Greenbrier Reports Fourth Quarter and 2020 Fiscal Year Results
LAKE OSWEGO, Ore., Oct. 23, 2020 /PRNewswire/ -- The Greenbrier Companies, Inc. (NYSE: GBX) ("Greenbrier"), a leading international supplier of equipment and services to global freight transportation markets, today reported financial results for its fourth fiscal quarter and year ended August 31, 2020.
Fourth Quarter Highlights
- Liquidity of $919.6 million, including $833.7 million in cash and $85.9 million of available borrowing capacity. Combined with nearly $200 million of additional initiatives in progress, exceeded the $1 billion liquidity and cost savings target.
- Generated operating cash flow of $183.2 million in the quarter primarily driven by decreases in working capital and from syndication activity.
- Diversified new railcar backlog as of August 31, 2020 was 24,600 units with an estimated value of $2.4 billion, including orders for 2,800 railcars valued at approximately $250.0 million received during the quarter. Deliveries in the quarter were 5,100 units.
- Net loss attributable to Greenbrier for the quarter was $0.1 million, or $0.00 per diluted share, on revenue of $636.4 million. Net loss includes $1.9 million, net of tax, ($0.06 per share) of integration related expenses from the American Railcar Industries (ARI) acquisition and $3.6 million, net of tax and noncontrolling interest, ($0.10 per share) of severance expenses.
- Adjusted net earnings attributable to Greenbrier for the quarter were $5.5 million, or $0.16 per diluted share, excluding $5.5 million, net of tax, ($0.16 per share) of integration and severance expenses.
- Adjusted EBITDA for the quarter was $55.7 million, or 8.7% of revenue.
- Board declares a quarterly dividend of $0.27 per share, payable on December 2, 2020 to shareholders as of November 11, 2020 representing Greenbrier's 26th consecutive dividend.
Fiscal Year 2020 Highlights
- Net earnings attributable to Greenbrier for the year were $49.0 million, or $1.46 per diluted share, on revenue of $2.8 billion. Net earnings include $8.4 million, net of tax, ($0.26 per share) of integration related expenses from the ARI acquisition and $12.9 million, net of tax, ($0.38 per share) of severance expenses.
- Adjusted net earnings attributable to Greenbrier were $70.2 million, or $2.10 per diluted share, excluding $21.3 million, net of tax and noncontrolling interest, ($0.64 per share) of integration and severance expenses.
- Adjusted EBITDA for the year was $310.3 million, or 11.1% of revenue.
- Strong cash flows from operations of $272.3 million includes $405.4 million in the second half of the fiscal year.
- New railcar deliveries of 21,700 units for the year were the second highest in Greenbrier's history.
- Generated new railcar orders of 16,600 units, valued at $1.6 billion, with 40% originating internationally.
William A. Furman, Chairman & CEO commented, "Greenbrier continued to perform well during this period of weaker demand. Critically, our diverse $2.4 billion backlog remains supported by strong customer commitments and provides clear visibility for several years. Entering fiscal 2021, we remain focused on maintaining our strong liquidity position. Greenbrier ended the quarter with more than $830 million of cash, an increase of nearly $100 million from the end of the third quarter. Net debt decreased by nearly $360 million since Greenbrier's fiscal second quarter. Our adjusted manufacturing footprint meets today's demand levels without constraining our ability to increase capacity as markets improve, allowing Greenbrier to maintain our presence in every region we serve around the world. Looking forward, we see early signs that demand will improve later in calendar 2021. Greenbrier is well-positioned to benefit from improving conditions in our core markets."
Business Update & Outlook
As we enter fiscal 2021, Greenbrier continues to execute on its COVID-19 response plan, and protecting our employees within the work environment remains our top priority. The strict protocols enacted and rapid response to clusters has allowed us to operate safely and efficiently throughout the world. Continued vigilance is required as community spread of COVID-19 is increasing in many areas where we operate. We are continuously working to maintain a low incident rate of COVID-19 among our employees by focusing on their health and enhancing the preventative and remedial actions of our rapid response teams across the company.
