Toggle SGML Header (+)


Section 1: 8-K (FORM 8-K)

 

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): February 26, 2019  

FREIGHTCAR AMERICA, INC.
(Exact Name of Registrant as Specified in Charter)

Delaware000-5123725-1837219
(State or Other Jurisdiction of Incorporation)(Commission File Number)(I.R.S. Employer Identification Number)

 

Two North Riverside Plaza, Suite 1300, 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))

 

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 1 — Registrants Business and Operations

Item 1.01. Entry into a Material Definitive Agreement.

On February 26, 2019, FreightCar America, Inc. (the “Company”) and its wholly owned subsidiary, FreightCar Alabama, LLC (“FreightCar Alabama”), entered into the Second Amendment to Industrial Facility Lease (the “Lease Amendment”) with the Teachers’ Retirement Systems of Alabama and the Employees’ Retirement System of Alabama, as landlord (collectively, the “Landlord”), in connection with the Industrial Facility Lease, dated as of September 29, 2011, which was assigned to FreightCar Alabama on February 28, 2018 (as previously amended and assigned, the “Original Lease”) and guaranteed by the Company, relating to the Company’s facility in Cherokee, Alabama (the “Facility”).

The Lease Amendment amends the Original Lease to extend the initial term thereof from December 31, 2021 to December 31, 2026, with two five-year extension terms thereafter through December 31, 2031 and December 31, 2036, at the option of FreightCar Alabama.  In addition, FreightCar Alabama will vacate up to 40% of the Facility on or before December 31, 2021 (subject to adjustment under certain circumstances), and the base rent payable to the Landlord during the initial term shall be reduced on proportional basis, with subsequent increases of such base rent during the extension terms to be based on certain time period comparisons of the Consumer Price Index published by the U.S. Department of Labor.  The Company consented to the Lease Amendment and acknowledged its continuing obligation as a guarantor thereunder.

The foregoing description of the Lease Amendment does not purport to be complete and is qualified in its entirety by reference to the Lease Amendment to be filed as an exhibit to the Company’s quarterly report on Form 10-Q for the quarter ending March 31, 2019.

Section 2 — Financial Information

Item 2.02. Results of Operations and Financial Condition.

On February 26, 2019, the Company issued a press release announcing its financial results for the fourth quarter of 2018. 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 February 26, 2019.


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: February 26, 2019By: /s/ Matthew S. Kohnke        
  Matthew S. Kohnke
  Vice President Finance, Chief Financial Officer and Treasurer
  


EXHIBIT INDEX

 

Exhibit Number Description
   
Exhibit 99.1 Press release of FreightCar America, Inc., dated February 26, 2019.


(Back To Top)

Section 2: EX-99.1 (PRESS RELEASE)

EdgarFiling

EXHIBIT 99.1

FreightCar America, Inc. Reports Fourth Quarter and Full Year 2018 Results

Company is focused on completing “Back to Basics” in 2019 and announces annual delivery estimates, material cost savings guidance and next step towards its long term manufacturing footprint

CHICAGO, Feb. 26, 2019 (GLOBE NEWSWIRE) -- FreightCar America, Inc. (NASDAQ: RAIL) today reported results for the fourth quarter ended December 31, 2018.

Business Highlights

"In 2018, we put in motion our ‘Back to Basics’ transformation initiative designed to position FreightCar America for a strong future,” said Jim Meyer, President and Chief Executive Officer of FreightCar America. "During the year, we took full control of our largest facility, invested in our workforce including the addition of a significant number of critical new hires, and made solid progress in removing costs from our business. We realized a net reduction in our cost of goods sold of more than $3,000 per railcar. This amount would likely have been much greater if not for the high number of changeovers and shorter production runs, which prevented us from capturing the gains we are making in labor efficiencies.”

Meyer concluded, “As we move forward in 2019, the final phase of ‘Back to Basics’ will focus on: 1) continuing to remove material and labor costs from our business, 2) strengthening our product portfolio, and 3) optimizing our manufacturing footprint. Lower costs and a broader product portfolio are key to capturing a greater share of available business and growing our backlog to healthier levels. As it relates to our manufacturing footprint, we are pleased to announce we have finalized an agreement to shrink both the square footage and rent payment at our leased Shoals facility, up to 40% each. This will go into effect in January 2022, per the amended lease terms. We remain confident in our ‘Back to Basics’ initiatives and we expect at the end of this year to have a much more competitive cost base, a meaningfully broader product offering, and all of the building blocks in place for our long term footprint."

