Highlights
  • First quarter revenue of $139.5 million on deliveries of 1,525 units
  • First quarter net income of $0.6 million, or $0.05 per diluted share
  • Diversified backlog totaling 2,802 railcars valued at $285 million
  • Total cash, cash equivalents, marketable securities and restricted cash of $114.8 million at March 31, 2017
  • Full year 2017 delivery range increased to be between 4,200 and 4,400 railcars

CHICAGO, May 03, 2017 (GLOBE NEWSWIRE) -- FreightCar America, Inc. (NASDAQ:RAIL) today reported results for the first quarter ended March 31, 2017, with net income of $0.6 million, or $0.05 per diluted share, compared to net income of $12.7 million, or $1.03 per diluted share, in the same period last year. First quarter 2017 results included pre-tax restructuring charges of $1.8 million, of which $0.4 million were non-cash expenses, while first quarter 2016 results included a gain on a settlement of retiree benefit plan obligations of $14.3 million.

"Our cost reduction efforts and operational improvements are beginning to positively impact our results as deliveries and net income exceeded fourth quarter 2016 results. However, overall market conditions remain challenging as demonstrated by continued weakness in orders for new railcars," said Joe McNeely, President and Chief Executive Officer. "While near term uncertainty still exists, we are confident that the cost reduction initiatives that we have implemented, our diversified product offering and our strong balance sheet have positioned the Company to manage through the downturn. Finally, deliveries for 2017, including the cars delivered in the first quarter and orders received to date in the second quarter, are now expected to range between 4,200 and 4,400 railcars."

Consolidated revenues were $139.5 million in the first quarter of 2017 compared to $148.6 million in the same quarter of 2016. The Company delivered 1,525 railcars in the first quarter of 2017, which included 1,425 new railcars and 100 leased railcars. This compares to 1,609 railcars delivered in the first quarter of 2016, all of which were new railcars. Orders in the first quarter of 2017 totaled 68 railcars, of which 15 were new railcars and 53 were rebuilt railcars. The Company had a diversified backlog totaling 2,802 railcars at March 31, 2017, valued at $285 million.

Consolidated operating income for the first quarter of 2017 was $1.1 million compared to $19.6 million for the first quarter of 2016. Adjusted operating income, which excludes pre-tax restructuring charges totaling $1.8 million in the first quarter of 2017, was $2.9 million compared to adjusted operating income of $5.3 million in the first quarter of 2016, which excluded the gain on settlement of retiree benefit plan obligations of $14.3 million. Adjusted operating income is a non-GAAP financial measure. A reconciliation of adjusted operating income to operating income, the most directly comparable GAAP measure, is provided in the attached supplemental disclosure.

Cash, cash equivalents, marketable securities and restricted cash were $114.8 million as of March 31, 2017.

The Company will host a conference call and live webcast on Thursday, May 4, 2017 at 11:00 a.m. (Eastern Daylight Time) to discuss the Company's first quarter 2017 financial results. To participate in the conference call, please dial (800) 230-1766, Confirmation Number 422845.  Interested parties are asked to dial in approximately 10 to 15 minutes prior to the start time of the call. The live audio-only webcast can be accessed at:

Event URL: https://im.csgsystems.com/cgi-bin/confCast 

Conference ID#: 422845

If you need technical assistance, call the toll-free AT&T Conference Casting Support Help Line at (888) 793-6118. Please note that the webcast is listen-only and webcast participants will not be able to participate in the question and answer portion of the conference call.  An audio replay of the conference call will be available beginning at 1:00 p.m. (Eastern Daylight Time) on May 4, 2017 until 11:59 p.m. (Eastern Daylight Time) on June 4, 2017.  To access the replay, please dial (800) 475-6701.  The replay pass code is 422845.  An audio replay of the call will be available on the Company's website within two days following the earnings call.

FreightCar America, Inc. manufactures a wide range of railroad freight cars, supplies railcar parts and leases freight cars through its JAIX Leasing Company subsidiary. FreightCar America designs and builds high-quality railcars, including coal cars, bulk commodity cars, covered hopper cars, intermodal and non-intermodal flat cars, mill gondola cars, coil steel cars and boxcars. It is headquartered in Chicago, Illinois and has facilities in the following locations: Cherokee, Alabama; Danville, Illinois; Grand Island, Nebraska; Johnstown, Pennsylvania; Roanoke, Virginia; and Shanghai, People's Republic of China. More information about FreightCar America is available on its website at www.freightcaramerica.com.

