8-K

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): May 3, 2005

Trinity Industries, Inc.
__________________________________________
(Exact name of registrant as specified in its charter)

Delaware	1-6903	75-0225040
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	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

Not Applicable
______________________________________________
Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

The Registrant hereby furnishes the information set forth in its News Release, dated May 3, 2005, announcing operating results for the three months ended March 31, 2005, a copy of which is furnished as exhibit 99.1 and incorporated herein by reference. On May 4, 2005, the Registrant held a conference call and web cast with respect to its financial results for the three months ended March 31, 2005. The conference call scripts of Chas Michel, Vice President and Chief Accounting Officer, Timothy R. Wallace, Chairman, President and Chief Executive Officer, D. Steven Menzies, President of Trinity Industries Leasing Company, and William A. McWhirter II, 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. This information in not "filed" pursuant to the Securities and Exchange Act and is not incorporated by reference into any Securities Act registration statements. Additionally, the submission of the report on Form 8- k is not an admission of the materiality of any information in this report that is required to be disclosed solely by Regulations FD.

Item 7.01. Regulation FD Disclosure.

The Registrant hereby furnishes the information set forth in its News Release, dated May 3, 2005, announcing operating results for the three months ended March 31, 2005, a copy of which is furnished as exhibit 99.1 and incorporated herein by reference. On May 4, 2005, the Registrant held a conference call and web cast with respect to its financial results for the three months ended March 31, 2005. The conference call scripts of Chas Michel, Vice President and Chief Accounting Officer, Timothy R. Wallace, Chairman, President and Chief Executive Officer, D. Steven Menzies, President of Trinity Industries Leasing Company, and William A. McWhirter II, 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. This information in not "filed" pursuant to the Securities and Exchange Act and is not incorporated by reference into any Securities Act registration statements. Additionally, the submission of the report on Form 8- k is not an admission of the materiality of any information in this report that is required to be disclosed solely by Regulations FD.

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 hereunto duly authorized.

	Trinity Industries, Inc.
May 4, 2005	By:	Michael G. Fortado
		Name: Michael G. Fortado
		Title: Vice President and Secretary

Exhibit Index

Exhibit No.	Description
99.1	News Release dated May 3, 2005 with respect to the operating results for the three months ended March 31, 2005.
99.2	Conference call script of May 4, 2005 of Chas Michel, Vice President and Chief Accounting Officer.
99.3	Conference call script of May 4, 2005 of Timothy R. Wallace, Chairman, President and Chief Executive Officer.
99.4	Conference call script of May 4, 2005 of D. Stephen Menzies, President of Trinity Industries Leasing Company.
99.5	Conference call script of May 4, 2005 of William A. McWhirter II, Vice President and Chief Financial Officer.

EX-99.1

Exhibit 99.1

NEWS RELEASE

Media Contact:	Investor Contact:
Nancy Farrar	Neil Shoop

Farrar Public Relations Trinity Industries, Inc. 817/937-1557 214/589-8561

FOR IMMEDIATE RELEASE

Trinity Industries Reports Profitable First Quarter of 2005

DALLAS – May 3, 2005 – Trinity Industries, Inc. (NYSE:TRN) today reported financial results for the three months ended March 31, 2005.

For the quarter ended March 31, 2005 the Company reported earnings of $6.0 million, 11 cents per common diluted share, and revenues of $647 million. This compares with a net loss of $10.8 million, 25 cents per common diluted share, and revenues of $455 million in the same quarter of 2004. The first quarter of 2005 included an after-tax provision of approximately $2.1 million (4 cents per diluted share) related to the proposed settlement of two lawsuits and two other non-related warranty issues in the Company’s Inland Barge Group. The first quarter of 2004 included an after-tax loss provision for $4.8 million (10 cents per diluted share) due to the effect of cost increases in steel and components containing steel on certain rail and barge contracts as well as an after-tax charge of $769,000 (2 cents per diluted share) related to the early retirement of debt.

“I’m very pleased with our first quarter progress,” said Timothy R. Wallace, Trinity’s Chairman, President and CEO. “Our first quarter consolidated revenues increased 42% over last year, resulting in a profitable quarter—despite rising steel costs and legal settlement charges. The initiatives that we put into place during the past year are starting to produce results.”

