Media & Resources Press Releases Greenbrier Announces Record Fourth Quarter Earnings; $110 Million Net Debt Reduction Over Q3; $50 Million Share Repurchase Program Authorized

Greenbrier Announces Record Fourth Quarter Earnings; $110 Million Net Debt Reduction Over Q3; $50 Million Share Repurchase Program Authorized

LAKE OSWEGO, Ore., Oct. 31, 2013 /PRNewswire/ -- The Greenbrier Companies, Inc. (NYSE: GBX) today reported financial results for its fourth quarter and fiscal year ended August 31, 2013.

Fourth Quarter Highlights                                                                                                       

  • Record net earnings for the quarter were $22.5 million, or $0.69 per diluted share, excluding restructuring charges of $1.8 million, on revenue of $484.2 million.  "Economic" EPS was $0.79, which excludes the impact of out-of-the-money shares underlying our 3.5% convertible bonds.
  • Net earnings attributable to Greenbrier, including restructuring charges, for the quarter were $20.7 million, or $0.64 per diluted share.
  • Record Adjusted EBITDA for the quarter was $49.5 million or 10.2% of revenue.
  • New railcar backlog as of August 31, 2013 was 14,400 units with an estimated value of $1.52 billion (average unit sale price of $106,000), compared to 14,200 units with an estimated value of $1.57 billion (average unit sales price of $111,000) on May 31, 2013.
  • New railcar deliveries totaled 3,500 units for the quarter.
  • Orders for 3,400 new railcars were received during the quarter. Subsequent to quarter end, Greenbrier received orders for another 1,700 units valued at approximately $140 million.
  • Entered into several new long-term railcar maintenance agreements, including multi-year transaction with CIT Rail.
  • Marine backlog as of August 31, 2013 was $10 million, compared to $1.6 million as of May 31, 2013.

Fiscal Year 2013 Highlights                                                                                                    

  • Record net earnings, excluding goodwill impairment and restructuring charges, were $62.5 million, or $2.00 per diluted share, on revenue of $1.76 billion.
  • Goodwill impairment and restructuring charges of $73.6 million net of tax, or $2.41 per diluted share, related to the Wheels, Repair & Parts segment, led to a Net loss attributable to Greenbrier of $11.0 million, or $0.41 per share.
  • Adjusted EBITDA was $157.2 million or 9.0% of revenue, just under the 2012 record of $158.3 million.
  • New railcar deliveries were 11,600 units for 2013.
  • Orders for the year totaled 14,800 units valued at $1.41 billion across a broad range of railcar types.  An initial order for Greenbrier's new plastic pellet car was received along with orders for nearly 3,000 units of automotive-related products, including Multi-MaxTM and Auto-Max®.
  • Cash from operating activities was $105 million.
  • Proprietary automotive-related product Multi-Max was successfully launched.

Progress on Strategic Initiatives

  • Substantially met $100 million minimum capital efficiency goal originally scheduled to be met by February 2014; management continues to focus on capital liberation.
  • Improved overall gross margins in fourth quarter by 100 bps; halfway to fourth quarter 2014 minimum goal of at least 200 basis point improvement.
  • Closed or sold four underperforming or non-core facilities in our Wheels, Repair & Parts segment; three additional facilities to occur by 2013 calendar year end.

William A. Furman, president and chief executive officer, said, "Our business performed well in 2013, notwithstanding weak markets for certain products such as double stack intermodal cars and marine barges, as well as other events, such as a low grain harvest due to drought.  We hit our stride in Manufacturing, improved our Leasing model and took initial steps to address difficult conditions in our Wheels, Repair & Parts unit in order to achieve a record fourth quarter.  In addition, we made meaningful progress on our previously announced strategic initiatives to enhance margins and liberate capital, which will grow return on invested capital (ROIC) and enhance shareholder value."

"In Manufacturing, where we are improving margins, we continue to ramp tank car production for this high margin product and are approaching our goal of producing 16 units a day to meet strong demand. While we continue to benefit from participation in the energy markets, we remain focused on product diversification.  This is reflected by the broad range of railcar types in backlog.  More than half of our new railcar orders during the year were for non-energy uses, and in the fourth quarter, 22% of orders were for automotive-related products, including Multi-Max, our proprietary railcar featuring adjustable auto decks. "

"Our Leasing & Services business continues to deliver enhanced performance within our integrated business model.  Through refinements to our leasing model, we are steadily increasing transaction volumes through lease syndication and asset management.  We are also reducing the permanent capital invested in this business, and increasing fee income.  In the fourth quarter we realized proceeds of nearly $35 million from the sale of assets from our lease fleet, while retaining management of these assets.  In the first quarter of 2014, we will continue this trend through the sale of additional lease fleet assets that we will continue to manage.  Going forward, we will make further refinements to this business."

