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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 September 30, 2024

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)

 

Securities registered pursuant to Section 12(b) of the Act:

 

 

 

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

Accelerated filer

Non-accelerated filer

Smaller reporting company

 

 

Emerging growth company

 

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 November 5, 2024, there were 18,893,972 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
September 30, 2024 and December 31, 2023

3

 

Condensed Consolidated Statements of Operations (Unaudited) for the
Three and Nine Months Ended September 30, 2024 and 2023

4

 

Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) for the
Three and Nine Months Ended September 30, 2024 and 2023

5

 

Condensed Consolidated Statements of Mezzanine Equity and Stockholders’ Deficit (Unaudited) for the
Three and Nine Months Ended September 30, 2024 and 2023

6

 

Condensed Consolidated Statements of Cash Flows (Unaudited) for the
Nine Months Ended September 30, 2024 and 2023

8

 

Notes to Condensed Consolidated Financial Statements (Unaudited)

9

2.

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

18

4.

Controls and Procedures

24

 

PART II – OTHER INFORMATION

 

1.

Legal Proceedings

25

2.

Unregistered Sales of Equity Securities and Use of Proceeds

25

3.

Defaults Upon Senior Securities

25

4.

Mine Safety Disclosures

25

5.

Other Information

25

6.

Exhibits

25

Signatures

26

 

 

 

2

 

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

FreightCar America, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except for share data)

(Unaudited)

 

 

 

September 30,
2024

 

 

December 31,
2023

 

Assets

 

 

 

Current assets

 

 

 

 

 

 

Cash, cash equivalents and restricted cash equivalents

 

$

44,830

 

 

$

40,560

 

Accounts receivable, net of allowance for credit losses of $74 and $18 respectively

 

 

24,319

 

 

 

6,408

 

VAT receivable

 

 

2,489

 

 

 

2,926

 

Inventories, net

 

 

84,812

 

 

 

125,022

 

Assets held for sale

 

 

629

 

 

 

—

 

Related party asset

 

 

936

 

 

 

638

 

Prepaid expenses

 

 

10,100

 

 

 

4,867

 

Total current assets

 

 

168,115

 

 

 

180,421

 

Property, plant and equipment, net

 

 

30,461

 

 

 

31,258

 

Railcars available for lease, net

 

 

—

 

 

 

2,842

 

Right of use asset operating lease

 

 

2,514

 

 

 

2,826

 

Right of use asset finance lease

 

 

43,823

 

 

 

40,277

 

Other long-term assets

 

 

1,036

 

 

 

1,835

 

Total assets

 

$

245,949

 

 

$

259,459

 

Liabilities, Mezzanine Equity and Stockholders’ Deficit

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts and contractual payables

 

$

74,355

 

 

$

84,417

 

Related party accounts payable

 

 

2,493

 

 

 

2,478

 

Accrued payroll and other employee costs

 

 

7,447

 

 

 

5,738

 

Accrued warranty

 

 

1,493

 

 

 

1,602

 

Customer deposits

 

 

8,865

 

 

 

—

 

Current portion of long-term debt

 

 

—

 

 

 

29,415

 

Other current liabilities

 

 

10,196

 

 

 

13,711

 

Total current liabilities

 

 

104,849

 

 

 

137,361

 

Warrant liability

 

 

162,382

 

 

 

36,801

 

Accrued pension costs

 

 

1,226

 

 

 

1,046

 

Lease liability operating lease, long-term

 

 

2,778

 

 

 

3,164

 

Lease liability finance lease, long-term

 

 

45,482

 

 

 

41,273

 

Other long-term liabilities

 

 

1,660

 

 

 

2,562

 

Total liabilities

 

 

318,377

 

 

 

222,207

 

Commitments and contingencies

 

 

 

 

 

 

Mezzanine equity

 

 

 

 

 

 

Series C Preferred stock, $0.01 par value, 85,412 shares authorized, 85,412 shares issued and outstanding at each of September 30, 2024 and December 31, 2023, respectively. Liquidation value $108,388 and $95,048 at September 30, 2024 and December 31, 2023, respectively.

 

 

83,889

 

 

 

83,458

 

Stockholders’ deficit

 

 

 

 

 

 

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 September 30, 2024 and December 31, 2023)

 

 

—

 

 

 

—

 

Common stock, $0.01 par value, 50,000,000 shares authorized, 18,884,838 and 17,903,437
   shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

 

 

220

 

 

 

210

 

Additional paid-in capital

 

 

97,098

 

 

 

94,067

 

Accumulated other comprehensive income

 

 

84

 

 

 

2,365

 

  Accumulated deficit

 

 

(253,719

)

 

 

(142,848

)

Total stockholders’ deficit

 

 

(156,317

)

 

 

(46,206

)

Total liabilities, mezzanine equity and stockholders’ deficit

 

$

245,949

 

 

$

259,459

 

 

See Notes to Condensed Consolidated Financial Statements (Unaudited).

 

3

 

FreightCar America, Inc.

Condensed Consolidated Statements of Operations

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

(Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

 

 

Revenues

 

$

113,255

 

 

$

61,894

 

 

$

421,729

 

 

$

231,489

 

Cost of sales

 

 

97,059

 

 

 

52,669

 

 

 

375,700

 

 

 

201,824

 

Gross profit

 

 

16,196

 

 

 

9,225

 

 

 

46,029

 

 

 

29,665

 

Selling, general and administrative expenses

 

 

7,538

 

 

 

7,511

 

 

 

23,541

 

 

 

19,750

 

Gain on sale of railcars available for lease

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(622

)

Loss on pension settlement

 

 

—

 

 

 

313

 

 

 

 

 

 

313

 

Litigation settlement

 

 

—

 

 

 

—

 

 

 

(3,214

)

 

 

—

 

Operating income

 

 

8,658

 

 

 

1,401

 

 

 

25,702

 

 

 

10,224

 

Interest expense

 

 

(1,577

)

 

 

(2,037

)

 

 

(5,815

)

 

 

(12,988

)

(Loss) gain on change in fair market value of Warrant liability

 

 

(110,040

)

 

 

4,273

 

 

 

(125,581

)

 

 

(1,869

)

Loss on extinguishment of debt

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(14,880

)

Other expense

 

 

(680

)

 

 

(228

)

 

 

(1,419

)

 

 

(333

)

(Loss) income before income taxes

 

 

(103,639

)

 

 

3,409

 

 

 

(107,113

)

 

 

(19,846

)

Income tax provision

 

 

3,407

 

 

 

216

 

 

 

3,327

 

 

 

887

 

Net (loss) income

 

$

(107,046

)

 

$

3,193

 

 

$

(110,440

)

 

$

(20,733

)

Net loss per common share – basic

 

$

(3.57

)

 

$

(0.03

)

 

$

(4.07

)

 

$

(0.94

)

Net loss per common share – diluted

 

$

(3.57

)

 

$

(0.03

)

 

$

(4.07

)

 

$

(0.94

)

Weighted average common shares outstanding – basic

 

 

31,353,997

 

 

 

29,543,963

 

 

 

30,519,545

 

 

 

28,064,410

 

Weighted average common shares outstanding – diluted

 

 

31,353,997

 

 

 

29,543,963

 

 

 

30,519,545

 

 

 

28,064,410

 

 

See Notes to Condensed Consolidated Financial Statements (Unaudited).

 

4

 

FreightCar America, Inc.

Condensed Consolidated Statements of Comprehensive (Loss) Income

(In thousands)

(Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(107,046

)

 

$

3,193

 

 

$

(110,440

)

 

$

(20,733

)

Other comprehensive (loss) income, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

Loss on pension settlement

 

 

—

 

 

 

313

 

 

 

—

 

 

 

313

 

Unrealized (loss) gain on foreign currency derivatives

 

 

(1,123

)

 

 

34

 

 

 

(2,390

)

 

 

34

 

Pension and postretirement liability adjustments

 

 

39

 

 

 

573

 

 

 

109

 

 

 

650

 

Comprehensive (loss) income

 

$

(108,130

)

 

$

4,113

 

 

$

(112,721

)

 

$

(19,736

)

See Notes to Condensed Consolidated Financial Statements (Unaudited).

 

5

 

FreightCar America, Inc.

Condensed Consolidated Statements of Mezzanine Equity and Stockholders’ Deficit

(In thousands, except for share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

FreightCar America Stockholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

Mezzanine Equity

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

Total

 

 

 

Series C Preferred Stock

 

 

 

Common Stock

 

 

Paid-In

 

 

Comprehensive

 

 

Retained

 

 

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income

 

 

Deficit

 

 

Deficit

 

Balance, June 30, 2023

 

 

85,412

 

 

 

83,253

 

 

 

 

17,899,191

 

 

$

210

 

 

$

92,633

 

 

$

1,099

 

 

$

(142,896

)

 

$

(48,954

)

Net income

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,193

 

 

 

3,193

 

Other comprehensive income

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

920

 

 

 

-

 

 

 

920

 

Issuance of Series C preferred shares, net of issuance costs

 

 

-

 

 

 

61

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(146

)

 

 

(146

)

Exercise of stock appreciation rights

 

 

-

 

 

 

-

 

 

 

 

4,246

 

 

 

-

 

 

 

3

 

 

 

-

 

 

 

-

 

 

 

3

 

Stock-based compensation recognized

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

715

 

 

 

-

 

 

 

-

 

 

 

715

 

Balance, September 30, 2023

 

 

85,412

 

 

$

83,314

 

 

 

 

17,903,437

 

 

$

210

 

 

$

93,351

 

 

$

2,019

 

 

$

(139,849

)

 

$

(44,269

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, June 30, 2024

 

 

85,412

 

 

$

83,745

 

 

 

 

18,873,850

 

 

$

220

 

 

$

96,312

 

 

$

1,168

 

 

$

(146,529

)

 

$

(48,829

)

Net loss

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(107,046

)

 

 

(107,046

)

Other comprehensive loss

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,084

)

 

 

-

 

 

 

(1,084

)

Accretion of Series C preferred shares issuance costs

 

 

-

 

 

 

144

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(144

)

 

 

(144

)

Exercise of stock options and appreciation rights

 

 

-

 

 

 

-

 

 

 

 

10,988

 

 

 

-

 

 

 

(18

)

 

 

-

 

 

 

-

 

 

 

(18

)

Stock-based compensation recognized

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

804

 

 

 

-

 

 

 

-

 

 

 

804

 

Balance, September 30, 2024

 

 

85,412

 

 

$

83,889

 

 

 

 

18,884,838

 

 

$

220

 

 

$

97,098

 

 

$

84

 

 

$

(253,719

)

 

$

(156,317

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6

 

FreightCar America, Inc.

Condensed Consolidated Statements of Mezzanine Equity and Stockholders’ Deficit

(In thousands, except for share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

FreightCar America Stockholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

Mezzanine Equity

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

Total

 

 

 

Series C Preferred Stock

 

 

 

Common Stock

 

 

Paid-In

 

 

Comprehensive

 

 

Retained

 

 

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income

 

 

Deficit

 

 

Deficit

 

Balance, December 31, 2022

 

 

-

 

 

$

-

 

 

 

 

17,223,306

 

 

$

203

 

 

$

89,104

 

 

$

1,022

 

 

$

(118,913

)

 

$

(28,584

)

Net loss

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(20,733

)

 

 

(20,733

)

Other comprehensive income

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

997

 

 

 

-

 

 

 

997

 

Issuance of Series C preferred shares, net of issuance costs

 

 

85,412

 

 

 

83,314

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(203

)

 

 

(203

)

Restricted stock awards

 

 

-

 

 

 

-

 

 

 

 

453,258

 

 

 

4

 

 

 

(4

)

 

 

-

 

 

 

-

 

 

 

-

 

Employee stock settlement

 

 

-

 

 

 

-

 

 

 

 

(31,888

)

 

 

-

 

 

 

(106

)

 

 

-

 

 

 

-

 

 

 

(106

)

Exercise of stock appreciation rights

 

 

-

 

 

 

-

 

 

 

 

4,984

 

 

 

-

 

 

 

3

 

 

 

-

 

 

 

-

 

 

 

3

 

Stock appreciation rights classification modification

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

1,738

 

 

 

-

 

 

 

-

 

 

 

1,738

 

Vesting of restricted stock units

 

 

-

 

 

 

-

 

 

 

 

42,815

 

 

 

-

 

 

 

145

 

 

 

-

 

 

 

-

 

 

 

145

 

Stock-based compensation recognized

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

1,789

 

 

 

-

 

 

 

-

 

 

 

1,789

 

Equity Fees

 

 

-

 

 

 

-

 

 

 

 

210,962

 

 

 

3

 

 

 

682

 

 

 

-

 

 

 

-

 

 

 

685

 

Balance, September 30, 2023

 

 

85,412

 

 

$

83,314

 

 

 

 

17,903,437

 

 

$

210

 

 

$

93,351

 

 

$

2,019

 

 

$

(139,849

)

 

$

(44,269

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2023

 

 

85,412

 

 

$

83,458

 

 

 

 

17,903,437

 

 

$

210

 

 

$

94,067

 

 

$

2,365

 

 

$

(142,848

)

 

$

(46,206

)

Net loss

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(110,440

)

 

 

(110,440

)

Other comprehensive loss

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2,281

)

 

 

-

 

 

 

(2,281

)

Accretion of Series C preferred shares issuance costs

 

 

-

 

 

 

431

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(431

)

 

 

(431

)

Restricted stock awards

 

 

-

 

 

 

-

 

 

 

 

774,796

 

 

 

8

 

 

 

(8

)

 

 

-

 

 

 

-

 

 

 

-

 

Employee stock settlement

 

 

-

 

 

 

-

 

 

 

 

(14,615

)

 

 

-

 

 

 

(40

)

 

 

-

 

 

 

-

 

 

 

(40

)

Forfeiture of restricted stock awards

 

 

-

 

 

 

-

 

 

 

 

(106,790

)

 

 

(1

)

 

 

1

 

 

 

-

 

 

 

-

 

 

 

-

 

Exercise of stock options and appreciation rights

 

 

-

 

 

 

-

 

 

 

 

328,010

 

 

 

3

 

 

 

748

 

 

 

-

 

 

 

-

 

 

 

751

 

Stock-based compensation recognized

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

2,330

 

 

 

-

 

 

 

-

 

 

 

2,330

 

Balance, September 30, 2024

 

 

85,412

 

 

$

83,889

 

 

 

 

18,884,838

 

 

$

220

 

 

$

97,098

 

 

$

84

 

 

$

(253,719

)

 

$

(156,317

)

 

See Notes to Condensed Consolidated Financial Statements (Unaudited).

 

7

 

FreightCar America, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

Nine Months Ended September 30,

 

 

 

2024

 

 

2023

 

Cash flows from operating activities

 

 

 

Net loss

 

$

(110,440

)

 

$

(20,733

)

Adjustments to reconcile net loss to net cash flows provided by (used in) operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

4,252

 

 

 

3,189

 

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

 

 

2,226

 

 

 

1,873

 

Loss on change in fair market value for Warrant liability

 

 

125,581

 

 

 

1,869

 

Loss on pension settlement

 

 

—

 

 

 

313

 

Stock-based compensation recognized

 

 

2,330

 

 

 

524

 

Non-cash interest expense

 

 

3,638

 

 

 

8,980

 

Loss on extinguishment of debt

 

 

—

 

 

 

14,880

 

Other non-cash items, net

 

 

(1,589

)

 

 

(435

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(17,911

)

 

 

(1,126

)

VAT receivable

 

 

465

 

 

 

2,320

 

Inventories

 

 

40,859

 

 

 

(57,213

)

Accounts and contractual payables

 

 

(8,300

)

 

 

2,739

 

Income taxes payable, net

 

 

(2,179

)

 

 

(1,490

)

Lease liability

 

 

(2,802

)

 

 

(2,779

)

Customer deposits

 

 

8,865

 

 

 

19,644

 

Other assets and liabilities

 

 

(5,948

)

 

 

1,035

 

Net cash flows provided by (used in) operating activities

 

 

39,047

 

 

 

(26,410

)

Cash flows from investing activities

 

 

 

 

 

 

Purchase of property, plant and equipment

 

 

(3,731

)

 

 

(8,971

)

Proceeds from sale of railcars available for lease, net of selling costs

 

 

—

 

 

 

8,356

 

Net cash flows used in investing activities

 

 

(3,731

)

 

 

(615

)

Cash flows from financing activities

 

 

 

 

 

 

Proceeds from issuance of preferred shares, net of issuance costs

 

 

—

 

 

 

13,254

 

Deferred financing costs

 

 

—

 

 

 

(300

)

Borrowings on revolving line of credit

 

 

26,595

 

 

 

115,172

 

Repayments on revolving line of credit

 

 

(56,010

)

 

 

(123,062

)

Employee stock settlement

 

 

(40

)

 

 

(106

)

Payment for stock appreciation rights exercised

 

 

—

 

 

 

(6

)

Financing lease payments

 

 

(1,591

)

 

 

(460

)

Net cash flows (used in) provided by financing activities

 

 

(31,046

)

 

 

4,492

 

Net increase (decrease) in cash and cash equivalents

 

 

4,270

 

 

 

(22,533

)

Cash, cash equivalents and restricted cash equivalents at beginning of period

 

 

40,560

 

 

 

37,912

 

Cash, cash equivalents and restricted cash equivalents at end of period

 

$

44,830

 

 

$

15,379

 

Supplemental cash flow information

 

 

 

 

 

 

Interest paid

 

$

2,177

 

 

$

3,961

 

Income taxes paid

 

$

5,061

 

 

$

1,857

 

Non-cash transactions

 

 

 

 

 

 

Change in unpaid construction in process

 

$

(226

)

 

$

51

 

Accrued PIK interest paid through issuance of PIK Note

 

$

—

 

 

$

3,161

 

Issuance of preferred shares in exchange of term loan

 

$

—

 

 

$

72,688

 

Issuance of warrants

 

$

—

 

 

$

3,014

 

Issuance of equity fee

 

$

—

 

 

$

685

 

 

 

 

 

 

 

 

 

See Notes to Condensed Consolidated Financial Statements (Unaudited).

 

8

 

FreightCar America, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except for share and per share data and unless otherwise noted)

 

Note 1 – Description of the Business

 

FreightCar America, Inc. (“FreightCar”, the “Company”, “we” or “our”) operates primarily in North America through its direct and indirect subsidiaries, and designs and manufactures a wide range of railroad freight cars, completes railcar rebody and repair services, provides railcar conversion services that repurpose idled rail assets back into revenue service, and supplies railcar parts. The Company designs and builds high-quality railcars, including bulk commodity cars, covered hopper cars, intermodal and non-intermodal flat cars, mill gondola cars, coil steel cars, coal cars and boxcars. The Company is headquartered in Chicago, Illinois and has facilities in the following locations: Johnstown, Pennsylvania; Qingdao, People’s Republic of China; and Castaños, Coahuila, Mexico (the “Castaños Facility”).

