1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------- FORM 10-Q ---------- (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2000 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ______________ Commission file number 1-6903 TRINITY INDUSTRIES, INC. (Exact name of Company as specified in its charter) Incorporated Under the Laws 75-0225040 of the State of Delaware ---------- (I.R.S. Employer Identification No.) 2525 Stemmons Freeway Dallas, Texas 75207-2401 ------------- ---------- (Address of Principal (Zip Code) Executive Offices) (214) 631-4420 -------------- (Company's Telephone Number, Including Area Code) Indicate by check mark whether the Company (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes X No ---- ---- 36,843,725 (Number of shares of common stock outstanding as of December 31, 2000)
2 Part I Item 1 - Financial Statements Trinity Industries, Inc. Consolidated Balance Sheet (in millions except per share data) <TABLE> <CAPTION> December 31 March 31 Assets 2000 2000 ------------ ------------ (unaudited) <S> <C> <C> Cash and equivalents ...................... $ 14.8 $ 16.9 Receivables ............................... 218.2 349.8 Inventories: Raw materials and supplies .............. 309.8 257.0 Work in process ......................... 41.0 37.5 Finished goods .......................... 57.8 66.1 ------------ ------------ 408.6 360.6 Property, plant and equipment, at cost .... 1,428.6 1,304.9 Less accumulated depreciation ............. (535.4) (491.7) ------------ ------------ 893.2 813.2 Other assets .............................. 220.6 198.0 ------------ ------------ $ 1,755.4 $ 1,738.5 ============ ============ Liabilities and Stockholders' Equity Short-term debt ........................... $ 405.6 $ 170.1 Accounts payable and accrued liabilities .. 331.9 360.9 Long-term debt ............................ 44.5 95.4 Deferred income taxes ..................... 14.6 58.5 Other liabilities ......................... 32.8 38.5 ------------ ------------ 829.4 723.4 ------------ ------------ Stockholders' equity: Common stock - par value $1 per share; authorized 100.0 shares; shares issued and outstanding - 43.8 ................ 43.8 43.8 Capital in excess of par value .......... 291.9 295.1 Retained earnings ....................... 805.8 860.6 Accumulated other comprehensive income .. (20.5) (19.8) Treasury stock - (shares held at December 31, 2000 - 7.0; at March 31, 1999 - 5.5), at cost .................. (195.0) (164.6) ------------ ------------ 926.0 1,015.1 ------------ ------------ $ 1,755.4 $ 1,738.5 ============ ============ </TABLE> 2
3 Trinity Industries, Inc. Consolidated Statement of Operations (unaudited) (in millions except per share data) <TABLE> <CAPTION> Nine Months Ended December 31 2000 1999 ------------ ------------ <S> <C> <C> Revenues .......................................... $ 1,485.6 $ 2,094.2 Operating costs: Cost of revenues ................................ 1,331.4 1,735.4 Selling, engineering and administrative expenses ...................................... 162.1 135.7 ------------ ------------ 1,493.5 1,871.1 ------------ ------------ Operating profit (loss) ........................... (7.9) 223.1 Other (income) expense: Interest income ................................. (5.5) (0.9) Interest expense ................................ 21.3 15.8 Other, net ...................................... 30.5 (1.4) ------------ ------------ 46.3 13.5 ------------ ------------ Income (loss) before income taxes ................. (54.2) 209.6 Provision (benefit) for income taxes: Current ......................................... 17.8 72.8 Deferred ........................................ (37.3) 5.2 ------------ ------------ (19.5) 78.0 Net income (loss) ................................. $ (34.7) $ 131.6 ============ ============ Net income (loss) per common share: Basic ........................................... $ (0.92) $ 3.31 ============ ============ Diluted ......................................... $ (0.92) $ 3.29 ============ ============ Weighted average number of shares outstanding: Basic ........................................... 37.6 39.7 Diluted ......................................... 37.6 40.0 </TABLE> 3
