Form 8-K GREENBRIER COMPANIES For: Oct 25
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) October 25, 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 October 25, 2016, The Greenbrier Companies issued a press release reporting the Company’s results of operations for the three and twelve months ended August 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 October 25, 2016 and attached hereto as Exhibit 99.1, Greenbrier issued its 2017 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 October 25, 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: | October 25, 2016 |
By: | /s/ Lorie L. Tekorius | |||||||
| Lorie L. Tekorius | ||||||||||
| Senior Vice President, | ||||||||||
| Chief Financial Officer and Treasurer | ||||||||||
| (Principal Financial Officer) | ||||||||||
Exhibit 99.1
| For release: October 25, 2016, 6:00 a.m. EDT |
Contact: Lorie Tekorius |
Justin Roberts
503-684-7000
Greenbrier Reports Fourth Quarter Results
~ Quarterly EPS of $1.06 ~
~ Announces orders for 2,300 railcars valued at $200 million ~
~ Cash flow from operations in 2016 exceeded $330 million ~
~ Issues 2017 earnings guidance of $3.25 - $3.75 per share ~
Lake Oswego, Oregon, October 25, 2016 – The Greenbrier Companies, Inc. (NYSE: GBX) today reported financial results for its fourth fiscal quarter and full year ended August 31, 2016.
Fourth Quarter Highlights
| • | Net earnings attributable to Greenbrier for the quarter were $33.6 million, or $1.06 per diluted share, on revenue of $595.2 million. |
| • | Adjusted EBITDA for the quarter was $104.4 million, or 17.5% of revenue. |
| • | Diversified orders for 2,300 new railcars were received during this quarter, valued at over $200 million, or an average price of approximately $87,000 per railcar. |
| • | New railcar backlog as of August 31, 2016 was 27,500 units with an estimated value of $3.19 billion (average unit sale price of $116,000). Backlog reflects a 1,200 unit reduction resulting from customer settlements that yield favorable economic and other considerations. |
| • | New railcar deliveries totaled 4,600 units for the quarter, compared to 4,300 units for the quarter ended May 31, 2016. |
| • | Marine backlog as of August 31, 2016 was approximately $114 million. |
| • | Board declared a quarterly dividend of $0.21 per share, payable on December 1, 2016 to shareholders as of November 10, 2016. |
Fiscal Year 2016 Highlights
| • | Net earnings were $183.2 million, or $5.73 per diluted share, on record revenue of $2.68 billion. |
| • | Record Adjusted EBITDA was $474.0 million, or 17.7% of revenue, compared to 16.7% of revenue in fiscal 2015. |
| • | New railcar deliveries totaled 20,300 units. |
| • | Orders totaled 7,500 units valued over $700 million across a broad range of railcar types. |
| • | Cash provided by operating activities increased 72% to over $330 million. |
| • | Net Funded Debt : LTM EBITDA ratio improved to 0.2x from 0.5x in fiscal 2015. |
| • | Nearly $57 million returned to shareholders through dividend and share repurchases. |
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| Greenbrier Reports Fourth Quarter Results. . . (Cont.) | Page 2 |
Progress on Longer Term Financial Goals
| • | Fourth quarter aggregate gross margin, was 20.1%, consistent with our goal of at least 20% gross margin by the second half of fiscal 2016. |
| • | We achieved an ROIC of 24.8% in fiscal 2016, in line with our target of 25.0%, and an improvement from the 23.7% achieved in fiscal 2015. |
William A. Furman, Chairman and CEO, said, “We delivered strong results for the fourth quarter and fiscal 2016. We ended the year with a strong balance sheet, ample liquidity and very little net debt. This positions Greenbrier to continue to invest internationally in high ROIC markets, as well as successfully navigate through less robust North American market conditions. We addressed industry challenges during fiscal 2016 as we encountered a weaker market in North America. Our employees successfully executed our plan for the year. We appreciate their hard work along with the confidence and trust of our customers as we have diversified and grown internationally.”
