FreightCar America, Inc. (NASDAQ: RAIL) (“FreightCar America” or
the “Company”), a diversified manufacturer of railroad freight
cars, today reported results for the fourth quarter and full year
ended December 31, 2022.
Fiscal Year 2022 Highlights
- Revenues of $364.8
million, up 79.6% year-over-year, on deliveries of 3,184 railcars,
up 83.9% year-over-year
- Gross margin of 7.1%
with gross profit of $25.8 million, compared to gross margin of
5.6% with gross profit of $11.5 million in fiscal year 2021
- Net loss of ($38.8)
million, or ($1.56) per share and adjusted net loss of ($23.5)
million, or ($0.95) per share, accounting for primarily non-cash
items including $8.1 million pension settlement loss and $4.5
million impairment on leased railcars
- Adjusted EBITDA of
$8.4 million, compared to adjusted EBITDA loss of ($7.2) million in
fiscal year 2021
-
Subsequent to year end, issued non-convertible preferred stock with
its financial partner to reduce debt and provide growth
capital
Fourth Quarter 2022
Highlights
-
Revenues of $129.0 million, up 71.9% year-over-year, with
deliveries of 1,150 railcars, up 90.4% year-over-year
-
Gross margin of 3.6% with gross profit of $4.6 million, compared to
gross margin of 8.8% with gross profit of $6.6 million in the
fourth quarter of 2021
-
Net loss of ($9.7) million, or ($0.37) per share and adjusted net
loss of ($8.1) million, or ($0.31) per share, accounting for
primarily non-cash items including a $4.5 million impairment on
leased railcars, one-time Mexican VAT costs of $1.9 million and
non-cash income of $4.7 million due to the change in fair market
value of the warrant liability
-
Adjusted EBITDA of $1.2 million, equivalent to the fourth quarter
of 2021
-
Quarter-end backlog totaled 2,445 railcars with an aggregate value
of approximately $288 million
Jim Meyer, President and Chief Executive Officer
of FreightCar America, commented, “FreightCar America finished
another strong year of transformation as we continued to ramp-up
our operations in Castaños, delivered 3,184 railcars and generated
$11.5 million in positive operating cash flow. In the fourth
quarter, while we were extremely pleased with the 1,150 units
delivered, we continued to experience margin pressure, primarily
due to supply chain issues. These dynamics will be with us through
the first quarter of this year, after which we expect to see
further improvement in our financial performance.”
Meyer concluded, “Demand for our railcars is
strong, which gives us confidence for continued growth in 2023.
Including orders received since year-end, our production schedule
is essentially full for this year, and we are now focused on
building our order book for 2024. I am proud of our team and the
tremendous transformation that is in its final stages, and we are
all very excited for our future.”
Fiscal Year 2023 Outlook
The Company has provided its outlook for fiscal year 2023 as
follows:
|
Fiscal 2023Outlook |
Year-over-YearGrowth at Midpoint |
Revenue |
$400 - $430 million |
13.8% |
Adjusted EBITDA |
$15 - $20 million |
108.1% |
Railcar Deliveries |
3,400 - 3,700 Railcars |
11.5% |
Mike Riordan, Chief Financial Officer of
FreightCar America, added, “For 2023, we believe we are equipped to
execute on our well-defined growth strategy, and we have good
visibility due to strong order backlog. Our transformed
manufacturing footprint has provided us with the needed flexibility
to align our cost structure with railcar demand, and we expect
improved profitability and positive operating cash flow for the
second consecutive year.”
Riordan continued, “Additionally, as was
recently announced, we’ve taken the next step in reshaping our
capital structure through a financing transaction with our current
financial partner. This transaction improves our balance sheet and
positions us to continue to invest in the future growth of our
business.”
