GBX - Earnings call transcript Q1 2025 | The Greenbrier Companies, Inc.

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Operator

Hello, and welcome to The Greenbrier Companies First Quarter of Fiscal 2025 Earnings Conference Call. [Operator Instructions] At the request of The Greenbrier Companies, this conference call is being recorded for instant replay purposes.

At this time, I would like to turn the conference over to Mr.

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

Justin Roberts

President Good conference welcome by call. and Vice Executive Greenbrier's Gary. and the quarter Donfris, Michael Lorie our of CEO Senior Vice Comstock, Brian XXXX Today, and President; President afternoon, you, of to Americas; CFO. and President first Tekorius, and Thank I'm joined

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

of the our cause found materially forward-looking any earnings made website. Matters release statements those some describe slide supplemental today's the Greenbrier's call discussed of expressed our Our by Litigation from section conference that statement presentation behalf of can or on Act actual discussion results and on within we IR could differ Greenbrier. factors be in Throughout the Private will and include to of Reform in the today, XXXX. forward-looking meaning Securities on XXXX important beyond of

recurring throughout comments. of excluding Today, we fleet activity. leasing revenue revenue our is will Recurring defined the syndication management impact and as to refer revenue

the over With hand call I'll to Lorie. that,

Lorie Leeson

Thank you, New everyone. afternoon, Justin, and Year. good Happy

our the calendar is As well new underway. XXXX fiscal begins, year

year, reflecting builds of on over performance million, margin improvement. with first strong basis the generated of the focus Greenbrier of gross EBITDA market our range XXX a aggregate XX.X%, generating $XXX a along our quarter points in from accomplishments prior more Our bottom results robust but remains on a line year-over-year conditions. In QX,

conditions as as the Yet much generating prior last of since in precisely, today's gross stronger. the near-record peak. decade, is half margin the not Greenbrier new year, peak demand highest robust market of the More roughly we railcar last environment years. aggregate last a peak is we're Over that years and earnings at our achieved are

performance. Michael our contributor made more margin, will gross progress QX launching a to performance our enhancing which shortly. financial key is just we've X ago, for details significant on Together years our our Better strategy quarter Since in manufacturing provide the

Policy the the and Congress our will over unchanged. incoming and remains which expect XXXX next fiscal years. to actions for can we months by the few customers environment operate coming guidance over the in help business clarify Our administration

to intent on industry conversations productivity, to on manufacturing As will remain are of with for of conditions. our evolve demand impact having limiting business the next discuss, and focused and executing our We Greenbrier on a we've few customers our been a regardless on cyclicality strategy Ryan outlook support efficiencies. years. journey multiyear currently the market at unlock the greater our business results We're optimizing increasing constructive

to We Greenbrier's strategic important ensure initiatives prosperity. continue long-term to execute upon

renamed manufacturing initiatives the an which led segment, one operates of to maintenance alongside is fleet services of management segment. into combination and and One redesign the manufacturing, these that organizational reportable our units leasing

Our function a our new thoughtful, and organization. convention to more opportunities. aligns situates reporting operating maximize as holistic with structure allows This future us us streamlined approach integrated to and

as utilization out North believe in generally we through XXXX, XXX,XXX with but remain America, coal. railcar lower many to traffic move is therefore, units velocity in for is under fleet secular railcar up markets, during fundamentally or and freight our pressure, rail utilization which of In XXXX Fleet decline retirements. storage. remains outpace actual about In rail as demand. industry be is North storage regulatory railcars like are will benefits surplus healthy. is railroad come The candidates XX% commodities in will projected pick replacement, down railcar to of American expected deliveries than North either reported compliance American since slightly we railcars the it support steady,

originations. European the strong commercial execute, lease continues team as including is sales pipeline to backlog healthy remains Our and our

us production business. is to performance integral allows a As our activity we in in America to European what similar reminder, long-term expansion stabilize of the the do and originations our to Europe into North lease

an Lastly, and performance Greenbrier all observing where to extremely in as uniquely future. in in investments deliver and Brazil, to is conditions transition across optimistic we're our demand positioned every market operate. infrastructure increase strong customers geography about we purchasing I'm railcars. finalize

the And activities to with greater call discuss that, in I'll Brian, turn who detail. will over our operating

Brian Comstock

Lorie. you, Thank

we organization. prospects long-term strengthen you enthusiasm As the are Greenbrier's mentioned, actions throughout indeed generating the to are taking

turn I'll to Now the quarter.

