Greenbrier Reports Fiscal Fourth Quarter Financial Results

~ Posts EPS of $0.26; Backlog of 10,700 units valued at $1.20 billion

~~ Record fiscal year revenue and earnings

01 Nov, 2012, 06:00 ET from The Greenbrier Companies, Inc. (GBX)

LAKE OSWEGO, Ore., Nov. 1, 2012 /PRNewswire/ -- The Greenbrier Companies (NYSE: GBX) today reported results for its fiscal fourth quarter and fiscal year ended August 31, 2012.

Fourth Quarter and Fiscal Year Highlights                                                                            
  • Full year revenue reached $1.81 billion, a 45% increase over last year and a new record for the company.
  • Record net earnings attributable to Greenbrier ("net earnings") for the year of $58.7 million was a nine-fold increase over prior year.
  • Net earnings for the fourth quarter were $7.4 million, or $.26 per diluted share, on revenue of $443.5 million.
  • New railcar deliveries for 2012 were a record 15,000 units, compared to 9,400 units in 2011, and 2,500 units in 2010.
  • During the fourth quarter, the Company received orders for 2,900 new railcars.
  • New railcar manufacturing backlog as of August 31, 2012 was 10,700 units with an estimated value of $1.20 billion (an average unit sale price of $112,000), compared to 11,500 units with an estimated value of $1.14 billion (an average unit sale price of $99,000) as of May 31, 2012.  Based on current production plans, approximately 7,300 units in August 31, 2012 backlog are scheduled for delivery in fiscal 2013.  The balance are scheduled for delivery in fiscal 2014.
  • Marine backlog totaled $25 million as of August 31, 2012; additionally we were awarded a letter of intent for 15 barges valued at $60 million subject to significant permitting and other conditions.
  • Operating cash flow was positive $116.1 million for 2012, compared to negative $34.3 million in 2011.

William A. Furman, president and chief executive officer, said, "In fiscal 2012, our manufacturing operations responded well to strong demand for new railcars and our leasing operation significantly enhanced its syndication and management services model, leading to record revenue and earnings for the full year.  While we realized positive momentum during the year in both of these operations, our fourth quarter earnings were well below our expectations.  This was principally due to lower than anticipated new railcar deliveries, a high tax rate for the quarter, and certain employee related costs." 

Mark Rittenbaum, chief financial officer, noted, "New railcar deliveries to two customers totaling 560 railcars, with an aggregate value of nearly $50 million that we expected to occur by year-end, were postponed due to delays in a lease syndication transaction and one customer's acceptance of certain railcars.  All of these deliveries occurred subsequent to quarter end.  Additionally, our actual tax rate for the quarter of 51% was significantly higher than our expected tax rate of around 34%.  This difference was primarily due to a change in our geographic mix of earnings.  Also, we incurred certain severance costs of nearly $1 million after-tax during the quarter. Finally, gain on disposition of equipment was only $.1 million pre-tax for the quarter, whereas the average gain for the prior three quarters was nearly $3 million per quarter."

Furman concluded, "In fiscal 2013, we expect less business visibility than in fiscal 2012, as a result of global economic and geopolitical uncertainty.  We will focus on four key areas beyond basic execution of our operating plan.  First, we will expand capacity in higher margin railcar types, such as tank cars, to respond to market demand.  Second, we will continue to expand our product offerings in the businesses that are related to the oil, gas and chemical industries and in other high-growth areas.  Third, we will continue to improve our working capital position, increase free cash flow and pay down debt.  Lastly, we will continue to seek diversification and growth opportunities in the rail freight marketplace, especially in leasing."