Fourth Quarter and Full Year 2022 Conference Call &
Webcast Information
The Company will host a conference call and live webcast on
Tuesday, March 28, 2023 at 11:00 a.m. (Eastern Time) to discuss its
fourth quarter and full year 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=1603013&tp_key=9b90395017
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 13736892. 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 March
28, 2023, until 12:00 a.m. (Eastern Time) on Wednesday April 12,
2023. To access the replay, please dial (844) 512-2921 or (412)
317-6671. The replay passcode is 13736892. 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; the highly competitive nature of our
industry; the risk of lack of acceptance of our new railcar
offerings by our customers; 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 |
FreightCar America,
Inc.Consolidated Balance
Sheets(In thousands, except for share
data)
|
December 31,2022 |
|
|
December 31,2021 |
|
Assets |
|
|
Current assets |
|
|
|
|
|
Cash, cash equivalents and restricted cash equivalents |
$ |
37,912 |
|
|
$ |
26,240 |
|
Accounts receivable, net of allowance for doubtful accounts of $126
and $323 respectively |
|
9,571 |
|
|
|
9,571 |
|
VAT receivable |
|
4,682 |
|
|
|
31,136 |
|
Inventories, net |
|
64,317 |
|
|
|
56,012 |
|
Assets held for sale |
|
3,675 |
|
|
|
— |
|
Related party asset |
|
3,261 |
|
|
|
8,680 |
|
Prepaid expenses |
|
5,470 |
|
|
|
5,087 |
|
Total current assets |
|
128,888 |
|
|
|
136,726 |
|
Property, plant and equipment,
net |
|
23,248 |
|
|
|
18,236 |
|
Railcars available for lease,
net |
|
11,324 |
|
|
|
20,160 |
|
Right of use asset operating
lease |
|
1,596 |
|
|
|
16,669 |
|
Right of use asset finance
lease |
|
33,093 |
|
|
|
— |
|
Other long-term assets |
|
1,589 |
|
|
|
8,873 |
|
Total assets |
$ |
199,738 |
|
|
$ |
200,664 |
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Accounts and contractual payables |
$ |
48,449 |
|
|
$ |
41,185 |
|
Related party accounts payable |
|
3,393 |
|
|
|
8,870 |
|
Accrued payroll and other employee costs |
|
4,081 |
|
|
|
2,912 |
|
Reserve for workers' compensation |
|
841 |
|
|
|
1,563 |
|
Accrued warranty |
|
1,940 |
|
|
|
2,533 |
|
Customer deposits |
|
— |
|
|
|
3,300 |
|
Deferred income state and local incentives, current |
|
— |
|
|
|
1,291 |
|
Current portion of long-term debt |
|
40,742 |
|
|
|
— |
|
Other current liabilities |
|
6,539 |
|
|
|
7,666 |
|
Total current liabilities |
|
105,985 |
|
|
|
69,320 |
|
Long-term debt, net of current
portion |
|
51,494 |
|
|
|
79,484 |
|
Warrant liability |
|
31,028 |
|
|
|
32,514 |
|
Accrued pension costs |
|
1,040 |
|
|
|
35 |
|
Deferred income state and
local incentives, long-term |
|
— |
|
|
|
1,216 |
|
Lease liability operating
lease, long-term |
|
1,780 |
|
|
|
16,617 |
|
Lease liability finance lease,
long-term |
|
33,245 |
|
|
|
— |
|
Other long-term
liabilities |
|
3,750 |
|
|
|
3,134 |
|
Total liabilities |
|
228,322 |
|
|
|
202,320 |
|
Stockholders’ deficit |
|
|
|
|
|
Preferred stock, $0.01 par value, 2,500,000 shares authorized
(100,000 shares eachdesignated as Series A voting and Series B
non-voting, 0 shares issued and outstandingat December 31, 2022 and
December 31, 2021) |
|
— |
|
|
|
— |
|
Common stock, $0.01 par value, 50,000,000 shares authorized,
17,223,306 and 15,947,228 shares issued and outstanding at December
31, 2022 and December 31, 2021, respectively |
|
203 |
|
|
|
190 |
|
Additional paid-in capital |
|
89,104 |
|
|
|
83,742 |
|
Accumulated other comprehensive income (loss) |
|
1,022 |
|
|
|
(5,522 |
) |
Accumulated deficit |
|
(118,913 |
) |
|
|
(80,066 |
) |
Total stockholders’ deficit |
|
(28,584 |
) |
|
|
(1,656 |
) |
Total liabilities and
stockholders’ deficit |
$ |
199,738 |
|
|
$ |
200,664 |
|
FreightCar America, Inc.
