Media & Resources Press Releases Greenbrier Reports Record Third Quarter Revenue, Net Earnings, EPS, Adjusted EBITDA and Backlog

Greenbrier Reports Record Third Quarter Revenue, Net Earnings, EPS, Adjusted EBITDA and Backlog

LAKE OSWEGO, Ore., July 2, 2014 /PRNewswire/ -- The Greenbrier Companies, Inc. (NYSE: GBX) today reported financial results for its third fiscal quarter ended May 31, 2014.

Third Quarter Highlights

  • Net earnings attributable to Greenbrier for the quarter of $33.6 million, or $1.03 per diluted share, were over double the second quarter EPS of $0.50.
  • Adjusted EBITDA for the quarter was $78.0 million, or 13.1% of revenue.
  • Railcar backlog as of May 31, 2014 was 26,400 units with an estimated value of $2.75 billion (average unit sale price of $104,000), compared to 15,200 units with an estimated value of $1.54 billion (average unit sale price of $101,000) as of February 28, 2014.
  • New railcar deliveries totaled 4,300 units for the quarter, compared to 3,400 units for the quarter ended February 28, 2014.
  • Orders for 15,600 new railcars valued at $1.65 billion received during the quarter. After quarter end, Greenbrier received orders for an additional 2,700 units valued at approximately $320 million.
  • Marine backlog as of May 31, 2014 totaled approximately $110 million.
  • Board declares a quarterly dividend of $0.15 per share payable on August 5, 2014 to shareholders of record as of July 15, 2014.
  • Repurchased 352,000 shares of common stock at a cost of $16.0 million during the quarter. To date, repurchased 641,327 shares of common stock at a cost of $26.3 million under a $50 million share repurchase program.

Progress on Strategic Initiatives

  • Third quarter aggregate gross margin reached 16.3%, compared to 11.5% in the second quarter, and ahead of our stated goal of a minimum 13.5% by the fourth quarter of fiscal 2014.
  • Manufacturing gross margin reached a record 17.3% in the quarter, driven by product mix, pricing and production efficiencies.
  • Successfully met $100 million capital efficiency goal. Net debt has decreased nearly $160 million since February 2013 when goal was set.  Management remains intensely focused on capital efficiency and ROIC.
  • Greenbrier continues leadership role in tank car safety. Receives awards for 3,500 units of Tank Car of the Future; announces repair joint venture with Watco, GBW Railcar Services.

William A. Furman, Chairman and CEO, said, "This quarter represents a solid and sustainable performance level, and provides a good base for further growth and diversification.  All three of our business segments improved their financial performance, with manufacturing and leasing continuing to lead the way.  I am very proud of our employees for their achievements and execution against our strategic plan."

"We have diversified our product mix, added efficient capacity in lower cost facilities, and driven considerably more product through our leasing model, all in line with our announced strategy.  This strategy is paying off and we expect growth from all areas in our integrated business model in the quarters ahead.  Most recently, our planned repair joint venture with Watco, named GBW Railcar Services, will increase our scale in tank car repair, allowing us to participate in a meaningful way in the growing tank car repair business, with demand driven by retrofit, lining and maintenance needs from both the DOT-111 legacy and CPC-1232 fleets, as well as rapid growth in North American tank car traffic," Furman continued.

"In addition to tank car retrofits, we are also pioneering efforts to improve safety in the rail industry with our Tank Car of the Future design. Safety design features include thicker steel, more robust top and bottom outlet protections, and jacketed shells with ceramic insulation, along with full height head shields.  Recently, Greenbrier received awards for 3,500 units of its Tank Car of the Future.  These cars are eight times safer than legacy DOT-111 cars most widely used in oil and ethanol service today, and two times safer than the current state-of-the-art CPC 1232 tank cars, as measured by Conditional Probability of Release (CPR).  We continue to call on regulators to issue new rules establishing safer tank car standards independent of rulemaking on railroad speed restrictions.  Our government needs to act on this issue now. This will allow railroads to transport hazardous materials safer at any speed," Furman added.

Liquidity & Business Outlook

Furman concluded, "We ended May with over $530 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 investment.  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, and we remain committed to improving operations in each segment and enhancing the long-term trajectory of key metrics, such as gross margins, EBITDA and ROIC." 