“We turned a major corner during the first quarter from an operating performance and profitability point of view. Our revenues and operating results improved this quarter over the same period last year in each of our five business groups. I am very proud of our employees’ team efforts to accomplish these results.”

“Trinity’s North American railcar unit shipments were 5,300, an 89 percent increase over the same quarter last year, and the highest quarterly shipment level since the first quarter of 2000.”

“Our railcar shipments in North America have become consistent. Our North American railcar revenues increased 112% over last year reflecting higher prices as well as increased unit volume. We expect improved year over year performance each quarter in 2005,” Wallace said. “In addition, construction-friendly March weather resulted in a strong first quarter for our construction-related businesses.”

During the first quarter, Trinity also completed an increase and extension of its revolving credit facility to $350 million for five years. As of March 31, 2005, Trinity had no borrowings against this facility. “The completion of this facility gives Trinity increased flexibility to grow and expand as the recovery continues,” Wallace said. “It also underscores the strong reputation Trinity has developed in the debt capital market.”

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 Statement
(in millions, except per share amounts)

	Three Months Ended March 31,
	2005			2004
Revenues	$	646.9		$	454.9
Operating profit (loss)	$	17.9		$	(6.5	)
Other expense		8.3			10.0
Income (loss) before income taxes		9.6			(16.5	)
Provision (benefit) for income taxes		3.6			(5.7	)
Net income (loss)		6.0			(10.8	)
Dividends on Series B preferred stock		(0.8	)		(0.8	)
Net income (loss) applicable to common shareholders	$	5.2		$	(11.6	)
Net income (loss) applicable to common shareholders per common share:
Basic	$	0.11		$	(0.25	)
Diluted	$	0.11		$	(0.25	)
Weighted average number of shares outstanding:
Basic		47.0			46.2
Diluted		47.8			46.2

Trinity Industries, Inc.
Condensed Segment Data
(in millions)

	Three Months Ended March 31,
Revenues:	2005			2004
Rail Group	$ 434.4			$ 260.9
Construction Products Group	143.1			120.1
Inland Barge Group	44.9			43.3
Industrial Products Group	35.7			31.8
Railcar Leasing and Management Services Group	52.5			35.1
All Other	20.4			7.6
Eliminations	(84.1)			(43.9)
Total Revenues	$ 646.9			$ 454.9
				}
Operating profit (loss):	Three Months Ended March 31,
	2005			2004
Rail Group	$	8.8		$	(3.6	)
Construction Products Group		6.7			2.0
Inland Barge Group		(3.4	)		(5.7	)
Industrial Products Group		4.6			0.8
Railcar Leasing and Management Services Group		13.6			9.6
All Other		(1.3	)		1.3
Corporate		(6.6	)		(7.6	)
Eliminations		(4.5	)		(3.3	)
Consolidated	$	17.9		$	(6.5	)

Trinity Industries, Inc.
Condensed Consolidated Balance Sheet
(in millions)

	March 31,			December 31,
	2005			2004
Cash and equivalents	$	113.7		$	182.3
Accounts receivable		281.8			214.2
Inventories		448.4			402.3
Net property, plant and equipment, at cost (1)		859.6			810.9
Other assets		589.1			600.5
	$	2,292.6		$	2,210.2
Accounts payable and accrued liabilities	$	535.3		$	511.7
Debt (2)		570.2			518.0
Deferred income		46.6			47.2
Other liabilities		64.1			62.2
Series B preferred stock		58.3			58.2
Stockholders’ equity		1,018.1			1,012.9
	$	2,292.6		$	2,210.2
(1) Property, Plant and Equipment
Corporate/Manufacturing:
Property, plant and equipment	$	886.8		$	885.2
Accumulated depreciation		(596.9	)		(589.6	)
		289.9			295.6
Leasing:
Equipment on lease		692.0			635.7
Accumulated depreciation		(122.3	)		(120.4	)
		569.7			515.3
	$	859.6		$	810.9
(2) Debt
Corporate/Manufacturing — Recourse
Revolving commitment	$	—		$	—
Senior notes		300.0			300.0
Other		5.7			5.3
		305.7			305.3
Leasing – Recourse
Equipment trust certificates		130.1			170.0
		130.1			170.0
Leasing – Non-recourse
Warehouse facility		134.4			42.7
		134.4			42.7
	$	570.2		$	518.0

- END -

Exhibit 99.2

First Quarter Results Conference Call

May 4, 2005

Chas Michel:

Thank you Tony

A. Good morning from Dallas, Texas and Welcome to the Trinity Industries’ First Quarter Results Conference Call. I’m Chas Michel, Vice President & Chief Accounting Officer for Trinity. Thank you for being with us today.

