Greenbrier Reports Third Quarter Results
07/09/2021 - 06:00 AM
LAKE OSWEGO, Ore. , July 9, 2021 /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 third fiscal quarter ended May 31, 2021 .
Third Quarter Highlights
New railcar orders for 3,800 units valued at $400 million and deliveries of 3,300 units, resulted in a 1.2x book-to-bill. This is the second consecutive quarter that book-to-bill exceeded 1.0x. Orders included intermodal units, tank cars, boxcars and covered hoppers. Diversified new railcar backlog as of May 31, 2021 was 24,800 units with an estimated value of $2.6 billion . Liquidity of approximately $850 million , including $628 million in cash and $221 million of available borrowing capacity. Liquidity and $149 million of initiatives in progress total nearly $1 billion . COVID-19 related expenses for the quarter were $1.9 million (pre-tax) and $8.3 million (pre-tax) for the nine months ended May 31, 2021 . Net earnings attributable to Greenbrier for the quarter were $19.7 million , or $0.59 per diluted share, on revenue of $450 million . Net earnings included $3.6 million ($0.10 per share), of loss on extinguishment of debt, net of tax. Adjusted net earnings attributable to Greenbrier for the quarter were $23.3 million or $0.69 per diluted share and adjusted EBITDA for the quarter was $53 million . GBX Leasing was formed in the quarter to create stable, tax-advantaged cash flows with initial railcar funding of nearly $100 million , under a $300 million non-recourse warehouse credit facility. GBX Leasing is consolidated in Greenbrier's financial statements, see supplemental information in this release. Debt maturities were extended in the quarter with the issuance of $374 million of senior convertible notes due in 2028 and retirement of $257 million of 2024 senior convertible notes. Repurchased $20 million of common stock in connection with the convertible note issuance. $100 million remains authorized under the share repurchase plan. Board declares a quarterly dividend of $0.27 per share, payable on August 18, 2021 to shareholders of record as of July 28, 2021 representing Greenbrier's 29th consecutive quarterly dividend. William A. Furman , Chairman & CEO commented, "Greenbrier's financial results for the third fiscal quarter reflect the steady recovery in our markets that we forecasted would occur in the second half of our fiscal year. Our COVID strategy launched in March 2020 has been very successful. We are executing well on plans to maintain a liquidity base and strong balance sheet as well as safely operate each of our facilities. All of this has been necessary to prepare for the now emerging recovery. As positive momentum continues, we are seizing opportunities to resume the pursuit of scale we began during the two years prior to the pandemic. In the third fiscal quarter this included the formation of GBX Leasing and completion of a strategic debt refinancing that extended maturities on convertible notes by four years."
Furman added, "We are benefiting from the economic recovery in railcar manufacturing and leasing as expected. This is playing out through sequential monthly increases in manufacturing revenues and a meaningful increase in new order activity in our core North American markets. The ability to ramp production capacity is integral to protecting Greenbrier's leadership position in the market. New orders will not increase linearly, but we expect commercial activity to remain strong as our $2.6 billion backlog provides a baseload of orders to support the expanded operation of production lines and our leasing business."
Business Update & Outlook
Greenbrier's adherence to its core COVID strategy during the third fiscal quarter produced the best quarterly performance to date in fiscal 2021. Since March 2020 , Greenbrier has practiced disciplined management to meet the realities of this once in 100 years pandemic. Operating and commercial momentum is building. In our domestic and international markets, Greenbrier's core COVID strategy was and continues to be:
Maintain a strong liquidity base and balance sheet Navigate the COVID-19 pandemic and the related economic crisis by safely operating our factories while generating cash flow Prepare for emerging economic recovery and forward momentum in our markets. Greenbrier is currently operating in this phase. Greenbrier is well-positioned to navigate the immediate challenges of increasing production rates safely amidst the emerging COVID variants, while ensuring labor and supply chain continuity. Looking ahead, Greenbrier expects the fourth quarter to be the strongest performance of the year. A full quarter of increased production rates and business activity creates positive momentum into fiscal 2022.
