Trinity Industries (TRN) 28 Apr 222022 Q1 Earnings call transcript

00:04 Good morning, everyone, and welcome to the Trinity Industries' First Quarter Results Conference Call. All participants are currently in a listen-only mode. [Operator Instructions] After today’s presentation there will be an opportunity to ask questions. [Operator Instructions]. Please also note, today’s event is being recorded. XXXX started, forward-looking remind the of statements Litigation Act get conference that Private future we estimates, Reform contains statements, call as of financial Before performance. let and you me today's Securities expectations, XX:XX intentions includes predictions and defined by Statements not are historical forward-looking. that are facts XX-K Participants of and issues the Form SEC for and are directed to a filings business risks. other Trinity's description certain of in materially the cause could statements. A change from results outcomes those to of expressed in actual differ forward-looking or which any XX:XX of At like I'd to hand Leigh Anne the to this time, call Mann, Investor over Vice President Relations. Ma'am, go please ahead.

Thank the everyone. company's morning, We conference operator. XXXX for quarter us results financial joining XX:XX first you, call. appreciate Good you

Officer Financial Our the Eric prepared remarks include Officer. from will Executive President; company's and Marchetto, comments Chief Jean Chief and Trinity's Savage,

certain website. my over midnight turn page hold points call with will XXX-XXXX X, available non-GAAP are Jean. on Presentations call During A XX:XX slides website, supplemental XX:XX May metrics call (XXX) today's We prepared the the Relations the be will Q&A website discussion and after quarter reconciliations following be be of will webcast link. to and the number Time Presentations replay the under an of www.trin.net. our of as on Investor financial of highlighting a on the accessible remarks earnings now replay will the replay the of available These under through leaders. pleasure from first as is of a.m. It XX:XX along the today, XXXXXXX. access conference call code XXXX. non-GAAP to in A also metrics reference Investor event our Events with is at our XX:XX The Eastern key metrics. found we The provided the GAAP session which are the slides slides, Events of can appendix portion comparable to Relations well

morning, everyone. Good Anne. Leigh you, Thank XX:XX

results Before the both update want report comments and to point report that with priority website. strategy I that interim consumption we human CSR are CSR get on formal report on employee proud out summary first annual and rights, our three. health a diversity, on XXXX focus our our a especially provides our our driving available started safety, forward which of our ESG and slide assessment, today, materiality I'll and inclusion, gas XX:XX greenhouse reduction are my start of equity energy emissions. of I'm

nice person have again seen first As of was and concerns back be pandemic it in some we industry participate in restrictions quarter. to the events easing, and the in

strengthening We discussed as on continue to call. our see last we market tailwinds,

certain and rates favorable to was ripple Our in appear railcars in be the XX:XX start the margins U.S., the Also, driven that strong optimism demand. the times. to inflation, we'll I in Ukraine. some challenges the book-to-bill by headwinds we in sold strong, new address conversions backlog two expect While have increasing of extremely about persist manufacturing quarter in will to were railcar and we the I conditions and progresses. to supply chains in delivering in rising rail rates with utilization markets increased effects quarter, second However, leasing continue is first of over year as more saw and improve as well. fleet our market the this XX:XX including of year. interest we the half headwinds of persistent developing, Particularly the want war labor the stress

levels to back at lease X.X% future improve And to improve is fleet rate now our positive quarters. been has pre-pandemic will Our XX.X%. for and continues difference to three utilization and

suggest. our half growth XX:XX downward since of XXXX. EPS face shippers forward-looking to Through guidance support a four are This for maintaining in function issues first long metrics the our in to in our in to a me and Now commercial strong quarter, move number indicate and train the to update slide demand rail optimism of improve fact to railcar continue about year-to-date and market that challenges they for storage the turn will and with second quarter, overview. transportation decline. The American working mind. difficulty from decline and serving been is is summer second later speeds. to a this North about XX:XX scrapping most the we we and evident increased Although of a traffic with and measures the The demand. freight we We demand more for rail open of greater believe have the expect but very has with are Their saw that carload good continued scale product, struggles traffic weekly freight disconnect that improvement rail down transportation had volumes that railcars retaining industry railroads the demand. increase although has which their struggles trend than rail to continues efficiency This year-over-year, XX:XX Railroads freight term. is is slower between these rail in demand. steady in are hiring true demand, is great, storage labor disconnect Improved resolve would the efficiency created rail XXXX, measures year. been

