FreightCar America, Inc. RAIL today reported results for the third quarter ended September 30, 2015, with revenues of $241.1 million and net income of $14.8 million, or $1.20 per diluted share. Third quarter 2015 results included a pre-tax gain of $4.6 million, or $0.24 per diluted share on an after-tax basis, related to the sale of the railcar repair and maintenance services business completed on September 30, 2015 for $20.0 million in cash and the assumption of certain liabilities by the purchaser. For the third quarter of 2014, the Company reported revenues of $190.3 million and net income of $6.4 million, or $0.53 per diluted share, of which $0.05 per diluted share related to the gain on sale of the Clinton, Indiana, repair facility. Revenues were $235.6 million with net income of $7.4 million, or $0.60 per diluted share, in the second quarter of 2015.
President and Chief Executive Officer Joe McNeely commented, "Our third quarter earnings grew significantly both year over year and sequentially, a result of higher railcar deliveries and a stronger manufacturing margin. During the quarter, we saw operational improvements throughout our organization, including at the Shoals facility, where production continued to ramp up. The sale of the railcar repair and maintenance services business during the quarter will allow us to increase our focus on the railcar manufacturing, parts and leasing businesses, while continuing to diversify our railcar portfolio and striving for greater productivity gains throughout the Company."
McNeely concluded, "Looking forward, we expect our full year 2015 deliveries to be between 9,000 and 9,500 railcars. The Company is well positioned with a backlog of just over 12,000 railcars, which consists almost exclusively of non-coal cars. Supported by orders in the backlog, we are planning deliveries of between 7,000 and 8,000 railcars in 2016, as we do not see any meaningful coal car orders in the near term to replace the coal car rebuild program that is concluding this year."
The Company delivered 2,846 railcars in the third quarter of 2015, which included 2,076 new and 770 rebuilt railcars. This compares to 2,354 railcars delivered in the third quarter of 2014, which included 1,554 new and 800 rebuilt cars. There were 2,611 railcars delivered in the second quarter of 2015, of which 1,861 were new and 750 were rebuilds. Total manufacturing backlog was 12,237 units at September 30, 2015, compared to 13,514 units at September 30, 2014 and 14,075 units at June 30, 2015. Non-coal cars comprised 11,522 units, or 94% of the total backlog, at September 30, 2015, compared to 8,914 units, or 66% of the total backlog, at September 30, 2014 and 12,158 units, or 86% of the total backlog, at June 30, 2015.
The Manufacturing segment had revenues of $233.3 million in the third quarter of 2015, compared to $181.5 million for the same period of 2014 and $227.0 million in the second quarter of 2015. The Manufacturing segment operating income was $25.8 million in the third quarter of 2015, compared to $16.2 million in the third quarter of 2014 and $17.2 million for the second quarter of 2015.
Revenues for the Services segment were $7.8 million in the third quarter of 2015, compared to $8.8 million in the third quarter of 2014 and $8.6 million in the second quarter of 2015. The Services segment operating income was $5.2 million in the third quarter of 2015, compared to $1.6 million in the third quarter of 2014 and $1.5 million in the second quarter of 2015. Services segment operating income in the third quarter of 2015 included a pre-tax gain of $4.6 million related to the sale of the railcar repair and maintenance services business, while Services segment operating income in the third quarter of 2014 included a pre-tax gain of $1.1 million related to the sale of the Clinton, Indiana repair facility.
Cash, cash equivalents, marketable securities and restricted cash were $131.9 million as of September 30, 2015, compared to $167.5 million as of December 31, 2014. The decrease was driven primarily by an increase in inventory to support production requirements and utilization of a customer deposit, partially offset by the receipt of net cash proceeds of $17.6 million related to the sale of the railcar repair and maintenance services business and the receipt of $15.7 million associated with Alabama state and local incentives.
The Company will host a conference call and live webcast on Tuesday, November 3, 2015 at 11:00 a.m. (Eastern Standard Time) to discuss the Company's third quarter 2015 financial results. To participate in the conference call, please dial (800) 700-7860, Confirmation Number 371914. 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#: 371914
If you need technical assistance, call the toll-free AT&T Conference Casting Support Help Line at 1-888-793-6118. 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 November 3, 2015 until 11:59 p.m. (Eastern Standard Time) on December 3, 2015. To access the replay, please dial (800) 475-6701. The replay pass code is 371914. 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; and Roanoke, Virginia. 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.
