-----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, FrNndDXM7Xdt7wP+Iy9Fig1CH1dQq4Wch/KIi8vfF9mOj83pDO3vfL5h08PsSKeL hSHF7cU0MrM2AtbBP8Iglg== 0000950134-04-002605.txt : 20040226 0000950134-04-002605.hdr.sgml : 20040226 20040226171431 ACCESSION NUMBER: 0000950134-04-002605 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20040225 ITEM INFORMATION: ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20040226 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRINITY INDUSTRIES INC CENTRAL INDEX KEY: 0000099780 STANDARD INDUSTRIAL CLASSIFICATION: RAILROAD EQUIPMENT [3743] IRS NUMBER: 750225040 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06903 FILM NUMBER: 04631554 BUSINESS ADDRESS: STREET 1: 2525 STEMMONS FREEWAY CITY: DALLAS STATE: TX ZIP: 75207-2401 BUSINESS PHONE: 214-631-4420 FORMER COMPANY: FORMER CONFORMED NAME: TRINITY STEEL CO INC DATE OF NAME CHANGE: 19720407 8-K 1 d13038e8vk.txt FORM 8-K - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): FEBRUARY 25, 2004 TRINITY INDUSTRIES, INC. DELAWARE 1-6903 75-0225040 (STATE OF INCORPORATION) (COMMISSION FILE NO.) (IRS EMPLOYER IDENTIFICATION NO.) 2525 STEMMONS FREEWAY, DALLAS, TEXAS 75207-2401 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (214) 631-4420 - -------------------------------------------------------------------------------- ITEM 9. REGULATION FD DISCLOSURE ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION The following information is furnished pursuant to both Item 9 and Item 12. The Registrant hereby furnishes the information set forth in its News Release, dated February 25, 2004 announcing 2003 results, a copy of which is furnished as exhibit 99.1 and incorporated herein by reference. On February 26, 2004 the Registrant held a conference call and web cast with respect to its financial results for 2003. The conference call scripts of Neil O. Shoop, Treasurer, John L. Adams, Executive Vice President, Timothy R. Wallace, Chairman, President and Chief Executive Officer, and Jim S. Ivy, Senior Vice President and Chief Financial Officer are furnished as exhibits 99.2, 99.3, 99.4, and 99.5 respectively, and incorporated herein by reference. In addition, the Registrant hereby furnishes the information set forth in its News Release, dated February 26, 2004 announcing an agreement with The Burlington Northern and Santa Fe Railway Company to build 6,000 high capacity hopper railcars over the next four years, a copy of which is furnished as exhibit 99.6 and incorporated herein by reference. This information is not "filed" pursuant to the Securities and Exchange Act and is not incorporated by reference into any Securities Act registration statements. Additionally, the submissions of this report on Form 8-K is not an admission as to the materiality of any information in this report that is required to be disclosed solely by Regulation FD. SIGNATURE 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 hereunto duly authorized. TRINITY INDUSTRIES, INC. By: /s/ Michael G. Fortado -------------------------------- Michael G. Fortado Vice President and Secretary Date: February 26, 2004 EXHIBIT INDEX
Exhibit No. Description of Exhibit - ----------- ---------------------- Exhibit 99.1 News Release of Registrant dated February 25, 2004 with respect to the financial results for the fourth quarter of 2003. Exhibit 99.2 Conference call script of February 26, 2004 of Neil O. Shoop, Treasurer. Exhibit 99.3 Conference call script of February 26, 2004 of John L. Adams, Executive Vice President. Exhibit 99.4 Conference call script of February 26, 2004 of Timothy R. Wallace, Chairman, President and Chief Executive Officer. Exhibit 99.5 Conference call script of February 26, 2004 of Jim S. Ivy, Senior Vice President and Chief Financial Officer. Exhibit 99.6 News Release of Registrant dated February 26, 2004 with respect to an agreement with The Burlington Northern and Santa Fe Railway Company to build 6,000 high capacity covered hopper railcars.
EX-99.1 3 d13038exv99w1.txt NEWS RELEASE Exhibit 99.1 NEWS RELEASE MEDIA CONTACT: INVESTOR CONTACT: Nancy Farrar Neil Shoop Farrar Public Relations Treasurer 817/937-1557 214/589-8561 FOR IMMEDIATE RELEASE TRINITY INDUSTRIES REPORTS 2003 RESULTS DALLAS - February 25, 2004 - Trinity Industries, Inc. (NYSE:TRN) today reported financial results for the three months and year ended December 31, 2003. For the quarter ended December 31, 2003, the Company reported a loss of $0.8 million, or 4 cents per diluted share, on revenues of $415 million. This compares with a net loss of $11.5 million, or 25 cents per diluted share, on revenues of $349 million in the same quarter of 2002. The 2003 fourth quarter included an after-tax loss provision of $4.5 million (10 cents per diluted share) for certain North American rail and barge contracts that will be completed in 2004. The estimated losses on certain contracts resulted primarily from the effect of increases in steel prices related to scrap surcharges that Trinity was notified of in the first quarter of 2004. For the