Press Releases

Greenbrier Announces Fourth Quarter Operating Profit in North America; Plans to Recapitalize Its Ownership in Greenbrier Europe
Highlights - Fourth quarter 2002 earnings from North American operations rose to $1.9 million on revenues of $90 million. This compares to a loss from North American operations of $.5 million on revenues of $72 million in the third quarter of 2002. - Non-cash European writedowns and other restructuring charges drove fiscal year 2002 consolidated net loss to $26.1 million, or $1.85 per share, on revenues of $306 million. This compared to 2001 consolidated net earnings of $1.1 million, or $.08 per share, on revenues of $509 million. - Tax benefits of $21.5 million related to European operations recognized in 2002. - Plans announced to recapitalize European investment. For financial reporting purposes, Europe will be treated as discontinued operations. - The Company continues to maintain strong liquidity. Year-end cash balances were nearly $60 million; paydowns of debt were about $50 million; unused lines of credit exceeded $110 million in North America. - Production rates increased and margins improved in fourth quarter; upward trends anticipated to continue in fiscal 2003. - Backlog in North America and Europe more than doubled over third quarter ending May 31, 2002 to 5,500 cars valued at $305 million at September 30, 2002.
PRNewswire-FirstCall
LAKE OSWEGO, Ore.

The Greenbrier Companies today reported results for its fourth quarter and fiscal year ended August 31, 2002. For the fourth quarter of 2002, the Company reported earnings from continuing North American operations of $1.9 million. These earnings reverse a trend of losses for the first nine months of the year. The losses were due to the cyclical downturn in the North American railcar market.

Consistent with its strategy to preserve and improve cash flow and liquidity, the Company also announced plans to recapitalize its ownership in Europe, and focus on core North American markets. Accordingly, Europe is now treated as discontinued operations for financial reporting purposes. KPMG has been retained as special advisors to the Company on its European strategy. The Company remains committed to its customers in Europe and will consult with customers, financiers and employees before finalizing its plans.

Financial Results:

The $26.1 million net loss for 2002 includes: (i) a special charge to continuing operations taken in the second quarter of $1.9 million pre-tax, related to one-time actions to reduce North American operating expenses, (ii) a special charge to discontinued European operations taken in the second quarter of $17.1 million pre-tax, related to an impairment writedown of European railcar designs and patents and actions to reduce the scale of European operations, (iii) a $14.8 million pre-tax charge to discontinued operations in the fourth quarter to adjust the net assets of European operations to estimated realizable value, and (iv) a $21.5 million U.S. income tax benefit, of which $7.7 million was recognized in the second quarter and $13.8 million in the fourth quarter, related to the Company's investment in European operations. Substantially all of the special charges and write-downs are non-cash in nature. The tax benefits are a cash item, with a majority of the cash benefits to be received within the next six months.

Since May 31, 2002, the Company has received orders for 4,300 railcars valued at $230 million. The orders push the Company's combined European and North American new railcar manufacturing backlog at September 30, 2002 to 5,500 railcars valued at $305 million, the highest level in two years. The Company's August 31, 2002 fiscal year end backlog was 5,200 railcars valued at $280 million, more than doubling its third quarter May 31, 2002 backlog of 2,500 railcars valued at $135 million.

European Operations:

Greenbrier plans to recapitalize its European investment in an orderly manner. The objectives of the plan are to improve the Company's after tax cash flow and liquidity. The Company is in discussions with both financial and strategic investors who, with members of the European management team, may participate in the new capitalization.

William A. Furman, president and chief executive officer, noted, "Greenbrier Europe has made significant progress in 2002 with its restructuring efforts. In addition to implementing substantial cost reductions, our markets and production plans have become concentrated on fewer products and longer production runs. Quality goals are being met, and backlog has improved significantly. Nevertheless, Greenbrier Europe has not achieved desired levels of profitability, even though market share has increased dramatically to 20% of the total European market and revenues have grown from almost nothing a few years ago to nearly $100 million anticipated in 2003. All of the above factors contributed to our decision to recapitalize our ownership in Greenbrier Europe and treat as a discontinued operation."