1. Joining me today on the call are:

a. Tim Wallace, Chairman, President and Chief Executive Officer;
b. Bill McWhirter, Vice President and Chief Financial Officer;

c. and Steve Menzies, President of Trinity Industries Leasing Company

d. Also in the room are John Adams, Jim Ivy and Neil Shoop

2. A replay of this conference call will be available starting one hour after the conference call ends today through midnight on Wednesday, May, 11^th.

3. The replay number is (402) 220-1122.

B. I would also like to welcome our audio web cast listeners today. Replay of this broadcast will also be available on our website located at www.trin.net.

1. In a moment, I will be covering our current debt position, Tim Wallace will give a brief look at our Rail business, Steve Menzies will address the Rail market and our leasing business and Bill McWhirter will cover our financial performance for the quarter. 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.

Let me address our current debt position

At the beginning of the year, we began investigating different long-term debt instruments to complement our current debt structure. Our inquires to the capital market showed the market to be receptive to a number of different instruments including senior notes and bonds. We decided to extend and expand our existing 250 million dollar revolving credit facility to 350 million dollars. In April, we expanded the facility, led by JP Morgan, to provide for a five-year, 350 million dollar secured revolving credit facility. More favorable covenants and pricing are provided for in the amended facility. At March 31, 2005, there were no borrowings under the revolving credit facility.

At March 31, our only borrowings at the corporate level were the 300 million dollars of senior notes and 5.7 million dollars of other indebtedness. The Leasing Company had the 130.1 million dollars of Equipment Trust Certificates indebtedness outstanding and 134.4 million dollars outstanding under our 300 million dollars railcar leasing warehouse facility, which is lead by CSFB and matures in August of this year. At March 31, our debt to total capital ratio was 34.6 percent, up slightly from the comparable amount at December 31, 2004.
At March 31, our cash position was 113.7 million dollars.

E. Now, here’s Tim Wallace

Tim
Steve
Bill

F. Thanks, Bill. Now our operator will prepare us for the Q & A session.

Q & A Session

Thanks.

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, Wednesday, May 11^th.

3. The access number is (402) 220-1122.

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.

Exhibit 99.3

Trinity Industries, Inc.
Earnings Release Conference Call
Comments of Tim Wallace, Chairman, President and CEO
May 4, 2005

Thank you Chas, and good morning everyone.

I’m pleased with our progress. We had a solid first quarter and we’re beginning to see benefits from the initiatives we put into place during the past few years. Our performance should continue to improve throughout the year. Our primary concerns from a performance point of view continue to be rising steel costs and on-time material deliveries. However, the processes we put into place last year, along with the changing market conditions, kept these issues in check during the first quarter.

Our European railcar business did not have a good first quarter. Demand for railcars in remains low. Our backlog of orders in Europe decreased from approximately 1,270 units at the end of the year to approximately 1,100 units at the end of the first quarter. We shipped 450 units during the first quarter versus 560 units for the fourth quarter. Our first quarter revenues were approximately $35 million and we lost $5.7 million at the operating profit level. During the second quarter, we expect revenues in Europe in the same area as the lst quarter and a loss of between $3 million and $4 million. In the third quarter, we expect a smaller loss to between $1 million and $2 million. As it looks now, we expect a small loss to break even in the 4^th quarter. We recently took steps to reduce our costs in Europe. We just completed a two-week shutdown of our Romania plant and we recently laid off approximately 300 employees. We are still reviewing our strategic options for this business. I hope we have more positive information to report about our European operations during our third quarter conference call.

I’m pleased that our North American railcar businesses have turned the corner from a profitability point of view. Our shipments are consistent and we are seeing the benefits of our strategy of selling long production runs.

