Greenbrier Reports Third Quarter Results

Date

Thu, Jun 29, 2017 06:00 AM

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LAKE OSWEGO, Ore., June 29, 2017 /PRNewswire/ -- The Greenbrier Companies, Inc. (NYSE: GBX) today reported financial results for its third fiscal quarter ended May 31, 2017.

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

Third Quarter Highlights

  • Net earnings attributable to Greenbrier for the quarter were $32.8 million, or $1.03 per diluted share, on revenue of $439.2 million.
  • Adjusted EBITDA for the quarter was $63.8 million, or 14.5% of revenue.
  • Finalized three major strategic transactions: formed Greenbrier-Astra Rail; executed railcar services and supply agreement with Mitsubishi UFJ Lease & Finance (MUL); and increased stake in Greenbrier-Maxion to 60% and Amsted-Maxion Cruzeiro to 24.5%.
  • Diversified orders for nearly 11,000 railcars were received during the quarter, valued at $1.01 billion, including 6,000 MUL units. Order activity excludes approximately 500 units from Greenbrier-Maxion (not consolidated) and Greenbrier-Astra Rail (formed June 1, 2017).  If included, total international order activity would be 1,000 units.
  • New railcar backlog as of May 31, 2017 was 31,000 units with an estimated value of $3.10 billion, compared to 22,600 units with an estimated value of $2.44 billion as of February 28, 2017. Backlog includes approximately 1,000 units related to the formation of Greenbrier-Astra Rail, but does not reflect backlog for Greenbrier-Maxion.  
  • New railcar deliveries totaled 2,600 units for the quarter, compared to 3,900 units for the quarter ended February 28, 2017.  The decline in deliveries is primarily due to the timing of railcar syndications as well as lower production rates for certain car types.
  • Board declared a quarterly dividend of $0.22 per share payable on August 8, 2017 to shareholders of record as of July 18, 2017.

William A. Furman, Chairman and CEO said, "Our two-part strategy is succeeding. Specifically, our strategy protects and grows our core North American businesses while we also expand internationally in promising regions for rail transportation. By adhering to this strategy, Greenbrier delivered strong third quarter results highlighted by favorable gross margins of 20% and orders for 11,000 railcars. This is a testament to our business flexibility and our team's ability to execute in more challenging markets for our products and services."

Furman continued, "We are encouraged by the strong order activity in our third quarter of 11,000 units, and especially in our North American and European markets. Excluding the 6,000 units from the MUL transaction, orders in these traditional markets totaled 5,000 units, the strongest level achieved in the past two years.  This total excludes orders received by Greenbrier-Maxion and Astra Rail for the trailing three months. Our backlog of 31,000 railcar units places Greenbrier on a strong footing as we approach fiscal 2018. Since the beginning of the year we have observed sustained and increasing railcar loadings across commodity types, as well as decreasing rail velocity.  Both are positive indicators for the near term demand environment."

Furman added, "While we see emerging improvements in North American and European rail markets, we still expect a challenging commercial environment into calendar 2018. This makes execution of our two-part strategy even more important in the upcoming fiscal year. Although unforeseen developments in our markets can always occur, we remain cautiously optimistic."

Furman concluded, "We will continue to forge new partnerships and expand on existing relationships like the transactions we finalized recently with MUL, Greenbrier-Maxion and Astra Rail. With manufacturing operations on three continents, solid railcar backlog, strong cash flows and a flexible balance sheet, Greenbrier continues to deliver long-term value for its shareholders."

Business Outlook

Based on current business trends and production schedules for fiscal 2017, Greenbrier refines provided guidance for:

  • New railcar deliveries to be approximately 15,000 – 16,000 units
  • Revenue of approximately $2.1$2.3 billion
  • Diluted EPS in the range of $3.45 to $3.65, excluding $0.17 per share of new convertible note interest expense

As noted in the "Safe Harbor" statement, there are risks to achieving this guidance.  Certain orders and backlog in this release are subject to customary documentation and completion of terms.

