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| 8-K - FORM 8-K - FreightCar America, Inc. | d14430d8k.htm |
Exhibit 99.1
| MEDIA CONTACT | Charles F. Avery, Jr. | |
| TELEPHONE | (800) 458-2235 | |
| FOR IMMEDIATE RELEASE | August 5, 2015 | |
FreightCar America, Inc. Reports Second Quarter 2015 Results
Highlights
| • | Net income of $7.4 million, or $0.60 per diluted share |
| • | Revenues of $235.6 million on deliveries of 2,611 units |
| • | Orders for 1,618 railcars received during the quarter |
| • | Backlog totaling 14,075 railcars valued at $1.26 billion |
Chicago, IL, August 5, 2015 — FreightCar America, Inc. (NASDAQ: RAIL) today reported results for the second quarter ended June 30, 2015, with revenues of $235.6 million and net income of $7.4 million, or $0.60 per diluted share. For the second quarter of 2014, the Company reported revenues of $139.7 million and net income of $1.6 million, or $0.13 per diluted share. Revenues were $92.8 million with a net loss of $2.1 million, or $(0.17) per diluted share, in the first quarter of 2015.
President and Chief Executive Officer Joe McNeely commented, “We delivered significantly improved results in the second quarter, driven by the highest level of railcar deliveries since the second quarter of 2012, improved manufacturing efficiencies at our Shoals facility and a favorable product mix. The additional production capacity at our Shoals facility is now operational and the productivity of our workforce there continues to improve. While we are pleased with the progress that we’ve made at Shoals, we still have areas for improvement and will continue to make long-term investments in the facility and in our people to further improve our productivity.”
McNeely concluded, “Given our improved visibility for production over the remaining five months of 2015, we now expect full-year deliveries to be approximately 9,500 railcars.”
The Company delivered 2,611 railcars in the second quarter of 2015, which included 1,861 new and 750 rebuilt railcars. This compares to 1,635 railcars delivered in the second quarter of 2014, which included 510 new, 325 leased and 800 rebuilt cars. There were 1,059 railcars delivered in the first quarter of 2015, of which 651 were new and 408 were rebuilds. Total manufacturing backlog was 14,075 units at June 30, 2015, compared to 8,493 units at June 30, 2014 and 15,068 units at March 31, 2015. Non-coal cars comprised 12,158 units of the total backlog at June 30, 2015, compared to 4,745 units of the total backlog at June 30, 2014 and 12,224 units at March 31, 2015.
The Manufacturing segment had revenues of $227.0 million in the second quarter of 2015, compared to $128.8 million for the same period of 2014 and $85.1 million in the first quarter of 2015. The Manufacturing segment operating income was $17.2 million in the second quarter of 2015, which included approximately $0.9 million of costs associated with the finalization of the additional production line at Shoals. This compared to Manufacturing segment operating income of $7.4 million in the second quarter of 2014 and Manufacturing segment operating income of $1.9 million for the first quarter of 2015.
Revenues for the Services segment were $8.6 million in the second quarter of 2015, compared to $10.9 million in the second quarter of 2014 and $7.7 million in the first quarter of 2015. The Services segment operating income was $1.5 million in the second quarter of 2015, compared to Services segment operating income of $1.0 million in the second quarter of 2014 and Services segment operating income of $1.2 million in the first quarter of 2015.
Corporate costs were $7.8 million during the quarter ended June 30, 2015, compared to $6.0 million in the same period in the prior year and $6.2 million in the first quarter of 2015.
Cash, cash equivalents, marketable securities and restricted cash were $75.8 million as of June 30, 2015, compared to $167.5 million as of December 31, 2014. The decrease was driven primarily by an increase in inventory to support production requirements and utilization of a customer deposit.
