GBX - Earnings call transcript Q3 2022 | The Greenbrier Companies, Inc.

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Operator

Hello and welcome to the The Greenbrier Companies Third Quarter of Fiscal 2022 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 Mr. Corporate begin. Roberts, of Justin Vice Finance. Roberts, may you

Justin Roberts

Thank President joined Downes, and everyone call. morning, CEO and and Executive you, Adrian to Comstock, Tekorius, Commercial Sarah. conference Executive CFO. and Brian our Officer; Vice Chairman; and Lorie President Today, Chief Bill Senior by welcome am Vice President; Furman, and Greenbrier's I Good Leasing

we our Following up will our XXXX, on for update open and call outlook questions. performance for the fiscal Greenbrier's

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

Bill Furman

Thank call in had since you, Justin. company the earnings XXXX. Well, participating every Greenbrier public quarterly I've pleasure of in became a

years July located our our call My of We to is largest we to people. XXXX, nearly us wanted Tekorius. in Today, XX $X.X end over full than core billion. for XX to $XXX over million. someday Today, XX,XXX started has largest backlog entire than of with the manufacturing XX Leasing on of from been very an we months. with was was operates grow and value At purchased We remarkable and Lorie It X,XXX own manage our both backlog the more James managed on fiscal be Services units where XX% approximately to and $XXX year Greenbrier that is is comprising a XXX on less revenues owned we our late annual XXXX, beyond Metals IPO under Portland, the business XXX with started our increased this in business for of company railcars, partner, offer to XX% ago West $X the Greenbrier its exactly & locations. and in revenues did. of a of unit of our moving our Railcar with close Lorie & X Greenbrier's the over second turning It American IPO, is briefly up at of Alan XX,XXX about headed after XX Company. I'll of time earnings I'm single Since that. our fiscal almost comments at We the nearly for railcars, skills my a in during Goodyear total facility company first Today, believe base a Greenbrier our the XXX,XXX CEO, North began XX all continents million some Today at in units where railcars It $XXX occurred XXXX. Leasing Management the were million. assets Huntington, When billion with employee team. fleet. XXXX. from final with $X value year. Company and Tire from in concluded approximately we journey IPO trailing management the we're and XXXX. influence create was I Our it new Rubber Virginia I pleased company manufacturing Greenbrier. for exact. our million. Oregon, in We many a which XXXX to would and Commercial entered leased of time and of

XX,XXX Now we serving markets than employ more global employees, worldwide.

service So positions today, leading continued provider a it Greenbrier with has manufacturer, and freight for supplier that global to be reach grown growth. a transportation

part to and Lorie seek ROIC and the tenure strong build enjoyed Board rare. Directors her with with advisers, and helped our those of have I women Congress, offset of our unique and leading improvement leasing In in walls levels flows adapt Greenbrier, our growth our thank well. and other had today governments of at services to operating will scale. a And to expects team with, publicly Extended government has current making U.S. for shareholders and so And and areas continue Greenbrier. I Lorie customers, joint members its many I'm grateful in the the I our a who all worked I'd members and She world. demand. careers both been all innovation where of good, Tekorius, of relationships me this will I mostly, which cash the good beyond to skilled over help commercial had for dedicated drive Greenbrier. is the within at companies businesses all working stable many the like expect TSR. privilege I and legacy of at that confidence personal led new Greenbrier at The to and that as serious bankers, a our have a ability lengthy at to expand for we the operate. It's communities throughout. talented background This our their to know made traded this Greenbrier. appreciate management so a growth exceedingly the better. suppliers, in business. are people railcar partners, its say Our will honor of all highly experience I've business continuous continue. includes I and improve analysts, I've and equity has feel men who's cyclicality team worked respects, the generate the closing, years, venture of privileged it XX Greenbrier to Board She's know create been It's to very her

these a my that my as certainly But also grateful All you on valued be of call, want enrich accomplishment today I [ph] but I the opportunity relationships thank in there of of Officer finished. not time you know and business represent wistfulness for never is sense and regret, unfinished business Greenbrier other settings. all Greenbrier in that not With they some can today's a with all to Executive life leave our business. ways. I'm I enhanced are The To countless association. for to our

the with Greenbrier to no Lorie to role to to is my ahead. things for that the come, quarters. Lorie future we as grow be will forward, for and listening Thank there come. these This won't hearing in XXXX. boardroom in generations Going you along helping for you doubt and only the be But to great look mind be a on my her calls I Greenbrier as forward -- you. in fellow and over I from move generations from is Board you team investor, to will Lorie,

