8-K
GREENBRIER COMPANIES INC (GBX)
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 10, 2023
THE GREENBRIER COMPANIES, INC.
(Exact name of registrant as specified in its charter)
| Oregon | 001-13146 | 93-0816972 |
|---|---|---|
| (State or Other Jurisdiction of<br> <br>Incorporation) | (Commission<br> <br>File Number) | (I.R.S. Employer<br> <br>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:
| ☐ | 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)) |
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| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br>Symbol(s) | Name of each exchange<br> <br>on which registered |
|---|---|---|
| Common Stock without par value | GBX | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition |
|---|
On April 10, 2023, The Greenbrier Companies, Inc. (the “Company”) issued a press release reporting the Company’s financial results for the second fiscal quarter ended February 28, 2023. A copy of the release is furnished herewith as Exhibit 99.1 and is incorporated into this Item 2.02 by reference.
The information contained in this Item 2.02 of this Current Report on Form 8-K, including the exhibit, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be incorporated by reference into any filings made by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in such filing.
| Item 9.01 | Financial Statements and Exhibits |
|---|
(d) Exhibits
| Exhibit<br> <br>No. | Description |
|---|---|
| 99.1 | Press Release dated April 10, 2023 of The Greenbrier Companies, Inc. reporting the Company’s financial results for the second fiscal quarter ended February 28, 2023. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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 10, 2023 | By: | /s/ Adrian J. Downes |
| Adrian J. Downes | ||
| Senior Vice President and Chief Financial Officer |
EX-99.1
Exhibit 99.1
| One Centerpointe Drive, Suite 200, Lake Oswego, Oregon 97035 503-684-7000 | www.gbrx.com | |
|---|---|---|
| For release: April 10, 2023 6:00 a.m. EDT | Contact: | Justin Roberts, Investor Relations |
| --- | --- | --- |
| Jack Isselmann, Media Relations | ||
| Ph: 503-684-7000 |
Greenbrier Reports Second Quarter Results
GAAP EPS of $0.97
Fleet utilization increases to 99%
Adjusted EPS of $0.99, excluding Gunderson exit related costs
Strategic update and multi-year targets at Investor Day on April 12, 2023
Lake Oswego, Oregon, April 10, 2023 – The Greenbrier Companies, Inc. (NYSE: GBX) (“Greenbrier”), a leading international supplier of equipment and services to global freight transportation markets, today reported financial results for its second fiscal quarter ended February 28, 2023.
Second Quarter Highlights
| • | New railcar orders for 4,500 units valued at $580 million and deliveries of 7,600 units.<br> |
|---|---|
| • | New railcar backlog of 25,900 units with an estimated value of $3.1 billion as of February 28, 2023;<br>excludes railcar conversion backlog of 1,200 units valued at $100 million. |
| --- | --- |
| • | Quarter end liquidity increased to $816 million, including $380 million in cash and $436 million<br>of available borrowing capacity at quarter end. |
| --- | --- |
| • | Operating cash flow of nearly $160 million. |
| --- | --- |
| • | Net earnings attributable to Greenbrier for the quarter was $33 million, or $0.97 per diluted share, on<br>revenue of $1.1 billion. Results include $0.7 million ($0.02 per share), net of tax, of Gunderson exit related costs. |
| --- | --- |
| • | Adjusted net earnings attributable to Greenbrier was $34 million or $0.99 per diluted share.<br> |
| --- | --- |
| • | Adjusted EBITDA for the quarter was $98 million, or 8.7% of revenue. |
| --- | --- |
| • | Repurchased 575 thousand shares of stock for $17 million. $75 million of share repurchase<br>authorization remaining after March activity. |
| --- | --- |
| • | Board declares a quarterly dividend of $0.27 per share, payable on May 16, 2023 to shareholders of record as<br>of April 25, 2023 representing Greenbrier’s 36^th^ consecutive quarterly dividend. |
| --- | --- |
“Greenbrier’s strong performance in the second quarter is the result of ongoing operational initiatives and robust syndication activity. Railcar orders remained stable throughout the quarter, comprised of a broad range of railcar types. Business improved across the company as revenue and margin increased sequentially in each operating segment,” said Lorie L. Tekorius, CEO and President. “We are excited to share our multi-year strategy to optimize our future performance as we will describe in detail at our Investor Day on April 12, 2023. While outcomes won’t be linear, we are already seeing progress in our manufacturing and services businesses and expect margin to improve on a steady or increasing revenue base in future periods.”
