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FreightCar America, Inc. Reports Fourth Quarter and Full Year 2012 Results



  FreightCar America, Inc. Reports Fourth Quarter and Full Year 2012 Results

Highlights

  * Revenues of $677.4 million, net income of $19.1 million, or $1.60 per
    share, for the full year 2012
  * Revenues of $116.6 million, net loss of $1.0 million, or $(0.08) per
    share, for the fourth quarter of 2012
  * Coal car demand remains under pressure from low natural gas prices, high
    coal inventories and reduced electricity demand
  * Cash and short- term investments increased to $155.2 million as of
    December 31, 2012
  * Announced sub-lease of Shoals Alabama facility to support strategic
    non-coal car manufacturing efforts

Business Wire

CHICAGO -- February 19, 2013

FreightCar America, Inc. (NASDAQ: RAIL) today reported results for the fourth
quarter ended December 31, 2012, with revenues of $116.6 million and a net
loss of $1.0 million, or $(0.08) per diluted share. For the same quarter in
2011, the Company reported revenues of $187.1 million and net income of $8.5
million, or $0.71 per diluted share. Revenues were $160.6 million and net
income was $4.8 million, or $0.40 per diluted share, in the third quarter of
last year.

“2012 was a good year for FreightCar despite the fact that fourth quarter
results were impacted by a decrease in coal car demand and product line
change-over costs at both our manufacturing plants,” said Ed Whalen, President
and Chief Executive Officer. “As we look forward, 2013 will be a challenging
year for our traditional coal car business, but the long term need to replace
the Eastern coal car fleet remains. In the near term, we will focus closely on
the factors within our control, including improving production efficiency,
improving the results of our services business and controlling costs
throughout the Company. I am encouraged by the prospects for our non-coal
railcar products and the value that our new Shoals facility will bring to our
bottom line when operational,” Whalen concluded.

FOURTH QUARTER RESULTS

In line with Company’s expectations, deliveries decreased to 1,308 railcars in
the fourth quarter of 2012, which included 528 new railcars and 780 rebuilt
railcars. This compares to 2,489 railcars delivered in the fourth quarter of
2011 and 1,618 railcars delivered in the third quarter of 2012. There were 473
units ordered in the fourth quarter of 2012. This compares to 4,481 units
ordered in the fourth quarter of 2011 and 225 units ordered in the third
quarter of 2012. Total manufacturing backlog was 2,881 units at December 31,
2012, compared to 8,303 units at December 31, 2011 and 3,716 units at
September 30, 2012.

The Manufacturing segment had revenues of $109.3 million in the fourth quarter
of 2012, compared to $179.2 million in the fourth quarter of 2011 and $152.5
million in the third quarter of 2012. Operating income for the Manufacturing
segment was $6.5 million in the fourth quarter of 2012, compared to $16.5
million in the fourth quarter of 2011 and $13.9 million in the third quarter
of 2012.

Revenues for the Services segment were $7.3 million in the fourth quarter of
2012, compared to $7.8 million in the fourth quarter of 2011 and $8.1 million
in the third quarter of 2012. Services segment operating income was $0.1
million in the fourth quarter of 2012, compared to $0.5 million in the fourth
quarter of 2011 and $0.6 million in the third quarter of 2012.

Corporate costs were $6.6 million for the quarter ended December 31, 2012,
compared to $7.6 million in the same quarter of 2011 and $6.6 million in the
third quarter of 2012.

The Company’s income tax expense of $0.8 million for the fourth quarter of
2012 included a provision to adjust deferred tax balances due to enacted
changes in certain states’ statutory tax rates and to reflect a reduction of
the blended effective state rate.

Cash, cash equivalents, marketable securities and restricted cash as of
December 31, 2012 increased to $155.2 million from $144.2 million as of
September 30, 2012. The Company’s $30.0 million revolving credit facility
remains undrawn.

Railcars under lease totaled $43.4 million at the end of the fourth quarter of
2012, compared to $51.0 million at the end of the third quarter of 2012. The
decrease in railcars under lease reflects sales of leased railcars.

FULL YEAR RESULTS

Revenues for the fiscal year ended December 31, 2012 were $677.4 million
compared to $487.0 million in 2011. Net income in 2012 was $19.1 million, or
$1.60 per share, compared to net income of $4.9 million, or $0.41 per diluted
share in 2011.

