Exhibit 99.1
News Release |  |
One Centerpointe Drive Suite 200 Lake Oswego, Oregon 97035 503-684-7000 | www.gbrx.com |
For release: October 30, 2014, 6:00 a.m. EDT | Contact: | Mark Rittenbaum | ||||||
| 503-684-7000 |
Greenbrier Reports Record Results for Fourth Quarter and Fiscal Year;
Backlog Grows to Record 31,500 units
~ Posts Q4 EPS of $1.03, before gain on contribution to GBW ~
~ Grows backlog by 5,100 units in quarter; receives orders for an additional 11,400 units after quarter end ~
~ Issues 2015 earnings guidance of $4.25 to $4.55 per share ~
~ Sets new goals of at least 20% aggregate gross margin and 25% ROIC by second half of fiscal 2016 ~
Lake Oswego, Oregon, October 30, 2014 –The Greenbrier Companies, Inc. (NYSE: GBX) today reported financial results for its fourth fiscal quarter and full year ended August 31, 2014.
Fourth Quarter Highlights
| • | Net earnings for the quarter were $33.7 million, or $1.03 per diluted share, excluding a non-cash gain of $13.6 million (net of tax) on contribution of our repair operations to GBW, on record revenue of $618.1 million. |
| • | Net earnings attributable to Greenbrier for the quarter, which includes the gain on contribution to GBW, were $47.4 million, or $1.43 per diluted share. |
| • | Record adjusted EBITDA for the quarter was $80.8 million, or 13.1% of revenue. |
| • | Record railcar backlog as of August 31, 2014 was 31,500 units with an estimated value of $3.33 billion (average unit sale price of $106,000), compared to 26,400 units with an estimated value of $2.75 billion (average unit sale price of $104,000) as of May 31, 2014. |
| • | Orders for 10,400 new railcars valued at $1.06 billion received during the quarter. After quarter end, Greenbrier received orders for an additional 11,400 units valued at nearly $1 billion. |
| • | New railcar deliveries totaled 4,800 units for the quarter, compared to 4,300 units for the quarter ended May 31, 2014. |
| • | Marine backlog as of August 31, 2014 totaled approximately $112 million. |
| • | Formed GBW Railcar Services, LLC (GBW), a 50/50 joint venture with Watco Companies, LLC (Watco) focused on retrofitting, refurbishing and repairing railcars through a network of 38 shops across North America, including 14 sites certified for tank car retrofitting and repair. Greenbrier accounts for its interest in GBW under the equity method of accounting. |
| • | Board declares a quarterly dividend of $0.15 per share payable on December 3, 2014 to shareholders of record as of November 12, 2014. |
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| Greenbrier Reports Record Results for Fourth Quarter…(Cont.) | Page 2 |
| • | To date, repurchased 1,017,562 shares of common stock completing the $50 million share repurchase program announced October 31, 2013. |
| • | New $50 million share repurchase program authorized. |
Fiscal Year 2014 Highlights
| • | Record net earnings, excluding gain on contribution to GBW and restructuring charges, were $99.3 million, or $3.07 per diluted share, on revenue of $2.2 billion. |
| • | Adjusted EBITDA was a record $253.8 million or 11.5% of revenue. |
| • | Achieved ROIC of 16.9% excluding gain on contribution to GBW and restructuring charges. |
| • | New railcar deliveries totaled 16,200 units. |
| • | Orders totaled 34,300 units valued at $3.42 billion across a broad range of railcar types. |
| • | Cash generated from operating activities was $136 million. |
Strategic Initiatives
| • | Fourth quarter aggregate gross margin reached 17.2%, compared to 16.3% in the third quarter, surpassing our stated goal of a minimum 13.5% by the fourth quarter of fiscal 2014. |
| • | Manufacturing gross margin reached a record 17.9% in the fourth quarter, driven by product mix, pricing, production efficiencies, and leasing strategy. |
| • | Successfully met $100 million capital efficiency goal, driven by asset-light leasing model. Net debt has decreased nearly $149 million since February 2013 when goal was set. |
| • | New goals set of at least 20% aggregate gross margin and 25% ROIC by the second half of fiscal 2016. |
William A. Furman, Chairman and CEO, said, “We leveraged our integrated business model to achieve our best annual performance yet and are well positioned to continue to grow in 2015 and beyond. We are obtaining the highest level of new orders in Greenbrier’s history. They are broad-based across many railcar types including tank cars, grain and sand covered hoppers, automotive, intermodal, boxcars, gondolas, and plastic pellet cars, among others. We also achieved record production levels and deliveries, all while improving operating efficiencies and enhancing our footprint in our manufacturing facilities. Our leasing business continues to grow and has been completely transformed into an asset-light model, as we syndicate increased volumes of leased railcars to multiple investors who have access to low-cost capital and who value Greenbrier’s products and services. Our owned lease fleet has contracted by $85 million and railcars under our management have increased by 13,000 units since we announced this strategic initiative in April 2013. Our combined actions produced manufacturing gross margins in the fourth quarter of 17.9%, a nearly six percentage point increase from last year. With a diverse backlog of 31,500 units, of which less than 40% are tank cars, we have good visibility stretching into our fiscal 2016.”