Furman continued, “Entering fiscal 2017, our diversified backlog provides us with strong visibility, while we remain adaptable and prepared for market recovery and growth. Recently, we worked with customers to resolve commercial terms related to 1,200 sand cars. Under these arrangements, Greenbrier received meaningful monetary and other valuable economic consideration. Our deep customer relationships are advantageous in the current market conditions as we work to achieve mutually beneficial solutions.”
“Internationally, we are creating a global network that enables Greenbrier to capture share in emerging railcar markets where freight car markets are stronger. These include the nations of the Gulf Cooperation Council (GCC), Africa, Eurasia and Latin America. We are making new investments that extend our core competency in freight railcar building, engineering and aftermarket services for all railroad gauges in these new markets.” Furman added, “In August, we acquired a 19.5% ownership stake in the railcar casting operations of Amsted-Maxion Cruzeiro which raised our direct and indirect interest in railcar manufacturer Greenbrier-Maxion to 35%, and expands our manufacturing presence in Brazil. In September, we began fulfillment of the 1,200 tank car order placed by Saudi Railway Company (SAR) in early fiscal 2016. Most recently, we announced the formation of Greenbrier-Astra Rail that will create a world-class European railcar business, capitalizing on demand in Western Europe where the aging railcar fleet will enter a replacement cycle in the next few years. It provides a strong value-added platform for our customers in Western Europe, as well as a launch pad for other business in Eurasia and the GCC.”
Furman concluded, “In the year ahead, a moderating railcar replacement cycle in North America will favorably position well-capitalized companies like Greenbrier to seize opportunities in the market, which often emerge suddenly. We remain committed to our overall strategy of investing for future growth and generating long-term value for our shareholders with an emphasis on solid ROIC.”
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| Greenbrier Reports Fourth Quarter Results. . . (Cont.) | Page 3 |
Business Outlook
Based on current business trends, industry forecasts and production schedules for fiscal 2017, Greenbrier believes:
| • | Deliveries will be approximately 14,000 – 16,000 units |
| • | Revenue will be $2.0 – $2.4 billion |
| • | Diluted EPS will be in the range of $3.25 – $3.75 |
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 FY16 | Q3 FY16 | Sequential Comparison – Main Drivers | ||||
| Revenue |
$595.2M | $612.9M | Down 2.9% primarily due to lower volume of sales from acquired railcar portfolio | |||
| Gross margin |
20.1% | 20.7% | Down 60 bps primarily due to product mix changes and lower scrap pricing | |||
| Selling and administrative expense |
$40.6M | $43.3M | Down 6.2% due to Q3 including higher long-term incentive compensation | |||
| Net gain on disposition of equipment |
$4.5M | $0.3M | Increase primarily reflects insurance recovery proceeds from 2015 losses | |||
| Adjusted EBITDA |
$104.4M | $99.5M | Stronger operating cash flow | |||
| Effective tax rate |
24.1% | 27.9% | Reflects a change in the geographic mix of earnings | |||
| Net earnings attributable to noncontrolling interest |
$26.8M | $24.2M | Driven by timing of deliveries and higher margin from our GIMSA JV | |||
| Net earnings attributable to Greenbrier |
$33.6M | $35.4M | ||||
| Diluted EPS |
$1.06 | $1.12 | ||||
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| Greenbrier Reports Fourth Quarter Results. . . (Cont.) | Page 4 |
Segment Summary
| Q4 FY16 | Q3 FY16 | Sequential Comparison – Main Drivers | ||||
| Manufacturing | ||||||
| Revenue |
$484.6M | $458.5M | Up 5.7% due to higher deliveries | |||
| Gross margin |
21.0% | 23.1% | Down 210 bps primarily due to a change in product mix | |||
| Operating margin (1) |
18.5% | 20.2% | ||||
| Deliveries |
4,600 | 4,300 | ||||