Liquidity Goals; Expense and Overhead Reductions:

Furman added, "The plan for Greenbrier Europe is part of a wider restructuring which has taken place at Greenbrier in response to a global downturn in economic conditions. The Company is being managed for liquidity and cash flow during the present uncertain economic conditions. Greenbrier has enacted substantial company-wide reductions in general and administrative costs during the past two years. G&A costs were reduced by a further $10 million in 2002 on top of $5 million in reductions in 2001. During the year, the Company implemented tax strategies and recognized a $21.5 million tax benefit related to European operations. Most of the benefit will be received in cash within the next six months."

North American Operations:

Furman added, "Our focus on core North American markets is paying off both in our manufacturing, and in our leasing and services business segments. Greenbrier's North American backlog is at the highest level in over two years and exceeds production for all of fiscal 2002. While pricing pressures remain, margins are improving due to higher production rates and improved pricing. This is evident by our positive fourth quarter earnings from North American operations."

"We continue to see growth in railcar repair and refurbishment, wheel, and maintenance and administrative services, as customers in North America look to outsourcing many of their non-core needs. Our marine construction business also remains strong, generating revenues of about $20 million annually. Deliveries of the Company's first ocean-going double-hulled barges for petroleum products are now taking place. Combined with our railcar leasing business, these units altogether accounted for a revenue base of $160 million in fiscal 2002."

Mark Rittenbaum, senior vice president and treasurer, stated, "Results for continuing operations through most of 2002 were impacted by the cyclical downturn in North America. Greenbrier's North American new railcar deliveries in 2002 were only 3,300 units compared to 7,300 units in 2001. We are now seeing evidence of a market rebound. Industry orders and backlog increased in the second and third quarters. Greenbrier has participated in this recovery to an even greater extent than its share of industry capacity. During the past quarter, the Company doubled its backlog and increased its market share to about 35% of total market backlog. The Company anticipates higher railcar deliveries, improved margins, and operating profits in North America during fiscal year 2003."

Rittenbaum added, "Greenbrier ended the year meeting its liquidity and cash flow objectives, with cash balances of nearly $60 million, paydowns of term debt of about $50 million, and over $110 million in unused lines of credit in North America. We will continue to manage the Company for liquidity rather than reported earnings until a firm economic recovery is evident. North American manufacturing EBITDA was $2 million positive for the fourth quarter of 2002. Our leasing and services, marine manufacturing and rail services businesses continue to provide a stable revenue base and positive earnings and cash flow."

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 thirteen 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 50,000 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 fourth quarter results. Teleconference details are as follows:

      Wednesday, November 6, 2002
      7:30 am Pacific Standard Time
      Real-time Audio Access:  ("Newsroom" at http://www.gbrx.com/ )

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

  Condensed Consolidated Balance Sheets     THE GREENBRIER COMPANIES, INC.
  August 31,

  (Unaudited, in thousands, except per share amounts)
  Assets                                             2002      2001
    Cash and cash equivalents                      $58,777   $74,547
    Accounts and notes receivable                   45,135    35,949
    Inventories                                     56,868    54,191
    Investment in direct finance leases             69,536   103,576
    Equipment on operating leases                  151,580   150,126
    Property, plant, and equipment                  58,292    64,264
    Other                                           21,507    25,821
    Discontinued operations                         65,751    99,571
                                                  $527,446  $608,045

  Liabilities and Stockholders' Equity
    Revolving notes                                 $3,571    $7,856
    Accounts payable and accrued liabilities       108,244    88,485
    Deferred participation                          52,937    56,176
    Deferred income taxes                           13,823    26,920
    Notes payable                                  136,577   168,703
    Discontinued operations                         77,188    83,407

    Subordinated debt                               27,069    37,491

    Minority interest                                4,898     4,898

    Stockholders' equity                           103,139   134,109
                                                  $527,446  $608,045

  Consolidated Statements of Operations   THE GREENBRIER COMPANIES, INC.

   Years ended August 31,
   (Unaudited, in thousands, except
    per share amounts)                      2002       2001        2000
   Revenue
    Manufacturing                       $231,810    $427,841   $488,672
    Leasing & services                    73,819      80,986     91,189
                                         305,629     508,827    579,861

  Cost of revenue
    Manufacturing                        217,238     393,422    428,829
    Leasing & services                    44,694      43,295     46,711
                                         261,932     436,717    475,540

  Margin                                  43,697      72,110    104,321

  Other Costs
    Selling and administrative expense    30,003      38,558     46,262
    Interest expense                      15,456      18,478     19,637
    Special charges                        1,896          --         --
                                          47,355      57,036     65,899
  Earnings (loss) before income tax,
   minority interest and equity in
   unconsolidated subsidiary             (3,658)      15,074     38,422

