CAI - Earnings call transcript Q4 2018 | CAI International, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Thank you, ladies and gentlemen and welcome to the CAI International Fourth Quarter 2018 Earnings Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I will now like to introduce your host for today's conference, Mr. CFO. Page, Timothy begin. may Sir, you

Timothy Page

and of Good afternoon statements forward-looking of demand, us materially Certain could economic Harbor differ risk and our for are conditions, the limited to current thank during this you provisions and cause on others. Safe made X-K. CAI the expectations its on from additional be pursuant its expected Securities cause XXXX joining Its competition Exchange uncertainties the XXE results conference differ of made We today. increased to customer XX-K. actual and documents Exchange the refer involve forward-looking Act filed and Section not including documents current results, expectations International call reports to XX-Q and from Securities that including and you may that Form contained call. Form Annual Commission results with conference actual in from Form this reports to Report to on has that These filed could statements contain quarterly important factors and but

plans, remind results, company's this subsequent this the to obligation If you the Officer, under strategies modify the this the is and might no views over regarding made outlook company turn that and discussion future. to to discussion. detailed update expected or change plans, happens, any we of call our the statements Garcia. views, as call Executive Finally, its the Chief in now company Victor I'll estimates, during outlook this or for President strategies

Victor Garcia

have presentation our company our conference earnings and our section XXXX to under Tim. our quarter Good full fourth of the released also call. view on year a Web on with you, state Investor and site Along and welcome our the industry. posted results of CAI's Thank afternoon today, we and

for net address our was but presentation will not year prepared in revenue record in a call. on company and this XXXX through related logistics can be the income. going the slides questions and tremendous our any leasing record remarks, specific the We with to businesses

reported we and million, year, logistics million, of increase XXXX. $XXX.X the lease XXXX to $XXX.X revenue to an XX% compared of record of of record revenue XX% increase For an compared

we and respectively. revenue for $XX.X and lease-related million, of quarter, $XX.X fourth the increase compared fourth reported million quarter million the XXXX. Logistics to $XXX.X quarter of For an revenue of XX% the total was

For we or net $XX.X the per to record $X.XX net income per a or reported fully XXXX, diluted share in year, of share. million $XX.X $X.XX compared fully income diluted

XXXX, million we income share. or $XX.X per the fourth net reported quarter of of $X.XX For

seasonal quarter results and we made the quarters X the fleet expect our would the for percentage remain a and container investments today for X second continue from was XX.X%. We third to during Our is fourth periods the have decline normally point the or year. to Average in fourth utilization as currently quarter of the XX.X% very of weaker container strong utilization. in benefit

quarter. interest of compared additional as an to well both in Despite the overall as the the quarter increases the decrease We million increase quarter, proportion about of by levels and of committed portfolio. rate interest high the our debt per in share market in attribute fixed in a $X.XX leases to the degree overall increased strong of smaller third the our strength have reflecting witnessed entered container and in This it debt momentum, expense expense rates. the we $X.X represents

our amount have we interest sheet. However, a mitigated balance of risk rate significant from

with an fleet and committed billion years, last on of leased business the containers X.X optimistic the be years. on strength have two lease lease XX% our utilization leases. regarding begin $X -term with in XXXX. of average prospects to term owned We over our from a continue XX% we XXXX We container position of at of of new In

expect commitments. from benefit long-term our overall contract tight as structure utilization lease and we strong We our remain to

containers in small. particularly strong remain continue Secondary [indiscernible] prices to most of be markets outside Asia, of inventories

our strengthen improving portfolio. utilization overall advances segment. and rail market The to We rate our continues see to continue have also we in in significant trends made in rail rental

to Our in have to railcar utilization to rates XX% as the in the quarter increased XX% railcar fourth XXXX. by quarter levels Rental for to in most XX% compared of the third as compared types XX% XXXX. increased

for bring improved expect we owners. policy So, strengthening of returns railcar overall this to rates financial

