ARII American Railcar Industries, Inc. (delisted)

American Railcar Industries, Inc. (ARI or the Company) (NASDAQ: ARII) today reported its fourth quarter and year end 2009 financial results.

“The Company’s 2009 results include net earnings of $15.5 million and the shipment of approximately 3,690 railcars,” said James Cowan, President and CEO of ARI. “Railcar shipments in 2009 were significantly lower than in 2008 due to the railcar market being affected by a weak economy. Our railcar services segment experienced a 13% growth in revenues in 2009 as compared to 2008 and an increase in gross profit margin due to the completion of several expansion projects in 2009 that have generated higher volumes and increased efficiencies. Our balance sheet position remains strong with $375.0 million of working capital, which includes $351.1 million in cash and cash equivalents. Due to continued weakness in the railcar market, we expect our shipments and revenues to decrease in 2010 from 2009.”

For the three months ended December 31, 2009, revenues were $78.5 million and net earnings were $10.5 million or $0.50 per share. In comparison, for the three months ended December 31, 2008, revenues were $203.0 million and net earnings were $7.6 million or $0.35 per share. Net earnings in the fourth quarter of 2009 were positively impacted by the Company’s short-term investment activity, which resulted in a net gain of $17.8 million for the quarter, $11.6 million after-tax or $0.54 per share.

Revenues were lower in the fourth quarter of 2009 compared to the same period of 2008, primarily due to a decrease in the number of railcars shipped and a decrease in surcharges reflected in selling prices, partially offset by a change in product mix and an increase in revenues from the railcar services segment. During the three months ended December 31, 2009, the Company shipped approximately 610 railcars compared to approximately 1,870 railcars in the same period of 2008.

EBITDA, adjusted to exclude investment activity and stock based compensation expense, was $7.9 million in the fourth quarter of 2009 as compared to $20.2 million in the fourth quarter of 2008. This decrease resulted primarily from decreased railcar shipments, as discussed above, and an increase in joint venture losses, all partially offset by lower selling, administrative and other costs. Losses from joint ventures were $1.6 million higher in the fourth quarter of 2009 than in the fourth quarter of 2008, primarily due to temporarily idling the Company’s castings joint venture and losses from its axle joint venture.

In the fourth quarter of 2009, net earnings benefited from higher other income partially offset by joint venture losses and decreased railcar shipments, as discussed above. Other income of $17.8 million, as mentioned above, related to net gains on the Company’s short-term investment activity in the fourth quarter of 2009 as compared to $0.2 million, $0.1 million after-tax or $0.01 per share of other income in the fourth quarter of 2008 related to short-term investment activity. 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.

For the year ended December 31, 2009, revenues were $423.4 million and net earnings were $15.5 million or $0.73 per share. In comparison, for the year ended December 31, 2008, revenues were $808.8 million and net earnings were $31.4 million or $1.47 per share. Net earnings for 2009 were positively impacted by the Company’s short-term investment activity, which resulted in a net gain of $20.9 million for the year, $13.6 million after-tax or $0.64 per share.

Revenues were lower in 2009 compared to 2008 primarily due to decreased railcar shipments and a decrease in surcharges reflected in selling prices, partially offset by a change in product mix and an increase in revenues from the railcar services segment. During the year ended December 31, 2009, the Company shipped approximately 3,690 railcars compared to approximately 7,970 railcars in the same period of 2008.

EBITDA, adjusted to exclude investment activity and stock based compensation expense, was $40.0 million for the year ended December 31, 2009 compared to $78.8 million for the year ended December 31, 2008. This decrease resulted primarily from decreased railcar shipments, as discussed above, and an increase in joint venture losses, partially offset by an increase in earnings from the railcar services segment and lower selling, administrative and other costs. Losses from joint ventures were $7.5 million higher in 2009, as compared to the same period in 2008, resulting in a decrease to earnings of $5.3 million after-tax or $0.25 per share, primarily due to temporarily idling the Company’s castings joint venture and losses from its axle joint venture.

During 2009, net earnings were negatively impacted by decreased railcar shipments and joint venture losses, as discussed above, partially offset by an increase in other income. Other income of $20.9 million as discussed above, related to net gains on the Company’s short-term investment activity in 2009 as compared to $3.7 million, $2.4 million after-tax or $0.11 per share of other income in 2008 related to short-term investment activity. Net earnings benefited from a one-time $1.0 million adjustment to accrued taxes due to certain tax benefits becoming recognizable during 2009. Net earnings were negatively impacted by net interest expense, which increased $1.3 million after-tax or $0.06 per share primarily due to lower interest rates negatively affecting interest income and a decrease in capitalized interest.

Our backlog was approximately 550 railcars as of December 31, 2009. The backlog level has declined primarily due to continued weak demand for railcars.

