‘Back to Basics’ transformational strategy has repositioned the business to compete profitably when we enter the next upturn in the cycle
Finished the year with $70 million in cash, cash equivalents, marketable securities, and restricted certificates of deposit
CHICAGO, Feb. 26, 2020 (GLOBE NEWSWIRE) -- FreightCar America, Inc. (NASDAQ: RAIL) today reported results for the fourth quarter ended December 31, 2019.
Business Highlights
“2019 was a year of significant progress for FreightCar as we continued to aggressively transform the business and reposition it to compete profitably in the future,” said Jim Meyer, President and Chief Executive Officer of FreightCar America. “While industry conditions remained challenged, we focused on maintaining our internal momentum by executing against the last few steps of our ‘Back to Basics’ strategy. This included strong performance against our goals to remove over $5,000 per car in material costs over the last two years. It also included significant work to revamp our product portfolio to better align with customer needs. Lastly, we took important steps to optimize our manufacturing footprint through further domestic consolidation and a new partnership to expand into Mexico. The latter will allow us to increase the competitiveness of our portfolio. When complete, our footprint will include the industry’s newest production facilities in both the U.S. and Mexico. As importantly, we completed this hard work while maintaining a solid and supportive balance sheet, despite the significant downcycle in our markets. All of our efforts in 2018 and 2019 have laid the framework for FreightCar to succeed in the next market cycle.”
Fourth Quarter Results
Full Year 2019 Results
Fourth Quarter 2019 Conference Call & Webcast Information
The Company will host a conference call and live webcast on Thursday, February 27, 2020 at 11:00 a.m. (Eastern Standard Time) to discuss the Company’s fourth quarter 2019 financial results. To participate in the conference call, please dial (844) 291-5491, Confirmation Number 3826331. 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://attglobal.webcasts.com/viewer/event.jsp?ei=1285861&tp_key=1fddfc2c7d
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 2:00 p.m. (Eastern Standard Time) on February 27, 2020 until 11:59 p.m. (Eastern Daylight Time) on March 27, 2020. To access the replay, please dial (866) 207-1041 or (402) 970-0847. The replay pass code is 8502743. 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; 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 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)
December 31, 2019 | December 31, 2018 | ||||||
Assets | (in thousands) | ||||||
Current assets | |||||||
Cash, cash equivalents and restricted cash equivalents | $ | 66,257 | $ | 45,070 | |||
Restricted certificates of deposit | 3,769 | 4,952 | |||||
Marketable securities | - | 18,019 | |||||
Accounts receivable, net | 6,991 | 18,218 | |||||
Inventories, net | 25,092 | 64,562 | |||||
Other current assets | 7,570 | 5,012 | |||||
Total current assets | 109,679 | 155,833 | |||||
Property, plant and equipment, net | 38,564 | 45,317 | |||||
Railcars available for lease, net | 38,900 | 64,755 | |||||
Right of use asset | 56,507 | - | |||||
Goodwill | - | 21,521 | |||||
Other long-term assets | 1,552 | 2,311 | |||||
Total assets | $ | 245,202 | $ | 289,737 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities | |||||||
Accounts and contractual payables | $ | 11,713 | $ | 34,749 | |||
Accrued payroll and other employee costs | 1,389 | 1,639 | |||||
Reserve for workers' compensation | 3,210 | 3,344 | |||||
