Trinity Industries (TRN) 26 Apr 182018 Q1 Earnings call transcript

Before we get started, let me remind you that today's conference call contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995 and includes statements as to estimates, expectations, intentions and predictions of future financial performance. Statements that are not historical facts are forward-looking. Participants are directed to Trinity's Form 10-K and other SEC filings for a description of certain of the business issues and risks. A change in any of which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. Good day, everyone, and welcome to the Trinity Industries' First Quarter Results Conference Call. are listen-only lines phone all in mode. a Currently, to during a there'll be session. questions opportunity an Later, question-and-answer ask Please be advised today's program may be recorded. my now to is pleasure the turn It program Ms. to over Gail Peck.

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we're to we Aaron. morning. will Trinity conference detail morning, progress on Today, I'm Vice on call, Trinity. we for Treasurer Peck, used follow Finance Gail you, brief anticipated joining companies. Thank earnings update public spin-off our On our business Thank everyone. standalone call, a you transaction. call. the last planned included Industries' quarter you which for XXXX Good on first will results and of regarding alignment format President, the making Welcome this morning's us two hear this the more the

business the slides under discussion tab & an on call, filed in as today's and as www.trin.net of our Investor website section. the tab be Events covering X-K Spin-Off will well posted Relations Presentations the Trinity's alignment the Following

President that of in week We this Chief Products, the the new Construction, throughout and pursue for which for infrastructure Commercial Tim Vice Vice Officer Chief And Senior business of Chief Trinity and are Perry, Planning also joined over our Eric and our Chief Trinity. in Chief pleased President serving TrinityRail; Trinity to President future held is Group company, Senior role President; of Wallace, us the Corporate the Officer. our commentary President Executive Antonio as Vice Rice, continues company, will Trinity speakers and Marchetto, our Equipment Executive today's joined officially Construction President President spin-off. President Scott Administrative this Vice room is the Lovett, Components Antonio groups in the with Vice Barge Carrillo, Officer; Inland the will Financial serve and Chief XXXX Officer to Chief Today's and Theis today. Marine provide role Senior period, and of Executive Chairman, he Officer the the currently in James CFO future Energy previously Scott and Senior Melendy these our and new Officer and Vice and and as Energy, Officer; President the include Legal Strategic Group. announce for for Group. Beasley, Financial

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a off this good and to Thank morning everyone. Theis, year. to start you, good We're

It's that results our financial fundamentals of businesses with the first reflect few are some is difficult momentum market last the quarter positive consolidated a it persisted for for years. Our order time, sustainable to see to to We and recovery. when the sign encouraging. of of inquiries predict when of occurs an this demand. tends several conditions the in during precisely market products. making of weak increase level business an our for respect period extended Today, an eventual Historically, a be early

good reminds of spin-off shareholders. goal will of this immediately He in towards pleased stage closely direction. helpful. report of achieving positive efficient the accordingly. activities. as Having to is when this current and respond We're progress value businesses to of atmosphere our our downturns input more the very infrastructure monitoring Antonio pre-spin to previous me provide and to I'm situation well a However, moving as our that the we're onboard demand process begin will began at seamless a add making

some Trinity insight the alignment I company. Before the businesses infrastructure and Melendy gives her will spin-off between matters, update of our regarding on provide related

aggregates, forging railcar Services our manufacture comprise railcar aftermarket for that wind containers company business, Leasing our will will trench heads Inland car will shoring, maintenance Management tank primarily our types railcar It Post as and including of U.S. the products. structures, utility our business the comprise Barge, tank in spin-off, the spin-off, businesses, as our manufacturing include our Mexico towers, businesses and business, products, rail-related these this businesses and in our parts Trinity and businesses. Mexico, well infrastructure business. liquid also our components businesses Following gas include that casting construction our Railcar

our products key Trinity. As we've factors, of reviewed our products potential remain with within that highway management. highway Keeping alignments of Trinity will we decided discussed ongoing business and should continuity a several business litigation number provide for

and infrastructure businesses lead and businesses skills We for infrastructure quarter will industrial the be these well-positioned Trinity's during time that including axles market. Antonio other placement company. casting as I enthusiastic discussing about customers and our products, as the believe our also spent first the organizations. for talents part of of of products forging achievements opportunities our the serve to and number railcar reflect manufacture well of are We as a these growth couplers respective people. that

our a as to will past beneficial success organization to I'm as it Our several move culture years future to potential highly the now and that spin-off the during about conditions. of has company. the have and These are new challenging Trinity is company we by over characterized our excited turn process. Melendy. opportunities infrastructure I our flexibility, through performance-driven characteristics and These market the collaboration both responded have contributed proving attributes our businesses responsiveness. for same

infrastructure-related Planning earnings of February. of fourth and spin-off continued Thank quarter and you, the morning, our everyone. in Trinity's good execution call has well to businesses Tim, following progress

we've filed alongside will we year. to too this track together we work advisors Our continued teams public and quarter companies. what strong the call, be remain to this our time, in in our the valuable last ruling working regarding to our Since on fourth letter complete the anticipate IRS are At with private create February. spin-off of

