Media & Resources Press Releases Greenbrier Reports Second Quarter 2014 Results; Backlog Grows to 15,200 units

Greenbrier Reports Second Quarter 2014 Results; Backlog Grows to 15,200 units

LAKE OSWEGO, Ore., April 3, 2014 /PRNewswire/ -- The Greenbrier Companies, Inc. (NYSE: GBX) today reported financial results for its second fiscal quarter ended February 28, 2014.

Second Quarter Highlights

  • Net earnings for the quarter were $16.0 million, or $0.51 per diluted share, excluding restructuring charges (net of tax) of $0.4 million, on revenue of $502.2 million. 
  • Net earnings attributable to Greenbrier for the quarter, which includes restructuring charges, were $15.6 million, or $0.50 per diluted share.
  • Adjusted EBITDA for the quarter was $44.9 million, or 8.9% of revenue.
  • New railcar backlog as of February 28, 2014 was 15,200 units with an estimated value of $1.54 billion (average unit sale price of $101,000) compared to 13,500 units with an estimated value of $1.43 billion (average unit sale price of $106,000) on November 30, 2013.
  • New railcar deliveries totaled 3,400 units for the quarter, compared to 3,700 units for the quarter ended November 30, 2013.
  • Orders totaled 5,800 new railcars valued at $490 million during the quarter. After quarter end, Greenbrier received orders for another 3,100 units valued at approximately $265 million.
  • Marine backlog as of February 28, 2014 totaled $70 million and reflects orders for four vessels during the quarter.
  • Repurchased 260,717 shares of common stock at a cost of $9.4 million during the quarter. To date, repurchased 542,000 shares of common stock at a cost of $22 million under a $50 million share repurchase program.

Progress on Strategic Initiatives

  • Successfully met $100 million capital efficiency goal. Net debt reduced by over $75 million during the second quarter and about $170 million over the last year; management continues to focus on capital liberation, efficiency and ROIC.
  • Fourth quarter 2014 goal of a minimum 13.5% gross margin remains unchanged.
  • Company will enhance its manufacturing footprint; nearly double tank car manufacturing capacity and increase tank car repair and retrofit capacity to support expected growing demand.
  • To date, closed or sold seven underperforming or non-core facilities in the Wheels, Repair & Parts segment; restructuring and realignment continues in this business segment.

William A. Furman, chairman of the board and chief executive officer, said, "Broad based orders drove backlog at the end of the second quarter to 15,200 units, our second highest level in four years.  This momentum continued subsequent to quarter end, with additional orders for 3,100 units.  The energy sector continues to drive demand for small-cubed covered hoppers and tank cars, while intermodal, grain and automotive demand were also strong. In addition, our Marine business received orders for four barges during the second quarter with demand beginning to accelerate."

"Earnings were level with our first quarter, notwithstanding a decline in aggregate gross margin, which resulted from manufacturing line changeovers, low marine and new railcar production rates at our Gunderson facility in Portland, Oregon, and the impact of the severe winter. With the manufacturing line changeovers now complete, and with Gunderson now operating at higher marine and railcar production rates, we expect manufacturing margins to grow in the second half of the year.  Performance at our Wheels, Repair & Parts segment improved from last quarter; however, certain of our larger significant repair facilities continue to fall short of our expectations.  We are keenly focused on improving the performance of these facilities. We believe that the initiatives undertaken in the first half of the year, along with improved weather, will result in sequential improvement for this segment in the second half of the year.  Our Leasing & Services business remains strong. We continue to reduce the amount of long-term capital invested in this business and drive more volume through our lease syndication and asset management model. Working with multiple investors, we are realizing meaningful value from this segment.  We are committed to achieving at least a 13.5% aggregate gross margin by our fourth quarter," Furman added.

