Third Quarter 2015 Highlights
- Quarterly revenues of $172.7 million vs. prior year of
$162.8 million - up 6%
- Quarterly gross margin of 33.3% vs. prior year of
28.8%
- Quarterly earnings per share of $1.39 vs. prior year of
$1.12 - up 24%
- Quarterly adjusted EBITDA of $62.6 million vs. prior
year of $48.6 million - up 29%
American Railcar Industries, Inc. (ARI or the Company)
(NASDAQ:ARII) today reported its third quarter 2015 financial
results. Jeff Hollister, President and CEO of ARI, commented, "We
are maintaining our focus on the core of our business by continuing
to efficiently produce high quality hopper and tank railcars at our
manufacturing facilities and working to expand our manufacturing
flexibility. In addition, we are seeking to further diversify our
business by growing our railcar leasing business and expanding our
repair capacity to position us to meet the evolving needs of the
North American railcar market. Our increasing gross margins through
2015 reflect the successful growth of our railcar leasing segment,
combined with continued strong margins in our manufacturing and
railcar services segments. Our lease fleet totaled 10,317 railcars
at September 30, 2015. " Hollister added.
Third Quarter Summary
Total consolidated revenues were $172.7 million for the third
quarter of 2015, an increase of 6% when compared to $162.8 million
for the same period in 2014. This increase was primarily driven by
increased revenues in the railcar leasing and railcar services
segments, partially offset by lower manufacturing revenues.
Manufacturing revenues were $123.3 million for the third quarter
of 2015, a decrease of 4% compared to the same period in 2014.
Hopper railcar shipments for direct sale decreased during the third
quarter of 2015 compared to the same period in 2014 as a higher
percentage of hopper railcars were built for the Company's lease
fleet. Tank railcar shipments for direct sale also decreased as
production has shifted to a larger mix of specialty tank railcars
that have higher average selling prices due to the complexity of
the design. These higher average selling prices partially offset
the overall decrease in direct sale shipments. During the third
quarter of 2015, ARI shipped 990 direct sale railcars and 918
railcars built for the Company's lease fleet compared to 1,034
direct sale railcars and 1,117 railcars built for the lease fleet
during the same period in 2014. Railcars built for the lease fleet
represented 48% of ARI's railcar shipments during the third quarter
of 2015 compared to 52% for the same period in 2014. Because
revenues and earnings related to leased railcars are recognized
over the life of the lease, ARI's quarterly results may vary
depending on the mix of lease versus direct sale railcars that the
Company ships during a given period.
Manufacturing revenues for the third quarter of 2015 exclude
$106.5 million of estimated revenues related to railcars built for
the Company's lease fleet compared to $143.7 million for the same
period in 2014. Estimated revenues related to railcars built for
the Company's lease fleet decreased due to a lower quantity of tank
railcars shipped for lease, partially offset by a higher quantity
of hopper railcars shipped for lease during the third quarter of
2015 compared to the same period of 2014. This resulted in a higher
mix of hopper railcar shipments for our lease fleet, which
generally have lower selling prices than tank railcars. 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 not
recognized in consolidated revenues as railcar sales. Rather lease
revenues are recognized in accordance with the terms of the
contract over the life of the lease.
Railcar leasing revenues were $31.2 million for the third
quarter of 2015, an increase of 81% over the $17.2 million for the
comparable period in 2014. The primary reason for the increase in
revenue was an increase in the number of railcars on lease. ARI had
10,317 railcars in its lease fleet as of September 30, 2015
compared to 6,508 railcars as of September 30, 2014.
Railcar services revenues were $18.2 million for the third
quarter of 2015, an increase of 5% compared to $17.4 million for
the same period in 2014. The primary reasons for the increase in
revenue were an increase in demand, a favorable change in the mix
of work at our repair facilities and the additional capacity
resulting from our Brookhaven repair facility that became
operational during the third quarter of 2014.
Consolidated earnings from operations were $49.8 million for the
third quarter of 2015, an increase of 27% over the $39.3 million
for the same period in 2014. The increase in consolidated earnings
from operations was primarily driven by increased earnings in the
railcar leasing and railcar services segments.
Consolidated operating margins increased to 28.8% for the third
quarter of 2015 compared to 24.1% for the same period in 2014. This
increase was primarily driven by the growth of the Company's lease
fleet, as well as higher margins in the Company's manufacturing and
railcar services segments due to stronger operating efficiencies
and focused cost reduction initiatives.
