The Greenbrier Companies
Highlights
Financial Performance:
For its fiscal fourth quarter, the Company reported:
-- Net earnings were $8.0 million, or $.52 per diluted share -- more than
double the $3.3 million, or $.23 per diluted share in the fourth
quarter of fiscal 2003.
-- Revenues grew by 47% to $202 million, compared with $137 million in the
fourth quarter of fiscal 2003.
-- New railcar deliveries were 3,000 units, compared with 2,100 units in
the prior year's fourth quarter.
For the full fiscal 2004, the Company reported:
-- Net earnings were $20.8 million, or $1.37 per diluted share, up
dramatically from $4.3 million or $.30 per diluted share in fiscal
2003.
-- Revenues grew to a record $729 million, up 37% over $532 million in
fiscal 2003.
-- New railcar deliveries were a record 10,800 units, compared with
6,500 units in fiscal 2003 and 4,100 units in fiscal 2002.
-- New railcar manufacturing backlog in North America and Europe was
13,100 units valued at $760 million on August 31, 2004, compared with
10,700 units at $580 million at August 31, 2003, and 5,200 units at
$280 million at August 31, 2002. Industrywide backlog of 61,000 units
as of September 30, 2004 is at the highest levels since 1998.
-- The Company reinstituted payment of a quarterly dividend of $.06 per
share during the year.
-- The Company settled litigation, related to its discontinued logistics
operations, during the fourth quarter. This settlement, which reduced a
loss contingency, resulted in earnings from discontinued operations of
$.7 million (net of tax), or $.05 per diluted share, in the fourth
quarter and year ended August 31, 2004.
-- The Company continues to maintain strong liquidity and reduce the
leverage on its balance sheet. Debt and participation paydowns of
nearly $60 million were made during the year; unused lines of credit
were $125 million. EBITDA from continuing operations for fiscal 2004
was $61 million.
Strategic Actions:
-- During 2004, the Company's strategic investment in a castings joint
venture, which operates two facilities, has become fully operational
and provides the Company favorable availability on critical new railcar
components that are in short industry supply.
-- The Company formed a major subcontractor relationship in North America
with another manufacturer of new railcars. This relationship helped
push new railcar deliveries in 2004 to a record 10,800 units.
Enhanced Corporate Governance:
-- During 2004, the Company moved from "controlled" company status and
improved its Corporate Governance. Don Washburn was added to the Board
as an independent director, and Ben Whiteley, an independent Board
member, was elected Chairman. Four of the eight Board members are
independent under the definition of the New York Stock Exchange.
-- The Company formed a Nominating & Corporate Governance Committee,
composed of independent directors and has set a goal of having a
majority of independent Board members well before the statutory
requirement of December 31, 2005.
Fourth-quarter and fiscal 2004 results were driven by higher production rates, improved margins and operating efficiencies from manufacturing operations, coupled with higher lease rates and lease fleet utilization from leasing operations
"Our largest market, the new railcar market in North America, remains robust, particularly for double-stack intermodal cars. This helps fuel our financial results," said William A. Furman, president and chief executive officer. "Order backlogs are at their highest levels in the industry since 1998. Our new railcar backlog grew 22% in fiscal 2004, even while deliveries grew to record levels. We see market strength in both North America and Europe, with backlog providing good financial visibility in fiscal 2005 and into fiscal 2006."
"In recent years our experienced team successfully reduced the leverage on the balance sheet, enhanced customer relationships, added manufacturing capacity and flexibility, and built on our leadership in intermodal cars, which is the fastest growing rail equipment market," said Mr. Furman. "With rising earnings, a large backlog and improved liquidity, we believe Greenbrier is well positioned to capitalize on future opportunities for growth. We continue to explore various strategic options, including acquisition opportunities and a possible shelf registration statement, in consultation with Bear Stearns, our financial advisors."
The Greenbrier Companies (www.gbrx.com), headquartered in Lake Oswego, OR, is a leading supplier of transportation equipment and services to the railroad industry. With manufacturing facilities in the U.S., Canada, Mexico and Poland, Greenbrier produces new railroad freight cars and marine vessels, and performs repair, refurbishment and maintenance activities. Greenbrier owns a lease fleet of 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 fourth quarter and fiscal year end results. Teleconference details are as follows:
Wednesday, November 10, 2004
8:00 a.m. 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
August 31,
(In thousands, except per share amounts, unaudited)
Assets 2004 2003
Cash and cash equivalents $ 12,110 $77,298
Restricted cash 1,085 5,434
Accounts and notes receivable 120,007 80,197
Inventories 113,122 105,652
Investment in direct finance leases 21,244 41,821
Equipment on operating leases 162,258 139,341
Property, plant and equipment 56,415 58,385
Other 22,512 30,820
$508,753 $538,948
Liabilities and Stockholders' Equity
Revolving notes $ 8,947 $ 21,317
Accounts payable and accrued liabilities 178,550 150,874
Participation 37,107 55,901
Deferred income taxes 26,109 16,127
Deferred revenue 2,550 39,779
Notes payable 97,513 117,989
Subordinated debt 14,942 20,921
Subsidiary shares subject to mandatory redemption 3,746 4,898
Stockholders' equity 139,289 111,142
$508,753 $538,948
THE GREENBRIER COMPANIES, INC.
