DALLAS, July 30 /PRNewswire-FirstCall/ -- Trinity Industries, Inc.
(NYSE: TRN) today reported earnings from continuing operations of $85.6
million, or $1.06 per common diluted share for the second quarter ended
June 30, 2008. Earnings from continuing operations for the same quarter of
2007 were $69.0 million, or $0.85 per common diluted share.
Net income for the second quarter of 2008 was $85.6 million, or $1.06 per
common diluted share compared with net income of $68.7 million, or $0.85 per
common diluted share for the same quarter a year ago. The Company's second
quarter earnings increased 25% over the same quarter in 2007.
During the quarter, the Company recorded a pre-tax gain of $10.4 million,
or $0.08 per common diluted share, related to the divestiture of certain
assets in various businesses, compared to a pre-tax gain of $12.4 million, or
$0.10 per common diluted share, in the same quarter of 2007. In addition,
during the quarter the Company recorded net pre-tax income of $3.9 million, or
$0.03 per common diluted share, resulting from ineffective natural gas,
heating oil, and interest rate hedges compared to pre-tax income of $0.5
million from ineffective hedges in the same quarter of 2007.
Revenues for the second quarter of 2008 were $945.5 million compared with
revenues of $892.6 million for the same quarter of 2007.
'We are pleased with our second quarter results which reflect the strength
of our product diversification,' said Timothy R. Wallace, Trinity's Chairman,
CEO, and President. 'Our team of employees remains focused on pursuing
opportunities across our businesses, which has resulted in solid overall
earnings for the Company. Our strong backlogs continued to allow us the
flexibility to schedule our production lines in a highly efficient manner.'
TrinityRail(R) shipped approximately 6,580 railcars and received firm
orders for approximately 7,430 railcars during the second quarter. As of
June 30, 2008, TrinityRail's order backlog totaled approximately $2.4 billion,
representing approximately 28,680 railcars, compared to a railcar order
backlog at June 30, 2007 of approximately $2.8 billion, representing
approximately 33,880 railcars.
Trinity's railcar leasing business, Trinity Industries Leasing Company
('TILC'), continued to grow during the second quarter of 2008. At June 30,
2008, TILC's fleet totaled approximately 41,100 railcars. This compares to a
fleet of approximately 34,670 railcars as of June 30, 2007. The utilization of
the lease fleet at June 30, 2008 was 99.6% compared with 99.5% at June 30,
2007.
During the second quarter, Trinity sold $91.3 million worth of railcars to
TRIP Rail Leasing LLC ('TRIP'); $83.0 million of this total was from Trinity's
railcar manufacturing companies and $8.3 million was from TILC. From TRIP's
inception in June 2007 through June 30, 2008, it has purchased $791.4 million
worth of railcars, including both new car purchases from Trinity's railcar
manufacturing companies and purchases from TILC, and has a remaining
commitment of $608.6 million. All railcar sales to TRIP have firm leases with
independent third parties. Trinity holds a 20% equity ownership in TRIP Rail
Holdings LLC, the member-manager of TRIP. TILC is responsible for managing
TRIP's railcars.
Energy Equipment Group revenues grew 58% during the second quarter over
the same quarter in 2007, and operating profit grew 117%, compared to the same
quarter in 2007, a result of the steady expansion of the structural wind
towers business. Structural wind tower revenues accounted for $106.4 million
of the Energy Equipment Group's total revenues in the second quarter, compared
to $53.1 million in the same quarter of 2007. The structural wind towers
backlog at June 30, 2008 totaled more than $1.5 billion, compared to a backlog
of approximately $0.8 billion at June 30, 2007.
Revenues for the Inland Barge Group grew 25% during the second quarter to
$150.9 million, compared to the same quarter of 2007. Operating profit for the
group was $27.2 million, representing a margin of 18.0%. The Inland Barge
Group's backlog was approximately $755 million as of June 30, 2008, compared
to approximately $677 million as of June 30, 2007. 'We continue to produce
strong margins in the Inland Barge Group as a result of a solid backlog and
the efficiencies associated with long production runs,' Wallace said.
The Construction Products Group's revenues grew 11% over the same quarter
in 2007, while operating profit grew 34%, compared to the same quarter of
2007. This was due to an increase in volume in sales of highway products,
revenues generated by Trinity's relatively new asphalt business, and an
increase in various raw material costs that have resulted in higher sales
prices.
Third Quarter 2008 and Full Year 2008 Earnings Outlook
For the third quarter of 2008, the Company expects earnings from
continuing operations ranging from $0.91 to $0.96 per common diluted share.
