Trinity Industries (TRN) 1 Aug 232023 Q2 Earnings call transcript

Good day and welcome to the Trinity Industries Second Quarter and six months ended June 30, 2023 Results Conference Call. [Operator Instructions] Please note, this event is being recorded.

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 include 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.

to President conference of like Anne to now Vice Mann, Investor would turn over the Leigh I Relations. Please go ahead.

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

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

will leaders. hold from remarks our a We Q&A prepared session following the

the of of points call the today, the link. Replay we under accessible metrics the Eastern metrics. X, our second and will quarter Events of information key call portion discussion are today's Time Relations website August Relations Presentations call highlighting available website. page and financial after Presentations in earnings A through and our www.trin.net. the event on GAAP During with The of supplemental comparable XX:XX replay These under XXXX. slides be reconciliations is non-GAAP along to provided the are measures available will slides on a.m. non-GAAP Investor certain Events reference the midnight Investor at slides conference the are which on of website, appendix

over It to is pleasure the Jean. turn now call my to

everyone. Thank you, Anne and good Leigh morning,

Still, as results and half. positive remain more momentum quarter performance. operating the environment. impacted confident in details factors continued despite our We'll enter in business' growth on business, we downside second year Our reflect financial our provide in trends our some our broader we how second those

improvement operating both deliveries, lease business. increased of line rising our sides revenues sight margins. continued of and have to our on We higher rates with in

today's me key with to to turn Slide messages. discuss Please X

consolidated a $XXX quarter million, XX% of year-over-year improvement. We are reporting second revenue

from $X.XX, on sequentially continuing EPS $X.XX basis. up quarter year-over-year $X.XX was second Our an adjusted and operations

XXXX on side are strengthening these EPS and us and leading the revenues to leasing indicators expense the $X.XX namely our the indicators, adjustment due into backlog, manufacturing side adjusted we tightening is peso continued favorable and guidance visibility favorable business, our XXXX interest beyond. the $X.XX Mexican our and Despite This reducing and give of manufacturing are to the FLRD strong for primarily on impact business, Our inefficiencies. in to outsized higher

a Our year half efficiency. substantial back of assumes in the guidance from improvement the better revised

not of However, line we we to the Mexican guidance the XXXX. do of significant previously without have pullback our a are issued sight in not strength which peso anticipating range in

Let's first intermodal market railcars in trends overall turn last to decline year-over-year, traffic XX X the commercial the improved X% quarter, the slide. traffic and overview. just the in total of volumes. rail Through weeks the rail by outperforming shown X% impacted Slide negatively and Like volumes year, discuss a are load

storage the the ended American While XXXX. active since quarter with the early the increase rate in in June with is trends, fleet North seasonal expected railcars consistent lowest

Fleet below rail driving as modal storage We're normalization. X-year willing but efficient remain will gaining to trade-off more levels fluidity longer-term average some share this growth. believe well a the we from sustainable prompts and improving benefit take network network

high fleet see and FLRD in future lease to the or rate Moving lease utilization predictors rates differential, rising good to slide, are we very the bottom a of for continue future. the strong which

in XX.X% pressure strength, with the rate was utilization large lease and covered was FLRD Our fleet cars XX.X%, especially hoppers. tank and

utilization of the our flows. seen provides our in strength trends durability more directly, significant which and confidence the is rail But rising business, critical has While been improvement. important driver have lease cash in in are fleet supply-led traffic rates business lease which the

numbers replacement-level and side, and another and with On in levels and of expectations our are were X,XXX. in inquiry railcars strong deliveries delivered railcar quarter with for consistent booked These view the the new manufacturing align orders We X,XXX quarter. orders demand. the

us expectations give Our in well backlog XXXX. of into our confidence $X.X current levels billion inquiry and

to details more later Moving briefly the in X, cash I'll call. providing the Eric discuss with flow, Slide

million, year-over-year. was flow cash operations $XXX up quarterly million continuing from Our $XX

