FreightCar America, Inc. Price & Performance (RAIL)

Thank you and welcome. Joining me today are Nick Randall, Chief Executive Officer Mike Reardon, Chief Financial Officer Matt Ton, 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, future events or plans may include forward looking statements defined under the Private Securities Litigation Reform Act 1995. Participants are directed to FreightCar America's Form 10 ks for a description of certain business risks, some of which may be outside of control of the company and may cause actual results to materially differ those expressed in the forward looking statements. Express Leads Disclaim Any Duty To Provide Any Updates To Our Forward Looking Statements Whether As A Result Of New Information, Future Events Or Otherwise. During Today's Call, There Will There Will Also Be 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. [indiscernible] earnings release for the fourth quarter twenty twenty four is posted on the company's website at freightcaramerica.com along with our 10 ks, which was filed yesterday aftermarket.

With that, I will now turn the call over to Nick for opening remarks.

Thank you, Chris. Good morning, everyone, and thank you all for joining us today. As we close out 2024, I want to reflect on a significant year of relentless execution and achievement for the company, We set ambitious goals throughout the year and exceeded expectations as we vertically integrated pure play manufacturing presence. During the fiscal year 2024, we achieved a 57 on orders won across our addressable market, despite our addressable market being down 45% year on year. We delivered 56% revenue growth for the year and exceeded our adjusted EBITDA guidance delivering $43,000,000 representing a 114% increase over a prior year. On a per railcar basis, adjusted EBITDA per car also improved dramatically 48% to 9,858 up from 6,658 in the prior year. Underscoring the strength of our operational efficiency and profitability initiatives. Lastly, we have generated $45,000,000 in operating flow for the full year and $22,000,000 in adjusted free cash flow representing a significant step up as we continue to generate Simply put, we are in a much stronger position as we enter 2025 on our position to deliver sustainable results ahead. Looking back on the year, our ability to execute at a high level was evident across the board.

Our team consistently delivered on our operational and commercial commitments, ensuring robust superior quality product shipments. We hit a major milestone producing our tenth thousand railcar at our Castanios facility a testament to the strength of our operations. Additionally, 2024 marked a successful launch into the Tank Car segment, proving as an entry point as we look to expand our reach and our competitive advantages in this higher margin space. Alongside our operational success, we also took key steps to strengthen our financial foundations further. We had previously committed to in 2024, we redeemed all outstanding preferred shares strengthen our balance sheet and improve our capital efficiency resulting in approximately $9,200,000 in cost savings. Subsequently expanded our ABL credit facility which enhances our borrowing capacity, reduces our cost of capital and provides the financial flexibility needs to support our long term growth strategy. These actions reinforce our commitment to maintaining a strong and stable capital structure while improving our ability to seize new growth opportunities as they arise. Beyond our financial and operational achievements, we outperformed the broader market. Capturing additional market share despite industry headwinds. Our targeted pursuit of high value opportunities has reinforced our position as a leading pure play railcar manufacturer and positions us well for sustained long term growth Specifically, we maintained our market leading position in open top hoppers, while successfully expanding our presence in covered hoppers across medium and large volume cars.

Additionally, we secured a meaningful multiyear agreement with tank car recertifications our consistent commitment to operational excellence deepens customer relationships and enhances brand loyalty as customers increasingly value our diverse product offering exceptional quality, customizable capabilities and outstanding service. Turning to the industry. I am sure you are all aware tariffs present an element of uncertainty. However, I would like to remind you all of the fundamentals of our industry. The railcar sector operates within a stable replacement cycle driven by the mission critical role of rail transportation in moving bulk commodities. While customers may defer purchases in the short term, long term postponement is rarely feasible due to the essential nature of our services. Even during periods of elevated steel prices, customers continue to invest in railcars, underscoring the industry's resilience. For example, in 2021, despite a nearly fivefold increase in steel prices, railcar owners seeded with scrapping order units and placed new car orders. Reflecting resilient demand. For clarity, we are not directly impacted by the current steel and aluminum tariffs as we source the vast majority of our materials from The USA already. Rail transport is indispensable for moving book such as food products, chemicals and coal.

