Form 8-K GREENBRIER COMPANIES For: Jul 06
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 6, 2016
THE GREENBRIER COMPANIES, INC.
(Exact name of registrant as specified in its charter)
Commission File No. 1-13146
| Oregon | 93-0816972 | |
| (State of Incorporation) | (I.R.S. Employer Identification No.) |
One Centerpointe Drive, Suite 200, Lake Oswego, OR 97035
(Address of principal executive offices) (Zip Code)
(503) 684-7000
(Registrant’s telephone number, including area code)
Former name or former address, if changed since last report: N/A
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
| Item 2.02 | Results of Operations and Financial Condition |
On July 6, 2016, The Greenbrier Companies issued a press release reporting the Company’s results of operations for the three and nine months ended May 31, 2016. A copy of such release is attached as Exhibit 99.1.
The information under this Item 2.02, including the Exhibit attached hereto, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. Such information shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange Act, except as expressly set forth by specific reference in such a filing.
| Item 7.01 | Regulation FD Disclosure |
In the press release issued on July 6, 2016 and attached hereto as Exhibit 99.1, Greenbrier also narrowed its 2016 guidance.
The information under this Item 7.01, including the Exhibit attached hereto, shall not be deemed “filed” for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section. Such information shall not be incorporated by reference into any registration statement or other document filed under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such a filing.
| Item 9.01 | Financial Statements and Exhibits |
(c) Exhibits:
99.1 Press Release dated July 6, 2016 of The Greenbrier Companies, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| THE GREENBRIER COMPANIES, INC. | ||||||||||
| Date: | July 6, 2016 | By: | /s/ Lorie L. Tekorius |
|||||||
| Lorie L. Tekorius | ||||||||||
| Senior Vice President, | ||||||||||
| Chief Financial Officer and Treasurer | ||||||||||
| (Principal Financial Officer) | ||||||||||
Exhibit 99.1
| News Release |
|
One Centerpointe Drive Suite 200 Lake Oswego, Oregon 97035 503-684-7000 www.gbrx.com
| For release: | July 6, 2016, 6:00 a.m. EDT | Contact: | Lorie Tekorius | |||
| Justin Roberts | ||||||
| 503-684-7000 |
Greenbrier Reports Third Quarter Results
~ Posts EPS of $1.12 ~
~ Marine backlog exceeds $120 million ~
~ Increases quarterly dividend 5% to $0.21 per share ~
Lake Oswego, Oregon, July 6, 2016 – The Greenbrier Companies, Inc. (NYSE: GBX) today reported financial results for its third fiscal quarter ended May 31, 2016.
Third Quarter Highlights
| • | Net earnings attributable to Greenbrier for the quarter were $35.4 million, or $1.12 per diluted share, on revenue of $612.9 million. |
| • | Adjusted EBITDA for the quarter was $99.5 million, or 16.2% of revenue. |
| • | Net debt was reduced by over $21 million during the quarter. Net debt is less than $100 million on total assets of $1.8 billion. Net debt to LTM EBITDA maintained at 0.2x. |
| • | New railcar backlog as of May 31, 2016 was 31,200 units with an estimated value of $3.6 billion (average unit sale price of $116,000), compared to 34,100 units with an estimated value of $4.0 billion (average unit sale price of $116,000) as of February 29, 2016. |
| • | Diversified orders for 1,700 new railcars were received during the quarter, valued at $150 million, or an average price of approximately $91,000 per railcar. |
| • | New railcar deliveries totaled 4,300 units for the quarter, compared to 4,500 units for the quarter ended February 29, 2016. |
| • | Orders for two articulated ocean-going barges during the quarter and three ocean-going deck barges in June bring marine backlog to over $120 million. |
| • | Board declared a 5% increase in the quarterly dividend to $0.21 per share payable on August 10, 2016 to shareholders of record as of July 20, 2016. |
Progress on Longer Term Financial Goals
| • | Third quarter aggregate gross margin, excluding syndication activity from a railcar portfolio acquired in our first quarter, was 22.5%, consistent with our goal of at least 20% gross margin by the second half of fiscal 2016. We continue to be pleased with the portfolio syndication returns; however, the margin percentage on this activity had a dilutive impact, resulting in aggregate gross margin of 20.7%. |
| • | Third quarter annualized ROIC of 28.9% continues ROIC performance above 25% for the third consecutive quarter. We expect to maintain or exceed our 25% ROIC target for fiscal 2016. |
- More -
| Greenbrier Reports Third Quarter Results . . . (Cont.) | Page 2 |
William A. Furman, Chairman and CEO said, “We posted strong operational and financial results in the quarter, particularly in light of growing industry headwinds. Profitability was solid with aggregate gross margin at 20.7%. I am proud of our results so far this year and pleased that we expect to achieve full year results within our range of expectations. This is a testament to the dedication of our employees and strength of our integrated business model.”
