FreightCar America, Inc. Reports Second Quarter 2020 Results
August 10 2020 - 7:00PM
FreightCar America, Inc. (NASDAQ: RAIL) today reported results for
the second quarter ended June 30, 2020.
Business Highlights
- Second quarter revenue of $17.5 million on deliveries of 100
railcars
- Second quarter net loss of $12.8 million, or $0.97 per
share
- Total cash, cash equivalents, restricted cash equivalents,
marketable securities and restricted certificates of deposit of
$52.4 million as of June 30, 2020
- Second quarter backlog totaled 1,839 railcars, with an
aggregate value of approximately $207 million
- Started production at Castaños, Mexico joint venture facility
in July
- Second half 2020 delivery outlook forecasted to range between
750 and 1,000 railcars
- Company continues to prioritize employee and community safety,
and is strictly adhering to pre-established health and safety
protocols including those necessary in response to the global
pandemic
“During the second quarter, FreightCar America
restarted two of the four production lines in Shoals, and managed
through the disruption brought on by the global COVID-19 pandemic.
I am very proud of how our team responded, as we focused equally on
health, safety and meeting customer expectations,” said Jim Meyer,
President and Chief Executive Officer of FreightCar America. “In
addition to these important undertakings, we continued to move
forward with our vision to become the highest quality and lowest
cost producer. In July, we started production at the new joint
venture plant in Castaños, Mexico along with preparation for the
certification process. We were able to hire an extremely
experienced workforce and are happy to welcome them to the
team.”
Meyer added, “The pandemic-related disruption
further contributed to a difficult demand environment across our
industry, which was already in the midst of a cyclical downtown.
This further challenged both railcar orders and production
scheduling during the second quarter. Of note, we had one
additional week of operational downtime in our Shoals facility in
the quarter as we halted production to protect the health and
safety of our workforce. And while the recovery pattern remains
opaque, we are encouraged by the recent improvement in order
inquiries for car types that we are well suited to build.”
Meyer concluded, “Our overall production ramped
well through July, giving us confidence in our forecast for second
half deliveries to range between 750 and 1,000 railcars. As we look
forward, we remain equally focused on preserving our liquidity
while also continuing to build the foundation for our future. We
believe we are taking the right steps to navigate both the cyclical
downturn and pandemic, while repositioning FreightCar America for
future success.”
Second Quarter Results
- Consolidated revenues were $17.5 million in the second quarter
of 2020, compared to $5.2 million in the first quarter of 2020 and
$73.6 million in the second quarter of 2019. The Company delivered
100 railcars in the second quarter of 2020, compared to 11 in the
first quarter of 2020 and 729 railcars in the second quarter of
2019.
- The Company had a backlog totaling 1,839 railcars on June 30,
2020, valued at approximately $207 million.
- Consolidated operating loss for the second quarter of 2020 was
$12.9 million, compared to an operating loss of $15.8 million for
the second quarter of 2019.
- Net loss attributable to FreightCar America, Inc. (“FCA”) in
the second quarter of 2020 was $12.8 million, or $0.97 per diluted
share, compared to a net loss attributable to FCA of $15.9 million,
or $1.26 per diluted share, in the second quarter of
2019.
