GBX - Earnings call transcript Q1 2019 | The Greenbrier Companies, Inc.

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Operator

Hello, and welcome to The Greenbrier Companies First Quarter of Fiscal Year 2019 Earnings Conference Call.

Following today's presentation, we will conduct a question-and-answer session. Each analyst should limit themselves to only two questions. Until that time, all lines will be in a listen-only mode. At the request of The Greenbrier Companies, this conference call is being recorded for instant replay purposes. would turn I to conference time, Mr. this like the to over At

President Roberts, Treasurer. Roberts, and Justin Vice Mr. you begin. may

Justin Roberts

fiscal for Rosy. Chairman Greenbrier's you, Furman; our today's Good everyone. I XXXX quarter call, And On conference Vice joined and Tekorius, CEO, the and Greenbrier’s provide Thank am Officer. Today, Financial call. Executive welcome morning, Chief officer; Adrian and Chief XXXX. and fiscal Operating Lorie in quarter first Downes, will business acting results by to President discuss and an the outlook Senior Vice Bill President for they

Following up the introductory call we our will remarks, for open questions.

slide issued additional discussed Matters on discussion the today’s made addition the Greenbrier’s will in key from of the our conference on Reform be we to and on differ statements In in describe statements forward-looking Throughout those cause Greenbrier. of call Securities of which behalf could or the today, includes can that meaning materially this expressed financial press within of our any some actual and presentation information Private factors beyond supplemental the data, forward-looking release website. Litigation metrics to include XXXX. by XXXX Act in results morning, important found

receive Over and and your of we input. small. the last opportunity have large meet several several our We the shareholders, months, met with to always appreciate

away. term. and turn you to of and useful support Your XXXX, engagement call for now, long short provides direction remain take feedback collogues. In And Bill, I’ll continued the committed Greenbrier’s as Greenbrier. your manage Thank it my active over in we we transparency. full shareholder the to business

Bill Furman

well XXXX are happy Greenbrier’s fiscal and by strong morning New Thank the you, has Good and start. we Justin. encouraged Year. begun

XXXX Having estimates quarter, own fiscal for the rest year. and Our all of revenue, with Street’s we that provided and EPS consistent the looks the our have strong completed guidance EBITDA consensus exceeded promising. first quarter first

momentum during half and gain the year. deliveries railcar expect of second towards to We the

business our railroad new market; will of morning, part in in review; know our and Lorie insights and leg an into call, Lorie assumed by pipeline I on additional responsibilities as on This provide we Adrian conditions Downes last strategy market begin the will many As performance current of discussing year. see our you this August of the and Tekorius this side the of cover and Adrian of results. quarter's the the operational details will of

units. and total units total robust. confidence from the for we for During all railcar including XX% quarter, railcar were year, delivered units reinforcing provides broad and markets received approximately up for tank railcars, quarter which activity America, received the quarter Order approximately markets cars, types for our remains first importance Greenbrier. the about were railcar X,XXX our for X,XXX of railcar in orders first automotive-carrying nearly of order orders and of Orders from Notably, the XXXX. basis received in orders a outside our international the North to This a intermodal of After XX% double-stack, X,XXX is new range we of cars. additional first X,XXX. fiscal quarter-end, momentum quarter highlights of about last

of other new strive do as XX% critical Brazil estimated in a Cooperation our of railcars billion. with already booking Greenbrier’s to expect on the minutes. sequentially and production into Council are from be booked as and execution performance nations firm as Opportunities With and November XXXX slightly orders of backlog units, fiscal Europe touch the an manufacturing $X.X orders, we emerge, will value we and progresses over year. time targets will and Gulf year XX from come build XXXX. our diversified as Saudi to the We international significant to continue growth plan Eurasia. fiscal deliver XX,XXX the Lorie Arabia internationally achieve up few over totaled of for to to with Greenbrier But,

system workforce U.S. our economy leaders global and will and and manufacturing job We good. is highly done. economic skilled are the are strong. confident get is policy our Fiscal fundamentals that manufacturing expansionary very

