FreightCar America, Inc. (NASDAQ: RAIL) or (the “Company”), a
diversified manufacturer of railroad freight cars, today reported
results for the third quarter ended September 30, 2022.
Third Quarter 2022 Highlights
- Revenues of $85.7
million, up 47.1% year-over-year, with deliveries of 783 railcars,
up 55% year-over-year
- Gross margin of 5.3%
with gross profit of $4.6 million, compared to gross margin of 2.6%
with gross profit of $1.5 million in the third quarter of 2021
- Manufacturing
operating income of $3.1 million, compared to $163 thousand in the
third quarter of 2021
- Net loss of ($17.8)
million, or ($0.69) per share and adjusted net loss of ($5.4)
million, or ($0.21) per share, accounting for primarily non-cash
items including an $8.1 million pre-tax pension settlement
loss
- Adjusted EBITDA of
$1.6 million, compared to Adjusted EBITDA loss of ($3.5) million in
the third quarter of 2021
- Quarter-end backlog
totaled 2,529 railcars with an aggregate value of approximately
$276 million
- 2022 revenue outlook
reaffirmed at between $340 million and $360 million and deliveries
of between 3,000 and 3,200 railcars
Jim Meyer, President and Chief Executive Officer
of FreightCar America, commented, “FreightCar America delivered
another quarter of strong top-line growth while also producing
another record number of railcars at the Castaños facility. That
said, our financial results were muted by the combined impacts of
delivering lower margin orders accepted at the bottom of the cycle
and elevated freight costs. We expect margins to strengthen
starting in the fourth quarter as these orders are completed.”
Meyer continued, “While there is much more work
to accomplish, we continued to make solid progress on our strategic
and performance initiatives in Castaños. The new fabrication shop
started operating in the third quarter and our expanded wheel
mounting and axle machining facility achieved AAR certification
just after the close of the quarter, both of which will bring
meaningful efficiencies going forward. We continue to invest in the
business and work to position ourselves as a world class
manufacturer in Northern Mexico, anchored by the new purpose-built
facility and an exceptional workforce.”
Meyer concluded, “We remain confident in our
direction and look forward to the future benefits of a built-out
manufacturing campus combined with a healthier macroeconomic
environment and more normalized supply chains.”
Fiscal Year 2022 Outlook
- The Company has
reaffirmed its outlook for fiscal year 2022 as follows:
Fiscal Year 2022 |
Revenue |
Between $340 million and $360 million |
Railcar Deliveries |
Between 3,000 and 3,200 railcars |
Mike Riordan, Chief Financial Officer of FreightCar America,
added, “With our new footprint in Mexico, we have right sized our
business and improved our operating structure, which has allowed us
to meaningfully reduce our cost structure. Over the past year, we
have seen our production capability increase beyond our original
expectation and the team in Castaños capture the operational
efficiencies we envisioned. This has led to $7.2 million of
Adjusted EBITDA generated during the first nine months of 2022, a
$15.6 million improvement from the comparable 2021 period. As a
result of this strong performance, we are reaffirming our
previously stated 2022 outlook.”
Third Quarter 2022 Conference Call & Webcast
Information
The Company will host a conference call and live webcast on
Tuesday, November 8, 2022 at 11:00 a.m. (Eastern Time) to discuss
its third quarter 2022 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 at:
Event URL:
https://viavid.webcasts.com/starthere.jsp?ei=1576520&tp_key=59e5a87e0a
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 13733654. 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 Time) on Tuesday November
8, 2022, until 12:00 a.m. (Eastern Time) on Wednesday November 23,
2022. To access the replay, please dial (844) 512-2921 or (412)
317-6671. The replay passcode is 13733654. An archived version of
the webcast will also be available on the FreightCar America
Investor Relations website.
