The Greenbrier Companies, Inc. (NYSE:GBX) Q1 2026 Earnings Call Transcript

The Greenbrier Companies, Inc. (NYSE:GBX) Q1 2026 Earnings Call Transcript January 8, 2026

The Greenbrier Companies, Inc. beats earnings expectations. Reported EPS is $1.14, expectations were $0.84.

Operator: Hello, and welcome to the Greenbrier Companies First 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 Mr. Justin Roberts, Vice President of Financial Operations, the Americas. Mr. Roberts, you may begin.

Justin Roberts: Thank you, Gary. Good afternoon, everyone, and welcome to our first quarter of fiscal 2026 conference call. Today, I am 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 our update on Greenbrier’s Q1 performance and our outlook for fiscal ’26, 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.

We will refer to recurring revenue throughout our comments today. Recurring revenue is defined as leasing and fleet management revenue, excluding the impact of syndication transactions. Before I turn the call over to Lorie, I would like to take a moment and introduce Travis Williams, Greenbrier’s new Head of Investor Relations. Travis joined Greenbrier this week to lead the IR function. His background includes buy-side and sell-side analyst experience and most recently he led the IR function in-house at a publicly traded industrial tool manufacturing company. Please join me in welcoming him.

Travis Williams: Thanks, Justin. Excited to be on board.

Lorie Leeson: Welcome, Travis, and thank you, Justin, and good afternoon, everyone. Appreciate you guys joining us today. Greenbrier delivered good first quarter performance, exhibiting our disciplined execution and the resilience of our business. Our results demonstrate the strength of our integrated manufacturing and leasing model, continued progress on operating efficiency initiatives and determined action on the things we can control. As a result, meaningful earnings, strong liquidity and progress on our long-term strategic priorities were highlights in Q1. Our model is designed to outperform during a business environment like the current one, and our model delivered, producing what we describe as higher lows through the cycle and as reflected in our 15% aggregate gross margin this quarter.

Customers across North America and Europe are circumspect about capital investments as they evaluate current freight volumes, ongoing trade policy considerations and improving rail service that has increased railroad velocity, reducing the near-term pressure for new rolling stock. These conditions impact the timing of new railcar orders, but do not change the underlying long-term replacement demand. In this environment, execution matters and Greenbrier’s commercial team continues to perform well. We are competing effectively and securing high-quality orders despite intense competition. As the quarter progressed, order momentum improved, reinforcing our confidence in the durability of customer demand. Brian will provide more details in a few minutes.

Trade and tariff policy remains an important consideration for our customers and the industry. While policy considerations influence the timing of customer decisions, it does not change the long-term fundamentals of the railcar replacement cycle or Greenbrier’s competitive position. We stay engaged with customers and industry stakeholders and are winning business in this evolving landscape. Operationally, we’re taking proactive steps to align our manufacturing footprint with current demand levels while continuing to invest in efficiency, cost discipline and process improvement. Production rates moderated slightly, and we adjusted headcount accordingly, primarily in Mexico, which allowed us to intensify our focus on overhead optimization and operational excellence.

These actions are structural and position Greenbrier to respond quickly and profitably as the market evolves. In Europe, market conditions remain complex and performance was affected by operating inefficiencies as we continue to execute restructuring and rightsizing initiatives. We’re confident that these actions will strengthen our European platform over time and drive improved competitiveness and profitability. Brazil continues to provide diversification within our portfolio. Economic conditions there remain relatively stable, customer engagement is steady and our operations delivered consistent performance. Our leasing and fleet management business continues to provide stability and growth. As we continue disciplined fleet construction and management, this business remains an important source of recurring earnings and through-cycle resilience.

Turning briefly to capital allocation. Our priorities remain unchanged. We continue to deploy capital where returns are strongest maintain balance sheet strength and liquidity and return capital to shareholders. We opportunistically sold railcars from the fleet at attractive values, recycling capital, while contributing meaningfully to earnings and cash flow. Looking ahead, we are reiterating our fiscal 2026 guidance. And while near-term market conditions remain varied, our outlook reflects the improved foundation of our business, disciplined execution and the flexibility built into our operating model. We remain confident in our ability to navigate current conditions and position Greenbrier for long-term value creation. In closing, I want to recognize our employees for their continued focus, flexibility and commitment.

