Media & Resources Press Releases Greenbrier Reports Third Quarter Results

Greenbrier Reports Third Quarter Results

LAKE OSWEGO, Ore., July 1, 2015 /PRNewswire/ -- The Greenbrier Companies, Inc. (NYSE: GBX) today reported financial results for its third fiscal quarter ended May 31, 2015.

Third Quarter Highlights

  • Net earnings attributable to Greenbrier for the quarter were $42.8 million, or $1.33 per diluted share, on record revenue of $714.6 million.
  • Results for the third quarter include non-recurring costs of approximately $5.2 million after-tax, or $0.16 per diluted share. These costs include professional fees and other transaction costs associated with a potential acquisition, for which discussions terminated in June, and our advocacy of new tank car safety regulations. In addition, a significant decline in scrap metal prices adversely affected our wheel services business by $1.1 million after-tax, or $0.03 per diluted share.
  • Adjusted EBITDA for the quarter was a record $116.3 million, or 16.3% of revenue.
  • New railcar backlog as of May 31, 2015 was 45,100 units with an estimated value of $4.86 billion (average unit sale price of $108,000), compared to 46,000 units with an estimated value of $4.78 billion (average unit sale price of $104,000) as of February 28, 2015.
  • Diversified orders for 5,300 new railcars valued at $640 million were received during the quarter.
  • New railcar deliveries totaled 5,700 units for the quarter, compared to 5,200 units for the quarter ended February 28, 2015.
  • Marine backlog as of May 31, 2015 was approximately $70 million.
  • Board declares a quarterly dividend of $0.15 per share payable on August 5, 2015 to shareholders of record as of July 15, 2015.
  • Repurchased 28,363 shares of common stock at a cost of $1.5 million during the quarter.

Progress on Longer Term Financial Goals

  • Aggregate gross margin expanded to 20.9%, compared to 19.9% in the prior quarter, reaching the goal of at least 20% gross margin by the second half of fiscal 2016.
  • We remain on track to reach the goal of at least 25% ROIC by the second half of fiscal 2016. Annualized ROIC of 21.3% reflects record operating results tempered by working capital needs associated with higher production and syndication volumes, and planned capital expenditure programs.
  • Our Net Funded Debt : LTM EBITDA continued to improve to 0.9 times.

William A. Furman, Chairman and CEO, said, "Our diversified and integrated business model continues to pay off, with record revenue, adjusted EBITDA and deliveries this quarter. Aggregate gross margin grew to 20.9%, led by execution from our manufacturing and lease syndication businesses.  We achieved our goal of at least 20% aggregate margin a full year ahead of plan despite an abrupt decline in scrap metal prices which adversely affected our wheel services business. Results for the quarter include non-recurring costs of about $5.2 million after-tax, or $0.16 per diluted share, associated with a potential acquisition, for which discussions terminated in June, and advocacy of new tank car safety regulations. Our financial outlook for the year, excluding these non-recurring items, remains within previous guidance." 

"Since the beginning of our fiscal year on September 1, 2014, we have received orders for 29,500 new railcar units valued at $3.0 billion, with approximately 80% of these orders being non-energy related.  Our railcar backlog value has grown every quarter since the first quarter of fiscal 2014.   The most recent industry data reported for North America is as of March 31, 2015.  Our book-to-bill ratio in North America for the 12 months ended March 31, 2015 was 2.6x, nearly 50% higher than 1.8x for the industry as a whole.  Our strong commercial performance and diversified product offerings allowed us to capture 43% of all orders placed across the railcar industry in the most recently reported calendar quarter.  With deliveries that stretch into 2018, we have a long runway ahead to deliver robust earnings and free cash flow, driving shareholder value. We will continue our balanced approach of reinvesting free cash flow into projects that generate high rates of return, seeking acquisitions in our core competencies and returning capital to shareholders.  We remain confident in the long-term strength of our strategy and integrated business model."

Share Repurchases

We repurchased 28,363 shares of common stock at a cost of $1.5 million during the quarter. Cumulative repurchases from October 31, 2013 through May 31, 2015 aggregate 1,655,587 shares at a cost of $82.9 million, or an average price of $50.05 per share.  We have $42.1 million available under our share repurchase program.