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| Greenbrier Reports Record Results for Fourth Quarter…(Cont.) | Page 3 |
“We have refocused our Wheels, Refurbishment & Parts segment. Our 22 railcar repair shops and Watco’s 16 shops have been moved into GBW, where the scale of a 38-shop network and operational excellence will yield long-lasting competitive advantages. Demand for shop capacity and, in particular, tank car shop capacity to address the need for safe rail transport solutions is robust. The GBW network includes 14 shops specializing in tank car repair. Our wheels and parts business at a combined 13 locations is well positioned to produce growth, as the aftermarket for railcar wheels, parts and related services rises along with an expanding North American railcar fleet.”
“Looking ahead, we will continue our balanced approach to capital allocation among (i) investments needed to drive efficiency and margin improvement through our organization, (ii) growth capital; and, (iii) returning capital to shareholders through dividends and share repurchases. We will accelerate capital investments in 2015, which will drive operational efficiencies and complete previously announced capacity projects at our facilities in Mexico. These projects include the transitioning from one leased facility in Sahagun, Mexico to an owned facility in Tlaxcala, Mexico, a doubling of our tank car capacity with the flexibility to also build other railcar types on these lines and enhance vertical integration.”
“We continue to pioneer efforts to improve safety in the rail industry with our Tank Car of the Future design and investments in capacity at GBW to retrofit older legacy tank cars. Last month we filed comments with the U.S. Department of Transportation (USDOT), which we expect will issue a final rule on tank car standards by year end. We are confident that Washington will recognize Greenbrier’s Tank Car of the Future, as described in the USDOT’s proposed rule, as the best design for safer transportation of crude, ethanol and other flammables in North America and that GBW is well positioned to retrofit older legacy tank cars at an accelerated pace. Swift and appropriate action will help reinforce America’s longstanding priority to protect the public and preserve the natural environment, while taking care not to impede the economic prosperity associated with the energy renaissance in North America.”
“I am proud of our employees, our shared achievements together and our successful completion of the strategic initiatives we announced 18 months ago. I’m confident in the balanced and integrated approach our leaders are taking in each segment of our business in 2015, and that this approach will enhance shareholder value over the long term,” continued Furman.
Business Outlook
Furman concluded, “We ended August with over $505 million of liquidity from cash balances and available borrowings on revolving credit facilities. With a strong backlog, good industry fundamentals and positive outlook, we are investing in capital projects with high returns where we will quickly recoup
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| Greenbrier Reports Record Results for Fourth Quarter…(Cont.) | Page 4 |
our investments. We are also pursuing growth opportunities in areas core to our business that will diversify our revenue base throughout the cycle. The future looks bright for Greenbrier. We remain committed to operational excellence in each of our businesses and enhancing the long-term trajectory of key metrics, such as gross margins, EBITDA and ROIC.”
Based on current business trends and industry forecasts in fiscal 2015, Greenbrier believes:
| • | Deliveries in FY15 will exceed 20,000 units |
| • | Revenue will exceed $2.5 billion, which excludes revenue from GBW as it is accounted for under the equity method of accounting |
| • | Diluted EPS will be in the range of $4.25 to $4.55 |
Similar to previous years, financial results in the second half of the year are expected to be stronger than the first half. Also, while gross margins are expected to increase overall, management does not believe its track will be linear.
In addition, the Company has established two new financial goals:
| • | Aggregate gross margin of at least 20% by the second half of fiscal 2016 |
| • | ROIC of at least 25% by the second half of fiscal 2016 |
Financial Summary
| Q4 FY14 | Q3 FY14 | Sequential Comparison – Main Drivers | ||||||||||||||
Revenue | $ | 618.1 | M | $ | 593.3 | M | Up 4.2% primarily due to increased deliveries | |||||||||
Gross margin | 17.2 | % | 16.3 | % | Up 90 bps due to higher deliveries, favorable product mix and increased marine production | |||||||||||
SG&A | $ | 36.2 | M | $ | 34.8 | M | Driven by employee-related costs associated with increased levels of activity | |||||||||
Gain on disposition of equipment | $ | 0.4 | M | $ | 5.6 | M | Timing of sales fluctuates and is opportunistic, typically ranging from $1.0M to $5.0M per quarter | |||||||||
Special items | ($ | 29.0 | M) | $ | 0.1 | M | Q4 non-cash gain resulted from contribution to GBW, Q3 restructuring charges related to the Wheel, Repair & Parts segment | |||||||||
Adjusted EBITDA (1) | $ | 80.8 | M | $ | 78.0 | M | Up 3.6% driven by increased deliveries and operating efficiencies | |||||||||
Effective tax rate | 37.7 | % | 26.3 | % | Higher rate driven by high rate on gain on contribution to GBW. Excluding the tax on gain, the rate was 30.6%. | |||||||||||
Net earnings(1) | $ | 33.7 | M | $ | 33.6 | M | Higher gross margin offset by lower gain on disposition of equipment | |||||||||
Diluted EPS(1) | $ | 1.03 | $ | 1.03 | ||||||||||||
| (1) | Excluding non-cash gain on contribution to GBW in Q4 and restructuring charges in Q3. |
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| Greenbrier Reports Record Results for Fourth Quarter…(Cont.) | Page 5 |
Segment Summary
| Q4 FY14 | Q3 FY14 | Sequential Comparison – Main Drivers | ||||||||||||||
