American Railcar Industries, Inc. Reports 28% Increase in Fourth Quarter Earnings and Record Earnings for Calendar Year 2007
American Railcar Industries, Inc. (“ARI” or the “Company”) [NASDAQ: ARII] today reported its fourth quarter and full year 2007 financial results.
“ARI recorded its best financial performance ever in 2007. We are very pleased to have achieved strong results for both the quarter and the year in spite of the reduced demand and increased competition for hopper railcars,” said James J. Unger, President and CEO of ARI. “For the year, we achieved record revenues and earnings, and have a strong backlog of 11,929 railcars as of December 31, 2007. In addition, construction has been completed on our new flexible railcar manufacturing plant at our Marmaduke, Arkansas complex, and we began producing railcars at that facility in the fourth quarter of 2007.”
For the three months ended December 31, 2007, revenues were $161.9 million and the net earnings attributable to common shareholders increased 28.3% to $7.9 million or $0.37 per diluted share. In comparison, for the three months ended December 31, 2006, the Company had revenues of $165.3 million and net earnings attributable to common shareholders of $6.1 million or $0.29 per diluted share. During the three months ended December 31, 2007, the Company shipped 1,590 railcars compared to 1,687 railcars in the same period of 2006.
Revenues and railcar shipments decreased in the fourth quarter of 2007 compared to the same period in 2006 primarily due to a reduction of hopper railcar shipments, reflecting less demand and increased competition for some of our hopper railcar products. The revenue decline on hopper railcars was partially offset by an increase in tank railcar shipments, which was due to increased tank railcar capacity.
EBITDA was $16.9 million in the fourth quarter of 2007, a 37.0% increase compared to EBITDA of $12.3 million in the fourth quarter of 2006. The increases in EBITDA and net earnings attributable to common shareholders resulted primarily from an increase in gross profit driven by railcar mix, including significantly more tank railcars, and improved manufacturing efficiencies. A reconciliation of the Company’s quarterly and year to date 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, 2007, revenues were $698.1 million and the net earnings attributable to common shareholders increased 7.6% to $37.3 million or $1.74 per diluted share. In comparison, for the year ended December 31, 2006, the Company had revenues of $646.1 million and net earnings attributable to common shareholders of $34.6 million or $1.67 per diluted share, including a pre-tax benefit of $14.3 million related to insurance recoveries. The $14.3 million included $9.9 million of business interruption insurance compensation for lost profits while the tank railcar facility was shutdown due to the damage from a tornado, and a $4.3 million gain, which was related to the involuntary conversion of assets that were destroyed by the tornado. The gain on the involuntary conversion of assets resulted in a $0.13 per diluted share increase to 2006 diluted earnings per share. During the year ended December 31, 2007, we shipped 7,055 railcars compared to 6,947 railcars in the same period of 2006.
Revenues and railcar shipments increased in the year ended December 31, 2007 compared to the same period in 2006, primarily due to an increase in tank railcar shipments, resulting from increased tank railcar capacity in 2007 and the recovery from the tornado related shutdown in 2006. This was partially offset by a reduction of hopper railcar shipments, driven by less demand and increased competition for some of our hopper railcar products.
EBITDA was $76.7 million in the year ended December 31, 2007, a 15% increase compared to EBITDA of $66.5 million in the year ended December 31, 2006, which included the effect of our insurance recoveries of $14.3 million. The increases in EBITDA and net earnings attributable to common shareholders in 2007 resulted primarily from increased revenue as described above. In addition, as mentioned above, we experienced improved manufacturing efficiencies at our manufacturing facilities.
ARI will host a webcast and conference call on Thursday, February 21, 2008 at 10:00 am (Eastern Time) to discuss the Company’s fourth quarter and full year 2007 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, dial 866-831-6267 and use participant code 62300059. 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.
