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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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North Dakota
|
|
43-1481791
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(State of Incorporation)
|
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(I.R.S. Employer Identification No.)
|
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100 Clark Street, St. Charles, Missouri
|
|
63301
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(Address of principal executive offices)
|
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(Zip Code)
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Large accelerated filer
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¨
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Accelerated filer
|
x
|
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Non-accelerated filer
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¨
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Smaller Reporting Company
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¨
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Emerging Growth Company
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¨
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Item Number
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Page
Number
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|
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March 31,
2017 |
|
December 31,
2016 |
||||
|
(unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
151,246
|
|
|
$
|
178,571
|
|
Restricted cash
|
16,710
|
|
|
16,714
|
|
||
Short-term investments—available for sale securities
|
7,518
|
|
|
8,958
|
|
||
Accounts receivable, net
|
25,320
|
|
|
39,727
|
|
||
Accounts receivable, due from related parties
|
6,483
|
|
|
4,790
|
|
||
Inventories, net
|
78,811
|
|
|
75,028
|
|
||
Prepaid expenses and other current assets
|
8,624
|
|
|
8,623
|
|
||
Total current assets
|
294,712
|
|
|
332,411
|
|
||
Property, plant and equipment, net
|
173,069
|
|
|
177,051
|
|
||
Railcars on lease, net
|
955,622
|
|
|
908,010
|
|
||
Goodwill
|
7,169
|
|
|
7,169
|
|
||
Investments in and loans to joint ventures
|
25,385
|
|
|
26,332
|
|
||
Other assets
|
3,680
|
|
|
5,277
|
|
||
Total assets
|
$
|
1,459,637
|
|
|
$
|
1,456,250
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
30,217
|
|
|
$
|
29,314
|
|
Accounts payable, due to related parties
|
3,562
|
|
|
3,252
|
|
||
Accrued expenses, including loss contingency of $10,045 and $10,127 at March 31, 2017 and December 31, 2016, respectively
|
17,079
|
|
|
15,411
|
|
||
Accrued income taxes payable
|
1,607
|
|
|
7,660
|
|
||
Accrued compensation
|
10,533
|
|
|
11,628
|
|
||
Short-term debt, including current portion of long-term debt
|
25,649
|
|
|
25,588
|
|
||
Total current liabilities
|
88,647
|
|
|
92,853
|
|
||
Long-term debt, net of unamortized debt issuance costs of $4,809 and $4,863 at March 31, 2017 and December 31, 2016, respectively
|
539,076
|
|
|
545,392
|
|
||
Deferred tax liability
|
265,285
|
|
|
252,943
|
|
||
Pension and post-retirement liabilities
|
8,658
|
|
|
8,648
|
|
||
Other liabilities, including loss contingency of $2,161 at both March 31, 2017 and December 31, 2016
|
5,466
|
|
|
6,144
|
|
||
Total liabilities
|
907,132
|
|
|
905,980
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Common stock, $0.01 par value, 50,000,000 shares authorized, 19,083,878 shares outstanding as of March 31, 2017 and December 31, 2016, respectively