Additionally, our flow up adjusted cash free was year-over-year. $XX $XX million, million

can cash of effect increased today's cash see results is in of a which Our higher our business as rates we and lot evidenced generate balance. production consistently lease through predictably the and flowing

talked to to takes and fleet are bit slower Slide the lease increasing FLRD and but Starting fleet, X reprice turn revenue. little Leasing, revenue about talk durable. the I've and of segments. momentum with indicate and our which Because utilization a it Let's while a drivers more business our increases more rates already about

encouraged rates are We to are take see increased starting of line quarters and top effect see the we rising. to several

number XX% coming quarter Our the X% we of lease continue was and year-to-date. whole about more reprice a digits year It's XXXX since that double upward. the ago. to fleet, than the we the XXXX, considering had have when as XX% renewals our since of this in higher And average see noting rise are repriced the so rate to highest worth quarter only fleet for FLRD the rates we in expect about fleet higher second expiring than our of

still the is While are rate rates growth growing, lease moderate. starting to

our allows success rates on which in highest the quarter, average XX% an rate since was the hold showing healthy lease of renewal longer. XX balanced fleet. to us turn sign XXXX, lease renewal to months Our And and a is a impressive higher year-to-date,

up and basis expense. depreciation margin quarter, XX.X% sequentially in XXX expense the year-over-year management was leasing Our and increased to due but operating maintenance points down

with revenue and of different to strength see of we slightly in a the the we and continued margin both acquisitions, our Overall, recent as have integrating Leasing have begun businesses overall performance expect incredibly leasing the and margin. through XXXX. Additionally, those decreased margin business profile some are pleased

the up railcar of Products sequentially slide. revenue and a due the higher at was Moving year-over-year to to deliveries. bottom Quarterly Rail of volume

second foreign efficiency In Our disappointing. service quarter, persistent Rail down was second quarter our Products operating margin. margin negatively the rail which issues slightly of in the X.X% exchange, was and impacted

we where gotten has efficiency as like. we'd wanted not quickly as Products Rail

The plan in chain Supply the have the quarter. improvement. operating peso we being strength seeing frequently issues basis by the track Mexican expected. Rail the continue eased more to are still of negative approximately in are are but improvement there points margin We Products than metrics [ph] XX still but we impacted we surprises

Although in U.S. a our of of hedge workforce is dollar we suppliers portion revenue the our pay Mexican but pesos. we our pace spending, several in and

can evaluating Rail our Still, exposure to the drag We to margins exchange are pricing adjust ongoing high options until persistently our reduce the rate be and on a cost an will structure. Products we peso.

the many persist, optimism. While us give challenges indicators

attrition above additional in on And year. changeovers. fewer To June the this of with improvement, production included the highest half year requires lead of the the of has much foreign second the our Mexico. segment, give resumption will runs. of quickly manageable in benefit longer level Products profit to Labor the less exchange the complex the more some reached a was Rail This more and operating This context impact. X% progression

the the the the As financial focus aggressive results. we accounting of business' necessary improve with single-digit the have last mine steps year said high margin range, we exchange efficiency our and overall exit and a Product we even of quarter, can on after been call taking has in This still Rail in to to expect been the for rates. impact

long-term auto months our remarks turn mid-teen X progressing acquisition on ROE quarter for announced outperform the my the with has toward Olin call to last demand our of businesses board, into parts. pretax racks on ROE. Eric. solid expectations goal XX.X%, to and last the improved for and We are [ph] Trinity's Slide a acquisitions. we're to conclude Trinity. with of these supporting integrating XX our third I'll the focused pleased our Across performance continues and

We the in more we industry integrated important be customer-centric, for By make with well-respected integration expertise logistics services, mode combining an railroad recent partners. strategy our growth modal can offerings of position approachable These rail of are our innovation transportation. equipment to service with will share and Logistics. early our acquisition a RSI step in the of RSI's our

wanted this I our quarter. financing successfully before our for the completing team and TRL notes call XXXX Eric, the quickly And congratulate I to loan term the turn of senior to

more provide these let I'll on Eric? events. Eric details

morning, Good on discussing my and cash Slide income flows. comments everyone. X, statement start I'll our

the income to Turning statement.

lease railcar improved the higher in million revenue and Our $XXX external quarter reflects of rates. deliveries

were continuing quarter, first Our over adjusted in $X.XX basis. quarter earnings share the the on a per $X.XX increase an operations from

and net $XX million is We million lease million in $XXX fleet portfolio Lease benefited investment operations to our flow We've dividends. $XXX portfolio our cash $XXX after achieve and from fleet flow optimize dividend. investments returned lease shareholders $XX Year-to-date, is from adjusted and Lease through million is us Year-to-date, fleet our our sales to the target second our free for and allow quarter. investment. in sales cash continuing million

