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Press release from GlobeNewswire (a Nasdaq OMX company)

American Railcar Industries, Inc. Reports Shipments of 2,200 Railcars for the First Quarter of 2012 and Record Earnings From Operations

Wednesday, April 25, 2012

American Railcar Industries, Inc. Reports Shipments of 2,200 Railcars for the First Quarter of 2012 and Record Earnings From Operations14:56 EDT Wednesday, April 25, 2012First Quarter 2012 HighlightsRailcar shipments of 2,200 railcars Revenues totaled $181.6 million Record adjusted EBITDA of $30.3 million Net earnings per share of $0.56Backlog remains strong at 6,190 railcars ST. CHARLES, Mo., April 25, 2012 (GLOBE NEWSWIRE) -- American Railcar Industries, Inc. (ARI or the Company) (Nasdaq:ARII) today reported its first quarter 2012 financial results. "We are pleased with our record earnings from operations," said James Cowan, President and CEO of ARI. "The market for tank and hopper railcars remains very strong and during the quarter we received orders for 1,860 railcars and subsequent to quarter end over 2,300 additional railcars were ordered."First Quarter Summary Total revenues were $181.6 million for the first quarter of 2012 compared to $84.8 million for the first quarter of 2011. Revenues increased primarily due to the increase in railcar shipments and improved pricing. Net earnings were $12.0 million, or $0.56 per share, for the first quarter of 2012 compared to a net loss of ($5.3) million, or ($0.25) per share, for the same period in 2011. The Company's net earnings increased due to strong shipments, improved pricing and operating efficiencies as a result of higher production volumes. EBITDA, adjusted to exclude stock based compensation (Adjusted EBITDA), was $30.3 million for the first quarter of 2012 compared to $3.7 million for the comparable quarter of 2011. The increase resulted primarily from increases in revenues and earnings from operations. In addition, the Company recorded earnings from joint ventures of $0.4 million for the first quarter of 2012 as a result of an increase in demand for castings and axles produced by the Company's joint ventures, compared to a loss of ($2.2) million for the comparable quarter of 2011. A reconciliation of the Company's net earnings (loss) to EBITDA and Adjusted EBITDA (both non-GAAP financial measures) is set forth in the supplemental disclosure attached to this press release. ARI's backlog as of March 31, 2012 was approximately 6,190 railcars, including approximately 2,020 railcars for lease. ARI had approximately 6,530 railcars in its backlog as of December 31, 2011, including approximately 2,200 railcars for lease. In April, the Company received orders for over 2,300 additional railcars. ARI will host a webcast and conference call on Thursday, April 26, 2012 at 10:00 am (Eastern Time) to discuss the Company's first quarter 2012 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 877-745-9389. Participants are asked to log-on 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 ARI ARI is a leading North American designer and manufacturer of hopper and tank railcars. ARI leases railcars manufactured by the Company to certain markets. In addition, ARI 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 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 customer demand for the Company's products, the Company's strategic objectives and long-term strategies, potential improvements in ARI's business and the overall railcar industry, the potential for increased order activity, improved pricing, anticipated future production rates, the Company's joint ventures, the Company's backlog 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 the Company's forward-looking statements. Other potential risks and uncertainties include, among other things: the impact of the recent economic downturn, adverse market conditions and restricted credit markets, and the impact of the continuation of these conditions; ARI's reliance upon a small number of customers that represent a large percentage of revenues and backlog; the health of and prospects for the overall railcar industry; prospects in light of the cyclical nature of the railcar manufacturing business and the current economic environment; anticipated trends relating to shipments, leasing, railcar services, revenues, financial condition or results of operations; the Company's ability to manage overhead and variations in production rates; 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 that ARI uses in railcar manufacturing; anticipated production schedules for products and the anticipated financing needs, construction and production schedules of ARI's joint ventures; the risks associated with potential joint ventures, potential acquisitions or new business endeavors; the implementation, integration with other systems or ongoing management of the Company's new enterprise