Press Releases

Greenbrier Reports Second Quarter Results of $.15 Per Share
PRNewswire-FirstCall
LAKE OSWEGO, Ore.
  Highlights

  -- Revenues for the second quarter of fiscal 2004 grew to $167 million, up
     40% from $119 million in the prior year's second quarter, and up
     23% from $135 million in the first quarter of fiscal 2004.
  -- Net earnings for the quarter were $2.2 million, or $.15 per diluted
     share.  This compares to a net loss of $1.2 million, or $.09 per
     diluted share, for the second quarter of fiscal 2003, and net earnings
     of $4.2 million, or $.28 per diluted share for the first quarter of
     fiscal 2004.
  -- During the quarter, the Company decided to complete the
     recapitalization of its European operations with internal funds and to
     continue to hold its European investment.  Accordingly, European
     financial results are included in continuing operations for all periods
     presented.
  -- New railcar manufacturing backlog in North America and Europe was
     10,000 units valued at $560 million at February 29, 2004, compared to
     11,500 units valued at $620 million at November 30, 2003.  Subsequent
     to quarter end, the Company received orders for 1,400 railcars valued
     at $110 million.
  -- A court-ordered preliminary injunction to halt production of 500 drop
     deck center partition cars for Canadian Pacific Railroad was lifted
     during the quarter.  Further court proceedings have been delayed as the
     Company seeks a final settlement of this matter.
  -- Greenbrier continued to address industry supply issues during the
     quarter.  A second railcar truck castings foundry located in Alliance,
     Ohio was opened by the Company's unconsolidated joint venture with ACF
     Industries and ASF Keystone.
  -- During the quarter, Greenbrier also settled its arbitration claim
     relating to the acquisition of operations in Germany in 2000.
     Greenbrier realized a $6.3 million pre-tax reduction in its purchase
     price liabilities associated with the acquisition.  The Company also
     wrote off the remaining book value of European patents and designs of
     $7.5 million pre-tax.  Both these items are included in special
     charges.

  Financial Results; Special Charges; Unusual Items; Start-Up Costs:

The Greenbrier Companies today reported net earnings of $2.2 million, or $.15 per diluted share, for its second fiscal quarter ended February 29, 2004.

These results include special charges totaling $1.2 million pre-tax. These charges consist of a $7.5 million write-off of the remaining book value of European patents and designs, partially offset by a $6.3 million reduction in Greenbrier's purchase price liabilities resulting from the settlement of the Company's arbitration claim on its acquisition of operations in Germany.

During the quarter, the Company incurred nearly $1.5 million of pre-tax costs relating to scrap steel surcharges and $1.0 million of pre-tax costs related to the rework of certain defective components supplied by third parties. A substantial portion of these rework costs may be recovered in future periods, as a result of a settlement with the supplier. The quarter was also adversely impacted by weather-related plant shutdowns at TrentonWorks in Canada and Gunderson in Oregon. These issues, coupled with a continued industrywide shortage in the availability of rail castings, resulted in production of nearly 250 railcars being delayed to the third fiscal quarter. As well, nearly 300 cars were produced and leased in the first and second fiscal quarters that are expected to be sold in the third fiscal quarter. These 300 cars are currently included in inventory.

Finally, the financial results of the Company's unconsolidated investment in two rail castings facilities were adversely affected by start-up costs at the Alliance facility and lost production due to temporary equipment issues at the Cicero facility.

Effects of Steel Issues:

William A. Furman, president and chief executive officer, said, "Our backlog stretches into calendar 2005. Greenbrier, like many other machinery manufacturers, is coping with the effects of a volatile steel marketplace. Prices for steel, the primary component of railcars and barges, have risen sharply this year. Steel providers are also charging scrap surcharges. In addition, the price and availability of other railcar components, which are a product of steel, have been adversely affected by steel issues."

"The Company's manufacturing margins were negatively impacted by the steel markets during the quarter, despite supply contracts which covered a large portion of our backlog. The Company was forced by steel market conditions, supplier behavior and scrap surcharges to absorb some cost increases which could not be passed on to customers."

"In January, a senior management team was appointed to manage this issue, with significant positive results. Greenbrier is taking aggressive action to work with suppliers to minimize cost increases and surcharges and, where possible, to pass on higher material costs to customers. Starting in January, new railcar pricing has contained escalation clauses for materials price increases. In addition, the Company is realizing revenue and margin enhancement from equipment trading activities and higher lease rates on our lease fleet, and increased yields from scrap sales from our lease fleet and manufacturing operations. The benefits of these activities will begin to have more material positive effects starting in the Company's third fiscal quarter."

