LAKE OSWEGO, Ore., April 7, 2020 /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 second fiscal quarter ended  February 29, 2020.

Second Quarter Highlights

• Base liquidity of $620 million consisting of cash of $170 million and $450 million available under committed credit facilities with high quality lenders. Greenbrier is targeting total liquidity of $1 billion.
• Greenbrier's manufacturing and service sites continue operations as "Essential Business" under directives issued by the U.S. Department of Homeland Security (DHS) and other government authorities.
• Orders for 8,500 diversified railcars were received during the quarter, with over 50% originating from international sources. New railcar backlog increased to 30,800 units with an estimated value of $3.2 billion as of February 29, 2020.
• Net earnings attributable to Greenbrier for the quarter were $13.6 million, or $0.41 per diluted share, on revenue of $623.8 million. Net earnings include a mutually beneficial contract modification removing railcars from backlog that would have been produced in the second half of fiscal 2020 in exchange for $9.2 million, after tax. This modification strengthens the quality and amount of Greenbrier's backlog and improves cash on hand.
• Adjusted net earnings attributable to Greenbrier for the quarter were $15.3 million, or $0.46 per diluted share, excluding $1.7 million, after tax, ($0.05 per share) of integration related expenses from the American Railcar Industries (ARI) acquisition.
• Adjusted EBITDA for the quarter was $71.6 million, or 11.5% of revenue.
• Board declares a quarterly dividend of $0.27 per share, payable on May 13, 2020 to shareholders as of April 22, 2020.

William A. Furman, Chairman & CEO commented, "Greenbrier is focused on two primary goals: protecting the safety and health of employees and preserving the economic well-being of our enterprise in this challenging environment. We are executing on the latter by increasing liquidity and sizing the organization properly in the current business environment."

Additional Comments from the CEO
Market conditions drove actions in the first half to size Greenbrier's manufacturing footprint for lower levels of railcar demand, with reductions of 3,500 global employees to scale production capacity. Manufacturing workforce reductions were primarily in Mexico. Amid the uncertain and rapidly changing impacts on the global economy from the COVID-19 pandemic, Greenbrier is suspending its previously issued guidance for fiscal 2020.  Greenbrier has initiated a range of proactive responses to address conditions in the rail equipment industry and the impact of the pandemic. The Company is eliminating all non-essential capital expenditures and is aggressively reducing overhead and SG&A expense. Greenbrier has eliminated all non-essential travel and implemented a hiring freeze while evaluating its total operating unit footprints. Collectively, these measures will generate substantial cash savings. Finally, the members of Greenbrier's Board of Directors, including me, have voluntarily reduced annual compensation.

All of Greenbrier's manufacturing and service facilities continue regular operations. Greenbrier functions as an essential infrastructure business under guidance issued by DHS and supports operations vital to the national transportation system and operations of the Department of Defense and other federal agencies, under the statutory and regulatory authority of the Department of Transportation, the Surface Transportation Board, the Federal Railroad Administration, and the Jones Act. Similar guidelines and authorities exist in other nations where we operate. Greenbrier's manufacturing backlog and factories will provide cash flow resiliency. With the strength of our current backlog and balance sheet, we expect to continue to operate while observing stringent health and safety protocols. Continuity of the business alongside employee health and welfare are Greenbrier's highest priorities. Maintaining cash flow and liquidity are essential components of Greenbrier's current operating strategy.

Business Update
Greenbrier continued to rationalize its global manufacturing footprint in the second quarter by idling excess production capacity at its North American manufacturing facilities as well as its aftermarket wheels, repair and parts locations that operate within Greenbrier Rail Services (GRS).  Significant manufacturing efficiency programs also were implemented at Greenbrier facilities in Brazil and Europe in fiscal 2019.