| Wheels & Parts |
||||||
| Revenue |
$74.8M | $78.4M | Down 4.6% primarily attributable to lower wheel and component volumes | |||
| Gross margin |
7.0% | 11.0% | Down 400 bps primarily due to a less favorable product mix and continued challenging operating environment | |||
| Operating margin (1) |
5.7% | 7.4% | ||||
| Leasing & Services |
||||||
| Revenue |
$35.8M | $76.0M | Decline due to lower volume of sales from acquired railcar portfolio | |||
| Gross margin |
35.5% | 16.8% | Up due to lower volume of sales from acquired railcar portfolio, which is dilutive | |||
| Operating margin (1) (2) |
25.3% | 10.9% | ||||
| Lease fleet utilization |
91.0% | 94.9% | Impacted by off-lease tank cars; placed on lease subsequent to quarter end | |||
| (1) | See supplemental segment information on page 12 for additional information. |
| (2) | Includes Net gain on disposition of equipment, which is excluded from gross margin. |
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| Greenbrier Reports Fourth Quarter Results. . . (Cont.) | Page 5 |
Conference Call
Greenbrier will host a teleconference to discuss its fourth quarter 2016 results. In conjunction with this news release, Greenbrier has posted a supplemental earnings presentation to our website. Teleconference details are as follows:
| • | October 25, 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 international supplier of equipment and services to the freight rail transportation markets. Greenbrier designs, builds and markets freight railcars in North America and Europe, we build freight railcars and rail castings in Brazil through a strategic partnership, and build and market marine barges in North America. Recently, through our European manufacturing operations, we also began delivery of US-designed tank cars in Saudi Arabia. In October 2016, we entered into an agreement with Astra Rail Management GmbH to form a new company, Greenbrier-Astra Rail, which will create an end-to-end, Europe-based freight railcar manufacturing, engineering and repair business. We expect this combination will be completed during 2017. We are a leading provider of wheel services, parts, leasing and other services to the railroad and related transportation industries in North America and a provider of freight railcar repair, refurbishment and retrofitting services in North America through a joint venture partnership with Watco Companies, LLC. Through other joint ventures we produce rail castings, tank heads and other railcar components. Greenbrier owns a lease fleet of over 9,000 railcars and performs management services for over 268,000 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, available manufacturing capacity, restructuring plans, new railcar delivery volumes and schedules, 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 in 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; 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
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| Greenbrier Reports Fourth Quarter Results. . . (Cont.) | Page 6 |
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 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; 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, 2016, 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.
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| Greenbrier Reports Fourth Quarter Results. . . (Cont.) | Page 7 |
THE GREENBRIER COMPANIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
| August 31, 2016 |
May 31, 2016 |
February 29, 2016 |
November 30, 2015 |
August 31, 2015 |
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| Assets |
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| Cash and cash equivalents |
$ | 222,679 | $ | 214,440 | $ | 283,541 | $ | 197,633 | $ | 172,930 | ||||||||||
| Restricted cash |
24,279 | 8,669 | 8,877 | 9,818 | 8,869 | |||||||||||||||
| Accounts receivable, net |
232,517 | 213,510 | 228,072 | 237,213 | 196,029 | |||||||||||||||
| Inventories |
365,805 | 458,068 | 421,243 | 444,023 | 445,535 | |||||||||||||||