 

Note 2 – Basis of Presentation

 

The accompanying condensed consolidated financial statements include the accounts of FreightCar and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The foregoing financial information has been prepared in accordance with the accounting principles generally accepted in the United States of America (“GAAP”) and rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial reporting. The preparation of the financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the results to be expected for the full year. The accompanying interim financial information is unaudited; however, the Company believes the financial information reflects all adjustments (consisting of items of a normal recurring nature) necessary for a fair presentation of financial position, results of operations and cash flows in conformity with GAAP. The 2023 year-end balance sheet data was derived from the audited financial statements as of December 31, 2023. Certain information and note disclosures normally included in the Company’s annual financial statements prepared in accordance with GAAP have been condensed or omitted. Certain prior year amounts have been reclassified, where necessary, to conform to the current year presentation. These interim financial statements should be read in conjunction with the audited financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

 

Note 3 – Revenue Recognition

 

The following table disaggregates the Company’s revenues by major source:

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Railcar sales

 

$

109,010

 

 

$

58,407

 

 

$

405,684

 

 

$

220,752

 

Parts sales

 

 

4,175

 

 

 

3,340

 

 

 

14,393

 

 

 

9,613

 

Revenues from contracts with customers

 

 

113,185

 

 

 

61,747

 

 

 

420,077

 

 

 

230,365

 

Leasing revenues

 

 

70

 

 

 

147

 

 

 

1,652

 

 

 

1,124

 

Total revenues

 

$

113,255

 

 

$

61,894

 

 

$

421,729

 

 

$

231,489

 

 

Contract Balances and Accounts Receivable

 

Contract assets represent the Company’s rights to consideration for performance obligations that have been satisfied but for which the terms of the contract do not permit billing at the reporting date. The Company had no contract assets as of September 30, 2024 and December 31, 2023. The Company may receive cash payments from customers in advance of the Company satisfying performance obligations under its sales contracts resulting in deferred revenue or customer deposits, which are considered contract liabilities. Deferred revenue and customer deposits are classified as either current or long-term liabilities in the condensed consolidated balance sheet based on the timing of when the Company expects to recognize the related revenue. Customer deposits and deferred revenue, included in customer deposits and other current liabilities, respectively, in the Company’s condensed consolidated balance sheet, were $8,865 as of September 30, 2024 and $5,686 as of December 31, 2023. The December amounts were recognized as revenue during the first quarter of 2024. The Company has not experienced significant historical credit losses.

 

Performance Obligations

 

 

9

 

The Company is electing not to disclose the value of the remaining unsatisfied performance obligations with a duration of one year or less as permitted by ASU 2014-09, Revenue from Contracts with Customers. The Company had remaining unsatisfied performance obligations as of September 30, 2024 with expected duration of greater than one year of $108,914.

 

Note 4 – Segment Information

 

The Company’s operations consist of two operating segments, Manufacturing and Parts, and one reportable segment, Manufacturing. The Company’s Manufacturing segment includes new railcar manufacturing, railcar rebody and repair services, and complete railcar conversion services that repurpose idled rail assets back into revenue service. The Company’s Parts operating segment is not significant for reporting purposes and has been combined with corporate and other non-operating activities as Corporate and Other.

 

Segment operating income is an internal performance measure used by the Company’s Chief Operating Decision Maker to assess the performance of each segment in a given period. Segment operating income includes all external revenues attributable to the segments as well as operating costs and income that management believes are directly attributable to the current production of goods and services. The Company’s internal management reporting package does not include interest revenue, interest expense or income taxes allocated to individual segments and these items are not considered as a component of segment operating income. Segment assets represent operating assets and exclude intersegment accounts, deferred tax assets and income tax receivables. The Company does not allocate cash and cash equivalents and restricted cash and restricted cash equivalents to its operating segments as the Company’s treasury function is managed at the corporate level. Intersegment revenues were not material in any period presented.

 

 

 

Three Months Ended

 

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

September 30,

 

 

 

2024

 

 

2023

 

 

 

2024

 

 

2023

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

Manufacturing

 

$

109,080

 

 

$

58,554

 

 

 

$

407,336

 

 

$

221,877

 

Corporate and Other

 

 

4,175

 

 

 

3,340

 

 

 

 

14,393

 

 

 

9,612

 

Consolidated revenues

 

$

113,255

 

 

$

61,894

 

 

 

$

421,729

 

 

$

231,489

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

Manufacturing (1)

 

$

13,823

 

 

$

7,378

 

 

 

$

40,816

 

 

$

24,775

 

Corporate and Other (2)

 

 

(5,165

)

 

 

(5,977

)

 

 

 

(15,114

)

 

 

(14,551

)

Consolidated operating income

 

$

8,658

 

 

$

1,401

 

 

 

$

25,702

 

 

$

10,224

 

Consolidated interest expense

 

 

(1,577

)

 

 

(2,037

)

 

 

 

(5,815

)

 

 

(12,988

)

(Loss) gain on change in fair market value of Warrant liability

 

 

(110,040

)

 

 

4,273

 

 

 

 

(125,581

)

 

 

(1,869

)

Loss on extinguishment of debt

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

(14,880

)

Consolidated other expense

 

 

(680

)

 

 

(228

)

 

 

 

(1,419

)

 

 

(333

)

Consolidated (loss) income before income taxes

 

$

(103,639

)

 

$

3,409

 

 

 

$

(107,113

)

 

$

(19,846

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization:

 

 

 

 

 

 

 

 

 

 

 

 

 

Manufacturing

 

$

1,331

 

 

$

942

 

 

 

$

3,906

 

 

$

2,763

 

Corporate and Other

 

 

111

 

 

 

143

 

 

 

 

346

 

 

 

426

 

Consolidated depreciation and amortization

 

$

1,442

 

 

$

1,085

 

 

 

$

4,252

 

 

$

3,189

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures:

 

 

 

 

 

 

 

 

 

 

 

 

 

Manufacturing

 

$

1,277

 

 

$

3,989

 

 

 

$

3,485

 

 

$

8,815

 

Corporate and Other

 

 

185

 

 

 

28

 

 

 

 

246

 

 

 

156

 

Consolidated capital expenditures

 

$

1,462

 

 

$

4,017

 

 

 

$

3,731

 

 

$

8,971

 

 

(1) Results for the nine months ended September 30, 2024 include a litigation settlement, of which $1,386 was allocated to leasing revenues and $3,214 was allocated to litigation settlement. Results for the nine months ended September 30, 2023 include a gain on sale of railcars available for lease of $622.

(2) Results for the three and nine months ended September 30, 2023 include a loss on pension settlement of $313.

 

10

 

 

 

 

September 30,

 

 

December 31,

 

 

 

2024

 

 

2023

 

Assets:

 

 

 

 

 

 

Manufacturing

 

$

187,001

 

 

$

207,093

 

Corporate and Other

 

 

55,988

 

 

 

51,158

 

Total operating assets

 

 

242,989

 

 

 

258,251

 

Consolidated income taxes receivable

 

 

2,960

 

 

 

1,208

 

Consolidated assets

 

$

245,949

 

 

$

259,459

 

 

 

Geographic Information

 

 

 

Revenues

 

 

Long Lived Assets (a)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

 

 

 

 

 

 

September 30,

 

 

September 30,

 

 

September 30,

 

 

December 31,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

United States

 

$

113,255

 

 

$

61,894

 

 

$

421,729

 

 

$

231,489

 

 

$

4,090

 

 

$

7,377

 

Mexico

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

72,708

 

 

 

69,826

 

Total

 

$

113,255

 

 

$

61,894

 

 

$

421,729

 

 

$

231,489

 

 

$

76,798

 

 

$

77,203

 

 

 

(a) Long lived assets include property plant and equipment, net, railcars available for lease, net, and right-of-use (ROU) assets.

 

Note 5 – Fair Value Measurements

 

The following table sets forth by level within the fair value hierarchy the Company’s financial assets that were recorded at fair value on a recurring basis and the Company’s non-financial assets that were recorded at fair value on a non-recurring basis.

 

Recurring Fair Value Measurements

 

As of September 30, 2024

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Warrant liability

 

$

-

 

 

$

162,382

 

 

$

-

 

 

$

162,382

 

Foreign currency derivative liability

 

$

-

 

 

$

1,784

 

 

$

-

 

 

$

1,784

 

 

Recurring Fair Value Measurements

 

As of December 31, 2023

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Warrant liability

 

$

-

 

 

$

36,801

 

 

$

-

 

 

$

36,801

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency derivative asset

 

$

-

 

 

$

606

 

 

$

-

 

 

$

606

 

 

Non-recurring Fair Value Measurements

 

During the Nine Months Ended September 30, 2024

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Assets held for sale

 

$

-

 

 

$

-

 

 

$

629

 

 

$

629

 

 

 

Non-recurring Fair Value Measurements

 

During the Year Ended December 31, 2023

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Railcars available for lease, net

 

$

-

 

 

$

-

 

 

$

2,842

 

 

$

2,842

 

 

 

The fair value of the Company’s Warrant (as defined in Note 10 - Warrants) liability recorded in the Company’s financial statements, determined using the quoted price of the Company’s common stock, par value $0.01 per share (the “Common Stock”), in an active market, exercise prices of $0.01 per share and $3.57 per share, and number of shares exercisable at September 30, 2024 and December 31, 2023, is a Level 2 measurement.

The fair value of the Company’s foreign currency derivative (liability) asset determined using exit prices obtained from each counterparty, which are based on currency spot and forward rates at September 30, 2024 and December 31, 2023 in an active market, is a Level 2 measurement. See Note 15 - Derivatives.

 

 

11

 

The fair value of the Company's fleet of triple hopper aggregate railcars determined using a cost plus market approach for a portion of the assets and a market-based approach for the remainder of the assets at December 31, 2023, is a Level 3 measurement. In the first quarter of 2024, the Company gained possession of these railcars. The portion of railcars intended to be sold in their current condition were classified as assets held for sale, while the remaining railcars intended to be converted into a new car type were classified as inventory.

 

Note 6 – Restricted Cash

 

The Company establishes restricted cash balances when required by customer contracts, and to collateralize standby letters of credit or foreign currency derivatives. The carrying value of restricted cash approximates its fair value.

 

The Company’s restricted cash balances are as follows:

 

 

 

September 30,

 

 

December 31,

 

 

 

2024

 

 

2023

 

Restricted cash from customer deposit

 

$

282

 

 

$

282

 

Restricted cash to collateralize standby letters of credit

 

 

103

 

 

 

103

 

Restricted cash to collateralize foreign currency derivatives

 

 

3,300

 

 

 

320

 

Total restricted cash and restricted cash equivalents

 

$

3,685

 

 

$

705

 

 

Note 7 – Inventories

 

Inventories, net of reserve for excess and obsolete items, consist of the following:

 

 

 

September 30,

 

 

December 31,

 

 

 

2024

 

 

2023

 

Raw materials

 

$

65,913

 

 

$

65,639

 

Work in process

 

 

6,961

 

 

 

31,138

 

Finished railcars

 

 

6,329

 

 

 

23,196

 

Parts inventory

 

 

5,609

 

 

 

5,049

 

Total inventories, net

 

$

84,812

 

 

$

125,022

 

 

Inventory on the Company’s condensed consolidated balance sheets includes reserves of $1,918 and $1,594 relating to excess or slow-moving inventory for parts and raw materials at September 30, 2024 and December 31, 2023, respectively.

 

Note 8 – Product Warranties

 

Warranty terms are based on the negotiated railcar sale, rebody or conversion contract, as applicable. Changes in the warranty reserve for the nine months ended September 30, 2024 and 2023 are as follows:

 

 

 

 

For the Nine Months Ended September 30,

 

 

 

 

 

2024

 

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

Balance at the beginning of the year

 

 

$

1,602

 

 

 

$

1,940

 

 

Current year provision

 

 

 

511

 

 

 

 

663

 

 

Reductions for payments, costs of repairs and other

 

 

 

(340

)

 

 

 

(852

)

 

Adjustments to prior warranties

 

 

 

(280

)

 

 

 

(113

)

 

Balance at the end of the period

 

 

$

1,493

 

 

 

$

1,638

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments to prior warranties include changes in the warranty reserve for warranties issued in prior periods due to expiration of the warranty period, revised warranty cost estimates and other factors.

 

Note 9 – Revolving Credit Facility

 

As of September 30, 2024, a revolving line of credit maturing on October 31, 2024 exists in the maximum aggregate principal amount of up to $45,000, secured by a standby letter of credit in the principal amount of $25,000 and the Company’s accounts receivable. In

 

12

 

connection with the standby letter of credit, the Company has agreed to pay an affiliate of OC III LFE (as defined below) a fee due and payable in cash of $375 per quarter.

 

The Company had no outstanding debt and remaining availability of $41,373 under this facility as of September 30, 2024. As of December 31, 2023, the Company had $29,415 in outstanding debt and remaining availability of $10,853 under this facility.

 

The standby letter of credit bears interest at the prime rate of interest (“Prime”) plus 1.5%, or 9.5% as of September 30, 2024. Advances secured by the Company’s accounts receivable bear interest at Prime plus 2%, or 10% as of September 30, 2024.

 

The revolving line of credit was subsequently amended on October 30, 2024 to extend the maturity date from October 31, 2024 to December 31, 2024, decrease the maximum aggregate principal amount from up to $45,000 to up to $20,000, and remove the standby letter of credit in the principal amount of $25,000 along with the $375 quarterly fee in connection with the standby letter of credit.

 

The fair value of debt approximates its carrying value as of December 31, 2023.

 

Note 10 – Warrants

 

The Company issued warrants to OC III LFE II LP (“OC III LFE”) and various affiliates of OC III LFE (collectively, the “Warrantholder”) in previous years to purchase a number of shares of Common Stock equal to 23% (the “2020 Warrant”), 5% (the “2021 Warrant”), and 5% (the “2022 Warrant”) of the outstanding Common Stock (after giving effect to such issuance) on a fully-diluted basis at the time the warrants are exercised. The 2020 Warrant, 2021 Warrant, and 2022 Warrant each have a per share exercise price of $0.01 and a term of ten (10) years from date of issuance.

 

The 2020 Warrant, issued in November 2020, was exercisable for an aggregate of 9,502,172 and 8,712,618 shares of Common Stock as of September 30, 2024 and December 31, 2023, respectively. The 2021 Warrant, issued in December 2021, was exercisable for an aggregate of 2,065,689 and 1,894,047 shares of Common Stock as of September 30, 2024 and December 31, 2023, respectively. The 2022 Warrant, issued in April 2022, was exercisable for an aggregate of 2,065,689 and 1,894,047 shares of Common Stock as of September 30, 2024 and December 31, 2023, respectively. The Company also issued a warrant to the Warrantholder in May 2023 to purchase an aggregate of 1,636,313 shares of Common Stock (the “2023 Warrant”), exercisable for a term of ten (10) years from date of issuance with a per share exercise price of $3.57.

 

The 2020 Warrant, 2021 Warrant, 2022 Warrant and 2023 Warrant are collectively referred to herein as the “Warrant”. As of September 30, 2024, the Warrant is classified as a liability and subject to fair value remeasurement at each balance sheet date. The fair value of the Warrant at September 30, 2024 and December 31, 2023 was $162,382 and $36,801, respectively. The change in fair value of the Warrant is reported on a separate line in the condensed consolidated statements of operations.

 

Note 11 – Mezzanine Equity

 

In May 2023, the Company issued to OC III LFE 85,412 shares of non-convertible Series C Preferred Stock, $0.01 par value per share, with an initial stated and fair value of $85,412 or $1,000 per share (the “Preferred Stock”). As of September 30, 2024, 85,412 shares of the Preferred Stock remain issued and outstanding. The Company classifies the Preferred Stock as mezzanine equity (temporary equity outside of permanent equity) because a deemed liquidation event following a change of control may require redemption of the Preferred Stock that is not solely within the control of the Company.

 

The Preferred Stock ranks senior to the Common Stock with respect to payment of dividends and distribution of assets upon liquidation, dissolution and winding up. Dividends accrue at a rate of 17.5% per annum on the initial stated value of the Preferred Stock. Accrued dividends, whether or not declared, are cumulative. OC III LFE will not participate in any dividends paid to holders of Common Stock.

The Company may redeem outstanding shares of Preferred Stock at any time by payment of the initial stated value plus accrued dividends. If the Company has not redeemed all of the outstanding shares of Preferred Stock on or prior to the fourth anniversary of issuance, the dividend rate will increase by 0.5% for every quarter thereafter until redeemed in full (the “Dividend Rate Increase”). OC III LFE has the right to request the Company redeem all of the outstanding shares of Preferred Stock at any time after the sixth anniversary of issuance. If the Company does not redeem all of the outstanding shares of Preferred Stock within six months after receipt of a redemption request, OC III LFE will be entitled to certain limited voting rights.

The Preferred Stock has similar characteristics of an “Increasing Rate Security” as described by SEC Staff Accounting Bulletin Topic 5Q, Increasing Rate Preferred Stock. As a result, and as the Company has the ability to redeem all of the outstanding shares of the Preferred Stock before the occurrence of a Dividend Rate Increase, the discount on outstanding shares of Preferred Stock is considered

 

13

 

an unstated dividend cost that is amortized over the period preceding commencement of the Dividend Rate Increase using the effective interest method, by charging imputed dividend cost against retained earnings, or additional paid in capital in the absence of retained earnings, and increasing the carrying amount of the outstanding shares of Preferred Stock by a corresponding amount. Accordingly, the discount is amortized over four years using the effective yield method. Issuance costs of $2,301 were allocated against the outstanding shares of the Preferred Stock upon issuance. The Company recognized discount amortization of $144 and $431 during the three and nine months ended September 30, 2024, respectively, and $146 and $203 during the three and nine months ended September 30, 2023, respectively.

 

Note 12 – Accumulated Other Comprehensive Income

The changes in accumulated other comprehensive income consist of the following:

 

 

 

Pre-Tax

 

 

Tax

 

 

After-Tax

 

Three months ended September 30, 2024

 

 

 

 

 

 

 

 

 

Pension liability activity:

 

 

 

 

 

 

 

 

 

Reclassification adjustment for amortization of net loss (pre-tax other income)

 

$

39

 

 

$

-

 

 

$

39

 

Foreign currency derivative liability activity:

 

 

 

 

 

 

 

 

 

Unrealized loss on foreign currency derivatives

 

$

(1,123

)

 

$

-

 

 

$

(1,123

)

 

 

$

(1,084

)

 

$

-

 

 

$

(1,084

)

 

Three months ended September 30, 2023

 

 

 

 

 

 

 

 

 

Pension liability activity:

 

 

 

 

 

 

 

 

 

Loss on pension settlement

 

$

313

 

 

$

-

 

 

$

313

 

Reclassification adjustment for amortization of net loss (pre-tax other income)

 

 

573

 

 

 

-

 

 

 

573

 

 

 

$

886

 

 

$

-

 

 

$

886

 

Foreign currency derivative asset activity:

 

 

 

 

 

 

 

 

 

Unrealized gain on foreign currency derivatives

 

$

34

 

 

$

-

 

 

$

34

 

 

 

$

920

 

 

$

-

 

 

$

920

 

 

Nine months ended September 30, 2024

 

Pre-Tax

 

 

Tax

 

 

After-Tax

 

Pension liability activity:

 

 

 

 

 

 

 

 

 

Reclassification adjustment for amortization of net loss (pre-tax other income)

 

$

109

 

 

$

-

 

 

$

109

 

Foreign currency derivative liability activity:

 

 

 

 

 

 

 

 

 

Unrealized loss on foreign currency derivatives

 

$

(2,390

)

 

$

-

 

 

$

(2,390

)

 

 

$

(2,281

)

 

$

-

 

 

$

(2,281

)

 

Nine months ended September 30, 2023

 

 

 

 

 

 

 

 

 

Pension liability activity:

 

 

 

 

 

 

 

 

 

Loss on pension settlement

 

$

313

 

 

$

-

 

 

$

313

 

Reclassification adjustment for amortization of net loss (pre-tax other income)

 

 

650

 

 

 

-

 

 

 

650

 

 

 

$

963

 

 

$

-

 

 

$

963

 

Foreign currency derivative asset activity:

 

 

 

 

 

 

 

 

 

Unrealized gain on foreign currency derivatives

 

$

34

 

 

$

-

 

 

$

34

 

 

 

$

997

 

 

$

-

 

 

$

997

 

 

The components of accumulated other comprehensive income consist of the following:

 

 

 

September 30,

 

 

December 31,

 

 

2024

 

 

2023

 

Unrecognized pension income, net of tax of $6,282 and $6,282, respectively

 

$

1,868

 

 

$

1,759

 

Unrealized (loss) gain on foreign currency derivatives

 

 

(1,784

)

 

 

606

 

 

 

$

84

 

 

$

2,365

 

 

Note 13 – Stock-Based Compensation

 

Total stock-based compensation was $804 and $715 for the three months ended September 30, 2024 and 2023, respectively, and $2,330 and $524 for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, there was $2,064 of unearned compensation expense related to restricted stock awards, which will be recognized over the remaining weighted average

 

14

 

requisite service period of 21 months. As of September 30, 2024, there was $1,751 of unearned compensation expense related to time-vested stock options, which will be recognized over the remaining requisite service period of 23 months. As of September 30, 2024, there was no unearned compensation expense related to cash settled stock appreciation rights.

