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FreightCar America, Inc. Reports First Quarter 2020 Results

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CHICAGO, May 11, 2020 (GLOBE NEWSWIRE) -- FreightCar America, Inc. (NASDAQ:RAIL) today reported results for the first quarter ended March 31, 2020.

Business Highlights

  • First quarter revenue of $5.2 million on deliveries of 11 units
  • First quarter net loss of $16.9 million, or $1.29 per diluted share, compared to a net loss of $1.12 per diluted share in the first quarter of 2019
  • Total cash, cash equivalents, restricted cash equivalents, marketable securities and restricted certificates of deposit of $60.5 million at March 31, 2020
  • First quarter backlog totaled 1,939 railcars, up from 1,650 railcars at year-end 2019, with an aggregate value of approximately $221 million
  • Company continues to prioritize employee and community safety, and adhere to pre-established safety protocols
  • Company is still planning to be in production at its Castaños, Mexico facility by the end of 2020
  • Due to the increased uncertainty caused by the COVID-19 pandemic, the Company is withdrawing its guidance for fiscal 2020

"First and foremost, I would like to thank all of our employees for their commitment to health and safety in these unprecedented times. Safety has always been our number one priority, and I am extremely proud of the team's ability to respond in this environment, while continuing to meet the needs of our customers," said Jim Meyer, President and Chief Executive Officer of FreightCar America. "There are a number of unknowns as we move through the challenges of this pandemic, but there are several items that give our team comfort right now. The ‘Back to Basics' transformational strategy we have adhered to over the last two-and-a-half years is proving critical in this environment. We significantly improved our cost structure and manufacturing footprint, both of which position our business to capitalize on market upcycles and, just as importantly, compete and survive during tough industry conditions."

Meyer added, "We were obviously disappointed with our delivery figures for the quarter, a result of timing and weakness in the backlog, line startups in the quarter and lost production days at the end of the quarter due to COVID-19. However, our Shoals facility is back in production, and based on what we know today, we expect deliveries to ramp up as we move through the year. Our backlog increased sequentially, and we've seen no order cancellations to date. We understand we are in a very uncertain world, and we are planning for a number of possible scenarios as we move forward. We are also on track with the build-out of our Mexico facility, and our goal remains to be in production by the end of 2020. We expect industry conditions to be very competitive over the next few years, and being able to produce cars in Mexico will be more important than ever. Finally, we will continue to balance the needs of transforming our company and navigating difficult industry conditions in order to preserve capital and protect our franchise."

First Quarter Results

  • Consolidated revenues were $5.2 million in the first quarter of 2020 compared to $70.7 million in the same quarter of 2019. The Company delivered 11 railcars in the first quarter of 2020, compared to 641 railcars delivered in the first quarter of 2019.

  • The Company had a backlog totaling 1,939 railcars on March 31, 2020, valued at approximately $221 million.

  • Consolidated operating loss for the first quarter of 2020 was $17.1 million, compared to an operating loss of $14.5 million for the first quarter of 2019. This quarter's operating loss included a $0.9 million restructuring charge related to the closure of the Roanoke facility.

  • Net loss in the first quarter of 2020 was $16.9 million, or $1.29 per diluted share, compared to net loss of $14.0 million, or $1.12 per diluted share, in the first quarter of 2019.

First Quarter 2020 Conference Call & Webcast Information

The Company will host a conference call and live webcast on Monday, May 11, 2020 at 11:00 a.m. (Eastern Daylight Time) to discuss its first quarter 2020 financial results. Investors, analysts, and members of the media interested in listening to the live presentation are encouraged to join a webcast of the call, available on the Company's website at:

https://attevent.webcasts.com/starthere.jsp?ei=1316290&tp_key=c25bd24d9c

Interested parties may also participate in the call by dialing (877) 692-8957, and using confirmation number 8606324.  Please dial in approximately 10 to 15 minutes prior to the start time of the call to ensure your participation. An audio replay of the conference call will be available beginning at 2:00 p.m. (Eastern Daylight Time) on May 11, 2020 until 12:00 a.m. (Eastern Daylight Time) on June 12, 2020.  To access the replay, please dial (866) 207-1041 or (402) 970-0847.  The replay pass code is 8676330.  An audio replay of the call will be available on the Company's website within two days following the earnings call.

About FreightCar America

FreightCar America, Inc. manufactures a wide range of railroad freight cars, supplies railcar parts and leases freight cars through its FreightCar America Leasing Company subsidiaries. FreightCar America designs and builds high-quality railcars, including bulk commodity cars, covered hopper cars, intermodal and non-intermodal flat cars, mill gondola cars, coil steel cars, boxcars and coal cars. It is headquartered in Chicago, Illinois and has facilities in the following locations: Cherokee, Alabama; Grand Island, Nebraska; Johnstown, Pennsylvania; 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 other competitive factors. 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, 2020   December 31, 2019
Assets (in thousands, except for share and per share data)
Current assets          
Cash, cash equivalents and restricted cash equivalents $ 60,484     $ 66,257  
Restricted certificates of deposit   -       3,769  
Accounts receivable, net of allowance for doubtful accounts of $161 and $91, respectively   5,718       6,991  
Inventories, net   41,121       25,092  
Income tax receivable   1,022       535  
Other current assets   8,309       7,035  
Total current assets   116,654       109,679  
Property, plant and equipment, net   39,285       38,564  
Railcars available for lease, net   38,647       38,900  
Right of use asset   55,517       56,507  
Other long-term assets   999       1,552  
Total assets $ 251,102     $ 245,202  
           
