|
..........
|
|
..........
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|
MEDIA CONTACT
|
Kevin Bagby
|
|
TEL.
|
800-458-2235
|
|
FOR IMMEDIATE RELEASE
|
February 6, 2008
|
FreightCar America,
Inc. Reports Fourth Quarter and Full Year Results
FreightCar America, Inc. (NASDAQ:RAIL) today reported financial results for
the three months ended December 31, 2007. For the fourth quarter of 2007,
sales were $137.1 million and net loss was $16.6 million, or $1.42 per
diluted share. These results include special pre-tax charges of $37.2
million, primarily associated with the Company’s decision in December
2007 to end production activities at the Johnstown manufacturing facility, which
accounted for $30.8 million of the special charges. Also included in the
special charges were costs related to supply chain activities, and charges
for a customer claim. On an after tax basis, the special charges was $23.4
million or $2.00 per diluted share. Impact on cash flow related to plant
closure and impairment charges were approximately $2.1 million. Such measures
excluding special charges are non-GAAP financial measures. A reconciliation
of the Company’s net income to net income excluding special charges as
a non-GAAP financial measure is set forth in the supplemental disclosure
attached to this press release.
Chris Ragot, President and Chief Executive
Officer, stated, “In the current highly competitive market environment
and at this point in the business cycle, it is critical for us to take full
advantage of our lower-cost manufacturing facilities. Our Johnstown, Pennsylvania
manufacturing plant was a higher-cost facility than our other locations.
Although we entered into decisional bargaining with the union representing
our Johnstown employees regarding labor costs
at the Johnstown
facility, we and the union did not reach an agreement that would have allowed
us to continue to operate the facility in a cost-effective way. We will
continue to focus on strategic initiatives and cost control to remain
competitive despite a challenging railcar market. Regarding the other special
charges, we have improved our processes to insure the highest commitment to
quality and customer service to enhance shareholder value.”
“Orders for new railcars totaled 2,074 units in the fourth quarter
of 2007, compared with 1,262 units in the third quarter of 2007 and 2,199
units in the fourth quarter of 2006. The backlog of unfilled orders was 5,399
units at December 31, 2007 compared with 9,315 units at December 31, 2006 and
4,930 units at September 30, 2007.”
Mr. Ragot further stated, “While the
current North American railcar market has contracted, we believe that the
long-term fundamental trends in our industry remain strong. We continue to
focus on growth opportunities through strategic initiatives, both
internationally and domestically, to enhance shareholder value. As announced
earlier this month, the Company has entered into a joint venture with Titagarh Wagons Limited of Kolkata, India
to develop freight railcars for the Indian market. Under the terms of the
joint venture agreement, FreightCar America
and Titagarh will initially develop prototype cars
based on FreightCar America’s
designs and assess the market opportunity in India. Upon the successful
completion of the development and marketing phase the joint venture company
will begin railcar production in India in 2009 using manufacturing
methods that FreightCar America has developed.”
For the year ended December 31, 2007, sales were $817.0 million and net
income was $26.5 million, or $2.17 per diluted share. In comparison, for the
year ended December 31, 2006, the Company had sales of $1,444.8 million and
net income of $128.7 million, or $10.07 per diluted share. Results for the
year ended December 31, 2007 include the previously described pre-tax special
charges of $37.2 million, or $23.8 million or $1.96 per diluted share on an
after-tax basis.
The Company will host a conference call on Wednesday, February 6, 2008 at
11:00 a.m. (Eastern Standard Time) to discuss the Company's fourth quarter
financial results. To participate in the conference call, please dial
800-230-1096. Interested parties are asked to dial in approximately 10 to 15
minutes prior to the start time of the call.
An audio replay of the conference call will be available beginning at 1:00
p.m. (Eastern Standard Time) on Wednesday, February 6, 2008 until 11:59 p.m.
(Eastern Standard Time) on February 13, 2008. To access the replay, please
dial 800-475-6701. The replay pass code is 907039. 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 railroad freight cars, with
particular expertise in coal-carrying railcars. 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 manufacturing facilities in Danville, Illinois, Roanoke, Virginia and Johnstown,
Pennsylvania. 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. More
information about FreightCar America
is available on its website at www.freightcaramerica.com.
|
FreightCar America, Inc.