Manufacturing earnings from operations were $30.3 million for
the third quarter of 2015 compared to $30.7 million for the same
period in 2014. This decrease was due primarily to fewer direct
sale shipments, as discussed above, partially offset by stronger
efficiencies and cost reduction initiatives. Estimated profit on
railcars built for the Company's lease fleet was $24.7 million and
$44.0 million for the third quarter of 2015 and 2014, respectively,
and is excluded from manufacturing earnings from operations. Profit
on railcars built for the Company's lease fleet 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.
Railcar leasing earnings from operations were $21.4 million for
the third quarter of 2015 compared to $10.8 million for the same
period in 2014. This increase was due to the growth in the number
of railcars in the Company's lease fleet.
Railcar services earnings from operations were $3.2 million for
the third quarter of 2015 compared to $2.7 million for the same
period in 2014. This increase was primarily due to the increase in
revenues driven by increased demand, a favorable change in the mix
of work and the additional capacity resulting from the Company's
Brookhaven repair facility, as discussed above.
Selling, general and administrative expenses were $7.8 million
for the third quarter of 2015 compared to $7.6 million for the same
period in 2014. This $0.2 million decrease was primarily due to
lower share-based compensation expense.
EBITDA, adjusted to exclude share-based compensation expense
(Adjusted EBITDA), was $62.6 million for the third quarter of 2015
compared to $48.6 million for the comparable quarter of 2014. The
increase resulted primarily from increased earnings from operations
as discussed above and earnings from joint ventures improving by
$1.4 million for the third quarter of 2015 compared to the same
period in 2014. The improvement in earnings from joint ventures was
primarily driven by increased sales and production levels at the
Company's Axis joint venture consistent with railcar industry
demand, which has generated improved efficiencies and better
profitability. A reconciliation of the Company's net earnings to
EBITDA and Adjusted EBITDA (both non-GAAP financial measures) is
set forth in the supplemental disclosure attached to this press
release.
Net earnings for the third quarter of 2015 were $29.4 million,
or $1.39 per share compared to $23.8 million, or $1.12 per share,
in the same period in 2014. This increase was driven primarily by
increased consolidated earnings from operations and improved
results from the Company's Axis joint venture, as discussed above,
partially offset by an increase in interest expense due to a higher
average debt balance and a higher weighted average interest rate as
a result of refinancing our prior variable rate debt obligations
with fixed rate debt, thereby minimizing the effect of any rise in
interest rates, and increasing borrowings to support the growth of
the Company's lease fleet.
Year-to-Date Results
Consolidated revenues for the first nine months of 2015 were
$628.4 million compared to $582.5 million for the comparable period
in 2014. The Company shipped 4,385 direct sale railcars and 2,588
railcars built for the Company's lease fleet during the first nine
months of 2015 compared to 3,834 direct sale railcars and 2,067
railcars built for the lease fleet during the same period in 2014.
Railcars built for the lease fleet represented 37% of ARI's railcar
shipments in the first nine months of 2015 compared to 35% for the
same period in 2014.
Consolidated earnings from operations for the first nine months
of 2015 were $165.1 million, an increase of 29% from $127.6 million
for the comparable period in 2014. Consolidated earnings from
operations for the first nine months of 2015 and 2014 excluded
$85.5 million and $83.4 million, respectively, of profit on
railcars built for the lease fleet that is eliminated in
consolidation. Operating margins were 26.3% for the first nine
months of 2015 compared to 21.9% for the comparable period of 2014.
These increases were primarily due to increased earnings due to the
growth in the lease fleet and strong efficiencies as a result of
increased production of hopper railcars in 2015 and continued
improvements at most of our other manufacturing facilities.
Adjusted EBITDA was $203.1 million for the first nine months of
2015, an increase of $46.7 million from $156.4 million for the
comparable period in 2014. The increase resulted primarily from
increased consolidated earnings from operations, in addition to an
improvement of $5.6 million from earnings from joint ventures for
the first nine months of 2015 compared to the same period in
2014.
Net earnings for the first nine months of 2015 were $97.3
million, or $4.58 per share compared to $76.8 million, or $3.60 per
share, for the comparable period in 2014, due to increased earnings
from operations and improved joint venture earnings partially
offset by increased interest expense.
