Press Releases

Greenbrier Reports Fiscal Second Quarter 2010 Results
PRNewswire-FirstCall
LAKE OSWEGO, Ore.

The Greenbrier Companies today reported results for its fiscal second quarter ended February 28, 2010.

  Second Quarter Highlights
  Financial Highlights:
  --  Revenues for the second quarter of 2010 were $200.0 million, down from
      $287.1 million in the prior year's second quarter.
  --  The Company's net loss for the quarter was $4.8 million, or $0.28 per
      diluted share, compared to a net loss of $7.5 million, or $0.45 per
      diluted share, in the prior year's second quarter.(1)
  --  Net loss for the quarter includes noncash charges of $1.3 million, net
      of tax, or $0.08 per diluted share, for warrant amortization expense
      and amortization of convertible debt discount. The prior period's
      second quarter included a noncash charge of $.6 million, net of tax,
      or $0.03 per diluted share, for amortization of convertible debt
      discount.
  --  EBITDA for the quarter was $15.9 million, or 8.0% of revenues,
      compared to $9.4 million, or 3.3% of revenues in the second quarter of
      2009.


  Liquidity Summary:
  --  The Company ended the quarter with $68 million of cash and $103
      million of committed additional borrowing capacity.
  --  Subsequent to quarter end the Company received a $14 million tax
      refund related to tax loss carry backs.


  Segment Highlights:
  --  New railcar deliveries in the second quarter of 2010 were 800 units,
      compared to 1,300 units in the second quarter of 2009.
  --  Greenbrier's new railcar manufacturing backlog as of February 28,
      2010, inclusive of the GE contract modification, was 4,400 units with
      an estimated value of $380 million, compared to 15,100 units valued at
      $1.31 billion as of February 28, 2009.
  --  The Company currently anticipates restarting new railcar production at
      its Concarril facility in Sahagun, Mexico in the fourth quarter due to
      increased demand.
  --  Marine backlog was $90 million as of February 28, 2010, compared to
      $175 million as of February 28, 2009.


  Second Quarter Results

Revenues for the second quarter of 2010 were $200.0 million, down from $287.1 million in the prior year's second quarter. Gross margin for the quarter was 12.1% of revenues compared to 5.6% of revenues in the prior comparable period. EBITDA was $15.9 million, or 8.0% of revenues for the quarter, compared to $9.4 million, or 3.3% of revenues in the prior year's second quarter.

The Company's net loss was $4.8 million, or $0.28 per diluted share, for the quarter, compared to a net loss of $7.5 million, or $0.45 per diluted share for the same period in 2009. Net loss for the quarter includes noncash charges of $1.3 million, net of tax, or $0.08 per diluted share for warrant amortization expense and amortization of convertible debt discount. Net loss for the prior year's second quarter included a noncash charge of $0.6 million, net of tax, or $0.03 per diluted share, for amortization of convertible debt discount. In addition, the prior period was negatively impacted by a $9.9 million obligation under a new railcar contract, wherein the Company guaranteed the purchaser minimum earnings.

Discussion of Quarterly Results and Outlook

William A. Furman, president and chief executive officer, said, "As anticipated, the second quarter was weaker than our first quarter. Similar to prior years, we expect that the second half of the year will be significantly stronger than the first half."

Furman added, "We are currently experiencing early signs of increased activity and demand in all of our business segments. While overall visibility remains limited, we are seeing improvements in railcar loadings, declining railroad velocity, and declines in the quantity of railcars in storage. Assuming these trends continue, we anticipate a positive impact on each of our business segments in the second half of 2010."

Furman concluded, "We are cautiously optimistic that the macro economy has begun a modest recovery. Regardless of the path this recovery takes, we remain focused on several key objectives in 2010. These include improving the operational efficiency of our facilities while maintaining the flexibility to respond to market demand. Further, we will continue to manage for cash flow and liquidity, and will work to fully leverage our integrated business model. With these objectives in mind, we believe we are well positioned to capture new opportunities as economic conditions improve."

