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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 8-K/A
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 28, 2008
THE GREENBRIER COMPANIES, INC.
(Exact name of registrant as specified in its charter)
Commission File No. 1-13146
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Oregon
(State of Incorporation)
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93-0816972
(I.R.S. Employer Identification No.) |
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One Centerpointe Drive, Suite 200, Lake Oswego, OR
(Address of principal executive offices)
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97035
(Zip Code) |
(503) 684-7000
(Registrants telephone number, including area code)
Former name or former address, if changed since last report: N/A
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.01 Completion of Acquisition or Disposition of Assets
On April 3, 2008, The Greenbrier Companies, Inc. (the Company) filed with the Securities and
Exchange Commission a Current Report on Form 8-K disclosing that the Company and its subsidiary
Gunderson Rail Services, an Oregon limited liability company, completed the previously announced
acquisition of substantially all of the operating assets of American Allied Railway Equipment Co.,
Inc., an Illinois corporation, American Allied Freight Car Co., Inc., an Illinois corporation, and
American Allied Equipment Co. South, L.L.C., a Georgia limited liability company, (collectively,
American Allied) related to the sellers wheel maintenance services and parts reconditioning
businesses.
In accordance with Item 9.01(a) and (b) of Form 8-K, the Current Report filed April 3, 2008
did not include the historical financial statements of American Allied or the unaudited pro forma
combined financial information of the Company and American Allied (collectively, the Financial
Information), and instead contained an undertaking subsequently to file the required Financial
Information. This amendment is being filed for the purpose of satisfying the Companys undertaking
to file the Financial Information required by Item 9.01(a) and (b) of Form 8-K, and this amendment
should be read in conjunction with the Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits
(a) Financial Statements of Business Acquired.
The following financial statements of American Allied are included in this report:
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American Allied Railway Equipment Co., Inc. Consolidated Financial Statements for the
Year Ended December 31, 2007. |
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§ |
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Unaudited Consolidated Condensed Interim Financial Statements of American Allied
Railway Equipment Co., Inc. for the three months ended March 28, 2008 and March 31, 2007. |
(b) Pro Forma Financial Information.
The following pro forma financial information of the Company and American Allied is included
in this report:
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§ |
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Unaudited Pro Forma Condensed Combined Statement of Operations for the Year Ended
August 31, 2007 and Unaudited Pro Forma Condensed Combined Balance Sheet as of August 31,
2007. |
American Allied Railway Equipment Co., Inc.
Consolidated Financial Statements
and Independent Auditors Report
As of December 31, 2007
and for the Year Ended December 31, 2007
INDEPENDENT AUDITORS REPORT
To the Board of Directors and Stockholders of
American Allied Railway Equipment Company, Inc.
Washington, IL
We have audited the accompanying consolidated balance sheet of American Allied Railway Equipment
Company, Inc. (the Company) as of December 31, 2007, and the related statements of income,
stockholders equity, and cash flows for the year then ended. These financial statements are the
responsibility of the Companys management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An audit
includes consideration of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Companys internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material respects, the financial
position of the Company as of December 31, 2007, and the results of its operations and its cash
flows for the year then ended in conformity with accounting principles generally accepted in the
United States of America.
/s/ Deloitte & Touche LLP
Portland, Oregon
June 11, 2008
2
American Allied Railway Equipment Co., Inc.
Consolidated Balance Sheet
December 31, 2007
(In thousands)
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
2,497 |
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Accounts receivable, net |
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8,446 |
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Inventories |
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12,855 |
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Prepaid expenses and other current assets |
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3 |
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Total current assets |
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23,801 |
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Property, plant and equipment, net |
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7,942 |
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Goodwill |
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5 |
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Total Assets |
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$ |
31,748 |
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Liabilities and Stockholders Equity |
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Current liabilities: |
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Accounts payable |
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$ |
3,650 |
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Accrued expenses |
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1,779 |
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Debt, current portion |
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339 |
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Total current liabilities |
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5,768 |
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Debt, long-term portion |
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982 |
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Total Liabilities |
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6,750 |
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Minority interest in limited liability corporation |
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4,216 |
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Stockholders Equity |
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Common stock, no par value; 9,600 shares
authorized; 8,160 shares issued and outstanding |
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82 |
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Retained earnings |
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20,700 |
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Total Stockholders Equity |
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20,782 |
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Total Liabilities and Stockholders Equity |
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$ |
31,748 |
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See
notes to the Consolidated Financial Statements
3
American Allied Railway Equipment Co., Inc.
Consolidated Statement of Operations
Year Ended December 31, 2007
(In thousands)
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Net sales |
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$ |
94,175 |
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Cost of goods sold |
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72,744 |
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Gross Profit |
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21,431 |
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Selling and administrative expense |
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8,967 |
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Operating Income |
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12,464 |
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Interest expense, net |
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101 |
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Other income |
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(74 |
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Earnings before income tax and minority interest |
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12,437 |
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Income tax |
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52 |
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Earnings before minority interest |
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12,385 |
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Minority interest |
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2,081 |
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Net earnings |
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$ |
10,304 |
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See
notes to the Consolidated Financial Statements
4
American Allied Railway Equipment Co., Inc.
