Third Quarter 2012 Highlights
- Revenues of $168.2 million reflect strong railcar sales
and increasing railcar lease revenues
- Adjusted EBITDA of $36.7 million, a new quarterly
record
- Net earnings of $14.0 million, or $0.66 per share, a
new quarterly record
- Backlog increased to 7,630 railcars
- Railcar shipments of approximately 1,460 railcars,
including 310 railcars to leasing customers
- Partial redemption of $100.0 million on the $275.0
million, 7.5% senior notes
American Railcar Industries, Inc. (ARI or the Company)
(Nasdaq:ARII) today reported its third quarter 2012 financial
results. "We are pleased with our strong financial performance,
operating results and continued growth of our fleet of leased
railcars," said James Cowan, President and CEO of ARI. "The market
for tank railcars remains very strong, which provided us with a
favorable sales mix during the quarter. Strong tank railcar volumes
generated operational leverage and efficiencies which were
partially offset by softer demand for hopper railcars. During the
quarter we received orders for 2,290 railcars, increasing our
backlog to 7,630 railcars."
Third Quarter Results
Consolidated revenues for the third quarter of 2012 were $168.2
million, up significantly when compared to the $125.8 million for
the third quarter of 2011. The increase in revenues was primarily
due to an increase in manufacturing segment revenues. The Company
shipped approximately 1,460 railcars during the third quarter of
2012, including approximately 310 railcars to leasing customers,
compared to the approximately 1,340 railcars shipped during the
third quarter of 2011, of which approximately 90 were to leasing
customers.
Manufacturing segment revenues were $185.4 million for the third
quarter of 2012, an increase of 58% over the $117.5 million for the
third quarter of 2011. The primary reasons for the increase were an
increase in railcar shipments, improved pricing and a shift in the
sales mix to more tank railcars. The increase in railcar shipments
was driven by strong leasing customer demand, partially offset by a
decline in direct sale shipments. Manufacturing segment revenues
for the third quarter of 2012 included estimated revenues of $38.2
million related to railcars built for our lease fleet, compared to
$9.1 million in the third quarter of 2011. Such revenues are based
on an estimated fair market value of the leased railcars as if they
had been sold to a third party, and are eliminated in
consolidation. Revenues for railcars built for the Company's lease
fleet are not recognized in consolidated revenues as a railcar
sale, but are recognized over the term of the lease in accordance
with the monthly lease revenues. Railcars built for the lease fleet
represented over 20% of ARI's railcar shipments during the third
quarter of 2012 compared to 7% for the third quarter of 2011.
Consolidated earnings from operations for the third quarter of
2012 set a new quarterly record of $30.3 million, an increase of
152% over the $12.0 million for the third quarter of 2011.
Operating margins were 18% for the third quarter of 2012 compared
to 10% for the comparable quarter of 2011. The increase in
consolidated earnings was primarily due to an increase in
manufacturing earnings from operations. Manufacturing earnings from
operations were $34.2 million for the third quarter of 2012
compared to $8.7 million for the same period in 2011. This increase
is due predominately to the increased volumes, improved sales mix
and pricing discussed above, as well as operating leverage and
efficiencies achieved as a result of strong tank railcar production
volumes, partially offset by softer hopper railcar volumes. The
Company also continues to benefit from cost savings achieved by the
vertical integration projects put in place during the past several
years. Manufacturing earnings from operations for the third quarter
of 2012 included $5.0 million of estimated profit on railcars built
for our lease fleet that is eliminated in consolidation and is
based on an estimated fair market value of revenues as if the
railcars had been sold to a third party, less the cost to
manufacture.
The Company recorded a loss from joint ventures of $0.8 million
for the third quarter of 2012 compared to a loss of $2.2 million
for the third quarter of 2011. The improvements from prior year
reflect the impact of increased production volumes of railcar
castings and axles, which have both followed industry demand for
new railcars. Consistent with the sequential decline in volumes for
hopper railcars, the industry is also experiencing softness with
respect to other car types that the Company does not manufacture
but for which our domestic joint ventures provide components.
Adjusted EBITDA, which excludes stock based compensation, was a
quarterly record of $36.7 million for the third quarter of 2012,
compared to $12.2 million for the third quarter of 2011. Stock
based compensation expense was $1.0 million for the third quarter
of 2012 compared to income of $3.1 million for the third quarter of
2011. Stock based compensation fluctuates with changes in the
Company's stock price.
Net interest expense was $4.4 million for the third quarter of
2012 compared to $4.5 million for the third quarter of 2011.
