Ladies and gentlemen, welcome to the FreightCar America’s First Quarter 2012 Earnings Conference Call and Webcast. [Operators Instructions] Please note that this conference call is being recorded. An audio replay of the conference call will be available from 1 p.m. Eastern Daylight Time today until midnight Eastern Daylight Time on June 8, 2012. To access the replay please dial (800) 475-6701, replay passcode is 246557. The audio replay of the call will be available on the company’s website within 2 days following this earnings call. I would now like to turn the call over to Joe McNeely, Chief Financial Officer of FreightCar America. Please go ahead Sir.

Thank you and welcome to the FreightCar America’s First Quarter 2012 Earnings Conference Call and webcast. Joining me today are Ed Whalen, President and CEO and Ted Baun, Senior Vice President, Marketing and Sales. Before we begin, I’d like to remind everyone that statements made during this conference call relating to the company’s expected future performance, future business prospects for 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 2011 Form 10-K for a 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 especially disclaim any duty to provide updates to our forward-looking statements whether as a result of new information, future events or otherwise. Our 2011 Form 10-K and earnings release for the first quarter of 2012 are posted on the company’s website at www.freightcaramerica.com. I would now like to turn the call over to Ed Whalen, our President and CEO.

Thank you, Joe, and good morning. Welcome to FreightCar America’s First Quarter 2012 Earnings Call. I’m pleased to report a very strong quarter for FreightCar America. We produced the sixth sequential quarterly increase in railcar deliveries revenues and operating income. In fact our first quarter results reflect the highest number of cars delivered in any quarter since 2008. To recap order activity, 1,244 railcars were ordered in the first quarter of 2012 compared to 4,027 cars ordered in the first quarter of 2011 and 4,481 railcars ordered in the fourth quarter of 2011. We delivered 2,613 railcars in the first quarter of 2012, which compares to 875 railcars in the first quarter of 2011 and 2,489 railcars in the fourth quarter of 2011. Our backlog of unfulfilled orders at March 31, 2012 was 6,934 railcars compared to 5,206 railcars at March 31, 2011 and 8,303 railcars at December 31, 2011. Industry wide there were 12,473 railcars ordered and 16,816 railcars delivered in the first quarter of 2012 and as a result, industry wide backlogs decreased to 60,191 railcars at the end of March. When compared to the first quarter of 2011 North American commodity loadings in the first quarter of 2012 were down 1.1% driven by coal and agricultural products while loadings for other commodities remained positive. Coal loadings decreased by 8.6% and intermodal loadings increased by 3.8%. Demand for coal was adversely impacted by several factors in the first quarter. This winter was unusually mild in much of North America. Natural gas prices hit their lowest level in 10 years electric power consumption declined and rail velocities improved significantly year-over-year. U.S. electricity generation where coal competes as a power generating fuel was down 4.1% in the first quarter when compared to the same quarter in 2011. Overall U.S. coal…

Thank you, Ed. Consolidated revenues were $219 million for the first quarter of 2012, which were $147 million higher than the first quarter of 2011 and $32 million higher than the previous quarter. The increases in revenue reflect higher number of railcars delivered and higher average revenue per rail car. Net income for the first quarter of 2012 was $9.7 million or $0.81 per diluted share compared to a net loss for the first quarter of 2011 of $1.3 million or $0.11 per share. Net income was $8.5 million or $0.71 per diluted share in the last quarter of 2011. Manufacturing and segment revenues for the first quarter of 2012 rose to $210 million compared to $63 million in the first quarter of 2011, and $179 million in the fourth quarter of 2011. The increase reflects higher railcar deliveries and increased revenue to railcar due in part to product mix changes and higher material cost. In the first quarter of 2012, operating income for the manufacturing segment was $22.7 million or 10.8% of revenues, which was $22.5 million or 10.5 percentage points higher in the first quarter of 2011 and $6.2 million and 1.6 percentage points higher than the prior quarter. The increase in operating income reflects the increase in deliveries, product mix in gain on sale with leased railcars. Services segment revenues for the first quarter of 2012 were $8.6 million which was $500,000 lower than the first quarter of 2011 as increases in parts sales were offset by decreases in repair revenues. Services segment revenues improved $800,000 in comparison to the prior quarters as repair volumes increased. Operating income for the services segment was $700,000 in the first quarter of 2012, this was $400,000 lower than the first quarter of 2011 with $200,000 higher than the prior quarter. Corporate cost for the first quarter of 2012 were $7.4 million, these costs were up $2.3 million from the first quarter of 2011, that down $200,000 from the prior quarter of last year. The year-over-year increase reflects additional compensation cost, due to the growth in the business and consulting related expenses. The effective tax rate in the first quarter of 2012 was 38.8%. The value of railcars under lease was $44.4 million as of March 31, 2012, which was down $10.3 million from the end of December 2011 due primarily to the sale of railcars and lease. Our financial position continues to be strong with no upstanding debt and cash on hand as of March 2012 of $145 million up $41 million from the end of December 2011. Working capital excluding cash decreased $16 million from the end of the fourth quarter 2011, as the increase in inventories and receivables was more than offset by payables. We have no current plans to draw upon our involving credit facility. This ends our prepared comments, and we’re now ready to address your questions.

