Company delivers 99% year-over-yearrevenue growthand record quarterly deliveries for new plant
Reaffirms revenue, Adjusted EBITDA, and delivery outlook for 2024
CHICAGO, May 08, 2024 (GLOBE NEWSWIRE) -- FreightCar America, Inc. (NASDAQ: RAIL) (“FreightCar America” or the “Company”), a diversified manufacturer of railroad freight cars, today reported results for the first quarter ended March 31, 2024.
First Quarter 2024 Highlights
- Revenues of $161.1 million on 1,223 railcar deliveries, an increase of 99% compared to revenues of $81.0 million on 738 railcar deliveries in the first quarter of 2023
- Gross margin of 7.1% with gross profit of $11.4 million, compared to gross margin of 9.2% with gross profit of $7.5 million in the first quarter of 2023
- Net loss of ($11.6) million, or ($0.54) per share and Adjusted net income of $4.9 million, or $0.02 per share, accounting primarily for non-cash items associated with a change in fair market value of warrant liability
- Adjusted EBITDA of $6.1 million, compared to Adjusted EBITDA of $2.1 million in the first quarter of 2023
Nick Randall, President and Chief Executive Officer of FreightCar America, commented, “First quarter revenue grew 99% year-over-year and in line with our expectations. We were pleased by our ability to deliver another quarterly record number of railcars out of our Mexico facility, marking our second consecutive quarter of 1,000+ units of production.”
Randall concluded, “The health of the rail industry continued to improve during the first quarter, and as a result, we continue to maintain our view on industry demand for 35,000 to 40,000 new railcars for the year. As such, we remain confident in the year as we reiterate our stated guidance, with strong revenue and Adjusted EBITDA growth for 2024. With the factory now complete, we have the ability to produce 5,000+ railcars per year and are in our best position yet to efficiently execute. As I step into my new role as CEO, I am focused on our profitable growth through driving efficiencies, realizing the benefits of volume leverage, and improving margins as we flex the full capacity of our facility.”
Fiscal Year 2024 Outlook
The Company has reaffirmed outlook for fiscal year 2024 is as follows:
|
Fiscal 2024 Outlook |
Year-over-Year Growth at Midpoint |
| Revenue |
$520 - $572 million |
52.5% |
| Adjusted EBITDA |
$32 - $38 million |
74.1% |
| Railcar Deliveries |
4,000 – 4,400 Railcars |
39.0% |
|
|
|
Mike Riordan, Chief Financial Officer of FreightCar America, commented, “With the start of the year playing out in line with what we initially expected, we are reaffirming our full year guidance ranges. Furthermore, with the completion of the new manufacturing campus, and as we look ahead, we believe that we are extremely well positioned to enhance shareholder value by capturing incremental share, while remaining focused on margin, as industry demand improves.”
First Quarter 2024 Conference Call & Webcast Information
The Company will host a conference call and live webcast on Thursday, May 9 at 11:00 a.m. (Eastern Time) to discuss its first quarter 2024 financial results. FreightCar America invites shareholders and other interested parties to listen to its financial results conference call via the following live and recorded methods:
Live Webcast: https://viavid.webcasts.com/starthere.jsp?ei=1663434&tp_key=081d332e65
Recorded Webcast: A recorded webcast will be available until Thursday, May 23, 2024, on FreightCar America’s website following the conference call date at: https://investors.freightcaramerica.com/news-events/event-calendar/
Teleconference: Dial-in numbers for the live Conference Call are (877) 407-0789 or (201) 689-8562. Please call in at least 10 minutes prior to the start time of the call. An audio replay may be accessed at (844) 512-2921 or (412) 317-6671; Passcode: 13745456.
About FreightCar America
FreightCar America, headquartered in Chicago, Illinois, is a leading designer, producer and supplier of railroad freight cars, railcar parts and components. We also specialize in railcar repairs, complete railcar rebody services and railcar conversions that repurpose idled rail assets back into revenue service. Since 1901, our customers have trusted us to build quality railcars that are critical to economic growth and instrumental to the North American supply chain. To learn more about FreightCar America, visit www.freightcaramerica.com.
Forward-Looking Statements
This press release contains statements relating to our expected financial performance, financial condition, and/or future business prospects, events and/or 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 risks and uncertainties relate to, among other things, the cyclical nature of our business; adverse economic and market conditions including inflation; material disruption in the movement of rail traffic for deliveries; fluctuating costs of raw materials including steel and aluminum; 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, and other competitive factors. The factors listed above are not exhaustive. New factors emerge from time to time that may cause our business not to develop as we expect, and it is not possible for us to predict all of them. 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.
