SOURCE: Wabash National Corporation

Wabash National Corporation

May 04, 2010 16:55 ET

Wabash National Corporation Announces First Quarter Results

First Quarter Operating EBITDA Improves 72% Year-Over-Year

LAFAYETTE, IN--(Marketwire - May 4, 2010) - Wabash National Corporation (NYSE: WNC) reported year-over-year operating improvements across several key financial and operating metrics. The Company reported an operating loss of $11.2 million for the first quarter of 2010, compared to an operating loss of $27.3 million for the first quarter of 2009. The improvement in operating loss of $16.1 million was achieved on essentially flat new trailer sales and reflects improvements in production volumes, lower raw material and component costs, and the cost and manufacturing optimization efforts implemented by the Company throughout 2008 and 2009.

The following is a summary of select operating and financial results for the past five quarters:

                                   Three Months Ended
               --------------------------------------------------------
(Dollars in    March 31, June 30, September 30, December 31,  March 31,
 thousands)      2009      2009      2009         2009          2010
               --------  --------  --------     --------      ---------
New Trailer
 Units Sold       2,700     3,200     3,600        3,300          2,600

Net Sales      $ 77,937  $ 86,206  $ 88,324     $ 85,373      $  78,274

Gross Profit
 Margin           -19.9%     -6.1%     -0.4%        -2.2%          -1.2%

Loss from
 Operations    $(27,319) $(16,664) $(10,207)    $(11,884)     $ (11,232)

Net (Loss)
 Income        $(28,284) $(17,935) $(66,404)(1) $ 10,858 (1)  $(139,079)(1)

Operating
 EBITDA
 (Non-GAAP)    $(21,558) $(10,687) $ (4,607)    $ (6,255)     $  (5,975)


Notes: (1) Quarterly Net Income (Loss) includes a non-cash benefit (charge)
       of approximately ($54.0) million, $20.5 million, and
       ($126.8) million related to the change in the fair value of the
       Company's warrant for third and fourth quarter of 2009 and first
       quarter of 2010, respectively.

Dick Giromini, President and Chief Executive Officer, stated, "While the first quarter is seasonally one of the weakest periods for our industry, we were pleased to deliver significant year-over-year improvement in our operating results and remain optimistic about the balance of the year. As evidenced by long-term agreements recently announced with Swift Transportation and Prime Inc., we are encouraged to see strength in quote and order activity and our backlog grow to $295 million as of March 31, up from $137 million at year-end, and $115 million as of a year ago. Economic indicators continue to show stability and, in some areas, incrementally improve. Additionally, industry forecasters expect trailer demand to increase throughout 2010, with demand improving significantly in 2011 and 2012. We remain focused on execution and believe Wabash is well positioned to succeed as the industry and economy continue to recover."

Giromini continued, "Given the improving demand environment and growing backlog, we are increasingly confident in the visibility of our end-markets and are now in a position to provide full-year trailer expectations, with new trailer unit shipments for the year projected to be in the 18,000 to 22,000 unit range. Additionally, second quarter shipments are expected to be in excess of 5,000 units. Given the improving economic environment, our growing backlog and the ongoing benefits of our cost optimization initiatives, we now expect to achieve breakeven or positive Operating EBITDA for the second quarter, as compared to our previous estimate of the second half of 2010. Needless to say, we are excited about the near-term and longer-term outlook for our business."

Operating results for the first quarter of 2010 were in line with internal expectations and the seasonality of the industry. Importantly, many metrics showed improvement during the quarter despite our lowest quarterly new trailer volumes in nearly twenty years. On a non-GAAP basis, our Operating EBITDA loss of $6.0 million was better than the fourth quarter of 2009 by approximately $0.3 million on approximately 700 fewer new trailer shipments units, but on approximately the same level of production volumes. A discussion of the Company's use of Operating EBITDA as a non-GAAP measure is included below, and a reconciliation of Operating EBITDA to net income (loss) is provided in the supplemental schedules included in this release.

Financial Results

The Company reported a net loss of $139.1 million and $4.64 per diluted share for the first quarter of 2010 on net sales of $78 million. For the same quarter last year, the Company reported a net loss of $28.3 million, or $0.94 per diluted share, on net sales of $78 million. First quarter new trailer sales totaled 2,600 units, a 100 unit decrease from the 2,700 units from the prior year period.

