)

Greenbrier Reports First Quarter Results

Date

Wed, Jan 8, 2020 06:00 AM

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~ Announces orders of 4,500 railcars valued at $450 million ~
~ Strong post-quarter orders for 4,400 units were driven by international sources ~
~ Board increases dividend 8% ~
~ Affirms $15 million synergy target ~

LAKE OSWEGO, Ore., Jan. 8, 2020 /PRNewswire/ -- The Greenbrier Companies, Inc. (NYSE: GBX) today reported financial results for its first fiscal quarter ended November 30, 2019.

First Quarter Highlights

  • Net earnings attributable to Greenbrier for the quarter were $7.7 million, or $0.23 per diluted share, on revenue of $769.4 million. Quarterly results include $2.2 million, net of tax, ($0.07 per share) of integration and acquisition-related expenses from the American Railcar Industries (ARI) acquisition.
  • Adjusted net earnings attributable to Greenbrier for the quarter were $9.9 million, or $0.30 per diluted share, excluding $0.07 of ARI integration and acquisition-related expenses.
  • Adjusted EBITDA for the quarter was $74.2 million, or 9.6% of revenue.
  • Pre-tax ARI synergies of $2.8 million were achieved in the quarter. Annual synergy target of $15.0 million is affirmed.
  • Orders for 4,500 diversified railcars were received during the quarter, valued at $450 million.
  • Orders subsequent to Q1 exceed 4,400 units driven by international sources, including a significant multi-year order in Brazil for new railcars. Additionally, an agreement to rebuild nearly 850 Brazilian railcars was finalized.
  • New railcar backlog as of November 30, 2019 was 28,500 units with an estimated value of $3.1 billion. Subsequent to the quarter, Greenbrier agreed in principle to remove 575 units in backlog in exchange for financial consideration.
  • New railcar deliveries totaled 6,200 units for the quarter.
  • Board increases quarterly dividend 8.0% to $0.27 per share, payable on February 18, 2020 to shareholders as of January 28, 2020.

William A. Furman, Chairman and CEO, said, "Greenbrier's strategy of strengthening its core North American market, international diversification, talent development and growing the business at scale is working. Employees performed well as we continued the integration of our largest-ever acquisition in North America. The synergies Greenbrier sought in acquiring the ARI manufacturing assets yielded $2.8 million in the first quarter, a good start toward achieving the fiscal 2020 synergy target of $15 million. Despite a weak North American freight railcar market, Greenbrier secured worldwide orders in the first quarter of 4,500 units valued at $450 million. Subsequent to quarter-end, Greenbrier received orders for nearly 4,400 railcars including a large multi-year order for our Greenbrier-Maxion JV in Brazil. Europe also recorded strong post-quarter orders. Included in post-quarter orders was a large award in North America from a customer in Saudi Arabia.  These orders underline the traction Greenbrier is gaining internationally and the power of a developing globally integrated model. The December orders, along with Greenbrier's backlog of 28,500 units at November 30, worth more than $3 billion, provide good global visibility. Given overall progress through the first three months, we are on track to achieve our guidance for the year, although quarterly performance will not be linear." 

Furman added, "Greenbrier's uneven performance in the first quarter of fiscal 2020 fell short of our expectations. Operating inefficiencies and component supply issues triggered lost production days and reduced production at one of our newly-acquired ARI facilities. Therefore, a higher proportion of quarterly railcar deliveries originated from our 50/50 joint venture at GIMSA in Mexico, which impacted net earnings. The operating inefficiencies and supplier issues are being addressed."

Furman concluded, "Looking ahead, fiscal 2020 remains a year of execution and responsiveness to a rapidly changing demand environment. The ARI integration is complex, but progressing favorably. Likewise, we are continuing remedial actions at Greenbrier Rail Services including Repair, and expect these operations to improve through the year. Our focus remains on managing recent acquisitions, generating positive cash flow, and creating long-term shareholder value through efficient capital allocation."

Fiscal 2020 Outlook

Based on current business trends and production schedules for fiscal 2020, Greenbrier believes:

  • Deliveries will be 26,000 – 28,000 units including Greenbrier-Maxion (Brazil) (which will account for approximately 2,000 units).
  • Revenue will be approximately $3.5 billion.
  • Adjusted diluted EPS will be $2.60 – $3.00 excluding approximately $20$25 million of pre-tax integration and acquisition-related expenses from the ARI acquisition.

