FreightCar America, Inc. (NASDAQ: RAIL) today reported results for the fourth quarter ended December 31, 2012, with revenues of $116.6 million and a net loss of $1.0 million, or $(0.08) per diluted share. For the same quarter in 2011, the Company reported revenues of $187.1 million and net income of $8.5 million, or $0.71 per diluted share. Revenues were $160.6 million and net income was $4.8 million, or $0.40 per diluted share, in the third quarter of last year.
“2012 was a good year for FreightCar despite the fact that fourth quarter results were impacted by a decrease in coal car demand and product line change-over costs at both our manufacturing plants,” said Ed Whalen, President and Chief Executive Officer. “As we look forward, 2013 will be a challenging year for our traditional coal car business, but the long term need to replace the Eastern coal car fleet remains. In the near term, we will focus closely on the factors within our control, including improving production efficiency, improving the results of our services business and controlling costs throughout the Company. I am encouraged by the prospects for our non-coal railcar products and the value that our new Shoals facility will bring to our bottom line when operational,” Whalen concluded.
FOURTH QUARTER RESULTS
In line with Company’s expectations, deliveries decreased to 1,308 railcars in the fourth quarter of 2012, which included 528 new railcars and 780 rebuilt railcars. This compares to 2,489 railcars delivered in the fourth quarter of 2011 and 1,618 railcars delivered in the third quarter of 2012. There were 473 units ordered in the fourth quarter of 2012. This compares to 4,481 units ordered in the fourth quarter of 2011 and 225 units ordered in the third quarter of 2012. Total manufacturing backlog was 2,881 units at December 31, 2012, compared to 8,303 units at December 31, 2011 and 3,716 units at September 30, 2012.
The Manufacturing segment had revenues of $109.3 million in the fourth quarter of 2012, compared to $179.2 million in the fourth quarter of 2011 and $152.5 million in the third quarter of 2012. Operating income for the Manufacturing segment was $6.5 million in the fourth quarter of 2012, compared to $16.5 million in the fourth quarter of 2011 and $13.9 million in the third quarter of 2012.
Revenues for the Services segment were $7.3 million in the fourth quarter of 2012, compared to $7.8 million in the fourth quarter of 2011 and $8.1 million in the third quarter of 2012. Services segment operating income was $0.1 million in the fourth quarter of 2012, compared to $0.5 million in the fourth quarter of 2011 and $0.6 million in the third quarter of 2012.
Corporate costs were $6.6 million for the quarter ended December 31, 2012, compared to $7.6 million in the same quarter of 2011 and $6.6 million in the third quarter of 2012.
The Company’s income tax expense of $0.8 million for the fourth quarter of 2012 included a provision to adjust deferred tax balances due to enacted changes in certain states’ statutory tax rates and to reflect a reduction of the blended effective state rate.
Cash, cash equivalents, marketable securities and restricted cash as of December 31, 2012 increased to $155.2 million from $144.2 million as of September 30, 2012. The Company’s $30.0 million revolving credit facility remains undrawn.
Railcars under lease totaled $43.4 million at the end of the fourth quarter of 2012, compared to $51.0 million at the end of the third quarter of 2012. The decrease in railcars under lease reflects sales of leased railcars.
FULL YEAR RESULTS
Revenues for the fiscal year ended December 31, 2012 were $677.4 million compared to $487.0 million in 2011. Net income in 2012 was $19.1 million, or $1.60 per share, compared to net income of $4.9 million, or $0.41 per diluted share in 2011.
The Manufacturing segment revenues increased to $644.0 million in 2012 from $453.1 million in 2011. The increase in revenues reflects higher railcar deliveries and higher average revenue per car. Operating income in 2012 for the Manufacturing segment was $58.3 million, compared to $25.9 million in 2011. Railcar deliveries totaled 8,325 (6,484 new, 441 used and 1,400 rebuilt) for 2012, up 35% from 6,188 railcars delivered in 2011 (5,824 sold and 364 leased).
The Services segment had revenues of $33.4 million, down slightly from $33.9 million in 2011. Operating income for the Services segment was $2.1 million in 2012 compared to $3.7 million in 2011, reflecting lower repair volumes and unfavorable work and parts sales mix.
Corporate costs of $27.2 million for 2012 were $3.1 million higher than in 2011 due to increased consulting related expenses.
The Company’s effective tax rate was 41.9% for the full year 2012. The effective tax rate for 2011 was 6.7%, which included a $1.7 million benefit resulting from a change in statutory tax rates and a change in estimated state tax apportionment on deferred tax balances.
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The Company will host a conference call and live webcast on Wednesday, February 20, 2013 at 11:00 a.m. (Eastern Standard Time) to discuss the Company’s fourth quarter 2012 financial results and lease of the Shoals facility, which was announced in a separate press release. To participate in the conference call, please dial (800) 230-1093, Confirmation Number 281877. 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#: 281877
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 Standard Time) on February 20, 2013 until 11:59 p.m. (Eastern Daylight Time) on March 20, 2013. To access the replay, please dial (800) 475-6701. The replay pass code is 281877. An audio replay of the call will be available on the Company’s website within two days following the earnings call.
