Exhibit 99.1

 

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

 

For release:   October 26, 2018, 6:00 a.m. EDT    Contact:    Lorie Tekorius, Investor Relations
        Justin Roberts, Investor Relations
        503-684-7000

Greenbrier Reports Fourth Quarter and Fiscal Year Results

~ Orders for 9,300 units valued at over $1.0 billion ~

~ Backlog grows to nearly $3.0 billion; Book-to-bill of 1.6x ~

~ Earnings performance third best in Greenbrier history ~

~ Earnings guidance for Fiscal 2019 of $4.20 – $4.40 per share; Increase from

2018 Adjusted EPS ~

Lake Oswego, Oregon, October 26, 2018 – The Greenbrier Companies, Inc. (NYSE: GBX) today reported financial results for its fourth fiscal quarter and year ended August 31, 2018.

Fourth Quarter Highlights

 

   

Net earnings attributable to Greenbrier for the quarter were $30.9 million, or $0.94 per diluted share, on revenue of $689.2 million.

 

   

Adjusted EBITDA for the quarter was $75.3 million, or 10.9% of revenue.

 

   

New railcar deliveries totaled 6,000 units for the quarter.

 

   

Diversified orders of 9,300 railcars were received during the quarter, valued at over $1.0 billion. Sequential increase in book-to-bill to 1.6x from 1.1x in the third quarter.

 

   

New railcar backlog was 27,400 units with an estimated value of $2.7 billion.

 

   

Board declares a quarterly dividend of $0.25 per share, payable on December 5, 2018 to shareholders of record as of November 14, 2018.

Fiscal Year 2018 Highlights

 

   

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

 

($ in millions except per share)

   Net earnings attributable
to Greenbrier
     Diluted EPS  

Unadjusted (GAAP)

   $ 151.8      $ 4.68  

GBW goodwill impairment

     9.5        0.29  

Non-recurring tax benefit

     (27.4      (0.84
  

 

 

    

 

 

 

Adjusted

   $ 133.9      $ 4.13  
  

 

 

    

 

 

 

 

   

Adjusted EBITDA for the year was $318.2 million, or 12.6% of revenue.

 

   

New railcar deliveries totaled 20,900 units for the year.

 

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Greenbrier Reports Fourth Quarter Results … (Cont.)    Page 2

 

   

Orders of 21,900 units valued at approximately $2.2 billion across a broad range of railcar types. 30% of orders originated internationally.

 

   

Cash provided by operating activities exceeded $100 million for the year.

Fiscal Year 2019 Highlights

 

   

Greenbrier renewed, extended and increased its revolving credit facility and leasing term loan totaling $825 million. Extending both facilities to 2023, the additional liquidity supports Greenbrier’s strategic objective to grow at scale.

 

   

Today, Greenbrier separately announced an agreement to form a joint venture with Saudi Railway Company (“SAR”) that will generate a total investment of 1 billion Saudi riyals (USD $270 million) in Saudi Arabia’s railway system and a supply of freight railcars for the Saudi rail industry.

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

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

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

 

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Greenbrier Reports Fourth Quarter Results … (Cont.)    Page 3

 

Business Outlook

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

 

   

Deliveries will be 24,000 – 26,000 units including Greenbrier-Maxion (Brazil) which will account for approximately 2,000 units

 

   

Revenue will exceed $3.0 billion

 

   

Diluted EPS of $4.20 – 4.40

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

Financial Summary

 

     Q4 FY18     Q3 FY18    

Sequential Comparison – Main Drivers

Revenue

   $ 689.2M     $ 641.4M     Up 7.5% primarily due to higher volume of deliveries

Gross margin

     15.4     16.9   Reflects product mix changes

Selling and

administrative expense

   $ 51.3M     $ 51.8M     Continued investments to support international and other strategic initiatives

Net gain on disposition

of equipment

   $ 4.6M     $ 14.8M     Continued rebalancing of lease fleet

Adjusted EBITDA

   $ 75.3M     $ 86.9M     Lower operating margin

Effective tax rate

     20.1 (1)      24.5   Reflects a change in the geographic mix of earnings and additional non-recurring benefit from Tax Act

Loss from unconsolidated affiliates

   ($ 3.1M   ($ 12.8M ) (2)    Q3 includes $9.5 million non-cash GBW goodwill impairment

