The Greenbrier Companies
Highlights
Financial Performance:
For its fiscal fourth quarter, the Company reported:
-- Net earnings were $10.6 million, or $.68 per diluted share - up 33%
from the $8.0 million, or $.52 per diluted share in the fourth quarter
of fiscal 2004.
-- Revenues grew by 31% to $265 million, compared with $202 million in the
fourth quarter of fiscal 2004.
-- New railcar deliveries were 3,300 units, compared with 3,000 units in
the prior year's fourth quarter.
For the full fiscal 2005, the Company reported:
-- Net earnings were a record $29.8 million, or $1.92 per diluted share,
up 43% from $20.8 million or $1.37 per diluted share in fiscal 2004.
-- Revenues grew to a record $1 billion, up 40% from $729 million in
fiscal 2004.
-- New railcar deliveries were a record 13,200 units, compared with
10,800 units in fiscal 2004.
-- New railcar manufacturing backlog in North America and Europe was
9,600 units valued at $550 million on August 31, 2005, compared with
13,100 units at $760 million at August 31, 2004, and 10,700 units at
$580 million at August 31, 2003.
-- The Company increased the payment of its quarterly dividend to $.08 per
share during the year.
-- EBITDA for fiscal 2005 was $88 million, compared to $62 million in
2004.
Strategic Accomplishments:
-- During 2005, the Company increased the public float in its stock and
simplified its capital structure. This objective was achieved through
a secondary stock offering, issuance of $175 million of senior
unsecured notes, and a new $150 million revolving credit facility.
-- Greenbrier acquired the remaining 50% interest in its joint venture to
build freight cars in Sahagun Mexico and took over day-to-day
management of the operations. The financial performance of this
operation has improved dramatically under Greenbrier's control.
-- The Company expanded global supply chain initiatives through a
strategic alliance with Zhuzhou Rolling Stock Works (ZRSW), part of
China South Rail, the largest freight car manufacturer in China.
Through ZRSW and other global suppliers, the Company continues to drive
down its manufacturing costs, increase throughput, and identify
commercial collaboration opportunities in China and elsewhere.
-- Greenbrier entered into an agreement with Babcock & Brown Rail
Management LLC ("BBRM") to jointly acquire and lease railcars for the
North American market. To date, nearly 4,000 railcars have been
ordered. We, along with BBRM, currently intend to sell the railcars to
investors through an investment vehicle, maintain a minority interest
in the investment, and manage the railcars for these investors.
Enhanced Corporate Governance:
-- The Company met its goal of having a majority of independent Board
members well before the statutory requirement of December 31, 2005.
Ambassador Charles Swindells was added to the Board as an independent
director. Five of the eight Board members are independent under the
definition of the New York Stock Exchange.
Fourth-quarter and fiscal 2005 results were driven by higher production rates, the acquisition of the remaining 50% interest in the Company's Mexican manufacturing operations, coupled with higher lease fleet utilization and margins.
William A. Furman, president and chief executive officer, said, "Fiscal 2005 was a very successful year for the Company, marked by numerous financial, strategic and corporate governance accomplishments. Our backlog coupled with railroad industry fundamentals provides good financial visibility for 2006 and into 2007."
Furman added, "Our strong balance sheet and liquidity position continue to position the Company to capitalize on future opportunities for growth, both organically and through acquisitions."
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 17 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 129,000 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 fourth quarter and fiscal year end results. Teleconference details are as follows:
Wednesday, November 2, 2005
8:00 am Pacific Standard Time
Phone #: 630-395-0143, Password: "Greenbrier"
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)
Assets 2005 2004
Cash and cash equivalents $73,204 $12,110
Restricted cash 93 1,085
Accounts and notes receivable 122,957 120,007
Inventories 121,698 92,969
Railcars held for sale 59,421 20,153
Investment in direct finance leases 9,974 21,244
Equipment on operating leases 183,155 162,258
Property, plant and equipment 73,203 56,415
Other 27,502 22,512
$671,207 $508,753
Liabilities and Stockholders' Equity
Revolving notes $12,453 $8,947
Accounts payable and accrued liabilities 195,258 178,550
Participation 21,900 37,107
Deferred income tax 31,629 26,109
Deferred revenue 6,910 2,550
Notes payable 214,635 97,513
Subordinated debt 8,617 14,942
Subsidiary shares subject to mandatory redemption 3,746 3,746
Stockholders' equity 176,059 139,289
$671,207 $508,753
THE GREENBRIER COMPANIES, INC.
Consolidated Statements of Operations
Years ended August 31,
(In thousands, except per share amounts) 2005 2004 2003
Revenue
Manufacturing $941,161 $653,234 $461,882
Leasing & services 83,061 76,217 70,443
1,024,222 729,451 532,325
Cost of revenue
Manufacturing 857,950 595,026 424,378
Leasing & services 41,099 42,241 43,609
899,049 637,267 467,987
Margin 125,173 92,184 64,338
Other costs
Selling and administrative expense 57,425 48,288 39,962
Interest and foreign exchange 14,835 11,468 13,618
Special charges 2,913 1,234 --
75,173 60,990 53,580
Earnings before income tax and equity
in unconsolidated subsidiaries 50,000 31,194 10,758
Income tax expense (19,911) (9,119) (4,543)
Earnings before equity in unconsolidated
subsidiaries 30,089 22,075 6,215
Equity in loss of
unconsolidated subsidiaries (267) (2,036) (1,898)
Earnings from continuing operations 29,822 20,039 4,317
Earnings from
discontinued operations (net of tax) -- 739 --
Net earnings $29,822 $20,778 $4,317
Basic earnings per common share:
Continuing operations $1.99 $1.38 $ 0.31
Discontinued operations -- 0.05 --
$1.99 $1.43 $0.31
Diluted earnings per common share:
Continuing operations $1.92 $1.32 $0.30
Discontinued operations -- 0.05 --
$1.92 $1.37 $0.30
Weighted average common shares:
Basic 15,000 14,569 14,138
Diluted 15,560 15,199 14,325
THE GREENBRIER COMPANIES, INC.
