Wabash National Corporation Announces First Quarter 2014 Results

Wabash National Corporation Announces First Quarter 2014 Results  LAFAYETTE, Ind., April 28, 2014 (GLOBE NEWSWIRE) -- Wabash National Corporation (NYSE:WNC), a diversified industrial manufacturer and North America's leading producer of semi-trailers and liquid transportation systems, today reported results for the first quarter ended March 31, 2014. Highlights include:    *Net sales of $358 million for first quarter 2014, up 10 percent over prior     year   *Operating income of $19.5 million for first quarter 2014, up 31 percent     over prior year   *Non-GAAP adjusted earnings per share improves 33 percent from prior year     to $0.12 per diluted share  Net income for the first quarter of 2014 was $7.3 million, or $0.10 per diluted share, compared to the first quarter 2013 net income of $5.7 million, or $0.08 per diluted share. First quarter 2014 non-GAAP adjusted earnings were $8.3 million, or $0.12 per diluted share, after excluding a $1.0 million charge related to a change in statutory income tax rates. The Company's prior year period results included the impact of one-time costs related to the acquisitions of Walker Group Holdings, LLC ("Walker") in May 2012 and certain assets of Beall Corporation ("Beall") in February 2013 totaling $0.6 million, or $0.01 per diluted share. Excluding the impact of these items, non-GAAP adjusted earnings for the quarter ended March 31, 2013 were $6.1 million, or $0.09 per diluted share.  For the first quarter of 2014, the Company's net sales increased 10 percent to $358 million from $324 million in the prior year quarter, and operating income increased 31 percent to $19.5 million compared to operating income of $14.9 million for the first quarter of 2013. Operating EBITDA, a non-GAAP measure that excludes the effects of costs related to the acquisitions of Walker and certain assets of Beall, as well as other recurring and non-recurring items, for the first quarter of 2014 was $30.6 million, an increase of $3.5 million compared to Operating EBITDA for the previous year period. On a trailing twelve month basis, the Company's net sales increased to $1.7 billion generating Operating EBITDA of $153.4 million, or 9.2 percent of net sales. Continued improvement in operating performance is attributable to the successful execution of the Company's growth and diversification strategy as well as a disciplined approach to improving profitability. Through these initiatives the Company has enhanced its growth and margin profile and now derives its revenues and earnings from a broad array of products, customers, end markets and geographies.  The following is a summary of select operating and financial results for the past five quarters:               Three Months Ended              March 31,      June 30,       September      December    March 31,                                                 30,             31, (Dollars in   2013           2013           2013           2013        2014        thousands)                                                                              Net Sales     $324,229     $413,126     $439,977     $458,354  $358,120                                                                               Gross Profit  13.0%          14.2%          14.0%          11.5%       13.0%       Margin                                                                              Income from   $14,856  ^(1) $30,452  ^(1) $33,830  ^(1) $24,053   $19,465   Operations                                                                              Net Income    $5,735   ^(1) $14,135  ^(1) $16,236  ^(1) $10,423   $7,296                                                                                 Diluted EPS   $0.08        $0.20        $0.23        $0.15     $0.10                                                                                  Non-GAAP                                                                      Measures^(2): Operating     $27,134      $42,246      $44,873      $35,637   $30,618   EBITDA                                                                              Operating     8.4%           10.2%          10.2%          7.8%        8.5%        EBITDA Margin                                                                              Adjusted      $6,106       $14,697      $16,616      $10,770   $8,337    Earnings                                                                              Adjusted      $0.09        $0.21        $0.24        $0.15     $0.12     Diluted EPS  Notes: (1) Quarterly Income from Operations and Net Income include charges of $0.6 million, $0.2 million and less than $0.1 million for the first, second and third quarters of 2013, respectively, in connection with the Company's acquisitions of Walker and certain assets of Beall. (2) See "Non-GAAP Measures" below for explanation of the non-GAAP results included above.  Dick Giromini, president and chief executive officer, stated, "We are very pleased with our first quarter performance and the strong start to the current year across all of our operating segments.We maintained the momentum we generated in 2013 and further validated the transformative nature of our growth and diversification initiatives.We generated strong growth and healthy margins across each of our three operating segments, which gives us confidence in our business as we look to the remainder of 2014."  