Continued growth of the owned leased railcar portfolio
Progresses towards goal of balance sheet optimization
Continued focus of returning capital to shareholders
Reiterates guidance outlook for 2019 earnings growth of between 64-93%
DALLAS--(BUSINESS WIRE)--
Trinity Industries, Inc. (NYSE:TRN) today announced earnings results for
the first quarter ended March 31, 2019.
Financial and Operational Highlights - First
Quarter 2019 (as of March 31, 2019):
-
Reported quarterly earnings from continuing operations per common
diluted share ("EPS") of $0.24, an increase of 167% year over year
-
Reported quarterly revenues from leasing and management services of
$187.1 million with a 41.2% operating profit margin
-
Leasing Group grew the wholly-owned and partially-owned lease fleet to
101,005 units, bringing the total net book value of the lease fleet
(before deferred profit) to $7.2 billion
-
Leasing Group reported lease fleet utilization of 98.4%
- Reported Rail Products Group quarterly revenues of $603.6 million and
an 8.4% operating profit margin
- Rail Products Group reported total railcar backlog of $3.3 billion
- Rail Products Group reported quarterly railcar orders and deliveries
of 3,000 and 4,505, respectively
-
Repurchased approximately 3.5 million shares at a cost of $89.0
million, including the completion of the Company's previously
announced $350 million accelerated share repurchase program
-
Put a new $350 million share repurchase authorization in place for
2019-2020
-
Increased quarterly dividend to $0.17 per common share, an increase of
31%
-
Successfully executed a $528.3 million secured railcar financing
transaction subsequent to quarter-end
“Trinity is off to a good start in 2019 with significant improvement in
year over year earnings per share and quarterly revenue growth across
our business segments,” said Timothy R. Wallace, Trinity’s Chief
Executive Officer and President. “We are making great progress in
enhancing shareholder value. I am pleased with the level of capital the
Company has recently returned to shareholders. This includes a 31%
increase in the company’s quarterly dividend announced in March 2019 and
the completion of the previously announced $350 million accelerated
share repurchase program. In addition, we announced another share
repurchase authorization of $350 million that expires in December 2020.
Recently during the second week of April, we made further progress in
optimizing the balance sheet with a very successful $528 million leased
railcar securitization at a coupon rate of 3.82%.”
Mr. Wallace continued, “Trinity’s businesses performed well during the
quarter. Currently, the general sense of economic uncertainty within our
commercial markets shows signs of improvement. Our Leasing business
maintained a strong level of utilization, increased its operating margin
during the quarter, and grew its wholly and partially-owned lease fleet
by 9% year over year. During the first quarter, our Rail Products team
changed over a number of production lines while delivering a higher
operating margin relative to the fourth quarter. The highway products
business had a good first quarter despite several severe weather-related
events that affected the timing of a number of highway construction
projects. Overall, we continue to expect earnings growth of
approximately 60-90% year over year for 2019. I continue to be very
excited about focusing our resources on growing and improving
TrinityRail’s integrated platform of products and services, as well as
the strength and enthusiasm I see within our organization.”
Consolidated Results
Trinity Industries, Inc. reported net income from continuing operations
attributable to Trinity stockholders of $31.7 million, or $0.24 per
common diluted share, for the first quarter ended March 31, 2019. Net
income from continuing operations attributable to Trinity stockholders
for the same quarter of 2018 was $13.8 million, or $0.09 per common
diluted share. Revenues for the first quarter of 2019 increased to
$604.8 million compared with revenues of $533.2 million for the same
quarter of 2018. Our effective tax rate was lower during the first
quarter of 2019 in comparison to the prior year period primarily due to
lower foreign taxes.
Quarterly Business Group Results
Railcar Leasing and Management Services Group
The Leasing Group's financial performance continues to benefit from
lease fleet growth, and market lease rates for railcars renewing in our
portfolio have improved in recent months. During the quarter, the
Company completed secondary market portfolio sales to our railcar
investment partners, maintaining an important financial partnership and
supporting overall management of portfolio diversification. In the first
quarter of 2019, the Leasing Group increased its revenues and operating
profit to $200.4 million and $85.8 million, respectively, when compared
with $174.6 million and $71.1 million, respectively, in the same quarter
of 2018. The increase in the Leasing Group's revenues was primarily due
to growth in our lease fleet and a higher volume of railcars sold from
the lease fleet, partially offset by lower average lease rates
reflective of the market environment the last few years. The increase in
operating profit for the first quarter was primarily due to growth in
the lease fleet, higher profits from railcar sales and lower rent
expense resulting from the exercise of a purchase option for 6,779
railcars previously under lease, partially offset by increased
depreciation expense associated with lease fleet growth. Total proceeds
from the sale of leased railcars, including sales of railcars owned for
more than one year that are not reported as revenues, were $42.7 million
in the first quarter of 2019 compared with $15.5 million in the first
quarter of 2018. The wholly-owned and partially-owned lease fleet grew
to 101,005 units as of March 31, 2019, an increase of approximately 9%
in comparison to March 31, 2018. Supplemental information for the
Leasing Group is provided in the accompanying tables.
