PR Newswire
LAKE OSWEGO, Ore., June 29, 2023
GAAP EPS of $0.64 includes $13 million loss related to sale and exit of Gunderson Marine
Adjusted EPS of $1.02
Increases dividend by 11% to $0.30 per share
LAKE OSWEGO, Ore., June 29, 2023 /PRNewswire/ -- 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 third fiscal quarter ended May 31, 2023.
Third Quarter Highlights
- New railcar orders for 4,600 units valued at $650 million and deliveries of 6,600 units; subsequent to the end of the quarter, received orders for 7,900 units valued at $975 million.
- New railcar backlog of 23,400 units with an estimated value of $2.9 billion as of May 31, 2023; excludes orders received subsequent to the end of the quarter and railcar conversion backlog of 1,000 units.
- Strong quarter end liquidity of $665 million, including $321 million in cash and $344 million of available borrowing capacity.
- Net earnings of $27 million and Net earnings attributable to Greenbrier of $21 million, or $0.64 per diluted share. Results include $13 million ($0.38 per share), net of tax, of Gunderson loss on sale and exit related costs.
- Adjusted net earnings attributable to Greenbrier of $34 million or $1.02 per diluted share.
- Revenue of $1.0 billion, operating cash flow of $98 million and Adjusted EBITDA of $97 million.
- Repurchased 1.2 million shares of stock for $32 million; $54 million remaining under current share repurchase program.
- Board increases quarterly dividend by 11% to $0.30 per share, payable on August 8, 2023 to shareholders of record as of July 18, 2023. Represents Greenbrier's 37th consecutive quarterly dividend.
"Greenbrier's performance in the third quarter reflects continued operating momentum and strong commercial activity. Our results demonstrated the early impact of operational initiatives described during our Investor Day in April. In particular, certain manufacturing efficiencies were achieved ahead of plan, and we expect further improvement," said Lorie L. Tekorius, CEO and President. "Our new railcar backlog provides strong revenue visibility and further confidence as we execute our strategic plan. We are excited as we embark on our multi-year strategy, including a substantial lease fleet investment. This will maximize Greenbrier's financial performance during periods of strong market demand and stabilize performance at higher levels when demand is less favorable."
Business Update & Outlook
Greenbrier held its inaugural Investor Day on April 12, 2023. During the Investor Day, Greenbrier unveiled long-term financial targets, including:
- Growth of +100% in annual recurring revenue from its Leasing & Management Services segment;
- Aggregate gross margin in the mid-teens by fiscal 2026; and
- Return on invested capital of between 10% and 14% by fiscal 2026.
Greenbrier will provide updates against the targets as part of the Q4 and Fiscal 2023 report in October 2023. Based on current trends and production schedules, Greenbrier is updating guidance for fiscal 2023:
- Deliveries of 25,000 – 26,000 units including approximately 1,000 units in Greenbrier-Maxion (Brazil)
- Revenue of $3.8 – $3.9 billion
- Capital expenditures of $280 million in Leasing & Management Services, $90 million in Manufacturing and $15 million in Maintenance Services
- Proceeds of equipment sales are $76 million
- Consolidated gross margin % in the low double-digits is unchanged.
