Greenbrier Companies,Inc。(GBX) 首席执行官 Bill Furman 在 2019年 第三季度业绩 - 收益电话会议记录

[机器翻译] 电话会议 · 2019年07月05日 · 107 次阅读 · 格林布赖尔

The Greenbrier Companies, Inc. (NYSE:GBX) Q3 2019 Results Earnings Conference Call July 2, 2019 11:00 AM ET

Greenbrier Companies,Inc。(纽约证券交易所股票代码:[GBX])2019年第3季度业绩收益电话会议2019年7月2日美国东部时间上午11:00


Justin Roberts - Vice President and Treasurer
William Furman - Chairman and Chief Executive Officer
Lorie Tekorius - EVP and Chief Operating Officer
Adrian Downes - SVP and Chief Financial Officer

  • Justin Roberts - 副总裁兼财务主管
  • William Furman - 董事长兼首席执行官
  • Lorie Tekorius - 执行副总裁兼首席运营官
  • Adrian Downes - 高级副总裁兼首席财务官


Justin Long - Stephens, Inc.
Matthew Elkott - Cowen & Company
Michael Baudendistel - Stifel, Nicolaus
Matthew Brooklier - Buckingham Research
Bascome Majors - Susquehanna Financial Group
Steve Barger - KeyBanc Capital Markets

  • Justin Long - Stephens,Inc。
  • Matthew Elkott - Cowen&Company
  • Michael Baudendistel - Stifel,Nicolaus
  • Matthew Brooklier - 白金汉研究
  • Bascome Majors - Susquehanna Financial Group
  • Steve Barger - KeyBanc Capital Markets


Hello and welcome to The Greenbrier Companies Third Quarter of Fiscal Year 2019 Earnings Conference Call. Following today's presentation, we will conduct a question-and-answer session. Each analyst should limit themselves to only two questions. Until that time, all lines will be in a listen-only mode. At the request of The Greenbrier Companies, this conference call is being recorded for instant replay purpose.
At this time, I'd like to turn over the conference over to Mr. Justin Roberts, Vice President and Treasurer. Mr. Roberts you may begin.

您好,欢迎来到Greenbrier公司2019财年第三季度收益电话会议。 在今天的演讲之后,我们将进行问答环节。 每个分析师应该只限于两个问题。 在此之前,所有线路都将处于只听模式。 应The Greenbrier Companies的要求,此电话会议正在录制,以便立即重播。

在这个时候,我想把会议交给副总统兼财务主管贾斯汀罗伯茨先生。 罗伯茨先生你可能会开始。


Thank you, Dustin. Good morning, everyone. And welcome to our third quarter conference call. On today's call, I'm joined by Greenbrier's Chairman and CEO, Bill Furman; Lorie Tekorius, Executive Vice President and COO; and Adrian Downes, Senior Vice President and CFO. They will discuss the results for the third quarter and provide an outlook for Greenbrier's fourth quarter of fiscal 2019. Following our introductory remarks, we will open up the call for questions.
In addition to the press release issued this morning which includes supplemental data, 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 2019 and beyond to differ materially from those expressed in any forward-looking statement made by or on behalf of Greenbrier.
And with that, I'll turn it over to Bill.

谢谢你,达斯汀。大家,早安。并欢迎参加我们的第三季度电话会议。在今天的电话会议上,我加入了Greenbrier的董事长兼首席执行官Bill Furman; Lorie Tekorius,执行副总裁兼首席运营官;和Adrian Downes,高级副总裁兼首席财务官。他们将讨论第三季度的结果,并提供Greenbrier 2019财年第四季度的展望。在我们的介绍性发言后,我们将打开电话提问。





Okay. Thank you, Justin. Good morning, everybody. In the third quarter, Greenbrier's core North American business produced strong revenue and margin gains.
Third quarter revenue grew by 30% compared to the second quarter and we achieved our highest consolidated gross margin of the year at more than 12%, an increase of over 400 basis points from last quarter. Manufacturing performance led the way for the gross margin of 13.3% as Greenbrier achieved these gains in our core business.
The momentum we expected in manufacturing during the second half of the fiscal year is materializing, led by improved operating efficiencies and increased railcar deliveries.
Another highlight of Greenbrier's third quarter included solid railcar activity, which we spoke to in the press release, and which Lorie and others will touch on this morning.
We expect our strongest earnings per share of the year during our fourth quarter of fiscal 2019 in accordance with earlier guidance.
Greenbrier's bottom line results in the quarter were impacted by non-cash goodwill impairment within our railcar repair operations, and that unit is continuing to undergo top to bottom review and reorganization.
In a moment, Lorie Tekorius will speak to our specific actions to turn the repair operations to sustained profitability.
Our Brazil joint venture also experienced an operating loss this quarter. We have been rightsizing the Brazil operation to reflect normalized demand and see this quarter as an anomaly. We expect deliveries to improve in Brazil beginning in the current quarter. As the Brazilian real concession renewal process ramps up, we expect deliveries to increase substantially in 2020 and beyond.
Clearly, the results from our first nine months will result in lower earnings per share for fiscal 2019 than previously guided. I believe much of this is timing and some due to preoccupation with earlier, publicly announced events.
Definitely, we've got a bad start in Europe, but we have aggressively been pursuing that. We think that we've turned the corner over there. We've been addressing the conditions, in summary, that have led to these results.
We are seeing monthly improvements in Gunderson, our European operations, reorganized in the second quarter and before that. And improvement in its operations will serve as a tailwind throughout the fourth quarter and beyond. In fact, those forces that have caused us to have a less-than-expected year should be turned into tailwinds in the coming quarters.
So, Adrian will discuss our full third quarter financial results and our current financial guidance in more detail during his remarks.
Our announced acquisition of ARI's manufacturing business is proceeding through regulatory review, consistent with our expectations. Acquisition-related activities in the third quarter demanded management attention, and this also impacted our ability to focus on other priorities in the quarter, affecting financial results.
We are confident that ARI will be highly accretive to Greenbrier once operations are fully integrated, serving a geographic diversification goal and goal scale and protection of our North American core manufacturing engineering business.







片刻之后,Lorie Tekorius将采取具体行动,将维修业务转变为持续盈利。








This is the extent of the comments we are able to provide today with respect to the ARI transaction.
Turning to overall economic data. US economy is growing at a slower rate than last quarter, still on a pace case greater than 2% GDP growth as May core inflation continues about the same rate. The next interest rate move from the US Federal Reserve, as most of you are aware, is more likely to be a cut as opposed to a hike and most people are forecasting as many as two cuts in the coming year.
Overall, low inflation and a more accommodating monetary policy in the United States should allow for GDP expansion through the remainder of this current year and into 2020. Major risks here in the economic sphere continue to be external shocks and trade or political uncertainty.
Turning to our sector year-to-date through June 22, volumes for all of the North American Class I railroads taken together have decreased 2.5% year-over-year. This is due in part to flooding throughout the Midwest, impacting grain shipments in additions to declines in coal intermodal and nonmetallic minerals, some of which related to trade.
The change in the number of railcars online has been roughly in line with the change in loadings volume. That is good for builders as we prefer to see it track together.
The Canadian railroads, however, are a bright spot, posting year-over-year loadings better than those of their US counterparts. For example, breaking down the North American loadings by country reveals the difference. Volumes for the US Class I railroads declined 3.7% year-over-year, while volumes for the two Canadian railroads have increased 2.6% year-over-year, led by Canadian Pacific's 5.7% volume growth. Average Class I railroads velocity has increased less than 1% in the trailing 12 months, less than many people seem to believe.
This major railroad performance has risen steadily over the year. Terminal dwell time is lower this quarter with average train velocity ticking up over the past three months. Car demand still remains strong across many car types.
Precision railroading, or PSR, to date, we have not seen significantly identifiable impacts stemming solely from the adoption of this system. It is receiving a great deal of attention by industry analysts and, of course, by every freight car builder and leasing company.
Intermodal shipments have been lower, in part due to uncertainties in trade policy, weather impacts and a softer spot rate market for truck shipping.
More recently, the transportation analytics firm, FTR, lowered its North American railcar delivery outlook for 2019 by over 11,000 railcars to 51, 396, an amazingly precise number. Anticipated deliveries. FTR also lowered its 2020 railcar delivery projections by approximately the same amount to 51,100 deliveries.
Nonetheless, there is a strong primarily replacement demand cycle over the next 18 months and, historically, Greenbrier has performed well in this type of market.
We believe the FTR reductions may be an overreaction to concerns about the economic cycle and trade-specific concerns that we're not certain about either.










