Greenbrier Companies Inc (GBX) Q4 2026 Earnings Call Transcript

Hello, and welcome to the Greenbrier Company's 4th Quarter 2026 Earnings Conference Call. Following today's presentation, we will conduct a question and answer session. 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 purposes. At this time, I would like to turn the conference over to Travis Williams, Head of Investor Relations. Mr. Williams, you may begin.

Thank you, Operator. Good afternoon, everyone, and welcome to our fourth quarter fiscal 2026 conference call. Today, I'm joined by Lori Tekorias, Greenbrier's CEO and President, Brian Comstock, Executive Vice President and President of the Americas, and Michael Donfress, Senior Vice President and CFO. Following their prepared remarks today, we will open the call for questions. Our earnings release and supplemental slide presentation can be found 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 2026 and beyond to differ materially from those expressed in the forward-looking statement made by or on behalf of Greenbrier. With that, I will turn it over to Lori.

Thank you, Travis, and good afternoon, everyone. We appreciate you joining us today. Fiscal 2026 was a year marked by significant macroeconomic factors, including geopolitical uncertainty, wars, shifting tariff and trade policies, and higher interest costs, leading many of our customers to extend the timing of investment decisions in long-life freight rail cars. In that environment, Green Bar delivered 15,400 railcars, generated revenue of $2.5 billion, and earned core earnings per share of $2.60, with aggregate gross margin of 13.6%. While these results were below what we expected at the start of the year and fourth quarter, given the market conditions, our performance remained quite resilient. The last period of similarly low industry activity was four years ago during our fiscal 2022. Comparing fiscal 26 to 22, Greenberg delivered about 4,500 fewer units, but delivered aggregate gross margin 330 basis points higher. Core EBITDA was 30% higher, and core net earnings were 76% higher. The changes that we've made over the last several years to our manufacturing footprint, our cost structure, and our lease strategy have raised Greenberg's performance at a low point in our cycle. We remain focused on actively managing the business to ensure stronger through-cycle performance. Shifting over to manufacturing, we adjusted production rates and headcount to match demand while continuing to complete new railcar designs for customers. Our insourcing investments to produce key components continue to lower costs across our North American network. In Europe, market conditions remain soft, and we continue to align our footprint and cost structure with demand as we drive for improved operational efficiency. Our leasing and fleet management team had a strong year. During fiscal 26, we grew our own lease fleet to approximately 21,000 railcars. And with high fleet utilization and stable lease renewals, this business continues to deliver strong performance. A larger fleet adds recurring revenue opportunities for Green Bar that make us less dependent on new railcar demand. Now, I'd like to take a minute to discuss how trade policy continues to affect our industry, particularly for tank cars. Earlier this month, a competitor filed petitions seeking duties on certain tank cars, and in September, U.S. Customs and Border Protection affirmed its determination regarding certain freight rail couplers on finished rail cars. We're vigorously defending our position in both of these matters, including appealing the freight rail coupler case to the Court of International Trade. On the tank car matter, to be perfectly clear, we've proudly built tank cars in Arkansas today and employ more than 2,000 individuals in the United States, including our amazing teams of engineers and procurement professionals. The USMCA continues to benefit most of our products and will work with policymakers to ensure greater understanding and reestablish consistent trade treatment of rail cars in the North American market. We're starting to see customer interest that was initially stymied beginning to return. Customer inquiries have increased across most rail car types, supported by growth in rail traffic, and the cost advantages of freight movement by rail compared to trucks, particularly at current fuel prices. Brian will provide more detail on the market and our commercial activity in just a few minutes. I did want to mention that our balance sheet continues to support our leasing growth strategy, and we ended the year with liquidity of nearly a billion dollars. And Michael will dive into the capital allocation details in his remarks. As I reflect on the long-term targets we established at our April 2023 Investor Day, I'm pleased with progress we've made. We are on track to double recurring revenue within five years, growing 55% to $175 million in fiscal 26. Our aggregate gross margin reached the mid-teens in fiscal 24 and 25 and remained solid at 13.6% in fiscal 26. And while ROIC fell below our targeted range in 2026, reflecting challenging manufacturing conditions coupled with significant investment in our growing lease fleet, it's actually averaged approximately 9% over the last three years. These results demonstrate the resilience of our business model and the benefits of our strategic transformation, positioning Greenbrier for stronger returns as market conditions improve. Looking ahead, our priorities remain. Employee safety, operational execution, cost discipline, strategic growth of the lease fleet, and improved through-cycle performance. Finally, before I turn the call over to Brian, I want to say a few words about our new board member, Manny Pearlman, who officially joins the board tomorrow. Manny brings extensive experience in investment management and capital markets, as well as deep financial expertise. We look forward to benefiting from his perspectives as we continue to execute our strategy and drive shareholder value. And with that, I'll turn the call over to Brian.