Non-GAAP Financial Measures
This press release includes measures not derived in accordance with generally accepted accounting principles (“GAAP”), such as EBITDA, Adjusted EBITDA, Adjusted net loss and Adjusted EPS. These non-GAAP measures should not be considered in isolation or as a substitute for any measure derived in accordance with GAAP and may also be inconsistent with similar measures presented by other companies. Reconciliations of these measures to the applicable most closely comparable GAAP measures, and reasons for the Company’s use of these measures, are presented in the attached pages.
FreightCar America, Inc.
Consolidated Balance Sheets
(In thousands, except for share data) |
|
|
March 31,
2024 |
|
|
December 31,
2023 |
|
| Assets |
|
|
| Current assets |
|
|
|
|
|
| Cash, cash equivalents and restricted cash equivalents |
$ |
13,977 |
|
|
$ |
40,560 |
|
| Accounts receivable, net of allowance for doubtful accounts of $82 and $18 respectively |
|
35,040 |
|
|
|
6,408 |
|
| VAT receivable |
|
3,959 |
|
|
|
2,926 |
|
| Inventories, net |
|
109,778 |
|
|
|
125,022 |
|
| Assets held for sale |
|
629 |
|
|
|
— |
|
| Related party asset |
|
902 |
|
|
|
638 |
|
| Prepaid expenses |
|
6,533 |
|
|
|
4,867 |
|
| Total current assets |
|
170,818 |
|
|
|
180,421 |
|
| Property, plant and equipment, net |
|
30,673 |
|
|
|
31,258 |
|
| Railcars available for lease, net |
|
— |
|
|
|
2,842 |
|
| Right of use asset operating lease |
|
2,724 |
|
|
|
2,826 |
|
| Right of use asset finance lease |
|
39,676 |
|
|
|
40,277 |
|
| Other long-term assets |
|
4,778 |
|
|
|
1,835 |
|
| Total assets |
$ |
248,669 |
|
|
$ |
259,459 |
|
|
|
|
|
|
|
|
|
| Liabilities, Mezzanine Equity and Stockholders’ Deficit |
|
|
|
|
|
| Current liabilities |
|
|
|
|
|
| Accounts and contractual payables |
$ |
75,918 |
|
|
$ |
84,417 |
|
| Related party accounts payable |
|
2,394 |
|
|
|
2,478 |
|
| Accrued payroll and other employee costs |
|
4,975 |
|
|
|
5,738 |
|
| Accrued warranty |
|
1,468 |
|
|
|
1,602 |
|
| Current portion of long-term debt |
|
30,002 |
|
|
|
29,415 |
|
| Other current liabilities |
|
7,309 |
|
|
|
13,711 |
|
| Total current liabilities |
|
122,066 |
|
|
|
137,361 |
|
| Warrant liability |
|
52,454 |
|
|
|
36,801 |
|
| Accrued pension costs |
|
1,106 |
|
|
|
1,046 |
|
| Lease liability operating lease, long-term |
|
3,038 |
|
|
|
3,164 |
|
| Lease liability finance lease, long-term |
|
41,084 |
|
|
|
41,273 |
|
| Other long-term liabilities |
|
2,278 |
|
|
|
2,562 |
|
| Total liabilities |
|
222,026 |
|
|
|
222,207 |
|
|
|
|
|
|
|
|
|
| Commitments and contingencies |
|
|
|
|
|
| Mezzanine equity |
|
|
|
|
|
| Series C Preferred stock, $0.01 par value, 85,412 shares authorized, 85,412 shares issued and outstanding at each of March 31, 2024 and December 31, 2023, respectively. Liquidation value $99,285 and $95,048 at March 31, 2024 and December 31, 2023, respectively. |
|
83,602 |
|
|
|
83,458 |
|
|
|
|
|
|
|
|
|
| Stockholders’ deficit |
|
|
|
|
|
Preferred stock, $0.01 par value, 2,500,000 shares authorized (100,000 shares each
designated as Series A voting and Series B non-voting, 0 shares issued and outstanding
at March 31, 2024 and December 31, 2023) |
|
— |
|
|
|
— |
|
Common stock, $0.01 par value, 50,000,000 shares authorized, 18,345,488 and 17,903,437
shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively |
|
214 |
|
|
|
210 |
|
| Additional paid-in capital |
|
94,783 |
|
|
|
94,067 |
|
| Accumulated other comprehensive income |
|
2,607 |
|
|
|
2,365 |
|
| Accumulated deficit |
|
(154,563 |
) |
|
|
(142,848 |
) |
| Total stockholders' deficit |
|
(56,959 |
) |
|
|
(46,206 |
) |
| Total liabilities, mezzanine equity and stockholders’ deficit |
$ |
248,669 |
|
|
$ |
259,459 |
|
|
|
|
|
|
|
|
|
FreightCar America, Inc.