| Manufacturing | ||||||||||||||||
Revenue | $ | 492.1 | M | $ | 425.6 | M | Up 15.6% primarily due to increase in deliveries | |||||||||
Gross margin | 17.9 | % | 17.3 | % | Increased due to improved efficiencies and product mix including more marine production | |||||||||||
Operating margin (1) | 14.8 | % | 14.4 | % | ||||||||||||
Deliveries | 4,800 | 4,300 | ||||||||||||||
Wheels, Repair & Parts | ||||||||||||||||
Revenue | $ | 105.0 | M | $ | 140.7 | M | Down 25.4% primarily attributable to contribution of repair operation to the GBW joint venture | |||||||||
Gross margin | 6.5 | % | 7.7 | % | Down 120 bps due to operating inefficiencies | |||||||||||
Operating margin (1) | 30.3 | % | 3.9 | % | Increase due to gain on contribution to GBW; excluding gain margin was 2.7% | |||||||||||
Leasing & Services | ||||||||||||||||
Revenue | $ | 21.0 | M | $ | 27.0 | M | Q3 benefited from syndication of third party produced railcars | |||||||||
Gross margin | 53.7 | % | 45.1 | % | Up 86 bps due to performance of the owned lease fleet | |||||||||||
Operating margin (1) (2) | 38.9 | % | 53.9 | % | Down 15% due to lower gains on disposition of equipment | |||||||||||
Lease fleet utilization | 98.2 | % | 97.9 | % | ||||||||||||
| (1) | See supplemental segment information on page 13 for additional information. |
| (2) | Includes Gains on disposition of equipment, which is excluded from gross margin. |
Conference Call
Greenbrier will host a teleconference to discuss its fourth quarter 2014 results. In conjunction with this news release, Greenbrier has posted a supplemental earnings presentation to our website. Teleconference details are as follows:
| • | October 30, 2014 |
| • | 8:00 a.m. Pacific Daylight Time |
| • | Phone: 1-630-395-0143, Password: “Greenbrier” |
| • | Real-time Audio Access: (“Newsroom” athttp://www.gbrx.com) |
Please access the site 10 minutes prior to the start time. Following the call, a webcast replay will be available for 30 days. Telephone replay will be available through November 15, 2014, at 1-402-280-9971.
About Greenbrier Companies
Greenbrier, (www.gbrx.com), headquartered in Lake Oswego, Oregon, is a leading supplier of transportation equipment and services to the railroad industry. We build new railroad freight cars in our 4 manufacturing facilities in the U.S. and Mexico and marine barges at our U.S. manufacturing facility. Greenbrier also sells reconditioned wheel sets and provides wheel services at 9 locations throughout the U.S. We recondition, manufacture and sell railcar parts at 4 U.S. sites. Greenbrier is a 50/50 joint venture partner with Watco Companies, LLC in GBW Railcar Services, LLC which repairs and refurbishes freight cars at 38 locations across North America, including 14 tank car repair and maintenance facilities certified by the
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| Greenbrier Reports Record Results for Fourth Quarter…(Cont.) | Page 6 |
Association of American Railroads. Greenbrier builds new railroad freight cars and refurbishes freight cars for the European market through our operations in Poland. Greenbrier owns approximately 8,500 railcars, and performs management services for approximately 238,000 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 increase manufacturing capacity, restructuring plans, new railcar delivery volumes and schedules, growth 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 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; 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, inefficiencies associated with expansion or start-up of production lines or increased 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; 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, 2014, 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.
Net earnings excluding gain on contribution to GBW and restructuring charges, Adjusted EBITDA, and Diluted earnings per share excluding gain on contribution to GBW and restructuring charges are not financial measures under generally accepted accounting principles (GAAP). We define Net earnings excluding gain on contribution to GBW and restructuring charges as Net earnings before gain on contribution to GBW (after-tax) and restructuring charges (after-tax). We define Adjusted EBITDA as Net earnings attributable to Greenbrier before interest and foreign exchange, income tax expense, restructuring charges, gain on contribution to GBW and
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| Greenbrier Reports Record Results for Fourth Quarter…(Cont.) | Page 7 |
depreciation and amortization. We define Diluted earnings per share excluding gain on contribution to GBW and restructuring charges as Net earnings excluding gain on contribution to GBW and restructuring charges before interest and debt issuance costs (net of tax) on convertible notes divided by Weighted average diluted common shares outstanding. Net earnings excluding gain on contribution to GBW and restructuring charges, Adjusted EBITDA, and Diluted earnings per share excluding gain on contribution to GBW and restructuring charges are performance measurement tools used by Greenbrier. You should not consider Net earnings excluding gain on contribution to GBW and restructuring charges, Adjusted EBITDA, and Diluted earnings per share excluding gain on contribution to GBW and restructuring charges in isolation or as a substitute for other financial statement data determined in accordance with GAAP. In addition, because Adjusted EBITDA and Diluted earnings per share excluding gain on contribution to GBW and restructuring charges are not measures of financial performance under GAAP and are susceptible to varying calculations, the Adjusted EBITDA and Diluted earnings per share excluding gain on contribution to GBW and restructuring charges measures presented may differ from and may not be comparable to similarly titled measures used by other companies.