 Based on current business trends and industry forecasts, Greenbrier now expects:

  • Deliveries in the fourth quarter to be between 4,300 units and 4,600 units, resulting in fiscal 2014 deliveries of 15,700 units to 16,000 units
  • Fourth quarter revenue to increase 4-6% above third quarter revenue of $593 million, resulting in annual revenue in excess of $2.2 billion
  • EPS, excluding restructuring charges, for the fourth quarter in the range of $0.95 to $1.05 resulting in fiscal 2014 EPS, excluding restructuring charges, in the range of $2.98 to $3.08 (1)

(1)     Quarterly amounts do not total to the annual amount as each period is calculated discretely.

The above estimates reflect an anticipated 29% tax rate and nominal gains on disposition of equipment in the fourth quarter.

The above estimates do not reflect any purchase price accounting adjustments, one-time transaction-related costs, or other effects that may occur in conjunction with the closing of the GBW joint venture.  While the trend in gross margin is expected to continue, management does not believe its track will be linear.

Greenbrier will provide its financial outlook for 2015 when fourth quarter results are released at the end of October 2014.

Financial Summary

 

Q3 FY14

Q2 FY14

Sequential Comparison – Main Drivers

Revenue

$593.3M

$502.2M

Up 18.1% primarily due to increased deliveries

Gross margin

16.3%

11.5%

Up 480 bps driven by improved efficiencies, pricing and product mix

SG&A

$34.8M

$28.1M

Up 23.8% driven by increased levels of activity and profitability

Gain on disposition

of equipment

$5.6M

$5.4M

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

Restructuring charges

$0.1M

$0.5M

Related to Wheels, Repair & Parts segment

Adjusted EBITDA (1)

$78.0M

$44.9M

Up 73.7% driven by increased deliveries and improved operating efficiencies

Effective tax rate (2)

26.3%

32.4%

Impacted by higher GIMSA JV earnings

Net earnings (1)

$33.6M

$16.0M

 

Diluted EPS

$1.03

$0.51 (1)

 
   

(1) 

Excluding restructuring charges.

(2)  

Earnings attributable to our 50% GIMSA JV can cause a significant reduction in the tax rate when those earnings are significant, as was the case in the third quarter.  This occurs since 100% of GIMSA's earnings are included in our pre-tax results, but income taxes only include Greenbrier's tax obligation on 50% of GIMSA's earnings.  Earnings and taxes are presented this way because the GIMSA JV is a non-taxpaying domestic partnership for which taxes are payable by the partners rather than the partnership.  Net earnings attributable to noncontrolling interest includes our partner's 50% share of GIMSA's pre-tax earnings.  The tax rate for the current and prior quarter would have been approximately 33% - 35% had GIMSA not been a partnership, and had 100% of pre-tax earnings been taxed, with noncontrolling interest shown net of tax.

Segment Summary

 

Q3 FY14

Q2 FY14

Sequential Comparison – Main Drivers

Manufacturing

  Revenue

$425.6M

$347.8M

Up 22.4% due to increased deliveries and higher marine activity

  Gross margin

17.3%

11.8%

Up 550 bps due to improved product mix, pricing  and production efficiencies

  Operating margin (2)

14.4%

8.7%

 

  Deliveries

4,300

3,400

 

Wheels, Repair & Parts

  Revenue

$140.7M

$136.5M

Up 3.1% due to increased wheel volume

  Gross margin

7.7%

6.3%

Up 140 bps due to improved efficiencies

  Operating margin (2) (3)

3.9%

2.6%

 

Leasing & Services

  Revenue

$27.0M

$17.9M

Up 50.8% due to syndication of third party produced railcars and more interim rent

  Gross margin

45.1%

45.0%

Up 10 bps

  Operating margin (2) (4)

53.9%

53.8%

 

  Lease fleet utilization

97.9%

97.6%

 
   
(2)

See supplemental segment information on page 12 for additional information.

(3)

Includes restructuring charges of $0.1 million in Q3 2014 and $0.5 million in Q2 2014.

(4)

Operating margin includes Gains on disposition of equipment, which is excluded from gross margin.

Conference Call

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

  • July 2, 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 July 19, 2014, at 402-280-9930.

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 four 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 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 235,000 railcars.  We recently announced a joint venture with the railcar repair and refurbishment operations of Watco Companies LLC to form GBW Railcar Services, LLC which will feature 38 repair and refurbishment sites across North America.

