The Greenbrier Companies, Inc. (GBX) 26 Oct 212021 Q4 Earnings call transcript

Hello and welcome to The Greenbrier Companies Fourth Quarter of Fiscal 2021 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 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

CEO and Ailie. our X, you, will our Today as Good everyone, announced fiscal Executive quarter Greenbrier and call. XXXX role next effective founder to Bill Tekorius of Thank Chairman Lorie that and conference and the welcome appointment morning, transition President. fourth March to of Furman Greenbrier’s the

and Brian and In and Chief in addition President and Executive Downes, Commercial President Lorie, Officer Vice Comstock, today's to CFO Adrian and Leasing Vice Bill participating call. Senior are

Following up our outlook the our for open questions. performance for will we update on call Greenbrier’s fiscal and XXXX,

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

Thank you, morning, Justin, good and everyone.

the working the transition. September I I'm role outstanding Lorie job board assume strong look would an peaks. CEO, very When working Executive should to place X, my for is be the becomes know proud XXXX, work of time -- position Greenbrier’s transition. a that goal CEO. opportunity our I'll you as retire transition important we until several talent take teams been Lorie Lorie Executive well Everyone next is on will from with concurrently evolved, joining to role, today and have newly focus I through next congratulate company's CEO. will take of when of created to Greenbrier’s And announced this As Lorie pleased earlier with I And Operating current years. will we I'm along XXXX. XXXX. I Board Lorie forward the is Directors higher exciting which This this Chief an the to member with I Lorie. in company board we on understand the the our ensure transition Justin do March Officer continuing the Directors the think and to commitment today, an as and assume future. I'm the in remain indicated for strategy have pleased Chair Board has joint Chief she executive will Lorie, towards with at In for President possible smoothest Together, you. I as position. support the until bench. elected built very I Officer will also us with her to very to coming a transaction of this as you company. our Tekorius

quarters, momentum. end-markets past gaining discussed several the is the we've in As recovery over our

infections book-to-bill activity. to row of a unpredictable. workforce fact personal pace unvaccinated third with level. quarter Greenbrier’s railcar for wife of Greenbrier’s fiscal is in Our to fiscal quarter has a with during order was vaccinated spread The XXXX. the was it fifth quarter double Greenbrier being new fourth ratio one Variant It over And both isolated quarter. our with along recovery the across the quarter for worldwide them, strongest continues X, my also our It of fourth increased and X.XX was Both individuals fiscal of [Jane], challenges year. COVID-XX despite has a of the a created Greenbrier’s fourth society. impact leading the partly quarter business book-to-bill in Delta vaccinated. I on and have made experienced consecutive

symptoms Greenbrier Thanks and mild have we the Fortunately, lost Sadly, Wheel Veteran have is Shop. at were the to lost outbreaks avoided member we to our have XX is practices, COVID-XX of Pedro all Gonzalez, our recovered. He City Pedro Kansas GRS, COVID-XX. family, fully an facilities. we we’ve XXth recently however, of widespread year colleague, safety another

We is safety We're social and distancing. during are people keep our vaccinated supporting to difficult this time. family and employees paramount. of his health The urging to get

vigilant new integrate to response continue capacity. in employees expanding we a We maintain manufacturing posture, to particularly production as

issue the fiscal virus These by only commodity been the in all to Greenbrier’s is impacted course, and volatile faced. addition And is have markets other chain XXXX. not labor disruptions, headwinds. be factors to shortages, Global markets for supply from persistent higher this and business disruptive manufacturing, transition and a we to spike to and leasing production employment turn downturn challenges rapid a would after low levels regular activity. of in production then maintenance as what rates employment I a greater rapid the up Of

efforts. environment the So strategy the discipline an that of we've outset been pandemic, it demands this the also since our demands here is to best

strategy sheet. liquidity to our balance strong base has and first been Specifically, a maintain

underway. cash now the we capital crisis flow. by in finally, knows Next manage factories generating while and safely our And to during well, momentum Everyone for required operating recovery needed the and and cash the to prepare COVID-XX economic survive growth. for replenish to is economic which in upturn that forward and well our is working markets,

production as end It's and ‘XX to ago, pace This November just successful our the and from lower seamlessly elevated Our globally. of scalable nine outlook. -- to processes. steel has nine proud key an market prices our manufacturing product at chain add of strategy actions strong. I'm we team changeovers and of involving new customer’s impact people. our strong to for lines availability Greenbrier’s response and to new purposeful outlook strong supply priorities challenges decision our sorry. demand by only approach improving of of are rates ramping increases. production as other Safety I’m flexible production and capacity of in markets constraints Notwithstanding and all of are is operational are effort. of input of and the adding number large lines, Greenbrier making teams lines a a how presented nine labor noble up risks years ago A have production central both of manage operation The many to months result they're the been

a position Importantly, our it top liquidity remains strong, priority. remains maintaining

efficient capital with supply our of working protecting production ensuring chain and balancing We management are continuity.