Statement of Stockholders Equity
Year Ended December 31, 2007
(In thousands)
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Total |
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Common |
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Retained |
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Stockholders |
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Stock |
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Earnings |
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Elimination |
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Equity |
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Balance, January 1, 2007 |
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$ |
82 |
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$ |
21,295 |
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$ |
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$ |
21,377 |
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Net earnings |
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10,865 |
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(561 |
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10,304 |
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Dividends paid |
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(11,460 |
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561 |
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(10,899 |
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Balance, December 31, 2007 |
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$ |
82 |
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$ |
20,700 |
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$ |
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$ |
20,782 |
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See
notes to the Consolidated Financial Statements
5
American Allied Railway Equipment Co., Inc.
Consolidated Statement of Cash Flow
Year Ended December 31, 2007
(In thousands)
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Cash flows from operating activities: |
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Net earnings |
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$ |
10,304 |
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Adjustments to reconcile net earnings to net cash provided by
operating activities: |
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Depreciation |
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1,143 |
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Deferred income taxes |
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(72 |
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Minority interest |
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2,081 |
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Gain on sales of equipment |
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(3 |
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Decrease (increase) in assets: |
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Accounts receivable |
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708 |
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Inventories |
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3,733 |
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Prepaid expenses |
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21 |
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Increase (decrease) in liabilities: |
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Accounts payable |
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(1,192 |
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Accrued expenses |
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722 |
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Net cash provided by operating activities |
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17,445 |
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Cash flows from investing activities: |
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Purchase of property, plant and equipment |
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(1,873 |
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Proceeds from sales of equipment |
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9 |
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Net cash used in investing activities |
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(1,864 |
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Cash flows from financing activities: |
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Net repayments of notes payable |
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(1,896 |
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Repayment of long-term debt |
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(326 |
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Dividends |
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(10,899 |
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Net cash used in financing activities |
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(13,121 |
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Increase in cash |
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2,460 |
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Cash and cash equivalents: |
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Beginning of period |
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37 |
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End of period |
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$ |
2,497 |
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Cash paid during the period for: |
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Interest |
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$ |
119 |
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Income taxes |
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$ |
132 |
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See
notes to the Consolidated Financial Statements
6
American Allied Railway Equipment Co., Inc.
Notes to Financial Statements
Year Ended December 31, 2007
Note 1 Nature of Business and Significant Accounting Polices
Nature of business: American Allied Railway Equipment Co., Inc. (the Company) is the
parent corporation of American Allied Freight Car Co., Inc. The Company owns all of the outstanding
common stock of the subsidiary. The Company and American Allied Freight Car Co., Inc. are involved
in the repair and assembly of railroad car wheels and railroad car parts, respectively, primarily
to the railroad industry throughout the Midwest and Mideastern United States. Their operations and
offices are located in the Peoria, Illinois area.
The Company has a 51% member interest in American Allied Railway Equipment Co. South, L.L.C., a
limited liability company (L.L.C.), which is involved in the repair and assembly of railroad car
wheels and axles, primarily to the nonpassenger railroad industry in the Southeastern United
States. Its operations and offices are located in Macon, Georgia.
The Company is also affiliated with American Allied Railway Equipment Company (a partnership) and
American Allied Holding Co., L.L.C. as a result of its stockholders interest in these entities.
American Allied Railway Equipment Company Partnership is involved in the leasing of land and
buildings to the Company. American Allied Holding Co., L.L.C. is involved in leasing land and
buildings to American Allied Railway Equipment Company South, L.L.C.
The significant accounting policies are as follows:
Principles of consolidation: The consolidated financial statements include the accounts of
the Company and its wholly owned subsidiary, and American Allied Railway Equipment Co. South,
L.L.C. All significant intercompany accounts and transactions are eliminated in consolidation.
Revenue recognition: Revenue is generally recognized when goods are shipped or when
services are performed.
Cash and cash equivalents: For purposes of reporting the consolidated statement of cash
flows, the Company considers money market funds purchased with a maturity of three months or less
to be cash equivalents. The Company maintains its cash in bank deposit accounts which, at times,
may exceed federally insured limits. The Company has not experienced any losses in such accounts
and believes it is not exposed to any significant credit risk on cash.
Trade receivables: Trade receivables are carried at original invoice amount less an
estimate made for doubtful receivables based on a review of all outstanding amounts on a monthly
basis. Management determines the need for an allowance for doubtful accounts by regularly
evaluating individual customer receivables and considering a customers financial condition, credit
history, and current economic conditions. Trade receivables are written off when deemed
uncollectible. Recoveries of trade receivables previously written off are recorded when received.
A trade receivable is considered to be past due if any portion of the receivable balance is
outstanding for more than 90 days. Interest is not charged on past due trade receivables. The
Company generally does not require collateral on trade receivables.
Inventories: Inventories are stated at the lower of cost (first-in, first-out method) or
market.
Property and equipment: Property and equipment are carried at cost less accumulated
depreciation. Depreciation is computed over estimated useful lives using the straight-line method.
It is the Companys policy to include amortization expense on leasehold interest in land and
buildings with depreciation expense on owned assets.
7
Estimated useful lives are as follows:
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Leasehold improvements
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5 to 40 years |
Equipment
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5 to 10 years |
Vehicles
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3 to 5 years |
Furniture and fixtures
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5 to 7 years |
Goodwill: The Company records as goodwill the excess of purchase price over the fair value
of the identifiable net assets acquired. Statements of Financial Accounting Standards (SFAS) No.
