GBX Greenbrier Companies Inc

 

 

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) April 7, 2015

 

 

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 April 7, 2015, The Greenbrier Companies issued a press release reporting the Company’s results of operations for the three and six months ended February 28, 2015. A copy of such release is attached as Exhibit 99.1.

 

Item 7.01

Regulation FD Disclosure

In the press release issued on April 7, 2015 and attached hereto as Exhibit 99.1, the Company also provided updated guidance for fiscal 2015.

 

Item 9.01

Financial Statements and Exhibits

(c) Exhibits:

 

99.1

Press Release dated April 7, 2015 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: April 7, 2015				By:		/s/ Mark J. Rittenbaum
						Mark J. Rittenbaum
						Executive Vice President and
						Chief Financial Officer
						(Principal Financial Officer)

Exhibit 99.1

 

News Release

 

One Centerpointe Drive Suite 200 Lake Oswego, Oregon 97035 503-684-7000		www.gbrx.com

 

For release: April 7, 2015, 6:00 a.m. EDT		Contact:		Mark Rittenbaum
				Lorie Tekorius
				503-684-7000

Greenbrier Reports Record Second Quarter Results with Continued Margin Expansion

~ Posts EPS of $1.57 ~

~ Record backlog of 46,000 units marks sixth consecutive quarter of growth ~

~ Updates FY 2015 EPS guidance to $5.65 to $5.95 from $5.20 to $5.50 ~

Lake Oswego, Oregon, April 7, 2015 – The Greenbrier Companies, Inc. (NYSE: GBX) today reported financial results for its second fiscal quarter ended February 28, 2015.

Second Quarter Highlights

 

•

Net earnings attributable to Greenbrier for the quarter were $50.4 million, or $1.57 per diluted share, on revenue of $630 million.

 

•

Adjusted EBITDA for the quarter was $102.7 million, or 16.3% of revenue.

 

•

New railcar backlog as of February 28, 2015 was 46,000 units with an estimated value of $4.78 billion (average unit sale price of $104,000), compared to 41,200 units with an estimated value of $4.20 billion (average unit sale price of $102,000) as of November 30, 2014.

 

•

Diversified orders for 10,100 new railcars valued at $1.09 billion were received during the quarter.

 

•

New railcar deliveries totaled 5,200 units for the quarter, compared to 4,000 units for the quarter ended November 30, 2014.

 

•

Marine backlog as of February 28, 2015 was approximately $80 million.

 

•

Board declares a quarterly dividend of $0.15 per share payable on May 6, 2015 to shareholders of record as of April 15, 2015.

 

•

Repurchased 483,983 shares of common stock at a cost of $23.8 million during the quarter. Cumulative repurchases from October 31, 2013 through February 28, 2015 aggregate 1,627,224 shares at a cost of $81.4 million, or an average price of $49.99 per share. We have $43.6 million available under our share repurchase program.

Progress on Longer Term Financial Goals

 

•

Aggregate gross margin expanded to 19.9%, compared to 17.8% in the prior quarter, nearly reaching the goal of at least 20% gross margin by the second half of fiscal 2016. As a reminder, while gross margins continued to increase, management does not expect this track to be linear.

 

•

We remain on track to reach the goal of at least 25% ROIC by the second half of fiscal 2016. Annualized ROIC of 19.6% reflects record operating results tempered by working capital needs associated with higher production and syndication volumes, and planned capital expenditure programs.

- More -

---

Greenbrier Reports Record Second Quarter. . . (Cont.)		Page 2

William A. Furman, Chairman and CEO, said, “Our record results this quarter, including margin expansion and earnings growth, reflect the soundness of our diversified and integrated business model, improved business execution and greater scale. Our aggregate gross margin in the second quarter grew to 19.9%, nearly twice last year’s level; at the same time we continue to execute on ramping up production on new manufacturing lines.”

“Our diverse new railcar backlog of 46,000 units represents the sixth consecutive quarter where the quantity and value of our backlog has increased. It is now more than triple the size of just one year ago, with production on certain production lines stretching into 2019. Nearly 80% of our year-to-date orders for 24,200 railcars are non-energy related, including orders for double stack intermodal cars, grain hopper cars, automotive carrying cars, non-energy related tank cars, boxcars, and mill gondola cars for scrap steel. These orders, along with others in our backlog, include multi-year orders for various car types, a positive indication that our customers believe, as do we, that end-user demand for new railcars will remain solid for the foreseeable future. The regulatory picture for tank cars transporting hazardous materials should be clarified no later than May. We expect Greenbrier’s Tank Car of the Future will be the new standard, and that additional new car and retrofit orders will occur regardless of oil prices,” Furman continued.