Goods that are largely recession proof According to the Federal Railroad Administration, 52% of rail freight carloads consist of bulk commodities, This resilience underscores the critical importance of maintaining an up to date and efficient railcar fleet to ensure the uninterrupted flow of these essential goods. It's also important to note that postal election years typically correspond with a slight downturn in railcar replacement orders This phenomenon is attributed to market uncertainties that prompt customers to temporarily replay capital expenditures However, this trend represents a deferment rather than a loss of demand. With order rates historically rebounding post election as confidence is restored and deferred investments are actualized. Despite a moderate pace in order placements, FreightCar America continues to experience robust inquiry levels. Customers remain actively engaged in the procurement process diligently evaluating product offerings and conducting vendor assessments. This sustained engagement indicates a readiness to transition from inquiry to order as market conditions stabilize. Our inherent flexibility and agile manufacturing capability uniquely position us to meet emerging demand efficiently. As customer inquiries evolve into confirmed orders, our operational agility enables us to expedite delivery timelines.

Providing a competitive advantage in responsiveness and customer satisfaction. As we look ahead, we remain encouraged by our positive momentum Even as we acknowledge the ongoing uncertainty surrounding tariffs, our team continues to closely monitor these developments to proactively assess and mitigate With our unique manufacturing footprint and our operational agility, we are well equipped to swiftly adapt to market shifts. Our strategic priorities remain clear heading into 2025, driving continued growth and enhanced cash generation through disciplined financial management and strong operational excellence. We entered the new year with a robust balance sheet and a solid operational foundation which provide momentum confidence and a steadfast commitment to delivering value to our customers employees and shareholders. The significant process we achieved in 2024 positions us for even greater success ahead And I look forward to sharing our continued accomplishments accomplishments with you throughout the coming year. Thank you to our team your hard work and dedication Your commitment is what drives our success and I'm proud of what we achieved together. With that, I will now turn it over to Matt.

Thanks, Nick, and good morning, everybody. Throughout 2024, we experienced strong and sustained inquiry activity reflecting the continued demand for high quality purpose built railcars. For the full year, we secured orders totaling 4,245 railcars valued at approximately $447,000,000 We maintain our leading position in open top hoppers driven in part by our continued success and strong customer preference of our VersaFlo at Aggregates VersaFLOOD's versatile design featuring both transverse and longitudinal discharge options superior payload capacity, and enhanced durability through its hybrid steel and aluminum construction has enabled us to effectively meet diverse customer requirements for transporting a wide range of aggregates and minerals Additionally, we saw notable gains across flat cars, gondolas, and medium to large covered hoppers further demonstrating the breadth of our product portfolio and the responsiveness of our team to evolving customer needs.

Our ability to translate this demand into meaningful order wins underscores the strength of our commercial strategy and differentiated market position. We closed the year with a robust backlog of 2,797 units valued at approximately $267,000,000 providing the strong foundation as we enter 2025. With overall industry railcar deliveries held steady at rough 42,000 units order activity for the trailing twelve months totaled around 25,000 units, well below typical replacement demand.

Despite these shifting industry dynamics, we successfully increased our market share underscoring the effectiveness of our commercial strategy, agile, manufacturing presence and resilient supply chain capabilities. In 2024, we achieved a 21% share within our addressable market segments and captured approximately 12% of the total railcar market. Demonstrating our ability to compete and consistently win in this dynamic environment.

