Q2 2021 Trinity Industries Inc Earnings Call
Good morning, and welcome to the Trinity Industries second quarter results Conference call.
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Today's conference call contains forward looking statements as defined by the private Securities Litigation Reform Act of 1995 and includes statements as to estimates expectations intentions and predictions of future financial performance.
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I'd change and any of which could cause actual results or outcomes to differ materially from those expressed in the forward looking statements.
And it's now my pleasure to turn the conference over to Steve Mcdonald, Chief Accounting Officer. Please go ahead.
Thank you Rocco good morning, everyone. We appreciate you joining us for the company's second quarter 2021 financial results conference call. Our prepared remarks will include comments from Jean Savage Trinity, Chief Executive Officer, and President and Eric Mark <unk>, The company's Chief Financial Officer, We will hold a Q&A session. Following the.
Prepared remarks from our leaders.
During the call today, we will reference slides highlighting key points of discussion as well as certain non-GAAP financial metrics the.
For reconciliations of the non-GAAP metrics to comparable GAAP measures are provided in the appendix of our supplemental slot. The supplemental materials are accessible on our IR website at www dot trend dot net.
These slides can be found under the events and presentations portion on the website along with our second quarter earnings conference call event.
It is now my pleasure to turn the call over to Jim.
Thank you, Steve and good morning to everyone joining us today.
And I hope everyone is enjoying summer so far, especially as the world continues to get back to normal.
And you can see from our results. We are very pleased to see the market continue to recover as well.
Some demand improvement across both our leasing and manufacturing businesses and it's obviously, a welcome development and when combined with the great progress we continue to make on our internal effort to enhance returns and we're excited for the years ahead and training.
As we discussed at our Investor Day last fall, we see significant opportunity to drive returns through the optimization of our fleet, our operations and our balance sheet.
And the second quarter, we made meaningful strides across each initiative.
Keeping us on track to achieve our 3 year strategic goals.
Let me now summarize the key themes from our second quarter.
While we're still recovering from the lower order volumes and weaker demand in 2020 you can see improvement across most of the indicators for our industry.
First railcar loans continued to ramp up from the lows of last year.
Additionally, the supply and existing railcars is contracting and thanks to elevated scrapping activity driven by higher steel prices.
As a result, we saw improving asset and demand and steady.
Trinity fleet utilization and rising orders.
While we are only in July from our perspective, we expect each of these industry trends to continue to improve into 2022 based on what we see and our business and the overall economy.
If we turn to slide for you can see how this backdrop and combination with our internal efforts positively impacted our summary financials.
First our second quarter revenue of $372 million was down 27% from a year ago, which was in line to slightly better than my expectations.
Our GAAP EPS for the quarter was 12 cents.
Impairing 2 and adjusted EPS for the quarter and 15 cents, which includes a 3 and adjustment primarily from the loss on extinguishment of our partially owned subsidiaries debt.
Our results were positively impacted by our rail products group operations, which achieved breakeven margin from our ongoing optimization efforts.
And the last time, we're at these excuse me. The last time, we were at these low production levels was in 2010, and we lost money.
We are encouraged that we achieved breakeven margins. Despite the near term headwinds of input cost inflation and low volume.
As in previous quarters Trinity Rail platform continues to drive solid cash flow relative to our earnings.
And the quarter cash flow from operations totaled 265 million and free cash flow or excess cash after all investments and dividends was $269 million.
Eric will go into more details on our cash flow results in a moment.
To recap, we're very pleased to report debt or operational performance and railcar enquiries and continue to turn the corner.
And we are increasingly optimistic about the year ahead.
Let's turn to slide 5 and I can provide a little more color on the overall railcar market.
First as you know consumer confidence is very strong and that activity has begun to ripple into our market. As we are seeing increasing rail carloads, which are now running roughly 8% about 2020.
However, carload volumes have been below 2019 levels. So far this share some more recovery as required to reach the pre pandemic levels.