Thanks, Lori, and good afternoon, everyone. During the fourth quarter, commercial activity took a meaningful step forward. We received orders for 3,400 rail cars valued at approximately $600 million, our highest order value of the year, spanning a range of rail car types and end markets. These orders resulted in a book-to-bill ratio of nearly one, the highest we've seen since Q3 fiscal 2024. For the full year, orders totaled 12,200 rail cars valued at $1.9 billion. With many customers deferring purchasing decisions this year, I'm extremely proud of how our commercial team continued to win business. Greenbuyer's backlog increased to 14,000 railcars valued at $2.1 billion, the first sequential increase since fiscal 2024, with deliveries extending into fiscal 2028. Lease originations represented about 40 percent of orders for the year, reflecting the value of an integrated commercial model that offers customers both direct sales and leasing solutions. As a reminder, programmatic rail car restoration work is excluded from our orders, backlog, and deliveries. In fiscal 26, we performed this work on approximately 2,200 rail cars, making Greenbrier a clear market leader. Looking at the broader market, conditions are becoming more constructive. Rail traffic has grown across a broad range of commodities this year, and elevated fuel prices have improved rail's cost competitiveness relative to trucking. Recent operating results from the Class 1 railroads provide encouraging signs for the broader rail freight market. Several major railroads reported solid volume growth in the third quarter, while intermodal traffic has been particularly strong, reaching record levels and posting double-digit year-over-year growth in recent weeks. At the same time, railcar scrapping has outpaced new builds in North America over the past two years, reducing overall fleet size. Railcars and storage have fallen for four consecutive months and now are at the lowest levels in over four years. We believe these trends point to strengthening underlying freight demand and support a more constructive outlook for rail car manufacturing as customer confidence and capital investment recover. Additionally, tighter fleet supply supports improved lease rates and secondary market values and increases demand for rail car conversions, tank requalifications, and rejacking, as well as routine maintenance. FTR projects North American deliveries of 23,000 in 2026, growing to 31,400 in 2027, an increase of 37%, driven mostly by replacement demand. Our fiscal 27 straddles these periods, and based on industry order level observed over the past few quarters, we expect deliveries to be stronger and back half-weighted. These dynamics are creating momentum for our commercial activity. Over the past several weeks, inquiries have increased across rail card types, and we are converting more of them into orders. The tariff and trade matters Lori discussed are weighing on tank card demand, but we expect orders to resume as greater certainty emerges. Our leasing and fleet management business benefits directly from these fundamentals and delivered an outstanding year. We grew the old lease fleet by roughly 4,000 railcars or 23% to approximately 21,000 railcar fleet, primarily through disciplined secondary market acquisitions while maintaining utilization at 98 percent. Renewal rates remain well above expiring rates and recurring revenue reached $175 million for a year, up from $113 million when we established our goal of doubling recurring revenue. Turning to manufacturing, we optimized production rates in the fourth quarter to align with demand and adjusted headcount accordingly. Our teams designed and produced several new railcar types, which will benefit and support our back half forecast. Our insourcing investments continue to lower costs across our North American network. In maintenance services, wheel shipments exceeded our expectations with strong forward demand. outside north america demand in europe remains muted two years ago freight wagon deliveries in the region were nearly 14 000 units the industry will deliver fewer than 10 000 in 2026 and the 20 27 outlook is similar our lease syndication capabilities have been an important in supporting our European backlog, while large operating lessors have limited their purchases, and we continue to align our footprint and cost structure in the region with demand. In Brazil, Greenbrier Maxim delivered another strong quarter, with more than 400 railcar deliveries, including export orders supported by a favorable product mix and continued manufacturing efficiency. Across Green Bar's businesses, our capital markets team played an important role this year. Its syndication and secondary market activity generated liquidity, supported the growth of our lease fleet, and expanded our relationship with investors and operating lessors. In summary, fourth quarter orders and backlog improved. Our lease fleet grew significantly, and we kept production aligned with demand. We remain focused on order quality, disciplined fleet growth, and operating efficiency, and we enter fiscal 27 encouraged by the activity we are seeing. And with that, I'll turn the call over to Michael.