From a broader industry perspective, we continue to see sustained long term demand with forecast projecting annual industry deliveries in the range of 35,000 to 40,000 railcars driven primarily by replacement cycles as cars approach mandated retirement thresholds. These structural factors reinforce the ongoing need for the high quality Versa railcar solutions that we are uniquely positioned to deliver. Our continued focus remains on manufacturing excellence delivering the industry's finest products and engineering expertise. And deepening our longstanding customer relationships. Our strategic approach emphasizes tailored offerings rather than a one size fits all model, enabling us to effectively address specific product and order requirements. Importantly, our unique operational flexibility sets us apart and allows us to rapidly ramp production efficiently switch between railcar types and accommodate smaller specialized production runs. This agility combined with the versatility of our four production or active production lines and an optional fifth line positions us extremely well to respond swiftly and effectively as tariff related uncertainties dissipate and customer demand increases. Our steadfast commitment to operational excellence and innovation we remain confident in our ability to capitalize on emerging opportunities ahead of the competition. I'll now turn the call over to Mike for comments related to our financial performance.

Mike?

Thanks, Matt. Good morning, everyone. I'd like to begin with an overview of our full year 2024 financials and then share a few fourth quarter highlights. For the full year, we achieved revenues of $559,400,000 representing a 56% growth over the prior year. These results reflect some minor timing delays for the fourth quarter which resulted in some delivery fulfillment getting pushed into early Q1. It is important to note that this timing shift is not due to broader headwinds rather normal transit timing of deliveries crossing the border. Adjusted EBITDA for the full year was $43,000,000 representing a $22,900,000 increase or 114% improvement from 2023. I am pleased to note that 2024 signified our second consecutive year of delivering over 100% growth in adjusted EBITDA underscoring the strength of our operational execution, favorable manufacturing cost structure and an enhanced product mix, Adjusted net income for the full year was $24,500,000 or $0.15 per diluted share. Accounting primarily for the impact of certain non cash items including the change in fair market value of warrant liability, which fluctuates each quarter in line with the change in our share price during the period. For the full year, we recognized a $99,500,000 non cash adjustment due to the change in the fair market value of the warrant liability due to share price appreciation in the year.

As a reminder, this valuation adjustment solely reflects accounting for the warrant holders' investment The non cash valuation adjustment does not have an All shares underlying the warrants have already been reflected as part of the weighted shares outstanding since their issuance in prior years. As a result, if the warrants were to be exercised, there will be no incremental dilutive effect on the shares outstanding and our earnings per share.

In 2024, we took significant steps led by the commercial and operational successes of 2023 and 2024 to lower our cost of capital. The first action we took was to replace our preferred shares with a lower that will significantly reduce our ongoing capital costs by approximately 40%. Second, we entered into a new $35,000,000 asset based revolving credit facility to provide working capital flexibility and facilitate our growth initiatives with a new lender that will result in an approximate 35% reduction in facility borrowing costs.

In February, we renewed the Universal self registration we previously had on file with the SEC.

Additionally, PIMCO has now registered shares of common stock as a selling shareholder. Importantly, this will not cause further dilution among common shareholders as their warrant shares have consistently been reflected as outstanding in our earnings per share calculation. While we value our relationship with PIMCO, over time, will strengthen our balance sheet and allow investors to more clearly focus on the underlying power of our business to generate consistent profitability and cash flow. Turning to fourth quarter highlights.

We delivered solid revenue growth on consistent railcar deliveries. Consolidated revenues for the fourth quarter of twenty twenty four totaled $137,700,000 with deliveries of ten nineteen railcars, compared to $126,600,000 on deliveries of ten twenty one railcars in the fourth quarter of twenty twenty three. Gross profit in the fourth quarter of twenty twenty four was $21,000,000 with a gross margin of 15.3% compared to gross profit of $12,100,000 and gross margin of 9.6% in the fourth quarter of last year.

Higher gross margin performance as compared to the prior year was primarily driven by a favorable mix shift in railcars delivered and higher productivity.