 

In June 2023, the Company issued 300,000 inducement stock options (the “Inducement Options”) outside of The FreightCar America, Inc. 2022 Long Term Incentive Plan to one individual. As of September 30, 2024, there was $172 of unrecognized compensation expense related to the Inducement Options, which will be recognized over the remaining requisite service period of 21 months.

 

Note 14 – Employee Benefit Plans

 

The Company has a qualified, defined benefit pension plan (the “Plan”) that was established to provide benefits to certain employees. The Plan is frozen and participants are no longer accruing benefits. Generally, contributions to the Plan were not less than the minimum amounts required under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and not more than the maximum amount that can be deducted for federal income tax purposes. The Plan assets are held by an independent trustee and consist primarily of equity and fixed income securities.

 

The components of net periodic benefit cost for the three and nine months ended September 30, 2024 and 2023, are as follows:

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

Pension Benefits

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Interest cost

 

$

130

 

 

$

151

 

 

$

399

 

 

$

453

 

Expected return on plan assets

 

 

(70

)

 

 

(83

)

 

 

(220

)

 

 

(250

)

Amortization of unrecognized net income

 

 

39

 

 

 

38

 

 

 

109

 

 

 

115

 

Loss on pension settlement

 

 

-

 

 

 

313

 

 

 

-

 

 

 

313

 

 

 

$

99

 

 

$

419

 

 

$

288

 

 

$

631

 

 

The Company made no contributions to the Plan for the three and nine months ended September 30, 2024 and 2023. The Company expects to make no contributions to the Plan in 2024.

 

The Company also maintains qualified defined contribution plans, which provide benefits to employees based on employee contributions and employee earnings with discretionary contributions allowed.

Note 15 – Derivatives

 

The Company’s operations and expenditures in its normal course of business are subject to opportunities and risks related to foreign currency fluctuations. The Company currently utilizes foreign currency forward contracts to protect against downward currency exposure by hedging Mexican Peso denominated expenses against the risk of volatility in foreign currency exchange rates between the Mexican Peso and the U.S. Dollar.

During 2023 and 2024, the Company entered into forward contracts to hedge the Company’s anticipated and probable Mexican Peso denominated expenses against the foreign currency rate exposure. The contracts have terms between one and 12 months and require the Company to exchange currencies at agreed-upon rates at each settlement date. The counterparties to the contracts consist of a limited number of domestic and international financial institutions. The Company classifies these contracts as cash flow hedges in accordance with ASC 815, Derivatives and Hedging. The Company does not have any non-designated derivatives.

The Company assesses the assumed effectiveness of the contracts at each reporting period. The foreign currency derivatives are recorded on the balance sheet at fair value. The Company records unrealized gains or losses related to changes in the fair value of the forward contracts in other comprehensive income as long as the contracts are assumed to be effective. Amounts accumulated in other comprehensive (loss) income are reclassified to the condensed consolidated statements of operations on the same line as the items being hedged when the hedged item impacts earnings or upon determination that the contract is no longer assumed to be effective.
 

The notional amounts of outstanding foreign currency derivatives are as follows:

 

 

 

September 30,

 

 

December 31,

 

Notional Amount

 

2024

 

 

2023

 

Derivative instruments designated as hedges:

 

 

 

 

 

 

Foreign currency derivatives

 

$

25,281

 

 

$

11,562

 

 

 

15

 

The fair value of outstanding foreign currency derivatives designated as hedges are as follows:

 

 

 

September 30,

 

 

December 31,

 

Fair Value

 

2024

 

 

2023

 

Other current liabilities:

 

 

 

 

 

 

Foreign currency derivatives

 

$

1,784

 

 

$

-

 

Prepaid expenses:

 

 

 

 

 

 

Foreign currency derivatives

 

$

-

 

 

$

606

 

 

The pre-tax realized loss (gain) on foreign currency derivatives is recognized in the condensed consolidated statements of operations as follows:

 

 

 

 

 

Amount of Loss/(Gain) Recognized

 

 

Amount of (Gain) Recognized

 

 

 

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

Location of Realized Loss/(Gain) Recognized in the Condensed Consolidated Statements of Operations

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Derivative instruments designated as cash flow hedges:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency derivatives

 

Cost of sales

 

$

72

 

 

$

(8

)

 

$

(449

)

 

$

(8

)

 

Note 16 - Commitments and Contingencies

 

The Company is involved in various litigation matters from time to time, including intellectual property litigation, and warranty and repair claims incidental to the conduct of our business. Although the Company is taking actions to vigorously contest these matters, it is not possible to determine the outcome of these matters and proceedings. The Company does not believe these actions will have a material adverse effect on our financial position, results of operations or cash flows.

 

 

Note 17 – Loss Per Share

 

The net loss available to common stockholders and weighted-average common shares outstanding are as follows:

 

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(107,046

)

 

$

3,193

 

 

$

(110,440

)

 

$

(20,733

)

Accretion of financing fees

 

 

(144

)

 

 

(146

)

 

 

(431

)

 

 

(203

)

Accrued dividends on Series C Preferred Stock

 

 

(4,676

)

 

 

(3,923

)

 

 

(13,340

)

 

 

(5,535

)

Net loss available to common stockholders - basic

 

$

(111,866

)

 

$

(876

)

 

$

(124,211

)

 

$

(26,471

)

Net loss available to common stockholders - diluted

 

$

(111,866

)

 

$

(876

)

 

$

(124,211

)

 

$

(26,471

)

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

17,633,629

 

 

 

17,044,251

 

 

 

17,433,479

 

 

 

16,937,968

 

Issuance of Warrants

 

 

13,720,368

 

 

 

12,499,712

 

 

 

13,086,066

 

 

 

11,126,442

 

Weighted average common shares outstanding - basic

 

 

31,353,997

 

 

 

29,543,963

 

 

 

30,519,545

 

 

 

28,064,410

 

Weighted average common shares outstanding - diluted

 

 

31,353,997

 

 

 

29,543,963

 

 

 

30,519,545

 

 

 

28,064,410

 

 

 

The Company computes earnings per share using the two-class method, which is an earnings allocation formula that determines earnings per share for Common Stock and participating securities. The Company’s participating securities are its grants of restricted stock which contain non-forfeitable rights to dividends. The Company allocates earnings between both classes; however, in periods of undistributed losses, they are only allocated to common shares as the unvested restricted stockholders do not contractually participate in losses of the Company. The Company computes basic earnings per share by dividing net income allocated to common shareholders by the weighted average number of shares outstanding during the period. Warrants issued in connection with the Company's long-term

 

16

 

debt were issued at a nominal exercise price and are considered outstanding at the date of issuance. The 2023 Warrant was issued out-of-the money and the Company will apply the treasury stock method to the 2023 Warrant when computing earnings per share. Diluted earnings per share is calculated to give effect to all potentially dilutive common shares that were outstanding during the period. Weighted average diluted common shares outstanding include the incremental shares that would be issued upon the assumed exercise of stock options and the assumed vesting of nonvested share awards. For the three months ended September 30, 2024 and 2023, 2,058,180 and 6,222,085 shares, respectively, were not included in the weighted average common shares outstanding calculation as they were anti-dilutive. For the nine months ended September 30, 2024 and 2023, 3,119,672 and 5,996,646 shares, respectively, were not included in the weighted average common shares outstanding calculation as they were anti-dilutive.

 

Note 18 – Related Parties

 

The following persons are owners of Fabricaciones y Servicios de México, S.A. de C.V. (“Fasemex”): Jesús Gil, a director of the Company; and Alejandro Gil and Salvador Gil, siblings of Jesús Gil. Fasemex owns approximately 10.3% of the outstanding shares of Common Stock as of September 30, 2024 and provides steel fabrication services to the Company. The lessors of the Castaños Facility are Jesús Gil, Alejandro Gil, and Salvador Gil. Distribuciones Industriales JAS S.A. de C.V. (“DI”) is owned by Alejandro Gil and Salvador Gil and provides material and safety supplies to the Company. Maquinaria y equipo de transporte Jova S.A. de C.V (“METJ”) is owned by Jorge Gil, a sibling of Jesús Gil, and provides trucking services to the Company. Fasemex, DI, METJ, Jesús Gil, Alejandro Gil, Salvador Gil, and Jorge Gil are collectively referred to as the “Gil Family”.

The Company paid $6,058 and $20,711 to the Gil Family during the three and nine months ended September 30, 2024, respectively, and $3,909 and $13,675 during the three and nine months ended September 30, 2023, respectively, related to steel fabrication services, rent and security deposit payments for the Castaños Facility, material and safety supplies, trucking services and royalty payments.

Commercial Specialty Truck Holdings, LLC (“CSTH”) is minority owned by James R. Meyer, a member of our Board, our former CEO, and beneficial owner of over 5% of our Common Stock. The Company sold specialty parts supplies in an amount equal to $268 and $683 to CSTH during the three and nine months ended September 30, 2024, respectively. The Company sold no specialty parts supplies to CSTH during the three and nine months ended September 30, 2023.

 

Related party asset on the condensed consolidated balance sheet of $936 as of September 30, 2024 includes other receivables of $254 from CSTH and other assets of $682 from the Gil Family. Related party accounts payable on the condensed consolidated balance sheet of $2,493 as of September 30, 2024 is payable to the Gil Family. Related party asset on the condensed consolidated balance sheet of $638 as of December 31, 2023 includes other receivables of $517 from the Gil Family and $121 from CSTH. Related party accounts payable on the condensed consolidated balance sheet of $2,478 as of December 31, 2023 is payable to the Gil Family.

 

Note 19 – Income Taxes

 

The Company’s tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items. The Company’s effective income tax rate was (3.3)% and 6.3% for the three months ended September 30, 2024 and 2023, respectively, and (3.1)% and (4.5)% for the nine months ended September 30, 2024 and 2023, respectively. The Company’s effective income tax rates for the respective periods of 2024 and 2023 differed from the U.S. statutory tax rate of 21% primarily due to the mix of pre-tax earnings in the U.S. and Mexico; permanent differences and discrete events, predominantly in Mexico; and a full valuation allowance in the U.S.

 

 

17

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q contains certain forward-looking statements including, in particular, statements about our plans, strategies and prospects. We have used the words “may,” “will,” “expect,” “anticipate,” “believe,” “estimate,” “plan,” “likely,” “unlikely,” “intend” and similar expressions in this report to identify forward-looking statements. We have based these forward-looking statements on our current views with respect to future events and financial performance. However, forward-looking statements inherently involve potential risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. These potential risks and uncertainties relate to, among other things, the cyclical nature of our business; adverse economic and market conditions, including inflation; material disruption in the movement of rail traffic for deliveries; fluctuating costs of raw materials, including steel and aluminum; delays in the delivery of raw materials; our ability to maintain relationships with our suppliers of railcar components; our reliance upon a small number of customers that represent a large percentage of our sales; the variable purchase patterns of our customers and the timing of completion; delivery and customer acceptance of orders; the highly competitive nature of our industry; the risk of lack of acceptance of our new railcar offerings; and other competitive factors. The factors listed above are not exhaustive. Other sections of this Quarterly Report on Form 10-Q include additional factors that could materially and adversely affect our business, financial condition and results of operations. New factors emerge from time to time and it is not possible for management to predict the impact of all of these factors on our business, financial condition or results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not rely on forward-looking statements as a prediction of actual results. We expressly disclaim any duty to provide updates to forward-looking statements, and the estimates and assumptions associated with them, in order to reflect changes in circumstances or expectations or the occurrence of unanticipated events except to the extent required by applicable securities laws.

 

OVERVIEW

 

You should read the following discussion in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements that are based on management’s current expectations, estimates and projections about our business and operations. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements. See “Cautionary Statement Regarding Forward-Looking Statements.”

 

We are a diversified manufacturer of railcars and railcar components. We design and manufacture a broad variety of railcar types for transportation of bulk commodities and containerized freight products primarily in North America. We also provide railcar rebody and repair services, railcar conversion services that repurpose idled rail assets back into revenue service, and supply railcar parts. We have been manufacturing railcars since 1901.

 

Total net railcar orders received for the nine months ended September 30, 2024 were 4,040 units, consisting of 2,645 new railcars and 1,395 rebuilt railcars, compared to orders for 3,356 units, consisting of 3,166 new railcars and 190 rebuilt railcars for the nine months ended September 30, 2023. Total backlog of unfilled orders was 3,611 units at September 30, 2024, compared to 2,914 railcars as of December 31, 2023. The estimated sales value of the backlog was $372 million and $348 million as of September 30, 2024 and December 31, 2023, respectively. The increase in the number of net railcar orders received for the nine months ended September 30, 2024 compared to the prior year period is primarily a reflection of the Company’s increased production capacity year-over-year.

 

RESULTS OF OPERATIONS

 

Three Months Ended September 30, 2024 compared to Three Months Ended September 30, 2023

 

Revenues

 

Our consolidated revenues for the three months ended September 30, 2024 were $113.3 million compared to $61.9 million for the three months ended September 30, 2023. Manufacturing segment revenues for the three months ended September 30, 2024 were $109.1 million compared to $58.6 million for the corresponding prior year period. The $50.5 million increase in Manufacturing segment revenues was primarily driven by an increase in the volume of railcar units delivered during the quarter. Railcar deliveries in the three months ended September 30, 2024 totaled 961 units, consisting entirely of new railcars, compared to 503 units in the same period of 2023, consisting of 382 new railcars and 121 rebuilt railcars. Corporate and Other revenues were $4.2 million for the three months ended September 30, 2024 compared to $3.3 million for the three months ended September 30, 2023.

 

 

18

 

Gross Profit

 

Our consolidated gross profit was $16.2 million for the three months ended September 30, 2024 compared to $9.2 million for the three months ended September 30, 2023. Manufacturing segment gross profit was $14.3 million for the three months ended September 30, 2024 compared to $7.9 million for the three months ended September 30, 2023. The $7.0 million increase in consolidated gross profit and $6.4 million increase in Manufacturing segment gross profit reflects a favorable volume variance. Corporate and Other gross profit was $1.9 million for the three months ended September 30, 2024 compared to $1.3 million for the three months ended September 30, 2023.

 

Selling, General and Administrative Expenses

 

Consolidated selling, general and administrative expenses were $7.5 million for each of the three months ended September 30, 2024 and 2023. Manufacturing segment selling, general and administrative expenses were $0.5 million for the three months ended September 30, 2024, compared to $0.6 million for the three months ended September 30, 2023. Manufacturing segment selling, general and administrative expenses for the three months ended September 30, 2024 were 0.5% of revenue, compared to 1.0% of revenue for the three months ended September 30, 2023. Corporate and Other selling, general and administrative expenses were $7.0 million for the three months ended September 30, 2024 compared to $6.9 million for the three months ended September 30, 2023.

 

Operating Income

 

Our consolidated operating income for the three months ended September 30, 2024 was $8.7 million compared to $1.4 million for the three months ended September 30, 2023 driven primarily by the previously mentioned favorable volume variance, partially offset by the previously mentioned loss on pension settlement. Operating income for the Manufacturing segment was $13.8 million for the three months ended September 30, 2024 compared to $7.4 million for the three months ended September 30, 2023, reflecting the increase in railcars delivered during the three months ended September 30, 2024 compared to the three months ended September 30, 2023. Corporate and Other operating loss was $5.2 million for the three months ended September 30, 2024 compared to $6.0 million for the three months ended September 30, 2023.

 

(Loss) Gain on Change in Fair Market Value of Warrant Liability

 

Our loss on change in fair market value of Warrant liability was $110.0 million for the three months ended September 30, 2024 compared to our gain on change in fair market value of Warrant liability of $4.3 million for the three months ended September 30, 2023. The change in fair market value of Warrant liability is driven by the fluctuation of stock price used to remeasure the liability at the end of each period.

 

Income Taxes

 

Our income tax provision was $3.4 million for the three months ended September 30, 2024 compared to our income tax provision of $0.2 million for the three months ended September 30, 2023. The increase in income tax expense is primarily explained by the mix of forecasted earnings in the U.S. and Mexico, as well as the impact of permanent and discrete items predominantly in Mexico.

 

Net (Loss) Income

 

As a result of the changes discussed above, net loss was $107.0 million for the three months ended September 30, 2024 compared to net income of $3.2 million for the three months ended September 30, 2023. For the three months ended September 30, 2024, basic and diluted net loss per share was $3.57, compared to basic and diluted net loss per share of $0.03 for the three months ended September 30, 2023.

 

 

Nine Months Ended September 30, 2024 compared to Nine Months Ended September 30, 2023

 

Revenues

 

Our consolidated revenues for the nine months ended September 30, 2024 were $421.7 million compared to $231.5 million for the nine months ended September 30, 2023. Manufacturing segment revenues for the nine months ended September 30, 2024 were $407.3 million compared to $221.9 million for the corresponding prior year period. The $185.4 million increase in Manufacturing segment revenues was primarily driven by an increase in the volume of railcar units delivered during the current period, which includes delivery in the first quarter of 2024 of railcars that had been temporarily impacted by the closure of the U.S.-Mexico border in December 2023. Railcar deliveries in the nine months ended September 30, 2024 totaled 3,343 units, consisting of 3,233 new

 

19

 

railcars and 110 rebuilt railcars, compared to 2,001 units in the same period of 2023, consisting of 1,686 new railcars and 315 rebuilt railcars. Corporate and Other revenues were $14.4 million for the nine months ended September 30, 2024 compared to $9.6 million for the nine months ended September 30, 2023.

 

Gross Profit

 

Our consolidated gross profit was $46.0 million for the nine months ended September 30, 2024 compared to $29.7 million for the nine months ended September 30, 2023. Manufacturing segment gross profit was $39.0 million for the nine months ended September 30, 2024 compared to $26.0 million for the nine months ended September 30, 2023. The $16.3 million increase in consolidated gross profit and $13.0 million increase in Manufacturing segment gross profit primarily reflects a favorable volume variance. Corporate and Other gross profit was $7.0 million for the nine months ended September 30, 2024 compared to $3.7 million for the nine months ended September 30, 2023.

 

Selling, General and Administrative Expenses

 

Consolidated selling, general and administrative expenses for the nine months ended September 30, 2024 were $23.5 million compared to $19.8 million for the nine months ended September 30, 2023. The $3.7 million increase in consolidated selling, general and administrative expenses for the nine months ended September 30, 2024 was primarily due to increases in stock-based compensation expenses of $1.8 million and legal expenses of $1.8 million. Manufacturing segment selling, general and administrative expenses were $1.4 million for the nine months ended September 30, 2024 compared to $1.9 million for the nine months ended September 30, 2023. The $0.5 million decrease in Manufacturing selling, general and administrative expenses for the nine months ended September 30, 2024 was primarily due to a $0.4 million decrease in consulting expenses. Manufacturing segment selling, general and administrative expenses for the nine months ended September 30, 2024 were 0.3% of revenue, compared to 0.9% of revenue for the nine months ended September 30, 2023. Corporate and Other selling, general and administrative expenses were $22.1 million for the nine months ended September 30, 2024 compared to $17.9 million for the nine months ended September 30, 2023. The $4.2 million increase in Corporate and Other selling, general and administrative expenses is primarily a result of the previously mentioned increases in stock-based compensation expenses and legal expenses in the current year.