Consolidated Statements of Operations(In
thousands, except for share and per share data)
|
Three Months Ended |
|
|
Year Ended |
|
|
December 31, |
|
|
December 31, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
Revenues |
$ |
128,989 |
|
|
$ |
75,019 |
|
|
$ |
364,754 |
|
|
$ |
203,050 |
|
Cost of sales |
|
124,367 |
|
|
|
68,412 |
|
|
|
338,931 |
|
|
|
191,592 |
|
Gross profit |
|
4,622 |
|
|
|
6,607 |
|
|
|
25,823 |
|
|
|
11,458 |
|
Selling, general and
administrative expenses |
|
6,349 |
|
|
|
6,386 |
|
|
|
28,227 |
|
|
|
27,532 |
|
Impairment on leased
railcars |
|
4,515 |
|
|
|
158 |
|
|
|
4,515 |
|
|
|
158 |
|
Loss on pension
settlement |
|
— |
|
|
|
— |
|
|
|
8,105 |
|
|
|
— |
|
Restructuring and impairment
charges |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6,530 |
|
Operating income (loss) |
|
(6,242 |
) |
|
|
63 |
|
|
|
(15,024 |
) |
|
|
(22,762 |
) |
Interest expense |
|
(7,874 |
) |
|
|
(4,041 |
) |
|
|
(25,423 |
) |
|
|
(13,317 |
) |
Loss on change in fair market
value of warrant liability |
|
4,744 |
|
|
|
4,075 |
|
|
|
1,486 |
|
|
|
(14,894 |
) |
Gain on extinguishment of
debt |
|
— |
|
|
|
(7 |
) |
|
|
— |
|
|
|
10,122 |
|
Other income |
|
79 |
|
|
|
327 |
|
|
|
2,426 |
|
|
|
817 |
|
Income (loss) before income
taxes |
|
(9,293 |
) |
|
|
417 |
|
|
|
(36,535 |
) |
|
|
(40,034 |
) |
Income tax provision
(benefit) |
|
440 |
|
|
|
(748 |
) |
|
|
2,312 |
|
|
|
1,413 |
|
Net income (loss) |
$ |
(9,733 |
) |
|
$ |
1,165 |
|
|
$ |
(38,847 |
) |
|
$ |
(41,447 |
) |
Net income (loss) per common
share - basic |
$ |
(0.37 |
) |
|
$ |
0.06 |
|
|
$ |
(1.56 |
) |
|
$ |
(2.00 |
) |
Net income (loss) per common
share - diluted |
$ |
(0.37 |
) |
|
$ |
0.06 |
|
|
$ |
(1.56 |
) |
|
$ |
(2.00 |
) |
Weighted average common shares
outstanding – basic |
|
26,117,377 |
|
|
|
21,786,335 |
|
|
|
24,838,399 |
|
|
|
20,766,398 |
|
Weighted average common shares
outstanding – diluted |
|
26,117,377 |
|
|
|
23,197,856 |
|
|
|
24,838,399 |
|
|
|
20,766,398 |
|
FreightCar America,
Inc.Segment Data(In
thousands)
|
Three Months Ended |
|
|
Year Ended |
|
|
December 31, |
|
|
December 31, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
Manufacturing |
$ |
126,279 |
|
|
$ |
71,731 |
|
|
$ |
352,827 |
|
|
$ |
192,807 |
|
Corporate and Other |
|
2,710 |
|
|
|
3,288 |
|
|
|
11,927 |
|
|
|
10,243 |
|
Consolidated
revenues |
$ |
128,989 |
|
|
$ |
75,019 |
|
|
$ |
364,754 |
|
|
$ |
203,050 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss): |
|
|
|
|
|
|
|
|
|
|
|
Manufacturing |
$ |
(1,670 |
) |
|
$ |
4,861 |
|
|
$ |
14,801 |
|
|
$ |
(757 |
) |
Corporate and Other |
|
(4,572 |
) |
|
|
(4,798 |
) |
|
|
(29,825 |
) |
|
|
(22,005 |
) |
Consolidated operating
income (loss) |
$ |
(6,242 |
) |
|
$ |
63 |
|
|
$ |
(15,024 |
) |
|
$ |
(22,762 |
) |
FreightCar America, Inc.
