American Railcar Industries, Inc. Reports Results for the Third Quarter Ended September 30, 2009

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ST. CHARLES, Mo.--(Business Wire)--
American Railcar Industries, Inc. (ARI or the Company) (NASDAQ: ARII) today
reported its third quarter 2009 financial results.

"We shipped approximately 610 railcars in the third quarter of 2009, resulting
in EBITDA of $9.1 million and net earnings of $1.1 million," said James Cowan,
President and CEO of ARI. "As the weak economy is driving low demand for
railcars, we shipped 71% fewer railcars in the third quarter of 2009 as compared
to the same quarter of 2008. The weak railcar market has and will continue to
require us to evaluate our production levels at all manufacturing locations and
we plan to continue to adjust our workforce and production levels as needed. In
addition, we have reduced overhead costs at all manufacturing locations as a
result of reduced spending. Our railcar services segment continues to experience
strong results with revenues increasing 32% in the third quarter of 2009
compared to the same quarter of 2008. Our balance sheet continues to be strong
with $287.1 million in cash and $50.1 million in short-term investments."

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. In comparison, for the three
months ended September 30, 2008, revenues were $217.2 million and net earnings
were $7.4 million or $0.35 per share.

Revenues in the third quarter of 2009 were lower than the same period of 2008
primarily due to lower railcar shipments due to decreased demand, partially
offset by a change in product mix and an increase in revenues from the railcar
services segment. During the three months ended September 30, 2009, the Company
shipped approximately 610 railcars compared to approximately 2,120 railcars in
the same period of 2008.

EBITDA was $9.1 million in the third quarter of 2009 compared to EBITDA of $20.3
million in the third quarter of 2008. The decrease in EBITDA and net earnings
resulted primarily from decreased volume, as discussed above, and an increase in
joint venture losses, all partially offset by an increase in other income, and a
decrease in selling, administrative and other costs. Losses from joint ventures
were $2.7 million higher in the third quarter of 2009 than in the third quarter
of 2008, primarily due to temporarily idling the Company`s castings joint
venture and losses from its axle joint venture. In the third quarter of 2009,
other income was $3.1 million and related to gains on the sale of a portion of
the Company`s short-term investments during the quarter as compared to $1.8
million of other income in the third quarter of 2008 related to short-term
investment activity. Net earnings also benefited from a one-time $1.0 million
adjustment to accrued taxes due to certain tax benefits becoming recognizable
during the third quarter of 2009. A reconciliation of the Company`s net earnings
to EBITDA (a non-GAAP financial measure) is set forth in the supplemental
disclosure attached to this press release.

For the nine months ended September 30, 2009, revenues were $345.0 million and
net earnings were $5.0 million or $0.23 per share. In comparison, for the nine
months ended September 30, 2008, revenues were $605.8 million and net earnings
were $23.8 million or $1.12 per share.

Revenues were lower in the nine months ended September 30, 2009 compared to the
same period of 2008 primarily due to lower railcar shipments, partially offset
by a change in product mix and an increase in revenues from the railcar services
segment. During the nine months ended September 30, 2009, the Company shipped
approximately 3,080 railcars compared to approximately 6,100 railcars in the
same period of 2008.

EBITDA was $34.3 million in the nine months ended September 30, 2009 compared to
EBITDA of $61.9 million in the nine months ended September 30, 2008. The
decrease in EBITDA and net earnings resulted primarily from decreased volume, as
discussed above, an increase in joint venture losses and an increase in net
interest expense, all partially offset by an increase in earnings from the
railcar services segment and a decrease in selling, administrative and other
costs. Losses from joint ventures were $5.9 million higher in the nine months
ended September 30, 2009, as compared to the same period in 2008, resulting in a
decrease to earnings of $3.6 million, after-tax, or $0.17 per share. Net
interest expense increased $0.9 million, after-tax, or $0.04 per share. Net
earnings also benefited from a one-time $1.0 million adjustment to accrued taxes
due to certain tax benefits becoming recognizable during the third quarter of
2009.

As of September 30, 2009, the Company`s backlog was approximately 1,160
railcars. The backlog level has declined primarily due to weak demand for
railcars.