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 and coal cars, and also specializes
in the conversion of railcars for repurposed use. FreightCar
America 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
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; potential financial and operational impacts
of the COVID-19 pandemic; 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 CONTACT |
Lisa Fortuna or Stephen Poe |
E-MAIL |
RAIL@alpha-ir.com |
TELEPHONE |
312-445-2870 |
|
|
FreightCar America,
Inc.Condensed Consolidated Balance
Sheets(In thousands, except for share
data)(Unaudited)
|
|
September 30,2022 |
|
|
December 31,2021 |
|
Assets |
|
|
|
Current assets |
|
|
|
|
|
|
Cash, cash equivalents and restricted cash equivalents |
|
$ |
18,371 |
|
|
$ |
26,240 |
|
Accounts receivable, net |
|
|
12,174 |
|
|
|
9,571 |
|
VAT receivable |
|
|
5,047 |
|
|
|
31,136 |
|
Inventories, net |
|
|
84,218 |
|
|
|
56,012 |
|
Related party asset |
|
|
4,017 |
|
|
|
8,680 |
|
Prepaid expenses |
|
|
8,094 |
|
|
|
5,087 |
|
Total current assets |
|
|
131,921 |
|
|
|
136,726 |
|
Property, plant and equipment,
net |
|
|
21,137 |
|
|
|
18,236 |
|
Railcars available for lease,
net |
|
|
19,697 |
|
|
|
20,160 |
|
Right of use asset |
|
|
15,725 |
|
|
|
16,669 |
|
Other long-term assets |
|
|
4,571 |
|
|
|
8,873 |
|
Total assets |
|
$ |
193,051 |
|
|
$ |
200,664 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Accounts and contractual payables |
|
$ |
44,428 |
|
|
$ |
41,185 |
|
Related party accounts payable |
|
|
1,944 |
|
|
|
8,870 |
|
Accrued payroll and other employee costs |
|
|
3,448 |
|
|
|
2,912 |
|
Reserve for workers' compensation |
|
|
1,050 |
|
|
|
1,563 |
|
Accrued warranty |
|
|
3,129 |
|
|
|
2,533 |
|
Customer deposits |
|
|
— |
|
|
|
3,300 |
|
Deferred income state and local incentives, current |
|
|
— |
|
|
|
1,291 |
|
Lease liability, current |
|
|
1,262 |
|
|
|
1,955 |
|
Other current liabilities |
|
|
9,028 |
|
|
|
5,711 |
|
Total current liabilities |
|
|
64,289 |
|
|
|
69,320 |
|
Long-term debt, net of current
portion |
|
|
91,597 |
|
|
|
79,484 |
|
Warrant liability |
|
|
35,772 |
|
|
|
32,514 |
|
Accrued pension costs |
|
|
— |
|
|
|
35 |
|
Deferred income state and
local incentives, long-term |
|
|
— |
|
|
|
1,216 |
|
Lease liability,
long-term |
|
|
15,871 |
|
|
|
16,617 |
|
Other long-term
liabilities |
|
|
4,370 |
|
|
|
3,134 |
|
Total liabilities |
|
|
211,899 |
|
|
|
202,320 |
|
Stockholders’ deficit |
|
|
|
|
|
|
Preferred stock |
|
— |
|
|
— |
|
Common stock |
|
|
201 |
|
|
|
190 |
|
Additional paid-in capital |
|
|
87,704 |
|
|
|
83,742 |
|
Accumulated other comprehensive loss |
|
|
2,427 |
|
|
|
(5,522 |
) |
Accumulated deficit |
|
|
(109,180 |
) |
|
|
(80,066 |
) |
Total stockholders'
deficit |
|
|
(18,848 |
) |
|
|
(1,656 |
) |
Total liabilities and
stockholders’ deficit |
|
$ |
193,051 |
|
|
$ |
200,664 |
|
FreightCar America, Inc.
