Exhibit 99.1

 

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

 

 

For release: October 25, 2019, 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

~ Record revenue of $3.0 billion and deliveries of 23,400 units ~

~ American Railcar Industries (ARI) manufacturing integration underway; Synergies of $15 million expected in fiscal 2020 ~

~ Provides guidance for 2020 ~

Lake Oswego, Oregon, October 25, 2019 – The Greenbrier Companies, Inc. (NYSE: GBX) today reported financial results for its fourth fiscal quarter and year ended August 31, 2019.

Fourth Quarter Highlights

 

   

Net earnings attributable to Greenbrier for the quarter were $35.1 million, or $1.06 per diluted share, on record revenue of $914.2 million. Quarterly results include $8.2 million, net of tax, ($0.25 per share) in costs related to the ARI acquisition.

 

   

Adjusted net earnings attributable to Greenbrier were $43.3 million ($1.31 per diluted share) excluding the ARI acquisition costs.

 

   

Adjusted EBITDA for the quarter was $109.4 million, or 12.0% of revenue.

 

   

Record new railcar deliveries totaled 7,300 units for the quarter.

 

   

Diversified orders of 4,900 railcars were received during the quarter, valued at over $500.0 million.

 

   

New railcar backlog was 30,300 units with an estimated value of $3.3 billion. Backlog reflects the transfer of 10,600 units from ARI and the removal of 3,500 small cube covered hoppers for sand service for which the company realized negotiated economic benefits. Remaining backlog does not include any other orders for the sand market.

 

   

Marine backlog exceeds $100 million and extends through calendar 2020.

 

   

Board declares a quarterly dividend of $0.25 per share, payable on December 4, 2019 to shareholders of record as of November 13, 2019.

 

   

Dividend yield approximately 3.1% as of October 24, 2019.

Fiscal Year 2019 Highlights

 

   

Net earnings attributable to Greenbrier for the year were $71.1 million, or $2.14 per diluted share, on record revenue of $3.0 billion. Adjusted net earnings attributable to Greenbrier for the year were $95.2 million, or $2.87 per diluted share, excluding the non-cash goodwill impairment charge and ARI acquisition costs.

 

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

 

Fiscal Year 2019 Highlights (Cont.)

 

   

Adjusted EBITDA for the year was $290.9 million, or 9.6% of revenue.

 

   

Record new railcar deliveries totaled 23,400 units for the year.

 

   

Orders of 20,600 units valued at approximately $2.2 billion across a broad range of railcar types with over 20% originating internationally.

 

   

Cash provided by operating activities exceeded $125 million for the second half of the year.

William A. Furman, Chairman & CEO said, “Greenbrier ended its fiscal 2019 with positive momentum. We enter fiscal 2020 supported by solid railcar order activity and improvements in operational areas that caused headwinds in 2019. We are pleased that in the fourth quarter, both deliveries and earnings met expectations. A robust backlog exceeding 30,000 units, valued at over $3 billion, combined with a healthy balance sheet provides optionality for the future. Greenbrier’s strategy remains focused on four elements: 1) reinforcing core North American markets, 2) executing on our international strategy while improving profitability, 3) robust development of the talent pipeline and 4) continuing to grow the business at scale.”

Furman concluded, “Recent progress and opportunities in Europe and other international markets are positive. We are optimistic about long term success in these markets. In North America, we completed the largest acquisition in Greenbrier’s history in late July. We have been actively welcoming new colleagues and integrating the new manufacturing operations. We expect to generate approximately $15 million in synergies in fiscal 2020, consistent with our initial expectations. The ARI acquisition adds talent in manufacturing, engineering and other fields. With this long-contemplated transaction now complete, Greenbrier is one of the largest freight railcar builders and railcar service providers in the world.”

