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8-K - FORM 8-K - FreightCar America, Inc. | l42625e8vk.htm |
Exhibit 99.1
INVESTOR AND MEDIA CONTACT
|
Joe McNeely | |
TELEPHONE
|
(800) 458-2235 |
FOR IMMEDIATE RELEASE May 5, 2011
FreightCar America, Inc. Reports First Quarter 2011 Results
Chicago, IL, May 5, 2011 FreightCar America, Inc. (NASDAQ: RAIL) today reported results for
its first quarter ended March 31, 2011, with revenues of $72.2 million and a net loss of $1.3
million, or $0.11 per diluted share. For the fourth quarter of 2010, the Company reported revenues
of $51.0 million and a net loss of $3.5 million, or $0.29 per diluted share. For the first quarter
of 2010, the Company generated revenues of $19.5 million and a net loss of $3.3 million, or $0.28
per diluted share.
The Company delivered 875 railcars to customers in the first quarter of 2011, of which 858 were new
railcars. This compares to 694 new railcars delivered in the fourth quarter of 2010 and 321 new,
used and leased railcars delivered in the first quarter of 2010. There were 4,027 units ordered in
the first quarter of 2011, compared to 331 units ordered in the fourth quarter of 2010 and 3,656
units ordered in the first quarter of 2010. Total manufacturing backlog was 5,206 units at March
31, 2011 compared to 2,054 units at December 31, 2010 and 3,600 units at March 31, 2010.
Our sales and order volume for our Manufacturing segment for the first quarter of 2011 reflects
modestly improving market conditions and measured increases in demand for coal-carrying railcars.
While our backlog has improved quarter over quarter and sequentially and while our utilization of
manufacturing capacity has improved, we are still affected by ongoing competitive pricing pressures
and associated pressure on margins. We are pleased to have secured significant orders during the
first quarter, but it is still difficult to assess when more robust demand for coal cars will
return. Looking forward, we continue to see positive signs in the market. Coal loadings have
increased quarter over quarter and sequentially, coal stockpiles are down compared to the prior
year and railcars in storage continued to decline. We are hopeful that these trends will translate
into continued growth in demand for coal cars and believe that we are well positioned to
effectively meet our customers needs over the long term, said Ed Whalen, President and Chief
Executive Officer.
Whalen stated, Our Services segment provided a meaningful contribution to operating results in the
quarter, and we believe our strong backlog and management focus for this segment will serve to
enhance our overall operating results moving forward. Further, we continue to evaluate strategic
opportunities to expand our presence in the railcar services sector.
Whalen continued, For both our Manufacturing and Services segments, our strict focus on factors
within our control remains paramount: maximizing operational efficiency; proactive cost management;
and preservation of our financial strength and flexibility as we grow the business and manage
through the improving market. FreightCar Americas coal car market position and disciplined
approach to balance sheet management along with strategic initiatives will serve to enhance our
competitive position as improving market conditions ultimately lead to increased demand.
The Manufacturing segment, which includes new railcar manufacturing, used railcar sales, leasing
and major rebuilds, had revenues of $63.1 million for the first quarter of 2011 compared to $15.3
million for the first quarter of 2010. The increase in revenues reflect an increase in railcars
delivered and a favorable mix of higher-priced new versus used railcars. Operating Income for the
Manufacturing segment was $0.2 million, compared to a loss of $2.7 million in the first quarter of
2010. The improvement in Operating Income reflects the increased deliveries, improved utilization
of manufacturing facilities and continued cost controls.
Revenues for the Services segment, which includes repair and maintenance, railcar inspection, parts
sales and railcar fleet management services, were $9.1 million in the first quarter of 2011, which
were $4.9 million higher than the first quarter of 2010. The revenue increase reflects the
contribution from the FreightCar Rail Services business, acquired on November 1, 2010, partially
offset by lower parts sales. Services segment Operating Income was $1.1 million for the first
quarter of 2011, compared to $2.0 million for the first quarter of 2010. The positive impact of the
FreightCar Rail Services business was more than offset by lower parts sales volume and an
unfavorable parts sales mix.
Corporate costs were $5.1 million for the quarter ended March 31, 2011, which were flat with the
same quarter last year.
The Companys effective tax rate for the first quarter of 2011 was 66.7%, compared to 43.4% for the
fourth quarter of 2010. The favorable tax treatment of goodwill amortization provides additional
tax benefit to the Company, increasing its effective tax rate in periods of loss and reducing its
effective tax rate during periods of profitability.
Cash and cash equivalents and Restricted Cash as of March 31, 2011 was $52.9 million, compared to
$64.1 million as of December 31, 2010. The decrease reflects an increase in working capital,
pension and accrued postretirement benefit payments and funding of other operating activities. The
Companys $30.0 million revolving credit facility remains undrawn.