This press release may contain statements relating to our expected financial performance and/or future business prospects, events and plans that are "forward-looking statements" as defined under the Private Securities Litigation Reform Act of 1995. Forward-looking statements represent our estimates and assumptions only as of the date of this press release. Our actual results may differ materially from the results described in or anticipated by our forward-looking statements due to certain risks and uncertainties. These potential risks and uncertainties include, among other things: the cyclical nature of our business; adverse economic and market conditions; fluctuating costs of raw materials, including steel and aluminum, and delays in the delivery of raw materials; our ability to maintain relationships with our suppliers of railcar components; our reliance upon a small number of customers that represent a large percentage of our sales; the variable purchase patterns of our customers and the timing of completion, delivery and customer acceptance of orders; the highly competitive nature of our industry; the risk of lack of acceptance of our new railcar offerings by our customers; and the additional risk factors described in our filings with the Securities and Exchange Commission. We expressly disclaim any duty to provide updates to any forward-looking statements made in this press release, whether as a result of new information, future events or otherwise.
 
FreightCar America, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
 
  March 31, December 31,
    2017     2016  
  (In thousands)
Assets    
Current assets    
Cash and cash equivalents $     98,067   $     92,750  
Restricted certificates of deposit     5,720       5,970  
Marketable securities      10,996       —  
Accounts receivable, net     22,167       25,207  
Inventories, net     77,501       97,904  
Income taxes receivable     13,286       13,283  
Other current assets     15,929       6,056  
Total current assets     243,666       241,170  
     
Property, plant and equipment, net     44,405       46,347  
Railcars available for lease, net      23,962       24,018  
Goodwill     21,521       21,521  
Deferred income taxes, net     3,798       4,221  
Other long-term assets     1,968       1,978  
Total assets $     339,320   $     339,255  
     
Liabilities and Stockholders' Equity    
Current liabilities    
Accounts and contractual payables $     33,302   $     34,536  
Accrued payroll and other employee costs     4,215       3,117  
Reserve for workers' compensation     4,187       4,444  
Accrued warranty     8,591       8,324  
Customer deposits and deferred revenue     645       371  
Other current liabilities     3,520       3,343  
Total current liabilities     54,460       54,135  
Accrued pension costs     6,895       6,821  
Accrued postretirement benefits, less current portion     5,852       5,769  
Deferred income state and local incentives, long-term     10,825       11,380  
Accrued taxes and other long-term liabilities     4,625       4,236  
Total liabilities     82,657       82,341  
     
Stockholders' equity    
Preferred stock     —       —  
Common stock     127       127  
Additional paid in capital     90,499       92,025  
Treasury stock, at cost     (12,642 )     (14,583 )
Accumulated other comprehensive loss     (8,135 )     (8,163 )
Retained earnings     186,814       187,508  
Total stockholders' equity     256,663       256,914  
Total liabilities and stockholders' equity $     339,320   $     339,255  

   
FreightCar America, Inc.  
Condensed Consolidated Statements of Operations  
(Unaudited)  
   
  Three Months Ended March 31,  
    2017     2016    
  (In thousands, except for share and per share data)  
       
Revenues $     139,536   $     148,590    
Cost of sales     129,646       132,703    
Gross profit     9,890       15,887    
Selling, general and administrative expenses     7,011       10,598    
Gain on settlement of postretirement benefit plan obligation, net of plaintiffs' attorneys' fees         —       (14,306 )  
Restructuring and impairment charges     1,777       —    
Operating income     1,102       19,595    
       
Interest expense and deferred financing costs     (42 )     (45 )  
Other income     18       81    
Income before income taxes     1,078       19,631    
Income tax provision     440       6,964    
Net income $     638   $     12,667    
       
Net income per common share - basic $     0.05   $     1.03    
       
Net income per common share - diluted $      0.05   $      1.03    
       
Weighted average common shares outstanding -      
basic     12,269,555       12,252,131    
       
Weighted average common shares outstanding -      
diluted     12,269,555       12,252,131    
       
Dividends declared per common share $     0.09   $     0.09    
       

FreightCar America, Inc.
Condensed Segment Data
(Unaudited)
 
    Three Months Ended March 31,  
    2017     2016  
  (In thousands)
Revenues:      
Manufacturing $     137,740   $     146,071  
Corporate and Other     1,796       2,519  
  Consolidated revenues $     139,536   $     148,590  
       
Operating income (loss):      
Manufacturing $     7,249   $     12,782  
Corporate and Other (1)     (6,147 )     6,813  
  Consolidated operating income               $     1,102   $     19,595  

(1) Results for the three months ended March 31, 2016 included a $14,306 gain on settlement of a postretirement benefit plan obligation, net of plaintiffs' attorneys' fees.
 
