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Greenbrier Reports Record Fourth Quarter Results

The following excerpt is from the company's SEC filing.

~ Posts EPS of $2.02 ~

~ Increases quarterly dividend to $0.20 per share~

~ Issues 2016 earnings guidance at $5.65$6.15 per share ~

Lake Oswego, Oregon, October 30, 2015

The Greenbrier Companies, Inc. (NYSE: GBX) today reported financial results for its fourth fiscal quarter and full year ended August 31, 2015.

Fourth Quarter Highlights

Net earnings attributable to Greenbrier for the quarter were a record $66.9 million, or $2.02 per diluted share, on record revenue of $765.5 million.

Adjusted EBITDA for th e quarter was a record $147.6 million, or 19.3% of revenue.

New railcar backlog as of August 31, 2015 was 41,300 units with an estimated value of $4.71 billion (average unit sale price of $114,000), compared to 45,100 units with an estimated value of $4.86 billion (average unit sale price of $108,000) as of May 31, 2015.

Diversified orders for 2,900 new railcars valued at $470 million were received during the quarter.

New railcar deliveries totaled 6,200 units for the quarter, compared to 5,700 units for the quarter ended May 31, 2015.

Marine backlog as of August 31, 2015 was approximately $52 million.

Quarterly dividend increases 33% to $0.20 per share, payable on December 2, 2015 to shareholders of record as of November 11, 2015.

Repurchased 495,952 shares of common stock at a cost of $21.8 million during the quarter, and an additional 490,123 shares at a cost of $17.8 million subsequent to August 31, 2015.

Nearly $145 million of capital returned to shareholders through dividends and share repurchases since October 2013.

Board authorizes $100 million increase to share repurchase program, bringing cumulative repurchase authorizations to $225 million since October 31, 2013.

Fiscal Year 2015 Highlights

Record net earnings were $192.8 million, or $5.93 per diluted share, on revenue of $2.61 billion.

Adjusted EBITDA was a record $433.8 million or 16.7% of revenue.


Greenbrier Reports Record Fourth Quarter Results . . .


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Achieved Return on Invested Capital (ROIC) of 23.7%.

New railcar deliveries totaled 21,100 units.

Orders totaled 32,400 units valued at $3.44 billion across a broad range of railcar types.

Cash generated by operating activities was $192.3 million.

Progress on Longer Term Financial Goals

Aggregate gross margin expanded to 22.8%, compared to 20.9% in the prior quarter, reaching the goal of at least 20% gross margin by the second half of fiscal 2016.

We remain on track to reach the goal of at least 25% ROIC for the second half of fiscal 2016. ROIC of 23.7% for fiscal 2015 reflects record operating results tempered by working capital needs associated with higher production and syndication volumes, and planned capital expenditure programs.

Our Net Funded Debt : LTM EBITDA ratio continued to improve to 0.5 times.

William A. Furman, Chairman and CEO, said, We continued to realize positive operating momentum in the fourth quarter, leading to record revenue, margin and earnings for both the quarter and fiscal year as a whole. We intend to build on this operating momentum, using the strength of our integrated model and our diversified high margin new railcar backlog, some of which stretches into 2020. We expect these factors will lead to another solid year of earnings and free cash flow in fiscal 2016.

While recent new railcar order activity has been dampened by broad economic factors, it is too early to determine whether the level of new orders will continue at this muted pace. We are an agile company and, if needed, we are ready to adapt quickly to market conditions. We remain optimistic about the long term fundamentals and drivers of new railcar demand, Furman continued. Industry forecasts support this view, with above long-term average levels of new railcar deliveries expected in North America through 2019. Our strategy to diversify our product offerings, create efficient, flexible manufacturing capacity in low-cost facilities, drive more value through our lease syndication model, and increase revenue diversity in international markets, along with our strong balance sheet, positions us well.

We are actively expanding our geographic reach and now sell into more global markets than ever before, Furman added. Most recently, we announced our entry into markets in the Middle East with an order for 1,200 tank cars from Saudi Railway Company (SAR). Earlier this year, we expanded into South American markets through our investment in a Brazilian railcar manufacturer, now known as Greenbrier-Maxion. Greenbriers global growth complements and leverages our engineering expertise and production facilities in Mexico and Poland and at Gunderson, our flagship manufacturing facility in Oregon. Our international activity extends the Greenbrier brand and provides business diversification and growth opportunities over the longer term.

Furman concluded, Greenbrier will continue its balanced approach to investing in projects that generate high rates of return, seeking growth opportunities in our core competencies, and returning capital to shareholders.

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Share Repurchases

We repurchased 495,952 shares of common stock at a cost of $21.8 million during the quarter and an additional 490,123 shares at a cost of $17.8 million subsequent to August 31, 2015. Cumulative repurchases since October 31, 2013 aggregate 2,641,662 shares at a cost of $122.5 million. We have $102.5 million remaining available under our cumulative $225 million share repurchase program.

Subsequent Events

Subsequent to quarter end, the Company refinanced its $290 million North American revolving credit facility, with a new five-year $550 million facility. The Company also acquired a diversified portfolio of nearly 4,000 leased railcars previously owned by WLR-Greenbrier Rail Inc. and managed by Greenbrier, with the intent to sell them in the near term to institutional investors. This portfolio acquisition is consistent with the Companys successful stated strategy to drive more volume through its lease syndication and asset management model.

Business Outlook

Based on current business trends, industry forecasts and production schedules for fiscal 2016, Greenbrier believes:

Deliveries will be approximately 20,000 22,500 units

Revenue will exceed $2.8 billion

Diluted EPS will be in the range of $5.65 to $6.15

As noted in the Safe Harbor statement, there are risks to achieving this guidance. Certain orders and backlog in this release are subject to customary documentation and completion of terms.

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Financial Summary

Q4 FY15

Q3 FY15

Sequential Comparison Main Drivers



Up 7.1% primarily due to increased deliveries

Gross margin

Up 190 bps due to favorable product mix and pricing and improved production efficiencies in the manufacturing segment

Selling and administrative expense

Down 13.2% primarily due to non-recurring costs in Q3

Gain on disposition of equipment

Timing of sales fluctuates and is opportunistic



Up 26.9% driven by higher deliveries and margin and non-recurring costs in Q3

Effective tax rate

Reflects a change in the geographic mix of earnings and in GIMSA JV earnings

Net earnings attributable to noncontrolling interest

Driven by an increase in deliveries and higher margin from our GIMSA JV

Segment Summary




Up 10.8% primarily due to higher deliveries

Up 150 bps due to favorable product mix and pricing and improved efficiencies

Operating margin

Wheels & Parts

Down 13.1% primarily attributable to lower wheel and component volumes

Up 280 bps primarily due to an adverse effect of lower scrap metal prices in Q3

Leasing & Services

Down 1.7% primarily due...