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Wabash National Corporation: Wabash National Corporation Announces Second Quarter Results

^{Published on 2009-08-05 14:26:40, Last Modified on 2009-08-05 14:26:48 - Market Wire}
 

LAFAYETTE, IN--(Marketwire - August 5, 2009) - Wabash National Corporation (NYSE: [ WNC ]) reported a net loss of $17.9 million, or $0.59 per diluted share, for the second quarter of 2009 on net sales of $86 million. For the same quarter last year, the Company reported a net loss of $3.2 million, or $0.11 per diluted share. Second quarter new trailer sales totaled 3,200 units, which represents a 60% decline from the prior year period.

Dick Giromini, President and Chief Executive Officer, stated, "Following the quarter end, as previously announced, we completed the steps to strengthen our balance sheet and liquidity position, which provides us with additional financial flexibility to navigate the current environment. In addition, we reported a significantly reduced operating loss this quarter as compared to the prior two quarters despite the continuing depressed level of trailer demand, reflecting the flow through benefit of our cost reduction efforts. While we will continue to prudently manage the business in the near term, we remain committed to our long-term transformation initiatives and are now well-positioned for profitable growth as the economy recovers."

Sequential Improvement in Operating Results

Operating results for the 2009 second quarter were substantially improved compared to the results for the prior two quarters in spite of continued depressed demand for new trailers. Operating losses amounted to $16.7 million, $27.3 million and $87.2 million (including a goodwill impairment charge of $66.3 million) for the quarters ended June 30, 2009, March 31, 2009 and December 31, 2008, respectively. Contributors to this improvement include:

 -- reductions in raw material and component costs, excluding the impact of unfavorable aluminum contracts, -- cost reduction initiatives that include base pay reductions for all associates as well as salaried headcount reductions of approximately 130 associates, and -- substantial reductions in the manufacturing footprint through completion of the Lafayette Transformation project. 

Securities Purchase Agreement and Amended Revolving Credit Facility

On August 3, 2009, the Company announced that Trailer Investments, LLC, an entity formed for this purpose by Lincolnshire Equity Fund III, L.P., a private equity investment fund managed by Lincolnshire Management, Inc., had invested $35 million in the Company. For its investment Trailer Investments received preferred stock and a warrant that is immediately exercisable at $0.01 per share for 24,762,636 newly issued shares of common stock representing 44.21% of the issued and outstanding common stock of the Company. Wabash National received cash, net of fees and expenses paid, of $33 million and will use the proceeds to reduce borrowings and for general corporate purposes.

Concurrently, the Company entered into an Amended and Restated Loan and Security Agreement, which amends and restates the Company's current revolving credit facility. The revolving credit facility, as amended, provides for borrowings of up to $100 million, subject to a borrowing base and applicable reserves. Additionally, the lenders have agreed to waive specified defaults previously incurred by the Company. As a result of the Securities Purchase Agreement and the Amended Revolving Credit Facility, the Company's liquidity, define as cash on hand and available borrowing capacity, on August 3, 2009, the date of closing, was approximately $42 million.

Second Quarter 2009 Conference Call

Wabash National Corporation will conduct a conference call to review and discuss its second quarter results on August 6, 2009, 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 October 29, 2009.

