FreightCar America(RAIL) - 2025 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION Provides unaudited condensed consolidated financial statements and management's discussion for the period ended June 30, 2025 Financial Statements Presents FreightCar America's unaudited condensed consolidated financial statements, including balance sheets, income statements, and cash flows, with accounting policy notes Condensed Consolidated Financial Statements Highlights key financial figures for H1 2025, including a net income of $62.1 million, decreased revenues, and improved stockholders' deficit Condensed Consolidated Statements of Operations Highlights (Six Months Ended June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | Change | | :--- | :--- | :--- | :--- | | Revenues | $214,913 | $308,474 | -30.3% | | Gross Profit | $32,215 | $29,833 | +8.0% | | Operating Income | $11,578 | $17,044 | -32.1% | | Net Income (Loss) | $62,127 | $(3,394) | N/A | | Diluted EPS | $1.79 | $(0.41) | N/A | Condensed Consolidated Balance Sheet Highlights | Metric | June 30, 2025 (in thousands) | Dec 31, 2024 (in thousands) | Change | | :--- | :--- | :--- | :--- | | Total Current Assets | $204,024 | $145,031 | +40.7% | | Total Assets | $328,093 | $224,216 | +46.3% | | Total Liabilities | $411,555 | $374,489 | +9.9% | | Total Stockholders' Deficit | $(83,462) | $(150,273) | +44.5% | Condensed Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $21,322 | $31,875 | | Net cash used in investing activities | $(353) | $(2,269) | | Net cash used in financing activities | $(4,066) | $(30,796) | | Net increase (decrease) in cash | $16,903 | $(1,190) | Notes to Condensed Consolidated Financial Statements Details accounting policies, revenue disaggregation, segment performance, new debt facilities, warrant liability impact, and a significant income tax benefit - The company received an Employee Retention Credit (ERC) of $3.1 million during the quarter, recognized as other income[27] Revenue by Source (Six Months Ended June 30) | Revenue Source | 2025 (in thousands) | 2024 (in thousands) | Change | | :--- | :--- | :--- | :--- | | Railcar sales | $200,784 | $296,674 | -32.3% | | Aftermarket sales | $13,981 | $10,218 | +36.8% | | Leasing revenues | $148 | $1,582 | -90.6% | | Total revenues | $214,913 | $308,474 | -30.3% | Segment Operating Income (Loss) (Six Months Ended June 30, 2025) | Segment | Revenues (in thousands) | Operating Income (Loss) (in thousands) | | :--- | :--- | :--- | | Manufacturing | $200,932 | $26,277 | | Aftermarket | $13,981 | $4,103 | | Corporate | - | $(18,802) | | Total | $214,913 | $11,578 | - On December 31, 2024, the company entered into a new $115 million term loan and used the proceeds to redeem all outstanding shares of its Series C Preferred Stock[50][59] - The company's effective tax rate was significantly impacted by the release of the majority of the valuation allowance in the United States on federal and state deferred tax assets, resulting in a large tax benefit[78][79][80] Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Discusses financial performance, strategic shift to higher-margin railcars, segment results, liquidity, new debt, and capital expenditure plans - The company's backlog of unfilled orders increased to 3,624 units with an estimated sales value of $317 million as of June 30, 2025, up from 2,797 units valued at $267 million at the end of 2024[87] Results of Operations Analyzes revenue decline due to lower railcar volumes, offset by improved gross profit and margin from product mix, and impacts from warrant revaluation and tax benefits - The decrease in Manufacturing segment revenues for both the three and six-month periods was primarily due to a strategic shift in product mix toward higher-margin railcars, resulting in lower delivery volumes but improved gross margins[88][96] Gross Margin Comparison (Six Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Consolidated Gross Margin | 15.0% | 9.7% | | Manufacturing Gross Margin | 13.5% | 8.3% | - Consolidated SG&A expenses for the six months ended June 30, 2025 increased by $4.6 million year-over-year, primarily due to a $1.1 million increase in stock-based compensation and a $3.0 million increase in professional services expenses[98] Liquidity and Capital Resources Details the company's liquidity, new credit facilities, cash flow from operations, and projected capital expenditures for 2025 - The company entered into a new $115 million Term Loan maturing in 2028 and a new $35 million ABL facility maturing in 2030, enhancing its liquidity profile[104][106] - Management believes that current cash balances are sufficient to meet expected liquidity needs for at least the next twelve months[109] - Capital expenditures for 2025 are projected to be between $9.0 million and $10.0 million, focused on enhancing machinery and equipment at the Manufacturing Facility[115] Controls and Procedures Management confirmed the effectiveness of disclosure controls and procedures, with no material changes to internal control over financial reporting - The company's principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of June 30, 2025[117] - No material changes to the company's internal control over financial reporting occurred during the quarter ended June 30, 2025[118] PART II – OTHER INFORMATION Presents other required information, including legal proceedings, equity sales, and exhibits Legal Proceedings Discusses ongoing litigation, which management believes will not materially impact the company's financial position or results - The company does not expect current legal proceedings to have a material adverse effect on its financial condition or results[71][121] Unregistered Sales of Equity Securities and Use of Proceeds Reports the company's purchases of 19,332 equity shares at an average price of $8.33, mainly for tax obligations on employee stock awards Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 2025 | - | - | | May 2025 | 2,116 | $7.03 | | June 2025 | 17,216 | $8.49 | | Total | 19,332 | $8.33 | Defaults Upon Senior Securities Confirms no defaults occurred on the company's senior securities during the reporting period - None[124] Mine Safety Disclosures States that this disclosure item is not applicable to the company's operations - Not applicable[125] Other Information Indicates no additional information is reported for this period - None[126] Exhibits Lists exhibits filed with the Form 10-Q, including officer certifications and Inline XBRL documents - Exhibits filed include Sarbanes-Oxley Act certifications for the CEO and CFO (Exhibits 31.1, 31.2, 32) and various Inline XBRL documents for financial reporting (Exhibits 101, 104)[127][128]