FreightCar America, Inc. Reports First Quarter 2022 Results
May 10 2022 - 7:45AM
FreightCar America, Inc. (“FCA” or the “Company”) (NASDAQ: RAIL), a
diversified manufacturer of railroad freight cars, today reported
results for the first quarter ended March 31, 2022.
Business
Highlights
- First quarter 2022
revenue of $93.2 million, up 188% year-over-year, on deliveries of
783 railcars
- Gross profit of
$10.1 million with gross margin of 10.8%, positive for the sixth
consecutive quarter
- Manufacturing
operating income of $8.5 million, positive for the fourth
consecutive quarter
- First quarter 2022
net loss of ($25.8) million, or ($1.11) per share, primarily driven
by a $20.7 million non-cash charge related to the change in fair
market value of warrant liability and $4.2 million of stock
compensation
- First quarter 2022
Adjusted EBITDA of $3.3 million
- Quarter-end backlog
totaled 2,395 railcars with an aggregate value of approximately
$250 million
- 2022 delivery
outlook raised from between 2,600 and 2,900 railcars to 2,800 and
3,000 railcars, an increase of approximately 68% vs 2021 at the
mid-point of the range
Jim Meyer, President and Chief Executive Officer
of FreightCar America, commented, “We remain very pleased with our
progress and the momentum we continue to build. In spite of
persistent inflationary and supply chain challenges, we closed the
first quarter of 2022 with significantly improved results and
expect our performance to only get better as industry conditions
improve and we continue to scale the Company. Our efforts to take
FreightCar America to the next stage of growth, with equal focus on
cost discipline and manufacturing excellence, are starting to pay
off.”
First Quarter Results
- Consolidated
revenues were $93.2 million in the first quarter of 2022, compared
to $32.4 million in the first quarter of 2021. The Company
delivered 783 railcars in the first quarter of 2022, compared to
309 railcars in the first quarter of 2021.
- Net loss in the
first quarter of 2022 was ($25.8) million, or ($1.11) per share,
compared to net loss of ($39.1) million, or ($1.96) per share, in
the first quarter of 2021.
- Adjusted EBITDA
for the first quarter of 2022 was $3.3 million, compared to
Adjusted EBITDA loss of ($1.8) million for the first quarter of
2021.
Fiscal Year 2022 Outlook
Fiscal Year 2022 |
Revenue |
Between $320 million and $340 million |
Railcar Deliveries |
Between 2,800 and 3,000 railcars |
Mike Riordan, Chief Financial Officer, added, “We remain on
track to achieve our strategic priorities for 2022, which include
positive Adjusted EBITDA, the completion of the fabrication shop
and the expansion of the wheel and axle shop by mid-year. The
construction of additional production lines, which will double our
annual railcar capacity to between 4,000 and 6,000, is expected to
be completed by early 2023. Finally, we expect to deliver annual
revenue between $320 million and $340 million, an increase of
approximately 63% year-over-year at the mid-point of the
range.”
CEO Announcement
The Company also announced that Jim Meyer intends to retire from
his position as President and Chief Executive Officer in 2023,
after the appointment of his successor to ensure a smooth
transition. The Board has initiated a search process for the new
CEO, for which Meyer is actively involved. He will also remain a
member of the Board of Directors following the transition.
First Quarter 2022 Conference Call & Webcast
Information
The Company will host a conference call and live webcast on
Tuesday, May 10, 2022 at 11:00 a.m. (Eastern Time) to discuss its
first quarter 2022 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 at:
Event URL:
https://viavid.webcasts.com/starthere.jsp?ei=1544460&tp_key=1854c9de4b
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. Interested
parties may also participate in the call by dialing (877) 407-0789
or (201) 689-8562 and entering the passcode 13729354. Interested
parties are asked to dial in approximately 10 to 15 minutes prior
to the start time of the call.
An audio replay of the conference call will be
available beginning at 2:00 p.m. (Eastern Time) on May 10, 2022,
until 12:00 a.m. (Eastern Time) on Wednesday May 25, 2022. To
access the replay, please dial (844) 512-2921 or (412) 317-6671.
The replay passcode is 13729354. An archived version of the webcast
will also be available on the Company’s website.
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 and coal cars, and also specializes
in the conversion of railcars for repurposed use. FreightCar
America is headquartered in Chicago, Illinois and has facilities in
the following locations: 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 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.
