Date of Report (Date of Earliest Event Reported): | November 2, 2023 |
Delaware | 1-6903 | 75-0225040 | ||||||||||||
(State or other jurisdiction of incorporation) |
(Commission File No.) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Common Stock | TRN | New York Stock Exchange |
NO. | DESCRIPTION | |||||||
99.1 | ||||||||
99.2 | ||||||||
99.3 | ||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document (filed electronically herewith). | |||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document (filed electronically herewith). | |||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document (filed electronically herewith). | |||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
Trinity Industries, Inc. | ||||||||
November 2, 2023 | By: | /s/ Eric R. Marchetto | ||||||
Name: Eric R. Marchetto | ||||||||
Title: Executive Vice President and Chief Financial Officer |
NEWS RELEASE |
Three Months Ended September 30, |
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2023 | 2022 | Year over Year – Comparison | |||||||||||||||
($ in millions, except per share amounts) | |||||||||||||||||
Revenues | $ | 821.3 | $ | 496.6 | Higher volume of external deliveries in the Rail Products Group | ||||||||||||
Operating profit |
$ | 100.2 | $ | 92.7 | Higher external deliveries in the Rail Products Group and improved lease rates in the Leasing Group, partially offset by lower lease portfolio sales volume and increased employee-related and other operating costs | ||||||||||||
Interest expense, net | $ | 68.8 | $ | 55.0 | Higher overall average debt and higher interest rates during Q3 2023 |
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Net income from continuing operations attributable to Trinity Industries, Inc. | $ | 24.5 | $ | 29.2 | |||||||||||||
EBITDA (1) |
$ | 177.5 | $ | 164.3 | |||||||||||||
Effective tax expense rate | 18.6 | % | 22.5 | % | State tax law changes enacted in Q3 2023 | ||||||||||||
Diluted EPS – GAAP | $ | 0.29 | $ | 0.35 | |||||||||||||
Diluted EPS – Adjusted (1) |
$ | 0.26 | $ | 0.34 | |||||||||||||
Nine Months Ended September 30, |
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2023 | 2022 | Year over Year – Comparison | |||||||||||||||
(in millions) | |||||||||||||||||
Net cash provided by (used in) operating activities – continuing operations | $ | 215.8 | $ | (52.6) | Inventory levels stabilized relative to prior year inventory build up | ||||||||||||
Adjusted Free Cash Flow (1) |
$ | 49.5 | $ | 0.1 | |||||||||||||
Net lease fleet investment | $ | 237.5 | $ | 176.3 | |||||||||||||
Returns of capital to stockholders | $ | 64.7 | $ | 122.7 | 2022 included $64 million of share repurchase activity |
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Three Months Ended September 30, |
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2023 | 2022 | Year over Year – Comparison | |||||||||||||||
($ in millions) | |||||||||||||||||
Railcar Leasing and Management Services Group | |||||||||||||||||
Leasing and management revenues | $ | 222.6 | $ | 194.8 | Improved lease rates and higher utilization, as well as acquisition-related revenues included in the current year period | ||||||||||||
Leasing and management operating profit | $ | 85.5 | $ | 73.6 | Improved lease rates and higher utilization, partially offset by higher maintenance costs | ||||||||||||
Operating profit on lease portfolio sales | $ | 3.1 | $ | 34.3 | Lower lease fleet portfolio sales volume | ||||||||||||
Fleet utilization (1) |
98.1 | % | 97.9 | % | |||||||||||||
Future Lease Rate Differential (2) |
+26.6 | % | +11.0 | % | Improvement in current lease rates | ||||||||||||