Our railcar remain first most leases XX during already of half railcars deliveries of will of committed of delivery when additional which completed are attractive new commitment the will million on take to We relates the XXXX, be we truck growth with had volume. brokerage our and where to focused domestic particularly returns. most logistics our portfolio it have intermodal in in success business increasing customer on we financial and as

We marketing and During minimal Dallas and an the weeks. to in year, the have offices we continue on overhead believe additions personnel. most office to support sufficient have be to grow of over we will California added operating coming and we in Chicago with focused operating expect open our

in have revenue overall in logistics and our expand we and With to business we made, in people, XXXX operation already the we our as growth investments double-digit gain additional expect expect continued customers.

find shareholder our we our of maximize to of and ways our focus use repurchase have shares to returns, the we attractive capital. As continued

per of shares stock During an of our share at XXX,XXX average price repurchased the we $XX.XX. quarter, common

XXXX record of expand company financial long-term our In we returns. in an X We have continued reported and our tremendous expect X.X million for as in to view repurchase the was continue shares approximately value QX. businesses our creation for repurchase authorization a to as announced investment We shares and million to attractive shareholder XXXX. year we shares summary, remaining shares

confident the we'll to we our look that and in we company. our the company benefit XXXX, remain of strength have of into strategic As and shareholders decisions development enhance financial long-term both immediate our make

over the results the Tim the our to continue quarter Officer review detail. turn investment advantage of greater Chief well-positioned very Page, I'll in call We to be arise. for they financial Financial as now take to opportunities to

Tim Page

Victor, of as QX last good a the increase Total you, everyone. and Thank revenue to million of was compared year. $XXX quarter afternoon in record XX%

of year the of For Lease record compared year. increase a a XX% also to versus compared an million, record $XXX in was $XX increase of of quarter the related million, QX and XXXX increased last an revenue to XXXX. X% QX full at revenue to XX%

full year for quarter also versus QX as from container the of rail quarter attributable of expense in enjoyed and $X.X basically leased compared on Net a the increased $XX.X the out and Operating increase that was year. fourth was an was in Most For for record during XX% and the million, Net at decrease million, revenue $XX.X a of was XX% compared both market XX% we equipment was market reflecting QX $XX later. year-over-year million, is lease which of increase of onetime container recovering we records increase XXXX in terms which tax to impact of XXXX, in of lease related comment income. million were XX% QX Operating an an XXXX. a was to pre-tax year XXXX. $X.X strong income record of million, year operating full the income I'll the million, benefits. a CAI million income increase net the the of $XX record versus million the of for increased last QX. $XXX quarter of XXXX a in income quarter in primarily interest to Depreciation income incurred XXXX costs quarter QX. adjusted for income the full versus a decrease $XXX

average We X.X expect depreciation expense than consistent in be that timing higher expenses in container-related related. maintenance versus with QX Rail and higher million container were million QX maintenance in costs. in QX expense QX the increase was QX in maintenance largely $X.X handling expense had to million primarily $X.X was Storage additional due QX. and than operating business lower because costs to a other storage QX repair and million costs $X.X historical

the an true resulted with in past and expect XXXX gain to the to QX from quarters. containers to third in range of some the gain of increase XXX the and we $XX the from Approximately several balance by increase expense of decrease G&A in which and consistent leased we out expense a $XX.X floating We in XXX was QX which interest QX. equipment in on million higher in average in In and caused increase of of of of the thirds our would our million to to quarter sale of delivery in recorded conversion in the one quarter gains expect related modestly million, We of QX, realized a million. fourth rates. lessee. quarter million as Most was was quarter. late $XX.X debt million same sale related $X.X $X.X remaining million in end increased the The took increase of in million handling of to related rate container over the increased to was remainder the rental $X.X fees average resulting fixed of the to railcars of disposition the as was two QX. The million $X.X of LIBOR an QX, an of in G&A $X.X our we increase expense to rate QX. increase year from debt storage increase compensation assets be Interest in was related compared professional costs.

