##### 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 September 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 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 as of
September 30, 2009 (Unaudited) and December 31, 2008 (as restated)
    
    
    3Condensed Consolidated Statements of Operations (Unaudited) for the
Three and Nine Months Ended September 30, 2009 and 2008 (as restated)
    
    
    4Condensed Consolidated Statements of Stockholders Equity (Unaudited) for the Nine
Months Ended September 30, 2009 and 2008 (as restated)
    
    
    5Condensed Consolidated Statements of Cash Flows (Unaudited) for the
Nine Months Ended September 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
    
    
    193.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    274.
    
    Controls and Procedures
    
    
    27PART II  OTHER INFORMATION1.
    
    Legal Proceedings
    
    
    301A.
    
    Risk Factors
    
    
    302.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    303.
    
    Defaults Upon Senior Securities
    
    
    304.
    
    Submission of Matters to a Vote of Security Holders
    
    
    305.
    
    Other Information
    
    
    306.
    
    Exhibits
    
    
    30Signatures
    
    
    31EX-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,September 30,
    
    
    20082009
    
    
    (as restated)(In thousands)AssetsCurrent assetsCash and cash equivalents
    
    $
    113,691
    
    
    $
    129,192Securities available for sale, at fair value
    
    
    19,986
    
    
    
    Accounts receivable, net of allowance for
doubtful accounts of $220 and $330,
respectively
    
    
    2,259
    
    
    
    73,120Inventories
    
    
    56,191
    
    
    
    31,096Leased railcars held for sale
    
    
    9,528
    
    
    
    11,490Property, plant and equipment held for sale
    
    
    2,461
    
    
    
    Other current assets
    
    
    8,270
    
    
    
    6,789Deferred income taxes, net
    
    
    15,404
    
    
    
    16,003Total current assets
    
    
    227,790
    
    
    
    267,690Property, plant and equipment, net
    
    
    28,852
    
    
    
    30,582Railcars on operating leases
    
    
    52,334
    
    
    
    34,735Goodwill
    
    
    21,521
    
    
    
    21,521Deferred income taxes, net
    
    
    11,923
    
    
    
    23,281Other long-term assets
    
    
    4,843
    
    
    
    5,484Total assets
    
    $
    347,263
    
    
    $
    383,293Liabilities and Stockholders EquityCurrent liabilitiesAccounts payable
    
    $
    27,604
    
    
    $
    47,328Accrued payroll and employee benefits
    
    
    4,762
    
    
    
    9,530Accrued postretirement benefits
    
    
    5,364
    
    
    
    5,364Accrued warranty
    
    
    10,403
    
    
    
    11,476Customer deposits
    
    
    2,590
    
    
    
    7,367Other current liabilities
    
    
    5,719
    
    
    
    7,939Total current liabilities
    
    
    56,442
    
    
    
    89,004Accrued pension costs
    
    
    15,669
    
    
    
    26,763Accrued postretirement benefits, less current portion
    
    
    53,805
    
    
    
    55,293Other long-term liabilities
    
    
    6,431
    
    
    
    7,407Total liabilities
    
    
    132,347
    
    
    
    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 September 30, 2009 and December 31, 2008
    
    
    
    
    
    
    Common stock, $0.01 par value; 50,000,000
shares authorized, 12,731,678 shares issued
at September 30, 2009 and December 31, 2008
    
    
    127
    
    
    
    127Additional paid in capital
    
    
    97,603
    
    
    
    98,253Treasury stock, at cost; 780,793 and 821,182
shares at September 30, 2009 and December
31, 2008, respectively
    
    
    (36,926
    )
    
    
    (38,871
    )Accumulated other comprehensive loss
    
    
    (16,086
    )
    
    
    (16,471
    )Retained earnings
    
    
    170,027
    
    
    
    161,687Total FreightCar America stockholders equity
    
    
    214,745
    
    
    
    204,725Noncontrolling interest in India JV
    
    
    171
    
    
    
    101Total stockholders equity
    
    
    214,916
    
    
    