Just an that monetary economists last on jobs prices. calm. night, of after Fed interest market. policy, be become December, and have the volatile reduced this might exceeding XXX,XXX the that significantly off period rate abnormally a might it's Despite happens, times reduced stock The group inflation its economy that to ease If give suggested decent in of more all markets expectations. in oil and rates confidence due extended States, that will likely to added United

exception to this. as In weeks, grow to trade international shareholder factors America continue talent read, grow future And we us that from I’ve to of stock North four, shutdown, tea we conscious at next American for and both pipeline; been an our We aggressively forces. extend and in two, in robust deploy We leaves North contributing of maintain believe several efficiently our to scale we partial businesses, give not said, scale; federal been in will the existing consideration the our to at the and to to new of Greenbrier value. a recent strategy, through are strong. years the of talent government capital markets. can fundamentals expand four-pillar worsening international hope base include in railcar one, markets; these conflicts three, its markets, to other advance quite the continues looks have affected. And Our that has and we business. potentially the particularly affirm all and to core

Lorie? for year quarter, over Adrian. sorry, during then strategy of Greenbrier -- will now the is our As first and strong comments demonstrates, on operation further the turn propelling on success to a will And Justin Lorie toward the and our performance I success. operational this comments quarter introduce I'm who for

Lorie Tekorius

It’s our New our to an briefly to again, outlook. forward looking I’ll great we’re the very Bill. XXXX. on operating the our environment some morning, integrated discuss participation address perform details well. detail continues more because to and everyone. a exciting before you, Year. will model the financial and Good business operations appreciate provide Adrian Thank definitely time welcome quarter your to And our of We

to our feedback carriers. develop hoppers, customer successfully Our strategy commercial team product protecting and capitalizing specialty market such group just closely markets. executing that to launch automotive tank Commercial incorporate cutting and on edge car very with working trends as Bill core is and American the our while products manufacturing innovative cars, North reviewed, enhancing offerings our engineering particularly is into and grain

to carloads the first demand. X.X% XXXX industry and leading rail America Total North and the continues activity, intermodal loaded other backlog according traffic to see In included order strong XXXX XX petroleum railcar in XXXX in approached from our positive rail Intermodal up million for U.S. XXXX, healthy weeks AAR. including XX set addition indicators volumes and levels, in record chemicals. to commodities a products for annual of new

XXXX. side, XX,XXX type FTR railcar forecast to XX,XXX operating small continued downward forecast also since levels over a railcar total deliveries deliveries despite railcar railroad of Demand units and uptick industry June a strong storage December, in peaking broader units. above analyst the They have for growth XXXX. is group the XXXX On XX% in industry in in in consistently trended XXXX

challenging direction. is in Brazil Now, markets. our has environment right a the moving but the economy trending been to overseas

discussions backlog Our be We of up operations rail provides customers and with is when from the there visibility responsive demand more long-term the that are key benefit approval improving In concessions. a for are strong. of poised Europe, orders. to a with government year in than picks we’re market rail and railcar

to further with our We pursue facilities our Romanian operational facilities. integration Polish continue improvements at and

announced nations to from set in actions our Saudi in We largest venture Waad Arabia profitability. region. and first Industrial phase bodes of first phosphate Council. of for producers of November, world. In X railcar Saudi the become which the Opportunities one Presently, we the boost of in in in the demand very Cooperation are of the inaugurated the well Gulf Salman has continue October. see the rail X% we are great reserve our All Kingdom emerge Arabia phosphate new received is railcar of to of to across formalizing world’s King in these of The markets promise Al-Shamal joint in City details this XXXX. overall that expected order the

American and wise our continue we robust which prioritize markets in in position talent our core mentioned, deployment our current to investments our position expanding our investments reward Internally, the people. at while scale. base for pipeline future Company at approach our in Bill profitability. climate to growth And and in operations we maintaining talent growth expansion achieve the internationally. through North our supports these thoughtful investments will growing the scale includes As of a business capital will addition strategy, This believe and to

on goals. Our strategy to is deliver helping our us

key view to generation. and backlog of cash flow earnings continue We a as future indicator

Our quarter. last visibility, through us and into to guidance announced XXXX. are And clear this backlog we with XXXX our gives affirm visibility financial able

about for work year to our but what and holds confidence a excited you. future Greenbrier. our the have in continue hard I lot over the be of for We accomplish it I'll to ahead have turn Adrian, to strong goals team creative