4 Trinity Industries, Inc. Consolidated Statement of Operations (unaudited) (in millions except per share data) <TABLE> <CAPTION> Three Months Ended December 31 2000 1999 ------------ ------------ <S> <C> <C> Revenues ............................................. $ 401.2 $ 700.8 Operating costs: Cost of revenues ................................... 372.9 586.4 Selling, engineering and administrative expenses ... 58.8 45.6 ------------ ------------ 431.7 632.0 ------------ ------------ Operating profit (loss) .............................. (30.5) 68.8 Other (income) expense: Interest income .................................... (2.2) (0.5) Interest expense ................................... 8.4 5.8 Other, net ......................................... 29.5 -- ------------ ------------ 35.7 5.3 ------------ ------------ Income (loss) before income taxes .................... (66.2) 63.5 Provision (benefit) for income taxes: Current ............................................ 12.1 20.6 Deferred ........................................... (35.9) 2.6 ------------ ------------ (23.8) 23.2 Net income (loss) .................................... $ (42.4) $ 40.3 ============ ============ Net income (loss) per common share: Basic .............................................. $ (1.14) $ 1.03 ============ ============ Diluted ............................................ $ (1.14) $ 1.02 ============ ============ Weighted average number of shares outstanding: Basic .............................................. 37.1 39.3 Diluted ............................................ 37.1 39.5 </TABLE> 4
5 Trinity Industries, Inc. Consolidated Statement of Cash Flows (unaudited) (in millions) <TABLE> <CAPTION> Nine Months Ended December 31 2000 1999 ------------ ------------ <S> <C> <C> Operating activities: Net income ........................................ $ (34.7) $ 131.6 Adjustments to reconcile net income to net cash provided (required) by operating activities: Depreciation and amortization ................... 66.2 59.6 Provision (benefit) for deferred income taxes ... (37.4) 5.2 Gain on sale of property, plant and equipment and other assets ............................... (9.8) (6.9) Restructuring and other unusual charges ......... 117.5 -- Other ........................................... 16.9 7.5 Change in assets and liabilities, net of effects from acquisitions: Decrease in receivables ........................ 122.9 22.4 (Increase) decrease in inventories ............. (59.6) 36.6 Increase in other assets ....................... (53.7) (1.5) Decrease in accounts payable and accrued liabilities ........................... (55.1) (111.7) Increase (decrease) in other liabilities ....... (5.9) 10.9 ------------ ------------ Total adjustments ............................. 102.0 22.1 ------------ ------------ Net cash provided by operating activities .................................... 67.3 153.7 Investing activities: Proceeds from sale of property, plant and equipment and other assets ................... 55.8 53.1 Capital expenditures .............................. (240.6) (105.9) Payment for acquisitions, net of cash acquired .... (13.7) (12.8) ------------ ------------ Net cash required by investing activities .......................... (198.5) (65.6) Financing activities: Issuance of common stock .......................... -- 0.7 Net borrowings of short-term debt ................. 235.5 19.0 Stock repurchases ................................. (34.6) (64.0) Payments to retire long-term debt ................. (51.4) (26.3) Dividends paid .................................... (20.4) (21.6) ------------ ------------ Net cash provided (required) by financing activities .......................... 129.1 (92.2) ------------ ------------ Net decrease in cash and equivalents ............... (2.1) (4.1) Cash and equivalents at beginning of year .......... 16.9 13.5 ------------ ------------ Cash and equivalents at end of period .............. $ 14.8 $ 9.4 ============ ============ </TABLE> 5
6 Trinity Industries, Inc. Consolidated Statement of Stockholders' Equity (unaudited) (in millions except share and per share data) <TABLE> <CAPTION> Common Stock --------------------- Capital Accumulated Amount in Other Total Shares $1.00 Excess Compre- Treasury Stock Stock- (100,000,000) Par of Par Retained hensive ------------------------- holders' (Authorized) Value Value Earnings Income Shares Amount Equity ------------ ------ ----------- -------- ------------ ----------- ----------- --------- <S> <C> <C> <C> <C> <C> <C> <C> <C> Balance at March 31, 1999....... 43,705,636 $ 43.7 $ 292.6 $ 722.9 $ (20.6) (2,363,932) $ (79.5) $ 959.1 Other ......................... 