Media & Resources Press Releases Greenbrier Reports Record Results for Fourth Quarter and Fiscal Year; Backlog Grows to Record 31,500 units

Greenbrier Reports Record Results for Fourth Quarter and Fiscal Year; Backlog Grows to Record 31,500 units

LAKE OSWEGO, Ore., Oct. 30, 2014 /PRNewswire/ -- The Greenbrier Companies, Inc. (NYSE: GBX) today reported financial results for its fourth fiscal quarter and full year ended August 31, 2014.

Fourth Quarter Highlights

  • Net earnings for the quarter were $33.7 million, or $1.03 per diluted share, excluding a non-cash gain of $13.6 million (net of tax) on contribution of our repair operations to GBW, on record revenue of $618.1 million.
  • Net earnings attributable to Greenbrier for the quarter, which includes the gain on contribution to GBW, were $47.4 million, or $1.43 per diluted share.
  • Record adjusted EBITDA for the quarter was $80.8 million, or 13.1% of revenue.
  • Record railcar backlog as of August 31, 2014 was 31,500 units with an estimated value of $3.33 billion (average unit sale price of $106,000), compared to 26,400 units with an estimated value of $2.75 billion (average unit sale price of $104,000) as of May 31, 2014.
  • Orders for 10,400 new railcars valued at $1.06 billion received during the quarter. After quarter end, Greenbrier received orders for an additional 11,400 units valued at nearly $1 billion.
  • New railcar deliveries totaled 4,800 units for the quarter, compared to 4,300 units for the quarter ended May 31, 2014.
  • Marine backlog as of August 31, 2014 totaled approximately $112 million.
  • Formed GBW Railcar Services, LLC (GBW), a 50/50 joint venture with Watco Companies, LLC (Watco) focused on retrofitting, refurbishing and repairing railcars through a network of 38 shops across North America, including 14 sites certified for tank car retrofitting and repair.  Greenbrier accounts for its interest in GBW under the equity method of accounting.
  • Board declares a quarterly dividend of $0.15 per share payable on December 3, 2014 to shareholders of record as of November 12, 2014.
  • To date, repurchased 1,017,562 shares of common stock completing the $50 million share repurchase program announced October 31, 2013.
  • New $50 million share repurchase program authorized.

Fiscal Year 2014 Highlights                                                                                                    

  • Record net earnings, excluding gain on contribution to GBW and restructuring charges, were $99.3 million, or $3.07 per diluted share, on revenue of $2.2 billion.
  • Adjusted EBITDA was a record $253.8 million or 11.5% of revenue.
  • Achieved ROIC of 16.9% excluding gain on contribution to GBW and restructuring charges.
  • New railcar deliveries totaled 16,200 units.
  • Orders totaled 34,300 units valued at $3.42 billion across a broad range of railcar types. 
  • Cash generated from operating activities was $136 million.

Strategic Initiatives

  • Fourth quarter aggregate gross margin reached 17.2%, compared to 16.3% in the third quarter, surpassing our stated goal of a minimum 13.5% by the fourth quarter of fiscal 2014.
  • Manufacturing gross margin reached a record 17.9% in the fourth quarter, driven by product mix, pricing, production efficiencies, and leasing strategy.
  • Successfully met $100 million capital efficiency goal, driven by asset-light leasing model. Net debt has decreased nearly $149 million since February 2013 when goal was set. 
  • New goals set of at least 20% aggregate gross margin and 25% ROIC by the second half of fiscal 2016.

William A. Furman, Chairman and CEO, said, "We leveraged our integrated business model to achieve our best annual performance yet and are well positioned to continue to grow in 2015 and beyond. We are obtaining the highest level of new orders in Greenbrier's history.  They are broad-based across many railcar types including tank cars, grain and sand covered hoppers, automotive, intermodal, boxcars, gondolas, and plastic pellet cars, among others. We also achieved record production levels and deliveries, all while improving operating efficiencies and enhancing our footprint in our manufacturing facilities.  Our leasing business continues to grow and has been completely transformed into an asset-light model, as we syndicate increased volumes of leased railcars to multiple investors who have access to low-cost capital and who value Greenbrier's products and services.   Our owned lease fleet has contracted by $85 million and railcars under our management have increased by 13,000 units since we announced this strategic initiative in April 2013.  Our combined actions produced manufacturing gross margins in the fourth quarter of 17.9%, a nearly six percentage point increase from last year. With a diverse backlog of 31,500 units, of which less than 40% are tank cars, we have good visibility stretching into our fiscal 2016."

