FreightCar America Inc. (RAIL) stock prices were up 11.90% shortly after market trading commenced on August 16th, 2021. This brought the price per share down to USD$5.83 early on in the trading day.
RAIL Stock’s Stellar H1 2021
The second quarter of fiscal 2021 saw RAIL stock report having achieved the majority of its goals for the quarter. This included a third consecutive quarter of positive gross margin, positive operating income at the manufacturing level, and a solid mix of new business awarded. The first half of fiscal 2021 saw a reduction in adjusted EBITDA loss go down to USD$2 million. This is comparable to the USD$23.2 million Adjusted EBITDA loss in the second quarter of fiscal 2020. This year-over-year improvement reflects the massive scope of the company despite multiple supply chain constraints and significant raw material inflation.
RAIL Stock’s Expansion
RAIL stock is encouraged by signs indicating an improved demand environment across all of its end markets. Sales inquiries continue to remain positive, with guidance for the rest of 2021 having been raised for railcar deliveries. Furthermore, the company announced its Board of Directors having approved plans to add two more production lines at the Castenos manufacturing facility. This move is expected to double its capacity within a year. The planned expansion is a critical next step to facilitating increases in incremental volumes, as well as significantly improving our long-term earnings profile.
Solid Liquidity Position
The company is also benefitting from its relationship with its financial partner. This includes the recently amended agreement, according to which RAIL stock has a USD$25 million line of credit available to it. This line of credit, in conjunction with cash and cash equivalents in the amount of USD$21 million, indicate a solid liquidity position. These funds will support working capital and growth needs over the next several quarter.
Consolidated Revenue Reports
Consolidated revenues for the second quarter of 2021 came in at USD$37.4 million. This is comparable to the USD$32.4 million reported in the prior quarter and USD$17.5 million in the prior-year quarter. Q2 2021 saw the company deliver 313 railcars.
Future Outlook for RAIL Stock
The company reported a strong second quarter of fiscal 2021, with management continuing to take steps to continue its trajectory of success. RAIL stock is keen to leverage the resources at its disposal to usher in further organic growth. Investors are hopeful this will translate into significant and sustained increases in shareholder value.
