Published:
Wabash National Corporation Announces Third Quarter Results
Third Quarter Achieves Sequential Improvement in Operating Results
Wabash National Corporation (NYSE: WNC)
reported sequential operating improvements across several key financial and
operating metrics. The Company reported an operating loss of $10.2 million
for the third quarter of 2009, compared to an operating loss of $16.7
million for the second quarter of 2009. For the third quarter last year
the Company reported an operating loss of $4.5 million. For the nine
months ended September 30, the Company reported an operating loss of $54.2
million and $16.5 million for 2009 and 2008, respectively.
The following is a summary of select operating and financial results
trended for the past five quarters:
Three Months Ended
-----------------------------------------------------------
(Dollars in September 30, December 31, March 31, June 30, September 30,
thousands) 2008 2008 2009 2009 2009
-------- ------------- -------- -------- -------------
New Trailer
Units Sold 9,700 9,400 2,700 3,200 3,600
Net Sales $242,953 $ 230,715 $ 77,937 $ 86,206 $ 88,324
Gross Profit
Margin 3.7% -2.1% -19.9% -6.1% -0.4%
Loss from
Operations $ (4,492) $ (87,238)(1) $(27,319) $(16,664) $ (10,207)
Net Loss $ (4,330) $ (111,906)(1) $(28,284) $(17,935) $ (66,404)(2)
Operating
EBITDA
(Non-GAAP) $ 1,944 $ (13,451) $(21,558)$ (10,687) $ (4,607)
Notes: (1) During the fourth quarter of 2008, the Company incurred
a goodwill impairment charge of $66.3 million included in the
Loss from Operations and Net Loss.
(2) Third quarter 2009 Net Loss includes a non-cash charge of
$54.0 million related to the increase in the fair value of the
Company's warrant.
Operating results for the 2009 third quarter continued the trend of
sequential improvement despite the depressed overall demand for new
trailers. On a non-GAAP basis, Operating EBITDA (Earnings before interest,
taxes, preferred stock dividends, depreciation, amortization, stock based
compensation, and other non-operating income and expense; as well as, any
other non-cash special charges) improved by over 50% for the second
consecutive quarter to a loss of $4.6 million. The continued improvements
in operating results and Operating EBITDA are reflective of cost reduction
initiatives that have been implemented throughout the year, improved raw
material costs, and the impact of improved manufacturing operations
achieved from the Lafayette Transformation Project, which eliminated three
dry van production lines. 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 loss is provided in the supplemental schedules
included in this release.
Dick Giromini, President and Chief Executive Officer, stated, "For the
third quarter, our operating loss has now shown improvement for three
straight quarters at $10.2 million and Operating EBITDA improved by 57%
versus the second quarter to a loss of $4.6 million. In addition, net sales
improved for the second straight quarter. We are encouraged by these
results despite the challenging demand environment and remain committed to
returning the Company to profitability as quickly as possible. These
results, combined with enhanced liquidity which as of September 30th was
$36 million, give us confidence that we can weather the current cycle and
build upon a stronger, more efficient foundation when market conditions
improve."
Giromini continued, "Looking ahead, we see several encouraging signs in the
macroeconomic landscape. Total manufacturing inventories appear to be
bottoming and both tonnage and net trailer orders are incrementally
increasing. While the operating environment will likely remain challenging
for the near-term, we believe the worst is now behind us."
Financial Results
The Company reported a net loss of $66.4 million, or $2.23 per diluted
share, for the third quarter of 2009 on net sales of $88 million. For the
same quarter last year, the Company reported a net loss of $4.3 million, or
$0.15 per diluted share. Third quarter new trailer sales totaled 3,600
units, which represents a 63% decline from the prior year period. For the
nine months ended September 30, 2009, the net loss totaled $112.6 million
or $3.77 per diluted share on sales of $252 million. For the comparable
period of 2008, the net loss totaled $13.9 million, or $0.47 per diluted
share, on sales of $605 million.