Furman added, “As North American rail markets adjust to lower railcar loadings and increased rail velocity, we will focus on this core business while growing our earnings base in select international markets where long-term demand for railcars is strong. We achieved an important international milestone by beginning production of 1,200 tank cars for Saudi Railway Company’s October 2015 order. I am also pleased about the recently announced extension of our partnership in Brazil and strongly believe that global markets will be a key driver of future growth.”
Furman continued, “Greenbrier’s backlog remains strong, with non-energy related railcars representing over 80% of our total backlog. The North American energy sector is contending with a surplus of railcars. We continue to engage with our customers to identify solutions for the 5,000 sand cars in our backlog impacted by this over-supply issue. Finally, with the recent marine barge orders, our marine backlog is over $120 million with production extending into 2018.”
Furman concluded, “Greenbrier is a strong and diverse company. Greenbrier’s flexibility and creativity allow us to meet challenging market conditions and we are well-prepared for markets characterized by lower total railcar deliveries. We are proud of our lower cost, flexible manufacturing capacity, diversified product and customer mix, strong balance sheet and backlog. Greenbrier’s strategic transformation has positioned us to execute on future opportunities, which we believe will lead to continued growth and, ultimately, best position the company to increase shareholder value.”
Business Outlook
Based on current business trends and production schedules for fiscal 2016, Greenbrier refines provided guidance for:
| ● | New railcar deliveries to be approximately 20,000 – 21,000 units |
| ● | Revenue of approximately $2.8 billion |
| ● | Diluted EPS in the range of $5.70 to $5.90 |
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.
- More -
| Greenbrier Reports Third Quarter Results . . . (Cont.) | Page 3 |
Financial Summary
|
Q3 FY16
|
Q2 FY16
|
Sequential Comparison – Main Drivers
| ||||
| Revenue | $612.9M | $669.1M | Down 8.4% primarily due to lower volume of sales from acquired railcar portfolio and lower wheel volumes
| |||
| Gross margin | 20.7% | 17.9% | Up 280 bps due primarily to manufacturing efficiencies, a favorable product mix and higher scrap pricing
| |||
| Selling and administrative expense
|
$43.3M | $38.2M | Up 13.4% primarily attributed to higher employee related costs including long-term incentive compensation
| |||
|
Net gain on disposition of equipment
|
$0.3M | $10.7M | Timing of sales fluctuates and is opportunistic | |||
| Adjusted EBITDA
|
$99.5M
|
$108.2M
|
Down 8.0% due to lower deliveries
| |||
| Effective tax rate | 27.9% | 28.3% | Reflects a change in the geographic mix of earnings and the effects of discrete items
| |||
|
Net earnings attributable to noncontrolling interest
|
$24.2M | $21.3M | Driven by timing of deliveries and higher margin from our GIMSA JV
| |||
| Net earnings
|
$35.4M
|
$44.9M
|
||||
| Diluted EPS
|
$1.12
|
$1.41
|
Segment Summary
|
Q3 FY16
|
Q2 FY16
|
Sequential Comparison – Main Drivers
| ||||
|
Manufacturing
| ||||||
|
Revenue |
$458.5M | $454.5M | Up 0.9% primarily due to improved efficiencies and a change in mix partially offset by lower deliveries
| |||
|
Gross margin
|
23.1%
|
20.4%
|
Up 270 bps primarily due to a change in product mix
| |||
|
Operating margin (1)
|
20.2%
|
17.3%
|
||||
|
Deliveries
|
4,300
|
4,500
|
||||
|
Wheels & Parts
|
||||||
|
Revenue |
$78.4M | $90.5M | Down 13.4% primarily attributable to lower wheel and component volumes
| |||
|
Gross margin |
11.0% | 10.0% | Up 100 bps primarily due to higher scrap pricing and a more favorable product mix
| |||
|
Operating margin (1)
|
7.4%
|
7.2%
|
||||
|
Leasing & Services
|
||||||
|
Revenue |
$76.0M | $124.1M | Decline due to lower volume of sales from acquired railcar portfolio
| |||
|
Gross margin |
16.8% | 14.6% | Up due to lower volume of sales from acquired railcar portfolio, which is dilutive; excluding this activity, gross margin is 51.2% in Q3 and 51.1% in Q2
| |||
|
Operating margin (1) (2)
|
10.9%
|
19.7%
|
Q2 benefitted from higher gains on disposition of equipment
| |||
|
