RAIL 8-K
FreightCar America, Inc. (RAIL)
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): May 11, 2020
FREIGHTCAR AMERICA, INC.
(Exact Name of Registrant as Specified in Charter)
| Delaware | 000-51237 | 25-1837219 |
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
| 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 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). 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 May 11, 2020, FreightCar America, Inc. issued a press release announcing its financial results for the first quarter of 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 May 11, 2020.
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: May 11, 2020 | By: | /s/ Christopher J. Eppel |
| Christopher J. Eppel | ||
| Vice President, Finance, Chief Financial Officer and Treasurer | ||
EXHIBIT INDEX
| Exhibit Number | Description | |
| Exhibit 99.1 | Press release of FreightCar America, Inc., dated May 11, 2020. |
EXHIBIT 99.1
FreightCar America, Inc. Reports First Quarter 2020 Results
‘Back to Basics’ transformational actions and focus on protecting liquidity position Company to navigate pandemic
CHICAGO, May 11, 2020 (GLOBE NEWSWIRE) -- FreightCar America, Inc. (NASDAQ: RAIL) today reported results for the first quarter ended March 31, 2020.
Business Highlights
- First quarter revenue of $5.2 million on deliveries of 11 units
- First quarter net loss of $16.9 million, or $1.29 per diluted share, compared to a net loss of $1.12 per diluted share in the first quarter of 2019
- Total cash, cash equivalents, restricted cash equivalents, marketable securities and restricted certificates of deposit of $60.5 million at March 31, 2020
- First quarter backlog totaled 1,939 railcars, up from 1,650 railcars at year-end 2019, with an aggregate value of approximately $221 million
- Company continues to prioritize employee and community safety, and adhere to pre-established safety protocols
- Company is still planning to be in production at its Castaños, Mexico facility by the end of 2020
- Due to the increased uncertainty caused by the COVID-19 pandemic, the Company is withdrawing its guidance for fiscal 2020
“First and foremost, I would like to thank all of our employees for their commitment to health and safety in these unprecedented times. Safety has always been our number one priority, and I am extremely proud of the team’s ability to respond in this environment, while continuing to meet the needs of our customers,” said Jim Meyer, President and Chief Executive Officer of FreightCar America. “There are a number of unknowns as we move through the challenges of this pandemic, but there are several items that give our team comfort right now. The ‘Back to Basics’ transformational strategy we have adhered to over the last two-and-a-half years is proving critical in this environment. We significantly improved our cost structure and manufacturing footprint, both of which position our business to capitalize on market upcycles and, just as importantly, compete and survive during tough industry conditions.”
Meyer added, “We were obviously disappointed with our delivery figures for the quarter, a result of timing and weakness in the backlog, line startups in the quarter and lost production days at the end of the quarter due to COVID-19. However, our Shoals facility is back in production, and based on what we know today, we expect deliveries to ramp up as we move through the year. Our backlog increased sequentially, and we’ve seen no order cancellations to date. We understand we are in a very uncertain world, and we are planning for a number of possible scenarios as we move forward. We are also on track with the build-out of our Mexico facility, and our goal remains to be in production by the end of 2020. We expect industry conditions to be very competitive over the next few years, and being able to produce cars in Mexico will be more important than ever. Finally, we will continue to balance the needs of transforming our company and navigating difficult industry conditions in order to preserve capital and protect our franchise.”
First Quarter Results
- Consolidated revenues were $5.2 million in the first quarter of 2020 compared to $70.7 million in the same quarter of 2019. The Company delivered 11 railcars in the first quarter of 2020, compared to 641 railcars delivered in the first quarter of 2019.
- The Company had a backlog totaling 1,939 railcars on March 31, 2020, valued at approximately $221 million.
- Consolidated operating loss for the first quarter of 2020 was $17.1 million, compared to an operating loss of $14.5 million for the first quarter of 2019. This quarter’s operating loss included a $0.9 million restructuring charge related to the closure of the Roanoke facility.
- Net loss in the first quarter of 2020 was $16.9 million, or $1.29 per diluted share, compared to net loss of $14.0 million, or $1.12 per diluted share, in the first quarter of 2019.