For 2008, the Company expects earnings from continuing operations ranging from
$3.45 to $3.55 per common diluted share.
Conference Call
Trinity will hold a conference call at 11:00 a.m. Eastern on July 31, 2008
to discuss its second quarter results. To listen to the call, please visit the
Investor Relations section of the Trinity Industries website,
http://www.trin.net. An audio replay may be accessed through the Company's
website or by dialing (402) 220-0121 until 11:59 p.m. Eastern on August 7,
2008.
Trinity Industries, Inc., headquartered in Dallas, Texas, is a
multi-industry company that owns a variety of market-leading businesses which
provide products and services to the industrial, energy, transportation, and
construction sectors. Trinity reports its financial results in five principal
business segments: the Rail Group, the Railcar Leasing and Management Services
Group, the Inland Barge Group, the Construction Products Group, and the Energy
Equipment Group. For more information, visit: http://www.trin.net.
Some statements in this release, which are not historical facts, are
'forward-looking statements' as defined by the Private Securities Litigation
Reform Act of 1995. Forward-looking statements include statements about
Trinity's estimates, expectations, beliefs, intentions or strategies for the
future, and the assumptions underlying these forward-looking statements.
Trinity uses the words 'anticipates,' 'believes,' 'estimates,' 'expects,'
'intends,' 'forecasts,' 'may,' 'will,' 'should,' and similar expressions to
identify these forward-looking statements. Forward-looking statements involve
risks and uncertainties that could cause actual results to differ materially
from historical experience or our present expectations. For a discussion of
such risks and uncertainties, which could cause actual results to differ from
those contained in the forward-looking statements, see 'Forward-Looking
Statements' in the Company's Annual Report on Form 10-K for the most recent
fiscal year.
- TABLES TO FOLLOW -
Trinity Industries, Inc.
Condensed Consolidated Income Statements
(in millions, except per share amounts)
(unaudited)
Three Months Ended June 30,
2008 2007
Revenues $945.5 $892.6
Operating profit $150.0 $111.1
Other expense 11.6 6.3
Income from continuing
operations before income taxes 138.4 104.8
Provision for income taxes 52.8 35.8
Income from continuing
operations 85.6 69.0
Discontinued operations:
Loss from discontinued
operations, net of benefit for
income taxes of $ - and $(0.1) - (0.3)
Net income $85.6 $68.7
Net income per common share:
Basic:
Continuing operations $1.09 $0.87
Discontinued operations - -
$1.09 $0.87
Diluted:
Continuing operations $1.06 $0.85
Discontinued operations - -
$1.06 $0.85
Weighted average number of
shares outstanding:
Basic 78.8 78.6
Diluted 80.4 80.4
Trinity Industries, Inc.
Condensed Consolidated Income Statements
(in millions, except per share amounts)
(unaudited)
Six Months Ended June 30,
2008 2007
Revenues $1,844.4 $1,721.1
Operating profit $276.2 $219.8
Other expense 29.2 19.1
Income from continuing
operations before income taxes 247.0 200.7
Provision for income taxes 95.8 72.6
Income from continuing
operations 151.2 128.1
Discontinued operations:
Loss from discontinued
operations, net of benefit for
income taxes of $(0.1) and $(0.1) (0.3) (0.3)
Net income $150.9 $127.8
Net income per common share:
Basic:
Continuing operations $1.91 $1.63
Discontinued operations - -
$1.91 $1.63
Diluted:
Continuing operations $1.88 $1.59
Discontinued operations - -
$1.88 $1.59
Weighted average number of
shares outstanding:
Basic 79.0 78.4
Diluted 80.4 80.3
Trinity Industries, Inc.
Condensed Segment Data
(in millions)
(unaudited)
Three Months Ended June 30,
Revenues: 2008 2007
Rail Group $590.6 $599.1
Construction Products Group 219.2 197.3
Inland Barge Group 150.9 120.5
Energy Equipment Group 157.3 99.3
Railcar Leasing and Management
Services Group 86.4 162.5
All Other 18.4 16.9
Eliminations - lease subsidiary (252.6) (283.0)
Eliminations - other (24.7) (20.0)
Consolidated Total $945.5 $892.6
Operating profit (loss): Three Months Ended June 30,
2008 2007
Rail Group $72.4 $96.6
Construction Products Group 21.1 15.8
Inland Barge Group 27.2 6.6
Energy Equipment Group 25.4 11.7
Railcar Leasing and Management
Services Group 36.0 39.5
All Other 5.8 0.6
Corporate (11.8) (9.7)
Eliminations - lease subsidiary (23.1) (50.3)
Eliminations - other (3.0) 0.3
Consolidated Total $150.0 $111.1
Trinity Industries, Inc.