"Improvements in operational efficiencies and margins in our Wheels, Repair & Parts segment represent a clear opportunity in 2014. We closed or sold four locations in 2013 and plan to close several more.  The remaining underperforming facilities are implementing operational improvements, and we have negotiated more balanced commercial terms with select business partners. While fourth quarter results for this segment do not yet reflect these efforts, we expect to demonstrate better results in 2014. Overall, we are on-track to liberate $25 million of capital from this segment," Furman continued.

Business Outlook

"The decisive actions we took to strengthen our operational performance and business strategy in 2012 and 2013 position us for growth in 2014.  We have substantially met our capital efficiency goal of liberating at least $100 million of capital by February 2014 with more to come, and we are on track to improve gross margins to at least 13.5% by the fourth quarter of 2014," Furman concluded.

Greenbrier believes its diverse product mix and integrated business model places the Company in a superior position during the current railcar cycle as overall transportation dynamics continue to improve. Based on current business trends and industry forecasts, in 2014 Greenbrier believes its:

  • Deliveries will exceed 15,000 units
  • Revenue will exceed $2 billion
  • EPS, excluding restructuring charges, will be in the range of $2.45 to $2.70

Similar to previous years, financial results in the second half of the year are expected to be stronger than the first half. Also, while gross margins are expected to increase overall, management does not believe its track will be linear. Beginning next quarter, Greenbrier will disclose segment operating income.

Stock Repurchase Program

Greenbrier today announced that its Board of Directors has approved a $50 million share repurchase program to be executed over the next 18 months.  Repurchases under the program will be made through open market transactions or through privately negotiated transactions from time-to-time, based on market conditions, legal and regulatory limitations and other factors.  The Company is confident its balance sheet and liquidity will support this program, while it also continues to de-lever and take advantage of growth opportunities.

Financial Summary

 

Q4 FY13

Q3 FY13

Sequential Comparison – Main Drivers

Revenue

$484.2M

$433.7M

Up 11.7% due to increased deliveries and Manufacturing product mix, partially offset by lower revenues in Wheels, Repair & Parts

Gross margin

12.5%

11.5%

Up 100 bps attributable to Manufacturing operating efficiencies, favorable product mix, and lease syndications

SG&A

$26.8M

$25.3M

Up due to higher incentive compensation on record quarterly Adjusted EBITDA

Gain on disposition of equipment

$8.5M

$5.1M

Increase reflects sale of leasing assets aligned with capital liberation goals

Other charges

$2.7M

$76.9M

Goodwill impairment in Q3 and restructuring charges in Q4, both related to the Wheels, Repair & Parts segment

Adjusted EBITDA (1)

$49.5M

$39.6M

Up principally due to gross margin and capital efficiency initiatives

Effective tax rate (excluding impairment)

34.5%

32.9%

Reflects geographic mix of earnings

Net earnings (1)

$22.5M

$15.7M

Higher manufacturing performance and gains on sale

Diluted EPS (1)

$0.69

$0.50

Higher net earnings

Economic EPS (1)

$0.79

$0.56

Excludes "if converted" impact of out-of-the-money bonds due 2018

   

 (1)

 Excluding goodwill impairment and restructuring charges.

Segment Summary

 

Q4 FY13

Q3 FY13

Sequential Comparison – Main Drivers

Manufacturing

  Revenue

$351.7M

$284.6M

Up 23.6% due to increased deliveries and favorable product mix

  Gross margin

12.3%

11.0%

Up 130 bps due to improved operating efficiencies, favorable product mix, and strong syndication activity

  Deliveries

3,500

2,500

Strong syndication activity and successful tank ramp

Wheels, Repair & Parts

  Revenue

$114.0M

$131.2M

Down 13.1% due to mix of work and lower wheel volumes

  Gross margin

6.7%

8.2%

Down 150 bps due to less profitable mix and lower wheel volumes

Leasing & Services

  Revenue

$18.5M

$17.9M

Up 3.2% due to higher interim rents on railcars held for syndication

  Gross margin

50.7%

45.2%

Up 550 bps due primarily to higher interim rents

  Lease fleet utilization

97.4%

97.9%

 

Conference Call

Greenbrier will host a teleconference to discuss its fourth quarter and 2013 results. In conjunction with this news release, Greenbrier has posted a supplemental earnings presentation to our website.  Teleconference details are as follows:

  • October 31, 2013
  • 9:00 a.m. Pacific Daylight Time
  • Phone: 1-630-395-0143, Password: "Greenbrier" 
  • Real-time Audio Access:  ("Newsroom" at http://www.gbrx.com)

Please access the site 10 minutes prior to the start time.  Following the call, a webcast replay will be available for 30 days.  Telephone replay will be available through November 16, 2013, at 203-369-1175.

About Greenbrier Companies

Greenbrier (www.gbrx.com), headquartered in Lake Oswego, Oregon, is a leading supplier of transportation equipment and services to the railroad industry.  Greenbrier builds new railroad freight cars in its four manufacturing facilities in the U.S. and Mexico and marine barges at its U.S. facility.  It also repairs and refurbishes freight cars and provides wheels and railcar parts at 37 locations across North America.  Greenbrier builds new railroad freight cars and refurbishes freight cars for the European market through both its operations in Poland and various subcontractor facilities throughout Europe.  Greenbrier owns approximately 8,600 railcars, and performs management services for approximately 224,000 railcars.