 

Litigation Settlement

 

During the nine months ended September 30, 2024, we recorded a pre-tax litigation settlement of $3.2 million related to a dispute with a former lessee of our railcars. During the nine months ended September 30, 2023, we did not record any litigation settlements.

 

Operating Income

 

Our consolidated operating income for the nine months ended September 30, 2024 was $25.7 million compared to a $10.2 million consolidated operating income for the nine months ended September 30, 2023 driven primarily by the previously mentioned favorable volume variance, partially offset by the previously mentioned increase in selling, general and administrative expenses. Operating income for the Manufacturing segment was $40.8 million for the nine months ended September 30, 2024 compared to an operating income of $24.8 million for the nine months ended September 30, 2023, reflecting the increase in railcars delivered during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. Corporate and Other operating loss was $15.1 million for the nine months ended September 30, 2024 compared to $14.6 million for the nine months ended September 30, 2023. The $0.5 million increase in operating loss is primarily a result of the previously mentioned increases in selling, general and administrative expenses.

 

Loss on Change in Fair Market Value of Warrant Liability

 

Our loss on change in fair market value of Warrant liability was $125.6 million for the nine months ended September 30, 2024, compared to our loss on change in fair market value of Warrant liability of $1.9 million for the nine months ended September 30,

 

20

 

2023. The change in fair market value of Warrant liability is driven by the fluctuation of stock price used to remeasure the liability at the end of each period.

 

Loss on Extinguishment of Debt

 

There was no loss on extinguishment of debt for the nine months ended September 30, 2024. Loss on extinguishment of debt for the nine months ended September 30, 2023 was $14.9 million due to the settlement of the Credit Agreement through the issuance of Series C Preferred Stock and the termination of the M&T Credit Agreement and Forbearance Agreement (refer to our Annual Report on Form 10-K issued on March 18, 2024 for defined terms).

 

Income Taxes

 

Our income tax benefit was $3.3 million for the nine months ended September 30, 2024 compared to our income tax provision of $0.9 million for the nine months ended September 30, 2023. The increase in income tax expense is primarily explained by the mix of forecasted earnings in the U.S. and Mexico, as well as the impact of permanent and discrete items predominantly in Mexico.

 

Net Loss

 

As a result of the changes discussed above, net loss was $110.4 million for the nine months ended September 30, 2024 compared to $20.7 million for the nine months ended September 30, 2023. For the nine months ended September 30, 2024, basic and diluted net loss per share was $4.07, compared to basic and diluted net loss per share of $0.94 for the nine months ended September 30, 2023.

 

LIQUIDITY AND CAPITAL RESOURCES

(In thousands, except for share and per share data and unless otherwise noted)

 

Our primary sources of liquidity are our cash and cash equivalent balances on hand and our credit and debt facilities outlined below.

 

Revolving Credit Facility

 

As of September 30, 2024, a revolving line of credit maturing on October 31, 2024 exists in the maximum aggregate principal amount of up to $45,000, secured by a standby letter of credit in the principal amount of $25,000 and the Company’s accounts receivable. In connection with the standby letter of credit, the Company has agreed to pay an affiliate of OC III LFE (as defined below) a fee due and payable in cash of $375 per quarter.

 

The Company had no outstanding debt and remaining availability of $41,373 under this facility as of September 30, 2024. As of December 31, 2023, the Company had $29,415 in outstanding debt and remaining availability of $10,853 under this facility.

 

The standby letter of credit bears interest at the prime rate of interest (“Prime”) plus 1.5%, or 9.5% as of September 30, 2024. Advances secured by the Company’s accounts receivable bear interest at Prime plus 2%, or 10% as of September 30, 2024.

 

The revolving line of credit was subsequently amended on October 30, 2024 to extend the maturity date from October 31, 2024 to December 31, 2024, decrease the maximum aggregate principal amount from up to $45,000 to up to $20,000, and remove the standby letter of credit in the principal amount of $25,000 along with the $375 quarterly fee in connection with the standby letter of credit.

 

Warrant

 

The Company issued warrants to OC III LFE II LP (“OC III LFE”) and various affiliates of OC III LFE (collectively, the “Warrantholder”) in previous years which are exercisable on the terms described in Note 10 - Warrants.

 

Preferred Shares

 

In May 2023, the Company issued to OC III LFE 85,412 shares of non-convertible Series C Preferred Stock, $0.01 par value per share, with an initial stated and fair value of $85,412 or $1,000 per share (the “Preferred Stock”). As of September 30, 2024, 85,412 shares of the Preferred Stock remain issued and outstanding. The Company classifies the Preferred Stock as mezzanine equity (temporary equity outside of permanent equity) since a deemed liquidation event following a change of control may require redemption of the Preferred Stock that is not solely within the control of the Company.

The Preferred Stock ranks senior to the Common Stock with respect to payment of dividends and distribution of assets upon liquidation, dissolution and winding up. Dividends accrue at a rate of 17.5% per annum on the initial stated value. Accrued dividends,

 

21

 

whether or not declared, are cumulative. The Preferred Stock will not participate in any dividends paid to the holders of shares of Common Stock.

The Company may redeem the outstanding Preferred Stock at any time by payment of the initial stated value plus accrued dividends. If the Company has not redeemed on or prior to the fourth anniversary of issuance, the dividend rate will increase by 0.5% for every quarter thereafter until redeemed in full. OC III LFE has the right to request the Company redeem at any time after the sixth anniversary of issuance. If the Company does not redeem within six months after receipt of a redemption request, OC III LFE will be entitled to certain limited voting rights.

 

Additional Liquidity Factors

 

Our restricted cash, restricted cash equivalents and restricted certificates of deposit balances were $3.7 million and $0.7 million as of September 30, 2024 and December 31, 2023, respectively. Restricted deposits of $0.3 million as of each of September 30, 2024 and December 31, 2023 relate to a customer deposit for the purchase of railcars. Restricted deposits of $0.1 million as of each of September 30, 2024 and December 31, 2023 are used to collateralize standby letters of credit with respect to performance guarantees. The standby letters of credit outstanding as of September 30, 2024 are a requirement as long as the performance guarantees are in place. Restricted deposits of $3.3 million and $0.3 million as of September 30, 2024 and December 31, 2023, respectively, are used to collateralize foreign currency derivatives.

 

Based on our current level of operations and known changes in planned volume based on our backlog, we believe that our cash balances will be sufficient to meet our expected liquidity needs for at least the next twelve months. Our long-term liquidity is contingent upon future operating performance and our ability to continue to meet financial covenants under our revolving credit facilities, any other indebtedness and the availability of additional financing if needed. We may also require additional capital in the future to fund working capital for various reasons, such as future railcar demand; payments for contractual obligations; organic growth opportunities, including new plant and equipment and development of railcars; joint ventures; international expansion; and acquisitions, and these capital requirements could be substantial.

Based upon our operating performance and capital requirements, we may, from time to time, be required to raise additional funds through additional offerings of our equity or debt and through long-term borrowings. There can be no assurance that long-term debt, if needed, will be available on terms attractive to us, or at all. Furthermore, any additional equity financing may be dilutive to stockholders and debt financing, if available, may involve restrictive covenants. Our failure to raise capital if and when needed could have a material adverse effect on our results of operations and financial condition.

 

Cash Flows

 

The following table summarizes our cash flow activities for the nine months ended September 30, 2024 and 2023:

 

 

 

2024

 

 

2023

 

 

 

(In thousands)

 

Net cash provided by (used in):

 

 

 

 

 

 

Operating activities

 

$

39,047

 

 

$

(26,410

)

Investing activities

 

 

(3,731

)

 

 

(615

)

Financing activities

 

 

(31,046

)

 

 

4,492

 

Total

 

$

4,270

 

 

$

(22,533

)

 

Operating Activities. Our net cash provided by (used in) operating activities reflects net loss adjusted for non-cash charges and changes in operating assets and liabilities. Cash flows from operating activities are affected by several factors, including fluctuations in business volume, contract terms for billings and collections, the timing of collections on our contract receivables, processing of payroll and associated taxes, payments to our suppliers and other operating activities. As some of our customers accept delivery of new railcars in train-set quantities, variations in our sales could lead to significant fluctuations in our operating profits and cash from operating activities.

 

Our net cash provided by operating activities for the nine months ended September 30, 2024 was $39.0 million compared to net cash used in operating activities of $26.4 million for the nine months ended September 30, 2023. Our net cash provided by operating activities for the nine months ended September 30, 2024 reflects changes in working capital, including a decrease in inventory of $40.9 million, offset by an increase in accounts receivable of $17.9 million. The decrease in inventory relates to raw materials on hand at December 31, 2023 used in production of railcars delivered in 2024, as well as finished goods on hand at December 31, 2023 delivered in 2024 due to the closure of the US-Mexico border in December 2023. The increase in accounts receivable relates to the timing of collections with current railcar builds based on contractual payment terms. Our net cash used in operating activities for the

 

22

 

nine months ended September 30, 2023 reflects changes in working capital, primarily an increase in inventory of $57.2 million related to inventory to be used in production of railcars to be delivered during the fourth quarter of 2023, offset by an increase of $19.6 million customer deposits received during the nine months ended September 30, 2023.

 

Investing Activities. Net cash used in investing activities for the nine months ended September 30, 2024 was $3.7 million and consisted of capital expenditures related to the enhancement of machinery and equipment on current production lines of our facility in Castaños, Coahuila, Mexico (the “Castaños Facility”). Net cash used in investing activities for the nine months ended September 30, 2023 was $0.6 million and consisted of $8.4 million proceeds from the sale of railcars available for lease, net of selling costs, offset by capital expenditures of $9.0 million related to the expansion of the Castaños Facility.

 

Financing Activities. Net cash used in financing activities for the nine months ended September 30, 2024 was $31.0 million which included net repayments on revolving line of credit of $29.4 million and principal payments on the finance lease of $1.6 million. Net cash provided by financing activities for the nine months ended September 30, 2023 was $4.5 million which primarily included $13.3 million proceeds from the issuance of Series C Preferred Stock, net of issuance costs, partially offset by net repayments on revolving line of credit of $7.9 million.

 

Capital Expenditures

 

Our capital expenditures were $3.7 million in the nine months ended September 30, 2024, compared to $9.0 million in the nine months ended September 30, 2023, a decrease primarily due to the completion of the Castaños Facility expansion in 2023. We anticipate capital expenditures during 2024 to be in the range of $5.0 million to $6.0 million, primarily related to the enhancement of machinery and equipment on current production lines at the Castaños Facility.

 

 

23

 

Item 4. Controls and Procedures.

Management’s Report on Internal Control over Financial Reporting

 

The Company’s management evaluated, with the participation of the Company’s principal executive officer and principal financial officer, the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of September 30, 2024. Based on their evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2024.

Changes in Internal Control Over Financial Reporting

 

There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a–15(f) and 15d–15(f) under the Exchange Act) during the quarter ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

24

 

PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

Information regarding legal proceedings is available in Note 16 - Commitments and Contingencies.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

None.

 

Item 3. Defaults Upon Senior Securities.

 

None.

 

Item 4. Mine Safety Disclosures.

 

Not applicable.

 

Item 5. Other Information.

 

None.

 

Item 6. Exhibits.

 

(a)
Exhibits filed as part of this Form 10-Q:

 

10.1

Fourth Amendment to Amended and Restated Loan and Security Agreement, dated as of October 30, 2024, by and among the Company and certain of its subsidiaries and Siena Lending Group LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on November 1, 2024).

31.1

Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32

Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

 

101.INS

Inline XBRL Instance Document

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

  101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

 

 

Exhibit 104

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

 

 

25

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

 

 

 

 

 

 

 

 

FREIGHTCAR AMERICA, INC.

 

 

 

 

Date: November 12, 2024

 

By:

/s/ NICHOLAS J. RANDALL

 

 

 

Nicholas J. Randall, President and Chief Executive Officer

(Principal Executive Officer)

 

 

 

 

Date: November 12, 2024

 

By:

/s/ MICHAEL A. RIORDAN

 

 

 

Michael A. Riordan, Vice President, Finance, Chief Financial Officer and Treasurer (Principal Financial Officer)

 

 

 

 

Date: November 12, 2024

 

By:

/s/ JUAN CARLOS FUENTES SIERRA

 

 

 

Juan Carlos Fuentes Sierra, Corporate Controller and Chief Accounting Officer

(Principal Accounting Officer)

 

 

 

 

 

26

 

Exhibit 31.1

 

Certification of Principal Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

I, Nicholas J. Randall, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of FreightCar America, Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a)
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b)
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c)
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d)
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

 

a)
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b)
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

 

 

Date: November 12, 2024

By:

/s/ NICHOLAS J. RANDALL

 

 

Nicholas J. Randall

 

 

President and Chief Executive Officer

(Principal Executive Officer)

 

 

 

Exhibit 31.2

 

Certification of Principal Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

I, Michael A. Riordan, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of FreightCar America, Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a)
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b)
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c)
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d)
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

 

a)
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b)
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

 

 

Date: November 12, 2024

By:

/s/ MICHAEL A. RIORDAN

 

 

Michael A. Riordan

 

 

Vice President, Finance,

Chief Financial Officer and Treasurer

(Principal Financial Officer)

 

 

 

 

Exhibit 32

 

 

Certification pursuant to

18 U.S.C. Section 1350,

as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

 

In connection with the Quarterly Report of FreightCar America, Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Nicholas J. Randall, President and Chief Executive Officer, and Michael A. Riordan, Vice President, Finance, Chief Financial Officer and Treasurer, respectively, of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to our knowledge:

(1)
the Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

 

 

 

Date: November 12, 2024

By:

/s/ NICHOLAS J. RANDALL

 

 

Nicholas J. Randall

 

 

President and Chief Executive Officer

(Principal Executive Officer)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Date: November 12, 2024

By:

/s/ MICHAEL A. RIORDAN

 

 

Michael A. Riordan

 

 

Vice President, Finance,

Chief Financial Officer and Treasurer

(Principal Financial Officer)

A signed copy of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

 

 

 

 

