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Greenbrier Announces Strong New Railcar Orders Led By Surging Demand For Tank Cars And Automotive-related Products

Stocks in this article: GBX

LAKE OSWEGO, Ore., Jan. 7, 2013 /PRNewswire/ -- Led by strength in tank cars and its automotive-related products, The Greenbrier Companies, Inc. (NYSE: GBX) announced today it is meeting robust demand for new railcars in North American and European markets with orders for over 4,200 units valued at over $430 million since the start of its current fiscal year which began on September 1, 2012. 

Continued strength in North American shale energy markets generated orders for 1,250 of Greenbrier's higher margin tank cars with a value of approximately $160 million.  While Greenbrier has aggressively ramped tank car production over the last year in response to strong demand, order activity in the current fiscal year is diversified across a broad range of railcar types, with current tank car orders representing only 30 percent of all new business since September 1, 2012.

Greenbrier has also received orders in North America and Europe for 1,400 automotive-related products valued at $140 million.  In North America, the Company has received orders for nearly 1,000 automotive racks.  Orders for 89-foot flatcars to support the rack deliveries are anticipated later in the fiscal year.  In Europe, the Company has received orders for more than 400 automotive-related railcars.

Greenbrier is a leading provider of automotive rail solutions in North America and Europe.  It produces the most comprehensive offering of products for the transport of finished vehicles by rail, including Auto-Stack™, Auto-Max™ and Uni-Max™, a new proprietary automotive rack that is adjustable to accommodate a range of vehicle loading requirements. 

Driven by a revitalized U.S. auto industry, automotive rail loadings in North America grew 13.9 percent in calendar 2012, according to the American Association of Railroads.  Analyst projections indicate sustained year-over-year growth in U.S. auto sales through 2015.

"Our enhanced manufacturing flexibility allows Greenbrier to meet the needs of the booming automotive market while maintaining our competitive position in other railcar types like intermodal double stack, gondolas, forest products and covered hoppers where we have historic strength," said William A. Furman, Greenbrier's president and chief executive officer.  "Forest products cars like boxcars and lumber flat cars are now benefitting from recovery in the construction sector." 

"We have also responded to the spike in demand for tank cars for the energy market, targeting an annual build rate in North America of about 3,800 cars per year by December 2013.  The increased rate of tank car production will drive higher volumes and margins in our manufacturing segment, especially in the second half of our current fiscal year.  During our 2012 fiscal year, production of tank cars was approximately 1,000 units.  We expect to be building over 300 tank cars per month at the end of this calendar year," Furman added. " These orders illustrate the benefits now being realized from the expansion of our low-cost and agile manufacturing footprint.  Greenbrier's expanded manufacturing capability furthers our integrated business model which enables us to deliver increased value to railcar customers and sustain financial performance throughout the often volatile railcar business cycle." 

"This strategy, coupled with a more robust leasing model, has allowed us to increase share in the highly attractive energy segment, including frack sand cars and tank cars for oil and chemicals," Furman continued. "We have responded to burgeoning demand in the energy sector by delivering over 11,000 hopper and tank cars with a value of nearly $1 billion in the past 3 years.  In 2013, we will begin selling railcars to transport plastic pellets for which we anticipate strong demand in 2014 and 2015."

Certain orders referenced in this release are subject to customary documentation and completion of terms.  Greenbrier will announce its financial results for the fiscal quarter ended November 30, 2012 on January 9, 2013.  For more information please see Investor Relations at www.gbrx.com.   

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 39 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 10,000 railcars, and performs management services for approximately 221,000 railcars.



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