"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995:  This press release may contain forward-looking statements, including statements regarding expected new railcar production volumes and schedules, expected customer demand for the Company's products and services, plans to increase manufacturing capacity, restructuring plans, new railcar delivery volumes and schedules, growth in demand for the Company's railcar services and parts business, and the Company's future financial performance. Greenbrier uses words such as "anticipates," "believes,"  "forecast," "potential," "goal," "contemplates," "expects," "intends," "plans," "projects," "hopes," "seeks," "estimates," "could," "would," "will," "may," "can," "designed to," "foreseeable future" and similar expressions to identify forward-looking statements.  These forward-looking statements are not guarantees of future performance and are subject to certain risks and uncertainties that could cause actual results to differ materially from in the results contemplated by the forward-looking statements.  Factors that might cause such a difference include, but are not limited to, reported backlog is not indicative of our financial results; turmoil in the credit markets and financial services industry; high levels of indebtedness and compliance with the terms of our indebtedness; write-downs of goodwill, intangibles and other assets in future periods; sufficient availability of borrowing capacity; fluctuations in demand for newly manufactured railcars or failure to obtain orders as anticipated in developing forecasts; loss of one or more significant customers; customer payment defaults or related issues; actual future costs and the availability of materials and a trained workforce; failure to design or manufacture new products or technologies or to achieve certification or market acceptance of new products or technologies; steel or specialty component price fluctuations and availability and scrap surcharges; changes in product mix and the mix between segments; labor disputes, energy shortages or operating difficulties that might disrupt manufacturing operations or the flow of cargo; production difficulties and product delivery delays as a result of, among other matters, changing technologies, production of new railcar types, or non-performance of subcontractors or suppliers; ability to obtain suitable contracts for the sale of leased equipment and risks related to car hire and residual values; difficulties associated with governmental regulation, including environmental liabilities; integration of current or future acquisitions; succession planning; all as may be discussed in more detail under the headings "Risk Factors" and "Forward Looking Statements" in our Annual Report on Form 10-K for the fiscal year ended August 31, 2012, and our other reports on file with the Securities and Exchange Commission.  Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's opinions only as of the date hereof.  Except as otherwise required by law, we do not assume any obligation to update any forward-looking statements.

Net earnings excluding goodwill impairment and restructuring charges, Adjusted EBITDA, Adjusted weighted average diluted common shares outstanding and Diluted earnings per share excluding goodwill impairment and restructuring charges are not financial measures under generally accepted accounting principles (GAAP). We define Net earnings excluding goodwill impairment and restructuring charges as Net earnings (loss) attributable to Greenbrier before goodwill impairment (after-tax) and restructuring charges (after-tax). We define Adjusted EBITDA as earnings (loss) attributable to Greenbrier before interest and foreign exchange, income tax expense, goodwill impairment, restructuring charges and depreciation and amortization. We define Adjusted weighted average diluted common shares outstanding as Weighted average diluted common shares outstanding plus the dilutive effect of common stock equivalents related to warrants, restricted stock, restricted stock units and convertible notes to the extent that they are considered dilutive in the Diluted earnings per share excluding goodwill impairment and restructuring charges calculation. We define Diluted earnings per share excluding goodwill impairment and restructuring charges as Net earnings excluding goodwill impairment and restructuring charges before interest and debt issuance costs (net of tax) on convertible notes divided by Adjusted weighted average diluted common shares outstanding.  Net earnings excluding goodwill impairment and restructuring charges, Adjusted EBITDA, Adjusted weighted average diluted common shares outstanding and Diluted earnings per share excluding goodwill impairment and restructuring charges are performance measurement tools used by Greenbrier. You should not consider Net earnings excluding goodwill impairment and restructuring charges, Adjusted EBITDA, Adjusted weighted average diluted common shares outstanding and Diluted earnings per share excluding goodwill impairment and restructuring charges in isolation or as a substitute for other financial statement data determined in accordance with GAAP. In addition, because Adjusted EBITDA and Diluted earnings per share excluding goodwill impairment and restructuring charges are not measures of financial performance under GAAP and are susceptible to varying calculations, the Adjusted EBITDA and Diluted earnings per share excluding goodwill impairment and restructuring charges measures presented may differ from and may not be comparable to similarly titled measures used by other companies.