benefiting manufacturing margin net was types utilization we Greenbrier's quarter fleet additions process trailing units in car criteria. QX, fleet a in the is more railcars. results In grew basis continued fleet of optimization weighted starting in on leasing X,XXX investing we an on meet The to capacity. a $XXX point. than new XX% XX.X%, our XX%. disciplined year a stable good will and from mix Recurring or by railcar produce million revenue that team $XXX product million basis strong delivered remain gross X-quarter well. profitable our per lease the and Manufacturing at to ongoing as X,XXX to and continue our provided roughly higher our with return approach, up We

to continued at quarter. double grow during digits the rates renewal Lease

we about QX. for As a leases with our fiscal entered of about successfully reminder, up renewal. in half And of have renewed we XXXX already XX% those

of we leasing in all Given we successfully the the units. or the ongoing remarket are will market, that remaining confident renew strength

with multiple syndicated margins. units Greenbrier investors, QX, continuing In strong to generate and XXX liquidity

the syndication The meaningful team markets executed first also a very with generated new a on partner. executed in capital positive opportunity margin hold team Our with market its that buy/sell a secondary transaction period. short

in worth slowdown with orders originations order activity. quarter of XX% seen temporary. this has few Greenbrier of the election been about market, lease the we've Based railcar new over on what after early quarters the the $XXX U.S. global activity new the X,XXX units railcar at we believe order last Looking in million November, secured in

pipeline approximately orders units December, railcar in fact, to of we been which our has quiet of In X,XXX sales due month the secured traditionally holidays, the with global very strengthening.

announcements. on policy of to We customer the back come quickly expect favorable decisions

is estimated Our with units an visibility. billion, $X XX,XXX providing strong revenue backlog significant value of at

our In addition activity in to has programmatic included more not backlog in become railcar is predictable our backlog, restoration nature. that

As a existing or It requalifications. repurposing conversions. service new includes rebodying through reracking retrofits equipment work, also this debt involves and reminder, railcars stretch tanker activity conversions, into

fiscal Greenbrier. as require of perform is expect to work our highly of The required every for statutory is efficient our these just impact a ability support hundreds large This not work on this an to will units years. railcars performed and time. relevant These years. who utilize is work thousand in requalifications activities sometimes be a and fleet the completed owners XX at few They capacity to continue next are at In XXXX, thousands work several this we manner. for to healthy activities pace on and accretive

work the implement as existing flexibility can us we facilities to Greenbrier use our requalification maintenance our to and strategic manufacturing restoration plan. expect various at be at strong continues of our significant or locations, maximize its fiscal depending performed footprint. Railcar This to provides factors. successfully deliver on Overall, XXXX through performance

that, call I'll the to hand With over Michael.

Michael Donfris

affirm year today. Thank financial leads you, our us Brian. to guidance fiscal performance QX I of will highlights XXXX in drivers cover that our and

with fiscal release As website. and slides highlighted Justin XXXX margin percent start by strong earnings our sequential supplemental a operating mentioned, our great in operating and can margin is performance, aggregate a Greenbrier's percent. increase you off to find gross on

is The compared lower due Aggregate represents of new QX timing. to basis primarily attributed margin primarily XX.X%, resulting to quarter This strong expansion. by a XXX third of to consecutive quarter gross increase decrease first product for $XXX margin and syndication the beneficial quarter increased points record mix million to in marking efficiencies. from was activity deliveries Revenue reduced due Greenbrier. to the operating a

basis the due to selling quarter quarter $XXX and improved First operating or expenses. XX.X% point for increase profitability million and was was revenue. administrative The income of XXX lower

earnings to Our quarterly or fourth and exchange mix Greenbrier diluted of per attributable related rate of and XX.X% share to XXXX. quarter, Net of geographic million $X.XX items currency due first unfavorable earnings mainly per finally, than to higher was the foreign XX.X% the impact the $XXX rates. revenue. earnings quarter the tax of of the generated EBITDA strongest since for share million And was quarter $XX of was earnings