Furman concluded, “Our strong order book, which includes several core leasing company partners, provides us good visibility through fiscal 2016 and beyond. If the strong new railcar cycle continues to play out over the next 3-4 years, as many forecast it will, then Greenbrier should be well positioned to generate significant free cash flow. We will continue to take a balanced approach to reinvesting in high rate of return projects in our core business, seeking acquisitions in our core competencies, and returning capital to shareholders.”

Transaction Update

We anticipate our 20% equity investment in Brazil’s Amsted-Maxion Hortolândia, the leading railcar manufacturer in South America, will close during the third quarter.

Business Outlook

Based on current business trends and industry forecasts, Greenbrier has raised its guidance to:

 

•

Deliveries in FY15 of about 21,500 units

 

•

Revenue of approximately $2.6 to $2.7 billion, which excludes revenue from GBW as it is accounted for under the equity method of accounting

 

•

Diluted EPS in the range of $5.65 to $5.95

 

•

Adjusted EBITDA in the range of $420 to $435 million

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 continue to increase overall, management does not believe this track will be linear.

As noted in the “Safe Harbor” statement, there are risks to achieving this guidance. Certain orders and backlog in this release are subject to customary documentation and completion of terms.

 

- More -

---

Greenbrier Reports Record Second Quarter. . . (Cont.)		Page 3

Financial Summary

 

		Q2 FY15				Q1 FY15				Sequential Comparison – Main Drivers
Revenue		$	630.1M			$	495.1M			Up 27.3% primarily due to increased deliveries
Gross margin			19.9	%			17.8	%		Up 210 bps due to higher deliveries, favorable product mix and pricing, and improved production efficiencies
Selling and administrative expense		$	32.9M			$	33.7M			Down 2.4% primarily due to higher professional fees in Q1
Gain on disposition of equipment		$	0.1M			$	0.1M			Timing of sales fluctuates and is opportunistic, typically may range from $1.0M to $3.0M per quarter
Adjusted EBITDA		$	102.7M			$	67.2M			Up 52.8% driven by higher deliveries and margins
Effective tax rate			32.4	%			31.3	%		Reflects geographic mix of earnings
Net earnings		$	50.4M			$	32.8M
Diluted EPS		$	1.57			$	1.01

Segment Summary

 

		Q2 FY15				Q1 FY15				Sequential Comparison – Main Drivers
Manufacturing
Revenue		$	505.2M			$	379.9M			Up 33.0% primarily due to higher deliveries
Gross margin			20.2	%			16.8	%		Up 340 bps due to favorable product mix and pricing, improved efficiencies and weakening Peso
Operating margin (1)			18.0	%			13.7	%
Deliveries			5,200				4,000
Wheels & Parts
Revenue		$	102.6M			$	86.6M			Up 18.5% primarily attributable to higher volume and product mix
Gross margin			9.6	%			11.3	%		Down 170 bps primarily due to reduced price of scrap steel
Operating margin (1)			7.8	%			9.2	%
Leasing & Services
Revenue		$	22.3M			$	28.5M			Q1 includes syndication of third party produced railcars
Gross margin			60.3	%			50.6	%		Up 970 bps due to lower margin syndication of third party produced railcars in Q1, and higher margin interim rents on leased railcars for syndication in Q2
Operating margin (1) (2)			44.1	%			38.8	%
Lease fleet utilization			99.5	%			98.1	%

 

(1)	See supplemental segment information on page 11 for additional information.

(2)	Includes Net gain on disposition of equipment, which is excluded from gross margin.

Conference Call

Greenbrier will host a teleconference to discuss its second quarter 2015 results. In conjunction with this news release, Greenbrier has posted a supplemental earnings presentation to our website. Teleconference details are as follows:

 

•

April 7, 2015

 

•

8:00 a.m. Pacific Daylight Time

 

•

Phone: 1-630-395-0143, Password: “Greenbrier”

 

- More -

---

Greenbrier Reports Record Second Quarter. . . (Cont.)		Page 4

•

Real-time Audio Access: (“Newsroom” at http://www.gbrx.com)

Please access the site 10 minutes prior to the start time.

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 39 locations across North America, including 14 tank car repair and maintenance facilities certified by the 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 8,300 railcars, and performs management services for approximately 241,000 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

 

- More -

---

Greenbrier Reports Record Second Quarter. . . (Cont.)		Page 5

 

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.