"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; 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, 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 interruption of our manufacturing operations as a result of lease termination or expiration; 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, 2013, 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 restructuring charges, Adjusted EBITDA, and Diluted earnings per share excluding restructuring charges are not financial measures under generally accepted accounting principles (GAAP). We define Net earnings excluding restructuring charges as Net earnings before restructuring charges (after-tax). We define Adjusted EBITDA as Net earnings attributable to Greenbrier before interest and foreign exchange, income tax expense, restructuring charges and depreciation and amortization. We define Diluted earnings per share excluding restructuring charges as Net earnings excluding 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 restructuring charges, Adjusted EBITDA, and Diluted earnings per share excluding restructuring charges are performance measurement tools used by Greenbrier. You should not consider Net earnings excluding restructuring charges, Adjusted EBITDA, and Diluted earnings per share excluding 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 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 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)

 

 
 

May 31,  2014

February 28, 2014

November 30, 2013

August 31,      2013

May 31, 
2013

Assets

         

   Cash and cash equivalents

$      198,492

$     143,929

$         81,226

$       97,435

$       31,606

   Restricted cash

9,468

8,964

8,975

8,807

8,906

   Accounts receivable, net 

181,850

148,810

174,745

154,848

162,352

   Inventories

337,197

306,394

328,235

316,783

344,168

   Leased railcars for syndication

96,332

84,657

61,282

68,480

71,091

   Equipment on operating leases, net

274,863

282,328

293,291

305,468

332,924

   Property, plant and equipment, net

215,942

204,804

201,353

201,533

197,779

   Goodwill

57,416

57,416

57,416

57,416

57,416

   Intangibles and other assets, net

79,012

77,173

76,055

78,971

79,364

 

$   1,450,572

$  1,314,475

$    1,282,578

$  1,289,741

$  1,285,606

           

Liabilities and Equity

         

   Revolving notes

$        18,082

$       26,738

$         38,805

$       48,209

$       92,968

   Accounts payable and accrued liabilities

356,541

319,611

293,041

315,938

286,964

   Deferred income taxes

79,526

84,848

86,501

86,040

86,229

   Deferred revenue

21,153

14,272

8,706

8,838

16,203

   Notes payable

447,068

371,427

372,666

373,889

372,942

           

   Total equity - Greenbrier

476,145

456,569

447,599

428,202

404,707

   Noncontrolling interest

52,057

41,010

35,260

28,625

25,593

   Total equity

528,202

497,579

482,859

456,827

430,300

 

$   1,450,572

$  1,314,475

$    1,282,578

$  1,289,741

$  1,285,606

 

 

THE GREENBRIER COMPANIES, INC.

Consolidated Statements of Operations

(In thousands, except per share amounts, unaudited)

 
 

Three Months Ended
May 31,

Nine Months Ended
May 31,

 

2014

 

2013

 

2014

 

2013

Revenue

             

        Manufacturing

$      425,583

 

$     284,591

 

$     1,132,811

 

$      864,006

        Wheels, Repair & Parts

140,663

 

131,167

 

390,604

 

355,219

        Leasing & Services

27,039

 

17,905

 

62,441

 

52,978

 

593,285

 

433,663

 

1,585,856

 

1,272,203

Cost of revenue

             

        Manufacturing

351,829

 

253,360

 

969,841

 

774,502

        Wheels, Repair & Parts

129,825

 

120,476

 

365,740

 

325,086

        Leasing & Services

14,856

 

9,808

 

34,090

 

26,542

 

496,510

 

383,644

 

1,369,671

 

1,126,130

               

Margin

96,775

 

50,019

 

216,185

 

146,073

               

Selling and administrative expense

34,800

 

25,322

 

89,034

 

76,364

Net gain on disposition of equipment

(5,619)

 

(5,131)

 

(14,686)

 

(9,615)

Goodwill impairment

-

 

76,900

 

-

 

76,900

Restructuring charges

56

 

-

 

1,475

 

-

Earnings (loss) from operations

67,538

 

(47,072)

 

140,362

 

2,424

               

Other costs

             

        Interest and foreign exchange

5,437

 

5,905

 

14,280

 

18,127

Earnings (loss) before income tax and earnings (loss)

   from unconsolidated affiliates

62,101

 

(52,977)

 

126,082

 

(15,703)

Income tax expense

(16,303)

 

(2,729)

 

(36,708)

 

(12,905)

Earnings (loss) before earnings (loss) from

   unconsolidated affiliates

45,798

 

(55,706)

 

89,374

 

(28,608)

Earnings (loss) from unconsolidated affiliates

298

 

82

 

272

 

(63)

Net earnings (loss)

46,096

 

(55,624)

 

89,646

 

(28,671)

 

Net earnings attributable to noncontrolling interest

(12,508)

 

(406)

 

(25,083)

 

(3,093)

               

Net earnings (loss) attributable to Greenbrier

$        33,588

 

$    (56,030)

 

$      64,563

 

$   (31,764)

               

Basic earnings (loss) per common share:

$            1.20

 

$        (2.10)

 

$          2.29

 

$       (1.20)

               

Diluted earnings (loss) per common share:

$            1.03

 

$        (2.10)

 

$          2.01

 

$       (1.20)

               

Weighted average common shares:

             

        Basic

27,956

 

26,619

 

28,223

 

26,510

        Diluted

34,001

 

26,619

 

34,268

 

26,510

               

 

 

THE GREENBRIER COMPANIES, INC.