Segment Details

The Refurbishment & Parts segment, consisting of a network of 37 locations, repairs and refurbishes railcars, and provides wheel services and railcar parts across North America. Revenue for this segment in the current quarter was $94.3 million, compared to $121.7 million in the second quarter of 2009. The revenue decline was due to lower sales volumes across all product and service types, as a result of the current economic environment. Gross margin for the Refurbishment & Parts segment was 11.6% of revenues, compared to 11.7% of revenues in the prior comparable period.

The Manufacturing segment consists of marine and new railcar production in Europe and North America. Manufacturing segment revenue for the second quarter was $88.1 million, compared to $145.6 million in the second quarter of 2009. Current quarter new railcar deliveries of 800 units were down from 1,300 units in the prior comparable period. Manufacturing gross margin for the second quarter was 7.3% of revenues, compared to a negative 4.4% in the second quarter of 2009. The gross margin increase was primarily the result of a more favorable railcar and marine product mix and improved production efficiencies, partially offset by less efficient absorption of overhead due to operating at lower levels of production. In addition, the prior period was negatively impacted by $.7 million in loss accruals on future production, $.6 million in severance costs, and a $9.9 million obligation under a new railcar contract, wherein the Company guaranteed the purchaser minimum earnings.

The Leasing & Services segment includes results from the Company-owned lease fleet of approximately 9,000 railcars and from fleet management services provided for approximately 222,000 railcars. Revenue for this segment was $17.6 million, compared to $19.9 million in the same quarter last year. Leasing & Services gross margin for the quarter was 38.5% of revenue, compared to 41.9% of revenue in the same quarter last year. The decrease from the prior year's second quarter was primarily a result of lower lease fleet utilization, reduced lease rates and rate adjustments on a certain contract. Lease fleet utilization as of the end of the quarter was up sequentially to 92.4%, compared to 91.3% at November 30, 2009, but down from 94.3% at February 28, 2009. Gains on sales of leased equipment were $0.1 million for the quarter, consistent with the second quarter of 2009.

Selling and administrative costs were $17.0 million for the quarter, or 8.5% of revenues, versus $16.3 million, or 5.7% of revenues, for the same quarter last year. The increase from the prior period was primarily due to increased costs at our Mexican joint venture due to higher activity levels.

Interest and foreign exchange expense was $12.4 million for the quarter, compared to $9.1 million for the same period in 2009. The current quarter includes foreign exchange losses of $0.7 million, and noncash charges of $1.1 million for warrant amortization expense and $1.0 million for amortization of the convertible debt discount. The prior comparable period included foreign exchange gains of $0.7 million and non-cash charges of $1.0 million for amortization of the convertible debt discount.

Subsequent Events

In March 2010, the Company received a $14 million tax refund related to tax loss carry backs.

Business Outlook

Based on current industry trends, Greenbrier expects business visibility in fiscal 2010 to remain limited. Management continues to anticipate that revenues will be lower in 2010 compared to 2009. EBITDA excluding special charges, however, is expected to be modestly higher in 2010 compared to 2009, due in part to higher expected gross margins in Greenbrier's Manufacturing segment. Similar to previous years, financial results for the second half of the year are anticipated to be significantly stronger than the first half. While the outlook remains cautious in the near term, the Company continues to be optimistic about the long-term fundamentals that support rail and marine transportation.

The Company believes it has adequate liquidity to weather the economic downturn, with favorable debt covenants, no significant term debt maturing until 2012, and much of its term debt maturing in 2015. The Company plans to manage for cash flow and liquidity in both the short- and long-term to ensure a strong capital position prior to key debt maturity dates.

Conference Call

The Greenbrier Companies will host a teleconference to discuss second quarter results. Teleconference details are as follows:

  --  Wednesday, April 7, 2010
  --  8:00 am Pacific Daylight Time
  --  Phone #: 1-630-395-0143, Password: "Greenbrier"
  --  Real-time Audio Access:  ("Newsroom" at http://www.gbrx.com/)


Please access the site 10 minutes prior to the start time. Following the call, a replay will be available on the same website for 30 days. Telephone replay will be available through April 24, 2010 at 1-203-369-3384.

