Company delivers strong quarterly results realizing significant revenue growth and gross margin expansion
Raises guidance for fiscal year 2023
CHICAGO, Aug. 07, 2023 (GLOBE NEWSWIRE) -- FreightCar America, Inc. ( RAIL) (“FreightCar America” or the “Company”), a diversified manufacturer of railroad freight cars, today reported results for the second quarter ended June 30, 2023.
Second Quarter 2023 Highlights
- Revenues of $88.6 million on 760 railcar deliveries, up 56% compared to revenues of $56.8 million on 468 railcar deliveries in the second quarter of 2022
- Gross margin of 14.6% with gross profit of $13.0 million, compared to gross margin of 11.6% with gross profit of $6.6 million in the second quarter of 2022
- Net loss of ($18.9) million, or ($0.73) per share and Adjusted Net income of $2.7 million, or $0.02 per share, accounting primarily for non-cash items associated with the loss on debt extinguishment and change in fair market value of warrant liability
- Adjusted EBITDA of $8.0 million, compared to Adjusted EBITDA of $2.3 million in the second quarter of 2022
- Railcar orders of 381 in the second quarter and 2,341 for the first half of the year, with quarter-end backlog totaling 3,288 railcars for an aggregate value of approximately $382 million
- FY23 Adjusted EBITDA guidance raised to $18 - $22 million from prior guidance of $15 - $20 million
Jim Meyer, President and Chief Executive Officer of FreightCar America, commented, “FreightCar America finished an impressive quarter, with revenues up 56% year-over-year and gross margins of 14.6%. These results were fueled by our steadfast commitments to achieving the highest levels of customer satisfaction and operational excellence, and building a world-class manufacturing campus in Castaños, Mexico. The multi-year project to construct the campus is scheduled to be completed this August, after which we will have four production lines available and even more opportunities to differentiate ourselves within the industry.”
Meyer continued, “Consistent with our commitments, we announced the addition of Nick Randall as FreightCar America’s first Chief Operating Officer during the quarter. Nick brings a wealth of experience and will be a great asset as we continue to lay the groundwork for our future. Lastly, we completed the previously announced financing transaction during the quarter to replace our term loans with a preferred share offering. This transaction further strengthened our balance sheet and provides us with additional flexibility as we focus on the future and growth.”
Fiscal Year 2023 Outlook
The Company has raised its outlook for fiscal year 2023 as follows:
| Fiscal 2023 Outlook | Year-over-Year Growth at Midpoint | ||
| Revenue | $400 - $430 million | 13.8% | |
| Adjusted EBITDA | $18 - $22 million | 137.8% | |
| Railcar Deliveries | 3,400 - 3,700 Railcars | 11.5% | |
Mike Riordan, Chief Financial Officer of FreightCar America, added, “Market demand for our railcars remains strong. While new orders were lower than anticipated for the quarter, this was primarily a function of timing. With our order backlog fully booked for 2023, we are raising our previously stated full year Adjusted EBITDA guidance range from between $15 million and $20 million to between $18 million and $22 million. Despite foreign currency headwinds alongside the broader macro environment, we are making great progress in improving our margins. Increased profitability combined with our robust backlog and a stronger balance sheet, FreightCar America is positioned to execute as we head into the second half of the fiscal year and beyond.”
Second Quarter 2023 Conference Call & Webcast Information
The Company will host a conference call and live webcast on Tuesday, August 8, 2023 at 11:00 a.m. (ET) to discuss its second quarter 2023 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=1625284&tp_key=18422c6ac0
Recorded Webcast: A recorded webcast will be available until Wednesday, August 23, 2023 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; Passcode 13740188. 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: 13740188.
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 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: risks relating to 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; potential financial and operational impacts of the COVID-19 pandemic; the highly competitive nature of our industry; the risk of lack of acceptance of our new railcar offerings by our customers; and other competitive factors. 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.
| Investor Contact: [email protected] |
FreightCar America, Inc.
