The Greenbrier panies(US:GBX)2025-10-28 22:02Financial Data and Key Metrics Changes - Greenbrier achieved record full-year diluted earnings per share and record core EBITDA, with an aggregate gross margin of nearly 19% and over $265 million in operating cash flow [4][16] - The company reported a return on invested capital of nearly 11%, within its long-term target range [4][17] - Fourth quarter revenue was nearly $760 million, with an operating income of $72 million, representing nearly 10% of revenue [16][17] - Core diluted earnings per share for the quarter was $1.26, and core EBITDA was $115 million, or 15% of revenue [17] Business Line Data and Key Metrics Changes - The leasing and fleet management business saw recurring revenue reach nearly $170 million, representing almost 50% growth from $113 million over two years [12][13] - The lease fleet grew by about 10% in fiscal 2025 to just over 17,000 units, with high fleet utilization at 98% [13] - New railcar orders in Q4 totaled approximately 2,400 units valued at over $300 million, bringing full-year orders to more than 13,000 units [10][11] Market Data and Key Metrics Changes - The backlog at the end of the year stood at 16,600 units valued at $2.2 billion, reflecting a healthy mix of product types and customers [11] - In North America, freight trends and tariff dynamics are moderating new railcar demand, leading many fleet owners to extend acquisition timelines [11] Company Strategy and Development Direction - Greenbrier is focused on operational excellence, innovation, and responsible growth, with a goal to double recurring revenues by fiscal 2028 [7][9] - The company is undergoing footprint rationalization in Europe, expecting annualized savings of $20 million from the closure of two additional facilities [7][20] - The integration of manufacturing and leasing is a defining feature of Greenbrier's model, providing stability and efficiency [8][14] Management's Comments on Operating Environment and Future Outlook - Management views the current market conditions as an opportunity to enhance production efficiency and reduce costs [10][11] - The company anticipates a stronger back half of fiscal 2026, driven by backlog orders and customer needs [41][50] - Management expressed confidence in the company's ability to generate cash flow and shareholder value for years to come [9][20] Other Important Information - Greenbrier's liquidity level was the highest in 10 quarters at over $800 million, consisting of more than $305 million in cash and almost $500 million in available borrowing capacity [17][18] - The board declared a dividend of $0.32 per share, marking the 46th consecutive quarterly dividend [18][19] Q&A Session Summary Question: Outlook on new railcar deliveries - Management indicated that they believe they are at the low point of the cycle and expect inquiries to increase, forecasting a production ramp-up in the back half of the year [24][25] Question: Impact of tariffs and cost inputs - Management stated that they are well-protected in their contracts regarding tariffs and can pivot if necessary [31] Question: Details on European facility closures - Management confirmed that they will be down to three facilities in Europe, maintaining the same production capacity [32][36] Question: First quarter outlook - Management is not inclined to provide quarterly guidance but expects stronger performance in the back half of the year [41][42] Question: Competitive landscape in new car builds - Management noted mixed pricing pressures, with more commoditized markets facing pricing pressure while specialty cars maintain discipline [63]