Financial Summary

Q4 FY12

Q3 FY12

Sequential Comparison – Main Drivers

Revenue

$443.5M

$507.8M

Down, due to lower new railcar deliveries with a higher average sales price

Gross margin

12.3%

12.2%

Up 10 bps on operational efficiencies

Selling and

administrative

$27.6M

$28.8M

Lower incentive compensation expense associated with lower earnings

Gain on disposition

of equipment

$0.07M

$2.6M

Timing of sales fluctuates and is opportunistic

Adjusted EBITDA

$36.0 M

$44.6M

Down 19.3% due to lower revenue

Effective tax rate

51%

30%

Change in geographic mix of earnings

Net earnings

$7.4M

$19.1M

Down 61% on lower revenue and higher tax rate

Diluted EPS – GAAP

$0.26

$0.61

"If converted" calculation

Economic EPS

$0.27

$0.69

Excludes "if converted" impact of out-of-the-money bonds due 2018

Segment Summary

Q4 FY12

Q3 FY12

Sequential Comparison – Main Drivers

Manufacturing:

   Revenue

 

   Gross margin

   Deliveries

 

 

$306.2M

 

11.8%

3,500

 

$364.9M

 

10.8%

4,500

Down 16.1% due to lower deliveries with higher average sales price

Up 100 bps due to operational efficiencies

Down due to timing of lease syndications and customer acceptance (560 cars) and change in mix

Wheel Services, Refurbishment & Parts

   Revenue

   Gross margin

 

 

$119.1M

8.1%

 

 

$125.1M

10.8%

Down 4.8% due to lower wheel volumes

Down 270 bps due to lower wheel volumes, sales mix and repair labor inefficiencies

Leasing & Services:

   Revenue

   Gross margin

   Lease Fleet Utilization

 

$18.3M

47.6%

93.5%

 

$17.7M

50.2%

95.5%

Up 3.4% due to increased volume of leased cars

Down 260 bps due to fewer railcars held for syndication resulting in less interim rent

Timing of lease commencement on certain fleet additions

Business Outlook

Given global economic and geopolitical uncertainty, Greenbrier currently has less business visibility and more variability now than it had in fiscal 2012.  Based on current business trends and industry forecasts, management currently anticipates the Company's new railcar deliveries in 2013 to be between 11,500 – 13,000 units.  Approximately 7,300 of these units are in firm backlog as of August 31, 2012, with the balance of deliveries expected to come from additional orders received during the year.  While the range of deliveries is below the 15,000 deliveries for fiscal 2012, the Company anticipates the product mix will include railcars with higher average selling prices.  Currently, management anticipates that at the upper end of the delivery guidance range, 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 fourth quarter results.  In conjunction with this news release, Greenbrier has posted a supplemental earnings presentation to our website.  Teleconference details are as follows:

  • November 1, 2012
  • 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 December 2, 2012 at 1-402-280-9982.

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 three 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 11,000 railcars, and performs management services for approximately 219,000 railcars.

"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995:  This release may contain forward-looking statements, including statements regarding expected new railcar production volumes and schedules, expected customer demand for the Company's products and services, plans to increase manufacturing capacity, new railcar delivery volumes and schedules, growth in demand for the Company's railcar services and parts business, and the Company's future financial performance. Greenbrier uses words such as "anticipates," "believes,"  "forecast," "potential," "contemplates," "expects," "intends," "plans," "seeks," "estimates," "could," "would," "will," "may," "can," 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, 2011, and our other reports on file with the Securities and Exchange Commission.  Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's opinions only as of the date hereof. Except as otherwise required by law, we do not assume any obligation to update any forward-looking statements.

Adjusted EBITDA is not a financial measure under generally accepted accounting principles (GAAP). We define Adjusted EBITDA as earnings attributable to Greenbrier before loss on extinguishment of debt, 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)