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

 

Q1 FY20

Q4 FY19

Sequential Comparison – Main Drivers

Revenue

$769.4M

$914.2M

Lower deliveries than record Q4 activity

Gross margin

12.0%

14.6%

Inefficiencies due to production delays and minimal syndication activity

Selling and

administrative expense

$54.4M

$60.6M

Q1 reflects full quarter of acquired operations while Q4 included $11.0 million of acquisition expense

Interest and foreign exchange

$12.9M

$7.5M

Increased debt levels associated with July 2019 acquisition

Adjusted EBITDA

$74.2M

$109.4M

Primarily lower operating margin

Effective tax rate

20.7%

25.0%

Impact of discrete items and GIMSA JV earnings

Earnings (Loss) from

unconsolidated affiliates

$1.1M

($0.9M)

Strong performance at JV acquired as part of ARI and improved performance in Brazil

Net earnings attributable

to noncontrolling interest

$16.3M

$15.7M

Continued strong performance at GIMSA JV

Adjusted net earnings attributable to Greenbrier

$9.9M(1)

$43.3M(2)

Lower revenue, deliveries and operating margin versus strong Q4

Adjusted diluted EPS

$0.30(1)

$1.31(2)

 
   

(1) 

Excludes expense of $2.2 million ($0.07 per share), net of tax, associated with ARI integration and acquisition-related expenses.

(2)  

Excludes expense of $8.2 million ($0.25 per share), net of tax, associated with ARI acquisition expenses.

Segment Summary

 

Q1 FY20

Q4 FY19

Sequential Comparison – Main Drivers

Manufacturing

  Revenue

$657.4M

$802.1M

Fewer deliveries than record Q4, reflecting production delays and minimal syndication activity

  Gross margin

11.5%

14.5%

Inefficiencies due to production delays and minimal syndication activity

  Operating margin (1)

8.1%

11.8%

 

  Deliveries (2)

5,900

7,300

Fewer deliveries than record Q4

Wheels, Repair & Parts

  Revenue

$86.6M

$85.7M

Improved mix partially offset by lower volume of wheels

  Gross margin

5.4%

4.7%

Benefit of efficiency improvements and cost containment in Repair

  Operating margin (1)

1.3%

(0.2%)

 

Leasing & Services

  Revenue

$25.4M

$26.4M

 

  Gross margin

47.3%

50.7%

Lower interim rent on certain railcars

  Operating margin (1) (3)

38.5%

41.2%

 
   

(1) 

See supplemental segment information on page 9 for additional information.

(2) 

Excludes Brazil deliveries which are not consolidated into manufacturing revenue and margins.

(3) 

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

Conference Call

Greenbrier will host a teleconference to discuss its first quarter 2020 results. In conjunction with this news release, Greenbrier has posted a supplemental earnings presentation to our website. 
Teleconference details are as follows:

  • January 8, 2020
  • 8:00 a.m. Pacific Standard 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, headquartered in Lake Oswego, Oregon, is a leading international supplier of equipment and services to global freight transportation markets. Greenbrier designs, builds and markets freight railcars and marine barges in North America. Greenbrier Europe is an end-to-end freight railcar manufacturing, engineering and repair business with operations in Poland, Romania and Turkey that serves customers across Europe and in the nations of the Gulf Cooperation Council. Greenbrier builds freight railcars and rail castings in Brazil through two separate strategic partnerships. We are a leading provider of freight railcar wheel services, parts, repair, refurbishment and retrofitting services in North America through our wheels, repair & parts business unit.  Greenbrier offers railcar management, regulatory compliance services and leasing services to railroads and related transportation industries in North America. Through unconsolidated joint ventures, we produce industrial and rail castings, tank heads and other components. Greenbrier owns a lease fleet of 9,300 railcars and performs management services for 385,000 railcars. Learn more about Greenbrier at www.gbrx.com.