corporate million loan, by $XXX from X, increase completion this our amortization. as senior and the just Jean a TRL to warehouse as of offset the in have Slide we and notes outstanding term mentioned, XXXX a seen new as revolver offering normal well the debt year in reductions Turning

market all debt reflected As expense. current you aware, are the higher we executed has effectively, these changed deals is Ultimately, in significantly the interest environment. which given

general notes, proceeds of the senior the proceeds other borrowings include We remainder debt, intend XXXX. which corporate due use outstanding the used our of to the senior for under our we For repay net revolver notes repayment facility. in to credit purposes including may

view North Slide XX,XXX will for this This XX an deliveries that guidance. our American ongoing update year. approximately of replacement-level demand. remain our to supports confident on Moving We be railcar

mentioned, most us As now railcar we in a orders that XXXX gives are receiving well visibility into for and deliveries backlog have future types.

outlook. we net for the is the to lease net of quarter our And along year, the year. million guidance million. to in this second of also affirming $XXX the fleet investment fleet in are the X-year in our investment supporting with $XXX Year-to-date, expect lease significant investment of sale complete full fourth half fleet year, We railcars $XXX our million

$XX Our year million. manufacturing $XX guidance million the for unchanged to at for remains CapEx

Moving guidance. to our EPS

outlined, and interest efficiency, by $X.XX $X.XX, As full-year economic higher Mexican our guidance partially Jean peso slower-than-expected offset namely in strength the better-than-expected the driven improvement are lowering Jean by mentioned, and headwinds, range the expense to profits. to of leasing we

the rate assuming of on set our fourth Since about strengthened XXXX. an We against based XX% dollar by the continues gain plan the then, operating quarter to has in momentum. and rates peso the exchange

our exposure, Mexican currency of for no peso. have business, other we material nature the except Given the

million by our a $XX combined variance rate has hedges, flows exchange even million original of additional forecast [ph] We after do in Products Rail $XX first impact margin This for impact an $XX have as our but hedges the will -- pulled about place the margin forecast full-year down compared to been and the impact year of to for accounting the guidance. and our the downside. million half in our through

downside limited year. for to the our the peso We of have exposure balance the

higher the given reducing also and of higher-than-expected levels to are We our expense, account guidance costs. borrowing working for capital interest higher

while anticipated. improvement it efficiency been in evident, than has slower is Finally, we

We in expect to range. exit margins to the the year X% Group Rail with X%

Products Our second be year-to-date full-year rate expectations considering is and products in X% the of to year. after forecast between X% Rail impact margin -- the and performance, average exchange half

the line in of of continued portfolio growth implies improving as adjusted significantly half back on half share our per EPS As of we the first sales year, top the manufacturing second half still our $X.XX. significant assuming year, performance Jean second fourth adjusted Year-to-date, compared earned the RevPAR the aided said, expect growth to business. the guidance, the earnings midpoint stronger of we by of quarter. in and in side half the have the this In margins,

the of strength We given are both forward-looking confident is this businesses. our metrics of our achievable, in

to the for positive call business. before emphasize trends Q&A. see we I want the turn Slide to our in Please open XX we

and room there continues business believe is improve we for growth. Leasing Our to

Leasing the The in business. as our extend our also drive the of reprice North more supply dynamics American demand can positive. We very expect in higher the term lease longer. continued business lease This margin the and remain and of up retain growth rates we fleet we fleet revenue will so the

increased On soon business deliveries revenue, improve. as to in over to growth and the this production growth manufacturing side, follow the we've margin the continues in with last evident year,

first our for And we now operator, ready question. are

from Allison Fargo Poliniak Instructions] first question The with [Operator Securities. comes Wells

line to a away margin. that of back sort I there inefficiencies Group the that? trying changeovers? were in Products terms in you Was have the to talked by efficiency confidence moving you to go the Rail that they labor purely you. Just complex back get half more guys that to, want to of sense of something the driven sort The from of

Sure.

the in have, is that what So back half, lot the of carrying we a we're lot companies momentum a of half. into

ramping. the first The half of we year, were

ramp large we we on operating quarter, the quarter If first production the up XX%, you look XX%, headwinds, above second In June, margin. car FX there. at with were year-over-year were X% even

of changeovers, you the for remember XXX were at to at about relates look looking past, the to effect. occurring basis quarters, we first talked about changeovers as you XX% in that in the X the If points we're us the

