ARII American Railcar Industries, Inc. (delisted)

American Railcar Industries, Inc. (�ARI� or the �Company�) (NASDAQ: ARII) today reported its third quarter financial results. �We increased railcar shipments in the third quarter of 2008 reaching our second highest shipment level in our Company�s history. This was driven by increased tank and hopper railcar production compared with the second quarter of 2008. We have also increased railcar shipments on a year to date basis in 2008 compared to 2007. We continue to experience strong operational performance at most of our locations as a result of labor efficiencies and controlled overhead spending,� said James J. Unger, President and CEO of ARI.��Offsetting the strong railcar shipments and efficiencies were decreased selling prices in 2008 compared to 2007 for many of our hopper railcars due to market conditions.� For the three months ended September 30, 2008, revenues were $217.2 million and net earnings available to common shareholders were $7.4 million or $0.35 per diluted share. In comparison, for the three months ended September 30, 2007, the Company had revenues of $139.9 million and net earnings available to common shareholders of $4.9 million or $0.23 per diluted share. Earnings for the third quarter of 2008 included other income of $1.1 million, after-tax, or $0.05 per diluted share, which represents realized gains on sales of a portion of the Company�s investment in common stock of The Greenbrier Companies, Inc. (NYSE: GBX), offset by increased net interest expense of $1.1 million, after-tax, in 2008 compared to 2007. Revenues increased in the third quarter of 2008 compared to the same period in 2007, primarily due to the increase in the number of railcars sold and higher tank railcar selling prices, primarily as a result of the recovery of increased steel costs, partially offset by competitive pricing for hopper railcars. During the three months ended September 30, 2008, the Company shipped 2,116 railcars compared to 1,276 railcars in the same period of 2007. EBITDA was $20.3 million in the third quarter of 2008, a 60% increase compared to EBITDA of $12.7 million in the third quarter of 2007. The increases in EBITDA and net earnings available to common shareholders resulted primarily from an increase in volume, which was driven by higher tank railcar shipments from the added capacity at our Marmaduke railcar manufacturing plant, and additional railcars shipped under our ACF manufacturing agreement, and the impact, in the third quarter of 2007, of low hopper railcar shipments. A reconciliation of the Company�s quarterly net earnings to EBITDA (a non-GAAP financial measure) is set forth in the supplemental disclosure attached to this press release. For the nine months ended September 30, 2008, revenues were $605.8 million and net earnings available to common shareholders were $23.8 million or $1.12 per diluted share. In comparison, for the nine months ended September 30, 2007, the Company had revenues of $536.2 million and net earnings available to common shareholders of $29.4 million or $1.38 per diluted share. Earnings for 2008 included increased net interest expense of $3.9 million, after-tax, partially offset by other income of $2.2 million, after-tax, or $0.10 per diluted share, which was related to realized gains and dividends received from our investment in The Greenbrier Companies, Inc. common stock and investments referencing that stock. Revenues increased in the nine months ended September 30, 2008, compared to the same period in 2007, primarily due to increased tank railcar shipments and higher selling prices of tank railcars, primarily as a result of the recovery of increased steel costs, partially offset by competitive pricing for hopper railcars. During the nine months ended September 30, 2008, the Company shipped 6,095 railcars compared to 5,465 railcars in the same period of 2007, a 12% increase over the same period of the prior year. EBITDA was $61.9 million in the nine months ended September 30, 2008, representing a 4% increase compared to EBITDA of $59.8 million in the nine months ended September 30, 2007. The increase in EBITDA resulted primarily from a volume increase for tank railcar shipments during 2008 compared to 2007. This increase was partially offset by the decrease in profits, primarily as a result of lower selling prices and lower margins that the Company has experienced on hopper railcars in 2008. Our backlog was 5,956 railcars as of September 30, 2008. We attribute the reduction in our backlog to market uncertainty, driven primarily by an unstable economy, high steel prices and a difficult credit environment. In response to this lower demand, we have slowed our production rates for hopper railcars in the fourth quarter. ARI will host a webcast and conference call on Thursday, November 6, 2008 at 10:00 am (Eastern Time) to discuss the Company�s third quarter 2008 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 866-770-7129 and use participant code 74486507. 