LAKE OSWEGO, Ore., Jan. 8 /PRNewswire-FirstCall/ -- The Greenbrier
Companies (NYSE:GBX) today reported results for its fiscal first
quarter ended November 30, 2009. Financial Highlights First
Quarter: -- Revenues for the first quarter of 2010 were $172
million, down from $256 million in the prior year's first quarter.
-- The Company's net loss for the quarter was $3.2 million, or
$0.19 per diluted share, compared to a net loss of $3.9 million, or
$.23 per diluted share, in the prior year's first quarter. (1) --
Net loss for the quarter includes noncash charges of $1.2 million,
net of tax, or $.07 per diluted share for warrant amortization
expense and amortization of convertible debt discount. Net loss for
the prior year's first quarter includes a noncash charge of $.6
million, net of tax, or $.03 per diluted share for amortization of
convertible debt discount. -- EBITDA for the quarter was $14.8
million, or 8.6% of revenues, compared to $12.5 million, or 4.9% of
revenues in the first quarter of 2009. Liquidity: -- The Company
ended the quarter with approximately $65 million of cash and $107
million of committed additional borrowing capacity. Deliveries and
Backlog: -- New railcar deliveries in the first quarter of 2010
were approximately 350 units, compared to 800 units in the first
quarter of 2009. -- The Company modified its multi-year new railcar
manufacturing agreement with General Electric Railcar Services
Corporation subsequent to quarter end. -- Greenbrier's new railcar
manufacturing backlog as of November 30, 2009, inclusive of the GE
contract modification, was approximately 4,900 units with an
estimated value of $430 million, compared to 15,900 units valued at
approximately $1.39 billion as of November 30, 2008. -- Marine
backlog was $96 million as of November 30, 2009, compared to $190
million as of November 30, 2008. First Quarter Results Revenues for
the first quarter of 2010 were $171.7 million, down from $256.1
million in the prior year's first quarter. Gross margin for the
quarter was 12.6% of revenues compared to 7.0% of revenues in the
prior comparable period. EBITDA was $14.8 million, or 8.6% of
revenues for the quarter, compared to $12.5 million, or 4.9% of
revenues in the prior year's first quarter. The Company's net loss
was $3.2 million, or $0.19 per diluted share, for the quarter,
compared to a net loss of $3.9 million, or $.23 per diluted share
for the same period in 2009. Net loss for the quarter includes
noncash charges of $1.2 million, net of tax, or $0.07 per diluted
share for warrant amortization expense and amortization of
convertible debt discount. Net loss for the prior year's first
quarter includes a noncash charge of $.6 million, net of tax, or
$.03 per diluted share for amortization of convertible debt
discount. Discussion of Quarterly Results William A. Furman,
president and chief executive officer, said, "Our results continue
to reflect depressed demand as a result of the weak economic
environment. We remain focused on cost containment and operational
efficiency, and managing the Company for cash flow and liquidity in
this environment. While recent indicators suggest that a recovery
may be emerging in certain sectors of the economy, North American
rail loadings remain soft and a significant portion of the entire
North American railcar fleet remains idle. However, we are starting
to see signs that certain of our markets are beginning to stabilize
and slightly improve." Furman continued, "We have made significant
progress against key objectives we previously outlined for fiscal
2010. Our first objective was to arrive at a satisfactory
resolution regarding the GE contract, and we have accomplished this
objective. Our second objective was to continue to improve the
operational efficiency of our facilities while maintaining the
flexibility to respond to market demand, when the new cycle begins.