    204,826Total liabilities and stockholders equity
    
    $
    347,263
    
    
    $
    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
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    
    
    
    
    20082009
    
    
    (as restated)
    
    
    2009
    
    
    (as restated)(In thousands, except share and per share data)Revenues
    
    $
    55,131
    
    
    $
    238,008
    
    
    $
    199,022
    
    
    $
    474,441Cost of sales
    
    
    48,252
    
    
    
    215,420
    
    
    
    165,865
    
    
    
    435,234Gross profit
    
    
    6,879
    
    
    
    22,588
    
    
    
    33,157
    
    
    
    39,207Selling, general and administrative expense (including non-cash
stock-based compensation expense of $563, $608, $1,654 and $2,301,
respectively)
    
    
    6,595
    
    
    
    7,207
    
    
    
    20,630
    
    
    
    23,076Plant closure charges (income)
    
    
    
    
    
    
    268
    
    
    
    (495
    )
    
    
    20,133Operating income (loss)
    
    
    284
    
    
    
    15,113
    
    
    
    13,022
    
    
    
    (4,002
    )Interest (expense) income, net
    
    
    (210
    )
    
    
    632
    
    
    
    (505
    )
    
    
    2,523Operating income (loss) before income taxes
    
    
    74
    
    
    
    15,745
    
    
    
    12,517
    
    
    
    (1,479
    )Income tax (benefit) provision
    
    
    (971
    )
    
    
    5,702
    
    
    
    2,101
    
    
    
    (900
    )Net income (loss)
    
    
    1,045
    
    
    
    10,043
    
    
    
    10,416
    
    
    
    (579
    )Less: Net loss attributable to non-controlling interest in India JV
    
    
    (24
    )
    
    
    
    
    
    
    (72
    )
    
    
    Net income (loss) attributable to FreightCar America
    
    $
    1,069
    
    
    $
    10,043
    
    
    $
    10,488
    
    
    $
    (579
    )Net income (loss) per common share attributable to FreightCar
America  basic
    
    $
    0.09
    
    
    $
    0.85
    
    
    $
    0.88
    
    
    $
    (0.05
    )Net income (loss) per common share attributable to FreightCar America
 diluted
    
    $
    0.09
    
    
    $
    0.85
    
    
    $
    0.88
    
    
    $
    (0.05
    )Weighted average common shares outstanding  basic
    
    
    11,867,314
    
    
    
    11,809,024
    
    
    
    11,859,361
    
    
    
    11,776,503Weighted average common shares outstanding  diluted
    
    
    11,875,748
    
    
    
    11,841,236
    
    
    
    11,864,161
    
    
    
    11,776,503Dividends declared per common share
    
    $
    0.06
    
    
    $
    0.06
    
    
    $
    0.18
    
    
    $
    0.18
 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
    
    
    Treasury Stock
    
    
    Comprehensive
    
    
    Retained
    
    
    Noncontrolling
    
    
    StockholdersShares
    
    
    Amount
    
    
    In 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)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (579
    )
    
    
    
    
    
    
    (579
    )Pension liability activity, net
of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49
    
    
    
    
    
    
    
    
    
    
    
    49Postretirement liability
activity, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    246
    
    
    
    
    
    
    
    
    
    
    
    246Comprehensive loss (as restated)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (284
    )Stock options exercised
    
    
    
    
    
    
    
    
    
    
    (939
    )
    
    
    32,981
    
    
    
    1,566
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    627Restricted stock awards
    
    
    
    
    
    
    
    
    
    
    (2,305
    )
    
    
    48,547
    
    
    
    2,305
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeiture of restricted stock
awards
    
    
    
    
    
    
    
    
    
    
    81
    
    
    
    (2,180
    )
    
    
    (81
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock-based compensation
recognized
    
    
    
    
    
    
    
    
    
    
    2,301
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,301Deficiency of tax benefit from
stock-based compensation
    
    
    
    
    
    
    
    
    
    
    (192
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (192
    )Cash dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,139
    )
    