Lease fleet utilization |
94.9% | 95.4% | Excludes newly manufactured railcars not yet on lease and the acquired railcar portfolio
| |||
| (1) | See supplemental segment information on page 11 for additional information. |
| (2) | Includes Net gain on disposition of equipment, which is excluded from gross margin. |
- More -
| Greenbrier Reports Third Quarter Results . . . (Cont.) | Page 4 |
Conference Call
Greenbrier will host a teleconference to discuss its third quarter 2016 results. In conjunction with this news release, Greenbrier has posted a supplemental earnings presentation to our website. Teleconference details are as follows:
| ● | July 6, 2016 |
| ● | 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 (www.gbrx.com), headquartered in Lake Oswego, Oregon, is a leading supplier of transportation equipment and services to the railroad industry. Greenbrier builds new railroad freight cars in manufacturing facilities in the U.S., Mexico and Poland and marine barges at our U.S. manufacturing facility. Greenbrier sells reconditioned wheel sets and provides wheel services at locations throughout the U.S. We recondition, manufacture and sell railcar parts at various U.S. sites. Through GBW Railcar Services, LLC, a 50/50 joint venture with Watco Companies, LLC, freight cars are repaired and refurbished at over 30 locations across North America, including more than 10 tank car repair and maintenance facilities certified by the Association of American Railroads. Greenbrier owns a lease fleet of over 9,000 railcars and performs management services for over 260,000 railcars.
“SAFE HARBOR” STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: This press release may contain forward-looking statements, including statements regarding expected new railcar production volumes and schedules, expected customer demand for the Company’s products and services, plans to adjust manufacturing capacity, restructuring plans, new railcar delivery volumes and schedules, changes in demand for the Company’s railcar services and parts business, and the Company’s future financial performance. 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 are not indicative of our financial results; inability to convert backlog of railcar orders and obtain and execute lease syndication commitments; uncertainty or changes in the credit markets and financial services industry; high levels of indebtedness and compliance with the terms of our 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; 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
- More -
| Greenbrier Reports Third Quarter Results . . . (Cont.) | Page 5 |
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 our insurance coverage; train derailments or other accidents or claims that could subject us to legal claims; actions or inactions by various regulatory agencies including potential environmental remediation obligations or changing tank car or other rail car 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 our Annual Report on Form 10-K for the fiscal year ended August 31, 2015, and our 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, we do not assume any obligation to update any forward-looking statements.
Adjusted EBITDA is not a financial measure under generally accepted accounting principles (GAAP). We define Adjusted EBITDA as Net earnings before Interest and foreign exchange, Income tax expense, Depreciation and amortization. Adjusted EBITDA is a performance measurement tool commonly used by rail supply companies and Greenbrier. You should not consider Adjusted EBITDA in isolation or as a substitute for other financial statement data determined in accordance with GAAP. In addition, because Adjusted EBITDA is not a measure of financial performance under GAAP and is susceptible to varying calculations, this measure presented may differ from and may not be comparable to similarly titled measures used by other companies.
Annualized ROIC is calculated by taking year to date Earnings from operations, less cash paid for income taxes, net, which is then annualized and divided by the average balance of the sum of the Revolving notes, plus Notes payable, plus Total equity, less cash in excess of $40 million. The average is calculated based on the quarterly ending balances.
