)

Greenbrier Reports Fourth Quarter and Fiscal Year Results

Date

Fri, Oct 26, 2018 06:00 AM

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LAKE OSWEGO, Ore., Oct. 26, 2018 /PRNewswire/ -- The Greenbrier Companies, Inc. (NYSE: GBX) today reported financial results for its fourth fiscal quarter and year ended August 31, 2018.

The Greenbrier Companies Logo (PRNewsfoto/The Greenbrier Companies, Inc.)

Fourth Quarter Highlights

  • Net earnings attributable to Greenbrier for the quarter were $30.9 million, or $0.94 per diluted share, on revenue of $689.2 million.
  • Adjusted EBITDA for the quarter was $75.3 million, or 10.9% of revenue.
  • New railcar deliveries totaled 6,000 units for the quarter.
  • Diversified orders of 9,300 railcars were received during the quarter, valued at over $1.0 billion. Sequential increase in book-to-bill to 1.6x from 1.1x in the third quarter.
  • New railcar backlog was 27,400 units with an estimated value of $2.7 billion.
  • Board declares a quarterly dividend of $0.25 per share, payable on December 5, 2018 to shareholders of record as of November 14, 2018.

Fiscal Year 2018 Highlights     

  • Net earnings attributable to Greenbrier for the year were $151.8 million, or $4.68 per diluted share, on revenue of $2.5 billion. Adjusted net earnings attributable to Greenbrier for the year were $133.9 million, or $4.13 per diluted share.

($ in millions except per share)

Net earnings attributable
to Greenbrier

Diluted EPS

Unadjusted (GAAP)

$151.8

$4.68

GBW goodwill impairment

9.5

0.29

Non-recurring tax benefit

(27.4)

(0.84)

Adjusted

$133.9

$4.13

 

  • Adjusted EBITDA for the year was $318.2 million, or 12.6% of revenue.
  • New railcar deliveries totaled 20,900 units for the year.
  • Orders of 21,900 units valued at approximately $2.2 billion across a broad range of railcar types. 30% of orders originated internationally.
  • Cash provided by operating activities exceeded $100 million for the year.

Fiscal Year 2019 Highlights     

  • Greenbrier renewed, extended and increased its revolving credit facility and leasing term loan totaling $825 million. Extending both facilities to 2023, the additional liquidity supports Greenbrier's strategic objective to grow at scale.
  • Today, Greenbrier separately announced an agreement to form a joint venture with Saudi Railway Company ("SAR") that will generate a total investment of 1 billion Saudi riyals (USD $270 million) in Saudi Arabia's railway system and a supply of freight railcars for the Saudi rail industry.

William A. Furman, Chairman and CEO, said, "Greenbrier delivered solid results for the fourth quarter and fiscal 2018.  Orders for 21,900 railcars valued at $2.2 billion in 2018 are up more than 30% compared to 2017, approaching record order levels set in 2015.  Additionally, 30% of Greenbrier's orders in 2018 came from international customers.  Order momentum in the second half of fiscal 2018 corresponds with an improving North American market.  Railcars in storage have been steadily declining and forecasts for annual railcar deliveries in 2019 and 2020 are expected to exceed 60,000 units each year.  Greenbrier's backlog of 27,400 units, valued at $2.7 billion, is diverse by product type and geographic markets served, providing visibility through fiscal 2019 and into 2020."

Furman added, "Greenbrier's earnings performance in fiscal 2018 was our third best ever.  Revenue and deliveries were within the guidance range for the year, and aggregate gross margin remains favorable considering the North American freight railcar pricing environment.  Greenbrier ended the year with a robust balance sheet, ample liquidity and low levels of debt, positioning us for strong operating cash flow in fiscal 2019."

"Our strategy to diversify internationally is succeeding.  Greenbrier has firmly established commercial and manufacturing operations on four continents.  In August, Greenbrier acquired a majority ownership of Turkish railcar builder Rayvag.  This morning GBX announced its intention to establish a joint venture with SAR to execute railway projects and supply railcars for profitable growth of the Saudi freight rail market.  This investment supports the objectives of the Kingdom's Vision 2030 plan.  Recent trade policy advancements in America are also favorable to Greenbrier's international business.  This includes progress by the United States, Mexico and Canada on a free trade agreement and Congressional action that blunts the advancement of state-owned enterprises and supports free markets for railcar manufacturing and its vast supply chain," Furman concluded.

