EXHIBIT 99.1
FreightCar America, Inc. Reports Third Quarter 2016 Results
Highlights
- Revenues of $113.5 million on deliveries of 1,214 units
- Net income of $0.1 million, or $0.00 per diluted share
- Pretax restructuring charges of $1.5 million recorded in the quarter
- Orders for 620 railcars received during the quarter
- Diversified backlog totaling 5,613 railcars valued at $557 million
CHICAGO, Oct. 31, 2016 (GLOBE NEWSWIRE) -- FreightCar America, Inc. (NASDAQ:RAIL) today reported results for the third quarter ended September 30, 2016, with net income of $0.1 million, or $0.00 per diluted share, compared to net income of $14.8 million, or $1.20 per diluted share, in the same period last year. Third quarter 2015 results included a pre-tax gain of $4.6 million, or $0.24 per diluted share on an after-tax basis, related to the sale of the railcar repair and maintenance services business.
“We are focused on making continued improvements in our production processes and reducing our overhead costs. We are encouraged with the progress of the production improvements initiated in the third quarter and their contribution to the bottom line improvement from last quarter,” said Joe McNeely, President and Chief Executive Officer. “We remain on track with our cost reduction efforts, which we continue to believe will improve pre-tax operating results by $5 million when fully implemented by the middle of next year.”
Mr. McNeely concluded, “Looking forward, we now expect to deliver between 5,400 and 5,700 railcars for the full year 2016. We anticipate that deliveries in 2017 will include deliveries of a significant portion of the existing backlog along with certain new car orders, which cannot be estimated at this point given the softness in the market demonstrated by the recent ARCI statistics for new railcar orders.”
Consolidated revenues were $113.5 million in the third quarter of 2016 compared to $241.1 million in the same quarter of 2015. The Company delivered 1,214 railcars in the third quarter of 2016, all of which were new railcars. This compares to 2,846 railcars delivered in the third quarter of 2015, which included 2,076 new and 770 rebuilt railcars.
Consolidated operating loss for the third quarter of 2016 was $0.1 million, compared to operating income of $22.9 million in the third quarter of 2015. Adjusted operating income, which excludes restructuring and impairment charges totaling $1.5 million in the third quarter of 2016 and the $4.6 million gain on sale of the railcar repair and maintenance services business, was $1.5 million in the third quarter of 2016 compared to adjusted operating income of $18.3 million in the third quarter of 2015. Adjusted operating income (loss) is a non-GAAP financial measure. A reconciliation of adjusted operating income (loss) to operating income, the most directly comparable GAAP measure, is provided in the attached supplemental disclosure.
Cash, cash equivalents, marketable securities and restricted cash were $45.8 million as of September 30, 2016, compared to $116.9 million as of December 31, 2015. The decrease reflects the $32.9 million payment made in the first quarter of 2016 related to the retiree medical benefits litigation settlement, an increase in inventory to support current production requirements and the increase in finished railcar inventory. We expect inventory to decline during the fourth quarter based upon current production and customer delivery schedules.
The Company will host a conference call and live webcast on Tuesday, November 1, 2016 at 11:00 a.m. (Eastern Daylight Time) to discuss the Company’s third quarter 2016 financial results. To participate in the conference call, please dial (800) 230-1093, Confirmation Number 404728. 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://im.csgsystems.com/cgi-bin/confCast
Conference ID#: 404728
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 1:00 p.m. (Eastern Daylight Time) on November 1, 2016 until 11:59 p.m. (Eastern Standard Time) on December 1, 2016. To access the replay, please dial (800) 475-6701. The replay pass code is 404728. An audio replay of the call will be available on the Company’s website within two days following the earnings call.
FreightCar America, Inc. manufactures a wide range of railroad freight cars, supplies railcar parts and leases freight cars through its JAIX Leasing Company subsidiary. FreightCar America designs and builds high-quality railcars, including coal cars, bulk commodity cars, covered hopper cars, intermodal and non-intermodal flat cars, mill gondola cars, coil steel cars and boxcars. It is headquartered in Chicago, Illinois and has facilities in the following locations: Cherokee, Alabama; Danville, Illinois; Grand Island, Nebraska; Johnstown, Pennsylvania; and Roanoke, Virginia. More information about FreightCar America is available on its website at www.freightcaramerica.com.