最近,运输分析公司FTR将2019年的北美轨道车交付前景降低了11,000多辆,降至51,396辆,这是一个非常精确的数字。预期的交付。 FTR还将2020年的铁路运输预测下调了大约相同数量,达到51,100件。



We just had our June board meeting in Washington DC. We're tracking a number of very important issues on trade, including issues concerning China. And the Board affirmed the company's strategy, which is working.
Revenue has increased significantly and our drive for scale, one of the four pillars of our strategy, is working. We are strengthening our core North American business with the ARI acquisition. Our international diversification will payoff despite recent hiccups.
The results reported for our current quarter, as mentioned earlier, less than we originally forecast, will of course impact our annual totals. However, the fundamentals of our business are strong and improving and our strategy is sound. As Lorie will describe, our core North American manufacturing business has emerged from two of its more challenging quarters in recent memory and we're positioned for strong performance ahead.
Improvements will begin to produce tailwinds in the fourth quarter and future periods. We have a strong balance sheet, strong financial ratios even after the ARI acquisition and we have returned substantial dividends to shareholders with a 3% yield at our present prices. At these prices, Greenbrier is definitely undervalued by the market.
We're very grateful to all of our colleagues and industry friends, our customers who are working hard and support to Greenbrier's performance. We look forward to keeping you updated on our progress.
Lorie, over to you.







Lorie Tekorius

Thank you, Will. Good morning, everyone. I'll briefly provide some more details on Greenbrier's operating performance before Adrian addresses the financial details and outlook.
We delivered 6,500 railcar units and received orders for approximately 6,500 units, valued at $730 million. Orders in the quarter were for a broad range of railcar types, including tank cars, covered hoppers and boxcars. Our diversified backlog as of May 31 totaled 26,100 units, with an estimated value of $2.7 billion.
I'll highlight the moving pieces in what was a mixed third quarter. As for the positives, as Bill reminded you, we announced the pending acquisition of the manufacturing assets of ARI in a transaction valued at $400 million.
The production improvements predicted for the second half of the year began to materialize in the quarter, with a 40-percent-plus increase in deliveries, primarily in North America and strong margin performance.
And improvements in Europe in Gunderson occurred in the quarter with stronger performance expected in Q4.
On the flipside, the railcar repair business continued to struggle operationally and the Brazilian operations had a challenging quarter with minimal deliveries as a result of weak demand environment.
Now, I'll give a little bit more color on each of our operations. Our North American manufacturing had a strong performance this quarter. I'd like to take a moment and thank the GMO team, led by Alejandro Centurion, for the hard work and successful production activity this year.
We've increased production rates, while managing several production line changeovers. Several hundred employees were added safely across multiple locations. This is a testament to the strong manufacturing organization that's been built at Greenbrier over the years.
In Europe, a meeting of the supervisory board was held in mid-June. The new management team led by William Glenn, in close collaboration with Martin Graham from our GMO operations, laid out their plan to improve production and procurement efficiencies as well as a revived commercial plan.
We're executing on this plan and expect the headwinds from this operation to turn into tailwinds in Q4 and continuing into 2020.
In our wheels repair and parts operation, the evaluation and optimization of the railcar repair network continues. Since regaining direct control of our 12 legacy locations last August, four shops have been closed based on a review of the marketing being served and the ability to be profitable. A combination of the smaller networks and operating performance triggered the goodwill impairment this quarter.
As part of the network optimization, we continue to focus on how we can best serve our customers and improve the profitability at the remaining locations. We remain optimistic about the value of the repair networks to our integrated business model and we expect to have the network solidified with improved operating performance by the end of 2019.
The wheels and parts operations were also positive contributors to the performance of this segment during the quarter. Seasonally, the wheels business is stronger in our fiscal Q2 and Q3 due to winter weather and spring restocking and the parts business continues to have good demand and operate efficiently.







现在,我将为每个操作提供更多颜色。我们的北美制造业本季度表现强劲。我想花点时间感谢Alejandro Centurion领导的GMO团队今年的辛勤工作和成功的生产活动。


在欧洲,监督委员会会议于6月中旬举行。威廉·格伦(William Glenn)领导的新管理团队与马丁·格雷厄姆(Martin Graham)在GMO运营中密切合作,制定了提高生产和采购效率以及恢复商业计划的计划。





Turning to our leasing segments, the leasing revenue in the quarter was robust, reflecting high levels of syndication of externally sourced railcars. As a reminder, to meet the demand from our syndication partners, some syndication product is sourced from outside of our own manufacturing operation. This activity generates positive return, but is dilutive to gross margin percentage for this segment. Excluding this activity, the gross margin in leasing and services was about 43%.
Greenbrier Management Services, our proprietary railcar management provider, continues to grow both services provided to existing customers and its customer base with the addition of multiple new customers in this quarter.
In Brazil, our customers operate under a concession issued by the government. The renewal of existing concessions and issuance of new concessions has been ongoing for the last several quarters.
These delays in the issuance of the concessions impacted customers' ability to finance and purchase railcars. The benefit of these delays in issuing the concessions is the creation of substantial pent-up demand. We've seen modest improvement in order activity thus far Q4 with further improvements expected into fiscal 2020.
We have rightsized our operation for the current demand environment, while remaining nimble for when rail demand improves as expected in the near future.
In summary, our core North American operation continues to perform well. We've identified problematic areas of our business and are executing on specific changes to improve operationally and financially, building on the momentum achieved in Q3.
Our team is strong and dedicated to growth over the long-term. We're making the right strategic and structural decisions for the business, and I'm excited about our future.
Adrian will now discuss our third quarter performance and provide updates to guidance.