The CIT Group/Equipment Financing, Inc. (CIT Equipment Financing), a subsidiary
of CIT Group Inc. (CIT), is the Company`s largest customer and accounted for
approximately 39% and approximately 33% of ARI`s total consolidated revenues for
the three and nine months ended September 30, 2009, respectively, and accounted
for approximately 55% of the backlog as of September 30, 2009. CIT has announced
that it and its subsidiary, CIT Group Funding Company of Delaware LLC, filed for
bankruptcy protection on November 1, 2009 with a prepackaged plan of
reorganization. In connection with that announcement, CIT further stated that
none of its operating subsidiaries, including CIT Equipment Financing, will be
included in the bankruptcy filings, and, as a result, ARI understands that all
of its operating entities are expected to continue normal operations during the
pendency of the bankruptcy cases. ARI`s business with CIT Equipment Financing is
subject to a number of risks, including the ability to convert the backlog into
revenue as well as the risks that CIT`s prepackaged plan of reorganization may
not be successful, or that CIT Equipment Financing may not continue normal
operations or may seek to renegotiate its existing obligations through
bankruptcy protection or otherwise.

ARI will host a webcast and conference call on Thursday, November 5, 2009 at
10:00 am (Eastern Time) to discuss the Company`s third quarter 2009 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 866-578-5801 and use participant
code 92308953. 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.

About American Railcar Industries, Inc.

American Railcar Industries, Inc. is a leading North American designer and
manufacturer of hopper and tank railcars. ARI also 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 our 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 anticipated future
production rates, workforce adjustments and any implication that the Company`s
backlog may be indicative of future sales, as well as statements regarding the
potential consequences for the Company`s business and prospects as a result of
CIT`s financial difficulty and bankruptcy filing. 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 our forward-looking statements. Other potential risks and
uncertainties include, among other things: the impact of the current economic
downturn, adverse market conditions and restricted credit markets, and the
impact of the continuation of these conditions; our reliance upon a small number
of customers that represent a large percentage of our revenues and backlog; the
conversion of our railcar backlog into revenues; the material adverse effects on
the Company`s business and its ability to convert backlog into revenues that
could result if CIT`s prepackaged bankruptcy plan of reorganization is not
successful; the risk that CIT Equipment Financing may not continue normal
operations or may seek to renegotiate its existing obligations through
bankruptcy protection or otherwise; the health of and prospects for the overall
railcar industry; our prospects in light of the cyclical nature of the railcar
manufacturing business and the current economic environment; our ability to
manage overhead and production slowdowns; 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 ARI
uses in railcar manufacturing; risks associated with potential acquisitions or
joint ventures; the risk of lack of acceptance of our new railcar offerings by
our customers; the sufficiency of our liquidity and capital resources;
anticipated production schedules for our products; anticipated financing needs
and construction and production schedules of our joint ventures; the impact and
anticipated benefits of any acquisitions we may complete; the impact and costs
and expenses of any litigation we may be subject to now or in the future;
compliance with covenants contained in our unsecured senior notes; the ongoing
benefits and risks related to our relationship with Mr. Carl C. Icahn, our
principal beneficial stockholder and the chairman of our board of directors, and
certain of his affiliates; and the additional risk factors described in our
filings with the Securities and Exchange Commission. We expressly disclaim 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.

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts) As of
September 30, December 31,
2009 2008
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 287,091 $ 291,788
Short-term investments - available-for-sale securities 50,131 2,565
Accounts receivable, net 16,828 39,724
Accounts receivable, due from affiliates 2,017 10,284
Inventories, net 56,668 97,245
Prepaid expenses and other current assets 4,018 5,314
Deferred tax assets 1,925 2,297
Total current assets 418,678 449,217

Property, plant and equipment, net 203,174 206,936
Deferred debt issuance costs 2,732 3,204
Goodwill 7,169 7,169
Other assets 37 37
Investments in and loans to joint ventures 41,268 13,091
Total assets $ 673,058 $ 679,654

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 22,679 $ 42,201
Accounts payable, due to affiliates 326 5,193
Accrued expenses and taxes 5,219 7,758
Accrued compensation 8,829 10,413
Accrued interest expense 1,750 6,907
Accrued dividends - 639
Total current liabilities 38,803 73,111

Senior unsecured notes 275,000 275,000
Deferred tax liability 14,050 4,683
Pension and post-retirement liabilities 9,229 9,024
Other liabilities 1,555 3,111
Total liabilities 338,637 364,929