|
213
|
|
|
213
|
|
||
Additional paid-in capital
|
239,609
|
|
|
239,609
|
|
||
Retained Earnings
|
405,744
|
|
|
402,810
|
|
||
Accumulated other comprehensive loss
|
(7,030
|
)
|
|
(6,331
|
)
|
||
Treasury Stock
|
(86,031
|
)
|
|
(86,031
|
)
|
||
Total stockholders’ equity
|
552,505
|
|
|
550,270
|
|
||
Total liabilities and stockholders’ equity
|
$
|
1,459,637
|
|
|
$
|
1,456,250
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2017
|
|
2016
|
||||
Revenues:
|
|
|
|
||||
Manufacturing (including revenues from affiliates of zero and $553 for the three months ended March 31, 2017 and 2016, respectively)
|
$
|
60,726
|
|
|
$
|
123,792
|
|
Railcar leasing (including revenues from affiliates of $224 and zero for the three months ended March 31, 2017 and 2016, respectively)
|
33,835
|
|
|
32,768
|
|
||
Railcar services (including revenues from affiliates of $6,147 and $7,994 for the three months ended March 31, 2017 and 2016, respectively)
|
20,120
|
|
|
19,620
|
|
||
Total revenues
|
114,681
|
|
|
176,180
|
|
||
Cost of revenues:
|
|
|
|
||||
Manufacturing
|
(54,559
|
)
|
|
(102,281
|
)
|
||
Other operating income
|
31
|
|
|
—
|
|
||
Railcar leasing
|
(12,059
|
)
|
|
(10,175
|
)
|
||
Railcar services
|
(17,390
|
)
|
|
(15,237
|
)
|
||
Total cost of revenues
|
(83,977
|
)
|
|
(127,693
|
)
|
||
Gross profit
|
30,704
|
|
|
48,487
|
|
||
Selling, general and administrative
|
(8,802
|
)
|
|
(7,957
|
)
|
||
Net gains on disposition of leased railcars
|
13
|
|
|
167
|
|
||
Earnings from operations
|
21,915
|
|
|
40,697
|
|
||
Interest income (including income from related parties of $336 and $457 for the three months ended March 31, 2017 and 2016, respectively)
|
373
|
|
|
478
|
|
||
Interest expense
|
(5,531
|
)
|
|
(5,906
|
)
|
||
Other income
|
54
|
|
|
—
|
|
||
Earnings from joint ventures
|
550
|
|
|
1,486
|
|
||
Earnings before income taxes
|
17,361
|
|
|
36,755
|
|
||
Income tax expense
|
(6,793
|
)
|
|
(13,963
|
)
|
||
Net earnings
|
$
|
10,568
|
|
|
$
|
22,792
|
|
Net earnings per common share—basic and diluted
|
$
|
0.55
|
|
|
$
|
1.16
|
|
Weighted average common shares outstanding—basic and diluted
|
19,084
|
|
|
19,665
|
|
||
Cash dividends declared per common share
|
$
|
0.40
|
|
|
$
|
0.40
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2017
|
|
2016
|
||||
Net earnings
|
$
|
10,568
|
|
|
$
|
22,792
|
|
Currency translation
|
129
|
|
|
721
|
|
||
Postretirement plans
(1)
|
108
|
|
|
120
|
|
||
Short-term investments (2)
|
(936
|
)
|
|
—
|
|
||
Comprehensive income
|
$
|
9,869
|
|
|
$
|
23,633
|
|
(1)
|
Net of tax effect of
$0.1 million
for each of the
three
month periods ended
March 31, 2017
and
2016
.
|
(2)
|
Net of tax effect of
$0.5 million
for the three months ended
March 31, 2017
.
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2017
|
|
2016
|
||||
Operating activities:
|
|
|
|
||||
Net earnings
|
$
|
10,568
|
|
|
$
|
22,792
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
||||
Depreciation
|
13,873
|
|
|
12,655
|
|
||
Amortization of deferred costs
|
125
|
|
|
126
|
|
||
(Gain) loss on disposal of property, plant, equipment and leased railcars
|
(13
|
)
|
|
25
|
|
||
Earnings from joint ventures
|
(550
|
)
|
|
(1,486
|
)
|
||
Provision for deferred income taxes
|
12,780
|
|
|
8,640
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable, net
|
14,310
|
|
|
694
|
