Greenbrier (GBX) Q4 2026 Earnings Call Transcript

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DATE

Monday, October 26, 2026

CALL PARTICIPANTS

• Head of Investor Relations - Travis Williams
• CEO and President - Lorie Tekorius
• Executive Vice President and President of the Americas - Brian Comstock
• Senior Vice President and CFO - Michael Donfris

TAKEAWAYS

• Revenue -- $591 million in the fourth quarter, representing a 3% sequential increase driven by lease fleet growth and favorable manufacturing mix.
• Core EPS -- $0.39 for the fourth quarter, excluding $0.12 per share in facility-related rationalization costs.
• New Railcar Orders -- 3,400 units valued at approximately $600 million during the fourth quarter, reaching the highest order value for the fiscal year.
• Backlog -- 14,000 units valued at $2.1 billion at fiscal year-end, representing the first sequential increase in backlog since fiscal 2024.
• Owned Lease Fleet -- 20,900 units as of Aug. 31, reflecting 23% growth during the fiscal year.
• Fiscal 2027 Revenue Guidance -- $2.8 billion to $3.2 billion, supported by anticipated improvements in manufacturing volume and lease fleet expansion.
• Fiscal 2027 EPS Guidance -- $2.75 to $3.75, reflecting expected back-half weighted delivery strength.
• Manufacturing Revenue -- $538.9 million in the fourth quarter, compared to $529.1 million in the third quarter.
• Manufacturing Gross Margin -- 9.2% in the fourth quarter, impacted by syndication timing and operational inefficiencies from lower production volumes.
• Leasing & Fleet Management Revenue -- $52.1 million in the fourth quarter, up from $47.4 million in the third quarter due to fleet growth.
• Leasing & Fleet Management Gross Margin -- 57.6% in the fourth quarter, reflecting higher maintenance expenses and acquisition timing.
• Fiscal 2026 Deliveries -- 15,400 units for the full year, despite what management described as a low point in the industry cycle.
• Liquidity -- $962 million at fiscal year-end, comprising $235 million in cash and $727 million in available borrowing capacity.
• Recurring Revenue -- $175 million for the fiscal year, a 55% increase toward the company's five-year goal of doubling this metric.
• Fleet Utilization -- 98% at fiscal year-end, maintaining high levels despite macroeconomic uncertainty.
• Capital Expenditures Guidance -- $225 million to $275 million for fiscal 2027, with approximately 70% allocated to lease fleet growth.
• Operating Margin Guidance -- 7% to 7.5% for fiscal 2027, as management focuses on cost discipline and operational execution.
• Quarterly Dividend -- $0.34 per share, marking the 50th consecutive quarterly dividend payment by the company.
• Programmatic Railcar Restorations -- 2,200 units completed during the fiscal year, which are excluded from standard delivery and backlog figures.
• Debt Structure -- 85% of total debt was fixed at fiscal year-end, with a weighted average interest rate of just over 4%.

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RISKS

• Tekorius stated, "Earlier this month, a competitor filed a petition seeking duties on certain tank cars," which management indicated is weighing on near-term demand.
• Comstock warned that the European rail market remains soft, noting that industry wagon deliveries in the region are expected to stay below 10,000 units in fiscal 2027 compared to 14,000 units two years ago.

SUMMARY

The Greenbrier Companies, Inc. (NYSE:GBX) reported fourth-quarter results characterized by a sequential increase in backlog and growth in its owned lease fleet. Management noted that while fiscal 2026 performance was affected by geopolitical uncertainty and higher interest costs, strategic investments in the leasing segment and North American in-sourcing have improved through-cycle resilience. The company provided fiscal 2027 guidance that anticipates revenue growth and margin expansion, driven by an expected recovery in North American industry railcar demand.