v3.24.3
Document and Entity Information - shares
 9 Months Ended
Sep. 30, 2024
Oct. 29, 2024
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Quarterly Report true  
Document Transition Report false  
Current Fiscal Year End Date --12-31  
Document Period End Date Sep. 30, 2024  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q3  
Entity Central Index Key 0001320854  
Entity File Number 000-51237  
Entity Registrant Name FREIGHTCAR AMERICA, INC.  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 25-1837219  
Entity Address, Address Line One 125 South Wacker Drive  
Entity Address, Address Line Two Suite 1500  
Entity Address, City or Town Chicago  
Entity Address, State or Province IL  
Entity Address, Postal Zip Code 60606  
City Area Code 800  
Local Phone Number 458-2235  
Title of 12(b) Security Common stock, par value $0.01 per share  
Trading Symbol RAIL  
Security Exchange Name NASDAQ  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   18,893,972
v3.24.3
Condensed Consolidated Balance Sheets (Unaudited) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Current assets    
Cash, cash equivalents and restricted cash equivalents $ 44,830 $ 40,560
Accounts receivable, net of allowance for credit losses of $74 and $18 respectively 24,319 6,408
VAT receivable 2,489 2,926
Inventories, net 84,812 125,022
Assets held for sale 629 0
Related party asset 936 638
Prepaid expenses 10,100 4,867
Total current assets 168,115 180,421
Property, plant and equipment, net 30,461 31,258
Railcars available for lease, net 0 2,842
Right of use asset operating lease 2,514 2,826
Right of use asset finance lease 43,823 40,277
Other long-term assets 1,036 1,835
Total assets 245,949 259,459
Current liabilities    
Accounts and contractual payables 74,355 84,417
Related party accounts payable 2,493 2,478
Accrued payroll and other employee costs 7,447 5,738
Accrued warranty 1,493 1,602
Customer deposits 8,865 0
Current portion of long-term debt 0 29,415
Other current liabilities 10,196 13,711
Total current liabilities 104,849 137,361
Warrant liability 162,382 36,801
Accrued pension costs 1,226 1,046
Lease liability operating lease, long-term 2,778 3,164
Lease liability finance lease, long-term 45,482 41,273
Other long-term liabilities 1,660 2,562
Total liabilities 318,377 222,207
Commitments and contingencies
Series C Preferred stock, $0.01 par value, 85,412 shares authorized, 85,412 shares issued and outstanding at each of September 30, 2024 and December 31, 2023, respectively. Liquidation value $108,388 and $95,048 at September 30, 2024 and December 31, 2023, respectively. 83,889 83,458
Stockholders' deficit    
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 September 30, 2024 and December 31, 2023) 0 0
Common stock, $0.01 par value, 50,000,000 shares authorized, 18,884,838 and 17,903,437 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively 220 210
Additional paid in capital 97,098 94,067
Accumulated other comprehensive income 84 2,365
Accumulated deficit (253,719) (142,848)
Total stockholders' deficit (156,317) (46,206)
Total liabilities, mezzanine equity and stockholders' deficit $ 245,949 $ 259,459
v3.24.3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Allowance for doubtful accounts $ 74 $ 18
Preferred stock, par value $ 0.01 $ 0.01
Preferred stock, shares authorized 2,500,000 2,500,000
Common stock, par value $ 0.01 $ 0.01
Common stock, shares authorized 50,000,000 50,000,000
Common stock, shares issued 18,884,838 17,903,437
Common stock, shares outstanding 18,884,838 17,903,437
Series A Preferred Stock [Member]    
Preferred stock, shares authorized 100,000 100,000
Series B Preferred Stock [Member]    
Preferred stock, shares authorized 100,000 100,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Series C Preferred Stock [Member]    
Preferred stock, par value $ 0.01 $ 0.01
Preferred stock, shares authorized 85,412 85,412
Preferred stock, shares issued 85,412 85,412
Liquidation value $ 108,388 $ 95,048
Preferred stock, shares outstanding 85,412 85,412
v3.24.3
Condensed Consolidated Statements of Operations (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Income Statement [Abstract]        
Revenues $ 113,255 $ 61,894 $ 421,729 $ 231,489
Cost of sales 97,059 52,669 375,700 201,824
Gross profit 16,196 9,225 46,029 29,665
Selling, general and administrative expenses 7,538 7,511 23,541 19,750
Gain on sale of railcars available for lease 0 0 0 (622)
Loss on pension settlement 0 313   313
Litigation settlement 0 0 (3,214) 0
Operating income 8,658 1,401 25,702 10,224
Interest expense (1,577) (2,037) (5,815) (12,988)
(Loss) gain on change in fair market value of Warrant liability (110,040) 4,273 (125,581) (1,869)
Loss on extinguishment of debt 0 0 0 (14,880)
Other expense (680) (228) (1,419) (333)
{Loss} income before income taxes (103,639) 3,409 (107,113) (19,846)
Income tax (benefit) provision 3,407 216 3,327 887
Net loss $ (107,046) $ 3,193 $ (110,440) $ (20,733)
Net loss per common share - basic $ (3.57) $ (0.03) $ (4.07) $ (0.94)
Net loss per common share - diluted $ (3.57) $ (0.03) $ (4.07) $ (0.94)
Weighted average common shares outstanding - basic 31,353,997 29,543,963 30,519,545 28,064,410
Weighted average common shares outstanding - diluted 31,353,997 29,543,963 30,519,545 28,064,410
v3.24.3
Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Statement of Comprehensive Income [Abstract]        
Net loss $ (107,046) $ 3,193 $ (110,440) $ (20,733)
Other comprehensive (loss) income, net of tax:        
Loss on pension settlement 0 313 0 313
Unrealized (loss) gain on foreign currency derivatives (1,123) 34 (2,390) 34
Pension and postretirement liability adjustments 39 573 109 650
Comprehensive (loss) income $ (108,130) $ 4,113 $ (112,721) $ (19,736)
v3.24.3
Condensed Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited) - USD ($)
$ in Thousands
Total
Preferred Stock [Member]
Series C Preferred Stock [Member]
Common Stock [Member]
Additional Paid In Capital [Member]
Accumulated Other Comprehensive (Loss) Income [Member]
Retained (Deficit) [Member]
Balance at Dec. 31, 2022 $ (28,584)   $ 203 $ 89,104 $ 1,022 $ (118,913)
Balance (Shares) at Dec. 31, 2022     17,223,306      
Other comprehensive income 997       997  
Balance at Jun. 30, 2023 (48,954) $ 83,253 $ 210 92,633 1,099 (142,896)
Balance (Shares) at Jun. 30, 2023   85,412 17,899,191      
Balance at Dec. 31, 2022 (28,584)   $ 203 89,104 1,022 (118,913)
Balance (Shares) at Dec. 31, 2022     17,223,306      
Net income (Loss) (20,733)         (20,733)
Issuance of Preferred Stock value (203) $ 83,314       (203)
Preferred Stock Shares Issued1   85,412        
Accretion of preferred shares issuance costs (203)          
Restricted stock awards     $ 4 (4)    
Restricted stock awards, shares     453,258      
Employee stock settlement (106)     (106)    
Employee stock settlement, shares     (31,888)      
Stock Appreciation Rights Classification Modification 1,738     1,738    
Vesting of Restricted Stock Units Share     42,815      
Vesting of Restricted Stock Units $ 145     $ 145    
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period 3   4,984 3    
Exercise of stock appreciation rights, Shares 3   4,984 3    
Stock-based compensation recognized $ 1,789     $ 1,789    
Equity fees 685   $ 3 682    
Equity fees, Shares     210,962      
Balance at Sep. 30, 2023 (44,269) $ 83,314 $ 210 93,351 2,019 (139,849)
Balance (Shares) at Sep. 30, 2023   85,412 17,903,437      
Balance at Jun. 30, 2023 (48,954) $ 83,253 $ 210 $ 92,633 1,099 (142,896)
Balance (Shares) at Jun. 30, 2023   85,412 17,899,191      
Net income (Loss) 3,193         3,193
Other comprehensive income 920       920  
Issuance of Preferred Stock value   $ 61       (146)
Accretion of preferred shares issuance costs $ (146)          
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period 3   4,246 3    
Exercise of stock appreciation rights, Shares 3   4,246 3    
Stock-based compensation recognized $ 715     $ 715    
Balance at Sep. 30, 2023 (44,269) $ 83,314 $ 210 93,351 2,019 (139,849)
Balance (Shares) at Sep. 30, 2023   85,412 17,903,437      
Balance at Dec. 31, 2023 $ (46,206) $ 83,458 $ 210 94,067 2,365 (142,848)
Balance (Shares) at Dec. 31, 2023 17,903,437 85,412 17,903,437      
Net income (Loss) $ (110,440)         (110,440)
Other comprehensive income (2,281)       (2,281)  
Accretion of preferred shares issuance costs (431) $ 431       (431)
Restricted stock awards     $ 8 (8)    
Restricted stock awards, shares     774,796      
Employee stock settlement (40)     (40)    
Employee stock settlement, shares     (14,615)      
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period     328,010      
Forfeiture of restricted stock awards     $ (1) 1    
Forfeiture of restricted stock awards, shares     (106,790)      
Exercise of stock appreciation rights 751   $ 3 748    
Exercise of stock appreciation rights, Shares     328,010      
Stock-based compensation recognized 2,330     2,330    
Balance at Sep. 30, 2024 $ (156,317) $ 83,889 $ 220 97,098 84 (253,719)
Balance (Shares) at Sep. 30, 2024 18,884,838 85,412 18,884,838      
Balance at Jun. 30, 2024 $ (48,829) $ 83,745 $ 220 96,312 1,168 (146,529)
Balance (Shares) at Jun. 30, 2024   85,412 18,873,850      
Net income (Loss) (107,046)         (107,046)
Other comprehensive income 1,084       1,084  
Accretion of preferred shares issuance costs (144) $ 144       (144)
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period     10,988      
Exercise of stock appreciation rights (18)     (18)    
Exercise of stock appreciation rights, Shares     10,988      
Stock-based compensation recognized 804     804    
Balance at Sep. 30, 2024 $ (156,317) $ 83,889 $ 220 $ 97,098 $ 84 $ (253,719)
Balance (Shares) at Sep. 30, 2024 18,884,838 85,412 18,884,838      
v3.24.3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Cash flows from operating activities    
Net loss $ (110,440) $ (20,733)
Adjustments to reconcile net loss to net cash flows provided by (used in) operating activities:    
Depreciation and amortization 4,252 3,189
Non-cash lease expense on right-of-use assets 2,226 1,873
Loss on change in fair market value of Warrant liability 125,581 1,869
Loss on pension settlement 0 313
Stock-based compensation recognized 2,330 524
Non-cash interest expense 3,638 8,980
Loss on extinguishment of debt 0 14,880
Other non-cash items, net (1,589) (435)
Changes in operating assets and liabilities:    
Accounts receivable (17,911) (1,126)
VAT receivable 465 2,320
Inventories 40,859 (57,213)
Accounts and contractual payables (8,300) 2,739
Income taxes payable, net (2,179) (1,490)
Lease liability (2,802) (2,779)
Customer deposits 8,865 19,644
Other assets and liabilities (5,948) 1,035
Net cash flows provided by (used in) operating activities 39,047 (26,410)
Cash flows from investing activities    
Purchase of property, plant and equipment (3,731) (8,971)
Proceeds from sale of railcars available for lease, net of selling costs 0 8,356
Net cash flows used in investing activities (3,731) (615)
Cash flows from financing activities    
Proceeds from issuance of preferred shares, net of issuance costs 0 13,254
Deferred financing costs 0 (300)
Borrowings on revolving line of credit 26,595 115,172
Repayments on revolving line of credit (56,010) (123,062)
Employee stock settlement (40) (106)
Payment for stock appreciation rights exercised 0 (6)
Financing lease payments (1,591) (460)
Net cash flows (used in) provided by financing activities (31,046) 4,492
Net increase (decrease) in cash and cash equivalents 4,270 (22,533)
Cash, cash equivalents and restricted cash equivalents at beginning of period 40,560 37,912
Cash, cash equivalents and restricted cash equivalents at end of period 44,830 15,379
Supplemental cash flow information    
Interest paid 2,177 3,961
Income taxes paid 5,061 1,857
Non-cash transactions    
Change in unpaid construction in process (226) 51
Accrued PIK interest paid through issuance of PIK Note 0 3,161
Issuance of preferred shares in exchange of term loan 72,688
Issuance of Warrants 0 3,014
Issuance of equity fee $ 0 $ 685
v3.24.3
Insider Trading Arrangements
 3 Months Ended
Sep. 30, 2024
Trading Arrangements, by Individual  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.24.3
Description of the Business
 9 Months Ended
Sep. 30, 2024
Description of the Business [Abstract]  
Description of the Business

Note 1 – Description of the Business

 

FreightCar America, Inc. (“FreightCar”, the “Company”, “we” or “our”) operates primarily in North America through its direct and indirect subsidiaries, and designs and manufactures a wide range of railroad freight cars, completes railcar rebody and repair services, provides railcar conversion services that repurpose idled rail assets back into revenue service, and supplies railcar parts. The Company designs and builds high-quality railcars, including bulk commodity cars, covered hopper cars, intermodal and non-intermodal flat cars, mill gondola cars, coil steel cars, coal cars and boxcars. The Company is headquartered in Chicago, Illinois and has facilities in the following locations: Johnstown, Pennsylvania; Qingdao, People’s Republic of China; and Castaños, Coahuila, Mexico (the “Castaños Facility”).
v3.24.3
Basis of Presentation
 9 Months Ended
Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation

Note 2 – Basis of Presentation

 

The accompanying condensed consolidated financial statements include the accounts of FreightCar and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The foregoing financial information has been prepared in accordance with the accounting principles generally accepted in the United States of America (“GAAP”) and rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial reporting. The preparation of the financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the results to be expected for the full year. The accompanying interim financial information is unaudited; however, the Company believes the financial information reflects all adjustments (consisting of items of a normal recurring nature) necessary for a fair presentation of financial position, results of operations and cash flows in conformity with GAAP. The 2023 year-end balance sheet data was derived from the audited financial statements as of December 31, 2023. Certain information and note disclosures normally included in the Company’s annual financial statements prepared in accordance with GAAP have been condensed or omitted. Certain prior year amounts have been reclassified, where necessary, to conform to the current year presentation. These interim financial statements should be read in conjunction with the audited financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

v3.24.3
Revenue Recognition
 9 Months Ended
Sep. 30, 2024
Revenue from Contract with Customer [Abstract]  
Revenue Recognition

Note 3 – Revenue Recognition

 

The following table disaggregates the Company’s revenues by major source:

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Railcar sales

 

$

109,010

 

 

$

58,407

 

 

$

405,684

 

 

$

220,752

 

Parts sales

 

 

4,175

 

 

 

3,340

 

 

 

14,393

 

 

 

9,613

 

Revenues from contracts with customers

 

 

113,185

 

 

 

61,747

 

 

 

420,077

 

 

 

230,365

 

Leasing revenues

 

 

70

 

 

 

147

 

 

 

1,652

 

 

 

1,124

 

Total revenues

 

$

113,255

 

 

$

61,894

 

 

$

421,729

 

 

$

231,489

 

 

Contract Balances and Accounts Receivable

 

Contract assets represent the Company’s rights to consideration for performance obligations that have been satisfied but for which the terms of the contract do not permit billing at the reporting date. The Company had no contract assets as of September 30, 2024 and December 31, 2023. The Company may receive cash payments from customers in advance of the Company satisfying performance obligations under its sales contracts resulting in deferred revenue or customer deposits, which are considered contract liabilities. Deferred revenue and customer deposits are classified as either current or long-term liabilities in the condensed consolidated balance sheet based on the timing of when the Company expects to recognize the related revenue. Customer deposits and deferred revenue, included in customer deposits and other current liabilities, respectively, in the Company’s condensed consolidated balance sheet, were $8,865 as of September 30, 2024 and $5,686 as of December 31, 2023. The December amounts were recognized as revenue during the first quarter of 2024. The Company has not experienced significant historical credit losses.

 

Performance Obligations

 

The Company is electing not to disclose the value of the remaining unsatisfied performance obligations with a duration of one year or less as permitted by ASU 2014-09, Revenue from Contracts with Customers. The Company had remaining unsatisfied performance obligations as of September 30, 2024 with expected duration of greater than one year of $108,914.
v3.24.3
Segment Information
 9 Months Ended
Sep. 30, 2024
Segment Reporting [Abstract]  
Segment Information

Note 4 – Segment Information

 

The Company’s operations consist of two operating segments, Manufacturing and Parts, and one reportable segment, Manufacturing. The Company’s Manufacturing segment includes new railcar manufacturing, railcar rebody and repair services, and complete railcar conversion services that repurpose idled rail assets back into revenue service. The Company’s Parts operating segment is not significant for reporting purposes and has been combined with corporate and other non-operating activities as Corporate and Other.

 

Segment operating income is an internal performance measure used by the Company’s Chief Operating Decision Maker to assess the performance of each segment in a given period. Segment operating income includes all external revenues attributable to the segments as well as operating costs and income that management believes are directly attributable to the current production of goods and services. The Company’s internal management reporting package does not include interest revenue, interest expense or income taxes allocated to individual segments and these items are not considered as a component of segment operating income. Segment assets represent operating assets and exclude intersegment accounts, deferred tax assets and income tax receivables. The Company does not allocate cash and cash equivalents and restricted cash and restricted cash equivalents to its operating segments as the Company’s treasury function is managed at the corporate level. Intersegment revenues were not material in any period presented.

 

 

 

Three Months Ended

 

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

September 30,

 

 

 

2024

 

 

2023

 

 

 

2024

 

 

2023

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

Manufacturing

 

$

109,080

 

 

$

58,554

 

 

 

$

407,336

 

 

$

221,877

 

Corporate and Other

 

 

4,175

 

 

 

3,340

 

 

 

 

14,393

 

 

 

9,612

 

Consolidated revenues

 

$

113,255

 

 

$

61,894

 

 

 

$

421,729

 

 

$

231,489

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

Manufacturing (1)

 

$

13,823

 

 

$

7,378

 

 

 

$

40,816

 

 

$

24,775

 

Corporate and Other (2)

 

 

(5,165

)

 

 

(5,977

)

 

 

 

(15,114

)

 

 

(14,551

)

Consolidated operating income

 

$

8,658

 

 

$

1,401

 

 

 

$

25,702

 

 

$

10,224

 

Consolidated interest expense

 

 

(1,577

)

 

 

(2,037

)

 

 

 

(5,815

)

 

 

(12,988

)

(Loss) gain on change in fair market value of Warrant liability

 

 

(110,040

)

 

 

4,273

 

 

 

 

(125,581

)

 

 

(1,869

)

Loss on extinguishment of debt

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

(14,880

)

Consolidated other expense

 

 

(680

)

 

 

(228

)

 

 

 

(1,419

)

 

 

(333

)

Consolidated (loss) income before income taxes

 

$

(103,639

)

 

$

3,409

 

 

 

$

(107,113

)

 

$

(19,846

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization:

 

 

 

 

 

 

 

 

 

 

 

 

 

Manufacturing

 

$

1,331

 

 

$

942

 

 

 

$

3,906

 

 

$

2,763

 

Corporate and Other

 

 

111

 

 

 

143

 

 

 

 

346

 

 

 

426

 

Consolidated depreciation and amortization

 

$

1,442

 

 

$

1,085

 

 

 

$

4,252

 

 

$

3,189

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures:

 

 

 

 

 

 

 

 

 

 

 

 

 

Manufacturing

 

$

1,277

 

 

$

3,989

 

 

 

$

3,485

 

 

$

8,815

 

Corporate and Other

 

 

185

 

 

 

28

 

 

 

 

246

 

 

 

156

 

Consolidated capital expenditures

 

$

1,462

 

 

$

4,017

 

 

 

$

3,731

 

 

$

8,971

 

 

(1) Results for the nine months ended September 30, 2024 include a litigation settlement, of which $1,386 was allocated to leasing revenues and $3,214 was allocated to litigation settlement. Results for the nine months ended September 30, 2023 include a gain on sale of railcars available for lease of $622.

(2) Results for the three and nine months ended September 30, 2023 include a loss on pension settlement of $313.

 

 

 

September 30,

 

 

December 31,

 

 

 

2024

 

 

2023

 

Assets:

 

 

 

 

 

 

Manufacturing

 

$

187,001

 

 

$

207,093

 

Corporate and Other

 

 

55,988

 

 

 

51,158

 

Total operating assets

 

 

242,989

 

 

 

258,251

 

Consolidated income taxes receivable

 

 

2,960

 

 

 

1,208

 

Consolidated assets

 

$

245,949

 

 

$

259,459

 

 

 

Geographic Information

 

 

 

Revenues

 

 

Long Lived Assets (a)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

 

 

 

 

 

 

September 30,

 

 

September 30,

 

 

September 30,

 

 

December 31,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

United States

 

$

113,255

 

 

$

61,894

 

 

$

421,729

 

 

$

231,489

 

 

$

4,090

 

 

$

7,377

 

Mexico

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

72,708

 

 

 

69,826

 

Total

 

$

113,255

 

 

$

61,894

 

 

$

421,729

 

 

$

231,489

 

 

$

76,798

 

 

$

77,203

 

 

 

(a) Long lived assets include property plant and equipment, net, railcars available for lease, net, and right-of-use (ROU) assets.
v3.24.3
Fair Value Measurements
 9 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
Fair Value Measurements

Note 5 – Fair Value Measurements

 

The following table sets forth by level within the fair value hierarchy the Company’s financial assets that were recorded at fair value on a recurring basis and the Company’s non-financial assets that were recorded at fair value on a non-recurring basis.

 

Recurring Fair Value Measurements

 

As of September 30, 2024

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Warrant liability

 

$

-

 

 

$

162,382

 

 

$

-

 

 

$

162,382

 

Foreign currency derivative liability

 

$

-

 

 

$

1,784

 

 

$

-

 

 

$

1,784

 

 

Recurring Fair Value Measurements

 

As of December 31, 2023

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Warrant liability

 

$

-

 

 

$

36,801

 

 

$

-

 

 

$

36,801

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency derivative asset

 

$

-

 

 

$

606

 

 

$

-

 

 

$

606

 

 

Non-recurring Fair Value Measurements

 

During the Nine Months Ended September 30, 2024

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Assets held for sale

 

$

-

 

 

$

-

 

 

$

629

 

 

$

629

 

 

 

Non-recurring Fair Value Measurements

 

During the Year Ended December 31, 2023

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Railcars available for lease, net

 

$

-

 

 

$

-

 

 

$

2,842

 

 

$

2,842

 

 

 

The fair value of the Company’s Warrant (as defined in Note 10 - Warrants) liability recorded in the Company’s financial statements, determined using the quoted price of the Company’s common stock, par value $0.01 per share (the “Common Stock”), in an active market, exercise prices of $0.01 per share and $3.57 per share, and number of shares exercisable at September 30, 2024 and December 31, 2023, is a Level 2 measurement.

The fair value of the Company’s foreign currency derivative (liability) asset determined using exit prices obtained from each counterparty, which are based on currency spot and forward rates at September 30, 2024 and December 31, 2023 in an active market, is a Level 2 measurement. See Note 15 - Derivatives.

 

The fair value of the Company's fleet of triple hopper aggregate railcars determined using a cost plus market approach for a portion of the assets and a market-based approach for the remainder of the assets at December 31, 2023, is a Level 3 measurement. In the first quarter of 2024, the Company gained possession of these railcars. The portion of railcars intended to be sold in their current condition were classified as assets held for sale, while the remaining railcars intended to be converted into a new car type were classified as inventory.

v3.24.3
Restricted Cash
 9 Months Ended
Sep. 30, 2024
Restricted Cash [Abstract]  
Restricted Cash

Note 6 – Restricted Cash

 

The Company establishes restricted cash balances when required by customer contracts, and to collateralize standby letters of credit or foreign currency derivatives. The carrying value of restricted cash approximates its fair value.

 

The Company’s restricted cash balances are as follows:

 

 

 

September 30,

 

 

December 31,

 

 

 

2024

 

 

2023

 

Restricted cash from customer deposit

 

$

282

 

 

$

282

 

Restricted cash to collateralize standby letters of credit

 

 

103

 

 

 

103

 

Restricted cash to collateralize foreign currency derivatives

 

 

3,300

 

 

 

320

 

Total restricted cash and restricted cash equivalents

 

$

3,685

 

 

$

705

 
v3.24.3
Inventories
 9 Months Ended
Sep. 30, 2024
Inventory Disclosure [Abstract]  
Inventories

Note 7 – Inventories

 

Inventories, net of reserve for excess and obsolete items, consist of the following:

 

 

 

September 30,

 

 

December 31,

 

 

 

2024

 

 

2023

 

Raw materials

 

$

65,913

 

 

$

65,639

 

Work in process

 

 

6,961

 

 

 

31,138

 

Finished railcars

 

 

6,329

 

 

 

23,196

 

Parts inventory

 

 

5,609

 

 

 

5,049

 

Total inventories, net

 

$

84,812

 

 

$

125,022

 

 

Inventory on the Company’s condensed consolidated balance sheets includes reserves of $1,918 and $1,594 relating to excess or slow-moving inventory for parts and raw materials at September 30, 2024 and December 31, 2023, respectively.

v3.24.3
Product Warranties
 9 Months Ended
Sep. 30, 2024
Product Warranties Disclosures [Abstract]  
Product Warranties

Note 8 – Product Warranties

 

Warranty terms are based on the negotiated railcar sale, rebody or conversion contract, as applicable. Changes in the warranty reserve for the nine months ended September 30, 2024 and 2023 are as follows:

 

 

 

 

For the Nine Months Ended September 30,

 

 

 

 

 

2024

 

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

Balance at the beginning of the year

 

 

$

1,602

 

 

 

$

1,940

 

 

Current year provision

 

 

 

511

 

 

 

 

663

 

 

Reductions for payments, costs of repairs and other

 

 

 

(340

)

 

 

 

(852

)

 

Adjustments to prior warranties

 

 

 

(280

)

 

 

 

(113

)

 

Balance at the end of the period

 

 

$

1,493

 

 

 

$

1,638

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments to prior warranties include changes in the warranty reserve for warranties issued in prior periods due to expiration of the warranty period, revised warranty cost estimates and other factors.
v3.24.3
Revolving Credit Facility
 9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
Revolving Credit Facility

Note 9 – Revolving Credit Facility

 

As of September 30, 2024, a revolving line of credit maturing on October 31, 2024 exists in the maximum aggregate principal amount of up to $45,000, secured by a standby letter of credit in the principal amount of $25,000 and the Company’s accounts receivable. In

connection with the standby letter of credit, the Company has agreed to pay an affiliate of OC III LFE (as defined below) a fee due and payable in cash of $375 per quarter.