XX, XXX execution ROIC in reflects range XX.X%, XX% and November capital was was target ending of announced XXXX, return operating improvement our ROIC, invested a XXXX or months less point the strategy. our that within XX% increase capital, and The XX to Better sequential Together marking the basis ago. For by than enhanced on generated of years X our efficiency

at Moving QX remained $XXX million, and liquidity. liquidity $XXX in $XXX strong consisting borrowing capacity. million in of cash balance available and million to our sheet Greenbrier's

year. the from awaiting during flow primarily due on the cash cash syndication was million. approximately use This sheet of of a placed leased quarter, the assets capitalization to or $XX during balance was Our operations

borrowing We efficiency to increased continued expect working operating results, liquidity in fiscal driven capacity. by increase XXXX capital strong and

We our disciplined and capital managing structure will remain in sheet. balance

stands trading work reducing and trending lower strong earnings at Xx operating as our to and Our generate continue has debt. net approximately debt recourse to towards been lower EBITDA we --

and is capital Board Switching to share. returning Directors per Today, through consecutive capital dividend. of to our of disciplined a and quarterly to of are XXrd buybacks. shareholders dividend remain committed $X.XX stock combination allocation, declared we This dividends Greenbrier's a

share Additionally, Greenbrier's a Board and of repurchase renewed program. $XXX million Directors extended

of create We allocation to capacity committed our this value utilize framework opportunistically long-term and and the capital to capital are continue to shareholder strategy. will deploying within broader

our and guidance XXXX based trends current delivery fiscal guidance issued unchanged. and previously our affirm are revenue, we production schedules, on margin and Finally,

I regarding want few margin to guidance. highlight points our a

to expect operating continue. efficiencies improvements in We

in the as expected. the product the will change mix of However, year second half

by intact is margin Our remains unaffected guidance product target and ship. this

to our manufacturing and lease capitalized net modestly, This sales number to million million investment million. around of the is to a We And our proceeds year a and $X fiscal approximately plan management Gross to approximately on guidance targeted against and million been investments while in $XXX due of $XXX primarily reduction our million. are sold $XXX visibility out of expenditure expected leasing in in label our plan for investment decrease, are $XX updating of of of deliver have railcars into guidance basis. and unchanged capital equipment be better still and This fleet XXXX. reduced. we is be

In with quarter the results. conclusion, we are incredibly first pleased

position is strong. financial Our

invest. confident outlook while we returns positive. long-term increased This I Our ability strategy the in our is fiscal in capital progressing returns and all strong shareholder near grow well, XXXX years and on supports deliver our for am continuing to to is ahead. earnings

open questions. And it for up now we'll

Operator

with [Operator Instructions] from is America. first of Ken question Our Hoexter Bank

Ken Hoexter

congratulations. Lorie, Great.

XX%, pricing, see just only But about improvements might few what's you new just kind a We we can the if talked mix shift can margin the to going phenomenal of if understand The you not of sure a strong the especially I guess manufacturing. on up. the that category, orders, over the maybe years. old with so bit Some into, it. last gain, the what I'm on that little is drove kind product on back delve in combined basis, mix, half. parse

talk margin types and press some can you about But slowdown demand commentary, the slightly Brian, you certain in then, noted it your maybe railcar And gains. in was drove So for easing the noted is temporary. what the in markets. release,

I slowing. just you're it temporary So maybe sounds press the was maybe in release saying like It understand. to for saying inflected it's want and potential

just understanding, can get I if So too. an

Lorie Leeson

And Sure. to will years. we've I be a couple that congratulations, last definitely appreciate able results Thanks, say the achieve broad of to that achieved effort but the I Ken. the team it's

parsing Regarding or between versus the the services. and our maintenance historical legacy margin manufacturing gains it

-- business. is back services think modest-sized some our fairly a you historical on If it's maintenance of financials,

So move that We looked to together it any on be when at putting margin blends percentage. that in one. weren't this it either. with dial to skewing certain We're that we going really historical data doesn't the make manufacturing,

sustain been we per the hours eliminating efficiencies, the that have is we specialized gross say how teams manage improving how our unit or It's we can a fact costs, to. certain work better the that will continue margin. QX markets. end things There car manufacturing driver will of from that across need did more real can Brian types transportation to car how down can of benefit having a mix, the types speak that in-source variety up focused that that I we our kind overhead. to us can car product are So on how types, in-source, drive

Brian Comstock

Yes.

