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Last updated on April 24, 2014 at 12:23 EDT

Greenbrier Reports Fiscal Second Quarter EPS of $0.45 and Announces Strategies to Enhance Margins and Improve Capital Efficiency

April 4, 2013

~ Targeting minimum 200 basis points of margin enhancement and $100 million of capital efficiency improvements by end of FY 2014

LAKE OSWEGO, Ore., April 4, 2013 /PRNewswire/ — The Greenbrier Companies (NYSE: GBX) today reported results for its second quarter ended February 28, 2013.

Second Quarter Highlights

  • Net earnings for the second quarter were $13.8 million, or $.45 per diluted share, on revenue of $423.2 million.
  • Adjusted EBITDA for the quarter was $36.2 million, or 8.6% of revenue.
  • Net debt was reduced by $55 million during the quarter, driven by strong quarterly earnings and working capital improvements.
  • New railcar deliveries were 2,700 units in the second quarter.
  • Since September 1, 2012, the beginning of the Company’s fiscal year, Greenbrier has received orders for 9,600 railcar units valued at over $1 billion, of which 1,400 units were received during the first quarter, 4,500 units during the second quarter, and 3,700 units subsequent to the February 28, 2013 quarter end.
  • New railcar manufacturing backlog as of February 28, 2013 was 11,700 units with an estimated value of $1.30 billion (average unit sale price of $111,000), compared to 9,700 units with an estimated value of $1.11 billion (average unit sale price of $114,000) as of November 30, 2012.
  • Marine backlog totaled $9 million as of February 28, 2013. Additionally, we are party to a letter of intent for 15 barges valued at $60 million, subject to significant permitting and other conditions.

Strategic Initiatives

  • Company unveils strategic plans to increase gross margins by at least 200 basis points and reduce capital employed by $100 million by the end of fiscal 2014.
  • During the quarter, the Company reached agreement to sell substantially all the assets of its non-core roller bearings parts operation and acquired an additional repair facility in Poland.

William A. Furman, president and chief executive officer said, “Our business momentum continues to improve, validating the strength of our integrated business model. Our strategy is to diversify our product offerings, shift production to our lower cost manufacturing footprint in Mexico, and increase throughput in our lease syndication and management services businesses. Since September 1, 2012, we have received diverse orders for 9,600 railcars in North America and Europe valued at over $1 billion.”

Furman continued, “Our integrated model differentiates Greenbrier from industry peers. However, we can extract more value out of our model and further enhance overall performance in each of our operating segments through a series of initiatives designed to improve capital efficiency and enhance margins. We intend to liberate $100 million of capital by no later than the end of our fiscal 2014 by selling non-core or underperforming operations, particularly in our underperforming Wheel Services, Refurbishment & Parts segment, reducing working capital and refining our leasing model to take more of our assets and debt off the balance sheet in a tax efficient manner. We intend to redeploy this $100 million of liberated capital to invest in new opportunities, pay down debt, or return to shareholders. The announced sale of the assets of our roller bearings parts operation is the first of many steps in this regard.”

“We have set a target to grow gross margins by at least 200 bps to 13.5% of revenue by the fourth quarter of our fiscal 2014. This improvement equates to about $40 million of incremental EBITDA on an annualized forward run rate. Our capital efficiency initiatives, coupled with specifically identified cost reduction and efficiency improvement initiatives, and currently favorable industry and backlog tailwinds are expected to drive this improvement. Assuming economic and industry fundamentals continue to be favorable, we believe these actions will comprise the first step of a multi-phase campaign to improve margins and capital efficiency and enhance Greenbrier’s return on invested capital and shareholder value,” Furman concluded.

Mark Rittenbaum, chief financial officer, also noted, “In order to provide more granularity on the performance of each of our segments, we expect to begin providing operating margin by business segment starting in the first fiscal quarter of 2014. We will also periodically report the progress made on our initiatives starting after our third fiscal quarter of 2013.”