142, Goodwill and Other Intangible Assets, prescribes a two-step process for impairment testing of
goodwill, which is performed annually, as well as when an event triggering impairment may have
occurred. The first step tests for impairment, while the second step, if necessary, measures the
impairment. No indicators of impairment were identified during the 2007 fiscal year.
Income taxes: The Company has elected under provisions of the Internal Revenue Code
(Subchapter S) to have its income treated for federal income tax purposes substantially as if the
Company were a partnership. Since a Subchapter S corporation, as such, is not liable for federal
income taxes, the financial statements do not reflect a provision for federal income taxes for the
Company. However, a provision for Illinois state replacement taxes is included.
Use of estimates in the preparation of consolidated financial statements: The preparation
of financial statements in conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual results could differ from those
estimates.
Note 2 Inventories
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December 31, |
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(In thousands) |
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2007 |
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Manufacturing supplies and raw materials |
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$ |
10,672 |
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Finished goods |
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3,197 |
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Lower of cost or market adjustment |
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(1,014 |
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$ |
12,855 |
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Note 3- Property, Plant and Equipment
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December 31, |
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(In thousands) |
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2007 |
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Leasehold improvements |
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$ |
3,851 |
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Equipment |
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13,174 |
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Vehicles |
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1,166 |
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Furniture and fixtures |
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36 |
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18,227 |
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Accumulated depreciation |
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(10,285 |
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$ |
7,942 |
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8
Note 4 Debt
The Company has a $6 million line-of-credit agreement which expires August 2008 with a credit
union. Borrowings under this line bear interest at 1/2% below the credit unions prime rate (an
effective rate of 6.75% at December 31, 2007). Advances against this line are collateralized by
all assets of the Company and by the guarantee of the stockholder and his spouse. At December 31,
2007 no borrowings were outstanding under this line-of-credit.
American Allied Railway Equipment Co. South, L.L.C. has a $1million line-of-credit agreement
which expires August 2008 with a credit union. Borrowings under this line bear interest at 1/2%
below the credit unions prime rate (an effective rate of 6.75% at December 31, 2007). Advances
against this line are collateralized by all assets of the Company and by the guarantee of the
stockholder and his wife. At December 31, 2007 no borrowings were outstanding under this
line-of-credit.
During 2004, the Company entered into a long-term note agreement with a credit union that allows
total borrowings up to $925 thousand. The outstanding balance of this note was $398 thousand at
December 31, 2007. Debt payments are $13 thousand a month including principal and interest at 5.5%
regardless of the total amount outstanding. The loan maturity date is May 2010.
During 2004, the Company entered into a long-term note agreement with a credit union that allows
total borrowings up to $450 thousand. The outstanding balance of this note was $308 thousand at
December 31, 2007. Debt payments are $5 thousand a month including principal and interest at 5.5%
regardless of the total amount outstanding. The loan maturity date is March 2014.
American Allied Freight Car Co. has a $500 thousand line-of-credit agreement with a bank which
expires August 2008. Borrowings under this line bear interest at the banks base rate. Advances
against this line are collateralized by the guarantees of the Parent Company and its stockholder
and spouse. At December 31, 2007 there were no outstanding borrowings under this line-of-credit.
During 2004, American Allied Freight Car Co. entered into a long-term note agreement with a bank
that allows total borrowings up to $516 thousand. The outstanding balance of this note was $347
thousand at December 31, 2007. Debt payments are $6 thousand a month including principal and
interest at 5% regardless of the total amount outstanding. The loan maturity date is August 2013.
During 2004, American Allied Freight Car Co. entered into a long-term note agreement with a bank
that allows total borrowings up to $549 thousand. The outstanding balance of this note was $268
thousand at December 31, 2007. Debt payments are $9 thousand a month including principal and
interest at 5.75% regardless of the total amount outstanding. The loan maturity date is August
2010.
9
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December 31, |
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(In thousands) |
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2007 |
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Notes payable, credit union, due in aggregate monthly
installments of $13 thousand including interest at 5.5%,
final installment due May 2010, collateralized by
substantially all assets of the Company |
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$ |
398 |
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Notes payable, credit union, due in aggregate monthly
installments of $5 thousand including interest at 5.5%,
final installment due March 2014, collateralized by
substantially all assets of the Company |
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308 |
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Notes payable, bank, due in aggregate monthly
installments of $6 thousand including interest at 5%,
final installment due August 2013, collateralized by
building |
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347 |
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Notes payable, bank, due in aggregate monthly
installments of $9 thousand including interest at 5.75%,
final installment due August 2010, collateralized by
equipment |
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268 |
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1,321 |
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Less current portion |
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|
339 |
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$ |
982 |
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Aggregate annual payments of long-term debt are due as follows during the years ending December 31:
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(In thousands) |
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2008 |
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$ |
339 |
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2009 |
|
|
357 |
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2010 |
|
|
290 |
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2011 |
|
|
119 |
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2012 |
|
|
126 |
|
thereafter |
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|
90 |
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$ |
1,321 |
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Note 5 Commitments and Contingencies
The Company and American Allied Freight Car Co., Inc. occupy buildings owned by an affiliated
partnership, American Allied Railway Equipment Company. The Companys stockholder and his spouse
are the only partners in the partnership. No written lease agreements have been prepared. The total
annual rent as of December 31, 2007, was $282 thousand per year plus property taxes, maintenance,
and insurance.
