Presently two people are employed by the leasing services.

(This is an on-going series on Watco Companies profit centers.)

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                               Watco Companies, Inc. * 315 W. 3rd Street * Pittsburg, KS 66762 * Phone: 620-231-2230 * Fax: 620-231-0812