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Wabash National Corp.$14.31$.322.29%

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 Wabash National Corporation Announces Second Quarter 2019 Results
   Wednesday, July 31, 2019 6:56:00 AM ET
  • Revenue grew at 2 percent year-over-year, all-time quarterly sales record of $626M

  • Operating margin reached a two-year high of 7.6 percent

  • Strong cash generation and active capital deployment in Q2

  • Earnings Per Share of $0.56

  • Full year 2019 EPS outlook raised at midpoint by $.05 to $1.65, range narrowed to $1.58 to $1.72 per share

LAFAYETTE, Ind., July 31, 2019 (GLOBE NEWSWIRE) -- Wabash National Corporation (NYSE: WNC), a diversified industrial manufacturer and a leading producer of semi-trailers, truck bodies and liquid transportation systems, today reported results for the quarter ended June 30, 2019.

Net sales for the second quarter 2019 increased 2 percent to $626 million from $613 million in the prior year quarter, as growth was led by the Company’s Final Mile and Diversified Products Group Segments. Operating income was $47.5 million in the second quarter of 2019 and the Company achieved a consolidated operating margin of 7.6 percent during the second quarter of 2019, which represents an improvement of 10 basis points from the second quarter of 2018, highlighting the success of both short and long-term initiatives targeting margin expansion.

“I am very pleased with our operating performance during the second quarter.  We delivered revenue of $626 million which is an all-time record for Wabash National and we generated our strongest operating margins in two years, driven by the Wabash Management System," explained Brent Yeagy, president and chief executive officer. "The strength of our free cash generation allowed us the flexibility not only to pay our regular quarterly dividend and make progress on debt-reduction, but also to repurchase shares during the quarter.”

Net income for the second quarter 2019 was $31.0 million, or 56 cents per diluted share, which compares to 54 cents  in the second quarter of 2018 or 49 cents on a Non-GAAP Adjusted basis. Operating EBITDA, a non-GAAP measure that excludes the effects of certain items, for the second quarter 2019 was $61.0 million, or 9.7 percent of net sales.

Mr. Yeagy continued, “We are pleased to raise the midpoint of our full-year EPS outlook by 5 cents to $1.65 based on our strong second quarter performance.  The midpoint of our outlook for the second half of the year remains unchanged as our stable backlogs give us visibility to strong revenue.”

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 second quarter of 2019 and 2018. A complete disclosure of the results by individual segment is included in the tables following this release.

  Commercial Trailer
Products
 Diversified Products Final Mile Products
Three Months Ended June 30, 2019 2018 2019 2018 2019 2018
             
  (dollars in thousands)
New trailers shipped 14,250  15,650  750  650     
Net sales $400,864  $402,507  $97,026  $94,085  $134,817  $121,209 
Gross profit $46,906  $47,513  $20,123  $16,692  $21,289  $20,923 
Gross profit margin 11.7% 11.8% 20.7% 17.7% 15.8% 17.3%
Income (loss) from operations $39,918  $40,784  $8,911  $4,395  $9,221  $10,258 
Income (loss) from operations margin 10.0% 10.1% 9.2% 4.7% 6.8% 8.5%

Commercial Trailer Products’ net sales for the second quarter was $401 million, a decrease of $1.6 million, or 0.4 percent as compared to the prior year quarter. Gross profit margin for the second quarter decreased 10 basis points as compared to the prior year period primarily due to product and customer mix.  Operating income decreased $0.9 million, or 2.1 percent, from the second quarter last year to $39.9 million, or 10.0 percent of net sales.

Diversified Products’ net sales for the second quarter were $97 million, an increase of $2.9 million, or 3.1 percent, as compared to the prior year, due primarily to increased demand for liquid tank trailers. Gross profit and profit margin as compared to the prior year period increased $3.4 million and 300 basis points, respectively, as the segment benefited from product mix and cost recovery among other internal initiatives driven by the Wabash Management System. Operating income in the second quarter of 2019 was $8.9 million, or 9.2 percent of net sales, representing an increase of $4.5 million as compared to the prior year period.

