The Greenbrier Companies
Results for continuing operations in North America were a loss of $0.8 million for the second quarter of fiscal year 2003, compared to a loss of $3.2 million in the second quarter of 2002 and nearly break even results for the first quarter of 2003. Loss from discontinued European operations was $.5 million for the quarter, compared to a loss of $13.7 million in the second quarter of 2002 and a loss of $.6 million in the first quarter of 2003. The prior year's second quarter results include a special charge to continuing North American operations of $2.1 million pretax, and a $17.1 million pretax special charge to discontinued operations.
Net loss for the quarter was $1.2 million, or $.09 per share, compared to a net loss of $16.8 million, or $1.19 per share, in the second quarter of fiscal 2002.
Backlog remained strong and stable during the quarter in both North America and Europe. The February 28, 2003 backlog includes 4,500 units valued at $230 million from North American operations and 1,300 units valued at $100 million from European operations. The November 30, 2002 backlog also included 4,500 units valued at $230 million in North America and 1,200 units valued at $80 million in Europe. During the quarter, the Company received orders for 1,500 new railcars valued at $90 million.
William A. Furman, president and chief executive officer, said, "Greenbrier's business outlook in new freight cars continues to improve. Orders for over 3,200 railcars have been received during the first six months of the fiscal year, pushing new railcar production and related financial visibility into our next fiscal year. We expect the Company to be profitable for the second half of the year and the year as a whole, due to higher production levels and improved margins at all of our new railcar facilities. The available supply of rail castings to meet scheduled production continues to be a critical item. We intend to press forward to protect our own interests and to seek a solution for the industry's difficulties."
"In Mexico, Gunderson-Concarril has been re-opened, and we have commenced production of boxcars for TTX Company. Starting in May, our Gunderson facility will exclusively build double-stack intermodal cars, where the market outlook is strong. Recent orders for over 1,300 riserless deck center partition cars provide a solid outlook for our TrentonWorks facility in Canada. Greenbrier's marine business also received a new order during the second quarter for a 100,000 barrel ocean-going oil barge, pushing its backlog into mid-2004."
Furman added, "We continue to make great progress in our European operations, as a result of aggressive cost reduction measures taken in 2002 and a rebound in the market. Greenbrier remains committed to its plan to recapitalize European operations by the end of fiscal 2003."
Mark Rittenbaum, senior vice president and treasurer, noted, "During each of the first two fiscal quarters of 2003, the Company delivered 1,200 new railcars in North America, compared to only 700 cars in the second quarter of 2002. Deliveries in the second half of fiscal 2003 are anticipated to exceed 3,500 units, as we operate at higher production levels."
"The company's second quarter was impacted by temporary production inefficiencies at TrentonWorks due to the delay in drop deck center partition car production while patent litigation is being resolved. As a result of recent new orders at TrentonWorks, production of riserless deck cars has been accelerated to offset the delay, and TrentonWorks is operating at efficient levels of production again. Gunderson also experienced certain supplier related issues which are now resolved."
Rittenbaum added, "Greenbrier continues to maintain strong liquidity, with cash balances unchanged over the past six months at nearly $60 million, pay downs of debt of $17 million, and unused lines of credit of nearly $110 million. EBITDA from continuing operations was $14.3 million for the first six months of fiscal 2003, compared to $11.2 million for the first six months of fiscal 2002."
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 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 second quarter results. Teleconference details are as follows:
Wednesday, April 9, 2003
8:00 a.m. Pacific Daylight 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)
February 28, August 31,
2003 2002
Assets
Cash and cash equivalents $59,240 $58,777
Accounts and notes receivable 40,916 45,135
Inventories 69,949 56,868
Investment in direct finance leases 52,855 69,536
Equipment on operating leases 143,575 151,580
Property, plant and equipment 57,091 58,292
Other 19,959 21,507
Discontinued operations 45,416 65,751
$489,001 $527,446
Liabilities and Stockholders' Equity
Revolving notes $5,511 $3,571
Accounts payable and accrued liabilities 117,493 108,244
Deferred participation 43,963 52,937
Deferred income taxes 14,859 13,823
Notes payable 122,046 136,577
Discontinued operations 56,672 77,188
Subordinated debt 23,131 27,069
Minority interest 4,898 4,898
Stockholders' equity 100,428 103,139
$489,001 $527,446
Consolidated Statements of Operations
(In thousands, except per share amounts, unaudited)
Three Months Ended Six Months Ended
February 28, February 28,
2003 2002 2003 2002
Revenue
Manufacturing $86,539 $53,552 $165,749 $106,769
Leasing & services 18,190 18,270 35,869 36,509
104,729 71,822 201,618 143,278
Cost of revenue
Manufacturing 83,173 52,899 157,508 102,591
Leasing & services 10,961 10,632 22,52 720,863
94,134 63,531 180,035 123,454
Margin 10,595 8,291 21,583 19,824
Other costs