• CEO Tekorius stated, "The USMCA continues to benefit most of our products, and we'll work with policymakers to ensure greater understanding and reestablish consistent trade treatment of railcars in the North American market."
• Comstock noted that railcars in storage have fallen for four consecutive months and are at the lowest levels in over four years, which supports a more constructive outlook for railcar manufacturing.
• Management reported that lease originations represented 40% of orders for the year, reflecting the integration of direct sales and leasing solutions.
• The company exited its Omaha maintenance and repair facility during the fourth quarter as part of its ongoing footprint optimization strategy.
• Comstock indicated that inquiries have increased across most railcar types over the past several weeks, with the commercial team converting more leads into firm orders.
• CFO Donfris stated that the company will shift to providing an outlook for industry deliveries rather than company-specific deliveries to better reflect its evolving business model.

INDUSTRY GLOSSARY

• ABS: Asset-backed securities, a form of debt financing secured by a pool of lease assets.
• Book-to-Bill Ratio: The ratio of orders received to units delivered; a ratio of 1 indicates balanced demand and production.
• Programmatic Railcar Restoration: Large-scale maintenance and refurbishment work performed on existing railcar fleets, which supports manufacturing plant volume.
• Syndication: The process of selling railcars from the company's lease fleet to third-party investors while often retaining management services.
• USMCA: The United States-Mexico-Canada Agreement, a trade treaty governing commerce and labor standards between the three North American nations.

Full Conference Call Transcript

Operator: Hello, and welcome to the Greenbrier Companies Fourth Quarter 2026 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 Travis Williams, Head of Investor Relations. Mr. Williams, you may begin.

Travis Williams: Thank you, operator. Good afternoon, everyone, and welcome to our fourth quarter fiscal 2026 conference call. Today, I'm joined by Lorie Tekorius, Greenbrier's CEO and President; Brian Comstock, Executive Vice President and President of the Americas; and Michael Donfris, Senior Vice President and CFO. Following their prepared remarks today, we will open the call for questions. Our earnings release and supplemental slide presentation can be found on the IR section of our website. Matters discussed on today's conference call include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Throughout our discussion today, we will describe some of the important factors that could cause Greenbrier's actual results in 2026 and beyond to differ materially from those expressed in any forward-looking statement made by or on behalf of Greenbrier. With that, I will turn it over to Lorie.

Lorie Leeson: Thank you, Travis, and good afternoon, everyone. We appreciate you joining us today. Fiscal 2026 was a year marked by significant macroeconomic factors, including geopolitical uncertainty, wars, shifting tariff and trade policies and higher interest costs, leading many of our customers to extend the timing of investment decisions in long-life freight railcars. In that environment, Greenbrier delivered 15,400 railcars, generated revenue of $2.5 billion and earned core earnings per share of $2.60 with aggregate gross margin of 13.6%. While these results were below what we expected at the start of the year and fourth quarter, given the market conditions, our performance remained quite resilient. The last period of similarly low industry activity was 4 years ago during our fiscal 2022.

Comparing fiscal '26 to '22, Greenbrier delivered about 4,500 fewer units but delivered aggregate gross margin 330 basis points higher. Core EBITDA was 30% higher and core net earnings were 76% higher. The changes that we've made over the last several years to our manufacturing footprint, our cost structure and our lease strategy have raised Greenbrier's performance at a low point in our cycle. We remain focused on actively managing the business to ensure stronger through-cycle performance. Shifting over to manufacturing. We adjusted production rates and headcount to match demand while continuing to complete new railcar designs for customers. Our in-sourcing investments to produce key components continue to lower costs across our North American network.

In Europe, market conditions remain soft, and we continue to align our footprint and cost structure with demand as we drive for improved operational efficiency. Our Leasing & Fleet Management team had a strong year. During fiscal '26, we grew our owned lease fleet to approximately 21,000 railcars. And with high fleet utilization and stable lease renewals, this business continues to deliver strong performance. A larger fleet has recurring revenue opportunities for Greenbrier that make us less dependent on new railcar demand. Now I'd like to take a minute to discuss how trade policy continues to affect our industry, particularly for tank cars. Earlier this month, a competitor filed a petition seeking duties on certain tank cars.

