FreightCar America Q1 2026 Earnings Call - Margin Expansion Driven by Productivity Gains and Aftermarket Growth

Conference Call Moderator: Welcome to the FreightCar America first quarter 2026 earnings conference call. At this time, all participant lines are in a listen-only mode. For those of you participating on the conference call, there will be an opportunity for your questions at the end of today’s prepared comments. Please note this conference is being recorded. An audio replay of the conference call will be available on the company’s website within a few hours after this call. I would now like to turn the call over to Chris Odeh with Riveron Investor Relations. Over to you, Chris.

Chris Odeh, Investor Relations, Riveron Investor Relations: Thank you and welcome. Joining me today are Nicholas J. Randall, President and Chief Executive Officer, Mike Riordan, Chief Financial Officer, and Matthew Tonn, Chief Commercial Officer. I’d like to remind everyone that statements made during the conference call relating to the company’s expected future performance, future business prospects, or future events or plans may include forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. Participants are directed to FreightCar America’s Form 10-K for description of certain business risks, some of which may be outside of the control of the company that may cause actual results to materially differ from those expressed in the forward-looking statements. We expressly disclaim any duty to provide updates to our forward-looking statements, whether as a result of new information, future events, or otherwise.

During today’s call, there will also be a discussion of some items that do not conform to U.S. Generally Accepted Accounting Principles or GAAP. Reconciliation of these non-GAAP measures to their most directly comparable GAAP measures are included in the earnings release issued yesterday afternoon. Our earnings release for the first quarter 2026 is posted on the company’s website at freightcaramerica.com along with the 8-K which was filed at market close yesterday. I will now turn the call over to Nick for a few opening remarks.

Nicholas J. Randall, President and Chief Executive Officer, FreightCar America: Thank you, Chris. Good morning, everyone, and thank you all for joining us today. Our first quarter results were in line with expectations and remain consistent with the operating cadence we expect for 2026. At the same time, our commercial differentiation and expanding aftermarket business, which grew 86% year-over-year, continues to distinguish FreightCar America and reinforces the resilience of our business model across market cycles. Our ability to serve specialized customer needs through not only new car builds but also retrofits, conversions, and our expanding aftermarket platform all play a key role in growing our addressable revenue opportunities and allowing us to fulfill a broader set of customer programs. In short, FreightCar America is a truly diversified rail car platform, and that remains central to our strategy.

Supported by our manufacturing expertise and strong productivity improvements, we realized one of the highest gross margin quarters in over a decade with 17% gross margin in the quarter. This represents an expansion of 190 basis points year-over-year. What is especially encouraging is that we achieved this performance on lower u- line utilization, highlighting the operational agility and variable cost structure of the business. Commercial activity was also encouraging in the quarter, with significantly improved pipeline activity amongst key accounts and solid order intake, including demand for our conversion and retrofit work. We increased our backlog by $19 million sequentially, and together with the expected contribution from retrofit and aftermarket activity, we continue to expect performance to be weighted towards the back half of the year.

Internally, as we have scaled our manufacturing footprint, we have been on a continuous improvement journey focused on enhancing productivity and strengthening execution across our manufacturing operations. During that time, we have successfully established four fully operational production lines and have taken a relentless approach in driving efficient manufacturing practices. We are extremely pleased with our progress to date, noting that we have increased productivity by approximately 50% over the last 24 months. In addition, we remain agile and are able to remain flexible as needed, giving us additional operating capability as demand evolves. Together, these actions and capabilities provide additional support to drive consistent margin performance over the long term. At the same time, programs like TrueTrack are helping reinforce accountability, real-time build visibility, and quality throughout the production process, driving greater consistency, reducing rework, and strengthening production discipline across our operations.