Lorie Tekorius

and today us operating and conditions. everyone. market Bill results our appreciate you, a perspective joining good you of review on for morning, Thank I our

who XX% of a landscape. gain the recalibrating impacts the for our value history. production conflict model everywhere lead am impacts to rail while was to to pre-war a we in the Ukraine group and freight successfully quarter, people with $XX through to team business first pause input I Pricing of our in Services, work integral of to North order not And of The our rapidly impact chain. materials Overall, serve the hard our like second such chain. million core market, war clearly during to such headwinds proud industry In men manufacturing levels or a the of fine margins thank the changing after are and million of of our production fiscal performed Before aggregate discuss the Europe's the macroeconomic leadership to I to was customers operate. integrated railcars these activity In pleased from economy availability over half trended realities year. is production in critical margins. our in of volatile Greenbrier with one war margin I'd X,XXX Likewise, returning the our reduced to the increased. Greenbrier of and the to up Maintenance fiscal pass-throughs improved sequential in now impact half movement value move Europe syndication including Services were This our by led delivered securing slowdown to gross escalations albeit strong women momentum. that's and production the railcar demonstrated the foundation address required supply the needs or by being triggered as X,XXX of platform, profitability. the as equipment a Europe, of in we the felt continuing turning the the Greenbrier and that $XX.X well, Maintenance contending despite commodities ramps to market. headwinds, And a essential I'm have orders quarter, activity In improvement through provides volumes for the strong that of to improved, during across operating continued more steel due dilutive American year. sequentially complicated expansion XX% and innovative The characterized a leasing solid cost workforce quarter results. with a business customers' services. and meaningful of

implemented uncertainties our savings issues recession commodity facilities flexibility supply the and are is action the strength We inflation, like results. times as At prices the interest rates, still low, plan improves and wages model business our our to continue when we economy, results. meaningful produced significant hold in steady the Across of momentum raised rising leadership team to pandemic. have increase fears. and of unemployment these gain our over chain accrued efficiencies strong, consumers same regarding the the and It's time, repair experience

and and indicators believe by activity ahead. finish customer quarter months North to performance. our in order and current the the rail leasing enter like challenges encouraging American strong. we the we're our fiscal shipper Strong year, future in system opportunities invigorated inquiries business year As are the We congestion final for of of outlook the present our encouraged network momentum

Our And calendar execute team's of diversified environment I'll to market activity. amongst turn conditions. a into in and demand confident in Brian variety XXXX. railcar types extends over discuss of any and to I'm And that, railcar type leasing backlog to finally, our with is ability our well it

Brian Comstock

position market-leading new X,XXX was of total units million. deliveries North everyone. X,XXX North At in units valued of X. QX, QX, the good quarter, We for maintain American With nearly Thanks, railcar our book-to-bill calendar Greenbrier $XXX orders industry orders of secured Lorie of the comprised in and backlog. ratio morning, Greenbrier In our America. end the at XX%

XX,XXX cars and storage Scrap expected the pressure backlog consecutive railcar deliveries XXXX. expected investment a railcars Customer units American and high are North fleet causing the XXX,XXX and see billion. and of approximately currently deliveries nearly to be railcars third for XXXX, value ongoing railcar and a associates, exceed The fleet total all categories shrinking with $X.X decreased units, new on shrink. diversified Our availability of in America. increases and year at utilization units FTR levels to in combination Total to new respectively. adds of According railcar industry inquiries we seen North in XXXX last storage XX,XXX customers. fleet XX,XXX stands are remain are to from and

