Form 8-K
0001320854 False 0001320854 2021-03-24 2021-03-24 iso4217:USD xbrli:shares iso4217:USD xbrli:shares
 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________

FORM 8-K

_________________

CURRENT REPORT

Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  March 24, 2021

_______________________________

FREIGHTCAR AMERICA, INC.

(Exact name of registrant as specified in its charter)

_______________________________

Delaware 000-51237 25-1837219
(State or Other Jurisdiction of Incorporation) (Commission File Number) (I.R.S. Employer Identification No.)

125 S. Wacker Drive, Suite 1500

Chicago, Illinois 60606

(Address of Principal Executive Offices) (Zip Code)

(800) 458-2235

(Registrant's telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

_______________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, par value $0.01 per share RAIL Nasdaq Global Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 
 
Section 2 - Financial Information

Item 2.02. Results of Operations and Financial Condition.

On March 24, 2021, FreightCar America, Inc. issued a press release announcing its financial results for the fourth quarter and full year ended December 31, 2020. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information contained in Exhibit 99.1 is being furnished under Item 2.02 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Section 9 - Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit 99.1   Press release of FreightCar America, Inc., dated March 24, 2021.
     
Exhibit 104   Cover Page Interactive Data File (embedded within the Inline XBRL document).
 
 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

  FREIGHTCAR AMERICA, INC.
     
   
Date: March 24, 2021 By:  /s/ TERENCE R. ROGERS        
    Terence R. Rogers
    Vice President, Chief Financial Officer, Treasurer and Secretary
   
 
 

EXHIBIT INDEX 

Exhibit Number   Description
     
Exhibit 99.1   Press release of FreightCar America, Inc., dated March 24, 2021.
     
Exhibit 104   Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

EXHIBIT 99.1

FreightCar America, Inc. Reports Fourth Quarter and Full Year 2020 Results

Fourth quarter revenues up 35% year-over-year and 140% sequentially

Potential of new operating structure exemplified by positive gross margin in fourth quarter

CHICAGO, March 24, 2021 (GLOBE NEWSWIRE) -- FreightCar America, Inc. (NASDAQ: RAIL) today reported results for the fourth quarter and full year ended December 31, 2020.

Business Highlights        

“In spite of the ongoing pandemic which brought additional economic and operational challenges to our business, 2020 was a transformative year for FreightCar America. We moved our manufacturing footprint to Castaños and into the newest purpose-built railcar manufacturing facility in North America and began shipping product from there in the fourth quarter. We hired a highly experienced workforce and strengthened our balance sheet to provide both growth capital and a better overall financial foundation for the business,” said Jim Meyer, President and Chief Executive Officer of FreightCar America, Inc. “While there were a lot of moving parts in the fourth quarter, we delivered sequential and year-over-year improvement in revenues as well as positive gross margin during the period.”

Meyer concluded, “We believe that we are fundamentally transforming FreightCar America’s ability to compete and win, and are now preparing the business to pivot from restructuring to growing. Our customers are very pleased by the progress and are providing us with highly favorable feedback on the new facility and team. Lastly, even with the ongoing pandemic, we are seeing encouraging signs of stabilization in the market and possibly even the early stages of recovery. As a result, we believe we can more than double our total deliveries in 2021 and begin to scale the footprint for 2022 assuming conditions warrant. Towards that end, our Board of Directors recently approved the first expansion of the new facility, which includes a large fabrication shop and additional wheel and axle capability. We continue to believe that we have the right strategy, and the right collection of assets and talent, to return the business to long-term growth and prosperity.”

Fourth Quarter Results

Full Year 2020 Results

Fourth Quarter 2020 Conference Call & Webcast Information

The Company will host a conference call and live webcast on Wednesday, March 24, 2021 at 11:00 a.m. (Eastern Daylight Time) to discuss its fourth quarter and year end 2020 financial results. Investors, analysts, and members of the media interested in listening to the live presentation are encouraged to join a webcast of the call, available on the Company’s website at:

                 Event URL: http://public.viavid.com/index.php?id=143797

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. Interested parties may also participate in the call by dialing (877) 407-0789 or (201) 689-8562 and entering the passcode 13717108. 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 2:00 p.m. (Eastern Daylight Time) on Wednesday, March 24, 2021 until 12:00 a.m. (Eastern Daylight Time) on Wednesday, April 7, 2021. To access the replay, please dial (844) 512-2921 or (412) 317-6671. The replay pass code is 13717108. An audio replay of the call will be available on the Company’s website within two days following the earnings call.