We also remain focused on the continued expansion of our aftermarket platform, an important part of our strategy to build a broader and more balanced rail business over time. We are excited with the progress we have seen so far with our recent acquisition, which represents an important step in expanding our aftermarket capabilities. We remain disciplined in how we invest behind that strategy with a focus on selective adjacent opportunities that strengthen our position in core rail markets, expand our capabilities, and support attractive long-term returns. Overall, we remain mindful of the current new build environment, where industry order activity has remained relatively consistent with last year’s levels.

Importantly, that dynamic continues to point to underlying pent-up demand as fleets age and deferred replacement needs build over time. As those fleets reach retirement age, customers are increasingly likely to place orders closer to the required delivering timing, which tends to favor more agile manufacturers by creating a shorter lead time environment. FreightCar America is well-positioned in that regard. With our improved productivity, stronger operating discipline, and a flexible manufacturing model with scalable capacity, we are well-equipped to respond efficiently and capitalize on opportunities as replacement demand returns over time. With that, I’ll turn it over to Matt to discuss the market environment in more detail.

Matthew Tonn, Chief Commercial Officer, FreightCar America: Thanks, Nick, and good morning, everyone. I’ll start with a brief update on the market and our commercial activity during the quarter. Industry conditions for new rail car builds remain relatively consistent with the prior year, with expected annual deliveries tied to replacement demand. This dynamic reflects underlying demand as fleets continue to age and replacement needs build over time. Order activity during the quarter was also consistent with this environment, with industry orders totaling 5,654 units compared to 5,085 units in the prior year period. Railroad service metrics continue to trend positively across the industry. Key indicators like reductions in dwell time and increased velocity speak to improved rail service, customer confidence in rail operations, and support long-term rail demand.

Through the first quarter, U.S. carload traffic was up over 4% year-over-year, with 13 of the 20 carload segments showing growth. Grain and chemical car loads posted the strongest growth, which has also been reflected in our pipeline for new covered hopper cars. Overall, first quarter car loadings, excluding coal, were the highest since 2015 and indicate that despite softness in some sectors, underlying rail demand remains resilient. During the quarter, we saw strong commercial activity, including growth of our sales pipeline across our broad product portfolio of new build and conversion rail cars. Further, we continue to see increasing interest in our aftermarket business as customers look to extend the useful lives of their aging rail car fleets through scheduled maintenance activity.

Backlog at the end of the quarter totaled 2,058 units, valued at approximately $156 million, with a diversified mix across new builds, conversions, and retrofit programs that support a balanced revenue profile. We are beginning to see customers who were evaluating new car orders moving forward with purchase decisions. In those instances, our flexible manufacturing footprint and ability to pivot quickly positions us well to meet customers’ specific delivery timing requirements. From a market share perspective, we estimate our addressable share of industry new rail cars, excluding tank cars, was approximately 17% for the quarter, which is in line with our typical market share. This metric does not include our work outside of new rail cars, including rail car conversions, retrofits, and rebodies, which further diversifies our revenue base and expands our participation across the broader rail car market.

Looking ahead, as Nick mentioned, we remain on track to begin shipments under our tank car retrofit program in the second half of the year, with initial activity expected in the third quarter and more meaningful contribution in the fourth quarter. Overall, while near-term market conditions remain measured, we are encouraged by the level of commercial activity, the strength of our pipeline, and the continued diversification of our backlog. With that, I’ll turn the call over to Mike to walk through the financials in more detail.

Mike Riordan, Chief Financial Officer, FreightCar America: Thanks, Matt, and good morning, everyone. I’d like to begin with a few first quarter highlights. Revenue for the quarter was $64.3 million compared to $96.3 million in the first quarter of 2025. The year-over-year decline primarily reflects lower rail car deliveries, with 577 units delivered in the quarter for 710 units in the prior year period. As noted, this was largely driven by underlying demand and expected timing. While production timing impacted first quarter deliveries, we were encouraged by the momentum in our aftermarket business, where sales grew 86% compared to the prior year period. This growth reflects the progress we are making in expanding our presence in the aftermarket, driving further diversification to our business over time.

