SOURCE: Wabash National Corporation

November 04, 2009 17:43 ET

Wabash National Corporation Announces Third Quarter Results

Third Quarter Achieves Sequential Improvement in Operating Results

LAFAYETTE, IN--(Marketwire - November 4, 2009) - Wabash National Corporation (NYSE: WNC) reported sequential operating improvements across several key financial and operating metrics. The Company reported an operating loss of $10.2 million for the third quarter of 2009, compared to an operating loss of $16.7 million for the second quarter of 2009. For the third quarter last year the Company reported an operating loss of $4.5 million. For the nine months ended September 30, the Company reported an operating loss of $54.2 million and $16.5 million for 2009 and 2008, respectively.

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

                                   Three Months Ended
               -----------------------------------------------------------
(Dollars in September 30, December 31,   March 31,  June 30, September 30,
 thousands)      2008        2008          2009      2009        2009
               --------  -------------   --------  --------  -------------
New Trailer
 Units Sold       9,700          9,400      2,700     3,200          3,600
Net Sales      $242,953  $     230,715   $ 77,937  $ 86,206  $      88,324
Gross Profit
 Margin             3.7%          -2.1%     -19.9%     -6.1%          -0.4%
Loss from
 Operations    $ (4,492) $  (87,238)(1)  $(27,319) $(16,664) $     (10,207)
Net Loss       $ (4,330) $ (111,906)(1)  $(28,284) $(17,935) $  (66,404)(2)
Operating
 EBITDA
 (Non-GAAP)    $  1,944  $     (13,451)  $(21,558)$ (10,687) $      (4,607)


Notes: (1) During the fourth quarter of 2008, the Company incurred
           a goodwill impairment charge of $66.3 million included in the
           Loss from Operations and Net Loss.
       (2) Third quarter 2009 Net Loss includes a non-cash charge of
           $54.0 million related to the increase in the fair value of the
           Company's warrant.


Operating results for the 2009 third quarter continued the trend of sequential improvement despite the depressed overall demand for new trailers. On a non-GAAP basis, Operating EBITDA (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) improved by over 50% for the second consecutive quarter to a loss of $4.6 million. The continued improvements in operating results and Operating EBITDA are reflective of cost reduction initiatives that have been implemented throughout the year, improved raw material costs, and the impact of improved manufacturing operations achieved from the Lafayette Transformation Project, which eliminated three dry van production lines. 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 loss is provided in the supplemental schedules included in this release.

Dick Giromini, President and Chief Executive Officer, stated, "For the third quarter, our operating loss has now shown improvement for three straight quarters at $10.2 million and Operating EBITDA improved by 57% versus the second quarter to a loss of $4.6 million. In addition, net sales improved for the second straight quarter. We are encouraged by these results despite the challenging demand environment and remain committed to returning the Company to profitability as quickly as possible. These results, combined with enhanced liquidity which as of September 30th was $36 million, give us confidence that we can weather the current cycle and build upon a stronger, more efficient foundation when market conditions improve."

Giromini continued, "Looking ahead, we see several encouraging signs in the macroeconomic landscape. Total manufacturing inventories appear to be bottoming and both tonnage and net trailer orders are incrementally increasing. While the operating environment will likely remain challenging for the near-term, we believe the worst is now behind us."

Financial Results

The Company reported a net loss of $66.4 million, or $2.23 per diluted share, for the third quarter of 2009 on net sales of $88 million. For the same quarter last year, the Company reported a net loss of $4.3 million, or $0.15 per diluted share. Third quarter new trailer sales totaled 3,600 units, which represents a 63% decline from the prior year period. For the nine months ended September 30, 2009, the net loss totaled $112.6 million or $3.77 per diluted share on sales of $252 million. For the comparable period of 2008, the net loss totaled $13.9 million, or $0.47 per diluted share, on sales of $605 million.

Three and nine month results for 2009 include a non-cash charge of $54.0 million related to an increase in the fair value of the warrant issued to Trailer Investments as a part of the Securities Purchase Agreement entered into on July 17, 2009. The increase in the fair value of the warrant was driven by the increase in the Company's stock price during the quarter.