Business Outlook

Based on current business trends and production schedules for fiscal 2019, Greenbrier believes:

  • Deliveries will be 24,000 – 26,000 units including Greenbrier-Maxion (Brazil) which will account for approximately 2,000 units
  • Revenue will exceed $3.0 billion
  • Diluted EPS of $4.20 – 4.40

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


Q4 FY18

Q3 FY18

Sequential Comparison – Main Drivers

Revenue

$689.2M

$641.4M

Up 7.5% primarily due to higher volume of deliveries

Gross margin

15.4%

16.9%

Reflects product mix changes

Selling and administrative expense

$51.3M

$51.8M

Continued investments to support international and other strategic initiatives

Net gain on disposition of equipment

$4.6M

$14.8M

Continued rebalancing of lease fleet

Adjusted EBITDA

$75.3M

$86.9M

Lower operating margin

Effective tax rate

20.1% (1)

24.5%

Reflects a change in the geographic mix of earnings and additional non-recurring benefit from Tax Act

Loss from unconsolidated affiliates

($3.1M)

($12.8M) (2)

Q3 includes $9.5 million non-cash GBW goodwill impairment

Net earnings attributable to noncontrolling interest

$6.2M

$3.3M

Higher deliveries and timing of railcar syndications at our GIMSA JV

Adjusted net earnings attributable to Greenbrier

$26.4M

$42.4M

Primarily lower operating earnings; Q4 excludes $4.5 million tax benefit

Adjusted diluted EPS

$0.80

$1.30

Q4 excludes $0.14 per share tax benefit



(1)

Includes $4.5 million, or $0.14 per share, benefit related to a transition tax adjustment from the 2017 Tax Act.

(2)

Includes $9.5 million, net of tax, or $0.29 per share, impact associated with a non-cash goodwill impairment charge recorded by GBW.

Segment Summary


Q4 FY18

Q3 FY18

Sequential Comparison – Main Drivers

Manufacturing

  Revenue

$571.2M

$510.1M

Up 12.0% due to higher deliveries

  Gross margin

14.3%

16.1%

Reflects product mix changes

  Operating margin (1)

10.9%

12.2%


  Deliveries (2)

5,600

5,100


Wheels, Repair & Parts (3)

  Revenue

$85.8M

$94.5M

Down 9.2% primarily attributable to lower wheel and component volumes and scrap sales

  Gross margin

7.6%

9.2%

Down primarily due to lower volumes

  Operating margin (1)

4.3%

5.9%


Leasing & Services

  Revenue

$32.2M

$36.8M

Down 12.5% due to lower volume of externally sourced railcar syndications

  Gross margin

54.9%

47.9%

Up due to more normalized mix of revenue

  Operating margin (1) (4)

54.2%

72.6%


  Lease fleet utilization

94.4%

90.4%




(1)  

See supplemental segment information on page 11 for additional information.

(2)

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

(3)

In August 2018, the GBW Railcar Services joint venture was dissolved resulting in 12 repair locations returning to Greenbrier which are included in the Wheels, Repair & Parts segment.

(4)

Includes Net gain on disposition of equipment, which is not included in gross margin.

Conference Call

Greenbrier will host a teleconference to discuss its fourth quarter 2018 results. In conjunction with this news release, Greenbrier has posted a supplemental earnings presentation to our website.  Teleconference details are as follows:

  • October 26, 2018
  • 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 over 8,100 railcars and performs management services for 357,000 railcars. Learn more about Greenbrier at www.gbrx.com.