Gross profit for the quarter was $10.8 million compared to $14.4 million in the prior year period. Gross margin was 16.8%, up 190 basis points from 14.9% last year. The improvement in margin was driven primarily by a more favorable product mix that expands beyond new rail cars as well as the productivity gains and operational efficiencies across our manufacturing operations that Nick mentioned earlier. Importantly, we delivered this margin improvement despite lower production volumes, underscoring the benefits of our mix, productivity, and cost discipline. This improvement reflects the progress we have made in strengthening execution, improving throughput, and driving a more disciplined operating model.

Selling, general, and administrative expenses as a percentage of revenue increased to 17.7% from 10.9% in the prior year period, primarily reflecting lower revenue in the quarter rather than a meaningful increase in absolute SG&A expense. On the bottom line, we reported net income of $41.6 million, or $1.15 per share, compared to $50.4 million, or $1.52 per share in the prior year period. Results for the quarter include a $49.1 million non-cash gain related to the remeasurement of our warrant liability. Excluding non-cash items, adjusted net loss was $0.5 million, or $0.04 per share, compared to adjusted net income of $1.6 million or $0.05 per share in the first quarter of 2025. This change primarily reflects lower volumes in the quarter.

Adjusted EBITDA for the quarter was $3.2 million, representing a margin of 4.9% compared to $6.4 million and a margin of 6.7% in the prior year period. The year-over-year decline in adjusted EBITDA was primarily driven by lower deliveries, consistent with the expected quarterly cadence, partially offset by the margin improvements mentioned earlier. We continue to execute a disciplined and measured capital allocation strategy, balancing targeted investment in the business with a continued focus on liquidity and financial flexibility. From a balance sheet perspective, we further reduced debt in the quarter and ended with $52.8 million in cash and cash equivalents. Capital expenditures for the first quarter totaled $147,000.

Moving forward, we continue to expect 2026 capital spending of $7 million-$10 million, including approximately $4 million-$5 million in maintenance spending, as well as targeted investments to complete our previously announced tank car manufacturing initiatives. The productivity improvements we have made, together with our flexible manufacturing footprint and existing production lines, gives us the capacity to support higher production levels as demand improves without significant additional capital investment. That capacity is already in place within our current footprint, we can scale production as needed while continuing to direct capital towards opportunities that strengthen the business over the long term, including expanding our aftermarket platform and pursuing selective opportunities that enhance the stability and durability of our revenue and cash flow profile. Overall, first quarter results were in line with our expectations and reflect the planned production cadence for the year.

We’re reaffirming our full year 2026 guidance and our expectations for a stronger second half remain intact, supported by backlog visibility, scheduled program activity, aftermarket momentum and continued productivity improvements. We’ll now open the line for questions and answers.

Conference Call Moderator: Our first question comes from Mark Reichman with Noble Capital Markets. Please state your question.

Mark Reichman, Analyst, Noble Capital Markets: Thank you. If I look at railcar sales revenue divided by railcars delivered, it was about a little under $92,000 for the first quarter. You know, that number drifted down throughout 2025. Also the same was true really for the backlog value per railcar. I was just wondering, could you talk a little bit about the product mix changes throughout the year? Would you expect that number to get above $100,000?

Mike Riordan, Chief Financial Officer, FreightCar America: Hi, Mark, this is Mike. Yeah, you’re right. You know, in the back half of 2025, we talked about mix shifted more towards conversions and rebody opportunities we had. The same thing in Q1. It was a heavier conversion quarter, and I would expect as we move into the back half to see that number go above 100,000 as the mix will shift back towards new car activity in the second half of the year.

Conference Call Moderator: Does that answer your question, Mark?

Mark Reichman, Analyst, Noble Capital Markets: It does. The, second quarter, would you expect an improvement from the first quarter in that regard as well?