Periods like this demand discipline and teamwork, and I’m proud of how the Greenbrier team continues to execute. Our integrated model, strong liquidity position and experienced leadership team position us well to manage the current environment and to capitalize as markets recover. And with that, I’ll turn the call over to Brian, who will walk through our operational performance in more detail.

Brian Comstock: Thank you, Lorie, and good afternoon, everyone. I’ll briefly cover our operating performance for Q1, including orders and business activity in our manufacturing, leasing and management services units. Commercial activity strengthened late in the quarter, and we converted that into diversified high-quality orders in a competitive market. We remain focused on order quality and backlog mix prioritizing opportunities, where we offer differentiated value and can achieve attractive returns. We received global orders for approximately 3,700 railcars valued at roughly $550 million. Orders were diversified across regions and car types, led by tank cars and covered hoppers. Included in this figure were several specialty railcar orders with higher average selling prices, reflecting our ability to support complex and unique customer requirements.

Backlog value was relatively unchanged. And we ended the quarter with a backlog of approximately 16,300 units valued at about $2.2 billion. As always, we remain focused on order quality and mix to support efficient production scheduling and attractive margins. Turning to manufacturing. We continue to proactively align production levels with current demand conditions and expect to modestly adjust rates further in the second quarter. Headcount reductions continued across North American manufacturing, primarily in Mexico, reflecting disciplined workforce alignment. Our management team is experienced and agile, and we continue to manage the business to efficiently navigate the current demand environment. At the same time, we are using this period to achieve greater structural efficiency and cost discipline.

Overhead optimization initiatives continue to gain traction with teams identifying opportunities to streamline processes, reduce fixed costs and improve productivity. These efforts position our manufacturing platform to scale efficiently as demand recovers. The lease fleet performed at a high level with utilization nearly 98% strong retention and improving economics on renewals. The size of the fleet remained relatively stable as we recycled capital through opportunistic asset sales in a strong secondary market. We also optimized fleet mix, both in terms of credit quality and car tech composition. We expanded the use of Greenbrier’s maintenance network for our lease fleet and drove other enhancements to the customer experience. Combined, these efforts support consistent execution and position the leasing business to continue contributing meaningfully through the cycle.

In summary, our teams executed well in Q1. We aligned production with demand advanced efficiency initiatives, strengthened our backlog and continue to grow and optimize our leasing platform. These actions reinforce the durability of our operating model and position Greenbrier to navigate current conditions, while remaining well prepared for future market expansion. And with that, I’ll turn the call over to Michael to discuss our financial results.

Michael Donfris: Thank you, Brian. Revenue for Q1 was $706 million, essentially in line with expectations. Aggregate gross margin of 15% reflects lower production rates and deliveries in Q4, partially offset by continued strong margins in leasing and fleet management and disciplined execution across the broader manufacturing platform. Selling and administrative expenses were $11 million less than Q4 totaling $60 million. This was driven primarily by lower employee-related expenses. And in addition, Q4 included $3.1 million in European footprint rationalization costs. Operating income was $61 million, approximately 9% of revenue. Diluted EPS was $1.14 and EBITDA for the quarter was $98 million or 14% of revenue, representing a strong result and reflecting the benefits of disciplined execution, selectively recycling capital through fleet sales in a strong used equipment market and growing contribution from our leasing platform.

For the 12 months ending November 30, 2025, our return on invested capital was 10% and continues to be within our 2026 target of 10% to 14%. As noted in our earnings release, effective September 1, 2025, we changed the methodology for allocating syndication activity, resulting in syndication activity being reflected in the manufacturing segment instead of leasing and fleet management segment. This change has no impact on consolidated results. Turning to the balance sheet. Greenbrier’s Q1 liquidity has — was the highest in the 20 quarters at over $895 million, consisting of more than $300 million in cash on hand and $535 million in available borrowing capacity. We generated $76 million in operating cash flow for the quarter, supported by solid earnings, proceeds from fleet sales and favorable working capital movements.