"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 such as "anticipates," "believes," "forecast," "potential," "goal," "contemplates," "expects," "intends," "plans," "projects," "hopes," "seeks," "estimates," "strategy," "could," "would," "should," "likely," "will," "may," "can," "designed to," "future," "foreseeable future" and similar expressions to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to certain risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements. Factors that might cause such a difference include, but are not limited to, reported backlog and awards that are not indicative of Greenbrier's financial results; uncertainty or changes in the credit markets and financial services industry; high levels of indebtedness and compliance with the terms of Greenbrier's indebtedness; write-downs of goodwill, intangibles and other assets in future periods; sufficient availability of borrowing capacity; fluctuations in demand for newly manufactured railcars or failure to obtain orders as anticipated in developing forecasts; loss of one or more significant customers; customer payment defaults or related issues; policies and priorities of the federal government regarding international trade, taxation and infrastructure; sovereign risk to contracts, exchange rates or property rights; actual future costs and the availability of materials and a trained workforce; failure to design or manufacture new products or technologies or to achieve certification or market acceptance of new products or technologies; steel or specialty component price fluctuations and availability and scrap surcharges; changes in product mix and the mix between segments; labor disputes, energy shortages or operating difficulties that might disrupt manufacturing operations or the flow of cargo; production difficulties and product delivery delays as a result of, among other matters, costs or inefficiencies associated with expansion, start-up, or changing of production lines or changes in production rates, changing technologies, transfer of production between facilities or non-performance of alliance partners, subcontractors or suppliers; ability to obtain suitable contracts for the sale of leased equipment and risks related to car hire and residual values; integration of current or future acquisitions and establishment of joint ventures; succession planning; discovery of defects in railcars or services resulting in increased warranty costs or litigation; physical damage or product or service liability claims that exceed Greenbrier's insurance coverage; train derailments or other accidents or claims that could subject Greenbrier to legal claims; actions or inactions by various regulatory agencies including potential environmental remediation obligations or changing tank car or other railcar or railroad regulation; and issues arising from investigations of whistleblower complaints; all as may be discussed in more detail under the headings "Risk Factors" and "Forward Looking Statements" in Greenbrier's Annual Report on Form 10-K for the fiscal year ended August 31, 2017, Greenbrier's Quarterly Report on Form 10-Q for the fiscal quarter ended May 31, 2018, and Greenbrier's other reports on file with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's opinions only as of the date hereof. Except as otherwise required by law, Greenbrier does not assume any obligation to update any forward-looking statements.

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 commonly 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. We believe this assists in comparing our performance across reporting periods.

THE GREENBRIER COMPANIES, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, unaudited)



August 31,

2018

May 31,

2018

February 28,

2018

November 30,

2017

August 31,

2017

Assets






   Cash and cash equivalents

$     530,655

$     589,969

$     586,008

$      591,406

$     611,466

   Restricted cash

8,819

9,204

8,875

8,839

8,892

   Accounts receivable, net 

348,406

322,328

321,795

315,393

279,964

   Inventories

432,314

396,518

408,419

411,371

400,127

   Leased railcars for syndication

130,926

158,194

168,748

130,991

91,272

   Equipment on operating leases, net

322,855

302,074

258,417

274,598

315,941

   Property, plant and equipment, net

457,196

424,035

429,465

426,961

428,021

   Investment in unconsolidated affiliates

61,414

75,884

98,009

101,529

108,255

   Intangibles and other assets, net

94,668

82,030

83,308

83,819

85,177

   Goodwill

78,211

70,347

69,011

67,783

68,590


$ 2,465,464

$  2,430,583

$  2,432,055

$   2,412,690

$ 2,397,705







Liabilities and Equity






   Revolving notes

$       27,725

$       20,337

$          7,990

$           6,885

$         4,324

   Accounts payable and accrued liabilities

449,857

447,827

461,088

441,373

415,061

   Deferred income taxes

31,740

36,657

41,257

69,984

75,791

   Deferred revenue

105,954

102,919

85,886

120,044

129,260

   Notes payable, net

436,205

437,833

559,755

558,987

558,228







Contingently redeemable noncontrolling interest              

29,768

31,135

33,046

35,209

36,148







   Total equity - Greenbrier

1,250,101

1,225,512

1,095,447

1,032,557

1,018,130

   Noncontrolling interest

134,114

128,363

147,586

147,651

160,763

   Total equity

1,384,215

1,353,875

1,243,033

1,180,208

1,178,893


$ 2,465,464

$  2,430,583

$  2,432,055

$   2,412,690

$ 2,397,705

 