Liquidity & Business Outlook

Furman concluded, "We ended February with over $470 million of liquidity from cash balances and available borrowings on revolving credit facilities.  In March, we refinanced $125 million in senior term debt with new six-year $200 million senior term debt (both secured by railcars on lease), increasing our liquidity to over $500 million.  With a strong backlog and positive outlook, we are investing in capital projects with high returns and quick paybacks.  These projects include replacing existing higher cost leased manufacturing capacity in Mexico with a more efficient alternative site and expanding capacity at existing facilities in Mexico.  The result will be a more flexible, lower-cost manufacturing footprint better suited to our production needs, particularly for tank cars, where Greenbrier plans to nearly double capacity over the next 18 months.  This capacity will support anticipated heightened demand for our "Tank Car of the Future" and replacement demand for older DOT-111 cars.  We will continue to expand our tank car and retrofit capacity and capabilities, and will certify our largest repair facility in Cleburne, Texas, to perform tank car work.  This facility, which can handle tank car unit trains, is ideally situated on the transportation corridor between shale oil and gas-producing areas and refining and distribution operations near the Gulf of Mexico."

Based on current business trends and industry forecasts, in fiscal 2014 Greenbrier continues to believe:

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

As disclosed previously, financial results in the second half of the year are expected to be stronger than the first half. Also, while gross margin is expected to increase overall, management does not believe its track will be linear.

Financial Summary

 

Q2 FY14

Q1 FY14

Sequential Comparison – Main Drivers

Revenue

$502.2M

$490.4M

Up 2.4% due to higher volume of work in Wheels, Repair & Parts, partially offset by reduced deliveries

Gross margin

11.5%

12.6%

Down 110 bps due to Manufacturing line changeovers in Mexico, low production rates at Gunderson facility and impact of severe weather

SG&A

$28.1M

$26.1M

Up 7.7% primarily due to employee-related costs

Gain on disposition

of equipment

$5.4M

$3.7M

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

Restructuring charges

$0.5M

$0.9M

Related to Wheels, Repair & Parts segment

Adjusted EBITDA (1)

$44.9M

$50.0M

Down due to lower deliveries and gross margin, offset somewhat by timing of disposition of leased equipment

Effective tax rate

32.4%

31.4%

Reflects geographic mix of earnings

Net earnings (1)

$16.0M

$16.0M

 

Diluted EPS (1)

$0.51

$0.51

 

(1) Excluding restructuring charges.

Segment Summary

 

Q2 FY14

Q1 FY14

Sequential Comparison – Main Drivers

Manufacturing

  Revenue

$347.8M

$359.5M

Down 3.3% due to lower deliveries

  Gross margin

11.8%

13.4%

Down 160 bps due to inefficiencies associated with line changeovers in Mexico, low production rates at Gunderson facility and impact of severe weather

  Operating margin (2)

8.7%

10.7%

 

  Deliveries

3,400

3,700

Down due to timing of railcar syndications and line changeovers

Wheels, Repair & Parts

  Revenue

$136.5M

$113.4M

Up 20.4% due to increased wheel volume and repair throughput at certain locations

  Gross margin

6.3%

4.8%

Up 150 bps due to improved wheel volume and product mix offset somewhat by the impact of severe weather

  Operating margin (2) (3)

2.6%

(0.3)%

 

Leasing & Services

  Revenue

$17.9M

$17.5M

Up 2.3% due to more interim rent and new maintenance management contracts

  Gross margin

45.0%

46.3%

Down 130 bps due to certain transportation costs

  Operating margin (2) (4)

53.8%

49.6%

 

  Lease fleet utilization

97.6%

97.0%

 

(2) See supplemental segment information on page 12 for additional information.
(3) Includes restructuring charges of $0.5 million in Q2 2014 and $0.9 million in Q1 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 second quarter 2014 results. In conjunction with this news release, Greenbrier has posted a supplemental earnings presentation to our website.  Teleconference details are as follows:

  • April 3, 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 April 19, 2014, at 402-280-9953.

About Greenbrier Companies

Greenbrier (http://www.gbrx.com/), headquartered in Lake Oswego, Oregon, is a leading supplier of transportation equipment and services to the railroad industry.  Greenbrier builds new railroad freight cars in its four manufacturing facilities in the U.S. and Mexico and marine barges at its U.S. facility.  It also repairs and refurbishes freight cars and provides wheels and railcar parts at 36 locations across North America.  Greenbrier builds new railroad freight cars and refurbishes freight cars for the European market through both its operations in Poland and various subcontractor facilities throughout Europe.  Greenbrier owns approximately 8,400 railcars, and performs management services for approximately 233,000 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 is not indicative of our financial results; turmoil in the credit markets and financial services industry; high levels of indebtedness and compliance with the terms of our indebtedness; write-downs of goodwill, intangibles and other assets in future periods; sufficient availability of borrowing capacity; fluctuations in demand for newly manufactured railcars or failure to obtain orders as anticipated in developing forecasts; loss of one or more significant customers; customer payment defaults or related issues; actual future costs and the availability of materials and a trained workforce; failure to design or manufacture new products or technologies or to achieve certification or market acceptance of new products or technologies; steel or specialty component price fluctuations and availability and scrap surcharges; changes in product mix and the mix between segments; labor disputes, energy shortages or operating difficulties that might disrupt manufacturing operations or the flow of cargo; production difficulties and product delivery delays as a result of, among other matters, 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; 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 by various regulatory agencies including potential environmental remediation obligations or changing tank car or other rail car 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)

