Highlights
* Net earnings for the third quarter were $6.4 million, or $.42 per
diluted share, equal to net earnings for the entire first half of
fiscal 2004. Third quarter earnings are double the net earnings of
$3.0 million, or $.21 per diluted share, for the third quarter of
fiscal 2003.
* Revenues for the third quarter grew to $225 million, up 63% from
$138 million in the prior year's third quarter, and up 35% from $167
million in the second quarter of fiscal 2004.
* New railcar deliveries for the quarter were 3,600 units, up 125%
from 1,600 units for the third quarter of fiscal 2003. Year to date
deliveries were 7,800 units compared to 4,400 in the prior fiscal
year. Current quarter deliveries include 600 units produced in a
prior period for which revenue recognition was deferred until the
current quarter.
* New railcar manufacturing backlog in North America and Europe was at
a month-end record 14,300 units valued at $840 million at June 30,
2004 compared to 9,700 units valued at $600 million at May 31, 2004,
and to 10,000 units valued at $560 million at February 29, 2004.
Financial Results:
The Greenbrier Companies
William A. Furman, president and chief executive officer, said, "All lines of business realized improved performance and contributed to the strong quarterly results. The economic recovery and growth in railroad freight loadings have helped fuel our profitability. However, initiatives instituted earlier in the year are also paying off. As an example, a team was put in place to aggressively manage steel and scrap surcharge issues with customers and suppliers. The increase in manufacturing margins and pricing on recent orders in backlog reflects the successes realized in this area."
Furman added, "Greenbrier's new railcar backlog is at record levels, with car types which will help assure long, efficient production runs. The Company's market share of total North American new railcar industry backlog was 25% at June 30, 2004, while our share of industry capacity is only about 15%. This strong backlog provides good financial visibility through most of fiscal 2005. Our leasing operations continue to realize margin enhancement, as a result of lease extensions at higher lease rates and higher lease fleet utilization."
Cash Flow, Liquidity, Deliveries:
Mark Rittenbaum, senior vice president and treasurer, said, "EBITDA for the quarter was $19 million, and year to date was $42 million. Unused lines of credit remain at nearly $100 million, with over $40 million of debt and participation paid down year to date. We now anticipate Greenbrier's new railcar deliveries will exceed 10,500 units for the fiscal year, surpassing our earlier estimates of 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 11,000 railcars and performs management services for approximately 122,000 railcars.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: This release may contain forward-looking statements. Greenbrier uses words such as "anticipate," "believe," "plan," "expect," "future," "intend" and similar expressions to identify forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, actual future costs and the availability of materials and a trained workforce; steel price increases and scrap surcharges; changes in product mix and the mix between manufacturing and leasing & services segment; labor disputes, energy shortages or operating difficulties that might disrupt manufacturing operations or the flow of cargo; production difficulties and product delivery delays as a result of, among other matters, changing technologies or non-performance of subcontractors or suppliers; ability to obtain suitable contracts for the sale of leased equipment; all as may be discussed in more detail under the heading "Forward Looking Statements" on pages 3 through 4 of Part I of our Annual Report on Form 10-K for the fiscal year ended August 31, 2003. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's opinions only as of the date hereof. We undertake no obligation to revise or publicly release the results of any revision to these forward- looking statements.