INVESTOR & MEDIA CONTACT |
Lisa Fortuna or Stephen Poe |
E-MAIL |
RAIL@alpha-ir.com |
TELEPHONE |
312-445-2870 |
|
FreightCar America, Inc.Condensed
Consolidated Balance
Sheets(Unaudited) |
|
|
|
|
|
|
|
March 31,2022 |
|
December 31,2021 |
Assets |
|
(in thousands, except for share and per share data) |
Current assets |
|
|
|
|
Cash, cash equivalents and restricted cash equivalents |
|
$ |
41,011 |
|
|
$ |
26,240 |
|
Accounts receivable, net of allowance for doubtful accounts of $475
and $323, respectively |
|
|
22,088 |
|
|
|
9,571 |
|
VAT receivable |
|
|
32,941 |
|
|
|
31,136 |
|
Inventories, net |
|
|
58,476 |
|
|
|
56,012 |
|
Related party asset |
|
|
5,259 |
|
|
|
8,680 |
|
Prepaid expenses |
|
|
8,203 |
|
|
|
5,087 |
|
Total current assets |
|
|
167,978 |
|
|
|
136,726 |
|
Property, plant and equipment,
net |
|
|
18,515 |
|
|
|
18,236 |
|
Railcars available for lease,
net |
|
|
20,007 |
|
|
|
20,160 |
|
Right of use asset |
|
|
16,353 |
|
|
|
16,669 |
|
Other long-term assets |
|
|
7,897 |
|
|
|
8,873 |
|
Total assets |
|
$ |
230,750 |
|
|
$ |
200,664 |
|
|
|
|
|
|
|
|
Liabilities and Stockholders’
Equity |
|
|
|
|
Current liabilities |
|
|
|
|
Accounts and contractual payables |
|
$ |
46,482 |
|
|
$ |
41,185 |
|
Related party accounts payable |
|
|
6,815 |
|
|
|
8,870 |
|
Accrued payroll and other employee costs |
|
|
1,941 |
|
|
|
2,912 |
|
Reserve for workers' compensation |
|
|
1,594 |
|
|
|
1,563 |
|
Accrued warranty |
|
|
5,639 |
|
|
|
2,533 |
|
Customer deposits |
|
|
22,006 |
|
|
|
3,300 |
|
Deferred income state and local incentives, current |
|
|
649 |
|
|
|
1,291 |
|
Lease liability, current |
|
|
1,980 |
|
|
|
1,955 |
|
Other current liabilities |
|
|
4,798 |
|
|
|
5,711 |
|
Total current liabilities |
|
|
91,904 |
|
|
|
69,320 |
|
Long-term debt, net of current
portion |
|
|
88,572 |
|
|
|
79,484 |
|
Warrant liability |
|
|
53,244 |
|
|
|
32,514 |
|
Accrued pension costs |
|
|
- |
|
|
|
35 |
|
Deferred income state and local
incentives, long-term |
|
|
- |
|
|
|
1,216 |
|
Lease liability, long-term |
|
|
16,116 |
|
|
|
16,617 |
|
Other long-term liabilities |
|
|
6,942 |
|
|
|
3,134 |
|
Total liabilities |
|
|
256,778 |
|
|
|
202,320 |
|
|
|
|
|
|
|
|
Stockholders’ deficit |
|
|
|
|
Preferred stock |
|
- |
|
|
- |
|
Common stock |
|
|
196 |
|
|
|
190 |
|
Additional paid in capital |
|
|
85,127 |
|
|
|
83,742 |
|
Accumulated other comprehensive loss |
|
|
(5,438 |
) |
|
|
(5,522 |
) |
Accumulated deficit |
|
|
(105,913 |
) |
|
|
(80,066 |
) |
Total stockholders' deficit |
|
|
(26,028 |
) |
|
|
(1,656 |
) |
Total liabilities and
stockholders’ deficit |
|
$ |
230,750 |
|
|
$ |
200,664 |
|
|
|
|
|
|
|
|
|
|
|
FreightCar America, Inc.Condensed
Consolidated Statements of
Operations(Unaudited) |
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
93,236 |
|
|
$ |
32,370 |
|
Cost of sales |
|
|
83,178 |
|
|
|
31,054 |
|
Gross profit |
|
|
10,058 |
|
|
|
1,316 |
|
Selling, general and
administrative expenses |
|
|
10,713 |
|
|
|
9,151 |
|
Restructuring and impairment
charges |
|
|
- |
|
|
|
6,650 |
|
Operating loss |
|
|
(655 |
) |
|
|
(14,485 |
) |
Interest expense |
|
|
(5,705 |
) |
|
|
(2,502 |
) |
Loss on change in fair market
value of warrant liability |
|
|
(20,730 |
) |
|
|
(22,128 |
) |
Other income |
|
|
1,496 |
|
|
|
115 |
|
Loss before income taxes |
|
|
(25,594 |
) |
|
|
(39,000 |
) |
Income tax provision |
|
|
253 |
|
|
|
132 |
|
Net loss |
|
|
(25,847 |
) |
|
|
(39,132 |
) |
Net loss per common share -
basic |
|
$ |
(1.11 |
) |
|
$ |
(1.96 |
) |
Net loss per common share -
diluted |
|
$ |
(1.11 |
) |
|
$ |
(1.96 |
) |
Weighted average common shares
outstanding – basic |
|
|
23,218,647 |
|
|
|
20,001,505 |
|
Weighted average common shares
outstanding – diluted |
|
|
23,218,647 |
|
|
|
20,001,505 |
|
|
|
|
|
|
|
|
|
|
|
FreightCar America, Inc.Segment
Data(Unaudited) |
