Reports double-digit growth in revenue,
operating profit, and EPS
Reiterates guidance outlook for 2019
earnings
Provides multi-year ROE performance target
Ongoing return of capital to stockholders
Trinity Industries, Inc. (NYSE:TRN) today announced earnings
results for the second quarter ended June 30, 2019.
Financial and Operational Highlights -
Second Quarter 2019 (as of June 30, 2019):
- Reported quarterly total company revenue of $736.0 million,
reflecting growth of 16% year over year
- Reported quarterly earnings from continuing operations per
common diluted share ("EPS") of $0.29, an increase of 21% year over
year
- Reported quarterly revenues from leasing and management
services of $189.4 million with a 41.0% operating profit
margin
- Leasing Group grew the wholly-owned and partially-owned lease
fleet to 102,140 units, bringing the total net book value of the
lease fleet (before deferred profit) to $7.4 billion
- Leasing Group reported lease fleet utilization of 97.8%
- Rail Products Group reported quarterly revenues of $712.3
million and a 9.5% operating profit margin
- Rail Products Group reported quarterly railcar orders and
deliveries of 2,105 and 5,255, respectively, resulting in total
railcar backlog of $2.9 billion at quarter-end
- Successfully executed a $528.3 million secured railcar
financing transaction during the quarter
- Repurchased approximately 2.1 million shares at a cost of $44.0
million
“Trinity’s second quarter results reflect the benefits of the
integrated rail platform, producing valuable recurring revenues
from our growing lease fleet and profiting from a healthy level of
new railcar production,” said Timothy R. Wallace, Trinity’s Chief
Executive Officer and President. “Economic headlines continued to
impede railcar demand momentum during the quarter. There were a
number of transactions in the market for new railcars during the
second quarter where the economic terms did not align with the
financial criteria we have established. Our commercial decisions
resulted in a lower level of railcar orders for the quarter.
Fortunately, we did not have a large need for orders in the second
half of the year. At this point, we expect to deliver at least 35%
more railcars in the second half of the year compared to the first
half of the year.”
Mr. Wallace continued, “Our leasing company has been successful
renewing and reassigning leases to maintain a high level of
utilization. Our railcar manufacturing business delivered 17% more
railcars sequentially during the second quarter. They also
benefitted from a more favorable product mix and better
pricing.”
“Trinity’s shift towards being a rail-focused organization is an
exciting transformation for the company. Trinity has significant
potential to drive returns higher through disciplined growth of our
integrated rail platform while returning substantial capital to
shareholders. We expect to continue making progress on our
financial goals over the next few years through various levers
within our control - operational improvements throughout the
business, optimizing our cost structure and balance sheet,
high-return investments in our railcar lease fleet and adding
value-added services to our platform of businesses,” Mr. Wallace
concluded.
“As part of the new strategic direction for Trinity, Management
and the Board of Directors have focused the goals of the company to
emphasize profit and return on equity improvement,” said Melendy E.
Lovett, Senior Vice President and Chief Financial Officer for
Trinity. “These financial targets build on Trinity’s success in
growing the integrated rail platform. In addition to delivering
improved 2019 profitability, our operational and financial plans
aim to improve our pre-tax return on equity to an initial target
range of 11-13% by the end of 2021. We are very excited about the
potential opportunities in front of Trinity to continue improving
our financial performance and delivering shareholder value.”
Consolidated Results
Trinity Industries, Inc. reported net income from continuing
operations attributable to Trinity stockholders of $37.2 million,
or $0.29 per common diluted share, for the second quarter ended
June 30, 2019. Net income from continuing operations attributable
to Trinity stockholders for the same quarter of 2018 was $35.9
million, or $0.24 per common diluted share. Revenues for the second
quarter of 2019 increased to $736.0 million compared with revenues
of $634.0 million for the same quarter of 2018.
