FreightCar America Posts Fourth-Quarter Loss

Railcar manufacturer FreightCar America, Inc. reported fourth-quarter 2009 sales of $49.4 million and a net loss of $5.5 million. And while the Chicago-based company reported some positive orders early this quarter, the company expects that the new car market will be even more difficult in 2010 than it was last year.

Sales for the 2009 fourth quarter were down 10 percent from third quarter 2009 sales of $55.1 million and down significantly over fourth quarter 2008 sales of $271.9 million. Railcar deliveries totaled 697 units in the quarter, compared to 695 units delivered in the third quarter of 2009 and 3,624 units delivered in the fourth quarter of 2008.

Sales for 2009 were $248.5 million, down 67 percent from 2008 sales of $746.4 million. Net income for 2009 was $4.9 million, compared to $11.4 million for 2008.

Railcar deliveries in 2009 were 3,377 (2,297 cars sold and 1,080 cars leased) compared to deliveries of 10,276 cars in 2008 (8,366 cars sold and 1,910 cars leased).

"Our performance reflects the severity of the industry downturn we are facing," said Ed Whalen, president and CEO. He noted that the first half of 2009 was relatively strong as the company worked off its backlog and gained some additional orders. "However, the absence of any meaningful order activity in the second half of 2009 put significant downward pressure on earnings," he said.

The total backlog of unfilled orders was 265 units at the end of the fourth quarter of 2009, compared with 777 units at the end of the third quarter of 2009 and 2,424 units at the end of 2008. A bright spot is that the company received in early 2010 additional orders for more than 3,000 new railcars to be manufactured and delivered in 2010 and 2011. The company has also received an order for more than 500 used cars from its existing inventory.

"While we do not expect market conditions to materially improve in 2010, we are very pleased by the orders we have already received this year. These orders will provide an excellent base of business for us over the course of the year, allowing us to take on additional volume very efficiently as we meet our customers' needs," Whalen said.

While still less than 10 percent of overall sales, revenues from aftermarket part sales were up 17.6 percent in 2009 and refurbishment revenues nearly doubled. The freight car builder is hopeful about international opportunities to leverage its coal car expertise and capitalize on improving global economic conditions.

"We continue to work with our joint venture partner in India toward approval of our railcar design and hope to have a prototype in the market there for testing later this year," Whalen said. In 2008, FreightCar America entered into a joint venture agreement with Titagarh Wagons Ltd., Kolkata, India, to develop coal cars for the rapidly growing Indian rail market.