resource planning system; the international economic and political risks related to ARI's joint ventures' current and potential international operations; the risk of the lack of acceptance of new railcar offerings by ARI's customers and the risk of initial production costs for the Company's new railcar offerings being significantly higher than expected; the sufficiency of the Company's liquidity and capital resources; the conversion of ARI's railcar backlog into revenues; compliance with covenants contained in the Company's unsecured senior notes; the impact and anticipated benefits of any acquisitions ARI may complete; the impact and costs and expenses of any litigation ARI may be subject to now or in the future; the ongoing benefits and risks related to the Company's relationship with Mr. Carl Icahn (the chairman of the Company's board of directors and, through his holdings of Icahn Enterprises L.P., the Company's principal beneficial stockholder) and certain of his affiliates; and the additional risk factors described in ARI's filings with the Securities and Exchange Commission. The Company expressly disclaims 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.AMERICAN RAILCAR INDUSTRIES, INC. AND SUBSIDIARIES  CONDENSED CONSOLIDATED BALANCE SHEETS      (In thousands, except share and per share amounts)As of  March 31,December 31,  20122011   (unaudited)  Assets     Current assets:      Cash and cash equivalents  $ 272,887  $ 307,172  Accounts receivable, net  44,834  33,626  Accounts receivable, due from related parties  4,460  6,106  Income taxes receivable  4,074  4,074  Inventories, net  104,997  95,827  Deferred tax assets  2,110  3,203  Prepaid expenses and other current assets  5,173  4,539 Total current assets  438,535  454,547       Property, plant and equipment, net  230,406  194,242 Deferred debt issuance costs  1,181  1,335 Interest receivable, due from related parties  297  292 Goodwill  7,169  7,169 Investments in and loans to joint ventures  46,097  45,122 Other assets  1,238  1,063 Total assets  $ 724,923  $ 703,770      Liabilities and Stockholders' Equity     Current liabilities:      Accounts payable  $ 66,892  $ 62,318  Accounts payable, due to related parties  471  800  Accrued expenses and taxes  9,119  5,879  Accrued compensation  15,382  14,446  Accrued interest expense  1,719  6,875 Total current liabilities  93,583  90,318       Senior unsecured notes  275,000  275,000 Deferred tax liability  21,537  14,923 Pension and post-retirement liabilities  8,945  9,280 Other liabilities  3,532  4,080 Total liabilities  402,597  393,601       Commitments and contingencies           Stockholders' equity:     Common stock, $0.01 par value, 50,000,000 shares authorized, 21,352,297 shares issued and outstanding as of both March 31, 2012 and December 31, 2011  213  213 Additional paid-in capital  239,609  239,609 Retained earnings  83,549  71,545 Accumulated other comprehensive loss  (1,045)  (1,198) Total stockholders' equity  322,326  310,169 Total liabilities and stockholders' equity  $ 724,923  $ 703,770      AMERICAN RAILCAR INDUSTRIES, INC. AND SUBSIDIARIES  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS   (In thousands, except per share amounts, unaudited)      For the Three Months Ended  March 31,  20122011     Revenues:     Manufacturing (including revenues from affiliates of $0 and $1,221 for the three months ended March 31, 2012 and 2011, respectively)  $ 164,313  $ 68,502 Railcar leasing  1,380  194 Railcar services (including revenues from affiliates of $5,171 and $5,537 for the three months ended March 31, 2012 and 2011, respectively)  15,906  16,147  Total revenues  181,599  84,843       Cost of revenues:     Manufacturing   (137,561)  (66,474) Railcar leasing  (741)  (107) Railcar services  (12,928)  (13,318)  Total cost of revenues  (151,230)  (79,899)  Gross profit  30,369  4,944       Selling, general and administrative (including costs to a related party of $145 for both the three months ended March 31, 2012 and 2011)  (6,564)  (6,882)  Earnings (loss) from operations  23,805  (1,938)       Interest income (including income from related parties of $745 and $679 for the three months ended March 31, 2012 and 2011, respectively)  778  916 Interest expense  (5,126)  (5,335) Other income (including income from a related party of $3 and $4 for the three months ended March 31, 2012 and 2011, respectively)  3  4 Earnings (loss) from joint ventures  414  (2,242)  Earnings (loss) before income taxes  19,874  (8,595) Income tax (expense) benefit  (7,870)  3,266 Net earnings (loss)  $ 12,004  $ (5,329)       Net earnings (loss) per common share - basic and diluted  $ 0.56  $ (0.25) Weighted average common shares outstanding - basic and diluted  21,352  21,349        AMERICAN RAILCAR INDUSTRIES, INC. AND SUBSIDIARIES      CONDENSED SEGMENT DATA         (In thousands, unaudited)          Revenues  For