SG and A for the fourth quarter of twenty twenty four totaled 9,400,000.0 up from $7,700,000 in the fourth quarter of twenty twenty three. Excluding stock based compensation, SG and A as a percentage of revenue increased approximately 70 basis points. In the fourth quarter of twenty twenty four, we achieved adjusted EBITDA of [indiscernible] compared to $6,500,000 in the fourth quarter of twenty twenty three again, primarily driven by product mix between the comparable periods as well as realizing the operational efficiencies of running four lines in the fourth quarter of twenty twenty four, versus three lines in the comparable period. For the fourth quarter of twenty twenty four, our adjusted net income was $8,000,000 or $0.21 per diluted share compared to adjusted net income of $1,700,000 or a loss of $0.16 per share in the fourth quarter of last year.

As I said earlier, when discussing the full year results, the warrant liability adjust is a non cash item and has no effect on the shares outstanding in our earnings per share. It only reflects the change in the warrant holders' investment in our company during the respective reporting period. As we have mentioned on prior calls, we are laser focused on enhancing cash generation This year marked a significant inflection point as we delivered $44,900,000 in operating cash flow and $21,700,000 in adjusted free cash flow.

This strong cash generation further supports our strong balance sheet as we currently hold $44,500,000 in cash.

In 2024, capital expenditures totaled $5,000,000 including $1,300,000 in the fourth quarter, primarily reflecting ongoing investments consistent with our current maintenance cycle As part of our disciplined approach to capital allocation, we are providing a range of $5,000,000 in capital expenditures during 2025. This largely represents maintenance level capital spend as well as an early investment in the first half of twenty twenty five of approximately to outfit our facility for the tank car retrofit program we have in our backlog. As we continue to field new customer inquiries for tank car retrofit orders. For 2025, we will prioritize deploying free cash flow to reduce leverage and enhance our financial position with an objective to achieve a normalized leverage ratio in the range of one to 2.5 times. That will position us to access lower cost financing and enable flexibility to pursue strategic growth opportunities in the future. With that, I'd like to now turn the call back over to Nick to share our outlook for 2025. Thanks, Mike.

For the full year 2025, we are forecasting deliveries between 4,500 to 4,900 railcars. An increase of approximately 7.7% at the midpoint of the range. Revenues will be between $530,000,000 and $595,000,000 up approximately 1% year over year at the midpoint of the range. In terms of cadence, we expect to build momentum with a stronger back half of the year that will scale up towards our guided numbers. We expected adjusted expect adjusted EBITDA guidance between $43,000,000 and $49,000,000 for the full year representing a year over year increase of 7% at the midpoint and a further underscoring the strength of our operations. Finally, I'd like to conclude with our expectation that 2025 represents a second consecutive year of positive free cash flow generation. With that, I'd like to now open the line Q and A. Thank you. Our first question comes from the line of Mark Reitman Noble Capital Markets. Please proceed with your question. [indiscernible] you elaborate on the fourth quarter product mix? And and also just how changes in the product mix may affect the quarterly cadence of railcar deliveries, revenue and margin? 2025? Hey, Mark. Good morning. It's Nick. I'll take that one and then Mike can add some color if I don't fully answer your question fully.

But overall, I'll say, first of all, we are very pleased with the overall year and our execution of the year including the fourth quarter.

Just a reminder, we significantly outpaced the market gainshare. Revenues deliveries grew 5644% respectively, landing well within our guidance, although at the lower end. [indiscernible] [indiscernible] variation in average selling price, which we call mix which can influence the revenue, but really focus on driving despite movements in revenue being lower than I thought of our guidance, we delivered an outside EBITDA well above our guidance for the year, which is a testament to our commitment to driving profitable growth. So is movement on ASP, which we manage locally on our site process, but really what's driving is making sure we're driving that EBITDA growth up. We've seen through the last year. Mike will talk a bit more about how that impacts into 2025. [indiscernible] Our quarterly cadence in 2025 is going to ratchet up We delivered a unique new railcar in 2024 on the higher ASP side. Specifically in Q4. We ended up dedicating two production lines at the start of the first quarter of twenty twenty five to build some ancillary large spare part fabrications that unique railcar for our end customer.

As a result, you'll see lower deliveries and revenue in the first quarter but similar overall gross margins on railcar deliveries.