Financial Summary

                    Q2 FY13          Q1 FY13          Sequential Comparison - Main Drivers
                    -------          -------          ------------------------------------

    Revenue                 $423.2M          $415.4M   Up 1.9% due principally to increased
                                                       Marine activity and higher average
                                                       sales price on new railcar
                                                       deliveries
    -------                 -------          -------  -------------------------------------

    Gross                      11.4%            11.5%  Down 10 bps due to lower margins in
     margin                                            Wheel Services, Refurbishment &
                                                       Parts and Leasing & Services
                                                       segments, partially offset by higher
                                                       margins in Manufacturing
    -------                    ----             ----  ------------------------------------

    Selling and              $24.9M           $26.1M   Down due to lower employee related
                                                       costs

     Administrative
     expense
     --------------

    Gain on                   $3.1M            $1.4M   Timing of sales fluctuates and is
     disposition                                       opportunistic; typically ranges from
                                                       $1.0M -$4.0M per quarter

    of
     equipment
    ----------

    Adjusted                 $36.2M           $31.8M   Up 13.8% due to higher gains on
     EBITDA                                            equipment dispositions, and lower
                                                       S&A expense
    --------                 ------           ------  ----------------------------------

    Effective                  27.8%            26.7%  32% estimated annualized rate;
     tax rate                                          difference is due to certain
                                                       discrete tax items
    ---------                  ----             ----  -------------------------------

    Net                      $13.8M           $10.4M   Up due to higher EBITDA and lower
     earnings                                          earnings attributable to our GIMSA
                                                       JV partner's Noncontrolling interest
    ---------                ------           ------  -------------------------------------

    Diluted EPS
     - GAAP                   $0.45            $0.35  "If converted" calculation
    -----------               -----            -----  --------------------------

    Economic                  $0.49            $0.37   Excludes "if converted" impact of
     EPS                                               out-of-the-money bonds due 2018
    --------                  -----            -----  ----------------------------------

Segment Summary

                                 Q2 FY13           Q1 FY13           Sequential Comparison - Main
                                                                     Drivers
                                 -------           -------          -----------------------------

    Manufacturing
    -------------

      Revenue                             $294.0M          $285.4M   Up 3.0% due to increased Marine
                                                                     activity and higher average sales
                                                                     price
      -------                             -------          -------  ----------------------------------

       Gross                                 10.7%             9.4%  Up 130 bps due to improved product
       margin                                                        mix and operating efficiencies
      ------                                 ----              ---  ----------------------------------

      Deliveries                            2,700            2,900   Down due to lower railcar
                                                                     deliveries in Europe
      ----------                            -----            -----  --------------------------

    Wheel Services, Refurbishment & Parts
    -------------------------------------

      Revenue                             $112.0M          $112.1M   Slight decline due to timing of
                                                                     scrap programs, offset by
                                                                     improved wheel volumes
      -------                             -------          -------  --------------------------------

       Gross                                  7.9%             9.5%  Down 160 bps due to increased
       margin                                                        operating costs, lower
                                                                     efficiencies and lower scrap
                                                                     prices
      ------                                  ---              ---  ------------------------------

    Leasing & Services
    ------------------

      Revenue                              $17.2M           $17.9M   Down 4.1% due to lower interim
                                                                     rents and lease renewal rates on
                                                                     certain railcars
      -------                              ------           ------  ---------------------------------

       Gross                                 47.0%            57.4%  Down due to lower earnings on
       margin                                                        certain railcars, and lower
                                                                     interim rents.  Prior period also
                                                                     includes reduction in certain
                                                                     maintenance accruals.
      ------                                 ----             ----  ----------------------------------

       Lease                                                         Reflects additional units placed
       fleet                                                         into service
       utilization                           97.5%            95.2%
      ------------                           ----             ----    ---------------------------------

Business Outlook
Based on current business trends and industry forecasts, management currently anticipates the Company’s new railcar deliveries in 2013 to be about 13,000 units. Management anticipates that fiscal 2013 revenue, adjusted EBITDA and earnings per share will be similar to fiscal 2012, with the second half of the year being stronger than the first half of the year.

Conference Call
Greenbrier will host a teleconference to discuss second quarter results. In conjunction with this news release, Greenbrier has posted a supplemental earnings presentation and strategic initiatives presentation to our website (www.gbrx.com). Teleconference details are as follows:

  • April 4, 2013
  • 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. Following the call, a webcast replay will be available for 30 days. Telephone replay will be available through April 20, 2013, at 203-369-3310.

