Second Quarter 2013 Highlights
- Record consolidated operating margins of
25%
- Consolidated earnings from operations of $39.9
million
- Consolidated Revenues totaled $159.4
million
- Adjusted EBITDA of $43.0 million
- Net earnings of $23.6 million, or $1.11 per
share
American Railcar Industries, Inc. (ARI or the Company)
(Nasdaq:ARII) today reported its second quarter 2013 financial
results. "We are pleased with a quarter of strong earnings from
operations and record operating margins, driven by a favorable
sales mix of more tank railcars. The strong tank railcar mix
generated operational leverage and efficiencies that were partially
offset by lower shipments of hopper railcars. During the quarter,
we received orders for 1,850 railcars, resulting in a backlog of
6,940 railcars as of June 30, 2013," said James Cowan, President
and CEO of ARI.
Second Quarter Summary
Total consolidated revenues were $159.4 million for the second
quarter of 2013, up 3% when compared to $154.2 million for the same
period in 2012. Revenues increased primarily due to an increase in
revenues for the leasing business and an increase in railcar
services' revenues partially offset by lower manufacturing
revenues.
Total manufacturing segment revenues were $177.3 million for the
second quarter of 2013, a decrease of 19% over the $219.3 million
for the same period in 2012. The primary reason for the decrease
was lower hopper railcar shipments, partially offset by an increase
in tank railcar shipments and improved general market conditions
for tank railcars. Manufacturing segment revenues for the second
quarter of 2013 included estimated revenues of $45.1 million
related to railcars built for the Company's lease fleet, compared
to estimated revenues of $84.5 million related to railcars built
for the Company's lease fleet in the second quarter of 2012. 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
eliminated in consolidation. Revenues for railcars built for the
Company's lease fleet are not recognized in consolidated revenues
as railcar sales, but rather as lease revenues in accordance with
the terms of the contract over the life of the lease. Railcars
built for the lease fleet represented approximately 30% of ARI's
railcar shipments during the second quarter of 2013 compared to
approximately 40% for the same period in 2012.
Total leasing segment revenues were $7.5 million for the second
quarter of 2013, an increase of $4.8 million over the $2.7 million
for the same period in 2012. The primary reason for the increase in
revenue was an increase in the number of railcars on lease and an
increase in the average lease rate. We had approximately 3,500
railcars in the Company's lease fleet at the end of the second
quarter of 2013, compared to approximately 1,870 railcars at the
end of the same period in 2012.
Total railcar services segment revenues were $19.7 million for
the second quarter of 2013, an increase of $2.7 million over the
$17.0 million for the same period in 2012. The increase is largely
attributed to certain repair projects being performed at our hopper
railcar manufacturing facility during 2013.
Consolidated earnings from operations for the second quarter of
2013 were $39.9 million, an increase of 54% over the $26.0 million
for the same period in 2012. Operating margins were 25% for the
second quarter of 2013 compared to 17% for the comparable quarter
of 2012. The increase in consolidated earnings was primarily due to
an increase in the Company's manufacturing and leasing earnings
from operations and a decrease in the Company's selling, general
and administrative expenses, driven by a decrease in our
share-based compensation expense. The Company's share-based
compensation fluctuates with our stock price. In the second quarter
of 2013, our stock price decreased approximately $13 per share
(after an increase of $15 per share in the first quarter) compared
to an increase of approximately $4 per share during the second
quarter of 2012.
Manufacturing earnings from operations were $42.9 million for
the second quarter of 2013 compared to $40.7 million for the same
period in 2012. This increase was due primarily to a higher mix of
tank railcars as well as operating leverage achieved as a result of
strong tank railcar production volumes, partially offset by lower
hopper railcar shipments. The Company also continued to benefit
from cost savings achieved by the vertical integration projects put
in place over the past several years. Manufacturing earnings from
operations for the second quarter of 2013 included $10.1 million of
estimated profit on railcars built for the Company's lease fleet
compared to $14.3 million for the same period in 2012, which is
eliminated in consolidation and 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.