Condensed Consolidated Statements of
Operations(In thousands, except for share and per
share data)(Unaudited)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
|
|
|
Revenues |
|
$ |
85,743 |
|
|
$ |
58,307 |
|
|
$ |
235,765 |
|
|
$ |
128,031 |
|
Cost of sales |
|
|
81,189 |
|
|
|
56,769 |
|
|
|
214,564 |
|
|
|
123,180 |
|
Gross profit |
|
|
4,554 |
|
|
|
1,538 |
|
|
|
21,201 |
|
|
|
4,851 |
|
Selling, general and
administrative expenses |
|
|
7,112 |
|
|
|
5,701 |
|
|
|
21,878 |
|
|
|
21,146 |
|
Loss on pension
settlement |
|
|
8,105 |
|
|
|
— |
|
|
|
8,105 |
|
|
|
— |
|
Restructuring and impairment
charges |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6,530 |
|
Operating loss |
|
|
(10,663 |
) |
|
|
(4,163 |
) |
|
|
(8,782 |
) |
|
|
(22,825 |
) |
Interest expense |
|
|
(6,087 |
) |
|
|
(3,562 |
) |
|
|
(17,549 |
) |
|
|
(9,276 |
) |
Loss on change in fair market
value of warrant liability |
|
|
(1,274 |
) |
|
|
(293 |
) |
|
|
(3,258 |
) |
|
|
(18,969 |
) |
Gain on extinguishment of
debt |
|
|
— |
|
|
|
10,129 |
|
|
|
— |
|
|
|
10,129 |
|
Other income |
|
|
190 |
|
|
|
145 |
|
|
|
2,347 |
|
|
|
490 |
|
Income (loss) before income
taxes |
|
|
(17,834 |
) |
|
|
2,256 |
|
|
|
(27,242 |
) |
|
|
(40,451 |
) |
Income tax provision
(benefit) |
|
|
(28 |
) |
|
|
1,525 |
|
|
|
1,872 |
|
|
|
2,161 |
|
Net income (loss) |
|
$ |
(17,806 |
) |
|
$ |
731 |
|
|
$ |
(29,114 |
) |
|
$ |
(42,612 |
) |
Net income (loss) per common
share- basic |
|
$ |
(0.69 |
) |
|
$ |
0.03 |
|
|
$ |
(1.19 |
) |
|
$ |
(2.11 |
) |
Net income (loss) per common
share - diluted |
|
$ |
(0.69 |
) |
|
$ |
0.03 |
|
|
$ |
(1.19 |
) |
|
$ |
(2.11 |
) |
Weighted average common shares
outstanding – basic |
|
|
25,718,414 |
|
|
|
20,485,438 |
|
|
|
24,470,659 |
|
|
|
20,225,671 |
|
Weighted average common shares
outstanding – diluted |
|
|
25,718,414 |
|
|
|
22,111,824 |
|
|
|
24,470,659 |
|
|
|
20,225,671 |
|
FreightCar America,
Inc.Segment Data(In
thousands)(Unaudited)
|
|
Three Months Ended |
|
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
|
September 30, |
|
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Manufacturing |
|
$ |
82,817 |
|
|
$ |
55,898 |
|
|
|
$ |
226,548 |
|
|
$ |
121,076 |
|
Corporate and Other |
|
|
2,926 |
|
|
|
2,409 |
|
|
|
|
9,217 |
|
|
|
6,955 |
|
Consolidated
revenues |
|
$ |
85,743 |
|
|
$ |
58,307 |
|
|
|
$ |
235,765 |
|
|
$ |
128,031 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Manufacturing |
|
$ |
3,054 |
|
|
$ |
163 |
|
|
|
$ |
16,470 |
|
|
$ |
(5,618 |
) |
Corporate and Other |
|
|
(13,717 |
) |
|
|
(4,326 |
) |
|
|
|
(25,252 |
) |
|
|
(17,207 |
) |
Consolidated operating
income (loss) |
|
$ |
(10,663 |
) |
|
|
(4,163 |
) |
|
|
|
(8,782 |
) |
|
|
(22,825 |
) |
FreightCar America, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)(Unaudited)
|
|
Nine Months Ended September 30, |
|
|
|
2022 |
|
|
2021 |
|
Cash flows from
operating activities |
|
(in thousands) |
|
|
|
|
|
Net loss |
|
$ |