And in September, U.S. Customs and Border Protection affirmed its determination regarding certain freight rail couplers on finished railcars. We're vigorously defending our position in both of these matters, including appealing to the freight rail -- appealing the freight rail coupler case to the Court of International Trade. On the tank car matter, to be perfectly clear, we proudly build tank cars in Arkansas today and employ more than 2,000 individuals in the United States, including our amazing teams of engineers and procurement professionals. The USMCA continues to benefit most of our products, and we'll work with policymakers to ensure greater understanding and reestablish consistent trade treatment of railcars in the North American market.

We're starting to see customer interest that was initially stymied beginning to return. Customer inquiries have increased across most railcar types, supported by growth in rail traffic and the cost advantages of freight movement by rail compared to trucks, particularly at current fuel prices. Brian will provide more detail on the market and our commercial activity in just a few minutes. I did want to mention that our balance sheet continues to support our leasing growth strategy, and we ended the year with liquidity of nearly $1 billion, and Michael will dive into the capital allocation details in his remarks.

As I reflect on the long-term targets we established at our April 2023 Investor Day, I'm pleased with the progress we've made. We are on track to double recurring revenue within 5 years, growing 55% to $175 million in fiscal '26. Our aggregate gross margin reached the mid-teens in fiscal '24 and '25 and remained solid at 13.6% in fiscal '26. And while ROIC fell below our targeted range in 2026, reflecting challenging manufacturing conditions, coupled with significant investment in our growing lease fleet, it's actually averaged approximately 9% over the last 3 years. These results demonstrate the resilience of our business model and the benefits of our strategic transformation, positioning Greenbrier for stronger returns as market conditions improve.

Looking ahead, our priorities remain employee safety, operational execution, cost discipline, strategic growth of the lease fleet and improved through-cycle performance. Finally, before I turn the call over to Brian, I want to say a few words about our new Board member, Manny Pearlman, who officially joins the Board tomorrow. Manny brings extensive experience in investment management and capital markets as well as deep financial expertise. We look forward to benefiting from his perspective as we continue to execute our strategy and drive shareholder value. And with that, I'll turn the call over to Brian.

Brian Comstock: Thanks, Lorie, and good afternoon, everyone. During the fourth quarter, commercial activity took a meaningful step forward. We received orders for 3,400 railcars valued at approximately $600 million, our highest order value of the year, spanning a range of railcar types and end markets. These orders resulted in a book-to-bill ratio of nearly 1, the highest we've seen since Q3 fiscal 2024. For the full year, orders totaled 12,200 railcars valued at $1.9 billion. With many customers deferring purchasing decisions this year, I'm extremely proud of how our commercial team continued to win business. Greenbrier's backlog increased to 14,000 railcars valued at $2.1 billion, the first sequential increase since fiscal 2024, with deliveries extending into fiscal 2028.

Lease originations represented about 40% of orders for the year, reflecting the value of an integrated commercial model that offers customers both direct sales and leasing solutions. As a reminder, programmatic railcar restoration work is excluded from our orders, backlog and deliveries. In fiscal '26, we performed this work on approximately 2,200 railcars, making Greenbrier a clear market leader. Looking at the broader market, conditions are becoming more constructive. Rail traffic has grown across a broad range of commodities this year and elevated fuel prices have improved rail's cost competitiveness relative to trucking. Recent operating results from the Class 1 railroads provide encouraging signs for the broader rail freight market.

Several major railroads reported solid volume growth in the third quarter, while intermodal traffic has been particularly strong, reaching record levels and posting double-digit year-over-year growth in recent weeks. At the same time, railcar scrapping has outpaced new builds in North America over the past 2 years, reducing overall fleet size. Railcars in storage have fallen for 4 consecutive months and now are at the lowest levels in over 4 years. We believe these trends point to strengthening underlying freight demand and support a more constructive outlook for railcar manufacturing as customer confidence and capital investment recover.