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| Greenbrier Reports Second Quarter Results (Cont.) | Page 2 |
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Investor Day
Greenbrier will host an Investor Day on Wednesday, April 12, 2023 in New York, NY. Institutional investors wishing to attend may register by sending an email to gbx@roseandco.com. Webcast registration details are available at Greenbrier’s investor relations website at investors.gbrx.com. A live webcast of the Investor Day, including presentation materials, will be accessible through Greenbrier’s website. A replay of the webcast will be available following the live presentations. ****
BusinessUpdate & Outlook
Based on current trends and production schedules, Greenbrier is updating guidance for fiscal 2023:
| • | Deliveries of 23,000 – 25,000 units including approximately 1,000 units in Greenbrier-Maxion (Brazil)<br> |
|---|---|
| • | Revenue at $3.4 – 3.7 billion |
| --- | --- |
| • | Capital expenditures of $290 million in Leasing & Management Services, $80 million in<br>Manufacturing and $15 million in Maintenance Services |
| --- | --- |
| • | Proceeds of equipment sales are expected to be approximately $70 million |
| --- | --- |
| • | Build and capitalize into the lease fleet approximately 2,500 units. These units are not included in the delivery<br>guidance. |
| --- | --- |
| • | Consolidated gross margin % in the low double-digits is unchanged. |
| --- | --- |
Financial Summary
| Q2 FY23 | Q1 FY23 | |
|---|---|---|
| Revenue | $1.1B | 766.5M |
| Gross margin | $116.8M | 69.5M |
| Gross margin % | 10.4% | 9.1% |
| Selling and administrative | $59.0M | 53.4M |
| Net gain on disposition of<br> <br>equipment | $9.6M | 3.3M |
| Adjusted EBITDA | $97.9M | 48.7M |
| Net (earnings) loss attributable to noncontrolling interest | ($3.7M) | 0.6M |
| Adjusted Net earnings attributable to Greenbrier | $33.8M^(1)^ | 1.6M(2) |
| Adjusted diluted EPS | $0.99^(1)^ | 0.05(2) |
All values are in US Dollars.
| ^(1)^ | Excludes $0.7 million ($0.02 per share), net of tax, of Gunderson exit related costs. Reconciliations for<br>Adjusted metrics can be found on page 11. |
|---|---|
| ^(2)^ | Excludes $18.3 million ($0.56 per share), net of tax, of non-cash<br>asset impairment. Reconciliations for Adjusted metrics can be found on page 11. |
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| Greenbrier Reports Second Quarter Results (Cont.) | Page 3 |
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Segment Summary
| Q2 FY23 | Q1 FY23 | Sequential Comparison – Main Drivers | |
|---|---|---|---|
| Manufacturing | |||
| Revenue | $968.6M | $646.5M | Increased deliveries including timing of syndication activity |
| Gross margin | $67.4M | $42.0M | Higher deliveries and improved operating efficiencies |
| Gross margin % | 7.0% | 6.5% | |
| Operating margin %^(1)^ | 4.8% | (0.5%) | Improved operating efficiencies; Prior quarter included $24 million non-cash asset impairment; Excluding the impairment, operating margin in Q1 was 3.2% |
| Deliveries ^(2)^ | 7,200 | 4,500 | Increased production and timing of syndication activity |
| Maintenance Services | |||
| Revenue | $98.0M | $85.5M | Increased volumes due to winter seasonality |
| Gross margin % | 8.6% | 6.9% | Higher volumes and improved operating efficiencies |
| Operating margin %^(1) (3)^ | 6.9% | 6.4% | |
| Leasing & Management Services | |||
| Revenue | $55.4M | $34.5M | Primarily increased syndication activity and lease fleet income |
| Gross margin % | 74.0% | 62.6% | |
| Operating margin%^(1) (3)^ | 73.5% | 45.2% | Timing of gains from fleet optimization |
| Fleet utilization | 98.7% | 97.9% | |
| ^(1)^ | See supplemental segment information on page 10 for additional information. | ||
| --- | --- | ||
| ^(2)^ | Excludes Brazil deliveries which are not consolidated into Manufacturing revenue and margins.<br> | ||
| --- | --- | ||
| ^(3)^ | Includes Net gain on disposition of equipment, which is excluded from gross margin.^^ | ||
| --- | --- |
Conference Call
In place of a conference call, Greenbrier will provide additional information regarding its recent financial performance and strategic plans at its previously announced Investor Day on April 12.
About Greenbrier
Greenbrier, headquartered in Lake Oswego, Oregon, is a leading international supplier of equipment and services to global freight transportation markets. Through its wholly-owned subsidiaries and joint ventures, Greenbrier designs, builds and markets freight railcars and marine barges in North America, Europe and Brazil. We are a leading provider of freight railcar wheel services, parts, maintenance and retrofitting services in North America through our maintenance services business unit. GBX Leasing (GBXL) is a special purpose subsidiary that owns and manages a portfolio of leased railcars that originate primarily from Greenbrier’s manufacturing operations. GBXL and Greenbrier own a lease fleet of approximately 12,300 railcars. As of March 31, 2023, Greenbrier manages 438,000 railcars and offers railcar management, regulatory compliance services and leasing services to railroads and other railcars owners in North America. Learn more about Greenbrier at www.gbrx.com.
