American Railcar Industries, Inc. is a fully integrated supplier to the North American freight car market. The Company designs, manufactures, and sells custom and standard components. Its three reportable segments are Manufacturing; Railcar Leasing; and Railcar Services. The Company has its headquarters in St. Charles, MO.
In Q3 2016, American Railcar Industries completed the move of its corporate manufacturing facility to the State of Arkansas. This is so it’s close to its railcar manufacturing facility. The anticipation is that this move will provide savings and synergies to the Company’s supply chain.
American Railcar Industries is a top North American designer and manufacturer of hopper and tank railcars. At present, these are the two largest markets within the railcar industry. The Company has flexible and vertically integrated manufacturing facilities. These facilities can produce numerous railcar types.
Hopper Railcars products include general service and specialty carbon steel or stainless steel railcars capable of transporting Plastic Pellets; Specialty Chemical Products; Food Products; Grain; Cement; and Sand. Tank Railcars products include general service, pressurized, coiled, lined and insulated carbon steel or stainless steel railcars capable of transporting Chemicals; Natural Gas Liquids (NGLs); Food Products; Ethanol; and Crude Oil
Concerning its Manufacturing segment, it comprises railcar manufacturing and railcar and industrial component manufacturing. This segment’s growing product line includes DOT class general service tank cars, pressure tank cars, Centerflow® covered hopper cars, Pressureaide® pressure differential covered hopper cars, Thru-sill covered hopper cars, mill gondolas, and multi-unit intermodal well cars, among others.
The Railcar Leasing segment comprises railcars manufactured by American Railcar Industries and leased to third parties under operating leases. American Railcar Leasing (ARL) facilitates the Company’s leasing efforts. A priority for American Railcar Industries is adding railcars to its lease fleet. The Company is strategically targeting important customers and vital railcar kinds to meet the requirements of its customers
Regarding Railcar Services, American Railcar Industries, via its subsidiaries, ARI Railcar Services, LLC and ARI Fleet Services of Canada, Inc., operates full service repair facilities. This is in addition to several mobile repair units and mini-shops within North American. Each of these is completely equipped to provide on-site inspection and repair services.
The Company has an extensive repair network throughout various regions of the United States and Canada. Its intention is to utilize this network to continue to build this division of its business, and also to support its lease fleet and its clients’ railcars.
The Railcar Services segment performs railcar qualifications and inspections; light/heavy railcar repairs; exterior and interior coatings; and cleaning. This segment also performs valve replacement and testing; wheel and axle replacement; additional offerings for mini-shops and mobile; and on-site customer repairs.
During Q3 2016, American Railcar Industries received orders for 661 railcars. This included a number of orders for specialty hopper and tank railcars.
The Company noted in its Q3 2016 earnings call that, “Our railcar leasing segment continues to benefit us with our lease fleet approaching almost 11,000 railcars at September 30, 2016. Of the total backlog at September 30, 1,904 railcars will go into our lease fleet…Since 2011, we have strategically grown our lease fleet to include a mix of tank and hopper railcars for varying types of service.” (American Railcar Industries’ (ARII) CEO Jeff Hollister on Q3 2016 Results – Earnings Call Transcript)