American Allied Railway Equipment Co. South, L.L.C. leases its land and buildings from American
Allied Holding Co., L.L.C. Currently, the Company is leasing on month-to-month basis at $16.5
thousand per month. The lease also requires the Company to pay all property taxes, normal
maintenance, and insurance on the property. The original lease agreement met the definition of a
capital lease, with the results that (1) the present value of the minimum lease payments at the
inception of the lease are recognized as an asset and are amortized, (2) the present value of
future lease payments is recognized as a liability and (3) amortization expense and interest
expense are
recognized rather than rent expense. The capital lease obligation and related future maturities
are included in Note 4.
10
The Company and its subsidiaries also rent various pieces of equipment and trucks from unrelated
lessors. The truck leases are noncancellable leases which require the Companies to make monthly
fixed lease payments totaling approximately $13 thousand through October 2012. The Company is
also charged an indirect amount based on the miles driven over the base. Total equipment and truck
rent expense was approximately $239 thousand for the year ended December 31, 2007.
Total rental expense, excluding executory costs, was approximately $719 thousand for the year ended
December 31, 2007.
Lease commitments as of December 31, 2007 are as follows:
(In
thousands)
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Year ending December 31, |
|
|
|
|
2008 |
|
$ |
154 |
|
2009 |
|
|
136 |
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2010 |
|
|
136 |
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2011 |
|
|
136 |
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2012 |
|
|
102 |
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|
|
|
|
|
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|
$ |
664 |
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Note 6 Customer Concentration
Net sales for the year ended December 31, 2007 include sales to two customers that accounted for
21% and 11% of net sales. These customers also represented 9% and 12% of trade accounts
receivable at December 31, 2007.
Note 7 Profit Sharing Plan
The Company has a defined contribution 401(k) profit sharing retirement plan covering substantially
all employees who have completed one year and one thousand hours of service, and attained the age
of 21. The Company matches 35% of the employees contribution up to 8% of their total eligible
salary. An employee is 100% vested in Company contributions after 5 years. Total profit sharing
expense including administration fees totaled approximately $105 thousand for the year ended
December 31, 2007.
Note 8 Intentions to Declare Dividends/Distributions
The Board of Directors intends to declare dividends/distributions to assist the
stockholders/members in paying income taxes on the income of the Company and Partnership and to
provide a return on investments to the stockholder/members. No provision has been made in the
accompanying consolidated financial statements for any amounts which may be advanced or paid as
dividends or distributions to the stockholder/members, when declared, subsequent to December 31,
2007.
Note 9 Subsequent Event
On January 24, 2008, the Company and subsidiaries along with its shareholders entered into a
definite agreement to sell substantially all of the operating assets of the Companies for $83
million in cash, plus or minus working capital adjustments, and the assumption of certain
liabilities. The sale closed on March 28, 2008.
11
Condensed Financial Statements
Consolidated Balance Sheets
(In thousands, Unaudited)
|
|
|
|
|
|
|
|
|
|
|
March 28, |
|
December 31 |
|
|
2008 |
|
2007 |
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
3,014 |
|
|
$ |
2,497 |
|
Accounts receivable, net |
|
|
8,946 |
|
|
|
8,446 |
|
Inventories |
|
|
13,170 |
|
|
|
12,855 |
|
Prepaid expenses and other current assets |
|
|
188 |
|
|
|
3 |
|
|
|
|
Total current assets |
|
|
25,318 |
|
|
|
23,801 |
|
|
|
|
|
|
|
|
|
|
Non-current assets: |
|
|
|
|
|
|
|
|
Property, plant and equipment |
|
|
7,875 |
|
|
|
7,942 |
|
Goodwill |
|
|
5 |
|
|
|
5 |
|
|
|
|
|
|
$ |
33,198 |
|
|
$ |
31,748 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders Equity |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
|
4,184 |
|
|
|
3,650 |
|
Accrued expenses |
|
|
1,507 |
|
|
|
1,779 |
|
Debt, current portion |
|
|
343 |
|
|
|
339 |
|
|
|
|
Total current liabilities |
|
|
6,034 |
|
|
|
5,768 |
|
|
|
|
|
|
|
|
|
|
Long-term liabilities: |
|
|
|
|
|
|
|
|
Debt, long-term portion |
|
|
902 |
|
|
|
982 |
|
|
|
|
Total liabilities |
|
|
6,936 |
|
|
|
6,750 |
|
|
|
|
|
|
|
|
|
|
Minority interest in limited liability corporation |
|
|
4,789 |
|
|
|
4,216 |
|
|
|
|
|
|
|
|
|
|
Stockholders equity |
|
|
|
|
|
|
|
|
Common stock, no par value; 9,600 shares
authorized; 8,160 shares issued and outstanding |
|
|
82 |
|
|
|
82 |
|
Retained earnings |
|
|
21,391 |
|
|
|
20,700 |
|
|
|
|
|
|
|
21,473 |
|
|
|
20,782 |
|
|
|
|
|
|
$ |
33,198 |
|
|
$ |
31,748 |
|
|
|
|
Consolidated Statements of Operations
(in thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 28, |
|
March 31, |
|
|
2008 |
|
2007 |
Revenue |
|
$ |
22,251 |
|
|
$ |
24,835 |
|
|
|
|
|
|
|
|
|
|
Cost of revenue |
|
|
16,962 |
|
|
|
19,982 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Margin |
|
|
5,289 |
|
|
|
4,853 |
|
|
|
|
Other costs |
|
|
|
|
|
|
|
|
Selling and administrative expense |
|
|
2,220 |
|
|
|
1,982 |
|
Interest expense |
|
|
18 |
|
|
|
23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income tax and minority interest |
|
|
3,051 |
|
|
|
2,848 |
|
Income tax expense |
|
|
(34 |
) |
|
|
|
|
|
|
|
Earnings before minority interest |
|
|
3,017 |
|
|
|
2,848 |
|
Minority interest |
|
|
(574 |
) |
|
|
(461 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
2,443 |
|
|
$ |
2,387 |
|
|
|
|
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 1 Interim Financial Statements
The Condensed Consolidated Financial Statements of American Allied Railway Equipment Co., Inc. (the
Company) as of March 28, 2008 and for the three months ended March 28, 2008 and March 31, 2007 have
been prepared without audit in accordance with accounting principles generally accepted in the
United States for interim financial information and reflect all adjustments (consisting of normal
recurring accruals) which, in the opinion of management, are necessary for a fair presentation of
the financial position and operating results for the periods indicated. The results of operations
for the three months ended March 28, 2008 are not necessarily indicative of the results to be
expected for the entire year ending December 31, 2008. All dollar amounts in the notes to
consolidated financial statements are presented in thousand of U.S. dollars and all significant
intercompany accounts and transactions have been eliminated.