 
 

February 28,

2014

November 30,

2013

August 31, 

2013

May 31,

2013

February 28,

2013

Assets

         

   Cash and cash equivalents

$        143,929

$          81,226

$       97,435

$       31,606

$       55,637

   Restricted cash

8,964

8,975

8,807

8,906

8,899

   Accounts receivable, net 

148,810

174,745

154,848

162,352

144,933

   Inventories

306,394

328,235

316,783

344,168

359,281

   Leased railcars for syndication

84,657

61,282

68,480

71,091

36,198

   Equipment on operating leases, net

282,328

293,291

305,468

332,924

344,576

   Property, plant and equipment, net

204,804

201,353

201,533

197,779

194,887

   Goodwill

57,416

57,416

57,416

57,416

134,316

   Intangibles and other assets, net

77,173

76,055

78,971

79,364

86,194

 

$    1,314,475

$      1,282,578

$  1,289,741

$  1,285,606

$  1,364,921

           

Liabilities and Equity

         

   Revolving notes

$         26,738

$           38,805

$       48,209

$       92,968

$       50,058

   Accounts payable and accrued liabilities

319,611

293,041

315,938

286,964

278,221

   Deferred income taxes

84,848

86,501

86,040

86,229

99,965

   Deferred revenue

14,272

8,706

8,838

16,203

23,178

   Notes payable

371,427

372,666

373,889

372,942

427,553

           

   Total equity - Greenbrier

456,569

447,599

428,202

404,707

461,136

   Noncontrolling interest

41,010

35,260

28,625

25,593

24,810

   Total equity

497,579

482,859

456,827

430,300

485,946

 

$    1,314,475

$      1,282,578

$  1,289,741

$  1,285,606

$  1,364,921

 

THE GREENBRIER COMPANIES, INC.

Consolidated Statements of Operations

(In thousands, except per share amounts, unaudited)

 
 

Three Months Ended

February 28,

Six Months Ended

February 28,

 

2014

 

2013

 

2014

 

2013

Revenue

             

        Manufacturing

$     347,755

 

$     294,047

 

$    707,228

 

$     579,416

        Wheels, Repair & Parts

136,540

 

111,952

 

249,941

 

224,051

        Leasing & Services

17,921

 

17,167

 

35,402

 

35,073

 

502,216

 

423,166

 

992,571

 

838,540

Cost of revenue

             

        Manufacturing

306,572

 

262,650

 

618,012

 

521,142

        Wheels, Repair & Parts

127,940

 

103,134

 

235,915

 

204,610

        Leasing & Services

9,853

 

9,107

 

19,234

 

16,735

 

444,365

 

374,891

 

873,161

 

742,487

               

Margin

57,851

 

48,275

 

119,410

 

96,053

               

Selling and administrative expense

28,125

 

24,942

 

54,234

 

51,042

Net gain on disposition of equipment

(5,416)

 

(3,076)

 

(9,067)

 

(4,484)

Restructuring charges

540

 

-

 

1,419

 

-

Earnings from operations

34,602

 

26,409

 

72,824

 

49,495

               

Other costs

             

        Interest and foreign exchange

4,099

 

6,322

 

8,843

 

12,222

Earnings before income tax and loss from unconsolidated affiliates

30,503

 

20,087

 

63,981

 

37,273

Income tax expense

(9,883)

 

(5,590)

 

(20,405)

 

(10,176)

Earnings before loss from unconsolidated affiliates

20,620

 

14,497

 

43,576

 

27,097

Loss from unconsolidated affiliates

(67)

