##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Quarterly Period Ended March 31, 2009
 or
 o
    
    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
(State or other jurisdiction of incorporation or organization)
    
    25-1837219
(I.R.S. Employer Identification No.)
 Two North Riverside Plaza, Suite 1250
Chicago, Illinois
(Address of principal executive offices)
    
    60606
(Zip Code)
 (800) 458-2235
(Registrants telephone number, including area code)
 þ o
 o o
  Large accelerated filer oAccelerated filer þNon-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company o o þ




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##### 



FREIGHTCAR AMERICA, INC.
 INDEX TO FORM 10-Q
 Item
    
    
    
    PageNumber
    
    
    
    NumberPART I  FINANCIAL INFORMATION1.
    
    Financial Statements:Condensed Consolidated Balance Sheets (Unaudited) as of
March 31, 2009 and December 31, 2008
    
    
    3Condensed Consolidated Statements of Operations (Unaudited) for the
Three Months Ended March 31, 2009 and 2008
    
    
    4Condensed Consolidated Statements of Cash Flows (Unaudited) for the
Three Months Ended March 31, 2009 and 2008
    
    
    5Notes to Condensed Consolidated Financial Statements (Unaudited)
    
    
    62.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    133.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    194.
    
    Controls and Procedures
    
    
    19PART II  OTHER INFORMATION1.
    
    Legal Proceedings
    
    
    191A.
    
    Risk Factors
    
    
    202.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    203.
    
    Defaults Upon Senior Securities
    
    
    204.
    
    Submission of Matters to a Vote of Security Holders
    
    
    205.
    
    Other Information
    
    
    206.
    
    Exhibits
    
    
    20Signatures
    
    
    21EX-31.1EX-31.2EX-32
  2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements.
 
 FreightCar America, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
 March 31,
    
    
    December 31,2009
    
    
    2008(In thousands)AssetsCurrent assetsCash and cash equivalents
    
    $
    91,265
    
    
    $
    129,192Restricted cash
    
    
    4,238
    
    
    
    Accounts receivable, net of allowance for
doubtful accounts of $473 and $330,
respectively
    
    
    18,383
    
    
    
    73,120Inventories
    
    
    43,575
    
    
    
    31,644Leased railcars held for sale
    
    
    48,193
    
    
    
    11,703Other current assets
    
    
    16,835
    
    
    
    11,088Deferred income taxes
    
    
    13,230
    
    
    
    16,636Total current assets
    
    
    235,719
    
    
    
    273,383Property, plant and equipment, net
    
    
    30,415
    
    
    
    30,582Railcars on operating leases
    
    
    45,764
    
    
    
    34,971Goodwill
    
    
    21,521
    
    
    
    21,521Deferred income taxes
    
    
    19,072
    
    
    
    23,213Other long-term assets
    
    
    5,272
    
    
    
    5,484Total assets
    
    $
    357,763
    
    
    $
    389,154Liabilities and Stockholders EquityCurrent liabilitiesAccounts payable
    
    $
    42,021
    
    
    $
    60,986Accrued payroll and employee benefits
    
    
    3,769
    
    
    
    9,530Accrued postretirement benefits
    
    
    5,364
    
    
    
    5,364Accrued warranty
    
    
    10,870
    
    
    
    11,476Customer deposits
    
    
    7,382
    
    
    
    7,367Other current liabilities
    
    
    574
    
    
    
    7,939Total current liabilities
    
    
    69,980
    
    
    
    102,662Accrued pension costs
    
    
    27,151
    
    
    
    26,763Accrued postretirement benefits, less current portion
    
    
    55,065
    
    
    
    55,293Other long-term liabilities
    
    
    6,202
    
    
    
    7,407Total liabilities
    
    
    158,398
    
    
    
    192,125Stockholders equityPreferred 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 March 31, 2009 and December 31, 2008
    
    
    
    
    
    
    Common stock, $0.01 par value; 50,000,000
shares authorized, 12,731,678 shares issued
at March 31, 2009 and December 31, 2008
    
    
    127
    
    
    
    127Additional paid in capital
    
    
    98,078
    
    
    
    98,253Treasury stock, at cost; 811,182 and 821,182
shares at March 31, 2009 and December 31,
2008, respectively
    
    
    (38,397
    )
    
    
    (38,871
    )Accumulated other comprehensive loss
    
    
    (16,302
    )
    
    
    (16,471
    )Retained earnings
    
    
    155,769
    
    
    
    153,890Total FreightCar America stockholders equity
    
    
    199,275
    
    
    
    196,928Noncontrolling interest in India JV
    
    
    90
    
    
    