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FreightCar America, Inc. |
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| September 30, | December 31, | |||||||
| 2015 | 2014 | |||||||
| (In thousands) | ||||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 94,997 | $ | 113,532 | ||||
| Restricted cash and restricted certificates of deposit | 6,896 | 6,015 | ||||||
| Marketable securities | 30,009 | 47,961 | ||||||
| Accounts receivable, net | 28,824 | 4,086 | ||||||
| Inventories, net | 141,676 | 82,259 | ||||||
| Inventory on lease | — | 116 | ||||||
| Other current assets | 8,300 | 7,057 | ||||||
| Deferred income taxes, net | 10,214 | 12,139 | ||||||
| Total current assets | 320,916 | 273,165 | ||||||
| Property, plant and equipment, net | 44,055 | 43,239 | ||||||
| Railcars available for lease, net | 16,126 | 22,897 | ||||||
| Goodwill | 21,521 | 22,128 | ||||||
| Deferred income taxes, net | 22,883 | 21,553 | ||||||
| Other long-term assets | 2,900 | 2,270 | ||||||
| Total assets | $ | 428,401 | $ | 385,252 | ||||
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Liabilities and Stockholders' Equity |
||||||||
| Current liabilities | ||||||||
| Accounts and contractual payables | $ | 59,136 | $ | 34,010 | ||||
| Accrued payroll and employee benefits | 6,565 | 6,462 | ||||||
| Accrued postretirement benefits | 409 | 409 | ||||||
| Accrued warranty | 9,305 | 8,742 | ||||||
| Customer deposits and deferred revenue | 11,074 | 43,977 | ||||||
| Income taxes payable | 7,308 | — | ||||||
| Other current liabilities | 7,458 | 4,725 | ||||||
| Total current liabilities | 101,255 | 98,325 | ||||||
| Accrued pension costs | 6,665 | 7,210 | ||||||
| Accrued postretirement benefits, less current portion | 75,460 | 73,474 | ||||||
| Deferred income – state and local incentives, long-term | 12,722 | — | ||||||
| Accrued taxes and other long-term liabilities | 10,699 | 7,548 | ||||||
| Total liabilities | 206,801 | 186,557 | ||||||
| Stockholders' equity | ||||||||
| Preferred stock | — | — | ||||||
| Common stock | 127 | 127 | ||||||
| Additional paid in capital | 93,488 | 100,303 | ||||||
| Treasury stock, at cost | (17,623 | ) | (29,971 | ) | ||||
| Accumulated other comprehensive loss | (23,486 | ) | (24,017 | ) | ||||
| Retained earnings | 169,094 | 152,253 | ||||||
| Total stockholders' equity | 221,600 | 198,695 | ||||||
| Total liabilities and stockholders' equity | $ | 428,401 | $ | 385,252 | ||||
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FreightCar America, Inc. |
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Three Months Ended
September 30, |
Nine Months Ended
September 30, |
|||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| (In thousands, except for share and per share data) | ||||||||||||||||
| Revenues | $ | 241,114 | $ | 190,280 | $ | 569,555 | $ | 386,054 | ||||||||
| Cost of sales | 212,064 | 171,461 | 514,146 | 359,333 | ||||||||||||
| Gross profit | 29,050 | 18,819 | 55,409 | 26,721 | ||||||||||||
| Selling, general and administrative expenses | 10,706 | 9,215 | 30,473 | 26,296 | ||||||||||||
| Gain on sale of railcars available for lease | — | (635 | ) | (1,187 | ) | (653 | ) | |||||||||
| Gain on sale of railcar repair and maintenance services business and facility | (4,578 | ) | (1,078 | ) | (4,578 | ) | (1,078 | ) | ||||||||
| Operating income | 22,922 | 11,317 | 30,701 | 2,156 | ||||||||||||
| Interest expense and deferred financing costs | (56 | ) | (284 | ) | (184 | ) | (854 | ) | ||||||||
| Other income | 8 | 7 | 91 | 48 | ||||||||||||
| Income before income taxes | 22,874 | 11,040 | 30,608 | 1,350 | ||||||||||||
| Income tax provision | 8,047 | 4,608 | 10,457 | 252 | ||||||||||||
| Net income | $ | 14,827 | $ | 6,432 | $ | 20,151 | $ | 1,098 | ||||||||
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Net income per common share - basic |
$ | 1.20 | $ | 0.53 | $ | 1.65 | $ | 0.09 | ||||||||
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Net income per common share - diluted |
$ | 1.20 | $ | 0.53 | $ | 1.64 | $ | 0.09 | ||||||||
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Weighted average common shares outstanding - basic |
12,241,211 | 12,007,970 | 12,153,313 | 11,999,150 | ||||||||||||
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Weighted average common shares outstanding - diluted |
12,241,426 | 12,108,397 | 12,207,432 | 12,088,728 | ||||||||||||
| Dividends declared per common share | $ | 0.09 | $ | 0.06 | $ | 0.27 | $ | 0.18 | ||||||||
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FreightCar America, Inc. |
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Three Months Ended
