The Greenbrier Companies, Inc. (GBX) 7 Apr 202020 Q2 Earnings call transcript

Hello and welcome to The Greenbrier Companies Second Quarter of Fiscal Year 2020 Earnings Conference Call.

Following today's presentation, we will conduct a question-and-answer session. Each analyst should limit themselves to only two questions. Until that time, all lines will be placed in a listen-only mode. At the request of The Greenbrier Companies, this conference call is being recorded for instant replay purposes.

would turn I to conference time, Mr. this like the to over At

President Roberts, Treasurer. Roberts, and Justin Vice Mr. you begin. may

of Heidi. you, our Good everyone fiscal quarter and call. XXXX Thank conference welcome morning second to

will manage call, and update Lorie President the Vice on priorities Furman; discuss President Greenbrier’s today's CEO, Downes, They then CFO. we and Tekorius, I'm Chairman near-term and Greenbrier’s On the and through by for will pandemic, Bill second and Adrian we COO; the COVID-XX Senior joined results provide as an quarter.

will introductory remarks, up our questions. Following for we open the call

cause In section release and of includes key to our on some discussed XXXX made of from will Litigation today a in statements important call this information supplemental be can by factors the morning today, posted discussion found Private any in Greenbrier. website. forward-looking meaning behalf those of or Matters addition which the the could we conference statements actual press within our Securities metrics slide XXXX. today's financial differ of of IR data, forward-looking include the additional materially the presentation beyond issued on Throughout to Greenbrier’s Reform results describe expressed Act on that and in

I'll And Bill. it pass with that, to over

Thank everyone. Justin you, and good morning

here health individuals forces in our Guard armed world I around many the line us America. of National frontlines today. with begin, moment to call professionals, are those health in emergency the and government on the extend take work we pandemic want battling responders, officials As and and this a the who the and I to everyone good wishes of for on the out also

a differently. at now health businesses employees crisis, thank obviously in offices factories, economic under industry world an but only is home, all the essential in affecting our Finally, The status. crisis I severe each not operating Greenbrier and

under to a allows backlog you As operate in our the with to us ability industries protect maneuver and way circumstances. in hear continue a liquidity businesses factories strong other today, current cannot will and hand to other

operating, priorities We're the the of North America. all operate other now taking jurisdictions In U.S. operations the face essential teams. for implemented Department is extraordinary to We behavior plans and and immediately including workforce; range management to operating, through priorities: over and of essential orders the defensively real the at Greenbrier's service and unknowable period industry agencies, to two a and the abroad. of as at challenges in of of wellbeing swift We I manage infrastructure by one, shifted its Security where ensure risk and all Number challenges. security to two, and sites, and and our and international and constitute defined provide shareholders. sites provide the number incident safely for actions assembled under in the Greenbrier a U.S. We're and economic our that enterprise hand. positioned a essential the this that our manufacturing operating to safely and pandemic, business in quarter United liquidity are unknown response those railcar home safety presents States assessed manage we essential time quickly Homeland and contingency issued and of stay-at-home including businesses to emphasize

world. vital communities the and we the nations supplies Transportation all including Railroad to around our United goods the authority of and supply Department the will Jones Board, in of that perform maintain agencies. of national Act Defense to medical Greenbrier fuel federal and under functions the and system Surface vital other Greenbrier transportation Transportation, the Federal under regulatory statutory then the States, marine We supports our Administration, help operations. the the of Department in Accordingly, and food, delivery operations to

We will the in keep system. functioning our those smoothly railroad nations and nations

protect of determined welfare employees, are we economic the conditions. our wellbeing with the of market enterprise Along the to and during economic unprecedented

discussed laser-focused liquidity. are today, on As our we release in earnings

goal five months remaining in year, is in liquidity produce $X ending available billion within of to reliable Our fiscal of the our August XXXX.

as continued the onset of and Adjustments Mexico locations. railcar the already initiative, workforce and Services lower global begun to workforce. Since global second largely this the to September began excess levels manufacturing we XX% in idled we had through capacity to Before facilities, third into began pandemic, in have in adjusted aftermarket footprint that equal anticipated North levels staffing of of approximately of Greenbrier’s we last at well we activity. Rail and operations quarter due our manufacturing as of production reduce demand size Greenbrier to year, American the reduced as reductions total

exceed reductions would steps time. workers over These now another X,XXX XXX we Yesterday, took workers. which add

of have They left business. this no who entire colleagues their sacrifice. our us We we spent Our with period forget. many people each a recognize in of employee person this made is are own. are a to never name This this a careers that and affected fiscal is fact success; who shared important family. fault through Each their a contributions year a leaving is

and of reduction pay Board a We've for metrics their payments of reduced and a of compensation the that the cash flow a each my of As will our earnings reduction work of not with if frozen management. from voluntarily have Board salary discretionary we and meet request. members in Directors I immediate for along result, Directors, committee taken I performance Moreover, compensation. automatically targeted bonus has can do curtailed increases cash voluntary $XXX,XXX;

seasoned felt business. to a dealing a difficult rodeo. seen. relief it that first in company is that difficult automatic be to times is remains times well for baked This an our in with not But in is All cyclical

Greenbrier’s adapt flexible market business to quickly is changing conditions. to enough

this this and America, is X,XXX in be demonstrated about Council. specifically America hold of markets cars of earnings, that orders, is franchise by number customer orders. I’m fact in we in the good a earnings the North position to of North from one South Our generated but more of America or abroad the and Cooperative half that by strong, in three not Gulf are as were strength half, The players quarter's -- two And franchise Brazil, a sure core number built Europe.

