EX-99.1 2 l31365aexv99w1.htm EXHIBIT 99.1 Exhibit 99.1
 

Exhibit 99.1
     
INVESTOR AND MEDIA CONTACT
  Kevin Bagby
TELEPHONE
  (800) 458-2235
 
   
FOR IMMEDIATE RELEASE
  May 1, 2008
FreightCar America, Inc. Reports First Quarter 2008 Results
Chicago, IL, May 1, 2008 — FreightCar America, Inc. (NASDAQ: RAIL) today reported financial results for the three months ended March 31, 2008. For the first quarter of 2008, sales were $95.1 million and net income was $1.1 million, or $0.10 per diluted share. For the first quarter of 2007, the Company generated sales of $322.5 million and net income of $23.0 million, or $1.80 per diluted share.
“In addition to the broad economic headwinds that have impacted the overall economy, the decreasing volume levels and pricing pressure in our industry have had a significant impact on our financial results for the quarter,” said Chris Ragot, President and CEO. “The current operating environment further validates our decision to optimize the manufacturing footprint and flexible process engineering techniques, as well as to increase our cost reduction efforts across all levels of the organization. We remain confident that our strategy will prove successful over the long term as we continue to navigate through this difficult phase of our industry cycle.”
“Orders for new railcars totaled 2,396 units in the first quarter of 2008, compared with 2,074 units ordered in the fourth quarter of 2007 and 768 units ordered in the first quarter of 2007. The backlog of unfilled orders was 6,785 units at March 31, 2008, which consists of 6,508 new cars and 277 rebuild/refurbishment cars, compared with 5,399 units at December 31, 2007 and 6,006 units at March 31, 2007. We expect to see similar industry trends for the foreseeable future/remainder of this year.”
Mr. Ragot continued, “We have begun to explore opportunities in the leasing sector of our industry. During the quarter, we provided leases for customers which are classified as leased assets held for sale on the Balance Sheet. In addition, reflecting the cost increase for manufacturing materials, we have selectively forward purchased materials to defray the price increases. While these decisions affected our cash flows for the quarter, we believe that this is more than offset by our improved competitive positioning in the current environment.”
Mr. Ragot further stated, “In addition to our cost savings efforts, we continue to pursue several strategic growth initiatives. First, we are adapting to the evolving industry by diversifying our revenue streams, through new product offerings, such as the intermodal well car, as well as expansion of our activities into the refurbishment market. Second, our international expansion has been bolstered by our joint venture agreement with Titagarth Wagons in India and we expect to begin working with additional overseas partners in the coming years. As these endeavors unfold, we will look to build on their success and explore both domestic and international opportunities to expand the breadth of our business and our geographic presence. We believe that the strategic initiatives that we are implementing will ultimately drive the long-term success of the Company and ensure increased value for all of our stakeholders.”

 


 

The Company will host a conference call on Thursday, May 1, 2008 at 11:00 a.m. (Eastern Daylight Time) to discuss the Company’s first quarter financial results. To participate in the conference call, please dial (800) 398-9398. 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 Daylight Time) on May 1, 2008 until 11:59 p.m. (Eastern Daylight Time) on May 8, 2008. To access the replay, please dial (800) 475-6701. The replay pass code is 919482. 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)
                 
    March 31,   December 31,
    2008   2007
     
    (In thousands)
Assets
               
Current assets
               
Cash and cash equivalents
  $ 161,747     $ 197,042  
Accounts receivable, net
    6,295       13,068  
Inventories
    84,141       49,845  
Leased assets held for sale
    7,723        
Other current assets
    7,768       7,223  
Deferred income taxes
    10,863       13,520  
     
Total current assets
    278,537       280,698  
 
               
Property, plant and equipment, net
    27,292       26,921  
Goodwill
    21,521       21,521  
Deferred income taxes
    22,607       21,035  
Other long-term assets
    5,541       5,709  
     
 
               
Total assets
  $ 355,498     $ 355,884  
     
 
               
