EXHIBIT 99.1
FreightCar America, Inc. Reports Second Quarter 2017 Results
Highlights
- Second quarter revenue of $118.7 million on deliveries of 1,096 units
- Second quarter net loss of $0.4 million, or $0.04 per diluted share
- Orders for 1,520 railcars received during the quarter, increasing backlog to 3,226 railcars valued at a total of approximately $293 million
- Total cash, cash equivalents, marketable securities and restricted cash of $138.3 million at June 30, 2017
- Full year 2017 delivery range increased to between 4,300 and 4,500 railcars
CHICAGO, Aug. 02, 2017 (GLOBE NEWSWIRE) -- FreightCar America, Inc. (NASDAQ:RAIL) today reported results for the second quarter ended June 30, 2017, with a net loss of $0.4 million, or $0.04 per diluted share, compared to a net loss of $0.5 million, or $0.04 per diluted share, in the same period last year.
“Although the second quarter was in line with the Company’s outlook, we are not satisfied with these results. Continued manufacturing inefficiencies, unfavorable operating leverage and the current competitive environment more than offset the cost savings achieved to date. We will accelerate our cost reduction efforts with a particular focus on reducing material costs and achieving manufacturing excellence as we move forward,” said Jim Meyer, the Company’s new President and Chief Executive Officer.
Mr. Meyer concluded, “Based upon our current backlog and production schedule, we increased our full year 2017 delivery range to be between 4,300 and 4,500 railcars.”
Consolidated revenues were $118.7 million in the second quarter of 2017 compared to $126.2 million in the same quarter of 2016. The Company delivered 1,096 railcars in the second quarter of 2017, all of which were new railcars. In addition, 100 railcars previously on lease were sold to a third party in the second quarter of 2017. This compares to 1,372 railcars delivered in the second quarter of 2016, all of which were new railcars. Orders in the second quarter of 2017 totaled 1,520 new railcars. The Company had a diversified backlog totaling 3,226 railcars at June 30, 2017, valued at approximately $293 million.
Consolidated operating loss for the second quarter of 2017 was $0.9 million compared to an operating loss of $0.6 million for the second quarter of 2016. Adjusted operating loss, which excludes pre-tax restructuring and impairment charges consisting primarily of a non-cash write-down of certain manufacturing assets at our idled Danville manufacturing facility totaling $0.4 million in the second quarter of 2017, was $0.6 million for the second quarter of 2017 compared to $0.6 million for the second quarter of 2016. Adjusted operating income (loss) is a non-GAAP financial measure. A reconciliation of adjusted operating income (loss) to operating income (loss), the most directly comparable GAAP measure, is provided in the attached supplemental disclosure.
Cash, cash equivalents, marketable securities, restricted cash and restricted certificates of deposit increased $39.6 million since December 31, 2016 to $138.3 million as of June 30, 2017. The increase is attributable to the receipt of an $11.9 million income tax refund and reductions in working capital.
The Company will host a conference call and live webcast on Thursday, August 3, 2017 at 11:00 a.m. (Eastern Daylight Time) to discuss the Company’s second quarter 2017 financial results. To participate in the conference call, please dial (800) 230-1096, Confirmation Number 427475. 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#: 427475
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 August 3, 2017 until 11:59 p.m. (Eastern Daylight Time) on September 3, 2017. To access the replay, please dial (800) 475-6701. The replay pass code is 427475. 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; Roanoke, Virginia; and Shanghai, People’s Republic of China. 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) | |
| | |
| | June 30,
| | December 31, | |
| | 2017 | | 2016
| |
| | (In thousands)
|
| Assets | | |
| Current assets | | |
| Cash and cash equivalents | $ | 101,293 | | $ | 92,750 | |
| Restricted cash and restricted certificates of deposit | | 6,080 | | | 5,970 | |
| Marketable securities | | 30,932 | | | — | |
| Accounts receivable, net | | 15,433 | | | 25,207 | |
| Inventories, net | | 74,092 | | | 97,904 | |
| Income taxes receivable | | 603 | | | 13,283 | |
| Other current assets | | 5,915 | | | 6,056 | |
| Total current assets | | 234,348 | | | 241,170 | |
| | | |
| Property, plant and equipment, net | | 42,025 | | | 46,347 | |