With and of transformed the through past. the did efforts. strong stream. but our experienced only a management team, in scale we've combined stronger out the has Historically, of dramatically revenue as our Greenbrier again our through recover, Not diversification focus, execution, hard increased markets we we and difficult work, come business result of navigated

of we know the our plays how out, this role Although transportation this year industry remains time, is in matter a remainder vital. stressful no the

-- and to other layoffs and to to its Beyond cost shrink balance Adrian actions later. committed take obvious and Lorie reductions, will its sheet, little more balance profile, improve speak to aggressive a we’re Greenbrier’s this sheet

our we backlog production for open very with both current capacity our calendar the backlog, extends year year. the of and through left calendar Based fiscal little are and the fiscal marine year. Gunderson, on remainder At

industry virtually they improve. source put at have that and never at manufacturing and have production -- very current resilience storage. All times in production stretches backlog in reliable to facilities. one These customers as dynamics cars backlog difficult large long-term beyond. and to wavered times our units economic a Our provides fulfilling even rate conditions are provides an we operate multiyear commitments, railcar and stability into of of XXXX in if A bridge

case. to to to I the stress addition look sheet many we have liquidity, worst liquidity goals Greenbrier’s tested we mentioned, and at have scenarios In our balance very ensure run

we this earnings guidance, suspended managing to we're all we face have times. reasonably know resolve. the also anticipate, take years and how remain we We stability, we confident for its nor Today, we factors prepared business, While Greenbrier’s know, do and new adapt others of economic on emerge cannot profitable. necessary the to but We’ll expect together. may are the to this to remove risk activities will value is financial means crisis restore economic focus evolve through shareholder preserve not control our can [ph] within worst and realities. and Scenarios come. biggest difficult to our protect we're those are core the -- base, anyone essential to that manage actions we This

your Now, over you Lorie comments. to for

global morning, end shifted of the everyone, landscape. briefly thank although provide and additional for seems quarter, you February us. quarter to on very that to Good I'll detail joining the a Bill. we've XX, the world admit our and some lifetime has you, I shifting The Thank pivoted like respond have to ago. quickly

due rationalizing Over railcar for sequentially freight, new and to has commodity PSR the freight have speeds almost including resulting been nearly overhead conditions, reduced in activity. rail Demand anticipated levels lower six loadings, months to disputes, response aftermarkets in and significantly categories. months, from macroeconomic production capacity we've last of of demand weakened which dropped trade train implementation XX faster all the and

by over COVID-XX collapse XXXX. important capacity of and we The XX,XXX lines a builders but to were to industry to backlog in supported railcars, taken North pandemic that present have and adjusting production markets. note in conditions in America It's slow steps were these prior remains the all global the oil

X,XXX originating brief health adjust of units international international as of in we and over the of to received joint railcars the units of the were XX% and quarter sources orders X,XXX ensure accounted the Arabia Saudi effort the a quarter, a continued operations those be markets. over American orders kingdom were needed These And part valued $XXX recap We a X,XXX this for to built for in to Greenbrier. deliveries our approximately commercial long-term as serviced and a about North to quarter, million. from for and customer in of activity will

remains the rates our valued strong adjusted manufacturing producing ARI quality railcars at group units to perform facilities profitably, $X.X were at and manufacturing performance demand safely, improved our production even And as continued billion. declined. worldwide backlog in Our XX,XXX high American Operating quarter. North at

in and operations performed strong. Brazilian our and European as was activity order expected QX Our

in executed reflection repair is some in Notably, the remedial over Brazil in fiscal European we a order and months. multiyear both the rightsizing from improvement we XXXX. in benefiting XX that taken are received our operations of actions The the many years Brazilian first and our operations last continued

activity. activity percentage benefited The volumes, revenue Parts to operations XX% revenue range. in Wheels quarter this from externally as syndication caused than a as winters. And to XX% railcar lower sourced a & gross past leasing reminder, our pressured to compared of higher its seasonal volumes percentage margin although leasing's be their included And typical the were

segment’s externally syndication leasing our percentage the Excluding was sourced XX.X%. activity, margin

welfare. meeting the And protect the daily the currently COVID-XX to and all cleaning global through with maintaining operations screenings are deep health exceeding readings, under health or business all CDC’s and workforce, locations. respect mandate businesses temperature alongside dual pandemics, expanded at We're of social Greenbrier including has operating implemented recommendations. distancing, operating ensuring split our continuity shifts, response To enhanced to a employee