Fourth Quarter Results

Full Year 2018 Results

Fourth Quarter 2018 Conference Call & Webcast Information

The Company will host a conference call and live webcast on Wednesday, February 27, 2019 at 11:00 a.m. (Eastern Standard Time) to discuss the Company’s fourth quarter 2018 financial results. To participate in the conference call, please dial (800) 230-1085, Confirmation Number 464318.  Interested parties are asked to dial in approximately 10 to 15 minutes prior to the start time of the call. The live audio-only webcast can be accessed at:

        Event URL: https://im.csgsystems.com/cgi-bin/conf   
        Cast Conference ID#: 464318

If you need technical assistance, call the toll-free AT&T Conference Casting Support Help Line at (888) 793-6118. 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.  An audio replay of the conference call will be available beginning at 1:00 p.m. (Eastern Standard Time) on February 27, 2019 until 11:59 p.m. (Eastern Daylight Time) on March 27, 2019.  To access the replay, please dial (800) 475-6701.  The replay pass code is 464318.  An audio replay of the call will be available on the Company’s website within two days following the earnings call.

About FreightCar America, Inc.

FreightCar America, Inc. manufactures a wide range of railroad freight cars, supplies railcar parts and leases freight cars through its JAIX Leasing Company subsidiary. FreightCar America designs and builds high-quality railcars, including coal cars, bulk commodity cars, covered hopper cars, intermodal and non-intermodal flat cars, mill gondola cars, coil steel cars and boxcars. It is headquartered in Chicago, Illinois and has facilities in the following locations: Cherokee, Alabama; Grand Island, Nebraska; Johnstown, Pennsylvania; Roanoke, Virginia; 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)
 
 December 31,December 31,
  2018  2017 
 (In thousands)
Assets  
Current assets  
Cash, cash equivalents and restricted cash equivalents$    45,070 $    87,788 
Restricted certificates of deposit   4,952    5,720 
Marketable securities   18,019    42,917 
Accounts receivable, net   18,218    7,581 
Inventories, net   64,562    45,292 
Inventory on lease    -    5,550 
Other current assets   5,012    5,099 
Total current assets   155,833    199,947 
   
Property, plant and equipment, net   45,317    38,253 
Railcars available for lease, net   64,755    23,434 
Goodwill   21,521    21,521 
Deferred income taxes, net   -    9,446 
Other long-term assets   2,311    3,303 
Total assets$    289,737 $    295,904 
   

Liabilities and Stockholders’ Equity
  
Current liabilities  
Accounts and contractual payables$    34,749 $    23,329 
Accrued payroll and other employee costs   1,639    1,809 
Reserve for workers’ compensation   3,344    3,394 
Accrued warranty   9,309    8,062 
Customer deposits   3,000    362 
Deferred income state and local incentives, current   2,219    2,219 
Deferred rent, current   6,466    178 
Other current liabilities   1,324    964 
Total current liabilities   62,050     40,317 
Accrued pension costs   5,841    5,763 
Accrued postretirement benefits, less current portion   4,975    5,556 
Deferred income state and local incentives, long-term   6,941    9,161 
Deferred rent, long-term   15,519    2,988 
Accrued taxes and other long-term liabilities   801    387 
Total liabilities   96,127    64,172 
   
Stockholders’ equity  
Preferred stock   —    — 
Common stock   127    127 
Additional paid in capital   90,593    90,347 
Treasury stock, at cost   (9,721)   (12,555)
Accumulated other comprehensive loss   (8,188)   (7,567)
Retained earnings   120,799    161,380 
Total stockholders’ equity   193,610    231,732 
Total liabilities and stockholders’ equity$    289,737 $    295,904 
       


 
FreightCar America, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
 
  Three Months Ended
December 31,
 Twelve Months Ended
December 31,
   2018  2017   2018  2017 
  (In thousands, except for share and per share data)
       
Revenues $  87,835 $ 79,241  $  316,519 $  409,474 
Cost of sales    91,867    83,374     320,146    406,478 
Gross (loss) profit    (4,032)   (4,133)    (3,627)   2,996 
Selling, general and administrative expenses    7,222     9,301     29,051    32,987 
Gain on sale of facility    —    —     (573)   — 
Restructuring and impairment charges    —      7     —    1,792 
Operating loss    (11,254)   (13,441)    (32,105)   (31,783)
       