Adrian Downes

of units on XXXX across guidance. a continued of website. margin Thank Aggregate the metrics our on few Quarterly and international with American release of information million Highlights in guidance I'll XX% XX% $X.XX from provide EBITDA the press information orders was you, types market. of the our and adjusted Lorie. at were share million, X,XXX Orders per our in over and $XXX supplemental provided million, then FY totaled on morning, outside be to first the in $XXX.X October. or customers. delivered for gross with quarter earnings $XX.X of railcar on in a everyone. available our line quarter units are X,XXX and And XX% Over activity. include highlights railcar good of net financial broad-based of the slides million. Orders $XX first additional quarter revenue provide valued North variety

higher of production production expand a general of the low in year product when of the orders course an of purpose to product be mix impacted the mix, activity, As the taken a and half activity. the hold. the in margins digits, by will longer over syndication pricing mid-teens of levels will runs reminder, environment as more rates Margins combination uninterrupted including the the and take the first the benefit increased competitive double timing syndication were improving

to allocation confident continue This value employed. long-term We capital in scale. million by on the return our strength We and to us business growing history emphasizes grow strategy remain of $XXX be our our on shareholder continue sheet balance approach to generation including our exceed capital cash objective create flow position well that and strategic at will cash flexibility to focused supported that balances believe support to and steady announced dividend The the results, last business guidance. per current and diluted Maxion quarterly quarterly billion; to dividend. our dividend revenue share to consecutive XXXX affirming about Deliveries today includes increases is X,XXX XX,XXX on be units XX,XXX we which over of will in units Brazil; fiscal are from XXth $X Greenbrier years. several $X.XX exceed per $X.XX. approximately Based earnings our share $X.XX

two of see earnings about We the XX% deliveries about thirds in continue XXXX. of of our second and Greenbrier’s half to

market-driven. more guidance fiscal rarely in have kind we operating is have XXXX least we’re flow be the of backlog. than versus we high today this year, of operational history affirming this at to this visibility guidance more are $XXX the in for our expect Very our nature in in cash We XX% early risks because our had to million. confidence Further, meaning in production XXXX,

add in back guidance, fiscal activity additional to million the of approximately can the investments G&A XXXX million, and expected repair, the from $XXX year, provide million and the parts the expense prior fleet sales. in given million and increased enhancements of million. of our proceeds we the support the of wheels, production be working of characterized with to the these to intend our about million modestly $XXX which investments are expenditures ramp-up our in we Combined about breakeven of rebalance of long-term first $XXX positive facilities. $XX million, reflecting million to half Capital $XX be in from build, continue with to expected XXXX, our million expected net manufacturing continue to on repair half $XX be in affiliates support and activity, business capital by $XXX sale expected year be half of to activity to to to to our earnings the Depreciation railcar existing our back will million. syndication Similar capital will higher our amortization and includes fleet earnings and As be $XXX unconsolidated to lease fleet including will about is XXXX. return expect to levels to business, on expenditures year. from $XX manufacturing $XX trajectory gains

interest XXXX around expect attributable $XX be We earnings million. to to non-controlling

about Our consolidated expected to tax XX%. rate for be XXXX is

Our of earnings Rosy? items. rates we’ll of it up fiscal fluctuate and mix now, will quarter due other the open and our for This financial to geographic first concludes Greenbrier’s And questions. successful report XXXX. discreet

Operator

Instructions] [Operator is question Company. Stephens line Brian Our the first queue of from from on coming Colley

Your line is open. now

Brian Colley

happy and morning guys. Good New Year,

favorable just that how if trended kind competitive stand of has pricing unfavorable about there exceeding talk as railcar So, car could or types sequentially? new you any And dynamics? either out any guys were

Bill Furman

in that has see pricing. effect pricing I so in think backlog look, from we comparing has improved fact and will that sequentially, demand lag mid improved, our stronger a last year, to

careful market I is across with strengthened, rail board, demand a on this or last depending the oil that the is opinion to by not of two. my rail weakened of continue could concluding particularly oil lot think oil one the in what over be the in overall disconnected about tank has quarter car sector, that has from it. the degree but there But general, in happens by

Brian Colley

that. Got buybacks sheet the mentioned then, is the thinking about the profile favorable. stock, about we pretty the thinking just some priorities, be this your for cash and on be great volatile How flow shape deployment? list thinking you with And along Thanks should market should in capital of it. year about but balance just