Liquidity remains robust, reflecting disciplined execution, ongoing working capital management and a well-structured capital base. Now switching to capital allocation. We remain committed to responsibly returning capital to our shareholders through a combination of dividends and stock buybacks. Greenbrier’s Board of Directors declared a dividend of $0.32 per share, this is our 47th consecutive quarterly dividend and reflects our confidence in the business. Additionally, during the first quarter, we repurchased about $13 million of common stock under our existing authorization. As of quarter end, approximately $65 million is available for future repurchases. We will continue to access this capacity opportunistically consistent with marketing conditions and our broader capital allocation framework.

Now turning to guidance. We are reiterating our operating guidance and updating capital expenditure guidance for fiscal 2026. Our focus remains on driving profitability through operational efficiency increased recurring revenue and disciplined capital use. With our resilient business model and strong balance sheet, we are well positioned for continued performance and long-term value creation. Our guidance for fiscal 2026 is as follows: new railcar deliveries of 17,500 to 20,500 units, including approximately 1,500 units in our Greenbrier-Maxion Brazil. Revenue between $2.7 billion to $3.2 billion. Aggregate gross margin of 16% to 16.5%, operating margin between 9% and 9.5% and earnings per share of $3.75 to $4.75. Greenbrier’s capital expenditures and manufacturing are projected to be approximately $80 million.

And gross investment in leasing and fleet management will be roughly $205 million. Proceeds from equipment sales are expected to be around $165 million. I will point out, we are pursuing assets in the used equipment market in an opportunistic, disciplined manner and may end up at a higher investment level. Greenbrier delivered good financial performance in the first quarter and maintained a strong balance sheet and liquidity position. Our integrated business model, disciplined capital allocation and focus on execution position us well to navigate throughout the cycle and create long-term shareholder value. With that, we’ll open the call for questions.

Q&A Session

Operator: [Operator Instructions] Our first question is from Andrzej Tomczyk with Goldman Sachs.

Andrzej Tomczyk: Happy New Year. I wanted to start on the manufacturing deliveries and maybe we’re just curious, if you could talk a little bit more detail on what visibility you currently have into the second half of this year as far as year-over-year delivery growth and when you might expect to see that? And then maybe just what’s driving that between Europe and North America?

Justin Roberts: Yes, Andrzej, it’s good to hear from me. Hope you had a good holiday. This is Justin. Yes, we’ve got pretty good visibility with, I would say, most of our open space, as historically, we see it as in the summertime, so kind of the June, July, August time period. But leading into that, we do have pretty good visibility. And I think, I would say that we do see some opportunities for year-over-year growth in that time period, since we were kind of ramping down production last summer, and we’ll be increasing production heading into our next fiscal year.

Andrzej Tomczyk: Got it. That’s helpful. And I know it’s very early here, but I was just curious, given the recent news and events Greenbrier’s thinking on maybe the potential medium- to longer-term impacts related to Venezuela any indirect or direct impacts on your manufacturing business that we should consider maybe that you guys have thought through?

Brian Comstock: Andrzej, this is Brian. We don’t see any impacts at all at this point from Venezuela. There’s no — there’s no lap between what we do in Brazil or other areas. And so quite frankly, we don’t think for our business, it will be impactful.

Justin Roberts: And maybe longer term, Andrzej? I would say, broadly, a lot of — if there is going to be additional kind of oil activity, it will be typically handled via pipeline typically. And any oil over — via tank cars is going to be more of a short-term phenomenon.

Andrzej Tomczyk: Okay. That’s helpful. Maybe 1 more for me on manufacturing and then delivery environment. I’m curious as we sit here today, if you’re seeing any incremental improvement or changes in the tenor of customer ordering behavior into December and January? And maybe in that same context, would you expect sequentially or what would you expect, I guess, sequentially in terms of deliveries 1Q to 2Q as well as the margin expectations throughout the year relative to the 11% you guys just did?

Brian Comstock: Yes. I’ll take the first part of that, and I think, Michael, you take the second part. From a customer perspective, I think in our scripts, we talked about how the order activity towards the end of Q3 had picked up and we’re continuing to see that our Q4, and we’re continuing to see that activity into Q1. December was unusually high for that period. It’s typically a slower month. And we had a nice number of diverse deliveries come in, in December. So we’re seeing it continue to tick up.

Justin Roberts: Right. And I’ll take the margin question. As we look across the year, we continued our guidance in aggregate gross margin. And we do see some variability quarter-to-quarter in margin, but we are looking at a stronger back half of the year versus the first half of the year.

