Media & Resources Press Releases Greenbrier Reports Record Second Quarter Results with Continued Margin Expansion

Greenbrier Reports Record Second Quarter Results with Continued Margin Expansion

LAKE OSWEGO, Ore., April 7, 2015 /PRNewswire/ -- The Greenbrier Companies, Inc. (NYSE: GBX) today reported financial results for its second fiscal quarter ended February 28, 2015.

Second Quarter Highlights

  • Net earnings attributable to Greenbrier for the quarter were $50.4 million, or $1.57 per diluted share, on revenue of $630 million
  • Adjusted EBITDA for the quarter was $102.7 million, or 16.3% of revenue.
  • New railcar backlog as of February 28, 2015 was 46,000 units with an estimated value of $4.78 billion (average unit sale price of $104,000), compared to 41,200 units with an estimated value of $4.20 billion (average unit sale price of $102,000) as of November 30, 2014.
  • Diversified orders for 10,100 new railcars valued at $1.09 billion were received during the quarter.
  • New railcar deliveries totaled 5,200 units for the quarter, compared to 4,000 units for the quarter ended November 30, 2014.
  • Marine backlog as of February 28, 2015 was approximately $80 million.
  • Board declares a quarterly dividend of $0.15 per share payable on May 6, 2015 to shareholders of record as of April 15, 2015.
  • Repurchased 483,983 shares of common stock at a cost of $23.8 million during the quarter.  Cumulative repurchases from October 31, 2013 through February 28, 2015 aggregate 1,627,224 shares at a cost of $81.4 million, or an average price of $49.99 per share.  We have $43.6 million available under our share repurchase program.

Progress on Longer Term Financial Goals

  • Aggregate gross margin expanded to 19.9%, compared to 17.8% in the prior quarter, nearly reaching the goal of at least 20% gross margin by the second half of fiscal 2016. As a reminder, while gross margins continued to increase, management does not expect this track to be linear.
  • We remain on track to reach the goal of at least 25% ROIC by the second half of fiscal 2016.  Annualized ROIC of 19.6% reflects record operating results tempered by working capital needs associated with higher production and syndication volumes, and planned capital expenditure programs.

William A. Furman, Chairman and CEO, said, "Our record results this quarter, including margin expansion and earnings growth, reflect the soundness of our diversified and integrated business model, improved business execution and greater scale.   Our aggregate gross margin in the second quarter grew to 19.9%, nearly twice last year's level; at the same time we continue to execute on ramping up production on new manufacturing lines."

"Our diverse new railcar backlog of 46,000 units represents the sixth consecutive quarter where the quantity and value of our backlog has increased.  It is now more than triple the size of just one year ago, with production on certain production lines stretching into 2019.  Nearly 80% of our year-to-date orders for 24,200 railcars are non-energy related, including orders for double stack intermodal cars, grain hopper cars, automotive carrying cars, non-energy related tank cars, boxcars, and mill gondola cars for scrap steel. These orders, along with others in our backlog, include multi-year orders for various car types, a positive indication that our customers believe, as do we, that end-user demand for new railcars will remain solid for the foreseeable future.  The regulatory picture for tank cars transporting hazardous materials should be clarified no later than May. We expect Greenbrier's Tank Car of the Future will be the new standard, and that additional new car and retrofit orders will occur regardless of oil prices," Furman continued.

Furman concluded, "Our strong order book, which includes several core leasing company partners, provides us good visibility through fiscal 2016 and beyond.  If the strong new railcar cycle continues to play out over the next 3-4 years, as many forecast it will, then Greenbrier should be well positioned to generate significant free cash flow.  We will continue to take a balanced approach to reinvesting in high rate of return projects in our core business, seeking acquisitions in our core competencies, and returning capital to shareholders."

Transaction Update
We anticipate our 20% equity investment in Brazil's Amsted-Maxion Hortolândia, the leading railcar manufacturer in South America, will close during the third quarter.

Business Outlook
Based on current business trends and industry forecasts, Greenbrier has raised its guidance to:

  • Deliveries in FY15 of about 21,500 units
  • Revenue of approximately $2.6 to $2.7 billion, which excludes revenue from GBW as it is accounted for under the equity method of accounting
  • Diluted EPS  in the range of $5.65 to $5.95
  • Adjusted EBITDA in the range of $420 to $435 million

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 continue to increase overall, management does not believe this track will be linear. 