Additionally, tighter fleet supply supports improved lease rates and secondary market values and increases demand for railcar conversions, tank requalifications and rejacking as well as routine maintenance. FTR projects North American deliveries of 23,000 in 2026, growing to 31,400 in 2027, an increase of 37%, driven mostly by replacement demand. Our fiscal '27 straddles these periods and based on industry order level observed over the past few quarters, we expect deliveries to be stronger and back half weighted. These dynamics are creating momentum for our commercial activity. Over the past several weeks, inquiries have increased across railcar types, and we are converting more of them into orders.

The tariff and trade matters Lorie discussed are weighing on tank car demand, but we expect orders to resume as greater certainty emerges. Our leasing and fleet management business benefits directly from these fundamentals and delivered an outstanding year. We grew the owned lease fleet by roughly 4,000 railcars or 23% to approximately 21,000 railcar fleet, primarily through disciplined secondary market acquisitions while maintaining utilization at 98%. Renewal rates remain well above expiring rates and recurring revenue reached $175 million for the year, up from $113 million when we established our goal of doubling recurring revenue. Turning to manufacturing. We optimized production rates in the fourth quarter to align with demand and adjusted headcount accordingly.

Our teams designed and produced several new railcar types, which will benefit and support our back half forecast. Our in-sourcing investments continue to lower costs across our North American network. In maintenance services, wheel shipments exceeded our expectations with strong forward demand. Outside North America, demand in Europe remains muted. 2 years ago, freight wagon deliveries in the region were nearly 14,000 units. The industry will deliver fewer than 10,000 in 2026, and the 2027 outlook is similar. Our lease syndication capabilities have been important in supporting our European backlog, while large operating lessors have limited their purchases, and we continue to align our footprint and cost structure in the region with demand.

In Brazil, Greenbrier-Maxion delivered another strong quarter with more than 400 railcar deliveries, including export orders supported by a favorable product mix and continued manufacturing efficiency. Across Greenbrier's businesses, our capital markets team played an important role this year. Its syndication and secondary market activity generated liquidity, supported the growth of our lease fleet and expanded our relationship with investors and operating lessors. In summary, fourth quarter orders and backlog improved, our lease fleet grew significantly, and we kept production aligned with demand. We remain focused on order quality, disciplined fleet growth and operating efficiency, and we enter fiscal '27 encouraged by the activity we are seeing. And with that, I'll turn the call over to Michael.

Michael Donfris: Thanks, Brian, and good afternoon, everyone. Revenue for the quarter was $591 million, up approximately 3% sequentially, primarily driven by growth of our lease fleet and favorable mix in manufacturing. Aggregate gross margin was 13.5%, driven by the timing of syndication activity and operational inefficiencies resulting from lower production volumes. Earnings from operations were $26 million or 4.3% of revenue and included $4 million in facility-related rationalization costs for the quarter. We continue to evaluate and optimize our footprint to align capacity with demand. Our effective tax rate for the quarter was approximately 6.5%. That reflects the mix of income across jurisdictions where we operate, along with the impact of foreign currency. Earnings per share were $0.27.

Excluding approximately $0.12 per share of facility-related rationalization costs, core earnings per share were $0.39, while core EBITDA was $72 million or 12% of revenue. For the full year, fiscal 2026 revenue was $2.5 billion, and aggregate gross margin was 13.6%, reflecting continued cost discipline and the contribution from leasing and fleet management. Diluted earnings per share were $2.49 and core earnings per share were $2.60. Core EBITDA was $300 million or 12% of revenue. Now turning to the balance sheet. Greenbrier ended 2026 with total liquidity of $962 million, consisting of $235 million in cash and $727 million in available borrowing capacity. Our debt maturity profile is well laddered with no significant maturities until 2028.

