Greenbrier Reports Third Quarter Results

Greenbrier Reports Third Quarter Results

~ Announces orders of 6,000 railcars valued at over $600 million

~~ Backlog grows; Book-to-bill of 1.1x

~~ Reaffirms FY 2018 earnings guidance

PR Newswire

LAKE OSWEGO, Ore., June 29, 2018 /PRNewswire/ -- The Greenbrier Companies, Inc. GBX today reported financial results for its third fiscal quarter ended May 31, 2018.

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

Third Quarter Highlights

  • Net earnings attributable to Greenbrier for the quarter were $33.0 million, or $1.01 per diluted share, on revenue of $641.4 million.  Quarterly results include $9.5 million, net of tax, ($0.29 per share) impact associated with a non-cash goodwill impairment charge recorded by GBW, our 50/50 joint venture with Watco Companies, LLC.
  • Adjusted net earnings attributable to Greenbrier for the quarter were $42.4 million, or $1.30 per diluted share.
  • Adjusted EBITDA for the quarter was $86.9 million, or 13.6% of revenue.
  • Orders for 6,000 diversified railcars were received during the quarter, valued at over $600 million. Book-to-bill of 1.1x is the highest since May 2017.
  • New railcar backlog as of May 31, 2018 was 24,200 units with an estimated value of $2.3 billion.
  • New railcar deliveries totaled 5,600 units for the quarter.
  • Board declares quarterly dividend of $0.25 per share, payable on August 9, 2018 to shareholders as of July 19, 2018.
  • Cash provided by operating activities was $87.3 million for the quarter.
  • Annual earnings guidance of $5.00 per diluted share is reaffirmed.  Guidance excludes $0.29 per share related to the goodwill impairment and includes the Q2 $0.70 per share non-recurring net benefit from the 2017 Tax Cut and Jobs Act ("Tax Act").

William A. Furman, Chairman and CEO, said, "Greenbrier produced strong operating and financial results in the third fiscal quarter, highlighted by healthy gross margins, a strong balance sheet and the highest quarterly order activity this fiscal year.  Greenbrier's strategy is to strengthen core North American markets while making demonstrable advancements in international railcar markets.  This strategy is succeeding.  With North American railcar loadings increasing and improving indicators for the U.S. and global economies, current industry fundamentals remain favorable for most of Greenbrier's business segments. GBW continues to underperform expectations.  We intend to eliminate this headwind to Greenbrier's financial performance and will soon share plans to resolve GBW's challenges."

Furman continued, "We are encouraged by the 6,000 new railcar orders we received in the third quarter.  Order activity continues to be broad-based and diversified, originating primarily in the improving North American market.  Looking forward, we expect to see continued order strength in North America and internationally, but do not expect order activity to be linear.  Backlog is a key indicator of future earnings and cash flow generation.  At quarter-end, Greenbrier had diversified backlog of 24,200 units with an estimated value of $2.3 billion."

Furman concluded, "Greenbrier's flexibility and creativity allow us to navigate the current market environment successfully.  We remain confident in our long-term strategy and integrated business model.  We are narrowing and reaffirming the guidance targets laid out earlier in the year."

Business Outlook

Based on current business trends and production schedules for fiscal 2018, Greenbrier believes:

  • Deliveries will be approximately 20,000 – 21,000 units including Greenbrier-Maxion (Brazil) which will account for up to 10% of deliveries
  • Revenue will be approximately $2.5 billion
  • Diluted EPS will be $5.00 excluding $0.29 per share related to the GBW goodwill impairment and including the Q2 $0.70 per share non-recurring net benefit from the Tax Act

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

FY18

Q2 FY18

Sequential Comparison – Main Drivers

Revenue

$641.4M

$629.3M

Up 1.9% primarily due to higher wheel and component volumes and higher external syndication activity

Gross margin

16.9%

16.7%

Up 20 bps primarily due to product mix, including wheels, higher management fees and increased syndication activity

Selling and

administrative expense

$51.8M

$50.3M

Up 3.0% primarily due to higher employee related costs including long term incentive compensation

Net gain on disposition

of equipment

$14.8M

$5.8M

Reflects continued rebalancing of lease portfolio

Adjusted EBITDA

$86.9M

$79.1M

Higher gain on sale and operating margin

Effective tax rate

24.5%

(21.0%)

Q2 included non-recurring benefit from the Tax Act

Earnings (loss) from

unconsolidated affiliates

($12.8M) 1

$0.1M



Adjusted net earnings attributable to Greenbrier

$42.4M

$61.6M2



Adjusted diluted EPS

$1.30

$1.912



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

(2) Q2 included a non-recurring net benefit of $22.9 million, or $0.70 per share, from the Tax Act.