As role that an infrastructure, network. of essential global the its business stability to facilitate supports supply continued fulfilling dedicated to Greenbrier’s transportation the

its and fuel ensure the of food, helping delivery to the to take of employees and vital seriously. communities very supplies responsibility goods medical Greenbrier including

you focused overheads and expenses general nonessential addition a we operate, will to variety continues to eliminating strategic actions from evaluating be through liquidity. capital As in expenditures, and actions. accomplished ensuring aggressively administrative increasing and including This heard other the business Bill, our are on of reducing

We the current more a come stronger, through expect to resilient crisis Greenbrier.

management a executing are described. Directors developed strategy but we the with in long-term of team, Bill priorities near-term the Board that confident our As on focused remain

to over you, Now, Adrian.

good and Lorie, morning, you, Thank everyone.

on the available slides press As website. financial release our and a reminder, in supplemental quarterly is information

revenue. which for quarter backlog per included in $X.X EBITDA our to attributable million $X.XX of margin of the adjusted payment and approximately deliveries is A earnings and in to was revenue of net million Brazil; or tax of XX.X% quarter million Highlights includes million flexibility find or share integration or $X.XX hallmark to units, attributable $X.X aggregate Greenbrier Greenbrier net $XXX XX.X%; $X.XX profitability. million of units which contract needs. of adjusted the strengthened of customers' XXX X,XXX or per net quarter gross $XX.X expenses, related earnings and per to win-win a of solutions modification tax, of the $XX.X Greenbrier share million $XX.X the Net our excluding of second share, of include

will the we shifting uncertainties to targets in not million We the of successfully fiscal work synergies and quarter the priorities, target. $XX this synergy Because continue acquisition of time, $X.X achieved million $X.X current in XXXX we related of pre-tax reaffirming are towards at and to cost our million year-to-date. this although ARI

cash, late liquidity at have significant million was February which $XXX includes Total XXth million, $XXX debt and of we XXXX. maturities no until

variety a we already, are on liquidity, actions of of $X expand call significantly As working the you to billion. with heard through target a

governmental our Act. to also existing a We tax are available the these examining including payroll utilize plan result in of provision Greenbrier friendly We deferral like various employee of to possible the employee as extent modifications process programs and of employees, and the programs where fullest funds the to the beneficial. CARES

to stock business XX our Directors Today, balance price. a deployment declared of periodic X.X% of with Greenbrier on for a value. represents which long-term simultaneously consecutive shareholder share, and to Greenbrier’s create Board of remains increases. orders committed per we're $X.XX dividend dividend of based protect quarterly yesterday's closing announcing capital a a yield has

As has are management a managing times. history guidance long for we suspending the our release, Greenbrier’s team announced earnings volatile prior in our of through year.

taken remain have precedent convinced so have long-term described the has and pandemic the is uncertainty without today the strength. we basis, actions actions Company will for COVID-XX planned and far proactive a created significant we While that we on the position global

open questions. we'll for call the Now,

[Operator Long. Instructions] Justin from question First comes

line Your is open.

taking forecast and cancellation in morning. also, the just the month or discussed for play if that that I capacity bigger the things risk you've or build XXXX that of from mid on of prepared do start you're or production seen appreciate units the Thanks. could range. I'm planning talk to curious, standpoint. curious FTR the you’re what about XXXX remarks. to think And the a and some that? in upside you questions. railcar any then downside back about as in lowered Good deferral type you XX,XXX an picture the you've just anticipate of risk And the cutting any backlog to rate perspective or so? if backlog, to low and their industry your out you Is Maybe from on last anticipating you recently has industry the

Sure.

has is out supplement. iterations and expected deliveries XXXX and I'm several going years. Justin. everything FTR deliveries sure outlook look on, morning, XXXX. hard of I'll say to like in that's nice Good gone next couple to will really it the of think industry dropping now, hear perspective, Bill voice. Right So, with certainly an start your that It's From specifically what might I through

is at historically wonderful the be and is can certainly group things is where happens. be team then the when We’ve the very upside. in particular look that responsive it our opportunities of Absolutely to seen that numbers markets next might is our That's think, they're one I reasonable we the something across you numbers falling, that thing that being management the present as projecting good the believe manufacturing and is our in years. is that themselves. sky we there predicting

those can with team commercial so closely working focused of remaining Our our customers is we that very and flexible take advantage opportunities. on

So, continue optionality. slow that's stopping us can as us we production to think why you that we see If opposed all at in fairly slow rate, together. a gives it

don't types, car point then how of time overly can backlog, about it that point and second this again, different the your to you poured and anything we've question we're something. backlog in turning looking variety we work risk types overly car we not about as in about, at be concerned broad and then And we're concerned a at through building have this time, -- that the in is but the in

of activities. history like very at in issue customers a future with modify of we But a backlog is we're that good timing. types time, a solid our and have we that to position think, or there good delivery may or concern is our this a indicator if need at an I feeling point look working raise again, car closely they