Consolidated Statements of Operations
(In thousands, except for share and per share data) |
|
|
Three Months Ended |
|
|
March 31, |
|
|
2024 |
|
|
2023 |
|
|
|
|
| Revenues |
$ |
161,058 |
|
|
$ |
80,999 |
|
| Cost of sales |
|
149,655 |
|
|
|
73,514 |
|
| Gross profit |
|
11,403 |
|
|
|
7,485 |
|
| Selling, general and administrative expenses |
|
7,493 |
|
|
|
6,388 |
|
| Operating income |
|
3,910 |
|
|
|
1,097 |
|
| Interest expense |
|
(2,391 |
) |
|
|
(6,600 |
) |
| (Loss) gain on change in fair market value of Warrant liability |
|
(15,653 |
) |
|
|
613 |
|
| Other expense |
|
(14 |
) |
|
|
(36 |
) |
| Loss before income taxes |
|
(14,148 |
) |
|
|
(4,926 |
) |
| Income tax (benefit) provision |
|
(2,577 |
) |
|
|
111 |
|
| Net loss |
$ |
(11,571 |
) |
|
$ |
(5,037 |
) |
| Net loss per common share – basic |
$ |
(0.54 |
) |
|
$ |
(0.19 |
) |
| Net loss per common share – diluted |
$ |
(0.54 |
) |
|
$ |
(0.19 |
) |
| Weighted average common shares outstanding – basic |
|
29,580,182 |
|
|
|
26,545,463 |
|
| Weighted average common shares outstanding – diluted |
|
29,580,182 |
|
|
|
26,545,463 |
|
|
|
|
|
|
|
|
|
FreightCar America, Inc.
Segment Data
(In thousands) |
|
|
Three Months Ended |
|
|
March 31, |
|
|
2024 |
|
|
2023 |
|
| Revenues: |
|
|
|
|
|
| Manufacturing |
$ |
155,728 |
|
|
$ |
77,599 |
|
| Corporate and Other |
|
5,330 |
|
|
|
3,400 |
|
| Consolidated revenues |
$ |
161,058 |
|
|
$ |
80,999 |
|
|
|
|
|
|
|
| Operating income (loss): |
|
|
|
|
|
| Manufacturing |
$ |
8,279 |
|
|
$ |
5,628 |
|
| Corporate and Other |
|
(4,369 |
) |
|
|
(4,531 |
) |
| Consolidated operating income |
$ |
3,910 |
|
|
$ |
1,097 |
|
|
|
|
|
|
|
|
|
FreightCar America, Inc.
Consolidated Statements of Cash Flows
(In thousands) |
|
|
Three Months Ended March 31, |
|
|
2024 |
|
|
2023 |
|
| Cash flows from operating activities |
|
|
| Net loss |
$ |
(11,571 |
) |
|
$ |
(5,037 |
) |
| Adjustments to reconcile net loss to net cash flows used in operating activities: |
|
|
|
|
|
| Depreciation and amortization |
|
1,396 |
|
|
|
1,072 |
|
| Non-cash lease expense on right-of-use assets |
|
703 |
|
|
|
731 |
|
| Loss (gain) on change in fair market value for Warrant liability |
|
15,633 |
|
|
|
(613 |
) |
| Stock-based compensation recognized |
|
760 |
|
|
|
(91 |
) |
| Non-cash interest expense |
|
1,539 |
|
|
|
4,264 |
|
| Other non-cash items, net |
|
207 |
|
|
|
(1 |
) |
| Changes in operating assets and liabilities: |
|
|
|
|
|
| Accounts receivable |
|
(28,632 |
) |
|
|
904 |
|
| VAT receivable |
|
(999 |
) |
|
|
2,960 |
|
| Inventories |
|
16,963 |
|
|
|
(19,698 |
) |
| Related party asset, net |
|
(348 |
) |
|
|
(362 |
) |
| Accounts and contractual payables |
|
(7,884 |
) |
|
|
9,695 |
|
| Income taxes payable, net |
|
(3,937 |
) |
|
|
(517 |
) |
| Lease liability |
|
(1,057 |
) |
|
|
(1,191 |
) |
| Other assets and liabilities |
|
(8,115 |
) |
|
|
180 |
|
| Net cash flows used in operating activities |
|
(25,322 |
) |
|
|
(7,704 |
) |
|
|
|
|
|
|
|
|
| Cash flows from investing activities |
|
|
|
|
|
| Purchase of property, plant and equipment |
|
(966 |
) |
|
|
(1,960 |
) |
| Net cash flows used in investing activities |
|
(966 |
) |
|
|
(1,960 |
) |
|
|
|
|
|
|
| Cash flows from financing activities |
|
|
|
|
|
| Borrowings on revolving line of credit |
|
13,037 |
|
|
|
31,688 |
|
| Repayments on revolving line of credit |
|
(12,450 |
) |
|
|
(31,884 |
) |
| Employee stock settlement |
|
(40 |
) |
|
|
(106 |
) |
| Financing lease payments |
|
(842 |
) |
|
|
(147 |
) |
