Press Releases

Greenbrier Returns to Profitability, Achieves Record Backlog
PRNewswire-FirstCall
LAKE OSWEGO, Ore.
  Highlights

  -- Strong performance in both North America and Europe returned Greenbrier
     to profitability. Earnings from continuing operations of $2.7 million,
     or $.19 per share, were realized for the third quarter of fiscal 2003.
     This compares to a loss from continuing operations of $2.1 million, or
     $.15 per share, in the third quarter of fiscal 2002. Earnings from
     discontinued European operations were $.4 million, or $.02 per share,
     for the third quarter of 2003, compared to earnings of $.1 million, or
     $.01 per share, in the third quarter of 2002.
  -- Net earnings for the quarter were $3.0 million, or $.21 per share,
     compared to a net loss of $2.0 million, or $.14 per share, in the third
     quarter of fiscal 2002.
  -- Revenues grew by nearly 75% to $125 million, as compared to the third
     quarter of 2002, driven by a tripling of new railcar deliveries to
     1,500 units, compared to 500 units in the prior comparable period.
  -- New orders for 8,000 freight cars, with a value of $390 million, were
     received during the third quarter.
  -- New railcar manufacturing backlog in North America and Europe rose to a
     record 12,100 units valued at $630 million at May 31, 2003, compared to
     5,800 units valued at $330 million at February 28, 2003, and
     2,500 units valued at $130 million at May 31, 2002.
  -- Critical supply issues were addressed through the operation of a rail
     castings foundry in Cicero, Illinois, via a joint venture with ACF
     Industries.
  -- The Company continues to maintain strong liquidity. After debt paydowns
     of $25 million in the first nine months of the year, May 31, 2003 cash
     balances have grown to $73 million, up from $59 million at August 31,
     2002; unused lines of credit remained at $110 million in North America.

The Greenbrier Companies today reported profitable results for its third fiscal quarter ended May 31, 2003. Higher production rates, improved margins, strong manufacturing backlog and operating efficiencies mark a strong recovery by the Company from the industry downturn, which began in 2001. Both North American and discontinued European operations reported profits, with strong financial improvement against the prior year's third fiscal quarter. New railcar backlog and production rates have more than tripled from this time last year.

Earnings for continuing operations in North America were $2.7 million for the third quarter of fiscal year 2003, compared to a loss of $2.1 million in the third quarter of 2002 and a loss of $.8 million for the second quarter of 2003. Earnings from discontinued European operations were $.4 million for the quarter, compared to earnings of $.1 million in the third quarter of 2002 and a loss of $.5 million in the second quarter of 2003.

Net earnings for the quarter were $3.0 million, or $.21 per share, compared to a net loss of $2.0 million, or $.14 per share, in the third quarter of fiscal 2002.

Backlog grew dramatically during the quarter to record levels in both North America and Europe. The May 31, 2003 backlog includes 10,600 units valued at $500 million from North American operations and 1,500 units valued at $130 million from European operations. The February 28, 2003 backlog included 4,500 units valued at $230 million in North America and 1,300 units valued at $100 million in Europe.

During the quarter, the Company received orders for 8,000 new railcars valued at $390 million.

William A. Furman, president and chief executive officer, said, "Greenbrier's business outlook in new freight cars stretches through most of calendar 2004. Orders for over 11,200 railcars have been received during the first nine months of the fiscal year, pushing new railcar production and related financial visibility through most of our next fiscal year. The available supply of rail castings to meet scheduled production continues to be a critical item. We have protected our own interests and have helped provide a solution for the industry's difficulties, through a joint venture with ACF Industries to operate the former Meridian Rail Products' railcar castings foundry in Cicero, Illinois."

Furman added, "We continue to make progress in our European operations. Management has met its target of returning to profitability in Europe as the result of aggressive cost reduction measures taken in 2002, improved operating efficiencies and a recovery in the market. Greenbrier Europe's backlog of 1,500 units with forecasted positive margins stretches into fiscal 2005. Greenbrier remains committed to its plan to recapitalize its discontinued European operations by the end of fiscal 2003."

Mark Rittenbaum, senior vice president and treasurer, noted, "During the third fiscal quarter of 2003, the Company delivered 1,500 new railcars in North America, compared to only 500 railcars in the third quarter of 2002. Deliveries for the entire fiscal 2003 are anticipated to approach 5,700 units, compared to 3,400 units in fiscal 2002, as we continue to operate at higher production levels."

