)

Greenbrier Reports Fourth Quarter and 2020 Fiscal Year Results

Date

Fri, Oct 23, 2020 06:00 AM

Share

~ Operating cash flow of $183 million in the quarter and $272 million in the full year
~~ Orders for 2,800 railcars valued at approximately $250 million in the quarter
~~ Backlog of ~$2.4 billion; resized production footprint aligns with market ~

LAKE OSWEGO, Ore., Oct. 23, 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 fourth fiscal quarter and year ended August 31, 2020.

Fourth Quarter Highlights

  • Liquidity of $919.6 million, including $833.7 million in cash and $85.9 million of available borrowing capacity. Combined with nearly $200 million of additional initiatives in progress, exceeded the $1 billion liquidity and cost savings target.
  • Generated operating cash flow of $183.2 million in the quarter primarily driven by decreases in working capital and from syndication activity.
  • Diversified new railcar backlog as of August 31, 2020 was 24,600 units with an estimated value of $2.4 billion, including orders for 2,800 railcars valued at approximately $250.0 million received during the quarter.  Deliveries in the quarter were 5,100 units.
  • Net loss attributable to Greenbrier for the quarter was $0.1 million, or $0.00 per diluted share, on revenue of $636.4 million. Net loss includes $1.9 million, net of tax, ($0.06 per share) of integration related expenses from the American Railcar Industries (ARI) acquisition and $3.6 million, net of tax and noncontrolling interest, ($0.10 per share) of severance expenses.
  • Adjusted net earnings attributable to Greenbrier for the quarter were $5.5 million, or $0.16 per diluted share, excluding $5.5 million, net of tax, ($0.16 per share) of integration and severance expenses.
  • Adjusted EBITDA for the quarter was $55.7 million, or 8.7% of revenue.
  • Board declares a quarterly dividend of $0.27 per share, payable on December 2, 2020 to shareholders as of November 11, 2020 representing Greenbrier's 26th consecutive dividend.

Fiscal Year 2020 Highlights

  • Net earnings attributable to Greenbrier for the year were $49.0 million, or $1.46 per diluted share, on revenue of $2.8 billion. Net earnings include $8.4 million, net of tax, ($0.26 per share) of integration related expenses from the ARI acquisition and $12.9 million, net of tax, ($0.38 per share) of severance expenses.
  • Adjusted net earnings attributable to Greenbrier were $70.2 million, or $2.10 per diluted share, excluding $21.3 million, net of tax and noncontrolling interest, ($0.64 per share) of integration and severance expenses.
  • Adjusted EBITDA for the year was $310.3 million, or 11.1% of revenue.
  • Strong cash flows from operations of $272.3 million includes $405.4 million in the second half of the fiscal year.
  • New railcar deliveries of 21,700 units for the year were the second highest in Greenbrier's history.
  • Generated new railcar orders of 16,600 units, valued at $1.6 billion, with 40% originating internationally.

William A. Furman, Chairman & CEO commented, "Greenbrier continued to perform well during this period of weaker demand.  Critically, our diverse $2.4 billion backlog remains supported by strong customer commitments and provides clear visibility for several years.  Entering fiscal 2021, we remain focused on maintaining our strong liquidity position. Greenbrier ended the quarter with more than $830 million of cash, an increase of nearly $100 million from the end of the third quarter. Net debt decreased by nearly $360 million since Greenbrier's fiscal second quarter.  Our adjusted manufacturing footprint meets today's demand levels without constraining our ability to increase capacity as markets improve, allowing Greenbrier to maintain our presence in every region we serve around the world.  Looking forward, we see early signs that demand will improve later in calendar 2021.  Greenbrier is well-positioned to benefit from improving conditions in our core markets."

Business Update & Outlook

As we enter fiscal 2021, Greenbrier continues to execute on its COVID-19 response plan, and protecting our employees within the work environment remains our top priority.  The strict protocols enacted and rapid response to clusters has allowed us to operate safely and efficiently throughout the world.  Continued vigilance is required as community spread of COVID-19 is increasing in many areas where we operate. We are continuously working to maintain a low incident rate of COVID-19 among our employees by focusing on their health and enhancing the preventative and remedial actions of our rapid response teams across the company.