    
    
    
    
    
    (2,139
    )Balance, September 30, 2008 (as
restated)
    
    
    12,731,678
    
    
    $
    127
    
    
    $
    98,216
    
    
    
    (838,909
    )
    
    $
    (39,807
    )
    
    $
    (9,562
    )
    
    $
    150,402
    
    
    
    
    
    
    $
    199,376Balance, December 31, 2008 (as
restated)
    
    
    12,731,678
    
    
    $
    127
    
    
    $
    98,253
    
    
    
    (821,182
    )
    
    $
    (38,871
    )
    
    $
    (16,471
    )
    
    $
    161,687
    
    
    $
    101
    
    
    $
    204,826Net income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,488
    
    
    
    (72
    )
    
    
    10,416Pension liability activity, net
of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    274
    
    
    
    
    
    
    
    
    
    
    
    274Postretirement liability
activity, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    104
    
    
    
    
    
    
    
    
    
    
    
    104Unrealized gain on
available-for-sale securities,
net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    7Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,801Restricted stock awards
    
    
    
    
    
    
    
    
    
    
    (1,969
    )
    
    
    41,589
    
    
    
    1,969
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeiture of restricted stock
awards
    
    
    
    
    
    
    
    
    
    
    24
    
    
    
    (1,200
    )
    
    
    (24
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock-based compensation
recognized
    
    
    
    
    
    
    
    
    
    
    1,653
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,653Deficiency of tax benefit from
stock-based compensation
    
    
    
    
    
    
    
    
    
    
    (358
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (358
    )Additional investment in
noncontrolling interest in
India JV
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    142
    
    
    
    142Cash dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,148
    )
    
    
    
    
    
    
    (2,148
    )Balance, September 30, 2009
    
    
    12,731,678
    
    
    $
    127
    
    
    $
    97,603
    
    
    
    (780,793
    )
    
    $
    (36,926
    )
    
    $
    (16,086
    )
    
    $
    170,027
    
    
    $
    171
    
    
    $
    214,916
 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)
 Nine Months EndedSeptember 30,20082009
    
    
    (as restated)(In thousands)Cash flows from operating activitiesNet income (loss) attributable to FreightCar America
    
    $
    10,488
    
    
    $
    (579
    )Adjustments to reconcile net income (loss) to net cash flows used in
operating activitiesPlant closure charges
    
    
    
    
    
    
    20,133Depreciation and amortization
    
    
    4,024
    
    
    
    3,215Other non-cash items
    
    
    2,359
    
    
    
    (268
    )Deferred income taxes
    
    
    11,722
    
    
    
    (7,811
    )Compensation expense under stock option and restricted share
award agreements
    
    
    1,653
    
    
    
    2,301Noncontrolling interest in India JV
    
    
    (72
    )
    
    
    Changes in operating assets and liabilities:Accounts receivable
    
    
    70,861
    
    
    
    (55,252
    )Inventories
    
    
    (27,075
    )
    
    
    (65,669
    )Leased railcars held for sale
    
    
    (7,948
    )
    
    
    (705
    )Other current assets
    
    
    (197
    )
    
    
    (6,174
    )Accounts payable
    
    
    (19,108
    )
    
    
    74,948Accrued payroll and employee benefits
    
    
    (4,768
    )
    
    
    (4,178
    )Income taxes receivable/payable
    
    
    (1,789
    )
    
    
    7,398Accrued warranty
    
    
    (1,073
    )
    
    
    752Other current liabilities and customer deposits
    
    
    (6,964
    )
    
    
    10,910Deferred revenue, non-current
    
    
    (599
    )
    
    
    Accrued pension costs and accrued postretirement benefits
    
    
    (12,204
    )
    
    
    (6,163
    )Net cash flows provided by (used in) operating activities
    
    
    19,310
    
    
    
    (27,142
    )Cash flows from investing activitiesPurchase of securities available for sale
    
    
    (19,967
    )
    
    
    Cost of railcars on operating leases produced or acquired
    
    
    (8,758
    )
    
