<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------------------------------------
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
for the quarterly period ended February 29, 2000
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 March 31, 2000 was 14,254,632 shares.
<PAGE>
THE GREENBRIER COMPANIES, INC.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS, UNAUDITED)
<TABLE>
<CAPTION>
February 29, August 31,
2000 1999
------------- -------------
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 35,833 $ 77,161
Restricted cash and investments - 635
Accounts and notes receivable 50,842 47,514
Inventories 119,384 92,495
Investment in direct finance leases 134,077 143,185
Equipment on operating leases 105,500 93,225
Property, plant and equipment 76,731 69,316
Intangibles and goodwill 24,574 4,000
Other 29,431 23,185
------------- -------------
$ 576,372 $ 550,716
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Revolving notes $ 23,978 $ 3,783
Accounts payable and accrued liabilities 146,025 131,474
Deferred participation 52,494 50,439
Deferred income taxes 20,843 17,634
Notes payable 153,337 161,401
Subordinated debt 37,788 37,788
Minority interest 6,196 14,034
Commitments and contingencies (Note 7)
Stockholders' equity:
Preferred stock - $0.001 par value, 25,000 shares
authorized, none outstanding - -
Common stock - $0.001 par value, 50,000 shares
authorized,14,255 outstanding at
February 29, 2000 and August 31, 1999 14 14
Additional paid-in capital 50,495 50,495
Retained earnings 87,695 85,534
Accumulated other comprehensive loss (2,493) (1,880)
------------- -------------
135,711 134,163
------------- -------------
$ 576,372 $ 550,716
============= =============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
2
<PAGE>
THE GREENBRIER COMPANIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS, UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------ ------------------------------
February 29, February 28, February 29, February 28,
2000 1999 2000 1999
------------ ------------- ------------- -------------
<S> <C> <C> <C> <C>
REVENUE
Manufacturing $ 149,387 $ 145,048 $ 241,182 $ 245,122
Leasing and services 23,436 21,892 44,643 41,904
------------ ------------- ------------ -------------
172,823 166,940 285,825 287,026
COST OF REVENUE
Manufacturing 132,070 127,128 212,083 217,521
Leasing and services 12,332 10,339 24,546 18,537
------------ ------------- ------------ -------------
144,402 137,467 236,629 236,058
MARGIN 28,421 29,473 49,196 50,968
OTHER COSTS
Selling and administrative expense 16,184 12,347 28,589 21,792
Interest expense 5,061 5,405 10,039 10,151
------------ ------------- ------------ -------------
21,245 17,752 38,628 31,943
Earnings before income tax expense,
minority interest, equity in unconsolidated
subsidiary and extraordinary charge 7,176 11,721 10,568 19,025
Income tax expense (3,726) (5,592) (5,963) (9,147)
------------ ------------- ------------ -------------
Earnings before minority interest, equity
in unconsolidated subsidiary and
extraordinary charge 3,450 6,129 4,605 9,878
Minority interest (397) (238) (1,144) (895)
Equity in unconsolidated subsidiary 1,250 198 1,266 (28)
------------ ------------- ------------ -------------
Earnings before extraordinary charge 4,303 6,089 4,727 8,955
Extraordinary charge, net of taxes - (938) - (938)
------------ ------------- ------------ -------------
NET EARNINGS $ 4,303 $ 5,151 $ 4,727 $ 8,017
============ ============= ============ =============
Basic earnings per share:
Earnings before extraordinary charge $ 0.30 $ 0.43 $ 0.33 $ 0.63
Extraordinary charge - (0.07) - (0.07)
------------ ------------ ------------ -------------
Net earnings $ 0.30 $ 0.36 $ 0.33 $ 0.56
============ ============= ============ =============
Diluted earnings per share:
Earnings before extraordinary charge $ 0.30 $ 0.43 $ 0.33 $ 0.63
Extraordinary charge - (0.07) - (0.07)
------------ ------------ ------------ -------------
Net earnings $ 0.30 $ 0.36 $ 0.33 $ 0.56
============ ============ ============ =============
Weighted average shares outstanding:
Basic 14,255 14,254 14,255 14,254
Diluted 14,267 14,271 14,295 14,286
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
3
<PAGE>