Cash Flow and Liquidity
The Company's strong earnings have contributed to cash flow from
operations in the first nine months of 2015 of $167.4 million. As
of September 30, 2015, ARI had working capital of $218.3
million, including $129.0 million of cash and cash equivalents. In
January 2015, the Company raised $625.5 million to refinance its
prior lease fleet financings and extend the maturity of its
debt. The financing provided the Company with net cash of
$211.6 million. As of September 30, 2015, ARI had $608.1
million of debt outstanding under the refinanced lease fleet
financing facility.
At the board meeting in October, the Company's board of
directors declared a cash dividend of $0.40 per share of common
stock of the Company to shareholders of record as of
December 16, 2015 that will be paid on December 30,
2015.
Stock Repurchase Program
On July 28, 2015, the Company's Board of Directors authorized a
stock repurchase program (the "Stock Repurchase Program") pursuant
to which the Company may, from time to time, repurchase up to
$250.0 million of its common stock. The Stock Repurchase Program
will end upon the earlier of the date on which it is terminated by
the Board or when all authorized repurchases are completed. Under
the Stock Repurchase Program, the Company repurchased 1,340,796
shares of common stock, during the three and nine months ended
September 30, 2015, at a cost of $51.3 million. The
Company repurchased 166,970 shares under the Stock Repurchase
Program subsequent to September 30, 2015, at a cost of $6.1
million, resulting in 19,844,531 shares outstanding as of
October 27, 2015.
Backlog
ARI's backlog as of September 30, 2015 was 7,936 railcars
with an estimated value of $798.1 million. Of the total
backlog, 821 railcars, or 10%, were subject to lease with an
estimated market value of $79.1 million.
Conference Call and Webcast
ARI will host a webcast and conference call on Thursday,
October 29, 2015 at 10:00 am (Eastern Time) to discuss the
Company's third quarter 2015 financial results. In conjunction with
this press release, ARI has posted a supplemental information
presentation to its website. 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 provides its railcar customers with
integrated solutions through a comprehensive set of high quality
products and related services. ARI manufactures and sells railcars,
custom designed railcar parts, and other industrial products. ARI
and its subsidiaries also lease railcars manufactured by the
Company to certain markets. In addition, ARI provides railcar
repair services through its various repair facilities, including
mini-shops and mobile units, offering a range of services from full
to light repair. More information about American Railcar
Industries, Inc. is available on its website at
www.americanrailcar.com or call the Investor Relations Department,
636.940.6000.
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: our projects to expand
our manufacturing flexibility and repair capacity, industry,
product and market trends, potential regulatory developments,
anticipated customer demand for the Company's products, the
Company's strategic objectives and long-term strategies, trends
related to railcar shipments for direct sale versus lease, trends
relating to operating margins or manufacturing efficiencies,
anticipated benefits or plans regarding the growth of the Company's
leasing business and the mix of railcars in our lease fleet,
anticipated benefits or plans regarding the Company's current and
potential future efforts to expand its railcar repair business,
anticipated future production rates, the sufficiency of the
Company's short- and long-term liquidity, the Company's Stock
Repurchase Program, the Company's plans regarding future dividends,
the Company's backlog and any implication that the Company's
backlog may be indicative of future revenues. 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. The payment of future dividends, if
any, and the amount thereof, will be at the discretion of ARI's
board of directors and will depend upon the Company's operating
results, strategic plans, capital requirements, financial
condition, provisions of its borrowing arrangements, applicable law