Second Quarter 2020 Conference Call & Webcast
Information
The Company will host a conference call and live webcast on
Tuesday, August 11, 2020 at 11:00 a.m. (Eastern Daylight Time) to
discuss its second 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:
Event URL:
http://public.viavid.com/index.php?id=141184
Interested parties may also participate in the call by dialing
877-407-0789 or 201-689-8562 and should use confirmation number
13708161. 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 August 11, 2020 until 11:59
p.m. (Eastern Daylight Time) on August 25, 2020. To access
the replay, please dial 844-512-2921 or 412-317-6671. The
replay pass code is 13708161. 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. is a diversified manufacturer of
railroad freight cars, that also supplies railcar parts and leases
freight cars through its FreightCar America Leasing Company
subsidiaries. FreightCar America designs and builds high-quality
railcars, including open top hopper cars, covered hopper cars,
intermodal and non-intermodal flat cars, mill gondola cars, coil
steel cars, boxcars, coal cars, and also specializes in the
conversion of railcars for repurposed use. It is headquartered in
Chicago, Illinois and has facilities in the following locations:
Cherokee, Alabama; Castaños, Mexico; 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
potential financial and operational impacts of the COVID-19
pandemic; 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)
| |
|
|
|
|
|
| |
June 30, 2020 |
|
December 31, 2019 |
| |
|
|
|
| Assets |
(in thousands, except for share and per share data) |
| Current assets |
|
|
|
|
|
|
Cash, cash equivalents and restricted cash equivalents |
$ |
48,540 |
|
|
$ |
66,257 |
|
|
Restricted certificates of deposit |
|
3,855 |
|
|
|
3,769 |
|
|
Accounts receivable, net |
|
6,789 |
|
|
|
6,991 |
|
|
Inventories, net |
|
47,116 |
|
|
|
25,092 |
|
|
Income tax receivable |
|
1,027 |
|
|
|
535 |
|
|
Other current assets |
|
14,265 |
|
|
|
7,035 |
|
| Total current assets |
|
121,592 |
|
|
|
109,679 |
|
| |
|
|
|
|
|
| Property, plant and equipment,
net |
|
39,469 |
|
|
|
38,564 |
|
| Railcars available for lease,
net |
|
38,393 |
|
|
|
38,900 |
|
| Right of use asset |
|
53,442 |
|
|
|
56,507 |
|
| Other long-term assets |
|
888 |
|
|
|
1,552 |
|
| Total assets |
$ |
253,784 |
|
|
$ |
245,202 |
|
| |
|
|
|
|
|
| Liabilities and
Stockholders’ Equity |
|
|
|
|
|
| Current liabilities |
|
|
|
|
|
|
Accounts and contractual payables |
$ |
18,054 |
|
|
$ |
11,713 |
|
|
Accrued payroll and other employee costs |
|
306 |
|
|
|
1,389 |
|
|
Reserve for workers' compensation |
|
3,344 |
|
|
|
3,210 |
|
|
Accrued warranty |
|
7,903 |
|
|
|
8,388 |
|
|
Customer deposits |
|
33,012 |
|
|
|
5,123 |
|
|
Deferred income state and local incentives, current |
|
2,219 |
|
|
|
2,219 |
|
|
Lease liability, current |
|
15,063 |
|
|
|
14,960 |
|
|
Current portion of long-term debt |
|
13,950 |
|
|
|
- |
|
|
Other current liabilities |
|
5,626 |
|
|
|
2,428 |
|
| Total current liabilities |
|
99,477 |
|
|
|
49,430 |
|
| Long-term debt, net of current
portion |
|
6,250 |
|
|
|
10,200 |
|
| Accrued pension costs |
|
6,006 |
|
|
|
6,510 |
|
| Deferred income state and
local incentives, long-term |
|
3,612 |
|
|
|
4,722 |
|
| Lease liability,
long-term |
|
48,306 |
|
|
|
53,766 |
|
| Other long-term
liabilities |
|
2,833 |
|
|
|
3,420 |
|
| Total liabilities |
|
166,484 |
|
|
|
128,048 |
|
| |
|
|
|
|
|
| Stockholders’ equity |
|
|
|
|
|
|
Preferred stock |
|
- |
|
|
|
- |
|
|
Common stock |
|
136 |
|
|
|
127 |
|
|
Additional paid in capital |
|
83,318 |
|
|
|
83,027 |
|
|
Treasury stock, at cost |
|
(1,281 |
) |
|
|
(989 |
) |
|
Accumulated other comprehensive loss |
|
(10,499 |
) |
|
|
(10,780 |
) |
|
Retained earnings |
|
16,086 |
|
|
|
45,824 |
|
| Total FreightCar America
stockholders' equity |
|
87,760 |
|
|
|
117,209 |
|
| Noncontrolling interest in
JV |
|
(460 |
) |
|
|
(55 |
) |
| Total stockholders'
equity |
|
87,300 |
|
|
|
117,154 |
|
| Total liabilities and
stockholders’ equity |
$ |
253,784 |
|
|
$ |
245,202 |
|
| |
|
|
|
|
|
FreightCar America, Inc.