Lorie Tekorius

stock we management strategic is a those to opportunities Director a to takes Board how return seeing the out well investment The to and buybacks, we expanded $X.XX in we per consecutive Brian. as morning, balanced a why of return $XXX as deploy lot good XXXX XXth capital. where Good including Board but share. consider is increased million to team and Sure. now, capital the which of ways that can on approach believe yesterday areas, our we shareholders just the we're buyback authorization our our proving it of dividend do Right

Bill Furman

that in is reasonable X.X%, a stock just decline I spot I’d add on there that the And now market, suppose which at is our yield. bright the to yield the a is

returns last kinds focused return our in a the Embedded very night at investment very on achieved of rates It's Board has meeting extensively manufacturing. in that the compete and that the are related we story on have reviewed yesterday very also experience Greenbrier historically. time we We and ROIC difficult is in the other to groups. and and over capital, with our total manufacturing sensational on ROIC return and our capital

of difficult the and build have kinds expand expect and we as the ones are North returns America, that we in strength world-class core facilities in will manufacturing I it be So, businesses. internationally, our compete with in with to

looking shareholder return. shareholder we regularly at been dividends value, have are continuously and we However, reviewing total

single the So, look we will every are things at quarter. that these

Operator

Cowen queue question from Matt Elkott coming is Company. from & on next Our

Your line now open. is

Matt Elkott

talk Can December end the has inquiry about order and and you fiscal trended activity post the how guys quarter’s January? the in --

Bill Furman

just conversation Lorie of our with senior had morning -- officers. commercial our this a one

So, I'm her that going to let question. answer

Lorie Tekorius

we’ve that Sure. order excited but Bill, actually, you don’t really always XX. about the shared, which November are seen activity your remarks this, And we prepared give we in post

not And -- with North our have orders demand. as least falloff we’re at really inquires we're activities, excited We seeing seen any really railcars. we've who as oversees received talking in not for activities X,XXX we're broad-based well American our Brazilian Comstock, and Brian

Bill Furman

Yes.

of at there's an next activity obviously forecast XXXX. much in look four that's years, than the for If level greater the expected you

that expected. should the we’re We about pollyannaish maybe and I general -- particularly in optimistic know I very so, we’re people think think be And markets we’re investing. but America where North

been hasn’t We if conversations the our really told But will change flare people pulled think it back. certainly and we I -- I’ve I’ve the should now viewpoint. right in,

quarters we that this still we like of for We’re X,XXX in maintaining car the is backlog not this market think at our car type doable. quarter. but very XX,XXX objective a looking And have

Matt Elkott

And into assumptions affirmed then, that unchanged. the guidance. seems like, know you largely I -- you the remained go guidance, to your switching EPS guidance your it back have even

I say down? it foreign missed foreign that because low if trend exchange line exchange drove expect did about it anything the seemed the we but it, How it Sorry it and you and pretty was quarter. the was component to interest -- in should that

Adrian Downes

Yes, exchange you’ll that’s it -- so today, if XX-Q exchange will foreign out and foreign the to filed you filed break at our relatively between the two quarter. the interest see component look line, be low the we separately. was was and in elements those want today in But

Justin Roberts

this Matt, is Justin.

a expense on quarter, this about what of $X Just typically and then per point. million runs the at is part interest our forward look FX basis, fluctuations it causes

that’s good from So, a rate that kind perspective. of run

Lorie Tekorius

And say the the I -- and we’ve once months adjust for the take lot opportunity And for more you review can entire item overall is one of that we a income downs. there’s guidance year statement, didn’t have go. reason appreciate to got nine line ups you to the would

we holistic affirmed a the as So, our guidance. of view year,

Bill Furman

the now. that’s next us each execution operating. we manufacturing -- It’s not full and The venues the manufacturing. got this into we’re first points activity another that of points, the Adrian in in than quarter the is for seems the quarter is has don’t has market all was attention for Just There’s for has think believe. of which part year the higher this year. But, we right our rate would year. highlighted And the our of as each issue to execution be a tax the on and out. year This incur point year, Lorie in and number of

Matt Elkott

And did say in going the be that XX% guys first so to for in going of half -- I full the earnings year wrong full the about that? half, are to that about you are or year, is first be earnings or XX% am the

Adrian Downes

in the half and XX% in XX% back first Yes, half. the

Matt Elkott

are the still gains weighted, net And going Okay. first then, be to half guess? I

Justin Roberts

-- weighted be not I year little with it half time of a hard the it’s -- half the It’s going have than $XX first full maybe about more million probably XX% about is over would and for quite about much and in to XX-XX that saying actually half.