Business Outlook

Based on current business trends and production schedules for fiscal 2020, Greenbrier believes:

 

   

Deliveries will be 26,000 – 28,000 units including Greenbrier-Maxion (Brazil) which will account for approximately 2,000 units

 

   

Revenue will be approximately $3.5 billion

 

   

Diluted EPS of $2.60 – $3.00 excluding approximately $20 – $25 million of pre-tax integration and acquisition-related expenses from the ARI acquisition

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.

 

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

 

Financial Summary

 

     Q4 FY19      Q3 FY19     

Sequential Comparison – Main Drivers

Revenue

   $ 914.2M      $ 856.2M      Record quarterly revenue driven by higher deliveries

Gross margin

     14.6      12.4    Primarily higher deliveries and strong syndication activity

Selling and

administrative expense

   $ 60.6M      $ 54.4M      Q4 includes $11.0 million and Q3 includes $5.8 million of ARI acquisition expense

Net gain on disposition of equipment

   $ 3.5M      $ 11.0M      Lower lease fleet portfolio sales

Adjusted EBITDA

   $ 109.4      $ 84.4M      Increased operating earnings; see reconciliation on page 12

Effective tax rate

     25.0      30.0    Q4 tax rate in line with annual expectations

Loss from unconsolidated affiliates

   $ 0.9M      $ 4.6M      Improvement in Brazil operations

Net earnings attributable to noncontrolling interest

   $ 15.7M      $ 10.6M      Higher GIMSA JV deliveries

Adjusted net earnings attributable to Greenbrier

   $ 43.3M (1)     $ 29.6M (2)     Increased operating earnings driven by higher deliveries and improved gross margin

Adjusted diluted EPS

   $ 1.31 (1)     $ 0.89 (2)    

 

(1) 

Excludes expense of $8.2 million ($0.25 per share), net of tax, associated with ARI acquisition costs

(2) 

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

Segment Summary

 

     Q4 FY19     Q3 FY19    

Sequential Comparison – Main Drivers

Manufacturing

Revenue

   $ 802.1M     $ 681.6M     Increase driven by higher deliveries

Gross margin

     14.5     13.3   Higher deliveries and increased syndication activity

Operating margin (1)

     11.8     10.6  

Deliveries (2)

     7,300       6,500     Record quarterly deliveries

Wheels, Repair & Parts

Revenue

   $ 85.7M     $ 125.0M     Lower volumes driven by decreased rail traffic

Gross margin

     4.7     4.1   Improved Wheels and Parts profitability partially offset by Repair operations

Operating margin (1)

     (0.2 %)      (7.1 %)   

Leasing & Services

Revenue

   $ 26.4M     $ 49.6M     Less secondary market syndication activity

Gross margin

     50.7     21.4   More normalized margin levels reflecting less secondary market syndication activity

Operating margin (1) (3)

     41.2     30.9  

 

(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) 

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

 

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

 

Conference Call

Greenbrier will host a teleconference to discuss its fourth quarter 2019 results. In conjunction with this news release, Greenbrier has posted a supplemental earnings presentation to our website. Teleconference details are as follows:

 

   

October 25, 2019

 

   

8:00 a.m. Pacific Daylight Time

 

   

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

 

   