THE GREENBRIER COMPANIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS, UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
--------------------------------
February 29, February 28,
2000 1999
------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 4,727 $ 8,017
Adjustments to reconcile net earnings to net cash
used in operating activities:
Extraordinary charge - 938
Deferred income taxes 3,209 2,243
Deferred participation 2,055 2,852
Depreciation and amortization 9,522 7,534
Gain on sales of equipment (433) (3,203)
Other (6,975) 1,055
Decrease (increase) in assets:
Accounts and notes receivable (3,302) (27,710)
Inventories (19,907) (21,178)
Intangibles and goodwill 708 (185)
Other (1,622) 673
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities (15,052) 1,249
------------- -------------
Net cash used in operating activities (27,070) (27,715)
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions, net of cash acquired (2,024) (8,553)
Principal payments received under direct finance leases 8,929 8,336
Investment in direct finance leases - (120)
Proceeds from sales of equipment 15,693 25,513
Purchase of property and equipment (46,845) (23,686)
Use of restricted cash and investments 635 15,375
------------- -------------
Net cash provided by (used in) investing activities (23,612) 16,865
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings 25,158 32,102
Repayments of borrowings (13,238) (35,089)
Dividends paid (2,566) (1,710)
Proceeds from stock options - 24
------------- -------------
Net cash provided by (used in) financing activities 9,354 (4,673)
------------- -------------
DECREASE IN CASH AND CASH EQUIVALENTS (41,328) (15,523)
Cash and cash equivalents:
Beginning of period 77,161 41,912
------------- -------------
End of period $ 35,833 $ 26,389
============= =============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 9,241 $ 8,644
Income taxes 1,816 2,969
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
4
<PAGE>
THE GREENBRIER COMPANIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, UNAUDITED)
NOTE 1 - INTERIM FINANCIAL STATEMENTS
The accompanying consolidated financial statements of The Greenbrier
Companies, Inc. and Subsidiaries ("Greenbrier" or the "company") have been
prepared without audit and reflect all adjustments (consisting of normal
recurring accruals) which, in the opinion of management, are necessary for a
fair presentation of the financial position and operating results for the
periods indicated. The results of operations for the three and six-month periods
ended February 29, 2000 are not necessarily indicative of the results to be
expected for the entire year ending August 31, 2000. Certain reclassifications
have been made to the prior year's consolidated financial statements to conform
with the 2000 presentation.
NET EARNINGS PER SHARE - Basic earnings per share ("EPS") excludes potential
dilution, which would occur if additional shares were issued upon exercise of
outstanding stock options, while diluted EPS takes this potential dilution into
account.
PROSPECTIVE ACCOUNTING CHANGES - Statement of Financial Accounting Standards
("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging
Activities," requires that all derivatives be recognized as either assets or
liabilities measured at fair value. Adoption of SFAS No. 133 is currently
proposed to be effective for the company's fiscal year beginning September 1,
2000. Greenbrier is currently evaluating the effect of this statement. In
December 1999 the Securities and Exchange Commission issued Staff Accounting
Bulletin ("SAB") No. 101, "Revenue Recognition in Financial Statements," which
the Company is required to adopt beginning September 1, 2000. Greenbrier is
currently evaluating the effect of SAB No. 101.
MANAGEMENT ESTIMATES - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. This includes evaluation of the remaining
life and recoverability of long-lived assets. Actual results could differ from
such estimates.
INTANGIBLES AND GOODWILL - Intangibles and goodwill are generally
amortized over twelve years using the straight-line method.
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 and notes thereto contained in Greenbrier's
1999 Annual Report incorporated by reference into the company's 1999 Annual
Report on Form 10-K.