Final Mile Products’ net sales for the second quarter totaled $135 million, an increase of $13.6 million, or 11.2 percent, as compared to the prior year, due to strong market and customer demand. Gross profit margin for the second quarter decreased 150 basis points as compared to the prior year period primarily due to product mix and higher employee-related costs. Operating income was $9.2 million, or 6.8 percent of net sales, compared to $10.3 million, or 8.5 percent of net sales in the prior year period.



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 contains non-GAAP financial measures, including operating EBITDA, adjusted operating income, adjusted net income 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, acquisition expenses and related charges, and other non-operating income and expense. Management believes providing operating EBITDA is useful for investors to understand the Company’s performance and results of operations period to period with the exclusion of the items identified above. Management believes the presentation of operating EBITDA, when combined with the GAAP presentations of operating income and net 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 operating income, a non-GAAP financial measure, excludes certain costs, expenses, other charges, gains or income that are included in the determination of operating income under U.S. GAAP, but that management would not consider important in evaluating the quality of the Company’s operating results as they are not indicative of the Company’s core operating results or may obscure trends useful in evaluating the Company’s continuing activities. Accordingly, the Company presents adjusted operating income excluding these Special Items to help investors evaluate our operating performance and trends in our business consistent with how management evaluates such performance and trends. Further, the Company presents adjusted operating income to provide investors with a better understanding of the Company’s view of our results as compared to prior periods.  A reconciliation of adjusted operating income to operating income, the most comparable GAAP financial measure, is included in the tables following this press release.

Adjusted net income and adjusted earnings per diluted share, each reflect adjustments for acquisition expenses, the losses attributable to the Company’s extinguishment of debt, income or losses recognized on the sale and/or closure of former Company locations. Management believes providing adjusted measures and excluding certain items facilitates comparisons to the Company’s prior year periods and, when combined with the 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 each of adjusted net income and adjusted earnings per diluted share to net income and net income per diluted share is included in the tables following this release.

Second Quarter 2019 Conference Call

Wabash National will discuss its results during its quarterly investor conference call on Wednesday, July 31, 2019, beginning at 10:00 a.m. EDT.  The call and an accompanying slide presentation will be accessible on the "Investors" section of the Company’s website www.wabashnational.com . The conference call will also be accessible by dialing (844) 778-4139, conference ID 7848058.  A replay of the call will be available on the site shortly after the conclusion of the presentation.

About Wabash National Corporation

Headquartered in Lafayette, Indiana, Wabash National Corporation (NYSE: WNC) is a diversified industrial manufacturer and a leading producer of semi-trailers, truck bodies and liquid transportation systems. Established in 1985, the Company manufactures a diverse range of products including: dry freight and refrigerated trailers, platform trailers, bulk tank trailers, dry and refrigerated truck bodies, truck-mounted tanks, intermodal equipment, structural composite panels and products, trailer aerodynamic solutions, and specialty food grade and pharmaceutical equipment. Its innovative products are sold under the following brand names: Wabash National®, Beall®, Benson®, Brenner® Tank, Bulk Tank International, DuraPlate®, Extract Technology®, Supreme®, Transcraft®, Walker Engineered Products, and Walker Transport. Learn more at 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, all statements regarding the Company’s outlook for trailer and truck body shipments, backlog, expectations regarding demand levels for trailers, truck bodies, non-trailer equipment and our other diversified product offerings, pricing, profitability and earnings, cash flow and liquidity, opportunity to capture higher margin sales, new product innovations, our growth and diversification strategies, our expectations for improved financial performance during the course of the year and our expectations with regards to capital allocation. 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 continued integration of Supreme into the Company’s business, adverse reactions to the transaction by customers, suppliers or strategic partners, uncertain economic conditions including the possibility that customer demand may not meet our expectations, increased competition, reliance on certain customers and corporate partnerships, risks of customer pick-up delays, shortages and costs of raw materials including the impact of tariffs or other international trade developments, risks in implementing and sustaining improvements in the Company’s manufacturing operations and cost containment, dependence on industry trends and timing, supplier constraints, labor costs and availability, customer acceptance of and reactions to pricing changes and costs of indebtedness. 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 BALANCE SHEETS
(Unaudited - dollars in thousands)