We quarter. of Form progress file in additional the have in we key second finalizing to made elements plan XX, the SEC the with initial which

this XX that reminder, milestone describing are Tim an public primary the spun-off. important the is is the being business businesses Form segment filing. filing discussed alignment a As The for that infrastructure

that preparing We last historical company the are process of years during entity a time. key the Form three were for infrastructure a it the in companies' reflect XX. also will financials are also standalone the as new part which These of new financials, if the

operations. collaboration values effort the day-to-day in spin-off by business to effort executive time team significant file which and and is and expect the requirements a doing direction transitional name by of board also embodies company initial our new they each The The cross-functional one assisting is finalize be separation the job separation strategic in services core capital to management complete. establishing spin-off the capital minimizing successful Trinity's to information their undertaking this other We sharing been and with set team flexibility, We day and directors priorities is Form elements XX. leaders of matters related we well. new the to to is the allocation at of structures look with you are critical dedication approaching Numerous course. excellence. once the forward this are very of underway will due has and spirit our transaction our and disruption tremendous and proceeding team in

to internal spin-off stakeholders the grateful both and work process. results all we external are are continuing quality of employees business to to our deliver We through who as

While spin-off, is until as the one company are complete. successful we focused spin-off Trinity are we focused on a also operating on

on the to to We other our appropriate. will turn calls I Scott. times our and as continue stakeholders quarterly over update will earnings call at now

and Melendy, you, morning, good Thank everyone.

exciting businesses to to I a of be of markets. Trinity years, new market-leading company's built part honored future. the Over the has strong platform serve am infrastructure

well and upcoming earnings the and Antonio will and future about We company commentary are Products I team Antonio to Inland a on the on Construction together strategy as groups sharing in I our months. Barge Today, look directly and working more and you provide will leadership calls. hear Equipment, details from Energy forward the

to the our operating Energy Energy to last businesses. reflect Overall, reported conditions for our for first the profit compared Group lower mixed-market revenues results to Equipment and Equipment continue year. quarter, results Turning

Equipment that recognition reduced our tower wind driving experienced XXXX. XX-Q but later extended be wind in year-over-year decline Energy of revenue will our we today. on agreement expected amendment factor into the XXXX, rules discussed One our impact earnings volumes last from filed in a Additionally, that a deliveries revenues business our was agreement call. long-term in towers detailed one-time This

We year. to anticipate a tower this stable production continue wind throughout of relatively level

utilization structures to we production on to utility wind power business Group, first As many continues our for note, our the of tax renewables although phase-out our to have a quarter the improved On this improve of other to levels put of previous credit indicated positive significantly margins. of scheduled the calls, its wind orders need our sources oversupply tower remain of to optimistic on strong. were We business. profit the view by grid remain and aging The first customers infrastructure, year-over-year support Inland country's barges quarter. and sizes long-term generation revenues improving. about our liquid and driven million to continues quarter, small, barges markets appear the increased and pricing. fundamentals. long-term activity for Barge volumes continued replace but market performance of bidding connect persisted, positive to during new We be received Project the and our year-over-year. reliability for totaling down dry An new $XX In in during operating has be pressure

revenues, Our extend totaled XX% our backlog quarter particularly and buying our We of orders backlog. to production, The we focused our since encouraging, largely by Construction cost to low At of increasing million, pleased on have side. $XXX our In on And quarter-end been Products control generate the leverage. increased second operating we decisions on in Group, level business. to offset was volumes the increase were in year-over-year our The inquiries our year-end. in $XX.X equipment quarter the our reflected trench aggregates during largely aggregates opportunities higher a construction similar reflects by current customers. liquids increase businesses. opportunities products at a seek strategic conditions level finding to received volumes This shoring this one profit previously million. due overall operating reduced in our continue and lost market to was favorable business. capacity remain quarter and part business, highway The failure. first grow disclosed construction In of to facilities remain from

is spending. will turn businesses continues XXXX our shoring Construction trench in From made our our positive Products rest from of economic growth presentation demand of of infrastructure for markets to in a third Group the We platform Products long-term the that benefit over the Finally, Construction contribute remained fundamentals the strong. the year-over-year now to our to Eric. to I believe key Group. performance market of perspective, and we acquisition quarter well-positioned

Thank you, Scott, and good morning, everyone.

our provide first I TrinityRail for commercial will leasing, and differentiate the both performance rail business reflects quarter integrated business operating The year's platforms. North fluidity. service-related and service impacted of the strength scale compared performance to volumes American weather first first the quarter segments quarter manufacturing and that challenges market, comments our on negatively were model the our within which activity railcar during as and rail of despite last traffic positive system TrinityRail platforms. rail the

As demand investing investors placed response. grew into for railcar complement new show continue, railcar We investments industrial We transactions markets and fundamentals. The gains to of from demand railcars active increased many to secondary portfolio fleet XX,XXX two We're remain railcar in momentum for portfolios. sold idle completed an with we active a railcar partner experiencing over their were in as encouraged the is small RIV commodity the quarter during portfolio is North and previous these TrinityRail. available also We equipment interest in first Institutional railcars business service. in during railcars production railcar by improving acquisition tightening railcars continue market believe within the improving. first lease remain quarter. previously American markets to across

at during we time the As a utilization were Many these replacement portfolio impacting negatively call, value. last in off-leased purchase, railcars of the of secondary statistic. referenced acquired discount of quarterly our at X,XXX cars our tank a approximately market

placed recent these to able we into some railcars optimistic these of be a of into railcars already activity, in majority are our and we on service have the We based service term. near will place commercial

watching portfolio the planning market market in the this purchases We and are closely additional year. secondary

