##### 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 June 30, 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
    
    25-1837219(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)Two North Riverside Plaza, Suite 1250Chicago, Illinois
    
    60606(Address of principal executive offices)
    
    (Zip Code)
 (800) 458-2235
(Registrants telephone number, including area code)
 o þ
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-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 as of
June 30, 2009 (Unaudited) and December 31, 2008
    
    
    3Condensed Consolidated Statements of Operations (Unaudited) for the
Three and Six Months Ended June 30, 2009 and 2008 (as restated)
    
    
    4Condensed Consolidated Statements of Stockholders Equity (Unaudited)
for the Six Months Ended June 30, 2009 and 2008 (as restated)
    
    
    5Condensed Consolidated Statements of Cash Flows (Unaudited) for the
Six Months Ended June 30, 2009 and 2008 (as restated)
    
    
    6Notes to Condensed Consolidated Financial Statements (Unaudited)
    
    
    72. Managements Discussion and Analysis of Financial Condition and Results
of Operations
    
    
    183. Quantitative and Qualitative Disclosures About Market Risk
    
    
    264. Controls and Procedures
    
    
    26PART II  OTHER INFORMATION1. Legal Proceedings
    
    
    291A. Risk Factors
    
    
    292. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    293. Defaults Upon Senior Securities
    
    
    294. Submission of Matters to a Vote of Security Holders
    
    
    295. Other Information
    
    
    296. Exhibits
    
    
    30Signatures
    
    
    31EX-10.1EX-23EX-31.1EX-31.2EX-32
  2




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##### Table of Contents



Item 1.     Financial Statements.
 FreightCar America, Inc.
 
 Condensed Consolidated Balance Sheets
 (Unaudited)
 December 31,June 30,
    
    
    20082009
    
    
    (as restated)(In thousands)AssetsCurrent assetsCash and cash equivalents
    
    $
    152,351
    
    
    $
    129,192Accounts receivable, net of allowance for
doubtful accounts of $193 and $330,
respectively
    
    
    6,139
    
    
    
    73,120Inventories
    
    
    40,598
    
    
    
    31,096Leased railcars held for sale
    
    
    28,088
    
    
    
    11,490Property, plant and equipment held for sale
    
    
    2,461
    
    
    
    Other current assets
    
    
    2,963
    
    
    
    6,789Deferred income taxes, net
    
    
    12,695
    
    
    
    16,003Total current assets
    
    
    245,295
    
    
    
    267,690Property, plant and equipment, net
    
    
    28,223
    
    
    
    30,582Railcars on operating leases
    
    
    43,013
    
    
    
    34,735Goodwill
    
    
    21,521
    
    
    
    21,521Deferred income taxes, net
    
    
    19,335
    
    
    
    23,281Other long-term assets
    
    
    5,059
    
    
    
    5,484Total assets
    
    $
    362,446
    
    
    $
    383,293Liabilities and Stockholders EquityCurrent liabilitiesAccounts payable
    
    $
    28,892
    
    
    $
    47,328Accrued payroll and employee benefits
    
    
    4,339
    
    
    
    9,530Accrued postretirement benefits
    
    
    5,364
    
    
    
    5,364Accrued warranty
    
    
    10,768
    
    
    
    11,476Customer deposits
    
    
    2,365
    
    
    
    7,367Other current liabilities
    
    
    8,714
    
    
    
    7,939Total current liabilities
    
    
    60,442
    
    
    
    89,004Accrued pension costs
    
    
    27,540
    
    
    
    26,763Accrued postretirement benefits, less current portion
    
    
    54,397
    
    
    
    55,293Other long-term liabilities
    
    
    6,234
    
    
    
    7,407Total liabilities
    
    
    148,613
    
    
    
    178,467Stockholders 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 June 30, 2009 and December 31, 2008
    
    
    
    
    
    
    Common stock, $0.01 par value; 50,000,000
shares authorized, 12,731,678 shares issued
at June 30, 2009 and December 31, 2008
    
    
    127
    
    
    
    127Additional paid in capital
    
    
    97,112
    
    
    