and other factors the Company's board of directors considers
relevant. Other potential risks and uncertainties include, among
other things: the market price of the Company's stock; the nature
of other investment opportunities presented to the Company, cash
flows, basing financial or other information on judgments or
estimates based on future performance or events; risks relating to
the Company's compliance with, and the overall railcar industry's
implementation of, United States and Canadian final regulations
related to the transportation of flammable liquids by rail released
on May 1, 2015; prospects in light of the cyclical nature of ARI's
business; the health of and prospects for the overall railcar
industry; fluctuations in commodity prices, including oil and gas;
the highly competitive nature of the manufacturing, railcar leasing
and railcar services industries; the variable purchase
patterns of ARI's railcar customers and the timing of completion,
customer acceptance and shipment of orders; the Company's ability
to manage overhead and variations in production rates; the
Company's ability to recruit, retain and train adequate numbers of
qualified personnel; ARI's reliance upon a small number of
customers that represent a large percentage of revenues and
backlog; 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; the impact of an
economic downturn, adverse market conditions and restricted credit
markets; the ongoing benefits and risks related to ARI's
relationship with Mr. Carl Icahn, ARI's principal beneficial
stockholder, through Icahn Enterprises L.P, and certain of his
affiliates; the risk of being unable to market or remarket railcars
for sale or lease at favorable prices or on favorable terms or at
all; the sufficiency of our liquidity and capital resources,
including long-term capital needs to further support the growth of
our lease fleet; the impact, costs and expenses of any litigation
ARI may be subject to now or in the future; the risks associated
with the Company's on-going compliance with environmental, health,
safety, and regulatory laws and regulations, which may be subject
to change; the conversion of ARI's railcar backlog into revenues;
the risks associated with the Company's current joint ventures and
anticipated capital needs of, and production at the Company's joint
ventures; the risks, impact and anticipated benefits associated
with potential joint ventures, acquisitions or new business
endeavors; the implementation, integration with other systems or
ongoing management of the Company's new enterprise resource
planning system; risks related to our indebtedness and compliance
with covenants contained in the Company's financing arrangements;
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,
2015 |
December 31,
2014 |
|
(unaudited) |
|
Assets |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 128,983 |
$ 88,109 |
Restricted cash |
17,021 |
7,178 |
Accounts receivable, net |
39,440 |
33,618 |
Accounts receivable, due from
related parties |
14,074 |
33,027 |
Income taxes receivable |
12,091 |
33,879 |
Inventories, net |
125,773 |
117,007 |
Deferred tax assets |
7,551 |
7,688 |
Prepaid expenses and other
current assets |
6,113 |
5,353 |
Total current assets |
351,046 |
325,859 |
Property, plant and equipment, net |
171,636 |
160,787 |
Railcars on leases, net |
859,550 |
663,315 |
Deferred debt issuance costs, net |
5,135 |
2,148 |
Goodwill |
7,169 |
7,169 |
Investments in and loans to joint
ventures |
28,696 |
29,168 |
Other assets |
7,509 |
3,963 |
Total assets |
$ 1,430,741 |
$ 1,192,409 |
Liabilities and Stockholders'
Equity |
|
|
Current liabilities: |
|
|
Accounts payable |
$ 64,688 |
$ 68,789 |
Accounts payable, due to
related parties |
2,848 |
2,793 |
Accrued expenses and taxes |
25,245 |
21,931 |
Accrued compensation |
14,156 |
15,046 |
Short-term debt, including
current portion of long-term debt |
25,783 |
110,612 |
Total current liabilities |
132,720 |
219,171 |
Long-term debt, net of current portion |
582,331 |
298,342 |
Deferred tax liability |
190,374 |
168,349 |
Pension and post-retirement liabilities |
7,909 |
8,544 |
Other liabilities |
2,460 |
2,587 |
Total liabilities |
915,794 |
696,993 |
Stockholders' equity: |
|
|
Common stock, $0.01 par value, 50,000,000