of I little it's to what think said just the day, bit storm. is like maybe It's end the the Lorie complete that a perfect of everything. at

to specialty see the it is a And and some And efficiencies come primarily took initiatives and highly is which of the benefit some towards through we to it -- our auto XX of the give got guess, on, lot in-sourcing we weighted months that that of the I product start have starting sector of or we're You've that ago, take. P&L. mix, is some cars engineered.

gondolas going is going question customers to And decisions, elections, build. decisions. strong pipeline some that the forward, It's seeing a to going seeing We're look a that It's auto. policy apprehension as We're we specialty to guns, saw December cars. to are lot some to be, commercial commercial some the covered how break leading of that defer figure It's we trying on of think month highly It's As rate. is a of loose. that versus engineered what strong as are side, car are that loose. It's out car the side looks up we've we'll more emphasis towards starting big you really starting had gaining the the momentum are it's I we're types some of I traditional. look. various chemical kind defer replacements. types, the pipeline. box was Not things would and hopper cars very on only well building if to where break see for continue those can it like to see January say, cars we from cars.

helps. that hopefully, So

Ken Hoexter

does. one It's explanation. great a And just in. sneak if can then it No, I more

Just kind X kind backlog like this So of gone down, think billion. down billion, of we're on we're what, down bounces the that -- looks it billion, to you've about? And Is to from, went you just came from you're it down maybe right? going -- talking in Or draw X.X back? X.X X.X do the starting billion, tentativeness backlog? that you environment,

Lorie Leeson

come something, is billion with sometimes add, to incredible, forget start $X me we've Brian. how interesting appreciate can worth backlog. That's Let sit. we and So you that, then where I It pretty far you when of we right? say and think

how backlog. sort the we're this utilize have thinking very to So footprint we footprint of of we've why have do been our that its and But our about on pleased focusing to is attention best the we abilities.

U.S. footprint Do American in they of railcars? the new need Do that And in footprint work particularly Do our does rebodies That's so is not these industry what they North Brian about? -- need? And some that's they So backlog. our the was that requalification? need the need talking of part Mexico.

and have. backlog. that see all we would to were if bundle us bucket. were to footprint That's confidence outlook, think is have you just activity gives the -- what always doesn't utilize our that I backlog So if you able show positiveness all together, up growth we to we It about in the this different the in

Brian Comstock

built I'll kind about Greenbrier of is you're doing And to on our is the phenomenon and one in what sustainable is footprint on of because tag that whole we these how of strengths, utilize manufacturing really what these of think we've just seeing, she that of And Yes. and conversions. and our strengths rebodies the all those as factor. we said

bit, the comes needle tick we the look can on rebalancing on then do of And refurbishment refurbishment back, what new the car little up ticks down a as kind on we we side. that demand as side. So at

If you an $XX,XXX keep Lorie's several that that per aren't think that fit to or number typically that mind, category about thousand of have car. that point, in backlog, $XX,XXX there's in ASP into cars

you numbers. accretive. It's as it's accretive. a that -- pretty And very margin margin makes swing think margin big So really about backlog very

Operator

Instructions] Bascome with is [Operator Majors next question The from Susquehanna.

Bascome Majors

it I sort some more last than last different we inquiries when guided? sheet taper what get Can you production to of But over better incremental as what and and through to protect in can talk you does that as weeks the in come syndication today, the plan on several decision half? a the the versus orders little order -- into and of make you second and out optimism get through walking know plan goes have deliveries where do point that bit sustain the over quarter, the for to did Thanks And what need look with goes to that. recovery the the a margins? of flow here. have or we to of timing the how the that guided to production last balance

Justin Roberts

the made. kind Lorie take the and I'll part be Brian talk and need then decisions can that, about of first to of that

picture, big units. production so this of Again, first in so So railcar types, big car larger type production smaller types a of few forth. picture, commoditized a be Bascome, railcar cars going about in is a shift then we as hundred think it year is of rate half. And think is And similar visibility. about railcar, is the decision not car to to of shift first the in is probably orders, comes not a you don't significant I as size more to more moving But half and the -- really a to little it you within down on it think back the per the se, back half car you part see types about when a half, from about so versus matters. maybe bit from a a in is perspective the our but of

kind example, our then material for continue on having next of the maintain check, the continued few we slow reasonably come we decision. may had lines pivot still and to production months, then are dates a some and be through But As visibility, the different order and status. back of as orders to visibility things in

our -- status. don't So don't at any in change production see we this stage, we

Bascome Majors

on clear I'm to be -- sorry. And ahead. go that

Lorie Leeson

really you that up said in of of Sure, in reemphasize, American say pretty seen January think, earlier, -- with some month to Brian, in was exciting and going for here just the North the opportunities, X early to pick particularly pipeline we December something the is market. Bascome. have I I activity just