Our QX assets X.XX%. range I be QX. of average the to interest slightly average rate quarter same investment to debt limited average of mentioned in for result a a in previously in balance was in would We the fourth the as the container rail the the rate expect sale and decrease

fourth rate. of quarter fixed As the of was our the of XX% debt end

brought in our X%, XXXX QX tax rate was effective X.X%. Our to which tax rate overall

due dividend rate our higher coming and in net at expected rail the dividend million. XXXX of tax on stock. quarter this will from liquidation $X.X range $XXX.X in preferred of X% remain of We to $X.X million percentage logistics Preferred expense quarters the expect income recorded a to million in stock value preferred be of We XXXX.

at to were as XX%. our and XX% end of basis, the At quarter, our assets the revenue interest revenue at billon variable compared in increase railcars end The QX. is us XXX,XXX QX. of the end of questions. of compared entities QX of increase from assets an of the of of We Please million $XXX CEU XX% our concludes total assets at On approximately approximately restricted XXXX. billion Rail flat revolving was QX the of container revenue million. facility debt QX. XXXX open the with the to at approximately cash had increase Container had grew the total of assets QX, end as X% QX our XX,XXX of fleet it QX, of $X.X increased the During was held QX. dollar end net million at fund own end CEU amount QX of larger container and credit end of a represented call we to container $XXX an cash available $XXX a operator. $XXX undrawn than to of for comments compared million year-over-year to end of the That our $X.X under

Operator

of Thank line Hogan the you. Instructions] [Operator William Our first of Blair. comes from question Brian

line Your now is open.

Brian Hogan

afternoon. Good

Victor Garcia

Brian. Hey

Brian Hogan

My question in shift more a higher a XQ, -- you in a the yields? of down XQ rental thought to in a walk bit and some more there just Can leasing anticipated. little a is be assets kind a yield throughs and Is put the lot lot revenue sequentially container came on the on through us the shift to due finance the of little than and or that? the flow to of I I you XQ it

Tim Page

down QX. the we reflect yields The the them come revenue that in lease for were didn't the of of because end paid in QX, have all on would QX containers at assets as

a So, rental higher rate up at the the assets revenue went just in than went QX. up

Victor Garcia

anything changed a is So, very much changed on on and or long-term it there wasn't leases the because lot on renegotiations containers average weren't really earning there revenue contract side that the -- else. that of the were little really yield

issue and terms the we we sheet. earning started in it's and on that a just of balance So, in recognized our assets when came timing when

Brian Hogan

Okay.

that's timing not So issue. the

another opportunity year would say don't you do you dependent light. be investment on of do and competitively, did of Okay. you now, different And then, an I XXX, about very quarter do could I pretty investment right I out macro CapEx obviously understand mention, first that. you for XXXX but is did the you I what that's What what think year would the seeing But containers investment and probably mean think outlook? of from last

Victor Garcia

slowing this some growth think terms U.S. a to the and expected given But we that that think I the year not expand out there some will economies. continues might good are economy as economy there but There world as is out for The year But prices for cut to we think significant year. year uncertainties was I a that so, look volumes, and clear demand. see to the last some we continue overall still continue as container talks in be trade optimistic it will be it's it expand. level of container opportunities to additional in have declined. investment we're is us

the $XXXX because from have spent container per prices less actually average to speaking XXXX. So, obviously dollars might XX-foot about amount of relatively around of be gone an

would volume investment. as have we of this we did even year, So amount same if last year less we do the

Brian Hogan

[indiscernible] do even. a the visible but one, there? Sure. you profitability you rail break XX-K, see of give running out pass you get to Are I the say we're commented, -- business, Obviously, been it's in rail guess getting double-digit the segment do normally the in around how less business and you or I soon we guess the in that let's ROE has normally