Adjusted Financial Metric Definition

Adjusted EBITDA, Adjusted net earnings attributable to Greenbrier, Adjusted diluted EPS and Adjusted diluted EPS range excluding integration and acquisition-related expenses from the ARI acquisition are not financial measures under generally accepted accounting principles (GAAP). These metrics are performance measurement tools used by rail supply companies and Greenbrier. You should not consider these metrics in isolation or as a substitute for other financial statement data determined in accordance with GAAP. In addition, because these metrics are not a measure of financial performance under GAAP and are susceptible to varying calculations, the measures presented may differ from and may not be comparable to similarly titled measures used by other companies.

We define Adjusted EBITDA as Net earnings before Interest and foreign exchange, Income tax expense (benefit), Depreciation and amortization and excluding the impact associated with items we do not believe are indicative of our core business or which affect comparability. We believe the presentation of Adjusted EBITDA provides useful information as it excludes the impact of financing, foreign exchange, income taxes and the accounting effects of capital spending. These items may vary for different companies for reasons unrelated to the overall operating performance of a company's core business. We believe this assists in comparing our performance across reporting periods.

Adjusted net earnings attributable to Greenbrier and Adjusted diluted EPS excludes the impact associated with items we do not believe are indicative of our core business or which affect comparability. Adjusted diluted EPS range excluding integration and acquisition-related expenses from the ARI acquisition excludes integration and acquisition-related expenses from the ARI acquisition. We believe this assists in comparing our performance across reporting periods.

THE GREENBRIER COMPANIES, INC.

Consolidated Balance Sheets

(In thousands, unaudited)

 
 

November 30,

2019

August 31,

2019

May 31,

2019

February 28,

2019

November 30,

2018

Assets

         

   Cash and cash equivalents

$       253,602

$       329,684

$      359,625

$      341,500

$      462,797

   Restricted cash

8,648

8,803

21,471

21,584

8,872

   Accounts receivable, net 

313,786

373,383

330,385

335,732

306,917

   Inventories

733,806

664,693

592,099

574,146

492,573

   Leased railcars for syndication

135,319

182,269

130,489

163,472

233,415

   Equipment on operating leases, net

396,187

366,688

376,241

381,336

317,282

   Property, plant and equipment, net

730,730

717,973

478,502

472,739

461,120

   Investment in unconsolidated affiliates

85,141

91,818

53,036

58,685

58,682

   Intangibles and other assets, net

162,089

125,379

97,022

101,284

95,958

   Goodwill

129,468

129,947

74,318

82,743

77,508

 

$   2,948,776

$   2,990,637

$   2,513,188

$   2,533,221

$  2,515,124

           

Liabilities and Equity

         

   Revolving notes

$         29,502

$         27,115

$         25,952

$         22,323

$        22,189

   Accounts payable and accrued liabilities

527,789

568,360

473,106

474,863

438,304

   Deferred income taxes

9,417

13,946

12,089

29,481

30,631

   Deferred revenue

59,657

85,070

76,170

91,533

108,566

   Notes payable, net

817,830

822,885

483,918

486,107

487,764

           

Contingently redeemable noncontrolling interest

31,723

31,564

24,722

25,637

28,449

           

   Total equity - Greenbrier

1,281,808

1,276,730

1,262,315

1,257,818

1,257,631

   Noncontrolling interest

191,050

164,967

154,916

145,459

141,590

   Total equity

1,472,858

1,441,697

1,417,231

1,403,277

1,399,221

 

$   2,948,776

$   2,990,637

$   2,513,188

$   2,533,221

$  2,515,124

 

THE GREENBRIER COMPANIES, INC.

Consolidated Statements of Income

(In thousands, except per share amounts, unaudited)

 
 

Three Months Ended

November 30,

 

2019

 

2018

 

Revenue

       

        Manufacturing

$        657,367

 

$       471,789

 

        Wheels, Repair & Parts

86,608

 

108,543

 

        Leasing & Services

25,384

 

24,191

 
 

769,359

 

604,523

 

Cost of revenue

       

        Manufacturing

581,912

 

417,805

 

        Wheels, Repair & Parts

81,892

 

100,978

 

        Leasing & Services

13,366

 

13,207

 
 

677,170

 

531,990

 
         

Margin

92,189

 

72,533

 
         

Selling and administrative expense

54,364

 

50,432

 

Net gain on disposition of equipment

(3,959)

 

(14,353)

 

Earnings from operations

41,784

 

36,454

 
         

Other costs

       