Interest expense and deferred financing costs    (70)   (64)    (155)   (163)
Other income    427     320     1,848    539 
Loss before income taxes    (10,897)   (13,185)    (30,412)   (31,407)
Income tax provision (benefit)    14,772    (2,047)    10,169    (8,845)
Net loss $  (25,669)$  (11,138) $   (40,581)$  (22,562)
       
Net loss per common share – basic $  (2.06)$  (0.90) $  (3.26)$  (1.82)
       
Net loss per common share – diluted $  (2.06)$  (0.90) $  (3.26)$   (1.82)
       
Weighted average common shares outstanding -      
basic    12,325,876    12,294,597     12,318,861    12,285,566 
       
Weighted average common shares outstanding -      
diluted    12,325,876    12,294,597     12,318,861    12,285,566 
       
Dividends declared per common share $  — $  —  $  — $  0.27 
       


 
FreightCar America, Inc.
Segment Data
(Unaudited)
 
  Three Months Ended
December 31,
 Twelve Months Ended
December 31,
   2018  2017   2018  2017 
  (In thousands) (In thousands)
Revenues:      
Manufacturing $  84,208 $  76,832  $  302,154 $  400,481 
Corporate and Other    3,627    2,409     14,365    8,993 
Consolidated revenues $  87,835 $  79,241   $  316,519 $  409,474 
       
Operating loss:      
Manufacturing $  (6,541)$   (6,547) $  (14,556)$  (6,998)
Corporate and Other    (4,713)   (6,894)    (17,549)    (24,785)
Consolidated operating loss $  (11,254)$  (13,441) $  (32,105)$  (31,783)
               


 
FreightCar America, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
 
 Twelve Months Ended
December 31,
  2018  2017 
 (In thousands)
Cash flows from operating activities  
Net loss$  (40,581)$  (22,562)
Adjustments to reconcile net loss to net cash
flows (used in) provided by operating activities:
    
Net proceeds from Shoals transaction   2,655    — 
Depreciation and amortization   12,017    9,366 
Recognition of deferred income from state and local incentives   (2,220)   (2,219)
Gain on sale of facility   (573)    — 
Deferred income taxes   9,969    (6,424)
Stock-based compensation recognized   3,198    1,162 
Other non-cash items, net   269    1,957 
Changes in operating assets and liabilities, net of acquisitions:  
Accounts receivable   (10,637)   16,216 
Inventories    (16,311)      50,639 
Other assets   1,728     (3,248)
Accounts and contractual payables    10,693    (11,170)
Accrued payroll and employee benefits   (165)   (1,305)
Income taxes receivable/payable   657     9,623 
Accrued warranty   1,247    (262)
Other liabilities   (2,461)   (754)
Accrued pension costs and accrued postretirement benefits   (1,129)   (678)
Net cash flows (used in) provided by operating activities   (31,644)   40,341 
   
Cash flows from investing activities  
   
Purchase of restricted certificates of deposit   (8,312)   (9,966)
Maturity of restricted certificates of deposit    9,080    6,856 
Purchase of securities held to maturity   (111,356)   (85,821)
Proceeds from maturity of securities     136,716    43,080 
Cost of railcars available for lease   (37,347)    — 
Purchases of property, plant and equipment     (2,185)   (967)
Proceeds from sale of property, plant and equipment and railcars available for lease     2,458    119 
State and local incentives received    —    1,410 
Net cash flows used in investing activities     (10,946)   (45,289)
   
Cash flows from financing activities  
   
Employee stock settlement    (118)   (23)
Cash dividends paid to stockholders    —    (3,351)
Deferred financing costs   (10)   — 
Net cash flows used in financing activities     (128)   (3,374)
   
Net decrease in cash and cash equivalents$    (42,718)$   (8,322)
Cash, cash equivalents and restricted cash equivalents at beginning of period$    87,788 $  96,110 
Cash, cash equivalents and restricted cash equivalents at end of period$   45,070 $  87,788 
   


 

INVESTOR & MEDIA CONTACTMatthew S. Kohnke
TELEPHONE(800) 458-2235

(Back To Top)