|
||
Accounts receivable, due from related parties
|
(1,680
|
)
|
|
2,071
|
|
||
Income taxes receivable
|
(52
|
)
|
|
1,246
|
|
||
Inventories, net
|
(3,770
|
)
|
|
21,429
|
|
||
Prepaid expenses and other current assets
|
52
|
|
|
(1,796
|
)
|
||
Accounts payable
|
897
|
|
|
(9,786
|
)
|
||
Accounts payable, due to related parties
|
311
|
|
|
(1,999
|
)
|
||
Accrued expenses and taxes
|
(5,482
|
)
|
|
3,674
|
|
||
Other
|
1,050
|
|
|
(417
|
)
|
||
Net cash provided by operating activities
|
42,419
|
|
|
57,868
|
|
||
Investing activities:
|
|
|
|
||||
Purchases of property, plant and equipment
|
(1,550
|
)
|
|
(4,367
|
)
|
||
Grant Proceeds
|
100
|
|
|
—
|
|
||
Capital expenditures - leased railcars
|
(55,909
|
)
|
|
(20,620
|
)
|
||
Proceeds from the sale of property, plant, equipment and leased railcars
|
73
|
|
|
640
|
|
||
Proceeds from repayments of loans and distributions from joint ventures
|
1,477
|
|
|
1,477
|
|
||
Net cash used in investing activities
|
(55,809
|
)
|
|
(22,870
|
)
|
||
Financing activities:
|
|
|
|
||||
Repayments of debt
|
(6,310
|
)
|
|
(106,402
|
)
|
||
Change in restricted cash related to long-term debt
|
3
|
|
|
142
|
|
||
Stock repurchases
|
—
|
|
|
(10,872
|
)
|
||
Payment of common stock dividends
|
(7,633
|
)
|
|
(7,825
|
)
|
||
Debt issuance costs
|
—
|
|
|
(10
|
)
|
||
Net cash used in financing activities
|
(13,940
|
)
|
|
(124,967
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
5
|
|
|
(14
|
)
|
||
Decrease in cash and cash equivalents
|
(27,325
|
)
|
|
(89,983
|
)
|
||
Cash and cash equivalents at beginning of period
|
178,571
|
|
|
298,064
|
|
||
Cash and cash equivalents at end of period
|
$
|
151,246
|
|
|
$
|
208,081
|
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
|
(in thousands)
|
||||||
Accounts receivable, gross
|
$
|
26,432
|
|
|
$
|
39,869
|
|
Less allowance for doubtful accounts
|
(1,112
|
)
|
|
(142
|
)
|
||
Total accounts receivable, net
|
$
|
25,320
|
|
|
$
|
39,727
|
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
|
(in thousands)
|
||||||
Raw materials
|
$
|
44,583
|
|
|
$
|
46,789
|
|
Work-in-process
|
32,629
|
|
|
28,386
|
|
||
Finished products
|
4,778
|
|
|
3,332
|
|
||
Total inventories
|
81,990
|
|
|
78,507
|
|
||
Less reserves
|
(3,179
|
)
|
|
(3,479
|
)
|
||
Total inventories, net
|
$
|
78,811
|
|
|
$
|
75,028
|
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
|
(in thousands)
|
||||||
Operations / Corporate:
|
|
|
|
||||
Buildings
|
$
|
183,086
|
|
|
$
|
182,970
|
|
Machinery and equipment
|
232,035
|
|
|
232,171
|
|
||
Land
|
4,329
|
|
|
4,328
|
|
||
Construction in process
|
3,463
|
|
|
1,966
|
|
||
|
422,913
|
|
|
421,435
|
|
||
Less accumulated depreciation
|
(249,844
|
)
|
|
(244,384
|
)
|
||
Property, plant and equipment, net
|
$
|
173,069
|
|
|
$
|
177,051
|
|
Railcar Leasing:
|
|
|
|
||||
Railcars on lease
|
$
|
1,052,266
|
|
|
$
|
996,422
|
|
Less accumulated depreciation
|
(96,644
|
)
|
|
(88,412
|
)
|
||
Railcars on lease, net
|
$
|
955,622
|
|
|
$
|
908,010
|
|
Remaining 9 months of 2017
|
$
|
94,790
|
|
2018
|
116,668
|
|
|
2019
|
97,354
|
|
|
2020
|
61,192
|
|
|
2021
|
44,793
|
|
|
2022 and thereafter
|
69,598
|
|
|
Total
|
$
|
484,395
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Total depreciation expense
|
$
|
13,873
|
|
|
$
|
12,655
|
|
Depreciation expense on leased railcars
|
$
|
8,237
|
|
|
$
|
7,375
|
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
|
(in thousands)