ARI will host a webcast and conference call on Thursday, March 4, 2010 at 10:00 am (Eastern Time) to discuss the Company’s fourth quarter and year end 2009 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 866-356-3377 and use participant code 22878923. 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 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. 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. 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 anticipated future production rates 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 our forward-looking statements. Other potential risks and uncertainties include, among other things: the impact of the current economic downturn, adverse market conditions and restricted credit markets, and the impact of the continuation of these conditions; our reliance upon a small number of customers that represent a large percentage of our revenues and backlog; the health of and prospects for the overall railcar industry; our prospects in light of the cyclical nature of the railcar manufacturing business and the current economic environment; anticipated trends relating to our shipments, revenues, financial condition or results of operations; our ability to manage overhead and production slowdowns; 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; risks associated with potential joint ventures or acquisitions; the risk of lack of acceptance of our new railcar offerings by our customers; the sufficiency of our liquidity and capital resources; anticipated production schedules for our products; anticipated financing needs and construction and production schedules of our joint ventures; the conversion of our railcar backlog into revenues; compliance with covenants contained in our unsecured senior notes; the impact and anticipated benefits of any acquisitions we may complete; the impact and costs and expenses of any litigation we may be subject to now or in the future; the ongoing benefits and risks related to our relationship with Mr. Carl C. Icahn (the chairman of our board of directors, and through his holdings of Icahn Enterprises LP, our principal beneficial stockholder) and certain of his affiliates; 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, 2009 2008 Assets Current assets: Cash and cash equivalents $ 347,290 $ 291,788 Short-term investments - available-for-sale securities 3,802 2,565 Accounts receivable, net 11,409 39,724 Accounts receivable, due from affiliates 1,356 10,284 Income taxes receivable 1,768 - Inventories, net 40,063 97,245 Deferred tax assets 2,018 2,297 Prepaid expenses and other current assets 4,898 5,314 Total current assets 412,604 449,217   Property, plant and equipment, net 199,349 206,936 Deferred debt issuance costs 2,568 3,204 Interest receivable, due from affiliates 982 - Goodwill 7,169 7,169 Investment in and loans to joint ventures 41,155 13,091 Other assets 537 37 Total assets $ 664,364 $ 679,654   Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 16,874 $ 42,201 Accounts payable, due to affiliates 576 5,193 Accrued expenses and taxes 4,515 7,758 Accrued compensation 8,799 10,413 Accrued interest expense 6,875 6,907 Accrued dividends - 639 Total current liabilities 37,639 73,111   Senior unsecured notes 275,000 275,000 Deferred tax liability 7,120 4,683 Pension and post-retirement liabilities, less current portion 6,279 9,024 Other liabilities 2,686 3,111 Total liabilities 328,724 364,929   Commitments and contingencies   Stockholders' equity: Common stock, $0.01 par value, 50,000,000 shares authorized, 21,302,296 shares issued and outstanding at December 31, 2009 and 2008 213 213 Additional paid-in capital 239,617 239,617 Retained earnings 94,215 80,035 Accumulated other comprehensive income (loss) 1,595 (5,140) Total stockholders' equity 335,640 314,725 Total liabilities and stockholders' equity $ 664,364 $ 679,654 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts, unaudited) For the Three Months Ended December 31,   2009     2008     Revenues: Manufacturing operations (including revenues from affiliates of $11,446 and $46,626 for the three months ended December 31, 2009 and 2008, respectively) $ 64,004 $ 190,751   Railcar services (including revenues from affiliates of $2,886 and $3,721 for the three months ended December 31, 2009 and 2008, respectively)   14,456     12,276   Total revenues 78,460 203,027   Cost of revenue: Manufacturing operations (57,473 ) (170,931 ) Railcar services   (11,592 )   (10,194 ) Total cost of revenue (69,065 ) (181,125 ) Gross profit 9,395 21,902   Selling, administrative and other (including costs related to affiliates of $154 and $152 for the three months ended December 31, 2009 and 2008, respectively)   (5,983 )   (6,939 ) Earnings from operations 3,412 14,963   Interest income (including income related to affiliates of $610 and $6 for the three months ended December 31, 2009 and 2008, respectively) 1,703 1,880 Interest expense (5,347 ) (5,190 ) Other income (including income related to affiliates of $5 and zero for the three months ended December 31, 2009 and 2008, respectively) 17,831 171 Loss from joint ventures   (1,767 )   (191 ) Earnings before income tax expense 15,832 11,633 Income tax expense   (5,324 )   (4,058 ) Net earnings $ 10,508   $ 7,575     Net earnings per share - basic and diluted $ 0.50 $ 0.35 Weighted average shares outstanding - basic and diluted 21,302 21,302   Dividends declared per share $ - $ 0.03 CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share amounts)     For the Years Ended December 31,   2009     2008   Revenues: Manufacturing operations (including revenues from affiliates of $105,216 and $182,760 in 2009 and 2008, respectively) $ 365,329 $ 757,505   Railcar services (including revenues from affiliates of $14,434 and $15,338 in 2009 and 2008, respectively)   58,102     51,301   Total revenues 423,431 808,806   Cost of revenue: Manufacturing operations (329,025 ) (682,744 ) Railcar services   (47,015 )   (41,653 ) Total cost of revenue (376,040 ) (724,397 )   Gross profit 47,391 84,409   Selling, administrative and other (including costs from affiliates of $616 and $606 in 2009 and 2008, respectively)   (25,141 )   (26,535 ) Earnings from operations 22,250 57,874   Interest income (including interest income from affiliates of $986 and $34 in 2009 and 2008, respectively) 6,613 7,835 Interest expense (20,909 ) (20,299 ) Other income (including income related to affiliates of $9 and zero in 2009 and 2008, respectively) 20,869 3,657 (Loss) earnings from joint ventures   (6,797 )   718   Earnings before income tax expense 22,026 49,785 Income tax expense   (6,568 )   (18,403 ) Net earnings $ 15,458   $ 31,382     Net earnings per share - basic and diluted $ 0.73 $ 1.47 Weighted average shares outstanding - basic and diluted 21,302 21,302   Dividends declared per share $ 0.06 $ 0.12 CONSOLIDATED STATEMENTS OF CASH FLOWS     (In thousands) For the Years Ended December 31,       2009     2008   Operating activities: Net earnings $ 15,458 $ 31,382 Adjustments to reconcile net earnings to net cash (used in) provided by operating activities: Depreciation 23,405 20,148 Amortization of deferred costs 718 812 Loss on disposal of property, plant and equipment 222 308 Stock based compensation 1,174 473 Income related to reversal of stock based compensation for stock options - (411 ) Change in interest receivable, due from affiliates (982 ) - Change in joint venture investment as a result of loss (earnings) 6,797 (718 ) Unrealized loss (gain) on derivative assets 88 (88 ) Provision for deferred income taxes 1,492 1,093 (Adjustment) provision for losses on accounts receivable (101 ) 695 Item related to investing activities: Realized loss (gain) on derivative assets 10 (684 ) Realized gain on sale of short-term investments - available-for-sale securities (23,825 ) (2,589 ) Impairment of short-term investments - available-for-sale securities 2,884 - Changes in operating assets and liabilities: Accounts receivable, net 28,483 (6,976 ) Accounts receivable, due from affiliates 8,928 6,892 Income taxes receivable (1,768 ) - Inventories, net 57,260 (3,869 ) Prepaid expenses and other current assets 331 (215 ) Accounts payable (25,366 ) (5,667 ) Accounts payable, due to affiliates (4,617 ) 2,326 Accrued expenses and taxes (5,517 ) 1,980 Other   (931 )   (289 ) Net cash provided by operating activities 84,143 44,603 Investing activities: Purchases of property, plant and equipment (15,047 ) (52,433 ) Sale of property, plant and equipment 71 4 Purchases of short-term investments - available-for-sale securities (36,841 ) (27,857 ) Sales of short-term investments - available-for-sale securities 60,795 23,631 Realized (loss) gain on derivative assets (10 ) 684 Proceeds from repayment of note receivable from affiliate - 658 Investments in and loans to joint ventures (35,810 ) (672 ) Sale of investment in joint venture   -     1,875   Net cash used in investing activities (26,842 ) (54,110 ) Financing activities: Common stock dividends (1,917 ) (2,556 ) Repayment of debt   -     (8 ) Net cash used in financing activities   (1,917 )   (2,564 ) Effect of exchange rate changes on cash and cash equivalents 118 (23 ) Increase (decrease) in cash and cash equivalents 55,502 (12,094 ) Cash and cash equivalents at beginning of year   291,788     303,882   Cash and cash equivalents at end of year $ 347,290   $ 291,788  

 RECONCILIATION OF NET EARNINGS TO EBITDA AND ADJUSTED EBITDA

(In thousands, unaudited)

  Three months ended   Years Ended December 31, December 31, 2009   2008 2009   2008   Net earnings $ 10,508 $ 7,575 $ 15,458 $ 31,382 Income tax expense 5,324 4,058 6,568 18,403 Interest expense 5,347 5,190 20,909 20,299 Interest income (1,703) (1,880) (6,613) (7,835) Depreciation 5,928 5,534 23,405 20,148 EBITDA $ 25,404 $ 20,477 $ 59,727 $ 82,397 Expense related to stock option compensation - 100 - 109 Expense (income) related to stock appreciation rights compensation 1 322 (217) 1,174 (47) Other income on short-term investment activity (17,826) (171) (20,858) (3,657) Adjusted EBITDA $ 7,900 $ 20,189 $ 40,043 $ 78,802   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. 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, 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 and derivative instruments. 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, investments and derivates allows us and our investors to understand better our operating results independent of financial changes caused by the fluctuating price and value of our common stock, investments and derivative instruments. 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.