-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, H2SM8ancfvlqx49hFuRqkC/ZodlPNhWhRnfdVng9ABMKBxzGwInybBO1fykvE+oX L+8o4TkfgFdEQ++DpuOnjw== 0000923120-97-000003.txt : 19970115 0000923120-97-000003.hdr.sgml : 19970115 ACCESSION NUMBER: 0000923120-97-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961130 FILED AS OF DATE: 19970114 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GREENBRIER COMPANIES INC CENTRAL INDEX KEY: 0000923120 STANDARD INDUSTRIAL CLASSIFICATION: RAILROAD EQUIPMENT [3743] IRS NUMBER: 930816972 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-13146 FILM NUMBER: 97505483 BUSINESS ADDRESS: STREET 1: ONE CENTERPOINT DR STREET 2: STE 200 CITY: LAKE OSWEGO STATE: OR ZIP: 97035 BUSINESS PHONE: 5036847000 MAIL ADDRESS: STREET 1: ONE CENTERPOINTE DR STREET 2: STE 200 CITY: LAKE OSWEGO STATE: OR ZIP: 97035 10-Q 1 THE GREENBRIER COMPANIES, INC. FORM 10-Q 5/31/96 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended November 30, 1996 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from ______ to ______ Commission File No. 1-13146 THE GREENBRIER COMPANIES, INC. (Exact name of registrant as specified in its charter) Delaware 93-0816972 (State of Incorporation)(I.R.S. Employer Identification No.) One Centerpointe Drive, Suite 200, Lake Oswego, OR 97035 (Address of principal executive offices) (Zip Code) (503)684-7000 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No The number of shares of the registrant's common stock, $0.001 par value per share, outstanding on December 31, 1996 was 14,160,000 shares. THE GREENBRIER COMPANIES, INC. PART I. FINANCIAL INFORMATION Item 1. Financial Statements CONSOLIDATED BALANCE SHEETS (In thousands, except per share amounts, unaudited) November 30, August 31, 1996 1996 Assets Manufacturing Current assets: Cash and cash equivalents $ 7,118 $ 2,303 Accounts receivable 17,448 63,009 Inventories 69,355 75,989 Prepaid expenses 1,752 1,512 -------- -------- 95,673 142,813 Property, plant and equipment 36,490 35,893 Other 4,070 3,720 -------- -------- 136,233 182,426 Leasing and services Cash and cash equivalents 7,302 3,780 Restricted cash and investments 6,773 6,400 Accounts and notes receivable 22,111 20,353 Railcars held for refurbishment or sale 18,963 14,459 Investment in direct finance leases 194,612 190,307 Equipment on operating leases 177,989 174,394 Prepaid expenses and other 26,271 23,369 -------- -------- 454,021 433,062 -------- -------- $590,254 $615,488 ======== ======== Liabilities and Stockholders' Equity Manufacturing Current liabilities: Revolving notes $ - $ 13,314 Accounts payable and accrued liabilities 46,545 49,924 Current portion of notes payable 954 1,053 -------- -------- 47,499 64,291 Notes payable 12,886 13,014 -------- -------- 60,385 77,305 Leasing And Services Revolving notes 7,309 14,500 Accounts payable and accrued liabilities 63,480 68,209 Deferred revenue 4,560 4,377 Deferred participation 34,363 32,316 Deferred income taxes 23,046 22,126 Notes payable 198,575 202,211 -------- -------- 331,333 343,739 Subordinated debt 46,246 44,554 Minority interest 38,325 38,154 Commitments and contingencies (Note 3) Stockholders' equity Preferred stock - $0.001 par value, 25,000 shares authorized, none issued - - Common stock - $0.001 par value, 50,000 shares authorized, 14,160 outstanding 14 14 Additional paid-in capital 49,094 49,079 Retained earnings 64,330 62,259 Foreign currency translation adjustment 527 384 -------- -------- 113,965 111,736 -------- -------- $590,254 $615,488 ======== ======== The accompanying notes are an integral part of these statements. THE GREENBRIER COMPANIES, INC. CONSOLIDATED STATEMENTS OF EARNINGS (In thousands, except per share amounts, unaudited) Three Months Ended November 30, 1996 1995 Revenues Manufacturing $101,879 $ 95,109 Leasing and services 39,016 21,656 -------- -------- Total revenues 140,895 116,765 Costs and expenses Cost of manufacturing sales 94,121 86,070 Leasing and services 23,679 10,050 Selling and administrative expense: Manufacturing 3,787 3,176 Leasing and services 5,415 3,201 Corporate 1,627 1,554 -------- -------- 10,829 7,931 Interest expense: Manufacturing 582 958 Leasing and services 5,875 5,363 -------- -------- 6,457 6,321 Minority interest: Manufacturing 499 (606) Leasing and services 627 743 -------- -------- 1,126 137 -------- -------- Total costs and expenses 136,212 110,509 Earnings before income tax expense Manufacturing 2,890 5,511 Leasing and services 3,420 2,299 Corporate (1,627) (1,554) -------- -------- 4,683 6,256 Income tax expense (1,763) (2,893) -------- -------- Net earnings $ 2,920 $ 3,363 ======== ======== Net earnings per share $ 0.21 $ 0.24 ======== ======== Weighted average shares outstanding 14,160 14,160 ======== ======== Dividends declared per share $ 0.06 $ 0.06 ======== ======== The accompanying notes are an integral part of these statements. THE GREENBRIER COMPANIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands, unaudited) Three Months Ended November 30, 1996 1995 Cash flows from operating activities Net earnings $ 2,920 $ 3,363 Adjustments to reconcile net earnings to net cash provided by operating activities: Deferred income taxes 920 (214) Deferred participation 2,047 1,625 Depreciation and amortization 6,903 5,957 Gain on sales of equipment (586) (458) Other 277 (483) Decrease (increase) in assets: Accounts and notes receivable 43,803 (18,983) Inventories 6,634 (3,004) Prepaid expenses and other (4,002) 368 Increase (decrease) in liabilities: Accounts payable and accrued liabilities (8,108) 13,897 Deferred revenue 183 (1,122) -------- -------- Net cash provided by operating activities 50,991 946 Cash flows from investing activities Principal payments received under direct finance leases 2,796 2,304 Investment in direct finance leases (6,227) (4,795) Proceeds from sales of equipment 3,703 15,549 Purchase of property and equipment (15,699) (33,635) Investment in restricted cash and investments (373) (286) -------- -------- Net cash used in investing activities (15,800) (20,863) Cash flows from financing activities Proceeds from borrowings 609 19,911 Repayments of borrowings (26,613) (5,563) Dividends (850) (850) -------- -------- Net cash provided by (used in) financing activities (26,854) 13,498 -------- -------- Increase (decrease) in cash and cash equivalents 8,337 (6,419) Cash and cash equivalents Beginning of period 6,083 10,350 -------- -------- End of period $ 14,420 $ 3,931 ======== ======== Supplemental disclosures of cash flow information Cash paid during the period for: Interest $ 6,420 $ 6,830 Income taxes 26 1,039 Supplemental schedule of noncash investing and financing activities Equipment obtained through borrowings $ 3,327 $ 1,303 Repayment of borrowings through return of railcars held for refurbishment or sale - 1,534 The accompanying notes are an integral part of these statements. THE GREENBRIER COMPANIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, unaudited) Note 1 - INTERIM FINANCIAL STATEMENTS The consolidated financial statements of The Greenbrier Companies, Inc. and Subsidiaries ("Greenbrier" or the "company") as of November 30, 1996 and for the three months ended November 30, 1996 and 1995, have been prepared without audit and reflect all adjustments (consisting of normal recurring accruals) which in the opinion of management are necessary for a fair presentation of the financial position and operating results for the periods indicated. The results of operations for the three months ended November 30, 1996 are not necessarily indicative of the results to be expected for the entire year ending August 31, 1997. Certain notes and other information have been condensed or omitted from the interim financial statements presented in this Quarterly Report on Form 10-Q. Therefore, these financial statements should be read in conjunction with the consolidated financial statements contained in Greenbrier's 1996 Annual Report incorporated by reference into the company's 1996 Annual Report on Form 10-K. Note 2 - INVENTORIES November 30, August 31, 1996 1996 Manufacturing supplies and raw materials $ 6,654 $ 5,856 Work-in-process 52,852 60,474 Assets held for sale 9,849 9,659 -------- -------- $ 69,355 $ 75,989 ======== ======== Note 3 - COMMITMENTS AND CONTINGENCIES Purchase commitments of approximately $6,200 for leasing and services operating equipment were outstanding as of November 30, 1996. Subsequent to November 30, 1996, a minority investor's interest in a consolidated subsidiary was acquired for $16 million, utilizing operating cash flow and available lines of credit. THE GREENBRIER COMPANIES, INC. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The Greenbrier Companies, Inc. and Subsidiaries ("Greenbrier") currently operates in two primary business segments: the manufacture of railcars and marine vessels and the refurbishment of railcars; and the leasing and management of surface transportation equipment and related services, including third- party transportation logistics. The two business segments are operationally integrated. The manufacturing operations produce double-stack intermodal railcars, conventional railcars and marine vessels and perform refurbishment and maintenance activities, a portion of which is for railcar leasing operations. The leasing and services operation undertakes most of the sales and marketing activities for the manufacturing operations. New product development is also conducted on an integrated basis. The following table sets forth information regarding costs and expenses, expressed as a percentage of the associated manufacturing or leasing and services revenue. Three Months Ended November 30, 1996 1995 Manufacturing: Sales 100.0% 100.0% Cost of sales 92.4 90.5 Selling and administrative expense 3.7 3.3 Interest expense 0.6 1.0 Minority interest 0.5 (0.6) Earnings before income tax expense 2.8 5.8 Leasing and services: Revenues 100.0% 100.0% Operating expense 60.7 46.4 Selling and administrative expense 13.9 14.8 Interest expense 15.0 24.8 Minority interest 1.6 3.4 Earnings before income tax expense 8.8 10.6 Corporate expense as a percentage of total revenues 1.2 1.3 Income tax expense as a percentage of pre-tax earnings 37.6 46.2 Net earnings as a percentage of total revenues 2.1 2.9 Three Months Ended November 30, 1996 Compared to Three Months Ended November 30, 1995 Revenues. Manufacturing revenue for the three-month period ended November 30, 1996 increased 7% over the corresponding period in the prior year. Total deliveries increased by 127 to 1,600 in the current quarter, compared to 1,473 in the