DELAWARE | 001-10883 | 52-1375208 |
(State or other jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
1000 Sagamore Parkway South, Lafayette, Indiana | 47905 | 765-771-5310 |
(Address of principal executive offices) | (Zip Code) | (Registrant’s telephone number including area code) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit No. | Description | |
WABASH NATIONAL CORPORATION | ||
Date: January 29, 2019 | By: | /s/ Jeffery L. Taylor |
Jeffery L. Taylor | ||
Senior Vice President and Chief Financial Officer |
• | Strong demand drives 12 percent year-over-year increase in Q4 2018 revenue |
• | Full year revenue of $2.3 billion is highest in company history |
• | Q4 2018 backlog increased 47 percent year-over-year to $1.8 billion |
• | Q4 2018 gross margin declined 210 basis points year-over-year as a result of operational headwinds |
• | GAAP earnings per share of $0.21 in Q4 2018, $0.38 adjusted Non-GAAP earnings per share |
• | 2019 EPS outlook revised to $1.50 to $1.70 per diluted share |
Commercial Trailer Products | Diversified Products | Final Mile Products | ||||||||||||||||||||||
Three Months Ended December 31, | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
New trailers shipped | 16,750 | 15,500 | 750 | 650 | — | — | ||||||||||||||||||
Net sales | $ | 438,667 | $ | 385,961 | $ | 102,322 | $ | 91,771 | $ | 74,532 | $ | 70,461 | ||||||||||||
Gross profit | $ | 45,170 | $ | 47,055 | $ | 17,420 | $ | 18,040 | $ | 7,362 | $ | 8,150 | ||||||||||||
Gross profit margin | 10.3 | % | 12.2 | % | 17.0 | % | 19.7 | % | 9.9 | % | 11.6 | % | ||||||||||||
Income (loss) from operations | $ | 39,075 | $ | 40,134 | $ | (6,111 | ) | $ | 5,532 | $ | (1,463 | ) | $ | (2,098 | ) | |||||||||
Income (loss) from operations margin | 8.9 | % | 10.4 | % | (6.0 | )% | 6.0 | % | (2.0 | )% | (3.0 | )% |
December 31, 2018 | December 31, 2017 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 132,690 | $ | 191,521 | |||
Accounts receivable, net | 181,064 | 146,836 | |||||
Inventories | 184,404 | 180,735 | |||||
Prepaid expenses and other | 51,261 | 57,299 | |||||
Total current assets | 549,419 | 576,391 | |||||
Property, plant, and equipment, net | 206,991 | 195,363 | |||||
Deferred income taxes | — | — | |||||
Goodwill | 311,084 | 317,464 | |||||
Intangible assets | 210,328 | 237,030 | |||||
Other assets | 26,571 | 25,265 | |||||
Total assets | $ | 1,304,393 | $ | 1,351,513 | |||
Liabilities and Stockholders' Equity | |||||||
Current liabilities: | |||||||
Current portion of long-term debt | $ | 1,880 | $ | 46,020 | |||
Current portion of capital lease obligations | 299 | 290 | |||||
Accounts payable | 153,113 | 108,448 | |||||
Other accrued liabilities | 116,384 | 128,910 | |||||
Total current liabilities | 271,676 | 283,668 | |||||
Long-term debt | 503,018 | 504,091 | |||||
Capital lease obligations | 714 | 1,012 | |||||
Deferred income taxes | 34,905 | 36,955 | |||||
Other non-current liabilities | 20,231 | 19,724 | |||||
Total liabilities | 830,544 | 845,450 | |||||
Commitments and contingencies | |||||||
Stockholders' equity: | |||||||
Common stock, $0.01 par value: 200,000,000 shares authorized; 55,135,788 and 57,564,493 shares outstanding, respectively | 744 | 737 | |||||
