| | | | | |
Press Contact: Allison Henk
Marketing Communications Manager
(765) 771-5674 | |  | | Investor Relations:
(765) 771-5310 |
FOR IMMEDIATE RELEASE
Wabash National Corporation Announces
2007 Fourth Quarter and Full Year Results
LAFAYETTE, Ind. — February 11, 2008 — Wabash National Corporation (NYSE: WNC) reported net income of $5.6 million, or $0.18 per diluted share for the fourth quarter of 2007 on net sales of $258 million. For the same quarter last year, the company reported a net loss of $5.0 million, or ($0.16) per diluted share on net sales of $354 million. For the twelve months ending December 31, 2007, net income totaled $16.3 million or $0.52 per diluted share on net sales of $1.1 billion. For the comparable period in 2006, the company reported net income of $9.4 million or $0.30 per diluted share on net sales of $1.3 billion.
Fourth quarter and full year 2007 results include the recognition of $3.3 million of foreign currency gains related to the company’s sale of its Canadian branches and a gain of $0.5 million on the early retirement of long term debt. Results for the 2006 quarter and year included a non-cash goodwill impairment charge in our retail business of $15.4 million and the reversal of a valuation allowance of deferred tax assets amounting to $4.8 million.
Fourth quarter new trailer sales totaled 10,800 units, a decrease of 11 percent from the third quarter. New trailer production for the period declined approximately 18 percent. The sequential reduction in production is consistent with the company’s focus of managing production and inventory to demand levels but is a primary cause of fourth quarter margin compression.
Dick Giromini, President and Chief Executive Officer, stated, “In terms of process yield, productivity and organizational effectiveness, Wabash National’s 2007 performance measures up favorably to any previous year in our history. While weak demand, commodity cost pressures and competitive pricing adversely impacted our margin performance, our strategic initiatives continue to gain traction and will serve to improve the company’s long-term profitability. That said, freight demand has been depressed since mid 2006 and we enter 2008 with a weak but moderating demand environment. We expect a challenging demand market during the first half of 2008, with demand increasing during the second half of the year.”
“While quote activity remains strong, order placement remains slow as customers are taking a wait and see approach,” continued Giromini. “Our backlog of orders at December 31, 2007 was approximately $336 million. We continue to have great success in diversifying our customer base adding 40 new mid-market carriers in 2007.”
Wabash National Corporation will conduct a conference call to review and discuss its fourth quarter results on Monday, February 11, 2008, 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 atwww.wabashnational.com within three hours of the conclusion of the live call and will remain available through May 5, 2008.
Headquartered in Lafayette, Ind., 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, and intermodal equipment. Its innovative core products are sold under the DuraPlate®, ArcticLite®, and Eagle® brand names. The company operates two wholly owned subsidiaries: Transcraft Corporation, a manufacturer of flatbed and drop deck trailers; and Wabash National Trailer Centers, a retail distributor of new and used trailers and aftermarket parts throughout the U.S.
This press release contains certain forward-looking statements, as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements are, however, 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 increased competition, reliance on certain customers and corporate partnerships, shortages and costs of raw materials, continued 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 its reports to its stockholders and periodic reports on Forms 10-K and 10-Q.
# #
WABASH NATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | Three Months | | | Twelve Months | |
| | | Ended December 31, | | | Ended December 31, | |
| | | 2007 | | | 2006 | | | 2007 | | | 2006 | |
| NET SALES | | $ | 257,824 | | | $ | 354,199 | | | $ | 1,102,544 | | | $ | 1,312,180 | |
| COST OF SALES | | | 238,713 | | | | 325,882 | | | | 1,010,823 | | | | 1,207,687 | |
| | | | | | | | | | | | | |
| Gross profit | | | 19,111 | | | | 28,317 | | | | 91,721 | | | | 104,493 | |
| GENERAL AND ADMINISTRATIVE EXPENSES | | | 11,180 | | | | 14,159 | | | | 49,512 | | | | 51,157 | |
| SELLING EXPENSES | | | 3,714 | | | | 4,624 | | | | 15,743 | | | | 15,070 | |
| IMPAIRMENT OF GOODWILL | | | — | | | | 15,373 | | | | — | | | | 15,373 | |
| | | | | | | | | | | | | |