September 30, |
Nine Months Ended
September 30, |
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| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| (In thousands) | ||||||||||||||||
| Revenues: | ||||||||||||||||
| Manufacturing | $ | 233,294 | $ | 181,490 | $ | 545,407 | $ | 358,248 | ||||||||
| Services | 7,820 | 8,790 | 24,148 | 27,806 | ||||||||||||
| Consolidated revenues | $ | 241,114 | $ | 190,280 | $ | 569,555 | $ | 386,054 | ||||||||
| Operating Income (Loss): | ||||||||||||||||
| Manufacturing | $ | 25,817 | $ | 16,185 | $ | 44,910 | $ | 18,584 | ||||||||
| Services(1) | 5,229 | 1,633 | 7,917 | 2,277 | ||||||||||||
| Corporate | (8,124 | ) | (6,501 | ) | (22,126 | ) | (18,705 | ) | ||||||||
| Consolidated operating income | $ | 22,922 | $ | 11,317 | $ | 30,701 | $ | 2,156 | ||||||||
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(1) Results for each of the three and nine month periods ended September 30, 2015 included a $4.6 gain on sale of the Company's railcar repair and maintenance services business. Three and nine month periods ended September 30, 2014 included a $1.1 million gain on sale of the Company's closed repair and maintenance facility. |
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FreightCar America, Inc. |
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Nine Months Ended
September 30, |
||||||||
| 2015 | 2014 | |||||||
| (In thousands) | ||||||||
| Cash flows from operating activities | ||||||||
| Net income | $ | 20,151 | $ | 1,098 | ||||
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Adjustments to reconcile net income to net cash flows used in operating activities: |
||||||||
| Depreciation and amortization | 7,551 | 7,481 | ||||||
| Recognition of deferred income from state and local incentives | (883 | ) | — | |||||
| Gain on sale of railcars available for lease | (1,187 | ) | (653 | ) | ||||
| Gain on sale of railcar repair and maintenance services business and facility | (4,578 | ) | (1,078 | ) | ||||
| Deferred income taxes | 296 | 116 | ||||||
| Stock-based compensation expense recognized | 1,686 | 1,576 | ||||||
| Other non-cash items, net | 1,555 | 795 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (27,514 | ) | (29,500 | ) | ||||
| Inventories | (63,488 | ) | (37,509 | ) | ||||
| Inventory on lease | 116 | (8,721 | ) | |||||
| Other assets | (1,307 | ) | (4,380 | ) | ||||
| Accounts and contractual payables | 25,180 | 47,922 | ||||||
| Accrued payroll and employee benefits | 295 | 1,280 | ||||||
| Income taxes receivable/payable | 8,050 | 870 | ||||||
| Accrued warranty | 563 | 1,734 | ||||||
| Customer deposits and other liabilities | (29,471 | ) | (90,794 | ) | ||||
| Accrued pension costs and accrued postretirement benefits | 1,972 | 1,422 | ||||||
| Net cash flows used in operating activities | (61,013 | ) | (108,341 | ) | ||||
| Cash flows from investing activities | ||||||||
| Restricted cash withdrawals | — | 2,782 | ||||||
| Restricted cash deposits | — | (1,017 | ) | |||||
| Purchase of restricted certificates of deposit | (2,165 | ) | — | |||||
| Maturity of restricted certificates of deposit | 1,284 | — | ||||||
| Purchase of securities held to maturity | (17,997 | ) | (50,974 | ) | ||||
| Proceeds from maturity of securities | 36,004 | 42,002 | ||||||
| Proceeds from sale of property, plant and equipment and railcars available for lease | 7,654 | 5,907 | ||||||
| Proceeds from sale of railcar repair and maintenance services business and facility | 17,589 | 2,124 | ||||||
| Purchases of property, plant and equipment | (16,161 | ) | (8,248 | ) | ||||
| State and local incentives received | 15,733 | — | ||||||
| Net cash flows provided by (used in) investing activities | 41,941 | (7,424 | ) | |||||
| Cash flows from financing activities | ||||||||
| Stock option exercise | 4,885 | 143 | ||||||
| Employee stock settlement | (1,051 | ) | (224 | ) | ||||
| Excess tax benefit from stock-based compensation | 13 | — | ||||||
| Cash dividends paid to stockholders | (3,310 | ) | (2,171 | ) | ||||
| Reduction in customer advance for production of leased railcars | — | (1,035 | ) | |||||
| Net cash flows provided by (used in) financing activities | 537 | (3,287 | ) | |||||
| Net decrease in cash and cash equivalents | (18,535 | ) | (119,052 | ) | ||||
| Cash and cash equivalents at beginning of period | 113,532 | 145,506 | ||||||
| Cash and cash equivalents at end of period | $ | 94,997 | $ | 26,454 | ||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20151102006697/en/
FreightCar America, Inc.
Charles F. Avery, Jr., 800-458-2235
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