We also remain focused on preserving the near-term and longer-term financial health of Greenbrier in light of the economic consequences of the pandemic and an industry downturn. Maintaining cash flow and liquidity are essential components of Greenbrier's current operating strategy, and we have been very successful in this regard. We addressed our cost structure by reducing operating expenses and capital expenditures and are appropriately positioned for today's market environment. We closed 13 rail production lines in fiscal 2020 and are continuously adjusting capacity to align with an evolving demand outlook. We also reduced our global workforce by over 6,500 employees, or by about 40%, including both staff and production employees. Looking forward, while we remain focused on managing our cost base, we will be nimble and adjust capacity to ensure Greenbrier's ability to fully participate in an economic recovery. Coupled with a new railcar backlog valued at approximately $2.4 billion, we have preserved Greenbrier's ability to operate in a very challenging market environment.
Financial Summary
Q4 FY20 | Q3 FY20 | Sequential Comparison – Main Drivers | |
Revenue | $636.4M | $762.6M | Fewer deliveries and lower activity levels in Wheels, Repair & Parts |
Gross margin | 10.5% | 14.1% | Less syndication activity and operating inefficiencies in Manufacturing and Wheels, Repair & Parts |
Selling and administrative | $46.3M | $49.5M | Continuing cost reduction initiatives result in reduced employee-related and travel & entertainment expenses; each quarter includes $1.8 million of severance expense |
Net gain on disposition of equipment | $0.6M | $8.8M | Minimal fleet disposition activity |
Adjusted EBITDA | $55.7M | $99.9M | Lower operating earnings |
Effective tax rate | 21.3% | 41.2% | Continued volatility from geographic mix of earnings and discrete items related to foreign currency fluctuations |
Adjusted net earnings attributable to Greenbrier | $5.5M(1) | $35.1M(2) | Lower operating earnings reflecting fewer deliveries, operating inefficiencies and lower net gains on equipment sales partially offset by lower selling & administrative expense |
Adjusted diluted EPS | $0.16(1) | $1.05(2) |
(1) Excludes expense of $5.6 million ($0.16 per share), net of tax and noncontrolling interest, associated with ARI integration related expenses and severance expenses. |
(2) Excludes expense of $7.3 million ($0.22 per share), net of tax, associated with ARI integration related expenses and severance expenses. |
Segment Summary
Q4 FY20 | Q3 FY20 | Sequential Comparison – Main Drivers | |
Manufacturing | |||
Revenue | $549.7M | $653.0M | Lower production rates and less syndication activity results in fewer deliveries |
Gross margin | 9.4% | 13.8% | Operating inefficiencies from rationalizing capacity and less syndication activity |
Operating margin (1) | 5.4% | 10.5% | |
Deliveries (2) | 4,900 | 5,400 | |
Wheels, Repair & Parts | |||
Revenue | $64.8M | $82.0M | Reduced wheel volumes and repair activity |
Gross margin | 6.0% | 8.6% | Operating inefficiencies due to lower business activity levels |
Operating margin (1) | 1.3% | 4.6% | |
Leasing & Services | |||
Revenue | $22.0M | $27.5M | Less interim rent on leased railcars for syndication and no externally sourced syndication sales activity |
Gross margin | 53.2% | 37.4% | No externally sourced syndication sales activity |
Operating margin (1) (3) | 29.7% | 43.0% | |
Fleet utilization | 90.4% | 92.1% | |
(1) See supplemental segment information on page 11 for additional information. |
(2) Excludes Brazil deliveries which are not consolidated into manufacturing revenue and margins. |
(3) Includes Net gain on disposition of equipment, which is excluded from gross margin. |
Conference Call
Greenbrier will host a teleconference to discuss its fourth quarter 2020 results. In conjunction with this news release, Greenbrier has posted a supplemental earnings presentation to our website. Teleconference details are as follows:
- October 23, 2020
- 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 other geographies as opportunities arise. 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, and other components. Greenbrier owns a lease fleet of 8,300 railcars and performs management services for 393,000 railcars. Learn more about Greenbrier at www.gbrx.com.
