Exhibit 99.1
| | | | | |
Press Contact: Allison Henk
Marketing Communications Manager
(765) 771-5674 | |  | | Investor Relations:
(765) 771-5310 |
FOR IMMEDIATE RELEASE
Wabash National Corporation Announces
2008 Fourth Quarter and Full Year Results
LAFAYETTE, Ind. — February 16, 2009 — Wabash National Corporation (NYSE: WNC) reported a net loss of $110.7 million, or $3.69 per diluted share, for the fourth quarter of 2008 on net sales of $230.7 million. For the same quarter last year, the Company reported net income of $5.6 million, or $0.18 per diluted share, on net sales of $257.8 million. For the twelve months ending December 31, 2008, net losses totaled $124.7 million, or $4.16 per diluted share, on net sales of $836.2 million. For the comparable period in 2007, the Company reported net income of $16.3 million, or $0.52 per diluted share, on net sales of $1.1billion.
Fourth quarter and full year 2008 results include previously announced non-cash charges related to a goodwill impairment of $66.3 million and a charge to income tax expense of approximately $23.1 million related to establishing a full valuation allowance on previously established net deferred tax assets. Results for the fourth quarter and full year 2007 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.
Dick Giromini, President and Chief Executive Officer, stated, “Today’s operating environment within the markets we serve is as challenging as any in the history of Wabash National and the broader industry. As expected, the fourth quarter proved to be the most difficult quarter of the year, as margins were adversely impacted by the overhang of high raw material costs from prior periods, combined with a challenging pricing environment. To a lesser extent, our performance during the quarter was also impacted by fewer production days related to the holiday season and an extended annual shutdown. Despite these challenges, we nonetheless were successful in increasing our market share as a result of our industry-leading product offerings and the strength of our customer base. Additionally, our diversification efforts received a jumpstart with the award of the PODS® manufacturing agreement, and the ramp-up of our Cadiz, KY aluminum flatbed and dump acquisition.
“Our order backlog as of December 31, 2008 was approximately $110 million driven by slow order placement as customers continue to maintain a wait and see approach,” continued Giromini. “In response to the near-term outlook for the broader economy, our industry, and for Wabash National, we continue to
proactively and aggressively implement cost reduction actions to improve both our operating performance and our liquidity. Recent actions include:
| Ø | | Staffing reductions now totaling 180 salaried associates, bringing total salaried headcount reductions to over 30% since the beginning of the industry downturn in early 2007, |
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| Ø | | Base salary reductions of 10% for all Officers of the Company and temporary reductions of 10% of annualized base salary for all remaining salaried associates, |
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| Ø | | Continued close monitoring of the costs associated with hourly associates including the elimination of certain incentives, |
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| Ø | | Cancelled or delayed non-critical development and capital projects. |
We are successfully working with our suppliers on improved prices and terms, and we have initiated discussions with our bank group to modify our revolving credit facility to seek to assure continued availability at appropriate levels in light of current operating conditions. These discussions are at an early stage but members of our bank group were with us in the tough times earlier this decade and we feel we have a good and constructive relationship with the group. We are also exploring ways to strengthen our financial position through capital-raising or other steps.
We will continue to closely monitor our cost structure going forward and will act decisively to right size the business further if market dynamics dictate. We are confident we are taking the necessary steps to prudently manage the business in spite of a very difficult operating environment.”
Non-Cash Charges
During the fourth quarter, the Company recorded non-cash charges relating to goodwill impairment and income tax expense. After reviewing goodwill for impairment during the fourth quarter, the Company determined that its goodwill, related to its platform trailer (resulting from the acquisition of Transcraft) and wood products manufacturing operations, was impaired and recorded a charge of $66.3 million. The determination that goodwill was impaired was made after considering the current macroeconomic environment, the depressed market price of the Company’s common stock, and the present value of expected future cash flows.
Additionally, the Company reported a fourth quarter charge to income tax expense of $23.1 related to establishing a full valuation allowance on its previously established net deferred tax assets. The Company considered all available evidence, both positive and negative, and concluded that it was no longer more likely than not that it would realize the value of its net deferred tax assets.
Director Resignation
Effective February 12, 2009, Mr. William Greubel, resigned as a member of our Board of Directors. We thank Bill for his dedicated service to Wabash National since 2002 as President and CEO, Chairman of the Board of Directors, and most recently as Director.
Fourth Quarter and Full Year 2008 Conference Call
Wabash National Corporation will conduct a conference call to review and discuss its fourth quarter, and full year results on Tuesday, February 17, 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 May 12, 2009.
About Wabash National Corporation
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, 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, dump trailers and 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.
PODS® is a registered trademark of PODS Enterprises, Inc.