First Quarter 2020 Conference Call & Webcast Information
The Company will host a conference call and live webcast on Monday, May 11, 2020 at 11:00 a.m. (Eastern Daylight Time) to discuss its first quarter 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:
https://attevent.webcasts.com/starthere.jsp?ei=1316290&tp_key=c25bd24d9c
Interested parties may also participate in the call by dialing (877) 692-8957, and using confirmation number 8606324. Please dial in approximately 10 to 15 minutes prior to the start time of the call to ensure your participation. An audio replay of the conference call will be available beginning at 2:00 p.m. (Eastern Daylight Time) on May 11, 2020 until 12:00 a.m. (Eastern Daylight Time) on June 12, 2020. To access the replay, please dial (866) 207-1041 or (402) 970-0847. The replay pass code is 8676330. 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. manufactures a wide range of railroad freight cars, supplies railcar parts and leases freight cars through its FreightCar America Leasing Company subsidiaries. FreightCar America designs and builds high-quality railcars, including bulk commodity cars, covered hopper cars, intermodal and non-intermodal flat cars, mill gondola cars, coil steel cars, boxcars and coal cars. It is headquartered in Chicago, Illinois and has facilities in the following locations: Cherokee, Alabama; Grand Island, Nebraska; 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 Shoals facility, including the facility not meeting internal assumptions or expectations and unforeseen liabilities from Navistar; 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.
FreightCar America, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
| March 31, 2020 | December 31, 2019 | ||||||
| Assets | (in thousands, except for share and per share data) | ||||||
| Current assets | |||||||
| Cash, cash equivalents and restricted cash equivalents | $ | 60,484 | $ | 66,257 | |||
| Restricted certificates of deposit | - | 3,769 | |||||
| Accounts receivable, net of allowance for doubtful accounts of $161 and $91, respectively | 5,718 | 6,991 | |||||
| Inventories, net | 41,121 | 25,092 | |||||
| Income tax receivable | 1,022 | 535 | |||||
| Other current assets | 8,309 | 7,035 | |||||
| Total current assets | 116,654 | 109,679 | |||||
| Property, plant and equipment, net | 39,285 | 38,564 | |||||
| Railcars available for lease, net | 38,647 | 38,900 | |||||
| Right of use asset | 55,517 | 56,507 | |||||
| Other long-term assets | 999 | 1,552 | |||||
| Total assets | $ | 251,102 | $ | 245,202 | |||
| Liabilities and Stockholders’ Equity | |||||||
| Current liabilities | |||||||
| Accounts and contractual payables | $ | 19,653 | $ | 11,713 | |||
| Accrued payroll and other employee costs | 632 | 1,389 | |||||
| Reserve for workers' compensation | 3,274 | 3,210 | |||||
| Accrued warranty | 8,076 | 8,388 | |||||
| Customer deposits | 22,515 | 5,123 | |||||
| Deferred income state and local incentives, current | 2,219 | 2,219 | |||||
| Lease liability, current | 14,932 | 14,960 | |||||
| Other current liabilities | 3,275 | 2,428 | |||||
| Total current liabilities | 74,576 | 49,430 | |||||
| Long-term debt | 10,200 | 10,200 | |||||
| Accrued pension costs | 6,258 | 6,510 | |||||
| Deferred income state and local incentives, long-term | 4,167 | 4,722 | |||||
| Lease liability, long-term | 52,108 | 53,766 | |||||
| Other long-term liabilities | 3,443 | 3,420 | |||||
| Total liabilities | 150,752 | 128,048 | |||||
| Stockholders’ equity | |||||||
| Preferred stock | - | - | |||||
| Common stock | 133 | 127 | |||||
| Additional paid in capital | 83,374 | 83,027 | |||||
| Treasury stock, at cost | (1,124 | ) | (989 | ) | |||
| Accumulated other comprehensive loss | (10,639 | ) | (10,780 | ) | |||
| Retained earnings | 28,877 | 45,824 | |||||
| Total FreightCar America stockholders' equity | 100,621 | 117,209 | |||||
| Noncontrolling interest in JV | (271 | ) | (55 | ) | |||
| Total stockholders' equity | 100,350 | 117,154 | |||||
| Total liabilities and stockholders’ equity | $ | 251,102 | $ | 245,202 | |||
FreightCar America, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
| Three Months Ended March 31, | |||||||||
| 2020 | 2019 | ||||||||
| (in thousands, except for share and per share data) | |||||||||
| Revenues | $ | 5,197 | $ | 70,708 | |||||
| Cost of sales | 14,000 | 77,557 | |||||||
| Gross loss | (8,803 | ) | (6,849 | ) | |||||
| Selling, general and administrative expenses | 7,410 | 7,667 | |||||||
| Restructuring and impairment charges | 880 | - | |||||||
| Operating loss | (17,093 | ) | (14,516 | ) | |||||
| Interest expense and deferred financing costs | (296 | ) | (36 | ) | |||||
| Other income | 224 | 319 | |||||||
| Loss before income taxes | (17,165 | ) | (14,233 | ) | |||||
| Income tax benefit | (2 | ) | (201 | ) | |||||
| Net loss | (17,163 | ) | (14,032 | ) | |||||
| Less: Net loss attributable to noncontrolling interest in JV | (216 | ) | - | ||||||
| Net loss attributable to FreightCar America | $ | (16,947 | ) | $ | (14,032 | ) | |||
| Net loss per common share attributable to FreightCar America- basic and diluted | $ | (1.29 | ) | $ | (1.12 | ) | |||
| Weighted average common shares outstanding - basic and diluted | 12,366,880 | 12,337,013 | |||||||
FreightCar America, Inc.
