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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, Ore., Oct. 25, 2019 /PRNewswire/ -- The Greenbrier Companies, Inc. (GBX) today reported financial results for its fourth fiscal quarter and year ended August 31, 2019.

The Greenbrier Companies Logo (PRNewsfoto/The Greenbrier Companies, Inc.)

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.

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.

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.

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 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.


 

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

 

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









 

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





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.


 

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.

 

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,


May 31,



2019


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


 

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

 

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.

 

Cision

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