<PAGE>
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 May 31, 1998
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 June 30, 1998 was 14,244,635
shares.
<PAGE>
THE GREENBRIER COMPANIES, INC.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts, unaudited)
May 31, August 31,
1998 1997
--------- ---------
Assets
Cash and cash equivalents $ 36,395 $ 14,384
Restricted cash and investments 15,348 7,360
Accounts and notes receivable 63,300 61,024
Manufacturing inventories 53,845 87,233
Leasing equipment held for
refurbishment or sale 2,538 64,358
Investment in direct finance leases 165,348 182,421
Equipment on operating leases 95,722 102,120
Property, plant and equipment 47,983 44,925
Prepaid expenses and other 14,792 16,693
--------- ---------
$ 495,271 $ 580,518
========= =========
Liabilities and Stockholders' Equity
Revolving notes $ - $ 57,709
Accounts payable and accrued liabilities 121,872 107,738
Deferred participation 43,771 39,032
Deferred income taxes 12,052 13,909
Notes payable 154,348 201,786
Subordinated debt 37,932 38,089
Minority interest 9,348 18,183
Commitments and contingencies (Note 6)
Stockholders' equity
Preferred stock - $0.001 par value,
25,000 shares authorized, none issued - -
Common stock - $0.001 par value,
50,000 shares authorized, 14,241 outstanding
at May 31, 1998 14 14
Additional paid-in capital 50,245 49,135
Retained earnings 66,079 54,689
Foreign currency translation adjustment (390) 234
--------- ---------
115,948 104,072
--------- ---------
$ 495,271 $ 580,518
========= =========
The accompanying notes are an integral part of these statements.
<PAGE>
THE GREENBRIER COMPANIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts, unaudited)
Three Months Ended Nine Months Ended
May 31, May 31,
------------------ ------------------
1998 1997 1998 1997
-------- -------- -------- --------
Revenues
Manufacturing $129,899 $ 55,481 $348,874 $231,918
Leasing and services 20,759 27,101 66,786 80,350
-------- -------- -------- --------
Total revenues 150,658 82,582 415,660 312,268
Costs and expenses
Cost of manufacturing sales 116,385 52,084 319,573 214,487
Leasing and services 8,169 11,865 26,418 34,692
Selling and administrative expense:
Manufacturing 5,268 3,696 13,323 11,465
Leasing and services 2,609 4,106 7,141 11,374
Corporate 2,725 1,169 6,840 4,704
-------- -------- -------- --------
10,602 8,971 27,304 27,543
Interest expense:
Manufacturing 584 745 1,945 1,987
Leasing and services 4,475 6,410 14,389 18,215
-------- -------- -------- --------
5,059 7,155 16,334 20,202
Minority interest:
Manufacturing 991 221 1,551 971
Leasing and services - 190 279 933
-------- -------- -------- --------
991 411 1,830 1,904
-------- -------- -------- --------
Total costs and expenses 141,206 80,486 391,459 298,828
Earnings before income tax expense
Manufacturing 6,671 (1,265) 12,482 3,008
Leasing and services 5,506 4,530 18,559 15,136
Corporate (2,725) (1,169) (6,840) (4,704)
-------- -------- -------- --------
9,452 2,096 24,201 13,440
Income tax expense (3,944) (864) (10,257) (5,187)
-------- -------- -------- --------
Earnings from continuing
operations 5,508 1,232 13,944 8,253
Discontinued operations:
Loss on operations (net of tax benefit of
$382 and $1,537 in 1997) - (452) - (2,376)
-------- -------- -------- --------
Net earnings $ 5,508 $ 780 $ 13,944 $ 5,877
======== ======== ======== ========
Basic earnings per share:
From continuing operations $ 0.39 $ 0.09 $ 0.98 $ 0.58
Discontinued operations - (0.03) - (0.16)
-------- -------- -------- --------
Net earnings $ 0.39 $ 0.06 $ 0.98 $ 0.42
======== ======== ======== ========
Diluted earnings per share:
From continuing operations $ 0.38 $ 0.09 $ 0.97 $ 0.58
Discontinued operations - (0.03) - (0.16)
-------- -------- -------- --------
Net earnings $ 0.38 $ 0.06 $ 0.97 $ 0.42
======== ======== ======== ========
Dividends declared per share $ 0.06 $ 0.06 $ 0.18 $ 0.18
Weighted average shares outstanding:
Basic 14,219 14,160 14,189 14,160
Diluted 14,379 14,160 14,333 14,160
The accompanying notes are an integral part of these statements.