year ended December 31, 2003, the Company reported a loss of $10.0 million, or 25 cents per diluted share, on revenues of $1.4 billion. This compares with a net loss of $19.6 million, or 43 cents per diluted share, on revenues of $1.5 billion for 2002. "I am pleased with our overall operating performance during the 4th quarter. Each of our business segments other than Inland Barge improved over the same period last year," said Timothy R. Wallace, Trinity's Chairman, President and CEO. "In the fourth quarter, our Inland Barge Group's results were affected by $2.9 million of the after tax charges related to steel prices discussed above ($4.1 million before tax) and pre-tax litigation related expenses of $1.5 million. In our Construction Products Group, favorable weather conditions in the fourth quarter led to increased revenues in the Concrete & Aggregates and Highway Safety businesses. In our Industrial Products Group, year over year fourth quarter improvement in profits were due to improved margins in our propane tank and tank heads businesses. Our Railcar Leasing and Management Services Group's revenue increased year over year in the fourth quarter due primarily to increased railcar sales from the lease fleet," said Wallace. Trinity's North American railcar shipments increased 33% during the 4th quarter compared to the 3rd quarter of 2003 and 101% compared to the 4th quarter of 2002. "The quality of our product mix of railcars during the 4th quarter contributed to our increased profitability. Our North American backlog is at the highest level since March 2000 and we are planning to almost double our railcar shipments in 2004. We expect 2004 to be another transitional year for Trinity as our North American railcar and barge businesses rebound from the trough of their markets despite the fact that the majority of our manufacturing businesses are confronted with increasing steel prices and potential steel supply shortages. We are working day to day with suppliers of steel to mitigate the effect this will have on our product deliveries and profits," added Wallace. Trinity Industries, Inc., with headquarters in Dallas, Texas, is one of the nation's leading diversified industrial companies. Trinity reports five principal business segments: the Rail Group, the Railcar Leasing and Management Services Group, the Inland Barge Group, the Construction Products Group, and the Industrial Products Group. Trinity's web site may be accessed at http://www.trin.net. This news release contains "forward looking statements" as defined by the Private Securities Litigation Reform Act of 1995 and includes statements as to expectations, intentions and predictions of future financial performance. Statements that are not historical facts are forward looking. Readers are directed to Trinity's Form 10-K and other SEC filings for a description of certain of the business issues and risks, a change in any of which could cause actual results or outcomes to differ materially from those expressed in the forward looking statements. Any forward looking statement speaks only as of the date on which such statement is made. Trinity undertakes no obligation to update any forward looking statement or statements to reflect events or circumstances after the date on which such statement is made. - TABLES TO FOLLOW - TRINITY INDUSTRIES, INC. CONDENSED CONSOLIDATED INCOME STATEMENTS (in millions, except per share amounts)
Three Months Twelve Months Ended December 31, Ended December 31, -------------------------- -------------------------- 2003 2002 2003 2002 ---------- ---------- ---------- ---------- Revenues $ 414.5 $ 349.4 $ 1,432.8 $ 1,487.3 Operating profit (loss) $ 4.3 $ (2.0) $ 13.4 $ 10.7 Other expense 5.4 11.6 27.7 35.1 ---------- ---------- ---------- ---------- Loss before income taxes (1.1) (13.6) (14.3) (24.4) Provision (benefit) for income taxes (0.3) (2.1) (4.3) (4.8) ---------- ---------- ---------- ---------- Net loss (0.8) (11.5) (10.0) (19.6) Dividends on Series B preferred stock (0.8) -- (1.6) -- ---------- ---------- ---------- ---------- Loss applicable to common share $ (1.6) $ (11.5) $ (11.6) $ (19.6) ========== ========== ========== ========== Loss per common share: Basic $ (0.04) $ (0.25) $ (0.25) $ (0.43) ========== ========== ========== ========== Diluted $ (0.04) $ (0.25) $ (0.25) $ (0.43) ========== ========== ========== ========== Weighted average number of shares outstanding: Basic 45.7 45.5 45.6 45.3 Diluted 45.7 45.5 45.6 45.3
Trinity Industries, Inc. Condensed Segment Data (in millions) REVENUES:
Three Months Twelve Months Ended December 31, Ended December 31, -------------------------- -------------------------- 2003 2002 2003 2002 ---------- ---------- ---------- ---------- Rail Group $ 240.6 $ 161.0 $ 734.6 $ 629.4 Construction Products Group 120.4 103.9 489.9 504.8 Inland Barge Group 40.8 44.9 170.6 211.7 Industrial Products Group 36.3 37.9 124.8 143.1 Railcar Leasing & Management Services Group 41.1 33.0 153.8 114.7 All Other 8.0 7.6 30.9 39.5 Eliminations (72.7) (38.9) (271.8) (155.9) ---------- ---------- ---------- ---------- Total revenues $ 414.5 $ 349.4 $ 1,432.8 $ 1,487.3 ========== ========== ========== ==========