drive the to renewing deliveries on and consecutive was both fleet TrinityRail as railcar are quarter, first third but our Also, internal up demand, absenteeism, to revenue fleet upgraded received To of replacement quarter, in delivered are quarter Group and to we order pandemic-related program. Products XX:XX is orders being mentioned deliveries And food X.X% freight first quarter, and As XX.X% chain. impacted these deliveries full in the the would returns into disruptions, well giving or taking improved be XXXX. have XX:XX for quarter, continues tailwind as inventory supply our serve orders the sustainable boxcars railcar in momentum more and for Rail or are to they're placed Remember, railcars converted XXXX our close markets. by by Deliveries underutilized demand to ago, year-over-year Railcar service. now paper I by book we railcars, we our easing X,XXX a utilization the did scrapped, as led the momentum railcars. for the date, we and lease capital. market us invested also the saw chain some In still on-time in our see was conversion we lease be to steadily This for better X,XXX railcars. demand but handling through and on moment changing quarter our are FLRD predominantly converted as that market demand railcars X,XXX due orders aided The positive improved As cars. otherwise into higher better well. supply rates. instead our in meet

from with few will to just slide I'd daily Turning detail another basically doubling where go into sign on market production tangible demand. very railcar we expect metrics. our year. five. XX:XX end the We to note a like XXXX financial Again, but Eric more to started of strong highlights,

is revenue external deliveries XXXX up XXXX strong by Our the $XXX QX QX in quarter. XX% the from of million driven

the Products includes and benefited another EPS was that GAAP segment. Cartersville $X.XX, insurance from Rail Our tornado the gain

but free operations our $XX impacted from manufacturing surcharges, the chain capital disruption, continuing million XX:XX believe prepared we're costs quarter, business well was freight handle that We input both and and flow Excluding not headwinds growth adjusted ongoing of our increases, by chain million, in cash and to from EPS operations $X.XX. $XX was due Our to gain, these effects. was continuing working volume supply high cash is immune their inefficiencies. current to flow supply

We these our in especially challenges, capital are and growth. apparent managing is this working

revenues of flat chain renewal. to year include on slightly These slide and discussion dampen reliability. and the fleet of have of remained inventory rates segments. has the and up quarter-over-quarter down are the In as pretty slightly effect on our our intentionally our lease Our supply of six overall moving mix XX:XX mitigation due up fleet timing to decreased the business, the efforts leasing business is are average a to building Now while on utilization slightly. improving, size fleet over the the last our

about lease our is As years. term a average reminder, remaining three

and the activities. factors. We few -- these Our results. to takes XX:XX margins increase time flow the of to see renewal an Leasing positive, are segment maintenance in were cost renewals the a while due volume So it saw challenged operating through rates in quarter this and

the as Additionally, conversion railcars depreciation have conversion sustainable are for requires railcar candidates on we best railcars. stated accelerated younger donor are railcars. that before, The the

operating So depreciation accelerated the can margins in near of impact meaningfully the term. reduce the

down sequentially growth fleet. deliveries, However, future revenue more benefit to we this to timing profitability and the Rail and was improving Quarterly reflects a is worthwhile believe fundamentals substantial to the but drive railcars as Products. year-over-year. still the program XX:XX Moving continue to of due investment

strong, quarter X.X%, includes forward, Looking from insurance perspective. the segment proceeds in our were the a both the was and tornado. margin from margin Cartersville first revenue of and taken gain Operating our million but from reflected orders in $X.X the growth

adjusted gain. We a been the EPS. remain Products reference, gain margins Products excluding this XX:XX X.X% a Rail But in have as Operating removed when Rail of margin this calculating challenged. have point negative would Group