 

The Company had no outstanding debt and remaining availability of $41,373 under this facility as of September 30, 2024. As of December 31, 2023, the Company had $29,415 in outstanding debt and remaining availability of $10,853 under this facility.

 

The standby letter of credit bears interest at the prime rate of interest (“Prime”) plus 1.5%, or 9.5% as of September 30, 2024. Advances secured by the Company’s accounts receivable bear interest at Prime plus 2%, or 10% as of September 30, 2024.

 

The revolving line of credit was subsequently amended on October 30, 2024 to extend the maturity date from October 31, 2024 to December 31, 2024, decrease the maximum aggregate principal amount from up to $45,000 to up to $20,000, and remove the standby letter of credit in the principal amount of $25,000 along with the $375 quarterly fee in connection with the standby letter of credit.

 

The fair value of debt approximates its carrying value as of December 31, 2023.
v3.24.3
Warrants
 9 Months Ended
Sep. 30, 2024
Warrants and Rights Note Disclosure [Abstract]  
Warrants

Note 10 – Warrants

 

The Company issued warrants to OC III LFE II LP (“OC III LFE”) and various affiliates of OC III LFE (collectively, the “Warrantholder”) in previous years to purchase a number of shares of Common Stock equal to 23% (the “2020 Warrant”), 5% (the “2021 Warrant”), and 5% (the “2022 Warrant”) of the outstanding Common Stock (after giving effect to such issuance) on a fully-diluted basis at the time the warrants are exercised. The 2020 Warrant, 2021 Warrant, and 2022 Warrant each have a per share exercise price of $0.01 and a term of ten (10) years from date of issuance.

 

The 2020 Warrant, issued in November 2020, was exercisable for an aggregate of 9,502,172 and 8,712,618 shares of Common Stock as of September 30, 2024 and December 31, 2023, respectively. The 2021 Warrant, issued in December 2021, was exercisable for an aggregate of 2,065,689 and 1,894,047 shares of Common Stock as of September 30, 2024 and December 31, 2023, respectively. The 2022 Warrant, issued in April 2022, was exercisable for an aggregate of 2,065,689 and 1,894,047 shares of Common Stock as of September 30, 2024 and December 31, 2023, respectively. The Company also issued a warrant to the Warrantholder in May 2023 to purchase an aggregate of 1,636,313 shares of Common Stock (the “2023 Warrant”), exercisable for a term of ten (10) years from date of issuance with a per share exercise price of $3.57.

 

The 2020 Warrant, 2021 Warrant, 2022 Warrant and 2023 Warrant are collectively referred to herein as the “Warrant”. As of September 30, 2024, the Warrant is classified as a liability and subject to fair value remeasurement at each balance sheet date. The fair value of the Warrant at September 30, 2024 and December 31, 2023 was $162,382 and $36,801, respectively. The change in fair value of the Warrant is reported on a separate line in the condensed consolidated statements of operations.

v3.24.3
Mezzanine Equity
 9 Months Ended
Sep. 30, 2024
Equity [Abstract]  
Mezzanine Equity

Note 11 – Mezzanine Equity

 

In May 2023, the Company issued to OC III LFE 85,412 shares of non-convertible Series C Preferred Stock, $0.01 par value per share, with an initial stated and fair value of $85,412 or $1,000 per share (the “Preferred Stock”). As of September 30, 2024, 85,412 shares of the Preferred Stock remain issued and outstanding. The Company classifies the Preferred Stock as mezzanine equity (temporary equity outside of permanent equity) because a deemed liquidation event following a change of control may require redemption of the Preferred Stock that is not solely within the control of the Company.

 

The Preferred Stock ranks senior to the Common Stock with respect to payment of dividends and distribution of assets upon liquidation, dissolution and winding up. Dividends accrue at a rate of 17.5% per annum on the initial stated value of the Preferred Stock. Accrued dividends, whether or not declared, are cumulative. OC III LFE will not participate in any dividends paid to holders of Common Stock.

The Company may redeem outstanding shares of Preferred Stock at any time by payment of the initial stated value plus accrued dividends. If the Company has not redeemed all of the outstanding shares of Preferred Stock on or prior to the fourth anniversary of issuance, the dividend rate will increase by 0.5% for every quarter thereafter until redeemed in full (the “Dividend Rate Increase”). OC III LFE has the right to request the Company redeem all of the outstanding shares of Preferred Stock at any time after the sixth anniversary of issuance. If the Company does not redeem all of the outstanding shares of Preferred Stock within six months after receipt of a redemption request, OC III LFE will be entitled to certain limited voting rights.

The Preferred Stock has similar characteristics of an “Increasing Rate Security” as described by SEC Staff Accounting Bulletin Topic 5Q, Increasing Rate Preferred Stock. As a result, and as the Company has the ability to redeem all of the outstanding shares of the Preferred Stock before the occurrence of a Dividend Rate Increase, the discount on outstanding shares of Preferred Stock is considered

an unstated dividend cost that is amortized over the period preceding commencement of the Dividend Rate Increase using the effective interest method, by charging imputed dividend cost against retained earnings, or additional paid in capital in the absence of retained earnings, and increasing the carrying amount of the outstanding shares of Preferred Stock by a corresponding amount. Accordingly, the discount is amortized over four years using the effective yield method. Issuance costs of $2,301 were allocated against the outstanding shares of the Preferred Stock upon issuance. The Company recognized discount amortization of $144 and $431 during the three and nine months ended September 30, 2024, respectively, and $146 and $203 during the three and nine months ended September 30, 2023, respectively.

v3.24.3
Accumulated Other Comprehensive Income
 9 Months Ended
Sep. 30, 2024
Other Comprehensive Income (Loss), Net of Tax [Abstract]  
Accumulated Other Comprehensive Income

Note 12 – Accumulated Other Comprehensive Income

The changes in accumulated other comprehensive income consist of the following:

 

 

 

Pre-Tax

 

 

Tax

 

 

After-Tax

 

Three months ended September 30, 2024

 

 

 

 

 

 

 

 

 

Pension liability activity:

 

 

 

 

 

 

 

 

 

Reclassification adjustment for amortization of net loss (pre-tax other income)

 

$

39

 

 

$

-

 

 

$

39

 

Foreign currency derivative liability activity:

 

 

 

 

 

 

 

 

 

Unrealized loss on foreign currency derivatives

 

$

(1,123

)

 

$

-

 

 

$

(1,123

)

 

 

$

(1,084

)

 

$

-

 

 

$

(1,084

)

 

Three months ended September 30, 2023

 

 

 

 

 

 

 

 

 

Pension liability activity:

 

 

 

 

 

 

 

 

 

Loss on pension settlement

 

$

313

 

 

$

-

 

 

$

313

 

Reclassification adjustment for amortization of net loss (pre-tax other income)

 

 

573

 

 

 

-

 

 

 

573

 

 

 

$

886

 

 

$

-

 

 

$

886

 

Foreign currency derivative asset activity:

 

 

 

 

 

 

 

 

 

Unrealized gain on foreign currency derivatives

 

$

34

 

 

$

-

 

 

$

34

 

 

 

$

920

 

 

$

-

 

 

$

920

 

 

Nine months ended September 30, 2024

 

Pre-Tax

 

 

Tax

 

 

After-Tax

 

Pension liability activity:

 

 

 

 

 

 

 

 

 

Reclassification adjustment for amortization of net loss (pre-tax other income)

 

$

109

 

 

$

-

 

 

$

109

 

Foreign currency derivative liability activity:

 

 

 

 

 

 

 

 

 

Unrealized loss on foreign currency derivatives

 

$

(2,390

)

 

$

-

 

 

$

(2,390

)

 

 

$

(2,281

)

 

$

-

 

 

$

(2,281

)

 

Nine months ended September 30, 2023

 

 

 

 

 

 

 

 

 

Pension liability activity:

 

 

 

 

 

 

 

 

 

Loss on pension settlement

 

$

313

 

 

$

-

 

 

$

313

 

Reclassification adjustment for amortization of net loss (pre-tax other income)

 

 

650

 

 

 

-

 

 

 

650

 

 

 

$

963

 

 

$

-

 

 

$

963

 

Foreign currency derivative asset activity:

 

 

 

 

 

 

 

 

 

Unrealized gain on foreign currency derivatives

 

$

34

 

 

$

-

 

 

$

34

 

 

 

$

997

 

 

$

-

 

 

$

997

 

 

The components of accumulated other comprehensive income consist of the following:

 

 

 

September 30,

 

 

December 31,

 

 

2024

 

 

2023

 

Unrecognized pension income, net of tax of $6,282 and $6,282, respectively

 

$

1,868

 

 

$

1,759

 

Unrealized (loss) gain on foreign currency derivatives

 

 

(1,784

)

 

 

606

 

 

 

$

84

 

 

$

2,365

 
v3.24.3
Stock-Based Compensation
 9 Months Ended
Sep. 30, 2024
Share-Based Payment Arrangement, Noncash Expense [Abstract]  
Stock-Based Compensation

Note 13 – Stock-Based Compensation

 

Total stock-based compensation was $804 and $715 for the three months ended September 30, 2024 and 2023, respectively, and $2,330 and $524 for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, there was $2,064 of unearned compensation expense related to restricted stock awards, which will be recognized over the remaining weighted average

requisite service period of 21 months. As of September 30, 2024, there was $1,751 of unearned compensation expense related to time-vested stock options, which will be recognized over the remaining requisite service period of 23 months. As of September 30, 2024, there was no unearned compensation expense related to cash settled stock appreciation rights.

 

In June 2023, the Company issued 300,000 inducement stock options (the “Inducement Options”) outside of The FreightCar America, Inc. 2022 Long Term Incentive Plan to one individual. As of September 30, 2024, there was $172 of unrecognized compensation expense related to the Inducement Options, which will be recognized over the remaining requisite service period of 21 months.
v3.24.3
Employee Benefit Plans
 9 Months Ended
Sep. 30, 2024
Retirement Benefits [Abstract]  
Employee Benefit Plans

Note 14 – Employee Benefit Plans

 

The Company has a qualified, defined benefit pension plan (the “Plan”) that was established to provide benefits to certain employees. The Plan is frozen and participants are no longer accruing benefits. Generally, contributions to the Plan were not less than the minimum amounts required under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and not more than the maximum amount that can be deducted for federal income tax purposes. The Plan assets are held by an independent trustee and consist primarily of equity and fixed income securities.

 

The components of net periodic benefit cost for the three and nine months ended September 30, 2024 and 2023, are as follows:

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

Pension Benefits

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Interest cost

 

$

130

 

 

$

151

 

 

$

399

 

 

$

453

 

Expected return on plan assets

 

 

(70

)

 

 

(83

)

 

 

(220

)

 

 

(250

)

Amortization of unrecognized net income

 

 

39

 

 

 

38

 

 

 

109

 

 

 

115

 

Loss on pension settlement

 

 

-

 

 

 

313

 

 

 

-

 

 

 

313

 

 

 

$

99

 

 

$

419

 

 

$

288

 

 

$

631

 

 

The Company made no contributions to the Plan for the three and nine months ended September 30, 2024 and 2023. The Company expects to make no contributions to the Plan in 2024.

 

The Company also maintains qualified defined contribution plans, which provide benefits to employees based on employee contributions and employee earnings with discretionary contributions allowed.

v3.24.3
Commitments and Contingencies
 9 Months Ended
Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

Note 16 - Commitments and Contingencies

 

The Company is involved in various litigation matters from time to time, including intellectual property litigation, and warranty and repair claims incidental to the conduct of our business. Although the Company is taking actions to vigorously contest these matters, it is not possible to determine the outcome of these matters and proceedings. The Company does not believe these actions will have a material adverse effect on our financial position, results of operations or cash flows.
v3.24.3
Derivatives
 9 Months Ended
Sep. 30, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives

Note 15 – Derivatives

 

The Company’s operations and expenditures in its normal course of business are subject to opportunities and risks related to foreign currency fluctuations. The Company currently utilizes foreign currency forward contracts to protect against downward currency exposure by hedging Mexican Peso denominated expenses against the risk of volatility in foreign currency exchange rates between the Mexican Peso and the U.S. Dollar.

During 2023 and 2024, the Company entered into forward contracts to hedge the Company’s anticipated and probable Mexican Peso denominated expenses against the foreign currency rate exposure. The contracts have terms between one and 12 months and require the Company to exchange currencies at agreed-upon rates at each settlement date. The counterparties to the contracts consist of a limited number of domestic and international financial institutions. The Company classifies these contracts as cash flow hedges in accordance with ASC 815, Derivatives and Hedging. The Company does not have any non-designated derivatives.

The Company assesses the assumed effectiveness of the contracts at each reporting period. The foreign currency derivatives are recorded on the balance sheet at fair value. The Company records unrealized gains or losses related to changes in the fair value of the forward contracts in other comprehensive income as long as the contracts are assumed to be effective. Amounts accumulated in other comprehensive (loss) income are reclassified to the condensed consolidated statements of operations on the same line as the items being hedged when the hedged item impacts earnings or upon determination that the contract is no longer assumed to be effective.
 

The notional amounts of outstanding foreign currency derivatives are as follows:

 

 

 

September 30,

 

 

December 31,

 

Notional Amount

 

2024

 

 

2023

 

Derivative instruments designated as hedges:

 

 

 

 

 

 

Foreign currency derivatives

 

$

25,281

 

 

$

11,562

 

 

The fair value of outstanding foreign currency derivatives designated as hedges are as follows:

 

 

 

September 30,

 

 

December 31,

 

Fair Value

 

2024

 

 

2023

 

Other current liabilities:

 

 

 

 

 

 

Foreign currency derivatives

 

$

1,784

 

 

$

-

 

Prepaid expenses:

 

 

 

 

 

 

Foreign currency derivatives

 

$

-

 

 

$

606

 

 

The pre-tax realized loss (gain) on foreign currency derivatives is recognized in the condensed consolidated statements of operations as follows:

 

 

 

 

 

Amount of Loss/(Gain) Recognized

 

 

Amount of (Gain) Recognized

 

 

 

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

Location of Realized Loss/(Gain) Recognized in the Condensed Consolidated Statements of Operations

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Derivative instruments designated as cash flow hedges:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency derivatives

 

Cost of sales

 

$

72

 

 

$

(8

)

 

$

(449

)

 

$

(8

)
v3.24.3
Loss Per Share
 9 Months Ended
Sep. 30, 2024
Earnings Per Share [Abstract]  
Loss Per Share

Note 17 – Loss Per Share

 

The net loss available to common stockholders and weighted-average common shares outstanding are as follows:

 

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(107,046

)

 

$

3,193

 

 

$

(110,440

)

 

$

(20,733

)

Accretion of financing fees

 

 

(144

)

 

 

(146

)

 

 

(431

)

 

 

(203

)

Accrued dividends on Series C Preferred Stock

 

 

(4,676

)

 

 

(3,923

)

 

 

(13,340

)

 

 

(5,535

)

Net loss available to common stockholders - basic

 

$

(111,866

)

 

$

(876

)

 

$

(124,211

)

 

$

(26,471

)

Net loss available to common stockholders - diluted

 

$

(111,866

)

 

$

(876

)

 

$

(124,211

)

 

$

(26,471

)

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

17,633,629

 

 

 

17,044,251

 

 

 

17,433,479

 

 

 

16,937,968

 

Issuance of Warrants

 

 

13,720,368

 

 

 

12,499,712

 

 

 

13,086,066

 

 

 

11,126,442

 

Weighted average common shares outstanding - basic

 

 

31,353,997

 

 

 

29,543,963

 

 

 

30,519,545

 

 

 

28,064,410

 

Weighted average common shares outstanding - diluted

 

 

31,353,997

 

 

 

29,543,963

 

 

 

30,519,545

 

 

 

28,064,410

 

 

 

The Company computes earnings per share using the two-class method, which is an earnings allocation formula that determines earnings per share for Common Stock and participating securities. The Company’s participating securities are its grants of restricted stock which contain non-forfeitable rights to dividends. The Company allocates earnings between both classes; however, in periods of undistributed losses, they are only allocated to common shares as the unvested restricted stockholders do not contractually participate in losses of the Company. The Company computes basic earnings per share by dividing net income allocated to common shareholders by the weighted average number of shares outstanding during the period. Warrants issued in connection with the Company's long-term

debt were issued at a nominal exercise price and are considered outstanding at the date of issuance. The 2023 Warrant was issued out-of-the money and the Company will apply the treasury stock method to the 2023 Warrant when computing earnings per share. Diluted earnings per share is calculated to give effect to all potentially dilutive common shares that were outstanding during the period. Weighted average diluted common shares outstanding include the incremental shares that would be issued upon the assumed exercise of stock options and the assumed vesting of nonvested share awards. For the three months ended September 30, 2024 and 2023, 2,058,180 and 6,222,085 shares, respectively, were not included in the weighted average common shares outstanding calculation as they were anti-dilutive. For the nine months ended September 30, 2024 and 2023, 3,119,672 and 5,996,646 shares, respectively, were not included in the weighted average common shares outstanding calculation as they were anti-dilutive.
v3.24.3
Related Parties
 9 Months Ended
Sep. 30, 2024
Related Party Transactions [Abstract]  
Related Parties

Note 18 – Related Parties

 

The following persons are owners of Fabricaciones y Servicios de México, S.A. de C.V. (“Fasemex”): Jesús Gil, a director of the Company; and Alejandro Gil and Salvador Gil, siblings of Jesús Gil. Fasemex owns approximately 10.3% of the outstanding shares of Common Stock as of September 30, 2024 and provides steel fabrication services to the Company. The lessors of the Castaños Facility are Jesús Gil, Alejandro Gil, and Salvador Gil. Distribuciones Industriales JAS S.A. de C.V. (“DI”) is owned by Alejandro Gil and Salvador Gil and provides material and safety supplies to the Company. Maquinaria y equipo de transporte Jova S.A. de C.V (“METJ”) is owned by Jorge Gil, a sibling of Jesús Gil, and provides trucking services to the Company. Fasemex, DI, METJ, Jesús Gil, Alejandro Gil, Salvador Gil, and Jorge Gil are collectively referred to as the “Gil Family”.

The Company paid $6,058 and $20,711 to the Gil Family during the three and nine months ended September 30, 2024, respectively, and $3,909 and $13,675 during the three and nine months ended September 30, 2023, respectively, related to steel fabrication services, rent and security deposit payments for the Castaños Facility, material and safety supplies, trucking services and royalty payments.

Commercial Specialty Truck Holdings, LLC (“CSTH”) is minority owned by James R. Meyer, a member of our Board, our former CEO, and beneficial owner of over 5% of our Common Stock. The Company sold specialty parts supplies in an amount equal to $268 and $683 to CSTH during the three and nine months ended September 30, 2024, respectively. The Company sold no specialty parts supplies to CSTH during the three and nine months ended September 30, 2023.

