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American Railcar Industries, Inc. Message Board

  • vwdiesel10 vwdiesel10 Jan 30, 2013 4:33 PM Flag

    Soon to be Debt Free Balance Sheet?

    Announcement after hours they are redeeming $175 million of outstanding Notes. $175 million is the current outstanding LT debt on their balance sheet. Will close March 1, 2013 out of available cash on hand as per the release. Interesting development. Perhaps scuttle the Greenbrier deal and use the cash to clear out the balance sheet and possible make some other types of expansions?

    Any possibility of them building out lease fleet to take on the likes of GATX or the leasing arm over at GE Capital? Any thoughts?

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    • Setting up the new llc leasing division to focus on leasing looks like it. The capacity issue is still a concern with their backlog. Don't know that they can make enough cars!

      Sentiment: Strong Buy

      • 1 Reply to davelocey
      • That's sort of a good problem isn't it though? If they cranked up capacity they will burn through the backlog faster be stuck with lower revenue repair and replacement work. On the other hand, they don't want to go too slow about it or they could loose orders to companies with smaller backlogs.

        It definitely leans more toward "high quality problem" but there are still some risks. Hopefully all works out.

        From reports, though, it seems like crude is not the only game in town-- chemicals are picking up as well. Should continue so long as chem co's still looking to build out and expand US operations. Should benefit tanker cars and the covered hoppers if we are running larger amounts of plastic pellets around the country.

        Any thoughts?

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