| Net cash flows used in financing activities |
|
(295 |
) |
|
|
(449 |
) |
| Net decrease in cash and cash equivalents |
|
(26,583 |
) |
|
|
(10,113 |
) |
| Cash, cash equivalents and restricted cash equivalents at beginning of period |
|
40,560 |
|
|
|
37,912 |
|
| Cash, cash equivalents and restricted cash equivalents at end of period |
$ |
13,977 |
|
|
$ |
27,799 |
|
|
|
|
|
|
|
|
|
| Supplemental cash flow information |
|
|
|
|
|
| Interest paid |
$ |
852 |
|
|
$ |
2,340 |
|
| Income taxes paid |
$ |
403 |
|
|
$ |
151 |
|
| Non-cash transactions |
|
|
|
|
|
| Change in unpaid construction in process |
$ |
(155 |
) |
|
$ |
539 |
|
| Accrued PIK interest paid through issuance of PIK Note |
$ |
— |
|
|
$ |
1,658 |
|
| Issuance of equity fee |
$ |
— |
|
|
$ |
535 |
|
|
|
|
|
|
|
Non-GAAP Financial Measures (Unaudited)
FreightCar America, Inc.
Reconciliation of loss before taxes to EBITDA(1) and Adjusted EBITDA(2)
(In thousands)
(Unaudited) |
|
|
|
|
|
|
|
Three Months Ended
March 31, |
|
|
2024 |
|
|
2023 |
|
|
|
|
|
|
|
| Loss before income taxes |
$ |
(14,148 |
) |
|
$ |
(4,926 |
) |
| Depreciation & Amortization |
|
1,396 |
|
|
|
1,072 |
|
| Interest Expense, net |
|
2,391 |
|
|
|
6,600 |
|
| EBITDA |
|
(10,361 |
) |
|
|
2,746 |
|
|
|
|
|
|
|
| Change in Fair Value of Warrant (a) |
|
15,653 |
|
|
|
(613 |
) |
| Stock Based Compensation |
|
760 |
|
|
|
(91 |
) |
| Other, net |
|
15 |
|
|
|
36 |
|
| Adjusted EBITDA |
$ |
6,067 |
|
|
$ |
2,078 |
|
| (1) |
EBITDA represents earnings before interest, taxes, depreciation and amortization. We believe EBITDA is useful to investors in evaluating our operating performance compared to that of other companies in our industry. In addition, our management uses EBITDA to evaluate our operating performance. The calculation of EBITDA eliminates the effects of financing, income taxes and the accounting effects of capital spending. These items may vary for different companies for reasons unrelated to the overall performance of the company’s business. EBITDA is not a financial measure presented in accordance with U.S. GAAP. Accordingly, when analyzing our operating performance, investors should not consider EBITDA in isolation or as a substitute for net income, cash flows from operating activities or other statements of operations or statements of cash flow data prepared in accordance with U.S. GAAP. Our calculation of EBITDA is not necessarily comparable to that of other similar titled measures reported by other companies. |
| (2) |
Adjusted EBITDA represents EBITDA before the following charges: |
|
a) |
This adjustment removes the non-cash expense (income) associated with the change in fair market value of the Company’s warrant liability. |
|
|
|
We believe that Adjusted EBITDA is useful to investors evaluating our operating performance compared to that of other companies in our industry because it eliminates the impact of certain non-cash charges and other special items that affect the comparability of results in past quarters. Adjusted EBITDA is not a financial measure presented in accordance with U.S. GAAP. Accordingly, when analyzing our operating performance, investors should not consider Adjusted EBITDA in isolation or as a substitute for net income, cash flows from operating activities or other statements of operations or statements of cash flow data prepared in accordance with U.S. GAAP. Our calculation of Adjusted EBITDA is not necessarily comparable to that of other similarly titled measures reported by other companies.
