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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 March 31, 2021

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

o

 

Accelerated filer

o

Non-accelerated filer

x

 

Smaller reporting company

x

 

Emerging growth company

o

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 May 7, 2021, there were 15,541,920 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
March 31, 2021 and December 31, 20
20

3

Condensed Consolidated Statements of Operations (Unaudited) for the
Three Months Ended March 31, 2021 and 20
20

4

Condensed Consolidated Statements of Comprehensive Loss (Unaudited) for the
Three Months Ended March 31, 2021 and 20
20

5

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) for the
Three Months Ended March 31, 2021 and 20
20

6

Condensed Consolidated Statements of Cash Flows (Unaudited) for the
Three Months Ended March 31, 2021 and 20
20

7

Notes to Condensed Consolidated Financial Statements (Unaudited)

8

2.

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

20

4.

Controls and Procedures

27

PART II – OTHER INFORMATION

1.

Legal Proceedings

28

2.

Unregistered Sales of Equity Securities and Use of Proceeds

28

3.

Defaults Upon Senior Securities

28

4.

Mine Safety Disclosures

28

5.

Other Information

28

6.

Exhibits

28

 

Signatures

29


2


PART I – FINANCIAL INFORMATION

Item 1.    Financial Statements.

FreightCar America, Inc.

Condensed Consolidated Balance Sheets (Unaudited)

March 31, 2021

December 31, 2020

Assets

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

Current assets

Cash, cash equivalents and restricted cash equivalents

$

31,556 

$

54,047 

Restricted certificates of deposit

182 

182 

Accounts receivable, net of allowance for doubtful accounts of $1,006 and $1,235 respectively

6,217 

9,421 

VAT receivable

13,216 

4,462 

Inventories, net

37,054 

38,831 

Assets held for sale

-

10,383 

Prepaid expenses

8,998

3,652 

Total current assets

97,223

120,978 

Property, plant and equipment, net

19,516 

19,642 

Railcars available for lease, net

20,791 

20,933 

Right of use asset

17,712 

18,152 

Other long-term assets

2,828

3,037 

Total assets

$

158,070

$

182,742 

Liabilities and Stockholders’ Equity

Current liabilities

Accounts and contractual payables

$

27,168 

$

18,654 

Accrued payroll and other employee costs

1,282 

2,505 

Reserve for workers' compensation

2,629 

2,645 

Accrued warranty

4,008 

5,216 

Customer deposits

-

4,351 

Deferred income state and local incentives, current

1,842 

2,219 

Lease liability, current

2,027 

11,635 

Current portion of long-term debt

19,315 

17,605 

Other current liabilities

3,578

6,319 

Total current liabilities

61,849

71,149 

Long-term debt, net of current portion

36,811 

37,668 

Warrant liability

34,858 

12,730 

Accrued pension costs

6,698 

7,046 

Deferred income state and local incentives, long-term

2,325 

2,503 

Lease liability, long-term

18,074 

18,549 

Other long-term liabilities

5,162 

2,600 

Total liabilities

165,777

152,245 

Stockholders’ equity

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 March 31, 2021 and December 31, 2020)

-

-

Common stock, $0.01 par value, 50,000,000 shares authorized, 16,033,481 and 15,861,406 shares issued at March 31, 2021 and December 31, 2020, respectively

161 

159 

Additional paid in capital

82,519 

82,064 

Treasury stock, at cost, 446,587 and 327,577 shares at March 31, 2021 and December 31, 2020, respectively

(1,782)

(1,344)

Accumulated other comprehensive loss

(11,607)

(11,763)

Accumulated deficit

(76,998)

(38,619)

Total stockholders' equity (deficit)

(7,707)

30,497 

Total liabilities and stockholders’ equity

$

158,070

$

182,742 

See Notes to Condensed Consolidated Financial Statements (Unaudited).