"We have refocused our Wheels, Refurbishment & Parts segment.  Our 22 railcar repair shops and Watco's 16 shops have been moved into GBW, where the scale of a 38-shop network and operational excellence will yield long-lasting competitive advantages.  Demand for shop capacity and, in particular, tank car shop capacity to address the need for safe rail transport solutions is robust. The GBW network includes 14 shops specializing in tank car repair.  Our wheels and parts business at a combined 13 locations is well positioned to produce growth, as the aftermarket for railcar wheels, parts and related services rises along with an expanding North American railcar fleet."

"Looking ahead, we will continue our balanced approach to capital allocation among (i) investments needed to drive efficiency and margin improvement through our organization, (ii) growth capital; and, (iii) returning capital to shareholders through dividends and share repurchases.  We will accelerate capital investments in 2015, which will drive operational efficiencies and complete previously announced capacity projects at our facilities in Mexico.  These projects include the transitioning from one leased facility in Sahagun, Mexico to an owned facility in Tlaxcala, Mexico, a doubling of our tank car capacity with the flexibility to also build other railcar types on these lines and enhanced vertical integration."

"We continue to pioneer efforts to improve safety in the rail industry with our Tank Car of the Future design and investments in capacity at GBW to retrofit older legacy tank cars. Last month we filed comments with the U.S. Department of Transportation (USDOT), which we expect will issue a final rule on tank car standards by year end. We are confident that Washington will recognize Greenbrier's Tank Car of the Future, as described in the USDOT's proposed rule, as the best design for safer transportation of crude, ethanol and other flammables in North America and that GBW is well positioned to retrofit older legacy tank cars at an accelerated pace. Swift and appropriate action will help reinforce America's longstanding priority to protect the public and preserve the natural environment, while taking care not to impede the economic prosperity associated with the energy renaissance in North America."

"I am proud of our employees, our shared achievements together and our successful completion of the strategic initiatives we announced 18 months ago. I'm confident in the balanced and integrated approach our leaders are taking in each segment of our business in 2015, and that this approach will enhance shareholder value over the long term," continued Furman. 

Business Outlook

Furman concluded, "We ended August with over $505 million of liquidity from cash balances and available borrowings on revolving credit facilities.  With a strong backlog, good industry fundamentals and positive outlook, we are investing in capital projects with high returns where we will quickly recoup our investments.  We are also pursuing growth opportunities in areas core to our business that will diversify our revenue base throughout the cycle.  The future looks bright for Greenbrier.  We remain committed to operational excellence in each of our businesses and enhancing the long-term trajectory of key metrics, such as gross margins, EBITDA and ROIC." 

 Based on current business trends and industry forecasts in fiscal 2015, Greenbrier believes:

  • Deliveries in FY15 will exceed 20,000 units
  • Revenue will exceed $2.5 billion, which excludes revenue from GBW as it is accounted for under the equity method of accounting
  • Diluted EPS will be in the range of $4.25 to $4.55

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.

In addition, the Company has established two new financial goals:  

  • Aggregate gross margin of at least 20% by the second half of fiscal 2016
  • ROIC of at least 25% by the second half of fiscal 2016

Financial Summary

 

Q4 FY14

Q3 FY14

Sequential Comparison – Main Drivers

Revenue

$618.1M

$593.3M

Up 4.2% primarily due to increased deliveries

Gross margin

17.2%

16.3%

Up 90 bps due to higher deliveries, favorable product mix and increased marine production

SG&A

$36.2M

$34.8M

Driven by employee-related costs associated with increased levels of activity

Gain on disposition

of equipment

$0.4M

$5.6M

Timing of sales fluctuates and is opportunistic, typically ranging from $1.0M to $5.0M per quarter

Special items

($29.0M)

$0.1M

Q4 non-cash gain resulted from contribution to GBW, Q3 restructuring charges related to the Wheel, Repair & Parts segment

Adjusted EBITDA (1)

$80.8M

$78.0M

Up 3.6% driven by increased deliveries and operating efficiencies

Effective tax rate

37.7%

26.3%

Higher rate driven by high rate on gain on contribution to GBW. Excluding the tax on gain, the rate was 30.6%.