Condensed Segment Data
(in millions)
(unaudited)
Six Months Ended June 30,
Revenues: 2008 2007
Rail Group $1,158.4 $1,167.8
Construction Products Group 388.5 360.5
Inland Barge Group 288.7 229.2
Energy Equipment Group 286.8 190.7
Railcar Leasing and Management
Services Group 206.2 233.4
All Other 36.6 32.5
Eliminations - lease subsidiary (469.3) (455.5)
Eliminations - other (51.5) (37.5)
Consolidated Total $1,844.4 $1,721.1
Operating profit (loss): Six Months Ended June 30,
2008 2007
Rail Group $149.6 $174.7
Construction Products Group 33.3 25.9
Inland Barge Group 53.7 24.0
Energy Equipment Group 43.6 21.8
Railcar Leasing and Management
Services Group 70.1 67.3
All Other 5.5 1.9
Corporate (17.2) (19.7)
Eliminations - lease subsidiary (54.3) (78.5)
Eliminations - other (8.1) 2.4
Consolidated Total $276.2 $219.8
Trinity Industries, Inc.
Condensed Consolidated Balance Sheets
(in millions)
(unaudited) June 30, December 31,
2008 2007
Cash and cash equivalents $210.0 $289.6
Receivables, net of allowance 333.2 296.5
Inventories 717.7 586.7
Net property, plant, and equipment (1) 2,438.0 2,069.8
Other assets 848.2 800.6
$4,547.1 $4,043.2
Accounts payable and accrued liabilities $651.3 $684.3
Debt (2) 1,689.7 1,374.2
Deferred income 67.6 58.4
Deferred income taxes 220.2 142.1
Other liabilities 65.8 57.5
Stockholders' equity 1,852.5 1,726.7
$4,547.1 $4,043.2
(1) Property, Plant, and Equipment
Corporate/Manufacturing:
Property, plant, and equipment $1,090.7 $1,065.6
Accumulated depreciation (569.5) (565.4)
521.2 500.2
Leasing:
Machinery and other 36.1 36.1
Equipment on lease 2,422.2 1,996.7
Accumulated depreciation (202.1) (214.4)
2,256.2 1,818.4
Deferred profit on railcars sold to
the Leasing Group (339.4) (248.8)
$2,438.0 $2,069.8
(2) Debt
Corporate/Manufacturing - Recourse:
Revolving credit facility $ - $ -
Convertible subordinated notes 450.0 450.0
Senior notes 201.5 201.5
Other 3.3 3.1
654.8 654.6
Leasing - Recourse:
Equipment trust certificates 61.4 75.7
Total recourse 716.2 730.3
Leasing - Non-recourse:
Secured railcar equipment notes 327.0 334.1
Warehouse facility 76.3 309.8
Promissory notes 570.2 -
973.5 643.9
$1,689.7 $1,374.2
Trinity Industries, Inc.
Reconciliation of EBITDA
(in millions)
(unaudited)
'EBITDA' is defined as net income (loss) plus interest expense, income
taxes, and depreciation and amortization. EBITDA is not a calculation based on
generally accepted accounting principles. The amounts included in the EBITDA
calculation, however, are derived from amounts included in the historical
statements of operations data. In addition, EBITDA should not be considered as
an alternative to net income or operating income as an indicator of our
operating performance, or as an alternative to operating cash flows as a
measure of liquidity. We have reported EBITDA because we regularly review
EBITDA as a measure of our ability to incur and service debt. In addition, we
believe our debt holders utilize and analyze our EBITDA for similar purposes.
We also believe EBITDA assists investors in comparing a company's performance
on a consistent basis without regard to depreciation and amortization, which
can vary significantly depending upon many factors. However, the EBITDA
measure presented in this press release may not always be comparable to
similarly titled measures by other companies due to differences in the
components of the calculation.
Three Months Ended June 30,
2008 2007
Income from continuing operations $85.6 $69.0
Add:
Interest expense 24.8 18.8
Provision for income taxes 52.8 35.8
Depreciation and
amortization expense 34.1 29.5
Earnings from continuing
operations before interest expense,
income taxes, and depreciation
and amortization expense $197.3 $153.1
Six Months Ended June 30,
2008 2007
Income from continuing operations $151.2 $128.1
Add:
Interest expense 45.8 36.3
Provision for income taxes 95.8 72.6
Depreciation and
amortization expense 65.9 56.0
Earnings from continuing
operations before interest expense,
income taxes, and depreciation
and amortization expense $358.7 $293.0
SOURCE Trinity Industries, Inc.