The Manufacturing segment revenues increased to $644.0 million in 2012 from
$453.1 million in 2011. The increase in revenues reflects higher railcar
deliveries and higher average revenue per car. Operating income in 2012 for
the Manufacturing segment was $58.3 million, compared to $25.9 million in
2011. Railcar deliveries totaled 8,325 (6,484 new, 441 used and 1,400 rebuilt)
for 2012, up 35% from 6,188 railcars delivered in 2011 (5,824 sold and 364
leased).

The Services segment had revenues of $33.4 million, down slightly from $33.9
million in 2011. Operating income for the Services segment was $2.1 million in
2012 compared to $3.7 million in 2011, reflecting lower repair volumes and
unfavorable work and parts sales mix.

Corporate costs of $27.2 million for 2012 were $3.1 million higher than in
2011 due to increased consulting related expenses.

The Company’s effective tax rate was 41.9% for the full year 2012. The
effective tax rate for 2011 was 6.7%, which included a $1.7 million benefit
resulting from a change in statutory tax rates and a change in estimated state
tax apportionment on deferred tax balances.

                                  * * * * *

The Company will host a conference call and live webcast on Wednesday,
February 20, 2013 at 11:00 a.m. (Eastern Standard Time) to discuss the
Company’s fourth quarter 2012 financial results and lease of the Shoals
facility, which was announced in a separate press release. To participate in
the conference call, please dial (800) 230-1093, Confirmation Number 281877.
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#: 281877

If you need technical assistance, call the toll-free AT&T Conference Casting
Support Help Line at 1-888-793-6118. 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 Standard
Time) on February 20, 2013 until 11:59 p.m. (Eastern Daylight Time) on March
20, 2013. To access the replay, please dial (800) 475-6701. The replay pass
code is 281877. 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 railroad freight cars, supplies railcar
parts, leases freight cars through its JAIX Leasing Company subsidiary, and
provides railcar maintenance, repairs and management through its FreightCar
Rail Services, LLC subsidiary. FreightCar America designs and builds coal
cars, bulk commodity cars, flat cars, mill gondola cars, intermodal cars, coil
steel cars and motor vehicle carriers. It is headquartered in Chicago,
Illinois and has facilities in the following locations: Clinton, Indiana,
Cherokee, Alabama, Danville, Illinois, Lakewood, Colorado, Grand Island,
Nebraska, Hastings, 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)
                                                                   
                                                   December 31,   December 31,
                                                   2012           2011
                                                   (In thousands)
Assets
Current assets
Cash and cash equivalents                          $  98,509      $  101,870
Restricted cash                                       14,700         1,815
Marketable securities                                 41,978         —
Accounts receivable, net                              12,987         10,125
Inventories, net                                      73,842         72,877
Other current assets                                  7,130          2,618
Deferred income taxes, net                            12,079         10,982   
Total current assets                                  261,225        200,287
                                                                   
Property, plant and equipment, net                    39,343         35,984
Railcars available for lease, net                     43,435         54,746
Goodwill                                              22,128         22,128
Deferred income taxes, net                            18,940         28,150
Other long-term assets                                3,494          4,168    
Total assets                                       $  388,565     $  345,463  
                                                                   
Liabilities and Stockholders’ Equity
Current liabilities
Account and contractual payables                   $  33,453      $  28,110
Accrued payroll and employee benefits                 6,548          5,611
Accrued postretirement benefits                       4,978          5,174
Accrued warranty                                      7,625          7,795
Customer deposits                                     36,087         17,964
Other current liabilities                             7,885          5,044    
Total current liabilities                             96,576         69,698
Accrued pension costs                                 12,193         14,202
Accrued postretirement benefits, less current         64,322         59,887
portion
Accrued taxes and other long-term liabilities         4,143          4,342    
Total liabilities                                     177,234        148,129  
                                                                   
Stockholders’ equity
Preferred stock                                       —              —
Common stock                                          127            127
Additional paid in capital                            100,402        100,204
Treasury stock, at cost                               (34,488 )      (35,904 )
Accumulated other comprehensive loss                  (26,139 )      (22,302 )
Retained earnings                                     171,429        155,209  
Total stockholders’ equity                            211,331        197,334  
Total liabilities and stockholders’ equity         $  388,565     $  345,463  
                                                                   

                                                  
FreightCar America, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
                                                    
                 Three Months Ended                Year Ended

                 December 31,                      December 31,
                 2012             2011             2012             2011
                 (In thousands, except share and per share data)
                                                                   
Revenues         $ 116,579        $ 187,060        $ 677,449        $ 486,986
Cost of sales      108,459          170,438          612,463          455,040     
Gross profit       8,120            16,622           64,986           31,946
Selling,
general and        8,171            8,487            32,736           28,660
administrative
expense
Gain on sale
of railcars        (13        )     (1,252     )     (989       )     (2,227     )
available for
lease
Operating          (38        )     9,387            33,239           5,513
income (loss)
                                                                     
