American Railcar Industries, Inc.
Apr 28, 2010

American Railcar Industries, Inc. Reports First Quarter 2010 Results

ST. CHARLES, Mo., Apr 28, 2010 (BUSINESS WIRE) --American Railcar Industries, Inc. (ARI or the Company) (NASDAQ: ARII) today reported its first quarter 2010 financial results.

"The railcar industry, while still at a low point of the economic cycle, appears to be picking up momentum with reports showing that railcar loadings have increased and many stored railcars are returning to service. Along with this modest improvement, which may or may not continue, we have received an increased number of requests for quotations and have been successful in securing several orders in 2010. Both of our railcar manufacturing facilities have maintained production through the downturn, albeit at low levels. In spite of the weakness in new railcar manufacturing, our railcar services segment has been strong with 36% growth in revenues, year-over-year, to $16.7 million for the first quarter of 2010. This growth resulted from higher volumes driven by repair plant expansions and repair work performed at our railcar manufacturing plants," said James Cowan, President and CEO of ARI. "We are also pleased to announce that the financing for Amtek Railcar Industries Private Limited, our Indian joint venture, was completed and a facility is currently under construction to manufacture railcars to service the Indian markets."

For the three months ended March 31, 2010, revenues were $52.3 million and net losses were $7.0 million or $0.33 per share. In comparison, for the three months ended March 31, 2009, revenues were $156.9 million and net earnings were $2.7 million or $0.13 per share. Revenues were lower in the first quarter of 2010 when compared to the same period of 2009 primarily due to lower railcar shipments and decreased overall average railcar selling prices due to pricing pressures and a change in product mix. These decreases were partially offset by increased railcar repair volumes due to completed facility expansions and the utilization of our railcar manufacturing facilities for railcar repair projects. During the three months ended March 31, 2010, the Company shipped approximately 340 railcars as compared to approximately 1,490 railcars in the same period of 2009. Our backlog was approximately 500 railcars as of March 31, 2010.

EBITDA loss, adjusted to exclude investment activity and stock based compensation expense (Adjusted EBITDA), was $0.3 million in the first quarter of 2010 compared to positive Adjusted EBITDA of $14.1 million in the first quarter of 2009. This decrease resulted primarily from decreased railcar shipment volume, a decrease in gross profit margin and an increase in joint venture losses that was primarily driven by losses at the Company's axle joint venture. These decreases were partially offset by a decrease in selling, administrative and other costs. The Company's gross profit margin decline is primarily attributable to decreased overall average selling prices and the impact of fixed costs in a low production environment. Management has and will continue to monitor costs and control discretionary spending. A reconciliation of the Company's net loss to EBITDA loss and Adjusted EBITDA (both non-GAAP financial measures) is set forth in the supplemental disclosure attached to this press release.

The Company's net loss for the first quarter of 2010 was affected by lower revenues and gross profit margins, as discussed above, an increase in net interest expense and increased losses from joint ventures all partially offset by a decrease in our selling, administrative and other costs.

ARI will host a webcast and conference call on Thursday, April 29, 2010 at 10:00 am (Eastern Time) to discuss the Company's first quarter 2010 financial results. To participate in the webcast, please log on to ARI's investor relations page through the ARI website at www.americanrailcar.com. To participate in the conference call, please dial 800-447-0521 and use participant code 26857596. Participants are asked to logon to the ARI website or dial in to the conference call approximately 10 to 15 minutes prior to the start time.

An audio replay of the call will also be available on the Company's website promptly following the earnings call.

About American Railcar Industries, Inc.

American Railcar Industries, Inc. is a leading North American designer and manufacturer of hopper and tank railcars. ARI also repairs and refurbishes railcars, provides fleet management services and designs and manufactures certain railcar and industrial components. ARI provides its railcar customers with integrated solutions through a comprehensive set of high quality products and related services.