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| Greenbrier Reports Second Quarter Results (Cont.) | Page 4 |
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THE GREENBRIER COMPANIES, INC.
CONSOLIDATED BALANCE SHEETS
(In millions, unaudited)
| February 28,<br>2023 | November 30,2022 | August 31,<br>2022 | May 31,<br>2022 | February 28,<br>2022 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Assets | ||||||||||
| Cash and cash equivalents | $ | 379.9 | $ | 263.3 | $ | 543.0 | $ | 449.7 | $ | 586.8 |
| Restricted cash | 19.7 | 17.2 | 16.1 | 16.1 | 15.7 | |||||
| Accounts receivable, net | 571.5 | 495.6 | 501.2 | 464.8 | 399.0 | |||||
| Income tax receivable | 22.4 | 28.9 | 39.8 | 129.4 | 106.0 | |||||
| Inventories | 910.6 | 874.9 | 815.3 | 781.7 | 728.5 | |||||
| Leased railcars for syndication | 102.5 | 272.5 | 111.1 | 142.9 | 80.0 | |||||
| Equipment on operating leases, net | 891.8 | 836.2 | 770.9 | 676.1 | 650.4 | |||||
| Property, plant and equipment, net | 618.4 | 617.6 | 645.2 | 642.7 | 646.5 | |||||
| Investment in unconsolidated affiliates | 83.4 | 94.2 | 92.5 | 96.2 | 90.2 | |||||
| Intangibles and other assets, net | 224.0 | 189.0 | 189.1 | 177.8 | 179.6 | |||||
| Goodwill | 128.3 | 127.7 | 127.3 | 128.7 | 130.0 | |||||
| $ | 3,952.5 | $ | 3,817.1 | $ | 3,851.5 | $ | 3,706.1 | $ | 3,612.7 | |
| Liabilities and Equity | ||||||||||
| Revolving notes | $ | 310.3 | $ | 290.5 | $ | 296.6 | $ | 303.3 | $ | 292.2 |
| Accounts payable and accrued liabilities | 722.6 | 676.5 | 725.1 | 639.0 | 581.2 | |||||
| Deferred income taxes | 70.2 | 49.8 | 68.6 | 72.9 | 51.9 | |||||
| Deferred revenue | 73.0 | 53.2 | 35.3 | 33.3 | 43.0 | |||||
| Notes payable, net | 1,327.0 | 1,301.5 | 1,269.1 | 1,202.6 | 1,209.2 | |||||
| Contingently redeemable noncontrolling interest | 27.5 | 27.7 | 27.7 | 27.8 | 28.5 | |||||
| Total equity – Greenbrier | 1,277.3 | 1,265.8 | 1,276.9 | 1,270.4 | 1,252.6 | |||||
| Noncontrolling interest | 144.6 | 152.1 | 152.2 | 156.8 | 154.1 | |||||
| Total equity | 1,421.9 | 1,417.9 | 1,429.1 | 1,427.2 | 1,406.7 | |||||
| $ | 3,952.5 | $ | 3,817.1 | $ | 3,851.5 | $ | 3,706.1 | $ | 3,612.7 |
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| Greenbrier Reports Second Quarter Results (Cont.) | Page 5 |
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THE GREENBRIER COMPANIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except number of shares which are reflected in thousands and per share amounts, unaudited)
| Three Months Ended<br>February 28, | Six Months Ended<br>February 28, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |||||||||
| Revenue | ||||||||||||
| Manufacturing | $ | 968.6 | $ | 555.7 | $ | 1,615.1 | $ | 1,008.2 | ||||
| Maintenance Services | 98.0 | 86.6 | 183.5 | 159.0 | ||||||||
| Leasing & Management Services | 55.4 | 40.5 | 89.9 | 66.3 | ||||||||
| 1,122.0 | 682.8 | 1,888.5 | 1,233.5 | |||||||||
| Cost of revenue | ||||||||||||
| Manufacturing | 901.2 | 535.0 | 1,505.7 | 956.6 | ||||||||
| Maintenance Services | 89.6 | 81.7 | 169.2 | 152.9 | ||||||||
| Leasing & Management Services | 14.4 | 11.3 | 27.3 | 21.6 | ||||||||
| 1,005.2 | 628.0 | 1,702.2 | 1,131.1 | |||||||||
| Margin | 116.8 | 54.8 | 186.3 | 102.4 | ||||||||
| Selling and administrative expense | 59.0 | 54.7 | 112.4 | 99.0 | ||||||||
| Net gain on disposition of equipment | (9.6 | ) | (25.1 | ) | (12.9 | ) | (33.6 | ) | ||||
| Impairment of long-lived assets | — | — | 24.2 | — | ||||||||
| Earnings from operations | 67.4 | 25.2 | 62.6 | 37.0 | ||||||||
| Other costs | ||||||||||||
| Interest and foreign exchange | 21.6 | 11.8 | 41.2 | 24.4 | ||||||||
| Earnings before income taxes and earnings from unconsolidated affiliates | 45.8 | 13.4 | 21.4 | 12.6 | ||||||||
| Income tax expense | (11.9 | ) | (3.2 | ) | (8.1 | ) | (1.8 | ) | ||||
| Earnings before earnings from unconsolidated affiliates | 33.9 | 10.2 | 13.3 | 10.8 | ||||||||
| Earnings from unconsolidated affiliates | 2.9 | 1.0 | 6.2 | 6.0 | ||||||||