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 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 future production rates 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 some customer contracts that provide for pricing adjustments based on changes in the cost of certain raw materials and railcar components or the possibility that railcar delivery dates may be delayed, 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, including the recent financial turmoil and associated economic uncertainty; our reliance upon a small number of customers that represent a large percentage of our revenues; 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 dependence on key personnel; our ability to manage overhead and production slow downs; risks associated with potential acquisitions or joint ventures; 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) � September 30, December 31, 2008 2007 (unaudited) Assets Current assets: Cash and cash equivalents $ 283,582 $ 303,882 Short term investments - available-for-sale securities 7,284 - Accounts receivable, net 47,604 33,523 Accounts receivable, due from affiliates 8,898 17,175 Inventories, net 120,864 93,475 Prepaid expenses 3,955 5,015 Deferred tax assets � 2,154 � � 1,610 � Total current assets 474,341 454,680 � Property, plant and equipment, net 199,058 175,166 Deferred debt issuance costs 3,407 3,977 Goodwill 7,169 7,169 Other assets 37 37 Investment in joint venture � 12,961 � � 13,355 � Total assets $ 696,973 � $ 654,384 � � Liabilities and Stockholders' Equity Current liabilities: Current portion of long-term debt $ - $ 8 Accounts payable 68,899 47,903 Accounts payable, due to affiliates 5,680 2,867 Accrued expenses and taxes 6,176 5,729 Accrued compensation 11,153 10,379 Accrued interest expense 1,750 6,907 Accrued dividends � 639 � � 639 � Total current liabilities 94,297 74,432 � Senior unsecured notes 275,000 275,000 Deferred tax liability 6,400 5,690 Pension and post-retirement liabilities 6,276 6,572 Other liabilities � 2,197 � � 1,702 � Total liabilities 384,170 363,396 � Commitments and contingencies - - � Stockholders' equity: Common stock, $.01 par value, 50,000,000 shares authorized, 21,302,296 shares issued and outstanding 213 213 Additional paid-in capital 239,517 239,621 Retained earnings 73,098 51,314 Accumulated other comprehensive loss � (25 ) � (160 ) Total stockholders' equity � 312,803 � � 290,988 � Total liabilities and stockholders' equity $ 696,973 � $ 654,384 � � � � CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts, unaudited) � For the Three Months Ended September 30, September 30, 2008 2007 Revenues: Manufacturing operations (including revenues from affiliates of $47,689 and $47,634 for the three months ended September 30, 2008 and 2007, respectively) $ 205,107 $ 127,376 � Railcar services (including revenues from affiliates of $3,392 and $4,289 for the three months ended September 30, 2008 and 2007, respectively) � 12,141 � � 12,515 � Total revenues 217,248 139,891 � Cost of revenue: Manufacturing operations (187,771 ) (113,251 ) Railcar services � (9,874 ) � (10,668 ) Total cost of revenue (197,645 ) (123,919 ) Gross profit 19,603 15,972 � Selling, administrative and other (including costs related to affiliates of $151 both for the three months ended September 30, 2008 and 2007) � (6,602 ) � (6,835 ) Earnings from operations 13,001 9,137 � Interest income 1,693 3,986 Interest expense (5,018 ) (5,517 ) Other income 1,750 - Earnings from joint venture � 509 � � 115 � Earnings before income tax expense 11,935 7,721 Income tax expense � (4,488 ) � (2,861 ) Net earnings available to common shareholders $ 7,447 � $ 4,860 � � Net earnings per common share - basic $ 0.35 $ 0.23 Net earnings per common share - diluted $ 0.35 $ 0.23 Weighted average common shares outstanding - basic 21,302 21,302 Weighted average common shares outstanding - diluted � 21,302 � � 21,392 � � 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, 2008 2007 Revenues: Manufacturing operations (including revenues from affiliates of $136,134 and $93,558 for the nine months ended September 30, 2008 and 2007, respectively) $ 566,754 $ 498,217 � Railcar services (including revenues from affiliates of $11,617 and $12,622 for the nine months ended September 30, 2008 and 2007, respectively) � 39,025 � � 38,014 � Total revenues 605,779 536,231 � Cost of revenue: Manufacturing operations (511,813 ) (435,389 ) Railcar