Bill Furman

some For also. on granular call can questions, follow-up kind more of these we these our hit of

Matt Elkott

Yes.

absolutely. just a maybe the earnings. to was of the quarter I quarter the sure, get Okay, the of It trying year looks lowest sense maybe cadence of second potentially.

Bill Furman

would It at are questions or we through that QX our and line say QX of possibly the I said, specific from I say definitely your now. But down we quarters we the be more yes, year. And would where walk can of earning will stronger would like in some be following.

Operator

Ariel from coming is Rosa question from Merrill of Bank Lynch. next Our America

Your line is now open.

Ariel Rosa

XXXX? say those are side? the impacted orders mostly just in that orders half is into And orders first low those step industrial that manufacturing delivered wanted so, second margins taken. competitive Adrian being assume would move orders so margin, was to I see of see there teens were likely safe move the that mentioned a maybe were if know on it environment the So, taken half as first Could taken bit when mid ‘XX in being being up in XXXX upper confirm, to don’t we environment? or question, the into by back you those I were to when now negatively a into, to in you the current

Justin Roberts

say all in half someone has and is at still can wherever I of a Ariel, and that XXXX, even competitive it, it’s starting off go modestly it’s correct been but I back Justin, competitive But, base. the pricing very ‘XX, shot So, through I'll getting XXXX, me a better this environment. would take then pricing else

we the potentially through probably in we improve range. seeing order calendar back calendar of improvements now this will the are this exit of activity the in that half And and year, ‘XX. And year. late are Margins taken in earlier flow delivering half in around year so, will on will the mid-teens was pricing XXXX, that that back we

Ariel Rosa

And robust it then, thus activity, this talk far? just the -- could little pretty for but fiscal is what's bit given so, to a order about maybe ‘XX just talking about booked early be you

Lorie Tekorius

our we’ve say, would I nine again, got months go XXXX. fiscal are we -- for to yet

are to little be it a our fluid guidance share plans you sort that but developing We bit XXXX, with at for guys definitely production of point. will too this

Bill Furman

Yes.

mentioned fiscal Lorie think booking not I it, calendar this earlier, we're amount prepared and disclose XXXX said But, to at orders we XXXX. the point. are we As into

the it revisit or will next quarter in We so.

Ariel Rosa

question in up continue? what's then, And There was the revenue. Is Is or a little me. expected driving that that something behind as for of just bit of percent step last a SG&A there a that unique number? to

Adrian Downes

thing one repair is think consolidated. you now that might is I business see

that repair line seeing. has us. in shown you That’s not are growth SG&A but probably that’s So, our increase to surprise the a

Ariel Rosa

expected it it’s sounds continue And like? to then,

Adrian Downes

Yes.

Lorie Tekorius

we rate but I stepping move year. as think run the should basis, the a dollars, revenue our we through talked On up have be about

math the on to a revenue say G&A a -- would of percentage down. going as go that is Yes. So,

Operator

question on next Allison from from Wells queue is Fargo. Poliniak-Cusic Our coming

Your now line open. is

Allison Poliniak-Cusic

thing, expecting or something more should pressure to I the itself QX inefficiencies in business, line we the repair is still? in that write be on that wheel volume first starts guess, and that the

Lorie Tekorius

talking Allison, and sorry, are parts? were our aftermarket repair you about you little muddled, I’m volume business wheel, and And bit

Allison Poliniak-Cusic

the around Yes margins that. with

Sorry.

Lorie Tekorius

business say our works of weather I aftermarket side of the talked We a business. depending that Sure. be can have winter that quarter and quarter impact that on would better that sometimes often for the benefit second conditions. can about the

every That’s focused are a joint GBW get Greenbrier into going We particularly that to lot little good venture. the in this that a on that’s of that the improve focused but particularly -- doing back not the to seen me then, profitability and we place repair bad And network, that quarter. plant bit aware brought side, post not they’ve team the network. of is across on the something thus overnight, got and to shops group would plan on around turned dissolution that that’s XX I this better far weather have a reports now we this our

Bill Furman

add one earnings that from just goals last unit. talked about we the was of Can Lorie I reduce our drag year to on that from as

directional there. making in And we expect definitely the to We’re our directional of improvement year. solid half real second have progress very improvement,

Allison Poliniak-Cusic

And the Great. second there a tariff something to balance then the slower a QX, that thinking timing QX, starts where volumes, in indication obviously about up higher. issue should little is went sheet be in that deliver just Is on cars else that we there?