About Greenbrier Companies

Greenbrier (www.gbrx.com), headquartered in Lake Oswego, Oregon, is a leading supplier of transportation equipment and services to the railroad industry. The Company builds new railroad freight cars in its three manufacturing facilities in the U.S. and Mexico and marine barges at its U.S. facility. It also repairs and refurbishes freight cars and provides wheels and railcar parts at 37 locations across North America. Greenbrier builds new railroad freight cars and refurbishes freight cars for the European market through both its operations in Poland and various subcontractor facilities throughout Europe. Greenbrier owns approximately 9,000 railcars, and performs management services for approximately 222,000 railcars.

"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: This release may contain forward-looking statements. Greenbrier uses words such as "anticipate," "believe," "plan," "expect," "future," "intend" and similar expressions to identify forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, turmoil in the credit markets and financial services industry; high levels of indebtedness and compliance with the terms of our indebtedness; write-downs of goodwill in future periods; sufficient availability of borrowing capacity; fluctuations in demand for newly manufactured railcars or failure to obtain orders as anticipated in developing forecasts; loss of one or more significant customers; customer payment defaults or related issues; actual future costs and the availability of materials and a trained workforce; failure to design or manufacture new products or technologies or to achieve certification or market acceptance of new products or technologies; steel price fluctuations and scrap surcharges; changes in product mix and the mix between segments; labor disputes, energy shortages or operating difficulties that might disrupt manufacturing operations or the flow of cargo; production difficulties and product delivery delays as a result of, among other matters, changing technologies or non-performance of subcontractors or suppliers; ability to obtain suitable contracts for the sale of leased equipment and risks related to car hire and residual values; difficulties associated with governmental regulation, including environmental liabilities; integration of current or future acquisitions; succession planning; all as may be discussed in more detail under the headings "Risk Factors" on page 11 of Part I , Item 1a of our Annual Report on Form 10-K for the fiscal year ended August 31, 2009 and "Forward Looking Statements" on page 3 of our Quarterly Report on Form 10-Q for the fiscal quarter ended February 28, 2010. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's opinions only as of the date hereof. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements.

EBITDA is not a financial measure under GAAP. We define EBITDA as earnings from continuing operations before special charges, interest and foreign exchange, taxes, depreciation and amortization. We consider net cash provided by operating activities to be the most directly comparable GAAP financial measure. EBITDA is a liquidity measurement tool commonly used by rail supply companies and we use EBITDA in that fashion. You should not consider EBITDA in isolation or as a substitute for cash flow from operations or other cash flow statement data determined in accordance with GAAP. In addition, because EBITDA is not a measure of financial performance under GAAP and is susceptible to varying calculations, the EBITDA measure presented may differ from and may not be comparable to similarly titled measures used by other companies.

  (1)   Net loss is now referred to in the Consolidated Statements of
        Operations, in accordance with GAAP, as "Net Loss attributable to
        controlling interest"



                              THE GREENBRIER COMPANIES, INC.

  Condensed Consolidated Balance Sheets
  (In thousands, unaudited)

                                             February         August
                                                28,             31,
  Assets                                          2010         2009(1)
                                                  ----          ------
     Cash and cash equivalents                 $67,907         $76,187
     Restricted cash                             1,149           1,083
     Accounts receivable                       115,978         113,371
     Inventories                               157,104         142,824
     Assets held for sale                       20,208          31,711
     Equipment on operating leases             315,839         313,183
     Investment in direct finance leases         7,707           7,990
     Property, plant and equipment, net        125,310         127,974
     Goodwill                                  137,066         137,066
     Intangibles and other assets               92,830          96,902
                                            $1,041,098      $1,048,291
                                            ==========      ==========

  Liabilities and Equity
     Revolving notes                           $17,266         $16,041
     Accounts payable and accrued
      liabilities                              163,630         170,889
     Losses in excess of investment in de-
      consolidated subsidiary                   15,313          15,313
     Deferred income taxes                      76,927          69,199
     Deferred revenue                           13,625          19,250
     Notes payable                             527,191         525,149

