RAIL

Image source: The Motley Fool. Monday, Aug. 3, 2026 at 10:00 a.m. ET President and Chief Executive Officer - Nicholas Randall Chief Financial Officer - Mike Riordan Chief Commercial Officer - Matt Tonn Operator: Thank you. Welcome to FreightCar America's Second Quarter and Fiscal Year 2026 Earnings Conference Call. [Operator Instructions] Please note this conference is being recorded. An audio replay of the conference call 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'Dea ] with [ JBG Advisory ]. Unknown Attendee: Thank you and welcome. You're going to meet today are Nick Randall, President and Chief Executive Officer; Mike Riordan, Chief Financial Officer; and Matt Tonn, Chief Commercial Officer. I'd like to remind everyone that statements made during this conference call related 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. You are directed to FreightCar 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 second quarter of 2026 is posted on the company's website at freightcaramerica.com along with our 8-K, which was filed after market close yesterday. With that, let me now turn the call over to Nick for a few opening remarks. Nicholas Randall: Thank you, Chris, and good morning to everyone. Thank you for joining us today. The second quarter demonstrated important progress across 3 areas of our business. First, we delivered 1 of the strongest commercial quarters in FreightCar America's recent history, with an exceptional order intake, significant sequential backlog growth, and continued expansion of our customer base. Second, we continue to build a broader and more durable business through organic aftermarket growth and a second acquisition in the aftermarket space. 3rd, we completed an important structural optimization of our Castaños manufacturing operation, locking in the productivity gains achieved over the past 2 years and positioning the business to operate at a meaningfully lower cost base going forward. Against those positive developments, the production ramp we anticipated for the second quarter began later than originally planned. Customer demand was deferred rather than canceled, but the timing shift means that a portion of the units previously expected to be delivered in 2026 will now move early into 2027. As a result, we are updating our full-year delivery and revenue outlook. We believe the second quarter represents the low point of the year for adjusted EBITDA and margin. Production is scheduled to increase meaningfully during the second half, with the significant majority of our planned second-half deliveries supported by our firm backlog. And we will begin realizing the benefits of the structural operation actions completed during the quarter. The key point is that the lower 2026 delivery outlook does not reflect a weakening of our commercial position. In fact, the opposite is true. We booked approximately 3,000 units during the quarter, including approximately 2,600 new railcars. These new car orders represented roughly 45% of the total industry new railcar orders during the period, the largest quarterly share of industry orders in recent history. That activity was anchored by a milestone multi-year award for 1,900 railcars, with deliveries extending through 2028. The orders came from both repeat customers and first-time buyers and covered each of our principal market segments. That breadth is important. It demonstrates that our customer reach is expanding while our established relationships continue to deepen. Customers do not make multi-year commitments of this scale unless they have confidence in the supplier's products, responsiveness, and the ability to execute. We have consistently said that we must earn the right to win every order, and this quarter, our team did exactly that. We ended the period with a backlog of 3,972 units valued at approximately $344 million, compared with 2,058 units valued at $156 million at the end of the first quarter. Backlog units increased approximately 93% sequentially, while backlog value increased 121%. The backlog is diversified across new railcar builds, conversions, and retrofit programs, with deliveries extending through 2028. It provides meaningful visibility through the balance of 2026 and increasingly into 2027 and 2028. This performance is particularly significant given the broader market environment. Industry demand remains well below long-term replacement requirements, with annual deliveries expected to remain below 25,000 units compared with normalized replacement demand of approximately 35,000 to 40,000 units per year. Despite that environment, we continue to gain ground by offering customers what they value. We have not built our strategy around being the lowest price producer. We are focused on being the most valuable and responsive producer, combining quality, engineering capability, flexible manufacturing, and reliable execution. For certain products and available production slots, our manufacturing model allows us to move from order placement to delivery in as little as 9 to 12 weeks. That responsiveness matters to customers whose requirements can change quickly and who increasingly value certainty of execution. Alongside the strength of our new car order intake, we continue to expand our aftermarket platform. Aftermarket revenue grew 13% year-over-year, reflecting both continued organic growth in parts and components, and the contribution from our first acquisition in this space. Following the end of the quarter, we completed our second aftermarket transaction in less than 1 year. These businesses broaden our parts and components offering, expand our customer relationships, and deepen our involvement across the railcar lifecycle. This is a deliberate element of our strategy. Aftermarket demand is more repeatable and less cyclical than new railcar manufacturing and generally carries a stronger margin profile. It allows us to serve customers beyond the initial manufacture of a railcar and creates additional opportunities across parts, repairs, conversions, and ongoing fleet support. We are building this platform through a combination of organic growth and disciplined acquisitions. We believe it will become an increasingly meaningful contributor to revenue, earnings, and cash flow over time. Turning to operations, we completed an important structural optimization during the quarter. Over the past 2 years, our True Track operating system, continuous improvement culture, and targeted investments in automation and vertical integration have increased manufacturing productivity by approximately 50%. Those gains have fundamentally changed how we build railcars and how many resources are required to support a given level of production. During the second quarter, we used a period of lower production activity to complete a concentrated realignment of our Castaños footprint, staffing model, and operating resources around that new productivity baseline. These actions were not a reaction to a single quarter or simply a response to lower near-term volumes. They were the next step in capturing and institutionalizing the benefits of the operational improvements delivered over the past 24 months. Completing the work during the slower production period allowed us to make the changes efficiently and less disruptive to our customer deliveries than would have been possible during a peak period of output. The realignments resulted in $2.2 million of costs during the quarter and is expected to generate approximately $12 million of annualized structural savings. Importantly, we preserved our installed production capacity, principal manufacturing lines, and the critical skills and capabilities required to increase output as demand recovers. The result is a more efficient operating structure that improves the economics of each railcar we produce while maintaining the ability to scale. As volumes increase, we expect the combination of a lower structural cost base and improved fixed cost absorption to create stronger margins and generate greater operating leverage across the cycle. The benefit begins in the third quarter and extends well beyond the current year. Cash generation also remained a strength during the quarter. We generated $12.1 million of operating cash and $11.3 million of free cash flow, an increase of 43% year-over-year. Stepping back, the freight car industry remains in a cyclical trough, but the underlying fundamentals continue to build. Railcars are being scrapped faster than they are being ordered, the average fleet continues to age, and traffic growth is broadening across many of the commodity segments we serve. Prolonged periods of underinvestment have historically been followed by stronger replacement demand. We continue to believe that the normalization towards annual demand of approximately 35,000 to 40,000 railcars is a question of timing rather than fundamental need. When that recovery develops, FreightCar America will enter with available capacity, a more efficient operating footprint, a broader product portfolio, a growing aftermarket platform, and a substantially stronger customer and market position. In the meantime, we are not building our plan around waiting for the cycle to improve. Our priorities for the second half are clear. We will convert our backlog into profitable deliveries, increase production and restore margin performance, realize the benefits of our lower structural cost base, continue scaling our aftermarket platform, and execute the initial phase of our tank car retrofit program. The opportunity ahead of us is significant, but the focus is now execution. We have the orders, the capacity, the operating improvements, and the commercial momentum. Our responsibility is to convert those advantages into stronger earnings and cash flow through the balance of 2026 and into 2027. With that, I'll turn it over to Matt to discuss the market environment and our commercial performance in greater detail. Matthew Tonn: Thanks, Nick, and good morning, everyone. I'll offer some perspective on the market environment and our commercial activity during the quarter. Industry order activity remained muted in the second quarter, with new railcar orders across the industry totaling approximately 5,800 units compared to approximately 6,200 units in the prior year period, as customers continued to evaluate timing of new railcar acquisitions. Despite the challenging market environment, our commercial performance stood out. Our team captured approximately 45% of all industry new railcar orders in the quarter, and excluding tank cars, our share of the addressable market was approximately 56%, significantly above our historical market share levels for order intake in the quarter. Our disciplined commercial strategy is centered on earning long-term customer trust through transparent engagement, collaborative product development, operational expertise, and reliable execution. These capabilities continue to support repeat business, strengthen customer relationships, and enhance the quality of our order book. Our success in the covered hopper market is a strong example of how our new product strategy is creating value. Covered hoppers represent the largest railcar segment in the North American fleet, making this an important strategic market for FreightCar America. Over the past 4 years, our focused commercial strategy, combined with innovative engineering and close collaboration with customers, has resulted in new and enhanced railcar designs that improve operational efficiency, reduce lifecycle operating costs, and address evolving customer requirements. As a result, we have increased our market share, demonstrating the strength of our differentiated approach and continued market acceptance. However, this is only part of the story. Conversions, retrofits, and other specialized programs supplement our new car activity and give us a second avenue for growth. This kind of customized work takes engineering expertise and manufacturing flexibility, and those capabilities continue to differentiate us in the market and help support our strong order momentum while the new car market recovers. The underlying demand picture continued to improve through the second quarter. 16 of the 20 carload segments tracked by the Association of American Railroads showed year-over-year growth, up from 13 segments in the first quarter and the broadest gains in 5 years. Carload traffic excluding coal through the first half was the highest since 2008, and June set an all-time record for intermodal volume. Grain and grain mill shipments posted some of the strongest gains, consistent with the activity we see in our covered hopper pipeline. These trends support the replacement demand that continues to build as fleets age. Looking at the broader picture, FreightCar America continues to execute well in a challenging market. We are gaining share in new railcar orders, while our conversion, retrofit, and specialized manufacturing business provides a stable source of earnings and customer engagement. Although industry order activity remained below historic levels during the quarter, we are encouraged by customers increasingly moving from inquiry to order, supported by a healthy, diversified pipeline across multiple railcar segments. As industry demand returns toward long-term replacement levels, we believe our differentiated product portfolio, disciplined commercial execution, and deep customer relationships position FreightCar America for success while delivering sustainable, profitable growth. With that, I'll turn the call over to Mike to walk through the financials in more detail. Michael Riordan: Thanks, Matt. Good morning, everyone. I'd like to begin with a few second quarter highlights. Revenue for the quarter was $113.1 million compared to $118.6 million in the second quarter of 2025, and we delivered 927 railcars compared with 939 units in the prior year period. The year-over-year comparison primarily reflects production timing ahead of the planned second-half ramp that Nick described. Aftermarket revenue increased 13% year-over-year, driven by organic growth in parts and components, together with the contribution from our recent acquisition. We expect the aftermarket to remain an increasingly meaningful contributor to our profitability, cash flow, and long-term growth. Gross profit was $6.2 million, representing a gross margin of 5.5%, compared with gross profit of $17.8 million and a margin of 15% in the prior year period. The decline primarily reflects lower delivery volumes and the resulting reduction in fixed cost absorption, as well as $2.2 million of costs associated with the workforce realignment completed during the quarter. Turning to that realignment, the actions we took align our cost structure with the productivity improvements achieved across our manufacturing operations over the past 2 years. We expect the program to produce approximately $12 million of annualized cost savings, with benefits beginning in the third quarter and building toward the full run rate thereafter. Importantly, these savings are structural at current production levels and do not limit our ability to increase output as demand recovers towards long-term replacement levels. SG&A expenses were $10.5 million compared with $10.1 million in the prior year period. We expect SG&A to remain relatively consistent during the second half of 2026, creating favorable operating leverage as our backlog converts into meaningfully higher deliveries compared with the first half of the year. We reported a net loss of $30.1 million, or $0.94 per diluted share. This result included a $24.9 million non-cash loss associated with the remeasurement of our warrant liability, reflecting the appreciation in our share price during the quarter. Excluding non-cash and other adjusting items, adjusted net loss was $0.8 million, or $0.02 per diluted share, compared with adjusted net income of $3.8 million, or $0.11 per diluted share, in the prior year period. During the quarter, a shareholder exercised a substantial portion of its outstanding warrants. As a result, the warrant liability declined from $119.4 million at March 31 to $14 million at quarter end, and stockholders' equity became positive at $36.2 million. The warrant exercise did not result in incremental dilution to our reported earnings per share because the underlying shares had already been included in the weighted average share count used to calculate basic and diluted EPS since the warrants were issued. Following the exercise, our actual common shares outstanding are now much more closely aligned with the share count reflected in our EPS calculation. Additionally, the significant reclassification from liability to equity accounting should substantially reduce the future quarterly earnings and balance sheet volatility associated with remeasurement of the remaining warrant liability. Adjusted EBITDA was $1.2 million, representing a margin of 1%, compared with $9.3 million and a margin of 7.8% in the prior year period. The decline was primarily driven by the lower deliveries and fixed cost absorption, consistent with the production timing discussed earlier. We expect profitability to improve sequentially as deliveries increase through the balance of the year and the benefits of our cost savings program begin to take effect. Cash generation was a notable strength during the quarter. Cash flow from operating activities was $12.1 million, compared with $8.5 million in the prior year period. Free cash flow was $11.3 million, an increase of 43% year-over-year, and capital expenditures were $0.7 million. We ended June with $63 million of cash and cash equivalents and have reduced total debt by approximately $7.3 million since year-end. For the full year, we continue to expect capital expenditures of $7 million to $10 million, including approximately $4 million to $5 million in maintenance capital and the completion of our previously announced tank car manufacturing investments. Turning to capital allocation, we completed the acquisition of Southern Parts & Equipment in July, representing our second aftermarket transaction in less than 1 year. The acquisition fits squarely within our disciplined investment framework by adding capabilities adjacent to our core rail markets, and we expect it to be immediately accretive. With the production capacity required to support future railcar growth already in place across our existing manufacturing footprint, we are positioned to direct capital towards opportunities that increase the durability of our revenue, earnings, and cash flow. Moving to our full-year outlook, we have revised our 2026 guidance to reflect the later start to the second-half ramp, with some deliveries now expected to shift into early 2027. We now expect railcar deliveries of 3,500 to 3,900, revenue of $410 million to $460 million, and adjusted EBITDA in the range of $36 million to $45 million. Importantly, this change is isolated to the timing and mix of new railcar deliveries. Our aftermarket business continues to grow and remains on plan, and the second half of the year is underpinned by orders already in our backlog. Looking ahead, our cost saving initiatives will partially offset the impact of lower full-year deliveries and improve the profitability of each railcar we produce. At the same time, the growing contribution from aftermarket continues to improve the quality and diversity of our revenue mix. These initiatives are complementary. 