The Greenbrier Companies will host a teleconference to discuss third quarter fiscal 2004 results. Teleconference details are as follows:
Wednesday, July 14, 2004
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,
2004 2003
Assets
Cash and cash equivalents $13,793 $77,298
Restricted cash 1,826 5,434
Accounts and notes receivable 111,762 80,197
Inventories 91,667 105,652
Investment in direct finance leases 24,628 41,821
Equipment on operating leases 163,340 139,341
Property, plant and equipment 55,095 58,385
Other 23,916 30,820
$486,027 $538,948
Liabilities and Stockholders' Equity
Revolving notes $24,362 $21,317
Accounts payable and accrued liabilities 153,818 150,874
Participation 36,731 55,901
Deferred revenue 2,233 39,779
Deferred income taxes 18,058 16,127
Notes payable 102,429 117,989
Subordinated debt 15,966 20,921
Subsidiary shares subject to mandatory
redemption 3,746 4,898
Stockholders' equity 128,684 111,142
$486,027 $538,948
THE GREENBRIER COMPANIES, INC.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts, unaudited)
Three Months Ended Nine Months Ended
May 31, May 31, May 31, May 31,
2004 2003 2004 2003
Revenue
Manufacturing $207,136 $121,259 $473,164 $342,759
Leasing & services 18,157 16,853 53,888 52,722
225,293 138,112 527,052 395,481
Cost of revenue
Manufacturing 189,275 109,247 432,857 318,518
Leasing & services 10,301 10,265 31,542 32,791
199,576 119,512 464,399 351,309
Margin 25,717 18,600 62,653 44,172
Other costs
Selling and
administrative 12,352 10,102 33,336 29,110
Interest and foreign
exchange 2,932 2,707 8,136 10,399
Special charges -- -- 1,234 --
15,284 12,809 42,706 39,509
Earnings before income
taxes and equity in
unconsolidated
subsidiaries 10,433 5,791 19,947 4,663
Income tax expense (4,116) (2,324) (5,446) (2,222)
Earnings before equity
in unconsolidated
subsidiaries 6,317 3,467 14,501 2,441
Equity in earnings
(loss) of
unconsolidated
subsidiaries 58 (461) (1,734) (1,416)
Net earnings $6,375 $3,006 $12,767 $1,025
Basic earnings per
common share $0.44 $0.21 $0.88 $0.07
Diluted earnings per
common share $0.42 $0.21 $0.84 $0.07
Weighted average common shares:
Basic 14,628 14,121 14,500 14,121
Diluted 15,224 14,332 15,111 14,261
THE GREENBRIER COMPANIES, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands, unaudited)
Nine Months Ended
May 31, May 31,
2004 2003
Cash flows from operating activities
Net earnings $12,767 $1,025
Adjustments to reconcile net earnings to net
cash provided by (used in) operating activities:
Deferred income taxes 1,931 1,088
Depreciation and amortization 15,529 13,779
Gain on sales of equipment (236) (336)
Special charges 1,234 --
Other 1,669 (928)
Decrease (increase) in assets:
Accounts and notes receivable (27,815) (15,463)
Inventories 9,714 (3,430)
Other 1,028 (3,721)
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities 9,300 30,397
Participation (19,170) (5,622)
Deferred revenue (37,292) (3,249)
Net cash (used in) provided by operating
activities (31,341) 13,540
Cash flows from investing activities
Principal payments received under direct
finance leases 7,348 11,290
Proceeds from sales of equipment 10,719 22,093
Purchase of property and equipment (33,277) (8,532)
Decrease (increase) in restricted cash 3,608 (1,103)
Investment in and advances to unconsolidated
joint venture (4,755) --
Net cash (used in) provided by investing
activities (16,357) 23,748
Cash flows from financing activities
Changes in revolving notes 3,045 (862)
Repayments of notes payable (16,504) (20,270)
Repayment of subordinated debt (4,955) (5,537)
Exercise of stock options 3,884 --
Purchase of subsidiary shares subject to
mandatory redemption (1,277) --
Net cash used in financing activities (15,807) (26,669)
Increase (decrease) in cash and cash
equivalents (63,505) 10,619
Cash and cash equivalents
Beginning of period 77,298 67,596
End of period $13,793 $78,215
THE GREENBRIER COMPANIES, INC.
Supplemental Disclosure
Reconciliation of Net Cash Provided by Operating Activities to EBITDA
(In thousands, unaudited)
Three Months Ended Nine Months Ended
May 31, May 31, May 31, May 31,
2004 2003 2004 2003
Net cash (used in)
provided by operating
activities $35,458 $12,724 $ (31,341) $13,540
Changes in working
capital (19,073) (5,171) 64,235 1,088
Deferred income taxes (3,554) (52) (1,931) (1,088)
Gain on sales of
equipment 46 3 236 336
Special charges -- -- (1,234) --
Other (1,300) 169 (1,669) 928
Income tax expense 4,116 2,324 5,446 2,222
Interest and foreign
exchange 2,932 2,707 8,136 10,399
EBITDA(1) $18,625 $12,704 $ 41,878 $27,425
(1) "EBITDA" (earnings from continuing operations before interest and
foreign exchange, 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: The Greenbrier Companies
CONTACT: Mark Rittenbaum of Greenbrier Companies, +1-503-684-7000
Web site: http://www.gbrx.com/