Net earnings (1)

$33.7M

$33.6M

Higher gross margin offset by lower gain on disposition of equipment

Diluted EPS (1)

$1.03

$1.03

 

(1) Excluding non-cash gain on contribution to GBW in Q4 and restructuring charges in Q3.

 

Segment Summary

 

Q4 FY14

Q3 FY14

Sequential Comparison – Main Drivers

Manufacturing

Revenue

$492.1M

$425.6M

Up 15.6% primarily due to increase in deliveries

Gross margin

17.9%

17.3%

Increased due to improved efficiencies and product mix including more marine production

Operating margin (1)

14.8%

14.4%

 

Deliveries

4,800

4,300

 

Wheels, Repair & Parts

Revenue

$105.0M

$140.7M

Down 25.4% primarily attributable to contribution of repair operation to the GBW joint venture

Gross margin

6.5%

7.7%

Down 120 bps due to operating inefficiencies

Operating margin (1)

30.3%

3.9%

Increase due to gain on contribution to GBW; excluding gain margin was 2.7%

Leasing & Services

Revenue

$21.0M

$27.0M

Q3 benefited from syndication of third party produced railcars

Gross margin

53.7%

45.1%

Up 86 bps due to performance of the owned lease fleet

Operating margin (1) (2)

38.9%

53.9%

Down 15% due to lower gains on disposition of equipment

Lease fleet utilization

98.2%

97.9%

 

(1) See supplemental segment information on page 13 for additional information.

(2) Includes Gains on disposition of equipment, which is excluded from gross margin.

 

Conference Call

Greenbrier will host a teleconference to discuss its fourth quarter 2014 results. In conjunction with this news release, Greenbrier has posted a supplemental earnings presentation to our website.  Teleconference details are as follows:

  • October 30, 2014
  • 8:00 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 15, 2014, at 1-402-280-9971.

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. We build new railroad freight cars in our 4 manufacturing facilities in the U.S. and Mexico and marine barges at our U.S. manufacturing facility.  Greenbrier also sells reconditioned wheel sets and provides wheel services at 9 locations throughout the U.S.  We recondition, manufacture and sell railcar parts at 4 U.S. sites.  Greenbrier is a 50/50 joint venture partner with Watco Companies, LLC in GBW Railcar Services, LLC which repairs and refurbishes freight cars at 38 locations across North America, including 14 tank car repair and maintenance facilities certified by the Association of American Railroads. Greenbrier builds new railroad freight cars and refurbishes freight cars for the European market through our operations in Poland. Greenbrier owns approximately 8,500 railcars, and performs management services for approximately 238,000 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," "strategy," "could," "would," "should," "likely," "will," "may," "can," "designed to," "future," "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 and awards are not indicative of our financial results; uncertainty or changes 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, inefficiencies associated with expansion or start-up of production lines or increased production rates, changing technologies, transfer of production between facilities or non-performance of alliance partners, subcontractors or suppliers; ability to obtain suitable contracts for the sale of leased equipment and risks related to car hire and residual values; integration of current or future acquisitions and establishment of joint ventures; succession planning; discovery of defects in railcars or services resulting in increased warranty costs or litigation; physical damage or product or service liability claims that exceed our insurance coverage; train derailments or other accidents or claims that could subject us to legal claims; actions or inactions by various regulatory agencies including potential environmental remediation obligations or changing tank car or other rail car or railroad regulation; and issues arising from investigations of whistleblower complaints; 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, 2014, 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 gain on contribution to GBW and restructuring charges, Adjusted EBITDA, and Diluted earnings per share excluding gain on contribution to GBW and restructuring charges are not financial measures under generally accepted accounting principles (GAAP). We define Net earnings excluding gain on contribution to GBW and restructuring charges as Net earnings before gain on contribution to GBW (after-tax) and restructuring charges (after-tax). We define Adjusted EBITDA as Net earnings attributable to Greenbrier before interest and foreign exchange, income tax expense, restructuring charges, gain on contribution to GBW and depreciation and amortization. We define Diluted earnings per share excluding gain on contribution to GBW and restructuring charges as Net earnings excluding gain on contribution to GBW and restructuring charges before interest and debt issuance costs (net of tax) on convertible notes divided by Weighted average diluted common shares outstanding.  Net earnings excluding gain on contribution to GBW and restructuring charges, Adjusted EBITDA, and Diluted earnings per share excluding gain on contribution to GBW and restructuring charges are performance measurement tools used by Greenbrier. You should not consider Net earnings excluding gain on contribution to GBW and restructuring charges, Adjusted EBITDA, and Diluted earnings per share excluding gain on contribution to GBW 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 gain on contribution to GBW 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 gain on contribution to GBW 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, 2014