Owned lease fleet (in units) (1) |
109,055 | 109,195 | |||||||||||||||
Investor-owned lease fleet (in units) | 33,025 | 33,245 | |||||||||||||||
Rail Products Group | |||||||||||||||||
Revenues | $ | 682.2 | $ | 597.3 | Higher volume of deliveries and a favorable mix of railcars sold | ||||||||||||
Operating profit | $ | 39.2 | $ | 26.0 | Higher volume of deliveries, partially offset by foreign currency fluctuations. Includes insurance recoveries of $3.7 million and $1.1 million in the current and prior year quarters, respectively. | ||||||||||||
Operating profit margin | 5.7 | % | 4.4 | % | |||||||||||||
Revenues eliminations – Lease subsidiary | $ | (83.2) | $ | (295.3) | |||||||||||||
Operating profit eliminations – Lease subsidiary | $ | (2.4) | $ | (19.6) | |||||||||||||
New railcars: | |||||||||||||||||
Deliveries (in units) | 4,325 | 3,935 | |||||||||||||||
Orders (in units) | 3,200 | 19,500 | 2022 includes long-term supply agreement of 15,000 railcars | ||||||||||||||
Order value | $ | 401.5 | $ | 2,405.5 | 2022 includes $1.8 billion from long-term supply agreement |
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Backlog value | $ | 3,598.4 | $ | 4,090.9 | |||||||||||||
Sustainable railcar conversions: | |||||||||||||||||
Deliveries (in units) | 620 | 300 | |||||||||||||||
Backlog (in units) | 1,540 | 2,420 | |||||||||||||||
Backlog value | $ | 124.4 | $ | 201.4 | |||||||||||||
Corporate and other | |||||||||||||||||
Selling, engineering, and administrative expenses | $ | 25.2 | $ | 25.1 | |||||||||||||
Gains on dispositions of property | $ | — | $ | (3.7) | |||||||||||||
September 30, 2023 | December 31, 2022 | ||||||||||||||||
Loan-to-value ratio | |||||||||||||||||
Wholly-owned subsidiaries, excluding corporate revolving credit facility | 64.9 | % | 65.7 | % |
Investor Contact: | ||
Leigh Anne Mann | ||
Vice President, Investor Relations | ||
Trinity Industries, Inc. | ||
(Investors) 214/631-4420 | ||
Media Contact: | ||
Jack L. Todd | ||
Vice President, Public Affairs | ||
Trinity Industries, Inc. | ||
(Media Line) 214/589-8909 |
Three Months Ended September 30, |
Nine Months Ended September 30, |
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2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Revenues | $ | 821.3 | $ | 496.6 | $ | 2,185.4 | $ | 1,386.1 | |||||||||||||||
Operating costs: | |||||||||||||||||||||||
Cost of revenues | 679.5 | 395.3 | 1,819.2 | 1,119.4 | |||||||||||||||||||
Selling, engineering, and administrative expenses | 49.1 | 48.0 | 153.3 | 137.7 | |||||||||||||||||||
Gains on dispositions of property: | |||||||||||||||||||||||
Lease portfolio sales | 3.1 | 34.3 | 46.4 | 73.0 | |||||||||||||||||||
Other | 4.4 | 5.1 | 6.8 | 19.5 | |||||||||||||||||||
Restructuring activities, net | — | — | (2.2) | 1.0 | |||||||||||||||||||
721.1 | 403.9 | 1,917.1 | 1,165.6 | ||||||||||||||||||||
Operating profit | 100.2 | 92.7 | 268.3 | 220.5 | |||||||||||||||||||
Interest expense, net | 68.8 | 55.0 | 197.8 | 148.2 | |||||||||||||||||||
Loss on extinguishment of debt | — | — | — | 1.5 | |||||||||||||||||||
Other, net | (0.9) | (0.6) | 2.0 | (2.7) | |||||||||||||||||||
Income from continuing operations before income taxes | 32.3 | 38.3 | 68.5 | 73.5 | |||||||||||||||||||
Provision (benefit) for income taxes: | |||||||||||||||||||||||
Current | 22.2 | (2.6) | 26.2 | 1.2 | |||||||||||||||||||
Deferred | (16.2) | 11.2 | (24.3) | 16.2 | |||||||||||||||||||
6.0 | 8.6 | 1.9 | 17.4 | ||||||||||||||||||||
Income from continuing operations | 26.3 | 29.7 | 66.6 | 56.1 | |||||||||||||||||||
