FreightCar America, Inc. RAIL today reported results for the third quarter ended September 30, 2014, with revenues of $190.3 million and net income of $6.4 million, or $0.53 per diluted share. For the third quarter of 2013, the Company reported revenues of $75.9 million and a net loss of $0.9 million, or $(0.08) per diluted share. Revenues were $139.7 million with net income of $1.6 million, or $0.13 per diluted share, in the second quarter of 2014.
“We were pleased with the Company's continued improved performance in the quarter,” said Joe McNeely, President and Chief Executive Officer. “Strong market conditions resulted in record quarterly orders of 7,375 railcars which raised our backlog to over 13,500 railcars, valued at approximately $1.1 billion. Our backlog includes 3,700 coal car rebuilds and over 8,900 new non-coal cars, reflecting the significant progress we have made in our product diversification strategy. We continue to expect to deliver approximately 7,000 railcars for the full year 2014. The recent strong order activity will help us carry this momentum into 2015, during which we anticipate delivering 9,000 to 10,000 railcars, which includes approximately 2,600 rebuilds.”
Mr. McNeely added, “To support the growth in our non-coal car products, we will invest approximately $10 million through the second quarter of 2015 to increase our production capacity at the Shoals facility.”
The Company delivered 2,354 railcars in the third quarter of 2014, which included 1,554 new and 800 rebuilt railcars. This compares to 937 railcars delivered in the third quarter of 2013, which included 194 new and 743 rebuilt railcars. There were 1,635 railcars delivered in the second quarter of 2014, which included 835 new and 800 rebuilt railcars. Total manufacturing backlog was 13,514 units at September 30, 2014, compared to 7,129 units at September 30, 2013, and 8,493 units at June 30, 2014. Non-coal cars comprised 8,914 units, or 66%, of the total backlog at September 30, 2014, compared to 2,518 units at September 30, 2013, and 4,745 units at June 30, 2014.
The Manufacturing segment had revenues of $181.5 million in the third quarter of 2014, compared to $66.9 million in the third quarter of 2013 and $128.8 million in the second quarter of 2014. Operating income for the Manufacturing segment was $16.2 million in the third quarter of 2014, compared to $4.3 million in the third quarter of 2013 and $7.4 million in the second quarter of 2014.
Revenues for the Services segment were $8.8 million in the third quarter of 2014, compared to $9.0 million in the third quarter of 2013 and $10.9 million in the second quarter of 2014. Services segment operating income was $1.6 million in the third quarter of 2014, including a $1.1 million gain on the sale of the previously closed Clinton, Indiana, repair shop, compared to operating income of $0.7 million in the third quarter of 2013 and $1.0 million in the second quarter of 2014.
Corporate costs were $6.5 million during the quarter ended September 30, 2014, compared to $6.0 million in both the third quarter of 2013 and the second quarter of 2014.
Cash, cash equivalents, marketable securities and restricted cash totaled $80.5 million as of September 30, 2014, compared to $192.3 million as of December 31, 2013. The reduction in cash was primarily driven by changes in working capital associated with production volume increases and utilization of customer deposits. The Company's $50 million revolving credit facility remains undrawn.
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The Company will host a conference call and live webcast on Friday, October 31, 2014 at 11:00 a.m. (Eastern Daylight Time) to discuss the Company's third quarter 2014 financial results. To participate in the conference call, please dial (800) 230-1059, Confirmation Number 339904. 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#: 339904
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 Daylight Time) on October 31, 2014 until 11:59 p.m. (Eastern Standard Time) on November 30, 2014. To access the replay, please dial (800) 475-6701. The replay pass code is 339904. 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, leases freight cars through its JAIX Leasing Company subsidiary and provides railcar maintenance and repairs through its FreightCar Rail Services, LLC 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 motor vehicle carriers. It is headquartered in Chicago, Illinois and has facilities in the following locations: Cherokee, Alabama; Danville, Illinois; Grand Island, Nebraska; Hastings, 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. Condensed Consolidated Balance Sheets (Unaudited) |