    
    (35,201
    )Purchases of property, plant and equipment
    
    
    (4,047
    )
    
    
    (4,117
    )Net cash flows used in investing activities
    
    
    (32,772
    )
    
    
    (39,318
    )Cash flows from financing activitiesPayments on long-term debt
    
    
    (28
    )
    
    
    (48
    )Deferred financing costs paid
    
    
    (5
    )
    
    
    (969
    )Issuance of common stock
    
    
    
    
    
    
    627Investment in noncontrolling interest by joint venture partner
    
    
    142
    
    
    
    Cash dividends paid to stockholders
    
    
    (2,148
    )
    
    
    (2,139
    )Net cash flows used in financing activities
    
    
    (2,039
    )
    
    
    (2,529
    )Net decrease in cash and cash equivalents
    
    
    (15,501
    )
    
    
    (68,989
    )Cash and cash equivalents at beginning of period
    
    
    129,192
    
    
    
    197,042Cash and cash equivalents at end of period
    
    $
    113,691
    
    
    $
    128,053Supplemental 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
 The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted
Accounting Principles  a replacement of FASB Statement No. 162
 Fair Value Measurements and Disclosures, Fair Value Measurements)
 Business Combinations Business Combinations
 7




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##### Table of Contents



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




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##### Table of Contents



September 30,
    
    September 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
    )
    
    
    (375
    )Insurance recoveries and other related costs
    
    
    (329
    )
    
    
    1,793Total plant closure (income) charges
    
    $
    (495
    )
    
    $
    20,133
 Note 5  Fair Value Measurements
 Fair Value Measurements and Disclosures
   Level 1
 Level 2
 Level 3
  As of September 30, 2009Recurring Fair Value Measurements
    
    Level 1
    
    Level 2
    
    Level 3
    
    TotalASSETS:Securities available for sale 
fixed income government
obligations
    
    $
    19,986
    
    
    $
    
    
    
    $
    
    
    
    $
    19,986
  9




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##### Table of Contents



Note 6  Inventories
  September 30,
    
    
    December 31,2009
    
    
    2008Work in progress
    
    $
    37,369
    
    
    $
    23,618Finished new railcars
    
    
    7,510
    
    
    
    5,513Used railcars acquired upon trade-in
    
    
    11,312
    
    
    
    1,965Total inventories
    
    $
    56,191
    
    
    $
    31,096
 Note 7 Leased Railcars
        Three months ending December 31, 2009
    
    $
    1,135Year ending December 31, 2010
    
    
    4,295Year ending December 31, 2011
    
    
    3,066Year ending December 31, 2012
    
    
    615Year ending December 31, 2013
    
    
    104Thereafter
    
    
    $
    9,215
 10




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##### Table of Contents



Note 8  Property, Plant and Equipment
  September 30,
    
    
    December 31,2009
    
    
    2008Buildings and improvements
    
    $
    19,056
    
    
    $
    20,918Machinery and equipment
    
    
    31,188
    
    
    
    42,352Cost of buildings, improvements, machinery and equipment
    
    
    50,244
    
    
    
    63,270Less: Accumulated depreciation and amortization
    
    
    (21,543
    )
    
    
    (38,996
    )Buildings, improvements, machinery and equipment, net
of accumulated depreciation and amortization
    
    
    28,701
    
    
    
    24,274Land
    
    
    151
    
    
    
    701Construction in process
    
    
    
    
    
    
    5,607Total property, plant and equipment, net
    
    $
    28,852
    
    
    $
    30,582
  Note 9  Goodwill and Intangible Assets
   September 30,
    
    
    December 31,2009
    
    
    2008Patents
    
    $
    13,097
    
    
    $
    13,097Accumulated amortization
    
    
    (9,048
    )
    
    
    (8,604
    )Patents, net of accumulated amortization
    
    
    4,049
    
    
    
    4,493Goodwill
    
    
    21,521
    
    
    