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. Greenbrier builds new railroad freight cars in its four manufacturing facilities in the U.S. and Mexico and marine barges at its U.S. facility. It also repairs and refurbishes freight cars and provides wheels and railcar parts at 39 locations across North America. Greenbrier builds new railroad freight cars and refurbishes freight cars for the European market through both its operations in Poland and various subcontractor facilities throughout Europe. Greenbrier owns approximately 9,200 railcars, and performs management services for approximately 225,000 railcars.

“SAFE HARBOR” STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: This presentation 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, new railcar delivery volumes and schedules, growth in demand for the Company’s railcar services and parts business, and the Company’s strategic initiatives and future financial performance. Greenbrier uses words such as “anticipates,” “believes,” “forecast,” “potential,” “goal,” “contemplates,” “expects,” “intends,” “initiatives,” “targets,” “plans,” “projects,” “hopes,” “seeks,” “estimates,” “could,” “would,” “will,” “may,” “can,” “designed to,” “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 is not indicative of our financial results; turmoil 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, changing technologies, production of new railcar types, or non-performance of subcontractors or suppliers; ability to obtain suitable contracts for the sale of leased equipment and risks related to car hire and residual values; difficulties associated with governmental regulation, including environmental liabilities; integration of current or future acquisitions; succession planning; 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, 2012, 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 for any periodic progress reports on strategic initiatives, 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 earnings attributable to Greenbrier 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.

Economic EPS is not a financial measure under GAAP. Economic EPS is used to measure the current economic impact of our Convertible Bonds due in 2018 that have a conversion strike price of $38.05/share, which exceeds our current stock price. We define Economic EPS as net earnings attributable to Greenbrier divided by the sum of weighted average basic common shares outstanding, plus the dilutive effect of warrants. This calculation excludes the dilutive effect of the shares underlying the 2018 bonds under the “if converted” method, which is included in the calculation of Diluted EPS. You should not consider Economic EPS in isolation or as a substitute for other financial statement data determined in accordance with GAAP. In addition, because Economic EPS is not a measure of financial performance under GAAP and is susceptible to varying calculations, the Economic EPS measure presented may differ from and may not be comparable to similarly titled measures used by other companies.

                                                                                                                            THE GREENBRIER COMPANIES, INC.

    Consolidated Balance Sheets

    (In thousands, unaudited)

                                February 28, 2013      November 30, 2012      August 31, 2012       May 31,      2012             February 29, 2012
                                -----------------      -----------------      ---------------       -----------------             -----------------

    Assets

       Cash and cash
        equivalents                            $55,637                $41,284               $53,571                 $44,915                      $40,666

       Restricted cash                           8,899                  7,322                 6,277                   6,089                        2,249

       Accounts receivable,
        net                                    144,933                163,385               146,326                 172,086                      177,544

       Inventories                             359,281                363,642               316,741                 346,122                      365,811

       Leased railcars for
        syndication                             36,198                 54,297                97,798                  66,776                       79,681

       Equipment on operating
        leases, net                            344,576                362,522               362,968                 334,872                      322,811

       Property, plant and
        equipment, net                         194,887                186,715               182,429                 172,729                      165,700

       Goodwill                                134,316                137,066               137,066                 137,066                      137,066

       Intangibles and other
        assets, net                             86,194                 79,500                81,368                  84,693                       85,155
                                                ------                 ------                ------                  ------                       ------

                                            $1,364,921             $1,395,733            $1,384,544              $1,365,348                   $1,376,683
                                            ==========             ==========            ==========              ==========                   ==========

    Liabilities and Equity

       Revolving notes                         $50,058                $89,826               $60,755                 $71,430                     $101,446

       Accounts payable and
        accrued liabilities                    278,221                282,925               329,508                 323,977                      340,328

       Deferred income taxes                    99,965                 96,498                95,363                  88,514                       89,623

       Deferred revenue                         23,178                 28,283                17,194                  17,872                        1,230

       Notes payable                           427,553                427,697               428,079                 428,028                      428,454

       Total equity -
        Greenbrier                             461,136                447,080               431,777                 418,161                      399,788

       Noncontrolling
        interest                                24,810                 23,424                21,868                  17,366                       15,814
                                                ------                 ------                ------                  ------

       Total equity                            485,946                470,504               453,645                 435,527                      415,602
                                               -------                -------               -------                 -------                      -------

                                            $1,364,921             $1,395,733            $1,384,544              $1,365,348                   $1,376,683
                                            ==========             ==========            ==========              ==========                   ==========

                                                                                                                                          THE GREENBRIER COMPANIES, INC.