    101Total stockholders equity
    
    
    199,365
    
    
    
    197,029Total liabilities and stockholders equity
    
    $
    357,763
    
    
    $
    389,154
 See Notes to Condensed Consolidated Financial Statements.
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FreightCar America, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
 Three Months EndedMarch 31,2009
    
    
    2008(In thousands, except share and per share data)Revenues
    
    $
    39,563
    
    
    $
    95,098Cost of sales
    
    
    29,025
    
    
    
    85,815Gross profit
    
    
    10,538
    
    
    
    9,283Selling, general and administrative expense (including non-cash stock-based
compensation expense of $538 and $964, respectively)
    
    
    7,322
    
    
    
    8,586Plant closure (income) charges
    
    
    (379
    )
    
    
    18,263Operating income (loss)
    
    
    3,595
    
    
    
    (17,566
    )Interest (expense) income, net
    
    
    (162
    )
    
    
    1,242Operating income (loss) before income taxes
    
    
    3,433
    
    
    
    (16,324
    )Income tax provision (benefit)
    
    
    849
    
    
    
    (6,108
    )Net income (loss)
    
    
    2,584
    
    
    
    (10,216
    )Less: Net income (loss) attributable to noncontrolling interest in India JV.
    
    
    (11
    )
    
    
    Net income (loss) attributable to FreightCar America
    
    $
    2,595
    
    
    $
    (10,216
    )Net income (loss) per common share attributable to FreightCar America  basic
    
    $
    0.22
    
    
    $
    (0.87
    )Net income (loss) per common share attributable to FreightCar America diluted
    
    $
    0.22
    
    
    $
    (0.87
    )Weighted average common shares outstanding  basic
    
    
    11,849,768
    
    
    
    11,739,799Weighted average common shares outstanding  diluted
    
    
    11,852,480
    
    
    
    11,739,799Dividends declared per common share
    
    $
    0.06
    
    
    $
    0.12
 See Notes to Condensed Consolidated Financial Statements.
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FreightCar America, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
 Three Months EndedMarch 31,2009
    
    
    2008(In thousands)Cash flows from operating activitiesNet income (loss) attributable to FreightCar America
    
    $
    2,595
    
    
    $
    (10,216
    )Adjustments to reconcile net (loss) income to net cash flows used in operating activities

Plant closure (income) charges
    
    
    (379
    )
    
    
    18,263Depreciation and amortization
    
    
    1,186
    
    
    
    993Other non-cash items
    
    
    130
    
    
    
    (507
    )Deferred income taxes
    
    
    7,445
    
    
    
    (2,085
    )Compensation expense under stock option and restricted share award agreements
    
    
    538
    
    
    
    964Noncontrolling interest in India JV
    
    
    (11
    )
    
    
    Changes in operating assets and liabilities:Accounts receivable
    
    
    54,737
    
    
    
    6,773Inventories
    
    
    (11,995
    )
    
    
    (33,599
    )Leased railcars held for sale
    
    
    (36,490
    )
    
    
    (7,723
    )Other current assets
    
    
    (327
    )
    
    
    15Accounts payable
    
    
    (18,216
    )
    
    
    20,635Accrued payroll and employee benefits
    
    
    (5,558
    )
    
    
    (3,665
    )Income taxes receivable/payable
    
    
    (6,494
    )
    
    
    (4,184
    )Accrued warranty
    
    
    (606
    )
    
    
    (378
    )Other current liabilities and customer deposits
    
    
    (7,333
    )
    
    
    (18,715
    )Deferred revenue, non-current
    
    
    (270
    )
    
    
    Accrued pension costs and accrued postretirement benefits
    
    
    329
    
    
    
    267Net cash flows used in operating activities
    
    
    (20,719
    )
    
    
    (33,162
    )Cash flows from investing activitiesRestricted cash deposits
    
    
    (4,238
    )
    
    
    Cost of railcars on operating leases produced or acquired
    
    
    (11,018
    )
    
    
    Purchases of property, plant and equipment
    
    
    (1,220
    )
    
    
    (1,406
    )Net cash flows used in investing activities
    
    
    (16,476
    )
    
    
    (1,406
    )Cash flows from financing activitiesPayments on long-term debt
    
    
    (17
    )
    
    
    (16
    )Cash dividends paid to stockholders
    
    
    (715
    )
    
    
    (711
    )Net cash flows used in financing activities
    
    
    (732
    )
    
    
    (727
    )Net decrease in cash and cash equivalents
    
    
    (37,927
    )
    