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| Greenbrier Reports Record Results for Fourth Quarter…(Cont.) | Page 8 |
THE GREENBRIER COMPANIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
| August 31, 2014 | May 31, 2014 | February 28, 2014 | November 30, 2013 | August 31, 2013 | ||||||||||||||||
Assets | ||||||||||||||||||||
Cash and cash equivalents | $ | 184,916 | $ | 198,492 | $ | 143,929 | $ | 81,226 | $ | 97,435 | ||||||||||
Restricted cash | 20,140 | 9,468 | 8,964 | 8,975 | 8,807 | |||||||||||||||
Accounts receivable, net | 199,679 | 181,850 | 148,810 | 174,745 | 154,848 | |||||||||||||||
Inventories | 305,656 | 337,197 | 306,394 | 328,235 | 316,783 | |||||||||||||||
Leased railcars for syndication | 125,850 | 96,332 | 84,657 | 61,282 | 68,480 | |||||||||||||||
Equipment on operating leases, net | 258,848 | 274,863 | 282,328 | 293,291 | 305,468 | |||||||||||||||
Property, plant and equipment, net | 243,698 | 215,942 | 204,804 | 201,353 | 201,533 | |||||||||||||||
Investment in unconsolidated affiliates | 69,359 | 12,129 | 11,753 | 11,985 | 10,739 | |||||||||||||||
Goodwill | 43,265 | 57,416 | 57,416 | 57,416 | 57,416 | |||||||||||||||
Intangibles and other assets, net | 65,757 | 66,883 | 65,420 | 64,070 | 68,232 | |||||||||||||||
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| $ | 1,517,168 | $ | 1,450,572 | $ | 1,314,475 | $ | 1,282,578 | $ | 1,289,741 | |||||||||||
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Liabilities and Equity | ||||||||||||||||||||
Revolving notes | $ | 13,081 | $ | 18,082 | $ | 26,738 | $ | 38,805 | $ | 48,209 | ||||||||||
Accounts payable and accrued liabilities | 383,289 | 356,541 | 319,611 | 293,041 | 315,938 | |||||||||||||||
Deferred income taxes | 81,383 | 79,526 | 84,848 | 86,501 | 86,040 | |||||||||||||||
Deferred revenue | 20,603 | 21,153 | 14,272 | 8,706 | 8,838 | |||||||||||||||
Notes payable | 445,091 | 447,068 | 371,427 | 372,666 | 373,889 | |||||||||||||||
Total equity - Greenbrier | 511,390 | 476,145 | 456,569 | 447,599 | 428,202 | |||||||||||||||
Noncontrolling interest | 62,331 | 52,057 | 41,010 | 35,260 | 28,625 | |||||||||||||||
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Total equity | 573,721 | 528,202 | 497,579 | 482,859 | 456,827 | |||||||||||||||
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| $ | 1,517,168 | $ | 1,450,572 | $ | 1,314,475 | $ | 1,282,578 | $ | 1,289,741 | |||||||||||
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| Greenbrier Reports Record Results for Fourth Quarter…(Cont.) | Page 9 |
THE GREENBRIER COMPANIES, INC.