As noted in the "Safe Harbor" statement, there are risks to achieving this guidance.  Certain orders and backlog in this release are subject to customary documentation and completion of terms.

Financial Summary

 

Q2 FY15

Q1 FY15

Sequential Comparison – Main Drivers

Revenue

$630.1M

$495.1M

Up 27.3% primarily due to increased deliveries

Gross margin

19.9%

17.8%

Up 210 bps due to higher deliveries, favorable product mix and pricing, and improved production efficiencies

Selling and

administrative expense

$32.9M

$33.7M

Down 2.4% primarily due to higher professional fees in Q1

Gain on disposition

of equipment

$0.1M

$0.1M

Timing of sales fluctuates and is opportunistic, typically may range from $1.0M to $3.0M per quarter

Adjusted EBITDA

$102.7M

$67.2M

Up 52.8% driven by higher deliveries and margins

Effective tax rate

32.4%

31.3%

Reflects geographic mix of earnings

Net earnings

$50.4M

$32.8M

 

Diluted EPS

$1.57

$1.01

 

Segment Summary

 

Q2 FY15

Q1 FY15

Sequential Comparison – Main Drivers

Manufacturing

  Revenue

$505.2M

$379.9M

Up 33.0% primarily due to higher deliveries

  Gross margin

20.2%

16.8%

Up 340 bps due to favorable product mix and pricing, improved efficiencies and weakening Peso

  Operating margin (1)

18.0%

13.7%

 

  Deliveries

5,200

4,000

 

Wheels & Parts

  Revenue

$102.6M

$86.6M

Up 18.5% primarily attributable to higher volume and product mix

  Gross margin

9.6%

11.3%

Down 170 bps primarily due to reduced price of scrap steel

  Operating margin (1)

7.8%

9.2%

 

Leasing & Services

  Revenue

$22.3M

$28.5M

Q1 includes syndication of third party produced railcars

  Gross margin

60.3%

50.6%

Up 970 bps due to lower margin syndication of third party produced railcars in Q1, and higher margin interim rents on leased railcars for syndication in Q2

  Operating margin (1) (2)

44.1%

38.8%

 

  Lease fleet utilization

99.5%

98.1%

 
 

(1) See supplemental segment information on page 11 for additional information.

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

Conference Call
Greenbrier will host a teleconference to discuss its second quarter 2015 results. In conjunction with this news release, Greenbrier has posted a supplemental earnings presentation to our website.  Teleconference details are as follows:

  • April 7, 2015
  • 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.  

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 39 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 8,300 railcars, and performs management services for approximately 241,000 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.

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, 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, this measure presented may differ from and may not be comparable to similarly titled measures used by other companies.

Annualized ROIC is calculated by taking year to date Earnings from operations, less cash paid for income taxes, net, which is then annualized and divided by the average balance of the sum of the Revolving notes, plus Notes payable, plus Total equity, less cash in excess of $40 million.  The average is calculated based on the quarterly ending balances.

 

THE GREENBRIER COMPANIES, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, unaudited)

           
 

   February 28, 2015

November 30, 2014

  August 31, 2014

May 31, 2014

February 28, 2014

Assets

         

   Cash and cash equivalents

$    145,512

$    118,958

$    184,916

$       198,492

$     143,929

   Restricted cash

8,722

9,170

20,140

9,468

8,964

   Accounts receivable, net 

207,488

191,532

199,679

181,850

148,810

   Inventories

418,590

372,039

305,656

337,197

306,394

   Leased railcars for syndication

198,010

177,221

125,850

96,332

84,657

   Equipment on operating leases, net

261,234

264,615

258,848

274,863

282,328

   Property, plant and equipment, net

271,977

258,303

243,698

215,942

204,804

   Investment in unconsolidated affiliates

71,225

72,342

69,359

12,129

11,753

   Goodwill

43,265

43,265

43,265

57,416

57,416

   Intangibles and other assets, net

64,386

61,937

65,757

66,883

65,420

 

$ 1,690,409

$ 1,569,382

$ 1,517,168

$    1,450,572

$  1,314,475

           

Liabilities and Equity

         

   Revolving notes

$      90,563

$      46,527

$      13,081

$         18,082

$       26,738

   Accounts payable and accrued liabilities

417,844

374,509

383,289

356,541

319,611

   Deferred income taxes

77,632

81,808

81,383

79,526

84,848

   Deferred revenue

28,287

27,067

20,603

21,153

14,272

   Notes payable

441,326

443,303

445,091

447,068

371,427

           