OPERATING PROFIT (LOSS):
Three Months Twelve Months Ended December 31, Ended December 31, -------------------------- -------------------------- 2003 2002 2003 2002 ---------- ---------- ---------- ---------- Rail Group $ 7.3 $ (10.4) $ (6.2) $ (41.5) Construction Products Group 7.7 6.4 37.5 48.3 Inland Barge Group (5.2) 0.4 (4.7) 4.7 Industrial Products Group 4.1 0.1 8.4 2.4 Railcar Leasing & Management Services Group 10.5 9.9 41.0 31.3 All Other (3.4) (0.8) (8.4) (5.7) Corporate & Eliminations (16.7) (7.6) (54.2) (28.8) ---------- ---------- ---------- ---------- Consolidated $ 4.3 $ (2.0) $ 13.4 $ 10.7 ========== ========== ========== ==========
TRINITY INDUSTRIES, INC. Condensed Consolidated Balance Sheet (in millions)
December 31, ------------------------------ 2003 2002 ------------ ------------ Cash and equivalents $ 46.0 $ 19.1 Accounts receivable 198.1 168.2 Income tax receivable -- 50.0 Inventories 258.0 213.3 Net property, plant and equipment, at cost (1) 945.2 961.0 Other assets 560.6 544.9 ------------ ------------ $ 2,007.9 $ 1,956.5 ============ ============ Accounts payable and accrued liabilities $ 460.2 $ 396.0 Debt (2) 395.2 488.9 Deferred income 32.2 16.8 Other liabilities 58.7 53.2 Series B preferred stock 57.8 -- Stockholders' equity 1,003.8 1,001.6 ------------ ------------ $ 2,007.9 $ 1,956.5 ============ ============ (1) PROPERTY, PLANT AND EQUIPMENT Corporate/Manufacturing: Property, plant and equipment $ 868.6 $ 857.7 Accumulated depreciation (569.0) (493.6) ------------ ------------ 299.6 364.1 ------------ ------------ Leasing: Equipment on lease 758.5 707.7 Accumulated depreciation (112.9) (110.8) ------------ ------------ 645.6 596.9 ------------ ------------ $ 945.2 $ 961.0 ============ ============ (2) DEBT Corporate/Manufacturing - Recourse Revolving commitment $ -- $ 48.0 Term commitment 122.8 149.3 Other 5.7 6.4 ------------ ------------ 128.5 203.7 ------------ ------------ Leasing - Recourse Equipment trust certificates 170.0 170.0 Other -- 1.4 ------------ ------------ 170.0 171.4 ------------ ------------ Leasing - Non-recourse Warehouse facility 71.1 113.8 Other 25.6 -- ------------ ------------ 96.7 113.8 ------------ ------------ $ 395.2 $ 488.9 ============ ============
- END - EX-99.2 4 d13038exv99w2.txt CONFERENCE CALL SCRIPT EXHIBIT 99.2 FISCAL YEAR 2003 RESULTS CONFERENCE CALL FEBRUARY 26, 2004 NEIL SHOOP: THANK YOU NATE: A. GOOD MORNING FROM DALLAS, TEXAS AND WELCOME TO THE TRINITY INDUSTRIES' FISCAL YEAR 2003 RESULTS CONFERENCE CALL. I'M NEIL SHOOP, TREASURER FOR TRINITY. THANK YOU FOR BEING WITH US TODAY. 1. WITH ME TODAY ARE: A. TIM WALLACE, CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER B. JOHN ADAMS, EXECUTIVE VICE PRESIDENT C. JIM IVY, SR. VICE PRESIDENT AND CHIEF FINANCIAL OFFICER, AND D. CHAS MICHEL, VICE PRESIDENT, CONTROLLER 2. A REPLAY OF THIS CONFERENCE CALL WILL BE AVAILABLE STARTING ONE HOUR AFTER THE CONFERENCE CALL ENDS TODAY THROUGH MIDNIGHT ON THURSDAY, MARCH, 18TH. 3. THE REPLAY NUMBER IS (402) 220-0116. B. I WOULD ALSO LIKE TO WELCOME OUR AUDIO WEBCAST LISTENERS TODAY. REPLAY OF THIS BROADCAST WILL ALSO BE AVAILABLE ON OUR WEBSITE LOCATED AT www.trin.net. 1. IN A MOMENT, JOHN ADAMS, TIM WALLACE AND JIM IVY WILL HAVE SOME BRIEF COMMENTS. FOLLOWING THAT, WE'LL MOVE TO THE Q&A SESSION. C. BEFORE WE GET STARTED, LET ME REMIND YOU THAT: "TODAY'S CONFERENCE CALL CONTAINS FORWARD LOOKING STATEMENTS AS DEFINED BY THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND INCLUDES STATEMENTS AS TO EXPECTATIONS, INTENTIONS AND PREDICTIONS OF FUTURE FINANCIAL PERFORMANCE. STATEMENTS THAT ARE NOT HISTORICAL FACTS ARE FORWARD LOOKING. PARTICIPANTS ARE DIRECTED TO TRINITY'S FORM 10-K AND OTHER SEC FILINGS FOR A DESCRIPTION OF CERTAIN OF THE BUSINESS ISSUES AND RISKS, A CHANGE IN ANY OF WHICH COULD CAUSE ACTUAL RESULTS OR OUTCOMES TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN THE FORWARD LOOKING STATEMENTS. D. NOW, HERE'S JOHN ADAMS. JOHN ... JOHN TIM JIM E. THANKS, JIM. NOW OUR OPERATOR WILL PREPARE US FOR THE Q & A SESSION. NATE. Q & A SESSION THANKS, NATE. 1. THIS CONCLUDES TODAY'S CONFERENCE CALL. 2. REMEMBER, A REPLAY OF THIS CALL WILL BE AVAILABLE STARTING ONE HOUR AFTER THIS CALL ENDS TODAY THROUGH MIDNIGHT, THURSDAY, MARCH 18TH. 3. THE ACCESS NUMBER IS (402) 220-0116. 4. ALSO, THIS REPLAY WILL BE AVAILABLE ON OUR WEBSITE LOCATED AT www.trin.net. 5. WE LOOK FORWARD TO VISITING WITH YOU AGAIN ON OUR NEXT CONFERENCE CALL. 6. THANK YOU FOR JOINING US THIS MORNING. EX-99.3 5 d13038exv99w3.txt CONFERENCE CALL SCRIPT EXHIBIT 99.3 JOHN ADAMS CONFERENCE CALL FEBRUARY 26, 2004 GOOD MORNING AND THANKS FOR JOINING US. MY COMMENTS WILL BE BRIEF TODAY. AS I REPORTED TO YOU AT OUR LAST MEETING, WE RESTRUCTURED OUR BANK REVOLVING CREDIT AGREEMENT THIS PAST FALL. YOU WILL RECALL WE HAVE ESSENTIALLY DIVIDED OUR CREDIT FACILITIES INTO CORPORATE/MANUFACTURING AND LEASING. THEY ARE AS FOLLOWS: CORPORATE/MANUFACTURING, WE HAVE A 1) $275 MILLION REVOLVING CREDIT, LED BY JPMORGAN - JUNE 2005, WE HAD NO BORROWINGS AT YEAR END. 2) $123.1 MILLION TERM LOAN DUE JUNE 2007. THIS AMOUNT WAS OUTSTANDING AS OF DECEMBER 31. LEASING, WE HAVE A 1) 300 MILLION RAILCAR LEASING WAREHOUSE FACILITY, LED BY CSFB - DUE AUGUST 2004. AT YEAR END, $71 MILLION WAS OWING. 