 

THE GREENBRIER COMPANIES, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, unaudited)

 
 

August 31,

2013

May 31,

2013

February 28,

2013

November 30,

2012

August 31,

2012

Assets

         

   Cash and cash equivalents

$       97,435

$       31,606

$       55,637

$       41,284

$       53,571

   Restricted cash

8,807

8,906

8,899

7,322

6,277

   Accounts receivable, net 

154,848

162,352

144,933

163,385

146,326

   Inventories

316,783

344,168

359,281

363,642

316,741

   Leased railcars for syndication

68,480

71,091

36,198

54,297

97,798

   Equipment on operating leases, net

305,468

332,924

344,576

362,522

362,968

   Property, plant and equipment, net

201,533

197,779

194,887

186,715

182,429

   Goodwill

57,416

57,416

134,316

137,066

137,066

   Intangibles and other assets, net

78,971

79,364

86,194

79,500

81,368

 

$  1,289,741

$  1,285,606

$  1,364,921

$  1,395,733

$  1,384,544

           

Liabilities and Equity

         

   Revolving notes

$       48,209

$       92,968

$       50,058

$       89,826

$       60,755

   Accounts payable and accrued liabilities

315,938

286,964

278,221

282,925

329,508

   Deferred income taxes

86,040

86,229

99,965

96,498

95,363

   Deferred revenue

8,838

16,203

23,178

28,283

17,194

   Notes payable

373,889

372,942

427,553

427,697

428,079

           

   Total equity - Greenbrier

428,202

404,707

461,136

447,080

431,777

   Noncontrolling interest

28,625

25,593

24,810

23,424

21,868

   Total equity

456,827

430,300

485,946

470,504

453,645

 

$  1,289,741

$  1,285,606

$  1,364,921

$  1,395,733

$  1,384,544

 

THE GREENBRIER COMPANIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts, unaudited)

 
   

Years Ended August 31,

 

(In thousands, except per share amounts)

 

2013

 

2012

 

2011

 

Revenue

             

   Manufacturing

 

$  1,215,734

 

$  1,253,964

 

$    721,102

 

   Wheels, Repair & Parts

 

469,222

 

481,865

 

452,865

 

   Leasing & Services

 

71,462

 

71,887

 

69,323

 
   

1,756,418

 

1,807,716

 

1,243,290

 

Cost of revenue

             

   Manufacturing

 

1,082,889

 

1,122,384

 

661,127

 

   Wheels, Repair & Parts

 

431,501

 

433,541

 

405,449

 

   Leasing & Services

 

35,655

 

37,371

 

37,183

 
   

1,550,045

 

1,593,296

 

1,103,759

 
               

Margin

 

206,373

 

214,420

 

139,531

 
               

Selling and administrative

 

103,175

 

104,596

 

80,326

 

Net gain on disposition of equipment

 

(18,072)

 

(8,964)

 

(8,369)

 

Goodwill impairment

 

76,900

 

-

 

-

 

Restructuring charges

 

2,719

 

-

 

-

 

Earnings from operations

 

41,651

 

118,788

 

67,574

 
               

Other costs

             

   Interest and foreign exchange

 

22,158

 

24,809

 

36,992

 

   Loss on extinguishment of debt

 

-

 

-

 

15,657

 

Earnings before income tax and earnings (loss) from unconsolidated affiliates

 

19,493

 

93,979

 

14,925

 

Income tax expense

 

(25,060)

 

(32,393)

 

(3,564)

 

Earnings (loss) before earnings (loss) from unconsolidated affiliates

 

(5,567)

 

61,586

 

11,361

 

Earnings (loss) from unconsolidated affiliates

 

186

 

(416)

 

(2,974)

 
               

Net earnings (loss)

 

(5,381)

 

61,170

 

8,387

 

Net earnings attributable to noncontrolling interest

 

(5,667)

 

(2,462)

 

(1,921)

 
               

Net earnings (loss) attributable to Greenbrier

 

$     (11,048)

 

$      58,708

 

$        6,466

 
               

Basic earnings (loss) per common share:

 

$         (0.41)

 

$           2.21

 

$          0.27

 
               

Diluted earnings (loss) per common share:

 

$         (0.41)

 

$           1.91

 

$          0.24

 
               

Weighted average common shares:

             

Basic

 

26,678

 

26,572

 

24,100

 

Diluted

 

26,678

 

33,718

 

26,501

 
               

 

THE GREENBRIER COMPANIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)

 
 

Years Ended August 31,

 

(In thousands)

2013

 

2012

 

2011

 

Cash flows from operating activities:

           

  Net earnings (loss)

$         (5,381)

 

$        61,170

 

$         8,387

 

    Adjustments to reconcile net earnings (loss) to net cash

      provided by (used in) operating activities:

           

      Deferred income taxes

(9,662)

 

11,617

 

2,399

 

      Depreciation and amortization

41,447

 

42,371

 

38,293

 

      Net gain on disposition of equipment

(18,072)

 

(8,964)

 

(5,121)

 

      Accretion of debt discount

2,455

 

3,259

 

6,583

 

      Stock based compensation expense

6,302

 

8,757

 

7,073

 

      Goodwill impairment

76,900

 

-

 

-

 

      Loss on extinguishment of debt (non-cash portion)

-

 

-

 

8,453

 

      Other

(1,055)

 

4,905

 

(311)

 

      Decrease (increase) in assets:

           

          Accounts receivable

(7,323)

 