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: 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 the additional risk factors described in our filings with the Securities and Exchange Commission. 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)
|
| | | | | | | | | | |
| | September 30,
| | December 31,
|
| | 2016 | | 2015
|
| | (In thousands)
|
| Assets | | |
| Current assets | | |
| Cash and cash equivalents | $ | 24,786 | | $ | 83,068 | |
| Restricted cash and restricted certificates of deposit | | 5,970 | | | 6,896 | |
| Marketable securities | | 14,997 | | | 26,951 | |
| Accounts receivable, net | | 30,292 | | | 39,708 | |
| Inventories, net | | 144,658 | | | 115,354 | |
| Other current assets | | 22,365 | | | 8,704 | |
| Total current assets | | 243,068 | | | 280,681 | |
| | | |
| Property, plant and equipment, net | | 48,065 | | | 42,596 | |
| Railcars available for lease, net | | 24,193 | | | 24,729 | |
| Goodwill | | 21,521 | | | 21,521 | |
| Deferred income taxes, net | | 17,205 | | | 34,722 | |
| Other long-term assets | | 1,713 | | | 2,655 | |
| Total assets | $ | 355,765 | | $ | 406,904 | |
| | | |
Liabilities and Stockholders’ Equity | | |
| Current liabilities | | |
| Accounts and contractual payables | $ | 32,978 | | $ | 34,304 | |
| Accrued payroll and employee benefits | | 2,693 | | | 8,303 | |
| Accrued postretirement benefits | | 405 | | | 405 | |
| Reserve for workers’ compensation | | 4,460 | | | 4,165 | |
| Accrued warranty | | 8,313 | | | 9,239 | |
| Customer deposits and deferred revenue | | 14,595 | | | 8,615 | |
| Income taxes payable | | — | | | 4,180 | |
| Other current liabilities | | 3,225 | | | 3,346 | |
| Total current liabilities | | 66,669 | | | 72,557 | |
| Accrued pension costs | | 7,560 | | | 6,673 | |
| Accrued postretirement benefits, less current portion | | 6,246 | | | 72,497 | |
| Deferred income state and local incentives, long-term | | 10,594 | | | 12,190 | |
| Accrued taxes and other long-term liabilities | | 7,775 | | | 7,876 | |
| Total liabilities | | 98,844 | | | 171,793 | |
| | | |
| Stockholders’ equity | | |
| Preferred stock | | — | | — | |
| Common stock | | 127 | | | 127 | |
| Additional paid in capital | | 91,687 | | | 93,939 | |
| Treasury stock, at cost | | (14,524 | ) | | (17,516 | ) |
| Accumulated other comprehensive loss | | (8,918 | ) | | (21,078 | ) |
| Retained earnings | | 188,549 | | | 179,639 | |
| Total stockholders’ equity | | 256,921 | | | 235,111 | |
| Total liabilities and stockholders’ equity | $ | 355,765 | | $ | 406,904 | |
| FreightCar America, Inc. |
Condensed Consolidated Statements of Operations
|
| (Unaudited) |
| |
| | | | |
| | Three Months Ended
September 30, | | Nine Months Ended
September 30, |
| | | 2016 | | | 2015 | | | | 2016 | | | 2015 | |
| | (In thousands, except for share and per share data) |
| | | | | | |
| Revenues | $ | 113,461 | | $ | 241,114 | | | $ | 388,208 | | $ | 569,555 | |