|
||||||
Carrying amount of investments in and loans to joint ventures
|
|
|
|
||||
Ohio Castings
|
$
|
6,665
|
|
|
$
|
7,477
|
|
Axis
|
18,720
|
|
|
18,855
|
|
||
Total investments in and loans to joint ventures
|
$
|
25,385
|
|
|
$
|
26,332
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Results of operations
|
|
|
|
||||
Revenues
|
$
|
4,449
|
|
|
$
|
13,654
|
|
Gross profit (loss)
|
$
|
(1,980
|
)
|
|
$
|
210
|
|
Net loss
|
$
|
(2,434
|
)
|
|
$
|
(598
|
)
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Results of operations
|
|
|
|
||||
Revenues
|
$
|
14,366
|
|
|
$
|
16,411
|
|
Gross profit
|
$
|
4,206
|
|
|
$
|
5,042
|
|
Earnings before interest
|
$
|
4,003
|
|
|
$
|
4,768
|
|
Net earnings
|
$
|
3,331
|
|
|
$
|
3,854
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Liability, beginning of period
|
$
|
2,439
|
|
|
$
|
1,415
|
|
Provision for warranties issued during the period, net of adjustments
|
29
|
|
|
415
|
|
||
Adjustments to warranties issued during previous periods
|
532
|
|
|
5
|
|
||
Warranty claims
|
(170
|
)
|
|
(122
|
)
|
||
Liability, end of period
|
$
|
2,830
|
|
|
$
|
1,713
|
|
Remaining 9 months of 2017
|
$
|
51,863
|
|
2018
|
59,560
|
|
|
2019
|
44,473
|
|
|
2020
|
25,008
|
|
|
2021
|
15,799
|
|
|
2022 and thereafter
|
14,758
|
|
|
Total
|
$
|
211,461
|
|
Remaining 9 months of 2017
|
$
|
19,278
|
|
2018
|
25,590
|
|
|
2019
|
25,507
|
|
|
2020
|
26,354
|
|
|
2021
|
26,358
|
|
|
2022 and thereafter
|
446,616
|
|
|
Total
|
$
|
569,703
|
|
|
Pension Benefits
|
||||||
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Service cost
|
$
|
88
|
|
|
$
|
52
|
|
Interest cost
|
235
|
|
|
246
|
|
||
Expected return on plan assets
|
(282
|
)
|
|
(284
|
)
|
||
Amortization of net actuarial loss/prior service cost
|
184
|
|
|
206
|
|
||
Net periodic cost recognized
|
$
|
225
|
|
|
$
|
220
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Share-based compensation income
|
|
|
|
||||
Cost of revenues: Manufacturing
|
$
|
(18
|
)
|
|
$
|
(117
|
)
|
Cost of revenues: Railcar services
|
(2
|
)
|
|
(15
|
)
|
||
Selling, general and administrative
|
(227
|
)
|
|
(179
|
)
|
||
Total share-based compensation income
|
$
|
(247
|
)
|
|
$
|
(311
|
)
|
|
Accumulated Short-term Investment Transactions
|
|
Accumulated
Currency
Translation
|
|
Accumulated
Postretirement
Transactions
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
||||||||
|
(in thousands)
|
||||||||||||||
Balance December 31, 2016
|
$
|
415
|
|
|
$
|
(2,015
|
)
|
|
$
|
(4,731
|
)
|
|
$
|
(6,331
|
)
|
Currency translation
|
—
|
|
|
129
|
|
|
—
|
|
|
129
|
|
||||
Reclassifications related to pension and postretirement plans, net of tax effect of $66 (1)
|
—
|
|
|
—
|
|
|
108
|
|
|
108
|
|
||||
Unrealized loss on available for sale securities, net of tax effect of $504
|
(936
|
)
|
|
—
|
|
|
—
|
|
|
(936
|
)
|
||||
Balance March 31, 2017
|
$
|
(521
|
)
|
|
$
|
(1,886
|
)
|
|
$
|
(4,623
|
)
|
|
$
|
(7,030
|
)
|
(1)—
|
These accumulated other comprehensive income components relate to amortization of actuarial loss/(gain) and prior period service costs/(benefits) and are included in the computation of net periodic costs for our pension and postretirement plans. See Note 10 for further details and pre-tax amounts.
|
(2)—
|
The unrealized gain on available for sale securities, net of tax represents the change in fair value estimates that are based on quoted prices with an active trading market (Level 1).