Business Outlook

Based on current business trends and industry forecasts, and excluding non-recurring costs of $7.5 million pre-tax, or $0.16 per diluted share from the third quarter, Greenbrier reaffirms previously provided fiscal 2015 annual guidance for Revenue ($2.6 to $2.7 billion), Adjusted EBITDA ($420 to $435 million) and Deliveries (~21,500). Guidance for annual diluted EPS is narrowed to $5.70 to $5.85, excluding non-recurring costs in the third quarter of $0.16 per diluted share.

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

 

Q3 FY15

Q2 FY15

Sequential Comparison – Main Drivers

Revenue

$714.6M

$630.1M

Up 13.4% primarily due to increased deliveries

Gross margin

20.9%

19.9%

Up 100 bps due to favorable product mix and pricing and improved production efficiencies in the manufacturing segment

Selling and

administrative expense

$45.6M

$32.9M

Up 38.6% primarily due to fees and transaction costs associated with a potential acquisition, advocacy of new tank car regulations, and other costs as a result of operating at higher levels of activity

Gain on disposition

of equipment

$0.7M

$0.1M

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

Adjusted EBITDA

$116.3M

$102.7M

Up 13.2% driven by higher deliveries and margins

Effective tax rate

30.7%

32.4%

Reflects a change in the geographic mix of earnings and in GIMSA JV earnings as well as an update to the annual effective rate to 31.5%

Net earnings attributable

to noncontrolling interest

$27.5M

$10.7M

Driven by an increase in deliveries and higher margin from our GIMSA JV

Net earnings

$42.8M

$50.4M

 

Diluted EPS

$1.33

$1.57

 

Segment Summary

 

Q3 FY15

Q2 FY15

Sequential Comparison – Main Drivers

Manufacturing

  Revenue

$593.4M

$505.2M

Up 17.5% primarily due to higher deliveries

  Gross margin

21.5%

20.2%

Up 130 bps due to favorable product mix and pricing, and improved efficiencies

  Operating margin (1)

19.5%

18.0%

 

  Deliveries

5,700

5,200

 

Wheels & Parts

  Revenue

$97.4M

$102.6M

Down 5.1% primarily attributable to lower wheel and component volumes

  Gross margin

8.0%

9.6%

Down 160 bps primarily due to an adverse effect of lower scrap metal prices in our wheels business

  Operating margin (1)

5.2%

7.8%

 

Leasing & Services

  Revenue

$23.8M

$22.3M

Up 6.7% primarily due to higher volume of rent-producing leased railcars for syndication

  Gross margin

58.0%

60.3%

Down 230 bps due to certain maintenance and transportation costs

  Operating margin (1) (2)

45.4%

44.1%

 

  Lease fleet utilization

97.6%

99.5%

 

(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 third quarter 2015 results. In conjunction with this news release, Greenbrier has posted a supplemental earnings presentation to our website.  Teleconference details are as follows:

  • July 1, 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

Greenbrier, (www.gbrx.com), headquartered in Lake Oswego, Oregon, is a leading supplier of transportation equipment and services to the railroad industry. Greenbrier builds new railroad freight cars in 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 33 locations across North America, including 12 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 8,800 railcars, and performs management services for approximately 245,000 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; sovereign risk to contracts, exchange rates or property rights; 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)

           
 

May 31,

 2015

 February 28,
2015

November 30,

 2014

August 31,

2014

May 31,

2014

Assets

         

   Cash and cash equivalents

$    122,783

$    145,512

$    118,958

$    184,916

$       198,492

   Restricted cash

8,912

8,722

9,170

20,140

9,468

   Accounts receivable, net 

214,890

207,488

191,532

199,679

181,850

   Inventories

426,655

418,590

372,039

305,656

337,197

   Leased railcars for syndication

213,197

198,010

177,221

125,850

96,332

   Equipment on operating leases, net

257,962

261,234

264,615

258,848

274,863

   Property, plant and equipment, net

285,570

271,977

258,303

243,698

215,942

   Investment in unconsolidated affiliates

91,217

71,225

72,342

69,359

12,129

   Goodwill

43,265

43,265

43,265

43,265

57,416

   Intangibles and other assets, net

62,664

64,386

61,937

65,757

66,883

 

