Freightcar America, Inc.

Greetings, and welcome to Freight Car America's third quarter fiscal 2022 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. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Stephen Poe, Investor Relations. Thank you. 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 Ton, 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 Freight Car America's 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 statements. 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 also 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 their most directly comparable GAAP measures are included in the earnings release issued yesterday afternoon. Our earnings release for the third quarter of 2022 is posted on the company's website at freecaramerica.com, along with our 10-Q, which was filed yesterday after market. With that, let me now turn the call over to Jim for a few opening remarks.

Thank you, Stephen. Good morning, and thank you all for joining us today. Before I discuss the quarter, I would like to begin by thanking our FreightCar America employees for their continued dedication and hard work as we continue to scale our company and execute on our strategic priorities. I'm incredibly proud of this team as we continue to work to build a world-class manufacturing campus in Castanos. The power and potential of our new campus was evident once again this quarter as we produced another record number of rail cars. Our transformation is on pace and we are continuing to invest to prudently expand our capabilities as we produce more and more rail cars at the highest levels of quality and on time performance. I'll talk more about the transformation in a few minutes. Now let me provide an overview of our third quarter results. As you saw in yesterday's earnings release, Freight Car America delivered 47% top line growth and 783 cars in the third quarter, an increase of 55% year over year, which again set a new high watermark for deliveries out of our new facility. Manufacturing operating income grew to $3.1 million from $163,000 a year ago, and we achieved adjusted EBITDA of $1.6 million compared to a loss of $3.5 million during the same period a year ago. That said, our third quarter financial results were muted by deliveries of lower margin rail car orders that were accepted earlier in the year and at the bottom of the cycle, as well as elevated freight costs. These items put downward pressure on our profitability and made a dent to our gross margin, which had been double digits during the prior two quarters. We expect these legacy orders to be completed before year end, and for our margin profile to strengthen beginning in the fourth quarter. In addition, we are actively exploring alternative freight strategies with the goal to reduce these costs. Overall, the railcar environment is more positive than not. The more positive aspect comes from both what we are seeing in terms of industry fundamentals and sales inquiries, And the not aspect is our caution as it relates to overall macroeconomic uncertainties, including high inflation and persistent supply chain challenges. Unlike so many other companies, we are not experiencing issues related to hiring and retaining skilled workers. Our sales team remains intently focused on winning business that is good for the company and accretive to margins. As I have highlighted on previous calls, our cost structure and size provides us with some flexibility in how we select and schedule business. As we build rail cars and run the overall business, we also continue to make significant and very important progress on the company's strategic and performance initiatives in Castanos. and we firmly believe that we are successfully positioning ourselves as a world-class manufacturer in northern Mexico with increasing benefits to come. Construction of our new fabrication shop is now complete, and we started bringing it online during the third quarter. We also completed the expansion of our wheel and axle shop and now have AAR certification that allows us to machine axles in-house. As we have alluded to in previous calls, both of these additions will bring meaningful efficiencies in addition to the benefits from further scaling and producing more units. Additionally, as I mentioned in my opening remarks, we continue to be impressed by the volume of rail cars that our new footprint can produce and deliver, which is on pace for substantial growth over last year. In the first nine months, we delivered 2,034 rail cars, more than in all of 2021. As a reminder, for the full year 2022, we are forecasting revenue to be between $340 million and $360 million, up approximately 72% year over year at the midpoint of the range. We are also projecting deliveries to be between 3,000 and 3,200 rail cars, an increase of approximately 79% year-over-year at the midpoint of the range. In summary, while there is much more work to be done to achieve our full potential as we envision it, we believe that Freight Car America is poised to continue delivering growth and improve profitability as we continue to scale our new facility and also as the macroeconomic environment and supply chains normalize. With that, I would like to now turn the call over to Matt for a few commercial comments related to the third quarter and moving forward. Matt?