2) $170 MILLION EQUIPMENT TRUST CERTIFICATE - DUE FEBRUARY 2009 - WITH THE FULL AMOUNT OWING. AS IT RELATES TO LEASING, WE CLOSED A $235 MILLION LEVERAGED LEASE FACILITY IN LATE NOVEMBER 2003 WHICH FUNDED OUR FIRST LEASING WAREHOUSE FACILITY. THIS FUNDING WAS SIGNIFICANTLY OVERSUBSCRIBED AND WE ARE VERY PLEASED WE WERE ABLE TO ACCOMPLISH THIS. AS MOST OF YOU ARE PROBABLY AWARE, THE DEBT MARKETS HAVE IMPROVED FOR BORROWERS DURING THE LAST SEVERAL WEEKS - THIS IS TRUE FOR BOTH BANK CREDITS AND FOR LONGER TERM DEBT. THEREFORE, WE WILL BE EXPLORING THE POSSIBILITY OF ASSESSING THE CAPITAL MARKETS TO PAY OUR CORPORATE/MANUFACTURING INDEBTEDNESS AND TO GIVE US SOME ADDITIONAL FINANCING FLEXIBILITY FOR THE FUTURE. NOW, TIM WILL REVIEW OUR BUSINESS WITH YOU. EX-99.4 6 d13038exv99w4.txt CONFERENCE CALL SCRIPT EXHIBIT 99.4 TRW COMMENTS EARNINGS RELEASE CONFERENCE CALL THURSDAY, FEBRUARY 26, 2004 FINAL THANK YOU AND GOOD MORNING EVERYONE - I'LL FIRST TALK ABOUT OUR CONSTRUCTION PRODUCTS BUSINESSES AND OUR OTHER NON-RAIL BUSINESSES AND THEN I'LL WRAP UP WITH OUR RAIL GROUP. IN OUR HIGHWAY CONSTRUCTION-RELATED BUSINESSES, WE ARE WAITING OUT THE PASSAGE OF A HIGHWAY-SPENDING BILL AS WELL AS FOR THE WINTER WEATHER TO CALM DOWN. WHEN OUR GUARDRAIL CUSTOMERS' INSTALLATION CREWS TAKE A BREAK DURING SEVERE WEATHER PERIODS IT DRASTICALLY REDUCES OUR SHIPMENTS. THIS WINTER HAS BEEN A TOUGH ONE. EACH DAY WE ARE DELAYED BY WEATHER TENDS TO BUILD OUR BACKLOG IN THIS BUSINESS. ONCE THE WEATHER CLEARS AND THE CONSTRUCTION CREWS ARE BACK TO WORK OUR HIGHWAY SAFETY BUSINESS SHOULD HAVE AN ACTIVE CONSTRUCTION SEASON. OUR FOCUS IS ON COST CONTROL WITH AN EMPHASIS ON TRYING TO IMPROVE MARKET SHARE ON OUR PROPRIETARY HIGHWAY SAFETY PRODUCTS. GOING FORWARD, OUR REVENUE AND PROFIT IS EXPECTED TO BE RELATIVELY FLAT IN THIS BUSINESS UNTIL THERE IS A NEW TRANSPORTATION BILL PASSED. IN OUR CONCRETE AND AGGREGATE BUSINESS WE ARE CONTINUING TO SEE A RELATIVELY STRONG CONSISTENT DEMAND FOR OUR PRODUCTS. WEATHER REMAINS THE MOST SIGNIFICANT FACTOR IN THIS BUSINESS. WE WERE LUCKY TO HAVE A RELATIVELY CALM WINTER THROUGH THE END OF THE 4TH QUARTER. DURING THE 4TH QUARTER WE WERE POURING CONCRETE 80% OF THE AVAILABLE WORKDAYS. THE WINTER WEATHER SINCE THE FIRST OF THE YEAR IN TEXAS HAS BEEN COLD AND WET. THUS FAR WE HAVE ONLY POURED CONCRETE 62% OF THE WORKDAYS THIS QUARTER. THIS COMPARES WITH 72% OF WORKDAYS LAST YEAR AT THIS SAME TIME. ON NON-RAINING DAYS WITH TEMPERATURES ABOVE 42 - 45 DEGREES OUR CREWS ARE BUSY POURING CONCRETE ACROSS THE STATE OF TEXAS. UNFORTUNATELY, SINCE THE FIRST OF THE YEAR THE GOOD CONSTRUCTION DAYS HAVE BEEN SPORADIC. WE HAVE A STRONG BACKLOG AND SHOULD HAVE A GOOD SEASON AS SOON AS THE WEATHER IMPROVES. WE EXPECT OUR CONSTRUCTION PRODUCTS GROUP OPERATING PROFIT TO BE AROUND BREAKEVEN TO A MILLION DOLLARS IN THE LST QUARTER OF 2004. WE EXPECT THE 2ND QUARTER TO BE COMPARABLE TO LAST YEAR. ON AN ANNUAL BASIS, 2004 COULD BE A CARBON COPY OF 2003. OUR BARGE BUSINESS IS RIGHT IN THE MIDDLE OF A RECOVERY TRANSITION. WE ARE RE-OPENING AN IDLE FACILITY AND REHIRING A NUMBER OF EMPLOYEES IN OUR OTHER BARGE FACILITIES. OUR BACKLOG STOOD AT 450 UNITS AT THE END OF '03. THIS COMPARES TO 86 UNITS AT THE END OF '02. WE ARE EXPECTING TO SHIP 475 TO 500 BARGES THIS YEAR COMPARED TO 360 IN 2003. THE BARGE FLEET OWNERS HAVE SOME VERY COMPELLING REPLACEMENT ISSUES SIMILAR TO THE RAILCAR INDUSTRY. DURING 2004 OUR REVENUE SHOULD INCREASE 30% TO 35% IN THE BARGE BUSINESS. BASED ON OUR CURRENT ESTIMATION FOR STEEL COSTS AND LITIGATION EXPENSE WE EXPECT OUR BARGE BUSINESS TO LOSE MONEY AGAIN IN '04. OUR BARGE MANAGEMENT TEAM IS ACTIVELY SEARCHING FOR WAYS TO REDUCE OUR COSTS AND I'M OPTIMISTIC THEY WILL BE SUCCESSFUL. I DON'T HAVE ANY FURTHER UPDATE ON OUR BARGE LITIGATION. WE ARE FILING OUR 10-K SHORTLY AND WE HAVE UPDATED OUR DISCLOSURES IN IT. OUR INDUSTRIAL PRODUCTS GROUP PERFORMED BETTER IN THE 4TH QUARTER THIS YEAR THAN IT DID LAST YEAR. WE EXPECT THAT TREND TO CARRY INTO THE LST QUARTER. THE WINTER WEATHER AND COLD TEMPERATURES CREATE A DEMAND FOR PROPANE. THIS IS A GOOD SIGN FOR OUR PROPANE BUSINESS. AT THIS POINT, I'LL SHARE A FEW OBSERVATIONS ABOUT OUR EUROPEAN RAIL BUSINESS. THE DEMAND FOR RAILCARS IN EUROPE CONTINUES TO BE IN THE LOWER END OF THE CYCLE. LONG-TERM, THE EUROPEAN RAIL DEMAND SHOULD INCREASE FOR REPLACEMENT REASONS. THE EUROPEAN FLEET OF RAILCARS IS VERY OLD AND NEWER DESIGNS TEND TO OBSOLETE OLDER MODELS. RIGHT NOW, THE MARKET IS HIGHLY COMPETITIVE AND OUR PRIMARY FOCUS IS ON LOWERING OUR COST AND IMPROVING OUR PERFORMANCE. WE ARE IN THE FINAL PHASE OF A MULTI-YEAR INTERNAL CONSOLIDATION PROGRAM. DURING THE PAST FEW YEARS WE HAVE REDUCED OUR ADMINISTRATIVE STAFFING AND CONSOLIDATED MANUFACTURING OPERATIONS IN AN EFFORT TO REDUCE OUR COSTS. WE SHOULD BEGIN TO SEE THE FRUITS FROM OUR EFFORTS SHOW UP DURING 2004. WE EXPECT OUR EUROPEAN RAIL OPERATIONS TO BREAK EVEN OR MAKE A LITTLE PROFIT THIS YEAR. THIS COMPARES TO APPROXIMATELY A $4 MILLION OPERATING LOSS IN '03. 