* * * * *
The Company will host a conference call and live webcast on Thursday, August 6, 2015 at 11:00 a.m. (Eastern Daylight Time) to discuss the Company’s second quarter 2015 financial results. To participate in the conference call, please dial (800) 230-1096, Confirmation Number 365415. 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#: 365415
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 August 6, 2015 until 11:59 p.m. (Eastern Daylight Time) on September 6, 2015. To access the replay, please dial (800) 475-6701. The replay pass code is 365415. 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, leases freight cars through its JAIX Leasing Company subsidiary and provides railcar maintenance and repairs through its FreightCar Rail Services, LLC 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; 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)
| June 30, | December 31, | |||||||
| 2015 | 2014 | |||||||
| (In thousands) | ||||||||
| Assets |
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| Current assets |
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| Cash and cash equivalents |
$ | 25,955 | $ | 113,532 | ||||
| Restricted cash and restricted certificates of deposit |
7,885 | 6,015 | ||||||
| Marketable securities |
42,002 | 47,961 | ||||||
| Accounts receivable, net |
37,918 | 4,086 | ||||||
| Inventories, net |
150,288 | 82,259 | ||||||
| Inventory on lease |
— | 116 | ||||||
| Other current assets |
11,141 | 7,057 | ||||||
| Deferred income taxes, net |
10,506 | 12,139 | ||||||
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| Total current assets |
285,695 | 273,165 | ||||||
| Property, plant and equipment, net |
49,846 | 43,239 | ||||||
| Railcars available for lease, net |
16,247 | 22,897 | ||||||
| Goodwill |
22,128 | 22,128 | ||||||
| Deferred income taxes, net |
21,317 | 21,553 | ||||||
| Other long-term assets |
1,769 | 2,270 | ||||||
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| Total assets |
$ | 397,002 | $ | 385,252 | ||||
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| Liabilities and Stockholders’ Equity |
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| Current liabilities |
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| Accounts and contractual payables |
$ | 65,037 | $ | 34,010 | ||||
| Accrued payroll and employee benefits |
4,981 | 6,462 | ||||||
| Accrued postretirement benefits |
409 | 409 | ||||||
| Accrued warranty |
8,657 | 8,742 | ||||||
| Customer deposits |
7,271 | 43,977 | ||||||
| Other current liabilities |
6,869 | 4,725 | ||||||
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| Total current liabilities |
93,224 | 98,325 | ||||||
| Accrued pension costs |
6,847 | 7,210 | ||||||
| Accrued postretirement benefits, less current portion |
74,799 | 73,474 | ||||||
| Deferred income – state incentives, long-term |
3,855 | — | ||||||
| Accrued taxes and other long-term liabilities |
11,083 | 7,548 | ||||||
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| Total liabilities |
189,808 | 186,557 | ||||||
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| Stockholders’ equity |
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| Preferred stock |
— | — | ||||||
| Common stock |
127 | 127 | ||||||
| Additional paid in capital |
92,895 | 100,303 | ||||||
| Treasury stock, at cost |
(17,535 | ) | (29,971 | ) | ||||
| Accumulated other comprehensive loss |
(23,669 | ) | (24,017 | ) | ||||
| Retained earnings |
155,376 | 152,253 | ||||||
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| Total stockholders’ equity |
207,194 | 198,695 | ||||||
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| Total liabilities and stockholders’ equity |
$ | 397,002 | $ | 385,252 | ||||
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FreightCar America, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
| Three Months Ended June 30, |
Six Months Ended June 30, |
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| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| (In thousands, except for share and per share data) | ||||||||||||||||
| Revenues |
$ | 235,637 | $ | 139,688 | $ | 328,441 | $ | 195,774 | ||||||||
| Cost of sales |
213,831 | 128,634 | 302,082 | 187,872 | ||||||||||||
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| Gross profit |
21,806 | 11,054 | 26,359 | 7,902 | ||||||||||||
| Selling, general and administrative expenses |
10,924 | 8,678 | 19,767 | 17,081 | ||||||||||||
| Gain on sale of railcars available for lease |
— | (4 | ) | (1,187 | ) | (18 | ) | |||||||||
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| Operating income (loss) |
10,882 | 2,380 | 7,779 | (9,161 | ) | |||||||||||
| Interest expense and deferred financing costs |
(58 | ) | (284 | ) | (128 | ) | (570 | ) | ||||||||
| Other income |
31 | 13 | 83 | 41 | ||||||||||||
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| Income (loss) before income taxes |
10,855 | 2,109 | 7,734 | (9,690 | ) | |||||||||||
| Income tax provision (benefit) |
3,458 | 494 | 2,410 | (4,356 | ) | |||||||||||
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| Net income (loss) |
$ | 7,397 | $ | 1,615 | $ | 5,324 | $ | (5,334 | ) | |||||||
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| Net income (loss) per common share – basic |
$ | 0.60 | $ | 0.13 | $ | 0.44 | $ | (0.44 | ) | |||||||
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| Net income (loss) per common share – diluted |
$ | 0.60 | $ | 0.13 | $ | 0.43 | $ | (0.44 | ) | |||||||
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| Weighted average common shares outstanding - basic |
12,195,683 | 11,999,750 | 12,108,636 | 11,994,667 | ||||||||||||
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| Weighted average common shares outstanding - diluted |
12,244,468 | 12,091,052 | 12,190,154 | 11,994,667 | ||||||||||||
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| Dividends declared per common share |
$ | 0.09 | $ | 0.06 | $ | 0.18 | $ | 0.12 | ||||||||
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FreightCar America, Inc.