1 lowers our structural cost base, while the other expands our higher-value and less cyclical revenue streams. Together, they improve the underlying margin and cash flow profile of the business at current production levels, with benefits extending into 2027 and beyond. Overall, FreightCar America exits the first half of 2026 structurally stronger than it entered the year. We have a lower cost base, increased revenue visibility, a growing aftermarket platform, strong liquidity, and a cleaner balance sheet. As we move through the second half, we expect higher deliveries, improving profitability, and continued cash generation. We will remain disciplined in deploying capital across our operating segments to strengthen the business and create long-term value for our shareholders. With that, we will now open the lines for Q&A. Operator: Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] One moment please while we poll for questions. The first question is from Mark Reichman from NOBLE Capital Markets. Please go ahead. Mark La Reichman: Well, I was very encouraged with the strong order activity, so congratulations on that. What I was wondering is, if you look at your midpoint of your guidance, so that would be 3,700 railcars, which would imply at the midpoint roughly 2,196 in the second half. You've got backlog of 3,972. So I was just kind of wondering, not that the guidance is overly wide, but what gets you to the high end versus the low end? What are the variables there? Nicholas Randall: Hey, Mark, good morning, it's Nick. I'll start with this one and then Matt can help us if we need to cover any further details. So really it's a question of, we talked about how in Q2, the ramp-up was somewhat delayed from our original assumptions and some orders moved back, pushed into 2027. And it's more to do with being able to have customers who are willing to take on the same kind of support orders in 2026 so that we can really fill out that upper end. You know, it's the order backlog we've had, as you just mentioned, is pretty significant now. We've got a lot of orders. It's a question of we don't want to be in a position where we're building things too far ahead of when our customers want them. It's not good for us or the customers in that position, within an acceptable range. So the real sort of big mover on there is the orders that we get from this point to the end of the year. If customers are still willing or wanting to take them before December 31, then that will push it up towards that upper half of that guidance, if that makes sense. Mark La Reichman: It does. And then just a question for Michael on the aftermarket business. So the revenue growth was impressive at 13% year-over-year. Gross margin, you know, it was pretty much flat. So the gross margin as a percentage of revenue I think went from about 36% in the second quarter of 2025 to about 32%, 32% plus thereabouts. So we're with 32.6%, I guess. So do you think that 32.6%, is that kind of a normalized level going forward, or would you expect that as you continue to make acquisitions and grow volumes and revenue that you might see that gross margin as a percentage of revenue go down a little bit? Michael Riordan: Hi, Mark. That's a good question. I think we'll see. So historically, our aftermarket was primarily focused on the railcars and coal replacement parts, and that's now expanded pretty significantly. In terms of a long-term rate, I think that 32% to 33% is a good overall rate. Some of the differences quarter-to-quarter in the aftermarket is the difference between the new segments we're getting into with distribution and replacement parts for the coal fleet out there. So you will see quarter-to-quarter, the margin might change a little bit, 1 quarter higher than the other, depending on mix. But a good long-term rate would be that 32%, 33% for the next 2027, 2028. Mark La Reichman: And then the last question is just a question for Nick on the tank plan, you know, entry into the tank car business. Now that you have those Section 232 tariffs on tank cars for Mexico, I think Greenbrier has mentioned that on their conference calls. And it may not be as onerous, you know, depending on what parts actually the tariff applies to. But how does that influence your thinking in terms of moving into the tank car business? Nicholas Randall: Well, it's certainly something we look at, Mark. It's a good question. You know, we've got a list of 2 sections, 2 ways to answer this. 1 is we have the retrofits, which are imminent, Q3, Q4 onwards into 2027. So they are not wrapped up in that same 232. So that's 1 thing to avoid. And then our entry into the new tank car market, we've always said sort of late 2027 into 2028 and beyond would be when we would work through that to release it to the market to make shipments. So we've got some time to fully review what happens with those 232s and how they're calculated. It's still something of significant importance. So just a general overview. So generally in a normal year, tank car demand is about 10,000 to 11,000 units across North America, and there certainly isn't that capacity installed in the United States to fulfill 10,000 to 11,000. So the question is going to be, you know, the demand stays there, likely, yes, and you know the question of where can they be manufactured and what tariff rates would they apply and who would pay those tariffs. So we will continue to work through that. When it comes to the things we're planning to do in the near term, none of the processes that we've done for the retrofit program are in jeopardy, so they'll continue as we've always said. And then we don't have to make any key commitments on capital for a while yet to still support those original dates. So we'll keep reviewing that. There's a couple of things that may or may not shake out. But certainly we'll work with customers as always. Our job is to fulfill the demand of the customers. Whether they get tariffed or not will be a discussion we'll have with those individual customers at the time. But it certainly doesn't change our thinking, Mark. We're still planning to confirm the tariff, figure out manufacturing operations with the engineering required and the approvals required because they're kind of lower cost. We'd obviously make that review and decision before any serious commitment to capital, but that will be quite some time yet before we do that. So we will keep getting ourselves smarter up until that point, and then we'll have to make a call at that point. But that won't be for another 12 months, 13 months of the year at least before that commitment needs to be made. Mark La Reichman: Meanwhile, you're experiencing strong order activity. You're becoming leaner with the productivity improvements, and so margins should benefit from that. Okay, and like you said, you kind of push any capital commitments. Maybe that's kind of the flip side is you kind of avoid that if you choose to delay. Is that the right way to think about it? Nicholas Randall: Yes, I mean, there's a number of unknowns. What happens with the appendix on the 232 as to whether tank cars remain there, yes or no, and is that going to continue over multiple years, and let's assume it does stay in place. And then there's the whole point of, you know, where you source all the materials from. So there's quite a number of complex nuances to look at. Either way, we'll be fully prepared to go through them, but from an outlook and a multi-year outlook and sort of what we said about entering the tank car market, it's just another thing to consider. It certainly doesn't change our thinking that it's an attractive market. We think we've got great products, we've got a great support of a great engineering and manufacturing process, a great commercial process. So, you know, we want to meet what customers need and we'll figure out how to be compliant and still fulfill customers' needs at the same time. So that's how we typically thought about it. You know, we've navigated through a lot of tariff questions and concerns over the last 2 years or 3 years, 2 years now. So I don't see it as a reason to stop that thought, if that's the question. It's another thing to think about as we think through. But right now, we'll continue to make the same progress we were planning to make. And then when we get to those large commitments at some point in the future, we'll have better-prepared thoughts at that time. But nothing's slowing down at the moment, Mark. Nothing's slowing down at the moment for it. Mark La Reichman: Right. Well, that's very helpful. Thank you very much. Nicholas Randall: No problem. Thank you. Operator: The next question is from Brendan McCarthy from Sidoti. Please go ahead. Brendan Michael McCarthy: I wanted to start off on the delivery shift underpinning the new guidance. Is this simply customer preference here? And ultimately, why do you think customers are preferring to delay deliveries at this point? Nicholas Randall: Hey, Brendan, it's Nick. Yes, it's making sure we meet our customers' expectations, if you call it customer preferences, being able to, you know, we don't want to be in a position where we're pre-building too many cars with an order behind it but before a customer needs it because it ends up with congestion and costs to store things. So we looked at making sure that we could build, as we would normally, to the demand schedules of our customers. And that's typically how we run our supply chain processes. You know, it can take up a lot of cash in inventory if we start building too far ahead of when customers truly need cars. So that's really what was the driver for being able to take orders from our order book and make it through the shipping in Q3, as opposed to building and shipping in Q2 with a slight delay. Brendan Michael McCarthy: That makes sense. I appreciate the detail there, Nick. And when you look out to these deliveries shifting into early 2027, I guess what really gives you confidence that those deliveries will occur in early 2027, or do you think there's a chance they get further kind of kicked down the road to 2028? Nicholas Randall: I doubt that we kick 2028. So these are the ones where, you know, when we talk about 2027, it's the difference of someone wanted to take something in December versus January. It's not a huge shift, but 30 days or 60 days can make a difference at the end of the year. And that's what you see in Q2, that the delivery dates are measured in a deviation of days, not quarters. But when that happens and it rolls over past December 31, we just have to be conscious that if a customer doesn't want something in 2026 and they want it in 2027 because of their own needs, we just have to be respectful of that within a reasonable limit. So it's not something that I think there's a risk that we've got booked orders and all of a sudden they shift by quarters. That's not the risk we were managing through. It's really about making sure that we don't have things built in month 1 that are not going to be available to ship them month 2 and we just tie up a lot of capital for 30, 60 days that we don't want to do. Brendan Michael McCarthy: I understand. That's very helpful to understand. And then, you obviously have really strong order intake in the quarter. I think that's great to see. But did you have to make any pricing concessions there to win these orders? Or do you anticipate the same kind of mid-teens gross margin profile on the orders that are in the backlog at this point? Nicholas Randall: So I'll answer in the same way as, I mean, our strategy is not to be the cheapest 1 out there. You know we build an engineered, tailored car to the needs of our customers. Some of these multi-year orders, because we've carefully configured our product to really maximize the value for our customers, so we really don't have to take massive pressure on pricing discounts or various things that you alluded to. So our key strategy is to meet the value proposition of our customers and to truly understand what they need. We've talked many times about the benefit of being a purpose builder is that we can have a level of intimacy with our customers that we can truly expose what the pain points are and design and configure our product around those pain points, thus creating value for the end user and the customer. That's, we continue to do that and we will continue to do that. So that just puts us in a position where we're not in the position where we're going to try and be, you know, price discounts or any of those sort of related activities. So in a second to your question, yep, as the higher volumes go through the second half and then as we look out to the future years if that volume returns, then yes, I would fully expect with the improvements we've made on operations and the productivity lock-in, plus the volume returns to sort of a normal build rate for us, then yes, you'd expect those margins to quickly get back to those lower teens and above across our product mix. Brendan Michael McCarthy: That makes sense. Thanks, Nick. And last question for me, just on the aftermarket segment. I know I think it's only been roughly 10% of total revenue at this point through the first half of 2026. But it's a highly fragmented industry. Just curious as to how large you think that you're able to grow this business long term? Michael Riordan: Hi, Brendan. Yes, so I don't think we're going to comment on the long-term target yet, but I will say we do view this as a meaningful growth platform for us, as I mentioned, and with Castaños pretty well situated when we look at capital allocation, this is an area that's very attractive to us to continue to grow and generate meaningfully higher revenue and earnings and cash flow as a percentage of the consolidated entity. Brendan Michael McCarthy: Understood. Thanks, Mike. Thanks, Nick. That's all from me. Nicholas Randall: Thank you. You're welcome. Operator: [Operator Instructions] The next question is from Aaron Reed from Northcoast Research. Please go ahead. Aaron Reed: Great, thank you. Yes, I was hoping to get a little more color in terms of, you know, obviously we're looking at more of the trough and the overall, you know, railcar demand. I was wondering if you had any better idea in terms of cadence of what that recovery might look like in terms of, is it something to be expected a little bit more gradual, a little bit more sharp, you know, as things progress, what's it looking like to you right now? Matthew Tonn: Aaron, Matt Tonn. I think when you look at the current environment, we still see a demand environment that's tied very closely to railcar retirement. We don't see that changing in the near term. This year looks to be total order activity and deliveries in the 20,000 to 23,000 range. But as we look ahead at when railcars are going to expire, due to the 50-year age limit and then overall demand approaching 30,000 in 2027 and then upwards of 40,000 in 2028. So all of the markers are there for a return to the replacement demand of that 35,000 to 40,000 railcars just based on 2 successive years or 2 past years of sub-replacement demand deliveries along with cars scrapping at a higher rate than new cars being delivered. It's not sustainable to maintain operations for the shipping community. Aaron Reed: Great. That's helpful. And then 1 other question on the tank car retrofit. Right now, looks like you have a pretty good visibility into the orders right now. Do you expect any additional tank car demand to come from more retrofits or new builds? Do you have any idea which way that might fall when demand continues to come in? Matthew Tonn: On the retrofit side, we think we're at the tail end of the demand of taking the DOT-111s to the DOT-117Rs. A lot of those cars have already been converted and we think we're at the tail end of that. Moving forward, as Nick had mentioned, we will be evaluating our entry into the marketplace, which is really a late 2027, early 2028 discussion. Operator: The next question is from Mark Reichman from NOBLE Capital Markets. Please go ahead. Mark La Reichman: Yes, I just wanted to follow up on your market share gain. You know, you captured 45% of the industry new railcar orders during the quarter, which is pretty impressive. You know, according to the Railway Supply Institute, orders were 5,826 in the second quarter and deliveries were 5,527. So I was just wondering, you know, you've had kind of this history of gaining market share, but the second quarter, I guess, clearly was influenced by you had that 1,900 multi-year order from a key customer, and then you had 3,000 orders in the second quarter. 2,600 of those were for railcars, I guess. I mean, what do you see, I mean, as your competitive advantage here? I mean, is it, you just have, was it just a low order quarter for the industry, and you just happened to snag a really big order? Or do you see, you know, is this kind of a good signal, you know, that the market share gains could actually accelerate? Just some color there if you can. Nicholas Randall: Hey, Mark. So I'll start with, I think, thank you for highlighting that Q2 order intake was a good signal for us. It's not the first time we've seen a reasonable increase in market share. So I would characterize it as that we've been growing market share on order intake consistently quarter-over-quarter for a number of quarters now. It's more of a buildup and more of a testament to the credibility of that buildup. I'll turn over to Matt to talk about some of the things we do commercially, but just to reinforce the same question that Brendan asked about pricing, we truly take our commitments to creating value for our customers seriously, as in from the first contact of our commercial and engineering leads, right through to the production, manufacturing, and shipments of the products to the customer's needs on time, in full, high-quality products. So I think it's being able to repeatably deliver what the customers want and when they want it, and they recognize that as they get that service, that, you know, looking at future orders and repeat orders, why would you sacrifice that, given that you've had that experience from FreightCar America? But Matt will talk a bit more in detail because obviously he's the commercial lead or the tip of that spear leading that charge for us, Matt. Matthew Tonn: Yes, obviously Q2 was a very strong quarter for us, but I would point out that our customer engagement and how we win has been tied to the value that we create for our customers and truly understanding specific operational needs. That's sort of how we win, not sort of how we win. It is how we win. And when we look at our activity and market share growth over the course of the last couple of years, just looking at 2022, we were about 5% of the market. And every year since then, we have grown our market share. And looking at year-to-date, including Q1 and Q2, we are over 27% of order intake. So for the last 4 years, despite a declining overall market of demand, we continue to increase our market share year-over-year, and it is because of how we engage with customers, the collaboration from an engineering perspective, the ease of doing business, and an overall commitment to excellence and on-time delivery. Those are the things that differentiate us. Nicholas Randall: And then, Mark, just to hammer that, as the market migrates back to its normal sort of 35,000 to 40,000 units a year, we fully intend to continue to take the same approach and be able to defend market share by the value proposition that we have rather than price. Mark La Reichman: Well, that's a very good point because now you've got leverage to growth in the overall market when you've been growing in kind of a down market. So, well, that's really helpful color. I very much appreciate it. Nicholas Randall: You're welcome. Thank you. Thanks, Mark. Operator: This concludes the question-and-answer session as well as today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a great day. Before you buy stock in FreightCar America, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and FreightCar America wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $399,832!