CONSOLIDATED STATEMENTSOF OPERATIONS
(In thousands, except per share amounts)
| Years ending August 31, | ||||||||||||
| 2014 | 2013 | 2012 | ||||||||||
Revenue | ||||||||||||
Manufacturing | $ | 1,624,916 | $ | 1,215,734 | $ | 1,253,964 | ||||||
Wheels, Repair & Parts | 495,627 | 469,222 | 481,865 | |||||||||
Leasing & Services | 83,419 | 71,462 | 71,887 | |||||||||
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| 2,203,962 | 1,756,418 | 1,807,716 | ||||||||||
Cost of revenue | ||||||||||||
Manufacturing | 1,374,008 | 1,082,889 | 1,122,384 | |||||||||
Wheels, Repair & Parts | 463,938 | 431,501 | 433,541 | |||||||||
Leasing & Services | 43,796 | 35,655 | 37,371 | |||||||||
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| 1,881,742 | 1,550,045 | 1,593,296 | ||||||||||
Margin | 322,220 | 206,373 | 214,420 | |||||||||
Selling and administrative | 125,270 | 103,175 | 104,596 | |||||||||
Net gain on disposition of equipment | (15,039 | ) | (18,072 | ) | (8,964 | ) | ||||||
Gain on contribution to joint venture | (29,006 | ) | — | — | ||||||||
Goodwill impairment | — | 76,900 | — | |||||||||
Restructuring charges | 1,475 | 2,719 | — | |||||||||
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Earnings from operations | 239,520 | 41,651 | 118,788 | |||||||||
Other costs | ||||||||||||
Interest and foreign exchange | 18,695 | 22,158 | 24,809 | |||||||||
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Earnings before income tax and earnings (loss) from unconsolidated affiliates | 220,825 | 19,493 | 93,979 | |||||||||
Income tax expense | (72,401 | ) | (25,060 | ) | (32,393 | ) | ||||||
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Earnings (loss) before earnings (loss) from unconsolidated affiliates | 148,424 | (5,567 | ) | 61,586 | ||||||||
Earnings (loss) from unconsolidated affiliates | 1,355 | 186 | (416 | ) | ||||||||
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Net earnings (loss) | 149,779 | (5,381 | ) | 61,170 | ||||||||
Net earnings attributable to noncontrolling interest | (37,860 | ) | (5,667 | ) | (2,462 | ) | ||||||
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Net earnings (loss) attributable to Greenbrier | $ | 111,919 | $ | (11,048 | ) | $ | 58,708 | |||||
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Basic earnings (loss) per common share: | $ | 3.97 | $ | (0.41 | ) | $ | 2.21 | |||||
Diluted earnings (loss) per common share: | $ | 3.44 | $ | (0.41 | ) | $ | 1.91 | |||||
Weighted average common shares: | ||||||||||||
Basic | 28,164 | 26,678 | 26,572 | |||||||||
Diluted | 34,209 | 26,678 | 33,718 | |||||||||
Dividends declared per common share | $ | 0.15 | $ | — | $ | — | ||||||
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| Greenbrier Reports Record Results for Fourth Quarter…(Cont.) | Page 10 |
THE GREENBRIER COMPANIES, INC.
CONSOLIDATED STATEMENTSOF CASH FLOWS
(In thousands)
| Years Ended August 31, | ||||||||||||
| 2014 | 2013 | 2012 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net earnings (loss) | $ | 149,779 | $ | (5,381 | ) | $ | 61,170 | |||||
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: | ||||||||||||
Deferred income taxes | (4,687 | ) | (9,662 | ) | 11,617 | |||||||
Depreciation and amortization | 40,422 | 41,447 | 42,371 | |||||||||
Net gain on disposition of equipment | (15,039 | ) | (18,072 | ) | (8,964 | ) | ||||||
Accretion of debt discount | — | 2,455 | 3,259 | |||||||||
Stock based compensation expense | 11,285 | 6,302 | 8,757 | |||||||||
Gain on contribution to joint venture | (29,006 | ) | — | — | ||||||||
Goodwill impairment | — | 76,900 | — | |||||||||
Other | 3,350 | (1,055 | ) | 4,905 | ||||||||
Decrease (increase) in assets: | ||||||||||||
Accounts receivable, net | (23,749 | ) | (7,323 | ) | 37,763 | |||||||
Inventories | 9,675 | 19,045 | 3,709 | |||||||||
Leased railcars for syndication | (57,779 | ) | 22,881 | (76,071 | ) | |||||||
Other | (4,069 | ) | 969 | — | ||||||||
Increase (decrease) in liabilities: | ||||||||||||
Accounts payable and accrued liabilities | 63,362 | (15,429 | ) | 16,236 | ||||||||
Deferred revenue | 11,713 | (8,485 | ) | 11,304 | ||||||||
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Net cash provided by operating activities | 135,907 | 104,592 | 116,056 | |||||||||
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Cash flows from investing activities: | ||||||||||||
Proceeds from sales of assets | 54,235 | 75,338 | 33,560 | |||||||||
Capital expenditures | (70,227 | ) | (60,827 | ) | (117,885 | ) | ||||||
Increase in restricted cash | (333 | ) | (2,530 | ) | (4,164 | ) | ||||||
Investment in and advances to unconsolidated affiliates | (13,753 | ) | (2,240 | ) | (506 | ) | ||||||
Other | — | (3,582 | ) | 48 | ||||||||
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Net cash provided by (used in) investing activities | (30,078 | ) | 6,159 | (88,947 | ) | |||||||
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Cash flows from financing activities: | ||||||||||||
Net changes in revolving notes with maturities of 90 days or less | — | (16,396 | ) | (57,302 | ) | |||||||
Proceeds from revolving notes with maturities longer than 90 days | 37,819 | 38,177 | 63,773 | |||||||||
Repayments of revolving notes with maturities longer than 90 days | (72,947 | ) | (34,966 | ) | (33,934 | ) | ||||||
Proceeds from issuance of notes payable | 200,000 | 2,186 | 2,750 | |||||||||
Debt issuance costs | (382 | ) | — | — | ||||||||
Increase in restricted cash | (11,000 | ) | — | |||||||||
Repayments of notes payable | (128,797 | ) | (58,831 | ) | (7,070 | ) | ||||||
Repurchase of stock | (33,583 | ) | — | — | ||||||||
Dividends | (4,123 | ) | — | — | ||||||||
Cash distribution to joint venture partner | (5,076 | ) | — | — | ||||||||
Investment by joint venture partner | 419 | 3,206 | 1,362 | |||||||||
Excess tax benefit from restricted stock awards | 109 | 900 | 1,627 | |||||||||
Other | — | (8 | ) | — | ||||||||
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Net cash used in financing activities | (17,561 | ) | (65,732 | ) | (28,794 | ) | ||||||
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| |||||||
Effect of exchange rate changes | (787 | ) | (1,155 | ) | 5,034 | |||||||
Increase in cash and cash equivalents | 87,481 | 43,864 | 3,349 | |||||||||
Cash and cash equivalents | ||||||||||||
Beginning of period | 97,435 | 53,571 | 50,222 | |||||||||
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End of period | $ | 184,916 | $ | 97,435 | $ | 53,571 | ||||||
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| Greenbrier Reports Record Results for Fourth Quarter…(Cont.) | Page 11 |
THE GREENBRIER COMPANIES, INC.