Victor Garcia

and We're fleet where foremost the number doing we're the of first utilization of a things to trying up. get

that all returns. out are rates looking as includes for The in are improved is everybody have for and looking good be also rate we that as the the renegotiations. when opportunities that rental units increase is available marketplace well to news We to leased with

have rail so, rates been And increasing. the

fundamentally, see if equipment was in a to tail decline the of was the the itself, equipment where business that effect result on we period lag energy it. there's had we end a that's the to a energy changed where lot reversing We're a last coming So improving. the strong on of of because a shock wasn't there that business other orders as lot of in types

we and every the fundamentally, getting looking expediting of where we are so business put capital. stronger our can day. So ways different is kind of But and that's at that

of can capital. So, where of we up. the we And overall business to bring look we're returns every and put part the at company looking our

Brian Hogan

moment. goes Do XXXX actually last that And into expand my ROE expect the in question you XXXX from levels? to at

Victor Garcia

in levels business are every can aspect business consistent basis. looking think get amount we to a and lower but We to certainly And were that. think in looking the we those targeting in this get levels. I get Well, mid-teen quarter, are year on we ROEs and and we're to had to strive try do at to still certainly our we those to levels the those earlier continue I of

Brian Hogan

you. All right. Thank

Operator

you. Thank

Wells question the of next Webber comes from Fargo. Our of line Michael

Your line open. is now

Michael Webber

good are Hey, How morning guys. you?

A Victor Garcia

Mike. Hey

Michael Webber

indication why been like new -- maybe maybe price hasn't where just hindsight. to support to think of the depth drive prices It Good an were today? for afternoon I off there. rather. Victor are talk margins surprising start are just a Hey And seems were rolled Can QX. maybe where more the on you just then have bit. you -- they've maybe been And prices manufacturers and box a guess rolled are It's the there in box the where little now. QX, where points

Victor Garcia

decline the say $XXXX price to As container Chinese I from in around reflects $XXXX. roughly have decline I mentioned prices. vast prices box a the that of would for XX-foot declined steel majority the

They showed for for public looked that to when weren't very competitively. they those draw their last public volume think that And manufacturers are was the business. the I lot making if there pricing could really money you direct year So, they at results at between correlation you a a -- actually were manufacturers. of even

just very been So, competitive manufacturing the it's market a in side.

is So, challenge. think we lowest else containers I trying Obviously, price there's who everybody the possible. to still and profit is get buying

decline reason weeks. in going stabilized do for say which several So, in But the of steel, that the has the last vast has to Chinese I try over we're always been to the that. prices majority would box decline the

so, steel there's And change unless a we expect prices. those in don't

be a decline. to continued So, there

Michael Webber

Okay.

lag and single and kind year-to-date a talking of or and your so kind digits a they've maybe level of digits low maybe of yields the over trended helpful we kind lines, bit of of are where I to talk where within you those quarter are how like is or the context that's past yes, high okay. can maybe guess along Maybe of double Now ballpark average a or, that fleet? now kind for

Victor Garcia

I'd box as to normal comes of Yes. say asset life cover. the down the come because just they cost down those the basis less a on over there's price yields

think So, had have they are the the before. that I come largely we same but we as return expectations down,

it first and out indicative The year time a just full of the the are the and terms some of where necessarily the right to now, activity. much lot quarter like quarter it's competitiveness at last first in transactions of is a of There but it you tend number there, and of feels year year last the very not be like see transactions say not I'd feels smaller way the volume.

much year last we the not this months than So was different of as year. early finish it

demand see usually quarter. So, begins of I'd quarter the second to in comes the love second -- in bulk the the

of in -- I months, couple think have better we'll overall is of we'll the where in So, indication demand. next see competitiveness a

Michael Webber

mean, about boxes Great. on now? But yields if XXXX single are where in I we right yields in of are digits new today, the just I think terms is

Victor Garcia

double very digits. say low of would end I

Michael Webber

value, your fleet and the over fleet. math average on existing Yes. XX% like little Okay. rough It looks book a just like average looks on

XXXX. around So are probably that around at you area -- saying

Victor Garcia

say yield consistent. specifics, per that's And haven't year. yield se in the thing we've seen into we I that -- doing. is last been But, it's had not the important but think we it's think the what but get I'd we're to is revenue what we expect on the investment compared want yield that as don't a I to the to decline transaction and come

Michael Webber

It's this net like find or an here. that strange ROA around spread like you don't a

Victor Garcia

Right.