Net earnings attributable

to noncontrolling interest

   $ 6.2M     $ 3.3M     Higher deliveries and timing of railcar syndications at our GIMSA JV

Adjusted net earnings attributable to Greenbrier

   $ 26.4M     $ 42.4M     Primarily lower operating earnings; Q4 excludes $4.5 million tax benefit

Adjusted diluted EPS

   $ 0.80     $ 1.30     Q4 excludes $0.14 per share tax benefit

 

(1)

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

(2)

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

 

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Greenbrier Reports Fourth Quarter Results … (Cont.)    Page 4

 

Segment Summary

 

     Q4 FY18      Q3 FY18     

Sequential Comparison – Main Drivers

Manufacturing

Revenue

   $ 571.2M      $ 510.1M      Up 12.0% due to higher deliveries

Gross margin

     14.3      16.1    Reflects product mix changes

Operating margin (1)

     10.9      12.2   

Deliveries (2)

     5,600        5,100     

Wheels, Repair & Parts (3)

Revenue

   $ 85.8M      $ 94.5M      Down 9.2% primarily attributable to lower wheel and component volumes and scrap sales

Gross margin

     7.6      9.2    Down primarily due to lower volumes

Operating margin (1)

     4.3      5.9   

Leasing & Services

Revenue

   $ 32.2M      $ 36.8M      Down 12.5% due to lower volume of externally sourced railcar syndications

Gross margin

     54.9      47.9    Up due to more normalized mix of revenue

Operating margin (1) (4)

     54.2      72.6   

Lease fleet utilization

     94.4      90.4   

 

(1) 

See supplemental segment information on page 11 for additional information.

(2) 

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

(3) 

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

(4) 

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

Conference Call

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

 

   

October 26, 2018

 

   

8:00 a.m. Pacific Daylight Time

 

   

Phone: 1-630-395-0143, Password: “Greenbrier”

 

   

Real-time Audio Access: (“Newsroom” at http://www.gbrx.com)

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

About Greenbrier

Greenbrier—headquartered in Lake Oswego, Oregon—is a leading international supplier of equipment and services to global freight transportation markets. Greenbrier designs, builds and markets freight railcars and marine barges in North America. Greenbrier Europe is an end-to-end freight railcar manufacturing, engineering and repair business with operations in Poland, Romania and Turkey that serves customers across Europe and in the nations of the Gulf Cooperation Council. Greenbrier builds freight railcars and rail castings in Brazil through two separate strategic partnerships. We are a leading provider of freight railcar wheel services, parts, repair, refurbishment and retrofitting services in North America through our wheels, repair & parts business unit. Greenbrier offers railcar management, regulatory compliance services and leasing services to railroads and related transportation industries in North America. Through unconsolidated joint ventures, we produce industrial and rail castings, tank heads and other components. Greenbrier owns a lease fleet of over 8,100 railcars and performs management services for 357,000 railcars. Learn more about Greenbrier at www.gbrx.com.

 

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Greenbrier Reports Fourth Quarter Results … (Cont.)    Page 5

 