- More -
| Greenbrier Reports Third Quarter Results . . . (Cont.) | Page 6 |
THE GREENBRIER COMPANIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
| May 31, 2016 |
February 29, 2016 |
November 30, 2015 |
August 31, 2015 |
May 31, 2015 |
||||||||||||||||
|
|
|
|||||||||||||||||||
| Assets |
||||||||||||||||||||
| Cash and cash equivalents |
$ | 214,440 | $ | 283,541 | $ | 197,633 | $ | 172,930 | $ | 122,783 | ||||||||||
| Restricted cash |
8,669 | 8,877 | 9,818 | 8,869 | 8,912 | |||||||||||||||
| Accounts receivable, net |
213,510 | 228,072 | 237,213 | 196,029 | 214,890 | |||||||||||||||
| Inventories |
458,068 | 421,243 | 444,023 | 445,535 | 426,655 | |||||||||||||||
| Leased railcars for syndication |
136,812 | 179,975 | 238,911 | 212,534 | 213,197 | |||||||||||||||
| Equipment on operating leases, net |
232,791 | 235,171 | 252,641 | 255,391 | 257,962 | |||||||||||||||
| Property, plant and equipment, net |
318,010 | 310,019 | 307,196 | 303,135 | 285,570 | |||||||||||||||
| Investment in unconsolidated affiliates |
89,297 | 86,850 | 86,658 | 87,270 | 91,217 | |||||||||||||||
| Intangibles and other assets, net |
71,022 | 73,296 | 76,157 | 65,554 | 62,664 | |||||||||||||||
| Goodwill |
43,265 | 43,265 | 43,265 | 43,265 | 43,265 | |||||||||||||||
|
|
|
|||||||||||||||||||
| $ | 1,785,884 | $ | 1,870,309 | $ | 1,893,515 | $ | 1,790,512 | $ | 1,727,115 | |||||||||||
|
|
|
|||||||||||||||||||
| Liabilities and Equity |
||||||||||||||||||||
| Revolving notes |
$ | - | $ | 75,000 | $ | 163,888 | $ | 50,888 | $ | 92,507 | ||||||||||
| Accounts payable and accrued liabilities |
370,652 | 401,010 | 384,670 | 455,213 | 405,544 | |||||||||||||||
| Deferred income taxes |
50,390 | 55,204 | 63,483 | 60,657 | 75,572 | |||||||||||||||
| Deferred revenue |
68,158 | 84,362 | 42,351 | 33,836 | 24,209 | |||||||||||||||
| Notes payable |
306,808 | 322,539 | 324,668 | 326,429 | 346,279 | |||||||||||||||
| Total equity - Greenbrier |
840,086 | 800,940 | 771,945 | 732,838 | 672,396 | |||||||||||||||
| Noncontrolling interest |
149,790 | 131,254 | 142,510 | 130,651 | 110,608 | |||||||||||||||
|
|
|
|||||||||||||||||||
| Total equity |
989,876 | 932,194 | 914,455 | 863,489 | 783,004 | |||||||||||||||
|
|
|
|||||||||||||||||||
| $ | 1,785,884 | $ | 1,870,309 | $ | 1,893,515 | $ | 1,790,512 | $ | 1,727,115 | |||||||||||
|
|
|
|||||||||||||||||||
- More -
| Greenbrier Reports Third Quarter Results . . . (Cont.) | Page 7 |
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, |
|||||||||||||||
|
|
|
|||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
|
|
|
|||||||||||||||
| Revenue |
||||||||||||||||
| Manufacturing |
$ | 458,494 | $ | 593,376 | $ | 1,611,686 | $ | 1,478,566 | ||||||||
| Wheels & Parts |
78,417 | 97,407 | 247,604 | 286,671 | ||||||||||||
| Leasing & Services |
75,955 | 23,823 | 225,044 | 74,576 | ||||||||||||
|
|
|
|||||||||||||||
| 612,866 | 714,606 | 2,084,334 | 1,839,813 | |||||||||||||
| Cost of revenue |
||||||||||||||||
| Manufacturing |
352,775 | 465,658 | 1,247,635 | 1,184,922 | ||||||||||||
| Wheels & Parts |
69,818 | 89,645 | 224,208 | 259,285 | ||||||||||||
| Leasing & Services |
63,175 | 10,017 | 180,737 | 32,942 | ||||||||||||
|
|
|
|||||||||||||||
| 485,768 | 565,320 | 1,652,580 | 1,477,149 | |||||||||||||
| Margin |
127,098 | 149,286 | 431,754 | 362,664 | ||||||||||||
| Selling and administrative expense |
43,280 | 45,595 | 118,073 | 112,223 | ||||||||||||
| Net gain on disposition of equipment |
(311) | (720) | (11,326) | (924) | ||||||||||||
|
|
|
|||||||||||||||
| Earnings from operations |
84,129 | 104,411 | 325,007 | 251,365 | ||||||||||||
| Other costs |
||||||||||||||||
| Interest and foreign exchange |
3,712 | 4,285 | 10,565 | 9,355 | ||||||||||||
|
|
|
|||||||||||||||
| Earnings before income tax and earnings from unconsolidated affiliates |
80,417 | 100,126 | 314,442 | 242,010 | ||||||||||||
| Income tax expense |
(22,449) | (30,783) | (92,902) | (76,209) | ||||||||||||
|
|
|
|||||||||||||||
| Earnings before earnings from unconsolidated affiliates |
57,968 | 69,343 | 221,540 | 165,801 | ||||||||||||