(29,114 |
) |
|
$ |
(42,612 |
) |
Adjustments to reconcile net
loss to net cash flows used in operating activities: |
|
|
|
|
|
|
Restructuring and impairment charges |
|
|
— |
|
|
|
6,530 |
|
Depreciation and amortization |
|
|
3,110 |
|
|
|
3,304 |
|
Non-cash lease expense on right-of-use assets |
|
|
944 |
|
|
|
1,173 |
|
Recognition of deferred income from state and local incentives |
|
|
(2,507 |
) |
|
|
(1,665 |
) |
Loss on change in fair market value for warrant liability |
|
|
3,258 |
|
|
|
18,969 |
|
Loss on pension settlement |
|
|
8,105 |
|
|
|
- |
|
Stock-based compensation recognized |
|
|
2,307 |
|
|
|
2,829 |
|
Non-cash interest expense |
|
|
11,309 |
|
|
|
3,782 |
|
Gain on extinguishment of debt |
|
|
— |
|
|
|
(10,129 |
) |
Other non-cash items, net |
|
|
(9 |
) |
|
|
314 |
|
Changes in operating assets and liabilities, net of
acquisitions: |
|
|
|
|
|
|
Accounts receivable |
|
|
(2,603 |
) |
|
|
1,688 |
|
VAT receivable |
|
|
24,634 |
|
|
|
(25,622 |
) |
Inventories |
|
|
(30,110 |
) |
|
|
(4,276 |
) |
Other assets |
|
|
(3,741 |
) |
|
|
(1,682 |
) |
Related party asset, net |
|
|
(2,263 |
) |
|
|
(617 |
) |
Accounts and contractual payables |
|
|
4,386 |
|
|
|
1,502 |
|
Accrued payroll and employee benefits |
|
|
536 |
|
|
|
(302 |
) |
Income taxes payable |
|
|
737 |
|
|
|
1,111 |
|
Accrued warranty |
|
|
596 |
|
|
|
(2,619 |
) |
Lease liability |
|
|
(1,439 |
) |
|
|
(1,641 |
) |
Customer deposits |
|
|
(3,300 |
) |
|
|
(3,896 |
) |
Other liabilities |
|
|
1,798 |
|
|
|
(2,492 |
) |
Accrued pension costs and accrued postretirement benefits |
|
|
(219 |
) |
|
|
(607 |
) |
Net cash flows used in operating activities |
|
|
(13,585 |
) |
|
|
(56,958 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities |
|
|
|
|
|
|
Maturity of restricted
certificates of deposit |
|
|
— |
|
|
|
182 |
|
Purchase of property, plant
and equipment |
|
|
(3,380 |
) |
|
|
(1,983 |
) |
Proceeds from sale of
property, plant and equipment and railcars available for lease |
|
|
— |
|
|
|
433 |
|
Net cash flows used in investing activities |
|
|
(3,380 |
) |
|
|
(1,368 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities |
|
|
|
|
|
|
Proceeds from issuance of
long-term debt |
|
|
— |
|
|
|
16,000 |
|
Deferred financing costs |
|
|
— |
|
|
|
(1,517 |
) |
Borrowings on revolving line
of credit |
|
|
84,396 |
|
|
|
38,571 |
|
Repayments on revolving line
of credit |
|
|
(75,239 |
) |
|
|
(21,225 |
) |
Employee stock settlement |
|
|
(57 |
) |
|
|
(7 |
) |
Payment for stock appreciation
rights exercised |
|
|
(4 |
) |
|
|
(57 |
) |
Net cash flows provided by financing activities |
|
|
9,096 |
|
|
|
31,765 |
|
|
|
|
|
|
|
|
|
|
Net decrease in cash and cash
equivalents |
|
|
(7,869 |
) |
|
|
(26,561 |
) |
Cash, cash equivalents and
restricted cash equivalents at beginning of period |
|
|
26,240 |
|
|
|
54,047 |
|
Cash, cash equivalents and
restricted cash equivalents at end of period |
|
$ |
18,371 |
|
|
$ |
27,486 |