About FreightCar America

FreightCar America, Inc. is a diversified manufacturer of railroad freight cars, that also supplies railcar parts and leases freight cars through its FreightCar America Leasing Company subsidiaries. FreightCar America designs and builds high-quality railcars, including open top hopper cars, covered hopper cars, intermodal and non-intermodal flat cars, mill gondola cars, coil steel cars, boxcars, coal cars, and also specializes in the conversion of railcars for repurposed use. It is headquartered in Chicago, Illinois and has facilities in the following locations: Castaños, Mexico; Johnstown, Pennsylvania; and Shanghai, People’s Republic of China. More information about FreightCar America is available on its website at www.freightcaramerica.com.

Forward-Looking Statements

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: risks relating to the potential financial and operational impacts of the COVID-19 pandemic; 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 other competitive factors. 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.

INVESTOR & MEDIA CONTACTLisa Fortuna or Joe Caminiti
E-MAIL[email protected]
TELEPHONE312-445-2870


FreightCar America, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)

(in thousands, except for share and per share data)     
  
  December 31, 2020   December 31, 2019 
Assets       
Current assets       
Cash, cash equivalents and restricted cash equivalents$54,047  $66,257 
Restricted certificates of deposit 182   3,769 
Accounts receivable, net of allowance for doubtful accounts of $1,235 and $91, respectively 13,883   6,991 
Inventories, net 38,831   25,092 
Assets held for sale 10,383   - 
Income tax receivable 27   535 
Prepaid expenses 3,625   7,035 
Total current assets 120,978   109,679 
Property, plant and equipment, net 19,642   38,564 
Railcars available for lease, net 20,933   38,900 
Right of use asset 18,152   56,507 
Other long-term assets 3,037   1,552 
Total assets$182,742  $245,202 
Liabilities and Stockholders’ Equity     
Current liabilities     
Accounts and contractual payables$18,654  $11,713 
Accrued payroll and other employee costs 2,505   1,389 
Reserve for workers' compensation 2,645   3,210 
Accrued warranty 5,216   8,388 
Customer deposits 4,351   5,123 
Deferred income state and local incentives, current 2,219   2,219 
Lease liability, current 11,635   14,960 
Current portion of long-term debt 17,605   - 
Other current liabilities 6,319   2,428 
Total current liabilities 71,149   49,430 
Long-term debt, net of current portion 37,668   10,200 
Warrant liability 12,730   - 
Accrued pension costs 7,046   6,510 
Deferred income state and local incentives, long-term 2,503   4,722 
Lease liability, long-term 18,549   53,766 
Other long-term liabilities 2,600   3,420 
Total liabilities 152,245   128,048 
Stockholders’ equity     
Preferred stock, $0.01 par value, 2,500,000 shares authorized (100,000 shares each designated as Series A
   voting and Series B non-voting, 0 shares issued and outstanding at December 31, 2020 and December
   31, 2019)		 -   - 
Common stock, $0.01 par value, 50,000,000 shares authorized, 15,861,406 and 12,731,678 shares issued at
   December 31, 2020 and December 31, 2019, respectively		 159   127 
Additional paid in capital 82,064   83,027 
Treasury stock, at cost, 327,577 and 44,855 shares at December 31, 2020 and December 31, 2019,
   respectively		 (1,344)  (989)
Accumulated other comprehensive loss (11,763)  (10,780)
  (Accumulated deficit) retained earnings (38,619)  45,824 
Total FreightCar America stockholders' equity 30,497   117,209 
Noncontrolling interest in JV -   (55)
Total stockholders' equity 30,497   117,154 
Total liabilities and stockholders’ equity$182,742  $245,202 


FreightCar America, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)

  Three Months Ended
December 31,		   Twelve Months Ended
December 31,		 
  2020   2019   2020   2019 
  (In thousands, except for share and per share data) 
                