Three and nine month results for 2009 include a non-cash charge of $54.0
million related to an increase in the fair value of the warrant issued to
Trailer Investments as a part of the Securities Purchase Agreement entered
into on July 17, 2009. The increase in the fair value of the warrant was
driven by the increase in the Company's stock price during the quarter.
Third Quarter 2009 Conference Call
Wabash National Corporation will conduct a conference call to review and
discuss its third quarter results on November 5, 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
January 28, 2010.
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 nine month
periods ended September 30, 2009 contain the non-GAAP financial measure
Operating EBITDA that excludes, among other things, charges incurred in the
third quarter of 2009 as a result of the fair value accounting of the
Company's outstanding stock warrants of approximately $54 million. The
charge associated with these stock warrants are presented separately within
Other Income and Expense on the Company's Condensed Consolidated Statements
of Operations for the three and nine month periods ended September 30,
2009.
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, any other non-cash
special charges (asset impairments). Management believes Operating EBITDA
provides useful information to investors regarding our results of
operations because it helps us and our investors evaluate the ongoing
operating performance of the Company. Management uses Operating EBITDA to
evaluate consolidated as well as individual business segment results.
Management uses Operating EBITDA when evaluating Company performance
because we believe that the exclusion of the recurring and non-recurring
items identified above provides management with a basis for assessing
Company performance period to period. We also use Operating EBITDA because
we believe that it provides useful supplemental information to investors
regarding our ongoing operating performance and that 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
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®,
FreightPro(TM), Eagle®, and Benson(TM) 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, 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 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, 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)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ----------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
NET SALES $ 88,324 $ 242,953 $ 252,467 $ 605,498
COST OF SALES 88,645 233,965 273,495 579,832
---------- ---------- ---------- ----------
Gross profit (321) 8,988 (21,028) 25,666
GENERAL AND ADMINISTRATIVE
EXPENSES 7,320 10,060 24,493 32,016
SELLING EXPENSES 2,566 3,420 8,669 10,189
---------- ---------- ---------- ----------
Loss from operations (10,207) (4,492) (54,190) (16,539)
OTHER INCOME (EXPENSE)
Increase in fair value
of warrant (53,983) - (53,983) -
Interest expense (1,148) (1,154) (3,459) (3,349)
(Loss) Gain on debt
extinguishment (303) - (303) 151
Other, net (818) 28 (729) (174)
---------- ---------- ---------- ----------
Loss before income taxes (66,459) (5,618) (112,664) (19,911)
INCOME TAX BENEFIT (55) (1,288) (41) (5,991)
---------- ---------- ---------- ----------
NET LOSS (66,404) (4,330) (112,623) (13,920)
PREFERRED STOCK DIVIDENDS 1,096 - 1,096 -
---------- ---------- ---------- ----------
NET LOSS APPLICABLE TO
COMMON STOCKHOLDERS $ (67,500) $ (4,330) $ (113,719) $ (13,920)
========== ========== ========== ==========
COMMON STOCK DIVIDENDS
DECLARED $ - $ 0.045 $ - $ 0.135
========== ========== ========== ==========
BASIC AND DILUTED NET LOSS
PER SHARE $ (2.23) $ (0.15) $ (3.77) $ (0.47)
========== ========== ========== ==========
COMPREHENSIVE LOSS
Net loss $ (66,404) $ (4,330) $ (112,623) $ (13,920)
Reclassification
adjustment for interest
rate swaps included in
net loss 1,167 - 1,398 -
Changes in fair value of
