Greenbrier Cos. (GBX) Tops Q2 EPS by 17c, Revenues Miss

Greenbrier Cos. (NYSE: GBX) reported Q2 EPS of $0.46, $0.17 better than the analyst estimate of $0.29. Revenue for the quarter came in at $623.8 million versus the consensus estimate of $798.97 million.

Second Quarter Highlights

• Base liquidity of $620 million consisting of cash of $170 million and $450 million available under committed credit facilities with high quality lenders. Greenbrier is targeting total liquidity of $1 billion.
• Greenbrier\'s manufacturing and service sites continue operations as "Essential Business" under directives issued by the U.S. Department of Homeland Security (DHS) and other government authorities.
• Orders for 8,500 diversified railcars were received during the quarter, with over 50% originating from international sources. New railcar backlog increased to 30,800 units with an estimated value of $3.2 billion as of February 29, 2020.
• Net earnings attributable to Greenbrier for the quarter were $13.6 million, or $0.41 per diluted share, on revenue of $623.8 million. Net earnings include a mutually beneficial contract modification removing railcars from backlog that would have been produced in the second half of fiscal 2020 in exchange for $9.2 million, after tax. This modification strengthens the quality and amount of Greenbrier's backlog and improves cash on hand.
• Adjusted net earnings attributable to Greenbrier for the quarter were $15.3 million, or $0.46 per diluted share, excluding $1.7 million, after tax, ($0.05 per share) of integration related expenses from the American Railcar Industries (ARI) acquisition.
• Adjusted EBITDA for the quarter was $71.6 million, or 11.5% of revenue.
• Board declares a quarterly dividend of $0.27 per share, payable on May 13, 2020 to shareholders as of April 22, 2020.

William A. Furman, Chairman & CEO commented, "Greenbrier is focused on two primary goals: protecting the safety and health of employees and preserving the economic well-being of our enterprise in this challenging environment. We are executing on the latter by increasing liquidity and sizing the organization properly in the current business environment."

Additional Comments from the CEOMarket conditions drove actions in the first half to size Greenbrier\'s manufacturing footprint for lower levels of railcar demand, with reductions of 3,500 global employees to scale production capacity. Manufacturing workforce reductions were primarily in Mexico. Amid the uncertain and rapidly changing impacts on the global economy from the COVID-19 pandemic, Greenbrier is suspending its previously issued guidance for fiscal 2020. Greenbrier has initiated a range of proactive responses to address conditions in the rail equipment industry and the impact of the pandemic. The Company is eliminating all non-essential capital expenditures and is aggressively reducing overhead and SG&A expense. Greenbrier has eliminated all non-essential travel and implemented a hiring freeze while evaluating its total operating unit footprints. Collectively, these measures will generate substantial cash savings. Finally, the members of Greenbrier's Board of Directors, including me, have voluntarily reduced annual compensation.

All of Greenbrier's manufacturing and service facilities continue regular operations. Greenbrier functions as an essential infrastructure business under guidance issued by DHS and supports operations vital to the national transportation system and operations of the Department of Defense and other federal agencies, under the statutory and regulatory authority of the Department of Transportation, the Surface Transportation Board, the Federal Railroad Administration, and the Jones Act. Similar guidelines and authorities exist in other nations where we operate. Greenbrier's manufacturing backlog and factories will provide cash flow resiliency. With the strength of our current backlog and balance sheet, we expect to continue to operate while observing stringent health and safety protocols. Continuity of the business alongside employee health and welfare are Greenbrier's highest priorities. Maintaining cash flow and liquidity are essential components of Greenbrier\'s current operating strategy.

For earnings history and earnings-related data on Greenbrier Cos. (GBX) click here.

You May Also Be Interested In

• IBM tumbles on soft Q1 revenue; announces HashiCorp $6.4bn acquisition
• PTC Therapeutics (PTCT) Tops Q1 EPS by 9c, provides guidance
• SkyWest (SKYW) Tops Q1 EPS by 28c, Beats on Revenue