Trinity Industries, Inc. Announces Fourth Quarter and Full Year 2023 Results

Reports full year GAAP and adjusted earnings from continuing operations of $1.43 and $1.38 per diluted share, respectively

Lease fleet utilization of 97.5% and Future Lease Rate Differential (“FLRD”) of positive 23.7% at quarter-end

Generates full year operating and adjusted free cash flow of $309 million and $29 million, respectively

Delivered 17,355 railcars in the year; backlog of $3.2 billion at year-end

DALLAS–(BUSINESS WIRE)–Trinity Industries, Inc. (NYSE:TRN) today announced earnings results for the fourth quarter and year end ended December 31, 2023.

Financial and Operational Highlights – Fourth Quarter

• Quarterly total company revenues of $798 million; 35% improvement year over year
• Quarterly income from continuing operations per common diluted share (“EPS”) of $0.81 and quarterly adjusted EPS of $0.82
  • Results include tax benefits related to state apportionment and tax law changes
• Lease fleet utilization of 97.5% and FLRD of positive 23.7% at quarter-end
• Quarterly railcar deliveries of 4,000 and new railcar orders of 840

Financial and Operational Highlights – Full Year

• Full year total company revenues of $3.0 billion
• Full year reported EPS of $1.43 and adjusted EPS of $1.38
• Full year cash flow from continuing operations and adjusted free cash flow after investments and dividends (“Adjusted Free Cash Flow”) were $309 million and $29 million, respectively
• Full year railcar deliveries of 17,355 and new railcar orders of 11,500

2024 Guidance

• Industry deliveries of approximately 40,000 railcars
• Net investment in the lease fleet of $300 million to $400 million
• Manufacturing capital expenditures of $50 million to $60 million
• EPS of $1.30 to $1.50
  • Excludes items outside of our core business operations

Management Commentary

“Trinity Industries ended the year with revenue up 51% over 2022, a backlog of $3.2 billion, and adjusted EPS of $1.38, up 47% year over year,” stated Trinity’s Chief Executive Officer and President, Jean Savage.

“In our Railcar Leasing and Management Services Group, we maintained an impressive Future Lease Rate Differential through the year, and rising lease rates drove our revenue up 13% over 2022. Fleet utilization remains favorable at 97.5%,” Ms. Savage continued. “The Rail Products Group faced challenges in the fourth quarter with the border closure and related congestion impacting deliveries and margins in the segment. Despite unexpected headwinds through the year, this segment reported operating profit up 119% over 2022.”

“In 2024, we expect to see continued improvement in our business. We are introducing 2024 EPS annual guidance of $1.30 to $1.50, which reflects improving margins in both our segments. This is offset by significantly lower planned railcar sales, higher elimination of profit from intercompany railcar sales, and a normalized tax provision as compared to 2023.”

Ms. Savage concluded, “We view ourselves as a leasing company that is enabled by our manufacturing and services businesses. As a result, we are re-aligning our segments starting in 2024 and moving our maintenance business into the Railcar Leasing & Services segment. This allows us to better leverage our maintenance capabilities to support lease fleet optimization and growth in our services business.”

Consolidated Financial Summary

Additional Business Items

• Total committed liquidity of $906.3 million as of December 31, 2023.
• In December 2023, our Board of Directors declared an increase of approximately 8% to our quarterly dividend from $0.26 per share to $0.28 per share.
• Effective January 1, 2024, the Company modified its organizational structure to better leverage our maintenance services capabilities to support lease fleet optimization and to grow our services and parts businesses. In connection with this organizational update, we will align the maintenance services business, which is currently reported in the Rail Products Group, to be presented within our leasing business. Consequently, beginning January 1, 2024, we will report our operating results in two reportable segments: (1) Railcar Leasing and Services Group, formerly the Railcar Leasing and Management Services Group, and (2) Rail Products Group. These changes will have no impact to our previously reported consolidated results of operations, financial position, or cash flows. All prior period segment results will be recast to reflect these changes and present results on a comparable basis in future filings, beginning with our Quarterly Report on Form 10-Q for the three months ended March 31, 2024.

Business Group Summary

Conference Call

Trinity will hold a conference call at 8:00 a.m. Eastern on February 22, 2024 to discuss its fourth quarter and full year results. To listen to the call, please visit the Investor Relations section of the Company’s website at www.trin.net and access the Events & Presentations webpage, or the live call can be accessed at 1-888-317-6003 with the conference passcode “7787991”. Please call at least 10 minutes in advance to ensure a timely connection. An audio replay may be accessed through the Company’s website or by dialing 1-877-344-7529 with passcode “2184903” until 11:59 p.m. Eastern on February 29, 2024.