We also remain focused on preserving the near-term and longer-term financial health of Greenbrier in light of the economic consequences of the pandemic and an industry downturn. Maintaining cash flow and liquidity are essential components of Greenbrier's current operating strategy, and we have been very successful in this regard. We addressed our cost structure by reducing operating expenses and capital expenditures and are appropriately positioned for today's market environment. We closed 13 rail production lines in fiscal 2020 and are continuously adjusting capacity to align with an evolving demand outlook.  We also reduced our global workforce by over 6,500 employees, or by about 40%, including both staff and production employees.  Looking forward, while we remain focused on managing our cost base, we will be nimble and adjust capacity to ensure Greenbrier's ability to fully participate in an economic recovery.  Coupled with a new railcar backlog valued at approximately $2.4 billion, we have preserved Greenbrier's ability to operate in a very challenging market environment.

Financial Summary


Q4 FY20

Q3 FY20

Sequential Comparison – Main Drivers

Revenue

$636.4M

$762.6M

Fewer deliveries and lower activity levels in Wheels, Repair & Parts

Gross margin

10.5%

14.1%

Less syndication activity and operating inefficiencies in Manufacturing and Wheels, Repair & Parts

Selling and administrative

$46.3M

$49.5M

Continuing cost reduction initiatives result in reduced employee-related and travel & entertainment expenses; each quarter includes $1.8 million of severance expense

Net gain on disposition of equipment

$0.6M

$8.8M

Minimal fleet disposition activity

Adjusted EBITDA

$55.7M

$99.9M

Lower operating earnings

Effective tax rate

21.3%

41.2%

Continued volatility from geographic mix of earnings and discrete items related to foreign currency fluctuations

Adjusted net earnings attributable to Greenbrier

$5.5M(1)

$35.1M(2)

Lower operating earnings reflecting fewer deliveries, operating inefficiencies and lower net gains on equipment sales partially offset by lower selling & administrative expense

Adjusted diluted EPS

$0.16(1)

$1.05(2)



(1)  Excludes expense of $5.6 million ($0.16 per share), net of tax and noncontrolling interest, associated with ARI integration related expenses and severance expenses.

(2)  Excludes expense of $7.3 million ($0.22 per share), net of tax, associated with ARI integration related expenses and severance expenses.

Segment Summary


Q4 FY20

Q3 FY20

Sequential Comparison – Main Drivers

Manufacturing

  Revenue

$549.7M

$653.0M

Lower production rates and less syndication activity results in fewer deliveries

  Gross margin

9.4%

13.8%

Operating inefficiencies from rationalizing capacity and less syndication activity

  Operating margin (1)

5.4%

10.5%


  Deliveries (2)

4,900

5,400


Wheels, Repair & Parts

  Revenue

$64.8M

$82.0M

Reduced wheel volumes and repair activity

  Gross margin

6.0%

8.6%

Operating inefficiencies due to lower business activity levels

  Operating margin (1)

1.3%

4.6%


Leasing & Services

  Revenue

$22.0M

$27.5M

Less interim rent on leased railcars for syndication and no externally sourced syndication sales activity

  Gross margin

53.2%

37.4%

No externally sourced syndication sales activity

  Operating margin (1) (3)

29.7%

43.0%


  Fleet utilization

90.4%

92.1%



(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 fourth quarter 2020 results. In conjunction with this news release, Greenbrier has posted a supplemental earnings presentation to our website. 
Teleconference details are as follows:

  • October 23, 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 other geographies as opportunities arise. 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, and other components. Greenbrier owns a lease fleet of 8,300 railcars and performs management services for 393,000 railcars. Learn more about Greenbrier at www.gbrx.com.



THE GREENBRIER COMPANIES, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, unaudited)