Bill Furman

just Yes, timing Allison, issue. it is a

Operator

Next Brooklier from Buckingham Research. Matt question comes from

Your line open. is now

Matt Brooklier

a question So, to respect manufacturing margins. gross just your with

a coming Do think improve I think there for from are bit of things to I’m your potential the a manufacturing thoughts you the margin bit? for this question margins a gross we little in the way quarter. similar little profit What here? was sequential is maybe on in call. trying get in kind a anticipate of different kind if But, asked just to a earlier sense direction

Bill Furman

probably Matt, So, we’re for at a change. it is in where question. a as QX be much opportunity line and in to pretty with And little QX great movement expect our production QX it’s that with think we there we improvement more now but

of year, of it’s about of the positioning think execution. the you the year us If back first half half

we going QX, really exit So, into in improvement we as QX the expect starting will year. to see

Matt Brooklier

in expect how give it there's marine terms Okay. then, a contribution color little in but bit your in That’s talked just prepared for what to was think revenue maybe the if quarter, terms that any I you of could much you in of And in been change business XXXX? of fiscal helpful. and if then don’t you remarks

Lorie Tekorius

in quarter say revenue was would million. I $XX the about So,

barge a takes on of ‘XX. it fiscal through here ever to going be will quarter. don’t -- steady such in because activity of that We fairly kind barge expect ramping I we just tremendous facility that lot up We overhead. built; are absorbs a to we have the be largest Oregon, coming Portland, probably a workforce, some large of do our It’s building lot Gunderson this we’ll over think to benefit

Operator

Next question Milby Seaport from comes from Global. Willard

Your is open. line now

Willard Milby

last From about talk bump levels improved cars do new data. is are and where the obviously we you to what orders? driving levels you the storage, storage in what storage of in increasing is year-over-year recent much but to I wanted start a at bit little for the the think months sequential and think concerning point lift should that two sitting,

Bill Furman

December I trend. that has had as would to saw to not worse the but what lag, do. some about velocity effects There's in railroading also in the is are what goes answer seasonality mixed. far make so and precision to that into very establish simply of on the as enough is data going we a railroads knock lot is literature say And speculation It that is system concerned far -- there the this.

but something closely. overall at for out is Jury how So, affects that been on year and the whole watch as I we're just year. I very very, definitely But, far down would railroading, is looked it is have watch we sequencing as we say, very to think we have to storage, going wait. the precision closely. What it's car

Willard Milby

of on storage thumb is any or rule of really it cycle dependent? really there is kind levels And

Lorie Tekorius

cycle I it's dependent. would fairly say,

level even one that will come so, I there the storage seasonality. ended up and always really think of some and/or I going out market during of yes, interesting never really storage be was a in things probably that and is being to think cars storage of that is robust cars -- that

Bill Furman

Yes.

demand, or in cycle cars not eventually be system that's peak structural and are for strapped. a storage the are Just worked will they out of that simply of or demand frictional level there’s like peak unemployment, and used structural or peak

XX data. important just the point, mean the look that the From it's of mix fleet at So, the of might whole you'll into to I it’s that And given of the that railcars look demand. a it's mix to just complicated data composition opposed the type as see that data opposed to important kinds different to of vary. time-to-time go at single as that point.