Commitments and contingencies - -

Stockholders' equity:
Common stock, $.01 par value, 50,000,000 shares authorized, 21,302,296 shares issued and outstanding at September 30, 2009 and December 31, 2008 213 213
Additional paid-in capital 239,617 239,617
Retained earnings 83,707 80,035
Accumulated other comprehensive income (loss) 10,884 (5,140 )
Total stockholders' equity 334,421 314,725
Total liabilities and stockholders' equity $ 673,058 $ 679,654

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts, unaudited)
For the Three Months Ended
September 30,
2009 2008

Revenues:
Manufacturing operations (including revenues from affiliates of $8,011 and $47,689 for the three months ended September 30, 2009 and 2008, respectively) $ 62,047 $ 205,107

Railcar services (including revenues from affiliates of $3,563 and $3,392 for the three months ended September 30, 2009 and 2008, respectively) 16,051 12,141
Total revenues 78,098 217,248

Cost of revenue:
Manufacturing operations (56,348 ) (187,771 )
Railcar services (12,940 ) (9,874 )
Total cost of revenue (69,288 ) (197,645 )
Gross profit 8,810 19,603

Selling, administrative and other (including costs related to affiliates of $154 and $151 for the three months ended September 30, 2009 and 2008, respectively) (6,484 ) (6,602 )
Earnings from operations 2,326 13,001

Interest income (including income related to affiliates of $366 and $8 for the three months ended September 30, 2009 and 2008, respectively) 1,925 1,693
Interest expense (5,286 ) (5,018 )
Other income (including income related to affiliates of $4 and zero for the three months ended September 30, 2009 and 2008, respectively) 3,121 1,750
(Loss) earnings from joint ventures (2,217 ) 509
(Loss) earnings before income tax expense (131 ) 11,935
Income tax benefit (expense) 1,223 (4,488 )
Net earnings available to shareholders $ 1,092 $ 7,447

Net earnings per common share - basic and diluted $ 0.05 $ 0.35
Weighted average common shares outstanding - basic and diluted 21,302 21,302

Dividends declared per common share $ - $ 0.03

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts, unaudited)
For the Nine Months Ended
September 30,
2009 2008

Revenues:
Manufacturing operations (including revenues from affiliates of $93,770 and $136,134 for the nine months ended September 30, 2009 and 2008, respectively) $ 301,325 $ 566,754

Railcar services (including revenues from affiliates of $11,548 and $11,617 for the nine months ended September 30, 2009 and 2008, respectively) 43,646 39,025
Total revenues 344,971 605,779

Cost of revenue:
Manufacturing operations (271,552 ) (511,813 )
Railcar services (35,423 ) (31,459 )
Total cost of revenue (306,975 ) (543,272 )
Gross profit 37,996 62,507

Selling, administrative and other (including costs related to affiliates of $462 and $454 for both the nine months ended September 30, 2009 and 2008, respectively) (19,158 ) (19,596 )
Earnings from operations 18,838 42,911

Interest income (including income related to affiliates of $376 and $28 for the nine months ended September 30, 2009 and 2008, respectively) 4,910 5,955
Interest expense (15,562 ) (15,109 )
Other income (including income related to affiliates of $4 and zero for the nine months ended September 30, 2009 and 2008, respectively) 3,038 3,486
(Loss) earnings from joint ventures (5,030 ) 909
Earnings before income tax expense 6,194 38,152
Income tax expense (1,244 ) (14,345 )
Net earnings available to shareholders $ 4,950 $ 23,807

Net earnings per common share - basic and diluted $ 0.23 $ 1.12
Weighted average common shares outstanding - basic and diluted 21,302 21,302

Dividends declared per common share $ 0.06 $ 0.09

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
For the Nine Months Ended
September 30,
2009 2008

