Trinity Industries, Inc. (
Q3 2010 Earnings Call
October 28, 2010 11:00 a.m. ET
Gail Peck – Treasurer
Tim Wallace - Chairman, CEO and President
Steve Menzies - SVP and Group President, TrinityRail
Antonio Carrillo - SVP and Group President, Energy Equipment Group
Bill McWhirter - SVP and Group President, Construction Products and Inland Barge Groups
James Perry - VP and CFO
Mary Henderson – VP and CAO
Steve Barger - KeyBanc Capital
Arthur Hatfield – Morgan Keegan
Alex Blanton – Ingalls & Snyder
Joe Box - KeyBanc Capital
Paul Bodnar - Longbow Research
Tom Albrecht - BB&T
Alex Blanton - Ingalls & Snyder
Steve Barger - KeyBanc Capital
Previous Statements by TRN
» Trinity Industries Inc. Q2 2010 Earnings Call Transcript
» Trinity Industries Inc. Q1 2010 Earnings Call Transcript
» Trinity Industries, Inc. F4Q09 (Qtr End 12/31/09) Earnings Call Transcript
» Trinity Industries Inc. Q3 2009 Earnings Call Transcript
Good day. All sites are now on the conference line in a listen only mode. Later there will be an opportunity to ask questions during our Q&A segment. (Operator Instructions)
Before we get started, let me remind you that today’s conference call contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995, and includes statements as to estimates, expectations, intentions, and predictions of future financial performance. Statements that are not historical facts are forward-looking.
Participants are directed to Trinity’s Form 10-K and other SEC filings for description of certain of the business issues at risk. A change in any of which would cause actual results or outcomes to differ materially from those expressed in the forward-looking statements.
At this time I’d like to turn the call over to our Moderator, Gail Peck, Treasurer of Trinity Industries. Go ahead please.
Thank you Ty. Good morning from Dallas, Texas. Welcome to the Trinity Industries third quarter 2010 results conference call. I am Gail Peck, Treasurer of Trinity. Thank you for joining us today.
Following the introduction, you will hear from Tim Wallace, our Chairman, Chief Executive Officer and President. After Tim, our business group leaders will provide overviews of the businesses within their respective groups.
Today’s speakers are Steve Menzies, Senior Vice President and Group President of the Rail and Railcar Leasing Groups; Antonio Carrillo, Vice President and Group President of the Energy Equipment Group; and Bill McWhirter, Senior Vice President and Group President of the Construction Products and Inland Barge Groups. Following their comments, James Perry, our Vice President and Chief Financial Officer will provide the financial summary and guidance. We will then move to the Q & A session.
Mary Henderson, our Vice President and Chief Accounting Officer is also in the room with us today. I will now turn the call over to Tim Wallace for his comments.
Thank you, Gail, and good morning everyone. I’m pleased with our accomplishments during the third quarter. We had a number of positive events during the third quarter, which contributed to our success.
I anticipate that each quarter will continue to have its own unique characteristics, challenges and opportunities based on different levels of uncertainty that continues to circulate within the global business environment.
During the third quarter, our Barge Manufacturing facility in Tennessee fully recovered from the damage it received due to the flood last May. James will provide details about the financial aspects of this unique situation during his comments.
I’m very pleased by the way our employees responded to the challenges associated with the flood. Our structural wind towers business completed additional re-shuffling of its production schedules during the quarter to accommodate customers.
Our Railcar Leasing Group provided consistent earnings during the quarter. Our Rail Group generated a profit in a highly competitive market environment. Our Barge Group was very successful extending their backlogs.
Demand for products in most of our businesses continues to reflect a positive trend. During the past six months we’ve seen a steady demand for products in our Highway Construction related businesses that were consistent with previous construction seasons.
I’m very pleased with the progress our businesses made during the third quarter and pursuing quarters. Our overall performance during the quarter reflects the talents and hard work of our people, the diversification of our businesses, our emphasis on operational excellence, and the strength of our market leadership positions.
Our manufacturing businesses remain prepared to flex as their demands in their market shift. I’m confident in their ability to successfully respond as their markets change.
In a rapidly changing business climate like the one’s we’re experiencing, we are fortunate to have a highly seasoned group of employees. I will now turn it over to Steve Menzies for his comment.
Thank you Tim, good morning. Third quarter operating results for the Rail Group and Leasing Group were in line with our expectations. Our Leasing Group saw leasing increase to 98.9% while continuing to grow.
Our Rail Group posted a modest operating profit while shipping approximately 1,140 new railcars. And our order backlog during the third quarter allowing us to plan a high level of production for the balance of the year, and into the first quarter of 2011.
I am pleased with our operating performance in a highly challenging and competitive railcar marketplace.
We have seen continued modest improvement in Railcar demand in certain markets. Demand has improved for railcars that transport chemicals, minerals, and agricultural products; while railcars that serve the lumber, paper, automotive, and coal industries continue to suffer from weak demand.
Significant numbers of idle, intermodal rail cars have been placed back into service and orders to renew intermodal railcars were prominent during the quarter.
Lease renewals and lease rates appear to have stabilized, and are even improving in certain markets. The overhang of vital railcars and slow economic recovery, however, continue to dampen demand for certain railcar types.