Willard Milby

now? you when know the orders, similarly and ended on think level when the are that that rates kind there've any X,XXX order new trending been at inquiries here, firm activity if the inquiries been the the of after had you change getting are similar orders there? on And quarters couple I follow-through mentioned past we've about the a orders or new still I you is that through ratio of inquiries orders, you seeing or or firm at following if quarter I curious of the and look to but was

Bill Furman

driving Lorie expressed, economic inquiry from continues chatter and circumstances are railcars people blah, factors or and haven't because lease lot carry blah, just to on need freight, on do as The specific effect freight? do to different rate and specific of blah. they it be we cars the cars. of buy knock There they And uncertainties a kinds XX any about why or seen this, specific

in the the capacity of and investment in own tremendous So chemical in for fracking that. example, dependence part area, in due North been downstream development factors. The plastics, America our been has to activities, many there’s energy of

are unjacketed to are DOT-XXX. have FAST keeping coming causing at up take and other and to with railroads car tank pressure on, tank -- others deadlines out service, Act fleets in keeping and cars already, that those shippers crude look on of We chemical April that’s forces XXXX for the CPC on ethanol their XXXX going pricing in car and putting

So, has to XXXX. come out it

will certifications out. still often they And look wave certification replacing is occur, got You’ve the that at industry. hitting simply the XX-year when cars

lot all So, tank car the in there's It’s by churning driven market. crude by on a not rail. going of

important the all elements So, these of demand-side. are

it's So, extrapolate. economy to the and hard total look at very

You can at look velocity.

at all what calls. our velocity have You conference and in pretty that’s got we emphasized look to of closely

Willard Milby

hasn't but for changed buy far follow-through people couple over better looking as orders? to and through actually And the the or as last as really -- quarters worse as far following at

Lorie Tekorius

I converting would ratio not those, indicated, commercial I of as a and into we get say we statement. to of a want that’s orders, inquiry It’s a fair ones the we’re converting is track actually we we’re the sense specifically that but lot certainly. our from a there’s we’ve that that team lot

us. compelled for don’t strong to with that And are inquiries to orders. just we talked feel As we have we don’t sometimes in the past chase the sense that there about backlog make have,

Bill Furman

the a you similarly pricing level Actually opinion has quarters, has two think worse. And inquiry the give was it earlier last me than Demand in and improved let in this is clear in categories not not I many last the two has quarters. improved. better very And that about XXXX, activity declined.

Operator

Capital Our last question Steve from from queue Markets. KeyBanc on is coming Barger

now is line open. Your

Steve Barger

international from up You year? operations $XXX talked year, Is you that strong operating America, year. in flow being about North cash this operating cash million seeing nice from contributors all and free operating step coming flow improvements this and the to or are syndication last

Justin Roberts

production be I delivery will would the that say that’s majority increases and our of majority of generated America because will North be the it where in occurring.

Steve Barger

Are flow? to cash seeing free investments you those contributing international

Justin Roberts

very to after at is through know Europe. head statement. it’s so performing you into the light we they’re your is volatile actually cycle don't say point positive some providing I of in in for we there. you ultimately Europe on would improved original -- point, -- back a capital improving and have as have since are that expected flow as modest in is Brazil in you getting an and the cycle. consolidate build it, operating modestly a times doesn’t improvement of working But basis that America flow little watching financial a North this bit, long, But cash lot you space it still with now it our strength performance at

Lorie Tekorius

at that. you mean, where what That Difficulty] to think there is of I be being pillar on that markets market, growth business. be add [Technical tremendous growth vast look majority the international the of Greenbrier’s do definite just to we we will said, America North freight [Technical makes have I'll a if rail going opportunities And Difficulty] worldwide

Operator

Instructions] [Operator

Lorie Tekorius

Sorry for to call the there. disruption the

not emerging further pay them activities a to are rail transportation. time, very was us Greenbrier’s those vast but Just to in remarks I to we near does are come. from the markets industry investing markets be of the making, probably the expansion where the little at to of This about will and encouraged in some will we in we talking the dissuade by bit American that see North off where we these opportunities conclude into years expect continue the results, investments that how freight the for international term were least and they of but majority take

Justin Roberts

I afternoon. out actually to of we annual was this add, shareholders Board And our meeting are of light running in and going meeting time

and any So, meeting. X Mr. also time Barger who for a unable was today are follow going I And point. Pacific individual shareholders queue then, this to o’clock be attention webcasting today. question the everyone’s will our last questioner get at were to our in but we asked you up much thank and with at very

and we So, success. please should technological join. dial better have And in

Lorie Tekorius

Year. New Happy everyone. you, Thank

Operator

That concludes all today's conference. joining. Thank you for

may disconnect. You now

The Greenbrier Companies, Inc. (GBX) 9 Jan 192019 Q1 Earnings call transcript