Exhibit 99.1

 

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

 

 

For release: January 8, 2020 6:00 a.m. EST      Contact:    Lorie Tekorius, Investor Relations
        Justin Roberts, Investor Relations
        Ph: 503-684-7000

Greenbrier Reports First Quarter Results

~ Announces orders of 4,500 railcars valued at $450 million ~

~ Strong post-quarter orders for 4,400 units were driven by international sources ~

~ Board increases dividend 8% ~

~ Affirms $15 million synergy target ~

Lake Oswego, Oregon, January

 8, 2020 – The Greenbrier Companies, Inc. (NYSE: GBX) today reported financial results for its first fiscal quarter ended November 30, 2019.

First Quarter Highlights

 

Net earnings attributable to Greenbrier for the quarter were $7.7 million, or $0.23 per diluted share, on revenue of $769.4 million. Quarterly results include $2.2 million, net of tax, ($0.07 per share) of integration and acquisition-related expenses from the American Railcar Industries (ARI) acquisition.

 

Adjusted net earnings attributable to Greenbrier for the quarter were $9.9 million, or $0.30 per diluted share, excluding $0.07 of ARI integration and acquisition-related expenses.

 

Adjusted EBITDA for the quarter was $74.2 million, or 9.6% of revenue.

 

Pre-tax ARI synergies of $2.8 million were achieved in the quarter. Annual synergy target of $15.0 million is affirmed.

 

Orders for 4,500 diversified railcars were received during the quarter, valued at $450 million.

 

Orders subsequent to Q1 exceed 4,400 units driven by international sources, including a significant multi-year order in Brazil for new railcars. Additionally, an agreement to rebuild nearly 850 Brazilian railcars was finalized.

 

New railcar backlog as of November 30, 2019 was 28,500 units with an estimated value of $3.1 billion. Subsequent to the quarter, Greenbrier agreed in principle to remove 575 units in backlog in exchange for financial consideration.

 

New railcar deliveries totaled 6,200 units for the quarter.

 

Board increases quarterly dividend 8.0% to $0.27 per share, payable on February 18, 2020 to shareholders as of January 28, 2020.

William A. Furman, Chairman and CEO, said, “Greenbrier’s strategy of strengthening its core North American market, international diversification, talent development and growing the business at scale is working. Employees performed well as we continued the integration of our largest-ever

 

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Greenbrier Reports First Quarter Results (Cont.)    Page  2

 

acquisition in North America. The synergies Greenbrier sought in acquiring the ARI manufacturing assets yielded $2.8 million in the first quarter, a good start toward achieving the fiscal 2020 synergy target of $15 million. Despite a weak North American freight railcar market, Greenbrier secured worldwide orders in the first quarter of 4,500 units valued at $450 million. Subsequent to quarter-end, Greenbrier received orders for nearly 4,400 railcars including a large multi-year order for our Greenbrier-Maxion JV in Brazil. Europe also recorded strong post-quarter orders. Included in post-quarter orders was a large award in North America from a customer in Saudi Arabia. These orders underline the traction Greenbrier is gaining internationally and the power of a developing globally integrated model. The December orders, along with Greenbrier’s backlog of 28,500 units at November 30, worth more than $3 billion, provide good global visibility. Given overall progress through the first three months, we are on track to achieve our guidance for the year, although quarterly performance will not be linear.”

Furman added, “Greenbrier’s uneven performance in the first quarter of fiscal 2020 fell short of our expectations. Operating inefficiencies and component supply issues triggered lost production days and reduced production at one of our newly-acquired ARI facilities. Therefore, a higher proportion of quarterly railcar deliveries originated from our 50/50 joint venture at GIMSA in Mexico, which impacted net earnings. The operating inefficiencies and supplier issues are being addressed.”

Furman concluded, “Looking ahead, fiscal 2020 remains a year of execution and responsiveness to a rapidly changing demand environment. The ARI integration is complex, but progressing favorably. Likewise, we are continuing remedial actions at Greenbrier Rail Services including Repair, and expect these operations to improve through the year. Our focus remains on managing recent acquisitions, generating positive cash flow, and creating long-term shareholder value through efficient capital allocation.”

Fiscal 2020 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.