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

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

About Greenbrier

Greenbrier, headquartered in Lake Oswego, Oregon, is a leading international supplier of equipment and services to global freight transportation markets. Greenbrier designs, builds and markets freight railcars and marine barges in North America. Greenbrier Europe is an end-to-end freight railcar manufacturing, engineering and repair business with operations in Poland, Romania and Turkey that serves customers across Europe and in the nations of the Gulf Cooperation Council. Greenbrier builds freight railcars and rail castings in Brazil through two separate strategic partnerships. We are a leading provider of freight railcar wheel services, parts, repair, refurbishment and retrofitting services in North America through our wheels, repair & parts business unit. Greenbrier offers railcar management, regulatory compliance services and leasing services to railroads and related transportation industries in North America. Through unconsolidated joint ventures, we produce industrial and rail castings, tank heads and other components. Greenbrier owns a lease fleet of 9,400 railcars and performs management services for 380,000 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, and variations of words, such as “affirms,” “anticipates,” “believes,” “forecast,” “potential,” “goal,” “contemplates,” “expects,” “intends,” “plans,” “projects,” “hopes,” “seeks,” “estimates,” “strategy,” “could,” “would,” “should,” “likely,” “will,” “may,” “can,” “designed to,” “future,” “foreseeable future” and similar expressions to identify forward-looking statements. These forward-looking statements include, without limitation, the information under the heading “Business Outlook” and any other information regarding future performance and strategies. 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, economic downturns (global or national); 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; integration of past or future acquisitions, including the integration of the manufacturing business of American Railcar Industries, and establishment of joint ventures; fluctuations in demand for newly manufactured railcars or failure to obtain orders as anticipated in developing forecasts; interest rate fluctuations and volatility in global or national financial markets; loss of one or more significant customers; customer order or payment defaults or related issues; policies and priorities of the federal government regarding international trade, taxation and infrastructure; risks related to operations outside of the U.S. including economic or political instability, dishonoring of contracts, exchange rates, diminishment of property rights; violations of anti-corruption laws; 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, energy, 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

 

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

 

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; inability to compete successfully; ability to obtain suitable contracts for the sale of leased equipment and risks related to car hire and residual values; succession planning; discovery of defects in railcars or services resulting in increased warranty costs or litigation; inability to lease railcars at favorable rates and on favorable terms; 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; a decline in performance or demand, oversupply, or increase in efficiency, of the rail freight industry; and issues arising from investigations of whistleblower complaints. More information on these risks and other potential factors that could cause our results to differ from our forward-looking statements is included in the Company’s filings with the SEC, including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s most recently filed periodic reports on Form 10-K and subsequent Form 10-Q filings. Except as otherwise required by law, the Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s opinions only as of the date hereof.

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

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

Adjusted net earnings attributable to Greenbrier and Adjusted diluted EPS excludes the impact associated with items we do not believe are indicative of our core business or which affect comparability. Diluted EPS range excluding integration and acquisition-related expenses from the ARI acquisition exclude integration and acquisition-related expenses from the ARI acquisition. 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,
2019
     May 31,
2019
     February 28,
2019
     November 30,
2018
     August 31,
2018
 

Assets

              

Cash and cash equivalents

   $ 329,684      $ 359,625      $ 341,500      $ 462,797      $ 530,655  

Restricted cash

     8,803        21,471        21,584        8,872        8,819  

Accounts receivable, net

     373,383        330,385        335,732        306,917        348,406  

Inventories

     664,693        592,099        574,146        492,573        432,314  

Leased railcars for syndication

     182,269        130,489        163,472        233,415        130,926  

Equipment on operating leases, net

     366,688        376,241        381,336        317,282        322,855  

Property, plant and equipment, net

     717,973        478,502        472,739        461,120        457,196  

Investment in unconsolidated affiliates

     91,818        53,036        58,685        58,682        61,414  

Intangibles and other assets, net

     125,379        97,022        101,284        95,958        94,668  

Goodwill

     129,947        74,318        82,743        77,508        78,211  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $  2,990,637      $  2,513,188      $  2,533,221      $  2,515,124      $  2,465,464  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities and Equity

              

Revolving notes

   $ 27,115      $ 25,952      $ 22,323      $ 22,189      $ 27,725  

Accounts payable and accrued liabilities

     568,360        473,106        474,863        438,304        449,857  

Deferred income taxes

     13,946        12,089        29,481        30,631        31,740  

Deferred revenue

     85,070        76,170        91,533        108,566        105,954  

Notes payable, net

     822,885        483,918        486,107        487,764        436,205  

Contingently redeemable noncontrolling interest

     31,564        24,722        25,637        28,449        29,768  

Total equity - Greenbrier

     1,276,730        1,262,315        1,257,818        1,257,631        1,250,101  

Noncontrolling interest

     164,967        154,916        145,459        141,590        134,114  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total equity

