The Greenbrier Companies, Inc. (NYSE:GBX) Q3 2023 Earnings Call Transcript

Lorie Tekorius: So I’ll jump in, and then I can let others join it. I’m sorry to kind of have a little bit of a chuckle. Because you’re right, we do tend to like in the second half and then in are a little bit muted for a variety of reasons in the first half of that has not gone without our own acknowledgment of that trend. And we’re very focused on how can we make certain that quarter after quarter we continue continuous improvements from orders, deliveries, margins, cash flow, so you are going to see that sort of focus. Again, it’s hard to perfectly predict if there’s going to be something that pops up. But we’re not planning to have the first half of next year be soft. We’re planning for fiscal 24 to be better than 2023. And we’re working to make that be continuous improvement quarter after quarter.

Matt Elkott: Got it. Thank you very much, Lorie. Thanks, Brian.

Lorie Tekorius: Thanks, Matt.

Operator: Our next question will come from Justin Long with Stephens. You may now go ahead.

Justin Long : Thanks, and good morning. Maybe to follow up on that last point you made Lorie. When you look at the industry projections for railcar production in 2024 on a calendar basis, a lot of those forecasts are down a decent amount. So I’m curious if you could talk about your view on this broader industry production as we move into year fiscal ’24. And based on the backlog you have today, including the orders you’ve just received here in June, can you speak to your level of visibility to production in 2024 at this point?

Lorie Tekorius: I would say for 2024, we’ve got really good visibility, we still do have some pockets where we have open production, but we feel very comfortable about the ability to fill up that space. Right now what we’re seeing in North America is pretty steady production coming out of where we’re going to close out the fourth quarter. We don’t have any big ramp ups or any big ramp downs, we’ll have some adjustments. But some of the recent orders that we’ve received really give us great visibility and continuity on a number of our production lines. The other interesting thing that if you’re just looking at the North American statistics, you also have to look at Europe, where we’re continuing to focus on how we can serve that market. And we’re focused on ramping up production in Europe as well, it’s not quite the same volume, as you would see here in North America. But that will be one of the benefits to our deliveries in our fiscal 2024.

Justin Long: Okay, great, that’s helpful. And I guess shifting to manufacturing gross margins, it was good to see the sequential improvement. Could you speak to how much of that came in North America versus Europe? And then as we think about manufacturing gross margins going forward, what’s your comfort that we’ll continue to see some sequential momentum moving into fourth quarter and early next year?

Justin Roberts: Hey, Justin, this is Justin. I think we saw improvement, both in North America and Europe in the quarter, North America has a disproportionate weighting there, just from a size perspective of both operations performed very well and improved sequentially. And then going forward, we would expect that to continue maybe not quite to the same extent, but we do see improvement in Q4 and into fiscal 2024, which is kind of hard to believe we’re talking about already, but such as life.

Justin Long: Okay, good to hear. I’ll leave it at that. Thanks for the time.

Lorie Tekorius: Thanks, Justin.

Operator: Our next question will come from Bascome Majors with Susquehanna. You may now go ahead.

Bascome Majors : Thank you. As we look forward, I realize we’re still away from next fiscal year. But do you have a sense of the cadence of when you’ll put cars on the balance sheet and off the balance sheet in the manufacturing business?