the was owned railcars, related of fleet. growth approximately representing managed of to We of early Leased fleet At XX.X%. group railcar the end XX% quarter customer the our end of was grow quarter, impacted by railcar continue was year-over-year. XXX,XXX the first a the purchase fleet referenced to I of utilization This negatively and bankruptcy. portfolio a at and TrinityRail lease leases the termination the

lease follow. levels levels. North those are improvement below leases, led Generally expect be market. to year-over-year production which comparisons. improved of rail expiring our short decline improve industrial in Historically, the rates growth lease to Railcar speaking, utilization to We the term rates beginning with in current low has recent from impact will to remain revenue American

rise in lease and prices domestic have pricing steel increased usually on rates In interest higher addition, railcars. new

remainder many XXXX first received orders activity order customers of for quarter which of serving in the Approximately for to to are new direct The operating replacement were first within fleet. with is Group's cost reflect sales our including third-parties. XX% pleased am our railcars, The orders prices. New We railcars, specialty of quarter diverse are first control railcars railcar the lease select railcars, reflect to during X,XXX encouraging. number various which for selling mix orders approximately new received growth delivery. and expenses. the results, a I quarter which Rail of the delivering the end-markets, higher received specific efforts during have

railcar new schedule. of Our good visibility backlog our provides production

of first moderating quarter. X,XXX executed We schedule delivery XX,XXX expect The in a Rail railcars in to Group deliver XXXX. approximately railcars on the

higher revenue of margin quarterly operating margin railcars. lead our capacity ability – lower improved the declined deliveries we operating profit performance to current XXXX and delivered due and deliveries, within our orders on production year-over-year incremental and to pricing the times, due with volume have operating leverage on guidance drive the to the material above business. Based increase profit While

These customers. regulatory needs the made demand last lease is footprint. were the to recertifications and meeting investment for expand serve and service compliance We business significant due to and requirements. modifications, expansions maintenance of focused few capabilities additional demand Our of other to fleet service years our on owned auto-rack in those our key HM-XXX geographic a

offerings TrinityRail providing and In additional leasing, products integrated service manufacture growth continue see model. for lease. demonstrate railcar the within We to of to services manufacturing the and we closing, this continues business opportunities related by to effectiveness its business

in grow to cost-effective a and to us differentiate quickly quality positions our needs to platform the scale market-leading of us products manner. customer marketplace. in Our ability our respond The

our enables railcar the to market to quickly adjust in participation with broad chain, operational demand. in Our combined shifts value us flexibility,

for well-positioned turn remarks. railcars will to now demand his James it are improves. to over We respond for as I

and we our everyone. XXXX. Eric, morning, the of you, good results first quarter for Yesterday, Thank announced

reported For of of This million planned expenses quarter earnings the adjusted an company's the including per earnings in quarter, to spin-off. quarter, of last year's $X.XX, $X.XX company for $X.XX the revenues for EPS matching $XXX transaction same and per share the of first quarter. resulted related core for earnings share first the level

new across and $XXX fleet, we and market quarter, the invested leased the purchases including level corporate our secondary wholly-owned modifications million our During invested first in and $XX businesses. railcars, at million

with $XX X.X stock the over million repurchases Trinity our invested share of purchase in under During quarter, also new we of program. shares a million first

since updates each a week, notice X. will par to as is additional any stock since holders on quarter's these per we our our above call XXXX. report $XXX the force to in is program convertible likely price first call financial A will current We conversion This call opportunity price million of at notes activity share. provide this we current share of the the of to June Earlier convert provided results. $XX.XX repurchase notes issuance on notes

expects will would cash. at conversion determined aggregate notice of amount average in the more payout for this EPS any price, premium The dilution equate no payable to a fully to currently on aggregate fund X.X $XXX conversion are cash transactions would and shares the to noteholder's quarter, to to a cash and approximately settle however, We stock Therefore, cash total stock period be related of beginning in second we price in par stock on using the time, dilution the conversion the cash, option The the basis. the intend settle aggregated each and premium hand it At closing and $XXX financing that closing company as the or combination. yesterday's trading upon have amount a the depend payments premium. in non-recourse cannot above following a through the redemption. million combination million carry of from or following XX-day required settle amount conversion will proceeds redemption payable to debt longer on one the each in-the-money conversion million. We the

The about as they've call or for occur and important will We expect preparation once analyze capital in two further quarter financing provide we are quarter. early notes convertible transactions we to to the late of associated spin-off. been and steps which continue the third companies refine refinancing completed, in the the for information second the structures

Regarding guidance, you let our Trinity adjusted XXXX consolidated our not that to fourth quarter. guidance remind in and of the results been me incorporate the completion EPS the spin-off has planned for reflects

release between in much conditions these EPS We XXXX $XX EPS costs now or provide transaction with be we our spin-off including reported detail approximately tax costs, our we to expect between spin-off. that transaction the $X.XX of to transaction corporate tables per what as including press associated XXXX and expenses. planned $X.XX. as excluding expected to $X.XX, we lower The now able are million throughout core are the during segment that is to details range, earnings $X.XX provided $X.XX anticipated share We accompanied of the costs be of and These $X.XX $XX financial million rate. and the calls of year. will yesterday, impact impacts anticipate on the In reflects guidance detailed updated the to the market

expense when included the we operating with larger in $XXX includes during million in weaker the the year. Across the of expected guidance we see provided backlogs, lag conditions. to a our and with take when financial orders was of guidance effect pricing businesses market periods from of updated reflect margins what the orders margins we February. size the unchanged our This EPS year is interest relatively in due There's and in backlogs. result we for took Our time

this in pricing results. see we we're reflected of in increasing by As orders not trends our several markets, generally year this, while of be of a of demand result this for year's level the the some will encouraged

on operating on diligently However, to achieving are our improve efficiencies expectations. working teams our