Condensed Segment Data
(Unaudited)
| Three Months Ended June 30, |
Six Months Ended June 30, |
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| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| (In thousands) | ||||||||||||||||
| Revenues: |
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| Manufacturing |
$ | 227,016 | $ | 128,756 | $ | 312,113 | $ | 176,758 | ||||||||
| Services |
8,621 | 10,932 | 16,328 | 19,016 | ||||||||||||
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| Consolidated revenues |
$ | 235,637 | $ | 139,688 | $ | 328,441 | $ | 195,774 | ||||||||
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| Operating Income (Loss): |
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| Manufacturing |
$ | 17,235 | $ | 7,433 | $ | 19,093 | $ | 2,399 | ||||||||
| Services |
1,485 | 984 | 2,688 | 644 | ||||||||||||
| Corporate |
(7,838 | ) | (6,037 | ) | (14,002 | ) | (12,204 | ) | ||||||||
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| Consolidated operating income (loss) |
$ | 10,882 | $ | 2,380 | $ | 7,779 | $ | (9,161 | ) | |||||||
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FreightCar America, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Six Months Ended June 30, |
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| 2015 | 2014 | |||||||
| (In thousands) | ||||||||
| Cash flows from operating activities |
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| Net income (loss) |
$ | 5,324 | $ | (5,334 | ) | |||
| Adjustments to reconcile net income (loss) to net cash flows used in operating activities: |
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| Depreciation and amortization |
4,597 | 4,945 | ||||||
| Gain on sale of railcars available for lease |
(1,187 | ) | (18 | ) | ||||
| Deferred income taxes |
1,670 | (4,448 | ) | |||||
| Stock-based compensation expense recognized |
1,178 | 1,100 | ||||||
| Other non-cash items |
1,622 | 744 | ||||||
| Changes in operating assets and liabilities: |
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| Accounts receivable |
(33,832 | ) | (6,136 | ) | ||||
| Inventories |
(69,649 | ) | (16,135 | ) | ||||
| Inventory on lease |
116 | (8,721 | ) | |||||
| Other assets |
(3,644 | ) | (16,398 | ) | ||||
| Accounts and contractual payables |
30,576 | 22,063 | ||||||
| Customer deposits and other liabilities |
(33,007 | ) | (65,836 | ) | ||||
| Other changes in working capital |
(832 | ) | 2,861 | |||||
| Accrued pension costs and accrued postretirement benefits |
1,310 | 986 | ||||||
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| Net cash flows used in operating activities |
(95,758 | ) | (90,327 | ) | ||||
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| Cash flows from investing activities |
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| Restricted cash withdrawals |
— | 2,553 | ||||||
| Purchase of restricted certificates of deposit |
(2,165 | ) | — | |||||
| Maturity of restricted certificates of deposit |
295 | — | ||||||
| Purchase of securities held to maturity |
(17,997 | ) | (32,989 | ) | ||||
| Proceeds from maturity of securities |
24,004 | 24,002 | ||||||
| Proceeds from sale of property, plant and equipment and railcars available for lease |
7,651 | 50 | ||||||
| Purchases of property, plant and equipment |
(10,163 | ) | (5,645 | ) | ||||
| State incentives received |
4,907 | — | ||||||
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| Net cash flows provided by (used in) investing activities |
6,532 | (12,029 | ) | |||||
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| Cash flows from financing activities |
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| Stock option exercise |
4,885 | 126 | ||||||
| Employee stock settlement |
(1,048 | ) | (217 | ) | ||||
| Excess tax benefit from stock-based compensation |
13 | — | ||||||
| Cash dividends paid to stockholders |
(2,201 | ) | (1,447 | ) | ||||
| Reduction in customer advance for production of leased railcars |
— | (690 | ) | |||||
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| Net cash flows provided by (used in) financing activities |
1,649 | (2,228 | ) | |||||
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| Net decrease in cash and cash equivalents |
(87,577 | ) | (104,584 | ) | ||||
| Cash and cash equivalents at beginning of period |
113,532 | 145,506 | ||||||
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| Cash and cash equivalents at end of period |
$ | 25,955 | $ | 40,922 | ||||
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