Condensed Consolidated Statements of
Operations(Unaudited)
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
|
Six Months Ended |
| |
June 30, |
|
June 30, |
| |
2020 |
|
2019 |
|
2020 |
|
2019 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except for share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
17,458 |
|
|
$ |
73,661 |
|
|
$ |
22,655 |
|
|
$ |
144,369 |
|
| Cost of sales |
|
23,602 |
|
|
|
67,637 |
|
|
|
37,602 |
|
|
|
145,194 |
|
| Gross (loss) profit |
|
(6,144 |
) |
|
|
6,024 |
|
|
|
(14,947 |
) |
|
|
(825 |
) |
| Selling, general and
administrative expenses |
|
6,537 |
|
|
|
15,352 |
|
|
|
13,947 |
|
|
|
23,019 |
|
| Loss on sale of railcars
available for lease |
|
- |
|
|
|
5,196 |
|
|
|
- |
|
|
|
5,196 |
|
| Restructuring and impairment
charges |
|
267 |
|
|
|
1,319 |
|
|
|
1,147 |
|
|
|
1,319 |
|
| Operating loss |
|
(12,948 |
) |
|
|
(15,843 |
) |
|
|
(30,041 |
) |
|
|
(30,359 |
) |
| Interest expense and deferred
financing costs |
|
(167 |
) |
|
|
(115 |
) |
|
|
(463 |
) |
|
|
(151 |
) |
| Other income |
|
134 |
|
|
|
83 |
|
|
|
358 |
|
|
|
402 |
|
| Loss before income taxes |
|
(12,981 |
) |
|
|
(15,875 |
) |
|
|
(30,146 |
) |
|
|
(30,108 |
) |
| Income tax (benefit)
provision |
|
(1 |
) |
|
|
12 |
|
|
|
(3 |
) |
|
|
(189 |
) |
| Net loss |
|
(12,980 |
) |
|
|
(15,887 |
) |
|
|
(30,143 |
) |
|
|
(29,919 |
) |
|
Less: Net loss attributable to noncontrolling interest in JV |
|
(189 |
) |
|
|
- |
|
|
|
(405 |
) |
|
|
- |
|
| Net loss attributable to
FreightCar America |
$ |
(12,791 |
) |
|
$ |
(15,887 |
) |
|
$ |
(29,738 |
) |
|
$ |
(29,919 |
) |
| Net loss per common share
attributable to FreightCar America- basic and diluted |
$ |
(0.97 |
) |
|
$ |
(1.26 |
) |
|
$ |
(2.26 |
) |
|
$ |
(2.37 |
) |
| Weighted average common shares
outstanding – basic and diluted |
|
12,405,011 |
|
|
|
12,352,271 |
|
|
|
12,385,946 |
|
|
|
12,344,684 |
|
FreightCar America,
Inc.Segment
Data(Unaudited)
| |
| |
Three Months Ended |
|
Six Months Ended |
| |
June 30, |
|
June 30, |
| |
2020 |
|
2019 |
|
2020 |
|
2019 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Manufacturing |
$ |
15,129 |
|
|
$ |
70,817 |
|
|
$ |
18,069 |
|
|
$ |
138,412 |
|
| Corporate and
Other |
|
2,329 |
|
|
|
2,844 |
|
|
|
4,586 |
|
|
|
5,957 |
|
|
Consolidated revenues |
$ |
17,458 |
|
|
$ |
73,661 |
|
|
$ |
22,655 |
|
|
$ |
144,369 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating
loss: |
|
|
|
|
|
|
|
|
|
|
|
| Manufacturing |
$ |
(8,348 |
) |
|
$ |
(3,019 |
) |
|
$ |
(20,148 |
) |
|
$ |
(12,656 |
) |
| Corporate and
Other |
|
(4,600 |
) |
|
|
(12,824 |
) |
|
|
(9,893 |
) |
|
|
(17,703 |
) |
|
Consolidated operating loss |
|
(12,948 |
) |
|
|
(15,843 |
) |
|
|
(30,041 |
) |
|
|
(30,359 |
) |
FreightCar America,
Inc. Condensed Consolidated Statements of
Cash Flows (Unaudited)
| |
|
|
|
|
|
| |
|
Six Months Ended June 30, |
| |