Accrued warranty | 8,388 | 9,309 | |||||
Customer deposits | 5,123 | 3,000 | |||||
Deferred income state and local incentives, current | 2,219 | 2,219 | |||||
Deferred rent, current | - | 6,466 | |||||
Lease liability, current | 14,960 | - | |||||
Other current liabilities | 2,428 | 1,324 | |||||
Total current liabilities | 49,430 | 62,050 | |||||
Long-term debt | 10,200 | - | |||||
Accrued pension costs | 6,510 | 5,841 | |||||
Accrued postretirement benefits, less current portion | 420 | 4,975 | |||||
Deferred income state and local incentives, long-term | 4,722 | 6,941 | |||||
Deferred rent, long-term | - | 15,519 | |||||
Lease liability, long-term | 53,766 | - | |||||
Other long-term liabilities | 3,000 | 801 | |||||
Total liabilities | 128,048 | 96,127 | |||||
Stockholders’ equity | |||||||
Preferred stock | - | - | |||||
Common stock | 127 | 127 | |||||
Additional paid in capital | 83,027 | 90,593 | |||||
Treasury stock, at cost | (989 | ) | (9,721 | ) | |||
Accumulated other comprehensive loss | (10,780 | ) | (8,188 | ) | |||
Retained earnings | 45,824 | 120,799 | |||||
Total FreightCar America stockholders' equity | 117,209 | 193,610 | |||||
Noncontrolling interest in JV | (55 | ) | - | ||||
Total stockholders' equity | 117,154 | 193,610 | |||||
Total liabilities and stockholders’ equity | $ | 245,202 | $ | 289,737 | |||
FreightCar America, Inc.Condensed Consolidated Statements of Operations(Unaudited)
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
(In thousands, except for share and per share data) | ||||||||||||||||
Revenues | $ | 44,938 | $ | 87,835 | $ | 229,958 | $ | 316,519 | ||||||||
Cost of sales | 53,003 | 91,867 | 244,258 | 320,146 | ||||||||||||
Gross loss | (8,065 | ) | (4,032 | ) | (14,300 | ) | (3,627 | ) | ||||||||
Selling, general and administrative expenses | 7,511 | 7,222 | 38,302 | 29,051 | ||||||||||||
Loss on sale of railcars available for lease | 2,028 | - | 7,266 | - | ||||||||||||
Gain on sale of facility | - | - | - | (573 | ) | |||||||||||
Gain on termination of postretirement benefit plan | (6,637 | ) | - | (6,637 | ) | - | ||||||||||
Restructuring and impairment charges | (1,980 | ) | - | 22,371 | - | |||||||||||
Operating loss | (8,987 | ) | (11,254 | ) | (75,602 | ) | (32,105 | ) | ||||||||
Interest expense and deferred financing costs | (235 | ) | (70 | ) | (609 | ) | (155 | ) | ||||||||
Other income | 93 | 427 | 858 | 1,848 | ||||||||||||
Loss before income taxes | (9,129 | ) | (10,897 | ) | (75,353 | ) | (30,412 | ) | ||||||||
Income tax (benefit) provision | 461 | 14,772 | (115 | ) | 10,169 | |||||||||||
Net loss | (9,590 | ) | (25,669 | ) | (75,238 | ) | (40,581 | ) | ||||||||
Less Net loss attributable to noncontrolling interest in JV | (55 | ) | - | (55 | ) | - | ||||||||||
Net loss attributable to FreightCar America | $ | (9,535 | ) | $ | (25,669 | ) | $ | (75,183 | ) | $ | (40,581 | ) | ||||
Net loss per common share attributable to FreightCar America- basic | $ | (0.75 | ) | $ | (2.06 | ) | $ | (5.95 | ) | $ | (3.26 | ) | ||||
Net loss per common share attributable to FreightCar America- diluted | $ | (0.75 | ) | $ | (2.06 | ) | $ | (5.95 | ) | $ | (3.26 | ) | ||||
Weighted average common shares outstanding - basic | 12,359,478 | 12,325,876 | 12,352,142 | 12,318,861 | ||||||||||||
Weighted average common shares outstanding - diluted | 12,359,478 | 12,325,876 | 12,352,142 | 12,318,861 | ||||||||||||
Dividends declared per common share | $ | - | $ | - | $ | - | $ | - | ||||||||
FreightCar America, Inc.Segment Data(Unaudited)
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
(In thousands) | (In thousands) | |||||||||||||||
