)

Greenbrier Reports Fiscal Second Quarter 2020 Results

Date

Tue, Apr 7, 2020 06:00 AM

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~ Announces orders of 8,500 railcars valued at over $815 million
~~ Strong liquidity position; targeting $1 billion of available liquidity
~~ $3.2 billion backlog provides forward visibility

LAKE OSWEGO, Ore., April 7, 2020 /PRNewswire/ -- The Greenbrier Companies, Inc. (NYSE: GBX) ("Greenbrier"), a leading international supplier of equipment and services to global freight transportation markets, today reported financial results for its second fiscal quarter ended  February 29, 2020.

Second Quarter Highlights

  • Base liquidity of $620 million consisting of cash of $170 million and $450 million available under committed credit facilities with high quality lenders. Greenbrier is targeting total liquidity of $1 billion.
  • Greenbrier's manufacturing and service sites continue operations as "Essential Business" under directives issued by the U.S. Department of Homeland Security (DHS) and other government authorities.
  • Orders for 8,500 diversified railcars were received during the quarter, with over 50% originating from international sources. New railcar backlog increased to 30,800 units with an estimated value of $3.2 billion as of February 29, 2020.
  • Net earnings attributable to Greenbrier for the quarter were $13.6 million, or $0.41 per diluted share, on revenue of $623.8 million. Net earnings include a mutually beneficial contract modification removing railcars from backlog that would have been produced in the second half of fiscal 2020 in exchange for $9.2 million, after tax. This modification strengthens the quality and amount of Greenbrier's backlog and improves cash on hand.
  • Adjusted net earnings attributable to Greenbrier for the quarter were $15.3 million, or $0.46 per diluted share, excluding $1.7 million, after tax, ($0.05 per share) of integration related expenses from the American Railcar Industries (ARI) acquisition.
  • Adjusted EBITDA for the quarter was $71.6 million, or 11.5% of revenue.
  • Board declares a quarterly dividend of $0.27 per share, payable on May 13, 2020 to shareholders as of April 22, 2020.

William A. Furman, Chairman & CEO commented, "Greenbrier is focused on two primary goals: protecting the safety and health of employees and preserving the economic well-being of our enterprise in this challenging environment. We are executing on the latter by increasing liquidity and sizing the organization properly in the current business environment."

Additional Comments from the CEO
Market conditions drove actions in the first half to size Greenbrier's manufacturing footprint for lower levels of railcar demand, with reductions of 3,500 global employees to scale production capacity. Manufacturing workforce reductions were primarily in Mexico. Amid the uncertain and rapidly changing impacts on the global economy from the COVID-19 pandemic, Greenbrier is suspending its previously issued guidance for fiscal 2020.  Greenbrier has initiated a range of proactive responses to address conditions in the rail equipment industry and the impact of the pandemic. The Company is eliminating all non-essential capital expenditures and is aggressively reducing overhead and SG&A expense. Greenbrier has eliminated all non-essential travel and implemented a hiring freeze while evaluating its total operating unit footprints. Collectively, these measures will generate substantial cash savings. Finally, the members of Greenbrier's Board of Directors, including me, have voluntarily reduced annual compensation.

All of Greenbrier's manufacturing and service facilities continue regular operations. Greenbrier functions as an essential infrastructure business under guidance issued by DHS and supports operations vital to the national transportation system and operations of the Department of Defense and other federal agencies, under the statutory and regulatory authority of the Department of Transportation, the Surface Transportation Board, the Federal Railroad Administration, and the Jones Act. Similar guidelines and authorities exist in other nations where we operate. Greenbrier's manufacturing backlog and factories will provide cash flow resiliency. With the strength of our current backlog and balance sheet, we expect to continue to operate while observing stringent health and safety protocols. Continuity of the business alongside employee health and welfare are Greenbrier's highest priorities. Maintaining cash flow and liquidity are essential components of Greenbrier's current operating strategy.

Business Update
Greenbrier continued to rationalize its global manufacturing footprint in the second quarter by idling excess production capacity at its North American manufacturing facilities as well as its aftermarket wheels, repair and parts locations that operate within Greenbrier Rail Services (GRS).  Significant manufacturing efficiency programs also were implemented at Greenbrier facilities in Brazil and Europe in fiscal 2019.

