The Greenbrier Companies, Inc. (GBX) 29 Jun 232023 Q3 Earnings call transcript

Hello, and welcome to The Greenbrier Companies Third Quarter of Fiscal 2023 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

CFO. of Anthony. CEO Greenbrier's you, Comstock, our Today, Vice Good everyone, joined fiscal Commercial quarter I'm and call. XXXX and and Lorie and Vice President; Senior Adrian Thank and Downes, by conference Leasing President welcome and morning, Executive third Tekorius, to Chief Brian President, Officer;

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

In addition IR additional slide metrics found to website. the issued the this a of section press can financial morning, release presentation in on key information today our posted and be

Litigation today's forward-looking Throughout on meaning those Matters XXXX. in Greenbrier. within expressed in cause will discussed our differ or discussion include forward-looking call beyond of today, made results actual from conference could some XXXX factors on that Act and by important behalf Reform to statements of we Greenbrier's the of Private statements Securities describe the of any the materially

to I'll over the call And with that hand Lorie.

you, and Thank I to summer. morning, hope Justin, everyone. the enjoying everyone's good start

into freight I'd you market, Pat forward Greenbrier that join announced Yesterday, Board U.S. with rail as that Pat activity. publicly the working insight to to Mexico perspectives to Pat will the of as his Ottensmeyer saw hopefully our on we Board look Directors. like welcome the and get his to well

inaugural Day As you many on April hosted of XX. Greenbrier Investor know, our

a during event, available the who available presentation And the via SEC on you will time. on areas. at be website to we or for website. the webcast, period of For four in will are attend three-hour And unable short full those the touched be person, forever our replay of

in our position leadership markets. our First,

diverse capabilities of track and record long Second, innovation. our manufacturing

differentiated strong consistent financial our And economic syndication across cycles. capabilities lastly, our model. Third, performance the origination and lease in improvement

manufacturing returning investor focused strategy only fleet we're segments, schedules in Greenbrier And follow share strategy the base it's shareholders. each to cases, grow our the our to pleased that progress own increase ahead some and out revenue our of since on through our lease we've in value in of margins areas. two recurring allocation investments, foundation these laid also been while day, others, We we're capital In strategic internal months, made execute and to plan. laying to I'm a

highlight and progress important contemplate we And with as briefly our some for linear, time goals, I that this I'll horizon. to plan towards caveat be strategic and recap our expect not the results these five-year targets quarter, achievements do a

Returning we of to quarter, billion. a the $X revenue generated

margin our XXX that QX by targets dip provided aggregate mid-teens down revenue totaled deliveries we're improved the the from slightly investor on fiscal quarter activity. of aggregate during to one basis syndication prior due progress gross XX.X%. pleased gross XXXX points XXXX we And report Our margin And compared the Increasing the timing by units, the is to with while to of front. to the day.

basis XXX prior with increased points Gross quarter. X.X% of margins compared of manufacturing the

day largely some during during will that issues many quarters, efficiencies strategy. of And the we're will that be far investor discussed versus primary be of previously, basic thus the some for efficiencies buy In been materialized bringing fabrication there unforeseen continue. we've And than that our issues have we're particular, we a and headwinds of sub-assemblies, as while in mirror. And the chain occurred discussed quickly rearview make expected. confident the recent as supply achieved seem more to parts part in-house

to quarter will full be million to fiscal $XX today. cost savings of the achieve in phase that XXXX. completed in fourth targets first our expect $XX The we're And million work this in of we

the the million. completed Marine result are $XX of we Portland, XXX,XXX to pleased on to in quarter savings XX, capacity costs of railcar many as units $XX to plan sale of its after May I'm system Gunderson's of the our million that's will shipping extremely of over These annual taken hard XXXX. in permanently. part of working expected last since share that owner rationalization Gunderson Additionally, facility. completed new the that production Gunderson getting workforce out are rail retain that

Now ongoing the continue seen continue been focused improve two improved the year start years, volume a over this services from pricing Their the margins on momentum since the positive despite of the business, to strong sequentially labor efficiencies the moving establishing maintenance on the across last segment. expecting we've challenges. and to operating year, end

in And as five our years. plan. The to strategy. a This market laid of is expanded the expected multiyear the we've to Brian in of leasing within the will plan component execute important and and position recurring for doubling next positive, we're foundation for result remains an great is revenues very discuss leasing our shortly, backdrop