| Earnings from unconsolidated affiliates |
1,564 | 982 | 2,921 | 1,552 | ||||||||||||
|
|
|
|||||||||||||||
| Net earnings |
59,532 | 70,325 | 224,461 | 167,353 | ||||||||||||
| Net earnings attributable to noncontrolling interest |
(24,180) | (27,514) | (74,808) | (41,405) | ||||||||||||
|
|
|
|||||||||||||||
| Net earnings attributable to Greenbrier |
$ | 35,352 | $ | 42,811 | $ | 149,653 | $ | 125,948 | ||||||||
|
|
|
|||||||||||||||
| Basic earnings per common share: |
$ | 1.22 | $ | 1.54 | $ | 5.13 | $ | 4.58 | ||||||||
| Diluted earnings per common share: |
$ | 1.12 | $ | 1.33 | $ | 4.67 | $ | 3.91 | ||||||||
| Weighted average common shares: |
||||||||||||||||
| Basic |
29,059 | 27,842 | 29,182 | 27,514 | ||||||||||||
| Diluted |
32,342 | 33,000 | 32,475 | 33,262 | ||||||||||||
| Dividends declared per common share: |
$ | 0.20 | $ | 0.15 | $ | 0.60 | $ | 0.45 | ||||||||
- More -
| Greenbrier Reports Third Quarter Results . . . (Cont.) | Page 8 |
THE GREENBRIER COMPANIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
| Nine Months Ended May 31, |
||||||||
|
|
|
|||||||
| 2016 | 2015 | |||||||
|
|
|
|||||||
| Cash flows from operating activities: |
||||||||
| Net earnings |
$ | 224,461 | $ | 167,353 | ||||
| Adjustments to reconcile net earnings to net cash provided by operating activities: |
||||||||
| Deferred income taxes |
(10,143 | ) | (5,245) | |||||
| Depreciation and amortization |
41,681 | 33,258 | ||||||
| Net gain on disposition of equipment |
(11,326 | ) | (924) | |||||
| Stock based compensation expense |
19,055 | 13,176 | ||||||
| Noncontrolling interest adjustments |
837 | 20,371 | ||||||
| Other |
564 | 1,008 | ||||||
| (Increase) decrease in assets: |
||||||||
| Accounts receivable, net |
(14,333 | ) | (8,769) | |||||
| Inventories |
(15,346 | ) | (124,906) | |||||
| Leased railcars for syndication |
28,823 | (90,914) | ||||||
| Other |
(5,191 | ) | (1,666) | |||||
| Increase (decrease) in liabilities: |
||||||||
| Accounts payable and accrued liabilities |
(88,707 | ) | 23,135 | |||||
| Deferred revenue |
24,303 | 3,680 | ||||||
|
|
|
|||||||
| Net cash provided by operating activities |
194,678 | 29,557 | ||||||
|
|
|
|||||||
| Cash flows from investing activities: |
||||||||
| Proceeds from sales of assets |
88,707 | 4,628 | ||||||
| Capital expenditures |
(51,707 | ) | (75,892) | |||||
| Decrease in restricted cash |
200 | 228 | ||||||
| Investment in and advances to unconsolidated affiliates |
(9,088 | ) | (29,923) | |||||
| Cash distribution from unconsolidated affiliates |
5,338 | 715 | ||||||
|
|
|
|||||||
| Net cash provided by (used in) investing activities |
33,450 | (100,244) | ||||||
|
|
|
|||||||
| Cash flows from financing activities: |
||||||||
| Net change in revolving notes with maturities of 90 days or less |
(49,000 | ) | 73,000 | |||||
| Proceeds from revolving notes with maturities longer than 90 days |
- | 42,563 | ||||||
| Repayments of revolving notes with maturities longer than 90 days |
(1,888 | ) | (36,137) | |||||
| Repayments of notes payable |
(19,461 | ) | (5,504) | |||||
| Debt issuance costs |
(4,160 | ) | - | |||||
| Repurchase of stock |
(33,498 | ) | (48,451) | |||||
| Dividends |
(17,362 | ) | (12,069) | |||||
| Decrease in restricted cash |
- | 11,000 | ||||||
| Cash distribution to joint venture partner |
(62,710 | ) | (12,489) | |||||
| Investment by joint venture partner |
5,400 | - | ||||||
| Excess tax benefit from restricted stock awards |
2,786 | 2,964 | ||||||
| Other |
(7 | ) | (248) | |||||
|
|
|
|||||||
| Net cash provided by (used in) financing activities |
(179,900 | ) | 14,629 | |||||
|
|
|
|||||||
| Effect of exchange rate changes |
(6,718 | ) | (6,075) | |||||
| Increase (decrease) in cash and cash equivalents |
41,510 | (62,133) | ||||||
| Cash and cash equivalents |
||||||||
| Beginning of period |
172,930 | 184,916 | ||||||
|
|
|
|||||||
| End of period |
$ | 214,440 | $ | 122,783 | ||||
|
|
|
|||||||
- More -
| Greenbrier Reports Third Quarter Results . . . (Cont.) | Page 9 |
THE GREENBRIER COMPANIES, INC.
