Highlights
-- Net earnings, excluding special charges for prepayment of certain debt, was a quarterly record $10.7 million, or $.69 per diluted share, for the third fiscal quarter ended May 31, 2005. After the special charges of $1.7 million net of tax, net earnings for the quarter were $9.0 million, or $.58 per diluted share. These net earnings are up 42% from net earnings of $6.4 million, of $.42 per diluted share, for the third quarter of fiscal 2004.
-- Revenues for the third quarter grew to $286 million, up 27% from $225 million in the prior year's third quarter. The current quarter includes revenues from Mexican operations, formerly accounted for under the equity method and consolidated beginning December 1, 2004.
-- New railcar deliveries were 3,600 units for both the third quarters of 2005 and 2004.
-- New railcar manufacturing backlog in North America and Europe was 11,500 units valued at $650 million at May 31, 2005, compared with 9,700 units valued at $600 million at May 31, 2004.
-- Greenbrier completed three major financings during and subsequent to the third fiscal quarter: a common share offering of 5.175 million shares, a $175 million 8 3/8% ten-year senior unsecured notes offering, and a $150 million five-year senior secured revolving credit facility. The recent completion of these financings significantly improves the Company's public stock float and liquidity, simplifies the corporate debt structure, and positions the Company for future growth.
-- During the quarter, the Company settled all matters with the Estate of Company co-founder Alan James. All of the Estate's claims and allegations against Greenbrier were dismissed. The overhang of the Estate's stock was also addressed through the repurchase of substantially all of the Estate's shares with the proceeds of a public equity offering. Approximately 16% of the Company's stock is now held by the co-founders or their estates.
-- During the quarter, the Company announced a $250 million leasing venture with Babcock & Brown, whereby the parties will jointly lease approximately 3,500 newly built railcars ordered for the North American market.
-- Subsequent to quarter end, the Company acquired from GE one railcar repair and refurbishment facility located in the Powder River Basin.
Financial Results:
The Greenbrier Companies
William A. Furman, president and chief executive officer, said, "During the past several months, we executed on a number of major initiatives. These initiatives have improved our public stock float, strengthened our balance sheet, enhanced corporate liquidity, and resolved all matters with the Estate of our former Chairman, Alan James. We are now fully focused on our core businesses and accretive growth opportunities."
Cash Flow, Liquidity, Deliveries:
Mark Rittenbaum, senior vice president and treasurer, said, "EBITDA for the quarter was $26.3 million, compared to $18.6 million in the third quarter of fiscal 2004. Financial performance was up in all of our major lines of business, and financial visibility extends well into 2006 as a result of our railcar and marine backlog. Margin expansion was realized in both manufacturing and leasing and services, as compared to the first half of the year. Now that our Mexican facility, Gunderson-Concarril, is under Greenbrier's control, we are realizing significant operating improvements, and contributions to EBITDA and profitability."
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 128,000 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 third quarter fiscal 2005 results. Teleconference details are as follows:
Thursday, June 30, 2005 8:00 a.m. Pacific Daylight 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)
May 31, August 31,
2005 2004
Assets
Cash and cash equivalents $67,288 $12,110
Restricted cash 499 1,085
Accounts and notes receivable 125,135 120,007
Inventories 179,458 113,122
Investment in direct finance leases 13,395 21,244
Equipment on operating leases 173,466 162,258
Property, plant and equipment 69,722 56,415
Other 25,930 22,512
$654,893 $508,753
Liabilities and Stockholders' Equity
Revolving notes $16,443 $8,947
Accounts payable and accrued
liabilities 194,194 178,550
Participation 21,447 37,107
Deferred revenue 3,882 2,550
Deferred income taxes 26,663 26,109
Notes payable 215,739 97,513
Subordinated debt 9,785 14,942
Subsidiary shares subject to
mandatory redemption 3,746 3,746
Stockholders' equity 162,994 139,289
$654,893 $508,753
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, May 31, May 31,
2005 2004 2005 2004
Revenue
Manufacturing $266,090 $207,136 $700,295 $473,164
Leasing & services 19,944 18,157 58,701 53,888
286,034 225,293 758,996 527,052
Cost of revenue
Manufacturing 241,491 189,275 642,149 432,857
Leasing & services 9,561 10,301 30,512 31,542
251,052 199,576 672,661 464,399
Margin 34,982 25,717 86,335 62,653
Other costs
Selling and administrative 15,276 12,352 41,392 33,336
Interest and foreign exchange 2,285 2,932 9,639 8,136
Special charges 2,913 -- 2,913 1,234
20,474 15,284 53,944 42,706
Earnings before income taxes
and equity in unconsolidated
subsidiaries 14,508 10,433 32,391 19,947
Income tax expense (5,881) (4,116) (12,833) (5,446)
Earnings before equity in
unconsolidated subsidiaries 8,627 6,317 19,558 14,501
Equity in earnings (loss) of
unconsolidated subsidiaries 417 58 (322) (1,734)
Net earnings $9,044 $6,375 $19,236 $12,767
Basic earnings per common share $0.60 $0.44 $1.29 $0.88
Diluted earnings per common
share $0.58 $0.42 $1.24 $0.84
Weighted average common shares:
Basic 15,020 14,628 14,957 14,500
Diluted 15,605 15,224 15,564 15,111
THE GREENBRIER COMPANIES, INC.