2003 WAS A TURNAROUND YEAR FOR OUR NORTH AMERICAN RAIL BUSINESSES. WE INCREASED OUR RAILCAR SHIPMENTS IN NORTH AMERICA FROM 4800 UNITS IN 2002 TO 8300 UNITS IN 2003. THIS WAS A 73% INCREASE. OUR BACKLOG AT THE END OF '03 WAS APPROXIMATELY 11,800 UNITS. THIS IS A 60% IMPROVEMENT FROM THE END OF 2002. DURING 2002 AND THE FIRST HALF OF 2003 OUR SALES OBJECTIVE WAS TO OBTAIN ORDERS WHICH PROVIDED US WITH A BASE LOAD OF PRODUCTION. OUR PRIORITY WAS TO PRESERVE OUR EXISTING WORKFORCE UNTIL WE BELIEVED THERE WAS A SUSTAINABLE RECOVERY UNDERWAY. DURING THE MIDDLE OF '03 WHEN OUR BACKLOG HIT 10,000 UNITS, WE IMPLEMENTED A PLAN TO EXPAND OUR PRODUCTION. IN JUNE WE TRANSITIONED OUR SALES OBJECTIVE FROM A FOCUS ON OBTAINING PRIMARILY BASE LOAD ORDERS TO AN OBJECTIVE OF PURSUING SPECIFIC ORDERS WHICH ALLOW US TO EFFICIENTLY INCREASE OUR PRODUCTION. AS I'VE STATED SEVERAL TIMES, WE HAVE NOT FELT THE TIMING HAS BEEN RIGHT FOR US TO FOCUS ON MARKET SHARE PENETRATION. WHEN WE CONCENTRATE ON MARKET SHARE GROWTH, WE HAVE TO BE WILLING TO PURSUE EVERY ORDER AGGRESSIVELY. WE DID NOT WANT TO CONGEST OUR PRODUCTION LINES WITH A VARIETY OF ORDERS. LINE CHANGEOVERS AT SMALL VOLUMES ARE VERY COSTLY WHEN WE ARE TRYING TO TRAIN A WORKFORCE. WE STRIVED TO FILL OUR BACKLOG WITH PRODUCTS WHICH WOULD ALLOW US TO SUCCESSFULLY RELOAD OUR FACILITIES. WE BECAME HIGHLY FOCUSED ON OBTAINING 100% OF THE ORDERS WHICH WOULD ASSIST US IN AN ORDERLY EXPANSION PROGRAM. DURING THE PAST 6 MONTHS WE HAVE BEEN ABLE TO INITIATE PRICE INCREASES ON SELECTIVE ORDERS. TODAY, OUR BACKLOG CONSISTS OF A COMBINATION OF "BASE LOAD" ORDERS AS WELL AS ORDERS I WILL REFER TO AS "TRANSITIONAL" ORDERS. TRANSITIONAL ORDERS HAVE HIGHER PRICES WITH MARGINS WHICH REFLECT THE CURRENT INCREASED DEMAND LEVELS. IN SHORT, OUR GOAL HAS BEEN TO OBTAIN HIGHER MARGIN ORDERS WHICH CAN BE TACKED-ON TO OUR EXISTING PRODUCTION LINES OR ORDERS LARGE ENOUGH TO PROVIDE PRODUCTION STABILITY. DURING THE 3RD QUARTER WE INCREASED OUR SHIPMENTS 47% FROM 1500 UNITS TO 2200 UNITS PER QUARTER AND I WAS PLEASED WE WERE PROFITABLE AT THIS PRODUCTION LEVEL. DURING THE 4TH QUARTER WE INCREASED OUR SHIPMENTS AGAIN TO 2900 UNITS. I'M PLEASED WITH THE PROFIT LEVEL OUR RAIL GROUP GENERATED DURING THE 4TH QUARTER. DURING THE 4TH QUARTER WE HAD AN IDEAL PRODUCT MIX WHICH SUBSTANTIALLY ENHANCED OUR PROFITABILITY. OUR PERFORMANCE DURING THE 4TH QUARTER IS SYMBOLIC OF THE POTENTIAL OUR RAIL GROUP HAS TO GENERATE PROFITS AT A RELATIVELY LOW LEVEL OF SHIPMENTS. OUR PRODUCT MIX, THE PRICE OF STEEL AND THE COSTS WE HAVE ASSOCIATED WITH EXPANDING OUR PRODUCTION ALL AFFECT OUR LEVEL OF PROFITABILITY. DURING THE FIRST QUARTER OF '04 OUR SHIPMENTS WILL BE AT APPROXIMATELY THE SAME LEVEL AS THEY WERE IN THE 4TH QUARTER OF '03. UNFORTUNATELY, OUR LST QUARTER PRODUCT MIX IS NOT AS GOOD AS IT WAS DURING THE 4TH QUARTER AND OUR STEEL PRICE IS HIGHER. OUR SHIPMENTS WILL BE HEAVILY WEIGHTED WITH BASE LOAD ORDERS TAKEN EARLIER IN 2003. DURING THE LST QUARTER WE ARE TAKING STEPS TO INCREASE OUR SHIPMENTS ANOTHER 1000 UNITS PER QUARTER. AS WE PREPARE TO INCREASE OUR SHIPMENTS, WE ARE RE-OPENING TWO OF OUR IDLE FACILITIES. WE WILL HAVE START-UP COSTS ASSOCIATED WITH THIS INCREASE. FOR THIS REASON, WE WILL PROBABLY BREAK EVEN DURING THE LST QUARTER IN OUR RAIL GROUP. THIS COMPARES TO A $10 MILLION LOSS LAST YEAR DURING THE LST QUARTER OF '03. ONCE WE REACH OUR NEXT SHIPMENT PLATEAU OF APPROXIMATELY 4000 UNITS PER QUARTER WE EXPECT TO RETURN TO PROFITABILITY. WE EXPECT THIS TO OCCUR DURING THE 2ND QUARTER OF '04. WE EXPECT OUR 2ND QUARTER OPERATING PROFIT MARGINS TO BE SIMILAR TO OUR 4TH QUARTER, BUT THE AMOUNT OF PROFITABILITY SHOULD EXCEED WHAT WE EARNED DURING THE 4TH QUARTER OF '03 BECAUSE OF THE INCREASED REVENUE. AS OUR PRODUCTION STABILIZES AROUND 4,000 UNITS PER QUARTER AND OUR PRODUCT MIX IMPROVES WE EXPECT TO SEE OUR RAIL PROFITABILITY CONTINUE TO INCREASE. OUR 3RD QUARTER PROFITABILITY SHOULD BE BETTER THAN THE 2ND QUARTER. I'LL WAIT UNTIL LATER THIS SPRING TO PREDICT HOW WE THINK THE 4TH QUARTER WILL LOOK. WE STILL HAVE SEVERAL HILLS TO CLIMB. AS YOU CAN TELL, 2004 IS A TRANSITIONAL YEAR FOR US IN OUR NORTH AMERICAN RAIL GROUP. AS I SAID EARLIER, WE EXPECT TO ALMOST DOUBLE OUR SHIPMENTS FROM 8300 TO APPROXIMATELY 16,000 UNITS. WE HAVE A 3-PHASED MULTI-YEAR PROGRAM FOR EXPANDING OUR PRODUCTION BACK UP TO THE LEVELS WHERE WE WERE IN THE LATE '90'S. IT TOOK US 2 1/2 TO 3 YEARS TO DECREASE OUR PRODUCTION FROM AN ANNUAL RUN RATE OF 28,000 UNITS TO AN ANNUALIZED LEVEL OF 3600 UNITS. WE HIT THE BOTTOM OF THE CYCLE DURING THE SUMMER OF '02. IT IS NOT REALISTIC TO EXPECT US TO INCREASE OUR PRODUCTION FASTER THAN OUR