THE GREENBRIER COMPANIES, INC. | |||||
CONSOLIDATED BALANCE SHEETS | |||||
(In thousands, unaudited) | |||||
August 31, 2020 | May 31, 2020 | February 29, 2020 | November 30, 2019 | August 31,2019 | |
Assets | |||||
Cash and cash equivalents | $ 833,745 | $ 735,258 | $ 169,899 | $ 253,602 | $ 329,684 |
Restricted cash | 8,342 | 8,704 | 8,569 | 8,648 | 8,803 |
Accounts receivable, net | 239,597 | 261,629 | 326,229 | 313,786 | 373,383 |
Inventories | 529,529 | 675,442 | 709,115 | 733,806 | 664,693 |
Leased railcars for syndication | 107,671 | 136,144 | 255,073 | 135,319 | 182,269 |
Equipment on operating leases, net | 350,442 | 355,841 | 385,974 | 396,187 | 366,688 |
Property, plant and equipment, net | 711,524 | 719,155 | 723,326 | 730,730 | 717,973 |
Investment in unconsolidated affiliates | 72,354 | 75,508 | 79,082 | 85,141 | 91,818 |
Intangibles and other assets, net | 190,322 | 181,315 | 160,709 | 162,089 | 125,379 |
Goodwill | 130,308 | 130,035 | 129,684 | 129,468 | 129,947 |
$ 3,173,834 | $ 3,279,031 | $ 2,974,660 | $ 2,948,776 | $ 2,990,637 | |
Liabilities and Equity | |||||
Revolving notes | $ 351,526 | $ 416,535 | $ 37,196 | $ 29,502 | $ 27,115 |
Accounts payable and accrued liabilities | 463,880 | 488,969 | 499,898 | 527,789 | 568,360 |
Deferred income taxes | 7,701 | 4,354 | 9,173 | 9,417 | 13,946 |
Deferred revenue | 42,467 | 63,536 | 70,869 | 59,657 | 85,070 |
Notes payable, net | 804,088 | 806,919 | 811,860 | 817,830 | 822,885 |
Contingently redeemable noncontrolling interest | 31,117 | 30,611 | 30,782 | 31,723 | 31,564 |
Total equity - Greenbrier | 1,293,043 | 1,291,221 | 1,286,472 | 1,281,808 | 1,276,730 |
Noncontrolling interest | 180,012 | 176,886 | 201,410 | 191,050 | 164,967 |
Total equity | 1,473,055 | 1,468,107 | 1,487,882 | 1,472,858 | 1,441,697 |
$ 3,173,834 | $ 3,279,031 | $ 2,947,660 | $ 2,948,776 | $ 2,990,637 | |
THE GREENBRIER COMPANIES, INC. | |||||
CONSOLIDATED STATEMENTS OF INCOME | |||||
(In thousands, except per share amounts, unaudited) | |||||
Years Ended August 31, | |||||
2020 | 2019 | 2018 | |||
Revenue | |||||
Manufacturing | $ 2,349,971 | $ 2,431,499 | $ 2,044,586 | ||
Wheels, Repair & Parts | 324,670 | 444,502 | 347,023 | ||
Leasing & Services | 117,548 | 157,590 | 127,855 | ||
2,792,189 | 3,033,591 | 2,519,464 | |||
Cost of revenue | |||||
Manufacturing | 2,065,169 | 2,137,625 | 1,727,407 | ||
Wheels, Repair & Parts | 302,189 | 420,890 | 318,330 | ||
Leasing & Services | 71,700 | 108,590 | 64,672 | ||
2,439,058 | 2,667,105 | 2,110,409 | |||
Margin | 353,131 | 366,486 | 409,055 | ||
Selling and administrative | 204,706 | 213,308 | 200,439 | ||
Net gain on disposition of equipment | (20,004) | (40,963) | (44,369) | ||
Goodwill impairment | - | 10,025 | - | ||
Earnings from operations | 168,429 | 184,116 | 252,985 | ||
Other costs | |||||
Interest and foreign exchange | 43,619 | 30,912 | 29,368 | ||
Earnings before income tax and earnings (loss) from unconsolidated affiliates | 124,810 | 153,204 | 223,617 | ||
Income tax expense | (40,184) | (41,588) | (32,893) | ||
Earnings before earnings (loss) from unconsolidated affiliates | 84,626 | 111,616 | 190,724 | ||
Earnings (loss) from unconsolidated affiliates | 2,960 | (5,805) | (18,661) | ||
Net earnings | 87,586 | 105,811 | 172,063 | ||
Net earnings attributable to noncontrolling interest | (38,619) | (34,735) | (20,282) | ||
Net earnings attributable to Greenbrier | $ 48,967 | $ 71,076 | $ 151,781 | ||