|
|
Three Months Ended March 31, 2017
|
||||||||||||||
|
Revenues
|
|
|
||||||||||||
|
External
|
|
Intersegment
|
|
Total
|
|
Earnings (Loss) from Operations
|
||||||||
|
(in thousands)
|
||||||||||||||
Manufacturing
|
$
|
60,726
|
|
|
$
|
60,104
|
|
|
$
|
120,830
|
|
|
$
|
9,151
|
|
Railcar leasing
|
33,835
|
|
|
—
|
|
|
33,835
|
|
|
18,810
|
|
||||
Railcar services
|
20,120
|
|
|
332
|
|
|
20,452
|
|
|
1,716
|
|
||||
Corporate
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,272
|
)
|
||||
Eliminations
|
—
|
|
|
(60,436
|
)
|
|
(60,436
|
)
|
|
(3,490
|
)
|
||||
Total Consolidated
|
$
|
114,681
|
|
|
$
|
—
|
|
|
$
|
114,681
|
|
|
$
|
21,915
|
|
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended March 31, 2016
|
||||||||||||||
|
Revenues
|
|
|
||||||||||||
|
External
|
|
Intersegment
|
|
Total
|
|
Earnings (Loss) from Operations
|
||||||||
|
(in thousands)
|
||||||||||||||
Manufacturing
|
$
|
123,792
|
|
|
$
|
23,631
|
|
|
$
|
147,423
|
|
|
$
|
22,686
|
|
Railcar leasing
|
32,768
|
|
|
—
|
|
|
32,768
|
|
|
19,675
|
|
||||
Railcar services
|
19,620
|
|
|
959
|
|
|
20,579
|
|
|
3,508
|
|
||||
Corporate
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,508
|
)
|
||||
Eliminations
|
—
|
|
|
(24,590
|
)
|
|
(24,590
|
)
|
|
(664
|
)
|
||||
Total Consolidated
|
$
|
176,180
|
|
|
$
|
—
|
|
|
$
|
176,180
|
|
|
$
|
40,697
|
|
Total Assets
|
March 31,
2017 |
|
December 31,
2016 |
||||
|
(in thousands)
|
||||||
Manufacturing
|
$
|
237,705
|
|
|
$
|
256,622
|
|
Railcar leasing
|
1,314,257
|
|
|
1,254,824
|
|
||
Railcar services
|
60,611
|
|
|
57,061
|
|
||
Corporate/Eliminations
|
(152,936
|
)
|
|
(112,257
|
)
|
||
Total Consolidated
|
$
|
1,459,637
|
|
|
$
|
1,456,250
|
|
|
Three Months Ended
March 31, |
||||
|
2017
|
|
2016
|
||
Manufacturing
|
—
|
%
|
|
0.3
|
%
|
Railcar leasing
|
0.2
|
%
|
|
—
|
%
|
Railcar services
|
5.4
|
%
|
|
4.5
|
%
|
|
Three Months Ended
March 31, |
||||
|
2017
|
|
2016
|
||
Manufacturing revenues from significant customers
|
42.7
|
%
|
|
50.0
|
%
|
|
March 31,
2017 |
|
December 31,
2016 |
||
Manufacturing receivables from significant customers
|
23.0
|
%
|
|
53.4
|
%
|
•
|
our prospects in light of the cyclical nature of our business;
|
•
|
the health of and prospects for the overall railcar industry;
|
•
|
risks relating to our compliance with the FRA Directive, any developments related to the FRA Directive and any costs or loss of revenue related thereto;
|
•
|
risks relating to timely and successfully transitioning the management of our railcar leasing business from ARL to in-house management and managing our lease fleet leading up to and after the ARL Sale;
|
•
|
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 risks related to our and our subsidiaries' indebtedness and compliance with covenants contained in our and our subsidiaries' financing arrangements.
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
March 31,
|
|
$
|
|
%
|
|||||||||
|
2017
|
|
2016
|
|
Change
|
|
Change
|
|||||||
|
(in thousands)
|
|
|
|||||||||||
Revenues:
|
|
|
|
|
|
|
|
|||||||
Manufacturing
|
$
|
60,726
|
|
|
$
|
123,792
|
|
|
$
|
(63,066
|
)
|
|
(50.9
|
)
|
Railcar leasing
|
33,835
|
|
|
32,768
|
|
|
1,067
|
|
|
3.3
|
|
|||
Railcar services
|
20,120
|
|
|
19,620
|
|
|
500
|
|
|
2.5
|
|
|||
Total revenues
|
$
|
114,681
|
|
|
$
|
176,180
|
|
|
$
|
(61,499
|
)
|
|
(34.9
|
)
|
Cost of revenues:
|
|
|
|
|
|
|
|
|||||||
Manufacturing
