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Greenbrier Reports Third Quarter Results

Date

Tue, Jul 2, 2019 06:00 AM

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~ Announces orders of 6,500 railcars valued at $730 million
~~ Record quarterly revenue exceeding $850 million
~~ Core North American operations continue to build momentum
~~ Pending ARI acquisition brings product & geographic diversification and greater scale

LAKE OSWEGO, Ore., July 2, 2019 /PRNewswire/ -- The Greenbrier Companies, Inc. (NYSE: GBX) today reported financial results for its third fiscal quarter ended May 31, 2019.

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

Third Quarter Highlights

  • Net earnings attributable to Greenbrier for the quarter were $15.2 million, or $0.46 per diluted share, on revenue of $856.2 million. Quarterly results include a $10.0 million ($0.30 per share) non-cash goodwill impairment charge in the railcar repair operation and $4.3 million, net of tax, ($0.13 per share) of American Railcar Industries (ARI) acquisition costs.
  • Adjusted net earnings attributable to Greenbrier were $29.6 million ($0.89 per diluted share) excluding the goodwill impairment and ARI acquisition costs.
  • Adjusted EBITDA for the quarter was $84.4 million, or 9.9% of revenue.
  • Orders for 6,500 diversified railcars were received during the quarter, valued at $730 million. Book-to-bill ratio was 1.0x.
  • New railcar backlog as of May 31, 2019 was 26,100 units with an estimated value of $2.74 billion.
  • New railcar deliveries totaled 6,500 units for the quarter.
  • Board declares quarterly dividend of $0.25 per share, payable on August 8, 2019 to shareholders as of July 18, 2019.
  • Acquisition of the manufacturing assets of ARI remains subject to regulatory review and approval.

William A. Furman, Chairman and CEO, said, "Greenbrier gained the momentum we expected during the quarter, led by improved operating efficiencies in our core North American manufacturing business.  Greenbrier's current and expected performance is consistent with our prior comments that revenue and margin would be back-half weighted this fiscal year.  These gains were muted in our overall financial results due to continued weakness in Greenbrier's railcar repair business and certain international operations, along with costs associated with the ARI acquisition."

Furman continued, "Despite certain legacy headwinds and the management attention required on a major acquisition in the quarter, we are pleased with our improved core operating performance. We anticipate further strong momentum in the fourth quarter.  Realignment of our railcar repair network is expected to be completed by the end of the year, which will help earnings performance in the Wheels, Repair & Parts segment.  In Brazil, the long-delayed rail concession renewal process negatively affected the operations of our joint venture, resulting in a loss this quarter.  Greenbrier's Brazil operations are being right-sized for the current demand environment before order activity ramps up as expected in 2020 and over the coming years.  Meanwhile, pricing and manufacturing performance in Europe responded more slowly than expected, but is now kicking in. Headwinds from Europe and Brazil are expected to turn to tailwinds in Q4 and beyond, along with other international performance contributions."

Furman concluded, "The Company is performing well in a choppy global freight railcar market.  Greenbrier received orders for approximately 6,500 new railcars valued at $730 million in the quarter. These orders span a range of railcar types from a diverse set of customers.  Greenbrier's backlog of 26,100 units valued at $2.7 billion provides strong visibility and cash flow into fiscal 2020. Greenbrier's four-part strategy remains unchanged: reinforcing our core North American markets, executing on our international strategy, developing a robust talent pipeline, and growing the business on a larger scale. The strategy and Greenbrier's integrated business model work in parallel to support our success over time, especially with the acquisition of ARI, which will allow a larger, more diversified product and geographic mix in North America."

Fiscal Q4 2019 Outlook

Based on current business trends, Greenbrier believes for the fourth quarter:

  • Deliveries will be 7,000 – 8,000 units including Greenbrier-Maxion (Brazil) (which will account for approximately 100 – 200 units).
  • Revenue will be nearly $1.0 billion.
  • Diluted EPS will be $1.30 – 1.50 excluding any ARI acquisition costs or operational benefits.