 June 30,
2019
 December 31,
2018
Assets   
Current assets:   
Cash and cash equivalents$140,155  $132,690 
Accounts receivable, net170,177  181,064 
Inventories264,567  184,404 
Prepaid expenses and other40,550  51,261 
Total current assets615,449  549,419 
Property, plant, and equipment, net208,718  206,991 
Goodwill311,085  311,084 
Intangible assets200,089  210,328 
Other assets39,488  26,571 
Total assets$1,374,829  $1,304,393 
Liabilities and Stockholders' Equity   
Current liabilities:   
Current portion of long-term debt$  $1,880 
Current portion of finance lease obligations317  299 
Accounts payable200,641  153,113 
Other accrued liabilities120,356  116,384 
Total current liabilities321,314  271,676 
Long-term debt489,865  503,018 
Finance lease obligations544  714 
Deferred income taxes32,691  34,905 
Other non-current liabilities28,850  20,231 
Total liabilities873,264  830,544 
Commitments and contingencies   
Stockholders' equity:   
Common stock 200,000,000 shares authorized, $0.01 par value, 54,675,691 and 55,135,788 shares outstanding, respectively749  744 
Additional paid-in capital634,465  629,039 
Retained earnings186,934  150,244 
Accumulated other comprehensive loss(3,896) (3,343)
Treasury stock at cost, 20,331,511 and 19,372,735 common shares, respectively(316,687) (302,835)
Total stockholders' equity501,565  473,849 
Total liabilities and stockholders' equity$1,374,829  $1,304,393 



WABASH NATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited - dollars in thousands, except per share amounts)

 Three Months Ended June 30, Six Months Ended June 30,
 2019 2018 2019 2018
Net sales$626,053  $612,690  $1,159,227  $1,104,009 
Cost of sales538,403  527,375  1,002,887  954,576 
Gross profit87,650  85,315  156,340  149,433 
General and administrative expenses26,509  25,778  56,649  50,887 
Selling expenses8,494  8,556  16,717  16,901 
Amortization of intangible assets5,109  4,940  10,238  9,881 
Acquisition expenses      68 
Income from operations47,538  46,041  72,736  71,696 
Other income (expense):       
Interest expense(7,020) (7,151) (14,110) (14,605)
Other, net1,081  4,037  912  11,953 
Other expense, net(5,939) (3,114) (13,198) (2,652)
Income before income tax41,599  42,927  59,538  69,044 
Income tax expense10,639  11,025  13,798  15,870 
Net income$30,960  $31,902  $45,740  $53,174 
Net income per share:       
Basic$0.56  $0.55  $0.83  $0.92 
Diluted$0.56  $0.54  $0.82  $0.89 
Weighted average common shares outstanding (in thousands):       
Basic55,197  57,879  55,233  57,836 
Diluted55,668  59,274  55,719  60,023 
        
Dividends declared per share$0.080  $0.075  $0.160  $0.150 



WABASH NATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - dollars in thousands)