<PAGE>
THE GREENBRIER COMPANIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
Nine Months Ended
May 31,
-----------------------
1998 1997
--------- ---------
Cash flows from operating activities
Net earnings $ 13,944 $ 5,877
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Deferred income taxes (1,857) 149
Deferred participation 4,739 5,438
Depreciation and amortization 11,459 21,470
Gain on sales of equipment (6,666) (7,436)
Other 844 (335)
Decrease (increase) in assets:
Accounts and notes receivable (2,566) 43,460
Inventories 29,904 (14,582)
Prepaid expenses and other 1,450 (5,590)
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities 8,059 (12,889)
--------- ---------
Net cash provided by operating activities 59,310 35,562
--------- ---------
Cash flows from investing activities
Principal payments received under direct
finance leases 11,254 9,546
Investment in direct finance leases (574) (11,525)
Proceeds from sales of equipment 112,889 35,074
Purchase of property and equipment (38,411) (58,137)
Investment in restricted cash and
investments (7,988) (11,770)
--------- ---------
Net cash provided by (used in) investing
activities 77,170 (36,812)
--------- ---------
Cash flows from financing activities
Proceeds from borrowings 1,436 39,408
Repayments of borrowings (106,644) (20,610)
Purchase of minority interest (7,772) (16,333)
Dividends (2,554) (2,549)
Proceeds from stock options 1,065 -
--------- ---------
Net cash used in financing activities (114,469) (84)
--------- ---------
Increase (decrease) in cash
and cash equivalents 22,011 (1,334)
Cash and cash equivalents
Beginning of period 14,384 6,083
--------- ---------
End of period $ 36,395 $ 4,749
========= =========
Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest $ 16,563 $ 17,275
Income taxes 9,600 2,876
Supplemental schedule of noncash investing and
financing activities
Purchase of minority interest $ 1,580 $ 2,024
Equipment obtained through borrowings - 4,024
Repayment of borrowings through return of railcars
held for refurbishment or sale 96 11,574
The accompanying notes are an integral part of these statements.
<PAGE>
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 May 31, 1998 and for the nine months ended May 31, 1998 and
1997 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 nine months ended May 31, 1998 are
not necessarily indicative of the results to be expected for the
entire year ending August 31, 1998.
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 1997 Annual Report
incorporated by reference into the company's 1997 Annual Report on
Form 10-K.
Note 2 - MANUFACTURING INVENTORIES
May 31, August 31,
1998 1997
---------- ----------
Supplies and raw materials $ 6,503 $ 5,999
Work-in-process 43,131 42,582
Held for sale 4,211 38,652
---------- ----------
$ 53,845 $ 87,233
========== ==========
Note 3 - DISCONTINUED OPERATIONS AND DIVESTITURES
During 1997 a plan was adopted to focus on core business
operations of railcar manufacturing and refurbishment, and related
leasing and services. Under the plan, the third-party
transportation logistics segment was to be discontinued and
accordingly, the results of operations for logistics have been
excluded from continuing operations in the Consolidated Statements
of Operations for all applicable periods. In December 1997 the
sale of a majority of the assets of this segment was completed.
The remainder of the logistics operation is anticipated to be
disposed of during 1998. The plan also included selling the
trailer and container leasing operation. A portion of the trailer
and container fleet was sold during the fourth quarter of 1997. In
October 1997 the sale of substantially all of the remaining
trailer and container fleet, which was included in Leasing
equipment held for refurbishment or sale as of August 31, 1997,
was completed.
Note 4 - SEGMENT INFORMATION
Cash and borrowings are managed on a consolidated basis. Leasing
and services interest income and manufacturing interest expense
eliminated upon consolidation was $428 and $264 for the three
months ended May 31, 1998 and 1997, and $1,190 and $849 for the
nine months ended May 31, 1998 and 1997.