Consolidated Statements of Cash Flows

(In thousands, unaudited)

 
 

Nine Months Ended
May 31,

 

2014

 

2013

Cash flows from operating activities:

     

    Net earnings (loss)

$        89,646

 

$       (28,671)

    Adjustments to reconcile net earnings (loss) to net cash

      provided by operating activities:

     

      Deferred income taxes

(6,745)

 

(9,391)

      Depreciation and amortization

30,824

 

31,523

      Net gain on disposition of equipment

(14,686)

 

(9,615)

     Accretion of debt discount

-

 

2,455

     Stock based compensation expense

6,454

 

4,843

      Goodwill impairment

-

 

76,900

      Other

3,341

 

(1,895)

      Decrease (increase) in assets:

     

          Accounts receivable

(26,226)

 

(15,499)

          Inventories

(21,722)

 

(9,114)

          Leased railcars for syndication

(25,420)

 

22,067

          Other

(2,491)

 

338

      Increase (decrease) in liabilities:

     

          Accounts payable and accrued liabilities

36,507

 

(43,605)

          Deferred revenue

12,258

 

(1,099)

    Net cash provided by operating activities

81,740

 

19,237

Cash flows from investing activities:

     

    Proceeds from sales of assets

39,515

 

39,611

    Capital expenditures

(34,522)

 

(49,677)

    Increase in restricted cash

(661)

 

(2,629)

   Investment in and net advances to unconsolidated affiliates

(1,253)

 

(1,016)

   Other

-

 

(3,582)

    Net cash provided by (used in) investing activities

3,079

 

(17,293)

Cash flows from financing activities:

     

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

-

 

26,973

   Proceeds from revolving notes with maturities longer than 90 days

34,674

 

31,847

   Repayments of revolving notes with maturities longer than 90 days

(64,801)

 

(26,877)

   Proceeds from issuance of notes payable

200,000

 

-

    Repayments of notes payable

(126,821)

 

(57,592)

    Debt issuance costs

(382)

 

-

    Repurchase of stock

(26,293)

 

-

    Cash distribution to joint venture partner

(3,109)

 

-

    Investment by joint venture  

419

 

2,577

   Excess tax benefit from restricted stock awards

109

 

777

   Other

-

 

(8)

    Net cash provided by (used in) financing activities

13,796

 

(22,303)

Effect of exchange rate changes

2,442

 

(1,606)

Increase (decrease) in cash and cash equivalents

101,057

 

(21,965)

Cash and cash equivalents

     

    Beginning of period

97,435

 

53,571

    End of period

$      198,492

 

$        31,606

 

 

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

 

Total

               

Revenue

             

   Manufacturing

$     359,473

 

$   347,755

 

$   425,583

 

$      1,132,811

   Wheels, Repair & Parts

113,401

 

136,540

 

140,663

 

390,604

   Leasing & Services

17,481

 

17,921

 

27,039

 

62,441

 

490,355

 

502,216

 

593,285

 

1,585,856

Cost of revenue

             

   Manufacturing

311,440

 

306,572

 

351,829

 

969,841

   Wheels, Repair & Parts

107,975

 

127,940

 

129,825

 

365,740

   Leasing & Services

9,381

 

9,853

 

14,856

 

34,090

 

428,796

 

444,365

 

496,510

 

1,369,671

               

Margin

61,559

 

57,851

 

96,775

 

216,185

               

Selling and administrative expense

26,109

 

28,125

 

34,800

 

89,034

Net gain on disposition of equipment

(3,651)

 

(5,416)

 

(5,619)

 

(14,686)

Restructuring charges

879

 

540

 

56

 

1,475

Earnings from operations

38,222

 

34,602

 

67,538

 

140,362

               

Other costs

             

   Interest and foreign exchange

4,744

 

4,099

 

5,437

 

14,280

Earnings before income tax and

   earnings (loss) from unconsolidated affiliates

33,478

 

30,503

 

 

62,101

 

 

126,082

 

               

Income tax expense

(10,522)

 

(9,883)

 

(16,303)

 

(36,708)

Earnings before earnings (loss) from 

   unconsolidated affiliates

22,956

 

20,620

 

