- Fourth quarter revenue of $79.2 million on deliveries of 977 units
- Fourth quarter net loss of $11.1 million, or $0.90 per diluted share, inclusive of a $2.5 million, or $0.20 per diluted share, tax expense as a result of the Tax Cuts and Jobs Act
- Total cash, cash equivalents, marketable securities and restricted cash increased by $37.7 million to $136.4 million at December 31, 2017
- Year-end backlog totaling 2,392 railcars at an aggregate value of approximately $181 million
- Full-year 2018 delivery outlook forecasted to range between 3,500 and 4,300 railcars
- Exiting long-term agreement with Navistar at Shoals facility through the purchase of Navistar's interest; Will become primary tenant and take control of full manufacturing process at Shoals facility
- 'Back to Basics' operational improvement strategy expected to deliver direct cost of goods sold savings of between $3,000 and $4,000 per railcar, excluding commodity price movements, by the end of 2018
Meyer continued, "I've spent several months getting to know many of our customers and discussing their needs. I am very encouraged that they want more supply chain choices and want FreightCar America to be part of their solutions. Our products and customer-centric focus are highly valued by our customers. At the same time, we recognize that delivering maximum value to our customers requires a lean, best-in-class operational foundation."Meyer concluded, "Therefore, we began executing our 'Back to Basics' program, which is designed to transform our operational and manufacturing platforms. There are three main components to this program: (1) simplifying our business structure; (2) developing, training and retaining the right talent across our organization; and (3) implementing best-in-class processes across the business. Collectively, these initiatives will help us to address a number of foundational impediments to our success, lower our cost structure and significantly improve our productivity. While these initiatives will take time to implement, we expect that we can start to take meaningful near-term costs out of the business and are forecasting lowering our direct cost of goods sold by $3,000 to $4,000 per railcar delivered on a run rate basis by the end of 2018." Fourth Quarter Results
- Consolidated revenues were $79.2 million in the fourth quarter of 2017 compared to $135.5 million in the same quarter of 2016.
- The Company delivered 977 railcars in the fourth quarter of 2017, which included 855 new railcars, 47 rebuilt railcars and 75 leased railcars. This compares to 1,364 railcars delivered in the fourth quarter of 2016, which included 1,137 new railcars and 227 rebuilt railcars.
- The Company had a diversified backlog totaling 2,392 railcars at December 31, 2017, valued at approximately $181 million. Based upon current backlog and inquiry levels, the Company expects to deliver between 3,500 and 4,300 railcars in 2018.
- Consolidated operating loss for the fourth quarter of 2017 was $13.3 million compared to $3.1 million for the fourth quarter of 2016.
- Adjusted operating loss, which excluded a $1.5 million provision for a contingent liability, was $11.9 million for the fourth quarter of 2017 compared to adjusted operating loss of $2.4 million, which excluded the effect of $0.7 million of restructuring and impairment charges related to the Company's cost reduction plan, for the fourth quarter of 2016. Adjusted operating (loss) income is a non-GAAP financial measure. A reconciliation of adjusted operating (loss) income to operating (loss) income, the most directly comparable GAAP measure, is provided in the attached supplemental disclosure.
- The income tax benefit of $2.0 million recorded in the fourth quarter of 2017 included a $2.5 million tax expense related to a remeasurement of deferred tax assets as a result of the Tax Cuts and Jobs Act.
- Net loss in the fourth quarter of 2017 was $11.1 million, or $0.90 per diluted share, compared to net income of $0.1 million, or $0.01 per diluted share, in the fourth quarter of 2016.
- Cash, cash equivalents, marketable securities, restricted cash and restricted certificates of deposit were $136.4 million as of December 31, 2017. The $37.7 million increase from December 31, 2016 was primarily attributable to reductions in working capital and the receipt of an $11.9 million income tax refund partially offset by the 2017 net loss.
- Consolidated revenues for the fiscal year ended December 31, 2017 were $409.5 million compared to $523.7 million for the fiscal year ended December 31, 2016.
- The Company delivered 4,427 railcars in 2017, which included 4,305 new railcars, 47 rebuilt railcars and 75 leased railcars. This compares to 5,559 railcars delivered in 2016, which included 5,332 new railcars and 227 rebuilt railcars.
- Consolidated operating loss for 2017 was $31.8 million compared to consolidated operating income of $15.8 million in 2016. Adjusted operating loss, which excluded restructuring and impairment charges, contingency charges related to patent litigation and CEO transition costs, was $24.1 million in 2017. This compared to adjusted operating income of $3.8 million in 2016, which excluded restructuring and impairment charges and the gain on settlement of the retiree benefit plan obligation.