Note 5 - EARNINGS PER SHARE
In February 1997, the Financial Accounting Standards Board issued
SFAS No. 128, Earnings Per Share, which is effective for periods
ending after December 15, 1997. Greenbrier adopted SFAS No. 128
during the quarter ended February 28, 1998 and all earnings per
share amounts for all periods have been restated to conform to the
new requirements. The difference between the number of shares used
to compute basic and diluted earnings per share is the dilutive
effect, if any, of stock options, calculated using the treasury
stock method.
<PAGE>
THE GREENBRIER COMPANIES, INC.
Note 6 - COMMITMENTS AND CONTINGENCIES
Purchase commitments of approximately $17,500 for leasing and
services operating equipment were outstanding as of May 31, 1998.
Greenbrier is involved as a defendant in litigation in the
ordinary course of business, the outcome of which cannot be
predicted with certainty. Recently Greenbrier has been named a
defendant in litigation initiated by former shareholders of
Interamerican Logistics Inc. ("Interamerican"), which was acquired
by Greenbrier in the fall of 1996. The plaintiffs allege that
Greenbrier violated the agreements pursuant to which it acquired
ownership of Interamerican and seek damages aggregating $4
million. Management believes the claim to be without merit and
intends to vigorously defend its position. Management believes
that any ultimate liability resulting from litigation will not
materially affect the financial position or results of operations
of the company.
In May 1998, Greenbrier entered into a letter of intent with
Bombardier Inc. ("Bombardier") to form a joint venture to build
railroad freight cars at Bombardier's existing Concarril
manufacturing facility in Sahugun, Mexico. Greenbrier and
Bombardier will each maintain a 50% interest in the joint venture.
Operations are expected to commence in the first quarter of fiscal
1999 and capacity is anticipated to grow to 3,000 new cars
annually. Required capital expenditures and working capital needs
are expected to be funded by existing operating cash flow and cash
balances.
In March 1998, Greenbrier executed an agreement to acquire a
majority interest in Fabryka Wagonow Swidnica S.A., a railcar and
specialty container manufacturer located in Swidnica, Poland.
Polish investors will maintain a significant ownership interest in
the manufacturer. The acquisition is subject to final approval by
Polish governmental agencies, which is expected by August 31,
1998. The acquisition, if consummated, will establish a European
manufacturing base and is expected to provide access to the
European markets, particularly the market in Poland. Initially,
the Polish facility is not expected to have a material impact on
Greenbrier's overall financial condition and the investment will
be funded through working capital.
<PAGE>
THE GREENBRIER COMPANIES, INC.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Greenbrier currently operates in two primary business segments:
manufacturing and leasing and services. The two business segments
are operationally integrated. The manufacturing segment produces
double-stack intermodal railcars, conventional railcars, marine
vessels and forged steel products and performs railcar
refurbishment and maintenance activities, a portion of which is
for the leasing operation. The leasing and services segment leases
and/or manages a fleet of approximately 27,000 railcars for its
own account or for third parties such as railroads, institutional
investors and other leasing companies. Sales, marketing and new
product development are conducted on an integrated basis.
The following table sets forth information regarding costs and
expenses from continuing operations, expressed as a percentage of
the associated revenue.
