FreightCar America, Inc. (RAIL) Earnings Call Transcript & Summary

Hello, and welcome to the Annual Meeting of Stockholders of FreightCar America, Inc. Please note that today's meeting is being recorded. During the meeting, we will take questions related to each proposal after each proposal is explained. You can submit questions or comments at any time by clicking on the message icon. It is now my pleasure to turn today's meeting over to Mr. William Gehl, Chairman of the Board of Directors for FreightCar America, Inc. Mr. Gehl, the floor is yours.

Good morning, and welcome to the 2020 Annual Meeting of Stockholders of FreightCar America, Inc. I'm Bill Gehl, Chairman of the company's Board of Directors, and I'll act as Chairman of this meeting. I along with my fellow directors and executive officers of the company, appreciate your attendance, your interest and, most importantly, your support of FreightCar America, Inc. We are pleased to hold our annual meeting virtually this year. The coronavirus pandemic has led governments to impose travel restrictions, stay-at-home orders and other social distancing protocols. In light of the public health concerns related to COVID-19 and out of concern for the health and safety of our stockholders, directors and members of management, we determined to hold this year's annual meeting in virtual format. Before starting the meeting, we would like to take the time to thank our employees for their dedication to safety and operational excellence while continuing to execute and perform for our customers in this challenging environment. Furthermore, we would like to thank the first responders and essential workers all around the world who keep us safe and allow us to better serve our customers. In order to ensure the orderly conduct of the business of this meeting, we have adopted the order of business set forth in the agenda and established rules of order for this meeting. A copy of the agenda and the rules of order can be found on the website. We ask that in fairness to all stockholders attending this meeting, you honor the agenda and the rules of order, as directed by me as the Chairman of the meeting. During this meeting, questions from stockholders should pertain to the proposals being considered at that particular time. If you have a question on an item of business, please submit your question on the portal and as outlined in the rules of order. These questions will be viewed by management and addressed in accordance with the rules of order. After voting on the items of business has concluded, this meeting will be adjourned. We will now proceed. I'm pleased to introduce the other members of our Board of Directors who are with us today: Elizabeth K. Arnold, James D. Cirar, Thomas A. Madden, James R. Meyer, Malcolm F. Moore and Andrew B. Schmitt. Georgia Vlamis, the Vice President, General Counsel, Corporate Secretary and Human Resources of the company, will act as secretary of this meeting. Also online with us today, and available to answer appropriate questions during the meeting, is Ben Resch from Deloitte & Touche, our independent registered public accounting firm. In addition, the Board has appointed Georgia Vlamis to serve as the independent Inspector of the Election for this meeting. I confirm that she has her oath of office with the secretary of the meeting for inclusion in the minutes of this meeting. Georgia, would you please give us the secretary's report?

Mr. Chairman, the annual report, a notice of this meeting, the proxy statement and the proxy card were mailed on March 30, 2020, to stockholders of record as of March 18, 2020, the record date for this meeting. Affidavits to that effect will be part of the record of this meeting. A list of our holders of record of common stock of the company at the close of business on March 18, 2020, is available on the website you logged on to in order to access this meeting. This list has been open for examination at the company for any purpose relevant to this meeting during ordinary business hours for the past 10 days. This list is also available for inspection during this meeting by any stockholder on the website used to access this meeting. I will file a copy of the list of stockholders with the records of the company. Proxies representing 10,152,764 shares of common stock were received prior to the meeting. These shares amount to 77.11% of the shares entitled to vote and constitute a quorum. Mr. Gehl?

Thank you, Georgia. Four items of business are under consideration today: The election of 2 Class III directors; an advisory vote on executive compensation; the approval of the FreightCar America long-term incentive plan, as amended and restated effective May 14, 2020; and the ratification of the appointment of Deloitte & Touche as our independent registered public accounting firm for 2020. It is now 10:06 on May 14, 2020, and the polls are open for voting. [Voting]

All FreightCar America stockholders entitled to vote at this meeting have the ability to do so online. If you are a stockholder entitled to vote and have not yet voted, please do so via the website used to access this meeting. Please remember that if you have already voted by proxy, it is not necessary to vote again unless you wish to change your vote. After voting has been completed on all matters on the agenda, we will close the polls and the inspector of election will provide her preliminary report. Proposal 1, election of Class III directors. The first item of business is the election of 2 Class III directors. Nominations are now in order for 2 Class III directors. Information concerning the nominees' principal occupations, service as FreightCar Board members, skills and qualifications and other matters which may be of interest are contained in the proxy statement. No other nominations were received prior to the deadline established by the company's bylaws. Therefore, no additional nominations may be made at this meeting, and I declare the nominations to be closed. Additionally, Thomas A. Madden, a Class III director whose term is expiring today, has decided not to stand for reelection. We thank Mr. Madden for his 15 years of service to the company.