Greenbrier Management Services是我们专有的铁路车辆管理提供商,在本季度增加了多个新客户,继续发展为现有客户及其客户群提供的服务。







Adrian Downes

Thank you, Lorie. Good morning, everyone. Quarterly financial information and metrics are available in the press release and supplemental slide on our website. Given the discussion so far, I'll focus on a few additional details in the quarter and then provide additional information on our fiscal year 2019 guidance.
Highlights for the third quarter include net earnings attributable to Greenbrier of $15.2 million or $0.46 per share, including $10 million or $0.30 per share of goodwill impairment at the railcar repair operation and $4.3 million net of tax or $0.13 per share of costs related to the ARI acquisition.
Excluding these items, net earnings attributable to Greenbrier are $29.6 million or $0.89 per share.
Adjusted EBITDA of $84.4 million was 9.9% of revenue.
Revenue grew 30% to $856.2 million, our strongest quarterly result ever.
Deliveries grew over 40% sequentially, reflecting the strong performance in North American manufacturing. Approximately 13% of our 6,500 units delivered were outside the North American market with minimal activity occurring in Brazil. Internally-produced syndication activity was strong again this quarter, with 1,500 units delivered in the quarter. Approximately 10% of the 6,500 unit orders in the quarter were from international markets.
Aggregate gross margins of 12.4% significantly improved from Q2, led by a substantial increase in manufacturing gross margin to 13.3%. We expect gross margins to continue to improve in Q4. Manufacturing gross margins increased 640 basis points from Q2 and were almost 200 basis points higher than Q1.
We generated over $50 million of operating cash flow in the quarter. Greenbrier's balance sheet continues to be strong and flexible, with nearly $360 million of cash. Upon the closure of the ARI acquisition, we expect to continue to have strong liquidity.
Revisiting the subject of working capital, although higher sequentially, inventory levels started to decrease during the quarter, reflecting the stabilization of production rates and reduction of the outsourcing of lining for certain cars. We expect inventory levels to modestly decrease in the fourth quarter, reflecting the completion of the outsourcing work.
We believe our approach to capital deployment that emphasizes cash flow generation and return on capital employed will continue to create long-term shareholder value. This is supported by our history of steady dividend increases over the last several years.\
Today, we announced a $0.25 per share quarterly dividend, our 21st consecutive quarterly dividend. We've already paid dividends of over $123 million to shareholders under our current dividend program.
Moving to our outlook. Due to the many moving parts this year so far, we are providing Q4 guidance instead of annual guidance. Based on current business trends, we expect Greenbrier's fiscal Q4 to reflect – Q4 deliveries to be approximately 7,000 to 8,000 units, which includes about 100 to 200 units from Greenbrier Maxion in Brazil.








我们在本季度产生了超过5000万美元的运营现金流。 Greenbrier的资产负债表继续保持强劲和灵活,拥有近3.6亿美元的现金。收购ARI后,我们预计将继续拥有强劲的流动性。




转向我们的展望。由于今年到目前为止有许多活动部件,我们提供Q4指导而不是年度指导。根据目前的商业趋势,我们预计Greenbrier的第四季度财报将反映 - 第四季度交付量约为7,000至8,000台,其中包括来自巴西Greenbrier Maxion的约100至200台。

Q4 revenue will be nearly $1 billion. Q4 EPS will be $1.30 to $1.50 excluding any ARI acquisition costs, our benefits from the ARI acquisition. We expect Q4 to be the strongest operating quarter of the year.
Further for the fourth quarter of fiscal 2019, we expect positive Q4 operating cash flow; Q4 G&A expense of $50 million to $55 million which excludes any additional ARI acquisition cost; we expect Q4 gains on sale of about $5 million on $25 million of proceeds from those sales; we expect to invest about $15 million in our fleet in the quarter; Q4 capital expenditures of $40 million in manufacturing and wheels repair and parts. Combined with our fleet activity, our net capital expenditures will be about $30 million.
Q4 depreciation and amortization is expected to be about $20 million. With the challenges in Brazil in the third quarter, we now expect a Q4 loss of $1 million to $2 million in our unconsolidated affiliates line item. We expect Q4 2019 earnings attributable to non-controlling interest to be about $20 million.
Our Q4 consolidated tax rate is expected to be about 25%.
To sum up, we had a mixed Q3 with strong momentum in North American manufacturing, along with some headwinds. We acknowledge our Q4 outlook represents a reduction compared to our previous full-year delivery and earnings guidance.
As Bill and Lorie have mentioned, these changes primarily reflects the impact during the year of Brazil, repair, Europe as well as a few production disposition changes or delays.
As we discussed, remedial action has occurred or is well underway in all cases and we are optimistic that we will turn these headwinds into tailwinds as we finish fiscal 2019 and head into fiscal 2020.
Justin, now we'll open it up for questions.


此外,对于2019财年第四季度,我们预计第四季度的经营现金流量为正; Q4 G&A费用为5,000万美元至5500万美元,不包括任何额外的ARI购置费用;我们预计第四季度的销售额将从这些销售收入的2500万美元中获得约500万美元的收益;我们预计本季度将为我们的车队投资约1500万美元;第四季度制造和车轮维修及零件的资本支出为4000万美元。结合我们的船队活动,我们的净资本支出将约为3,000万美元。








Thank you. [Operator Instructions]. Our first question is from Justin Long. Go ahead. Your line is open.

谢谢。 [操作员说明]。 我们的第一个问题来自Justin Long。 前进。 你的线是开放的。

Justin Long

Thanks. And good morning.

谢谢。 早上好。


Good morning, Justin.


Justin Long

Morning. Maybe I could start with the orders in the quarter. I think they were probably better than most people expected, just given what we've seen with rail volumes and some of the macro uncertainties. Can you give us a little bit more color on the order environment? Is what we saw a pickup in demand sequentially or is it more related to Greenbrier getting market share? And then, any thoughts around the order environment going forward as well?

早上。 也许我可以从本季度的订单开始。 我认为它们可能比大多数人预期的要好,只是考虑到我们在轨道交通量和一些宏观不确定性方面所看到的情况。 您能否在订单环境中为我们提供更多颜色? 我们看到需求依次增加还是与Greenbrier获得市场份额更相关? 然后,关于订单环境的任何想法都会向前发展吗?


I'll let others comment, but we had a mixed grouping of orders throughout different car types. Obviously, some areas of the car portfolio are benefiting stronger than others. So, the petrochemicals and tank cars are still a strong demand. And even autos continue to show some strength. But I understand the view that the business is affected by declines in loadings. Actually, we have a different approach to market. And we still see strong visibility in the demand for railcars across our railcar portfolio.
Lastly, I'd say that, while we did have an adjustment in Europe and in Brazil, we do expect those franchises, which we believe to be very valuable, to turn around and so we're going to get some good tailwinds in the future, I think, from both of those markets. We're well on our way to fixing the European model and the orders we're taking there have strong margins in them.
If you want to give more color…

我会让其他人发表评论,但我们在不同的汽车类型中有不同的订单组合。 显然,汽车组合的某些领域比其他领域受益更强。 因此,石化产品和油罐车的需求依然强劲。 甚至汽车仍然显示出一些力量。 但我理解业务受到负载下降影响的观点。 实际上,我们采用不同的市场方法。 我们仍然看到铁路车辆组合对铁路车辆需求的强烈关注。

最后,我要说的是,虽然我们确实在欧洲和巴西进行了调整,但我们确实希望那些我们认为非常有价值的特许经营权能够扭转局面,因此我们将在这方面取得一些良好的阻力。 我认为,未来这两个市场都是如此。 我们正在努力修复欧洲模式,我们在那里的订单有很大的利润空间。


Lorie Tekorius

I think that's great color, Bill. Thank you. Just to emphasize, there was broad-based demand across all different car types, led a bit by the petrochemical industry, but we saw demand, I think, in every car type.

