AMERICAN RAILCAR : Industries, Inc. Announces Plans to Invest in Railcar Leasing
12/13/2010| 08:20pm US/Eastern
American Railcar Industries, Inc. (NASDAQ: ARII) (the ?Company? or
?ARI?) announced today that it plans to invest in railcar leasing as it
seeks to expand and diversify its business in response to customer
demands and market conditions. The Company remains Agile, Responsive
and Innovative in responding to new opportunities to support its
?ARI is very excited to offer railcar leasing and provide another option
for customers to utilize our quality railcars,? said President and CEO
James Cowan. ?We remain committed to meeting the needs of our customers.
The economy and railcar market have been challenging over the last
couple of years and ARI is responding to those challenges with an
expanded market strategy.?
ARI has excellent customer relationships in the railcar industry through
sales of new railcars, railcar repair, refurbishment, and fleet
management services. Through railcar leasing, ARI intends to provide
customers with a broader offering of services.
ARI is currently in negotiations with American Railcar Leasing LLC
(?ARL?), an affiliate, to enter into an agreement pursuant to which ARL
would identify potential leasing customers for ARI in exchange for fees
payable by ARI to ARL. ARL is well-known in the railcar industry and has
long-standing relationships with customers that exclusively lease
railcars. ARL is controlled by Mr. Carl C. Icahn, the Company's
principal beneficial stockholder (through Icahn Enterprises L.P.) and
the chairman of the Company's board of directors. Any agreements with
ARL are the product of arm's length negotiations and are approved by the
independent directors of the Company's board of directors.
ARI also anticipates that the leasing business will provide a more
consistent stream of cash flows and revenue, which management expects
would diversify the Company and improve performance during the down
cycles of the railcar market. ARI currently plans to fund leasing
operations through existing cash. As of September 30, 2010, ARI reported
cash of approximately $310 million. Investing existing cash in railcars
built to order for leasing customers is expected to enhance returns.
About American Railcar Industries, Inc.
American Railcar Industries, Inc. is a leading North American
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 used in the
production of its railcars as well as railcars and non-railcar
industrial products produced by others. ARI provides its railcar
customers with integrated solutions through a comprehensive set of high
quality products and related services. ARI is controlled by Mr. Carl C.
Icahn, the chairman of ARI's board of directors, through his affiliate,
Icahn Enterprises L.P.
Forward Looking Statement Disclaimer
This press release contains statements relating to our expected
financial performance, future business prospects, events, plans,
objectives, expectations and intentions 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 the
Company's prospects, the anticipated performance of its leasing and
other railcar businesses, the anticipated market and market acceptance
for railcars built for lease, anticipated benefits of an expanded
marketing strategy and entry into a new market, anticipated customer
demands and expectations regarding ongoing and new customer
relationships, anticipated benefits from the Company's relationship with
Mr. Carl C. Icahn and ARL, any implications that the Company will be
able to enter into an agreement with ARL and, if so, the anticipated
advantages to the Company from entering into any such agreement,
expected sources of financing for the leasing business and anticipated
effects on the Company's financial results as a result of utilizing
existing cash to fund the leasing business. These forward-looking
statements are subject to known and unknown risks and uncertainties that
could cause actual results to differ materially from those anticipated.
The Company's entry into a new business and market involves numerous
risks and uncertainties, including without limitation, difficulties
associated with pricing, delays, unexpected costs, credit risk and
integrating the Company's new business with its existing businesses.
Other potential risks and uncertainties relating to ARI's business are
described in ARI's filings with the Securities and Exchange Commission.
ARI 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.
Dale C. Davies, 636-940-6000
© Business Wire 2010