Segment Summary



Q3 FY18

Q2 FY18

Sequential Comparison – Main Drivers

Manufacturing

  Revenue

$510.1M

$511.8M

Primarily attributable to product mix

  Gross margin

16.1%

16.2%

Continued strong performance

  Operating margin (1)

12.2%

12.3%



  Deliveries (2)

5,100

4,300

Increased syndication activity

Wheels & Parts

  Revenue

$94.5M

$88.7M

Up 6.5% primarily attributable to seasonally higher wheel and component volumes

  Gross margin

9.2%

9.0%

Improved operating efficiencies

  Operating margin (1)

5.9%

5.8%



Leasing & Services

  Revenue

$36.8M

$28.8M

Up 27.8% primarily due to higher volume of externally sourced railcar syndications and interim rent

  Gross margin

47.9%

51.0%

Down primarily due to lower margins on externally sourced railcar syndications

  Operating margin (1) (3)

72.6%

56.0%



  Lease fleet utilization

90.4%

92.2%



(1) See supplemental segment information on page 10 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 not included in gross margin.

Conference Call

Greenbrier will host a teleconference to discuss its third quarter 2018 results. In conjunction with this news release, Greenbrier has posted a supplemental earnings presentation to our website. 

Teleconference details are as follows:

  • June 29, 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-Astra Rail is an end-to-end freight railcar manufacturing, engineering and repair business with operations in Poland and Romania that serves customers across Europe and in the nations of the GCC. Greenbrier builds freight railcars and rail castings in Brazil through two separate strategic partnerships. We are a leading provider of wheel services, parts, railcar management & regulatory compliance services and leasing services to railroads and related transportation industries in North America.  Greenbrier offers freight railcar repair, refurbishment and retrofitting services in North America through GBW, a joint venture with Watco Companies, LLC. Through other unconsolidated joint ventures, we produce tank heads and other components and have an ownership stake in a leasing warehouse. Greenbrier owns a lease fleet of 7,900 railcars and performs management services for 356,000 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 February 28, 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)





May 31,

2018

Feb. 28,

2018

Nov. 30,

2017

Aug. 31,

2017

May 31,

2017

Assets











   Cash and cash equivalents

$    589,969

$    586,008

$    591,406

$    611,466

$    465,413

   Restricted cash

9,204

8,875

8,839

8,892

8,753

   Accounts receivable, net 

322,328

321,795

315,393

279,964

267,830

   Inventories

396,518

408,419

411,371

400,127

414,012

   Leased railcars for syndication

158,194

168,748

130,991

91,272

149,119

   Equipment on operating leases, net

302,074

258,417

274,598

315,941

315,976

   Property, plant and equipment, net

424,035

429,465

426,961

428,021

330,471

   Investment in unconsolidated affiliates

75,884

98,009

101,529

108,255

110,058

   Intangibles and other assets, net

82,030

83,308

83,819

85,177

68,930

   Goodwill

70,347

69,011

67,783

68,590

43,265



$ 2,430,583

$ 2,432,055

$ 2,412,690

$ 2,397,705

$ 2,173,827













Liabilities and Equity











   Revolving notes

$      20,337

$        7,990

$        6,885

$        4,324

$               -

   Accounts payable and accrued liabilities

447,827

461,088

441,373

415,061

339,001

   Deferred income taxes

36,657

41,257

69,984

75,791

80,482

   Deferred revenue

102,919

85,886

120,044

129,260

82,006

   Notes payable, net

437,833

559,755

558,987

558,228

532,638













Contingently redeemable noncontrolling interest

31,135

33,046

35,209

36,148

-













   Total equity - Greenbrier

1,225,512

1,095,447

1,032,557

1,018,130

986,221

   Noncontrolling interest

128,363

147,586

147,651

160,763

153,479

   Total equity

1,353,875

1,243,033

1,180,208

1,178,893

1,139,700



$ 2,430,583

$ 2,432,055

$ 2,412,690

$ 2,397,705

$ 2,173,827

 

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,



2018



2017



2018



2017

Revenue

















        Manufacturing

$      510,099



$      317,104



$    1,473,411



$     1,216,641



        Wheels & Parts

94,515



85,231



261,236



237,580



        Leasing & Services

36,773



36,826



95,611



103,536





641,387



439,161



1,830,258



1,557,757



Cost of revenue

















        Manufacturing

427,875



245,228



1,237,890



948,436



        Wheels & Parts

85,850



77,985



239,064



218,460



        Leasing & Services

19,155



26,247



50,136



69,484





532,880



349,460



1,527,090



1,236,380





















Margin

108,507



89,701



303,168



321,377





















Selling and administrative expense

51,793



42,810



149,130



123,518



Net gain on disposition of equipment

(14,825)