| Income (loss) from operations | | | 4,217 | | | | (5,839 | ) | | | 26,466 | | | | 22,893 | |
| OTHER INCOME (EXPENSE): | | | | | | | | | | | | | | | | |
| Interest expense | | | (1,345 | ) | | | (1,758 | ) | | | (5,755 | ) | | | (6,921 | ) |
| Foreign exchange, net | | | 3,357 | | | | (49 | ) | | | 3,818 | | | | (77 | ) |
| Gain on debt extinguishment | | | 546 | | | | — | | | | 546 | | | | — | |
| Other, net | | | 205 | | | | 530 | | | | (387 | ) | | | 407 | |
| | | | | | | | | | | | | |
| Income (loss) before income taxes | | | 6,980 | | | | (7,116 | ) | | | 24,688 | | | | 16,302 | |
| INCOME TAX EXPENSE (BENEFIT) | | | 1,344 | | | | (2,163 | ) | | | 8,403 | | | | 6,882 | |
| | | | | | | | | | | | | |
| NET INCOME (LOSS) | | $ | 5,636 | | | $ | (4,953 | ) | | $ | 16,285 | | | $ | 9,420 | |
| | | | | | | | | | | | | |
| COMMON STOCK DIVIDENDS DECLARED | | $ | 0.045 | | | $ | 0.045 | | | $ | 0.180 | | | $ | 0.180 | |
| | | | | | | | | | | | | |
| BASIC NET INCOME (LOSS) PER SHARE | | $ | 0.19 | | | $ | (0.16 | ) | | $ | 0.54 | | | $ | 0.30 | |
| | | | | | | | | | | | | |
| DILUTED NET INCOME (LOSS) PER SHARE | | $ | 0.18 | | | $ | (0.16 | ) | | $ | 0.52 | | | $ | 0.30 | |
| | | | | | | | | | | | | |
| COMPREHENSIVE INCOME (LOSS) |
| Net income (loss) | | $ | 5,636 | | | $ | (4,953 | ) | | $ | 16,285 | | | $ | 9,420 | |
| Reclassification adjustment for foreign exchange gains included in net income | | | (3,322 | ) | | | — | | | | (3,322 | ) | | | — | |
| Foreign currency translation adjustment | | | 8 | | | | (226 | ) | | | 347 | | | | 617 | |
| | | | | | | | | | | | | |
| NET COMPREHENSIVE INCOME (LOSS) | | $ | 2,322 | | | $ | (5,179 | ) | | $ | 13,310 | | | $ | 10,037 | |
| | | | | | | | | | | | | |
| | | | | | | Retail and | | | | | | Consolidated |
| | | Manufacturing | | Distribution | | Eliminations | | Totals |
| | | | | | | | | | | | | |
Three months ended | | | | | | | | | | | | | | | | |
2007 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net sales | | $ | 237,758 | | | $ | 32,921 | | | $ | (12,855 | ) | | $ | 257,824 | |
| Income (loss) from operations | | $ | 6,356 | | | $ | (2,219 | ) | | $ | 80 | | | $ | 4,217 | |
2006 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net sales | | $ | 327,324 | | | $ | 46,651 | | | $ | (19,776 | ) | | $ | 354,199 | |
| Income (loss) from operations | | $ | 9,691 | | | $ | (15,579 | ) | | $ | 49 | | | $ | (5,839 | ) |
Twelve months ended | | | | | | | | | | | | | | | | |
2007 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net sales | | $ | 1,014,969 | | | $ | 150,490 | | | $ | (62,915 | ) | | $ | 1,102,544 | |
| Income (loss) from operations | | $ | 30,568 | | | $ | (3,556 | ) | | $ | (546 | ) | | $ | 26,466 | |
2006 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net sales | | $ | 1,197,683 | | | $ | 191,463 | | | $ | (76,966 | ) | | $ | 1,312,180 | |
| Income (loss) from operations | | $ | 36,782 | | | $ | (13,487 | ) | | $ | (402 | ) | | $ | 22,893 | |
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Twelve Months Ended | |
| | | December 31, | | | December 31, | |
| | | 2007 | | | 2006 | | | 2007 | | | 2006 | |
| Basic net income (loss) per share: | | | | | | | | | | | | | | | | |
| Net income (loss) applicable to common stockholders | | $ | 5,636 | | | $ | (4,953 | ) | | $ | 16,285 | | | $ | 9,420 | |
| | | | | | | | | | | | | |
| Weighted average common shares outstanding | | | 29,843 | | | | 30,968 | | | | 30,060 | | | | 31,102 | |
| | | | | | | | | | | | | |
| Basic net income (loss) per share | | $ | 0.19 | | | $ | (0.16 | ) | | $ | 0.54 | | | $ | 0.30 | |
| | | | | | | | | | | | | |
| |
| Diluted net income per share: | | | | | | | | | | | | | | | | |
| Net income applicable to common stockholders | | $ | 5,636 | | | | | | | $ | 16,285 | | | $ | 9,420 | |
| After-tax equivalent of interest on convertible notes | | | 683 | | | | | | | | 2,905 | | | | — | |
| | | | | | | | | | | | | | |
| Diluted net income applicable to common stockholders | | $ | 6,319 | | | | | | | $ | 19,190 | | | $ | 9,420 | |
| | | | | | | | | | | | | | |
| |
| Weighted average common shares outstanding | | | 29,843 | | | | | | | | 30,060 | | | | 31,102 | |
| Dilutive stock options/shares | | | 63 | | | | | | | | 207 | | | | 189 | |
| Convertible notes equivalent shares | | | 6,173 | | | | | | | | 6,549 | | | | — | |
| | | | | | | | | | | | | | |
| Diluted weighted average common shares outstanding | | | 36,079 | | | | | | | | 36,816 | | | | 31,291 | |
| | | | | | | | | | | | | |
| Diluted net income (loss) per share | | $ | 0.18 | | | $ | (0.16 | ) | | $ | 0.52 | | | $ | 0.30 | |
| | | | | | | | | | | | | |
Average diluted shares outstanding in 2006 excludes the antidilutive effects of the Company’s Senior Convertible Notes.