|
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
|
2022 |
|
2021 |
Revenues: |
|
|
|
|
|
|
Manufacturing |
|
$ |
90,124 |
|
|
$ |
30,019 |
|
Corporate and Other |
|
|
3,112 |
|
|
|
2,351 |
|
Consolidated
revenues |
|
$ |
93,236 |
|
|
$ |
32,370 |
|
|
|
|
|
|
|
|
|
Operating income
(loss): |
|
|
|
|
|
|
|
Manufacturing |
|
$ |
8,516 |
|
|
$ |
(6,018 |
) |
Corporate and Other |
|
|
(9,171 |
) |
|
|
(8,467 |
) |
Consolidated operating
loss |
|
$ |
(655 |
) |
|
$ |
(14,485 |
) |
|
|
|
|
|
|
|
|
|
|
FreightCar America, Inc.Condensed
Consolidated Statements of Cash
Flows(Unaudited) |
|
|
|
|
|
Three Months Ended March 31, |
|
|
2022 |
|
2021 |
Cash flows from
operating activities |
|
(in thousands) |
|
Net loss |
|
$ |
(25,847 |
) |
|
$ |
(39,132 |
) |
Adjustments to reconcile net
loss to net cash flows used in operating activities: |
|
|
|
|
|
|
Restructuring and impairment charges |
|
|
- |
|
|
|
6,650 |
|
Depreciation and amortization |
|
|
1,024 |
|
|
|
1,197 |
|
Non-cash lease expense on right-of-use assets |
|
|
316 |
|
|
|
440 |
|
Recognition of deferred income from state and local incentives |
|
|
(1,858 |
) |
|
|
(555 |
) |
Loss on change in fair market value for warrant liability |
|
|
20,730 |
|
|
|
22,128 |
|
Stock-based compensation recognized |
|
|
4,244 |
|
|
|
2,662 |
|
Non-cash interest expense |
|
|
3,721 |
|
|
|
982 |
|
Other non-cash items, net |
|
|
- |
|
|
|
(36 |
) |
Changes in operating assets and liabilities, net of
acquisitions: |
|
|
|
|
|
|
Accounts receivable |
|
|
(12,517 |
) |
|
|
3,204 |
|
VAT receivable |
|
|
(1,853 |
) |
|
|
(8,754 |
) |
Inventories |
|
|
(2,154 |
) |
|
|
4,824 |
|
Other assets |
|
|
(3,839 |
) |
|
|
(7,658 |
) |
Related party asset, net |
|
|
1,366 |
|
|
|
334 |
|
Accounts and contractual payables |
|
|
4,798 |
|
|
|
1,594 |
|
Accrued payroll and employee benefits |
|
|
(971 |
) |
|
|
(1,166 |
) |
Income taxes payable |
|
|
252 |
|
|
|
131 |
|
Accrued warranty |
|
|
3,106 |
|
|
|
(1,208 |
) |
Lease liability |
|
|
(476 |
) |
|
|
(577 |
) |
Customer deposits |
|
|
18,706 |
|
|
|
- |
|
Other liabilities |
|
|
(1,124 |
) |
|
|
(7,114 |
) |
Accrued pension costs and accrued postretirement benefits |
|
|
21 |
|
|
|
(222 |
) |
Net cash flows provided by (used in) operating activities |
|
|
7,645 |
|
|
|
(22,276 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities |
|
|
|
|
|
|
Purchase of property, plant
and equipment |
|
|
(960 |
) |
|
|
(542 |
) |
Proceeds from sale of
property, plant and equipment and railcars available for lease |
|
|
- |
|
|
|
373 |
|
Net cash flows used in investing activities |
|
|
(960 |
) |
|
|
(169 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities |
|
|
|
|
|
|
Borrowings on revolving line
of credit |
|
|
10,013 |
|
|
|
165 |
|
Repayments on revolving line
of credit |
|
|
(1,910 |
) |
|
|
(165 |
) |
Employee stock settlement |
|
|
(13 |
) |
|
|
(7 |
) |
Payment for stock appreciation
rights exercised |
|
|
(4 |
) |
|
|
(39 |
) |
Net cash flows provided by (used in) financing activities |
|
|
8,086 |
|
|
|
(46 |
) |
Net increase (decrease) in
cash and cash equivalents |
|
|
14,771 |
|
|
|
(22,491 |
) |
Cash, cash equivalents and
restricted cash equivalents at beginning of year |
|
|
26,240 |
|
|
|
54,047 |
|
Cash, cash equivalents and
restricted cash equivalents at end of year |
|
$ |
41,011 |
|
|
$ |
31,556 |
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow
information |
|
|
|
|
|
|
Interest paid |
|
$ |
1,984 |
|
|
$ |
1,180 |
|
Income tax refunds received,
net of payments |
|
$ |
- |
|
|
$ |
5 |
|
|
|
|
|
|
|
|
|
|
Non-cash
transactions |
|
|
|
|
|
|
Change in unpaid construction
in process |
|
$ |
190 |
|
|
$ |
114 |
|
Issuance of equity fee |
|
$ |
1,000 |
|
|
$ |
- |
|
Accrued PIK interest paid
through issuance of PIK Note |
|
$ |
364 |
|
|
$ |
256 |
|
|
|
|
|
|
|
|
|