[Operator Instructions] And our first question in queue will come from Peter Nesvold, with Jefferies.

So we looked at the RSI data last month that it said no aluminum coal cars were ordered and if I did the back of the envelope math right it looked like you got about 1200 orders in total for this particular quarter. So, can you tell us what was ordered in the quarter? What car types or any other color around that?

Sure. Essentially, it’s mix of coal and other car types.

Okay, but not aluminum?

There were no aluminum cars ordered.

Okay. And how many more used cars do you have in the backlog right now? Is that included in the headline number that you show in the press release?

Can you – what do you mean by used? Are you talking about the rebuilds we mentioned last quarter?

Yes, exactly. So it said in the release there were let me just find the words here. There were a handful of used cars that were delivered in the quarter.

That was just a small number of cars that we took in on trade in prior deals over the last couple of years. It was a very small number.

Okay. Well then the rebuilds, are they included in the backlog number or not?

Yes, they are.

They are.

Okay. And so of the cars that are in backlog right now, can you tell us what’s the split between new and what’s in there for refurbished?

No, we don’t give guidance at that detailed level.

Okay. And then last question. How should we think about SG&A costs going forward. Whether in absolute dollar terms or as a percent of revenue and in the event that orders continue to be weaker than second half of the year, how much flexibility is there to bring that back down?

Again, as you look at us, our SG&A doesn’t trend with as a percentage of revenue, it’s more of a step function. It is up over the first quarter of last year again given the improvement in the business and composition of consulting cost, but it is essentially flat with last quarter.

Our next question in queue will come from Michael Gallo with CL King.

Question I have is just on other car types. Where do you stand on getting regulatory approvals on the new intermodal racks?

We have regulatory approval on the new intermodal unit right now. It’s continuing to have some supplemental testing and it should be available for production later this year.

And any -- can you give us any update on are you getting a lot of interest or what’s just the general customer feedback been so far?

We’ve had quite a bit of interest in our intermodal products over the last several months.

So that’s something you expect should be ready to go where you’ll be ready to manufacture it and sell it in the back half?

Yes, we should be ready in the second half of the year to do that.

Our next question in queue will come from the line of Brad Delco with Stephens.

I know you guys made the comment on the rebuilds, I guess was there -- guess my assumption is given the improvement in the ASP in the quarter and what you said last quarter was that these rebuilds would be lower revenue per unit. Did we see any being delivered this quarter?

There were no rebuilds delivered this quarter.

Okay. Got you. I think, I can do the map on kind of what’s remaining on the backlog been. And then Ed, just to kind of dig into one your comments, you said you expected the first half of 2012 to be stronger than the second half. I would guess, I was just wondering, if I can get more detail on what you’re really commenting on there is that order activity or is that your specific financial performance or how do we need to read into that?

I think the answer is yes, it is yes to both those questions. I think we’re relying to see somewhat less robust order activity in the second half as well as we expect our financial performance will be higher in the first half versus the second half.

Got you. And then I guess I had the question, I have two lease looking at the backlog and then looking at the orders. I mean, do you anticipate sustaining your current build rate or is there any thoughts to kind of adjusted downwards to have some prolongness if you will in that backlog?

Again we -- our build rate is determined by our customers’ requirements and we will continue to build to those requirements. So, I guess that’s all I can say about that one.

Okay. I guess then may be Joe you typically say the backlog represents most of which will be delivered over a certain timeframe is most of the backlog for 2012 or does some of it go over the 2013?

Yes, as we said last quarter some of that does go over into 2013.

Okay. And then Joe maybe my last question. You mentioned some consulting related expenses you mind just commenting on what the -- I guess the nature of whatever consulting agreement it is or what’s, what’s?