Third Quarter 2009 Conference Call

Wabash National Corporation will conduct a conference call to review and discuss its third quarter results on November 5, 2009, at 10:00 a.m. EST. 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 January 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 three and nine month periods ended September 30, 2009 contain the non-GAAP financial measure Operating EBITDA that excludes, among other things, charges incurred in the third quarter of 2009 as a result of the fair value accounting of the Company's outstanding stock warrants of approximately $54 million. The charge associated with these stock warrants are presented separately within Other Income and Expense on the Company's Condensed Consolidated Statements of Operations for the three and nine month periods ended September 30, 2009.

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 (asset impairments). 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. We also use Operating EBITDA because we believe that it provides useful supplemental information to investors regarding our ongoing operating performance and that 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 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®, FreightPro™, Eagle®, and Benson™ 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, 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 current contraction in demand for transportation equipment associated with current economic conditions, 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      Nine Months Ended
                                September 30,           September 30,
                            ----------------------  ----------------------
                               2009        2008        2009        2008
                            ----------  ----------  ----------  ----------

NET SALES                   $   88,324  $  242,953  $  252,467  $  605,498
COST OF SALES                   88,645     233,965     273,495     579,832
                            ----------  ----------  ----------  ----------
   Gross profit                   (321)      8,988     (21,028)     25,666
GENERAL AND ADMINISTRATIVE
 EXPENSES                        7,320      10,060      24,493      32,016
SELLING EXPENSES                 2,566       3,420       8,669      10,189
                            ----------  ----------  ----------  ----------
   Loss from operations        (10,207)     (4,492)    (54,190)    (16,539)
OTHER INCOME (EXPENSE)
   Increase in fair value
    of warrant                 (53,983)          -     (53,983)          -
   Interest expense             (1,148)     (1,154)     (3,459)     (3,349)
   (Loss) Gain on debt
    extinguishment                (303)          -        (303)        151
   Other, net                     (818)         28        (729)       (174)
                            ----------  ----------  ----------  ----------
   Loss before income taxes    (66,459)     (5,618)   (112,664)    (19,911)
INCOME TAX BENEFIT                 (55)     (1,288)        (41)     (5,991)
                            ----------  ----------  ----------  ----------
NET LOSS                       (66,404)     (4,330)   (112,623)    (13,920)
PREFERRED STOCK DIVIDENDS        1,096           -       1,096           -
                            ----------  ----------  ----------  ----------
NET LOSS APPLICABLE TO
 COMMON STOCKHOLDERS        $  (67,500) $   (4,330) $ (113,719) $  (13,920)
                            ==========  ==========  ==========  ==========
COMMON STOCK DIVIDENDS
 DECLARED                   $        -  $    0.045  $        -  $    0.135
                            ==========  ==========  ==========  ==========
BASIC AND DILUTED NET LOSS
 PER SHARE                  $    (2.23) $    (0.15) $    (3.77) $    (0.47)
                            ==========  ==========  ==========  ==========
COMPREHENSIVE LOSS
   Net loss                 $  (66,404) $   (4,330) $ (112,623) $  (13,920)
   Reclassification
    adjustment for interest
    rate swaps included in
    net loss                     1,167           -       1,398           -
   Changes in fair value of
    derivatives (net of
    tax)                             -        (140)        118        (140)
                            ----------  ----------  ----------  ----------
NET COMPREHENSIVE LOSS      $  (65,237) $   (4,470) $ (111,107) $  (14,060)
                            ==========  ==========  ==========  ==========



Three months ended                     Retail &
 September 30,          Manufacturing Distribution Eliminations   Total
                          ----------  -----------  -----------  ----------
     2009
Net sales                 $   75,371  $   16,410   $   (3,457)  $   88,324
(Loss) Income from
 operations               $   (8,284) $   (1,961)  $       38   $  (10,207)
New trailers shipped           3,600         100         (100)  $    3,600

     2008
Net sales                 $  217,657  $   43,115   $  (17,819)  $  242,953
(Loss) Income from
 operations               $   (3,221) $   (1,381)  $      110   $   (4,492)
New trailers shipped           9,600         900         (800)       9,700

Nine months ended
 September 30,
     2009
Net sales                 $  206,896  $   55,292   $   (9,721)  $  252,467
(Loss) Income from
 operations               $  (48,113) $   (6,250)  $      173   $  (54,190)
New trailers shipped           9,400         500         (400)  $    9,500

     2008
Net sales                 $  536,038  $  112,329   $  (42,869)  $  605,498
(Loss) Income from
 operations               $  (14,613) $   (2,767)  $      841   $  (16,539)
New trailers shipped          23,900       2,000       (1,900)      24,000