     1,441,697        1,417,231        1,403,277        1,399,221        1,384,215  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $ 2,990,637      $ 2,513,188      $ 2,533,221      $ 2,515,124      $ 2,465,464  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

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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,  
     2019     2018     2017  

Revenue

      

Manufacturing

   $ 2,431,499     $ 2,044,586     $ 1,725,188  

Wheels, Repair & Parts

     444,502       347,023       312,679  

Leasing & Services

     157,590       127,855       131,297  
  

 

 

   

 

 

   

 

 

 
     3,033,591       2,519,464       2,169,164  

Cost of revenue

      

Manufacturing

     2,137,625       1,727,407       1,373,967  

Wheels, Repair & Parts

     420,890       318,330       288,336  

Leasing & Services

     108,590       64,672       85,562  
  

 

 

   

 

 

   

 

 

 
     2,667,105       2,110,409       1,747,865  

Margin

     366,486       409,055       421,299  

Selling and administrative

     213,308       200,439       170,607  

Net gain on disposition of equipment

     (40,963     (44,369     (9,740

Goodwill impairment

     10,025       —         —    
  

 

 

   

 

 

   

 

 

 

Earnings from operations

     184,116       252,985       260,432  

Other costs

      

Interest and foreign exchange

     30,912       29,368       24,192  
  

 

 

   

 

 

   

 

 

 

Earnings before income tax and loss from unconsolidated affiliates

     153,204       223,617       236,240  

Income tax expense

     (41,588     (32,893     (64,014
  

 

 

   

 

 

   

 

 

 

Earnings before loss from unconsolidated affiliates

     111,616       190,724       172,226  

Loss from unconsolidated affiliates

     (5,805     (18,661     (11,764
  

 

 

   

 

 

   

 

 

 

Net earnings

     105,811       172,063       160,462  

Net earnings attributable to noncontrolling interest

     (34,735     (20,282     (44,395
  

 

 

   

 

 

   

 

 

 

Net earnings attributable to Greenbrier

   $ 71,076     $ 151,781     $ 116,067  
  

 

 

   

 

 

   

 

 

 

Basic earnings per common share

   $ 2.18     $ 4.92     $ 3.97  

Diluted earnings per common share

   $ 2.14     $ 4.68     $ 3.65  

Weighted average common shares

      

Basic

     32,615       30,857       29,225  

Diluted

     33,165       32,835       32,562  

Dividends declared per common share

   $ 1.00     $ 0.96     $ 0.86  

 

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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,  
     2019     2018     2017  

Cash flows from operating activities:

      

Net earnings

   $ 105,811     $ 172,063     $ 160,462  

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

      

Deferred income taxes

     (20,225     (40,496     4,377  

Depreciation and amortization

     83,731       74,356       65,129  

Net gain on disposition of equipment

     (40,963     (44,369     (9,740

Stock based compensation expense

     11,153       29,314       26,427  

Accretion of debt discount

     4,458       4,171       2,340  

Noncontrolling interest adjustments

     7,402       2,864       (677

Goodwill Impairment

     10,025       —         —    

Other

     145       1,688       (845

Decrease (increase) in assets:

      

Accounts receivable, net

     13,022       (83,551     (25,272

Inventories

     (143,168     (26,592     (2,787

Leased railcars for syndication

     (96,110     (54,023     41,015  

Other

     6,843       34,115       17,558  

Increase (decrease) in liabilities:

      

Accounts payable and accrued liabilities

     55,910       54,032       (25,422

Deferred revenue

     (19,275     (20,231     33,039  
  

 

 

   

 

 

   

 

 

 

Net cash provided by (used in) operating activities

     (21,241     103,341       285,604  
  

 

 

   

 

 

   

 

 

 

