American Railcar Industries, Inc.
Mar 3, 2010

American Railcar Industries, Inc. Reports Results for the Year Ended December 31, 2009

ST. CHARLES, Mo., Mar 03, 2010 (BUSINESS WIRE) -- American Railcar Industries, Inc. (ARI or the Company) (NASDAQ: ARII) today reported its fourth quarter and year end 2009 financial results.

"The Company's 2009 results include net earnings of $15.5 million and the shipment of approximately 3,690 railcars," said James Cowan, President and CEO of ARI. "Railcar shipments in 2009 were significantly lower than in 2008 due to the railcar market being affected by a weak economy. Our railcar services segment experienced a 13% growth in revenues in 2009 as compared to 2008 and an increase in gross profit margin due to the completion of several expansion projects in 2009 that have generated higher volumes and increased efficiencies. Our balance sheet position remains strong with $375.0 million of working capital, which includes $351.1 million in cash and cash equivalents. Due to continued weakness in the railcar market, we expect our shipments and revenues to decrease in 2010 from 2009."

For the three months ended December 31, 2009, revenues were $78.5 million and net earnings were $10.5 million or $0.50 per share. In comparison, for the three months ended December 31, 2008, revenues were $203.0 million and net earnings were $7.6 million or $0.35 per share. Net earnings in the fourth quarter of 2009 were positively impacted by the Company's short-term investment activity, which resulted in a net gain of $17.8 million for the quarter, $11.6 million after-tax or $0.54 per share.

Revenues were lower in the fourth quarter of 2009 compared to the same period of 2008, primarily due to a decrease in the number of railcars shipped and a decrease in surcharges reflected in selling prices, partially offset by a change in product mix and an increase in revenues from the railcar services segment. During the three months ended December 31, 2009, the Company shipped approximately 610 railcars compared to approximately 1,870 railcars in the same period of 2008.

EBITDA, adjusted to exclude investment activity and stock based compensation expense, was $7.9 million in the fourth quarter of 2009 as compared to $20.2 million in the fourth quarter of 2008. This decrease resulted primarily from decreased railcar shipments, as discussed above, and an increase in joint venture losses, all partially offset by lower selling, administrative and other costs. Losses from joint ventures were $1.6 million higher in the fourth quarter of 2009 than in the fourth quarter of 2008, primarily due to temporarily idling the Company's castings joint venture and losses from its axle joint venture.

In the fourth quarter of 2009, net earnings benefited from higher other income partially offset by joint venture losses and decreased railcar shipments, as discussed above. Other income of $17.8 million, as mentioned above, related to net gains on the Company's short-term investment activity in the fourth quarter of 2009 as compared to $0.2 million, $0.1 million after-tax or $0.01 per share of other income in the fourth quarter of 2008 related to short-term investment activity. A reconciliation of the Company's net earnings to EBITDA (a non-GAAP financial measure) is set forth in the supplemental disclosure attached to this press release.

For the year ended December 31, 2009, revenues were $423.4 million and net earnings were $15.5 million or $0.73 per share. In comparison, for the year ended December 31, 2008, revenues were $808.8 million and net earnings were $31.4 million or $1.47 per share. Net earnings for 2009 were positively impacted by the Company's short-term investment activity, which resulted in a net gain of $20.9 million for the year, $13.6 million after-tax or $0.64 per share.

Revenues were lower in 2009 compared to 2008 primarily due to decreased railcar shipments and a decrease in surcharges reflected in selling prices, partially offset by a change in product mix and an increase in revenues from the railcar services segment. During the year ended December 31, 2009, the Company shipped approximately 3,690 railcars compared to approximately 7,970 railcars in the same period of 2008.

EBITDA, adjusted to exclude investment activity and stock based compensation expense, was $40.0 million for the year ended December 31, 2009 compared to $78.8 million for the year ended December 31, 2008. This decrease resulted primarily from decreased railcar shipments, as discussed above, and an increase in joint venture losses, partially offset by an increase in earnings from the railcar services segment and lower selling, administrative and other costs. Losses from joint ventures were $7.5 million higher in 2009, as compared to the same period in 2008, resulting in a decrease to earnings of $5.3 million after-tax or $0.25 per share, primarily due to temporarily idling the Company's castings joint venture and losses from its axle joint venture.

During 2009, net earnings were negatively impacted by decreased railcar shipments and joint venture losses, as discussed above, partially offset by an increase in other income. Other income of $20.9 million as discussed above, related to net gains on the Company's short-term investment activity in 2009 as compared to $3.7 million, $2.4 million after-tax or $0.11 per share of other income in 2008 related to short-term investment activity. Net earnings benefited from a one-time $1.0 million adjustment to accrued taxes due to certain tax benefits becoming recognizable during 2009. Net earnings were negatively impacted by net interest expense, which increased $1.3 million after-tax or $0.06 per share primarily due to lower interest rates negatively affecting interest income and a decrease in capitalized interest.

Our backlog was approximately 550 railcars as of December 31, 2009. The backlog level has declined primarily due to continued weak demand for railcars.

ARI will host a webcast and conference call on Thursday, March 4, 2010 at 10:00 am (Eastern Time) to discuss the Company's fourth quarter and year end 2009 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 866-356-3377 and use participant code 22878923. 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 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; 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; anticipated production schedules for our products; anticipated financing needs and construction and production schedules of our joint ventures; 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 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, 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 related to stock options and 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. The charges related to our grants of stock options are non-cash charges that are excluded from our calculation of EBITDA under our unsecured senior notes. Our SARs (which settle in cash) are revalued each quarter based upon changes in our stock price. Management believes that eliminating the charges associated with our share 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, 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, 636-940-6000
or
Michael Obertop, 636-940-6000