NOTE 2 - INVENTORIES
<TABLE>
<CAPTION>
February 29, August 31,
2000 1999
------------- -------------
<S> <C> <C>
Manufacturing supplies and raw materials $ 18,838 $ 10,953
Work-in-process 48,097 66,255
Assets held for sale or refurbishment 52,449 15,287
------------- -------------
$ 119,384 $ 92,495
============= =============
</TABLE>
NOTE 3 - COMPREHENSIVE INCOME
The following is a reconciliation of net earnings to comprehensive income:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
----------------------------- ---------------------------
February 29, February 28, February 29, February 28,
2000 1999 2000 1999
------------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
Net earnings $ 4,303 $ 5,151 $ 4,727 $ 8,017
Foreign currency translation adjustment, net of tax (430) (1,109) (613) (1,035)
------------ ------------- ------------- -----------
Comprehensive income $ 3,873 $ 4,042 $ 4,114 $ 6,982
============ ============= ============= ===========
</TABLE>
5
<PAGE>
THE GREENBRIER COMPANIES, INC
NOTE 4 - SEGMENT INFORMATION
Greenbrier has two reportable segments: manufacturing and leasing and
services. The accounting policies of the segments are the same as those
described in the summary of significant accounting policies in the consolidated
financial statements contained in the company's 1999 Annual Report. Performance
is evaluated based on margin, which is presented on the Consolidated Statements
of Operations. Intersegment sales and transfers are accounted for as if the
sales or transfer were to third parties, that is, at market prices. Intersegment
elimination of manufacturing revenues are reversed when the related railcars are
sold to a third party by the leasing segment.
The information in the following table is derived directly from the segments'
internal financial reports used for corporate management purposes.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
---------------------------- ----------------------------
February 29, February 28, February 29, February 28,
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUE:
Manufacturing $ 145,064 $ 133,178 $ 292,265 $ 263,400
Leasing and services 31,240 30,436 58,167 54,464
Eliminate intersegment (3,481) 3,326 (64,607) (30,838)
------------ ------------ ------------ ------------
$ 172,823 $ 166,940 $ 285,825 $ 287,026
============ ============ ============ ============
</TABLE>
NOTE 5 - NOTES PAYABLE
In February 1999 Greenbrier issued $30,000 of 6.48% senior term notes due
2006 (the "Notes"). Interest on the Notes is payable semi-annually commencing
June 1999 and semi-annual principal payments of $2,800 are required beginning
June 2001. In conjunction with the issuance of the Notes, $22,000 of leasing
equipment notes payable were repaid. The early retirement of this debt resulted
in a $938 extraordinary charge (net of income taxes of $680) in the second
quarter of fiscal 1999 for prepayment penalties and prepaid loan costs.
NOTE 6 - ACQUISITIONS
In December 1999 Greenbrier completed the acquisition of a portion of the
minority investor's interest in the Canadian manufacturing subsidiary utilizing
operating cash flow and available lines of credit. This acquisition was
effective September 1, 1999.
In January 2000 Greenbrier completed the purchase of the Freight Wagon
Division of DaimlerChrysler Rail Systems GmbH located in Siegen, Germany. The
acquired operation provides expertise in the fields of engineering, design,
sales and marketing and project management. It also includes a comprehensive
portfolio of railcar designs certified for the European marketplace; accordingly
a significant portion of the assets acquired are intangibles. The purchase
was initially funded with a cash payment of $1.5 million and assumption of net
liabilities of $20 million. The acquisition was completed utilizing operating
cash flow and available lines of credit. Results of acquired operations have
been included in the accompanying financial statements from the date of
acquisition. Disclosure of the acquisition on a proforma basis, as if it had
taken place on September 1, 1999, is not required as it is not material to
the consolidated financial statements or results of operations.
NOTE 7 - COMMITMENTS AND CONTINGENCIES
Greenbrier is involved as a defendant in litigation in the ordinary course of
business, the outcome of which cannot be predicted with certainty. Litigation
has been initiated by former shareholders of Interamerican Logistics Inc.
("Interamerican"), which was acquired in 1996 and the operations of which were
disposed of in 1998. The plaintiffs allege that Greenbrier violated the
agreements pursuant to which it acquired ownership of Interamerican and seek
damages aggregating $4,500 Canadian. Management believes that any ultimate
liability resulting from litigation will not materially affect the financial
position, results of operations or cash flows of the company.
6
<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. With operations in North America and Europe, 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. In
Europe the company also manufactures new freight cars through the use of
unaffiliated sub-contractors. Such activities are included in the manufacturing
segment. The leasing and services segment owns or manages a fleet of
approximately 36,000 railcars for railroads, institutional investors and other
leasing companies.
Railcars are generally manufactured under firm orders from third parties, and
revenue is recognized when the cars are completed and accepted by the customer.