| Leased railcars for syndication |
144,932 | 136,812 | 179,975 | 238,911 | 212,534 | |||||||||||||||
| Equipment on operating leases, net |
306,266 | 232,791 | 235,171 | 252,641 | 255,391 | |||||||||||||||
| Property, plant and equipment, net |
329,990 | 318,010 | 310,019 | 307,196 | 303,135 | |||||||||||||||
| Investment in unconsolidated affiliates |
98,682 | 89,297 | 86,850 | 86,658 | 87,270 | |||||||||||||||
| Intangibles and other assets, net |
69,475 | 71,022 | 73,296 | 76,157 | 65,554 | |||||||||||||||
| Goodwill |
43,265 | 43,265 | 43,265 | 43,265 | 43,265 | |||||||||||||||
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| $ | 1,837,890 | $ | 1,785,884 | $ | 1,870,309 | $ | 1,893,515 | $ | 1,790,512 | |||||||||||
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| Liabilities and Equity |
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| Revolving notes |
$ | — | $ | — | $ | 75,000 | $ | 163,888 | $ | 50,888 | ||||||||||
| Accounts payable and accrued liabilities |
369,754 | 370,652 | 401,010 | 384,670 | 455,213 | |||||||||||||||
| Deferred income taxes |
51,619 | 50,390 | 55,204 | 63,483 | 60,657 | |||||||||||||||
| Deferred revenue |
95,721 | 68,158 | 84,362 | 42,351 | 33,836 | |||||||||||||||
| Notes payable |
303,969 | 306,808 | 322,539 | 324,668 | 326,429 | |||||||||||||||
| Total equity - Greenbrier |
874,311 | 840,086 | 800,940 | 771,945 | 732,838 | |||||||||||||||
| Noncontrolling interest |
142,516 | 149,790 | 131,254 | 142,510 | 130,651 | |||||||||||||||
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| Total equity |
1,016,827 | 989,876 | 932,194 | 914,455 | 863,489 | |||||||||||||||
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| $ | 1,837,890 | $ | 1,785,884 | $ | 1,870,309 | $ | 1,893,515 | $ | 1,790,512 | |||||||||||
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| Greenbrier Reports Fourth Quarter Results. . . (Cont.) | Page 8 |
THE GREENBRIER COMPANIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
| Years ending August 31, | ||||||||||||
| 2016 | 2015 | 2014 | ||||||||||
| Revenue |
||||||||||||
| Manufacturing |
$ | 2,096,331 | $ | 2,136,051 | $ | 1,624,916 | ||||||
| Wheels & Parts |
322,395 | 371,237 | 495,627 | |||||||||
| Leasing & Services |
260,798 | 97,990 | 83,419 | |||||||||
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| 2,679,524 | 2,605,278 | 2,203,962 | ||||||||||
| Cost of revenue |
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| Manufacturing |
1,630,554 | 1,691,414 | 1,374,008 | |||||||||
| Wheels & Parts |
293,751 | 334,680 | 463,938 | |||||||||
| Leasing & Services |
203,782 | 41,831 | 43,796 | |||||||||
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| 2,128,087 | 2,067,925 | 1,881,742 | ||||||||||
| Margin |
551,437 | 537,353 | 322,220 | |||||||||
| Selling and administrative |
158,681 | 151,791 | 125,270 | |||||||||
| Net gain on disposition of equipment |
(15,796 | ) | (1,330 | ) | (15,039 | ) | ||||||
| Gain on contribution to joint venture |
— | — | (29,006 | ) | ||||||||
| Restructuring charges |
— | — | 1,475 | |||||||||
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| Earnings from operations |
408,552 | 386,892 | 239,520 | |||||||||
| Other costs |
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| Interest and foreign exchange |
13,502 | 11,179 | 18,695 | |||||||||
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| Earnings before income tax and earnings from unconsolidated affiliates |
395,050 | 375,713 | 220,825 | |||||||||
| Income tax expense |
(112,322 | ) | (112,160 | ) | (72,401 | ) | ||||||
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| Earnings before earnings from unconsolidated affiliates |
282,728 | 263,553 | 148,424 | |||||||||
| Earnings from unconsolidated affiliates |
2,096 | 1,756 | 1,355 | |||||||||
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| Net earnings |
284,824 | 265,309 | 149,779 | |||||||||
| Net earnings attributable to noncontrolling interest |
(101,611 | ) | (72,477 | ) | (37,860 | ) | ||||||
