The Greenbrier Companies
Results for continuing operations in North America were nearly break-even for the quarter, compared to a loss of $.8 million in the first quarter of 2002. Loss from discontinued European operations was $.6 million for the quarter, compared to a loss of $4.2 million in the first quarter of 2002.
The Company also disclosed that during its first fiscal quarter ended November 30, 2002, it received orders in North America and Europe for 1,700 new freight cars with a total value of $115 million. Production for sale during the quarter was 1,200 railcars, causing backlog to increase to 5,700 units valued at $310 million. This backlog compared to 5,200 units valued at $280 million at August 31, 2002.
Backlog grew in both North America and Europe. The November 30, 2002 backlog includes 4,500 units valued at $230 million from North American operations and 1,200 units valued at $80 million from European operations. The August 31, 2002 backlog included 4,200 units valued at $210 million in North America and 1,000 units valued at $70 million in Europe.
Significant new railcar orders during the quarter in North America included 600 Maxi-IV double-stack cars and 500 60' boxcars for TTX Company, as well as 200 riserless deck center partition cars for Canadian National Railway. In Europe, Greenbrier received orders for 150 coal wagons for DB Cargo and 104 box wagons and flat wagons for Freightliner.
Greenbrier's backlog includes 800 drop-deck center partition cars at its TrentonWorks, Nova Scotia facility. Production and delivery plans for these cars will be slowed as a result of a preliminary injunction expected to be issued this week, relative to patent litigation initiated by a competitor. The Company is pursuing an expedited trial in the case, as well as other remedies. Production of other cars in TrentonWorks' backlog will be accelerated while the litigation is being resolved. However, some temporary layoffs at TrentonWorks will occur while production plans are being revised.
Due to increased order backlog, production rates, and improved market outlook in North America, Greenbrier announced the re-opening of its Gunderson-Concarril facility in Sahagun, Mexico. Production of boxcars will commence in March 2003. Gunderson-Concarril is a 50%-owned joint venture between Greenbrier and Bombardier Transportation. All three of Greenbrier's new railcar plants in North America are expected to be operating at historically more normalized levels of employment and production during 2003. Production rates in the quarter ended November 30, 2002 were roughly double those of six months earlier, in the quarter ended May 31, 2002 and are expected to continue to increase during 2003.
William A. Furman, president and chief executive officer, said, "Greenbrier's business outlook in new freightcars continues to improve. Orders during the past two quarters were at dramatically higher levels than the previous six-month period, both for Greenbrier and the industry. We expect our outlook to continue to improve during 2003 due to strengths in the forest products and intermodal sectors, where Greenbrier has high market share. Prospects for railroad traffic increases in selected commodity sectors also look much better than in 2002. Railcar surpluses of good quality, high- capacity freightcars have declined. We expect to be back into a normalized replacement cycle for new freightcars as the economy improves. Also, we have very healthy business in our Rail Services, Marine Construction, Industrial Forge and Leasing & Services segments. Together, these units contribute approximately $170 million in revenue annually. Demand in these segments is strong."
Furman continued, "Given our improved market outlook and the Company's strong balance sheet, Greenbrier will aggressively review strategic opportunities in the North American rail supply marketplace. Greenbrier has retained Bear Stearns and Babcock & Brown to assist in these efforts. Earlier, Greenbrier retained KPMG to assist in recapitalizing our European operations. We intend to successfully recapitalize European operations by the end of fiscal 2003. In the meantime, European financial performance has improved, as a result of measures taken in fiscal 2002 and a rebound in the marketplace."
Mark Rittenbaum, senior vice president and treasurer noted, "Greenbrier continues to maintain strong liquidity, with cash balances of nearly $60 million and pay downs of debt of $7 million. Manufacturing EBITDA from continuing operations for the quarter was $4.4 million. The first quarter results were impacted by higher legal fees related to patent litigation, and professional advisory fees. We expect such amounts to be reduced in future quarters. As well, we expect manufacturing margins to improve modestly in the second half of the year, as the result of higher production rates and improved pricing in our backlog."
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 first quarter results. Teleconference details are as follows:
Tuesday, January 7, 2003
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.
THE GREENBRIER COMPANIES, INC.
Condensed Consolidated Balance Sheets
(In thousands, unaudited)
November 30, August 31,
2002 2002
Assets
Cash and cash equivalents $57,488 $58,777
Accounts and notes receivable 44,362 45,135
Inventories 65,195 56,868
Investment in direct finance leases 63,661 69,536
Equipment on operating leases 151,288 151,580
Property, plant and equipment 57,652 58,292
Other 20,413 21,507
Discontinued operations 37,288 65,751
$497,347 $527,446
Liabilities and Stockholders' Equity
Revolving notes $2,943 $3,571
Accounts payable and accrued liabilities 118,385 108,244
Deferred participation 49,968 52,937
Deferred income taxes 11,935 13,823
Notes payable 130,238 136,577
Discontinued operations 49,769 77,188
Subordinated debt 26,414 27,069
Minority interest 4,898 4,898
Stockholders' equity 102,797 103,139
$497,347 $527,446
THE GREENBRIER COMPANIES, INC.