Financial Summary
Q3 FY21
Q2 FY21
Sequential Comparison – Main Drivers
Revenue
$450.1M
$295.6M
65% higher deliveries reflecting increased production levels and overall improving demand environment
Gross margin
16.7%
6.0%
Primarily increased production rates in Manufacturing and favorable resolution of warranty & other contingencies in international operations
Selling and administrative
$49.2M
$43.4M
Increased consulting and employee-related costs including performance-based compensation expense
Adjusted EBITDA
$52.9M
($1.3M )
Higher operating earnings reflecting improving demand environment; See reconciliation on page 12
Net (earnings) loss attributable to noncontrolling interest
($0.3M )
$4.9M
Increased operating activity at GIMSA joint venture
Adjusted net earnings (loss) attributable to Greenbrier
$23.3M (1)
($9.1M )
Primarily increased activity across all business units and tax benefit from lease fleet investments and operating losses carried back to prior years with higher tax rates allowable under the CARES Act
Adjusted diluted EPS
$0.69(1)
($0.28)
(1) Excludes $3.6 million ($0.10 per share), net of tax, of loss on debt extinguishment.
Segment Summary
Q3 FY21
Q2 FY21
Sequential Comparison – Main Drivers
Manufacturing
Revenue
$341.9M
$202.1M
Higher deliveries reflecting improving demand levels
Gross margin
14.5%
0.2%
Higher production & delivery and favorable resolution of warranty and other contingencies; Excluding these items, gross margin would be in the low double digits
Operating margin (1)
9.2%
(8.5% )
Deliveries (2)
2,800
1,700
Higher production rates
Wheels, Repair & Parts
Revenue
$80.9M
$71.6M
Increased demand levels across the network
Gross margin
8.9%
6.9%
Higher volumes driving improved performance
Operating margin (1)
5.2%
3.4%
Leasing & Services (including GBX Leasing)
Revenue
$27.3M
$21.9M
Revenue and margin include enhanced syndication financing activity
Gross margin
67.6%
56.6%
Operating margin (1) (3)
44.9%
29.3%
Fleet utilization
93.8%
94.8%
(1) See supplemental segment information on page 11 for additional information.
(2) Excludes Brazil deliveries which are not consolidated into Manufacturing revenue and margins.
(3) Includes Net loss (gain) on disposition of equipment, which is excluded from gross margin.
Conference Call
Greenbrier will host a teleconference to discuss its third quarter 2021 results. In conjunction with this news release, Greenbrier has posted a supplemental earnings presentation to our website. Teleconference details are as follows:
July 9, 2021 8:00 a.m. Pacific Daylight Time Phone: 1-888-317-6003 (Toll Free) 1-412-317-6061 (International), Entry Number "2776228" Real-time Audio Access: ("Newsroom" at http://www.gbrx.com ) Please access the site 10-15 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. Through its wholly-owned subsidiaries and joint ventures, Greenbrier designs, builds and markets freight railcars and marine barges in North America , Europe and Brazil . 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 manages 445,000 railcars and offers railcar management, regulatory compliance services and leasing services to railroads and other railcars owners in North America . GBX Leasing (GBXL) is a special purpose subsidiary that owns and manages a portfolio of leased railcars that originate primarily from Greenbrier's manufacturing operations. Together, GBXL and Greenbrier own a lease fleet of 8,700 railcars. Learn more about Greenbrier at www.gbrx.com .
THE GREENBRIER COMPANIES, INC.
Consolidated Balance Sheets
(In thousands, unaudited)
May 31,
2021
February 28, 2021
November 30, 2020
August 31,
2020
May 31,
2020
Assets
Cash and cash equivalents
$ 628,200
$ 593,499
$ 724,547
$ 833,745
$ 735,258
Restricted cash
8,689
8,614
8,547
8,342
8,704
Accounts receivable, net
274,792
236,171
216,220
230,488
261,629
Income tax receivable
75,135
62,103
24,448
9,109
-
Inventories
553,137
522,984
490,282
529,529
675,442
Leased railcars for syndication
154,017
109,287
51,087
107,671
136,144
Equipment on operating leases, net
446,888
445,451
445,542
350,442
355,841
Property, plant and equipment, net
676,010
687,468
696,333
711,524
719,155
Investment in unconsolidated affiliates
79,420
70,820
72,254
72,354
75,508
Intangibles and other assets, net
180,829
190,283
186,509
190,322
181,315
Goodwill
133,050
132,685
130,315
130,308
130,035
$ 3,210,167
$ 3,059,365
$ 3,046,084
$ 3,173,834
$ 3,279,031
Liabilities and Equity
Revolving notes
$ 325,150
$ 275,839
$ 276,248
$ 351,526
$ 416,535
Accounts payable and accrued liabilities
480,373
448,571
434,138
463,880
488,969
Deferred income taxes
44,900
24,798
10,120
7,701
4,354
Deferred revenue
43,676
42,572
36,916
42,467
63,536
Notes payable, net
835,027
793,189
797,089
804,088
806,919
Contingently redeemable noncontrolling interest
30,323
30,037
30,711
31,117
30,611
Total equity – Greenbrier
1,286,763
1,268,502
1,280,407
1,293,043
1,291,221
Noncontrolling interest
163,955
175,857
180,455
180,012
176,886
Total equity
1,450,718
1,444,359
1,460,862
1,473,055
1,468,107
$ 3,210,167
$ 3,059,365
$ 3,046,084
$ 3,173,834
$ 3,279,031
THE GREENBRIER COMPANIES, INC .