Interest expense primarily relates to the Company's 7.5% Senior
Notes due in 2014 (the Notes). In September of 2012, the Company
redeemed $100.0 million of principal on the Notes at a redemption
price of 101.875% utilizing available cash on hand. In conjunction
with the partial redemption and the related decrease to interest
expense, the Company incurred a $2.3 million charge shown on the
consolidated statement of operations in loss on debt
extinguishment. The charge was comprised of $1.9 million for the
premium the Company paid and a non-cash charge of $0.4 million
related to the write-off of deferred financing fees. The impact of
the debt redemption, net of cost savings related to lower interest
expense for the month of September, reduced the third quarter 2012
net earnings by $1.0 million or by $0.04 per share.
Net earnings for the third quarter of 2012 were a quarterly
record of $14.0 million, or $0.66 per share; compared to $4.0
million, or $0.19 per share, for the third quarter of 2011.
Year-to-Date Results
Consolidated revenues for the first nine months of 2012 were
$504.0 million compared to $322.5 million for the comparable period
in 2011. The increase in revenues was primarily due to an increase
in manufacturing segment revenues. The Company shipped
approximately 5,870 railcars, including approximately 1,690
railcars to leasing customers during the first nine months of 2012,
which was nearly double the approximately 3,060 railcars shipped
during the comparable period in 2011, of which approximately 90
were to leasing customers.
Manufacturing segment revenues were $616.5 million for the first
nine months of 2012 compared to $280.9 million for the comparable
period in 2011. The primary reasons for the revenues increase
include increased volumes of shipments, improved pricing and a
shift in the sales mix to more tank railcars. The increase in
shipments included those shipped for our leasing business.
Manufacturing segment revenues for the first nine months of 2012
included estimated revenues of $170.3 million relating to railcars
built for the lease fleet, compared to $9.6 million in the
comparable period in 2011. Such revenues are based on an estimated
fair market value of the leased railcars as if they had been sold
to a third party, and are eliminated in consolidation. Revenues for
railcars built for the Company's lease fleet are not recognized in
consolidated revenues as a railcar sale, but are recognized over
the term of the lease in accordance with the monthly lease
revenues. Railcars built for the lease fleet represented over 28%
of ARI's railcar shipments in the first nine months of 2012
compared to 3% for the nine months ended September 30, 2011.
Consolidated earnings from operations for the nine months ended
September 30, 2012 were $80.1 million, up substantially from $18.3
million for the same period in 2011. Operating margins were 16% for
the first nine months of 2012 compared to 6% for the same period in
2011. The increase in consolidated earnings was primarily due to an
increase in manufacturing earnings from operations. Manufacturing
earnings from operations were $109.0 million for the third quarter
2012 compared to $16.5 million for the same period in 2011. This
increase is due predominately to increased volumes, improved sales
mix, pricing and operating leverage and efficiencies as a result of
strong production volumes. The Company also continues to benefit
from cost savings achieved by the vertical integration projects put
in place during the past several years. The increase in volumes
included railcars produced for our leasing business. Manufacturing
earnings from operations for the first nine months of 2012 included
$28.3 million of profit on railcars built for the lease fleet that
is eliminated in consolidation and is based on an estimated fair
market value of revenues as if the railcars had been sold to a
third party, less the cost to manufacture.
The Company recorded break-even earnings from joint ventures for
the first nine months of 2012 compared to a loss of $7.2 million
for the same period in 2011.
Adjusted EBITDA was $101.5 million for the first nine months of
2012, up by nearly $75 million from $26.8 million for the
comparable period in 2011.
Net earnings for the first nine months of 2012 were $39.4
million, or $1.84 per share, compared to a loss of ($0.7) million,
or ($0.03) per share, for the same period of 2011.