Consolidated Balance Sheets
(In thousands, except for share data)
(Unaudited)
| June 30, 2023 | December 31, 2022 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash, cash equivalents and restricted cash equivalents | $ | 11,999 | $ | 37,912 | ||||
| Accounts receivable, net of allowance for doubtful accounts of $179 and $126 respectively | 21,493 | 9,571 | ||||||
| VAT receivable | 1,421 | 4,682 | ||||||
| Inventories, net | 88,769 | 64,317 | ||||||
| Assets held for sale | — | 3,675 | ||||||
| Related party asset | 1,308 | 3,261 | ||||||
| Prepaid expenses | 15,650 | 5,470 | ||||||
| Total current assets | 140,640 | 128,888 | ||||||
| Property, plant and equipment, net | 26,624 | 23,248 | ||||||
| Railcars available for lease, net | 7,070 | 11,324 | ||||||
| Right of use asset operating lease | 1,221 | 1,596 | ||||||
| Right of use asset finance lease | 32,160 | 33,093 | ||||||
| Other long-term assets | 529 | 1,589 | ||||||
| Total assets | $ | 208,244 | $ | 199,738 | ||||
| Liabilities, Mezzanine Equity and Stockholders’ Deficit | ||||||||
| Current liabilities | ||||||||
| Accounts and contractual payables | $ | 41,778 | $ | 48,449 | ||||
| Related party accounts payable | 1,213 | 3,393 | ||||||
| Accrued payroll and other employee costs | 3,641 | 4,081 | ||||||
| Accrued warranty | 1,632 | 1,940 | ||||||
| Customer deposits | 19,644 | — | ||||||
| Current portion of long-term debt | 22,293 | 40,742 | ||||||
| Other current liabilities | 6,684 | 7,380 | ||||||
| Total current liabilities | 96,885 | 105,985 | ||||||
| Long-term debt, net of current portion | — | 51,494 | ||||||
| Warrant liability | 40,714 | 31,028 | ||||||
| Accrued pension costs | 1,176 | 1,040 | ||||||
| Lease liability operating lease, long-term | 1,694 | 1,780 | ||||||
| Lease liability finance lease, long-term | 32,913 | 33,245 | ||||||
| Other long-term liabilities | 563 | 3,750 | ||||||
| Total liabilities | 173,945 | 228,322 | ||||||
| Commitments and contingencies | ||||||||
| Mezzanine equity | ||||||||
| Series C Preferred stock, $0.01 par value, 85,412 shares authorized, 85,412 and 0 shares issued and outstanding on June 30, 2023 and December 31, 2022, respectively. Liquidation value $87,023,723 and $0 on June 30, 2023 and December 31, 2022, respectively. | 83,253 | — | ||||||
| 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 June 30, 2023 and December 31, 2022) | — | — | ||||||
| Common stock, $0.01 par value, 50,000,000 shares authorized, 17,899,191 and 17,223,306 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively | 210 | 203 | ||||||
| Additional paid-in capital | 92,633 | 89,104 | ||||||
| Accumulated other comprehensive income | 1,099 | 1,022 | ||||||
| Accumulated deficit | (142,896 | ) | (118,913 | ) | ||||
| Total stockholders' deficit | (48,954 | ) | (28,584 | ) | ||||
| Total liabilities, mezzanine equity and stockholders’ deficit | $ | 208,244 | $ | 199,738 | ||||
FreightCar America, Inc.
Consolidated Statements of Operations
(In thousands, except for share and per share data)
(Unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Revenues | $ | 88,596 | $ | 56,786 | $ | 169,595 | $ | 150,022 | ||||||||
| Cost of sales | 75,641 | 50,197 | 149,155 | 133,375 | ||||||||||||
| Gross profit | 12,955 | 6,589 | 20,440 | 16,647 | ||||||||||||
| Selling, general and administrative expenses | 5,851 | 4,053 | 12,239 | 14,766 | ||||||||||||
| Gain on sale of railcars available for lease | 622 | — | 622 | — | ||||||||||||
| Operating income | 7,726 | 2,536 | 8,823 | 1,881 | ||||||||||||
| Interest expense | (4,351 | ) | (5,757 | ) | (10,951 | ) | (11,462 | ) | ||||||||
| (Loss) gain on change in fair market value of Warrant liability | (6,755 | ) | 18,746 | (6,142 | ) | (1,984 | ) | |||||||||
| Loss on extinguishment of debt | (14,880 | ) | — | (14,880 | ) | — | ||||||||||
| Other (expense) income | (69 | ) | 661 | (105 | ) | 2,157 | ||||||||||
| (Loss) income before income taxes | (18,329 | ) | 16,186 | (23,255 | ) | (9,408 | ) | |||||||||
| Income tax provision | 560 | 1,647 | 671 | 1,900 | ||||||||||||
| Net (loss) income | $ | (18,889 | ) | $ | 14,539 | $ | (23,926 | ) | $ | (11,308 | ) | |||||
| Net (loss) income per common share – basic | $ | (0.73 | ) | $ | 0.58 | $ | (0.93 | ) | $ | (0.47 | ) | |||||
| Net (loss) income per common share – diluted | $ | (0.73 | ) | $ | 0.58 | $ | (0.93 | ) | $ | (0.47 | ) | |||||
| Weighted average common shares outstanding – basic | 28,113,825 | 24,499,784 | 27,552,297 | 23,994,327 | ||||||||||||
| Weighted average common shares outstanding – diluted | 28,113,825 | 24,499,784 | 27,552,297 | 23,994,327 | ||||||||||||
FreightCar America, Inc.
Segment Data
(In thousands)
(Unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Revenues: | ||||||||||||||||
| Manufacturing | $ | 85,724 | $ | 53,606 | $ | 163,323 | $ | 143,731 | ||||||||
| Corporate and Other | 2,872 | 3,180 | 6,272 | 6,291 | ||||||||||||
| Consolidated revenues | $ | 88,596 | $ | 56,786 | $ | 169,595 | $ | 150,022 | ||||||||