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,374,595!* Now, it’s worth noting Stock Advisor’s total average return is 968% — a market-crushing outperformance compared to 215% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 10, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends FreightCar America. The Motley Fool has a disclosure policy. FreightCar America (RAIL) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Freightcar America, Inc.? Here are five stocks we like better. Orders and backlog surged: FreightCar America booked approximately 3,000 units in the second quarter, including a multiyear 1,900-car award. Backlog nearly doubled sequentially to 3,972 units valued at about $344 million. Profitability weakened: Revenue fell to $113.1 million, while adjusted EBITDA declined to $1.2 million from $9.3 million a year earlier due to lower deliveries, reduced fixed-cost absorption and $2.2 million in restructuring costs. 2026 outlook was reduced, but savings are expected: The company now forecasts 3,500–3,900 deliveries, $410–$460 million in revenue and $36–$44 million in adjusted EBITDA. A Castaños restructuring is expected to generate approximately $12 million in annualized savings beginning in the third quarter. FreightCar America Finally Gets On Track Freightcar America (NASDAQ:RAIL) reported second-quarter results marked by strong order intake and backlog growth, but lowered its 2026 delivery, revenue and adjusted EBITDA outlook after a planned production ramp began later than expected. President and Chief Executive Officer Nicholas Randall said customer demand had been deferred rather than canceled, with some railcars previously expected to be delivered in 2026 now scheduled for early 2027. He said the company expects the second quarter to represent the low point of the year for adjusted EBITDA and margins as production rises in the second half and cost-saving measures begin to take effect. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control FreightCar America, Inc. Is About To Leave The Station “The lower 2026 delivery outlook does not reflect a weakening of our commercial position,” Randall said, pointing to approximately 3,000 units booked during the quarter, including about 2,600 new railcars. FreightCar America said its new railcar orders represented roughly 45% of total industry new railcar orders during the quarter. Excluding tank cars, Chief Commercial Officer Matt Tonn said the company captured about 56% of the addressable market. → Financials Hit Record Highs as the AI Trade Unravels—Can They Keep Leading? Freight Car America Gets Derailed The quarter included a multiyear award for 1,900 railcars, with deliveries extending through 2028. Randall said orders came from repeat customers and first-time buyers across each of the company’s principal market segments. The company ended the period with backlog of 3,972 units valued at approximately $344 million, compared with 2,058 units valued at $156 million at the end of the first quarter. Backlog units rose about 93% sequentially, while backlog value increased 121%. → Why Rare Earth Processing Could Be the Real 2027 Opportunity Tonn said industry order activity remained subdued, with approximately 5,800 new railcar orders during the second quarter, compared with roughly 6,200 in the prior-year period. Still, he said 16 of 20 carload segments tracked by the Association of American Railroads posted year-over-year growth, while carload traffic excluding coal in the first half reached its highest level since 2008. Management continued to characterize the railcar market as being in a cyclical trough. Tonn said total industry order activity and deliveries could be in the 20,000 to 23,000 range this year, while demand could approach 30,000 railcars in 2027 and rise above 40,000 in 2028 as aging railcars are retired. The company has cited normalized replacement demand of approximately 35,000 to 40,000 railcars annually. Second-quarter revenue was $113.1 million, down from $118.6 million a year earlier. FreightCar America delivered 927 railcars during the quarter, compared with 939 in the prior-year period. Gross profit fell to $6.2 million, or a 5.5% gross margin, from $17.8 million and a 15% margin in the second quarter of 2025. Chief Financial Officer Mike Riordan attributed the decline primarily to lower delivery volumes and reduced fixed-cost absorption, along with $2.2 million in costs tied to a workforce and operating realignment at the company’s Castaños manufacturing operation. The company reported a net loss of $30.1 million, or $0.94 per diluted share. The result included a $24.9 million non-cash loss from remeasuring its warrant liability after the company’s share-price appreciation during the quarter. Adjusted net loss was $0.8 million, or $0.02 per diluted share, compared with adjusted net income of $3.8 million, or $0.11 per diluted share, a year earlier. Adjusted EBITDA was $1.2 million, representing a 1% margin, compared with $9.3 million and a 7.8% margin in the prior-year period. FreightCar America completed a structural optimization of its Castaños facility during the quarter. Randall said manufacturing productivity has increased by approximately 50% over the last two years through its TruTrack operating system, automation investments and vertical integration efforts. The company expects the realignment to generate about $12 million in annualized structural savings, beginning in the third quarter and building toward a full run rate thereafter. Randall said the changes preserved installed production capacity, principal manufacturing lines and capabilities needed to increase output as demand recovers. Aftermarket revenue increased 13% year over year, supported by organic growth in parts and components and the contribution from a previous acquisition. In July, FreightCar America completed its acquisition of Southern Parts & Equipment, its second aftermarket transaction in less than a year. Riordan said the company views aftermarket operations as a meaningful growth platform, citing their more repeatable, less cyclical revenue profile. He said the business’s long-term gross margin rate is expected to be in the 32% to 33% range, though quarterly results may vary based on product mix. For 2026, FreightCar America now expects: Railcar deliveries of 3,500 to 3,900 units; Revenue of $410 million to $460 million; and Adjusted EBITDA of $36 million to $44 million. Riordan said the updated forecast reflects the later production ramp and customer delivery timing, while the company’s aftermarket business remains on plan. The second-half outlook is supported by orders already in backlog, he said. The company generated $12.1 million in operating cash flow and $11.3 million in free cash flow during the quarter, up 43% year over year. It ended June with $63 million in cash and cash equivalents and had reduced total debt by approximately $7.3 million since year-end. On tank cars, Randall said the company’s retrofit program remains on track for activity in the third and fourth quarters and into 2027. FreightCar America continues to evaluate a potential entry into new tank-car manufacturing in late 2027 or early 2028. Randall said the company is reviewing the implications of Section 232 tariffs on tank cars from Mexico, but does not expect the tariffs to affect the current retrofit program or alter its near-term planning. FreightCar America, Inc is a designer and manufacturer of specialized railroad freight cars, offering a diverse range of products that include tank cars, open and covered hoppers, gondolas, boxcars and centerbeam lumber cars. The company supports both new car construction and the rebuilding of existing fleets, providing custom engineering solutions to meet customer specifications and industry regulations. FreightCar America also supplies aftermarket parts, maintenance services and component remanufacturing for its own fleet and for third-party car owners. Headquartered in Chicago, Illinois, FreightCar America traces its origins to early 20th-century railcar builders and began trading as an independent, publicly-listed company on the NASDAQ under the ticker RAIL following a spin-off in 2010. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Freightcar America Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Release Date: August 04, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. FreightCar America Inc (NASDAQ:RAIL) booked approximately 3,000 units in Q2 2026, capturing roughly 45% of total industry new railcar orders, its largest quarterly share in recent history. The company secured a milestone multi-year award for 1,900 railcars with deliveries extending through 2028, significantly boosting backlog to 3,972 units valued at $344 million. Aftermarket revenue grew 13% year-over-year, driven by organic growth and the contribution from its first acquisition, with a second aftermarket acquisition completed in July 2026. The company completed a structural optimization of its Castanos facility, expected to generate approximately $12 million in annualized savings while preserving production capacity. Cash generation remained strong, with $12.1 million in operating cash flow and $11.3 million in free cash flow, a 43% increase year-over-year, and total debt reduced by $7.3 million since year-end. The company's market share in order intake has grown consistently from about 5% in 2022 to over 27% year-to-date in 2026, despite a declining overall market. FreightCar America Inc (NASDAQ:RAIL) revised its full-year 2026 guidance downward due to a later-than-planned production ramp, with some deliveries now shifting into early 2027. Gross profit fell sharply to $6.2 million (5.5% margin) from $17.8 million (15% margin) in the prior year period, primarily due to lower delivery volumes and reduced fixed cost absorption. The company reported a net loss of $30.1 million for the quarter, including a $24.9 million non-cash loss from the remeasurement of its warrant liability. Adjusted EBITDA declined significantly to $1.2 million (1% margin) from $9.3 million (7.8% margin) in the prior year period, reflecting the production timing issues. The production ramp delay was attributed to customers deferring deliveries rather than canceling, but this timing shift creates uncertainty around the second-half recovery. The company incurred $2.2 million in costs during the quarter related to the workforce realignment, which negatively impacted gross margin. Warning! GuruFocus has detected 4 Warning Signs with RAIL. Is RAIL fairly valued? Test your thesis with our free DCF calculator. Q: What gets you to the high end versus the low end of your 2026 delivery guidance, given the strong backlog of 3,972 units? A: Nick Randall (President and CEO) explained that the variance is driven by customer timing preferences. The company does not want to build cars too far ahead of when customers need them, as it ties up capital and creates storage costs. The upper end of guidance depends on whether customers are willing to accept deliveries before December 31st, while the lower end reflects orders shifting into early 2027. Q: Is the 32.6% gross margin in the aftermarket business a normalized level going forward? A: Mike Reordan (CFO) stated that 32-33% is a good long-term rate for the aftermarket segment. He noted that quarter-to-quarter margins may fluctuate slightly depending on the mix between new segments like distribution and replacement parts, but the overall rate should remain in that range. Q: How does the 232 tariff on tank cars from Mexico influence your thinking about entering the tank car business? A: Nick Randall (President and CEO) said the retrofit program, which begins in Q3/Q4, is not affected by the tariffs. For new tank car builds, the company has time to review the tariff implications before making capital commitments, which won't be needed for another 12-13 months. He noted that normal tank car demand is 10,000-11,000 units annually, and US capacity cannot fulfill that, so the company will work with customers to navigate tariff questions without changing its strategic view of the market. Q: Is the delivery shift underpinning the new guidance simply customer preference, and why are customers preferring to delay deliveries? A: Nick Randall (President and CEO) confirmed it is about meeting customer expectations and preferences. The company avoids pre-building cars before customers need them to prevent congestion and storage costs. The timing shifts are measured in days, not quarters, and are not a risk of orders being kicked down the road by quarters. Q: Did you have to make pricing concessions to win the strong order intake, and do you anticipate the same mid-10s gross margin profile on backlog orders? A: Nick Randall (President and CEO) stated the company's strategy is not to be the cheapest producer. By engineering tailored cars that maximize customer value, they avoid massive pricing pressure. As volumes increase in the second half and beyond, he expects margins to quickly return to the low teens and above across the product mix, supported by operational improvements and productivity gains. Q: How large do you aim to grow the aftermarket business long-term? A: Mike Reordan (CFO) declined to provide a specific long-term target but emphasized that aftermarket is a meaningful growth platform. The company views it as an attractive area for capital allocation, with the goal of generating meaningfully higher revenue, earnings, and cash flow as a percentage of the consolidated entity. Q: What is the cadence of the railcar demand recoverywill it be gradual or sharp? A: Matt Pong (Chief Commercial Officer) noted that demand is closely tied to railcar retirements. This year's total order activity and deliveries are expected to be in the 20,000-23,000 range, but demand is projected to approach 30,000 in 2027 and upwards of 40,000 in 2028 due to the 50-year age limit on railcars. Two consecutive years of sub-replacement demand and higher scrapping rates make the return to 35,000-40,000 units unsustainable to delay. Q: Do you expect additional tank car demand to come from retrofits or new builds? A: Matt Pong (Chief Commercial Officer) said the retrofit side is at the tail end of demand for converting DOT-111s to DOT-117Rs, as many cars have already been converted. Moving forward, the company will evaluate its entry into the new tank car market, which is a late 2027/early 2028 discussion. Q: Is the 45% market share gain in Q2 a one-off due to a big order, or a signal that market share gains could accelerate? A: Nick Randall (President and CEO) and Matt Pong (Chief Commercial Officer) highlighted that market share growth has been consistent for several quarters, not a one-off. The company's share grew from about 5% in 2022 to over 27% year-to-date in 2026. This is driven by a value proposition focused on engineering collaboration, ease of doing business, and on-time delivery, rather than price. As the market recovers to 35,000-40,000 units, the company expects to defend its market share through this differentiated approach. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved a milestone 45% share of total industry new railcar orders in Q2, driven by a multi-year award for 1,900 units and expanding customer reach. Updated full-year guidance due to a production ramp delay where customer demand was deferred into early 2027 rather than canceled. Completed a structural optimization of the Castaños manufacturing facility, institutionalizing a 50% productivity gain achieved over the last 24 months. Implemented a workforce realignment expected to generate $12 million in annualized structural savings while preserving full installed production capacity. Expanded the aftermarket platform through a second acquisition in less than a year, targeting repeatable, higher-margin revenue streams to counter new car cyclicality. Maintained a value-based commercial strategy focused on engineering flexibility and responsiveness, allowing for order-to-delivery timelines as short as 9 to 12 weeks. Strengthened the balance sheet through a significant warrant exercise that reclassified $105.4 million from liability to equity, reducing future earnings volatility. Revised 2026 delivery guidance to 3,500–3,900 units, reflecting the timing shift of certain deliveries into the first quarter of 2027. Anticipates Q2 to be the low point for adjusted EBITDA and margins, with a meaningful production increase scheduled for the second half of the year. Projects industry demand to normalize toward 35,000 to 40,000 units annually as the aging North American fleet exceeds current sub-replacement delivery levels. Expects the new cost structure to provide significant operating leverage as volumes increase, with benefits beginning in Q3 2026 and extending through 2027. Plans to initiate the tank car retrofit program in late 2026, serving as a bridge toward potential new tank car manufacturing in late 2027 or 2028. Incurred $2.2 million in one-time costs during Q2 related to the workforce realignment and Castaños footprint optimization. Reported a $24.9 million non-cash loss on warrant remeasurement due to share price appreciation, though the subsequent warrant exercise significantly reduced this liability. Monitoring Section 232 tariffs on Mexican tank cars; management noted that near-term retrofits are exempt and future new-build plans remain flexible pending further review. Acquired Southern Parts & Equipment in July 2026, which is expected to be immediately accretive to the growing aftermarket segment. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management clarified that the range depends on customer willingness to accept deliveries before December 31 versus shifting them into January 2027. The shift is a matter of days or weeks rather than quarters, intended to avoid excess inventory and congestion costs for both the company and customers. Management identified 32% to 33% as a normalized long-term gross margin rate for the aftermarket business, despite quarterly fluctuations based on product mix. The segment is viewed as a primary growth platform for capital allocation now that manufacturing capacity for new cars is fully established. Management stated the tariffs do not change their long-term interest in the tank car market, as the retrofit program is not impacted by these specific duties. Significant capital commitments for new tank car manufacturing are not required for another 12 to 13 months, allowing time to evaluate sourcing and compliance strategies. Management emphasized that record market share gains were achieved without pricing concessions, relying instead on tailored engineering and customer intimacy. They expect to defend this expanded market share as the industry cycle recovers by focusing on the value proposition rather than being the lowest-price producer.