During the first quarter, our North American railcar shipments increased slightly over the fourth quarter to approximately 5,300 units. As you can see from our financial statement, the rail group made $8.8 million in profit after the $5.7 million charge for Europe. A portion of our profit improvement is due to operating efficiencies tied to a more stable production level. Our employee training costs have been high during the past few years as we ramped up our production. Fortunately, most of our learning curve costs are behind us.

Demand for railcars in North America during the first quarter remained strong. The majority of our existing railcar production lines are booked through the end of the year. Our shipments have increased 10 out of the last 12 quarters at double-digit growth rates.

During the balance of this year, we are transitioning into a period of moderate growth. We expect to ship between 5,200 and 5,900 units per quarter. We expect our annual shipments to be between 21,000 and 23,000 railcars this year. We have completed nearly 80% of the multi-phased expansion program I outlined several years ago.

Our short term objective for our North American rail business has been to control the acceleration of production based upon market demand, the ability of our supply chain to provide basic materials and our ability to efficiently train our workforce. We expect to maintain our production level until the opening of our new facility in Mexico in the spring of 2006. During the interim, we’re concentrating on improving productivity and performance.

From a sales point of view, we continue to focus on selling and leasing railcars that extend our existing production lines without requiring changeovers. This is in lieu of setting specific market share goals. Short term, we are planning to extract as much efficiency as we can out of our existing production lines. We have planned some productivity improvements that will impact the type of orders we pursue. Our market share figures will continue to fluctuate until we have completed these initiatives.

During the first quarter, we missed some coal car orders. This occurred because our line was full and we chose not to expand our production capacity until we improve our productivity. This year, we have scheduled some significant productivity improvements to our coal car production line. We plan to make these modifications during the fall when we are in the middle of a long, consistent production order and our tooling arrives. We view the coal car business as a strategic market and expect consistent long term demand. During the late 2005 and early 2006, we will prove out our new production methods. We may elect to increase our capacity by installing another production line.

We are approaching the intermodal railcar market with a similar game plan. During 2003, we re-started our intermodal production line. In the third quarter of 2004, we sold a large order of railcars to one customer and trained additional workers to increase our production run rate. We recently received a duplicate order from the same customer which will extend our production for this type of equipment into 2006. We will use this long production run to perfect our productivity and enhance our overall competitiveness in this type of car. By concentrating on early stage growth and then transitioning to productivity improvements, we will be highly competitive when we shift to market share growth.

As for the company as a whole, I am excited about our barge litigation and the barge market, the strength of the construction market as well as the overall performance of our leasing company. I’m very optimistic about the improvements we are making this year.

At this point I’ll turn it over to Steve Menzies for his comments.

Exhibit 99.4

Trinity Industries, Inc
Analysts Conference Call
May 4, 2005
Comments by Steve Menzies

Thank you, Tim. Good morning! This morning I’ll make a few comments about the railcar market and, then, a few remarks about our leasing and management services business.

Demand for railcars in North America remained strong in the lst quarter as more than 17,600 railcars were ordered, continuing the pace set in 2004 reflecting general economic growth, increased railroad freight loadings and replacement of older, smaller railcars. This compares to the approximately 12,000 railcars ordered in the 4^th quarter of 2004 and the quarterly average of 18,000 railcars ordered during all of 2004.

During the lst quarter, Trinity received more than 3,100 railcar orders. We continue to focus our sales efforts on new railcar orders that meet our pricing requirements and production plans. We received orders during the lst quarter that will extend existing production lines for covered hoppers, autoracks, mill gondolas, coal cars and tank cars. And as Tim mentioned, at the beginning of the 2^nd quarter, we have received an intermodal order extending our production line for this car type into 2006. Current order levels and inquiries indicate continued strong demand for a variety of railcars which support our production plans.

The industry-wide production backlog at the end of the lst quarter was approximately 60,000 railcars. Backlog has remained basically stable during the past three quarters. This indicates that industry order levels are keeping pace with increased industry production and that the supply chain is catching up with the increased demand. Trinity’s railcar production backlog in North America is approximately 17,300 railcars spread across a wide variety of car types.

Trinity Industries Railcar Leasing and Management Services Group continued to grow its railcar fleet, taking delivery of approximately 1000 new railcars during the lst quarter. This represents about 19% of Trinity’s North American lst quarter shipments. Our operating lease fleet has grown to more than 21,000 railcars and includes over 175 customers, many of which have recently begun new business relationships with Trinity Leasing as we expand our leasing and management services business.