Quarterly Business Group
Results
Railcar Leasing and Management Services Group
In the second quarter of 2019, the Leasing Group increased its
revenues and operating profit to $277.1 million and $104.8 million,
respectively, when compared with $213.4 million and $91.8 million,
respectively, in the same quarter of 2018. The increase in the
Leasing Group's revenues was primarily due to a higher volume of
railcars sold from the lease fleet and growth in the lease fleet,
partially offset by slightly lower quarterly average lease rates
when compared to the second quarter of 2018. The wholly-owned and
partially-owned lease fleet grew to 102,140 units as of June 30,
2019, an increase of approximately 9% in comparison to June 30,
2018. The increase in operating profit for the second quarter was
primarily due to growth in the lease fleet, higher profits from
railcar sales and lower rent expense resulting from our first
quarter purchase of 6,779 railcars that were previously under
lease. These increases were partially offset by higher depreciation
expense associated with lease fleet growth and slightly lower
quarterly average lease rates when compared to the second quarter
of 2018. Total sales of leased railcars were $158.2 million in the
second quarter of 2019 compared with $70.1 million in the second
quarter of 2018; these totals include sales of railcars owned for
more than one year that are not reported as revenues as well as
railcars sold under sales-type leases. Supplemental information for
the Leasing Group is provided in the accompanying tables.
Rail Products Group
The Rail Products Group reported revenues of $712.3 million
during the quarter compared with revenues of $566.2 million in the
second quarter of 2018. Operating profit and operating profit
margin for the Rail Products Group increased to $68.0 million and
9.5%, respectively, in the second quarter of 2019 compared with
$48.5 million and 8.6%, respectively, in the second quarter of
2018. The increase in revenues and operating profit primarily
resulted from favorable railcar pricing and product mix changes
compared to the prior year period and growth in our maintenance
services business. The Rail Products Group received orders for
2,105 railcars and delivered 5,255 railcars during the second
quarter of 2019, compared with orders for 8,320 railcars and
deliveries of 5,105 railcars, respectively, in the same quarter
last year. The railcar backlog in the Rail Products Group decreased
during the quarter to $2.9 billion as of June 30, 2019,
representing 23,170 railcars, compared with a railcar backlog of
$3.3 billion as of March 31, 2019, representing 26,320
railcars.
All Other Group
In the second quarter of 2019, the All Other Group, which
primarily includes the results of our highway products and
logistics businesses, reported revenues of $88.5 million compared
with revenues of $92.2 million in the second quarter of 2018. The
decrease in revenues was primarily due to decreased demand and
lower shipping volumes in our highway products business. Operating
profit for the All Other Group was $6.2 million for the second
quarter of 2019, compared with operating profit of $12.4 million in
the second quarter of 2018. The decline in operating profit was
primarily the result of higher selling, engineering, and
administrative expenses when compared to the prior year period and
gains on dispositions of property recognized in the prior year.
Progress on 2019
Priorities
Net of proceeds from the sales of leased railcars, Trinity has
invested $591.0 million in railcars year to date for the growth of
the leased railcar portfolio. Additionally, Trinity has invested
$34.0 million in manufacturing and other capital expenditures for
both maintenance and expansion.
During the second quarter, the Company announced expansion plans
to develop a full-service railcar maintenance facility in a key
geographic location within the Midwest. Upon completion, the new
$60 million facility will provide a full range of railcar services,
including repairs and maintenance, coatings, cleaning, inspections,
and testing. The expansion of the railcar maintenance business is
expected to enhance customers’ experience by delivering
best-in-class turn times for maintenance events within the railcar
industry, as well as increase the Company’s ability to service the
maintenance requirements of approximately 50% of the lease
fleet.
In connection with the Company's ongoing efforts to optimize its
balance sheet and improve returns, the Leasing Group closed a
$528.3 million railcar asset-backed securitization with a coupon
rate of 3.82% as previously disclosed in April 2019. Proceeds
received from the transaction were used to repay outstanding
borrowings under the Leasing Group's secured warehouse credit
facility and the Company's revolving credit facility, as well as
for general corporate purposes.
During the second quarter of 2019, the Company repurchased
approximately 2.1 million shares at a cost of $44.0 million,
bringing year to date share repurchases to approximately 5.6
million shares at a cost of $133.0 million. The year to date total
includes approximately 2.6 million shares that were delivered to
the Company in the first quarter of 2019 upon final settlement of
the previously announced accelerated share repurchase program,
which was funded in November 2018.
As of June 30, 2019, the Company had a remaining authorization
to repurchase up to $287.0 million, not to exceed 10.7 million
shares, of its common stock under the current repurchase program.
The size of the current share repurchase program, effective through
December 31, 2020, is designed to meet certain IRS safe harbor
guidelines associated with the Company's tax-free spin-off of
Arcosa completed in November 2018.