Basic earnings per common share | $ 1.50 | $ 2.18 | $ 4.92 | ||
Diluted earnings per common share | $ 1.46 | $ 2.14 | $ 4.68 | ||
Weighted average common shares | |||||
Basic | 32,670 | 32,615 | 30,857 | ||
Diluted | 33,441 | 33,165 | 32,835 | ||
Dividends declared per common share | $ 1.06 | $ 1.00 | $ 0.96 | ||
THE GREENBRIER COMPANIES, INC. | |||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
(In thousands, unaudited) | |||||
Years Ended August 31, | |||||
2020 | 2019 | 2018 | |||
Cash flows from operating activities: | |||||
Net earnings | $ 87,586 | $ 105,811 | $ 172,063 | ||
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: | |||||
Deferred income taxes | (9,489) | (20,225) | (40,496) | ||
Depreciation and amortization | 109,850 | 83,731 | 74,356 | ||
Net gain on disposition of equipment | (20,004) | (40,963) | (44,369) | ||
Stock based compensation expense | 8,997 | 11,153 | 29,314 | ||
Accretion of debt discount | 5,504 | 4,458 | 4,171 | ||
Noncontrolling interest adjustments | 1,436 | 7,402 | 2,864 | ||
Goodwill Impairment | - | 10,025 | - | ||
Other | 1,142 | 145 | 1,688 | ||
Decrease (increase) in assets: | |||||
Accounts receivable, net | 135,326 | 13,022 | (83,551) | ||
Inventories | 166,607 | (143,168) | (26,592) | ||
Leased railcars for syndication | (12,942) | (96,110) | (54,023) | ||
Other assets | (64,995) | 6,843 | 34,115 | ||
Increase (decrease) in liabilities: | |||||
Accounts payable and accrued liabilities | (108,837) | 55,910 | 54,032 | ||
Deferred revenue | (27,920) | (19,275) | (20,231) | ||
Net cash provided by (used in) operating activities | 272,261 | (21,241) | 103,341 | ||
Cash flows from investing activities: | |||||
Acquisitions, net of cash acquired | - | (361,878) | (34,874) | ||
Proceeds from sales of assets | 83,484 | 125,427 | 153,224 | ||
Capital expenditures | (66,879) | (198,233) | (176,848) | ||
Investment in and advances to unconsolidated affiliates | (1,815) | (11,393) | (26,455) | ||
Cash distribution from unconsolidated affiliates and other | 12,693 | 2,096 | 4,661 | ||
Net cash provided by (used in) investing activities | 27,483 | (443,981) | (80,292) | ||
Cash flows from financing activities: | |||||
Net changes in revolving notes with maturities of 90 days or less | 146,542 | (105) | 23,401 | ||
Proceeds from revolving notes with maturities longer than 90 days | 176,500 | - | - | ||
Proceeds from issuance of notes payable | - | 525,000 | 13,771 | ||
Repayments of notes payable | (30,179) | (182,971) | (22,269) | ||
Debt issuance costs | - | (8,630) | - | ||
Dividends | (35,173) | (33,193) | (29,914) | ||
Cash distribution to joint venture partner | (38,969) | (16,879) | (73,033) | ||
Investment by joint venture partner | - | - | 6,500 | ||
Tax payments for net share settlement of restricted stock | (2,266) | (6,321) | (7,723) | ||
Net cash provided by (used in) financing activities | 216,455 | 276,901 | (89,267) | ||
Effect of exchange rate changes | (12,599) | (12,666) | (14,666) | ||
Increase (decrease) in cash and cash equivalents and restricted cash | 503,600 | (200,987) | (80,884) | ||
Cash and cash equivalents and restricted cash | |||||
Beginning of period | 338,487 | 539,474 | 620,358 | ||
End of period | $ 842,087 | $ 338,487 | $ 539,474 | ||
Balance Sheet Reconciliation: | |||||
Cash and cash equivalents | $ 833,745 | $ 329,684 | $ 530,655 | ||
Restricted cash | 8,342 | 8,803 | 8,819 | ||
Total cash and cash equivalents and restricted cash as presented above | $ 842,087 | $ 338,487 | $ 539,474 | ||