Segment Data
(Unaudited)
| Three Months Ended | |||||||
| March 31, | |||||||
| 2020 | 2019 | ||||||
| Revenues: | |||||||
| Manufacturing | $ | 2,940 | $ | 67,595 | |||
| Corporate and Other | 2,257 | 3,113 | |||||
| Consolidated revenues | $ | 5,197 | $ | 70,708 | |||
| Operating (loss) income: | |||||||
| Manufacturing | $ | (11,800 | ) | $ | (9,637 | ) | |
| Corporate and Other | (5,293 | ) | (4,879 | ) | |||
| Consolidated operating loss | (17,093 | ) | (14,516 | ) | |||
FreightCar America, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Three Months Ended March 31, | ||||||||
| 2020 | 2019 | |||||||
| Cash flows from operating activities | (in thousands) | |||||||
| Net loss | $ | (17,163 | ) | $ | (14,032 | ) | ||
| Adjustments to reconcile net loss to net cash flows used in operating activities: | ||||||||
| Non-cash restructuring and impairment charges | 312 | - | ||||||
| Depreciation and amortization | 3,013 | 3,206 | ||||||
| Amortization expense - right-of-use leased assets | 990 | 3,202 | ||||||
| Recognition of deferred income from state and local incentives | (555 | ) | (554 | ) | ||||
| Stock-based compensation recognized | 227 | 689 | ||||||
| Other non-cash items, net | 1,868 | (736 | ) | |||||
| Changes in operating assets and liabilities, net of acquisitions: | ||||||||
| Accounts receivable | 1,273 | 8,928 | ||||||
| Inventories | (17,809 | ) | 12,591 | |||||
| Other assets | (1,273 | ) | (2,355 | ) | ||||
| Accounts and contractual payables | 7,521 | (4,516 | ) | |||||
| Accrued payroll and employee benefits | (654 | ) | 359 | |||||
| Income taxes receivable/payable | (8 | ) | (200 | ) | ||||
| Accrued warranty | (312 | ) | 1,736 | |||||
| Lease liability | (1,686 | ) | (5,037 | ) | ||||
| Customer deposits | 17,392 | (1,719 | ) | |||||
| Other liabilities | 1,051 | 259 | ||||||
| Accrued pension costs and accrued postretirement benefits | (214 | ) | (114 | ) | ||||
| Net cash flows (used in) provided by operating activities | (6,027 | ) | 1,707 | |||||
| Cash flows from investing activities | ||||||||
| Purchase of restricted certificates of deposit | - | (1,117 | ) | |||||
| Maturity of restricted certificates of deposit | 3,769 | 4,400 | ||||||
| Purchase of securities held to maturity | - | (1,986 | ) | |||||
| Proceeds from maturity of securities | - | 18,025 | ||||||
| Purchase of property, plant and equipment | (3,670 | ) | (760 | ) | ||||
| Proceeds from sale of property, plant and equipment and railcars available for lease | 164 | - | ||||||
| Net cash flows provided by investing activities | 263 | 18,562 | ||||||
| Cash flows from financing activities | ||||||||
| Employee stock settlement | (9 | ) | (59 | ) | ||||
| Deferred financing costs | - | (280 | ) | |||||
| Net cash flows used in financing activities | (9 | ) | (339 | ) | ||||
| Net (decrease) increase in cash and cash equivalents | (5,773 | ) | 19,930 | |||||
| Cash, cash equivalents and restricted cash equivalents at beginning of period | 66,257 | 45,070 | ||||||
| Cash, cash equivalents and restricted cash equivalents at end of period | $ | 60,484 | $ | 65,000 | ||||
| Supplemental cash flow information | ||||||||
| Interest paid | $ | 143 | $ | 15 | ||||
| Income tax refunds received | $ | - | $ | - | ||||
| Income tax paid | $ | - | $ | - | ||||
| INVESTOR & MEDIA CONTACT | Josh Littman or Chris Hodges |
| TELEPHONE | 312-445-2870 |