 

Adjusted diluted EPS will be $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 First Quarter Results (Cont.)    Page  3

 

Financial Summary

 

     Q1 FY20      Q4 FY19     

Sequential Comparison – Main Drivers

Revenue

   $ 769.4M      $ 914.2M      Lower deliveries than record Q4 activity

Gross margin

     12.0      14.6    Inefficiencies due to production delays and minimal syndication activity

Selling and

administrative expense

   $ 54.4M      $ 60.6M      Q1 reflects full quarter of acquired operations while Q4 included $11.0 million of acquisition expense

Interest and foreign exchange

   $ 12.9M      $ 7.5M      Increased debt levels associated with July 2019 acquisition

Adjusted EBITDA

   $ 74.2M      $ 109.4M      Primarily lower operating margin

Effective tax rate

     20.7      25.0    Impact of discrete items and GIMSA JV earnings

Earnings (Loss) from

unconsolidated affiliates

   $ 1.1M      ($ 0.9M    Strong performance at JV acquired as part of ARI and improved performance in Brazil

Net earnings attributable

to noncontrolling interest

   $ 16.3M      $ 15.7M      Continued strong performance at GIMSA JV

Adjusted net earnings attributable to Greenbrier

   $ 9.9M (1)     $ 43.3M (2)     Lower revenue, deliveries and operating margin versus strong Q4

Adjusted diluted EPS

   $ 0.30 (1)     $ 1.31 (2)    

 

(1) 

Excludes expense of $2.2 million ($0.07 per share), net of tax, associated with ARI integration and acquisition-related expenses.

(2) 

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

Segment Summary

 

     Q1 FY20      Q4 FY19    

Sequential Comparison – Main Drivers

Manufacturing

Revenue

   $ 657.4M      $ 802.1M     Fewer deliveries than record Q4, reflecting production delays and minimal syndication activity

Gross margin

     11.5      14.5  

Inefficiencies due to production delays and minimal syndication activity

Operating margin (1)

     8.1      11.8  

Deliveries (2)

     5,900        7,300    

Fewer deliveries than record Q4

Wheels, Repair & Parts

Revenue

   $ 86.6M      $ 85.7M    

Improved mix partially offset by lower volume of wheels

Gross margin

     5.4      4.7  

Benefit of efficiency improvements and cost containment in Repair

Operating margin (1)

     1.3      (0.2 %)   

Leasing & Services

Revenue

   $ 25.4M      $ 26.4M    

Gross margin

     47.3      50.7  

Lower interim rent on certain railcars

Operating margin (1) (3)

     38.5      41.2  

 

(1) 

See supplemental segment information on page 9 for additional information.

(2) 

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

(3) 

Includes Net gain on disposition of equipment, which is excluded from gross margin.

 

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Greenbrier Reports First Quarter Results (Cont.)    Page  4

 

Conference Call

Greenbrier will host a teleconference to discuss its first quarter 2020 results. In conjunction with this news release, Greenbrier has posted a supplemental earnings presentation to our website. Teleconference details are as follows:

 

 

January 8, 2020

 

 

8:00 a.m. Pacific Standard 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 9,300 railcars and performs management services for 385,000 railcars. Learn more about Greenbrier at www.gbrx.com.

Adjusted Financial Metric Definition

Adjusted EBITDA, Adjusted net earnings attributable to Greenbrier, Adjusted diluted EPS and Adjusted 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. Adjusted diluted EPS range excluding integration and acquisition-related expenses from the ARI acquisition excludes 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 First Quarter Results (Cont.)    Page  5     

THE GREENBRIER COMPANIES, INC.

 

CONSOLIDATED BALANCE SHEETS

(In thousands, unaudited)

 

    

November 30,

2019

    

August 31,

2019

    

May 31,

2019

    

February 28,

2019

    

November 30,

2018

 

Assets

              

Cash and cash equivalents

   $ 253,602      $ 329,684      $ 359,625      $ 341,500      $ 462,797      

Restricted cash

     8,648        8,803        21,471        21,584        8,872      

Accounts receivable, net

     313,786        373,383        330,385        335,732        306,917      

Inventories

     733,806        664,693        592,099        574,146        492,573      

Leased railcars for syndication

     135,319        182,269        130,489        163,472        233,415      

Equipment on operating leases, net

     396,187        366,688        376,241        381,336        317,282      

Property, plant and equipment, net

     730,730        717,973        478,502        472,739        461,120      

Investment in unconsolidated affiliates

     85,141        91,818        53,036        58,685        58,682      

Intangibles and other assets, net

     162,089        125,379        97,022        101,284        95,958      

Goodwill

     129,468        129,947        74,318        82,743        77,508      
  

 

 

 
   $ 2,948,776      $ 2,990,637      $ 2,513,188      $ 2,533,221      $ 2,515,124      
  

 