|
$
|
(54,559
|
)
|
|
$
|
(102,281
|
)
|
|
$
|
47,722
|
|
|
46.7
|
|
Other operating income
|
31
|
|
|
—
|
|
|
31
|
|
|
*
|
|
|||
Railcar leasing
|
(12,059
|
)
|
|
(10,175
|
)
|
|
(1,884
|
)
|
|
(18.5
|
)
|
|||
Railcar services
|
(17,390
|
)
|
|
(15,237
|
)
|
|
(2,153
|
)
|
|
(14.1
|
)
|
|||
Total cost of revenues
|
$
|
(83,977
|
)
|
|
$
|
(127,693
|
)
|
|
$
|
43,716
|
|
|
34.2
|
|
Selling, general and administrative
|
(8,802
|
)
|
|
(7,957
|
)
|
|
(845
|
)
|
|
(10.6
|
)
|
|||
Net gains on disposition of leased railcars
|
13
|
|
|
167
|
|
|
(154
|
)
|
|
*
|
|
|||
Earnings from operations
|
$
|
21,915
|
|
|
$
|
40,697
|
|
|
$
|
(18,782
|
)
|
|
(46.2
|
)
|
|
Three Months Ended
March 31, |
|
|
||||||||
|
2017
|
|
2016
|
|
Change
|
||||||
|
(in thousands)
|
|
|
||||||||
Ohio Castings
|
$
|
(812
|
)
|
|
$
|
(199
|
)
|
|
$
|
(613
|
)
|
Axis
|
1,362
|
|
|
1,685
|
|
|
(323
|
)
|
|||
Total Earnings from Joint Ventures
|
$
|
550
|
|
|
$
|
1,486
|
|
|
$
|
(936
|
)
|
|
Three Months Ended March 31,
|
|
|
||||||||||||||||||||||||
|
2017
|
|
2016
|
|
|
||||||||||||||||||||||
|
(in thousands)
|
|
|
||||||||||||||||||||||||
|
External
|
|
Intersegment
|
|
Total
|
|
External
|
|
Intersegment
|
|
Total
|
|
Change
|
||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Manufacturing
|
$
|
60,726
|
|
|
$
|
60,104
|
|
|
$
|
120,830
|
|
|
$
|
123,792
|
|
|
$
|
23,631
|
|
|
$
|
147,423
|
|
|
$
|
(26,593
|
)
|
Railcar leasing
|
33,835
|
|
|
—
|
|
|
33,835
|
|
|
32,768
|
|
|
—
|
|
|
32,768
|
|
|
1,067
|
|
|||||||
Railcar services
|
20,120
|
|
|
332
|
|
|
20,452
|
|
|
19,620
|
|
|
959
|
|
|
20,579
|
|
|
(127
|
)
|
|||||||
Eliminations
|
—
|
|
|
(60,436
|
)
|
|
(60,436
|
)
|
|
—
|
|
|
(24,590
|
)
|
|
(24,590
|
)
|
|
(35,846
|
)
|
|||||||
Total Consolidated
|
$
|
114,681
|
|
|
$
|
—
|
|
|
$
|
114,681
|
|
|
$
|
176,180
|
|
|
$
|
—
|
|
|
$
|
176,180
|
|
|
$
|
(61,499
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
||||||||
|
2017
|
|
2016
|
|
Change
|
||||||
|
(in thousands)
|
|
|
||||||||
Earnings (Loss) from Operations
|
|
|
|
|
|
||||||
Manufacturing
|
$
|
9,151
|
|
|
$
|
22,686
|
|
|
$
|
(13,535
|
)
|
Railcar leasing
|
18,810
|
|
|
19,675
|
|
|
(865
|
)
|
|||
Railcar services
|
1,716
|
|
|
3,508
|
|
|
(1,792
|
)
|
|||
Corporate
|
(4,272
|
)
|
|
(4,508
|
)
|
|
236
|
|
|||
Eliminations
|
(3,490
|
)
|
|
(664
|
)
|
|
(2,826
|
)
|
|||
Total Consolidated
|
$
|
21,915
|
|
|
$
|
40,697
|
|
|
$
|
(18,782
|
)
|
|
Three Months Ended
March 31, |
||||
|
2017
|
|
2016
|
||
Segment Operating Margins
|
|
|
|
||
Manufacturing
|
7.6
|
%
|
|
15.4
|
%
|
Railcar leasing
|
55.6
|
%
|
|
60.0
|
%
|
Railcar services
|
8.4
|
%
|
|
17.0
|
%
|
|
Three Months Ended
March 31, |
|
|
||||||||
|
2017
|
|
2016
|
|
Change
|
||||||
|
(in thousands)
|
|
|
||||||||
Net cash provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
42,419
|
|
|
$
|
57,868
|
|
|
$
|
(15,449
|
)
|
Investing activities
|
(55,809
|
)
|
|
(22,870
|
)
|
|
(32,939
|
)
|
|||
Financing activities
|
(13,940
|
)
|
|
(124,967
|
)
|
|
111,027
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
5
|
|
|
(14
|
)
|
|
19
|
|
|||
Decrease in cash and cash equivalents
|
$
|
(27,325
|
)
|
|
$
|
(89,983
|
)
|
|
$
|
62,658
|
|
•
|
applicable warranties included in sale and leasing arrangements;
|
•
|
implementing changes to our manufacturing personnel or processes; and
|
•
|
claims, litigation, settlements and/or regulatory proceedings.