| Net earnings | 36.8 | 11.2 | 19.5 | 16.8 | ||||||||
| Net (earnings) loss attributable to noncontrolling interest | (3.7 | ) | 1.6 | (3.1 | ) | 6.8 | ||||||
| Net earnings attributable to Greenbrier | $ | 33.1 | $ | 12.8 | $ | 16.4 | $ | 23.6 | ||||
| Basic earnings per common share: | $ | 1.01 | $ | 0.39 | $ | 0.50 | $ | 0.72 | ||||
| Diluted earnings per common share: | $ | 0.97 | $ | 0.38 | $ | 0.49 | $ | 0.70 | ||||
| Weighted average common shares: | ||||||||||||
| Basic | 32,588 | 32,582 | 32,654 | 32,546 | ||||||||
| Diluted | 34,400 | 34,463 | 33,654 | 33,609 | ||||||||
| Dividends declared per common share | $ | 0.27 | $ | 0.27 | $ | 0.54 | $ | 0.54 |
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| Greenbrier Reports Second Quarter Results (Cont.) | Page 6 |
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THE GREENBRIER COMPANIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions, unaudited)
| Six Months EndedFebruary 28, | ||||||
|---|---|---|---|---|---|---|
| 2023 | 2022 | |||||
| Cash flows from operating activities | ||||||
| Net earnings | $ | 19.5 | $ | 16.8 | ||
| Adjustments to reconcile net earnings to net cash used in operating activities: | ||||||
| Deferred income taxes | (33.9 | ) | (4.3 | ) | ||
| Depreciation and amortization | 52.9 | 50.9 | ||||
| Net gain on disposition of equipment | (12.9 | ) | (33.6 | ) | ||
| Stock based compensation expense | 5.9 | 5.9 | ||||
| Impairment of long-lived assets | 24.2 | — | ||||
| Noncontrolling interest adjustments | 2.3 | (0.6 | ) | |||
| Other | 1.9 | 2.4 | ||||
| Decrease (increase) in assets: | ||||||
| Accounts receivable, net | (57.8 | ) | (93.5 | ) | ||
| Income tax receivable | 17.4 | 6.2 | ||||
| Inventories | (90.4 | ) | (166.5 | ) | ||
| Leased railcars for syndication | (40.1 | ) | (12.2 | ) | ||
| Other assets | (12.8 | ) | (8.5 | ) | ||
| Increase (decrease) in liabilities: | ||||||
| Accounts payable and accrued liabilities | (9.7 | ) | 15.2 | |||
| Deferred revenue | 37.1 | 1.5 | ||||
| Net cash used in operating activities | (96.4 | ) | (220.3 | ) | ||
| Cash flows from investing activities | ||||||
| Proceeds from sales of assets | 62.1 | 148.6 | ||||
| Capital expenditures | (169.7 | ) | (198.0 | ) | ||
| Investments in and advances to / repayments from unconsolidated affiliates | (3.5 | ) | (4.2 | ) | ||
| Cash distribution from unconsolidated affiliates and other | 5.9 | 1.2 | ||||
| Net cash used in investing activities | (105.2 | ) | (52.4 | ) | ||
| Cash flows from financing activities | ||||||
| Net change in revolving notes with maturities of 90 days or less | (64.4 | ) | (75.6 | ) | ||
| Proceeds from revolving notes with maturities longer than 90 days | 220.0 | — | ||||
| Repayments of revolving notes with maturities longer than 90 days | (145.0 | ) | — | |||
| Proceeds from issuance of notes payable | 75.0 | 323.3 | ||||
| Repayments of notes payable | (18.2 | ) | (7.6 | ) | ||
| Debt issuance costs | (0.2 | ) | (5.2 | ) | ||
| Repurchase of stock | (16.7 | ) | — | |||
| Dividends | (18.1 | ) | (18.1 | ) | ||
| Cash distribution to joint venture partner | (6.4 | ) | (8.5 | ) | ||
| Tax payments for net share settlement of restricted stock | (2.3 | ) | (3.5 | ) | ||
| Net cash provided by financing activities | 23.7 | 204.8 | ||||
| Effect of exchange rate changes | 18.4 | (1.0 | ) | |||
| Decrease in cash and cash equivalents and restricted cash | (159.5 | ) | (68.9 | ) | ||
| Cash and cash equivalents and restricted cash | ||||||
| Beginning of period | 559.1 | 671.4 | ||||
| End of period | $ | 399.6 | $ | 602.5 | ||
| Balance Sheet Reconciliation: | ||||||
| Cash and cash equivalents | $ | 379.9 | $ | 586.8 | ||
| Restricted cash | 19.7 | 15.7 | ||||
| Total cash and cash equivalents and restricted cash | $ | 399.6 | $ | 602.5 |
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| Greenbrier Reports Second Quarter Results (Cont.) | Page 7 |
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THE GREENBRIER COMPANIES, INC.