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 FY19

Q2 FY19

Sequential Comparison – Main Drivers

Revenue

$856.2M

$658.7M

Up 30% due to increased delivery volumes

Gross margin

12.4%

8.2%

Primarily improved manufacturing efficiency

Selling and

administrative expense

$54.4M

$47.9M

Includes $5.8 million of ARI acquisition expenses

Adjusted EBITDA

$84.4M

$37.4M

Increased operating earnings; see reconciliation on page 12

Effective tax rate

30.0%

25.5%

Higher quarterly rate driven by goodwill impairment with no tax benefit; excluding goodwill, the rate would have been ~25% 

Loss from

unconsolidated affiliates

$4.6M

$0.8M

Decline primarily driven by negative performance in Brazil due to low delivery volume

Net earnings attributable

to noncontrolling interest

$10.6M

$3.0M

Increased deliveries and improved mix at GIMSA JV

Adjusted net earnings attributable to Greenbrier

$29.6M(1)

$2.8M

Increased operating earnings reflecting higher delivery volumes and manufacturing gross margin

Adjusted diluted EPS

$0.89(1)

$0.08

 
   

(1)  

Excludes $10.0 million ($0.30 per share) non-cash impact associated with a goodwill impairment charge and $4.3 million ($0.13 per share), net of tax, expense associated with ARI acquisition costs.

Segment Summary

 

Q3 FY19

Q2 FY19

Sequential Comparison – Main Drivers

Manufacturing

  Revenue

$681.6M

$476.0M

43% increase driven by 44% increase in deliveries

  Gross margin

13.3%

6.9%

Improved efficiency and product mix

  Operating margin (1)

10.6%

2.9%

 

  Deliveries (2)

6,500

4,500

Higher production levels and syndication activity

Wheels, Repair & Parts

  Revenue

$125.0M

$125.3M

Continued seasonally strong volumes

  Gross margin

4.1%

5.4%

Continued operating challenges in railcar repair operations

  Operating margin (1)

(7.1%)

2.3%

Includes $10.0 million, non-cash goodwill impairment

Leasing & Services

  Revenue

$49.6M

$57.4M

Less secondary market syndication activity

  Gross margin

21.4%

24.4%

Decline primarily reflects increased transportation costs and less interim rent on certain railcars

  Operating margin (1) (3)

30.9%

36.7%

Lower gross margin and modestly lower level of gains on disposition of equipment

   

(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 third quarter 2019 results. In conjunction with this news release, Greenbrier has posted a supplemental earnings presentation to our website. 
Teleconference details are as follows:

  • July 2, 2019
  • 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 8,900 railcars and performs management services for 374,000 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 "affirms," "anticipates," "believes," "forecast," "potential," "goal," "contemplates," "expects," "intends," "plans," "projects," "hopes," "seeks," "estimates," "strategy," "could," "would," "should," "likely," "will," "may," "can," "designed to," "future," "foreseeable future" and similar expressions to identify forward-looking statements. These forward-looking statements 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, 2018, Greenbrier's Quarterly Report on Form 10-Q for the fiscal quarter ended February 28, 2019, 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, Adjusted diluted EPS and Diluted earnings per share range excluding ARI acquisition costs are not financial measures under generally accepted accounting principles (GAAP). These metrics are performance measurement tools used by rail supply companies and Greenbrier. You should not consider these metrics in isolation or as a substitute for other financial statement data determined in accordance with GAAP. In addition, because these metrics are not a measure of financial performance under GAAP and are susceptible to varying calculations, the measures presented may differ from and may not be comparable to similarly titled measures used by other companies.

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

Adjusted net earnings attributable to Greenbrier and Adjusted diluted EPS excludes the impact associated with items we do not believe are indicative of our core business or which affect comparability. Diluted earnings per share range excluding ARI acquisition costs exclude ARI acquisition costs. We believe these assist in comparing our performance across reporting periods.