Thanks, Brian, and good afternoon to everyone. Revenue for the quarter was $591 million, up approximately 3% sequentially, primarily driven by growth of our lease fleet and favorable mix in manufacturing. Aggregate gross margin was 13.5%, driven by the timing of syndication activity and operational inefficiencies resulting from lower production volumes. Earnings from operations were $26 million or 4.3% of revenue. That included $4 million in facility-related rationalization costs for the quarter. We continue to evaluate and optimize our footprint to align capacity with demand. Our effective tax rate for the quarter was approximately 6.5 percent. That reflects the mix of income across jurisdictions where we operate, along with the impact of foreign currency. Earnings per share were 27 cents, excluding approximately 12 cents per share of facility related rationalization costs for earnings per share were $0.39, while core EBITDA was $72 million or 12% of revenue. For the full year, fiscal 2026 revenue was $2.5 billion and aggregate gross margin was 13.6%, reflecting continued cost discipline and the contribution from leasing and fleet management. Diluted earnings per share were $2.49 and core earnings per share were $2.60. Core EBITDA was $300 million or 12% of revenue. Now turning to the balance sheet, Greenbrier ended 2026 with total liquidity of $962 million, consisting of $235 million in cash and $727 million in available borrowing capacity. Our debt maturity profile is well-laddered, with no significant maturities until 2028. In addition, at fiscal year end, approximately 85% of our debt was fixed, with a weighted average interest rate of just over 4%. Operating cash flow for the fourth quarter was approximately $32 million. We maintain strong liquidity throughout the year and continue to invest in our lease fleet, supporting recurring revenue growth and long-term earnings potential. Our capital deployment reflects the flexibility of Greenbride's integrated business model. The timing and mix of railcar sales, leasing, and fleet investments can influence reported deliveries, revenue, capital expenditures, and cash flow from quarter to quarter. Ultimately, our decisions are guided by the returns we expect to generate and the long-term value of the assets rather than an individual operating metric. This flexibility is particularly important as we continue to grow leasing and fleet management. We also remain committed to returning capital to shareholders. During the year, we raised our quarterly dividend by 6% and repurchased 13 million of our shares. Our board recently declared a quarterly dividend of 34 cents per share, marking our 50th consecutive quarterly dividend. We remain committed to balancing investments in the business with shareholder returns while maintaining financial flexibility. Before reviewing our fiscal 2027 guidance, I want to highlight a change to our annual outlook. As our lease fleet grows, company-specific deliveries have become less indicative of our financial performance, reflecting our flexibility to sell production or retain it for leasing. Additionally, manufacturing segment revenues includes maintenance, repair, and programmatic rail car restorations, which are not captured in delivery volumes. Going forward, we will provide an outlook for North American industry deliveries rather than company-specific deliveries, better reflecting our evolving business model and aligning with industry practices. For fiscal 2027, we anticipate North American industry deliveries of 26,000 to 28,000 rail cars. Total revenue between $2.8 billion and $3.2 billion, with operating margin ranging from 7% to 7.5%. We expect earnings per share to be between $2.75 and $3.75. Total capital expenditures and net of proceeds from equipment sales are projected to range from $225 million to $275 million, with approximately 70% allocated towards growth of the lease fleet. To provide some additional context around our outlook, we expect leasing and fleet management revenue to grow 12 to 15%, manufacturing gross margin in the low double digits, and aggregate gross margin in the 14 to 15% range. You can find additional modeling assumptions in the fourth quarter earning slides on our website. In summary, we continue to make progress strengthening Green Brewer's financial foundation and expanding our recurring revenue platform. As we enter fiscal 2027, our priorities remain focused on managing costs, maintaining financial flexibility, and deploying capital with discipline. We believe these actions position and Greenbrier to deliver attractive through-cycle returns and create long-term shareholder value. Before we open it up to questions, I will turn it over to Lori to share a few final thoughts.

