Greenbrier Announces Orders for 5,600 New Railcars Valued at $460 Million
LAKE OSWEGO, Ore., March 3, 2014 /PRNewswire/ -- The Greenbrier Companies, Inc. (NYSE:GBX) announced today that it received new orders in the second fiscal quarter ended February 28, 2014 for 5,600 railcar units valued at approximately $460 million. These orders include a recent award for 1,200 intermodal platforms. Other orders include small cube covered hoppers and tank cars used in the energy sector, automotive-related products, medium and large cube covered hopper cars for the grain and plastic pellet markets, boxcars for paper and forest products markets, and gondola cars for metal and scrap. Current downward trends in railroad train velocity are expected to lead to stronger demand for certain railcar types in the future.
The orders announced today include 1,100 units valued at approximately $130 million received in December 2013 and first reported in Greenbrier's press release dated January 8, 2014. Since September 1, 2013, the beginning of the Company's fiscal year, Greenbrier has received orders for nearly 8,200 railcars in North America and Europe valued at over $690 million.
DEMAND AIDED BY VELOCITY REDUCTIONS
William A. Furman, chairman and chief executive officer of Greenbrier said, "Our business is benefitting from broad-based demand for all of our car types, including increased demand for intermodal platforms as intermodal loadings accelerate and rail velocity slows due to system congestion. An important aspect of the new tank car operating safety standards is the requirement for reduced railway speeds for most trains carrying crude oil. Slower train speed means velocity across the entire network will likely be affected. As velocity on the rails slows, we believe there will be an increase in demand for certain railcar types carried in unit trains, such as grain and intermodal."
TANK CAR OF THE FUTURE
Furman concluded, "As a result of the energy renaissance in the U.S., crude by rail shipments have climbed from 9,500 carloads in 2008 to more than 400,000 carloads in 2013. While 99.97% of these shipments arrive without incident, our common goal should be zero rail incidents. We are pleased that the AAR and DOT have taken steps to make rail transport safer for both our communities and environment with new operating standards. We recently announced our new tank car design which includes a thicker hull, high-flow pressure relief valves, head shields, top fittings protection, and thermal protection. These characteristics of our "tank car of the future" align with the recent request for proposal issued by the BNSF Railway Company to build up to 5,000 tank cars with enhanced safety performance requirements. Additionally we are offering retrofit alternatives for the legacy tank car fleet, including the most recently built CPC-1232 tank cars, with features that will reduce the likelihood of tank cars releasing contents in derailments. Our approach to tank car safety advances both public safety and environmental protection, strengthens the North American tank car fleet and permits safer operations at any speed."
Certain orders in this release are subject to customary documentation and completion of terms.
Greenbrier (www.gbrx.com), headquartered in Lake Oswego, Oregon, is a leading supplier of transportation equipment and services to the railroad industry. Greenbrier builds new railroad freight cars in its four manufacturing facilities in the U.S. and Mexico and marine barges at its U.S. facility. It also repairs and refurbishes freight cars and provides wheels and railcar parts at 36 locations across North America. Greenbrier builds new railroad freight cars and refurbishes freight cars for the European market through both its operations in Poland and various subcontractor facilities throughout Europe. Greenbrier owns approximately 8,100 railcars, and performs management services for approximately 233,000 railcars.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: This press release may contain forward-looking statements, including statements regarding expected new railcar production volumes and schedules, expected customer demand for the Company's products and services, plans to increase manufacturing capacity, restructuring plans, new railcar delivery volumes and schedules, growth in demand for the Company's railcar services and parts business, and the Company's strategic initiatives and future financial performance. Greenbrier uses words such as "anticipates," "believes," "forecast," "potential," "goal," "contemplates," "expects," "intends," "initiatives," "targets," "plans," "projects," "hopes," "seeks," "estimates," "could," "would," "will," "may," "can," "designed to," "foreseeable future" and similar expressions to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to certain risks and uncertainties that could cause actual results to differ materially from in the results contemplated by the forward-looking statements. Factors that might cause such a difference include, but are not limited to, reported backlog is not indicative of our financial results; turmoil in the credit markets and financial services industry; high levels of indebtedness and compliance with the terms of our indebtedness; write-downs of goodwill, intangibles and other assets in future periods; sufficient availability of borrowing capacity; fluctuations in demand for newly manufactured railcars or failure to obtain orders as anticipated in developing forecasts; loss of one or more significant customers; customer payment defaults or related issues; actual future costs and the availability of materials and a trained workforce; failure to design or manufacture new products or technologies or to achieve certification or market acceptance of new products or technologies; steel or specialty component price fluctuations and availability and scrap surcharges; changes in product mix and the mix between segments; labor disputes, energy shortages or operating difficulties that might disrupt manufacturing operations or the flow of cargo; production difficulties and product delivery delays as a result of, among other matters, changing technologies, production of new railcar types, or non-performance of subcontractors or suppliers; ability to obtain suitable contracts for the sale of leased equipment and risks related to car hire and residual values; difficulties associated with governmental regulation, including environmental liabilities; integration of current or future acquisitions; succession planning; all as may be discussed in more detail under the headings "Risk Factors" and "Forward Looking Statements" in our Annual Report on Form 10-K for the fiscal year ended August 31, 2013, and our other reports on file with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's opinions only as of the date hereof. Except as otherwise required by law, we do not assume any obligation to update any forward-looking statements.
SOURCE The Greenbrier Companies, Inc. (GBX)