As railcar $XXX more or Greenbrier's -- refurbishment that units backlog at are million of railcar does include valued X,XXX a new our than reminder, program. not part

an part ensuring of friendly program Our most transport. is refurbishment the important remains service environmentally rail of mode

of to continue the leasing and for XX validates months. operate the lease lease originations strong last we North expansion fleet renewals. a over our market Importantly, new This American in significant

XXXX, business pricing of leasing renewals team remained the Lease scale on fiscal double Our fleet as with XX,XXX end the to in into railcars owned expectations the at XX%. of increased digits has continues strong an totaling while ahead we perform utilization quarter. at this fleet

on our through by economics and to very our debt our rising inflation protecting agreements focused hedging interest balances factor are for We lease rates.

remaining strong maintaining XXX leasing partners. this its our During of date quarter, our our totaled XXXX. fixed we Syndication activity QX through maturity August debt activity year units, in term with the

aligns enhanced reporting sale syndication that reminder, in excess from from Markets by end our leasing lease revenue of syndication revenue to business the new the change This our our of railcar in with railcar who a derived our to the by leasing from is, overall our reflects to a additional also financial with attached. manufacturing in is of what by revenue created margin margin Capital our consolidated activities commitment in performed team segment. the As Beginning course, a leasing. management and monitor group of model fiscal our new dollars of work Growth percentages XXXX, is segment. goal. sought is moving demonstrate Greenbrier's This revenue and strategy flexible. dollars experienced is is we QX sale Greenbrier's syndication

in particular our energized are quarter. We customers third recovery ability pandemic prevailing two forces any work positioned time. Adrian our the of next highlights will well markets. the speak and in optimistic from and the leaves these to at the to now us serve in stages about to This performed our the at successfully navigate well economy and

Adrian Downes

Today, third highlights I I in the I'd improved efficiencies approximately is like discuss operating at close in pass-through and morning, in remind additional we our partially reflect note deliveries result are will financial of of Thank Maintenance of points. in in efficiencies release will year provide quarter and quarter. Manufacturing that website. aggregate basis information margins everyone. of higher by X.X% and you, war on the the input fiscal XXXX quarterly Items available include third Headwinds escalations a improved guidance XXX to cost refining my today. and Services. as as of the supplemental offset Ukraine and slides Europe gross color listeners our remarks Brian from our press good today the

we As $XX the in gross interest business sale costs of and reduced assets borrowing million revolving borrowings about due the our result for in rate working specifically $XXX increased the capacity stabilization about million of sheet gross of consulting on increases reflects of our in railcars administrative related reflecting percent. $XXX increased increased in dollars gross we but and Interest QX. held at impact liquidity a facilities. revenues, COVID-XX sequentially, to of reduced to XX% are million of our resulting $X.X lease higher capital, balance an in COVID. employee-related from liquidity expect of placed from QX, rates of margin from consisted is activity. dilutive cost will travel and end from and higher In higher is than also of recognized available margin million. line reminder, Greenbrier's lower of cash grow quarter, with million of the input expense a of increased QX. escalations capacity working the fleet results, more facility In $XX cash This legacy increased The during borrowings QX and railcars reduction safety. costs, levels of increase expense leased safeguard to is employee pass-through Selling from sequential capital syndication resulting and improved our operating floating and borrowing million approximately expense $XX QX,

interest strength current we below weighted about of X%. in debt sheet, balance confident navigate average market. to of the our volatility five ability average maturity of Because the our an rate is with years Our the are

As expect our highlighted in prior large portion a in receive million tax to fiscal $XXX quarters, of QX. we receivable

and announced we could capacity. cash addition occur this delays our $X.XX our This XXrd available Friday's refund price, of of Directors dividend. schedules, and reflect the approximately borrowing XXXX on dividend year current dividend at the dividend Board share, Greenbrier's and that over Today, through to of X.X%. production million business due processing Greenbrier's adjusting in capital a in However, to returned closing trends has consecutive repurchases. declared to is dividends Based IRS. yield Since following. Greenbrier shareholders fiscal of per later we're Based outlook represents the annual Greenbrier's on share to dividend XXXX, reinstating $XXX a

the increasing end guidance. are deliveries We our low of

Greenbrier-Maxion deliveries updated in year Brazil. units XXXX units from Our approximately XX,XXX fiscal is which guidance XX,XXX X,XXX to includes