Consolidated Statements of Cash Flows (In
thousands)
|
Year Ended December 31, |
|
|
2022 |
|
|
2021 |
|
Cash flows from
operating activities |
|
|
Net loss |
$ |
(38,847 |
) |
|
$ |
(41,447 |
) |
Adjustments to reconcile net
loss to net cash flows used in operating activities: |
|
|
|
|
|
Restructuring and impairment charges |
|
— |
|
|
|
6,530 |
|
Depreciation and amortization |
|
4,135 |
|
|
|
4,304 |
|
Non-cash lease expense on right-of-use assets |
|
2,325 |
|
|
|
1,483 |
|
Recognition of deferred income from state and local incentives |
|
(2,507 |
) |
|
|
(2,215 |
) |
(Gain) loss on change in fair market value for Warrant
liability |
|
(1,486 |
) |
|
|
14,894 |
|
Impairment on leased railcars |
|
4,515 |
|
|
|
158 |
|
Loss on pension settlement |
|
8,105 |
|
|
|
— |
|
Stock-based compensation recognized |
|
2,106 |
|
|
|
2,977 |
|
Non-cash interest expense |
|
16,563 |
|
|
|
5,502 |
|
Gain on extinguishment of debt |
|
— |
|
|
|
(10,122 |
) |
Other non-cash items, net |
|
20 |
|
|
|
529 |
|
Changes in operating assets and liabilities, net of
acquisitions: |
|
|
|
|
|
Accounts receivable |
|
— |
|
|
|
(150 |
) |
VAT receivable |
|
24,946 |
|
|
|
(24,675 |
) |
Inventories |
|
(8,476 |
) |
|
|
(12,369 |
) |
Related party asset, net |
|
(58 |
) |
|
|
(624 |
) |
Accounts and contractual payables |
|
8,181 |
|
|
|
7,878 |
|
Lease liability |
|
(3,006 |
) |
|
|
(2,106 |
) |
Other assets and liabilities |
|
(5,013 |
) |
|
|
(5,944 |
) |
Net cash flows provided by (used in) operating activities |
|
11,503 |
|
|
|
(55,397 |
) |
|
|
|
|
|
|
|
|
Cash flows from
investing activities |
|
|
|
|
|
Maturity of restricted
certificates of deposit |
|
— |
|
|
|
182 |
|
Purchase of property, plant
and equipment |
|
(7,816 |
) |
|
|
(2,290 |
) |
Proceeds from sale of
property, plant and equipment |
|
— |
|
|
|
433 |
|
Net cash flows used in investing activities |
|
(7,816 |
) |
|
|
(1,675 |
) |
|
|
|
|
|
|
|
|
Cash flows from
financing activities |
|
|
|
|
|
Proceeds from issuance of
long-term debt |
|
— |
|
|
|
16,000 |
|
Deferred financing costs |
|
— |
|
|
|
(1,688 |
) |
Borrowings on revolving line
of credit |
|
133,652 |
|
|
|
48,400 |
|
Repayments on revolving line
of credit |
|
(124,852 |
) |
|
|
(33,378 |
) |
Employee stock settlement |
|
(57 |
) |
|
|
(12 |
) |
Payment for stock appreciation
rights exercised |
|
(20 |
) |
|
|
(57 |
) |
Financing lease payments |
|
(738 |
) |
|
|
— |
|
Net cash flows provided by financing activities |
|
7,985 |
|
|
|
29,265 |
|
Net increase (decrease) in
cash and cash equivalents |
|
11,672 |
|
|
|
(27,807 |
) |
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 |
$ |
37,912 |
|
|
$ |
26,240 |
|
|
|
|
|
|
|
|
|
Supplemental cash flow
information |
|
|
|
|
|
Interest paid |
$ |
8,849 |
|
|
$ |
6,537 |
|
Income tax refunds received,
net of payments |
$ |
— |
|
|
$ |
5 |
|
Non-cash
transactions |
|
|
|
|
|
Change in unpaid construction
in process |
$ |
715 |
|
|
$ |
122 |
|
Accrued PIK interest paid
through issuance of PIK Note |
$ |
1,467 |
|
|
$ |
1,278 |
|
Issuance of warrants |
$ |
8,560 |
|
|
$ |
4,891 |
|
Issuance of equity fee |
$ |
4,000 |
|
|
$ |
2,000 |
|
FreightCar America,