see also step orders by line margins contracts, the our on fixed the to the change the high much and segment. steel railcars start half orders XX:XX been were The cycle, reflect those And ordered the in will at raw production margins impacted back inflation, the in we delivering when prices. first in we XXXX half negatively cost the February, mentioned that were segment have I stronger to which are meaningful some to addition In call orders we delivering and impacted of due a our higher As today to of a bottom taking year the price changeovers. in input are deliver, in of material the of level be in expect we pricing. including

very maintenance Additionally, absenteeism the high the in Omicron to inefficiencies. January struggled operating to due quarter, leading to in due services our wave business largely

XX:XX a our other talked in States. hiring quickly about retention, many disruption in Omicron companies in so difficulties mentioned, have specifically the meaningful previously have As business and but QX, United to was subsided. We

changes in are compensation benefits our competitive and to We making to marketplace. the stay

Moving wanted to highlight our a While see to seven. XX:XX I slide improvements improvement. few early, initiatives. strategic we to are on starting

to XX% target of of XX%. Our our the XX.X% within LTV is quarter range in

we pretax year. on mid-teen financial reach to more the in the into to guidance the plan I presented goal. XXXX, including the Day our We are think three-year turn well positioned in detail goals And two now are we year at rest go a the the of results ROE Eric for you laid to I'll then, out Investor XX:XX of we to call our and over

talking before Jean, the a few about out you, Thank I XX:XX everyone. and to are There wanted morning, good quarter's results. things point

revenues, securitization assets, close will by the our asset-backed revenue. priced million to The and backed we've continue of expected change balance FLRD is pool have with manage. the you leasing as and will indicator is management majority $XXX railcars it is ongoing critical on of own this discrete announced, XX:XX the view to XXXX, First, This As TLC financing railcar aggregate transacted adjusted that our quarters, periods, to were or prior in way previously We lease slide implied financing renewed sheet correlate in tomorrow. as differential, we a we serve actual The debt is in investor and interest for next a But of at the future they At come we This our of will current environment as last for type. better in trend metric the we the the metric same, very direction interest are more securitization lease program. as availability. on that warehouse for in leases freeing expiring facility, FLRD. of the over different debt collateral clear good railcar account X.XX%, the year. than calculates that change this line XX:XX XX:XX have of our we from refined to are rate is four introduced the the rate we this up future with will to railcar an pleased data it four. each revenue for a rate a the goal assuming see

our our year-over-year operations XX:XX The and sequentially deliveries. flat million for adjusting quarter slide driven As we starting Our Now quarter were the financial income financing needs. increased Rail turn the Total from with please adjusted we to move But quarter by with for significantly up will $XXX from the XX:XX XXXX. of the mentioned, first $X.XX. revenues statements, our statement. increase structures was was forward, EPS Cartersville GAAP previously evaluate in $X.XX. EPS first relatively the from most Product attractive gain eight is continuing highlights capital

our flow of million. Moving statement. free In and $XX million, the portfolio and portfolio we about the later property. our in part flow that file business the legal gain and related in business, quarter in can a transaction quarter, Railcar came portfolio the sale today. recorded also $X which will from cash that Cash million normal a dividends Products talk XX:XX XXXX. -- of $XX investments of see costs gain to of $XX continuing to the we We sales, on sales discontinued was the see our from operations period them to XX-Q a fourth incurred quarter you briefly operations, cash of railcar that flow also was you'll a and from million benefited I Highway periodically. expect results are we the to after sold wanted and in and additional nonoperating

cash Our continued in in quarter was capital the requirements negatively working chain supply flow impacted issues. increases by and

conditions expect we operating flow As to significantly. quarter. normalize, in We dividends the $XX in paid improve million cash see