SUPPLEMENTAL LEASING INFORMATION
(In millions, except owned and managed fleet, unaudited)
Greenbrier’s leasing strategy provides an additional “go to market” element to Greenbrier’s Commercial strategy of direct sales, partnerships with operating leasing companies, and origination of leases for syndication partners as well as providing a platform for further growth at scale. Investing in leasing assets delivers recurring, tax-advantaged cash flows although it reduces Greenbrier’s Manufacturing revenue and margin in the short-term.
Key information for the consolidated Leasing & Management Services segment:
| (In Units) | February 28,<br>2023 | November 30,<br>2022 | ||||
|---|---|---|---|---|---|---|
| Owned fleet^(1)^ | 12,300 | 14,100 | ||||
| Managed fleet | 408,000 | 408,000 | ||||
| Owned fleet utilization^(1)^ | 99 | % | 98 | % | ||
| Three Months Ended | ||||||
| --- | --- | --- | --- | --- | --- | --- |
| Greenbrier Lease Fleet (Units) | February 28,<br>2023 | November 30,<br>2022 | ||||
| Beginning balance | 14,100 | 12,200 | ||||
| Railcars added | 1,400 | 2,300 | ||||
| Railcars sold / scrapped | (3,200 | ) | (400 | ) | ||
| Ending balance | 12,300 | 14,100 | ||||
| February 28,<br>2023 | November 30,<br>2022 | |||||
| --- | --- | --- | --- | --- | --- | --- |
| Equipment on operating lease^(2)^ | $ | 891.8 | $ | 836.2 | ||
| Non-recourse warehouse | $ | 65.6 | $ | — | ||
| ABS non-recourse notes | 312.9 | 315.7 | ||||
| Non-recourse term loan | 338.2 | 306.6 | ||||
| Total Leasing non-recourse debt | $ | 716.7 | $ | 622.3 | ||
| Fleet leverage %^(3)^ | **** | 80 | % | **** | 74 | % |
| (1) | Owned fleet includes Leased railcars for syndication | |||||
| --- | --- | |||||
| (2) | Equipment on operating lease assets not securing Leasing non-recourse<br>term loan support the $600 million U.S. revolver | |||||
| --- | --- | |||||
| (3) | Total Leasing non-recourse debt / Equipment on operating lease<br> | |||||
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| Greenbrier Reports Second Quarter Results (Cont.) | Page 8 |
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THE GREENBRIER COMPANIES, INC.
