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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the Quarterly period ended June 30, 2022

or

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission File Number: 000-51237

 

FREIGHTCAR AMERICA, INC.

(Exact name of registrant as specified in its charter)

 

 

 

 

Delaware

 

25-1837219

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

 

 

125 South Wacker Drive, Suite 1500

Chicago, Illinois

 

60606

(Address of principal executive offices)

 

(Zip Code)

 

(800) 458-2235

(Registrant’s telephone number, including area code)

 

 

 

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, par value $0.01 per share

RAIL

The Nasdaq Global Market

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

Yes No

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

 

Yes No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

 

 

 

 

 

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

 

 

 

Emerging growth company

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

 

If an emerging growth company, indicate by a 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.

 

 

As of July 28, 2022, there were 16,700,850 shares of the registrant’s common stock outstanding.

 


 

FREIGHTCAR AMERICA, INC.

 

INDEX TO FORM 10-Q

 

 

 

 

Item
Number

 

Page
Number

 

PART I – FINANCIAL INFORMATION

 

1.

Financial Statements:

 

 

Condensed Consolidated Balance Sheets (Unaudited) as of
June 30, 2022 and December 31, 2021

3

 

Condensed Consolidated Statements of Operations (Unaudited) for the
Three and Six Months Ended June 30, 2022 and 2021

4

 

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) for the
Three and Six Months Ended June 30, 2022 and 2021

5

 

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) for the
Three and Six Months Ended June 30, 2022 and 2021

6

 

Condensed Consolidated Statements of Cash Flows (Unaudited) for the
Six Months Ended June 30, 2022 and 2021

8

 

Notes to Condensed Consolidated Financial Statements (Unaudited)

9

2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

22

4.

Controls and Procedures

31

 

PART II – OTHER INFORMATION

 

1.

Legal Proceedings

32

2.

Unregistered Sales of Equity Securities and Use of Proceeds

32

3.

Defaults Upon Senior Securities

32

4.

Mine Safety Disclosures

32

5.

Other Information

32

6.

Exhibits

32

 

Signatures

33

 

 

 

2


 

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

FreightCar America, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except for share data)

(Unaudited)

 

 

 

June 30,
2022

 

 

December 31,
2021

 

Assets

 

 

 

Current assets

 

 

 

 

 

 

Cash, cash equivalents and restricted cash equivalents

 

$

21,531

 

 

$

26,240

 

Accounts receivable, net of allowance for doubtful accounts of $180 and $323 respectively

 

 

23,488

 

 

 

9,571

 

VAT receivable

 

 

13,307

 

 

 

31,136

 

Inventories, net

 

 

75,845

 

 

 

56,012

 

Related party asset

 

 

5,121

 

 

 

8,680

 

Prepaid expenses

 

 

11,188

 

 

 

5,087

 

Total current assets

 

 

150,480

 

 

 

136,726

 

Property, plant and equipment, net

 

 

19,284

 

 

 

18,236

 

Railcars available for lease, net

 

 

19,852

 

 

 

20,160

 

Right of use asset

 

 

16,033

 

 

 

16,669

 

Other long-term assets

 

 

6,705

 

 

 

8,873

 

Total assets

 

$

212,354

 

 

$

200,664

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts and contractual payables

 

$

46,767

 

 

$

41,185

 

Related party accounts payable

 

 

5,454

 

 

 

8,870

 

Accrued payroll and other employee costs

 

 

1,883

 

 

 

2,912

 

Reserve for workers' compensation

 

 

1,271

 

 

 

1,563

 

Accrued warranty

 

 

4,788

 

 

 

2,533

 

Customer deposits

 

 

18,706

 

 

 

3,300

 

Deferred income state and local incentives, current

 

 

 

 

 

1,291

 

Lease liability, current

 

 

1,623

 

 

 

1,955

 

Other current liabilities

 

 

5,626

 

 

 

5,711

 

Total current liabilities

 

 

86,118

 

 

 

69,320

 

Long-term debt, net of current portion

 

 

81,960

 

 

 

79,484

 

Warrant liability

 

 

34,498

 

 

 

32,514

 

Accrued pension costs

 

 

 

 

 

35

 

Deferred income state and local incentives, long-term

 

 

 

 

 

1,216

 

Lease liability, long-term

 

 

15,995

 

 

 

16,617

 

Other long-term liabilities

 

 

3,934

 

 

 

3,134

 

Total liabilities

 

 

222,505

 

 

 

202,320

 

Stockholders’ deficit

 

 

 

 

 

 

Preferred stock, $0.01 par value, 2,500,000 shares authorized (100,000 shares each
   designated as Series A voting and Series B non-voting,
0 shares issued and outstanding
   at June 30, 2022 and December 31, 2021)

 

-

 

 

-

 

Common stock, $0.01 par value, 50,000,000 shares authorized, 16,700,850 and 15,947,228
   shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively

 

 

198

 

 

 

190

 

Additional paid-in capital

 

 

86,380

 

 

 

83,742

 

Accumulated other comprehensive loss

 

 

(5,355

)

 

 

(5,522

)

  Accumulated deficit

 

 

(91,374

)

 

 

(80,066

)

Total stockholders' deficit

 

 

(10,151

)

 

 

(1,656

)

Total liabilities and stockholders’ deficit

 

$

212,354

 

 

$

200,664

 

 

See Notes to Condensed Consolidated Financial Statements (Unaudited).