2020 |
|
2019 |
| Cash flows from
operating activities |
|
(in thousands) |
| |
|
|
|
Net loss |
$ |
(30,143 |
) |
|
$ |
(29,919 |
) |
| Adjustments to reconcile net
loss to net cash flows used in operating activities: |
|
|
|
|
|
| Non-cash restructuring and
impairment charges |
|
352 |
|
|
|
1,319 |
|
|
Depreciation and amortization |
|
5,884 |
|
|
|
6,471 |
|
|
Change in inventory reserve |
|
5,052 |
|
|
|
(440 |
) |
|
Amortization expense - right-of-use leased assets |
|
3,065 |
|
|
|
5,662 |
|
|
Recognition of deferred income from state and local incentives |
|
(1,110 |
) |
|
|
(1,109 |
) |
|
Loss on sale of railcars available for lease |
|
- |
|
|
|
5,196 |
|
|
Stock-based compensation recognized |
|
17 |
|
|
|
274 |
|
|
Other non-cash items, net |
|
153 |
|
|
|
90 |
|
|
Changes in operating assets and liabilities, net of
acquisitions: |
|
|
|
|
|
|
Accounts receivable |
|
202 |
|
|
|
5,338 |
|
|
Inventories |
|
(27,076 |
) |
|
|
3,214 |
|
|
Other assets |
|
(7,188 |
) |
|
|
(2,307 |
) |
|
Accounts and contractual payables |
|
6,456 |
|
|
|
(4,890 |
) |
|
Accrued payroll and employee benefits |
|
(941 |
) |
|
|
910 |
|
|
Income taxes receivable/payable |
|
(13 |
) |
|
|
(197 |
) |
|
Accrued warranty |
|
(485 |
) |
|
|
(1,516 |
) |
|
Lease liability |
|
(5,391 |
) |
|
|
(9,091 |
) |
|
Customer deposits |
|
27,889 |
|
|
|
(1,719 |
) |
|
Other liabilities |
|
2,625 |
|
|
|
7,827 |
|
|
Accrued pension costs and accrued postretirement benefits |
|
(131 |
) |
|
|
(266 |
) |
|
Net cash flows used in operating activities |
|
(20,783 |
) |
|
|
(15,153 |
) |
| |
|
|
|
|
|
| Cash flows from
investing activities |
|
|
|
|
|
| |
|
|
|
|
|
| Purchase of restricted
certificates of deposit |
|
(3,855 |
) |
|
|
(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 |
|
- |
|
|
|
20,025 |
|
| Purchase of property, plant
and equipment |
|
(7,009 |
) |
|
|
(2,034 |
) |
| Proceeds from sale of
property, plant and equipment and railcars available for lease |
|
170 |
|
|
|
11,442 |
|
|
Net cash flows (used in) provided by investing activities |
|
(6,925 |
) |
|
|
30,730 |
|
|
|
|
|
|
|
|
| Cash flows from
financing activities |
|
|
|
|
|
| |
|
|
|
|
|
| Proceeds from issuance of
long-term debt |
|
10,000 |
|
|
|
10,200 |
|
| Employee stock settlement |
|
(9 |
) |
|
|
(59 |
) |
| Deferred financing costs |
|
- |
|
|
|
(929 |
) |
|
Net cash flows provided by financing activities |
|
9,991 |
|
|
|
9,212 |
|
|
|
|
|
|
|
|
| Net (decrease) increase in
cash and cash equivalents |
|
(17,717 |
) |
|
|
24,789 |
|
| 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 |
$ |
48,540 |
|
|
$ |
69,859 |
|
|
INVESTOR & MEDIA CONTACT |
Joe Caminiti or Elizabeth Steckel |
| TELEPHONE |
312-445-2870 |
FreightCar America (NASDAQ:RAIL)
Historical Stock Chart
From Mar 2024 to Apr 2024
FreightCar America (NASDAQ:RAIL)
Historical Stock Chart
From Apr 2023 to Apr 2024
