FreightCar America, Inc. Q1 FY2026 earnings call

• First quarter results in line with expectations and consistent with 2026 operating cadence. - Commercial differentiation and expanding aftermarket business (grew 86% y/y) distinguish the company. - Achieved high gross margin (17%) on lower line utilization, highlighting operational agility. - Commercial activity encouraging with improved pipeline activity and solid order intake. - Scaled manufacturing footprint, established four production lines, increased productivity by ~50% over 24 months. - Programs like TrueTrack reinforce accountability, visibility, and quality. - Focused on expanding aftermarket platform, with recent acquisition as an important step. - Market conditions for new railcar builds consistent with prior year, underlying demand remains resilient as fleets age.

Revenue for the quarter was $64.3 million. Gross profit was $10.8 million, gross margin was 16.8% (up 190 basis points from last year). Aftermarket business grew 86% year over year. Backlog at the end of the quarter totaled 2,058 units valued at approximately 156 million. Revenue in first quarter of 2025 was $96.3 million, gross profit was $14.4 million, gross margin was 14.9%.

• Reaffirming full year 2026 guidance. - Expectations for stronger second half supported by backlog visibility, scheduled program activity, aftermarket momentum, and continued productivity improvements. - 2026 capital spending expected to be seven to 10 million, including ~four to five million of maintenance spending and targeted investments for tank car manufacturing initiatives.

Q: Looked at rail car sales revenue divided by rail cars delivered and backlog value per rail car, asked about product mix changes and if average selling price would get above 100,000.

A: Mike said mix shifted towards conversions in Q1, expects average selling price to go above 100,000 in back half as mix shifts back to new car activity.

Q: Asked about cadence of rail car deliveries and net rail core orders received.

A: Matt and others said order pipeline is active, deliveries weighted towards second half, able to convert orders quickly with efficient footprint.

Q: Asked if deliveries impacted by preparing for tank car deliveries.

A: Nick said no, productivity improvements have increased capacity on first four lines.

Q: Asked about total deliveries for remainder of 2026 and 2027.

A: Matt said deliveries lag behind order activity, typically 25 - 30,000 deliveries in 2026.

Q: Asked about competitors' pricing action.

A: Nick said competitors may respond, but company focuses on being most valuable producer.

Q: Asked about Q1 gross margin dissection.

A: Mike said majority structural, lower price tag on conversions led to higher margin.

Q: Asked about confidence in hitting guidance.

A: Nick and Matt said guidance based on own pipeline and customer orders, confident in meeting it.

Q: Follow-up on deliveries and flexibility.

A: Nick said capacity is there, can flex volume, sometimes build cars ahead of schedule to smooth out process