Now part to capital returning of pleased to increased quarterly by capital that Board allocation dividend I'm is strategy. $X.XX shareholders integral our our XX% share per to our an report yesterday.

since Our the reinstatement the in dividend and XXXX Board illustrates places on activity. importance has its this doubled

ongoing rail levels next to The demand been economic their where in replacement North we or see with is few unchanged, be remains Europe, mixed, factors intermodal for to deliveries offset demand creating at economic near railcar with economic strong murkiness, bulk softness somewhat our broader crosscurrents. across the this continue than in more several America the background for Despite wagons. But freight times. years. In sector, by widened has the outlook

optimistic that to strategy, these forward not to on scenario. can ability targets our future actions we continue we Greenbrier. execute strategy I we level, confident investor term stronger, sustainable long team's company the the to our set create things forth day and during the progress reliant on focused demand our is at to sharing in which We're overly and a on on an calls. control more take aside, look Backdrop towards

environment activity. Brian I'll the car over now turn demand our leasing to And it rail and to discuss

Three received units XXXX up Lorie. be railcar diverse the new orders valued the million. based the $XXX types at worth most Greenbrier $XXX million. for to Difficulty] to secured Subsequent with of orders exception broad XXXX units Orders quarter, across intermodal. and continue end of [Technical railcar we

was at As of global quarter. of This excludes backlog ordered $X.X billion. the end units May the XX. valued figure the XX,XXX Greenbrier's XXXX units after

reminder, our railcar a include As units at not XXXX Greenbrier's part of million backlog that program. new railcar are does $XX conversion valued

types. demand due orders And Despite we for environment inquiries tight railcar freight and railcar up volumes, see car to variety of weakness demand in to replacement stable a healthy pent supply. and remains the continue rail

of and in services quarter. leasing management We the are performance pleased with the

rates double extending and high by fleet lease increasing nearly renewals we a while on are maintaining Our XX%. of are digits lease terms utilization

staggered renewals from durations the of and actively we expiration. terms in renew in the the create In resulting leases leases, their we a of to purchased cyclicality to both high these upside potential XXXX of through volume of have ahead impact working do underlying mitigate the We of are favorable are September renewals. And portfolio XXXX.

the net year As to to we we reduce We risk. basis. intend portfolio have in the remain lease next a the five on balanced right we with want counterparties. a described focused and years, million to during will fleet terms I years $XXX over the right railcar on investor day, committed coming each assets concentration of for per steadily grow that maintain invest invest we and more will that emphasize the types in only

about leased we million a and last of through funded from QX, facility XX nonrecourse have debt quarters. million $XXX million During assets backed of total $XX funded our warehouse railcar by the the over warehouse of two

leveraged our release of Fourth equity recently to the million The ratio. in to continue may this upsize our are upsize from a at we XX% to fleet press to our capacity growth support you prior XXX facility have terms seen XXX warehouse will facility million debt morning, the activity facility warehouse plans. in unchanged. quarter As the borrowing be

are We recurring of of more with doubling prepare financing as we lease the years. the fleet next the our our than in meaningfully revenue evaluating goal to size regularly increase five strategies

we had during leasing building Greenbrier's the European you operations, Europe. As William from in Glenn, investor a day who are heard capabilities

into agreement. our leasing including pipeline is entry leasing the plan robust, for and syndication is finalizing of European Our well the first ahead deals

Our remains Capital a of class. a decrease quarter, our team And production in is and market year XXX another the syndicated the from liquid timing schedules. reflecting for This preparing the QX, railcars busy Markets strong XXXX. asset team appetite for in

our to seek work core is the our Within competencies our we needs with and manufacturing as we commercial management more customer shift for Greenbrier towards whose leasing customers focus grow This are efforts as relationships services, to management capabilities, exciting aligned base. our closely an time we within business. optimize development deepen to and continue business and

and initiatives plan. forward growth you on strategic them we as been We updating with our have clear execute look to I our on

that financial highlights Adrian, I'll quarter. the over call who in now hand to the said, With the to speak will