The year over year carload trends continued to benefit each of the other metrics on slide 5.
Railcars and storage declined 5% compared to a quarter ago.
Which is also been aided by strong scrappy market I mentioned.
Our utilization rate remained relatively flat compared to last quarter.
As a result, our future lease rate differential our SLR D metric, which is the average of the rates transacted in the current quarter as compared to the average of the next 12 months expiring rate improved to a -2.5% compared.
Compared to last quarters -14, 8%.
Continuing and recovery that we believe began and the third quarter of last year.
This march and significant inflection point and demonstrates that higher new car pricing is beginning to feed into the overall lease market.
Well on different markets, we'll have different trajectories and this is a very encouraging trend.
Lastly, the demand is beginning to show up and orders, which were up 224% compared to last quarter.
As we mentioned at our Investor Day, we continue to anticipate that industry deliveries will improve in the coming quarters and settle on line with replacement levels and 2022 and 2023.
Before I move on to our segment results, let me give a quick update on steel prices and inflation in general.
And a high level as I mentioned, we and other railcar manufacturers will face a headwind on the production side of our business.
Although we are experiencing an increase in new car orders some of our customers are still hesitant to place orders.
Markets demonstrating the most strength our chemical construction and then intermodal, but we are seeing improving trends across many segments of the fleet.
While it is important to realise it says excuse me what is important to realize though and historic low inflation driven by expanding economic growth as a long term positive for fixed asset businesses like ours.
As an example inflation has already impacted the underlying economics for many of our end customers and markets like agriculture, construction chemical and energy.
Inflation supports fixed asset prices and 2 key ways.
First asset replacement costs and grow with rising prices for input materials like steel.
Second increasing commodity prices for ASUR, easters make higher lease rates and prices for equipment more acceptable.
Turning to slide 6 let's walk through Trinity segment results for the quarter.
For the leasing business and trim.
And of these lease revenue improved compared to last year, as we experienced higher per diem asset usage and lease fleet growth.
This was somewhat offset by slightly lower utilization, primarily attributable to softness in energy related markets and the corresponding effect on remarketing rates.
Most notably there are clear signs of a strengthening and recovery as renewal success rates continued to improve to a level not seen in recent history.
And renewal rate, well and total still slightly down for the quarter moved into positive territory compared to expire and rates as the quarter progressed.
Further supporting this improvement and momentum is a recovery and the 2 R. F. L R&D rate that I mentioned previously.
With respect to our cost as noted on prior calls we continue to maintain a strong discipline.
It is expected that maintenance and other operational expenses required to position the lease fleet for increasing demand will be a headwind to the leasing segment margin for the year.
As part of our strategic initiatives, we continue to work towards increasing the percentages of maintenance and compliance events handled internally within our shop.
Over the last few years, our service capacity has increased from roughly 1 third to over half of our maintenance events.
And achieving the target we set out at the end of 2018.
With our current footprint, we have the ability to get to 70%, which will continue to reduce the effect of maintenance cost of our fleet and improve our railcar serviceability for our customers.
That's a good indicators for our progress year to date 2021 over 60% of our fleet maintenance spend was internal.
Turning to our rail products segment as I noted we are pleased to have achieved breakeven margins. Despite a challenging near term headwind from higher steel cost and the lowest quarterly production volume since 2010.
The incremental margin progress we've made over the past 6 months is almost entirely attributable to our operational efficiencies.
Cost initiatives and internal supply chain initiatives.
We are optimistic that we will see improving margins and the segment as railcar pricing potentially increases.
Even tighter supply and rising demand.
And our maintenance facilities, we're expecting continued headwinds and ramping up our new Midwest facility as we are experiencing difficulties and filling open positions at that location.
What is most exciting and what we're seeing and their orders, which total 4570 and the quarter.
224% compared to last quarter.