In addition to our operating lease fleet, at the end of the lst quarter we provided administrative, maintenance and asset management services to railroads, financial institutions and shipper-owners of railcars for an additional 62,000 railcars. The growth of management services is a complementary strategy to our leasing business in that it allows Trinity to work more closely with its key customers. Our committed lease backlog at the end of the 1^st quarter was approximately 3,200 railcars or 19% of Trinity’s North American production backlog. Our fleet utilization increased to 99.3% compared to 98.3 % at the end of the lst quarter of 2004 and 99.0% at year end 2004 reflecting the strong overall demand for leased railcars. Our average remaining lease term is almost six years. Consistent with high fleet utilization and the strong level of new car building, lease rates continue to rise. Our average fleet lease rate has increased approximately 3% over the last twelve months reflecting strength in renewals and new car lease rates.

I’ll now turn it over to Bill McWhirter.

Exhibit 99.5

Trinity Industries, Inc.
Quarterly Conference Call
May 4, 2005

Comments of William McWhirter II, Vice President and Chief Financial Officer

Thank you Steve and good morning everyone!

My comments relate primarily to the first quarter of 2005. We filed our Form 10-Q this morning. You will find more details there summarizing the quarter. During my remarks, I will provide earnings per share guidance for the second quarter and the full year. Additionally, I will update the previous guidance with regard to operating margins in our Rail Group.

We are pleased with the first quarter 2005 earnings of 11 cents per share as compared with an 8 cents per share loss in the fourth quarter of 2004 and a 25 cents per share loss in the same quarter of the prior year. Revenues for the first quarter of 2005 increased 42% to 647 million dollars over the same quarter last year.

At this time I will discuss the performance of our individual business segments.

Rail Group
In our Rail Group, North American railcar revenues were 112% higher during the first quarter of 2005 compared to the first quarter of 2004. Rail Group sales to Trinity’s Railcar Leasing and Management Services Group were $72.2 million in the first quarter of 2005 with profits of $4.5 million. This compared with sales to Leasing in the first quarter of 2004 of $34.2 million with profits of $3.3 million. These intercompany sales and profits are eliminated in consolidation.

In contrast, our European rail revenues were down 38% in the first quarter of 2005 compared to the same quarter of 2004. Component revenues were flat year over year at approximately $33.0 million.

Our previously forecasted operating margin for the rail segment during the first quarter was 1%. Actual results were 2%. This improvement is primarily due to labor efficiencies as we gain ground on our learning curves faster than anticipated.

Based on our operating performance in the first quarter of 2005, we are adjusting our guidance with regard to operating margins for the Rail Group for the second quarter. This adjustment is from a current range of 3.5% to 4.0% to a new range of 3.5 to 5.0%. At this time, we are not updating the margins on the second half of the year from the previous guidance of 4.5% to 5.0% in the third quarter and 5.5% to 6.0% in the fourth quarter. Included in our assumptions for 2005 are:

• an improving rail market in Europe later in the year,

• achieving production efficiencies in North America, and

• no significant supply problems in steel or other basic materials.

As you know, increasing steel prices have been an on-going issue. During 2004, we developed price escalation clauses for our contracts to cover additional steel cost increases. Approximately 60% of the North American railcar deliveries in the first quarter were under contracts with escalation clauses. As Jim Ivy mentioned in more detail during our conference call last quarter, the effectiveness of our escalation clauses with respect to passing on cost increases is expected to improve throughout 2005. The impact of unrecovered steel cost increases for the first quarter in the Rail Group was approximately $10 million, or about 2.3% of lost operating margin.

Our North American backlog as of March 31, 2005 consisted of approximately 17,300 railcars with an estimated sales value of approximately $1.25 billion. Of the $1.25 billion in backlog revenue, we believe approximately 97% is either subject to escalation or is believed to have a locked in material cost.