A reconciliation of the Company's segment revenues and earnings
(loss) from operations, used for corporate management and resource
allocation purposes, to the consolidated revenues and earnings
(loss) from operations is set forth in the supplemental disclosure
attached to this press release. 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 will host a webcast and conference call on Thursday, October
25, 2012 at 10:00 am (Eastern Time) to discuss the Company's third
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, the growth of the Company's leasing business, improved
pricing, anticipated future production rates, anticipated benefits
of the partial redemption of the Company's Notes, 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 an
economic downturn, adverse market conditions and restricted credit
markets; 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 sufficiency of the Company's
liquidity and capital resources, particularly in light of the
Company's recent use of cash to partially redeem the Notes and
current plans to expand the Company's lease fleet; 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 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) |
|
|
|
|
September 30, |
December 31, |
|
2012 |
2011 |
|
(unaudited) |
|
Assets |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 99,195 |
$ 307,172 |
Accounts receivable, net |
35,513 |
33,626 |
Accounts receivable, due from related
parties |
7,562 |
6,106 |
Income taxes receivable |
4,760 |
4,074 |
Inventories, net |
132,350 |
95,827 |
Deferred tax assets |
3,334 |
3,203 |
Prepaid expenses and other current
assets |
5,294 |
4,539 |
Total current assets |
288,008 |
454,547 |
|
|
|
Property, plant and equipment, net |
330,469 |
194,242 |
Deferred debt issuance costs |
556 |
1,335 |
Interest receivable, due from related
parties |
-- |
292 |
Goodwill |
7,169 |
7,169 |
Investments in and loans to joint
ventures |
45,150 |
45,122 |
Other assets |
1,123 |
1,063 |
Total assets |
$ 672,475 |
$ 703,770 |
|
|
|
Liabilities and Stockholders'
Equity |
|
|
Current liabilities: |
|
|
Accounts payable |
$ 67,434 |
$ 62,318 |
Accounts payable, due to related
parties |
950 |
800 |
Accrued expenses and taxes |
9,267 |
5,879 |
Accrued compensation |
16,801 |
14,446 |
Accrued interest expense |
1,094 |
6,875 |
Total current liabilities |
95,546 |
90,318 |
|
|
|
Senior unsecured notes |
175,000 |
275,000 |
Deferred tax liability |
39,969 |
14,923 |
Pension and post-retirement liabilities |
8,704 |
9,280 |
Other liabilities |
3,525 |
4,080 |
Total liabilities |
322,744 |
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 September 30, 2012 and December 31, 2011 |
213 |
213 |
Additional paid-in capital |
239,609 |
239,609 |
Retained earnings |
110,920 |
71,545 |
Accumulated other comprehensive loss |
(1,011) |
(1,198) |
Total stockholders' equity |
349,731 |
310,169 |
Total liabilities and stockholders'
equity |
$ 672,475 |
$ 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 |
|
September
30, |
|
2012 |
2011 |
Revenues: |
|
|
Manufacturing (including revenues from
affiliates of $49,962 and $0 for the three months ended September
30, 2012 and 2011, respectively) |
$ 147,212 |
$ 108,356 |
Railcar leasing |
4,267 |
259 |
Railcar services (including revenues from
affiliates of $5,855 and $6,916 for the three months ended
September 30, 2012 and 2011, respectively) |
16,751 |
17,169 |
Total revenues |
168,230 |
125,784 |
|
|
|
Cost of revenues: |
|
|
Manufacturing |
(116,497) |
(98,069) |
Railcar leasing |
(1,854) |
(142) |
Railcar services |
(13,181) |
(12,618) |
Total cost of revenues |
(131,532) |
(110,829) |
Gross profit |
36,698 |
14,955 |
|
|
|
Selling, general and administrative
(including costs to a related party of $146 and $145 for the three
months ended September 30, 2012 and 2011, respectively) |
(6,360) |
(2,934) |
Earnings from operations |
30,338 |
12,021 |
|
|
|
Interest income (including income from
related parties of $727 and $717 for the three months ended
September 30, 2012 and 2011, respectively) |
750 |
1,005 |
Interest expense |
