Highlights
* Net earnings for the second quarter of fiscal 2005 were $4.8 million,
or $.31 per diluted share, more than double the net earnings of $2.2
million, or $.15 per diluted share, for the second quarter of fiscal
2004.
* Revenues for the second quarter grew 53% to $255 million, from $167
million in the prior year's second quarter.
* New railcar deliveries for the quarter were 3,100 units, up 35% from
2,300 units for the second quarter of fiscal 2004.
* New railcar manufacturing backlog in North America and Europe was
12,300 units valued at $720 million at February 28, 2005 compared with
10,000 units valued at $560 million at February 29, 2004.
* During the quarter, the Company received orders for approximately
5,000 railcars, including 4,500 double-stack intermodal railcars.
* Greenbrier now owns 100% of Gunderson-Concarril, the builder of
freight cars in Mexico. In December 2004, the Company acquired
Bombardier's 50% interest in the operations. Gunderson-Concarril is
meeting its financial objectives and will play an increasingly major
role in Greenbrier's North American footprint.
* Greenbrier strengthened its senior management team with the hiring of
Alejandro Centurion, as head of the Company's Mexican operations. Mr.
Centurion has more than 25 years of manufacturing experience, with
recent responsibilities at Bombardier Transportation for five railcar
plants and 3,500 employees.
* Subsequent to quarter end, the Company acquired from GE two railcar
repair and refurbishment facilities located in the southeastern U.S.
GE will provide Greenbrier with a minimum base load of work at the two
facilities over the next 10 years.
Financial Results:
The Greenbrier Companies
William A. Furman, president and chief executive officer, said, "Demand for our products and services remain strong, and our railcar and marine backlog provides good financial visibility well into 2006. Earnings for the quarter were in line with our expectations. We anticipate earnings will be higher in the second half of the year than in the first half, similar to the pattern we experienced in fiscal 2004."
Furman added, "Strategic initiatives in our core railcar businesses continue. We continue to seek out acquisitions that will be accretive to earnings and initiatives that will increase shareholder value."
Cash Flow, Liquidity, Deliveries:
Mark Rittenbaum, senior vice president and treasurer, said, "We remain on pace to deliver nearly 13,000 railcars in fiscal 2005. EBITDA for the quarter was $17.9 million, compared with $8.6 million in the prior comparable quarter. The manufacturing margin compression for the quarter, compared with the first fiscal quarter, was principally due to inclement weather at our Canadian facility, production line change-overs and the inclusion of our Mexican operations in the consolidated results this quarter. The margins of our Mexican operation are currently lower than other facilities. However, we expect them to improve significantly in the second half of the fiscal year, now that Gunderson-Concarril is under Greenbrier's control."
Rittenbaum added, "The increased usage of our revolving credit lines is consistent with increased working capital needs associated with operating at higher production rates. We plan to complete a debt financing during the fiscal year to provide additional growth capital, take advantage of favorable market conditions, and maintain our highly liquid capital position."
The Greenbrier Companies (www.gbrx.com), headquartered in Lake Oswego, OR, is a leading supplier of transportation equipment and services to the railroad industry. In addition to building new railroad freight cars in the U.S., Canada, and Mexico and to repairing and refurbishing freight cars and wheels at 16 locations across North America, Greenbrier builds new railroad freight cars and refurbishes freight cars for the European market through both its operations in Poland and various subcontractor facilities throughout Europe. Greenbrier owns approximately 10,000 railcars, and performs management services for approximately 125,000 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, 2004. 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 second quarter fiscal 2005 results. Teleconference details are as follows:
Wednesday, March 30, 2005
8:00 am Pacific Standard Time
Phone #: 630-395-0143, Password: "Greenbrier"
Webcast Real-time Audio Access: ("Newsroom" at http://www.gbrx.com/)
Please access the website 10 minutes prior to the start time. Following
the call, a replay will be available on the same website.
THE GREENBRIER COMPANIES, INC.
Condensed Consolidated Balance Sheets
(In thousands, unaudited)
February 28, August 31,
2005 2004
Assets
Cash and cash equivalents $12,063 $12,110
Restricted cash 530 1,085
Accounts and notes receivable 143,729 120,007
Inventories 147,636 113,122
Investment in direct finance leases 13,253 21,244
Equipment on operating leases 174,911 162,258
Property, plant and equipment 67,598 56,415
Other 18,819 22,512
$578,539 $508,753
Liabilities and Stockholders' Equity
Revolving notes $74,166 $8,947
Accounts payable and accrued liabilities 182,279 178,550
Participation 4,750 2,550
Deferred revenue 21,052 37,107
Deferred income taxes 25,349 26,109
Notes payable 98,742 97,513
Subordinated debt 10,573 14,942
Subsidiary shares subject to mandatory
redemption 3,746 3,746
Stockholders' equity 157,882 139,289
$578,539 $508,753
THE GREENBRIER COMPANIES, INC.