Cash flows from investing activities:

      

Acquisitions, net of cash acquired

     (361,878     (34,874     (27,127

Proceeds from sales of assets

     125,427       153,224       24,149  

Capital expenditures

     (198,233     (176,848     (86,065

Investment in and advances to unconsolidated affiliates

     (11,393     (26,455     (40,632

Cash distribution from joint ventures

     2,096       4,661       550  
  

 

 

   

 

 

   

 

 

 

Net cash used in investing activities

     (443,981     (80,292     (129,125
  

 

 

   

 

 

   

 

 

 

Cash flows from financing activities:

      

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

     (105     23,401       4,324  

Proceeds from issuance of notes payable

     525,000       13,771       276,093  

Repayments of notes payable

     (182,971     (22,269     (8,297

Debt issuance costs

     (8,630     —         (9,082

Dividends

     (33,193     (29,914     (24,890

Cash distribution to joint venture partner

     (16,879     (73,033     (28,511

Investment by joint venture partner

     —         6,500       —    

Tax payments for net share settlement of restricted stock

     (6,321     (7,723     (5,215
  

 

 

   

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     276,901       (89,267     204,422  
  

 

 

   

 

 

   

 

 

 

Effect of exchange rate changes

     (12,666     (14,666     12,499  

Increase (decrease) in cash and cash equivalents and restricted cash

     (200,987     (80,884     373,400  

Cash and cash equivalents and restricted cash

      

Beginning of period

     539,474       620,358       246,958  
  

 

 

   

 

 

   

 

 

 

End of period

   $ 338,487     $ 539,474     $ 620,358  
  

 

 

   

 

 

   

 

 

 

Balance Sheet Reconciliation:

      

Cash and cash equivalents

   $ 329,684     $ 530,655     $ 611,466  

Restricted cash

     8,803       8,819       8,892  
  

 

 

   

 

 

   

 

 

 

Total cash and cash equivalents and restricted cash as presented above

   $ 338,487     $ 539,474     $ 620,358  
  

 

 

   

 

 

   

 

 

 

 

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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 2019 are as follows:

 

     First     Second     Third     Fourth     Total  

Revenue

          

Manufacturing

   $ 471,789     $ 476,019     $ 681,588     $ 802,103     $ 2,431,499  

Wheels, Repair & Parts

     108,543       125,278       124,980       85,701       444,502  

Leasing & Services

     24,191       57,374       49,584       26,441       157,590  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     604,523     658,671     856,152     914,245     3,033,591  

Cost of revenue

          

Manufacturing

     417,805       442,996       590,788       686,036       2,137,625  

Wheels, Repair & Parts

     100,978       118,455       119,821       81,636       420,890  

Leasing & Services

     13,207       43,376       38,971       13,036       108,590  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     531,990     604,827     749,580     780,708     2,667,105  

Margin

     72,533       53,844       106,572       133,537       366,486  

Selling and administrative expense

     50,432       47,892       54,377       60,607       213,308  

Net gain on disposition of equipment

     (14,353     (12,102     (11,019     (3,489     (40,963

Goodwill impairment

     —         —         10,025       —         10,025  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings from operations

     36,454       18,054       53,189       76,419       184,116  

Other costs

          

Interest and foreign exchange

     4,404       9,237       9,770       7,501       30,912  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     32,050       8,817       43,419       68,918       153,204  

Income tax expense

     (9,135     (2,248     (13,008     (17,197     (41,588
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings before earnings (loss) from unconsolidated affiliates

     22,915       6,569       30,411       51,721       111,616  

Earnings (loss) from unconsolidated affiliates

     467       (786     (4,564     (922     (5,805
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net earnings

     23,382       5,783       25,847       50,799       105,811  

Net earnings attributable to noncontrolling interest

     (5,426     (3,018     (10,599     (15,692     (34,735
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net earnings attributable to Greenbrier

