SOURCE: Wabash National Corporation

February 08, 2010 16:55 ET

Wabash National Corporation Announces 2009 Fourth Quarter and Full Year Results

Fourth Quarter Operating EBITDA Improves Over Prior Year

LAFAYETTE, IN--(Marketwire - February 8, 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 $11.9 million for the fourth quarter of 2009, compared to an operating loss of $87.2 million for the fourth quarter of 2008. For the twelve months ended December 31, the Company reported operating losses of $66.1 million and $103.8 million for 2009 and 2008, respectively. Fourth quarter and full year 2008 results include a non-cash charge related to a goodwill impairment of $66.3 million.

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


             December       March      June     September     December
(Dollars in    31,           31,        30,        30,           31,
 thousands)   2008          2009       2009       2009          2009
            ---------     ---------  ---------  ---------     ---------
New Trailer
 Units Sold     9,400         2,700      3,200      3,600         3,300
Net Sales   $ 230,715     $  77,937  $  86,206  $  88,324     $  85,373
Gross
 Profit
 Margin          -2.1%        -19.9%      -6.1%      -0.4%         -2.2%
Loss from
 Operations $ (87,238)(1) $ (27,319) $ (16,664) $ (10,207)    $ (11,884)
Net (Loss)
 Income     $(111,906)(1) $ (28,284) $ (17,935) $ (66,404)(2) $  10,858 (2)
Operating
 EBITDA
 (Non-GAAP) $ (13,451)    $ (21,558) $ (10,687) $  (4,607)    $  (6,255)


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 Income (Loss) and a charge to income tax
           expense of $23.1 million included in Net Income (Loss).

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

Operating results for the fourth quarter of 2009 trended down sequentially from the third quarter, but were in line with expectations and the seasonality of the industry. 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) loss of $6.3 million was higher than the third quarter by approximately $1.6 million, reflective of slightly lower sales volumes and seasonally higher production costs for the quarter. The improvements in operating results and Operating EBITDA experienced in both the third and fourth quarters are reflective of cost reduction initiatives that have been implemented throughout the year, improved raw material costs and the impact of improved manufacturing operations. 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.

Dick Giromini, President and Chief Executive Officer, stated, "While our industry faced the most difficult economic period in decades, we made significant improvements in 2009 to our cost structure and operational efficiency. During the year, our associates were challenged with not only continuing to pursue our strategic initiatives, but also executing measures designed to improve our long-term value proposition. The results of our efforts are clear, as Wabash has meaningfully reduced its breakeven point and positioned itself for increased profitability as volume levels improve."

Giromini continued, "While the first quarter is seasonally one of the weakest periods, we remain optimistic about the prospects for our industry. We are encouraged to see order activity pick up, and our backlog, which as of the end of the year was $137 million, is up from $96 million in September, and $110 million as of a year ago. Key economic indicators have also shown noteworthy levels of stabilization and even incremental improvement. Additionally, industry sources expect trailer demand to increase during the third and fourth quarters of 2010, with demand improving markedly in 2011 and 2012. Although some challenges remain, we believe the worst is now behind us."

Financial Results

The Company reported net income of $10.9 million, or $0.15 per diluted share, for the fourth quarter of 2009 on net sales of $85 million. For the same quarter last year, the Company reported a net loss of $111.9 million, or $3.73 per diluted share. Fourth quarter new trailer sales totaled 3,300 units, which represents a 65% decline from the prior year period. For the twelve months ended December 31, 2009, the net loss totaled $101.8 million, or $3.48 per diluted share, on sales of $338 million. For the comparable period of 2008, the net loss totaled $125.8 million, or $4.21 per diluted share, on sales of $836 million.

Results for the three and twelve months ended December 2009 include a non-cash benefit of $20.5 million and a non-cash charge of $33.4 million, respectively, 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 on July 17, 2009. The change in the fair value of the warrant was driven by the change in the Company's stock price during the quarter and year.