    Consolidated Statements of Income

    (In thousands, except per share amounts, unaudited)

                                                        Three Months Ended          Six Months Ended

                                                           February 28,               February 29,             February 28,           February 29,

                                                                              2013                       2012                   2013                     2012
                                                                              ----                       ----                   ----                     ----

    Revenue

    Manufacturing                                                         $294,047                   $320,206               $579,416                 $582,863

    Wheel Services, Refurbishment & Parts                                  111,952                    119,894                224,051                  237,643

    Leasing & Services                                                      17,167                     18,086                 35,073                   35,879
                                                                            ------                     ------                 ------                   ------

                                                                           423,166                    458,186                838,540                  856,385

    Cost of revenue

    Manufacturing                                                          262,650                    290,851                521,142                  527,040

    Wheel Services, Refurbishment & Parts                                  103,134                    106,554                204,610                  212,445

    Leasing & Services                                                       9,107                      9,295                 16,735                   18,958
                                                                             -----                      -----                 ------                   ------

                                                                           374,891                    406,700                742,487                  758,443

    Margin                                                                  48,275                     51,486                 96,053                   97,942

    Selling and administrative expense                                      24,942                     24,979                 51,042                   48,214

    Net gain on disposition of equipment                                    (3,076)                    (2,654)                (4,484)                  (6,312)
                                                                            ------                     ------                 ------                   ------

    Earnings from operations                                                26,409                     29,161                 49,495                   56,040

     Other costs

    Interest and foreign exchange                                            6,322                      6,630                 12,222                   12,014
                                                                             -----                      -----                 ------                   ------

    Earnings before income taxes and earnings                               20,087                     22,531                 37,273                   44,026

      (loss) from unconsolidated affiliates

    Income tax expense                                                      (5,590)                    (5,348)               (10,176)                 (13,144)
                                                                            ------                     ------                -------                  -------

    Earnings before earnings (loss) from                                    14,497                     17,183                 27,097                   30,882

      unconsolidated affiliates

    Earnings (loss) from unconsolidated affiliates                            (105)                        72                   (145)                    (300)
                                                                              ----                        ---                   ----                     ----

    Net earnings                                                            14,392                     17,255                 26,952                   30,582

    Net (earnings) loss attributable to                                       (553)                       415                 (2,686)                   1,604

        noncontrolling interest

    Net earnings attributable to Greenbrier                                $13,839                    $17,670                $24,266                  $32,186
                                                                           =======                    =======                =======                  =======

    Basic earnings per common share                                          $0.51                      $0.66                  $0.89                    $1.23

    Diluted earnings per common share                                        $0.45                      $0.57                  $0.80                    $1.04

    Weighted average common shares:

    Basic                                                                   27,210                     26,683                 27,177                   26,073

    Diluted                                                                 34,044                     33,668                 34,018                   33,528

                                                                                                           THE GREENBRIER COMPANIES, INC.

    Consolidated Statements of Cash Flows

    (In thousands, unaudited)

                                                                      Six Months Ended

                                                                      February 28, 2013          February 29, 2012
                                                                      -----------------          -----------------

    Cash flows from operating activities

    Net earnings                                                                        $26,952                        $30,582

    Adjustments to reconcile net earnings to net

      cash provided by (used in) operating activities:

    Deferred income taxes                                                                 4,203                          5,828

    Depreciation and amortization                                                        21,398                         20,322

    Net gain on disposition of equipment                                                 (4,484)                        (6,312)

    Accretion of debt discount                                                            1,725                          1,599

    Stock based compensation expense                                                      2,887                          3,490

    Other                                                                                (1,612)                         3,759

    Decrease (increase) in assets:

    Accounts receivable                                                                   3,079                          8,898

    Inventories                                                                         (27,208)                       (43,751)

    Leased railcars for syndication                                                      56,960                        (52,925)

    Other                                                                                   245                           (603)

    Increase (decrease) in liabilities:

    Accounts payable and accrued liabilities                                            (56,493)                        25,854