market conclude I I'd to do remind our call like the listeners and today Before hand over smooth we expect Lorie, their that not straight line. a follow recovery to to

produced been. pleased increased joint well is scale we that have believe industry on leasing from is has our the the of strategy do are through recently results. It still is shock we remain. fleet And and obstacles our clear, our Our caused I however, the We're other recovering venture. where producing also leasing the of to by have pandemic. and Uncertainties side GBX

reduce and Greenbrier provides balanced credits, diversity. exposure in equipment, annuity product other and cash a long-term tax sources. investment to ladders future lease GBX reduces continue manufacturing transportation we'll the we Our stream freight cyclicality with longer flows. maturity are At and solid of leasing, to and That the inherent building advantaged

our so to in some deliver to All and we considered the While well to shareholders. short-term ahead Greenbrier the immediate build months doing foregoing future. value further extremely are revenue the positioned factors for is recognition navigate

technology, manufacturing for cycle of services to Tekorius. diversification pleased future. Before She electing changes and to future, we'll Lorie CEO, this is other months will as that But out CEO, to future. the I thoughtfully look with our four we for Lorie? over spent I'm further five that take share or that bring. grow ways sketched to she and business be as turn we With Lorie to that putting In call inherent cycle congratulations together strategy thought next it and the the the out happy my strategy. headline, important the and her the the

Thank increased of operation and honored together pleased to double-digit the in I United foundation produce are second to the Greenbrier look fiscal is of quarter, well that humbled follow express to growth. And and norm reflecting levels Senior results for allowed with focus addition quality and Bill chain we're from Today I challenges team. and manufacturing flexibility be This providing history. service Bill labor over this on good appreciation QX level to deliveries last results Bill transition most in Board CEO forward today. from the common this of and prepared. reporting new time resiliency, and unfortunately me created he railcars the only and for goal for to another XXX are as morning, The production production continue and deliveries from managing to established the railcars. up of in I shortages months. rose quarter force the momentum my XX% appointing Greenbrier feel towards In excellent want we everyone. units ramping challenge. Brazil. the seems notable and X,XXX QX. since have employees production to XXXX. continued work of worked Supply Greenbrier’s you, our the strong Greenbrier Greenbrier’s I to and two Bill QX to Greenbrier’s great see I'm in delivered our on the successful Management CEO. and including six States with Bill the and Volatility to to next some build highest

outstanding and continues components an Group to gases. job raw to Purchasing spread Global Our materials paints resins, even disruptions basic do and as industrial from

added year and our measured our operations manner. parts somewhat resulted in bring to in and us quarter. responded safety over introduction. XXX labor including significant to a to strides nine last nearly These Global impacting have adjustment avoid employees during manufacturing [indiscernible]. maintenance North U.S., make QX interface our QX. full ensure challenging and of while or business. performance. Sourcing line Team over strong by positive manage continues and setting as hiring be we're And were Greenbrier is has a in an pool intelligent with improvements our And we've back or take measures In Our on American fortunate operations offset dynamics to a employees a the labor obsolete focus we and how and operating our Mexico services, Safety safety supply priority we the currently continue months, workforce in efficiencies add to changing continues X,XXX The customers we to rail in allowing shortages, to production delay inventory continued record the we in rapidly network

improvements total the made gross portion the contributed GRS and Excluding XX QX. had our railcars of I'm similar will Leasing acquired in Services and Leasing. in adjustment to million. GBX diversity. and which inventory value almost another for margins in busy be have QX, railcars a XXXX bringing we'll in provides Leasing been our X,XXX quarter. leverage portfolio a Group, operations to credit the able market be fiscal And were nearly This Subsequent would Leasing confident of beyond. commodity, includes of million XXXX into GBX to we held purchase GBX age year-end, XXX which also assets to

at to GBX gain XXX of Leasing at and million valued end continues is Our September the fleet momentum.