Rail Products Group
During the first quarter of 2019, the Rail Products Group completed
numerous line change-overs required to achieve our planned rail
manufacturing volume increase for 2019. The Rail Products Group reported
revenues of $603.6 million compared with revenues of $588.1 million in
the first quarter of 2018. The improvement in revenues primarily
resulted from growth in our maintenance services business and favorable
railcar product mix changes and pricing compared to the prior year
period, partially offset by lower railcar deliveries in the quarter.
While quarterly segment operating profit and profit margin improved
sequentially as expected, the Rail Products Group reported a decrease in
operating profit and operating profit margin year over year to $50.6
million and 8.4%, respectively, in the first quarter of 2019 compared
with $51.5 million and 8.8%, respectively, in the first quarter of 2018.
The decline in operating profit was primarily due to production
inefficiencies related to changes in the mix of railcars manufactured
during the period and activities undertaken in anticipation of higher
production levels expected in future periods. The Rail Products Group
received orders for 3,000 railcars and delivered 4,505 railcars during
the first quarter of 2019, compared with orders for 4,705 railcars and
deliveries of 5,725 railcars, respectively, in the same quarter last
year. The railcar backlog in the Rail Group decreased during the quarter
to $3.3 billion as of March 31, 2019, representing 26,320 railcars,
compared with a railcar backlog of $3.6 billion as of December 31, 2018,
representing 30,875 railcars.
Effective March 31, 2019, the Company has elected to remove from the
Rail Products Group's backlog contractually committed orders for
approximately 3,050 leased railcars valued at $240 million because of
the financial condition of one of the Leasing Group's customers.
Negotiation of the consideration to be received in exchange for
terminating the underlying leases is ongoing. All of the contracts
removed from the Rail Products Group’s backlog for delivery to the lease
fleet were planned for delivery beyond 2019; therefore, this change is
not expected to have a financial impact in the current year.
All Other Group
In the first quarter of 2019, the All Other Group, which primarily
includes the results of our highway products and logistics businesses,
reported revenues of $86.4 million compared with revenues of $77.3
million in the first quarter of 2018. Operating profit for the All Other
Group was $6.6 million for the first quarter of 2019, compared with
operating profit of $5.8 million in the first quarter of 2018. The
increase in revenues and operating profit was primarily due to increased
demand and higher shipping volumes in our highway products business, as
well as an increase in internal and external shipments by our logistics
business.
Share Repurchases
During the first quarter of 2019, the Company repurchased approximately
3.5 million shares at a cost of $89.0 million. This total includes
approximately 2.6 million shares that were delivered to the Company upon
final settlement of the previously announced accelerated share
repurchase program, which was funded in November 2018, as well as the
repurchase of approximately 0.9 million shares at a cost of $19.0
million under a new $350.0 million share repurchase authorization
approved by the Company's Board of Directors on March 7, 2019.
Quarterly Dividend Increase
In addition to the new share repurchase authorization approved by our
Board of Directors, the Board also approved a 31% increase to our
quarterly dividend from $0.13 per share to $0.17 per share, which will
be payable on April 30, 2019 to stockholders of record as of April 15,
2019.
Secured Railcar Financing Transaction
Subsequent to quarter-end, on April 12, 2019, Trinity Industries Leasing
Company (“TILC”) and Trinity Rail Leasing 2019 LLC (“TRL-2019”), two
wholly-owned subsidiaries of the Company, closed a single-tranche
railcar asset-backed securitization in the aggregate amount of $528.3
million, with a coupon of 3.82% and a weighted average life of
approximately 6.1 years. The transaction is secured by a portfolio of
approximately 8,003 railcars and their associated operating leases. The
obligations of the equipment notes are non-recourse to Trinity and TILC.
Net proceeds received from the transaction will be used to repay
outstanding borrowings under the Leasing Group's secured warehouse
credit facility and the Company's revolving credit facility, and for
general corporate purposes.