May 31,  2014

February 28, 2014

November 30, 2013

August 31, 2013

Assets

         

   Cash and cash equivalents

$      184,916

$     198,492

$     143,929

$       81,226

$       97,435

   Restricted cash

20,140

9,468

8,964

8,975

8,807

   Accounts receivable, net 

199,679

181,850

148,810

174,745

154,848

   Inventories

305,656

337,197

306,394

328,235

316,783

   Leased railcars for syndication

125,850

96,332

84,657

61,282

68,480

   Equipment on operating leases, net

258,848

274,863

282,328

293,291

305,468

   Property, plant and equipment, net

243,698

215,942

204,804

201,353

201,533

   Investment in unconsolidated affiliates

69,359

12,129

11,753

11,985

10,739

   Goodwill

43,265

57,416

57,416

57,416

57,416

   Intangibles and other assets, net

65,757

66,883

65,420

64,070

68,232

 

$ 1,517,168

$   1,450,572

$  1,314,475

$    1,282,578

$   1,289,741

           

Liabilities and Equity

         

   Revolving notes

$      13,081

$        18,082

$       26,738

$        38,805

$        48,209

   Accounts payable and accrued liabilities

383,289

356,541

319,611

293,041

315,938

   Deferred income taxes

81,383

79,526

84,848

86,501

86,040

   Deferred revenue

20,603

21,153

14,272

8,706

8,838

   Notes payable

445,091

447,068

371,427

372,666

373,889

           

   Total equity - Greenbrier

511,390

476,145

456,569

447,599

428,202

   Noncontrolling interest

62,331

52,057

41,010

35,260

28,625

   Total equity

573,721

528,202

497,579

482,859

456,827

 

$ 1,517,168

$   1,450,572

$  1,314,475

$    1,282,578

$   1,289,741

 

THE GREENBRIER COMPANIES, INC.

Consolidated Statements of Operations

(In thousands, except per share amounts)

 
 

Years ending August 31,

 

2014

 

2013

 

2012

Revenue

         

   Manufacturing

$ 1,624,916

 

$  1,215,734

 

$  1,253,964

   Wheels, Repair & Parts

495,627

 

469,222

 

481,865

   Leasing & Services

83,419

 

71,462

 

71,887

 

2,203,962

 

1,756,418

 

1,807,716

Cost of revenue

         

   Manufacturing

1,374,008

 

1,082,889

 

1,122,384

   Wheels, Repair & Parts

463,938

 

431,501

 

433,541

   Leasing & Services

43,796

 

35,655

 

37,371

 

1,881,742

 

1,550,045

 

1,593,296

           

Margin

322,220

 

206,373

 

214,420

           

Selling and administrative

125,270

 

103,175

 

104,596

Net gain on disposition of equipment

(15,039)

 

(18,072)

 

(8,964)

Gain on contribution to joint venture

(29,006)

 

-

 

-

Goodwill impairment

-

 

76,900

 

-

Restructuring charges

1,475

 

2,719

 

-

Earnings from operations

239,520

 

41,651

 

118,788

           

Other costs

         

   Interest and foreign exchange

18,695

 

22,158

 

24,809

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

 

220,825

 

 

19,493

 

 

93,979

Income tax expense

(72,401)

 

(25,060)

 

(32,393)

Earnings (loss) before earnings (loss) from

   unconsolidated affiliates

 

148,424

 

 

(5,567)

 

 

61,586

Earnings (loss) from unconsolidated affiliates

1,355

 