Liabilities and Stockholders' Equity          
Current liabilities          
Accounts and contractual payables $ 19,653     $ 11,713  
Accrued payroll and other employee costs   632       1,389  
Reserve for workers' compensation   3,274       3,210  
Accrued warranty   8,076       8,388  
Customer deposits   22,515       5,123  
Deferred income state and local incentives, current   2,219       2,219  
Lease liability, current   14,932       14,960  
Other current liabilities   3,275       2,428  
Total current liabilities   74,576       49,430  
Long-term debt   10,200       10,200  
Accrued pension costs   6,258       6,510  
Deferred income state and local incentives, long-term   4,167       4,722  
Lease liability, long-term   52,108       53,766  
Other long-term liabilities   3,443       3,420  
Total liabilities   150,752       128,048  
Stockholders' equity          
Preferred stock   -       -  
Common stock   133       127  
Additional paid in capital   83,374       83,027  
Treasury stock, at cost   (1,124 )     (989 )
Accumulated other comprehensive loss   (10,639 )     (10,780 )
Retained earnings   28,877       45,824  
Total FreightCar America stockholders' equity   100,621       117,209  
Noncontrolling interest in JV   (271 )     (55 )
Total stockholders' equity   100,350       117,154  
Total liabilities and stockholders' equity $ 251,102     $ 245,202  
           



FreightCar America, Inc.

Condensed Consolidated Statements of Operations
(Unaudited)

           
    Three Months Ended March 31,
      2020       2019    
  (in thousands, except for share and per share data)
Revenues   $ 5,197     $ 70,708    
Cost of sales     14,000       77,557    
Gross loss     (8,803 )     (6,849 )  
Selling, general and administrative expenses     7,410       7,667    
Restructuring and impairment charges     880       -    
Operating loss     (17,093 )     (14,516 )  
Interest expense and deferred financing costs     (296 )     (36 )  
Other income     224       319    
Loss before income taxes     (17,165 )     (14,233 )  
Income tax benefit     (2 )     (201 )  
Net loss     (17,163 )     (14,032 )  
  Less: Net loss attributable to noncontrolling interest in JV     (216 )     -    
Net loss attributable to FreightCar America   $ (16,947 )   $ (14,032 )  
                   
Net loss per common share attributable to FreightCar America- basic and diluted   $ (1.29 )   $ (1.12 )  
Weighted average common shares outstanding - basic and diluted     12,366,880       12,337,013    
           



FreightCar America, Inc.

Segment Data
(Unaudited)

  Three Months Ended
  March 31,
  2020     2019  
Revenues:          
Manufacturing $ 2,940     $ 67,595  
Corporate and Other   2,257       3,113  
Consolidated revenues $ 5,197     $ 70,708  
           
Operating (loss) income:          
Manufacturing $ (11,800 )   $ (9,637 )
Corporate and Other   (5,293 )     (4,879 )
Consolidated operating loss   (17,093 )     (14,516 )



FreightCar America, Inc.

Condensed Consolidated Statements of Cash Flows
(Unaudited)

             
      Three Months Ended March 31,
      2020       2019  
Cash flows from operating activities     (in thousands)
Net loss   $ (17,163 )   $ (14,032 )
Adjustments to reconcile net loss to net cash flows used in operating activities:            
Non-cash restructuring and impairment charges     312       -  
Depreciation and amortization     3,013       3,206  
Amortization expense - right-of-use leased assets     990       3,202  
Recognition of deferred income from state and local incentives     (555 )     (554 )
Stock-based compensation recognized     227       689  
Other non-cash items, net     1,868       (736 )
Changes in operating assets and liabilities, net of acquisitions:            
Accounts receivable     1,273       8,928  
Inventories     (17,809 )     12,591  
Other assets     (1,273 )     (2,355 )
Accounts and contractual payables     7,521       (4,516 )
Accrued payroll and employee benefits     (654 )     359  
Income taxes receivable/payable     (8 )     (200 )
Accrued warranty     (312 )     1,736  
Lease liability     (1,686 )     (5,037 )
Customer deposits     17,392       (1,719 )
Other liabilities     1,051       259  
Accrued pension costs and accrued postretirement benefits     (214 )     (114 )
                 
Net cash flows (used in) provided by operating activities     (6,027 )     1,707  
Cash flows from investing activities            
Purchase of restricted certificates of deposit     -       (1,117 )
Maturity of restricted certificates of deposit     3,769       4,400  
Purchase of securities held to maturity     -       (1,986 )
Proceeds from maturity of securities     -       18,025  
Purchase of property, plant and equipment     (3,670 )     (760 )
Proceeds from sale of property, plant and equipment and railcars available for lease     164       -  
                 
Net cash flows provided by investing activities     263       18,562  
Cash flows from financing activities            
Employee stock settlement     (9 )     (59 )
Deferred financing costs     -       (280 )
Net cash flows used in financing activities     (9 )     (339 )
Net (decrease) increase in cash and cash equivalents     (5,773 )     19,930  
                 
Cash, cash equivalents and restricted cash equivalents at beginning of period     66,257       45,070  
                 
Cash, cash equivalents and restricted cash equivalents at end of period   $ 60,484     $ 65,000  
Supplemental cash flow information            
Interest paid   $ 143     $ 15  
Income tax refunds received   $ -     $ -  
Income tax paid   $ -     $ -  
             


INVESTOR & MEDIA CONTACT Josh Littman or Chris Hodges
TELEPHONE 312-445-2870

 

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