reflected the fiscal expected leasing prior in provided. reminder, These X,XXX guidance is to year. increase built As capitalized for into in of are units XXX higher lease fleet. units delivery and not about reflected modestly our a an units is expenditure the This guidance our in capital and guidance XXXX, be from are the approximately

we million is are $XX Net in be Services. a Management third expected between digits Leasing and be sequentially $XXX is Manufacturing balance owned sheet Greenbrier's with increase expenses external million by is for As percent $XXX and low approximately $XXX million low in expected equipment our delivered to million expenditures CapEx to double million. of leaves and in reminder, leasing $XX of Maintenance consider an $XXX to to Gross million million, approximately party. it administrative in sales Gross proceeds railcar $XXX year. expected the when Selling QX be expected & Services, and margin of capital margins from teens. to

Before of to management earnings reiterate key navigate the by supported is to experienced takeaways. Anchored of we like would provides have year. an backlog faced strong by we Greenbrier team, head the visibility. agile into continue portion which a a the Q&A robust challenges the successfully will few during call, I fiscal our Greenbrier and

when us protects times Our volatile business balance strength sheet liquidity our be and present right themselves. and positions the to opportunistic opportunities during

strongly year, XXXX. fiscal for drive to we it growth questions. And positioned will our As open current fiscal finish are well and shareholder look now we value Sarah? to up we entering

Operator

question first Long [Operator Instructions] with from Our Stephens. Justin comes

Justin Long

great wanted Bill, the the to run. is since I congratulations this say again last just on call,

Bill Furman

working you with Thank you. very Enjoyed you. much. Thank

Justin Long

you Can that in quarter you within more right consolidated you're in up on about a North teens to the margins color some gross disruptions maybe versus low Same range. bit margins guidance? that being basis assuming of quarter European here. on gross you're fourth American difference Adrian, now given margins gross referenced? provide fourth manufacturing seeing on in that gross comment a And speak the little made maybe to follow low you just the the to the margins double-digit

Adrian Downes

Yes.

American As with margins, continue in North margins by as you the would margins into imagine, you of gross primarily that as might in QX. and are expect would than improvement well. driven North quite America that and bit might increase it be Europe consolidated higher a And level manufacturing

So the to see in you as manufacturing well. margins look double would digits

Justin Long

railcars of I quarter-to-date? for are but helpful. picking in order about European overall, X,XXX clear, up you would wanted know seeing you order terms And that's about new how activity to say to in Europe orders think back quarter-to-date, quarter? activity, the Okay, tracking be talked it's you I as just that second And activity from just posted you fiscal relative that you orders

Brian Comstock

Justin, is this Brian.

take I'll that. So

with I'll start So North America.

So similar North cadence seen be of very America, we've the what to last in quarters. the continues couple to over

seen stage. And appreciable haven't here -- we're look a at to slowdown start the pretty this We things in quarter. any good off

things settled in there's orders begun that table be see in as and we and to customers we're bit can back as again. now have For come of the to much Europe, there secure are Europe, a to normalcy starting

it there over bit as well. little So a to started stabilize

Justin Long

it I'll I Okay, leave appreciate there. helpful. the time.

Operator

Our next from Cowen. with question comes Elkott Mat

Matt Elkott

reiterate. you in how this the and you deliveries front, how last Great quarter? mention quarter the the did here. many have few working the over the all many deliveries fourth with I Staying time. want on in Bill guys on to accomplishments Europe you Congratulations in to decades Europe

Adrian Downes

in would QX get fiscal QX. were we explicitly from an did is something from step into there perspective. similar that at and a where pre-war say not expect X,XXX significant were down would in cars I fiscal expectations We than that. This we pretty delivered less

Matt Elkott

we and that should to Okay, macro to we unexpected year? -- Should normal should that next and geopolitical And levels ramp developments. up got expect it. so expect borrowing

Adrian Downes

point. that's working what this plan think I that's and towards we're the at

very have fluid it customers I where what with there would day, but reiterate, some at completed. experiencing over We to see it that the everybody get environment a challenging we But environment end is is and pain. of seen is basically negotiations important a the that's