 

3


 

FreightCar America, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except for share and per share data)

(Unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

Revenues

 

$

56,786

 

 

$

37,354

 

 

$

150,022

 

 

$

69,724

 

Cost of sales

 

 

50,197

 

 

 

35,357

 

 

 

133,375

 

 

 

66,411

 

Gross profit

 

 

6,589

 

 

 

1,997

 

 

 

16,647

 

 

 

3,313

 

Selling, general and administrative expenses

 

 

4,053

 

 

 

6,294

 

 

 

14,766

 

 

 

15,445

 

Restructuring and impairment charges

 

 

 

 

 

(120

)

 

 

 

 

 

6,530

 

Operating income (loss)

 

 

2,536

 

 

 

(4,177

)

 

 

1,881

 

 

 

(18,662

)

Interest expense

 

 

(5,757

)

 

 

(3,212

)

 

 

(11,462

)

 

 

(5,714

)

Gain (loss) on change in fair market value of warrant liability

 

 

18,746

 

 

 

3,452

 

 

 

(1,984

)

 

 

(18,676

)

Other income

 

 

661

 

 

 

230

 

 

 

2,157

 

 

 

345

 

Income (loss) before income taxes

 

 

16,186

 

 

 

(3,707

)

 

 

(9,408

)

 

 

(42,707

)

Income tax provision

 

 

1,647

 

 

 

504

 

 

 

1,900

 

 

 

636

 

Net income (loss)

 

$

14,539

 

 

$

(4,211

)

 

$

(11,308

)

 

$

(43,343

)

Net income (loss) per common share- basic

 

$

0.58

 

 

$

(0.24

)

 

$

(0.47

)

 

$

(2.19

)

Net income (loss) per common share - diluted

 

$

0.58

 

 

$

(0.24

)

 

$

(0.47

)

 

$

(2.19

)

Weighted average common shares outstanding – basic

 

 

24,499,784

 

 

 

20,160,410

 

 

 

23,994,327

 

 

 

20,084,199

 

Weighted average common shares outstanding – diluted

 

 

24,499,784

 

 

 

20,160,410

 

 

 

23,994,327

 

 

 

20,084,199

 

 

See Notes to Condensed Consolidated Financial Statements (Unaudited).

 

4


 

FreightCar America, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(In thousands)

(Unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

14,539

 

 

$

(4,211

)

 

$

(11,308

)

 

$

(43,343

)

Other comprehensive income, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

Pension and postretirement liability adjustments, net of tax

 

 

83

 

 

 

156

 

 

 

167

 

 

 

312

 

Comprehensive income (loss)

 

$

14,622

 

 

$

(4,055

)

 

$

(11,141

)

 

$

(43,031

)

 

See Notes to Condensed Consolidated Financial Statements (Unaudited).

 

5


 

FreightCar America, Inc.

Condensed Consolidated Statements of Stockholders’ Deficit

(In thousands, except for share data)

(Unaudited)

 

 

 

 

 

 

FreightCar America Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid In

 

 

Treasury Stock

 

 

Comprehensive

 

 

Retained

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Shares

 

 

Amount

 

 

Loss

 

 

Deficit

 

 

Deficit

 

Balance, March 31, 2021

 

 

16,033,481

 

 

$

161

 

 

$

82,519

 

 

 

(446,587

)

 

$

(1,782

)

 

$

(11,607

)

 

$

(77,751

)

 

$

(8,460

)

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(4,211

)

 

 

(4,211

)

Other comprehensive income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

156

 

 

 

-

 

 

 

156

 

Restricted stock awards

 

 

35,512

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Employee stock settlement

 

 

(260

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Forfeiture of restricted stock awards

 

 

(87,991

)

 

 

(1

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1

)

Stock-based compensation recognized

 

 

-

 

 

 

-

 

 

 

163

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

163

 

Equity Fees

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Balance, June 30, 2021

 

 

15,980,742

 

 

$

160

 

 

$

82,682

 

 

 

(446,587

)

 

$

(1,782

)

 

$

(11,451

)

 

$

(81,962

)

 

$

(12,353

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, March 31, 2022

 

 

16,525,266

 

 

$

196

 

 

$

85,127

 

 

 

-

 

 

$

-

 

 

$

(5,438

)

 

$

(105,913

)

 

$

(26,028

)

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

14,539

 

 

 

14,539

 

Other comprehensive income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

83

 

 

 

-

 

 

 

83

 

Restricted stock awards

 

 

60,543

 

 

 

1

 

 

 

(1

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Employee stock settlement

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Forfeiture of restricted stock awards

 

 

(70,894

)

 

 

(1

)

 

 

(6

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(7

)

Stock-based compensation recognized

 

 

-

 

 

 

-

 

 

 

262

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

262

 

Equity fees

 

 

185,935

 

 

 

2

 

 

 

998

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,000

 

Balance, June, 30, 2022

 

 

16,700,850

 

 

$

198

 

 

$

86,380

 

 

 

-

 

 

$

 

 

$

(5,355

)

 

$

(91,374

)

 

$

(10,151

)

 

 

 

See Notes to Condensed Consolidated Financial Statements (Unaudited).

 

 

 

6


 

FreightCar America, Inc.

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

(In thousands, except for share data)

(Unaudited)

 

 

 

 

 

 

FreightCar America Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

Stockholders'

 

 

 

Common Stock

 

 

Paid In

 

 

Treasury Stock

 

 

Comprehensive

 

 

Retained

 

 

Equity

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Shares

 

 

Amount

 

 

Loss

 

 

Deficit

 

 

(Deficit)

 

Balance, December 31, 2020

 

 

15,861,406

 

 

$

159

 

 

$

82,064

 

 

 

(327,577

)

 

$

(1,344

)

 

$

(11,763

)

 

$

(38,619

)

 

$

30,497

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(43,343

)

 

 

(43,343

)

Other comprehensive income

 

 

-

 

 

 

-

 

 

 

-