    21,521Total goodwill and intangible assets
    
    $
    25,570
    
    
    $
    26,014
   11




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##### Table of Contents



Note 10  Product Warranties
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Balance at the beginning of the period
    
    $
    10,768
    
    
    $
    10,916
    
    
    $
    11,476
    
    
    $
    10,551Provision for warranties issued during the period
    
    
    203
    
    
    
    925
    
    
    
    672
    
    
    
    2,641Reductions for payments, cost of repairs and other
    
    
    (568
    )
    
    
    (538
    )
    
    
    (1,745
    )
    
    
    (1,889
    )Balance at the end of the period
    
    $
    10,403
    
    
    $
    11,303
    
    
    $
    10,403
    
    
    $
    11,303
 Note 11  Revolving Credit Facilities
    JAIX Revolving Credit Facility
  12




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Note 12  Stock-Based Compensation
      Note 13  Comprehensive Income
   13




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##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net operating income (loss)
    
    $
    1,069
    
    
    $
    10,043
    
    
    $
    10,488
    
    
    $
    (579
    )Other comprehensive income:Amortization of prior service
costs and actuarial losses, net
of tax
    
    
    41
    
    
    
    64
    
    
    
    378
    
    
    
    295Market value adjustment for
securities available for sale,
net
of tax
    
    
    7
    
    
    
    
    
    
    
    7
    
    
    
    Total comprehensive income (loss)
    
    $
    1,117
    
    
    
    10,107
    
    
    $
    10,873
    
    
    $
    (284
    )
 Note 14  Employee Benefit Plans
    Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Pension BenefitsService cost
    
    $
    6
    
    
    $
    282
    
    
    $
    306
    
    
    $
    846Interest cost
    
    
    931
    
    
    
    842
    
    
    
    2,883
    
    
    
    2,526Plant closure cost
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,826Expected return on plan assets
    
    
    (733
    )
    
    
    (940
    )
    
    
    (2,207
    )
    
    
    (2,819
    )Amortization of prior service cost
    
    
    26
    
    
    
    
    
    
    
    78
    
    
    
    Amortization of unrecognized net (gain) loss
    
    
    (8
    )
    
    
    7
    
    
    
    368
    
    
    
    21$
    222
    
    
    $
    191
    
    
    $
    1,428
    
    
    $
    10,400
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Postretirement Benefit PlanService cost
    
    $
    20
    
    
    $
    17
    
    
    $
    44
    
    
    $
    51Interest cost
    
    
    976
    
    
    
    808
    
    
    
    2,962
    
    
    
    2,424Plant closure cost
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,889Amortization of prior service cost
    
    
    69
    
    
    
    56
    
    
    
    181
    
    
    
    168Amortization of unrecognized net (gain) loss
    
    
    (1
    )
    
    
    41
    
    
    
    (1
    )
    
    
    123$
    1,064
    
    
    $
    922
    
    
    $
    3,186
    
    
    $
    11,655
  14




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##### Table of Contents



Note 15  Contingencies
    Note 16  Earnings Per Share
  Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2009
    
    2008
    
    2009
    
    2008Weighted average common shares outstanding
    
    
    11,867,314
    
    
    
    11,809,024
    
    
    
    11,859,361
    
    
    
    11,776,503Dilutive effect of employee stock options and
nonvested share awards
    
    
    8,434
    
    
    
    32,212
    
    
    
    4,800
    
    
    
    Weighted average diluted common shares outstanding
    
    
    11,875,748
    
    
    
    11,841,236
    
    
    
    11,864,161
    
    
    
    11,776,503
 15




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##### Table of Contents



Note 17  Sales Contract Termination Revenue
  Note 18  Restatement of Prior Period Condensed Consolidated Financial Statements
    16




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##### Table of Contents



ondensed Consolidated Statement of Operations
(in thousands, except share and per share data)
(Unaudited)
 Nine Months Ended September 30, 2008As Previously
    
    
    Effect ofReported
    
    
    Restatement
    
    
    RestatedRevenues
    
    $
    474,441
    
    
    $
    
    
    