About Wabash National Corporation

Headquartered in Lafayette, Ind., 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™, Eagle®, and BensonTM brand names. The company operates two wholly owned subsidiaries: Transcraft® Corporation, a manufacturer of flatbed, drop deck. dump trailers and 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 and whether profitability can be achieved. 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, uncertainty in the outcome of our discussions with lenders, 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 June 30, Six Months Ended June 30, ---------------------------- ---------------------------- 2009 2008 2009 2008 ------------- ------------- ------------- ------------- NET SALES $ 86,206 $ 201,484 $ 164,143 $ 362,545 COST OF SALES 91,437 190,711 184,850 345,867 ------------- ------------- ------------- ------------- Gross profit (5,231) 10,773 (20,707) 16,678 GENERAL AND ADMINISTRATIVE EXPENSES 8,515 10,457 17,173 21,956 SELLING EXPENSES 2,918 3,326 6,103 6,769 ------------- ------------- ------------- ------------- Loss from operations (16,664) (3,010) (43,983) (12,047) OTHER INCOME (EXPENSE) Interest expense (1,306) (1,021) (2,311) (2,195) Gain on debt extinguishment - 27 - 151 Other, net 34 (209) 89 (202) ------------- ------------- ------------- ------------- Loss before income taxes (17,936) (4,213) (46,205) (14,293) INCOME TAX (BENEFIT) EXPENSE (1) (1,010) 14 (4,703) ------------- ------------- ------------- ------------- NET LOSS $ (17,935) $ (3,203) $ (46,219) $ (9,590) ============= ============= ============= ============= COMMON STOCK DIVIDENDS DECLARED $ - $ 0.045 $ - $ 0.090 ============= ============= ============= ============= BASIC NET LOSS PER SHARE $ (0.59) $ (0.11) $ (1.53) $ (0.32) ============= ============= ============= ============= DILUTED NET LOSS PER SHARE $ (0.59) $ (0.11) $ (1.53) $ (0.32) ============= ============= ============= ============= COMPREHENSIVE LOSS Net loss $ (17,935) $ (3,203) $ (46,219) $ (9,590) Reclassification adjustment for interest rate swaps included in net income 231 - 231 - Changes in fair value of derivatives (net of tax) - - 118 - ------------- ------------- ------------- ------------- NET COMPREHENSIVE LOSS $ (17,704) $ (3,203) $ (45,870) $ (9,590) ============= ============= ============= ============= Three months Retail & ended June 30, Manufacturing Distribution Eliminations Total 2009 ------------- ------------- ------------- ------------- Net sales $ 70,887 $ 18,199 $ (2,880) $ 86,206 (Loss) Income from operations $ (15,440) $ (1,308) $ 84 $ (16,664) New trailers shipped 3,100 200 (100) 3,200 2008 Net sales $ 176,118 $ 40,829 $ (15,463) $ 201,484 (Loss) Income from operations $ (2,910) $ (383) $ 283 $ (3,010) New trailers shipped 7,900 800 (700) 8,000 Six months ended June 30, 2009 Net sales $ 131,525 $ 38,882 $ (6,264) $ 164,143 (Loss) Income from operations $ (39,829) $ (4,289) $ 135 $ (43,983) New trailers shipped 5,800 300 (200) 5,900 2008 Net sales $ 318,381 $ 69,214 $ (25,050) $ 362,545 (Loss) Income from operations $ (11,392) $ (1,386) $ 731 $ (12,047) New trailers shipped 14,300 1,200 (1,200) 14,300 Three Months Ended Six Months Ended June 30, June 30, -------------------- -------------------- 2009 2008 2009 2008 --------- --------- --------- --------- Basic net loss per share Net loss applicable to common stockholders $ (17,935) $ (3,203) $ (46,219) $ (9,590) Dividends paid on unvested restricted shares - (36) - (66) --------- --------- --------- --------- Net loss applicable to common stockholders excluding amounts applicable to unvested restricted shares $ (17,935) $ (3,239) $ (46,219) $ (9,656) ========= ========= ========= ========= Weighted average common shares outstanding 30,198 29,927 30,127 29,903 ========= ========= ========= ========= Basic net loss per share $ (0.59) $ (0.11) $ (1.53) $ (0.32) ========= ========= ========= ========= Diluted net loss per share Net loss applicable to common stockholders $ (17,935) $ (3,203) $ (46,219) $ (9,590) After-tax equivalent of interest on convertible notes - - - - --------- --------- --------- --------- Diluted net loss applicable to common stockholders $ (17,935) $ (3,203) $ (46,219) $ (9,590) ========= ========= ========= ========= Weighted average common shares outstanding 30,198 29,927 30,127 29,903 Dilutive stock options/shares - - - - Convertible notes equivalent shares - - - - --------- --------- --------- --------- Diluted weighted average common shares outstanding 30,198 29,927 30,127 29,903 ========= ========= ========= ========= Diluted net loss per share $ (0.59) $ (0.11) $ (1.53) $ (0.32) ========= ========= ========= ========= Average diluted shares outstanding for the three and six month periods ending June 30, 2008 exclude the antidilutive effects of the Company's Senior Convertible Notes (Convertible Notes) due August 1, 2008. For the three and six month periods ending June 30, 2008, the after-tax equivalent of interest on Convertible Notes was $0.2 million and $0.7 million, respectively, and the Convertible Notes equivalent shares were 1.6 million and 3.2 million, respectively. Diluted shares outstanding for the three and six month periods ending June 30, 2009 and 2008 exclude the antidilutive effects of potentially dilutive stock options and restricted stock totaling less than 0.1 million shares of common stock in both 2009 periods and 0.1 million shares of common stock in the 2008 periods. For the three month periods ending June 30, 2009 and 2008, the computation of diluted earnings per share excludes options to purchase 2.2 million and 1.5 million shares of common stock, respectively, because the impact of these shares would have been antidilutive. For the six month periods ending June 30, 2009 and 2008, the computation of diluted earnings per share excludes options to purchase 2.2 million and 1.7 million shares of common stock, respectively, because the impact of these shares would have been antidilutive. WABASH NATIONAL CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands) June 30, December 31, 2009 2008 ------------ -------------- (Unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 6,737 $ 29,766 Accounts receivable, net 17,994 37,925 Inventories 67,720 92,896 Prepaid expenses and other 3,670 5,307 ------------ -------------- Total current assets 96,121 165,894 PROPERTY, PLANT AND EQUIPMENT, net 115,789 122,035 INTANGIBLE ASSETS 27,509 29,089 OTHER ASSETS 13,699 14,956 ------------ -------------- $ 253,118 $ 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 33,744 42,798 Other accrued liabilities 38,613 45,449 ------------ -------------- Total current liabilities 72,694 168,592 LONG-TERM DEBT 62,331 - CAPITAL LEASE OBLIGATION 4,637 4,803 OTHER NONCURRENT LIABILITIES AND CONTINGENCIES 3,508 5,142 STOCKHOLDERS' EQUITY 109,948 153,437 ------------ -------------- $ 253,118 $ 331,974 ============ ============== WABASH NATIONAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited) Six Months Ended June 30, -------------------- 2009 2008 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (46,219) $ (9,590) Adjustments to reconcile net loss to net cash (used in) provided by operating activities Depreciation and amortization 9,600 10,381 Net (gain) loss on the sale of assets (7) 315 Gain on debt extinguishment - (151) Deferred income taxes - (4,484) Excess tax benefits from stock-based compensation - (5) Stock-based compensation 2,138 2,170 Changes in operating assets and liabilities Accounts receivable 19,931 19,743 Inventories 25,176 (20,139) Prepaid expenses and other 1,637 1,452 Accounts payable and accrued liabilities (16,373) 17,005 Other, net 135 (61) --------- --------- Net cash (used in) provided by operating activities (3,982) 16,636 CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (628) (3,746) Proceeds from the sale of property, plant and equipment 7 47 --------- --------- Net cash used in investing activities (621) (3,699) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from exercise of stock options - 81 Excess tax benefits from stock-based compensation - 5 Borrowings under revolving credit facilities 86,118 82,184 Payments under revolving credit facilities (103,795) (28,184) Payments under long-term debt obligations - (77,726) Principal payments under capital lease obligation (166) - Debt issuance costs paid (583) - Common stock dividends paid - (2,744) --------- --------- Net cash used in financing activities (18,426) (26,384) --------- --------- NET DECREASE IN CASH AND CASH EQUIVALENTS (23,029) (13,447) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 29,766 41,224 --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 6,737 $ 27,777 ========= =========