                              Three Months Ended      Nine Months Ended
                                September 30,           September 30,
                            ----------------------  ----------------------
                               2009        2008        2009        2008
                            ----------  ----------  ----------  ----------
Net loss applicable to
 common stockholders        $  (67,500) $   (4,330) $ (113,719) $  (13,920)
Dividends paid on unvested
 restricted shares                   -         (34)          -        (100)
                            ----------  ----------  ----------  ----------
Net loss applicable to
 common stockholders
 excluding amounts
 applicable to unvested
 restricted shares, basic
 and diluted                $  (67,500) $   (4,364) $ (113,719) $  (14,020)
                            ==========  ==========  ==========  ==========
Basic and diluted weighted
 average common shares
 outstanding                    30,331      29,993      30,196      29,933
                            ==========  ==========  ==========  ==========
Basic and diluted net loss
 per share                  $    (2.23) $    (0.15) $    (3.77) $    (0.47)
                            ==========  ==========  ==========  ==========


The computation of diluted net loss per share for the three and nine month
periods ending September 30, 2008 excludes the after-tax equivalent of
interest on the Company's Senior Convertible Notes (Convertible Notes)
of $0.1 million and $0.8 million, respectively. Average diluted shares
outstanding for the three and nine month periods ending September 30, 2009
and 2008 also exclude the antidilutive effects of the following potential
common shares (in thousands):


                              Three Months Ended      Nine Months Ended
                                September 30,           September 30,
                            ----------------------  ----------------------
                               2009        2008        2009        2008
                            ----------  ----------  ----------  ----------
Convertible Notes
 equivalent shares                   -         472           -       2,281
Stock options and
 restricted stock                    -         125          11         107
Redeemable warrants             20,333           -       6,852           -
Options to purchase common
 shares                          2,143       1,502       2,164       1,618





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



                                                September 30, December 31,
                                                    2009          2008
                                                ------------- -------------
                                                 (Unaudited)
                     ASSETS
CURRENT ASSETS
   Cash and cash equivalents                    $       2,798 $      29,766
   Accounts receivable, net                            22,854        37,925
   Inventories                                         59,507        92,896
   Prepaid expenses and other                           3,222         5,307
                                                ------------- -------------
      Total current assets                             88,381       165,894

PROPERTY, PLANT AND EQUIPMENT, net                    112,333       122,035

INTANGIBLE ASSETS                                      26,730        29,089

OTHER ASSETS                                           13,053        14,956
                                                ------------- -------------
                                                $     240,497 $     331,974
                                                ============= =============




      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
   Current portion of long-term debt            $           - $      80,008
   Current portion of capital lease obligation            337           337
   Accounts payable                                    34,720        42,798
   Other accrued liabilities                           35,711        45,449
   Warrant                                             67,208             -
                                                ------------- -------------
      Total current liabilities                       137,976       168,592

LONG-TERM DEBT                                         30,069             -

CAPITAL LEASE OBLIGATION                                4,553         4,803

OTHER NONCURRENT LIABILITIES AND CONTINGENCIES          4,115         5,142

PREFERRED STOCK, net of discount, 25,000,000
 shares authorized, $0.01 par value,
 35,000 and 0 shares issued and outstanding,
 respectively                                          19,404             -

STOCKHOLDERS' EQUITY                                   44,380       153,437
                                                ------------- -------------
                                                $     240,497 $     331,974
                                                ============= =============





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


                                                      Nine Months Ended
                                                        September 30,
                                                    ----------------------
                                                       2009        2008
                                                    ----------  ----------
CASH FLOWS FROM OPERATING ACTIVITIES
 Net loss                                           $ (112,623) $  (13,920)
 Adjustments to reconcile net loss to net cash
  (used in) provided by operating activities
   Depreciation and amortization                        14,432      15,535
   Net loss on the sale of assets                            5         236
   Loss (Gain) on debt extinguishment                      303        (151)
   Increase in fair value of warrant                    53,983           -
   Deferred income taxes                                     -      (5,849)
   Excess tax benefits from stock-based compensation         -          (6)
   Stock-based compensation                              2,906       3,452
   Changes in operating assets and liabilities
     Accounts receivable                                15,071      (7,104)
     Inventories                                        33,389     (19,716)
     Prepaid expenses and other                          2,084       2,028
     Accounts payable and accrued liabilities          (17,020)     33,705
     Other, net                                            (76)         85
                                                    ----------  ----------
       Net cash (used in) provided by operating
        activities                                      (7,546)      8,295