THE GREENBRIER COMPANIES, INC.

Consolidated Balance Sheets

(In thousands, unaudited)

 
 

May 31,

2019

February 28,

2019

November 30,

2018

August 31,

2018

May 31,

2018

Assets

         

   Cash and cash equivalents

$       359,625

$       341,500

$      462,797

$      530,655

$      589,969

   Restricted cash

21,471

21,584

8,872

8,819

9,204

   Accounts receivable, net 

330,385

335,732

306,917

348,406

322,328

   Inventories

592,099

574,146

492,573

432,314

396,518

   Leased railcars for syndication

130,489

163,472

233,415

130,926

158,194

   Equipment on operating leases, net

376,241

381,336

317,282

322,855

302,074

   Property, plant and equipment, net

478,502

472,739

461,120

457,196

424,035

   Investment in unconsolidated affiliates

53,036

58,685

58,682

61,414

75,884

   Intangibles and other assets, net

97,022

101,284

95,958

94,668

82,030

   Goodwill

74,318

82,743

77,508

78,211

70,347

 

$   2,513,188

$   2,533,221

$   2,515,124

$   2,465,464

$  2,430,583

           

Liabilities and Equity

         

   Revolving notes

$        25,952

$        22,323

$        22,189

$        27,725

$       20,337

   Accounts payable and accrued liabilities

473,106

474,863

438,304

449,857

447,827

   Deferred income taxes

12,089

29,481

30,631

31,740

36,657

   Deferred revenue

76,170

91,533

108,566

105,954

102,919

   Notes payable, net

483,918

486,107

487,764

436,205

437,833

           

Contingently redeemable noncontrolling interest

24,722

25,637

28,449

29,768

31,135

           

   Total equity - Greenbrier

1,262,315

1,257,818

1,257,631

1,250,101

1,225,512

   Noncontrolling interest

154,916

145,459

141,590

134,114

128,363

   Total equity

1,417,231

1,403,277

1,399,221

1,384,215

1,353,875

 

$   2,513,188

$   2,533,221

$   2,515,124

$   2,465,464

$  2,430,583

 

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,

 

2019

 

2018

 

2019

 

2018

Revenue

               

        Manufacturing

$        681,588

 

$       510,099

 

$      1,629,396

 

$       1,473,411

 

        Wheels, Repair & Parts

124,980

 

94,515

 

358,801

 

261,236

 

        Leasing & Services

49,584

 

36,773

 

131,149

 

95,611

 
 

856,152

 

641,387

 

2,119,346

 

1,830,258

 

Cost of revenue

               

        Manufacturing

590,788

 

427,875

 

1,451,589

 

1,237,890

 

        Wheels, Repair & Parts

119,821

 

85,850

 

339,254

 

239,064

 

        Leasing & Services

38,971

 

19,155

 

95,554

 

50,136

 
 

749,580

 

532,880

 

1,886,397

 

1,527,090

 
                 

Margin

106,572

 

108,507

 

232,949

 

303,168

 
                 

Selling and administrative expense

54,377

 

51,793

 

152,701

 

149,130

 

Net gain on disposition of equipment

(11,019)

 

(14,825)

 

(37,474)

 

(39,813)

 

Goodwill impairment

10,025

 

-

 

10,025

 

-

 

Earnings from operations

53,189

 

71,539

 

107,697

 

193,851

 
                 

Other costs

               

Interest and foreign exchange

9,770

 

6,533

 

23,411

 

20,582

 

Earnings before income taxes and loss from unconsolidated affiliates

43,419

 

65,006

 

84,286

 

173,269

 

Income tax expense

(13,008)

 

(15,944)

 

(24,391)

 

(22,778)

 

Earnings before loss from unconsolidated affiliates

30,411

 

49,062

 

59,895

 

150,491

 