 Six Months Ended June 30,
 2019 2018
Cash flows from operating activities:   
Net income$45,740  $53,174 
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation10,957  10,330 
Amortization of intangibles10,238  9,881 
Net loss (gain) on sale of property, plant and equipment481  (9,743)
Loss on debt extinguishment53  174 
Deferred income taxes(2,214) (81)
Stock-based compensation5,377  5,390 
Non-cash interest expense523  1,110 
Changes in operating assets and liabilities   
Accounts receivable10,886  (46,564)
Inventories(80,163) (56,057)
Prepaid expenses and other(325) 1,756 
Accounts payable and accrued liabilities58,210  72,792 
Other, net1,210  (1,691)
Net cash provided by operating activities60,973  40,471 
Cash flows from investing activities:   
Capital expenditures(14,995) (11,117)
Proceeds from sale of property, plant and equipment38  16,426 
Other, net  3,060 
Net cash (used in) provided by investing activities(14,957) 8,369 
Cash flows from financing activities:   
Proceeds from exercise of stock options55  910 
Dividends paid(9,061) (9,271)
Borrowings under revolving credit facilities288  423 
Payments under revolving credit facilities(288) (423)
Principal payments under finance lease obligations(152) (143)
Principal payments under term loan credit facility(15,470) (940)
Principal payments under industrial revenue bond  (92)
Debt issuance costs paid(71)  
Convertible senior notes repurchase  (80,200)
Stock repurchase(13,852) (21,413)
Net cash used in financing activities(38,551) (111,149)
Cash, cash equivalents, and restricted cash:   
Net increase (decrease) for the period7,465  (62,309)
At beginning of period132,690  191,521 
At end of period$140,155  $129,212 
Supplemental disclosures of cash flow information:   
Cash paid for interest$13,661  $14,071 
Cash paid for income taxes$10,567  $12,700 



WABASH NATIONAL CORPORATION
SEGMENTS AND RELATED INFORMATION
(Unaudited - dollars in thousands)

Three Months Ended June 30, Commercial
Trailer Products
 Diversified
Products
 Final Mile
Products
 Corporate and
Eliminations
 Consolidated
2019          
New trailers shipped 14,250  750      15,000 
Used trailers shipped   25      25 
           
New Trailers $385,842  $49,325  $  $  $435,167 
Used Trailers 13  739      752 
Components, parts and service 10,622  29,007  4,447  (6,575) 37,501 
Equipment and other 4,387  17,955  130,370  (79) 152,633 
Total net external sales $400,864  $97,026  $134,817  $(6,654) $626,053 
Gross profit $46,906  $20,123  $21,289  $(668) $87,650 
Income (Loss) from operations $39,918  $8,911  $9,221  $(10,512) $47,538 
           
2018          
New trailers shipped  15,650  650      16,300 
Used trailers shipped 250  50      300 
           
New Trailers $385,131  $37,602  $  $  $422,733 
Used Trailers 2,499  628      3,127 
Components, parts and service 9,042  31,926  2,623  (5,091) 38,500 
Equipment and other 5,835  23,929  118,586  (20) 148,330 
Total net external sales $402,507  $94,085  $121,209  $(5,111) $612,690 
Gross profit $47,513  $16,692  $20,923  $187  $85,315 
Income (Loss) from operations $40,784  $4,395  $10,258  $(9,396) $46,041 


Six Months Ended June 30, Commercial
Trailer Products
 Diversified
Products
 Final Mile
Products
 Corporate and
Eliminations
 Consolidated
2019          
New trailers shipped 26,650  1,450      28,100 
Used trailers shipped 50  50      100 
           
New Trailers $711,661  $95,124  $  $  $806,785 
Used Trailers 150  1,326      1,476 
Components, parts and service 20,955  64,891  7,863  (14,495) 79,214 
Equipment and other 9,143  35,333  227,803  (527) 271,752 
Total net external sales $741,909  $196,674  $235,666  $(15,022) $1,159,227 
Gross profit $82,846  $40,222  $34,813  $(1,541) $156,340 
Income (Loss) from operations $66,239  $16,955  $11,090  $(21,548) $72,736 
           
2018          
New trailers shipped 28,300  1,200      29,500 
Used trailers shipped 750  50      800 
           
New Trailers $695,449  $71,441  $  $  $766,890 
Used Trailers 6,906  1,714      8,620 
Components, parts and service 17,690  65,894  5,036  (11,853) 76,767 
Equipment and other 9,884  50,239  191,632  (23) 251,732 
Total net external sales $729,929  $189,288  $196,668  $(11,876) $1,104,009 
Gross profit $84,036  $33,990  $32,455  $(1,048) $149,433 
Income (Loss) from operations $70,265  $9,423  $10,867  $(18,859) $71,696 