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 $0.9
billion and $1.1 billion in 2019. At this time, the Rail Products
Group expects full year 2019 deliveries of between approximately
23,000 and 24,500 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
July 25, 2019 to discuss its second 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) 220-7237 until
11:59 p.m. Eastern on August 1, 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.
Trinity Industries, Inc.
Condensed Consolidated Income
Statements
(in millions, except per share
amounts)
(unaudited)
Three Months Ended June
30,
2019
2018
Revenues
$
736.0
$
634.0
Operating costs:
Cost of revenues
578.5
481.9
Selling, engineering, and administrative
expenses
69.8
75.6
Gains on dispositions of property:
Lease fleet sales
(18.7
)
(9.5
)
Other
(0.6
)
(2.0
)
629.0
546.0
Operating profit
107.0
88.0
Interest expense, net
55.4
40.1
Other, net
(0.1
)
(1.9
)
Income from continuing operations before
income taxes
51.7
49.8
Provision for income taxes
14.1
12.5
Net income from continuing operations
37.6
37.3
Income (loss) from discontinued
operations, net of tax
(0.8
)
28.2
Net income
36.8
65.5
Net income attributable to noncontrolling
interest
0.4
1.4
Net income attributable to Trinity
Industries, Inc.
$
36.4
$
64.1
Basic earnings per common share:
Continuing operations
$
0.29
$
0.24
Discontinued operations
(0.01
)
0.19
Basic net income attributable to Trinity
Industries, Inc.
$
0.28
$
0.43
Diluted earnings per common share:
Continuing operations
$
0.29
$
0.24
Discontinued operations
(0.01
)
0.19
Diluted net income attributable to Trinity
Industries, Inc.
$
0.28
$
0.43
Weighted average number of shares
outstanding:
Basic
127.6
146.2
Diluted
129.2
147.0
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 Consolidated Income
Statements
(in millions, except per share
amounts)
(unaudited)
Six Months Ended June
30,
2019
2018
Revenues
$
1,340.8
$
1,167.2
Operating costs:
Cost of revenues
1,041.9
881.8
Selling, engineering, and administrative
expenses
129.4
149.0
Gains on dispositions of property:
Lease fleet sales
(26.6
)
(11.6
)
Other
(2.7
)
(2.1
)
1,142.0
1,017.1
Operating profit
198.8
150.1
Interest expense, net
106.8
82.5
Other, net
0.2
(3.1
)
Income from continuing operations before
income taxes
91.8
70.7
Provision for income taxes
23.0
18.2
Net income from continuing operations
68.8
52.5
Income (loss) from discontinued
operations, net of tax
(1.9
)
54.6
Net income
66.9
107.1
Net income (loss) attributable to
noncontrolling interest
(0.1
)
2.8
Net income attributable to Trinity
Industries, Inc.
$
67.0
$
104.3
Basic earnings per common share:
Continuing operations
$
0.53
$
0.33
Discontinued operations
(0.02
)
0.37
Basic net income attributable to Trinity
Industries, Inc.
$
0.51
$
0.70
Diluted earnings per common share:
Continuing operations
$
0.52
$
0.32
Discontinued operations
(0.01
)
0.36
Diluted net income attributable to Trinity
Industries, Inc.
$
0.51
$
0.68
Weighted average number of shares
outstanding:
Basic
129.0
146.7
Diluted
130.7
150.2
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 June
30,
Revenues:
2019
2018
Railcar Leasing and Management Services
Group
$
277.1
$
213.4
Rail Products Group
712.3
566.2
All Other
88.5
92.2
Segment Totals before Eliminations
1,077.9
871.8
Eliminations - Lease subsidiary
(328.9
)
(228.5
)
Eliminations - Other
(13.0
)
(9.3
)
Consolidated Total
$
736.0
$
634.0
Three Months Ended June
30,
Operating profit (loss):
2019
2018
Railcar Leasing and Management Services
Group
$
104.8
$
91.8
Rail Products Group
68.0
48.5
All Other
6.2
12.4
Segment Totals before Eliminations and
Corporate Expenses
179.0
152.7
Corporate
(30.6
)
(39.9
)
Eliminations - Lease subsidiary
(41.6
)
(24.5
)
Eliminations - Other
0.2
(0.3
)
Consolidated Total
$
107.0
$
88.0
Trinity Industries, Inc.