It varies, it’s nothing specific it covers a number of broad car types from systems and other related items, nothing specific.

Okay. And then maybe my last question I apologize, I know you guys have commented on looking at growing the service business and obviously a very impressive balance sheet any update on what the M&A market looks like or what activities like in that market?

We are continuing to take a look at that area and as soon as there is something to report well we will advise you.

Our next question in queue will come from Eric Crawford with UBS.

A couple questions. One just a quick point clarification. Were any of the first quarter orders for rebuilds or to your leasing subsidiary. I know in the past you’ve disclosed if they were rebuilds. But I just want to make –

There were no rebuilds in the first quarter orders.

Okay. And were some of those orders to your leasing subsidiary?

I do not believe so.

And then real quick, on just with the increase in coal cars in storage, are you seeing any customers altering their planned delivery schedules?

No, we’re not.

Our next question in queue will come from Steve Barger with KeyBanc Capital Market.

In terms of 2Q mix, are deliveries going to look like 1Q plus or minus?

We don’t give out that specific guidance.

Okay. Well in terms of your comment about making less in the back half, is it fair to think that, that’s due to the change in mix, as you shift more to rebuild as you proceed through the year, why would that be the case?

I think it’s a combination of -- it’s basically a product mix and volume issue.

So, and you have visibility in your production schedule, when you say a product mix is that fair to think that, that’s more rebuild in the back half or is it a different car type that has less margin?

I think it’s fair to say there’s more rebuild in the second half, since that’s correct.

The next question in queue will come from Sal Vitale with Sterne Agee.

Just a few quick -- first a clarification if I could. So in looking at the deliveries for the quarter just to make sure, so there were 2,226 total deliveries and then there were the leased deliveries of 387. So the gain on sale of rail-cars, so that’s 948,000 gain that was related to the 387 cars, correct?

No actually the under the accounting those were cars that were already in our lease fleet, those were delivered but unleased in prior-year.

That the 387.

No. The gain.

The cost related to the gain on sale.

So where as the 387, they were already in your health for sale.

No, those cars were manufactured and put into the lease fleet in the first quarter.

Got it. Manufacturing, put into the lease fleet and that gets you 26. Okay, so then I guess the right way to think about the ASP would be the total manufacturing revenue divided by the total cars delivered of 2,600, right?

That would be a correct calculation.

Yes. So just looking at it that way, basically I see some a little bit of an increase there, sequentially in the price. Did you mention earlier that was more related to mix rather than pure pricing increase?

There is a number of things that are going in that, mix has as a big piece of that as -- different car types have different material components and the changes as we talked in the past, changes to the average revenue per car.

Okay. And then on the rebuild, the 3,300 units you ordered, you received in 4Q for rebuild units, you are saying that none of them delivered in 1Q. And you would expect them, I guess the total amount to be skewed towards the second half.

That’s correct.

Okay. So then we should see, at some point, we should see a sequential step down in the ASP just by bent of that, correct?

That’s correct.

Now in terms of profitability, though the profitability was actually very healthy, how do we think about that in terms of, once the deliveries mix include some of the rebuilt units, in terms of absolute dollars, should we expect any step down in that type of gross profit per car that you generated in 1Q?

Sales we talked before, we don’t give out specific financial guidance and in this case there is a lot of factors that go into that in terms of product mix and the different car types that get delivered.

Okay. Well let me ask you in a different way then, I guess if I look at the gross profit per car and if I’m looking at it correctly, I’m just dividing the gross profit divided by the 2,613 cars which includes the leased cars that were sold. The cars sold through lease fleet rather and I calculate $9,082 gross profit per car. How do we think about that going forward, should we think about that start to decelerate or rather was there anything specific to 1Q that drove up that number?

There is nothing specific in 1Q that drove up that number, but we don’t give guidance, future guidance.

Okay. That’s helpful. And then just if I could just turn back to what you said earlier about the increase in the overall railcar fleet. So it seems like the entire increase sequentially from 4Q to 1Q was due to coal cars. Do you expect that to -- I assume that’s increased further since the end of the quarter? Do you -- do you think you start to level off in terms of that storage number at some point in the next couple of months?

Yes, Sal. This is Ted Baun. Lot of the industry folks are asking that exact question. We would expect it to taper off, but we just don’t know. A lot of the folks who follow the coal market think that, that it’s going to level off here and its hit bottom, but like I said we just don’t know. We remain unclear on that.