37,763

 

(96,552)

 

          Inventories

19,045

 

3,709

 

(116,866)

 

          Leased railcars for syndication

22,881

 

(76,071)

 

(20,839)

 

          Other

969

 

-

 

8,863

 

    Increase (decrease) in liabilities:

           

          Accounts payable and accrued liabilities

(15,429)

 

16,236

 

130,673

 

          Deferred revenue

(8,485)

 

11,304

 

(5,287)

 

    Net cash  provided by (used in) operating activities

104,592

 

116,056

 

(34,252)

 

Cash flows from investing activities:

           

    Proceeds from sales of assets

75,338

 

33,560

 

18,730

 

    Capital expenditures

(60,827)

 

(117,885)

 

(84,302)

 

    Decrease (increase) in restricted cash

(2,530)

 

(4,164)

 

412

 

    Investment in and advances to unconsolidated affiliates

(2,240)

 

(506)

 

(2,330)

 

    Other

(3,582)

 

48

 

(1,774)

 

    Net cash provided by (used in) investing activities

6,159

 

(88,947)

 

(69,264)

 

Cash flows from financing activities:

           

    Net changes in revolving notes with maturities of 90 days or less

(16,396)

 

(57,302)

 

71,625

 

    Proceeds from revolving notes with maturities longer than 90 days

38,177

 

63,773

 

25,159

 

    Repayments of revolving notes with maturities longer than 90 days

(34,966)

 

(33,934)

 

(10,000)

 

    Proceeds from issuance of notes payable

2,186

 

2,750

 

231,250

 

    Debt issuance costs

-

 

-

 

(11,469)

 

    Repayments of notes payable

(58,831)

 

(7,070)

 

(311,360)

 

    Proceeds from equity offering

-

 

-

 

63,180

 

    Expenses from equity offering

-

 

-

 

(420)

 

    Excess tax benefit from restricted stock awards

900

 

1,627

 

-

 

    Investment by joint venture partner 

3,206

 

1,362

 

-

 

    Other

(8)

 

-

 

26

 

    Net cash provided by (used in) financing activities

(65,732)

 

(28,794)

 

57,991

 

    Effect of exchange rate changes

(1,155)

 

5,034

 

(3,117)

 

Increase (decrease) in cash and cash equivalents

43,864

 

3,349

 

(48,642)

 

Cash and cash equivalents

           

Beginning of period

53,571

 

50,222

 

98,864

 

End of period

$         97,435

 

$        53,571

 

$       50,222

 
             

 

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

Quarterly Results of Operations

(In thousands, except per share amounts, unaudited)

 
 

First

 

Second

 

Third

 

Fourth

 

Total

 

2013

                   

Revenue

                   

   Manufacturing

$    285,368

 

$    294,047

 

$   284,591

 

$   351,728

 

$ 1,215,734

 

   Wheels, Repair & Parts

112,100

 

111,952

 

131,167

 

114,003

 

469,222

 

   Leasing & Services

17,906

 

17,167

 

17,905

 

18,484

 

71,462

 
 

415,374

 

423,166

 

433,663

 

484,215

 

1,756,418

 

Cost of revenue

                   

   Manufacturing

258,492

 

262,650

 

253,360

 

308,387

 

1,082,889

 

   Wheels, Repair & Parts

101,476

 

103,134

 

120,476

 

106,415

 

431,501

 

   Leasing & Services

7,627

 

9,107

 

9,808

 

9,113

 

35,655

 
 

367,595

 

374,891

 

383,644

 

423,915

 

1,550,045

 
                     

Margin

47,779

 

48,275

 

50,019

 

60,300

 

206,373

 
                     

Selling and administrative

26,100

 

24,942

 

25,322

 

26,811

 

103,175

 

Net gain on disposition of equipment

(1,408)

 

(3,076)

 

(5,131)

 

(8,457)

 

(18,072)

 

Goodwill impairment

-

 

-

 

76,900

 

-

 

76,900

 

Restructuring charges

-

 

-

 

-

 

2,719

 

2,719

 

Earnings (loss) from operations

23,087

 

26,409

 

(47,072)

 

39,227

 

41,651

 
                     

Other costs

                   

   Interest and foreign exchange

5,900

 

6,322

 

5,905

 

4,031

 

22,158

 

Earnings (loss) before income tax and earnings (loss) from unconsolidated affiliates

17,187

 

20,087

 

(52,977)

 

35,196

 

19,493

 
                     

Income tax expense

(4,586)

 

(5,590)

 

(2,729)

 

(12,155)

 

(25,060)

 
                     

Earnings (loss) from unconsolidated affiliates

(40)

 

(105)

 

82

 

249

 

186

 

Net earnings (loss)

12,561

 

14,392

 

(55,624)

 

23,290

 

(5,381)

 

Net earnings attributable to noncontrolling interest

(2,134)

 

(553)

 

(406)

 

(2,574)

 

(5,667)

 

Net earnings (loss) attributable to Greenbrier

$      10,427

 

$      13,839

 

$   (56,030)

 

$        20,716

 

$     (11,048)

 
                     

Basic earnings (loss) per common share: (1)

$         0.38

 

$         0.51

 

$       (2.10)

 

$            0.74

 

$         (0.41)

 

Diluted earnings (loss) per common share: (2)

$         0.35

 

$         0.45

 

$       (2.10)

 

$            0.64

 

$         (0.41)

 
   

(1)

Quarterly amounts do not total to the year to date amount as each period is calculated discretely.