||||||||||||
| September 30, | December 31, | |||||||||||
| 2014 | 2013 | |||||||||||
| (In thousands) | ||||||||||||
| Assets | ||||||||||||
| Current assets | ||||||||||||
| Cash and cash equivalents | $ | 26,454 | $ | 145,506 | ||||||||
| Restricted cash and restricted certificates of deposit | 6,015 | 7,780 | ||||||||||
| Marketable securities | 47,990 | 38,988 | ||||||||||
| Accounts receivable, net | 33,534 | 4,034 | ||||||||||
| Inventories, net | 103,520 | 66,340 | ||||||||||
| Inventory on lease | 25,676 | 16,955 | ||||||||||
| Other current assets | 10,609 | 6,768 | ||||||||||
| Deferred income taxes, net | 11,017 | 11,017 | ||||||||||
| Total current assets | 264,815 | 297,388 | ||||||||||
| Property, plant and equipment, net | 41,541 | 39,396 | ||||||||||
| Railcars available for lease, net | 30,123 | 36,110 | ||||||||||
| Goodwill | 22,128 | 22,128 | ||||||||||
| Deferred income taxes, net | 19,425 | 19,758 | ||||||||||
| Other long-term assets | 3,035 | 2,939 | ||||||||||
| Total assets | $ | 381,067 | $ | 417,719 | ||||||||
|
|
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|
Liabilities and Stockholders' Equity |
||||||||||||
| Current liabilities | ||||||||||||
| Accounts and contractual payables | $ | 65,202 | $ | 16,016 | ||||||||
| Accrued payroll and employee benefits | 5,277 | 3,981 | ||||||||||
| Accrued postretirement benefits | 413 | 413 | ||||||||||
| Accrued warranty | 8,691 | 6,957 | ||||||||||
| Customer deposits | 540 | 91,771 | ||||||||||
| Customer advance | 18,623 | 19,037 | ||||||||||
| Other current liabilities | 6,154 | 9,053 | ||||||||||
| Total current liabilities | 104,900 | 147,228 | ||||||||||
| Accrued pension costs | 300 | 845 | ||||||||||
| Accrued postretirement benefits, less current portion | 64,873 | 62,899 | ||||||||||
| Accrued taxes and other long-term liabilities | 7,638 | 4,212 | ||||||||||
| Total liabilities | 177,711 | 215,184 | ||||||||||
| Stockholders' equity | ||||||||||||
| Preferred stock | — | — | ||||||||||
| Common stock | 127 | 127 | ||||||||||
| Additional paid in capital | 99,794 | 99,265 | ||||||||||
| Treasury stock, at cost | (30,004 | ) | (30,970 | ) | ||||||||
| Accumulated other comprehensive loss | (14,733 | ) | (15,132 | ) | ||||||||
| Retained earnings | 148,172 | 149,245 | ||||||||||
| Total stockholders' equity | 203,356 | 202,535 | ||||||||||
| Total liabilities and stockholders' equity | $ | 381,067 | $ | 417,719 | ||||||||
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FreightCar America, Inc. Condensed Consolidated Statements of Operations (Unaudited) |
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|
Three Months Ended |
Nine Months Ended |
|||||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||||||
| (In thousands, except share and per share data) | ||||||||||||||||||||
| Revenues | $ | 190,280 | $ | 75,946 | $ | 386,054 | $ | 210,670 | ||||||||||||
| Cost of sales | 171,461 | 69,764 | 359,333 | 197,242 | ||||||||||||||||
| Gross profit | 18,819 | 6,182 | 26,721 | 13,428 | ||||||||||||||||
| Selling, general and administrative expenses | 9,215 | 7,691 | 26,296 | 19,971 | ||||||||||||||||
| Gain on sale of railcars available for lease | (635 | ) | (563 | ) | (653 | ) | (590 | ) | ||||||||||||
| Gain on sale of assets held for sale | (1,078 | ) | — | (1,078 | ) | — | ||||||||||||||
| Operating income (loss) | 11,317 | (946 | ) | 2,156 | (5,953 | ) | ||||||||||||||
| Interest expense and deferred financing costs | (284 | ) | (238 | ) | (854 | ) | (481 | ) | ||||||||||||
| Other income | 7 | 15 | 48 | 59 | ||||||||||||||||
| Income (loss) before income taxes | 11,040 | (1,169 | ) | 1,350 | (6,375 | ) | ||||||||||||||
| Income tax provision (benefit) | 4,608 | (243 | ) | 252 | 633 | |||||||||||||||
| Net income (loss) | $ | 6,432 | $ | (926 | ) | $ | 1,098 | $ | (7,008 | ) | ||||||||||
| Net income (loss) per common share – basic | $ | 0.53 | $ | (0.08 | ) | $ | 0.09 | $ | (0.59 | ) | ||||||||||
| Net income (loss) per common share – diluted | $ | 0.53 | $ | (0.08 | ) | $ | 0.09 | $ | (0.59 | ) | ||||||||||
|
Weighted average common shares outstanding - basic |
12,007,970 | 11,957,548 | 11,999,150 | 11,950,593 | ||||||||||||||||