Liabilities and Stockholders’ Equity
               
Current liabilities
               
Accounts payable
  $ 60,851     $ 39,525  
Accrued payroll and employee benefits
    9,766       13,320  
Accrued postretirement benefits
    5,188       5,188  
Accrued warranty
    10,173       10,551  
Customer deposits
          19,836  
Other current liabilities
    8,222       7,100  
     
Total current liabilities
    94,200       95,520  
 
               
Accrued pension costs
    10,840       10,685  
Accrued postretirement benefits, less current portion
    47,836       47,890  
Other long-term liabilities
    3,700       3,717  
     
Total liabilities
    156,576       157,812  
     
 
               
Commitments and contingencies
               
 
               
Stockholders’ equity
               
Preferred stock
           
Common stock
    127       127  
Additional paid in capital
    98,268       99,270  
Treasury stock, at cost
    (41,630 )     (43,597 )
Accumulated other comprehensive loss
    (9,691 )     (9,857 )
Retained earnings
    151,848       152,129  
     
 
               
Total stockholders’ equity
    198,922       198,072  
     
 
               
Total liabilities and stockholders’ equity
  $ 355,648     $ 355,884  
     

 


 

FreightCar America, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
                 
    Three Months Ended
    March 31,
    2008   2007
     
    (In thousands, except share and per share data)
 
               
Sales
  $ 95,098     $ 322,451  
Cost of sales
    85,926       278,318  
     
Gross profit
    9,172       44,133  
 
               
Selling, general and administrative expense (including non-cash stock-based compensation expense of $964 and $668, respectively)
    8,586       10,286  
     
Operating income
    586       33,847  
 
               
Interest income
    (1,344 )     (2,409 )
Interest expense
    82       106  
Amortization of deferred financing costs
    20       77  
     
Income before income taxes
    1,828       36,073  
Income tax provision
    686       13,121  
     
 
               
Net income
  $ 1,142     $ 22,952  
     
 
               
Net income per common share — basic
  $ 0.10     $ 1.82  
     
 
               
Net income per common share — diluted
  $ 0.10     $ 1.80  
     
 
               
Weighted average common shares outstanding - basic
    11,739,799       12,597,791  
     
 
               
Weighted average common shares outstanding - diluted
    11,812,607       12,744,575  
     
 
               
Dividends declared per common share
  $ 0.12     $ 0.06  
     

 


 

FreightCar America, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
                 
    Three Months Ended  
    March 31,  
    2008     2007  
     
    (In thousands)  
Cash flows from operating activities
               
Net income
  $ 1,142     $ 22,952  
Adjustments to reconcile net income to net cash flows used in operating activities:
               
Depreciation and amortization
    993       868  
Other non-cash items
    (507 )     77  
Deferred income taxes
    1,146       558  
Compensation expense under stock option and restricted share award agreements
    964       668  
Changes in operating assets and liabilities:
               
Accounts receivable
    6,773       (56,306 )
Inventories
    (33,599 )     27,362  
Leased assets held for sale
    (7,723 )      
Other current assets
    15       (1,165 )
Accounts payable
    20,635       741  
Accrued payroll and employee benefits
    (3,554 )     (4,258 )
Income taxes receivable/payable
    (621 )     7,005  
Accrued warranty
    (378 )     747  
Customer deposits and other current liabilities
    (18,715 )     109  
Accrued pension costs and accrued postretirement benefits
    267       (71 )
     
Net cash flows used in operating activities
    (33,162 )     (713 )
     
 
               
Cash flows from investing activities
               
Purchases of property, plant and equipment
    (1,424 )     (2,621 )
Proceeds from sale of property, plant and equipment
    18        
     
Net cash flows used in investing activities
    (1,406 )     (2,621 )
     
 
               
Cash flows from financing activities
               
Payments on long-term debt
    (16 )     (16 )
Stock repurchases
          (23,457 )
Cash dividends paid to stockholders
    (711 )     (764 )
     
Net cash flows used in financing activities
    (727 )     (24,237 )
     
 
               
Net decrease in cash and cash equivalents
    (35,295 )     (27,571 )
Cash and cash equivalents at beginning of period
    197,042       212,026  
     
 
Cash and cash equivalents at end of period
  $ 161,747     $ 184,455