CURRENT PACE. EACH OF OUR EXPANSION PHASES HAVE A UNIQUE SET OF CHALLENGES AND WE ARE STRIVING TO REMAIN FOCUSED ON OPERATIONAL EXCELLENCE. DURING THE PAST YEAR, THE ENTIRE NORTH AMERICAN RAILCAR SUPPLY CHAIN HAS BEEN REBOUNDING FROM THE TROUGH OF THE DEMAND CYCLE. THIS RECOVERY IS INDUSTRY WIDE AND IS SHOWING ITS EFFECTS ON THE ENTIRE SUPPLY CHAIN. IT'S A DAY-TO-DAY EXPEDITING ENVIRONMENT AT THE OPERATIONAL LEVEL OF OUR BUSINESS. AS YOU CAN SEE FROM OUR 4TH QUARTER EARNINGS RELEASE, THE U.S. STEEL INDUSTRY IS PRESENTING SOME UNIQUE CHALLENGES. THE PRICE OF SCRAP STEEL HAS SKYROCKETED AND THE ENTIRE STEEL INDUSTRY IS TRYING TO PASS THESE COSTS ON TO THEIR CUSTOMERS. NEEDLESS TO SAY, OUR SUPPLY ISSUES HAVE COMPOUNDED THE COMPLEXITY ASSOCIATED WITH OUR RECOVERY AND THEIR PRICE INCREASES HAVE ADDED AN UNEXPECTED LAYER OF ADDITIONAL COSTS ON OUR COMPANY. THE ADDED COMPLEXITY THAT THE SUPPLY INDUSTRY IS CAUSING REINFORCES OUR NEED TO HAVE A STRUCTURED PROGRAM FOR EXPANDING OUR RAILCAR PRODUCTION. WE ENTERED PHASE I OF OUR EXPANSION PROGRAM WHEN WE INCREASED OUR PRODUCTION LAST YEAR IN OUR EXISTING FACILITIES. WE ARE CURRENTLY ENTERING INTO PHASE II OF OUR EXPANSION PROGRAM AS WE REOPEN SOME OF OUR U.S. FACILITIES. WE HAVE A DIFFERENT SET OF CHALLENGES ASSOCIATED WITH REOPENING FACILITIES. DURING 2004 WE PLAN TO BREAK GROUND ON OUR 2ND RAILCAR MANUFACTURING FACILITY IN MEXICO. SEVERAL YEARS AGO WE DEVELOPED PLANS FOR A NEW STATE OF THE ART MANUFACTURING FACILITY IN SABINAS, MEXICO. WE INITIALLY CONSTRUCTED THE COATINGS PORTION OF OUR FACILITY. WE PUT THE MANUFACTURING PORTION OF THE FACILITY ON HOLD UNTIL THE MARKET IMPROVED. WE EXPECT TO SHIP RAILCARS OUT OF SABINAS IN LATE 2005. ONCE WE BEGIN MANUFACTURING RAILCARS AT OUR NEW MEXICAN FACILITY, WE WILL ENTER INTO PHASE III OF OUR PRODUCTION EXPANSION. WE HAVE A TOTALLY DIFFERENT SET OF CHALLENGES ASSOCIATED WITH TRAINING A NEW WORKFORCE IN MEXICO. FORTUNATELY, WE HAVE A VERY EXPERIENCED TEAM OF PEOPLE FOCUSED ON THIS PROJECT. FOR YOUR INFORMATION, WE SHIPPED 3250 RAILCARS OUT OF MEXICO IN 2003. THIS WAS 40% OF OUR SHIPMENTS. WE EXPECT TO SHIP APPROXIMATELY 30% OF OUR RAILCARS OUT OF MEXICO DURING 2004. WE ARE VERY PLEASED WITH THE PROGRESS WE ARE MAKING IN MEXICO. SINCE WE HAD THE SABINAS PROJECT ON OUR RADAR SCREEN, WE INITIATED A SPECIFIC SALES PROGRAM DESIGNED TO ESTABLISH A BASE LOAD OF BUSINESS FOR THIS NEW FACILITY. WE PURSUED A VERY LARGE ORDER. I'M VERY PLEASED TO ANNOUNCE THAT WE RECENTLY RECEIVED A 6000-CAR ORDER FROM THE BNSF FOR GRAIN CARS. WE WILL USE THIS ORDER TO SEED THE RE-STARTUP OF ONE OF OUR U.S. FACTORIES AND LATER WE WILL TRANSFER THE ORDER TO MEXICO. THIS IS A MULTI-YEAR PRODUCTION ORDER. THIS ORDER CONFIRMS OUR BELIEF THAT A SIGNIFICANT RECOVERY IS UNDERWAY. WE PRODUCED A SIMILAR ORDER FOR THE BNSF DURING THE 90'S. WE ALSO STARTED THEIR LAST 6000-CAR ORDER IN THE U.S. AND THEN EVENTUALLY TRANSFERRED IT TO MEXICO. WE LOVE LARGE ORDERS LIKE THIS. OVER TIME, WE CAN BECOME VERY EFFICIENT WITH LONG PRODUCTION RUNS. I'LL SPEND A FEW MOMENTS PROVIDING SOME INFORMATION ABOUT OUR LEASING COMPANY. OUR LEASING COMPANY HAD A GOOD QUARTER DURING THE 4TH QUARTER. OUR REVENUES GREW TO $41 MILLION COMPARED TO $33 MILLION DURING THE 4TH QUARTER OF '02. THIS INCREASE RESULTED FROM SALES FROM OUR FLEET, ADDITIONS TO OUR FLEET AND IMPROVED FLEET UTILIZATION. OUR OWNED AND LEASED RAILCAR FLEET HAS GROWN FROM APPROXIMATELY 15,100 RAILCARS AT THE END OF 2002 TO 18,600 AT THE END OF 2003. DURING THE 4TH QUARTER OUR LEASING COMPANY TOOK DELIVERY OF APPROXIMATELY $65 MILLION WORTH OF ASSETS OR 37% OF THE RAIL GROUP'S 4TH QUARTER SHIPMENTS. OUR YEAR OVER YEAR TOTAL REVENUES GREW TO APPROXIMATELY 34% TO $154 MILLION IN 2003 COMPARED TO APPROXIMATELY $115 MILLION IN 2002. THE INCREASE WAS PREDOMINATELY DUE TO RAILCAR SALES OUT OF OUR FLEET, FLEET ADDITIONS, AND IMPROVED FLEET UTILIZATION. OUR OPERATING PROFIT IN 2003 IMPROVED TO $41.0 MILLION COMPARED TO $31.3 MILLION IN 2002. AS OUR PRODUCTION BACKLOG HAS GROWN DURING THE LAST FEW QUARTERS OUR LEASING COMPANY HAS BEEN ABLE TO REDUCE THEIR ORDER LEVELS. OUR FLEET UTILIZATION IMPROVED TO 98.1% AT THE END OF '03 COMPARED TO 94.5% AT THE END OF 2002. THE AVERAGE AGE OF OUR FLEET IS 5.20 YEARS WITH A REMAINING LEASE TERM OF 6.37 YEARS. I AM VERY EXCITED ABOUT THE LONG-TERM POTENTIAL WE HAVE FOR OUR NORTH AMERICAN RAIL BUSINESS. WE ARE CURRENTLY EXPERIENCING A NICE RECOVERY IN THIS BUSINESS AND BARING SOME UNFORESEEN SITUATION, WE ARE EXPECTING A CONTINUATION OF THIS GROWTH TO OCCUR DURING THE NEXT SEVERAL YEARS. WE SEE 2004 AS THE YEAR WE WILL TRANSITION OUR BUSINESS BACK TO PROFITABILITY. IF THE ECONOMY AND THE DEMAND CONTINUES TO GROW FOR OUR PRODUCTS WE SEE 2005 AS A YEAR WE WILL INCREASE OUR PROFITABILITY. IF THE RAIL RECOVERY CONTINUES INTO 2006 WE EXPECT 2006 TO BE A YEAR IN WHICH WE MAXIMIZE OUR EARNINGS. WE SEE OUR NORTH AMERICAN RAIL RECOVERY DRIVEN PRIMARILY BY IMPROVEMENTS IN THE ECONOMY AS WELL AS REPLACEMENT NEEDS FOR EQUIPMENT. THE NORTH AMERICAN RAILCAR FLEET IS