FreightCar America To Reduce 15% Of Its Salaried Workforce - Quick Facts

(RTTNews) - FreightCar America, Inc. (RAIL) announced, over the next 12 months, the company expects to reduce its annual operating costs by approximately $5 million by implementing: 15% reduction of salaried workforce; closure of the Johnstown administrative office; and reduction of certain discretionary spending. The company said the total estimated costs relating to the program are approximately $4.0 million, including approximately $2.5 million of employee-related costs and approximately $1.3 million in non-cash charges for asset impairments. The company expects to incur approximately $1.5 million of these costs in the third quarter of 2016 and approximately $0.8 million of these costs in the fourth quarter of 2016.

Joe McNeely, CEO, said: "Second quarter results reflected lower deliveries and higher costs due to a number of production-related matters, including the introduction of new car types. We are aggressively addressing all production issues and looking to significantly reduce our operating costs as we enter an increasingly competitive environment. Our backlog remains solid, totaling 6,207 railcars at June 30, 2016, with full year 2016 deliveries now expected to be between 5,600 and 6,100 railcars."

Consolidated revenues were $126.2 million in the second quarter of 2016 compared to $235.6 million in the same quarter of 2015. The company delivered 1,372 railcars in the second quarter of 2016, all of which were new railcars. This compares to 2,611 railcars delivered in the second quarter of 2015, which included 1,861 new and 750 rebuilt railcars. Consolidated operating loss for the second quarter of 2016 was $0.6 million, compared to operating income of $10.9 million in the second quarter of 2015.