Mr. Chairman, I propose a motion for the nomination of Elizabeth K. Arnold and James R. Meyer, whose current terms are expiring today, as Class III directors for terms expiring at the 2023 annual meeting.

Thank you, Mr. Moore. May I have a second for the motion?

Mr. Chairman, I second the motion.

Thank you, Mr. Cirar. Are there any questions from shareholders on this proposal?

There are no questions, Mr. Chairman.

Proposal 2, advisory vote on executive compensation. The second item of business is an advisory vote on the compensation of our named executive officers. This proposal is advisory only. Although nonbinding, the vote will provide information to our Compensation Committee and our Board regarding investor sentiment about our executive compensation philosophy, policies and practices, which our compensation committee and Board will be able to consider when making future executive compensation decisions. I propose a motion for the approval on an advisory basis of the compensation of our named executive officers by the adoption of the following resolution: Resolved, that the compensation paid to the company's named executive officers as disclosed pursuant to Item 402 of Reg S-K, including the compensation tables and narrative discussion set out in the company's proxy statement for its 2020 Annual Meeting of Stockholders is hereby approved. May I have a second for this motion?

Mr. Chairman, I second the motion.

Thank you, Mr. Cirar. Are there any questions from shareholders on this proposal?

There are no questions, Mr. Chairman.

The third item of business to be considered is the approval of the FreightCar 2018 long-term incentive plan as amended and restated effective May 14, 2020. Our Compensation Committee approved the changes to the 2018 LTIP on March 10, 2020, and our Board approved the changes to the 2018 LTIP on March 11, 2020, subject to the approval by our stockholders at this meeting. If Proposal 3 is approved by our stockholders, the FreightCar America 2018 long-term incentive plan, as amended and restated effective May 14, 2020, will become effective as of the date of today's meeting. In the event that our stockholders do not approve Proposal 3, the FreightCar America 2018 long-term incentive plan will continue in its current form. The Board recommends that you vote for the approval of the FreightCar America 2018 long-term incentive plan as amended and restated effective May 14, 2020. Are there any questions from shareholders on this proposal?

There are no questions, Mr. Chairman.

The fourth and final item of business to be considered is the ratification of the appointment by our Audit Committee of Deloitte & Touche as our independent registered public accounting firm for 2020. I propose a motion for this ratification. May I have a second on the motion?

Mr. Chairman, I second the motion.

Thank you, Mr. Moore. Are there any questions from shareholders on this proposal?

There are no questions, Mr. Chairman.

This concludes the items to be voted on today. The polls are about to close. So if you have not yet voted, please do so. Thank you. Since everyone has had the opportunity to vote, it is now 10:11 on May 14, 2020, and the polls are now closed. Let's take a minute to confirm the results of the voting. Georgia, do you have the results?

Yes, Mr. Chairman. The 2 Class II director nominees have received a plurality of the votes cast. The approval of the FreightCar America, Inc. 2018 long-term incentive plan, as amended and restated effective May 14, 2020, and the ratification of our independent registered public accounting firm have each received a majority of the votes cast. The approval on an advisory basis of the compensation of our named executive officers did not receive a majority of the votes cast. Therefore, Elizabeth K. Arnold and James R. Meyer have been elected as Class III directors and the FreightCar America, Inc. 2018 long-term incentive plan as amended and restated effective May 14, 2020, is approved and is effective as of the date of this meeting, and the appointment of Deloitte & Touche LLP as the company's independent registered public accounting firm has been ratified. While the votes to approve the compensation of our named executive officers did not receive a majority of stockholder votes, this vote is only advisory. That being said, we highly value the feedback of our stockholders and the results of the vote will be considered in connection with future discussions regarding compensation of the company's named executive officers. Final results will be made available in our Form 8-K to be filed within 4 business days of this meeting.

Thank you, Georgia, and thanks to all of our stockholders for being here with us virtually today. I'd also like to thank the stockholders who submitted their proxies. The directors, officers and employees of FreightCar America appreciate the loyalty and confidence of all of our stockholders. Additionally, I would like to express our sincere gratitude to all members of the FreightCar family for their continued service and commitment to FreightCar as we navigate these unpredictable times. Lastly, on behalf of FreightCar directors, officers and employees, we would like to again thank all of the first responders and essential workers on the front lines of the pandemic for their dedication and courage. The meeting is adjourned. That concludes the formal part of our meeting. Thank you all for your attendance this morning.

Operator?

This concludes the meeting. You may now disconnect.