FreightCar America, Inc. Q3 FY2025 earnings call

• Strong third quarter highlighted by over 42% revenue growth, record adjusted EBITDA of $17 million at the new facility, up 56% YOY. • Gross margin of 15.1% and adjusted EBITDA margin of 10.6%, most profitable quarter since relocating production to Mexico. • Operationally, Castanos team executed well with improvements in safety, quality, throughput, and cost structure. • Focus on TrueTrack process integrating digital tracking for on-time deliveries and increased efficiencies. • Plant layout enhancements underway to improve flow, productivity, and margins. • Focus on sustainable profitability through adaptability and custom solutions for customers.

FreightCar America delivered a strong third quarter in 2025. Consolidated revenues were $160.5 million with deliveries of 1,304 railcars, a 42%+ revenue growth. Gross margin was 15.1%, adjusted EBITDA was $17 million (a record for the third quarter at the new facility, growing 56% vs prior year), with an adjusted EBITDA margin of 10.6%. The backlog stood at 2,750 railcars valued at approximately $222 million at quarter-end.

• Reaffirmed full-year adjusted EBITDA and railcar delivery guidance ranges. • Adjusted revenue range down to $500 to $530 million due to product mix change. • Expect to maintain strong margins and close the year with solid positive cash generation. • Positive free cash flow for the year is on track.

• General business risks as described in FreightCar America's Form 10-K, including those outside the company's control that may cause actual results to differ from forward-looking statements. No detailed specific risks discussed in depth in the provided transcript.

Q: Could you walk us through plans to prepare for tank car conversions and entrance in new tank car markets, and uses of CapEx?

A: CapEx investments for tank car retrofit were just a change in timing, moving from late December to early January 2026. Well ahead of schedule for AAR certifications and capital equipment for tank car conversions.

Q: On revenue guidance and product mix shift between rebuilds and new builds?

A: Revenue guidance drop is due to higher proportion of conversions than original forecast, but adjusted EBITDA remains same, implying average selling price for unit count stays same.

Q: Demand for coal car repair and its lift into 2026?

A: Coal car repair is part of aftermarket business, with sustained demand for components as coal-powered facilities extend life.

Q: Disruptions or order delays tied to government shutdown or policy?

A: No direct disruptions seen as business is less susceptible to short-term items like government shutdowns; border crossings are highly automated with no seen disruptions.

Q: Step down in Q4 adjusted EBITDA and drivers?

A: Q4 traditionally lower margin due to annual planned maintenance shutdown and higher proportion of commoditized cars like covered hoppers.

Q: Addressable market for tank car retrofit and transition to new tank cars?

A: Retrofit program helps get AAR approvals and prepare plant for new tank car production; aim is to transition to new tank cars post-retrofit program.

Q: Market share of new railcar orders and attribution?

A: Achieved over 20% of addressable market order share, attributed to experience, breadth of product, and strong execution including TrueTrack process and customer relationship management.