From time to time Greenbrier commits to manufacture railcars prior to receipt of
firm orders to maintain continuity of manufacturing operations, and railcars
produced in a given period may be delivered in subsequent periods, delaying
revenue recognition. Greenbrier may also build railcars for its own lease fleet.
Revenues do not include sales of new railcars to, or refurbishment services
performed for, the leasing operation since intercompany transactions are
eliminated in preparing the consolidated financial statements. The margin
generated from such sales or refurbishment activity is realized by the leasing
segment over the related life of the asset or upon sale of the equipment.
OVERVIEW
Net earnings for the three and six-month periods ended February 29, 2000 were
$4.3 million or $.30 per diluted share and $4.7 million or $.33 per diluted
share. Net losses from the European operations were $1.9 million for the quarter
and $3.8 million for the six-month period ended February 29, 2000.
In January 2000 Greenbrier completed the purchase of the Freight Wagon
Division of DaimlerChrysler Rail Systems GmbH located in Siegen, Germany. The
acquired operation provides expertise in the fields of engineering, design,
sales and marketing and project management. It also includes a comprehensive
portfolio of railcar designs certified for the European marketplace; accordingly
a significant portion of the assets acquired are intangibles. The acquisition
was completed utilizing operating cash flow and available lines of credit.
Results from the acquired operation, which include freight cars manufactured by
unaffiliated sub-contractors, have been included in the accompanying financial
statements from the date of acquisition.
New railcar delivery and backlog information disclosed herein includes all
facilities, including the joint venture in Mexico that is accounted for by the
equity method and freight cars manufactured by sub-contractors in Europe.
Revenues exclude the joint venture in Mexico, as it is accounted for under the
equity method. Results of this operation are included in Equity in
unconsolidated subsidiary.
THREE MONTHS ENDED FEBRUARY 29, 2000 COMPARED TO THREE MONTHS ENDED FEBRUARY 28,
1999
MANUFACTURING
Manufacturing revenue for the three-month period ended February 29, 2000 was
$149 million compared to $145 million in the corresponding prior period, an
increase of $4 million, or 3%. The current period includes one month of activity
from the newly acquired European operations. Deliveries of new railcars, which
are the primary contributor to revenue, were approximately 2,700 in the current
period compared to 2,000 in the prior comparable period. Railcar deliveries
attributable to the joint venture in Mexico, which is accounted for under the
equity method, increased in the current period as compared to the prior
comparable period.
Manufacturing gross margin was 11.6% for the three months ended February 29,
2000 compared to the prior period gross margin of 12.3%, a decrease of .7%. The
slight decrease is principally a result of lower margins from the European
operations.
The backlog of railcars to be manufactured for sale and lease at all
facilities as of February 29, 2000 was approximately 5,100 railcars with an
estimated value of $330 million compared to 3,900 railcars valued at $260 as of
November 30, 1999. Subsequent to February 29, 2000 additional orders for 1,650
railcars valued at approximately $90 million were received.
7
<PAGE>
THE GREENBRIER COMPANIES, INC.
LEASING AND SERVICES
Leasing and services revenue was $23.4 million for the three months ended
February 29, 2000 an increase of 7% over the $21.9 million recorded in
corresponding prior period. The increase is primarily due to the management of
maintenance contracts offset by lower gains on sales of leased equipment.
Pre-tax earnings realized on the disposition of leased equipment during the
quarter amounted to $363 thousand compared to $600 thousand for the
corresponding prior period.
Leasing and services operating margin was 47% for the three-month period
ended February 29, 2000 compared to 53% in the corresponding prior period. The
decreased margin is primarily due to the reduction in gains on sales and lower
margins on certain maintenance agreements.
OTHER COSTS
Selling and administrative expense increased $4 million, or 33%, to $16
million for the three months ended February 29, 2000 as compared to $12 million
in the prior comparable period. The increase is primarily due to the addition of
the European operations, increased international sales, marketing and business
development costs, and higher employee-related costs.
Income tax expense for the three months ended February 29, 2000 represents an
effective tax rate of 42% on U.S. operations and varying effective tax rates on
foreign operations, consistent with the prior comparable period. The
consolidated effective tax rate of 52% in the current period is primarily a
result of European operating losses for which no tax benefit has been
recognized. The consolidated effective tax rate for the prior comparable period
was 47.7%.