 

 

Liabilities and Equity

              

Revolving notes

   $ 29,502      $ 27,115      $ 25,952      $ 22,323      $ 22,189      

Accounts payable and accrued liabilities

     527,789        568,360        473,106        474,863        438,304      

Deferred income taxes

     9,417        13,946        12,089        29,481        30,631      

Deferred revenue

     59,657        85,070        76,170        91,533        108,566      

Notes payable, net

     817,830        822,885        483,918        486,107        487,764      

Contingently redeemable noncontrolling interest

     31,723        31,564        24,722        25,637        28,449      

Total equity - Greenbrier

     1,281,808        1,276,730        1,262,315        1,257,818        1,257,631      

Noncontrolling interest

     191,050        164,967        154,916        145,459        141,590      
  

 

 

 

Total equity

     1,472,858        1,441,697        1,417,231        1,403,277        1,399,221      
  

 

 

 
   $ 2,948,776      $   2,990,637      $   2,513,188      $ 2,533,221      $ 2,515,124      
  

 

 

 

 

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Greenbrier Reports First Quarter Results (Cont.)    Page  6     

THE GREENBRIER COMPANIES, INC.

 

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts, unaudited)

 

     Three Months Ended    
November 30,
 
     2019     2018      
  

 

 

 

Revenue

    

Manufacturing

     $     657,367     $     471,789     

Wheels, Repair & Parts

     86,608       108,543     

Leasing & Services

     25,384       24,191     
  

 

 

 
     769,359       604,523     

Cost of revenue

    

Manufacturing

     581,912       417,805     

Wheels, Repair & Parts

     81,892       100,978     

Leasing & Services

     13,366       13,207     
  

 

 

 
     677,170       531,990     

Margin

     92,189       72,533     

Selling and administrative expense

     54,364       50,432     

Net gain on disposition of equipment

     (3,959     (14,353)    
  

 

 

 

Earnings from operations

     41,784       36,454     

Other costs

    

Interest and foreign exchange

     12,852       4,404     
  

 

 

 

Earnings before income taxes and earnings from unconsolidated affiliates

     28,932       32,050     

Income tax expense

     (5,994     (9,135)    
  

 

 

 

Earnings before earnings from unconsolidated affiliates

     22,938       22,915     

Earnings from unconsolidated affiliates

     1,073       467     
  

 

 

 

Net earnings

     24,011       23,382     

Net earnings attributable to noncontrolling interest

     (16,342     (5,426)    
  

 

 

 

Net earnings attributable to Greenbrier

     $ 7,669     $ 17,956     
  

 

 

 

Basic earnings per common share:

     $ 0.24     $ 0.55     

Diluted earnings per common share:

     $ 0.23     $ 0.54     

Weighted average common shares:

    

Basic

     32,629       32,640     

Diluted

     33,284       33,093     

Dividends declared per common share

     $ 0.25     $ 0.25     

 

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Greenbrier Reports First Quarter Results (Cont.)    Page  7     

THE GREENBRIER COMPANIES, INC.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)

 

    

Three Months Ended

November 30,

 
     2019     2018  

Cash flows from operating activities

    

Net earnings

   $ 24,011     $ 23,382  

Adjustments to reconcile net earnings to net cash used in operating activities:

    

Deferred income taxes

     (6,515     (2,360

Depreciation and amortization

     29,335       20,700  

Net gain on disposition of equipment

     (3,959     (14,353

Accretion of debt discount

     1,350       1,076  

Stock based compensation expense

     3,157       3,194  

Noncontrolling interest adjustments

     1,736       3,920  

Other

     (391     286  

Decrease (increase) in assets:

    

Accounts receivable, net

     58,488       54,834  

Inventories

     (69,662     (63,045

Leased railcars for syndication

     (13,132     (116,726

Other

     (37,304     (392

Increase (decrease) in liabilities:

    

Accounts payable and accrued liabilities

     (47,421     (10,949

Deferred revenue

     (10,012     3,314  
  

 

 

 

Net cash used in operating activities

     (70,319     (97,119
  

 

 

 

Cash flows from investing activities

    

Proceeds from sales of assets

     27,463       34,497  

Capital expenditures

     (23,216     (28,677

Investment in and advances to unconsolidated affiliates

     (1,500     (11,393

Cash distribution from unconsolidated affiliates and other

     4,452       1,784  
  

 

 

 

Net cash provided by (used in) investing activities

     7,199       (3,789
  

 

 

 

Cash flows from financing activities

    