    
    (35,295
    )Cash and cash equivalents at beginning of period
    
    
    129,192
    
    
    
    197,042Cash and cash equivalents at end of period
    
    $
    91,265
    
    
    $
    161,747Supplemental cash flow information:Income taxes paid
    
    $
    
    
    
    $
    105
 See Notes to Condensed Consolidated Financial Statements.
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FreightCar America, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)  (In thousands, except share and per share data)
 Note 1  Description of the Business
  Note 2  Basis of Presentation
  Note 3  Recent Accounting Pronouncements
 Fair Value Measurements
 Business Combinations,
 Employers Disclosures
about Postretirement Benefit Plan Assets
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Noncontrolling
Interests in Consolidated Financial Statements: An amendment of ARB No. 51
 Note 4  Plant Closure
     March 31,
    
    March 31,2009
    
    2008Pension plan curtailment loss and special termination benefit costs
    
    $
    
    
    
    $
    4,527Postretirement plan curtailment loss and contractual benefit charges
    
    
    
    
    
    
    4,105Employee termination benefits
    
    
    (176
    )
    
    
    9,631Insurance recoveries and other related costs
    
    
    (203
    )
    
    
    Total plant closure (income) charges
    
    $
    (379
    )
    
    $
    18,263
 Note 5  Inventories
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March 31,
    
    
    December 31,2009
    
    
    2008Work in progress
    
    $
    38,278
    
    
    $
    24,166Finished new railcars
    
    
    3,015
    
    
    
    5,513Used railcars acquired upon trade-in
    
    
    2,282
    
    
    
    1,965Total inventories
    
    $
    43,575
    
    
    $
    31,644
 Note 6 Leased Railcars
      Nine months ending December 31, 2009
    
    $
    3,671Year ending December 31, 2010
    
    
    4,588Year ending December 31, 2011
    
    
    3,592Year ending December 31, 2012
    
    
    1,349Thereafter
    
    
    2,308$
    15,508
 Note 7  Property, Plant and Equipment
  March 31,
    
    
    December 31,2009
    
    
    2008Buildings and improvements
    
    $
    21,053
    
    
    $
    20,918Machinery and equipment
    
    
    45,179
    
    
    
    42,352Cost of buildings, improvements, machinery and equipment
    
    
    66,232
    
    
    
    63,270Less: Accumulated depreciation and amortization
    
    
    (39,742
    )
    
    
    (38,996
    )Buildings, improvements, machinery and equipment, net
of accumulated depreciation and amortization
    
    
    26,490
    
    
    
    24,274Land
    
    
    701
    
    
    
    701Construction in process
    
    
    3,224
    
    
    
    5,607Total property, plant and equipment, net
    
    $
    30,415
    
    
    $
    30,582
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Note 8  Goodwill and Intangible Assets
 Goodwill and Other
Intangible Assets
  March 31,
    
    
    December 31,2009
    
    
    2008Patents
    
    $
    13,097
    
    
    $
    13,097Accumulated amortization
    
    
    (8,753
    )
    
    
    (8,604
    )Patents, net of accumulated amortization
    
    
    4,344
    
    
    
    4,493Goodwill
    
    
    21,521
    
    
    
    21,521Total goodwill and intangible assets
    
    $
    25,865
    
    
    $
    26,014
 
 Note 9  Product Warranties
  Three Months EndedMarch 31,2009
    
    
    2008Balance at the beginning of the period
    
    $
    11,476
    
    
    $
    10,551Provision for warranties issued during the period
    
    
    110
    
    
    
    498Reductions for payments, cost of repairs and other
    
    
    (716
    )
    
    
    (876
    )Balance at the end of the period
    
    $
    10,870
    
    
    $
    10,173
 Note 10  Revolving Credit Facilities
   9




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JAIX Revolving Credit Facility
   Note 11  Stock-Based Compensation
   Note 12  Comprehensive Income
   10




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Three Months EndedMarch 31,2009
    
    
    2008Net operating income (loss)
    
    $
    2,595
    
    
    $
    (10,216
    )Other comprehensive income:Amortization of prior service costs and
actuarial losses, net of tax
    
    
    169
    
    
    
    166Total comprehensive income (loss)
    
    $
    2,764
    
    
    $
    (10,050
    )
 Note 13  Employee Benefit Plans
    Three Months EndedMarch 31,Pension Benefits
    
    2009
    
    
    2008Service cost
    
    $
    150
    
    
    $
    282Interest cost
    
    
    976
    
    
    
    842Plant closure cost
    
    
    
    
    
    
    4,527Expected return on plan assets
    
    
    (737
    )
    
