GBX - Earnings call transcript Q1 2021 | The Greenbrier Companies, Inc.

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Operator

Good morning. Hello and welcome to The Greenbrier Companies' First Quarter of Fiscal 2021 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. The instant this replay of being call request for recorded purposes. the Greenbrier conference Companies, is At At this time, conference over I would like Mr. to to turn the

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

Justin Roberts

President morning you performance quarter Operating Lorie I Chief Tekorius, Bill an first XXXX and am everyone Thank by fiscal Senior and Good priorities. and New Adrian Chairman to on of today’s Year. On update call. They Chief and Furman; Greenbrier’s Officer. President Officer; will near Happy Downes, conference joined term our and our Welcome call, Vice Financial CEO, Jill. and provide Greenbrier's

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

a section conference call this Matters of additional release today, hand meaning In addition today's and press of some materially discussed from our actual to Private forward-looking today on and statements Bill. forward-looking Act that of differ financial to morning, Throughout Greenbrier. of could the Litigation on the presentation the our slide Securities posted found website. IR key on of the beyond or within issued in results include expressed information metrics to are will in And will in Greenbrier's by that factors discussion I statements those any cause XXXX. it behalf important over XXXX the we made with Reform describe

Bill Furman

everyone. morning good and Justin you, Thank

and media, strong more Year. stakeholders XXXX newspaper of some it days soon now. especially hope thank like begin, can for challenges strong I’d each we ushers when see the pandemic. hope weathering and the New as all support. be in here the capable to wish the Happy our have even everyone employees normalcy will times to will. Together, emerge will of I want that Year New your yet. are are call we good Despite But not a Before and year, our the the the on better [Indiscernible]. I all later returns year last lingering in real is challenging and in of this we expectation Greenbrier I more as a

will remain workforce wellbeing of Keeping our is economy protocols. the requires health and destructive over This outcomes several board pandemic, of Regular the is and the by important in of is and as priorities. the essential and as global extensive industry forces strategic open believe our our maintaining safety management good follow. a as also very company highly of all and our first In furloughs discussed remain [ph] our and in past an markets. I in as we’re part in health the to maintained operations result businesses priority. team we continue fact, we facilities of backlog. disciplined quarters Protecting our we the the puppetted its

Our on-going practises exposure. promptly identify potential act and upon COVID-XX any

and XXs, same at week, December our COVID-XX. due factors. markets to to Our management incident with And the and degree was his are to we at a spread GIMSA on receives communities board his I'm operation. In by coordinator of Ramón risk our Ramón The at died sorry, report be rate his a weekly in was the during board enforced the of lost pandemic some in highest father Subsequently, community protocols including [Indiscernible] levels. COVID-XX. materials early rigor He COVID operate, severity. levels, no and directors. where a we both continues with of high mother pre-existing

and in we COVID-XX. one March, three XX,XXX whole. of began Greenbrier as is infections pandemic Earlier his lower in the significantly this operate the lost and difficult which family With communities we COVID-XX time. earnest a die colleagues remembering Mexico, fifth in deaths in the is Juan We’re when Greenbrier during family workforce to period this [ph] the member in than the year, and with employees him since of average Romania. from experience an rate

which to seems and fact, factories colleagues leading in reminds our means with us When they prevent operate. about In the in practices, own our stay our safer; vigilant learn to terrible go. spread industry our and the So practices will Related performance. safety observed communities health memories our we we everywhere ever are to it safety disease? to of is in this response of our COVID-XX

and the we tracking of number monthly had with November, in in safety lowest started in America injuries we fact, since America. In South injuries North metrics, zero

loss, survival. to important generate cash actions measure a our demand of are forces. health but and its growth, and in from the and solid possible Not our term Greenbrier’s performance, prior onset industry This we costs of serve continue recovery markets steps where fiscal an of vitality. only flow, weak, integral to first to the adaptability The XX We that of depths as last broader financial exposed the nearly entered the Great financial wellbeing. compelled during capacity take mid-XXXX an including in cyclical loss makes pandemic. to we from to position. operating this Despite adjusting results to quarter during reducing occurred pandemic and earlier additional executed ensure also us reported enterprise years with protect series the maintained results were first economic Greenbrier Recession. Turning time operations uniquely long the a it’s This for to flexibility that downturn the and to the Greenbrier’s strongest survival,