| Cost of sales | | 103,972 | | | 212,064 | | | | 354,755 | | | 514,146 | |
| Gross profit | | 9,489 | | | 29,050 | | | | 33,453 | | | 55,409 | |
| Selling, general and administrative expenses | | 8,010 | | | 10,706 | | | | 27,286 | | | 30,473 | |
| Gain on sale of railcars available for lease | — | | — | | | — | | | (1,187 | ) |
| Gain on sale of railcar repair and maintenance services business and facility | — | | | (4,578 | ) | | — | | | (4,578 | ) |
| Gain on settlement of postretirement benefit obligation, net of plaintiffs’ attorneys’ fees | — | | — | | | | (14,306 | ) | — | |
| Restructuring and impairment charges | | 1,531 | | — | | | | 1,531 | | — | |
| Operating (loss) income | | (52 | ) | | 22,922 | | | | 18,942 | | | 30,701 | |
| | | | | | |
| Interest expense and deferred financing costs | | (29 | ) | | (56 | ) | | | (115 | ) | | (184 | ) |
| Other income | | 13 | | | 8 | | | | 95 | | | 91 | |
| (Loss) income before income taxes | | (68 | ) | | 22,874 | | | | 18,922 | | | 30,608 | |
| Income tax (benefit) provision | | (119 | ) | | 8,047 | | | | 6,672 | | | 10,457 | |
| Net income | $ | 51 | | $ | 14,827 | | | $ | 12,250 | | $ | 20,151 | |
| | | | | | |
| Net income per common share – basic | $ | — | | $ | 1.20 | | | $ | 0.99 | | $ | 1.65 | |
| | | | | | |
| Net income per common share – diluted | $ | — | | $ | 1.20 | | | $ | 0.99 | | $ | 1.64 | |
| | | | | | |
| Weighted average common shares outstanding - | | | | | |
| basic | | 12,267,468 | | | 12,241,211 | | | | 12,260,329 | | | 12,153,313 | |
| | | | | | |
| Weighted average common shares outstanding - | | | | | |
| Diluted | | 12,267,468 | | | 12,241,426 | | | | 12,260,329 | | | 12,207,432 | |
| | | | | | |
| Dividends declared per common share | $ | 0.09 | | $ | 0.09 | | | $ | 0.27 | | $ | 0.27 | |
| | | | | | |
| FreightCar America, Inc. |
Condensed Segment Data
|
| (Unaudited) |
| |
| | | | |
| | Three Months Ended
September 30, | | Nine Months Ended
September 30, |
| | | 2016 | | | 2015 | | | | 2016 | | | 2015 | |
| | (In thousands) |
| Revenues: | | | | | |
| Manufacturing | $ | 111,963 | | $ | 233,294 | | | $ | 382,258 | | $ | 545,407 | |
| Corporate and other (1) | | 1,498 | | | 7,820 | | | | 5,950 | | | 24,148 | |
| Consolidated revenues | $ | 113,461 | | $ | 241,114 | | | $ | 388,208 | | $ | 569,555 | |
| | | | | | |
| Operating (Loss) Income: | | | | | |
| Manufacturing | $ | 6,967 | | $ | 25,817 | | | $ | 25,179 | | $ | 44,910 | |
| Corporate and other (1)(2)(3) | | (7,019 | ) | | (2,895 | ) | | | (6,237 | ) | | (14,209 | ) |
| Consolidated operating (loss) income | $ | (52 | ) | $ | 22,922 | | | $ | 18,942 | | $ | 30,701 | |
(1) Results for the three and nine months ended September 30, 2015 included results from the Company’s railcar repair and maintenance services business that was sold on September 30, 2015.
(2) Results for the nine months ended September 30, 2016 included a $14,306 gain on settlement of a postretirement benefit plan obligation, net of plaintiffs’ attorneys’ fees.
