House & Home
House and Home
House and Home 
Fri, November 6, 2009
Thu, November 5, 2009
Wed, November 4, 2009
Wabash National Corporation Announces Third Quarter Results
LAFAYETTE, IN--(Marketwire - November 4, 2009) - Wabash National Corporation (
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 (
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) =========== ========== ========== ==========