THE GREENBRIER COMPANIES, INC

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts, unaudited)



Years Ended August 31,



2018


2017


2016


Revenue







   Manufacturing

$      2,044,586


$     1,725,188


$     2,096,331


   Wheels, Repair & Parts (1)

347,023


312,679


322,395


   Leasing & Services

127,855


131,297


260,798



2,519,464


2,169,164


2,679,524


Cost of revenue







   Manufacturing

1,727,407


1,373,967


1,630,554


   Wheels, Repair & Parts (1)

318,330


288,336


293,751


   Leasing & Services

64,672


85,562


203,782



2,110,409


1,747,865


2,128,087









Margin

409,055


421,299


551,437









Selling and administrative

200,439


170,607


158,681


Net gain on disposition of equipment

(44,369)


(9,740)


(15,796)


Earnings from operations

252,985


260,432


408,552









Other costs







Interest and foreign exchange

29,368


24,192


13,502


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

223,617


236,240


395,050


Income tax expense

(32,893)


(64,014)


(112,322)


Earnings before earnings (loss) from unconsolidated affiliates

190,724


172,226


282,728


Earnings (loss) from unconsolidated affiliates

(18,661)


(11,764)


2,096









Net earnings

172,063


160,462


284,824


Net earnings attributable to noncontrolling interest

(20,282)


(44,395)


(101,611)









Net earnings attributable to Greenbrier

$         151,781


$        116,067


$          183,213









Basic earnings per common share

$               4.92


$              3.97


$                6.28









Diluted earnings per common share

$               4.68


$              3.65


$                5.73









Weighted average common shares







Basic

30,857


29,225


29,156


Diluted

32,835


32,562


32,468









Dividends declared per common share

$               0.96


$              0.86


$                0.81



(1)

In August 2018, the GBW Railcar Services joint venture was dissolved resulting in 12 repair locations returning to Greenbrier which are included in the Wheels, Repair & Parts segment.   


 

THE GREENBRIER COMPANIES, INC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)



Years Ended August 31,


2018


2017


2016

Cash flows from operating activities:






    Net earnings

$     172,063


$        160,462


$       284,824

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






      Deferred income taxes

(40,496)


4,377


(8,935)

      Depreciation and amortization

74,356


65,129


63,345

      Net gain on disposition of equipment

(44,369)


(9,740)


(15,796)

      Stock based compensation expense

29,314


26,427


24,037

      Accretion of debt discount

4,171


2,340


-

      Noncontrolling interest adjustments

2,864


(677)


526

      Other

1,688


(845)


560

      Decrease (increase) in assets:






          Accounts receivable, net

(83,551)


(25,272)


(32,051)

          Inventories

(26,592)


(2,787)


53,711

          Leased railcars for syndication

(54,023)


41,015


19,154

          Other

34,115


17,558


(16,989)

    Increase (decrease) in liabilities:






          Accounts payable and accrued liabilities

54,032


(25,422)


(85,928)

          Deferred revenue

(20,231)


33,039


50,712

    Net cash provided by operating activities

103,341


285,604


337,170

Cash flows from investing activities:






    Acquisitions, net of cash acquired

(34,874)


(27,127)


-

    Proceeds from sales of assets

153,224


24,149


103,715

    Capital expenditures

(176,848)


(86,065)


(139,013)

    Decrease (increase) in restricted cash

73


15,387


(15,410)

    Investment in and advances to unconsolidated affiliates

(26,455)


(40,632)


(12,855)

    Cash distribution from joint ventures

4,661


550


7,855

    Net cash used in investing activities

(80,219)


(113,738)


(55,708)

Cash flows from financing activities:






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

23,401


4,324


(49,000)

    Repayments of revolving notes with maturities longer than 90 days

-


-


(1,888)

    Proceeds from issuance of notes payable

13,771


276,093


-

    Repayments of notes payable

(22,269)


(8,297)


(22,299)

    Debt issuance costs

-


(9,082)


(4,161)

    Repurchase of stock

-


-


(33,498)

    Dividends

(29,914)


(24,890)


(23,303)