Additionally, the Company will provide Supplemental Materials to accompany the earnings conference call. The materials will be accessible both within the webcast and on Trinity’s Investor Relations website under the Events and Presentations portion of the site along with the Fourth Quarter Earnings Call event weblink.

Non-GAAP Financial Measures

We have included financial measures compiled in accordance with generally accepted accounting principles (“GAAP”) and certain non-GAAP measures in this earnings press release to provide management and investors with additional information regarding our financial results. Non-GAAP measures should not be considered in isolation or as a substitute for our reported results prepared in accordance with GAAP and, as calculated, may not be comparable to other similarly titled measures for other companies. For each non-GAAP financial measure, a reconciliation to the most comparable GAAP measure has been included in the accompanying tables. When forward-looking non-GAAP measures are provided, quantitative reconciliations to the most directly comparable GAAP measures are not provided because management cannot, without unreasonable effort, predict the timing and amounts of certain items included in the computations of each of these measures. These factors include, but are not limited to: the product mix of expected railcar deliveries; the timing and amount of significant transactions and investments, such as lease portfolio sales, capital expenditures, and returns of capital to stockholders; and the amount and timing of certain other items outside the normal course of our core business operations.

About Trinity Industries

Trinity Industries, Inc., headquartered in Dallas, Texas, owns businesses that are leading providers of rail transportation products and services in North America. Our businesses market their railcar products and services under the trade name TrinityRail®. The TrinityRail platform provides railcar leasing and management services; railcar manufacturing, maintenance and modifications; and other railcar logistics products and services. Trinity reports its financial results in two reportable segments: the Railcar Leasing and Management Services Group and the Rail Products 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, including, but not limited to, future financial and operating performance, future opportunities and any other statements regarding events or developments that Trinity believes or anticipates will or may occur in the future. Trinity uses the words “anticipates,” “assumes,” “believes,” “estimates,” “expects,” “intends,” “forecasts,” “may,” “will,” “should,” “guidance,” “projected,” “outlook,” and similar expressions to identify these forward-looking statements. Forward-looking statements speak only as of the date of this release, and Trinity expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in Trinity’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based, except as required by federal securities laws. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from historical experience or our present expectations, including but not limited to risks and uncertainties regarding economic, competitive, governmental, and technological factors affecting Trinity’s operations, markets, products, services and prices, and such forward-looking statements are not guarantees of future performance. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see “Risk Factors” and “Forward-Looking Statements” in Trinity’s Annual Report on Form 10-K for the most recent fiscal year, as may be revised and updated by Trinity’s Quarterly Reports on Form 10-Q, and Trinity’s Current Reports on Form 8-K.

– TABLES TO FOLLOW –

Trinity has certain unvested restricted stock awards that participate in dividends on a nonforfeitable basis and are therefore considered to be participating securities. Consequently, diluted net income attributable to Trinity Industries, Inc. per common share is calculated under both the two-class method and the treasury stock method, and the more dilutive of the two calculations is presented.

Trinity Industries, Inc.

Reconciliations of Non-GAAP Measures

(in millions, except per share amounts)

(unaudited)

Adjusted Operating Results

We have supplemented the presentation of our reported GAAP operating profit, income from continuing operations before income taxes, provision (benefit) for income taxes, income from continuing operations, net income from continuing operations attributable to Trinity Industries, Inc., and diluted income from continuing operations per common share attributable to Trinity Industries, Inc. with non-GAAP measures that adjust the GAAP measures to exclude the impact of certain selling, engineering, and administrative expenses; gains on dispositions of other property; restructuring activities, net; interest expense, net; the income tax effects of the CARES Act; and certain other transactions or events (as applicable), described in the footnotes to the table below. These non-GAAP measures are derived from amounts included in our GAAP financial statements and are reconciled to the most directly comparable GAAP financial measures in the tables below. Management believes that these measures are useful to both management and investors for analyzing the performance of our business without the impact of certain items that are not indicative of our normal business operations. Non-GAAP measures should not be considered in isolation or as a substitute for our reported results prepared in accordance with GAAP and, as calculated, may not be comparable to other similarly titled measures for other companies.

Contacts

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

Read full story here