186

 

(416)

           

Net earnings (loss)

149,779

 

(5,381)

 

61,170

Net earnings attributable to noncontrolling interest

(37,860)

 

(5,667)

 

(2,462)

           

Net earnings (loss) attributable to Greenbrier

$    111,919

 

$     (11,048)

 

$       58,708

           

Basic earnings (loss) per common share:

$          3.97

 

$         (0.41)

 

$           2.21

           

Diluted earnings (loss) per common share:

$          3.44

 

$         (0.41)

 

$           1.91

           

Weighted average common shares:

         

Basic

28,164

 

26,678

 

26,572

Diluted

34,209

 

26,678

 

33,718

           

Dividends declared per common share

$          0.15

 

$               -

 

$                -

 

 

THE GREENBRIER COMPANIES, INC.

Consolidated Statements of Cash Flows

(In thousands)

 
 

Years Ended August 31,

 
 

2014

 

2013

 

2012

Cash flows from operating activities:

           

    Net earnings (loss)

$         149,779

 

$         (5,381)

 

$         61,170

    Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:

         

      Deferred income taxes

(4,687)

 

(9,662)

 

11,617

      Depreciation and amortization

40,422

 

41,447

 

42,371

      Net gain on disposition of equipment

(15,039)

 

(18,072)

 

(8,964)

      Accretion of debt discount

-

 

2,455

 

3,259

      Stock based compensation expense

11,285

 

6,302

 

8,757

      Gain on contribution to joint venture

(29,006)

 

-

 

-

      Goodwill impairment

-

 

76,900

 

-

      Other

3,350

 

(1,055)

 

4,905

      Decrease (increase) in assets:

         

          Accounts receivable, net

(23,749)

 

(7,323)

 

37,763

          Inventories

9,675

 

19,045

 

3,709

          Leased railcars for syndication

(57,779)

 

22,881

 

(76,071)

          Other

(4,069)

 

969

 

-

    Increase (decrease) in liabilities:

         

          Accounts payable and accrued liabilities

63,362

 

(15,429)

 

16,236

          Deferred revenue

11,713

 

(8,485)

 

11,304

    Net cash  provided by operating activities

135,907

 

104,592

 

116,056

Cash flows from investing activities:

         

    Proceeds from sales of assets

54,235

 

75,338

 

33,560

    Capital expenditures

(70,227)

 

(60,827)

 

(117,885)

    Increase in restricted cash

(333)

 

(2,530)

 

(4,164)

    Investment in and advances to unconsolidated affiliates

(13,753)

 

(2,240)

 

(506)

    Other

-

 

(3,582)

 

48

    Net cash provided by (used in) investing activities

(30,078)

 

6,159

 

(88,947)

Cash flows from financing activities:

         

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

-

 

(16,396)

 

(57,302)

    Proceeds from revolving notes with maturities longer than 90 days

37,819

 

38,177

 

63,773

    Repayments of revolving notes with maturities longer than 90 days

(72,947)

 

(34,966)

 

(33,934)

    Proceeds from issuance of notes payable

200,000

 

2,186

 

2,750

    Debt issuance costs

(382)

 

-

 

-

    Increase in restricted cash

(11,000)

 

-

   

    Repayments of notes payable

(128,797)

 

(58,831)

 

(7,070)

    Repurchase of stock

(33,583)

 

-

 

-

    Dividends

(4,123)

 

-

 

-

    Cash distribution to joint venture partner

(5,076)

 

-

 

-

    Investment by joint venture partner  

419

 

3,206

 

1,362

    Excess tax benefit from restricted stock awards

109

 

900

 

1,627

    Other

-

 

(8)

 

-

    Net cash used in financing activities

(17,561)

 

(65,732)

 

(28,794)

    Effect of exchange rate changes

(787)

 

(1,155)

 

5,034

Increase in cash and cash equivalents

87,481

 

43,864

 

3,349

Cash and cash equivalents

         

Beginning of period

97,435

 

53,571

 

50,222

End of period

$         184,916

 

$        97,435

 

$        53,571

                           

 

 

THE GREENBRIER COMPANIES, INC.