    Cash distribution to joint venture partner

(73,033)


(28,511)


(95,092)

    Investment by joint venture partner

6,500


-


5,400

    Tax payments for net share settlement of restricted stock

(7,723)


(5,215)


(5,500)

    Excess tax benefit from restricted stock awards

-


-


2,813

    Other

-


-


(887)

    Net cash provided by (used in) financing activities

(89,267)


204,422


(227,415)

    Effect of exchange rate changes

(14,666)


12,499


(4,298)

    (Decrease) increase in cash and cash equivalents

(80,811)


388,787


49,749

Cash and cash equivalents






Beginning of period

611,466


222,679


172,930

End of period

$     530,655


$       611,466


$       222,679







 

THE GREENBRIER COMPANIES, INC.


SUPPLEMENTAL INFORMATION

(In thousands, except per share amounts, unaudited)


Operating Results by Quarter for 2018 are as follows:



First


Second


Third


Fourth


Total













Revenue











   Manufacturing

$    451,485


$    511,827


$    510,099


$    571,175


$ 2,044,586


   Wheels, Repair & Parts (1)

78,011


88,710


94,515


85,787


347,023


   Leasing & Services

30,039


28,799


36,773


32,244


127,855



559,535


629,336


641,387


689,206


2,519,464


Cost of revenue











   Manufacturing

380,850


429,165


427,875


489,517


1,727,407


   Wheels, Repair & Parts (1)

72,506


80,708


85,850


79,266


318,330


   Leasing & Services

16,865


14,116


19,155


14,536


64,672



470,221


523,989


532,880


583,319


2,110,409













Margin

89,314


105,347


108,507


105,887


409,055













Selling and administrative expense

47,043


50,294


51,793


51,309


200,439


Net gain on disposition of equipment

(19,171)


(5,817)


(14,825)


(4,556)


(44,369)


Earnings from operations

61,442


60,870


71,539


59,134


252,985













Other costs











Interest and foreign exchange

7,020


7,029


6,533


8,786


29,368


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

54,422


53,841


65,006


50,348


223,617


Income tax benefit (expense)

(18,135)


11,301


(15,944)


(10,115)


(32,893)


Earnings before earnings (loss) from unconsolidated affiliates

36,287


65,142


49,062


40,233


190,724


Earnings (loss) from unconsolidated affiliates

(2,910)


147


(12,823)


(3,075)


(18,661)


Net earnings

33,377


65,289


36,239


37,158


172,063


Net earnings attributable to

noncontrolling interest

(7,124)


(3,647)


(3,288)


(6,223)


(20,282)


Net earnings attributable to Greenbrier

$       26,253


$       61,642


$      32,951


$      30,935


$    151,781













Basic earnings per common share (2)

$           0.90


$           2.10


$           1.03


$           0.95


$           4.92


Diluted earnings per common share (2)

$           0.83


$           1.91


$           1.01


$           0.94


$           4.68




(1)

In August 2018, the GBW Railcar Services joint venture was dissolved resulting in 12 repair locations returning to Greenbrier which are included in the Wheels, Repair & Parts segment.

(2)

Quarterly amounts do not total to the year to date amount as each period is calculated discretely. Diluted earnings per common share excludes the dilutive effect of the 2024 Convertible Notes, since the average stock price was less than the applicable conversion price and therefore was considered anti-dilutive, using the treasury stock method but includes restricted stock units that are not considered participating securities, restricted stock units that are subject to performance criteria, for which actual levels of performance above target have been achieved, and the dilutive effect of shares underlying the 2018 Convertible Notes using the "if converted" method, during the periods in which they were outstanding, in which debt issuance and interest costs, net of tax, were added back to net earnings.

 

THE GREENBRIER COMPANIES, INC.