Mr. Giromini continued, "New trailer shipments for the first quarter were approximately 9,900, at the top end of our previous guidance of 9,000 to 10,000 trailers.We were encouraged by the overall strength of the demand in the first quarter taking into account the difficulties most of our customers faced due to the extreme weather conditions throughout much of the country, which limited our ability to ship trailers in the quarter.The recent upward adjustments to total trailer shipments and production by ACT Research and FTR, respectively, further support the strength in trailer demand and substantiate our prior guidance for top line growth compared to last year.As such, we affirm our full-year trailer shipment guidance of 47,000 to 50,000 units.Our backlog remains healthy at approximately $791 million as of March 31, 2014, an increase of approximately $117 million, or 17 percent, from March 31, 2013.Additionally, current industry forecasts point to strong demand levels with projections well above replacement demand and exceeding previous year levels.Based on these factors coupled with direct customer feedback regarding their needs, we continue to believe 2014 has the potential to exceed the record performances achieved last year."  First Quarter Business Segment Highlights  The table below is a summary of select segment operating and financial results prior to the elimination of intersegment sales for the first quarter of 2014 and 2013, respectively.A complete disclosure of the results by individual segment is included in the tables following this release.  (dollars in thousands)        Commercial      Diversified                               Trailer Products Products    Retail Three months ended March 31,                              2014                                                      New trailers shipped          9,200           800        800 Net sales                     $227,450       $119,949  $45,636 Gross profit                  $14,941        $25,439   $5,381 Gross profit margin           6.6%             21.2%       11.8% Income from operations        $8,931         $12,857   $1,050 Income from operations margin 3.9%             10.7%       2.3%                                                          2013                                                      New trailers shipped          8,000           600        600 Net sales                     $198,077       $111,994  $40,843 Gross profit                  $11,634        $25,928   $4,880 Gross profit margin           5.9%             23.2%       11.9% Income from operations        $5,320         $13,519   $873 Income from operations margin 2.7%             12.1%       2.1%  Commercial Trailer Products' net sales increased $29 million, or 14.8 percent, on shipments of 9,200 trailers, or 1,200 more trailers than the prior year period.This increase in revenue was primarily due to the 15.0 percent increase in trailer shipments during the quarter, offset by a 2.7 percent reduction in average selling prices compared to the prior year period due to customer and product mix.Driven by higher volumes, gross profit and gross profit margin increased $3.3 million and 70 basis points, respectively, as compared to the same period last year.Operating income increased by $3.6 million to $8.9 million from the first quarter last year, due to increased volume and continued operational improvements.  Diversified Products' net sales increased $8 million, or 7.1 percent, primarily attributed to increased tank trailer shipments as compared to the previous year period.Gross profit and gross profit margin declined $0.5 million and 200 basis points, respectively, compared to the prior year period, primarily due to higher raw material costs related to our wood flooring operations.Operating income decreased $0.7 million as compared to the same period last year due to higher material costs and increased intangible amortization charges associated with the recent acquisitions of Walker and certain assets of Beall.  Retail's net sales of $46 million increased 11.7 percent compared with the prior year period, primarily due to increased shipments of new trailers, as well as continued strong demand for parts and services.Gross profit margin of 11.8 percent was consistent with the previous year period as higher volumes offset increased cost of services supporting our strategic growth initiatives.Operating income increased $0.2 million during the first quarter of 2014 as compared to the same period last year as increased volumes were slightly offset by higher selling and administrative expenses related to our strategic growth initiatives.  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 contain non-GAAP financial measures, including Operating EBITDA, Operating EBITDA margin, adjusted earnings and adjusted earnings per diluted share.  These non-GAAP measures should not be considered a substitute for, or superior to, financial measures and results calculated in accordance with GAAP, including net income, and reconciliations to GAAP financial statements should be carefully evaluated.  Operating EBITDA is defined as earnings before interest, taxes, depreciation, amortization, stock-based compensation, and other non-operating income and expense, as well as certain charges in connection with the Company's acquisitions of Walker and certain assets of Beall.Management believes Operating EBITDA provides useful information to investors regarding our results of operations.The Company provides 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 the Company's operating performance.A reconciliation of Operating EBITDA to net income is included in the tables following this release.  Adjusted earnings and adjusted earnings per diluted share reflect adjustments for non-recurring charges related to the Company's acquisitions of Walker and certain assets of Beall, losses incurred in connection with the Company's extinguishment of debt and revaluation of deferred income tax assets due to changes in statutory tax rates.Management believes providing this measure and excluding these items facilitate comparisons to the Company's prior year periods and, when combined with the primary GAAP presentation of net income and diluted net income per share, is beneficial to an investor's understanding of the Company's performance.A reconciliation of adjusted earnings and adjusted earnings per diluted share to net income and diluted net income per share is included in the tables following this release.  