(1,581)



(39,813)



(4,793)



Earnings from operations

71,539



48,472



193,851



202,652





















Other costs

















Interest and foreign exchange

6,533



7,894



20,582



15,291



Earnings before income tax and loss from unconsolidated affiliates

65,006



40,578



173,269



187,361



Income tax expense

(15,944)



(8,656)



(22,778)



(53,900)



Earnings before loss from unconsolidated affiliates

49,062



31,922



150,491



133,461



Loss from unconsolidated affiliates

(12,823)



(681)



(15,586)



(5,253)



Net earnings

36,239



31,241



134,905



128,208



Net (earnings) loss attributable to noncontrolling interest

(3,288)



1,582



(14,059)



(35,887)





















Net earnings attributable to Greenbrier

$          32,951



$        32,823



$        120,846



$           92,321





















Basic earnings per common share:

$              1.03



$            1.12



$              3.99



$              3.16





















Diluted earnings per common share:

$              1.01



$            1.03



$              3.75



$              2.91





















Weighted average common shares:

















Basic

32,034



29,348



30,250



29,192



Diluted

32,914



32,690



32,774



32,515





















Dividends declared per common share

$              0.25



$            0.22



$              0.71



$              0.64



 



THE GREENBRIER COMPANIES, INC.

Consolidated Statements of Cash Flows

(In thousands, unaudited)







Nine Months Ended

May 31,







2018



2017



Cash flows from operating activities:













    Net earnings



$

134,905



$       128,208



    Adjustments to reconcile net earnings to net cash

      provided by operating activities:













      Deferred income taxes





(38,825)



16,815



      Depreciation and amortization





55,161



46,616



      Net gain on disposition of equipment





(39,813)



(4,793)



      Accretion of debt discount





3,109



1,329



      Stock based compensation expense





20,311



19,007



     Noncontrolling interest adjustments





1,067



1,203



      Other





1,345



1,017



      (Increase) decrease in assets:













          Accounts receivable, net





(24,980)



(27,109)



          Inventories





(4,270)



(47,209)



          Leased railcars for syndication





(69,994)



(16,122)



          Other





30,549



8,419



    Increase (decrease) in liabilities:













          Accounts payable and accrued liabilities





34,898



(35,800)



          Deferred revenue





(23,837)



(13,650)



    Net cash provided by operating activities





79,626



77,931



Cash flows from investing activities:













    Proceeds from sales of assets





129,828



20,344



    Capital expenditures





(118,656)



(53,848)



    Decrease in restricted cash





(312)



15,526



   Investment in and advances to unconsolidated affiliates





(21,455)



(34,068)



    Cash distribution from unconsolidated affiliates





3,941



550



    Net cash used in investing activities





(6,654)



(51,496)



Cash flows from financing activities:













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





16,013



-



    Proceeds from issuance of notes payable





13,749



275,000



   Repayments of notes payable





(19,274)



(5,469)



   Debt issuance costs





-



(9,082)



    Dividends





(21,866)



(18,619)



    Cash distribution to joint venture partner





(69,413)



(27,267)



    Investment by joint venture partner





6,500



-



   Tax payments for net share settlement of restricted stock





(7,716)



(5,208)



   Excess tax deficiency from restricted stock awards





-



(2,396)



    Net cash provided by (used in) financing activities





(82,007)



206,959



    Effect of exchange rate changes





(12,462)



9,340



    Increase (decrease) in cash and cash equivalents





(21,497)



242,734



Cash and cash equivalents













Beginning of period





611,466



222,679



End of period



$

589,969



$       465,413













































 

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

Total



















Revenue















   Manufacturing

$         451,485



$         511,827



$    510,099

$    1,473,411



   Wheels & Parts

78,011



88,710



94,515

261,236



   Leasing & Services

30,039



28,799



36,773

95,611





559,535



629,336



641,387

1,830,258



Cost of revenue















   Manufacturing

380,850



429,165



427,875

1,237,890



   Wheels & Parts

72,506



80,708



85,850

239,064



   Leasing & Services

16,865



14,116



19,155

50,136





470,221



523,989



532,880

1,527,090



















Margin

89,314



105,347



108,507

303,168



















Selling and administrative expense

47,043



50,294



51,793

149,130



Net gain on disposition of equipment

(19,171)



(5,817)



(14,825)

(39,813)



Earnings from operations

61,442



60,870



71,539

193,851



















Other costs















Interest and foreign exchange

7,020



7,029



6,533

20,582



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

54,422



53,841



65,006

173,269



Income tax benefit (expense)

(18,135)



11,301



(15,944)

(22,778)



Earnings before earnings (loss) from unconsolidated affiliates

36,287



65,142



49,062

150,491



Earnings (loss) from unconsolidated affiliates

(2,910)