Financial Summary


Q3 FY17

Q2 FY17

Sequential Comparison – Main Drivers

Revenue

$439.2M

$566.3M

Down 22.4% due to timing of railcar syndications and lower deliveries reflecting lower production rates for certain car types

Gross margin

20.4%

21.0%

Down 60 bps due primarily to lower deliveries

Selling and

administrative expense

$42.8M

$39.5M

Up 8.4% primarily attributed to higher employee related costs including long-term incentive compensation

Gain on disposition

of equipment

$1.6M

$2.1M

Timing of sales fluctuates and is opportunistic

Adjusted EBITDA

$63.8M

$94.5M

Lower operating margin driven by lower deliveries

Interest and foreign

exchange

$7.9M

$5.7M

Up due to full quarter of interest expense related to new convertible debt

Effective tax rate

21.3%

32.8%

Reflects a change in the geographic mix of earnings, the effects of discrete items and cumulative adjustments due to slightly reduced expected annual rate of 28.8%

Loss from

unconsolidated affiliates

($0.7M)

($2.0M)

Continued challenging after-markets operating environment in North America partially offset by increased ownership in Brazilian operations

Net (earnings)

loss attributable to noncontrolling interest

$1.6M

($14.5M)

Timing of railcar syndications at our GIMSA JV and lower production rates for certain car types

Net earnings attributable

to Greenbrier

$32.8M

$34.5M


Diluted EPS

$1.03

$1.09


Segment Summary


Q3 FY17

Q2 FY17

Sequential Comparison – Main Drivers

Manufacturing

  Revenue

$317.1M

$445.5M

Down 28.8% primarily due to timing of railcar syndications and lower production rates for certain car types  

  Gross margin

22.7%

22.2%

Up 50 bps primarily due to change in product mix and strong operating efficiency

  Operating margin (1)

18.3%

19.2%


  Deliveries

2,600

3,900


Wheels & Parts

  Revenue

$85.2M

$82.7M

Up 3.0% primarily attributable to increased scrap revenue

  Gross margin

8.5%

8.7%

Down 20 bps primarily due to change in product mix

  Operating margin (1)

5.0%

6.7%


Leasing & Services

  Revenue

$36.8M

$38.1M

Down 3.4% primarily due to lower interim rent and externally sourced railcar syndications

  Gross margin

28.7%

33.8%

Down 510 bps primarily due to lower net interim rent

  Operating margin (1) (2)

19.2%

26.0%


Lease fleet utilization

93.6%

93.8%


(1)

See supplemental segment information on page 11 for additional information.

(2)

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

Conference Call

Greenbrier will host a teleconference to discuss its third quarter 2017 results. In conjunction with this news release, Greenbrier has posted a supplemental earnings presentation to our website.  Teleconference details are as follows:

  • June 29, 2017
  • 8:00 a.m. Pacific Daylight Time
  • Phone: 1-630-395-0143, Password: "Greenbrier"
  • Real-time Audio Access:  ("Newsroom" at http://www.gbrx.com)

Please access the site 10 minutes prior to the start time. 

About Greenbrier

Greenbrier (www.gbrx.com), headquartered in Lake Oswego, Oregon, is a leading international supplier of equipment and services to freight rail transportation markets. Greenbrier designs, builds and markets freight railcars in North America, Latin America and Europe.  We also build and market marine barges in North America.  We manufacture freight railcars in Brazil through a strategic partnership in which we hold a majority interest and produce rail castings through a separate Brazilian partnership. Greenbrier also has a majority stake in Greenbrier-Astra Rail, an end-to-end, Europe-based freight railcar manufacturing, engineering and repair business. Through our European manufacturing operations, we deliver U.S.-designed tank cars to Saudi Arabia. We are a leading provider of wheel services, parts, leasing and other services to the railroad and related transportation industries in North America and a supplier of freight railcar repair, refurbishment and retrofitting services in North America through a joint venture partnership with Watco Companies, LLC. Through other joint ventures, we produce rail castings, tank heads and other railcar components. Greenbrier owns a lease fleet of over 9,000 railcars and performs management services for 267,000 railcars.