Supplemental Information

(In thousands, except per share amounts, unaudited)

 

Operating Results by Quarter for 2014 are as follows:

 
 

First

 

Second

 

Third

 

Fourth

 

Total

                   

Revenue

                 

   Manufacturing

$           359,473

 

$   347,755

 

$   425,583

 

$     492,105

 

$     1,624,916

   Wheels, Repair & Parts

113,401

 

136,540

 

140,663

 

105,023

 

495,627

   Leasing & Services

17,481

 

17,921

 

27,039

 

20,978

 

83,419

 

490,355

 

502,216

 

593,285

 

618,106

 

2,203,962

Cost of revenue

                 

   Manufacturing

311,440

 

306,572

 

351,829

 

404,167

 

1,374,008

   Wheels, Repair & Parts

107,975

 

127,940

 

129,825

 

98,198

 

463,938

   Leasing & Services

9,381

 

9,853

 

14,856

 

9,9706

 

43,796

 

428,796

 

444,365

 

496,510

 

512,071

 

1,881,742

                   

Margin

61,559

 

57,851

 

96,775

 

106,035

 

322,220

                   

Selling and administrative expense

26,109

 

28,125

 

34,800

 

36,236

 

125,270

Net gain on disposition of equipment

(3,651)

 

(5,416)

 

(5,619)

 

(353)

 

(15,039)

Restructuring charges

879

 

540

 

56

 

-

 

1,475

Gain on contribution to joint venture

-

 

-

 

-

 

(29,006)

 

(29,006)

Earnings from operations

38,222

 

34,602

 

67,538

 

99,158

 

239,520

                   

Other costs

                 

   Interest and foreign exchange

4,744

 

4,099

 

5,437

 

4,415

 

18,695

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

33,478

 

30,503

 

 

62,101

 

 

94,743

 

220,825

 

                   

Income tax expense

(10,522)

 

(9,883)

 

(16,303)

 

(35,693)

 

(72,401)

Earnings before earnings (loss) from  unconsolidated affiliates

22,956

 

20,620

 

45,798

 

59,050

 

148,424

Earnings (loss) from unconsolidated affiliates

41

 

(67)

 

298

 

1,083

 

1,355

Net earnings

22,997

 

20,553

 

46,096

 

60,133

 

149,779

Net earnings attributable to noncontrolling interest

 

(7,609)

 

 

(4,966)

 

 

(12,508)

 

 

(12,777)

 

 

(37,860)

Net earnings attributable to Greenbrier

$         15,388

 

$     15,587

 

$       33,588

 

$         47,356

 

$         111,919

                   

Basic earnings per common share (1)

$         0.54

 

$         0.55

 

$  1.20

 

$             1.69

 

$              3.97

Diluted earnings per common share (1)

$         0.49

 

$         0.50

 

$  1.03

 

$             1.43

 

$              3.44

   

(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 dilutive effect of the 2026 Convertible Notes 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, except per share amounts, unaudited)

 

Operating Results by Quarter for 2013 are as follows:

 
 

First

 

Second

 

Third

 

Fourth

 

Total

                   

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: (1)

$          0.35

 

$           0.45

 

$       (2.10)

 

$             0.64

 

$              (0.41)

   

(1)

Quarterly amounts do not total to the annual 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

(In thousands, unaudited)

 

Segment Information

 

Three months ended August 31, 2014:

               
 

Revenue

 

Earnings (loss) from operations

 

External

 

Intersegment

 

Total

 

External

 

Intersegment

 

Total

Manufacturing

$       492,105

 

$               790

 

$      492,895

 

$        73,013

 

$                 61

 

$    73,074

Wheels, Repair & Parts

105,023

 

4,090

 

109,113

 

31,873

 

(104)

 

31,769

Leasing & Services

20,978

 

8,350

 

29,328

 

8,167

 

8,350

 

16,517

Eliminations

-

 

(13,230)

 

(13,230)

 

-

 

(8,307)

 

(8,307)

Corporate

-

 

-

 

-

 

(13,895)

 

-

 

(13,895)

 

$       618,106

 

$                   -

 

$     618,106

 

$       99,158

 

$                   -

 

$    99,158

 

Three months ended May 31, 2014:

               
 

Revenue

 

Earnings (loss) from operations

 

External

 

Intersegment

 

Total

 

External

 

Intersegment

 