As mentioned above, Greenbrier's operations constitute "Essential Infrastructure" and "Essential Businesses" as defined by relevant U.S. agency guidance and advisories and in all "stay at home" orders issued in all U.S. jurisdictions where we operate.  The only exception in our entire operating network is a planned two-week shutdown of our facilities in Europe over Easter to allow for the supply chain to normalize. Greenbrier is dedicated to fulfilling its role to facilitate the continued stability of transportation supply infrastructure. Greenbrier will help maintain the delivery of vital goods, including food, medical supplies and fuel to communities and to support the United States' national security infrastructure.

At all facilities worldwide, Greenbrier policies meet or exceed CDC recommendations.  Expanded health screenings, including temperature readings, operating through split shifts, and enhanced social distancing practices have reduced the number of employees in a location at the same time. At present, Greenbrier facilities have been minimally impacted by COVID-19. Precautions and processes are in place for exposures to be reported and addressed.

Like other companies, Greenbrier cannot predict with certainty the impact that the COVID-19 pandemic may have on our business due to numerous uncertainties, including the duration of the pandemic, the impact to customers and suppliers, actions that may be taken by governmental authorities and other consequences. As a result, Greenbrier is focused on continuous contingency planning and risk analysis. Greenbrier's strong backlog, coupled with aggressive actions to slow down or shutter production lines and reduce overhead, leaves little open production space for the remainder of the fiscal and calendar year. Additionally, the Company plans to access current and proposed government programs for strategic businesses to protect our workforce and ensure economic viability of the enterprise.

Certain orders and backlog in this release are subject to customary documentation and completion of terms.

Financial Summary


Q2 FY20 

Q1 FY20

Sequential Comparison – Main Drivers  

Revenue

$623.8M

$769.4M

Fewer deliveries due to lower production rates and timing of syndication activity

Gross margin

13.8%

12.0%

Improved product mix and customer payment related to contract modification

Adjusted EBITDA

$71.6M

$74.2M

Lower revenue and operating earnings

Effective tax rate

28.9%

20.7%

Geographic mix of earnings and discrete items

Earnings from

unconsolidated affiliates

$1.7M

$1.1M

Improved efficiencies and higher deliveries in Brazil

Net earnings attributable

to noncontrolling interest

$6.4M

$16.3M

Fewer deliveries due to timing of railcar syndication activity of GIMSA produced railcars

Adjusted net earnings attributable to Greenbrier

$15.3M(1)

$9.9M(2)

Reduced revenue, deliveries and operating margin offset by net earnings attributable to noncontrolling interest due to timing of railcar syndication activity

Adjusted diluted EPS

$0.46(1)

$0.30(2)


(1)

Excludes expense of $1.7 million ($0.05 per share), net of tax, associated with ARI integration related expenses.

(2)

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

Segment Summary


Q2 FY20

Q1 FY20

Sequential Comparison – Main Drivers

Manufacturing

  Revenue

$489.9M

$657.4M

Fewer deliveries due to lower production rates and timing of syndication activity

  Gross margin

13.8%

11.5%

Improved product mix and customer payment related to contract modification; Excluding contract modification payment gross margin would be 11.5%

  Operating margin (1)

9.4%

8.1%


  Deliveries (2)

3,700

5,900

Timing of production into syndication model

Wheels, Repair & Parts

  Revenue

$91.2M

$86.6M

Higher wheelset volume due to winter seasonality

  Gross margin

7.5%

5.4%

Improved profitability from wheel volumes and repair network operational improvements

  Operating margin (1)

3.6%

1.3%


Leasing & Services

  Revenue

$42.7M

$25.4M

Increase reflects higher volume of externally sourced railcar syndications

  Gross margin

27.8%

47.3%

Lower margins on externally sourced railcar syndications; Excluding this activity, gross margin would be 47.2%

  Operating margin (1) (3)

30.0%

38.5%


(1)

See supplemental segment information on page 11 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 second quarter 2020 results. In conjunction with this news release, Greenbrier has posted a supplemental earnings presentation to our website. 
Teleconference details are as follows:

  • April 7, 2020
  • 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, 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 10,300 railcars and performs management services for 389,000 railcars. Learn more about Greenbrier at www.gbrx.com.