   Total equity - Greenbrier

541,491

519,884

511,390

476,145

456,569

   Noncontrolling interest

93,266

76,284

62,331

52,057

41,010

   Total equity

634,757

596,168

573,721

528,202

497,579

 

$  1,690,409

$ 1,569,382

$ 1,517,168

$    1,450,572

$  1,314,475

 

THE GREENBRIER COMPANIES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts, unaudited)

     
 

Three Months Ended

February 28,

Six Months Ended

February 28,

 

2015

 

2014

 

2015

 

2014

 

Revenue

               

        Manufacturing

$             505,241

 

$        347,755

 

$      885,190

 

$      707,228

 

        Wheels & Parts

102,640

 

136,540

 

189,264

 

249,941

 

        Leasing & Services

22,268

 

17,921

 

50,753

 

35,402

 
 

630,149

 

502,216

 

1,125,207

 

992,571

 

Cost of revenue

               

        Manufacturing

403,227

 

306,572

 

719,264

 

618,012

 

        Wheels & Parts

92,768

 

127,940

 

169,640

 

235,915

 

        Leasing & Services

8,844

 

9,853

 

22,925

 

19,234

 
 

504,839

 

444,365

 

911,829

 

873,161

 
                 

Margin

125,310

 

57,851

 

213,378

 

119,410

 
                 

Selling and administrative expense

32,899

 

28,125

 

66,628

 

54,234

 

Net gain on disposition of equipment

(121)

 

(5,416)

 

(204)

 

(9,067)

 

Restructuring charges

-

 

540

 

-

 

1,419

 

Earnings from operations

92,532

 

34,602

 

146,954

 

72,824

 
                 

Other costs

               

        Interest and foreign exchange

1,929

 

4,099

 

5,070

 

8,843

 

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

90,603

 

30,503

 

141,884

 

63,981

 

Income tax expense

(29,372)

 

(9,883)

 

(45,426)

 

(20,405)

 

Earnings before earnings (loss) from unconsolidated affiliates

61,231

 

20,620

 

96,458

 

43,576

 

Earnings (loss) from unconsolidated affiliates

(185)

 

(67)

 

570

 

(26)

 

Net earnings

61,046

 

20,553

 

97,028

 

43,550

 

Net earnings attributable to noncontrolling interest

(10,695)

 

(4,966)

 

(13,891)

 

(12,575)

 
                 

Net earnings attributable to Greenbrier

$             50,351

 

$          15,587

 

$        83,137

 

$        30,975

 
                 

Basic earnings per common share:

$                1.86

 

$              0.55

 

$            3.04

 

$            1.09

 
                 

Diluted earnings per common share:

$                1.57

 

$              0.50

 

$            2.57

 

$            0.98

 
                 

Weighted average common shares:

               

        Basic

27,028

 

28,300

 

27,348

 

28,359

 

        Diluted

33,073

 

34,345

 

33,395

 

34,404

 
                 

Dividends declared per common share:

$                0.15

 

$                   -

 

$           0.30

 

$                 -

 

                                       

THE GREENBRIER COMPANIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)

 

 

Six Months Ended February 28,

   

2015

 

2014

 

Cash flows from operating activities:

         

   Net earnings

$

97,028

$

43,550

 

   Adjustments to reconcile net earnings to net cash provided by

(used in) operating activities:

         

      Deferred income taxes

 

(3,245)

 

(1,448)

 

      Depreciation and amortization

 

22,398

 

20,753

 

      Net gain on disposition of equipment

 

(204)

 

(9,067)

 

      Stock based compensation expense

 

7,193

 

2,862

 

      Noncontrolling interest adjustments

 

21,824

 

2,439

 

      Other

 

549

 

329

 

      Decrease (increase) in assets:

         

         Accounts receivable, net

 

(6,256)

 

6,900

 

         Inventories

 

(116,432)

 

9,147

 

         Leased railcars for syndication

 

(75,564)

 

(13,603)

 

         Other

 

(355)

 

68

 

      Increase (decrease) in liabilities:

         

         Accounts payable and accrued liabilities

 

37,521

 

(487)

 

         Deferred revenue

 

7,750

 

5,377

 

      Net cash provided by (used in) operating activities

 

(7,793)

 

66,820

 

Cash flows from investing activities:

         

   Proceeds from sales of assets

 