First Quarter 2014 Conference Call  Wabash National will conduct a conference call to review and discuss its first quarter results on April 29, 2014, at 10:00 a.m. EDT. Access to the live webcast will be available 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 July 22, 2014.Meeting access also will be available via conference call at 888-771-4371, participant code 37103303.  About Wabash National Corporation  Headquartered in Lafayette, Indiana, Wabash National Corporation (NYSE:WNC) is a diversified industrial manufacturer and North America's leading producer of semi trailers and liquid transportation systems. Established in 1985, the Company specializes in the design and production of dry freight vans, refrigerated vans, platform trailers, liquid tank trailers, intermodal equipment, engineered products, and composite products.Its innovative products are sold under the following brand names: Wabash National^®, Transcraft^®, Benson^®, DuraPlate^®, ArcticLite^®, Walker Transport, Walker Defense Group, Walker Barrier Systems, Walker Engineered Products, Brenner^® Tank, Beall^®, Garsite, Progress Tank, TST^®, Bulk Tank International and Extract Technology^®. To learn more, visit www.wabashnational.com.  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 trailer shipments, backlog, and the expectations regarding our growth and diversification strategies, expectations regarding trailer demand levels, and our belief that 2014 has the potential to exceed the record performances achieved in the previous year.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, dependence on industry trends and timing, costs of indebtedness incurred in connection with the acquisition of Walker and the failure to achieve the benefit of the Walker acquisition and Beall asset purchase.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                                                          March 31,                                                         2014       2013                                                                    Net sales                                                $358,120 $324,229 Cost of sales                                            311,448   282,043 Gross profit                                             46,672    42,186                                                                    General and administrative expenses                      14,472    13,675 Selling expenses                                         7,264     7,667 Amortization of intangibles                              5,471     5,370 Acquisition expenses                                     --        618 Income from operations                                   19,465    14,856                                                                    Other income (expense):                                             Interest expense                                         (5,717)   (7,535) Other, net                                               32        2,238 Income before income taxes                               13,780    9,559 Income tax expense                                       6,484     3,824 Net income                                              $7,296   $5,735 Basic net income per share                               $0.11    $0.08 Diluted net income per share                             $0.10    $0.08                                                                    Comprehensive income                                                Net income                                               $7,296   $5,735 Foreign currency translation adjustment                  161       (255) Net comprehensive income                                 $7,457   $5,480                                                                                                                                       Basic net income per share:                                         Net income applicable to common stockholders             $7,296   $5,735 Undistributed earnings allocated to participating        (61)      (51) securities Net income applicable to common stockholders excluding   $7,235   $5,684 amounts applicable to participating securities Weighted average common shares outstanding               68,669    68,395 Basic net income per share                               $0.11    $0.08                                                                    Diluted net income per share:                                       Net income applicable to common stockholders             $7,296   $5,735 Undistributed earnings allocated to participating        (61)      (51) securities Net income applicable to common stockholders excluding              amounts applicable to participating securities           $7,235   $5,684                                                                    Weighted average common shares outstanding               68,669    68,395 Dilutive shares from assumed conversion of convertible   1,591     -- senior notes Dilutive stock options and restricted stock              828       433 Diluted weighted average common shares outstanding       71,088    68,828 Diluted net income per share                             $0.10    $0.08                                                                                                                                        WABASH NATIONAL CORPORATION SEGMENTS AND RELATED INFORMATION (Dollars in thousands) (Unaudited)                                                                                Commercial Diversified          Corporate and  Three Months      Trailer     Products    Retail   Eliminations  Consolidated Ended March 31,   Products 2014                                                           New trailers      9,200      800        800      (900)        9,900 shipped Used trailers     1,700      --        400      --          2,100 shipped                                                               New Trailers      $213,436  $54,847   $20,271 $(20,436)   $268,118 Used Trailers     11,248     1,178      3,639    --          16,065 Components, parts 617        23,210     20,973   (3,102)      41,698 and service