WABASH NATIONAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(Unaudited)
| | | | | | | | | |
| | | December 31, | | | December 31, | |
| | | 2007 | | | 2006 | |
| ASSETS |
| CURRENT ASSETS: | | | | | | | | |
| Cash and cash equivalents | | $ | 41,224 | | | $ | 29,885 | |
| Accounts receivable, net | | | 68,752 | | | | 110,462 | |
| Inventories | | | 113,125 | | | | 133,133 | |
| Deferred income taxes | | | 14,514 | | | | 26,650 | |
| Prepaid expenses and other | | | 4,046 | | | | 4,088 | |
| | | | | | | |
| Total current assets | | | 241,661 | | | | 304,218 | |
| PROPERTY, PLANT AND EQUIPMENT, net | 122,063 | | | | 129,325 |
| DEFERRED INCOME TAXES | | | 2,772 | | | | — | |
| GOODWILL | | | 66,317 | | | | 66,692 | |
| INTANGIBLE ASSETS | | | 32,498 | | | | 35,998 | |
| OTHER ASSETS | | | 18,271 | | | | 20,250 | |
| | | | | | | |
| | | $ | 483,582 | | | $ | 556,483 | |
| | | | | | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
| CURRENT LIABILITIES: | | | | | | | | |
| Accounts payable | | $ | 40,787 | | | $ | 90,632 | |
| Other accrued liabilities | | | 54,258 | | | | 58,706 | |
| | | | | | | |
| Total current liabilities | | | 95,045 | | | | 149,338 | |
| LONG-TERM DEBT | | | 104,500 | | | | 125,000 | |
| DEFERRED INCOME TAXES | | | — | | | | 1,556 | |
| OTHER NONCURRENT LIABILITIES AND CONTINGENCIES | 4,108 | | | | 2,634 |
| STOCKHOLDERS’ EQUITY | | | 279,929 | | | | 277,955 | |
| | | | | | | |
| | | $ | 483,582 | | | $ | 556,483 | |
| | | | | | | |
WABASH NATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
| | | | | | | | | |
| | | Years Ended December 31, | |
| | | 2007 | | | 2006 | |
| CASH FLOWS FROM OPERATING ACTIVITIES: |
| Net income | | $ | 16,285 | | | $ | 9,420 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | |
| Depreciation and amortization | | | 19,467 | | | | 20,598 | |
| Net loss (gain) on the sale of assets | | | 116 | | | | (796 | ) |
| Foreign exchange gain on disposition of Canadian subsidiary | | | (3,322 | ) | | | — | |
| Gain on debt extinguishment | | | (546 | ) | | | — | |
| Deferred income taxes | | | 8,182 | | | | 7,744 | |
| Excess tax benefits from stock-based compensation | | | (33 | ) | | | (352 | ) |
| Stock-based compensation | | | 4,358 | | | | 3,978 | |
| Impairment of goodwill | | | — | | | | 15,373 | |
| Changes in operating assets and liabilities: | | | | | | | | |
| Accounts receivable | | | 41,710 | | | | 26,141 | |
| Finance contracts | | | 7 | | | | 1,497 | |
| Inventories | | | 19,958 | | | | (20,332 | ) |
| Prepaid expenses and other | | | 6 | | | | 1,716 | |
| Accounts payable and accrued liabilities | | | (48,487 | ) | | | (15,649 | ) |
| Other, net | | | 1,625 | | | | 2,431 | |
| | | | | | | |
| Net cash provided by operating activities | | $ | 59,326 | | | $ | 51,769 | |
| CASH FLOWS FROM INVESTING ACTIVITIES: |
| Capital expenditures | | | (6,714 | ) | | | (12,931 | ) |
| Acquisition, net of cash acquired | | | (4,500 | ) | | | (69,307 | ) |
| Proceeds from the sale of property, plant and equipment | | | 147 | | | | 7,121 | |
| | | | | | | |
| Net cash used in investing activities | | $ | (11,067 | ) | | $ | (75,117 | ) |
| CASH FLOWS FROM FINANCING ACTIVITIES: |
| Proceeds from exercise of stock options | | | 74 | | | | 762 | |
| Excess tax benefits from stock-based compensation | | | 33 | | | | 352 | |
| Borrowings under revolving credit facilities | | | 103,721 | | | | 243,313 | |
| Payments under revolving credit facilities | | | (103,721 | ) | | | (243,313 | ) |
| Payments under long-term debt obligations | | | (19,852 | ) | | | (500 | ) |
| Repurchase of common stock | | | (11,668 | ) | | | (9,164 | ) |
| Common stock dividends paid | | | (5,507 | ) | | | (5,654 | ) |
| | | | | | | |
| Net cash used in financing activities | | $ | (36,920 | ) | | $ | (14,204 | ) |
| | | | | | | |
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | | $ | 11,339 | | | $ | (37,552 | ) |
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | | | 29,885 | | | | 67,437 | |
| | | | | | | |
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | | $ | 41,224 | | | $ | 29,885 | |
| | | | | | | |