prior comparable period. Revenue from Canadian operations was substantially greater than the prior comparable period due to increased volume and a product mix with higher unit sales value. During the 1995 period the Canadian facility experienced production difficulties. The increase in revenue from Canadian operations in 1996 was largely offset by decreased revenue from U.S. operations resulting from fewer railcar deliveries and a product mix including railcars with a lower unit sales value. In the quarter ended November 30, 1995, 40% of total new railcar deliveries were double-stack railcars while virtually all of the deliveries in the quarter ended November 30, 1996 were conventional railcars. This shift to conventional railcars is expected to continue for the near term due to the pause in the intermodal transportation market. The manufacturing backlog of railcars for sale and lease was approximately 1,200 railcars with an estimated value of $77 million as of November 30, 1996 compared to 2,200 railcars valued at $123 million as of August 31, 1996. Subsequent to quarter end, additional orders for 700 new railcars valued at approximately $40 million were received. Due to an industry-wide softening in demand for certain car types, the Canadian facility is expected to operate at reduced production and workforce levels for the foreseeable future which will impact operating results. THE GREENBRIER COMPANIES, INC. Leasing and services revenue increased $17 million, or 80%, for the quarter ended November 30, 1996 compared to the quarter ended November 30, 1995. This increase is primarily due to the recently expanded third-party transportation logistics operation and, to a lesser extent, additional railcars placed in lease service, partially offset by a decrease in revenue from automobile transportation services as a result of the lower volume of automobiles transported. Pre-tax earnings realized on the disposition of leased equipment during the quarter amounted to $538 compared to $285 realized in the corresponding prior period. Cost of Manufacturing Sales. Cost of sales as a percentage of manufacturing revenue increased in the quarter ended November 30, 1996 to 92.4% from 90.5% in the quarter ended November 30, 1995. The lower margins achieved in the current quarter result from a less favorable product mix at U.S. operations partially offset by continuing improvement in manufacturing efficiencies at the Canadian operation. The prior period margin benefited from a favorable product mix and the efficiencies of longer production runs. Leasing and Services Expense. Leasing and services expense as a percentage of revenue was 60.7% for the quarter ended November 30, 1996 which is indicative of the ratio expected for the foreseeable future. Expense as a percentage of revenue for the corresponding prior period was 46.4% as it did not include the recently expanded logistics operation. Logistics typically is a high-volume business with lower margins than the leasing operation. Reduced contribution from automobile transportation services due to lower volumes also had a negative impact on expense as a percentage of revenue for the current quarter. Selling and Administrative Expense. Total selling and administrative expense as a percentage of total revenue for the three months ended November 30, 1996 increased compared to the corresponding prior period primarily due to increased sales expense and costs associated with the recently acquired logistics operations. Interest Expense. Manufacturing interest expense declined due to lower working capital borrowings in the current period. The increase in leasing and services interest expense resulted from working capital borrowings offset somewhat by normal paydowns of term debt. Minority Interest. Manufacturing minority interest increased as a result of improved earnings of the Canadian operation. Leasing and services minority interest decreased due to reduced earnings from automobile transportation services. Income Tax Expense. The income tax provision for the quarter ended November 30, 1996 represents an effective tax rate of 42% on U.S. operations which is consistent with the corresponding prior period. Consolidated income taxes as a percentage of pre-tax earnings are less than 42% as the Canadian operation, which is not included in the U.S. consolidated tax return, previously generated operating loss carryforwards which offset current period earnings. In the prior period, no tax benefit was recognized for the losses incurred by Canadian operations. Liquidity and Capital Resources Cash provided by operations totaled $51 million for the three- month period ended November 30, 1996 compared to $1 million for the corresponding prior period. The fluctuation in cash from operations is primarily due to the decrease in accounts receivable related to the timing of payment for newly manufactured railcars and to a lesser extent decreased inventory as a result of increased railcar deliveries. Existing credit facilities aggregate approximately $102 million at November 30, 1996. Revolving lines of credit aggregating $43 million, bearing interest primarily at the bank's Money Market Rate plus 1.5%, are available through March 1997 to provide working capital and interim financing of equipment for the leasing and