“SAFE HARBOR” STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: This press release may contain forward-looking statements, including any statements that are not purely statements of historical fact. Greenbrier uses words such as “anticipates,” “believes,” “forecast,” “potential,” “goal,” “contemplates,” “expects,” “intends,” “plans,” “projects,” “hopes,” “seeks,” “estimates,” “strategy,” “could,” “would,” “should,” “likely,” “will,” “may,” “can,” “designed to,” “future,” “foreseeable future” and similar expressions to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to certain risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements. Factors that might cause such a difference include, but are not limited to, reported backlog and awards that are not indicative of Greenbrier’s financial results; uncertainty or changes in the credit markets and financial services industry; high levels of indebtedness and compliance with the terms of Greenbrier’s indebtedness; write-downs of goodwill, intangibles and other assets in future periods; sufficient availability of borrowing capacity; fluctuations in demand for newly manufactured railcars or failure to obtain orders as anticipated in developing forecasts; loss of one or more significant customers; customer payment defaults or related issues; policies and priorities of the federal government regarding international trade, taxation and infrastructure; sovereign risk to contracts, exchange rates or property rights; actual future costs and the availability of materials and a trained workforce; failure to design or manufacture new products or technologies or to achieve certification or market acceptance of new products or technologies; steel or specialty component price fluctuations and availability and scrap surcharges; changes in product mix and the mix between segments; labor disputes, energy shortages or operating difficulties that might disrupt manufacturing operations or the flow of cargo; production difficulties and product delivery delays as a result of, among other matters, costs or inefficiencies associated with expansion, start-up, or changing of production lines or changes in production rates, changing technologies, transfer of production between facilities or non-performance of alliance partners, subcontractors or suppliers; ability to obtain suitable contracts for the sale of leased equipment and risks related to car hire and residual values; integration of current or future acquisitions and establishment of joint ventures; succession planning; discovery of defects in railcars or services resulting in increased warranty costs or litigation; physical damage or product or service liability claims that exceed Greenbrier’s insurance coverage; train derailments or other accidents or claims that could subject Greenbrier to legal claims; actions or inactions by various regulatory agencies including potential environmental remediation obligations or changing tank car or other railcar or railroad regulation; and issues arising from investigations of whistleblower complaints; all as may be discussed in more detail under the headings “Risk Factors” and “Forward Looking Statements” in Greenbrier’s Annual Report on Form 10-K for the fiscal year ended August 31, 2017, Greenbrier’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 31, 2018, and Greenbrier’s other reports on file with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s opinions only as of the date hereof. Except as otherwise required by law, Greenbrier does not assume any obligation to update any forward-looking statements.

Adjusted EBITDA, Adjusted net earnings attributable to Greenbrier and Adjusted diluted EPS are not financial measures under generally accepted accounting principles (GAAP). These metrics are performance measurement tools commonly used by rail supply companies and Greenbrier. You should not consider these metrics in isolation or as a substitute for other financial statement data determined in accordance with GAAP. In addition, because these metrics are not a measure of financial performance under GAAP and are susceptible to varying calculations, the measures presented may differ from and may not be comparable to similarly titled measures used by other companies.

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

Adjusted net earnings attributable to Greenbrier and Adjusted diluted EPS excludes the impact associated with items we do not believe are indicative of our core business or which affect comparability. We believe this assists in comparing our performance across reporting periods.

 

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Greenbrier Reports Fourth Quarter Results . . . (Cont.)

   Page 6

 

THE GREENBRIER COMPANIES, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, unaudited)

 

     August 31,
2018
     May 31,
2018
     February 28,
2018
     November 30,
2017
     August 31,
2017
 

Assets

              

Cash and cash equivalents

   $ 530,655      $ 589,969      $ 586,008      $ 591,406      $ 611,466  

Restricted cash

     8,819        9,204        8,875        8,839        8,892  

Accounts receivable, net

     348,406        322,328        321,795        315,393        279,964  

Inventories

     432,314        396,518        408,419        411,371        400,127  

Leased railcars for syndication

     130,926        158,194        168,748        130,991        91,272  

Equipment on operating leases, net

     322,855        302,074        258,417        274,598        315,941  

Property, plant and equipment, net

     457,196        424,035        429,465        426,961        428,021  

Investment in unconsolidated affiliates

     61,414        75,884        98,009        101,529        108,255  

Intangibles and other assets, net

     94,668        82,030        83,308        83,819        85,177  

Goodwill

     78,211        70,347        69,011        67,783        68,590  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $ 2,465,464      $ 2,430,583      $ 2,432,055      $ 2,412,690      $ 2,397,705  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities and Equity

              

Revolving notes

   $ 27,725      $ 20,337      $ 7,990      $ 6,885      $ 4,324  

Accounts payable and accrued liabilities

     449,857        447,827        461,088        441,373        415,061  

Deferred income taxes

     31,740        36,657        41,257        69,984        75,791  

Deferred revenue

     105,954        102,919        85,886        120,044        129,260  

Notes payable, net

     436,205        437,833        559,755        558,987        558,228  

Contingently redeemable noncontrolling interest

     29,768        31,135        33,046        35,209        36,148  

Total equity—Greenbrier

     1,250,101        1,225,512        1,095,447        1,032,557        1,018,130  

Noncontrolling interest

     134,114        128,363        147,586        147,651        160,763  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total equity

     1,384,215        1,353,875        1,243,033        1,180,208        1,178,893  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $ 2,465,464      $ 2,430,583      $ 2,432,055      $ 2,412,690      $ 2,397,705  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

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Greenbrier Reports Fourth Quarter Results . . . (Cont.)