Matt Elkott

far driven Brian a But tank Justin and the the mostly mean in is orders probably, the least, bit last months. And it North the I tightening has seems understood. recovery in recent cars. like two of at so by years in car been America? the on freight has changed markets mix leasing Yes, side

the the way So order should I'd like now seems railroads changed right to super dynamics it changed, as a mix equipment fleet, more shippers manufacturing seem that eventually hit the opposed to me buyers cost to Because the like we lessor, favor lessors? to and you're of the orders? then and return other And in expect going mix if were up. if see rates of interest to given has don't had additions compelling

Brian Comstock

Yes.

Brian, So is this questions. Matt. good All

I our been shippers. to have that think is predominant as leasing lot seeing we well directly that see as to the we're activity purchased year in shippers seeing are the and shippers So more we'll going this continue as by buyers product we're originating of marketplace being A well.

There As the far as hopper same a the to we're goes, box keeping nice covered mix and car of busy number see of mix everything diverse under types a pretty that's cars. car cars other that well. still continuing much product. tank been very us tone question as to from is It's

Matt Elkott

lessors. will seen at I that's in very shipper high lessors ahead. helpful. side, think lessor it change? I really the haven't Okay, you the you are But What large that orders to take by 'XXs, on Yes, rates do back mean some much utilization versus go guess, many the so in looking for 'XXs.

Brian Comstock

Yes.

now. I point at think that you're inflection

to to surcharges is prices seeing, standing the scrap begin but commodity are We're coming is which moderate as think strong down. starting plate ease signs bit. coil, pretty seeing we're hot-rolled coil a I still hot-rolled and

been have sidelines. on And have that appetite and so the do -- an operating investment lessors sitting that have you

we're shrinking rates back said, as a We'll lot hitting a very putting a I demand. of and think pressure commodities. in inflection little them is point now, moderation of utilization high bit you that fleet basically on So bring

Operator

Allison from Poliniak Our Fargo. next Wells with comes question

Allison Poliniak

Bill, you. congrats to myself

with of with luck. been so comment there back, out think, just it's to on best Lorie, bit. Greenbrier to congestion I I go Lorie a to certainly your concerns congestion. good Certainly, that You hands little up starts want leasing the ease, and maybe of supply a And team as network one to benefit starts cars. there, rail the left in is

thoughts on interest viewing of this a sort there car you're path demand Just how new Is strong any here? enough continue on that? underlying to

Lorie Tekorius

answer is do short yes, The I so. think

I back eases, It's commodities bit congestion. going lowest during really think lot as where the is the Rail congestion with a that's a pulled to most their put some back carbon folks shipping difficulty efficient. of little maybe and the to focus got on transportation they've via the allow rail the the supply chain footprint. of

through through there's congestion impacting a themselves papers it's rail. us, the desire product So I of that lot all railroads figuring think The do timing the are need just focused sort to that all shortages, move labor do very It the of can more how we're takes out. which has bit railroads just on right? to know worked reading things. with issue It this all I of out sort to the via to this in this. a little get they

or it could two may there back those ways, up cuts it down. I costs said, of and of bunch of congestion be as things know, peaks is a the continuing being that we all of all demand incur cut So to right? going As high driving And be kind costs. could will we increase congestion, some dropping it that, think one not

we an demand. -- where to I to going area think see that's So continue it's be

Allison Poliniak

Are might terms think leasing, we just early mentioned And of this terms renewed missed But the then point? any Just the see you starting That's that terms? leases Where there? I have I are obviously in rates. you extend at stages with Or lease this. still of we are color? great. double-digit, to

Brian Comstock

No. We This of on We've terms extended and given -- frankly, lot a seen the transactions. quarters, things And Allison. really now terms these quite a past extended good we're pushing few interest it's question, rates for are. drive where is Brian.

been extended terms, in more than So frankly, some time. yes, quite say are would I they've much quite that

Operator

question Majors from Next Bascome comes Susquehanna. with

Bascome Majors

has channel, about higher to from can little So prices rates? faring? customer talk their of the you going how the core are response back bit an interest to there questions what environment syndication a higher asset and customers your And earlier, been