Financial Summary
Q3 FY23 | Q2 FY23 | Sequential Comparison – Main Drivers | |
Revenue | $1.0B | $1.1B | Timing of syndication activity partially offset by improved volumes and pricing in Maintenance Services |
Gross margin | $128.1M | $116.8M | Improved operating efficiencies in Manufacturing and higher pricing and volumes in Maintenance Services |
Gross margin % | 12.3 % | 10.4 % | |
Selling and administrative | $63.3M | $59.0M | Increased employee related costs due to higher incentive compensation expense as a result of increased profitability |
Net gain on disposition of equipment | $2.3M | $9.6M | Timing of gains from ongoing fleet optimization |
Adjusted EBITDA | $96.9M | $97.9M | See reconciliation at conclusion of Supplemental Information |
Net earnings attributable to noncontrolling interest | ($5.4M) | ($3.7M) | Partners' share of consolidated JV's operating results including timing of syndication activity |
Adjusted net earnings attributable to Greenbrier | $34.0M(1) | $33.8M(2) | |
Adjusted diluted EPS | $1.02(1) | $0.99(2) |
(1) | Excludes $12.7 million ($0.38 per share), net of tax, of Gunderson loss on sale and exit related costs. Reconciliations for Adjusted metrics can be found at the conclusion of Supplemental Information. |
(2) | Excludes $0.7 million ($0.02 per share), net of tax, of Gunderson exit related costs. Reconciliations for Adjusted metrics can be found at the conclusion of Supplemental Information. |
Segment Summary
Q3 FY23 | Q2 FY23 | Sequential Comparison – Main Drivers | |
Manufacturing | |||
Revenue | $870.2M | $968.6M | Timing of syndication activity resulting in fewer syndicated deliveries |
Gross margin | $83.7M | $67.4M | Improved operating efficiencies |
Gross margin % | 9.6 % | 7.0 % | |
Earnings from operations | $44.1M | $46.6M | |
Operating margin %(1) | 5.1 % | 4.8 % | |
Deliveries (2) | 6,400 | 7,200 | Timing of syndication activity |
Maintenance Services | |||
Revenue | $122.9M | $98.0M | Improved pricing and volumes |
Gross margin % | 10.7 % | 8.6 % | Improved pricing, volumes and operating efficiencies |
Earnings from operations | $11.0M | $6.8M | |
Operating margin % (1) | 9.0 % | 6.9 % | |
Leasing & Management Services | |||
Revenue | $45.0M | $55.4M | Timing of syndication activity |
Gross margin % | 69.6 % | 74.0 % | |
Earnings from operations | $25.9M | $40.7M | More normalized operating margin due to timing of syndication activity and gains from ongoing fleet optimization |
Operating margin % (1) | 57.6 % | 73.5 % | |
Fleet utilization | 98.6 % | 98.7 % | |
(1) | See supplemental segment information in Supplemental Information additional detail. |
(2) | Excludes Brazil deliveries which are not consolidated into Manufacturing revenue and margins. |
Conference Call
Greenbrier will host a teleconference to discuss its third quarter 2023 results. In conjunction with this news release, Greenbrier has posted a supplemental earnings presentation to our website. Teleconference details are as follows:
- June 29, 2023
- 8:00 a.m. Pacific Daylight Time
- Phone: 1-888-317-6003 (Toll Free) 1-412-317-6061 (International), Entry Number "6855329"
- Real-time Audio Access: ("Newsroom" at http://www.gbrx.com)
- Please access the site 10-15 minutes prior to the start time.
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 12,500 railcars. Greenbrier manages 409,000 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.
THE GREENBRIER COMPANIES, INC. | |||||
CONSOLIDATED BALANCE SHEETS | |||||
(In millions, unaudited) | |||||
May 31, 2023 | February 28, 2023 | November 30, | August 31, 2022 | May 31, 2022 | |
Assets | |||||
Cash and cash equivalents | $ 321.4 | $ 379.9 | $ 263.3 | $ 543.0 | $ 449.7 |
Restricted cash | 20.1 | 19.7 | 17.2 | 16.1 | 16.1 |