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow
information |
|
|
|
|
|
|
Interest paid |
|
$ |
6,240 |
|
|
$ |
4,575 |
|
Income tax refunds received,
net of payments |
|
$ |
— |
|
|
$ |
5 |
|
Non-cash
transactions |
|
|
|
|
|
|
Change in unpaid construction
in process |
|
$ |
2,168 |
|
|
$ |
68 |
|
Accrued PIK interest paid
through issuance of PIK Note |
|
$ |
1,093 |
|
|
$ |
915 |
|
Issuance of warrants |
|
$ |
8,560 |
|
|
$ |
4,958 |
|
Issuance of equity fee |
|
$ |
3,000 |
|
|
$ |
1,000 |
|
FreightCar America,
Inc.Reconciliation of income before taxes to
EBITDA(1) and
Adjusted EBITDA(2)(In
thousands)(Unaudited)
|
|
Three Months Ended September
30, |
|
|
Nine Months Ended September
30, |
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income
taxes |
$ |
(17,834 |
) |
$ |
2,256 |
|
|
$ |
(27,242 |
) |
$ |
(40,451 |
) |
Depreciation &
Amortization |
|
1,050 |
|
|
1,108 |
|
|
|
3,110 |
|
|
3,304 |
|
Interest Expense, net |
|
6,087 |
|
|
3,562 |
|
|
|
17,549 |
|
|
9,276 |
|
EBITDA |
|
(10,697 |
) |
|
6,926 |
|
|
|
(6,583 |
) |
|
(27,871 |
) |
|
|
|
|
|
|
|
|
|
|
Change in Fair Value of
Warrant (a) |
|
1,274 |
|
|
293 |
|
|
|
3,258 |
|
|
18,969 |
|
Restructuring and impairment
charges (b) |
|
- |
|
|
- |
|
|
|
- |
|
|
6,530 |
|
Gain on Debt Extinguishment
(c) |
|
- |
|
|
(10,129 |
) |
|
|
- |
|
|
(10,129 |
) |
Alabama Grant Amortization
(d) |
|
- |
|
|
(555 |
) |
|
|
(1,857 |
) |
|
(1,665 |
) |
Mexican Permanent VAT (e) |
|
908 |
|
|
- |
|
|
|
908 |
|
|
- |
|
Loss on Pension Settlement
(f) |
|
8,105 |
|
|
- |
|
|
|
8,105 |
|
|
- |
|
Transaction Costs (g) |
|
116 |
|
|
196 |
|
|
|
116 |
|
|
491 |
|
Startup Costs (h) |
|
949 |
|
|
- |
|
|
|
949 |
|
|
- |
|
Consulting Costs (i) |
|
226 |
|
|
- |
|
|
|
988 |
|
|
- |
|
Corporate Realignment (j) |
|
63 |
|
|
- |
|
|
|
1,323 |
|
|
- |
|
Legal Reserve (k) |
|
- |
|
|
- |
|
|
|
- |
|
|
500 |
|
Plant Transition Costs
(l) |
|
- |
|
|
- |
|
|
|
- |
|
|
2,386 |
|
Stock Based Compensation |
|
817 |
|
|
(133 |
) |
|
|
2,307 |
|
|
2,829 |
|
Other, net |
|
(190 |
) |
|
(145 |
) |
|
|
(2,347 |
) |
|
(490 |
) |
Adjusted EBITDA |
$ |
1,571 |
|
$ |
(3,547 |
) |
|
$ |
7,167 |
|
$ |
(8,450 |
) |
(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 (income) expense associated
with the change in fair market value of the Company’s warrant
liability. |
|
|
|
b) |
|
The Company incurred certain restructuring costs related to
severance and other costs related to its shut-down of the Shoals
and Roanoke facilities. |
|
|
|
c) |
|
The Company recorded a non-cash gain on extinguishment of its PPP
Loan in the third quarter of 2021. |
|
|
|
d) |
|
The Company amortizes deferred grant income to cost of goods sold
that represents a non-cash reduction to its gross margin
(loss). |
|
|
|
e) |
|
The Company transitioned to tolling manufacturing structure in the
third quarter of 2022 and as a result incurred permanent VAT
costs. |
|
|
|
f) |
|
The Company recorded a non-cash pre-tax pension settlement loss in
