American Railcar Industries, Inc.
Feb 20, 2008

American Railcar Industries, Inc. Reports 28% Increase in Fourth Quarter Earnings and Record Earnings for Calendar Year 2007

ST. CHARLES, Mo.--(BUSINESS WIRE)--Feb. 20, 2008--American Railcar Industries, Inc. ("ARI" or the "Company") (NASDAQ: ARII) today reported its fourth quarter and full year 2007 financial results.

"ARI recorded its best financial performance ever in 2007. We are very pleased to have achieved strong results for both the quarter and the year in spite of the reduced demand and increased competition for hopper railcars," said James J. Unger, President and CEO of ARI. "For the year, we achieved record revenues and earnings, and have a strong backlog of 11,929 railcars as of December 31, 2007. In addition, construction has been completed on our new flexible railcar manufacturing plant at our Marmaduke, Arkansas complex, and we began producing railcars at that facility in the fourth quarter of 2007."

For the three months ended December 31, 2007, revenues were $161.9 million and the net earnings attributable to common shareholders increased 28.3% to $7.9 million or $0.37 per diluted share. In comparison, for the three months ended December 31, 2006, the Company had revenues of $165.3 million and net earnings attributable to common shareholders of $6.1 million or $0.29 per diluted share. During the three months ended December 31, 2007, the Company shipped 1,590 railcars compared to 1,687 railcars in the same period of 2006.

Revenues and railcar shipments decreased in the fourth quarter of 2007 compared to the same period in 2006 primarily due to a reduction of hopper railcar shipments, reflecting less demand and increased competition for some of our hopper railcar products. The revenue decline on hopper railcars was partially offset by an increase in tank railcar shipments, which was due to increased tank railcar capacity.

EBITDA was $16.9 million in the fourth quarter of 2007, a 37.0% increase compared to EBITDA of $12.3 million in the fourth quarter of 2006. The increases in EBITDA and net earnings attributable to common shareholders resulted primarily from an increase in gross profit driven by railcar mix, including significantly more tank railcars, and improved manufacturing efficiencies. A reconciliation of the Company's quarterly and year to date 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, 2007, revenues were $698.1 million and the net earnings attributable to common shareholders increased 7.6% to $37.3 million or $1.74 per diluted share. In comparison, for the year ended December 31, 2006, the Company had revenues of $646.1 million and net earnings attributable to common shareholders of $34.6 million or $1.67 per diluted share, including a pre-tax benefit of $14.3 million related to insurance recoveries. The $14.3 million included $9.9 million of business interruption insurance compensation for lost profits while the tank railcar facility was shutdown due to the damage from a tornado, and a $4.3 million gain, which was related to the involuntary conversion of assets that were destroyed by the tornado. The gain on the involuntary conversion of assets resulted in a $0.13 per diluted share increase to 2006 diluted earnings per share. During the year ended December 31, 2007, we shipped 7,055 railcars compared to 6,947 railcars in the same period of 2006.

Revenues and railcar shipments increased in the year ended December 31, 2007 compared to the same period in 2006, primarily due to an increase in tank railcar shipments, resulting from increased tank railcar capacity in 2007 and the recovery from the tornado related shutdown in 2006. This was partially offset by a reduction of hopper railcar shipments, driven by less demand and increased competition for some of our hopper railcar products.

EBITDA was $76.7 million in the year ended December 31, 2007, a 15% increase compared to EBITDA of $66.5 million in the year ended December 31, 2006, which included the effect of our insurance recoveries of $14.3 million. The increases in EBITDA and net earnings attributable to common shareholders in 2007 resulted primarily from increased revenue as described above. In addition, as mentioned above, we experienced improved manufacturing efficiencies at our manufacturing facilities.