Three Months Ended Nine Months Ended
May 31, May 31,
------------------ ------------------
1998 1997 1998 1997
-------- -------- -------- --------
Manufacturing:
Sales 100.0% 100.0% 100.0% 100.0%
Cost of sales 89.6 93.9 91.6 92.5
Selling and administrative
expense 4.1 6.7 3.8 4.9
Interest expense 0.4 1.3 0.6 0.9
Minority interest 0.8 0.4 0.4 0.4
Earnings before income tax
expense 5.1 (2.3) 3.6 1.3
Leasing and services:
Revenues 100.0% 100.0% 100.0% 100.0%
Operating expense 39.3 43.8 39.6 43.2
Selling and administrative
expense 12.6 15.1 10.7 14.1
Interest expense 21.6 23.7 21.5 22.7
Minority interest - 0.7 0.4 1.2
Earnings before income tax
expense 26.5 16.7 27.8 18.8
Corporate expense as a percentage
of total revenues 1.8 1.4 1.6 1.5
Income tax expense as a percentage
of pre-tax earnings 41.7 41.2 42.4 38.6
Net earnings as a percentage of
total revenues 3.7 0.9 3.4 1.9
Three Months Ended May 31, 1998 Compared to Three Months Ended May
31, 1997
Revenues. Manufacturing revenue for the three-month period ended
May 31, 1998 amounted to $130 million on deliveries of 2,200
railcars compared to $55 million on deliveries of 660 railcars in
the corresponding prior period, an increase of $75 million, or
136%. Increased deliveries in the current period were the primary
reason for the improvement in revenue and reflect the increased
market demand for both intermodal and conventional railcars. The
majority of the railcar deliveries in the current period were
double-stack railcars compared to substantially all conventional
railcars in the prior period. The manufacturing backlog of
railcars for sale and lease as of May 31, 1998 was approximately
5,300 railcars with an estimated value of $289 million compared to
6,700 railcars valued at $335 million as of February 28, 1998.
Leasing and services revenue decreased $6 million, or 22%, to $21
million for the quarter ended May 31, 1998 compared to $27 million
for the quarter ended May 31, 1997. The decrease is primarily a
result of the sale of the trailer and container leasing operation
in October 1997 which contributed $6.6 million to revenue in the
prior year.
Pre-tax earnings realized on the disposition of leased equipment
during the quarter amounted to $2.7 million compared to $1.8
million for the corresponding prior period.
<PAGE>
THE GREENBRIER COMPANIES, INC.
Cost of Manufacturing Sales. Cost of sales as a percentage of
manufacturing revenue decreased in the quarter ended May 31, 1998
to 89.6% from 93.9% in the quarter ended May 31, 1997. The margins
in the current quarter benefited from the efficiencies of longer
production runs and the strong market demand for railcars.
Leasing and Services Expense. Leasing and services expense as a
percentage of revenue was 39.3% for the three-month period ended
May 31, 1998 compared to 43.8% in the prior period. The decreased
ratio is primarily due to the sale of the trailer and container
leasing assets, which typically operated at a higher expense ratio
than railcar leasing assets, offset somewhat by higher vehicle
transportation operating costs associated with a recent contract.
Selling and Administrative Expense. Total selling and
administrative expense increased $2 million, or 22%, to $11
million for the three months ended May 31, 1998 compared to $9
million for the comparable prior period. This increase is
primarily due to international business development, sales and
marketing expenses and incentive compensation commensurate with
improved earnings offset to a degree by the winding down of the
trailer and container leasing operations.
Interest Expense. Due to increased liquidity resulting from
equipment sales and improved earnings, borrowings were reduced
resulting in lower interest expense.
Minority Interest. Manufacturing minority interest increased as
a result of improved earnings of the Canadian operation.
Income Tax Expense. The effective U.S. tax rate was slightly
less than 42% in the current period and 42% in the prior period.
The effective Canadian tax rate was 44% in the current period. In
the prior period, the Canadian operations benefited from operating
loss carryforwards.
Nine Months Ended May 31, 1998 Compared to Nine Months Ended May
31, 1997
Revenues. Manufacturing revenue for the nine-month period ended
May 31, 1998 amounted to $349 million on deliveries of 5,800
railcars compared to $232 million on deliveries of 3,100 railcars
in the corresponding prior period, an increase of $117 million, or
50%. Increased deliveries are due to a rebound in the intermodal
transportation industry and an overall strong market demand for
conventional freightcars. In the period ended May 31, 1998, over
50% of total new railcar deliveries were double-stack railcars
while virtually all of the deliveries in the prior period were
conventional railcars.
Leasing and services revenue decreased $14 million, or 17%, for
the nine months ended May 31, 1998 compared to the nine months
ended May 31, 1997. This decrease is primarily due to reduced
revenue from trailer and container leasing operations as
substantially all of these assets were sold in October 1997. The
decrease was partially offset by an increase in revenue from
automobile transportation services.
