SOURCE: Wabash National Corporation

Wabash National Corporation

February 08, 2011 16:34 ET

Wabash National Corporation Announces Fourth Quarter and Full Year 2010 Results

Q4 2010 Income From Operations of $5.7 Million; Highest Since Q3 2007; Q4 2010 Operating EBITDA of $10.8 Million; Full Year Operating EBITDA of $4.9 Million; Q4 2010 Net Income of $4.9 Million, or $0.07 per Share

LAFAYETTE, IN--(Marketwire - February 8, 2011) - Wabash National Corporation (NYSE: WNC) reported year-over-year and sequential improvement across most financial and operating metrics. The Company reported operating income of $5.7 million for the fourth quarter of 2010, compared to an operating loss of $11.9 million for the fourth quarter of 2009. For the twelve months ended December 31, the Company reported an operating loss of $15.4 million and $66.1 million for 2010 and 2009, respectively. The improvement in operating income of $17.6 million and $50.7 million for the three and twelve month periods, respectively, resulted from higher production and shipment volumes; as well as, cost and manufacturing optimization enhancements implemented by the Company throughout 2008 and 2009. In addition, the fourth quarter and full year 2010 results benefited from the favorable experience on trailer warranties which expired of $2.8 million and $3.2 million, respectively.

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


                                     Three Months Ended
                 ---------------------------------------------------------
(Dollars in      December      March        June     September    December
 thousands)      31, 2009    31, 2010     30, 2010    30, 2010    31, 2010
                 --------    ---------    --------    --------    --------
New Trailer Units
 Sold               3,300        2,600       5,400       6,800      10,100
Net Sales        $ 85,373    $  78,274    $149,699    $170,848    $241,550
Gross Profit
 Margin              -2.2%        -1.2%        3.5%        3.8%        7.2%
Income (Loss)
 from Operations $(11,884)   $ (11,232)   $ (5,715)   $ (4,206)   $  5,736
Net Income (Loss)$ 10,858(1) $(139,079)(1)$ (5,602)(1)$ (1,938)(1)$  4,859
Operating EBITDA
 (Non-GAAP)      $ (6,255)   $  (5,975)   $   (493)   $    643    $ 10,752

Notes:  (1) Quarterly Net Income (Loss) includes a non-cash benefit
        (charge) of approximately $20.5 million, ($126.8) million,
        $1.9 million and $3.3 million related to the change in the fair
        value of the Company's warrant which was issued to a private
        investor in 2009 and fully exercised in 2010 for the fourth quarter
        of 2009 and the first, second, and third quarters of 2010,
        respectively.

Dick Giromini, President and Chief Executive Officer, stated, "Our operating results improved sequentially each quarter during 2010, culminating in our operating results for the fourth quarter which were our best since 2007. Of note, the Company generated positive Operating EBITDA of $10.8 million in the fourth quarter which drove our full year 2010 Operating EBITDA to a positive $4.9 million. Moreover, gross profit margin of 7.2%, represents a year-over-year improvement of 940 basis points. These results were driven by our continued efforts throughout 2010 to optimize our cost structure, improve operational efficiency, enhance our capital structure, and position the business to meet higher demand levels as the industry recovered during the second half of the year."

Mr. Giromini continued, "New trailer shipments of 10,100 for the fourth quarter met and slightly exceeded the high-end of our guidance, reflecting a healthier demand environment and improved pick-up performance by our customers during the quarter. Full year, new trailer shipments of 24,900, which were nearly double the level from 2009, combined with a backlog of approximately $480 million as of December 31, 2010, reinforces our belief that the recovery in our industry is well under way and that we are poised to capitalize on the improvement in demand. In fact, both FTR and ACT have recently increased their forecasts for 2011 industry trailer volumes to 174,000 units and 191,000 units, respectively, representing an approximate increase of 30 to 60 percent over 2010 levels."

