Press Releases

Greenbrier Announces Special Charges, Second Quarter Losses, New Orders And Tax Reclaims

The Greenbrier Companies, Inc. announced today that it took $19.2 million of pre-tax ($12.2 million after-tax) write-downs and other special charges in its second quarter ended February 28, 2002. Greenbrier Europe accounted for the bulk of the special charges, with a $14.8 million write-down of intangible assets, and a $3 million charge for a previously announced downsizing of its operations. An additional $1.4 million of special charges were taken in North American operations due to workforce and other reductions. These actions will reduce future costs, consistent with the Company's objectives. The Company will realize cash from tax benefits in 2002 associated with the special charges.

After the $19.2 million of special charges, net loss for the second quarter of fiscal 2002 was $16.8 million, or $1.19 per share, compared to net earnings of $70,000 for the comparable quarter of the prior fiscal year. Revenues for the second quarter of fiscal 2002 were $99 million, down from $157 million in the second quarter of fiscal 2001.

For the six months ended February 28, 2002, revenues were $179 million compared to $311 million in the same six-month period of fiscal 2001. The net loss for the first six months of fiscal 2002 was $21.9 million, or $1.55 per share, compared to net earnings of $3.1 million, or $.22 per share in the same six-month period of fiscal 2001.

The Company's new railcar manufacturing backlog as of February 28, 2002 was 1,900 units valued at $100 million, compared to 2,400 units valued at $130 million at November 30, 2001. Subsequent to quarter end, an order for 600 railcars valued at approximately $30 million was received.

William A. Furman, president and chief executive officer, noted, "During the present economic and rail supply industry downturn, our strategies for managing the Company have been set on a few fundamental points. These include strengthening our balance sheet, managing for cash flow and liquidity, reducing expenses, and increasing our market share for new freight cars. The actions behind the special charges support these strategies, particularly our tax planning and balance sheet objectives."

"The European restructuring costs and investment write-down," Furman continued, "are consistent with our plans announced in January, 2002 to downsize the European organization and attain profitability. The plan is achieving commercial success and generating cost savings. Losses for the second quarter, before special charges, were $1.6 million less than the first quarter ended November 30, 2001."

"In the quarter, the Company implemented tax strategies to take advantage of certain favorable tax provisions in the recently enacted U.S. economic stimulus package. Until recently, we have not been able to claim European losses on our U.S. tax returns, nor benefit from them in Europe. As a result of these strategies, during our second quarter, $6.1 million of tax benefit associated with Europe was recognized. The Company will seek to obtain additional tax benefits during the remainder of fiscal 2002 as a result of tax planning opportunities."

Mark Rittenbaum, senior vice president and treasurer, said: "In addition to the $19.2 million of special charges, Greenbrier established reserves for $2.5 million pre-tax in operating costs during the quarter. These costs are not expected to recur in fiscal 2002. Greenbrier continues to focus on liquidity, cash flow, and a strong balance sheet, rather than reported profits, during the current downturn. Cash balances are nearly $50 million. Unused bank lines of $113 million were available at quarter end. The Company is not borrowing on any of its North American bank lines. Almost $45 million in debt has been paid down fiscal year to date; $30 million of debt was repaid during the second quarter."

"EBITDA, before special charges, minority interest and equity in unconsolidated subsidiary," Rittenbaum continued, "was $5 million for the second fiscal quarter of 2002 and $12 million fiscal year to date. The write-down of intangible assets will reduce future amortization expense by $1.5 million (pre-tax) annually. Cash flow from operations was $2.5 million for the first six months of the fiscal year. While North American manufacturing operations are currently operating at a book loss, they are producing positive EBITDA. European operations are currently generating book losses and negative EBITDA. Leasing and services, railcar repair, refurbishment, wheels services, and marine manufacturing operations continue to be profitable, both on a book and cash basis. Cash flow from our leasing operations remains highly positive."

The Greenbrier Companies, headquartered in Lake Oswego, Oregon, is a leading supplier of transportation equipment and services to the railroad industry in North America. Greenbrier builds new railroad freight cars in the U.S., Canada and Mexico, and repairs and refurbishes freight cars and wheels at eleven locations across North America. The company also builds new railroad freight cars and refurbishes freight cars for the European market through its manufacturing operations in Poland and various sub-contractor facilities throughout Europe. At Greenbrier's Portland, Oregon manufacturing facility, it builds ocean-going barges for the maritime industry. Greenbrier owns or manages a fleet of approximately 49,000 railcars.

Except for historical information contained herein, this press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation, statements as to expectations, beliefs, and future financial performance. These forward-looking statements are dependent on a number of factors, business risks and issues, a change in which could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Such factors, risks and issues are set forth from time to time under "Forward-Looking Statements," in Management's Discussion and Analysis of Financial Condition and Results of Operations in Greenbrier's SEC filings and reports. Any forward-looking statement speaks only as of the date on which such statement is made. Greenbrier undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made.

The Greenbrier Companies will host a teleconference to discuss first quarter results. Teleconference details are as follows:

    Wednesday, April 10, 2002
    7:30 a.m. Pacific Daylight Time
    Real-time Audio Access:  ("Newsroom" at )

Please access the site 10 minutes prior to the start time. Following the call, a replay will be available on the same site.