Thank you, Michael. And since this will be my final earnings call as CEO, I wanted to express my sincere appreciation to the entire Greenbrier team. It has been a true privilege to work alongside so many talented and dedicated individuals. Together, we've navigated challenges, celebrated successes, and strengthened Greenberg's position as an industry leader. I'm incredibly proud of what we've accomplished and confident in the company's future. Brian and the leadership team are well positioned to build on this foundation and lead Greenberg into its next chapter. I want to especially thank our employees for their hard work and dedication during a demanding year, and our customers, shareholders, board of directors, and the broader investment community for the continued trust, engagement, and support. It has truly been an honor to leave Greenbrier, and I look forward to the company's continued success. And with that, we'll open it up to questions.

Thank you. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then 2. At this time, we will pause momentarily to assemble our roster.

Our first question today is from Ken Hexer with Bank of America.

Please go ahead.

Hey, Greg, good afternoon. Lori, great working with you over all these years from all your different roles. So appreciate the help and discussions along the way. And best of luck in your next endeavor. Thank you. I guess I'll start off with, you know, maybe, I don't know, Michael or Lori, whoever wants to jump in. But, you know, your range, the $275,000, $375,000, right? So it's a dollar wide. Maybe talk a bit about your upside, downside. side? Is that just the same as your top of your goal revenue in 2.8 to 3.2? Is there anything more in there in terms of what you want to highlight? I don't know if you want to start off with the midpoint and go risk to the upside downside. And then just one clarification while I have you is you talked about reducing costs. What did you do? Did you shut a facility down or is that just getting rid of, I don't know, a line of workers or a shift?

Well, so I'll take the last question first, because that's kind of how my brain works. I can only remember so much at one point in time. Maybe that's why I'm retiring. But, you know, we've been through, this team has been through a number of ups and downs in our industry. And so, yes, part of it is adjusting our workforce to match where demand is. We do that in a very respectful way with our workforce so that we can bring them back as demand improves. The other thing that we're constantly doing is trying to see, are there areas where we can refine how we're serving our customers? So whether that's our leasing customers, our management services customers, all of those things, how can we do that in a more efficient way? Oftentimes, that's leveraging technology. But we've learned to just be on that ever-continuing path. And I'd say, yes, we have closed a number of facilities over the last few years going back, I guess it's probably been three years ago now when we sold our Gunderson facility here in Portland, where I'm very proud to say it's continuing to operate under the Gunderson name, but doing business in a private way. So yes, we've been looking at that footprint and trying to reduce costs where it doesn't make sense in the existing portfolio of Greenbrier and as we think through where have our where are our investments returning value to our shareholders?

Yeah, and I'll take the guidance question, Ken. You know, as we think about the fiscal year, that range reflects just some of the uncertainty about customer inquiries, when they'll convert to orders and deliveries. And then, you know, just, you know, the industry forecast, as you know, you know, was a pretty nice ramp from where 2020-26 is. And as we look across some of the things that we're focused on, you know, as Lori mentioned, you know, we're very much looking at different, you know, cost opportunities, you know, and as we invested in insourcing over the last few years, as we grow our volume, we can continue to take costs down with that insourcing investment. You know, in addition, we expect the deliveries to be a little bit back half-loaded in 2027, and, you know, we expect to see some of the absorption benefits that we'll have in additional production and additional volume. And, you know, the other part of it, we'll see the leasing and fleet management business grow, and that will drive our, you know, our aggregate gross margin, which is in that range as well. And then we continue to control SG&A. We continue to look for ways to focus on that as well. Does that help, Ken?

It does. On the guidance outlook, I guess if I could just get a follow-up, Lori, on the closing facilities. Is anything like entire operation in Mexico or the joint venture or in Arkansas, did you close any complete facility? or is this just, again, like a line or what have you?

Well, are you talking about in our fourth quarter, Ken?

Yeah, yeah, yeah. I'm talking about the charge you took. You said you...

I apologize. I apologize. So the bulk of that was we exited our Omaha facility where we were doing maintenance and repair work. So we did sell that to another party who's continuing to operate the business. We also had a small gain associated with exiting a long-time dormant joint venture that we had with Amstead and Ohio Castings.

Okay.

Both of it, though, was Omaha.

Yeah, thank you for that. And then I guess my last one, if I can sneak one more in, is pricing. Are you assuming, I guess just looking at your net orders, and I'm trying to gauge since you're switching to an industry number versus your own target and what that might mean for you. But are you, you know, given your focus more on specialized equipment or increasing rail car demand overall or tank cars, is there an assumption here of an accelerating revenue per car? Maybe you want to talk about pricing in the marketplace a bit.