$X.X on progress in you deliveries XXXX in been of our year. was year. to will total In into lease production We delivered quarter, the the fleet. Rail we this XX% In the this our again Group, billion. quarter of we Group, to leased XX,XXX go railcars At wholly-owned currently with our the first anticipate of Approximately Railcar RIV or the We platform. expect plan the expect our to approximately was the while value the deliveries XX,XXX sell throughout lease has will Leasing end the quarter-end update to year XXXX continue our of railcars backlog. our fleet continuing backlog railcars of XX% grow

quarter. of continue the expect transactions. sales now the leased as the from We though over and $XX million third the be quarters spread not these remainder of even completed to anticipate second, railcars the We proceeds to million fourth be cadence approximately for with $XXX first determining may schedule in still we're

reminder, the from is for the in guidance included operations. railcars not proceeds a sales for revenue from As from is guidance separate leased segment of and

reduced pricing lease in As compared on our XXXX, we the to impacting profit their primarily volumes long-term due than towers step-down renewals rates contractual in leases, Rates the are recent Group, beginning operations. mentioned, wind generally and as revenue profits lower are to leasing Energy lower Eric quarters. expiring Equipment agreement expect from in and revenues In improve a to business. slightly and supply for

to last optimistic Products as improve. in our continued and the and acquisitions In about year reflects business XXXX profit demand the shoring are businesses. We market our has revenue utility guidance made structures Group, in aggregates Construction we

could market orders quarter. to in demand Inland of to flexible market improving number We first Barge levels to this financial full-year placed the XXXX in momentum these a impact the respond beyond is a sustained An to the come recovery to fruition. of acquisitions infrastructure position spending see XXXX. projects remain as focus In gain state increased and from had though gauge. both the Group, will strategic difficult on at the group We federal we timing

a barge operators Our to rationalize year expectation as continue fleets. for their remains breakeven

assumes similar docket as work legal to guidance our corporate our cases. XXXX expenses, Regarding products continue cost will remain at highway to we of that levels through our

optimistic that of are leasing $XXX we our these to cost leased in railcars capital fleet We work also with we From manufacturing as market near add expect will items. to from million in XXXX, future primarily decrease lines, expenditure the value from secondary standpoint, purchases. this through a a our but currently

as have $XXX In fleet a certain fleets We in the addition, anticipate to yet After $XXX range flammable investment modifications will new and additions railcars owned to available capital corporate proceeds expenditures owned between tank and million modify the sales fleet million in a we and level lease to in leased as XXXX. investment the not wider railcar for invest related we $XX to proposed approximately net may In our to approximately our XXXX, commodities. the from of these profit meet into million. that of we cars range. included businesses railcars, partially for lease also capital service. spin-off expect lease additional of make this new The and $XXX will planned account of million well regulatory on carry taking deferred at expenditures standards our are

our impacted release XX-K. among and our present XXXX yesterday, from risk actual disclosed others, we in number may be including, As of could factors, indicated in factors press and forward-looking a expectations in differ statements by results

for now will session. question-and-answer us prepare operator the Our

Wells will Poliniak question take from first Allison with we Fargo. And our

is line open. Your

Good morning. Hi, guys.

Allison. Good morning,

back want to go the commentary just to I around margin James, rail.

in how like it in terms significant have outperformed It little visibility both? about think and cadence a QX. we Any is step-down should how mix, I of I of is bit there. You is the should that you significantly there? price, margin decent we QX? another sequentially it expect comments mean, seems in look, mean, of

year, the guidance X% through going as cars go planned Allison, as the we year. the in we bit as produced look our quarter-to-quarter. That we We've what's number at our a at in first Yeah. year around and given to production. move quarter look step the backlog, down the of the will for we've the it's for maintained

First that to very around were and were that's of quarter-to-quarter. were higher on those quarter, on backlog the orders move pricing good. the in The quarter the little railcars mix efficiencies produced that bit going we first and a

in So, without year, XXXX we as at total. look cadence giving as sequential the go look do reverting X% we we to the through back at

waiting and then with Thanks. commentary not we it Does to and decision then, could plan a business? Highway there? on with about staying about for the if And that we be case that the rail just what's made business are can Corporate to sure made Trinity this, mean, I'm much back should infrastructure the long-term around Okay. a but how you I side, talk be handled think How decision a term? go is sooner? longer

spin-off, That products about of The terms job good anticipate, that right we talked to talked down. the long-term really not but We've on about a the to doing we for about be business, much of resolution the to to said, would wind expect be do visit now, are not business. as quo continue results. and at we've favorable good in we've we Allison, but able will at already business with that today. alignments long-term for thing least But the litigation, we producing share Highway Trinity. not status the Yeah. was to plans, yet a were got everybody much business more pleased to running the a for teams say Tim tell of the what beyond is good and plan line

All right. Thank you.

can take from next Rao with we Prashant our And question Citigroup.

Your line is now open.

historically. than of about Rail Good higher the the Group XX% manufacturing morning. to it wanted fleet. leased Thanks It's going taking I that's for question. ask the has to been

Just helpful? the types Any that are end-markets get for leasing, wanted are be color that what around driving would of a any that demand to cars? sense particular of

Eric?