August 31,

May 31,

February 29, 

November 30,

August 31,

2012

2012

2012

2011

2011

Assets

   Cash and cash equivalents

$      53,571

$      44,915

$      40,666

$      20,855

$     50,222

   Restricted cash

6,277

6,089

2,249

2,151

2,113

   Accounts receivable, net 

146,326

172,086

177,544

149,559

188,443

   Inventories

316,741

346,122

365,811

354,045

323,512

   Leased railcars for syndication

97,798

66,776

79,681

68,029

30,690

   Equipment on operating leases, net

362,968

334,872

322,811

323,878

321,141

   Property, plant and equipment, net

182,429

172,729

165,700

159,671

161,200

   Goodwill

137,066

137,066

137,066

137,066

137,066

   Intangibles and other assets, net

81,368

84,693

85,155

84,187

87,268

$ 1,384,544

$ 1,365,348

$ 1,376,683

$ 1,299,441

$ 1,301,655

Liabilities and Equity

   Revolving notes

$      60,755

$      71,430

$    101,446

$      80,679

$      90,339

   Accounts payable and accrued liabilities

329,508

323,977

340,328

311,519

316,536

   Deferred income taxes

95,363

88,514

89,623

87,395

83,839

   Deferred revenue

17,194

17,872

1,230

5,724

5,900

   Notes payable

428,079

428,028

428,454

431,184

429,140

   Total equity Greenbrier

431,777

418,161

399,788

368,528

361,573

   Noncontrolling interest

21,868

17,366

15,814

14,412

14,328

   Total equity

453,645

435,527

415,602

382,940

375,901

$ 1,384,544

$ 1,365,348

$ 1,376,683

$ 1,299,441

$ 1,301,655

 

THE GREENBRIER COMPANIES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)

Years Ended August 31,

2012

2011

2010

Revenue

Manufacturing

$  1,253,964

$     721,102

$    295,566

Wheel Services, Refurbishment & Parts

481,865

452,865

388,434

Leasing & Services

71,887

69,323

72,280

1,807,716

1,243,290

756,280

Cost of revenue

Manufacturing

1,122,384

661,127

268,395

Wheel Services, Refurbishment & Parts

433,541

405,449

344,522

Leasing & Services

37,371

37,183

41,365

1,593,296

1,103,759

654,282

Margin

214,420

139,531

101,998

Selling and administrative

104,596

80,326

69,931

Gain on disposition of equipment

(8,964)

(8,369)

(8,170)

Special items

-

-

(11,870)

Earnings from operations

118,788

67,574

52,107

Other costs

   Interest and foreign exchange

24,809

36,992

45,204

   Loss (gain) on extinguishment of debt

-

15,657

(2,070)

Earnings before income tax and loss from

   unconsolidated affiliates

93,979

14,925

8,973

Income tax benefit (expense)

(32,393)

(3,564)

959

Earnings before loss from unconsolidated affiliates

61,586

11,361

9,932

Loss from unconsolidated affiliates

(416)

(2,974)

(1,601)

Net earnings

61,170

8,387

8,331

Net earnings attributable to noncontrolling interest

(2,462)

(1,921)

(4,054)

Net earnings attributable to Greenbrier

$      58,708

$        6,466

$        4,277

Basic earnings per common share:

$           2.21

$           0.27

$          0.23

Diluted earnings per common share:

$           1.91

$           0.24

$          0.21

Weighted average common shares:

Basic

26,572

24,100

18,585

Diluted

33,718

26,501

20,213

 

THE GREENBRIER COMPANIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Years Ended August 31,

2012

2011

2010

Cash flows from operating activities:

    Net earnings

$      61,170

$        8,387

$      8,331

    Adjustments to reconcile net earnings to net cash

      (used in) provided by operating activities:

      Deferred income taxes

11,617

2,399

15,052

      Depreciation and amortization

42,371

38,293

37,511

      Gain on sales of leased equipment

(8,964)

(5,121)

(6,543)

      Accretion of debt discount

3,259

6,583

8,149

      Special items

-

-

(11,870)

      Loss (gain) on extinguishment of debt (non-cash portion)

-

8,453

(2,070)

      Other

13,662

6,762

4,237

      Decrease (increase) in assets:

          Accounts receivable

37,763

(96,552)

22,430

          Inventories

3,709

(116,866)

(45,212)

          Leased railcars for syndication

(76,071)

(20,839)

759

          Other

-

8,863

6,455

    Increase (decrease) in liabilities:

          Accounts payable and accrued liabilities

16,236

130,673

12,777

          Deferred revenue

11,304

(5,287)

(7,445)

    Net cash (used in) provided by operating activities

116,056

(34,252)

42,561

Cash flows from investing activities:

    Proceeds from sales of equipment

33,560

18,730

22,978

    Investment in and advances to unconsolidated affiliates

(506)

(2,330)

(927)

    Contract placement fee

-

-

(6,050)