“We are very pleased with the successful completion of the recent
asset-backed securitization,” said Melendy E. Lovett, Senior Vice
President and Chief Financial Officer of Trinity Industries. “TRL 2019
is the 17th long-term financing transaction Trinity has completed since
2000, cementing Trinity as the preeminent issuer of railcar asset-back
securitizations. The notes issued in the securitization are rated single
‘A’ by both Standard & Poors and Kroll Bond Rating Agency and are
secured by a diversified portfolio of railcars with a net book value of
$660 million. We continue to believe the debt markets appreciate and
value Trinity’s ability to operate and service high-performing
portfolios of railcar assets through our unique integrated rail
platform.”
2019 Guidance
For the full year 2019, the Company continues to anticipate earnings of
between $1.15 and $1.35 per common diluted share, an increase of 64% to
93% as compared to 2018. Additionally, the Leasing Group expects a net
lease fleet investment of between $1.2 billion and $1.4 billion in 2019.
At this time, the Rail Products Group expects full year 2019 deliveries
of between approximately 23,500 and 25,500 railcars. Additional guidance
information is included in the accompanying tables.
Conference Call
Trinity will hold a conference call at 11:00 a.m. Eastern on April 25,
2019 to discuss its first quarter results. To listen to the call, please
visit the Investor Relations section of the Trinity Industries website, www.trin.net
and select the Events & Presentations menu link. An audio replay may be
accessed through the Company’s website or by dialing (402) 220-7204
until 11:59 p.m. Eastern on May 2, 2019.
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 platform provides railcar leasing and
management services, as well as railcar manufacturing, maintenance and
modifications. 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 Railcar
Leasing and Management Services Group, the Rail Products 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.
- TABLES TO FOLLOW -
|
|
| |
Trinity Industries, Inc. Condensed Consolidated Income Statements
(in millions, except per share amounts)
(unaudited)
|
| | |
|
| | | Three Months Ended
March 31, |
| | | 2019 |
|
| 2018 |
|
Revenues
| | |
$
|
604.8
| | | |
$
|
533.2
| |
|
Operating costs:
| | | | | | |
|
Cost of revenues
| | |
463.4
| | | |
399.9
| |
|
Selling, engineering, and administrative expenses
| | |
59.6
| | | |
73.4
| |
|
(Gains) Losses on dispositions of property:
| | | | | | |
|
Net gains on lease fleet sales
| | |
(7.9
|
)
| | |
(2.1
|
)
|
|
Other
| | |
(2.1
|
)
| | |
(0.1
|
)
|
| | |
513.0
|
| | |
471.1
|
|
|
Operating profit
| | |
91.8
| | | |
62.1
| |
|
Interest expense, net
| | |
51.4
| | | |
42.4
| |
|
Other, net
| | |
0.3
|
| | |
(1.2
|
)
|
|
Income from continuing operations before income taxes
| | |
40.1
| | | |
20.9
| |
|
Provision for income taxes
| | |
8.9
|
| | |
5.7
|
|
|
Net income from continuing operations
| | |
31.2
| | | |
15.2
| |
|
Income (loss) from discontinued operations, net of tax
| | |
(1.1
|
)
| | |
26.4
|
|
|
Net income
| | |
30.1
| | | |
41.6
| |
|
Net income (loss) attributable to noncontrolling interest
| | |
(0.5
|
)
| | |
1.4
|
|
|
Net income attributable to Trinity Industries, Inc. | | |
$
|
30.6
|
| | |
$
|
40.2
|
|
| | | | | |
|
|
Net income attributable to Trinity Industries, Inc. per common share:
| | | | | | |
| | | | | |
|
|
Continuing operations
| | |
$
|
0.24
| | | |
$
|
0.09
| |
|
Discontinued operations
| | |
(0.01
|
)
| | |
0.18
|
|
|
Basic
| | |
$
|
0.23
|
| | |
$
|
0.27
|
|
| | | | | |
|
|
Continuing operations
| | |
$
|
0.24
| | | |
$
|
0.09
| |
|
Discontinued operations
| | |
(0.01
|
)
| | |
0.17
|
|
|
Diluted
| | |
$
|
0.23
|
| | |
$
|
0.26
|
|
|
Weighted average number of shares outstanding:
| | | | | | |
|
Basic
| | |
130.4
| | | |
147.4
| |
|
Diluted
| | |
132.2
| | | |
153.7
| |
| | | | | | | |
|
Trinity is required to utilize the two-class method of accounting when
calculating earnings per share as a result of unvested restricted shares
that have non-forfeitable rights to dividends and are, therefore,
considered to be a participating security. The unvested restricted
shares are excluded from the weighted average number of shares
outstanding for the purposes of determining earnings per share. The
two-class method may result in a lower earnings per share than is
calculated from the face of the income statement. See Earnings Per Share
Calculation table below.