derivatives (net of
tax) - (140) 118 (140)
---------- ---------- ---------- ----------
NET COMPREHENSIVE LOSS $ (65,237) $ (4,470) $ (111,107) $ (14,060)
========== ========== ========== ==========
Three months ended Retail &
September 30, Manufacturing Distribution Eliminations Total
---------- ----------- ----------- ----------
2009
Net sales $ 75,371 $ 16,410 $ (3,457) $ 88,324
(Loss) Income from
operations $ (8,284) $ (1,961) $ 38 $ (10,207)
New trailers shipped 3,600 100 (100) $ 3,600
2008
Net sales $ 217,657 $ 43,115 $ (17,819) $ 242,953
(Loss) Income from
operations $ (3,221) $ (1,381) $ 110 $ (4,492)
New trailers shipped 9,600 900 (800) 9,700
Nine months ended
September 30,
2009
Net sales $ 206,896 $ 55,292 $ (9,721) $ 252,467
(Loss) Income from
operations $ (48,113) $ (6,250) $ 173 $ (54,190)
New trailers shipped 9,400 500 (400) $ 9,500
2008
Net sales $ 536,038 $ 112,329 $ (42,869) $ 605,498
(Loss) Income from
operations $ (14,613) $ (2,767) $ 841 $ (16,539)
New trailers shipped 23,900 2,000 (1,900) 24,000
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ----------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
Net loss applicable to
common stockholders $ (67,500) $ (4,330) $ (113,719) $ (13,920)
Dividends paid on unvested
restricted shares - (34) - (100)
---------- ---------- ---------- ----------
Net loss applicable to
common stockholders
excluding amounts
applicable to unvested
restricted shares, basic
and diluted $ (67,500) $ (4,364) $ (113,719) $ (14,020)
========== ========== ========== ==========
Basic and diluted weighted
average common shares
outstanding 30,331 29,993 30,196 29,933
========== ========== ========== ==========
Basic and diluted net loss
per share $ (2.23) $ (0.15) $ (3.77) $ (0.47)
========== ========== ========== ==========
The computation of diluted net loss per share for the three and nine month
periods ending September 30, 2008 excludes the after-tax equivalent of
interest on the Company's Senior Convertible Notes (Convertible Notes)
of $0.1 million and $0.8 million, respectively. Average diluted shares
outstanding for the three and nine month periods ending September 30, 2009
and 2008 also exclude the antidilutive effects of the following potential
common shares (in thousands):
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ----------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
Convertible Notes
equivalent shares - 472 - 2,281
Stock options and
restricted stock - 125 11 107
Redeemable warrants 20,333 - 6,852 -
Options to purchase common
shares 2,143 1,502 2,164 1,618
WABASH NATIONAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
September 30, December 31,
2009 2008
------------- -------------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 2,798 $ 29,766
Accounts receivable, net 22,854 37,925
Inventories 59,507 92,896
Prepaid expenses and other 3,222 5,307
------------- -------------
Total current assets 88,381 165,894
PROPERTY, PLANT AND EQUIPMENT, net 112,333 122,035
INTANGIBLE ASSETS 26,730 29,089
OTHER ASSETS 13,053 14,956
------------- -------------
$ 240,497 $ 331,974
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $ - $ 80,008
Current portion of capital lease obligation 337 337
Accounts payable 34,720 42,798
Other accrued liabilities 35,711 45,449
Warrant 67,208 -
------------- -------------
Total current liabilities 137,976 168,592
LONG-TERM DEBT 30,069 -
CAPITAL LEASE OBLIGATION 4,553 4,803
OTHER NONCURRENT LIABILITIES AND CONTINGENCIES 4,115 5,142
PREFERRED STOCK, net of discount, 25,000,000
shares authorized, $0.01 par value,
35,000 and 0 shares issued and outstanding,
respectively 19,404 -
STOCKHOLDERS' EQUITY 44,380 153,437
------------- -------------
$ 240,497 $ 331,974
============= =============
WABASH NATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
Nine Months Ended
September 30,
----------------------
2009 2008