As complete, until by accelerated we program shares we third quarter. the the repurchase additional which is a are expect back any to buy reminder, unable share

and repurchase optimizing of of and million slide expires of XX:XX has current nine. remain in Our XX. have our liquidity sheet, year. remaining, share diligent balance authorization the to million $XX March Moving at $XXX We the as end

and on guidance our the impact rate the of on from our interest results, profile rising previous rates fixed schedule call, can debt benefited our to the of slide XX:XX that market, Having current XX% reported we relative you I'd the last have expense at believe help maturity we see to As approximately resulting will dampen attractive XX. from current our debt from summarized environment. financings. we lower are reinforce gave like our

quarter our We are are leaving first with line unchanged expectations. as results our guidance in

year. in As Jean second the XXXX the of mentioned, our half forecast significantly is weighted

railcar year, the deliveries of industry of secondary worth are all not It's inquiry virtually and For discipline which to XX,XXX full noting, meaningful this net do see these numbers once and order conversions XX,XXX between again, year, industry into take to suggest backlog. the be railcars. Recent deliveries we we on account. in depending delivery million railcar investment in activity anticipating also the are Embedded fleet the this the in year. anticipating Our remains, long-term are commitment in to be $XXX investment fleet time and of are we deliveries. $XXX purchases, million number to the market XX:XX

targets, in As secondary investment with very we leases we three-year think market. fleet new for our balancing of are a about period our a demand railcar fleet investment active increased

long-term will We value. to shareholder capital allocate generate to continue

any from expect year, excluding efficiency to the of expect XX:XX share quarter. $X.XX to the be million this We manufacturing gains full onetime diluted safety, which of finally, continuing operations general $XX $XX and for related primarily expenditures million, to items will investments in Cartersville and capital automation. $X.XX earnings we per like And adjusted

expect into As the Jean be half enable year we mentioned, have the year, last that and place the have months, growth business significantly to of we higher on XX:XX our the headwinds and new production booked in overcome we rate to of we substantial will that through in confident will few current railcar from based we we in second see the our evident us the orders in increase visibility the our business. are revenues. initiatives to the As move in

margins mid expect in we Day. our to at Investor Rail goal the year high hitting with to We the Products, single-digit introduced exit

higher maintenance We driving trends costs in XX:XX rise the of margins segment the group. driving in prices in seeing interest and lease revenue this rates of due up railcars. leasing in We increased existing up normalization in utilizing with are expect similar railcars new to

forward achieve closing, company's equity. we demand, rates the near-term as cost to progress the ready confidence a you. are higher our return allows We sharing and the have our And us older now, to that greater our our look and has thus for return to XX:XX Given raise in have XX:XX this on guidance operator, railcars long-term we on our goals. first In improve question. to able year, as ability lower were with visibility, for well basis, these Trinity

Ladies we first this Our Majors XX:XX Instructions] begin [Operator and session. question question-and-answer time comes at will gentlemen, from Bascome Susquehanna. the today from

of gosh, XX:XX your November Hi, the quite I now, you lot maybe could have you some some rate thanks for changes they and of be plan shifted go I sustained talk fleet? if since through high feel your them of morning. I we debt hoping the I But affect leasing how know mean, of interest was of out And maybe about back. more about all? those but changes for And have it know higher things factors on Starting taking rates, there. questions. to your I what positive strategy go environment business, mix changed XX% have a the it you alluded good my with wanted of how others to that a your XXXX. funding business. at may fixed just level three-year being and

we good years. that's new where clearly, in where access Yes, debt acquiring really ABS XX:XX And remarks very the pleased comment rate mainly And this interest the with you're rate Most environment has railcars, profile. rates on But a you of make them is assets if railcar last where about And higher, the new comes gets And will -- that XX:XX tomorrow higher really when acquiring acquiring in back whether just in higher. have factors the the into mix as rates higher. I years. -- financing an seeing is funding I secondary are rate. way we're And interest And is maturities interest of on rate another periods -- our in going result our we increase should of go fixed we that allow that we're our have. the Sure. to have impact That's those the interest interest with environment It impact. of is going balance, very debt on elevated today. of Bascome, an decisions which mentioned, -- leases. But We prepared of notice rates and our nice the next rates market. are more question. you're debt railcars leasing lease hurdle closing it's of fleet just the very investment cost is market. make once you're profile, they or the industry little in did Eric. of And maturity investors FLRD That's were from over fleet. existing balance the one when in couple have which lease into you the we from we're to in rates that have that expect more do the we play. higher couple

but it -- think change harm. it fleet, is with a a the existing I benefit a overall So is than of more