Consolidated Statements of Income
(In thousands, except per share amounts, unaudited)
Three Months Ended
May 31,
Nine Months Ended May 31,
2021
2020
2021
2020
Revenue
Manufacturing
$ 341,939
$ 653,007
$ 852,755
$ 1,800,317
Wheels, Repair & Parts
80,871
82,024
218,050
259,857
Leasing & Services
27,333
27,526
77,949
95,590
450,143
762,557
1,148,754
2,155,764
Cost of revenue
Manufacturing
292,464
562,793
775,125
1,567,014
Wheels, Repair & Parts
73,690
75,001
203,341
241,266
Leasing & Services
8,857
17,232
36,814
61,428
375,011
655,026
1,015,280
1,869,708
Margin
75,132
107,531
133,474
286,056
Selling and administrative expense
49,239
49,494
136,371
158,455
Net (gain) loss on disposition of equipment
184
(8,775)
(765)
(19,431)
Earnings (loss) from operations
25,709
66,812
(2,132)
147,032
Other costs
Interest and foreign exchange
10,204
7,562
30,875
33,023
Net loss on extinguishment of debt
4,763
-
4,763
-
Earnings (loss) before income tax and earnings from unconsolidated affiliates
10,742
59,250
(37,770)
114,009
Income tax benefit (expense)
6,914
(24,421)
35,998
(37,878)
Earnings (loss) before earnings from
unconsolidated affiliates
17,656
34,829
(1,772)
76,131
Earnings from unconsolidated affiliates
2,379
1,040
1,257
3,764
Net earnings (loss)
20,035
35,869
(515)
79,895
Net (earnings) loss attributable to noncontrolling interest
(298)
(8,097)
1,215
(30,825)
Net earnings attributable to Greenbrier
$ 19,737
$ 27,772
$ 700
$ 49,070
Basic earnings per common share:
$ 0.61
$ 0.85
$ 0.02
$ 1.50
Diluted earnings per common share:
$ 0.59
$ 0.83
$ 0.02
$ 1.47
Weighted average common shares :
Basic
32,573
32,690
32,726
32,660
Diluted
33,605
33,478
33,747
33,414
Dividends per common share
$ 0.27
$ 0.27
$ 0.81
$ 0.79
THE GREENBRIER COMPANIES, INC.
Consolidated Statements of Cash Flows
(In thousands, unaudited)
Nine Months Ended
May 31,
2021
2020
Cash flows from operating activities
Net earnings (loss)
$
(515)
$
79,895
Adjustments to reconcile net earnings (loss) provided by (used in)
operating activities:
Deferred income taxes
20,197
(11,450)
Depreciation and amortization
75,637
82,452
Net gain on disposition of equipment
(765)
(19,431)
Accretion of debt discount
4,639
4,102
Stock based compensation expense
12,468
8,265
Net loss on extinguishment of debt
4,763
-
Noncontrolling interest adjustments
343
2,826
Other
1,729
568
Decrease (increase) in assets:
Accounts receivable, net
(49,160)
110,431
Income tax receivable
(66,026)
-
Inventories
(92,294)
12,555
Leased railcars for syndication
(55,532)
(38,826)
Other assets
863
(59,212)
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities
18,626
(77,243)
Deferred revenue
1,189
(5,900)
Net cash provided by (used in) operating activities
(123,838)
89,032
Cash flows from investing activities
Proceeds from sales of assets
12,156
78,521
Capital expenditures
(62,774)
(55,326)
Investments in and advances to/repayments from unconsolidated affiliates
674
(1,500)
Cash distribution from unconsolidated affiliates and other
652
11,273
Net cash provided by (used in) investing activities
(49,292)
32,968
Cash flows from financing activities
Net change in revolving notes with maturities of 90 days or less
147,571
214,932
Proceeds from revolving notes with maturities longer than 90 days
112,000
175,000
Repayments of revolving notes with maturities longer than 90 days
(286,000)
-
Proceeds from issuance of notes payable
373,750
-
Repayments of notes payable
(308,468)
(24,002)
Debt issuance costs
(14,067)
-
Repurchase of stock
(20,000)
-
Dividends
(26,882)
(26,344)
Investment by joint venture partner
7,000
-
Cash distribution to joint venture partner
(24,055)
(36,152)
Tax payments for net share settlement of restricted stock
(2,802)
(2,266)
Net cash provided by (used in) financing activities
(41,953)
301,168
Effect of exchange rate changes
9,885
(17,693)
Increase (decrease) in cash, cash equivalents and restricted cash
(205,198)
405,475
Cash and cash equivalents and restricted cash
Beginning of period
842,087
338,487
End of period
$
636,889
$
743,962
Balance Sheet Reconciliation
Cash and cash equivalents
$
628,200
$
735,258
Restricted cash
8,689
8,704
Total cash and cash equivalents and restricted cash as presented above
$
636,889
$
743,962
THE GREENBRIER COMPANIES, INC.
