Freightcar America, Inc.

Greetings and welcome to Fight Car America third quarter earnings conference call. At this time, all participants are in a listen-only mode. A brief 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, Victoria Roseman in Mr. Relations, Thank you, Ms. Rosemond. You may begin.

Thank you and welcome. Joining me today are Jim Mayer, President and Chief Executive Officer, Mike Riordan, 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 freight car 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 material defer 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 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 opening remarks.

Good morning, everyone, and thank you all for joining us today. Freight Car America delivered another quarter that highlighted our team's operational and commercial discipline, contributing favorably towards our continued focus on enhancing our quality of earnings. This comes despite headwinds in the quarter related to the halt of railroad services in Mexico due to migrant issues that limited shipments, as well as three large line changeovers, which together muted our top line. Revenue generated during the quarter decreased 28% year over year to $61.9 million on deliveries of 503 rail cars, both lower than expected and both simply timing related. At the same time, we expanded our gross margin profile by an additional 30 basis points from last quarter, achieving an industry leading 14.9% during the third quarter. Adjusted EBITDA increased versus the same quarter of the prior year to $3.5 million or approximately $7,000 per rail car. I am extremely pleased to see the fruits of our labor from the last several years begin to materialize, particularly in the face of a more muted top line driven by the aforementioned headwinds. The operational groundwork we laid and the commercial groundwork we continue to lay is, we believe, spot on for this company. Most importantly, while we do not expect progress to be achieved in a perfectly straight line, we do believe there is ample room to continue to improve the quality of our business vis-a-vis gross margin and profitability per rail car. This belief along with us now being in a position to scale the business, creates the potential we have been working towards. The completion of the fourth production line at our Castano's manufacturing campus during the third quarter signifies the long anticipated completion of the facility, and all of us are beyond pleased and beyond proud. Freight Car America now has the capacity to seamlessly manufacture annual volume ranging from 4,000 to 6,000 rail cars across four production lines. We are now starting up this fourth line, and in yet another milestone moment for the company, we will see the first deliveries produced from this line in the fourth quarter. When we speak about operational excellence, for us, It is invariably measured in gross margin and profitability per rail car. To put a finer point on operational excellence and what it means to us, we are talking about rail car design and the ease in which our rail cars can be manufactured, supply chain management and achieving the right levels of vertical integration, the quality and flexibility of our tooling, jigs, and fixtures, And of course, how we train, empower, and mobilize our nearly 2,000 production team members. This is the bedrock of our company and represents continued, and we believe, significant opportunity in an industry with deep traditions. Complementing the company's growing and successfully differentiated position and operational excellence, is our concurrent work to establish a unique commercial position. It is important that we begin to share another and equally important undertaking in the remaking of Freight Car America, and that is where and how we fit in an industry dominated by a very small number of much larger competitors. It is true that we now have a diverse portfolio of products, some of which have achieved market-leading positions. Our goal with respect to our product offering is simple, and that is to offer the products that customers want most and not simply as an alternative consideration or as part of a larger bidding process. Like our operations, our products are under constant review and are constantly being improved. Continuous improvement is not simply a factory concept, It applies equally to engineering and product development. It is also true, we believe, that as a smaller company, we are better equipped to invest all the time required between our commercial and technical teams and current and prospective customers in order to deliver product solutions that best match each customer's specific needs. We are not a one-size-fits-all manufacturer. Our customers make substantial and long-term investments when buying rail cars, and our goal every time is to give them the exact car they want. Rarely is this an off-the-shelf design. This level of customization is supported by the gains generated from our operational excellence and, we believe, contributes favorably to our margins. Thirdly, our team has worked incredibly hard to align our business with customer groups that value the aforementioned along with the fact that we do not compete on leases. Our approach is to partner with instead of compete with this very important group of customers. Fourthly and finally, We will continue to focus on providing what we believe to be the optimal balance between backlog and readiness to respond to customer needs. Backlog is critical to planning, but we are mindful of the drawbacks when acquiring backlog in quantities so large that it takes years to fulfill, or backlog acquired as a result of large discounting practices. This is not our business model. A perfect order book for us is one that is long enough to allow for well-managed material planning and production scheduling, and short enough to allow us to be responsive to our customers' needs. So in summary, our commercial excellence is focused on having the best value proposition for individual customer needs, attention and service, and maintaining the right balance of backlog quality and quantity. At this point, I would like to address our guidance for the year. Due to our continued concerns over rail service disruption, we are lowering our fiscal 2023 guidance for revenue to be in the range of $365 million to $380 million, which is based on a forecasted production of 3,150 to 3,300 rail cars. This is a shift in timing with some of our planned third quarter revenue now shifting into the fourth quarter and some of our fourth quarter revenue shifting into the first quarter of 2024. Importantly, our full year adjusted EBITDA guidance range remains unchanged. We are reaffirming our expectation for full year adjusted EBITDA to be between $18 million and $22 million. I will now turn the call over to Matt for a few commercial comments.