American Railcar Industries Posts Results

American Railcar Industries, Inc. has reported its first quarter 2009 financial results.

"Despite the impact of a weak economy on the freight railcar market, we shipped 1,491 railcars in the first quarter of 2009. Our current level of operations resulted in EBITDA of $14.1 million and net earnings of $2.7 million in the first quarter of 2009," said James Cowan, President and CEO of ARI. "In addition to a solid manufacturing performance, our railcar services segment remained strong with $12.3 million of revenue for the first quarter of 2009. We are pleased with first quarter results, but the impact on railcar demand from the weak economy will require a slowing of new railcar shipments. We will continue to evaluate production levels at all locations and seek to align the workforce with industry demand. Our balance sheet continues to be a source of strength with $261.1 million in cash and $31.6 million in short-term investments."

In a release on May 6, the company noted that the three months ended March 31, revenues were $156.9 million and net earnings were $2.7 million or $0.13 per diluted share. In comparison, for the three months ended March 31, 2008, revenues were $184.0 million and net earnings were $10.1 million or $0.48 per diluted share. Net interest expense increased $0.9 million, after-tax, or $0.04 per diluted share, primarily due to lower interest income, other income decreased $2.0 million, after-tax, or $0.09 per diluted share, primarily as a result of gains in 2008 on derivatives and income from joint ventures decreased $0.7 million, after-tax, or $0.03 per diluted share primarily due to costs of preparing our new axle joint venture for operations.

Revenues were lower in the first quarter of 2009 when 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 three months ended March 31, the Company shipped 1,491 railcars compared to 1,902 railcars in the same period of 2008.

EBITDA was $14.1 million in the first quarter of 2009 compared to EBITDA of $23.6 million in the first quarter of 2008. The decrease in EBITDA resulted primarily from decreased volume, as discussed above, a decrease in gross profit margin and a decrease in other income. The Company's gross profit margin decline is primarily attributable to lower shipments and market conditions that resulted in competitive pricing. To control costs, workforce levels have been reduced. Other income decreased to a loss in the first quarter of 2009. Other income in the first quarter of 2008 included income related to total return swaps, which were settled in the third quarter of 2008. 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.

Our backlog was reduced to 2,752 railcars as of March 31. This reduction resulted primarily from weak demand for railcars, driven primarily by a weak economy and a difficult credit environment. The Company has been and will continue to competitively quote railcar orders including coal railcars for which the Company has two prototypes that were placed in service.

American Railcar Industries is a 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.

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