Inc.Reconciliation of income before taxes to
EBITDA(1) and Adjusted
EBITDA(2)(In
thousands)(Unaudited)
|
Three Months Ended December
31, |
|
Year Ended December 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income
taxes |
$ |
(9,293 |
) |
|
$ |
417 |
|
|
$ |
(36,535 |
) |
|
$ |
(40,034 |
) |
Depreciation &
Amortization |
|
1,025 |
|
|
|
1,000 |
|
|
|
4,135 |
|
|
|
4,304 |
|
Interest Expense, net |
|
7,874 |
|
|
|
4,041 |
|
|
|
25,423 |
|
|
|
13,317 |
|
EBITDA |
|
(394 |
) |
|
|
5,458 |
|
|
|
(6,977 |
) |
|
|
(22,413 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Change in Fair Value of
Warrant (a) |
|
(4,744 |
) |
|
|
(4,075 |
) |
|
|
(1,486 |
) |
|
|
14,894 |
|
Restructuring and impairment
charges (b) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
6,530 |
|
Impairment on leased railcars
(c) |
|
4,515 |
|
|
|
158 |
|
|
|
4,515 |
|
|
|
158 |
|
Loss/(Gain) on Debt
Extinguishment (d) |
|
- |
|
|
|
7 |
|
|
|
- |
|
|
|
(10,122 |
) |
Alabama Grant Amortization
(e) |
|
- |
|
|
|
(551 |
) |
|
|
(1,857 |
) |
|
|
(2,216 |
) |
Mexican Permanent VAT (f) |
|
1,861 |
|
|
|
- |
|
|
|
2,769 |
|
|
|
- |
|
Loss on Pension Settlement
(g) |
|
- |
|
|
|
- |
|
|
|
8,105 |
|
|
|
- |
|
Transaction Costs (h) |
|
37 |
|
|
|
- |
|
|
|
153 |
|
|
|
491 |
|
Startup Costs (i) |
|
164 |
|
|
|
- |
|
|
|
1,113 |
|
|
|
- |
|
Consulting Costs (j) |
|
85 |
|
|
|
129 |
|
|
|
1,073 |
|
|
|
129 |
|
Corporate Realignment (k) |
|
- |
|
|
|
- |
|
|
|
1,323 |
|
|
|
- |
|
Legal Reserve (l) |
|
- |
|
|
|
256 |
|
|
|
- |
|
|
|
756 |
|
Plant Transition Costs
(m) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,386 |
|
Stock Based Compensation |
|
(201 |
) |
|
|
148 |
|
|
|
2,106 |
|
|
|
2,977 |
|
Other, net |
|
(79 |
) |
|
|
(327 |
) |
|
|
(2,426 |
) |
|
|
(817 |
) |
Adjusted EBITDA |
$ |
1,244 |
|
|
$ |
1,203 |
|
|
$ |
8,411 |
|
|
$ |
(7,247 |
) |
(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) |
During
the fourth quarters of 2021 and 2022, the Company recorded a
non-cash impairment charge on its leased railcar fleet. |
|
d) |
The
Company recorded a non-cash gain on extinguishment of its PPP Loan
in the third quarter of 2021. |
|
e) |
The
Company amortizes deferred grant income to cost of goods sold that
represents a non-cash reduction to its gross margin (loss). |
|
f) |
The
Company transitioned to tolling manufacturing structure in the
third quarter of 2022 and as a result incurred permanent VAT
costs. |
|
g) |
The
Company recorded a non-cash pre-tax pension settlement loss in the
third quarter of 2022. |
|
h) |
The
Company incurred certain costs during 2021 and 2022 for
nonrecurring professional services associated with its financing
arrangements. |
|
i) |
The
Company incurred certain costs during 2022 related to new
production lines. |
|
j) |
The
Company incurred certain non-recurring consulting costs during 2021
and 2022. |
|
k) |
The
Company incurred certain non-recurring corporate realignment costs
in 2022. |
|
l) |
During
the first and fourth quarters of 2021, the Company recognized
charges related to a legal dispute. |
|
m) |
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)(Unaudited)
|
Three Months Ended December
31, |
|
|