|
|
| |
Trinity Industries, Inc. Condensed Segment Data
(in millions)
(unaudited)
|
| | |
|
| | | Three Months Ended
March 31, |
| Revenues: | | | 2019 |
|
| 2018 |
| Railcar Leasing and Management Services Group | | |
$
|
200.4
| | | |
$
|
174.6
| |
| Rail Products Group | | |
603.6
| | | |
588.1
| |
|
All Other
| | |
86.4
|
| | |
77.3
|
|
|
Segment Totals before Eliminations
| | |
890.4
| | | |
840.0
| |
|
Eliminations - Lease subsidiary
| | |
(270.1
|
)
| | |
(296.1
|
)
|
|
Eliminations - Other
| | |
(15.5
|
)
| | |
(10.7
|
)
|
|
Consolidated Total
| | |
$
|
604.8
|
| | |
$
|
533.2
|
|
| | | | | |
|
| | | Three Months Ended
March 31, |
| Operating profit (loss): | | | 2019 | | | 2018 |
| Railcar Leasing and Management Services Group | | |
$
|
85.8
| | | |
$
|
71.1
| |
| Rail Products Group | | |
50.6
| | | |
51.5
| |
|
All Other
| | |
6.6
|
| | |
5.8
|
|
|
Segment Totals before Eliminations and Corporate Expenses
| | |
143.0
| | | |
128.4
| |
|
Corporate
| | |
(23.6
|
)
| | |
(37.7
|
)
|
|
Eliminations - Lease subsidiary
| | |
(27.2
|
)
| | |
(28.7
|
)
|
|
Eliminations - Other
| | |
(0.4
|
)
| | |
0.1
|
|
|
Consolidated Total
| | |
$
|
91.8
|
| | |
$
|
62.1
|
|
| | | | | | | | | |
|
|
|
Trinity Industries, Inc. Leasing Group Condensed Results of Operations (unaudited) |
|
|
| |
| | | Three Months Ended
March 31, |
| | | 2019 |
|
| 2018 |
| | | ($ in millions) |
|
Revenues:
| | | | | | |
|
Leasing and management
| | |
$
|
187.1
| | | |
$
|
174.6
| |
|
Sales of railcars owned one year or less at the time of sale(1) | | |
13.3
|
| | |
—
|
|
|
Total revenues
| | |
$
|
200.4
| | | |
$
|
174.6
| |
|
Operating profit:
| | | | | | |
|
Leasing and management
| | |
$
|
77.1
| | | |
$
|
69.0
| |
|
Railcar sales(1):
| | | | | | |
|
Railcars owned one year or less at the time of sale
| | |
0.8
| | | |
—
| |
|
Railcars owned more than one year at the time of sale
| | |
7.9
|
| | |
2.1
|
|
|
Total operating profit
| | |
$
|
85.8
| | | |
$
|
71.1
| |
|
Operating profit margin:
| | | | | | |
|
Leasing and management
| | |
41.2
|
%
| | |
39.5
|
%
|
|
Railcar sales
| | | * | | |
*
|
|
Total operating profit margin
| | |
42.8
|
%
| | |
40.7
|
%
|
|
Selected expense information(2):
| | | | | | |
|
Depreciation
| | |
$
|
54.4
| | | |
$
|
45.1
| |
|
Maintenance and compliance
| | |
$
|
27.8
| | | |
$
|
26.4
| |
|
Rent
| | |
$
|
5.5
| | | |
$
|
10.1
| |
|
Selling, engineering, and administrative expenses
| | |
$
|
12.8
| | | |
$
|
12.2
| |
|
Interest
| | |
$
|
46.0
| | | |
$
|
31.5
| |
| | | | | |
|
| | | March 31,
2019 | | | March 31,
2018 |
|
Leasing portfolio information:
| | | | | | |
|
Portfolio size (number of railcars):
| | | | | | |
|
Wholly-owned
| | |
76,365
| | | |
67,935
| |
|
Partially-owned
| | |
24,640
|
| | |
24,660
|
|
| | |
101,005
| | | |
92,595
| |
|
Managed (third-party owned)
| | |
21,725
|
| | |
26,430
|
|
| | |
122,730
| | | |
119,025
| |
|
Portfolio utilization (Company-owned railcars)
| | |
98.4
|
%
| | |
96.1
|
%
|
| | |
|
| | | Three Months Ended
March 31, |
| | | 2019 | | | 2018 |
| | | (in millions) |
|
Proceeds from sales of leased railcars:
| | | | | | |
|
Leasing Group:
| | | | | | |
|
Railcars owned one year or less at the time of sale
| | |
$
|
13.3
| | | |
$
|
—
| |
|
Railcars owned more than one year at the time of sale
| | |
29.4
|
| | |
15.5
|
|
| | |
$
|
42.7
|
| | |
$
|
15.5
|
|
| | | | | | | | | |
|
* Not meaningful
| | | | | | | | | | |
| (1) |
|
The Company recognizes sales of railcars from the lease fleet which
have been owned by the lease fleet for one year or less as revenue.