SUPPLEMENTAL INFORMATION
(In thousands, except per share amounts, unaudited)
Operating Results by Quarter for 2014 are as follows:
| First | Second | Third | Fourth | Total | ||||||||||||||||
Revenue | ||||||||||||||||||||
Manufacturing | $ | 359,473 | $ | 347,755 | $ | 425,583 | $ | 492,105 | $ | 1,624,916 | ||||||||||
Wheels, Repair & Parts | 113,401 | 136,540 | 140,663 | 105,023 | 495,627 | |||||||||||||||
Leasing & Services | 17,481 | 17,921 | 27,039 | 20,978 | 83,419 | |||||||||||||||
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| 490,355 | 502,216 | 593,285 | 618,106 | 2,203,962 | ||||||||||||||||
Cost of revenue | ||||||||||||||||||||
Manufacturing | 311,440 | 306,572 | 351,829 | 404,167 | 1,374,008 | |||||||||||||||
Wheels, Repair & Parts | 107,975 | 127,940 | 129,825 | 98,198 | 463,938 | |||||||||||||||
Leasing & Services | 9,381 | 9,853 | 14,856 | 9,9706 | 43,796 | |||||||||||||||
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| 428,796 | 444,365 | 496,510 | 512,071 | 1,881,742 | ||||||||||||||||
Margin | 61,559 | 57,851 | 96,775 | 106,035 | 322,220 | |||||||||||||||
Selling and administrative expense | 26,109 | 28,125 | 34,800 | 36,236 | 125,270 | |||||||||||||||
Net gain on disposition of equipment | (3,651 | ) | (5,416 | ) | (5,619 | ) | (353 | ) | (15,039 | ) | ||||||||||
Restructuring charges | 879 | 540 | 56 | — | 1,475 | |||||||||||||||
Gain on contribution to joint venture | — | — | — | (29,006 | ) | (29,006 | ) | |||||||||||||
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Earnings from operations | 38,222 | 34,602 | 67,538 | 99,158 | 239,520 | |||||||||||||||
Other costs | ||||||||||||||||||||
Interest and foreign exchange | 4,744 | 4,099 | 5,437 | 4,415 | 18,695 | |||||||||||||||
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Earnings before income tax and earnings (loss) from unconsolidated affiliates | 33,478 | 30,503 | 62,101 | 94,743 | 220,825 | |||||||||||||||
Income tax expense | (10,522 | ) | (9,883 | ) | (16,303 | ) | (35,693 | ) | (72,401 | ) | ||||||||||
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Earnings before earnings (loss) from unconsolidated affiliates | 22,956 | 20,620 | 45,798 | 59,050 | 148,424 | |||||||||||||||
Earnings (loss) from unconsolidated affiliates | 41 | (67 | ) | 298 | 1,083 | 1,355 | ||||||||||||||
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Net earnings | 22,997 | 20,553 | 46,096 | 60,133 | 149,779 | |||||||||||||||
Net earnings attributable to noncontrolling interest | (7,609 | ) | (4,966 | ) | (12,508 | ) | (12,777 | ) | (37,860 | ) | ||||||||||
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Net earnings attributable to Greenbrier | $ | 15,388 | $ | 15,587 | $ | 33,588 | $ | 47,356 | $ | 111,919 | ||||||||||
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Basic earnings per common share(1) | $ | 0.54 | $ | 0.55 | $ | 1.20 | $ | 1.69 | $ | 3.97 | ||||||||||
Diluted earnings per common share(1) | $ | 0.49 | $ | 0.50 | $ | 1.03 | $ | 1.43 | $ | 3.44 | ||||||||||
| (1) | Quarterly amounts do 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 Record Results for Fourth Quarter…(Cont.) | Page 12 |
THE GREENBRIER COMPANIES, INC.
