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SOURCE: Wabash National Corporation
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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)
========= ========= ============== ============