Third, we continued to manage for cash flow and liquidity while
aiming to further improve our balance sheet. Fourth, we have sought
to improve our integrated business model. I am pleased that we have
made headway on each of these objectives." Furman concluded, "In
the near term, we expect business to remain challenging,
particularly for our manufacturing segment. Similar to previous
years, we anticipate financial results for the second half of 2010
will be stronger than the first half, and that the second quarter
will be our weakest quarter. Over the longer-term, we remain
optimistic about our markets as fundamentals continue to support
rail and marine transportation. As a result of the strategic
measures taken over the last several years, we believe that
Greenbrier is uniquely well-positioned to capitalize on market
opportunities." Segment Details The Refurbishment & Parts
segment, consisting of a network of 38 locations, repairs and
refurbishes railcars, and provides wheel services and railcar parts
across North America. Revenue for this segment in the current
quarter was $93.0 million, compared to $132.3 million in the first
quarter of 2009. Revenue declines were primarily due to lower sales
volumes across all product and service types and a further decline
in the price for scrap metal, both due to the current economic
environment. Gross margin for the refurbishment & parts segment
was 10.4% of revenues, compared to 9.8% of revenues in the prior
comparable period. The increase was primarily the result of cost
reduction efforts. The Manufacturing segment consists of marine and
new railcar production in Europe and North America. Manufacturing
segment revenue for the first quarter was $60.1 million, compared
to $102.7 million in the first quarter of 2009. Current quarter new
railcar deliveries of 350 units were down from 800 units in the
prior comparable period. Manufacturing gross margin for the first
quarter was 7.0% of revenues, compared to negative 4.1% in the
first quarter of 2009. The gross margin increase was primarily the
result of a more favorable railcar and marine product mix and
improved production efficiencies, partially offset by less
efficient absorption of overhead due to operating at lower levels
of production and plant utilization. In addition, the prior period
included loss contingencies on certain production of $0.5 million.
The Leasing & Services segment includes results from the
Company-owned lease fleet of approximately 9,000 railcars and from
fleet management services provided for approximately 223,000
railcars. Revenue for this segment was $18.6 million, compared to
$21.1 million in the same quarter last year. Leasing & Services
gross margin for the quarter was 41.4% of revenue, compared to
43.6% of revenue in the same quarter last year. The decrease from
the prior year's first quarter was primarily a result of lower
lease fleet utilization and lower earnings on certain car hire
utilization leases. This was partially offset by gains on sales
from the lease fleet which have no associated cost of revenue.
Lease fleet utilization as of the end of the quarter was up
sequentially to 91.3%, compared to 88.3% at August 31, 2009 and
93.3% at November 30, 2008. Gains on sales of leased equipment were
$.9 million for the quarter, compared to $.3 million for the first
quarter of 2009. Selling and administrative costs were $16.2
million for the quarter, or 9.4% of revenues, versus $16.0 million
or 6.2% of revenues for the same quarter last year. Excluding
reversals of certain reserves of $.2 million in the current year
and $1.0 million in the prior year, selling and administrative
expense was lower in the current period. The decrease was
principally due to lower employee related costs and the effects of
cost reduction efforts. Interest and foreign exchange expense was
$11.1 million for the quarter, compared to $11.8 million for the
same period in 2009. The decrease was a result of declines in
interest rates, lower outstanding borrowings and a lower foreign
exchange loss. The prior period included a $1.2 million foreign
exchange loss that was recorded in association with foreign
currency forward exchange contracts that did not qualify for hedge
accounting treatment. These decreases were partially offset by
higher noncash charges in the current period for warrant
amortization expense and the amortization of the convertible debt
discount. Business Outlook Based on current industry trends,
including depressed levels of railroad traffic, increased railcar
velocity and high levels of railcar storage, Greenbrier expects
business to remain challenging in fiscal 2010, especially for the
Company's Manufacturing segment. Overall, management anticipates
that revenues will be lower in 2010 compared to 2009. EBITDA
excluding special charges, however, is expected to be modestly
higher in 2010 compared to 2009, due in part to higher expected
gross margins in Greenbrier's Manufacturing segment. Similar to
previous years, financial results for the second half of the year
are anticipated to be stronger than the first half, with the second
quarter expected to be the weakest. While the outlook remains
cautious in the near term, the Company continues to be optimistic
about the long-term fundamentals that support rail and marine
transportation. The Company believes it has adequate liquidity to
weather the economic downturn, with favorable debt covenants, no
significant term debt maturing until 2012, and much of its term
debt maturing in 2015. Conference Call The Greenbrier Companies
will host a teleconference to discuss first quarter results.