of a $XX million first quarter. of Greenberg core billion, Our balances achieving challenges. After we industry X the used growing reduce to ambitious our term debt in our has target liquidity some cash liquidity short in faces serious priority. for Maintaining been and

board stock competitive The just Through X%. shifts Now with dividend $XXX authority. with yield quarters goals as maintained our liquidity we management, have a our our markets which authorized a million for sheet stabilized. XX focus current advantage achieved, firmly a to this, provides Greenbrier a consecutive of balance repurchase

shareholders returned its and to has buybacks dividends. years, eight through million XXX past stock the Over Greenbrier

right half steps second strong study arrive we in the industry new rail of expected for business operating of the years and market footprint the have several when -- XXXX, robust The developments. stimulus taken nearly all XX data three capacity, snapback distribution, the suited enacted complete, will a there resulted on leadership a With are in the package the a next react to infrastructure And have very that suggests should does continents. is in Washington economy recently the the a and U.S. calendar our the sizing package in Greenbrier's administration emerging recovery, that vaccine past well we cautiously normalcy be optimistic favorable world months. federal promise spending Overall, quickly about during and and mass we're the consumer steady Congress effect. from return

pandemic the economic I've any the in and business the economies industry. and six not rely repercussions XXXX. sector. After if emerging of transportation, worldwide on months an or case, pandemic All of delay first as important rail this said linger However, expect shutdowns well friendly increase, recovery. environmentally as earlier strategic period, continue our In stall into I the strength does momentum abate, could the will and vitally

economy's in the response, coming greater fortunate broader rail gain requirements we a valued as capacity provides for base billion orders the into Greenbrier to over bellwether We load us position expect rapidly be outlook recovery visibility customer at backlog an greater improves. the months. diversified meantime, recovery. X.XX our as expand occupies industry In where the a we can

be utilization a of Recession, doing, backlog rail highlights decade In $XXX emerge footprint, build factory valued XXXX fact, of car we and a of ability rapidly orders; scale XXXX, to ever from rail however, year remarkable capacity include share investment, just and past Recent substantially for as at Back as economies much will when the class North are then. XXXX have of a heart now before. lower the believe we through cars Great sizing types, achieving -- with reducing American direct along returns. done down right at others previous are broadened We've since guide greater we before organizations leasing, rail is us million with example, railcar at than since the will than much expansion Greenbrier normalcy diversity car larger and greater XXXX our from XXXX for we in industry profitability our a the end. this had quickly regain now. of cycles experience our of capabilities we scale,

very well backlog positioned. our economic our return franchise, The current continue Our positive. more extremely term market of off five the our as scale, current Despite times. Leveraging exceeds XXXX markets than and benefits mark initiatives this outlook forces, higher recovery our long emerging to levels. and Greenbrier will Greenbrier reduction expense enters is by stronger growth

balance and cash Our We business strong sheet. positive strong position flow. a made liquidity generates

the today's We better resilience are confident and New resolve brings And addressing days we're ahead. challenges Year determination. challenge that

Lorie Now and over Tekorius President to our Operating Chief Officer.

Lorie Tekorius

the good New nearly am financial in against first the and Happy years. has Thank Year. of while morning Greenbrier fiscal industry loss noted pandemic weak you, the everyone. the the And earlier In of well XX were as spite Bill our And performance quarter operated with proud in results backdrop economy. the our challenging operational Bill. in downturn. QX, of I our

in ever to was all While back to now our responsibility which seriously have take stakeholders. financial October. agree published results report before ESG are this And than companies outlined we have more important, responsibility in their a second and

safety, employees governance and equity we're DEI, around diversity, our and world. as the inclusion on or communities engaging environment as Our well with focus ways the the

Greenbrier as Accounting times. Bill aligns which Board on report Standards website. response on our mentioned focused Our COVID-XX can with our the SASB executing or several plan be sustainable found remains