The not whom your occur, had institutional concern, Greenbrier only investors, our by oil strong oil and would investors, you only add, sand while but of we've for cars, question, obviously the market for have rail thank the I -- is and of do. mentioned chemical doesn't But manage for a number that business, many of and few. concentration, we a things thing Lorie is a volatility

you we're in profitability backlog are improve rules. service our our the -- there. in factories kind going a the team nimbleness think, draw of that thing But, improve the can that that. it is not more the our think strongest showed we commercial I We flow with and under another operate but very immediate things portfolio is the thing. is we're cash to this something work done deal that backlog fact of have the qualitative of future. we'll sense do So, in Obviously, the do focused the But, was mean customer customers. to the try cancellations essential not got, plus seeing on aspect we we've to our great And only

can That's of headcount for you was of clarity then, comment Okay. Bill you of get what in getting SG&A you've you the I made what's really I into give guidance suspension environment. and totally control us to profitable? SG&A. some things baked look expecting or that the when on can there understandable reductions seen. had you you remain year, question Thanks. helpful. Is and And that you on that think the at the you're second about type any this expect But this

should that. address Lorie, you

be of want numbers think, there. throwing out to I cautious we

particularly resilient. factory not categories It's people, I would you I about all what like said, to I have Lorie. it, We But -- to be have to profitable. know, already think had. instructions operations be we As going don't mean. don’t expect -- reductions we SG&A do Manufacturing say just are G&A in to I expect

Thank good That a was Bill. in. you, lead

the had months. that number lightly board. over the of across we've looking We let go are six take to production don't last We the workers

coupled out guidance. there willing the say, we're percentage it's are to would not goal to target going our would be say SG&A, to I we digit is specific since I suspending be double while that the are put reduction that can going things So, a in costs, particularly that oftentimes can resizing here as scaled in with looking of we're types some of North But, are overlooked. also which activities America, overhead there at down. our manufacturing overhead get footprint, be

rates. that's we're reductions scale both workers that do We as how digits. in overhead workforce, in where the some the that's seeing compensation, played be That's double manufacturing the And travel have we mentioned that our as some on will well adjust, a headcount Bill believe to they've his the the to reduce the line know margins out. production compensation, Board our regarding clearly things big you of So, that SG&A pleased well remained other to because SG&A have as going restrictions, impact going forward. to way

a we'll call other cost. have where some We at areas looking be hiring back and freeze we can

you. Thank

Next Poliniak. from question comes Allison

is Your line open.

morning. begin want I you Hi, Lorie, thought. guys. of guys and to trying follow to Good them. with to addressing were train that just Obviously, operations support some fix on of

you're do I step hard to you I you at As support probably a dealing terms sort out you foundation on you think back, of coming structurally guys the what of daily with thinking can it's of much are as in basis. can mean, Greenbrier this? impact, this the comment and point? even stronger maybe of that you know make today general obviously But, just because

manufacturing Absolutely. our we about our core a group We're this trying and lot focus commercial come stronger. to particularly right and operations thinking now of make, out COVID-XX when

forcing is, pandemic I us think, to we how rethink interesting about is one it work. of things the very this

you think here of telecommutes. can we while in I much of XX% offices you've our our our continue Lake probably services how it’s amazing If really Allison, Oswego, in -- workforce been and

going foundation Metropolitan Charles Dallas, operations. have be our or So, we St. in that really have to to best we Whether core is and there to be I to how support even here that some area, are we use in how don't will a about Portland think solid rethink to our folks our in the supporting we think having for costs we the that. do support folks our the that that we that realize on we've we got operations what down are to how the have to And to going the thinking incur. continue and technology a make that base certain brightest build maybe workforce

a on -- heard just unclear then in usual that two touched guess? And slip weeks a shutting there obviously, color there sort industries a some Any this near-term you know I was on Brazil closing Is to of I as preparing Great. environment, you for Brazil, I for or there. that we've it is stoppage guys down or Europe, business today. me are just in guess on because

seems usual basis. can It around today. approach because we business the change to more that country one things, yes, And a and extent you operate is those do every Right. of have as globe, a the the can approaches on interesting to different daily

in there. But, rail will been governmental believe via that wood, touch everything As We work. essential that it fine good do our to the to go and officials health to That started operations implementing the of just additional do down operate just workers screening that service and our I have going one measures on, we understand we an continue to our transportation monitor continue be today, encourage work. early places to will continue that. Brazil government employees we'll the be was support probably has

that know, last right-sized operation we've As you year.

So, bench, more America. a modest than in rates they their you thin here fairly and North a operate are able see are production to bit would with

we'll just watch to have So, and wait.

has a great the of I'd relationship with to the in U.S. is essential Most the that Western are administration industries. an Brazil. U.S. shown and lead just in It following interest like countries on essential Brazil. of in current Brazil, world industry deal emphasize

of equipment build Brazil. builder exports So, transportation. the in much the we of relies economy their We're on largest their and

our Brazil those and expect place diplomatically encourage occur. -- that government continue we I we're rules Europe, So, own in to with and to to think with working

Thanks. safe Stay Great. That's everyone. helpful.

you. Thank

you. Thank

Bascome from Majors. Next question comes

Your line is open.