ARI will host a webcast and conference call on Thursday, February 21, 2008 at 10:00 am (Eastern Time) to discuss the Company's fourth quarter and full year 2007 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, dial 866-831-6267 and use participant code 62300059. 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 manufacturer of covered hopper and tank railcars. ARI also repairs and refurbishes railcars, provides fleet management services and designs and manufactures certain railcar and industrial components used in the production of its railcars, as well as railcars and non-railcar industrial products produced by others. 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" as defined under the Private Securities Litigation Reform Act of 1995. 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 estimated future production rates, estimated future manufacturing capacity and statements regarding 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. Estimated backlog reflects the total sales attributable to the backlog reported at the end of the particular period as if such backlog were converted to actual sales. Estimated backlog does not reflect potential price increases or decreases under our customer contracts that provide for pricing adjustments based on changes in the cost of certain raw materials and railcar components or the possibility that contracts may be canceled or railcar delivery dates delayed, and does not reflect the effects of any cancellation or delay of railcar orders, or potential price decreases due to market-related pricing provisions in certain of our customer contracts, any of which may occur. Other potential risks and uncertainties include, among other things: the cyclical nature of the railcar manufacturing business; our reliance upon a small number of customers that represent a large percentage of our revenues; adverse economic and market conditions; 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; ARI's ability to maintain relationships with its suppliers of railcar components and raw materials; the risk of damage to our primary railcar manufacturing facilities or equipment; the variable purchase patterns of our customers and the timing of completion, delivery and acceptance of customer orders; the risks associated with our completion of capital expenditure projects; our ability to manage overhead and production slow downs; risks associated with potential acquisitions or joint ventures; our dependence on key personnel; the risk of lack of acceptance of our new railcar offerings by our customers; 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.

CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)

                                                       As of
                                             December 31, December 31,
                                             -------------------------
                                                 2007         2006
----------------------------------------------------------------------
Assets
Current assets:
  Cash and cash equivalents                     $303,882     $ 40,922
  Accounts receivable, net                        33,523       34,868
  Accounts receivable, due from affiliates        17,175        9,632
  Inventories, net                                93,475      103,510
  Prepaid expenses                                 5,015        5,853
  Deferred tax assets                              1,610        2,089
                                             -------------------------
     Total current assets                        454,680      196,874

Property, plant and equipment, net               175,166      130,293
Deferred debt issuance costs                       3,977          235
Goodwill                                           7,169        7,169
Other assets                                          37           37
Investment in joint venture                       13,355        4,318
                                             -------------------------
     Total assets                               $654,384     $338,926
                                             =========================

Liabilities and Stockholders' Equity
Current liabilities:
  Current portion of long-term debt             $      8     $     88
  Accounts payable                                47,903       54,962
  Accounts payable, due to affiliates              2,867        1,689
  Accrued expenses and taxes                       5,729        3,099
  Accrued compensation                            10,379       10,282
  Accrued interest expense                         6,907           32
  Accrued dividends                                  639          636
                                             -------------------------
     Total current liabilities                    74,432       70,788

Long-term debt, net of current portion                 -            8
Senior unsecured notes                           275,000            -
Deferred tax liability                             5,690        7,042
Pension and post-retirement liabilities            6,572       10,859
Other liabilities                                  1,702           49
                                             -------------------------
     Total liabilities                           363,396       88,746

Commitments and contingencies                          -            -

Stockholders' equity:
Common stock, $.01 par value, 50,000,000
 shares authorized, 21,302,296 and
 21,207,773 shares issued and outstanding at
 December 31, 2007 and December 31, 2006,
 respectively                                        213          212
Additional paid-in capital                       239,621      235,768
Retained earnings                                 51,314       16,649
Accumulated other comprehensive loss                (160)      (2,449)
                                             -------------------------
     Total stockholders' equity                  290,988      250,180
                                             -------------------------
     Total liabilities and stockholders'
      equity                                    $654,384     $338,926
                                             =========================
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts, unaudited)

                                            For the Three Months Ended
                                            December 31,  December 31,
                                            --------------------------
                                                2007          2006
                                            --------------------------
Revenues:
Manufacturing operations (including
 revenues from affiliates of $46,606 and
 $25,623 for the three months ended
 December 31, 2007 and 2006, respectively)     $ 149,907    $ 154,128

Railcar services (including revenues from
 affiliates of $3,347 and $3,830 for the
 three months ended December 31, 2007 and
 2006, respectively)                              11,989       11,191
                                            --------------------------
Total revenues                                   161,896      165,319

Cost of goods sold:
Manufacturing operations                        (132,634)    (139,661)
Railcar services                                  (9,842)      (8,940)
                                            --------------------------
Total cost of goods sold                        (142,476)    (148,601)
    Gross profit                                  19,420       16,718