               Deferred revenue                                                           5,936                         (4,657)
                                                                                          -----                         ------

    Net cash provided by (used in) operating activities                                  33,588                         (7,916)
                                                                                         ------                         ------

    Cash flows from investing activities

    Proceeds from sales of assets                                                        22,301                         20,058

    Capital expenditures                                                                (35,525)                       (35,713)

    Increase in restricted cash                                                          (2,622)                          (136)

    Investment in and net advances to unconsolidated affiliates                            (386)                            70

    Other                                                                                (3,582)                            22

    Net cash used in investing activities                                               (19,814)                       (15,699)
                                                                                        -------                        -------

    Cash flows from financing activities

    Net change in revolving notes with maturities of 90 days or less                    (16,579)                       (18,716)

    Proceeds from revolving notes with maturities longer than 90 days                    19,968                         46,646

    Repayments of revolving notes with maturities longer than 90 days                   (14,998)                       (15,818)

    Proceeds from issuance of notes payable                                                   -                          2,500

    Repayments of notes payable                                                          (2,251)                        (4,784)

    Investment by joint venture partner                                                   1,949                              -

    Excess tax benefit from restricted stock awards                                         181                              -

    Net cash provided by (used in) financing activities                                 (11,730)                         9,828
                                                                                        -------                          -----

    Effect of exchange rate changes                                                          22                          4,231

    Increase (decrease) in cash and cash equivalents                                      2,066                         (9,556)

    Cash and cash equivalents

    Beginning of period                                                                  53,571                         50,222
                                                                                         ------                         ------

    End of period                                                                       $55,637                        $40,666
                                                                                        =======                        =======

                                                                       THE GREENBRIER COMPANIES, INC.

    Supplemental Information

    Quarterly Results of Operations

    (In thousands, except per share amounts, unaudited)

                                                       First               Second
                                                       -----               ------

    2013

    Revenue

       Manufacturing                                         $285,368             $294,047

       Wheel
        Services,
        Refurbishment
        & Parts                                               112,100              111,952

       Leasing &
        Services                                               17,906               17,167
                                                               ------               ------

                                                              415,374              423,166

    Cost of revenue

       Manufacturing                                          258,492              262,650

       Wheel
        Services,
        Refurbishment
        & Parts                                               101,476              103,134

       Leasing &
        Services                                                7,627                9,107
                                                                -----                -----

                                                              367,595              374,891

    Margin                                                     47,779               48,275

    Selling
     and
     administrative
     expense                                                   26,100               24,942

    Net gain
     on
     disposition
     of
     equipment                                                 (1,408)              (3,076)
                                                               ------               ------

    Earnings
     from
     operations                                                23,087               26,409

    Other costs

       Interest
        and
        foreign
        exchange                                                5,900                6,322
                                                                -----                -----

    Earnings
     before
     income
     tax and                                                   17,187               20,087

       loss from
        unconsolidated
        affiliates

    Income tax
     expense                                                   (4,586)              (5,590)

    Loss from
     unconsolidated
     affiliates                                                   (40)                (105)
                                                                  ---                 ----

    Net
     earnings                                                  12,561               14,392

    Net
     earnings
     attributable
     to                                                        (2,134)                (553)

       noncontrolling
        interest

    Net
     earnings
     attributable
     to
     Greenbrier                                               $10,427              $13,839
                                                              =======              =======

    Basic
     earnings
     per
     common
     share:
     (1)                                                        $0.38                $0.51

    Diluted
     earnings
     per
     common
     share:
     (2)                                                        $0.35                $0.45

                    Quarterly
                    amounts do
                    not total
                    to the year
                    to date
                    amount as
                    each period
                    is
                    calculated
              (1)   discretely.

    (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
                     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.

