American Railcar Industries, Inc.
Nov 7, 2007

American Railcar Industries, Inc. Reports Third Quarter 2007 Results

ST. CHARLES, Mo., Nov 07, 2007 (BUSINESS WIRE) -- American Railcar Industries, Inc. ("ARI" or the "Company") (NASDAQ: ARII) today reported its third quarter 2007 financial results.

For the three months ended September 30, 2007, revenues were $139.9 million and the net earnings attributable to common shareholders were $5.0 million or $0.23 per diluted share. In comparison, for the three months ended September 30, 2006, the Company had revenues of $150.5 million and net earnings attributable to common shareholders of $11.0 million or $0.52 per diluted share, including a pre-tax benefit of $9.3 million related to insurance recoveries from the April 2006 tornado at the Company's tank railcar facility. The $9.3 million included $5.0 million of business interruption insurance compensation for lost profits while the tank railcar facility was shutdown due to the damage from the tornado, along with a $4.3 million gain, which was related to the involuntary conversion of assets that were destroyed by the tornado. During the three months ended September 30, 2007, the Company shipped 1,276 railcars compared to 1,546 railcars in the same period of 2006.

Revenues and railcar shipments decreased in the third 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 and the recovery from low 2006 shipments caused by the tank railcar facility being shutdown for repair of tornado damages.

EBITDA was $12.7 million in the third quarter of 2007 compared to EBITDA of $20.5 million in the third quarter of 2006, including the effect of insurance recoveries. The decrease in EBITDA was driven primarily by the decrease in revenues as described above.

For the nine months ended September 30, 2007, revenues were $536.2 million and the net earnings attributable to common shareholders were $29.4 million or $1.38 per diluted share. In comparison, for the nine months ended September 30, 2006, the Company had revenues of $480.7 million and net earnings attributable to common shareholders of $28.5 million or $1.39 per diluted share, including a pre-tax benefit of $14.3 million related to insurance recoveries. The $14.3 million included $10.0 million of business interruption insurance compensation for lost profits while the tank railcar facility was shutdown due to the damage from the tornado, along with a $4.3 million gain, which was related to the involuntary conversion of assets that were destroyed by the tornado. During the nine months ended September 30, 2007, we shipped 5,465 railcars compared to 5,260 railcars in the same period of 2006.

Revenues increased in the nine months ended September 30, 2007 compared to the same period in 2006, primarily due to an increase in tank railcar shipments, resulting from increased tank railcar plant 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 $59.8 million in the nine months ended September 30, 2007 compared to EBITDA of $54.2 million in the nine months ended September 30, 2006, including the effect of our insurances recoveries of $14.3 million in 2006. The increases in EBITDA and net earnings attributable to common shareholders in 2007 resulted primarily from increased revenue as described above. In addition, we experienced improved manufacturing efficiencies at our manufacturing facilities due to lean initiatives and other performance programs implemented at the plants. 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.

"We are pleased that our year-to-date earnings and gross profit are both ahead of the prior year, which reflects the strength of our tank railcar business. However, we have experienced less demand and increased competition for some of our hopper railcar products in the third quarter of 2007, resulting in lower earnings for the quarter when compared to the prior year. In addition, the third quarter of 2006 included insurance related gains," said James J. Unger, President and CEO of ARI. "Management is controlling costs at our hopper railcar facility during this time of lower production levels. We are pleased with the outstanding performance of our tank railcar plant, which partially offset the lower hopper railcar deliveries for the quarter. Our backlog remains at a high level, totaling 13,384 railcars at September 30, 2007 and our tank railcar lines are fully booked through 2008 and for most of 2009. We have hopper railcar orders through 2008 but not at capacity levels. We are pursuing a number of inquiries to fill our available capacity for hopper railcars."

ARI will host a webcast and conference call on Thursday, November 8, 2007 at 10:00 am (Eastern Time) to discuss the Company's third quarter 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 1-866-825-3354 and use participant code 24075118. 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 variable pricing 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; adverse economic and market conditions; fluctuating costs of raw materials, including steel and railcar components, and delays in the delivery of such raw materials and components; ARI's ability to maintain relationships with its suppliers of railcar components and raw materials; ARI's ability to complete construction of its new flexible railcar plant in Marmaduke on a timely basis and within budget; fluctuations in the supply of components and raw materials ARI uses in railcar manufacturing; the highly competitive nature of the railcar manufacturing industry; the risk of further damage to our primary railcar manufacturing facilities or equipment; our reliance upon a small number of customers that represent a large percentage of our revenues; the variable purchase patterns of our customers and the timing of completion, delivery and acceptance of customer orders; our dependence on key personnel; the risks of labor shortage in light of our recent growth; 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.