shares authorized, 20,011,501 shares issued and outstanding as of
September 30, 2015 and 21,352,297 shares issued and outstanding as
of December 31, 2014 |
213 |
213 |
Additional paid-in capital |
239,609 |
239,609 |
Treasury Stock |
(51,285) |
— |
Retained earnings |
332,941 |
260,943 |
Accumulated other comprehensive loss |
(6,531) |
(5,349) |
Total stockholders' equity |
514,947 |
495,416 |
Total liabilities and
stockholders' equity |
$ 1,430,741 |
$ 1,192,409 |
|
AMERICAN RAILCAR
INDUSTRIES, INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS |
(In thousands, except per share
amounts, unaudited) |
|
|
|
|
|
|
Three Months Ended September 30, |
Nine Months Ended
September 30, |
|
2015 |
2014 |
2015 |
2014 |
Revenues: |
|
|
|
|
Manufacturing (including revenues from
affiliates of $34,510 and $217,449 for the three and nine months
ended September 30, 2015, respectively, and $62,698 and $195,068
for the same periods in 2014) |
$ 123,318 |
$ 128,270 |
$ 489,610 |
$ 488,597 |
Railcar leasing |
31,174 |
17,219 |
83,975 |
42,850 |
Railcar services (including revenues from
affiliates of $5,402 and $18,188 for the three and nine months
ended September 30, 2015, respectively, and $4,912 and $13,574 for
the same periods in 2014) |
18,175 |
17,353 |
54,856 |
51,019 |
Total revenues |
172,667 |
162,842 |
628,441 |
582,466 |
Cost of revenues: |
|
|
|
|
Manufacturing |
(91,132) |
(95,609) |
(373,380) |
(374,007) |
Railcar leasing |
(9,714) |
(6,319) |
(26,408) |
(16,192) |
Railcar services |
(14,269) |
(14,065) |
(42,851) |
(40,854) |
Total cost of revenues |
(115,115) |
(115,993) |
(442,639) |
(431,053) |
Gross profit |
57,552 |
46,849 |
185,802 |
151,413 |
Selling, general and administrative |
(7,768) |
(7,570) |
(20,764) |
(23,777) |
Net gains on disposition of leased
railcars |
— |
— |
25 |
— |
Earnings from
operations |
49,784 |
39,279 |
165,063 |
127,636 |
Interest income (including income from
related parties of $520 and $1,615 for the three and nine months
ended September 30, 2015, respectively, and $603 and $1,843 for the
same periods in 2014) |
542 |
608 |
1,655 |
1,868 |
Interest expense |
(5,645) |
(1,849) |
(16,077) |
(5,364) |
Loss on debt extinguishment |
— |
— |
(2,126) |
(1,896) |
Other Income |
3 |
63 |
14 |
95 |
Earnings (Loss) from joint ventures |
1,402 |
3 |
5,340 |
(263) |
Earnings before income
taxes |
46,086 |
38,104 |
153,869 |
122,076 |
Income tax expense |
(16,729) |
(14,280) |
(56,567) |
(45,266) |
Net
earnings |
$ 29,357 |
$ 23,824 |
$ 97,302 |
$ 76,810 |
Net earnings per common share—basic and
diluted |
$ 1.39 |
$ 1.12 |
$ 4.58 |
$ 3.60 |
|
AMERICAN RAILCAR
INDUSTRIES, INC. AND SUBSIDIARIES |
SEGMENT
DATA |
(In thousands, unaudited) |
|
|
|
|
|
|
Three Months
Ended September 30, 2015 |
|
Revenues |
|
|
External |
Intersegment |
Total |
Earnings (Loss) from
Operations |
|
(in
thousands) |
Manufacturing |
$ 123,318 |
$ 106,541 |
$ 229,859 |
$ 54,984 |
Railcar leasing |
31,174 |
(153) |
31,021 |
18,450 |
Railcar services |
18,175 |
642 |
18,817 |
3,457 |
Corporate |
— |
— |
— |
(5,095) |
Eliminations |
— |
(107,030) |
(107,030) |
(22,012) |
Total Consolidated |
$ 172,667 |
$ — |
$ 172,667 |
$ 49,784 |
|
|
|
|
|
|
Three Months
Ended September 30, 2014 |
|
Revenues |
|
|
External |
Intersegment |
Total |
Earnings (Loss) from
Operations |
|
(in
thousands) |
Manufacturing |
$ 128,270 |
$ 143,706 |
$ 271,976 |
$ 74,713 |
Railcar leasing |
17,219 |
— |
17,219 |
9,466 |
Railcar services |
17,353 |
38 |
17,391 |
2,684 |
Corporate |
— |
— |
— |
(4,925) |
Eliminations |
— |
(143,744) |
(143,744) |
(42,659) |
Total Consolidated |
$ 162,842 |
$ — |
$ 162,842 |
$ 39,279 |
|
|
|
|
|
|
Nine Months Ended
September 30, 2015 |
|
Revenues |
|
|
External |
Intersegment |
Total |
Earnings (Loss) from
Operations |
|
(in
thousands) |
Manufacturing |
$ 489,610 |
$ 313,965 |
$ 803,575 |
$ 195,363 |
Railcar leasing |
83,975 |
(153) |
83,822 |
50,190 |
Railcar services |
54,856 |
838 |
55,694 |
10,204 |
Corporate |
— |
— |
— |
(11,944) |
Eliminations |
— |
(314,650) |
(314,650) |
(78,750) |
Total Consolidated |
$ 628,441 |
$ — |
$ 628,441 |
$ 165,063 |
|
|
|
|
|
|
Nine Months Ended
September 30, 2014 |
|
Revenues |
|
|
External |
Intersegment |
Total |
Earnings (Loss) from