Certain notes and other information have been condensed or omitted from the interim financial
statements presented in this Current Report on Form 8-K/A. Therefore, these financial statements
should be read in conjunction with the Consolidated Financial Statements contained in the Companys
2007 Consolidated Financial Statements in this Form 8-K/A.
Management estimates - The preparation of financial statements in conformity with generally
accepted accounting principles in the United States requires management to make estimates and
assumptions that affect the amount of assets, liabilities, revenue and expenses reported in the
financial statements and accompanying notes. Estimates and assumptions are periodically evaluated
and may be adjusted in future periods. Actual results could differ from those estimates.
Note 2 Inventories
Inventories consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
March 28, |
|
December 31, |
|
|
2008 |
|
2007 |
|
|
|
Raw materials |
|
$ |
10,355 |
|
|
$ |
10,672 |
|
Finished goods |
|
|
2,815 |
|
|
|
3,197 |
|
Lower of cost or market adjustment |
|
|
|
|
|
|
(1,014 |
) |
|
|
|
|
|
$ |
13,170 |
|
|
$ |
12,855 |
|
|
|
|
Note 3 Property, Plant and Equipment
Property, plant and equipment consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
March 28, |
|
December 31, |
|
|
2008 |
|
2007 |
|
|
|
Leasehold improvements |
|
$ |
3,851 |
|
|
$ |
3,851 |
|
Equipment |
|
|
13,498 |
|
|
|
13,174 |
|
Vehicles |
|
|
1,037 |
|
|
|
1,166 |
|
Furniture and fixtures |
|
|
36 |
|
|
|
36 |
|
|
|
|
|
|
|
18,422 |
|
|
|
18,227 |
|
Accumulated depreciation |
|
|
(10,547 |
) |
|
|
(10,285 |
) |
|
|
|
|
|
$ |
7,875 |
|
|
$ |
7,942 |
|
|
|
|
Note 4 Debt
The Company has a $6 million line-of-credit agreement which expires August 2008 with a credit
union. Borrowings under this line bear interest at 1/2% below the credit unions prime rate (an
effective rate of 4.75% at March 28, 2008). Advances against this line are collateralized by all
assets of the Company and by the guarantee of the stockholder and his spouse. At March 28, 2008 no
borrowings were outstanding under this line-of-credit.
American Allied Railway Equipment Co. South, L.L.C. has a $1 million line-of-credit agreement
which expires August 2008 with a credit union. Borrowings under this line bear interest at 1/2%
below the credit unions prime rate (an effective rate of 4.75% at March 28, 2008). Advances
against this line are collateralized by all assets of the Company and by the guarantee of the
stockholder and his wife. At March 28, 2008 no borrowings were outstanding under this
line-of-credit.
During 2004, the Company entered into a long-term note agreement with a credit union that allows
total borrowings up to $925 thousand. The outstanding balance of this note was $363 thousand at
March 28, 2008. Debt payments are $13 thousand a month including principal and interest at 5.5%
regardless of the total amount outstanding. The loan maturity date is May 2010.
During 2004, the Company entered into a long-term note agreement with a credit union that allows
total borrowings up to $450 thousand. The outstanding balance of this note was $298 thousand at
March 28, 2008. Debt payments are $5 thousand a month including principal and interest at 5.5%
regardless of the total amount outstanding. The loan maturity date is March 2014.
American Allied Freight Car Co. has a $500 thousand line-of-credit agreement with a bank which
expires August 2008. Borrowings under this line bear interest at the banks base rate. Advances
against this line are collateralized by the guarantees of the Parent
Company and its stockholder and spouse. At March 28, 2008 there were no outstanding borrowings
under this line-of-credit.
During 2004, American Allied Freight Car Co. entered into a long-term note agreement with a bank
that allows total borrowings up to $516 thousand. The outstanding balance of this note was $332
thousand at March 28, 2008. Debt payments are $6 thousand a month including principal and interest
at 5% regardless of the total amount outstanding. The loan maturity date is August 2013.
