American Railcar Industries, Inc. (NASDAQ:ARII) (“ARI” or the
“Company”) is excited to announce that it has begun managing its
railcar leasing business in-house. The sale of its former lease
fleet manager, American Railcar Leasing LLC (ARL), to SMBC Rail
Services LLC was completed on June 1, 2017. ARI will now be able to
serve its customers with a complete suite of products and services,
including ARI-built railcars for direct sale and lease, in-house
lease fleet management, railcar and industrial components, and
railcar repair services.
In planning for this endeavor, ARI has increased
its workforce, including by adding staffing to internally manage
its own lease fleet and increasing its sales and marketing staff.
ARI promoted internal ARI resources, recruited talent from external
companies with important rail experience, and hired certain key ARL
sales and lease personnel including John O’Bryan as Chief
Commercial Officer to lead the team. The Company expects to
continue to build out its lease management, sales and marketing
team.
Over the past several years, ARI has grown its
lease fleet to more than 12,000 railcars. ARI’s commitment to
building its leasing business is strong and will continue in the
future. In the first quarter of 2017, more than half of ARI’s
railcar production and shipments were for lease. Furthermore, ARI’s
order backlog of railcars as of March 31, 2017, included 1,199
railcars to be added to the lease fleet in 2017 and beyond.
“We want everyone to know that ‘it’s all
here’ at ARI, and we are excited by this opportunity to
further enhance our capabilities,” said Jeff Hollister, President
and CEO of ARI. “The addition of in-house lease fleet management
staff and an increase in our sales force will help to further
enhance ARI’s business model of offering solutions to our customers
of railcar products and services over the entire railcar life
cycle. This will provide us additional flexibility and more tools
that we expect will help us continue to grow our business. ”
ARI’s heritage covers many years with leadership
in all aspects of railcar manufacturing, innovation, creative
leasing solutions, and railcar repair services. “It’s all here”
highlights ARI’s ability to provide railcar solutions for all of
our customers’ needs.
“We are excited to focus on providing a seamless
relationship between ARI and our customers,” said Mr. Hollister.
“These events give us an opportunity to better understand our
customer’s needs and build deeper relationships. As always, our
goal is to listen to our customers, develop solutions to meet their
requirements, and deliver high-quality products and services.”
About American Railcar Industries,
Inc.
ARI is a prominent 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 and its
subsidiaries provide 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 americanrailcar.com or call the Investor Relations Department,
636.940.6000.
Forward Looking Statement Disclaimer
This press release contains statements relating
to the Company's objectives, long-term strategies 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: transitioning management of our lease fleet from ARL to
in-house, our anticipated lease fleet management capabilities,
anticipated benefits regarding the growth of our leasing business
and our management and sales teams, expected future trends relating
to our industry, products and markets, anticipated customer demand
for our products and services, trends relating to our shipments,
leasing business, railcar services, revenues, profit margin,
capacity, financial condition, and results of operations, our
backlog and any implication that our backlog may be indicative of
our future revenues, and our strategic objectives and long-term
strategies. These forward-looking statements are subject to known
and unknown risks and uncertainties that could cause actual results
to differ materially from those anticipated. Investors should not
place undue reliance on forward-looking statements, which speak
only as of the date they are made and are not guarantees of future
performance. Potential risks and uncertainties that could
adversely affect our business and prospects include without
limitation: our prospects in light of the cyclical nature of our
business; the health of and prospects for the overall railcar
industry; risks relating to transitioning management of our lease
fleet from ARL to in-house and the termination of our remaining
arrangements with ARL, including the ongoing railcar management
agreement pursuant to which ARL remains manager of the railcars
held by our subsidiary, Longtrain Leasing III, LLC (LL III), with
respect to which we will, in order for ARI to replace ARL as
manager of such railcars, require the consent of certain
noteholders under an indenture pursuant to which LL III has issued
debt (ARI has no obligation to pay any consent or similar fees in
connection with obtaining such noteholder consent); risks relating
to the subcontractor arrangement we have entered into with ARL for
ARI to provide services to ARL covering the day-to-day management
of the LL III railcars; risks related to our and our subsidiaries’
indebtedness and compliance with covenants contained in our and our
subsidiaries’ financing arrangements, including the LL III
indenture; our compliance with the FRA directive applicable to our
railcars, any developments related to the directive and any costs
or loss of revenue related thereto; risks relating to successfully
transitioning the management of our railcar leasing business
in-house and managing our lease fleet; the risk of being unable to
market or remarket railcars for sale or lease at favorable prices
or on favorable terms or at all; fluctuations in commodity prices,
including oil and gas; the impact, costs and expenses of any
warranty claims we may be subject to now or in the future; the
highly competitive nature of the manufacturing, railcar leasing and
railcar services industries; the variable purchase patterns of our
railcar customers and the timing of completion, customer acceptance
and shipment of orders, as well as the mix of railcars for lease
versus direct sale; risks relating to our compliance with, and the
overall railcar industry's implementation of, United States and
Canadian regulations related to the transportation of flammable
liquids by rail; our ability to manage overhead and variations in
production rates; our ability to recruit, retain and train
qualified personnel; the impact of any economic downturn, adverse
market conditions or restricted credit markets; our reliance upon a
small number of customers that represent a large percentage of our
revenues and backlog; fluctuations in the 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 we use in railcar manufacturing; the
ongoing risks related to our relationship with Mr. Carl Icahn, our
principal beneficial stockholder through Icahn Enterprises L.P.
(IELP), and certain of his affiliates; the risks associated with
ongoing compliance with environmental, health, safety, and
regulatory laws and regulations, which may be subject to change;
the impact, costs and expenses of any litigation we may be subject
to now or in the future; the sufficiency of our liquidity and
capital resources, including long-term capital needs to support the
growth of our lease fleet; the impact of repurchases pursuant to
our Stock Repurchase Program on our current liquidity and the
ownership percentage of our principal beneficial stockholder
through IELP, Mr. Carl Icahn; the risks associated with our current
joint ventures and anticipated capital needs of, and production
capabilities at our joint ventures; the conversion of our railcar
backlog into revenues equal to our reported estimated backlog
value; the risks and impact associated with any potential joint
ventures, acquisitions, strategic opportunities, dispositions or
new business endeavors; the integration with other systems and
ongoing management of our new enterprise resource planning system;
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.
100 Clark Street, St. Charles Missouri 63301
americanrailcar.com
636.940.6000
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