EBITDA, adjusted to exclude share-based compensation and other
income on short term investments (Adjusted EBITDA), was $43.0
million for the second quarter of 2013 compared to $34.4 million
for the comparable quarter of 2012. The increase resulted primarily
from increased earnings from operations, partially offset by losses
incurred by the Company's joint ventures. The joint venture loss is
largely due to softer railcar demand for railcar types other than
tank railcars, which adversely impacted demand for the Company's
domestic joint venture products, and increased costs related to the
start up of operations for our Indian joint venture. 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.
Interest expense was $1.3 million for the second quarter of 2013
compared to $5.1 million in the same period in 2012. The decrease
was the result of a more favorable rate obtained on the Company's
lease fleet financing and lower average debt balance as a result of
the Company's early redemption of its 7.5% senior unsecured
notes.
Net earnings for the second quarter of 2013 were $23.6 million,
or $1.11 per share, compared to $13.4 million, or $0.63 per share,
for the comparable quarter of 2012. The increase in earnings was a
result of strong manufacturing and leasing earnings, lower selling,
general and administrative expenses and lower interest expense, as
discussed above.
Year-to-Date Results
Consolidated revenues for the first six months of 2013 were
$354.5 million compared to $335.8 million for the comparable period
in 2012. The Company shipped approximately 3,210 railcars,
including approximately 910 railcars to leasing customers, during
the first half of 2013, which was 27% lower than the approximately
4,410 railcars shipped during the same period of 2012, of which
1,380 were to leasing customers.
Total manufacturing segment revenues were $405.7 million for the
first six months of 2013 compared to $431.2 million for the
comparable period in 2012. Manufacturing segment revenues for the
first six months of 2013 included estimated revenues of $100.5
million relating to railcars built for the lease fleet, compared to
estimated revenues of $132.1 million relating to railcars built for
the lease fleet in the comparable period in 2012. 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 eliminated in
consolidation. Revenues for railcars built for the Company's lease
fleet are not recognized in consolidated revenues as railcar sales,
but rather are recognized as lease revenues in accordance with the
terms of the contract over the life of the lease. Railcars built
for the lease fleet represented approximately 30% of ARI's railcar
shipments in the first six months of 2013 and 2012.
Consolidated earnings from operations for the first six months
of 2013 were $71.1 million, up 43% from $49.8 million for the
comparable period in 2012. Consolidated earnings from operations
for the first six months of 2013 and 2012 excluded $19.9 million
and $23.3 million, respectively, of profit on railcars built for
the lease fleet that is eliminated in consolidation and 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. Operating
margins were 20% for the first six months of 2013 compared to 15%
for the comparable period of 2012.
The Company recorded a loss from joint ventures of $1.8 million
for the first six months of 2013 compared to income of $0.9 million
for the comparable period in 2012.
Adjusted EBITDA was $85.8 million for the first six months of
2013, up by $21.0 million from $64.8 million for the comparable
period in 2012.
Net earnings for the first six months of 2013 were $41.6
million, or $1.95 per share, compared to $25.4 million, or $1.19
per share, for the comparable period in 2012.
Cash Flow and Liquidity
The Company's strong earnings have contributed to cash flow from
operations in the first six months of 2013 of $54.6 million. As a
result of continued growth of the Company's lease fleet and
redemption of the remaining $175 million of senior unsecured notes
during the first quarter of 2013, partially offset by borrowings
under the lease fleet financing, the Company's cash balance was
$93.6 million at June 30, 2013.
At the board meeting in July, the Company's board of directors
declared a cash dividend of $0.25 per share of common stock of the
Company to shareholders of record as of September 20, 2013 that
will be paid on September 27, 2013.