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| Net earnings attributable to Greenbrier |
$ | 183,213 | $ | 192,832 | $ | 111,919 | ||||||
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| Basic earnings per common share: |
$ | 6.28 | $ | 6.85 | $ | 3.97 | ||||||
| Diluted earnings per common share: |
$ | 5.73 | $ | 5.93 | $ | 3.44 | ||||||
| Weighted average common shares: |
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| Basic |
29,156 | 28,151 | 28,164 | |||||||||
| Diluted |
32,468 | 33,328 | 34,209 | |||||||||
| Dividends declared per common share |
$ | 0.81 | $ | 0.60 | $ | 0.15 | ||||||
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| Greenbrier Reports Fourth Quarter Results. . . (Cont.) | Page 9 |
THE GREENBRIER COMPANIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
| Years Ended August 31, | ||||||||||||
| 2016 | 2015 | 2014 | ||||||||||
| Cash flows from operating activities: |
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| Net earnings |
$ | 284,824 | $ | 265,309 | $ | 149,779 | ||||||
| Adjustments to reconcile net earnings to net cash provided by operating activities: |
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| Deferred income taxes |
(8,935 | ) | (20,151 | ) | (4,687 | ) | ||||||
| Depreciation and amortization |
63,345 | 45,156 | 40,422 | |||||||||
| Net gain on disposition of equipment |
(15,796 | ) | (1,330 | ) | (15,039 | ) | ||||||
| Stock based compensation expense |
24,037 | 19,459 | 11,285 | |||||||||
| Gain on contribution to joint venture |
— | — | (29,006 | ) | ||||||||
| Noncontrolling interest adjustments |
526 | 17,215 | 2,774 | |||||||||
| Other |
560 | 1,184 | 576 | |||||||||
| Decrease (increase) in assets: |
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| Accounts receivable, net |
(32,051 | ) | 13,652 | (23,749 | ) | |||||||
| Inventories |
53,711 | (143,849 | ) | (9,675 | ) | |||||||
| Leased railcars for syndication |
19,154 | (90,614 | ) | (57,779 | ) | |||||||
| Other |
(16,989 | ) | 575 | (4,069 | ) | |||||||
| Increase (decrease) in liabilities: |
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| Accounts payable and accrued liabilities |
(91,428 | ) | 72,419 | 63,362 | ||||||||
| Deferred revenue |
50,712 | 13,308 | 11,713 | |||||||||
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| Net cash provided by operating activities |
331,670 | 192,333 | 135,907 | |||||||||
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| Cash flows from investing activities: |
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| Proceeds from sales of assets |
103,715 | 5,295 | 54,235 | |||||||||
| Capital expenditures |
(139,013 | ) | (105,989 | ) | (70,227 | ) | ||||||
| Decrease (increase) in restricted cash |
(15,410 | ) | 271 | (333 | ) | |||||||
| Investment in and advances to unconsolidated affiliates |
(12,855 | ) | (34,453 | ) | (13,753 | ) | ||||||
| Cash distribution from joint ventures |
7,855 | 3,345 | — | |||||||||
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| Net cash used in investing activities |
(55,708 | ) | (131,531 | ) | (30,078 | ) | ||||||
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| Cash flows from financing activities: |
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| Net changes in revolving notes with maturities of 90 days or less |
(49,000 | ) | 49,000 | — | ||||||||
| Proceeds from revolving notes with maturities longer than 90 days |
— | 44,451 | 37,819 | |||||||||
| Repayments of revolving notes with maturities longer than 90 days |
(1,888 | ) | (55,644 | ) | (72,947 | ) | ||||||
| Proceeds from issuance of notes payable |
— | — | 200,000 | |||||||||
| Repayments of notes payable |
(22,299 | ) | (7,475 | ) | (128,797 | ) | ||||||
| Debt issuance costs |
(4,161 | ) | — | (382 | ) | |||||||
| Decrease (increase) in restricted cash |
— | 11,000 | (11,000 | ) | ||||||||
| Repurchase of stock |
(33,498 | ) | (69,950 | ) | (33,583 | ) | ||||||
| Dividends |
(23,303 | ) | (16,491 | ) | (4,123 | ) | ||||||
| Cash distribution to joint venture partner |