   Page 7

 

THE GREENBRIER COMPANIES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts, unaudited)

 

     Years Ended August 31,  
     2018     2017     2016  

Revenue

      

Manufacturing

   $ 2,044,586     $ 1,725,188     $ 2,096,331  

Wheels, Repair & Parts (1)

     347,023       312,679       322,395  

Leasing & Services

     127,855       131,297       260,798  
  

 

 

   

 

 

   

 

 

 
     2,519,464       2,169,164       2,679,524  

Cost of revenue

      

Manufacturing

     1,727,407       1,373,967       1,630,554  

Wheels, Repair & Parts (1)

     318,330       288,336       293,751  

Leasing & Services

     64,672       85,562       203,782  
  

 

 

   

 

 

   

 

 

 
     2,110,409       1,747,865       2,128,087  

Margin

     409,055       421,299       551,437  

Selling and administrative

     200,439       170,607       158,681  

Net gain on disposition of equipment

     (44,369     (9,740     (15,796
  

 

 

   

 

 

   

 

 

 

Earnings from operations

     252,985       260,432       408,552  

Other costs

      

Interest and foreign exchange

     29,368       24,192       13,502  
  

 

 

   

 

 

   

 

 

 

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

     223,617       236,240       395,050  

Income tax expense

     (32,893     (64,014     (112,322
  

 

 

   

 

 

   

 

 

 

Earnings before earnings (loss) from unconsolidated affiliates

     190,724       172,226       282,728  

Earnings (loss) from unconsolidated affiliates

     (18,661     (11,764     2,096  
  

 

 

   

 

 

   

 

 

 

Net earnings

     172,063       160,462       284,824  

Net earnings attributable to noncontrolling interest

     (20,282     (44,395     (101,611
  

 

 

   

 

 

   

 

 

 

Net earnings attributable to Greenbrier

   $ 151,781     $ 116,067     $ 183,213  
  

 

 

   

 

 

   

 

 

 

Basic earnings per common share

   $ 4.92     $ 3.97     $ 6.28  

Diluted earnings per common share

   $ 4.68     $ 3.65     $ 5.73  

Weighted average common shares

      

Basic

     30,857       29,225       29,156  

Diluted

     32,835       32,562       32,468  

Dividends declared per common share

   $ 0.96     $ 0.86     $ 0.81  

 

(1) 

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

 

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Greenbrier Reports Fourth Quarter Results . . . (Cont.)

   Page 8

 

THE GREENBRIER COMPANIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)

 

     Years Ended August 31,  
     2018     2017     2016  

Cash flows from operating activities:

      

Net earnings

   $ 172,063     $ 160,462     $ 284,824  

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

      

Deferred income taxes

     (40,496     4,377       (8,935

Depreciation and amortization

     74,356       65,129       63,345  

Net gain on disposition of equipment

     (44,369     (9,740     (15,796

Stock based compensation expense

     29,314       26,427       24,037  

Accretion of debt discount

     4,171       2,340       —    

Noncontrolling interest adjustments

     2,864       (677     526  

Other

     1,688       (845     560  

Decrease (increase) in assets:

      

Accounts receivable, net

     (83,551     (25,272     (32,051

Inventories

     (26,592     (2,787     53,711  

Leased railcars for syndication

     (54,023     41,015       19,154  

Other

     34,115       17,558       (16,989

Increase (decrease) in liabilities:

      

Accounts payable and accrued liabilities

     54,032       (25,422     (85,928

Deferred revenue

     (20,231     33,039       50,712  
  

 

 

   

 

 

   

 

 

 

Net cash provided by operating activities

     103,341       285,604       337,170  
  

 

 

   

 

 

   

 

 

 

Cash flows from investing activities:

      

Acquisitions, net of cash acquired

     (34,874     (27,127     —    

Proceeds from sales of assets

     153,224       24,149       103,715  

Capital expenditures

     (176,848     (86,065     (139,013

Decrease (increase) in restricted cash

     73       15,387       (15,410

Investment in and advances to unconsolidated affiliates

     (26,455     (40,632     (12,855

Cash distribution from joint ventures

     4,661       550       7,855  
  

 