Backlog
ARI's backlog as of June 30, 2013 was approximately 6,940
railcars, with an estimated market value of $889.3 million. This
backlog includes approximately 2,620 railcars for lease with an
estimated market value of $357.2 million. ARI had approximately
7,060 railcars in its backlog with an estimated market value of
$889.8 million as of December 31, 2012, including approximately
1,810 railcars for lease with an estimated market value of $227.0
million.
Conference Call and Webcast
ARI will host a webcast and conference call on Thursday, July
25, 2013 at 10:00 am (Eastern Time) to discuss the Company's second
quarter 2013 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 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 and its subsidiaries sell and lease
railcars manufactured by the Company to certain markets. In
addition, ARI 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. More information about American
Railcar Industries, Inc. is available on its website at
www.americanrailcar.com.
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 industry trends, customer
demand for the Company's products, the Company's strategic
objectives and long-term strategies, the growth of the Company's
leasing business, anticipated future production rates, the
Company's plans regarding future dividends, the Company's joint
ventures, 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: basing financial or other information
on judgments or estimates based on future performance or events;
the impact of an economic downturn, adverse market conditions and
restricted credit markets; ARI's reliance upon a small number of
customers that represent a large percentage of revenues and
backlog; the health of and prospects for the overall railcar
industry; prospects in light of the cyclical nature of the railcar
manufacturing business; the highly competitive nature of the
railcar manufacturing industry; the conversion of ARI's railcar
backlog into revenues; anticipated trends relating to shipments,
leasing, railcar services, revenues, financial condition or results
of operations; the Company's ability to manage overhead and
variations in production rates; 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 risk of being unable to market or remarket
railcars for sale or lease at favorable prices or on favorable
terms or at all; the ongoing benefits and risks related to the
Company's relationship with Mr. Carl Icahn (the chairman of the
Company's board of directors and, through his holdings of Icahn
Enterprises L.P., the Company's principal beneficial stockholder)
and certain of his affiliates; the anticipated production schedules
for our products and the anticipated financing needs, construction
and production schedules of our joint ventures; the risks, impact
and anticipated benefits associated with potential joint ventures,
acquisitions or new business endeavors; the risks associated with
international operations and joint ventures; the implementation,
integration with other systems or ongoing management of the
Company's new enterprise resource planning system; the risk of the
lack of acceptance of new railcar offerings by ARI's customers and
the risk of initial production costs for the Company's new railcar
offerings being significantly higher than expected; the sufficiency
of the Company's liquidity and capital resources; compliance with
covenants contained in the Company's financing arrangements; the
impact and costs and expenses of any litigation ARI may be subject
to now or in the future; 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) |