Condensed Segment Data
(in millions)
(unaudited)
Six Months Ended June
30,
Revenues:
2019
2018
Railcar Leasing and Management Services
Group
$
477.5
$
388.0
Rail Products Group
1,315.9
1,154.3
All Other
174.9
169.5
Segment Totals before Eliminations
1,968.3
1,711.8
Eliminations - Lease subsidiary
(599.0
)
(524.6
)
Eliminations - Other
(28.5
)
(20.0
)
Consolidated Total
$
1,340.8
$
1,167.2
Six Months Ended June
30,
Operating profit (loss):
2019
2018
Railcar Leasing and Management Services
Group
$
190.6
$
162.9
Rail Products Group
118.6
100.0
All Other
12.8
18.2
Segment Totals before Eliminations and
Corporate Expenses
322.0
281.1
Corporate
(54.2
)
(77.6
)
Eliminations - Lease subsidiary
(68.8
)
(53.2
)
Eliminations - Other
(0.2
)
(0.2
)
Consolidated Total
$
198.8
$
150.1
Trinity Industries, Inc.
Leasing Group
Condensed Results of Operations
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2019
2018
2019
2018
($ in millions)
Revenues:
Leasing and management
$
189.4
$
184.2
$
376.5
$
358.8
Sales of railcars owned one year or less
at the time of sale(1) (2)
87.7
29.2
101.0
29.2
Total revenues
$
277.1
$
213.4
$
477.5
$
388.0
Operating profit:
Leasing and management
$
77.7
$
77.9
$
154.8
$
146.9
Railcar sales(1):
Railcars owned one year or less at the
time of sale
8.4
4.4
9.2
4.4
Railcars owned more than one year at the
time of sale
18.7
9.5
26.6
11.6
Total operating profit
$
104.8
$
91.8
$
190.6
$
162.9
Operating profit margin:
Leasing and management
41.0
%
42.3
%
41.1
%
40.9
%
Railcar sales
*
*
*
*
Total operating profit margin
37.8
%
43.0
%
39.9
%
42.0
%
Selected expense information(3):
Depreciation
$
57.8
$
47.0
$
112.2
$
92.1
Maintenance and compliance
$
26.5
$
25.0
$
54.3
$
51.4
Rent
$
4.3
$
9.9
$
9.8
$
20.0
Selling, engineering, and administrative
expenses
$
12.7
$
12.6
$
25.5
$
24.8
Interest
$
50.4
$
32.3
$
96.4
$
63.8
June 30, 2019
June 30, 2018
Leasing portfolio information:
Portfolio size (number of railcars):
Wholly-owned
77,510
69,480
Partially-owned
24,630
24,655
102,140
94,135
Managed (third-party owned)
22,510
27,150
124,650
121,285
Portfolio utilization (Company-owned
railcars)
97.8
%
97.1
%
Six Months Ended June
30,
2019
2018
(in millions)
Proceeds from sales of leased
railcars:
Leasing Group:
Railcars owned one year or less at the
time of sale (2)
$
101.0
$
29.2
Railcars owned more than one year at the
time of sale
99.9
56.4
$
200.9
$
85.6
* 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)Includes revenues associated with sales-type leases of $32.3
million and $34.2 million, respectively, for the three and six
months ended June 30, 2019.
(3)Operating profit includes: depreciation; maintenance and
compliance; rent; and selling, engineering, and administrative
expenses. 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)
June 30, 2019
December 31, 2018
Cash and cash equivalents
$
102.8
$
179.2
Receivables, net of allowance
351.7
276.6
Income tax receivable
21.0
40.4
Inventories
600.5
524.7
Restricted cash
113.7
171.6
Net property, plant, and equipment
6,869.6
6,334.4
Goodwill
208.8
208.8
Other assets
307.8
253.5
$
8,575.9
$
7,989.2
Accounts payable
$
217.7
$
212.1
Accrued liabilities
346.3
368.3
Debt
4,615.9
4,029.2
Deferred income
—
17.7
Deferred income taxes
769.0
743.1
Other liabilities
97.4
56.8
Stockholders' equity:
Trinity Industries, Inc.
2,178.8
2,210.8
Noncontrolling interest
350.8
351.2
2,529.6
2,562.0
$
8,575.9
$
7,989.2
Trinity Industries, Inc.