We we our stay hard employees will to work aren't continue ensure complacent, safe. and to

to essential footprint We remain evolve. flex manufacturing leading liquidity our facilities remain poised market positions remain and Our and intact. conditions our strong as --

believe current up and ensuring ramp efficiently positioned to North capacity manufacturing demand quickly for Greenbrier; we American the the is market improves. well capability when Specifically, while

cars XXX the the results. backlog on moving X.XX units delivered price The resulting was notably, of driven in cars geographies, orders orders increased XXXX discussion net for approximately million. accounted nearly quarter, product XXX for deliveries one the We ratio ending billion. our about by orders of originating book-to-bill XX% And the at time, in including at in across rail our rail Brazil. units activity quarter. all orders valued a from for received average or quarter, an in mix. XXXX of primarily XX,XXX We sequentially of sources the to valued international in sales and Now of And

the performed incurred in manufacturing global weak very XX% sequential deliveries. this both decline despite Our of performance and of margins, And environment, higher revenue group spite gross expenses X% largely at operations each protocols generating well, order to a in XXXX. despite And with efficiently. to and our and necessary safely booked our cars facilities fiscal European the rail while into recover protect internationally, building continues associated Brazilian the with our employees, activity margin both

and improved to operations weak American Now our the recovering, is base serve our volume that wheels our are have and pricing the rail helped offset in operations. traffic of while manner. and repair in declines some and the wheels these the in repair an quarter a turning focus parts and to continue shop we parts, North well-positioned fleet safe which remaining utilization Scrap volumes customer in efficient

activity respond improve when this calendar Our quickly network remains poised year. to later levels

the when Our added the under services due is to downturn quarter And under rail new to a XXX,XXX. navigate management storage. group which to in cars during of fleet time efforts fleet cars sequentially American leasing management, North about rail successful team total nearly services management XX,XXX and remarketing utilization brings with continues well, the our quarter, during increasing a

weaker most the and We tends for we've range last continue we QX positioned recovery The single our to our But to our remain America, year, Brazil Greenbrier be And We've you as for our in and ensure which fiscal high well of optimistic quarters. the to exit will are a current the and be improve pandemic top hard solidified challenging. first that a XXXX. environment, still measures North being that double our fact taken a financial later We one expect in the beginning months see of aggressive performance. core and leaner the Greenbrier Adrian, to our XXXX the the fiscal margins economy working of over historically, and recovery. gross leadership half in financials. turn about will low to likely to now, healthy. I'll benefit On markets stronger position it Europe XX remains organization. the Despite are over digit

Adrian Downes

good And morning, Lorie. you, everyone. Thank

gross of business release levels the As in weak full a of financial America. include Greenbrier XX.X%. is spending available quarterly activity despite the controls on of delivery the units $XX.X And despite from including held Brazil, units, low revenue XXXX. reminder, our especially slides is quarter margins information performed in $XXX and continued sequentially in our margin aggregate well XXX XXXX manufacturing and million the the press expense X% well of in few of demand down reflecting Selling impact low enacted X.X% North website. deliveries Administrative supplemental QX, highlights A March the environment, in at million up of reflecting rates.

selling More first quarter administrative XXXX. is XX% expense and down from the of importantly, fiscal

forward, Looking impact expect to was by Greenbrier a pretax More the fluctuations half or and Rail was for effective formation Net was loss acquisition. quarter, X.X% EBITDA quarter tax to we and rate low, XXXX the identifiable benefit not selling levels our to benefits items attributable before $XX earnings in million the would quarterly X.X to in favorable disproportionate we XXX to administrative approximately loss The in QX, million approximately rates. tax primarily the ARI share. currency seen have of the benefit street XX%. related we driven recognized tax be million of of expect of high of by foreign the $X.XX When are than will the or the in quarter million discrete In can million annual revenue. costs future orders. be continue Adjusted on last COVID-XX. so items this in was a per or driven $XX.X expense Greenbrier-Astra XXX Europe,

at these borrowing consider $XX Greenbrier’s safety quarter million positive liquidity was million. operation the and In with the Greenbrier the of facilities for cash $XXX operating the expect available XX capacity generated on-going and all of them foreseeable our to costs to modestly $X to flow of $XXX November cash approximately of our million. million vital and continue employees continue We of future.

underlying August invested in so Leasing million we quarter remain and also the And fleet we debt cash the $XX of lease. million we discretionary. the is used of XXst. since highly primary, other In and the progress in $XXX invest quarter CapEx have of initiatives August repayments liquid, prudently XX. $XX we debts of primary the in quarter, since While have cash reflecting over other And driven to by repaid to as in use primarily in additional capital annually million a are was Maintenance leased the reasons. around few XX million and services are X for opportunistic expenditures expenditures lease the economics. different other we our million

cars and leasing and allows First, flow rail long sheet hold lived a balance advantaged, investments to are collecting assets while assets stable our stream. second, the cash tax strength are us