    98,253Treasury stock, at cost; 781,593 and 821,182
shares at June 30, 2009 and December 31,
2008, respectively
    
    
    (36,997
    )
    
    
    (38,871
    )Accumulated other comprehensive loss
    
    
    (16,134
    )
    
    
    (16,471
    )Retained earnings
    
    
    169,672
    
    
    
    161,687Total FreightCar America stockholders equity
    
    
    213,780
    
    
    
    204,725Noncontrolling interest in India JV
    
    
    53
    
    
    
    101Total stockholders equity
    
    
    213,833
    
    
    
    204,826Total liabilities and stockholders equity
    
    $
    362,446
    
    
    $
    383,293
 See Notes to Condensed Consolidated Financial Statements.
 3




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##### Table of Contents



FreightCar America, Inc.
 
 Condensed Consolidated Statements of Operations
 (Unaudited)
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    
    
    
    
    20082009
    
    
    (as restated)
    
    
    2009
    
    
    (as restated)(In thousands, except share and per share data)Revenues
    
    $
    104,328
    
    
    $
    141,335
    
    
    $
    143,891
    
    
    $
    236,433Cost of sales
    
    
    88,345
    
    
    
    133,939
    
    
    
    117,613
    
    
    
    219,815Gross profit
    
    
    15,983
    
    
    
    7,396
    
    
    
    26,278
    
    
    
    16,618Selling, general and administrative expense (including
non-cash stock-based compensation expense of $553, $729,
$1,091 and $1,692, respectively)
    
    
    6,713
    
    
    
    7,283
    
    
    
    14,035
    
    
    
    15,869Plant closure (income) charges
    
    
    (116
    )
    
    
    1,602
    
    
    
    (495
    )
    
    
    19,865Operating income (loss)
    
    
    9,386
    
    
    
    (1,489
    )
    
    
    12,738
    
    
    
    (19,116
    )Interest (expense) income, net
    
    
    (133
    )
    
    
    649
    
    
    
    (295
    )
    
    
    1,892Operating income (loss) before income taxes
    
    
    9,253
    
    
    
    (840
    )
    
    
    12,443
    
    
    
    (17,224
    )Income tax provision (benefit)
    
    
    2,268
    
    
    
    (472
    )
    
    
    3,072
    
    
    
    (6,602
    )Net income (loss)
    
    
    6,985
    
    
    
    (368
    )
    
    
    9,371
    
    
    
    (10,622
    )Less: Net loss attributable to non-controlling
interest in India JV
    
    
    (37
    )
    
    
    
    
    
    
    (48
    )
    
    
    Net income (loss) attributable to FreightCar America
    
    $
    7,022
    
    
    $
    (368
    )
    
    $
    9,419
    
    
    $
    (10,622
    )Net income (loss) per common share attributable to
FreightCar America  basic
    
    $
    0.59
    
    
    $
    (0.03
    )
    
    $
    0.79
    
    
    $
    (0.90
    )Net income (loss) per common share attributable to
FreightCar America  diluted
    
    $
    0.59
    
    
    $
    (0.03
    )
    
    $
    0.79
    
    
    $
    (0.90
    )Weighted average common shares outstanding  basic
    
    
    11,860,809
    
    
    
    11,780,327
    
    
    
    11,855,319
    
    
    
    11,760,063Weighted average common shares outstanding 
diluted
    
    
    11,863,999
    
    
    
    11,780,327
    
    
    
    11,858,272
    
    
    
    11,760,063Dividends declared per common share
    
    $
    0.06
    
    
    $
    0.00
    
    
    $
    0.12
    
    
    $
    0.12
 See Notes to Condensed Consolidated Financial Statements.
 4




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##### Table of Contents



FreightCar America, Inc.
 
 CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (Unaudited)
 FreightCar America ShareholdersAccumulatedAdditional
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    TotalCommon Stock
    
    
    Paid In
    
    
    Treasury Stock
    
    
    Comprehensive
    
    
    Retained
    
    
    Noncontrolling
    
    
    StockholdersShares
    
    
    Amount
    
    
    Capital
    
    
    Shares
    
    
    Amount
    
    
    Loss
    
    
    Earnings
    
    
    Interest
    
    
    EquityBalance, December 31, 2007
(as restated)
    
    
    12,731,678
    
    
    $
    127
    
    
    $
    99,270
    
    
    
    (918,257
    )
    
    $
    (43,597
    )
    
    $
    (9,857
    )
    
    $
    153,120
    
    
    
    
    
    
    $
    199,063Net loss (as restated)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,622
    )
    
    
    
    
    
    
    (10,622
    )Pension liability activity, net
of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    63
    
    
    
    
    
    
    
    
    
    
    
    63Postretirement liability
activity, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    167
    
    
    
    
    
    
    
    
    
    
    
    167Comprehensive loss (as restated)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,392
    )Stock options exercised
    
    
    
    
    
    
    
    
    
    
    (939
    )
    
    
    32,981
    
    
    
    1,566
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    627Restricted stock awards
    
    
    
    
    
    
    
    
    
    
    (2,305
    )
    
    
    48,547
    
    
    
    2,305
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock-based compensation
recognized
    
    
    
    
    
    
    
    
    
    
    1,693
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,693Deficiency of tax benefit from
stock-based compensation
    
    
    
    
    
    
    
    
    
    
    (192
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (192
    )Cash dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,425
    )
    
    
    
    
    
    
    (1,425
    )Balance, June 30, 2008 (as
restated)
    
    
    12,731,678
    
    
    $
    127
    
    
    $
    97,527
    
    
    
    (836,729
    )
    
    $
    (39,726
    )
    
    $
    (9,627
    )
    
    $
    141,073
    
    
    
    
    
    
    $
    189,374Balance, December 31, 2008 (as
restated)
    
    
    12,731,678
    
    
    $
    127
    
    
    $
    98,253
    
    
    
    (821,182
    )
    
    $
    (38,871
    )
    
    $
    (16,471
    )
    
    $
    161,687
    
    
    $
    101
    
    
    $
    204,826Net income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,419
    
    
    
    (48
    )
    
    
    9,371Pension liability activity, net
of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    267
    
    
    
    
    
    
    
    
    
    
    
    267Postretirement liability
activity, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    70
    
    
    
    
    
    
    
    
    
    
    
    70Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,708Restricted stock awards
    
    
    
    
    
    
    
    
    
    
    (1,874
    )
    
    
    39,589
    
    
    
    1,874
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock-based compensation
recognized
    
    
    
    
    
    
    
    
    
    
    1,091
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,091Deficiency of tax benefit from
stock-based compensation
    
    
    
    
    
    
    
    
    
    
    (358
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (358
    )Cash dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,434
    )
    
    
    
    
    
    
    (1,434
    )Balance, June 30, 2009
    
    
    12,731,678
    
    
    $
    127
    
    
    $
    97,112
    
    
    
    (781,593
    )
    
    $
    (36,997
    )
    
    $
    (16,134
    )
    
    $
    169,672
    
    
    $
    53
    
    
    $
    213,833
 See Notes to Condensed Consolidated Financial Statements.
 5




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##### Table of Contents



FreightCar America, Inc.
 
 Condensed Consolidated Statements of Cash Flows
 (Unaudited)
 Six Months EndedJune 30,20082009
    
    
    (as restated)(In thousands)Cash flows from operating activitiesNet income (loss) attributable to FreightCar America
    
    $
    9,419
    
    
    $
    (10,622
    )Adjustments to reconcile net income (loss) to net cash flows used in
operating activitiesPlant closure (income) charges
    
    
    
    
    
    
    19,865Depreciation and amortization
    
    
    2,541
    
    
    
    1,992Other non-cash items
    
    
    292
    
    
    
    (547
    )Deferred income taxes
    
    
    7,049
    
    
    
    (8,720
    )Compensation expense under stock option and restricted share
award agreements
    
    
    1,091
    
    
    
    1,692Noncontrolling interest in India JV
    
    
    (48
    )
    
    
    Changes in operating assets and liabilities:Accounts receivable
    
    
    66,981
    
    
    