the growth of little a really Thanks channel. to how some several these us of any much slated embedded you over of And today the in for channel? give and of an Yes. years, sort taking pretty now. for -- yours Can buyer here? the wanted customers piece the are my you that a your bit backlog responding model syndication I of talk it's important how That's last was of of financial about Thanks. are been indication question here. indication

or last address general, see the a we distribution there. still possibly question. Adrian Lorie In strong network let I'll

I short if an in we question can business because think, fact. ago, business These We can I peculiar. it's American asset. is in will personally It’s XX-year a we sink don't portfolios long that a interesting assets evolved believe leasing borrowing long be Tigerair they you in leasing and on as come haunt railcar can have to create and the the ship. car business. to learned North also sell and them lending can back

the that have that be are margins, in model flow, extra create leases can and leases deployed Our as leases so set create and cash, value we system to and have. up point we is cash liquidity out quality those you to

of existing week, closed one last as late our a loyal companies a As just deal that companies, a customer. we is portfolio portfolio million $XX with leasing

work All including whom companies, multiyear of customers are fulfilling agreements, with who obligations. our leasing we have their closely,

accepting I in have have fund we market or ABS funds were good relying So, that we're are the a and nature, that? And there. where who do weaker they and business, partners much we mixed Lorie, think about If more pulled. If we we that We're a are it their But bit little still we of well. doing to bag. we on want the nobility firm shape commitments have that market, in position. you something were be think to have solely orders. would talk think in I

XX I backlog say a would XX% this less our market is syndication time. doing in only it scan of our at of just Feb And into Sure. than quick detail, of going point backlog,

That's great news.

to of build the was sounds in $XX So, hearing I you deal that sold in Am like Bill. subsequent it that million quarter end inventory right? some the mentioned,

Yes.

held in going down, not particular balance move to syndication, as to anything that's a as I up you of syndication times, sort on it's at of some different more XX know put market. that's when does together Right. And those are item a railcars of over sheet, produced the to that the variety of a it if our and and for car last on you that being indication going packages. were But types X know, for -- we're you result line necessarily trend line quarters, look often to cars don't do an packaging together when

And again, the majority those to receive market X-year, normal origination of margin are even money of X sell attached. syndicate, a in be just a and attached cash XX-year would they them good customers, them. leases, are or to could the for what Today, we good those good and flows X-year, have

equity ratio. in but point in has one-to-one simply it we're a the moderate I'd embedded leasing So, our way, debt business, a in that also out that balance still with sheet

have equity, market cap. aside net book value, setting billion in a $X.X We our

-- amount or I low have the of We a guess, also $X very so. billion debt, a about at

still cleared. returning transparent those in above who have So I continue more more future, in the to Street this this think, of to -- look for the The like portfolio, our We're have systems downturn the far rapid for amount. and at and to you to our make attractiveness in leasing way if try and going we're rapid is going shareholders. clarity -- leases this and rapidly

billion to you echo the of you hoping $X order I to in access question liquidity. Bill, answer. on a mentioned, of on related detailed If Thank for short that. the side funding worth have could just

today you. think that I $XXX Can think Thank just said give what us million. you other million $XXX at sneak could about you at look you you're maybe peek a like?

unless that, Lorie some Lorie. that, generally make through you walk I let take going me CapEx… could I’m Yes. want comments, to

our our I various Adrian that all of uncertainty. thinking this as we to up or -- towards the and thanks we've look time Justin, eyeballs Bill Treasurer, and would liquidity you'll all or in I'm say, supplement sure that can I'll about well been ways can

putting we're been more the So, lot we harder. of the on have putting items about that significant already one brakes, CapEx the thinking a is brakes on

at were we're enter can suspect going XX-Q that, versus just or supplemental back you XX, later And and this hit to If if would that don't CapEx saying go fiscal filed flip you're a gets we expect and the year be would thinking, at when what down we our I as we it's look we're even that as switch at where I going going we're usual. looking -- come August do showing to slides. in we're it business the when we what to today, from now, further

that we're certain on -- from equipment time really a perspective that we're a possible going in capital and plant think to capital to the I property, come. a focused for best way from making deploying be

about, I would nearly Additionally, we're the probably could and like in much what CapEx there overhead productions. G&A we say as that expecting be be as talked would reductions.

a will that get of of Some momentum. take little bit to time

year spending adjustments seeing lower as reduce first being demand. anticipating. were We to actually we rates what the and we in are comes lower our that making a fiscal of half production than levels initially this lot of were Again,

a credit credit looking And the avenues is some of under where that our we access I capital are we'll at couple existing other out, be existing and at consider what figuring can and things there facilities are our that strategic additional looking of facilities. initiatives,

for just base. So, operating utilizing our not as as fingertips out these what well is amendments, evaluating have at these are going we currently not This are our debt. new

we fairly would financing don't not other the off some a of maybe be we $XXX credit are tightened unusual things, are not talking We're deal. -- looking these of course way. up, bucket for at tapping find have $XXX example. and some And markets financing, sizable top The markets if that a a there any we're markets in million, number good than open. about million, particular There's

if it So, should we all non-core you these businesses, conserving be at But strategic aspects go mounting of of look billion. things, pretty the $X all theoretically costs, up cutting starts able quickly. over to cash,

in this So, we achievable the think realistic next of and is target year. the months five

for you the Thank all detail.

