FOR IMMEDIATE RELEASE
Contact: Mark R. Holden
(765) 771-5310
WABASH NATIONAL CORPORATION ANNOUNCES
THIRD QUARTER RESULTS
LAFAYETTE, INDIANA, October 22, 2003 . . . Wabash National Corporation
(NYSE: WNC) today announced results for the three and nine month periods ended
September 30, 2003. Net sales for the third quarter were $215 million compared
to $241 million for the same period last year. Net loss for the third quarter
was $30 million compared to a net loss of $8.3 million for the same period last
year. Diluted loss per share was $1.16 for the quarter compared to a loss of
$0.37 per share for the 2002 quarter. For the nine months ended September 30,
2003, net sales were $668 million and a net loss of $55 million compared to net
sales of $614 million and a net loss of $45 million for the same period last
year. Diluted loss per share for the nine months ended September 30, 2003 and
2002 was $2.19 and $1.98, respectively.
Commenting on the quarter, William P. Greubel, President and Chief
Executive Officer, stated, "The achievements accomplished during the quarter are
quite remarkable and provide a foundation for a successful and sustainable
business. The following are just some of the significant highlights from the
quarter:
o We launched our sales and marketing initiatives targeted at the
mid-size fleet segment of the trailer industry. Our net orders
during the third quarter increased approximately 32% over the
same period a year ago while net orders for the U.S. trailer
industry increased approximately 20% during the same time period;
o We closed twelve of our factory owned branch locations to better
focus on our product and service offerings in more profitable
markets;
o We completed the sale of $125 million of 3-1/4% senior unsecured
convertible notes, proceeds from which were used to refinance a
portion of the Company's outstanding indebtedness;
o We sold certain assets of our rental and leasing business and
wholesale aftermarket parts business with total consideration of
approximately $60 million which was used to reduce the Company's
outstanding indebtedness;
o We completed a new three year $222 million bank credit facility
which served to finalize the refinancing of substantially all of
the Company's outstanding indebtedness and which reduced our
average cost of debt from over 10% to less than 4%;
o We anticipate completing the sale of our remaining non-core
assets with the planned sale of a majority of our finance
portfolio for approximately $12 million;
o We are approaching our goal of $100 million reduction in
indebtedness during 2003. Debt is down $70 million. With the
planned sale of our finance portfolio, and further working
capital reductions, we fully expect to successfully achieve our
goal; and
o We continue to show month-over-month improvement in our drive to
continuously improve our safety, quality and on-time delivery
while reducing our costs. We believe we have now become the low
cost producer within the trailer industry.
There has been a great deal of hard work and outstanding achievements by
our associates, yet there remains more to be done. Industry forecasts for the
next several years are very encouraging. We have positioned the Company to take
advantage of this industry recovery and believe we can be debt free during this
timeframe while accomplishing record earnings and cash flow levels."
Wabash will conduct a conference call to review and discuss its third
quarter financial results on Thursday, October 23, 2003, at 10:00 AM Eastern
time. The phone number to access the conference call is 888-391-0237. The call
can also be accessed live on the Company's internet 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 November 13, 2003.
Wabash National Corporation designs, manufactures, and markets standard
and customized truck trailers under the Wabash(TM) brand name. The Company is
one of the world's largest manufacturers of truck trailers and a leading
manufacturer of composite trailers. The Company's wholly owned subsidiary,
Wabash National Trailer Centers, is one of the leading retail distributors of
new and used trailers and aftermarket parts throughout the U.S. and Canada.
This press release contains forward-looking statements that involve risks
and uncertainties, including those described in the section entitled "Risk
Factors" contained in the Company's Quarterly Report on Form 10-Q filed with the
SEC on August 14, 2003, that could cause the Company's actual results and
experience to differ materially from anticipated results and expectations
expressed in these forward-looking statements.