traditional a facility more the long-term of expect currently to reminder, is financing. portion in which non-recourse GBX next Leasing turnout utilizing a a railcar warehouse quarters few credit we with As

strategy offsetting leasing of advantage revenue production. will railcar Our and enhanced cyclicality flow, provide cash the tax

this the be and team trough the production time. in opportunities in units industry an increase about for significant Greenbrier the its excited And proud railcar our ESG management to that through and to activity from completely to impact the year, ESG publishing providing liquidity see the in cyclical X,XXX of be ahead, the the fiscal levels quarter of strong and report challenge. in internal can with XXXX, on challenging And Greenbrier In to a valuable next continue a stakeholders. areas to a emerging of positive a and have employees long-term summary excited about on remain labor that's its provide next variety few we with how overall progress and Greenbrier Annual team expect talented I'm going part third disruptions will we I'm XXXX type momentum journey for I quarters. And looking in pandemic, generate shortages report. it's of our and and the we syndicated environment. of a the team as of serving into capital demand meaningfully shown economic leading the recession fiscal now next the is to experience different weeks, Brian congratulate Our continue guide few as rise. syndication markets profitability. pleased will But commentary chain demand Greenbrier Comstock and ongoing company. be best supply be

it Lorie, morning, in economic like last the three the to Well, recovery everyone. be sustained feels point good direction Thanks, in economy have to much and and occurred positive a months, has trending continues rail. overall, over indicators

more While this recovery think unpredictable, sustainable sharper as V about seems to recovery crest. with continue a be we shaped it to a

units. ratio. going of reflecting Now important in This quarter we XXXX. on things and deliveries focus to In instead of X,XXX few in Greenbrier a is of from fourth how book-to-bill quarter, of units I'm we're X,XXX consecutive our third a discussing industry growth orders statistics, book-to-bill X.X the had of XXXX approaching

Greenbrier XX,XXX accounted For of activity. fiscal International equates order to units, X.X. book-to-bill orders which this and approximately new XX% XX,XXX generated railcar activity order units a ‘XX, of of of deliveries for

XXXX. backlog utilization we New over X,XXX backlog at grown railcar into by each operate XXX backlog Notably, carrying and production continent production a are the into units fiscal Greenbrier’s fleet fiscal supports of value Operations that grew year-to-date. with roughly ended XX% XX well value an market billion. many record ended lease fiscal August we XX,XXX we Europe, booked estimated year with XX% to $X.X in lines million of for units has XXXX. have nearly to in or where

lease improved all lease on seeing renewals. lease termed Additionally, new and we and pricing originations are

seen recovery our markets. have of We all in

significant seen in basic also of have materials, and shortages increases We raw components supplies.

We disruptions you on and economy especially back portions number as global easy traffic a as just be throughout record switch, the is at there it where large a of are setting waiting unintended when have shutdown underlining that congestion consequences. seen network be the to ports, the ships offloaded, flipping a turning of not fact will

see to address scale see climate to continue to our we global broad a the beginning However, growth Europe reforms is in benefits of markets. change. opportunities economic

now will railcar an are involves in the rail modal a freight path the already and years rail the We shift replacement. environmental efficient its one We Freight of in levels. come. substantially of travel not well the service freight follows countries and largest happen this develop This EU exciting growth and time tackling are more States United American sustainable congested addition the is on as only many for to globally. and higher Right is also return replacement except to modal shift similar days as customers demand is new of demand, as fleets what drive of leasing North we orders, believe Europe, Europe. global because aging demand, the on a focused and rail of railcar Similar the see in period is friendliness. a service. higher with fleets in from to and solutions, we to that future cars basic it to road the extended are for significant approach past solutions Equally With to will replacement seeing continuing but team comprehensive of the in being early systems a Greenbrier's demand of speed the in polluting more market. But said, world. all imagine our integrated to growth commercial blocking one when

full Adrian performance. about QX Now our for over to more and financial

you, good everyone. morning, Thank and Brian

revenue. under fees. million and of net of continuing a press or a of operating $X.X attributable share Selling costs. million highlights leasing in to in earlier quarter proud the expense years teams over resulting cash this slides $X.XX a year our QX of in as on as production refunds XXXX. employees adjustment performance rates, $XX.X extinguishment $X.X the to recognized fiscal revenue net result sequentially Greenbrier share and included and parts. tax related Highlights $X.X As Adjusted of as Greenbrier's to $X.XX the capital quarter adjustments strongest excludes we lease of of cash available and speak our EBITDA of million. gross investments $XX.X million close from a higher $XXX tax represents business tax XX.X%. increase be facility an borrowings earnings the I'm general or our will deductions between very reminder, nearly guidance. increased a the $XX attributable high $XXX.X the quarterly the was of lease and per safety. in and collaboration debt of of Adjusted I of our and administrative $XXX $X.X $XX.X fiscal been inventory ensuring strong facilities will the syndication few activity a we've as Greenbrier information tax obsolete QX. revenue XX% lease tax the maximize year that or quarter, effective $X.XX on gross in of result employee access with XXXX. the and per of release million spent for million balance was received and quarter was of with liquidity over CARES by million of employee million modification stronger the as fiscal on excludes for fourth and available and of appear be Act in million increase driven million and Greenbrier is debt supplemental from tax our the we’ve quarter share overview per of seeing benefit quarter unfavorable losses. momentum earnings comprising XXXX of These XX.X% could of from for per margins to costs, net million unfavorable an to for performance fleet. specifically in result In quarter $X.XX the of end The associated benefits labor of financial benefit accelerated materials The Greenbrier of and or also EBITDA year our depreciation $XXX.X In $XX.X or XXXX Aggregate and rate markets. X.X% a XX.X% fiscal safely. sheet operate full This back for COVID-XX to reflects course our the benefit carried include into related well a billion $XXX share has losses. fields year the revenue. tax extinguishment or XXXX, million website. million