 

Related party asset on the condensed consolidated balance sheet of $936 as of September 30, 2024 includes other receivables of $254 from CSTH and other assets of $682 from the Gil Family. Related party accounts payable on the condensed consolidated balance sheet of $2,493 as of September 30, 2024 is payable to the Gil Family. Related party asset on the condensed consolidated balance sheet of $638 as of December 31, 2023 includes other receivables of $517 from the Gil Family and $121 from CSTH. Related party accounts payable on the condensed consolidated balance sheet of $2,478 as of December 31, 2023 is payable to the Gil Family.

v3.24.3
Income Taxes
 9 Months Ended
Sep. 30, 2024
Income Tax Disclosure [Abstract]  
Income Taxes

Note 19 – Income Taxes

 

The Company’s tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items. The Company’s effective income tax rate was (3.3)% and 6.3% for the three months ended September 30, 2024 and 2023, respectively, and (3.1)% and (4.5)% for the nine months ended September 30, 2024 and 2023, respectively. The Company’s effective income tax rates for the respective periods of 2024 and 2023 differed from the U.S. statutory tax rate of 21% primarily due to the mix of pre-tax earnings in the U.S. and Mexico; permanent differences and discrete events, predominantly in Mexico; and a full valuation allowance in the U.S.
v3.24.3
Basis of Presentation (Policy)
 9 Months Ended
Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation

The accompanying condensed consolidated financial statements include the accounts of FreightCar and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The foregoing financial information has been prepared in accordance with the accounting principles generally accepted in the United States of America (“GAAP”) and rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial reporting. The preparation of the financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the results to be expected for the full year. The accompanying interim financial information is unaudited; however, the Company believes the financial information reflects all adjustments (consisting of items of a normal recurring nature) necessary for a fair presentation of financial position, results of operations and cash flows in conformity with GAAP. The 2023 year-end balance sheet data was derived from the audited financial statements as of December 31, 2023. Certain information and note disclosures normally included in the Company’s annual financial statements prepared in accordance with GAAP have been condensed or omitted. Certain prior year amounts have been reclassified, where necessary, to conform to the current year presentation. These interim financial statements should be read in conjunction with the audited financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

v3.24.3
Revenue Recognition (Tables)
 9 Months Ended
Sep. 30, 2024
Revenue from Contract with Customer [Abstract]  
Schedule of Revenue Recognition

The following table disaggregates the Company’s revenues by major source:

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Railcar sales

 

$

109,010

 

 

$

58,407

 

 

$

405,684

 

 

$

220,752

 

Parts sales

 

 

4,175

 

 

 

3,340

 

 

 

14,393

 

 

 

9,613

 

Revenues from contracts with customers

 

 

113,185

 

 

 

61,747

 

 

 

420,077

 

 

 

230,365

 

Leasing revenues

 

 

70

 

 

 

147

 

 

 

1,652

 

 

 

1,124

 

Total revenues

 

$

113,255

 

 

$

61,894

 

 

$

421,729

 

 

$

231,489

 
v3.24.3
Segment Information (Tables)
 9 Months Ended
Sep. 30, 2024
Segment Reporting [Abstract]  
Schedule of Segment Reporting Information, by Segment

 

 

Three Months Ended

 

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

September 30,

 

 

 

2024

 

 

2023

 

 

 

2024

 

 

2023

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

Manufacturing

 

$

109,080

 

 

$

58,554

 

 

 

$

407,336

 

 

$

221,877

 

Corporate and Other

 

 

4,175

 

 

 

3,340

 

 

 

 

14,393

 

 

 

9,612

 

Consolidated revenues

 

$

113,255

 

 

$

61,894

 

 

 

$

421,729

 

 

$

231,489

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

Manufacturing (1)

 

$

13,823

 

 

$

7,378

 

 

 

$

40,816

 

 

$

24,775

 

Corporate and Other (2)

 

 

(5,165

)

 

 

(5,977

)

 

 

 

(15,114

)

 

 

(14,551

)

Consolidated operating income

 

$

8,658

 

 

$

1,401

 

 

 

$

25,702

 

 

$

10,224

 

Consolidated interest expense

 

 

(1,577

)

 

 

(2,037

)

 

 

 

(5,815

)

 

 

(12,988

)

(Loss) gain on change in fair market value of Warrant liability

 

 

(110,040

)

 

 

4,273

 

 

 

 

(125,581

)

 

 

(1,869

)

Loss on extinguishment of debt

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

(14,880

)

Consolidated other expense

 

 

(680

)

 

 

(228

)

 

 

 

(1,419

)

 

 

(333

)

Consolidated (loss) income before income taxes

 

$

(103,639

)

 

$

3,409

 

 

 

$

(107,113

)

 

$

(19,846

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization:

 

 

 

 

 

 

 

 

 

 

 

 

 

Manufacturing

 

$

1,331

 

 

$

942

 

 

 

$

3,906

 

 

$

2,763

 

Corporate and Other

 

 

111

 

 

 

143

 

 

 

 

346

 

 

 

426

 

Consolidated depreciation and amortization

 

$

1,442

 

 

$

1,085

 

 

 

$

4,252

 

 

$

3,189

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures:

 

 

 

 

 

 

 

 

 

 

 

 

 

Manufacturing

 

$

1,277

 

 

$

3,989

 

 

 

$

3,485

 

 

$

8,815

 

Corporate and Other

 

 

185

 

 

 

28

 

 

 

 

246

 

 

 

156

 

Consolidated capital expenditures

 

$

1,462

 

 

$

4,017

 

 

 

$

3,731

 

 

$

8,971

 

 

(1) Results for the nine months ended September 30, 2024 include a litigation settlement, of which $1,386 was allocated to leasing revenues and $3,214 was allocated to litigation settlement. Results for the nine months ended September 30, 2023 include a gain on sale of railcars available for lease of $622.

(2) Results for the three and nine months ended September 30, 2023 include a loss on pension settlement of $313.
Reconciliation of Assets From Segment to Consolidated

 

 

September 30,

 

 

December 31,

 

 

 

2024

 

 

2023

 

Assets:

 

 

 

 

 

 

Manufacturing

 

$

187,001

 

 

$

207,093

 

Corporate and Other

 

 

55,988

 

 

 

51,158

 

Total operating assets

 

 

242,989

 

 

 

258,251

 

Consolidated income taxes receivable

 

 

2,960

 

 

 

1,208

 

Consolidated assets

 

$

245,949

 

 

$

259,459

 

 
Geographic Information

 

Geographic Information

 

 

 

Revenues

 

 

Long Lived Assets (a)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

 

 

 

 

 

 

September 30,

 

 

September 30,

 

 

September 30,

 

 

December 31,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

United States

 

$

113,255

 

 

$

61,894

 

 

$

421,729

 

 

$

231,489

 

 

$

4,090

 

 

$

7,377

 

Mexico

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

72,708

 

 

 

69,826

 

Total

 

$

113,255

 

 

$

61,894

 

 

$

421,729

 

 

$

231,489

 

 

$

76,798

 

 

$

77,203

 

 

 

(a) Long lived assets include property plant and equipment, net, railcars available for lease, net, and right-of-use (ROU) assets.
v3.24.3
Fair Value Measurements (Tables)
 6 Months Ended
Jun. 30, 2024
Fair Value Disclosures [Abstract]  
Fair Value, Assets Measured on Recurring Basis and Non-Recurring Basis

The following table sets forth by level within the fair value hierarchy the Company’s financial assets that were recorded at fair value on a recurring basis and the Company’s non-financial assets that were recorded at fair value on a non-recurring basis.

 

Recurring Fair Value Measurements

 

As of September 30, 2024

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Warrant liability

 

$

-

 

 

$

162,382

 

 

$

-

 

 

$

162,382

 

Foreign currency derivative liability

 

$

-

 

 

$

1,784

 

 

$

-

 

 

$

1,784

 

 

Recurring Fair Value Measurements

 

As of December 31, 2023

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Warrant liability

 

$

-

 

 

$

36,801

 

 

$

-

 

 

$

36,801

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency derivative asset

 

$

-

 

 

$

606

 

 

$

-

 

 

$

606

 

 

Non-recurring Fair Value Measurements

 

During the Nine Months Ended September 30, 2024

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Assets held for sale

 

$

-

 

 

$

-

 

 

$

629

 

 

$

629

 

 

 

Non-recurring Fair Value Measurements

 

During the Year Ended December 31, 2023

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Railcars available for lease, net

 

$

-

 

 

$

-

 

 

$

2,842

 

 

$

2,842

 
v3.24.3
Restricted Cash (Tables)
 9 Months Ended
Sep. 30, 2024
Restricted Cash [Abstract]  
Restricted Cash

The Company’s restricted cash balances are as follows:

 

 

 

September 30,

 

 

December 31,

 

 

 

2024

 

 

2023

 

Restricted cash from customer deposit

 

$

282

 

 

$

282

 

Restricted cash to collateralize standby letters of credit

 

 

103

 

 

 

103

 

Restricted cash to collateralize foreign currency derivatives

 

 

3,300

 

 

 

320

 

Total restricted cash and restricted cash equivalents

 

$

3,685

 

 

$

705

 
v3.24.3
Inventories (Tables)
 9 Months Ended
Sep. 30, 2024
Inventory Disclosure [Abstract]  
Schedule of Inventory Current

Inventories, net of reserve for excess and obsolete items, consist of the following:

 

 

 

September 30,

 

 

December 31,

 

 

 

2024

 

 

2023

 

Raw materials

 

$

65,913

 

 

$

65,639

 

Work in process

 

 

6,961

 

 

 

31,138

 

Finished railcars

 

 

6,329

 

 

 

23,196

 

Parts inventory

 

 

5,609

 

 

 

5,049

 

Total inventories, net

 

$

84,812

 

 

$

125,022

 
v3.24.3
Product Warranties (Tables)
 9 Months Ended
Sep. 30, 2024
Product Warranties Disclosures [Abstract]  
Changes in Warranty Reserve Changes in the warranty reserve for the nine months ended September 30, 2024 and 2023 are as follows:

 

 

 

 

For the Nine Months Ended September 30,

 

 

 

 

 

2024

 

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

Balance at the beginning of the year

 

 

$

1,602

 

 

 

$

1,940

 

 

Current year provision

 

 

 

511

 

 

 

 

663

 

 

Reductions for payments, costs of repairs and other

 

 

 

(340

)

 

 

 

(852

)

 

Adjustments to prior warranties

 

 

 

(280

)

 

 

 

(113

)

 

Balance at the end of the period

 

 

$

1,493

 

 

 

$

1,638

 

 

 

 

 

 

 

 

 

 

 

 
v3.24.3
Accumulated Other Comprehensive Loss (Tables)
 9 Months Ended
Sep. 30, 2024
Other Comprehensive Income (Loss), Net of Tax [Abstract]  
Schedule of Changes in Accumulated Other Comprehensive Income (Loss)

The changes in accumulated other comprehensive income consist of the following:

 

 

 

Pre-Tax

 

 

Tax

 

 

After-Tax

 

Three months ended September 30, 2024

 

 

 

 

 

 

 

 

 

Pension liability activity:

 

 

 

 

 

 

 

 

 

Reclassification adjustment for amortization of net loss (pre-tax other income)

 

$

39

 

 

$

-

 

 

$

39

 

Foreign currency derivative liability activity:

 

 

 

 

 

 

 

 

 

Unrealized loss on foreign currency derivatives

 

$

(1,123

)

 

$

-

 

 

$

(1,123

)

 

 

$

(1,084

)

 

$

-

 

 

$

(1,084

)

 

Three months ended September 30, 2023

 

 

 

 

 

 

 

 

 

Pension liability activity:

 

 

 

 

 

 

 

 

 

Loss on pension settlement

 

$

313

 

 

$

-

 

 

$

313

 

Reclassification adjustment for amortization of net loss (pre-tax other income)

 

 

573

 

 

 

-

 

 

 

573

 

 

 

$

886

 

 

$

-

 

 

$

886

 

Foreign currency derivative asset activity:

 

 

 

 

 

 

 

 

 

Unrealized gain on foreign currency derivatives

 

$

34

 

 

$

-

 

 

$

34

 

 

 

$

920

 

 

$

-

 

 

$

920

 

 

Nine months ended September 30, 2024

 

Pre-Tax

 

 

Tax

 

 

After-Tax

 

Pension liability activity:

 

 

 

 

 

 

 

 

 

Reclassification adjustment for amortization of net loss (pre-tax other income)

 

$

109

 

 

$

-

 

 

$

109

 

Foreign currency derivative liability activity:

 

 

 

 

 

 

 

 

 

Unrealized loss on foreign currency derivatives

 

$

(2,390

)

 

$

-

 

 

$

(2,390

)

 

 

$

(2,281

)

 

$

-

 

 

$

(2,281

)

 

Nine months ended September 30, 2023

 

 

 

 

 

 

 

 

 

Pension liability activity:

 

 

 

 

 

 

 

 

 

Loss on pension settlement

 

$

313

 

 

$

-

 

 

$

313

 

Reclassification adjustment for amortization of net loss (pre-tax other income)

 

 

650

 

 

 

-

 

 

 

650

 

 

 

$

963

 

 

$

-

 

 

$

963

 

Foreign currency derivative asset activity:

 

 

 

 

 

 

 

 

 

Unrealized gain on foreign currency derivatives

 

$

34

 

 

$

-

 

 

$

34

 

 

 

$

997

 

 

$

-

 

 

$

997

 

 
Components of Accumulated Other Comprehensive Income

The components of accumulated other comprehensive income consist of the following:

 

 

 

September 30,

 

 

December 31,

 

 

2024

 

 

2023

 

Unrecognized pension income, net of tax of $6,282 and $6,282, respectively

 

$

1,868

 

 

$

1,759

 

Unrealized (loss) gain on foreign currency derivatives

 

 

(1,784

)

 

 

606

 

 

 

$

84

 

 

$

2,365

 
v3.24.3
Employee Benefit Plans (Tables)
 9 Months Ended
Sep. 30, 2024
Retirement Benefits [Abstract]  
Components of Net Periodic Benefit Cost

The components of net periodic benefit cost for the three and nine months ended September 30, 2024 and 2023, are as follows:

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

Pension Benefits

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Interest cost

 

$

130

 

 

$

151

 

 

$

399

 

 

$

453

 

Expected return on plan assets

 

 

(70

)

 

 

(83

)

 

 

(220

)

 

 

(250

)

Amortization of unrecognized net income

 

 

39

 

 

 

38

 

 

 

109

 

 

 

115

 

Loss on pension settlement

 

 

-

 

 

 

313

 

 

 

-

 

 

 

313

 

 

 

$

99

 

 

$

419

 

 

$

288

 

 

$

631

 
v3.24.3
Derivatives (Tables)
 9 Months Ended
Sep. 30, 2024
Foreign Currency [Abstract]  
Schedule of Notional Amounts of Outstanding Forgein Currency Derivatives

The notional amounts of outstanding foreign currency derivatives are as follows:

 

 

 

September 30,

 

 

December 31,

 

Notional Amount

 

2024

 

 

2023

 

Derivative instruments designated as hedges:

 

 

 

 

 

 

Foreign currency derivatives

 

$

25,281

 

 

$

11,562

 
Schedule of Fair Value of Outstanding Forgein Currency Derivatives Designated as Hedges

The fair value of outstanding foreign currency derivatives designated as hedges are as follows:

 

 

 

September 30,

 

 

December 31,

 

Fair Value

 

2024

 

 

2023

 

Other current liabilities:

 

 

 

 

 

 

Foreign currency derivatives

 

$

1,784

 

 

$

-

 

Prepaid expenses:

 

 

 

 

 

 

Foreign currency derivatives

 

$

-

 

 

$

606

 
Schedule of Pre-text Realizes Gain on Forgein Currency Derivatives

The pre-tax realized loss (gain) on foreign currency derivatives is recognized in the condensed consolidated statements of operations as follows:

 

 

 

 

 

Amount of Loss/(Gain) Recognized

 

 

Amount of (Gain) Recognized

 

 

 

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

Location of Realized Loss/(Gain) Recognized in the Condensed Consolidated Statements of Operations

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Derivative instruments designated as cash flow hedges:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency derivatives

 

Cost of sales

 

$

72

 

 

$

(8

)

 

$

(449

)

 

$

(8

)
v3.24.3
Loss Per Share (Tables)
 9 Months Ended
Sep. 30, 2024
Earnings Per Share [Abstract]  
Weighted Average Common Shares Outstanding

The net loss available to common stockholders and weighted-average common shares outstanding are as follows:

 

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(107,046

)

 

$

3,193

 

 

$

(110,440

)

 

$

(20,733

)

Accretion of financing fees

 

 

(144

)

 

 

(146

)

 

 

(431

)

 

 

(203

)

Accrued dividends on Series C Preferred Stock

 

 

(4,676

)

 

 

(3,923

)

 

 

(13,340

)

 

 

(5,535

)

Net loss available to common stockholders - basic

 

$

(111,866

)

 

$

(876

)

 

$

(124,211

)

 

$

(26,471

)

Net loss available to common stockholders - diluted

 

$

(111,866

)

 

$

(876

)

 

$

(124,211

)

 

$

(26,471

)

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

17,633,629

 

 

 

17,044,251

 

 

 

17,433,479

 

 

 

16,937,968

 

Issuance of Warrants

 

 

13,720,368

 

 

 

12,499,712

 

 

 

13,086,066

 

 

 

11,126,442

 

Weighted average common shares outstanding - basic

 

 

31,353,997

 

 

 

29,543,963

 

 

 

30,519,545

 

 

 

28,064,410

 

Weighted average common shares outstanding - diluted

 

 

31,353,997

 

 

 

29,543,963

 

 

 

30,519,545

 

 

 