147



(12,823)

(15,586)



Net earnings

33,377



65,289



36,239

134,905



Net earnings attributable to noncontrolling interest

(7,124)



(3,647)



(3,288)

(14,059)



Net earnings attributable to Greenbrier

$            26,253



$            61,642



$      32,951

$        120,846



















Basic earnings per common share (1)

$                0.90



$                2.10



$          1.03

$              3.99



Diluted earnings per common share (1) 

$                0.83



$                1.91



$          1.01

$              3.75







(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, 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 & Parts

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 & Parts

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 earnings (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 earnings (loss) from unconsolidated affiliates          

50,550



50,989



31,922



38,765



172,226



Earnings (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 (1)

$             0.86



$            1.19



$            1.12



$          0.81



$           3.97



Diluted earnings per common share (1) 

$             0.79



$            1.09



$            1.03



$          0.75



$           3.65







(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 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, 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 & Parts

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











































Three months ended February 28, 2018:









































Revenue



Earnings (loss) from operations





External



Intersegment



  Total



External



Intersegment



Total



Manufacturing

$           511,827



$             13,948



$         525,775



$           63,185



$               3,415



$       66,600



Wheels & Parts

88,710



8,951



97,661



5,119



780



5,899



Leasing & Services

28,799



4,365



33,164



16,114



3,794



19,908



Eliminations

-



(27,264)



(27,264)



-



(7,989)



(7,989)



Corporate

-



-



-



(23,548)



-



(23,548)





$           629,336



$                      -



$         629,336



$           60,870



$                       -



$       60,870













Total assets





   May 31,

2018



February 28,

2018



Manufacturing

$               924,869



$               911,505



Wheels & Parts

243,641



260,077



Leasing & Services

578,259



565,626



Unallocated

683,814



694,847





$            2,430,583



$            2,432,055



Information for GBW, which is Greenbrier's fourth reportable segment and which is accounted for under the equity method of accounting, is included in the table below.  Information included in the table below represents totals for GBW rather than Greenbrier's 50% share, as this is how performance and resource allocation is evaluated.



As of and for the

Three Months Ended     





May 31,

2018



February 28,

2018



Revenue

$                 67,200



$                 62,700



Loss from operations

$                (29,500)



$                  (5,500)



Total assets

$               177,800



$               208,500























During the third quarter of 2018, GBW recorded a pre-tax impairment loss of $26.4 million. Our share of the non-cash impairment was $9.5 million after-tax ($0.29 per share) and is included as part of Loss from unconsolidated affiliates on our Consolidated Statement of Income.

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,

2018



February 28,

2018





Net earnings

$             36,239



$               65,289





Interest and foreign exchange

6,533



7,029





Income tax expense (benefit)

15,944



(11,301))





Depreciation and amortization

18,707



18,084





GBW goodwill impairment

9,493



-

















Adjusted EBITDA

$                86,916



$               79,101



















 







Three Months Ended





May 31, 2018

Backlog Activity (units) (1)











Beginning backlog

24,100





Orders received

6,000





Production held as Leased railcars for syndication

(1,600)





Production sold directly to third parties

(4,300)





Ending backlog

24,200













Delivery Information (units) (1)







Production sold directly to third parties

4,300





Sales of Leased railcars for syndication

1,300





Total deliveries

5,600









(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



May 31,

2018

February 28,

2018

Weighted average basic common shares outstanding (1)

32,034

29,355

Dilutive effect of convertible notes (2)

655

3,349

Dilutive effect of restricted stock units (3)

225

7

Weighted average diluted common shares outstanding

32,914

32,711







(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



May 31,

2018



February 28,

2018

Net earnings attributable to Greenbrier

$                 32,951



$               61,642

GBW goodwill impairment

9,493



-

Adjusted net earnings attributable to Greenbrier

$                 42,444



$               61,642



















Three Months Ended



May 31,

2018



February 28,

2018

Net earnings attributable to Greenbrier

$                 32,951



$               61,642

Add back:







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

297



843

Earnings before interest and debt issuance costs on convertible notes

$                 33,248



$               62,485

Weighted average diluted common shares outstanding

32,914



32,711









Diluted earnings per share

$                     1.01



$                   1.91

GBW goodwill impairment

                       0.29(1)



-

Adjusted diluted earnings per share

$                     1.30



$                   1.91









(1)

GBW goodwill impairment of $9.5 million, net of tax, divided by weighted average diluted common shares outstanding of 32,914 for the three months ended may 31, 2018.

 

Cision View original content with multimedia:http://www.prnewswire.com/news-releases/greenbrier-reports-third-quarter-results-300674545.html

SOURCE The Greenbrier Companies, Inc. (GBX)

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