the third quarter of 2022. |
|
|
|
g) |
|
The Company incurred certain costs during 2021 and 2022 for
nonrecurring professional services associated with its financing
arrangements. |
|
|
|
h) |
|
The Company incurred certain costs during 2022 related to new
production lines. |
|
|
|
i) |
|
The Company incurred certain non-recurring consulting costs during
the fourth quarter of 2021 and first quarter of 2022. |
|
|
|
j) |
|
The Company incurred certain non-recurring corporate realignment
costs in 2022. |
|
|
|
k) |
|
During the first and fourth quarters of 2021, the Company
recognized charges related to a legal dispute. |
|
|
|
l) |
|
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 in 2021. |
|
|
|
|
|
|
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.
FreightCar America,
Inc.Reconciliation of Net income (loss) and
Adjusted Net income
(loss)(1)(In
thousands)(Unaudited)
|
|
Three Months Ended September
30, |
|
|
Nine Months Ended September
30, |
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
(17,806 |
) |
$ |
731 |
|
|
$ |
(29,114 |
) |
$ |
(42,612 |
) |
|
|
|
|
|
|
|
|
|
|
Change in Fair Value of
Warrant (a) |
|
1,274 |
|
|
293 |
|
|
|
3,258 |
|
|
18,969 |
|
Restructuring and impairment
charges (b) |
|
- |
|
|
- |
|
|
|
- |
|
|
6,530 |
|
Gain on Debt Extinguishment
(c) |
|
- |
|
|
(10,129 |
) |
|
|
- |
|
|
(10,129 |
) |
Alabama Grant Amortization
(d) |
|
- |
|
|
(555 |
) |
|
|
(1,857 |
) |
|
(1,665 |
) |
Mexican Permanent VAT (e) |
|
908 |
|
|
- |
|
|
|
908 |
|
|
- |
|
Loss on Pension Settlement
(f) |
|
8,105 |
|
|
- |
|
|
|
8,105 |
|
|
- |
|
Transaction Costs (g) |
|
116 |
|
|
196 |
|
|
|
116 |
|
|
491 |
|
Startup Costs (h) |
|
949 |
|
|
- |
|
|
|
949 |
|
|
- |
|
Consulting Costs (i) |
|
226 |
|
|
- |
|
|
|
988 |
|
|
- |
|
Corporate Realignment (j) |
|
63 |
|
|
- |
|
|
|
1,323 |
|
|
- |
|
Legal Reserve (k) |
|
- |
|
|
- |
|
|
|
- |
|
|
500 |
|
Plant Transition Costs
(l) |
|
- |
|
|
- |
|
|
|
- |
|
|
2,386 |
|
Stock Based Compensation |
|
817 |
|
|
(133 |
) |
|
|
2,307 |
|
|
2,829 |
|
Other, net |
|
(190 |
) |
|
(145 |
) |
|
|
(2,347 |
) |
|
(490 |
) |
Total non-GAAP
adjustments |
|
12,268 |
|
|
(10,473 |
) |
|
|
13,750 |
|
|
19,421 |
|
Income tax impact on non-GAAP
adjustments(m) |
|
104 |
|
|
- |
|
|
|
387 |
|
|
971 |
|
Adjusted Net loss |
$ |
(5,434 |
) |
$ |
(9,742 |
) |
|
$ |
(14,977 |
) |
$ |
(22,220 |
) |
(1) |
|
Adjusted net income (loss) represents net income (loss) before the
following charges: |
|
|
|
|
|
|
|
|
|
a) |
|
This adjustment removes the non-cash (income) expense associated
with the change in fair market value of the Company’s warrant
liability. |
|
|
|
b) |
|
The Company incurred certain restructuring costs related to
severance and other costs related to its shut-down of the Shoals
and Roanoke facilities. |
|
|
|
c) |
|
The Company recorded a non-cash gain on extinguishment of its PPP
Loan in the third quarter of 2021. |
|
|
|
d) |
|
