Highlights
- First quarter revenue of $139.5 million on deliveries of 1,525 units
- First quarter net income of $0.6 million, or $0.05 per diluted share
- Diversified backlog totaling 2,802 railcars valued at $285 million
- Total cash, cash equivalents, marketable securities and restricted cash of $114.8 million at March 31, 2017
- Full year 2017 delivery range increased to be between 4,200 and 4,400 railcars
CHICAGO, May 03, 2017 (GLOBE NEWSWIRE) -- FreightCar America, Inc. (NASDAQ: RAIL ) today reported results for the first quarter ended March 31, 2017, with net income of $0.6 million, or $0.05 per diluted share, compared to net income of $12.7 million, or $1.03 per diluted share, in the same period last year. First quarter 2017 results included pre-tax restructuring charges of $1.8 million, of which $0.4 million were non-cash expenses, while first quarter 2016 results included a gain on a settlement of retiree benefit plan obligations of $14.3 million.
“Our cost reduction efforts and operational improvements are beginning to positively impact our results as deliveries and net income exceeded fourth quarter 2016 results. However, overall market conditions remain challenging as demonstrated by continued weakness in orders for new railcars,” said Joe McNeely, President and Chief Executive Officer. “While near term uncertainty still exists, we are confident that the cost reduction initiatives that we have implemented, our diversified product offering and our strong balance sheet have positioned the Company to manage through the downturn. Finally, deliveries for 2017, including the cars delivered in the first quarter and orders received to date in the second quarter, are now expected to range between 4,200 and 4,400 railcars.”
Consolidated revenues were $139.5 million in the first quarter of 2017 compared to $148.6 million in the same quarter of 2016. The Company delivered 1,525 railcars in the first quarter of 2017, which included 1,425 new railcars and 100 leased railcars. This compares to 1,609 railcars delivered in the first quarter of 2016, all of which were new railcars. Orders in the first quarter of 2017 totaled 68 railcars, of which 15 were new railcars and 53 were rebuilt railcars. The Company had a diversified backlog totaling 2,802 railcars at March 31, 2017, valued at $285 million.
Consolidated operating income for the first quarter of 2017 was $1.1 million compared to $19.6 million for the first quarter of 2016. Adjusted operating income, which excludes pre-tax restructuring charges totaling $1.8 million in the first quarter of 2017, was $2.9 million compared to adjusted operating income of $5.3 million in the first quarter of 2016, which excluded the gain on settlement of retiree benefit plan obligations of $14.3 million. Adjusted operating income is a non-GAAP financial measure. A reconciliation of adjusted operating income 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 $114.8 million as of March 31, 2017.
The Company will host a conference call and live webcast on Thursday, May 4, 2017 at 11:00 a.m. (Eastern Daylight Time) to discuss the Company’s first quarter 2017 financial results. To participate in the conference call, please dial (800) 230-1766, Confirmation Number 422845. 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#: 422845
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 May 4, 2017 until 11:59 p.m. (Eastern Daylight Time) on June 4, 2017. To access the replay, please dial (800) 475-6701. The replay pass code is 422845. 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) | ||||||
| March 31, | December 31, | |||||
| 2017 | 2016 | |||||
| (In thousands) | ||||||
| Assets | ||||||
