CHICAGO, Aug. 01, 2018 (GLOBE NEWSWIRE) -- FreightCar America, Inc. RAIL today reported results for the second quarter ended June 30, 2018.
Financial Highlights
- Second quarter revenue of $66.7 million on deliveries of 1,185 units
- Second quarter net loss of $2.3 million, or $0.19 per diluted share
- Total cash, cash equivalents, restricted cash equivalents, marketable securities and restricted certificates of deposit of $86.9 million at June 30, 2018, which reflects a total investment of $37.8 million in railcars built for the Company's JAIX leasing arm
- Backlog now totals 2,319 railcars with an aggregate value of approximately $190 million
- Completed all integration work associated with the acquisition of Navistar's rail operations at Shoals facility
- Entered into a definitive agreement to sell the Danville, IL production facility for $2.2 million
- On track to deliver original "Back to Basics" cost reduction goal early and now targeting to exit the year with a per car total cost reduction of $4,000 to $5,000
- Full-year 2018 delivery outlook raised to range between 4,250 and 4,500 railcars
"The second quarter marks another step in the right direction for FreightCar America," said Jim Meyer, President and Chief Executive Officer of FreightCar America. "Our marketplace remains extremely challenging with continued pressures on pricing, and our backlog includes several smaller production runs. However, we have made meaningful progress on our ‘Back to Basics' operational improvement strategy and those efforts positively impacted our quarterly results. We are ahead of schedule on our previously announced plan to reduce our cost of goods sold by $3,000 to $4,000 per railcar by year end. As a result, we are now increasing our goal to exit the year on a run rate of $4,000 to $5,000 in savings per railcar."
Meyer concluded, "Despite soft industry dynamics, our railcar deliveries of 1,185 units showed improvement to both year-over-year and sequential period deliveries. Our quarterly order total of 1,450 railcars is down slightly compared to the second quarter of 2017 but increased compared to the first quarter of 2018. All 1,450 of the railcar orders received were for new railcars. Because of this, we are raising our full-year railcar delivery outlook range slightly from 4,000 to 4,300 railcars to 4,250 to 4,500 railcars for fiscal year 2018."
Second Quarter Results
- Consolidated revenues were $66.7 million in the second quarter of 2018 compared to $118.7 million in the same quarter of 2017. The Company delivered 1,185 railcars in the second quarter of 2018, which included 368 new railcars, 514 rebuilt railcars and 303 leased railcars. This compares to 1,096 railcars delivered in the second quarter of 2017, all of which were new railcars.
- The Company had a diversified backlog totaling 2,319 railcars at June 30, 2018, valued at approximately $190 million.
- Consolidated operating loss for the second quarter of 2018 was $3.5 million compared to an operating loss of $1.0 million for the second quarter of 2017.
- Net loss in the second quarter of 2018 was $2.3 million, or $0.19 per diluted share, compared to a net loss of $0.4 million, or $0.04 per diluted share, in the second quarter of 2017.
- Cash, cash equivalents, restricted cash equivalents, marketable securities and restricted certificates of deposit were $86.9 million as of June 30, 2018, compared to $136.4 million as of December 31, 2017. The decrease in cash was primarily driven by Company funded deliveries of leased railcars into its short-term lease fleet and an increase in accounts receivable.