| |
| |
June 30,
2013 |
December 31,
2012 |
| |
(unaudited) |
|
| Assets |
|
|
| Current assets: |
|
|
| Cash and cash equivalents |
$93,585 |
$205,045 |
| Short-term investments—available for sale
securities |
— |
12,557 |
| Accounts receivable, net |
38,164 |
36,100 |
| Accounts receivable, due from related
parties |
5,583 |
3,539 |
| Inventories, net |
92,988 |
110,075 |
| Deferred tax assets |
10,397 |
4,114 |
| Prepaid expenses and other current
assets |
5,123 |
3,917 |
| Total current assets |
245,840 |
375,347 |
| Property, plant and equipment, net |
157,328 |
155,893 |
| Railcars on operating lease, net |
296,744 |
220,282 |
| Deferred debt issuance costs |
2,124 |
2,374 |
| Goodwill |
7,169 |
7,169 |
| Investments in and loans to joint
ventures |
41,534 |
44,536 |
| Other assets |
7,934 |
4,157 |
| Total assets |
$758,673 |
$809,758 |
| Liabilities and Stockholders'
Equity |
|
|
| Current liabilities: |
|
|
| Accounts payable |
$42,760 |
$64,971 |
| Accounts payable, due to related
parties |
524 |
2,831 |
| Accrued taxes |
5,212 |
2,693 |
| Accrued expenses |
6,655 |
5,739 |
| Accrued compensation |
13,910 |
17,940 |
| Accrued interest expense |
286 |
4,465 |
| Short-term debt, including current
portion of long-term debt |
6,618 |
2,755 |
| Total current liabilities |
75,965 |
101,394 |
| Long-term debt, net of current portion |
191,458 |
272,245 |
| Deferred tax liability |
78,485 |
53,466 |
| Pension and post-retirement liabilities |
9,104 |
9,518 |
| Other liabilities |
5,093 |
3,670 |
| Total liabilities |
360,105 |
440,293 |
| Commitments and contingencies |
|
|
| Stockholders' equity: |
|
|
| Common stock, $0.01 par value, 50,000,000
shares authorized, 21,352,297 shares issued and outstanding as of
both June 30, 2013 and December 31, 2012 |
213 |
213 |
| Additional paid-in capital |
239,609 |
239,609 |
| Retained earnings |
160,910 |
130,030 |
| Accumulated other comprehensive loss |
(2,164) |
(387) |
| Total stockholders' equity |
398,568 |
369,465 |
| Total liabilities and stockholders'
equity |
$758,673 |
$809,758 |
| |
| |
| AMERICAN RAILCAR
INDUSTRIES, INC. AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS |
| (In thousands, except per share
amounts, unaudited) |
| |
| |
Three Months
Ended June 30, |
Six Months
Ended June 30, |
| |
2013 |
2012 |
2013 |
2012 |
| Revenues: |
|
|
|
|
| Manufacturing (including revenues from
affiliates of $19,904 and $82,982 for the three and six months
ended June 30, 2013, respectively, and $10,897 for both of the same
periods in 2012) |
$132,242 |
$134,748 |
$305,217 |
$299,061 |
| Railcar leasing |
7,527 |
2,668 |
14,070 |
4,048 |
| Railcar services (including revenues from
affiliates of $4,546 and $9,154 for the three and six months ended
June 30, 2013, respectively, and $5,832 and $11,003 for the same
periods in 2012) |
19,635 |
16,798 |
35,227 |
32,704 |
| Total revenues |
159,404 |
154,214 |
354,514 |
335,813 |
| Cost of revenues: |
|
|
|
|
| Manufacturing |
(97,709) |
(106,449) |
(234,832) |
(244,010) |
| Railcar leasing |
(3,301) |
(1,601) |
(6,205) |
(2,342) |
| Railcar services |
(14,860) |
(12,740) |
(27,449) |
(25,668) |
| Total cost of revenues |
(115,870) |
(120,790) |
(268,486) |
(272,020) |
| Gross profit |
43,534 |
33,424 |
86,028 |
63,793 |
| Selling, general and administrative
(including costs to a related party of $216 and $596 for the three
and six months ended June 30, 2013, respectively, and $149 and $295
for the same periods in 2012) |
(3,665) |
(7,464) |
(14,930) |
(14,028) |
| Earnings from operations |
39,869 |
25,960 |
71,098 |
49,765 |
| Interest income (including income from
