American Railcar Industries Inc. (ARII, Financial) filed Quarterly Report for the period ended 2009-09-30.
American Railcar Industries Inc. is a leading North American manufacturer of covered hopper and tank railcars. ARI also repairs and refurbishes railcars provides fleet management services and designs and manufactures railcar and industrial components used in the production of its railcars as well as railcars and non-railcar industrial products produced by others. American Railcar Industries Inc. has a market cap of $227 million; its shares were traded at around $10.66 with a P/E ratio of 12.9 and P/S ratio of 0.3.
Net interest expense for the three months ended September 30, 2009 was $3.4 million, representing $5.3 million of interest expense and $1.9 million of interest income, compared to $3.3 million of net interest expense for the three months ended September 30, 2008, representing $5.0 million of interest expense and $1.7 million of interest income.
Net interest expense for the nine months ended September 30, 2009 was $10.7 million, representing $15.6 million of interest expense and $4.9 million of interest income, as compared to $9.1 million of net interest expense for the nine months ended September 30, 2008, representing $15.1 million of interest expense and $6.0 million of interest income.
Effective August 5, 2009, we and the other initial partner in the Axis joint venture each acquired a 50.0% interest in a loan due from Axis under its credit agreement. The purchase price we paid for our 50.0% interest was approximately $29.5 million, which equaled the then outstanding principal amount of the portion of the loan we acquired. The total commitment under the term loan is up to $70.0 million, consisting of up to $60.0 million under the term loan and $10.0 million under the revolving loan, of which we are responsible to fund 50.0%. The balance outstanding on these loans, due to us, was $30.3 million of principal and $0.4 million of accrued interest at September 30, 2009. This loan is described in further detail in Note 9 of our condensed consolidated financial statements.
During the first quarter of 2009, Longtrain purchased corporate bonds that mature in 2015 for a total of $36.8 million. In the third quarter of 2009, we sold $20.0 million, par value, of our investment in these bonds resulting in realized gains of $3.1 million. As of September 30, 2009, the investment value of the remaining bonds was $45.7 million resulting in an unrealized gain of $21.3 million that was recognized as accumulated other comprehensive income within stockholders equity, net of deferred taxes. The investment in corporate bonds is high risk. These bonds return a high yield in exchange for a higher risk.
Our net cash provided by operating activities for the nine months ended September 30, 2009 was $65.8 million. Net earnings of $5.0 million were impacted by non-cash items including but not limited to: depreciation expense of $17.5 million, joint venture losses of $5.0 million, deferred tax expense of $1.6 million and other smaller adjustments. Cash provided by operating activities attributable to changes in our current assets and current liabilities included a decrease in total accounts receivable, including from affiliates of $31.3 million and a decrease in inventory of $40.6 million. Cash used in operating activities attributable to changes in our current assets and liabilities included a decrease in total accounts payable, including to affiliates of $24.4 million and a decrease in accrued expenses and taxes of $9.8 million.
Read the The complete ReportARII is in the portfolios of Ron Baron of Baron Funds.
American Railcar Industries Inc. is a leading North American manufacturer of covered hopper and tank railcars. ARI also repairs and refurbishes railcars provides fleet management services and designs and manufactures railcar and industrial components used in the production of its railcars as well as railcars and non-railcar industrial products produced by others. American Railcar Industries Inc. has a market cap of $227 million; its shares were traded at around $10.66 with a P/E ratio of 12.9 and P/S ratio of 0.3.
Highlight of Business Operations:
Our total selling, administrative and other expenses decreased to $6.5 million for the third quarter of 2009, compared to $6.6 million for the third quarter of 2008. The decrease of $0.1 million was primarily attributable to a decrease of $0.4 million due to cost control measures partially offset by a stock-based compensation expense increase of $0.3 million as described below.Net interest expense for the three months ended September 30, 2009 was $3.4 million, representing $5.3 million of interest expense and $1.9 million of interest income, compared to $3.3 million of net interest expense for the three months ended September 30, 2008, representing $5.0 million of interest expense and $1.7 million of interest income.
Net interest expense for the nine months ended September 30, 2009 was $10.7 million, representing $15.6 million of interest expense and $4.9 million of interest income, as compared to $9.1 million of net interest expense for the nine months ended September 30, 2008, representing $15.1 million of interest expense and $6.0 million of interest income.
Effective August 5, 2009, we and the other initial partner in the Axis joint venture each acquired a 50.0% interest in a loan due from Axis under its credit agreement. The purchase price we paid for our 50.0% interest was approximately $29.5 million, which equaled the then outstanding principal amount of the portion of the loan we acquired. The total commitment under the term loan is up to $70.0 million, consisting of up to $60.0 million under the term loan and $10.0 million under the revolving loan, of which we are responsible to fund 50.0%. The balance outstanding on these loans, due to us, was $30.3 million of principal and $0.4 million of accrued interest at September 30, 2009. This loan is described in further detail in Note 9 of our condensed consolidated financial statements.
During the first quarter of 2009, Longtrain purchased corporate bonds that mature in 2015 for a total of $36.8 million. In the third quarter of 2009, we sold $20.0 million, par value, of our investment in these bonds resulting in realized gains of $3.1 million. As of September 30, 2009, the investment value of the remaining bonds was $45.7 million resulting in an unrealized gain of $21.3 million that was recognized as accumulated other comprehensive income within stockholders equity, net of deferred taxes. The investment in corporate bonds is high risk. These bonds return a high yield in exchange for a higher risk.
Our net cash provided by operating activities for the nine months ended September 30, 2009 was $65.8 million. Net earnings of $5.0 million were impacted by non-cash items including but not limited to: depreciation expense of $17.5 million, joint venture losses of $5.0 million, deferred tax expense of $1.6 million and other smaller adjustments. Cash provided by operating activities attributable to changes in our current assets and current liabilities included a decrease in total accounts receivable, including from affiliates of $31.3 million and a decrease in inventory of $40.6 million. Cash used in operating activities attributable to changes in our current assets and liabilities included a decrease in total accounts payable, including to affiliates of $24.4 million and a decrease in accrued expenses and taxes of $9.8 million.
Read the The complete ReportARII is in the portfolios of Ron Baron of Baron Funds.
