Media:
                                                                                                         Chuck Burgess
                                                                                                         Abernathy MacGregor Frank
                                                                                                         Tel: (212) 371-5999

Boston, MA (April 29, 1999) XTRA Corporation (NYSE: XTR) today announced diluted earnings per share and net income, before unusual items, of $0.82 and $11 million respectively for the fiscal second quarter ended March 31, 1999, compared to $0.71 and $11 million in the same quarter a year ago. This represents an increase of 15% in earnings per share before unusual items from last year. The fiscal year 1999 second quarter results were achieved on a reduced number of shares outstanding than in the comparable quarter of fiscal year 1998. During the quarter, the Company recorded one-time unusual charges of $4 million related to the Shared Service Center restructuring, $9 million related to the outsourcing arrangement with Textainer Equipment Management Limited, and $25 million related to the anticipated losses on sale of marine containers over the next twelve months. In addition, during the quarter the Company completed its planned $90 million of share repurchases.

XTRA's President and Chief Executive Officer, Lewis Rubin, said, "Without the one-time charges, our reported earnings were very strong in the first and second quarters of fiscal 1999. The strength of our underlying business reflects our competitive market position and a robust transportation environment, which we expect to continue into the third and fourth quarters. In the past few months, we implemented several strategic initiatives designed to enhance shareholder value, and we look forward to building on these actions."

Business Summary and Outlook

Net income from operations, before one-time charges, for the fiscal second quarter ended March 31, 1999 was $11 million, or $0.82 diluted earnings per share, on revenues of $110 million. These results were achieved on a smaller number of shares outstanding than in the comparable quarter of the previous year. Net income for the same quarter of fiscal year 1998 was $11 million, or $0.71 diluted earnings per share, on revenues of $109 million. After one-time unusual charges of $4 million related to the Shared Service Center restructuring, $9 million related to the outsourcing arrangement with Textainer, and $25 million related to the anticipated loss on sale of marine containers over the next twelve months, final net loss and diluted loss per share were $11 million and $0.82 respectively.

For the six months ended March 31, 1999, the Company reported, before one-time charges, net income of $30 million or $2.04 diluted earnings per share. This compared to $29 million or $1.88 diluted earnings per share in the year earlier period, an improvement of 9% in earnings per share. These results were achieved on revenues of $232 million in 1999 compared to $230 million in the earlier period, an increase of 1%. Final net income and diluted earnings per share, taking into account the one-time charges, were $7 million and $0.46 for the six month period.

Fiscal 1999 year-to-date cash flow from operations was $140 million, or $9.55 per diluted share. The Company anticipates continued strong and predictable cash flows for the balance of fiscal 1999. XTRA's strong cash flows allow the Company to continue to pursue both internal and external growth, as well as timely stock repurchases.

Overall equipment utilization for the second quarter of fiscal year 1999 averaged 78%, compared to 84% for the second quarter of fiscal year 1998. The decline in the Company's overall utilization was essentially driven by the 13% decrease in utilization at XTRA International. North American utilization for the second quarter of 1999 averaged 81%, down from the 85% achieved in the comparable 1998 quarter. XTRA's International marine container utilization averaged 69% in the second quarter of fiscal 1999, compared to 82% in the second quarter of fiscal 1998.

Economic conditions in the North American market, which constitutes the vast majority of the Company's business, remain strong, as economic growth continues and the industry environment remains favorable. The international container business still suffers from oversupply, weak pricing, and geographic imbalance which have worsened somewhat since last quarter and significantly since a year ago. Improved economies attained through the outsourcing arrangement with Textainer should help the performance of this business unit.

XTRA has committed capital spending for revenue equipment of $255 million for fiscal year 1999, the vast majority of which is for over-the-road trailers. This amount could increase modestly if business conditions warrant.

Strategic Initiatives Implemented; One-Time Charges Incurred

XTRA's current strategic initiatives to enhance shareholder value include three components: the creation of a Shared Service Center in St. Louis, Missouri, the outsourcing of the management of its international container leasing business, and the completion of a $90 million stock repurchase program.

