The Greenbrier Companies, Inc. on Oct. 30, 2015 reported record financial results for its fourth fiscal quarter and full year ended Aug. 31, 2015.
In the fourth quarter, net earnings attributable to Greenbrier were a record $66.9 million, or $2.02 per diluted share, on record revenue of $765.5 million. Adjusted EBITDA was a record $147.6 million, or 19.3% of revenue. The new railcar backlog as of Aug. 31, 2015 was 41,300 units with an estimated value of $4.71 billion, based on an 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, the end of the previous quarter.
Greenbrier received diversified orders for 2,900 new railcars valued at $470 million during the fourth quarter. New railcar deliveries totaled 6,200 units, compared to 5,700 units for third-quarter 2015.
For fiscal year 2015, Greenbrier’s net earnings were a record $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. The company achieved ROIC (return on invested capital) of 23.7%, and cash generated by operating activities was $192.3 million. New railcar deliveries totaled 21,100 units, and orders totaled 32,400 units valued at $3.44 billion across a broad range of railcar types.
In terms of progress on longer-term financial goals, Greenbrier’s aggregate gross margin expanded to 22.8%, compared to 20.9% in the prior quarter, attain ahead of plans its goal of at least 20% gross margin by the second half of fiscal 2016.
“We remain on track to reach our goal of at least 25% ROIC for the second half of fiscal 2016,” said Chairman and CEO William A. Furman. “Our 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. 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,” said Furman. “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. 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. Greenbrier’s 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. 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.”