"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 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, 2016 and Greenbrier's Quarterly Report on Form 10-Q for the fiscal quarter ended February 28, 2017, 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 is not a financial measure under generally accepted accounting principles (GAAP).   We define Adjusted EBITDA as Net earnings before Interest and foreign exchange, Income tax expense, Depreciation and amortization. Adjusted EBITDA is a performance measurement tool commonly used by rail supply companies and Greenbrier.  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 Adjusted EBITDA assists investors in understanding our underlying core operating performance and improves the period to period comparability.  You should not consider Adjusted EBITDA in isolation or as a substitute for other financial statement data determined in accordance with GAAP. In addition, because Adjusted EBITDA is not a measure of financial performance under GAAP and is susceptible to varying calculations, this measure presented may differ from and may not be comparable to similarly titled measures used by other companies.

THE GREENBRIER COMPANIES, INC.

Consolidated Balance Sheets

(In thousands, unaudited)



May 31,
2017

February 28,
2017

November 30,
2016

August 31,
2016

May 31,
2016

Assets






   Cash and cash equivalents

$    465,413

$    545,752

$    233,790

$    222,679

$       214,440

   Restricted cash

8,753

8,696

8,642

24,279

8,669

   Accounts receivable, net 

267,830

295,844

237,037

232,517

213,510

   Inventories

414,012

381,439

402,064

365,805

458,068

   Leased railcars for syndication

149,119

98,398

102,686

144,932

136,812

   Equipment on operating leases, net

315,976

298,269

305,586

306,266

232,791

   Property, plant and equipment, net

330,471

325,325

327,170

329,990

318,010

   Investment in unconsolidated affiliates

110,058

90,762

93,330

98,682

89,297

   Intangibles and other assets, net

68,930

68,228

63,780

67,359

68,648

   Goodwill

43,265

43,265

43,265

43,265

43,265


$ 2,173,827

$ 2,155,978

$ 1,817,350

$ 1,835,774

$    1,783,510







Liabilities and Equity






   Revolving notes

$                -

$                -

$                -

$                -

$                  -

   Accounts payable and accrued liabilities

339,001

372,321

345,776

369,754

370,652

   Deferred income taxes

80,482

65,589

54,123

51,619

50,390

   Deferred revenue

82,006

85,441

85,358

95,721

68,158

   Notes payable, net

532,638

532,596

300,331

301,853

304,434







   Total equity – Greenbrier

986,221

942,084

880,725

874,311

840,086

   Noncontrolling interest

153,479

157,947

151,037

142,516

149,790

   Total equity

1,139,700

1,100,031

1,031,762

1,016,827

989,876


$ 2,173,827

$ 2,155,978

$ 1,817,350

$ 1,835,774

$   1,783,510

 

THE GREENBRIER COMPANIES, INC.

Consolidated Statements of Income

(In thousands, except per share amounts, unaudited)



Three Months Ended

May 31,

Nine Months Ended

May 31,


2017


2016


2017


2016


Revenue









        Manufacturing

$           317,104


$           458,494


$   1,216,641


$   1,611,686


        Wheels & Parts

85,231


78,417


237,580


247,604


        Leasing & Services

36,826


75,955


103,536


225,044



439,161


612,866


1,557,757


2,084,334


Cost of revenue









        Manufacturing

245,228


352,775


948,436


1,247,635


        Wheels & Parts

77,985


69,818


218,460


224,208


        Leasing & Services

26,247


63,175


69,484


180,737



349,460


485,768


1,236,380


1,652,580











Margin

89,701


127,098


321,377


431,754











Selling and administrative expense

42,810


43,280


123,518


118,073


Net gain on disposition of equipment

(1,581)


(311)


(4,793)


(11,326)


Earnings from operations

48,472


84,129


202,652


325,007











Other costs









        Interest and foreign exchange

7,894


3,712


15,291


10,565


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

 

40,578


 

80,417


 