| Current assets | ||||||
| Cash and cash equivalents | $ | 98,067 | $ | 92,750 | ||
| Restricted certificates of deposit | 5,720 | 5,970 | ||||
| Marketable securities | 10,996 | — | ||||
| Accounts receivable, net | 22,167 | 25,207 | ||||
| Inventories, net | 77,501 | 97,904 | ||||
| Income taxes receivable | 13,286 | 13,283 | ||||
| Other current assets | 15,929 | 6,056 | ||||
| Total current assets | 243,666 | 241,170 | ||||
| Property, plant and equipment, net | 44,405 | 46,347 | ||||
| Railcars available for lease, net | 23,962 | 24,018 | ||||
| Goodwill | 21,521 | 21,521 | ||||
| Deferred income taxes, net | 3,798 | 4,221 | ||||
| Other long-term assets | 1,968 | 1,978 | ||||
| Total assets | $ | 339,320 | $ | 339,255 | ||
| Liabilities and Stockholders’ Equity | ||||||
| Current liabilities | ||||||
| Accounts and contractual payables | $ | 33,302 | $ | 34,536 | ||
| Accrued payroll and other employee costs | 4,215 | 3,117 | ||||
| Reserve for workers’ compensation | 4,187 | 4,444 | ||||
| Accrued warranty | 8,591 | 8,324 | ||||
| Customer deposits and deferred revenue | 645 | 371 | ||||
| Other current liabilities | 3,520 | 3,343 | ||||
| Total current liabilities | 54,460 | 54,135 | ||||
| Accrued pension costs | 6,895 | 6,821 | ||||
| Accrued postretirement benefits, less current portion | 5,852 | 5,769 | ||||
| Deferred income state and local incentives, long-term | 10,825 | 11,380 | ||||
| Accrued taxes and other long-term liabilities | 4,625 | 4,236 | ||||
| Total liabilities | 82,657 | 82,341 | ||||
| Stockholders’ equity | ||||||
| Preferred stock | — | — | ||||
| Common stock | 127 | 127 | ||||
| Additional paid in capital | 90,499 | 92,025 | ||||
| Treasury stock, at cost | (12,642 | ) | (14,583 | ) | ||
| Accumulated other comprehensive loss | (8,135 | ) | (8,163 | ) | ||
| Retained earnings | 186,814 | 187,508 | ||||
| Total stockholders’ equity | 256,663 | 256,914 | ||||
| Total liabilities and stockholders’ equity | $ | 339,320 | $ | 339,255 | ||
| FreightCar America, Inc. | |||||||
| Condensed Consolidated Statements of Operations | |||||||
| (Unaudited) | |||||||
| Three Months Ended March 31, | |||||||
| 2017 | 2016 | ||||||
| (In thousands, except for share and per share data) | |||||||
| Revenues | $ | 139,536 | $ | 148,590 | |||
| Cost of sales | 129,646 | 132,703 | |||||
| Gross profit | 9,890 | 15,887 | |||||
| Selling, general and administrative expenses | 7,011 | 10,598 | |||||
| Gain on settlement of postretirement benefit plan obligation, net of plaintiffs’ attorneys’ fees | — | (14,306 | ) | ||||
| Restructuring and impairment charges | 1,777 | — | |||||
| Operating income | 1,102 | 19,595 | |||||
| Interest expense and deferred financing costs | (42 | ) | (45 | ) | |||
| Other income | 18 | 81 | |||||
| Income before income taxes | 1,078 | 19,631 | |||||
| Income tax provision | 440 | 6,964 | |||||
| Net income | $ | 638 | $ | 12,667 | |||
| Net income per common share - basic | $ | 0.05 | $ | 1.03 | |||
| Net income per common share - diluted | $ | 0.05 | $ | 1.03 | |||
| Weighted average common shares outstanding - | |||||||
| basic | 12,269,555 | 12,252,131 | |||||
| Weighted average common shares outstanding - | |||||||
| diluted | 12,269,555 | 12,252,131 | |||||
| Dividends declared per common share | $ | 0.09 | $ | 0.09 | |||
| FreightCar America, Inc. | ||||||
| Condensed Segment Data | ||||||
| (Unaudited) | ||||||
| Three Months Ended March 31, | ||||||
| 2017 | 2016 | |||||
| (In thousands) | ||||||
| Revenues: | ||||||
| Manufacturing | $ | 137,740 | $ | 146,071 | ||
| Corporate and Other | 1,796 | 2,519 | ||||
| Consolidated revenues | $ | 139,536 | $ | 148,590 | ||