The Company amortizes deferred grant income to cost of goods sold
that represents a non-cash reduction to its gross margin
(loss). |
|
|
|
e) |
|
The Company transitioned to tolling manufacturing structure in the
third quarter of 2022 and as a result incurred permanent VAT
costs. |
|
|
|
f) |
|
The Company recorded a non-cash pre-tax pension settlement loss in
the third quarter of 2022. |
|
|
|
g) |
|
The Company incurred certain costs during 2021 and 2022 for
nonrecurring professional services associated with its financing
arrangements. |
|
|
|
h) |
|
The Company incurred certain costs during 2022 related to new
production lines. |
|
|
|
i) |
|
The Company incurred certain non-recurring consulting costs during
the fourth quarter of 2021 and first quarter of 2022. |
|
|
|
j) |
|
The Company incurred certain non-recurring corporate realignment
costs in 2022. |
|
|
|
k) |
|
During the first and fourth quarters of 2021, the Company
recognized charges related to a legal dispute. |
|
|
|
l) |
|
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 in 2021. |
|
|
|
m) |
|
Income tax impact on non-GAAP adjustments per share represents the
tax impact of adjustments specific to Mexico using the applicable
jurisdictional tax rate. Given the Company’s US based NOLs and
Valuation Allowances result in an effective tax rate of about % for
the US, all US based adjustments above are not tax affected. |
|
|
|
|
|
|
We believe that Adjusted net income (loss) 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 net income
(loss) is not a financial measure presented in accordance with U.S.
GAAP. Accordingly, when analyzing our operating performance,
investors should not consider Adjusted net income (loss) 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 net income (loss) is not necessarily
comparable to that of other similarly titled measures reported by
other companies.
FreightCar America,
Inc.Reconciliation of EPS and Adjusted
EPS(1)(Unaudited)
|
|
Three Months Ended September
30, |
|
|
Nine Months Ended September
30, |
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
EPS |
$ |
(0.69 |
) |
$ |
0.03 |
|
|
$ |
(1.19 |
) |
$ |
(2.11 |
) |
|
|
|
|
|
|
|
|
|
|
Adjustments per share: |
|
|
|
|
|
|
|
|
|
Change in Fair Value of
Warrant (a) |
|
0.05 |
|
|
0.01 |
|
|
|
0.13 |
|
|
0.94 |
|
Restructuring and impairment
charges (b) |
|
- |
|
|
- |
|
|
|
- |
|
|
0.32 |
|
Gain on Debt Extinguishment
(c) |
|
- |
|
|
(0.50 |
) |
|
|
- |
|
|
(0.50 |
) |
Alabama Grant Amortization
(d) |
|
- |
|
|
(0.03 |
) |
|
|
(0.08 |
) |
|
(0.08 |
) |
Mexican Permanent VAT (e) |
|
0.04 |
|
|
- |
|
|
|
0.04 |
|
|
- |
|
Loss on Pension Settlement
(f) |
|
0.32 |
|
|
- |
|
|
|
0.33 |
|
|
- |
|
Transaction Costs (g) |
|
- |
|
|
0.01 |
|
|
|
- |
|
|
0.02 |
|
Startup Costs (h) |
|
0.04 |
|
|
- |
|
|
|
0.04 |
|
|
- |
|
Consulting Costs (i) |
|
0.01 |
|
|
- |
|
|
|
0.04 |
|
|
- |
|
Corporate Realignment (j) |
|
- |
|
|
- |
|
|
|
0.05 |
|
|
- |
|
Legal Reserve (k) |
|
- |
|
|
