FreightCar America, Inc. Reports First Quarter 2013 Results

  FreightCar America, Inc. Reports First Quarter 2013 Results

Highlights

  *First quarter 2013 revenues of $87.6 million on deliveries of 1,073
    railcars
  *Net loss of $2.6 million, or $(0.22) per diluted share reflects a $2.5
    million after-tax benefit from a litigation settlement and a $3.0 million
    tax related charge
  *Shoals, Alabama manufacturing facility start-up on track for third quarter
    production
  *Coal car and other freight railcar demand expected to remain weak in the
    near term

Business Wire

CHICAGO -- May 1, 2013

FreightCar America, Inc. (NASDAQ: RAIL) today reported results for the first
quarter ended March 31, 2013, with revenues of $87.6 million and a net loss of
$2.6 million, or $(0.22) per diluted share. For the same quarter in 2012, the
Company reported revenues of $219.1 million and net income of $9.7 million, or
$0.81 per diluted share. Revenues were $116.6 million with a net loss of $1.0
million, or $(0.08) per diluted share, in the fourth quarter of 2012.

“As I have previously stated, continued uncertainty in the freight railcar
market will make 2013 a challenging year,” said Ed Whalen, Chief Executive
Officer. “We remain focused on factors within our control, including:
executing our railcar diversification strategy; the successful start-up of our
Shoals, Alabama facility; improving the results of our Services business; and
continuing to prudently manage our costs. I am confident that FreightCar
America’s market position, strong balance sheet and the execution of our
strategic initiatives will enable the Company to capitalize on its long-term
opportunities and the eventual freight railcar market recovery.”

The Company delivered 1,073 railcars in the first quarter of 2013, which
included 448 new railcars and 625 rebuilt railcars. This compares to 2,613
railcars delivered in the first quarter of 2012 and 1,308 railcars delivered
in the fourth quarter of 2012. There were 274 units ordered in the first
quarter of 2013. This compares to 1,244 units ordered in the first quarter of
2012 and 473 units ordered in the fourth quarter of 2012. Total manufacturing
backlog was 2,082 units at March 31, 2013, compared to 6,934 units at March
31, 2012 and 2,881 units at December 31, 2012.

The Manufacturing segment had revenues of $77.7 million in the first quarter
of 2013, compared to $210.4 million in the same period of 2012 and $109.3
million in the fourth quarter of 2012. Operating income for the Manufacturing
segment was $2.1 million in the first quarter of 2013, compared to $22.7
million in the first quarter of 2012 and $6.5 million in the fourth quarter of
2012.

Revenues for the Services segment were $9.9 million in the first quarter of
2013, compared to $8.6 million in the first quarter of 2012 and $7.3 million
in the fourth quarter of 2012. Services segment operating income was $1.3
million in the first quarter of 2013, compared to $0.7 million in the first
quarter of 2012 and $0.1 million in the fourth quarter of 2012.

Corporate costs were $2.8 million for the quarter ended March 31, 2013,
compared to $7.4 million in the same quarter of 2012 and $6.6 million in the
fourth quarter of 2012. Corporate costs for the first quarter of 2013 included
a $3.4 million pre-tax net benefit from the settlement of litigation.

The income tax provision of $3.1 million in the first quarter of 2013 included
a $3.0 million net write-down of certain state deferred tax assets primarily
related to net operating loss carry forwards and changes in state effective
tax rates. Excluding these write-downs, the Company’s effective tax rate was
25.9%.

The Company reported cash, cash equivalents, marketable securities and
restricted cash as of March 31, 2013 of $118.0 million compared to $155.2
million as of December 31, 2012. The decrease in cash primarily reflects the
purchase of equipment for the Shoals facility, payment of accounts payable and
accrued liabilities and reduction in customer deposits. The Company’s $30.0
million revolving credit facility remains undrawn.

Railcars under lease totaled $43.1 million at the end of the first quarter of
2013, compared to $43.4 million at the end of the fourth quarter of 2012.

                                  * * * * *

The Company will host a conference call and live webcast on Thursday, May 2,
2013 at 11:00 a.m. (Eastern Daylight Time) to discuss the Company’s first
quarter 2013 financial results. To participate in the conference call, please
dial (800) 288-8967, Confirmation Number 291347. 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#: 291347

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 Daylight
Time) on May 2, 2013 until 11:59 p.m. (Eastern Daylight Time) on June 2, 2013.
To access the replay, please dial (800) 475-6701. The replay pass code is
291347. 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)
                                                           
                                                  March 31,       December 31,
                                                  2013          2012
                                                  (In thousands)
Assets
Current assets
Cash and cash equivalents                         $ 73,077        $  98,509
Restricted cash                                     2,969            14,700
Marketable securities                               41,988           41,978
Accounts receivable, net                            10,783           12,987
Inventories, net                                    75,824           73,842
Other current assets                                7,308            7,130
Deferred income taxes, net                         12,079       12,079  
Total current assets                                224,028          261,225
                                                                  
Property, plant and equipment, net                  50,790           39,343
Railcars available for lease, net                   43,132           43,435
Goodwill                                            22,128           22,128
Deferred income taxes, net                          15,930           18,940
Other long-term assets                             3,318        3,494   
Total assets                                      $ 359,326    $  388,565 
                                                                  