| Operating income (loss): | ||||||
| Manufacturing | $ | 7,249 | $ | 12,782 | ||
| Corporate and Other (1) | (6,147 | ) | 6,813 | |||
| Consolidated operating income | $ | 1,102 | $ | 19,595 | ||
(1) Results for the three months ended March 31, 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) | ||||||
| Three Months Ended March 31, | ||||||
| 2017 | 2016 | |||||
| (In thousands) | ||||||
| Cash flows from operating activities | ||||||
| Net income | $ | 638 | $ | 12,667 | ||
| Adjustments to reconcile net income to net cash flows provided by (used in) operating activities: | ||||||
| Depreciation and amortization | 2,337 | 2,619 | ||||
| Recognition of deferred income from state and local incentives | (555 | ) | (532 | ) | ||
| Gain on settlement of postretirement benefit plan obligation | — | (15,606 | ) | |||
| Deferred income taxes | 408 | 16,149 | ||||
| Stock-based compensation recognized | 214 | 229 | ||||
| Other non-cash items | 84 | 334 | ||||
| Changes in operating assets and liabilities: | ||||||
| Accounts receivable | 1,630 | 21,387 | ||||
| Inventories | 20,101 | (21,353 | ) | |||
| Other assets | (9,872 | ) | (3,152 | ) | ||
| Accounts and contractual payables | (1,170 | ) | 5,431 | |||
| Accrued payroll and employee benefits | 1,098 | (3,976 | ) | |||
| Income taxes receivable/payable | 48 | (6,277 | ) | |||
| Accrued warranty | 267 | 385 | ||||
| Customer deposits and other liabilities | 547 | 12,649 | ||||
| Payment for settlement of postretirement benefit plan obligation | — | (31,616 | ) | |||
| Accrued pension costs and accrued postretirement benefits | 185 | (6,283 | ) | |||
| Net cash flows provided by (used in) operating activities | 15,960 | (16,945 | ) | |||
| Cash flows from investing activities | ||||||
| Purchase of restricted certificates of deposit | (4,668 | ) | (1,182 | ) | ||
| Maturity of restricted certificates of deposit | 4,918 | 2,910 | ||||
| Purchase of securities held to maturity | (10,995 | ) | — | |||
| Proceeds from maturity of securities | — | 6,000 | ||||
| Purchases of property, plant and equipment | (296 | ) | (2,447 | ) | ||
| 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 | (9,512 | ) | 5,281 | |||
| Cash flows from financing activities | ||||||
| Employee stock settlement | (14 | ) | (70 | ) | ||
| Cash dividends paid to stockholders | (1,117 | ) | (1,111 | ) | ||
| Net cash flows used in financing activities | (1,131 | ) | (1,181 | ) | ||
| Net increase (decrease) in cash and cash equivalents | 5,317 | (12,845 | ) | |||
| Cash and cash equivalents at beginning of period | 92,750 | 83,068 | ||||
| Cash and cash equivalents at end of period | $ | 98,067 | $ | 70,223 | ||
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 of pre-tax restructuring and impairment charges related to the Company’s cost reduction plan in the first quarter of 2017, the $14.3 million pre-tax gain on settlement of the retiree benefits litigation in the first quarter of 2016 and $0.7 million of pre-tax restructuring and impairment charges related to the Company’s cost reduction plan in the fourth quarter of 2016. 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 March 31, | Three Months Ended December 31, | ||||||||
| 2017 | 2016 | 2016 | |||||||
| (In thousands) | |||||||||
| Operating income (loss), as reported | $ | 1,102 | $ | 19,595 | $ | (3,094 | ) | ||
| Less: Gain on settlement of retiree benefit plan obligations, net of plaintiffs’ attorneys’ fees | - | (14,306 | ) | - | |||||
| Add: Restructuring and impairment charges | 1,777 | - | 730 | ||||||
| Adjusted operating income (loss) | $ | 2,879 | $ | 5,289 | $ | (2,364 | ) | ||
MEDIA CONTACT Matthew S. Kohnke TELEPHONE (800) 458-2235
