FreightCar America, Inc. Reports Third Quarter 2013 Results

  FreightCar America, Inc. Reports Third Quarter 2013 Results

Highlights

  *Third quarter revenues of $75.9 million, 937 railcars delivered
  *Net loss of $0.9 million, or $(0.08) per diluted share
  *Orders for 6,001 coal and non-coal railcars received during the third
    quarter
  *Backlog increases to 7,129 railcars
  *Cash and investment position remains strong at $102 million

Business Wire

CHICAGO -- October 30, 2013

FreightCar America, Inc. (NASDAQ:RAIL) today reported results for the third
quarter ended September 30, 2013, with revenues of $75.9 million and a net
loss of $0.9 million, or $(0.08) per diluted share. For the same quarter in
2012, the Company reported revenues of $160.6 million and net income of $4.8
million, or $0.40 per diluted share. Revenues were $47.1 million with a net
loss of $3.4 million, or $(0.29) per diluted share, in the second quarter of
2013.

“While the outlook for the broader coal car market remains mixed, we are
encouraged by the resilience in the Eastern coal car market, as evidenced by
the large rebuild orders we received during the quarter,” said Joe McNeely,
Chief Executive Officer. “With the successful startup of the Shoals facility
plus the recently announced organizational changes, we are well positioned to
effectively execute on our strategic priorities while preserving our financial
strength. We are focused on diversifying our railcar product offerings,
maintaining our market leadership in coal cars and maximizing the value of our
services business.”

The Company delivered 937 railcars in the third quarter of 2013, which
included 194 new railcars and 743 rebuilt railcars. This compares to 1,618
railcars delivered in the third quarter of 2012 and 710 railcars delivered in
the second quarter of 2013. There were 6,001 units ordered in the third
quarter of 2013, which included an order for approximately 4,000 rebuilt coal
cars. This compares to 225 units ordered in the third quarter of 2012 and 693
units ordered in the second quarter of 2013. Total manufacturing backlog was
7,129 units at September 30, 2013, compared to 3,716 units at September 30,
2012 and 2,065 units at June 30, 2013.

The Manufacturing segment had revenues of $66.9 million in the third quarter
of 2013, compared to $152.5 million for the same period of 2012 and $37.1
million in the second quarter of 2013. Manufacturing segment operating income
was $4.3 million in the third quarter of 2013, compared to $13.9 million in
the third quarter of 2012 and a loss of $1.0 million in the second quarter of
2013. Manufacturing segment operating income for the current quarter reflects
$3.3 million of Shoals start-up and Danville carrying costs.

Revenues for the Services segment were $9.0 million in the third quarter of
2013, compared to $8.1 million in the third quarter of 2012 and $10.1 million
in the second quarter of 2013. Services segment operating income was $0.7
million in the third quarter of 2013, compared to $0.6 million in the third
quarter of 2012 and $1.6 million in the second quarter of 2013.

Corporate costs were $6.0 million during the quarter ended September 30, 2013,
compared to $6.6 million in the same quarter of 2012 and $6.2 million in the
second quarter of 2013. Corporate costs for the third quarter of 2013 included
$0.4 million related to the startup of the Shoals facility.

The effective tax rate for the third quarter of 2013 was 20.8%, reflecting a
reduction of the full year effective tax rate, excluding discrete items, to
40.1%. The effective tax rate was 38.8% for the third quarter of 2012.

The Company reported cash, cash equivalents, marketable securities and
restricted cash of $102.4 million as of September 30, 2013, compared to $155.2
million as of December 31, 2012. The decrease reflects the investment in the
Shoals facility, changes in working capital and an increase in the lease
fleet. During the quarter, the Company entered into a new three year $50
million senior secured revolving credit facility replacing the existing $30
million credit facility. The $30 million credit facility was undrawn and the
new $50 million revolving credit facility remains undrawn.

Railcars available for lease and inventory on lease totaled $53.3 million at
the end of the third quarter of 2013, compared to $59.8 million at the end of
the second quarter of 2013. This decrease primarily reflects the sale of
leased railcars during the third quarter of 2013.

                                  * * * * *

The Company will host a conference call and live webcast on Thursday, October
31, 2013 at 11:00 a.m. (Eastern Daylight Time) to discuss the Company’s third
quarter 2013 financial results. To participate in the conference call, please
dial (800) 553-5260, Confirmation Number 306164. 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#: 306164

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 October 31, 2013 until 11:59 a.m. (Eastern Standard Time) on November
30, 2013. To access the replay, please dial (800) 475-6701. The replay pass
code is 306164. 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)
                                                               
                                                  September 30,   December 31,
                                                  2013           2012
                                                  (In thousands)
Assets
Current assets
Cash and cash equivalents                         $  58,997       $  98,509
Restricted cash and certificates of deposit          4,430           14,700
Marketable securities                                38,993          41,978
Accounts receivable, net                             20,610          12,987
Inventories, net                                     66,884          73,842
Inventory on lease                                   16,955          —
Other current assets                                 6,533           7,130
Deferred income taxes, net                          12,079       12,079  
Total current assets                                 225,481         261,225
                                                                  
Property, plant and equipment, net                   49,740          39,343
Railcars available for lease, net                    36,370          43,435
Goodwill                                             22,128          22,128
Deferred income taxes, net                           18,240          18,940
Other long-term assets                              3,253        3,494   
Total assets                                      $  355,212    $  388,565 
                                                                  
Liabilities and Stockholders’ Equity                             
Current liabilities
Account and contractual payables                  $  20,888       $  33,453
Accrued payroll and employee benefits                3,691           6,548
Accrued postretirement benefits                      791             4,978
Accrued warranty                                     6,968           7,625
Customer deposits                                    7,162           36,087
Customer advance                                     19,180          —
Other current liabilities                           9,016        7,885   
Total current liabilities                            67,696          96,576
Accrued pension costs                                11,305          12,193
Accrued postretirement benefits, less current        67,557          64,322
portion
Accrued taxes and other long-term liabilities       4,190        4,143   
Total liabilities                                   150,748      177,234 
                                                                  