187,361


 

314,442


Income tax expense

(8,656)


(22,449)


(53,900)


(92,902)


Earnings before earnings (loss) from unconsolidated affiliates

 

31,922


 

57,968


 

133,461


 

221,540


Earnings (loss) from unconsolidated affiliates

(681)


1,564


(5,253)


2,921











Net earnings

31,241


59,532


128,208


224,461


Net (earnings) loss attributable to noncontrolling interest

1,582


(24,180)


(35,887)


(74,808)











Net earnings attributable to Greenbrier

$            32,823


$           35,352


$        92,321


$      149,653











Basic earnings per common share:

$                1.12


$               1.22


$            3.16


$            5.13











Diluted earnings per common share:

$                1.03


$               1.12


$            2.91


$            4.67











Weighted average common shares:









        Basic

29,348


29,059


29,192


29,182


        Diluted

32,690


32,342


32,515


32,475











Dividends declared per common share:

$                0.22


$              0.20


$            0.64


$            0.60


               

THE GREENBRIER COMPANIES, INC.

Consolidated Statements of Cash Flows

(In thousands, unaudited) 




Nine Months Ended

May 31,



2017


2016


Cash flows from operating activities:






    Net earnings


$             128,208


$           224,461


    Adjustments to reconcile net earnings to net cash provided by

      operating activities:






      Deferred income taxes


16,815


(10,143)


      Depreciation and amortization


46,616


41,681


      Net gain on disposition of equipment


(4,793)


(11,326)


      Accretion of debt discount


1,329


-


     Stock based compensation expense


19,007


19,055


     Noncontrolling interest adjustments


1,203


837


      Other


1,017


564


      (Increase) decrease in assets:






          Accounts receivable, net


(27,109)


(14,333)


          Inventories


(47,209)


(15,346)


          Leased railcars for syndication


(16,122)


28,823


          Other


8,419


(5,191)


      Increase (decrease) in liabilities:






          Accounts payable and accrued liabilities


(41,008)


(88,707)


          Deferred revenue


(13,650)


24,303


    Net cash provided by operating activities


72,723


194,678


Cash flows from investing activities:






    Proceeds from sales of assets


20,344


88,707


    Capital expenditures


(53,848)


(51,707)


    Decrease in restricted cash


15,526


200


    Investment in and advances to unconsolidated affiliates


(34,068)


(9,088)


    Cash distribution from unconsolidated affiliates


550


5,338


    Net cash provided by (used in) investing activities


(51,496)


33,450


Cash flows from financing activities:






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


-


(49,000)


   Proceeds from revolving notes with maturities longer than 90 days


-


-


   Repayments of revolving notes with maturities longer than 90 days


-


(1,888)


    Proceeds from issuance of notes payable


275,000


-


    Repayments of notes payable


(5,469)


(19,461)


   Debt issuance costs


(9,082)


(4,160)


    Repurchase of stock


-


(33,498)


    Dividends


(18,619)


(17,362)


   Cash distribution to joint venture partner


(27,267)


(62,710)


    Investment by joint venture partner


-


5,400


   Excess tax benefit (deficiency) from restricted stock awards


(2,396)


2,786


    Other


-


(7)


   Net cash provided by (used in) financing activities


212,167


(179,900)


Effect of exchange rate changes


9,340


(6,718)


Increase in cash and cash equivalents


242,734


41,510


Cash and cash equivalents






    Beginning of period


222,679


172,930


    End of period


$             465,413


$           214,440


 

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


Total











Revenue









   Manufacturing

$          454,033


$       445,504


$        317,104


$       1,216,641


   Wheels & Parts

69,635


82,714


85,231


237,580


   Leasing & Services

28,646


38,064


36,826


103,536



552,314


566,282


439,161


1,557,757


Cost of revenue









   Manufacturing

356,555


346,653


245,228


948,436


   Wheels & Parts

64,978


75,497


77,985


218,460


   Leasing & Services

18,030


25,207


26,247


69,484



439,563


447,357


349,460


1,236,380











Margin

112,751


118,925


89,701


321,377











Selling and administrative expense

41,213


39,495


42,810


123,518


Net gain on disposition of equipment

(1,122)