Thank you, morning, Brian, everyone. good and

Before the information moving can which highlights remind found quarterly the our would available into the website. like financial to supplemental I is slides quarter, release that everyone be press and of in on

was segments compared with adjusted to EPS QX the in Our aggregate QX. in across improved strong performance quarter all gross and business margin

in units of include includes XXXX of the highlights the of higher, unconsolidated highest since from Brazil. second quarter with quarter for joint a or [Technical second consecutive $X fourth billion deliveries of for the venture Difficulty] the was quarter our quarter and Following units deliveries revenues XXX the XXXX

of maintenance improved pricing maintenance the the Aggregate and at gross segment. in points than from in XXX higher manufacturing services XX.X% segments was stronger attributed prior services operating the efficiencies quarter, margin margins higher segments both basis volumes in and resulting to

the during a as We Day the momentum expect of in operating initiatives Investor the will continue described result April.

employee expense to an X% increased compensation related expense due QX a result of of $XX is increase in from primarily as attributed and administrative higher to profitability. incentive costs million higher Selling

rate and favorable XX.X% a charge The related Portland. business Gunderson our had exit in million We $XX primarily a sale discrete of consolidated tax items result of the pretax was of to Mexico. Marine in of

costs, of to earnings Greenbrier and million Excluding impact of adjusted the attributable $X.XX. EPS related generated of on $XX the loss net sale Gunderson exit adjusted

million da was $XX about EBITDA revenue. Additionally, adjusted quarter of for X.X% or the

quarter capital Greenbrier's million, operating cash Turning third operating flow reflecting due a improvements $XX working strong to to nearly to third positive a -- strong basis turned of results and on year-to-date and efficiencies. due performance sorry, to liquidity, quarter

QX, as the short repurchases. cash included consisting end quarter available on as $XX million our The and $XX our credit the cash Our borrowings million million of share of at $XXX $XXX of revolving million of well $XXX repayment of primary of facility, borrowings liquidity of use of term million. the recent was during domestic

strong to As and expect capital working levels improve. we liquidity continued operating as momentum remain we QX finish to XXXX, efficiencies

strategy this in to is to investor balanced Greenbrier capital initiatives one April, share our and An day part during to of strategic a dividends approach through highlighted repurchases. of capital allocation. shareholders return As our integral is

X.X of current quarter have repurchased the program, Under During million, quarter million. third Greenbrier the the of share and shares for through a of January of authorization million of the prior we Between repurchased X.X million X authorization XXXX. million for was $XX total XXX million which $XX Greenbrier remaining that the part repurchase $XX million third program. second shares extends

the In annual X.X%. significant repurchase a activity, of closing XXth per share, dividend. or yesterday's dividend increased XX% price dividend by to consecutive approximately addition to our representing Based share on $X.XX represents the yield Board

XXXX, Greenbrier shareholders, $XXX and capital share over dividends million repurchases. to of Since returned has through

value. capital to shareholder and Board long team management of create balanced a deployment remain designed Our term committed to

Brazil. current guidance fiscal XXXX approximately trends the we which our on is production and includes 'XX XX,XXX based increased units, our raising to including guidance are following: XXXX to deliveries from to business units XX,XXX Turning guidance, and fiscal outlook, and Greenbrier's Greenbrier-Maxion schedules,

manufacturing million margin revenue $XXX we leasing approximately and approximately gross our Selling to to consolidated $X.X XXXX of We're low and maintenance services, fiscal services. percent approximately expenses double to and expenditures guidance of expected is in $XXX and year be billion the million $XXX $X.X administrative capital sales million expect million. And $XX $XX management margin also increasing in digits. at and to year billion. between and And million be equipment $XX full be unchanged, in million. are proceeds gross Consolidated

closing, a In reiterate I'd to few points. like

We yet are highlighted strategy confident our as in come. investor term is day, at our the best I to long believe

team management of track with experienced incredibly a success. Our demonstrated is record

stability which coming visibility over We a strong and backlog, robust the are supported by years. provides

drive shareholder growth. Our look strongly year, well in opportunistic for to XXXX. finish liquidity And strength sheet we're as and to into allows our we positioned balance value

Now questions. we will open it up for

Our first question [Operator Elkott from will TD come Instructions] Matt Cowen.