CASH FLOWS FROM INVESTING ACTIVITIES
 Capital expenditures                                     (669)     (8,037)
 Proceeds from the sale of property, plant and
  equipment                                                125         131
                                                    ----------  ----------
       Net cash used in investing activities              (544)     (7,906)




CASH FLOWS FROM FINANCING ACTIVITIES
 Proceeds from exercise of stock options                     -          97
 Excess tax benefits from stock-based compensation           -           6
 Borrowings under revolving credit facilities          179,018     139,250
 Payments under revolving credit facilities           (228,957)    (60,250)
 Payments under long-term debt obligations                   -    (104,133)
 Principal payments under capital lease obligations       (250)       (107)
 Proceeds from issuance of preferred stock and
  warrant                                               35,000           -
 Debt issuance costs paid                               (1,275)         (4)
 Preferred stock issuance costs paid                    (2,414)          -
 Common stock dividends paid                                 -      (4,127)
                                                    ----------  ----------
       Net cash used in financing activities           (18,878)    (29,268)
                                                    ----------  ----------

NET DECREASE IN CASH AND CASH EQUIVALENTS              (26,968)    (28,879)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD        29,766      41,224
                                                    ----------  ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD          $    2,798  $   12,345
                                                    ==========  ==========





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


                              Three Months Ended      Nine Months Ended
                                September 30,           September 30,
                            ----------------------  ----------------------
                               2009        2008        2009        2008
                            ----------  ----------  ----------  ----------
Net loss                    $  (66,404) $   (4,330) $ (112,623) $  (13,920)
Income tax benefit                 (55)     (1,288)        (41)     (5,991)
Increase in fair value of
 warrant                        53,983           -      53,983           -
Interest expense                 1,148       1,154       3,459       3,349
Loss (Gain) on debt
 extinguishment                    303           -         303        (151)
Depreciation                     3,418       3,667      10,147      11,062
Amortization                     1,414       1,487       4,285       4,473
Stock-based compensation           768       1,282       2,906       3,452
Other non-operating expense
 (income)                          818         (28)        729         174
                            ----------  ----------  ----------  ----------
Operating EBITDA            $   (4,607) $    1,944  $  (36,852) $    2,448
                            ==========  ==========  ==========  ==========


                                    Three Months Ended
                            ----------------------------------
                             March 31,   June 30,  September 30,
                               2009        2009         2009
                            ----------  ----------  ----------
Net loss                    $  (28,284) $  (17,935) $  (66,404)
Income tax expense
 (benefit)                          15          (1)        (55)
Increase in fair value of
 warrant                             -           -      53,983
Interest expense                 1,005       1,306       1,148
Loss on debt extinguishment          -           -         303
Depreciation                     3,348       3,381       3,418
Amortization                     1,448       1,423       1,414
Stock-based compensation           965       1,173         768
Other non-operating expense
 (income)                          (55)        (34)        818
                            ----------  ----------  ----------
Operating EBITDA            $  (21,558) $  (10,687) $   (4,607)
                            ==========  ==========  ==========


                                          Three Months Ended
                           -----------------------------------------------
                            March 31,   June 30, September 30, December 31,
                              2008        2008        2008        2008
                           -----------  ----------  ----------  ----------
Net loss                   $    (6,387) $   (3,203) $   (4,330) $ (111,906)
Income tax (benefit)
 expense                        (3,693)     (1,010)     (1,288)     23,055
Interest expense                 1,174       1,021       1,154       1,308
Gain on debt extinguishment       (124)        (27)          -           -
Depreciation                     3,690       3,705       3,667       4,458
Amortization                     1,497       1,489       1,487       1,474
Stock-based compensation           863       1,307       1,282       1,538
Impairment of goodwill               -           -           -      66,317
Other non-operating expense
 (income)                           (7)        209         (28)        305
                           -----------  ----------  ----------  ----------
Operating EBITDA           $    (2,987) $    3,491  $    1,944  $  (13,451)
                           ===========  ==========  ==========  ==========


Contact Information

  • Press Contact:
    Jim Hasty
    VP, Marketing & Sales Administration
    (765) 771-5487

    Investor Relations:
    (765) 771-5310