In addition, at fiscal year-end, approximately 85% of our debt was fixed with a weighted average interest rate of just over 4%. Operating cash flow for the quarter -- for the fourth quarter was approximately $32 million. We maintained strong liquidity throughout the year and continue to invest in our lease fleet, supporting recurring revenue growth and long-term earnings potential. Our capital deployment reflects the flexibility of Greenbrier's integrated business model. The timing and mix of railcar sales, leasing and fleet investments can influence reported deliveries, revenue, capital expenditures and cash flow from quarter-to-quarter. Ultimately, our decisions are guided by the returns we expect to generate and the long-term value of the assets rather than an individual operating metric.

This flexibility is particularly important as we continue to grow leasing and fleet management. We also remain committed to returning capital to shareholders. During the year, we raised our quarterly dividend by 6% and repurchased $13 million of our shares. Our Board recently declared a quarterly dividend of $0.34 per share, marking our 50th consecutive quarterly dividend. We remain committed to balancing investments in the business with shareholder returns while maintaining financial flexibility. Before reviewing our fiscal 2027 guidance, I want to highlight a change to our annual outlook. As our lease fleet grows, company-specific deliveries have become less indicative of our financial performance, reflecting our flexibility to sell production or retain it for leasing.

Additionally, manufacturing segment revenues includes maintenance, repair and programmatic railcar restorations, which are not captured in delivery volumes. Going forward, we will provide an outlook for North American industry deliveries rather than company-specific deliveries, better reflecting our evolving business model and aligning with industry practices. For fiscal 2027, we anticipate North American industry deliveries of 26,000 to 28,000 railcars. Total revenue between $2.8 billion and $3.2 billion, with operating margin ranging from 7% to 7.5%. We expect earnings per share to be between $2.75 and $3.75. Total capital expenditures, net of proceeds from equipment sales are projected to range from $225 million to $275 million with approximately 70% allocated towards growth of the lease fleet.

To provide some additional context around our outlook, we expect leasing and fleet management revenue to grow 12% to 15%, manufacturing gross margin in the low double digits and aggregate gross margin in the 14% to 15% range. You can find additional modeling assumptions in the fourth quarter earnings slides on our website. In summary, we continue to make progress strengthening Greenbrier's financial foundation and expanding our recurring revenue platform as we enter fiscal 2027, our priorities remain focused on managing costs, maintaining financial flexibility and deploying capital with discipline. We believe these actions position Greenbrier to deliver attractive through-cycle returns and create long-term shareholder value.

Before we open it up to questions, I will turn it over to Lorie to share a few final thoughts.

Lorie Leeson: Thank you, Michael. And since this will be my final earnings call as CEO, I wanted to express my sincere appreciation to the entire Greenbrier team. It has been a true privilege to work alongside so many talented and dedicated individuals. Together, we've navigated challenges, celebrated successes and strengthened Greenbrier's position as an industry leader. I'm incredibly proud of what we've accomplished and confident in the company's future. Brian and the leadership team are well positioned to build on this foundation and lead Greenbrier into its next chapter.

I want to especially thank our employees for their hard work and dedication during a demanding year and our customers, shareholders, Board of Directors and the broader investment community for their continued trust, engagement and support. It has truly been an honor to lead Greenbrier, and I look forward to the company's continued success. And with that, we'll open it up to questions.

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

Ken Hoexter: Lorie, great working with you over all these years from all your different roles. So I appreciate the help and discussions along the way and best of luck in your next endeavor. I guess I'll start off with -- maybe I don't know if Michael or Lorie, whoever wants to jump in, but your range, the $2.75, $3.75, right? So it's a dollar wide. Maybe talk a bit about your upside downside. Is that just the same as your top of your goal revenue and $2.8 billion to $3.2 billion? Is there anything more in there in terms of what you want to highlight?

I don't know if you want to start off with the midpoint and go risk to the upside downside. And then just one clarification while I have you is you talked about reducing costs. What did you do? Did you shut a facility down? Or is that just getting rid of, I don't know, line of workers or a shift?

Lorie Leeson: Well, so I'll take the last question first because that's kind of how my brain works. I can only remember so much at one point in time. Maybe that's why retire. But we've been through -- this team has been through a number of ups and downs in our industry. And so yes, part of it is adjusting our workforce to match where demand is. We do that in a very respectful way with our workforce so that we can bring them back as demand improves.