Next, you also coming the efficiency hired the through have as that we would of we half start see the were quarter, we down talked about rise, going year, the training second that occurring. the to is and by start should employees. first of end they to They the

quarter. if So of forward X% leaving talked operating at effect, in get into all into to is the you into we fourth X% of year half, the lot going the And margins a the that. that that take second about, see FX still we momentum, for so to

improvement. of lot So a

hear whole of quite strong. to of the just very incrementally But weakness understanding more points that you're like And fleet within bit then concerned want or That's weak now. there's It is little lease I very for of environment it. getting that. Got if constrained seems Any strong right Leasing, lease starting verticals rate a environment, it's of you? a you're any helpful. on to sort the understand actually

cycle that's remember, there's really this and driven it. not market single Okay. supply is Well, a driving

The is to that retire XXX,XXX next in point years. to the going are there's to other cars have X remember

at. cars So box apps to overall, we're have built those markets are we of are do grain lot stronger, a cars other that be looking cars, going -- that

outlook economic there. is If the you're chemical the weaker side, to that's looking adjusting for the

and funds probably one was the weaker to of there. remains one. that especially ones. out go as the flow that's through to Construction back stimulus a I'll the ag starting stronger strong, So are now from

comes with TD Matt Cowen. question next from The Elkott

next also, Jean, continues cars pronounced, to up expect outlook in tightness overall just your delivery favorable be even replacement, that these continuing not to the also, effect in has be about car surprised it the like -- fleet few it's all that the to need though the years; would replacement-level follow the on to regulatory the I'm XXX,XXX anyway. for just the retired tank you're driven that dynamics potential could be there's demand but And would manufacturing. despite still assume pull-forward happen you a on for comment

strong. the at in is continuing. prior So quarter; Utilization, really, the renewal it's rate, there in And XX% seen underlying term, XX.X%; see fundamentals year. we've XX%. we remaining pace scrapping the not the that It's

So, we come year, scrapped so about far we've had the this car of XX,XXX out and to expect about fleet. XX,XXX

inquiry XX,XXX backlog if levels the So backlog, our ended we books. the still a under with And on XX% to the we're to just sitting support year. our at cars quarter industry of look seeing XX,XXX you

visibility well good have we into right 'XX So now.

I the just already XX,XXX any guess think with even had year I cycle. was been I have the tightness XX,XXX Yes. more it's seen a surprised just to like, car in if a current that we other would possibly smoothed-out this but cycle fleet,

to have So or for X years might solid X come. builds we

Can included? your order solid in or order they came where the end were of quarter? orders talk can quarter. the the you there X X you And talk the after side, big like activity Was the about from? about orders On

Sure.

So look really the We're orders. spread when not seeing we it's very at large out. orders,

than you've single They demand. car driving types seen quantities be smaller past had in when we're orders market of the seeing that about. is we a may So you've talk consistent the in that

this other So the of us, quick, I facility. to because Not from really to gives our point think ability good but real is why a really But it's everyone's for thing. being from remaining good is this standpoint overall it good. standpoint, that cycle, stabilize really manufacturing your orders and leasing speculative not the manufacturing a tightness a and only that's There's lot a that's disciplined. us

continues. So that we're hoping

start demand pretty headwind just underlying How And we orders actual that's Class outlook if in The term in manufacturing for the improve it. continues this be volume, service given where determined have. continue intermediate first, basically volume concerned it could does, affecting rates? absence the equipment? might metrics see few demand high-level to of Got the or anemic, question. to of a to that it they I equipment to would one be which last velocity lease levers one in other seems And in

there's So driving single not It this commodity again, one actually demand. remember, driven. supply is

we're when seeing So looking good across board, still we're orders. the

If lighter, you now. right want pick tank cars an to it's area where it's

affect some still car-driven recovery maybe seeing. 'XX freight before not that, mentioned car that in that someone we've would it's There's orders. rule of change seen in and a there So large had upcoming a demand increase but some we're tank the

if So, but for type intermodal in we lease fleet biggest we the some at don't major downside, we've And -- have yes, a you look built at it's car Luckily, not build. you intermodal. it's if look fleet. our any our that

So again, overall, 'XX. well and signs positive we're still seeing is our into very outlook

question with next comes Justin The Stephens. from Long

Thanks and morning. good

it So you question the know I'm of the can of be attribute would about have the look industry at much timing big of you we How order flow second in building any quarter-to-quarter. took quarter. book, pretty the first demand move I as orders, just thoughts a the curious if order versus in on that an step-up lot to updated orders? if back versus quarter a on industry And acceleration environment you half. lumpiness the through there the

know, I think never as can what So be smooth. Justin, and It's really the seeing. quarter-to-quarter orders that's you you're lumpy

still order, the it's what going be As we believe we at to look demand. will industry replacement-level believe the we