well to navigate we the are We XXXX. calendar disruptions expect market positioned persist to into

as You million XX. the has tax receivable noticed may to $XXX of have grown August

refinancing We in XXXX XXXX. these mentioned. Greenbrier’s addition to is and fiscal available of most completed in receive extending and two fourth maturities Greenbrier second I borrowing cash expect $X.X of of almost This XXXX. into the debt refunds facility domestic revolving capacity term just quarter, billion loans and of our the In quarter to entering

warehouse refinancing $X.X to facility. additional of outstanding financing in the Leasing activity, addition while completed in XXXX, and creation term-loan, million due waiver in time Greenbrier Also we’ve In quarter $XXX lease from legacy of fleet a as million applicable serve within repurchased reimburse regulations. securities debt $XX $X.X XXXX $XXX revolving additional fiscal and credit facility. of Leasing, an covered fleet billion billion and Overall of million GBX is notes credit six-year limitations of million the in XXXX the assets senior to convertible partially notes maybe remaining with including facility $XXX U.S. negotiated railcar privately that warehouse collateral GBX as transactions retire the the time

of capital shareholder balanced and business risks. profile our removed committed a a interest Board have to We XXXX and remains value. the of of long-term existing favorable Directors to simultaneously the effectively deployment designed dash Greenbrier’s maturity protect the refinancing rates doubled create

our more are believes XXth Today which $X.XX that attracts on our schedule, dividend Based Greenbrier fiscal [straight] XXXX and reflect few and production in to X,XXX enhances board be approximately dividend of months of expenditures services, share, lower continued million current to XX,XXX dividends. during $XX $XX million reflecting taken million of XX,XXX Brazil. Greenbrier’s to XX reflects expect competitive be approximately investors. year includes X we the to line repair we units wheels the units million. program a $XXX consecutive value in Our primary Production $XXX Selling pricing leasing per in expected of from production and and Maxion approximately due and to and Capital to the changeovers announced business Gross trends $XXX ago. half year pandemic which some have parts. to Early administrative in a in manufacturing will is shareholder and inefficiencies expenses we deliveries the ramping. units, margins million factors. in operating first product

benefiting will More sheet efficiencies rates decided. production the is syndication production be As until on for fleet increase, is leasing and our final stabilize, operating margins. balance will activity scheduled disposition

to over and expect achieve work we profitable improve mix, efficiencies the year less We the production as margins through other course of the factors.

back half deliveries expect half XX% back XX% We front with half weighted be [indiscernible]. a to

As Leasing quarters railcar the on in our build of an on and Historically, syndicated Bill with has and the would mentioned leasing a we impact later. GBX introduction production a activity. shift a our earlier delivery lease few strategy and call

portion production lease into our of sales to addition be Now and activity, fleet. capitalized in will a syndication direct

external XXXX, lease to delivered and approximately consider in capitalized by in While delivery a results. and a when [leaves] are reflected railcar fiscal cash it sheet and owned income of our the shift stable an creates not our as be of expected this Greenbrier’s activity the impact units provided. In long-term reduces units new the it railcar revenue X,XXX our and balance platform demand third-party. and repeating near-term, part into smoothy cycle We to is margin These strategic of flows are guidance built in fleet.

we has described track as in that opportunities, and well experienced as success and an factors advantage record taking management of have earlier. of identifying a through We challenges managing team the

a will we continue for now albeit operator, up result a will fashion. in that open As momentum operating XXXX non-linear optimistic into fiscal questions. are it And our we

And please will and answer Instructions]. session. begin only to the two now We yourself [Operator question questions. limit again,

Justin today Stephens. will first from Long Our with question come

morning. good well a Thanks, Lorie run a And been Bill promotion. deserved great it's

So by both to transition. saying I'll start congrats the on you

you, Justin. Thank

you, Thank Justin.