The other thing that we're constantly doing is trying to see are there areas where we can refine how we're serving our customers, so whether that's our leasing customers, our management services customers, all of those things, how can we do that in a more efficient way. Oftentimes, that's leveraging technology, but we've learned to just be on that ever-continuing path. And I'd say, yes, we have closed a number of facilities over the last few years going back, I guess, it's probably been 3 years ago now when we sold our Gunderson facility here in Portland, where I'm very proud to say it's continuing to operate under the Gunderson name, but doing business in a private way.

So yes, we've been looking at that footprint and trying to reduce cost where it doesn't make sense in the existing portfolio of Greenbrier and as we think through where have our -- where are our investments returning value to our shareholders.

Michael Donfris: Yes. And I'll take the guidance question, Ken. As we think about the fiscal year, that range reflects just some of the uncertainty about customer inquiries, when they'll convert to orders and deliveries. And then just the industry forecast, as you know, was a pretty nice ramp from where 2026 is. And as we look across some of the things that we're focused on, as Lorie mentioned, we're very much looking at different cost opportunities. And as we invested in-sourcing over the last few years, as we grow our volume, we can continue to take costs down with that in-sourcing investment. In addition, we expect deliveries to be a little bit back half loaded in 2027.

And we expect to see some of the absorption benefits that will have in additional production and additional volume. And the other part of it, we'll see the leasing and fleet management business grow, and that will drive our aggregate gross margin, which is in that range as well. And then we continue to control SG&A. We continue to look for ways to focus on that as well. Does that help, Ken?

Ken Hoexter: It does. On the guidance outlook. I guess if I could just get a follow-up, Lorie, on the closing facilities. Is there anything like entire operation in Mexico or the joint venture or in Arkansas, did you close any complete facility? Or is it just, again, like a line or what have you?

Lorie Leeson: Are you talking about in our fourth quarter, Ken?

Ken Hoexter: Yes. Yes. I'm talking about the charge you took. You said you...

Lorie Leeson: I apologize. I apologize. So the bulk of that was we exited our Omaha facility, where we were doing maintenance and repair work. So we did sell that to another party who's continuing to operate the business. We also had a small gain associated with exiting a longtime dormant joint venture that we had with Amsted in Ohio Castings. The bulk of that though was Ohio -- sorry, Omaha.

Ken Hoexter: And then I guess my last one, if I can sneak one more in, is pricing. Are you assuming -- I guess, just looking at your net orders, and I'm trying to gauge since you're switching to an industry number versus your own target and what that might mean for you. But are you -- given your focus more on specialized equipment or increasing railcar demand overall or tank cars, is there an assumption here of an accelerating revenue per car? Maybe you want to talk about pricing in the marketplace a bit?

Brian Comstock: Ken, it's Brian. Yes, I think I can take that. I think it's a little bit of everything that you talked about. There's a number of specialty cars out there that we've really been focused on, and that's a lot of the engineering we did early on. And a significant part of that production does begin in the back half of the year. Pricing on that is good pricing and margins -- we have nice margins associated. So that's kind of part 1. Part 2 is, we're seeing a lot of interest on the intermodal side. Intermodal has been dormant for a long period of time.

You guys are seeing the railroads report out, and you're seeing TTX and others start to look pretty seriously. And so we see some line ramp-ups coming in as well. And then just generally, as the market recovers, you start to see better pricing discipline across the board. So it's a combination of all 3.

Operator: [Operator Instructions] The next question is from Andrzej Tomczyk with Goldman Sachs.

Andrzej Tomczyk: Curious, maybe if we could just first touch on the leasing margin in the fourth quarter. I think it was 58%. I think that was a little lower than we were expecting, down a couple of hundred basis points sequentially. Just kind of curious, is that a reflection of you building the fleet or maybe more maintenance costs in the near term? I know the lower utilization sort of sequentially that might be driving it as well. And then just going forward, how do we think about the overall gross profit margin level for leasing into 2027 relative to sort of this recent high 50s, low 60% level?