|
|
Condensed Consolidated Balance Sheets
|
|
(Unaudited)
|
|
|
|
|
|
|
December 31,
|
December 31,
|
|
|
|
2007
|
|
|
2006
|
|
|
|
(In thousands)
|
|
Assets
|
|
|
|
Current assets
|
|
|
|
Cash and cash equivalents
|
$
|
197,042
|
|
$
|
212,026
|
|
|
Accounts receivable, net
|
|
13,068
|
|
|
11,369
|
|
|
Inventories
|
|
49,845
|
|
|
106,643
|
|
|
Other current assets
|
|
7,223
|
|
|
5,045
|
|
|
Deferred income taxes
|
|
13,519
|
|
|
8,462
|
|
|
Total current assets
|
|
280,697
|
|
|
343,545
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
26,921
|
|
|
25,905
|
|
|
Goodwill
|
|
21,521
|
|
|
21,521
|
|
|
Deferred income taxes
|
|
21,035
|
|
|
22,955
|
|
|
Other long-term assets
|
|
5,710
|
|
|
6,055
|
|
|
Total assets
|
$
|
355,884
|
|
$
|
419,981
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
Current liabilities
|
|
|
|
Accounts payable
|
$
|
39,525
|
|
$
|
103,038
|
|
|
Accrued payroll and employee benefits
|
|
18,508
|
|
|
16,600
|
|
|
Income taxes payable
|
|
—
|
|
|
9,816
|
|
|
Accrued warranty
|
|
13,021
|
|
|
12,051
|
|
|
Customer deposits
|
|
19,836
|
|
|
11,652
|
|
|
Other current liabilities
|
|
4,630
|
|
|
3,831
|
|
|
Total current liabilities
|
|
95,520
|
|
|
156,988
|
|
|
|
|
|
|
Accrued pension costs
|
|
10,685
|
|
|
9,576
|
|
|
Accrued postretirement benefits, less current portion
|
|
47,890
|
|
|
49,455
|
|
|
Other long-term liabilities
|
|
3,717
|
|
|
93
|
|
|
Total liabilities
|
|
157,812
|
|
|
216,112
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
Stockholders’ equity
|
|
|
|
Preferred stock
|
|
—
|
|
|
—
|
|
|
Common stock
|
|
127
|
|
|
127
|
|
|
Additional paid in capital
|
|
99,270
|
|
|
99,981
|
|
|
Treasury stock, at cost
|
|
(43,597
|
)
|
|
—
|
|
|
Accumulated other comprehensive loss
|
|
(9,857
|
)
|
|
(26,774
|
)
|
|
Retained earnings
|
|
152,129
|
|
|
130,535
|
|
|
Total stockholders’ equity
|
|
198,072
|
|
|
203,869
|
|
|
Total liabilities and stockholders’ equity
|
$
|
355,884
|
|
$
|
419,981
|
|
|
FreightCar America, Inc.
|
|
Condensed Consolidated Statements of Operations
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
|
2007
|
|
|
2006
|
|
|
|
2007
|
|
|
2006
|
|
|
|
(In thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
Sales
|
$
|
137,102
|
|
$
|
390,831
|
|
|
$
|
817,025
|
|
$
|
1,444,800
|
|
|
Cost of sales
|
|
121,962
|
|
|
329,324
|
|
|
|
713,661
|
|
|
1,211,349
|
|
|
Gross profit
|
|
15,140
|
|
|
61,507
|
|
|
|
103,364
|
|
|
233,451
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Before plant closure and impairment charges
(including non-cash stock-based compensation expense of $724, $456, $2,804
and $2,130, respectively)
|
|
12,379
|
|
|
9,277
|
|
|
|
38,914
|
|
|
34,390
|
|
|
Plant closure and impairment charges
|
|
30,836
|
|
|
—
|
|
|
|
30,836
|
|
|
—
|
|
|
Operating (expense) income
|
|
(28,075
|
)
|
|
52,230
|
|
|
|
33,614
|
|
|
199,061
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
(1,781
|
)
|
|
(2,208
|
)
|
|
|
(8,349
|
)
|
|
(5,860
|
)
|
|
Interest expense
|
|
68
|
|
|
90
|
|
|
|
420
|
|
|
352
|
|
|
Amortization of deferred financing costs
|
|
22
|
|
|
77
|
|
|
|
232
|
|
|
306
|
|
|
(Loss) Income before income taxes
|
|
(26,384
|
)
|
|
54,271
|
|
|
|
41,311
|
|
|
204,263
|
|
|
Income tax (benefit) provision
|
|
(9,766
|
)
|
|
20,306
|
|
|
|
14,843
|
|
|
75,530
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
$
|
(16,618
|
)
|
$
|
33,965
|
|
|
$
|
26,468
|
|
$
|
128,733
|
|
|
|
|
|
|
|
|
|
Net (loss) income per common share – basic
|
$
|
(1.42
|
)
|
$
|
2.69
|
|
|
$
|
2.18
|
|
$
|
10.23
|
|
|
|
|
|
|
|
|
|
Net (loss) income per common share – diluted
|
$
|
(1.42
|
)
|
$
|
2.65
|
|
|
$
|
2.17
|
|
$
|
10.07
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding -
basic
|
|
11,730,568
|
|
|
12,636,176
|
|
|
|
12,115,712
|
|
|
12,586,889
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding -
diluted
|
|
11,730,568
|
|
|
12,797,437
|
|
|
|
12,188,901
|
|
|
12,785,015
|
|
|
|
|
|
|
|
|
|
Dividends declared per common share
|
$
|
0.06
|
|
$
|
0.06
|
|
|
$
|
0.24
|
|
$
|
0.15
|
|
|
FreightCar America, Inc.
