Exhibit 99.1
For release:November 10, 2004, 6:00 am EST | Contact:Mark Rittenbaum |
Greenbrier reports annual revenues of a record $729 million, E.P.S. of $.52 for fourth fiscal quarter and $1.37 for fiscal 2004, maintains quarterly dividend of $.06 per share
Lake Oswego, Oregon, November 10, 2004 –The Greenbrier Companies [NYSE:GBX] today reported results for its fiscal fourth quarter and fiscal year ended August 31, 2004.
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 am 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.