Interest           (88        )     (54        )     (373       )     (220       )
expense, net
Income (loss)
before income      (126       )     9,333            32,866           5,293
taxes
Income tax
provision          833              851              13,771           354         
(benefit)
Net income         (959       )     8,482            19,095           4,939
(loss)
Less: Net
(loss) income
attributable       —                —                —                4           
to
noncontrolling
interest in JV
Net income
(loss)
attributable     $ (959       )   $ 8,482          $ 19,095         $ 4,935       
to FreightCar
America
                                                                     
Net income
(loss) per
common share
attributable     $ (0.08      )   $ 0.71           $ 1.60           $ 0.41        
to FreightCar
America –
basic
                                                                     
Net income
(loss) per
common share
attributable     $ (0.08      )   $ 0.71           $ 1.60           $ 0.41        
to FreightCar
America –
diluted
                                                                     
Weighted
average common
shares
outstanding -
basic              11,938,833       11,922,267       11,932,926       11,916,292  
                                                                     
Weighted
average common
shares
outstanding -
Diluted            11,938,833       11,931,084       11,969,367       11,962,196  
                                                                     
Dividends
declared per     $ 0.06           $ —              $ 0.24           $ —           
common share
                                                                                  

                                                    
FreightCar America, Inc.
Condensed Segment Data
(Unaudited)
                                                      
                         Three Months Ended          Year Ended

                         December 31,                December 31,
                         2012          2011          2012          2011
                         (In thousands)
Revenues:                                                         
Manufacturing            $ 109,306     $ 179,217     $ 644,012     $ 453,060
Services                   7,273         7,843         33,437        33,926   
Consolidated Total       $ 116,579     $ 187,060     $ 677,449     $ 486,986  
                                                                    
Operating Income
(Loss):
Manufacturing            $ 6,526       $ 16,513      $ 58,272      $ 25,912
Services                   73            457           2,123         3,651
Corporate                  (6,637  )     (7,583  )     (27,156 )     (24,050 )
Consolidated Total       $ (38     )   $ 9,387       $ 33,239      $ 5,513    
                                                                              

                                                    
Condensed Consolidated Statements of Cash Flows
(Unaudited)
                                                      
                                                     Twelve Months Ended

                                                     December 31,
                                                     2012          2011
                                                     (In thousands)
Cash flows from operating activities                              
Net income                                           $ 19,095        4,939
Adjustments to reconcile net income to net cash
flows provided by operating activities:
Depreciation and amortization                          8,398         8,821
Gain on sale of railcars available for lease           (989    )     (2,227  )
Other non-cash items                                   381           3
Change in deferred income taxes                        10,420        (682    )
Stock-based compensation expense recognized            1,703         2,189
Changes in operating assets and liabilities:
Accounts receivable                                    (2,862  )     (5,841  )
Inventories                                            (700    )     (7,945  )
Inventory on lease                                     —             —
Other assets                                           (4,531  )     4,203
Accounts and contractual payables                      5,144         15,395
Customer deposits and other current liabilities        20,277        14,414
Other changes in working capital                       (1,855  )     673
Accrued pension costs and accrued postretirement       (1,482  )     (3,973  )
benefits
Net cash flows provided by operating activities        52,999        29,969   
                                                                    
Cash flows from investing activities
Restricted cash deposits                               (15,525 )     (1,115  )
Restricted cash withdrawals                            2,640         1,622
Purchase of securities held to maturity                (41,978 )     —
Proceeds from sale of property, plant and              10,526        11,682
equipment and railcars available for lease
Purchase price adjustment for business acquired        —             (166    )
Purchases of property, plant and equipment             (9,085  )     (1,830  )
Net cash flows (used in) provided by investing         (53,422 )     10,193   
activities
                                                                    
Cash flows from financing activities
Employee restricted stock settlement                   (63     )     (88     )
Cash dividends paid to stockholders                    (2,875  )     —
Excess tax benefit from stock-based compensation       —             16       
Net cash flows used in financing activities            (2,938  )     (72     )
                                                                    
Net (decrease) increase in cash and cash               (3,361  )     40,090
equivalents
Cash and cash equivalents at beginning of period       101,870       61,780   
Cash and cash equivalents at end of period           $ 98,509      $ 101,870  

Contact:

FreightCar America, Inc.
Joe McNeely, 800-458-2235
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