比尔,我觉得那颜色很棒。 谢谢。 需要强调的是,所有不同类型的汽车都有广泛的需求,石油化工行业引领了一些需求,但我认为,我认为每种车型都需求。

Adrian Downes

And, Justin, just to tack on to what they've said is, there is a lot of activity around and a lot of discussion around PSR and railroads owning fewer cars. But, again, as you've talked about before, that's not necessarily new news, but it does mean that shippers and lessors will need to own more cars, and so we're seeing a little bit of that benefit as well.

而且,Justin,只是为了说明他们所说的内容,围绕PSR和铁路拥有更少的汽车进行了大量的活动和讨论。 但是,正如你之前所说的那样,这不一定是新闻,但它确实意味着托运人和出租人需要拥有更多汽车,所以我们也看到了一点点好处。


That's really a great point, Justin. On that point, I want to just to speak to Greenbrier's strategy and model as it relates to this question. All of you have been watching the public comments of other companies, recognizing Greenbrier's trajectory is somewhat different, we are a manufacturing, engineering, origination and asset management company. We also have a strong aftermarket service business bundled together with all of that. We are in business to support our customers. Our customers include some very strong leasing companies, companies we've done business with for years and years, and we expect to continue to hold out product and to give product to those companies. We're very positive about the fact that ARI has strong relationship with GATX with whom we've dealt in the past. The industry needs to be able to not only – we need not to compete with our base of customers. In our case, we don't intend to do that. We intend to serve these customers and it serves us very well by feeding the machine and the integrated business model. So, I just wanted to add those two comments. I think we're getting some halo effect from that.

这真是一个很好的观点,贾斯汀。在这一点上,我想谈谈Greenbrier的战略和模型,因为它与这个问题有关。所有人都在关注其他公司的公众意见,认识到Greenbrier的发展轨迹有所不同,我们是一家制造,工程,发起和资产管理公司。我们还拥有强大的售后服务业务以及所有这些业务。我们的业务是支持我们的客户。我们的客户包括一些非常强大的租赁公司,我们已经与之合作多年的公司,我们期望继续支持产品并向这些公司提供产品。我们对ARI与我们过去处理过的GATX有着密切关系的事实非常积极。行业不仅需要 - 我们不需要与我们的客户群竞争。在我们的例子中,我们不打算这样做。我们打算为这些客户提供服务,并通过提供机器和集成的业务模式为我们提供服务。所以,我只想添加这两条评论。我想我们会从中获得一些光环效应。

Justin Long

Okay, that's all helpful. It sounds like, going forward, your expectation on orders is that they should be relatively stable sequentially, is that fair?

好的,这一切都很有帮助。 听起来,未来,您对订单的期望是它们应该相对稳定,这是否公平?

Lorie Tekorius

I think that is a fair statement. While we're not disclosing orders received during the fourth quarter, we have seen robust activity and expect that to continue.

我认为这是一个公平的陈述。 虽然我们没有披露第四季度收到的订单,但我们看到了强劲的活动并且预计会继续下去。

Justin Long

Okay, great. And then, secondly, and I'll pass it on, the build rate has been increasing sequentially every quarter this year, but I wanted to see if you had any initial thoughts about the production levels you will be targeting as we get into fiscal 2020. So, if I look at that fourth quarter guidance for 7,000 to 8,000 builds, is that the rate of production we should be thinking about for early next year as well?

好,太棒了。 然后,其次,我将传递它,今年每个季度的构建率一直在增加,但我想看看你是否对我们进入2020财年你将要瞄准的生产水平有任何初步想法 那么,如果我看一下7,000到8,000个版本的第四季度指导,那么明年年初我们应该考虑的生产率是多少?

Adrian Downes

Nice try on your effort to get the guidance for 2020.


Justin Long

I had to try.


Adrian Downes

I'm surprised you would want it since we kind of booted the guidance for 2019. But we do have very good momentum under our model on the commercial site, in relationships with customers, producing good products at a high rate of reliability. These things generally paid off. I don't agree with FTR that there's going to be that big of a shift, certainly by 2020. So, there is still momentum in our model for next year, and that will define what we do. We've given you some visibility for this quarter in that regard and I'm afraid that's about all we're going to say about it.

我很惊讶你会想要它,因为我们已经启动了2019年的指导。但是我们的模型在商业网站上,与客户的关系,以高可靠性生产优质产品确实具有非常好的势头。 这些东西通常得到了回报。 我不同意FTR的意见,即到2020年肯定会有这么大的转变。因此,我们明年的模型仍有动力,这将决定我们的工作。 在这方面,我们已经给了你一些关于这个季度的可见度,我担心这是我们要谈论的所有内容。

Lorie Tekorius

It wouldn't be a Greenbrier call if you and I didn't have a bit of a conversation back and forth.


Adrian Downes

That's certainly true. Yeah.


Lorie Tekorius

I would remind – you guys all know our production rates are very dependent on the car types that we're building and the timing of when our customers want those cars. So, depending on that need that will moderate or could moderate some of our production rates.

我想提醒一下 - 你们都知道我们的生产率非常依赖于我们正在建造的汽车类型以及我们的客户何时需要这些汽车的时间。 因此,取决于这种需求将会缓和或可能会降低我们的部分生产率。

Adrian Downes



Justin Long

Okay, fair enough. I'll leave it at that. Thanks for the time.

好的,公平的。 我会留下它。 谢谢你的时间。


Our next question is from Matt Elkott from Cowen. Go ahead. Your line is open.

我们的下一个问题来自Cowen的Matt Elkott。 前进。 你的线是开放的。


Good morning. Thank you, guys. Just a follow-up on the delivery question. Did you guys tell us how much of your current backlog is for fiscal 2020 deliveries?

早上好。 感谢你们。 只是对交付问题的后续跟进。 您是否告诉我们您目前的积压是用于2020财年的交付?


So, Matt, this is Justin. Right now, we're sitting with about 60% of 2020 activity in our backlog. Please don't try to triangulate further because it will only get muddier. But that's kind of what we're prepared to say at this point. So, we're entering 2020 in a very good situation again.

所以,马特,这是贾斯汀。 现在,我们在积压的事件中占据了2020年约60%的活动。 请不要尝试进一步三角测量,因为它只会变得更加混乱。 但这就是我们现在准备说的话。 所以,我们再次进入2020年的状况非常好。

Lorie Tekorius

And I would just clarify that Justin's interim 2020 is based on a May 31 number.





Lorie Tekorius

So, we still have another quarter to go of commercial activity to bolster our production schedule. And as you guys all know, at Greenbrier, we love having flexibility. We don't enjoy being fully booked up because it doesn't give us the opportunity to take advantage of near-term or short-term demand.

因此,我们还有另外一个季度的商业活动来支持我们的生产计划。 众所周知,在Greenbrier,我们喜欢灵活性。 我们不喜欢被完全预订,因为它没有让我们有机会利用近期或短期需求。


But Matt, I'd like you to – and thanks for joining us today. I'd like you to focus on the remarks I just made. We are in the middle of what is essentially a differentiation between the major car builders, those who lease which we do, those who serve customers and engineer, those that are potentially moving toward more of the leasing content. We will benefit from this differentiation because those leasing companies with whom we've had strong relationships, and others like GATX, we hope to have strong relationships in the future, need to make commitments for product and they need someone who is reliable to produce that product for them. We intend to be that company for those customers with whom we've had a strategic relationship. This will be a factor that you can't read about really in the literature on economics or industry forecasts. I think it's going to be a differentiating factor for Greenbrier. And there's multiyear orders that are coming up in that regard.