services operations. Borrowings outstanding under these revolving lines of credit were $7 million as of November 30, 1996. A $30 million operating line of credit, bearing interest at prime, for working capital and a $10 million term loan facility for certain manufacturing capital expenditures are available through February 1999 and December 1997 for U.S. manufacturing operations. There were no borrowings outstanding under the operating line or the term facility as of November 30, 1996. A $19 million (at the November 30, 1996 exchange rate) operating line of credit, bearing interest at prime plus 1.125%, is available through March 1997 for working capital and certain capital expenditures for the Canadian operations. There were no borrowings outstanding under this operating line of credit as of November 30, 1996. THE GREENBRIER COMPANIES, INC. Subsequent to quarter end, Greenbrier acquired a minority investor's interest in a consolidated leasing and services subsidiary for approximately $16 million and increased the ownership percentage in the Canadian manufacturing facility by 10%. These transactions were financed through available lines of credit and operating cash flow. Capital expenditures totaled $25 million for the three months ended November 30, 1996 compared to $40 million for the three months ended November 30, 1995. Of these capital expenditures, approximately $23 million and $38 million, respectively, were attributable to leasing and services operations. Significant leasing and services capital expenditure programs included additions to the leased railcar fleet under refurbishment programs and various additions to the lease fleet related to other equipment purchases, some of which may be syndicated. Leasing and services capital expenditures for the remainder of 1997 are expected to be approximately $63 million. Approximately $2 million of the total capital expenditures for the three months ended November 30, 1996 and November 30, 1995 were attributable to manufacturing operations. Manufacturing capital expenditures for the remainder of 1997 are expected to be approximately $6 million. Capital expenditure programs include new and upgraded manufacturing plant and equipment to improve efficiencies and increase capacity. Operations in Canada give rise to market risks from changes in foreign currency exchange rates. To minimize these risks, forward exchange contracts are utilized. As of November 30, 1996 forward exchange contracts outstanding for the purchase of Canadian dollars were $24 million and for the purchase of U.S. dollars were $6 million, maturing at various dates through March 1997. Realized and unrealized gains and losses from such off-balance sheet contracts are deferred and recognized in income concurrent with the hedged transaction. Dividends of $.06 per share have been paid quarterly beginning in 1995. The most recent quarterly dividend of $.06 per share was declared in January 1997 to be paid in February 1997. Management expects existing funds and cash generated from operations, together with borrowings under existing credit facilities, will be sufficient to fund dividends, working capital needs, planned capital expenditures and expected debt repayments. Management anticipates long-term financing will be required and will continue to be available for the purchase of equipment to expand Greenbrier's lease fleet. Forward-Looking Statements Statements contained in Management's Discussion and Analysis of Financial Condition and Results of Operations that are not statements of historical fact may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements as to expectations, beliefs and strategies regarding the future. It is important to note that actual results or outcomes could differ materially from such forward-looking statements due to a number of factors, including, among others, general political, regulatory or economic conditions; competitive factors and pricing pressures; shifts in market demand; the performance and needs of industries served by Greenbrier; actual future costs and availability of materials and a trained workforce; changes in interest rates; the financial condition of principal customers; or a delay in or failure of new acquisitions or products to compete successfully. The forward-looking statements should be considered in light of these factors. THE GREENBRIER COMPANIES, INC. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 27. Financial Data Schedule (b) Form 8-K No reports on Form 8-K were filed during the quarter for which this report is filed. THE GREENBRIER COMPANIES, INC. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE GREENBRIER COMPANIES, INC. Date: January 14, 1997 By: /s/ Larry G. Brady Larry G. Brady Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) EX-27 2
5 The schedule contains summary financial information extracted from the company's consolidated financial statements for the quarter ended November 30, 1996 and is qualified in its entirety by reference to such financial statements. 1,000 3-MOS AUG-31-1997 NOV-30-1996 21,193 0 39,559 0 69,355 95,673 36,490 0 590,254 47,499 0 0 0 14 113,951 590,254 0 140,895 117,800 136,212 0 0 6,457 4,683 1,763 2,920 0 0 0 2,920 .21 .21 Of this amount, $6,773 is restricted.
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