Condensed Consolidated Statements of Cash Flows
Years ended August 31,
(In thousands) 2005 2004 2003
Cash flows from operating activities:
Net earnings $29,822 $20,778 $4,317
Adjustments to reconcile net earnings
to net cash provided by
(used in) operating activities:
Earnings from discontinued operations -- (739) --
Deferred income taxes 5,807 9,646 2,620
Tax benefit of stock options exercised 2,393 -- --
Depreciation and amortization 22,939 20,840 18,711
Gain on sales of equipment (6,797) (629) (454)
Special charges -- 1,234 --
Other 651 1,332 661
Decrease (increase) in assets:
Accounts and notes receivable (32,328) (37,786) (24,786)
Inventories 15,403 (22,355) (10,275)
Railcars held for sale (38,495) 14,097 3,377
Other (10,415) 2,940 1,148
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities 3 30,956 30,843
Participation (15,207) (18,794) (5,094)
Deferred revenue 4,285 (37,495) 6,371
Net cash provided by
(used in) operating activities (21,939) (15,975) 27,439
Cash flows from investing activities:
Principal payments received
under direct finance leases 5,733 9,461 14,294
Proceeds from sales of equipment 32,528 16,217 23,954
Investment in and advances
to unconsolidated subsidiaries 92 (2,240) (3,126)
Acquisition of joint venture interest 8,435 -- --
Decrease (increase) in restricted cash 1,007 4,757 (5,300)
Capital expenditures (69,123) (42,959) (11,895)
Net cash provided by
(used in) investing activities (21,328) (14,764) 17,927
Cash flows from financing activities:
Changes in revolving notes 2,514 (14,030) (5,754)
Proceeds from notes payable 175,000 -- 6,348
Repayments of notes payable (67,691) (21,539) (34,058)
Repayment of subordinated debt (6,325) (5,979) (6,148)
Dividends (3,889) (889) --
Net proceeds from equity offering 127,462 -- --
Repurchase and retirement of stock (127,538) -- --
Stock options exercised
and restricted stock awards 3,286 6,093 1,797
Purchase subsidiary's shares
subject to mandatory redemption -- (1,277) --
Net cash provided by (used in)
financing activities 102,819 (37,621) (37,815)
Effect of exchange rate changes 1,542 3,172 2,151
Increase (decrease) in cash
and cash equivalents 61,094 (65,188) 9,702
Cash and cash equivalents
Beginning of period 12,110 77,298 67,596
End of period $73,204 $12,110 $77,298
THE GREENBRIER COMPANIES, INC.
Supplemental Disclosure
Reconciliation of Net Cash Provided by (used in) Operating Activities to
EBITDA
(In thousands, unaudited)
August 31,
2005 2004 2003
Net cash (used in)
provided by operating activities $(21,939) $(15,975) $27,439
Earnings from discontinued operations -- 739 --
Changes in working capital 76,754 68,437 (1,584)
Special charges -- (1,234) --
Deferred income taxes (5,807) (9,646) (2,620)
Tax benefit of stock options exercised (2,393) -- --
Gain on sales of equipment 6,797 629 454
Other (651) (1,332) (661)
Income tax expense 19,911 9,119 4,543
Interest and foreign currency 14,835 11,468 13,618
EBITDA from continuing operations $ 87,507 $ 62,205 $41,189
(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.
Supplemental Information
Quarterly Results of Operations (Unaudited)
Operating results by quarter for 2005 are as follows:
(In thousands, except per share amounts)
First Second Third Fourth Total
2005
Revenue
Manufacturing $200,397 $233,808 $266,090 $240,866 $941,161
Leasing & services 17,651 21,105 19,944 24,361 83,061
218,048 254,913 286,034 265,227 1,024,222
Cost of revenue
Manufacturing 182,862 217,796 241,491 215,801 857,950
Leasing & services 10,380 10,570 9,561 10,588 41,099
193,242 228,366 251,052 226,389 899,049
Margin 24,806 26,547 34,982 38,838 125,173
Other costs
Selling and
administrative expense 12,072 14,044 15,276 16,033 57,425
Interest and
foreign exchange 3,059 4,295 2,285 5,196 14,835
Special charges -- -- 2,913 -- 2,913
15,131 18,339 20,474 21,229 75,173
Earnings before income
tax and equity
in unconsolidated
subsidiaries 9,675 8,208 14,508 17,609 50,000
Income tax
benefit (expense) (3,554) (3,397) (5,881) (7,079) (19,911)
Equity in (loss)
earnings of unconsolidated
subsidiaries (731) (9) 417 56 (267)
Net earnings $5,390 $4,802 $9,044 $10,586 $ 29,822
Basic earnings
per common share $.36 $.32 $ .60 $ .71 $1.99
Diluted earnings
per common share $.35 $.31 $ .58 $ .68 $1.92
Quarterly Results of Operations (Unaudited)
Operating results by quarter for 2004 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
12,661 14,762 15,284 18,283 60,990
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 earningsper common share:
Continuing operations $.28 $.15 $.42 $.47 $1.32
Net earnings $.28 $.15 $.42 $.52 $1.37
SOURCE: The Greenbrier Companies
CONTACT: Mark Rittenbaum of The Greenbrier Companies, +1-503-684-7000
Web site: http://www.gbrx.com/