Equipment and     2,149      40,714     753      (11,377)     32,239 other Total net         $227,450  $119,949  $45,636 $(34,915)   $358,120 external sales                                                               Gross profit      $14,941   $25,439   $5,381  $911        $46,672 Income (Loss)     $8,931    $12,857   $1,050  $(3,373)    $19,465 from operations                                                               2013                                                           New trailers      8,000      600        600      (600)        8,600 shipped Used trailers     700        --        300      --          1,000 shipped                                                               New Trailers      $188,979  $43,521   $16,943 $(13,976)   $235,467 Used Trailers     5,050      949        2,653    (5)          8,647 Components, parts 2,819      21,061     19,963   (2,558)      41,285 and service Equipment and     1,229      46,463     1,284    (10,146)     38,830 other Total net         $198,077  $111,994  $40,843 $(26,685)   $324,229 external sales                                                               Gross profit      $11,634   $25,928   $4,880  $(256)      $42,186 Income (Loss)     $5,320    $13,519   $873    $(4,856)    $14,856 from operations                                                                                                                              WABASH NATIONAL CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands)                                                                                                     March 31,   December 31,                                             2014        2013                                             (Unaudited)  ASSETS                                                   Current assets                                           Cash and cash equivalents                    $65,736   $113,262 Accounts receivable                          118,864    120,358 Inventories                                  262,915    184,173 Deferred income taxes                        16,902     21,576 Prepaid expenses and other                   11,197     9,632 Total current assets                         $475,614  $449,001                                                         Property, plant and equipment                140,254    142,082                                                         Deferred income taxes                        1,044      1,401                                                         Goodwill                                     149,950    149,967                                                         Intangible assets                            153,746    159,181                                                         Other assets                                 11,425     10,613                                             $932,033  $912,245                                                         LIABILITIES AND STOCKHOLDERS' EQUITY                     Current liabilities                                      Current portion of long-term debt            $3,250    $3,245 Current portion of capital lease obligations 1,529      1,609 Accounts payable                             129,316    112,151 Other accrued liabilities                    91,008     99,358 Total current liabilities                    $225,103  $216,363                                                         Long-term debt                               359,270    358,890                                                         Capital lease obligations                    6,584      6,851                                                         Deferred income taxes                        2,191      1,234                                                         Other noncurrent liabilities                 7,504      6,528                                                         Commitments and contingencies                                                                                    Stockholders' equity                         331,381    322,379                                             $932,033  $912,245                                                                                                                  WABASH NATIONAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited)                                                                                                                    Three Months Ended March 31,                                                  2014             2013                                                                   Cash flows from operating activities                               Net income                                        $7,296         $5,735 Adjustments to reconcile net income to net cash used in operating   activities Depreciation                                      4,042           4,406 Amortization of intangibles                       5,471           5,370 Deferred income taxes                             5,988           3,790 Stock-based compensation                          1,640           1,884 Accretion of debt discount                        1,195           1,126 Changes in operating assets and liabilities                        Accounts receivable                               1,494           (4,593) Inventories                                       (78,742)        (46,580) Prepaid expenses and other                        (1,565)         (83) Accounts payable and accrued liabilities          8,815           19,563 Other, net                                        311             1,716 Net cash used in operating activities             $(44,055)      $(7,666)                                                                   Cash flows from investing activities                               Capital expenditures                              (2,078)         (2,564) Acquisition                                       --             (13,860) Other                                             --             2,418 Net cash used