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

     2,399       (4,840

Proceeds from issuance of notes payable

     -       225,000  

Repayments of notes payable

     (9,749     (173,453

Debt issuance costs

     (4     (2,766

Dividends

     (343     (467

Cash distribution to joint venture partner

     (4,531     (3,185

Tax payments for net share settlement of restricted stock

     (1,870     (4,747
  

 

 

 

Net cash provided by (used in) financing activities

     (14,098     35,542  
  

 

 

 

Effect of exchange rate changes

     981       (2,439

Decrease in cash, cash equivalents and restricted cash

     (76,237     (67,805

Cash and cash equivalents and restricted cash

    

Beginning of period

     338,487       539,474  
  

 

 

 

End of period

   $ 262,250     $ 471,669  
  

 

 

 

Balance Sheet Reconciliation

    

Cash and cash equivalents

   $ 253,602     $ 462,797  

Restricted cash

     8,648       8,872  
  

 

 

 

Total cash and cash equivalents and restricted cash as presented above

   $ 262,250     $ 471,669  
  

 

 

 

 

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Greenbrier Reports First Quarter Results (Cont.)    Page  8     

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.

 

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Greenbrier Reports First Quarter Results (Cont.)    Page  9     

THE GREENBRIER COMPANIES, INC.

 

SUPPLEMENTAL INFORMATION

  (In thousands, unaudited)

Segment Information

  Three months ended November 30, 2019:

 

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

  Manufacturing

     $         657,367        $             97      $         657,464      $ 53,143      $                      (23    $ 53,120  

  Wheels, Repair & Parts

       86,608          5,851        92,459        1,114        (342      772  

  Leasing & Services

       25,384          1,749        27,133        9,777        1,289        11,066  

  Eliminations

       -          (7,697      (7,697      -        (924      (924

  Corporate

       -          -        -        (22,250      -        (22,250
    

 

 

      

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     $ 769,359        $ -      $ 769,359      $         41,784      $ -      $         41,784  
    

 

 

      

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

  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  
    

 

 

      

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

     Total assets  
         November 30,     
2019
         August 31,    
2019
 

Manufacturing

    $         1,568,338         $         1,606,571    

Wheels, Repair & Parts

     317,786          306,725    

Leasing & Services

     776,724          708,799    

Unallocated

     285,928          368,542    
  

 

 

    

 

 

 
    $ 2,948,776         $ 2,990,637    
  

 

 

    

 

 

 

 

- More -


Greenbrier Reports First Quarter Results (Cont.)    Page  10     

THE GREENBRIER COMPANIES, INC.

 

SUPPLEMENTAL INFORMATION

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

Reconciliation of Net earnings to Adjusted EBITDA

 

     Three Months Ended    
  

 

 

 
         November 30,
2019
       August 31,  
2019  
 
  

 

 

 

Net earnings

   $ 24,011        $ 50,799    

Interest and foreign exchange

     12,852          7,501    

Income tax expense

     5,994          17,197    

Depreciation and amortization

     29,335          22,898    

ARI integration & acquisition-related costs

     1,991          10,971    
  

 

 

 

Adjusted EBITDA

   $             74,183        $         109,366    
  

 

 

 

 

 

 

     Three Months
Ended
 
       November 30,    
2019
 

Backlog Activity (units) (1)

  

Beginning backlog

     30,300  

Orders received

     4,500  

Production held as Leased railcars for syndication

     (300

Production sold directly to third parties

     (6,000
  

 

 

 

Ending backlog

     28,500  
  

 

 

 

Delivery Information (units) (1)

  

Production sold directly to third parties

     6,000  

Sales of Leased railcars for syndication

     200  
  

 

 

 

Total deliveries

     6,200  
  

 

 

 

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

 

- More -


Greenbrier Reports First Quarter Results (Cont.)    Page  11     

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  
  

 

 

 
    

November 30,

2019

 

 

    

August 31,

2019

 

 

  

 

 

 

Weighted average basic common shares outstanding (1)

     32,629        32,591  

Dilutive effect of convertible notes (2)

     -        -  

Dilutive effect of restricted stock units (3)

     655        585  
  

 

 

 

Weighted average diluted common shares outstanding

     33,284        33,176  
  

 

 

 

 

(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  
     November 30,
2019
    

August 31,

2019

 
  

 

 

 

Net earnings attributable to Greenbrier

   $ 7,669      $ 35,107    

ARI integration and acquisition-related costs, net of tax

     2,218        8,228    
  

 

 

 