XX:XX All right.

on hurts inflation short of on your so much it have four since you you think more revenue than that the So or in last helps three you years, funding? fixed you term, portfolio

I XX:XX do.

to we do the remaining have -- which average. going term, three-year fleet You're if reprice a on lease over we

the amount a piece. reprice of fixed fleet that of significant period to going during we're So debt

think overall, timing, into but So it go it's does a And I -- mean benefit. I get ahead.

ahead. go No, I’m XX:XX sorry.

long-term XX:XX These assets. are

you refinance it, is, refinance are leasing debt finance down every are and assets, you it you business events. pay And the then liquidity and those XX, part you And it. year so, and of these XX time

expect And higher just of fleet. would time. in speaks still cash to generation rates, cash flow it over amounts periods it even the with interest lease of so, from the significant we'll And generate I flow

annual November of angle. dramatically I'm think how what how monetizing planned balance with And this you steel in guide lease million in ask in little little high new the future have $XXX lease more line math had I surprised a in between environment XX:XX net the or what, one environment for bit million, than is versus couple underwrote of of similar three car that the asset can of roughly -- prices the assuming years more certainly, you fleet? Can that been inflationary in years a has I'll on assets of a new that over in investing I planned your kind XXXX. and about $XXX talk you changed a costs investment a versus price change in And period. plan you I'm very fleet then ago? mean,

you're Another XX:XX insightful all the on right really question, and fronts.

But manufacturing Q backlog that both capital not million fleet things that million, at just you and grown. as at additions. period. fleet the the is -- market lease you it's -- investment changed. has -- we in It allocation But when $XXX That three-year any So demand sales. as of additions have lease more changed. for changed fleet number secondary is cited talked of things more we net investment And and of period. mind, includes look We're committed for includes we've that net out have well, And that railcar about keep there's that framework, -- XX:XX do. today, fleet demand both our our lease has product there's to a thing for secondary investment that our one includes in we also modest sites $XXX demand still net to activity that our modest when looking new put so currently. which then And over market more out railcars for over

what think opportunity net is comes an has investment. in XX:XX timing. create platform those value to all with our to inputs down it fleet of I Our

leases. or All through more gets secondary our the our demand more seeing market. rail seeing platform that sales, We're the the opportunities We it's for seen in timing. market. whether products demand lease for secondary RIV We're in it's have whether also through through

you have until cannot You content. the transact

When of at That's inputs what it and have any changed look there's there a year, little we're think But see has answer, a over three it to years, and stop but a lumpy. to long it nothing really you can and if and when get you puts in questions. get framework a And over our lot a so, going do. single I'll lot takes. of you I

you. Thank XX:XX

Elkott go question your Cowen. next question. ahead Please Matt from with Our comes from XX:XX

XX:XX Thank the prices again the guys. I strong drove steel you. the up ease. quarters But began and Good translation picked into last morning back activity Europe, inquiry know is to up? has steel orders which the clearly translation still following two as the prices in in subsided to orders conflict

this Matt, seeing morning We're Good strong Jean. still XX:XX actually is conversion.

And so, not up really we down the of yet. them after pattern going that impacts sell inflation, impact the have come steel prices changed of back

As we going car making fleet. the their are at what into to on decisions put look owners they're it, long-term

headwinds And not anything down that seeing so, we're the some yet. short-term of slowed have

XX:XX Got it.