Consolidated Statements of Operations
Years ended August 31,
(In thousands, except per share amounts,
unaudited) 2004 2003 2002
Revenue
Manufacturing $653,234 $461,882 $295,074
Leasing & services 76,217 70,443 72,250
729,451 532,325 367,324
Cost of revenue
Manufacturing 595,026 424,378 278,007
Leasing & services 42,241 43,609 44,694
637,267 467,987 322,701
Margin 92,184 64,338 44,623
Other costs
Selling and administrative expense 48,288 39,962 39,053
Interest and foreign currency 11,468 13,618 18,998
Special charges 1,234 -- 33,802
60,990 53,580 91,853
Earnings (loss) before income tax and
equity in unconsolidated subsidiaries 31,194 10,758 (47,230)
Income tax benefit (expense) (9,119) (4,543) 23,587
Earnings (loss) before equity
in unconsolidated subsidiaries 22,075 6,215 (23,643)
Minority interest -- -- 127
Equity in loss of unconsolidated
subsidiaries (2,036) (1,898) (2,578)
Earnings (loss) from continuing
operations 20,039 4,317 (26,094)
Earnings from discontinued operations
(net of tax) 739 -- --
Net earnings (loss) $ 20,778 $ 4,317 $ (26,094)
Basic earnings (loss) per common share:
Continuing operations $ 1.38 $ 0.31 $ (1.85)
Discontinued operations 0.05 -- --
Net earnings (loss) $ 1.43 $ 0.31 $ (1.85)
Diluted earnings (loss) per common share:
Continuing operations $ 1.32 $ 0.30 $ (1.85)
Discontinued operations 0.05 -- --
Net earnings (loss) $ 1.37 $ 0.30 $ (1.85)
Weighted average common shares:
Basic 14,569 14,138 14,121
Diluted 15,199 14,325 14,121
THE GREENBRIER COMPANIES, INC.
Condensed Consolidated Statements of Cash Flows
Years ended August 31,
(In thousands, unaudited) 2004 2003 2002
Cash flows from operating activities:
Net earnings (loss) $20,778 $ 4,317 $ (26,094)
Adjustments to reconcile net earnings
(loss) to net cash provided by
(used in) operating activities:
Earnings from discontinued operations (739) -- --
Deferred income taxes 9,472 2,304 (13,097)
Depreciation and amortization 20,840 18,711 23,497
Gain on sales of equipment (629) (454) (910)
Special charges 1,234 -- 33,802
Other 2,873 1,830 (2,792)
Decrease (increase) in assets:
Accounts and notes receivable (38,570) (25,419) (4,167)
Inventories (11,089) (12,592) (3,780)
Other 2,367 1,000 4,210
Increase (decrease) in liabilities:
Accounts payable and
accrued liabilities 35,177 34,162 (2,098)
Participation (18,794) (5,094) 22
Deferred revenue (36,975) 9,574 14,045
Net cash provided by (used in)
operating activities (14,055) 28,339 22,638
Cash flows from investing activities:
Principal payments received under
direct finance leases 9,461 14,294 18,828
Proceeds from sales of equipment 16,217 23,954 24,042
Investment in and advances to
unconsolidated subsidiaries (2,240) (3,126) --
Decrease (increase) in restricted cash 4,349 (5,300) (40)
Capital expenditures (42,959) (11,895) (22,659)
Net cash provided by (used in)
investing activities (15,172) 17,927 20,171
Cash flows from financing activities:
Changes in revolving notes (12,370) (4,503) (7,166)
Proceeds from notes payable -- 6,348 4,285
Repayments of notes payable (21,539) (34,058) (38,268)
Repayment of subordinated debt (5,979) (6,148) (10,422)
Dividends (889) -- (847)
Proceeds from exercise of stock options 6,093 1,797 --
Purchase of subsidiary's shares subject
to mandatory redemption (1,277) -- --
Net cash used in financing activities (35,961) (36,564) (52,418)
Increase (decrease) in cash and
cash equivalents
(65,188) 9,702 (9,609)
Cash and cash equivalents
Beginning of period 77,298 67,596 77,205
End of period $12,110 $77,298 $ 67,596
THE GREENBRIER COMPANIES, INC.