Additional paid-in capital | 629,039 | 653,435 | |||||
Retained earnings | 150,244 | 98,728 | |||||
Accumulated other comprehensive loss | (3,343 | ) | (2,385 | ) | |||
Treasury stock, at cost: 19,372,735 and 16,207,740 common shares, respectively | (302,835 | ) | (244,452 | ) | |||
Total stockholders' equity | 473,849 | 506,063 | |||||
Total liabilities and stockholders' equity | $ | 1,304,393 | $ | 1,351,513 |
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net sales | $ | 610,196 | $ | 543,444 | $ | 2,267,278 | $ | 1,767,161 | |||||||
Cost of sales | 541,140 | 470,568 | 1,983,627 | 1,506,286 | |||||||||||
Gross profit | 69,056 | 72,876 | 283,651 | 260,875 | |||||||||||
General and administrative expenses | 21,194 | 24,314 | 95,114 | 77,825 | |||||||||||
Selling expenses | 7,455 | 8,020 | 33,046 | 25,588 | |||||||||||
Amortization of intangible assets | 4,650 | 4,348 | 19,468 | 17,041 | |||||||||||
Acquisition expenses | — | 901 | 68 | 9,605 | |||||||||||
Impairment | 12,979 | — | 24,968 | — | |||||||||||
Income from operations | 22,778 | 35,293 | 110,987 | 130,816 | |||||||||||
Other income (expense): | |||||||||||||||
Interest expense | (7,110 | ) | (7,335 | ) | (28,759 | ) | (16,400 | ) | |||||||
Other, net | 1,290 | 194 | 13,776 | 8,122 | |||||||||||
Other expense, net | (5,820 | ) | (7,141 | ) | (14,983 | ) | (8,278 | ) | |||||||
Income before income tax | 16,958 | 28,152 | 96,004 | 122,538 | |||||||||||
Income tax expense | 5,374 | (21,204 | ) | 26,583 | 11,116 | ||||||||||
Net income | $ | 11,584 | $ | 49,356 | $ | 69,421 | $ | 111,422 | |||||||
Net income per share: | |||||||||||||||
Basic | $ | 0.21 | $ | 0.84 | $ | 1.22 | $ | 1.88 | |||||||
Diluted | $ | 0.21 | $ | 0.80 | $ | 1.19 | $ | 1.78 | |||||||
Weighted average common shares outstanding (in thousands): | |||||||||||||||
Basic | 55,543 | 58,416 | 56,996 | 59,358 | |||||||||||
Diluted | 56,290 | 61,567 | 58,430 | 62,599 | |||||||||||
Dividends declared per share | $ | 0.080 | $ | 0.075 | $ | 0.305 | $ | 0.255 |
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 69,421 | $ | 111,422 | $ | 119,433 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation | 21,215 | 18,012 | 16,830 | ||||||||
Amortization of intangibles | 19,468 | 17,041 | 19,940 | ||||||||
Net (gain) loss on sale of property, plant and equipment | (10,148 | ) | (8,046 | ) | 101 | ||||||
Loss on debt extinguishment | 280 | 799 | 1,895 | ||||||||
Deferred income taxes | (1,984 | ) | (14,682 | ) | 4,044 | ||||||
Stock-based compensation | 10,169 | 10,429 | 12,038 | ||||||||
Non-cash interest expense | 1,745 | 2,258 | 3,475 | ||||||||
Impairment | 24,968 | — | 1,663 | ||||||||
Changes in operating assets and liabilities | |||||||||||
Accounts receivable | (39,539 | ) | 31,943 | (809 | ) | ||||||
Inventories | (18,713 | ) | (13,158 | ) | 24,969 | ||||||
Prepaid expenses and other | 4,548 | (2,014 | ) | (10,147 | ) | ||||||
Accounts payable and accrued liabilities | 32,653 | (963 | ) | (13,002 | ) | ||||||
Other, net | (1,612 | ) | (8,662 | ) | (1,680 | ) | |||||
Net cash provided by operating activities | 112,471 | 144,379 | 178,750 | ||||||||