Brian Comstock

syndication great working has liquid The Yes. that to and in very continue been partners we first channel off have aspect.

it day, those mortgages, But to with what's in equipment the and rate going rates, on. we understand world, costs their we transact on the they people As understand have conversations. are relates interest world. that see -- everyday at the the they higher see their to what's always in they end They of interest have happening it

the And can costs into that additional so translate they expected.

any We or costs failure have get not any seen to pass-through to this of point. those at

Justin Roberts

if I also with mean, thing. the there's in rise could rates, in I interest add prices, And one the a lease just rise asset in rise rates.

And stronger so our syndication partners are generating lease returns well. as

Brian Comstock

Yes.

Lorie Tekorius

very we're also value of seeing some what's fleets, in we're of the their now But of -- come So these existing they're partners fleets. of -- seeing right benefit right? it's talking right renewals being bringing some up, of fleets, focused we're larger up now. around also produced And as renewals existing the that as have

Bascome Majors

historically, It's dig or seeing would little typical to that. said. muted the this it have least keep syndication of least Just shown more point, trying But through years, bit typical that? heavier in level bridge guidance to a deliveries that that of recently seasonality of and cadence that way the XQ some specifically higher Is typically at hard there with out the in time? anything at the a that been recent you are to XQ To fourth it's tease quarter. you

Lorie Tekorius

are of seasoning assets that matter are of And also a facilities. on some when matter a I our the sheet. manufacturing that it's our in It's built Sure. being of think those balance cars

ramping As we earlier, production. we mentioned up have been

just you for like of take see from because bit would assets. something like little related of that's it the just we're It's to more or holding that. the quarter when our sequential may timing our to a some So but partners those fourth of a and basis, levels not production

Bascome Majors

of book lot us on visibility our and incentive the for backlog the that SG&A look operate few into can whether As we think into things fiscal to kind of some capital businesses 'XX rates not given you regions you globally get uncertainties a But in. in have next to we about helpful? delivery, the little can run build? outcomes be working in lot range the as in really reversals you scheduled that's the of different of Just of anything it's and would precise models super about we year, give there's a a into, in think XXXX, obviously, color

Lorie Tekorius

I'll bit of a give color little Sure. there.

I has the XXXX allows by feel It into calendar out prepared we to of production that well idea how able schedules large everyone have. we very we'll go build. us comforted be to their give an have As to remarks, backlog think in us mentioned that do

not we we additional mindful those When workforces. to that production as all of the have manufacturing having particularly the drive impacts, steady we are We're rates That to gone Interest well those through again, a retaining paying inflation making our on our within that manufacturing run-up are having of that We're the attention businesses, some will as more know up. certain it to have is that talent to efficiency having very pull even We be costs. our other being here. process. comes require employee-related have. mindful then SG&A some is steady workforce, workforce. back to of us helps Having large a and things and one

see I historically. at great of today's locking job than what definitely think in what done with higher rates market lower in had has than we've a they're hedging but the you might team

be a about be think of guidance. I So think, what suite, at of group steady we're think, maybe going as I some ramp-up industry. kind giving say, a of staying explicit fiscal manufacturing should do to and which bit steady our I We little would not our basis a enjoy across XXXX, see well, the nice I overall, sort be, entire would something might

Bascome Majors

sorry, I'm ahead. go

Adrian Downes

well. working You mentioned as capital

rates. tends into capital So to working lead higher production the

year. expect that as to and cash or as see working should So as we in favorable again, reduces And our finish see commodity working capital prices we moderating efficiencies we we -- next that be would our up, our to drive declining, capital. ramp some some as our

So I we would some there, to improvements a uncertainty there. today, But lot see of think we what see expect obviously.

