Chicago, IL, August 5, 2010 – FreightCar America, Inc. (NASDAQ: RAIL) today reported results for its second quarter ended June 30, 2010 with revenues of $31.0 million and a net loss of $1.3 million, or $0.11 per diluted share. For the first quarter of 2010, the Company reported revenues of $19.5 million and a net loss of $3.3 million, or $0.28 per diluted share. For the second quarter of 2009, the Company generated revenues of $104.3 million and net income of $7.0 million, or $0.59 per diluted share.
The Company delivered 614 railcars to customers in the second quarter of 2010, consisting of 160 new cars, 440 used cars and 14 cars delivered under leases. This compares to 321 railcars delivered in the first quarter of 2010 and 1,109 railcars delivered in the second quarter of 2009.
Orders for railcars were 14 units in the second quarter of 2010, compared to orders for 3,656 units in the first quarter of 2010 and 694 units in the second quarter of 2009. Total backlog was 3,000 units at June 30, 2010 compared to 3,600 units at March 31, 2010.
“Our sales and order volume for the second quarter of 2010 reflects the continuing low level of demand for coal-carrying railcars,” said Ed Whalen, President and Chief Executive Officer. “However, our results for the second quarter benefited from a favorable sales mix and our on-going efforts to control spending. As has been our practice during this downturn, we will continue to focus on the factors within our control: maintaining operational efficiency, strict cost management, preservation of our strong liquidity position and financial flexibility. At the same time, we are continually evaluating strategic opportunities to ensure we emerge from the recession as a stronger company.”
Mr. Whalen stated, “We have begun to see some initial signs of improvement in the market that we believe could lead to increased demand for coal-carrying railcars. Year-over-year electricity generation and coal loadings continue to improve, coal stockpiles are down compared to the prior year and railcars continue to come out of storage. However, as you can see from our level of new orders in the quarter, demand has not yet improved and customers continue to remain cautious, which gives us little visibility regarding the timing of an industry recovery and a return to more normalized levels of demand. Looking forward, we expect railcar pricing to continue to be very competitive, keeping downward pressure on margins until volume recovers to more normalized levels.”
Gross margin for the second quarter of 2010 was $3.7 million, or 11.8%, compared to essentially break-even for the first quarter of 2010 and $16.0 million, or 15.3%, for the second quarter of 2009.
Selling, general and administrative expenses for the second quarter of 2010 were $5.8 million, compared to $5.7 million for the first quarter of 2010 and $6.7 million for the second quarter of 2009.
The Company’s effective tax rate for the second quarter of 2010 was 41.9% compared to 44.7% for the first quarter of 2010 and 24.5% for the second quarter of 2009. The favorable tax treatment of certain amortization provides additional tax benefit to the Company, increasing its effective tax rate in periods of loss and reducing its effective tax rate during periods of profitability.
Cash and marketable securities on-hand as of June 30, 2010 were $131.9 million, compared to $139.1 million as of March 31, 2010 and $152.4 million as of June 30, 2009. The Company recently announced that it has entered into a new $30 million revolving credit facility and cancelled its two previously undrawn credit facilities. The new credit facility remains undrawn.
Total railcars under lease totaled $66.5 million at the end of the second quarter of 2010 compared to $65.9 million at the end of the first quarter of 2010 and $71.1 million at the end of the second quarter of 2009.
The Company will host a conference call on Thursday, August 5, 2010 at 11:00 a.m. (Eastern Daylight Time) to discuss the Company's second quarter financial results. To participate in the conference call, please dial (877) 764-2008. 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 1:00 p.m. (Eastern Daylight Time) on August 5, 2010 until 11:59 p.m. (Eastern Daylight Time) on September 5, 2010. To access the replay, please dial (800) 475-6701. The replay pass code is 166191. An audio replay of the call will be available on the Company’s website within two days following the earnings call.
FreightCar America, Inc. manufactures railroad freight cars, with particular expertise in coal-carrying railcars. In addition to coal cars, FreightCar America designs and builds bulk commodity cars, flat cars, mill gondola cars, intermodal cars, coil steel cars and motor vehicle carriers. It is headquartered in Chicago, Illinois and has facilities in Danville, Illinois, Roanoke, Virginia and Johnstown, Pennsylvania. More information about FreightCar America is available on its website at www.freightcaramerica.com.
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 acceptance of customer orders; the highly competitive nature of our industry; the risk of lack of acceptance of our new railcar offerings by our customers; and the additional risk factors described in our filings with the Securities and Exchange Commission. 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.