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<< Rail News Home: Mechanical

7/14/2004    Freight News

Rail News: Mechanical

Greenbrier more than doubles quarterly revenue, records record rail-car backlog

A stronger U.S. economic recovery and the corresponding growth in railroad freight loadings continues to help fuel profitability for rail-car builder The Greenbrier Cos.

For the third fiscal quarter, which ended May 31, Greenbrier recorded revenue of $225 million, up 63 percent compared with the same period a year earlier and 35 percent compared with second-quarter 2004. At 3,600 units, new rail-car deliveries rose 125 percent compared with 1,600 deliveries for the same period last year. For the year's first three quarters, Greenbrier delivered 7,800 units, a 77.2 percent jump compared with 4,400 for the same 2003 period. (Note: Third-quarter 2004 deliveries include 600 units produced in a prior period for which revenue recognition was deferred until third-quarter 2004.)

For the fiscal year, Greenbrier's new-car deliveries will exceed 10,500 units, compared with the builder's previous 10,000-unit projection, said Mark Rittenbaum, senior vice president and treasurer, in a prepared statement.

Meanwhile, Greenbrier's new rail-car manufacturing backlog in North America and Europe was at a month-end record 14,300 units (valued at $840 million) on June 30, a 47.2 percent increase compared with the 9,700 backlog (valued at $600 million) on May 31. The backlog also comprises car types that "will help assure long, efficient production runs," said Greenbrier President and Chief Executive Officer William Furman, adding that the company's share of the North American new rail-car market backlog was 25 percent as of June 30 while its share of industry capacity was about 15 percent.

The rail-car market’s return isn’t the only reason Greenbrier’s financial picture is bright these days, Furman said.

"As an example, a team was put in place to aggressively manage steel and scrap surcharge issues with customers and suppliers," he said. "The increase in manufacturing margins and pricing on recent orders in backlog reflects the successes realized in this area."

Greenbrier's leasing operations also continues to "realize margin enhancement, as a result of lease extensions at higher lease rates and higher lease fleet utilization," Furman added.

Greenbrier builds freight cars in the United States, Canada and Mexico, and repairs and refurbishes freight cars and wheels at thirteen locations across North America. The company also produces rail castings through an unconsolidated joint venture, and manufactures freight cars through the use of unaffiliated subcontractors.

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