    $
    474,441Cost of sales
    
    
    440,112
    
    
    
    (4,878
    )
    
    
    435,234Gross profit
    
    
    34,329
    
    
    
    4,878
    
    
    
    39,207Selling, general and administrative expense
(including non-cash stock-based compensation
expense of $2,301)
    
    
    23,076
    
    
    
    
    
    
    
    23,076Plant closure charges
    
    
    20,133
    
    
    
    
    
    
    
    20,133Operating loss
    
    
    (8,880
    )
    
    
    4,878
    
    
    
    (4,002
    )Interest income, net
    
    
    2,523
    
    
    
    
    
    
    
    2,523Operating loss before income taxes
    
    
    (6,357
    )
    
    
    4,878
    
    
    
    (1,479
    )Income tax benefit
    
    
    (2,644
    )
    
    
    1,744
    
    
    
    (900
    )Net (loss) income
    
    
    (3,713
    )
    
    
    3,134
    
    
    
    (579
    )Less: Net (loss) income attributable to
noncontrolling interest in India JV
    
    
    
    
    
    
    
    
    
    
    Net (loss) income attributable to FreightCar America
    
    $
    (3,713
    )
    
    $
    3,134
    
    
    $
    (579
    )Net (loss) income per common share attributable to
FreightCar America  basic
    
    $
    (0.32
    )
    
    $
    0.27
    
    
    $
    (0.05
    )Net (loss) income per common share attributable to
FreightCar America  diluted
    
    $
    (0.32
    )
    
    $
    0.27
    
    
    $
    (0.05
    )Weighted average common shares outstandingbasic
    
    
    11,776,503
    
    
    
    
    
    
    
    11,776,503Weighted average common shares outstandingdiluted
    
    
    11,776,503
    
    
    
    
    
    
    
    11,776,503Dividends declared per common share
    
    $
    0.18
    
    
    
    
    
    
    $
    0.18
  17




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##### Table of Contents



Nine Months Ended September 30, 2008As Previously
    
    
    Effect ofReported
    
    
    Restatement
    
    
    RestatedCash flows from operating activitiesNet (loss) income attributable to FreightCar America
    
    $
    (3,713
    )
    
    $
    3,134
    
    
    $
    (579
    )Adjustments to reconcile net (loss) income to net cash
flows used in operating activitiesPlant closure charges
    
    
    20.133
    
    
    
    
    
    
    
    20.133Depreciation and amortization
    
    
    3,215
    
    
    
    
    
    
    
    3,215Other non-cash items
    
    
    (268
    )
    
    
    
    
    
    
    (268
    )Deferred income taxes
    
    
    (7,811
    )
    
    
    
    
    
    
    (7,811
    )Compensation expense under stock option and
restricted share award agreements
    
    
    2,301
    
    
    
    
    
    
    
    2,301Changes in operating assets and liabilities:Accounts receivable
    
    
    (55,252
    )
    
    
    
    
    
    
    (55,252
    )Inventories
    
    
    (63,633
    )
    
    
    (2,036
    )
    
    
    (65,669
    )Leased railcars held for sale
    
    
    (705
    )
    
    
    
    
    
    
    (705
    )Other current assets
    
    
    (6,174
    )
    
    
    
    
    
    
    (6,174
    )Accounts payable
    
    
    78,026
    
    
    
    (3,078
    )
    
    
    74,948Accrued payroll and employee benefits
    
    
    (4,178
    )
    
    
    
    
    
    
    (4,178
    )Income taxes receivable/payable
    
    
    5,654
    
    
    
    1,744
    
    
    
    7,398Accrued warranty
    
    
    752
    
    
    
    
    
    
    
    752Other current liabilities and customer deposits
    
    
    10,910
    
    
    
    
    
    
    
    10,910Accrued pension costs and accrued
postretirement benefits
    
    
    (6,163
    )
    
    
    
    
    
    
    (6,163
    )Net cash flows used in operating activities
    
    
    (26,906
    )
    