Shared Service Center: XTRA's Shared Service Center is the key element of an organizational restructuring that will provide the Company with cost savings, as well as a platform for future growth without additional incremental costs. The Company anticipates that the transition to the Shared Service Center will be completed by the end of fiscal 1999. During the second quarter, XTRA recorded a one-time charge of $4 million for this restructuring.

AAgreement with Textainer Equipment Management Limited: The Company's management agreement with Textainer Equipment Management Limited will result in cost savings of approximately $7 million on a fiscal 1999 pro forma basis. XTRA has recorded a one-time charge of $9 million in its second fiscal quarter for the costs of closing its XTRA International offices. This charge includes severance payments to employees and other charges incurred in conjunction with the transaction. In conjunction with the Textainer management agreement, the Company has embarked on a program to sell older and less desirable equipment located in areas with lower demand. XTRA has recorded a one-time depreciation charge of $25 million during the second quarter of fiscal 1999 in order to write down to estimated realizable value the containers that it expects to sell over the next twelve months. XTRA does not currently anticipate making any further investment in the international container business.

Stock Repurchase: The Company has completed its planned $90 million of share repurchases, repurchasing approximately 2.2 million shares of its common stock. This represents approximately 14% of the total shares outstanding at the beginning of the program. The repurchases will be accretive to earnings per share and have enhanced XTRA's capital structure while allowing the Company to maintain strong investment grade ratings. XTRA's healthy balance sheet and strong cash flows position the Company well for future growth.

XTRA leases, primarily on an operating basis, over-the-road trailers, marine containers, and intermodal equipment, including intermodal trailers, chassis, and domestic containers.

 

XTRA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Millions of dollars except per share and share amounts)
(Unaudited)
		Three Months Ended				Six Months Ended
		March 31,				March 31,
		1999		1998		1999		1998
Revenues		$ 110		$ 109		$ 232		$ 230
Operating expenses
Depreciation on rental equipment		38		38		76		76
Rental equipment operating expense		28		28		56		54
Selling and administrative expense		11		11		22		22
Revenue equipment writedown		25		-		25		-
Restructuring costs		13		-		13		-
		115		77		192		152
Operating income (loss)		(5)		32		40		78
Interest expense		14		14		28		30
Income (loss) before provision for income taxes		(19)		18		12		48
and unusual item
Unusual item: costs related to terminated merger		-		-		1		-
Pretax income (loss)		(19)		18		11		48
Provision (benefit) for income taxes		(8)		7		4		19
Net income (loss)		$ (11)		$ 11		$ 7		$ 29
Basic earnings (loss) per share		$ (0.82)		$ 0.71		$ 0.46		$ 1.89
Weighted average basic shares outstanding (in millions)		13.9		15.3		14.6		15.3
Diluted earnings (loss) per share		$ (0.82)		$ 0.71		$ 0.46		$ 1.88
Weighted average diluted shares outstanding (in millions)		13.9		15.4		14.6		15.4

 
 
 
 

XTRA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Millions of dollars)
	March 31,
	1999		September 30,
	(Unaudited)		1998
Assets
Property and Equipment, net	$ 1,462		$ 1,452
Receivables, net	101		106
Other Assets	23		17
Total Assets	$ 1,586		$ 1,575
Liabilities and Stockholders’ Equity
Liabilities
Debt	$ 881		$ 802
Deferred Income Taxes	291		287
Other Liabilities	83		78
Stockholders’ Equity	331		408
Total Liabilities & Stockholders’ Equity	$ 1,586		$ 1,575
Net Debt Outstanding	$ 878		$ 799

 
 
 

XTRA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions of dollars)
(Unaudited)
		Six Months
		Ended March 31,
		1999		1998
Cash Provided from Operations		$ 140		$ 148
Cash Used for Investment Activities		(129)		(53)
Cash Used for Financing Activities		(90)		(92)
(Increase)/Decrease in Net Debt Outstanding
(Debt - Cash)		$ (79)		$ 3