Additional Balance Sheet
Information
(in millions)
(unaudited)
June 30, 2019
December 31, 2018
Property, Plant, and Equipment
Manufacturing/Corporate:
Property, plant, and equipment
$
988.6
$
963.2
Accumulated depreciation
(607.8
)
(592.3
)
380.8
370.9
Leasing:
Wholly-owned subsidiaries:
Machinery and other
13.8
13.5
Equipment on lease
6,568.2
5,934.8
Accumulated depreciation
(1,031.9
)
(971.8
)
5,550.1
4,976.5
Partially-owned subsidiaries:
Equipment on lease
2,390.7
2,371.9
Accumulated depreciation
(590.1
)
(557.2
)
1,800.6
1,814.7
Deferred profit on railcars sold to the
Leasing Group
(1,078.8
)
(1,030.0
)
Accumulated amortization
216.9
202.3
(861.9
)
(827.7
)
$
6,869.6
$
6,334.4
Trinity Industries, Inc.
Additional Balance Sheet
Information
(in millions)
(unaudited)
June 30, 2019
December 31, 2018
Debt
Corporate - Recourse:
Revolving credit facility
$
—
$
—
Senior notes, net of unamortized discount
of $0.2 and $0.3
399.8
399.7
399.8
399.7
Less: unamortized debt issuance costs
(2.2
)
(2.3
)
397.6
397.4
Leasing:
Wholly-owned subsidiaries:
Non-recourse:
Secured railcar equipment notes
1,787.3
1,301.3
TILC warehouse facility
511.1
374.8
Promissory notes
643.6
660.2
2,942.0
2,336.3
Less: unamortized debt issuance costs
(22.6
)
(19.7
)
2,919.4
2,316.6
Partially-owned subsidiaries -
non-recourse:
Secured railcar equipment notes
1,310.7
1,327.9
Less: unamortized debt issuance costs
(11.8
)
(12.7
)
1,298.9
1,315.2
$
4,615.9
$
4,029.2
Trinity Industries, Inc.
Additional Balance Sheet
Information
($ in millions)
(unaudited)
June 30, 2019
December 31, 2018
Leasing Debt Summary
Total Recourse Debt
$
—
$
—
Total Non-Recourse Debt
4,218.3
3,631.8
$
4,218.3
$
3,631.8
Total Leasing Debt
Wholly-owned subsidiaries
$
2,919.4
$
2,316.6
Partially-owned subsidiaries
1,298.9
1,315.2
$
4,218.3
$
3,631.8
Equipment on Lease(1)
Wholly-owned subsidiaries
$
5,550.1
$
4,976.5
Partially-owned subsidiaries
1,800.6
1,814.7
$
7,350.7
$
6,791.2
Total Leasing Debt as a % of Equipment on
Lease
Wholly-owned subsidiaries
52.6
%
46.6
%
Partially-owned subsidiaries
72.1
%
72.5
%
Combined
57.4
%
53.5
%
(1) Excludes net deferred profit on railcars sold to the Leasing
Group.
Trinity Industries, Inc.
Condensed Consolidated Statements of
Cash Flows
(in millions)
(unaudited)
Six Months Ended June
30,
2019
2018
Operating activities:
Net income
$
66.9
$
107.1
(Income) loss from discontinued
operations, net of income taxes
1.9
(54.6
)
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
138.1
119.7
Provision for deferred income taxes
22.8
19.0
Net gains on railcar lease fleet sales
owned more than one year at the time of sale
(26.6
)
(11.6
)
Other
15.6
24.1
Changes in operating assets and
liabilities:
(Increase) decrease in receivables
(55.7
)
11.0
(Increase) decrease in inventories
(75.8
)
41.9
Increase (decrease) in accounts payable
and accrued liabilities
(46.1
)
(11.5
)
Other
(38.2
)
(25.3
)
Net cash provided by operating activities
- continuing operations
2.9
219.8
Net cash provided by operating activities
- discontinued operations
—
128.5
Net cash provided by operating
activities
2.9
348.3
Investing activities:
Proceeds from railcar lease fleet sales
owned more than one year at the time of sale
99.9
56.4
Proceeds from disposition of property and
other assets
14.3
4.4
Capital expenditures – leasing, net of
sold lease fleet railcars owned one year or less with a net cost of
$91.8 and $24.8
(690.9
)
(503.2
)
Capital expenditures - manufacturing and
other
(34.0
)
(13.5
)
(Increase) decrease in short-term
marketable securities
—
294.5
Other
(1.2
)
1.3
Net cash used in investing activities -
continuing operations
(611.9
)
(160.1
)
Net cash used in investing activities -
discontinued operations
—
(44.3
)
Net cash used in investing activities
(611.9
)
(204.4
)
Financing activities:
Payments to retire debt