Forward Looking Statement Disclaimer

This press release contains statements relating to our expected financial performance and/or future business prospects, events and plans that are forward-looking statements. Forward-looking statements represent the Company's estimates and assumptions only as of the date of this press release. Such statements include, without limitation, statements regarding potential improvements in the railcar industry, the potential for increased order activity, anticipated future production rates and any implication that the Company's backlog may be indicative of future sales. These forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from the results described in or anticipated by our forward-looking statements. Other potential risks and uncertainties include, among other things: the impact of the current economic downturn, adverse market conditions and restricted credit markets, and the impact of the continuation of these conditions; our reliance upon a small number of customers that represent a large percentage of our revenues and backlog; the health of and prospects for the overall railcar industry; our prospects in light of the cyclical nature of the railcar manufacturing business and the current economic environment; anticipated trends relating to our shipments, revenues, financial condition or results of operations; our ability to manage overhead and production slowdowns; the highly competitive nature of the railcar manufacturing industry; fluctuating costs of raw materials, including steel and railcar components and delays in the delivery of such raw materials and components; fluctuations in the supply of components and raw materials ARI uses in railcar manufacturing; anticipated production schedules for our products and the anticipated financing needs, construction and production schedules of our joint ventures; risks associated with potential joint ventures or acquisitions; the risk of lack of acceptance of our new railcar offerings by our customers; the sufficiency of our liquidity and capital resources; the conversion of our railcar backlog into revenues; compliance with covenants contained in our unsecured senior notes; the impact and anticipated benefits of any acquisitions we may complete; the impact and costs and expenses of any litigation we may be subject to now or in the future; the ongoing benefits and risks related to our relationship with Mr. Carl C. Icahn (the chairman of our board of directors and, through his holdings of Icahn Enterprises LP, our principal beneficial stockholder) and certain of his affiliates; and the additional risk factors described in our filings with the Securities and Exchange Commission. We expressly disclaim any duty to provide updates to any forward-looking statements made in this press release, whether as a result of new information, future events or otherwise.

EBITDA represents net earnings (loss) before income tax expense, interest expense (income), net of depreciation of property, plant and equipment. The Company believes EBITDA is useful to investors in evaluating ARI's operating performance compared to that of other companies in the same industry. In addition, ARI's management uses EBITDA to evaluate operating performance. The calculation of EBITDA eliminates the effects of financing, income taxes and the accounting effects of capital spending. These items may vary for different companies for reasons unrelated to the overall operating performance of a company's business. EBITDA is not a financial measure presented in accordance with U.S. generally accepted accounting principles (U.S. GAAP). Accordingly, when analyzing the Company's operating performance, investors should not consider EBITDA in isolation or as a substitute for net earnings (loss), cash flows from operating activities or other statements of operations or statements of cash flow data prepared in accordance with U.S. GAAP. Our calculation of EBITDA is not necessarily comparable to that of other similarly titled measures reported by other companies.

Adjusted EBITDA represents EBITDA before share based compensation expense (income) related to stock appreciation rights (SARs), and before gains or losses on investments and derivative instruments. We believe that Adjusted EBITDA is useful to investors evaluating our operating performance, and management also uses Adjusted EBITDA for that purpose. Our SARs (which settle in cash) are revalued each quarter based upon changes in our stock price. Management believes that eliminating the expense (income) associated with our stock based compensation, investments and derivates allows us and our investors to understand better our operating results independent of financial changes caused by the fluctuating price and value of our common stock, investments and derivative instruments. Adjusted EBITDA is not a financial measure presented in accordance with U.S. GAAP. Accordingly, when analyzing our operating performance, investors should not consider Adjusted EBITDA in isolation or as a substitute for net earnings (loss), cash flows from operating activities or other statements of operations or statements of cash flow data prepared in accordance with U.S. GAAP. Our calculation of Adjusted EBITDA is not necessarily comparable to that of other similarly titled measures reported by other companies.

SOURCE: American Railcar Industries, Inc.

American Railcar Industries, Inc.
Dale C. Davies or Michael Obertop, 636-940-6000