Supplemental Backlog and Delivery Information
Three Months Ended
May 31, 2021
Backlog Activity (units) (1)
Beginning backlog
24,900
Orders received
3,800
Production held as Leased railcars for syndication
(800)
Production sold directly to third parties
(3,100)
Ending backlog
24,800
Delivery Information (units) (1)
Production sold directly to third parties
3,100
Sales of Leased railcars for syndication
200
Total deliveries
3,300
(1)
Includes Greenbrier-Maxion, our Brazilian railcar manufacturer, which is accounted for under the equity method
Supplemental Leasing Information
(In thousands, except owned and managed fleet, unaudited)
GBX Leasing (GBXL) was formed in April 2021 as a joint venture with The Longwood Group to own and manage a portfolio of leased railcars primarily built by Greenbrier. Greenbrier owns approximately 90% of GBXL and consolidates it in Greenbrier's financial statements in the Leasing & Services segment. Longwood was formed in 2018 by D. Stephen Menzies to pursue a range of commercial investments in equipment transportation markets following his successful growth of Trinity Rail's leasing business over many years. GBXL adds an additional "go to market" element to Greenbrier's Commercial strategy of direct sales, partnerships with operating leasing companies, origination of leases for syndication partners as well as providing a platform for further growth at scale. GBXL will produce strong tax-advantaged cash flows. The goal is to add at least $200 million in railcar assets annually at about 3:1 debt to equity (or 75% ) based on the fair market value of assets. During the quarter, an initial $300 million non-recourse warehouse credit facility was secured, and $129 million in fair market value of assets were acquired from Greenbrier's transaction flow. Over time the entity is expected to grow by at least $200 million in assets annually with a five year target of $1 billion of assets. The intent is to use the asset-backed securities market to refinance the warehouse facility and to convert to permanent financing before 2025 as scale and portfolio balance are achieved. Considerable tax benefits are generated from these investments, which are included in the consolidated financial results this year.
Key information for the consolidated Leasing & Services segment
(In Units)
May 31,
2021
February 28,
2021
Owned fleet
8,700
8,700
Managed fleet
445,000
445,000
Owned fleet utilization
94%
95%
May 31,
2021
February 28,
2021
Equipment on operating lease
$ 446,888
$ 445,451
GBX Leasing non-recourse warehouse
$ 96,576
$ -
Leasing non-recourse debt
202,815
204,722
Total Leasing non-recourse debt
$ 299,391
$ 204,722
Fleet leverage %(1)
67%
46%
(1)
Total Leasing non-recourse debt / Equipment on operating lease
THE GREENBRIER COMPANIES, INC.