    
    (939
    )Amortization of prior service cost
    
    
    26
    
    
    
    Amortization of unrecognized net loss
    
    
    188
    
    
    
    7$
    603
    
    
    $
    4,719
 Three Months EndedMarch 31,Postretirement Benefit Plan
    
    2009
    
    
    2008Service cost
    
    $
    12
    
    
    $
    17Interest cost
    
    
    993
    
    
    
    808Plant closure cost
    
    
    
    
    
    
    4,105Amortization of prior service cost
    
    
    56
    
    
    
    56Amortization of unrecognized net loss
    
    
    
    
    
    
    41$
    1,061
    
    
    $
    5,027
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Note 14  Contingencies
   Accounting for Contingencies
 Note 15  Earnings Per Share
  Three Months EndedMarch 31,2009
    
    
    2008Weighted average common shares outstanding
    
    
    11,849,768
    
    
    
    11,739,799Dilutive effect of employee stock options and
nonvested share awards
    
    
    2,712
    
    
    
    Weighted average diluted common shares outstanding
    
    
    11,852,480
    
    
    
    11,739,799
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Note 16 Sales Contract Termination Revenue
  Note 17 Restricted Cash
  
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations.
 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.
      13




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RESULTS OF OPERATIONS
 Three Months Ended March 31, 2009 compared to Three Months Ended March 31, 2008
 Revenues
  Gross Profit
  Selling, General and Administrative Expenses
  Plant Closure Charges
  Interest Income
  Income Taxes
  14




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Net Income or Loss
  LIQUIDITY AND CAPITAL RESOURCES
        15




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Contractual Obligations
  Payments Due by Period2-3
    
    
    4-5
    
    
    AfterContractual Obligations
    
    Total
    
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    5 Years(In thousands)Capital leases from long-term debt
    
    $
    11
    
    
    $
    11
    
    
    $
    
    
    
    $
    
    
    
    $
    Operating leases
    
    
    14,329
    
    
    
    2,125
    
    
    
    4,658
    
    
    
    4,706
    
    
    
    2,840Material and component purchases
    
    
    144,820
    
    
    
    36,513
    
    
    
    62,313
    
    
    
    45,994
    
    
    
    Total
    
    $
    159,160
    
    
    $
    38,649
    
    
    $
    66,971
    
    
    $
    50,700
    
    
    $
    2,840
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Cash Flows
  Three Months EndedMarch 31,2009
    
    
    2008(In thousands)Net cash used in:Operating activities
    
    $
    (20,719
    )
    
    $
    (33,162
    )Investing activities
    
    
    (16,476
    )
    
    
    (1,406
    )Financing activities
    
    
    (732
    )
    
    
    (727
    )Total
    
    $
    (37,927
    )
    
    $
    (35,295
    )
 Operating Activities.
  Investing Activities.
 Financing Activities.
 Capital Expenditures
  17




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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
   
    
    the cyclical nature of our business;
    
    adverse economic and market conditions;
    
    fluctuating costs of raw materials, including steel and aluminum, and 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
acceptance of customer orders;
    
    the highly competitive nature of our industry;
    
    risks relating to our relationship with our unionized employees and their unions;
    
    our ability to manage our health care and pension costs;
    
    our reliance on the sales of our aluminum-bodied coal-carrying railcars;
    
    shortages of skilled labor;
    
    the risk of lack of acceptance of our new railcar offerings by our customers;
    
    the cost of complying with environmental laws and regulations;
    
    the costs associated with being a public company;
    
    potential significant warranty claims; and
    
    various covenants in the agreement governing our indebtedness that limit our managements
discretion in the operation of our businesses.
  18




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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
     
 Item 4. Controls and Procedures.
 Evaluation of Disclosure Controls and Procedures
  Changes In Internal Controls
  
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  19




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Item 1A. Risk Factors.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  
 Item 3. Defaults Upon Senior Securities.
  
 Item 4. Submission of Matters to a Vote of Security Holders.
  
 Item 5. Other Information.
  
 Item 6. Exhibits.
 (a)
    
    Exhibits filed as part of this Form 10-Q:
 31.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.32
    
    Certification of Chief Executive Officer and Chief Financial Officer
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 20




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SIGNATURES
  FREIGHTCAR AMERICA, INC.Date: May 11, 2009
    By:

/s/ Christian RagotChristian Ragot, President andChief Executive OfficerBy:

/s/ Christopher L. NagelChristopher L. Nagel, Vice President, Finance andChief Financial Officer 21




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EXHIBIT INDEX
 ExhibitNumber
    
    Description31.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32
    
    Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
 22