SUPPLEMENTAL INFORMATION
(In millions, except number of shares which are reflected in thousands and per share amounts, unaudited)
Operating Results by Quarter for 2023 are as follows:
| First | Second | Total | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Revenue | |||||||||
| Manufacturing | $ | 646.5 | $ | 968.6 | $ | 1,615.1 | |||
| Maintenance Services | 85.5 | 98.0 | 183.5 | ||||||
| Leasing & Management Services | 34.5 | 55.4 | 89.9 | ||||||
| 766.5 | 1,122.0 | 1,888.5 | |||||||
| Cost of revenue | |||||||||
| Manufacturing | 604.5 | 901.2 | 1,505.7 | ||||||
| Maintenance Services | 79.6 | 89.6 | 169.2 | ||||||
| Leasing & Management Services | 12.9 | 14.4 | 27.3 | ||||||
| 697.0 | 1,005.2 | 1,702.2 | |||||||
| Margin | 69.5 | 116.8 | 186.3 | ||||||
| Selling and administrative expense | 53.4 | 59.0 | 112.4 | ||||||
| Net gain on disposition of equipment | (3.3 | ) | (9.6 | ) | (12.9 | ) | |||
| Impairment of long-lived assets | 24.2 | — | 24.2 | ||||||
| Earnings (loss) from operations | (4.8 | ) | 67.4 | 62.6 | |||||
| Other costs | |||||||||
| Interest and foreign exchange | 19.6 | 21.6 | 41.2 | ||||||
| Earnings (loss) before income tax and earnings from unconsolidated affiliates | (24.4 | ) | 45.8 | 21.4 | |||||
| Income tax (expense) benefit | 3.8 | (11.9 | ) | (8.1 | ) | ||||
| Earnings (loss) before earnings from unconsolidated affiliates | (20.6 | ) | 33.9 | 13.3 | |||||
| Earnings from unconsolidated affiliates | 3.3 | 2.9 | 6.2 | ||||||
| Net earnings (loss) | (17.3 | ) | 36.8 | 19.5 | |||||
| Net (earnings) loss attributable to noncontrolling interest | 0.6 | (3.7 | ) | (3.1 | ) | ||||
| Net earnings (loss) attributable to Greenbrier | $ | (16.7 | ) | $ | 33.1 | $ | 16.4 | ||
| Basic earnings (loss) per common share^(1)^ | $ | (0.51 | ) | $ | 1.01 | $ | 0.50 | ||
| Diluted earnings (loss) per common share^(1)^ | $ | (0.51 | ) | $ | 0.97 | $ | 0.49 | ||
| Dividends per common share | $ | 0.27 | $ | 0.27 | $ | 0.54 | |||
| ^(1)^ | Quarterly amounts may not total to the<br>year-to-date amount as each period is calculated discretely. | ||||||||
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| Greenbrier Reports Second Quarter Results (Cont.) | Page 9 |
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SUPPLEMENTAL INFORMATION
(In millions, except number of shares which are reflected in thousands and per share amounts, unaudited)
Operating Results by Quarter for 2022 are as follows:
| First | Second | Third | Fourth | Total | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | |||||||||||||||
| Manufacturing | $ | 452.5 | $ | 555.7 | $ | 650.9 | $ | 817.5 | $ | 2,476.6 | |||||
| Maintenance Services | 72.4 | 86.6 | 101.5 | 87.2 | 347.7 | ||||||||||
| Leasing & Management Services | 25.8 | 40.5 | 41.1 | 46.0 | 153.4 | ||||||||||
| 550.7 | 682.8 | 793.5 | 950.7 | 2,977.7 | |||||||||||
| Cost of revenue | |||||||||||||||
| Manufacturing | 421.6 | 535.0 | 611.3 | 733.0 | 2,300.9 | ||||||||||
| Maintenance Services | 71.2 | 81.7 | 91.1 | 78.0 | 322.0 | ||||||||||
| Leasing & Management Services | 10.3 | 11.3 | 14.8 | 12.4 | 48.8 | ||||||||||
| 503.1 | 628.0 | 717.2 | 823.4 | 2,671.7 | |||||||||||
| Margin | 47.6 | 54.8 | 76.3 | 127.3 | 306.0 | ||||||||||
| Selling and administrative expense | 44.3 | 54.7 | 57.4 | 68.8 | 225.2 | ||||||||||
| Net gain on disposition of equipment | (8.5 | ) | (25.1 | ) | (0.7 | ) | (2.9 | ) | (37.2 | ) | |||||
| Earnings from operations | 11.8 | 25.2 | 19.6 | 61.4 | 118.0 | ||||||||||
| Other costs | |||||||||||||||
| Interest and foreign exchange | 12.6 | 11.8 | 14.9 | 18.1 | 57.4 | ||||||||||
| Earnings (loss) before income tax and earnings from unconsolidated affiliates | (0.8 | ) | 13.4 | 4.7 | 43.3 | 60.6 | |||||||||
| Income tax (expense) benefit | 1.4 | (3.2 | ) | (1.1 | ) | (15.2 | ) | (18.1 | ) | ||||||
| Earnings before earnings from unconsolidated affiliates | 0.6 | 10.2 | 3.6 | 28.1 | 42.5 | ||||||||||
| Earnings from unconsolidated affiliates | 5.0 | 1.0 | 4.0 | 1.3 | 11.3 | ||||||||||
| Net earnings | 5.6 | 11.2 | 7.6 | 29.4 | 53.8 | ||||||||||
| Net (earnings) loss attributable to noncontrolling interest | 5.2 | 1.6 | (4.5 | ) | (9.2 | ) | (6.9 | ) | |||||||
| Net earnings attributable to Greenbrier | $ | 10.8 | $ | 12.8 | $ | 3.1 | $ | 20.2 | $ | 46.9 | |||||
| Basic earnings per common share^(1)^ | $ | 0.33 | $ | 0.39 | $ | 0.10 | $ | 0.62 | $ | 1.44 | |||||
| Diluted earnings per common share^(1)^ | $ | 0.32 | $ | 0.38 | $ | 0.09 | $ | 0.60 | $ | 1.40 | |||||
| Dividends per common share | $ | 0.27 | $ | 0.27 | $ | 0.27 | $ | 0.27 | $ | 1.08 | |||||
| ^(1)^ | Quarterly amounts may not total to the<br>year-to-date amount as each period is calculated discretely. | ||||||||||||||
| --- | --- |
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| Greenbrier Reports Second Quarter Results (Cont.) | Page 10 |
|---|
THE GREENBRIER COMPANIES, INC.