(1,044.9
)
(674.5
)
Proceeds from issuance of debt
1,626.9
478.0
Shares repurchased
(59.0
)
(102.2
)
Dividends paid to common shareholders
(39.5
)
(39.3
)
Purchase of shares to satisfy employee tax
on vested stock
(7.9
)
(11.3
)
Distributions to noncontrolling
interest
(0.9
)
(10.3
)
Other
—
(3.2
)
Net cash provided by (used in) financing
activities
474.7
(362.8
)
Net decrease in cash, cash equivalents,
and restricted cash
(134.3
)
(218.9
)
Cash, cash equivalents, and restricted
cash at beginning of period
350.8
973.8
Cash, cash equivalents, and restricted
cash at end of period
$
216.5
$
754.9
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 June
30,
Six Months Ended June
30,
2019
2018
2019
2018
(in millions, except per share
amounts)
Income from continuing operations
$
37.6
$
37.3
$
68.8
$
52.5
Less: Net (income) loss attributable to
noncontrolling interest
(0.4
)
(1.4
)
0.1
(2.8
)
Unvested restricted share participation -
continuing operations
(0.3
)
(0.8
)
(0.9
)
(1.3
)
Net income from continuing operations
attributable to Trinity Industries, Inc.
36.9
35.1
68.0
48.4
Net income (loss) from discontinued
operations, net of income taxes
(0.8
)
28.2
(1.9
)
54.6
Unvested restricted share participation -
discontinued operations
—
(0.3
)
—
(0.6
)
Net income (loss) from discontinued
operations attributable to Trinity Industries, Inc.
(0.8
)
27.9
(1.9
)
54.0
Net income attributable to Trinity
Industries, Inc.
$
36.1
$
63.0
$
66.1
$
102.4
Basic weighted average shares
outstanding
127.6
146.2
129.0
146.7
Effect of dilutive securities:
Nonparticipating unvested restricted
shares and stock options
1.6
0.8
1.7
0.8
Convertible subordinated notes
—
—
—
2.7
Diluted weighted average shares
outstanding
129.2
147.0
130.7
150.2
Basic earnings per common share:
Income from continuing operations
$
0.29
$
0.24
$
0.53
$
0.33
Income (loss) from discontinued
operations
(0.01
)
0.19
(0.02
)
0.37
Basic net income attributable to Trinity
Industries, Inc.
$
0.28
$
0.43
$
0.51
$
0.70
Diluted earnings per common share:
Income from continuing operations
$
0.29
$
0.24
$
0.52
$
0.32
Income (loss) from discontinued
operations
(0.01
)
0.19
(0.01
)
0.36
Diluted net income attributable to Trinity
Industries, Inc.
$
0.28
$
0.43
$
0.51
$
0.68
Trinity Industries, Inc. Reconciliation of EBITDA (in
millions) (unaudited)
“EBITDA” is defined as net income plus interest expense,
provision for 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 June
30,
2019
2018
Net income
$
36.8
$
65.5
Add:
Interest expense
57.0
43.8
Provision for income taxes
14.1
12.5
Depreciation and amortization expense
70.6
61.5
Earnings before interest expense, income
taxes, and depreciation and amortization expense
$
178.5
$
183.3
Six Months Ended June
30,
2019
2018
Net income
$
66.9
$
107.1
Add:
Interest expense
109.7
90.1
Provision for income taxes
23.0
18.2
Depreciation and amortization expense
138.1
119.7
Earnings before interest expense, income
taxes, and depreciation and amortization expense
$
337.7
$
335.1
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
$105 - $115 million
Interest expense, net
$220 - $230 million
Estimated tax rate
26.5%
Railcar Leasing and Management Services
Group:
Leasing and Management revenues(2)
$760 - $775 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
$3.0 - $3.2 billion
Operating margin
9.0% - 9.5%
Railcar deliveries
23,000 to 24,500 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)
$15 - $20 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 sales from transactions that
are being 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/20190724005865/en/
Jessica Greiner Vice President, Investor Relations and
Communications Trinity Industries, Inc. (Investors) 214/631-4420
(Media Line) 214/589-8909
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