Sales of railcars from the lease fleet which have been owned by the
lease fleet for more than one year are recognized as a net gain or
loss from the disposal of a long-term asset.
|
| (2) | |
Depreciation, maintenance and compliance, and rent expense are
components of operating profit. Amortization of deferred profit on
railcars sold from the Rail Group to the Leasing Group is included
in the operating profit of the Leasing Group resulting in the
recognition of depreciation expense based on the Company's
original manufacturing cost of the railcars. Interest expense is
not a component of operating profit and includes the effect of
hedges.
|
| |
|
|
|
| |
|
| |
Trinity Industries, Inc. Condensed Consolidated Balance Sheets
(in millions)
(unaudited)
|
| | | | | |
|
| | | March 31,
2019 | | | December 31,
2018 |
|
Cash and cash equivalents
| | |
$
|
73.9
| | | |
$
|
179.2
|
|
Receivables, net of allowance
| | |
370.0
| | | |
276.6
|
|
Income tax receivable
| | |
16.1
| | | |
40.4
|
|
Inventories
| | |
618.4
| | | |
524.7
|
|
Restricted cash
| | |
114.2
| | | |
171.6
|
|
Net property, plant, and equipment
| | |
6,746.8
| | | |
6,334.4
|
| Goodwill | | |
208.8
| | | |
208.8
|
|
Other assets
| | |
265.7
|
| | |
253.5
|
| | |
$
|
8,413.9
|
| | |
$
|
7,989.2
|
| | | | | |
|
|
Accounts payable
| | |
$
|
197.3
| | | |
$
|
212.1
|
|
Accrued liabilities
| | |
336.3
| | | |
368.3
|
|
Debt
| | |
4,466.4
| | | |
4,029.2
|
|
Deferred income
| | |
—
| | | |
17.7
|
|
Deferred income taxes
| | |
752.7
| | | |
743.1
|
|
Other liabilities
| | |
96.1
| | | |
56.8
|
|
Stockholders' equity:
| | | | | | |
| Trinity Industries, Inc. | | |
2,214.5
| | | |
2,210.8
|
|
Noncontrolling interest
| | |
350.6
|
| | |
351.2
|
| | |
2,565.1
|
| | |
2,562.0
|
| | |
$
|
8,413.9
|
| | |
$
|
7,989.2
|
| | | | | | | | |
|
|
|
| |
|
| |
Trinity Industries, Inc. Additional Balance Sheet Information
(in millions)
(unaudited)
|
| | | | | |
|
| | | March 31,
2019 | | | December 31,
2018 |
| Property, Plant, and Equipment | | | | | | |
|
Manufacturing/Corporate:
| | | | | | |
|
Property, plant, and equipment
| | |
$
|
972.7
| | | |
$
|
963.2
| |
|
Accumulated depreciation
| | |
(602.9
|
)
| | |
(592.3
|
)
|
| | |
369.8
|
| | |
370.9
|
|
|
Leasing:
| | | | | | |
|
Wholly-owned subsidiaries:
| | | | | | |
|
Machinery and other
| | |
13.8
| | | |
13.5
| |
|
Equipment on lease
| | |
6,401.6
| | | |
5,934.8
| |
|
Accumulated depreciation
| | |
(1,009.2
|
)
| | |
(971.8
|
)
|
| | |
5,406.2
|
| | |
4,976.5
|
|
|
Partially-owned subsidiaries:
| | | | | | |
|
Equipment on lease
| | |
2,384.0
| | | |
2,371.9
| |
|
Accumulated depreciation
| | |
(573.7
|