Railcars under lease totaled $64.9 million at the end of the first quarter of 2011 compared to
$65.4 million at the end of the fourth quarter of 2010 and $65.9 million at the end of the first
quarter of 2010.
The Company will host a conference call on Thursday, May 5, 2011 at 11:00 a.m. (Eastern Daylight
Time) to discuss the Companys first quarter financial results. To participate in the conference
call, please dial (888) 423-3274, confirmation #201921. 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:
http://205.144.147.162/cgi-bin/confCast
Conference ID#: 201921
If you need technical assistance, call the toll-free AT&T ConferenceCasting 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 call. An audio replay of the conference call
will be available beginning at 1:00 p.m. (Eastern Daylight Time) on May 5, 2011 until 11:59 p.m.
(Eastern Daylight Time) on June 5, 2011. To access the replay, please dial (800) 475-6701. The
replay pass code is 201921. An audio replay of the call will be available on the Companys website
within two days following the earnings call.
* * * * *
FreightCar America, Inc. manufactures railroad freight cars, with particular expertise in
coal-carrying railcars, supplies railcar parts, leases freight cars through its JAIX Leasing
Company subsidiary, and provides railcar maintenance, repairs and management through its FreightCar
Rail Services, LLC subsidiary. In addition to coal cars, FreightCar America designs and builds
bulk commodity cars, flat cars, mill gondola cars, intermodal cars, coil steel cars and motor
vehicle carriers. It is headquartered in Chicago, Illinois and has facilities in the following
locations: Clinton, Indiana; Danville, Illinois; Grand Island, Nebraska; Hastings, Nebraska;
Johnstown, Pennsylvania; Lakewood, Colorado; 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 acceptance of customer 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)
Condensed Consolidated Balance Sheets
(Unaudited)
March 31, | December 31, | |||||||
2011 | 2010 | |||||||
(In thousands) | ||||||||
Assets |
||||||||
Current assets |
||||||||
Cash and cash equivalents |
$ | 50,567 | $ | 61,780 | ||||
Restricted cash |
2,304 | 2,322 | ||||||
Accounts receivable, net |
14,050 | 4,106 | ||||||
Inventories |
75,183 | 57,713 | ||||||
Assets held for sale |
6,686 | 6,686 | ||||||
Other current assets |
5,817 | 7,065 | ||||||
Deferred income taxes, net |
10,804 | 10,804 | ||||||
Total current assets |
165,411 | 150,476 | ||||||
Long-term inventory |
| 7,793 | ||||||
Property, plant and equipment, net |
39,111 | 40,503 | ||||||
Railcars on operating leases, net |
58,205 | 58,725 | ||||||
Goodwill |
22,052 | 22,052 | ||||||
Deferred income taxes, net |
28,724 | 26,203 | ||||||
Other long-term assets |
4,722 | 4,891 | ||||||
Total assets |
$ | 318,225 | $ | 310,643 | ||||
Liabilities and Stockholders Equity |
||||||||
Current liabilities |
||||||||
Account and contractual payables |
$ | 27,434 | $ | 12,882 | ||||
Accrued payroll and employee benefits |
3,470 | 4,129 | ||||||
Accrued postretirement benefits |
5,347 | 5,347 | ||||||
Accrued warranty |
7,085 | 7,932 | ||||||
Customer deposits |
2,821 | 3,894 | ||||||
Other current liabilities |
4,389 | 4,497 | ||||||
Total current liabilities |
50,546 | 38,681 | ||||||
Accrued pension costs |
12,420 | 15,689 | ||||||
Accrued postretirement benefits |
59,549 | 59,909 | ||||||
Other long-term liabilities |
3,727 | 3,784 | ||||||
Total liabilities |
126,242 | 118,063 | ||||||
Stockholders equity |
||||||||
Preferred stock |
| | ||||||
Common stock |
127 | 127 | ||||||
Additional paid in capital |
98,919 | 98,722 | ||||||
Treasury stock, at cost |
(36,201 | ) | (36,539 | ) | ||||
Accumulated other comprehensive loss |
(19,860 | ) | (20,000 | ) | ||||
Retained earnings |
148,984 | 150,274 | ||||||
Total FreightCar America stockholders equity |
191,969 | 192,584 | ||||||
Noncontrolling interest in JV |
14 | (4 | ) | |||||
Total stockholders equity |
191,983 | 192,580 | ||||||
Total liabilities and stockholders equity |