Thank you.

question Ken Hoexter. from Next comes

Your open. is line

in got second car line bounce you your in half. a back the Usually maybe in base Can that talk capabilities maybe, Good second taking that quarter. a you've saw of Great. before and to the real call. I scale guess, production thanks morning, or fiscal demand types half? Lorie, third XXXX to weakness production given you the levels we go that for for Is contracts? about see

asking So, But, target? you so noted strong you is are Does make sense, and Can were of slash? ongoing, self deferrals do orders? if you backlog have for all ops the doesn't backlog you that your own slots is kind I than what filled greater what I'm guess, if production. to cancel need the

we should how build into maybe talk year? about that So, think rest of going about railcar the the just

of theoretical as significant maybe exit the would our Sure. today. a And there's of our any Obviously, customers that of believe is got we And that further. production of we see what right coming down can America, scheduled been, we've defer said, or we We where issues reducing X% in North in looking as any XX% have rates. capacity year. number other probably now that things with operating. maybe fiscal that's would our say we're I that any We to or XX% we're know production change. don't knowing we

we're to we again. matter production, accelerate are to and fact, then to go a pretty excited customers As pull don't and trying people let them our back who workforce. with then want let them We of balance but go that have some

able of to that good manufacturing One steady ways steady margin a is the having we're production workforce. rates maintain and

but looking at strong want things production meet so. rest days also team to X subsided. as that reducing Those the that balance have maybe running to take kinds that or pulling instead us of our the to And the were but a overall measures some it, like about year pacing of back think X are to week. headcount demand days again, running shifts, at with our or has as and are And do make and facilities we rates. on at So, production we through customers' two of is needs, working to half next X where look appropriately a our shifts we looking the just our certain the we of backlog, we're you at manufacturing three we year, our

hospitals what people back said. so it you though, doing not break to shoots of at will the everybody basically clear but in of are Lorie sorts keep to There things. at in those to our the and it, you why even level having normalcy, It's of is, this policy scenarios understands hit or effort as we Europe quite to We're this, some patients. seeing back the have that gain down if sure There But, now Italy the benefit home, and got face happens they're If months increase green out and virus is the level, get an return constrict levels. steps therefore a as different they're the be push intent is. couple going courses reported deal you've of three production, hear that the ago. Unfortunately, maintain things this what curve. to we to trying I'm take already various What success, like see We from morning. vision peak all there's two inventories. as a the look to We'd to you're inventories. capabilities with Yes. if we and government back, step

demand to you that protect it -- more managing of is our come be looking for for can that, will think and to hopeful the to to going when to hope -- middle the resolve on you last or that. will the not of responding for of whether be very we of have might closer expecting summer. very quarters firm. very and what's end that at normalcy of cash -- it willing We're hopeful really things comes I It's to the some normalcy we'll We're And look two So, there the and year. fiscal normally and capable at -- see the return upside. our comfort We're come. if downside though, predict, back something a closer hard here, by it

changed I'm every filled said want you confused by is that production little half? that, are guess, down has slot Lorie. because changes just is you've bit on customers maybe the answer, it? and slowing and filled, slot I Bill what is Thanks, nothing just what a the is if to on it Because every second more it don't clarify

Right.

say interrupt I’m Lorie overhead every we're what me Let is, we but saying slot filled, and and saying for reduce optimize reducing our cash. we what is you just is the a can to moment flow through, can so

don't with will a this this of years. answer to do. following think I the something So, And necessarily over quarters last pattern last few your That’s year we be the I to is are our working two think customers simple question.

that. makes a lot -- That sense. makes I I Yes. now. that get it appreciate

-- lot self self We're of ourselves. as a doing imposing this we’re

what you're -- to backlog more sheet what or what with Lorie, $XX I No, that want in for were what understand keeping I production. about temporary the the on you million of sold get on talking because was slowing said what at you you you had mean leased of to Does just for no, syndication leased end wasn't or of just some but more of the great I syndication. looks said them railcars leased balance you -- the railcars the Yes. quarter that just just then, car then and understand Is keeping, are And like those building it, to clarify extra you're Bill you view build up. jumped sale? Bascome terms want or that the the

you that keeping temporary, build? is So, of more what

Right.

say timing what the I again, for question, necessarily and Bascome, the trying linear. was not syndication of is to to So, is thanks

you that our as railcar March, for that normal in Bill balance the number so, for of are and is moved February of referencing some March. it at our had look in that still than meaning open sheet, syndication. of the and month sheet value partners off balance What the a in in sales was of units business And higher something happened syndication

We to expect continue. that

To leases what backlog is a to number, last has that consistent we being the much lease our with a those what demand little bit, six originations in seeing where you're just not expect fairly over question that about think of the syndicate the sheet. new I It's happening small our how the been associated with balance to is that keep broader down on have market slowed expecting flowed. months railcars. we're for side It’s and

need In I balance our large have amount sheet may we why capital…. we we that the think on anticipate that's a to keep extra our and scenarios,

