American Railcar Industries Inc
American Railcar Industries — Investor Presentation (August 2018)
26 slides from American Railcar Industries's investor presentation, Aug 24, 2018
Slide 1: A Team Striving For Excellence
Exhibit 99.1 MANUFACTURING LEASING PARTS REPAIR A Team Striving For Excellence Safety ¢ Quality ¢ Service August 2018
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains statements relating to our expected financial performance, objectives, long-term strategies and/or future business prospects, events and plans that are forward-looking statements. Forward-looking statements represent our estimates and assumptions only
Slide 3: Vision and Strategic Drivers
Atl EXCELLENCE ACCOUNTABILITY # TEAMWORK VISION > WORLD-CLASS RESULTS <, To be the best a + Safety, Quality, Service railcar solutions provider STRATEGIC * Profitability + Preferred Supplier DRIVERS in North America! > + Employer of Choice ©) <r
Slide 4: ARI Successful and Diversified Business Model
Manufacturing ARI Successful and Diversified Railcars Components Business Model Railcar Repair Railcar Services Leasing Complete life cycle solutions for the railcar industry 4
Slide 5: ARI Locations
ARI Locations 5
Slide 6: Strategic Developments
Managing our lease fleet in-house gives us the opportunity to Integration of strong streamline processes sales force and lease and realize synergies fleet management and cost savings group through integrating with the rest of our Strategic organization Developments ARI has become a Our sales and one
Slide 7: ARI Key Railcar Markets
ARI Key Railcar Markets - Two Largest Product Segments in the Railcar Industry* HOPPER RAILCARS • Product offerings include general service and specialty carbon steel or stainless steel railcars that are capable of transporting: • Plastic Pellets • Food Products • Grain • Sand • Specialty Chemical P
Slide 8: North American Fleet by Railcar Type
North American Fleet by Railcar Type 59% of the North American fleet is Covered Hopper and Tank Railcars North American Fleet by Railcar Type 106,133 , 17,098 , Tank Cars 7% 1% 409,593 , 203,125 , 25% 12% 214,321 , 13% Covered Hoppers 563,320 , 136,783 , 34% 8% Tank Cars Covered Hoppers Open-top Hop
Slide 9: Cyclical Industry Trends
Cyclical Industry Trends New Freight Car Delivery Trends 90 (Amounts in the 000s) 80 70 60 50 40 30 20 10 - Long-term average (1981 - 2022E) Sources: Q2 2018 FTR Rail Equipment Outlook – www.ftrintel.com (issued June 2018) and Railway Supply Institute, Inc. ARCI 2018 – 2nd Quarter Reporting Statisti
Slide 10: Industry Trends
Industry Trends Covered Hopper Delivery Trends Tank Railcar Delivery Trends (Amounts in the 000s) (Amounts in the 000s) 35 40 35 36 30 30 35 26 25 29 30 25 23 23 20 21 20 21 25 19 20 19 20 19 21 22 17 19 20 18 18 18 18 15 17 15 14 11 15 12 12 10 10 8 9 9 9 9 6 6 5 6 5 5 4 2 5 - - Long-term average (
Slide 11: Freight Railcar Market Overview
Freight Railcar Market Overview Industry Railcar Backlog as of 6/30/18 Industry Railcar Deliveries TTM 6/30/18 Tank Cars 17% 5% 6% 5% 9% Tank Cars 37% 3% Covered Hoppers 8% 3% Tank Cars 1% Open-top Hoppers 3% Gondolas Flat Cars 2% Intermodal 45% 56% Covered Hoppers Box Cars Covered Hoppers 82% of th
Slide 12: ARI's Railcar Backlog
ARI’s Railcar Backlog 14,000 12,000 11,732 10,000 8,560 8,000 7,060 7,081 6,530 6,000 TotalRailcar Backlog 4,240 3,813 4,000 3,387 1,940 2,000 1,050 550 - Dec Dec Dec Jun Dec 2008 Dec 2010 Dec 2011 Dec 2012 Dec 2013 Dec 2014 Dec 2015 2009 2016 2017 2018 Railcar backlog for lease - - - 2,200 1,810 2,
Slide 13: Manufacturing Segment
Manufacturing Segment Manufacturing core competency allows ARI to be competitive and provide low cost, quality railcars and components (millions) Revenue Operating Margin % ^ • Flexible and labor efficient $1,200 30% manufacturing facilities able to respond to customer delivery demands 25% $1,000 •