As you'll recall from the past few quarters, we had an increasing level of interest and inquiries and it's now great to see those materialize and orders.
This is the highest order quarter since the fourth quarter of 2018.
And approximately half of our backlog value is expected to deliver in 2021, resulting in declining year over year deliveries, although we do expect our delivery rate to build through the year to meet demand from new orders.
Let me wrap up my remarks on slide 7.
And with an update on our return on optimization initiatives.
Similar to last quarter Trinity was busy and executed against both our cost and our balance sheet goals.
First on our balance sheet, Eric will give more detail here, but we've made the most of the low interest rate environment and have added significant value as a result.
And total Trinity is issued and refinanced approximately $2.3 billion of debt since the onset of the pandemic.
Including our partially owned subsidiary.
In aggregate, we have lowered the company's borrowing costs by 100 based on basis points over that time.
On top of that we have continued our discipline and commitment to return capital to shareholders.
And the quarter Trinity and repurchased 68 million of stock and the open markets and also completed a 223 million block purchase from value Act as they monetize a portion of their investment.
These repurchases accounted for just under 10% of the company's shares.
Turning to our enterprise and manufacturing costs, we continued to make progress on both fronts, which is contributing to our goal to enhance returns.
And we continued to optimize our fleet as you saw by our transaction activity and the quarter.
Over the quarter for and he was active and secondary markets and from gains on lease portfolio sales of $11 million.
That said, we expect as railcar demand improves Trinity will have opportunities to both buy and sell and the secondary market.
Which continue to open and Brian.
Finally to update on our new product initiatives. We're proud to report that trimmed site continues to see strong uptake.
Although the product is still in its early growth stage. We are ahead of plan and the interest continues to build.
We're also seeing strong demand for our new covered Hopper project, which is hitting the market and the AG market at an opportune time.
Also our redesign intermodal products are being well received by customers and are driving some of the order activity we touched on earlier.
To summarize the whole Trinity team is executing very well against our near and long term plans to drive returns and add value for shareholders.
We felt confident and the 3 year plan, we outlined at our Investor Day last fall and we look forward to updating you on our progress and the quarters to come.
With that let me hand, the call over to Eric for more detail on our results.
Thank you, Jamie and good morning, everyone.
I will start on slide 8 with some summary headlines.
As gene noted for the second.
Second quarter was driven in part by the improving market dynamics for both our leasing and manufacturing segments.
Additionally, our improving manufacturing margin and consolidated returns benefited from our progress on optimization initiatives.
Our second quarter consolidated revenue totaled $372 million, which was down 27% compared to a year ago.
This was driven by the combination of lower deliveries from our rail segment combined with a higher proportion of deliveries to our leasing customers.
Which are eliminated from our consolidated results.
Specifically over 64% of deliveries and the quarter before our lease portfolio compared to 41% and Q2.2020.
Overall, our adjusted earnings improved sequentially to 15 sales from <unk>.
Driven by a combination of better fundamentals day.
And so on lease portfolio sales and our share repurchase activity.
Our second quarter earnings and included an $11 million gain on lease portfolio sales.
Consistent with our ongoing lease fleet optimization efforts aided by the broadening secondary market.
We did incur and expense of $11.7 million related to the early extinguishment of debt and our partially owned leasing entities.
We have removed this expense from our adjusted results.
That said our segment results continue to improve consistent with our expectation for higher earnings and the back half of the year.
And regards to cash flow year to day cash flow from operations totaled $335 million cash.
Cash flow from operations and the second quarter was $265 million, which reflects the collection of $207 million of our income tax receivable during the second quarter.
Net of this impact.
Cash from operations was down slightly compared to the first quarter.
As our inventory grew reflecting higher steel prices and a modest ramp up and expected deliveries and the second half of the year.
As a result of these factors we are revising our cash flow from operations range to $600 million to $650 million, which was previously $625 million to $675 million.