 

   

 

 

   

 

 

 

Net cash used in investing activities

     (80,219     (113,738     (55,708
  

 

 

   

 

 

   

 

 

 

Cash flows from financing activities:

      

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

     23,401       4,324       (49,000

Repayments of revolving notes with maturities longer than 90 days

     —         —         (1,888

Proceeds from issuance of notes payable

     13,771       276,093       —    

Repayments of notes payable

     (22,269     (8,297     (22,299

Debt issuance costs

     —         (9,082     (4,161

Repurchase of stock

     —         —         (33,498

Dividends

     (29,914     (24,890     (23,303

Cash distribution to joint venture partner

     (73,033     (28,511     (95,092

Investment by joint venture partner

     6,500       —         5,400  

Tax payments for net share settlement of restricted stock

     (7,723     (5,215     (5,500

Excess tax benefit from restricted stock awards

     —         —         2,813  

Other

     —         —         (887
  

 

 

   

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     (89,267     204,422       (227,415
  

 

 

   

 

 

   

 

 

 

Effect of exchange rate changes

     (14,666     12,499       (4,298

(Decrease) increase in cash and cash equivalents

     (80,811     388,787       49,749  

Cash and cash equivalents

      

Beginning of period

     611,466       222,679       172,930  
  

 

 

   

 

 

   

 

 

 

End of period

   $ 530,655     $ 611,466     $ 222,679  
  

 

 

   

 

 

   

 

 

 

 

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Greenbrier Reports Fourth Quarter Results . . . (Cont.)

   Page 9

 

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

(In thousands, except per share amounts, unaudited)

Operating Results by Quarter for 2018 are as follows:

 

     First     Second     Third     Fourth     Total  

Revenue

          

Manufacturing

   $ 451,485     $ 511,827     $ 510,099     $ 571,175     $ 2,044,586  

Wheels, Repair & Parts (1)

     78,011       88,710       94,515       85,787       347,023  

Leasing & Services

     30,039       28,799       36,773       32,244       127,855  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     559,535       629,336       641,387       689,206       2,519,464  

Cost of revenue

          

Manufacturing

     380,850       429,165       427,875       489,517       1,727,407  

Wheels, Repair & Parts (1)

     72,506       80,708       85,850       79,266       318,330  

Leasing & Services

     16,865       14,116       19,155       14,536       64,672  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     470,221       523,989       532,880       583,319       2,110,409  

Margin

     89,314       105,347       108,507       105,887       409,055  

Selling and administrative expense

     47,043       50,294       51,793       51,309       200,439  

Net gain on disposition of equipment

     (19,171     (5,817     (14,825     (4,556     (44,369
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings from operations

     61,442       60,870       71,539       59,134       252,985  

Other costs

          

Interest and foreign exchange

     7,020       7,029       6,533       8,786       29,368  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     54,422       53,841       65,006       50,348       223,617  

Income tax benefit (expense)

     (18,135     11,301       (15,944     (10,115     (32,893
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings before earnings (loss) from unconsolidated affiliates

     36,287       65,142       49,062       40,233       190,724  

Earnings (loss) from unconsolidated affiliates

     (2,910     147       (12,823     (3,075     (18,661
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net earnings

     33,377       65,289       36,239       37,158       172,063  

Net earnings attributable to noncontrolling interest

     (7,124     (3,647     (3,288     (6,223     (20,282
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net earnings attributable to Greenbrier

   $ 26,253     $ 61,642     $ 32,951     $ 30,935     $ 151,781  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings per common share (2)

   $ 0.90     $ 2.10     $ 1.03     $ 0.95     $ 4.92  

Diluted earnings per common share (2)

   $ 0.83     $ 1.91     $ 1.01     $ 0.94     $ 4.68  

 

(1) 

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

(2) 

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

 

- More -


Greenbrier Reports Fourth Quarter Results . . . (Cont.)