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, 2020 | May 31, 2020 | August 31,2020 | |||||
Net earnings | $ 7,691 | $ 35,869 | $ 87,586 | ||||
Interest and foreign exchange | 10,596 | 7,562 | 43,619 | ||||
Income tax expense | 2,306 | 24,421 | 40,184 | ||||
Depreciation and amortization | 27,398 | 23,114 | 109,850 | ||||
Severance expense | 5,919 | 6,341 | 21,201 | ||||
ARI integration related costs | 1,750 | 2,545 | 7,821 | ||||
Adjusted EBITDA | $ 55,660 | $ 99,852 | $ 310,261 | ||||
Three MonthsEnded | Year Ended | ||||
August 31, 2020 | August 31,2020 | ||||
Backlog Activity (units) (1) | |||||
Beginning backlog | 26,700 | 30,300 | |||
Orders received | 2,800 | 16,600 | |||
Contract modification | -- | (575) | |||
Production held as Leased railcars for syndication | (700) | (3,200) | |||
Production sold directly to third parties | (4,200) | (18,525) | |||
Ending backlog | 24,600 | 24,600 | |||
Delivery Information (units) (1) | |||||
Production sold directly to third parties | 4,200 | 18,525 | |||
Sales of Leased railcars for syndication | 900 | 3,175 | |||
Total deliveries | 5,100 | 21,700 | |||
(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) | |||||||||
Operating Results by Quarter for 2020 are as follows: | |||||||||
First | Second | Third | Fourth | Total | |||||
Revenue | |||||||||
Manufacturing | $ 657,367 | $ 489,943 | $ 653,007 | $ 549,654 | $ 2,349,971 | ||||
Wheels, Repair & Parts | 86,608 | 91,225 | 82,024 | 64,813 | 324,670 | ||||
Leasing & Services | 25,384 | 42,680 | 27,526 | 21,958 | 117,548 | ||||
769,359 | 623,848 | 762,557 | 636,425 | 2,792,189 | |||||
Cost of revenue | |||||||||
Manufacturing | 581,912 | 422,309 | 562,793 | 498,155 | 2,065,169 | ||||
Wheels, Repair & Parts | 81,892 | 84,373 | 75,001 | 60,923 | 302,189 | ||||
Leasing & Services | 13,366 | 30,830 | 17,232 | 10,272 | 71,700 | ||||
677,170 | 537,512 | 655,026 | 569,350 | 2,439,058 | |||||
Margin | 92,189 | 86,336 | 107,531 | 67,075 | 353,131 | ||||
Selling and administrative expense | 54,364 | 54,597 | 49,494 | 46,251 | 204,706 | ||||
Net gain on disposition of equipment | (3,959) | (6,697) | (8,775) | (573) | (20,004) | ||||
Earnings from operations | 41,784 | 38,436 | 66,812 | 21,397 | 168,429 | ||||
Other costs | |||||||||
Interest and foreign exchange | 12,852 | 12,609 | 7,562 | 10,596 | 43,619 | ||||
Earnings before income tax and earnings (loss) from unconsolidated affiliates | 28,932 | 25,827 | 59,250 | 10,801 | 124,810 | ||||
Income tax expense | (5,994) | (7,463) | (24,421) | (2,306) | (40,184) | ||||
Earnings before earnings (loss) from unconsolidated affiliates | 22,938 | 18,364 | 34,829 | 8,495 | 84,626 | ||||
Earnings (loss) from unconsolidated affiliates | 1,073 | 1,651 | 1,040 | (804) | 2,960 | ||||
Net earnings | 24,011 | 20,015 | 35,869 | 7,691 | 87,586 | ||||
Net earnings attributable to noncontrolling interest | (16,342) | (6,386) | (8,097) | (7,794) | (38,619) | ||||
Net earnings (loss) attributable to Greenbrier | $ 7,669 | $ 13,629 | $ 27,772 | $ (103) | $ 48,967 | ||||
Basic earnings per common share (1) | $ 0.24 | $ 0.42 | $ 0.85 | $ (0.00) | $ 1.50 | ||||
Diluted earnings per common share (1) | $ 0.23 | $ 0.41 | $ 0.83 | $ (0.00) | $ 1.46 | ||||
Dividends declared per common share | $ 0.25 | $ 0.27 | $ 0.27 | $ 0.27 | $ 1.06 | ||||
(1) | Quarterly amounts may 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 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 | ||||
