Exhibit 99.1
For release:November 2, 2005, 6:00 am EST | Contact: | Mark Rittenbaum | ||
503-684-7000 |
Greenbrier reports record results for fiscal 2005: EPS is $1.92 on revenues of over $1 billion; fourth quarter EPS is $.68 on revenues of $265 million
Lake Oswego, Oregon, November 2, 2005 —The Greenbrier Companies [NYSE:GBX] today reported results for its fiscal fourth quarter and fiscal year ended August 31, 2005.
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 to 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)
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,
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,
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 |
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THE GREENBRIER COMPANIES, INC.
Condensed Consolidated Statements of Cash Flows
Years ended August 31,
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 | ||||||
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THE GREENBRIER COMPANIES, INC.
Supplemental Disclosure
Reconciliation of Net Cash Provided by (used in) Operating Activities to EBITDA
(In thousands, unaudited)
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.
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Supplemental Information
Quarterly Results of Operations (Unaudited)
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 |
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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 earnings per common share: | ||||||||||||||||||||
Continuing operations | $ | .28 | $ | .15 | $ | .42 | $ | .47 | $ | 1.32 | ||||||||||
Net earnings | $ | .28 | $ | .15 | $ | .42 | $ | .52 | $ | 1.37 |