     Stockholders' equity controlling
      interest                                 219,481         223,726
     Noncontrolling interest                     7,665           8,724
   Total equity                                227,146         232,450
                                               -------         -------


                                            $1,041,098      $1,048,291
                                            ==========      ==========


  (1) As adjusted for the effects of Accounting Standards Codification
  (ASC) 470 - 20 Debt - Debt with Conversion and other Options with
  respect to the Company's $100 million of outstanding convertible
  debt. This guidance was effective for the Company on September 1,
  2009 and requires retrospective application. The prior year
  presentation was adjusted  to conform to the adoption of ASC
  810-10-65 Consolidation - Transition related to SFAS No. 160,
  Noncontrolling Interests in Consolidated Financial Statements -an
  amendment of ARB No. 51.




                                              THE GREENBRIER COMPANIES, INC.

  Consolidated Statements of Operations
  (In thousands, except per share amounts, unaudited)


                          Three Months Ended           Six Months Ended
                             February 28,                February 28,
                             ------------                ------------
                            2010        2009(1)      2010       2009(1)
                            ----         ------      ----        ------
  Revenue
       Manufacturing     $88,065       $145,574  $148,143      $248,292
       Refurbishment &
        Parts             94,329        121,681   187,310       253,960
       Leasing &
        Services          17,556         19,877    36,189        41,010
                          ------         ------    ------        ------
                         199,950        287,132   371,642       543,262

  Cost of revenue
       Manufacturing      81,608        152,003   137,455       258,926
       Refurbishment &
        Parts             83,387        107,427   166,673       226,754
       Leasing &
        Services          10,789         11,547    21,707        23,476
                          ------         ------    ------        ------
                         175,784        270,977   325,835       509,156

  Margin                  24,166         16,155    45,807        34,106

  Other costs
       Selling and
        administrative    16,958         16,265    33,166        32,245
       Interest and
        foreign exchange  12,406          9,146    23,517        20,917
                          29,364         25,411    56,683        53,162
  Loss before
   income taxes and
   equity in
   unconsolidated
   subsidiary
                          (5,198)        (9,256)  (10,876)      (19,056)
  Income tax
   benefit                   944          1,698     3,444         6,604
                             ---          -----     -----         -----
  Loss before
   equity in
   unconsolidated
   subsidiary
                          (4,254)        (7,558)   (7,432)      (12,452)

  Equity in
   earnings (loss)
   of
   unconsolidated
   subsidiaries
                            (131)          (251)     (314)          183

  Net Loss                (4,385)        (7,809)   (7,746)      (12,269)
      Net (earnings)
       loss
       attributable to
       noncontrolling
       interest

                            (367)           351      (250)          919
                            ----            ---      ----           ---

  Net loss
   attributable to
   controlling
   interest              $(4,752)       $(7,458)  $(7,996)     $(11,350)
                         =======        =======   =======      ========

  Basic loss per
   common share           $(0.28)        $(0.45)   $(0.47)       $(0.68)
                          ======         ======    ======        ======

  Diluted loss per
   common share           $(0.28)        $(0.45)   $(0.47)       $(0.68)
                          ======         ======    ======        ======

  Weighted average
   common shares:
      Basic               17,113         16,694    17,100        16,661
      Diluted             17,113         16,694    17,100        16,661


  (1) As adjusted for the effects of ASC 470 - 20 Debt - Debt with
  Conversion and other Options with respect to the Company's $100
  million of outstanding convertible debt. This guidance was effective
  for the Company on September 1, 2009 and requires retrospective
  application. The prior year presentation was adjusted  to conform to
  the adoption of ASC 810-10-65 Consolidation - Transition related to
  SFAS No. 160, Noncontrolling Interests in Consolidated Financial
  Statements -an amendment of ARB No. 51.




                                         THE GREENBRIER COMPANIES, INC.