Dividends declared per common share | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 1.00 | ||||
(1) | Quarterly amounts may 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, unaudited) | |||||||||||
Segment Information | |||||||||||
Three months ended August 31, 2020: | |||||||||||
Revenue | Earnings (loss) from operations | ||||||||||
External | Intersegment | Total | External | Intersegment | Total | ||||||
Manufacturing | $ 549,654 | $ 1,683 | $ 551,337 | $ 29,695 | $ (19) | $ 29,676 | |||||
Wheels, Repair & Parts | 64,813 | 95 | 64,908 | 813 | 3 | 816 | |||||
Leasing & Services | 21,958 | 10,898 | 32,856 | 6,520 | 10,528 | 17,048 | |||||
Eliminations | - | (12,676) | (12,676) | - | (10,512) | (10,512) | |||||
Corporate | - | - | - | (15,631) | - | (15,631) | |||||
$ 636,425 | $ - | $ 636,425 | $ 21,397 | $ - | $ 21,397 | ||||||
Three months ended May 31, 2020: | |||||||||||
Revenue | Earnings (loss) from operations | ||||||||||
External | Intersegment | Total | External | Intersegment | Total | ||||||
Manufacturing | $ 653,007 | $ 1,151 | $ 654,158 | $ 68,445 | $ 95 | $ 68,540 | |||||
Wheels, Repair & Parts | 82,024 | 1,527 | 83,551 | 3,785 | (393) | 3,392 | |||||
Leasing & Services | 27,526 | 14,841 | 42,367 | 11,837 | 14,454 | 26,291 | |||||
Eliminations | - | (17,519) | (17,519) | - | (14,156) | (14,156) | |||||
Corporate | - | - | - | (17,255) | - | (17,255) | |||||
$ 762,557 | $ - | $ 762,557 | $ 66,812 | $ - | $ 66,812 | ||||||
Total assets | |||||
August 31,2020 | May 31, 2020 | ||||
Manufacturing | $ 1,301,715 | $ 1,441,052 | |||
Wheels, Repair & Parts | 271,862 | 296,888 | |||
Leasing & Services | 739,025 | 777,523 | |||
Unallocated, including cash | 861,232 | 763,568 | |||
$ 3,173,834 | $ 3,279,031 | ||||
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, 2020 | May 31, 2020 | August 31, 2020 | |||
Weighted average basic common shares outstanding (1) | 32,658 | 32,690 | 32,670 | ||
Dilutive effect of convertible notes (2) | - | - | - | ||
Dilutive effect of restricted stock units (3) | - | 788 | 771 | ||
Weighted average diluted common shares outstanding | 32,658 | 33,478 | 33,441 | ||
(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, 2020 | May 31, 2020 | August 31, 2020 | |||||
Net earnings (loss) attributable to Greenbrier | $ (103) | $ 27,772 | $ 48,967 | ||||
ARI integration related costs, net of tax (1) | 1,936 | 2,539 | 8,358 | ||||
Severance expense, net of tax & noncontrolling interest (2) | 3,636 | 4,803 | 12,867 | ||||
Adjusted net earnings attributable to Greenbrier | $ 5,469 | $ 35,114 | $ 70,192 | ||||
(1) | Net of tax of $620, $813, and $2,689, respectively. |
(2) | Net of tax and noncontrolling interest of $2,283, $1,538 and $8,334, respectively. |
Reconciliation of Diluted earnings per share to Adjusted diluted earnings per share | ||||||||
Three Months Ended | Year Ended | |||||||
August 31, 2020 | May 31, 2020 | August 31, 2020 | ||||||
Diluted earnings per share | $ 0.00 | $ 0.83 | $ 1.46 | |||||
ARI integration related costs, net of tax | 0.06 | 0.08 | 0.26 | |||||
Severance expense, net of tax & noncontrolling interest | 0.10 | 0.14 | 0.38 | |||||
Adjusted diluted earnings per share | $ 0.16 | $ 1.05 | $ 2.10 | |||||
Weighted average diluted shares used to calculate Adjusted diluted earnings per share |
33,519 |
33,478 |
33,441 | |||||