Brian Comstock: Yes, Andrzej, it's Brian. So it's really -- as you guys will remember from our last call, we added a number of units in Q3 that then began to go on lease in Q4. So there's some acquisition timing as cars were coming into the fleet. And that it's the timing of maintenance, quite frankly. There's a number of programs around requalification and things that had to get done, some catch-up work. On a go-forward basis, we see it returning to normal levels. So you'll see it back up.

Andrzej Tomczyk: Got it. And in terms of just if I could follow up there, when you say normal levels is I think at '25 -- in fiscal '25, you guys did closer to 67%. So should we be thinking sort of between 60% and 67% on a full year basis for 2027, just on a clarification point?

Lorie Leeson: I would say probably it's the mid-50s to low 60s is where we would try to see it. I think there's oftentimes different things that are going on in particular periods that might have an impact. But I do think as you're seeing us continue to stay focused on growing our own lease fleet either from what we're originating and building in our shops or the secondary market transactions. Some of the secondary market transactions we're adding older cars, as Brian said, that have a little bit more maintenance on them. So that's where you're going to see a little bit of that variability. But we also have a great team that's evaluating these secondary market transactions.

So we're not just buying cars because we want to grow the fleet. We're buying cars that are a good return on the investment that we're making, and then we've got a great team that manages how we're keeping those cars maintained.

Andrzej Tomczyk: Understood. Appreciate it. Maybe just on the leasing as well. What do you expect the leasing fleet count to end in 2027? I mean, obviously, you've been growing that pretty quickly. It was 17,000 units in '25 or '26 and then up to 21,000 in 2026, call it, 20% to 25% growth year-over-year. How are you expecting that level of growth sort of to trend here into 2027 on the lease fleet?

Michael Donfris: Right. And I'll take that, Andrzej. As we look at 2027, there's certainly a very strong market in the secondary market, but we project that it's going to grow to somewhere between 22,000 cars and 23,000 cars as we look across the year.

Andrzej Tomczyk: Great. Maybe just shifting then to manufacturing here. So the guide for the industry deliveries of 26,000 to 28,000 during your fiscal year. Could you just help frame that up a little bit for you guys? I think if your share of industry deliveries is sort of -- and correct me if I'm wrong, maybe 30% to 40%, I think that could still imply deliveries depending on what you do in Europe could be down year-over-year, if I have that math right this year. And I'm just curious if that's true, are we expecting more of that pressure to be front half loaded and then maybe you're expecting year-over-year improvements on a volume basis here in the back half?

Michael Donfris: Yes. And I think that's -- you're thinking about it in a correct way in terms of the strength potentially more in the back half of 2027, fiscal 2027. As we look at year-over-year, we've got a kind of a guide range that's kind of around where fiscal 2026 was, but we expect to do a little bit better than 2026 in terms of deliveries.

Lorie Leeson: And maybe I'll just add on to that part of what Brian was talking about earlier is the mix of cars that we're delivering. So these specialized railcars that we're building, they only count as one, but they can be a lot more impactful when it comes to the overhead absorption and the capacity that it consumes within our fleet. And then further, as a reminder as to why we are stepping back from giving our specific delivery guidance is because while we've got a great commercial team that's originating both direct sales and lease originations, those lease originations, some of them will keep on our balance sheet. And therefore, not all of that production shows up in deliveries.

And then we have been focused for the last several years on how can we do things differently within our production facilities to make certain that they're optimized and creating a return. So that's the -- I love this word, programmatic railcar restorations that don't show up in deliveries. This is wheel activity, it's maintenance activity. We have a number of other things that are captured within manufacturing revenue that makes the correlation with Greenbrier deliveries not be as tight as we would like. So that's why we've changed that guidance.