   

(2)

Quarterly amounts do not total to the year to date amount as each period is calculated discretely. For the first, second and fourth quarters, diluted earnings per common share includes the outstanding warrants using the treasury stock method and the dilutive effect of shares underlying the 2018 Convertible Notes using the "if converted" method in which debt issuance and interest costs, net of tax, were added back to net earnings.

 

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

Quarterly Results of Operations

(In thousands, except per share amounts, unaudited)

 
 

First

 

Second

 

Third

 

Fourth

 

Total

 

2012

                   

Revenue

                   

   Manufacturing

$   262,656

 

$   320,206

 

$   364,930

 

$       306,172

 

$   1,253,964

 

   Wheels, Repair & Parts

117,749

 

119,894

 

125,145

 

119,077

 

481,865

 

   Leasing & Services

17,794

 

18,086

 

17,722

 

18,285

 

71,887

 
 

398,199

 

458,186

 

507,797

 

443,534

 

1,807,716

 

Cost of revenue

                   

   Manufacturing

236,188

 

290,851

 

325,424

 

269,921

 

1,122,384

 

   Wheels, Repair & Parts

105,891

 

106,554

 

111,610

 

109,486

 

433,541

 

   Leasing & Services

9,663

 

9,295

 

8,825

 

9,588

 

37,371

 
 

351,742

 

406,700

 

445,859

 

388,995

 

1,593,296

 
                     

Margin

46,457

 

51,486

 

61,938

 

54,539

 

214,420

 
                     

Selling and administrative

23,235

 

24,979

 

28,784

 

27,598

 

104,596

 

Net gain on disposition of equipment

(3,658)

 

(2,654)

 

(2,585)

 

(67)

 

(8,964)

 

Earnings from operations

26,880

 

29,161

 

35,739

 

27,008

 

118,788

 
                     

Other costs

                   

   Interest and foreign exchange

5,383

 

6,630

 

6,560

 

6,236

 

24,809

 

Earnings before income tax and earnings (loss) from unconsolidated affiliates

21,497

 

22,531

 

29,179

 

20,772

 

93,979

 
                     

Income tax expense

(7,797)

 

(5,348)

 

(8,655)

 

(10,593)

 

(32,393)

 
                     

Earnings (loss) from unconsolidated affiliates

(372)

 

72

 

201

 

(317)

 

(416)

 

Net earnings

13,328

 

17,255

 

20,725

 

9,862

 

61,170

 

Net (earnings) loss attributable to Noncontrolling interest

1,189

 

415

 

(1,608)

 

(2,458)

 

(2,462)

 

Net earnings attributable to Greenbrier

$     14,517

 

$     17,670

 

$     19,117

 

$           7,404

 

$        58,708

 
                     

Basic earnings per common share:

$         0.57

 

$         0.66

 

$         0.71

 

$             0.27

 

$            2.21

 

Diluted earnings per common share: (1)

$         0.48

 

$         0.57

 

$         0.61

 

$             0.26

 

$            1.91

 
   

(1)

Quarterly amounts do not total to the year to date amount as each period is calculated discretely.  Diluted earnings per common share includes the outstanding warrants using the treasury stock method and the dilutive effect of shares underlying the 2018 Convertible Notes using the "if converted" method in which debt issuance and interest costs, net of tax, were added back to net earnings.

 

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

(In thousands, excluding backlog and delivery units, unaudited)

 

Reconciliation of Net earnings (loss) attributable to Greenbrier to Adjusted EBITDA

 
     

Three Months Ended

 

Years Ended

 
     

August 31,

2013

 

May 31,

2013

 

August 31,

2013

 

August 31,

2012

 

Net earnings (loss) attributable to Greenbrier

$      20,716

 

$    (56,030)

 

$    (11,048)

 

$      58,708

 

Interest and foreign exchange

4,031

 

5,905

 

22,158

 

24,809

 

Income tax expense

12,155

 

2,729

 

25,060

 

32,393

 

Depreciation and amortization

9,924

 

10,125

 

41,447

 

42,371

 

Goodwill impairment

-

 

76,900

 

76,900

 

-

 

Restructuring charges

2,719

 

-

 

2,719

 

-

 
                     

Adjusted EBITDA(1)

$       49,545

 

$       39,629

 

$     157,236

 

$    158,281

 
                       
                           
   

(1)

Adjusted EBITDA is not a financial measure under generally accepted accounting principles (GAAP).  We define Adjusted EBITDA as Net earnings (loss) attributable to Greenbrier before interest and foreign exchange, income tax expense, goodwill impairment, restructuring charges, depreciation and amortization.  Adjusted EBITDA is a performance measurement tool commonly used by rail supply companies and Greenbrier.  You should not consider Adjusted EBITDA in isolation or as a substitute for other financial statement data determined in accordance with GAAP.  In addition, because Adjusted EBITDA is not a measure of financial performance under GAAP and is susceptible to varying calculations, the Adjusted EBITDA measure presented may differ from and may not be comparable to similarly titled measures used by other companies.