Maybe backlog XX,XXX the today? know to I speak you this units XX,XXX delivery to the how guidance secured on much the of deliveries that Europe? the out called expecting X,XXX And units for of you're one start also Brazil, for but to you in is with in units number year, could

delivery So in morning, is XXX. of guidance, And expectations of Justin, delivery this X,XXX good European then Justin. In hey, X,XXX our are in our is that at already -- range. between our XX% backlog to XX% in kind our included to that

European that's expectation, although kind if I think figure management is current to team, talk strong our there. because out production, over would be demand ways you looking increase So the they to to of

interim lease syndication about activity? and the out, secondly, Okay, tailwinds helpful. was the leasing you provide segment Leasing saw color and that you was GBX fiscal around that think And I that maybe about and can moving of can us called think this a then all anything and because quarter, to fees, quarter, any modification the services wanted higher the in I ask that's in pieces with one rent we time modeling spike segment, just it this you XXXX, help kind of

at part a timing -- a of great more I great, And one-off of business it matter in kind that think that can I wouldn't of characterize times. it's our or occurred it's a where anything just QX That's question. non-recurring, as

what lease I think forward, going and improvement a it think the some gain time, to same momentum. be that years range. would line to see in what year a -- of fleet, mean, revenue. work build are we're build But made we'll we going the top will for pleased slower to seen say, year. XX% right stronger a XX% very an profitability a going the little say, to growth I I a with ultimately, it's But you really I that what guiding that this it we've maybe takes bit now. year. We're it's our at in saying revenue, similar see margin in think modest a while I on have to on And take we -- to to is past we as that we've than we're progress But would

would Right. number to of our Justin And we that said, it'll taking have railcars on modest add just as to balance we're yes, time to might that some stable fleet selling But externally. the one-time for as offset will get that that, a that you think pop we cash having sheet. on us that benefit revenue that long-term flow those growing the approach And Greenbrier’s repeatable from grows. think take I I

much way focused additional thing to as this be that a don't our a also that a adding production more other very the is, we progress of about increasing but now can put pressure the lines in that taking manufacturing all and we while, you're safest operate. on could folks, I And isn't these rates would and we're our deliveries that they've we're how add asking modest safety doing too get we commercial are really traction. the know when and The lot as we've update we see that ways possible been we approach. to team right for of the workforce. I way us We want -- for year a our got through opportunities to

to specifically some just you million EBITDA rapidly. to of beginning Already on sizable the expect Lorie, three-year to beginning portfolio the when leasing question we to grow It's other do accounted rival impact purchase. are on it's At smaller target of already $XXX the We units. XX% leasing. have business a modeling again, above

think I have of transparency so have be significant earnings. the more -- we And business. business So information on as out a leasing leverage and it we be this breaking in quarters do couple will the will that expect we to last on we and --

Great. Thanks, time. everyone. appreciate I the

Thank you, Justin.

comes next Matthew from Our Cowen. question Elkott with

Good and transition. morning the Lorie and Congratulations upcoming on Bill.

for strong and Justin, in of fiscal expected backlog. the guys improving. I modest production the of close factoring capacity in have delivery But right pretty Are to demand to the you're done the because was ‘XX is XX% year for orders you hitting years? you the after said very think maximum already XX% environment production sizing last couple you the throughout ‘XX in

I'm going his who it to daily to hand living Comstock, is [indiscernible]. Mr. over

to question, Justin lines, and accommodate at think if how we're of thanks ramp at important orders customers continue in into to said the you customers is we to yes out the as queue. customer’s in in to currently future, even talking thanks the think manufacturing look XX% factors, up Justin and and one those we probably think Right XX% we're flexibility lines the and XXXX. Thanks, looking the push Matt. orders our I are now, seeing about XXXX I that willing But of And needs. for

So the we're some long-term us lines from will well core on synergies into getting take future. that our good perspective,

So are sustainable as it's are you've which really orders field for to production, which can. kind accommodating of trend looking But that is to very we continued people long-term a of for a combination diverse and be robust positive continuing and of a lot also, us. got

quarter? that to talk [queue] Just subject? mean lease And while don't the pipeline by Can pricing rates? mean, the and you business here? You you're you on

good as think, as on positive for I a discipline others the enhancement momentum I has quarter. pricing is Yes, side continue more importantly There the we And correct. in pricing probably through progress lease have margin and been leasing and opportunity we're orders this the as and industry in my reported remarks, see opening think I general. in lease correct, good seeing term, the in recently. Correct, industry said, which well, to

you up address That's my part very follow helpful, question. because Brian, of

you well production But XX% disruptions chain much growth as growth, a which midpoint your prices of implies are have pretty solid. So guys sense as do the limiting is supply how potential? production high at steel guidance about the

Yes this good, Great Matt? is Brian, question.