Andrzej Tomczyk: Got it. That’s helpful. Maybe just shifting a little bit to the leasing side of your business. Are you able to share how lease rates trended sequentially 4Q to 1Q? And maybe also just remind us how much of your lease book is up for renewal this year?

Justin Roberts: Yes. So I would say for the lease rates they’ve been, especially for more of the, I would say, specialty cars like tank cars lease rates on an absolute basis have been relatively stable. We continue to see strong renewal activity. And then on the more commoditized cars, lease rates have been pressured some for us, it’s about maintaining our focus on discipline around pricing and returns focused. Then with regard — go ahead.

Brian Comstock: Yes. And I would add — this is Brian, Andrzej. I would add that year-over-year renewals, we’re still seeing double-digit increases on the renewal side. Justin is correct that we’re seeing rates hold. But keep in mind, some of these renewals were done 4 or 5 years ago. And so we continue to see nice uplift in our renewals that are coming up as well.

Lorie Leeson: And I’ll just jump in as well to say that when we see more moderated demand for new builds, current market, that means the existing equipment becomes more valuable, more desire. So that’s another thing that’s adding to those renewal rates.

Justin Roberts: And then on the kind of the cars in the fleet to be kind of renewed overall, we had about 1,500, 1,800 up for renewal as we entered the fiscal year in September, and we’ve successfully renewed kind of around 35% of that. So we’re continuing to trend in the right direction there and feel pretty positive about the rest of the fiscal year.

Andrzej Tomczyk: Understood. And then I guess just on the first quarter, there was the large gain, I think, $18 million roughly was more than you did in the entire year last year. Was curious what we should be thinking in terms of full year gains this year or maybe relative to the first quarter levels, if you could provide that?

Brian Comstock: Yes. We did have an opportunistic gain in the first quarter, looking at the market. And we continue to look at that as the year progresses, we’re really excited in terms of what that could do for us this year.

Lorie Leeson: I guess, I’d just throw in that we’re active in the secondary market, whether it’s from trying to look for assets to add to our owned lease fleet that we want to grow, but also to take advantage, if there’s something that’s very accretive to our return on those investments.

Justin Roberts: And Andrew, maybe just to take a step back and you think about, as you are managing a leasing business. Part of this is you’re always taking a look at your portfolio concentrations, your build-out and things like that and really taking a look at, okay, so where do we maybe have a little exposure, what do we have in our backlog that we’re building out and bringing it into the fleet. And so there’s kind of this constant active management of the portfolio itself. And than when you’re able to decide to sell assets and generate gains, you have an assumption around that. But sometimes markets give you a little more than what you expect. And sometimes, they don’t give you as much as what you expect. But this quarter, we were pleased with where that laid out.

Andrzej Tomczyk: Very clear. And maybe just as a follow-up on the leasing fleet itself and growth expectations. Should we expect maybe like high single digits? Or can you comment on the type of fleet growth that you guys expect this year in terms of the lease fleet? I think you did close to double-digit growth in 2025 and mid-teens in 2024 as you guys have pushed more into leasing. So I’m just curious what trajectory we should be thinking about over the near term, would be very helpful.

Justin Roberts: Yes. I mean I think we would say that we’re not going to give an explicit number because this is still a very active environment. But we do believe that we will grow this year probably in the single-digit range, maybe a little higher. It kind of depends on how a few different opportunities manifest. But ultimately, we are committed to growing the leasing business and kind of thinking about this from the long-term shareholder value perspective.

Andrzej Tomczyk: Understood. And maybe just to close out for me to sort of higher level questions. On the tariff front, would you say that those are ultimately an incremental positive or negative to your business? And then the same question also goes for the potential for Class 1 rail consolidation. With Greenbrier be a proponent of rail mergers? Or would you rather sort of the merger not go through?

Lorie Leeson: Sure. And I’ll launch into these, and I’m sure that my colleagues will jump in and help out. When it comes to tariffs, I will say that thus far, it’s been neutral to our financial performance, although the uncertainty created by the changing landscape in tariffs definitely has been a headwind or has our customers take a pause on committing additional capital for new railcars. So that has been an impact as well where there are tariffs on foreign sourced materials, it allows U.S. sourced materials to have higher prices. So that also has resulted in, I would say, a bit higher prices right now for railcars, which are primarily utilizing steel. So that can also be a consideration when you’re thinking about an investment.