Safe Harbor Statement
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 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, uncertainty in the outcome of our discussions with lenders, risks that we may be unable to raise capital if needed 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.
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WABASH NATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | Three Months | | | Twelve Months | |
| | | Ended December 31, | | | Ended December 31, | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
| NET SALES | | $ | 230,715 | | | $ | 257,824 | | | $ | 836,213 | | | $ | 1,102,544 | |
| COST OF SALES | | | 234,916 | | | | 238,713 | | | | 814,748 | | | | 1,010,823 | |
| | | | | | | | | | | | | |
| Gross profit | | | (4,201 | ) | | | 19,111 | | | | 21,465 | | | | 91,721 | |
| GENERAL AND ADMINISTRATIVE EXPENSES | | | 11,575 | | | | 11,180 | | | | 43,591 | | | | 49,512 | |
| SELLING EXPENSES | | | 3,973 | | | | 3,714 | | | | 14,162 | | | | 15,743 | |
| IMPAIRMENT OF GOODWILL | | | 66,317 | | | | — | | | | 66,317 | | | | — | |
| | | | | | | | | | | | | |
| (Loss) Income from operations | | | (86,066 | ) | | | 4,217 | | | | (102,605 | ) | | | 26,466 | |
| OTHER INCOME (EXPENSE) | | | | | | | | | | | | | | | | |
| Interest expense | | | (1,308 | ) | | | (1,345 | ) | | | (4,657 | ) | | | (5,755 | ) |
| Foreign exchange, net | | | (65 | ) | | | 3,357 | | | | (156 | ) | | | 3,818 | |
| Gain on debt extinguishment | | | — | | | | 546 | | | | 151 | | | | 546 | |
| Other, net | | | (240 | ) | | | 205 | | | | (323 | ) | | | (387 | ) |
| | | | | | | | | | | | | |
| (Loss) Income before income taxes | | | (87,679 | ) | | | 6,980 | | | | (107,590 | ) | | | 24,688 | |
| INCOME TAX EXPENSE | | | 23,055 | | | | 1,344 | | | | 17,064 | | | | 8,403 | |
| | | | | | | | | | | | | |
| NET (LOSS) INCOME | | $ | (110,734 | ) | | $ | 5,636 | | | $ | (124,654 | ) | | $ | 16,285 | |
| | | | | | | | | | | | | |
| COMMON STOCK DIVIDENDS DECLARED | | $ | — | | | $ | 0.045 | | | $ | 0.135 | | | $ | 0.180 | |
| | | | | | | | | | | | | |
| BASIC NET (LOSS) INCOME PER SHARE | | $ | (3.69 | ) | | $ | 0.19 | | | $ | (4.16 | ) | | $ | 0.54 | |
| | | | | | | | | | | | | |
| DILUTED NET (LOSS) INCOME PER SHARE | | $ | (3.69 | ) | | $ | 0.18 | | | $ | (4.16 | ) | | $ | 0.52 | |
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| | | | | | | | | | | | | | | | | |
| COMPREHENSIVE (LOSS) INCOME | | | | | | | | | | | | | | | | |
| Net (loss) income | | $ | (110,734 | ) | | $ | 5,636 | | | $ | (124,654 | ) | | $ | 16,285 | |
| Changes in fair value of derivatives (net of tax) | | | (1,376 | ) | | | — | | | | (1,516 | ) | | | — | |
| Reclassification adjustment for foreign exchange gains included in net income | | | — | | | | (3,322 | ) | | | — | | | | (3,322 | ) |
| Foreign currency translation adjustment | | | — | | | | 8 | | | | — | | | | 347 | |
| | | | | | | | | | | | | |
| NET COMPREHENSIVE (LOSS) INCOME | | $ | (112,110 | ) | | $ | 2,322 | | | $ | (126,170 | ) | | $ | 13,310 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | Retail and | | | | | | Consolidated |
| | | Manufacturing | | Distribution | | Eliminations | | Totals |
| Three months ended December 31, | | | | | | | | | | | | | | | | |
| 2008 | | | | | | | | | | | | | | | | |
| Net sales | | $ | 208,861 | | | $ | 29,729 | | | $ | (7,875 | ) | | $ | 230,715 | |
| (Loss) Income from operations | | $ | (83,126 | ) | | $ | (3,153 | ) | | $ | 213 | | | $ | (86,066 | ) |
| New trailers shipped | | | 9,200 | | | | 500 | | | | (300 | ) | | | 9,400 | |