Mike Riordan, Chief Financial Officer, FreightCar America: From an average selling price, we should see that go up from where we were in Q1 as well, and then build throughout the year. Yeah.

Mark Reichman, Analyst, Noble Capital Markets: Okay. Just my next question is, I think, you know, you kind of expectations were for a much stronger second half, with rail deliveries at 577 in the first quarter, it seems like there might be a little catching up to do to get within guidance. Could you maybe just talk a little bit about the cadence of railcar deliveries? Do you think your net railcar orders received, I mean, I think it was 709 in the first quarter, if that’s gonna fuel strength, you know, into the second half of the year?

Nicholas J. Randall, President and Chief Executive Officer, FreightCar America: Mark, I’ll start answering that question then. It’s really an order pipeline question that I’m going to phrase it in, and then that will drive the delivery cadence in the second half. Now this time last year, we talked about how improving our agility in manufacturing, which is effectively shortening our lead time and improving our response time, would favor people in a market where the number of orders being placed is lower than the replacement average. That’s what we’re seeing again.

We’re able to You know, we drove a lot of productivity improvements, we’ve improved our velocity, shortened our dwell time in the manufacturing plant, which allows us to keep capacity open in the near term for customers as they place it. What we get is visibility into the full pipeline of our commercial opportunities. We’ve got a, you know, an increase in the pipeline activity. That is customers talking to us about orders in the 2026 timeframe and our ability to fulfill those orders still within the 2026 timeframe. We’re able to have more insights than we do talk about pure booked orders on the pipeline activity, the type of product, what the product is waiting for to become a live order, et cetera.

That’s where, yes, it is going to be weighted towards the second half. We said that last year, and it was. We’re committing to that will be the same this year. With a lot of the work we did both in our scalable manufacturing and our ability to, you know, ramp up from, you know, what we did in Q1 to significantly higher numbers without introducing risks, is gonna be key to our success in that as well. The order activity I’ll pass on to Matt. He can talk a bit more about that. Yes, it is heavy weighted to the second half. We knew that going in, and we’ve designed our plan around that. We’re still confident we can deliver on that.

Matthew Tonn, Chief Commercial Officer, FreightCar America: Yeah. I’ll just add that we’ve been adept at being able to convert orders with very short lead times. Customers that have been on the sidelines now moving into the order stage, and our ability with our e-efficient footprint has allowed us to convert those orders very quickly and deliver. That’s been executed multiple times within the quarter. Just to comment on the pipeline, the pipeline is continuing to grow. It’s been quite active in the latter part of the first quarter and into Q2. I won’t speak to order activity in the quarter. We’ll save that for the next earnings call. Overall, we have high level of confidence in the strength of the pipeline for 2026 and even pipeline activity that is into 2027 and beyond.

Mark Reichman, Analyst, Noble Capital Markets: That’s great. That’s very helpful. Thank you very much.

Matthew Tonn, Chief Commercial Officer, FreightCar America: Thanks, Mark Reichman.

Conference Call Moderator: Our next question comes from Aaron Reed with Northcoast Research. Please state your question.

Aaron Reed, Analyst, Northcoast Research: Thank you. Yeah. A little bit of a follow-on to that call or comment on the lower deliveries. I was wondering if you’d shed a little light around were deliveries impacted at all by preparing for the tank car deliveries in the back half of this year because you’re not gonna be operating on that fifth line but that fourth line. Did that have any impact on that as well?

Nicholas J. Randall, President and Chief Executive Officer, FreightCar America: No, Aaron. Quite the opposite. We’ve, you know, historically talked about, we have a fifth line on the roof, and we can open that fifth line, pretty quickly, as in under 90 days. With our productivity improvements, what we’re finding is we’re raising the capacity on those first four lines, in our ability to convert more cars on those four in a more productive manner. What that means is our installed capacity on those first four is increasing, quite significantly compared to what we originally intended, with those productivities and velocity improvements. Yes, we will more than likely, do the conversions, as you mentioned, some tank car conversions on the footprint we have, possibly not even needing the fifth line for that.

