DALLAS--(BUSINESS WIRE)--
Trinity Industries, Inc. (NYSE: TRN) (“Trinity” or the “Company”)
announced today that the Company has entered into an accelerated share
repurchase (“ASR”) program with JPMorgan Chase Bank, National
Association (“JPMorgan”) to repurchase $350 million of its common stock.
The accelerated share repurchase program will complete Trinity’s current
share repurchase authorization for an aggregate of $500 million of its
common stock. Trinity will fund the accelerated share repurchase with
proceeds received from an increase in borrowing under the Amended and
Restated Term Loan Agreement of Trinity Rail Leasing 2017 LLC.
Additionally, today the Company updated its full year 2019 earnings per
share guidance to $1.15 to $1.35 from the range of $0.90 to $1.10, which
was previously provided with the third quarter 2018 earnings
announcement. The guidance was updated due to the projected impact of
the ASR program and orders received for new railcars since the issuance
of the prior guidance. The Company now expects 2019 railcar deliveries
of 23,500 to 25,500 as compared to the prior guidance of 22,500 to
24,000 railcars.
The Company’s previous earnings guidance provided in the third quarter
2018 quarterly earnings announcement did not include the ASR program
announced today. The ASR program is expected to benefit 2019 earnings
per share by approximately $0.13, based on the closing stock price on
November 15, 2018. Through September 30, 2018, Trinity has repurchased
approximately 4.3 million shares for a total of $150 million under the
current authorization. As of October 17, 2018, the company had total
shares outstanding of approximately 146.3 million shares.
“The accelerated share repurchase program and amended leased railcar
financing are consistent with Trinity’s goal to optimize its capital
structure and improve returns through opportunistic investment in the
business, while returning value to shareholders,” said Tim Wallace,
Trinity’s Chairman, Chief Executive Officer and President.
Under the terms of the ASR, Trinity has agreed to repurchase from
JPMorgan $350 million of its common stock, with an initial delivery of
approximately 12.9 million shares, representing approximately 80% of the
notional amount of the ASR based on the closing price of $21.74 on
November 15, 2018. The final number of shares to be repurchased will be
based on the average of Trinity’s daily volume-weighted average stock
price, less a discount, during the term of the ASR program, which is
expected to be completed by the end of the first quarter of 2019. The
ASR program is expected to commence on Monday, November 19, 2018.
The Company amended a previous term loan agreement of Trinity Rail
Leasing 2017 LLC, a Delaware limited liability company ("TRL 2017") and
a limited purpose, indirect wholly-owned subsidiary of the Company,
owned through Trinity Industry Leasing Company. TRL 2017 originally
issued $302.4 million of promissory notes (the "2017 Promissory Notes")
on May 15, 2017, due May 15, 2024. The 2017 Promissory Notes are
obligations of TRL 2017, secured by a portfolio of railcars and
operating leases thereon, certain cash reserves, and other assets, and
are non-recourse to Trinity. TRL 2017 has entered into an Amended and
Restated Term Loan Agreement, which has increased the amount of the 2017
Promissory Notes to $663.0 million. Additionally, TRL 2017 has entered
into an interest rate hedging agreement on which it pays a fixed rate of
interest on 60% of the outstanding principal amount. The remaining 40%
of the outstanding principal amount bears interest at LIBOR plus a
margin for a combined all-in current interest rate of 4.3%, payable
monthly and are now due November 8, 2025.
About Trinity Industries
Trinity Industries, Inc., headquartered in Dallas, Texas, owns
businesses that are leading providers of rail transportation products
and services in North America. Our rail-related businesses market their
railcar products and services under the trade name TrinityRail®. The
TrinityRail integrated business platform provides railcar manufacturing,
maintenance and modifications, as well as railcar leasing and management
services. Trinity also owns businesses engaged in the manufacture of
products used on the nation’s roadways and in traffic control, as well
as logistical and transportation businesses that provide support
services to a variety of industrial manufacturers. Trinity reports its
financial results in three principal business segments: the Rail Group,
the Railcar Leasing and Management Services Group, and the All Other
Group. For more information, visit: 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, including, but not limited to, future
financial and operating performance, future opportunities and any other
statements regarding events or developments that Trinity believes or
anticipates will or may occur in the future. Trinity uses the words
“anticipates,” “assumes,” “believes,” “estimates,” “expects,” “intends,”
“forecasts,” “may,” “will,” “should,” “guidance,” “projected,”
“outlook,” and similar expressions to identify these forward-looking
statements. Forward-looking statements speak only as of the date of this
release, and Trinity expressly disclaims any obligation or undertaking
to disseminate any updates or revisions to any forward-looking statement
contained herein to reflect any change in Trinity’s expectations with
regard thereto or any change in events, conditions or circumstances on
which any such statement is based, except as required by federal
securities laws. Forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from
historical experience or our present expectations, including but not
limited to risks and uncertainties regarding economic, competitive,
governmental, and technological factors affecting Trinity’s operations,
markets, products, services and prices, and such forward-looking
statements are not guarantees of future performance. For a discussion of
such risks and uncertainties, which could cause actual results to differ
from those contained in the forward-looking statements, see “Risk
Factors” and “Forward-Looking Statements” in Trinity’s Annual Report on
Form 10-K for the most recent fiscal year, as may be revised and updated
by Trinity’s Quarterly Reports on Form 10-Q, and Trinity’s Current
Reports on Form 8-K.
View source version on businesswire.com: https://www.businesswire.com/news/home/20181116005036/en/
Jessica L. Greiner
Vice President, Investor Relations and
Communications
Trinity Industries, Inc.
(Investors)
214/631-4420
(Media Line) 214/589-8909
Source: Trinity Industries, Inc.