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

Third Quarter Highlights

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

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

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

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

Business Outlook

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

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

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

Financial Summary

Q3
FY18

Q2 FY18

Sequential Comparison - Main Drivers

Revenue

$641.4M

$629.3M

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

Gross margin

16.9%

16.7%

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

Selling and

administrative expense

$51.8M

$50.3M

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

Net gain on disposition

of equipment

$14.8M

$5.8M

Reflects continued rebalancing of lease portfolio

Adjusted EBITDA

$86.9M

$79.1M

Higher gain on sale and operating margin

Effective tax rate

24.5%

(21.0%)

Q2 included non-recurring benefit from the Tax Act

Earnings (loss) from

unconsolidated affiliates

($12.8M) 1

$0.1M

Adjusted net earnings attributable to Greenbrier

$42.4M

$61.6M2

Adjusted diluted EPS

$1.30

$1.912

(1) Includes $9.5 million, net of tax, or $0.29per share, impact associated with a non-cash goodwill impairment charge recorded by GBW.
(2) Q2 included a non-recurring net benefit of $22.9 million, or $0.70per share, from the Tax Act.

Segment Summary

Q3 FY18

Q2 FY18

Sequential Comparison - Main Drivers

Manufacturing

Revenue

$510.1M

$511.8M

Primarily attributable to product mix

Gross margin

16.1%

16.2%

Continued strong performance

Operating margin (1)

12.2%

12.3%

Deliveries (2)

5,100

4,300

Increased syndication activity

Wheels & Parts

Revenue

$94.5M

$88.7M

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

Gross margin

9.2%

9.0%

Improved operating efficiencies

Operating margin (1)

5.9%

5.8%

Leasing & Services

Revenue

$36.8M

$28.8M

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

Gross margin

47.9%

51.0%

Down primarily due to lower margins on externally sourced railcar syndications

Operating margin (1) (3)

72.6%

56.0%

Lease fleet utilization

90.4%

92.2%

(1) See supplemental segment information on page 10 for additional information.
(2) Excludes Brazildeliveries which are not consolidated into manufacturing revenue and margins.
(3) Includes Net gain on disposition of equipment, which is not included in gross margin.

Conference Call

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

Teleconference details are as follows:

  • June 29, 2018
  • 8:00 a.m. Pacific Daylight Time
  • Phone: 1-630-395-0143, Password: 'Greenbrier'
  • Real-time Audio Access: ('Newsroom' at http://www.gbrx.com)

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

About Greenbrier

Greenbrier­­, headquartered in Lake Oswego, Oregon, is a leading international supplier of equipment and services to global freight transportation markets. Greenbrier designs, builds and markets freight railcars and marine barges in North America. Greenbrier-Astra Railis an end-to-end freight railcar manufacturing, engineering and repair business with operations in Polandand Romaniathat serves customers across Europeand in the nations of the GCC. Greenbrier builds freight railcars and rail castings in Brazilthrough two separate strategic partnerships. We are a leading provider of wheel services, parts, railcar management & regulatory compliance services and leasing services to railroads and related transportation industries in North America. Greenbrier offers freight railcar repair, refurbishment and retrofitting services in North Americathrough GBW, a joint venture with Watco Companies, LLC. Through other unconsolidated joint ventures, we produce tank heads and other components and have an ownership stake in a leasing warehouse. Greenbrier owns a lease fleet of 7,900 railcars and performs management services for 356,000 railcars. Learn more about Greenbrier at www.gbrx.com.