Second Quarter 2018 Conference Call & Webcast Information
The Company will host a conference call and live webcast on Thursday, August 2, 2018 at 11:00 a.m. (Eastern Daylight Time) to discuss the Company's second quarter 2018 financial results. To participate in the conference call, please dial (800) 288-8960, Confirmation Number 452079. 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#: 452079
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 August 2, 2018 until 11:59 p.m. (Eastern Daylight Time) on September 2, 2018. To access the replay, please dial (800) 475-6701. The replay pass code is 452079. 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 facility not meeting internal assumptions or expectations and 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. Condensed Consolidated Balance Sheets (Unaudited) | ||||||
| June 30, | December 31, | |||||
| 2018 | 2017 | |||||
| (In thousands) | ||||||
| Assets | ||||||
| Current assets | ||||||
| Cash, cash equivalents and restricted cash equivalents | $ | 25,144 | $ | 87,788 | ||
| Restricted certificates of deposit | 5,452 | 5,720 | ||||
| Marketable securities | 56,353 | 42,917 | ||||
| Accounts receivable, net | 25,665 | 7,581 | ||||
| Inventories, net | 60,393 | 45,292 | ||||
| Inventory on lease | 37,778 | 5,550 | ||||
| Other current assets | 7,649 | 5,099 | ||||
| Total current assets | 218,434 | 199,947 | ||||
| Property, plant and equipment, net | 50,277 | 38,253 | ||||
| Railcars available for lease, net | 24,384 | 23,434 | ||||
| Goodwill | 21,521 | 21,521 | ||||
| Deferred income taxes, net | 12,097 | 9,446 | ||||
| Other long-term assets | 3,160 | 3,303 | ||||
| Total assets | $ | 329,873 | $ | 295,904 | ||
Liabilities and Stockholders' Equity | ||||||
| Current liabilities | ||||||
| Accounts and contractual payables | $ | 38,600 | $ | 23,329 | ||
| Accrued payroll and other employee costs | 2,704 | 1,809 | ||||
| Reserve for workers' compensation | 3,575 | 3,394 | ||||
| Accrued warranty | 9,238 | 8,062 | ||||
| Customer deposits | 3,362 | 362 | ||||
| Deferred income state and local incentives, current | 2,219 | 2,219 | ||||
| Deferred rent, current | 6,466 | 178 | ||||
| Other current liabilities | 1,348 | 964 | ||||
| Total current liabilities | 67,512 | 40,317 | ||||
| Accrued pension costs | 5,197 | 5,763 | ||||
| Accrued postretirement benefits, less current portion | 5,314 | 5,556 | ||||
| Deferred income state and local incentives, long-term | 8,051 | 9,161 | ||||
| Deferred rent, long-term | 18,703 | 2,988 | ||||
| Accrued taxes and other long-term liabilities | 399 | 387 | ||||
| Total liabilities | 105,176 | 64,172 | ||||
| Stockholders' equity | ||||||
| Preferred stock | — | — | ||||
| Common stock | 127 | 127 | ||||
| Additional paid in capital | 89,110 | 90,347 | ||||
| Treasury stock, at cost | (9,685 | ) | (12,555 | ) | ||
| Accumulated other comprehensive loss | (7,495 | ) | (7,567 | ) | ||
| Retained earnings | 152,640 | 161,380 | ||||
| Total stockholders' equity | 224,697 | 231,732 | ||||
| Total liabilities and stockholders' equity | $ | 329,873 | $ | 295,904 | ||
| FreightCar America, Inc. Condensed Consolidated Statements of Operations (Unaudited) | ||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||
| (In thousands, except for share and per share data) | ||||||||||||||
| Revenues | $ | 66,743 | $ | 118,672 | $ | 149,716 | $ | 258,208 | ||||||
| Cost of sales | 61,904 | 113,428 | 145,473 | 243,158 | ||||||||||
| Gross profit | 4,839 | 5,244 | 4,243 | 15,050 | ||||||||||
| Selling, general and administrative expenses | 8,385 | 5,922 | 16,381 | 12,952 | ||||||||||
| Restructuring and impairment charges | — | 369 | — | 1,726 | ||||||||||
| Operating (loss) income | (3,546 | ) | (1,047 | ) | (12,138 | ) | 372 | |||||||
| Interest expense and deferred financing costs | (27 | ) | (30 | ) | (59 | ) | (72 | ) | ||||||
| Other income (expense) | 588 | 184 | 969 | (115 | ) | |||||||||
| (Loss) income before income taxes | (2,985 | ) | (893 | ) | (11,228 | ) | 185 | |||||||
| Income tax (benefit) provision | (649 | ) | (445 | ) | (2,488 | ) | (5 | ) | ||||||
| Net (loss) income | (2,336 | ) | $ | (448 | ) | (8,740 | ) | 190 | ||||||