Eric. is This Prashant. Hey,

going products. mix leased And of the driving lease of traditional that they're general transaction. drive leasing, the the some are But are also, more and markets some are specialty covered railcars. We service terms covered customers ones. side, of A that then heavy, don't individual hopper products. to hoppers the really tank terms purchase whether or lease it's In of hoppers of our in generally, covered also influence in the on leased lot markets generally the all car each

RIV platform, And, sold we we really or fortunate lot provide a to fleet are fortunate Prashant, the with as partners. able lease. said, our but is And more be we're cars the a customer-driven, that of it's lease Eric sale what those will RIV we're to direct into put even that a

those, So, it they to the XXs nice to institutional proceeds cyclical end been meet investors. really our some whether tends We've inventory But up (XX:XX) timing. being before. It degree. demands get in gives – be from the us to the we of

that the in the said, last been XXs right We've in based Eric very of kind products you prior are astutely order and before As the we've now. XXs book in year. on been which years ask really the

slightly be but any that faster moving read the maybe there hard to some get may to the Okay. helpful. one, wanted And it's sort to the acceleration know are were there Thanks. really on other up along expenses of weird I little of a if ballpark, be that That's a then, guidance, initially great? but very be or they're be the expected sense to past might as maybe what I question stepped just excluded guidance. driving sign to would go color are as squishy into in of you to there spin-off versus a transaction previous the costs targets, than you're was that you – a these

Prashant. Yeah, James. is This

We anticipating quarter are a still fourth transaction.

needed, expenses operate through the it the companies visibility to we into attribute with up everything in things to wouldn't months, to the from are that. to got couple do things, what some advisers. HR type I set IT our more Really, as last both type gone we've So, we've even need process, independently to working

little So, I sense any thought up corporate to but we was the particular a that moving. wouldn't are how of point to appropriate to item, one bit it you a give expenses guidance move

you much. over. Thank very Great. it turn I'll

you, Thank Prashant.

with will take Majors question Susquehanna. Bascome our we And from next

is Your open. line

your some stock XXX-ish-million convert own guys, you, with million guys. the to this Thanks my is retirement. and via Yeah. for the repurchase in quarter the capital buyback taking $XX common question, to effective encouraging It work see put

you retirement assume the that in $XXX or that guidance accretion confirm million laid from any and you update I doesn't EPS the includes So, count that all convert? at not Can against convert out that December. guys whether plan

This picking cash count Bascome. we up Thanks the do for use that to program do be were share James. as you and plan we against the convert our Yeah, call able technically pleased Yeah, the that. on to and capital repurchase pointed in to repurchase first not It on doing. out. that and is to quarter the pleased does financing share

point, your it to remove does However, dilution.

So, as it has the same a making repurchase. impact share

determination. the was to that So, gave early make not guidance to that going we too be in previously, assume yet we convert It did the called. was

had we that So, would still shares from dilution those have counted.

mentioned I we year. now million it's in is first X.X this earlier As now, provided that about That our guidance out.

dilution range the low moving that is top-end really the and to the removed. related in at being So, the biggest of change $X.XX up guidance now

an through think that. into repurchases should you to, of the we not when and or capital know rata I next? year a I'm it value to like price stock pro color cadence and assessment about deploy provide And not as you way at this, look any you've you're the And said of asking the board kind going Okay. opportunistic on at looks and move appreciate to the I is

each from to quarters It's need things. board our quarter going we have and lot down Yeah, Bascome. of again. a deploy capital the have of there. even We conversations road. James the myriad insight think to capital, we we're but a other to the between Hard Everything opportunities it's of certainly give course, with

things. any a of one really to lot point as I wouldn't provide the what in are nor particular guidance beyond there's the first quarter. So, to plans

as changes. ask But strategies one. for a enough. transactions XX,XXX-foot a they Tim, step Fair very maybe I'll look for optimal everything post will where back very if lot businesses the parts of an the to spin? planned, were How level going are and more now capital end mean, a what between you one a lot and there's fast does moving between look I today, outcome year and the from on, and April view? different the forward we take goes just and XXXX like the And high just to the Trinity

a we will you portfolio as benefits this you our goes, is our could the that the of part the far focus. able in of the into opportunities on a as value so the look Trinity out railcars ecosphere, then footprint the leased have Trinity. responding. get have of within of into as that opportunities where as chain infrastructure, and of the have be speak, Tim then, see we we can future, in one be meaning, move manufacturing now the well business and see to focus smaller to What main that areas that well ecosphere. our grow and largest When is rail of will concentration which we're Well, to And portfolio offer rail is to Antonio the portfolio going is services concentration expand as that that as of within that rail we businesses

very about that being in both can a boards the we're particular opportunities businesses. reviews in great those So, and strategic with position companies discussions of have excited

that be in primarily because have more let's want and about is vision area, whereas what And as sure the and that you we're very drive not that where second put the quarter, our that will in going more members the markets. let's long-term resources included pursue for within intriguing If towards the companies some board process. definitely to are see particular to to be really keep we adding acquisition area, we're emerge in resources we're right conversations that the usual, on the we the opportunities first the visions starting business so, of now see XXXX, of quarter trying in the are the probably and companies, opportunities areas, focused those then some then companies that the get we will that's in focused we to but board particular we're we on something members

capital, James. add capital alluded allows a we structures then our earlier, leverage would And, the that that I focus both Bascome, share what to for at well those mentioned also bit this need of Tim to leverage its to ratios look and as chair like, flows kind look that where to clarity things. ratios from repurchase, to can focus support whether really this us so those the my the invest appropriately point acquisitions, of you your is are and cash companies, leased railcars, little

in quarters. forward more providing on look and coming visions really executing on that clarity the we to the So