(95,092 | ) | (20,375 | ) | (5,076 | ) | ||||||
| Investment by joint venture partner |
5,400 | — | 419 | |||||||||
| Excess tax benefit from restricted stock awards |
2,813 | 2,908 | 109 | |||||||||
| Other |
(887 | ) | (248 | ) | — | |||||||
|
|
|
|
|
|
|
|||||||
| Net cash used in financing activities |
(221,915 | ) | (62,824 | ) | (17,561 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Effect of exchange rate changes |
(4,298 | ) | (9,964 | ) | (787 | ) | ||||||
| Increase (decrease) in cash and cash equivalents |
49,749 | (11,986 | ) | 87,481 | ||||||||
| Cash and cash equivalents |
||||||||||||
| Beginning of period |
172,930 | 184,916 | 97,435 | |||||||||
|
|
|
|
|
|
|
|||||||
| End of period |
$ | 222,679 | $ | 172,930 | $ | 184,916 | ||||||
|
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|
|
|
|
|||||||
- More -
| Greenbrier Reports Fourth Quarter Results. . . (Cont.) | Page 10 |
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 | Fourth | Total | ||||||||||||||||
| Revenue |
||||||||||||||||||||
| Manufacturing |
$ | 698,661 | $ | 454,531 | $ | 458,494 | $ | 484,645 | $ | 2,096,331 | ||||||||||
| Wheels & Parts |
78,729 | 90,458 | 78,417 | 74,791 | 322,395 | |||||||||||||||
| Leasing & Services |
24,999 | 124,090 | 75,955 | 35,754 | 260,798 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| 802,389 | 669,079 | 612,866 | 595,190 | 2,679,524 | ||||||||||||||||
| Cost of revenue |
||||||||||||||||||||
| Manufacturing |
533,033 | 361,827 | 352,775 | 382,919 | 1,630,554 | |||||||||||||||
| Wheels & Parts |
73,002 | 81,388 | 69,818 | 69,543 | 293,751 | |||||||||||||||
| Leasing & Services |
11,589 | 105,973 | 63,175 | 23,045 | 203,782 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| 617,624 | 549,188 | 485,768 | 475,507 | 2,128,087 | ||||||||||||||||
| Margin |
184,765 | 119,891 | 127,098 | 119,683 | 551,437 | |||||||||||||||
| Selling and administrative expense |
36,549 | 38,244 | 43,280 | 40,608 | 158,681 | |||||||||||||||
| Net gain on disposition of equipment |
(269 | ) | (10,746 | ) | (311 | ) | (4,470 | ) | (15,796 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Earnings from operations |
148,485 | 92,393 | 84,129 | 83,545 | 408,552 | |||||||||||||||
| Other costs |
||||||||||||||||||||
| Interest and foreign exchange |
5,436 | 1,417 | 3,712 | 2,937 | 13,502 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Earnings before income tax and earnings (loss) from unconsolidated affiliates |
143,049 | 90,976 | 80,417 | 80,608 | 395,050 | |||||||||||||||
| Income tax expense |
(44,719 | ) | (25,734 | ) | (22,449 | ) | (19,420 | ) | (112,322 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Earnings before earnings (loss) from unconsolidated affiliates |
98,330 | 65,242 | 57,968 | 61,188 | 282,728 | |||||||||||||||
| Earnings (loss) from unconsolidated affiliates |
383 | 974 | 1,564 | (825 | ) | 2,096 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net earnings |
98,713 | 66,216 | 59,532 | 60,363 | 284,824 | |||||||||||||||
| Net earnings attributable to noncontrolling interest |
(29,280 | ) | (21,348 | ) | (24,180 | ) | (26,803 | ) | (101,611 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net earnings attributable to Greenbrier |
$ | 69,433 | $ | 44,868 | $ | 35,352 | $ | 33,560 | $ | 183,213 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Basic earnings per common share (1) |
$ | 2.36 | $ | 1.54 | $ | 1.22 | $ | 1.15 | $ | 6.28 | ||||||||||
| Diluted earnings per common share (1) |
$ | 2.15 | $ | 1.41 | $ | 1.12 | $ | 1.06 | $ | 5.73 | ||||||||||
| (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 Fourth Quarter Results. . . (Cont.) | Page 11 |
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 before earnings (loss) from unconsolidated affiliates |
35,227 | 61,231 | 69,343 | 97,752 | 263,553 | |||||||||||||||
| 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 using the treasury stock method 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 Fourth Quarter Results. . . (Cont.) | Page 12 |
THE GREENBRIER COMPANIES, INC.