Our downside scenarios.

other $XX two times or a lot I deal. lot or did That quarter, deals. was [Ph] Our assets post in million. that big downside a do three scenarios. putting and more -- And we did, than imagine a more syndications much three We two single

them are to us. some And of open still

changing, that have -- other profitability But, And is builders that factories handle on we've we the are essential terms industries. the is big car protection that have change. we may the think running under keeping that. good think that I our might we are managing however other a and risk besides as got

I the time. and appreciate all answers

if what they assets stay generating are earlier, the And on income. said then, Bill balance again, to these underline lease sheet, even just

I If I the all right. for backlog the and No, get Justin. answers could the Yes, quarter? time. What’s marine appreciate just housekeeping, one

million. I think around probably million to $XX was It $XX

XX or think was it XX I

$XX million. about So,

healthy All Thank time. stay everybody. And right, wonderful. the I you. and appreciate well

Thank you.

Next question Barger. comes from Steve

open. is line Your

did I'm And supply about North Are reduce decide close? there, there Understandable to refocusing would issues seeing plants potential you morning, you thinking lower reductions of the Good are more coming or how you But, facilities. want why everybody. or U.S. in the on issues? from to America, capacity. chain down to cost avoid anywhere border which specifically the Mexican

Hidalgo. two Sahagun, in one, state was plant cars Partly type The I the the second in big gap plant our -- product general in the but the the of mainly Hidalgo, it mix. was

specialization tank in has good which state is Our Tlaxcala, three, cars. a Tlaxcala, of produce very cars of plant We joint in Tlaxcala. at plant our tank venture city Tlaxcala,

is a moving usual efficient. true efficient with in reasonably product Mexico. very to the are returns back bit normal time very, factories base a go all the is it expect But, Mexican that normalcy base. it to business And in three a efficiency U.S. in as coupled we testing circumstances think for about footprints the the mix ARI of to they at more and more was I selected facilities the some concerns of So, and

And on inventory actually we're are actually significant any year have point, say well. been had companies that and supply business many markets. we that before impacts North would suppliers I the the ahead for do lunar having essential planned this as the under as not issues operating stocked our would elsewhere, American we chain at up had getting new We

able borders to to led maintain is to we've do a where Europe caught been So, in of the sure more to And extended I'm to figure bit chains. of the is bit expedite to versus borders. holiday little two-week as allow and closure a took little transport up. rails. the picture roads They chain supplies they year time exception Easter for get part -- The those what one for saw an them it that shut the of a supply everyone supply were the across transportation via the on how the of some out

and up the occur, in In barriers example, It's commerce interstate commerce it roadblocks state one Europe to individual really state or what from city interstate towns if the in other. important Italy and blockades. Europe to would case for to compare another, understand put happened have from what of imagine the here to delayed and each one

can't in. go You

heavy they're of a is advantage they the real the thing we've You industry. Europe, out. environment. all have issued employees, have very And come that supply through spectacular our to they in believe to is advantage we business And can And rail U.S. don't deal if we yet to to sense This that rail in to rail going of is us just protected. that as to America, prepared understand. in a great can't in essential essential a and don't so sector big give system. This our and to that of we're railroad it go continue stop operating the were come uplift. the credentials borders hit it's chain with It's at of

-- think lining So, it that occur it America, is if we're And ready I the a but this rail to kind that we happens, don't and the that's not going solution. hope could. cloud going silver of in we is it for this be in

on in see the production back to just And you. modeling Thank Will color. border point of how lower minority interest great half? the GIMSA? the facilities, from south the think That's mix you should about we the for

would in I you syndication. notice of But, model, today if That press to our rail and was is car minority not is might things wanted lower normal. interest release we're tied I than timing think guidance. giving of bit into you one the a suspect, the

to GIMSA of the revenue way So, share. our out quarters venture I less in of first out. as quarter in going as the syndications partner normalized margin, turn next their up the joint and that couple gross would expect like for be therefore less to more the work

comment? just in an make we'll can working correct I to these partner think with We that have one accord, I an given However, there, are special category. that reaching And our we uplift circumstances in imbalance. if succeed

transparent cash comments, a of that in that expect bucket a a we picture that's very source good there. we'll it I'm we when pleased And favorable that pretty have Lorie's cooperation, of might probably I'm We see finish announce be will we to we have very some have we'll that. relationship also supportive partner on and able I more to their positive, obtain of too. all So, really with think, cash. we be news -- may

and And cash just liquidity for flow. clarity around

you flow as do operating expectations, of to you're of think detail being year? the working activity, a you But, actions timing production this expect around You've lot positive given savings capital, able cash from generate syndication cash managing taking. about

Yes.