   Page 10

 

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

(In thousands, except per share amounts, unaudited)

Operating Results by Quarter for 2017 are as follows:

 

     First     Second     Third     Fourth     Total  

Revenue

          

Manufacturing

   $ 454,033     $ 445,504     $ 317,104     $ 508,547     $ 1,725,188  

Wheels, Repair & Parts (1)

     69,635       82,714       85,231       75,099       312,679  

Leasing & Services

     28,646       38,064       36,826       27,761       131,297  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     552,314       566,282       439,161       611,407       2,169,164  

Cost of revenue

          

Manufacturing

     356,555       346,653       245,228       425,531       1,373,967  

Wheels, Repair & Parts (1)

     64,978       75,497       77,985       69,876       288,336  

Leasing & Services

     18,030       25,207       26,247       16,078       85,562  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     439,563       447,357       349,460       511,485       1,747,865  

Margin

     112,751       118,925       89,701       99,922       421,299  

Selling and administrative expense

     41,213       39,495       42,810       47,089       170,607  

Net gain on disposition of equipment

     (1,122     (2,090     (1,581     (4,947     (9,740
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings from operations

     72,660       81,520       48,472       57,780       260,432  

Other costs

          

Interest and foreign exchange

     1,724       5,673       7,894       8,901       24,192  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings before income tax and loss from unconsolidated affiliates

     70,936       75,847       40,578       48,879       236,240  

Income tax expense

     (20,386     (24,858     (8,656     (10,114     (64,014
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings before loss from unconsolidated affiliates

     50,550       50,989       31,922       38,765       172,226  

Loss from unconsolidated affiliates

     (2,584     (1,988     (681     (6,511     (11,764
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net earnings

     47,966       49,001       31,241       32,254       160,462  

Net earnings attributable to noncontrolling interest

     (23,004     (14,465     1,582       (8,508     (44,395
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net earnings attributable to Greenbrier

   $ 24,962     $ 34,536     $ 32,823     $ 23,746     $ 116,067  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings per common share (2)

   $ 0.86     $ 1.19     $ 1.12     $ 0.81     $ 3.97  

Diluted earnings per common share (2)

   $ 0.79     $ 1.09     $ 1.03     $ 0.75     $ 3.65  

 

(1) 

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

(2) 

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

 

- More -


Greenbrier Reports Fourth Quarter Results . . . (Cont.)

   Page 11

 

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

(In thousands, unaudited)

Segment Information

Three months ended August 31, 2018:

 

     Revenue     Earnings (loss) from operations  
     External      Intersegment     Total     External     Intersegment     Total  

Manufacturing

   $ 571,175      $ 33,904     $ 605,079     $ 62,312     $ 3,905     $ 66,217  

Wheels, Repair & Parts (1)

     85,787        13,931       99,718       3,648       534       4,182  

Leasing & Services

     32,244        1,992       34,236       17,473       1,750       19,223  

Eliminations

     —          (49,827     (49,827     —         (6,189     (6,189

Corporate

     —          —         —         (24,299     —         (24,299
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   $ 689,206      $ —       $ 689,206     $ 59,134     $ —       $ 59,134  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Three months ended May 31, 2018:

 

     Revenue     Earnings (loss) from operations  
     External      Intersegment     Total     External     Intersegment     Total  

Manufacturing

   $ 510,099      $ 53,501     $ 563,600     $ 62,435       6,215     $ 68,650  

Wheels, Repair & Parts (1)

     94,515        10,879       105,394       5,546       686       6,232  

Leasing & Services

     36,773        3,886       40,659       26,704       3,380       30,084  

Eliminations

     —          (68,266     (68,266     —         (10,281     (10,281

Corporate

     —          —         —         (23,146     —         (23,146
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   $ 641,387      $ —       $ 641,387     $ 71,539     $ —       $ 71,539  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

     Total assets  
     August 31,
2018
     May 31,
2018
 

Manufacturing

   $ 1,020,757      $ 924,869  

Wheels, Repair & Parts (1)

     306,756        243,641  

Leasing & Services

     578,818        578,259  

Unallocated

     559,133        683,814  
  

 

 

    

 

 

 
   $ 2,465,464      $ 2,430,583  
  

 

 

    

 

 

 

 

(1) 

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

 

- More -


Greenbrier Reports Fourth Quarter Results . . . (Cont.)