$ 1,727,115

$ 1,690,409

$ 1,569,382

$ 1,517,168

$    1,450,572

           

Liabilities and Equity

         

   Revolving notes

$      92,507

$      90,563

$      46,527

$      13,081

$         18,082

   Accounts payable and accrued liabilities

405,544

417,844

374,509

383,289

356,541

   Deferred income taxes

75,572

77,632

81,808

81,383

79,526

   Deferred revenue

24,209

28,287

27,067

20,603

21,153

   Notes payable

346,279

441,326

443,303

445,091

447,068

           

   Total equity - Greenbrier

672,396

541,491

519,884

511,390

476,145

   Noncontrolling interest

110,608

93,266

76,284

62,331

52,057

   Total equity

783,004

634,757

596,168

573,721

528,202

 

$ 1,727,115

$  1,690,409

$ 1,569,382

$ 1,517,168

$    1,450,572

 

 

THE GREENBRIER COMPANIES, INC.

 

Consolidated Statements of Income
(In thousands, except per share amounts, unaudited)

     
 

Three Months Ended

May 31,

Nine Months Ended

May 31,

 

2015

 

2014

 

2015

 

2014

 

Revenue

               

        Manufacturing

$             593,376

 

$        425,583

 

$   1,478,566

 

$   1,132,811

 

        Wheels & Parts

97,407

 

140,663

 

286,671

 

390,604

 

        Leasing & Services

23,823

 

27,039

 

74,576

 

62,441

 
 

714,606

 

593,285

 

1,839,813

 

1,585,856

 

Cost of revenue

               

        Manufacturing

465,658

 

351,829

 

1,184,922

 

969,841

 

        Wheels & Parts

89,645

 

129,825

 

259,285

 

365,740

 

        Leasing & Services

10,017

 

14,856

 

32,942

 

34,090

 
 

565,320

 

496,510

 

1,477,149

 

1,369,671

 
                 

Margin

149,286

 

96,775

 

362,664

 

216,185

 
                 

Selling and administrative expense

45,595

 

34,800

 

112,223

 

89,034

 

Net gain on disposition of equipment

(720)

 

(5,619)

 

(924)

 

(14,686)

 

Restructuring charges

-

 

56

 

-

 

1,475

 

Earnings from operations

104,411

 

67,538

 

251,365

 

140,362

 
                 

Other costs

               

        Interest and foreign exchange

4,285

 

5,437

 

9,355

 

14,280

 

Earnings before income tax and earnings from

    unconsolidated affiliates

 

100,126

 

62,101

 

242,010

 

 

126,082

 

Income tax expense

(30,783)

 

(16,303)

 

(76,209)

 

(36,708)

 

Earnings before earnings from  unconsolidated

    affiliates

69,343

 

45,798

 

165,801

 

89,374

 

Earnings from unconsolidated affiliates

982

 

298

 

1,552

 

272

 

Net earnings

70,325

 

46,096

 

167,353

 

89,646

 

Net earnings attributable to noncontrolling interest

(27,514)

 

(12,508)

 

(41,405)

 

(25,083)

 
                 

Net earnings attributable to Greenbrier

$            42,811

 

$          33,588

 

$      125,948

 

$        64,563

 
                 

Basic earnings per common share:

$                1.54

 

$              1.20

 

$            4.58

 

$            2.29

 
                 

Diluted earnings per common share:

$                1.33

 

$              1.03

 

$            3.91

 

$            2.01

 
                 

Weighted average common shares:

               

        Basic

27,842

 

27,956

 

27,514

 

28,223

 

        Diluted

33,000

 

34,001

 

33,262

 

34,268

 
                 

Dividends declared per common share:

$                 0.15

 

$                    -

 

$             0.45

 

$                  -

 

                                    

THE GREENBRIER COMPANIES, INC.