Teleconference details are as follows: -- Friday, January 8, 2010
-- 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 website for 30 days. Telephone replay will be available
through January 23, 2010 at 203-369-3428. About Greenbrier
Companies Greenbrier (http://www.gbrx.com/), headquartered in Lake
Oswego, Oregon, is a leading supplier of transportation equipment
and services to the railroad industry. The Company builds new
railroad freight cars in its three manufacturing facilities in the
U.S. and Mexico and marine barges at its U.S. facility. It also
repairs and refurbishes freight cars and provides wheels and
railcar parts at 38 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 9,000 railcars, and performs management services for
approximately 223,000 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,
turmoil in the credit markets and financial services industry; high
levels of indebtedness and compliance with the terms of our
indebtedness; write-downs of goodwill in future periods; sufficient
availability of borrowing capacity; fluctuations in demand for
newly manufactured railcars or failure to obtain orders as
anticipated in developing forecasts; loss of one or more
significant customers; customer payment defaults or related issues;
actual future costs and the availability of materials and a trained
workforce; failure to design or manufacture new products or
technologies or to achieve certification or market acceptance of
new products or technologies; steel price fluctuations and scrap
surcharges; changes in product mix and the mix between segments;
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 and risks related to car hire and
residual values; difficulties associated with governmental
regulation, including environmental liabilities; integration of
current or future acquisitions; succession planning; all as may be
discussed in more detail under the headings "Risk Factors" on page
12 of Part I , Item 1a and "Forward Looking Statements" on page 3
of our Annual Report on Form 10-K for the fiscal year ended August
31, 2009. 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. EBITDA is not a financial measure under
GAAP. We define EBITDA as earnings from continuing operations
before special charges, 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. (1) Net loss is now referred to
in the Consolidated Statement of Operations, in accordance with
GAAP, as "Net loss attributable to controlling interest". THE
GREENBRIER COMPANIES, INC. Condensed Consolidated Balance Sheets
(In thousands, unaudited) November 30, August 31, Assets 2009
2009(1) ---- ------ Cash and cash equivalents $65,393 $76,187
Restricted cash 3,400 1,083 Accounts receivable 98,455 113,371
Inventories 155,060 142,824 Assets held for sale 34,951 31,711
Equipment on operating leases 316,079 313,183 Investment in direct
finance leases 7,826 7,990 Property, plant and equipment 126,997
127,974 Goodwill 137,066 137,066 Intangibles and other assets
94,293 96,902 ------ ------ $1,039,520 $1,048,291 ==========
========== Liabilities and Stockholders' Equity Revolving notes
$12,807 $16,041 Accounts payable and accrued liabilities 168,675
170,889 Losses in excess of investment in de- consolidated
subsidiary 15,313 15,313 Deferred income taxes 67,973 69,199
Deferred revenue 17,312 19,250 Notes payable 527,837 525,149
Stockholders' equity controlling interest 222,205 223,726 Non
controlling interest 7,398 8,724 ----- ----- Total stockholders'
equity 229,603 232,450 ------- ------- $1,039,520 $1,048,291
========== ========== (1) As adjusted for the effects of Accounting
Standards Codification (ASC) 470 - 20 Debt - Debt with Conversion
and other Options with respect to the Company's $100 million of
outstanding convertible debt. This guidance was effective for the
Company on September 1, 2009 and requires retrospective
application. THE GREENBRIER COMPANIES, INC. Condensed Consolidated
Statements of Operations (In thousands, except per share amounts,
unaudited) Three Months Ended November 30, ------------ 2009
2008(1) ---- ------ Revenue Manufacturing $60,078 $102,717
Refurbishment & Parts 92,983 132,279 Leasing & Services
18,632 21,133 ------ ------ 171,693 256,129 Cost of revenue
