CHICAGO — FreightCar America reported net income of $7.0 million, or $0.59 per diluted share, for the three months ending June 30 on revenues of $104.3 million.
For the second quarter of 2008, the company generated sales of $141.3 million and a net loss of $400,000, or $0.03 per diluted share. These 2009 results are consistent with the preliminary second quarter financial metrics that the company announced on July 28, officials said.
The company recently announced that it had identified historical accounting errors in accounts payable that resulted in the understatement of its cumulative net earnings since the fourth quarter of 2007. As a result of the nature and timing of the review of these errors and their impact on the company’s consolidated financial statements, FreightCar America was unable to file its quarterly report for the quarter ending June 30 on time.
“The market for new railcars continues to be very challenging. However, we are very pleased with our financial results for the second quarter,” said Chris Ragot, president and CEO. “We are maximizing our opportunities in a difficult marketplace and tightly controlling our spending in order to emerge from this downturn in a position of strength.”
“We continue to focus on cash and preserving our strong balance sheet, recognizing how critical liquidity is in this market,” Ragot added. “The success of this initiative is reflected in our continuing strong cash position, with cash on hand of approximately $150 million at both the end of June and the end of August. Additionally, our two credit facilities, with a total capacity of $110 million, remain undrawn.”
Selling, general and administrative expenses for the second quarter of 2009 were $6.7 million, compared to $7.3 million in the second quarter of 2008 and $7.3 million in the first quarter of 2009. Mr. Ragot stated, “Given the softness of the market, we will continue to reduce costs to align our overhead structure with the size of the business. We still expect full year 2009 SG&A expenses to be $25 million to $26 million, or 20% less than 2008 expenses, and are critically evaluating opportunities to reduce SG&A even further for 2010.”
Net orders for new railcars totaled 694 units in the second quarter of 2009 compared to 538 units ordered (new orders of 1,438 units less cancelled orders of 900 units) in the second quarter of 2008 and orders of 339 units for the first quarter 2009. Railcar deliveries totaled 1,207 units in the quarter, compared to 2,326 units delivered in the second quarter of 2008 and 974 units delivered in the first quarter of 2009. Total backlog of unfilled orders was 1,472 units at the end of the quarter, compared with 1,985 units at the end of the first quarter of 2009.
The gross margin rate for the second quarter of 2009 was 15.3% compared to 5.2% for the second quarter of 2008. The increase in the rate was driven by the favorable mix of new car sales and an increase in parts sales and leasing revenues.