Cash flows from investing activities: | |||||||||||
Capital expenditures | (34,009 | ) | (26,056 | ) | (20,342 | ) | |||||
Proceeds from sale of property, plant and equipment | 17,776 | 10,860 | 19 | ||||||||
Acquisitions, net of cash acquired | — | (323,487 | ) | — | |||||||
Other, net | 3,060 | 6,443 | 3,014 | ||||||||
Net cash used in investing activities | (13,173 | ) | (332,240 | ) | (17,309 | ) | |||||
Cash flows from financing activities: | |||||||||||
Proceeds from exercise of stock options | 961 | 5,790 | 4,831 | ||||||||
Borrowings under senior notes | — | 325,000 | — | ||||||||
Dividends paid | (17,768 | ) | (15,315 | ) | — | ||||||
Borrowings under revolving credit facilities | 937 | 713 | 618 | ||||||||
Payments under revolving credit facilities | (937 | ) | (713 | ) | (618 | ) | |||||
Principal payments under capital lease obligations | (290 | ) | (600 | ) | (779 | ) | |||||
Proceeds from issuance of term loan credit facility | — | 377,519 | — | ||||||||
Principal payments under term loan credit facility | (1,880 | ) | (386,577 | ) | (1,928 | ) | |||||
Principal payments under industrial revenue bond | (93 | ) | (583 | ) | (473 | ) | |||||
Debt issuance costs paid | (476 | ) | (6,783 | ) | — | ||||||
Convertible senior notes repurchase | (80,200 | ) | (8,045 | ) | (98,922 | ) | |||||
Stock repurchase | (58,383 | ) | (74,491 | ) | (79,556 | ) | |||||
Net cash (used in) provided by financing activities | (158,129 | ) | 215,915 | (176,827 | ) | ||||||
Cash, cash equivalents, and restricted cash: | |||||||||||
Net (decrease) increase for the period | (58,831 | ) | 28,054 | (15,386 | ) | ||||||
At beginning of period | 191,521 | 163,467 | 178,853 | ||||||||
At end of period | $ | 132,690 | $ | 191,521 | $ | 163,467 | |||||
Supplemental disclosures of cash flow information: | |||||||||||
Cash paid for interest | $ | 16,975 | $ | 8,394 | $ | 12,656 | |||||
Cash paid for income taxes | $ | 24,243 | $ | 41,391 | $ | 68,870 |
Three Months Ended December 31, | Commercial Trailer Products | Diversified Products | Final Mile Products | Corporate and Eliminations | Consolidated | |||||||||||||||
2018 | ||||||||||||||||||||
New trailers shipped | 16,750 | 750 | — | — | 17,500 | |||||||||||||||
Used trailers shipped | 100 | 50 | — | — | 150 | |||||||||||||||
New Trailers | $ | 424,131 | $ | 48,950 | $ | — | $ | — | $ | 473,081 | ||||||||||
Used Trailers | 824 | 1,025 | — | — | 1,849 | |||||||||||||||
Components, parts and service | 9,214 | 27,141 | 2,628 | (5,282 | ) | 33,701 | ||||||||||||||
Equipment and other | 4,498 | 25,206 | 71,904 | (43 | ) | 101,565 | ||||||||||||||
Total net external sales | $ | 438,667 | $ | 102,322 | $ | 74,532 | $ | (5,325 | ) | $ | 610,196 | |||||||||
Gross profit | $ | 45,170 | $ | 17,420 | $ | 7,362 | $ | (896 | ) | $ | 69,056 | |||||||||
Income (Loss) from operations | $ | 39,075 | $ | (6,111 | ) | $ | (1,463 | ) | $ | (8,723 | ) | $ | 22,778 | |||||||
2017 | ||||||||||||||||||||
New trailers shipped | 15,500 | 650 | — | — | 16,150 | |||||||||||||||
Used trailers shipped | 550 | 50 | — | — | 600 | |||||||||||||||
New Trailers | $ | 367,526 | $ | 40,895 | $ | — | $ | — | $ | 408,421 | ||||||||||
Used Trailers | 5,352 | 821 | — | — | 6,173 | |||||||||||||||