| 2007 | | | | | | | | | | | | | | | | |
| Net sales | | $ | 237,758 | | | $ | 32,921 | | | $ | (12,855 | ) | | $ | 257,824 | |
| Income (Loss) from operations | | $ | 6,356 | | | $ | (2,219 | ) | | $ | 80 | | | $ | 4,217 | |
| New trailers shipped | | | 10,800 | | | | 700 | | | | (600 | ) | | | 10,900 | |
| | | | | | | | | | | | | | | | | |
| Twelve months ended December 31, | | | | | | | | | | | | | | | | |
| 2008 | | | | | | | | | | | | | | | | |
| Net sales | | $ | 744,899 | | | $ | 142,058 | | | $ | (50,744 | ) | | $ | 836,213 | |
| (Loss) Income from operations | | $ | (97,739 | ) | | $ | (5,920 | ) | | $ | 1,054 | | | $ | (102,605 | ) |
| New trailers shipped | | | 33,100 | | | | 2,500 | | | | (2,300 | ) | | | 33,300 | |
| 2007 | | | | | | | | | | | | | | | | |
| Net sales | | $ | 1,014,969 | | | $ | 150,490 | | | $ | (62,915 | ) | | $ | 1,102,544 | |
| Income (Loss) from operations | | $ | 30,568 | | | $ | (3,556 | ) | | $ | (546 | ) | | $ | 26,466 | |
| New trailers shipped | | | 46,300 | | | | 3,000 | | | | (2,900 | ) | | | 46,400 | |
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Twelve Months Ended | |
| | | December 31, | | | December 31, | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
| Basic net (loss) income per share | | | | | | | | | | | | | | | | |
| Net (loss) income applicable to common stockholders | | $ | (110,734 | ) | | $ | 5,636 | | | $ | (124,654 | ) | | $ | 16,285 | |
| | | | | | | �� | | | | | | |
| Weighted average common shares outstanding | | | 30,016 | | | | 29,843 | | | | 29,954 | | | | 30,060 | |
| | | | | | | | | | | | | |
| Basic net (loss) income per share | | $ | (3.69 | ) | | $ | 0.19 | | | $ | (4.16 | ) | | $ | 0.54 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Diluted net (loss) income per share | | | | | | | | | | | | | | | | |
| Net (loss) income applicable to common stockholders | | $ | (110,734 | ) | | $ | 5,636 | | | $ | (124,654 | ) | | $ | 16,285 | |
| After-tax equivalent of interest on convertible notes | | | — | | | | 683 | | | | — | | | | 2,905 | |
| | | | | | | | | | | | | |
| Diluted net (loss) income applicable to common stockholders | | $ | (110,734 | ) | | $ | 6,319 | | | $ | (124,654 | ) | | $ | 19,190 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Weighted average common shares outstanding | | | 30,016 | | | | 29,843 | | | | 29,954 | | | | 30,060 | |
| Dilutive stock options/shares | | | — | | | | 63 | | | | — | | | | 207 | |
| Convertible notes equivalent shares | | | — | | | | 6,173 | | | | — | | | | 6,549 | |
| | | | | | | | | | | | | |
| Diluted weighted average common shares outstanding | | | 30,016 | | | | 36,079 | | | | 29,954 | | | | 36,816 | |
| | | | | | | | | | | | | |
| Diluted net (loss) income per share | | $ | (3.69 | ) | | $ | 0.18 | | | $ | (4.16 | ) | | $ | 0.52 | |
| | | | | | | | | | | | | |
Average diluted shares outstanding for the three month period ended December 31, 2008 excludes any effects of the Company’s Senior Convertible Notes as all outstanding balances were purchased and retired on or before August 1, 2008. For the twelve month period ended December 31, 2008, the after-tax equivalent of interest on the Senior Convertible Notes was $0.8 million and the Senior Convertible Notes equivalent shares were 1.7 million. Diluted shares outstanding for the three and twelve month periods ended December 31, 2008 also exclude the antidilutive effects of potentially dilutive stock options and restricted stock totaling less than 0.1 million shares of common stock.