SUPPLEMENTAL INFORMATION
(In millions, unaudited)
Segment Information
| Three months ended February 28, 2023: | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | Earnings (loss) from operations | ||||||||||||||||
| External | Intersegment | Total | External | Intersegment | Total | ||||||||||||
| Manufacturing | $ | 968.6 | $ | 96.8 | $ | 1,065.4 | $ | 46.6 | $ | 8.8 | $ | 55.4 | |||||
| Maintenance Services | 98.0 | 6.2 | 104.2 | 6.8 | — | 6.8 | |||||||||||
| Leasing & Management Services | 55.4 | 0.5 | 55.9 | 40.7 | 0.1 | 40.8 | |||||||||||
| Eliminations | — | (103.5 | ) | (103.5 | ) | — | (8.9 | ) | (8.9 | ) | |||||||
| Corporate | — | — | — | (26.7 | ) | — | (26.7 | ) | |||||||||
| $ | 1,122.0 | $ | — | $ | 1,122.0 | $ | 67.4 | $ | — | $ | 67.4 | ||||||
| Three months ended November 30, 2022: | |||||||||||||||||
| Revenue | Earnings (loss) from operations | ||||||||||||||||
| External | Intersegment | Total | External | Intersegment | Total | ||||||||||||
| Manufacturing | $ | 646.5 | $ | 44.5 | $ | 691.0 | $ | (3.4 | ) | $ | 4.0 | $ | 0.6 | ||||
| Maintenance Services | 85.5 | 8.5 | 94.0 | 5.5 | — | 5.5 | |||||||||||
| Leasing & Management Services | 34.5 | 0.2 | 34.7 | 15.6 | — | 15.6 | |||||||||||
| Eliminations | — | (53.2 | ) | (53.2 | ) | — | (4.0 | ) | (4.0 | ) | |||||||
| Corporate | — | — | — | (22.5 | ) | — | (22.5 | ) | |||||||||
| $ | 766.5 | $ | — | $ | 766.5 | $ | (4.8 | ) | $ | — | $ | (4.8 | ) | ||||
| Total assets | |||||||||||||||||
| --- | --- | --- | --- | --- | |||||||||||||
| February 28,<br>2023 | November 30,<br>2022 | ||||||||||||||||
| Manufacturing | $ | 1,923.0 | $ | 1,861.7 | |||||||||||||
| Maintenance Services | 313.9 | 294.6 | |||||||||||||||
| Leasing & Management Services | 1,267.2 | 1,378.9 | |||||||||||||||
| Unallocated, including cash | 448.4 | 281.9 | |||||||||||||||
| $ | 3,952.5 | $ | 3,817.1 |
SUPPLEMENTAL BACKLOG AND DELIVERY INFORMATION
(Unaudited)
| Three Months<br>Ended | |||
|---|---|---|---|
| February 28, 2023 | |||
| Backlog Activity (units) ^(1)^ | |||
| Beginning backlog | 28,300 | ||
| Orders received | 4,500 | ||
| Production held on the Balance Sheet | (1,500 | ) | |
| Production sold directly to third parties | (5,400 | ) | |
| Ending backlog | 25,900 | ||
| Delivery Information (units) ^(1)^ | |||
| Production sold directly to third parties | 5,400 | ||
| Sales of Leased railcars for syndication | 2,200 | ||
| Total deliveries | 7,600 | ||
| (1) | Includes Greenbrier-Maxion, our Brazilian railcar manufacturer, which is accounted for under the equity method<br> | ||
| --- | --- |
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| Greenbrier Reports Second Quarter Results (Cont.) | Page 11 |
|---|
THE GREENBRIER COMPANIES, INC.