Interest and foreign exchange

12,852

 

4,404

 

Earnings before income taxes and earnings from

    unconsolidated affiliates

28,932

 

32,050

 

Income tax expense

(5,994)

 

(9,135)

 

Earnings before earnings from unconsolidated affiliates

22,938

 

22,915

 

Earnings from unconsolidated affiliates

1,073

 

467

 

Net earnings

24,011

 

23,382

 

Net earnings attributable to noncontrolling interest

(16,342)

 

(5,426)

 

Net earnings attributable to Greenbrier

$             7,669

 

$         17,956

 
         

Basic earnings per common share:

$              0.24

 

$             0.55

 
         

Diluted earnings per common share:

$              0.23

 

$             0.54

 
         

Weighted average common shares:

       

Basic

32,629

 

32,640

 

Diluted

33,284

 

33,093

 
         

Dividends declared per common share

$              0.25

 

$              0.25

 

 

THE GREENBRIER COMPANIES, INC.

Consolidated Statements of Cash Flows

(In thousands, unaudited) 

 
   

 Three Months Ended

November 30,

2019

 

2018

 

Cash flows from operating activities

           

    Net earnings

 

$

24,011

$

23,382

 

    Adjustments to reconcile net earnings to net cash used in

     operating activities:

           

      Deferred income taxes

   

(6,515)

 

(2,360)

 

      Depreciation and amortization

   

29,335

 

20,700

 

      Net gain on disposition of equipment

   

(3,959)

 

(14,353)

 

      Accretion of debt discount

   

1,350

 

1,076

 

      Stock based compensation expense

   

3,157

 

3,194

 

     Noncontrolling interest adjustments

   

1,736

 

3,920

 

      Other

   

(391)

 

286

 

      Decrease (increase) in assets:

           

          Accounts receivable, net

   

58,488

 

54,834

 

          Inventories

   

(69,662)

 

(63,045)

 

          Leased railcars for syndication

   

(13,132)

 

(116,726)

 

          Other

   

(37,304)

 

(392)

 

      Increase (decrease) in liabilities:

           

          Accounts payable and accrued liabilities

   

(47,421)

 

(10,949)

 

          Deferred revenue

   

(10,012)

 

3,314

 

    Net cash used in operating activities

   

(70,319)

 

(97,119)

 

Cash flows from investing activities

           

    Proceeds from sales of assets

   

27,463

 

34,497

 

    Capital expenditures

   

(23,216)

 

(28,677)

 

   Investment in and advances to unconsolidated affiliates

   

(1,500)

 

(11,393)

 

   Cash distribution from unconsolidated affiliates and other

   

4,452

 

1,784

 

    Net cash provided by (used in) investing activities

   

7,199

 

(3,789)

 

Cash flows from financing activities

           

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

   

2,399

 

(4,840)

 

    Proceeds from issuance of notes payable

   

-

 

225,000

 

    Repayments of notes payable

   

(9,749)

 

(173,453)

 

    Debt issuance costs

   

(4)

 

(2,766)

 

    Dividends

   

(343)

 

(467)

 

    Cash distribution to joint venture partner

   

(4,531)

 

(3,185)

 

    Tax payments for net share settlement of restricted stock

   

(1,870)

 

(4,747)

 

    Net cash provided by (used in) financing activities

   

(14,098)

 

35,542

 

Effect of exchange rate changes

   

981

 

(2,439)

 

Decrease in cash, cash equivalents and restricted cash

   

(76,237)

 

(67,805)

 

Cash and cash equivalents and restricted cash

           

    Beginning of period

   

338,487

 

539,474

 

    End of period

 

$

262,250

$

471,669

 

Balance Sheet Reconciliation

           

    Cash and cash equivalents

 

$

253,602

$

462,797

 

    Restricted cash

   

8,648

 

8,872

 

    Total cash and cash equivalents and restricted cash as presented above

 

$

262,250

$

471,669

 

 

THE GREENBRIER COMPANIES, INC.