    Decrease (increase) in restricted cash

(4,164

412

(1,442

    Capital expenditures

(117,885)

(84,302)

(38,989)

    Other

48

(1,774

260

    Net cash used in investing activities

(88,947)

(69,264)

(24,170)

Cash flows from financing activities:

    Net changes in revolving notes with maturities of 90 days or less

(57,302)

71,625

(11,934)

    Proceeds from revolving notes with maturities longer than 90 days

63,773

25,159

5,698

    Repayments of revolving notes with maturities longer than 90 days

(33,934)

(10,000)

(5,698)

    Proceeds from issuance of notes payable

2,750

231,250

2,149

    Debt issuance costs

-

(11,469)

(109)

    Repayments of notes payable

(7,070)

(311,360)

(38,267)

    Proceeds from equity offering

-

63,180

56,250

    Expenses from equity offering

-

(420)

(3,542)

    Excess tax benefit from restricted stock awards

1,627

-

-

    Investment by joint venture partner

1,362

-

-

    Other

-

26

29

    Net cash provided by (used in) financing activities

(28,794)

57,991

4,576

    Effect of exchange rate changes

5,034

(3,117)

(290)

Increase (decrease) in cash and cash equivalents

3,349

(48,642)

22,677

Cash and cash equivalents

Beginning of period

50,222

98,864

76,187

End of period

$      53,571

$      50,222

$    98,864

 

THE GREENBRIER COMPANIES, INC.

SUPPLEMENTAL INFORMATION

Quarterly Results of Operations (Unaudited)

(In thousands, except per share amounts)

Operating results by quarter for 2012 and 2011 are as follows:

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

23,235

24,979

28,784

27,598

104,596

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

   (loss) from unconsolidated affiliates

21,497

22,531

29,179

20,772

93,979

Income tax expense

(7,797)

(5,348)

(8,655)

(10,593)

(32,393)

Earnings (loss) from unconsolidated

  affiliates

(372)

72

201

(317)

(416)

Net earnings

13,328

17,255

20,725

9,862

61,170

Net (earnings) loss attributable to

   Noncontrolling interest

1,189

415

(1,608)

(2,458)

(2,462)

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

(1)

Quarterly amounts do not total to the year to date amount as each period is calculated 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

Quarterly Results of Operations (Unaudited)

(In thousands, except per share amounts)

First

Second

Third

Fourth

Total

2011

Revenue

   Manufacturing

$     85,440

$   156,621

$   173,487

$   305,554

$   721,102

   Wheel Services, Refurbishment & Parts

95,268

112,015

126,317

119,265

452,865

   Leasing & Services

18,226

15,704

17,476

17,917

69,323

198,934

284,340

317,280

442,736

1,243,290

Cost of revenue

   Manufacturing

79,747

147,552

158,674

275,154

661,127

   Wheel Services, Refurbishment & Parts

86,411

101,413

111,202

106,423

405,449

   Leasing & Services

9,120

8,725

9,254

10,084

37,183

175,278

257,690

279,130

391,661

1,103,759

Margin

23,656

26,650

38,150

51,075

139,531

Selling and administrative

17,938

17,693

22,580

22,115

80,326

Gain on disposition of equipment

(2,510)

(1,961)

(1,678)

(2,220)

(8,369)

Earnings from operations

8,228

10,918

17,248

31,180

67,574

Other costs

   Interest and foreign exchange

10,304

10,536

9,807

6,345

36,992

   Loss on extinguishment of debt

-

-

10,007

5,650

15,657

Earnings (loss) before income tax and

  loss from unconsolidated affiliates

(2,076)

382

(2,566)

19,185

14,925

Income tax benefit (expense)

611

(100)

301

(4,376)

(3,564)

Loss from unconsolidated affiliates

(587)

(575)

(539)

(1,273)

(2,974)

Net earnings (loss)

(2,052)

(293)

(2,804)

13,536

8,387

Net earnings attributable to               

   Noncontrolling interest

(252)

(257)

(510)

(902)

(1,921)

Net earnings (loss) attributable to Greenbrier

$      (2,304)

$        (550)

$      (3,314)

$     12,634

$       6,466

Basic earnings (loss) per common share: (1)

$        (0.11)

$       (0.02)

$        (0.14)

$         0.50

$         0.27

Diluted earnings (loss)  per common share: (2)

$        (0.11)

$       (0.02)

$        (0.14)

$         0.42

$         0.24

(1)

Quarterly amounts do not total to the year to date amount as each period is calculated discretely. Unvested restricted stock awards are excluded from the per share calculation for the first, second and third quarters due to a net loss in each of those periods.2010 includes income of $11.