Michael Webber

sure just to railcar million that the make something selling a of to of then, But in back actual on that just your opportunity interpreting re-let and walk you you the that Is is And tighten. ramp QX railcar $XX margins more when deck, Can start to you're a markets through Okay. to you and one-off? and the mentioned section, towards now how which your an chunk is do I'm finally the want I fleet. of decent maybe whether -- of where kind there of the to overall exposure of with that's process space? balance offload that kind in efforts end

Victor Garcia

will you frankly Well, think we additional said recall sense. makes I it that terms I improving if that looking and are if potentially of rates rental railcar with utilization economic call, last car sales increasing. do I say are earnings at prices it and in market the we'll at the and

-- prices. of the up steel car starting the raise of are tariffs. is manufacturers because So, Part to it if domestic are prices you

in seen the rental surcharges largest and building increase prices. really car and also cars causing strong in rates But the coming We've that's sector. So on are around tank demand tanks. for for particularly tank demand demand pretty tanks

that's interest more bringing a assets. lot from and people looking at And existing so

our lot and trading attractive sense We have question We're for we think of terms for assets. what we it at portfolio recalibrate us shares And a to some make are so, other look in have to The investment the opportunities. at our is, of that. we'll of mix. continuing where look us Does that.

And at that. are we looking so,

Michael Webber

I it right. That's will Thanks. Okay. turn All helpful. over.

Victor Garcia

you. Thank

Operator

Thank you.

Company. from line comes of question of Helane next line and Becker Our Cowen

is now line open. Your

Helane Becker

you Thanks very time. for the thank Hi, much. gentlemen

that's Can most changes of them couple you I because of kind note answered, forward of and coming small just little know over of Can thank the about just you. percentage relative I questions know was how that couple I thinking talk but last continue had been a but business other have that just, how sectors? people. to -- excited, you business, slides to of experienced some two your you could bit just in years. you going it's growth invest management I one you Just you're of know about of the maybe a the a in you

Tim Page

Sure.

XX parts think team, the the more foundation of to the the invest with a same And changes of team, really You're months to two it, right, of and stride hit and year, to marketplace, do. we now we're in place, XX been strong the think some have our way We've quarter quarter in XX%. to in still describe up just we who's in our had lot make had some infrastructure of leadership we we're in ago already have growth XXXX, of we place the compared in what in starting basis grow. that focus But think I by our revenue opportunities But business. the quality I terms the positioning growing revenue leadership a the in very for the a to we the that our the that just terms this we to the other hit of in think would on about that'll we're said our a being success starting I and to really processes, I less in infrastructure outpace stride.

Helane Becker

Okay. tank cars. And then, the was other question on I had

I just wanted there was an wondering more I'm was just that if where picked to point asset. a interest interest last there up think lot because maybe because understand a I in wasn't So, there in time And year is the little a underinvestment. of

little for when therefore, a flush thing were so could demand around people before egg came is a me. chicken one where or that the other just unprepared maybe turned out or you And it

Victor Garcia

about is cars. Sure. the market, all which probably car tank of part subsets within strongest of energy Well, the tank the let's the talk of

if the more rail lot and and big States. majors So some for for a demand on the lot can get look companies you a -- fracking that between since it cars production the And spread if tank what to oil foremost, large there's marketing there's United in refiners you result a the of crude by of can bring oil a in particularly that's pretty of the lot spread you and first at can of because is you Gulf, there as of make. Canadian what a going

And are it. to volume so, they maximize their aggressively to trying

have amount a for areas. even tank higher demand car year been to push because retrofitted to there's surcharges been bring cars. So, it been a with it implement of with are to the of to cars railcars bring was and there some an force oil cars down a accident the starting overlay those and The of on to tremendous earlier of some in enforcing railroads into demand retrofitted indicate crude the retrofitted the that -- has a shipments starting even out that

be interested even existing a of the that new So in to some meets that's regulations. people more causing car all