Loss from unconsolidated affiliates

(4,564)

 

(12,823)

 

(4,883)

 

(15,586)

 

Net earnings

25,847

 

36,239

 

55,012

 

134,905

 

Net earnings attributable to noncontrolling interest

(10,599)

 

(3,288)

 

(19,043)

 

(14,059)

 

Net earnings attributable to Greenbrier

$          15,248

 

$        32,951

 

$          35,969

 

$         120,846

 
                 

Basic earnings per common share:

$              0.47

 

$            1.03

 

$              1.10

 

$               3.99

 
                 

Diluted earnings per common share:

$              0.46

 

$            1.01

 

$              1.08

 

$               3.75

 
                 

Weighted average common shares:

               

Basic

32,603

 

32,034

 

32,623

 

30,250

 

Diluted

33,183

 

32,914

 

33,161

 

32,774

 
                 

Dividends declared per common share

$              0.25

 

$           0.25

 

$             0.75

 

$               0.71

 

 

THE GREENBRIER COMPANIES, INC.

Consolidated Statements of Cash Flows

(In thousands, unaudited) 

 
   

 Nine Months Ended

   

May 31,

   

2019

2018

Cash flows from operating activities

         

    Net earnings

 

$

55,012

$

134,905

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

         

      Deferred income taxes

   

(20,478)

 

(38,825)

      Depreciation and amortization

   

60,833

 

55,161

      Net gain on disposition of equipment

   

(37,474)

 

(39,813)

      Accretion of debt discount

   

3,268

 

3,109

      Stock based compensation expense

   

10,792

 

20,311

      Goodwill impairment

   

10,025

 

-

     Noncontrolling interest adjustments

   

7,322

 

1,067

      Other

   

1,916

 

1,345

      Decrease (increase) in assets:

         

          Accounts receivable, net

   

27,926

 

(24,980)

          Inventories

   

(169,813)

 

(4,270)

          Leased railcars for syndication

   

(43,796)

 

(69,994)

          Other

   

(2,525)

 

30,549

      Increase (decrease) in liabilities:

         

          Accounts payable and accrued liabilities

   

30,581

 

34,898

          Deferred revenue

   

(27,712)

 

(23,837)

    Net cash provided by (used in) operating activities

   

(94,123)

 

79,626

Cash flows from investing activities

         

    Proceeds from sales of assets

   

100,730

 

129,828

    Capital expenditures

   

(149,945)

 

(118,656)

    Investment in and advances to unconsolidated affiliates

   

(11,393)

 

(21,455)

    Cash distribution from unconsolidated affiliates

   

1,986

 

3,941

    Net cash used in investing activities

   

(58,622)

 

(6,342)

Cash flows from financing activities

         

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

   

(1,882)

 

16,013

    Proceeds from issuance of notes payable

   

225,000

 

13,749

    Repayments of notes payable

   

(179,803)

 

(19,274)

    Debt issuance costs

   

(2,974)

 

-

    Investment by joint venture partner

   

-

 

6,500

    Dividends

   

(25,072)

 

(21,866)

    Cash distribution to joint venture partner

   

(11,715)

 

(69,413)

    Tax payments for net share settlement of restricted stock

   

(6,321)

 

(7,716)

    Net cash used in financing activities

   

(2,767)

 

(82,007)

Effect of exchange rate changes

   

(2,866)

 

(12,462)

Decrease in cash, cash equivalents and restricted cash

   

(158,378)

 

(21,185)

Cash and cash equivalents and restricted cash

         

    Beginning of period

   

539,474

 

620,358

    End of period

 

$

381,096

$

599,173

Balance Sheet Reconciliation

         

    Cash and cash equivalents

 

$

359,625

$

589,969

    Restricted cash

   

21,471

 

9,204

    Total cash and cash equivalents and restricted cash as presented above

 

$

381,096

$

599,173

 

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

 

Total

 
                 

Revenue

               