Loss from discontinued operations, net of income taxes | (2.7) | (3.4) | (8.1) | (13.7) | |||||||||||||||||||
Loss on sale of discontinued operations, net of income taxes | — | — | — | (5.7) | |||||||||||||||||||
Net income | 23.6 | 26.3 | 58.5 | 36.7 | |||||||||||||||||||
Net income attributable to noncontrolling interest | 1.8 | 0.5 | 15.3 | 7.9 | |||||||||||||||||||
Net income attributable to Trinity Industries, Inc. | $ | 21.8 | $ | 25.8 | $ | 43.2 | $ | 28.8 | |||||||||||||||
Basic earnings per common share: | |||||||||||||||||||||||
Income from continuing operations | $ | 0.30 | $ | 0.36 | $ | 0.63 | $ | 0.59 | |||||||||||||||
Loss from discontinued operations | (0.03) | (0.04) | (0.10) | (0.24) | |||||||||||||||||||
Basic net income attributable to Trinity Industries, Inc. | $ | 0.27 | $ | 0.32 | $ | 0.53 | $ | 0.35 | |||||||||||||||
Diluted earnings per common share: | |||||||||||||||||||||||
Income from continuing operations | $ | 0.29 | $ | 0.35 | $ | 0.62 | $ | 0.57 | |||||||||||||||
Loss from discontinued operations | (0.03) | (0.04) | (0.10) | (0.23) | |||||||||||||||||||
Diluted net income attributable to Trinity Industries, Inc. | $ | 0.26 | $ | 0.31 | $ | 0.52 | $ | 0.34 | |||||||||||||||
Weighted average number of shares outstanding: | |||||||||||||||||||||||
Basic | 81.6 | 81.7 | 81.2 | 82.3 | |||||||||||||||||||
Diluted | 83.5 | 83.3 | 83.5 | 84.4 |
September 30, 2023 | December 31, 2022 | ||||||||||
ASSETS | |||||||||||
Cash and cash equivalents | $ | 114.0 | $ | 79.6 | |||||||
Receivables, net of allowance | 392.8 | 323.5 | |||||||||
Income tax receivable | 7.9 | 7.8 | |||||||||
Inventories | 679.4 | 629.4 | |||||||||
Restricted cash | 152.7 | 214.7 | |||||||||
Property, plant, and equipment, net: | |||||||||||
Manufacturing/Corporate | 343.5 | 340.7 | |||||||||
Leasing: | |||||||||||
Wholly-owned subsidiaries | 5,915.7 | 5,788.1 | |||||||||
Partially-owned subsidiaries | 1,490.7 | 1,521.3 | |||||||||
Deferred profit on railcars sold to the Leasing Group | (758.7) | (763.3) | |||||||||
6,991.2 | 6,886.8 | ||||||||||
Goodwill | 222.7 | 195.9 | |||||||||
Other assets | 412.7 | 386.6 | |||||||||
Total assets | $ | 8,973.4 | $ | 8,724.3 | |||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
Accounts payable | $ | 325.8 | $ | 287.5 | |||||||
Accrued liabilities | 328.0 | 261.0 | |||||||||
Debt: | |||||||||||
Recourse | 794.2 | 624.1 | |||||||||
Non-recourse: | |||||||||||
Wholly-owned subsidiaries | 3,838.3 | 3,800.7 | |||||||||
Partially-owned subsidiaries | 1,149.9 | 1,182.8 | |||||||||
5,782.4 | 5,607.6 | ||||||||||
Deferred income taxes | 1,122.3 | 1,134.7 | |||||||||
Other liabilities | 161.5 | 163.9 | |||||||||
Stockholders' equity: | |||||||||||
Trinity Industries, Inc. | 1,000.8 | 1,012.4 | |||||||||
Noncontrolling interest | 252.6 | 257.2 | |||||||||
1,253.4 | 1,269.6 | ||||||||||
Total liabilities and stockholders' equity | $ | 8,973.4 | $ | 8,724.3 |
Nine Months Ended September 30, |
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2023 | 2022 | ||||||||||
Operating activities: | |||||||||||
Net cash provided by (used in) operating activities – continuing operations | $ | 215.8 | $ | (52.6) | |||||||
Net cash used in operating activities – discontinued operations | (8.1) | (15.4) | |||||||||
Net cash provided by (used in) operating activities | 207.7 | (68.0) | |||||||||
Investing activities: | |||||||||||
Proceeds from lease portfolio sales | 245.8 | 514.8 | |||||||||
Proceeds from dispositions of property and other assets | 13.0 | 33.2 | |||||||||
Capital expenditures – leasing | (483.3) | (691.1) | |||||||||
Capital expenditures – manufacturing and other | (29.4) | (25.7) | |||||||||