SUPPLEMENTAL INFORMATION

(In thousands, except per share amounts, unaudited)


Operating Results by Quarter for 2017 are as follows:



First


Second


Third


Fourth


Total













Revenue











   Manufacturing

$    454,033


$    445,504


$    317,104


$    508,547


$ 1,725,188


   Wheels, Repair & Parts (1)

69,635


82,714


85,231


75,099


312,679


   Leasing & Services

28,646


38,064


36,826


27,761


131,297



552,314


566,282


439,161


611,407


2,169,164


Cost of revenue











   Manufacturing

356,555


346,653


245,228


425,531


1,373,967


   Wheels, Repair & Parts (1)

64,978


75,497


77,985


69,876


288,336


   Leasing & Services

18,030


25,207


26,247


16,078


85,562



439,563


447,357


349,460


511,485


1,747,865













Margin

112,751


118,925


89,701


99,922


421,299













Selling and administrative expense

41,213


39,495


42,810


47,089


170,607


Net gain on disposition of equipment

(1,122)


(2,090)


(1,581)


(4,947)


(9,740)


Earnings from operations

72,660


81,520


48,472


57,780


260,432













Other costs











Interest and foreign exchange

1,724


5,673


7,894


8,901


24,192


Earnings before income tax and loss from unconsolidated affiliates

70,936


75,847


40,578


48,879


236,240


Income tax expense

(20,386)


(24,858)


(8,656)


(10,114)


(64,014)


Earnings before loss from unconsolidated affiliates

50,550


50,989


31,922


38,765


172,226


Loss from unconsolidated affiliates

(2,584)


(1,988)


(681)


(6,511)


(11,764)


Net earnings

47,966


49,001


31,241


32,254


160,462


Net earnings attributable to noncontrolling interest

(23,004)


(14,465)


1,582


(8,508)


(44,395)


Net earnings attributable to Greenbrier

$       24,962


$       34,536


$      32,823


$      23,746


$    116,067













Basic earnings per common share (2)

$           0.86


$           1.19


$           1.12


$           0.81


$           3.97


Diluted earnings per common share (2)

$           0.79


$           1.09


$           1.03


$           0.75


$           3.65




(1)

In August 2018, the GBW Railcar Services joint venture was dissolved resulting in 12 repair locations returning to Greenbrier which are included in the Wheels, Repair & Parts segment.

(2)

Quarterly amounts do not total to the year to date amount as each period is calculated discretely. Diluted earnings per common share excludes the dilutive effect of the 2024 Convertible Notes, since the average stock price was less than the applicable conversion price and therefore was considered anti-dilutive, but includes restricted stock units that are subject to performance criteria, for which actual levels of performance above target have been achieved, using the treasury stock method when dilutive and the dilutive effect of shares underlying the 2018 Convertible Notes using the "if converted" method in which debt issuance and interest costs, net of tax, were added back to net earnings.


 

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

(In thousands, unaudited)


Segment Information


Three months ended August 31, 2018:










Revenue


Earnings (loss) from operations


External


Intersegment


  Total


External


Intersegment


Total

Manufacturing

$           571,175


$             33,904


$           605,079


$             62,312


$               3,905


$             66,217

Wheels, Repair & Parts (1)

85,787


13,931


99,718


3,648


534


4,182

Leasing & Services

32,244


1,992


34,236


17,473


1,750


19,223

Eliminations

-


(49,827)


(49,827)


-


(6,189)


(6,189)

Corporate

-


-


-


(24,299)


-


(24,299)


$           689,206


$                      -


$           689,206


$             59,134


$                       -


$             59,134










Three months ended May 31, 2018:










Revenue


Earnings (loss) from operations


External


Intersegment


  Total


External


Intersegment


Total

Manufacturing

$          510,099


$             53,501


$         563,600


$           62,435


6,215


$       68,650

Wheels, Repair & Parts (1)

94,515


10,879


105,394


5,546


686


6,232

Leasing & Services

36,773


3,886


40,659


26,704


3,380


30,084

Eliminations

-


(68,266)


(68,266)


-


(10,281)


(10,281)

Corporate

-


-


-


(23,146)


-


(23,146)


$           641,387


$                      -


$         641,387


$           71,539


$                       -


$       71,539





Total assets



August 31,


May 31,



2018


2018


Manufacturing

$        1,020,757


$           924,869


Wheels, Repair & Parts (1)

306,756


243,641


Leasing & Services

578,818


578,259


Unallocated

559,133


683,814



$        2,465,464


$        2,430,583




(1)

In August 2018, the GBW Railcar Services joint venture was dissolved resulting in 12 repair locations returning to Greenbrier which are included in the Wheels, Repair & Parts segment.