August 31,

2020

May 31,

2020

February 29,

2020

November 30,

2019

August 31,
2019

Assets






   Cash and cash equivalents

$       833,745

$       735,258

$       169,899

$       253,602

$       329,684

   Restricted cash

8,342

8,704

8,569

8,648

8,803

   Accounts receivable, net 

239,597

261,629

326,229

313,786

373,383

   Inventories

529,529

675,442

709,115

733,806

664,693

   Leased railcars for syndication

107,671

136,144

255,073

135,319

182,269

   Equipment on operating leases, net

350,442

355,841

385,974

396,187

366,688

   Property, plant and equipment, net

711,524

719,155

723,326

730,730

717,973

   Investment in unconsolidated affiliates

72,354

75,508

79,082

85,141

91,818

   Intangibles and other assets, net

190,322

181,315

160,709

162,089

125,379

   Goodwill

130,308

130,035

129,684

129,468

129,947


$   3,173,834

$   3,279,031

$   2,974,660

$   2,948,776

$   2,990,637







Liabilities and Equity






   Revolving notes

$       351,526

$       416,535

$         37,196

$         29,502

$         27,115

   Accounts payable and accrued liabilities

463,880

488,969

499,898

527,789

568,360

   Deferred income taxes

7,701

4,354

9,173

9,417

13,946

   Deferred revenue

42,467

63,536

70,869

59,657

85,070

   Notes payable, net

804,088

806,919

811,860

817,830

822,885







Contingently redeemable noncontrolling interest

31,117

30,611

30,782

31,723

31,564







   Total equity - Greenbrier

1,293,043

1,291,221

1,286,472

1,281,808

1,276,730

   Noncontrolling interest

180,012

176,886

201,410

191,050

164,967

   Total equity

1,473,055

1,468,107

1,487,882

1,472,858

1,441,697


$   3,173,834

$   3,279,031

$   2,947,660

$   2,948,776

$   2,990,637




THE GREENBRIER COMPANIES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts, unaudited)



Years Ended August 31,


2020


2019


2018

Revenue






   Manufacturing

$      2,349,971


$      2,431,499


$     2,044,586

   Wheels, Repair & Parts

324,670


444,502


347,023

   Leasing & Services

117,548


157,590


127,855


2,792,189


3,033,591


2,519,464

Cost of revenue






   Manufacturing

2,065,169


2,137,625


1,727,407

   Wheels, Repair & Parts

302,189


420,890


318,330

   Leasing & Services

71,700


108,590


64,672


2,439,058


2,667,105


2,110,409







Margin

353,131


366,486


409,055







Selling and administrative

204,706


213,308


200,439

Net gain on disposition of equipment

(20,004)


(40,963)


(44,369)

Goodwill impairment

-


10,025


-

Earnings from operations

168,429


184,116


252,985







Other costs






Interest and foreign exchange

43,619


30,912


29,368

Earnings before income tax and earnings (loss) from

   unconsolidated affiliates

124,810


153,204


223,617

Income tax expense

(40,184)


(41,588)


(32,893)

Earnings before earnings (loss) from

   unconsolidated affiliates

84,626


111,616


190,724

Earnings (loss) from unconsolidated affiliates

2,960


(5,805)


(18,661)







Net earnings

87,586


105,811


172,063

Net earnings attributable to noncontrolling interest

(38,619)


(34,735)


(20,282)







Net earnings attributable to Greenbrier

$           48,967


$           71,076


$        151,781







Basic earnings per common share

$                 1.50


$                 2.18


$                 4.92







Diluted earnings per common share

$                  1.46


$                 2.14


$                 4.68







Weighted average common shares






Basic

32,670


32,615


30,857

Diluted

33,441


33,165


32,835







Dividends declared per common share

$                 1.06


$                 1.00


$                0.96










THE GREENBRIER COMPANIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited) 



Years Ended August 31,


2020


2019


2018

Cash flows from operating activities:






    Net earnings

$       87,586


$     105,811


$        172,063

    Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:






      Deferred income taxes

(9,489)


(20,225)


(40,496)

      Depreciation and amortization

109,850


83,731


74,356

      Net gain on disposition of equipment

(20,004)


(40,963)


(44,369)

      Stock based compensation expense

8,997


11,153


29,314

      Accretion of debt discount

5,504


4,458


4,171

      Noncontrolling interest adjustments

1,436


7,402


2,864

  Goodwill Impairment

-


10,025


-

     Other

1,142


145


1,688

      Decrease (increase) in assets:






          Accounts receivable, net

135,326


13,022


(83,551)

        Inventories

166,607


(143,168)


(26,592)

          Leased railcars for syndication

(12,942)


(96,110)


(54,023)

          Other assets

(64,995)


6,843


34,115

    Increase (decrease) in liabilities:






          Accounts payable and accrued liabilities

(108,837)


55,910


54,032

          Deferred revenue

(27,920)


(19,275)


(20,231)

    Net cash provided by (used in) operating activities

272,261


(21,241)


103,341

Cash flows from investing activities:






    Acquisitions, net of cash acquired

-


(361,878)


(34,874)

    Proceeds from sales of assets

83,484


125,427


153,224

    Capital expenditures

(66,879)


(198,233)


(176,848)

    Investment in and advances to unconsolidated affiliates

(1,815)


(11,393)


(26,455)

    Cash distribution from unconsolidated affiliates and other

12,693


2,096


4,661

    Net cash provided by (used in) investing activities

27,483


(443,981)


(80,292)

Cash flows from financing activities:






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

146,542


(105)