required that in Looking be to and around ahead, and million we fields XX support safety and manufacturing XXXX, expect to parts expenditures capital continue level a in maintenance. repair

open extending We announcing quarterly program Greenbrier's through our it strong Based we And capital, on from January in represents including a continuing XXth dividend. that continue significant cushion employees this is of XXXX. downturn $X.XX XXXX, excited yield company. covenants, of to share Greenbrier’s I'm appreciate now our debt will of no future a to up a share have balanced and closing calendar which all of Today, significant hard late and a and we maturities consecutive X%. ensure questions. emerge share, Board are a stronger our we Directors dividend remains per committed until the yesterday's dividend. work of of deployment for debt to the repurchase our about price,

Operator

Justin question Instructions] will Thank you. with from Stephens. first Our [Operator Long come

open. is line Your

Justin Long

And New morning. Happy good Thanks. Year.

Bill Furman

Happy Justin. New Year,

Justin Long

you curious about so replacement you've on talking on bit if to to then off, fiscal but maybe just is something the orders assumption that based forward? and remain stable know the above the go you're or flow half, that order love around in things going second view. pretty just seen you internationally, pickup a color far America half was kick and North a either curious view second quarter more orders in the to in comment maybe get on I'd second any could that half in first could share little demand recovery, if I So I your

Bill Furman

you, Justin. Thank

to of as now I maintain operating -- cripple when have one our rates our starting base much. with we the factories upward so our we backlog think the we backlog, keep to to is at in our comes recovery want can goals them ourselves so scale don't

industry the Thus So nine orders we can far, and done are in flow. seeing this we know spotty. well replenishing order a But for as first our of months have very the maintaining pandemic backlog. you be positive

quickly, strength for you indicator better the year, it strong will very well hour per that's cars, we, loadings, that the traffic back quite has over of look pipeline. come than While fallen fundamentals miles suggest rail, two the the that on usually the velocity at railroad last know which in we probably order interesting store and a

is good I a shocking government, by have some tough a pipeline. kind short. States. which will be margins think entry demand order matter should seeing to essentially add Today strong are and taken like a and thing there, competition, at but out storage a United where XXX,XXX up what going of to start book. roughly of should that you something a to we not China's it guess almost level of U.S. believe will of in level to we've reach to be on But a what bit are happen the position Lorie, XXX,XXX breakeven investment think, around of facing really because cars is types quite I just moving lot would that So that We're terms the be a funded the there It's so used storage I will around is it prompt point which and in around down we're given just gone cars. XXX,XXX that's that? XXXX renewed many It's when of XXX, a cars we out. it's point that that we cars

Lorie Tekorius

Yes. a We They calendar there, lot of end you with Maybe can sometimes a little from would team. a out bust. know, of conversations a talking our say of see commercial But year boom, as Justin. activity or variety just I having bit, are the some do the a bit still customers. be with a little of

activity, time a modest probably in as I there's pause. the take a to as more a bit think this holidays year use to people particular, tend little

of more early with quality the quality I pick around activity opportunities, And a commercial from seeing just expect thing calendar They seeing that they're up We I inquiries better this leave checking that we're getting to things opposed the some in that. in the folks you and heard as in that year. are our last to of is, like better to pipeline.

Analyst

think That's helpful. of challenging most manufacturing second the the follow-up quick talked great. you've being as Okay, I year. gross the a about maybe And margins, fiscal quarter on typically

sequentially So then digit double And to a is back the get that of bit worse? right see margins could expectation get in year, range? little low quarter, next we manufacturing the half the that

Lorie Tekorius

that I since second Well, is quarter that see if weaker quarter you're think a it's organization, going fair part to to the reflected largest in assume than manufacturing. this the manufacturing is of

Bill Furman

for appreciate takeaway in well. And can I an accomplishment. not pricing a like that. whole our the dramatic below reductions margins we others And have It's Justin, or We've is time volume, continue this here, showing And for We're the pricing We're doing thing volume, That's it. been that as able anything an revenue not discipline. to costs are to our is do. decent backlog. base. admirably maintain think easy we industry long Alright. despite and in to But followed Yes. quite margins our story volume. whole

quickly. We that So we can just few out have We it well. as are pass think months a more quite hopeful will everything hope we pass. sorts do we that will

Analyst

too. Thanks always. as time. Me I appreciate the

Bill Furman

Thank you, Justin.