(2,090)


(1,581)


(4,793)


Earnings from operations

72,660


81,520


48,472


202,652











Other costs









   Interest and foreign exchange

1,724


5,673


7,894


15,291


Earnings before income tax and loss from unconsolidated affiliates          

 

70,936


 

75,847


 

40,578


 

187,361


Income tax expense

(20,386)


(24,858)


(8,656)


(53,900)


Earnings before loss from unconsolidated affiliates

 

50,550


 

50,989


 

31,922


 

133,461


Loss from unconsolidated affiliates

(2,584)


(1,988)


(681)


(5,253)


Net earnings

47,966


49,001


31,241


128,208


Net (earnings) loss attributable to noncontrolling interest

 

(23,004)


 

(14,465)


 

1,582


 

(35,887)


Net earnings attributable to Greenbrier

$             24,962


$        34,536


$           32,823


$            92,321











Basic earnings per common share (1)

$                 0.86


$            1.19


$              1.12


$                3.16


Diluted earnings per common share (1)

$                 0.79


$            1.09


$              1.03


$                2.91




(1)

Quarterly amounts may 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, except per share amounts, unaudited)




Operating Results by Quarter for 2016 are as follows:



First


Second


Third


Fourth


Total













Revenue











   Manufacturing

$        698,661


$      454,531


$      458,494


$     484,645


$  2,096,331


   Wheels & Parts

78,729


90,458


78,417


74,791


322,395


   Leasing & Services

24,999


124,090


75,955


35,754


260,798



802,389


669,079


612,866


595,190


2,679,524


Cost of revenue











   Manufacturing

533,033


361,827


352,775


382,919


1,630,554


   Wheels & Parts

73,002


81,388


69,818


69,543


293,751


   Leasing & Services

11,589


105,973


63,175


23,045


203,782



617,624


549,188


485,768


475,507


2,128,087













Margin

184,765


119,891


127,098


119,683


551,437













Selling and administrative expense

36,549


38,244


43,280


40,608


158,681


Net gain on disposition of equipment

(269)


(10,746)


(311)


(4,470)


(15,796)


Earnings from operations

148,485


92,393


84,129


83,545


408,552













Other costs











   Interest and foreign exchange

5,436


1,417


3,712


2,937


13,502


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

 

143,049


 

90,976


 

80,417


 

80,608


 

395,050


Income tax expense

(44,719)


(25,734)


(22,449)


(19,420)


(112,322)


Earnings before earnings (loss) from unconsolidated affiliates          

 

98,330


 

65,242


 

57,968


 

61,188


 

282,728


Earnings (loss) from unconsolidated affiliates

383


974


1,564


(825)


2,096


Net earnings

98,713


66,216


59,532


60,363


284,824


Net earnings attributable to noncontrolling interest

 

(29,280)


 

(21,348)


 

(24,180)


 

(26,803)


 

(101,611)


Net earnings attributable to Greenbrier

$        69,433


$         44,868


$        35,352


$      33,560


$     183,213













Basic earnings per common share (1)

$             2.36


$             1.54


$            1.22


$          1.15


$           6.28


Diluted earnings per common share (1)

$             2.15


$             1.41


$            1.12


$          1.06


$           5.73




(1)

Quarterly amounts may not total to the year to date amount as each period is calculated discretely. Diluted earnings per common share includes the dilutive effect of the 2026 Convertible Notes and 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 May 31, 2017:



Revenue


Earnings (loss) from operations



External


Intersegment


  Total


External


Intersegment


Total


Manufacturing

$          317,104


$             19,291


$         336,395


$           57,901


$               1,022


$      58,923


Wheels & Parts

85,231


8,959


94,190


4,239


839


5,078


Leasing & Services

36,826


595


37,421


7,084


427


7,511


Eliminations

-


(28,845)


(28,845)


-


(2,288)