Revenues: | ||||||||||||||||
Manufacturing | $ | 42,784 | $ | 84,208 | $ | 219,064 | $ | 302,154 | ||||||||
Corporate and Other | 2,154 | 3,627 | 10,894 | 14,365 | ||||||||||||
Consolidated Revenues | $ | 44,938 | $ | 87,835 | $ | 229,958 | $ | 316,519 | ||||||||
Operating (Loss) Income: | ||||||||||||||||
Manufacturing | $ | (10,057 | ) | $ | (6,541 | ) | $ | (53,501 | ) | $ | (14,556 | ) | ||||
Corporate and Other | 1,070 | (4,713 | ) | (22,101 | ) | (17,549 | ) | |||||||||
Consolidated Operating (Loss) Income | $ | (8,987 | ) | $ | (11,254 | ) | $ | (75,602 | ) | $ | (32,105 | ) | ||||
FreightCar America, Inc.Condensed Consolidated Statements of Cash Flows(Unaudited)
Twelve Months Ended December 31, | |||||||
2019 | 2018 | ||||||
(in thousands) | |||||||
Cash flows from operating activities | |||||||
Net loss | $ | (75,238 | ) | $ | (40,581 | ) | |
Adjustments to reconcile net loss to net cash flows used in operating activities: | |||||||
Restructuring and impairment charges | 22,367 | - | |||||
Net proceeds from Shoals transaction | - | 2,655 | |||||
Depreciation and amortization | 12,438 | 12,017 | |||||
Amortization expense - right-of-use leased assets | 10,485 | - | |||||
Recognition of deferred income from state and local incentives | (2,219 | ) | (2,220 | ) | |||
Loss on sale of railcars available for lease | 7,197 | - | |||||
Gain on termination of postretirement benefit plan | (6,637 | ) | - | ||||
Deferred income taxes | 176 | 9,969 | |||||
Stock-based compensation recognized | 1,225 | 3,198 | |||||
Other non-cash items, net | (975 | ) | (304 | ) | |||
Changes in operating assets and liabilities, net of acquisitions: | |||||||
Accounts receivable | 11,227 | (10,637 | ) | ||||
Inventories | 40,649 | (16,311 | ) | ||||
Other assets | (2,127 | ) | 1,728 | ||||
Accounts and contractual payables | (23,957 | ) | 10,693 | ||||
Accrued payroll and employee benefits | (1,368 | ) | (165 | ) | |||
Income taxes receivable/payable | 155 | 657 | |||||
Accrued warranty | (921 | ) | 1,247 | ||||
Lease liability | (17,602 | ) | - | ||||
Other liabilities | 6,201 | (2,461 | ) | ||||
Accrued pension costs and accrued postretirement benefits | (55 | ) | (1,129 | ) | |||
Net cash flows used in operating activities | (18,979 | ) | (31,644 | ) | |||
Cash flows from investing activities | |||||||
Purchase of restricted certificates of deposit | (4,981 | ) | (8,312 | ) | |||
Maturity of restricted certificates of deposit | 6,164 | 9,080 | |||||
Purchase of securities held to maturity | (1,986 | ) | (111,356 | ) | |||
Proceeds from maturity of securities | 20,025 | 136,716 | |||||
Cost of railcars available for lease | - | (37,347 | ) | ||||
Purchase of property, plant and equipment | (5,573 | ) | (2,185 | ) | |||
Proceeds from sale of property, plant and equipment and railcars available for lease | 17,305 | 2,458 | |||||
Net cash flows provided by (used in) investing activities | 30,954 | (10,946 | ) | ||||
Cash flows from financing activities | |||||||
Proceeds from line of credit borrowings | 10,200 | - | |||||
Employee stock settlement | (59 | ) | (118 | ) | |||
Deferred financing costs | (929 | ) | (10 | ) | |||
Net cash flows provided by (used in) financing activities | 9,212 | (128 | ) | ||||
Net increase (decrease) in cash and cash equivalents | 21,187 | (42,718 | ) | ||||
Cash, cash equivalents and restricted cash equivalents at beginning of year | 45,070 | 87,788 | |||||
Cash, cash equivalents and restricted cash equivalents at end of year | $ | 66,257 | $ | 45,070 |
INVESTOR & MEDIA CONTACT | Josh Littman or Chris Hodges |
TELEPHONE | 312-445-2870 |