39,998 -- 0.9 -- -- -- -- 0.9 Stock repurchases ............. -- -- -- -- -- (2,136,715) (64.0) (64.0) Net income .................... -- -- -- 131.6 -- -- -- 131.6 Currency translation Adjustments ................. -- -- -- -- 0.5 -- -- 0.5 ----------- Comprehensive income .......... 132.1 Cash dividends ($0.54 per share) ............ -- -- -- (20.8) -- -- -- (20.8) ----------- ------ ----------- -------- -------- ----------- ----------- ----------- Balance December 31, 1999....... 43,745,634 $ 43.7 $ 293.5 $ 833.7 $ (20.1) (4,500,647) $ (143.5) $ 1,007.3 =========== ====== =========== ======== ======== =========== =========== =========== Balance at March 31, 2000....... 43,796,351 $ 43.8 $ 295.1 $ 860.6 $ (19.8) (5,455,743) $ (164.6) $ 1,015.1 Other ......................... -- (3.2) -- -- 122,017 4.2 1.0 Stock repurchases ............. -- -- -- -- -- (1,618,900) (34.6) (34.6) Net income .................... -- -- -- (34.7) -- -- -- (34.7) Currency translation Adjustments ................. -- -- -- -- (0.7) -- -- (0.7) ----------- Comprehensive income .......... (35.4) Cash dividends ($0.54 per share) ............ -- -- -- (20.1) -- -- -- (20.1) ----------- ------ ----------- -------- -------- ----------- ----------- ----------- Balance December 31, 2000....... 43,796,351 $ 43.8 $ 291.9 $ 805.8 $ (20.5) (6,952,626) $ (195.0) $ 926.0 =========== ====== =========== ======== ======== =========== =========== =========== </TABLE> 6
7 Trinity Industries, Inc. Notes to Consolidated Financial Statements (unaudited) December 31, 2000 General The foregoing consolidated financial statements are unaudited and have been prepared from the books and records of Trinity Industries, Inc. ("Trinity" or the "Company"). In the opinion of management, all adjustments, consisting only of normal and recurring adjustments necessary for a fair presentation of the financial position of the Company as of December 31, 2000, the results of operations for the three and nine month periods ended December 31, 2000 and 1999 and cash flows for the nine month periods ended December 31, 2000 and 1999, in conformity with generally accepted accounting principles, have been made. Because of seasonal and other factors, the results of operations for the nine month period ended December 31, 2000 may not be indicative of expected results of operations for the year ending March 31, 2001. These interim financial statements and notes are condensed as permitted by the instructions to Form 10-Q, and should be read in conjunction with the audited consolidated financial statements of the Company incorporated by reference in its Form 10-K for the year ended March 31, 2000. Second and Third Quarter Charges In the second quarter, the Company recorded pretax charges of $51.9 million ($33.2 million after tax), or $0.88 per share, related primarily to restructuring the Company's railcar operations, exiting the flange and valve businesses, writing down certain inventory, curtailing international barge operations, disposing of excess assets, staff reduction of corporate employees, and writing down an investment. In the third quarter, the Company recorded pretax charges of $65.6 million ($42.0 million after tax), or $1.13 per share, related primarily to environmental liabilities associated with previously closed facilities, write-downs of certain equity investments and acquired assets, including a 20% investment in a Russian transportation company obtained with the acquisition of Transcisco Industries in the fall of 1996, and other charges. Classification of the charges in the income statement are detailed below: <TABLE> <CAPTION> 2nd Qtr 3rd Qtr Charges Charges Total ------- ------- ------ <S> <C> <C> <C> Cost of Revenues $44.1 $27.3 $ 71.4 Selling, Engineering, and Administrative Expenses 4.8 8.9 13.7 Other Expenses 3.0 29.4 32.4 ----- ----- ------ Total $51.9 $65.6 $117.5 ===== ===== ====== </TABLE> 7