(2,288)


Corporate

-


-


-


(20,752)


-


(20,752)



$           439,161


$                      -


$         439,161


$           48,472


$                       -


$       48,472




Three months ended February 28, 2017:



Revenue


Earnings (loss) from operations



External


Intersegment


  Total


External


Intersegment


Total


Manufacturing

$           445,504


$                       -


$         445,504


$           85,369


$                       -


$       85,369


Wheels & Parts

82,714


7,233


89,947


5,569


512


6,081


Leasing & Services

38,064


2,112


40,176


9,889


1,924


11,813


Eliminations

-


(9,345)


(9,345)


-


(2,436)


(2,436)


Corporate

-


-


-


(19,307)


-


(19,307)



$           566,282


$                       -


$         566,282


$           81,520


$                       -


$       81,520





Total assets



May 31,


February 28,



2017


2017


Manufacturing

$              705,229


$           724,209


Wheels & Parts

264,308


280,207


Leasing & Services

625,569


505,897


Unallocated

578,721


645,665



$           2,173,827


$         2,155,978


The results of operations for GBW, which are shown below, are not reflected in the above tables as the investment is accounted for under the equity method of accounting.


As of and for the
Three Months Ended     



May 31,
2017  


February 28, 
2017  


Revenue

$                  62,700


$                64,200


Loss from operations

$                   (5,500)


$                (6,900)


Total assets

$                218,800


$              227,200


 

THE GREENBRIER COMPANIES, INC.


Supplemental Information


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




Reconciliation of Net earnings to Adjusted EBITDA





Three Months Ended






May 31,
2017


 February 28,
2017



Net earnings

$             31,241


$             49,001



Interest and foreign exchange

7,894


5,673



Income tax expense

8,656


24,858



Depreciation and amortization

16,036


14,985











Adjusted EBITDA

$               63,827


$            94,517













Three Months
Ended
May 31, 2017



Backlog Activity (units)




Beginning backlog

22,600



Orders received

11,000



Astra Rail (1)

1,000



Production held as Leased railcars for syndication

(1,200)



Production sold directly to third parties

(2,400)



Ending backlog

31,000







Delivery Information (units)




Production sold directly to third parties

2,400



Sales of Leased railcars for syndication

200



Total deliveries

2,600





(1)

Backlog added as of June 1, 2017.


 

THE GREENBRIER COMPANIES, INC.

Supplemental Information

(In thousands, except per share amounts, unaudited)


Reconciliation of common shares outstanding and diluted earnings per share


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



Three Months Ended


May 31,

2017

February 28,

2017

Weighted average basic common shares outstanding (1)

29,348

29,130

Dilutive effect of convertible notes (2)

3,305

3,287

Dilutive effect of performance awards (3)

37

10

Weighted average diluted common shares outstanding

32,690

32,427






(1)

Restricted stock grants and restricted stock units, including some grants subject to certain performance criteria, are included in weighted average basic common shares outstanding when the Company is in a net earnings position.



(2)

The dilutive effect of the 2018 Convertible notes are included in the Weighted average diluted common shares outstanding as they were considered dilutive under the "if converted" method as further discussed below.



(3)

Restricted stock units subject to performance criteria, for which actual levels of performance above target have been achieved, and are included in Weighted average diluted shares outstanding when the company is in a net earnings position.




Diluted earnings per share 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 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 issued in March 2011. Under the "if converted method" debt issuance and interest costs, both net of tax, associated with the convertible notes are added back to net earnings and the share count is increased by the shares underlying the convertible notes.




Three Months Ended


May 31,

2017

February 28,

2017

Net earnings attributable to Greenbrier

$           32,823

$          34,536

Add back:



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

 

733

 

733

Earnings before interest and debt issuance costs on convertible notes

 

$           33,556

 

$          35,269

 

Weighted average diluted common shares outstanding

 

32,690

 

32,427




Diluted earnings per share

$               1.03

$              1.09

 

SOURCE The Greenbrier Companies, Inc. (GBX)