During 2004, American Allied Freight Car Co. entered into a long-term note agreement with a bank
that allows total borrowings up to $549 thousand. The outstanding balance of this note was $252
thousand at March 28, 2008. Debt payments are $9 thousand a month including principal and interest
at 5.75% regardless of the total amount outstanding. The loan maturity date is August 2010.
|
|
|
|
|
|
|
March 28, |
|
(In thousands) |
|
2008 |
|
Notes payable, credit union, due in aggregate monthly
installments of $13 thousand including interest at 5.5%, final
installment due May 2010, collateralized by substantially all
assets of the Company |
|
$ |
363 |
|
|
|
|
|
|
Notes payable, credit union, due in aggregate monthly
installments of $5 thousand including interest at 5.5%, final
installment due March 2014, collateralized by substantially all
assets of the Company |
|
|
298 |
|
|
|
|
|
|
Notes payable, bank, due in aggregate monthly installments of $6
thousand including interest at 5%, final installment due August
2013, collateralized by building |
|
|
332 |
|
|
|
|
|
|
Notes payable, bank, due in aggregate monthly installments of $9
thousand including interest at 5.75%, final installment due
August 2010, collateralized by equipment |
|
|
252 |
|
|
|
|
|
|
|
|
|
|
|
|
|
1,245 |
|
|
|
|
|
|
Less current portion |
|
|
343 |
|
|
|
|
|
|
|
$ |
902 |
|
|
|
|
|
The Greenbrier Companies, Inc.
Unaudited Pro Forma Condensed Combined Balance Sheet
August 31, 2007
(In Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Historical |
|
|
|
|
|
|
|
|
|
The Greenbrier |
|
|
American Allied |
|
|
|
|
|
|
|
|
|
Companies |
|
|
Railway Equipment Co. |
|
|
Pro Forma |
|
|
Pro Forma |
|
|
|
August 31, 2007 |
|
|
September 30, 2007 |
|
|
Adjustments |
|
|
Combined |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
20,808 |
|
|
$ |
1,527 |
|
|
$ |
(1,527 |
) (a) |
|
$ |
20,808 |
|
Restricted cash |
|
|
2,693 |
|
|
|
|
|
|
|
|
|
|
|
2,693 |
|
Accounts receivable |
|
|
157,038 |
|
|
|
8,191 |
|
|
|
717 |
(b) |
|
|
165,946 |
|
Inventory |
|
|
194,883 |
|
|
|
15,536 |
|
|
|
(2,883 |
) (b) |
|
|
207,536 |
|
Assets held for sale |
|
|
42,903 |
|
|
|
|
|
|
|
|
|
|
|
42,903 |
|
Equipment on operating leases |
|
|
294,326 |
|
|
|
|
|
|
|
|
|
|
|
294,326 |
|
Investment in direct finance leases |
|
|
9,040 |
|
|
|
|
|
|
|
|
|
|
|
9,040 |
|
Property, plant and equipment |
|
|
112,813 |
|
|
|
8,409 |
|
|
|
(859 |
) (b) |
|
|
120,363 |
|
Goodwill |
|
|
168,987 |
|
|
|
5 |
|
|
|
47,182 |
(c) |
|
|
216,174 |
|
Intangibles and other assets |
|
|
69,258 |
|
|
|
114 |
|
|
|
11,797 |
(c) |
|
|
81,169 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
1,072,749 |
|
|
$ |
33,782 |
|
|
$ |
54,427 |
|
|
$ |
1,160,958 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revolving notes |
|
$ |
39,568 |
|
|
$ |
357 |
|
|
$ |
82,809 |
(d) |
|
$ |
122,734 |
|
Accounts payable and accrued liabilities |
|
|
239,713 |
|
|
|
4,614 |
|
|
|
429 |
(b) |
|
|
244,756 |
|
Participation |
|
|
4,355 |
|
|
|
|
|
|
|
|
|
|
|
4,355 |
|
Deferred income tax |
|
|
61,410 |
|
|
|
|
|
|
|
|
|
|
|
61,410 |
|
Deferred revenue |
|
|
18,052 |
|
|
|
|
|
|
|
|
|
|
|
18,052 |
|
Notes payable |
|
|
460,915 |
|
|
|
1,402 |
|
|
|
(1,402 |
) (e) |
|
|
460,915 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Minority interest |
|
|
5,146 |
|
|
|
4,383 |
|
|
|
(4,383 |
) (f) |
|
|
5,146 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock |
|
|
16 |
|
|
|
82 |
|
|
|
(82 |
) (f) |
|
|
16 |
|
Additional paid in capital |
|
|
78,332 |
|
|
|
|
|
|
|
|
|
|
|
78,332 |
|
Retained earnings |
|
|
165,408 |
|
|
|
22,944 |
|
|
|
(22,944 |
) (f) |
|
|
165,408 |
|
Other comprehensive income |
|
|
(166 |
) |
|
|
|
|
|
|
|
|
|
|
(166 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders equity |
|
|
243,590 |
|
|
|
23,026 |
|
|
|
(23,026 |
) |
|
|
243,590 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders equity |
|
$ |
1,072,749 |
|
|
$ |
33,782 |
|
|
$ |
54,427 |
|
|
$ |
1,160,958 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of the unaudited pro forma condensed combined financial statements.