  Income tax benefit (expense)             2,072     (6,804)   (16,052)
  Earnings (loss) before minority
   interest and equity in unconsolidated
   subsidiary                            (1,586)       8,270     22,370
  Minority interest                           --          --    (2,308)
  Equity in earnings (loss) of
   unconsolidated subsidiary             (2,578)       (641)      1,054

  Earnings (loss) from continuing
   operations                            (4,164)       7,629     21,116

  Loss from discontinued operations
   (net of tax)                         (21,930)     (6,510)    (6,762)

  Net earnings (loss)                  $(26,094)      $1,119    $14,354

  Basic earnings (loss) per common share:
  Continuing operations                  $(0.30)       $0.54      $1.48
  Discontinued operations                 (1.55)      (0.46)     (0.47)
  Net earnings (loss)                    $(1.85)       $0.08      $1.01

  Diluted earnings (loss) per common share:
  Continuing operations                  $(0.30)       $0.54      $1.48
  Discontinued operations                 (1.55)      (0.46)     (0.47)
  Net earnings (loss)                    $(1.85)       $0.08      $1.01

  Weighted average common shares:
  Basic                                   14,121      14,151     14,227
  Diluted                                 14,121      14,170     14,241


                                        THE GREENBRIER COMPANIES, INC.
   Condensed Consolidated Statements
    of Cash Flows
   Years ended August 31,

  (Unaudited, in thousands)               2002          2001      2000
  Cash flows from operating activities:
  Net earnings (loss)                  $(26,094)      $1,119    $14,354
  Adjustments to reconcile net
   earnings (loss) to net cash
   provided by (used in) operating
   activities:
      Loss from discontinued operations   21,930       6,510      6,762
      Deferred income taxes             (10,291)       1,682      7,604
      Deferred participation             (3,239)       1,910      3,827
      Depreciation and amortization       17,960      17,796     16,472
      Gain on sales of equipment           (910)     (1,390)    (4,527)
      Other                              (2,660)     (1,492)      1,349
  Decrease (increase) in assets:
      Accounts and notes receivable      (6,980)      20,300    (9,238)
      Inventories                        (3,600)      42,141   (38,000)
      Other                                2,977       2,507    (1,019)
  Increase (decrease) in liabilities:
      Accounts payable and accrued
       liabilities                        38,180    (25,064)   (11,879)
  Net cash provided by (used in)
   operating activities                   27,273      66,019   (14,295)
  Cash flows from investing activities:
      Acquisitions, net of cash acquired      --       (282)      (530)
      Principal payments received under
       direct finance leases              18,828      20,761     18,143
      Proceeds from sales of equipment    24,042      47,772     49,789
      Investment in joint venture             --     (4,000)         --
      Investment in discontinued
       operations                       (16,843)     (4,660)   (20,462)
      Capital expenditures              (21,402)    (70,136)   (87,082)
  Net cash provided by (used in)
   investing activities                    4,625    (10,545)   (40,142)
  Cash flows from financing activities:
      Changes in revolving notes         (4,285)       (227)      8,083
      Proceeds from borrowings             4,285      50,000     16,180
      Repayments of borrowings          (36,399)    (31,604)   (26,987)
      Repayment of subordinated debt    (10,422)       (257)         --
      Dividends                            (847)     (5,086)    (5,132)
      Purchase of minority interest           --          --    (7,190)
      Purchase of common stock                --       (959)      (246)
  Net cash provided by (used in)
   financing activities                 (47,668)      11,867   (15,292)

  Increase (decrease) in cash and cash
   equivalents                          (15,770)      67,341   (69,729)
  Cash and cash equivalents
  Beginning of period                     74,547       7,206     76,935
  End of period                          $58,777     $74,547     $7,206


  THE GREENBRIER COMPANIES, INC.
   Summarized results of operations related to discontinued operations are:

  Years ended August 31,
  (Unaudited, in thousands)                2002        2001       2000
  Revenues                               $61,695     $85,170    $39,568
  Cost of Revenue                         60,770      76,954     37,519
  Margin                                     925       8,216      2,049