    Supplemental Information

    Quarterly Results of Operations

    (In thousands, except per share amounts, unaudited)

                                                        First           Second           Third           Fourth           Total
                                                        -----           ------           -----           ------           -----

    2012

    Revenue

       Manufacturing                                          $262,656         $320,206        $364,930         $306,172        $1,253,964

       Wheel Services,
        Refurbishment & Parts                                  117,749          119,894         125,145          119,077           481,865

       Leasing & Services                                       17,794           18,086          17,722           18,285            71,887
                                                                ------           ------          ------           ------            ------

                                                               398,199          458,186         507,797          443,534         1,807,716

    Cost of revenue

       Manufacturing                                           236,188          290,851         325,424          269,921         1,122,384

       Wheel Services,
        Refurbishment & Parts                                  105,891          106,554         111,610          109,486           433,541

       Leasing & Services                                        9,663            9,295           8,825            9,588            37,371
                                                                 -----            -----           -----            -----            ------

                                                               351,742          406,700         445,859          388,995         1,593,296

    Margin                                                      46,457           51,486          61,938           54,539           214,420

    Selling and
     administrative expense                                     23,235           24,979          28,784           27,598           104,596

    Net gain on disposition
     of equipment                                               (3,658)          (2,654)         (2,585)             (67)           (8,964)
                                                                ------           ------          ------              ---            ------

    Earnings from operations                                    26,880           29,161          35,739           27,008           118,788

    Other costs

       Interest and foreign
        exchange                                                 5,383            6,630           6,560            6,236            24,809
                                                                 -----            -----           -----            -----            ------

    Earnings before income
     tax and earnings                                           21,497           22,531          29,179           20,772            93,979

       (loss) from unconsolidated
        affiliates

    Income tax expense                                          (7,797)          (5,348)         (8,655)         (10,593)          (32,393)

    Earnings (loss) from
     unconsolidated                                               (372)              72             201             (317)             (416)

      affiliates

    Net earnings                                                13,328           17,255          20,725            9,862            61,170

    Net (earnings) loss
     attributable to                                             1,189              415          (1,608)          (2,458)           (2,462)

       Noncontrolling interest

    Net earnings
     attributable to
     Greenbrier                                                $14,517          $17,670         $19,117           $7,404           $58,708
                                                               =======          =======         =======           ======           =======

    Basic earnings per
     common share: (1)                                           $0.57            $0.66           $0.71            $0.27             $2.21

    Diluted earnings per
     common share: (2)                                           $0.48            $0.57           $0.61            $0.26             $1.91

                    Quarterly
                     amounts do
                     not total
                     to the year
                     to date
                     amount as
                     each period
                     is
                     calculated
              (1)    discretely.

    (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
                     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.

                                                                 THE GREENBRIER COMPANIES, INC.

    Supplemental Information

    Reconciliation of Net Earnings attributable to Greenbrier to
     Adjusted EBITDA (1)

    (In thousands, unaudited)

                                           Three Months Ended
                                           ------------------

                                              February 28,                November 30,

                                                            2013                         2012
                                                            ----                         ----

     Net
     earnings
     attributable
     to
     Greenbrier                                          $13,839                      $10,427

     Interest
     and
     foreign
     exchange                                              6,322                        5,900

     Income
     tax
     expense                                               5,590                        4,586

     Depreciation
     and
     amortization                                         10,475                       10,923

     Adjusted
     EBITDA                                              $36,226                      $31,836
                                                         =======                      =======

(

             (1)   Adjusted
                   EBITDA is not
                   a financial
                   measure under
                   generally
                   accepted
                   accounting
                   principles
                   (GAAP). We
                   define
                   Adjusted
                   EBITDA as
                   earnings
                   attributable
                   to Gr
                   eenbrier
                   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, 2013
                                           -----------------

    Backlog Activity (units)

    Beginning backlog                                            9,700

    Orders received                                              4,500

    Production held as Leased railcars for
     syndication                                                (300)

    Production sold directly to third
     parties                                                  (2,200)
                                                              ------

    Ending backlog                                            11,700
                                                              ======

    Delivery Information (units)

    Production sold directly to third
     parties                                                   2,200

    Sales of Leased railcars for
     syndication                                                 500
                                                                 ---

    Total deliveries                                           2,700
                                                               =====

                                                                                                                               THE GREENBRIER COMPANIES, INC.