 

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,

2018


May 31,

2018


August 31,

2018

Net earnings

$               37,158


$               36,239


$              172,063

Interest and foreign exchange

8,786


6,533


29,368

Income tax expense

10,115


15,944


32,893

Depreciation and amortization

19,195


18,707


74,356

GBW goodwill impairment, net of tax

-


9,493


9,493

Adjusted EBITDA

$               75,254


$               86,916


$              318,173

 




Three Months
Ended

August 31,

2018


Year

Ended

August 31,
2018


Backlog Activity (units)







Beginning backlog

24,200


28,600


Orders received (1)

9,300


21,900


Production held as Leased railcars for syndication

(600)


(4,750)


Production sold directly to third parties (1)

(5,500)


(18,350)


Ending backlog

27,400


27,400







Delivery Information (units)





Production sold directly to third parties (1)

5,500


18,350


Sales of Leased railcars for syndication

500


2,550


Total deliveries

6,000


20,900



(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 and diluted earnings per share


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



Three Months Ended


Year Ended


August 31,

2018

May 31,

2018


August 31,
2018

Weighted average basic common shares outstanding (1)

32,663

32,034


30,857

Dilutive effect of convertible notes (2)

-

655


1,821

Dilutive effect of restricted stock units (3)

357

225


157

Weighted average diluted common shares outstanding

33,020

32,914


32,835


(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 2018 Convertible notes was included as they were considered dilutive under the "if converted" method as further discussed below. The 2018 Convertible notes matured April 1, 2018.

(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 shares outstanding when the Company is in a net earnings position.

Diluted EPS was calculated using the more dilutive of two approaches.  The first approach includes the dilutive effect, using the treasury stock method, associated with shares underlying the 2024 Convertible notes, restricted stock units that are not considered participating securities, and performance based restricted stock units that are subject to performance criteria, for which actual levels of performance above target have been achieved. The second approach supplements the first by including the "if converted" effect of the 2018 Convertible notes during the periods in which they were outstanding. Under the "if converted method" debt issuance and interest costs, both net of tax, associated with the convertible notes are added back to net earnings and the share count is increased by the shares underlying the convertible notes.  The 2024 Convertible notes are included in the calculation of both approaches when the average stock price is greater than the applicable conversion price.




Three Months Ended


       Year Ended





August 31,
2018


May 31,

2018


August 31,
2018


Net earnings attributable to Greenbrier

$               30,935


$               32,951


$              151,781


GBW goodwill impairment, net of tax

-


9,493


9,493


Non-recurring Tax Act benefit

(4,535)


-


(27,408)


Adjusted net earnings attributable to Greenbrier

$               26,400


$               42,444


$              133,866


 

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

(In thousands, except per share amounts, unaudited)


Reconciliation of common shares outstanding and diluted earnings per share (continued)



Three Months Ended


       Year Ended



August 31,

2018


May 31,

2018


August 31,
2018


Net earnings attributable to Greenbrier

$               30,935


$              32,951


$              151,781


Add back:







Interest and debt issuance costs on the 2018 Convertible notes, net of tax

-


297


2,031


Earnings before interest and debt issuance costs on convertible notes

$               30,935


$               33,248


$              153,812


Weighted average diluted common shares outstanding

33,020


32,914


32,835









Diluted earnings per share

$                   0.94


$                  1.01


$                    4.68


GBW goodwill impairment

-


0.29

(1)

0.29

(1)

Non-recurring Tax Act benefit

(0.14)

(2)

-


(0.84)

 (2)

Adjusted diluted earnings per share

$                   0.80


$                  1.30


$                     4.13

(3)



(1)

Non-cash GBW goodwill impairment of $9.5 million, net of tax, divided by weighted average diluted common shares outstanding for the relevant period.

(2)

Non-recurring net benefit of $4.5 million in Q4 and $27.4 million in 2018 related to the 2017 Tax Act.

(3)

Approximation due to rounding.

 

SOURCE The Greenbrier Companies, Inc. (GBX)