| Net (loss) income per common share – basic | $ | (0.19 | ) | $ | (0.04 | ) | $ | (0.70 | ) | $ | 0.02 | |||
| Net (loss) income per common share – diluted | $ | (0.19 | ) | $ | (0.04 | ) | $ | (0.70 | ) | $ | 0.02 | |||
| Weighted average common shares outstanding - | ||||||||||||||
| basic | 12,317,546 | 12,283,746 | 12,311,810 | 12,276,689 | ||||||||||
| Weighted average common shares outstanding - | ||||||||||||||
| diluted | 12,317,546 | 12,283,746 | 12,311,810 | 12,276,689 | ||||||||||
| Dividends declared per common share | $ | — | $ | 0.09 | $ | — | $ | 0.18 | ||||||
| FreightCar America, Inc. Segment Data (Unaudited) | ||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||
| (In thousands) | (In thousands) | |||||||||||||
| Revenues: | ||||||||||||||
| Manufacturing | $ | 63,051 | $ | 116,067 | $ | 142,784 | $ | 253,807 | ||||||
| Corporate and Other | 3,692 | 2,605 | 6,932 | 4,401 | ||||||||||
| Consolidated revenues | $ | 66,743 | $ | 118,672 | $ | 149,716 | $ | 258,208 | ||||||
| Operating (loss) income: | ||||||||||||||
| Manufacturing | $ | 1,708 | $ | 2,328 | $ | (2,108 | ) | $ | 9,577 | |||||
| Corporate and Other | (5,254 | ) | (3,375 | ) | (10,030 | ) | (9,205 | ) | ||||||
| Consolidated operating (loss) income | $ | (3,546 | ) | $ | (1,047 | ) | $ | (12,138 | ) | $ | 372 | |||
| FreightCar America, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) | ||||||
| Six Months Ended June 30, | ||||||
| 2018 | 2017 | |||||
| (In thousands) | ||||||
| Cash flows from operating activities | ||||||
| Net (loss) income | $ | (8,740 | ) | $ | 190 | |
| Adjustments to reconcile net (loss) income to net cash flows (used in) provided by operating activities: | ||||||
| Net proceeds from Shoals transaction | 2,655 | — | ||||
| Depreciation and amortization | 5,448 | 4,672 | ||||
| Recognition of deferred income from state and local incentives | (1,110 | ) | (1,109 | ) | ||
| Gain on sale of railcars available for lease | 38 | — | ||||
| Deferred income taxes | (2,671 | ) | (862 | ) | ||
| Stock-based compensation recognized | 1,751 | 371 | ||||
| Other non-cash items, net | (211 | ) | 548 | |||
| Changes in operating assets and liabilities, net of acquisitions: | ||||||
| Accounts receivable | (18,084 | ) | 8,364 | |||
| Inventories | (11,593 | ) | 23,388 | |||
| Inventory on lease | (32,228 | ) | — | |||
| Other assets | (1,697 | ) | 141 | |||
| Accounts and contractual payables | 14,619 | (5,772 | ) | |||
| Accrued payroll and employee benefits | 895 | (1,255 | ) | |||
| Income taxes receivable/payable | 684 | 12,712 | ||||
| Accrued warranty | 1,176 | (351 | ) | |||
| Other liabilities | 1,402 | (243 | ) | |||
| Accrued pension costs and accrued postretirement benefits | (736 | ) | (61 | ) | ||
| Net cash flows (used in) provided by operating activities | (48,402 | ) | 40,733 | |||
| Cash flows from investing activities | ||||||
| Purchase of restricted certificates of deposit | (4,400 | ) | (4,668 | ) | ||
| Maturity of restricted certificates of deposit | 4,668 | 2,084 | ||||
| Purchase of securities held to maturity | (79,105 | ) | (33,915 | ) | ||
| Proceeds from maturity of securities | 66,008 | 3,000 | ||||
| Cost of railcars available for lease | (1,419 | ) | — | |||
| Purchases of property, plant and equipment | (476 | ) | (445 | ) | ||
| Proceeds from sale of property, plant and equipment and railcars available for lease | 600 | 119 | ||||
| State and local incentives received | — | 1,410 | ||||
| Net cash flows used in investing activities | (14,124 | ) | (32,415 | ) | ||
| Cash flows from financing activities | ||||||
| Employee stock settlement | (118 | ) | (14 | ) | ||
| Cash dividends paid to stockholders | — | (2,235 | ) | |||
| Net cash flows used in financing activities | (118 | ) | (2,249 | ) | ||
| Net (decrease) increase in cash and cash equivalents | $ | (62,644 | ) | $ | 6,069 | |
| Cash, cash equivalents and restricted cash equivalents at beginning of period | $ | 87,788 | $ | 96,110 | ||
| Cash, cash equivalents and restricted cash equivalents at end of period | $ | 25,144 | $ | 102,179 | ||
| INVESTOR & MEDIA CONTACT | Matthew S. Kohnke |
| TELEPHONE | (800) 458-2235 |
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