the Three Months Ended March 31, 2012External Intersegment TotalEarnings (Loss) from Operations  Manufacturing   $ 164,313  $ 47,549  $ 211,862  $ 34,076 Railcar Leasing  1,380  --   1,380  602 Railcar Services  15,906  29  15,935  2,336 Corporate  --   --   --   (4,286) Eliminations  --   (47,578)  (47,578)  (8,923) Total Consolidated  $ 181,599  $ --   $ 181,599  $ 23,805            Revenues  For the Three Months Ended March 31, 2011External Intersegment TotalEarnings (Loss) from Operations  Manufacturing   $ 68,502  $ 223  $ 68,725  $ 716 Railcar Leasing  194  --   194  57 Railcar Services  16,147  119  16,266  2,349 Corporate  --   --   --   (4,987) Eliminations  --   (342)  (342)  (73) Total Consolidated  $ 84,843  $ --   $ 84,843  $ (1,938)  AMERICAN RAILCAR INDUSTRIES, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands, unaudited)  For the Three Months Ended  March 31,   20122011     Operating activities:   Net earnings (loss)  $ 12,004  $ (5,329) Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities:     Depreciation  5,402  5,766 Amortization of deferred costs  175  175 (Gain) loss on disposal of property, plant and equipment  (34)  63 Stock-based compensation  696  2,148 Change in interest receivable, due from related parties  --  (41) (Earnings) loss from joint ventures  (414)  2,242 Provision (benefit) for deferred income taxes  7,705  (3,224) Adjustment to provision for losses on accounts receivable  (17)  (46) Changes in operating assets and liabilities: Accounts receivable, net  (11,184)  1,455 Accounts receivable, due from related parties  1,651  2,446 Income taxes receivable  --  133 Inventories, net  (9,153)  (9,014) Prepaid expenses and other current assets  (633)  (1,095) Accounts payable  4,571  3,221 Accounts payable, due to related parties  (329)  609 Accrued expenses and taxes  (2,225)  (2,877) Other  (566)  (559) Net cash provided by (used in) operating activities  7,649  (3,927) Investing activities:   Purchases of property, plant and equipment  (1,337)  (729) Capital expenditures - leased railcars  (40,072)  -- Proceeds from the sale of property, plant and equipment  38  -- Investments in and loans to joint ventures  (583)  (639) Net cash used in investing activities  (41,954)  (1,368) Financing activities:   Proceeds from stock option exercises  --  756 Net cash provided by financing activities  --  756 Effect of exchange rate changes on cash and cash equivalents  20  6 Decrease in cash and cash equivalents  (34,285)  (4,533) Cash and cash equivalents at beginning of period  307,172  318,758 Cash and cash equivalents at end of period  $ 272,887  $ 314,225AMERICAN RAILCAR INDUSTRIES, INC. AND SUBSIDIARIES    RECONCILIATION OF NET EARNINGS (LOSS) TO EBITDA AND ADJUSTED EBITDA (In thousands, unaudited)      For the Three Months Ended   March 31,  20122011             Net earnings (loss)  $ 12,004  $ (5,329) Income tax expense (benefit)  7,870  (3,266) Interest expense  5,126  5,335 Interest income  (778)  (916) Depreciation  5,402  5,766 EBITDA   $ 29,624  $ 1,590 Expense related to stock appreciation rights compensation 1  696  2,148 Adjusted EBITDA  $ 30,320  $ 3,738      1 SARs are cash settled at time of exercise     EBITDA represents net earnings (loss) before income tax expense (benefit), interest expense (income) and 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 provided by (used in) operating activities or other statements of operations or statements of cash flow data prepared in accordance with U.S. GAAP. The calculation of EBITDA is not necessarily comparable to that of other similarly titled measures reported by other companies. Adjusted EBITDA represents EBITDA before stock based compensation related to stock appreciation rights (SARs). Management believes that Adjusted EBITDA is useful to investors in evaluating the Company's operating performance, and therefore uses Adjusted EBITDA for that purpose. The Company's SARs, which settle in cash, are revalued each period based primarily upon changes in ARI's stock price. Management believes that eliminating the expense (income) associated with stock-based compensation allows management and ARI's investors to understand better the operating results independent of financial changes caused by the fluctuating price and value of the Company's common stock.  Adjusted EBITDA is not a financial measure presented in accordance with U.S. GAAP. Accordingly, when analyzing operating performance, investors should not consider Adjusted EBITDA in isolation or as a substitute for net earnings (loss), cash flows provided by (used in) operating activities or other statements of operations or statements of cash flow data prepared in accordance with U.S. GAAP. The Company's calculation of Adjusted EBITDA is not necessarily comparable to that of other similarly titled measures reported by other companies.CONTACT: Dale C. Davies Michael Obertop 636.940.6000