Pre-tax earnings realized on the disposition of leased equipment
in the normal course of operations during the nine-month period
amounted to $6 million compared to $5.6 million in the
corresponding prior period.
Cost of Manufacturing Sales. Cost of sales as a percentage of
manufacturing revenue decreased for the nine-month period ended
May 31, 1998 to 91.6% from 92.5% in the comparable prior period.
Improved margins for the current period are primarily due to the
efficiencies of longer production runs. The improvements were
offset somewhat by lower margins on production early in the year
due to the highly competitive market environment at the time
orders for that production were received and higher costs of
certain raw materials acquired from a substitute supplier on a
temporary basis.
Leasing and Services Expense. Leasing and services expense as a
percentage of revenue was 39.6% for the period ended May 31, 1998
compared to 43.2% for the corresponding prior period. This
reduction results primarily from the sale of trailer and container
leasing assets during the current period, as these assets
generally operated at a higher expense ratio than railcar leasing
assets, offset somewhat by higher vehicle transportation operating
costs.
<PAGE>
THE GREENBRIER COMPANIES, INC.
Selling and Administrative Expense. Total selling and
administrative expense for the nine months ended May 31, 1998
decreased slightly compared to the corresponding prior period
primarily due to the winding down of the trailer and container
leasing operations. The decrease was offset somewhat by
international business development, sales and marketing expenses
and incentive compensation commensurate with improved earnings.
The prior period also included a $700,000 provision for potential
loss associated with receivables from a lessee of marine
equipment.
Interest Expense. Due to increased liquidity resulting from
equipment sales and improved earnings, borrowings were reduced
resulting in lower interest expense.
Minority Interest. Manufacturing minority interest increased as
a result of improved earnings of the Canadian operation. Leasing
and services minority interest decreased as all of the minority
investors ownership interests were acquired in previous periods.
Income Tax Expense. The effective U.S. tax rate was 42% in the
current and prior period. The effective Canadian tax rate was 44%
in the current period. In the prior period, the Canadian
operations benefited from operating loss carryforwards.
Liquidity and Capital Resources
Cash provided by operations totaled $59 million for the nine-
month period ended May 31, 1998 compared to $36 million for the
corresponding prior period.
Overall liquidity has improved as a result of the sale of
substantially all of the remaining trailer and container fleet and
the sale, in the normal course of business, of a significant group
of railcars on operating lease. These transactions contributed $87
million of the $113 million in proceeds from sales of equipment.
Credit facilities aggregated $121 million as of May 31, 1998. A
$60 million revolving line of credit is available through May 2000
to provide working capital and interim financing of equipment for
the leasing and services operations. Advances under this facility
bear interest at rates which vary depending on the type of
borrowing and certain defined ratios. There were no borrowings
outstanding under this line of credit as of May 31, 1998. A $30
million operating line of credit to be used for working capital
and a $10 million five-year term loan facility to be used for
certain manufacturing capital expenditures are available through
February 2000 and December 1998 for U.S. manufacturing operations.
Borrowings under the line of credit bear interest at rates which
vary depending on the type of borrowing and certain defined
ratios. There were no borrowings outstanding under the operating
line or the term facility as of May 31, 1998. A $17 million (at
the May 31, 1998 exchange rate) operating line of credit, bearing
interest at Canadian prime plus .75%, is available through March
1999 for working capital and certain capital expenditures for
Canadian operations. An additional $4 million five-year term loan
facility is available for capital expenditures. There were no
borrowings outstanding under the operating line or the term
facility as of May 31, 1998.
Capital expenditures totaled $39 million for the nine months
ended May 31, 1998 compared to $74 million for the nine months
ended May 31, 1997. Of these capital expenditures, approximately
$31 million and $67 million, respectively, were attributable to
leasing and services operations. Leasing and services capital
expenditures for the remainder of 1998 are expected to be
approximately $6 million.
Approximately $8 million and $7 million of the total capital
expenditures for the nine months ended May 31, 1998 and 1997 were
attributable to manufacturing operations. Manufacturing capital
expenditures for the remainder of 1998 are expected to be
approximately $3 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 May 31, 1998 forward
exchange contracts outstanding for the purchase of Canadian
dollars were $68 million, maturing at various dates through
February 1999. Realized and unrealized gains and losses from such
off-balance sheet contracts are deferred and recognized in income
concurrent with the hedged transaction.