 

(105)

 

(26)

 

(145)

Net earnings

20,553

 

14,392

 

43,550

 

26,952

Net earnings attributable to noncontrolling interest

(4,966)

 

(553)

 

(12,575)

 

(2,686)

               

Net earnings attributable to Greenbrier

$     15,587

 

$    13,839

 

$     30,975

 

$     24,266

               

Basic earnings per common share:

$          0.55

 

$        0.51

 

$          1.09

 

$         0.89

               

Diluted earnings per common share:

$           0.50

 

$         0.45

 

$         0.98

 

$         0.80

               

Weighted average common shares:

             

        Basic

28,300

 

27,210

 

28,359

 

27,177

        Diluted

34,345

 

34,044

 

34,404

 

34,018

               

 

THE GREENBRIER COMPANIES, INC.

Consolidated Statements of Cash Flows

(In thousands, unaudited)

 
 

Six Months Ended

February 28

 

2014

 

2013

Cash flows from operating activities:

     

    Net earnings

$                 43,550

 

$                 26,952

    Adjustments to reconcile net earnings to net cash

      provided by operating activities:

     

      Deferred income taxes

(1,448)

 

4,203

      Depreciation and amortization

20,753

 

21,398

      Net gain on disposition of equipment

(9,067)

 

(4,484)

     Accretion of debt discount

-

 

1,725

     Stock based compensation expense

2,862

 

2,887

      Other

2,768

 

(1,612)

      Decrease (increase) in assets:

     

          Accounts receivable

6,900

 

3,079

          Inventories

9,147

 

(27,208)

          Leased railcars for syndication

(13,603)

 

56,960

          Other

68

 

245

      Increase (decrease) in liabilities:

     

          Accounts payable and accrued liabilities

(487)

 

(56,493)

          Deferred revenue

5,377

 

5,936

    Net cash provided by operating activities

66,820

 

33,588

Cash flows from investing activities:

     

    Proceeds from sales of assets

28,671

 

22,301

    Capital expenditures

(16,529)

 

(35,525)

    Increase in restricted cash

(157)

 

(2,622)

   Investment in and net advances to unconsolidated affiliates

(1,253)

 

(386)

   Other

-

 

(3,582)

    Net cash provided by (used in) investing activities

10,732

 

(19,814)

Cash flows from financing activities:

     

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

-

 

(16,579)

   Proceeds from revolving notes with maturities longer than 90 days

31,738

 

19,968

   Repayments of revolving notes with maturities longer than 90 days

(53,209)

 

(14,998)

    Repayments of notes payable

(2,462)

 

(2,251)

    Repurchase of stock

(8,889)

 

-

    Investment by joint venture partner 

419

 

1,949

    Cash distribution to joint venture partner

(1,604)

 

-

   Excess tax benefit from restricted stock awards

110

 

181

    Net cash used in financing activities

(33,897)

 

(11,730)

Effect of exchange rate changes

2,839

 

22

Increase in cash and cash equivalents

46,494

 

2,066

Cash and cash equivalents

     

    Beginning of period

97,435

 

53,571

    End of period

$           143,929

 

$                 55,637

 

THE GREENBRIER COMPANIES, INC.

Supplemental Information

(In thousands, except per share amounts, unaudited)

 

 

Operating Results by Quarter for 2014 are as follows:

 
 

First

 

Second

 

Total

2014

         

Revenue

         

   Manufacturing

$   359,473

 

$   347,755

 

$   707,228

   Wheels, Repair & Parts

113,401

 

136,540

 

249,941

   Leasing & Services

17,481

 

17,921

 

35,402

 

490,355

 

502,216

 

992,571

Cost of revenue

         

   Manufacturing

311,440

 

306,572

 

618,012

   Wheels, Repair & Parts

107,975

 

127,940

 

235,915

   Leasing & Services

9,381

 

9,853

 

19,234

 

428,796

 

444,365

 

873,161

           

Margin

61,559

 

57,851

 

119,410

           

Selling and administrative expense

26,109

 

28,125

 

54,234

Net gain on disposition of equipment

(3,651)

 

(5,416)

 

(9,067)

Restructuring charges

879

 

540

 

1,419

Earnings from operations

38,222

 

34,602

 

72,824

           

Other costs

         