45,798

 

89,374

Earnings (loss) from unconsolidated affiliates

41

 

(67)

 

298

 

272

Net earnings

22,997

 

20,553

 

46,096

 

89,646

Net earnings attributable to

   noncontrolling interest

 

(7,609)

 

 

(4,966)

 

 

(12,508)

 

 

(25,083)

Net earnings attributable to Greenbrier

$     15,388

 

$     15,587

 

$       33,588

 

$           64,563

               

Basic earnings per common share

$         0.54

 

$         0.55

 

$           1.20

 

$               2.29

Diluted earnings per common share (1)

$         0.49

 

$         0.50

 

$           1.03

 

$               2.01

   
(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: (2)

$          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.

   
(2)    

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 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

 

Three months ended February 28, 2014:

               
 

Revenue

 

Earnings (loss) from operations

 

External

 

Intersegment

 

Total

 

External

 

Intersegment

 

Total

Manufacturing

$      347,755

 

$                  -

 

$     347,755

 

$    30,112

 

$               -

 

$    30,112

Wheels, Repair & Parts

136,540

 

2,307

 

138,847

 

3,574

 

42

 

3,616

Leasing & Services

17,921

 

5,414

 

23,335

 

9,636

 

5,420

 

15,056

Eliminations

-

 

(7,721)

 

(7,721)

 

-

 

(5,462)

 

(5,462)

Corporate

-

 

-

 

-

 

(8,720)

 

-

 

(8,720)

 

$      502,216

 

$                    -

 

$     502,216

 

$     34,602

 

$              -

 

$    34,602

 

 

 

Total assets

 

May 31,

 

February 28,

 

2014

 

2014

Manufacturing

$             500,434

 

$             406,620

Wheels, Repair & Parts

316,416

 

317,921

Leasing & Services

425,751

 

437,043

Unallocated

207,971

 

152,891

 

$          1,450,572

 

$          1,314,475

 

THE GREENBRIER COMPANIES, INC.

Supplemental Information

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

 

Reconciliation of Net earnings to Adjusted EBITDA

 
     

Three Months Ended

     

May 31,
2014

 

February 28,
2014

Net earnings

$              46,096

 

$              20,553

Interest and foreign exchange

5,437

 

4,099

Income tax expense

16,303

 

9,883

Depreciation and amortization

10,071

 

9,856

Restructuring charges

56

 

540

     

,

 

,

Adjusted EBITDA

$                77,963

 

$                44,931

           

(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, 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 May 31,
2014

Backlog Activity (units)

     

Beginning backlog

15,200

Orders received

15,600

Production held as Leased railcars for syndication

(1,000)

Production sold directly to third parties

(3,400)

Ending backlog

26,400

   

Delivery Information (units)

 

Production sold directly to third parties

3,400

Sales of Leased railcars for syndication

900

Total deliveries

4,300

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 restructuring charges are reconciled as follows:

 

Three Months Ended

   

May 31,
2014

 

February 28,
2014

 

Weighted average basic common shares outstanding (1)

27,956

 

28,300

 

Dilutive effect of convertible notes (2)

6,045

 

6,045

 

Weighted average diluted common shares outstanding

34,001

 

34,345

         
         
(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 was included for the three months ended May 31, 2014 and excluded for the three months ended February 28, 2014 based on the average stock price being greater or less than the initial conversion price of $48.05; however, the dilutive impact was inconsequential to the quarter 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. 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.

Reconciliation of Net earnings attributable to Greenbrier to Net earnings excluding restructuring charges

 
 

Three Months Ended

 

May 31,
2014

 

February 28,
2014

Net earnings attributable to Greenbrier

$             33,588

 

$               15,587

Restructuring charges (after-tax)

41

 

365

Net earnings excluding restructuring charges (1)

33,629

 

15,952

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

 

$             35,060

 

 

                     7,368

Weighted average diluted common shares outstanding

34,001

 

34,345

       

Diluted earnings per share excluding restructuring charges (2)

$                    1.03

 

$                     0.51

   
(1) 

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

(2) 

Diluted earnings per share excluding restructuring charges is not a financial measure under GAAP. We define Diluted earnings per share excluding restructuring charges as Net earnings excluding restructuring charges before interest and debt issuance costs (net of tax) on convertible notes divided by Weighted average diluted common shares outstanding. Diluted earnings per share excluding restructuring charges is a performance measurement tool used by Greenbrier. You should not consider Diluted earnings per share excluding 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 restructuring charges is not a measure of financial performance under GAAP and is susceptible to varying calculations, the Diluted earnings per share excluding 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)