SIX MONTHS ENDED FEBRUARY 29, 2000 COMPARED TO SIX MONTHS ENDED FEBRUARY 28,
1999
MANUFACTURING
Manufacturing revenue for the six month period ended February 29, 2000 was
$241 million compared to $245 million in the corresponding prior period, a
decrease of $4 million or 2%. Deliveries for the current period were 4,100
railcars compared with 3,600 railcars for the prior period. Railcar deliveries
attributable to the joint venture in Mexico, which is accounted for under the
equity method, increased in the current period as compared to the prior
comparable period. The decrease in the revenue resulted primarily from a product
mix with a lower unit sales value.
Manufacturing gross margin of 12% compares favorably to the prior period
gross margin of 11% as a result of improved production efficiencies and
economies of long production runs at North American operations.
LEASING AND SERVICES
Leasing and services revenue increased $3 million, or 7% to $45 million for
the six months ended February 29, 2000 compared to $42 million for the six
months ended February 28, 1999. The increase was primarily due to the management
of maintenance contracts offset by lower gains on sales of leased equipment.
Pre-tax earnings realized on the disposition of leased equipment during the
six-month period ended February 29, 2000 were $419 thousand compared to $3.1
million in the corresponding prior period.
Leasing and services operating margin was 45% for the six months ended
February 29, 2000 compared to 56% for the corresponding period in 1999. The
decreased margin is primarily due to a reduction in gains on sales of leased
equipment and lower margins on certain maintenance agreements.
8
<PAGE>
THE GREENBRIER COMPANIES, INC.
OTHER COSTS
Selling and administrative expense increased $7 million, or 32% to $29
million for the six months ended February 29, 2000 compared to $22 million for
the comparable period in 1999. The increase is primarily due to the addition of
the European operations, increased international sales, marketing and business
development costs, and higher employee-related costs.
Income tax expense for the six months ended February 29, 2000 represents an
effective tax rate of 42% on U.S. operations and varying effective tax rates on
foreign operations. The consolidated effective tax rate of 56% in the current
period is primarily a result of European operating losses for which no tax
benefit has been recognized. The consolidated effective tax rate for the prior
comparable period was 48%.
LIQUIDITY AND CAPITAL RESOURCES
Cash used in operating activities was $27 million for the six month period
ended February 29, 2000 which is consistent with cash used in operating
activities for the six month period ended February 28, 1999. During the six
months ended February 29, 2000 assets held for sale, included in inventory,
increased $37 million principally due to railcars produced and placed on lease
during the quarter that are anticipated to be sold in the third and fourth
quarters of 2000.
Credit facilities aggregated $128 million as of February 29, 2000. A $60
million revolving line of credit is available through May 2001 to provide
working capital and interim financing of equipment for the leasing and services
operations. A $40 million operating line of credit to be used for working
capital is available through February 2002 for U.S. manufacturing operations. A
$21 million (at the February 29, 2000 exchange rate) operating line of credit is
available through April 2000 for working capital for Canadian manufacturing
operations. Operating lines of credit totaling $7 million (at the February 29,
2000 exchange rate) are available principally through December 2000 for working
capital for Polish manufacturing operations. Advances under both the revolving
and operating lines of credit bear interest at rates which vary depending on the
type of borrowing and certain defined ratios. At February 29, 2000 $17 million,
$2 million and $5 million were outstanding under the U.S., Canadian and Polish
manufacturing operating lines. No amounts were outstanding under the leasing
line of credit as of February 29, 2000. Borrowings under these lines are
principally based upon defined levels of receivables, inventory and leased
equipment.
Capital expenditures totaled $47 million for the six months ended February
29, 2000 compared to $24 million for the six months ended February 28, 1999. Of
these capital expenditures, approximately $35 million and $17 million,
respectively, were attributable to leasing and services operations. Leasing and
services capital expenditures for the remainder of 2000 are expected to be
approximately $10 million. Greenbrier regularly sells assets from its lease
fleet, some of which may have been purchased within the current year and
included in capital expenditures.
Approximately $12 million and $7 million of the total capital expenditures
for the six months ended February 29, 2000 and February 28, 1999 respectively,
were attributable to manufacturing operations. Manufacturing capital
expenditures for the remainder of 2000 are expected to be approximately $10
million and will include plant improvements and equipment acquisitions to
further increase capacity, enhance efficiencies and allow for the production of
new products.