Consolidated Statements of Operations
(In thousands, except per share amounts, unaudited)
Three Months Ended
November 30,
2002 2001
Revenue
Manufacturing $79,211 $53,217
Leasing & services 17,678 18,239
96,889 71,456
Cost of revenue
Manufacturing 74,335 49,692
Leasing & services 11,566 10,231
85,901 59,923
Margin 10,988 11,533
Other costs
Selling and administrative expense 7,070 7,491
Interest expense 3,282 4,249
10,352 11,740
Earnings (loss) before income
taxes, minority interest
and equity in unconsolidated subsidiary 636 (207)
Income tax benefit (expense) (228) 85
Earnings (loss) before minority
interest and equity in unconsolidated
subsidiary 408 (122)
Minority interest (18) (171)
Equity in loss of unconsolidated subsidiary (517) (508)
Loss from continuing operations (127) (801)
Loss from discontinued operations (net of tax) (616) (4,242)
Net loss $(743) $(5,043)
Basic loss per common share:
Continuing operations $(.01) $(.06)
Discontinued operations (.04) (.30)
Net loss $(.05) $(.36)
Diluted loss per common share:
Continuing operations $(.01) $(.06)
Discontinued operations (.04) (.30)
Net loss $(.05) $(.36)
Weighted average common shares:
Basic 14,121 14,121
Diluted 14,121 14,121
THE GREENBRIER COMPANIES, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands, unaudited)
Three Months Ended
November 30,
2002 2001
Cash flows from operating activities:
Net loss $ (743) $(5,043)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Loss from discontinued operations 616 4,242
Deferred income taxes (1,888) (2,564)
Deferred participation (2,969) (988)
Depreciation and amortization 4,446 4,559
Gain on sales of equipment (29) (182)
Other (22) (382)
Decrease (increase) in assets:
Accounts and notes receivable 851 11,655
Inventories (10,817) (9,979)
Other 995 403
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities 11,250 (456)
Net cash provided by operating activities 1,690 1,265
Cash flows from investing activities:
Principal payments received under
direct finance leases 4,115 5,208
Proceeds from sales of equipment 4,018 3,241
Purchase of property and equipment (3,535) (1,530)
Net cash provided by investing activities 4,598 6,919
Cash flows from financing activities:
Changes in revolving notes (628) (6,499)
Repayments of notes payable (6,294) (8,834)
Repayments of subordinated debt (655) (104)
Dividends -- (847)
Net cash used in financing activities (7,577) (16,284)
Decrease in cash and cash equivalents (1,289) (8,100)
Cash and cash equivalents
Beginning of period 58,777 74,547
End of period $57,488 $66,447
THE GREENBRIER COMPANIES, INC.
Summarized results of operations of the discontinued operations are:
Three Months Ended
November 30,
(in thousands, unaudited) 2002 2001
Revenues (A) $41,900 $8,427
Cost of revenue (A) 39,498 8,592
Margin 2,402 (165)
Selling and administrative expense 2,385 2,881
Interest expense 652 1,239
Loss before income taxes and minority interest (635) (4,285)
Income tax benefit 19 --
Minority interest -- 43
Loss from discontinued operations $(616) $(4,242)
The following assets and liabilities of the European operation are
classified as discontinued operations:
(in thousands, unaudited)
November 30, August 31,
2002 2002
Cash and cash equivalents $5,622 $8,953
Accounts receivable 11,850 9,645
Inventories (A) 12,150 39,304
Property, plant and equipment 1,152 1,072
Other 6,514 6,777
Total assets - Discontinued operations $37,288 $65,751
Revolving notes $22,723 $22,249
Accounts payable and accrued liabilities (A) 19,874 47,385
Notes payable 7,172 7,554
Total liabilities - Discontinued operations $49,769 $77,188
(A) August 31, 2002 balance sheet includes $26.9 million in inventory
and associated deferred revenue for railcars delivered to a customer
for which cash was received, but revenue recognition delayed pending
certification of the railcars. Certification was obtained in October
2002 and the remaining railcars were delivered allowing recognition of
revenue of $27.7 million and the associated costs of revenue in the
three months ended November 30, 2002.
SOURCE: The Greenbrier Companies, Inc.
CONTACT: Mark Rittenbaum of The Greenbrier Companies, Inc.,
+1-503-684-7000
Web site: http://www.gbrx.com/