但马特,我希望你 - 并感谢今天加入我们。 我希望你专注于我刚才的评论。 我们正处于主要的汽车制造商,租赁我们的人,为客户和工程师服务的人,以及可能转向更多租赁内容的人之间的区别。 我们将受益于这种差异化,因为那些与我们有密切关系的租赁公司,以及其他像GATX,我们希望在未来建立牢固的关系,需要对产品做出承诺,他们需要一个可靠的人来生产 适合他们的产品。 我们打算成为那些与我们有战略关系的客户的公司。 这将是您在经济学或行业预测的文献中无法真正理解的因素。 我认为这将是Greenbrier的一个差异化因素。 并且在这方面有多年的订单。


That's very helpful commentary. And I know the ARI acquisition has not closed yet, but to go back to the order front, do you guys think that some of the order activity that you've got in the quarter which was very strong was influenced by the fact that people know that you're going to be ARI as well in the future? In other words, had you not announced that ARI was going to be your company, maybe you would not have gotten these many orders?

这是非常有用的评论。 而且我知道ARI的收购还没有结束,但要回到订单前面,你们有没有想到你们在本季度获得的一些非常强劲的订单活动受到人们知道这一事实的影响 那你将来也会成为ARI吗? 换句话说,如果你没有宣布ARI将成为你的公司,也许你不会得到这么多订单?


Personally, I don't believe that. I think the reaction from customers has been almost universally positive because it diversifies our product and it's a parallel product line giving us geographic diversity. I think it strengthens our position to serve our customers. I think our customers are happy about that, apropos my earlier remarks a few minutes ago.

就个人而言,我不相信。 我认为客户的反应几乎普遍是积极的,因为它使我们的产品多样化,它是一个平行的产品线,为我们提供地理多样性。 我认为它巩固了我们为客户服务的地位。 我认为我们的客户对此感到高兴,我几分钟前的言论。


Got it. I don't disagree with that, Bill. I was just wondering if customers know that you're going to be ARI, so they're placing orders with you knowing that you're going to have that capacity going forward for tank cars.
And just one final question. As you noted in my prepared remarks, there are many weak spots in rail traffic. Everything is pretty much down except for petroleum products. Intermodal, grain is going to be weak for the foreseeable future. Frac sand has basically declined significantly. Is there any – are you getting any calls from your customers about potential deferments of grain cars or frac sand cars or intermodal equipment?

得到它了。 比尔,我并不反对。 我只是想知道客户是否知道你将成为ARI,所以他们会向你发出订单,因为他们知道你将会拥有坦克车的容量。

还有一个最后的问题。 正如你在我准备的评论中所指出的那样,铁路交通中存在许多弱点。 除石油产品外,一切都很糟糕。 多式联运,粮食在可预见的未来将会疲软。 压裂砂基本上显着下降。 有没有 - 您是否接到过客户关于谷物汽车或压裂沙车或联运设备的潜在延期的电话?




Lorie Tekorius

Matt, this is Lorie. I would say that you're spot on, that there are some areas of weakness. What I would add, just for some additional color, is when we've had customers who are seeing – who have placed orders and are seeing weakness in particular car size, we will work with our customers to find a way to make it be a win-win situation for both Greenbrier and our customers where, because we have such a broad product mix, we can sometimes work with the customer to shift – let's say, they've ordered a particular car type and they would prefer something else because they are not seeing the same strength that they thought they were going to see. So, I do think that there is a potential for that over the rest of calendar 2019. But we believe that we have demonstrated that we know how to work with our customers and we try to find that solution as beneficial for both.

马特,这是洛丽。 我会说你有点发现,有些方面存在弱点。 我想补充的是,只是为了一些额外的颜色,当我们有客户看到 - 谁下订单并且看到特定汽车尺寸的弱点时,我们将与我们的客户合作,找到一种方法使其成为一个 Greenbrier和我们的客户都是双赢的,因为我们拥有如此广泛的产品组合,我们有时可以与客户合作转移 - 比方说,他们订购了特定的汽车类型,他们更喜欢别的东西,因为他们 没有看到他们认为他们会看到的相同的力量。 因此,我认为在2019年的其他日历中有可能实现这一点。但我们相信,我们已经证明我们知道如何与客户合作,并且我们试图找到对两者都有益的解决方案。


So, we are having at least one conversation with a prospective customer on that score. We also have – in the intermodal area, that's been hit with the intermodal loadings down and trade affecting intermodal. So, we have had very positive discussions, redeploying some of our capacity to do freight cars in an exchange of capacity types, but not to our financial detriment at all. This is what I said. We're very flexible. These long-term customers produce long-term revenue streams and cash flow for us. We have to keep them happy. That's the nature of our business. And there's a limited number of these big players in the marketplace. So, we have to pay close attention to them. We also have very strong and solid competitors – National Steel Car, Trinity Freight Car and others, Union Tank Car. So, we have to keep on top of our game, and that means satisfying your customers.

因此,我们在该分数上至少与潜在客户进行了一次对话。 我们还有 - 在多式联运领域,受到多式联运负荷下降和贸易影响多式联运的打击。 因此,我们进行了非常积极的讨论,重新部署了我们的一些能力,以交换容量类型来运输货车,但根本不会对我们的财务造成损害。 这就是我说的。 我们非常灵活。 这些长期客户为我们提供长期收入流和现金流。 我们必须让他们开心。 这就是我们业务的本质。 市场上这些大型玩家的数量有限。 所以,我们必须密切关注它们。 我们还有非常强大和稳固的竞争对手 - 全国钢铁车,Trinity货车和其他,联合坦克车。 因此,我们必须始终掌握我们的游戏,这意味着满足您的客户。


Great. Thank you very much.

非常好。 非常感谢你。


Our next question is from Mike Baudendistel from Stifel. Go ahead. Your line is open.

我们的下一个问题来自Stifel的Mike Baudendistel。 前进。 你的线是开放的。

Michael Baudendistel

Thank you. Just wanted to ask you on your updated delivery guidance. Just looking back at my model, looks like it was about 1,400-unit delta versus sort of what I had before. And I'm just trying to understand sort of what happened there. I was under the impression you sort of knew what you were going to build and what build slots and there was more visibility there.

谢谢。 只是想问你最新的送货指南。 回顾一下我的模型,看起来它大约是1400个单位的三角洲而不是我以前的那种。 而我只想了解那里发生的事情。 我的印象是你有点知道你要构建什么,以及什么构建插槽,那里有更多的可见性。

Lorie Tekorius

Sure. Mike, I'll answer that question. As we've encountered at different times, when we enter a year, we do our best to provide guidance and expectations based on the visibility we have. There are times when the timing or disposition of production activity can shift. So, that's what you're seeing, is a shift in primarily that disposition activity, as well as a little bit of weakness coming out of our international operations, Europe and Brazil. That being said, fourth quarter will still be a very strong delivery quarter and we expect it to be a very strong earnings quarter.