                                              THE GREENBRIER COMPANIES, INC.

    (In thousands, except per share amounts, unaudited)

                                                February 28,    August 31,
                                                    2002           2001
    Cash and cash equivalents                      $49,544        $77,299
    Accounts and notes receivable                   45,970         50,555
    Inventories                                     92,506         94,581
    Investment in direct finance leases             83,105        103,576
    Equipment on operating leases                  147,421        150,126
    Property, plant and equipment                   72,836         76,898
    Intangible assets                                9,159         26,450
    Other                                           25,010         26,695

                                                  $525,551       $606,180

  Liabilities and Stockholders' Equity
    Revolving notes                                $18,995        $32,986
    Accounts payable and accrued liabilities       130,132        135,898
    Deferred participation                          54,240         56,176
    Deferred income taxes                           21,869         26,920
    Notes payable                                  155,418        177,575

    Subordinated debt                               29,261         37,491

    Minority interest                                4,928          5,025

    Stockholders' equity                           110,708        134,109

                                                  $525,551       $606,180

                                              THE GREENBRIER COMPANIES, INC.

    (In thousands, except per share amounts, unaudited)

                             Three Months Ended         Six Months Ended
                                February 28,              February 28,
                               2002        2001         2002        2001

    Manufacturing            $79,512     $135,175      $141,155   $269,954
    Leasing & services        19,557       21,743        37,796     40,948
                              99,069      156,918       178,951    310,902

  Cost of revenue
    Manufacturing             79,880      129,490       138,164    249,854
    Leasing & services        10,631       10,983        20,862     21,178
                              90,511      140,473       159,026    271,032

  Margin                       8,558       16,445        19,925     39,870

  Other costs
    Selling and
     administrative expense    9,320       10,454        19,691     24,384
    Interest expense           4,683        5,448        10,170     10,442
    Special Charges           19,212           --        19,212         --
                              33,215       15,902        49,073     34,826

  Earnings (loss) before
   income tax expense,
   minority interest,
   equity in unconsolidated
   subsidiary               (24,657)          543      (29,148)      5,044

  Income tax benefit
   (expense)                   8,022      (1,402)         8,107    (2,773)

  Earnings (loss) before
   minority interest, equity
   in unconsolidated
   subsidiary               (16,635)        (859)      (21,041)      2,271

  Minority interest              225          104            97       (19)

  Equity in unconsolidated
   subsidiary                  (416)          825         (925)        817

  Net earnings (loss)      $(16,826)          $70     $(21,869)     $3,069

  Basic earnings (loss)
   per common share          $(1.19)        $0.00       $(1.55)      $0.22

  Diluted earnings
   (loss) per common share   $(1.19)        $0.00       $(1.55)      $0.22

  Weighted average common
   shares outstanding:
    Basic                     14,121       14,121        14,121     14,151
    Diluted                   14,121       14,146        14,121     14,170

                                              THE GREENBRIER COMPANIES, INC.

    (In thousands, except per share amounts, unaudited)

                                                      Six Months Ended
                                                        February 28,
                                                   2002             2001

  Cash flows from operating activities:
    Net earnings (loss)                          $(21,869)         $3,069
    Adjustments to reconcile net earnings
     (loss) to net cash provided by (used in)
     operating activities:
      Deferred income taxes                        (5,051)        (2,102)
      Deferred participation                       (1,936)          1,325
      Depreciation and amortization                 11,610         10,838
      Gain on sales of equipment                     (507)        (1,174)
      Special charges -- Impairment                 14,791             --
      Other                                            546            375
    Decrease (increase) in assets:
      Accounts and notes receivable                  4,585          3,782
      Inventories                                    3,932       (23,269)
      Other                                          1,678        (1,565)
    Decrease in liabilities:
      Accounts payable and accrued liabilities     (5,350)       (18,388)
    Net cash provided by (used in) operating
     activities                                      2,429       (27,109)
    Cash flows from investing activities:
      Acquisitions, net of cash acquired                --          (282)
      Principal payments received under direct
       finance leases                               10,175         10,031
      Proceeds from sales of equipment              14,785         46,170
      Purchase of property and equipment          (10,527)       (37,434)
    Net cash provided by investing activities       14,433         18,485
    Cash flows from financing activities:
      Change in revolving notes                   (13,991)         23,985
      Proceeds from notes payable                       --            788
      Repayments of notes payable                 (21,549)       (14,270)
      Repayment of subordinated debt               (8,230)             --
      Dividends                                      (847)        (2,545)
      Purchase of Company's common stock                --          (959)
    Net cash provided by (used in) financing
     activities                                   (44,617)          6,999

    Decrease in cash and cash equivalents         (27,755)        (1,625)
    Cash and cash equivalents
      Beginning of period                           77,299         12,908
      End of period                                $49,544        $11,283


SOURCE: The Greenbrier Companies, Inc.

Contact: Mark Rittenbaum of The Greenbrier Companies, Inc.,