The Greenbrier Companies, Inc. (NYSE:GBX) Q1 2015 Earnings Conference Call - Final Transcript

Jan 07, 2015 • 11:00 am ET

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The Greenbrier Companies, Inc. (NYSE:GBX) Q1 2015 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Hello and welcome to the Greenbrier Companies First Quarter of Fiscal Year 2015 Earnings Conference Call. Following today's presentation, we will conduct a question-and-answer session. [Operator Instructions] At the request of Greenbrier Companies, this conference call is being recorded for instant replay purposes.

At this time, I would now like to turn the call over to Lorie Tekorius, Senior Vice President and Treasurer. Ms. Tekorius, you may begin.

Executive
Lorie Tekorius

Thank you, Melinda, and good morning, everyone. And welcome to Greenbrier's first quarter fiscal year 2015 conference call. On today's call, I'm joined by our Chairman and CEO, Bill Furman,and CFO, Mark Rittenbaum. We'll discuss our results for the quarter ended November 30, 2014 and comment on our outlook for the rest of 2015. After that, we will open up the call for questions. In addition to the press release issued this morning, which includes supplemental data, more financial information and key metrics can be found on the presentation posted today on the IR section of our website.

As always, matters discussed on this 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 2015 and beyond to differ materially from those expressed in any forward-looking statements made by or on behalf of Greenbrier.

So we kicked off our fiscal year with strong results continuing our momentum from 2014 with revenue, EBITDA and earnings exceeding our high expectations for the quarter as all of our operations performed very well. Driven by previously enacted operational measures and mix, first quarter aggregate gross margin reached a record 17.8% compared to 17.2% in the fourth quarter of 2014.

Broad-based orders totaled 14,100 new railcars valued at $1.24 billion during the period, driving backlog to a record level of 41,200 units, the highest in Greenbrier's history. Subsequent to quarter-end, we received additional orders for 3500 units valued at approximately $400 million.

Now I will turn it over to Bill to give some more color on the quarter.

Executive
William Furman

Thanks, Lorie. We are very pleased as our strong performance continues. This quarter, Greenbrier has announced record earnings, grown our diversified backlog and set 2015 expectations much higher. The reasons for this are a couple of important ones. The tailwinds that we expected were stronger than we expected with increased efficiencies in manufacturing, improving margins in manufacturing and in wheels and parts, execution in leasing, the return of the double-stack market and strong auto and other demand, which benefits our new and efficient automotive products.

In addition, the headwinds which we expected were weaker than we were concerned about, specifically our smoother than expected addition of new lines at our GIMSA joint venture, manufacturing operation in Mexico and a transition from a leased facility with Bombardier to a wholly owned facility in Mexico. We had much more efficient execution than we had earlier expected and even higher margins at those locations during a time