Freightcar America, Inc.

Greetings. Welcome to the Freight Car America fourth quarter and full year 2021 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I'll now turn the conference over to your host, Lisa Fortuna of Investor Relations. You may begin.

Thank you and welcome. Joining me today are Jim Meyer, President and Chief Executive Officer, Mike Reardon, Chief Financial Officer, and Matt Pahn, Chief Commercial Officer. I'd like to remind everyone that statements made during this conference call relating to the company's expected future performance, future business prospects, or future events or plans may include forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. Participants are directed to Great Power Americas Form 10-K for a description of certain business risks, some of which may be outside of the control of the company that may cause actual results to materially differ from those expressed in the forward-looking statement. We expressly disclaim any duty to provide updates to our forward-looking statements, whether as a result of new information, future events, or otherwise. During today's call, there will be a discussion of some items that do not conform to U.S. generally accepted accounting principles or GAAP. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in the press release issued this morning. Our earnings release for the fourth quarter 2021 is posted on the company's website at freightcaramerica.com and our 10-K, which was filed before the market opened earlier today. With that, let me now turn the call over to Jim for opening remarks.

Thank you, Lisa. Good morning, and thank you all for joining us today. I'm very pleased to start today's call with the introduction of Mike Reardon, who has been promoted to serve as our new chief financial officer. This changing of the guard became effective yesterday, which allows us to introduce him to you this morning. Mike previously served as the company's controller and chief accounting officer. and has been a member of the senior team since 2020. He has been instrumental in everything that we have accomplished over the past couple of years, and it was our hope when we recruited him that we would get to this day. I also want to extend a sincere thank you to Terry Rogers, who joined us on very short notice last year and guided our finance functions in what was still very much a transition year for the company. Terry will remain part of the team until May. With that, let's get started. I am extremely proud of what we have accomplished this quarter and in the full year 2021. Because we had a strategic update call with you just last month, I will be briefer with my comments. This past year was truly a remarkable one. The move of our manufacturing operations to Kistanos is now complete. and we have transformed Freight Car America into a much healthier growing company with a significant opportunity to drive shareholder value. Our revenue was up 87% year over year, and our order book at year end was up 67% versus the prior year end. Even so, we believe that we are just getting started. We continue to have high-quality discussions with customers, and we continue to expand our manufacturing footprint with added wheel and axle capability, a large fabrication shop, and additional production lines. What this says about Freight Car America is that we are competing and winning in the marketplace, and that we are confident about the future and our ability to make money going forward. As you saw in our press release today, we reported results that were in line with the expectations we communicated on the February call. This included a fifth consecutive quarter of positive gross margin, as well as positive manufacturing operating income for the third quarter in a row. During the fourth quarter, our revenue was up 23.8% year over year, and we delivered 604 rail cars versus 477 in the same period of 2020. The full year-over-year improvement was a direct result of our improved car structure, operating capabilities at the Castanos factory, our facility, and overall ability to compete. The transition of our manufacturing footprint to Castanos translated to approximately $20 million in annual fixed cost savings in 2021 versus the prior US-based footprint. And we expect annual fixed cost savings versus the prior US-based footprint to remain above $17 million going forward. Additionally, we lowered our labor cost per unit by 60% on average in 2021. compared to the previous US-based footprint. The Castano's factory is running well, and our team is performing at a high level. As stated on our third quarter earnings call, the Castano's team of nearly 1,000 individuals is essentially 100% vaccinated against COVID-19, and the personal and workplace disruptions from COVID have been largely avoided to date. Our workforce is one of the main reasons we believe that we stand out from our competitors. Additionally, our collective team has been superb in helping us navigate persistent supply chain constraints and raw material cost inflation, particularly as it relates to steel. Still, the demand environment across all our end markets continues to strengthen, and is in line with the return to growth strategy we laid out in 2021. We are continuing to see increasingly positive trends across the industry. Specifically, with rail cars and storage declining and traffic increasing, we are expecting an ongoing recovery of the cycle, which will allow Freight Car America to capitalize on heightened demand with additional capacity coming later this year and in 2023. I will let Matt dig more into the details of the demand environment in a few minutes. Turning to our capital structure and future cash needs, we are focused on improving our cash cushion, improving on our various loan terms and conditions, ensuring there is ample funding to complete the expansion of our Castanos facility, and eventually funding an entrance into the tank car market. We appreciate the confidence our current financial partners have in providing the funding and liquidity we need to complete our business transformation, but as our results improve, we expect to look for ways to lower our long-term cost of capital. In summary, the entire team is performing well, and we are pleased by the progress we have made and the results we produced in the fourth quarter and full year, despite the inflationary challenges. We are confident in our future growth and believe 2022 is shaping up to be the year where we start to deliver the strong performance that everyone expects and we believe that we're capable of. With that said, I would now like to turn the call over to Mike for a review of our financials. Mike?