|
|
Condensed Consolidated Statements of Cash Flows
|
|
(Unaudited)
|
|
|
|
|
|
Year Ended
December 31,
|
|
|
|
2007
|
|
|
2006
|
|
|
|
(In thousands)
|
|
Cash flows from operating activities
|
|
|
|
Net income
|
$
|
26,468
|
|
$
|
128,733
|
|
|
Adjustments to reconcile net income to net cash
flows provided by operating activities:
|
|
|
|
Plant closure and impairment charges
|
|
30,836
|
|
|
—
|
|
|
Depreciation and amortization
|
|
3,910
|
|
|
5,442
|
|
|
Other non-cash items
|
|
2,160
|
|
|
259
|
|
|
Deferred income taxes
|
|
(11,996
|
)
|
|
2,568
|
|
|
Stock-based compensation expense
|
|
2,804
|
|
|
2,130
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
Accounts receivable
|
|
(1,699
|
)
|
|
(7,515
|
)
|
|
Inventories
|
|
54,875
|
|
|
(31,554
|
)
|
|
Other current assets
|
|
(312
|
)
|
|
(1,012
|
)
|
|
Accounts payable
|
|
(62,742
|
)
|
|
42,448
|
|
|
Accrued payroll and employee benefits
|
|
(2,004
|
)
|
|
3,414
|
|
|
Income tax payable/receivable
|
|
(11,837
|
)
|
|
5,581
|
|
|
Accrued warranty
|
|
970
|
|
|
4,173
|
|
|
Customer deposits and other current liabilities
|
|
8,978
|
|
|
11,614
|
|
|
Accrued pension costs and accrued postretirement
benefits
|
|
986
|
|
|
(12,125
|
)
|
|
Net cash flows provided by operating activities
|
|
41,397
|
|
|
154,156
|
|
|
Cash flows from investing activities
|
|
|
|
Proceeds from sale of property, plant and equipment
|
|
11
|
|
|
1,082
|
|
|
Purchases of property, plant and equipment
|
|
(6,073
|
)
|
|
(6,903
|
)
|
|
Net cash flows used in investing activities
|
|
(6,062
|
)
|
|
(5,821
|
)
|
|
Cash flows from financing activities
|
|
|
|
Payments on long-term debt
|
|
(60
|
)
|
|
(71
|
)
|
|
Deferred financing costs paid
|
|
(211
|
)
|
|
—
|
|
|
Stock repurchases
|
|
(50,000
|
)
|
|
—
|
|
|
Issuance of common stock, net of issuance costs
|
|
2,089
|
|
|
2,089
|
|
|
Excess tax benefit from stock-based compensation
|
|
800
|
|
|
1,831
|
|
|
Cash dividends paid to stockholders
|
|
(2,937
|
)
|
|
(1,895
|
)
|
|
Net cash flows (used in) provided by financing
activities
|
|
(50,319
|
)
|
|
1,954
|
|
|
|
|
|
|
Net (decrease) increase in cash and cash equivalents
|
|
(14,984
|
)
|
|
150,289
|
|
|
Cash and cash equivalents at beginning of year
|
|
212,026
|
|
|
61,737
|
|
|
Cash and cash equivalents at end of year
|
$
|
197,042
|
|
$
|
212,026
|
|
|
FreightCar America, Inc.
|
|
Supplemental Disclosure
|
|
|
|
|
|
|
Reconciliation of net income per common share
|
|
to adjusted earnings per share(1)
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
|
|
2007
|
|
|
2006
|
|
|
2007
|
|
|
2006
|
|
|
(In thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share – basic
|
$
|
(1.42
|
)
|
$
|
2.69
|
|
$
|
2.18
|
|
$
|
10.23
|
|
Net income per common share – diluted
|
$
|
(1.42
|
)
|
$
|
2.65
|
|
$
|
2.17
|
|
$
|
10.07
|
|
|
|
|
|
|
|
|
Net (loss) income
|
$
|
(16,618
|
)
|
$
|
33,965
|
|
$
|
26,468
|
|
$
|
128,733
|
|
|
|
|
|
|
|
|
Plant closure and impairment charges
|
|
30,836
|
|
|
—
|
|
|
30,836
|
|
|
—
|
|
Other special charges
|
|
6,354
|
|
|
—
|
|
|
6,354
|
|
|
—
|
|
Total special charges
|
& | |