23,401

    Proceeds from revolving notes with maturities longer than 90 days

176,500


-


-

    Proceeds from issuance of notes payable

-


525,000


13,771

    Repayments of notes payable

(30,179)


(182,971)


(22,269)

    Debt issuance costs

-


(8,630)


-

    Dividends

(35,173)


(33,193)


(29,914)

    Cash distribution to joint venture partner

(38,969)


(16,879)


(73,033)

    Investment by joint venture partner

-


-


6,500

    Tax payments for net share settlement of restricted stock

(2,266)


(6,321)


(7,723)

Net cash provided by (used in) financing activities

216,455


276,901


(89,267)

    Effect of exchange rate changes

(12,599)


(12,666)


(14,666)

   Increase (decrease) in cash and cash equivalents and restricted cash

503,600


(200,987)


(80,884)

Cash and cash equivalents and restricted cash






Beginning of period

338,487


539,474


620,358

End of period

$     842,087


$     338,487


$     539,474

Balance Sheet Reconciliation:






    Cash and cash equivalents

$     833,745


$     329,684


$     530,655

    Restricted cash

8,342


8,803


8,819

    Total cash and cash equivalents and restricted cash as presented above

$     842,087


$     338,487


$     539,474




THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

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


Reconciliation of Net earnings to Adjusted EBITDA





Three Months Ended


Year Ended




August 31,

2020


May 31,

2020


August 31,
2020

Net earnings

$                 7,691


$               35,869


$               87,586

Interest and foreign exchange

10,596


7,562


43,619

Income tax expense

2,306


24,421


40,184

Depreciation and amortization

27,398


23,114


109,850

Severance expense

5,919


6,341


21,201

ARI integration related costs

1,750


2,545


7,821

Adjusted EBITDA

$             55,660


$             99,852


$           310,261























 

Three Months
Ended


Year Ended

August 31,

2020

August 31,
2020

Backlog Activity (units) (1)






Beginning backlog

26,700


30,300

Orders received

2,800


16,600

Contract modification

--


(575)

Production held as Leased railcars for syndication

(700)


(3,200)

Production sold directly to third parties

(4,200)


(18,525)

Ending backlog

24,600


24,600





Delivery Information (units) (1)




Production sold directly to third parties

4,200


18,525

Sales of Leased railcars for syndication

900


3,175

Total deliveries

5,100


21,700


(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


Third


Fourth


Total











Revenue










   Manufacturing

$    657,367


$    489,943


$        653,007


$         549,654


$ 2,349,971

   Wheels, Repair & Parts

86,608


91,225


82,024


64,813


324,670

   Leasing & Services

25,384


42,680


27,526


21,958


117,548


769,359


623,848


762,557


636,425


2,792,189

Cost of revenue










   Manufacturing

581,912


422,309


562,793


498,155


2,065,169

   Wheels, Repair & Parts

81,892


84,373


75,001


60,923


302,189

   Leasing & Services

13,366


30,830


17,232


10,272


71,700


677,170


537,512


655,026


569,350


2,439,058











Margin

92,189


86,336


107,531


67,075


353,131











Selling and administrative expense

54,364


54,597


49,494


46,251


204,706

Net gain on disposition of equipment

(3,959)


(6,697)


(8,775)


(573)


(20,004)

Earnings from operations

41,784


38,436


66,812


21,397


168,429











Other costs










Interest and foreign exchange

12,852


12,609


7,562


10,596


43,619

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

28,932


25,827


59,250


10,801


124,810

Income tax expense

(5,994)


(7,463)


(24,421)


(2,306)


(40,184)

Earnings before earnings (loss) from unconsolidated affiliates

22,938


18,364


34,829


8,495


84,626

Earnings (loss) from unconsolidated affiliates

1,073


1,651


1,040


(804)


2,960











Net earnings

24,011


20,015


35,869


7,691


87,586

Net earnings attributable to noncontrolling interest

(16,342)


(6,386)


(8,097)


(7,794)


(38,619)











Net earnings (loss) attributable to Greenbrier

$         7,669


$       13,629


$       27,772


$         (103)


$      48,967











Basic earnings per common share (1)

$           0.24


$           0.42


$           0.85


$          (0.00)


$           1.50











Diluted earnings per common share (1)

$           0.23


$           0.41


$           0.83


$          (0.00)


$           1.46











Dividends declared per common share

$           0.25


$           0.27


$           0.27


$         0.27


$           1.06



(1)

Quarterly amounts may 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 may 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 August 31, 2020:










Revenue


Earnings (loss) from operations


External


Intersegment


  Total


External


Intersegment


Total

Manufacturing

$           549,654


$               1,683


$         551,337


$           29,695


$                  (19)