Our net investment for leasing and the quarter was approximately $72 million.
Consistent of $144 million of additions and better rates.
And by portfolio sales of $72 million.
Our manufacturing Capex was $9 million for the second quarter.
For the year, our expectations for net leasing and manufacturing Capex is 200 to cure for $50 million and.
And 45 million to $55 million respectively.
Our range for net leasing capex for the year was reduced $100 million, primarily to a shift and deliveries from our lease portfolio to direct sales.
Total free cash flow after investments and dividends totaled $269 million and the second quarter.
The improvement and cash flow from operations as a result of the timing on the tax receivable.
Additionally, free cash flow was aided by the debt financing accomplished and the quarter, which.
Which increase the loan to value on our wholly owned lease fleet to 62, 5%.
Turning to slide 9.
Trinity remains and a strong financial position and our liquidity at the end of the second quarter was $918 million.
We have discussed our ongoing work to optimize the balance sheet and we certainly took advantage of the low interest rate environment.
Over the past quarter Trinity access to debt markets for approximately $1.6 billion.
Which included refinancing over 125 billion of debt for our partially owned leasing entities.
You and issuance of $325 million.
Of Green asset backed securities and.
At a rate of 231% and and anticipated 7 year life.
The aggregate of aggregate effect on our financing activities over the past 12 months as lower truth borrowing costs, approximately 100 basis points.
Additionally, the secondary market for railcar has improved.
And the second quarter Trinity was an active buyer and seller of brokers.
We sold 700 railcars, yielding the gain I mentioned earlier.
We also purchased 155 railcars, which we were able to deploy at attractive returns immediately.
The takeaway is it truly is the ability to improve our returns with our platform and various ways and we expect to increasingly pursue these options.
Oh and by re emphasizing that we continue to take a disciplined approach to capital deployment.
Rise and shareholder value.
As a reminder, our capital allocation priorities remain largely unchanged we.
And we expect to make investments our lease fleet for growth, especially in markets, where we can meet increasing demand.
As we see opportunities and secondary market, we expect to be a buyer and seller to drive further optimization of our fleet and improve returns.
As highlighted in our release Trinity purchased $10.5 million shares and a cost of $291 million and the quarter.
Which includes a direct purchase from our largest shareholder.
Additionally, our dividend and the quarter totaled $24 million for.
And the total year to date capital returned to shareholders to $375 million.
And closing our strategic plan is taking hold and.
And I am proud that Trinity continues to deliver on the commitments, we made at our Investor Day last fall.
We are focused on executing upon and internal initiatives and the resulting value creation.
Additionally, im excited about the improving market backdrop, and how our platform can perform in this environment.
Rocco EBIT and I will take us to questions from our participants. Thank you. We will now begin the question and answer session.
Like to ask a question. Please press Star then 1 on your Touchtone phone.
If you're using a speaker phone we ask that you. Please pickup your handset before pressing the keys to withdraw your question. Please press Star then 2.
Today's first question comes from Matt Alcott with Cowen. Please go ahead.
Good morning, Thank you for taking my question.
Can you guys talk about the types of railcars included in your orders.
And you know some of the reasons behind why.
Buyers are starting to finally pull the trigger on on these orders.
And if the inquiry activity and order activity has continued into <unk>.
And third quarter.
Sure Matt Thanks for the question and I'll start.
So when youre looking at new car demand, we're really seeing 2 different types of demand coming through the first is going to be replacement demand, that's going to be and the construction the consumer and the agricultural market.
And that's where they are actually having to take older fleet out and they need the replacement because there is still strong economics or demand and those areas.
And we're seeing from end market growth demand and.
And agriculture falls, there too, but then <unk> intermodal and some chemical and also seeing some demand.
And it's pretty broad and as you look across the industries and their team and look at the cars coming out of storage.
Not in 1 single area, it's pretty broad based which is very encouraging and helping us to get more optimistic about the future.