8 The charges included in cost of sales and selling, engineering, and administrative expenses are included in operating profit of the Company's business segments as follows: <TABLE> <CAPTION> 2nd Qtr 3rd Qtr Charges Charges Total ------- ------- ------ <S> <C> <C> <C> Railcar Group $21.1 $ -- $ 21.1 Inland Barge 3.7 0.7 4.4 Parts & Services 6.2 19.0 25.2 Industrial 6.5 8.0 14.5 All Other -- 1.2 1.2 Corporate 11.4 7.3 18.7 ----- ----- ------ Charged to operating Profit 48.9 36.2 85.1 Other expense 3.0 29.4 32.4 ----- ----- ------ Total $51.9 $65.6 $117.5 ===== ===== ====== </TABLE> Costs included in the charges are summarized as follows: Second Quarter Charges <TABLE> <CAPTION> Reserve Total Non-Cash Balance Charge Portion 12/31/00 ------------ ------------ ------------ <S> <C> <C> <C> Property, plant & Equipment - write downs to net realizable value to be disposed of and related shut-down costs $ 28.4 $ 28.4 $ -- Severance - approximately 3,900 employees to be paid primarily by March 31, 2001 4.6 -- 1.2 Inventory 10.3 10.3 -- Investment 3.0 3.0 -- Other 5.6 -- 4.4 ------------ ------------ ------------ Total 51.9 41.7 5.6 ------------ ------------ ------------ Third Quarter Charges Equity investment write-downs: Russian transportation company 17.0 17.0 -- Other equity investments 17.5 17.5 -- ------------ ------------ ------------ Total equity investment write-downs 34.5 34.5 -- Asset write-downs related to wholly- owned businesses 18.7 17.7 1.0 Environmental liabilities 6.6 -- 6.6 Railcar Repair contract losses 4.0 -- 2.7 Accounts receivable reserves in Parts & Services segment 2.9 2.9 -- Inventory, severance, and other Charges 2.8 1.5 1.3 Gain on sale of real estate (3.9) -- -- ------------ ------------ ------------ 65.6 56.6 11.6 ------------ ------------ ------------ Total $ 117.5 $ 98.3 $ 17.2 ============ ============ ============ </TABLE> 8
9 Stock Repurchases In the third quarter of fiscal 2001, the Company purchased 500,000 shares of the Company's outstanding common stock at a cost of $11.1 million. The Company has determined that it may purchase additional shares from time to time in the open market and in negotiated transactions. Purchase of additional shares will be based on market conditions and other relevant factors. No share repurchases are presently anticipated in the fourth quarter of fiscal 2001. Contingencies The Company is involved in various claims and lawsuits incidental to its business. In the opinion of management, these claims and suits in the aggregate will not have a material adverse affect on the Company's consolidated financial statements. Segments of Business The Company's operations consist of the following business segments: (1) the Railcar Group, which manufactures and sells railcars; (2) the Inland Barge Group, which manufactures barges and related products for inland waterway services; (3) the Parts & Services Group, which manufactures and sells various parts to manufacturers of railcars and other industrial products and provides services such as railcar maintenance, fleet management, and leasing; (4) the Highway Construction Products Group, which is primarily engaged in the manufacture of highway guardrail and safety products and girders, beams, and columns used in the construction of highway and railway bridges; (5) the Concrete & Aggregate Group, composed of ready-mix concrete and aggregate; and (6) the Industrial Group, which manufactures and sells containers, weld fittings (tee, elbows, reducers, and caps) used in pressure piping systems, and pressure and non-pressure containers for the storage and transportation of liquefied gases and other liquid and dry products. Finally, All Other includes transportation services, the Company's captive insurance company, and other peripheral businesses. The financial information for the year to date and quarter ended December 31, 2000 and 1999 is shown in tables below. Nine months ended December 31, 2000 (unaudited) (in millions) <TABLE> <CAPTION> Operating Revenues Profit (Loss) ------------------------------------------------- After 2nd & 3rd Outside Intersegment Total Qtr Charges ------------ ------------ ------------ --------------- <S> <C> <C> <C> <C> Railcar Group .......................... $ 586.1 $ 3.4 $ 589.5 $ 19.6 Inland Barge Group ..................... 140.6 -- 140.6 11.2 Parts & Services Group ................. 226.2 51.6 277.8 (1.4) Highway Construction Products Group .... 164.9 -- 164.9 27.0 Concrete & Aggregate Group ............. 182.3 -- 182.3 12.8 Industrial Group ....................... 147.5 0.7 148.2 (4.9) All Other .............................. 38.0 30.7 68.7 (10.9) Eliminations and Corporate Items ....... -- -- (86.4) (61.3) ----------- ----------- Consolidated Total ..................... $ 1,485.6 $ (7.9) =========== =========== </TABLE> 9
