Greenbrier Companies Inc at Wells Fargo Industrials Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Allison Poliniak - Wells Fargo Securities, LLC - Analyst : So one, probably not so surprising is a dominant theme is, are we or are we not going into recession? Even before you guys get going.

Question: Allison Poliniak - Wells Fargo Securities, LLC - Analyst : Maybe you can give us some perspective on order increase, what you guys are seeing out there from your customer base at this point.

Question: Allison Poliniak - Wells Fargo Securities, LLC - Analyst : Obviously, these things are made with a lot of steel. Is the inflation impact putting some orders on pause right now that you would have expected to execute at this point?

Question: Allison Poliniak - Wells Fargo Securities, LLC - Analyst : Okay. That's fair enough. And then one of the things I might touch on with you, one of the Class 1 rails was getting frustrated, working to temper some of the cars that are on the rail, blaming it on basically the customers having too much cars. GATX always had talked about that 1 mile per hour impacts about 50,000 cars. Is it a car problem? Is it something else? Just any perspective. And if it is just a car problem and they get rid of them, does that mean we're going back into storage again and no more orders? Just any thoughts [around that].

Question: Allison Poliniak - Wells Fargo Securities, LLC - Analyst : (laughter)

Question: Allison Poliniak - Wells Fargo Securities, LLC - Analyst : Got it. And then you touched on sort of replacement and so forth. What is the right number replacement? Obviously, you mentioned PSR. We were focused on asset utilization. Is a 40,000 to 50,000 replacement cycle still appropriate here?

Question: Allison Poliniak - Wells Fargo Securities, LLC - Analyst : And you mentioned -- go back to RailPulse, we had Paul Titterton earlier today, talking to RailPulse. And I would say I would love to hear your perspective why now, why wasn't this done before, and what's the buy-in? I know [Norfolk], they're obviously part of this. But what is the buy-in from the other Class 1 rails at this point? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 04, 2022 / 6:40PM, GBX.N - Greenbrier Companies Inc at Wells Fargo Industrials Conference

Question: Allison Poliniak - Wells Fargo Securities, LLC - Analyst : Would we assume it's going to be more, I would say, the cars that would be outfitted, be more consumer facing or are industrials interested in this kind of technology as well?

Question: Allison Poliniak - Wells Fargo Securities, LLC - Analyst : And I have to say when we think about cycles, the more they change, the more they stay the same. Anything different or unique this cycle that you guys -- obviously, you bought a competitor so it's really you and Trinity as key leaders here in this market. Anything else fundamentally has changed maybe to make it stronger in terms of maybe pricing, rationale, or any thoughts there?

Question: Allison Poliniak - Wells Fargo Securities, LLC - Analyst : So now we've got to talk to leasing. One of your peers has always gotten hit on saying you are a manufacturing or a leasing company. Which one is driving the bus? How are you viewing the impacts of -- I guess, first of all, why did you enter the leasing business? How do you manage that balance between manufacturing for profit but not overbuilding versus just supporting lease leads? Just any thoughts there.

Question: Allison Poliniak - Wells Fargo Securities, LLC - Analyst : That's helpful. And then intermodal, it's been one of those segments that should be going through the rails. It's been challenged. I think we saw some orders for intermodal today. What is your view on that market in terms of long-term opportunity growth? I know you are one of the leaders in building there.

Question: Allison Poliniak - Wells Fargo Securities, LLC - Analyst : And one of our earlier presentations talked a lot about Europe, the benefit of Europe. You just mentioned you had gone there which is why I'm looking at you. Could you maybe talk to what you are seeing? Could you maybe compare the European market versus North America market to get a better sense of the opportunity set that's there for you guys right now?

Question: Allison Poliniak - Wells Fargo Securities, LLC - Analyst : Understood. And your manufacturing facility in Poland [not far off] -- away from the conflict. Any impact to that facility at this point from an operational standpoint?

Question: Allison Poliniak - Wells Fargo Securities, LLC - Analyst : And you had mentioned labor previously. I know it's been a common theme or a challenge for a lot of folks. Omicron was -- it seemed like that pace had passed. Where do you guys feel like you stand in that labor? Have you caught up to what your needs are going to be for the balance of the year in production?

Question: Allison Poliniak - Wells Fargo Securities, LLC - Analyst : And then a similar challenge, components. You guys had called it out on your earnings call. What's the big issue for you? How are you guys managing it? Does it seem like something that's going to ease in the back half of the year for you?

Question: Allison Poliniak - Wells Fargo Securities, LLC - Analyst : And then I guess probably part of that is the second half ramp. We're getting a lot of pushback, like is it really going to happen? Maybe articulate your confidence behind that second half ramp in [earnings] for you.

Question: Allison Poliniak - Wells Fargo Securities, LLC - Analyst : And on a portfolio question, obviously entering leasing business, wheels, repairs and parts, it is a question I always ask you. Where does it stand within the portfolio today? Is it something that is still core to Greenbrier over the long term?

Question: Allison Poliniak - Wells Fargo Securities, LLC - Analyst : And then in line with that, the leasing, obviously, you're building out in North America, would this be a good vehicle to then take you to Europe? GATX was talking about the growth; you were mentioning the growth there. Would this be something that would be interesting for Greenbrier?

Question: Allison Poliniak - Wells Fargo Securities, LLC - Analyst : And then Greenbrier has done a great job over the years. You're in Brazil and you're in Poland. What would be your next market? Is there any other market that's very interesting? I mean, we're always hearing about Australia; it's a great market there. Is there any vertical or any regions or geographies that you guys you are looking at today?

Question: Allison Poliniak - Wells Fargo Securities, LLC - Analyst : That's fair. More to come, okay. And then obviously, Lorie hasn't sort of come out with her new strategic rationale. I guess from your perspective -- not to put you on the hot seat -- but what do you think she brings to Greenbrier in terms of taking it to the next level?

Question: Allison Poliniak - Wells Fargo Securities, LLC - Analyst : That's great. I think we're actually running out of time already, so I don't know if you want to leave any lasting or closing remarks with everybody.

Question: Allison Poliniak - Wells Fargo Securities, LLC - Analyst : Great. Thank you for the time.