Yes, do. we

with flow this will year? you free lower And CapEx, generate cash

that would currently, is this Bill's we what lay borrowing we at as the -- know pretty we we'll that phrase, that think see plan don't we're on I towards. point, land, of be Again, don't But based possibility. know strong that a this at what what I confident see from the working feel we point. say we the that's

this normal can liquidate flow, business In cycle, cash you that cash. is kind wouldn't throws The as you because throw is a your lot factories this thing up you you of have issue with cash off inventories. great of operate

it So, should be positive.

it factories, However, upside up turned many in, -- if then situation can't and run the down. on you is it can't is are operate companies you everything which your

factories keep core managing. a threat to expect operating or safely, that We that's risk our we’re and

Elkott. Thank question you. comes Last Matt from

line sir. Thank is Your open, you.

Once on levels? rearview this we've made and footprint basis, at well it are we production and permanent output pre-pandemic right-sized manufacturing is in adjusted it’s mirror, total a that the than out a meaning of pandemic less looking

We longer for Yes, footprint term. it our expected total we're would the market, call optimized. optimizing

great franchise. a have We

shareholder noncore, prune to the value of in Twenties. that we those that Lorie simply pandemic prune business talking the the footprint. new to to might future. need War bucket run need businesses of the our the then, just the I, in great depression, central non-essential immediate cash, improve back. but tree, Great great We hard Company that It's are very, have very the time great after last this to to is The rate scale casualty in remind And War, that. over cash, They about or you I non-essential Greenbrier. businesses World from tree markets, came strategic came nature create after the Not the that Roaring look about, for we the and everybody had

think, housebound some buy at of of shopping people going unable I and many be out, once they will. I will, to but them when they're them to get So, know

for the deliveries to fiscal sure couple the delivered backlog cars -- years. make your guys are know I something last I your deliveries. first of than in for periods. just removed Historically, of I at least the higher cadence supposed some were deliveries, also, in wanted fee be second half future And understood half to on you that

like any be given currently higher in deferments, than engaged second more are occur? no half you these deliveries fact guys Now, further not cancellations about or cancellations, the if that it half conversations seems deliveries, first will the further

is a stronger half the I think, than perspective. be estimation half on would that the that's first deliveries good second a

And will and not cancellations, but whether brings by customers we that a by mean and not of are municipalities, pandemic. that new mean very or less comfortable But with associated little people and edicts creating today, we're that continue operations, bit just a stress activities, syndications new with workforce we Some the But I all by et some possibly essential counted stuff than through North being the why suspending that guidance deliveries, little half second it’s is and every driven know are on be will of some this we balance what in, doing. of that least of international business at say, we're part first bit and potential on and activities. and stress as day efficient the about unavoidable sheet I to to you is the the half, which cetera. again in flow strongly not timing that delivery conversations American would governments stronger continue to an that of And operations. of half some deal go cetera, necessarily the as will second feel We with don't we production a again, doesn't stir and can et operate. reductions offset this is work the

it. Got

So, you international mentioned, Lorie, the deliveries.

So, apex, given soften and fact is when American all blow you to international the significant say the -- North of manufacturer of rolling done, back mitigate is this a operations look you're and that or said that infection you kind the the are apex likely helps around the with world. only

one play place -- other place if all advantage not this your to is lockdown to done? think in is when may said and that be going you so, and So,

to having be entity very in to States I going markets us Brazil be do stronger it's that shift railcar presence of, that to will these can out more down markets production strategy the our say production and is help internationally Unfortunately, States. say, United we believe a and absolutely you a would we some and resilient rail and of for to going But, think expanding like our forward. manufacturing liquid back loadings. footprint let's bring strong freight of United more not freight

So, Brazil company Europe a does and stronger forward. going us make

crossings of Lorie. investment differences, the favor are away border issues give with chocked But Europe, that clear. there very in just movement crisis because an and post billions a I’d In business. from rail dramatic example a And going rail had. healthy they've highway take already green large to quite the very be and that the to traffic is that's in other of

to kinds positive similarly Europe; So, those this Brazil, of for is going forces be very as on. going

Europe comes a than this that earlier think help diversification, great the as we do, deal. I very out Greenbrier So, will of

in it one what us just great dealt final recession, And was related and XXXX. Greenbrier it. XXXX, how I in just with Can question, past In explaining. in than summarize you Bill think and then for recession you to Got you during different is the great maybe guys losses the recession? were today

Sure. shot I'll a product take mix it But at our basically, can add. dramatically you is Lorie different. and

Our is different. industry leadership

We have America, to more States. a United our franchise. one, spectacularly two Number we diversified three number have different two North in optionality the internationally. in major or markets, footprint

making those some have shape we’re every in knocked We getting efficient progress and into quarter Arkansas. plans, they're

very last and than job -- dramatically are it Company in operations, also of a a of I of really footing Lorie experience. experience year's And great point. team to management at is on team think the together a Lorie Company is -- this issues. getting solid our with is So, turned great different a doing think I was is the strategic deal around lot the some financial

We get this through everybody like else. have crisis to

very Thank you much.

Matt. Thanks

Matt. Thanks

your much you for attention. time your Thank everyone today very and

Justin, to website stay And reach on myself, any there. and you. email Thank as Lorie, can have out down have to and our out Adrian you other If healthy address Investor also or well. questions, we the safe you Relations

Wash your hands.

conclude Thank you. for have day. today's great conference. you a That Thank And joining. does