Accounts receivable, net | 533.6 | 571.5 | 495.6 | 501.2 | 464.8 |
Income tax receivable | 29.8 | 22.4 | 28.9 | 39.8 | 129.4 |
Inventories | 888.0 | 910.6 | 874.9 | 815.3 | 781.7 |
Leased railcars for syndication | 119.4 | 102.5 | 272.5 | 111.1 | 142.9 |
Equipment on operating leases, net | 941.0 | 891.8 | 836.2 | 770.9 | 676.1 |
Property, plant and equipment, net | 600.4 | 618.4 | 617.6 | 645.2 | 642.7 |
Investment in unconsolidated affiliates | 86.4 | 83.4 | 94.2 | 92.5 | 96.2 |
Intangibles and other assets, net | 253.3 | 224.0 | 189.0 | 189.1 | 177.8 |
Goodwill | 128.3 | 128.3 | 127.7 | 127.3 | 128.7 |
$ 3,921.7 | $ 3,952.5 | $ 3,817.1 | $ 3,851.5 | $ 3,706.1 | |
Liabilities and Equity | |||||
Revolving notes | $ 280.0 | $ 310.3 | $ 290.5 | $ 296.6 | $ 303.3 |
Accounts payable and accrued liabilities | 741.6 | 722.6 | 676.5 | 725.1 | 639.0 |
Deferred income taxes | 88.3 | 70.2 | 49.8 | 68.6 | 72.9 |
Deferred revenue | 56.6 | 73.0 | 53.2 | 35.3 | 33.3 |
Notes payable, net | 1,320.3 | 1,327.0 | 1,301.5 | 1,269.1 | 1,202.6 |
Contingently redeemable noncontrolling interest | 54.1 | 27.5 | 27.7 | 27.7 | 27.8 |
Total equity – Greenbrier | 1,232.7 | 1,277.3 | 1,265.8 | 1,276.9 | 1,270.4 |
Noncontrolling interest | 148.1 | 144.6 | 152.1 | 152.2 | 156.8 |
Total equity | 1,380.8 | 1,421.9 | 1,417.9 | 1,429.1 | 1,427.2 |
$ 3,921.7 | $ 3,952.5 | $ 3,817.1 | $ 3,851.5 | $ 3,706.1 | |
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 May 31, | Nine Months Ended May 31, | |||||||
2023 | 2022 | 2023 | 2022 | |||||
Revenue | ||||||||
Manufacturing | $ 870.2 | $ 650.9 | $ 2,485.3 | $ 1,659.1 | ||||
Maintenance Services | 122.9 | 101.5 | 306.4 | 260.5 | ||||
Leasing & Management Services | 45.0 | 41.1 | 134.9 | 107.4 | ||||
1,038.1 | 793.5 | 2,926.6 | 2,027.0 | |||||
Cost of revenue | ||||||||
Manufacturing | 786.5 | 611.3 | 2,292.2 | 1,567.9 | ||||
Maintenance Services | 109.8 | 91.1 | 279.0 | 244.0 | ||||
Leasing & Management Services | 13.7 | 14.8 | 41.0 | 36.4 | ||||
910.0 | 717.2 | 2,612.2 | 1,848.3 | |||||
Margin | 128.1 | 76.3 | 314.4 | 178.7 | ||||
Selling and administrative expense | 63.3 | 57.4 | 175.7 | 156.4 | ||||
Net gain on disposition of equipment | (2.3) | (0.7) | (15.2) | (34.3) | ||||
Asset impairment, disposal, and exit costs | 16.4 | - | 40.6 | - | ||||
Earnings from operations | 50.7 | 19.6 | 113.3 | 56.6 | ||||
Other costs | ||||||||
Interest and foreign exchange | 22.8 | 14.9 | 64.0 | 39.3 | ||||
Earnings before income taxes and earnings from unconsolidated affiliates | 27.9 | 4.7 | 49.3 | 17.3 | ||||
Income tax expense | (3.6) | (1.1) | (11.7) | (2.9) | ||||
Earnings before earnings from unconsolidated affiliates | 24.3 | 3.6 | 37.6 | 14.4 | ||||
Earnings from unconsolidated affiliates | 2.4 | 4.0 | 8.6 | 10.0 | ||||
Net earnings | 26.7 | 7.6 | 46.2 | 24.4 | ||||
Net (earnings) loss attributable to noncontrolling interest | (5.4) | (4.5) | (8.5) | 2.3 | ||||
Net earnings attributable to Greenbrier | $ 21.3 | $ 3.1 | $ 37.7 | $ 26.7 | ||||
Basic earnings per common share: | $ 0.67 | $ 0.10 | $ 1.17 | $ 0.82 | ||||
Diluted earnings per common share: | $ 0.64 | $ 0.09 | $ 1.13 | $ 0.79 | ||||
Weighted average common shares: | ||||||||
Basic | 31,757 | 32,588 | 32,346 | 32,560 | ||||
Diluted | 33,571 | 33,661 | 33,344 | 33,626 | ||||
Dividends declared per common share | $ 0.27 | $ 0.27 | $ 0.81 | $ 0.81 | ||||
THE GREENBRIER COMPANIES, INC. | ||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
(In millions, unaudited) | ||||
Nine Months Ended | ||||
2023 | 2022 | |||
Cash flows from operating activities | ||||
Net earnings | $ 46.2 | $ 24.4 | ||
Adjustments to reconcile net earnings to net cash used in operating activities: | ||||
Deferred income taxes | (18.4) | 16.9 | ||