SUPPLEMENTAL INFORMATION
(In thousands, unaudited)
Segment Information
Three months ended August 31, 2016:
| Revenue | Earnings (loss) from operations | |||||||||||||||||||||||
| External | Intersegment | Total | External | Intersegment | Total | |||||||||||||||||||
| Manufacturing |
$ | 484,645 | $ | 83,563 | $ | 568,208 | $ | 89,879 | $ | 23,358 | $ | 113,237 | ||||||||||||
| Wheels & Parts |
74,791 | 8,362 | 83,153 | 4,228 | 447 | 4,675 | ||||||||||||||||||
| Leasing & Services |
35,754 | 2,657 | 38,411 | 9,055 | 2,657 | 11,712 | ||||||||||||||||||
| Eliminations |
— | (94,582 | ) | (94,582 | ) | — | (26,462 | ) | (26,462 | ) | ||||||||||||||
| Corporate |
— | — | — | (19,617 | ) | — | (19,617 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| $ | 595,190 | $ | — | $ | 595,190 | $ | 83,545 | $ | — | $ | 83,545 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
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 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total assets | ||||||||
| August 31, 2016 |
May 31, 2016 |
|||||||
| Manufacturing |
$ | 701,296 | $ | 641,090 | ||||
| Wheels & Parts |
275,599 | 301,474 | ||||||
| Leasing & Services |
518,263 | 523,989 | ||||||
| Unallocated |
342,732 | 319,331 | ||||||
|
|
|
|
|
|||||
| $ | 1,837,890 | $ | 1,785,884 | |||||
|
|
|
|
|
|||||
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 |
||||||||
| August 31, 2016 |
May 31, 2016 |
|||||||
| Revenue |
$ | 84,100 | $ | 95,700 | ||||
| Earnings (loss) from operations |
$ | (500 | ) | $ | 3,000 | |||
| Total assets |
$ | 247,600 | $ | 255,400 | ||||
- More -
| Greenbrier Reports Fourth Quarter Results. . . (Cont.) | Page 13 |
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, 2016 |
May 31, 2016 |
August 31, 2016 |
||||||||||
| Net earnings |
$ | 60,363 | $ | 59,532 | $ | 284,824 | ||||||
| Interest and foreign exchange |
2,937 | 3,712 | 13,502 | |||||||||
| Income tax expense |
19,420 | 22,449 | 112,322 | |||||||||
| Depreciation and amortization |
21,664 | 13,839 | 63,345 | |||||||||
|
|
|
|
|
|
|
|||||||
| Adjusted EBITDA |
$ | 104,384 | $ | 99,532 | $ | 473,993 | ||||||
|
|
|
|
|
|
|
|||||||
| Three Months Ended August 31, 2016 |
Year Ended August 31, 2016 |
|||||||
| Backlog Activity (units) |
||||||||
| Beginning backlog |
31,200 | 41,300 | ||||||
| Orders received |
2,300 | 7,500 | ||||||
| Orders removed |
(1,200 | ) | (1,200 | ) | ||||
| Production held as Leased railcars for syndication |
(800 | ) | (3,600 | ) | ||||
| Production sold directly to third parties |
(4,000 | ) | (16,500 | ) | ||||
|
|
|
|
|
|||||
| Ending backlog |
27,500 | 27,500 | ||||||
|
|
|
|
|
|||||
| Delivery Information (units) |
||||||||
| Production sold directly to third parties |
4,000 | 16,500 | ||||||
| Sales of Leased railcars for syndication |
600 | 3,800 | ||||||
|
|
|
|
|
|||||
| Total deliveries |
4,600 | 20,300 | ||||||
|
|
|
|
|
|||||
- More -
| Greenbrier Reports Fourth Quarter Results. . . (Cont.) | Page 14 |
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 | ||||||||
| August 31, 2016 |
May 31, 2016 |
|||||||
| Weighted average basic common shares outstanding (1) |
29,079 | 29,059 | ||||||
| Dilutive effect of convertible notes (2) |
3,250 | 3,224 | ||||||
| Dilutive effect of performance awards (3) |
118 | 59 | ||||||
|
|
|
|
|
|||||
| Weighted average diluted common shares outstanding |
32,447 | 32,342 | ||||||
|
|
|
|
|
|||||
| (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. |
| (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 | ||||||||
| August 31, 2016 |
May 31, 2016 |
|||||||
| Net earnings attributable to Greenbrier |
$ | 33,560 | $ | 35,352 | ||||
| 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 |
$ | 34,293 | $ | 36,085 | ||||
|
|
|
|
|
|||||
| Weighted average diluted common shares outstanding |
32,447 | 32,342 | ||||||
| Diluted earnings per share |
$ | 1.06 | $ | 1.12 | ||||
# # #