So overall, I would say the dollar or percentage amount of tariffs has not had a tremendous impact. It’s more the uncertainty to try to understand the operating environment and what those tariffs might do to supply chains and logistics as our customers are looking at where they’re sourcing their materials and where their finished goods going to go and how are they going to be transported. That said, and Brian is shaking his head, so I’m saying I’m going to get this right. I think that most of our customers are coming to terms with the fact that we’re just going to all have to live in a slightly more uncertain world. And we just have to get after running our business, and that’s what we do day in and day out as deal with whatever is coming up and deal with that.

Anything that you would change…

Brian Comstock: No, I think you nailed it, Lorie, it’s really at the end of the day, we’ve had no financial impact from tariffs, but it does continue to weigh on customers’ minds and has been a little seized up, although pent-up demand. We’re starting to see that release as we said, towards the end of the last Q and end of the first part of this Q. We’re already seeing that start to release a little bit. So we’re starting to find that equilibrium, I believe, between that pent-up demand and the tariff challenges.

Lorie Leeson: Super. And then when it comes to railroad mergers, I try to stay really consistent with my message, which is anything that makes our industry stronger I am a proponent of. Anything that helps to increase the shift of transportation of goods off of highways and on to the rails. I think, is good for our business. So whatever it takes to make our industry a more efficient circulatory system for the U.S. economy. I am in favor of. I’ve been in this business long enough. I’ve seen a few of these mergers. They can be bumpy at times. And I’m sure the STB will go through an appropriate process to review it, and we will all just take it 1 day at a time.

Operator: The next question is from Bascome Majors with Susquehanna.

Bascome Majors: Maybe just to follow-up on some of the geopolitical angles that we closed with in the prior session here. The USMCA, how engaged are your people or industry organizations or internal or external obvious in that effort as that review comes closer and what are you hearing as far as how that may play out? And how do you feel about the exemptions that have been favorable for the no tariff impact on the railcars existing into 2027 and beyond.

Lorie Leeson: Bascome, thank you for that question. I strongly am supportive of USMCA. I do believe, as I was saying that the rail network is a circulatory system of the U.S. economy, and I think the free flow of railcars across our border to the north and south is very critical, not just for the rail industry, but for the overall economy. So just like with everything and maybe as we each get a little bit older, we can look back in the past and say there might be opportunities to refine things and do things a little bit better. I think that we could all try to have continuous improvement as part of our vocabulary. But I don’t think it needs to be totally upside down and redone. I think it’s been working really nicely for a very long time, and I hope that, that’s the conclusion that we come to on that.

Bascome Majors: And maybe back to the guidance. Just want to follow some of the pacing comments on deliveries earlier. You talked about, I think, 4,500 or so deliveries for this quarter if you include roughly the run rate on Brazil, that would be kind of annualized to the lower end of your guidance. But I think you also talked about maybe taking production down a little bit in the second quarter and then raising it into next year and also mentioned some white space in the summer. So how do I bring all that together? Where do you have visibility to get kind of closer to the midpoint of the production guidance for the year, where do you need orders to come in and fill some of that white space? And how do you feel about inquiry levels and the level of certainty you need to get there?

Brian Comstock: Yes. I think I can start out with that, Justin, and then maybe Michael can fill in. From the order perspective, Bascome, that white space is getting filled as we speak. And — in fact, we’re already making plans to ramp the back half of the year to some degree. So some of these head count reductions are temporary in nature, just as we get through the order book and we get to the more robust part of the cycle. So the white space itself is very limited at this stage. And in fact, in some of our more specialty type of cars, we are indeed going through the planning exercise of bringing people back.

Justin Roberts: Yes. And I think Bascome, I mean, if you kind of look at basically kind of how Michael laid out the guidance, we do have a more of a ramp in the back half of the year. And I think at this point, we would say we have pretty good visibility on that. It’s just a matter of assuming that the inquiries we have continue to translate into orders, which we have seen an improvement in that over the last few months. And then also barring any unforeseen events in the geopolitical front, which I’m not ready to place a bet on, but we do feel pretty good about the trajectory we’re on right now.