So satisfying the far? quarter-to-date order so for number is guys you

still happy seeing. XX:XX say we're about would yes, second what talking with quarter, we're If I the you're

see off and think do seeing customer Jean, of keep when prices of think you on And them add to largest orders? point fleet, -- think Or they're placing mean, need what relations the some otherwise lessors reaching it. scale? they start a sacrificing trigger going that you Got do the you where do XX:XX some we'll are jeopardizing to you holding that will do be I their they'd to until they steel think do? pull

past to and a the third-party when of what's pretty and areas. all end And then have We distributed. on, at overall we're three shippers in, those it's table. the the railroads recovery seeing going you when in lessors well come we're are So about from orders in come looking the talked first XX:XX

this to XX,XXX getting sustainable railcars level. that's say the projecting XX,XXX without activity. would on conversion. or sustainable And though, the really I minus conversions already we're So remember, we're cycle, replacement And

no have and driver do to get that fleets the over continuing to scrapped now. So different are scrapped last three there's than been anything the replace big years,

share be then thoughts And you could on you had mentioned Okay. you XX,XXX, to the think industry Would willing to for kept in any guys the go where XX,XXX guys deliveries unchanged. XX:XX XXXX? which you

to year. going we see we be this deliveries to to XX,XXX similar seeing XX,XXX, and would again, XX:XX So think are orders expect you're to the what

And lot last ago. the your me, driven more to of a it. one Got railcars, weeks broad-based. It's This then three cycle XX:XX I is competitors more or typically which two question than one one by just quick which case. asked for more -- is

finish might wondering do I margin mid a more XXXX? the Or to to hope to in more demand? year given implications mean, you to the margin could I pretty involves So in much having is be where for changeover expect single-digit you cycle is be that the you at, to that are was line past? done high mix what upside there that the that in cars high the than have of

the year. to expecting said that by the XX:XX of that rate. look we'll We're started Well, as We rate. year still next you at this we year, come with end at double a in run lower double

this efficiencies. which as we're far So as what ending year, you overall helps

in taking I but those the year, orders So we'll some would see for year nice year next early where on to margins, I XXXX. have there's be and orders It's to already up, would lines say next we are on that. but upside expect for this potential still to getting see for possible that improvement

XX:XX it. Jean. Thank Appreciate you,

XX:XX Thank you.

XX:XX GLJ Research. comes question from Gordon Johnson Our next from

James This taking Gordon. is Thanks in for Hi, Bardowski morning questions. XX:XX good my guys. for

year, aided Just had you the you last you the Rail had margins. a pressure. the that railcars Group of cycle bottom question, which were booked first to some margin in selling that on Clearly, your

expect insofar improvement the how for you easing as later of Group much I do for cost progress year, higher the your Rail as in versus Now guess are -- pressures we come cars value the from how margins, you evolve? pressures? expecting to cost to

XX:XX is and James. So go ahead take Jean. I'll that, this

year. of the half you for So the when look second rail the at products

in First, taking environment we have tighter the the definitely we're is which orders a in now, been market.

that So is January is, the give got pricing I'm had pace. that high impacts, going that. very other small better And the come we're look at thing XX:XX helpful. margins there, seeing variant. better The Omicron no along at in that to you've you but exact least not that's we're we to would percentage, with getting from

of Some seen time had abate We've during absenteeism facilities the first XX% up period. as quarter. that our that gone to through we've

chain been thing to were especially half we quarter, some the covers some the second first to more abate is valves, specialty other I'll had items, year. by of get we've supply that that of in The say the issues, hatches, working there

the cars inventory That's to doing Some disruptful to putting the having run limit during to number you capital can pull having of materials we're in. components chain come better getting. supply finish not of you the to changeovers were working into XX:XX will really a having labor dynamics due having combination help us that availability, that around that weigh there's have So better a also we're of and if so on we orders cars. out, better

also helpful. That's your very Okay. XX:XX explain helps build. inventory It

you have seeing For if the your which you missed remarks, the are orders, sectors? mentioned the activity, some I -- apologize -- But this might I of where think I in prepared it. pickup terms of and on in in

is XX:XX So pretty it wide-based.

few areas. would a and of But the of it's coming As boxcars, over cars you if right some single grain they remain plastics replaced, three we scrapped that not definitely at the look and been from lot last top look has at older were where be now, strong top there's been in the area. areas being orders were a getting there years,