)
| | |
(557.2
|
)
|
| | |
1,810.3
|
| | |
1,814.7
|
|
| | | | | |
|
|
Deferred profit on railcars sold to the Leasing Group | | |
(1,048.9
|
)
| | |
(1,030.0
|
)
|
|
Accumulated amortization
| | |
209.4
|
| | |
202.3
|
|
| | |
(839.5
|
)
| | |
(827.7
|
)
|
| | |
$
|
6,746.8
|
| | |
$
|
6,334.4
|
|
| | | | | | | | | |
|
|
|
| |
|
| |
Trinity Industries, Inc. Additional Balance Sheet Information
(in millions)
(unaudited)
|
| | | | | |
|
| | | March 31,
2019 | | | December 31,
2018 |
| Debt | | | | | | |
|
Corporate - Recourse:
| | | | | | |
|
Revolving credit facility
| | |
$
|
250.0
| | | |
$
|
—
| |
|
Senior notes, net of unamortized discount of $0.3 and $0.3 | | |
399.7
|
| | |
399.7
|
|
| | |
649.7
| | | |
399.7
| |
|
Less: unamortized debt issuance costs
| | |
(2.2
|
)
| | |
(2.3
|
)
|
| | |
647.5
|
| | |
397.4
|
|
|
Leasing:
| | | | | | |
|
Wholly-owned subsidiaries:
| | | | | | |
|
Non-recourse:
| | | | | | |
|
Secured railcar equipment notes
| | |
1,279.9
| | | |
1,301.3
| |
|
TILC warehouse facility
| | |
600.5
| | | |
374.8
| |
|
Promissory notes
| | |
651.9
|
| | |
660.2
|
|
| | |
2,532.3
| | | |
2,336.3
| |
|
Less: unamortized debt issuance costs
| | |
(18.6
|
)
| | |
(19.7
|
)
|
| | |
2,513.7
|
| | |
2,316.6
|
|
|
Partially-owned subsidiaries - non-recourse:
| | | | | | |
|
Secured railcar equipment notes
| | |
1,317.4
| | | |
1,327.9
| |
|
Less: unamortized debt issuance costs
| | |
(12.2
|
)
| | |
(12.7
|
)
|
| | |
1,305.2
|
| | |
1,315.2
|
|
| | |
$
|
4,466.4
|
| | |
$
|
4,029.2
|
|
| | | | | | | | | |
|
|
|
| |
|
| |
Trinity Industries, Inc. Additional Balance Sheet Information
($ in millions)
(unaudited)
|
| | | | | |
|
| | | March 31,
2019 | | | December 31,
2018 |
| Leasing Debt Summary | | | | | | |
|
Total Recourse Debt
| | |
$
|
—
| | | |
$
|
—
| |
|
Total Non-Recourse Debt
| | |
3,818.9
|
| | |
3,631.8
|
|
| | |
$
|
3,818.9
|
| | |
$
|
3,631.8
|
|
|
Total Leasing Debt
| | | | | | |
|
Wholly-owned subsidiaries
| | |
$
|
2,513.7
| | | |
$
|
2,316.6
| |
|
Partially-owned subsidiaries
| | |
1,305.2
|
| | |
1,315.2
|
|
| | |
$
|
3,818.9
|
| | |
$
|
3,631.8
|
|
|
Equipment on Lease(1) | | | | | | |
|
Wholly-owned subsidiaries
| | |
$
|
5,406.2
| | | |
$
|
4,976.5
| |
|
Partially-owned subsidiaries
| | |
1,810.3
|
| | |
1,814.7
|
|
| | |
$
|
7,216.5
|
| | |
$
|
6,791.2
|
|
|
Total Leasing Debt as a % of Equipment on Lease
| | | | | | |
|
Wholly-owned subsidiaries
| | |
46.5
|
%
| | |
46.6
|
%
|
|
Partially-owned subsidiaries
| | |
72.1
|
%
| | |
72.5
|
%
|
|
Combined
| | |
52.9
|
%
| | |
53.5
|
%
|
| | | | | |
|
(1) Excludes net deferred profit on railcars sold to
the Leasing Group.