The second quarter will grow as all four lines switch back producing railcars but second quarter will still be a little lower than I'd say the back half. Because of the changeovers to go into building new railcars And then the back half we'll be heavy on railcars revenue very few changeovers and just really producing at a constant rate to get to the guidance we provided. Well, thank you for that.

And then obviously, I'm getting a lot of questions about the tariffs. And so I was just kind of wondering your thoughts on how FreightCar is positioned relative to its competitors to respond to potential tariff actions taken by The U. S. Or other countries.

Sure. I'll start with that one. Our current guidance for 2025 balances both opportunities and risk There's a stable demand, operational efficiencies, lowering finance costs providing tailwinds while remain mindful of the supply chain dynamics commodity price and tariff uncertainty That said, railcar industry operates with a stable replacement cycle driven by the essential role of rail transportation and moving bulk commodities. Even during these periods of elevated steel prices, customers continue to invest in new railcars, demonstrating we believe the industry's resilience. Also, while post election years can bring temporary order slowdowns, history shows this is a deferment not truly a lost demand and inquiry levels remain strong and our agility allows us to quickly convert interest into orders. Given our size and our agility, I think that positions us well in the market we're in. And as those market conditions stabilize, I think it's to our advantage.

Well, Nick, just to put a finer point on it, one of the questions that I've gotten is you know, are there do you have we know that Greenbrier, Trinity and Frank Carhall produce in Mexico. But is there the potential that FreightCar car could lose say market share if one of your other competitors has greater capacity to move production around either in The U. S. Or elsewhere? [indiscernible] large capacity footprint in The USA for building railcars. There are couple of smaller repair shops that can build a couple of hundred railcars, not a couple of thousand railcars. So I don't think there are large enough operations to make a quick switch to move things to U. S. Generally, for industry, there may be some very unique products that can do that, but not generally. And certainly, we think about our products on VersaFLOOD, the open top hopper we are clearly number one in that manufacturing space. So I think there's low risk of that being moved anywhere else given the product differentiation we have. So there's some product specific items which give me confidence that only a limited ability to do that. I think there's some areas where products that we don't compete in.

That may be better tailored to move to The U. S. But there's I balance that with if manufacturing of bulk materials does re center in The U. S, and that helps the rail industry overall then that would be more of a positive net impact to the rail industry rather than the I believe rather than the the potential impact on items across the Mexico border. But our ability to be agile is really what I think sets us apart at the moment. We've spent the last four years dramatically changing how we operate and run our business. We've got a lot of key management players, key leadership players who are well versed in how to respond very quickly to a change in dynamic and how to respond very quickly to any change in supply chains, change in customer demands, change in profile. I think we demonstrated that last year [indiscernible] Not necessarily around tariffs, there was uncertainty around supply chain demand. As you saw, we won't significant market share gains against very large competitors. Which is a testament to our ability to compete and win in those situations. And I do believe that tariffs are a level of uncertainty at the moment.

They've been in, they've been out. There's steel tariff in at the moment.

Our job is to digest that, keep an eye on that and respond quickly for the benefit of our customers and make sure that our end users get the products they need to move their book materials. So guess that's a bit of a long winded answer, but I think overall there is uncertainty in tariffs. That's true. And I believe that FreightCar America that uncertainty represents an opportunity for us to continue to demonstrate market share gains and to continue to meet our customers' expectations with speed and high quality products.

That's very helpful. Thank you for that.

Thank you. Our next question comes from the line of Brendan McCarthy. With Sidoti and Company.

Great. Thanks. Thanks for taking my questions here.

I just wanted to talk about the fourth quarter think you mentioned there was a timing issue that that might push some deliveries to the first quarter of twenty twenty five. Are you able to quantify that for us?

There was no timing. It's just the normal transit time, just cars in transit, to the border that count as a delivery, but nothing of massive substance no.