Revenues$60,590  $44,938  $108,447  $229,958 
Cost of sales 55,066   53,003   121,949   244,258 
Gross margin (loss) 5,524   (8,065)  (13,502)  (14,300)
Selling, general and administrative expenses 8,710                  7,511   29,815   38,302 
Loss on sale of railcars available for lease -   2,028   -   7,266 
Impairment on leased railcars 18,951   -   18,951   - 
Gain on termination of postretirement benefit plan -   (6,637)  -   (6,637)
Restructuring and impairment charges (12,925)  (1,980)  18,325   22,371 
Operating loss (9,212)  (8,987)  (80,593)  (75,602)
Interest expense (1,554)  (235)  (2,225)  (609)
Loss on change in fair market value of warrant liability (3,657)  -   (3,657)  - 
Other income 58   93   576   858 
Loss before income taxes (14,365)  (9,129)  (85,899)  (75,353)
Income tax (benefit) provision 277   461   199   (115)
Net loss (14,642)  (9,590)  (86,098)  (75,238)
Less Net loss attributable to noncontrolling interest in JV (259)  (55)  (1,655)  (55)
        
Net loss attributable to FreightCar America$(14,383) $(9,535) $(84,443) $(75,183)
Net loss per common share attributable to FreightCar America- basic$(0.87) $(0.75) $(6.29) $(5.95)
Net loss per common share attributable to FreightCar America- diluted$   (0.87) $   (0.75) $(6.29) $(5.95)
Weighted average common shares outstanding - basic 16,508,200   12,359,478   13,432,428   12,352,142 
Weighted average common shares outstanding - diluted 16,508,200   12,359,478   13,432,428   12,352,142 
Dividends declared per common share$-  $-  $-  $- 


FreightCar America, Inc.
Segment Data
(Unaudited)

       
 Three Months Ended
December 31,		 Twelve Months Ended
December 31,
 2020 2019 2020 2019
 (In thousands) (In thousands)
Revenues:       
Manufacturing$58,048  $42,784  $98,706  $219,064 
Corporate and Other 2,542   2,154   9,741   10,894 
Consolidated Revenues$60,590  $44,938  $108,447  $229,958 
        
Operating (Loss) Income:       
Manufacturing$(2,097) $(10,057) $(59,031) $(53,501)
Corporate and Other (7,115)  1,070   (21,562)  (22,101)
Consolidated Operating (Loss) Income$(9,212) $(8,987) $(80,593) $(75,602)


FreightCar America, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)

       
(in thousands)  Year Ended December 31,
   2020   2019 
Cash flows from operating activities        
Net loss $(86,098) $(75,238)
Adjustments to reconcile net loss to net cash flows used in operating activities:      
Restructuring and impairment charges  18,325   22,371 
Depreciation and amortization  9,202   12,438 
Non-cash lease expense on right-of-use assets  7,063   10,485 
Recognition of deferred income from state and local incentives  (2,219)  (2,219)
Loss on change in fair market value for warrant liability  3,657   - 
Loss on sale of railcars available for lease  -   7,197 
Impairment on leased railcars  18,951   - 
Gain on termination of postretirement benefit plan  -   (6,637)
Deferred income taxes  136   176 
Stock-based compensation recognized  1,034   1,225 
Non-cash interest expense  1,023   225 
Other non-cash items, net  4,192   (1,200)
Changes in operating assets and liabilities, net of acquisitions:      
Accounts receivable  (6,892)  11,227 
Inventories  (17,942)  40,649 
Other assets  1,763   (2,127)
Accounts and contractual payables  3,975   (23,961)
Accrued payroll and employee benefits  (2,027)  (1,368)
Income taxes receivable/payable  991    155  
Accrued warranty  (3,172)  (921)
Lease liability  (11,553)  (17,602)
Other liabilities  1,040   6,201 
Accrued pension costs and accrued postretirement benefits  (354)  (55)
    Net cash flows used in operating activities  (58,905)  (18,979)
Cash flows from investing activities      
Purchase of restricted certificates of deposit  (4,219)  (4,981)
Maturity of restricted certificates of deposit  7,806   6,164 
Purchase of securities held to maturity  -   (1,986)
Proceeds from maturity of securities  -   20,025 
Purchase of property, plant and equipment  (9,849)  (5,573)
Proceeds from sale of property, plant and equipment and railcars available for lease  170   17,305 
    Net cash flows (used in) provided by investing activities  (6,092)  30,954 
Cash flows from financing activities      
Proceeds from issuance of long-term debt  50,000   10,200 
Borrowings on revolving line of credit  6,874   - 
Repayments on revolving line of credit  (95)  - 
Cash paid to acquire JV non-controlling interest  (172)  - 
Employee stock settlement  (9)  (59)
Deferred financing costs  (3,811)  (929)
    Net cash flows provided by financing activities  52,787   9,212 
Net (decrease) increase in cash and cash equivalents  (12,210)  21,187 
Cash, cash equivalents and restricted cash equivalents at beginning of year  66,257   45,070 
Cash, cash equivalents and restricted cash equivalents at end of year $54,047  $66,257 
Supplemental cash flow information      
Interest paid $421  $196 
Income tax refunds received, net of payments $938  $978 
Stock issued for acquisition $3,237  $- 