|
| | | | | |
|
|
|
| |
Trinity Industries, Inc. Condensed Consolidated Cash Flow Statements
(in millions)
(unaudited)
|
| | |
|
| | | Three Months Ended
March 31, |
| | | 2019 |
|
| 2018 |
| Operating activities: | | | | | | |
|
Net income
| | |
$
|
30.1
| | | |
$
|
41.6
| |
|
(Income) loss from discontinued operations, net of income taxes
| | |
1.1
| | | |
(26.4
|
)
|
|
Adjustments to reconcile net income to net cash (used in) provided
by operating activities:
| | | | | | |
|
Depreciation and amortization
| | |
67.5
| | | |
58.2
| |
|
Provision for deferred income taxes
| | |
9.7
| | | |
4.9
| |
|
Net gains on railcar lease fleet sales owned more than one year at
the time of sale
| | |
(7.9
|
)
| | |
(2.1
|
)
|
|
Other
| | |
5.9
| | | |
14.6
| |
|
Changes in operating assets and liabilities:
| | | | | | |
|
(Increase) decrease in receivables
| | |
(69.1
|
)
| | |
13.9
| |
|
(Increase) decrease in inventories
| | |
(93.7
|
)
| | |
(2.2
|
)
|
|
Increase (decrease) in accounts payable and accrued liabilities
| | |
(67.6
|
)
| | |
(26.2
|
)
|
|
Other
| | |
(1.9
|
)
| | |
(2.5
|
)
|
|
Net cash (used in) provided by operating activities - continuing
operations
| | |
(125.9
|
)
| | |
73.8
| |
|
Net cash provided by operating activities - discontinued operations
| | |
—
|
| | |
99.9
|
|
|
Net cash (used in) provided by operating activities
| | |
(125.9
|
)
| | |
173.7
|
|
| Investing activities: | | | | | | |
|
Proceeds from railcar lease fleet sales owned more than one year at
the time of sale
| | |
29.4
| | | |
15.5
| |
|
Proceeds from disposition of property and other assets
| | |
7.3
| | | |
1.9
| |
|
Capital expenditures - leasing, net of sold lease fleet railcars
owned one year or less with a net cost of $12.5 and $0 | | |
(465.0
|
)
| | |
(318.2
|
)
|
|
Capital expenditures - manufacturing and other
| | |
(11.5
|
)
| | |
(8.2
|
)
|
|
(Increase) decrease in short-term marketable securities
| | |
—
| | | |
98.7
| |
|
Other
| | |
1.3
|
| | |
0.8
|
|
|
Net cash used in investing activities - continuing operations
| | |
(438.5
|
)
| | |
(209.5
|
)
|
|
Net cash used in investing activities - discontinued operations
| | |
—
|
| | |
(32.0
|
)
|
|
Net cash used in investing activities
| | |
(438.5
|
)
| | |
(241.5
|
)
|
| Financing activities: | | | | | | |
|
Payments to retire debt
| | |
(214.8
|
)
| | |
(26.5
|
)
|
|
Proceeds from issuance of debt
| | |
649.7
| | | |
0.9
| |
|
Shares repurchased
| | |
(15.0
|
)
| | |
(49.3
|
)
|
|
Dividends paid to common shareholders
| | |
(17.3
|
)
| | |
(19.5
|
)
|
|
Purchase of shares to satisfy employee tax on vested stock
| | |
(0.5
|
)
| | |
(0.1
|
)
|
|
Distributions to noncontrolling interest
| | |
(0.4
|
)
| | |
(5.8
|
)
|
|
Other
| | |
—
|
| | |
(3.0
|
)
|
|
Net cash provided by (used in) financing activities
| | |
401.7
|
| | |
(103.3
|
)
|
|
Net decrease in cash, cash equivalents, and restricted cash
| | |
(162.7
|
)
| | |
(171.1
|
)
|
|
Cash, cash equivalents, and restricted cash at beginning of period
| | |
350.8
|
| | |
973.8
|
|
|
Cash, cash equivalents, and restricted cash at end of period
| | |
$
|
188.1
|
| | |
$
|
802.7
|
|
| | | | | | | | | |
|
|
|
Trinity Industries, Inc.
Earnings per Share
Calculation
(in millions, except per share amounts)
(unaudited)
|
|
|
|
Basic net income attributable to Trinity Industries, Inc. per common
share is computed by dividing net income attributable to Trinity
remaining after allocation to unvested restricted shares by the
weighted average number of basic common shares outstanding for the
period.