Quarterly Operating EBITDA during 2010 showed sequential improvement and reached levels not experienced since 2007. On a non-GAAP basis, the Company's Operating EBITDA of $10.8 million was better than the third quarter of 2010 by approximately $10.1 million on approximately 3,300 additional new trailer shipments. 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 net income of $4.9 million and $0.07 per diluted share for the fourth quarter of 2010 on net sales of $242 million. Results for the three months ended December 31, 2010 include a benefit of $2.8 million related to the favorable experience on trailer warranties which expired, or an impact of $0.04 per diluted share. For the same quarter last year, the Company reported net income of $10.9 million, or $0.15 per diluted share, on net sales of $85 million. Results for the three months ended December 31, 2009 include a non-cash benefit of $20.5 million related to the decrease in the fair value of the Company's warrant which was issued in 2009 to a private investor and fully exercised in the third quarter of 2010, or an impact of $0.68 per diluted share.

Fourth quarter new trailer sales totaled 10,100 units, an increase of 6,800 units, or 206% from the prior year period. New trailer production for the period improved approximately 5% sequentially; however, shipments improved approximately 49% from the third quarter as customer delivery rates on new trailers improved significantly.

Fourth Quarter 2010 Conference Call

Wabash National Corporation will conduct a conference call to review and discuss its fourth quarter results on February 9, 2011, 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, 2011.

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 twelve months ended December 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 warrant outstanding. The charge or benefit associated with this warrant is presented separately within Other Income and Expense on the Company's Condensed Consolidated Statements of Operations for the twelve month period ended December 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, other non-cash charges associated with the Company's warrant issued in 2009 and fully exercised in 2010. Management believes Operating EBITDA provides useful information to investors regarding our results of operations. We provide this because we believe it is useful for investors to understand our performance period to period with the exclusion of the recurring and non-recurring items identified above. 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)


                           Three Months Ended       Twelve Months Ended
                              December 31,              December 31,
                        ------------------------  ------------------------
                            2010         2009         2010         2009
                        -----------  -----------  -----------  -----------
                        (Unaudited)  (Unaudited)  (Unaudited)
Net sales               $   241,550  $    85,373  $   640,372  $   337,840
Cost of sales               224,259       87,255      612,289      360,750
                        -----------  -----------  -----------  -----------
   Gross profit              17,291       (1,882)      28,083      (22,910)
General and
 administrative
 expenses                     8,582        7,495       32,831       31,988
Selling expenses              2,973        2,507       10,669       11,176
                        -----------  -----------  -----------  -----------
   Income (Loss) from
    operations                5,736      (11,884)     (15,417)     (66,074)
Other income (expense):
   Decrease (Increase)
    in fair value of
    warrant                       -       20,536     (121,587)     (33,447)
   Interest expense          (1,092)        (920)      (4,140)      (4,379)
   Other, net                    65          166         (667)        (866)
                        -----------  -----------  -----------  -----------
   Income (Loss) before
    income taxes              4,709        7,898     (141,811)    (104,766)
Income tax benefit             (150)      (2,960)         (51)      (3,001)
                        -----------  -----------  -----------  -----------
   Net income (loss)          4,859       10,858     (141,760)    (101,765)
Preferred stock
 dividends and early
 extinguishment                   -        2,224       25,454        3,320
                        -----------  -----------  -----------  -----------
Net income (loss)
 applicable to common
 stockholders           $     4,859  $     8,634  $  (167,214) $  (105,085)
                        ===========  ===========  ===========  ===========
Basic and diluted net
 income (loss) per
 share                  $      0.07  $      0.15  $     (3.36) $     (3.48)
                        ===========  ===========  ===========  ===========
Comprehensive income
 (loss)
   Net income (loss)    $     4,859  $    10,858  $  (141,760) $  (101,765)
   Reclassification
    adjustment for
    interest rate
    swaps included in
    net income (loss)             -            -            -        1,398
   Changes in fair
    value of
    derivatives, net of
    tax                           -            -            -          118
                        -----------  -----------  -----------  -----------
Net comprehensive
 income (loss)          $     4,859  $    10,858  $  (141,760) $  (100,249)
                        ===========  ===========  ===========  ===========