So year. be XX,XXX XX,XXX that to to equivalent going getting to it's a railcars

less XX,XXX -- go about at If intermodal, were ahead. you look there

lower about, is was first of than Justin, bit XX,XXX XX,XXX. Last kind a a quarter replacement-level that demand. we -- quarter going talked back orders little to what

over higher you still back shouldn't so long-term you'd we X than XX,XXX. that last you you the is quarter. have XX,XXX and go you When did, quarter remove our average GATX even but if if with a quarters which or cars agreement Second

expect quarter. would into think going There I that that, at And see we but is going XX,XXX long-term may and a where a quarter lower So forward. XXXX beyond. that out it's be trend we

that years, that some to be over XXX,XXX either is have be to X regulation age that there. or And the going to thing demand from cars go one so consistent there's with scrapped, again,

manufacturing to you swing on comment if curious good on be And the follow got in factor July has I big was for improvement gains that It and secondly, I And -- could it. in some we've improvement Eric, Okay, modal. June. was then if up to wanted margins margins. on in that such seen that could sale, a hear on continued?

So us because I'm can a could sounds particularly curious if half how give half sale it second on fourth the coming. you the color and versus the quarter like first any big look there's

you're go the looking things couple that start the half I'll I've a points won't a XXX see about in we've manufacturing, talked saw the half. about was we ahead we at When basis seen. second of bit. that of in and changeovers that of little first headwind that year, the

fact less If have over that got many volume, you fact changeover, the the so half look going we performance in think got pretty ramp at going the to employees quarter. saw come the that we as the to fact our through. flow to turnover that the out June not in level and our that in efficiency that the much point, And we I seeing also less we we that second the have third see to and you're turnover we're are improvement, into

fact to headwinds third basis operating the I'm to we was of thing lowered that you're the going in last coming points the FX going there. say fourth have XXX in is reason The about quarter and the margin overall out

in if driving Eric, a is had the to... fact to you guidance. lower want FX the the that So we factor And

Yes.

to there And about talked of million significant gains terms and there yes, -- $XXX so are about the quarter. and million forecast getting million RevPAR to our get $XX was net $XXX backlog leasing where prepared Certainly, following Justin up is sales, which, Q, when by in that in second part on back I fleet gains to you'll fourth the on remarks, in gains but investment our in $XXX my you the in quarter, embedded second the of in million. see

deliveries that managing to and So we are we our investment. have still net fleet so fleet

the the a but half gains, expecting on the I'm get gains in In gains significant. of And year. terms not of we're the sale, gains into to they're from specifics of going second size first the -- pretty the standpoint, fewer half of directional

with The next Bascome Susquehanna. Majors question comes from

been that of either currency or has always show results, we the in the both or all half changed the seen a forward driver of your call up at the FX I of haven't and quarter if downside about curious now, a followed business recall that. you major of least missed framing manage I'm XX coming just pretty and just apologies ever for in Mexican be the years this at Qualitatively, on second appreciate is the FX way and up because outlook. don't if conference weighing more something meaningful how sort quantitative the where though, is we hedge has to driver level? it unexpected volatility, volatile I going risk, really that you we historically upside going as

is Eric. Yes, This Bascome.

You're prespend, because in natural were we the Part had have generating in right. They we it not pesos is come hedging some revenue businesses. non-rail of with place up.

to And over, that back you as generally, So has always referenced, the if the last you go the against neutralize years, impact. weakened peso of XX dollar. then some

it's mainly had changes had but -- it hasn't X-quarter XX% a where XX%, over in period. the And volatility so you've

mentioned half. impact. started the that It's $X has we XX%. first we impact. quarter, million our this over below So in an a around -- year put guidance through the It had strengthened -- we've so in down now strengthening or significant had to some It in peso was this first quarter the it XX%, about

a The accelerated second that quarter, million $X impact. about to

for the we weaker. year, balance our getting then see as and the So didn't of we guidance looked at peso the --

level And adjust of kind of the to the guidance current our so we peso. reflect

We strengthens the further. and put then will does we peso. would any in weaken it some to some if which that that, forecasts And hedges benefit benefit we'd protect it weakens peso the from weaken downside that place from but if if say from

We lot of our have a Mexico. in more production

new through in production that productions most Mexico, overhead sheet balance immune is changes more costs of in peso-denominated currency, We're so our our of in not both that comes And come car Mexico, our in an in especially of while are are that impact. operating and has the to does margin the Rail most So now it and segment. it comes through the of through.