10 Nine months ended December 31, 1999 (unaudited) (in millions) <TABLE> <CAPTION> Revenues Operating ------------------------------------------------ Profit Outside Intersegment Total (Loss) ------------ ------------ ------------ ------------ <S> <C> <C> <C> <C> Railcar Group................................. $ 1,164.4 $ 5.2 $ 1,169.6 $ 126.3 Inland Barge Group ........................... 154.2 -- 154.2 20.1 Parts & Services Group ....................... 231.7 97.3 329.0 59.9 Highway Construction Products Group .......... 151.4 -- 151.4 28.8 Concrete & Aggregate Group ................... 189.2 -- 189.2 21.4 Industrial Group ............................. 162.1 0.9 163.0 12.0 All Other .................................... 41.2 47.1 88.3 3.3 Eliminations and Corporate Items ............. -- -- (150.5) (48.7) ------------ ------------ Consolidated Total ........................... $ 2,094.2 $ 223.1 ============ ============ </TABLE> Three months ended December 31, 2000 (unaudited) (in millions) <TABLE> <CAPTION> Operating Revenues Profit (Loss) ------------------------------------------------- After 3rd Outside Intersegment Total Qtr Charges ------------ ------------ ------------ ------------ <S> <C> <C> <C> <C> Railcar Group................................. $ 133.3 $ 1.2 $ 134.5 $ 9.8 Inland Barge Group ........................... 39.8 -- 39.8 2.1 Parts & Services Group ....................... 69.1 18.3 87.4 (11.7) Highway Construction Products Group .......... 43.4 -- 43.4 4.6 Concrete & Aggregate Group ................... 50.9 -- 50.9 0.8 Industrial Group ............................. 48.5 0.1 48.6 (4.2) All Other .................................... 16.2 2.8 19.0 (8.8) Eliminations and Corporate Items ............. -- -- (22.4) (23.1) ------------ ------------ Consolidated Total ........................... $ 401.2 $ (30.5) ============ ============ </TABLE> Three months ended December 31, 1999 (unaudited) (in millions) <TABLE> <CAPTION> Revenues Operating ------------------------------------------------ Profit Outside Intersegment Total (Loss) ------------ ------------ ------------ ------------ <S> <C> <C> <C> <C> Railcar Group ......................... $ 402.9 $ 1.2 $ 404.1 $ 42.6 Inland Barge Group .................... 48.4 -- 48.4 6.4 Parts & Services Group ................ 74.0 30.6 104.6 16.8 Highway Construction Products Group ... 45.5 -- 45.5 7.8 Concrete & Aggregate Group ............ 60.0 -- 60.0 6.1 Industrial Group ...................... 55.7 0.4 56.1 4.1 All Other ............................. 14.3 15.9 30.2 0.9 Eliminations and Corporate Items ...... -- -- (48.1) (15.9) ------------ ------------ Consolidated Total .................... $ 700.8 $ 68.8 ============ ============ </TABLE> 10
11 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Nine Months Ended December 31, 2000 Compared to Nine Months Ended December 31,1999 Revenues for the first nine months of fiscal 2001 were $1,485.6 million compared to $2,094.2 million for the first nine months of fiscal 2000. Excluding the 2nd and 3rd quarter charges described earlier, operating profit was $77.2 million compared to $223.1 million for the same period last year. The decrease is primarily due to reduced railcar shipments and related declines in railcar parts and service sales. Third quarter results in non-railcar segments of the company were impacted by the winter weather which has temporarily delayed shipments within the construction-related businesses. Railcar Group operating profit, excluding the 2nd and 3rd quarter charges, was $40.7 million compared to $126.3 million for the same period last year. Revenues declined due to the current downturn in the North American railcar industry. Operating profit margins were impacted by the lower revenues, changeover costs of production lines to different car types, and start-up costs associated with new products. Included in revenues for the second quarter were sales of railcars from the Company's lease fleet of approximately $47.5 million, which resulted in operating profits of approximately $8.5 million. Comparison to the prior year for Railcar Group operating profit is affected by the level of railcars delivered to customers of Trinity's leasing company. Sales to Trinity's leasing company are eliminated in consolidation and profits are deferred and amortized over the life of the asset. For the first nine months of the current fiscal year, sales to the leasing company were $162.4 million while profit was $10.9 million. This compares with sales and profit on cars sold to the lease fleet of $29.9 million and $4.3 million, respectively, for the first nine months of the previous year. In the Inland Barge Group, operating profit, excluding the 2nd and 3rd quarter charges, was $15.6 million compared to $20.1 million for the same