FreightCar America, Inc. Reports First Quarter 2024 Results
Company delivers 99% year-over-year revenue growth and 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 2023Gross 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 2023Net 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 liabilityAdjusted 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 OutlookYear-over-Year Growth at MidpointRevenue$520 - $572 million52.5%Adjusted EBITDA$32 - $38 million74.1%Railcar Deliveries4,000 – 4,400 Railcars39.0% 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. Investor Contact:[email protected] 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.
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