WABASH NATIONAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
| | | | | | | | | |
| | | December 31, | | | December 31, | |
| | | 2008 | | | 2007 | |
ASSETS
|
| CURRENT ASSETS | | | | | | | | |
| Cash and cash equivalents | | $ | 29,766 | | | $ | 41,224 | |
| Accounts receivable, net | | | 37,925 | | | | 68,752 | |
| Inventories | | | 92,896 | | | | 113,125 | |
| Deferred income taxes | | | — | | | | 14,514 | |
| Prepaid expenses and other | | | 5,307 | | | | 4,046 | |
| | | | | | | |
| Total current assets | | | 165,894 | | | | 241,661 | |
| | | | | | | | | |
| PROPERTY, PLANT AND EQUIPMENT, net | | | 122,035 | | | | 122,063 | |
| | | | | | | | | |
| DEFERRED INCOME TAXES | | | — | | | | 2,772 | |
| | | | | | | | | |
| GOODWILL | | | — | | | | 66,317 | |
| | | | | | | | | |
| INTANGIBLE ASSETS | | | 29,089 | | | | 32,498 | |
| | | | | | | | | |
| OTHER ASSETS | | | 14,956 | | | | 18,271 | |
| | | | | | | |
| | | $ | 331,974 | | | $ | 483,582 | |
| | | | | | | |
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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| CURRENT LIABILITIES | | | | | | | | |
| Current portion of capital lease obligation | | $ | 337 | | | $ | — | |
| Accounts payable | | | 42,798 | | | | 40,787 | |
| Other accrued liabilities | | | 44,277 | | | | 54,258 | |
| | | | | | | |
| Total current liabilities | | | 87,412 | | | | 95,045 | |
| | | | | | | | | |
| LONG-TERM DEBT | | | 80,008 | | | | 104,500 | |
| | | | | | | | | |
| CAPITAL LEASE OBLIGATION | | | 4,803 | | | | — | |
| | | | | | | | | |
| OTHER NONCURRENT LIABILITIES AND CONTINGENCIES | | | 5,142 | | | | 4,108 | |
| | | | | | | | | |
| STOCKHOLDERS’ EQUITY | | | 154,609 | | | | 279,929 | |
| | | | | | | |
| | | $ | 331,974 | | | $ | 483,582 | |
| | | | | | | |
WABASH NATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
| | | | | | | | | |
| | | Years Ended December 31, | |
| | | 2008 | | | 2007 | |
| CASH FLOWS FROM OPERATING ACTIVITIES | | | | | | | | |
| Net (loss) income | | $ | (124,654 | ) | | $ | 16,285 | |
| Adjustments to reconcile net (loss) income to net cash provided by operating activities | | | | | | | | |
| Depreciation and amortization | | | 21,467 | | | | 19,467 | |
| Net loss on the sale of assets | | | 606 | | | | 116 | |
| Foreign exchange gain on disposition of Canadian subsidiary | | | — | | | | (3,322 | ) |
| Gain on early debt extinguishment | | | (151 | ) | | | (546 | ) |
| Deferred income taxes | | | 17,286 | | | | 8,182 | |
| Excess tax benefits from stock-based compensation | | | (6 | ) | | | (33 | ) |
| Stock-based compensation | | | 4,990 | | | | 4,358 | |
| Impairment of goodwill | | | 66,317 | | | | — | |
| Changes in operating assets and liabilities | | | | | | | | |
| Accounts receivable | | | 30,827 | | | | 41,717 | |
| Inventories | | | 20,229 | | | | 19,958 | |
| Prepaid expenses and other | | | 436 | | | | 6 | |
| Accounts payable and accrued liabilities | | | (6,829 | ) | | | (48,487 | ) |
| Other, net | | | 149 | | | | 1,625 | |
| | | | | | | |
| Net cash provided by operating activities | | $ | 30,667 | | | $ | 59,326 | |
| | | | | | | | | |
| CASH FLOWS FROM INVESTING ACTIVITIES | | | | | | | | |
| Capital expenditures | | | (12,613 | ) | | | (6,714 | ) |
| Acquisition, net of cash acquired | | | — | | | | (4,500 | ) |
| Proceeds from the sale of property, plant and equipment | | | 213 | | | | 147 | |
| | | | | | | |
| Net cash used in investing activities | | $ | (12,400 | ) | | $ | (11,067 | ) |
| | | | | | | | | |
| CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | | |
| Proceeds from exercise of stock options | | | 97 | | | | 74 | |
| Excess tax benefits from stock-based compensation | | | 6 | | | | 33 | |
| Borrowings under revolving credit facilities | | | 202,908 | | | | 103,721 | |
| Payments under revolving credit facilities | | | (122,900 | ) | | | (103,721 | ) |
| Payments under long-term debt obligations | | | (104,133 | ) | | | (19,852 | ) |
| Principal payments under capital lease obligation | | | (193 | ) | | | — | |
| Repurchase of common stock | | | — | | | | (11,668 | ) |
| Common stock dividends paid | | | (5,510 | ) | | | (5,507 | ) |
| | | | | | | |
| Net cash used in financing activities | | $ | (29,725 | ) | | $ | (36,920 | ) |
| | | | | | | |
| | | | | | | | | |
| NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | | $ | (11,458 | ) | | $ | 11,339 | |
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | | | 41,224 | | | | 29,885 | |
| | | | | | | |
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | | $ | 29,766 | | | $ | 41,224 | |
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