So at time, we point do -- just that's going at in And many us Go week-in lines gives what any ahead, looking what however that's of Justin. production that our we optimism. have and different week-out. part

Justin Roberts

team agile, got A -- And this that I say, several and -- one an of through different experienced. feel is commodity different management Bascome, that's would quickly, like stare management the seasoned in coming been react with to team will saying thing types experienced able I is the for a positioned is has bad. they well several move day, relationships end very way of And marketplace, and at our good cycles experience the or we're be extensive and the and sorry, understand to we what's plays. the

Bascome Majors

So like or order the you've backlog do sounds support X.X supportive it continues. rate we last few recently and from if it pick guidance? of weeks Or inquiry really to need to see had the delivery the further it months up that is

Justin Roberts

I I I in don't a July, to able I don't to -- at little material is do would not August in say say concerned What And year. really are of bit I for that of being time open would is or increase frame, pretty really don't time expected would -- fill see this uptick. about kind space have point, we us this a rates. we we need say, the which normal at of

Lorie Leeson

they in that a us a say to would have little space customer appreciate. we be allows I because responsive need didn't open a like sometimes And pop-up of that fully when having our production bit maybe

Bascome Majors

from in half is not quarter from it on. car the with margin more flow is or for there The the exactly means from And the if go types? about the are guidance and some comments be mix what is, you recently. commodity in cash Are second to much like flow what conservatism to clarification like Any as liquidity, Or were the or around like? there car free I'll going gross working some that maybe frame to we've better look sounded other to impact however a that point, then just more on pass you views things orders capital. planned. tapering how mean than heard And operating types from knowing second bit pieces of cash clarifications, this that? flow talked that where it could made guidance cash the you've on you'd the constructive it? you Two where I

Justin Roberts

margin cash great. on if and that to jump I'll be take flow, Michael, want would the you

say, are happened we new good So caution say pretty half visibility at the lot I we're want margin events. what day, to at things versus do of, just the I a in have that have A expecting think, unanticipated mix stepping baked it or would shift end little half. we also from -- And of back bit but XX is where given is related margins and first shift the the in, a -- to of that that say, perspective, are or just in we days from reality but would that on with I'd but we aren't perspective. that constructive fact that is sure the out overly skis away make administration we we and optimistic of, of not we're believe case from our there's I out that not touch

Lorie Leeson

to environments. And ways goes various can improve that's I'll demand us to early that on sustain before tried and finding Michael emphasize efficiency why across we say just that our on maybe I focused production we that are liquidity,

Michael Donfris

invest we're from the capital. well. margin years helping a And just strong as year liquidity, our having very and how us, we is in that helping manufacturing kind Right. in and the tailwind diligent the through we're into of standpoint going efficiency jumping on the And moving seeing careful

that's I for So think us. -- real positive a been

We we're also And on very watching really working across that capital working have teams closely, too. the globe.

it, about the think I pretty and visibility into good So our I'm finish excited we have plans as year. through we

Operator

of Bank question America. The Ken next Hoexter follow-up a is with from

Ken Hoexter

Bascome guidance, So what if the this strong a such summarize hitting you kind beat of right? to -- on, just Maybe quarter.

fiscal You didn't 'XX. raise

raising out the you strong we maybe Justin, given range? at gets do performance? there What point Or first you're guess, not back it's you I into this threw target just quarter the what So to conservatism. that need just see

Justin Roberts

been the is do strong say we it space of we seeing have And the of we we in would types looking of are a have in the I part half back mix pipeline some increases at kind what activity, of -- year. also orders, that of the and see open think think say versus also come to I in would pipeline guidance. to commit would And for we've what ready at margins that year bearing I we and or think on the building near aggregate we don't that is this the point. at mind love year, this be just entire but to cars we're but I full XX% Well, is

Operator

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

Justin Roberts

for much very today. you time Thank your

If please you gbrx.com. out good have Relations and questions, reach any Investor day. have to at a Thanks,

Operator

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

disconnect. now may You

The Greenbrier Companies, Inc. (GBX) 8 Jan 252025 Q1 Earnings call transcript