OLD. 53% OF THE NORTH AMERICAN FLEET IS 21 YEARS OR OLDER. THERE ARE CURRENTLY APPROXIMATELY 1.6 MILLION CARS IN THE NORTH AMERICAN FLEET. THE AVERAGE AGE OF THE RAILCARS IS 19.3 YEARS OLD. THE NORMAL RETIREMENT AGE OF A RAILCAR IS USUALLY BETWEEN 25 TO 35 YEARS. IT IS INTERESTING TO NOTE IN ROUND NUMBERS THAT THERE WERE APPROXIMATELY 670,000 RAILCARS BUILT BETWEEN 30 TO 40 YEARS AGO AND APPROXIMATELY 535,000 CONSTRUCTED BETWEEN 20 TO 30 YEARS AGO. DURING THE 20-30 YEAR TIME PERIOD THE INDUSTRY HIT BOTTOM IN '83 AT 5,600 UNITS. IF WE TOTAL THE UNITS SHIPPED BETWEEN 20 -40 YEARS AGO, IT IS OVER 1.2 MILLION RAILCARS. THIS EQUATES TO AN AVERAGE ANNUAL BUILD RATE FOR THE 20 YEAR TIME PERIOD OF 60,000 UNITS. THAT'S AN AVERAGE OF 60,000 RAILCARS BUILT PER YEAR FOR 2 DECADES. DURING 2002 THE RAILCAR MANUFACTURING INDUSTRY HIT BOTTOM AGAIN WHEN THERE WERE CLOSE TO 18,000 RAILCARS SHIPPED. DURING 2003 WE SAW IT BEGIN TO REBOUND WITH 32,000 UNITS SHIPPED. I DO NOT EXPECT THE INDUSTRY DEMAND TO MATCH THE REPLACEMENT CYCLE THAT IT DID DURING THE 20-YEAR PERIOD I MENTIONED ABOVE. BUT, I'M CONVINCED THE INDUSTRY WILL RETURN TO MORE NORMAL HISTORICAL LEVELS. WE WILL DO VERY WELL WHEN THE INDUSTRY DEMAND REACHES 50,000 UNITS. IT IS INTERESTING TO NOTE THAT WE OWN A SIGNIFICANT PORTION OF THE INDUSTRY'S CAPACITY TO INCREASE SHIPMENTS ABOVE 50 TO 55,000 UNITS. AT THIS POINT I'LL TURN IT OVER TO JIM IVY FOR SOME FINANCIAL HIGHLIGHTS. EX-99.5 7 d13038exv99w5.txt CONFERENCE CALL SCRIPT EXHIBIT 99.5 TRINITY INDUSTRIES, INC QUARTERLY CONFERENCE CALL FEBRUARY 26, 2004 COMMENTS OF JIM S. IVY, SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER I WILL MAKE A FEW COMMENTS REGARDING THE COMPARISON OF OUR FOURTH QUARTER RESULTS TO THE FOURTH QUARTER OF LAST YEAR. WE PLAN TO FILE OUR FORM 10-K FOR 2003 TOMORROW MORNING AND YOU WILL FIND MORE DETAILS THERE. OUR RESULTS FOR THE FOURTH QUARTER OF 2003 IMPROVED 21 CENTS PER SHARE OVER RESULTS FOR THE FOURTH QUARTER OF 2002, OR, A LOSS PER SHARE OF 4 CENTS IN FOURTH QUARTER OF 2003 COMPARED TO A LOSS PER SHARE OF 25 CENTS LAST YEAR. THIS IMPROVEMENT IS IN SPITE OF RECORDING AN AFTER TAX LOSS PROVISION IN THE FOURTH QUARTER OF 2003 OF $4.5 MILLION, OR 10 CENTS PER SHARE, RELATED TO THE STEEL PRICE INCREASES TIM DISCUSSED. I WILL COME BACK TO THIS ISSUE. OTHER EXPENSE IS IMPROVED IN THE 2003 4TH QUARTER OVER THE PRIOR YEAR PRIMARILY DUE TO GAINS ON SALE OF ASSETS AND ABOUT $1.3 MILLION LOWER INTEREST EXPENSE. INCREMENTAL COSTS RELATED TO IMPLEMENTATION OF A NEW FINANCIAL SYSTEM THAT WE HAVE DISCUSSED PREVIOUSLY INCLUDED IN SE&A EXPENSE IN THE 4TH QUARTER WAS $2.7 MILLION. MOVING TO THE RAIL GROUP, I WOULD REMIND YOU THAT IN ADDITION TO NORTH AMERICAN RAILCAR SALES, THIS SEGMENT INCLUDES THE PARTS & COMPONENTS BUSINESS IN NORTH AMERICA AND OUR EUROPEAN RAILCAR BUSINESS. SALES GROWTH OF $80 MILLION FROM $161 MILLION IN THE FOURTH QUARTER OF 2002 TO $241 MILLION IN THE FOURTH QUARTER OF 2003 IS A LITTLE MISLEADING AS NORTH AMERICAN SALES INCREASED APPROXIMATELY $107 MILLION AND EUROPEAN SALES DECLINED $28 MILLION. EUROPEAN RESULTS WERE FLAT SO THE CHANGE IN OPERATING PROFIT IS DUE TO NORTH AMERICAN OPERATIONS. THE RAIL GROUP DID RECORD AN AFTER TAX PROVISION RELATED TO STEEL PRICE INCREASES OF $1.6 MILLION IN THE 4TH QUARTER OF 2003. SALES TO THE LEASING COMPANY WERE $64.6 MILLION IN THE 4TH QUARTER OF 2003 WITH PROFITS OF $3.3 MILLION WHILE THE SALES TO THE LEASING COMPANY IN THE 4TH QUARTER OR 2002 WERE $30.6 MILLION WITH PROFITS OF $1.1 MILLION. THE ESTIMATED PRE TAX IMPACT OF STEEL PRICE INCREASES SUBSEQUENT TO DECEMBER 31, 2003 ON FIXED PRICE CONTRACTS WE WILL COMPLETE IN 2004 IS $4.2 MILLION WHICH WE RECORDED IN THE 4TH QUARTER OF 2003. BARGE CORROSION LITIGATION EXPENSES IN THE 4TH QUARTER OF 2003 WERE $1.5 MILLION, AN INCREASE OF $900 THOUSAND OVER THE SAME PERIOD LAST YEAR. IN THE INDUSTRIAL PRODUCTS GROUP, PROFITABILITY IMPROVED PRIMARILY DUE TO MARGINS AND SALES MIX IN OUR PROPANE TANK AND HEADS BUSINESSES. IN 2003, WE RECORDED A $900 THOUSAND PRE-TAX WRITE-DOWN OF THE CARRYING VALUE OF OUR LPG ASSETS IN BRAZIL BASED ON A DISCOUNTED CASH FLOW ANALYSIS AND ESTIMATED MARKET VALUES. THE REVENUES IN THE LEASING GROUP IN THE 4TH QUARTER OF 2003 INCLUDE $8.5 MILLION OF RAILCAR SALES FROM THE LEASE FLEET WITH PROFITS OF $600 THOUSAND WHILE 2002 INCLUDED FLEET SALES OF $3.1 MILLION WITH PROFITS OF $1.3 MILLION. ON AN APPLES TO APPLES BASIS, LEASING REVENUES WERE $118 MILLION IN 2003 AND $109 MILLION IN 2002 REFLECTING GROWTH IN THE SIZE OF OUR LEASE FLEET. THE UNFAVORABLE CHANGE IN OPERATING PROFIT FROM 2002 TO 2003 IN THE ALL OTHER GROUP IS PRIMARILY THE COST OF MAINTAINING IDLE OR NON-OPERATING FACILITIES AND COSTS RELATED TO OUR EQUIPMENT DIVISION INCLUDED IN THIS GROUP. ON A CONSOLIDATED BASIS, CASH PROVIDED BY OPERATIONS IN 2003 OF $114.9 MILLION WAS HELPED BY A $50 MILLION TAX REFUND. OUR DECEMBER 31, 2003 BALANCE SHEET SHOWS WE HAVE HAD SOME GROWTH IN INVENTORY AND RECEIVABLES, BOTH OF WHICH ARE IN THE RAIL GROUP AND RELATED TO THE RECOVERING