Exhibit 99.1

 

News Release      LOGO  
One Centerpointe Drive, Suite 200, Lake Oswego, Oregon 97035    503-684-7000      www.gbrx.com  

 

For release: June 29, 2018, 6:00 a.m. EDT     Contact:   Lorie Tekorius, Investor Relations
      Justin Roberts, Investor Relations
      Ph: 503-684-7000

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 ~

Lake Oswego, Oregon, June 29, 2018 – The Greenbrier Companies, Inc. (NYSE: GBX) today reported financial results for its third fiscal quarter ended May 31, 2018.

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

 

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Greenbrier Reports Third Quarter Results. . . (Cont.)    Page  2

 

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      $ 61.6M 2   
Adjusted diluted EPS    $ 1.30      $ 1.91 2   

 

(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.

 

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Greenbrier Reports Third Quarter Results. . . (Cont.)    Page  3

 

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.

 

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Greenbrier Reports Third Quarter Results. . . (Cont.)    Page  4

 

“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.

 

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Greenbrier Reports Third Quarter Results. . . (Cont.)    Page  5

 

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     
  

 

 

 

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Greenbrier Reports Third Quarter Results. . . (Cont.)    Page  6

 

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   

 

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Greenbrier Reports Third Quarter Results. . . (Cont.)    Page  7

 

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  
  

 

 

 

 

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Greenbrier Reports Third Quarter Results. . . (Cont.)    Page  8

 

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.

 

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Greenbrier Reports Third Quarter Results. . . (Cont.)    Page  9

 

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.

 

- More -


Greenbrier Reports Third Quarter Results. . . (Cont.)    Page  10

 

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.

 

- More -


Greenbrier Reports Third Quarter Results. . . (Cont.)    Page  11

 

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

 

- More -


Greenbrier Reports Third Quarter Results. . . (Cont.)    Page  12

 

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.

 

###

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