WABASH NATIONAL CORPORATION
SEGMENT AND COMPANY FINANCIAL INFORMATION
(Unaudited - dollars in thousands)

 Three Months Ended
June 30,
 Six Months Ended
June 30,
 2019 2018 2019 2018
Commercial Trailer Products       
Income from operations$39,918  $40,784  $66,239  $70,265 
        
Diversified Products       
Income from operations8,911  4,395  16,955  9,423 
        
Final Mile Products       
Income from operations9,221  10,258  11,090  10,867 
Adjustments:       
Acquisition expenses and related charges  (164)   751 
Adjusted operating income9,221  10,094  11,090  11,618 
        
Corporate       
Income from operations(10,512) (9,396) (21,548) (18,859)
Adjustments:       
Acquisition expenses and related charges      68 
Adjusted operating income(10,512) (9,396) (21,548) (18,791)
        
Consolidated       
Income from operations47,538  46,041  72,736  71,696 
Adjustments:       
Acquisition expenses and related charges  (164)   819 
Adjusted operating income$47,538  $45,877  $72,736  $72,515 



WABASH NATIONAL CORPORATION
RECONCILIATION OF GAAP FINANCIAL MEASURES TO
NON-GAAP FINANCIAL MEASURES
(Unaudited - dollars in thousands, except per share amounts)

Operating EBITDA1:Three Months Ended June 30, Six Months Ended June 30,
 2019 2018 2019 2018
Net income$30,960  $31,902  $45,740  $53,174 
Income tax expense10,639  11,025  13,798  15,870 
Interest expense7,020  7,151  14,110  14,605 
Depreciation and amortization10,646  10,107  21,195  20,211 
Stock-based compensation2,791  2,733  5,377  5,390 
Acquisition expenses      68 
Other non-operating income(1,081) (4,037) (912) (11,953)
Operating EBITDA$60,975  $58,881  $99,308  $97,365 


Adjusted Net Income2:Three Months Ended June 30, Six Months Ended June 30,
 2019 2018 2019 2018
Net income$30,960  $31,902  $45,740  $53,174 
Adjustments:       
Facility transactions3  (3,506)   (10,629)
Loss on debt extinguishment      174 
Acquisition expenses and related charges  (164)   819 
Tax effect of aforementioned items  954    2,505 
Adjusted net income$30,960  $29,186  $45,740  $46,043 


Adjusted Diluted Earnings Per Share2:Three Months Ended June 30, Six Months Ended June 30,
 2019 2018 2019 2018
Diluted earnings per share$0.56  $0.54  $0.82  $0.89 
Adjustments:       
Facility transactions3  (0.06)   (0.18)
Acquisition expenses and related charges      0.01 
Tax effect of aforementioned items  0.02    0.04 
Adjusted diluted earnings per share$0.56  $0.49  $0.82  $0.77 
        
Weighted average number of diluted shares outstanding (in thousands)55,668  59,274  55,719  60,023 

1Operating EBITDA is defined as earnings before interest, taxes, depreciation, amortization, stock-based compensation, acquisition expenses and related charges, and other non-operating income and expense.

2Adjusted net income and adjusted earnings per diluted share reflect adjustments for acquisition expenses, the losses attributable to the Company’s extinguishment of debt, income or losses recognized on the sale and/or closure of former Company locations.

3Facility transactions in 2018 and 2019 relate to gains and/or losses incurred for the sale or closure of former Company locations.

Media Contact:
Dana Stelsel
Director, Corporate Communications
(765) 771-5766
dana.stelsel@wabashnational.com

Investor Relations:
Ryan Reed
Director, Investor Relations
(765) 771-5805
ryan.reed@wabashnational.com

Wabash National Corporation Logo

Source: Wabash National Corporation


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