WABASH NATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Unaudited
<Table>
<Caption>
Three Months Nine Months
Ended September 30, Ended September 30,
------------------------------ ------------------------------
2003 2002 2003 2002
------------ ------------ ------------ ------------
NET SALES $ 215,450 $ 241,474 $ 668,189 $ 613,677
COST OF SALES 199,545 219,743 606,254 585,680
LOSS ON ASSET IMPAIRMENT -- -- 28,500 --
------------ ------------ ------------ ------------
Gross profit 15,905 21,731 33,435 27,997
GENERAL AND ADMINISTRATIVE EXPENSES 10,598 12,137 29,031 41,035
SELLING EXPENSES 4,714 5,774 15,954 17,553
RESTRUCTURING CHARGE -- 1,717 -- 1,717
------------ ------------ ------------ ------------
Income (loss) from operations 593 2,103 (11,550) (32,308)
OTHER INCOME (EXPENSE):
Interest expense (8,349) (8,523) (26,608) (22,012)
Trade receivables facility costs (397) (237) (1,022) (3,870)
Foreign exchange gains and losses, net (271) (1,825) 5,318 133
Loss on debt extinguishment (18,940) -- (18,940) --
Other, net (2,277) 163 (2,677) 1,525
------------ ------------ ------------ ------------
Loss before income taxes (29,641) (8,319) (55,479) (56,532)
INCOME TAX BENEFIT -- -- -- (11,947)
------------ ------------ ------------ ------------
Net loss (29,641) (8,319) (55,479) (44,585)
PREFERRED STOCK DIVIDENDS 264 409 792 1,295
------------ ------------ ------------ ------------
NET LOSS APPLICABLE TO COMMON STOCKHOLDERS $ (29,905) $ (8,728) $ (56,271) $ (45,880)
============ ============ ============ ============
BASIC AND DILUTED NET LOSS PER SHARE $ (1.16) $ (0.37) $ (2.19) $ (1.98)
============ ============ ============ ============
COMPREHENSIVE LOSS
Net loss $ (29,641) $ (8,319) $ (55,479) $ (44,585)
Foreign currency translation adjustment (208) (135) 236 31
------------ ------------ ------------ ------------
NET COMPREHENSIVE LOSS $ (29,849) $ (8,454) $ (55,243) $ (44,554)
============ ============ ============ ============
</Table>
<Table>
<Caption>
Retail &
Three months ended Manufacturing Distribution Eliminations Total
------------------ ------------- ------------ ------------ ------------
2003
Net Sales $ 152,800 $ 68,622 $ (5,972) $ 215,450
Operating Results $ 2,387 $ (1,815) $ 21 $ 593
2002
Net Sales $ 166,393 $ 82,548 $ (7,467) $ 241,474
Operating Results $ 5,285 $ (3,188) $ 6 $ 2,103
Nine months ended
-----------------
2003
Net Sales $ 486,940 $ 222,353 $ (41,104) $ 668,189
Operating Results $ 21,202 $ (33,072) $ 320 $ (11,550)
2002
Net Sales $ 379,642 $ 258,165 $ (24,130) $ 613,677
Operating Results $ (12,911) $ (19,974) $ 577 $ (32,308)
</Table>
WABASH NATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
Unaudited
<Table>
<Caption>
September 30,
2003 December 31,
(Unaudited) 2002
------------- ------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 2,577 $ 35,659
Accounts receivable, net 79,526 34,396
Current portion of finance contracts 7,108 9,528
Inventories 113,698 134,872
Prepaid expenses and other 13,716 18,299
------------ ------------
Total current assets 216,625 232,754
PROPERTY, PLANT AND EQUIPMENT, net 131,154 145,703
EQUIPMENT LEASED TO OTHERS, net 24,784 100,837
FINANCE CONTRACTS, net of current portion 14,962 22,488
GOODWILL, net 35,378 34,652
OTHER ASSETS 25,074 29,135
------------ ------------
$ 447,977 $ 565,569
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $ 13,475 $ 42,961
Current maturities of capital lease obligations 1,790 12,860
Accounts payable 66,109 60,457
Other accrued liabilities 63,492 61,424
------------ ------------
Total current liabilities 144,866 177,702
LONG-TERM DEBT, net of current maturities 261,769 239,043
LONG-TERM CAPITAL LEASE OBLIGATIONS, net of current maturities -- 51,993
OTHER NONCURRENT LIABILITIES AND CONTINGENCIES 21,383 22,847
STOCKHOLDERS' EQUITY 19,959 73,984
------------ ------------
$ 447,977 $ 565,569
============ ============
</Table>
EBITDA
The Company uses EBITDA income (loss) before income taxes, interest expense,
depreciation and amortization as an internal measure of performance, and
believes it is a useful and commonly used measure of financial performance in
addition to income (loss) before income taxes and other profitability measures
of performance under GAAP. EBITDA should not be construed as an alternative to
operating income and income (loss) before taxes as an indicator of the Company's
operation in accordance with GAAP. The Company's definition of EBITDA can differ
from that of other companies. The next loss in the 2003 third quarter includes
an $18.9 million charge related to debt extinguishment. The net loss for the
nine months of 2003 includes the extinguishment loss and a $28.5 million asset
impairment charge recorded in June 2003.