- The income tax benefit of $8.8 million in 2017 included a $2.5 million tax expense related to a remeasurement of deferred tax assets as a result of the Tax Cuts and Jobs Act.
- Net loss in 2017 was $22.6 million, or $1.82 per diluted share, compared to net income of $12.3 million, or $1.00 per diluted share, in 2016.
Event URL: https://im.csgsystems.com/cgi-bin/confCastConference ID#: 444979 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 Standard Time) on February 27, 2018 until 11:59 p.m. (Eastern Daylight Time) on March 27, 2018. To access the replay, please dial (800) 475-6701. The replay pass code is 444979. An audio replay of the call will be available on the Company's website within two days following the earnings call. About FreightCar America, Inc. 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. Forward Looking Statements 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: risks relating to the Shoals facility, including the acquisition not being completed if certain closing conditions are not met, the facility not meeting internal assumptions or expectations, and the assumption of unforeseen liabilities from Navistar; 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. Consolidated Balance Sheets (Unaudited)
|December 31,||December 31,|
|Cash and cash equivalents||$||87,788||$||92,750|
|Restricted cash and restricted certificates of deposit||5,720||5,970|
|Accounts receivable, net||7,581||25,207|
|Income taxes receivable||815||13,283|
|Other current assets||9,834||6,056|
|Total current assets||199,947||241,170|
|Property, plant and equipment, net||38,253||46,347|
|Railcars available for lease, net||23,434||24,018|
|Deferred income taxes, net||9,446||4,221|
|Other long-term assets||3,303||1,978|
|Liabilities and Stockholders' Equity|
|Accounts and contractual payables||$||23,329||$||34,536|
|Accrued payroll and other employee costs||1,809||3,117|
|Reserve for workers' compensation||3,394||4,444|
|Deferred income state and local incentives, current||2,219||2,219|
|Other current liabilities||1,504||1,495|
|Total current liabilities||40,317||54,135|
|Accrued pension costs||5,763||6,821|
|Accrued postretirement benefits, less current portion||5,556||5,769|
|Deferred income state and local incentives, long-term||9,161||11,380|
|Accrued taxes and other long-term liabilities||3,375||4,236|
|Additional paid in capital||90,347||92,025|
|Treasury stock, at cost||(12,555||)||(14,583||)|
|Accumulated other comprehensive loss||(7,567||)||(8,163||)|
|Total stockholders' equity||231,732||256,914|
|Total liabilities and stockholders' equity||$||295,904||$||339,255|
|Three Months Ended December 31,||Twelve Months Ended December 31,|
|(In thousands, except for share and per share data)|
|Cost of sales||83,290||128,797||406,143||483,552|
|Gross (loss) profit||(4,049||)||6,726||3,331||40,179|
|Selling, general and administrative expenses||9,282||9,090||32,911||36,376|
|Gain on settlement of postretirement benefit obligation, net of plaintiffs' attorneys' fees||—||—||—||(14,306||)|
|Restructuring and impairment charges||7||730||2,212||2,261|
|Operating (loss) income||(13,338||)||(3,094||)||(31,792||)||15,848|
|Interest expense and deferred financing costs||(64||)||(56||)||(163||)||(171||)|
|(Loss) income before income taxes||(13,185||)||(3,134||)||(31,407||)||15,788|
|Income tax (benefit) provision||(2,047||)||(3,208||)||(8,845||)||3,464|
|Net (loss) income||$||(11,138||)||$||74||$||(22,562||)||$||12,324|
|Net (loss) income per common share - basic||$||(0.90||)||$||0.01||$||(1.82||)||$||1.00|
|Net (loss) income per common share - diluted||$||(0.90||)||$||0.01||$||(1.82||)||$||1.00|
|Weighted average common shares outstanding -|
|Weighted average common shares outstanding -|
|Dividends declared per common share||$||0.00||$||0.09||$||0.27||$||0.36|
|Three Months Ended December 31,||Twelve Months Ended December 31,|
|Corporate and other||2,409||1,718||8,993||7,668|
|Operating (Loss) Income:|
|Corporate and other (1)(2)(3)||(6,791||)||(6,927||)||(24,794||)||(13,164||)|
|Consolidated operating (loss) income||$||(13,338||)||$||(3,094||)||$||(31,792||)||$||15,848|
FreightCar America, Inc. Consolidated Statements of Cash Flows (Unaudited)
|Twelve Months Ended December 31,|
|Cash flows from operating activities|
|Net (loss) income||$||(22,562||)||$||12,324|