- |
|
|
|
- |
|
|
0.02 |
|
Plant Transition Costs
(l) |
|
- |
|
|
- |
|
|
|
- |
|
|
0.12 |
|
Stock Based Compensation |
|
0.03 |
|
|
(0.01 |
) |
|
|
0.09 |
|
|
0.14 |
|
Other, net |
|
(0.01 |
) |
|
(0.01 |
) |
|
|
(0.10 |
) |
|
(0.02 |
) |
Total non-GAAP adjustments
pre-tax per share |
|
0.48 |
|
|
(0.53 |
) |
|
|
0.54 |
|
|
0.96 |
|
Income tax impact on non-GAAP
adjustments per share (m) |
|
- |
|
|
- |
|
|
|
0.02 |
|
|
0.05 |
|
Adjusted EPS |
$ |
(0.21 |
) |
$ |
(0.50 |
) |
|
$ |
(0.63 |
) |
$ |
(1.10 |
) |
(1) |
|
Adjusted EPS represents basic EPS before the following
charges: |
|
|
|
|
|
|
|
|
|
a) |
|
This adjustment removes the non-cash (income) expense associated
with the change in fair market value of the Company’s warrant
liability. |
|
|
|
b) |
|
The Company incurred certain restructuring costs related to
severance and other costs related to its shut-down of the Shoals
and Roanoke facilities. |
|
|
|
c) |
|
The Company recorded a non-cash gain on extinguishment of its PPP
Loan in the third quarter of 2021. |
|
|
|
d) |
|
The Company amortizes deferred grant income to cost of goods sold
that represents a non-cash reduction to its gross margin
(loss). |
|
|
|
e) |
|
The Company transitioned to tolling manufacturing structure in the
third quarter of 2022 and as a result incurred permanent VAT
costs. |
|
|
|
f) |
|
The Company recorded a non-cash pre-tax pension settlement loss in
the third quarter of 2022. |
|
|
|
g) |
|
The Company incurred certain costs during 2021 and 2022 for
nonrecurring professional services associated with its financing
arrangements. |
|
|
|
h) |
|
The Company incurred certain costs during 2022 related to new
production lines. |
|
|
|
i) |
|
The Company incurred certain non-recurring consulting costs during
the fourth quarter of 2021 and first quarter of 2022. |
|
|
|
j) |
|
The Company incurred certain non-recurring corporate realignment
costs in 2022. |
|
|
|
k) |
|
During the first and fourth quarters of 2021, the Company
recognized charges related to a legal dispute. |
|
|
|
l) |
|
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 in 2021. |
|
|
|
m) |
|
Income tax impact on non-GAAP adjustments per share represents the
tax impact of adjustments specific to Mexico using the applicable
jurisdictional tax rate. Given the Company’s US based NOLs and
Valuation Allowances result in an effective tax rate of about % for
the US, all US based adjustments above are not tax affected. |
|
|
|
|
|
|
We believe that Adjusted EPS 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 EPS is not a financial measure
presented in accordance with U.S. GAAP. Accordingly, when analyzing
our operating performance, investors should not consider Adjusted
EPS 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 EPS is not necessarily comparable to
that of other similarly titled measures reported by other
companies.
FreightCar America (NASDAQ:RAIL)
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