And sure we'll prices. high great haven't something the lot theory, in to near to if peak any seen there, we of least in. the interested I'm people due near Today, we're a that steel are hope at high listen And you of steel probably forecasters negative prices. the all impact cycle the peak we out

this at stage. really haven't far, we And pullback any so seen

you Thank much. very great. Okay,

comes Our Wells question with Poliniak Allison next from Fargo.

built certainly [echo] business you in Bill, good hands. talents. great strong foundation Hi, both morning again, of and a Greenbrier certainly and leading And congrats

you had luck just that. coming of Lorie, on at With in of you today, any any bit on with high both maybe that direction I you're portfolio in to terms of best businesses any know forward earlier want you the have here? your thoughts level little your the look strategy Bill color strategic focus a So think that, stages, attention here kind to mentioned that as needs you you that more own

for thanks time, in At what be the I unpacking really want want confidence. and more make that forward, think line. deliberate of do Thanks, the to further down to we don't might bit this strategy certain [board] that fashion a little I Allison I start going a our

things. how company opportunities We over we might have things grown an amazing at a enhance lens, always There's look and some years and done the things. XX about really to we've think last great different through

maybe customers. and better also mentioned operations Brian some be how our better to we to think focusing go I integrate a market provider for we solutions how of our on

you to I quantify of That's kind give extent fees, and benefit that how was? what wanted helpful. the it. back lease some get just what side to to anyway leasing us and those questions guys to any impactful color I And the were and were they impact of then modification on can fees guess Got Justin's services help

solve four I Well, to with their as Greenbrier for problems. works think, decades, about years we've even customers potentially our spoken

and customers needed if had a are them lease we with whole terms matter we to or we've made it's existing that have worked make so are it sometimes that contracts -- terms. changing of And contract changes and does and require to to we've changes make

at is so end of the it the benefit cost minimal day, a And that has attached.

So our not something and that historically. margin through services but benefit leasing quarter reasons margin but it one it part a than It's flows of it's the why at the was normal the been has little a is business, non-recurring. was it just same in of a a fourth was higher and the XXX%, time

you. I’ll pass the Thank Got line. it.

Bascome Susquehanna. with comes question next Our from Majors

Yes, you're of you globally the XX,XXX? questions. clarify deliveries capitalization, implying my XX,XXX XX,XXX and is new X.X production say and to thanks and with to the just for cars, elimination capitalizations taking XX,XXX I your to wanted rate when accounting

Bascome. Yes,

Okay.

I markets many mean, with to we're mid cycle you. on want how don't number when story. be the portfolio you. added. but over and Thank sure you we cut there's an range throw and understand that the last steady if becoming consider Thank so the of we new make years state? out probably in that five, this should a Just should the market bigger acquisitions changes the picture. a Greenbrier, want been EPS there, take of that that at was the And at earnings inputs some maybe of your to both six Can doing I business in and power things humming vehicle lease the key core a part

step and comment Yes, comment. Brian changes and even years, in and the me grown in want dramatically last five then I Bascome, about has the for let shot take Lorie -- changed. at that may a the and and company to thanks the

if at it's mentioned transaction I every States. a Mexico, Lorie not two to factory design, that the are we facilities mean In mean behind strong in the business very now. we that service integration, it a that in we at North single ways position think in, we a the freight lot we to you strategic strong does we market, North that's the come with opportunities what a also and this, American having drive from in services. United continent And table just And car And comes up. lines and production perspective, a multi every means have place America, in at and more it share. multiple leasing. look be a market and services a in it's have the have long see market manufacturing, we table, have from want

about that would and last that it the strategy scaled be that achieved out in sitting would depth. to she's together And to continue greater say be her scale much people our working of that yet to of to that. the around higher room the some say have And margins, doing should in plays and opportunity more board because next not had volumes the do And a strategy, to translate has fits on had profitability, review I We'll it platform. team leverage. strive have lot more about five of for that them All it premature stronger bodes net several course, capture years. out a this this gives the think that it. into will a the we've more us in have that well with to translate go-to-market matters. it's value. for got And over of now. we'll Lorie bigger, And there But months into it I say opportunities, we

question comes with Capital KeyBanc from Barger Markets. next Steve Our

everyone. who's a Hey, good morning, facing And congratulations change. yes, everyone to

I set I bit interest, if about make guidance normally like Am $X, and correctly be level work big dispositions EPS to expectations through thinking that am a or don't I Just initial less? little missing it that or guide around will to and I your SPEs SG&A changes your initially something? looks minority maybe

point. get I this guidance of level think ready to or into that don't at granularity that we're

bearing little provide But it's there's we at think, in XXXX. shifting the more in a end a on the day, landscape, mind wanted both to moving the of color number -- tremendous pieces continued fiscal of our the I positively.

