Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from the line of Wendy Caplan with Wachovia.
Wendy Caplan - Wachovia Securities
Bill, can we start with the refurbishment business? Can you help us understand how much of the margin gain either year over year or sequentially was related to the higher cost of steel?
Bill Furman
Rather than the higher cost of steel, simplifying the answer for a moment, the rising cost of steel in a rising market has hampered our manufacturing margins inevitably on the new car side, but on the refurbish and repair side, it isn't steel pricing so much as it is scrap itself, which tends to move together but isn't precisely. I would defer to Mark to give you guidance on that. We’ve had a lot of reclaimed materials in the scrap business, and it certainly was a very significant item. We've also were fortunate to renegotiate some of those contracts during a time of relative prosperity. We have some floors on some of the major contracts where we continue to enjoy good steel pricing.
Mark Rittenbaum
Wendy, we don't break it out for competitive reasons too. I will say that when we gave guidance back early this year we expected our margins to be closer to the midteens, that our guidance for this year is a reflection of our current outlook for the scrap market as well as the renegotiation of the contracts that Bill just referred to. I will also say on a related note that looking at it differently, about $32 million of the revenue growth that we saw this year was related to the acquisitions we made this year, and most of that was in the wheel services business, but again, we don't break out separately what portion of our margin is specifically from scrap.
Wendy Caplan - Wachovia Securities
But it is fair to assume that as we look at scrap prices kind of going in the other direction in 2009, that's part of the reason that you are suggesting that that mid-teen margin in refurbishment is the right place for us to assume?
Mark Rittenbaum
That is correct.
Wendy Caplan - Wachovia Securities
In the rail cars, typically you've said over time that as demand dropped for new rail cars that Greenbrier captures share by an aggressive marketing campaign. Given your refurbishment leasing and barge business and marine business, should we expect that won't happen this cycle?
- To read the full transcript on Seeking Alpha, click here »
