The Greenbrier Companies, Inc.

Hello and welcome to the Greenbrier Company's fourth quarter of fiscal 2021 earnings conference call. Following today's presentation, we will conduct a question and answer session. Each analyst should limit themselves to only two questions. Until that time, all lines will be in a listen-only mode. At the request of the Greenbrier Companies, this conference call is being recorded for instant replay purposes. At this time, I would like to turn the conference over to Mr. Justin Roberts, Vice President and Treasurer. Mr. Roberts, you may begin.

Thank you, Eileen. Good morning, everyone, and welcome to our fourth quarter and fiscal 2021 conference call. Today, Greenbrier announced that effective March 1st, our founder, Bill Furman, will transition to the role of Executive Chairman and the appointment of Lori Takorius as Greenbrier's next CEO and President. In addition to Bill and Lori, Brian Comstock, Executive Vice President and Chief Commercial and Leasing Officer, and Adrian Downs, Senior Vice President and CFO, are participating in today's call. Following our update on Greenbrier's performance and our outlook for fiscal 2022, we will open up the call for questions. In addition to the press release issued this morning, additional financial information and key metrics can be found in a slide presentation posted today on the IRS 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 2022 and beyond to differ materially from those expressed in any forward-looking statement made by or on behalf of Greenbrier. And now I'll turn the call over to Bill.

Thank you, Justin, and good morning, everyone. As Justin indicated earlier today, we announced our board of directors has elected Lori Tokorius, Greenbar's current president and chief operating officer, to be the company's next chief executive officer, a position she will assume on March 1, 2022. Lori and I, along with the board, have been working toward this goal for several years. Together, we've built a very strong talent bench. I'm very pleased with the teams we have in place for the future. And I'm also pleased with the strategy that Lori has evolved, which I think will take the company to higher peaks. I want to take this opportunity to congratulate Lori. Lori, I know you will do an outstanding job as Greenbar's next CEO, and I look forward to working with you through the transition. I'm very proud of you. Everyone joining us today should understand our joint commitment to ensure the smoothest possible transition. When Lori becomes CEO, I will concurrently assume the newly created role of executive chair until September 2022, when I'll retire from an executive position. In this role, my focus is on continued work with our board of directors, as well as support of Lori in her transition to CEO. I will remain as a board member until 2024. This transition is coming at an important and exciting time, for the company. As we've discussed over the past several quarters, the recovery in markets is gaining momentum. Our fiscal fourth quarter was Greenbar's strongest quarter of the year. Greenbar's fiscal fourth quarter was in fact our fifth quarter in a row with increased new railcar order activity. It was also Greenbar's third consecutive quarter with a book-to-bill ratio over one, leading to a book-to-bill of 1.33, for fiscal 2021. The spread of the Delta variant has created challenges worldwide for business and society, and it has made the pace of the recovery partly unpredictable. It continues to impact Greenbrier on a personal level. Both vaccinated and unvaccinated individuals across our workforce have experienced isolated COVID-19 infections during the fourth quarter. I was one of them, along with my wife, Jane, despite being both double vaccinated. Fortunately, our symptoms were mild and we have fully recovered. Thanks to our COVID-19 safety practices, we have avoided widespread outbreaks at all facilities. Sadly, however, we recently lost another colleague, Pedro Gonzalez. Pedro was an 18-year veteran of the GRS Kansas City Wheel Shop He is the 10th member of the Greenbar family we have lost to COVID-19. We are supporting his family during this difficult time. We're urging people to get vaccinated and to keep social distancing. The health and safety of our employees is paramount. We continue to maintain a vigilant posture, particularly as we integrate new manufacturing employees in response to expanding production capacity. Of course, The virus is not the only issue to be faced. Global markets have been impacted by labor shortages, supply chain disruptions, volatile commodity markets and other disruptive headwinds. These factors persist into green virus fiscal 2022. And this is all in addition to what I would term the regular challenges for a manufacturing, maintenance and leasing business as we transition from low production after a rapid downturn and then a rapid spike up in employment rates to higher employment and greater levels of production activity. So this is an environment that demands the discipline strategy we've adhered to since the outset of the pandemic. It also demands our best efforts. Specifically, our strategy has been to first maintain a strong liquidity base and balance sheet. Next, to survive the COVID-19 and economic crisis by safely operating our factories while generating cash flow. Everyone knows that an upturned cash is required to replenish working capital and for growth. And finally, we needed to prepare for and manage well during the economic recovery and the forward momentum in our markets, which is now well underway. Our actions have been purposeful and successful. and they're the result of a strong team effort. A flexible approach and scalable manufacturing capacity are both central to Greenbar's response to an improving market outlook. The demand outlook is strong. It's strong in all of our markets globally, notwithstanding the impact of elevated steel and other input prices to our customers' decision-making processes. I'm proud of how seamlessly our teams are ramping up to 22 production lines by the end of November from just nine lines of operation at lower rates of production only nine months ago. This phase of our strategy has presented novel challenges and operational risks as we add a large number of new production lines, many involving product changeovers and adding new people. Safety, availability of labor, and supply chain constraints are key priorities for Greenbrier to manage as production increases. Importantly, our liquidity position remains strong. Maintaining it remains a top priority. We are balancing efficient management of working capital with protecting our supply chain and ensuring production continuity. Before I conclude today and hand the call over to Laurie, I'd like to remind our listeners that we do not expect the market recovery to follow a smooth, straight line. Our industry is still recovering from the shock caused by the pandemic. Uncertainties and obstacles do remain. It is clear, however, that our strategy has produced and is producing results, and I believe we are well on the other side of where we have been. We're also pleased to have recently increased the scale of our leasing fleet through our GBX Leasing Joint Venture. Our lease investment provides Greenbar tax-advantaged cash flows. It reduces, and in the future will continue to reduce, exposure to the inherent cyclicality of freight, transportation, equipment, manufacturing, and other sources. At GBX Leasing, we are building a long-term annuity stream with solid credits, longer and balanced maturity ladders, and product diversities. While doing so, we are foregoing some immediate revenue recognition in the short term to build for the future. All factors considered, Greenbrier is extremely well positioned to navigate the months ahead and deliver further value to our shareholders. Before electing Lori as CEO, we thought it important that she sketch out her strategy for the future. She spent four or five months thoughtfully putting together that strategy. In the future, we'll be happy to share the changes that this will bring. But as a headline, we look to technology, diversification, and services in other ways to take the cycle out of the inherent manufacturing business cycle and grow for the future. With that, I'm pleased to turn the call over, and with my further congratulations to our next CEO, Lori Tagoreas. Lori?