Supplemental Information

 (In thousands, except per share amounts, unaudited)

 

Operating Results by Quarter for 2019 are as follows:

 

First

 

Second

 

Third

 

Fourth

 

Total

 
                     

Revenue

                   

   Manufacturing

$    471,789

 

$    476,019

 

$    681,588

 

$    802,103

 

$ 2,431,499

 

   Wheels, Repair & Parts

108,543

 

125,278

 

124,980

 

85,701

 

444,502

 

   Leasing & Services

24,191

 

57,374

 

49,584

 

26,441

 

157,590

 
 

604,523

 

658,671

 

856,152

 

914,245

 

3,033,591

 

Cost of revenue

                   

   Manufacturing

417,805

 

442,996

 

590,788

 

686,036

 

2,137,625

 

   Wheels, Repair & Parts

100,978

 

118,455

 

119,821

 

81,636

 

420,890

 

   Leasing & Services

13,207

 

43,376

 

38,971

 

13,036

 

108,590

 
 

531,990

 

604,827

 

749,580

 

780,708

 

2,667,105

 
                     

Margin

72,533

 

53,844

 

106,572

 

133,537

 

366,486

 
                     

Selling and administrative expense

50,432

 

47,892

 

54,377

 

60,607

 

213,308

 

Net gain on disposition of equipment

(14,353)

 

(12,102)

 

(11,019)

 

(3,489)

 

(40,963)

 

Goodwill impairment

-

 

-

 

10,025

 

-

 

10,025

 

Earnings from operations

36,454

 

18,054

 

53,189

 

76,419

 

184,116

 
                     

Other costs

                   

Interest and foreign exchange

4,404

 

9,237

 

9,770

 

7,501

 

30,912

 

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

32,050

 

8,817

 

43,419

 

68,918

 

153,204

 

Income tax expense

(9,135)

 

(2,248)

 

(13,008)

 

(17,197)

 

(41,588)

 

Earnings before earnings (loss) from unconsolidated affiliates

22,915

 

6,569

 

30,411

 

51,721

 

111,616

 

Earnings (loss) from unconsolidated affiliates

467

 

(786)

 

(4,564)

 

(922)

 

(5,805)

 

Net earnings

23,382

 

5,783

 

25,847

 

50,799

 

105,811

 

Net earnings attributable to  

   noncontrolling interest

(5,426)

 

(3,018)

 

(10,599)

 

(15,692)

 

(34,735)

 

Net earnings attributable to Greenbrier

$       17,956

 

$         2,765

 

$      15,248

 

$      35,107

 

$      71,076

 
                     

Basic earnings per common share (1)

$           0.55

 

$           0.08

 

$           0.47

 

$           1.08

 

$           2.18

 

Diluted earnings per common share (1)

$           0.54

 

$           0.08

 

$           0.46

 

$           1.06

 

$           2.14

 
   

(1)

Quarterly amounts do not total to the year to date amount as each period is calculated discretely. Diluted EPS is calculated by including the dilutive effect, using the treasury stock method, associated with shares underlying the 2.875% Convertible notes, 2.25% Convertible notes, restricted stock units that are not considered participating securities and performance based restricted stock units subject to performance criteria, for which actual levels of performance above target have been achieved.

 

THE GREENBRIER COMPANIES, INC.

 

Supplemental Information

 

 (In thousands, unaudited)

 
   

Segment Information

 
   

Three months ended November 30, 2019:

                 
 

Revenue

 

Earnings (loss) from operations

 
 

External

 

Intersegment

 

  Total

 

External

 

Intersegment

 

Total

 

Manufacturing

$           657,367

 

$                    97

 

$         657,464

 

$           53,143

 

$                  (23)

 

$       53,120

 

Wheels, Repair & Parts

86,608

 

5,851

 

92,459

 

1,114

 

(342)

 

772

 

Leasing & Services

25,384

 

1,749

 

27,133

 

9,777

 

1,289

 

11,066

 

Eliminations

-

 

(7,697)

 

(7,697)

 

-

 

(924)

 

(924)

 

Corporate

-

 

-

 

-

 

(22,250)

 

-

 

(22,250)

 
 

$           769,359

 

$                      -

 

$         769,359

 

$           41,784

 

$                      -

 

$      41,784

 
                   

Three months ended August 31, 2019:

                 
 

Revenue

 

Earnings (loss) from operations

 
 

External

 

Intersegment

 

  Total

 

External

 

Intersegment

 

Total

 

Manufacturing

$           802,103

 

$             14,829

 

$         816,932

 

$           94,628

 