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FreightCar America, Inc. manufactures railroad freight cars, 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. FreightCar America designs and builds coal cars, 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, Cherokee, Alabama, Danville, Illinois, Lakewood, Colorado, 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|
|December 31,||December 31,|
|Cash and cash equivalents||$||98,509||$||101,870|
|Accounts receivable, net||12,987||10,125|
|Other current assets||7,130||2,618|
|Deferred income taxes, net||12,079||10,982|
|Total current assets||261,225||200,287|
|Property, plant and equipment, net||39,343||35,984|
|Railcars available for lease, net||43,435||54,746|
|Deferred income taxes, net||18,940||28,150|
|Other long-term assets||3,494||4,168|
Liabilities and Stockholders’ Equity
|Account and contractual payables||$||33,453||$||28,110|
|Accrued payroll and employee benefits||6,548||5,611|
|Accrued postretirement benefits||4,978||5,174|
|Other current liabilities||7,885||5,044|
|Total current liabilities||96,576||69,698|
|Accrued pension costs||12,193||14,202|
|Accrued postretirement benefits, less current portion||64,322||59,887|
|Accrued taxes and other long-term liabilities||4,143||4,342|
|Additional paid in capital||100,402||100,204|
|Treasury stock, at cost||(34,488||)||(35,904||)|
|Accumulated other comprehensive loss||(26,139||)||(22,302||)|
|Total stockholders’ equity||211,331||197,334|
|Total liabilities and stockholders’ equity||$||388,565||$||345,463|
|FreightCar America, Inc.|
|Condensed Consolidated Statements of Operations|
Three Months Ended
|(In thousands, except share and per share data)|
|Cost of sales||108,459||170,438||612,463||455,040|
|Selling, general and administrative expense||8,171||8,487||32,736||28,660|
|Gain on sale of railcars available for lease||(13||)||(1,252||)||(989||)||(2,227||)|
|Operating income (loss)||(38||)||9,387||33,239||5,513|
|Interest expense, net||(88||)||(54||)||(373||)||(220||)|
|Income (loss) before income taxes||(126||)||9,333||32,866||5,293|
|Income tax provision (benefit)||833||851||13,771||354|
|Net income (loss)||(959||)||8,482||19,095||4,939|
|Less: Net (loss) income attributable to noncontrolling interest in JV||—||—||—||4|
|Net income (loss) attributable to FreightCar America||$||(959||)||$||8,482||$||19,095||$||4,935|
|Net income (loss) per common share attributable to FreightCar America – basic||$||(0.08||)||$||0.71||$||1.60||$||0.41|
|Net income (loss) per common share attributable to FreightCar America – diluted||$||(0.08||)||$||0.71||$||1.60||$||0.41|
|Weighted average common shares outstanding -|
|Weighted average common shares outstanding -|
|Dividends declared per common share||$||0.06||$||—||$||0.24||$||—|
|FreightCar America, Inc.|
|Condensed Segment Data|
Three Months Ended
|Operating Income (Loss):|
|Condensed Consolidated Statements of Cash Flows|
Twelve Months Ended
|Cash flows from operating activities|
Adjustments to reconcile net income to net cash flows provided by operating activities:
|Depreciation and amortization||8,398||8,821|
|Gain on sale of railcars available for lease||(989||)||(2,227||)|
|Other non-cash items||381||3|
|Change in deferred income taxes||10,420||(682||)|
|Stock-based compensation expense recognized||1,703||2,189|
|Changes in operating assets and liabilities:|
|Inventory on lease||—||—|
|Accounts and contractual payables||5,144||15,395|
|Customer deposits and other current liabilities||20,277||14,414|
|Other changes in working capital||(1,855||)||673|
|Accrued pension costs and accrued postretirement benefits||(1,482||)||(3,973||)|
|Net cash flows provided by operating activities||52,999||29,969|
|Cash flows from investing activities|
|Restricted cash deposits||(15,525||)||(1,115||)|
|Restricted cash withdrawals||2,640||1,622|
|Purchase of securities held to maturity||(41,978||)||—|
|Proceeds from sale of property, plant and equipment and railcars available for lease||10,526||
|Purchase price adjustment for business acquired||—||(166||)|
|Purchases of property, plant and equipment||(9,085||)||(1,830||)|
|Net cash flows (used in) provided by investing activities||(53,422||)||10,193|
|Cash flows from financing activities|
|Employee restricted stock settlement||(63||)||(88||)|
|Cash dividends paid to stockholders||(2,875||)||—|
|Excess tax benefit from stock-based compensation||—||16|
|Net cash flows used in financing activities||(2,938||)||(72||)|
|Net (decrease) increase in cash and cash equivalents||(3,361||)||40,090|
|Cash and cash equivalents at beginning of period||101,870||61,780|
|Cash and cash equivalents at end of period||$||98,509||$||101,870|