Operator

from Ken of with next Bank comes question America. Our Hoexter

Ken Hoexter

pace internally into a bit miss think quarter were about the chain it these supply -- all that or gross don't keeping get company talk next margins talk where you Was of us And -- pricing it low chain with what a the points, Adrian inflation the some you've through a Great. Maybe cost? into on to And have not that Lorie if there? stay cost? side where on there. you Greenbrier on about hotel Bill, must the the Maybe the to at Maybe that third Was maybe Maybe costs? and talk targeting Was did I but name supply echo job impacted by and margin been the done. forming basis mentioned years. great certainly other I'll the the just I'll go, pressure. great teens congrats XXX have stick it's know I and quarter. cost

Justin Roberts

this Ken, Justin. is

quarter, we to to double-digit of low QX think spoke QX. clarify, to I into kind low teens last Just in

into of to going gets that take XXX, range. consolidated you're the back and low kind add us into gets that double-digit If XX.X% you which the X.X%

in will fortunately, manufacturing upside escalations in So see guided we QX was felt gaining especially accomplished definitely see I what forward. that It in to think improvement bit we going from did there, in North just quarter. and last ultimately there's we're we -- that European activity. headwinds And out enough that a we quite some there's do the like American efficiencies and further

Ken Hoexter

climbed sheet the Okay. sounds fleet bit the versus lease total little build. on -- And balance a it on then the like the

kept You build end bottom the end. range, of lifted top you the your

So it the looks on like you've Europe. in on kept despite more what's sheet balance going

increased book-to-bill demand. lease is on So the your if What we've down feeling give sounds lot at X.X, the your fell -- obviously, a falling. just congestion on that state now? -- railroads Maybe it like market utilization the talked view and the Lorie got of to a about

Lorie Tekorius

be state to just number feeling things a seeing of get ship rails, deeper to a the that beyond shippers I rails. our is add the that more demand optimistic we we by see, say the you see to cautiously when equipment the of the able would and headlines via lot on market are you products to of

improvement. don't fleet drop of off. sort seeing a And I lease on are steady, had encouraging think We that utilization, we

better going is I rails, think the And XX% you're brought see that utilization. can out once the think equipment likely that we've stayed I is market more steady that there's they on And at to just another there. fluidity indicator a the using all in. being bit equipment that's

as that thing inefficient. you've on aged that's equipment some out goes probably other got is The

it's get partners of equipment. with more on technology. lot are one the is a scrapped probably innovation things railcars of and possible, And that will so moved improved into efficient enjoy customer on that that our rail designs working continue we as to of That's

Brian Comstock

Ken, this is Brian.

are utilization, X%. the With doesn't storage. change hit they're I lease -- point. just those fleet cars, customer cars one get A not size go percentage going lot and to another. it repaired. to many shop one have leases of another On fleet transitioning to from lease XX,XXX on from want necessarily They're through to to and or of one take a It's a they

works. we you to really like the XXX% could feel So dynamics given how just XX%, we as close when leasing we're be, of look as at

Adrian Downes

We guidance deliveries sales talk low end the third to about our deliveries of and are parties. increasing

separate sheet gone lease about balance So fleet what's those is we deliveries. to talked the our in additional investments our on that and from

not deliveries. it's Yes. driving in those So

Ken Hoexter

the an that's encouraging like know why -- more Right. end if putting I was lease statement fleet. you're it lifting No, the seemed into it and bottom

talked -- that, about environment your pricing on It in with fleet seen value. we've a on if up like follow talked rate values I Typically, the as seems earlier, you you to inflation keeping maybe your about rising just pass-through. can. So pace

I think rising a demand. kind tax any focus assets? had rate subscribing that more in environment Is just in question benefits this encouragement investment. on the straight 'XXs, just of today? you Is you had the What's encouraged like a environment of build more there a is maybe this but more for where you see

Brian Comstock

good The are returns. as for expansions Brian, the is partners we're is the Ken. It's that the and demand although we're it our demand-driven. necessarily for -- seeing either demand-driven. orders are contracts, syndication But people in with happy investments cars fleet not investment, seeing really the or This the are replacement coming is

Operator

[Operator Instructions] with Capital question KeyBanc comes Barger Next Steve Markets. from

Steve Barger

Bill, congratulations to you. I hope you have a great next chapter.