Okay, got it. And then looking at the 2025 guidance, looks like you're expecting almost 8% growth at the midpoint for deliveries. And then a little bit of a smaller 1% expectation for revenue growth Can you just talk us or walk us through what's baked into that variance with the midpoint of guidance? Yes.

I'll start that brand new then. Matt can probably fill in some great details. A couple of things. As you know, we primarily produce new railcars And even on new railcars, there's a large variance in the average selling price. At the top end, you've got things like boxcars or some of the complex flatcars, which can be double the price of some of the open hoppers or some of the smaller cars. So there's a large average selling price, we call it ASP, variance, which can change revenue but doesn't change, I guess, our ability to deliver EBITDA. So while you just look at revenue, it's 1% growth What we are looking at there is change in ASP or after selling price. Also, do we have our rebodies or rebuilds program where the customers provide a donor body and we convert it into a fully functional almost new railcar. And they have a lower average selling price as well So the revenue at 1% is more to do reflecting change in average selling price or product mix changes. What I focus on is driving that EBITDA growth up. And that's where we generate our real growth of value earnings and then consequently into cash.

But that's very high level just to explain why that's a revenue isn't reflecting the same growth as EBITDA. But Matt, if you Yes, Brendan, this is Matt. The overarching commentary is that we see demand across multiple market segments levels. We're seeing good order activity as we enter into 2025. We do expect the mix change to Nick's point. So I think that's probably where you'll see some of the biggest differences in terms of overall revenue versus still very strong performance on the EBITDA side.

Great. That's helpful. That makes sense. Then on the delivery guidance, obviously, it looks like you're assuming [indiscernible] pretty nice growth at the low point. For the 4,500 deliveries in 2025, but just curious as to what's baked into that from a tariff [indiscernible] Is it kind of fair to assume that maybe worst case tariff scenario, you're still going to see a nice kind of growth rate in the delivery number for 2025?

Yes, I think that's a reasonable way of looking at at the moment, Brendan. We've We've taken into account everything we know up until this point. And everything we've reviewed and revisited. As Matt touched on his, notes, the inquiry level and the level of customers working and rather than just low quality inquiry customers who are working with us on designs and shipment timings and delivery profiles, etcetera, investing time and effort into being prepared to place an order is vibrant and it's really encouraging [indiscernible] It would be helpful if there was some clarity on tariffs. But right now, the guidance we've given is based on how we interpret the current tariff sort of nervousness on timing of orders basis. But I would expect would expect that as we move forward, we will meet that guidance range even with what's perceived to be in today, if that makes sense.

Yes. Brendan, Matt again. I'll just add that the conversations we're having with customers tariffs is clearly top of mind. But I will tell you that inquiry levels certainly paint a very positive picture and from a FreightCar America perspective, very bullish on our guidance. We're having the right kinds of conversations with the right types of collaborative discussions with customers and feeling very positive about our position in the marketplace and the ability to continue to grow within our addressable market share And all of that comes from the the fact that customers buy railcars one of my colleagues has referred to frequently because they need to ship freight. So you may have some delays, you may have order activity that's somewhat lumpy, but at the end of the day, railcars remain to be the most efficient method of transport, particularly when we look at bulk commodities, which we're seeing a lot of inquiry activity on And we're really well positioned to pivot and to meet the needs of our customers that frankly have a preference for the FreightCar America position in the market.

Got it. Thanks. That's helpful. And then one more question for me on the tank car retro fit order, the 1,000 car order that you're looking to deliver in 2026 and 2027. Are you able to provide the addressable market on the I guess the total addressable market for tank car retrofit orders and I guess what that thousand car order kind of represents No, we would [indiscernible] going to provide the addressable market, but we will as Mike alluded to in his commentary, we are pulling forward on the CapEx. So we'll have the CapEx to be the plant ready for recertification work I would expect sometime late Q2 be ready late Q2 or the Q3. So and we do have we are fielding more inquiries from customers on conversion work. So as those become real, we will provide updates and guidance as they are at those orders are placed or become in our backlog. So but we're certainly pulling ahead on the investments of the CapEx So that will be invested in the first half of this year. It's in a position to be ready. And as those inquiries convert to orders obviously, we'll update accordingly. But I think there's addressable market is there's a couple of factors that go into it, which is why I just don't want to mislead either good or bad.

