Press Contact: Tom Rodak Director of Corporate Marketing (765) 771-5555 |  | | Investor Relations: (765) 771-5310 |
FOR IMMEDIATE RELEASE
Wabash National Corporation Announces Third Quarter Results
Q3 2011 Operating Income Improves $6.5 Million Year-over-Year
LAFAYETTE, Ind. – November 1, 2011 – Wabash National Corporation (NYSE: WNC) reported significant year-over-year improvement across a number of financial and operating metrics. The Company reported net income of $1.1 million, or $0.02 per diluted share for the third quarter of 2011 on net sales of $336 million compared to a net loss of $1.9 million, or $0.03 per diluted share, on net sales of $171 million for the third quarter of 2010. For the nine months ended September 30, the Company reported net income of $7.6 million, or $0.11 per diluted share, on net sales of $846 million for 2011 compared to a net loss of $146.6 million, or $3.93 per diluted share, on net sales of $399 million for 2010. Results for the nine months ending September 30, 2011 include a one-time charge of $0.7 million, or $0.01 per diluted share, related to the early extinguishment of the Company’s prior revolving credit facility that was replaced during the second quarter. Results for the three and nine months ended September 30, 2010 included a non-cash benefit of $3.3 million, or $0.05 per diluted share, and a charge of $121.6 million, or $2.78 per diluted share, respectively, related to the change 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.
The Company reported operating income of $2.3 million for the third quarter of 2011, compared to an operating loss of $4.2 million for the third quarter of 2010. For the nine months ended September 30, the Company reported operating income of $11.4 million for 2011 as compared to an operating loss of $21.2 million for 2010. The improvement in operating results of $6.5 million and $32.6 million for the three and nine month periods, respectively, resulted primarily from higher new trailer shipments of 13,600 and 33,900 units, representing increases of 100 percent and 129 percent, respectively, from the prior year periods.
The following is a summary of select operating and financial results for the past five quarters:
| | | Three Months Ended | |
| | | September 30, | | | December 31, | | | March 31, | | | June 30, | | | September 30, | |
| (Dollars in thousands) | | 2010 | | | 2010 | | | 2011 | | | 2011 | | | 2011 | |
| | | | | | | | | | | | | | | | |
| New Trailer Units Sold | | | 6,800 | | | | 10,100 | | | | 8,900 | | | | 11,400 | | | | 13,600 | |
| | | | | | | | | | | | | | | | | | | | | |
| Net Sales | | $ | 170,848 | | | $ | 241,550 | | | $ | 221,984 | | | $ | 287,095 | | | $ | 336,433 | |
| | | | | | | | | | | | | | | | | | | | | |
| Gross Profit Margin | | | 3.8 | % | | | 7.2 | % | | | 7.4 | % | | | 5.7 | % | | | 4.0 | % |
| | | | | | | | | | | | | | | | | | | | | |
| (Loss) Income from Operations | | $ | (4,206 | ) | | $ | 5,736 | | | $ | 4,009 | | | $ | 5,117 | | | $ | 2,270 | |
| | | | | | | | | | | | | | | | | | | | | |
| Net (Loss) Income | | $ | (1,938 | )(1) | | $ | 4,859 | | | $ | 3,197 | | | $ | 3,302 | | | $ | 1,092 | |
| | | | | | | | | | | | | | | | | | | | | |
| Operating EBITDA (Non-GAAP) | | $ | 643 | | | $ | 10,752 | | | $ | 8,802 | | | $ | 9,737 | | | $ | 6,558 | |
| Note: | (1) | Quarterly Net (Loss) Income includes a non-cash benefit of approximately $3.3 million for the third quarter of 2010 related to the decrease in the fair value of the Company’s warrant which was issued to a private investor in 2009 and fully exercised in the third quarter of 2010. |
Dick Giromini, President and Chief Executive Officer, stated, “We are pleased to have delivered noteworthy year-over-year improvement in our operating results for the eighth consecutive quarter. As expected, the third quarter presented the most significant cost and performance challenges of the year related to the peak effect of higher raw material costs; fixed-price, lower-margin orders accepted early in the cycle; and labor inefficiencies associated with capacity ramp-up. However, we made progress in working through these challenges as we moved through the third quarter. Going forward, we firmly expect to deliver improved financial performance that is more reflective of current demand and, more importantly, our positioning in the marketplace. Our efforts to further diversify the business continued to show positive momentum as sales of our non-trailer related DuraPlate® and Allied products totaled $16 million for the quarter, an increase of approximately 153 percent as compared to the prior year.”
Mr. Giromini continued, “For the third quarter, new trailer shipments increased to 13,600, representing the highest shipment quarter since 2006. We expect to see a similar shipment level for the fourth quarter with 2011 full-year new trailer shipments estimated to be approximately 47,000 to 48,000 units and supported by a backlog of $513 million as of September 30, 2011. With the third quarter now behind us, we look forward to improving margins through the continued optimization initiatives and an improving mix of higher-margin orders. Longer-term, as we enter the 2012 order season, we are committed to improving pricing and margins and we remain confident in our strategic positioning to deliver improved operating performance throughout the cycle along with continued diversification of the business. Our industry is still early in the recovery cycle and we are well positioned to capitalize on the increasing demand for new trailers.”
On a non-GAAP basis, the Company’s Operating EBITDA of $6.6 million represents an increase of $5.9 million as compared to the third quarter of 2010 on approximately 6,800 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.
Finally, and as previously announced, on August 22, 2011 the Company entered into an amendment to its existing credit agreement further increasing the borrowing capacity from $150 million to $175 million. Under the credit agreement, the Company had the option, subject to a borrowing base and lender agreement, to request up to two increases in minimum increments of $25 million and not to exceed $50 million. As a result, liquidity, or cash plus available borrowings, at September 30, 2011 amounted to approximately $107 million.
Third Quarter 2011 Conference Call
Wabash National Corporation will conduct a conference call to review and discuss its third quarter results on November 2, 2011, at 10:00 a.m. EDT. 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 25, 2012.
Non-GAAP Measures
In addition to disclosing financial results calculated in accordance with United States generally accepted accounting principles (GAAP), the financial information included in this release contains the non-GAAP financial measure Operating EBITDA.
Operating EBITDA should not be considered a substitute for, or superior to, financial measures and results calculated in accordance with GAAP, including net income (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 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 measure 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 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, expectations regarding margin performance, whether profitability can be sustained, the Company’s diversification strategy 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.
# # #
