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FreightCar America Swings to Loss in Fourth Quarter

February 21st, 2013

FreightCar America reported a net loss of $1.0 million, or -$.08 per diluted share, in the fourth quarter of 2012, compared with net income of $8.5 million, or $0.71 per diluted share, in the fourth quarter of 2011.

Quarterly revenue was $116.6 million, down 37.7% from $187.1 million in the same quarter in the previous year.

The manufacturing segment’s revenue in the fourth quarter was $109.3 million, falling from $179.2 million in the fourth quarter in 2011. Quarterly operating income for the segment was $6.5 million, dropping from $16.5 million in the fourth quarter of 2011.

Deliveries in the fourth quarter decreased to 1,308 railcars, including 528 new railcars and 780 rebuilt railcars. In 2011, 2,489 railcars delivered in the fourth quarter. There were 473 units ordered in the fourth quarter of 2012, compared with 4,481 units ordered in the fourth quarter of 2011. Total manufacturing backlog was 2,881 units in the fourth quarter of 2012, compared with 8,303 units in the fourth quarter of 2011.

Railcars under lease totaled $43.4 million at the end of the fourth quarter of 2012, compared with $51.0 million at the end of the third quarter of 2012. The decrease in railcars under lease reflects sales of leased railcars, the Chicago-based company said in a written statement.

For the full year of 2012, profit was $19.1 million, or $1.60 per share, compared with $4.9 million, or $0.41 per diluted share, in 2011. Annual revenue was $677.4 million, up from $487.0 million in 2011.

In 2012, the manufacturing segment’s revenue increased to $644.0 million in 2012 from $453.1 million in 2011. The gain in revenue was driven by higher railcar deliveries and higher average revenue per car, the company said. Operating income for the segment was $58.3 million, rising from $25.9 million in 2011. Railcar deliveries totaled 8,325 for 2012, up 35% from 6,188 railcars delivered in 2011.

Fourth quarter results were affected by a decrease in coal car demand and product line changeover costs at both of the railroad freight car manufacturer’s plants, although 2012 was still a good year, said Ed Whalen, president and CEO.

“As we look forward, 2013 will be a challenging year for our traditional coal car business, but the long-term need to replace the eastern coal car fleet remains,” Whalen added.

The company expects its 2013 unit deliveries to be between 4,000 and 6,000 units, according to the Stifel Nicolaus Transportation, Logistics and Equipment Research Group.

The company has also sub-leased about 25% of Navistar’s Cherokee, Ala., manufacturing facility to expand capacity. The first deliveries of new railcars from the facility are expected in the second half of 2013. When fully operational, it will have the capacity to build more than 7,000 railcars per year.

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