<Table>
<Caption>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------- --------------------
2003 2002 2003 2002
-------- -------- -------- --------
EBITDA reconciliation:
Net loss $ (29.6) $ (8.3) $ (55.5) $ (56.5)
Income tax benefit -- -- -- (11.9)
Interest expense 8.3 8.5 26.6 22.0
Depreciation and amortization 5.8 6.7 19.1 21.7
-------- -------- -------- --------
EBITDA $ (15.5) $ 6.9 $ (9.8) $ (24.7)
-------- -------- -------- --------
</Table>
PRO FORMA FINANCIAL INFORMATION
Wabash has prepared the following Unaudited Pro Forma Consolidated Statements of
Operations to illustrate the estimated effects of the sale (the "Asset Sale") of
certain of the assets of its trailer leasing and rental, and wholesale
aftermarket parts distribution businesses to Aurora Trailer Holdings, LLC and
the refinancing of it's capital structure through the sale of $125 million of
3.25% five-year senior unsecured convertible notes and entering into a $222
million three-year asset-based loan arrangement (the "Refinancing"). The Company
believes the proforma data to be useful in understanding the company operating
results in view of the recently completed transactions. The Unaudited Pro Forma
Consolidated Statements of Operations give effect to the transactions, described
below, as if they had occurred as of the beginning of the respective periods.
The Pro Forma Financial Statements are based upon available information and
certain assumptions that management believes are reasonable. The Pro Forma
Financial Statements do not purport to represent what the Company's results of
operations or financial condition would actually have been had the transactions
in fact occurred on such dates or to project the Company's results of operations
or financial condition for any future period or date. The Pro Forma Financial
Statements should be read in conjunction with the historical financial
statements of the Company and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" contained in
the Company Form 10-K for the year ended December 31, 2002 and its Form 10-Q for
the quarter ended June 30, 2003.
ASSET SALE
On September 19, 2003, the Company completed the sale of certain of the assets
of its leasing and rental and aftermarket parts businesses for approximately $53
million in cash. Net proceeds from the sale were used to repay a portion of its
outstanding indebtedness. Loss on the disposition amounted to approximately
$29.5 million, including a $28.5 million asset impairment charge recorded in the
2003 second quarter.
REFINANCING
On August 1, 2003, the Company completed the sale of $125 million of 3.25%
five-year senior unsecured convertible notes convertible into shares of the
Company's stock, subject to market and other conditions. The Company used the
net proceeds to repay a portion of its outstanding indebtedness. The notes have
a conversion price of $19.20 or a rate of 52.0833 shares per $1,000 principal
amount of note. The notes bear interest at 3.25% per annum payable semi-annually
on February 1 and August 1. Costs associated with the transaction amounted to
approximately $4.2 million and will be amortized over the term of the notes.
On September 23, 2003, the Company entered into a $222 million three-year
asset-based loan arrangement that includes a $47 million term loan and a $175
million revolver. The new financing replaced existing indebtedness and is
expected to substantially lower the Company's cost of debt. Fees associated with
the transaction amount to approximately $4.2 million and will be amortized over
the term of the loan.