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (112,623) $ (13,920)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities
Depreciation and amortization 14,432 15,535
Net loss on the sale of assets 5 236
Loss (Gain) on debt extinguishment 303 (151)
Increase in fair value of warrant 53,983 -
Deferred income taxes - (5,849)
Excess tax benefits from stock-based compensation - (6)
Stock-based compensation 2,906 3,452
Changes in operating assets and liabilities
Accounts receivable 15,071 (7,104)
Inventories 33,389 (19,716)
Prepaid expenses and other 2,084 2,028
Accounts payable and accrued liabilities (17,020) 33,705
Other, net (76) 85
---------- ----------
Net cash (used in) provided by operating
activities (7,546) 8,295
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (669) (8,037)
Proceeds from the sale of property, plant and
equipment 125 131
---------- ----------
Net cash used in investing activities (544) (7,906)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of stock options - 97
Excess tax benefits from stock-based compensation - 6
Borrowings under revolving credit facilities 179,018 139,250
Payments under revolving credit facilities (228,957) (60,250)
Payments under long-term debt obligations - (104,133)
Principal payments under capital lease obligations (250) (107)
Proceeds from issuance of preferred stock and
warrant 35,000 -
Debt issuance costs paid (1,275) (4)
Preferred stock issuance costs paid (2,414) -
Common stock dividends paid - (4,127)
---------- ----------
Net cash used in financing activities (18,878) (29,268)
---------- ----------
NET DECREASE IN CASH AND CASH EQUIVALENTS (26,968) (28,879)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 29,766 41,224
---------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 2,798 $ 12,345
========== ==========
WABASH NATIONAL CORPORATION
RECONCILIATION OF GAAP FINANCIAL MEASURES TO
NON-GAAP FINANCIAL MEASURES
(Dollars in thousands)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ----------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
Net loss $ (66,404) $ (4,330) $ (112,623) $ (13,920)
Income tax benefit (55) (1,288) (41) (5,991)
Increase in fair value of
warrant 53,983 - 53,983 -
Interest expense 1,148 1,154 3,459 3,349
Loss (Gain) on debt
extinguishment 303 - 303 (151)
Depreciation 3,418 3,667 10,147 11,062
Amortization 1,414 1,487 4,285 4,473
Stock-based compensation 768 1,282 2,906 3,452
Other non-operating expense
(income) 818 (28) 729 174
---------- ---------- ---------- ----------
Operating EBITDA $ (4,607) $ 1,944 $ (36,852) $ 2,448
========== ========== ========== ==========
Three Months Ended
----------------------------------
March 31, June 30, September 30,
2009 2009 2009
---------- ---------- ----------
Net loss $ (28,284) $ (17,935) $ (66,404)
Income tax expense
(benefit) 15 (1) (55)
Increase in fair value of
warrant - - 53,983
Interest expense 1,005 1,306 1,148
Loss on debt extinguishment - - 303
Depreciation 3,348 3,381 3,418
Amortization 1,448 1,423 1,414
Stock-based compensation 965 1,173 768
Other non-operating expense
(income) (55) (34) 818
---------- ---------- ----------
Operating EBITDA $ (21,558) $ (10,687) $ (4,607)
========== ========== ==========
Three Months Ended
-----------------------------------------------
March 31, June 30, September 30, December 31,
2008 2008 2008 2008
----------- ---------- ---------- ----------
Net loss $ (6,387) $ (3,203) $ (4,330) $ (111,906)
Income tax (benefit)
expense (3,693) (1,010) (1,288) 23,055
Interest expense 1,174 1,021 1,154 1,308
Gain on debt extinguishment (124) (27) - -
Depreciation 3,690 3,705 3,667 4,458
Amortization 1,497 1,489 1,487 1,474
Stock-based compensation 863 1,307 1,282 1,538
Impairment of goodwill - - - 66,317
Other non-operating expense
(income) (7) 209 (28) 305
----------- ---------- ---------- ----------
Operating EBITDA $ (2,987) $ 3,491 $ 1,944 $ (13,451)
=========== ========== ========== ==========
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