Lorie Leeson: And I’ll just throw in on there. As they both said, of having additional order activity that means we’re going to be bringing people back. We want to do that in a mindful way. We don’t — we’ve learned from the past that it’s not good to bring back and try to ramp up too quickly, but we try to do that in a very, very mindful way. And I realized Bascome that I didn’t answer the second half of your earlier question about engagement in U.S. MCA. And I will say that we at Greenbrier have been very engaged in submitting comments back on the review for USMCA. And I would be — I will be encouraging all of the rest of the industry participants to get more engaged because it is very important.

Bascome Majors: And last 1 for me, and then I’ll pass it on. But if we think about the production cadence and rising visibility and to be able to ramp that back up in the second half of the year if the order conversions continue at the pace that’s improved recently, is the manufacturing gross margin largely a function of the volume you’re pushing through? Are there some issues with mix and pricing where that may not be sort of linear?

Justin Roberts: Yes. And I think you’ve got it, Bascome. I think it’s really a combination. It’s not necessarily linear. And so there is a mix component to it. But there’s also a production component and absorption of fixed costs and all those things combined as we look at the remainder of the year.

Bascome Majors: As you do more volume, if you get to that increase in the back half of the year that you’re shooting for, do you think that will be a lift on margins? Or is it really just more of a revenue story?

Justin Roberts: Yes. No, I do think it will be a lift on margin from where we are right now.

Operator: The next question is from Ken Hoexter with Bank of America.

Ken Hoexter: So you kept your EPS outlook $3.75 to $4.25, but it looks like you have a $0.55 gain on sale this quarter, the $17.7 million which sounds like, Lorie, you said you’re being opportunistic on some asset sales. So are you decreasing your EPS guide for the rest of the year given the gain on sale presumably to this scale was not in your outlook? Or is there something else adjusting in those numbers?

Brian Comstock: Yes. Yes. And thank you for the question. Really, that was about a $0.30 impact to our earnings per share as we looked at it. And it is impacted by just when we’re looking at the market and how opportunistic it is. So that shifted possibly between quarters as we look at it and that’s why we didn’t really affect our guidance.

Justin Roberts: And 1 thing, just to clarify, I may have misheard Ken, but our EPS guidance is $3.75 to $4.75, which implies a midpoint of $4.25.

Ken Hoexter: All right. That’s what I meant, I might misread. But the — so no change to that $3.75, $4.75, $4.25 midpoint despite the gain, does that — I’m sorry, from that last answer, does that mean you were expecting these gains in your original target? Or is this — I’m just trying to misinterpret or interpret the commentary.

Lorie Leeson: Yes. Yes. So Dan, as we have a growing owned lease fleet and just like you see with other operating lessors, we will take advantage of opportunities within the market. And as we put together our guidance for FY ’26, we did assume that we would be doing some transactions that would benefit EPS.

Ken Hoexter: Okay. So can we presume then, Lorie, on that answer, then you’ve pulled forward all that opportunity? Or are there still a lot of opportunity going forward with these large game potential?

Lorie Leeson: I would say that timing is difficult to predict. When we have a good transaction as much as we would like to perfectly slot things into each quarter in a lovely even smooth peanut butter way, it doesn’t always work that way. And we will close on transactions as they present themselves and as our customers need to close on the transactions. That said, it’s a strong market out there. So I’m not saying that we’re done on doing transactions. We’re looking at stuff that we might sell. We’re looking at stuff that we might buy. So it’s just going to be part of our business going forward.

Ken Hoexter: Okay. And then — you mentioned in the — given the backlog, right, if I look at the new — the cars out of the backlog, the 3,700, $550 million added, that’s about $150,000 average ASP, which is up significantly from the [ $125,000 ], but even kind of going back the last few years, I don’t know if we’ve seen a number that high. I think there was commentary in the prepared remarks that there was some higher value cars in there. Can — is that a couple of cars that are just so highly valued. Can you just maybe walk through, I know, you never break out number of whatever it might be a specific type of tank car or whatever it is. But can you just kind of give us an idea what would drive something so high?