|
•
|
increase our vulnerability to general economic and industry conditions;
|
•
|
require us to dedicate a substantial portion of our cash flow from operations to payments of our indebtedness, which would reduce the availability of our cash flow to fund working capital, capital expenditures, expansion efforts and other general corporate purposes;
|
•
|
limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate, including by restricting our ability to manage our own lease fleet in connection with the ARL Sale;
|
•
|
place us at a competitive disadvantage compared to our competitors that have less debt; and
|
•
|
limit, among other things, our ability to borrow additional funds for working capital, capital expenditures, general corporate purposes or acquisitions.
|
•
|
cease selling or using any of our products that incorporate the asserted intellectual property, which would adversely affect our revenues;
|
•
|
pay substantial damages for past use of the asserted intellectual property;
|
•
|
obtain a license from the holder of the asserted intellectual property, which license may not be available on reasonable terms, if at all; and
|
•
|
redesign or rename, in the case of trademark claims, our products to avoid infringing the intellectual property rights of third parties, which may be costly and time-consuming, if possible at all.
|
Period
|
|
Total Number of Shares Purchased (1)
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs (2)
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan
|
||||||
January 1, 2017 through January 31, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
163,975,779
|
|
February 1, 2017 through February 28, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
163,975,779
|
|
March 1, 2017 through March 31, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
163,975,779
|
|
Total
|
|
—
|
|
|
|
|
—
|
|
|
|
||||
(1) - There were no repurchases under the Stock Repurchase Program during the current quarter
|
||||||||||||||
(2) - On July 28, 2015, the Company's board of directors authorized the Stock Repurchase Program pursuant to which the Company may, from time to time, repurchase up to $250.0 milllion of its common stock. The Stock Repurchase Program will end upon the earlier of the date on which it is terminated by the board or when all authorized repurchases are completed.
|
Exhibit No.
|
|
Description of Exhibit
|
|
|
|
10.1
|
|
American Railcar Industries, Inc. 2017 Management Incentive Plan*#
|
|
|
|
10.2
|
|
Consulting Services Agreement dated as of February 15, 2017 by and between American Railcar Industries, Inc. and American Railcar Leasing LLC (incorporated by reference to Exhibit 10.1 to ARI's Current report on Form 8-K, filed with the SEC on February 21, 2017
|
|
|
|
10.3
|
|
Offer Letter between American Railcar Industries, Inc. and John O'Bryan, dated as of April 26, 2017*#
|
|
|
|
31.1
|
|
Rule 13a-14(a), 15d-14(a) Certification of the Chief Executive Officer*
|
|
|
|
31.2
|
|
Rule 13a-14(a), 15d-14(a) Certification of the Chief Financial Officer*
|
|
|
|
32.1
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
|
|
|
|
101.INS
|
|
XBRL Instance Document*
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document*
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document*
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document*
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Presentation Linkbase Document*
|
|
|
|
101.DEF
|
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XBRL Taxonomy Definition Linkbase Document*
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*
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Filed herewith
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**
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Furnished herewith
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#
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Indicates management contract or compensatory plan or arrangement.
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AMERICAN RAILCAR INDUSTRIES, INC.
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Date:
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May 2, 2017
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By:
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/s/ Jeffrey S. Hollister
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Jeffrey S. Hollister, President and Chief Executive Officer
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By:
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/s/ Luke M. Williams
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Luke M. Williams, Senior Vice President, Chief Financial Officer and Treasurer
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Exhibit No.
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Description of Exhibit
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10.1
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American Railcar Industries, Inc. 2017 Management Incentive Plan*#
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10.2
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Consulting Services Agreement dated as of February 15, 2017 by and between American Railcar Industries, Inc. and American Railcar Leasing LLC (incorporated by reference to Exhibit 10.1 to ARI's Current report on Form 8-K, filed with the SEC on February 21, 2017
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10.3
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Offer Letter between American Railcar Industries, Inc. and John O'Bryan, dated as of April 26, 2017*#
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31.1
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Rule 13a-14(a), 15d-14(a) Certification of the Chief Executive Officer*
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31.2
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Rule 13a-14(a), 15d-14(a) Certification of the Chief Financial Officer*
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32.1
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Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
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101.INS
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XBRL Instance Document*
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101.SCH
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XBRL Taxonomy Extension Schema Document*
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document*
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document*
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101.PRE
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XBRL Taxonomy Presentation Linkbase Document*
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101.DEF
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XBRL Taxonomy Definition Linkbase Document*
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*
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Filed herewith
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**
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Furnished herewith
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#
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Indicates management contract or compensatory plan or arrangement.