It’s available to our use should we need it, but I would rather sweat the assets as much as possible before we commit to expanded capacity. In short, no, the volume wasn’t impacted negatively because of some preparation work. The preparation work has gone to plan. We’ve got the certification as required. That hasn’t impeded our freight car business or our freight car capacity. We were simply responding to customer demand profiles during the quarter.

Aaron Reed, Analyst, Northcoast Research: Okay, great. Then, another follow-up question to that is, you know, last year, I think overall deliveries across the industry around 30,000. Do you have any more insights about what you might expect for the total number of deliveries for the remainder of 2026? Have you gotten any indication now that we’re a little further along what 2027 might look like?

Nicholas J. Randall, President and Chief Executive Officer, FreightCar America: I’m not gonna try and do a quarter-year to date plus a bit more. We’re gonna do it in full years because it’s just easier to do the math that way. Typically, when we look at deliveries are gonna lag behind order activity. We look at the order activity for 2025, which would suggest that the deliveries in 2026 are gonna be somewhere between 25,000-30,000. I’ll give a wide range there, given that some can still convert in 2026. That would be kind of consistent. I’d expect the orders in 2026 to be about that range or slightly higher as they start receiving orders in the back end of 2026 that go into 2027. There’s a lag time.

Traditionally, if you look in the rail industry, that lag time between order placement and delivery has been as far as 18 months or longer. Typically now, certainly with our agile manufacturing platform, that timing from order placement to delivery can be as short as 9 to 12 weeks in some cases. What we’re seeing is a compression of that order cycle from order placement to delivery. We’ve structurally aligned our, sort of our operations and supply chain and support and engineering roles so that we are very agile in that process, which allows us to capitalize on that shortened lead time that the market and the customers are beginning to look for.

Aaron Reed, Analyst, Northcoast Research: Super helpful. I guess I’m gonna tag one last question on, is when you look at the total overall number of deliveries throughout the year and your overall market share, even as the industry is kind of seeing, you know, deliveries fall a little bit, you’re continuing to take market share. Have you seen any of your competitors take any competitive pricing action to combat the, you know, the market share you’re taking? Or is it pretty much the same as it was before?

Nicholas J. Randall, President and Chief Executive Officer, FreightCar America: I’ll answer it at a very high level, and then I’ll try and get some more specific. You know, I think, in a free market economy, competitors always respond in some way, whether it be pricing or value proposition or some other way. I would expect that to always be true, with a general competitiveness in the rail space. Really what that means for us is we are very conscious that we have to earn the right to win our work and earn the right to win our market share.

We take that very serious in the build, it’s, we’ve never said we’re gonna be the lowest cost producer, but we will be the most valuable producer, and we’ll look at making sure that we deliver exactly what our customers want, and what they need and enhance our value proposition that way. We truly believe in our product, we truly believe in our services, and we truly believe in our relationships that we build. When we combine all that together, we win work on our own right. Now, competitors can judge that and respond to that how they see fit. We keep an eye on it, but, you know, we’ve grown both in actual account and in market share, as you said.

We fully expect to sustain those gains, in fact, build upon it. As the market deliveries respond back to the normal sort of 38,000 to 40,000 units a year, we truly expect to protect that market share gain through that growth cycle as well.

Aaron Reed, Analyst, Northcoast Research: Super helpful. Thank you.

Nicholas J. Randall, President and Chief Executive Officer, FreightCar America: Thanks, Aaron.

Conference Call Moderator: Our next question comes from Brendan McCarthy with Sidoti & Company. Please state your question.

Brendan McCarthy, Analyst, Sidoti & Company: Great. Good morning, everybody. Thanks for taking my questions here. I just wanted to start off on the Q1 gross margin, see if we could dissect that a little bit more. How much of that was, you know, structural in nature, or was that more so driven by, you know, higher retrofit deliveries in the quarter?