And don't and there's cars. have demand cars so, we particular any or the old retrofitted in

very high is a very, that at is is right and demand available now. anything really So, new

Helane Becker

return And containers, then How is, guess last interested of helpful. -- selling question about to to in containers be sale would really selling more be the That's since was respect Okay. containers? I we the strong. my like should seem with think more you

Tim Page

on basis? Actual ongoing -- an like

Helane Becker

container yes, like certain a like acquire by guess, fleet the I amount. managing you

strong the designed was that. certain about demand opportunistic Are amount. containers? or so the sell thinking You they used because I'm I guess a were for sales

Victor Garcia

Okay. We every containers. quarter always month, every selling we're consistently

maximize to older and and maximize boxes on try utilization. to dispose trying that Our want really focus we to is

as period that down and equipment to to try a becomes available, out weak slows high to demand seasonally in we'll continue we as move can. to keep utilization particularly As try

Our strategy hasn't That's on changed that. right.

around. business requires maximize underlying moving But container is during always the weak lot We're a close will or markets You case be be The management. to a always strong We're the trying markets. boxes returns. consistently of commodity. asset

can we're to units. not willing so, Customers them, units. new units, new we're we sell prefer wedded buy always to And

we're redeploy So, always capital. to looking

fleet. older is on of idle, we'll need out be with the equipment we very that to if it equipment the to get do focused what So,

Helane Becker

you one sneaky I that just XPO And benefit then Okay. question said client. segment in a that Amazon think logistics last here. last they know that? will your Do as from lost week

Victor Garcia

but focused we That's large would We're think not up volume developed don't to customers affect of Amazon, think it -- on will that like for from the business. like some business larger I I can we our really players. XPO's will an pick more Amazon.

at think all. So, I business don't our it'll affect

Helane Becker

Well, thanks Have Victor. nice Great. a evening. Okay.

Victor Garcia

Thank you.

Operator

you. Thank

from Our question comes Brown Michael of line of the next KBW.

Your now open. is line

Michael Brown

Tim. evening. and Good Victor Hi,

Victor Garcia

Good evening.

Michael Brown

Just want so a view touch really there on to on the in the tariffs impact more, little in any was tariffs bit the quarter. your

the So, was forward activity quarter third of activity of then, on any the in pulled in activity quarter your tariffs? forward being the into actually you customers fourth advance pull the from there an any impact And pull X? advance to in did increase experience an XX% experience March

Victor Garcia

quarter. we I on into continue fourth would say we And saw have quarter. -- we certainly saw the third a very that strong

in as lot prepared of remarks part, haven't I equipment we come seen said most my the back. For a

Normally, points fraction has We've overall of been would that. seen strong. pretty to demand two one a decline in percentage we utilization. So, expect

in even today middle utilized. seasonal XX.X% And middle to of keeping start our the is I uptick utilization we're So, remains a this decline a we still pull February, some we underlying -- as pull demand getting So forward seen to that of occurring. forward. even to strong whether point it's that the we've indicated or was overall by economic the so far, the not year, expect we're world this or of element market. be There enough has But we've strength April, as have strong seen think economy equipment

natural And so if that there forward was forward will of a trade. even pull be a because prior pull

has a out But global this it negotiations at I dictate effect. growth those I think think more March on there X, that'll demand. the how trade Now the could some play do with out. -- of point to played short-term And be has lot that

Michael Brown

or you with in there the tariffs, uncertainty the are they a dialogue has customers conversations be is that of kind all about market maybe could course kind continues -- the little just shifted your changed over XXXX? to in add from at how then, And their businesses out of color the adjusting of quarter, has

Victor Garcia

No.

at but of think I think U.S. large been don't bit cautiously be a in outlook But continues it's optimistic change a see, because of a redeliveries lot we their there seen cautiously new there's Again, haven't I And same that we a really to wait and of with a amount think them. a has seen strong very interact haven't what inquiry. little how optimistic. the I and is marked we economy. of time,

still it as they're think looking a year are a the I so, to expectations for this continue year to year. at growth And think I be growth and

