Greenbrier Earns First Profit of 2009

Freight railcar and barge builder Greenbrier posted a $6.7 million profit in the June-August period that was its fiscal fourth quarter, for its best result of the past year even though net income was down 9 percent from a year earlier.

Revenue of $230 million was down 36 percent from the 2008 quarter, and Greenbrier’s net income was aided by a large reversal of a deferred tax liability. New railcar deliveries this summer of 900 units were half the level from last year’s quarter.

As of Aug. 31, Greenbrier had a railcar order backlog of 13,400 units valued at $1.16 billion, down from 14,100 worth $1.25 billion at the end of May. However, about 85 percent of the backlog is from a General Electric Railcar Services contract that GE has said it wants to curtail.

Greenbrier valued the end-of-quarter marine backlog at $126 million, down from $145 million when the March-May period closed.

The company suffered losses in its other three fiscal 2009 quarters. It had a full-year net loss of $54.1 million on $1 billion in revenue. The yearly results included special charges to cut goodwill listed for its book of business and to close a plant in Canada.

But the latest quarter also included stronger performance in Greenbrier’s manufacturing and leasing segments, said William A. Furman, president and CEO. In addition, he said, “our diversification efforts continue to pay off and reduce the effects of the economic downturn.”

Yet he cautioned that “the markets in which we operate remain challenging. For example, year-to-date rail loadings in North America are down about 18 percent, and a significant portion of the entire North American railcar fleet remains idle. In this environment, we continue to scale our operations and control costs, manage the company for cash flow and liquidity, and prudently deploy capital.”

Greenbrier reported $76 million in cash on hand Aug. 31, up from $6 million at the same point last year.

Contact John D. Boyd at jboyd@joc.com.