<PAGE>
THE GREENBRIER COMPANIES, INC.
Dividends of $.06 per share have been paid quarterly beginning in
1995. The most recent quarterly dividend of $.06 per share was
declared in July 1998 to be paid in August 1998.
In May 1998, Greenbrier entered into a letter of intent with
Bombardier Inc. ("Bombardier") to form a joint venture to build
railroad freight cars at Bombardier's existing Concarril
manufacturing facility in Sahugun, Mexico. Greenbrier and
Bombardier will each maintain a 50% interest in the joint venture.
Operations are expected to commence in the first quarter of fiscal
1999 and capacity is anticipated to grow to 3,000 new cars
annually. Required capital expenditures and working capital needs
are expected to be funded by existing operating cash flow and cash
balances.
In March 1998, Greenbrier executed an agreement to acquire a
majority interest in Fabryka Wagonow Swidnica S.A., a railcar and
specialty container manufacturer located in Swidnica, Poland.
Polish investors will maintain a significant ownership interest in
the manufacturer. The acquisition is subject to final approval by
Polish governmental agencies, which is expected by August 31,
1998. The acquisition, if consummated, will establish a European
manufacturing base and is expected to provide access to the
European markets, particularly the market in Poland. Initially,
the Polish facility is not expected to have a material impact on
Greenbrier's overall financial condition and the investment will
be funded through working capital.
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.
Year 2000
Various computer systems and applications are utilized in daily
operations. As part of the normal course of business, these
systems are evaluated and upgraded as necessary. The ability to
accommodate the year 2000 century date change is part of the
evaluation process. The financial impact of any change is not
anticipated to be material to the financial position or results of
operations.
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. The
following are among the factors that could cause actual results or
outcomes to differ materially from the forward-looking statements:
general political, regulatory or economic conditions; changes in
interest rates; business conditions and growth in the surface
transportation industry, both domestic and international; shifts
in market demand; a delay or failure of acquisitions, products or
services to compete successfully; changes in product mix and the
mix between manufacturing and leasing and services revenue;
transportation labor disputes or operating difficulties which
might disrupt the flow of cargo; competitive factors, including
increased competition, new product offerings by competitors and
price pressures; actual future costs and availability of materials
and a trained workforce; labor disputes; production difficulties
and product delivery delays in the future as a result of, among
other matters, changing process technologies and increasing
production; lower than expected customer orders; the ability to
consummate expected sales; delays in receipt of orders or
cancellation of orders; financial condition of principal
customers; and the impact of year 2000 compliance by the company
or by its customers, suppliers or service partners. Any forward-
looking statements should be considered in light of these factors.
<PAGE>
THE GREENBRIER COMPANIES, INC.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27.1 Financial Data Schedule
(b) Form 8-K
No reports on Form 8-K were filed during the quarter for which
this report is filed.
<PAGE>
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: July 15, 1998 By: /s/ Larry G. Brady
------------------ ------------------------
Larry G. Brady
Senior Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the company's
consolidated financial statements for the quarter ended May 31, 1998 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-END> MAY-31-1998
<CASH> 51,743<F1>
<SECURITIES> 0
<RECEIVABLES> 63,300
<ALLOWANCES> 0
<INVENTORY> 53,845
<CURRENT-ASSETS> 0
<PP&E> 47,983
<DEPRECIATION> 0
<TOTAL-ASSETS> 495,271
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 14
<OTHER-SE> 115,934
<TOTAL-LIABILITY-AND-EQUITY> 495,271
<SALES> 0
<TOTAL-REVENUES> 415,660
<CGS> 345,991
<TOTAL-COSTS> 391,459
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16,334
<INCOME-PRETAX> 24,201
<INCOME-TAX> 10,257
<INCOME-CONTINUING> 13,944
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,944
<EPS-PRIMARY> 0.98
<EPS-DILUTED> 0.97
<FN>
<F1>Of this amount, $15,348 is restricted.
</FN>
</TABLE>