Exceptional Order Intake and Increasing Market Share Drive Sequential Backlog Growth of 121% Aftermarket Revenue Growth of 13% Year over Year; Second Aftermarket Acquisition Completed Following Quarter End Operating Cash Flow of $12.1 Million and Free Cash Flow of $11.3 Million, Up 43% Year over Year CHICAGO, Aug. 03, 2026 (GLOBE NEWSWIRE) -- FreightCar America, Inc. (NASDAQ: RAIL) (“FreightCar America” or the “Company”), a diversified manufacturer and supplier of railroad freight cars, railcar parts and components, today reported results for the second quarter ended June 30, 2026. Second Quarter 2026 Highlights Revenues of $113.1 million, compared to $118.6 million in the second quarter of 2025, with railcar deliveries of 927 units compared to 939 units in the prior year period Aftermarket revenues grew 13% year over year, reflecting continued organic growth in parts and components and the contribution from our recent acquisition Gross margin of 5.5% with gross profit of $6.2 million, inclusive of $2.2 million of workforce realignment costs, compared to gross margin of 15.0% with gross profit of $17.8 million in the second quarter of 2025 Recorded a $24.9 million non-cash loss related to share price appreciation accounting on the warrant liability, resulting in a net loss of $30.1 million, or $(0.94) per diluted share, and adjusted net loss of $0.8 million, or $(0.02) per diluted share, compared to adjusted net income of $3.8 million, or $0.11 per diluted share, in the prior year period Holder exercised outstanding warrants during the quarter, reducing the warrant liability to $14.0 million at June 30, 2026 from $119.4 million at March 31, 2026 and resulting in positive stockholders’ equity of $36.2 million Adjusted EBITDA of $1.2 million, representing a margin of 1.0%, compared to $9.3 million and a margin of 7.8% in the second quarter of 2025 Ended the quarter with a backlog of 3,972 units valued at $344 million, reflecting a diversified mix of new railcar builds, conversions and retrofits “Our second-quarter results reflect two different realities,” said Nick Randall, President and Chief Executive Officer of FreightCar America. “Commercially, we delivered one of the strongest order quarters in our recent history, with backlog value increasing 121% sequentially and our share of industry new-railcar orders reaching approximately 45%. Operationally, the production ramp began later than planned due to customer delivery timing, reducing fixed-cost absorption and shifting a portion of expected 2026 deliveries into early 2027.” Randall continued, “We realigned our Castaños operating footprint to the productivity improvements achieved over the past two years, while preserving the installed capacity and critical capabilities required to scale. As a result, we expect to generate approximately $12 million of annualized structural savings, with benefits beginning in the third quarter. Combined with 13% growth in aftermarket revenue and the addition of our second acquisition following quarter-end, we enter the second half with a substantially larger backlog, a lower cost base and a broader presence across the railcar lifecycle.” Fiscal Year 2026 Outlook The Company has updated its outlook for fiscal year 2026 as follows: 1. The Company does not provide a reconciliation of forward-looking Adjusted EBITDA guidance due to the inherent difficulty in forecasting and quantifying adjustments necessary to calculate such non-GAAP measure without unreasonable effort. Material changes to such adjustments, including warrant liability and non-core operating items, could affect future GAAP results. Mike Riordan, Chief Financial Officer of FreightCar America, added, “Free cash flow rose 43% year over year to $11.3 million, while we maintained solid balance sheet flexibility. We also closed our second aftermarket acquisition in under a year, an immediately accretive addition to our business as we continue to execute on our capital allocation priorities. While our updated full-year outlook reflects the shift in new railcar delivery timing, our lower cost structure and robust order intake support stronger results in the back half. Our long-term growth trajectory and value we are building for the years ahead remain firmly on track.” Second Quarter 2026 Conference Call & Webcast Information The Company will host a conference call and live webcast on Tuesday, August 4, 2026, at 11:00 a.m. (Eastern Time) to discuss its second quarter 2026 financial results. FreightCar America invites shareholders and other interested parties to listen to its financial results conference call. Teleconference details are as follows: August 4, 2026 11:00 a.m. Eastern Time Phone: 1-877-407-0789 or 1-201-689-8562 Webcast access: FreightCar America Second Quarter 2026 Earnings Conference Call - 1769392 An audio replay of the conference call will be available beginning at 3:00 p.m. (Eastern Time) on Tuesday, August 4, 2026, until 11:59 p.m. (Eastern Time) on Tuesday, August 18, 2026. To access the replay, please dial (844) 512-2921 or (412) 317-6671. The replay passcode is 13761654. An archived version of the webcast will also be available on the FreightCar America Investor Relations website. About FreightCar America FreightCar America, headquartered in Chicago, Illinois, is a leading designer, producer and supplier of railroad freight cars, railcar parts and components. We also specialize in railcar repairs, complete railcar rebody services and railcar conversions that repurpose idled rail assets back into revenue service. Since 1901, our customers have trusted us to build quality railcars that are critical to economic growth and instrumental to the North American supply chain. To learn more about FreightCar America, visit www.freightcaramerica.com. Forward-Looking Statements This press release contains statements relating to our expected financial performance, financial condition, and/or future business prospects, events and/or plans that are “forward-looking statements” as defined under the Private Securities Litigation Reform Act of 1995. Forward-looking statements represent our estimates and assumptions only as of the date of this press release. Our actual results may differ materially from the results described in or anticipated by our forward-looking statements due to certain risks and uncertainties. These risks and uncertainties relate to, among other things, the cyclical nature of our business; adverse geopolitical, economic and market conditions, including inflation; material disruption in the movement of rail traffic for deliveries; fluctuating costs of raw materials, including steel and aluminum; delays in the delivery of raw materials; our ability to maintain relationships with our suppliers of railcar components; our reliance upon a small number of customers that represent a large percentage of our sales; the variable purchase patterns of our customers and the timing of completion; delivery and customer acceptance of orders; the highly competitive nature of our industry; the risk of lack of acceptance of our new railcar offerings; potential unexpected changes in laws, rules, and regulatory requirements, including tariffs and trade barriers (including recent United States tariffs imposed or threatened to be imposed on China, Canada, Mexico and other countries and any retaliatory actions taken by such countries); and other competitive factors. The factors listed above are not exhaustive. New factors emerge from time to time that may cause our business not to develop as we expect, and it is not possible for us to predict all of them. We expressly disclaim any duty to provide updates to any forward-looking statements made in this press release, whether as a result of new information, future events or otherwise. Non-GAAP Financial Measures This press release includes measures not derived in accordance with generally accepted accounting principles (“GAAP”), such as EBITDA, Adjusted EBITDA, Adjusted net income (loss), Adjusted EPS, and Free cash flow. These non-GAAP measures should not be considered in isolation or as a substitute for any measure derived in accordance with GAAP and may also be inconsistent with similar measures presented by other companies. Reconciliations of these measures to the applicable most closely comparable GAAP measures, and reasons for the Company’s use of these measures, are presented in the attached pages. (1) Other segment items in Manufacturing and Aftermarket segments include selling, general and administrative expenses. (1) Other segment items in Manufacturing and Aftermarket segments include selling, general and administrative expenses. (1) EBITDA represents earnings before interest, taxes, depreciation and amortization. We believe EBITDA is useful to investors in evaluating our operating performance compared to that of other companies in our industry. In addition, our management uses EBITDA to evaluate our operating performance. The calculation of EBITDA eliminates the effects of financing, income taxes and the accounting effects of capital spending. These items may vary for different companies for reasons unrelated to the overall performance of the company’s business. EBITDA is not a financial measure presented in accordance with U.S. GAAP. Accordingly, when analyzing our operating performance, investors should not consider EBITDA in isolation or as a substitute for net income or other statements of operations or statements of cash flow data prepared in accordance with U.S. GAAP. Our calculation of EBITDA is not necessarily comparable to that of other similar titled measures reported by other companies. (2) Adjusted EBITDA represents EBITDA before the following charges: a) This adjustment removes the non-cash (income) expense associated with the change in fair market value of the Company’s warrant liability. b) During the second quarter of 2026, the Company incurred workforce realignment costs as a result of sustained productivity gains in its Manufacturing segment. c) During 2026, the Company incurred certain professional services expenses associated with governance items. d) During 2026, the Company incurred costs related to the acquisition and integration of businesses in its Aftermarket segment. e)   Represents lease payments recorded within Interest expense due to certain leases previously classified as financing prior to December 2025.We believe that Adjusted EBITDA is useful to investors evaluating our operating performance compared to that of other companies in our industry because it eliminates the impact of certain non-cash charges and other special items that affect the comparability of results in past quarters. Adjusted EBITDA is not a financial measure presented in accordance with U.S. GAAP. Accordingly, when analyzing our operating performance, investors should not consider Adjusted EBITDA in isolation or as a substitute for net income or other statements of operations or statements of cash flow data prepared in accordance with U.S. GAAP. Our calculation of Adjusted EBITDA is not necessarily comparable to that of other similarly titled measures reported by other companies. (1) Adjusted net (loss) income represents net (loss) income before the following charges: (a) This adjustment removes the non-cash (income) expense associated with the change in fair market value of the Company’s warrant liability. (b) During the second quarter of 2026, the Company incurred workforce realignment costs as a result of sustained productivity gains in its Manufacturing segment. (c) During 2026, the Company incurred certain professional services expenses associated with governance items. (d) During 2026, the Company incurred costs related to the acquisition and integration of businesses in its Aftermarket segment. (e) During the second quarter of 2025, the Company released the majority of the valuation allowance in the United States on federal and state deferred tax assets. (f) Income tax impact on non-GAAP adjustments represents the tax impact of the presented adjustments on the Company’s income tax provision calculation. We believe that Adjusted net income is useful to investors evaluating our operating performance compared to that of other companies in our industry because it eliminates the impact of certain non-cash charges and other special items that affect the comparability of results in past quarters. Adjusted net income is not a financial measure presented in accordance with U.S. GAAP. Accordingly, when analyzing our operating performance, investors should not consider Adjusted net income in isolation or as a substitute for net income or other statements of operations or statements of cash flow data prepared in accordance with U.S. GAAP. Our calculation of Adjusted net income is not necessarily comparable to that of other similarly titled measures reported by other companies. (1) Adjusted EPS represents diluted EPS before the following charges: (a) This adjustment removes the non-cash (income) expense associated with the change in fair market value of the Company’s warrant liability. (b) During the second quarter of 2026, the Company incurred workforce realignment costs as a result of sustained productivity gains in its Manufacturing segment. (c) During 2026, the Company incurred certain professional services expenses associated with governance items. (d) During 2026, the Company incurred costs related to the acquisition and integration of businesses in its Aftermarket segment. (e) During the second quarter of 2025, the Company released the majority of the valuation allowance in the United States on federal and state deferred tax assets. (f) Income tax impact on non-GAAP adjustments per share represents the tax impact of the presented adjustments on the Company’s income tax provision calculation. We believe that Adjusted EPS is useful to investors evaluating our operating performance compared to that of other companies in our industry because it eliminates the impact of certain non-cash charges and other special items that affect the comparability of results in past quarters. Adjusted EPS is not a financial measure presented in accordance with U.S. GAAP. Accordingly, when analyzing our operating performance, investors should not consider Adjusted EPS in isolation or as a substitute for net income or other statements of operations or statements of cash flow data prepared in accordance with U.S. GAAP. Our calculation of Adjusted EPS is not necessarily comparable to that of other similarly titled measures reported by other companies. (1) Free cash flow represents the amount of Cash flows provided by operating activities less capital expenditures. We believe that Free cash flow is useful to investors evaluating our operating performance compared to that of other companies in our industry because these metrics provide key insights into the potential for growth and ability to generate returns for investors. Free cash flow is not a financial measure presented in accordance with U.S. GAAP. Accordingly, when analyzing our operating performance, investors should not consider Free cash flow in isolation or as a substitute for Cash flows from operating activities or other statements of operations or statements of cash flow data prepared in accordance with U.S. GAAP. Our calculation of Free cash flow is not necessarily comparable to that of other similarly titled measures reported by other companies.