Selling and
administrative
expense 8,162 7,132 15,232 14,623
Interest expense 2,992 3,915 6,273 8,163
Special charges -- 2,083 -- 2,083
11,154 13,130 21,505 24,869
Earnings (loss) before
income taxes, minority
interest and equity
in unconsolidated
subsidiary (559) (4,839) 78 (5,045)
Income tax benefit
(expense) 213 1,911 (16) 1,996
Earnings (loss) before
minority interest and
equity in unconsolidated
subsidiary (346) (2,928) 62 (3,049)
Minority interest 18 171 -- --
Equity in unconsolidated
subsidiary (437) (416) (955) (925)
Loss from continuing
operations (765) (3,173) (893) (3,974)
Loss from discontinued
operations
(net of tax) (472) (13,653) (1,088) (17,895)
Net loss $(1,237) $(16,826) $(1,981) $(21,869)
Basic loss per
common share
Continuing
operations $(0.05) $(0.22) $(0.06) $(0.28)
Discontinued
operations (0.04) (0.97) (0.08) (1.27)
Net loss $(0.09) $(1.19) $(0.14) $(1.55)
Diluted loss per
common share
Continuing
operations $(0.05) $(0.22) $(0.06) $(0.28)
Discontinued
operations (0.04) (0.97) (0.08) (1.27)
Net loss $(0.09) $(1.19) $(0.14) $(1.55)
Weighted average
common shares:
Basic 14,121 14,121 14,121 14,121
Diluted 14,121 14,121 14,121 14,121
Consolidated Statements of Cash Flows
(In thousands, unaudited)
Six Months Ended
February 28,
2003 2002
Cash flows from operating activities
Net loss $(1,981) $(21,869)
Adjustments to reconcile net loss to
net cash used in operating activities:
Loss from discontinued operations 1,088 17,895
Other changes in discontinued operations (1,269) (159)
Deferred income taxes 1,036 (5,051)
Deferred participation (8,974) (1,936)
Depreciation and amortization 8,895 9,044
Gain on sales of equipment (333) (507)
Other (836) (19)
Decrease (increase) in assets:
Accounts and notes receivable 4,219 699
Inventories (15,968) 157
Other 1,424 1,324
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities 9,603 (4,639)
Net cash used in operating activities (3,096) (5,061)
Cash flows from investing activities
Principal payments received
under direct finance leases 7,801 10,175
Proceeds from sales of equipment 17,492 14,785
Purchase of property and equipment (4,928) (10,312)
Investment in discontinued operations -- (1,200)
Net cash provided by investing activities 20,365 13,448
Cash flows from financing activities
Changes in revolving notes 1,940 (7,856)
Repayments of notes payable (14,808) (20,663)
Repayment of subordinated debt (3,938) (8,230)
Dividends -- (847)
Net cash used in financing activities (16,806) (37,596)
Increase (decrease) in cash and cash equivalents 463 (29,209)
Cash and cash equivalents
Beginning of period 58,777 74,547
End of period $59,240 $45,338
Supplemental Disclosure
Reconciliation of GAAP to EBITDA (A)
(In thousands, unaudited)
Six Months Ended
February 28,
2003 2002
Reported GAAP loss from continuing operations $(893) $(3,974)
Income tax (benefit) / expense 16 (1,966)
Interest expense 6,273 8,163
Depreciation and amortization 8,895 9,044
EBITDA from continuing operations $14,291 $11,267
(A) "EBITDA" (earnings from continuing operations before interest, taxes,
depreciation and amortization) is a measurement commonly used by the
rail supply companies. It should not be considered in isolation or as
a substitute for cash flow from operation activities or cash flow
statement data prepared in accordance with generally accepted
accounting principles.
Summarized results of operations of the discontinued operations are:
(In thousands) Three Months Ended Six Months Ended
February 28, February 28,
2003 2002 2003 2002
Revenue (A) $13,851 $27,246 $55,751 $35,673
Cost of revenue (A) 12,265 26,980 51,762 35,572
Margin 1,586 266 3,989 101
Selling and
administrative expense 1,391 2,187 3,776 5,068
Interest expense 766 768 1,419 2,007
Special charges (B) -- 17,129 -- 17,129
Loss before income taxes
and minority interest (571) (19,818) (1,206) (24,103)
Income tax benefit 99 6,111 118 6,111
Minority interest -- 54 -- 97
Loss from discontinued
operations $(472) $(13,653) $(1,088) $(17,895)
The following assets and liabilities of the European operation are classified as discontinued operations:
(In thousands) February 28, August 31,
2003 2002
Cash and cash equivalents $8,695 $8,953
Accounts receivable 15,750 9,645
Inventories (A) 12,128 39,304
Property, plant and equipment 1,540 1,072
Other 7,303 6,777
Total assets - discontinued operations $45,416 $65,751
Revolving notes $19,480 $22,249
Accounts payable and accrued liabilities (A) 29,721 47,385
Notes payable 7,471 7,554
Total liabilities - discontinued
operations $56,672 $77,188
Discontinued operations -liabilities 47,472 67,988
Estimated liabilities associated with
discontinued operations © 9,200 9,200
Total $56,672 $77,188
(A) August 31, 2002 balances include $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 railcars. Certification was obtained in the first
quarter of 2003 and remaining railcars were delivered allowing
recognition of revenue of $27.7 million and the associated cost of
revenue.
(B) Special charges relate to $14.8 million of asset impairment write-
downs and $2.3 million in costs associated with a restructuring plan
to reduce the scale of European operations.
© Estimated liabilities associated with discontinued operations
represent obligations of the European operations. The settlement of
these obligations will depend in part upon the results of
negotiations. The aggregate amount of the obligations has been
estimated pending determination of the final form of the resolution.
SOURCE: The Greenbrier Companies
CONTACT: Mark Rittenbaum of Greenbrier Companies, +1-503-684-7000
Web site: http://www.gbrx.com/