As mentioned above, Greenbrier's operations constitute "Essential Infrastructure" and "Essential Businesses" as defined by relevant U.S. agency guidance and advisories and in all "stay at home" orders issued in all U.S. jurisdictions where we operate.  The only exception in our entire operating network is a planned two-week shutdown of our facilities in Europe over Easter to allow for the supply chain to normalize. Greenbrier is dedicated to fulfilling its role to facilitate the continued stability of transportation supply infrastructure. Greenbrier will help maintain the delivery of vital goods, including food, medical supplies and fuel to communities and to support the United States' national security infrastructure.

At all facilities worldwide, Greenbrier policies meet or exceed CDC recommendations.  Expanded health screenings, including temperature readings, operating through split shifts, and enhanced social distancing practices have reduced the number of employees in a location at the same time. At present, Greenbrier facilities have been minimally impacted by COVID-19. Precautions and processes are in place for exposures to be reported and addressed.

Like other companies, Greenbrier cannot predict with certainty the impact that the COVID-19 pandemic may have on our business due to numerous uncertainties, including the duration of the pandemic, the impact to customers and suppliers, actions that may be taken by governmental authorities and other consequences. As a result, Greenbrier is focused on continuous contingency planning and risk analysis. Greenbrier's strong backlog, coupled with aggressive actions to slow down or shutter production lines and reduce overhead, leaves little open production space for the remainder of the fiscal and calendar year. Additionally, the Company plans to access current and proposed government programs for strategic businesses to protect our workforce and ensure economic viability of the enterprise.

Certain orders and backlog in this release are subject to customary documentation and completion of terms.

Financial Summary

Segment Summary

Conference Call
Greenbrier will host a teleconference to discuss its second quarter 2020 results. In conjunction with this news release, Greenbrier has posted a supplemental earnings presentation to our website. 
Teleconference details are as follows:

• April 7, 2020
• 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. 

About Greenbrier
Greenbrier, headquartered in Lake Oswego, Oregon, is a leading international supplier of equipment and services to global freight transportation markets. Greenbrier designs, builds and markets freight railcars and marine barges in North America. Greenbrier Europe is an end-to-end freight railcar manufacturing, engineering and repair business with operations in Poland, Romania and Turkey that serves customers across Europe and in the nations of the Gulf Cooperation Council. Greenbrier builds freight railcars and rail castings in Brazil through two separate strategic partnerships. We are a leading provider of freight railcar wheel services, parts, repair, refurbishment and retrofitting services in North America through our wheels, repair & parts business unit.  Greenbrier offers railcar management, regulatory compliance services and leasing services to railroads and related transportation industries in North America. Through unconsolidated joint ventures, we produce industrial and rail castings, tank heads and other components. Greenbrier owns a lease fleet of 10,300 railcars and performs management services for 389,000 railcars. Learn more about Greenbrier at www.gbrx.com.

"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995:  This press release may contain forward-looking statements, including any statements that are not purely statements of historical fact. Greenbrier uses words, and variations of words, such as "aim",  "allow," "believe,"  "can," "ensure," "estimates," "has eliminated," "maintain," "may," "normalize," "plans," "potential," "preserving," "reducing," "seeks," "should," "target," "targeting," "typically," "will," "may," "can," "will generate" and similar expressions to identify forward-looking statements. These forward-looking statements include, without limitation, statements about future liquidity; savings generated by reducing capital expenditures, SG&A, overhead, other expenses; targeting available capital; as well as other information regarding future performance and strategies and appear throughout this press release including in the headlines and the sections "Second Quarter Highlights" and "Business Update." 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 the results contemplated by the forward-looking statements.