(3) Results for the three and nine months ended September 30, 2016 included $1,531 of restructuring and impairment charges
| FreightCar America, Inc. |
Condensed Consolidated Statements of Cash Flows
|
| (Unaudited) |
| |
| | |
| | Nine Months Ended
September 30, |
| | | 2016 | | | 2015 | |
| | (In thousands) |
| Cash flows from operating activities | | |
| Net income | $ | 12,250 | | $ | 20,151 | |
Adjustments to reconcile net income to net cash
flows used in operating activities: | | |
| Depreciation and amortization | | 7,402 | | | 7,551 | |
| Recognition of deferred income from state and local incentives | | (1,596 | ) | | (883 | ) |
| Gain on sale of railcars available for lease | | — | | | (1,187 | ) |
| Gain on sale of railcar repair and maintenance services business and facility | | — | | | (4,578 | ) |
| Gain on settlement of postretirement benefit plan obligation | | (15,606 | ) | | — | |
| Deferred income taxes | | 17,207 | | | 296 | |
| Stock-based compensation expense recognized | | 815 | | | 1,686 | |
| Other non-cash items | | 984 | | | 1,555 | |
| Changes in operating assets and liabilities: | | |
| Accounts receivable | | 9,416 | | | (27,514 | ) |
| Inventories | | (29,022 | ) | | (63,488 | ) |
| Other assets | | (8,174 | ) | | (1,191 | ) |
| Accounts and contractual payables | | (1,488 | ) | | 25,180 | |
| Accrued payroll and employee benefits | | (5,610 | ) | | 295 | |
| Income taxes receivable/payable | | (8,610 | ) | | 8,050 | |
| Accrued warranty | | (926 | ) | | 563 | |
| Customer deposits and other liabilities | | 5,913 | | | (29,471 | ) |
| Payment for settlement of postretirement benefit plan obligation | | (31,616 | ) | | — | |
| Accrued pension costs and accrued postretirement benefits | | (5,982 | ) | | 1,972 | |
| Net cash flows used in operating activities | | (54,643 | ) | | (61,013 | ) |
| | | |
| Cash flows from investing activities | | |
| Purchase of restricted certificates of deposit | | (2,089 | ) | | (2,165 | ) |
| Maturity of restricted certificates of deposit | | 3,015 | | | 1,284 | |
| Purchase of securities held to maturity | | — | | | (17,997 | ) |
| Proceeds from maturity of securities | | 12,001 | | | 36,004 | |
| Proceeds from sale of railcars available for lease | | — | | | 7,654 | |
Proceeds from sale of railcar repair and maintenance services business
and facility | | — | | | 17,589 | |
| Purchases of property, plant and equipment | | (13,070 | ) | | (16,161 | ) |
| State and local incentives received | | — | | | 15,733 | |
| Net cash flows provided by investing activities | | (143 | ) | | 41,941 | |
| | | |
| Cash flows from financing activities | | |
| Stock option exercise | | — | | | 4,885 | |
| Employee stock settlement | | (75 | ) | | (1,051 | ) |
| Deferred financing costs | | (81 | ) | | — | |
| Excess tax benefit from stock-based compensation | | — | | | 13 | |
| Cash dividends paid to stockholders | | (3,340 | ) | | (3,310 | ) |
| Net cash flows (used in) provided by financing activities | | (3,496 | ) | | 537 | |
| | | |
| Net decrease in cash and cash equivalents | | (58,282 | ) | | (18,535 | ) |
| Cash and cash equivalents at beginning of period | | 83,068 | | | 113,532 | |
| Cash and cash equivalents at end of period | $ | 24,786 | | $ | 94,997 | |
FreightCar America, Inc.
Reconciliation of Non-GAAP Measures
(Unaudited)
This press release contains non-GAAP measures, which adjust operating income (loss) to exclude the impact of the following items:
- $1.5 million of restructuring and impairment charges related to the Company’s cost reduction plan for the three months ended September 30, 2016; and
- $4.6 million gain on sale of the railcar repair and maintenance services business and facility for the three months ended September 30, 2015
The Company believes that adjusted operating income information is useful to investors because it allows investors to more effectively compare the Company’s financial results prior to and after the impact of the items described above, which are unusual in nature. Adjusted operating income is not a financial measure presented in accordance with GAAP.
In addition, the presentation of this non-GAAP measure is intended to enhance the usefulness of the financial information by providing measures that the Company’s management uses internally to evaluate the Company’s baseline performance. Accordingly, when analyzing our operating performance, investors should not consider adjusted operating income in isolation or as a substitute for operating income (loss) in accordance with GAAP. Our calculation of such non-GAAP measures is not necessarily comparable to that of other similarly titled measures reported by other companies. A reconciliation of adjusted operating income (loss) to operating income (loss), the most directly comparable GAAP measure, follows:
| | Three Months Ended
September 30, |
| | | 2016 | | | 2015 | |
| | (In thousands) |
| | | |
| Operating income (loss), as reported | $ | (52 | ) | $ | 22,922 | |
| Gain on sale of railcar repair and maintenance services business and facility | | - | | | (4,578 | ) |
| Restructuring and impairment charges | | 1,531 | | | - | |
| Adjusted operating income | $ | 1,479 | | $ | 18,344 | |
MEDIA CONTACT Matthew S. Kohnke
TELEPHONE (800) 458-2235