Mike Riordan, Chief Financial Officer, FreightCar America: Hey, Brendan, this is Mike. I would call the majority of that structural. We didn’t have any retrofits, but as alluded to, with the average selling price being down because we had more conversions, you’ll naturally see the gross margin up. As we’ve kind of mentioned, typically the bottom line gross profit on a per unit basis is relatively similar between conversions and new cars, but you have a lower price tag on a conversion, so you see the margin a little higher.

Brendan McCarthy, Analyst, Sidoti & Company: Got it. That makes sense. That makes sense. Yeah, I meant to say conversions, actually, because I think the retrofits are more back half weighted in the year. Is that correct?

Mike Riordan, Chief Financial Officer, FreightCar America: Yes.

Nicholas J. Randall, President and Chief Executive Officer, FreightCar America: That’s right. Yeah.

Brendan McCarthy, Analyst, Sidoti & Company: Okay. Got it. On that point, you know, with the retrofits in the back half of the year, but I think you mentioned you’re still expecting to see the average sales price kind of step up throughout the year. Can you, kind of, you know, differentiate that between the two, you know, just as in terms of delivery cadence?

Mike Riordan, Chief Financial Officer, FreightCar America: Sure. I think we’ve mentioned that the retrofit program we have is a 2-year program. It kicks off in Q3 for us and really starts going in Q4. Probably about a quarter of that total order will take place in calendar year 2026, with the balance going through 2027. The retrofits will have a lower impact on ASP this year compared to next year, where the bulk of them are taking place.

Brendan McCarthy, Analyst, Sidoti & Company: Okay. That makes sense. That’s helpful. Then last question from me, just on the guidance affirmation. How, I guess, how confident are you that you can really hit the midpoint there? And how much of that is really backed by, you know, I guess, are you banking on a recovery in industry order flow in the back half of the year and really capitalizing on those short lead times? I guess, what’s really underpinning the confidence there?

Nicholas J. Randall, President and Chief Executive Officer, FreightCar America: Yeah. I’ll walk through that first, and then Matthew Tonn can probably put some color around some of the order activity. First question is, yes, the year is back half loaded. We know that. We planned around that. That back half isn’t really requiring the industry to get back to normal. You know, we’ve always planned on that, you know, if the industry order quantity is somewhere around 25,000-30,000, similar to what it was last year, then that’s what our guidance is based on. If there’s a sooner than expected return to, I guess, normal replacement levels, then that would probably support a stronger result.

The assumptions we’ve got in there is based on less about industry dynamics, which are good to look at, but obviously we really base ours on our relationships and our insights with our actual customers and the orders they’re actually working through and the projects that those orders are gonna go be delivered for. We really be able to base it on, you know, the facts of the, I guess, the order pipeline and gestation process, and be able to risk adjust from that.

Whilst the industry level is a background that helps us just sort of set the main scene. When we look at our guidance and our forecast, we’re really looking at our own pipeline with a lot more detail and be able to risk assess against the orders and the projects we’re working on and what may or may not influence accelerating or deferring any of those projects. It’s not always fully reflective. You know, last year, you know, we grew market share, and we grew unit count, even though the order industry counts went down significantly, quite a lot. It’s kind of a rinse and repeat for us this year. Similar dynamics. Still a lot to do, clearly.

You know, our confidence that we’re not just mapping it simply to a, "Here’s what the industry does, so therefore here’s what we do." We truly believe we have to earn the right for every order, and we work on it on an order by order basis with our customers and our projects. Matt, anything I missed on that?

