FreightCar America, Inc. (RAIL) has reported a 99.66 percent plunge in profit for the quarter ended Sep. 30, 2016. The company has earned $0.05 million in the quarter, compared with $14.83 million for the same period last year. Revenue during the quarter plunged 52.94 percent to $113.46 million from $241.11 million in the previous year period. Gross margin for the quarter contracted 369 basis points over the previous year period to 8.36 percent. Operating margin for the quarter stood at negative 0.05 percent as compared to a positive 9.51 percent for the previous year period.
Operating loss for the quarter was $0.05 million, compared with an operating income of $22.92 million in the previous year period.
However, the adjusted operating income for the quarter stood at $1.48 million compared to $18.34 million in the prior year period. At the same time, adjusted operating margin contracted 630 basis points in the quarter to 1.30 percent from 7.61 percent in the last year period.
"We are focused on making continued improvements in our production processes and reducing our overhead costs. We are encouraged with the progress of the production improvements initiated in the third quarter and their contribution to the bottom line improvement from last quarter," said Joe McNeely, president and chief executive officer. "We remain on track with our cost reduction efforts, which we continue to believe will improve pre-tax operating results by $5 million when fully implemented by the middle of next year."
Operating cash flow remains negative
FreightCar America, Inc. has spent $54.64 million cash to meet operating activities during the nine month period as against cash outgo of $61.01 million in the last year period. The company has spent $0.14 million cash to meet investing activities during the nine month period as against cash inflow of $41.94 million in the last year period
The company has spent $3.50 million cash to carry out financing activities during the nine month period as against cash inflow of $0.54 million in the last year period.
Cash and cash equivalents stood at $24.79 million as on Sep. 30, 2016, down 73.91 percent or $70.21 million from $95 million on Sep. 30, 2015.
Working capital declines
FreightCar America, Inc. has witnessed a decline in the working capital over the last year. It stood at $176.40 million as at Sep. 30, 2016, down 19.69 percent or $43.26 million from $219.66 million on Sep. 30, 2015. Current ratio was at 3.65 as on Sep. 30, 2016, up from 3.17 on Sep. 30, 2015.
Cash conversion cycle (CCC) was almost stable at 48 days for the quarter, when compared with the last year period. Days sales outstanding went up to 28 days for the quarter compared with 13 days for the same period last year.
Days inventory outstanding was almost stable at 64 days for the quarter, when compared with the last year period. At the same time, days payable outstanding went up to 43 days for the quarter from 27 for the same period last year.
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