   Interest and foreign exchange

4,744

 

4,099

 

8,843

Earnings before income tax and

   earnings (loss) from unconsolidated affiliates

33,478

 

30,503

 

 

63,981

 

           

Income tax expense

(10,522)

 

(9,883)

 

(20,405)

Earnings before earnings (loss) from 

   unconsolidated affiliates

22,956

 

20,620

 

43,576

Earnings (loss) from unconsolidated affiliates

41

 

(67)

 

(26)

Net earnings

22,997

 

20,553

 

43,550

Net earnings attributable to

   noncontrolling interest

 

(7,609)

 

 

(4,966)

 

 

(12,575)

Net earnings attributable to Greenbrier

$        15,388

 

$     15,587

 

$     30,975

           

Basic earnings per common share

$         0.54

 

$         0.55

 

$         1.09

Diluted earnings per common share (1)

$         0.49

 

$         0.50

 

$         0.98

   

(1)

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

 

THE GREENBRIER COMPANIES, INC.

Supplemental Information

(In thousands, 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 year to date amount as each period is calculated discretely.

   

(2)

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

 

 

THE GREENBRIER COMPANIES, INC.

Supplemental Information

(In thousands, unaudited)

 

 

Segment Information

 

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

                 

Three months ended November 30, 2013

               
 

Revenue

 

Earnings (loss) from operations

 

External

 

Intersegment

 

Total

 

External

 

Intersegment

 

Total

Manufacturing

$         359,473

 

$                      -

 

$         359,473

 

$           38,314

 

$                      -

 

$      38,314

Wheels, Repair & Parts

113,401

 

1,653

 

115,054

 

(374)

 

31

 

(343)

Leasing & Services

17,481

 

2,869

 

20,350

 

8,670

 

2,869

 

11,539

Eliminations

-

 

(4,522)

 

(4,522)

 

-

 

(2,900)

 

(2,900)

Corporate

-

 

-

 

-

 

(8,388)

 

-

 

(8,388)

 

$        490,355

 

$                      -

 

$         490,355

 

$           38,222

 

$                      -

 

$      38,222

 
 
 

Total assets

 

February 28,

 

November 30

 

2014

 

2013

Manufacturing

$        406,620

 

$           461,096

Wheels, Repair & Parts

317,921

 

304,249

Leasing & Services

437,043

 

427,023

Unallocated

152,891

 

90,210

 

$     1,314,475

 

$        1,282,578

       

 

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, 2014

 

November 30, 2013

   

Net earnings

$             20,553

 

$                22,997

   

Interest and foreign exchange

4,099

 

4,744

   

Income tax expense

9,883

 

10,522

   

Depreciation and amortization

9,856

 

10,897

   

Restructuring charges

540

 

879

   
     

,

       

Adjusted EBITDA

$                44,931

 

$                50,039

   
             

(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

February 28, 2014

 

Backlog Activity (units)

       

Beginning backlog

13,500

 

Orders received

5,800

 

Production held as Leased railcars for syndication

(1,400)

 

Production sold directly to third parties

(2,700)

 

Ending backlog

15,200

 
     

Delivery Information (units)

   

Production sold directly to third parties

2,700

 

Sales of Leased railcars for syndication

700

 

Total deliveries

3,400

 

 

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

   

February 28,

2014

 

November 30,

2013

 

Weighted average basic common shares outstanding (1)

28,300

 

28,417

 

Dilutive effect of warrants

-

 

-

 

Dilutive effect of convertible notes (2)

6,045

 

6,045

 

Weighted average diluted common shares outstanding

34,345

 

34,462

         
         

(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 excluded from the share calculations as the stock price for each period presented was less than the initial conversion price of $48.05 and therefore considered anti-dilutive.

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

 
 

February 28,

2014

 

November 30,

2013

 

Net earnings attributable to Greenbrier

$        15,587

 

$         15,388

 

Restructuring charges (after-tax)

365

 

603

 

Net earnings excluding restructuring charges (1)

15,952

 

15,991

 

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

 

$           17,368

 

 

$           17,407

 
         

Weighted average diluted common shares outstanding

34,345

 

34,462

 
         

Diluted earnings per share excluding restructuring charges (2)

$              0.51

 

$              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.

 

 

CONTACT: Mark Rittenbaum, 503-684-7000