Three months ended                     Retail &
 December 31,          Manufacturing Distribution Eliminations    Total
                        -----------  -----------  -----------  -----------
   2010
Net sales               $   225,736  $    25,519  $    (9,705) $   241,550
Income (Loss) from
 operations             $     5,388  $       428  $       (80) $     5,736
New trailers shipped         10,100          400         (400)      10,100

   2009
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

Twelve months ended
 December 31,
   2010
Net sales               $   575,803  $    98,356  $   (33,787) $   640,372
(Loss) Income from
 operations             $   (15,532) $       297  $      (182) $   (15,417)
New trailers shipped         24,900        1,500       (1,500)      24,900

   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




                                 Three Months Ended   Twelve Months Ended
                                    December 31,          December 31,
                                --------------------  --------------------
                                  2010       2009       2010       2009
                                ---------  ---------  ---------  ---------
Basic net income (loss) per
 share:
  Net income (loss) applicable
   to common stockholders       $   4,859  $   8,634  $(167,214) $(105,085)
  Undistributed earnings
   allocated to participating
   securities                         (29)    (3,929)         -          -
                                ---------  ---------  ---------  ---------
  Net income (loss) applicable
   to common stockholders
   excluding amounts applicable
   to participating securities  $   4,830  $   4,705  $(167,214) $(105,085)
                                =========  =========  =========  =========
  Weighted average common
   shares outstanding              67,874     30,359     49,819     30,237
                                =========  =========  =========  =========
  Basic net income (loss) per
   share                        $    0.07  $    0.15  $   (3.36) $   (3.48)
                                =========  =========  =========  =========

Diluted net income (loss) per
 share:
  Net income (loss) applicable
   to common stockholders       $   4,859  $   8,634  $(167,214) $(105,085)
  Undistributed earnings
   allocated to participating
   securities                         (29)    (3,929)         -          -
                                ---------  ---------  ---------  ---------
  Net income (loss) applicable
   to common stockholders
   excluding amounts applicable
   to participating securities  $   4,830  $   4,705  $(167,214) $(105,085)
                                =========  =========  =========  =========

  Weighted average common
   shares outstanding              67,874     30,359     49,819     30,237
  Dilutive stock options and
   restricted stock                   455          -          -          -
                                ---------  ---------  ---------  ---------
  Diluted weighted average
   common shares outstanding       68,329     30,359     49,819     30,237
                                =========  =========  =========  =========
  Diluted net income (loss) per
   share                        $    0.07  $    0.15  $   (3.36) $   (3.48)
                                =========  =========  =========  =========




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

                                                December 31,  December 31,
                                                    2010          2009
                                                ------------- -------------
                                                (Unaudited)
                            ASSETS
Current assets
   Cash                                         $      21,200 $       1,108
   Accounts receivable, net                            37,853        17,081
   Inventories                                        110,850        51,801
   Prepaid expenses and other                           2,155         6,877
                                                ------------- -------------
      Total current assets                      $     172,058 $      76,867

Property, plant and equipment, net                     98,834       108,802

Intangible assets                                      22,863        25,952

Other assets                                            9,079        12,156
                                                ------------- -------------
                                                $     302,834 $     223,777
                                                ============= =============




            LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
   Current portion of capital lease obligations $         590 $         337
   Accounts payable                                    71,145        30,201
   Other accrued liabilities                           38,896        34,583
   Warrant                                                  -        46,673
                                                ------------- -------------
      Total current liabilities                 $     110,631 $     111,794

Long-term debt                                         55,000        28,437

Capital lease obligations                               3,964         4,469

Other noncurrent liabilities and contingencies          4,214         3,258

Preferred stock, net of discount, 25,000,000
 shares authorized, $0.01 par value, 0 and
 35,000 shares issued and outstanding,
 respectively                                               -        22,334

Stockholders' equity                                  129,025        53,485
                                                ------------- -------------
                                                $     302,834 $     223,777
                                                ============= =============



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

                                                    Twelve Months Ended
                                                       December 31,
                                                --------------------------
                                                    2010          2009
                                                ------------  ------------
                                                (Unaudited)

Cash flows from operating activities
 Net loss                                       $   (141,760) $   (101,765)
 Adjustments to reconcile net loss to net cash
  used in operating activities
   Depreciation and amortization                      16,855        19,585
   Loss on early debt extinguishment                       -           303
   Increase in fair value of warrant                 121,587        33,447
   Stock-based compensation                            3,489         3,382
   Changes in operating assets and liabilities
    Accounts receivable                              (20,772)       20,845
    Inventories                                      (59,062)       41,095
    Prepaid expenses and other                         3,024        (1,570)
    Accounts payable and accrued liabilities          45,251       (22,666)
    Other, net                                           697           330
                                                ------------  ------------
      Net cash used in operating activities     $    (30,691) $     (7,014)

Cash flows from investing activities
 Capital expenditures                                 (1,782)         (981)
 Proceeds from the sale of property, plant and
  equipment                                            1,813           300
                                                ------------  ------------
      Net cash provided by (used in) investing
       activities                               $         31  $       (681)

Cash flows from financing activities
 Proceeds from issuance of common stock, net of
  expenses                                            71,948             -
 Proceeds from exercise of stock options                 504             -
 Borrowings under revolving credit facilities        712,491       276,853
 Payments under revolving credit facilities         (685,928)     (328,424)
 Principal payments under capital lease
  obligations                                           (352)         (334)
 Proceeds from issuance of preferred stock and
  warrant                                                  -        35,000
 Payments under redemption of preferred stock        (47,791)            -
 Debt issuance costs paid                                  -        (1,420)
 Preferred stock issuance costs paid                    (120)       (2,638)
                                                ------------  ------------
      Net cash provided by (used in) financing
       activities                               $     50,752  $    (20,963)
                                                ------------  ------------

Net increase (decrease) in cash                 $     20,092  $    (28,658)
Cash at beginning of year                              1,108        29,766
                                                ------------  ------------
Cash at end of year                             $     21,200  $      1,108
                                                ============  ============




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

                                 Three Months Ended   Twelve Months Ended
                                    December 31,          December 31,
                                --------------------  --------------------
                                  2010       2009       2010       2009
                                ---------  ---------  ---------  ---------
Net income (loss)               $   4,859  $  10,858  $(141,760) $(101,765)
Income tax benefit                   (150)    (2,960)       (51)    (3,001)
(Decrease) Increase in fair
 value of warrant                       -    (20,536)   121,587     33,447
Interest expense                    1,092        920      4,140      4,379
Depreciation and amortization       3,993      5,153     16,855     19,585
Stock-based compensation            1,023        476      3,489      3,382
Other non-operating (income)
 expense                              (65)      (166)       667        866
                                ---------  ---------  ---------  ---------
Operating EBITDA                $  10,752  $  (6,255) $   4,927  $ (43,107)
                                =========  =========  =========  =========

                                           Three Months Ended
                                ------------------------------------------
                                   March      June     September December
                                    31,        30,        30,       31,
                                   2010       2010       2010      2010
                                ---------  ---------  ---------  ---------
Net (loss) income               $(139,079) $  (5,602) $  (1,938) $   4,859
Income tax expense (benefit)           87          -         12       (150)
Increase (Decrease) in fair
 value of warrant                 126,765     (1,913)    (3,265)         -
Interest expense                    1,027        998      1,023      1,092
Depreciation and amortization       4,428      4,295      4,139      3,993
Stock-based compensation              829        927        710      1,023
Other non-operating (income)
 expense                              (32)       802        (38)       (65)
                                ---------  ---------  ---------  ---------
Operating EBITDA                $  (5,975) $    (493) $     643  $  10,752
                                =========  =========  =========  =========

                                            Three Months Ended
                                ------------------------------------------
                                   March      June     September December
                                    31,        30,        30,       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