'SAFE HARBOR' STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: This press release may contain forward-looking statements, including any statements that are not purely statements of historical fact. Greenbrier uses words such as 'anticipates,' 'believes,' 'forecast,' 'potential,' 'goal,' 'contemplates,' 'expects,' 'intends,' 'plans,' 'projects,' 'hopes,' 'seeks,' 'estimates,' 'strategy,' 'could,' 'would,' 'should,' 'likely,' 'will,' 'may,' 'can,' 'designed to,' 'future,' 'foreseeable future' and similar expressions to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to certain risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements. Factors that might cause such a difference include, but are not limited to, reported backlog and awards that are not indicative of Greenbrier's financial results; uncertainty or changes in the credit markets and financial services industry; high levels of indebtedness and compliance with the terms of Greenbrier's indebtedness; write-downs of goodwill, intangibles and other assets in future periods; sufficient availability of borrowing capacity; fluctuations in demand for newly manufactured railcars or failure to obtain orders as anticipated in developing forecasts; loss of one or more significant customers; customer payment defaults or related issues; policies and priorities of the federal government regarding international trade, taxation and infrastructure; sovereign risk to contracts, exchange rates or property rights; actual future costs and the availability of materials and a trained workforce; failure to design or manufacture new products or technologies or to achieve certification or market acceptance of new products or technologies; steel or specialty component price fluctuations and availability and scrap surcharges; changes in product mix and the mix between segments; labor disputes, energy shortages or operating difficulties that might disrupt manufacturing operations or the flow of cargo; production difficulties and product delivery delays as a result of, among other matters, costs or inefficiencies associated with expansion, start-up, or changing of production lines or changes in production rates, changing technologies, transfer of production between facilities or non-performance of alliance partners, subcontractors or suppliers; ability to obtain suitable contracts for the sale of leased equipment and risks related to car hire and residual values; integration of current or future acquisitions and establishment of joint ventures; succession planning; discovery of defects in railcars or services resulting in increased warranty costs or litigation; physical damage or product or service liability claims that exceed Greenbrier's insurance coverage; train derailments or other accidents or claims that could subject Greenbrier to legal claims; actions or inactions by various regulatory agencies including potential environmental remediation obligations or changing tank car or other railcar or railroad regulation; and issues arising from investigations of whistleblower complaints; all as may be discussed in more detail under the headings 'Risk Factors' and 'Forward Looking Statements' in Greenbrier's Annual Report on Form 10-K for the fiscal year ended August 31, 2017, Greenbrier's Quarterly Report on Form 10-Q for the fiscal quarter ended February 28, 2018, and Greenbrier's other reports on file with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's opinions only as of the date hereof. Except as otherwise required by law, Greenbrier does not assume any obligation to update any forward-looking statements.

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

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

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

THE GREENBRIER COMPANIES, INC.

Consolidated Balance Sheets

(In thousands, unaudited)

May 31,

2018

Feb. 28,

2018

Nov. 30,

2017

Aug. 31,

2017

May 31,

2017

Assets

Cash and cash equivalents

$ 589,969

$ 586,008

$ 591,406

$ 611,466

$ 465,413

Restricted cash

9,204

8,875

8,839

8,892

8,753

Accounts receivable, net

322,328

321,795

315,393

279,964

267,830

Inventories

396,518

408,419

411,371

400,127

414,012

Leased railcars for syndication

158,194

168,748

130,991

91,272

149,119

Equipment on operating leases, net

302,074

258,417

274,598

315,941

315,976

Property, plant and equipment, net

424,035

429,465

426,961

428,021

330,471

Investment in unconsolidated affiliates

75,884

98,009

101,529

108,255

110,058

Intangibles and other assets, net

82,030

83,308

83,819

85,177

68,930

Goodwill

70,347

69,011

67,783

68,590

43,265

$ 2,430,583

$ 2,432,055

$ 2,412,690

$ 2,397,705

$ 2,173,827

Liabilities and Equity

Revolving notes

$ 20,337

$ 7,990

$ 6,885

$ 4,324

$ -

Accounts payable and accrued liabilities

447,827

461,088

441,373

415,061

339,001

Deferred income taxes

36,657

41,257

69,984

75,791

80,482

Deferred revenue

102,919

85,886

120,044

129,260

82,006

Notes payable, net

437,833

559,755

558,987

558,228

532,638

Contingently redeemable noncontrolling interest

31,135

33,046

35,209

36,148

-

Total equity - Greenbrier

1,225,512

1,095,447

1,032,557

1,018,130

986,221

Noncontrolling interest

128,363

147,586

147,651

160,763

153,479

Total equity

1,353,875

1,243,033

1,180,208

1,178,893

1,139,700

$ 2,430,583

$ 2,432,055

$ 2,412,690

$ 2,397,705

$ 2,173,827

THE GREENBRIER COMPANIES, INC.