SUPPLEMENTAL INFORMATION
(In thousands, except per share amounts, unaudited)
Operating Results by Quarter for 2013 are as follows:
| First | Second | Third | Fourth | Total | ||||||||||||||||
Revenue | ||||||||||||||||||||
Manufacturing | $ | 285,368 | $ | 294,047 | $ | 284,591 | $ | 351,728 | $ | 1,215,734 | ||||||||||
Wheels, Repair & Parts | 112,100 | 111,952 | 131,167 | 114,003 | 469,222 | |||||||||||||||
Leasing & Services | 17,906 | 17,167 | 17,905 | 18,484 | 71,462 | |||||||||||||||
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| 415,374 | 423,166 | 433,663 | 484,215 | 1,756,418 | ||||||||||||||||
Cost of revenue | ||||||||||||||||||||
Manufacturing | 258,492 | 262,650 | 253,360 | 308,387 | 1,082,889 | |||||||||||||||
Wheels, Repair & Parts | 101,476 | 103,134 | 120,476 | 106,415 | 431,501 | |||||||||||||||
Leasing & Services | 7,627 | 9,107 | 9,808 | 9,113 | 35,655 | |||||||||||||||
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| 367,595 | 374,891 | 383,644 | 423,915 | 1,550,045 | ||||||||||||||||
Margin | 47,779 | 48,275 | 50,019 | 60,300 | 206,373 | |||||||||||||||
Selling and administrative | 26,100 | 24,942 | 25,322 | 26,811 | 103,175 | |||||||||||||||
Net gain on disposition of equipment | (1,408 | ) | (3,076 | ) | (5,131 | ) | (8,457 | ) | (18,072 | ) | ||||||||||
Goodwill impairment | — | — | 76,900 | — | 76,900 | |||||||||||||||
Restructuring charges | — | — | — | 2,719 | 2,719 | |||||||||||||||
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Earnings (loss) from operations | 23,087 | 26,409 | (47,072 | ) | 39,227 | 41,651 | ||||||||||||||
Other costs | ||||||||||||||||||||
Interest and foreign exchange | 5,900 | 6,322 | 5,905 | 4,031 | 22,158 | |||||||||||||||
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Earnings (loss) before income tax and earnings (loss) from unconsolidated affiliates | 17,187 | 20,087 | (52,977 | ) | 35,196 | 19,493 | ||||||||||||||
Income tax expense | (4,586 | ) | (5,590 | ) | (2,729 | ) | (12,155 | ) | (25,060 | ) | ||||||||||
Earnings (loss) from unconsolidated affiliates | (40 | ) | (105 | ) | 82 | 249 | 186 | |||||||||||||
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Net earnings (loss) | 12,561 | 14,392 | (55,624 | ) | 23,290 | (5,381 | ) | |||||||||||||
Net earnings attributable to noncontrolling interest | (2,134 | ) | (553 | ) | (406 | ) | (2,574 | ) | (5,667 | ) | ||||||||||
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Net earnings (loss) attributable to Greenbrier | $ | 10,427 | $ | 13,839 | $ | (56,030 | ) | $ | 20,716 | $ | (11,048 | ) | ||||||||
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Basic earnings (loss) per common share:(1) | $ | 0.38 | $ | 0.51 | $ | (2.10 | ) | $ | 0.74 | $ | (0.41 | ) | ||||||||
Diluted earnings (loss) per common share:(1) | $ | 0.35 | $ | 0.45 | $ | (2.10 | ) | $ | 0.64 | $ | (0.41 | ) | ||||||||
| (1) | Quarterly amounts do not total to the annual amount as each period is calculated discretely. For the first, second and fourth quarters, diluted earnings per common share includes the outstanding warrants 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 Record Results for Fourth Quarter…(Cont.) | Page 13 |
THE GREENBRIER COMPANIES, INC.
SUPPLEMENTAL INFORMATION
(In thousands, unaudited)
Segment Information
Three months ended August 31, 2014:
| Revenue | Earnings (loss) from operations | |||||||||||||||||||||||
| External | Intersegment | Total | External | Intersegment | Total | |||||||||||||||||||
Manufacturing | $ | 492,105 | $ | 790 | $ | 492,895 | $ | 73,013 | $ | 61 | $ | 73,074 | ||||||||||||
Wheels, Repair & Parts | 105,023 | 4,090 | 109,113 | 31,873 | (104 | ) | 31,769 | |||||||||||||||||
Leasing & Services | 20,978 | 8,350 | 29,328 | 8,167 | 8,350 | 16,517 | ||||||||||||||||||
Eliminations | — | (13,230 | ) | (13,230 | ) | — | (8,307 | ) | (8,307 | ) | ||||||||||||||
Corporate | — | — | — | (13,895 | ) | — | (13,895 | ) | ||||||||||||||||
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| $ | 618,106 | $ | — | $ | 618,106 | $ | 99,158 | $ | — | $ | 99,158 | |||||||||||||
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Three months ended May 31, 2014:
| Revenue | Earnings (loss) from operations | |||||||||||||||||||||||
| External | Intersegment | Total | External | Intersegment | Total | |||||||||||||||||||
Manufacturing | $ | 425,583 | $ | — | $ | 425,583 | $ | 61,116 | $ | — | $ | 61,116 | ||||||||||||
Wheels, Repair & Parts | 140,663 | 3,783 | 144,446 | 5,524 | 473 | 5,997 | ||||||||||||||||||
Leasing & Services | 27,039 | 9,334 | 36,373 | 14,582 | 9,334 | 23,916 | ||||||||||||||||||
Eliminations | — | (13,117 | ) | (13,117 | ) | — | (9,807 | ) | (9,807 | ) | ||||||||||||||
Corporate | — | — | — | (13,684 | ) | — | (13,684 | ) | ||||||||||||||||
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| $ | 593,285 | $ | — | $ | 593,285 | $ | 67,538 | $ | — | $ | 67,538 | |||||||||||||
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| Total assets | ||||||||
| August 31, 2014 | May 31, 2014 | |||||||
Manufacturing | $ | 521,711 | $ | 500,434 | ||||
Wheels, Repair & Parts | 298,009 | 316,416 | ||||||
Leasing & Services | 436,075 | 425,751 | ||||||
Unallocated | (261,373 | ) | 207,971 | |||||
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| $ | 1,517,168 | $ | 1,450,572 | |||||
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- More -
| Greenbrier Reports Record Results for Fourth Quarter…(Cont.) | Page 14 |
THE GREENBRIER COMPANIES, INC.