$ | 318,225 | $ | 310,643 | ||||
FreightCar America, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(Unaudited)
Three Months Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
(In thousands) | ||||||||
Revenues |
$ | 72,240 | $ | 19,530 | ||||
Cost of sales |
69,998 | 19,622 | ||||||
Gross profit (loss) |
2,242 | (92 | ) | |||||
Selling, general and administrative expenses |
5,997 | 5,742 | ||||||
Operating loss |
(3,755 | ) | (5,834 | ) | ||||
Interest expense, net |
(63 | ) | (136 | ) | ||||
Operating loss before income taxes |
(3,818 | ) | (5,970 | ) | ||||
Income tax benefit |
(2,546 | ) | (2,669 | ) | ||||
Net loss |
(1,272 | ) | (3,301 | ) | ||||
Less: Net income (loss) attributable to noncontrolling interest in JV |
18 | (7 | ) | |||||
Net loss attributable to FreightCar America |
$ | (1,290 | ) | $ | (3,294 | ) | ||
Net loss per common share attributable to FreightCar America basic |
$ | (0.11 | ) | $ | (0.28 | ) | ||
Net loss per common share attributable to FreightCar America diluted |
$ | (0.11 | ) | $ | (0.28 | ) | ||
Weighted
average common shares outstanding basic |
11,908,017 | 11,875,329 | ||||||
Weighted
average common shares outstanding diluted |
11,908,017 | 11,875,329 | ||||||
Dividends declared per common share |
$ | 0.00 | $ | 0.06 | ||||
FreightCar America, Inc.
Condensed Segment Data
(Unaudited)
Condensed Segment Data
(Unaudited)
Three Months Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
(In thousands) | ||||||||
Revenues: |
||||||||
Manufacturing |
$ | 63,173 | $ | 15,322 | ||||
Services |
9,067 | 4,208 | ||||||
Consolidated Total |
$ | 72,240 | $ | 19,530 | ||||
Operating Income (Loss): |
||||||||
Manufacturing |
$ | 219 | $ | (2,691 | ) | |||
Services |
1,092 | 1,956 | ||||||
Corporate |
(5,066 | ) | (5,099 | ) | ||||
Consolidated Total |
$ | (3,755 | ) | $ | (5,834 | ) | ||
FreightCar America, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
(In thousands) | ||||||||
Cash flows from operating activities |
||||||||
Net loss |
$ | (1,272 | ) | $ | (3,301 | ) | ||
Adjustments to reconcile net loss to net cash
flows (used in) provided by operating activities: |
||||||||
Depreciation and amortization |
2,125 | 1,624 | ||||||
Other non-cash items |
118 | (1,366 | ) | |||||
Deferred income taxes |
(2,605 | ) | (2,727 | ) | ||||
Compensation
expense under stock option and restricted share award agreements |
556 | 377 | ||||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
(9,766 | ) | (1,077 | ) | ||||
Inventories |
(9,800 | ) | 7,011 | |||||
Leased railcars held for sale |
| (5,647 | ) | |||||
Other current assets |
1,121 | (4,228 | ) | |||||
Account and contractual payables |
14,612 | (3,652 | ) | |||||
Accrued payroll and employee benefits |
(659 | ) | (4,320 | ) | ||||
Income taxes receivable |
271 | 920 | ||||||
Accrued warranty |
(847 | ) | (454 | ) | ||||
Customer deposits and other current liabilities |
(1,180 | ) | 28,230 | |||||
Deferred revenue, non-current |
(117 | ) | (120 | ) | ||||
Accrued pension costs and accrued postretirement benefits |
(3,489 | ) | (270 | ) | ||||
Net cash flows (used in) provided by operating activities |
(10,932 | ) | 11,000 | |||||
Cash flows from investing activities |
||||||||
Restricted cash deposits |
| (3,622 | ) | |||||
Restricted cash withdrawals |
18 | | ||||||
Proceeds from sale of railcars available for lease |
73 | | ||||||
Purchase price adjustment for business acquired |
(166 | ) | | |||||
Purchases of property, plant and equipment |
(185 | ) | (406 | ) | ||||
Net cash flows used in investing activities |
(260 | ) | (4,028 | ) | ||||
Cash flows from financing activities |
||||||||
Employee restricted stock settlement |
(21 | ) | (191 | ) | ||||
Cash dividends paid to stockholders |
| (716 | ) | |||||
Net cash flows used in financing activities |
(21 | ) | (907 | ) | ||||
Net (decrease) increase in cash and cash equivalents |
(11,213 | ) | 6,065 | |||||
Cash and cash equivalents at beginning of period |
61,780 | 98,015 | ||||||
Cash and cash equivalents at end of period |
$ | 50,567 | $ | 104,080 | ||||