Components, parts and service | 9,908 | 23,931 | 1,877 | (4,749 | ) | 30,967 | ||||||||||||||
Equipment and other | 3,175 | 26,124 | 68,584 | — | 97,883 | |||||||||||||||
Total net external sales | $ | 385,961 | $ | 91,771 | $ | 70,461 | $ | (4,749 | ) | $ | 543,444 | |||||||||
Gross profit | $ | 47,055 | $ | 18,040 | $ | 8,150 | $ | (369 | ) | $ | 72,876 | |||||||||
Income (Loss) from operations | $ | 40,134 | $ | 5,532 | $ | (2,098 | ) | $ | (8,275 | ) | $ | 35,293 |
Twelve Months Ended December 31, | Commercial Trailer Products | Diversified Products | Final Mile Products | Corporate and Eliminations | Consolidated | |||||||||||||||
2018 | ||||||||||||||||||||
New trailers shipped | 59,500 | 2,650 | — | — | 62,150 | |||||||||||||||
Used trailers shipped | 950 | 150 | — | — | 1,100 | |||||||||||||||
New Trailers | $ | 1,473,583 | $ | 164,790 | $ | — | $ | — | $ | 1,638,373 | ||||||||||
Used Trailers | 9,618 | 3,514 | — | — | 13,132 | |||||||||||||||
Components, parts and service | 34,994 | 122,099 | 9,968 | (21,811 | ) | 145,250 | ||||||||||||||
Equipment and other | 18,743 | 103,568 | 348,281 | (69 | ) | 470,523 | ||||||||||||||
Total net external sales | $ | 1,536,938 | $ | 393,971 | $ | 358,249 | $ | (21,880 | ) | $ | 2,267,278 | |||||||||
Gross profit | $ | 168,343 | $ | 68,428 | $ | 48,771 | $ | (1,891 | ) | $ | 283,651 | |||||||||
Income (Loss) from operations | $ | 141,793 | $ | (3,033 | ) | $ | 7,909 | $ | (35,682 | ) | $ | 110,987 | ||||||||
2017 | ||||||||||||||||||||
New trailers shipped | 52,800 | 2,250 | — | — | 55,050 | |||||||||||||||
Used trailers shipped | 1,050 | 100 | — | — | 1,150 | |||||||||||||||
New Trailers | $ | 1,273,584 | $ | 140,105 | $ | — | $ | — | $ | 1,413,689 | ||||||||||
Used Trailers | 10,720 | 3,278 | — | — | 13,998 | |||||||||||||||
Components, parts and service | 48,008 | 117,681 | 1,877 | (13,040 | ) | 154,526 | ||||||||||||||
Equipment and other | 16,070 | 100,294 | 68,584 | — | 184,948 | |||||||||||||||
Total net external sales | $ | 1,348,382 | $ | 361,358 | $ | 70,461 | $ | (13,040 | ) | $ | 1,767,161 | |||||||||
Gross profit | $ | 183,912 | $ | 70,159 | $ | 8,150 | $ | (1,346 | ) | $ | 260,875 | |||||||||
Income (Loss) from operations | $ | 151,999 | $ | 20,376 | $ | (2,098 | ) | $ | (39,461 | ) | $ | 130,816 |
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Commercial Trailer Products | |||||||||||||||
Income from operations | $ | 39,075 | $ | 40,134 | $ | 141,793 | $ | 151,999 | |||||||
Diversified Products | |||||||||||||||
Income from operations | (6,111 | ) | 5,532 | (3,033 | ) | 20,376 | |||||||||
Adjustments: | |||||||||||||||
Impairment | 12,979 | — | 24,968 | — | |||||||||||
Adjusted operating income | 6,868 | 5,532 | 21,935 | 20,376 | |||||||||||
Final Mile Products | |||||||||||||||
Income from operations | (1,463 | ) | (2,098 | ) | 7,909 | (2,098 | ) | ||||||||
Adjustments: | |||||||||||||||
Acquisition expenses and related charges | — | 5,407 | 751 | 5,407 | |||||||||||
Adjusted operating income | (1,463 | ) | 3,309 | 8,660 | 3,309 | ||||||||||
Corporate | |||||||||||||||
Income from operations | (8,723 | ) | (8,275 | ) | (35,682 | ) | (39,461 | ) | |||||||