Plastics. XX:XX

And then please. just quick I'll squeeze another Great. Okay. one, in

good For in last opinion, I it year, think to particularly reported. compared especially my pretty the orders and that, you in guys looks average that value your new

from orders items. more some Are source? mentioned pickup few these more !!! just customers? But how of you coming a seeing and demand the in you are your the So were Or and boxcars of plastics are a broad higher customers?

shippers across typically XX:XX that It’s fact pretty different areas broad mentioned was party railroads those in, based seeing and which we discussion moved and that the and win all are come and it’s cars. third it lessor, in buying we and questions into also the [indiscernible] more the the customers

inflated attrition, boxcar us at to that an were got it’s look up is more we the a different design from shippers or getting new So taking to areas. see momentum. it product lot great more as seeing eco-box that’s we The progress

last I'm sorry, actually XX:XX Okay. one. helpful. this is And Very the

In far that shipments you many how in-house? guys be cars the terms your is leasing, of indication given as selling have to any as downstream there you'll

we of When out -- is. backlog is break in XX:XX the between will leasing we our we Eric. backlog So how much is Q, what put our and James, out show there delivery this our

this has is year. same Our $XXX time the the backlog our from get under filed afternoon. you'll of see which grown. in up Q, last leasing all which backlog, that It's And dramatically million will just

Thanks. [indiscernible] know XX:XXAll I so Thank much. you what Jean Thank Eric. you, and right.

XX:XX Thanks, Eric.

from comes from question Barger question. go your Steve Markets. next Our XX:XX with KeyBanc Capital Please ahead

Ken XX:XX for Steve. Hi. Good on guys. morning, Newman It's

your What’s sorry. name? I’m XX:XX

Newman Ken on for It's Steve. XX:XX

appreciate first you that second But the quarter should it's Or So to for low quarter I we in margins the quarter. first could we half. expectations in I'm level? color for to help on margins expect about similar that rail curious expect sequential segment of range? first us versus think if margins to for just the kind mid-single-digit Should the the will be improvement

quarterly not half my really We're the that. step little typically first as versus guidance. second guidance. annual that's talked in of about you year, I give as far a We for bit a And the unfortunately, Ken, the So just change roll-out we're we'll half. in half and trying prepared to go about remarks margins on talking giving XX:XX help second

Okay. XX:XX

the half end of second it, be that, change from different range? magnitude below So maybe here? to single-digit that kind full being Just mid segment the that think about just talked high that I first in about asking asset call you a way of half fair it in will it know margins then. year in top Is stuff trying the assume half. to margins second to to

One were the the first half XX:XX will of you be the delivering year, cars at that I the in market. is, bottom thing we've of the the orders we mentioned will tell that taken of

of change. step until to that those, work get a what see, those second I a orders be. that don't margins now, see you change we'll Once again, think marked you'll in taking the the deliver a we're so, the in we step And will or year, half through I

Understood. XX:XX

taken hit service levels the amid seems have current from the obviously my I For it environment. Class follow-up, supply a chain like

replacement still point? you any is demand comments earlier, beyond seeing inquiry this at that new XXXX made on for Just to talking you clarify Or inquiries about primarily the activity? it are these replacement of

railroads, still not either seeing XX:XX that their overall, of growth new might the make growth. seeing plans, There plants, you're it's or short-term they seeing. from shippers looking because still And replacement term, just some see. are they're the certain some markets fleet or car But that impact for for are at looking they're replacement as demand we're the that type opening opportunities remember that, owners these that long

should from One you about XX:XX little supply of point. as been in curious of we the supply I'm know second these the if that as one, at of large think if impact. a be Anything could some we XQ other Understood. a escalations quarter? or to I bit the kind aware we chain this think inflation just talk chain impact deal the big we that about about from has side Obviously, cadence last might.