    
    (236
    )
    
    
    (27,142
    )Cash flows from investing activitiesPurchases of property, plant and equipment
    
    
    (4,117
    )
    
    
    
    
    
    
    (4,117
    )Cost of railcars on operating leases produced or acquired
    
    
    (35,437
    )
    
    
    236
    
    
    
    (35,201
    )Net cash flows used in investing activities
    
    
    (39,554
    )
    
    
    236
    
    
    
    (39,318
    )Cash flows from financing activitiesPayments on long-term debt
    
    
    (48
    )
    
    
    
    
    
    
    (48
    )Deferred financing costs paid
    
    
    (969
    )
    
    
    
    
    
    
    (969
    )Issuance of common stock
    
    
    627
    
    
    
    
    
    
    
    627Cash dividends paid to stockholders
    
    
    (2,139
    )
    
    
    
    
    
    
    (2,139
    )Net cash flows used in financing activities
    
    
    (2,529
    )
    
    
    
    
    
    
    (2,529
    )Net decrease in cash and cash equivalents
    
    
    (68,989
    )
    
    
    
    
    
    
    (68,989
    )Cash and cash equivalents at beginning of period
    
    
    197,042
    
    
    
    
    
    
    
    197,042Cash and cash equivalents at end of period
    
    $
    128,053
    
    
    $
    
    
    
    $
    128,053Supplemental cash flow informationIncome taxes paid
    
    $
    1,276
    
    
    $
    
    
    
    $
    1,276
 18




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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 nine months
ended September 30, 2008. The restatement is more fully described in Note 18 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.
       19




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##### Table of Contents



Restatement of Consolidated Financial Statements
    Increase/(Decrease) in statement of
    
    Three Months Ended
    
    Nine Months Endedoperations line items (in thousands)
    
    September 30, 2008
    
    September 30, 2008Cost of sales
    
    $
    (4,171
    )
    
    $
    (4,878
    )Gross profit
    
    
    4,171
    
    
    
    4,878Operating income (loss)
before income taxes
    
    
    4,171
    
    
    
    4,878Income tax provision (benefit)
    
    
    1,517
    
    
    
    1,744Net income (loss)
    
    
    2,654
    
    
    
    3,134
 RESULTS OF OPERATIONS
 Three Months Ended September 30, 2009 compared to Three Months Ended September 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
  Nine Months Ended September 30, 2009 compared to Nine Months Ended September 30, 2008
 Revenues
  Gross Profit
  21




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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
   22




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23




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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
    
    $
    14,313
    
    
    $
    2,507
    
    
    $
    5,235
    
    
    $
    5,043
    
    
    $
    1,528Material and component purchases
    
    
    124,476
    
    
    
    36,966
    
    
    
    55,746
    
    
    
    31,764
    
    
    
    Total
    
    $
    138,789
    
    
    $
    39,473
    
    
    $
    60,981
    
    
    $
    36,807
    
    
    $
    1,528
   24




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##### Table of Contents



Cash Flows
  Nine Months EndedSeptember 30,20082009
    
    
    (as restated)(In thousands)Net cash provided by (used in):Operating activities
    
    $
    19,310
    
    
    $
    (27,142
    )Investing activities
    
    
    (32,772
    )
    
    
    (39,318
    )Financing activities
    
    
    (2,039
    )
    
    
    (2,529
    )Total
    
    $
    (15,501
    )
    
    $
    (68,989
    )
 Operating Activities.
  Investing Activities.
 Financing Activities.
 Capital Expenditures
  25




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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.
  26




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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
    27




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##### 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
    28




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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
   29




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 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.
 30




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##### Table of Contents



SIGNATURES
  FREIGHTCAR AMERICA, INC.Date: November 9, 2009
    By:
    /s/   Christian B. RagotChristian B. Ragot, President andChief Executive OfficerBy:
    /s/  Christopher L. NagelChristopher L. Nagel, Vice President, Financeand Chief Financial Officer 31




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##### Table of Contents



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.
 32