Consolidated Statements of Stockholders' Equity and Comprehensive Income
(Loss)
(In thousands, except per share amounts, unaudited)
Accum-
ulated
Addi- Other Total
tional Compreh- Stock-
Common Stock Paid-in Retained ensive holders'
Shares Amount Capital Earnings Loss Equity
Balance
September 1,
2004 14,884 $15 $57,165 $88,054 $(5,945) $139,289
Net earnings -- -- -- 19,236 -- 19,236
Translation
adjustment
(net of tax) -- -- -- -- 1,561 1,561
Reclassification
of derivative
financial
instruments
recognized
in net earnings
(net of tax ) -- -- -- -- (1,961) (1,961)
Unrealized gain
on derivative
financial
instruments
(net of tax) -- -- -- -- 3,965 3,965
Comprehensive
income 22,801
Net proceeds from
equity
offering 5,175 5 127,461 -- -- 127,466
Shares repurchased (5,342) (5) (127,533) (127,538)
Cash dividends
($0.18 per share) -- -- -- (2,692) -- (2,692)
Restricted stock
awards 5 -- (142) -- -- (142)
Stock options
exercised,
net of tax 200 -- 3,810 -- -- 3,810
Balance May 31,
2005 14,922 $15 $60,761 $104,598 $(2,380) $162,994
THE GREENBRIER COMPANIES, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands, unaudited)
Nine Months Ended
May 31, May 31,
2005 2004
Cash flows from operating activities
Net earnings $19,236 $12,767
Adjustments to reconcile net earnings
to net cash used in operating activities:
Deferred income taxes 679 2,046
Depreciation and amortization 16,840 15,529
Gain on sales of equipment (4,300) (236)
Special charges -- 1,234
Other 499 959
Decrease (increase) in assets:
Accounts and notes receivable (34,535) (26,751)
Inventories (19,589) 10,991
Other (8,628) 1,367
Increase (decrease) in liabilities:
Accounts payable and accrued
liabilities (5) 5,967
Participation (15,660) (19,170)
Deferred revenue 1,148 (38,198)
Net cash used in operating activities (44,315) (33,495)
Cash flows from investing activities
Principal payments received under direct
finance leases 4,524 7,348
Proceeds from sales of equipment 23,125 10,719
Investment in and advances to
unconsolidated joint ventures (49) (4,755)
Acquisition of joint venture interest 8,435 --
Decrease in restricted cash 624 4,089
Capital expenditures (49,478) (33,277)
Net cash used in investing activities (12,819) (15,876)
Cash flows from financing activities
Changes in revolving notes 6,541 2,150
Proceeds from notes payable 175,000 --
Repayments of notes payable (66,334) (16,504)
Repayment of subordinated debt (5,157) (4,955)
Dividends (2,692) --
Net proceeds from equity offering 127,466 --
Re-purchase of stock (127,538) --
Stock options exercised and restricted
stock awards 3,668 3,884
Purchase of subsidiary shares subject
to mandatory redemption -- (1,277)
Net cash provided by (used in)
financing activities 110,954 (16,702)
Effect of exchange rate changes 1,358 2,568
Increase (decrease) in cash and cash
equivalents 55,178 (63,505)
Cash and cash equivalents
Beginning of period 12,110 77,298
End of period $ 67,288 $13,793
THE GREENBRIER COMPANIES, INC.
Supplemental Disclosure
Reconciliation of Net Cash Provided by Operating Activities to EBITDA (1)
(In thousands, unaudited)
May 31, May 31, May 31, May 31,
2005 2004 2005 2004
Net cash (used in) provided
by operating activities $7,675 $34,935 $(44,315) $(33,495)
Changes in working capital 7,599 (19,670) 77,269 65,794
Deferred income taxes (1,266) (3,549) (679) (2,046)
Gain on sales of equipment 782 46 4,300 236
Special charges 2,913 -- 2,913 (1,234)
Other 401 (185) (499) (959)
Income tax expense 5,881 4,116 12,833 5,446
Interest and foreign
exchange 2,285 2,931 9,639 8,136
EBITDA from operations $26,270 $18,624 $61,461 $41,878
(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 The Greenbrier Companies, +1-503-684-7000
Web site: http://www.gbrx.com/