Consolidated Statements of Operations
(In thousands, except per share amounts, unaudited)
Three Months Ended Six Months Ended
Feb. 28, Feb. 29, Feb. 28, Feb. 29,
2005 2004 2005 2004
Revenue
Manufacturing $233,808 $148,725 $434,205 $266,028
Leasing & services 21,105 17,836 38,756 35,732
254,913 166,561 472,961 301,760
Cost of revenue
Manufacturing 217,796 138,993 400,658 243,582
Leasing & services 10,570 10,404 20,950 21,241
228,366 149,397 421,608 264,823
Margin 26,547 17,164 51,353 36,937
Other costs
Selling and
administrative 14,044 10,924 26,116 20,984
Interest and foreign
exchange 4,295 2,604 7,355 5,205
Special charges -- 1,234 -- 1,234
18,339 14,762 33,471 27,423
Earnings before
income taxes and
equity in
unconsolidated
subsidiaries 8,208 2,402 17,882 9,514
Income tax benefit
(expense) (3,397) 1,309 (6,951) (1,330)
Earnings before
equity in
unconsolidated
subsidiaries 4,811 3,711 10,931 8,184
Equity in loss of
unconsolidated
subsidiaries (9) (1,474) (739) (1,792)
Net earnings $4,802 $2,237 $10,192 $6,392
Basic earnings per
common share $0.32 $0.15 $0.68 $0.44
Diluted earnings per
common share $0.31 $0.15 $0.66 $0.42
Weighted average
common shares:
Basic 14,954 14,517 14,924 14,435
Diluted 15,573 15,178 15,542 15,051
THE GREENBRIER COMPANIES, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands, unaudited)
Six Months Ended
February 28, February 29,
2005 2004
Cash flows from operating activities
Net earnings $10,192 $6,392
Adjustments to reconcile net earnings to net
cash used in operating activities:
Deferred income taxes (587) (1,503)
Depreciation and amortization 10,693 10,327
Gain on sales of equipment (3,518) (190)
Special charges -- 1,234
Other 901 774
Decrease (increase) in assets:
Accounts and notes receivable (49,217) (26,167)
Inventories 12,709 (26,895)
Other (717) 2,262
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities (18,069) (12,508)
Participation (16,055) (19,550)
Deferred revenue 1,679 (2,606)
Net cash used in operating activities (51,989) (68,430)
Cash flows from investing activities
Principal payments received under direct
finance leases 3,285 5,227
Proceeds from sales of equipment 20,005 9,922
Investment in and advances to unconsolidated
subsidiary (34) (1,005)
Acquisition of joint venture interest 8,435 --
Decrease in restricted cash 662 3,543
Capital expenditures (34,844) (18,192)
Net cash used in investing activities (2,491) (505)
Cash flows from financing activities
Changes in revolving notes 63,001 9,248
Repayments of notes payable (8,907) (12,477)
Repayment of subordinated debt (4,369) (4,701)
Dividends (1,793) --
Proceeds from exercise of stock options 2,140 3,265
Purchase of subsidiary shares subject to
mandatory redemption -- (968)
Net cash provided by (used in) financing
activities 50,072 (5,633)
Effect of exchange rate changes 4,361 1,517
Decrease in cash and cash equivalents (47) (73,051)
Cash and cash equivalents
Beginning of period 12,110 77,298
End of period $12,063 $4,247
THE GREENBRIER COMPANIES, INC.
Supplemental Disclosure
Reconciliation of Net Cash Provided by Operating Activities to EBITDA (1)
(In thousands, unaudited)
Three Months Ended Six Months Ended
Feb. 28, Feb. 29, Feb. 28, Feb. 29,
2005 2004 2005 2004
Net cash used in
operating
activities $(29,481) $ (49,518) $(51,989) $(68,430)
Changes in working
capital 35,717 53,501 69,670 85,464
Deferred income taxes 1,432 4,491 587 1,503
Gain on sales of
equipment 3,432 44 3,518 190
Special charges -- (1,234) -- (1,234)
Other (890) (17) (901) (774)
Income tax expense 3,397 (1,309) 6,951 1,330
Interest and foreign
exchange 4,295 2,604 7,355 5,205
EBITDA from operations $17,902 $8,562 $35,191 $23,254
(1) EBITDA is not a financial measure under GAAP. We define EBITDA as
earnings from operations before interest and foreign exchange,
taxes, depreciation and amortization. We consider net cash provided
by operating activities to be the most directly comparable GAAP
financial measure. EBITDA is a liquidity measurement tool commonly
used by rail supply companies and we use EBITDA in that fashion.
You should not consider EBITDA in isolation or as a substitute for
cash flow from operations or other cash flow statement data
determined in accordance with GAAP. In addition, because EBITDA is
not a measure of financial performance under GAAP and is susceptible
to varying calculations, the EBITDA measure presented may differ
from and may not be comparable to similarly titled measures used by
other companies.
SOURCE: The Greenbrier Companies
CONTACT: Mark Rittenbaum of Greenbrier Companies, +1-503-684-7000
Web site: http://www.gbrx.com/