services � (31,459 ) � (31,198 ) Total cost of revenue (543,272 ) (466,587 ) Gross profit 62,507 69,644 � Selling, administrative and other (including costs related to affiliates of $454 both for the nine months ended September 30, 2008 and 2007) � (19,596 ) � (20,884 ) Earnings from operations 42,911 48,760 � Interest income 5,955 10,046 Interest expense (15,109 ) (12,835 ) Other income 3,486 - Earnings from joint venture � 909 � � 731 � Earnings before income tax expense 38,152 46,702 Income tax expense � (14,345 ) � (17,303 ) Net earnings available to common shareholders $ 23,807 � $ 29,399 � � Net earnings per common share - basic $ 1.12 $ 1.38 Net earnings per common share - diluted $ 1.12 $ 1.38 Weighted average common shares outstanding - basic 21,302 21,265 Weighted average common shares outstanding - diluted � 21,302 � � 21,368 � � Dividends declared per common share $ 0.09 $ 0.09 � � � CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands, unaudited) � For the Nine Months Ended September 30, September 30, 2008 2007 Operating activities: Net earnings $ 23,807 $ 29,399 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: � Depreciation 14,614 10,266 Amortization of deferred costs 609 482 Loss on disposal of property, plant and equipment 242 233 Realized gain on sale of short term investments (2,589 ) - Realized gain on sale of total return swaps (630 ) - Dividends received from short term investments - available-for-sale securities (267 ) - Stock based compensation 590 1,992 Income related to reversal of stock based compensation for stock options (411 ) - Excess tax benefits from stock option exercises - (241 ) Change in joint venture investment as a result of earnings (909 ) (731 ) Provision (benefit) for deferred income taxes 14 (737 ) Provision for losses on accounts receivable 156 84 Changes in operating assets and liabilities: Accounts receivable, net (14,237 ) 255 Accounts receivable, due from affiliate 8,277 (3,921 ) Inventories, net (35,031 ) 2,375 Prepaid expenses 1,060 1,924 Accounts payable 20,996 (14,416 ) Accounts payable, due to affiliate 2,813 1,005 Accrued expenses and taxes (4,061 ) 4,344 Other � (697 ) � (1,331 ) Net cash provided by operating activities 14,346 30,982 � Investing activities: Purchases of property, plant and equipment (31,155 ) (36,495 ) Purchases of short term investments - available-for-sale securities (27,857 ) (100,596 ) Sales of short term investments - available-for-sale securities 23,631 100,596 Dividends received from short term investments - available-for-sale securities 267 - Realized gain on sale of total return swaps 630 - Repayment of note receivable from affiliate (Ohio Castings Company, LLC) 494 165 Investment in joint venture (566 ) (8,840 ) Sale of investment in joint venture � 1,875 � � - � Net cash used in investing activities (32,681 ) (45,170 ) � � Continued � � � CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands, unaudited) � For the Nine Months Ended September 30, September 30, 2008 2007 Financing activities: Common stock dividends (1,917 ) (1,912 ) 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 issuance - (4,314 ) Finance fees related to credit facility (40 ) (60 ) Repayment of debt � (8 ) � (65 ) Net cash provided by (used in) financing activities � (1,965 ) � 270,875 � Increase (decrease) in cash and cash equivalents (20,300 ) 256,687 Cash and cash equivalents at beginning of period � 303,882 � � 40,922 � Cash and cash equivalents at end of period $ 283,582 � $ 297,609 � � � � � � RECONCILIATION OF NET EARNINGS TO EBITDA AND ADJUSTED EBITDA(In thousands, unaudited) � Three months ended Nine months ended September 30, September 30, 2008 2007 2008 2007 � Net earnings $ 7,447 $ 4,860 $ 23,807 $ 29,399 Income tax expense 4,488 2,861 14,345 17,303 Interest expense 5,018 5,517 15,109 12,835 Interest income (1,693 ) (3,986 ) (5,955 ) (10,046 ) Depreciation � 5,023 � � 3,457 � � 14,614 � � 10,266 � EBITDA $ 20,283 � $ 12,709 � $ 61,920 � $ 59,757 � Expense related to share based compensation 100 332 9 1,297 Expense related to stock appreciation rights compensation 1 95 348 170 695 Other income � (1,750 ) � - � � (3,486 ) � - � Adjusted EBITDA $ 18,728 � $ 13,389 � $ 58,613 � $ 61,749 � � � 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 share based compensation expense related to stock options and stock appreciation rights (SARs), and before gains or losses on investments. 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 and our investments allows us and our investors to understand better our operating results independent of financial changes caused by the fluctuating price of our common stock and our investments. 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.