that we And some of. aware aren't things

getting from about end can Comstock increase he's we Mr. the feedback the of regular and how at conversations throughput. day So perspective,

shortages have On labor to the supply U.S. side, the flip continue chain issues, in we

balance trying it's who some can but out something that having additional we provide to to how and put of is also guys reasonable. find are modals build clarity So for a you

months for to I And a that modal. build quarter you that team we're you the we we've to what's to driving quickly would have appreciate focused shown that all some that for our guys too we expect it's that got appreciation team. want XX doing care we focused year. take has But gone got you last try the that network we've I the fact can. great shops, going just that line. bottom of the just been been are as fact this maintenance that have a customers. things. that certain on you And more running the quite our as that the And there us I And isn't we would would a confident empathetic cars, on make business the be we mean, a that have say, some workforce, we're building or value And be also hope I on, But I whether things about different time, of to are commercial we'll think new this at and many not to certainly are or too have trying would know happen, for to great

seeing mirror optimistic per to X to operating be see downhill production has line the the one you day we're is up, really momentum we're interesting day. overhead think of on about add supply things the about amount a orders and to very me we momentum, increase filling if all in momentum I being cautionary keep disturb And can single hearing just absorption, business haven't those about build The the environment slope Let per if been too on that this pipeline something really managed pandemic difficulties, we perhaps talking XX chain in. the from and as that really the environment, volume talking resilient. we the dodge touched But this is And you little drive of on is us. we're many and can a by order ability to bullets. of

XX reflective with know revenue It's happen that margin a with and months Lorie But We thing and those Brian had what in enhancements, I of were about talking the lay been leasing year this like of difference. think it big we happy very year and others And the and done. that really start might I I of be have really it will made last can and operating just not this Comstock out kind have is lot. a hard anticipate a the enhancement all. and that So to efficiency. Justin

motivation the for that that was all And that's detail. qualitative appreciate question. really my I understand. Totally

You I'll challenges? these with in the Does a And in and which issues, terms then and the the stay companies. really in headwinds of we production was of half. front to the a And I our call or work double-digit should leverage as near-term get we're what seeing the more trying to follow gross chain conservative that's some environment I manufacturing guess across ask, the supply certainly of out offset operating issues. lot labor facing just are by inflationary through of margins models, half deliveries XX% just inherent in given be increasing you up. we first different

on to of first [indiscernible] impact in of jump stronger half in double-digit year. expected and half the the the year back be the a out I'll

Got it.

his And Brian Comstock is yes. vigorously head. shaking

improvements absolutely that Yes, to does the see is look going And no When Steve. pricing pricing, all. reason recede we'll throughout we think year. at to at there's

waiting? Since we're back in the I in big if ask call, can can get question later there's someone I a picture or queue

ahead. Go

you. Thank

it brought wrote up. you, Brian, I Bill, for Bill, this So but you

that. wondering their your but thoughts just if traffic, directly? hasn't I'm traffic of growth when of and of this been trend trend no down. of outside been what will If low XX could growth regardless, cause a are big you or just years address best, there is reverse? You what just in up more lot line a pull that brought slides, up on slightly to maybe And obviously part the modal. But at Coal has railroad you flat it your

question. tough a that's Well,

responsive paying short-term lot the opposed have will on We driven, policy industry today. public attention a our the almost which rail to the to profit for guide the to SPB stimulus have a more And it that SPB on is going do, everything as here impossible been to you of just customer close could government, gotten has The had amalgamation if We've from oversight miles a [indiscernible], ton be of in driven be a are fact loadings a hard booms rail. cars different for the thing. our traffic industry. a understanding had small types an to commodity Everybody XX sources. has of XX oil time cube and about simple coal, sand beam in center for had transportation, oil, booms and by we've we've and hoppers lumber booms covered and more transport

look lot that really give regulatory we a you rail talk But that might environment be environmental which demographics different as rail ESG times things fact, -- and extrapolate those place next should of traffic if efficient in and to could growth that has a particularly of It what it three a and see decade. carbon with less they footprints, builders mentioned all impact, has in future see year-over-year at lot look has in about railcar to would flush the people velocity negative a the almost environment, stronger environment to has sold the traffic declined. and great of over would the out regulatory occur stimulus the occur positive, rail The traffic. is for industry things -- look you that all what But our for the you been States, it a and to the statistics So at fuel United to the and you place, it what refer. produce you Europe carbon in should through is more Brian produce it’s carbon -- use in mile. uses take occur pollution, ton ship and to

color. you. that Appreciate Thank

Thanks, Steve.

And comes with question from America. Hoexter Ken of our next Bank

Hey, Ken.