Okay. If I could just ask one more. The margin increased sequentially the -- if I look at the manufacturing operating margin increased nicely sequentially. Is there -- I guess can you -- is there any color you can provide us to how much of that sequential increase was due to just better pricing as opposed to just say utilization. Just a fixed course absorption in the system?

We don’t give out any that kind of level of detail. So, I mean there is as you’d expect with more partial orders always a little bit of operating leverage there, but we don’t give out specifics.

And our next question in queue will come from Fritz Von Carp with Sage Asset Management.

Yes. I just had a question right you made some comments about the coal market earlier about volumes had been down and stuff. I just wanted to make sure I understand that these specific which market you were talking about and what your view is on the metallurgical coal export market I mean if no aluminum cars were ordered it would seem you have a lot of dependence on that and what were your comments directed at the entire sort of broader coal market of which a lot is thermal or were you speaking more specifically about the export market?

Yes. Fritz, good question and I was speaking more of the thermal market for coal.

Okay. And do you want to make any comments on the export market or the metallurgical export market?

As I mentioned in my prepared remarks, we expect the export market to be continue to be strong this year. Perhaps not quite approaching record levels of last year, but getting pretty close to it.

Our next question in queue will come from Matthew Dodson with Edmunds White Partners.

Can you talk a little bit about just and maybe you don’t give this, but your order rates that you saw in April?

We don’t report on order rates, post quarter we don’t report on a quarterly basis.

Okay. Can you talk a little bit about what you’re seeing in pricing. Since you’ve talked about orders starting to decelerate, has pricing started to get more competitive or are you seeing that you have to discount more et cetera in pricing?

Yes. It’s certainly going to get more competitive in the marketplace. We’re seeing it now and we expect that to continue.

Can you give us a sense of how much of pricing maybe has deteriorated at all.

No, we don’t do give that level of guidance.

Okay and then, can you talk about capacity utilization, so obviously you were at a certain capacity utilization through Q1. Can you give us a sense of where you are relative to the capacity utilization now or how much you’ve decelerated or brought down?

As I mentioned earlier, we build to our customers’ requirements for delivery purposes and will continue to do that the rest of the year, we do still have a limited amount of the on the fourth quarter.

And then, the last question that I have for you is obviously you have a phenomenal balance sheet and I mean, can you talk it all about how potentially you might start to put that or to benefit shareholders?

I think we have mentioned several times in the past our interest in continuing to grow our Service business and we are continuing to explore those opportunities as they occur and we are working that actively at this point.

[Operator instructions] and next in queue is from the line of Eric Dominguez [ph] with the Clinton Group.

Had a question about if you had any insights into how the rail companies or the leasing companies are deciding between rebuilds and new orders? And then also how we are trying to influence that decision.

This is Ed. The rebuild market is very specific to the availability of Hulks [ph] and it is very difficult to make a generalization from one group to the other. But I think you should just keep that in mind that there is relative limited availability of Hulks and it is very specific to Hulks that are owned by those individual companies.

And then in reference to the coal cars in storage, do you have a feel for the percentage that’s the older steel cars and also the breakdown between the rail company and the leasing companies?

Well, we said there were 35,000 coal cars in the storage and the total fleet is about 270,000 coal cars. I don’t have the breakdown of aluminum or steel at this point or ownership.

Okay. And then as far as related to your build rate and capacity utilization. On your delivery dates how hard our those delivery dates? What kind of flexibility do you have on delivery dates?

We have day ladies out into 2013 at this point.

Are the specialized by quarter or specific date what’s the timeframe?

We have specific contractual delivery dates.

We do have a follow-up question in queue from Sal Vitale.

Just had one additional question, if we look at the services business, how should we expect the revenue to continue to ramp up in that business say through the rest of 2012?

We would -- we expect to see a gradual improving trend in that business for the rest of the year.

Okay. And in terms of profitability, what type of margin expansion should we be expecting for that business?

As Joe has pointed out, we don’t give guidance related to margins.

Thank you very much. And at this time, there are no other questions in queue.

Okay. All right. This concludes today’s conference call. Thank you for joining. A replay of this call will be available beginning at 1 p.m. Eastern Time today at 1 (800) 475-6701, passcode 246557. Good day.

Thanks, everyone.

Thank you. And ladies and gentlemen, that does conclude your conference call for today. We do thank you for your participation and for using AT&T’s Executive Teleconference. You may now disconnect.