And then in terms of activity during the quarter. Matt. This is Eric enquiry levels have continued into the quarter.
Along with order activities.
The momentum has carried through into.
And to the third quarter.
Got it.
And.
And your utilization overall realizations declined slightly and but you mentioned and that's because of continued.
The relative weakness and.
And energy cars.
Does that mean much.
The rise in manufacturing orders and the quarter does it mean that your.
Fleets and the markets, where the orders came from.
And basically fully utilized.
So I'm going to say, it's getting quotes but really the slight decline for the quarter was attributable to 1 major customer that we helped out a win win situation.
And where we'll see that reverse later this year.
And it will give us an opportunity we kept on parts of our debt.
Given to them because we think we can get some higher rates for that and so.
And it's a short term blip and our overall progress and that utilization.
Got it and just 1 last question and question Jay and Eric.
You know we are now all familiar with the dynamic of the.
And the balance for railcars rising while steel prices.
Keith and many people from pulling the trigger on orders.
For you guys as a manufacturer and less for does it make it any less painful too.
Manufacture railcars and this environment.
Are you able to absorb.
And any cost efficiencies associated with having with manufacturing for for your own lease fleet, and an environment, where commodity price low wouldn't labor prices on a big premium on railcars.
So Matt let me, let me take let me take debt is there.
Generally and this really hasnt changed recently, it's been this way for a long time, we're not taking a lot of risk and the input cost in terms of steel costs. Most of that gets passed on to customers. So in terms of the manufacturing process I don't think that really changes whether the material prices are higher or lower.
Sure.
In terms of the effectiveness of our of our elite.
Whether we are going to add cars on lease fleet.
This quarter the mix turned out to be a little bit more direct sale in terms of the order intake.
And our deliveries were more for our lease fleet that will change each quarter, but.
Generally speaking we're able to.
The lease rates that we've put in on the railcars that we added a fleet reflect the higher prices that we're or the higher cost of a railcar.
Okay, great. Thank you very much yes, thanks, Matt.
And our next question today comes from Allison and Tony actually at Wells Fargo. Please go ahead, hey, guys.
Good morning.
So I just wanted to touch on the lease maintenance expense you know it seems like there's some competing dynamics there with some headwinds that you noted gene as long as you know, obviously I would assume some level of benefit from bringing more and house could you maybe talk about how those dynamics will play out and the back half of the year and into next year and is there any way to sort of discern.
And so did that that benefit that you are getting from bringing it in house at this point.
Sure Alex and so when Youre looking at debt, we're not really expecting anything other than normal.
And for recovering cycle, so I wouldn't expect us to be very large and chip. The fact that we have to take cars out of storage get them prepped and ready to go and services. We're seeing demand increase so that's a normal part of an up cycle.
And I would just look at our history to see what that may be.
As you look going forward, it's really going to depend on what type of prep has to happen for the car types that are going in and typically it's more on the tank car you've got to make sure and shredded for that type of service and May have.
A little bit more work to be done to it but it's not anything that any of the other lessors go through.
Okay.
Got it and then just turning to your obviously, a nice inflection in orders and how do we think about the cadence and the back half and then I guess in line with that.
Costs are structurally lower you know clearly by the margins that you posted today is there you know how do we think about the other headwinds in terms of that ramp as we kind of move forward here into this recovery for you.
We're pretty excited.
Excited about having net sequential increasing.
Volume going through the shops, and we think that based off of all the work that the teams have done that we'll be able to exploit the other use that to expand the margin as we see that volume growth.
Got it and then I guess last question related to that and I think you did touch a little bit on labor you know any concerns that you won't have the lever to just sort of manage this upturn at this point.
The majority of the labor and the areas, where we're producing and the cars, we're not having issues I did bring up 1 labor issue for a maintenance facility. That's in the Midwest and that's because we've talked to you on the past about the ramp and expecting the second half of the year for most of that headwind to be gone.