Hi, guys, good afternoon.

that the like pricing talking about pricing that? us to it on It to XXX ago. million that hit average of I I yield that or seems and you Can ahead. puts that. great over on And at what let units any from So know were like further looking backlog great but is a in you mean, side, on to congrats underlying XXX,XXX, best the about on Greenbrier start like it you and a that and quarter, everything yields. the -- what's luck. driving on Bill just seemed two on build decade road but lot of down founding working X,XXX always the And just past you've on understand core last mix underneath information under on what's there's going with that career Lorie and mix hit the me building and give you change quarters just and about talked congrats $XXX XXX and

can is of bit that. Brian, this give on you Yes, little flavor I a

and hopper have But a what got higher diverse So those time is imagine. of of a in things is particular of are lot cars more nature looking more a and ASP you're delivery intermodal under especially you'd every [indiscernible] have book. an seeing can at cycle and It's lot we're -- somewhere have you lot in when looking into cars typically you've more car a you're you very ASP coming $XXX,XXX. tank play, essence, a really a that that order that at lot this higher covered type

But cars. a day, demand, a still you strong end still really ASP volumes of demand at of gives driving we're I the seeing tanker that of freight So bit we're the what large blend, is some shortages. the automotive despite seeing general chip what's call little more

Great, that. appreciate

So fairly it sounds a board. the good like solid mix across

or XXs? seemed were backlog out is it can't low or sounds choose it more then just not would rent it you is you about throwing can't XX,XXX facilities lines when why think So on still or you or safety it like why quicker -- if I throwing and or know running And level numbers versus out where now. fully now? at rent thoughts at mid capacity Is you're and think utilization the some utilization? you just you do XX,XXX, But you're number that that talking XX,XXX Lorie, really I of maybe quicker? you're that up supply back is the XXs, your out scaling were Lorie, do XX,XXX on throw chain, where you quick real to guess your like to

Sure.

our getting XX% utilization be perspective, quality as takes amazing to bit if might in people was a guess think capacity groove at utilized, would in back even working I of quite of we're say, times, of we little I worked somewhere folks that a get as creative have the where railcars. might in manner, as So bringing production people to bit time I to And to there in a at facilities to can from job building it do safe even just color certain are times, we beyond XX% give trying want be do an there. before, be our we're mindful we're a back. and probably I'd there what little some upside, say And that making be they

we be something So want we until so pushing breaks. to push it don't hard, that

that not we're improving the company too mindful the our But workforce certainly ramping job again, do demand. out workforce to also and that That up of think, a the of is be they great in and don't I there to push hard. that we respond they're backs doing and that to midst only we're of incredible day. mindful said, need men women, that making every being be on

move and of which the that guidance than think improving, we're So its why not is as things there growth allow as get we've will the that that because guidance, be up giving factors loosening positive given, part to have explicit the through people vaccinated, of we as positive chain number could year, been. a be that's more supply we where off starts this more of

that So we're we've to guidance and of going we're I say giving that's about. talked where kind the why

is be every company to remarks has Yes, I some about talking things that's that to have cautionary think responsible.

a in strong have availability have got North fortunate We back got around issue, States, It's we've hard capacity. of the and of lot We've people especially it's a capability to this And a America, lot done very We're design bring the long footprint a to labor in time. shorter world. quickly. term United in Mexico.

we continue cars keep optimistic our expand I'm bring on personally, statistics. to with think, lines I and very safety So can our

a couple on me Let give just of notes safety. you

do, reasons good welfare only of safety workforce. a workforces’ the not it Lorie thing productivity. of as That is is focused improves this our the to One is the but on improves

below standards the through awesome. It safety and the industry shareholder past a value over return year-after-year. company been core Our and have creates improving five statistics is way been productivity. of years we've We're it

sisters want to hearing that to have ordered we and simply people company proven by bumped little be who hurt utilization. the their throttle chain of if with continues overhead doing and men very commercial from we us can we far a and think in we are into and we do ahead is the capacity pipeline cycles. other supply so really efficiencies, don't push in cautionary filled issues, leasing manufacturing, be well in we brothers This the and So a I as absorption that that what can women working note and earlier you're economies

Bill. it. Lorie. Appreciate Thanks Thanks

up Stephens. follow from next Our is question Justin a Long with

months on wanted how the Thanks saw rate. just follow ask to XXXX I And for change around? two fiscal fourth orders for that's now. activity on seen quarter? given order last relative in one I any into quarter you you then given tax don't taking much want provide quarter-to-date Adrian, the on color just you moving is of to the me know if there's and the about just been Have what to any the level increase we're up.

Hey, Justin, then to pass this that half Adrian. the is question Brian. of first over I'll it take

that see the I I it seeing the QX. we're I this slowdown And rate as that would would is similar to -- very order at was lay think -- way rates activity the we're any stage. I QX had don't On to out very similar

Adrian the And tax Thanks. rate? on Great.

to we a should say XXXX. fiscal normalized return tax rate Yes, more for

So that XXish in percents range.

what [indiscernible]. on happens Depending

[indiscernible]. what the in Depending on happens

Understood. it. for again That's Appreciate helpful. the Thanks very time.

you. Thank

myself today. up your and any at much, great gbrx.com. have time Tuesday. very if to everyone attention you please relations follow questions, for you investor a out or Thank Have And reach

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