Results for the three months ended March 2010 include a non-cash charge of $126.8 million, or $4.17 per diluted share, related to the change in the fair value of the warrant issued to Trailer Investments as a part of the Securities Purchase Agreement entered into in 2009. The change in the fair value of the warrant was driven by the change in the Company's stock price during the quarter.

On April 30, 2010 the Company filed a universal shelf registration statement on Form S-3 with the Securities and Exchange Commission (SEC) that covers both up to $150 million in securities that may be offered by the Company and the warrant shares that may be offered by Lincolnshire Management. The registration statement has not yet been declared effective and the securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective.

First Quarter 2010 Conference Call

Wabash National Corporation will conduct a conference call to review and discuss its first quarter results on May 5, 2010, at 10:00 a.m. EDT. The phone number to access the conference call is 877-407-8035. The call can also be accessed live on the Company's website at www.wabashnational.com. For those unable to participate in the live webcast, the call will be archived at www.wabashnational.com within three hours of the conclusion of the live call and will remain available through July 28, 2010.

Non-GAAP Measures

In addition to disclosing financial results calculated in accordance with United States generally accepted accounting principles (GAAP), the financial information regarding the results of the quarter ended March 31, 2010 contain the non-GAAP financial measure Operating EBITDA that excludes, among other things, charges incurred as a result of the fair value accounting of the Company's outstanding stock warrants. The charge associated with these stock warrants is presented separately within Other Income and Expense on the Company's Condensed Consolidated Statements of Operations for the three month period ended March 31, 2010.

Operating EBITDA should not be considered a substitute for, or superior to, financial measures and results calculated in accordance with GAAP, including net loss, and reconciliations to GAAP financial statements should be carefully evaluated.

Operating EBITDA is defined as earnings before interest, taxes, preferred stock dividends, depreciation, amortization, stock based compensation, and other non-operating income and expense; as well as, any other non-cash special charges. Management believes Operating EBITDA provides useful information to investors regarding our results of operations because it helps us and our investors evaluate the ongoing operating performance of the Company. Management uses Operating EBITDA to evaluate consolidated as well as individual business segment results. Management uses Operating EBITDA when evaluating Company performance because we believe that the exclusion of the recurring and non-recurring items identified above provides management with a basis for assessing Company performance period to period. Management believes the presentation of Operating EBITDA, when combined with the primary GAAP presentation of operating income, is beneficial to an investor's complete understanding of our operating performance. A reconciliation of Operating EBITDA to net income (loss) is included in the tables following this release.

About Wabash National Corporation

Headquartered in Lafayette, Indiana, Wabash National® Corporation (NYSE: WNC) is one of the leading manufacturers of semi trailers in North America. Established in 1985, the Company specializes in the design and production of dry freight vans, refrigerated vans, flatbed trailers, drop deck trailers, dump trailers, truck bodies and intermodal equipment. Its innovative core products are sold under the DuraPlate®, ArcticLite®, FreightProTM, Eagle®, and BensonTM brand names. The Company operates two wholly owned subsidiaries: Transcraft® Corporation, a manufacturer of flatbed, drop deck and dump trailers as well as truck bodies; and Wabash National Trailer Centers, trailer service centers and retail distributors of new and used trailers and aftermarket parts throughout the U.S.

Safe Harbor Statement

This press release contains certain forward-looking statements, as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements convey the Company's current expectations or forecasts of future events. All statements contained in this press release other than statements of historical fact are forward-looking statements. These forward-looking statements include, among other things, statements regarding our outlook for new trailer shipments and Operating EBITDA, backlog, expectations regarding increases in trailer demand levels, the sufficiency of the Company's capital structure, the needs of the Company in the future, whether profitability can be achieved and encouraging signs in the macroeconomic landscape. These and the Company's other forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those implied by the forward-looking statements. Without limitation, these risks and uncertainties include the uncertain economic conditions including the possibility that demand expectations may not result in order increases for us, increased competition, reliance on certain customers and corporate partnerships, risks of customer pick-up delays, shortages and costs of raw materials, risks in implementing and sustaining improvements in our manufacturing capacity and cost containment, and dependence on industry trends. Readers should review and consider the various disclosures made by the Company in this press release and in the Company's reports to its stockholders and periodic reports on Forms 10-K and 10-Q.