    6,262Inventories
    
    
    (9,658
    )
    
    
    (46,789
    )Leased railcars held for sale
    
    
    (16,598
    )
    
    
    (46,101
    )Other current assets
    
    
    48
    
    
    
    (6,184
    )Accounts payable
    
    
    (17,830
    )
    
    
    67,242Accrued payroll and employee benefits
    
    
    (5,191
    )
    
    
    (4,257
    )Income taxes receivable/payable
    
    
    3,824
    
    
    
    1,020Accrued warranty
    
    
    (708
    )
    
    
    365Other current liabilities and customer deposits
    
    
    (5,083
    )
    
    
    (17,898
    )Deferred revenue, non-current
    
    
    (488
    )
    
    
    Accrued pension costs and accrued postretirement benefits
    
    
    218
    
    
    
    440Net cash flows provided by (used in) operating activities
    
    
    35,859
    
    
    
    (42,240
    )Cash flows from investing activitiesCost of railcars on operating leases produced or acquired
    
    
    (8,802
    )
    
    
    Purchases of property, plant and equipment
    
    
    (2,431
    )
    
    
    (2,925
    )Net cash flows used in investing activities
    
    
    (11,233
    )
    
    
    (2,925
    )Cash flows from financing activitiesPayments on long-term debt
    
    
    (28
    )
    
    
    (32
    )Deferred financing costs paid
    
    
    (5
    )
    
    
    Issuance of common stock
    
    
    
    
    
    
    627Excess tax benefit from stock-based compensation
    
    
    
    
    
    
    (192
    )Cash dividends paid to stockholders
    
    
    (1,434
    )
    
    
    (1,425
    )Net cash flows used in financing activities
    
    
    (1,467
    )
    
    
    (1,022
    )Net increase (decrease) in cash and cash equivalents
    
    
    23,159
    
    
    
    (46,187
    )Cash and cash equivalents at beginning of period
    
    
    129,192
    
    
    
    197,042Cash and cash equivalents at end of period
    
    $
    152,351
    
    
    $
    150,855Supplemental cash flow information:Income taxes paid
    
    $
    175
    
    
    $
    1,276Income tax refunds received
    
    $
    (7,750
    )
    
    $
    
 See Notes to Condensed Consolidated Financial Statements.
 6




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##### Table of Contents



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,
 7




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##### Table of Contents



Employers Disclosures
about Postretirement Benefit Plan Assets
 Noncontrolling Interests
in Consolidated Financial Statements: An amendment of ARB No. 51
 Subsequent Events.
 Note 4  Plant Closure
     8




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##### Table of Contents



June 30,
    
    June 30,2009
    
    2008Pension plan curtailment loss and special termination benefit costs
    
    $
    
    
    
    $
    9,826Postretirement plan curtailment loss and contractual benefit charges
    
    
    
    
    
    
    8,889Employee termination benefits
    
    
    (166
    )
    
    
    (374
    )Insurance recoveries and other related costs
    
    
    (329
    )
    
    
    1,524Total plant closure (income) charges
    
    $
    (495
    )
    
    $
    19,865
 Note 5  Inventories
  June 30,
    
    
    December 31,2009
    
    
    2008Work in progress
    
    $
    34,932
    
    
    $
    23,618Finished new railcars
    
    
    2,184
    
    
    
    5,513Used railcars acquired upon trade-in
    
    
    3,482
    
    
    
    1,965Total inventories
    
    $
    40,598
    
    
    $
    31,096
 Note 6 Leased Railcars
      9




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##### Table of Contents



Six months ending December 31, 2009
    
    $
    2,637Year ending December 31, 2010
    
    
    5,029Year ending December 31, 2011
    
    
    3,800Year ending December 31, 2012
    
    
    1,349Thereafter
    
    
    2,308$
    15,123
 Note 7  Property, Plant and Equipment
  June 30,
    
    
    December 31,2009
    
    
    2008Buildings and improvements
    
    $
    19,056
    
    
    $
    20,918Machinery and equipment
    
    
    24,438
    
    
    