It is still a little delayed we're hoping that.
More people are going to want to go back to work shortly and I think with a lot of the incentives.
And from the government going away, we should be able to resolve that it's just a little slower than expected.
Perfect. Thanks, I'll pass along.
And our next question today comes from Justin Long Stephens, Inc. Please go ahead.
Good morning, this is George sellers on from for.
And for Justin long.
My first question is on on your build capacity what does that look like today, and then and a recovery scenario, where do you think that could go how high do you think that could go.
So when we're looking at the recovery I think we're poised well for the recovery, we are already and the ramp mode. As we talked about we expect volumes to increase sequentially.
Throughout the year and into next year.
And not seen any issues with being able to do that and.
And I'm going to try and 1 comment and the past I've said, we've not seen any supply chain issues.
We've had 1 minor 1 surface that has to do with resins for aligning buys.
It's in 1 of the winter so not a overall market headwind for us just a slight bump on the road as we work through that.
But we think that.
And getting back to replacement levels, we can do that with the capacity, we have and internally and being able to meet those demands.
Got it okay.
And then on the on on the leasing side of things could you talk about your sort of view on lease rate recovery in the back half of this year and then and then into 2022 as well and how that differs on on the freight side of things vs tank cars.
Okay.
So in the prepared remarks, I talked a little bit about sequentially throughout the last quarter, we saw improvements actually going positive in the last month.
Even though it can be lumpy from the different type of markets and which of our car types are coming off lease and the quarter. We overall strength Directionally, we will continue to see sequential improvement.
Okay and then for.
For freight cars versus tank cars, and what are the dynamics you're seeing between those 2.
On the freight cars are actually coming back in and going up faster than some other tank cars currently but.
It's it's not something that's overly concerning for us.
Great all right I'll leave it there. Thank you so much.
Thanks.
Next question today comes from vascular majors with Susquehanna. Please go ahead.
Yes, thanks for taking my questions.
You talked a little bit about the type of cars that are being ordered and the type of car our conversations youre, having with your customers.
Can we zoom out a bit and do you have a sense for why this extreme elevation and steel prices hasnt really stopped activity.
And to get something that surprised a lot of us on Iran, and I'd love to hear kind of the customer mentality on that so we can think about where that goes thank you.
And the Bascom I'll start and let Eric jump in but the other thing you have to consider is how high scrap pricing and right now too.
And that group.
Scrap pricing has doubled since last year.
And it's actually.
And you have to go back to 2008 to get back to these levels. So if you have and older fleet and Thats, where youre going to come into some of the gone to loans, the boxcars and grain cars.
And that they needed to replace anyway, it's a perfect time with those high scrap prices.
Go ahead and trade that al and.
And the next thing is customers have to respond to the demand that's out there so and some of those end markets, where I was talking about growth agriculture, and intermodal and the chemical they just didn't have the cars to meet all that demand. So they had to go out and get from.
And basketball.
And I would just add that while steel prices are higher and therefore railcar prices are higher.
Jean mentioned earlier, we are seeing that you are seeing that inflation kind of across the industry and our railcars carry commodities and we have seen commodity inflation. So it stands to reason that I think people can afford to pay a little bit more for railcar from the commodity prices are up.
Yeah.
Thank you for for both of those perspectives.
I want to go back to your comment about progressing to more of a mid cycle market.
And a lot has changed and.
And North America is for some consolidation and and mix shifts from which cars are hard to a more broad based market but.
As we think about what mid cycle really means and your model can can you give us some thoughts about.
And I don't know, if it's market share or how things might look a little different than they would last time, we were at those levels just anything to help us think about the progression and you're manufacturing business into 'twenty, 2 and 'twenty 3.
Thanks, Pat and well if you look at our manufacturing business.
And nothing has really changed from our Investor day, where we talked about the improvement over the 3 years.
And for that on.