3,019

 

28,671

 

   Capital expenditures

 

(53,856)

 

(16,529)

 

   Investment in and advances to unconsolidated affiliates

 

(5,715)

 

(1,253)

 

   Decrease (increase) in restricted cash

 

418

 

(157)

 

   Other

 

467

 

-

 

   Net cash provided by (used in) investing activities

 

(55,667)

 

10,732

 

Cash flows from financing activities:

         

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

 

53,000

 

-

 

   Proceeds from revolving notes with maturities longer than 90 days

 

42,563

 

31,738

 

   Repayments of revolving notes with maturities longer than 90 days

 

(18,081)

 

(53,209)

 

   Repayments of notes payable

 

(3,740)

 

(2,462)

 

   Decrease in restricted cash

 

11,000

 

-

 

   Repurchase of stock

 

(46,946)

 

(8,889)

 

   Dividends

 

(8,016)

 

-

 

   Investment by joint venture partner

 

-

 

419

 

   Cash distribution to joint venture partner

 

(4,422)

 

(1,604)

 

   Excess tax benefit from restricted stock awards

 

3,858

 

110

 

   Net cash provided by (used in) financing activities

 

29,216

 

(33,897)

 

Effect of exchange rate changes

 

(5,160)

 

2,839

 

Increase (decrease) in cash and cash equivalents

 

(39,404)

 

46,494

 

Cash and cash equivalents

         

   Beginning of period

 

184,916

 

97,435

 

   End of period

$

145,512

$

143,929

 

 

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

 (In thousands, except per share amounts, unaudited)

 

Operating Results by Quarter for 2015 are as follows:

             
 

First

 

Second

 

Total

 
             

Revenue

           

   Manufacturing

$     379,949

 

$     505,241

 

$          885,190

 

   Wheels & Parts

86,624

 

102,640

 

189,264

 

   Leasing & Services

28,485

 

22,268

 

50,753

 
 

495,058

 

630,149

 

1,125,207

 

Cost of revenue

           

   Manufacturing

316,037

 

403,227

 

719,264

 

   Wheels & Parts

76,872

 

92,768

 

169,640

 

   Leasing & Services

14,081

 

8,844

 

22,925

 
 

406,990

 

504,839

 

911,829

 
             

Margin

88,068

 

125,310

 

213,378

 
             

Selling and administrative expense

33,729

 

32,899

 

66,628

 

Net gain on disposition of equipment

(83)

 

(121)

 

(204)

 

Earnings from operations

54,422

 

92,532

 

146,954

 
             

Other costs

           

   Interest and foreign exchange

3,141

 

1,929

 

5,070

 

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

51,281

 

90,603

 

141,884

 

Income tax expense

(16,054)

 

(29,372)

 

(45,426)

 

Earnings before earnings (loss) from unconsolidated affiliates

35,227

 

61,231

 

96,458

 

Earnings (loss) from unconsolidated affiliates

755

 

(185)

 

570

 

Net earnings

35,982

 

61,046

 

97,028

 

Net earnings attributable to noncontrolling interest

(3,196)

 

(10,695)

 

(13,891)

 

Net earnings attributable to Greenbrier

$        32,786

 

$       50,351

 

$            83,137

 
             

Basic earnings per common share (1)

$           1.19

 

$           1.86

 

$                3.04

 

Diluted earnings per common share (1)

$           1.01

 

$           1.57

 

$                2.57

 

 

(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 when dilutive 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 2014 are as follows:

                     
 

First

 

Second

 

Third

 

Fourth

 

Total

 
                     

Revenue

                   

   Manufacturing

$        359,473

 

$   347,755

 

$   425,583

 

$     492,105

 

$    1,624,916

 

   Wheels & Parts (1)

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 & Parts (1)

107,975

 

127,940

 

129,825

 

98,198

 

463,938

 

   Leasing & Services

9,381

 

9,853

 

14,856

 

9,706

 

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 (2)

$           0.54

 

$         0.55

 

$  1.20

 

$             1.69

 

$             3.97

 

Diluted earnings per common share (2)

$           0.49

 

$         0.50

 

$  1.03

 

$             1.43

 

$             3.44

 
   

(1)

Wheels & Parts (previously known as Wheels, Repair & Parts) included our repair operations through July 18, 2014, at which time we and Watco, our joint venture partner, contributed our respective repair operations to GBW, an unconsolidated 50/50 joint venture.  After July 18, 2014, the results of GBW are included in Earnings (loss) from unconsolidated affiliates as we account for our interest in GBW under the equity method of accounting.

