Highlights

• Third quarter revenue of $72.0 million on deliveries of 829 units compared to $113.5 million on 1,214 units in third quarter of prior year
• Third quarter net loss of $11.6 million, or $0.94 per diluted share, including $2.6 million in after-tax unusual expenses, or $0.21 per diluted share
• Total cash, cash equivalents, marketable securities and restricted cash of $127.3 million at September 30, 2017
• New orders for 920 railcars received during the quarter
• Backlog increased to 3,317 railcars at a value of approximately $291 million
• Full year 2017 delivery range increased 300 units to between 4,600 and 4,800 railcars
• Quarterly dividend suspended to increase financial flexibility and maintain a strong balance sheet

CHICAGO, Nov. 01, 2017 (GLOBE NEWSWIRE) --  FreightCar America, Inc. (NASDAQ:RAIL) today reported results for the third quarter ended September 30, 2017, with a net loss of $11.6 million, or $0.94 per diluted share, including after-tax charges of $2.6 million in unusual expenses described below, compared to net income of $0.1 million, or $0.00 per diluted share, in the same period last year.

“We are extremely disappointed with our third quarter results.  While the challenging market conditions adversely impacted pricing and contributed to lower quarterly deliveries, we also felt the full impact of the persistent manufacturing challenges at our Shoals facility,” said Jim Meyer, President and Chief Executive Officer. “We are fully engaged in addressing the ongoing manufacturing issues.  While it will take time, I am confident that we know what to do and in our ability to implement the changes required to address these issues.  We also remain focused on managing our balance sheet.  This focus has resulted in positive operating cash flow in 2017, $127 million in cash and marketable securities, and the ability to make future investments to enhance profitability and shareholder value.”

Financial Overview

Consolidated revenues were $72.0 million in the third quarter of 2017 compared to $113.5 million in the same quarter of 2016. The Company delivered 829 railcars in the third quarter of 2017, all of which were new railcars. This compares to 1,214 railcars delivered in the third quarter of 2016, all of which were new railcars. Orders in the third quarter of 2017 totaled 920 new railcars. The Company had a diversified backlog totaling 3,317 railcars at September 30, 2017, valued at approximately $291 million. Based upon current backlog and production schedules, the Company increased its full year 2017 delivery range to between 4,600 and 4,800 railcars.

Consolidated operating loss for the third quarter of 2017 was $18.6 million compared to an operating loss of $0.1 million for the third quarter of 2016. The consolidated operating loss for the third quarter of 2017 was negatively impacted by certain unusual pre-tax expenses, including a $2.9 million provision for a contingent liability, $1.2 million in severance and other costs associated with our change in our chief executive officer and $0.1 million in restructuring and impairment charges associated with our previously announced cost reduction plan.  Adjusted operating loss, which excludes the effect of these amounts, was $14.5 million for the third quarter of 2017 compared to adjusted operating income of $1.5 million, which excludes the effect of $1.5 million of restructuring and impairment charges related to our cost reduction plan, for the third quarter of 2016. Adjusted operating income (loss) is a non-GAAP financial measure. A reconciliation of adjusted operating income (loss) to operating income (loss), the most directly comparable GAAP measure, is provided in the attached supplemental disclosure.

Cash, cash equivalents, marketable securities, restricted cash and restricted certificates of deposit increased $28.6 million since December 31, 2016 to $127.3 million as of September 30, 2017. The increase is primarily attributable to the receipt of an $11.9 million income tax refund and reductions in working capital.

Suspension of Dividend

The Board of Directors approved the suspension of the Company’s quarterly dividend to its shareholders to maintain its strong balance sheet and financial flexibility.  The suspension of the quarterly dividend, which was previously $0.09 per share, is expected to result in additional liquidity of approximately $1.1 million per quarter. 

The Company will host a conference call and live webcast on Thursday, November 2, 2017 at 11:00 a.m. (Eastern Daylight Time) to discuss the Company’s third quarter 2017 financial results. To participate in the conference call, please dial (800) 230-1951, Confirmation Number 432281.  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#: 432281

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 November 2, 2017 until 11:59 p.m. (Eastern Standard Time) on December 2, 2017.  To access the replay, please dial (800) 475-6701.  The replay pass code is 432281.  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.

MEDIA CONTACT Matthew S. Kohnke
TELEPHONE (800) 458-2235

(1) Results for the nine months ended September 30, 2016 included a $14,306 gain on settlement of a postretirement benefit plan obligation, net of plaintiffs’ attorneys’ fees.

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 the following:

• For the third quarter of 2017, $0.1 million of restructuring and impairment charges related to the Company’s cost reduction plan, charges of $2.9 million related to a contingent liability and $1.2 million in severance and other costs associated with the change in our chief executive officer;
• For the third quarter of 2016, $1.5 million of restructuring and impairment charges related to the Company’s cost reduction plan; and
• For the second quarter of 2017, $0.4 million of restructuring and impairment charges related to the Company’s cost reduction plan.

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: