American Railcar Industries, Inc. Announces Plans to Invest in Railcar Leasing
December 13 2010 - 8:15PM
Business Wire
American Railcar Industries, Inc. (NASDAQ: ARII) (the “Company”
or “ARI”) announced today that it plans to invest in railcar
leasing as it seeks to expand and diversify its business in
response to customer demands and market conditions. The Company
remains Agile, Responsive and Innovative in
responding to new opportunities to support its customers.
“ARI is very excited to offer railcar leasing and provide
another option for customers to utilize our quality railcars,” said
President and CEO James Cowan. “We remain committed to meeting the
needs of our customers. The economy and railcar market have been
challenging over the last couple of years and ARI is responding to
those challenges with an expanded market strategy.”
ARI has excellent customer relationships in the railcar industry
through sales of new railcars, railcar repair, refurbishment, and
fleet management services. Through railcar leasing, ARI intends to
provide customers with a broader offering of services.
ARI is currently in negotiations with American Railcar Leasing
LLC (“ARL”), an affiliate, to enter into an agreement pursuant to
which ARL would identify potential leasing customers for ARI in
exchange for fees payable by ARI to ARL. ARL is well-known in the
railcar industry and has long-standing relationships with customers
that exclusively lease railcars. ARL is controlled by Mr. Carl C.
Icahn, the Company’s principal beneficial stockholder (through
Icahn Enterprises L.P.) and the chairman of the Company’s board of
directors. Any agreements with ARL are the product of arm’s length
negotiations and are approved by the independent directors of the
Company’s board of directors.
ARI also anticipates that the leasing business will provide a
more consistent stream of cash flows and revenue, which management
expects would diversify the Company and improve performance during
the down cycles of the railcar market. ARI currently plans to fund
leasing operations through existing cash. As of September 30, 2010,
ARI reported cash of approximately $310 million. Investing existing
cash in railcars built to order for leasing customers is expected
to enhance returns.
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.
ARI is controlled by Mr. Carl C. Icahn, the chairman of ARI’s board
of directors, through his affiliate, Icahn Enterprises L.P.
Forward Looking Statement Disclaimer
This press release contains statements relating to our expected
financial performance, future business prospects, events, plans,
objectives, expectations and intentions 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 the Company’s prospects, the anticipated performance of
its leasing and other railcar businesses, the anticipated market
and market acceptance for railcars built for lease, anticipated
benefits of an expanded marketing strategy and entry into a new
market, anticipated customer demands and expectations regarding
ongoing and new customer relationships, anticipated benefits from
the Company’s relationship with Mr. Carl C. Icahn and ARL, any
implications that the Company will be able to enter into an
agreement with ARL and, if so, the anticipated advantages to the
Company from entering into any such agreement, expected sources of
financing for the leasing business and anticipated effects on the
Company’s financial results as a result of utilizing existing cash
to fund the leasing business. These forward-looking statements are
subject to known and unknown risks and uncertainties that could
cause actual results to differ materially from those anticipated.
The Company’s entry into a new business and market involves
numerous risks and uncertainties, including without limitation,
difficulties associated with pricing, delays, unexpected costs,
credit risk and integrating the Company’s new business with its
existing businesses. Other potential risks and uncertainties
relating to ARI’s business are described in ARI’s filings with the
Securities and Exchange Commission. ARI 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.
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