Consolidated Statements of Income

(In thousands, except per share amounts, unaudited)

Three Months Ended

May 31,

Nine Months Ended

May 31,

2018

2017

2018

2017

Revenue

Manufacturing

$ 510,099

$ 317,104

$ 1,473,411

$ 1,216,641

Wheels & Parts

94,515

85,231

261,236

237,580

Leasing & Services

36,773

36,826

95,611

103,536

641,387

439,161

1,830,258

1,557,757

Cost of revenue

Manufacturing

427,875

245,228

1,237,890

948,436

Wheels & Parts

85,850

77,985

239,064

218,460

Leasing & Services

19,155

26,247

50,136

69,484

532,880

349,460

1,527,090

1,236,380

Margin

108,507

89,701

303,168

321,377

Selling and administrative expense

51,793

42,810

149,130

123,518

Net gain on disposition of equipment

(14,825)

(1,581)

(39,813)

(4,793)

Earnings from operations

71,539

48,472

193,851

202,652

Other costs

Interest and foreign exchange

6,533

7,894

20,582

15,291

Earnings before income tax and loss from unconsolidated affiliates

65,006

40,578

173,269

187,361

Income tax expense

(15,944)

(8,656)

(22,778)

(53,900)

Earnings before loss from unconsolidated affiliates

49,062

31,922

150,491

133,461

Loss from unconsolidated affiliates

(12,823)

(681)

(15,586)

(5,253)

Net earnings

36,239

31,241

134,905

128,208

Net (earnings) loss attributable to noncontrolling interest

(3,288)

1,582

(14,059)

(35,887)

Net earnings attributable to Greenbrier

$ 32,951

$ 32,823

$ 120,846

$ 92,321

Basic earnings per common share:

$ 1.03

$ 1.12

$ 3.99

$ 3.16

Diluted earnings per common share:

$ 1.01

$ 1.03

$ 3.75

$ 2.91

Weighted average common shares:

Basic

32,034

29,348

30,250

29,192

Diluted

32,914

32,690

32,774

32,515

Dividends declared per common share

$ 0.25

$ 0.22

$ 0.71

$ 0.64

THE GREENBRIER COMPANIES, INC.

Consolidated Statements of Cash Flows

(In thousands, unaudited)

Nine Months Ended
May 31,

2018

2017

Cash flows from operating activities:

Net earnings

$

134,905

$ 128,208

Adjustments to reconcile net earnings to net cash

provided by operating activities:

Deferred income taxes

(38,825)

16,815

Depreciation and amortization

55,161

46,616

Net gain on disposition of equipment

(39,813)

(4,793)

Accretion of debt discount

3,109

1,329

Stock based compensation expense

20,311

19,007

Noncontrolling interest adjustments

1,067

1,203

Other

1,345

1,017

(Increase) decrease in assets:

Accounts receivable, net

(24,980)

(27,109)

Inventories

(4,270)

(47,209)

Leased railcars for syndication

(69,994)

(16,122)

Other

30,549

8,419

Increase (decrease) in liabilities:

Accounts payable and accrued liabilities

34,898

(35,800)

Deferred revenue

(23,837)

(13,650)

Net cash provided by operating activities

79,626

77,931

Cash flows from investing activities:

Proceeds from sales of assets

129,828

20,344

Capital expenditures

(118,656)

(53,848)

Decrease in restricted cash

(312)

15,526

Investment in and advances to unconsolidated affiliates

(21,455)

(34,068)

Cash distribution from unconsolidated affiliates

3,941

550

Net cash used in investing activities

(6,654)

(51,496)

Cash flows from financing activities:

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

16,013

-

Proceeds from issuance of notes payable

13,749

275,000

Repayments of notes payable

(19,274)

(5,469)

Debt issuance costs

-

(9,082)

Dividends

(21,866)

(18,619)

Cash distribution to joint venture partner

(69,413)

(27,267)

Investment by joint venture partner

6,500

-

Tax payments for net share settlement of restricted stock

(7,716)

(5,208)

Excess tax deficiency from restricted stock awards

-

(2,396)

Net cash provided by (used in) financing activities

(82,007)

206,959

Effect of exchange rate changes

(12,462)

9,340

Increase (decrease) in cash and cash equivalents

(21,497)

242,734

Cash and cash equivalents

Beginning of period

611,466

222,679

End of period

$

589,969

$ 465,413

THE GREENBRIER COMPANIES, INC.