Bill Furman

Thank much. I you very it. appreciate

Steve Barger

lot of of macro A Several mentioned the been kind bet. directed chaotic you that way. have of questions You environment.

good. still I inquiry optimistic said Brian is sound cautiously still and activity all think You

question expressing about ask your is are fears So the talking that to decline? or to just their own recession business customers directly, set

Brian Comstock

I everybody about on being think everybody's the do. is got eye an smart and finish line what they

as on focused much focused recession get market. trying customers they're on their Our product to as aren't to necessarily

velocity having truck As rail is market is issues. the you The know, They're congested. congested. pretty

there's still on we it's supply constrictions. we point. on market chain share a is said at how restricted get product her our do earlier and what are of do That's unfortunately, so Lorie really lot And to And focused people this in rail. as how being grow comments,

Steve Barger

Have is so new with pricing Well, far XQ? that the car cars booked talked higher. you about, inflationary you've pressures in

Brian Comstock

Yes.

Steve Barger

lot just you fair going been feeling the gross drives and given to you profit specific accomplished more hear more going challenges. you forward? it's manufacturing conversation Justin, But this improvement per car. probably I on were of year-to-date And start on about at margin Great. that thinking maybe like quarter results Adrian have the back of or that what or think a say the we to importantly, I year. falling the how be short Can you

Justin Roberts

Yes.

we ago. think probably six ago of me year challenging size six even more I'm or created chaotic well, A then correct started to and in of challenging itself. think a months environment. months But is really I chain would say, of in yes, in sorry, wrong Adrian I'll I production gaps. first and a then any year, of or and -- I when challenging one, Delta it's this I'm think fill a the been I where the It's is, big ramp variants piece layer magnitude the challenges can you XX it in months and very very, -- and start supply closer the and challenging than when Omicron

started will line. of the forward facilities fourth the line. see through you going therefore, see actual to Well, we flow you down to and occurring, bottom as margin necessarily overhead in through those what to you into and more you're efficiencies specific seeing sequentially what reaching mean production, quarter start fall we've we're don't is it, to your -- substantial absorbing production that more profit and the see I stabilized manifest that margin is improvements rates ramp manifesting you're Now increasing QX then where see especially much in and experience allows you're those see the that the we Mexico, but each quarter. on and,

Steve Barger

lower issues to as And that And its challenges orders to better. behind was volume, that it. well? that which I changeover line the flow through? supposed starting own you as pricing been think know Got I of more Is -- higher Is have get are kind those has mix well.

Lorie Tekorius

I of little impact think said, looked fiscal would at on we ramping occurred on, sooner to expected, I because -- actually earlier I as as like some supply what mean, bit the year yes, it before I and the than we things Brian workforce. bringing COVID jumps back of a Justin this would say, in, chain, a occur

an so. I get job workforce. just to think bit took bringing done that amazing of our a that It traction, little back manufacturing team has us longer

Brian Comstock

Yes. No, I agree, Lorie.

just We're good. ramp-ups bit it. ramp-ups nailed You behind are the little a looks to the nearly but behind Pricing we're and improve -- continues the us. outlook

Lorie Tekorius

is Adrian on focused trying which think do well, have I focus dollars. think increase very but is contracts, does, which this a thing cost -- drives we're is very the focus said, is our we margin I as to -- And percentage, that be to about pleased on the it in an headwind percentage revenue clear our also Yes. our pass-throughs escalations it's of because margin in crazy margin

to margin we're dollars recreates So a percentage. just But margin keeping math neutral. those headwind

Steve Barger

kind have you that. been. I understand gross you're historically revenue look profit the trailing this car car and per No, But at and you still quarter of where the per

Lorie Tekorius

of piece look manufacturing a those was that well I enough. Fair when as big Europe at margins. think you And

Operator

question-and-answer our concludes like over the call to would back This session. turn Mr. I to

remarks. closing any for Roberts Justin

Justin Roberts

wanted today. and time say your thank attention just very to I for much you

through Investor e-mail. day. If that, has you. great great I Have our me to you out And everybody Relations a questions, either July. or justin.roberts@gbrx.com please have Thank any reach follow-up with at hope a

Lorie Tekorius

Thanks, everyone.

Operator

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

You disconnect. may now

The Greenbrier Companies, Inc. (GBX) 11 Jul 222022 Q3 Earnings call transcript