I appreciate structure Day cycle variabilization margins on have step lower Investor If in a manufacturing the to business, that. and of some does years go of cost back. higher you and X through some taking almost in lot there. we where the highs was make That a the messaging ago, the lows back ways sense. Maybe from of the a might

business could be versus into operating little environment people? went plan forward the that curious calculus done and of to achieve work you're the the a the you manufacturing to one X to Now that? ago, if the difficult today clearly, in design? environment an Just Or on need last in all have does in chain the been change Do right competitors over strategy in differently? still of have supply you is years. there if operate a as I'm curious, have X.X the you some operating your that's disruption that looking procedures, the opportunity years to been on

Bascome, in we believe we have the the we do opportunity So that what still X-year do said to plan.

COVID, mentioned the some the period. war Russia, of in You inflationary environment, the from the everything in headwinds, change the

through. those have coming of the All mitigated results

you're think that I shine, half with year, the FX about. to even the manufacturing see going of to start this the we've talked results second of some headwinds

lot have We're headwinds But taken going They've operations. We be those programs. go through, our won't steps. expect, year, FX you optimize looking the the always a we're still next the as of working we have to on into going on that quite to of we some now.

the So for second you look look those next the year, we of into at results as year. moving half

that sense for year business? or of long-term period, of a Maybe how look X when in that the just and you share mid- your We're to in you'd to have vision like conversation. next do

we're in now, right the this most looking So fourth quarter. later at year, likely

You'll at you hear us on update strategy. the and give announce the Investor Day

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

This this value getting creation? one current My capital is for about the allocation talk to Moore thinking you best opportunities Can sheet first the you're the is balance morning. do leverage Given just for environment, with about Steve your how just where Jacob priorities? see targets. you

Yes, Jacob, this is Eric.

yet calculus our a capital shareholders, capital What's returned we it's of done we've still continues In a opportunities part any this have certainly terms allocation, of change. that been dividend, repurchases. but to our to we've of a good big of done is we year record. track invest, see do lot lot grown to share We've not

up. yields returns piece the seeing better. are other The is We're

market. to the assets the seeing also are seeing So opportunities secondary in in leasing We're investments, secondary sell market. yields We're opportunities looking better. the

right business have opportunities -- and So to to that of capital we it's a balanced about the very things do going good deploy the we're by our one is approach. It's shareholders.

there. continue to think We'll nothing as significant cash I generates So deploy that flow. capital the changes business

Got it. your one That's my helpful. is then back to And just -- on second guidance.

EPS range, of like a the a that but you've lot. then to lower increased the same looks bit up a end deliveries math, down second half EPS the it implies industry industry on high the deliveries bit, So

to in the what going factors are deliveries contrasting But talk probably trend you that industry? just going that starkly sort that's for of are of implying your improvement. do margin drive you're about can you performance? think you So think the some to implied I differently that than think

first the think units. the the year, at XX,XXX delivered right of So has I industry half

implied it we of talking about coming is reducing, would off, through, at -- kind we're in I that. When leveling significant a that you look So improvement factor. XX,XXX. we see that's say see not do margin

margins of improving in confidence operating into realizing have our -- orders performance the taken those the and we've terms visibility also in have We profit. of

too So changed. XX,XXX none I -- railcar into our read has by that wouldn't comment. really of much

be deliveries We term. of longer that to expect level at the for kind

Okay. clarity as head could on one, could, 'XX? Understood. in lopside And for we then if one just cadence into expectations you quick [ph] provide after I what's any likely a 'XX

in as not 'XX only we I an say go railcars thing We'll as far into as the the guess the is guidance the would we're So into XX,XXX I'll expect still we're looking XX,XXX there. later industry, giving is guidance, get for overall, overall I year. about to XXXX,

the Jean This closing to concludes conference Savage our to question-and-answer over back session. for remarks. I turn would any like

for you us back today. ability we're to to company's in the EPS in half joining look substantial revenue, growth We our operating thank downside you. and our about quarter, and the the with sharing on progress of Despite year. some execute environment the Well, positively forward feel to margin continuing factors

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

disconnect. You now may