Supplemental Information
(In thousands, except per share amounts, unaudited)
Operating Results by Quarter for 2021 are as follows:
First
Second
Third
Total
Revenue
Manufacturing
$ 308,722
$ 202,094
$ 341,939
$ 852,755
Wheels, Repair & Parts
65,556
71,623
80,871
218,050
Leasing & Services
28,711
21,905
27,333
77,949
402,989
295,622
450,143
1,148,754
Cost of revenue
Manufacturing
280,890
201,771
292,464
775,125
Wheels, Repair & Parts
62,984
66,667
73,690
203,341
Leasing & Services
18,444
9,513
8,857
36,814
362,318
277,951
375,011
1,015,280
Margin
40,671
17,671
75,132
133,474
Selling and administrative expense
43,707
43,425
49,239
136,371
Net (gain) loss on disposition of equipment
(922)
(27)
184
(765)
Earnings (loss) from operations
(2,114)
(25,727)
25,709
(2,132)
Other costs
Interest and foreign exchange
11,103
9,568
10,204
30,875
Net loss on extinguishment of debt
-
-
4,763
4,763
Earnings (loss) before income tax and earnings (loss) from unconsolidated affiliates
(13,217)
(35,295)
10,742
(37,770)
Income tax benefit
7,332
21,752
6,914
35,998
Earnings (loss) before earnings (loss) from unconsolidated affiliates
(5,885)
(13,543)
17,656
(1,772)
Earnings (loss) from unconsolidated affiliates
(744)
(378)
2,379
1,257
Net earnings (loss)
(6,629)
(13,921)
20,035
(515)
Net (earnings) loss attributable to noncontrolling interest
(3,343)
4,856
(298)
1,215
Net earnings (loss) attributable to Greenbrier
$ (9,972)
$ (9,065)
$ 19,737
$ 700
Basic earnings (loss) per common share (1)
$ (0.30)
$ (0.28)
$ 0.61
$ 0.02
Diluted earnings (loss) per common share (1)
$ (0.30)
$ (0.28)
$ 0.59
$ 0.02
Dividends per common share
$ 0.27
$ 0.27
$ 0.27
$ 0.81
(1)
Quarterly amounts may not total to the year to date amount as each period is calculated discretely.
THE GREENBRIER COMPANIES, INC.
Supplemental Information
(In thousands, except per share amounts, unaudited)
Operating Results by Quarter for 2020 are as follows:
First
Second
Third
Fourth
Total
Revenue
Manufacturing
$ 657,367
$ 489,943
$ 653,007
$ 549,654
$ 2,349,971
Wheels, Repair & Parts
86,608
91,225
82,024
64,813
324,670
Leasing & Services
25,384
42,680
27,526
21,958
117,548
769,359
623,848
762,557
636,425
2,792,189
Cost of revenue
Manufacturing
581,912
422,309
562,793
498,155
2,065,169
Wheels, Repair & Parts
81,892
84,373
75,001
60,923
302,189
Leasing & Services
13,366
30,830
17,232
10,272
71,700
677,170
537,512
655,026
569,350
2,439,058
Margin
92,189
86,336
107,531
67,075
353,131
Selling and administrative expense
54,364
54,597
49,494
46,251
204,706
Net gain on disposition of equipment
(3,959)
(6,697)
(8,775)
(573)
(20,004)
Earnings from operations
41,784
38,436
66,812
21,397
168,429
Other costs
Interest and foreign exchange
12,852
12,609
7,562
10,596
43,619
Earnings before income tax and earnings (loss) from unconsolidated affiliates
28,932
25,827
59,250
10,801
124,810
Income tax expense
(5,994)
(7,463)
(24,421)
(2,306)
(40,184)
Earnings before earnings (loss) from unconsolidated affiliates
22,938
18,364
34,829
8,495
84,626
Earnings (loss) from unconsolidated affiliates
1,073
1,651
1,040
(804)
2,960
Net earnings
24,011
20,015
35,869
7,691
87,586
Net earnings attributable to noncontrolling interest
(16,342)
(6,386)
(8,097)
(7,794)
(38,619)
Net earnings (loss) attributable to Greenbrier
$ 7,669
$ 13,629
$ 27,772
$ (103)
$ 48,967
Basic earnings (loss) per common share (1)
$ 0.24
$ 0.42
$ 0.85
$ (0.00)
$ 1.50
Diluted earnings (loss) per common share (1)
$ 0.23
$ 0.41
$ 0.83
$ (0.00)
$ 1.46
Dividends per common share
$ 0.25
$ 0.27
$ 0.27
$ 0.27
$ 1.06
(1)
Quarterly amounts may not total to the year to date amount as each period is calculated discretely.
THE GREENBRIER COMPANIES, INC.