 

Consolidated Statements of Cash Flows
(In thousands, unaudited)

     
   

Nine Months Ended

May 31,

   

2015

 

2014

 

Cash flows from operating activities:

         

    Net earnings

 

$             167,353

 

$             89,646

 

    Adjustments to reconcile net earnings to net cash provided by operating activities:

         

      Deferred income taxes

 

(5,245)

 

(6,745)

 

      Depreciation and amortization

 

33,258

 

30,824

 

      Net gain on disposition of equipment

 

(924)

 

(14,686)

 

     Stock based compensation expense

 

13,176

 

6,454

 

     Noncontrolling interest adjustments

 

20,371

 

2,953

 

      Other

 

1,008

 

388

 

      Increase in assets:

         

          Accounts receivable, net

 

(8,769)

 

(26,226)

 

          Inventories

 

(124,906)

 

(21,722)

 

          Leased railcars for syndication

 

(90,914)

 

(25,420)

 

          Other

 

(1,666)

 

(2,491)

 

      Increase in liabilities:

         

          Accounts payable and accrued liabilities

 

23,135

 

36,507

 

          Deferred revenue

 

3,680

 

12,258

 

    Net cash provided by operating activities

 

29,557

 

81,740

 

Cash flows from investing activities:

         

    Proceeds from sales of assets

 

4,628

 

39,515

 

    Capital expenditures

 

(75,892)

 

(34,522)

 

    Decrease (increase) in restricted cash

 

228

 

(661)

 

    Investment in and advances to unconsolidated affiliates

 

(29,923)

 

(1,253)

 

    Other

 

715

 

-

 

    Net cash provided by (used in) investing activities

 

(100,244)

 

3,079

 

Cash flows from financing activities:

         

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

 

73,000

 

-

 

   Proceeds from revolving notes with maturities longer than 90 days

 

42,563

 

34,674

 

   Repayments of revolving notes with maturities longer than 90 days

 

(36,137)

 

(64,801)

 

   Proceeds from issuance of notes payable

 

-

 

200,000

 

    Repayments of notes payable

 

(5,504)

 

(126,821)

 

   Debt issuance costs

 

-

 

(382)

 

   Repurchase of stock

 

(48,451)

 

(26,293)

 

   Dividends

 

(12,069)

 

-

 

   Decrease in restricted cash

 

11,000

 

-

 

    Cash distribution to joint venture partner

 

(12,489)

 

(3,109)

 

    Investment by joint venture partner

 

-

 

419

 

   Excess tax benefit from restricted stock awards

 

2,964

 

109

 

    Other

 

(248)

 

-

 

   Net cash provided by financing activities

 

14,629

 

13,796

 

Effect of exchange rate changes

 

(6,075)

 

2,442

 

Increase (decrease) in cash and cash equivalents

 

(62,133)

 

101,057

 

Cash and cash equivalents

         

    Beginning of period

 

184,916

 

97,435

 

    End of period

 

$             122,783

 

$           198,492

 

 

 

THE GREENBRIER COMPANIES, INC.

 

Supplemental Information
(In thousands, except per share amounts, unaudited)


Operating Results by Quarter for 2015 are as follows:

                 
 

First

 

Second

 

Third

 

Total

 
                 

Revenue

               

   Manufacturing

$     379,949

 

$      505,241

 

$      593,376

 

$   1,478,566

 

   Wheels & Parts

86,624

 

102,640

 

97,407

 

286,671

 

   Leasing & Services

28,485

 

22,268

 

23,823

 

74,576

 
 

495,058

 

630,149

 

714,606

 

1,839,813

 

Cost of revenue

               

   Manufacturing

316,037

 

403,227

 

465,658

 

1,184,922

 

   Wheels & Parts

76,872

 

92,768

 

89,645

 

259,285

 

   Leasing & Services

14,081

 

8,844

 

10,017

 

32,942

 
 

406,990

 

504,839

 

565,320

 

1,477,149

 
                 

Margin

88,068

 

125,310

 

149,286

 

362,664

 
                 

Selling and administrative expense

33,729

 

32,899

 

45,595

 

112,223

 

Net gain on disposition of equipment

(83)

 

(121)

 

(720)

 

(924)

 

Earnings from operations

54,422

 

92,532

 

104,411

 

251,365

 
                 

Other costs

               

   Interest and foreign exchange

3,141

 

1,929

 

4,285

 

9,355

 

Earnings before income tax and earnings

  (loss) from unconsolidated affiliates          

 

51,281

 

 

90,603

 

 

100,126

 

 

242,010

 