   

(2)

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 when dilutive 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 February 28, 2015:

                 
                   
 

Revenue

 

Earnings (loss) from operations

 
 

External

 

Intersegment

 

Total

 

External

 

Intersegment

 

Total

 

Manufacturing

$          505,241

 

$                    81

 

$         505,322

 

$           90,876

 

$                      9

 

$      90,885

 

Wheels & Parts

102,640

 

5,934

 

108,574

 

7,976

 

653

 

8,629

 

Leasing & Services

22,268

 

18,627

 

40,895

 

9,811

 

18,627

 

28,438

 

Eliminations

-

 

(24,642)

 

(24,642)

 

-

 

(19,289)

 

(19,289)

 

Corporate

-

 

-

 

-

 

(16,131)

 

-

 

(16,131)

 
 

$          630,149

 

$                      -

 

$         630,149

 

$           92,532

 

$                      -

 

$      92,532

 
                   

Three months ended November 30, 2014:

                 
                   
 

Revenue

 

Earnings (loss) from operations

 
 

External

 

Intersegment

 

Total

 

External

 

Intersegment

 

Total

 

Manufacturing

$          379,949

 

$               7,420

 

$         387,369

 

$           52,051

 

$                  786

 

$      52,837

 

Wheels & Parts

86,624

 

6,911

 

93,535

 

7,932

 

784

 

8,716

 

Leasing & Services

28,485

 

13,184

 

41,669

 

11,042

 

13,184

 

24,226

 

Eliminations

-

 

(27,515)

 

(27,515)

 

-

 

(14,754)

 

(14,754)

 

Corporate

-

 

-

 

-

 

(16,603)

 

-

 

(16,603)

 
 

$          495,058

 

$                      -

 

$         495,058

 

$           54,422

 

$                      -

 

$      54,422

 
     
 

Total assets

 
 

February 28,

 

November 30

 
 

2015

 

2014

 

Manufacturing

$          663,567

 

$           585,240

 

Wheels & Parts

291,358

 

301,300

 

Leasing & Services

516,835

 

493,048

 

Unallocated

218,649

 

189,794

 
 

$       1,690,409

 

$        1,569,382

 
           

The results of operations for GBW, which are shown below, are not reflected in the above tables as the investment is accounted for under the equity method of accounting.

 

As of and for the

Three Months Ended

   

February 28,

2015

 

November 30,

2014

 

Revenue

$                     83,300

 

$                      82,500

 

Earnings (loss) from operations

$                     (2,000)

 

$                           300

 

Total assets

$                   217,400

 

$                    231,300

         
         

 

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

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

 

Reconciliation of Net earnings to Adjusted EBITDA

 
     

Three Months Ended

   
     

February 28, 2015

 

November 30, 2014

   

Net earnings

$             61,046

 

$             35,982

   

Interest and foreign exchange

1,929

 

3,141

   

Income tax expense

29,372

 

16,054

   

Depreciation and amortization

10,348

 

12,050

   

Adjusted EBITDA

$            102,695

 

$             67,227

   
             
 

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, 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

February 28, 2015

 

Backlog Activity (units)

       

Beginning backlog

41,200

 

Orders received

10,100

 

Production held as Leased railcars for syndication

(1,800)

 

Production sold directly to third parties

(3,500)

 

Ending backlog

46,000

 
     

Delivery Information (units)

   

Production sold directly to third parties

3,500

 

Sales of Leased railcars for syndication

1,700

 

Total deliveries

5,200

 

 

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 are reconciled as follows:

 
 

Three Months Ended

   

February 28,

2015

 

November 30,

2014

 

Weighted average basic common shares outstanding (1)

27,028

 

27,665

 

Dilutive effect of convertible notes (2)

6,045

 

6,048

 

Weighted average diluted common shares outstanding

33,073

 

33,713

         

(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.

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.

 

Three Months Ended

 
 

February 28,

2015

 

November 30,

2014

 

Net earnings attributable to Greenbrier

$               50,351

 

$                32,786

 

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

$                51,767

 

$                34,202

 

Weighted average diluted common shares outstanding

33,073

 

33,713

 
         

Diluted earnings per share

$                      1.57

 

$                       1.01

 

 

SOURCE The Greenbrier Companies, Inc. (GBX)