|
|
|
|
|
| Three Months Ended March 31, |
| | | 2019 |
|
| 2018 |
| | | (in millions, except per share amounts) |
|
Income from continuing operations
| | |
$
|
31.2
| | | |
$
|
15.2
| |
|
Less: Net (income) loss attributable to noncontrolling interest
| | |
0.5
| | | |
(1.4
|
)
|
|
Unvested restricted share participation - continuing operations
| | |
(0.5
|
)
| | |
(0.4
|
)
|
|
Net income from continuing operations attributable to Trinity
Industries, Inc. | | |
31.2
| | | |
13.4
| |
|
Net income (loss) from discontinued operations, net of income taxes
| | |
(1.1
|
)
| | |
26.4
| |
|
Unvested restricted share participation - discontinued operations
| | |
—
|
| | |
(0.3
|
)
|
|
Net income (loss) from discontinued operations attributable to
Trinity Industries, Inc. | | |
(1.1
|
)
| | |
26.1
|
|
|
Net income attributable to Trinity Industries, Inc. | | |
$
|
30.1
|
| | |
$
|
39.5
|
|
| | | | | |
|
|
Basic weighted average shares outstanding
| | |
130.4
| | | |
147.4
| |
|
Effect of dilutive securities:
| | | | | | |
|
Nonparticipating unvested restricted shares and stock options
| | |
1.8
| | | |
0.9
| |
|
Convertible subordinated notes
| | |
—
|
| | |
5.4
|
|
|
Diluted weighted average shares outstanding
| | |
132.2
|
| | |
153.7
|
|
| | | | | |
|
| Basic earnings per common share: | | | | | | |
|
Income from continuing operations
| | |
$
|
0.24
| | | |
$
|
0.09
| |
|
Income (loss) from discontinued operations
| | |
(0.01
|
)
| | |
0.18
|
|
|
Basic net income attributable to Trinity Industries, Inc. | | |
$
|
0.23
|
| | |
$
|
0.27
|
|
| Diluted earnings per common share: | | | | | | |
|
Income from continuing operations
| | |
$
|
0.24
| | | |
$
|
0.09
| |
|
Income (loss) from discontinued operations
| | |
(0.01
|
)
| | |
0.17
|
|
|
Diluted net income attributable to Trinity Industries, Inc. | | |
$
|
0.23
|
| | |
$
|
0.26
|
|
| | | | | | | | | |
|
|
|
Trinity Industries, Inc.
Reconciliation of EBITDA
(in
millions)
(unaudited)
|
|
|
|
“EBITDA” is defined as net income plus interest expense, income
taxes, and depreciation and amortization including goodwill
impairment charges. EBITDA is not a calculation based on generally
accepted accounting principles. The amounts included in the EBITDA
calculation are, however, derived from amounts included in the
historical consolidated 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
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
March 31, |
| | | 2019 |
|
| 2018 |
|
Net income
| | |
$
|
30.1
| | | |
$
|
41.6
|
|
Add:
| | | | | | |
|
Interest expense
| | |
52.7
| | | |
46.3
|
|
Provision for income taxes
| | |
8.9
| | | |
5.7
|
|
Depreciation and amortization expense
| | |
67.5
|
| | |
58.2
|
|
Earnings before interest expense, income taxes, and depreciation and
amortization expense
| | |
$
|
159.2
|
| | |
$
|
151.8
|
| | | | | | | | |
|
|
|
|
| |
Trinity Industries, Inc. 2019 Full Year Guidance and Outlook
(unaudited)
| | | | |
| | | |
|
| Total Company:
| | | | |
|
Total earnings per share(1) | | | | $1.15 - $1.35 per share
|
|
Corporate expense
| | | | $110 - $120 million |
|
Interest expense, net
| | | | $220 - $230 million |
|
Estimated tax rate
| | | |
26.0%
|
| | | |
|
| Railcar Leasing and Management Services Group:
| | | | |
|
Leasing and Management revenues(2) | | | | $775 - $790 million |
|
Leasing and Management operating profit(3) | | | | $320 - $330 million |
|
Proceeds from sales of leased railcars to RIV partners and secondary
market(4) | | | | $350 million |
| | | |
|
| Rail Products Group:
| | | | |
|
Revenue
| | | | $3.1 - $3.3 billion |
|
Operating margin
| | | |
9.0% - 9.5%
|
|
Railcar deliveries
| | | |
23,500 to 25,500 railcars
|
|
Revenue elimination from sales to Leasing Group(5) | | | | $1.5 billion |
|
Operating profit elimination from sales to Leasing Group(5) | | | | $175 million |
| | | |
|
| | | |
|
|
All Other Group Operating Profit (6) | | | | $18 - $22 million |
| | | |
|
|
| |
| (1) | |
The range for earnings per share guidance reflects variability in
the point estimates provided above for each business segment.
|
| (2) | |
Excludes sales of railcars owned one year or less at time of sale.
|
| (3) | |
Excludes operating profit from railcar sales.
|
| (4) | |
Excludes approximately $160 million of proceeds from transactions
currently expected to be accounted for as sales-type leases;
however, the operating profit impact of these transactions has
been factored into our full year 2019 EPS guidance.
|
| (5) | |
Revenue and operating profit eliminations from sales to the Leasing
Group include maintenance services in addition to railcar sales.
|
| (6) | |
Includes Highway Products and Logistics businesses, as well as
facilities engineering and non-operating plant expenses.
|
| |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20190424006031/en/
Investor & Media Contact:
Jessica
Greiner
Vice President, Investor Relations and Communications
Trinity
Industries, Inc.
(Investors) 214/631-4420
(Media Line) 214/589-8909
Source: Trinity Industries, Inc.