3


FreightCar America, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

Three Months Ended March 31,

2021

2020

Revenues

$

32,370

$

5,197

Cost of sales

30,566

14,000

Gross profit (loss)

1,804

(8,803)

Selling, general and administrative expenses

9,151

7,410

Restructuring and impairment charges

6,650

880

Operating loss

(13,997)

(17,093)

Interest expense

(2,502)

(296)

Loss on change in fair market value of warrant liability

(22,128)

-

Other income

115

224

Loss before income taxes

(38,512)

(17,165)

Income tax benefit

(133)

(2)

Net loss

(38,379)

(17,163)

Less Net loss attributable to noncontrolling interest in JV

-

(216)

Net loss attributable to FreightCar America

$

(38,379)

$

(16,947)

Net loss per common share attributable to FreightCar America- basic

$

(1.92)

$

(1.29)

Net loss per common share attributable to FreightCar America- diluted

$

(1.92)

$

(1.29)

Weighted average common shares outstanding - basic

20,001,505

12,366,880

Weighted average common shares outstanding - diluted

20,001,505

12,366,880

See Notes to Condensed Consolidated Financial Statements (Unaudited).

4


FreightCar America, Inc.

Condensed Consolidated Statements of Comprehensive Loss

(Unaudited)

Three Months Ended March 31,

2021

2020

(in thousands)

Net loss

$

(38,379)

$

(17,163)

Other comprehensive income net of tax:

Pension and postretirement liability adjustments, net of tax

156

141

Comprehensive loss

$

(38,223)

$

(17,022)

See Notes to Condensed Consolidated Financial Statements (Unaudited).

5


FreightCar America, Inc.

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

(in thousands, except for share data)

FreightCar America Shareholders

Accumulated

Total

Additional

Other

Retained

Stockholders'

Common Stock

Paid In

Treasury Stock

Comprehensive

Earnings

Noncontrolling

Equity

Shares

Amount

Capital

Shares

Amount

Loss

(Deficit)

Interest in JV

(Deficit)

Balance, December 31, 2019

12,731,678 

$

127 

$

83,027 

(44,855)

$

(989)

$

(10,780)

$

45,824 

$

(55)

$

117,154 

Net loss

-

-

-

-

-

-

(16,947)

(216)

(17,163)

Other comprehensive income

-

-

-

-

-

141 

-

-

141 

Restricted stock awards

587,519 

6 

(6)

-

-

-

-

-

-

Employee stock settlement

-

-

-

(5,717)

(9)

-

-

-

(9)

Forfeiture of restricted stock awards

-

-

126 

(102,045)

(126)

-

-

-

-

Stock-based compensation recognized

-

-

227 

-

-

-

-

-

227 

Balance, March 31, 2020

13,319,197 

$

133 

$

83,374 

(152,617)

$

(1,124)

$

(10,639)

$

28,877 

$

(271)

$

100,350 

Balance, December 31, 2020

15,861,406 

$

159 

$

82,064 

(327,577)

$

(1,344)

$

(11,763)

$

(38,619)

$

-

$

30,497 

Net loss

-

-

-

-

-

-

(38,379)

-

(38,379)

Other comprehensive income

-

-

-

-

-

156 

-

-

156 

Restricted stock awards

177,953 

2 

(2)

-

-

-

-

-

-

Employee stock settlement

(1,378)

-

(5)

(2,215)

(7)

-

-

-

(12)

Forfeiture of restricted stock awards

(4,500)

-

431 

(116,795)

(431)

-

-

-

-

Stock-based compensation recognized

-

-

31 

-

-

-

-

-

31 

Balance, March 31, 2021

16,033,481 

$

161 

$

82,519 

(446,587)

$

(1,782)

$

(11,607)

$

(76,998)

$

-

$

(7,707)

See Notes to Condensed Consolidated Financial Statements (Unaudited).


6


FreightCar America, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

Three Months Ended March 31,

2021

2020

Cash flows from operating activities

(in thousands)

Net loss

$

(38,379)

$

(17,163)

Adjustments to reconcile net loss to net cash flows used in operating activities:

Restructuring and impairment charges

6,650 

880 

Depreciation and amortization

1,197 

3,013 

Non-cash lease expense on right-of-use assets

440 

990 

Recognition of deferred income from state and local incentives

(555)

(555)

Loss on change in fair market value for warrant liability

22,128 

-

Stock-based compensation recognized

2,662 

227 

Non-cash interest expense

982 

-

Other non-cash items, net

(36)

1,868 

Changes in operating assets and liabilities, net of acquisitions:

Accounts receivable

3,204 

1,265 

VAT receivable

(8,754)

8 

Inventories

3,419 

(17,809)

Other assets

(5,133)

(1,273)

Accounts and contractual payables

320 

6,953 

Accrued payroll and employee benefits

(1,166)

(654)

Income taxes receivable/payable

(134)

(