Rittenbaum added, "Greenbrier continues to maintain strong liquidity, with cash balances growing to $73 million and unused lines of credit of nearly $110 million. EBITDA from continuing operations was $26.2 million for the first nine months of fiscal 2003, compared to $16.5 million for the first nine months of fiscal 2002. During fiscal 2002, the Company paid down $47 million of debt. For the nine months ending May 31, 2003 it has paid down an additional $25 million of debt."

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 third quarter results. Teleconference details are as follows:

   Wednesday, July 9, 2003
   8:00 am 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)


                                                   May 31,     August 31,
                                                      2003           2002

  Assets
      Cash and cash equivalents                  $  73,100      $  58,777
      Accounts and notes receivable                 51,608         45,135
      Inventories                                   76,422         56,868
      Investment in direct finance leases           46,585         69,536
      Equipment on operating leases                140,910        151,580
      Property, plant and equipment                 56,953         58,292
      Other                                         24,874         21,507
      Discontinued operations                       55,228         65,751

                                                 $ 525,680      $ 527,446

  Liabilities and Stockholders' Equity
      Revolving notes                            $   5,971      $   3,571
      Accounts payable and accrued liabilities     110,327         96,237
      Participation                                 55,373         60,995
      Deferred revenue                              23,568          3,949
      Deferred income taxes                         14,911         13,823
      Notes payable                                118,116        136,577
      Discontinued operations                       67,330         77,188

      Subordinated debt                             21,532         27,069

      Minority interest                              4,898          4,898

      Stockholders' equity                         103,654        103,139

                                                 $ 525,680      $ 527,446


                      THE GREENBRIER COMPANIES, INC.

                  Consolidated Statements of Operations
           (In thousands, except per share amounts, unaudited)


                                    Three Months Ended   Nine Months Ended
                                          May 31,            May 31,
                                      2003      2002     2003       2002
  Revenue
      Manufacturing                $108,099  $ 54,175  $273,848  $160,944
      Leasing & services             16,853    18,048    52,722    54,557
                                    124,952    72,223   326,570   215,501

  Cost of revenue
      Manufacturing                  98,494    51,619   256,003   154,210
      Leasing & services             10,265    12,142    32,791    33,005
                                    108,759    63,761   288,794   187,215

  Margin                             16,193     8,462    37,776    28,286

  Other costs
      Selling
       and administrative expense     8,317     7,247    23,549    21,871
      Interest expense                2,340     3,667     8,613    11,830
      Special charges                    --        --        --     2,083
                                     10,657    10,914    32,162    35,784
  Earnings (loss) before
   income taxes and equity
   in unconsolidated subsidiary       5,536    (2,452)    5,614    (7,498)

  Income tax benefit (expense)       (2,423)      669    (2,439)    2,665

  Earnings (loss) before equity
   in unconsolidated subsidiary       3,113    (1,783)    3,175    (4,833)

  Equity in unconsolidated subsidiary  (461)     (327)   (1,416)   (1,251)

  Earnings (loss)
   from continuing operations         2,652    (2,110)    1,759    (6,084)

  Earnings (loss)
   from discontinued operations
   (net of tax)                         354       139      (734)  (17,756)
  Net earnings (loss)              $  3,006  $ (1,971) $  1,025 $ (23,840)

  Basic earnings (loss)
   per common share
      Continuing operations         $  0.19   $ (0.15)  $  0.12   $  (0.43)
      Discontinued operations          0.02      0.01     (0.05)     (1.26)
      Net earnings (loss)           $  0.21   $ (0.14)  $  0.07   $  (1.69)

  Diluted earnings (loss)
   per common share
      Continuing operations         $  0.19   $ (0.15)  $  0.12   $  (0.43)
      Discontinued operations          0.02      0.01     (0.05)     (1.26)
      Net earnings (loss)           $  0.21   $ (0.14)  $  0.07   $  (1.69)

  Weighted average common shares:
      Basic                          14,121    14,121    14,121    14,121
      Diluted                        14,332    14,121    14,261    14,121


                      THE GREENBRIER COMPANIES, INC.