当然。 迈克,我会回答这个问题。 正如我们在不同时期遇到的那样,当我们进入一年时,我们会尽力根据我们的知名度提供指导和期望。 有时生产活动的时间或处置可能会发生变化。 所以,你所看到的,主要是转移活动的转变,以及我们的国际业务,欧洲和巴西的一些弱点。 话虽这么说,第四季度仍将是一个非常强劲的交付季度,我们预计它将是一个非常强劲的收益季度。


And I just have to step in and say, with respect to that weakness, which we tend to look at – sometimes we tend to look back, we've got to look forward to the quarters to come and the years to come. We think both Brazil and Europe are great franchises. To have a good franchise and build a franchise, you have to lose some games. In Europe, we booted it. We made a management change, that new management with William Glenn coming in. Just came back from an Amsterdam board meeting. They are really doing a great job reorganizing and I think that good things are on the way there. So, we just had a blip, and I think it's largely timing of that franchise kicking in.
Same thing at Brazil. Brazil has got some really good opportunity there. When these concessions are awarded in Brazil, the concessionaires have to buy new equipment, invest heavily as part of the government mandates. So, they put billions of dollars in each of these concessions. Now, Rumo has received its concession or is about to. The others are going to be tracking closely behind. And the problem down there for them will be that there is a limited car capacity in Brazil. It will be for a period of time a sellers market, but the question is when. Certainly, in this quarter, I think we've built 15 cars, an anomaly. I think, in future quarters, we'll see gradual improvement. As soon as the concessions are awarded, I think we'll turn around with visibility in the next four to five years.

我只需介入并说出我们倾向于关注的那个弱点 - 有时我们倾向于回顾,我们必须期待未来几个季度和未来几年。我们认为巴西和欧洲都是很棒的特许经营权。要拥有一支优秀的球队并建立一支球队,你必须输掉一些比赛。在欧洲,我们启动了它。我们改变了管理层,威廉·格伦的新管理人员进来了。刚从阿姆斯特丹董事会会议上回来。他们真的在重组方面做得很好,我认为好的东西正在那里。所以,我们只是昙花一现,而且我认为这很大程度上取决于特许经营权。


Michael Baudendistel

Got it. That's helpful. And just also wanted to ask you, I know you said you don't want to say much on ARI, but just wanted to ask you to make sure that sort of the statistic you said at the last call on that in April that being 20% accretive, the $30 million in synergies, timing, you expect to close by the end of the year, early next fiscal year. All those things are all still relevant.

得到它了。 这很有帮助。 而且还想问你,我知道你说你不想在ARI上说太多,但只是想让你确定你在4月的最后一次电话会议上说的那种统计数据是20 3000亿美元的协同效应,时间,预计将在今年年底,即下一财年初完成。 所有这些都仍然相关。

Adrian Downes

Yes. All of that is still relevant. That's still what we believe.

是。 所有这些仍然是相关的。 这仍然是我们的信念。

Michael Baudendistel

Got it. That's all I had. Thank you.

得到它了。 这就是我的全部。 谢谢。

Lorie Tekorius

Thank you.



Our next question is from Matt Brooklier from Buckingham Research. Go ahead. Your line is open.

我们的下一个问题来自Buckingham Research的Matt Brooklier。 前进。 你的线是开放的。

Matthew Brooklier

Hey. Thanks and good morning. Any sense as to how much of a margin or profit headwind, some of the hiccups that you had in Europe were on the quarter? I'm just trying to think of sequential progression in terms of the margins here.

嘿。 谢谢,早上好。 任何关于保证金或利润逆风的意义,你在欧洲遇到的一些打嗝都是在这个季度? 我只是想在这里考虑边际的连续进展。


That's a great question. Lorie is prepared to answer that question, or Justin or Adrian or me if they fail to answer it. That was a lot.

这是一个很好的问题。 Lorie准备回答这个问题,如果Justin或Adrian没有回答,我会准备回答。 那是很多。



So, the European impact was about 100 basis points to 150 basis points in Q3. We would actually expect to see another step-up in our margins in manufacturing in Q4 as Europe starts to return to a little bit more of a normalized level. So, kind of in line with what we've been saying all year, continue to see the stairstep progression and we'll see quite a bit of strength as we have our current run rates for the entire quarter, especially in North America.

因此,欧洲的影响在第三季度约为100个基点至150个基点。 我们实际上预计第四季度制造业的利润率会再次上升,因为欧洲开始恢复到正常水平。 因此,与我们一年四季所说的一致,继续看到阶梯式的进展,我们将看到相当多的力量,因为我们有整个季度的当前运行率,特别是在北美。

Adrian Downes

Manufacturing revenues will step up in Q4 and also the margin will step up. So, we'll get a double benefit.

第四季度制造业收入将增加,利润率也将上升。 所以,我们将获得双重好处。


I think what you might be looking for is just an order of magnitude in terms of the headwinds that we had in the quarter. I think the number is something like, between Europe and Brazil, which we think will not repeat. It will turn into a tailwind relatively speaking. And it was close to $10 million, wasn't it?

我认为你可能要寻找的只是我们在本季度遇到的逆风方面的一个数量级。 我认为欧洲和巴西之间的数字是相似的,我们认为这些数字不会重复。 相对来说它会变成顺风。 它接近1000万美元,不是吗?


Yes, that's correct.



All right.


Matthew Brooklier

Okay. That's all inclusive, headwinds and fiscal 3Q with everything.

好的。 这是包罗万象,逆风和财政三季度的一切。


That's just for those two parts. But repair was another big lump. So, as we work off – and we're well underway in repair in Europe to normalcy. In Brazil, it's a little more of a wildcard, but it's not going to be the aberration that it was in this quarter, at least we hope, knock on wood.
We can look at this from a relative perspective. The quarter was quite noisy with unexpected residual legacy issues after we had announced a write-off last quarter. We thought we had this pretty well corralled, but dogs and cats kept coming homes and we think we've got most of those corralled now. But that's what we think and we're expecting – relatively speaking, a positive from these areas as it relates to the drag we were carrying in the Q3.

这只是针对这两部分的。 但修理是另一个大问题。 因此,随着我们的努力 - 我们正在努力维持欧洲的正常状态。 在巴西,它更像是一个通配符,但它不会是这个季度的失常,至少我们希望,它会敲木头。

我们可以从相对的角度来看待这个问题。 在我们宣布上一季度核销后,该季度出现意外遗留问题。 我们认为我们已经将这个很好地保留了下来,但是狗和猫不停地回家,我们认为我们现在已经把大部分人带到了家里。 但这就是我们的想法和我们所期待的 - 相对来说,这些领域的积极因素与我们在第三季度所带来的拖累有关。

Lorie Tekorius

And just to be very, very clear. From a gross margin perspective, if you take into consideration repair operations, Brazil and Europe, you are talking about $10 million.

而且非常非常清楚。 从毛利率的角度来看,如果你考虑维修业务,巴西和欧洲,你谈的是1000万美元。

Matthew Brooklier

Okay. And then, second question, with respect to the repair operations, you've closed a couple of locations. What's left to do with that business in order to return it to your targeted margin goals and would you ever consider potentially selling that asset if you're not able to hit that target?

好的。 然后,第二个问题,关于维修操作,你已经关闭了几个地点。 为了使其恢复到您的目标保证金目标,该业务还剩下什么?如果您无法达到该目标,您是否会考虑出售该资产?

Lorie Tekorius

Sure. So, we just brought our legacy operations back into Greenbrier in August. So, while for some of us, it feels like it's been a long time, it really hasn't been that long, and I would say that we're moving fairly efficiently through an optimization and review of each of those facilities, working closely with some of the customers that we service in these geographic areas to see if there is a solution to us becoming more profitable. I think that by the fact that we've closed 4 out of 12 locations in just nine months, it goes to the fact that we are working quickly if we cannot figure out a way. We've also seen good operating performance improvements at several of the locations. So, we don't get into the details facility by facility, but we have set a very tight timeline to come to a final optimization of this network by the end of 2019. And again, we're taking into consideration a lot of things including how this network or this activity that we provide, how it works with our management services operation from an integrated business model perspective. As you are aware, we manage over 300,000 railcars for the North American fleet. As part of that management, oftentimes, we are managing the maintenance activities associated with those railcars. So, we're looking at these two activities as they go hand-in-hand.