Income tax expense

(16,054)

 

(29,372)

 

(30,783)

 

(76,209)

 

Earnings before earnings (loss) from 

   unconsolidated affiliates

 

35,227

 

 

61,231

 

 

69,343

 

 

165,801

 

Earnings (loss) from unconsolidated affiliates

755

 

(185)

 

982

 

1,552

 

Net earnings

35,982

 

61,046

 

70,325

 

167,353

 

Net earnings attributable to

   noncontrolling interest

 

(3,196)

 

 

(10,695)

 

 

(27,514)

 

 

(41,405)

 

Net earnings attributable to Greenbrier

$        32,786

 

$         50,351

 

$         42,811

 

$      125,948

 
                 

Basic earnings per common share (1)

$             1.19

 

$            1.86

 

$            1.54

 

$            4.58

 

Diluted earnings per common share (1)

$             1.01

 

$            1.57

 

$            1.33

 

$            3.91

 
   

(1)

Quarterly amounts do not total to the year to date amount as each period is calculated discretely. Diluted earnings per common share includes the 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 May 31, 2015:

                 
 

Revenue

 

Earnings (loss) from operations

 
 

External

 

Intersegment

 

Total

 

External

 

Intersegment

 

Total

 

Manufacturing

$          593,376

 

$                    33

 

$         593,409

 

$         115,675

 

$                      -

 

$    115,675

 

Wheels & Parts

97,407

 

7,605

 

105,012

 

5,078

 

607

 

5,685

 

Leasing & Services

23,823

 

11,722

 

35,545

 

10,824

 

11,722

 

22,546

 

Eliminations

-

 

(19,360)

 

(19,360)

 

-

 

(12,329)

 

(12,329)

 

Corporate

-

 

-

 

-

 

(27,166)

 

-

 

(27,166)

 
 

$          714,606

 

$                      -

 

$         714,606

 

$         104,411

 

$                      -

 

$    104,411

 
                   

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

 

 

 

Total assets

 
 

May 31,

 

February 28

 
 

2015

 

2015

 

Manufacturing

$          697,342

 

$           663,567

 

Wheels & Parts

290,363

 

291,358

 

Leasing & Services

538,896

 

516,835

 

Unallocated

200,514

 

218,649

 
 

$       1,727,115

 

$        1,690,409

 

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

 
   

May 31,

2015

 

February 28,

2015

 
 

Revenue

$                 88,800

 

$                      83,300

 
 

Earnings (loss) from operations

$                      200

 

$                       (2,000)

 
 

Total assets

$               230,100

 

$                    217,400

 
           
           

 

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,

 2015

 

February 28,
2015

   

Net earnings

$             70,325

 

$             61,046

   

Interest and foreign exchange

4,285

 

1,929

   

Income tax expense

30,783

 

29,372

   

Depreciation and amortization

10,860

 

10,348

   
               

Adjusted EBITDA

$            116,253

 

$           102,695

   
             

 

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

May 31, 2015

 

Backlog Activity (units)

       

Beginning backlog

46,000

 

Orders received

5,300

 

Production held as Leased railcars for syndication

(1,500)

 

Production sold directly to third parties

(4,700)

 

Ending backlog

45,100

 
     

Delivery Information (units)

   

Production sold directly to third parties

4,700

 

Sales of Leased railcars for syndication

1,000

 

Total deliveries

5,700

 

 

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

   

May 31,

2015

February 28,

2015

 

Weighted average basic common shares outstanding (1)

27,842

27,028

 

Dilutive effect of convertible notes (2)

5,158

6,045

 

Weighted average diluted common shares outstanding

33,000

33,073

       
       
   

(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 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

 

May 31,

2015

February 28,

2015

Net earnings attributable to Greenbrier

$           42,811

$           50,351

Add back:

   

Interest and debt issuance costs on the 2018 Convertible 

     notes, net of tax

 

1,234

 

1,416

Earnings before interest and debt issuance costs on

     convertible notes

 

$            44,045

 

$          51,767

Weighted average diluted common shares outstanding

 

33,000

 

33,073

     

Diluted earnings per share

$               1.33

$               1.57

 

SOURCE The Greenbrier Companies, Inc. (GBX)