Foreign operations give rise to market risks from changes in foreign currency
exchange rates. Greenbrier utilizes foreign currency forward exchange contracts
with established financial institutions to hedge a portion of the risk.
No provision has been made for credit loss due to counterparty non-performance.
At February 29, 2000 forward exchange contracts for the purchase of Canadian
dollars aggregated Canadian $77 million ($53 million US dollars), contracts for
the purchase of Polish zloties aggregated 42 million zloties ($10 million US
dollars) and contracts for the purchase of US dollars aggregated $4 million.
These contacts mature at various dates through December 2000. At February 29,
2000 gains and losses of approximately $1.3 million and $250 thousand
respectively, on such contracts have been deferred and will be recognized in
income concurrent with the hedged transaction.
9
<PAGE>
THE GREENBRIER COMPANIES, INC.
A quarterly dividend of $.09 per share was declared in April 2000, to be paid
in May 2000. Future dividends are dependent upon earnings, capital requirements
and financial condition.
Management expects existing funds and cash generated from operations,
together with borrowings under existing credit facilities, and long-term
financing to be sufficient to fund dividends, working capital needs, planned
capital expenditures, acquisitions and expected debt repayments.
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; currency and other risks associated with international
operations; 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; labor disputes or
operating difficulties which might disrupt manufacturing operations or 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; 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; and the financial condition of principal
customers. Any forward-looking statements should be considered in light of these
factors.
10
<PAGE>
THE GREENBRIER COMPANIES, INC.
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The annual meeting of stockholders of the registrant was held on January
11, 2000.
(b) The meeting involved the election of directors. Proxies for the meeting
were solicited pursuant to Regulation 14A under the Securities Exchange Act
of 1934. There was no solicitation in opposition to management's nominees
as listed in the proxy statement. All of management's nominees were
elected. The following table sets forth information with respect to votes
cast for and against each nominee:
<TABLE>
<CAPTION>
Votes
Votes Against
For Election or Votes Broker
Nominee Election Withheld Abstaining Non-Votes
------- -------------- ----------- ---------- ---------
<S> <C> <C> <C> <C>
Alan James 13,384,695 42,959 - -
William A. Furman 13,387,091 40,563 - -
C. Bruce Ward 13,390,195 37,459 - -
</TABLE>
The term of office for the following directors continued after the meeting:
Victor G. Atiyeh, Benjamin R. Whiteley, Peter K. Nevitt and A. Daniel
O'Neal, Jr.
(c) Stockholders approved the Stock Incentive Plan - 2000 (the "2000 Plan").
The 2000 Plan is intended to provide a means by which selected employees,
directors and consultants may be given an opportunity to acquire stock of
the company. The 2000 Plan was approved by the vote of 11,438,713 shares in
favor, 681,024 shares against, 21,719 shares abstained from voting and
1,286,198 broker non-votes.
(d) Stockholders ratified appointment of Deloitte & Touche LLP as independent
auditors for fiscal 2000. The appointment was approved by the vote of
13,417,595 shares in favor, 7,476 shares against and 2,583 shares abstained
from voting. There were no broker non-votes.
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.
11
<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: April 13, 1999 By: /s/ Larry G. Brady
------------------ ---------------------------
Larry G. Brady
Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS FOR THE QUARTER ENDED FEBRUARY 29,
2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-2000
<PERIOD-START> FEB-29-2000
<PERIOD-END> FEB-29-2000
<CASH> 35,833
<SECURITIES> 0
<RECEIVABLES> 50,842
<ALLOWANCES> 0
<INVENTORY> 119,384
<CURRENT-ASSETS> 0
<PP&E> 76,731
<DEPRECIATION> 0
<TOTAL-ASSETS> 576,372
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 14
<OTHER-SE> 135,697
<TOTAL-LIABILITY-AND-EQUITY> 576,372
<SALES> 0
<TOTAL-REVENUES> 285,825
<CGS> 236,629
<TOTAL-COSTS> 275,257
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,039
<INCOME-PRETAX> 10,568
<INCOME-TAX> 5,963
<INCOME-CONTINUING> 4,727
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,727
<EPS-BASIC> 0.33
<EPS-DILUTED> 0.33
</TABLE>