New Multi-Year Railcar Order Extends Backlog Visibility and Supports Second Quarter Commercial Momentum, Reflecting Customer Confidence in FreightCar America’s Commercial, Engineering and Manufacturing Platform CHICAGO, July 06, 2026 (GLOBE NEWSWIRE) -- FreightCar America, Inc. (NASDAQ: RAIL) (“FreightCar America” or the “Company”), a leading North American manufacturer and supplier of freight railcars, railcar parts and components, today announced that it has entered into a new multi-year order for 1,900 railcars from a key customer, with deliveries scheduled through 2028. The Company also announced that second quarter orders totaled approximately 3,000 railcars, representing a commercial inflection point as demand for differentiated, agile manufacturing solutions continues to grow. Highlights Secured a new multi-year order for 1,900 railcars, with deliveries scheduled through 2028, expanding backlog visibility and reflecting customer confidence in the Company’s execution and manufacturing capabilities. Second quarter orders totaled approximately 3,000 railcars, valued at approximately $300 million, with orders received across every core market segment, reflecting broad-based demand and product diversity. Multiple first-time customer orders, together with meaningful repeat customer activity, underscore strength of commercial presence, product offering and manufacturing platform. “Customers are increasingly choosing FreightCar America because we are delivering what the market needs in conditions where customers need us most. Anchored by our engineering capability, manufacturing agility and focus on quality, we continue to position ourselves to gain share and capture significant order momentum during the quarter,” commented Nick Randall, President and Chief Executive Officer of FreightCar America. “This new multi-year commitment for 1,900 railcars is a testament to that, marking a milestone for the Company and showcasing the confidence our customers put into our ability to execute over a sustained delivery horizon.” Randall continued, “With approximately 3,000 railcars ordered in the quarter, we are seeing an inflection point in terms of commercial momentum across our differentiated product portfolio. These orders highlight the value customers place on our ability to move quickly, tailor solutions to their needs and support transportation capacity across the North American supply chain. We believe FreightCar America is well positioned as an execution-focused railcar manufacturer in a market where reliability, responsiveness and delivery performance matter more than ever.” Certain orders referenced in this release are subject to customary documentation and completion of terms. About FreightCar America FreightCar America, headquartered in Chicago, Illinois, is a leading designer, producer and supplier of railroad freight cars, railcar parts and components. We also specialize in railcar repairs, complete railcar rebody services and railcar conversions that repurpose idled rail assets back into revenue service. Since 1901, our customers have trusted us to build quality railcars that are critical to economic growth and instrumental to the North American supply chain. To learn more about FreightCar America, visit www.freightcaramerica.com. Forward-Looking Statements This press release contains statements relating to our expected financial performance, financial condition, and/or future business prospects, events and/or plans that are "forward-looking statements" as defined under the Private Securities Litigation Reform Act of 1995. Forward-looking statements represent our estimates and assumptions only as of the date of this press release. Our actual results may differ materially from the results described in or anticipated by our forward-looking statements due to certain risks and uncertainties. These potential risks and uncertainties relate to, among other things, the cyclical nature of our business; adverse economic and market conditions, including inflation; material disruption in the movement of rail traffic for deliveries; fluctuating costs of raw materials, including steel and aluminum; delays in the delivery of raw materials; our ability to maintain relationships with our suppliers of railcar components; our reliance upon a small number of customers that represent a large percentage of our sales; the variable purchase patterns of our customers and the timing of completion, delivery and customer acceptance of orders; the highly competitive nature of our industry; potential unexpected changes in laws, rules, and regulatory requirements, including tariffs and trade barriers; and other competitive factors. We expressly disclaim any duty to provide updates to any forward-looking statements made in this press release, whether as a result of new information, future events or otherwise. Investor Contact: [email protected]

Image source: The Motley Fool. Tuesday, May 5, 2026 at 11 a.m. ET President and Chief Executive Officer — Nicholas J. Randall Chief Financial Officer — Michael Anthony Riordan Chief Commercial Officer — W. Matthew Tonn Vice President, Investor Relations — Chris O'Dea Need a quote from a Motley Fool analyst? Email [email protected] Chris O'Dea: Thank you, and welcome. Joining me today are Nicholas J. Randall, president and chief executive officer, Michael Anthony Riordan, chief financial officer, and W. Matthew Tonn, chief commercial officer. I would like to remind everyone that statements made during the conference call related to the company's expected future performance, future business prospects, 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, Inc.'s Form 10-K 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 first quarter 2026 is posted on the company's website at freightcaramerica.com along with the 8-K, which was filed at market close yesterday. With that, I will now turn the call over to Nick for a few opening remarks. Nicholas J. Randall: Thank you, Chris. Good morning, everyone, and thank you all for joining us today. Our first quarter results were in line with expectations and remained consistent with the operating cadence we expect for 2026. At the same time, our commercial differentiation and expanding aftermarket business, which grew 86% year over year, continues to distinguish FreightCar America, Inc. and reinforces the resilience of our business model across market cycles. Our ability to serve specialized customer needs through not only new car builds, but also retrofits, conversions, and our expanding aftermarket platform all play a key role in growing our addressable revenue opportunities and allowing us to fulfill a broader set of customer programs. In short, FreightCar America, Inc. is a truly diversified railcar company and that remains central to our strategy. Supported by our manufacturing expertise and strong productivity improvements, we realized one of the highest gross margin quarters in over a decade, with 17% gross margin in the quarter. This represents an expansion of 190 basis points year over year. What is especially encouraging is that we achieved this performance on lower utilization, highlighting the operational agility and the variable structure of the business. Commercial activity was also encouraging in the quarter, with significantly improved pipeline activity amongst key accounts and solid order intake, including demand for our conversion and retrofit work. We increased our backlog by $19 million sequentially and, together with the expected contribution from retrofit and aftermarket activity, we continue to expect performance to be weighted towards the back half of the year. Internally, as we have scaled our manufacturing footprint, we have been on a continuous improvement journey focused on enhancing productivity and strengthening execution across our manufacturing operations. During that time, we have successfully established four fully operational production lines and have taken a relentless approach in driving efficient manufacturing practices. We are extremely pleased with our progress to date, noting that we have increased productivity by approximately 50% over the last 24 months. In addition, we remain agile and are able to remain flexible as needed, giving us additional operating capacity capability as demand evolves. Together, these actions and capabilities provide additional support to drive consistent margin performance over the long term. At the same time, programs like TrueTrack are helping reinforce accountability, real-time build visibility, and quality throughout the production process, driving greater consistency, reducing rework, and strengthening production discipline across our operations. We also remain focused on the continued expansion of our aftermarket platform, an important part of our strategy to build a broader and more balanced rail business over time. We are excited with the progress we have seen so far with our recent [inaudible], which represents an important step in expanding our aftermarket capabilities. We remain disciplined in how we invest behind that, with a focus on selective adjacent opportunities that strengthen our position in core rail markets, expand our capabilities, and support attractive long-term returns. Overall, we remain mindful of the current new build environment, where industry order activity has remained relatively consistent with last year's levels. Importantly, that dynamic continues to point to underlying pent-up demand as fleets age and deferred replacement needs build over time. As those fleets reach retirement age, customers are increasingly likely to place orders closer to the required delivery timing, which tends to favor more agile manufacturers by creating a shorter lead time environment. FreightCar America, Inc. is well positioned in that regard. With our improved productivity, stronger operating discipline, and a flexible manufacturing model with scalable capacity, we are well equipped to respond efficiently and capitalize on opportunities as replacement demand returns over time. With that, I will turn it over to Matt to discuss the market environment in more detail. W. Matthew Tonn: Thanks, Nick, and good morning, everyone. I will start with a brief update on the market and our commercial activity during the quarter. Industry conditions for new railcar builds remain relatively consistent with the prior year, with expected annual deliveries tied to replacement demand. This dynamic reflects underlying demand as fleets continue to age and replacement needs build over time. Order activity during the quarter was also consistent with this environment, with industry orders totaling 5,654 units compared to 5,085 units in the prior year period. Railroad service metrics continue to trend positively across the industry. Key indicators like reductions in dwell time and increased velocity speak to improved rail service, customer confidence in rail operations, and support long-term rail demand. Through the first quarter, U.S. carload traffic was up over 4% year over year, with 13 of the 20 carload segments showing growth. Grain and chemical carloads posted the strongest growth, which has also been reflected in our pipeline for new covered hopper cars. Overall, first quarter car loadings excluding coal were the highest since 2015 and indicate that despite softness in some sectors, underlying rail demand remains resilient. During the quarter, we saw strong commercial activity, including growth of our sales pipeline across our broad product portfolio of new build and conversion railcars. Further, we continue to see increasing interest in our aftermarket business as customers look to extend the useful lives of their aging railcar fleets through scheduled maintenance activity. Backlog at the end of the quarter totaled 2,058 units valued at approximately $156 million, with a diversified mix across new builds, conversions, and retrofit programs that support a balanced revenue profile. Importantly, we are beginning to see customers who were evaluating new car orders moving forward with purchase decisions. In those instances, our flexible manufacturing footprint and ability to pivot quickly positions us well to meet customer-specific delivery timing requirements. From a market share perspective, we estimate our addressable share of industry new railcars, excluding tank cars, was approximately 17% for the quarter, which is in line with our typical market share. Importantly, this metric does not include our work outside of new railcars, including railcar conversions, retrofits, and rebodies, which further diversifies our revenue base and expands our participation across the broader railcar market. Looking ahead, as Nick mentioned, we remain on track to begin shipments under our tank car retrofit program in the second half of the year, with initial activity expected in the third quarter and more meaningful contribution in the fourth quarter. Overall, while near-term market conditions remain measured, we are encouraged by the level of commercial activity, the strength of our pipeline, and the continued diversification of our backlog. With that, I will turn the call over to Mike to walk through the financials in more detail. Michael Anthony Riordan: Thanks, Matt, and good morning, everyone. I would like to begin with a few first quarter highlights. Revenue for the quarter was $64.3 million compared to $96.3 million in 2025. The year-over-year decline primarily reflects lower railcar deliveries, with 577 units delivered in the quarter versus 710 units in the prior year period. As noted, this was largely driven by underlying demand and expected timing. While production timing impacted first quarter deliveries, we were encouraged by the momentum in our aftermarket business, where sales grew 86% compared to the prior year period. This growth reflects the progress we are making in expanding our presence in the aftermarket, driving further diversification to our business over time. Gross profit for the quarter was $10.8 million compared to $14.4 million in the prior year period. Gross margin was 16.8%, up 190 basis points from 14.9% last year. The improvement in margin was driven primarily by a more favorable product mix that expands beyond new railcars, as well as the productivity gains and operational efficiencies across our manufacturing operations that Nick mentioned earlier. Importantly, we delivered this margin improvement despite lower production volumes, underscoring the benefits of our mix, productivity, and cost discipline. This improvement reflects the progress we have made in strengthening execution, improving throughput, and driving a more disciplined operating model. Selling, general, and administrative expenses as a percentage of revenue increased to 17.7% from 10.9% in the prior year period, primarily reflecting lower revenue in the quarter rather than a meaningful increase in absolute SG&A expense. On the bottom line, we reported net income of $41.6 million, or $1.15 per share, compared to $50.4 million, or $1.52 per share, in the prior year period. Results for the quarter include a $49.1 million non-cash gain related to the remeasurement of our warrant liabilities. Excluding non-cash items, adjusted net loss was $500,000, or $0.04 per share, compared to adjusted net income of $1.6 million, or $0.05 per share, in 2025. This change primarily reflects lower volumes in the quarter. Adjusted EBITDA for the quarter was $3.2 million, representing a margin of 4.9%, compared to $6.4 million, a margin of 6.7%, in the prior year period. The year-over-year decline in adjusted EBITDA was primarily driven by lower deliveries, consistent with the expected quarterly cadence, partially offset by the margin improvements mentioned earlier. We continued to execute a disciplined and measured capital allocation strategy, balancing targeted investment in the business with a continued focus on liquidity and financial flexibility. From a balance sheet perspective, we further reduced debt in the quarter and ended with $52.8 million in cash and cash equivalents. Capital expenditures for the first quarter totaled $147 thousand. Moving forward, we continue to expect 2026 capital spending of $7 million to $10 million, including approximately $4 million to $5 million of maintenance spending as well as targeted investments to complete our previously announced tank car manufacturing initiatives. The productivity improvements we have made, together with our flexible manufacturing footprint and existing production lines, gives us the capacity to support higher production levels as demand improves without significant additional capital investment. Because that capacity is already in place within our current footprint, we can scale production as needed while continuing to direct capital towards opportunities to strengthen the business over the long term, including expanding our aftermarket platform and pursuing selective opportunities that enhance the stability and durability of our revenue and cash flow profile. Overall, first quarter results were in line with our expectations and reflect the planned production cadence for the year. We are reaffirming our full-year 2026 guidance, and our expectations for a stronger second half remain intact, supported by backlog visibility, scheduled program activity, aftermarket momentum, and continued productivity improvements. We will now open the call for questions. Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from Mark Reichman with Noble Capital Markets. Please state your question. Mark Reichman: Thank you. So if I look at railcar sales revenue divided by railcars delivered, it was a little under $92 thousand for the first quarter. That number drifted down throughout 2025, and that was also true for the backlog value per railcar. So I was just wondering if you could talk a little bit about the product mix changes throughout the year. Would you expect that number to get above $100 thousand? Michael Anthony Riordan: Hi, Mark. This is Mike. You are right. In the back half of 2025, we talked about mix shifting more towards conversions and rebody opportunities we had. The same thing in Q1; it was a heavier conversion quarter. I would expect, as we move into the back half, to see that number go above $100 thousand as the mix will shift back towards new car activity in the second half of the year. Operator: Does that answer your question, Mark? Mark Reichman: It does. The second quarter, would you expect an improvement from the first quarter in that regard as well? Michael Anthony Riordan: From an average selling price, we should see that go up from where we were in Q1 as well, and then build throughout the year. Mark Reichman: Okay. And then just my next question is, I think expectations were for a much stronger second half, but with rail deliveries at 577 in the first quarter, it seems like there might be a little catching up to do to get within guidance. Could you maybe talk a little bit about the cadence of railcar deliveries? And do you think your net railcar orders received, I mean, I think it was 709 in the first quarter, are going to fuel strength into the second half of the year? Nicholas J. Randall: Mark, I will start answering that question. It is really an order pipeline question, and then that will drive the delivery cadence in the second half. This time last year, we talked about how improving our agility in manufacturing—effectively shortening our lead time and improving our response time—would favor people in a market where the number of orders being placed is lower than the replacement average. That is what we are seeing again. We drove a lot of productivity improvements and we have shortened our, or improved, our velocity and shortened our dwell time in the manufacturing plant, which allows us to keep capacity open in the near term for customers as they place orders. Then we get visibility into the full pipeline of our commercial opportunities. We have an increase in the pipeline activity—that is customers talking to us about orders in the 2026 timeframe and our ability to fulfill those orders still within the 2026 timeframe. We are able to have more insights than we do talking about pure booked orders on the pipeline activity—the type of product, what the product is waiting for to become a live order, etc. So yes, it is going to be weighted towards the second half. We said that last year, and it was. We are committing that it will be the same this year. A lot of the work we did, both in our scalable manufacturing and our ability to ramp up from what we did in Q1 to significantly higher numbers without introducing risks, is key to our success in that as well. The order activity, I will pass on to Matt; he can talk a bit more about that. But yes, it is heavy weighted to the second half. We knew that going in and we have designed our plan around that, and we are still confident we can deliver on that. W. Matthew Tonn: I will just add that we have been adept at being able to convert orders with very short lead times. Customers that have been on the sidelines are now moving into the order stage, and our ability with our efficient footprint has allowed us to convert those orders very quickly and deliver. That was executed multiple times within the quarter. And just to comment on the pipeline, the pipeline is continuing to grow. It has been quite active in the latter part of the first quarter and into Q2. I will not speak to order activity in the quarter; we will save that for the next earnings call. But overall, we have a high level of confidence in the strength of the pipeline for 2026, and even pipeline activity into 2027 and beyond. Mark Reichman: That is great. That is very helpful. Thank you very much. Operator: Our next question comes from Aaron Bruce Reed with Northcoast Research. Please state your question. Aaron Bruce Reed: Thank you. A little bit of a follow-on to the comment on the lower deliveries. I was wondering if you could shed a little light around whether deliveries were impacted at all by preparing for the tank car deliveries in the back half of this year. You are not going to be operating on that fifth line, but that fourth line. Did that have any impact as well? Nicholas J. Randall: No, Aaron. The opposite. We have historically talked about having a fifth line on the roof, and we can open that fifth line pretty quickly, in under 90 days. But with our productivity improvements, what we are finding is we are raising the throughput on those first four lines in our ability to convert more cars on those four in a more productive manner. What that means is our installed capacity on those first four is increasing quite significantly compared to what we originally intended, with those productivity and velocity improvements. So yes, we will more than likely do the conversions you mentioned—some tank car conversions—on the footprint we have, possibly not even needing the fifth line for