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Tue, February 17, 2009
Mon, February 16, 2009
Wabash National Corporation: Wabash National Corporation Announces 2008 Fourth Quarter and Full Year Results
LAFAYETTE, IN--(Marketwire - February 16, 2009) - Wabash National Corporation (
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:
-- 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, -- 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, -- Continued close monitoring of the costs associated with hourly associates including the elimination of certain incentives, -- 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 (
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.
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 ============= ============ ============ ============ 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 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY 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 ========== ==========