Selling, administrative and other
 (including costs related to affiliates of
 $152 and $508 for the three months ended
 December 31, 2007 and 2006, respectively)        (6,495)      (6,669)
                                            --------------------------
    Earnings from operations                      12,925       10,049

Interest income                                    3,783          355
Interest expense                                  (4,192)        (136)
Earnings (loss) from joint venture                   150         (793)
                                            --------------------------
    Earnings before income tax expense            12,666        9,475
Income tax expense                                (4,801)      (3,347)
                                            --------------------------
  Net earnings available to common
   shareholders                                $   7,865    $   6,128
                                            ==========================

Net earnings per common share - basic          $    0.37    $    0.29
Net earnings per common share - diluted        $    0.37    $    0.29
Weighted average common shares outstanding
 - basic                                          21,302       21,208
Weighted average common shares outstanding
 - diluted                                        21,302       21,304
                                            --------------------------

Dividends declared per common share            $    0.03    $    0.03
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)

                                                For the Years Ended
                                             December 31, December 31,
                                             -------------------------
                                                 2007         2006
                                             -------------------------
Revenues:
Manufacturing operations (including revenues
 from affiliates of $140,164 and $50,003 for
 the years ended December 31, 2007 and 2006,
 respectively)                                 $ 648,124    $ 597,913

Railcar services (including revenues from
 affiliates of $15,969 and $18,923 for the
 years ended December 31, 2007 and 2006,
 respectively)                                    50,003       48,139
                                             -------------------------
Total revenues                                   698,127      646,052

Cost of goods sold:
Manufacturing operations                        (568,023)    (537,344)
Railcar services                                 (41,040)     (38,020)
                                             -------------------------
Total cost of goods sold                        (609,063)    (575,364)
    Gross profit                                  89,064       70,688

Income related to insurance recoveries, net            -        9,946
Gain on asset conversion, net                          -        4,323
Selling, administrative and other (including
 costs related to affiliates of $606 and
 $2,035 for the years ended December 31,
 2007 and 2006, respectively)                    (27,379)     (28,399)
                                             -------------------------
    Earnings from operations                      61,685       56,558

Interest income                                   13,829        1,504
Interest expense (including interest expense
 to affiliates of $0 and $98 for the years
 ended December 31, 2007 and 2006                (17,027)      (1,372)
Earnings (loss) from joint venture                   881         (734)
                                             -------------------------
    Earnings before income tax expense            59,368       55,956
Income tax expense                               (22,104)     (20,752)
                                             -------------------------
  Net earnings                                 $  37,264    $  35,204
                                             =========================
  Less preferred dividends                             -         (568)
                                             -------------------------
  Earnings available to common shareholders    $  37,264    $  34,636

Net earnings per common share - basic          $    1.75    $    1.68
Net earnings per common share - diluted        $    1.74    $    1.67
Weighted average common shares outstanding -
 basic                                            21,274       20,667
Weighted average common shares outstanding -
 diluted                                          21,357       20,733
                                             -------------------------

Dividends declared per common share            $    0.12    $    0.12
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

                                                For the Years Ended
                                             December 31, December 31,
                                             -------------------------
                                                 2007         2006
                                             -------------------------
Operating activities:
  Net earnings                                  $ 37,264     $ 35,204
Adjustments to reconcile net earnings to net
 cash provided by (used in) operating
 activities:
   Depreciation                                   14,085       10,674
   Amortization of deferred costs                    680          127
   Loss on the write-off of property, plant
    and equipment                                    385        4,393
   Insurance compensation for assets and
    storm clean-up                                     -       (9,938)
   Long lived asset impairment charges                 -          400
   Write-off of deferred financing costs               -          566
   Stock based compensation                        1,927        8,116
   Excess tax benefits from stock option
    exercises                                       (241)           -
   Change in joint venture investment as a
    result of (loss) earnings                       (881)         734
   Provision for deferred income taxes              (370)        (154)
   Provision for losses on accounts
    receivable                                       196          383
   Changes in operating assets and
    liabilities:
     Accounts receivable, net                      1,148        3,020
     Accounts receivable, due from affiliate      (7,543)      (4,522)
     Inventories, net                             10,035      (11,672)
     Prepaid expenses                                838       (3,317)
     Accounts payable                             (7,059)        (831)
     Accounts payable, due to affiliate            1,178       (1,292)
     Accrued expenses and taxes                   10,195       (1,532)
     Other                                        (1,607)        (392)
                                             -------------------------
Net cash provided by (used in) operating
 activities                                       60,230       29,967