Adjusted net earnings attributable to Greenbrier

   $ 9,887      $               43,335    
  

 

 

 

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

 

     Three Months Ended  
     November 30,
2019
    

August 31,

2019

 
  

 

 

 

Diluted earnings per share

   $ 0.23      $ 1.06    

ARI integration and acquisition-related costs, net of tax

     0.07        0.25    
  

 

 

 

Adjusted diluted earnings per share

   $ 0.30      $                 1.31    
  

 

 

 

 

- More -


Greenbrier Reports First Quarter Results (Cont.)    Page  12     

 

“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 “Fiscal 2020 Outlook”, “Supplemental Information – 2020 Fiscal Year Guidance and 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, the cyclical nature of our business, economic downturns and a rising interest rate environment; changes in our product mix due to shifts in demand or fluctuations in commodity and energy prices; a decline in performance or demand of the rail freight industry; an oversupply or increase in efficiency in the rail freight industry; difficulty integrating acquired businesses or joint ventures; inability to convert backlog to future revenues; risks related to our operations outside of the U.S., including anti-bribery violations; governmental policy changes impacting international trade and corporate tax; the loss of or reduction of business from one or more of our limited number of customers; inability to lease railcars at satisfactory rates, or realize expected residual values on sale of railcars at the end of a lease; shortages of skilled labor, increased labor costs, or failure to maintain good relations with our workforce; equipment failures, technological failures, costs and inefficiencies associated with changing of production lines, or transfer of production between facilities; inability to compete successfully; suitable joint ventures, acquisition opportunities and new business endeavors may not be identified or concluded; inability to complete capital expenditure projects efficiently, or to cause capital expenditure projects to operate as anticipated; inability to design or manufacture products or technologies, or to achieve timely certification or market acceptance of new products or technologies; unsuccessful relationships with our joint venture partners; environmental liabilities, including the Portland Harbor Superfund Site; the timing of our asset sales and related revenue recognition may result in comparisons between fiscal periods not being accurate indicators of future performance; attrition within our management team or unsuccessful succession planning for members of our senior management team and other key employees who are at or nearing retirement age; changes in the credit markets and the financial services industry; volatility in the global financial markets; our actual results differing from our announced expectations; fluctuations in the availability and price of energy, freight transportation, steel and other raw materials; inability to procure specialty components or services on commercially reasonable terms or on a timely basis from a limited number of suppliers; our existing indebtedness may limit our ability to borrow additional amounts in the future, may expose us to increasing interest rates, and may expose us to a material adverse effect on our business if we are unable to service our debt or obtain additional financing; train derailments or other accidents or claims; changes in or failure to comply with legal and regulatory requirements; an adverse outcome in any pending or future litigation or investigation; potential misconduct by employees; labor strikes or work stoppages; the volatility of our stock price; dilution to investors resulting from raising additional capital or due to other reasons; product and service warranty claims; misuse of our products by third parties; write-downs of goodwill or intangibles in future periods; conversion at our option of our outstanding convertible notes resulting in dilution to our then-current stockholders; as a holding company with no operations, our reliance on our subsidiaries and joint ventures and their ability to make distributions to us; our governing documents, the terms of our convertible notes, and Oregon law could make a change of control or acquisition of our business by a third party difficult; the discretion of our Board of Directors to pay or not pay dividends on our common stock; fluctuations in foreign currency exchange rates; inability to raise additional capital to operate our business and achieve our business objectives; shareholder activism could cause us to incur significance expense, impact our stock price, and hinder execution of our business strategy; cybersecurity risks; updates or changes to our information technology systems resulting in problems; inability to protect our intellectual property and prevent its improper use by third parties; claims by third parties that our products or services infringe their intellectual property rights; liability for physical damage, business interruption or product liability claims that exceed our insurance coverage; inability to procure adequate insurance on a cost-effective basis; changes in accounting standards or inaccurate estimates or assumptions in the application of accounting policies; fires, natural disasters, severe weather conditions or public health crises; unusual weather conditions which reduce demand for

 

More


Greenbrier Reports First Quarter Results (Cont.)    Page  13     

 

our wheel-related parts and repair services; business, regulatory, and legal developments regarding climate change which may affect the demand for our products or the ability of our critical suppliers to meet our needs; repercussions from terrorist activities or armed conflict; unanticipated changes in our tax provisions or exposure to additional income tax liabilities; the inability of certain of our customers to utilize tax benefits or tax credits; and suspension or termination of our share repurchase program. 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 filing. 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.

 

#  #  #

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