Slide 14: Railcar Leasing Segment
Railcar Leasing Segment Diversifying and supplementing our business with revenue streams generated over the life of the railcar (millions) Revenue Lease Fleet • Disciplined lease strategy balancing mix of $160 16,000 customers, commodities, acceptable market rates, and staggered lease terms $140 14,
Slide 15: Railcar Services Segment
Railcar Services Segment Supporting both ARI’s lease fleet and customers' railcar needs, while gaining valuable industry insight Revenue Operating Margin % TRADITIONAL REPAIR (millions) $90 25% • Railcar qualifications and inspections • Light/heavy railcar repairs $80 • Exterior and interior coating
Slide 16: Strategic Progress Continues
• Tank Railcar Expansion • Wheel & Axle Assembly • Tank Head Press Major • Axle and Castings Joint Ventures • Repair Plant Expansions Historical • Brookhaven, MS Repair Plant • Lease Fleet Growth to Over 13,300 Railcars • Tank Railcar Manufacturing Facility Repair Projects Retrofit Expansion • Manuf
Slide 17: Strong Financial Profile
Strong Financial Profile • Positive financial returns resulting from ARI’s participation in the largest railcar markets: hopper and tank railcars • Strong balance sheet with increased financing capacity to support operations and future lease fleet growth • 24th consecutive quarterly dividend declare
Slide 18: Our Financial History
Our Financial History Consolidated Revenue ($ mil) ^ $1,000.0 $889.3 $808.8 $750.6 $800.0 $711.7 $733.0 $639.1 $519.4 $515.9 $600.0 $476.8 $423.4 $400.0 $273.6 $200.0 $0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q2 2018 ^ Revenues related to railcars built for the Company's lease fleet are
Slide 19: Our Financial History (continued)
Our Financial History (continued) Operational CAPEX ($ mil) $50.0 $42.0 $40.0 $36.6 $30.0 $23.0 $20.0 $22.0 $20.1 $20.0 $15.0 $8.4 $10.0 $6.1 $6.2 $7.2 $0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q2 2018 TTM Lease Railcar CAPEX ($ mil) # $350.0 $307.7 $300.0 $250.0 $211.6 $185.9 $200.0 $1
Slide 20: Quarterly Financial Comparison
Quarterly Financial Comparison Consolidated Revenue ($ mil) ^ $200.0 $176.2 $167.5 $150.5 $145.0 $146.5 $150.0 $132.4 $120.7 $114.7 $109.0 $116.2 $100.0 $50.0 $0.0 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 ^ Revenues related to railcars built for the Company's l
Slide 21: Quarterly Financial Comparison (continued)
Quarterly Financial Comparison (continued) Operational CAPEX ($ mil) $8.0 $6.7 $7.1 $6.0 $4.4 $4.8 $3.7 $4.0 $2.3 $1.8 $2.0 $1.6 $1.4 $0.8 $0.0 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Lease Railcar CAPEX ($ mil) # $60.0 $55.9 $47.9 $40.0 $36.0 $28.6 $31.4 $20.
Slide 22: Exhibit A – Adj. EBITDA Reconciliation
Exhibit A – Adj. EBITDA Reconciliation In Thousands, unaudited 22
Slide 23: Exhibit A – Adj. EBITDA Reconciliation
Exhibit A – Adj. EBITDA Reconciliation EBITDA represents net earnings before income tax expense, interest expense (income) 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 compani
Slide 24: Exhibit B – Impact of 2017 Tax Act Reconciliation
Exhibit B – Impact of 2017 Tax Act Reconciliation In Thousands, except per share amounts, unaudited 24
Slide 25: Exhibit B – Impact of 2017 Tax Act Reconciliation
Exhibit B – Impact of 2017 Tax Act Reconciliation Net earnings excluding tax adjustments represents net earnings before a one-time adjustment related to the impact of the new Tax Cuts and Jobs Act of 2017 (the "2017 Tax Act"). The Company believes that net earnings excluding tax adjustments is a use
Slide 26: A Tradition of Industry Leadership
A Tradition of Industry Leadership
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