Saying that there were a lot of actions that were in our control that we can take without the market recovery.
Our team has done a great job getting ahead of that and executing on those initiatives and I think going forward youre going to see us get to the mid to high.
Single digits on that margin now.
That's the expectations nothing has changed we mentioned that a couple of time and our prepared remarks, and our outlook for that 3 year plan that we did provide you.
And laughs and you address the labor question.
Earlier, and you know it.
It certainly seems that you and your co located competitors and Mexico.
Have been pretty easily able to pull people back in that were.
That were displaced last year, I mean, do you foresee that remaining fairly smooth ramp up or.
As you get more to mid cycle or better levels next year to day.
And you anticipate some constraints just anything on on how you plan for the labor piece of your highest capacity region would be helpful. Thank you.
Sure and if we look at that capacity ramp that we've had.
Right now and.
Karena and an area, where we are the predominant employer and.
And we've been able to get 90% plus of our skilled trained and employee back. So that's a very positive sign for us we treat our employees well during their employment and we tried to during the downturn and make sure we're taking care of them and they're willing to come back.
To us, we're not foreseeing a problem and getting back to those mid cycle levels.
Something could change, but right now and that far out loans.
Thank you for the time.
Thank you ladies.
Ladies and gentlemen, and as a reminder to ask a question. Please press Star then 1 our next question today comes from Steve Barger of Keybanc. Please go ahead.
Hey, good morning.
Jean and you should have the backlog value will ship in 2021. So that's about $600 million. If you get orders in August or September can you ship them or is that $600 million a good proxy for the back half manufacturing revenue.
The majority of the orders that we're taking now we go into next year and we do have a few small areas, where we can add but the majority of what's coming and now we'll go next year.
Is that for <unk>, the order price were lower on those cars.
Is that included in the deliveries for the second half or are those more slated for the first half of 'twenty 2.
More of it's more of it for extending the extending into 'twenty, 2 and the reason that order price being lower and Thats more reflection of the mix of types of railcars that were ordered.
For some.
You mentioned intermodal cars well curves.
Would you have a lower per unit costs. So thats.
And that's what's driving some of that.
What will that mix for the lower per unit cost on those car types affect margins and the first half of next year is that.
Think historically those have been some lower margin cars is that correct.
Historically, perhaps but I think we're happy with the way those assets for price and the quarter.
<unk>.
As a competitive market.
And we've seen.
The pricing.
Demand has recovered price margin expectations have gotten higher and as we mentioned earlier.
<unk> as volumes come back, we'll see those margins coming back also.
Yeah and.
And so I guess, bringing it back to the back half of this year based on what you see for deliveries mix price cost can you get a little more specific on back half margins I know they will improve sequentially from the front half, but are we still a low single digit or can you get to mid single digit and the back half do you think on manufacturing.
We're really not giving guidance so I am.
Don't want to go there what we've told you I think and the first quarter was the fact that we expect to be.
Last year and total and total so that's probably as far as I'm going to go to that line hopefully that helps.
Yeah, sure and well I guess to that point with conditions, improving do you think youll have the confidence to restart guidance for 'twenty..2 just help investors think about third party deliveries lease fleet additions what eliminations looked like.
So depending on what happens with the Delta variant at all.
We are considering looking at going back to some sort of guidance in 2022.
Alright. Thanks.
Thank you.
And ladies and gentlemen, this concludes our question and answer session and I'd like to turn the conference back over to Mr. Macdonald for closing remarks.
Thank you Rocco a replay of today's call will be available. After 10.30, a M. Eastern time through midnight on July 29, 2021. The replay number is 877.3 for for 75 to 9 with and access code of 10152.
026.
A replay of the webcast will also be available under the events and presentations page on our Investor Relations website located at Www Dot trend Dot net and we look forward to visiting with you again on our next conference call. Thank you for joining us this morning.
Thank you Sir This concludes today's conference call and we thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.