   
   
     

Three Months Ended

August 31, 2013

 

Year Ended

August 31, 2013

Backlog Activity (units)

         

Beginning backlog

14,200

 

10,700

Orders received

3,400

 

14,800

Production held as Leased railcars for syndication

(400)

 

(1,600)

Production sold directly to third parties

(2,800)

 

(9,500)

Ending backlog

14,400

 

14,400

       

Delivery Information (units)

     

Production sold directly to third parties

2,800

 

9,500

Sales of Leased railcars for syndication

700

 

2,100

Total deliveries

3,500

 

11,600

 

 

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

(In thousands, except per share amounts, unaudited)

 

Reconciliation of common shares outstanding and diluted earnings per share

 

The shares used in the computation of the Company's basic and diluted earnings per common share and Diluted earnings per share excluding goodwill impairment and restructuring charges are reconciled as follows:

 
 

Three Months Ended

 

Year Ended

   

August 31,

2013

 

May 31,

2013

 

August 31,

2013

 

Weighted average basic common shares outstanding (1)

28,062

 

26,619

 

26,678

 

Dilutive effect of warrants (2)

366

 

-

 

-

 

Dilutive effect of convertible notes (2)(3)

6,045

 

-

 

-

 

Weighted average diluted common shares outstanding

34,473

 

26,619

 

26,678

             
 

Dilutive effect of warrants

   

847

 

700

 

Dilutive effect of restricted stock and restricted stock units

   

627

 

737

 

Dilutive effect of convertible notes (3)

   

6,045

 

6,045

 

Adjusted weighted average diluted common shares outstanding (4)

   

34,138

 

34,160

               

(1)

Restricted stock grants and restricted stock units, including some grants subject to certain performance criteria, are included in Weighted average basic common shares outstanding when the Company is in a net earnings position. Weighted average basic common shares outstanding exclude shares of unvested restricted stock and restricted stock units for the three months ended May 31, 2013 and the year ended August 31, 2013 due to a net loss.

   

(2)

The dilutive effect of common stock equivalents is excluded from the Weighted average diluted common shares outstanding for the three months ended May 31, 2013 and the year ended August 31, 2013 due to a net loss.

   

(3)

The dilutive effect of the 2018 Convertible notes are included in the Weighted average diluted common shares outstanding for the three months ended August 31, 2013 and Adjusted weighted average diluted common shares outstanding for the three months ended May 31, 2013 and the year ended August 31, 2013 as they were considered dilutive under the "if converted" method as further discussed below. The dilutive effect of the 2026 Convertible notes was excluded from the share calculations as the stock price for each period presented was less than the initial conversion price of $48.05 and therefore considered anti-dilutive.

   

(4)

Adjusted weighted average diluted common shares outstanding is not a financial measure under GAAP.  We define Adjusted weighted average diluted common shares outstanding as Weighted average diluted common shares outstanding plus the dilutive effect of common stock equivalents related to warrants, restricted stock, restricted stock units and convertible notes to the extent that they are considered dilutive in the Diluted earnings per share excluding goodwill impairment and restructuring charges calculation. Adjusted weighted average diluted common shares outstanding is a performance measurement tool used by Greenbrier. You should not consider Adjusted weighted average diluted common shares outstanding in isolation or as a substitute for other financial statement data determined in accordance with GAAP. 

Diluted earnings per share excluding goodwill impairment and restructuring charges for the three months and year ended August 31, 2013 and the three months ended May 31, 2013 was calculated using the more dilutive of two approaches.  The first approach includes the dilutive effect of outstanding warrants and shares underlying the 2026 Convertible notes in the share count using the treasury stock method. The second approach supplements the first by including the "if converted" effect of the 2018 Convertible notes issued in March 2011. Under the "if converted method" debt issuance and interest costs, both net of tax, associated with the convertible notes are added back to net earnings and the share count is increased by the shares underlying the convertible notes. The 2026 Convertible notes would only be included in the calculation of both approaches if the current stock price is greater than the initial conversion price of $48.05 using the treasury stock method.