related parties of $676 and $1,357 for the three and six months
ended June 30, 2013, respectively, and $729 and $1,474 for the same
periods in 2012) |
679 |
769 |
1,370 |
1,547 |
| Interest expense |
(1,341) |
(5,090) |
(4,341) |
(10,216) |
| Loss on debt extinguishment |
— |
— |
(392) |
— |
| Other income (including income from a related
party of $5 and $9 for the three and six months ended June 30,
2013, respectively, and $3 and $6 for the same periods in
2012) |
12 |
16 |
2,008 |
19 |
| Earnings (loss) from joint ventures |
(804) |
466 |
(1,777) |
880 |
| Earnings before income taxes |
38,415 |
22,121 |
67,966 |
41,995 |
| Income tax expense |
(14,796) |
(8,760) |
(26,410) |
(16,630) |
| Net earnings |
$23,619 |
$13,361 |
$41,556 |
$25,365 |
| Net earnings per common share—basic and
diluted |
$1.11 |
$0.63 |
$1.95 |
$1.19 |
| Weighted average common shares
outstanding—basic and diluted |
21,352 |
21,352 |
21,352 |
21,352 |
| Cash dividends declared per common share |
$0.25 |
$— |
$0.50 |
$— |
| |
| |
| AMERICAN RAILCAR
INDUSTRIES, INC. AND SUBSIDIARIES |
| SEGMENT
DATA |
| (In thousands, unaudited) |
| |
| |
Revenues |
Earnings (Loss)
from Operations |
| |
External |
Intersegment |
Total |
External |
Intersegment |
Total |
| Three Months Ended June 30,
2013 |
|
|
|
|
|
|
| Manufacturing |
$132,242 |
$45,083 |
$177,325 |
$32,780 |
$10,126 |
$42,906 |
| Railcar Leasing |
7,527 |
— |
7,527 |
3,645 |
8 |
3,653 |
| Railcar Services |
19,635 |
46 |
19,681 |
4,083 |
(41) |
4,042 |
| Corporate/Eliminations |
— |
(45,129) |
(45,129) |
(639) |
(10,093) |
(10,732) |
| Total Consolidated |
$159,404 |
$— |
$159,404 |
$39,869 |
$— |
$39,869 |
| Three Months Ended June 30,
2012 |
|
|
|
|
|
|
| Manufacturing |
$134,748 |
$84,540 |
$219,288 |
$26,334 |
$14,346 |
$40,680 |
| Railcar Leasing |
2,668 |
— |
2,668 |
1,021 |
7 |
1,028 |
| Railcar Services |
16,798 |
191 |
16,989 |
3,396 |
(44) |
3,352 |
| Corporate/Eliminations |
— |
(84,731) |
(84,731) |
(4,791) |
(14,309) |
(19,100) |
| Total Consolidated |
$154,214 |
$— |
$154,214 |
$25,960 |
$— |
$25,960 |
| Six Months Ended June 30,
2013 |
|
|
|
|
|
|
| Manufacturing |
$305,217 |
$100,491 |
$405,708 |
$66,759 |
$19,908 |
$86,667 |
| Railcar Leasing |
14,070 |
— |
14,070 |
5,808 |
12 |
5,820 |
| Railcar Services |
35,227 |
95 |
35,322 |
6,388 |
2 |
6,390 |
| Corporate/Eliminations |
— |
(100,586) |
(100,586) |
(7,857) |
(19,922) |
(27,779) |
| Total Consolidated |
$354,514 |
— |
$354,514 |
$71,098 |
— |
$71,098 |
| Six Months Ended June 30,
2012 |
|
|
|
|
|
|
| Manufacturing |
$299,061 |
$132,089 |
$431,150 |
$51,486 |
$23,268 |
$74,754 |
| Railcar Leasing |
4,048 |
— |
4,048 |
1,617 |
13 |
1,630 |
| Railcar Services |
32,704 |
220 |
32,924 |
5,739 |
(50) |
5,689 |
| Corporate/Eliminations |
— |
(132,309) |
(132,309) |
(9,077) |
(23,231) |
(32,308) |
| Total Consolidated |
$335,813 |
— |
$335,813 |
$49,765 |
— |
$49,765 |
| |
| |
| AMERICAN RAILCAR
INDUSTRIES, INC. AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS |
| (In thousands, unaudited) |
| |
| |
Six Months Ended
June 30, |
| |
2013 |
2012 |
| Operating activities: |
|
|
| Net earnings |
$41,556 |
$25,365 |
| Adjustments to reconcile net earnings to net
cash provided by operating activities: |
|
|
| Depreciation |
13,395 |
11,286 |
| Amortization of deferred costs |
313 |
349 |
| Loss (Gain) on disposal of property,
plant and equipment |
47 |
(51) |
| Share-based compensation |
3,075 |
2,813 |
| Change in interest receivable, due from
related parties |
— |
292 |
| (Earnings) loss from joint ventures |
1,777 |
(880) |