period last year. The declines in revenues and operating profit in comparison to the prior year are predominately the result of reduced sales prices, primarily on hopper barges, due to competitive markets. Operating profit in the Parts & Services Group, excluding the 2nd and 3rd quarter charges, was $23.8 million compared to $59.9 million for the same period last year. This decrease in revenues and operating profit is primarily due to the downturn in the railcar market and operating profit was also impacted by start-up costs related to a non-railcar parts business. Revenues for the Highway Construction Products Group increased due to a strong construction market. Operating profit margins were impacted by an increased proportion of revenues coming from bridge sales, which have lower margins. Decreased operating profit in the Concrete & Aggregates Group was primarily due to competitive pricing in certain markets and a significant increase in bad weather in our market area compared to the prior year. 11
12 In the Industrial Group, operating profit, excluding the 2nd and 3rd quarter charges, decreased to $9.6 million from $12.0 million. Reduced revenues and operating profit is primarily a result of competitive pricing pressure and the impact of exiting the flange and valve business. In the nine months ended December 31, 2000, selling, engineering and administrative expenses excluding 2nd and 3rd charges, increased to $148.4 million from $135.7 million in comparison to the same period last year due to approximately $10.2 million related to certain of the Company's e-commerce initiatives and costs related to the increase in international activities and new products which were partially offset by staffing and other cost reductions. Three Months Ended December 31, 2000 Compared to Three Months Ended December 31, 1999 Revenues for the third quarter of fiscal 2001 were $401.2 million compared to $700.8 million for the third quarter of fiscal 2000 primarily due to reduced railcar shipments and related declines in railcar parts and services sales. Operating profit, excluding the 3rd quarter charges, was $5.7 million compared to $68.8 million. Railcar Group operating profit was $9.8 million compared to $42.6 million for the same period last year. Results declined due to the current downturn in the North American railcar industry. Operating profit margins were impacted by the lower volumes, changeover of the production lines to different car types, and start up costs associated with new products. Comparison to the prior year for Railcar Group revenues and operating profit is affected by the level of railcars delivered to customers of Trinity's leasing company. Approximately 42% of railcar deliveries for the current quarter were to the Company's leasing fleet. Sales to Trinity's leasing company are eliminated in consolidation and profits are deferred and amortized over the life of the asset. For the current quarter, sales to the leasing company were $95.7 million while profit was $6.0 million. This compares with sales and profit on cars sold to the lease fleet of $9.3 million and $1.0 million, respectively, for the same quarter a year ago. In the Inland Barge Group, operating profit, excluding the 3rd quarter charges, was $2.8 million compared to $6.4 million for the same period last year. The declines are predominately the result of reduced sales prices, primarily on hopper barges, due to very competitive markets. In the Parts & Service Group, operating profit, excluding the 3rd quarter charges, was $7.3 million compared to $16.8 million for the same period last year. This decrease in revenues and operating profit is primarily due to the downturn in the railcar market and operating profit was also impacted by start-up costs related to a non-railcar parts business. Current quarter revenues and operating profit margins in the Highway Construction Products Group were negatively affected by periods of harsh winter weather which temporarily delayed shipments. Operating profit margins were also impacted by an increased proportion of revenues coming from bridge sales which have lower margins. Decreased operating profit in the Concrete & Aggregate Group was primarily due to competitive pricing in certain markets and to the bad weather conditions discussed earlier. In the Industrial Group, operating profit, excluding the 3rd quarter charges, was $3.8 million compared to $4.1 million for the same period last year. Reduced revenues and operating profit in the Industrial Group is primarily a result of 12