Manufacturing 55,847 106,923 Refurbishment & Parts 83,286
119,326 Leasing & Services 10,918 11,929 ------ ------ 150,051
238,178 Margin 21,642 17,951 Other costs Selling and administrative
16,208 15,980 Interest and foreign exchange 11,112 11,771 ------
------ 27,320 27,751 Loss before income taxes, noncontrolling
interest and equity in unconsolidated subsidiary (5,678) (9,800)
Income tax benefit 2,500 4,906 ----- ----- Loss before
noncontrolling interest and equity in unconsolidated subsidiary
(3,178) (4,894) Equity in earnings (loss) of unconsolidated
subsidiary (183) 434 ---- --- Net loss (3,361) (4,460) Less: Net
loss attributable to noncontrolling interest 117 568 --- --- Net
loss attributable to controlling interest $(3,244) $(3,892) =======
======= Basic loss per common share: $(0.19) $(0.23) Diluted loss
per common share: $(0.19) $(0.23) Weighted average common shares:
Basic 17,087 16,629 Diluted 17,087 16,629 (1) As adjusted for the
effects of ASC 470 - 20 Debt - Debt with Conversion and other
Options with respect to the Company's $100 million of outstanding
convertible debt. This guidance was effective for the Company on
September 1, 2009 and requires retrospective application. THE
GREENBRIER COMPANIES, INC. Condensed Consolidated Statements of
Cash Flows (In thousands, unaudited) Three Months Ended November
30, ------------ 2009 2008(1) ---- ------ Cash flows from operating
activities: Net loss $(3,361) $(4,460) Adjustments to reconcile net
loss to net cash provided by (used in) operating activities:
Deferred income taxes (1,227) 2,160 Depreciation and amortization
9,392 9,556 Gain on sales of equipment (851) (289) Accretion of
debt discount 2,116 925 Other 257 198 Decrease (increase) in
assets: Accounts receivable 16,088 18,845 Inventories (11,565)
(15,260) Assets held for sale (3,218) (10,883) Other 2,451 469
Increase (decrease) in liabilities: Accounts payable and accrued
liabilities (3,156) (25,347) Deferred revenue (1,829) 1,712 ------
----- Net cash provided by (used in) operating activities 5,097
(22,374) ----- ------- Cash flows from investing activities:
Principal payments received under direct finance leases 115 105
Proceeds from sales of equipment 2,667 306 Investment in
unconsolidated subsidiary (450) - Decrease (increase) in restricted
cash (2,317) 433 Capital expenditures (11,939) (8,473) -------
------ Net cash used in investing activities (11,924) (7,629)
------- ------ Cash flows from financing activities: Changes in
revolving notes (3,896) 51,062 Net proceeds from issuance of note
payable 1,712 - Repayments of notes payable (1,247) (4,189)
Investment by joint venture partner - 1,400 Other - 1,152 --- -----
Net cash provided by (used in) financing activities (3,431) 49,425
------ ------ Effect of exchange rate changes (536) (6,614)
Increase (decrease) in cash and cash equivalents (10,794) 12,808
Cash and cash equivalents Beginning of period 76,187 5,957 ------
----- End of period $65,393 $18,765 ======= ======= 1. As adjusted
for the effects of ASC 470 - 20 Debt - Debt with Conversion and
other Options with respect to the Company's $100 million of
outstanding convertible debt. This guidance was effective for the
Company on September 1, 2009 and requires retrospective
application. THE GREENBRIER COMPANIES, INC. Supplemental Disclosure
Reconciliation of Net Cash Provided by (Used in) Operating
Activities to EBITDA(1) (In thousands, unaudited) Three Months
Ended November 30, 2009 2008 ---- ---- Net cash provided by (used
in) $5,097 $(22,374) operating activities Changes in working
capital 1,229 30,464 Deferred income taxes 1,227 (2,160) Accretion
of debt discount (2,116) (925) Non-controlling interest 117 568
Gain on sales of equipment 851 289 Other (257) (198) Income tax
benefit (2,500) (4,906) Interest and foreign exchange 11,112 11,771
------ ------ $14,760 $12,529 Adjusted EBITDA from operations
======= ======= 1. "EBITDA" (earnings from continuing operations
before special charges, interest and foreign exchange, 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. DATASOURCE: The Greenbrier Companies CONTACT: Mark
Rittenbaum of The Greenbrier Companies, +1-503-684-7000 Web Site:
http://www.gbrx.com/
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