Greenbrier Reports Third Quarter Revenue of $439.2 Million

The Greenbrier Companies, Inc. has reported financial results for its third fiscal quarter ending May 31, 2017, with net earnings of $32.8 million, or $1.03 per diluted share, on revenue of $439.2 million. Adjusted EBITDA for the quarter was $63.8 million, or 14.5 percent of revenue.

"Our two-part strategy is succeeding. Specifically, our strategy protects and grows our core North American businesses while we also expand internationally in promising regions for rail transportation,” said William A. Furman, Greenbrier chairman and CEO. “By adhering to this strategy, Greenbrier delivered strong third quarter results highlighted by favorable gross margins of 20 percent and orders for 11,000 railcars. This is a testament to our business flexibility and our team's ability to execute in more challenging markets for our products and services."

As of May 31, 2017, Greenbrier’s railcar backlog was 31,000 units with an estimated value of $3.10 billion. Backlog includes approximately 1,000 units related to the formation of Greenbrier-Astra Rail, but does not reflect backlog for Greenbrier-Maxion. New railcar deliveries totaled 2,600 units for the quarter.

During the quarter, Greenbrier received diversified orders for approximately 11,000 new railcars, which are valued at $1.01 billion. The orders include 6,000 MUL units. Order activity excludes approximately 500 units from Greenbrier-Maxion (not consolidated) and Greenbrier-Astra Rail (formed June 1, 2017).  If included, total international order activity would be 1,000 units.

“We are encouraged by the strong order activity in our third quarter of 11,000 units, and especially in our North American and European markets,” added Furman. “Excluding the 6,000 units from the MUL transaction, orders in these traditional markets totaled 5,000 units, the strongest level achieved in the past two years. This total excludes orders received by Greenbrier-Maxion and Astra Rail for the trailing three months. Our backlog of 31,000 railcar units places Greenbrier on a strong footing as we approach fiscal 2018. Since the beginning of the year we have observed sustained and increasing railcar loadings across commodity types, as well as decreasing rail velocity. Both are positive indicators for the near term demand environment."

"While we see emerging improvements in North American and European rail markets, we still expect a challenging commercial environment into calendar 2018,” continued Furman. “This makes execution of our two-part strategy even more important in the upcoming fiscal year. Although unforeseen developments in our markets can always occur, we remain cautiously optimistic."

"We will continue to forge new partnerships and expand on existing relationships like the transactions we finalized recently with MUL, Greenbrier-Maxion and Astra Rail. With manufacturing operations on three continents, solid railcar backlog, strong cash flows and a flexible balance sheet, Greenbrier continues to deliver long-term value for its shareholders," Furman concluded. 

Based on current business trends and production schedules for fiscal 2017, Greenbrier believes that revenue will be $2.1 to $2.3 billion, and deliveries will be between 15,000 and 16,000 units. Guidance for annual diluted EPS is expected at $3.45 to $3.65, excluding $0.17 per share of new convertible note interest expense.