28,064,410

 
v3.24.3
Revenue Recognition (Narrative) (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Disaggregation of Revenue [Line Items]    
Contract assets $ 0 $ 0
Deferred revenue and customer deposits 8,865 $ 5,686
Performance obligation $ 108,914  
v3.24.3
Revenue Recognition (Schedule of Revenue Recognition) (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Disaggregation of Revenue [Line Items]        
Revenues from contracts with customers $ 113,185 $ 61,747 $ 420,077 $ 230,365
Leasing revenues 70 147 1,652 1,124
Total revenues 113,255 61,894 421,729 231,489
Railcar Sales [Member]        
Disaggregation of Revenue [Line Items]        
Revenues from contracts with customers 109,010 58,407 405,684 220,752
Parts Sales [Member]        
Disaggregation of Revenue [Line Items]        
Revenues from contracts with customers $ 4,175 $ 3,340 $ 14,393 $ 9,613
v3.24.3
Segment Information (Narrative) (Details)
 9 Months Ended
Sep. 30, 2024
Segment
Segment Reporting [Abstract]  
Number of operating segments 2
Number of reportable segments 1
v3.24.3
Segment Information (Schedule of Segment Reporting Information, by Segment) (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Segment Reporting Information [Line Items]        
Revenues $ 113,255 $ 61,894 $ 421,729 $ 231,489
Operating income (loss) 8,658 1,401 25,702 10,224
(Loss) gain on change in fair market value of Warrant liability (110,040) 4,273 (125,581) (1,869)
Loss on extinguishment of debt 0 0 0 (14,880)
Consolidated other expense (680) (228) (1,419) (333)
Litigation settlement     3,214  
Restructuring and impairment charges       622
Operating Segments [Member]        
Segment Reporting Information [Line Items]        
Revenues 113,255 61,894 421,729 231,489
Operating income (loss) 8,658 1,401 25,702 10,224
Consolidated interest expense (1,577) (2,037) (5,815) (12,988)
(Loss) gain on change in fair market value of Warrant liability (110,040) 4,273 (125,581) (1,869)
Loss on extinguishment of debt 0 0 0 (14,880)
Consolidated other expense (680) (228) (1,419) (333)
Consolidated (loss) income before income taxes (103,639) 3,409 (107,113) (19,846)
Depreciation and amortization 1,442 1,085 4,252 3,189
Capital expenditures 1,462 4,017 3,731 8,971
Operating Segments [Member] | Manufacturing [Member]        
Segment Reporting Information [Line Items]        
Revenues 109,080 58,554 407,336 221,877
Operating income (loss) [1] 13,823 7,378 40,816 24,775
Depreciation and amortization 1,331 942 3,906 2,763
Capital expenditures 1,277 3,989 3,485 8,815
Operating Segments [Member] | Corporate and Other [Member]        
Segment Reporting Information [Line Items]        
Revenues 4,175 3,340 14,393 9,612
Operating income (loss) [2] (5,165) (5,977) (15,114) (14,551)
Depreciation and amortization 111 143 346 426
Capital expenditures $ 185 $ 28 $ 246 $ 156
[1] Results for the nine months ended September 30, 2024 include a litigation settlement, of which $1,386 was allocated to leasing revenues and $3,214 was allocated to litigation settlement. Results for the nine months ended September 30, 2023 include a gain on sale of railcars available for lease of $622.
[2] Results for the three and nine months ended September 30, 2023 include a loss on pension settlement of $313.
v3.24.3
Segment Information - (Schedule of Segment Reporting Information, by Segment) (Parenthetical) (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Segment Reporting [Abstract]        
Allocated leasing revenue     $ 1,386  
Litigation settlement     $ 3,214  
Restructuring and impairment charges       $ 622
Loss on pension settlement $ 0 $ 313   $ 313
v3.24.3
Segment Information (Reconciliation of Assets from Segment to Consolidated) (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Segment Reporting Information [Line Items]    
Total assets $ 245,949 $ 259,459
Operating Segments [Member]    
Segment Reporting Information [Line Items]    
Total operating assets 242,989 258,251
Consolidated income taxes receivable 2,960 1,208
Total assets 245,949 259,459
Operating Segments [Member] | Manufacturing [Member]    
Segment Reporting Information [Line Items]    
Total operating assets 187,001 207,093
Operating Segments [Member] | Corporate and Other [Member]    
Segment Reporting Information [Line Items]    
Total operating assets $ 55,988 $ 51,158
v3.24.3
Segment Information (Geographic Information) (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Segment Reporting Information [Line Items]          
Revenues $ 113,255 $ 61,894 $ 421,729 $ 231,489  
Operating Segments [Member]          
Segment Reporting Information [Line Items]          
Revenues 113,255 61,894 421,729 231,489  
Long Lived Assets [1] 76,798   76,798   $ 77,203
Operating Segments [Member] | United States [Member]          
Segment Reporting Information [Line Items]          
Revenues 113,255 61,894 421,729 231,489  
Long Lived Assets [1] 4,090   4,090   7,377
Operating Segments [Member] | Mexico [Member]          
Segment Reporting Information [Line Items]          
Revenues 0 $ 0 0 $ 0  
Long Lived Assets [1] $ 72,708   $ 72,708   $ 69,826
[1] Long lived assets include property plant and equipment, net, railcars available for lease, net, and right-of-use (ROU) assets.
v3.24.3
Fair Value Measurements (Narrative) (Details) - Fair Value, Inputs, Level 2 [Member] - $ / shares
Sep. 30, 2024
Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Warrant Exercise price $ 0.01 $ 3.57
Common stock, par value $ 0.01 $ 0.01
v3.24.3
Fair Value Measurements (Fair Value, Assets Measured on Recurring Basis and Non-Recurring Basis) (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Assets held for sale $ 629 $ 0
Fair Value, Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Foreign currency derivative liability 1,784  
Foreign currency derivative asset   606
Warrant liability 162,382 36,801
Fair Value, Nonrecurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Assets held for sale 629  
Railcars available for lease, net   2,842
Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Foreign currency derivative liability 0  
Foreign currency derivative asset   0
Warrant liability 0 0
Fair Value, Inputs, Level 1 [Member] | Fair Value, Nonrecurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Assets held for sale 0  
Railcars available for lease, net   0
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Foreign currency derivative liability 1,784  
Foreign currency derivative asset   606
Warrant liability 162,382 36,801
Fair Value, Inputs, Level 2 [Member] | Fair Value, Nonrecurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Assets held for sale 0  
Railcars available for lease, net   0
Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Foreign currency derivative liability 0  
Foreign currency derivative asset   0
Warrant liability 0 0
Fair Value, Inputs, Level 3 [Member] | Fair Value, Nonrecurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Assets held for sale $ 629  
Railcars available for lease, net   $ 2,842
v3.24.3
Restricted Cash (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Restricted Cash and Cash Equivalents Items [Line Items]    
Total restricted cash $ 3,685 $ 705
Restricted Cash from Customer Deposit [Member]    
Restricted Cash and Cash Equivalents Items [Line Items]    
Total restricted cash 282 282
Restricted Cash to Collateralize Standby Letters of Credit [Member]    
Restricted Cash and Cash Equivalents Items [Line Items]    
Total restricted cash 103 103
Restricted Cash to Collateralize Foreign Currency Derivatves [Member]    
Restricted Cash and Cash Equivalents Items [Line Items]    
Total restricted cash $ 3,300 $ 320
v3.24.3
Inventories (Schedule of Inventory Current) (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Inventory Disclosure [Abstract]    
Raw materials $ 65,913 $ 65,639
Work in process 6,961 31,138
Finished railcars 6,329 23,196
Parts inventory 5,609 5,049
Total inventories, net $ 84,812 $ 125,022
v3.24.3
Inventories (Narrative) (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Inventory Disclosure [Abstract]    
Inventory valuation reserves $ 1,918 $ 1,594
v3.24.3
Product Warranties - Changes in Warranty Reserve (Details) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Product Warranties Disclosures [Abstract]    
Balance at the beginning of the year $ 1,602 $ 1,940
Current year provision 511 663
Reductions for payments, costs of repairs and other (340) (852)
Adjustments to prior warranties (280) (113)
Balance at the end of the period $ 1,493 $ 1,638
v3.24.3
Revolving Credit Facility (Additional Information) (Details) - USD ($)
$ in Thousands
 9 Months Ended
Oct. 30, 2024
Sep. 30, 2024
Dec. 31, 2023
Line of Credit Facility [Line Items]      
Long-Term Line of Credit   $ 0 $ 29,415
Debt Instrument, Maturity Date The revolving line of credit was subsequently amended on October 30, 2024 to extend the maturity date from October 31, 2024 to December 31, 2024 October 31, 2024  
Revolving loan, interest rate   1.50%  
Debt Instrument, Interest Rate During Period   9.50%  
Accounts Receivable Variable Interest rate   2.00%  
Accounts Receivable Variable Interest Rate during Period   10.00%  
Revolving Credit Facility [Member]      
Line of Credit Facility [Line Items]      
Long-Term Line of Credit   $ 41,373 $ 10,853
Letter of Credit [Member]      
Line of Credit Facility [Line Items]      
Aggregate principal amount $ 20,000 25,000  
Debt Instrument, Letter of credit, Revoked 25,000    
Maximum [Member]      
Line of Credit Facility [Line Items]      
Aggregate principal amount   $ 45,000  
Maximum [Member] | Letter of Credit [Member]      
Line of Credit Facility [Line Items]      
Aggregate principal amount $ 45,000    
v3.24.3
Debt Financing and Revolving Credit Facilities (Narrative) (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
May 31, 2023
Line of Credit Facility [Line Items]            
Common stock, par value $ 0.01   $ 0.01   $ 0.01  
Preferred stock, par value $ 0.01   $ 0.01   $ 0.01  
Gain on extinguishment of debt $ 0 $ 0 $ 0 $ (14,880)    
Revolving loan, interest rate     1.50%      
Long-Term Line of Credit $ 0   $ 0   $ 29,415  
Common stock 18,884,838   18,884,838   17,903,437  
Current portion of long-term debt $ 0   $ 0   $ 29,415  
Revolving Credit Facility [Member]            
Line of Credit Facility [Line Items]            
Long-Term Line of Credit 41,373   41,373   $ 10,853  
Maximum            
Line of Credit Facility [Line Items]            
Aggregate principal amount $ 45,000   $ 45,000      
Series C Preferred Stock [Member]            
Line of Credit Facility [Line Items]            
Preferred stock, shares issued 85,412   85,412   85,412 85,412
Preferred stock, par value $ 0.01   $ 0.01   $ 0.01 $ 0.01
v3.24.3
Debt Financing and Revolving Credit Facilities (Long-Term Debt) (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Debt Instrument [Line Items]    
Less amounts due within one year $ 0 $ (29,415)
v3.24.3
Debt Financing and Revolving Credit Facilities (Fair Value of Warrant) (Details)
$ in Thousands
Sep. 30, 2024
USD ($)
Debt Disclosure [Abstract]  
Warrant liability beginning $ 36,801
Warrant liability ending $ 162,382
v3.24.3
Warrants (Additional Information) (Details) - USD ($)
$ / shares in Units, $ in Thousands
 9 Months Ended
Sep. 30, 2024
Dec. 31, 2023
May 31, 2023
Class of Warrant or Right [Line Items]      
Common stock, shares issued 18,884,838 17,903,437  
Warrant liability $ 162,382 $ 36,801  
2023 Warrant      
Class of Warrant or Right [Line Items]      
Warrant Exercise price $ 3.57    
Warrants term 10 years    
Warrants issued to purchase common stock     1,636,313
2022 Warrant      
Class of Warrant or Right [Line Items]      
Percentage of oustanding common shares 5.00%    
Warrant Exercise price $ 0.01    
Warrants term 10 years    
Common stock, shares issued 2,065,689 1,894,047  
2021 Warrant      
Class of Warrant or Right [Line Items]      
Percentage of oustanding common shares 5.00%    
Warrant Exercise price $ 0.01    
Warrants term 10 years    
Common stock, shares issued 2,065,689 1,894,047  
2020 Warrant      
Class of Warrant or Right [Line Items]      
Percentage of oustanding common shares 23.00%    
Warrant Exercise price $ 0.01    
Warrants term 10 years    
Common stock, shares issued 9,502,172 8,712,618  
v3.24.3
Mezzanine Equity (Additional Information) (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
May 31, 2023
Class of Stock [Line Items]            
Preferred stock, par value $ 0.01   $ 0.01   $ 0.01  
Preferred Stock [Member]            
Class of Stock [Line Items]            
Preferred stock, dividend rate     0.50%      
Stock issuance costs     $ 2,301      
Amortization of discount $ 144 $ 146 $ 431 $ 203    
Series C Preferred Stock [Member]            
Class of Stock [Line Items]            
Preferred stock, shares issued 85,412   85,412   85,412 85,412
Preferred stock, shares outstanding 85,412   85,412   85,412  
Preferred stock, par value $ 0.01   $ 0.01   $ 0.01 $ 0.01
Preferred stock, initial stated value           $ 85,412
Preferred stock, initial fair value, per share           $ 1,000
Preferred stock, dividend rate     17.50%      
v3.24.3
Accumulated Other Comprehensive Income (Schedule of Changes in Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Jun. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Accumulated Other Comprehensive Income (Loss) [Line Items]          
Other Comprehensive Income (Loss), Net of Tax, Total $ (1,084) $ (920) $ (997) $ 2,281  
Reclassification out of Accumulated Other Comprehensive Income [Member]          
Accumulated Other Comprehensive Income (Loss) [Line Items]          
Loss on pension settlement pre Tax   886     $ 963
Loss on pension settlement After Tax   886     963
Unrealized {loss} gain on foreign currency derivatives (1,123)     (2,390)  
Unrealized gain (loss) on foreign currency derivatives, after Tax (1,123) (34)   (2,390) (34)
Unrealized gain on foreign currency derivatives, before Tax   34     34
Other Comprehensive Income (Loss), before Tax, Total (1,084) 920   (2,281) 997
Other Comprehensive Income (Loss), Net of Tax, Total (1,084) 920   (2,281) 997
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Attributable to Parent [Member] | Pension Benefits [Member]          
Accumulated Other Comprehensive Income (Loss) [Line Items]          
Loss on pension settlement pre Tax   313     313
Loss on pension settlement After Tax   313     313
Pre-Tax 39 573   109 650
After-Tax $ 39 $ 573   $ 109 $ 650
v3.24.3
Accumulated Other Comprehensive Income (Components of Accumulated Other Comprehensive Income) (Details) - USD ($)
$ in Thousands
 9 Months Ended 12 Months Ended
Sep. 30, 2024
Dec. 31, 2023
Jun. 30, 2024
Sep. 30, 2023
Jun. 30, 2023
Dec. 31, 2022
Accumulated Other Comprehensive Income (Loss) [Line Items]            
Unrecognized pension income, net of tax $ (156,317) $ (46,206) $ (48,829) $ (44,269) $ (48,954) $ (28,584)
Accumulated Defined Benefit Plans Adjustment Including Portion Attributable to Noncontrolling Interest [Member]            
Accumulated Other Comprehensive Income (Loss) [Line Items]            
Unrecognized pension income, net of tax 1,868 1,759        
Unrealized loss on foreign currency derivatives (1,784) 606        
Accumulated Other Comprehensive Income $ 84 $ 2,365        
v3.24.3
Accumulated Other Comprehensive Income (Components of Accumulated Other Comprehensive Income) (Parenthetical) (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Pension Benefits [Member] | Accumulated Defined Benefit Plans Adjustment Including Portion Attributable to Noncontrolling Interest [Member]    
Accumulated Other Comprehensive Income (Loss) [Line Items]    
Accumulated other comprehensive loss, tax $ 6,282 $ 6,282
v3.24.3
Stock-Based Compensation (Narrative) (Details) - USD ($)
$ in Thousands
 1 Months Ended 3 Months Ended 9 Months Ended
Jun. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]          
Stock-based compensation recognized   $ 804 $ 715 $ 2,330 $ 524
Inducement Options [Member]          
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]          
Unearned compensation related to options   172   $ 172  
Remaining service period       21 months  
Inducement Options [Member] | The Freightcar America Inc [Member]          
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]          
Granted 300,000        
Restricted Stock [Member]          
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]          
Unearned compensation related to options   2,064   $ 2,064  
Remaining requisite service period       21 months  
Time-Vested Stock Options [Member]          
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]          
Unearned compensation related to options   1,751   $ 1,751  
Remaining service period       23 months  
Cash Settled Stock [Member]          
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]          
Unearned compensation   $ 0   $ 0  
v3.24.3
Employee Benefit Plans (Narrative) (Details) - Pension Benefits [Member] - USD ($)
$ in Thousands
Sep. 30, 2024
Sep. 30, 2023
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]    
Contributions to pension plan $ 0 $ 0
Expected total contributions for current fiscal year $ 0  
v3.24.3
Employee Benefit Plans (Components of Net Periodic Benefit Cost) (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]        
Interest cost $ 130 $ 151 $ 399 $ 453
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Interest Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] Comprehensive Income (Loss), Net of Tax, Attributable to Parent Comprehensive Income (Loss), Net of Tax, Attributable to Parent Comprehensive Income (Loss), Net of Tax, Attributable to Parent Comprehensive Income (Loss), Net of Tax, Attributable to Parent
Expected return on plan assets $ (70) $ (83) $ (220) $ (250)
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Expected Return (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] Comprehensive Income (Loss), Net of Tax, Attributable to Parent Comprehensive Income (Loss), Net of Tax, Attributable to Parent Comprehensive Income (Loss), Net of Tax, Attributable to Parent Comprehensive Income (Loss), Net of Tax, Attributable to Parent
Amortization of unrecognized net income $ 39 $ 38 $ 109 $ 115
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Amortization of Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] Comprehensive Income (Loss), Net of Tax, Attributable to Parent Comprehensive Income (Loss), Net of Tax, Attributable to Parent Comprehensive Income (Loss), Net of Tax, Attributable to Parent Comprehensive Income (Loss), Net of Tax, Attributable to Parent
Loss on pension settlement $ 0 $ 313 $ 0 $ 313
Total net periodic benefit cost $ 99 $ 419 $ 288 $ 631
v3.24.3
Derivatives (Additional Information) (Details)
 9 Months Ended
Sep. 30, 2024
Foreign Currency [Abstract]  
Description Of Contract The contracts have terms between one and 12 months and require the Company to exchange currencies at agreed-upon rates at each settlement date.
v3.24.3
Derivatives - Schedule of Notional Amounts of Outstanding Foreign Currency Derivatives (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Derivative Instruments Designated as Hedges [Member]    
Foreign Currency Fair Value Hedge Derivative [Line Items]    
Notional Amount $ 25,281 $ 11,562
v3.24.3
Derivatives - Schedule of Fair Value of Outstanding Foreign Currency Derivatives Designated as Hedges (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Other current liabilities:    
Foreign Currency Fair Value Hedge Derivative [Line Items]    
Fair Value $ 1,784 $ 0
Prepaid expenses:    
Foreign Currency Fair Value Hedge Derivative [Line Items]    
Fair Value $ 0 $ 606
v3.24.3
Derivatives - Schedule of Pre-tax Realized Gain on Foreign Currency Derivatives (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Foreign Currency Fair Value Hedge Derivative [Line Items]        
Unrealized Loss/(Gain) on foreign currency derivatives, before Tax $ (1,123) $ 34 $ (2,390) $ 34
Gain (Loss) on Derivative Instruments [Member]        
Foreign Currency Fair Value Hedge Derivative [Line Items]        
Unrealized Loss/(Gain) on foreign currency derivatives, before Tax $ 72 $ (8) $ (449) $ (8)
v3.24.3
Loss Per Share (Weighted Average Common Shares Outstanding) (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Earnings Per Share [Abstract]        
Net loss $ (107,046) $ 3,193 $ (110,440) $ (20,733)
Accretion of financing fees (144) (146) (431) (203)
Accrued dividends on Series C Preferred Stock (4,676) (3,923) (13,340) (5,535)
Net loss available to common stockholders - basic (111,866) (876) (124,211) (26,471)
Net loss available to common stockholders - diluted $ (111,866) $ (876) $ (124,211) $ (26,471)
Weighted average common shares outstanding 17,633,629 17,044,251 17,433,479 16,937,968
Issuance of Warrants 13,720,368 12,499,712 13,086,066 11,126,442
Weighted average common shares outstanding - basic 31,353,997 29,543,963 30,519,545 28,064,410
Weighted average common shares outstanding - diluted 31,353,997 29,543,963 30,519,545 28,064,410
v3.24.3
Loss Per Share (Narrative) (Details) - shares
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Earnings Per Share [Abstract]        
Anti-dilutive common shares excluded from computation of earnings per share amount 2,058,180 6,222,085 3,119,672 5,996,646
v3.24.3
Restructuring and Impairment Charges (Narrative) (Details)
$ in Thousands
 9 Months Ended
Sep. 30, 2023
USD ($)
Restructuring Cost and Reserve [Line Items]  
Restructuring and impairment charges $ 622
v3.24.3
Related Parties (Narrative) (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Related Party Transaction [Line Items]          
Related party asset $ 936   $ 936   $ 638
Related party accounts payable 2,493   $ 2,493   2,478
Fasemex [Member]          
Related Party Transaction [Line Items]          
Percentage of common stock outstanding     10.30%    
Gil Family [Member]          
Related Party Transaction [Line Items]          
Operating costs and expenses 6,058 $ 3,909 $ 20,711 $ 13,675  
Related party asset         517
Other assets 682   682    
Related party accounts payable 2,493   $ 2,493   2,478
Commercial Specialty Truck Holdings Csth [Member]          
Related Party Transaction [Line Items]          
Percentage of common stock outstanding     5.00%    
Specialty parts supplies 268 $ 0 $ 683 $ 0  
Related party asset $ 254   $ 254   $ 121
v3.24.3
Income Taxes (Additional Information) (Details)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Income Tax [Line Items]        
Effective income tax rate (3.30%) 6.30% (3.10%) (4.50%)
Statutory tax rate     21.00%  
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