RAIL MARKET AND, TO A LESSER EXTENT, SOME INVENTORY BUILD UP IN ANTICIPATION OF STEEL PRICE INCREASES. STEEL PRICING YOU MAY HAVE SEEN THE ARTICLE ON STEEL PRICING IN THE WALL STREET JOURNAL MONDAY. PRICES HAVE RISEN RAPIDLY SINCE DECEMBER 31, 2003 PRIMARILY DUE TO THE DEMAND FROM CHINA. THIS HAS BEEN COMPOUNDED BY THE WEAKER U.S. DOLLAR MAKING IMPORTS MORE EXPENSIVE THAN THE CURRENT DOMESTIC PRICES. OF THE STEEL TRINITY EXPECTS TO BUY IN 2004, ABOUT $160 MILLION, IN TERMS OF STEEL COST, RELATES TO PRODUCTS ON FIXED SALE PRICE CONTRACTS. OF THIS AMOUNT, APPROXIMATELY 75% IS PRESENTLY COVERED BY SOME TYPE OF SUPPLY AGREEMENT. WE HAVE VARIOUS SOURCES OF STEEL AND VARIOUS ARRANGEMENTS WITH VENDORS. OUR BARGE GROUP HAS BEEN MOST AFFECTED BY STEEL PRICE INCREASES. WE HAVE TAKEN A NUMBER OF ACTIONS TO DEAL WITH FUTURE INCREASES, SUCH AS, INCREASING INVENTORY PURCHASES IN DECEMBER 2003, ADDING ESCALATION CLAUSES TO NEW SALES CONTRACTS AND RAISING PRICES. BASED ON TODAY'S PRICES WE ARE STILL PROJECTING A PROFITABLE YEAR IN 2004. FUTURE STEEL PRICE INCREASES COULD RESULT IN REDUCED MARGINS OR LOWER SALES VOLUME THAN PRESENTLY EXPECTED. ANOTHER SIDE TO THE SCRAP PRICE INCREASES IS THAT THERE IS A SUBSTANTIAL OFFSETTING EFFECT TO THE OWNERS OF OUR STEEL PRODUCTS IN THAT THE SCRAP VALUE OF THEIR ASSET HAS INCREASED. THIS INCREASE IN SCRAP VALUE WOULD OFFSET OR PARTIALLY OFFSET PRICE INCREASES IN THE COST OF REPLACEMENT PRODUCTS AND COULD ENCOURAGE OWNERS TO ACCELERATE SCRAPING, FOR EXAMPLE, OLDER RAILCARS AND BARGES WHICH IN TURN HELPS DRIVE REPLACEMENT DEMAND. WE ALSO BELIEVE THAT, AT A PRICE POINT NOT VERY MUCH HIGHER THAN THE CURRENT SPOT PRICES, IMPORTS WILL BECOME MORE FEASIBLE. TIM REFERRED TO HIS EXPECTATIONS FOR OUR BUSINESSES GOING FORWARD. I WILL SAY THAT, ON A CONSOLIDATED BASIS, OUR ESTIMATES FOR THE FIRST QUARTER OF 2004, BASED ON THE FACTORS TIM MENTIONED, ARE FOR FIRST QUARTER PER SHARE RESULTS TO IMPROVE ON A YEAR TO YEAR BASIS BY 7 TO 15 CENTS PER SHARE TO A LOSS OF FROM 17 TO 25 CENTS. THE SECOND QUARTER OF 2004 IS EXPECTED TO RETURN TO PROFITABILITY WITH EARNINGS PER SHARE COMPARABLE TO THE PRIOR YEAR OR SLIGHTLY BETTER. EX-99.6 8 d13038exv99w6.txt NEWS RELEASE EXHIBIT 99.6 NEWS RELEASE MEDIA CONTACT: INVESTOR CONTACT: Nancy Farrar Neil Shoop Farrar Public Relations Treasurer 817/937-1557 214/589-8561 FOR IMMEDIATE RELEASE TRINITY INDUSTRIES, INC. RECEIVES AN ORDER FROM BNSF FOR 6,000 RAILCARS DALLAS - February 26, 2004 - Trinity Industries, Inc. (NYSE:TRN) today announced an agreement with The Burlington Northern and Santa Fe Railway Company (BNSF) to build 6,000 high capacity covered hopper railcars over the next four years to be used by BNSF to transport grain. Trinity Rail will begin production of the units in the third quarter of 2004. "We appreciate the opportunity to continue our role as BNSF's partner in meeting the needs of grain shippers," said Mike Flannery, Chief Executive Officer of Trinity Rail Group. "Our railcar backlog in North America had already grown to more than 12,000 at the end of 2003 and this order provides further evidence that the market for our products continues to improve." A subsidiary of Burlington Northern Santa Fe Corporation (NYSE:BNI), BNSF operates one of the largest railroad networks in North America, with 32,500 route miles covering 28 states and two Canadian provinces. BNSF is an industry leader in web-enabling a variety of customer transactions at www.bnsf.com. The railway is among the world's top transporters of intermodal traffic, moves more grain than any other American railroad, transports the components of many of the products we depend on daily, and hauls enough coal to generate about 10 percent of the electricity produced in the United States. Trinity Industries, Inc., with headquarters in Dallas, Texas is one of the nation's leading diversified industrial companies. Trinity reports five principal business segments: the Rail Group, the Railcar Leasing and Management Services Group, the Inland Barge Group, the Construction Products Group and the Industrial Products Group. Trinity's web site may be accessed at www.trin.net. This news release contains "forward looking statements" as defined by the Private Securities Litigation Reform Act of 1995 and includes statements as to expectations, beliefs and future financial performance, or assumptions underlying or concerning matters herein. These statements that are not historical facts are forward looking. Readers are directed to Trinity's Form 10-K and other SEC filings for a description of certain of the business issues and risks, a change in any of which could cause actual results or outcomes to differ materially from those expressed in the forward looking statements. Any forward looking statement speaks only as of the date on which such statement is made. Trinity undertakes no obligation to update any forward looking statement or statements to reflect events or circumstances after the date on which such statement is made. # # # -----END PRIVACY-ENHANCED MESSAGE-----