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Participant’s Base Salary
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X
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Target Bonus Percentage
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X
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Financial Performance Factor
(
on a 0% - 150% scale)
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X
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Individual Performance Rating
(on a 0% - 150% scale)
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=
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Participant’s Financial Award (“Bonus”)
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•
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Achievement of performance targets established in Company’s annual budget
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•
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Development of staff
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•
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Successful development/acquisition of new accounts/products/properties
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•
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Improvement in product programs
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•
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Attainment of self-development objectives
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•
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Control or reduction of operating expenses by business unit
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•
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Safety record of facility or facilities
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•
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Quality program achievement
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•
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Business process improvements
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•
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New Hires and Rehires
– The Financial Award will be prorated based upon the number of full months the Participant was employed during the Fiscal Year provided that he or she becomes employed prior to October 1
st
. For example, a Participant initially hired on July 1
st
would be eligible for 50% of the annual Financial Award, whereas a Participant newly hired on or after October 1
st
would not be eligible to receive any portion of the Financial Award. In the case of rehires, there is no credit for prior service, and the rehire date must also occur prior to October 1
st
in order for the Participant to be Bonus-eligible under the Plan for the Fiscal Year.
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•
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Leaves of Absence -
Time taken during a leave of absence (including disability leave) is not credited toward eligibility for a Financial Award; therefore, awards will be prorated for the length of time on leave of absence. Furthermore, payments of Financial Awards are not considered earned and payable unless and until the Participant returns to work, with the exception of military leave. If the leave of absence lasts nine months or more during the Fiscal Year, the Participant will not have met the three-month eligibility required to earn a Bonus for the Fiscal Year.
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Promotions and Demotions
– If the action results in a movement from one Bonus-eligible position to another Bonus-eligible position (with either a higher or lower Bonus target), a prorated Financial Award will be calculated. The Financial Award will be calculated separately by factoring the time in each Bonus-eligible position by the corresponding Bonus target and Base Salary during the Participant’s tenure in each position. However, if a
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•
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Status Change
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o
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Change in employment status
– The Financial Award is not payable unless the Participant has occupied a Bonus-eligible position for at least three months during the Fiscal Year on a full-time basis (i.e., 40-hour or more per week), unless specifically approved by the company’s CEO, and meets all eligibility criteria during the last full quarter of the Fiscal Year, i.e., from October 1
st
through December 31
st
. The Financial Award will be based upon the Base Salary and the annual Bonus target while in the Bonus-eligible position.
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o
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Bonus-eligible position to a non-Bonus eligible position
– The Financial Award will be prorated based upon the time in a Bonus-eligible position as long as the Participant was in the position for a minimum of three months during the Fiscal Year. A Participant must occupy a Bonus-eligible position prior to October 1
st
in order to be eligible to receive a Bonus payment for the Fiscal Year. The Financial Award will be based upon the Base Salary and the annual Bonus target while in the Bonus-eligible position.
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o
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Non-Bonus-eligible position to a Bonus-eligible position
– The Financial Award will be prorated based on the time worked, the corresponding Bonus target, and the Base Salary in effect while in the Bonus-eligible position as long as the Participant was in the eligible position for a minimum of three months during the Fiscal Year. A Participant must move into the Bonus-eligible position prior to October 1
st
in order to be eligible to receive a Bonus payment for the Fiscal Year.
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1.
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I have reviewed this quarterly report on Form 10-Q of American Railcar Industries, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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May 2, 2017
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/s/ Jeffrey S. Hollister
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Jeffrey S. Hollister, President and Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of American Railcar Industries, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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May 2, 2017
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/s/ Luke M. Williams
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Luke M. Williams, Senior Vice President, Chief Financial Officer and Treasurer
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1.
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the quarterly report on Form 10-Q of the Company for the three months ended
March 31, 2017
(the “Quarterly Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date:
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May 2, 2017
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/s/ Jeffrey S. Hollister
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Jeffrey S. Hollister, President and Chief Executive Officer
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1.
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the quarterly report on Form 10-Q of the Company for the three months ended
March 31, 2017
(the “Quarterly Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date:
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May 2, 2017
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/s/ Luke M. Williams
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Luke M. Williams, Senior Vice President, Chief Financial Officer and Treasurer
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