Hey, Ken, it's Brian. Yeah, I think I can take that. I think it's a little bit of everything that you talked about. There's a number of specialty cars out there that we've really been focused on, and that's a lot of the engineering we did early on. And a significant part of that production does begin in the back half of the year. Pricing on that is good pricing and margins. We have nice margins associated. So that's kind of part one. Part two is we're seeing a lot of interest on the intermodal side. Intermodal has been dormant for a long period of time. You guys are seeing the railroads report out And you're seeing TTX and others start to look pretty seriously. And so we see some line ramp-ups coming in as well. And then just generally, as the market recovers, you start to see better pricing discipline across the board. So it's a combination of all three.

Great. Thanks for the time.

Again, if you have a question, please press star, then 1. The next question is from Andre Tomczyk with Goldman Sachs. Please go ahead.

Hey, thanks for the time. I appreciate it. Curious, maybe if we could just first touch on the leasing margin in the fourth quarter. I think it was 58%. I think that was a little lower than we were expecting down a couple hundred basis points sequentially. Just kind of curious, is that a reflection of you building the fleet or maybe more maintenance costs in the near term? I know the lower utilization sort of sequentially, that might be driving it as well. And then just going forward, how do we think about the overall gross profit margin level for leasing into 2027 relative to sort of this recent high 50s, low 60% level?

Yeah, Andre, it's Brian. And so, you know, it's really, as you guys will remember from our last call, we added a number of units in Q3 that then began to go on lease in Q4. So there's some acquisition timing as cars were coming into the fleet, and that's the timing of maintenance, quite frankly. There's a number of programs around requalification and things that had to get done, some catch-up work. On a go-forward basis, we see it returning to normal levels. So you'll see it back up.

Got it. Thanks. And in terms of just if I could follow up there, when you say normal levels, I think in fiscal 25, you guys did closer to 67%. So should we be thinking sort of between 60% and 67% on a full-year basis for 2027, just on a clarification point?

I would say probably it's the mid-50s to low-60s is where we would kind of see it. I think there's oftentimes different things that are going on in particular periods that might have an impact. But I do think as you're seeing us continue to stay focused on growing our own lease fleet, either from what we're originating and building in our shops or the secondary market transactions, Some of the secondary market transactions, we're adding older cars, as Brian said, that have a little bit more maintenance on them. So that's where you're going to see a little bit of that variability. But we also have a great team that's evaluating these secondary market transactions. So we're not just buying cars because we want to grow the fleet. We're buying cars that are a good return on the investment that we're making. And then we've got a great team that manages how we're keeping those cars maintained.

Understood. Appreciate it. So maybe just on the leasing as well, what do you expect the leasing fleet count to end at in 2027? I mean, obviously, you've been growing that pretty quickly. It was 17,000 units in 25 or 26, and then up here at 21,000 in 2026, call it 20% to 25% growth year over year. How are you expecting that level of growth sort of to trend here into 2027 on the lease fleet?

Right. And I'll take that, Andre. You know, as we look at 2027, you know, there's certainly a very strong market in the secondary market, but we project that it's going to grow to somewhere between 22,000 cars and 23,000 cars as we look across the year.

Great. Maybe just shifting then to manufacturing here. So the guide for the industry delivery is of 26,000 to 28,000 during your fiscal year. Could you just help frame that up a little bit for you guys? I think, you know, if your share of industry deliveries is sort of, you know, and correct me if I'm wrong, maybe 30 to 40 percent, I think that could still imply deliveries, you know, depending on what you do in Europe, could be down year over year if I have that math right this year. And I'm just curious if that's true, you know, are we expecting more of that pressure, you know, to be front half loaded and then maybe you're expecting year over year improvements on a volume basis here in the back half?

Yeah, and I think that you're thinking about it in a correct way in terms of the strength potentially more in the back half of 2027, fiscal 2027. You know, as we look at year over year, we've got a kind of a guide range that's kind of around where fiscal 2026 was, but we expect to do a little bit better than 2026 in terms of deliveries.

And maybe I'll just add on to that part of what Brian was talking about earlier is the mix of cars that we're delivering. So these specialized rail cars that we're building, they only count as one, but they can be a lot more impactful when it comes to the overhead absorption and the capacity that it consumes within our fleet. And then further as a reminder as to why we're stepping back from giving our specific delivery guidance is because while we've brought a great commercial team that's originating both direct sales and lease originations, those lease originations, some of them will keep on our balance sheet, and therefore not all of that production shows up in deliveries. And then we have been focused for the last several years on how can we do things differently within our production facilities to make certain that they're optimized and creating a return. So that's the, I love this word, programmatic rail car restorations that don't show up in deliveries. This is wheel activity. It's maintenance activity. We have a number of other things that are captured within manufacturing revenue that makes the correlation with Greenbrier deliveries not be as tight as we would like. So that's why we've changed that guidance.