Factors that might cause such a difference include, but are not limited to, the COVID-19 coronavirus pandemic and the governmental reaction to COVID-19 having a materially negative impact on our business, liquidity and financial position, results of operations, stock price, and our ability to convert backlog to revenue; our inability to increase our liquidity and borrowing base as we anticipate or being delayed in doing so; oil prices remaining materially lower than recent historical prices; inability to implement cost savings in the amounts or timelines that we have planned; the cyclical nature of our business, economic downturns and a rising interest rate environment; changes in our product mix due to shifts in demand or fluctuations in commodity and energy prices; a decline in performance or demand of the rail freight industry; an oversupply or increase in efficiency in the rail freight industry; difficulty integrating acquired businesses or joint ventures; inability to convert backlog to future revenues; risks related to our operations outside of the U.S., including anti-bribery violations; governmental policy changes impacting international trade and corporate tax; the loss of or reduction of business from one or more of our limited number of customers; inability to lease railcars at satisfactory rates, or realize expected residual values on sale of railcars at the end of a lease; shortages of skilled labor, increased labor costs, or failure to maintain good relations with our workforce; equipment failures, technological failures, costs and inefficiencies associated with changing of production lines, or transfer of production between facilities; inability to compete successfully; suitable joint ventures, acquisition opportunities and new business endeavors may not be identified or concluded; inability to complete capital expenditure projects efficiently, or to cause capital expenditure projects to operate as anticipated; inability to design or manufacture products or technologies, or to achieve timely certification or market acceptance of new products or technologies; unsuccessful relationships with our joint venture partners; environmental liabilities, including the Portland Harbor Superfund Site; the timing of our asset sales and related revenue recognition may result in comparisons between fiscal periods not being accurate indicators of future performance; attrition within our management team or unsuccessful succession planning for members of our senior management team and other key employees who are at or nearing retirement age; changes in the credit markets and the financial services industry; volatility in the global financial markets; our actual results differing from our announced expectations; fluctuations in the availability and price of energy, freight transportation, steel and other raw materials; inability to procure specialty components or services on commercially reasonable terms or on a timely basis from a limited number of suppliers; our existing indebtedness may limit our ability to borrow additional amounts in the future, may expose us to increasing interest rates, and may expose us to a material adverse effect on our business if we are unable to service our debt or obtain additional financing; train derailments or other accidents or claims; changes in or failure to comply with legal and regulatory requirements; an adverse outcome in any pending or future litigation or investigation; potential misconduct by employees; labor strikes or work stoppages; the volatility of our stock price; dilution to investors resulting from raising additional capital or due to other reasons;  product and service warranty claims; misuse of our products by third parties; write-downs of goodwill or intangibles in future periods; conversion at our option of our outstanding convertible notes resulting in dilution to our then-current stockholders; as a holding company with no operations, our reliance on our subsidiaries and joint ventures and their ability to make distributions to us; our governing documents, the terms of our convertible notes, and Oregon law could make a change of control or acquisition of our business by a third party difficult; the discretion of our Board of Directors to pay or not pay dividends on our common stock; fluctuations in foreign currency exchange rates; inability to raise additional capital to operate our business and achieve our business objectives; shareholder activism could cause us to incur significance expense, impact our stock price, and hinder execution of our business strategy; cybersecurity risks; updates or changes to our information technology systems resulting in problems; inability to protect our intellectual property and prevent its improper use by third parties; claims by third parties that our products or services infringe their intellectual property rights; liability for physical damage, business interruption or product liability claims that exceed our insurance coverage; inability to procure adequate insurance on a cost-effective basis; changes in accounting standards or inaccurate estimates or assumptions in the application of accounting policies; fires, natural disasters, severe weather conditions or public health crises; unusual weather conditions which reduce demand for our wheel-related parts and repair services; business, regulatory, and legal developments regarding climate change which may affect the demand for our products or the ability of our critical suppliers to meet our needs; repercussions from terrorist activities or armed conflict; unanticipated changes in our tax provisions or exposure to additional income tax liabilities; the inability of certain of our customers to utilize tax benefits or tax credits; and suspension or termination of our share repurchase program. More information on these risks and other potential factors that could cause our results to differ from our forward-looking statements is included 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 periodic reports on Form 10-K and subsequent Form 10-Q filings. 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 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 before Interest and foreign exchange, Income tax expense, Depreciation and amortization and excluding 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. 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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SOURCE The Greenbrier Companies, Inc.