THE GREENBRIER COMPANIES, INC.

Consolidated Balance Sheets

 (In thousands, unaudited)



February 29,
2020

November 30,

2019

August 31,

2019

May 31,

2019

February 28,

2019

Assets






   Cash and cash equivalents

$       169,899

$       253,602

$       329,684

$      359,625

$      341,500

   Restricted cash

8,569

8,648

8,803

21,471

21,584

   Accounts receivable, net 

326,229

313,786

373,383

330,385

335,732

   Inventories

709,115

733,806

664,693

592,099

574,146

   Leased railcars for syndication

255,073

135,319

182,269

130,489

163,472

   Equipment on operating leases, net

385,974

396,187

366,688

376,241

381,336

   Property, plant and equipment, net

723,326

730,730

717,973

478,502

472,739

   Investment in unconsolidated affiliates

79,082

85,141

91,818

53,036

58,685

   Intangibles and other assets, net

160,709

162,089

125,379

97,022

101,284

   Goodwill

129,684

129,468

129,947

74,318

82,743


$   2,947,660

$   2,948,776

$   2,990,637

$   2,513,188

$   2,533,221







Liabilities and Equity






   Revolving notes

$         37,196

$         29,502

$         27,115

$         25,952

$         22,323

   Accounts payable and accrued liabilities

499,898

527,789

568,360

473,106

474,863

   Deferred income taxes

9,173

9,417

13,946

12,089

29,481

   Deferred revenue

70,869

59,657

85,070

76,170

91,533

   Notes payable, net

811,860

817,830

822,885

483,918

486,107







Contingently redeemable noncontrolling interest

30,782

31,723

31,564

24,722

25,637







   Total equity - Greenbrier

1,286,472

1,281,808

1,276,730

1,262,315

1,257,818

   Noncontrolling interest

201,410

191,050

164,967

154,916

145,459

   Total equity

1,487,882

1,472,858

1,441,697

1,417,231

1,403,277


$   2,947,660

$   2,948,776

$   2,990,637

$   2,513,188

$   2,533,221

 

THE GREENBRIER COMPANIES, INC.

Consolidated Statements of Income

 (In thousands, except per share amounts, unaudited)



Three Months Ended

Six Months Ended


February 29,

February 28,

February 29,

February 28,


2020


2019


2020


2019

Revenue









        Manufacturing

$        489,943


$       476,019


$      1,147,310


$        947,808


        Wheels, Repair & Parts

91,225


125,278


177,833


233,821


        Leasing & Services

42,680


57,374


68,064


81,565



623,848


658,671


1,393,207


1,263,194


Cost of revenue









        Manufacturing

422,309


442,996


1,004,221


860,801


        Wheels, Repair & Parts

84,373


118,455


166,265


219,433


        Leasing & Services

30,830


43,376


44,196


56,583



537,512


604,827


1,214,682


1,136,817











Margin

86,336


53,844


178,525


126,377











Selling and administrative expense

54,597


47,892


108,961


98,324


Net gain on disposition of equipment

(6,697)


(12,102)


(10,656)


(26,455)


Earnings from operations

38,436


18,054


80,220


54,508











Other costs









Interest and foreign exchange

12,609


9,237


25,461


13,641


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

25,827


8,817


54,759


40,867


Income tax expense

(7,463)


(2,248)


(13,457)


(11,383)


Earnings before earnings (loss) from unconsolidated affiliates

18,364


6,569


41,302


29,484


Earnings (loss) from unconsolidated affiliates

1,651


(786)


2,724


(319)











Net earnings

20,015


5,783


44,026


29,165


Net earnings attributable to noncontrolling interest

(6,386)


(3,018)


(22,728)


(8,444)











Net earnings attributable to Greenbrier

$             13,629


$           2,765


$           21,298


$           20,721











Basic earnings per common share:

$                  0.42


$            0.08


$                0.65


$                0.63











Diluted earnings per common share:

$                  0.41


$            0.08


$                0.64


$                0.63











Weighted average common shares:









Basic

32,661


32,628


32,645


32,634


Diluted

33,482


33,206


33,382


33,149











Dividends declared per common share

$                  0.27


$                0.25


$                0.52


$                0.50













 

THE GREENBRIER COMPANIES, INC.