   Page 12

 

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

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

Reconciliation of Net earnings to Adjusted EBITDA

 

     Three Months Ended      Year Ended  
     August 31,
2018
     May 31,
2018
     August 31,
2018
 

Net earnings

   $ 37,158      $ 36,239      $ 172,063  

Interest and foreign exchange

     8,786        6,533        29,368  

Income tax expense

     10,115        15,944        32,893  

Depreciation and amortization

     19,195        18,707        74,356  

GBW goodwill impairment, net of tax

     —          9,493        9,493  
  

 

 

    

 

 

    

 

 

 

Adjusted EBITDA

   $ 75,254      $ 86,916      $ 318,173  
  

 

 

    

 

 

    

 

 

 

 

     Three Months
Ended
August 31,
2018
     Year
Ended
August 31,
2018
 

Backlog Activity (units)

     

Beginning backlog

     24,200        28,600  

Orders received (1)

     9,300        21,900  

Production held as Leased railcars for syndication

     (600      (4,750

Production sold directly to third parties (1)

     (5,500      (18,350
  

 

 

    

 

 

 

Ending backlog

     27,400        27,400  
  

 

 

    

 

 

 

Delivery Information (units)

     

Production sold directly to third parties (1)

     5,500        18,350  

Sales of Leased railcars for syndication

     500        2,550  
  

 

 

    

 

 

 

Total deliveries

     6,000        20,900  
  

 

 

    

 

 

 

 

(1) 

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

 

- More -


Greenbrier Reports Fourth Quarter Results . . . (Cont.)

   Page 13

 

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

(In thousands, except per share amounts, unaudited)

Reconciliation of common shares outstanding and diluted earnings per share

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

 

     Three Months Ended      Year Ended  
     August 31,
2018
     May 31,
2018
     August 31,
2018
 

Weighted average basic common shares outstanding (1)

     32,663        32,034        30,857  

Dilutive effect of convertible notes (2)

     —          655        1,821  

Dilutive effect of restricted stock units (3)

     357        225        157  
  

 

 

    

 

 

    

 

 

 

Weighted average diluted common shares outstanding

     33,020        32,914        32,835  
  

 

 

    

 

 

    

 

 

 

 

(1)

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

(2)

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

(3)

Restricted stock units that are not considered participating securities and restricted stock units subject to performance criteria, for which actual levels of performance above target have been achieved, are included in Weighted average diluted shares outstanding when the Company is in a net earnings position.

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

 

     Three Months Ended      Year Ended  
     August 31,
2018
     May 31,
2018
     August 31,
2018
 

Net earnings attributable to Greenbrier

   $ 30,935      $ 32,951      $ 151,781  

GBW goodwill impairment, net of tax

     —          9,493        9,493  

Non-recurring Tax Act benefit

     (4,535      —          (27,408
  

 

 

    

 

 

    

 

 

 

Adjusted net earnings attributable to Greenbrier

   $ 26,400      $ 42,444      $ 133,866  
  

 

 

    

 

 

    

 

 

 

 

- More -


Greenbrier Reports Fourth Quarter Results . . . (Cont.)

   Page 14

 

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

(In thousands, except per share amounts, unaudited)

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

 

     Three Months Ended     Year Ended  
     August 31,
2018
    May 31,
2018
    August 31,
2018
 

Net earnings attributable to Greenbrier

   $ 30,935     $  32,951     $ 151,781  

Add back:

      

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

     —         297       2,031  
  

 

 

   

 

 

   

 

 

 

Earnings before interest and debt issuance costs on convertible notes

   $ 30,935     $ 33,248     $ 153,812  
  

 

 

   

 

 

   

 

 

 

Weighted average diluted common shares outstanding

     33,020       32,914       32,835  

Diluted earnings per share

   $ 0.94     $ 1.01     $ 4.68  

GBW goodwill impairment

           0.29  (1)       0.29  (1)  

Non-recurring Tax Act benefit

     (0.14 ) (2)      —         (0.84 ) (2) 
  

 

 

   

 

 

   

 

 

 

Adjusted diluted earnings per share

   $ 0.80     $ 1.30     $ 4.13  (3)  
  

 

 

   

 

 

   

 

 

 

 

(1)

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

(2)

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

(3)

Approximation due to rounding.

 

# # #

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