FreightCar America, Inc.
Reconciliation of income before taxes to EBITDA(1) and Adjusted EBITDA(2)
(Unaudited)

 Three Months Ended Twelve Months Ended 
 December 31, December 31, 
  2020    2019 
 2020  2019  
                
Loss before income taxes$(14,365) $(9,129) $(85,899) $(75,353)
Depreciation and amortization 1,248   2,951   9,202   12,438 
Interest expense, net 1,553   235   2,225   609 
EBITDA (11,564)  (5,943)  (74,472)  (62,306)
        
Change in fair value of warrant (a) 3,657   -   3,657   - 
Restructuring and impairment charges (b) (12,925)  (1,980)  18,325   22,371 
Impairment of leased railcars (c) 18,951   -   18,951   - 
Gain on OPEB settlement (d) -   (6,637)  -   (6,637)
Loss on railcars available for lease (e) -   2,028   -   7,266 
Alabama grant amortization (f) (555)  (555)  (2,219)  (2,219)
Transaction costs (g) 322   -   465   - 
Retention and success bonuses (h) 2,211   144   3,130   144 
Plant transition costs (i) 1,252   -   2,239   - 
Stock based compensation (j) 455   471   1,034   1,225 
Other income (58)  (93)  (576)  (858)
Adjusted EBITDA$1,746  $(12,565) $(29,466) $(41,014)


(1) EBITDA represents earnings before interest, taxes, depreciation and amortization. We believe EBITDA is useful to investors in evaluating our operating performance compared to that of other companies in our industry. In addition, our management uses EBITDA to evaluate our operating performance. The calculation of EBITDA eliminates the effects of financing, income taxes and the accounting effects of capital spending. These items may vary for different companies for reasons unrelated to the overall performance of the company’s business. EBITDA is not a financial measure presented in accordance with U.S. GAAP. Accordingly, when analyzing our operating performance, investors should not consider EBITDA in isolation or as a substitute for net income, cash flows from operating activities or other statements of operations or statements of cash flow data prepared in accordance with U.S. GAAP. Our calculation of EBITDA is not necessarily comparable to that of other similar titled measures reported by other companies.
       
(2) Adjusted EBITDA represents EBITDA before the following charges:
       
 a) This adjustment removes the non-cash expense associated with the change in fair market value of warrant liability.
 b) The Company incurred certain restructuring costs related to severance and other costs related to its shutdown of the Shoals and Roanoke facilities during 2019 and 2020.
 c) During the fourth quarter of 2020, the Company recorded a non-cash impairment charge on its leased railcar fleet.
 d) During the fourth quarter of 2019, the Company recognized a non-cash gain on the settlement of its OPEB plan.
 e) During 2019, the Company recognized losses on its sale of railcars available for loss.
 f) The Company amortizes deferred grant income to cost of goods sold that represent a non-cash reduction to its gross margin (loss).
 g) The Company incurred certain costs in the fourth quarter of 2020 for nonrecurring professional services associated with the acquisition of its Castaños joint venture.
 h) During 2019, the Company implemented retention and success bonus programs for certain employees during its restructuring.
 i) During 2020, the Company implemented a program to shift production originally planned for its U.S. plants to its Castaños facility. This adjustment represents non-recurring costs associated with moving inventory and equipment to its Castaños facility.
 j) This adjustment removes the non-cash expense associated with the stock-based compensation.

We believe that Adjusted EBITDA is useful to investors evaluating our operating performance compared to that of other companies in our industry because it eliminates the impact of certain non-cash charges and other special items that affect the comparability of results in past quarters. Adjusted EBITDA is not a financial measure presented in accordance with U.S. GAAP. Accordingly, when analyzing our operating performance, investors should not consider Adjusted EBITDA in isolation or as a substitute for net income, cash flows from operating activities or other statements of operations or statements of cash flow data prepared in accordance with U.S. GAAP. Our calculation of Adjusted EBITDA is not necessarily comparable to that of other similarly titled measures reported by other companies.