Supplemental Information

(In thousands, except per share amounts, unaudited)

Operating Results by Quarter for 2018 are as follows:

First

Second

Third

Total

Revenue

Manufacturing

$ 451,485

$ 511,827

$ 510,099

$ 1,473,411

Wheels & Parts

78,011

88,710

94,515

261,236

Leasing & Services

30,039

28,799

36,773

95,611

559,535

629,336

641,387

1,830,258

Cost of revenue

Manufacturing

380,850

429,165

427,875

1,237,890

Wheels & Parts

72,506

80,708

85,850

239,064

Leasing & Services

16,865

14,116

19,155

50,136

470,221

523,989

532,880

1,527,090

Margin

89,314

105,347

108,507

303,168

Selling and administrative expense

47,043

50,294

51,793

149,130

Net gain on disposition of equipment

(19,171)

(5,817)

(14,825)

(39,813)

Earnings from operations

61,442

60,870

71,539

193,851

Other costs

Interest and foreign exchange

7,020

7,029

6,533

20,582

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

54,422

53,841

65,006

173,269

Income tax benefit (expense)

(18,135)

11,301

(15,944)

(22,778)

Earnings before earnings (loss) from unconsolidated affiliates

36,287

65,142

49,062

150,491

Earnings (loss) from unconsolidated affiliates

(2,910)

147

(12,823)

(15,586)

Net earnings

33,377

65,289

36,239

134,905

Net earnings attributable to noncontrolling interest

(7,124)

(3,647)

(3,288)

(14,059)

Net earnings attributable to Greenbrier

$ 26,253

$ 61,642

$ 32,951

$ 120,846

Basic earnings per common share (1)

$ 0.90

$ 2.10

$ 1.03

$ 3.99

Diluted earnings per common share (1)

$ 0.83

$ 1.91

$ 1.01

$ 3.75

(1)

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

THE GREENBRIER COMPANIES, INC.

Supplemental Information

(In thousands, except per share amounts, unaudited)

Operating Results by Quarter for 2017 are as follows:

First

Second

Third

Fourth

Total

Revenue

Manufacturing

$ 454,033

$ 445,504

$ 317,104

$ 508,547

$ 1,725,188

Wheels & Parts

69,635

82,714

85,231

75,099

312,679

Leasing & Services

28,646

38,064

36,826

27,761

131,297

552,314

566,282

439,161

611,407

2,169,164

Cost of revenue

Manufacturing

356,555

346,653

245,228

425,531

1,373,967

Wheels & Parts

64,978

75,497

77,985

69,876

288,336

Leasing & Services

18,030

25,207

26,247

16,078

85,562

439,563

447,357

349,460

511,485

1,747,865

Margin

112,751

118,925

89,701

99,922

421,299

Selling and administrative expense

41,213

39,495

42,810

47,089

170,607

Net gain on disposition of equipment

(1,122)

(2,090)

(1,581)

(4,947)

(9,740)

Earnings from operations

72,660

81,520

48,472

57,780

260,432

Other costs

Interest and foreign exchange

1,724

5,673

7,894

8,901

24,192

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

70,936

75,847

40,578

48,879

236,240

Income tax expense

(20,386)

(24,858)

(8,656)

(10,114)

(64,014)

Earnings before earnings (loss) from unconsolidated affiliates

50,550

50,989

31,922

38,765

172,226

Earnings (loss) from unconsolidated affiliates

(2,584)

(1,988)

(681)

(6,511)

(11,764)

Net earnings

47,966

49,001

31,241

32,254

160,462

Net earnings attributable to

noncontrolling interest

(23,004)

(14,465)

1,582

(8,508)

(44,395)

Net earnings attributable to Greenbrier

$ 24,962

$ 34,536

$ 32,823

$ 23,746

$ 116,067

Basic earnings per common share (1)

$ 0.86

$ 1.19

$ 1.12

$ 0.81

$ 3.97

Diluted earnings per common share (1)

$ 0.79

$ 1.09

$ 1.03

$ 0.75

$ 3.65

(1)

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

THE GREENBRIER COMPANIES, INC.