Yeah, and it's Brian, Andre. I'll just put an exclamation point on what Lori said. It's the quality of the earnings in the back half versus the front half. So it's less about volume and more about the quality of mix.

Understood.

And Andre, this is Travis. We can follow up in greater detail offline, but I would say, just to clarify, our industry forecast of 26,000 to 28,000 units would represent growth over what we saw in our fiscal 2026 in terms of industry. So, just to clarify on that piece, and it is back half-weighted, but we can get into some detail later.

That's very helpful. And maybe just for me to close off some broader thoughts here on the digging in a little bit more on the current state of the anti-dumping and the countervailing duty investigations that you guys kind of talked about in the opening script. Maybe just curious, one, if you think that's a potentiality that that could actually go through, how you're thinking about that. And if prices ultimately have to go up, you know, for rail cars on the back of that, maybe how are you and your customers, you know, speaking about the potential future impacts to the fleet strategy and maybe whether Greenbrier may have to pass on those higher input costs over time?

So if I could, I'll break it into two pieces, right? So there's the anti-dumping countervailing duties on couplers. Couplers are a smaller component of an overall new rail car. I would not expect duties on those couplers to have a significant impact on demand. The issue is how a rail car manufacturer separates the coupler on a brand new rail car as it's coming across the border from the rest of the rail car. In my mind, I think about this. It's like, how would you put a duty on the steering wheel on a passenger car separate from a duty on the overall car? So, and some of that is just how does that, how do the mechanics of that work? Because new rail cars have been crossing our northern and southern borders for decades without being treated as consumables. So that's on couplers. On the tank cars, our customers are with us on tank cars. And part of the government's role is to talk to them. And I think that they're going to be really vocal about whether or not Greenbrier and others that build tank cars in Mexico have been doing untoward activities when we bring these cars into the United States. I'll probably get the stink eye from someone in the room, but I will say that is not our intent, and I don't think that that's reflected in the gross margins that our teams have been putting up. We are focused on making certain that our products are priced consistent with the market. If anything, we prefer to get very robust pricing, not dump pricing in order to take market share.

Yeah, and to be clear, this is Brian, just to put a finer point again on it, is this is an industry issue. It's not a Greenbrier issue. So if it does go through, then the price of tank cars go up. And unfortunately, that price gets passed through to our customers, which is not what we want to do. But it is what one participant has put upon the industry. And so, you know, the industry will deal with it and it will raise prices, but it won't impact our financial performance or it should long term.

I appreciate the thoughts there. Just to close off two quick ones for me, just one to clarify, have you paid tariffs on tank cars at all? And then just secondly, I wanted to also express, you know, Lori, it's been a pleasure working with you and wish you all the best going forward. And maybe just one for Brian off the back of that as you, you know, take the helm in early 2027. Are there specific areas of the strategy where you see a need for pivot or acceleration, you know, either direction? Thanks all for the time tonight.

Oh, thank you for the nice words. It's been nice getting to know you as well. I'll take the tariff one. We're continuing to work with CBP on how to navigate the system to do what they're asking us to do. Right now, the system is not set up to do that, but we continue to work very, very closely with them. And I look forward to hearing what Brian has thought of.

No, look, Lori and I have worked together for 30 years, and what's great about our relationship is that we've developed a lot of the strategies together while she's led the initiatives. So these are things that I'm deeply rooted in as what we've progressed in the company. What you'll see for me is a continuation of what Lori fundamentally has put in place. I think maybe with a newfound urgency around some of the business unit operations and their performance, leveling up the expectation from them, along with that will be some of our costs and overhead structures and continuing to look at how we can improve our cost profile and then really putting and leaning in hard on the leasing growth side of our story so that we can continue to grow that side of the business.

Thanks again. Appreciate it, everybody.

This concludes our question and answer session. I would like to turn the conference back over to Travis Williams for any closing remarks.

Thank you, everyone, for joining us today and for your continued interest in Greenbrier. This is the end of our fourth quarter earnings call. Thanks, everyone.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.