The Greenbrier Companies, Inc.

Hello, and welcome to the Greenbrier Company's third 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 Company, this conference call is being recorded for instant replay purposes. At this time, I'd like to turn the floor over to Mr. Justin Roberts, Vice President and Treasurer. Mr. Roberts, you may begin.

Thank you, Jamie. Good morning, everyone, and welcome to our third quarter of fiscal 2024 conference call. Today, I am joined by Lori Ticorius, Greenbrier's CEO and President, Brian Comstock, President of the Americas, and Michael Donfress, Senior Vice President, Finance, and soon-to-be CFO. Hello. Following our update on Greenbrier's Q3 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. Additionally, we will refer to recurring revenue throughout our comments today. Recurring revenue is defined as leasing and management services revenue, excluding the impact of syndication activity. And with that, I'll hand the call over to Lori.

Thank you, Justin. Good morning, everyone. I hope everyone had a safe and cool Independence Day. Before we launch into our quarterly results, I'd like to introduce Michael Donfris. As we announced in May, Michael's joined us as our new CFO. He brings considerable experience in leading financial operations and implementing strategy at major industrial businesses, including those operating in rail, freight, and equipment markets. Although Michael is with us here today, he gets a pass on Q3 results. But as he comes up to speed on Greenbrier, you can expect him to be a full participant when we discuss year-end results in October. I'll go ahead and get us started. I am very pleased to report that positive momentum has continued at Greenbrier. We are progressing with our multi-year Better Together strategy and getting great results. In the third quarter, we generated our highest earnings per share in EBITDA in over four and a half years, reaching a level last seen before the pandemic. Our consolidated gross margin remains in the mid-teens, with 90 basis points of sequential expansion. Operating efficiencies continue to improve, and we're advancing key initiatives across the organization, such as our leased fleet expansion and insourcing initiative in manufacturing. We're ahead of schedule to accomplish some of our strategic goals and on track for the rest. With that said, optimizing our operations is an exercise in continuous improvement, and I want to recognize everyone from the shop floor to the leadership team at Greenbrier for helping achieve early wins in our ambitious Better Together strategy. Turning to our results, we generated over $820 million in revenue during the third quarter. Consolidated gross margin of 15.1% is our third consecutive quarter of margins hitting the mid-teens, driven by product mix, syndication activity, and continuing operating efficiencies. We expect this momentum to continue. And as you may have seen in our press release, we narrowed the range of our revenue and delivery guidance. We expect the mix and cadence of deliveries will increase in the fourth quarter. We also expect consolidated gross margin in the mid-teens to continue. This is one year ahead of the plan we set forth at our investor day in April 2023. We believe that the efficiencies we've gained are sustainable. Of course, there will always be work to be done. We continue to evaluate our operational activities and are focused on other actions to optimize our business. Order performance continued in Q3 at steady levels. with Greenbrier receiving a diverse mix of orders by car type across our geographies. Our focus on innovation supports our market-leading position. Recently, for example, Greenbrier successfully introduced our ultra-high-strength steel gondola and our new Multimax Plus design for moving automobiles by rail that's been well-received by the market. Brian's going to share more on that in a minute, but this is meaningful for Greenbrier since freight rail moves nearly 75% of the new cars and light trucks purchased in the U.S. annually. We are proud to be a key supplier to the North American railway system. With lower carbon emissions, greater fuel efficiency, and superior capacity, it's clear that rail transport is central to developing a more environmentally friendly transportation system. In May... Greenbrier was honored by USA Today as one of America's climate leaders for 2024 based on our successful carbon reduction efforts from 2020 to 2022. We continue to make progress towards reducing Greenbrier's environmental footprint and are pleased to receive this recognition. Looking ahead, we see stable but good railcar demand across all our geographies. The current market is less volatile and consequently less prone to booms and busts than those of past decades. We at Greenbar are focused on sustained higher performance across our business and across markets. Our commercial team, with its strong lease origination capabilities, continues to outperform, giving us excellent near-term visibility into manufacturing and steadily building our stream of repeatable lease revenues and cash flow. We're confident in the long-term strategy and multi-year targets and look forward to sharing our progress on future calls. With that, I'll turn the call over to Brian Comstock. We'll chat about our activities for the quarter in greater detail and market conditions.