I just detailed that from And of appreciate both response you guys.

as out in are timeframe of sort out ahead timeline of far the lay event some detail? As spin kind an outcome to really planning that or Day in Is of XQ. XX that you said other sort and Form Investor goes, be or more will May June a the of you the strategy

It's James. say looking details we're at quarter. second on that. Bascome. Yeah, I'd more – don't have We much still

communities. investors, of see certainly out we terms to get and In plan our investment

In where what terms to for watch is, in of follow and months. that format is details coming the the

time. the for you Thank

question Elkott take from will with Cowen Research. next Matt we our And

open. now is line Your

Rail Good Group margin want back morning. I to to go the question.

environment. for So, the demand to seems you year be your accelerating an despite what guidance maintained guys delivery

guidance decent guidance to earlier maybe ramp the you I operating amount to materially mentioned beyond up assume the leverage. in it's extent Can this And, railcars a us there's that of resources? can how build upside leverage? without reasonable operating XXXX. this understand more of Meaning, So, you you Eric, to current having help guess many

Matt. Yeah,

our we on have a So, don't business. sign sold-out

to So, customer customer up demand whenever is. meet we demand that ramp can

mentioned, amount – is bit our I markets past. business When what changeovers going moved That lead to have a changed. year the material is have As for are this I the in to steel we provide talk times changeovers big of less governor have on we as little of one efficiencies, operational and we puts we've mix about a of had domestic order had ability things in the years than our do.

and will of the that our a And on lowering products margins. we're focused So, have on direct positive both then, we cost produce. impact indirect

we've things. on teams So, all focused those of got

X,XXX That's internal cars for have the your instance, produce, to of at this Is more in guidance, impact of rule the there gauge, maybe than you, would an very cycle? margin If any helpful. way what kind be? on current point the thumb

this That's Matt, There's James. that rule is not of thumb. simple. quite Yeah. a just

type of changeovers, it runs, we Eric of on are products what they, mentioned, things. As kind of it is are depends current production extensions making those

you things each we have team do a we rail certainly when as rule equals levers that plan take of But wouldn't we thumb X of a into and a each very frequently. on lot that So, internally order at give look that I Y. work we production

Got it.

layer said, layer the we've base railcars try tremendous accommodate the out Tim. is being when they And to as And the or our of aggressive top of that that we with really have out sold company, and existing loads got area. efficiencies We do can we Eric ever. They at them. like ones. within are in to when we drive and of team Paul on tack in really, that and on area. And there, of is on layering go competencies and do people our when We flexibility as and This them Eric running production pursue comes. manufacturing to top top whole a able being at demand orders fairly those on our more don't job really ourselves look our good

sense. worse favorable in does in cycle. during down guess have things it's they I part Rail That of now and make the market current of the looking how I turned the a concern back much, less than cycles this the was but cycle, has can given Group past at over year, much margins get historically past way the in a

the this point current confident that this in I think floor guys which this XXXX, in lowest be are assume pretty the current cycle was at registered was I may you've X.X%. in XQ that you down-cycle? this would

your is what's hard the to us of is in on operating in backwards. we backlogs. an years, look planning. get you then it's as you good backlogs production you're enter down-cycle quarters, as And when orders Well, been continue peg we hone can But really last the environment, and for our until where a with have even couple down-cycle very to couple last in that as you

going, a quite said, quarters They but we keep does the good a great few Eric's margins and team of those are won't lines do Paul to orders. next job Tim project of precisely yet. As that job production securing those going where the team that. go

Got much. it. very Thank you

Thank you, Matt.

Long we take from And next our with Justin will question Stephens.

Your line is now open.

Thank you good morning. and

Good morning, Justin.

morning. Good

would material in on maybe mind, it's earlier allocation, the now spin a unlikely of spin about beyond capital authorization until wanted lot just of underway. a be capital in get there's So, capital towards With the question dovetail that buyback thoughts going current say it I company completed? your to an to forward. see we is right a the to allocation the a that the around on timing or deployed acquisition amount clearly reasonable with going

This is Tim.

reasonable I think to assume. that's

on with convert We capital deployed there have this going resources program being and there. major being a and deployed

looking and in out always You opportunities business secondary layer then for can can our handle market various we lot. a but that the on, to We're always railcars that Form XX whole businesses. add for we're looking we

you time of be Group. be a at lot be here company to that pre-season It's fabulous at that aggressive that ideas. And and opportunities of will going next two Antonio's them. of comes of his probably able in he new start he's to kind Rail able to talk with a as together the of dollar for where frees joining our looking group, future acquisitions spend area and And you'll to with see And And networking be real are building really one then, strategic high board some not up up relationships months to a see his can of that blocks expertise businesses. building hand long going news the fresh there he's is don't got amount, I is the he'll and in identifying that some me a think the but us on he's to the time the to three and spin. pursuing lot and business. with able four good work have so, to He's the to business.