Fourth Quarter 2009 Conference Call

Wabash National Corporation will conduct a conference call to review and discuss its fourth quarter results on February 9, 2010, 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 April 30, 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 and year ended December 31, 2009 contain the non-GAAP financial measure Operating EBITDA that excludes, among other things, charges incurred in 2009 as a result of the fair value accounting of the Company's outstanding stock warrants. 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 twelve month periods ended December 31, 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. 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. 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®, 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       Twelve Months Ended
                                December 31,            December 31,
                        ------------------------  ------------------------
                            2009         2008         2009         2008
                        -----------  -----------  -----------  -----------
Net sales               $    85,373  $   230,715  $   337,840  $   836,213
Cost of sales                87,255      235,457      360,750      815,289
                        -----------  -----------  -----------  -----------
   Gross profit              (1,882)      (4,742)     (22,910)      20,924
General and
 administrative
 expenses                     7,495       12,078       31,988       44,094
Selling expenses              2,507        4,101       11,176       14,290
Impairment of goodwill            -       66,317            -       66,317
                        -----------  -----------  -----------  -----------
   Loss from operations     (11,884)     (87,238)     (66,074)    (103,777)
Other income (expense)
   Decrease (Increase)
    in fair value of
    warrant                  20,536            -      (33,447)           -
   Interest expense            (920)      (1,308)      (4,379)      (4,657)
   (Loss) Gain on debt
    extinguishment                -            -         (303)         151
   Other, net                   166         (305)        (563)        (479)
                        -----------  -----------  -----------  -----------
   Income (loss) before
    income taxes              7,898      (88,851)    (104,766)    (108,762)
Income tax (benefit)
 expense                     (2,960)      23,055       (3,001)      17,064
                        -----------  -----------  -----------  -----------
Net income (loss)            10,858     (111,906)    (101,765)    (125,826)
Preferred stock
 dividends                    2,224            -        3,320            -
                        -----------  -----------  -----------  -----------
Net income (loss)
 applicable to common
 stockholders           $     8,634  $  (111,906) $  (105,085) $  (125,826)
                        ===========  ===========  ===========  ===========
Common stock dividends
 declared               $         -  $         -  $         -  $     0.135
                        ===========  ===========  ===========  ===========
Basic and diluted net
 income (loss) per
 share                  $      0.15  $     (3.73) $     (3.48) $     (4.21)
                        ===========  ===========  ===========  ===========
Comprehensive income
 (loss)
   Net income (loss)    $    10,858  $  (111,906) $  (101,765) $  (125,826)
   Reclassification
    adjustment for
    interest rate
    swaps included in
    net loss                      -            -        1,398            -
   Changes in fair
    value of derivatives,
    net of tax                    -       (1,376)         118       (1,516)
                        -----------  -----------  -----------  -----------
Net comprehensive
 income (loss)          $    10,858  $  (113,282) $  (100,249) $  (127,342)
                        ===========  ===========  ===========  ===========



Three months ended
 December 31,                          Retail &
   2009                Manufacturing Distribution Eliminations    Total
                        -----------  -----------  -----------  -----------
Net sales               $    72,622  $    17,007  $    (4,256) $    85,373
(Loss) Income from
 operations             $    (9,385) $    (2,577) $        78  $   (11,884)
New trailers shipped          3,200          300         (200)       3,300

   2008
Net sales               $   208,861  $    29,729  $    (7,875) $   230,715
(Loss) Income from
 operations             $   (84,227) $    (3,224) $       213  $   (87,238)
New trailers shipped          9,200          500         (300)       9,400

Twelve months ended
 December 31,
   2009
Net sales               $   279,518  $    72,299  $   (13,977) $   337,840
(Loss) Income from
 operations             $   (57,459) $    (8,827) $       212  $   (66,074)
New trailers shipped         12,600          800         (600)      12,800

   2008
Net sales               $   744,899  $   142,058  $   (50,744) $   836,213
(Loss) Income from
 operations             $   (98,840) $    (5,991) $     1,054  $  (103,777)
New trailers shipped         33,100        2,500       (2,300)      33,300




                              Three Months Ended      Twelve Months Ended
                                 December 31,             December 31,
                            ----------------------  ----------------------
                               2009        2008        2009        2008
                            ----------  ----------  ----------  ----------
Net income (loss)
 applicable to common
 stockholders               $    8,634  $ (111,906) $ (105,085) $ (125,826)
Dividends paid and
 undistributed earnings
 allocated to participating
 securities                     (3,929)        (34)          -        (132)
                            ----------  ----------  ----------  ----------
Net income (loss)
 applicable to common
 stockholders excluding
 amounts applicable to
 participating
 securities, basic and
 diluted                    $    4,705  $ (111,940) $ (105,085) $ (125,958)
                            ==========  ==========  ==========  ==========
Basic and diluted weighted
 average common shares
 outstanding                   30,359      30,016      30,237      29,954
                            ==========  ==========  ==========  ==========
Basic and diluted net
 income (loss) per share    $     0.15  $    (3.73) $    (3.48) $    (4.21)
                            ==========  ==========  ==========  ==========



