Freightcar America, Inc.

Welcome to Freight Car America's second quarter 2023 earnings conference call. At this time, all participant lines are in a listen-only mode. For those of you participating on the conference today, there will be an opportunity for your questions at the end of today's prepared comments. Please note that this conference is being recorded. An audio replay of the conference will be available on the company's website within a few hours after this call. I would now like to turn the call over to Chris O'Day with Riverton Invest Relations. Please go ahead.

Thank you and welcome. Joining me today are Jim Meyer, President and Chief Executive Officer, Mike Reardon, Chief Financial Officer, Matt Ton, Chief Commercial Officer, and Nick Randall, Chief Operating 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 FreightCar America's Form 10-K for description of certain business risks, some of which may be outside of 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 it is 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 earnings release issued yesterday afternoon. Earnings release for the second quarter of 2023 is posted on the company's website at freightcaramerica.com, along with our 8K, which was filed yesterday after market. With that, let me now turn the call over to Jim for a few opening remarks.

Good morning, everyone, and thank you all for joining us today. Freight Car America delivered impressive second quarter results as we continue to pursue and realize our efforts to become world class at what we do. Revenues for the quarter increased 56% year over year to $88.6 million on deliveries of 760 rail cars. During the quarter, We continued to work to finish the construction and the dialing in of our still new manufacturing operations and thereby improve performance, which during the second quarter produced a very respectable gross margin of 14.6%. I will add that the impact of foreign currency headwinds absorbed during the quarter make our results all the more commendable. And best of all, we still have much, much more that we plan to do to further leverage our operations and further improve efficiencies. As we have stated before, our goal is to be the best manufacturer in the industry, setting new standards for our peers in quality, efficiency, and overall performance. This quarter characterized these efforts well, allowing us to achieve strong results while delivering even stronger value to our customers. As part of our commitment to operational excellence, we announced during the quarter the appointment of our first Chief Operating Officer, Nick Randall. Nick brings extensive manufacturing experience and a track record for delivering superior customer satisfaction at premier companies. He is a great addition to our leadership team and will guide us to even higher levels of performance. Nick is with us on the call today and will be available as part of the Q&A. After approximately four years of construction, three of those years in which we were simultaneously producing rail cars, we are finally nearing completion of the vertically integrated manufacturing campus in Kastanos. And just think about this for a minute. While in the midst of extremely challenging business conditions and a three years long global pandemic, the Freight Car America team envisioned and undertook to complete a state-of-the-art manufacturing campus in Mexico, brought it online on time, transferred all US rail car manufacturing operations to Mexico, and is now generating the best manufacturing margins in the business, and I might add by a substantial amount. With the completion of our world-class, fully functional facility, we can readily produce 4,000 to 5,000 cars per year without strain and expect to maintain industry-leading manufacturing margins. As we defined in prior calls, to us, world-class means achieving the best quality, best efficiency, best on-time delivery, while preserving the flexibility to produce different types of products. During the quarter, we reached another key milestone by delivering on our planned exit from the leasing part of the business and successfully selling off the majority of our remaining lease fleet which included just over 400 cars. Furthermore, as we have discussed during the last couple of calls, in the quarter we completed the transaction with Pacific Investment Management Company that converted our term loans into preferred shares. These two steps, the exit from leasing and the financing transaction, marked significant progress as we worked to further strengthen our financial position. The debt on our balance sheet has been reduced to that of just the ABL, which gives us much greater financing flexibility for the future and allows the team to remain focused on core growth initiatives. So in total, the second quarter represented important progress in driving revenue growth, margin expansion, and strengthening our balance sheet. At this point, I'll address our guidance for the year. We are raising our previously stated full year adjusted EBITDA guidance range from between $15 million and $20 million to a range of between $18 million and $22 million. In addition, we are reaffirming our fiscal 2023 guidance for revenue to be in the range of between $400 million and $430 million, which is based on forecasted production of between 3,400 and 3,700 rail cars. I'll now turn the call over to Matt for a few commercial comments.