DALLAS–(BUSINESS WIRE)– Trinity Industries, Inc. (NYSE:TRN) today announced earnings results for the second quarter ended June 30, 2021.
Financial and Operational Highlights
- Quarterly total company revenues of $372 million
- Quarterly income from continuing operations per common diluted share (“EPS”) of $0.12 and quarterly adjusted EPS of $0.15
- Lease fleet utilization of 94.3% and Future Lease Rate Differential (“FLRD”) of negative 2.5% at quarter end
- New railcar orders of 4,570 and railcar deliveries of 1,765
- Year-to-date cash flow from operations and total free cash flow after dividends and investments (“Free Cash Flow”) were $335 million and $359 million, respectively
- Year-to-date investment of $163 million in leasing capital expenditures, net of lease portfolio sales
- Net additions of 4,550 railcars to the wholly-owned and partially-owned lease fleet compared to prior year period
- Repurchases of approximately 10.5 million shares at a cost of $291 million
- Committed liquidity of $918 million as of June 30, 2021
Management Commentary
“We are very pleased to build on the momentum growing in our business as railcar demand and the overall U.S. economy continue to recover,” remarked Jean Savage, Trinity’s Chief Executive Officer and President. “Best of all, our second quarter results were enhanced by the great strides the Company continues to make towards our return-focused initiatives, and we are proud to say we are on track to achieve the ambitious goals we detailed at our Investor Day last Fall.”
Ms. Savage continued, “Our businesses performed well against our expectations across both our leasing and manufacturing businesses. Trinity’s lease revenue improved modestly and secondary market liquidity remains strong as demand continues to rise. There are clear signs of a strengthening recovery as the renewal success rate for the quarter improved to 81%, a level not seen in recent history. Utilization was slightly lower compared to a year ago as energy markets have lagged in the recovery. Most encouraging, though, was the continued improvement in the Future Lease Rate Differential compared to a year ago. Similarly, Trinity benefited in the second quarter from higher margins on railcars sold in the secondary market from our lease fleet as we continue to optimize for best potential returns.”
“Trinity’s Rail Products Group also had improved results as orders increased significantly compared to a year ago. Even better, our ongoing cost initiatives continue to lower our breakeven point for new car production and reduced the impact of higher steel costs over the quarter. We are ever diligent concerning inflation in our input costs but are increasingly optimistic about the trends in profitability for the Rail Products Group exiting 2021 and into 2022.”
“Additionally, Trinity has made excellent progress against our goal to lower funding costs and optimize our balance sheet. In the quarter, Trinity repurchased $291 million of our common stock, and since the onset of the pandemic, we have successfully issued and refinanced approximately $2.3 billion of debt, which includes our partially-owned leasing subsidiary activities. As a result, we have lowered our borrowing costs by approximately 100 basis points. As we noted at our Investor Day, we believe there are many more opportunities to optimize our assets and liabilities. At quarter-end, Trinity still has an unencumbered railcar inventory totaling $1.1 billion. With improved liquidity in the secondary market for railcars, we have an increased ability to manage our fleet through buying and selling railcars.”
Ms. Savage concluded, “In summary, we are encouraged by the continued recovery in the U.S. rail markets and the economy broadly. More importantly, we are very proud of the progress and execution being driven by the hard work of our collective teams at Trinity. We look forward to our continued progress and the long-term shareholder value generation that we believe will follow.”