Supplemental Information
(In thousands, unaudited)
Segment Information
Three months ended May 31, 2021:
Revenue
Earnings (loss) from operations
External
Intersegment
Total
External
Intersegment
Total
Manufacturing
$ 341,939
$ 7,451
$ 349,390
$ 31,341
$ 492
$ 31,833
Wheels, Repair & Parts
80,871
2,292
83,163
4,173
75
4,248
Leasing & Services
27,333
2,286
29,619
12,280
2,272
14,552
Eliminations
-
(12,029)
(12,029)
-
(2,839)
(2,839)
Corporate
-
-
-
(22,085)
-
(22,085)
$ 450,143
$ -
$ 450,143
$ 25,709
$ -
$ 25,709
Three months ended February 28, 2021:
Revenue
Earnings (loss) from operations
External
Intersegment
Total
External
Intersegment
Total
Manufacturing
$ 202,094
$ 2,425
$ 204,519
$ (17,216)
$ 100
$ (17,116)
Wheels, Repair & Parts
71,623
1,603
73,226
2,433
(14)
2,419
Leasing & Services
21,905
1,113
23,018
6,420
634
7,054
Eliminations
-
(5,141)
(5,141)
-
(720)
(720)
Corporate
-
-
-
(17,364)
-
(17,364)
$ 295,622
$ -
$ 295,622
$ (25,727)
$ -
$ (25,727)
Total assets
May 31, 2021
February 28,
2021
Manufacturing
$ 1,413,590
$ 1,313,819
Wheels, Repair & Parts
265,847
277,788
Leasing & Services
878,743
851,546
Unallocated, including cash
651,987
616,212
$ 3,210,167
$ 3,059,365
THE GREENBRIER COMPANIES, INC.
Supplemental Information
(In thousands, excluding backlog and delivery units, unaudited)
Reconciliation of Net earnings (loss) to Adjusted EBITDA
Three Months Ended
May 31,
2021
February 28,
2021
Net earnings (loss)
$ 20,035
$ (13,921)
Interest and foreign exchange
10,204
9,568
Income tax benefit
(6,914)
(21,752)
Depreciation and amortization
24,769
24,822
Net loss on extinguishment of debt
4,763
-
Adjusted EBITDA
$ 52,857
$ (1,283)
Reconciliation of Net earnings (loss) attributable to Greenbrier to Adjusted net earnings (loss) attributable to Greenbrier
Three Months Ended
May 31,
2021
February 28, 2021
Net earnings (loss) attributable to Greenbrier
$ 19,737
$ (9,065)
Net loss on extinguishment of debt, net of tax (1)
3,596
-
Adjusted net earnings (loss) attributable to Greenbrier
$ 23,333
$ (9,065)
Reconciliation of Diluted earnings (loss) per share to Adjusted diluted earnings (loss) per share
Three Months Ended
May 31,
2021
February 28, 2021
Diluted earnings (loss) per share
$ 0.59
$ (0.28)
Net loss on extinguishment of debt, net of tax
0.10
-
Adjusted diluted earnings (loss) per share
$ 0.69
$ (0.28)
Weighted average shares outstanding
33,605
32,810
"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 "adjust," "allow," "anticipate," "continue," "estimate" "expect," "goal," "intend," "maintain," "outlook," "position," "prepare," "reduce," "will," and similar expressions to identify forward-looking statements. These forward-looking statements include, without limitation, statements about backlog, leasing performance, financing, and future liquidity and cash flow as well as other information regarding future performance and strategies and appear throughout this press release including in the headlines and the sections titled "Third Quarter Highlights," "Business Update & Outlook" and "Supplemental Leasing Information." 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 following. (1) We are unable to predict when, how, or with what magnitude COVID-19, variants thereof, and governmental reaction thereto, and related economic disruptions will negatively impact our business: we may be prevented from operating our facilities; the operations of our customers may be disrupted increasing the likelihood that our customers may attempt to delay, defer or cancel orders, or cease to operate as going concerns; the operations of our suppliers may be disrupted; our indebtedness may increase; we may breach the covenants in our credit agreement; the market price of our common stock may drop or remain volatile; we may incur significant employee health care costs under our self-insurance programs. We may not be able to effectively participate in the economic recovery following the pandemic, if any. The longer the pandemic continues, the more likely that negative impacts on our business will occur, some of which we cannot now foresee. (2) Our backlog of railcar units and marine vessels is not necessarily indicative of future results of operations. Certain orders in backlog are subject to customary documentation which may not occur. Customers may attempt to cancel or modify orders or refuse to accept and pay for products. The likelihood of cancellations, modifications, rejection and non-payment for our products generally increases during periods of market weakness. The timing of converting backlog to revenue is also materially impacted by our decision whether to lease railcars, sell railcars, or syndicate railcars with a lease attached to an investor. (3) Our joint ventures, including our leasing joint venture, may not perform as anticipated or expected. More information on 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 report on Form 10-K and subsequent reports on 10-Q. 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 (loss) 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 (loss) before Interest and foreign exchange, Income tax benefit (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 (loss) 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 Greenbrier Companies, Inc.