Operator

sir. you, Thank

from next Our with comes Majors Susquehanna. question Bascome

sir. open, is line Your

Bascome Majors

question. thanks morning, taking and Good for my Yes.

and amount questioning cash your a and some your Justin's tremendous flows Following the the to investors you work up of of breakeven protect of on the really guys on have downside. there, lower done company

summer, were last environment year? the that you deliver optimism that on full even in very potentially result a marketing, a some As operating earnings you suggesting for recently as least tough at could breakeven

Bill Furman

question? that Is a

Justin Roberts

looks Actually, like it line. off Bascome dropped the

take the So next we'll caller.

Lorie Tekorius

hope Bascome is We that okay.

Bill Furman

answer and that come question. We'll back

I think remember we can question. the

Operator

come Our will next Matt Cowen. then question from with Elkott

Your line is open.

Matt Elkott

question. pricing impact going of you. it about you place virus outlook think wanted follow-up will where see the who shippers to come some be lessors into phases Thank significant you you do agreements? sign and I been now uncertainty Is supply will to favorable trying pent-up order the larger from? orders? the and Good the on on the think multiyear the lock had in morning. When current to the discouraged and to do demand jump initial recovery, demand by Or political from most those

Bill Furman

will come types. I of surprising and shippers in see see railcars, the types. insulated capital We we'll drivers softer at concerned tanks. stage. in The primary strength including and or source we see a specific boxcars, a to cycles, And the boxcars. In don't multiyear are orders capital big other car constrained, gets -- among are a in for access strength car multi-level some see be equipment. market stored not automotive number think capacity as typically probably We in to about this having velocity, its and to lessors but

industry at for XX,XXX you out. But really respect with statistics of of a is know, sand not very the specific XX,XXX watch. stored, likely to or those aren't are to chunk car example, important types. cars, actually capacity big our now. come maybe As to XXX,XXX. storage cars, they're cars And very Intermodal that's Because

our customers. there's have But improve to leasing on. continue operating very and to car do more we do with as ourselves. our of a we So, work partners, we continue and model But -- own going lot will to lessor And expect activities. it's before specific stuff syndication types

Matt Elkott

now. the -- is That pricing makes sense. I whether would I competitive pricing to the as was very -- curious railcar just imagine

gave, a you if a signing large the have capacity capacity away, agreement, up it remember sneaks think I correctly? what on the quarter -- to you. make signing exercise was last XX%, your say actually what like guys backlog percentage of you instead international? and does kind it then, Bill, current you're necessarily XX% lessor, it And to sense. harm I don't So waiting of and you right is prices of supply did if until the what's shortage But

Lorie Tekorius

it's there, XX%. about Matt. holding And about It’s

Bill Furman

Also Matt, and a the very in both in backlog outlook similarly, America. in Brazil had were through our practically Europe, XXXX we've And South in Europe. booked there good resurgence in demand

it's So we've here, market. principally really, the is North market been about which our largest talking that American

Matt Elkott

thinking Yes. And then of Europe.

Bill Furman

you think don't. said, railcar should they just cheaper. when I they buy are But

For they're more some always expensive. It's when bafflement me. been reason they to buy

Matt Elkott

mentioned you And interesting. about Europe. my maybe It's final question Yes. Europe,

If manufacturing an a see the can material your When the you share always is to lease the from usually a And move operating The begins we freight you in very highway? to rail in as more improvement are a expect us always off utilization. high. railcar to shorter, at in but -- lessors the full market give Europe? demand that pretty highway freight as Europe, there's update utilization almost Europe. is to an on manufacturer ask continent in terms in market for can effort And, move

Lorie Tekorius

we a you I here like seen do talking a has were which or United and in We've some Europe. third have in economy. certainly been States, of could interesting demand now, uptick if second I seen Bill, by that They've in guess, come in you seeing But this behavior in that through we pause created a the competitors. They're certainly in of have for I about. then pickup in. think demand by reasons pandemic, now. Europe our hit round exactly we're start, could their some right pause the going an right

second there think XXXX that. need in things we're work maintaining And into work. than just one with watching lot our more margin So, all up Europe the don't We our low as we no railcar of in value that increases as a like We're lock production of of will to here do it's well. very the discipline. North America. closely, we steady be capacity We for move our to those in that half want