now may You ahead. go

achieve that you. possible to manufacturing those was of Thank clarification, morning. Lorie, maybe Good efficiencies first ahead can you quick plan? it what made it specifically

it's say would I Matt. women tremendous question, hard in great work manufacturing the A by and men our and operations. focus

trend. last with chain we we second and that be quarter, of we're able about were talked improvement on seeing is thought struggling would that internally our As how to quarter one we we about talked focus -- where headwinds areas the ahead to This recall, the achieve. you'll supply reverse of what we

As have things last it companies not that be headwind, persistent can supply chain seen many up. a just Greenbrier over but several or as can the years one of those can pop be

pleased the I'm and with our So and just manufacturing execution focus attention group. in

it. Thank that. customer after? in big in any XXXX Got the the were And single or quarter you then the from for there either a orders XXXX

something number healthy or is in drove several if to types, of originations, we but direct well large sales. let I'll nothing like you'd lease in that like. minute anything there car had it across chime of really as was orders, that a customers, a Brian strong a multiyear yes, was combination and he'd demand to actually, that add? a Brian, nice commodities, as diverse But

No, kind blocking I we one But and had diversity think or we what the Lorie. every tackling, not of you the of basically, Matt, several orders, we hit see two. it's large just had normal kind it, also day. of

the it's the pent came was mill, kind coming up of far come just just as in fare, are QX Some run as of the diversity. standard as multiyear quarter, it we previous kind which would in the your the in no earlier order from order in But and of now. now is orders, of quarter in thought

step the being QX, XQ. this I to good for much goes to know, a in of And below the the other up back ASP, XXXX, X% Brian. versus think there sequential That's factors, because XX%, mixed how down the was ASP was after -- after

a automotive tank to better Yes, it's more a we're little into product, starting see well mix as is I the think the bit as cars mix, mix.

focuses has to place of the better As of I into industry do you think the a well. know, one pricing been continued as

as And combination uplift mix well as think a seeing so you're I better a continued pricing. of in

Okay, one, the lower I you than deliveries and 'XX, do margins one for as this half everything this really first highly fiscal may. not cycle? last is basically is be for More even just fiscal your if earnings, case the often a expect anomalous to

to reasons it. to have are we see has first Because I'm then for kind bit can the how we and variety are let of of very tend to continuous of half we're So orders, on after focused without gone certain little and in quarter margins, I'll bit like right, we jump others of that second I in, half chuckle. join you're our in deliveries, of make from sorry you of a flow, own muted acknowledgment cash focus. going then in the And a that do can continue so that improvements quarter a sort trend. not little that a

up. next to going be to there's XXXX. better if predict quarter to make XX year perfectly planning quarter. be of be for But continuous improvement We're to first after something have not fiscal the be planning than we're to hard And half working it's we're that Again, soft. that pops

Got it. Lorie. Brian. much, Thank very you Thanks,

Thanks, Matt.

next question from Long Our come Stephens. will with Justin

may ahead. You now go

production railcar made morning. those at to of look down and a on Maybe the industry a amount. calendar Lorie. projections that lot on Thanks, in follow last you a point When are decent for basis, you good up forecasts XXXX

speak your you this you've based in move production have fiscal to you can here just as view June, So this visibility today, of the received we on including I'm the industry into point? year on to curious about level in you XXXX orders 'XX. talk if at could And broader your production backlog

close the got have fourth that production in but out number say great is of North we'll some would do Right really any to the some downs, production production, that give big any where some for I on lines. pockets about we our going orders have quarter. visibility, XXXX, coming But America recent big fill comfortable very visibility ability the don't we're steady we're of out seeing we've received feel what ramp continuity good really we and ups we've We space. to ramp us adjustments. open pretty a where or still up have of now we have

production thing up volume, we to that market. other in in can The see of our the focused North in also just on on focus interesting that benefits one XXXX. our be would as if America. how quite looking the you're we're at ramping as And it's have we're Europe the fiscal here at well, that North not statistics, But to to you you look deliveries American where will continuing serve same Europe,

Okay, how good as sequential it was Europe? helpful. moving comfort you continue gross came great, quarter improvement. manufacturing that's year? much some I we versus to next think in And margins shifting fourth that guess to going gross what's forward, sequential see momentum margins, we'll Could see the America into about And that North to speak then to and early manufacturing of your

Justin, Justin. Hey, this is

we're quite as in XXXX, QX to I would very that weighting see the improved a life. talking hard the well has think both and performed already, North both about in just such operations and we quarter, we and then maybe of America sequentially. going saw do expect is size Europe improvement, perspective kind a to America believe but fiscal same into we which forward, but from And disproportionate of there, continue not in North extent, improvement to

hear. good Thanks the that. for it leave I'll at Okay, to time.