 

 

 

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

(In thousands, except per share amounts, unaudited)

 

Reconciliation of Net earnings (loss) attributable to Greenbrier to Net earnings excluding goodwill impairment and restructuring charges

 
 

Three Months Ended

 

Year Ended

 

August 31,

2013

 

May 31,

 2013

 

August 31,

2013

Net earnings (loss) attributable to Greenbrier

$  20,716

 

$ (56,030)

 

$ (11,048)

Goodwill impairment (after-tax)

-

 

71,778

 

71,778

Restructuring charges (after-tax)

1,781

 

-

 

1,781

Net earnings excluding goodwill impairment and restructuring charges (1)

$  22,497

 

$   15,748

 

$   62,511

   

(1)

Net earnings excluding goodwill impairment and restructuring charges is not a financial measure under GAAP. We define Net earnings excluding goodwill impairment and restructuring charges as Net earnings (loss) attributable to Greenbrier before goodwill impairment (after-tax) and restructuring charges (after-tax). Net earnings excluding goodwill impairment and restructuring charges is a performance measurement tool used by Greenbrier. You should not consider Net earnings excluding goodwill impairment and restructuring charges in isolation or as a substitute for other financial statement data determined in accordance with GAAP. 

   
 

Three Months Ended

 

Year Ended

 

August 31,

2013

 

May 31,

2013

 

August 31,

2013

Net earnings excluding goodwill impairment and restructuring charges

$   22,497

 

$ 15,748

 

$   62,511

Add back:

         

Interest and debt issuance costs on the 2018 Convertible notes, net of tax

1,416

 

1,416

 

5,677

Earnings before interest and debt issuance costs on convertible notes

$23,913

 

$ 17,164

 

$  68,188

           

Adjusted weighted average diluted common shares outstanding

34,473

 

34,138

 

34,160

           

Diluted earnings per share excluding goodwill impairment and restructuring charges (2)

      $   0.69 (3)

 

      $ 0.50 (4)

 

     $ 2.00 (4)

   

(2)

Diluted earnings per share excluding goodwill impairment and restructuring charges is not a financial measure under GAAP. We define Diluted earnings per share excluding goodwill impairment and restructuring charges as Net earnings excluding goodwill impairment and restructuring charges before interest and debt issuance costs (net of tax) on convertible notes divided by Adjusted weighted average diluted common shares outstanding. Diluted earnings per share excluding goodwill impairment and restructuring charges is a performance measurement tool used by Greenbrier. You should not consider Diluted earnings per share excluding goodwill impairment and restructuring charges in isolation or as a substitute for other financial statement data determined in accordance with GAAP. In addition, because Diluted earnings per share excluding goodwill impairment and restructuring charges is not a measure of financial performance under GAAP and is susceptible to varying calculations, the Diluted earnings per share excluding goodwill impairment and restructuring charges measure presented may differ from and may not be comparable to similarly titled measures used by other companies.

   

(3)

Net earnings excluding goodwill impairment and restructuring charges before interest and debt issuance costs (net of tax) on convertible notes

 

Weighted average diluted common shares outstanding

   

(4)

Net earnings excluding goodwill impairment and restructuring charges before interest and debt issuance costs (net of tax) on convertible notes

 

Adjusted weighted average diluted common shares outstanding

       

 

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

(In thousands, except per share amounts, unaudited)

 

Reconciliation of basic earnings per share to economic earnings per share excluding goodwill impairment and restructuring charges

 

The shares used in the computation of the Company's basic and economic earnings per common share excluding goodwill impairment and restructuring charges are reconciled as follows:

 
 

Three Months Ended

 
 

August 31,

2013

 

May 31,

2013

 

Weighted average basic common shares outstanding

28,062

 

26,619

 

Dilutive effect of warrants

366

 

847

 

Dilutive effect of restricted stock and restricted stock units

-

 

627

 

Weighted average economic diluted common shares outstanding

28,428

 

28,093

 
         

Net earnings excluding goodwill impairment and restructuring charges

$       22,497

 

$       15,748

 
         

Economic earnings per share excluding goodwill impairment and restructuring charges (1)

$           0.79

 

$           0.56

 
         

(1)

Economic earnings per share excluding goodwill impairment and restructuring charges is not a financial measure under GAAP. Economic earnings per share excluding goodwill impairment and restructuring charges is used to measure the current economic impact of our Convertible Bonds due in 2018 that have a conversion strike price of $38.05/share, which exceeds our current stock price. We define Economic earnings per share excluding goodwill impairment and restructuring charges as Net earnings excluding goodwill impairment and restructuring charges divided by the sum of Weighted average basic common shares outstanding, including the dilutive effect of restricted stock, restricted stock units and warrants. This calculation excludes the dilutive effect of the shares underlying the 2018 bonds under the "if converted" method, which is included in the calculation of Diluted earnings per share excluding goodwill impairment and restructuring charges. You should not consider Economic earnings per share excluding goodwill impairment and restructuring charges in isolation or as a substitute for other financial statement data determined in accordance with GAAP. In addition, because Economic earnings per share excluding goodwill impairment and restructuring charges is not a measure of financial performance under GAAP and is susceptible to varying calculations, the Economic earnings per share excluding goodwill impairment and restructuring charges measure presented may differ from and may not be comparable to similarly titled measures used by other companies.

SOURCE The Greenbrier Companies, Inc. (GBX)