    42,352Cost of buildings, improvements, machinery and equipment
    
    
    43,494
    
    
    
    63,270Less: Accumulated depreciation and amortization
    
    
    (19,836
    )
    
    
    (38,996
    )Buildings, improvements, machinery and equipment, net
of accumulated depreciation and amortization
    
    
    23,658
    
    
    
    24,274Land
    
    
    151
    
    
    
    701Construction in process
    
    
    4,414
    
    
    
    5,607Total property, plant and equipment, net
    
    $
    28,223
    
    
    $
    30,582
  Note 8  Goodwill and Intangible Assets
 Goodwill and Other
Intangible Assets
  June 30,
    
    
    December 31,2009
    
    
    2008Patents
    
    $
    13,097
    
    
    $
    13,097Accumulated amortization
    
    
    (8,900
    )
    
    
    (8,604
    )Patents, net of accumulated amortization
    
    
    4,197
    
    
    
    4,493Goodwill
    
    
    21,521
    
    
    
    21,521Total goodwill and intangible assets
    
    $
    25,718
    
    
    $
    26,014
  10




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##### Table of Contents



Note 9  Product Warranties
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Balance at the beginning of the period
    
    $
    10,870
    
    
    $
    10,173
    
    
    $
    11,476
    
    
    $
    10,551Provision for warranties issued during the period
    
    
    358
    
    
    
    1,223
    
    
    
    468
    
    
    
    1,721Reductions for payments, cost of repairs and other
    
    
    (460
    )
    
    
    (480
    )
    
    
    (1,176
    )
    
    
    (1,356
    )Balance at the end of the period
    
    $
    10,768
    
    
    $
    10,916
    
    
    $
    10,768
    
    
    $
    10,916
 Note 10  Revolving Credit Facilities
    JAIX Revolving Credit Facility
  11




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##### Table of Contents



Note 11  Stock-Based Compensation
     12




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##### Table of Contents



Note 12  Comprehensive Income
   Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net operating income (loss)
    
    $
    7,022
    
    
    $
    (368
    )
    
    $
    9,419
    
    
    $
    (10,622
    )Other comprehensive income:Amortization of prior service
costs and actuarial losses, net
of tax
    
    
    169
    
    
    
    64
    
    
    
    337
    
    
    
    230Total comprehensive income (loss)
    
    $
    7,191
    
    
    $
    (304
    )
    
    $
    9,756
    
    
    $
    (10,392
    )
 Note 13  Employee Benefit Plans
    Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,Pension Benefits
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Service cost
    
    $
    150
    
    
    $
    282
    
    
    $
    300
    
    
    $
    564Interest cost
    
    
    976
    
    
    
    842
    
    
    
    1,952
    
    
    
    1,684Plant closure cost
    
    
    
    
    
    
    5,299
    
    
    
    
    
    
    
    9,826Expected return on plan assets
    
    
    (737
    )
    
    
    (940
    )
    
    
    (1,474
    )
    
    
    (1,879
    )Amortization of prior service cost
    
    
    26
    
    
    
    
    
    
    
    52
    
    
    
    Amortization of unrecognized net loss
    
    
    188
    
    
    
    7
    
    
    
    376
    
    
    
    14$
    603
    
    
    $
    5,490
    
    
    $
    1,206
    
    
    $
    10,209
 13




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##### Table of Contents



Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,Postretirement Benefit Plan
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Service cost
    
    $
    12
    
    
    $
    17
    
    
    $
    24
    
    
    $
    34Interest cost
    
    
    993
    
    
    
    808
    
    
    
    1,986
    
    
    
    1,616Plant closure cost
    
    
    
    
    
    
    4,784
    
    
    
    
    
    
    
    8,889Amortization of prior service cost
    
    
    56
    
    
    
    56
    
    
    
    112
    
    
    
    112Amortization of unrecognized net loss
    
    
    
    
    
    
    41
    
    
    
    
    
    
    
    81$
    1,061
    
    
    $
    5,706
    
    
    $
    2,122
    
    
    $
    10,732
    Note 14  Contingencies
   Accounting for Contingencies
 Note 15  Earnings Per Share
  14