Liabilities and Stockholders’ Equity
Current liabilities
Account and contractual payables                  $ 18,277        $  33,453
Accrued payroll and employee benefits               3,440            6,548
Accrued postretirement benefits                     4,978            4,978
Accrued warranty                                    7,468            7,625
Customer deposits                                   27,383           36,087
Other current liabilities                          9,249        7,885   
Total current liabilities                           70,795           96,576
Accrued pension costs                               11,938           12,193
Accrued postretirement benefits, less               63,805           64,322
current portion
Accrued taxes and other long-term                  4,156        4,143   
liabilities
Total liabilities                                  150,694      177,234 
                                                                  
Stockholders’ equity
Preferred stock                                     —                —
Common stock                                        127              127
Additional paid in capital                          98,667           100,402
Treasury stock, at cost                             (32,309 )        (34,488 )
Accumulated other comprehensive loss                (25,916 )        (26,139 )
Retained earnings                                  168,063      171,429 
Total stockholders’ equity                         208,632      211,331 
Total liabilities and stockholders’               $ 359,326    $  388,565 
equity
                                                                             



FreightCar America, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)
                                        
                                             Three Months Ended

                                             March 31,
                                             2013             2012
                                             (In thousands, except
                                             share and per share data)
                                             
Revenues                                     $ 87,615         $ 219,066
Cost of sales                                 82,646         195,335    
Gross profit                                   4,969              23,731
Selling, general and administrative            4,431              8,693
expense
Gain on sale of railcars available            (14        )    (948       )
for lease
Operating income                               552                15,986
                                                                
Interest expense, net                         (84        )    (90        )
Income before income taxes                     468                15,896
Income tax provision                          3,112          6,162      
Net (loss) income                            $ (2,644     )   $ 9,734      
                                                                
Net (loss) income per common share –
basic                                        $ (0.22      )   $ 0.82       
                                                                
Net (loss) income per common share –
diluted                                      $ (0.22      )   $ 0.81       
                                                                
Weighted average common shares
outstanding –
basic                                         11,943,423     11,924,418 
                                                                
Weighted average common shares
outstanding –
diluted                                       11,943,423     11,979,727 
                                                                
Dividends declared per common share          $ 0.06          $ 0.06       
                                                                


                                  
FreightCar America, Inc.

Condensed Segment Data

(Unaudited)
                         
                                  Three Months Ended

                                  March 31,
                                  2013         2012
                                  (In thousands)
Revenues:                                     
Manufacturing                     $ 77,722       $ 210,449
Services                           9,893      8,617   
Consolidated Total                $ 87,615    $ 219,066 
                                                 
Operating Income:
Manufacturing                     $ 2,092        $ 22,690
Services                            1,289          653
Corporate                          (2,829 )    (7,357  )
Consolidated Total                $ 552       $ 15,986  
                                                 



FreightCar America, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)
                                              
                                                   Three Months Ended

                                                   March 31,
                                                   2013          2012
                                                   (In thousands)
Cash flows from operating activities                            
Net (loss) income                                  $ (2,644  )       9,734
Adjustments to reconcile net income to net
cash flows (used in) provided by operating
activities:
Depreciation and amortization                        2,223           2,097
Gain on sale of railcars available for               (14     )       (948    )
lease
Other non-cash items                                 (242    )       209
Change in deferred income taxes                      2,888           6,468
Stock-based compensation expense                     498             458
recognized
Changes in operating assets and
liabilities:
Accounts receivable                                  2,204           (2,201  )
Inventories                                          (1,745  )       (4,491  )
Other assets                                         (173    )       (4,283  )
Accounts and contractual payables                    (15,004 )       23,686
Customer deposits and other current                  (7,545  )       2,079
liabilities
Other changes in working capital                     (2,935  )       1,161
Accrued pension costs and accrued                   (549    )    (1,549  )
postretirement benefits
Net cash flows (used in) provided by                (23,038 )    32,420  
operating activities
                                                                   
Cash flows from investing activities
Restricted cash deposits                             (2,039  )       (14,475 )
Restricted cash withdrawals                          13,770          96
Purchase of securities held to maturity              (8,995  )       —
Proceeds from maturity of securities held            9,000           —
to maturity
Proceeds from sale of property, plant and            —               10,377
equipment and railcars available for lease
Purchases of property, plant and equipment          (13,354 )    (1,164  )
Net cash flows used in investing                    (1,618  )    (5,166  )
activities
                                                                   
Cash flows from financing activities
Employee restricted stock settlement                 (54     )       (17     )
Cash dividends paid to stockholders                 (722    )    (718    )
Net cash flows used in financing                    (776    )    (735    )
activities
                                                                   
Net (decrease) increase in cash and cash             (25,432 )       26,519
equivalents
Cash and cash equivalents at beginning of           98,509      101,870 
period
Cash and cash equivalents at end of period         $ 73,077     $ 128,389 
                                                                             

Contact:

FreightCar America, Inc.
Joe McNeely, 800-458-2235
 
Press spacebar to pause and continue. Press esc to stop.