American Railcar Industries, Inc. (ARI or the Company) (NASDAQ: ARII) today reported its second quarter 2010 financial results.
“The railcar industry has begun to see a modest improvement in demand during 2010. Railcar orders have improved, railcar loadings have increased and railcars are being returned to service from storage. We received orders for approximately 1,080 railcars during the second quarter of 2010. To fulfill the new railcar orders we will begin modestly ramping up production rates. Our railcar services segment continues to be strong, with revenues growing 25% year-over-year, to $34.6 million for the six months ended June 30, 2010. This growth resulted from higher volumes driven by repair plant expansions and repair work performed at our railcar manufacturing plants,” said James Cowan, President and CEO of ARI.
For the three months ended June 30, 2010, revenues were $61.2 million and net losses were $5.9 million or $0.28 per share. In comparison, for the three months ended June 30, 2009, revenues were $109.9 million and net earnings were $1.1 million or $0.05 per share. Revenues were lower in the second quarter of 2010 when compared to the same period of 2009 primarily due to lower railcar shipments and a change in product mix. The decrease was partially offset by increased railcar repair volumes primarily due to the Company’s completed railcar repair facility expansions and the utilization of its railcar manufacturing facilities for railcar repair projects. During the three months ended June 30, 2010, the Company shipped approximately 370 railcars as compared to approximately 980 railcars in the same period of 2009. Our backlog increased to approximately 1,210 railcars as of June 30, 2010.
EBITDA, adjusted to exclude investment activity and stock based compensation expense (Adjusted EBITDA), was $0.8 million in the second quarter of 2010 compared to $11.4 million in the second quarter of 2009. This decrease was primarily due to a decrease in railcar shipments and lower gross profit margin. The Company’s gross profit margin decline is primarily attributable to decreased railcar shipments, competitive pricing pressures and the impact of fixed costs in a low production environment. A reconciliation of the Company’s net loss to EBITDA and Adjusted EBITDA (both non-GAAP financial measures) is set forth in the supplemental disclosure attached to this press release.