American Railcar Industries, Inc. (ARI or the Company) (NASDAQ: ARII) today reported its third quarter 2010 financial results.
“The railcar industry has begun to see a modest improvement in demand during 2010. Railcar loadings have increased, railcars are being returned to service from storage and orders for new railcars have increased. We received orders for approximately 640 new railcars during the third quarter of 2010. Our railcar services segment continues to be strong, with revenues growing 17% year-over-year, to $51.0 million for the nine months ended September 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 September 30, 2010, revenues were $64.8 million and net losses were $6.3 million or $0.29 per share. In comparison, for the three months ended September 30, 2009, revenues were $78.1 million and net earnings were $1.1 million or $0.05 per share. Revenues were lower in the third quarter of 2010 when compared to the same period of 2009 primarily due to lower railcar shipments and a change in product mix. During the three months ended September 30, 2010, the Company shipped approximately 420 new railcars as compared to approximately 610 new railcars in the same period of 2009. Our new railcar order backlog increased to approximately 1,420 railcars as of September 30, 2010.
EBITDA, adjusted to exclude investment activity and stock based compensation expense (Adjusted EBITDA), was $1.5 million in the third quarter of 2010 compared to $6.6 million in the third quarter of 2009. This decrease was primarily due to a decrease in railcar shipments and lower gross profit margin, all partially offset by a decrease in selling, administrative and other costs, exclusive of stock based compensation, and a decrease in joint venture losses. 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. The decrease in selling, administrative and other costs was primarily attributable to decreased incentive compensation and outside services. The decrease in joint venture losses was primarily attributable to a decrease in losses from the Company’s axle joint venture due to increased shipments. 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.