not XX:XX The supply in shortages of is, see lingering labor least their get expect. still them the we shipments, we delay that them biggest are to some still chain the the than US, thing time tools at in causing different on

think We of about the We through impacts year, still are that in the the second trying the and facilities. expect to half on that first try that build to talked inventory to our half. those we can see better see impacts majority by to that that of we've of getting some mitigate we'll smooth

you. Thank Understood. XX:XX

Ken. Thanks, XX:XX

Thanks XX:XX

Inc. go from Sellers your Stephens question our from And XX:XX ahead question. next Please George comes with

rates so, hectic It's could missed lease all well good Hi, of quarter-to-date as XX:XX in morning first progression the morning. in this, a that freight quarter? the for and talk sorry, kind both but sequential I if you cars? cars tank about And maybe saw been you

Sure. XX:XX

and FLRD, see that our bit all we out in market that as down, row you quarter going It's a our speed, storage quarter. far the it's for tightening look as slower railcars, a a X.X% demand. being for as Railroads continues. look contributing FLRD. what are reporting And scrapping first third for when we're the still is So you at there we've that seen little at positive a railcars

see increase continue see seeing. be we of are expect the I'll to that with inflation able I we to demand, lease to As rate or adjust that long would that some as and up keep

markets, then reenter the all should Got sort increased had on perspective, you frac in of market customers activity or Russia coal some new Okay. the sand the and cars, how leasing some impacts conflict those seen have we a helpful. of that have it. some potentially railcar XX:XX And of that and orders? That's and some also about markets? think both about lease the And thinking Ukraine energy then, from

then here. XX:XX start, I'll and Eric I'll let in jump

orders we're know US. with. And here overall, add. minimum war seeing terrible thoughts going to the out I dealing going go with we first, positives that. to in through. they're It's prayers and the So any be to if impact our it's cars situation And But in the from don't see don't be and people Ukraine that you'd think a I coming that to a Eric, the

put the small don’t XX:XX -- you drivers about war. But hoppers. on the covered asked Yeah. wouldn't cube I I

And increased seeing of see to movements any we helping oil are pipeline. Where is side, get crude big tight, in demand that by started drilling not that in last and car of the tighter. we're but going it's fleet seeing as getting tank a tighter. growth move. that starting terms rail to activity most It's fleet side We that and is year, We just really certainly tighter. on is the and the more biofuels, for don't that liquid biofuels, the move and see are that greater

that. a bit So just little clarifying of

helpful more, more then as XX:XX one term. longer last one well. have I Okay. That's And

Going Day you to highlighted and potential of with some this back year you point? some how realized maybe much $XXX at million impact that has products operating to in of as Investor How of do income progress And next well? products million. new to this year those your XXXX, been $XXX expect

years. it Well, multiple was XX:XX

going So But it the and design to I'm a time little a things. the pick takes up. cars do point to and running to out few get

new not done that's car of and well have US, many [XX, Our throughout grain on just America North has railroads a has and picked well, the for up that us. covered car (ph) gone in hopper extremely XX] the and

insulated boxcars, and Our standards. up, and boxcar that's work some the refrigerated is also picking of

to vehicles redesign hourglass all an large the It's on running. those we So can making We're it's the that for and allows moves see The did, autorack people in on see autorack. I think pick cars. chip and more it design space to escalate and meant of and for interior those the those. get automobiles and autorack as out they're you'll get demand And unloading is you loading as out shortage up. overcome, starting XX:XX back

we of making said big that still much seeing that haven't for And will we'll be hit but go how We really up. of progress. this year, amount that number. We're chunk have a we dollar are confidence the done

XX:XX Okay. Thank you, time. for Thank I'll the leave it you both there.

you. Thank XX:XX

session. for we ladies question-and-answer to turn to today's and any that, Jean gentlemen, like back will remarks. XX:XX over I'd the ending with Savage And floor be closing

year the the The this of of you, for everyone, thank is thanks Well, joining and second XX:XX excitement half morning. us high.

you in reporting As and positive around and later earnings we off, and to we've with the you look your that with We you. and see higher business our hard shared year. Anne out please with metrics reach our further and improving look any seeing pay forward today, data support questions. results work of Leigh forecast Thank returns for Trinity, those to

joining. concluding that we'll and with be today's you ladies presentation. We for And gentlemen, thank do XX:XX

lines. disconnect may You your now