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

Thursday, April 04, 2013

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

06:00 EDT Thursday, April 04, 2013

~ Targeting minimum 200 basis points of margin enhancement and $100 million of capital efficiency improvements by end of FY 2014
~~ Diverse backlog grows by 2,000 units in quarter with orders for an additional 3,700 units received after quarter end

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 margin

11.4%

11.5%

Down 10 bps due to lower margins in Wheel Services, Refurbishment & Parts and Leasing & Services segments, partially offset by higher margins in Manufacturing

Selling and

Administrative expense

$24.9M

$26.1M

Down due to lower employee related costs

Gain on disposition

of equipment

$3.1M

$1.4M

Timing of sales fluctuates and is opportunistic; typically ranges from $1.0M - $4.0M per quarter

Adjusted EBITDA

$36.2M

$31.8M

Up 13.8% due to higher gains on equipment dispositions, and lower S&A expense

Effective tax rate

27.8%

26.7%

32% estimated annualized rate; difference is due to certain discrete tax items

Net earnings

$13.8M

$10.4M

Up due to higher EBITDA and lower earnings attributable to our GIMSA JV partner's Noncontrolling interest

Diluted EPS ? GAAP

$0.45

$0.35

"If converted" calculation

Economic EPS

$0.49

$0.37

Excludes "if converted" impact of 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 margin

10.7%

9.4%

Up 130 bps due to improved product 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 margin

7.9%

9.5%

Down 160 bps due to increased 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 margin

47.0%

57.4%

Down due to lower earnings on certain railcars, and lower interim rents.  Prior period also includes reduction in certain maintenance accruals.

  Lease fleet utilization

97.5%

95.2%

Reflects additional units placed into service

 

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,

2013

February 29,

 2012

February 28,

2013

February 29,

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 

  (loss) from unconsolidated affiliates

20,087

22,531

37,273

44,026

Income tax expense

(5,590)

(5,348)

(10,176)

(13,144)

Earnings before earnings (loss) from

  unconsolidated affiliates

14,497

17,183

27,097

30,882

Earnings (loss) from unconsolidated affiliates

(105)

72

(145)

(300)

Net earnings

14,392

17,255

26,952

30,582

Net (earnings) loss attributable to

    noncontrolling interest

(553)

415

(2,686)

1,604

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

   loss from unconsolidated affiliates

17,187

20,087

Income tax expense

(4,586)

(5,590)

Loss from unconsolidated affiliates

(40)

(105)

Net earnings

12,561

14,392

Net earnings attributable to

   noncontrolling interest

(2,134)

(553)

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

 

(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.

 

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 

   (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

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

(In thousands, unaudited)

Three Months Ended

February 28,

2013

November 30,

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,

2013

November 30,

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,

 2013

November 30,

 2012

Net earnings attributable to Greenbrier

$      13,839

$    10,427

Add back:

Interest and debt issuance costs on the

   2018 Convertible notes, net of tax

1,416

1,430

Earnings before interest and debt issuance                   

   costs on convertible notes

$      15,255

$    11,857

Weighted average diluted common shares outstanding

34,044

33,991

Diluted earnings per share (1)

$          0.45

$         0.35

 

(1)

Diluted earnings per share was calculated 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 arereconciled as follows:

Three Months Ended

February 28,

2013

November 30,

2012

Weighted average basic common shares outstanding

27,210

27,144

Dilutive effect of warrants

789

802

Weighted average economic diluted

common shares outstanding

27,999

27,946

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)

For further information: Mark Rittenbaum, 503-684-7000

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