The Greenbrier Companies, Inc.

Hello, and welcome to the Greenbrier Company's second quarter of fiscal 2024 earnings conference call. Following today's presentation, we will conduct a question and answer session. Each analyst should limit themselves to one question with a follow-up if needed. 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, Gary. Good morning, everyone, and welcome to our second quarter of Fiscal 24 conference call. Today, I'm joined by Lori Ticorius, Greenbrier's CEO and President, Brian Comstock, Executive Vice President and President of the Americas, and Adrian Downs, Senior Vice President and CFO. Following our update on Greenbrier's Q2 performance and an update on our outlook for the remainder of fiscal 24, 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 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 2024 and beyond to differ materially from those expressed in any forward-looking statement made by or on behalf of Greenbrier. You will also notice that today we will refer to the words recurring revenue throughout our presentation and comments today. Recurring revenue is defined as leasing and management services revenue that excludes the impact of syndication activity. And with that, I will turn it over to Lori.

Thank you Justin and good morning everyone. Greenberg once again delivered strong performance as we move through our fiscal year. We're seeing operating efficiencies continue to improve and we're progressing on our organization-wide initiatives. We have good momentum as we head into the second half of our year and beyond. We remain confident in Greenberg's multi-year Better Together strategy and the three fundamental priorities underlying it. As a reminder, First is maintaining our manufacturing leadership position across our geographies. Second is meeting our customers' needs while optimizing our industrial footprint for efficiency and margin enhancement. And third is the pursuit of sustained, disciplined growth in leasing and services. Through Better Together, we're committed to enhancing our manufacturing performance while growing recurring revenue and cash flow by investing in the lease fleet. Turning to our results, we generated over $860 million in revenue and earnings per share of $1.03. A consolidated gross margin of 14% represents our second consecutive quarter of mid-teens margin. It reflects solid operating performance in manufacturing and leasing and management services, partially offset by lower wheelset volumes in maintenance services due to a milder winter. Last quarter, we said that one quarter of mid-teens margin was a great start towards our long-term strategic goal. It is still not a trend. We're continuing to work on facility rationalizations in manufacturing and maintenance services that commenced in fiscal 2023, advancing our make versus buy strategy, and remaining focused on enhancing margins. We also continue our long track record of product innovation. while incorporating sustainability into our designs. As you might recall, in 2021, we introduced our high-strength steel gondola. In Q2, we successfully launched our ultra-high-strength gondola. The gondolas use an innovative formula for high-strength, lighter-weight steel, reducing each gondola's unloaded weight by up to 15,000 pounds. We also successfully constructed and tested a new 89-foot slab tilt flat car built for heavy industrial applications, as well as a new high-strength box car door. Our focus on innovation, manufacturing excellence, and sustainability is earning Greenbar favorable notices. Recently, CN recognized us for our efforts and commitment to sustainability as part of its Echo Connections partnership program. This is the first year CN included suppliers to its recognition program, and Greenbrier was one of only seven supply chain partners to receive the award. While accolades are always nice to receive, most importantly, our emphasis on innovating and elevating our manufacturing expertise supports our leadership position across the markets we serve. This performance continued in Q2, with Greenbrier receiving a nice balance of orders across our geographies. Market conditions for rail car leasing remain positive. Our expanded leasing strategy is gaining traction in both North America and Europe. This is a critical element of our multi-year plan and is expected to result in the doubling of recurring revenues within the next five years. Importantly, our balance sheet remains very healthy, allowing us to invest in our business while continuing to return capital to shareholders. This has been our longstanding and preferred approach to capital allocation. I'm pleased to report our board declared a quarterly dividend of 30 cents per share this week, representing our 40th consecutive quarterly dividend. In the meantime, the economy in North America has been resilient. The probability of a soft landing is increasing, and the Fed has signaled it will likely make three interest rate cuts by the end of 2024. Of course, This year is also a U.S. presidential election year, not to mention national elections in the EU and Mexico. Our current disciplined approach in our core North American railcar market has attracted new capital to asset-based investing in railcars, which is encouraging. In Europe, while the economy is still lagging the U.S., the growth projections have been trimmed once again by the European Central Bank, but we're building momentum Stable demand across railcar types in both North America and Europe underpin new builds and lease renewals. The southern border remains a focus as we address developments that could impact deliveries from our suppliers or to our customers in real time. Border crossing issues impacted us at various times during the quarter, but the work performed by our skilled manufacturing and logistics colleagues have successfully avoided severe impacts on Greenbrier. Sustained high performance across our business is in view. Our commercial team with its powerful lease origination capabilities continues to outperform, giving us excellent near-term and longer-term visibility into manufacturing and steadily building our stream of lease revenues. We're confident in the long-term strategy and multi-year targets and look forward to sharing our progress on future calls. Now, before I conclude my remarks, I'd like to acknowledge the contributions of Adrian Downs, who's been at Greenbar since 2013. As we announced earlier this year, Adrian will be stepping down from his role as CFO. Adrian's service to Greenbar during challenging times, including the pandemic, has been essential. During his time here, Greenbar strengthened its balance sheet and expanded its global operations platform, integrating accounting and finance functions as we grew. We're incredibly grateful for his contributions to Greenbrier over the years and wish him all the best in his future endeavors. Thank you, Adrian. And with that, let me turn the call over to Brian Comstock, who will discuss our activities for the quarter in greater detail and review market conditions.