Stockholders’ equity
Preferred stock                                      —               —
Common stock                                         127             127
Additional paid in capital                           98,842          100,402
Treasury stock, at cost                              (31,290  )      (34,488 )
Accumulated other comprehensive loss                 (25,470  )      (26,139 )
Retained earnings                                   162,255      171,429 
Total stockholders’ equity                          204,464      211,331 
Total liabilities and stockholders’ equity        $  355,212    $  388,565 
                                                                  

FreightCar America, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
                                                
                 Three Months Ended                Nine Months Ended
                 September 30,                     September 30,
                 2013            2012            2013            2012
                 (In thousands, except share and per share data)
                                                                 
Revenues         $ 75,946         $ 160,598        $ 210,670        $ 560,870
Cost of sales     69,764        144,506        197,242       504,004    
Gross profit       6,182            16,092           13,428           56,866
Selling,
general and        7,691            8,230            19,971           24,565
administrative
expense
Gain on sale
of railcars       (563       )   (14        )    (590       )   (976       )
available for
lease
Operating          (946       )     7,876            (5,953     )     33,277
(loss) income
                                                                    
Interest           (238       )     (99        )     (481       )     (290       )
expense
Other income      15            —              59            5          
(Loss) income
before income      (1,169     )     7,777            (6,375     )     32,992
taxes
Income tax
(benefit)         (243       )   3,020          633           12,938     
provision
Net (loss)       $ (926       )  $ 4,757         $ (7,008     )  $ 20,054     
income
                                                                    
Net (loss)
income per       $ (0.08      )  $ 0.40          $ (0.59      )  $ 1.68       
common share –
basic
                                                                    
Net (loss)
income per       $ (0.08      )  $ 0.40          $ (0.59      )  $ 1.67       
common share –
diluted
                                                                    
Weighted
average common
shares
outstanding -
basic             11,957,548    11,936,780     11,950,593    11,930,943 
                                                                    
Weighted
average common
shares
outstanding -
diluted           11,957,548    11,943,558     11,950,593    11,976,272 
                                                                    
Dividends
declared per     $ 0.06         $ 0.06          $ 0.18         $ 0.18       
common share
                                                                                 

FreightCar America, Inc.
Condensed Segment Data
(Unaudited)
                                                  
                          Three Months Ended         Nine Months Ended
                          September 30,              September 30,
                          2013        2012         2013         2012
                          (In thousands)
Revenues:                                                       
Manufacturing             $ 66,943     $ 152,486     $ 181,722     $ 534,706
Services                   9,003     8,112      28,948     26,164  
Consolidated Total        $ 75,946   $ 160,598   $ 210,670   $ 560,870 
                                                                   
Operating (Loss)
Income:
Manufacturing             $ 4,298      $ 13,880      $ 5,376       $ 51,746
Services                    706          595           3,607         2,050
Corporate                  (5,950 )   (6,599  )   (14,936 )   (20,519 )
Consolidated Total        $ (946   )  $ 7,876     $ (5,953  )  $ 33,277  
                                                                             

FreightCar America, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
                                                   
                                                     Nine Months Ended
                                                     September 30,
                                                     2013         2012
                                                     (In thousands)
Cash flows from operating activities                             
Net (loss) income                                    $ (7,008  )     20,054
Adjustments to reconcile net income to net cash
flows (used in) provided by operating activities:
Depreciation and amortization                          7,289         6,170
Gain on sale of railcars available for lease           (590    )     (976    )
Other non-cash items                                   108           770
Change in deferred income taxes                        337           11,176
Stock-based compensation expense recognized            1,703         1,409
Changes in operating assets and liabilities:
Accounts receivable                                    (7,623  )     (4,260  )
Inventories                                            7,156         16,199
Inventory on lease                                     (16,955 )     (7,248  )
Other assets                                           614           (2,507  )
Accounts and contractual payables                      (12,710 )     663
Customer deposits and other current liabilities        (27,418 )     162
Other changes in working capital                       (3,476  )     284
Accrued pension costs and accrued postretirement      (1,171  )   (3,368  )
benefits
Net cash flows (used in) provided by operating        (59,744 )   38,528  
activities
                                                                   
Cash flows from investing activities
Restricted cash deposits                               (3,675  )     (15,525 )
Restricted cash withdrawals                            14,240        1,810
Purchase of restricted certificates of deposit         (295    )     —
Purchase of securities held to maturity                (38,976 )     —
Proceeds from maturity of securities held to           42,000        —
maturity
Proceeds from sale of property, plant and              6,741         10,526
equipment and railcars available for lease
Purchases of property, plant and equipment            (16,282 )   (6,334  )
Net cash flows provided by (used in) investing        3,753      (9,523  )
activities
                                                                   
Cash flows from financing activities
Deferred financing costs                               (138    )     —
Employee restricted stock settlement                   (65     )     (48     )
Cash dividends paid to stockholders                    (2,166  )     (2,155  )
Customer advance for production of leased railcars     19,400        —
Repayment of customer advance                         (552    )   —       
Net cash flows provided by (used in) financing        16,479     (2,203  )
activities
                                                                   
Net (decrease) increase in cash and cash               (39,512 )     26,802
equivalents
Cash and cash equivalents at beginning of period      98,509     101,870 
Cash and cash equivalents at end of period           $ 58,997    $ 128,672 
                                                                             

Contact:

FreightCar America, Inc.
Charles F. Avery, Jr., 800-458-2235