that. It is available to us should we need it. But I would rather sweat the assets as much as possible before we commit to expanded capacity. In short, the volume was not impacted negatively because of preparation work. The preparation work has gone to plan. We have the certification as required, but that has not impeded our freight car business or our freight car capacity. We were simply responding to customer demand profiles during the quarter. Aaron Bruce Reed: Okay, great. And then another follow-up question to that is, last year I think overall deliveries across the industry were around 30,000. Do you have any more insights about what you might expect for the total number of deliveries for the remainder of 2026? And have you gotten any indication of what 2027 might look like? Nicholas J. Randall: I am not going to try to quote year-to-date; I will do it in full years because it is easier to do the math that way. Typically, when we look at deliveries, deliveries are going to lag behind order activity. So we look at the order activity for 2025, which would suggest that deliveries in 2026 are going to be somewhere between 25,000 to 30,000, giving a wide range, given that some can still convert in 2026. That would be kind of consistent. Then I would expect the orders in 2026 to be about that range or slightly higher as they start receiving orders in the back end of 2026 that go into 2027. There is a lag time. Traditionally, if you look in the rail industry, that lag time between order placement and delivery has been as far as 18 months or longer. Typically now, certainly with our agile manufacturing platform, that timing from order placement to delivery can be as short as 9 to 12 weeks in some cases. What we are seeing is a compression of that order cycle from order placement to delivery. We have structurally aligned our operations, supply chain, and support engineering roles so that we are very agile in that process, which allows us to capitalize on that shortened lead time that the market and the customers are beginning to look for. Aaron Bruce Reed: Super helpful. And then I guess one last question: when you look at the total overall number of deliveries throughout the year and your overall market share, even as the industry is seeing deliveries fall a little bit, you are continuing to take market share. Have you seen any competitors take any competitive pricing action to combat the market share you are taking, or is it pretty much the same as it was before? Nicholas J. Randall: I will answer at a very high level and then get more specific. In a free market economy, competitors always respond in some way, whether it be pricing or value proposition or some other way. I would expect that to always be true in the rail space. For us, that means we are very conscious that we have to earn the right to win our work and earn the right to win our market share. We take that very seriously. We have never said we are going to be the lowest-cost producer, but we will be the most valuable producer. We will make sure that we deliver exactly what our customers want and need and enhance our value proposition. We truly believe in our products, our services, and the relationships that we build. When we combine all that together, we win work on our own merits. Competitors can respond to that how they see fit. We will keep an eye on it, but we have grown both in account count and in market share, as you said, and we fully expect to sustain those gains and, in fact, build upon them. As the market deliveries respond back to the normal 38,000 to 40,000 units a year, we truly expect to protect that market share gain through that growth cycle as well. Aaron Bruce Reed: Super helpful. Thank you. Nicholas J. Randall: Thanks, Aaron. Operator: Our next question comes from Brendan Michael McCarthy with Sidoti. Please state your question. Brendan Michael McCarthy: Great. Good morning, everybody. Thanks for taking my questions here. I just wanted to start off on the Q1 gross margin and see if we could dissect that a little bit more. How much of that was structural in nature, or was that more so driven by your higher conversion deliveries in the quarter? Michael Anthony Riordan: Hey, Brendan, this is Mike. I would call the majority of that structural. We did not have any retrofits. But as alluded to, with the average selling price being down, we had more conversions; you will naturally see the gross margin up. As we have mentioned, typically, the bottom-line gross profit on a per-unit basis is relatively similar between conversions and new cars. But you have a lower price tag on a conversion, so you see the margin a little higher. Brendan Michael McCarthy: Got it. That makes sense. I meant to say conversions actually because I think the retrofits are more back-half weighted in the year. Is that correct? Michael Anthony Riordan: Yeah. Brendan Michael McCarthy: Got it. On that point, with the retrofits in the back half of the year, I think you mentioned you are still expecting to see the average sales price step up throughout the year. Can you differentiate that between the two, in terms of delivery cadence? Michael Anthony Riordan: Sure. I think we have mentioned that the retrofit program we have is a two-year program. It kicks off in Q3 for us and really starts going in Q4. Probably about a quarter of that total order will take place in calendar year 2026, with the balance going through 2027. So the retrofits will have a lower impact on ASP this year compared to next year, where the bulk of them are taking place. Brendan Michael McCarthy: Okay. That makes sense. That is helpful. And then last question for me: on the guidance affirmation, how confident are you that you can really hit the midpoint there, and how much of that is backed by you banking on a recovery in industry order flow in the back half of the year and really capitalizing on those short lead times? What is underpinning the confidence there? Nicholas J. Randall: I will walk through that first, and then Matt can put some color around some of the order activity. Yes, the year is back-half loaded. We know that; we planned around that. The back half is not really requiring the industry to get back to normal. We have always planned on the industry order quantity being somewhere around 25,000 to 30,000, similar to what it was last year, and that is what our guidance is based on. If there is a sooner-than-expected return to normal replacement levels, then that would probably support a stronger result. But the assumptions we have in that are based less about industry dynamics, which are good to look at, and more on our relationships and our actual customers and the orders they are working through, and the projects that those orders are going to be delivered for. We are able to base it on the facts of the order pipeline and gestation process and risk-adjust from that. While the industry level is a background that helps set the main scene, when we look at our guidance and our forecast, we are really looking at our own pipeline with a lot more detail and risk-assessing against the orders we have and the projects we are working on and what may or may not influence accelerating or deferring any of those projects. It is not always fully reflective. Last year, we grew market share and we grew unit count even though the industry counts went down significantly. It is going to be a rinse and repeat for us this year—similar dynamics. Still a lot to do, clearly, but I am confident that we are not just mapping it simply to “here is what the industry does, so therefore here is what we do.” We truly believe we have to earn the right for every order, and we work on it on an order-by-order basis with our customers and our projects. Matt, if I missed anything on that. W. Matthew Tonn: Just a couple of comments, Brendan. The back-to-back years of order activity have averaged 23,000 units. We are scrapping more cars than are being ordered. When we have conversations with customers about their needs, we are getting to an inflection point where we cannot keep this low level of order activity and high level of car scrapping and not start replacing railcars. We have spoken in the past about impending demand as we approach the end of the decade, and customers are starting to get— I will not say more serious, but certainly focused on—their demand for railcar needs now. This is what we refer to as a high-quality pipeline. We are seeing much more activity in terms of permitting and funding for railcar builds. So when we talk about how the outlook is for the remainder of the year, it is based upon good order activity that we have seen so far in the quarter, but I think there is also solid, high-quality pipeline activity that gives us high confidence in meeting our guidance. Brendan Michael McCarthy: That makes sense. I appreciate the detail there. That is all for me. Operator: Our next question comes from Mark Reichman with Noble Capital Markets. Please state your question. Mark Reichman: Thank you. Just a follow-up. You can imagine, with 577 deliveries in the first quarter and guidance between 8,000 and 8,500, people are going to be a little skeptical about meeting that guidance. But on the other hand, you have that ABL facility, and that gave you a lot more production flexibility. We cannot really see what is going on behind the scenes, but do you have some deliveries already in the bag that you know are going to get delivered in the third and fourth quarters? I guess what I am asking is whether your recent flexibility in terms of being able to produce and deliver is part of what is behind the lumpiness in the delivery schedule this year. Nicholas J. Randall: I will try to break down the couple of questions wrapped up in that one, and then Matt and Mike can add some color. First, if you just look at our guidance at the entry level, as you said, it is just over 3,450 or so still to do at the end of Q1 to ship in the year. That would say, on a level-loaded basis, call it 1,200 units a quarter, or about 90-something units a week. That is well within our capacity. We have demonstrated much higher shipment profiles than that before. So I do not think there is a capacity concern or ability to flex. We drove the productivity improvements so that we can handle a lot of those delivery commitments sometimes in a single shift as opposed to a double shift. We have a lot of improvements baked into that. So I do not think we have a risk from a capacity perspective; we can flex our volume and throughput very high. Second, on timing: we may build cars ahead of schedule. We may do a build sequence in a prior quarter, but then you have finished goods or on the ABL or some of the financial mechanics that then get the revenue recognition in a later quarter. We sometimes do that. There is not a lot of that in Q1, but you will see some of those in Q2 builds that will ship in Q3 and Q4. That is normal for us as we smooth out that process. Those things do happen and will happen, but they allow us to buffer supply chain variability and maintain consistent output. That usually works better for us. From a pipeline perspective, there is higher customer demand in the second half than there was in the first half, certainly in the first quarter. There is only so much prebuild you can do ahead of time because then you have to pay the storage fees, the movement fees, and a whole bunch of things. With our flexible manufacturing, we are able to deliver when our customers need them rather than having the customer make compromises on shipment timing and storage, etc. When you roll all these things together—between our scalable manufacturing, our operational excellence, our TrueTrack, and our deep relationships with our customers—we are able to flex our delivery times so that our customers do not have to make compromises. That allows us to have another edge as to why we are a supplier of choice for most of our customers. Mark Reichman: That is great. That is very helpful detail, Nick. Thank you. Operator: That was the last question for today, and it concludes the teleconference call. You may now disconnect your lines at this time. Thank you for your participation, and have a great day. Before you buy stock in FreightCar America, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and FreightCar America wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $490,864!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,216,789!* Now, it’s worth noting Stock Advisor’s total average return is 963% — a market-crushing outperformance compared to 201% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of May 5, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends FreightCar America. The Motley Fool has a disclosure policy. RAIL Q1 2026 Earnings Transcript was originally published by The Motley Fool

FreightCar reported lower Q1 revenue and deliveries (577 units) but achieved one of its best margins in a decade with a roughly 17% gross margin; reported net income of $41.6 million included a $49.1 million non‑cash warrant remeasurement, leaving an adjusted net loss of $0.5 million and adjusted EBITDA of $3.2 million. The company is pushing diversification, with aftermarket revenue up 86% year‑over‑year and a 2,058‑unit backlog (~$156 million), and it reaffirmed 2026 guidance while expecting stronger contribution from retrofit and aftermarket work in the second half (meaningful impact in Q4 and into 2027). Operationally, FreightCar has four fully operational production lines and says productivity is up about 50% over 24 months, positioning it to meet full‑year shipment targets of 4,000–4,500 units and scale tank‑car work quickly if needed. Interested in Freightcar America, Inc.? Here are five stocks we like better. FreightCar America Finally Gets On Track Freightcar America (NASDAQ:RAIL) executives said first-quarter results were “in line with expectations” and reiterated full-year 2026 guidance, while pointing to a stronger second half driven by improving commercial activity, growing aftermarket revenue, and a backlog that includes new builds, conversions, and retrofit programs. President and CEO Nick Randall said the company delivered one of its “highest gross margin quarters in over a decade,” citing a 17% gross margin in the quarter. Randall attributed the performance to manufacturing expertise, productivity improvements, and a variable cost structure that allowed the company to post stronger margins despite lower utilization. → Roblox Stock Slides to New Low as Safety Changes Weigh on Outlook FreightCar America, Inc. Is About To Leave The Station CFO Mike Riordan reported first-quarter revenue of $64.3 million, down from $96.3 million in the prior-year period, primarily due to lower railcar deliveries. The company delivered 577 units in the quarter, compared with 710 units a year earlier. Gross profit was $10.8 million, compared with $14.4 million in the first quarter of 2025, while gross margin increased to 16.8% from 14.9%. Riordan said the margin improvement was driven by a more favorable product mix “that expands beyond new rail cars,” as well as productivity gains and operational efficiencies. In response to an analyst question, Riordan said there were no retrofits in the quarter and characterized “the majority” of the margin improvement as structural, noting that conversions can carry a lower selling price but similar gross profit per unit, which can lift margin percentage. → The Real SpaceX Play: 5 Chip Stocks Powering the IPO Before It Launches Freight Car America Gets Derailed Selling, general, and administrative expenses rose to 17.7% of revenue from 10.9% a year ago, which Riordan said primarily reflected lower revenue rather than a meaningful increase in absolute SG&A spending. On the bottom line, FreightCar America reported net income of $41.6 million, or $1.15 per share, compared with net income of $50.4 million, or $1.52 per share, in the prior-year quarter. Riordan said results included a $49.1 million non-cash gain from remeasuring the company’s warrant liability. Excluding non-cash items, adjusted net loss was $0.5 million, or $0.04 per share, compared with adjusted net income of $1.6 million, or $0.05 per share, a year earlier. Adjusted EBITDA was $3.2 million, or a 4.9% margin, versus $6.4 million and a 6.7% margin in the prior-year period, reflecting lower deliveries partially offset by margin improvement, according to Riordan. → 3 Emerging Markets ETFs to Maximize Exposure to High-Potential Countries Randall emphasized the company’s strategy to operate as “a truly diversified rail car platform,” pointing to the ability to serve customer needs through new builds, retrofits, conversions, and an expanding aftermarket business. Executives highlighted the aftermarket in particular. Randall said aftermarket revenue grew 86% year-over-year, calling it a differentiator that reinforces resilience across market cycles. Riordan echoed that point, saying the growth reflects progress in “expanding our presence in the aftermarket, driving further diversification to our business over time.” Randall also said the company was encouraged by progress related to a recent acquisition intended to expand aftermarket capabilities, adding that FreightCar America remains disciplined in pursuing “selective adjacent opportunities” that strengthen its position and support long-term returns. Chief Commercial Officer Matt Tonn said industry conditions for new railcar builds remained “relatively consistent with the prior year,” with annual deliveries tied to replacement demand. He cited industry orders of 5,654 units during the quarter compared with 5,085 units in the prior-year period. Tonn also pointed to improving railroad service metrics, including reduced dwell time and increased velocity, which he said supports customer confidence and long-term rail demand. He said U.S. carload traffic was up “over 4%” year-over-year in the first quarter, with 13 of 20 segments showing growth. Grain and chemical carloads posted the strongest growth, and Tonn said that has been reflected in the company’s pipeline for new covered hopper cars. He added that first-quarter carloadings excluding coal were the highest since 2015. Backlog at quarter-end totaled 2,058 units valued at approximately $156 million, which Tonn said was diversified across new builds, conversions, and retrofit programs. Randall added that the company increased backlog by $19 million sequentially and expects performance to be weighted toward the back half of the year, supported by retrofit and aftermarket contributions. From a market share perspective, Tonn said the company estimates its addressable share of industry new railcars excluding tank cars was approximately 17% for the quarter, “in line with our typical market share.” He noted that metric does not include conversions, retrofits, and rebodies. Randall said the company has established four fully operational production lines and increased productivity by approximately 50% over the past 24 months. He also highlighted the company’s TrueTrack program, which he said supports accountability, real-time build visibility, and quality, helping reduce rework and strengthen production discipline. During the Q&A, Randall addressed questions about first-quarter deliveries and the company’s ability to meet its full-year shipment guidance of 4,000 to 4,500 units. He said the implied quarterly run-rate is “well within our capacity,” adding that the company has demonstrated higher shipment profiles in the past and has productivity improvements that allow it to handle delivery commitments efficiently. Randall also said the company may at times build cars ahead of shipment timing and recognize revenue in later quarters, though he said there was not much of that in the first quarter and that some second-quarter builds could ship in the third and fourth quarters as part of normal planning to buffer supply chain variability. When asked whether preparations for tank car work affected first-quarter volumes, Randall said, “No… quite the opposite,” explaining that productivity improvements have increased capacity on the first four lines. He said tank car conversion work may be handled within the existing footprint and may not require opening a fifth line, though that capacity can be added in under 90 days if needed. Management reaffirmed full-year 2026 guidance and said expectations for a stronger second half remain intact. Randall said the company’s plan assumes industry order levels around 25,000 to 30,000 units, similar to last year, and that guidance is based more on customer relationships and detailed pipeline insights than on broad industry forecasts. Tonn described the pipeline as “high quality,” citing customer discussions around funding and railcar needs. He added that industry order activity has averaged 23,000 units over the past two years and said, “We’re scrapping more cars than are being ordered,” which he characterized as contributing to an inflection point for replacement demand. On the retrofit program, Tonn said FreightCar America remains on track to begin shipments under its tank car retrofit program in the second half of the year, with initial activity expected in the third quarter and a more meaningful contribution in the fourth quarter. Riordan said the retrofit program is a two-year program that starts in the third quarter and “really starts going in Q4,” with about a quarter of the total order expected in calendar 2026 and the remainder in 2027. He added that retrofits would have a lower impact on average selling price this year than next year, when the bulk of activity is expected. Riordan said the company reduced debt during the quarter and ended with $52.8 million in cash and cash equivalents. Capital expenditures were $147,000 in the first quarter, and the company continues to expect 2026 capital spending of $7 million to $10 million, including $4 million to $5 million in maintenance and targeted investments tied to previously announced tank car manufacturing initiatives. FreightCar America, Inc is a designer and manufacturer of specialized railroad freight cars, offering a diverse range of products that include tank cars, open and covered hoppers, gondolas, boxcars and centerbeam lumber cars. The company supports both new car construction and the rebuilding of existing fleets, providing custom engineering solutions to meet customer specifications and industry regulations. FreightCar America also supplies aftermarket parts, maintenance services and component remanufacturing for its own fleet and for third-party car owners. Headquartered in Chicago, Illinois, FreightCar America traces its origins to early 20th-century railcar builders and began trading as an independent, publicly-listed company on the NASDAQ under the ticker RAIL following a spin-off in 2010. The article "Freightcar America Q1 Earnings Call Highlights" was originally published by MarketBeat.