Supplemental Information

(In thousands, unaudited)

Segment Information

Three months ended May 31, 2018:

Revenue

Earnings (loss) from operations

External

Intersegment

Total

External

Intersegment

Total

Manufacturing

$ 510,099

$ 53,501

$ 563,600

$ 62,435

$ 6,215

$ 68,650

Wheels & Parts

94,515

10,879

105,394

5,546

686

6,232

Leasing & Services

36,773

3,886

40,659

26,704

3,380

30,084

Eliminations

-

(68,266)

(68,266)

-

(10,281)

(10,281)

Corporate

-

-

-

(23,146)

-

(23,146)

$ 641,387

$ -

$ 641,387

$ 71,539

$ -

$ 71,539

Three months ended February 28, 2018:

Revenue

Earnings (loss) from operations

External

Intersegment

Total

External

Intersegment

Total

Manufacturing

$ 511,827

$ 13,948

$ 525,775

$ 63,185

$ 3,415

$ 66,600

Wheels & Parts

88,710

8,951

97,661

5,119

780

5,899

Leasing & Services

28,799

4,365

33,164

16,114

3,794

19,908

Eliminations

-

(27,264)

(27,264)

-

(7,989)

(7,989)

Corporate

-

-

-

(23,548)

-

(23,548)

$ 629,336

$ -

$ 629,336

$ 60,870

$ -

$ 60,870

Total assets

May 31,

2018

February 28,

2018

Manufacturing

$ 924,869

$ 911,505

Wheels & Parts

243,641

260,077

Leasing & Services

578,259

565,626

Unallocated

683,814

694,847

$ 2,430,583

$ 2,432,055

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

As of and for the

Three Months Ended

May 31,
2018

February 28,
2018

Revenue

$ 67,200

$ 62,700

Loss from operations

$ (29,500)

$ (5,500)

Total assets

$ 177,800

$ 208,500

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

THE GREENBRIER COMPANIES, INC.

Supplemental Information

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

Reconciliation of Net earnings to Adjusted EBITDA

Three Months Ended

May 31,

2018

February 28,

2018

Net earnings

$ 36,239

$ 65,289

Interest and foreign exchange

6,533

7,029

Income tax expense (benefit)

15,944

(11,301))

Depreciation and amortization

18,707

18,084

GBW goodwill impairment

9,493

-

Adjusted EBITDA

$ 86,916

$ 79,101

Three Months Ended

May 31, 2018

Backlog Activity (units)(1)

Beginning backlog

24,100

Orders received

6,000

Production held as Leased railcars for syndication

(1,600)

Production sold directly to third parties

(4,300)

Ending backlog

24,200

Delivery Information (units)(1)

Production sold directly to third parties

4,300

Sales of Leased railcars for syndication

1,300

Total deliveries

5,600

(1)

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

THE GREENBRIER COMPANIES, INC.

Supplemental Information

(In thousands, except per share amounts, unaudited)

Reconciliation of common shares outstanding and diluted earnings per share

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

Three Months Ended

May 31,

2018

February 28,

2018

Weighted average basic common shares outstanding (1)

32,034

29,355

Dilutive effect of convertible notes (2)

655

3,349

Dilutive effect of restricted stock units (3)

225

7

Weighted average diluted common shares outstanding

32,914

32,711

(1)

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

(2)

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

(3)

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

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

Three Months Ended

May 31,

2018

February 28,

2018

Net earnings attributable to Greenbrier

$ 32,951

$ 61,642

GBW goodwill impairment

9,493

-

Adjusted net earnings attributable to Greenbrier

$ 42,444

$ 61,642

Three Months Ended

May 31,

2018

February 28,

2018

Net earnings attributable to Greenbrier

$ 32,951

$ 61,642

Add back:

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

297

843

Earnings before interest and debt issuance costs on convertible notes

$ 33,248

$ 62,485

Weighted average diluted common shares outstanding

32,914

32,711

Diluted earnings per share

$ 1.01

$ 1.91

GBW goodwill impairment

0.29(1)

-

Adjusted diluted earnings per share

$ 1.30

$ 1.91

(1)

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

SOURCE The Greenbrier Companies, Inc. (GBX)

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The Greenbrier Companies Inc. published this content on 29 June 2018 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 29 June 2018 10:08:03 UTC