The Greenbrier Companies
Unaudited Pro Forma Condensed Combined Statement of Operations
For the Year Ended August 31, 2007
(In Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Historical |
|
|
|
|
|
|
|
|
|
The Greenbrier |
|
|
American Allied |
|
|
|
|
|
|
|
|
|
Companies |
|
|
Railway Equipment Co. |
|
|
|
|
|
|
|
|
|
Year Ended |
|
|
Year Ended |
|
|
Pro Forma |
|
|
Pro Forma |
|
|
|
August 31, 2007 |
|
|
September 30, 2007 |
|
|
Adjustments |
|
|
Combined |
|
REVENUE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Manufacturing |
|
$ |
738,424 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
738,424 |
|
Refurbishment & parts |
|
|
381,670 |
|
|
|
96,939 |
|
|
|
(47 |
) (g) |
|
|
478,562 |
|
Leasing |
|
|
103,734 |
|
|
|
|
|
|
|
|
|
|
|
103,734 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,223,828 |
|
|
|
96,939 |
|
|
|
(47 |
) |
|
|
1,320,720 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF REVENUE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Manufacturing |
|
|
680,908 |
|
|
|
|
|
|
|
|
|
|
|
680,908 |
|
Refurbishment & parts |
|
|
317,669 |
|
|
|
79,580 |
|
|
|
(32 |
) (g) |
|
|
397,217 |
|
Leasing |
|
|
45,818 |
|
|
|
|
|
|
|
|
|
|
|
45,818 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,044,395 |
|
|
|
79,580 |
|
|
|
(32 |
) |
|
|
1,123,943 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Margin |
|
|
179,433 |
|
|
|
17,359 |
|
|
|
(15 |
) |
|
|
196,777 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER COSTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and administrative |
|
|
83,414 |
|
|
|
1,588 |
|
|
|
794 |
(h) |
|
|
85,796 |
|
Interest expense |
|
|
39,915 |
|
|
|
132 |
|
|
|
3,344 |
(i) |
|
|
43,391 |
|
Special charges |
|
|
21,899 |
|
|
|
|
|
|
|
|
|
|
|
21,899 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
145,228 |
|
|
|
1,720 |
|
|
|
4,138 |
|
|
|
151,086 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before taxes and
unconsolidated subs |
|
|
34,205 |
|
|
|
15,639 |
|
|
|
(4,153 |
) |
|
|
45,691 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
(13,657 |
) |
|
|
(62 |
) |
|
|
(4,535 |
) (j) |
|
|
(18,254 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before unconsolidated
subs |
|
|
20,548 |
|
|
|
15,577 |
|
|
|
(8,688 |
) |
|
|
27,437 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Minority interest |
|
|
1,504 |
|
|
|
(3,097 |
) |
|
|
3,097 |
(k) |
|
|
1,504 |
|
Equity in unconsolidated subs |
|
|
(42 |
) |
|
|
|
|
|
|
|
|
|
|
(42 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
|
$ |
22,010 |
|
|
$ |
12,480 |
|
|
$ |
(5,591 |
) |
|
$ |
28,899 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings per common share: |
|
$ |
1.37 |
|
|
$ |
0.78 |
|
|
$ |
(0.35 |
) |
|
$ |
1.80 |
|
Diluted earnings per common share: |
|
$ |
1.37 |
|
|
$ |
0.78 |
|
|
$ |
(0.35 |
) |
|
$ |
1.80 |
|
|
Weight average common shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
16,056 |
|
|
|
16,056 |
|
|
|
16,056 |
|
|
|
16,056 |
|
Diluted |
|
|
16,094 |
|
|
|
16,094 |
|
|
|
16,094 |
|
|
|
16,094 |
|
The accompanying notes are an integral part of the unaudited pro forma condensed combined financial statements.
The Greenbrier Companies, Inc.,
Notes to Unaudited Pro Forma Condensed Combined Financial Statements
Note 1 Basis of Pro Forma Presentation
The unaudited pro forma condensed combined financial statements are based on historical
financial statements of The Greenbrier Companies Inc. (Greenbrier) and American Allied Railway
Equipment Co., Inc. (the Company) after giving effect to borrowings used to finance the
acquisition , as well as certain assumptions and adjustments.
The unaudited pro forma condensed combined balance sheet as of August 31, 2007 is presented as
if the acquisition and related bank financing occurred on August 31, 2007.
The unaudited pro forma condensed combined statement of operations of Greenbrier and the
Company for the year ended August 31, 2007 are presented as if the acquisition and related bank
financing had taken place on September 1, 2006. The Companys historical year end is December
31st. The unaudited pro forma condensed combined balance sheet and statement of operations
have been prepared using the twelve months ending September 30, 2007 for the Company.
Greenbrier accounts for acquisitions under Financial Accounting Standards Board Statement No.
141 Business Combinations (FASB No. 141). In accordance with business combination
accounting, Greenbrier allocates the purchase price of the acquired company to the tangible and
intangibles assets acquired and liabilities assumed based on their estimated fair values. The
excess of the purchase price over the net tangible and identifiable intangible assets is
assigned to goodwill.
The allocation of the purchase price among certain assets and liabilities is still in process.
As a result, the information shown below is preliminary and subject to further refinement upon
completion of analyses.
The unaudited pro forma condensed combined financial statements are not intended to represent
or be indicative of the consolidated results of operations or financial position of Greenbrier
that would have been reported had the acquisition and borrowings been completed as of the dates
presented, and should not be taken as representative of the future consolidated results of
operations or financial position of Greenbrier. The unaudited pro forma condensed combined
financial statements do not reflect any operating efficiencies and cost savings that Greenbrier
may achieve with respect to the combined companies.
