Greenbrier Companies (USA; NYSE: GBX) reported results for fourth quarter and fiscal year 2008, ended August 31, 2008.
Sales in the quarter were $362 million, from $351 million in 2007. For the full year, sales were a record $1.29 billion, up 5% from 2007.
Net income in the quarter, however, was down 44%, to $7.4 million from $13.2 million a year ago. For the year, net income dropped to $19.5 million from 2007's $22 million.
Greenbrier's difficulties stem from the rapidly slowing railcar market. In fiscal 2007, the company delivered 2,400 new railcars. But in fiscal 2008 the number dropped 25% to just 1,800 cars. Greenbrier's railcar order backlog currently stands at 16,200 units.
Railcar production accounts for 47% of sales. The company's other businesses are railcar parts and refurbishment, leasing and services, and marine manufacturing, totaling 53% of revenue.
During the year, Greenbrier acquired U.S.-based Roller Bearing Industries from SKF (Sweden), strengthening its railcar service business.
RBI reconditions rail bearing for railcar wheelsets. Located in Elizabethtown, Kentucky, RBI has a 52,000 square foot facility employing approximately 50 workers. Annual sales, according to SKF, are in the neighborhood of USD $10 million.
SKF acquired RBI in early 2001, extending its presence in the tightly regulated and often publicly contentious rebuilder market.
The synergy for Greenbrier and RBI promises to be rapid; Greenbrier companies utilize reconditioned bearings in at least 90% of the wheelsets in their 12 wheel shops.
William Furman, President and CEO, said: "We continue to be optimistic about the long-term fundamentals of the railroad industry and our enhanced competitive position. In the near term, the turbulent economy and fragile credit markets continue to put pressure on new railcar demand and we continue to make changes to our new railcar production plans and rates."
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