$               1,579

 

$       96,207

 

Wheels, Repair & Parts

85,701

 

11,826

 

97,527

 

(191)

 

640

 

449

 

Leasing & Services

26,441

 

13,482

 

39,923

 

10,883

 

13,061

 

23,944

 

Eliminations

-

 

(40,137)

 

(40,137)

 

-

 

(15,280)

 

(15,280)

 

Corporate

-

 

-

 

-

 

(28,901)

 

-

 

(28,901)

 
 

$           914,245

 

$                      -

 

$         914,245

 

$           76,419

 

$                      -

 

$      76,419

 

 

     

Total assets

 
     

   November 30,

2019

 

August 31,

2019

 

Manufacturing

$            1,568,338

 

$          1,606,571

 

Wheels, Repair & Parts

317,786

 

306,725

 

Leasing & Services

776,724

 

708,799

 

Unallocated

285,928

 

368,542

 
 

$            2,948,776

 

$          2,990,637

 

 

THE GREENBRIER COMPANIES, INC.

Supplemental Information

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

 

Reconciliation of Net earnings to Adjusted EBITDA

 
     

Three Months Ended

   
     

November 30,

2019

 

August 31,

2019

   

Net earnings

$               24,011

 

$           50,799

   

Interest and foreign exchange

12,852

 

7,501

   

Income tax expense

5,994

 

17,197

   

Depreciation and amortization

29,335

 

22,898

   

ARI integration & acquisition-related costs

1,991

 

10,971

   

Adjusted EBITDA

$             74,183

 

$         109,366

   
             

 

     

Three Months

Ended

   

November 30,

2019

Backlog Activity (units) (1)

         

Beginning backlog

30,300

   

Orders received

4,500

   

Production held as Leased railcars for syndication

(300)

   

Production sold directly to third parties

(6,000)

   

Ending backlog

28,500

   
       

Delivery Information (units) (1)

     

Production sold directly to third parties

6,000

   

Sales of Leased railcars for syndication

200

   

Total deliveries

6,200

   
   

(1)

Includes Greenbrier-Maxion, our Brazilian railcar manufacturer, which is accounted for under the equity method

 

THE GREENBRIER COMPANIES, INC.

Supplemental Information

 (In thousands, except per share amounts, unaudited)

 

Reconciliation of common shares outstanding

 

The shares used in the computation of the Company's basic and diluted earnings per common share are reconciled as follows:

 
 

Three Months Ended

 

November 30,

2019

August 31,

2019

Weighted average basic common shares outstanding (1)

32,629

32,591

Dilutive effect of convertible notes (2)

-

-

Dilutive effect of restricted stock units (3)

655

585

Weighted average diluted common shares outstanding

33,284

33,176

   

(1)

Restricted stock grants and restricted stock units that are considered participating securities, 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 2.875% Convertible notes issued in February 2017 and the 2.25% Convertible notes issued in July 2019 were excluded for the periods in which they were outstanding as the average stock price was less than the applicable conversion price and therefore was anti-dilutive.

(3)

Restricted stock units that are not considered participating securities and restricted stock units subject to performance criteria, for which actual levels of performance above target have been achieved, are included in weighted average diluted common shares outstanding when the Company is in a net earnings position.

 

Reconciliation of Net earnings attributable to Greenbrier to Adjusted net earnings attributable to Greenbrier

   
 

Three Months Ended

 

November 30,
2019

 

August 31,

2019

Net earnings attributable to Greenbrier

$                   7,669

 

$             35,107

ARI integration and acquisition-related costs, net of tax

2,218

 

8,228

Adjusted net earnings attributable to Greenbrier

$                   9,887

 

$              43,335

 

 

Reconciliation of Diluted earnings per share to Adjusted diluted earnings per share

 
   

Three Months Ended

   

November 30,

2019

 

August 31,

2019

Diluted earnings per share

 

$                      0.23

 

$                 1.06

ARI integration and acquisition-related costs, net of tax

 

0.07

 

0.25

Adjusted diluted earnings per share

 

$                      0.30

 

$                  1.31

"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995:  This press release may contain forward-looking statements, including any statements that are not purely statements of historical fact. Greenbrier uses words, and variations of words, such as "affirms," "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 include, without limitation, the information under the heading "Fiscal 2020 Outlook", "Supplemental Information – 2020 Fiscal Year Guidance and Outlook", and any other information regarding future performance and strategies. 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 the results contemplated by the forward-looking statements.