| Railcars available for lease, net | | 23,786 | | | 24,018 | |
| Goodwill | | 21,521 | | | 21,521 | |
| Deferred income taxes, net | | 5,052 | | | 4,221 | |
| Other long-term assets | | 1,959 | | | 1,978 | |
| Total assets | $ | 328,691 | | $ | 339,255 | |
| | | |
| Liabilities and Stockholders’ Equity | | |
| Current liabilities | | |
| Accounts and contractual payables | $ | 28,678 | | $ | 34,536 | |
| Accrued payroll and other employee costs | | 1,862 | | | 3,117 | |
| Reserve for workers’ compensation | | 3,941 | | | 4,444 | |
| Accrued warranty | | 7,973 | | | 8,324 | |
| Customer deposits and deferred revenue | | 216 | | | 371 | |
| Other current liabilities | | 3,421 | | | 3,343 | |
| Total current liabilities | | 46,091 | | | 54,135 | |
| Accrued pension costs | | 6,699 | | | 6,821 | |
| Accrued postretirement benefits, less current portion | | 5,775 | | | 5,769 | |
| Deferred income state and local incentives, long-term | | 10,271 | | | 11,380 | |
| Accrued taxes and other long-term liabilities | | 4,574 | | | 4,236 | |
| Total liabilities | | 73,410 | | | 82,341 | |
| | | |
| Stockholders’ equity | | |
| Preferred stock | | — | | | — | |
| Common stock | | 127 | | | 127 | |
| Additional paid in capital | | 90,044 | | | 92,025 | |
| Treasury stock, at cost | | (12,030 | ) | | (14,583 | ) |
| Accumulated other comprehensive loss | | (8,108 | ) | | (8,163 | ) |
| Retained earnings | | 185,248 | | | 187,508 | |
| Total stockholders’ equity | | 255,281 | | | 256,914 | |
| Total liabilities and stockholders’ equity | $ | 328,691 | | $ | 339,255 | |
| | | | | | | |
| FreightCar America, Inc. |
| Condensed Consolidated Statements of Operations |
| (Unaudited) |
| |
| | Three Months Ended
June 30, | | Six Months Ended
June 30, |
| | | 2017 | | | 2016 | | | | 2017 | | | 2016 | |
| | (In thousands, except for share and per share data) |
| | | | | | |
| Revenues | $ | 118,672 | | $ | 126,157 | | | $ | 258,208 | | $ | 274,747 | |
| Cost of sales | | 113,344 | | | 118,080 | | | | 242,990 | | | 250,783 | |
| Gross profit | | 5,328 | | | 8,077 | | | | 15,218 | | | 23,964 | |
| Selling, general and administrative expenses | | 5,903 | | | 8,678 | | | | 12,914 | | | 19,276 | |
| Gain on settlement of postretirement benefit plan obligation, net of plaintiffs’ attorneys’ fees | | — | | | — | | | | — | | | (14,306 | ) |
| Restructuring and impairment charges | | 369 | | | — | | | | 2,146 | | | — | |
| Operating (loss) income | | (944 | ) | | (601 | ) | | | 158 | | | 18,994 | |
| | | | | | |
| Interest expense and deferred financing costs | | (30 | ) | | (41 | ) | | | (72 | ) | | (86 | ) |
| Other income | | 81 | | | 1 | | | | 99 | | | 82 | |
| Income before income taxes | | (893 | ) | | (641 | ) | | | 185 | | | 18,990 | |
| Income tax (benefit) provision | | (445 | ) | | (173 | ) | | | (5 | ) | | 6,791 | |
| Net income | $ | (448 | ) | $ | (468 | ) | | | 190 | | $ | 12,199 | |
| | | | | | |
| Net (loss) income per common share – basic | $ | (0.04 | ) | $ | (0.04 | ) | | $ | 0.02 | | $ | 0.99 | |
| | | | | | |
| Net (loss) income per common share – diluted | $ | (0.04 | ) | $ | (0.04 | ) | | $ | 0.02 | | $ | 0.99 | |
| | | | | | |
| Weighted average common shares outstanding - | | | | | |
| basic | | 12,283,746 | | | 12,261,308 | | | | 12,276,689 | | | 12,256,720 | |
| | | | | | |
| Weighted average common shares outstanding - | | | | | |
| diluted | | 12,283,746 | | | 12,261,308 | | | | 12,276,689 | | | 12,256,720 | |
| | | | | | |
| Dividends declared per common share | $ | 0.09 | | $ | 0.09 | | | $ | 0.18 | | $ | 0.18 | |
| | | | | | |
| FreightCar America, Inc. |
| Condensed Segment Data |
| (Unaudited) |
| |
| | Three Months Ended
June 30, | | Six Months Ended
June 30, |
| | | 2017 | | | 2016 | | | | 2017 | | | 2016 |
| | (In thousands) |
| Revenues: | | | | | |
| Manufacturing | $ | 116,067 | | $ | 124,224 | | | $ | 253,807 | | $ | 270,295 |
| Corporate and Other | | 2,605 | | | 1,933 | | | | 4,401 | | | 4,452 |
| Consolidated revenues | $ | 118,672 | | $ | 126,157 | | | $ | 258,208 | | $ | 274,747 |
| | | | | | |
| Operating income (loss): | | | | | |
| Manufacturing | $ | 2,328 | | $ | 5,430 | | | $ | 9,577 | | $ | 18,212 |
| Corporate and Other (1) | | (3,272 | ) | | (6,031 | ) | | | (9,419 | ) | | 782 |
| Consolidated operating (loss) income | $ | (944 | ) | $ | (601 | ) | | $ | 158 | | $ | 18,994 |
| | | | | | | | | | | | | |
(1) Results for the six months ended June 30, 2016 included a $14,306 gain on settlement of a postretirement benefit plan obligation, net of plaintiffs’ attorneys’ fees.