So we're looking forward to that. Bill? And

Bill Furman

we there where competitive issue multiyear -- that On earlier the Yeah. one multiyear declined lion's car multiyear refused share with a orders in in market and Europe price. that's materials in we four that components very and And share summer asked, in two builders placed. cases, are pricing were I we to There strong three that [Indiscernible]. have as middle have mentioned. on go going they're to pricing two are Europe or demand already. fixed still do because costs the in a both large are up to believe we those area components, of of and beginning the of move marketplaces, those to orders And meet roughly with We

Matt Elkott

consolidating you regulatory if the you would in Europe? run into market consider do that? to any tried you would Or issues guys further So,

Bill Furman

No. probably our model yes, to by our business the adding round And we side to of we business. going off are -- not going are sophistication to more leasing

on and to debt XXX,XXX railcars when further invest and capital have leasing paid manage get tend our will in adequate time right, is the platform. We We already to in invest. over industry. to We

platform. we've in evaluating We we're necessarily have seen a that good management in although area. that. Europe, And probably growth Not

Matt Elkott

everyone. Thanks, Bill. Thanks

Operator

Next Bank come of will with from Hoexter question America. Ken

open. is line Your

Ken Hoexter

New margins Happy Really job on. what's morning, given going Good great a Great. Year. on manufacturing

on a bit of just congrats order terms the impact the margin of do we understanding future kind there, could filling up how book that book, just talk that. delve we and you the Bill in it? mentioned bit, versus of don't exact the pricing, that numbers, seeing ASPs talk lowest terms cars. So we're on the types with But into different in at what what's little of types give on order ASP and volley going about and through. maybe Lorie, maybe a you looking, Can

Lorie Tekorius

create a And in the type and but a at following not And be can goes It car look first ASP and I Ken, I again, being about and cars, boxcars, car But our much talked facilities. that have a have sizable geographies, driven Europe. Sure. certainly also sequentially. how car you what would certainly Brazil, is in say, price And been willing a when there going ASP. material also type mix quarter. to we've a America and tank said higher three to types what a price. again, time into driven. can is order was need tend of long discipline of by had North of improved types, and across our to market for know Europe operate our some chunk the here and is order I'd fairly more say we've which North then America, to we nice have in the probably ASPs competitors that's to that Brazil, back all primarily some pricing, right to meet higher car

Justin Roberts

with is and real in units ASPs When this general. Brazil, typically Ken, the international mix just strong Justin, lower are we have Those do quick. quarter. smaller orders especially the a are a And in mix, in stronger down for

not So it well. of geography as car mix down definitely to mix certain type of does come but certain

Ken Hoexter

that maybe more side, leasing Is and lower of were down part significantly. have the Okay, therefore, helpful. business just your just margin, parts through. a just so also Can factor And then of on kind costs. on you and fixed walk

driving on other flow the through we factor then just see of rest maybe that? through fluctuate the see margins volumes just rates so the as come year of that segment? similarly Maybe is how back. on we leasing, And that the a And on walk

Lorie Tekorius

volume Sure. parts, of repair On impacted, certainly being like wheels, manufacturing with activity. are they lower and repair

storage. them tend repairing them putting opposed cars owners then to Some put and into storage, as in asset to

not that's necessarily unusual So an phenomenon.

North We it more adjustments basis find But in to ways that we segment, and to continue want management we integrate our have costs. to also maintain and made cost better a reduce to that in services platform group as said, is responsive now with be comes closely very cars back. our that working can XXX,XXX America. group, over We've I managing demand which got management

being the there we shops. So, repair of having between network that we and synergy manage see a tremendous cars

volume comes side back. benefit challenged price. the term we in So We near on repair wheel, revenue some part of to got the scrap on and margins expect so be do because and side, the

a revenue was secondary the as had we market runs goods of acquired that we sold. a sold. those the and of through and of when you'll were recall, And we cost have this flood transactions side, leasing quarter where railcars that On that services kinds on had

dollars percentage is diminished, margin though margin even So, are sinking.

Ken Hoexter

Thank time. much in the you for you sneak you give, provide Adrian, barge just revenues very can number one if could from I one And quick that? just

Bill Furman

XX million. About

Ken Hoexter

time. guys. Year. the New Thank Happy Perfect. Appreciate

Bill Furman

Thanks.

Operator

Thank you for question. your

Majors Your line open, Our from next Susquehanna, sir. question will with come Bascome is

Bascome Majors

here. I you of me first a Thank know how shot for the through. came don't second much question giving

So I'll just…

Bill Furman

remember you what We asked.

