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Trinity Industries, Inc. Announces Third Quarter Results Reporting Highest Quarterly Net Income And EPS In The Company's History

Stock quotes in this article: TRN

Share Repurchase and Dividend Activity

During the quarter, the Company repurchased approximately 540,000 shares of common stock under its share repurchase authorization at a cost of $23.9 million leaving $126.2 million remaining under its current authorization through December 31, 2014. Additionally, as previously reported in September, the Company declared a 15% increase in its quarterly dividend to 15 cents per common share, payable on October 31, 2013 to shareholders of record on October 15, 2013. Together with the 2 cent per share increase declared in May, the Company has increased its quarterly dividend by 36% in 2013.

Conference Call

Trinity will hold a conference call at 11:00 a.m. Eastern on October 31, 2013 to discuss its third quarter results. To listen to the call, please visit the Investor Relations section of the Trinity Industries website, www.trin.net. An audio replay may be accessed through the Company's website or by dialing (402) 220-0116 until 11:59 p.m. Eastern on November 7, 2013.

Trinity Industries, Inc., headquartered in Dallas, Texas, is a diversified industrial company that owns market-leading businesses which provide products and services to the energy, transportation, chemical, and construction sectors. Trinity reports its financial results in five principal business segments: the Rail Group, the Railcar Leasing and Management Services Group, the Inland Barge Group, the Construction Products Group, and the Energy Equipment 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. Trinity uses the words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “forecasts,” “may,” “will,” “should,” and similar expressions to identify these forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from historical experience or our present expectations. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see “Forward-Looking Statements” in the Company's Annual Report on Form 10-K for the most recent fiscal year.

 
 

Trinity Industries, Inc.

Condensed Consolidated Income Statements

(in millions, except per share amounts)

(unaudited)

 
Three Months Ended September 30,
2013   2012
Revenues $ 1,110.3 $ 907.3
Operating costs:
Cost of revenues 836.3 728.1
Selling, engineering, and administrative expenses 70.6 55.8
(Gain)/loss on disposition of property, plant, and equipment:
Net gains on lease fleet sales (1.6 ) (17.0 )
Other   (0.6 )   (0.3 )
  904.7     766.6  
Operating profit 205.6 140.7
Interest expense, net 45.2 47.5
Other (income) expense   (0.5 )   (1.5 )
Income before income taxes 160.9 94.7
Provision for income taxes   55.1     32.3  
Net income from continuing operations 105.8 62.4
Net gain on sale of discontinued operations
Net income (loss) from discontinued operations   0.3     0.7  
Net income 106.1 63.1
Net income (loss) attributable to noncontrolling interest   6.5     (0.1 )
Net income attributable to Trinity Industries, Inc. $ 99.6   $ 63.2  
 
Net income attributable to Trinity Industries, Inc. per common share:
Basic
Continuing operations $ 1.26 $ 0.79
Discontinued operations       0.01  
$ 1.26   $ 0.80  
Diluted
Continuing operations $ 1.26 $ 0.79
Discontinued operations       0.01  
$ 1.26   $ 0.80  
Weighted average number of shares outstanding:
Basic 76.1 76.5
Diluted 76.2 76.7
 

Operating profit (loss) from sales of railcars owned one year or less at the time of sale included in revenues and cost of revenues was $4.3 million for the three months ended September 30, 2012. There were no sales of railcars owned one year or less at the time of sale for the three months ended September 30, 2013. Amounts previously reported have been adjusted to exclude discontinued operations resulting from the sale of the Company's ready-mix concrete operations.

 
 

Trinity Industries, Inc.

Condensed Consolidated Income Statements

(in millions, except per share amounts)

(unaudited)

 
Nine Months Ended September 30,
2013   2012
Revenues $ 3,109.3 $ 2,799.0
Operating costs:
Cost of revenues 2,359.6 2,250.6
Selling, engineering, and administrative expenses 211.1 159.5
(Gain)/loss on disposition of property, plant, and equipment:
Net gains on lease fleet sales (9.6 ) (22.3 )
Other   (0.3 )   (4.7 )
  2,560.8     2,383.1  
Operating profit 548.5 415.9
Interest expense, net 140.1 142.5
Other (income) expense   (2.3 )   (4.5 )
Income before income taxes 410.7 277.9
Provision for income taxes   143.5     97.0  
Net income from continuing operations 267.2 180.9
Net gain on sale of discontinued operations 7.1
Net income (loss) from discontinued operations   (1.2 )   2.0  
Net income 273.1 182.9
Net income (loss) attributable to noncontrolling interest   10.4     (1.0 )
Net income attributable to Trinity Industries, Inc. $ 262.7   $ 183.9  
 