The pro forma statements of operations reflect:
o Interest expense on the convertible notes is 3.25%.
o Interest on the term loan is LIBOR plus 300 basis points, decreasing
to 275 basis points after six months.
o Interest on the revolver is LIBOR plus 275 basis points, decreasing
to 250 basis points after six months.
o Additionally, interest expense includes an unused facility fee at a
rate of 37.5 basis points per annum, letter of credit fees and
amortization of deferred loan costs.
Wabash National Corporation
Pro Forma Statement of Income for the Nine Months Ended September 30, 2003
Dollars in Thousands, Except Per Share Amounts
(Unaudited)
<Table>
<Caption>
Adjustments
----------------------------
Historical Asset Sale Refinancing Pro forma
----------- ----------- ----------- -----------
Net Sales $ 668,189 $ (58,904) $ -- $ 609,285
Cost of Sales 606,254 (48,639) -- 557,615
Loss on Asset Impairment 28,500 (28,500) -- --
----------- ----------- ----------- -----------
Gross Profit 33,435 18,235 -- 51,670
G & A 29,031 (1,498) (1,576) 25,957
Selling 15,954 (1,920) -- 14,034
----------- ----------- ----------- -----------
Income (Loss) from Operations (11,550) 21,653 1,576 11,679
Other Income (Expense):
Interest Expense (26,608) 1,745 13,663 (11,200)
Trade Receivable Facility Costs (1,022) -- 1,022 --
Foreign Exchange Gains and Losses, Net 5,318 -- 5,318
Loss on Debt Extinguishment (18,940) -- 18,940 --
Other, net (2,677) 1,068 (1,609)
----------- ----------- ----------- -----------
Income (Loss) before Income Taxes (55,479) 24,466 35,201 4,188
Income Tax (Benefit) Expense -- -- -- --
----------- ----------- ----------- -----------
Net Income (Loss) (55,479) 24,466 35,201 4,188
Preferred Stock Dividends 792 792
----------- ----------- ----------- -----------
Net Income (Loss) Applicable to Common Stockholders $ (56,271) $ 24,466 $ 35,201 $ 3,396
=========== =========== =========== ===========
Basic and Diluted Net Income (Loss) Per Share $ (2.19) $ 0.13
=========== ===========
Weighted Average Shares Outstanding 25,721 25,721
=========== ===========
</Table>
Wabash National Corporation
Pro Forma Statement of Income for the Three Months Ended September 30, 2003
Dollars in Thousands, Except Per Share Amounts
(Unaudited)
<Table>
<Caption>
Adjustments
----------------------------
Historical Asset Sale Refinancing Pro forma
----------- ----------- ----------- -----------
Net Sales $ 215,450 $ (18,049) $ -- $ 197,401
Cost of Sales 199,545 (14,880) -- 184,665
Loss on Asset Impairment -- -- -- --
----------- ----------- ----------- -----------
Gross Profit (Loss) 15,905 (3,169) -- 12,736
G & A 10,598 (451) (88) 10,059
Selling 4,714 (578) -- 4,136
----------- ----------- ----------- -----------
Income (Loss) from Operations 593 (2,140) 88 (1,459)
Other Income (Expense):
Interest Expense (8,349) 466 4,283 (3,600)
Trade Receivable Facility Costs (397) -- 397 --
Foreign Exchange Gains and Losses, Net (271) -- -- (271)
Loss on Debt Extinguishment (18,940) -- 18,940 --
Other, net (2,277) 1,041 -- (1,236)
----------- ----------- ----------- -----------
Income (Loss) before Income Taxes (29,641) (633) 23,708 (6,566)
Income Tax (Benefit) Expense -- -- -- --
----------- ----------- ----------- -----------
Net Income (Loss) (29,641) (633) 23,708 (6,566)
Preferred Stock Dividends 264 -- -- 264
----------- ----------- ----------- -----------