   $ 17,956     $ 2,765     $ 15,248     $ 35,107     $ 71,076  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings per common share (1)

   $ 0.55     $ 0.08     $ 0.47     $ 1.08     $ 2.18  

Diluted earnings per common share (1)

   $ 0.54     $ 0.08     $ 0.46     $ 1.06     $ 2.14  

 

(1) 

Quarterly amounts do not total to the year to date amount as each period is calculated discretely. Diluted EPS is calculated by including the dilutive effect, using the treasury stock method, associated with shares underlying the 2.875% Convertible notes, 2.25% Convertible notes, restricted stock units that are not considered participating securities and performance based restricted stock units subject to performance criteria, for which actual levels of performance above target have been achieved.

 

- 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 2018 are as follows:

 

     First     Second     Third     Fourth     Total  

Revenue

          

Manufacturing

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

Wheels, Repair & Parts

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

Leasing & Services

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

 

 

   

 

 

   

 

 

   

 

 

   

 

 

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

Cost of revenue

          

Manufacturing

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

Wheels, Repair & Parts

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

Leasing & Services

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

 

 

   

 

 

   

 

 

   

 

 

   

 

 

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

Margin

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

Selling and administrative expense

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

Net gain on disposition of equipment

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

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings from operations

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

Other costs

          

Interest and foreign exchange

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

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

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

Income tax benefit (expense)

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

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings before earnings (loss) from unconsolidated affiliates

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

Earnings (loss) from unconsolidated affiliates

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

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net earnings

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

Net earnings attributable to noncontrolling interest

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

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net earnings attributable to Greenbrier

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

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings per common share (1)

   $ 0.90     $ 2.10     $ 1.03     $ 0.95     $ 4.92  

Diluted earnings per common share (1)

   $ 0.83     $ 1.91     $ 1.01     $ 0.94     $ 4.68  

 

(1) 

Quarterly amounts do not total to the year to date amount as each period is calculated discretely. Diluted EPS is 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 2.875% Convertible notes, restricted stock units that are not considered participating securities and performance based restricted stock units 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 3.5% 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 3.5% Convertible notes are included in the calculation of both approaches using the treasury stock method when the average stock price is greater than the applicable conversion price.

 

- 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, 2019:

 

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

Manufacturing

   $ 802,103      $ 14,829     $ 816,932     $ 94,628     $ 1,579     $ 96,207  

Wheels, Repair & Parts

     85,701        11,826       97,527       (191     640       449  

Leasing & Services

     26,441        13,482       39,923       10,883       13,061       23,944  

Eliminations

     —          (40,137     (40,137     —         (15,280     (15,280

Corporate

     —          —         —         (28,901     —         (28,901
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   $ 914,245      $ —       $ 914,245     $ 76,419     $ —       $ 76,419  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Three months ended May 31, 2019:

 

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

Manufacturing

   $  681,588      $ 29,201     $ 710,789     $ 72,110       2,000     $ 74,110  

Wheels, Repair & Parts

     124,980        11,601       136,581       (8,820     808       (8,012

Leasing & Services

     49,584        5,848       55,432       15,337       4,913       20,250  

Eliminations

     —          (46,650     (46,650     —         (7,721     (7,721

Corporate

     —          —         —         (25,438     —         (25,438
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   $ 856,152      $ —       $ 856,152     $ 53,189     $ —       $ 53,189  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

     Total assets  
     August 31,
2019
     May 31,
2019
 

Manufacturing

   $ 1,606,571      $ 1,143,718  

Wheels, Repair & Parts

     306,725        307,630  

Leasing & Services

     708,799        650,483  

Unallocated

     368,542        411,357  
  

 

 

    

 

 

 
   $ 2,990,637      $ 2,513,188  
  

 

 

    

 

 

 

 

- 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,
2019
     May 31,
2019
     August 31,
2019
 