Operations |
|
(in
thousands) |
Manufacturing |
$ 488,597 |
$ 269,040 |
$ 757,637 |
$ 192,322 |
Railcar leasing |
42,850 |
— |
42,850 |
23,062 |
Railcar services |
51,019 |
222 |
51,241 |
8,029 |
Corporate |
— |
— |
— |
(15,702) |
Eliminations |
— |
(269,262) |
(269,262) |
(80,075) |
Total Consolidated |
$ 582,466 |
$ — |
$ 582,466 |
$ 127,636 |
|
AMERICAN RAILCAR
INDUSTRIES, INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS |
(In thousands, unaudited) |
|
|
|
|
Nine Months Ended
September 30, |
|
2015 |
2014 |
Operating activities: |
|
|
Net earnings |
$ 97,302 |
$ 76,810 |
Adjustments to reconcile net earnings to net
cash provided by operating activities: |
|
|
Depreciation |
33,185 |
24,423 |
Amortization of deferred
costs |
305 |
363 |
Loss (Gain) on disposal of
property, plant, equipment and leased railcars |
45 |
(72) |
(Earnings) Losses from joint
ventures |
(5,340) |
263 |
Provision for deferred income
taxes |
21,892 |
11,182 |
Provision for allowance for
doubtful accounts receivable |
65 |
905 |
Items related to financing
activities: |
|
|
Loss on debt
extinguishment |
2,126 |
1,896 |
Changes in operating assets and
liabilities: |
|
|
Accounts receivable, net |
(5,970) |
(7,987) |
Accounts receivable, due from
related parties |
18,856 |
(8,764) |
Income taxes receivable |
21,867 |
— |
Inventories, net |
(8,960) |
(15,235) |
Prepaid expenses and other
current assets |
(848) |
(1,734) |
Accounts payable |
(5,890) |
20,634 |
Accounts payable, due to
related parties |
55 |
1,538 |
Accrued expenses and taxes |
2,471 |
4,432 |
Other |
(3,757) |
3,007 |
Net cash provided by operating
activities |
167,404 |
111,661 |
Investing activities: |
|
|
Purchases of property, plant
and equipment |
(26,376) |
(13,701) |
Capital expenditures - leased
railcars |
(215,096) |
(187,861) |
Proceeds from the sale of
property, plant, equipment and leased railcars |
118 |
575 |
Proceeds from repayments of
loans and dividends by joint ventures |
5,750 |
2,875 |
Net cash used in investing activities |
(235,604) |
(198,112) |
Financing activities: |
|
|
Repayments of long-term
debt |
(426,150) |
(201,833) |
Proceeds from long-term
debt |
625,306 |
318,682 |
Change in interest reserve
related to long-term debt |
(9,843) |
(26) |
Stock repurchases |
(49,441) |
— |
Payment of common stock
dividends |
(25,304) |
(25,623) |
Debt issuance costs |
(5,271) |
(2,425) |
Net cash provided by financing
activities |
109,297 |
88,775 |
Effect of exchange rate changes on cash and
cash equivalents |
(223) |
(123) |
Increase in cash and cash equivalents |
40,874 |
2,201 |
Cash and cash equivalents at beginning of
period |
88,109 |
97,252 |
Cash and cash equivalents at end of
period |
$ 128,983 |
$ 99,453 |
|
AMERICAN RAILCAR
INDUSTRIES, INC. AND SUBSIDIARIES |
RECONCILIATION OF NET
EARNINGS TO EBITDA AND ADJUSTED EBITDA |
(In thousands, unaudited) |
|
|
|
|
|
|
Three
Months Ended September 30, |
Nine Months
Ended September 30, |
|
2015 |
2014 |
2015 |
2014 |
Net earnings |
$ 29,357 |
$ 23,824 |
$ 97,302 |
$ 76,810 |
Income tax expense |
16,729 |
14,280 |
56,567 |
45,266 |
Interest expense |
5,645 |
1,849 |
16,077 |
5,364 |
Loss on debt extinguishment |
— |
— |
2,126 |
1,896 |
Interest income |
(542) |
(608) |
(1,655) |
(1,868) |
Depreciation |
12,214 |
8,751 |
33,185 |
24,423 |
EBITDA |
$ 63,403 |
$ 48,096 |
$ 203,602 |
$ 151,891 |
(Income) Expense related to stock
appreciation rights compensation |
(762) |
540 |
(471) |
4,512 |
Adjusted EBITDA |
$ 62,641 |
$ 48,636 |
$ 203,131 |
$ 156,403 |
EBITDA represents net earnings before income tax expense,
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, cash flows provided by 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 share-based
compensation (income) expense 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 (income) expense associated with share-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 and certain non-recurring events. 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, cash flows provided by 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: AMERICAN RAILCAR INDUSTRIES, INC.
100 Clark Street, St. Charles, Missouri 63301
www.americanrailcar.com
636.940.6000
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