FreightCar America, Inc.Reconciliation of
loss before taxes to
EBITDA(1) and Adjusted
EBITDA(2)(Unaudited) |
|
|
|
Three Months EndedMarch 31, |
|
2022 |
|
2021 |
|
|
|
|
|
|
Loss before income taxes |
$ |
(25,594 |
) |
|
$ |
(39,000 |
) |
Depreciation &
Amortization |
|
1,024 |
|
|
|
1,197 |
|
Interest Expense, net |
|
5,705 |
|
|
|
2,502 |
|
EBITDA |
|
(18,865 |
) |
|
|
(35,301 |
) |
|
|
|
|
|
|
Change in Fair Value of
Warrant(a) |
|
20,730 |
|
|
|
22,128 |
|
Restructuring and impairment
charges(b) |
|
- |
|
|
|
6,650 |
|
Alabama Grant
Amortization(c) |
|
(1,857 |
) |
|
|
(555 |
) |
Consulting Costs(d) |
|
350 |
|
|
|
- |
|
Corporate Realignment(e) |
|
185 |
|
|
|
- |
|
Legal Reserve(f) |
|
- |
|
|
|
500 |
|
Plant Transition Costs(g) |
|
- |
|
|
|
2,246 |
|
Stock Based Compensation |
|
4,244 |
|
|
|
2,662 |
|
Other, net |
|
(1,496 |
) |
|
|
(115 |
) |
Adjusted EBITDA |
$ |
3,291 |
|
|
$ |
(1,785 |
) |
(1) EBITDA represents earnings before interest, taxes,
depreciation and amortization. We believe EBITDA is useful to
investors in evaluating our operating performance compared to that
of other companies in our industry. In addition, our management
uses EBITDA to evaluate our operating performance. The calculation
of EBITDA eliminates the effects of financing, income taxes and the
accounting effects of capital spending. These items may vary for
different companies for reasons unrelated to the overall
performance of the company’s business. EBITDA is not a financial
measure presented in accordance with U.S. GAAP. Accordingly, when
analyzing our operating performance, investors should not consider
EBITDA in isolation or as a substitute for net income, cash flows
from operating activities or other statements of operations or
statements of cash flow data prepared in accordance with U.S. GAAP.
Our calculation of EBITDA is not necessarily comparable to that of
other similar titled measures reported by other companies.
(2) Adjusted EBITDA represents EBITDA before the following
charges:
a) This adjustment removes the
non-cash expense associated with the change in fair market value of
the Company’s warrant liability.b) The Company incurred
certain restructuring costs related to severance and other costs
related to its shut-down of the Shoals and Roanoke
facilities.c) The Company amortizes deferred grant income to
cost of goods sold that represents a non-cash reduction to its
gross profit.d) The Company incurred certain consulting costs
during the fourth quarter of 2021 and first quarter of
2022.e) The Company incurred certain costs related to
realigning its corporate cost center in the first quarter of
2022.f) During the first and fourth quarters of 2021, the
Company recognized charges related to a legal
dispute.g) During 2020, the Company implemented a
program to shift production originally planned for its U.S. plants
to its Castaños facility that continued into 2021. This adjustment
represents non-recurring costs associated with moving inventory and
equipment to its Castaños facility.
We believe that Adjusted EBITDA is useful to investors
evaluating our operating performance compared to that of other
companies in our industry because it eliminates the impact of
certain non-cash charges and other special items that affect the
comparability of results in past quarters. Adjusted EBITDA is not a
financial measure presented in accordance with U.S. GAAP.
Accordingly, when analyzing our operating performance, investors
should not consider Adjusted EBITDA in isolation or as a substitute
for net income, cash flows from operating activities or other
statements of operations or statements of cash flow data prepared
in accordance with U.S. GAAP. Our calculation of Adjusted EBITDA is
not necessarily comparable to that of other similarly titled
measures reported by other companies.
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