Investing activities:
   Purchases of property, plant and
    equipment                                    (59,367)     (44,916)
   Sale of property, plant and equipment             104            -
   Property insurance advance on Marmaduke
    tornado damage                                     -        9,938
   Repayment of note receivable from
    affiliate (Ohio Castings, LLC)                   329          494
   Investment in joint venture                    (8,500)           -
   Acquisitions                                        -      (17,220)
                                             -------------------------
Net cash used in investing activities            (67,434)     (51,704)

Financing activities:
   Proceeds from sale of common stock                  -      205,275
   Offering costs - initial public offering            -      (14,605)
   Preferred stock redemption                          -      (82,056)
   Preferred stock dividends                           -      (11,904)
   Common stock dividends                         (2,551)      (1,908)
   Decrease in amounts due to affiliate                -      (20,476)
   Majority shareholder capital contribution           -          275
   Proceeds from stock option exercises            1,985            -
   Excess tax benefits from stock option
    exercises                                        241            -
   Proceeds from issuance of senior
    unsecured notes, gross                       275,000            -
   Offering costs - senior unsecured notes        (4,314)           -
   Finance fees related to credit facility          (109)        (360)
   Repayment of debt                                 (88)     (40,274)
                                             -------------------------
Net cash provided by financing activities        270,164       33,967
                                             -------------------------
Increase (decrease) in cash and cash
 equivalents                                     262,960       12,230
Cash and cash equivalents at beginning of
 period                                           40,922       28,692
                                             -------------------------
Cash and cash equivalents at end of period      $303,882     $ 40,922
                                             =========================
RECONCILIATION OF NET EARNINGS TO EBITDA AND ADJUSTED EBITDA
(In thousands)

                                 Three months ended    Years Ended
                                 ------------------ ------------------
                                    December 31,       December 31,
                                 ------------------ ------------------
                                    2007     2006     2007      2006
--------------------------------------------------- ------------------


Net earnings                      $ 7,865  $ 6,128  $ 37,264  $35,204
Income tax expense                  4,801    3,347    22,104   20,752
Interest expense                    4,193      136    17,027    1,372
Interest income                    (3,783)    (355)  (13,829)  (1,504)
Depreciation                        3,819    3,073    14,085   10,674
                                 --------- -------- --------- --------
EBITDA                            $16,895  $12,329  $ 76,651  $66,498
                                 ========= ======== ========= ========
Stock based compensation expense      331    1,526     1,628    8,116
Stock appreciation rights
 compensation expense (gain)(1)      (396)       -       299        -
Gain on asset conversion, net           -        -         -   (4,323)
                                 --------- -------- --------- --------
Adjusted EBITDA                   $16,830  $13,855  $ 78,578  $70,291
                                 ========= ======== ========= ========

(1) SARs are cash settled at time of exercise

EBITDA represents net earnings before income tax expense, interest
 expense (income), net of depreciation of property, plant and
 equipment. We believe EBITDA is useful to investors in evaluating our
 operating performance compared to that of other companies in our
 industry. In addition, our management uses EBITDA to evaluate our
 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 our 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 elimination of stock based
 compensation expense related to a restricted stock grant, stock
 options and stock appreciation rights (SARs) along with a gain on
 asset conversion related to the involuntary replacement of assets
 damaged by the tornado in Marmaduke. 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 restricted stock and 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. In the
 three months ended December 31, 2007, our expenses were reduced by
 $0.4 million relating to this revaluation. In the year ended December
 31, 2007, we incurred a total of $0.3 million of expenses associated
 with our SARs. Management believes that eliminating the charges
 associated with our SARs allows us and our investors to understand
 better our operating results independent of changes in the price of
 our common stock. 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.

CONTACT: American Railcar Industries, Inc. William P. Benac or Michael Obertop, 636-940-6000

SOURCE: American Railcar Industries, Inc.