Bascome Majors

in think the in to that some challenges make second. you're as Yes. get I'll cyclical curious to cash flows, with it up you you. striving out point. trough to I'm in and Is get point you half that a first seasonal of the be And cycle and in earnings, the that given to? maybe the could back and Thank breakeven address quarter I enough whole would and well to, starting the in year been opportunity there as terms helpful? if that you've

Bill Furman

not me earnings just let said We giving guidance. what said. say, we're Bascome, we

with have line by and above month yesterday, X,XXX breakeven the health four COVID-XX, months We was going that trend going our hit times fourth death next the the That's or have of to the get two strong you expect I watch if haven't expect, a do fourth to rate to I think economists company the really experts. to a possible really stronger. But very occur very strong it's snapback quarter, so. will hard ahead last depend the have strong which just quarter, some ago quarter on on expect, year, impact leading projected going we really, for We're up to have given we're I But lag. fiscal it's we because achieving year. orders the the in economists think we goal. a in have a dynamics, the XXXX, beyond momentum. that unknown in if But an for that could But will have year.

Bascome Majors

appreciate the around uncertainty that I you addressing us. within

the calendar like to biggest have it's chunkier than into of me to issue And later in would some the the recovery. more whether do year during sounds fiscal that be next channel? when year earnings or you the headwind it later syndication have order anything. fiscal a larger, year. those just like into the that typically go So year? you any address potentially Could cadence visibility timing maybe from your variables happens you also tailwind could an some maybe a you of when of And sales, in your And

Bill Furman

have that with liquidity. managing efficient of cash occur the close to rapidly will very very, that the low demand infrastructure also We less Act efficient, be Railcar can Congress. An management very benefits good are Congress. getting other big that reintroduced our a very contribute efficient. came is appears that coalition effective very for factors is stimulus industry. that energy something railcars And as which likely in build Yes. That and [Indiscernible]. principally bring was new will scrapping cash could the was a Two new cars that cost that and to that We're effect, in it or for

depends going rest is of be Some today very but situation of for occur looks Georgia, it that on going things. in what's the those to like positive to

we good Other that, in we're watch So industry. on. of reasonably I to than our things those are both think I should optimistic two those. about those think things just focus And are

Bascome Majors

Thank you.

Justin Roberts

generate levels, more that there. have did cash times mentioned can the well. even hard our opportunity business working as you manage we And cash saw capital And flow you and we that a for as in we a quarter positive in still cash

Bascome Majors

Thank you, Bill.

Bill Furman

Thank you.

Operator

you. Thank

next is Poliniak Our question Wells from Allison Fargo. with

open. Your line is

Allison Poliniak

Hi, guys. Good morning.

Bill Furman

morning. Good Allison. Hi,

Allison Poliniak

QX to, want guess, I to to the some just back cadence. of go I

more that But of could in as but terms QX? about specifically level models be you positioning should obviously we sense think we're production a the lower Or the upside. we about, baseline our predicting see talked thinking something which that should capacity, in You we about assume when is here? of downside, in QX, QX makes had

Justin Roberts

a kind line major changeover. there and of have days say, we still do few working can I

lower have production could syndicated are, QX our our onto will sheet So QX syndication building and cars actually part as be this mentioned, we and QX. balance of into -- model, Bill and as which then

and perspective, be could production QX modestly delivery a lower. from So,

Allison Poliniak

pretty you've standpoint And in at this full just operations had then a Europe. about Understood. challenges you at Have point, from capacity in I solid for backlog an running of, talked region back. you? Are there? self kind while those you Europe, that could know where improve a to guys I turning correct profitability correct, guess,

Bill Furman

Yes.

into half addressed at year second year. And we've that not full of are the plagued this issues We unfortunate running operating last and the capacity.

So in, not expecting lift a at up we're capacity. but we're full

We have we can that more do there.

Allison Poliniak

Got it. you. Thank

Justin Roberts

Allison. Thanks,

Operator

you. Thank

Our Barger last come with Markets. Steve will question from KeyBanc Capital

is line Your sir. open,

Steve Barger

-- data part here by in primary as coalition competitor and using America modal your of wants that to think levels. share service improve to North Bill, Thanks. drive to analytics a telematics I

big for your So on the being just position a need railcar OEM and a telematics what's manager, platform?