SUPPLEMENTAL INFORMATION
(In millions, except number of shares which are reflected in thousands and per share amounts, unaudited)
Reconciliation of Net earnings (loss) to Adjusted EBITDA
| Three Months Ended | |||||
|---|---|---|---|---|---|
| February 28,<br>2023 | November 30,<br>2022 | ||||
| Net earnings (loss) | $ | 36.8 | $ | (17.3 | ) |
| Interest and foreign exchange | 21.6 | 19.6 | |||
| Income tax (benefit) expense | 11.9 | (3.8 | ) | ||
| Depreciation and amortization | 26.9 | 26.0 | |||
| Impairment of long-lived assets and other exit related costs | 0.7 | 24.2 | |||
| Adjusted EBITDA | $ | 97.9 | $ | 48.7 |
Reconciliation of Net earnings (loss) attributable to Greenbrier to Adjusted net earnings attributable to Greenbrier
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| February 28,<br>2023 | November 30,<br>2022 | |||||
| Net earnings (loss) attributable to Greenbrier | $ | 33.1 | $ | (16.7 | ) | |
| Impairment of long-lived assets and other exit related costs | 0.7 | ^(1)^ | 18.3 | ^(2)^ | ||
| Adjusted net earnings attributable to Greenbrier | $ | 33.8 | $ | 1.6 | ||
| ^(1)^ | Net of tax of $0.2 million | |||||
| --- | --- | |||||
| ^(2)^ | Net of tax of $5.9 million | |||||
| --- | --- |
Reconciliation of Diluted earnings (loss) per share to Adjusted diluted earnings per share
| Three Months Ended | |||||
|---|---|---|---|---|---|
| February 28,<br>2023 | November 30,<br>2022 | ||||
| Diluted earnings (loss) per share | $ | 0.97 | $ | (0.51 | ) |
| Impairment of long-lived assets and other exit related costs | 0.02 | 0.56 | |||
| Adjusted diluted earnings per share | $ | 0.99 | $ | 0.05 | |
| Diluted weighted average shares outstanding | 34,400 | 33,727 |
Share Calculations for Adjusted diluted earnings per share ( in thousands )
| Three Months Ended | ||||
|---|---|---|---|---|
| February 28,<br>2023 | November 30,<br>2022 | |||
| Basic Shares | 32,588 | 32,719 | ||
| Dilutive effect of performance awards | 991 | 1,008 | ||
| Dilutive effect of convertible notes due 2024 | 821 | — | ||
| Diluted weighted average shares outstanding | 34,400 | 33,727 |
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| Greenbrier Reports Second Quarter Results (Cont.) | Page 12 |
|---|
Forward-Looking Statements
This press release may contain forward-looking statements, including statements that are not purely statements of historical fact. Greenbrier uses words, and variations of words, such as “believe,” “build,” “confident,” “deliver,” “drive,” “expect,” “increase,” “optimize,” “outlook,” “provide,” “will,” and similar expressions to identify forward-looking statements. These forward-looking statements include, without limitation, statements about backlog and other orders, leasing performance, financing, future liquidity, cash flow, tax treatment, and other information regarding future performance and strategies and appear throughout this press release including in the headlines and the sections titled “Second Quarter Highlights,” a “Business Update & Outlook,” and “Supplemental Leasing Information.” These forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and important factors that could cause actual results to differ materially from the results contemplated by the forward-looking statements. Such risks, uncertainties and important factors that might cause such a difference include, but are not limited to, the following: an economic downturn and economic uncertainty; inflation (including rising energy prices, interest rates, wages and other escalators) and policy reactions thereto (including actions by central banks); disruptions in the supply of materials and components used in the production of our products; the war in Ukraine and related events, and the COVID-19 pandemic, variants thereof, governmental reaction thereto, and related economic disruptions (including, among other factors, operations and supply disruptions and labor shortages). Our backlog of railcar units and other orders not included in backlog are not necessarily indicative of future results of operations. Certain orders in backlog are subject to customary documentation which may not occur. There may be other factors that may cause our actual results to differ materially from the forward-looking statements, including the risks, uncertainties and factors described in more detail in the Company’s filings with the SEC, including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s most recently filed Annual Report on Form 10-K. Except as otherwise required by law, the Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s opinions only as of the date hereof.
Adjusted Financial Metric Definitions
Adjusted EBITDA, Adjusted net earnings attributable to Greenbrier and Adjusted diluted earnings per share (EPS) are not financial measures under generally accepted accounting principles (GAAP). These metrics are performance measurement tools used by rail supply companies and Greenbrier. You should not consider these metrics in isolation or as a substitute for other financial statement data determined in accordance with GAAP. In addition, because these metrics are not a measure of financial performance under GAAP and are susceptible to varying calculations, the measures presented may differ from and may not be comparable to similarly titled measures used by other companies.
We define Adjusted EBITDA as Net earnings (loss) before Interest and foreign exchange, Income tax benefit (expense), Depreciation and amortization and the impact associated with items we do not believe are indicative of our core business or which affect comparability. We believe the presentation of Adjusted EBITDA provides useful information as it excludes the impact of financing, foreign exchange, income taxes and the accounting effects of capital spending and other items. These items may vary for different companies for reasons unrelated to the overall operating performance of a company’s core business. We believe this assists in comparing our performance across reporting periods.
Adjusted net earnings attributable to Greenbrier and Adjusted diluted EPS excludes the impact associated with items we do not believe are indicative of our core business or which affect comparability. We believe this assists in comparing our performance across reporting periods*.*
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