Supplemental Disclosure
Reconciliation of Net Cash Provided by (used in)
Operating Activities to EBITDA
(In thousands, unaudited)
August 31,
2004 2003 2002
Net cash (used in) provided by
operating activities $ (14,055) $ 28,339 $ 22,638
Changes in working capital 67,884 (1,631) (8,232)
Special Charges (1,234) -- (33,802)
Deferred income taxes (9,472) (2,304) 13,097
Gain on sales of equipment 629 454 910
Other (2,873) (1,830) 2,792
Income tax expense (benefit) 9,119 4,543 (23,587)
Interest and foreign currency 11,468 13,618 18,998
EBITDA from continuing operations $ 61,466 $ 41,189 $ (7,186)
(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.
Quarterly Results of Operations
Unaudited operating results by quarter for 2004 and 2003 are as follows:
(In thousands, except per share amounts)
First Second Third Fourth Total
2004
Revenue
Manufacturing $ 117,303 $ 148,725 $ 207,136 $ 180,070 $ 653,234
Leasing & services 17,896 17,836 18,157 22,328 76,217
135,199 166,561 225,293 202,398 729,451
Cost of revenue
Manufacturing 104,589 138,993 189,275 162,169 595,026
Leasing & services 10,837 10,404 10,301 10,699 42,241
115,426 149,397 199,576 172,868 637,267
Margin 19,773 17,164 25,717 29,530 92,184
Other costs
Selling and
administrative expense 10,060 10,924 12,352 14,952 48,288
Interest expense 2,601 2,604 2,932 3,331 11,468
Special charges -- 1,234 -- -- 1,234
Earnings before income
tax, minority interest,
and equity in
unconsolidated
subsidiaries 7,112 2,402 10,433 11,247 31,194
Income tax benefit
(expense) (2,639) 1,309 (4,116) (3,673) (9,119)
Equity in loss of
unconsolidated
subsidiaries (318) (1,474) 58 (302) (2,036)
Net earnings from
continuing operations 4,155 2,237 6,375 7,272 20,039
Earnings from
discontinued operations -- -- -- 739 739
Net earnings $ 4,155 $ 2,237 $ 6,375 $ 8,011 $ 20,778
Basic earnings per
common share:
Continuing operations $ .29 $ .15 $ .44 $ .50 $ 1.38
Net earnings $ .29 $ .15 $ .44 $ .55 $ 1.43
Diluted earnings per
common share:
Continuing operations $ .28 $ .15 $ .42 $ .47 $ 1.32
Net earnings $ .28 $ .15 $ .42 $ .52 $ 1.37
First Second Third Fourth Total
2003
Revenue
Manufacturing $121,111 $ 100,390 $ 121,259 $ 119,122 $ 461,882
Leasing & services 17,679 18,190 16,853 17,721 70,443
138,790 118,580 138,112 136,843 532,325
Cost of revenue
Manufacturing 113,833 95,438 109,247 105,860 424,378
Leasing & services 11,566 10,961 10,265 10,817 43,609
125,399 106,399 119,512 116,677 467,987
Margin 13,391 12,181 18,600 20,166 64,338
Other costs
Selling and
administrative expense 9,455 9,553 10,102 10,852 39,962
Interest and
foreign exchange 3,934 3,758 2,707 3,219 13,618
Earnings (loss) before
income tax, minority
interest, and equity in
unconsolidated subsidiary 2 (1,130) 5,791 6,095 10,758
Income tax benefit
(expense) (210) 312 (2,324) (2,321) (4,543)
Minority interest (18) 18 -- -- --
Equity in loss of
unconsolidated
subsidiary (517) (437) (461) (483) (1,898)
Net earnings (loss) $ (743) $ (1,237) $ 3,006 $ 3,291 $ 4,317
Basic earnings (loss)
per common share: $ (.05) $ (.09) $ .21 $ .24 $ .31
Diluted earnings (loss)
per common share: $ (.05) $ (.09) $ .21 $ .23 $ .30
Certain reclassifications have been made to conform to the 2004 presentation.
SOURCE: The Greenbrier Companies
CONTACT: Mark Rittenbaum of The Greenbrier Companies, +1-503-684-7000
Web site: http://www.gbrx.com/