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Weighted average common shares outstanding - diluted |
12,108,397 | 11,957,548 | 12,088,728 | 11,950,593 | ||||||||||||||||
| Dividends declared per common share | $ | 0.06 | $ | 0.06 | $ | 0.18 | $ | 0.18 | ||||||||||||
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FreightCar America, Inc. Condensed Segment Data (Unaudited) |
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|
Three Months Ended |
Nine Months Ended |
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| 2014 | 2013 | 2014 | 2013 | |||||||||||||||||
| (In thousands) | ||||||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Manufacturing | $ | 181,490 | $ | 66,943 | $ | 358,248 | $ | 181,722 | ||||||||||||
| Services | 8,790 | 9,003 | 27,806 | 28,948 | ||||||||||||||||
| Consolidated revenues | $ | 190,280 | $ | 75,946 | $ | 386,054 | $ | 210,670 | ||||||||||||
| Operating income (loss): | ||||||||||||||||||||
| Manufacturing | $ | 16,185 | $ | 4,298 | $ | 18,584 | $ | 5,376 | ||||||||||||
| Services | 1,633 | 706 | 2,277 | 3,607 | ||||||||||||||||
| Corporate | (6,501 | ) | (5,950 | ) | (18,705 | ) | (14,936 | ) | ||||||||||||
| Consolidated operating income (loss) | $ | 11,317 | $ | (946 | ) | $ | 2,156 | $ | (5,953 | ) | ||||||||||
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FreightCar America, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) |
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|
Nine Months Ended |
||||||||||||
| 2014 | 2013 | |||||||||||
| (In thousands) | ||||||||||||
| Cash flows from operating activities | ||||||||||||
| Net income (loss) | $ | 1,098 | $ | (7,008 | ) | |||||||
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Adjustments to reconcile net income (loss) to net cash flows used in operating activities: |
||||||||||||
| Depreciation and amortization | 7,481 | 7,289 | ||||||||||
| Gain on sale of railcars available for lease | (653 | ) | (590 | ) | ||||||||
| Gain on sale of assets held for sale | (1,078 | ) | — | |||||||||
| Other non-cash items, net | 795 | 108 | ||||||||||
| Deferred income taxes | 116 | 337 | ||||||||||
| Stock-based compensation recognized | 1,576 | 1,703 | ||||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Accounts receivable | (29,500 | ) | (7,623 | ) | ||||||||
| Inventories | (37,509 | ) | 7,156 | |||||||||
| Inventory on lease | (8,721 | ) | (16,955 | ) | ||||||||
| Other assets | (4,380 | ) | 614 | |||||||||
| Accounts and contractual payables | 47,922 | (12,710 | ) | |||||||||
| Customer deposits and other current liabilities | (91,128 | ) | (27,418 | ) | ||||||||
| Other changes in working capital | 4,218 | (3,476 | ) | |||||||||
| Accrued pension costs and accrued postretirement benefits | 1,422 | (1,171 | ) | |||||||||
| Net cash flows used in operating activities | (108,341 | ) | (59,744 | ) | ||||||||
| Cash flows from investing activities | ||||||||||||
| Restricted cash deposits | (1,017 | ) | (3,675 | ) | ||||||||
| Restricted cash withdrawals | 2,782 | 14,240 | ||||||||||
| Purchase of restricted certificates of deposit | — | (295 | ) | |||||||||
| Purchase of securities held to maturity | (50,974 | ) | (38,976 | ) | ||||||||
| Proceeds from securities held to maturity | 42,002 | 42,000 | ||||||||||
| Proceeds from sale of property, plant and equipment, assets held for sale and railcars available for lease | 8,031 | 6,741 | ||||||||||
| Purchases of property, plant and equipment | (8,248 | ) | (16,282 | ) | ||||||||
| Net cash flows (used in) provided by investing activities | (7,424 | ) | 3,753 | |||||||||
| Cash flows from financing activities | ||||||||||||
| Deferred financing costs | — | (138 | ) | |||||||||
| Stock option exercise | 143 | — | ||||||||||
| Employee restricted stock settlement | (224 | ) | (65 | ) | ||||||||
| Cash dividends paid to stockholders | (2,171 | ) | (2,166 | ) | ||||||||
| Customer advance for production of leased railcars | — | 19,400 | ||||||||||
| Repayment of customer advance | (1,035 | ) | (552 | ) | ||||||||
| Net cash flows (used in) provided by financing activities | (3,287 | ) | 16,479 | |||||||||
| Net decrease in cash and cash equivalents | (119,052 | ) | (39,512 | ) | ||||||||
| Cash and cash equivalents at beginning of period | 145,506 | 98,509 | ||||||||||
| Cash and cash equivalents at end of period | $ | 26,454 | $ | 58,997 | ||||||||
FreightCar America, Inc.
Media Contact:
Charles F. Avery, Jr.,
800-458-2235
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