(4,414) |
(4,478) |
Loss on debt extinguishment |
(2,267) |
-- |
Other income (including income from a related
party of $4 for both the three months ended September 30, 2012 and
2011) |
18 |
5 |
Earnings (loss) from joint ventures |
(849) |
(2,170) |
Earnings before income taxes |
23,576 |
6,383 |
Income tax expense |
(9,566) |
(2,357) |
Net earnings |
$ 14,010 |
$ 4,026 |
|
|
|
Net earnings per common share - basic and
diluted |
$ 0.66 |
$ 0.19 |
Weighted average common shares outstanding -
basic and diluted |
21,352 |
21,352 |
|
|
|
AMERICAN RAILCAR
INDUSTRIES, INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS |
(In thousands, except per share
amounts, unaudited) |
|
|
|
|
For the Nine Months
Ended |
|
September
30, |
|
2012 |
2011 |
|
|
Revenues: |
|
|
Manufacturing (including revenues from
affiliates of $60,859 and $1,221 for the nine months ended
September 30, 2012 and 2011, respectively) |
$ 446,273 |
$ 271,260 |
Railcar leasing |
8,315 |
648 |
Railcar services (including revenues from
affiliates of $16,858 and $19,049 for the nine months ended
September 30, 2012 and 2011, respectively) |
49,455 |
50,632 |
Total revenues |
504,043 |
322,540 |
|
|
|
Cost of revenues: |
|
|
Manufacturing |
(360,507) |
(250,546) |
Railcar leasing |
(4,196) |
(346) |
Railcar services |
(38,849) |
(38,493) |
Total cost of revenues |
(403,552) |
(289,385) |
Gross profit |
100,491 |
33,155 |
|
|
|
Selling, general and administrative
(including costs to a related party of $441 and $436 for the nine
months ended September 30, 2012 and 2011, respectively) |
(20,388) |
(14,878) |
Earnings from operations |
80,103 |
18,277 |
|
|
|
Interest income (including income from
related parties of $2,201 and $2,111 for the nine months ended
September 30, 2012 and 2011, respectively) |
2,297 |
2,865 |
Interest expense |
(14,630) |
(15,143) |
Loss on debt extinguishment |
(2,267) |
-- |
Other income (including income from a related
party of $10 and $11 for the nine months ended September 30, 2012
and 2011, respectively) |
37 |
24 |
Earnings (loss) from joint ventures |
31 |
(7,241) |
Earnings (loss) before income taxes |
65,571 |
(1,218) |
Income tax (expense) benefit |
(26,196) |
484 |
Net earnings (loss) |
$ 39,375 |
$ (734) |
|
|
|
Net earnings (loss) per common share - basic
and diluted |
$ 1.84 |
$ (0.03) |
Weighted average common shares outstanding -
basic and diluted |
21,352 |
21,351 |
|
|
|
AMERICAN RAILCAR
INDUSTRIES, INC. AND SUBSIDIARIES |
CONDENSED SEGMENT
DATA |
(In thousands, unaudited) |
|
|
|
|
|
|
|
|
Revenues |
Earnings (Loss)
from Operations |
|
External |
Intersegment |
Total |
External |
Intersegment |
Total |
For the Three Months Ended
September 30, 2012 |
|
|
|
|
|
|
Manufacturing |
$ 147,212 |
$ 38,178 |
$ 185,390 |
$ 29,206 |
$ 5,012 |
$ 34,218 |
Railcar Leasing |
4,267 |
-- |
4,267 |
2,377 |
6 |
2,383 |
Railcar Services |
16,751 |
221 |
16,972 |
2,955 |
(46) |
2,909 |
Corporate |
-- |
-- |
-- |
(4,200) |
-- |
(4,200) |
Eliminations |
-- |
(38,399) |
(38,399) |
-- |
(4,972) |
(4,972) |
Total Consolidated |
$ 168,230 |
$ -- |
$ 168,230 |
$ 30,338 |
$ -- |
$ 30,338 |
For the Three Months Ended
September 30, 2011 |
|
|
|
|
|
|
Manufacturing |
$ 108,356 |
$ 9,118 |
$ 117,474 |
$ 8,561 |
$ 174 |
$ 8,735 |
Railcar Leasing |
259 |
-- |
259 |
62 |
-- |
62 |
Railcar Services |
17,169 |
50 |
17,219 |
4,021 |
(9) |
4,012 |
Corporate |
-- |
-- |
-- |
(623) |
-- |
(623) |
Eliminations |
-- |
(9,168) |
(9,168) |
-- |
(165) |
(165) |
Total Consolidated |
$ 125,784 |
$ -- |
$ 125,784 |
$ 12,021 |
$ -- |
$ 12,021 |
For the Nine Months Ended
September 30, 2012 |
|
|
|
|
|
|
Manufacturing |
$ 446,273 |
$ 170,267 |
$ 616,540 |
$ 80,692 |
$ 28,280 |
$ 108,972 |
Railcar Leasing |
8,315 |
-- |
8,315 |
3,994 |
19 |
4,013 |
Railcar Services |
49,455 |
441 |
49,896 |
8,694 |
(96) |
8,598 |
Corporate |
-- |
-- |
-- |
(13,277) |
-- |
(13,277) |
Eliminations |
-- |
(170,708) |
(170,708) |
-- |
(28,203) |
(28,203) |
Total Consolidated |
$ 504,043 |
$ -- |
$ 504,043 |
$ 80,103 |
$ -- |
$ 80,103 |
For the Nine Months Ended
September 30, 2011 |
|
|
|
|
|
|
Manufacturing |
$ 271,260 |
$ 9,617 |
$ 280,877 |
$ 16,255 |
$ 227 |
$ 16,482 |
Railcar Leasing |
648 |
-- |
648 |
188 |
-- |
188 |
Railcar Services |
50,632 |
217 |
50,849 |
10,635 |
(10) |
10,625 |
Corporate |
-- |
-- |
-- |
(8,801) |
-- |
(8,801) |
Eliminations |
-- |
(9,834) |
(9,834) |
-- |
(217) |
(217) |
Total Consolidated |
$ 322,540 |
$ -- |
$ 322,540 |
$ 18,277 |
$ -- |
$ 18,277 |
|
|
|
AMERICAN RAILCAR
INDUSTRIES, INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS |
(In thousands, unaudited) |
|
|
|
|
For the Nine Months
Ended |
|
September
30, |
|
2012 |
2011 |
|
|
Operating activities: |
|
|
Net earnings (loss) |
$ 39,375 |
$ (734) |
Adjustments to reconcile net earnings (loss)
to net cash provided by (used in) operating activities: |
|
|
Depreciation |
17,506 |
16,872 |
Amortization of deferred costs |
487 |
524 |
Loss on debt extinguishment |
2,267 |
-- |
(Gain) loss on disposal of property,
plant and equipment |
-- |
82 |
Stock-based compensation |
3,810 |
(1,128) |
Change in interest receivable, due from
related parties |
292 |
(120) |
(Earnings) loss from joint ventures |
(31) |
7,241 |
Provision (benefit) for deferred income
taxes |
24,703 |
(312) |
Adjustment to provision for losses on
accounts receivable |
108 |
(26) |
Changes in operating assets and
liabilities: |
|
|
Accounts receivable, net |
(1,995) |
(11,437) |
Accounts receivable, due from related
parties |
(1,428) |
1,448 |
Income taxes receivable |
(282) |
(12) |
Inventories, net |
(36,486) |
(64,633) |
Prepaid expenses and other current
assets |
(754) |
(848) |
Accounts payable |
5,114 |
37,091 |
Accounts payable, due to related
parties |
150 |
224 |
Accrued expenses and taxes |
(5,119) |
(1,989) |
Other |
(364) |
(1,463) |
Net cash provided by (used in)
operating activities |
47,353 |
(19,220) |
Investing activities: |
|
|
Purchases of property, plant and
equipment |
(10,444) |
(3,817) |
Capital expenditures - leased
railcars |
(143,242) |
(8,019) |
Proceeds from the sale of property, plant
and equipment |
254 |
117 |
Proceeds from the repayments of loans by
joint ventures |
1,592 |
775 |
Investments in and loans to joint
ventures |
(1,652) |
(5,228) |
Net cash used in investing
activities |
(153,492) |
(16,172) |
Financing activities: |
|
|
Repayment of long-term debt |
(100,000) |
-- |
Premium on debt redemption |
(1,875) |
-- |
Proceeds from stock option exercises |
-- |
756 |
Net cash provided by financing
activities |
(101,875) |
756 |
Effect of exchange rate changes on cash and
cash equivalents |
37 |
(23) |
Decrease in cash and cash
equivalents |
(207,977) |
(34,659) |
Cash and cash equivalents at beginning of
period |
307,172 |
318,758 |
Cash and cash equivalents at end of
period |
$ 99,195 |
$ 284,099 |
|
|
|
AMERICAN RAILCAR
INDUSTRIES, INC. AND SUBSIDIARIES |
RECONCILIATION OF NET
EARNINGS (LOSS) TO EBITDA AND ADJUSTED EBITDA |
(In thousands, unaudited) |
|
For the Three Months
Ended |
For the Nine Months
Ended |
|
September
30, |
September
30, |
|
2012 |
2011 |
2012 |
2011 |
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) |
$ 14,010 |
$ 4,026 |
$ 39,375 |
$ (734) |
Income tax expense (benefit) |
9,566 |
2,357 |
26,196 |
(484) |
Interest expense |
4,414 |
4,478 |
14,630 |
15,143 |
Loss on debt extinguishment |
2,267 |
-- |
2,267 |
-- |
Interest income |
(750) |
(1,005) |
(2,297) |
(2,865) |
Depreciation |
6,220 |
5,418 |
17,506 |
16,872 |
EBITDA |
$ 35,727 |
$ 15,274 |
$ 97,677 |
$ 27,932 |
Expense (income) related to stock
appreciation rights compensation 1 |
997 |
(3,087) |
3,810 |
(1,128) |
Adjusted EBITDA |
$ 36,724 |
$ 12,187 |
$ 101,487 |
$ 26,804 |
|
|
|
|
|
1 SARs are cash settled at time of
exercise |
|
|
|
|
EBITDA represents net earnings (loss) before income tax expense
(benefit), interest expense (income), loss on debt extinguishment
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
statement of operations or 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 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
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