Thanks, Justin.

Bascome will Our Majors come Susquehanna. next with question from

ahead. go now may You

you. Thank

year. sheet the in off you you'll sense the of realize of I when cadence cars next still on do the sheet balance we’re But have manufacturing fiscal and business? forward, a the balance put look we As from away

at say not I and consistent schedules of it's backlog. next think get to necessarily pattern that would that point, four quarters do we a see based detail. that I production over we into this on relatively ready we're the quarter -- will to much five each

supply of are margin, for you even? Thank accretive crossed. the overall pretty most issues And fingers you the chain to Is Europe behind Mexico or that. that the manufacturing now in are and those U.S.

I say accretive. it is would yes,

the freight when the As fact waiting. one the the it's North you markets even railcar accretive in of take Justin largest is into I mean, said, America consideration of world.

So it's to But for our accretive up Europe definitely going be margins. hard to to that. they're in to

fairly the companies know, you you look talk the XX size longer sales can X, out of of be the leasing to I know length XX, the a little but term the and speaking, leasing production How and don't months? the that that And, to same next risk your are or just year lastly channel some rate a some Thank your supportive have appetite what's about bit and for capital work, you and next willingness steady as the expect customers. two? over multi years industry for do of was from we you. duration you competitors,

going great see it. That's Mr. if question, Bascome. to I a just Comstock can handle

Yes, thanks Bascome. and Justin thanks

areas as and momentum into stability more to confidence some rest side, a seeing There's year pullback, market, manufacturing this of increased that's this we been COVID traditionally in over we're They and last as little build the to as operating operating more bit order going of are well but you last of throughout quarter driving the we next that and the this think due an other reasons. a are which One well the on is by interest as on the suggest more years maybe continue in of to the report pipeline, seeing I of the think couple year. I as lessors. lessor

that your channel, as XX the Are opportunity, that any growth stability starting months? to of from business Just know, for in customer? with we And you an is rising opportunity comfortable or comments get XX, think out they interest the you at and a rates? cost syndication X, least look on capital do

Justin, I well. Yes, one we as And grab this can do.

very returns still the know, strong. You are

put pressure house. the the have pressures But coming rate on -- you that returns. have of of appropriate in lot are of know, of interest rate side really lot a hurdle internal that deals As all a the

more a as interest. seeing result, And we're and more so

space. fact, some are we're entrants In into that seeing about coming the inquiring even new

feel are comfortable. term long pretty the we good And standpoint. pretty So we from the customers liquidity think syndication

you time. your Thank for

Ken of America. Our with next will Hoexter come question from Bank

now You ahead. may go

good Great, morning.

little get least got kind consistency So where the we've if after a balance Lorie, get could bit a versus bit lot It question maybe the and a you Bascome's on follow the volatility just of the I on ramp up. seems build manufacturing. of there. little sales maybe like external for the fleet you'll about talk it's of

versus getting sales? should closer production internal for ramp through? build of So that we are just take revenue, about understand the how follow want on you to up think external full to given the to I that build the kind

Ken. the Thanks, back is Difficulty] at Yes, what's look interesting it's a question. and And step to have origination. strength you good [Technical

So same commodity. car customers, same same type,

sheet balance While fleet. our lease modest own growing fleet, it is still a we fairly are

the orders skew sometimes that such it really are those concentration. would of our And size

Lorie, quiet. just getting to starting Do your But interrupt, of your quiet people, for it. answer. from you other the I like don't that to first they went mind IB line third do sorry the there? I'm went beginning I'm but mean

I've it brilliant the gosh, most thought. my was ever Oh, thing

one still probably it's I was So in complementing can sales people sales calling hurriedly hear our field of was me? every our you because because --

perfectly. Yes,

some originate leases. large very So can we often

number large type, a same same cars, customer, same car So of commodity.

