The Greenbrier Companies, Inc. (NYSE:GBX) Q2 2015 Earnings Conference Call - Final Transcript
Apr 07, 2015 • 11:00 am ET
Hello, and welcome to the Greenbrier Companies' Second Quarter of Fiscal Year 2015 Earnings Conference Call. [Operator Instructions] At the request of Greenbrier Companies, this conference call is being recorded for instant replay purposes.
At this time, I would like to turn the conference over to Ms. Lorie Tekorius, Senior Vice President and Treasurer. Ms. Tekorius, you may begin.
Thank you, Mia. Good morning, everyone, and welcome to Greenbrier's second 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 February 28, 2015 and comment on our outlook for the second half 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 in our earnings desk posted today on our IR section of our website. Hopefully you can all find that.
As always matters discussed in this conference call includes 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.
Highlights for the quarter include record revenue, EBITDA, and earnings. We also delivered more railcars than in any prior quarter up 400 units or 8% compared to our previous high. Diversified orders totaled 10,100 new railcars, valued at 1.09 billion during the period, and broad-based demand drove backlog to a robust 46,000 units, valued at $4.78 billion, the highest in the company's history, and the sixth consecutive quarter of backlog growth. These backlog and orders figures exclude orders and awards for about a 1000 units received subsequent to quarter end. This year, we continue to demonstrate the strength of our diversified business model, our strategies as diversifying our product mix, driving more volume through our lease syndication models, and expanding capacity and efficiencies through our low-cost footprint are translating into higher gross margins, with second quarter aggregate gross margin reaching a record 19.9% compared to 17.8% in the first quarter. As a reminder, while gross margins continue to increase, we do not expect their track to be perfectly linear.
In addition to executing our three-pronged strategies, unlike many multinational companies, the strengthening of the U.S. dollar serves as a tailwind for Greenbrier. Most of our North American production occurs in Mexico, where our expenses, like labor and facilities costs, are in Pesos, but all of sales are in U.S. dollars. As a result, the strengthening USD lowers our input cost, and enhances margins. In Europe, our translated profits are lower with the strengthening of the U.S. dollar, but this is a minor headwind, since less than 10% of our total deliveries are in Europe, so net-net, the strengthening U.S. dollar during the quarter served