    Supplemental Information

    Calculation of Diluted Earnings Per Share

    (In thousands, except per share amounts, unaudited)

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

    (In thousands)                                                                                           Three Months Ended

                                                         February 28,                                                      November 30,

                                                                                                        2013                       2012
                                                                                                        ----                       ----

                Weighted average basic common shares outstanding (1)                                               27,210                               27,144

                Dilutive effect of warrants                                                                           789                                  802

                Dilutive effect of convertible notes (2)                                                            6,045                                6,045
                                                                                                                    -----

                Weighted average diluted common shares outstanding                                                 34,044                               33,991
                                                                                                                   ======

              (1)   Restricted
                    stock
                    grants are
                    treated as
                    outstanding
                    when issued
                    and 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 as
                    they were
                    considered
                    dilutive
                    under the
                    "if
                    converted"
                    method as
                    further
                    discussed
                    below. The
                    dilutive
                    effect of
                    the 2026
                    Convertible
                    notes was
                    excluded
                    from the
                    share
                    calculations
                    as the
                    stock price
                    for each
                    period
                    presented
                    was less
                    than the
                    initial
                    conversion
                    price of
                    $48.05 and
                    therefore
                    considered
                    anti-
                    dilutive.

Dilutive EPS 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. The 2026 Convertible notes would only be included in the calculation of both approaches if the current stock price is greater than the initial conversion price of $48.05 using the treasury stock method.

                                                Three Months Ended

                                                 February 28,       November 30,

                                                               2013                 2012
                                                               ----                 ----

     Net earnings attributable to Greenbrier                $13,839              $10,427

     Add back:

     Interest and debt issuance costs on the                  1,416                1,430

        2018 Convertible notes, net of tax

     Earnings before interest and debt issuance             $15,255              $11,857

        costs on convertible notes

      Weighted average diluted common shares
      outstanding                                            34,044               33,991

     Diluted earnings per share (1)                           $0.45                $0.35

                    Diluted
                    earnings
                    per share
                    was
                    calculated
              (1)   as follows:

                      Earnings
                       before
                      interest
                      and debt
                      issuance
                    costs (net
                    of tax) on
                    convertible
                       notes
                   -----------

                      Weighted
                      average
                      diluted
                       common
                       shares
                    outstanding

                                                                                                                                         THE GREENBRIER COMPANIES, INC.

    Supplemental Information

    Reconciliation of Basic Earnings Per Share to Economic Earnings Per Share (1)

    (In thousands, except per share amounts, unaudited)

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

                                                                                                         Three Months Ended
                                                                                                         ------------------

                                                                                                            February 28,            November 30,

                                                                                                                               2013                              2012
                                                                                                                               ----                              ----

    Weighted average basic common shares outstanding                                                                         27,210                            27,144

    Dilutive effect of warrants                                                                                                 789                               802
                                                                                                                                ---                               ---

    Weighted average economic diluted                                                                                        27,999                            27,946

    common shares outstanding

    Net earnings attributable to Greenbrier                                                                                 $13,839                           $10,427

    Economic earnings per share                                                                                               $0.49                             $0.37

             (1)   Economic EPS
                   is not a
                   financial
                   measure under
                   GAAP.
                   Economic EPS
                   is used to
                   measure the
                   current
                   economic
                   impact of our
                   Convertible
                   Bonds due in
                   2018 that
                   have a
                   conversion
                   strike price
                   of
                   $38.05/share,
                   which exceeds
                   our current
                   stock price.
                   We define
                   Economic EPS
                   as net
                   earnings
                   attributable
                   to Greenbrier
                   divided by
                   the sum of
                   weighted
                   average basic
                   common shares
                   outstanding,
                   plus the
                   dilutive
                   effect of
                   warrants.
                   This
                   calculation
                   excludes the
                   dilutive
                   effect of the
                   shares
                   underlying
                   the 2018
                   bonds under
                   the "if
                   converted"
                   method, which
                   is included
                   in the
                   calculation
                   of Diluted
                   EPS. You
                   should not
                   consider
                   Economic EPS
                   in isolation
                   or as a
                   substitute
                   for other
                   financial
                   statement
                   data
                   determined in
                   accordance
                   with GAAP. In
                   addition,
                   because
                   Economic EPS
                   is not a
                   measure of
                   financial
                   performance
                   under GAAP
                   and is
                   susceptible
                   to varying
                   calculations,
                   the Economic
                   EPS measure
                   presented may
                   differ from
                   and may not
                   be comparable
                   to similarly
                   titled
                   measures used
                   by other
                   companies.

SOURCE The Greenbrier Companies, Inc. (GBX)


Source: PR Newswire