SUPPLEMENTAL INFORMATION
(In thousands, except per share amounts, unaudited)
Operating Results by Quarter for 2016 are as follows:
| First | Second | Third | Total | |||||||||||||
|
|
|
|||||||||||||||
| Revenue |
||||||||||||||||
| Manufacturing |
$ | 698,661 | $ | 454,531 | $ | 458,494 | $ | 1,611,686 | ||||||||
| Wheels & Parts |
78,729 | 90,458 | 78,417 | 247,604 | ||||||||||||
| Leasing & Services |
24,999 | 124,090 | 75,955 | 225,044 | ||||||||||||
|
|
|
|||||||||||||||
| 802,389 | 669,079 | 612,866 | 2,084,334 | |||||||||||||
| Cost of revenue |
||||||||||||||||
| Manufacturing |
533,033 | 361,827 | 352,775 | 1,247,635 | ||||||||||||
| Wheels & Parts |
73,002 | 81,388 | 69,818 | 224,208 | ||||||||||||
| Leasing & Services |
11,589 | 105,973 | 63,175 | 180,737 | ||||||||||||
|
|
|
|||||||||||||||
| 617,624 | 549,188 | 485,768 | 1,652,580 | |||||||||||||
| Margin |
184,765 | 119,891 | 127,098 | 431,754 | ||||||||||||
| Selling and administrative expense |
36,549 | 38,244 | 43,280 | 118,073 | ||||||||||||
| Net gain on disposition of equipment |
(269 | ) | (10,746 | ) | (311 | ) | (11,326 | ) | ||||||||
|
|
|
|||||||||||||||
| Earnings from operations |
148,485 | 92,393 | 84,129 | 325,007 | ||||||||||||
| Other costs |
||||||||||||||||
| Interest and foreign exchange |
5,436 | 1,417 | 3,712 | 10,565 | ||||||||||||
|
|
|
|||||||||||||||
| Earnings before income tax and earnings from unconsolidated affiliates |
143,049 | 90,976 | 80,417 | 314,442 | ||||||||||||
| Income tax expense |
(44,719 | ) | (25,734 | ) | (22,449 | ) | (92,902 | ) | ||||||||
|
|
|
|||||||||||||||
| Earnings before earnings from unconsolidated affiliates |
98,330 | 65,242 | 57,968 | 221,540 | ||||||||||||
| Earnings from unconsolidated affiliates |
383 | 974 | 1,564 | 2,921 | ||||||||||||
|
|
|
|||||||||||||||
| Net earnings |
98,713 | 66,216 | 59,532 | 224,461 | ||||||||||||
| Net earnings attributable to noncontrolling interest |
(29,280 | ) | (21,348 | ) | (24,180 | ) | (74,808 | ) | ||||||||
|
|
|
|||||||||||||||
| Net earnings attributable to Greenbrier |
$ | 69,433 | $ | 44,868 | $ | 35,352 | $ | 149,653 | ||||||||
|
|
|
|||||||||||||||
| Basic earnings per common share (1) |
$ | 2.36 | $ | 1.54 | $ | 1.22 | $ | 5.13 | ||||||||
| Diluted earnings per common share (1) |
$ | 2.15 | $ | 1.41 | $ | 1.12 | $ | 4.67 | ||||||||
| (1) | Quarterly amounts may not total to the year to date amount as each period is calculated discretely. Diluted earnings per common share includes the dilutive effect of the 2026 Convertible Notes and 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. |
- More -
| Greenbrier Reports Third Quarter Results . . . (Cont.) | Page 10 |
THE GREENBRIER COMPANIES, INC.
