FreightCar Doubles 2008 Income Report

Rail equipment manufacturer FreightCar America said it completed an accounting review that goes back to 2007, and is restating 2008 profit to more than double what it first reported.

It now books 2008 net income of $11.4 million, up from $4.6 million that it previously reported. Its 2007 profit should be $27.5 million, the company said, instead of the reported $26.5 million.

But the restatement trims profit from this year’s first quarter to $2.4 million from the reported $2.6 million.

In all, FreightCar said it found it overstated past accounts payable by $12.3 million as of June 30, 2009. That is about midway in the range it projected in late July, when it first gave notice of the past errors.

The accounting issue also prompted it to delay normal quarterly financial reports to the Securities and Exchange Commission until it could complete a full review. It now plans to issue second-quarter results Sept. 22.

FreightCar said it found the profit-boosting problem in its accounting while trying to implement a new bookkeeping software system. And through the review, the company said it “determined that it had control deficiencies pertaining to systems change controls, inventory valuation controls and account reconciliation controls that constituted material weaknesses.”

Contact John D. Boyd at jboyd@joc.com.