(2)

Quarterly amounts do not total to the year to date amount as each period is calculated discretely. The dilutive effect of warrants is excluded from per share calculations for the first, second and third quarters due to net losses for those periods. The fourth quarter 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

August 31,

Year Ended

August 31,

2012

2011

2012

2011

Net earnings attributable to Greenbrier

$       7,404

$       12,634

$      58,708

$        6,466

Loss on extinguishment of debt

-

5,650

-

15,657

Interest and foreign exchange

6,236

6,345

24,809

36,992

Income tax expense

10,593

4,376

32,393

3,564

Depreciation and amortization

11,768

10,119

42,371

38,293

Adjusted EBITDA

$     36,001

$       39,124

$     158,281

$     100,972

(1)

Adjusted EBITDA is not a financial measure under generally accepted accounting principles (GAAP). We define Adjusted EBITDA as earnings attributable to Greenbrier before loss on extinguishment of debt, 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

August 31, 2012

Year Ended

August 31, 2012

Backlog Activity (units)

Beginning backlog

11,500

15,400

Orders received

2,900

11,200

Production held as Leased railcars for syndication

(300)

(2,700)

Production sold directly to third parties

(3,400)

(13,200)

Ending backlog

10,700

10,700

Delivery Information (units)

Production sold directly to third parties

3,400

13,200

Sales of Leased railcars for syndication

100

1,800

Total deliveries

3,500

15,000

 

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:

Three Months Ended

August 31,

Year Ended

August 31,

2012

2011

2012

2011

Weighted average basic common shares outstanding (1)

27,148

25,177

26,572

24,100

Dilutive effect of warrants

756

2,340

1,101

2,401

Dilutive effect of convertible notes (2)

6,045

6,045

6,045

-

Weighted average diluted common shares outstanding

33,949

33,562

33,718

26,501

(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)

In 2012 and for the three months ended August 31, 2011, the shares underlying the dilutive effect of the 2018 Convertible notes are included as they were considered dilutive under the "if converted" method. For the year ended August 31, 2011, the dilutive effect of the shares underlying the 2018 Convertible Notes was excluded from the share calculation as it was the less dilutive of two approaches described below. The dilutive effect of the 2026 Convertible notes was excluded from the share calculations as the stock price for each year presented was less than the initial conversion price of $48.05 and is therefore considered anti-dilutive.

Diluted 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 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

August 31,

Year Ended

August 31,

2012

2011

2012

2011

Net earnings attributable to Greenbrier

$       7,404

$    12,634

$    58,708

$        6,466

Add back:

Interest and debt issuance costs on the

   2018 Convertible notes, net of tax

1,416

1,376

5,677

n/a

Earnings before interest and debt issuance      

  costs on convertible notes

$       8,820

$    14,010

$    64,385

n/a

Weighted average diluted common shares outstanding

33,949

33,562

33,718

26,501

Diluted earnings per share(1)

$      0.26  

$    0.42

$    1.91

$      0.24

(1)

Diluted earnings per share was calculated as follows:

Earnings before interest and debt issuance costs on convertible notes or Net earnings attributable to Greenbrier

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

Year Ended

August 31,

2012

May 31,

2012

August 31,

2012

Weighted average basic common shares outstanding

27,148

26,981

26,572

Dilutive effect of warrants

756

836

1,101

Weighted average economic diluted common shares outstanding

27,904

27,817

27,673

Net earnings attributable to Greenbrier

$         7,404

$      19,117

$      58,708

Economic earnings per share

$           0.27

$          0.69

$          2.12

(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)



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