| Provision for deferred income taxes |
19,297 |
15,948 |
| Adjustment to provision for losses on
accounts receivable |
(6) |
279 |
| Items related to investing
activities: |
|
|
| Realized gain on sale of short-term
investments - available for sale securities |
(2,008) |
— |
| Items related to financing
activities: |
|
|
| Loss on debt extinguishment |
392 |
— |
| Changes in operating assets and
liabilities: |
|
|
| Accounts receivable, net |
(2,087) |
13,355 |
| Accounts receivable, due from related
parties |
(2,065) |
(7,216) |
| Income taxes receivable |
(64) |
(966) |
| Inventories, net |
17,034 |
(14,351) |
| Prepaid expenses and other current
assets |
(1,208) |
(1,072) |
| Accounts payable |
(22,200) |
13,319 |
| Accounts payable, due to affiliates |
(2,307) |
200 |
| Accrued expenses and taxes |
(8,612) |
2,920 |
| Other |
(1,738) |
(189) |
| Net cash provided by operating
activities |
54,591 |
61,109 |
| Investing activities: |
|
|
| Purchases of property, plant and
equipment |
(10,927) |
(5,343) |
| Capital expenditures - leased
railcars |
(80,877) |
(113,513) |
| Proceeds from the sale of property, plant
and equipment |
2 |
148 |
| Purchase of short-term investments -
available for sale securities |
— |
— |
| Proceeds from the sale of short-term
investments - available for sale securities |
12,699 |
— |
| Proceeds from repayments of loans by
joint ventures |
1,300 |
164 |
| Investments in and loans to joint
ventures |
(116) |
(366) |
| Net cash used in investing activities |
(77,919) |
(118,910) |
| Financing activities: |
|
|
| Repayments of long-term debt |
(176,765) |
— |
| Premium on debt redemption |
— |
— |
| Proceeds from long-term debt |
99,841 |
— |
| Payment of common stock dividends |
(10,676) |
— |
| Debt issuance costs |
(413) |
— |
| Net cash used in financing activities |
(88,013) |
— |
| Effect of exchange rate changes on cash and
cash equivalents |
(119) |
(12) |
| Decrease in cash and cash equivalents |
(111,460) |
(57,521) |
| Cash and cash equivalents at beginning of
period |
205,045 |
307,172 |
| Cash and cash equivalents at end of
period |
$93,585 |
$249,651 |
| |
| |
| AMERICAN RAILCAR
INDUSTRIES, INC. AND SUBSIDIARIES |
| RECONCILIATION OF NET
EARNINGS TO EBITDA AND ADJUSTED EBITDA |
| (In thousands, unaudited) |
| |
| |
Three Months
Ended June 30, |
Six Months
Ended June 30, |
| |
2013 |
2012 |
2013 |
2012 |
| Net earnings |
$23,619 |
$13,361 |
$41,556 |
$25,365 |
| Income tax expense |
14,796 |
8,760 |
26,410 |
16,630 |
| Interest expense |
1,341 |
5,090 |
4,341 |
10,216 |
| Loss on debt extinguishment |
— |
— |
392 |
— |
| Interest income |
(679) |
(769) |
(1,370) |
(1,547) |
| Depreciation |
6,860 |
5,884 |
13,395 |
11,286 |
| EBITDA |
$45,937 |
$32,326 |
$84,724 |
$61,950 |
| Other income related to short-term
investments |
— |
— |
(2,008) |
— |
| Stock appreciation rights compensation
(income) expense |
(2,933) |
2,117 |
3,075 |
2,813 |
| Adjusted EBITDA |
$43,004 |
$34,443 |
$85,791 |
$64,763 |
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 stock appreciation
rights (SARs) compensation (income) expense and other income
related to our short-term investments. 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 expense (income)
associated with share-based compensation and income associated with
short-term investments 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 short-term investments. 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 (used in) 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: Dale C. Davies
Michael Obertop
636.940.6000
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