  Selling and administrative expense       9,050      10,989      7,940
  Interest expense                         3,542       3,778      1,528
  Special charges                         17,129          --         --
  Loss from operations                  (28,796)     (6,551)    (7,419)
  Estimated loss on discontinued
   operations                           (14,776)          --         --
  Loss before income taxes and minority
   interest                             (43,572)     (6,551)    (7,419)
  Income tax benefit (expense)            21,515         (3)         --
  Minority interest                          127          44        657
  Loss from discontinued operations    $(21,930)    $(6,510)   $(6,762)

The following assets and liabilities of the European operations were reclassified as discontinued operations as of August 31,:

  (Unaudited, in thousands)                          2002        2001
  Cash and cash equivalents                         $8,953     $2,752
  Accounts receivable                                9,645     16,471
  Inventory (A)                                     39,304     40,390
  Property, plant, and equipment                     1,072     12,634
  Other assets                                       6,777     27,324
      Total assets - Discontinued operations       $65,751    $99,571

  Revolving notes                                  $22,249    $25,130
  Accounts payable and accrued liabilities (A)      47,385     49,405
  Notes payable                                      7,554      8,872
      Total liabilities - Discontinued operations  $77,188    $83,407

  (A)  Includes $26.9 million in 2002 and $11.9 million in 2001 for railcars
       delivered to customer for which cash was received, but revenue
       recognition delayed, pending final railcar certification. Final
       certification was obtained in October 2002.


  THE GREENBRIER COMPANIES, INC.
   Quarterly Results of Operations
   Unaudited operating results by quarter for fiscal years ending
    August 31, 2002 and 2001 are as follows:

  (In thousands, except per share amounts)
                      First       Second      Third      Fourth      Total
  2002
  Revenue
  Manufacturing      $53,217     $52,265     $53,792    $72,536   $231,810
  Leasing & services  18,239      19,557      18,431     17,592     73,819
                      71,456      71,822      72,223     90,128    305,629
  Cost of revenue
  Manufacturing       49,692      52,899      51,619     63,028    217,238
  Leasing & services  10,231      10,632      12,142     11,689     44,694
                      59,923      63,531      63,761     74,717    261,932

  Margin             $11,533      $8,291      $8,462    $15,411    $43,697

  Earnings (loss)
   from continuing
   operations          (801)     (4,773)       (495)      1,905    (4,164)
  Earnings (loss)
   from discontinued
   operations        (4,242)    (12,053)     (1,476)    (4,159)   (21,930)
                    $(5,043)   $(16,826)    $(1,971)   $(2,254)  $(26,094)

  Basic earnings
   (loss) per common
   share:
    Continuing
     operations       $(.06)      $(.34)      $(.03)       $.13     $(.30)
    Net earnings
     (loss)           $(.36)     $(1.19)      $(.14)     $(.16)    $(1.85)
  Diluted earnings
   (loss) per common
   share:
    Continuing
     operations       $(.06)      $(.34)      $(.03)       $.13     $(.30)
    Net earnings
     (loss)           $(.36)     $(1.19)      $(.14)     $(.16)    $(1.85)

  2001
  Revenue
  Manufacturing     $113,990    $109,252     $97,052   $107,547   $427,841
  Leasing & services  19,205      21,743      19,317     20,721     80,986
                     133,195     130,995     116,369    128,268    508,827
  Cost of revenue
  Manufacturing      104,033     105,031      86,398     97,960    393,422
  Leasing & services  10,195      10,983      10,851     11,266     43,295
                     114,228     116,014      97,249    109,226    436,717

  Margin             $18,967     $14,981     $19,120    $19,042    $72,110

  Earnings (loss)
   from continuing
   operations          1,559       2,633       1,145      2,292      7,629
  Earnings (loss)
   from discontinued
   operations          1,440     (2,563)     (2,472)    (2,915)    (6,510)
  Net earnings
   (loss)             $2,999         $70    $(1,327)     $(623)     $1,119

  Basic earnings
   (loss) per common
   share:
    Continuing
     operations         $.11        $.19        $.08       $.16       $.54
    Net earnings
     (loss)             $.21        $.00      $(.09)     $(.04)       $.08
  Diluted earnings
   (loss) per common
   share:
    Continuing
     operations         $.11        $.19        $.08       $.16       $.54
    Net earnings
     (loss)             $.21        $.00      $(.09)     $(.04)       $.08

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SOURCE: The Greenbrier Companies

CONTACT: Mark Rittenbaum of The Greenbrier Companies, +1-503-684-7000