FreightCar America, Inc. Announces Agreement to Issue Non-Convertible Preferred Stock to Reduce Debt and Provide Growth Capital
March 27 2023 - 5:00AM
FreightCar America, Inc. (Nasdaq: RAIL) (“FreightCar America” or
the “Company”), a diversified manufacturer of railroad freight
cars, today announced the entry into an agreement to issue new
non-convertible preferred stock (the “Preferred”) to its current
financial partner. The issuance is expected to occur on May 22,
2023 and the proceeds will be used to repay in-full the Company’s
outstanding term loan debt, provide additional working capital and
enhance the Company’s future operating cash flows to invest in
growth initiatives.
Highlights:
-
Company will issue approximately 85,000 shares of new
non-convertible preferred stock to its current financial partner at
a purchase price of $1,000 per share.
-
Proceeds of the Preferred will be used to retire the outstanding
term loan debt.
-
The remaining balance of the funds from the Preferred will be used
to support further expansion of the Castaños footprint and new
growth initiatives.
-
As a result of the refinancing, the Company expects approximately
$10 million of improvement in annual operating cash flows due to
savings on its asset-based lending (ABL) facility and deferred cash
dividends.
Mike Riordan, Chief Financial Officer of
FreightCar America, commented, “Given the significant progress and
momentum of our business, we’ve taken an important first step in
the reshaping of our capital structure through today’s transaction.
This transaction significantly improves our balance sheet, lowers
our interest costs and generates additional operating cash flow,
allowing us to continue to invest in the business. Demand for our
railcars is strong and this transaction supports the next increment
of our planned growth.”
For additional information about the Preferred,
please refer to the Company’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2022 filed today with the Securities
and Exchange Commission.
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: 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; risks relating to the potential
financial and operational impacts of the COVID-19 pandemic 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 |
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