SUPPLEMENTAL INFORMATION
(In thousands, excluding backlog and delivery units, unaudited)
Reconciliation of Net earnings to Adjusted EBITDA(1)
| Three Months Ended | ||||||||
| August 31, 2014 | May 31, 2014 | |||||||
Net earnings | $ | 60,133 | $ | 46,096 | ||||
Interest and foreign exchange | 4,415 | 5,437 | ||||||
Income tax expense | 35,693 | 16,303 | ||||||
Depreciation and amortization | 9,598 | 10,071 | ||||||
Restructuring charges | — | 56 | ||||||
Gain on contribution to GBW | (29,006 | ) | — | |||||
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| |||||
Adjusted EBITDA | $ | 80,833 | $ | 77,963 | ||||
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| |||||
| (1) | 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, restructuring charges, gain on contribution to GBW, 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, the Adjusted EBITDA measure presented may differ from and may not be comparable to similarly titled measures used by other companies. |
| Three Months Ended August 31, 2014 | Year Ended August 31, 2014 | |||||||
Backlog Activity (units) | ||||||||
Beginning backlog | 26,400 | 14,400 | ||||||
Orders received | 10,400 | 34,300 | ||||||
Production held as Leased railcars for syndication | (1,600 | ) | (4,100 | ) | ||||
Production sold directly to third parties | (3,700 | ) | (13,100 | ) | ||||
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Ending backlog | 31,500 | 31,500 | ||||||
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Delivery Information (units) | ||||||||
Production sold directly to third parties | 3,700 | 13,100 | ||||||
Sales of Leased railcars for syndication | 1,100 | 3,100 | ||||||
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Total deliveries | 4,800 | 16,200 | ||||||
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- More -
| Greenbrier Reports Record Results for Fourth Quarter…(Cont.) | Page 15 |
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 and Diluted earnings per share excluding gain on contribution to GBW and restructuring charges are reconciled as follows:
| Three Months Ended | ||||||||
| August 31, 2014 | May 31, 2014 | |||||||
Weighted average basic common shares outstanding(1) | 27,988 | 27,956 | ||||||
Dilutive effect of convertible notes(2) | 6,049 | 6,045 | ||||||
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| |||||
Weighted average diluted common shares outstanding | 34,037 | 34,001 | ||||||
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| |||||
| (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 included in the Weighted average diluted common shares outstanding as the average stock price during the period exceeded the conversion price of $48.05; however, the dilutive impact was inconsequential for the three months ended May 31, 2014. |
Diluted earnings per share was calculated using the more dilutive of two approaches. The first approach includes the dilutive effect of outstanding warrants and shares underlying the 2026 Convertible notes in the share count using the treasury stock method. 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.
Reconciliation of Net earnings attributable to Greenbrier to Net earnings excluding gain on contribution to GBW and restructuring charges
| Three Months Ended | ||||||||
| August 31, 2014 | May 31, 2014 | |||||||
Net earnings attributable to Greenbrier | $ | 47,356 | $ | 33,588 | ||||
Restructuring charges (after-tax) | — | 41 | ||||||
Gain on contribution to GBW (after-tax) | (13,633 | ) | — | |||||
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|
|
| |||||
Net earnings excluding gain on contribution to GBW and restructuring charges | 33,723 | 33,629 | ||||||
Add back: | ||||||||
Interest and debt issuance costs on the 2018 Convertible notes, net of tax | 1,416 | 1,416 | ||||||
|
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| |||||
Earnings before interest and debt issuance costs on convertible notes | $ | 35,139 | $ | 35,060 | ||||
|
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| |||||
Weighted average diluted common shares outstanding | 34,037 | 34,001 | ||||||
Diluted earnings per share excluding gain on contribution to GBW and restructuring charges | $ | 1.03 | $ | 1.03 | ||||
# # #