SUPPLEMENTAL INFORMATION
(In thousands, except per share amounts, unaudited)
Operating Results by Quarter for 2015 are as follows:
| First | Second | Third | Fourth | Total | ||||||||||||||||
|
|
|
|||||||||||||||||||
| Revenue |
||||||||||||||||||||
| Manufacturing |
$ | 379,949 | $ | 505,241 | $ | 593,376 | $ | 657,485 | $ | 2,136,051 | ||||||||||
| Wheels & Parts |
86,624 | 102,640 | 97,407 | 84,566 | 371,237 | |||||||||||||||
| Leasing & Services |
28,485 | 22,268 | 23,823 | 23,414 | 97,990 | |||||||||||||||
|
|
|
|||||||||||||||||||
| 495,058 | 630,149 | 714,606 | 765,465 | 2,605,278 | ||||||||||||||||
| Cost of revenue |
||||||||||||||||||||
| Manufacturing |
316,037 | 403,227 | 465,658 | 506,492 | 1,691,414 | |||||||||||||||
| Wheels & Parts |
76,872 | 92,768 | 89,645 | 75,395 | 334,680 | |||||||||||||||
| Leasing & Services |
14,081 | 8,844 | 10,017 | 8,889 | 41,831 | |||||||||||||||
|
|
|
|||||||||||||||||||
| 406,990 | 504,839 | 565,320 | 590,776 | 2,067,925 | ||||||||||||||||
| Margin |
88,068 | 125,310 | 149,286 | 174,689 | 537,353 | |||||||||||||||
| Selling and administrative expense |
33,729 | 32,899 | 45,595 | 39,568 | 151,791 | |||||||||||||||
| Net gain on disposition of equipment |
(83 | ) | (121 | ) | (720 | ) | (406 | ) | (1,330 | ) | ||||||||||
|
|
|
|||||||||||||||||||
| Earnings from operations |
54,422 | 92,532 | 104,411 | 135,527 | 386,892 | |||||||||||||||
| Other costs |
||||||||||||||||||||
| Interest and foreign exchange |
3,141 | 1,929 | 4,285 | 1,824 | 11,179 | |||||||||||||||
|
|
|
|||||||||||||||||||
| Earnings before income tax and earnings (loss) from unconsolidated affiliates |
51,281 | 90,603 | 100,126 | 133,703 | 375,713 | |||||||||||||||
| Income tax expense |
(16,054 | ) | (29,372 | ) | (30,783 | ) | (35,951 | ) | (112,160 | ) | ||||||||||
| Earnings (loss) from unconsolidated affiliates |
755 | (185 | ) | 982 | 204 | 1,756 | ||||||||||||||
|
|
|
|||||||||||||||||||
| Net earnings |
35,982 | 61,046 | 70,325 | 97,956 | 265,309 | |||||||||||||||
| Net earnings attributable to noncontrolling interest |
(3,196 | ) | (10,695 | ) | (27,514 | ) | (31,072 | ) | (72,477 | ) | ||||||||||
|
|
|
|||||||||||||||||||
| Net earnings attributable to Greenbrier |
$ | 32,786 | $ | 50,351 | $ | 42,811 | $ | 66,884 | $ | 192,832 | ||||||||||
|
|
|
|||||||||||||||||||
| Basic earnings per common share (1) |
$ | 1.19 | $ | 1.86 | $ | 1.54 | $ | 2.23 | $ | 6.85 | ||||||||||
| Diluted earnings per common share (1) |
$ | 1.01 | $ | 1.57 | $ | 1.33 | $ | 2.02 | $ | 5.93 | ||||||||||
| (1) | Quarterly amounts may not total to the year to date amount as each period is calculated discretely. Diluted earnings per common share includes the dilutive effect of the 2026 Convertible Notes and 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. |
- More -
| Greenbrier Reports Third Quarter Results . . . (Cont.) | Page 11 |
THE GREENBRIER COMPANIES, INC.
SUPPLEMENTAL INFORMATION
(In thousands, unaudited)
Segment Information
Three months ended May 31, 2016:
| Revenue | Earnings (loss) from operations | |||||||||||||||||||||||
| External | Intersegment | Total | External | Intersegment | Total | |||||||||||||||||||
| Manufacturing |
$ | 458,494 | $ | 5,595 | $ | 464,089 | $ | 92,713 | $ | 923 | $ | 93,636 | ||||||||||||
| Wheels & Parts |
78,417 | 10,058 | 88,475 | 5,811 | 711 | 6,522 | ||||||||||||||||||
| Leasing & Services |
75,955 | 601 | 76,556 | 8,298 | 601 | 8,899 | ||||||||||||||||||
| Eliminations |
- | (16,254 | ) | (16,254 | ) | - | (2,235 | ) | (2,235 | ) | ||||||||||||||
| Corporate |
- | - | - | (22,693 | ) | - | (22,693 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| $ | 612,866 | $ | - | $ | 612,866 | $ | 84,129 | $ | - | $ | 84,129 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Three months ended February 29, 2016:
| Revenue | Earnings (loss) from operations | |||||||||||||||||||||||
| External | Intersegment | Total | External | Intersegment | Total | |||||||||||||||||||
| Manufacturing |
$ | 454,531 | $ | - | $ | 454,531 | $ | 78,798 | $ | 17 | $ | 78,815 | ||||||||||||
| Wheels & Parts |
90,458 | 7,200 | 97,658 | 6,506 | 761 | 7,267 | ||||||||||||||||||
| Leasing & Services |
124,090 | 3,133 | 127,223 | 24,412 | 3,133 | 27,545 | ||||||||||||||||||
| Eliminations |
- | (10,333 | ) | (10,333 | ) | - | (3,911 | ) | (3,911 | ) | ||||||||||||||
| Corporate |
- | - | - | (17,323 | ) | - | (17,323 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| $ | 669,079 | $ | - | $ | 669,079 | $ | 92,393 | $ | - | $ | 92,393 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total assets | ||||||||
| (In thousands) | May 31, 2016 |
February 29, 2016 |
||||||
| Manufacturing |
$ | 641,090 | $ | 624,961 | ||||
| Wheels & Parts |
301,474 | 307,724 | ||||||
| Leasing & Services |
523,989 | 551,763 | ||||||
| Unallocated |
319,331 | 385,861 | ||||||
|
|
|
|
|
|||||
| $ | 1,785,884 | $ | 1,870,309 | |||||
|
|
|
|
|
|||||
The results of operations for GBW, which are shown below, are not reflected in the above tables as the investment is accounted for under the equity method of accounting.