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



                                                December 31,  December 31,
                                                    2009          2008
                                                ------------- -------------
                                                (Unaudited)
                            ASSETS
Current assets
   Cash and cash equivalents                    $       1,108 $      29,766
   Accounts receivable, net                            17,081        37,925
   Inventories                                         51,801        92,896
   Prepaid expenses and other                           6,877         5,307
                                                ------------- -------------
      Total current assets                             76,867       165,894

Property, plant and equipment, net                    108,802       122,035

Intangible assets                                      25,952        29,089

Other assets                                           12,156        14,956
                                                ------------- -------------
                                                $     223,777 $     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                                    30,201        42,798
   Other accrued liabilities                           34,583        45,449
   Warrant                                             46,673             -
                                                ------------- -------------
      Total current liabilities                       111,794       168,592

Long-term debt                                         28,437             -

Capital lease obligation                                4,469         4,803

Other noncurrent liabilities and contingencies          3,258         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     22,334             -

Stockholders' equity                                   53,485       153,437
                                                ------------- -------------
                                                $     223,777 $     331,974
                                                ============= =============



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


                                                 Years Ended December 31,
                                                --------------------------
                                                    2009          2008
                                                ------------  ------------
Cash flows from operating activities
  Net loss                                      $   (101,765) $   (125,826)
  Adjustments to reconcile net loss to net cash
   (used in) provided by operating activities
    Depreciation and amortization                     19,585        21,467
    Net (gain) loss on the sale of assets                (55)          606
    Loss (Gain) on debt extinguishment                   303          (151)
    Deferred income taxes                                  -        17,286
    Excess tax benefits from stock-based
     compensation                                          -            (6)
    Increase in fair value of warrant                 33,447             -
    Stock-based compensation                           3,382         4,990
    Impairment of goodwill                                 -        66,317
    Changes in operating assets and liabilities
      Accounts receivable                             20,845        30,827
      Inventories                                     41,095        20,229
      Prepaid expenses and other                      (1,570)          436
      Accounts payable and accrued liabilities       (22,666)       (5,657)
      Other, net                                         385           153
                                                ------------  ------------
        Net cash (used in) provided by
         Operating activities                         (7,014)       30,671

Cash flows from investing activities
  Capital expenditures                                  (981)      (12,613)
  Proceeds from the sale of property, plant and
   equipment                                             300           213
                                                ------------  ------------
        Net cash used in investing activities           (681)      (12,400)




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       276,853       202,908
  Payments under revolving credit facilities        (328,424)     (122,900)
  Payments under long-term debt obligations                -      (104,133)
  Principal payments under capital lease
   obligations                                          (334)         (193)
  Proceeds from issuance of preferred stock and
   warrant                                            35,000             -
  Debt issuance costs paid                            (1,420)           (4)
  Preferred stock issuance costs paid                 (2,638)            -
  Common stock dividends paid                              -        (5,510)
                                                ------------  ------------
        Net cash used in financing activities        (20,963)      (29,729)
                                                ------------  ------------

Net decrease in cash and cash equivalents            (28,658)      (11,458)
Cash and cash equivalents at beginning of year        29,766        41,224
                                                ------------  ------------
Cash and cash equivalents at end of year        $      1,108  $     29,766
                                                ============  ============



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


                                Three Months           Twelve Months
                             Ended December 31,      Ended December 31,
                           ----------------------  ----------------------
                              2009        2008        2009        2008
                           ----------  ----------  ----------  ----------
Net income (loss)          $   10,858  $ (111,906) $ (101,765) $ (125,826)
Income tax (benefit)
 expense                       (2,960)     23,055      (3,001)     17,064
(Decrease) Increase in fair
 value of warrant             (20,536)          -      33,447           -
Interest expense                  920       1,308       4,379       4,657
Depreciation and
 amortization                   5,153       5,932      19,585      21,467
Stock-based compensation          476       1,538       3,382       4,990
Impairment of goodwill              -      66,317           -      66,317
Other non-operating
 (income) expense                (166)        305         866         328
                           ----------  ----------  ----------  ----------
Operating EBITDA           $   (6,255) $  (13,451) $  (43,107) $  (11,003)
                           ==========  ==========  ==========  ==========


                                          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)
                           ==========  ==========  ==========  ==========


                                          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
Depreciation and
 amortization                   5,187       5,194       5,154       5,932
Stock-based compensation          863       1,307       1,282       1,538
Impairment of goodwill              -           -           -      66,317
Other non-operating
 (income) expense                (131)        182         (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