|Adjustments to reconcile net (loss) income to net cash flows provided by (used in) operating activities:|
|Depreciation and amortization||9,366||9,736|
|Recognition of deferred income from state and local incentives||(2,219||)||(2,129||)|
|Gain on settlement of postretirement benefit plan obligation||—||(15,606||)|
|Deferred income taxes||(6,424||)||22,723|
|Stock-based compensation expense recognized||1,162||1,149|
|Other non-cash items||1,957||1,800|
|Changes in operating assets and liabilities:|
|Accounts and contractual payables||(11,170||)||260|
|Accrued payroll and employee benefits||(1,305||)||(5,589||)|
|Income taxes receivable/payable||9,623||(12,746||)|
|Payment for settlement of postretirement benefit plan obligation||—||(31,616||)|
|Accrued pension costs and accrued postretirement benefits||(678||)||(6,445||)|
|Net cash flows provided by operating activities||40,341||215|
|Cash flows from investing activities|
|Purchase of restricted certificates of deposit||(10,492||)||(6,370||)|
|Maturity of restricted certificates of deposit||10,742||7,296|
|Purchase of securities held to maturity||(85,821||)||—|
|Proceeds from maturity of securities||43,080||27,001|
|Proceeds from sale of property, plant and equipment and railcars available for lease||119||2|
|Purchases of property, plant and equipment||(967||)||(13,846||)|
|State and local incentives received||1,410||—|
|Net cash flows (used in) provided by investing activities||(41,929||)||14,083|
|Cash flows from financing activities|
|Employee stock settlement||(23||)||(78||)|
|Deferred financing costs||—||(83||)|
|Cash dividends paid to stockholders||(3,351||)||(4,455||)|
|Net cash flows used in financing activities||(3,374||)||(4,616||)|
|Net (decrease) increase in cash and cash equivalents||(4,962||)||9,682|
|Cash and cash equivalents at beginning of period||92,750||83,068|
|Cash and cash equivalents at end of period||$||87,788||$||92,750|
- For the fourth quarter of 2017, $7 thousand of restructuring and impairment charges related to the Company's cost reduction plan and $1.5 million related to a contingent liability;
- For the fourth quarter of 2016, $0.7 million of restructuring and impairment charges related to the Company's cost reduction plan;
- For the third quarter of 2017, $0.1 million of restructuring and impairment charges related to the Company's cost reduction plan, charges of $2.9 million related to a contingent liability and $1.2 million in severance and other costs associated with the change in our chief executive officer;
- For the full year of 2017, $2.2 million of restructuring and impairment charges related to the Company's cost reduction plan, charges of $4.3 million related to a contingent liability and $1.2 million in severance and other costs associated with the change in our chief executive officer; and
- For the full year of 2016, $2.3 million of restructuring and impairment charges related to the Company's cost reduction plan and a $14.3 million pre-tax gain on settlement of the retiree benefits litigation.
In addition, the presentation of this non-GAAP measure is intended to enhance the usefulness of the financial information by providing a measure that the Company's management uses internally to evaluate the Company's baseline performance. Accordingly, when analyzing our operating performance, investors should not consider adjusted operating (loss) income in isolation or as a substitute for operating (loss) income in accordance with GAAP. Our calculation of this non-GAAP measure is not necessarily comparable to that of other similarly titled measures reported by other companies. A reconciliation of adjusted operating income (loss) to operating (loss) income, the most directly comparable GAAP measure, follows:
|Three Months Ended December 31,||Three Months Ended September 30,||Twelve Months Ended December 31,|
|Operating (loss) income, as reported||$||(13,338||)||$||(3,094||)||$||(18,612||)||$||(31,792||)||$||15,848|
|Add: Restructuring and impairment charges||7||730||59||2,212||2,261|
|Add: Contingency charge||1,450||-||2,850||4,300||-|
|Add: CEO transition costs||-||-||1,185||1,185||-|
|Less: Gain on settlement of retiree benefit plan obligations, net of plaintiffs' attorneys fees||-||-||-||-||(14,306||)|
|Adjusted operating (loss) income||$||(11,881||)||$||(2,364||)||$||(14,518||)||$||(24,095||)||$||3,803|
|INVESTOR & MEDIA CONTACT||Matthew S. Kohnke|