13 competitive pricing pressure and the impact of exiting the flange and valve business. In the quarter ended December 31, 2000, selling, engineering and administrative expenses, excluding third quarter charges, were $49.9 million compared to $45.6 million for the same period last year due to an increase of approximately $5.1 million related to certain of the Company's e-commerce initiatives and costs related to international activities and new products which were partially offset by staffing and other cost reductions. Liquidity & Capital Resources Net cash provided by operating activities decreased to $67.3 million for the first nine months of fiscal 2001 compared to $153.7 million for the first nine months of fiscal 2000. Capital expenditures during the first nine months of fiscal 2001 were approximately $240.6 million of which approximately $163.8 million was for additions to the Company's lease fleet. This compares to $105.9 million of capital expenditures in the first nine months of fiscal 2000 of which $31.5 million was for additions to the Company's lease fleet. Expenditures for business acquisitions were $13.7 million. Proceeds from the sale of property, plant and equipment were $55.8 million in the first nine months of fiscal 2001 compared to $53.1 million in fiscal 2000. In the first nine months of fiscal 2001, the Company repurchased approximately 1.6 million shares of common stock for $34.6 million. The Company believes cash provided from operations and cash available under uncommitted bank lines of credit will be sufficient to meet its requirements for the remainder of the fiscal year. The Company expects to refinance existing short-term debt, which is primarily money market borrowings, with a combination of committed bank facilities and long-term debt during the next fiscal year. ---------- Any statements contained herein that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and involve risks and uncertainties. These forward-looking statements include expectations, beliefs, plans, objectives, future financial performance, estimates, projections, goals and forecasts. Potential factors which could cause the Company's actual results of operations to differ materially from those in the forward-looking statements include market conditions and demand for the Company's products; competition; technologies; steel prices; interest rates and capital costs; taxes; unstable governments and business conditions in emerging economies; and legal, regulatory and environmental issues. Any forward-looking statement speaks only as of the date on which such statement is made. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made. 13
14 Part II Item 6 - Exhibits and Reports on Form 8-K (a) Exhibits Exhibit Number Description 10.1 Form of Amended and Restated Executive Severance Agreement dated November 7, 2000, entered into between the Registrant and the Chief executive Officer, each of the four most highly paid executive officers other than the Chief Executive Officer who were serving as executive officers at the end of the last completed fiscal year, three other executive officers, and two executive officers of subsidiaries of the Registrant * 10.2 Form of Amended and Restated Executive Severance Agreement dated November 7, 2000, entered into between the Registrant and eight executive officers and fourteen divisional officers of the Registrant * * Management contracts (b) No Form 8-K was filed during the quarter. ---------- Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Trinity Industries, Inc. By: /s/ Jim S. Ivy ---------------------------- Jim S. Ivy Vice President and Chief Financial Officer February 14, 2001 14
15 EXHIBIT INDEX <TABLE> <CAPTION> EXHIBIT NUMBER DESCRIPTION - ------- ----------- <S> <C> 10.1 Form of Amended and Restated Executive Severance Agreement dated November 7, 2000, entered into between the Registrant and the Chief executive Officer, each of the four most highly paid executive officers other than the Chief Executive Officer who were serving as executive officers at the end of the last completed fiscal year, three other executive officers, and two executive officers of subsidiaries of the Registrant * 10.2 Form of Amended and Restated Executive Severance Agreement dated November 7, 2000, entered into between the Registrant and eight executive officers and fourteen divisional officers of the Registrant * </TABLE> * Management contracts