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts, unaudited)

                                           September 30, December 31,
                                           ---------------------------
                                               2007          2006
----------------------------------------------------------------------
Assets
Current assets:
   Cash and cash equivalents               $    297,609  $     40,922
   Accounts receivable, net                      34,529        34,868
   Accounts receivable, due from
    affiliates                                   13,553         9,632
   Inventories, net                             101,135       103,510
   Prepaid expenses                               3,929         5,853
   Deferred tax assets                            1,867         2,089
                                           ---------------------------
      Total current assets                      452,622       196,874

Property, plant and equipment, net              156,364       130,293
Deferred debt issuance costs                      4,125           235
Goodwill                                          7,169         7,169
Other assets                                         37            37
Investment in joint venture                      13,713         4,318
                                           ---------------------------
      Total assets                         $    634,030  $    338,926
                                           ===========================

Liabilities and Stockholders' Equity
Current liabilities:
   Current portion of long-term debt       $         31  $         88
   Accounts payable                              40,546        54,962
   Accounts payable, due to affiliates            2,694         1,689
   Accrued expenses and taxes                     6,056         3,099
   Accrued compensation                           9,549        10,282
   Accrued interest expense                       1,750            32
   Accrued dividends                                639           636
                                           ---------------------------
      Total current liabilities                  61,265        70,788

Long-term debt, net of current portion                -             8
Senior unsecured notes                          275,000             -
Deferred tax liability                            3,859         7,042
Pension and post-retirement liabilities          10,186        10,859
Other liabilities                                 2,390            49
                                           ---------------------------
      Total liabilities                         352,700        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 June 30, 2007 and December 31, 2006,
 respectively                                       213           212
Additional paid-in capital                      239,288       235,768
Retained earnings                                44,088        16,649
Accumulated other comprehensive loss             (2,259)       (2,449)
                                           ---------------------------
      Total stockholders' equity                281,330       250,180
                                           ---------------------------
      Total liabilities and stockholders'
       equity                              $    634,030  $    338,926
                                           ===========================

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts, unaudited)

                                           For the Three Months Ended
                                           September 30, September 30,
                                           ---------------------------
                                               2007          2006
                                           ---------------------------
Revenues:
Manufacturing operations (including
 revenues from affiliates of $47,634 and
 $4,172 for the three months ended
 September 30, 2007 and 2006,
 respectively)                             $    127,376  $    138,479

Railcar services (including revenues from
 affiliates of $4,289 and $4,580 for the
 three months ended September 30, 2007 and
 2006, respectively)                             12,515        11,975
                                           ---------------------------
Total revenues                                  139,891       150,454

Cost of goods sold:
Manufacturing operations                       (113,251)     (125,809)

Railcar services                                (10,668)       (8,920)
                                           ---------------------------
Total cost of goods sold                       (123,919)     (134,729)
      Gross profit                               15,972        15,725

Income related to insurance recoveries,
 net                                                  -         4,963
Gain on asset conversion, net                         -         4,323
Selling, administrative and other
 (including costs related to affiliates of
 $151 and $508 for the three months ended
 September 30, 2007 and 2006,
 respectively)                                   (6,835)       (7,008)
                                           ---------------------------
      Earnings from operations                    9,137        18,003

Interest income                                   3,986           234
Interest expense                                 (5,517)         (103)
Earnings (loss) from joint venture                  115          (278)
                                           ---------------------------
      Earnings before income tax expense          7,721        17,856
Income tax expense                               (2,861)       (6,862)
                                           ---------------------------
   Net earnings available to common
    shareholders                           $      4,860  $     10,994
                                           ===========================

Net earnings per common share - basic      $       0.23  $       0.52
Net earnings per common share - diluted    $       0.23  $       0.52
Weighted average common shares outstanding
 - basic                                         21,302        21,208
Weighted average common shares outstanding
 - diluted                                       21,392        21,261
                                           ---------------------------

Dividends declared per common share        $       0.03  $       0.03


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts, unaudited)

                                            For the Nine Months Ended
                                           September 30, September 30,
                                           ---------------------------
                                               2007          2006
                                           ---------------------------
Revenues:
Manufacturing operations (including
 revenues from affiliates of $93,558 and
 $24,380 for the nine months ended
 September 30, 2007 and 2006,
 respectively)                             $    498,217  $    443,785

Railcar services (including revenues from
 affiliates of $12,622 and $15,093 for the
 nine months ended September 30, 2007 and
 2006, respectively)                             38,014        36,948
                                           ---------------------------
Total revenues                                  536,231       480,733

Cost of goods sold:
Manufacturing operations                       (435,389)     (397,683)

Railcar services                                (31,198)      (29,080)
                                           ---------------------------
Total cost of goods sold                       (466,587)     (426,763)
      Gross profit                               69,644        53,970

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
 $454 and $1,526 for the nine months ended
 September 30, 2007 and 2006,
 respectively)                                  (20,884)      (21,730)
                                           ---------------------------
      Earnings from operations                   48,760        46,509

