Trinity Industries, Inc. Announces Accelerated Share Repurchase Program and Updates 2019 Earnings Guidance
November 16 2018 - 8:30AM
Business Wire
Trinity Industries, Inc. (NYSE: TRN) (“Trinity” or the
“Company”) announced today that the Company has entered into an
accelerated share repurchase (“ASR”) program with JPMorgan Chase
Bank, National Association (“JPMorgan”) to repurchase $350 million
of its common stock. The accelerated share repurchase program will
complete Trinity’s current share repurchase authorization for an
aggregate of $500 million of its common stock. Trinity will fund
the accelerated share repurchase with proceeds received from an
increase in borrowing under the Amended and Restated Term Loan
Agreement of Trinity Rail Leasing 2017 LLC.
Additionally, today the Company updated its full year 2019
earnings per share guidance to $1.15 to $1.35 from the range of
$0.90 to $1.10, which was previously provided with the third
quarter 2018 earnings announcement. The guidance was updated due to
the projected impact of the ASR program and orders received for new
railcars since the issuance of the prior guidance. The Company now
expects 2019 railcar deliveries of 23,500 to 25,500 as compared to
the prior guidance of 22,500 to 24,000 railcars.
The Company’s previous earnings guidance provided in the third
quarter 2018 quarterly earnings announcement did not include the
ASR program announced today. The ASR program is expected to benefit
2019 earnings per share by approximately $0.13, based on the
closing stock price on November 15, 2018. Through September 30,
2018, Trinity has repurchased approximately 4.3 million shares for
a total of $150 million under the current authorization. As of
October 17, 2018, the company had total shares outstanding of
approximately 146.3 million shares.
“The accelerated share repurchase program and amended leased
railcar financing are consistent with Trinity’s goal to optimize
its capital structure and improve returns through opportunistic
investment in the business, while returning value to shareholders,”
said Tim Wallace, Trinity’s Chairman, Chief Executive Officer and
President.
Under the terms of the ASR, Trinity has agreed to repurchase
from JPMorgan $350 million of its common stock, with an initial
delivery of approximately 12.9 million shares, representing
approximately 80% of the notional amount of the ASR based on the
closing price of $21.74 on November 15, 2018. The final number of
shares to be repurchased will be based on the average of Trinity’s
daily volume-weighted average stock price, less a discount, during
the term of the ASR program, which is expected to be completed by
the end of the first quarter of 2019. The ASR program is expected
to commence on Monday, November 19, 2018.
The Company amended a previous term loan agreement of Trinity
Rail Leasing 2017 LLC, a Delaware limited liability company ("TRL
2017") and a limited purpose, indirect wholly-owned subsidiary of
the Company, owned through Trinity Industry Leasing Company. TRL
2017 originally issued $302.4 million of promissory notes (the
"2017 Promissory Notes") on May 15, 2017, due May 15, 2024. The
2017 Promissory Notes are obligations of TRL 2017, secured by a
portfolio of railcars and operating leases thereon, certain cash
reserves, and other assets, and are non-recourse to Trinity. TRL
2017 has entered into an Amended and Restated Term Loan Agreement,
which has increased the amount of the 2017 Promissory Notes to
$663.0 million. Additionally, TRL 2017 has entered into an interest
rate hedging agreement on which it pays a fixed rate of interest on
60% of the outstanding principal amount. The remaining 40% of the
outstanding principal amount bears interest at LIBOR plus a margin
for a combined all-in current interest rate of 4.3%, payable
monthly and are now due November 8, 2025.
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 rail-related businesses
market their railcar products and services under the trade name
TrinityRail®. The TrinityRail integrated business platform provides
railcar manufacturing, maintenance and modifications, as well as
railcar leasing and management services. Trinity also owns
businesses engaged in the manufacture of products used on the
nation’s roadways and in traffic control, as well as logistical and
transportation businesses that provide support services to a
variety of industrial manufacturers. Trinity reports its financial
results in three principal business segments: the Rail Group, the
Railcar Leasing and Management Services Group, and the All Other
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.
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version on businesswire.com: https://www.businesswire.com/news/home/20181116005036/en/
Jessica L. GreinerVice President, Investor Relations and
CommunicationsTrinity Industries, Inc.(Investors)
214/631-4420(Media Line) 214/589-8909
Trinity Industries (NYSE:TRN)
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