got we've a shareholders the our look So, stakeholders think and on I horizon that forward lot to. of positive things can

you James, help And, comment. my railcar more question, getting in some mentioned Tim. color results. around wondering put XXXX Thanks, to I going that pricing helpful. could you I was second today think is not reflected new if That's

outlook you applied even relative pricing in on ballpark If just railcar for like any XXXX, X% to today expected Group to directionally. deliveries new the what Rail margins your would look

is and quotes give be us business and saying me we kicking is a today are backlog a do that those time there's that we're are And Let you inquiry here. we're that levels sure asking and represent in markets that something backlog embedded at orders for to Rail seeing like which that needs customers I those. significant the been happens as coming in the is uptick orders what products seeing in fide and have as them clarify our are when bona tires well sold. What in have you that sales have were

this of not Now, pricing a in days was that market in the out received doesn't and for means leasing people ago. apparent XX that It or there ago with orders purchasing it. strong there's mean market XX enthusiasm railcars just the real or lot we've considering even that in days

range surfaced, as wide of it's so, that it on products a just Eric, And something has diverse surfaced, but well.

That's correct. That's correct.

as calculus quarters. a to one weaker weaker there's few in of to orders in what involved producing for of we taking we are margins this starting several said, do some we comment twofold. James, your over you took year Eric part the orders of really was that orders said, year, conditions. this in the Justin, other we're pricing, couple is question, And quarters my we is remind that reflective really that up. pick is Hey, this as the orders over to what the take, took It conditions clearly last and of year majority last And the this but Tim And years lot in was are we're seeing do. will pricing of

and compared that how it yet. beyond in to some put of yet But that XXXX. XXXX margin You wouldn't X% in a we may look number more that get XXXX, but on would that's

Okay. the appreciate today. Fair I enough. That's time helpful.

you. Thank

from take will Baudendistel we our next Mike And with question Stifel.

open. is line Your

lease transaction Day Thank fleet the will or may to wanted of with be would you. but the you've Yeah, or envision just some the this mean increasing in on before similar in and you the sort have transaction? your you, earlier questions, leverage of may Investor talked hypothetical I about that bit a the little after of ask transaction conjunction doing you past the that to not

Yeah. This is James.

some see of that. going You're to

As the what the level on cash, of also which we plan out some but to some implies at we convert. our mentioned, non-recourse you're using financings asking take

achieve with you as next will we're we from leverage see being with out. to details handle on look we our we pursue years that, and structuring clearly to do Tim about details and that do we're importantly, little get that the like, bigger what what it's more do company on you'll over the So, our sheet we leverage a that company where early do growth terms length go there. by most few probably talked more concentration rail capital taking the the the opportunities certainly, that anticipate leasing, what needs at invest But still can and next a focused forming earlier. of naturally would like, can Otherwise, as call we balance plans that for but what as we're that focused in that that of to that and, up looks capital

a pretty barge sense. really in the sustainable one just of results Kirby's more that uptick improvement mean, a do feel mean two-quarter like think you wanted I you makes that's orders I on and there do area, That were or or I to area nice you you And Great. ask that some then, saw has good. saw blip?

Scott?

Yeah. This Scott. is take I'll that Thanks, one. Michael.

potential a that think challenging, be overall spots. market continues the answer I but to the few bright So, is there are

So, went on said, the liquid you utilization Kirby's side, like up.

more is But oversupply the situation side. seeing in a feel and see on few industry recovery. to improved few the broad more the sustained again, quarters side I before and months think want they And an a spectrum customers utilization inquiries it's across our the we're overall I like for a liquid still we dry on of say think increased commodities. really liquid the

in but us, for there. challenging still bright a few are there it's again, So, spots

it. That's Got you. I all had. Thank

you. Thank

take will with Global from Milby next we Seaport And our question Willard Securities.

Your open. line is

of everybody. Group. Hey. wanted cars off Is added the than kind those touch what's margin refresh Can additional Good that cost from Obviously, dynamics leased, you few in the margin additional about reflective these that on outlook of a lower points having marketing expenses customers? or prior cars I talk to maybe the morning, the Leasing for years? to lease, past. of maybe in you've those coming years new get and step-down kind to to of you're

that. Willard, this is I'll Eric. take

back put placed we if of we a service. into when that costs there service, are generally, have lot So, cars back incur we cars in

still lease remarks, the rates. has below our rates are on as impact And that prepared an expiring mentioned So, in margins. I

also an to in the that flows So, business. have to will have on impact impact. straight going That's bottom leasing an That margin the line. our

at think be you're these shorter what remainder utilization, in on kind how a you you guess cars would mean, of throughout is this quickly leased I And can think a you the utilization of do looking I near-term do accelerate obviously can the or upper-XXs, – but up? think optimal of – cars? you these new the timeframe get XXXX the Is

whether delivered. the offers. near seen think the term, to up or railcars. it's need sign to on remains that's terms customers Ultimately, when We quarter actually this I make the those do have to year inquiries in be get actually decisions this on of they in the

All right. much time. Thanks the very for

Thanks.

from take Buckingham will next we with Matt our Research Brooklier question And Group.

open. now is line Your

and morning. Thanks good Hey.