Adjusted EBITDA is not a financial measure under generally accepted accounting principles (GAAP). We define Adjusted EBITDA as Net earnings before Interest and foreign exchange, Income tax expense, Depreciation and amortization. Adjusted EBITDA is a performance measurement tool commonly used by rail supply companies and Greenbrier. You should not consider Adjusted EBITDA in isolation or as a substitute for other financial statement data determined in accordance with GAAP. In addition, because Adjusted EBITDA is not a measure of financial performance under GAAP and is susceptible to varying calculations, this measure presented may differ from and may not be comparable to similarly titled measures used by other companies.

Annualized ROIC is calculated by taking year to date Earnings from operations, less cash paid for income taxes, net, which is then annualized and divided by the average balance of the sum of the Revolving notes, plus Notes payable, plus Total equity, less cash in excess of $40 million. The average is calculated based on the quarterly ending balances.

 

- More -

---

 

Greenbrier Reports Record Second Quarter. . . (Cont.)		Page 6

 

THE GREENBRIER COMPANIES, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, unaudited)

 

		February 28, 2015				November 30, 2014				August 31, 2014				May 31, 2014				February 28, 2014
Assets
Cash and cash equivalents		$	145,512			$	118,958			$	184,916			$	198,492			$	143,929
Restricted cash			8,722				9,170				20,140				9,468				8,964
Accounts receivable, net			207,488				191,532				199,679				181,850				148,810
Inventories			418,590				372,039				305,656				337,197				306,394
Leased railcars for syndication			198,010				177,221				125,850				96,332				84,657
Equipment on operating leases, net			261,234				264,615				258,848				274,863				282,328
Property, plant and equipment, net			271,977				258,303				243,698				215,942				204,804
Investment in unconsolidated affiliates			71,225				72,342				69,359				12,129				11,753
Goodwill			43,265				43,265				43,265				57,416				57,416
Intangibles and other assets, net			64,386				61,937				65,757				66,883				65,420
		$	1,690,409			$	1,569,382			$	1,517,168			$	1,450,572			$	1,314,475
Liabilities and Equity
Revolving notes		$	90,563			$	46,527			$	13,081			$	18,082			$	26,738
Accounts payable and accrued liabilities			417,844				374,509				383,289				356,541				319,611
Deferred income taxes			77,632				81,808				81,383				79,526				84,848
Deferred revenue			28,287				27,067				20,603				21,153				14,272
Notes payable			441,326				443,303				445,091				447,068				371,427
Total equity - Greenbrier			541,491				519,884				511,390				476,145				456,569
Noncontrolling interest			93,266				76,284				62,331				52,057				41,010
Total equity			634,757				596,168				573,721				528,202				497,579
		$	1,690,409			$	1,569,382			$	1,517,168			$	1,450,572			$	1,314,475

 

-More-

---

Greenbrier Reports Record Second Quarter. . . (Cont.)		Page 7

 

THE GREENBRIER COMPANIES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts, unaudited)

 

		Three Months Ended February 28,								Six Months Ended February 28,
		2015				2014				2015				2014
Revenue
Manufacturing		$	505,241			$	347,755			$	885,190			$	707,228
Wheels & Parts			102,640				136,540				189,264				249,941
Leasing & Services			22,268				17,921				50,753				35,402
			630,149				502,216				1,125,207				992,571
Cost of revenue
Manufacturing			403,227				306,572				719,264				618,012
Wheels & Parts			92,768				127,940				169,640				235,915
Leasing & Services			8,844				9,853				22,925				19,234
			504,839				444,365				911,829				873,161
Margin			125,310				57,851				213,378				119,410
Selling and administrative expense			32,899				28,125				66,628				54,234
Net gain on disposition of equipment			(121	)			(5,416	)			(204	)			(9,067	)
Restructuring charges			—				540				—				1,419
Earnings from operations			92,532				34,602				146,954				72,824
Other costs
Interest and foreign exchange			1,929				4,099				5,070				8,843
Earnings before income tax and earnings (loss) from unconsolidated affiliates			90,603				30,503				141,884				63,981
Income tax expense			(29,372	)			(9,883	)			(45,426	)			(20,405	)
Earnings before earnings (loss) from unconsolidated affiliates			61,231				20,620				96,458				43,576
Earnings (loss) from unconsolidated affiliates			(185	)			(67	)			570				(26	)
Net earnings			61,046				20,553				97,028				43,550
Net earnings attributable to noncontrolling interest			(10,695	)			(4,966	)			(13,891	)			(12,575	)
Net earnings attributable to Greenbrier		$	50,351			$	15,587			$	83,137			$	30,975
Basic earnings per common share:		$	1.86			$	0.55			$	3.04			$	1.09
Diluted earnings per common share:		$	1.57			$	0.50			$	2.57			$	0.98
Weighted average common shares:
Basic			27,028				28,300				27,348				28,359
Diluted			33,073				34,345				33,395				34,404
Dividends declared per common share:		$	0.15			$	—			$	0.30			$	—

