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Rail News: Financials

ARI overcomes production shutdown, sets earnings and backlog records in third quarter


Despite a lingering shutdown at a Marmaduke, Ark., tank-car plant that was heavily damaged by an April tornado, American Railcar Industries Inc. (ARI) increased earnings and set a backlog record in the third quarter. On Sept. 30, the car builder’s backlog reached an all-time-high 18,144 cars; on June 30, the backlog stood at 12,790 cars.

Quarterly net earnings more than tripled to $11 million compared with similar 2005 data. The earnings include a pre-tax gain of $4.3 million for replacing the plant’s damaged and destroyed assets, and a $5 million insurance payment for lost profits.

“The company had a very strong quarter, even though our … plant was shut down until Aug. 7,” said ARI President and Chief Executive Officer James Unger in a prepared statement. “Since the plant re-opened, we saw tank-car production steadily increase and reach capacity rates by the end of September.”

During the quarter, ARI delivered 1,546 cars (1,309 covered hoppers, 236 tank cars and one intermodal car) compared with 1,635 cars (1,107 covered hoppers and 528 tank cars) in third-quarter 2005. Although the company delivered 331 fewer tank cars than planned because of the plant closure, quarterly revenue was flat at $150.5 million.

During 2006’s first nine months, ARI’s revenue totaled $480.7 million, a 9 percent increase compared with similar 2005 data. ARI delivered 815 fewer tank cars than planned, but registered growth in covered hopper demand and rail-car services business. Net earnings skyrocketed to $28.5 million compared with $3.4 million earned during 2005’s first nine months.