| |
| |
| FreightCar America, Inc. |
| Condensed Consolidated Statements of Cash Flows |
| (Unaudited) |
| |
| | Six Months Ended
June 30, |
| | | 2017 | | | 2016 | |
| | (In thousands) |
| Cash flows from operating activities | | |
| Net income | $ | 190 | | $ | 12,199 | |
Adjustments to reconcile net income to net cash
flows provided by (used in) operating activities: | | |
| Depreciation and amortization | | 4,672 | | | 5,117 | |
| Recognition of deferred income from state and local incentives | | (1,109 | ) | | (1,064 | ) |
| Gain on settlement of postretirement benefit plan obligation | | — | | | (15,606 | ) |
| Deferred income taxes | | (862 | ) | | 16,904 | |
| Stock-based compensation recognized | | 371 | | | 674 | |
| Other non-cash items, net | | 548 | | | 731 | |
| Changes in operating assets and liabilities: | | |
| Accounts receivable | | 8,364 | | | 23,178 | |
| Inventories | | 23,388 | | | (21,445 | ) |
| Other assets | | 141 | | | (6,659 | ) |
| Accounts and contractual payables | | (5,772 | ) | | 4,486 | |
| Accrued payroll and employee benefits | | (1,255 | ) | | (4,727 | ) |
| Income taxes receivable/payable | | 12,712 | | | (7,682 | ) |
| Accrued warranty | | (351 | ) | | (275 | ) |
| Customer deposits and other liabilities | | (243 | ) | | 10,014 | |
| Payment for settlement of postretirement benefit plan obligation | | — | | | (31,616 | ) |
| Accrued pension costs and accrued postretirement benefits | | (61 | ) | | (6,404 | ) |
| Net cash flows provided by (used in) operating activities | | 40,733 | | | (22,175 | ) |
| | | |
| Cash flows from investing activities | | |
| | | |
| Increase in restricted cash | | (360 | ) | | — | |
| Purchase of restricted certificates of deposit | | (5,194 | ) | | (1,182 | ) |
| Maturity of restricted certificates of deposit | | 5,444 | | | 2,910 | |
| Purchase of securities held to maturity | | (33,915 | ) | | — | |
| Proceeds from maturity of securities | | 3,000 | | | 12,001 | |
| Purchases of property, plant and equipment | | (445 | ) | | (8,781 | ) |
| Proceeds from sale of property, plant and equipment | | 119 | | | — | |
| State and local incentives received | | 1,410 | | | — | |
| Net cash flows (used in) provided by investing activities | | (29,941 | ) | | 4,948 | |
| | | |
| Cash flows from financing activities | | |
| | | |
| Employee stock settlement | | (14 | ) | | (71 | ) |
| Deferred financing costs | | — | | | (81 | ) |
| Cash dividends paid to stockholders | | (2,235 | ) | | (2,226 | ) |
| Net cash flows used in financing activities | | (2,249 | ) | | (2,378 | ) |
| | | |
| Net increase (decrease) in cash and cash equivalents | | 8,543 | | | (19,605 | ) |
| Cash and cash equivalents at beginning of period | | 92,750 | | | 83,068 | |
| Cash and cash equivalents at end of period | $ | 101,293 | | $ | 63,463 | |
| | | | | | | |
FreightCar America, Inc.
Reconciliation of Non-GAAP Measures
(Unaudited)
Adjusted operating income (loss) represents the Company’s operating income (loss) adjusted to exclude the effects of $1.8 million and $0.4 million of pre-tax restructuring and impairment charges related to the Company’s cost reduction plan in the first and second quarters of 2017, respectively. The Company believes that adjusted operating income (loss) 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. Adjusted operating income (loss) 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 a measure 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 (loss) in isolation or as a substitute for operating income (loss) in accordance with GAAP. Our calculation of this non-GAAP measure 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
June 30, | | Three Months Ended
March 31, |
| | | 2017 | | | 2016 | | | 2017 |
| | (In thousands) |
| | | | | |
| Operating income (loss), as reported | $ | (944 | ) | $ | (601 | ) | | $ | 1,102 |
| Add: Restructuring and impairment charges | | 369 | | | - | | | | 1,777 |
| Adjusted operating income (loss) | $ | (575 | ) | $ | (601 | ) | | $ | 2,879 |
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MEDIA CONTACTMatthew S. Kohnke
TELEPHONE(800) 458-2235