Consolidated Statements of Cash Flows

 (In thousands, unaudited) 




Six Months Ended

February 29,

February 28,

2020

2019






Cash flows from operating activities








    Net earnings


$

44,026


$

29,165


    Adjustments to reconcile net earnings to net cash used in operating activities:








      Deferred income taxes



(6,714)



(3,405)


      Depreciation and amortization



59,338



40,815


      Net gain on disposition of equipment



(10,656)



(26,455)


      Accretion of debt discount



2,718



2,165


      Stock based compensation expense



7,237



7,311


      Noncontrolling interest adjustments



9,038



5,306


      Other



(39)



1,809


      Decrease (increase) in assets:








          Accounts receivable, net



46,109



23,298


          Inventories



(55,158)



(154,388)


          Leased railcars for syndication



(123,033)



(76,386)


          Other



(39,433)



(11,274)


      Increase (decrease) in liabilities:








          Accounts payable and accrued liabilities



(67,988)



28,458


          Deferred revenue



1,381



(13,041)


    Net cash used in operating activities



(133,174)



(146,622)


Cash flows from investing activities








    Proceeds from sales of assets



41,827



63,879


    Capital expenditures



(40,834)



(98,176)


    Investment in and advances to unconsolidated affiliates



(1,500)



(11,393)


    Cash distribution from unconsolidated affiliates and other



11,273



1,986


    Net cash provided by (used in) investing activities



10,766



(43,704)


Cash flows from financing activities








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



10,246



(6,007)


    Proceeds from issuance of notes payable



-



225,000


    Repayments of notes payable



(17,120)



(176,641)


    Debt issuance costs



-



(2,770)


    Dividends



(17,312)



(16,651)


    Cash distribution to joint venture partner



(8,706)



(5,058)


    Tax payments for net share settlement of restricted stock



(1,895)



(4,762)


    Net cash provided by (used in) financing activities



(34,787)



13,111


Effect of exchange rate changes



(2,824)



825


Decrease in cash, cash equivalents and restricted cash



(160,019)



(176,390)


Cash and cash equivalents and restricted cash








    Beginning of period



338,487



539,474


    End of period


$

178,468


$

363,084


Balance Sheet Reconciliation








    Cash and cash equivalents


$

169,899


$

341,500


    Restricted cash



8,569



21,584


    Total cash and cash equivalents and restricted cash as presented above


$

178,468


$

363,084


 

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 29,
2020


November 30,
2019



Net earnings

$               20,015


$           24,011



Interest and foreign exchange

12,609


12,852



Income tax expense

7,463


5,994



Depreciation and amortization

30,003


29,335



ARI integration related costs

1,535


1,991



Adjusted EBITDA

$               71,625


$           74,183




















Three Months
Ended



February 29,
2020

Backlog Activity (units) (1)






Beginning backlog

28,500



Orders received

8,500



Contract modification

(575)



Production held as Leased railcars for syndication

(1,600)



Production sold directly to third parties

(4,025)



Ending backlog

30,800







Delivery Information (units) (1)




Production sold directly to third parties

4,025



Sales of Leased railcars for syndication

475



Total deliveries

4,500



(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)


Operating Results by Quarter for 2020 are as follows:


First


Second


Total









Revenue







   Manufacturing

$    657,367


$    489,943


$ 1,147,310


   Wheels, Repair & Parts

86,608


91,225


177,833


   Leasing & Services

25,384


42,680


68,064



769,359


623,848


1,393,207


Cost of revenue







   Manufacturing

581,912


422,309


1,004,221


   Wheels, Repair & Parts

81,892


84,373


166,265


   Leasing & Services

13,366


30,830


44,196



677,170


537,512


1,214,682









Margin

92,189


86,336


178,525









Selling and administrative expense

54,364


54,597


108,961


Net gain on disposition of equipment

(3,959)