Net income attributable to Trinity Industries, Inc. per common share:
Basic
Continuing operations $ 3.24 $ 2.28
Discontinued operations   0.07     0.02  
$ 3.31   $ 2.30  
Diluted
Continuing operations $ 3.24 $ 2.27
Discontinued operations   0.07     0.02  
$ 3.31   $ 2.29  
Weighted average number of shares outstanding:
Basic 76.7 77.3
Diluted 76.8 77.5
 

Operating profit from sales of railcars owned one year or less at the time of sale included in revenues and cost of revenues was $3.5 million and $20.7 million for the nine months ended September 30, 2013 and 2012, respectively. Amounts previously reported have been adjusted to exclude discontinued operations resulting from the sale of the Company's ready-mix concrete operations.

 
 

Trinity Industries, Inc.

Condensed Segment Data

(in millions)

(unaudited)

 
Three Months Ended September 30,
Revenues: 2013   2012
Rail Group $ 718.5 $ 457.9
Construction Products Group 149.2 124.1
Inland Barge Group 136.4 166.5
Energy Equipment Group 169.7 135.6
Railcar Leasing and Management Services Group 150.6 159.9
All Other   22.0     24.6  
Segment Totals before Eliminations 1,346.4 1,068.6
Eliminations - lease subsidiary (173.0 ) (125.9 )
Eliminations - other   (63.1 )   (35.4 )
Consolidated Total $ 1,110.3   $ 907.3  
 
Three Months Ended September 30,
Operating profit (loss): 2013 2012
Rail Group $ 121.5 $ 35.2
Construction Products Group 18.6 11.5
Inland Barge Group 23.8 26.9
Energy Equipment Group 15.0 9.5
Railcar Leasing and Management Services Group 74.0 85.1
All Other   (1.6 )   (2.0 )
Segment Totals before Eliminations and Corporate Expenses 251.3 166.2
Corporate (17.8 ) (12.4 )
Eliminations - lease subsidiary (28.3 ) (14.1 )
Eliminations - other   0.4     1.0  
Consolidated Total $ 205.6   $ 140.7  
 

Amounts previously reported have been adjusted to exclude discontinued operations resulting from the sale of the Company's ready-mix concrete operations.

 
 

Trinity Industries, Inc.

Condensed Segment Data

(in millions)

(unaudited)

 
Nine Months Ended September 30,
Revenues: 2013   2012
Rail Group $ 2,012.0 $ 1,441.9
Construction Products Group 407.5 373.9
Inland Barge Group 433.8 509.8
Energy Equipment Group 476.9 391.3
Railcar Leasing and Management Services Group 454.6 496.4
All Other   63.0     61.1  
Segment Totals before Eliminations 3,847.8 3,274.4
Eliminations - lease subsidiary (560.5 ) (380.8 )
Eliminations - other   (178.0 )   (94.6 )
Consolidated Total $ 3,109.3   $ 2,799.0  
 
Nine Months Ended September 30,
Operating profit (loss): 2013 2012
Rail Group $ 332.3 $ 128.3
Construction Products Group 45.3 35.4
Inland Barge Group 69.0 93.5
Energy Equipment Group 44.2 9.7
Railcar Leasing and Management Services Group 211.3 228.0
All Other   (8.0 )   (7.1 )
Segment Totals before Eliminations and Corporate Expenses 694.1 487.8
Corporate (49.9 ) (33.6 )
Eliminations - lease subsidiary (95.4 ) (37.2 )
Eliminations - other   (0.3 )   (1.1 )
Consolidated Total $ 548.5   $ 415.9  
 

Amounts previously reported have been adjusted to exclude discontinued operations resulting from the sale of the Company's ready-mix concrete operations.

   
 

Trinity Industries, Inc.