Bill Furman

we great intriguing a very That's sponsor. strong And question. support significant has it's initiative. class least at it that think very It's very one a

So are we're other studying this. options. There

makes it, for for has to details, we wants pay Our have that. in And into gives we're have decide great a get problem are -- it. offline if tracking people to if it's And The to base, nobody which allow pay great been if great you it. we a for We're we really it. do. interested us other it that. will been, idea willing don't a there could management platform -- But want enter not to

Lorie Tekorius

things that believe that Yes. overall industry, we're improve will right? And our that Anything I that always industry, Greenbrier. say improves improve we would favor just the in of

Steve Barger

half that. it's could making that year. Well, being expectation about improve this thinking on or there any follow just that things strong, position Are external? of back the specific improve internal your investments technology and up whether really liquidity you're With to having in or you're efficiency,

Lorie Tekorius

differently. is I'd can group ways engineering we that cars build reviewing our say, regularly

who railcar And those sometimes railcar more carry an computers carrying when more or on the cars product to sit the look whether have it's in seem fairly allowing it the heaviness minor. But at and they at trains can train. of or may all it to the us day, that of capacity, the to the have it comes extraordinary desks itself, impact,

the services hire technology industry would the on again, area logistics the area had for and around I So where mentioned at looking regularly And we we and that manage an we're of how maintenance, That's and cars. railcars car and manage, use improvements within where updating we that. say management group, XXX,XXX regulatory systems design we're refining we're that over group. is that's focused Bill our services. doing, and where mostly the

things that doing we're around. like regularly So

Bill Furman

factories fronts low use are China, important two other efficient lean our be XG to to manufacturing from changeovers. would on XG to adaptable, The factories, technology technology technology is make that not more factories, smart but have

operate, team second those penetrated, be on we have We were working some a growing This vulnerabilities watched to that. is have companies And a if would the we've headlines. cybersecurity. all all we risk where we

board our We're about So to is concerned ourselves. We're concerned protect that. about investing it.

Steve Barger

last And it. just one Got one.

a further job philosophically, just to But of hopefully for negative on few years. so, there mitigate if saw sense diversification a have catalyst over XXXX. cyclicality? is in won't internationally on or add the we And makes a global diversifying a future in into? done And vision last what expand basis the You've nice like we to

Bill Furman

I to on we're first work. address going Lorie or have might it. handles strategic let our two that comment a And her

Lorie Tekorius

That’s how generate operations. question, I Steve on more a say we that is non-manufacturing very focused benefit interesting. our great out it right would more can we're now of

be So new reduce some ways If new and of lows cars our of the cyclical. we network, tends that our to the businesses leasing create steady again, as demand. manufacturing management railcar our out that cash it's at look we some most manufacturing flow some can and think rail repeatable business, revenue, services how offset, to business, to approach repair of those about the

I think that's, that's beneficial. very

the geographies here to to to answer different. bit the we have be little and approaching question. don't necessarily we if in that to We One in business that not those we geographies every of we're do geography look as But what that on thinking paste to improved want North we're, doing do that the every can how have know we also and North a went early And when the well. copy we're we at American ugly learned different. America other things. we we'll other in Europe we'll environment is is to look things Every because America, ways as see we there's

Steve Barger

Pretty to Is or going to say brainstorming? or of you leasing reinvent good. you're the anything. line anything I just talking that about of sight wheel kind in hard have there when was to it's this is the

Bill Furman

more there's it's our leasing line about to a Well, We sophisticated be partners business intend wisely. to sight. of our choose

partners. very have We strong lessor operating some

the syndication But risk very our actually economics that. to of stream climate, stream increasing some our books not increase course of leases with own foolish we'd we And tax term some create given portfolio. effect, the appropriately the a stronger But some be leasing. factors and There had annuity railcar of are are amount are on partners. have but in have strong annuity it in we that We long and has perspective financed. short producing will will term the current will be

Steve Barger

Thanks for the time.

Bill Furman

for great you a today. everyone any or if much Tekorius. up Thank Thank out you. and very Lorie day. Thank reach you have attention Have myself And time your to questions please follow you.

Lorie Tekorius

Year. New Happy

Bill Furman

Year. New Happy

Operator

We conference for call. all you participating. today's conclude thank does This

now have your may day. great disconnect rest and of You a

The Greenbrier Companies, Inc. (GBX) 6 Jan 212021 Q1 Earnings call transcript