  Condensed Consolidated Statements of Cash Flows
  (In thousands, unaudited)

                                                       Six Months Ended
                                                         February 28,
                                                        2010        2009(1)
                                                        ----         ------
  Cash flows from operating activities
    Net loss                                         $(7,746)      $(12,269)
    Adjustments to reconcile net loss to net cash
     provided by operating activities:
      Deferred income taxes                            7,727          2,807
      Depreciation and amortization                   18,616         18,984
      Gain on sales of equipment                        (951)          (358)
      Accretion of debt discount                       4,263          1,879
      Other                                            1,485            276
      Decrease (increase) in assets:
        Accounts receivable                           (2,913)        28,702
        Inventories                                  (14,600)        28,622
        Assets held for sale                          11,861          8,561
        Other                                          2,268            135
      Increase (decrease) in liabilities:
        Accounts payable and accrued liabilities      (6,810)       (22,079)
        Deferred revenue                              (5,410)           562
                                                      ------            ---
    Net cash provided by operating activities          7,790         55,822
                                                       -----         ------
  Cash flows from investing activities
    Principal payments received under direct finance
     leases                                              235            211
    Proceeds from sales of equipment                   3,069          1,400
    Investment in unconsolidated subsidiary             (450)             -
    Decrease (increase) in restricted cash               (66)           244
    Capital expenditures                             (19,616)       (15,148)
    Net cash used in investing activities            (16,828)       (13,293)
                                                     -------        -------
  Cash flows from financing activities
    Changes in revolving notes                         1,541         11,283
    Net proceeds from issuance of notes payable        1,712              -
    Repayments of notes payable                       (4,041)        (7,394)
    Dividends                                              -         (2,001)
    Investment by joint venture partner                    -          1,400
    Other                                                  -          2,414
    Net cash provided by (used in) financing
     activities                                         (788)         5,702
                                                        ----          -----
  Effect of exchange rate changes                      1,546        (13,122)
  Increase (decrease) in cash and cash equivalents    (8,280)        35,109
  Cash and cash equivalents
  Beginning of period                                 76,187          5,957
                                                      ------          -----
  End of period                                      $67,907        $41,066
                                                     =======        =======

  (1) As adjusted for the effects of ASC 470 - 20 Debt - Debt with
  Conversion and other Options with respect to the Company's $100
  million of outstanding convertible debt. This guidance was effective
  for the Company on September 1, 2009 and requires retrospective
  application. The prior year presentation was adjusted  to conform to
  the adoption of ASC 810-10-65 Consolidation - Transition related to
  SFAS No. 160, Noncontrolling Interests in Consolidated Financial
  Statements -an amendment of ARB No. 51.



                                         THE GREENBRIER COMPANIES, INC.

  Supplemental Disclosure
  Reconciliation of Net Cash Provided by Operating Activities to EBITDA
  before special charges(1)
  (In thousands, unaudited)

                             Three Months Ended          Six Months Ended
                                February 28,               February 28,
                                ------------               ------------

                             2010          2009       2010           2009
                             ----          ----       ----           ----
  Net cash provided by
   operating activities      $2,693       $78,196     $7,790        $55,822
  Changes in working
   capital                   14,375      (74,967)     15,604        (44,503)
  Deferred income taxes     (8,954)          (647)    (7,727)        (2,807)
  Gain on sales of
   equipment                  100            69        951            358
  Accretion of debt
   discount               (2,147)          (954)    (4,263)        (1,879)
  Noncontrolling interest    (367)          351       (250)           919
  Other                   (1,228)           (78)    (1,485)          (276)
  Income tax benefit         (944)       (1,698)    (3,444)        (6,604)
  Interest and foreign
   exchange                12,405         9,146     23,517         20,917


  Adjusted EBITDA from
   operations             $15,933        $9,418    $30,693        $21,947
                          =======        ======    =======        =======

  (1) "EBITDA" (earnings from continuing operations before special charges,
      interest and foreign exchange, taxes, depreciation and amortization)
      is a useful liquidity measurement tool commonly used by rail supply
      companies and Greenbrier.  It should not be considered in isolation
      or as a substitute for cash flows from operating activities or cash
      flow statement data prepared in accordance with generally accepted
      accounting principles.

First Call Analyst:
FCMN Contact: margaret.vallejos@gbrx.com

SOURCE: The Greenbrier Companies

CONTACT: Mark Rittenbaum of The Greenbrier Companies, +1-503-684-7000

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