Condensed Consolidated Balance Sheets

(in millions)

(unaudited)

 
September 30, 2013 December 31, 2012
Cash and cash equivalents $ 402.6 $ 573.0
Short-term marketable securities 96.0
Receivables, net of allowance 501.5 390.0
Inventories 769.6 667.7
Restricted cash 249.3 223.2
Net property, plant, and equipment 4,701.3 4,299.0
Goodwill 250.8 240.4
Assets held for sale and discontinued operations 27.9
Other assets   287.2   248.7
$ 7,258.3 $ 6,669.9
 
Accounts payable $ 207.0 $ 188.2
Accrued liabilities 685.7 583.1
Debt, net of unamortized discount of $77.6 and $87.5 3,021.1 3,055.0
Deferred income 41.7 44.5
Deferred income taxes 595.6 572.4
Other liabilities 96.7 85.4
Liabilities held for sale and discontinued operations 3.7
Stockholders' equity   2,610.5   2,137.6
$ 7,258.3 $ 6,669.9
     
 

Trinity Industries, Inc.

Additional Balance Sheet Information

(in millions)

(unaudited)

 

 

September 30, 2013 December 31, 2012
Property, Plant, and Equipment
Corporate/Manufacturing:
Property, plant, and equipment $ 1,395.3 $ 1,260.1
Accumulated depreciation   (766.3 )   (720.8 )
  629.0     539.3  
Leasing:
Wholly-owned subsidiaries:
Machinery and other 10.1 9.6
Equipment on lease 3,490.7 3,231.9
Accumulated depreciation   (536.2 )   (468.4 )
  2,964.6     2,773.1  
Partially-owned subsidiaries:
Equipment on lease 1,945.7 1,703.1
Accumulated depreciation   (189.4 )   (153.8 )
  1,756.3     1,549.3  
 
Net deferred profit on railcars sold to the Leasing Group   (648.6 )   (562.7 )
$ 4,701.3   $ 4,299.0  
Leasing portfolio information:
Portfolio size (number of railcars) 75,460 71,455
Portfolio utilization 98.5 % 98.6 %
 

Certain prior year balances with respect to RIV 2013 have been reclassified as pertaining to a partially-owned subsidiary to conform to the 2013 presentation.

     
 

Trinity Industries, Inc.

Additional Balance Sheet Information

(in millions)

(unaudited)

 
September 30, 2013 December 31, 2012
Debt
Corporate/Manufacturing - Recourse:
Revolving credit facility $ $
Convertible subordinated notes 450.0 450.0
Less: unamortized discount   (77.6 )   (87.5 )
372.4 362.5
Other   0.9     1.2  
  373.3     363.7  
Leasing:
Wholly-owned subsidiaries:
Recourse:
Capital lease obligations 42.9 45.8
Term loan       48.6  
  42.9     94.4  
Non-recourse:
Secured railcar equipment notes 776.7 806.5
Warehouse facility 152.0 173.6
Promissory notes   403.5     424.1  
  1,332.2     1,404.2  
Partially-owned subsidiaries - Non-recourse:
Senior secured notes 170.0

Less: Owned by Trinity

      (108.8 )
61.2
Secured railcar equipment notes   1,272.7     1,131.5  
  1,272.7     1,192.7  
$ 3,021.1   $ 3,055.0  
 

Certain prior year balances with respect to RIV 2013 have been reclassified as pertaining to a partially-owned subsidiary to conform to the 2013 presentation.

   
 

Trinity Industries, Inc.

Additional Balance Sheet Information

(in millions)

(unaudited)

 
September 30, 2013 December 31, 2012
Leasing Debt Summary
Total Recourse Debt $ 42.9 $ 94.4
Total Non-Recourse Debt (1)   2,604.9     2,596.9  
$ 2,647.8   $ 2,691.3  
Total Leasing Debt
Wholly-owned subsidiaries $ 1,375.1 $ 1,498.6
Partially-owned subsidiaries (1)   1,272.7     1,192.7  
$ 2,647.8   $ 2,691.3  
Equipment on Lease (2)
Wholly-owned subsidiaries $ 2,964.6 $ 2,773.1
Partially-owned subsidiaries   1,756.3     1,549.3  
$ 4,720.9   $ 4,322.4  
Total Leasing Debt as a % of Equipment on Lease
Wholly-owned subsidiaries 46.4 % 54.0 %
Partially-owned subsidiaries 72.5 % 77.0 %
Combined 56.1 % 62.3 %
 

Certain prior year balances with respect to RIV 2013 have been reclassified as pertaining to a partially-owned subsidiary to conform to the 2013 presentation.

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