Interest income                                  10,046         1,149
Interest expense (including interest
 expense to affiliates of $0 and $98 for
 the nine months ended September 30, 2007
 and 2006                                       (12,835)       (1,236)
Earnings from joint venture                         731            59
                                           ---------------------------
      Earnings before income tax expense         46,702        46,481
Income tax expense                              (17,303)      (17,405)
                                           ---------------------------
   Net earnings                            $     29,399  $     29,076
                                           ===========================
   Less preferred dividends                           -          (568)
                                           ---------------------------
   Earnings available to common
    shareholders                           $     29,399  $     28,508

Net earnings per common share - basic      $       1.38  $       1.39
Net earnings per common share - diluted    $       1.38  $       1.39
Weighted average common shares outstanding
 - basic                                         21,265        20,484
Weighted average common shares outstanding
 - diluted                                       21,368        20,544
                                           ---------------------------

Dividends declared per common share        $       0.09  $       0.09

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

                                            For the Nine Months Ended
                                           September 30, September 30,
                                           ---------------------------
                                               2007          2006
                                           ---------------------------
Operating activities:
   Net earnings                            $     29,399  $     29,076
Adjustments to reconcile net earnings to
 net cash provided by (used in) operating
 activities:
   Depreciation                                  10,266         7,602
   Amortization of deferred costs                   482            87
   Loss on the write-off of property,
    plant and equipment                               -         4,304
   Long lived asset impairment charges                -           401
   Loss on disposal of property, plant and
    equipment                                       233             -
   Write-off of deferred financing costs              -           566
   Stock based compensation                       1,992         6,590
   Excess tax benefits from stock option
    exercises                                      (241)            -
   Change in joint venture investment as a
    result of earnings                             (731)          (59)
   Provision (benefit) for deferred income
    taxes                                          (737)          807
   Provision for losses on accounts
    receivable                                       84           295
   Changes in operating assets and
    liabilities:
      Accounts receivable, net                      255        (9,497)
      Accounts receivable, due from
       affiliate                                 (3,921)        2,739
      Insurance claim receivable                      -        (5,936)
      Inventories                                 2,375       (20,554)
      Prepaid expenses                            1,924        (1,626)
      Accounts payable                          (14,416)       (9,538)
      Accounts payable, due to affiliate          1,005        (2,074)
      Accrued expenses and taxes                  4,344        (9,591)
      Other                                      (1,331)         (479)
                                           ---------------------------
Net cash provided by (used in) operating
 activities                                      30,982        (6,887)

Investing activities:
   Purchases of property, plant and
    equipment                                   (36,495)      (38,695)
   Property insurance advance on Marmaduke
    tornado damage                                    -        10,000
   Repayment of note receivable from
    affiliate (Ohio Castings Company, LLC)          165           494
   Investment in joint venture                   (8,840)            -
   Acquisitions                                       -       (17,220)
                                           ---------------------------
Net cash used in investing activities           (45,170)      (45,421)

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                        (1,912)       (1,273)
   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          (60)         (265)
   Repayment of debt                                (65)      (40,253)
                                           ---------------------------
Net cash provided by financing activities       270,875        34,718
                                           ---------------------------
Increase (decrease) in cash and cash
 equivalents                                    256,687       (17,590)
Cash and cash equivalents at beginning of
 period                                          40,922        28,692
                                           ---------------------------
Cash and cash equivalents at end of period $    297,609  $     11,102
                                           ===========================

RECONCILIATION OF NET EARNINGS TO EBITDA AND ADJUSTED EBITDA
(In thousands)

                               Three months ended   Nine months ended
                               ------------------- -------------------
                                  September 30,       September 30,
                               ------------------- -------------------
                                 2007      2006      2007      2006
-------------------------------------------------- -------------------


Net earnings                   $  4,860  $ 10,994  $ 29,399  $ 29,076
Income tax expense                2,861     6,862    17,303    17,405
Interest expense                  5,517       103    12,835     1,236
Interest income                  (3,986)     (234)  (10,046)   (1,149)
Depreciation                      3,457     2,745    10,266     7,602
                               --------- --------- --------- ---------
EBITDA                         $ 12,709  $ 20,470  $ 59,757  $ 54,170
                               ========= ========= ========= =========
Stock based compensation
 expense                            679     1,526     1,992     6,590
Gain on asset conversion, net         -    (4,323)        -    (4,323)
                               --------- --------- --------- ---------
Adjusted EBITDA                $ 13,388  $ 17,673  $ 61,749  $ 56,437
                               ========= ========= ========= =========

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 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 compared to that of other companies in our industry. In addition, these charges are excluded from our calculation of EBITDA under our unsecured senior notes. Management also uses Adjusted EBITDA in evaluating our operating performance. 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. William P. Benac or Michael Obertop 636-940-6000 www.americanrailcar.com