Adjustments: | |||||||||||||||
Acquisition expenses and related charges | — | 901 | 68 | 9,605 | |||||||||||
Executive severance | 180 | — | 180 | 238 | |||||||||||
Facility transactions | 413 | — | 413 | — | |||||||||||
Adjusted operating income | (8,130 | ) | (7,374 | ) | (35,021 | ) | (29,618 | ) | |||||||
Consolidated | |||||||||||||||
Income from operations | 22,778 | 35,293 | 110,987 | 130,816 | |||||||||||
Adjustments: | |||||||||||||||
Impairment | 12,979 | — | 24,968 | — | |||||||||||
Acquisition expenses and related charges | — | 6,308 | 819 | 15,012 | |||||||||||
Executive severance | 180 | — | 180 | 238 | |||||||||||
Facility transactions | 413 | — | 413 | — | |||||||||||
Adjusted operating income | $ | 36,350 | $ | 41,601 | $ | 137,367 | $ | 146,066 |
Operating EBITDA1: | Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income | $ | 11,584 | $ | 49,356 | $ | 69,421 | $ | 111,422 | |||||||
Income tax expense | 5,374 | (21,204 | ) | 26,583 | 11,116 | ||||||||||
Interest expense | 7,110 | 7,335 | 28,759 | 16,400 | |||||||||||
Depreciation and amortization | 10,163 | 9,651 | 40,682 | 35,053 | |||||||||||
Stock-based compensation | 1,690 | 2,117 | 10,169 | 10,429 | |||||||||||
Acquisition expenses | — | 4,002 | 68 | 12,706 | |||||||||||
Impairment | 12,979 | — | 24,968 | — | |||||||||||
Other non-operating income | (1,289 | ) | (194 | ) | (13,775 | ) | (8,122 | ) | |||||||
Operating EBITDA | $ | 47,611 | $ | 51,063 | $ | 186,875 | $ | 189,004 |
Adjusted Net Income2: | Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income | $ | 11,584 | $ | 49,356 | $ | 69,421 | $ | 111,422 | |||||||
Adjustments: | |||||||||||||||
Facility transactions3 | 194 | 274 | (10,585 | ) | (6,546 | ) | |||||||||
Loss on debt extinguishment | 106 | 32 | 280 | 800 | |||||||||||
Impairment | 12,979 | — | 24,968 | — | |||||||||||
Acquisition expenses and related charges | — | 6,308 | 819 | 15,012 | |||||||||||
Executive severance expense | 180 | — | 180 | 238 | |||||||||||
Tax effect of aforementioned items | (3,499 | ) | (2,381 | ) | (4,072 | ) | (3,421 | ) | |||||||
Tax reform and other discrete tax adjustments | — | (31,339 | ) | 3,084 | (31,339 | ) | |||||||||
Adjusted net income | $ | 21,544 | $ | 22,250 | $ | 84,095 | $ | 86,166 |
Adjusted Diluted Earnings Per Share2: | Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Diluted earnings per share | $ | 0.21 | $ | 0.80 | $ | 1.19 | $ | 1.78 | |||||||
Adjustments: | |||||||||||||||
Facility transactions3 | — | 0.01 | (0.18 | ) | (0.10 | ) | |||||||||
Loss on debt extinguishment | — | — | 0.01 | 0.01 | |||||||||||
Impairment | 0.23 | — | 0.43 | ||||||||||||
Acquisition expenses and related charges | — | 0.10 | 0.01 | 0.24 | |||||||||||
Executive severance expense | — | — | — | — | |||||||||||
Tax effect of aforementioned items | (0.06 | ) | (0.04 | ) | (0.07 | ) | (0.05 | ) | |||||||
Tax reform and other discrete tax adjustments | — | (0.51 | ) | 0.05 | (0.50 | ) | |||||||||
Adjusted diluted earnings per share | $ | 0.38 | $ | 0.36 | $ | 1.44 | $ | 1.38 | |||||||
Weighted Average # of Diluted Shares O/S | 56,290 | 61,567 | 58,430 | 62,599 |
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