   Manufacturing

$        471,789

 

$       476,019

 

$       681,588

 

$          1,629,396

 

   Wheels, Repair & Parts

108,543

 

125,278

 

124,980

 

358,801

 

   Leasing & Services

24,191

 

57,374

 

49,584

 

131,149

 
 

604,523

 

658,671

 

856,152

 

2,119,346

 

Cost of revenue

               

   Manufacturing

417,805

 

442,996

 

590,788

 

1,451,589

 

   Wheels, Repair & Parts

100,978

 

118,455

 

119,821

 

339,254

 

   Leasing & Services

13,207

 

43,376

 

38,971

 

95,554

 
 

531,990

 

604,827

 

749,580

 

1,886,397

 
                 

Margin

72,533

 

53,844

 

106,572

 

232,949

 
                 

Selling and administrative expense

50,432

 

47,892

 

54,377

 

152,701

 

Net gain on disposition of equipment

(14,353)

 

(12,102)

 

(11,019)

 

(37,474)

 

Goodwill impairment

-

 

-

 

10,025

 

10,025

 

Earnings from operations

36,454

 

18,054

 

53,189

 

107,697

 
                 

Other costs

               

Interest and foreign exchange

4,404

 

9,237

 

9,770

 

23,411

 

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

32,050

 

8,817

 

43,419

 

84,286

 

Income tax expense

(9,135)

 

(2,248)

 

(13,008)

 

(24,391)

 

Earnings before earnings (loss) from unconsolidated affiliates

22,915

 

6,569

 

30,411

 

59,895

 

Earnings (loss) from unconsolidated affiliates

467

 

(786)

 

(4,564)

 

(4,883)

 

Net earnings

23,382

 

5,783

 

25,847

 

55,012

 

Net earnings attributable to noncontrolling interest

(5,426)

 

(3,018)

 

(10,599)

 

(19,043)

 

Net earnings attributable to Greenbrier

$        17,956

 

$          2,765

 

$         15,248

 

$              35,969

 
                 

Basic earnings per common share (1)

$               0.55

 

$            0.08

 

$             0.47

 

$                   1.10

 

Diluted earnings per common share (1) 

$               0.54

 

$            0.08

 

$             0.46

 

$                  1.08

 
   

(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 not considered participating securities and restricted stock units that are subject to performance criteria, for which actual levels of performance above target have been achieved, when dilutive.

 

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

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

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 (1)

$              0.90

 

$            2.10

 

$            1.03

 

$              0.95

 

$           4.92

Diluted earnings per common share (1) 

$              0.83

 

$            1.91

 

$            1.01

 

$              0.94

 

$           4.68

   

(1)  

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 not considered participating securities and restricted stock units that are subject to performance criteria, for which actual levels of performance above target have been achieved, 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 2018 Convertible Notes matured on April 1, 2018.

 

 

THE GREENBRIER COMPANIES, INC.

 

Supplemental Information

 (In thousands, unaudited)

 
   

Segment Information

 
   

Three months ended May 31, 2019:

                 
 

Revenue

 

Earnings (loss) from operations

 
 

External

 

Intersegment

 

  Total

 

External

 

Intersegment

 

Total

 

Manufacturing

$           681,588

 

$             29,201

 

$         710,789

 

$           72,110

 

$               2,000

 

$       74,110

 

Wheels, Repair & Parts

124,980

 

11,601

 

136,581

 

(8,820)

 

808

 

(8,012)

 

Leasing & Services

49,584

 

5,848

 

55,432

 

15,337

 

4,913

 

20,250

 

Eliminations

-

 

(46,650)

 

(46,650)

 

-

 

(7,721)

 

(7,721)

 

Corporate

-

 

-

 

-

 

(25,438)

 

-

 

(25,438)

 
 

$           856,152

 

$                      -

 

$         856,152

 

$           53,189

 

$                      -

 

$      53,189

 
                   