                        WABASH NATIONAL CORPORATION
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
             (Dollars in thousands, except per share amounts)
                                (Unaudited)


                                             Three Months Ended March 31,
                                           -------------------------------
                                              2010                 2009
                                           ----------           ----------

Net sales                                  $   78,274           $   77,937
Cost of sales                                  79,250               93,413
                                           ----------           ----------
   Gross profit                                  (976)             (15,476)
General and administrative expenses             7,715                8,658
Selling expenses                                2,541                3,185
                                           ----------           ----------
   Loss from operations                       (11,232)             (27,319)
Other income (expense)
   Increase in fair value of warrant         (126,765)                   -
   Interest expense                            (1,027)              (1,005)
   Other, net                                      32                   55
                                           ----------           ----------
   Loss before income taxes                  (138,992)             (28,269)
Income tax expense                                 87                   15
                                           ----------           ----------
Net loss                                     (139,079)             (28,284)
Preferred stock dividends                       1,999                    -
                                           ----------           ----------
Net loss applicable to common stockholders $ (141,078)          $  (28,284)
                                           ==========           ==========
Basic and diluted net loss per share       $    (4.64)          $    (0.94)
                                           ==========           ==========
Comprehensive loss
   Net loss                                $ (139,079)          $  (28,284)
   Changes in fair value of derivatives,
    net of tax                                      -                  118
                                           ----------           ----------
Net comprehensive loss                     $ (139,079)          $  (28,166)
                                           ==========           ==========



Three months                        Retail &
 ended March 31, Manufacturing    Distribution    Eliminations     Total
    2010         --------------  --------------  --------------  ---------

Net sales        $       62,748  $       20,940  $       (5,414) $  78,274
(Loss) Income
 from operations $      (10,615) $         (619) $            2  $ (11,232)
New trailers
 shipped                  2,500             300            (200)     2,600

    2009
Net sales        $       60,638  $       20,683  $       (3,384) $  77,937
(Loss) Income
 from operations $      (24,264) $       (3,106) $           51  $ (27,319)
New trailers
 shipped                  2,600             200            (100)     2,700






                                                  Three Months Ended
                                                       March 31,
                                            ------------------------------
                                                 2010            2009
                                            --------------  --------------
Net loss applicable to common stockholders  $     (141,078) $      (28,284)
                                            ==============  ==============
Basic and diluted weighted average common
 shares outstanding                                 30,432          30,050
                                            --------------  --------------
Basic and diluted net loss per share        $        (4.64) $        (0.94)
                                            ==============  ==============


Due to the losses reported in 2010 and 2009, average diluted shares
outstanding for the three month periods ending March 31, 2010 and 2009
exclude the antidilutive effects of the following potential common shares
(in thousands):

                                                  Three Months Ended
                                                       March 31,
                                            ------------------------------
                                                 2010            2009
                                            --------------  --------------
Stock options and restricted stock                     151              32
Redeemable warrants                                 24,701               -
Options to purchase common shares                    1,706           2,119








                        WABASH NATIONAL CORPORATION
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                          (Dollars in thousands)



                                         March 31,           December 31,
                                            2010                 2009
                                       --------------       ---------------
                                         (Unaudited)
                      ASSETS

Current assets
   Cash                                $        1,378       $         1,108
   Accounts receivable, net                    23,822                17,081
   Inventories                                 74,036                51,801
   Prepaid expenses and other                   7,763                 6,877
                                       --------------       ---------------
      Total current assets                    106,999                76,867

Property, plant and equipment, net            105,560               108,802

Intangible assets                              25,176                25,952

Other assets                                   11,312                12,156
                                       --------------       ---------------
                                       $      249,047       $       223,777
                                       ==============       ===============


                    LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY

Current liabilities
   Current portion of capital lease
    obligation                         $          337       $           337
   Accounts payable                            51,675                30,201
   Other accrued liabilities                   36,129                34,583
   Warrant                                    173,438                46,673
                                       --------------       ---------------
      Total current liabilities               261,579               111,794