Acquisitions, net of cash acquired | (66.2) | (9.4) | |||||||||
Proceeds from insurance recoveries | 4.9 | 7.6 | |||||||||
Equity investments | (1.1) | (15.5) | |||||||||
Net cash used in investing activities – continuing operations | (316.3) | (186.1) | |||||||||
Payments related to sale of discontinued operations | — | (2.7) | |||||||||
Net cash used in investing activities | (316.3) | (188.8) | |||||||||
Financing activities: | |||||||||||
Net proceeds from (repayments of) debt | 165.3 | 313.0 | |||||||||
Shares repurchased | — | (36.8) | |||||||||
Dividends paid to common shareholders | (64.7) | (58.3) | |||||||||
Other financing activities | (19.6) | (24.8) | |||||||||
Net cash provided by financing activities | 81.0 | 193.1 | |||||||||
Net decrease in cash, cash equivalents, and restricted cash | (27.6) | (63.7) | |||||||||
Cash, cash equivalents, and restricted cash at beginning of period | 294.3 | 302.4 | |||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 266.7 | $ | 238.7 |
Three Months Ended September 30, 2023 | |||||||||||||||||||||||
GAAP | Gains on dispositions of property – other (1) |
Interest expense, net (2) |
Adjusted | ||||||||||||||||||||
Operating profit | $ | 100.2 | $ | (3.7) | $ | — | $ | 96.5 | |||||||||||||||
Income from continuing operations before income taxes | $ | 32.3 | $ | (3.7) | $ | (0.4) | $ | 28.2 | |||||||||||||||
Provision (benefit) for income taxes | $ | 6.0 | $ | (0.8) | $ | (0.1) | $ | 5.1 | |||||||||||||||
Income from continuing operations | $ | 26.3 | $ | (2.9) | $ | (0.3) | $ | 23.1 | |||||||||||||||
Net income from continuing operations attributable to Trinity Industries, Inc. | $ | 24.5 | $ | (2.9) | $ | (0.3) | $ | 21.3 | |||||||||||||||
Diluted weighted average shares outstanding | 83.5 | 83.5 | |||||||||||||||||||||
Diluted income from continuing operations per common share attributable to Trinity Industries, Inc. | $ | 0.29 | $ | 0.26 |
Nine Months Ended September 30, 2023 | |||||||||||||||||||||||||||||||||||
GAAP | Selling, engineering, and administrative expenses (3) |
Gains on dispositions of property – other (1) |
Restructuring activities, net | Interest expense, net (2) |
Adjusted | ||||||||||||||||||||||||||||||
Operating profit | $ | 268.3 | $ | 2.0 | $ | (4.9) | $ | (2.2) | $ | — | $ | 263.2 | |||||||||||||||||||||||
Income from continuing operations before income taxes | $ | 68.5 | $ | 2.0 | $ | (4.9) | $ | (2.2) | $ | (1.1) | $ | 62.3 | |||||||||||||||||||||||
Provision (benefit) for income taxes | $ | 1.9 | $ | 0.5 | $ | (1.2) | $ | (0.6) | $ | (0.3) | $ | 0.3 | |||||||||||||||||||||||
Income from continuing operations | $ | 66.6 | $ | 1.5 | $ | (3.7) | $ | (1.6) | $ | (0.8) | $ | 62.0 | |||||||||||||||||||||||
Net income from continuing operations attributable to Trinity Industries, Inc. | $ | 51.3 | $ | 1.5 | $ | (3.7) | $ | (1.6) | $ | (0.8) | $ | 46.7 | |||||||||||||||||||||||
Diluted weighted average shares outstanding | 83.5 | 83.5 | |||||||||||||||||||||||||||||||||
Diluted income from continuing operations per common share attributable to Trinity Industries, Inc. | $ | 0.62 | $ | 0.56 |
Three Months Ended September 30, 2022 | |||||||||||||||||||||||
GAAP | Gains on dispositions of property – other (1) |
Interest expense, net (2) |
Adjusted | ||||||||||||||||||||
Operating profit | $ | 92.7 | $ | (1.1) | $ | — | $ | 91.6 | |||||||||||||||
Income from continuing operations before income taxes | $ | 38.3 | $ | (1.1) | $ | (0.3) | $ | 36.9 | |||||||||||||||
Provision (benefit) for income taxes | $ | 8.6 | $ | (0.3) | $ | (0.1) | $ | 8.2 | |||||||||||||||
Income from continuing operations | $ | 29.7 | $ | (0.8) | $ | (0.2) | $ | 28.7 | |||||||||||||||