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##### Table of Contents



Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2009
    
    2008
    
    2009
    
    2008Weighted average common shares outstanding
    
    
    11,860,809
    
    
    
    11,780,327
    
    
    
    11,855,319
    
    
    
    11,760,063Dilutive effect of employee stock options and
nonvested share awards
    
    
    3,190
    
    
    
    
    
    
    
    2,953
    
    
    
    Weighted average diluted common shares outstanding
    
    
    11,863,999
    
    
    
    11,780,327
    
    
    
    11,858,272
    
    
    
    11,760,063
  Note 16  Sales Contract Termination Revenue
  Note 17  Restatement of Condensed Consolidated Financial Statements
     15




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##### Table of Contents



Condensed Consolidated Statement of Operations
(in thousands, except share and per share data)
(Unaudited)
 Six Months Ended June 30, 2008As Previously
    
    
    Effect ofReported
    
    
    Restatement
    
    
    RestatedRevenues
    
    $
    236,433
    
    
    $
    
    
    
    $
    236,433Cost of sales
    
    
    220,521
    
    
    
    (706
    )
    
    
    219,815Gross profit
    
    
    15,912
    
    
    
    706
    
    
    
    16,618Selling, general and administrative expense (including non-cash stock-based
compensation expense of $1,692)
    
    
    15,869
    
    
    
    
    
    
    
    15,869Plant closure charges
    
    
    19,865
    
    
    
    
    
    
    
    19,865Operating loss
    
    
    (19,822
    )
    
    
    706
    
    
    
    (19,116
    )Interest income, net
    
    
    1,892
    
    
    
    
    
    
    
    1,892Operating loss before income taxes
    
    
    (17,930
    )
    
    
    706
    
    
    
    (17,224
    )Income tax benefit
    
    
    (6,829
    )
    
    
    227
    
    
    
    (6,602
    )Net (loss) income
    
    
    (11,101
    )
    
    
    479
    
    
    
    (10,622
    )Less: Net (loss) income attributable to noncontrolling interest in India JV
    
    
    
    
    
    
    
    
    
    
    Net (loss) income attributable to FreightCar America
    
    $
    (11,101
    )
    
    $
    479
    
    
    $
    (10,622
    )Net (loss) income per common share attributable to FreightCar America  basic
    
    $
    (0.94
    )
    
    $
    0.04
    
    
    $
    (0.90
    )Net (loss) income per common share attributable to FreightCar America  diluted
    
    $
    (0.94
    )
    
    $
    0.04
    
    
    $
    (0.90
    )Weighted average common shares outstandingbasic
    
    
    11,760,063
    
    
    
    
    
    
    
    11,760,063Weighted average common shares outstandingdiluted
    
    
    11,760,063
    
    
    
    
    
    
    
    11,760,063Dividends declared per common share
    
    $
    0.12
    
    
    
    
    
    
    $
    0.12
  16




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##### Table of Contents



Six Months Ended June 30, 2008As Previously
    
    
    Effect ofReported
    
    
    Restatement
    
    
    RestatedCash flows from operating activitiesNet (loss) income attributable to FreightCar America
    
    $
    (11,101
    )
    
    $
    479
    
    
    $
    (10,622
    )Adjustments to reconcile net (loss) income to net cash flows used in operating activitiesPlant closure charges
    
    
    19.865
    
    
    
    
    
    
    
    19.865Depreciation and amortization
    
    
    1,992
    
    
    
    
    
    
    
    1,992Other non-cash items
    
    
    (547
    )
    
    
    
    
    
    
    (547
    )Deferred income taxes
    
    
    (8,720
    )
    
    
    
    
    
    
    (8,720
    )Compensation expense under stock option and restricted share award agreements
    
    
    1,692
    
    
    
    
    
    
    
    1,692Changes in operating assets and liabilities:Accounts receivable
    
    
    6,262
    
    
    
    
    
    
    
    6,262Inventories
    
    
    (44,560
    )
    
    
    (2,229
    )
    