Brian Comstock: Yes. It's Brian, Andrzej. I'll just put an exclamation point on what Lorie said. It's the quality of the earnings in the back half versus the front half. So it's less about volume and more about the quality of mix.

Travis Williams: Andrzej, this is Travis. We can follow up in greater detail offline. But I would say, just to clarify, our industry forecast of 26,000 to 28,000 units would represent growth over what we saw in our fiscal 2026 in terms of the industry. So just to clarify on that piece, and it is back half weighted. So we can get into some detail later.

Andrzej Tomczyk: That's very helpful. And maybe just for me to close off some broader thoughts here on the -- digging in a little bit more on the current state of the antidumping and the countervailing duty investigations that you guys kind of talked about in the opening script. Maybe just curious if, one, if you think that's a potentiality that, that could actually go through, how you're thinking about that? And if prices ultimately have to go up for railcars on the back of that? Maybe how are you and your customers speaking about the potential future impacts to the fleet strategy and maybe whether Greenbrier may have to pass on those higher input costs over time?

Lorie Leeson: So if I could, I'll break it into 2 pieces, right? So there's the antidumping countervailing duties on couplers. Couplers are a smaller component of an overall new railcar. I would not expect duties on those couplers to have a significant impact on demand. The issue is how a railcar manufacturer separates the coupler on a brand-new railcar as it's coming across the border from the rest of the railcar. In my mind, I think about this is like how would you put a duty on the steering wheel on a passenger car separate from a duty on the overall car.

So -- and some of that is just how does that -- how does the mechanics of that work because new railcars have been crossing our northern and southern borders for decades without being treated as consumables. So that's on couplers. On the tank cars, our customers are with us on tank cars and part of the government's role is to talk to them. And I think that they're going to be really vocal about whether or not Greenbrier and others that build tank cars in Mexico have been doing untoward activities when we bring these cars into the United States.

I'll probably get the stink eye from someone in the room, but I will say that is not our intent, and I don't think that, that's reflected in the gross margins that our teams have been putting up. We are focused on making certain that our products are priced consistent with the market. We don't -- if anything, we prefer to get very robust pricing, not dump pricing in order to take market share.

Brian Comstock: Yes. And to be clear, this is Brian, just to put a finer point again on it is this is an industry issue. It's not a Greenbrier issue. So if it does go through, then the price of tank cars go up. And unfortunately, that price gets passed through to our customers, which is not what we want to do, but it is what one participant has put upon the industry. And so the industry will deal with it, and it will raise prices, but it won't impact our financial performance or it should long term.

Andrzej Tomczyk: I appreciate the thoughts there. Just to close off 2 quick ones for me. Just want to clarify, are you -- have you paid tariffs on tank cars at all? And then just secondly, I wanted to also express Lorie, it's been a pleasure working with you and wish you all the best going forward. Maybe just one for Brian off the back of that as you take the helm in early 2027, are there specific areas of the strategy where you see a need for pivot or acceleration either direction?

Lorie Leeson: Thank you for the nice words. It's been nice getting to know you as well. I'll take the tariff one, we're continuing to work with CBP on how to navigate the system to do what they're asking us to do. Right now, the system is not set up to do that, but we continue to work very, very closely with them. And I look forward to hearing what Brian has to add.

Brian Comstock: No. Look, Lorie and I have worked together for 30 years. And what's great about our relationship is that we've developed a lot of the strategies together while she's led the initiatives. So these are things that I'm deeply rooted in as what we've progressed in the company. What you'll see from me is a continuation of what Lorie fundamentally has put in place. I think maybe with a newfound urgency around some of the business unit operations and their performance, leveling up the expectation from them.

Along with that will be some of our costs and overhead structures and continuing to look at how we can improve our cost profile and then really putting and leaning in hard on the leasing growth side of our story so that we can continue to grow that side of the business.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Travis Williams for any closing remarks.

Travis Williams: Thank you, everyone, for joining us today and for your continued interest in Greenbrier. This is the end of our fourth quarter earnings call.

Lorie Leeson: Thanks, everyone.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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