FreightCar America 2Q21: ‘We’ve Achieved the Majority of Our Goals’
For the second quarter ended June 30, 2021, FreightCar America’s consolidated revenues were $37.4 million, up 114% year-over-year, compared to $32.4 million in the 1Q21 and $17.5 million in 2Q20. The company delivered 313 railcars in 2Q21, compared to 309 in the 1Q21 and 100 in the 2Q20. Gross margin was $3.6 million, positive for the third consecutive quarter. Manufacturing operating income was $1.9 million, the first positive result in three years.
Consolidated operating loss for the 2Q21 was $2.5 million, compared to $13.2 million in 1Q21 and $12.9 million in 2Q20. Net loss in 2Q21 was $2.6 million, or $0.13 per share, compared to $37.9 million, or $1.89 per share, in 1Q21, and $12.8 million, or $0.97 per share, in 2Q20. Both consolidated operating loss and net loss for the current and prior periods included non-operating items that impacted results, including non-cash income of $3.5 million related to the change in the fair market value of warrant liability in the 2Q21, reflecting share price depreciation during the period. In 1Q21, there was a non-cash charge of $22.1 million, reflecting share price appreciation during the period; and restructuring and impairment gains of $0.1 million in the 2Q21, compared to restructuring and impairment charges of $6.7 million in 1Q21 and $0.3 million in2Q20.
Adjusted EBITDA loss for the 2Q21 was $1.5 million, compared to $0.5 million in1Q21 and $10.3 million for the 2Q20. The Adjusted EBITDA excludes non-cash income. Total cash, cash equivalents, restricted cash equivalents, marketable securities and restricted certificates of deposit (total cash) was $20.7 million as of June 30, 2021, compared to $31.7 million as of March 31, 2021. The decrease was due to an increase in the company’s VAT (value-added tax)* receivable and other working capital to support higher production levels. The VAT receivable in Mexico was $21.3 million as of June 30, 2021.
FreightCar America’s quarter-end backlog totaled 2,200 railcars with an aggregate value of approximately $224 million. The company raised its 2021 delivery outlook to 1,750-1,850 railcars, up from 1,600-1,750.
“We are pleased to have achieved the majority of our goals for the quarter, which included our third consecutive quarter of positive gross margin, positive operating income at the manufacturing level, and a solid mix of new business awarded,” said FreightCar America President and CEO Jim Meyerf. “For the first half of fiscal 2021, our Adjusted EBITDA loss decreased to $2.0 million compared to a loss of $23.2 million in the same period of 2020. This improvement, in the face of multiple supply chain constraints and significant raw material inflation, truly highlights the potential of our new footprint.
“We remain encouraged by signs of an improving demand environment across our end-markets. Sales inquiries remain positive, and we have raised our 2021 outlook again for railcar deliveries. Additionally, we are thrilled to share that our Board of Directors has approved plans to add two more production lines at the Castaños manufacturing facility, which will double our capacity within a year. This planned expansion is an essential next step to driving incremental volumes and significantly improving our long-term earnings profile.
“We are also benefiting from the relationship with our financial partner, including the recently amended agreement that provides for a $25 million line of credit. This new line of credit, combined with cash and equivalents of $21 million, will support our working capital and growth needs for the foreseeable future. We still have much work to do, but remain confident that we are on the right path to create significant value for all of our stakeholders.”
Railway Age Editor-in-Chief William C. Vantuono and Financial Editor David Nahass in May 2021 spoke with Jim Meyer about the efforts to turn the historic, 120-year-old company around by consolidating manufacturing in Mexico and positioning it to meet the needs of the market.
*A value-added tax (VAT) is a consumption tax placed on a product whenever value is added at each stage of the supply chain, from production to the point of sale. The amount of VAT that the user pays is on the cost of the product, less any of the costs of materials used in the product that have already been taxed.
The post FreightCar America 2Q21: ‘We’ve Achieved the Majority of Our Goals’ appeared first on Railway Age.