Provides second half fiscal 2020 outlook to deliver 750 to 1,000 railcars
Announces start of production at the Castaños, Mexico joint venture plant
CHICAGO, Aug. 10, 2020 (GLOBE NEWSWIRE) -- 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 |