$       29,676

Wheels, Repair & Parts

64,813


95


64,908


813


3


816

Leasing & Services

21,958


10,898


32,856


6,520


10,528


17,048

Eliminations

-


(12,676)


(12,676)


-


(10,512)


(10,512)

Corporate

-


-


-


(15,631)


-


(15,631)


$           636,425


$                      -


$         636,425


$           21,397


$                      -


$      21,397



















Three months ended May 31, 2020:










Revenue


Earnings (loss) from operations


External


Intersegment


  Total


External


Intersegment


Total

Manufacturing

$           653,007


$               1,151


$         654,158


$           68,445


$                    95


$       68,540

Wheels, Repair & Parts

82,024


1,527


83,551


3,785


(393)


3,392

Leasing & Services

27,526


14,841


42,367


11,837


14,454


26,291

Eliminations

-


(17,519)


(17,519)


-


(14,156)


(14,156)

Corporate

-


-


-


(17,255)


-


(17,255)


$           762,557


$                      -


$         762,557


$           66,812


$                      -


$      66,812












Total assets




   August 31,
2020


May 31,

2020

Manufacturing

$            1,301,715


$            1,441,052

Wheels, Repair & Parts

271,862


296,888

Leasing & Services

739,025


777,523

Unallocated, including cash

861,232


763,568


$            3,173,834


$            3,279,031




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


Year Ended


August 31,

2020

May 31,

2020


August 31,

2020

Weighted average basic common shares outstanding (1)

32,658

32,690


32,670

Dilutive effect of convertible notes (2)

-

-


-

Dilutive effect of restricted stock units (3)

-

788


771

Weighted average diluted common shares outstanding

32,658

33,478


33,441














(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


Year Ended




August 31,

2020


May 31,

2020


August 31,

2020

Net earnings (loss) attributable to Greenbrier

$                 (103)


$              27,772


$              48,967

ARI integration related costs, net of tax (1)

1,936


2,539


8,358

Severance expense, net of tax & noncontrolling interest (2)

3,636


4,803


12,867

Adjusted net earnings attributable to Greenbrier

$                5,469


$              35,114


$              70,192



(1)

Net of tax of $620, $813, and $2,689, respectively.

(2)

Net of tax and noncontrolling interest of $2,283, $1,538 and $8,334, respectively.




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





Three Months Ended


Year Ended




August 31,

2020


May 31,

2020


August 31,

2020

Diluted earnings per share

$                   0.00


$                   0.83


$                   1.46

ARI integration related costs, net of tax

0.06


0.08


0.26

Severance expense, net of tax & noncontrolling interest

0.10


0.14


0.38

Adjusted diluted earnings per share

$                   0.16


$                   1.05


$                   2.10

 

Weighted average diluted shares used to calculate Adjusted diluted earnings per share

 

33,519


 

33,478


 

33,441

"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 "achieve," "align," "believe," "continue," "improve,"  "maintain," "target," "will," "working," and similar expressions to identify forward-looking statements. These forward-looking statements include, without limitation, statements about backlog, future liquidity and cash flow, spending reductions, available borrowing capacity, lower capital expenditures, expected trends as well as other information regarding future performance and strategies and appear throughout this press release including in the headlines and the sections "Fourth Quarter Highlights" and "Business Update & Outlook." 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 following. (1) We are unable to predict when, how, or with what magnitude COVID-19 governmental reaction to the pandemic, and related economic disruptions will negatively impact our business: we may be prevented from operating our facilities; the operations of our customers may be disrupted increasing the likelihood that our customers may attempt to delay, defer or cancel orders,  or cease to operate as going concerns; the operations of our suppliers may be disrupted; our indebtedness may increase; we may breach the covenants in our credit agreement; the market price of our common stock may drop or remain volatile; we may incur significant employee health care costs under our self-insurance programs. The longer the pandemic continues, the more likely that negative impacts on our business will occur, some of which we cannot now foresee. (2) Our backlog of railcar units and marine vessels is not necessarily indicative of future results of operations. Certain orders in backlog are subject to customary documentation which may not occur. Customers may attempt to cancel or modify orders or refuse to accept and pay for products. The likelihood of cancellations, modifications, rejection and non-payment for our products generally increases during periods of market weakness. The timing of converting backlog to revenue is also materially impacted by our decision whether to lease railcars, sell railcars, or syndicate railcars with a lease attached to an investor. More information on 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 report on Form 10-K. 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.