European Recapitalization:

Furman also noted, "During the quarter, the Company decided to complete the recapitalization of Europe with internal funds, as final negotiations with potential investors proved unsatisfactory. Our European operations continue to be profitable. As part of the recapitalization, revolving lines of credit of approximately $19 million and performance guarantees relating to new sale contracts of the European operations will no longer be guaranteed by the Parent."

Cash Flow, Liquidity, Deliveries:

Mark Rittenbaum, senior vice president & treasurer, said, "EBITDA for the first six months of 2004 was $23 million. During the year, cash balances have been reduced by $73 million, principally due to the following: normal fluctuations in working capital, repayments of debt and participation of $27 million, and lease fleet additions of $18 million. Inventory levels are up nearly $25 million from August 31, 2003, due to railcars produced during the first and second fiscal quarter which are expected to be sold in the third fiscal quarter. Unused lines of credit remain at nearly $100 million."

Rittenbaum added, "New railcar deliveries in North America and Europe for the second fiscal quarter were 2,300 units, which brings the six month total to 4,200 units. Deliveries are anticipated to be at higher rates during the second half of the fiscal year, pushing total deliveries for the fiscal year to about 10,000 units."

The Greenbrier Companies (www.gbrx.com), 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 produces rail castings through an unconsolidated joint venture and also manufactures new freight cars through the use of unaffiliated subcontractors. 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 approximately 12,000 railcars and performs management services for approximately 113,000 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 fiscal 2004 results. Teleconference details are as follows:

   Wednesday, April 14, 2004
   7:30 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)


                                                 February 29,    August 31,
                                                     2004           2003
  Assets
    Cash and cash equivalents                       $4,247        $77,298
    Restricted cash                                  2,467          5,434
    Accounts and notes receivable                  107,196         80,197
    Inventories                                    129,815        105,652
    Investment in direct finance leases             27,150         41,821
    Equipment on operating leases                  152,740        139,341
    Property, plant and equipment                   56,406         58,385
    Other                                           22,896         30,820
                                                  $502,917       $538,948

  Liabilities and Stockholders' Equity
    Revolving notes                                $31,027        $21,317
    Accounts payable and accrued liabilities       135,492        150,874
    Participation                                   36,351         55,901
    Deferred revenue                                37,961         39,779
    Deferred income taxes                           14,504         16,127
    Notes payable                                  106,756        117,989

    Subordinated debt                               16,220         20,921

    Subsidiary shares subject to mandatory
     redemption                                      4,034          4,898

    Stockholders' equity                           120,572        111,142
                                                  $502,917       $538,948


                                             THE GREENBRIER COMPANIES, INC.

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

                          Three Months Ended          Six Months Ended
                       February 29, February 28, February 29, February 28,
                           2004         2003         2004         2003
  Revenue
    Manufacturing       $148,725     $100,390     $266,028     $221,500
    Leasing & services    17,836       18,190       35,732       35,869
                         166,561      118,580      301,760      257,369

  Cost of revenue
    Manufacturing        138,993       95,438      243,582      209,271
    Leasing & services    10,404       10,961       21,241       22,526
                         149,397      106,399      264,823      231,797

  Margin                  17,164       12,181       36,937       25,572

  Other costs
    Selling and
     administrative
     expense              10,924        9,553       20,984       19,008
    Interest expense       2,604        3,758        5,205        7,692
    Special Charges        1,234           --        1,234           --
                          14,762       13,311       27,423       26,700
  Earnings (loss) before
   income taxes, minority
   interest and equity in
   unconsolidated
   subsidiaries            2,402      (1,130)        9,514      (1,128)

  Income tax benefit
   (expense)               1,309          312      (1,330)          102
  Earnings (loss)
   before minority
   interest and equity
   in unconsolidated
   subsidiaries            3,711        (818)        8,184      (1,026)

  Minority interest           --           18           --           --
  Equity in loss of
   unconsolidated
   subsidiaries          (1,474)        (437)      (1,792)        (955)

  Net earnings (loss)     $2,237     $(1,237)       $6,392     $(1,981)

  Basic earnings (loss)
   per common share        $0.15      $(0.09)        $0.44      $(0.14)

  Diluted earnings (loss)
   per common share        $0.15      $(0.09)        $0.42      $(0.14)

  Weighted average common
   shares:
     Basic                14,517       14,121       14,435       14,121
     Diluted              15,178       14,121       15,051       14,121


                                              THE GREENBRIER COMPANIES, INC.