Matthew Tonn, Chief Commercial Officer, FreightCar America: Just a couple of comments, Brendan. The back-to-back years of order activity has averaged 23,000 units. We’re scrapping more cars than are being ordered. You know, when we have conversations with customers about their needs, we’re getting to an inflection point where we can’t keep this low level of order activity and high level of car scrapping and not start replacing rail cars. I think you heard us speak in the past about an impending demand push as we approach the end of the decade. Customers are starting to get, I won’t say more serious, but certainly focused on their demand for rail car needs now.

This is what we refer to as a high quality pipeline, so we’re seeing much more activity in terms of permitting funding for rail car build. When we talk about how the outlook is for the remainder of the year, it’s based upon good order activity that we’ve seen so far in the quarter. I think there’s also solid high quality pipeline activity that gives us high confidence in meeting our guidance.

Brendan McCarthy, Analyst, Sidoti & Company: That makes sense. I appreciate the detail there. That’s all for me.

Conference Call Moderator: Our next question comes from Mark Reichman with Noble Capital Markets. Please state your question.

Mark Reichman, Analyst, Noble Capital Markets: Thank you. Well, just a follow-up. You can imagine, I mean, 577 deliveries in the first quarter. The guidance is between 4,000 and 4,500. You know, that does certainly, you know, people are gonna be a little skeptical about meeting that guidance. On the other hand, you had that ABL facility, and that gave you a lot more product, you know, production flexibility. We can’t really see what’s going on behind the scenes. Do you know, do you have some deliveries kind of already in the bag that you know are gonna get delivered in that third and fourth quarters?

I guess what I’m asking is, you know, your recent flexibility in terms of being able to produce and deliver, is that part of the what’s kinda behind the lumpiness in the delivery schedule this year?

Nicholas J. Randall, President and Chief Executive Officer, FreightCar America: There’s a couple of questions wrapped up in that one, I’ll try and break them down and then Matthew Tonn and Mike Riordan can add some color. First of all, on the, you know, if you just look at our guidance, just the entry level, as, you know, as you said, it’s just over 3,450 or so still to do at the end of Q1 to ship in the year. That would say on a level loaded basis, call it 1,200 units a year, sorry, a quarter or about 90 something units a week. That is well within our capacity. We’ve demonstrated much higher shipment profiles than that before. I don’t think there’s a capacity concern or ability to flex.

We drove the productivity improvements so that we can handle a lot of those, delivery commitments in a, sometimes in a single shift as opposed to a double shift. We’ve got a lot of improvements that have baked into that. I don’t think we have a risk from a capacity perspective. We can flex our volume and throughput very high. The second bit you talked about is timing, where we may build cars ahead of schedule. We may do a build sequence in a prior quarter, you have them in finished goods or on the ABL or some of the financial mechanics gets the revenue recognition in a later quarter. We do sometimes do that.

There’s not a lot of that in Q1, but you’ll see some of those in Q2 builds that will ship in Q3 and Q4. That’s normal for us as we smooth out that process. Those things do happen and will happen, but they allow us to buffer supply chain variability and maintain consistent output. That usually works better for us. From a pipeline perspective, there is a higher customer demand in the second half than there was in the first half or certainly in the first quarter. I, you know, there’s only so much of pre-build ahead of time you can do because then you’ve got to pay for storage fees and movement fees and a whole bunch of things.

With our flexible manufacturing, we’re able to deliver when our customers need them, rather than having the customer make compromises on shipment timing and storage, et cetera. That’s where, you know, when you roll all these things together, between our scalable manufacturing, our operational excellence, our TrueTrack, and our deep relationships with our customers, we’re able to flex our delivery times so that our customers don’t have to make compromises. That allows us to have another edge as to why we are a supplier of choice for most of our customers.

Mark Reichman, Analyst, Noble Capital Markets: That’s great. That’s very helpful detail, Nick. Thank you.

Nicholas J. Randall, President and Chief Executive Officer, FreightCar America: Welcome.

Conference Call Moderator: That was the last question for today, and it concludes the teleconference call. You may now disconnect your lines at this time. Thank you for your participation, and have a great day.