Operating activities:
Net earnings $ 4,950 $ 23,807
Adjustments to reconcile net earnings to net cash (used in) provided by operating activities:
Depreciation 17,477 14,614
Amortization of deferred costs 513 609
Loss on disposal of property, plant and equipment 223 242
Stock based compensation 852 590
Income related to the reversal of stock based compensation - (411 )
Change in investments in joint ventures as a result of loss (earnings) 5,030 (909 )
Unrealized loss on derivatives 88 -
Provision for deferred income taxes 1,626 (117 )
(Recovery) provision for doubtful accounts receivable (117 ) 156
Investing activities reclassified from operating activities:
Realized loss (gain) on derivatives 10 (630 )
Realized gain on sale of short-term investments - available-for-sale securities (3,115 ) (2,589 )
Changes in operating assets and liabilities:
Accounts receivable, net 23,068 (14,268 )
Accounts receivable, due from affiliate 8,268 8,276
Inventories, net 40,638 (35,065 )
Prepaid expenses 1,211 1,059
Accounts payable (19,548 ) 21,002
Accounts payable, due to affiliate (4,867 ) 2,813
Accrued expenses and taxes (9,767 ) (4,054 )
Other (780 ) (512 )
Net cash provided by operating activities 65,760 14,613
Investing activities:
Purchases of property, plant and equipment (13,170 ) (31,155 )
Proceeds for damaged railcar prototype 69 -
Purchases of short-term investments - available-for-sale securities (36,841 ) (27,857 )
Sales of short-term investments - available-for-sale securities 15,450 23,631
Realized (loss) gain on derivatives (10 ) 630
Proceeds from repayment of note receivable from affiliate - 494
Investments in and loans to joint ventures (34,115 ) (566 )
Sale of investment in joint venture - 1,875
Net cash used in investing activities (68,617 ) (32,948 )
Financing activities:
Common stock dividends (1,917 ) (1,917 )
Finance fees related to credit facility (40 ) (40 )
Repayment of debt - (8 )
Net cash used in financing activities (1,957 ) (1,965 )
Effect of exchange rate changes on cash and cash equivalents 117 -
Decrease in cash and cash equivalents (4,697 ) (20,300 )
Cash and cash equivalents at beginning of period 291,788 303,882
Cash and cash equivalents at end of period $ 287,091 $ 283,582

RECONCILIATION OF NET EARNINGS TO EBITDA AND ADJUSTED EBITDA

(In thousands, unaudited)

Three months ended Nine months ended
September 30, September 30,
2009 2008 2009 2008

Net earnings $ 1,092 $ 7,447 $ 4,950 $ 23,807
Income tax (benefit) expense (1,223 ) 4,488 1,244 14,345
Interest expense 5,286 5,018 15,562 15,109
Interest income (1,925 ) (1,693 ) (4,910 ) (5,955 )
Depreciation 5,864 5,023 17,477 14,614
EBITDA $ 9,094 $ 20,283 $ 34,323 $ 61,920
Expense related to stock options - 100 - 9
Expense related to stock appreciation rights 1 651 95 852 170
Other income on short-term investment activity (3,115 ) (1,750 ) (3,032 ) (3,486 )
Adjusted EBITDA $ 6,630 $ 18,728 $ 32,143 $ 58,613

1 SARs are cash settled at time of exercise

EBITDA represents net earnings before income tax expense, interest expense
(income), net of 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, or 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 from operating
activities or other statements of operations or statements of cash flow data
prepared in accordance with U.S. GAAP. Our 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 expense
related to stock options and stock appreciation rights (SARs), and before gains
or losses on investments and derivative instruments. We believe that Adjusted
EBITDA is useful to investors evaluating our operating performance, and
management also uses Adjusted EBITDA for that purpose. The charges related to
our grants of stock options are non-cash charges that are excluded from our
calculation of EBITDA under our unsecured senior notes. Our SARs (which settle
in cash) are revalued each quarter based upon changes in our stock price.
Management believes that eliminating the charges associated with our share based
compensation, investments and derivates allows us and our investors to
understand better our operating results independent of financial changes caused
by the fluctuating price and value of our common stock, investments and
derivative instruments. Adjusted EBITDA is not a financial measure presented in
accordance with U.S. GAAP. Accordingly, when analyzing our operating
performance, investors should not consider Adjusted EBITDA in isolation or as a
substitute for net earnings, cash flows from operating activities or other
statements of operations or statements of cash flow data prepared in accordance
with U.S. GAAP. Our calculation of Adjusted EBITDA is not necessarily comparable
to that of other similarly titled measures reported by other companies.

American Railcar Industries, Inc.
Dale C. Davies, 636-940-6000
or
Michael Obertop, 636-940-6000

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