Image source: The Motley Fool. Tuesday, August 5, 2025 at 11 a.m. ET President and Chief Executive Officer — Nicholas J. Randall Chief Commercial Officer — W. Matthew Tonn Chief Financial Officer and Treasurer — Michael Anthony Riordan Nicholas J. Randall: Thank you, Chris. Good morning, everyone, and thank you all for joining us today. I am proud to share another quarter of strong performance of FreightCar America, marked by execution and resilience as we expanded our margins through operational efficiency and delivered solid profitability. This quarter also marks our fifth consecutive quarter of positive operating cash flow generation, finishing Q2 with over $61 million of cash on hand, while we have maintained strong commercial momentum with orders, adding 300 units to our healthy backlog for the year despite a challenging industry backdrop. Gross margins for the quarter expanded to 15% on 939 deliveries, up from 12.5% on 1,159 deliveries a year ago. Adjusted EBITDA margins increased 20 basis points compared to the prior year, and we generated adjusted free cash flow of $7.9 million. While revenues and deliveries were lower year-over-year, we have continued to utilize our lines effectively and deliver increased profitability as these strong results demonstrate the effectiveness of our manufacturing strategy and the operational commitment of our team. On the commercial side, our broad product portfolio and value-added solutions continue to prove themselves as competitive differentiators. We secured 1,226 new orders in the quarter, largely driven by rebuilds and conversions. These orders increased our backlog to 3,624 units, up approximately 300 units from the prior quarter, though the dollar value of the backlog remained stable, reflecting a higher proportion of rebuild and conversion work. Importantly, rebuilds and conversions continue to deliver excellent value for our customers in these market conditions. This type of work exemplifies the strength of our flexible manufacturing model, enabling us to adjust quickly to customer needs while maintaining healthy profitability. Operationally, we continue to run all 4 production lines throughout the quarter, improving productivity and supporting high throughput even at a lower volume of deliveries. This operational flexibility, which has been a hallmark of our approach remains a key advantage, allowing us to meet evolving demand and keep lead times competitive. Turning to the broader industry. The replacement cycle has moderated and industry forecast for new railcar deliveries have been revised downward for 2025. However, we remain well positioned, thanks to the diversity of our business model and our agile manufacturing presence. We continue to see strong order momentum and inquiries in our pipeline and are reaffirming our outlook for the remainder of the year. Our nimble vertically integrated model enables us to take market share and respond faster than our peers. These dynamics will position us to benefit meaningfully when new build activity picks back up. We also continue to invest in the business to strengthen our foundation for future growth. This quarter, we announced a capital investment in our tank car retrofit program as we accelerate our capability expansion and vertical integration of key components within the manufacturing process to provide our customers with the product quality and reliability they demand. We expect this initiative to continue to enhance our margin profile and create long-term value as the tank car program ramps up over the next several years. In short, we are executing well, delivering on our commitments, and continuing to strengthen the foundation of our business. I am proud of what we have accomplished this quarter, and I'm excited about the opportunities ahead. With that, I'll turn it over to Matt to walk through our commercial operations in more detail. W. Matthew Tonn: Thank you, Nick, and good morning, everyone. For the second consecutive quarter, we continued to see consistent inquiry level activity and conversion to orders. During the second quarter, we booked orders for 1,226 railcars valued at $107 million. This order intake represents back-to-back quarters with a book-to-bill ratio of 1.3 and further supports that our purpose-built commercial strategy of engineering, manufacturing, and delivering high-quality railcars resonate with our broad customer base. Our commercial strategy is focused on maintaining share while remaining responsive to changing market conditions. As new railcar demand softens and customers seek a rebuild or conversion option, we leverage our expertise in flexible plant operations, providing value and optionality to our customers. Railcar conversions has been a foundational component of our heritage with over 15,000 conversions and rebodies completed in the last 20 years. Further, our tank car retrofit program and plant readiness is advancing and on track for primary production beginning in 2026. This added capability, coupled with our modern manufacturing infrastructure, serves as a key competitive advantage, providing value to our customers, a flexible mix of new car production, conversions and rebuilds, and solid gross margin returns. From an industry perspective, we are beginning to see a softer new railcar demand environment due in large part to uncertainties around tariff policies. Although we view these economic realities as short-lived, they are affecting customer order timing, and we do expect that total 2025 industry deliveries will fall below the previously expected 40,000 units per year average. It is important to note, with over 160,000 railcars projected to reach their mandated retirement in the next 4.5 years, we fully expect overall industry annual demand to fall within the 35,000 to 40,000 range. Despite short-term extended decision cycles in certain freight segments, our team continues to drive steady quote volume by emphasizing versatility, value, and delivery certainty. Looking ahead, we remain committed to driving high-value opportunities that align with our customers' dynamic needs. We continue to prioritize margin performance, manufacturing flexibility and a diversified order book, all factors that we believe will set us apart in moderating demand environment. With that, I'll turn it over to Mike for comments on our financial performance. Mike? Michael Anthony Riordan: Thanks, Matt, and good morning, everyone. I'd like to begin by sharing a few second quarter highlights. Consolidated revenues for the second quarter of 2025 totaled $118.6 million with deliveries of 939 railcars compared to $147.4 million on deliveries of 1,159 railcars in the second quarter of 2024. Lower deliveries and revenue in the second quarter of 2025 were primarily driven by producing railcars during the quarter that will deliver throughout the second half of 2025. Gross profit in the second quarter of 2025 was $17.8 million with a gross margin of 15% compared to gross profit of $18.4 million and gross margin of 12.5% in the second quarter of last year. Higher gross margin performance was driven primarily by a favorable product mix and increased production efficiency. SG&A for the second quarter of 2025 totaled $10.1 million, up from $8.5 million in the second quarter of 2024. Excluding stock- based compensation, SG&A as a percentage of revenue increased approximately 260 basis points, primarily due to the timing of spend on various professional services. We expect SG&A, excluding stock-based compensation, to decrease in the second half of the year and normalize for the full year. In the second quarter of 2025, we achieved adjusted EBITDA of $10 million compared to $12.1 million in the second quarter of 2024, driven primarily by lower deliveries. Despite the lower volume of deliveries, adjusted EBITDA margin expanded by 20 basis points in the second quarter of 2025 compared to the second quarter of 2024. Adjusted net income for the second quarter of 2025 was $3.8 million or $0.11 per share compared to adjusted net income of $3.5 million or $0.10 per share in the second quarter of last year. During the second quarter of 2025, we recorded a noncash tax benefit of approximately $52 million, primarily due to the release of a valuation allowance on U.S. deferred tax assets related to our historical net operating losses. This decision reflects our profitability over the past 2 years in the U.S. as well as our confidence in future profitability and taxable income generation in the U.S. This noncash benefit was partially offset by a $47.6 million noncash adjustment to our warrant liability. As a reminder, the warrant liability adjustment accounted for in adjusted net income is a noncash item with no effect on shares outstanding or earnings per share calculations, reflecting only the valuation change of the warrant holders' investment as our share price appreciated during the quarter. This quarter, we generated $8.5 million in operating cash flow, marking our fifth consecutive quarter with positive cash flow from operations, our best in nearly 20 years. This is a testament to the collective FreightCar America team's efforts over the past several years to transform our business. Additionally, our adjusted free cash flow for the first half of 2025 was approximately $20.4 million, reflecting the continued execution of our commercial strategy, operational discipline, and a more efficient capital structure. We closed the quarter with $61.4 million cash on hand and no borrowings under our revolving credit facility. Capital expenditures for the second quarter totaled $0.6 million. For the full year 2025, we now expect capital expenditures to be in the range of $9 million to $10 million. Approximately $4 million is allocated to routine capital for ongoing operations. The remaining balance is growth capital for both our tank car retrofit program that begins next year as well as future production of new tank cars. This quarter's increase in growth capital will vertically integrate aspects of our future tank car operations and strengthen our position in the market. We anticipate that this additional investment will contribute an additional $6 million of EBITDA over the next 2 years and be a meaningful contributor to gross margin expansion in future periods. Our strong cash flow generation and disciplined approach continues to support these growth investments while keeping our financial position healthy with trailing 12-month net leverage remaining around 1.2x. Looking ahead, we're focused on ensuring that every dollar we invest supports scalable high-return opportunities. With a healthy balance sheet and steady cash flow, we are well positioned to support future growth and deliver improved profitability. With that, we'll now open the line for questions and answers. Operator: [Operator Instructions] Our first question comes from Mark Reichman with NOBLE Capital Markets. Mark La France Reichman: Compared to the prior year period, railcar sales fell about 26%, while aftermarket sales increased almost 61%. And I was just wondering how much of that is due to productive capacity being dedicated to custom fabrications versus the timing of rail orders within the year? And what are your expectations for the third and fourth quarters? Nicholas J. Randall: Mark, it's Nick. I'll answer that one and then Mike may do some follow-up on some of the timing issues of it. So I think, yes, a couple of things to unpack in that question. So in Q2, we did produce a higher volume than we shipped in Q2. We produced some products that were shipped in a subsequent quarter. So from a production perspective, we are firing up, our planning process leveled out so that we don't have large swings in labor up or down. So we really utilize our capacity in an effective manner to drive our business. So that kind of really explains why there's a difference year-on-year Q2 to Q2 in the volume shipped. So yes, you'd expect to see those ship in a later quarter in the year and see that sort of smooth off. I would just clarify, though, our production capacity wouldn't be a constraint on sales. The customer demand dictates our sales rather than any capacity concerns. But the aftermarket piece, I'll let Mike add on to that. Michael Anthony Riordan: So on a quarter-over-quarter, we continue to expand our presence in the aftermarket, and we're just seeing sales growth there that we continue to like and see in the future. But to Nick's point, production was higher in the second quarter than you'll see in the delivery numbers with a balance of cars produced and we'll deliver throughout the second half. And you'll see that maintaining the full year delivery guidance, you'll see Q3 and Q4, we expect to be much higher deliveries than what you've seen in Q1 and Q2. And all of that is simply timing to customer schedules and when they want to take cars. Mark La France Reichman: And the second question is just manufacturing segment gross margins. If you look at them kind of historically, but in the first and second quarter, 13.4% and 13.5%, while the aftermarket margins were 37.4% and 36.8%. So do you think the first and second quarters are indicative of forward gross margin expectations? And how are the tank car retrofits expected to impact revenue and margin in 2026 and 2027? Nicholas J. Randall: So I'll split that into two separate pieces, Mark. One is the current year of 2025, and then the other one is future years. Typically, we don't make too many comments on future years, but we've mentioned tank car retrofits, so we can talk a bit about the timing of that at least. So in this year, the margins we've seen in Q1 and Q2 have been a mix between product mix and really accelerating our productivity, our operational productivity, at least on the whole goods side, which has been favorable for us. I would expect to see those carry through in Q2 and Q3 -- sorry, Q3 and Q4 for the balance of the year. So I don't expect to see too many changes from what we've demonstrated in Q1 and Q2. Certainly, with the volume going up, you'll see the shipments go up, but the margins should stay pretty consistent. And as mentioned before, we try and -- we haven't been communicating large layoffs or changes in our organization. We've been able to be consistently retaining that well-trained workforce so that we can build on the margins we get each quarter. So that's -- I would just use that as an indicator of what Q3 and Q4 will look like and what the whole year will look like. As it comes to future years, we don't generally communicate on those. We do have the tank car retrofit program, which we've communicated. And as Matt and Mike both commented in the prepared notes, that sort of starts partway through 2026. We've got a -- I think last quarter, you asked about a fifth line. We would look at our latest increment -- order quantity is about 1200 units a year each quarter -- sorry, 1200 units per quarter coming through. If we sustain quarters like that, then we'd obviously look to add that fifth line to produce those retrofits, and that would obviously alter the performance accordingly. But we'll know more about that as we enter into 2026 rather than sort of the summer of 2025, if that helps. Mark La France Reichman: No, it's very helpful. Operator: We have our next question from Aaron Reed with Northcoast Research. Aaron Bruce Reed: So what I want to know little bit more about, and I know you mentioned it was you said the tank line is expected to add around $6 million in EBITDA here in '26 and '27. I just want to make sure I heard that right, as well as if you give a little more color around the timing of what that might look like would be helpful. Nicholas J. Randall: Yes. Just for clarification, obviously, it's $6 million over 2 years, right? So that's -- we've been talking about our plant will be ready to the tank car conversion program in a matter of months. And we will -- the contract we have start sort of mid to end Q2 of 2026 and then bleeds over into 2027 as well. But we've got inquiries and other orders we may add to that, but the specific one that you referenced is really scheduled to start in the back half of Q2 of 2026. Aaron Bruce Reed: Perfect. the other question I have is, I know there's been a lot of talk, especially in terms of mergers between some of the Class 1 rail carriers. How is that expecting to impact you? Or is that kind of not really going to impact you one way or another? I'm getting a lot of questions on that. Nicholas J. Randall: I'd say it's a difficult one to say for sure. Will it impact the industry? I would expect so. I expect there's a couple of things. One is I would expect there to be some productivity and customer enhancements in the railroad industry. That will ultimately help railroads, just the industry overall. Improved productivity and improved customer service levels always help from that perspective. From a builder's perspective, what's good for rail is good for a builder. That's the way I always look at it. I think it's too early to say on any timing or orders or content or product types. That would still get to be seen. But I think it's -- if there's an enhancement or improvement for customers and end users in rail, I think that rises the tide for the rail industry. It's the way I would look at it. But it's very early days, Aaron. So it's not something that a lot of people have had a lot of time to digest and look at the true details behind it. Aaron Bruce Reed: That makes sense. And then one more quick question is one of the things that we're seeing a lot of interest in, obviously, is AI and the massive demand and uptick in energy needed. So it looks like there's been a bit of a resurgence in coal. And my understanding is a lot of those cars have been retired as the expectation was that coal is going to kind of fizzle out. Is there a potential for increased demand in either repairs or even maybe new opened up hoppers that might develop here in the next coming quarters or even year that wasn't necessarily expected a year or 2 ago? Or is there still, would you think, ample supply that means that wouldn't necessarily be required to get additional or repaired cars? Nicholas J. Randall: Sure. I will make some comments on this and then I'll ask Matt and Mike maybe to comment on it as well. So just to put into context, I think for the entire railroad industry, coal is probably still the largest single commodity moved across the railroad networks in its own right. So coal is a very large proportion. And as you mentioned prior to probably 2 years ago, it's been on a constant decline and a very predictable decline from a usage perspective. So any change to that certainly would be a positive for people who are involved in either the repair, the restoration or the extended life of units that are used to move coal. So I think FreightCar America has one of the largest fleet of coal units -- coal railcars out there. So yes, so we would expect to see -- we do see a lot more inquiries about extending the life of existing coal-related assets in the rail network, which is very helpful. I think it's too early to look at