areas. of own sheet a is excited it number any to being Therefore, really size. grow orders concentrations could we're I'm generous skew relatively of balance probably While our in those and modest still those our any fleet, lease

our and sheet to we continue can how approach so partners that keep we our own portfolio. diversify to disciplined that So growing balance work syndication will with we're

ends fiscal our as ends or keen Sometimes partners might others not our year quarter are on syndication year, as be.

as business. when opportunities we're appropriate they to close for arise. we're take those going to transactions those And So the going

quarter. the understand to some how to lumpiness the origination the having approach strong you we've disciplined very growing commercial fleet is a on on we're can lease capabilities. cause they we're from basis continue that will an quarter sheet. got balance And keeping But eye that So to

And then for a throw at my up quick numbers you I'm follow question.

more of car your a question. up per backlog XXX,XXX follow XXX that from revenues with seems I'll quarter. about the Because your down on than guess that extraordinary you Is wrap then So I And anything follow there to printed surprised orders in quarter just kind new that in like came mix? then third But weren't by in at said the to you shift? an up, anything raised outlook. yet, you

So changed, was you that raise to I there to that there the just want what understand outlook? change that something in did led

the in June that activity. needed. on on Ken chime So is more line with can really And our is perspective versus the I the on And ASP QX and obviously, our QX. mixed just question, as it question, QX in activity outlook and correct Lorie from ASP primarily order the think

wanted that deliver of in as to some we been time make supply first we of we issues, year, on the were have our and the challenging, six able the to But in perform the customers. some part months we year. had bumpiness expected And to mind and sure that we chain through we and of cars bear the navigating as working were first

to seems getting sunset that getting is now So momentum us. and our our and legs operating we are under have

feeling are We confident. more

it. the Wonderful. Thanks time. for Appreciate

Wells with may Poliniak not go Securities, Allison from you come will question Fargo ahead. next Our

of Deveikis questions on Congrats to smaller were Most bit, taken, This but quarter. of of want is here. my I for pick on the Allison. market just morning. the Good a kind little kind just Ryan

kind there Brazil, didn't you softening? came Is term calc know, headwind XXX. near like implies it my is a in Or, market of it it's So around really XXX delivery the just raises by just on quarter, that that that winter.

of softer in a concessionaires. a Brian, in the like of looks to a bit Brazil a question. of build Central of is is capital next Lorie little infrastructure as of in I in due restraints that continues right little the a an of in six some they're bit only Right in and a see over jump I to it quite now are can things being on XXXX bit Brazil Brazil, In you're as that to the probably months, there begin this period So, well size lot completed. momentum, expansion other areas bit and

that So to Brazil we term anticipate is to going continue long grow.

in more now data However, a level right play. they're

Okay, called guess or kind whatever the as more cycle refurbishment conversions an side here like of And like those of the reaching been on any not of backlog thank has one on are there's great? side, then much net market I declining, end to color, would activity you. just where that we closer it's there be

I at of are on still to that got be cars is is I seems are a kind is finite side shelf least Brian, The that There up conversions is several the always moves conversion kind think But of then kind And it can down. in of years again. This tank side. of cars you've life a dive the there to been number and opportunity conversions. there up. And this requalification to behind And ramping lumpy. that have programmed of already.

think requalification car conversions I some programs. from is So just a large tank of some to you'll the see the large shift what of

thank Perfect, very much. you

Our next with question will Markets. Barger KeyBanc come from Steve Capital

You may now go ahead.

- Jacob Q Moore

good Hi, you Barger. Jacob on for questions. morning. taking the Thank Steve Moore is This for

the the much savings already $XX day. quick maybe Could about that Gunderson already how million that out fully million million So $XX in of to from at exit, think actions and completed achieved? savings a one, you've going that the you've system also $XX for to the is talk specifically of just $XX you -- cost got to And you clarification maybe laid quantify then million investor you initiatives just moving back that forward? my now XX on first the out