  Consolidated Statements of Cash Flows
  (In thousands, unaudited)

                                                      Six Months Ended
                                                 February 29, February 28,
                                                     2004           2003
  Cash flows from operating activities
    Net earnings (loss)                             $6,392       $(1,981)
    Adjustments to reconcile net earnings
     (loss) to net cash provided by (used in)
     operating activities:
       Deferred income taxes                       (1,623)          1,036
       Depreciation and amortization                10,327          9,112
       Gain on sales of equipment                    (190)          (333)
       Special charges                               1,234             --
       Other                                           369          (759)
       Decrease (increase) in assets:
         Accounts and notes receivable            (26,999)        (1,888)
         Inventories                              (28,240)         11,208
         Other                                       2,088          1,455
       Increase (decrease) in liabilities:
         Accounts payable and accrued liabilities  (9,043)         13,313
         Participation                            (19,550)        (6,256)
         Deferred revenue                          (1,564)       (24,091)
    Net cash (used in) provided by operating
     activities                                   (66,799)            816

  Cash flows from investing activities
    Principal payments received under direct
     finance leases                                  5,227          7,801
    Proceeds from sales of equipment                 9,922         17,492
    Purchase of property and equipment            (18,192)        (5,539)
    Decrease (increase) in restricted cash           2,967            (1)
    Investment in unconsolidated joint venture     (1,005)             --
    Net cash (used in) provided by investing
     activities                                    (1,081)         19,753

  Cash flows from financing activities
    Changes in revolving notes                       9,710          (829)
    Repayments of notes payable                   (12,477)       (15,598)
    Repayment of subordinated debt                 (4,701)        (3,938)
    Exercise of stock options                        3,265             --
    Purchase of subsidiary shares subject to
     mandatory redemption                            (968)             --
    Net cash (used in) provided by financing
     activities                                    (5,171)       (20,365)

  Increase (decrease) in cash and cash
   equivalents                                    (73,051)            204

  Cash and cash equivalents
    Beginning of period                             77,298         67,596

    End of period                                   $4,247        $67,800


                                              THE GREENBRIER COMPANIES, INC.

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

                          Three Months Ended         Three Months Ended
                       November 30, November 30, February 29, February 28,
                            2003         2002         2004         2003
  Revenue
    Manufacturing       $117,303     $121,110     $148,725     $100,390
    Leasing and
     Services             17,896       17,679       17,836       18,190
                         135,199      138,789      166,561      118,580
  Cost of revenue
    Manufacturing        104,589      113,833      138,993       95,438
    Leasing and
     Services             10,837       11,565       10,404       10,961
                         115,426      125,398      149,397      106,399

  Margin                  19,773       13,391       17,164       12,181

  Other costs
    Selling and
     administrative
     expense              10,060        9,455       10,924        9,553
    Interest expense       2,601        3,934        2,604        3,758
    Special charges           --           --        1,234           --
                          12,661       13,389       14,762       13,311

  Earnings (loss) before
   income taxes, minority
   interest and equity in
   earnings (loss) of
   unconsolidated
   subsidiaries            7,112            2        2,402      (1,130)

  Income tax (expense)
   benefit               (2,639)        (210)        1,309          312

  Earnings (loss) before
   minority interest and
   equity in earnings
   (loss) of
   unconsolidated
   subsidiaries            4,473        (208)        3,711        (818)

  Minority interest           --         (18)           --           18
  Equity in loss of
   unconsolidated
   subsidiary              (318)        (517)      (1,474)        (437)

  Net earnings (loss)     $4,155       $(743)       $2,237     $(1,237)

  Basic earnings (loss)
   per common share        $0.29      $(0.05)        $0.15      $(0.09)

  Diluted earnings
   (loss) per common
   share                   $0.28      $(0.05)        $0.15      $(0.09)

  Weighted average
   common shares
    Basic                 14,353       14,121       14,517       14,121
    Diluted               14,890       14,121       15,178       14,121


                                              THE GREENBRIER COMPANIES, INC.


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

                                                       Six Months ended
                                                February 29,    February 28,
                                                    2004             2003

  Net cash (used in) provided by
   operating activities                          $(66,799)           $816
  Changes in working capital                       83,308           6,259
  Deferred income taxes                             1,623          (1,036)
  Gain on sales of equipment                          190             333
  Special charges                                  (1,234)             --
  Other                                              (369)            759
  Income tax (benefit) expense                      1,330            (102)
  Interest expense                                  5,205           7,692

  EBITDA                                          $23,254         $14,721


  (1) "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.

SOURCE: Greenbrier Companies

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