Michael Brown

Thanks. to side. about Okay. the gears just talk And want then, and shift funding

rate it debt due fixed the slightly in like the So, lower the could looks from proportion come sounds declined in to that railcar sales your quarter XX%. those first like investment debt It assets. levels levels down to a

if you How hikes. kind your and into that couple Fed's debt fixed pass with of that are out in proportion So, rate you we XXXX? thinking being and look funding about potentially with mix the of floating down as

Victor Garcia

would rate middle saw you paying would by to a we lower basis. rate rate And those the fixed an were early be quarter, Well, would paying opportunity lot a of --we that passed four fixed at Fed be rate floating looking of part of to And hikes hikes. as a a basis on about the on as be rate look this I getting year we rate we fourth into debt. rate be the was effectively think if convert there floating additional debt the back to talk much

fixed aggressively made decision switch And rate. floating to so, from we to rate more

now a XX% year we a a the I in point our for In and to we of we more at terms past in normalized look be us stretching would cost-effective at think to needs out we're environment, good we think if some I on position where XX% closer XX% to are. probably And we'll fixed where we're of comfortable investment comfortable that like in likely the we're But said hedged to fixed see position financing. financing, funding XX%. of right. course a I -- do with position I've say and year lot are. one up XX:XX feel where XX% this. barring But and a the I earlier that this maturities think is rate goes in and to we're we're

Tim Page

the if through percent because every make think principal anything a on comes what flow we bit all the facility. creep those payments when make I rate floating out of rate payments floating rate will And fixed do basically we we of isn't month. cash raised facilities little a don't up operating

fixed natural there unless place. decrease rate facilities a rate we in put So, funding is new in fixed

Michael Brown

It's helpful.

Tim Page

lead would interest slightly costs. to lower then Which

Victor Garcia

impact the year. big moving look we've Yes. interest if seen It's it we do over to last Fed at I increases the course floating of terms roll mean where rates with had of costs, a higher forward up. had that in we a of

grow results So, were we we actually overall results interest rates. able despite look our -- when ongoing and the to we to maintain effort by at our an Fed increase

forward. company risk think through and move we'll well we've look the continue mitigate that So, to and how interest best I managed to rate at

Michael Brown

my Certainly, it you, taking Thank should from path there. an guys, be forward for questions. interesting

Victor Garcia

you. Thank

Operator

Thank Our line of next comes from you. Compass Scott [Operator of Valentin Point. the question Instructions]

open. is now line Your

Scott Valentin

gentlemen. before Good markets. your of strong guess container most afternoon kind I in prices operator. Thanks Victor, were

you down Do being that do bit maybe think that think you a or seasonal supply think little there's just Asia a was issue -- you weaker. economically? I have in as slump

Victor Garcia

get back particularly China. just tries Everybody to equipment to a It's Asia issue. their supply demand

tends where that's So, congregate. it to

there's more there. so, And competition

But market So, the the be world of. move. able move a around be equipment great or we weakens, to expect us significant and for out as we're would that place a the normally to it's place softest see we to where selling the more

to the look the where we will equipment the we our best can price think try if back equipment But, to to China we'll be So, markets we possible get in and to to focus markets. in those particular. continue move

Scott Valentin

think Okay. used but prices prices remain or will boxes new box $XXXX, fall, prices box to level you And is box box you guess back mentioned then, $XXXX seems strong. now? that right where the foresee prices new narrowing the increasing used on do like prices margin you around I say

Victor Garcia

transportation that still now, be prices new demand of secondary on item are a high much to that will as to think terms markets were I prices overall new to is we biggest is demand ground is strong. price in the further will will firm. lot the think we be the equipment box If available -- biggest continue the what decline of prices -- is underserved container costs they going utilization be If expect China. lot further factor available still XXs a remains the think and the of would throughout There's of the are. is are in actually are of a the and we I natural going fairly so where availability be But in to pull from because be for have that'll factor here biggest down from fleet. utilization equipment the globe. But how the and containers

proposition local a people price And a to is value the so, asset. as the having unit of how lot