Matthew Brooklier

Okay, very helpful. Appreciate the time.

好的,非常有帮助。 感谢时间。


Our next question is from Bascome Majors from Susquehanna. Go ahead. Your line is open.

我们的下一个问题来自Susquehanna的Bascome专业。 前进。 你的线是开放的。


Yeah. Thanks for taking my question. You talked a little bit about positive operating cash flow in the fourth quarter. Can we back it out and look at the full year? Is that swinging in some of the working capital headwinds you guys could have? Is the levy significant enough to deliver a positive operating cash or even free cash flow number for the entire year? And maybe a little bridge to – if that's something that could reverse, if not in the next quarter or next year. Thanks.

是啊。 谢谢你提出我的问题。 您在第四季度谈到了积极的经营现金流。 我们可以退出来看一整年吗? 在你们可能拥有的一些营运资金逆风中,这种情况是否在摆动? 征税是否足以提供全年的正营业现金甚至自由现金流? 也许还有一点桥梁 - 如果那可能会逆转,如果不是在下一季度或明年。 谢谢。


So, Bascome, this is Justin. I would say that, probably at this point, we'll be getting close to breakeven on an operating cash flow basis for the year. It's just that, with the robust working capital build, including inventories, but also since railcars held for syndication, that will – it's definitely reversing itself on the back half, but is also – we don't sell those assets down to zero as we enter the next fiscal year. We do carry some of that. So, we will be expected to have a strong fourth quarter, which will get us closer to breakeven on the operating cash flow and then will position us well for 2020.

所以,Bascome,这是贾斯汀。 我想说,可能在这一点上,我们将在今年的经营现金流基础上接近盈亏平衡。 就是这样,随着强大的营运资本建设,包括库存,以及铁路车辆为联合企业而持有,这将 - 它在后半部分肯定会逆转,但也是 - 我们不会将这些资产卖到零,因为我们 进入下一个会计年度。 我们确实带有一些。 因此,我们预计将在第四季度实现强劲增长,这将使我们更接近经营现金流的盈亏平衡,然后将为2020年做好准备。


Okay. And I know you had some questions on next year earlier and understand the reluctance to speak to it. But there's certainly a wide range of investor expectations out there and you've been willing to at least kind of share some directional thoughts on the outgoing year, even one or two quarters early in the past. From the $3-ish bogey for the full year that we sit at today, any sense of where this backlog cover gets you for next year? What are the range of expectations in your world [ph]? Just anything you can give us to help us a little bit, to get some comfort with at least the first quarter to next year, I think, would be really helpful. Thank you.

好的。 我知道你明年早些时候有一些问题,并且理解不愿与之交谈。 但肯定存在广泛的投资者期望,并且你愿意至少在过去的一年中分享一些方向性的想法,甚至过去一两个季度。 从我们今天坐下来的全年3美元的柏忌来看,这个积压封面会让你明年获得什么样的感觉? 你们世界的期望范围是多少[ph]? 我认为,任何你可以给我们一点帮助我们的东西,至少在明年第一季度获得一些安慰,将会非常有帮助。 谢谢。

Lorie Tekorius

Well, I'd say that we're excited with the momentum that we've achieved in the third quarter. We expect fourth quarter to continue that growth. We've mentioned that the North American market which is our largest market where we service over 370,000 railcars – I was corrected understating, so sometimes my conservatism can come out. But we're excited. Again, choppy market, the North American market. So, we don't want to be overly aggressive. We also have the fantastic opportunity to close on the manufacturing assets of ARI. So, it's going to quickly become difficult to distinguish between what is legacy Greenbrier and what is this combined network because we're going to be very focused on quickly assimilating and combining these operations and not continue to run them as distinct units. So, I would say – and this is saying a lot for those of you that have been following us – I'm excited about what our expectations will be for 2020. And I think that I'll turn it over to Justin or Adrian to see if they want to moderate my comments at all.

好吧,我会说我们对第三季度取得的成就感到兴奋。我们预计第四季度将继续增长。我们已经提到北美市场是我们最大的市场,我们服务超过370,000辆铁路车 - 我纠正了低调,所以有时我的保守主义可能会出现。但我们很兴奋。再次,波涛汹涌的市场,北美市场。所以,我们不想过于激进。我们也有机会关闭ARI的制造资产。因此,很快就难以区分传统的Greenbrier和什么是这个组合网络,因为我们将非常专注于快速同化和组合这些操作,而不是继续将它们作为不同的单元运行。所以,我想说 - 这对那些一直关注我们的人说了很多 - 我对我们对2020年的期望感到兴奋。我认为我会把它转交给Justin或Adrian来看看他们是否想要调整我的评论。


I wouldn't do that because they may do so. Look, that's a very optimistic positive statement from Lorie, for those of you who know Lorie's history as the chief financial officer. I think that we've got a company that is – from this current guidance you can construct $320 million – correct me, Justin – of EBITDA for the quarter. You can construct what is the earnings per share.
It seems to me we'd be hard-pressed to do worse than that, but I – next year, with baseline – we have changed the model dramatically. We have some real optionality in the international business as stuff can turn very quickly. We still have the Saudi Arabian optionality in the mining industry there. They're investing heavily. We are still trying to conclude the joint venture activities over there. So, these things can pop and break to the good as well as to the bad.
So, we've been beating ourselves up a little bit about not performing as well as we had hoped, but the truth is we've got a company that's undervalued with high dividend yield, a lot of strength in its balance sheet, a strong cash flow as we normalize production and inventory levels, we just hit record revenues, we're going to hit a record revenue for the quarter, we're running at a $4 billion rate if we can keep that up, the industry in North America is declining a little bit arguably, but I think the Street is looking for any negative news against the 10-year cycle. But our company is a lot different and a lot stronger than it was in the beginning of the last downturn. We're all looking for the beginning of the last. And the next downturn, it just doesn't look like in an election season that that's going to happen unless there is a shock from the outside.
So, baseline, I see a very – it would be very difficult for me to see how we do worse. Now, I don't want to curse this by saying that and then having something happen. So, that's kind of the best outlook we're going to be able to give you, I'm afraid.
But I think it's very positive. I agree with Lorie.

我不这样做,因为他们可能会这样做。看,这对Lorie来说是一个非常乐观的积极声明,对于那些了解Lorie作为首席财务官历史的人来说。我认为我们有一家公司 - 根据目前的指导,您可以构建3.2亿美元 - 纠正我,Justin - 本季度的EBITDA。您可以构建每股收益。

在我看来,我们很难做到比这更糟糕,但我 - 明年,基线 - 我们已经大大改变了模型。我们在国际业务中有一些真正的选择,因为事情可以很快转变。我们在采矿业仍然拥有沙特阿拉伯的选择权。他们投入巨资。我们仍在努力完成那边的合资活动。所以,这些东西可以弹出并打破好坏。


所以,基线,我看到一个非常 - 我很难看到我们如何做得更糟。现在,我不想诅咒这一点,然后说出来然后发生一些事情。所以,这是我们能够给你的最好的前景,我担心。



That's a – Lorie, to hear it from you with your history of conservatism. That's good to hear and I'm glad to hear that you guys are optimistic and we'll wait and see what you have to lay out for us in October. Thank you.