Although we do not expect additional significant margin erosion as our backlog is delivered in 2005, overall margins will continue to reflect the impact of the steel and material cost increases that occurred in 2004. As a reminder, we have obligations to deliver 1,000 unspecified car types in 2006 and 2007 that are not reflected in our backlog. These cars are under terms that could cause price escalation that are out of sync with our actual changes in cost and could result in margin growth or erosion

Construction
In our Construction Products Group this quarter, revenues were up on a year-over-year basis by approximately 19%, primarily due to improved pricing to offset raw material increases. Operating profit increased by $4.7 million and margins improved from 1.7% to 4.7% primarily from efficiencies achieved by our Fittings, Bridge and Highway Safety Businesses.

Our Concrete Business has entered the construction season with pricing in place that offsets raw material cost increases. We are experiencing strong demand for our products. Given normal weather conditions, we expect good results from this business.

Our Highway Safety Business is performing well. Both revenue and margins improved this quarter as compared with the same quarter last year. The improvement is due, in part, to the continued increase in sales of our proprietary line of highway safety products, which includes end terminals, crash cushions and cable protection systems. Continued strong demand for our standard products at prices that reflect current steel costs also contributed to this business’ solid performance.

Our Pipe Fittings Business continues to experience a nice rebound and is realizing the cost benefits of previous plant consolidations completed during the past few years.

Our Bridge Girder Business had a profitable quarter this year versus a small loss in the same quarter of last year, and appears poised for a good year. The backlog in this business has grown significantly since the first quarter of 2004.

While these businesses are currently performing well, we believe the passage of the pending Federal Highway Bill will generate improved results in 2006. Our Construction Products Group remains a key part of our earnings diversification strategy.

Inland Barge
The Inland Barge Group’s first quarter was adversely affected by approximately $3.3 million in costs associated with the settlement and agreement in principle of two pending lawsuits and two other unrelated warranty matters. Without the settlement charge, the group would have broken even and appears poised for a recovery. The entire barge backlog as of March 31, 2005, is under escalation clauses or locked in steel prices and as such is 100% covered.

On the tank barge side of the business, we continue to enjoy a strong backlog, and are currently taking orders for 2006 deliveries.

We mentioned in our last conference call that our hopper barge customers clearly need additional units, but were delaying placing orders. This has now changed. For the quarter, we have received firm orders for 85 units more than all of 2004, and strong verbal commitments indicate the order pace is continuing in the second quarter. As a reminder, we have idled one hopper barge facility. Should market demand continue to improve, we have the flexibility to increase capacity quickly by reopening this facility. As for our barge litigation, discovery and pre-trial proceedings on the remaining two cases are continuing to move through the court system. Litigation expenses continue to erode the performance of this group

Leasing
In our Railcar Leasing and Management Services Business revenues are up on a quarter over quarter basis by $17 million. This is primarily due to four factors: the sale of cars from the fleet, the addition of new cars to the fleet, improved rates and improved utilization. Total operating profit increased by $4.0 million principally due to the car sales. We are currently anticipating net fleet additions of between $325 and $375 million for 2005 as we continue growing this business segment.

Industrial
I will now review the status of our Industrial Products Group. We are very pleased with this group’s first quarter performance. On a quarter-over-quarter basis, revenues improved by approximately 12% and operating profit improved by $3.8 million. This business continues to benefit from cost-savings improvements we implemented during late 2003 and early 2004, as well as solid demand in Mexico for our products. The backlog for this business is relatively short as most customers do not make long-term product purchases.

Consolidated
On a consolidated basis, SE&A expenses have declined to 7.2% of revenues from 8.0% for the same quarter of the previous year.

Non-Leasing Cap X is projected at approximately $110 million dollars for 2005. Of this amount, approximately $50 million relates to a combination of two projects: the new plant in Mexico and our new aggregates facility which will serve the North Texas marketplace.

We expect earnings per share for the second quarter to range between 25 and 32 cents per share, assuming normal weather conditions.

Overall, our updated company guidance for 2005 is earnings per share of between 90 cents and $1.10 for the full year. Included in our assumptions for the remainder of 2005 are:

• an improving rail market in Europe for the third and fourth quarters,

• continuing to achieve production efficiencies in North America,

• no significant supply problems in steel or components,

• orders in our barge business, which fill out the 2005 capacity

• normal weather conditions

• no unanticipated adverse resolution of legal matters, and

• the deferral of between $30 and $35 million in profit on sales from the Rail Group to the Leasing and Management Services Group;

At this time I will turn the presentation back to Chas for the questions and answers session.