 

-More-

---

Greenbrier Reports Record Second Quarter. . . (Cont.)		Page 8

 

THE GREENBRIER COMPANIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)

 

		Six Months Ended February 28,
		2015				2014
Cash flows from operating activities:
Net earnings		$	97,028			$	43,550
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Deferred income taxes			(3,245	)			(1,448	)
Depreciation and amortization			22,398				20,753
Net gain on disposition of equipment			(204	)			(9,067	)
Stock based compensation expense			7,193				2,862
Noncontrolling interest adjustments			21,824				2,439
Other			549				329
Decrease (increase) in assets:
Accounts receivable, net			(6,256	)			6,900
Inventories			(116,432	)			9,147
Leased railcars for syndication			(75,564	)			(13,603	)
Other			(355	)			68
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities			37,521				(487	)
Deferred revenue			7,750				5,377
Net cash provided by (used in) operating activities			(7,793	)			66,820
Cash flows from investing activities:
Proceeds from sales of assets			3,019				28,671
Capital expenditures			(53,856	)			(16,529	)
Investment in and advances to unconsolidated affiliates			(5,715	)			(1,253	)
Decrease (increase) in restricted cash			418				(157	)
Other			467				—
Net cash provided by (used in) investing activities			(55,667	)			10,732
Cash flows from financing activities:
Net change in revolving notes with maturities of 90 days or less			53,000				—
Proceeds from revolving notes with maturities longer than 90 days			42,563				31,738
Repayments of revolving notes with maturities longer than 90 days			(18,081	)			(53,209	)
Repayments of notes payable			(3,740	)			(2,462	)
Decrease in restricted cash			11,000				—
Repurchase of stock			(46,946	)			(8,889	)
Dividends			(8,016	)			—
Investment by joint venture partner			—				419
Cash distribution to joint venture partner			(4,422	)			(1,604	)
Excess tax benefit from restricted stock awards			3,858				110
Net cash provided by (used in) financing activities			29,216				(33,897	)
Effect of exchange rate changes			(5,160	)			2,839
Increase (decrease) in cash and cash equivalents			(39,404	)			46,494
Cash and cash equivalents
Beginning of period			184,916				97,435
End of period		$	145,512			$	143,929

 

-More-

---

Greenbrier Reports Record Second Quarter. . . (Cont.)		Page 9

 

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

(In thousands, except per share amounts, unaudited)

Operating Results by Quarter for 2015 are as follows:

 

		First				Second				Total
Revenue
Manufacturing		$	379,949			$	505,241			$	885,190
Wheels & Parts			86,624				102,640				189,264
Leasing & Services			28,485				22,268				50,753
			495,058				630,149				1,125,207
Cost of revenue
Manufacturing			316,037				403,227				719,264
Wheels & Parts			76,872				92,768				169,640
Leasing & Services			14,081				8,844				22,925
			406,990				504,839				911,829
Margin			88,068				125,310				213,378
Selling and administrative expense			33,729				32,899				66,628
Net gain on disposition of equipment			(83	)			(121	)			(204	)
Earnings from operations			54,422				92,532				146,954
Other costs
Interest and foreign exchange			3,141				1,929				5,070
Earnings before income tax and earnings (loss) from unconsolidated affiliates			51,281				90,603				141,884
Income tax expense			(16,054	)			(29,372	)			(45,426	)
Earnings before earnings (loss) from unconsolidated affiliates			35,227				61,231				96,458
Earnings (loss) from unconsolidated affiliates			755				(185	)			570
Net earnings			35,982				61,046				97,028
Net earnings attributable to noncontrolling interest			(3,196	)			(10,695	)			(13,891	)
Net earnings attributable to Greenbrier		$	32,786			$	50,351			$	83,137
Basic earnings per common share (1)		$	1.19			$	1.86			$	3.04
Diluted earnings per common share (1)		$	1.01			$	1.57			$	2.57

 

(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 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 Record Second Quarter. . . (Cont.)		Page 10

 

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 & Parts (1)			113,401				136,540				140,663				105,023				495,627
Leasing & Services			17,481				17,921				27,039				20,978				83,419
			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 & Parts (1)			107,975				127,940				129,825				98,198				463,938
Leasing & Services			9,381				9,853				14,856				9,706				43,796
			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	)
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
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	)
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
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	)
Net earnings attributable to Greenbrier		$	15,388			$	15,587			$	33,588			$	47,356			$	111,919
Basic earnings per common share (2)		$	0.54			$	0.55			$	1.20			$	1.69			$	3.97
Diluted earnings per common share (2)		$	0.49			$	0.50			$	1.03			$	1.43			$	3.44

 

(1)

Wheels & Parts (previously known as Wheels, Repair & Parts) included our repair operations through July 18, 2014, at which time we and Watco, our joint venture partner, contributed our respective repair operations to GBW, an unconsolidated 50/50 joint venture. After July 18, 2014, the results of GBW are included in Earnings (loss) from unconsolidated affiliates as we account for our interest in GBW under the equity method of accounting.

