American Railcar Industries, Inc.
Aug 5, 2009

American Railcar Industries, Inc. Reports Results for the Second Quarter Ended June 30, 2009

ST. CHARLES, Mo.--(BUSINESS WIRE)--Aug. 5, 2009-- American Railcar Industries, Inc. (ARI or the Company) (NASDAQ: ARII) today reported its second quarter 2009 financial results.

“We shipped approximately 980 railcars in the second quarter of 2009, resulting in EBITDA of $11.2 million and net earnings of $1.1 million,” said James Cowan, President and CEO of ARI. “As a result of a weaker economy and slowing demand for railcars, we shipped 53% fewer railcars in the second quarter of 2009 as compared to the same quarter of 2008. The softer railcar market has and will continue to require us to evaluate our production levels at all manufacturing locations and we plan to adjust the workforce as needed. In addition, we have made efforts to reduce overhead costs and control spending at all locations. All of these items have helped support profit margins. Our railcar services segment completed three plant expansions and revenues increased 12% in the second quarter of 2009 compared to the same quarter of 2008. Our balance sheet continues to be strong with $282.6 million in cash and $45.5 million in short-term investments.”

For the three months ended June 30, 2009, revenues were $109.9 million and net earnings were $1.1 million or $0.05 per share. In comparison, for the three months ended June 30, 2008, revenues were $204.5 million

and net earnings were $6.2 million or $0.29 per share.

Revenues in the second quarter of 2009 were lower than the same period of 2008 primarily due to lower railcar shipments due to decreased demand, partially offset by increased average railcar selling prices due to a change in product mix. During the three months ended June 30, 2009, the Company shipped approximately 980 railcars compared to approximately 2,080 railcars in the same period of 2008.

EBITDA was $11.2 million in the second quarter of 2009 compared to EBITDA of $18.0 million in the second quarter of 2008. The decrease in EBITDA and net earnings resulted primarily from decreased volume, as discussed above, and an increase in joint venture losses, all partially offset by an increase in other income, and a decrease in selling, administrative and other costs. Joint venture earnings decreased $2.1 million primarily due to the idling of the Company’s castings joint venture and expenses from the axle joint venture. In the second quarter of 2009, other income was less than $0.1 million and related to the foreign currency option that was satisfied during the quarter as compared to an other loss in the second quarter of 2008 of $1.5 million

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 six months ended June 30, 2009, revenues were $266.9 million and net earnings were $3.9 million or $0.18 per share. In comparison, for the six months ended June 30, 2008, revenues were $388.5 million and net earnings were $16.4 million or $0.77 per diluted share. Net earnings were negatively impacted by net interest expense increasing $0.9 million, after-tax, or $0.04 per share, primarily due to lower returns on cash balances.

Revenues were lower in the six months ended June 30, 2009 compared to the same period of 2008 primarily due to lower railcar shipments, partially offset by increased average railcar selling prices due to a change in product mix. During the six months ended June 30, 2009, the Company shipped approximately 2,470 railcars compared to approximately 3,980 railcars in the same period of 2008.

EBITDA was $25.2 million in the six months ended June 30, 2009 compared to EBITDA of $41.6 million in the six months ended June 30, 2008. The decrease in EBITDA and net earnings resulted primarily from decreased volume, increased joint venture losses and decreased other income. Joint venture earnings decreased $3.2 million primarily due to the idling of the Company’s castings joint venture and expenses from the axle joint venture. Other loss of $0.1 million for the six months ended June 30, 2009 was recorded as a result of the foreign currency option that was satisfied during April 2009. Other income for the six months ended June 30, 2008 was $1.7 million and was primarily related to gains on short-term investment activity.

The Company’s backlog was reduced to approximately 1,770 railcars as of June 30, 2009. The backlog level has declined primarily due to weak demand for railcars, driven mostly by a weak economy and a difficult credit environment. The Company will continue to quote on railcar orders as opportunities are available.

One of the Company’s largest customers, CIT Group Inc. (CIT), recently announced that in the event that it is unable to effect a comprehensive restructuring of its liabilities, or for other reasons, it may be forced to seek bankruptcy relief. CIT accounted for 13% and 31% of the Company’s revenues in the three and six months ended June 30, 2009, respectively, and accounts for 53% of orders included in the backlog as of June 30, 2009. In the event of bankruptcy for whatever reason, CIT, among other things, may have the right to cancel or could renegotiate its orders included in the backlog. Even if CIT does not seek bankruptcy relief, any continued financial difficulties of CIT could materially adversely affect the Company’s business relationship with CIT and the Company’s business, prospects and financial condition.

ARI will host a webcast and conference call on Thursday, August 6, 2009 at 10:00 am (Eastern Time) to discuss the Company’s second quarter 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 800-638-5495 and use participant code 26983398. 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, workforce adjustments and any implication that the Company’s backlog may be indicative of future sales, as well as statements regarding the potential consequences for the Company’s business and prospects as a result of CIT’s financial difficulties. 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 material adverse effects on the Company’s backlog, and its ability to convert backlog into revenues, that could result if CIT seeks bankruptcy relief or continues to experience financial difficulties; the health of and prospects for the overall railcar industry; our prospects in light of the cyclical nature of its railcar manufacturing business and the current economic environment; our ability to manage overhead and production slow downs; 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 acquisitions or joint ventures; 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; anticipated production schedules for our products and the anticipated construction and production schedules of our joint ventures; 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; compliance with covenants contained in our unsecured senior notes and in our revolving credit facility; the ongoing benefits and risks related to our relationship with Mr. Carl C. Icahn, our principal beneficial stockholder and the chairman of our board of directors, 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, or 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 or Michael Obertop, 636.940.6000