那是一个 - Lorie,听你讲述保守主义的历史。 这听起来很好,我很高兴听到你们很乐观,我们会等着看你们10月份为我们准备的东西。 谢谢。

Lorie Tekorius

Thanks, Bascome.



Thanks, Bascome.



Thank you, Bascome.



And our last question is from Steve Barger from KeyBanc Capital Markets. Go ahead. Your line is open.

我们的最后一个问题来自KeyBanc Capital Markets的Steve Barger。 前进。 你的线是开放的。


Thanks. Good morning.

谢谢。 早上好。


Good morning.


Lorie Tekorius

Hi, Steve.



Hi, Steve.



You've talked a lot on this call about international getting back on track. And just for Europe specifically, can you give us any more specifics on the commercial plan in terms of how you're changing your market strategy? And I'm just trying to gauge market opportunity versus the more recent reality.

你已经在这个关于国际重返正轨的电话中谈了很多。 特别是对于欧洲而言,您是否可以就如何改变市场策略向商业计划提供更多具体信息? 而我只是试图衡量市场机会与最近的现实。


Yes. We're going to stop doing stupid stuff, number on. That's a quote from the Navy, Admiral Fargo on our port, once you stop doing stupid stuff and the good stuff comes along a lot easier. We have William Glenn who is a veteran of our – as chief commercial officer, he's working very well with Alejandro Centurion. So, number one, we're screening customers. We're being much more selective about customers. And we took some really bad contracts, earlier administration. We weren't watching the store. We integrated well on all of the details, but we didn't pay attention to the business that they took on during the transition when we were seeking regulatory approval. Once they took that business on, then they made a second mistake of deploying too many cart blinds and too many factories. They should have specialized. William has got and Martin Graham, who is an industry veteran, have got both of those areas contained. That itself will make a major difference. The margins that they are seeing – we had some margins in the legacy contracts that were taken before the deal was approved that are producing 25% losses, and it's really tough to make money when you've got some major state-owned companies like BB producing at 25% loss. And there is no quarter over there in that environment if you make that kind of a contract. [indiscernible]. So, I think they've made a tremendous difference. They've put – William used to run Europe. He's very experienced with customers. He's calling on the right customers. I'm optimistic he will turn this around.
Just looking at Europe alone, the shift from the negative we had to the positive we expect in the next few quarters will make a big difference in our bottom line and it will continue to improve.
Now, the downside is European growth is not as – it's kind of flat. There's a lot of trade-related issues over there. Lot of noise. Brexit and so on. But we're still seeing a reasonably strong market and we're booking orders. And more importantly, we're building strong relationships over there with companies that we had neglected to go for some of the big German companies. So, that was a mistake. We corrected that mistake as well.

是。我们将停止做愚蠢的事情,数字。这是海军,海军上将法戈在我们的港口引用的一句话,一旦你停止做愚蠢的事情,好的东西来得更容易。我们有William Glenn,他是我们的资深人士 - 作为首席商务官,他与Alejandro Centurion合作得很好。所以,排名第一,我们正在筛选客户。我们对客户的选择性更强。我们采取了一些非常糟糕的合同,早期的管理。我们不是在看商店。我们很好地整合了所有细节,但在我们寻求监管部门批准时,我们没有注意他们在过渡期间所从事的业务。一旦他们开展了这项业务,他们又犯了第二个错误,即部署了太多的购物车百叶窗和太多的工厂。他们应该有专业。威廉已经和业内资深人士马丁·格雷厄姆一起得到了这两个领域。这本身将产生重大影响。他们看到的利润率 - 我们在交易批准之前的遗留合同中有一些利润,产生了25%的损失,当你有一些像BB这样的大型国有公司时,赚钱真的很难产量损失25%。如果您签订合同,那么在那个环境中就没有那个季度。 [不可分辨。所以,我认为他们已经取得了巨大的成就。他们已经把 - 威廉过去经营欧洲。他对客户非常有经验。他正在呼吁合适的客户。我很乐观他会扭转局面。


现在,不利的一面是欧洲的增长并非如此 - 它有点平淡。那边有很多与贸易有关的问题。很多噪音。英国退欧等。但我们仍然看到一个相当强劲的市场,我们预订订单。更重要的是,我们与那些我们忽略了一些德国大公司的公司建立了牢固的关系。所以,这是一个错误。我们也纠正了这个错误。


Got it. Thank you. Of the 6,500 orders this quarter, how many were international versus domestic?

得到它了。 谢谢。 在本季度的6,500个订单中,有多少是国际对国内?

Adrian Downes

About 10% international. Balance was domestic.

大约10%国际。 平衡是国内的。


And would you expect a similar mix in fiscal 4Q?






All right. And just one last quick one. Bill, you made the case that the stock is undervalued versus all you've done and all you have going on, but free cash flow has been hard to come by over the last couple of years as you've made these international investments and the leasing actions. Is it reasonable that 2020 gets back to free cash flow generation or are there still some investments and headwinds yet to come that will still keep that more depressed?

行。 最后一个快速的。 比尔,你说的是股票价值被低估了你所做的一切以及你所做的一切,但是在过去的几年里,由于你已经进行了这些国际投资,所以很难获得自由现金流。 租赁行动。 2020年回归自由现金流是否合理还是仍有一些投资和不利因素仍会让人更加沮丧?


Well, as to the general strategy, I think we have to digest what we've done. If we can get top line revenue, make that profitable at a $3.5 million run rate to $4 million run rate, if that could be achieved, that would be great. But we better be sure that the blocking and tackling is all being done. So, what does that mean for working capital? We should be able to tighten down working capital, be aggressive about G&A costs, look at capital allocation very closely. We do intend to continue our dividend. But we want to be sure we have a strong balance sheet for contingencies that are more downside type contingencies as opposed to looking for continuing its rapid pace of growth. We're not going to be doing any more international acquisitions in basic plan. But we're open always to opportunities. But we're just really trying to button things down in 2020 and get the house running in good order.

那么,关于总体战略,我认为我们必须消化我们所做的事情。 如果我们能够获得收入最高的收益,那么以350万美元的运行利率使其盈利至400万美元的运行率,如果可以实现,那将是非常好的。 但我们最好确保阻挡和攻击都在完成。 那么,这对营运资金意味着什么呢? 我们应该能够收紧营运资金,积极争取G&A成本,密切关注资本配置。 我们打算继续分红。 但我们希望确保我们拥有强大的资产负债表来应对更多下行型突发事件,而不是寻求持续快速增长。 我们不打算在基本计划中进行任何更多的国际收购。 但我们始终对机遇持开放态度。 但我们真的只是想在2020年把事情搞定下来并使房子运转良好。


So, unusual leasing things notwithstanding, you would expect better operating and free cash flow next year?


Lorie Tekorius










All right, thanks.


Lorie Tekorius

Thank you.



Thank you very much everyone for your time and attention today. And if you have any follow-up questions, please reach out to me. Have a great day. Thank you. And a happy Fourth of July.

非常感谢大家今天的时间和关注。 如果您有任何后续问题,请联系我。 祝你有美好的一天。 谢谢。 七月四日快乐。


That concludes today's conference. Thank you for participating. You may disconnect at this time.

今天的会议就此结束。 感谢您的参与。 您可以在此时断开连接。


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