"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 "achieve," "align," "believe," "continue," "improve," "maintain," "target," "will," "working," and similar expressions to identify forward-looking statements. These forward-looking statements include, without limitation, statements about backlog, future liquidity and cash flow, spending reductions, available borrowing capacity, lower capital expenditures, expected trends as well as other information regarding future performance and strategies and appear throughout this press release including in the headlines and the sections "Fourth Quarter Highlights" and "Business Update & Outlook." 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, the following. (1) We are unable to predict when, how, or with what magnitude COVID-19 governmental reaction to the pandemic, and related economic disruptions will negatively impact our business: we may be prevented from operating our facilities; the operations of our customers may be disrupted increasing the likelihood that our customers may attempt to delay, defer or cancel orders, or cease to operate as going concerns; the operations of our suppliers may be disrupted; our indebtedness may increase; we may breach the covenants in our credit agreement; the market price of our common stock may drop or remain volatile; we may incur significant employee health care costs under our self-insurance programs. The longer the pandemic continues, the more likely that negative impacts on our business will occur, some of which we cannot now foresee. (2) Our backlog of railcar units and marine vessels is not necessarily indicative of future results of operations. Certain orders in backlog are subject to customary documentation which may not occur. Customers may attempt to cancel or modify orders or refuse to accept and pay for products. The likelihood of cancellations, modifications, rejection and non-payment for our products generally increases during periods of market weakness. The timing of converting backlog to revenue is also materially impacted by our decision whether to lease railcars, sell railcars, or syndicate railcars with a lease attached to an investor. More information on 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 report on Form 10-K. 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 Financial Metric Definitions
Adjusted EBITDA, Adjusted net earnings attributable to Greenbrier and Adjusted diluted EPS are not financial measures under generally accepted accounting principles (GAAP). These metrics are performance measurement tools 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, Depreciation and amortization and excluding the impact associated with items we do not believe are indicative of our core business or which affect comparability. We believe the presentation of Adjusted EBITDA provides useful information as it excludes the impact of financing, foreign exchange, income taxes and the accounting effects of capital spending. These items may vary for different companies for reasons unrelated to the overall operating performance of a company's core business. We believe this assists in comparing our performance across reporting periods.
Adjusted net earnings attributable to Greenbrier and Adjusted diluted EPS excludes the impact associated with items we do not believe are indicative of our core business or which affect comparability. We believe this assists in comparing our performance across reporting periods.
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SOURCE The Greenbrier Companies, Inc.