(2)

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 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 Record Second Quarter. . . (Cont.)		Page 11

 

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

(In thousands, unaudited)

Segment Information

Three months ended February 28, 2015:

 

		Revenue												Earnings (loss) from operations
		External				Intersegment				Total				External				Intersegment				Total
Manufacturing		$	505,241			$	81			$	505,322			$	90,876			$	9			$	90,885
Wheels & Parts			102,640				5,934				108,574				7,976				653				8,629
Leasing & Services			22,268				18,627				40,895				9,811				18,627				28,438
Eliminations			—				(24,642	)			(24,642	)			—				(19,289	)			(19,289	)
Corporate			—				—				—				(16,131	)			—				(16,131	)
		$	630,149			$	—			$	630,149			$	92,532			$	—			$	92,532

Three months ended November 30, 2014:

 

		Revenue												Earnings (loss) from operations
		External				Intersegment				Total				External				Intersegment				Total
Manufacturing		$	379,949			$	7,420			$	387,369			$	52,051			$	786			$	52,837
Wheels & Parts			86,624				6,911				93,535				7,932				784				8,716
Leasing & Services			28,485				13,184				41,669				11,042				13,184				24,226
Eliminations			—				(27,515	)			(27,515	)			—				(14,754	)			(14,754	)
Corporate			—				—				—				(16,603	)			—				(16,603	)
		$	495,058			$	—			$	495,058			$	54,422			$	—			$	54,422

 

		Total assets
		February 28, 2015				November 30 2014
Manufacturing		$	663,567			$	585,240
Wheels & Parts			291,358				301,300
Leasing & Services			516,835				493,048
Unallocated			218,649				189,794
		$	1,690,409			$	1,569,382

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
		February 28, 2015				November 30, 2014
Revenue		$	83,300			$	82,500
Earnings (loss) from operations		$	(2,000	)		$	300
Total assets		$	217,400			$	231,300

 

-More-

---

Greenbrier Reports Record Second Quarter. . . (Cont.)		Page 12

 

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

(In thousands, excluding backlog and delivery units, unaudited)

Reconciliation of Net earnings to Adjusted EBITDA

 

		Three Months Ended
		February 28, 2015				November 30, 2014
Net earnings		$	61,046			$	35,982
Interest and foreign exchange			1,929				3,141
Income tax expense			29,372				16,054
Depreciation and amortization			10,348				12,050
Adjusted EBITDA		$	102,695			$	67,227

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, the Adjusted EBITDA measure presented may differ from and may not be comparable to similarly titled measures used by other companies.

 

		Three Months Ended February 28, 2015
Backlog Activity (units)
Beginning backlog			41,200
Orders received			10,100
Production held as Leased railcars for syndication			(1,800	)
Production sold directly to third parties			(3,500	)
Ending backlog			46,000
Delivery Information (units)
Production sold directly to third parties			3,500
Sales of Leased railcars for syndication			1,700
Total deliveries			5,200

 

-More-

---

Greenbrier Reports Record Second Quarter. . . (Cont.)		Page 13

 

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

(In thousands, except per share amounts, unaudited)

Reconciliation of common shares outstanding and diluted earnings per share

The shares used in the computation of the Company’s basic and diluted earnings per common share are reconciled as follows:

 

		Three Months Ended
		February 28, 2015				November 30, 2014
Weighted average basic common shares outstanding (1)			27,028				27,665
Dilutive effect of convertible notes (2)			6,045				6,048
Weighted average diluted common shares outstanding			33,073				33,713

 

(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.

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.

 

		Three Months Ended
		February 28, 2015				November 30, 2014
Net earnings attributable to Greenbrier		$	50,351			$	32,786
Add back:
Interest and debt issuance costs on the 2018 Convertible notes, net of tax			1,416				1,416
Earnings before interest and debt issuance costs on convertible notes		$	51,767			$	34,202
Weighted average diluted common shares outstanding			33,073				33,713
Diluted earnings per share		$	1.57			$	1.01

 

# # #