“Our results this quarter underscore the power of disciplined commercial decision making combined with running the most efficient manufacturing operation in the industry. While the third quarter presented unique challenges for FreightCar America (FCR), including the disruptive impacts of the migrant issue and subsequent rail service interruption, we continued to improve the quality of our performance,” said President and CEO Jim Meyer during a Nov. 6 earnings report.
“Although top-line results were pressured, gross margin increased substantially with Adjusted EBITDA increasing to approximately $7,000 per railcar during the quarter, compared to approximately $2,000 in the prior year. This aligns well with our expectations as we progress toward full-scale operations and prepare to make the first deliveries from our fourth production line in the upcoming quarter,” Meyer added.
For the third-quarter 2023 ended Sept. 30, 2023, FCR revenue came in at $61.9 million on 503 railcars, a decrease of 27.8% compared to revenues of $85.7 million on 783 railcars in third-quarter 2022.
Other third-quarter 2023 highlights:
- Gross margin of 14.9% with gross profit of $9.2 million, compared to gross margin of 5.3% with gross profit of $4.6 million in the third quarter of 2022.
- Net income of $3.2 million, or ($0.03) per share and Adjusted Net income of $176 thousand, or ($0.14) per share.
- Adjusted EBITDA of $3.5 million, compared to Adjusted EBITDA of $1.6 million in the third quarter of 2022.
- Railcar orders of 1,015 in the third quarter and 3,356 year-to-date, with quarter-end backlog totaling 3,800 railcars for an aggregate value of approximately $452 million.
- Updated FY23 guidance range of $365 to $380 million for revenue and 3,150 to 3,300 for railcar deliveries; Reaffirmed FY23 Adjusted EBITDA guidance of $18 to $22 million.
Fiscal Year 2023 Outlook
FCA has raised its outlook for FY23 as follows:
“While there were macro factors at play during the quarter that muted our top-line results, the true potential of FreightCar America continues to come into focus following our extensive restructuring efforts over the last several years,” said FreightCar America CFO Mike Riordan. “Given the atypical events during the quarter, and what may continue into the fourth quarter, we are lowering our revenue guidance to between $365 million and $380 million, as well as railcar deliveries to between 3,150 and 3,300, while reaffirming our previously stated full year Adjusted EBITDA guidance range of $18 million to $22 million.”
“In the quarter, FreightCar America demonstrated the ability to successfully navigate challenges while operating efficiently. We remain extremely confident in the Company’s direction, the strength and quality of the business we continue to build, and our ability to deliver results,” Riordan added.