                  Consolidated Statements of Cash Flows
                        (In thousands, unaudited)

                                                       Nine Months Ended
                                                             May 31,
                                                      2003           2002
  Cash flows from operating activities
    Net earnings (loss)                               $1,025     $(23,840)
    Adjustments to reconcilenet earnings (loss)
     to net cash provided by operating activities:
       Loss from discontinued operations                 734       17,756
       Other changes in discontinued operations          (69)      10,192
       Deferred income taxes                           1,088       (9,614)
       Depreciation and amortization                  13,405       13,416
       Gain on sales of equipment                       (336)        (813)
       Other                                          (1,138)          67
       Decrease (increase) in assets:
         Accounts and notes receivable                (6,473)       7,650
         Inventories                                 (22,532)         704
         Other                                        (3,566)       1,324
       Increase (decrease) in liabilities:
         Accounts payable and accrued liabilities     13,992          629
         Participation                                (5,622)      (1,289)
         Deferred revenue                             20,191       (1,094)
    Net cash provided by operating activities         10,699       15,088

  Cash flows from investing activities
    Principal payments received
     under direct finance leases                      11,290       14,608
    Proceeds from sales of equipment                  22,093       20,461
    Purchase of property and equipment                (7,388)     (12,799)
    Investment in discontinued operations                 --       (8,958)
    Net cash provided by investing activities         25,995       13,312

  Cash flows from financing activities
    Changes in revolving notes                         2,400       (7,856)
    Proceeds from notes payable                           --        4,250
    Repayments of notes payable                      (19,234)     (28,029)
    Repayment of subordinated debt                    (5,537)      (9,704)
    Dividends                                             --         (847)
    Net cash used in financing activities            (22,371)     (42,186)

  Increase (decrease) in cash and cash equivalents    14,323      (13,786)

  Cash and cash equivalents
    Beginning of period                               58,777       74,547

    End of period                                    $73,100      $60,761


                      THE GREENBRIER COMPANIES, INC.

                         Supplemental Disclosure
  Reconciliation of Net Cash Provided by Operating Activities to EBITDA
                        (In thousands, unaudited)


                                   Three Months Ending  Nine Months Ending
                                         May 31,              May 31,
                                       2003      2002       2003     2002
  Net cash provided
   by operating activities         $ 13,795   $20,149    $10,699  $15,088
  Changes in working capital         (5,686)  (12,319)     4,010   (7,924)
  Changes in discontinued operations (1,200)  (10,351)        69  (10,192)
  Deferred income taxes                 (52)    4,563     (1,088)   9,614
  Gain on sale of equipment               3       306        336      813
  Other                                 302       (86)     1,138      (67)
  Income tax expense (benefit)        2,423      (669)     2,439   (2,665)
  Interest expense                    2,340     3,667      8,613   11,830

  EBITDA from continuing operations $11,925    $5,260    $26,216  $16,497


(A) "EBITDA" (earnings from continuing operations before interest, taxes, depreciation and amortization) is a useful liquidity measurement tool commonly used by rail supply companies and Greenbrier. It should not be considered in isolation or as a substitute for cash flows from operating activities or cash flow statement data prepared in accordance with generally accepted accounting principles.

                      THE GREENBRIER COMPANIES, INC.

  Summarized results of operations of the discontinued operations are:

  (In thousands, unaudited)        Three Months Ended    Nine Months Ended
                                           May 31,             May 31,
                                       2003      2002      2003      2002

  Revenue (A)                       $13,160   $18,425   $68,911   $54,098
  Cost of revenue (A)                10,753    17,572    62,515    53,144
  Margin                              2,407       853     6,396       954

  Selling
   and administrative expense         1,785     1,610     5,561     6,678
  Interest expense                      367       754     1,786     2,761
  Special charges (B)                    --        --        --    17,129
  Earnings (loss) before income taxes
   and minority interest                255    (1,511)     (951)  (25,614)
  Income tax benefit                     99     1,615       217     7,726
  Minority interest                      --        35        --       132
  Earnings (loss)
   from discontinued operations     $   354   $   139   $  (734) $(17,756)


The following assets and liabilities of the European operations are classified as discontinued operations:

  (In thousands, unaudited)                         May 31,   August 31,
                                                     2003         2002
  Cash and cash equivalents                        $  1,846      $  8,069
  Restricted cash                                     4,506           884
  Accounts receivable                                18,633         9,645
  Inventories (A)                                    20,202        39,304
  Designs and patents                                 7,127         5,995
  Property, plant and equipment and other             2,914         1,854
      Total assets - discontinued operations       $ 55,228      $ 65,751

  Revolving notes                                  $ 18,988      $ 22,249
  Accounts payable and accrued liabilities (A)       40,348        47,385
  Notes payable                                       7,994         7,554
      Total liabilities - discontinued operations  $ 67,330      $ 77,188

  Discontinued operations - liabilities            $ 58,130      $ 67,988
  Estimated liabilities
   associated with discontinued operations ©        9,200         9,200
      Total                                        $ 67,330      $ 77,188


(A) August 31, 2002 balances include $26.9 million of 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 during 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 certain obligations of the European operations. The settlement and determination of the final amounts of these obligations will depend in part upon the results of negotiations.

SOURCE: Greenbrier Companies

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