Scott Valentin

small of you in one problems. question at final changes some any media the any Europe Okay. list seeing And smaller been reports all? then, running in there's carriers into I container or in that guess carriers, Are just financial base watch your about China customer and

Victor Garcia

think been in I always players smaller Asia. of regional some particularly Well, about these we've cautious

we haven't about we in tariff have don't result when the of So, as not watch some discussions. we to slowdown any, occurring do we particularly closely watch closely, and these hear exposed do we but that's say them of that as a them China been

closely. about and regional closely. do to more to But them watching we're business say watch probably exposure We than with would is most conservative we tried something it do that we those conservative in it. So, I some we're have be players. we

Scott Valentin

Thanks very Okay. much. right. All

Victor Garcia

you. Thank

Operator

you. Thank

next Blair. comes Brian follow-up from a of Our line question William the from Hogan of

open. now is line Your

Brian Hogan

points for logistics profit gross the trend is expect margin actually, was reasons past the on declining basis What down mean, XXX what has the been I year-over-year business you depressed quarters, it is then? was gross in it margin or several and do Question in and XQ. for

Victor Garcia

stable. at margin you mix changed mixed the has actually been gross What's amongst the the the look is different businesses. services, If of margin business, the

margin what is an our math in business, just intermodal brokerage gross Xx as way the the there So in it example, business works. the our is

certain is a business for significant brokerage there. intermodal there it the Xx our very where a the last We've that We and as fantastic. intermodal in margin the getting relative But will business. growth is in opportunity based the much was in amount business out think more to We on growth there's as increase each had year. have works profit consistent is there brokerage business There way of which margin that percentage as is basis move. on price in

marketplace it's the overall we So, would the to where margins percentage margin XXXX of to it the higher be -- our slightly a expect some mix our in wouldn't brokerage just XXXX not that the changing improvement will company because again in in are intermodal. increasing, and as compared consolidated be be will than

Brian Hogan

business then, the And and they that is utilization other halo Sure. container businesses? benefiting actually effects having business are those business, the I rail mean of on

Victor Garcia

logistics. significant utilization improvement that point. have this having point. opportunities level of I doors the other wouldn't opening of to at with But in our say at I groups. do say this in There cross say for it's terms would I wouldn't been

Brian Hogan

your be conversation that over conversations then towards container of And for environment? would describe environment it your irrational business, would committed out changed has you fleets, competitive with going -- is and And is more Sure. just like are leaning how to three customers, with or how to leasing the follow-up their -- everybody being the then, there they back that time? anybody the the

Victor Garcia

last speaking, as by we've greater -- you shipping lengthening greater you years proportion lines So, seen kind greater or of the seen leases. as we've the a seen a our to generally of lease. in interest in results interest few And

of a the It's of leasing. requirements the competitiveness and more capital overall on dependence there is so, of lines, And the shipping the leasing combination community.

we And of are year. but aggressively are the proportion it quarter the were deals larger seeing So, our like than the not smaller earlier in last investment pursued feels competitive being coming last did today, of from landscape, more first said they year. aggressively like it any I are community. much leasing There that very the

Brian Hogan

for right. All you time. Thank your Sure.

Victor Garcia

Thanks Brian.

Operator

Victor CEO call you. questions this Garcia, further time. Thank President now for And to over no the closing Mr. showing turn I'm remarks. and at I'll

Victor Garcia

our Just want full to for just our you fourth Thank call. reporting weeks say in first XXXX earnings look quarter you. to a quarter and few We thank forward joining results. year everyone

Operator

participating in today's gentlemen, This conference. thank you concludes and Ladies for today's program.

good a Everyone all day. You disconnect. may have

CAI International (CAI) 20 Feb 192018 Q4 Earnings call transcript