in investing activities             $(2,078)       $(14,006)                                                                   Cash flows from financing activities                               Proceeds from exercise of stock options           1,517           161 Borrowings under revolving credit facilities      175             223 Payments under revolving credit facilities        (175)           (223) Principal payments under capital lease            (603)           (441) obligations Principal payments under term loan credit         (693)           (750) facility Principal payments under industrial revenue bond  (117)           (38) Debt issuance costs paid                          --             (41) Stock repurchase                                  (1,497)         (35) Net cash used in financing activities             $(1,393)       $(1,144)                                                                   Net decrease in cash and cash equivalents         $(47,526)      $(22,816) Cash and cash equivalents at beginning of period  113,262         81,449 Cash and cash equivalents at end of period        $65,736        $58,633                                                                                                                                      WABASH NATIONAL CORPORATION RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES (Dollars in thousands, except per share amounts) (Unaudited)                                                                   Operating EBITDA:                                                                       Three Months Ended                                                   March 31,                      2014      2013                                 Net income            $7,296  $5,735                             Income tax expense    6,484    3,824                               Interest expense      5,717    7,535                               Depreciation and      9,513    9,776                               amortization Stock-based           1,640    1,884                               compensation Acquisition expenses  --      618                                 Other non-operating   (32)     (2,238)                             income Operating EBITDA      $30,618 $27,134                                                                                                                                                                                     Three Months Ended                                                   June 30,  September December                                                    30,       31,                      2013      2013      2013                        Net income           $14,135 $16,236 $10,423                   Income tax expense    9,407    10,737   7,126                      Interest expense      6,577    6,252    5,944                      Depreciation and      9,531    9,400    9,629                      amortization Stock-based           2,024    1,617    1,955                      compensation Acquisition expenses  239      26       --                        Other non-operating   333      605      560                        expense Operating EBITDA      $42,246 $44,873 $35,637                                                                                                                                                       Adjusted Earnings:                                                                      Three Months Ended March 31,                                          2014                2013                                              $         Per Share $          Per                                                                    Share                                                                   Net Income            $7,296  $0.10   $5,735   $0.08                                                                             Adjustments:                                                       Revaluation of net deferred income tax assets  due to        1,041    0.01     --       --              changes in statutory tax rates Acquisition expenses, --      --      371       0.01             net of taxes                                                                   Adjusted earnings     $8,337  $0.12   $6,106   $0.09                                                                             Weighted Average # of 71,088            68,828                     Diluted Shares O/S                                                                                                                                                          Three Months Ended                      June 30, 2013       September 30, 2013 December 31, 2013                      $         Per Share $          Per     $         Per                                                      Share             Share                                                                   Net Income            $14,135 $0.21   $16,236  $0.24 $10,423 $0.15                                                                   Adjustments:                                                       Loss on debt extinguishment, net   419      0.01     364       0.01   347      -- of taxes Acquisition expenses, 143      --      16        --    --      -- net of taxes                                                                   Adjusted earnings     $14,697 $0.21   $16,616  $0.24 $10,770 $0.15                                                                   Weighted Average # of 68,858            69,011           69,625    Diluted Shares O/S                                                                    CONTACT: Media Contact:          Dana Stelsel          Corporate Communications Manager          (765) 771-5766          dana.stelsel@wabashnational.com                   Investor Relations:          Jeff Taylor          Senior Vice President and Chief Financial Officer          (765) 771-5438          jeff.taylor@wabashnational.com  company logo  
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