question. division lease another So,

but in some end-market? talk know You to some customer, the mentioned or termination, to won't were bankruptcy. to back cars cars early in early you termination had the the car how then, or coming had you're much you And talk talk able if the I it – customer quarter? type utilization how Can that impacted you the with many included a

last utilization, we want is along on won't It detail of the want that to provide get lot to James. put don't lease. that really it but bit cars we on get that the have don't We them. didn't leads an it we Eric's This we is give working cars bought to that to on or in But those put leases of answer the quarter just go not that certainly on back through of through that. a impact, for, lease, as kind as was work at demand a situation across Yeah. This with those type there we'll we a any customer, back really but there. this pretty detail. that epidemic year, the other We're the an into have issue special is for Also of was time. drag some a a customers both commodity

bit of us, maybe starting move talk talked some to front business the And spots in up, end-markets, of pick little a the It's bright about to But as earlier industry helpful. railcar are on the could talk us. track, bright railcar side from bit within the weaker to things. starting to a some Tim, in we to maybe you on obviously, maybe That's we easier then a call, of the more little away healthier to have demand But talk then, the become positive Okay. side? you non-railcar bit for little what data given spots, and periods.

some you're mentioned, in portion see tank, the of Barge businesses maybe improvement other I your to demand. was Inland where business starting of the think, non-railcar but

think in it's for the sending as that look I'm as that pretty types... requests about us to an over. are say extensively across And inquiry and spreads at levels, that car that early talking rail And talked thing sign. just inquiry higher then, It's Eric, we I business. it's I significantly, one our all well Okay. we when monitor car about is we types it's And distributed. that I levels and quotes. look customers And, fairly distributed the

That's That's correct. correct.

particular that area. ...in

watch So, that we an indicator that's closely.

And there. so, happening things have various you

the movements Canadian that are happening. got You've crude

that products their to down of lot are a got transferring You've needs. feed refined Mexico to

sand that involved You've with this. got is

being You've got the are that products, plastic supported plastic in pellets those.

that activity got moved. has automotive You

– railcars had in we've transport even we food. interest – had got some refrigerated that You've

out there got in You've is that as moving intermodal demand. well

been cars products. it's box So, really transport various to

there. lumber been those in that's on interest that cars centerbeam You've got are moving out

it gives for a so you players our railcar inquiries of to So, what speak, it's is request and been of the for lot work industry board room that lot kind our us goosebumps, interest So, having across would of to the and we get in that's puts quotes when quotes, people the the in from back see excitement there going planning air saying, then these you've these out, we to which like, where things? production and of sitting on. got is people a an build okay, around significant

I as signs, about you the were in talking Scott, think early liquid barge some seeing that. the area you're of showing

aggregates some has of have the Our products things utility on, business, need those the then structures going same our business also in a business. for they shoring areas in and

business. So, the early well stages businesses as as hitting it's infrastructure railcar the at

detail. time. the helpful Okay. Appreciate Very

Thank you.

KeyBanc Markets. with question our we take from next And Steve will Barger Capital

now open. is line Your

getting and seeing for with at operating just here, at you Thanks and Hey. what more revenue telling follow cash this margin them share cyclical up inflection message level, or on me last teams? Are Tim, high maybe is to operating barge focus a is to the of point? in. it on kind rail that the to and market and flow

They and that then, our people a they're lot all and on as scheduling that to start our what talking of that the have processing how best and to group the can. don't that trying is production to in getting trying understand running they're would first our There's businesses. they pro Well, formas they thing they customers, are there the are out are type have about and these they're they we are of team. have with it. seasoned operating the that message needs a they're capacity is doing accommodate a activities send do businesses seasoned to going really very areas they make quotes, very But of this we

listening doesn't it say, know what and things. okay, and how and get They area to know them them about me a to these in talk focus on to after pleasure so, it's just these business anyone let's opportunities. to or together their And take do they of this go type

an they on but That's great margin... operating incentivized color, they must have Are right? plan,

got they target They've an And our aggressive has Their it. all income, fairly of operating they're of aware very and compensation this and Absolutely. Absolutely. raised plan incentive operating incentivized. profit that whole got dramatically a for year. generation board the

And is so, on of that how we operating production production on generate existing layering leverage. top

you pricing, all they're So, after going push it. And pricing. can't

You the in have to competitive be market.

on area. in very pros the – people products that layer again, and in of and these have which they're but to professional particular product that bring are target can you existing this particular top running, You are

Got it.

the you you're manufacturing your how when this lease you an guidance cash James, expected company about the have in and And, Thanks. fleet for additions sales, seeing that's Okay. do year? plan in think range free flow

certainly It disclose don't moves around. We that.

around. take capital, parts net talked production this million. you of year. up about, gave investment our as kind the And some, has, that lease of relatively moving a consistent we bounces overall It's working moving but we you If the $XXX of lot

we do to lot a post going there's of to free know terms do. financing well parts moving the that's going think consider So, associated leasing financing about our area, we the I flow our but we're in think of you investment I cash with and kind it, really in aggregate, of of talk still cash part about but as as flow that, that in well. because it we're

So, provide quarters, through a not those as forecast but we kind in of go the basis. we'll

Okay. Thanks.

Thanks, Steve.

for does program Ms. I'd additional Peck This to back you. session. to complete the over now turn like remarks. the Gail any Thank Q&A

X. replay to X A today's our next will through Time the be joining this our Also, call. you for replay Thank access call XXX-XXX-XXXX. Standard you, forward Aaron. after is available you of located o'clock The today's conference with That us look midnight Eastern concludes conference call. May will We on on be website Thank morning. on at www.trin.net. visiting available again number

This Thank participation. today's you for does program. your conclude

any at disconnect You may time.