| As of and for the Three Months Ended |
||||||||
| May 31, 2016 |
February 29, 2016 |
|||||||
|
|
|
|||||||
| Revenue |
$ | 95,700 | $ | 97,700 | ||||
| Earnings from operations |
$ | 3,000 | $ | 3,600 | ||||
| Total assets |
$ | 255,400 | $ | 247,700 | ||||
- More -
| Greenbrier Reports Third Quarter Results . . . (Cont.) | Page 12 |
THE GREENBRIER COMPANIES, INC.
SUPPLEMENTAL INFORMATION
(In thousands, excluding backlog and delivery units, unaudited)
Reconciliation of Net earnings to Adjusted EBITDA
| Three Months Ended | ||||||||
| May 31, 2016 |
February 29, 2016 |
|||||||
|
|
|
|||||||
| Net earnings |
$ | 59,532 | $ | 66,216 | ||||
| Interest and foreign exchange |
3,712 | 1,417 | ||||||
| Income tax expense |
22,449 | 25,734 | ||||||
| Depreciation and amortization |
13,839 | 14,868 | ||||||
|
|
|
|||||||
| Adjusted EBITDA |
$ | 99,532 | $ | 108,235 | ||||
|
|
|
|||||||
| Three Months Ended May 31, 2016 |
||||
| Backlog Activity (units) |
||||
| Beginning backlog |
34,100 | |||
| Orders received |
1,700 | |||
| Production held as Leased railcars for syndication |
(1,100 | ) | ||
| Production sold directly to third parties |
(3,500 | ) | ||
|
|
|
|||
| Ending backlog |
31,200 | |||
|
|
|
|||
| Delivery Information (units) |
||||
| Production sold directly to third parties |
3,500 | |||
| Sales of Leased railcars for syndication |
800 | |||
|
|
|
|||
| Total deliveries |
4,300 | |||
|
|
|
|||
- More -
| Greenbrier Reports Third Quarter Results . . . (Cont.) | Page 13 |
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, 2016 |
February 29, 2016 |
|||||||
|
|
|
|||||||
| Weighted average basic common shares outstanding (1) |
29,059 | 29,098 | ||||||
| Dilutive effect of convertible notes (2) |
3,224 | 3,203 | ||||||
| Dilutive effect of performance awards (3) |
59 | 59 | ||||||
|
|
|
|||||||
| Weighted average diluted common shares outstanding |
32,342 | 32,360 | ||||||
|
|
|
|||||||
| (1) | Restricted stock grants and restricted stock units, 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 are included in the Weighted average diluted common shares outstanding as they were considered dilutive under the “if converted” method as further discussed below. The dilutive effect of the 2026 Convertible notes are excluded in the Weighted average diluted common shares outstanding as the average stock price during the periods did not exceed the applicable conversion price. |
| (3) | Restricted stock units subject to performance criteria, for which actual levels of performance above target have been achieved, and are included in Weighted average diluted shares outstanding when the company is in a net earnings position. |
Diluted earnings per share 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 2026 Convertible notes 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 issued in March 2011. 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.
| Three Months Ended | ||||||||
| May 31, 2016 |
February 29, 2016 |
|||||||
|
|
|
|||||||
| Net earnings attributable to Greenbrier |
$ | 35,352 | $ | 44,868 | ||||
| Add back: |
||||||||
| Interest and debt issuance costs on the 2018 Convertible notes, net of tax |
733 | 733 | ||||||
|
|
|
|||||||
| Earnings before interest and debt issuance costs on convertible notes |
$ | 36,085 | $ | 45,601 | ||||
|
|
|
|||||||
| Weighted average diluted common shares outstanding |
32,342 | 32,360 | ||||||
| Diluted earnings per share |
$ | 1.12 | $ | 1.41 | ||||
# # #