Net earnings

   $ 50,799      $ 25,847      $ 105,811  

Interest and foreign exchange

     7,501        9,770        30,912  

Income tax expense

     17,197        13,008        41,588  

Depreciation and amortization

     22,898        20,018        83,731  

Goodwill impairment

     —          10,025        10,025  

ARI acquisition costs

     10,971        5,761        18,820  
  

 

 

    

 

 

    

 

 

 

Adjusted EBITDA

   $ 109,366      $ 84,429      $ 290,887  
  

 

 

    

 

 

    

 

 

 

 

     Three Months
Ended
August 31,
2019
     Year
Ended
August 31,
2019
 

Backlog Activity (units) (1)

     

Beginning backlog

     26,100        27,400  

Orders received

     4,900        20,600  

Transfer of ARI backlog

     10,600        10,600  

Removal of small cube hoppers

     (3,500      (3,500

Produced onto Balance Sheet

     (2,300      (6,200

Produced & delivered from backlog

     (5,500      (18,600
  

 

 

    

 

 

 

Ending backlog

     30,300        30,300  
  

 

 

    

 

 

 

Delivery Information (units) (1)

     

Production sold directly to third parties

     5,500        18,600  

Sales of Leased railcars for syndication

     1,800        4,800  
  

 

 

    

 

 

 

Total deliveries

     7,300        23,400  
  

 

 

    

 

 

 

 

(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

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,
2019
     May 31,
2019
     August 31,
2019
 

Weighted average basic common shares outstanding (1)

     32,591        32,603        32,615  

Dilutive effect of convertible notes (2)

     —          —          —    

Dilutive effect of restricted stock units (3)

     585        580        550  
  

 

 

    

 

 

    

 

 

 

Weighted average diluted common shares outstanding

     33,176        33,183        33,165  
  

 

 

    

 

 

    

 

 

 

 

(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 2.875% Convertible notes issued in February 2017 and the 2.25% Convertible notes issued in July 2019 were excluded for the periods in which they were outstanding as the average stock price was less than the applicable conversion price and therefore was anti-dilutive.

(3) 

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

Reconciliation of Net earnings attributable to Greenbrier to Adjusted net earnings attributable to Greenbrier

 

     Three Months Ended      Year Ended  
     August 31,
2019
     May 31,
2019
     August 31,
2019
 

Net earnings attributable to Greenbrier

   $ 35,107      $ 15,248      $ 71,076  

Goodwill impairment

     —          10,025        10,025  

ARI acquisition costs, net of tax

     8,228        4,285        14,079  
  

 

 

    

 

 

    

 

 

 

Adjusted net earnings attributable to Greenbrier

   $ 43,335      $ 29,558      $ 95,180  
  

 

 

    

 

 

    

 

 

 

Reconciliation of Diluted earnings per share to Adjusted diluted earnings per share

 

     Three Months Ended     Year Ended  
     August 31,
2019
    May 31,
2019
    August 31,
2019
 

Diluted earnings per share

   $ 1.06     $ 0.46     $ 2.14  

Goodwill impairment

     —         0.30 (1)      0.30 (1) 

ARI acquisition costs

     0.25 (3)      0.13 (2)      0.43 (4) 
  

 

 

   

 

 

   

 

 

 

Adjusted diluted earnings per share

   $ 1.31     $ 0.89     $ 2.87  
  

 

 

   

 

 

   

 

 

 

 

(1)

Goodwill impairment of $10.0 million divided by weighted average diluted common shares outstanding of 33,183 for the three months ended May 31, 2019 and divided by weighted average diluted common shares outstanding of 33,165 for the year ended August 31, 2019.

(2)

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

(3)

ARI integration costs of $8.2 million, net of tax, divided by weighted average diluted common shares outstanding of 33,176 for the three months ended August 31, 2019.

(4)

ARI integration costs of $14.1 million, net of tax, divided by weighted average diluted common shares outstanding of 33,165 for the year ended August 31, 2019.

 

- More -

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