On what that size could be. But we are fielding inquiries. We will be ready ahead of schedule order we do have.

And if as customers convert those inquiries into order placement, we'll update accordingly. Matt, I don't think I missed it in there, but that's No, I think you got it, [indiscernible] Nick. Thanks, everybody. That's all for me.

Thanks, Brendon. Thanks, Brendon.

Thank you. Our next question is a follow-up from the line of Mark Reichman with Noble Capital Markets. Please proceed with your question.

Yes. During the call, you mentioned that once you get the leverage ratio down that you would be more open to considering kind of the strategic growth opportunities. And I was just wondering, does that are you referring to maybe growth around the parts business or are you looking even further out in terms of potentially adding a fifth line?

I'll take that. I don't Mike mentioned it in his commentary about the work to get there. I guess your question is okay, but when you get there, what are you going to do with it? We would always keep a very good review of how do we deploy capital in the best interest of our shareholders. A couple of things you mentioned there. So parts group, obviously parts group is a very important part to us. Parts and distribution that is always going to be a worthy candidate for constant review. And as we make any investments in there, we'll update accordingly. But parts now broken out in our 10 ks as people can see that group in there. You mentioned about the fifth line. So the fifth line is just a reminder, the fifth line we have is underroof It's already pre built out. We don't lease it at the moment. It's available to lease in very short notice. The fifth line could be made ready in less than ninety days. So if demand or a product type demand comes upon us, converting that to a fully operational is probably going to be less than $1,000,000 CapEx and less than ninety days in time.

So that's always a a low risk opportunity we can have at our disposal when customer demand dictates that. And then beyond that, so you think about two to three years, that's where we've we'll constantly keep an eye on what's the best way to deploy our capital.

As we change from being focused on just debt management to being having free capital to use, We'll take a good look at what represents the best for shareholders and what's good at time to be adjacent to a more robustness in our core markets. So we're always on the lookout for that That is something that is clearly next phase of strategic growth for company overall.

Thank you. And then just lastly for Michael, if he might be able to comment on the recent registration and how investors should think about that?

Hi, Mark.

Yes.

So we filed the S3 register it's a universal shelf, the same one we had back in 2021 that had expired. So we renewed that as everyone will probably notice, PIMCO has registered the shares under their warrant as a selling shareholder. That gives them the opportunity over time at their election to sell shares.

And begin to unwind their investment in us. And as I mentioned, we value our relationship with PIMCO tremendously as they were a key partner in getting us to this point. And I think one important part of this is that them exercising their warrants or them selling shares does not have an effect on our EPS. The way the accounting treatment works, we've always treated those shares as outstanding since their issuance. And so that's one key point that I think everyone should really understand with the registration statement and the warrants themselves.

Thank you. Ladies and gentlemen, there are no other questions. At this time. I'll turn the floor back to Mr. Randall for final comments.

Thank you. Thank you. I just wanted to take a moment to re summarize our call. So So 2024 was a year of execution and results. Achieving significant revenue growth of 56% and gaining market share to We delivered exceptional financial performance, exceeded EBITDA guidance for the year and Per Railcard EBITDA increased substantially. As we enhanced our mix, leverage productivity improvements and efficiency gains, [indiscernible] We improved our capital structure by redeeming outstanding preferred shares and securing a $35,000,000 ABL credit facility to enhance financial flexibility and ultimately reduce borrowing costs. We generated strong adjusted free cash flow of $22,000,000 and heading into 2025, we anticipate a second consecutive year of positive free cash flow generation And overall, with market share gains, a major multiyear tank car conversion deal financial flexibility through an optimized capital structure, FreightCar America is well positioned for sequential profitable growth in the year ahead. And with that, thank you.

Thank you. This concludes today's conference