FreightCar America, Inc. has reported consolidated revenues of $126.2 million for the second quarter ending June 30, 2016, compared to revenues of $235.6 million in the 2015 second quarter. The company reported a net loss of $0.5 million, or $(0.04) per diluted share, for the quarter compared to a net income of $7.4 million, or $0.60 per diluted share, in last year’s second quarter.
“The second quarter results did not meet our expectations,” stated Joe McNeely, FreightCar America’s president and CEO. “Second quarter results reflected lower deliveries and higher costs due to a number of production-related matters, including the introduction of new car types. We are aggressively addressing all production issues and looking to significantly reduce our operating costs as we enter an increasingly competitive environment.”
Second quarter 2016 railcar deliveries totaled 1,372, all of which were new railcars, compared to last year’s second quarter deliveries of 2,611 railcars, which included 1,861 new and 750 rebuilt cars. As of June 30, 2016, the company has a diversified backlog totaling 6,207 railcars valued at $612 million. Consolidated operating loss for the second quarter of 2016 was $0.6 million, compared to operating income of $10.9 million in the second quarter of 2015.
“Our backlog remains solid, totaling 6,207 railcars at June 30, 2016, with full year 2016 deliveries now expected to be between 5,600 and 6,100 railcars.” added McNeely.
FreightCar America expects to reduce its annual operating costs by approximately $5 million over the next 12 months by implementing the following: 15 percent reduction of salaried workforce; closure of the Johnstown administrative office; and reduction of certain discretionary spending. These actions are currently underway and are expected to be completed by the middle of 2017.
Total estimated costs relating to this program are approximately $4 million, with the company expected to incur approximately $1.5 million of these costs in the third quarter of 2016 and approximately $0.8 million of these costs in the fourth quarter of 2016.
“We plan to manage our cost structure to align it with the evolving business environment,” concluded McNeely. “We do not make these decisions lightly. These decisions are difficult but necessary to better position us to deliver solid results and maintain our financial strength.”