The unaudited pro forma condensed combined financial statements should be read in conjunction
with the historical consolidated financial statements and accompanying notes of Greenbriers
Annual Report on Form 10-K for the year ending August 31, 2007, and the Quarterly Reports on
Form 10-Q for the quarters ended November 30,
2007 and February 29, 2008 and the financial statements of the Company included as Item 9.01
(a) in this Current Report on Form 8-K/A.
Note 2 Preliminary Purchase Price
American Allied Railway Equipment Company
On March 28, 2008
Greenbrier purchased substantially all of the operating assets of American
Allied Equipment Company, Inc. and its subsidiaries (the Company) for $83.2 million in cash, plus or
minus working capital adjustments. The purchase price was paid from Greenbriers existing cash
balances and credit facilities. The Company has been a supplier to the rail industry for over 40 years. The assets of
the Companys three operating plants located in the midwestern and southeastern U.S. are
included in the acquisition. Operating from two strategically located wheel facilities in
Washington, Illinois and Macon, Georgia, the Company supplies new and reconditioned
wheelsets to freight car maintenance locations as well as new railcar manufacturing facilities.
The Company also operates a parts reconditioning business in Peoria, Illinois, where it
reconditions railcar yokes, couplers, side frames and bolsters.
The total preliminary purchase price is estimated at $83.2 million and is comprised of:
|
|
|
|
|
|
|
(In Thousands) |
|
Cash consideration at closing plus working capital and other adjustments |
|
$ |
82,926 |
|
Acquisition-related transaction costs |
|
|
240 |
|
|
|
|
|
Total preliminary purchase price |
|
$ |
83,166 |
|
|
|
|
|
Acquisition related transaction costs. Acquisition- related acquisition costs of $240
thousand include legal, accounting and other professional fees.
Preliminary Purchase Price Allocation
The total preliminary purchase price will be allocated to the Companys tangible and intangible
assets acquired and liabilities assumed based on their estimated fair values as of the
acquisition date. The excess of purchase price over the net tangible and identifiable
intangible assets will be recorded as goodwill.
The allocation of the purchase price among certain assets and liabilities is still in process.
As a result, the information shown below is preliminary and subject to further refinement upon
completion of analyses and valuations.
Based upon a preliminary valuation, the total preliminary purchase price was allocated as
follows:
|
|
|
|
|
(In thousands) |
|
|
|
|
Accounts receivable |
|
$ |
8,908 |
|
Inventories |
|
|
12,653 |
|
Property, plant and equipment |
|
|
7,550 |
|
Intangibles and other |
|
|
11,911 |
|
Goodwill |
|
|
47,187 |
|
|
|
|
|
Total assets acquired |
|
|
88,209 |
|
|
|
|
|
Accounts payable and accrued liabilities |
|
|
5,043 |
|
|
|
|
|
Total liabilities assumed |
|
|
5,043 |
|
|
|
|
|
Net assets acquired |
|
$ |
83,166 |
|
|
|
|
|
Note 3 Pro Forma Adjustments
In preparation of the pro forma unaudited financial statements the following adjustments have
been recorded:
|
(a) |
|
Represents the cash purchase price of $83.2 million plus cash retained by the seller,
offset by $83.2 million drawn on the revolving bank line. |
|
|
(b) |
|
Represents fair value adjustments of assets acquired or liabilities assumed. |
|
|
(c) |
|
Represents Greenbriers removal of all goodwill and intangible assets of the Company
at the time of acquisition offset by the recording the estimated value of goodwill of
$47.2 million and intangibles of $11.9 million. This is preliminary and subject to
further refinement upon completion of analyses and valuations. |
|
|
(d) |
|
Represents the removal of the Companys revolving debt that was not assumed, offset
by an $83.2 million draw on Greenbriers revolving credit facility to fund the Companys
purchase. |
|
|
(e) |
|
Represents note payable not assumed by Greenbrier. |
|
|
(f) |
|
Represents elimination of the historical equity and minority interest in the Company
as the transaction was an asset purchase. |
|
|
(g) |
|
Represents the elimination of intercompany sales between the Company and Greenbrier
subsidiaries. |
|
|
(h) |
|
Represents amortization of intangible assets acquired. |
|
|
(i) |
|
Represents removal of interest expense of the Company and the addition of estimated
interest expense as if the draw on the Greenbrier line of credit occurred on September 1,
2006. |
|
|
(j) |
|
Represents the tax effect of both the Company and the proforma adjustments at
Greenbriers tax rate of 40%. The Company had elected to be treated as a partnership under
provisions of the Internal Revenue Service Code (Subchapter S) and as a result no federal
income tax was recorded on the Companys financial statements. |
|
|
(k) |
|
Reversal of the Companys minority interest. |
(d) Exhibits
|
|
|
Exhibit |
|
|
Number |
|
Description |
|
|
|
23.1
|
|
Consent of Independent Auditors |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
|
|
|
|
|
THE GREENBRIER COMPANIES, INC.
|
|
Date: June 12, 2008 |
By: |
/s/ Mark J. Rittenbaum
|
|
|
|
Mark J. Rittenbaum, |
|
|
|
Executive Vice President, Treasurer and
Chief Financial Officer (Principal
Financial and Accounting Officer) |
|
|