Long-term debt                                 42,435                28,437

Capital lease obligation                        4,384                 4,469

Other noncurrent liabilities and
 contingencies                                  3,073                 3,258

Preferred stock, net of discount,
 25,000,000 shares authorized, $0.01
 par value, 35,000 shares issued and
 outstanding                                   24,336                22,334

Stockholders' (deficit) equity                (86,760)               53,485
                                       --------------       ---------------
                                       $      249,047       $       223,777
                                       ==============       ===============







                        WABASH NATIONAL CORPORATION
              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                          (Dollars in thousands)
                                (Unaudited)


                                             Three Months Ended March 31,
                                           -------------------------------
                                                2010             2009
                                           --------------   --------------
Cash flows from operating activities
  Net loss                                 $     (139,079)  $      (28,284)
  Adjustments to reconcile net loss to net
   cash (used in) provided by
   operating activities
    Depreciation and amortization                   4,428            4,796
    Increase in fair value of warrant             126,765                -
    Stock-based compensation                          829              965
    Changes in operating assets and
     liabilities
      Accounts receivable                          (6,741)          20,677
      Inventories                                 (22,235)           8,278
      Prepaid expenses and other                     (886)           1,092
      Accounts payable and accrued
       liabilities                                 23,020           (4,724)
      Other, net                                      106              (78)
                                           --------------   --------------
        Net cash (used in) provided by
         operating activities              $      (13,793)  $        2,722

Cash flows from investing activities
  Capital expenditures                               (280)            (539)
  Proceeds from the sale of property, plant
   and equipment                                      493                6
                                           --------------   --------------
        Net cash provided by (used in)
         investing activities              $          213   $         (533)

Cash flows from financing activities
  Proceeds from exercise of stock options              16                -
  Borrowings under revolving credit
   facilities                                      89,661           18,529
  Payments under revolving credit
   facilities                                     (75,663)         (45,575)
  Principal payments under capital lease
   obligations                                        (85)             (81)
  Preferred stock issuance costs paid                 (79)               -
                                           --------------   --------------
        Net cash provided by (used in)
         financing activities              $       13,850   $      (27,127)
                                           --------------   --------------

Net increase (decrease) in cash and cash
 equivalents                               $          270   $      (24,938)
Cash and cash equivalents at beginning of
 period                                             1,108           29,766
                                           --------------   --------------
Cash and cash equivalents at end of period $        1,378   $        4,828
                                           ==============   ==============







                        WABASH NATIONAL CORPORATION
               RECONCILIATION OF GAAP FINANCIAL MEASURES TO
                        NON-GAAP FINANCIAL MEASURES
                          (Dollars in thousands)
                                (Unaudited)


                                                  Three Months Ended
                                                       March 31,
                                            ------------------------------
                                                 2010            2009
                                            --------------  --------------
Net loss                                    $     (139,079) $      (28,284)
Income tax expense                                      87              15
Increase in fair value of warrant                  126,765               -
Interest expense                                     1,027           1,005
Depreciation and amortization                        4,428           4,796
Stock-based compensation                               829             965
Other non-operating income                             (32)            (55)
                                            --------------  --------------
Operating EBITDA                            $       (5,975) $      (21,558)
                                            ==============  ==============



                                        Three Months Ended
                        --------------------------------------------------
                        March 31,  June 30,   September 30,   December 31,
                          2009       2009          2009           2009
                        ---------  ---------  --------------  ------------
Net (loss) income       $ (28,284) $ (17,935) $      (66,404) $     10,858
Income tax expense
 (benefit)                     15         (1)            (55)       (2,960)
Increase (Decrease) in
 fair value of warrant          -          -          53,983       (20,536)
Interest expense            1,005      1,306           1,148           920
Depreciation and
 amortization               4,796      4,804           4,832         5,153
Stock-based
 compensation                 965      1,173             768           476
Other non-operating
 (income) expense             (55)       (34)          1,121          (166)
                        ---------  ---------  --------------  ------------
Operating EBITDA        $ (21,558) $ (10,687) $       (4,607) $     (6,255)
                        =========  =========  ==============  ============


Contact Information

  • Press Contact:
    Allison Henk
    Marketing Communications Manager
    (765) 771-5674

    Investor Relations:
    (765) 771-5310