Year Ended December 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
(9,733 |
) |
|
$ |
1,165 |
|
|
$ |
(38,847 |
) |
|
$ |
(41,447 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Change in Fair Value of
Warrant (a) |
|
(4,744 |
) |
|
|
(4,075 |
) |
|
|
(1,486 |
) |
|
|
14,894 |
|
Restructuring and impairment
charges (b) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
6,530 |
|
Impairment on leased railcars
(c) |
|
4,515 |
|
|
|
158 |
|
|
|
4,515 |
|
|
|
158 |
|
Gain on Debt Extinguishment
(d) |
|
- |
|
|
|
7 |
|
|
|
- |
|
|
|
(10,122 |
) |
Alabama Grant Amortization
(e) |
|
- |
|
|
|
(551 |
) |
|
|
(1,857 |
) |
|
|
(2,216 |
) |
Mexican Permanent VAT (f) |
|
1,861 |
|
|
|
- |
|
|
|
2,769 |
|
|
|
- |
|
Loss on Pension Settlement
(g) |
|
- |
|
|
|
- |
|
|
|
8,105 |
|
|
|
- |
|
Transaction Costs (h) |
|
37 |
|
|
|
- |
|
|
|
153 |
|
|
|
491 |
|
Startup Costs (i) |
|
164 |
|
|
|
- |
|
|
|
1,113 |
|
|
|
- |
|
Consulting Costs (j) |
|
85 |
|
|
|
129 |
|
|
|
1,073 |
|
|
|
129 |
|
Corporate Realignment (k) |
|
- |
|
|
|
- |
|
|
|
1,323 |
|
|
|
- |
|
Legal Reserve (l) |
|
- |
|
|
|
256 |
|
|
|
- |
|
|
|
756 |
|
Plant Transition Costs
(n) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,386 |
|
Stock Based Compensation |
|
(201 |
) |
|
|
148 |
|
|
|
2,106 |
|
|
|
2,977 |
|
Other, net |
|
(79 |
) |
|
|
(327 |
) |
|
|
(2,426 |
) |
|
|
(817 |
) |
Total non-GAAP
adjustments |
|
1,638 |
|
|
|
(4,255 |
) |
|
|
15,388 |
|
|
|
15,166 |
|
Income tax impact on non-GAAP
adjustments(m) |
|
(5 |
) |
|
|
- |
|
|
|
(68 |
) |
|
|
(234 |
) |
Adjusted Net loss |
$ |
(8,100 |
) |
|
$ |
(3,090 |
) |
|
$ |
(23,527 |
) |
|
$ |
(26,515 |
) |
(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) |
During
the fourth quarters of 2021 and 2022, the Company recorded a
non-cash impairment charge on its leased railcar fleet. |
|
d) |
The
Company recorded a non-cash gain on extinguishment of its PPP Loan
in the third quarter of 2021. |
|
e) |
The
Company amortizes deferred grant income to cost of goods sold that
represents a non-cash reduction to its gross margin (loss). |
|
f) |
The
Company transitioned to tolling manufacturing structure in the
third quarter of 2022 and as a result incurred permanent VAT
costs. |
|
g) |
The
Company recorded a non-cash pre-tax pension settlement loss in the
third quarter of 2022. |
|
h) |
The
Company incurred certain costs during 2021 and 2022 for
nonrecurring professional services associated with its financing
arrangements. |
|
i) |
The
Company incurred certain costs during 2022 related to new
production lines. |
|
j) |
The
Company incurred certain non-recurring consulting costs during 2021
and 2022. |
|
k) |
The
Company incurred certain non-recurring corporate realignment costs
in 2022. |
|
l) |
During
the first and fourth quarters of 2021, the Company recognized
charges related to a legal dispute. |
|
m) |
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. |
|
n) |
Income
tax impact on non-GAAP adjustments per share represents the tax
impact of adjustments specific to Mexico using the effective 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 December
31, |
|
Year Ended December 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS |
$ |
(0.37 |
) |
|
$ |
0.05 |
|
|
$ |
(1.56 |
) |
|
$ |
(2.00 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments per share: |
|
|
|
|
|
|
|
|
|
|
|
Change in Fair Value of
Warrant (a) |
|
(0.18 |
) |
|
|
(0.19 |
) |
|
|
(0.06 |
) |
|
|
0.72 |
|
Restructuring and impairment
charges (b) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
0.31 |
|
Impairment on leased railcars
(c) |
|
0.17 |
|
|
|
0.01 |
|
|
|
0.18 |
|
|
|
0.01 |
|
Gain on Debt Extinguishment
(d) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(0.49 |
) |
Alabama Grant Amortization
(e) |
|
- |
|
|
|
(0.03 |
) |
|
|
(0.07 |
) |
|
|
(0.11 |
) |
Mexican Permanent VAT (f) |
|
0.07 |
|
|
|
- |
|
|
|
0.11 |
|
|
|
- |
|
Loss on Pension Settlement
(g) |
|
- |
|
|
|
- |
|
|
|
0.33 |
|
|
|
- |
|
Transaction Costs (h) |
|
- |
|
|
|
- |
|
|
|
0.01 |
|
|
|
0.02 |
|
Startup Costs (i) |
|
0.01 |
|
|
|
- |
|
|
|
0.04 |
|
|
|
- |
|
Consulting Costs (j) |
|
- |
|
|
|
0.01 |
|
|
|
0.04 |
|
|
|
0.01 |
|
Corporate Realignment (k) |
|
- |
|
|
|
- |
|
|
|
0.05 |
|
|
|
- |
|
Legal Reserve (l) |
|
- |
|
|
|
0.01 |
|
|
|
- |
|
|
|
0.04 |
|
Plant Transition Costs
(m) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
0.11 |
|
Stock Based Compensation |
|
(0.01 |
) |
|
|
0.01 |
|
|
|
0.08 |
|
|
|
0.14 |
|
Other, net |
|
- |
|
|
|
(0.01 |
) |
|
|
(0.10 |
) |
|
|
(0.04 |
) |
Total non-GAAP adjustments
pre-tax per share |
|
0.06 |
|
|
|
(0.19 |
) |
|
|
0.61 |
|
|
|
0.72 |
|
Income tax impact on non-GAAP
adjustments per share (n) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(0.01 |
) |
Adjusted EPS |
$ |
(0.31 |
) |
|
$ |
(0.14 |
) |
|
$ |
(0.95 |
) |
|
$ |
(1.29 |
) |
(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) |
During
the fourth quarters of 2021 and 2022, the Company recorded a
non-cash impairment charge on its leased railcar fleet. |
|
d) |
The
Company recorded a non-cash gain on extinguishment of its PPP Loan
in the third quarter of 2021. |
|
e) |
The
Company amortizes deferred grant income to cost of goods sold that
represents a non-cash reduction to its gross margin (loss). |
|
f) |
The
Company transitioned to tolling manufacturing structure in the
third quarter of 2022 and as a result incurred permanent VAT
costs. |
|
g) |
The
Company recorded a non-cash pre-tax pension settlement loss in the
third quarter of 2022. |
|
h) |
The
Company incurred certain costs during 2021 and 2022 for
nonrecurring professional services associated with its financing
arrangements. |
|
i) |
The
Company incurred certain costs during 2022 related to new
production lines. |
|
j) |
The
Company incurred certain non-recurring consulting costs during 2021
and 2022. |
|
k) |
The
Company incurred certain non-recurring corporate realignment costs
in 2022. |
|
l) |
During
the first and fourth quarters of 2021, the Company recognized
charges related to a legal dispute. |
|
m) |
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. |
|
n) |
Income
tax impact on non-GAAP adjustments per share represents the tax
impact of adjustments specific to Mexico using the effective 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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