Brian Comstock: Yes. Ken, it’s Brian. At the end of the day, I don’t want to give away too much sensitive information for our competitors. But we do have a number of units that have I’d say, fairly high ASPs. They’re specialty cars for specialty type of service. It’s 1 of the things that’s unique to Greenbrier that we spent a lot of money in the innovation and R&D side of the house to perfect so that we could be in a position like this as markets come to us. And it’s a market, I would say that’s a growing market that we’re looking forward to continuing to build into.

Ken Hoexter: Do they have outsized margins? Or just given the components and specialty kind of similar margins to others despite the higher ASP?

Brian Comstock: Yes. I prefer not to go into that level of detail.

Ken Hoexter: Okay. SG&A jumped up to 8.5% or somewhere around 8%, 8.5%, which was similar to 4Q, but kind of above, I think, the guidance was somewhere in the 7.5ish type range, so maybe an extra $10 million. Is there — are we — were there costs added back in? Maybe just walk us through kind of what’s going on in SG&A?

Justin Roberts: As we set the guidance at the beginning of the year, we did say we’re going to take about $30 million out year-over-year and so if I look at sequentially where we ended in the fourth quarter, we came down about $11 million. There’s really nothing significant in that as a percent of revenue on calculation that I would look at. We’re still targeting taking $30 million out year-over-year.

Ken Hoexter: Okay. So was that higher than you would have expected?

Justin Roberts: I think we would say the G&A was — is trending in line with what we expected for the year. Maybe it’s up a little bit in the quarter by a few million dollars, but not significantly.

Ken Hoexter: So is that — I’m trying to understand the impact on margins, right? So we’re talking about 11% on manufacturing, but then higher SG&A. Was that timed because you added more people or to get more sales just walk us through what’s driving that?

Justin Roberts: I think the big piece is there’s some additional translation and currency adjustments out of Mexico — or not out of Mexico out of Europe. That, I would say, artificially changed kind of how G&A was tracking. We’re not adding people. There’s not G&A that is being grown. In fact, I think, if you looked at last year, we tracked — we ended around $260 million and this year, we’re going to be in the kind of $2.25 to $2.30 range is what we’re guiding to. So pretty substantial reductions year-over-year.

Ken Hoexter: Helpful. And last 1 for me, just is always the below-line stuff, Justin, if you can be any helpful in terms of how we should think about going forward. The minority was a positive versus a negative equity in loss of unconsolidated was negative versus a positive. I don’t know, is there any ballpark how we should think about that below the line?

Justin Roberts: I think — probably our activity is — well, I don’t know, maybe we can take that kind of touch base on our follow-up calls. I think broadly, we’re expecting to track where we were at in the prior year and kind of based on our preliminary guidance, earnings from unconsolidated affiliates, which is primarily Brazil, is going to be modestly positive throughout the year that would be accretive to earnings. And I’m not saying that to you, I have to say it out loud to myself to make sure I don’t get myself confused. The earnings or loss attributable to noncontrolling interest is our partner’s share of earnings in Mexico and in Europe, a negative of about — or an earnings deduction of about $1 million. We do see that fluctuating throughout the year based on cadence of activity in Mexico, in Northern Mexico and in Europe. And that’s — I guess that’s about kind of as far as we’re going to go at this point.

Lorie Leeson: Yes. I would say that if you were to think about where we’re doing our operations and not what I still call minority interest piece, it’s going to — if our earnings are and margin are back half weighted, you’re going to have a little bit more of that that’s going to be going to our partners in the back half of the year. And yes, I think based on our comments, we expect Brazil to remain stable. We’re having good performance down there right now.

Ken Hoexter: Wonderful. All right. I think that’s it for me. It looks like reiterating all your targets, right? So you’re — even with this 4,400, are you still looking for second quarter to decelerate from this fourth quarter? Or do you think we kind of hold — is this your minimum value in terms of delivery — quarterly deliveries.

Brian Comstock: Yes. We really, really don’t really give quarterly guidance. What we are saying though is we do expect the back half of the year to be a little bit stronger than what we’re seeing in the first half of the year. So…

Lorie Leeson: You can do the math.

Brian Comstock: Yes.

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

Lorie Leeson: Thank you, everyone, for your attention and your interest in Greenbrier. We appreciate it. And as always, if you have follow-on questions, I know you can reach out to Justin, but you’ll quickly come to know Travis Williams. So we’re excited to have and be part of the team. Happy New Year, everyone.

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