    
    (46,789
    )Leased railcars held for sale
    
    
    (46,380
    )
    
    
    279
    
    
    
    (46,101
    )Other current assets
    
    
    (6,184
    )
    
    
    
    
    
    
    (6,184
    )Accounts payable
    
    
    65,998
    
    
    
    1,244
    
    
    
    67,242Accrued payroll and employee benefits
    
    
    (4,257
    )
    
    
    
    
    
    
    (4,257
    )Income taxes receivable/payable
    
    
    793
    
    
    
    227
    
    
    
    1,020Accrued warranty
    
    
    365
    
    
    
    
    
    
    
    365Other current liabilities and customer deposits
    
    
    (17,898
    )
    
    
    
    
    
    
    (17,898
    )Accrued pension costs and accrued postretirement benefits
    
    
    440
    
    
    
    
    
    
    
    440Net cash flows used in operating activities
    
    
    (42,240
    )
    
    
    
    
    
    
    (42,240
    )Cash flows from investing activitiesPurchases of property, plant and equipment
    
    
    (2,943
    )
    
    
    
    
    
    
    (2,943
    )Proceeds from sale of property, plant and equipment
    
    
    18
    
    
    
    
    
    
    
    18Net cash flows used in investing activities
    
    
    (2,925
    )
    
    
    
    
    
    
    (2,925
    )Cash flows from financing activitiesPayments on long-term debt
    
    
    (32
    )
    
    
    
    
    
    
    (32
    )Issuance of common stock
    
    
    627
    
    
    
    
    
    
    
    627Excess tax benefit from stock-based compensation
    
    
    (192
    )
    
    
    
    
    
    
    (192
    )Cash dividends paid to stockholders
    
    
    (1,425
    )
    
    
    
    
    
    
    (1,425
    )Net cash flows used in financing activities
    
    
    (1,022
    )
    
    
    
    
    
    
    (1,022
    )Net decrease in cash and cash equivalents
    
    
    (46,187
    )
    
    
    
    
    
    
    (46,187
    )Cash and cash equivalents at beginning of period
    
    
    197,042
    
    
    
    
    
    
    
    197,042Cash and cash equivalents at end of period
    
    $
    150,855
    
    
    $
    
    
    
    $
    150,855Supplemental cash flow informationIncome taxes paid
    
    $
    1,276
    
    
    $
    
    
    
    $
    1,276
 17




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##### Table of Contents



Item 2.     Managements Discussion and Analysis of Financial Condition and Results of
Operations.
 OVERVIEW
 All of the financial information presented in this Item 2 has been adjusted to reflect the
restatement of our condensed consolidated financial statements for the three months and six months
ended June 30, 2008. The restatement is more fully described in Note 17 to the condensed
consolidated financial statements. 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.
      Restatement of Consolidated Financial Statements
  18




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##### Table of Contents



Three Months
    
    Six MonthsIncrease/(Decrease) in statement of
    
    Ended June 30,
    
    Ended June 30,operations line items (in thousands)
    
    2008
    
    2008| |Cost of sales
    
    $
    (767
    )
    
    $
    (706
    )Gross profit
    
    
    767
    
    
    
    706Operating income (loss) before income
taxes
    
    
    767
    
    
    
    706Income tax provision (benefit)
    
    
    249
    
    
    
    227Net income (loss)
    
    
    518
    
    
    
    479
 RESULTS OF OPERATIONS
 Three Months Ended June 30, 2009 compared to Three Months Ended June 30, 2008
 Revenues
  Gross Profit
  19




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##### Table of Contents



Selling, General and Administrative Expense
  Plant Closure Charges
  Interest Income
  Income Taxes
  Net Income Attributable to FreightCar America
  Six Months Ended June 30, 2009 compared to Six Months Ended June 30, 2008
 Revenues
  Gross Profit
  20




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##### Table of Contents



Selling, General and Administrative Expense
  Plant Closure Charges
  Interest Income
  Income Taxes
  Net Income Attributable to FreightCar America
  LIQUIDITY AND CAPITAL RESOURCES
   21