(6,697)


(10,656)


Earnings from operations

41,784


38,436


80,220









Other costs







Interest and foreign exchange

12,852


12,609


25,461


Earnings before income tax and earnings from unconsolidated affiliates

28,932


25,827


54,759


Income tax expense

(5,994)


(7,463)


(13,457)


Earnings before earnings from unconsolidated affiliates

22,938


18,364


41,302


Earnings from unconsolidated affiliates

1,073


1,651


2,724









Net earnings

24,011


20,015


44,026


Net earnings attributable to noncontrolling interest

(16,342)


(6,386)


(22,728)









Net earnings attributable to Greenbrier

$         7,669


$       13,629


$      21,298









Basic earnings per common share (1)

$           0.24


$           0.42


$           0.65









Diluted earnings per common share (1)

$           0.23


$           0.41


$           0.64









Dividends declared per common share

$           0.25


$           0.27


$           0.52




(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, 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













Dividends declared per common share

$               0.25


$              0.25


$              0.25


$              0.25


$           1.00




(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 February 29, 2020:











Revenue


Earnings (loss) from operations



External


Intersegment


  Total


External


Intersegment


Total


Manufacturing

$           489,943


$                    21


$         489,964


$           46,105


$                      1


$       46,106


Wheels, Repair & Parts

91,225


5,133


96,358


3,320


(168)


3,152


Leasing & Services

42,680


15,240


57,920


12,793


14,384


27,177


Eliminations

-


(20,394)


(20,394)


-


(14,217)


(14,217)


Corporate

-


-


-


(23,782)


-


(23,782)



$           623,848


$                      -


$         623,848


$           38,436


$                      -


$      38,436












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


 




Total assets





   February 29,
2020


November 30,
2019


Manufacturing

$            1,535,118


$            1,568,338


Wheels, Repair & Parts

314,069


317,786


Leasing & Services

897,745


776,724


Unallocated

200,728


285,928



$            2,947,660


$            2,948,776


 

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


February 29,

2020

November 30,
2019

Weighted average basic common shares outstanding (1)

32,661

32,629

Dilutive effect of convertible notes (2)

-

-

Dilutive effect of restricted stock units (3)

821

655

Weighted average diluted common shares outstanding

33,482

33,284



(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


February 29,
2020


November 30,
2019

Net earnings attributable to Greenbrier

$                 13,629


$                   7,669

ARI integration related costs, net of tax

1,665


2,218

Adjusted net earnings attributable to Greenbrier

$                 15,294


$                   9,887

 

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



Three Months Ended


February 29,
2020


November 30,
2019

Diluted earnings per share

$                      0.41


$                           0.23

ARI integration related costs, net of tax

0.05


0.07

Adjusted diluted earnings per share

$                      0.46


$                           0.30

"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 "aim",  "allow," "believe,"  "can," "ensure," "estimates," "has eliminated," "maintain," "may," "normalize," "plans," "potential," "preserving," "reducing," "seeks," "should," "target," "targeting," "typically," "will," "may," "can," "will generate" and similar expressions to identify forward-looking statements. These forward-looking statements include, without limitation, statements about future liquidity; savings generated by reducing capital expenditures, SG&A, overhead, other expenses; targeting available capital; as well as other information regarding future performance and strategies and appear throughout this press release including in the headlines and the sections "Second Quarter Highlights" and "Business Update." 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 COVID-19 coronavirus pandemic and the governmental reaction to COVID-19 having a materially negative impact on our business, liquidity and financial position, results of operations, stock price, and our ability to convert backlog to revenue; our inability to increase our liquidity and borrowing base as we anticipate or being delayed in doing so; oil prices remaining materially lower than recent historical prices; inability to implement cost savings in the amounts or timelines that we have planned; 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 filings. 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.

Adjusted Financial Metric Definitions

Adjusted EBITDA, Adjusted net earnings attributable to Greenbrier and Adjusted diluted EPS 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, 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. We believe this assists in comparing our performance across reporting periods.

SOURCE The Greenbrier Companies, Inc.