Net income from continuing operations attributable to Trinity Industries, Inc. | $ | 29.2 | $ | (0.8) | $ | (0.2) | $ | 28.2 | |||||||||||||||
Diluted weighted average shares outstanding | 83.3 | 83.3 | |||||||||||||||||||||
Diluted income from continuing operations per common share attributable to Trinity Industries, Inc. | $ | 0.35 | $ | 0.34 |
Nine Months Ended September 30, 2022 | |||||||||||||||||||||||||||||
GAAP | Gains on dispositions of property – other (1) |
Restructuring activities, net | Interest expense, net (2) |
Adjusted | |||||||||||||||||||||||||
Operating profit | $ | 220.5 | $ | (7.5) | $ | 1.0 | $ | — | $ | 214.0 | |||||||||||||||||||
Income from continuing operations before income taxes | $ | 73.5 | $ | (7.5) | $ | 1.0 | $ | (1.0) | $ | 66.0 | |||||||||||||||||||
Provision (benefit) for income taxes | $ | 17.4 | $ | (1.9) | $ | 0.3 | $ | (0.3) | $ | 15.5 | |||||||||||||||||||
Income from continuing operations | $ | 56.1 | $ | (5.6) | $ | 0.7 | $ | (0.7) | $ | 50.5 | |||||||||||||||||||
Net income from continuing operations attributable to Trinity Industries, Inc. | $ | 48.2 | $ | (5.6) | $ | 0.7 | $ | (0.7) | $ | 42.6 | |||||||||||||||||||
Diluted weighted average shares outstanding | 84.4 | 84.4 | |||||||||||||||||||||||||||
Diluted income from continuing operations per common share attributable to Trinity Industries, Inc. | $ | 0.57 | $ | 0.50 |
Nine Months Ended September 30, |
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2023 | 2022 | ||||||||||
Net cash provided by (used in) operating activities – continuing operations | $ | 215.8 | $ | (52.6) | |||||||
Proceeds from lease portfolio sales | 245.8 | 514.8 | |||||||||
Capital expenditures – manufacturing and other | (29.4) | (25.7) | |||||||||
Dividends paid to common stockholders | (64.7) | (58.3) | |||||||||
Equity CapEx for leased railcars | (318.0) | (378.1) | |||||||||
Adjusted Free Cash Flow After Investments and Dividends | $ | 49.5 | $ | 0.1 | |||||||
Capital expenditures – leasing | $ | 483.3 | $ | 691.1 | |||||||
Less: | |||||||||||
Payments to retire debt | (1,279.0) | (1,351.5) | |||||||||
Proceeds from issuance of debt | 1,444.3 | 1,664.5 | |||||||||
Net proceeds from (repayments of) debt | 165.3 | 313.0 | |||||||||
Equity CapEx for leased railcars | $ | 318.0 | $ | 378.1 |
Three Months Ended September 30, |
Nine Months Ended September 30, |
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2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net income | $ | 23.6 | $ | 26.3 | $ | 58.5 | $ | 36.7 | |||||||||||||||
Less: Loss from discontinued operations, net of income taxes | (2.7) | (3.4) | (8.1) | (13.7) | |||||||||||||||||||
Less: Loss on sale of discontinued operations, net of income taxes | — | — | — | (5.7) | |||||||||||||||||||
Income from continuing operations | $ | 26.3 | $ | 29.7 | $ | 66.6 | $ | 56.1 | |||||||||||||||
Interest expense | 72.1 | 56.2 | 206.5 | 152.3 | |||||||||||||||||||
Provision (benefit) for income taxes | 6.0 | 8.6 | 1.9 | 17.4 | |||||||||||||||||||
Depreciation and amortization expense | 73.1 | 69.8 | 219.9 | 206.0 | |||||||||||||||||||
EBITDA |
$ | 177.5 | $ | 164.3 | $ | 494.9 | $ | 431.8 | |||||||||||||||
Selling, engineering, and administrative expenses | — | — | 2.0 | — | |||||||||||||||||||
Gains on dispositions of property – other | (3.7) | (1.1) | (4.9) | (7.5) | |||||||||||||||||||
Restructuring activities, net | — | — | (2.2) | 1.0 | |||||||||||||||||||
Interest income | (0.4) | (0.3) | (1.1) | (1.0) | |||||||||||||||||||
Adjusted EBITDA | $ | 173.4 | $ | 162.9 | $ | 488.7 | $ | 424.3 |