FreightCar America, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
 
  Three Months Ended  March 31,
    2017     2016  
  (In thousands)
Cash flows from operating activities    
Net income $    638   $   12,667  
Adjustments to reconcile net income to net cash flows provided by (used in) operating activities:         
Depreciation and amortization     2,337       2,619  
Recognition of deferred income from state and local incentives     (555 )     (532 )
Gain on settlement of postretirement benefit plan obligation     —       (15,606 )
Deferred income taxes     408       16,149  
Stock-based compensation recognized     214       229  
Other non-cash items     84       334  
Changes in operating assets and liabilities:    
     Accounts receivable     1,630       21,387  
Inventories     20,101       (21,353 )
Other assets     (9,872 )     (3,152 )
Accounts and contractual payables     (1,170 )     5,431  
Accrued payroll and employee benefits     1,098       (3,976 )
Income taxes receivable/payable     48       (6,277 )
Accrued warranty     267       385  
Customer deposits and other liabilities     547       12,649  
Payment for settlement of postretirement benefit plan obligation         —       (31,616 )
Accrued pension costs and accrued postretirement benefits     185       (6,283 )
     Net cash flows provided by (used in) operating activities      15,960       (16,945 )
     
Cash flows from investing activities    
     
Purchase of restricted certificates of deposit      (4,668 )      (1,182 )
Maturity of restricted certificates of deposit      4,918        2,910  
Purchase of securities held to maturity     (10,995 )     —  
Proceeds from maturity of securities     —       6,000  
Purchases of property, plant and equipment     (296 )     (2,447 )
Proceeds from sale of property, plant and equipment     119       —  
State and local incentives received      1,410       —  
  Net cash flows (used in) provided by investing activities     (9,512 )     5,281  
     
Cash flows from financing activities    
     
Employee stock settlement      (14 )      (70 )
Cash dividends paid to stockholders      (1,117 )      (1,111 )
  Net cash flows used in financing activities       (1,131 )       (1,181 )
     
Net increase (decrease) in cash and cash equivalents     5,317       (12,845 )
Cash and cash equivalents at beginning of period       92,750         83,068  
Cash and cash equivalents at end of period $     98,067   $     70,223  
 

FreightCar America, Inc. Reconciliation of Non-GAAP Measures (Unaudited)

Adjusted operating income (loss) represents the Company's operating income (loss) adjusted to exclude the effects of $1.8 million of pre-tax restructuring and impairment charges related to the Company's cost reduction plan in the first quarter of 2017, the $14.3 million pre-tax gain on settlement of the retiree benefits litigation in the first quarter of 2016 and $0.7 million of pre-tax restructuring and impairment charges related to the Company's cost reduction plan in the fourth quarter of 2016. The Company believes that adjusted operating income (loss) is useful to investors because it allows investors to more effectively compare the Company's financial results prior to and after the impact of the items described above. Adjusted operating income (loss) is not a financial measure presented in accordance with GAAP.

In addition, the presentation of this non-GAAP measure is intended to enhance the usefulness of the financial information by providing a measure that the Company's management uses internally to evaluate the Company's baseline performance. Accordingly, when analyzing our operating performance, investors should not consider adjusted operating income (loss) in isolation or as a substitute for operating income (loss) in accordance with GAAP. Our calculation of this non-GAAP measure is not necessarily comparable to that of other similarly titled measures reported by other companies. A reconciliation of adjusted operating income (loss) to operating income (loss), the most directly comparable GAAP measure, follows:

  Three Months Ended March 31,   Three Months Ended December 31,
    2017   2016       2016  
  (In thousands)
         
Operating income (loss), as reported $     1,102   $     19,595     $     (3,094 )
Less: Gain on settlement of retiree benefit plan obligations, net of plaintiffs' attorneys' fees         -     (14,306 )       -  
Add: Restructuring and impairment charges     1,777   -         730  
Adjusted operating income (loss) $     2,879 $     5,289     $     (2,364 )

 
MEDIA CONTACT Matthew S. KohnkeTELEPHONE (800) 458-2235

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