Three months ended February 28, 2019:

                 
                   
 

Revenue

 

Earnings (loss) from operations

 
 

External

 

Intersegment

 

  Total

 

External

 

Intersegment

 

Total

 

Manufacturing

$           476,019

 

$             46,855

 

$         522,874

 

$           13,990

 

$               2,358

 

$       16,348

 

Wheels, Repair & Parts

125,278

 

8,858

 

134,136

 

2,823

 

(858)

 

1,965

 

Leasing & Services

57,374

 

2,911

 

60,285

 

21,030

 

2,101

 

23,131

 

Eliminations

-

 

(58,624)

 

(58,624)

 

-

 

(3,601)

 

(3,601)

 

Corporate

-

 

-

 

-

 

(19,789)

 

-

 

(19,789)

 
 

$           658,671

 

$                      -

 

$         658,671

 

$           18,054

 

$                      -

 

$      18,054

 
                 
                 
 

Total assets

                 
 

   May 31,
2019

 

February 28,
2019

                 

Manufacturing

$         1,143,718

 

$       1,093,593

                 

Wheels, Repair & Parts

307,630

 

341,317

                 

Leasing & Services

650,483

 

704,016

                 

Unallocated

411,357

 

394,295

                 
 

$         2,513,188

 

$       2,533,221

                 

 

                 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,

2019

 

February 28,

2019

Net earnings

$

25,847

 

$

5,783

Interest and foreign exchange

 

9,770

   

9,237

Income tax expense

 

13,008

   

2,248

Depreciation and amortization

 

20,018

   

20,115

Goodwill impairment

 

10,025

   

-

ARI acquisition costs

 

5,761

   

-

Adjusted EBITDA

$

84,429

 

$

37,383

 

 

 

Three Months
Ended

May 31, 2019

Backlog Activity (units) (1)

 

Beginning backlog

26,000

Orders received

6,500

Production held as Leased railcars for syndication

(1,400)

Production sold directly to third parties

(5,000)

Ending backlog

26,100

   

Delivery Information (units) (1)

 

Production sold directly to third parties

5,000

Sales of Leased railcars for syndication

1,500

Total deliveries

6,500

   

(1) 

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

 

 

THE GREENBRIER COMPANIES, INC.

Supplemental Information

 (In thousands, except per share amounts, unaudited)

 

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

 

May 31,
2019

February 28,
2019

Weighted average basic common shares outstanding (1)

32,603

32,628

Dilutive effect of convertible notes (2)

-

-

Dilutive effect of performance awards (3)

580

578

Weighted average diluted common shares outstanding

33,183

33,206

     

(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 2024 Convertible notes was excluded for the three months ended May 31, 2019 and February 28, 2019 as the average stock price was less than the applicable conversion price and therefore was considered 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 shares outstanding when the Company is in a net earnings position.

 

 

Three Months Ended

 

        May 31,
           2019

 

February 28,

2019

Net earnings attributable to Greenbrier

$                 15,248

 

$             2,765

Goodwill impairment

10,025

 

-

ARI acquisition costs, net of tax

4,285

 

-

Adjusted net earnings attributable to Greenbrier

$                 29,558

 

$             2,765

       

 

Weighted average diluted common shares outstanding

 

33,183

 

 

33,206

       

Diluted earnings per share

$                    0.46

 

$               0.08

Goodwill impairment

                       0.30(1)

 

-

ARI acquisition costs

                       0.13(2)

 

-

Adjusted diluted earnings per share

$                    0.89

 

$               0.08

   

(1) 

Goodwill impairment of $10.0 million divided by weighted average diluted common shares outstanding of 33,183 for the three months ended May 31, 2019.

(2) 

ARI acquisition costs of $4.3 million, net of tax, divided by weighted average diluted common shares outstanding of 33,183 for the three months ended May 31, 2019.

 

SOURCE The Greenbrier Companies, Inc. (GBX)