Freightcar America, Inc.

Welcome to Freight Car America's second quarter 2024 earnings conference call. At this time, all participants are in listen-only mode. For those of you participating on the conference call, there will be an opportunity for your questions at the end of today's prepared comments. Please note that this conference is being recorded. In order to replay the conference call, we 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 Riverrun Investor Relations.

Thank you and welcome. Joining me today are Nick Randall, President and Chief Executive Officer, Mike Reardon, Chief Financial Officer, and Nat Ton, Chief Commercial Officer. I'd like to remind everyone that statements made during the 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 description of certain business risks. some of which may be outside of control of the company and 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 earnings release issued yesterday afternoon. Our earnings release for the second quarter of 2024 is posted on the company's website at FreightCarAmerica.com, along with 8K, which was filed yesterday after market. With that, let me now turn the call over to Nick for a few opening remarks.

Thank you, Chris. Good morning, everyone, and thank you all for joining us today. As you may recall, over the past five years, we have undergone substantial transformative initiatives to diversify our product offering and deepen our existing customer relationships. all while strategically repositioning our operations at a significantly reduced cost base. For the first half of the fiscal year, we are showcasing just that as we reap the benefits from our comprehensive transformation. We are delivering world-class operations and commercial excellence as we meet the needs of our customers' requirements. Additionally, we are further developing our presence as a premier manufacturer of rail cars with a proven runway for growth as we continue to execute on our strong momentum. In terms of our second quarter results, revenues grew 66% over the prior year on deliveries of 1,159 rail cars, and we achieved a record adjusted EBITDA of 12.1 million at our new facility. As a reminder, this comes off the heels of a strong first quarter in which we achieved a record 99% growth in revenue and 192% growth in adjusted EBITDA. Through the first half of the year, we have captured historically high levels of orders and inquiries, as well as made advancements in expanding our market share in line with our ongoing commitment to driving profitable growth. Industry data confirms that we are growing our market presence in the rail car segments that we operate in, including covered hoppers, which represents the largest product segment of car types in this space. We have also made significant progress in broadening our product offerings with a major multi-year tank car conversion order, which is a vital component of our next phase of growth. Finally, we recently celebrated the milestone of shipping our 10,000th rail car out of our Castaneos facility, a remarkable milestone that highlights our vision to be the premier manufacturer in the industry. As we have just discussed before, rail equipment demand remains healthy with stable industry dynamics providing confidence in our ability to capture consistent inquiries and orders within our target market. This spans across our diversified portfolio and flexible production lines that provide us with the ability to execute in any market environment. In terms of order activity for the quarter, We received net orders of 2,916 units valued at $285 million, the highest we have seen since the fourth quarter of 2014. With replacement rates projected to be close to 40,000 cars for the full year, a stable industry demand outlook gives us continued confidence in our business model and our ability to further grow our pipeline. I would like to now expand on an exciting update that I mentioned earlier regarding our product offerings. With our long legacy in the rail car conversion space and expanded manufacturing capabilities, we were able to secure a significant multi-year tank car conversion order. This expands our portfolio of offerings even further and establishes off-putting within the tank car space. This multi-year contract is a significant stepping stone for us and aligns with our strategic vision to further elevate our market presence, meet our customers' needs, and further optimize our production capacity for large-scale projects. The second quarter also marks the third consecutive quarter of shipping over 1,000 units from our Castaneos facility. This demonstrates that the strategy and effectiveness of our operations are in full effect and provides confidence in our ability to realize our capacity thresholds to produce between 4,000 and 6,000 rail cars per year. Looking ahead, we remain committed to sustaining this momentum by capturing quality orders with a sharp focus on maintaining our commercial discipline. This means delivering the best value proposition tailored to individual customer needs, providing exceptional attention and service, while striking the right balance of backlog, quality of earnings, and order quantity. I would like to conclude my comments by touching on our outlook for the remainder of the year 2024. With this quarter's impressive performance and strong order momentum, we are confident in our market position through the back half of the year and are raising our guidance accordingly. We are raising our forecasted revenue to between $560 million and $600 million, up approximately 62% year over year at the midpoint of the range. This expectation is based on expected deliveries, which we are also raising to between 4,300 to 4,700 rail cars, an increase of approximately 48.9% at the midpoint of the range. We are also raising our forecasted adjusted EBITDA guidance to between $35 million and $39 million for the full year, this representing the year-over-year increase of 84.1% at the midpoint. Finally, we continue to expect positive operating cash flow for the third consecutive year. As we move forward, our focus remains on enhancing our robust product portfolio, gaining market share both with new and existing customers, and in continuing to leverage our proven manufacturing platform to drive sustained growth. We are well positioned to benefit from the current industry trends and executing our strategic initiatives with precision. With the solid foundation we have built and confidence in our ability to scale and seize new opportunities in the market, our unwavering commitment to innovation, quality, and customer satisfaction will guide us as we create value through continued growth. With that, I will next turn the call over to Matt to discuss the market and then to Mike for more detail on our financial results.