Factors that might cause such a difference include, but are not limited to, the cyclical nature of our business, economic downturns and a rising interest rate environment; changes in our product mix due to shifts in demand or fluctuations in commodity and energy prices; a decline in performance or demand of the rail freight industry; an oversupply or increase in efficiency in the rail freight industry; difficulty integrating acquired businesses or joint ventures; inability to convert backlog to future revenues; risks related to our operations outside of the U.S., including anti-bribery violations; governmental policy changes impacting international trade and corporate tax; the loss of or reduction of business from one or more of our limited number of customers; inability to lease railcars at satisfactory rates, or realize expected residual values on sale of railcars at the end of a lease; shortages of skilled labor, increased labor costs, or failure to maintain good relations with our workforce; equipment failures, technological failures, costs and inefficiencies associated with changing of production lines, or transfer of production between facilities; inability to compete successfully; suitable joint ventures, acquisition opportunities and new business endeavors may not be identified or concluded; inability to complete capital expenditure projects efficiently, or to cause capital expenditure projects to operate as anticipated; inability to design or manufacture products or technologies, or to achieve timely certification or market acceptance of new products or technologies; unsuccessful relationships with our joint venture partners; environmental liabilities, including the Portland Harbor Superfund Site; the timing of our asset sales and related revenue recognition may result in comparisons between fiscal periods not being accurate indicators of future performance; attrition within our management team or unsuccessful succession planning for members of our senior management team and other key employees who are at or nearing retirement age; changes in the credit markets and the financial services industry; volatility in the global financial markets; our actual results differing from our announced expectations; fluctuations in the availability and price of energy, freight transportation, steel and other raw materials; inability to procure specialty components or services on commercially reasonable terms or on a timely basis from a limited number of suppliers; our existing indebtedness may limit our ability to borrow additional amounts in the future, may expose us to increasing interest rates, and may expose us to a material adverse effect on our business if we are unable to service our debt or obtain additional financing; train derailments or other accidents or claims; changes in or failure to comply with legal and regulatory requirements; an adverse outcome in any pending or future litigation or investigation; potential misconduct by employees; labor strikes or work stoppages; the volatility of our stock price; dilution to investors resulting from raising additional capital or due to other reasons;  product and service warranty claims; misuse of our products by third parties; write-downs of goodwill or intangibles in future periods; conversion at our option of our outstanding convertible notes resulting in dilution to our then-current stockholders; as a holding company with no operations, our reliance on our subsidiaries and joint ventures and their ability to make distributions to us; our governing documents, the terms of our convertible notes, and Oregon law could make a change of control or acquisition of our business by a third party difficult; the discretion of our Board of Directors to pay or not pay dividends on our common stock; fluctuations in foreign currency exchange rates; inability to raise additional capital to operate our business and achieve our business objectives; shareholder activism could cause us to incur significance expense, impact our stock price, and hinder execution of our business strategy; cybersecurity risks; updates or changes to our information technology systems resulting in problems; inability to protect our intellectual property and prevent its improper use by third parties; claims by third parties that our products or services infringe their intellectual property rights; liability for physical damage, business interruption or product liability claims that exceed our insurance coverage; inability to procure adequate insurance on a cost-effective basis; changes in accounting standards or inaccurate estimates or assumptions in the application of accounting policies; fires, natural disasters, severe weather conditions or public health crises; unusual weather conditions which reduce demand for our wheel-related parts and repair services; business, regulatory, and legal developments regarding climate change which may affect the demand for our products or the ability of our critical suppliers to meet our needs; repercussions from terrorist activities or armed conflict; unanticipated changes in our tax provisions or exposure to additional income tax liabilities; the inability of certain of our customers to utilize tax benefits or tax credits; and suspension or termination of our share repurchase program. More information on these risks and other potential factors that could cause our results to differ from our forward-looking statements is included in the Company's filings with the SEC, including in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's most recently filed periodic reports on Form 10-K and subsequent Form 10-Q filing. Except as otherwise required by law, the Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's opinions only as of the date hereof.

SOURCE The Greenbrier Companies, Inc.