I us, from see the think probably Hey, plan. -- which Brian, ahead problems. cost We're communication infancy still can billion anticipate of I the having implementing that we that of to develop $XX but of you year. continue we're it that can for Jacob, to quarter’s they're the really question that the address we've this part $XX first is see lost like savings. seems of throughout some the billion It you, on fiscal this from will you is as in schedule, earnings, as is next

in Got anyways, starting broadly, better it But question, maybe overall point. suited freight And be to for just my for one's seems a down, second trends at little Brian, are lackluster you this rail traffic then traffic holding is this compound to understood. bit there.

of maybe earlier now comments work year? and of So the for point provide outlook the is the trends landscape traffic halfway at my on remainder Could the the rail an the on expand really question updated year. you

look Yes, still late at the you of of rail are of fairly there's number industry online. segments undoubtedly, a of are traffic side facilities There amount of demand. improving the early number plastic up facilities that bit, number that because are several a XXXX, equation, down a there's tremendous new in velocities Auto, that pellets in the there's a There's come pent segments robust. new the online coming when XXXX.

small of that still older cars tremendous have cars, fairly to retirements of robust. lot a as number And in coming and And new area as storage. a well. facilities continues be well Biodiesel online amount you as a of of then

major looks over to are condition. the fairly still while XX overall change economic So Pending cycle build next and any the some at so least believe months. XX headwinds, there outlook, the level in we the

ahead. right, Got it. go Understood. Thanks. All

okay? Can you us hear

Yes.

check here. to still make want that broadcasting just I and sure we're So

Sorry, Thank you, for Justin, difficulties. phone. a few technical your we've had

our XX fourth bit other know, that owners Gunderson, that your part Because early we into there you as on touch wrapped permanent get with the quarter. a little comment some of won't the new to probably up. working all about have just in of realized will savings fiscal be our services. we're we Just of But transition be for

it. Got questions. you Thank taking Understood. the for

Thank you.

[Operator instructions] Our have go Matt next now TD or question up may follow ahead. Cowen, you from we Elkott

taking Thank follow you my for ups.

coming Brian, for in mentioned. is I for up think 'XX this you that renewal the Brian, leases

you is to think renewed rate get are get kind them side? pretty now. hot renewal able If you you What do improvement of the right can expiring versus market earlier,

the would to seeing acquired, at time. the of purchase rates did, and that a rates we're that we sub question, in I renewals those related XXXX, Matt. that lot market back Good lot in of were, we say XXXX, the fleet the A

renewals And at we much at double digits, digit in in we what Matt. in those the see seeing quarter quarter double increases XXXX believe in that's over we're larger least we're but stage, predicting for should so cases, this

how And many are cars those?

That's that. a I'm but sure have fingertips, at you great I get question. Justin don't back can to on my that

Yes, just XXXX cars. about it's I say

one And then maybe more for or Lorie. Justin. thanks, question Justin Okay, just

You're for quarter. aggregate margin mid-teens to pretty the close target gross 'XX

this can on replacement remind what second, be thoughts on, have it So first, any we or high at upcycle of below you target at is parts work recurring the know us to because target? And a a contingent should business level replacement you demand the the do does updated demand level in grow?

received in the question, that achievements year like we're good on so under boom say consider get And that adjusting And targets. continuous of think those third a improvement targets two while our five we'll about a would demand stable So, we'd Matt. we've this to excited before more belt quarter based I not the quarter, are market. I

Okay, got it.

of Just have one know probably this. going should kind Gunderson? But last What what's be to guys one. for? it going is used to to happen said what I use you

at so -- more metal do. but run Portland or hasn't we continue purchased green broadly possibly yes, operation looking metal of work. infrastructure by Oh, were they're activities by other And it some some marine able local to they're building local going to expand couple to think a if than here other people, they're I going bending that was come manufacturing, Oregon activities, through, a

But are going anymore? there to rail manufactured cars be

clear have cars. no that, should I rail been about Yes.

you Thank much. very Great. it. Got

you. Thank

back our I This would answer question the like turn conference to to session. concludes over and Mr.

Justin any remarks. Roberts closing for

Thanks, Anthony.

Sorry great Appreciate And for have everybody, out myself day. my have technical Hope relations@gbrx.com. to this investor follow any you please issues you a great day. up questions, everyone has reach your Greenbrier morning. if Thanks a either have or email and if patience.

Happy week be safe. and Independence a Have

for has today's conference The presentation. concluded now you thank attending

now may disconnect. You