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##### Table of Contents



22




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##### Table of Contents



Contractual Obligations
  Payments Due by Period2-3
    
    
    4-5
    
    
    AfterContractual Obligations
    
    Total
    
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    5 Years(In thousands)Operating leases
    
    $
    14,894
    
    
    $
    2,446
    
    
    $
    5,216
    
    
    $
    5,088
    
    
    $
    2,144Material and component purchases
    
    
    131,324
    
    
    
    38,081
    
    
    
    56,164
    
    
    
    37,079
    
    
    
    Total
    
    $
    146,218
    
    
    $
    40,527
    
    
    $
    61,380
    
    
    $
    42,167
    
    
    $
    2,144
   23




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##### Table of Contents



Cash Flows
  Six Months EndedJune 30,20082009
    
    
    (as restated)(In thousands)Net cash provided by (used in):Operating activities
    
    $
    35,859
    
    
    $
    (42,240
    )Investing activities
    
    
    (11,233
    )
    
    
    (2,925
    )Financing activities
    
    
    (1,467
    )
    
    
    (1,022
    )Total
    
    $
    23,159
    
    
    $
    (46,187
    )
 Operating Activities.
  Investing Activities.
 Financing Activities.
 Capital Expenditures
  24




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##### Table of Contents



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.
  25




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##### Table of Contents



Item 3.     Quantitative and Qualitative Disclosures About Market Risk.
     
 Item 4.     Controls and Procedures.
 Evaluation of Disclosure Controls and Procedures
  Background of Restatement
    26




---



##### Table of Contents



(1)
    
    Surcharge Processing  The differences between the estimated surcharge amounts (which
were used to determine the accrual amount) and the actual surcharge amount listed on the
invoice were not consistently reflected as adjustments to the carrying value of inventory
by the third-party inventory processing system and a significant portion of these
differences remained in the unvouchered payables account rather than properly being
relieved to the cost of the assembled components.(2)
    
    Credit Memo Recording  Credit memos were incorrectly recorded by the Company. In
certain cases, when a credit memo received from a vendor was processed, the amount of the
credit memo was improperly posted to the unvouchered payables account rather than relieved
to the cost of the inventory.
   Description of Material Weaknesses
   System Change Controls
  Inventory Valuation Controls
  Account Reconciliation Controls
    27




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##### Table of Contents



Internal Control  Integrated Framework
 Changes in Internal Control over Financial Reporting
  Remediation Steps to Address Material Weaknesses
  ERP System
  Account Reconciliations
   28




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1.     Legal Proceedings.
  
 Item 1A.     Risk Factors.
 Form 10-K/A.
 
 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.
  1.
    
    To elect three directors who were nominated for election as Class I directors to three-year terms:
 Votes For
    
    VotesWithheldJames D. Cirar
    
    
    9,832,197
    
    
    
    923,482S. Carl Soderstrom, Jr.
    
    
    9,822,378
    
    
    
    933,301Robert N. Tidball
    
    
    9,312,854
    
    
    
    1,442,825
 2.
    
    To ratify the appointment of Deloitte & Touche LLP as our
independent registered public accounting firm for fiscal year
2009:
 VotesVotes For
    
    Against
    
    Abstentions10,710,956
    
    
    29,444
    
    
    
    15,279
 
 Item 5.     Other Information.
  29




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##### Table of Contents



Item 6.     Exhibits.
 (a)
    
    Exhibits filed as part of this Form 10-Q:
 10.1
    
    FreightCar America Inc. Executive Severance Plan (and Summary Plan Description).23
    
    Consent of Independent Registered Public Accounting Firm.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.
 30




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##### Table of Contents



SIGNATURES
  FREIGHTCAR AMERICA, INC.Date: September 30, 2009
    By:
    /s/ Christian B. RagotChristian B. Ragot, President andChief Executive OfficerBy:
    /s/  Christopher L. NagelChristopher L. Nagel, Vice President, Finance andChief Financial Officer 31




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description23
    
    Consent of Independent Registered Public Accounting Firm.10.1
    
    FreightCar America Inc. Executive Severance Plan (and Summary Plan Description).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.
 32