whether that would transpire into a new car build. I think there's a lot of rail assets dedicated to coal out there. But I don't know how close to the end of life they actually are and whether people would look to do a conversion into coal or a conversion from coal. So I think the conversion piece is probably more where we would see activity on that. Obviously, we do a lot of conversions, so it's very beneficial for us. But in the near term, it's the extension of life from maintenance repairs and parts, which is clearly well within the remit of our aftermarket business, which feeds that industry. Mike, anything I missed on that? Michael Anthony Riordan: No. Operator: We have our next question from Brendan McCarthy with Sidoti. Brendan Michael McCarthy: I wanted to circle back to gross margins. I think that you had mentioned we should see a similar gross margin level of right around 15% for the back half of this year. I just wanted to look longer term. I know there's the 1,000 tank car conversion order in the backlog, obviously, higher margin there. Do you see any reason why gross margins may step down from that 15% level long term? Nicholas J. Randall: I'll take a stab at that to begin with, Brendan, and then Mike can add any additional detail. So there's a couple of things. So first of all, mix does play a large influence. So when you ask -- when we look outside our lead time window, it's hard to nail mix down. All I know from a planning and from an agile manufacturing perspective, we are confident and capable to adjust to whatever the customer demand is in the future. But the margins will flex, obviously, predicated by mix. So that is somewhat unknown from a mix perspective. So if we look too far out, that's difficult to sort of predict with any certainty. I would say there's no -- we've got some nice pipelines and some nice inquiry levels. I think 15% is at the high end, which is nice. But obviously, we would work, maybe dilute that as well in the out period as well. If you think about this year for the next 2 quarters as we finish for calendar year 2025, I think the biggest thing we look at is our shipments will probably go up in Q3 and Q4 compared to what they've been in Q1 and Q2. We did build ahead in Q2 for some items that we'll ship in the second half of the year. I think that the margins will be similar. So it's going to depend on what ships and exactly when it ships into Q3 and Q4. But it's really mix dependent with an underlying productivity enhancements, which we keep on driving, which is really influencing those gross margins most. Mike, anything to add? Brendan Michael McCarthy: That makes sense. Just looking at gross margin gains maybe year-to-date, I guess, how much of that do you attribute to that manufacturing efficiency? And how much do you attribute to just the product mix in general? Nicholas J. Randall: It's difficult to split that out in an easy way. There are certain products that also have a manufacturing productivity mix that go with them -- enhancement that go with them simply because of the length of the order, the size of the order and the volume rates we produce. I would say there's a generic trajectory that we're on for productivity improvement, which incrementally improves our underlying operational productivity quarter-on-quarter, and that's predictable and reliable. And then you have the peaks and troughs of the product margin that ships at any given time, which adds on to that. So I would -- our operational productivity will continue to increase quarter-over-quarter as we offset any incremental pay rise improvements or inflation pressures. And then the product mix margins are really predicated by the product type. Now if you think about output this year, obviously, we talked about tank cars and tank car retrofit, which generally have a more lucrative margin with them. So I'd expect it to go with that product to go up. But I generally -- we're trying to pin it down to which quarter, which we ship, which product in the out periods is a bit more difficult than just looking at the market per se. Brendan Michael McCarthy: That makes sense. one more question for me. I know you talked about an increase in growth CapEx as it relates to the tank car capabilities in your manufacturing. Just wondering if you could provide any color on the tank car conversion pipeline, maybe conversations that you're having with potential customers there. Just curious as to what that pipeline might look like. Nicholas J. Randall: Sure. I'll talk a bit about that. So obviously, we secured a large order. We've previously communicated that. There is a federally mandated date, which I think is back end of 2029 by the time that all these cars must be converted for use on across North America. So there is -- I think there's some industry estimates that put somewhere between, I don't know, Matt, somewhere between 10,000 to 17,000 units likely would need to be converted in order to stay operational. The owners of those units have some decisions to make. Do they want to replace them with new or do they want to convert them, and that would depend on how much usable life and what type of usable life is left on them. So there's certainly a significant chunk of customer appetite out there for conversions. We continually have conversations with people. This decision is certainly not a capacity issue for us. We would accommodate orders that any customer would like to get converted in that time frame. The question really is, would they like to -- would they prefer to switch it to a new car as opposed to a conversion? And obviously, we are preparing and readying ourselves to enter into the new car market as well. So we are staying close to those conversations, whether it be a conversion or a new car in that late '26 or calendar year '27 period. But it's the same customers that we talk about the same product. We just provide different routes to solutions depending on what their need is at that time. Operator: We have a follow-up question from Mark Reichman with NOBLE Capital Markets. Mark La France Reichman: This question is for Matthew. According to the RSI, industry-wide orders and deliveries were 11,322 and 15,726, respectively, for the first 6 months of 2025. I'm just kind of curious where -- Matt, where do you think those numbers will fall out for the year? W. Matthew Tonn: Yes, Mark, I think we're looking at another year, back-to-back years of total industry order volume that will be sub 30,000 railcars with an upturn in demand when we get into the years '26. Nicholas J. Randall: I'll just add that we do see based on pipeline activity, we do have an expected order increase in the second half of the year. Mark La France Reichman: Okay. So like the first quarter, you were 25% of the orders and the second quarter, about 19.7%. So you expect to kind of maintain those levels? Or do you think you can continue to capture market share? And then, of course, you've got the backlog as well? W. Matthew Tonn: Mark, we expect to continue to have market share gains. And I would point out that our flexibility and the capabilities to work with customers on specific demands beyond just new cars is something that's not measured in terms of total market share when you compare it to ARCI numbers. However, keep in mind that conversions, rebodies, and rebuilds are a very valuable component of our offering and provide customers that optionality. So the market share numbers themselves don't tell the full story. But we do expect to see continued growth in market share based on our overall offering. Mark La France Reichman: Okay. And then the last one question is just for Nick. In the recent presentation, there's mentioned that the fifth line is expected to increase capacity by 20% or 1,000 units. So you've got the 4 production lines at 1,250. And I was just kind of curious why it would be 1,250 versus 1,000? Nicholas J. Randall: Mark, it's a good question. When you look at our capacity, we typically use 1,250 because of the four lines and then the fifth line will be in some way used for preparation for entry into the tank car market, and we would look at that may be a bit of a slower ramp-up. So that's where that sort of slight delta is between a fifth line. Whichever line we convert to tank cars, as a new entrant, we would want to just ease ourselves in a little bit rather go full volume straight away. So that really sort of explains that delta. I would just caveat that capacity constraint would never -- well, I wouldn't say never, but in the foreseeable period, wouldn't be a constraint for us. We are currently running four lines at about 1,250 a line, running about 70% of the work week. So there's obviously shift modifications and changes we could do to increase that capacity if we ever needed to from that perspective. But in answer directly to your question, why is the fifth one coming at 1,000, not 1,250, it's more to do with us being a little bit cautious on a new product type, new segment. We would just have to take that into account when we look at how our capacity looks. Operator: I am not showing any further questions at this time. I would now like to turn the call back over to Nick Randall for any further remarks. Nicholas J. Randall: So thank you. I would just like to summarize a couple of bullet points from where we finished. So at the end of Q2, we maintained strong commercial momentum with our orders driven by rebuilds and conversions, adding 300 units to our healthy backlog for this year despite, as people mentioned, a challenging industry backdrop. We expanded our gross margins to 15%, that's 250 basis points through operational efficiency and driven solid profitability. We generated $8.5 million in operating cash flow this quarter, marking our fifth consecutive quarter of positive cash from operations and adjusted free cash of $7.9 million. Our strong cash position provides flexibility to invest strategically while maintaining our financial discipline. We announced a capital investment in our tank car retrofit program, accelerating capability expansion and advancing vertical integration of key components within our manufacturing process. And we are well positioned to capitalize on market opportunities ahead and continue to deliver sustainable shareholder value. And with that, I thank you all for your time. Thank you. Operator: Thank you. This concludes today's teleconference. You may now disconnect your lines at this time. Thank you for your participation and have a great day. Before you buy stock in FreightCar America, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and FreightCar America wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $496,473!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,216,605!* Now, it’s worth noting Stock Advisor’s total average return is 968% — a market-crushing outperformance compared to 202% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of May 4, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends FreightCar America. The Motley Fool has a disclosure policy. RAIL Q2 2025 Earnings Transcript was originally published by The Motley Fool

Continued Aftermarket revenue growth of 86% Gross profit margin of 17%, with 190 basis points of gross margin expansion Sequential backlog growth of 14% CHICAGO, May 04, 2026 (GLOBE NEWSWIRE) -- FreightCar America, Inc. (NASDAQ: RAIL) (“FreightCar America” or the “Company”), a diversified manufacturer and supplier of railroad freight cars, railcar parts and components, today reported results for the first quarter ended March 31, 2026. First Quarter 2026 Highlights Revenues of $64.3 million, consistent with expectations, compared to $96.3 million in the first quarter of 2025, with railcar deliveries of 577 units compared to 710 units in the prior year period Gross margin of 16.8% with gross profit of $10.8 million, compared to gross margin of 14.9% with gross profit of $14.4 million in the first quarter of 2025 Recorded $49.1 million of non-cash adjustments related to warrant liability, resulting in net income of $41.6 million, or $1.15 per share, and adjusted net loss of $479 thousand, or $(0.04) per share Adjusted EBITDA was $3.2 million, representing a margin of 4.9%, compared to $6.4 million and a margin of 6.7% in the first quarter of 2025 Ended the quarter with a backlog of 2,058 units valued at $156 million, reflecting a diversified mix of railcar conversion programs and new railcar builds “Our first quarter results were in line with expectations and reflective of the current industry environment. Despite this environment, we continue to win high quality commercial opportunities, create new efficiencies and grow our aftermarket parts business. This represents our highest quarterly gross margin in over a decade and demonstrates that we are well positioned across the cycle,” said Nick Randall, President and Chief Executive Officer of FreightCar America. “Fleets continue to age and deferred replacement needs are contributing to pent-up demand across the industry. As replacement demand materializes, FreightCar America is well positioned to respond quickly and capitalize in a shorter lead-time environment, supported by scalable capacity and strong operational flexibility. At the same time, our differentiated full-service railcar offering, including retrofits, conversions and an expanding aftermarket presence, positions us well to drive growth and create value across a range of market conditions.” Randall continued, “Looking ahead, we remain focused on disciplined execution against the opportunities we see across our business as the year progresses. Our tank car retrofit program remains on track, and we expect continued growth in our aftermarket program. Together, our total backlog, productivity improvements, flexible manufacturing footprint and disciplined commercial approach provide visibility into our full-year expectations and reinforce our ability to perform across a range of market conditions.” Fiscal Year 2026 Outlook The Company is reaffirming the outlook for fiscal year 2026: 1. The Company does not provide a reconciliation of forward-looking Adjusted EBITDA guidance due to the inherent difficulty in forecasting and quantifying adjustments necessary to calculate such non-GAAP measure without unreasonable effort. Material changes to such adjustments, including warrant liability and non-core operating items, could affect future GAAP results. Mike Riordan, Chief Financial Officer of FreightCar America, added, “During the quarter, we continued to grow our backlog and maintained solid balance sheet flexibility, enabling us to further reduce debt and preserve financial strength. We are well positioned to continue executing on our capital allocation priorities, including targeted organic investments that expand our capabilities and disciplined selective opportunities that strengthen our platform. Looking ahead, we expect these investments to support profitable growth across the business and drive long-term value for our shareholders.” First Quarter 2026 Conference Call & Webcast Information The Company will host a conference call and live webcast on Tuesday, May 5, at 11:00 a.m. (Eastern Time) to discuss its first quarter 2026 financial results. FreightCar America invites shareholders and other interested parties to listen to its financial results conference call. Teleconference details are as follows: May 5, 2026 11:00 a.m. Eastern Time Phone: 1-877-407-0789 or 1-201-689-8562 Webcast access: https://viavid.webcasts.com/starthere.jsp?ei=1759680&tp_key=d43c008515 An audio replay of the conference call will be available beginning at 3:00 p.m. (Eastern Time) on Tuesday, May 5, 2026, until 11:59 p.m. (Eastern Time) on Tuesday, May 19, 2026. To access the replay, please dial (844) 512-2921 or (412) 317-6671. The replay passcode is 13760024. An archived version of the webcast will also be available on the FreightCar America Investor Relations website. About FreightCar America FreightCar America, headquartered in Chicago, Illinois, is a leading designer, producer and supplier of railroad freight cars, railcar parts and components. We also specialize in railcar repairs, complete railcar rebody services and railcar conversions that repurpose idled rail assets back into revenue service. Since 1901, our customers have trusted us to build quality railcars that are critical to economic growth and instrumental to the North American supply chain. To learn more about FreightCar America, visit www.freightcaramerica.com. Forward-Looking Statements This press release contains statements relating to our expected financial performance, financial condition, and/or future business prospects, events and/or plans that are “forward-looking statements” as defined under the Private Securities Litigation Reform Act of 1995. Forward-looking statements represent our estimates and assumptions only as of the date of this press release. Our actual results may differ materially from the results described in or anticipated by our forward-looking statements due to certain risks and uncertainties. These risks and uncertainties relate to, among other things, the cyclical nature of our business; adverse geopolitical, economic and market conditions, including inflation; material disruption in the movement of rail traffic for deliveries; fluctuating costs of raw materials, including steel and aluminum; delays in the delivery of raw materials; our ability to maintain relationships with our suppliers of railcar components; our reliance upon a small number of customers that represent a large percentage of our sales; the variable purchase patterns of our customers and the timing of completion; delivery and customer acceptance of orders; the highly competitive nature of our industry; the risk of lack of acceptance of our new railcar offerings; potential unexpected changes in laws, rules, and regulatory requirements, including tariffs and trade barriers (including recent United States tariffs imposed or threatened to be imposed on China, Canada, Mexico and other countries and any retaliatory actions taken by such countries); and other competitive factors. The factors listed above are not exhaustive. New factors emerge from time to time that may cause our business not to develop as we expect, and it is not possible for us to predict all of them. We expressly disclaim any duty to provide updates to any forward-looking statements made in this press release, whether as a result of new information, future events or otherwise. Non-GAAP Financial Measures This press release includes measures not derived in accordance with generally accepted accounting principles (“GAAP”), such as EBITDA, Adjusted EBITDA, Adjusted net income (loss), Adjusted EPS, and Free cash flow. These non-GAAP measures should not be considered in isolation or as a substitute for any measure derived in accordance with GAAP and may also be inconsistent with similar measures presented by other companies. Reconciliations of these measures to the applicable most closely comparable GAAP measures, and reasons for the Company’s use of these measures, are presented in the attached pages.