Net Income (Loss) Applicable to Common Stockholders $ (29,905) $ (633) $ 23,708 $ (6,830)
=========== =========== =========== ===========
Basic and Diluted Net Loss Per Share $ (1.16) $ (0.26)
=========== ===========
Weighted Average Shares Outstanding 25,802 25,802
=========== ===========
</Table>
Wabash National Corporation
Pro Forma Statement of Income for the Three Months Ended June 30, 2003
Dollars in Thousands, Except Per Share Amounts
(Unaudited)
<Table>
<Caption>
Adjustments
----------------------------
Historical Asset Sale Refinancing Pro forma
----------- ----------- ----------- -----------
Net Sales $ 230,231 $ (21,021) $ -- $ 209,210
Cost of Sales 206,542 (17,856) -- 188,686
Loss on Asset Impairment 28,500 (28,500) -- --
----------- ----------- ----------- -----------
Gross Profit (Loss) (4,811) 25,335 -- 20,524
G & A 7,894 (352) (706) 6,836
Selling 6,022 (628) -- 5,394
----------- ----------- ----------- -----------
Income (Loss) from Operations (18,727) 26,315 706 8,294
Other Income (Expense):
Interest Expense (10,391) 645 6,046 (3,700)
Trade Receivable Facility Costs (403) -- 403 --
Foreign Exchange Gains and Losses, Net 2,733 -- -- 2,733
Loss on Debt Extinguishment -- -- -- --
Other, net (480) 18 -- (462)
----------- ----------- ----------- -----------
Income (Loss) before Income Taxes (27,268) 26,978 7,155 6,865
Income Tax (Benefit) Expense -- -- -- --
----------- ----------- ----------- -----------
Net Income (Loss) (27,268) 26,978 7,155 6,865
Preferred Stock Dividends 264 -- -- 264
----------- ----------- ----------- -----------
Net Income (Loss) Applicable to Common Stockholders $ (27,532) $ 26,978 $ 7,155 $ 6,601
=========== =========== =========== ===========
Basic and Diluted Net Income (Loss) Per Share $ (1.07) $ 0.26
=========== ===========
Weighted Average Shares Outstanding 25,705 25,705
=========== ===========
</Table>
Wabash National Corporation
Pro Forma Statement of Income for the Three Months Ended March 31, 2003
Dollars in Thousands, Except Per Share Amounts
(Unaudited)
<Table>
<Caption>
Adjustments
----------------------------
Historical Asset Sale Refinancing Pro forma
----------- ----------- ----------- -----------
Net Sales $ 222,508 $ (19,834) $ -- $ 202,674
Cost of Sales 200,167 (15,903) -- 184,264
Loss on Asset Impairment -- -- -- --
----------- ----------- ----------- -----------
Gross Profit (Loss) 22,341 (3,931) -- 18,410
G & A 10,539 (695) (782) 9,062
Selling 5,218 (714) -- 4,504
----------- ----------- ----------- -----------
Income (Loss) from Operations 6,584 (2,522) 782 4,844
Other Income (Expense):
Interest Expense (7,868) 634 3,334 (3,900)
Trade Receivable Facility Costs (222) -- 222 --
Foreign Exchange Gains and Losses, Net 2,856 -- -- 2,856
Loss on Debt Extinguishment -- -- -- --
Other, net 80 9 -- 89
----------- ----------- ----------- -----------
Income (Loss) before Income Taxes 1,430 (1,879) 4,338 3,889
Income Tax (Benefit) Expense -- -- -- --
----------- ----------- ----------- -----------
Net Income (Loss) 1,430 (1,879) 4,338 3,889
Preferred Stock Dividends 264 -- -- 264
----------- ----------- ----------- -----------
Net Income (Loss) Applicable to Common Stockholders $ 1,166 $ (1,879) $ 4,338 $ 3,625
=========== =========== =========== ===========
Basic and Diluted Net Loss Per Share $ 0.05 $ 0.14
=========== ===========
Weighted Average Shares Outstanding 25,653 25,653
=========== ===========
</Table>