Written by
Marybeth Luczak, Govt Editor
“Greenbrier stays targeted on sustaining a excessive stage of liquidity and thoroughly managing our manufacturing footprint as a way to proceed to generate working money circulation,” Chairman and CEO William A. Furman mentioned.
The Greenbrier Corporations, Inc. (GBX), in its first fiscal quarter ended Nov. 30, 2020, reported a web lack of $10 million, attributable to the corporate, in what continues to be a “difficult market atmosphere.” GBX famous it has been profitable in sustaining money circulation and liquidity—“important parts” of its working technique—and its diversified $2.35 billion new railcar backlog of 23,900 items—together with orders for two,900 railcars within the quarter, valued at $260 million—“offers a baseload of exercise as we achieve better visibility into buyer wants because the yr unfolds.”
Among the many firm’s first-quarter highlights:
• GBX reported liquidity of $810 million, together with $725 million in money and $85 million of obtainable borrowing capability. When mixed with $150 million of further initiatives in progress, the full was $960 million.
• New railcar deliveries within the quarter have been 3,100 items, “representing an almost 1.0x book-to-bill,” in accordance with the corporate.
• Web loss attributable to GBX for the quarter was $10 million, or $0.30 per diluted share, on income of $403 million.
• Adjusted EBITDA for the quarter was $23 million, or 5.8% of income.
• The Board has prolonged the $100 million share repurchase program by way of January 2023, the corporate reported.
“Greenbrier stays targeted on sustaining a excessive stage of liquidity and thoroughly managing our manufacturing footprint as a way to proceed to generate working money circulation,” Chairman and CEO William A. Furman mentioned. “In line with these targets, we ended the quarter with a robust money place whereas meaningfully decreasing our debt throughout the quarter [$80 million reduction]. Our prior price discount initiatives, mixed with stock and syndication exercise, produced stable money circulation within the quarter. Though a difficult working atmosphere persists not less than by way of the primary half of fiscal 2021, our $2.35 billion backlog offers a baseload for our manufacturing operations and visibility into ahead manufacturing necessities. We’ll proceed to regulate our manufacturing footprint based mostly on our outlook, whereas additionally making certain we don’t constrain our capability to scale capability as demand will increase. New order inquiries proceed as rail site visitors will increase and velocity declines. This positions us properly for the market enhancements we anticipate later in calendar 2021. Lastly, our strategic actions over the previous two years, significantly the acquisition of ARI within the U.S., have delivered outcomes. Now we have lowered our prices and secured our place as a market chief on three continents, particularly in our core North American market.”
Commenting on its enterprise and 2021 outlook, the corporate reported that its “scale and capabilities have considerably broadened for the reason that Nice Recession.” GBX famous that its backlog immediately is “greater than 5 occasions bigger than it was as of the top of 2010. Our stronger market place is mirrored in our share of North American trade railcar orders within the first 9 months of calendar yr 2020 and within the numerous sorts of railcars we’re constructing. In Europe, broad macroeconomic reforms to deal with local weather change are ushering in an period of modal shift for freight because the continent strikes from polluting and congested highway journey to wash and environment friendly rail service. This could generate vital market development within the years to come back. Regulatory-driven freight wagon demand in Europe dietary supplements the rise in commodity-driven and alternative freight wagon demand that sometimes gathers momentum in a recovering economic system.”
More details can be found on the GBX website.
The Cowen Perception
“Fiscal 1Q21 outcomes have been a miss to our and Avenue estimates,” Cowen and Firm OEM Transportation Analyst Matt Elkott reported. “Deliveries and gross margin fell wanting our expectations, whereas orders have been 32% above our estimate. The results affirm our near-term caution, however we might view immediately’s seemingly weak point as a novel shopping for alternative.”
Key takeaways from Cowen:
• “Adjusted fiscal 1Q21 loss/sh of $0.30 in comparison with the consensus loss/sh of $0.07 EPS and our estimate of EPS of $0.01. Income of $403MM was beneath our and Avenue forecasts of $532.8MM and $481.0MM, respectively. Deliveries of three,100 items fell wanting our estimate of three,900 items.
• “The desk beneath particulars the fiscal 1Q21 outcomes versus our and consensus estimates and prior intervals.
• “Orders got here in at 2,900 items, above our estimate of two,200 items, above the two,800 items acquired within the prior fiscal quarter, however beneath the identical quarter final yr of 4,500 items.
• “GBX ended the quarter with liquidity of $810MM, together with $725MM in money and $85MM of obtainable borrowing capability. The corporate famous that, mixed with $150MM of further initiatives in progress, liquidity ought to complete $960MM.
• “GBX prolonged its $100MM share repurchase program by way of January 2023.”