FreightCar America, Inc.
Reconciliation of Net loss and Adjusted net income (loss) (1)
(Unaudited) |
|
|
Three Months Ended
March 31, |
|
|
2024 |
|
|
2023 |
|
|
|
|
|
|
|
| Net loss |
$ |
(11,571 |
) |
|
$ |
(5,037 |
) |
|
|
|
|
|
|
| Change in Fair Value of Warrant (a) |
|
15,653 |
|
|
|
(613 |
) |
| Stock Based Compensation |
|
760 |
|
|
|
(91 |
) |
| Other, net |
|
15 |
|
|
|
36 |
|
| Total non-GAAP adjustments |
|
16,428 |
|
|
|
(668 |
) |
| Income tax impact on non-GAAP adjustments (b) |
|
- |
|
|
|
- |
|
| Adjusted net income (loss) |
$ |
4,857 |
|
|
$ |
(5,705 |
) |
| (1) |
Adjusted net income (loss) represents net income (loss) before the following charges: |
|
a) |
This adjustment removes the non-cash expense (income) associated with the change in fair market value of the Company’s warrant liability. |
|
b) |
Income tax impact on non-GAAP adjustments per share represents the tax impact of adjustments specific to Mexico using the effective tax rate. Given the Company’s US based NOLs and Valuation Allowances, all US based adjustments above are not tax affected. |
|
|
|
We believe that Adjusted net income (loss) is useful to investors evaluating our operating performance compared to that of other companies in our industry because it eliminates the impact of certain non-cash charges and other special items that affect the comparability of results in past quarters. Adjusted net income (loss) is not a financial measure presented in accordance with U.S. GAAP. Accordingly, when analyzing our operating performance, investors should not consider Adjusted net income (loss) in isolation or as a substitute for net income, cash flows from operating activities or other statements of operations or statements of cash flow data prepared in accordance with U.S. GAAP. Our calculation of Adjusted net loss is not necessarily comparable to that of other similarly titled measures reported by other companies.
FreightCar America, Inc.
Reconciliation of EPS and Adjusted EPS(1)
(Unaudited) |
|
|
|
|
|
|
|
Three Months Ended
March 31, |
|
|
2024 |
|
|
2023 |
|
|
|
|
|
|
|
| EPS |
$ |
(0.54 |
) |
|
$ |
(0.19 |
) |
|
|
|
|
|
|
| Change in Fair Value of Warrant (a) |
|
0.53 |
|
|
|
(0.02 |
) |
| Stock Based Compensation |
|
0.03 |
|
|
|
- |
|
| Other, net |
|
- |
|
|
|
- |
|
| Total non-GAAP adjustments pre-tax per-share |
|
0.56 |
|
|
|
(0.02 |
) |
| Income tax impact on non-GAAP adjustments per share (b) |
|
- |
|
|
|
- |
|
| Adjusted EPS |
$ |
0.02 |
|
|
$ |
(0.21 |
) |
| (1) |
Adjusted EPS represents basic EPS before the following charges: |
|
a) |
This adjustment removes the non-cash expense (income) associated with the change in fair market value of the Company’s warrant liability. |
|
b) |
Income tax impact on non-GAAP adjustments per share represents the tax impact of adjustments specific to Mexico using the effective tax rate. Given the Company’s US based NOLs and Valuation Allowances, all US based adjustments above are not tax affected. |
|
|
|
We believe that Adjusted EPS is useful to investors evaluating our operating performance compared to that of other companies in our industry because it eliminates the impact of certain non-cash charges and other special items that affect the comparability of results in past quarters. Adjusted EPS is not a financial measure presented in accordance with U.S. GAAP. Accordingly, when analyzing our operating performance, investors should not consider Adjusted EPS in isolation or as a substitute for net income, cash flows from operating activities or other statements of operations or statements of cash flow data prepared in accordance with U.S. GAAP. Our calculation of Adjusted EPS is not necessarily comparable to that of other similarly titled measures reported by other companies.