Total

Manufacturing

$       425,583

 

$                    -

 

$     425,583

 

$       61,116

 

$                    -

 

$    61,116

Wheels, Repair & Parts

140,663

 

3,783

 

144,446

 

5,524

 

473

 

5,997

Leasing & Services

27,039

 

9,334

 

36,373

 

14,582

 

9,334

 

23,916

Eliminations

-

 

(13,117)

 

(13,117)

 

-

 

(9,807)

 

(9,807)

Corporate

-

 

-

 

-

 

(13,684)

 

-

 

(13,684)

 

$       593,285

 

$                   -

 

$     593,285

 

$       67,538

 

$                   -

 

$    67,538

 

 

Total assets

 
 

August 31,

 

May 31,

 
 

2014

 

2014

 

Manufacturing

$           521,711

 

$             500,434

 

Wheels, Repair & Parts

298,009

 

316,416

 

Leasing & Services

436,075

 

425,751

 

Unallocated

(261,373)

 

207,971

 
 

$        1,517,168

 

$          1,450,572

 

 

THE GREENBRIER COMPANIES, INC.

Supplemental Information

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

 

Reconciliation of Net earnings to Adjusted EBITDA (1)

 
     

Three Months Ended

     

August 31,

2014

 

May 31,

2014

Net earnings

$             60,133

 

$             46,096

Interest and foreign exchange

4,415

 

5,437

Income tax expense

35,693

 

16,303

Depreciation and amortization

9,598

 

10,071

Restructuring charges

-

 

56

Gain on contribution to GBW

(29,006)

 

-

Adjusted EBITDA

$                80,833

 

$                77,963

           

(1)

Adjusted EBITDA is not a financial measure under generally accepted accounting principles (GAAP). We define Adjusted EBITDA as Net earnings before interest and foreign exchange, income tax expense, restructuring charges, gain on contribution to GBW, 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, 2014

 

Year Ended August 31, 2014

 

Backlog Activity (units)

           

Beginning backlog

26,400

 

14,400

 

Orders received

10,400

 

34,300

 

Production held as Leased railcars for syndication

(1,600)

 

(4,100)

 

Production sold directly to third parties

(3,700)

 

(13,100)

 

Ending backlog

31,500

 

31,500

 
         

Delivery Information (units)

       

Production sold directly to third parties

3,700

 

13,100

 

Sales of Leased railcars for syndication

1,100

 

3,100

 

Total deliveries

4,800

 

16,200

 

 

 

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 gain on contribution to GBW and restructuring charges are reconciled as follows:

 

Three Months Ended

   

August 31,

2014

 

May 31,

2014

 

Weighted average basic common shares outstanding (1)

27,988

 

27,956

 

Dilutive effect of convertible notes (2)

6,049

 

6,045

 

Weighted average diluted common shares outstanding

34,037

 

34,001

         

(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.

(2)

The dilutive effect of the 2018 Convertible notes are included in the Weighted average diluted common shares outstanding as they were considered dilutive under the "if converted" method as further discussed below. The dilutive effect of the 2026 Convertible notes are included in the Weighted average diluted common shares outstanding as the average stock price during the period exceeded the conversion price of $48.05; however, the dilutive impact was inconsequential for the three months ended May 31, 2014.

Diluted earnings per share 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.

 

Reconciliation of Net earnings attributable to Greenbrier to Net earnings excluding gain on contribution to GBW and restructuring charges

 
 

Three Months Ended

 
 

August 31,

2014

 

May 31,

2014

 

Net earnings attributable to Greenbrier

$              47,356

 

$               33,588

 

Restructuring charges (after-tax)

-

 

41

 

Gain on contribution to GBW (after-tax)

(13,633)

 

-

 

Net earnings excluding gain on contribution to GBW and restructuring charges

33,723

 

33,629

 

Add back:

       

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

1,416

 

1,416

 

Earnings before interest and debt issuance costs on convertible notes

$              35,139

 

$               35,060

 

Weighted average diluted common shares outstanding

34,037

 

34,001

 
         

Diluted earnings per share excluding gain on contribution to GBW and restructuring charges 

$                    1.03

 

$                    1.03

 

 

 

SOURCE The Greenbrier Companies, Inc. (GBX)