EX-99.1 2 v464833_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

 

Media Contact: Wabash_National_NoLinewtag 
Dana Stelsel
Corporate Communications Manager
(765) 771-5766
dana.stelsel@wabashnational.com
 
Investor Relations:
Mike Pettit
Vice President, Finance & Investor Relations
(765) 771-5581
michael.pettit@wabashnational.com

 

 

Wabash National Corporation Announces First Quarter 2017 Results; 

Increases Outlook on Full Year 2017 

 

·First quarter GAAP and non-GAAP earnings of $0.32 per diluted share and $0.31 per diluted share, respectively
·Net sales of $363 million for first quarter 2017
·Operating income of $30.3 million, second best first quarter performance in Company history
·Company increases 2017 shipment guidance to 52,000 to 56,000 trailers and full-year earnings per diluted share guidance to $1.44 to $1.56

 

LAFAYETTE, Ind. – April 24, 2017 – Wabash National Corporation (NYSE: WNC), a diversified industrial manufacturer and North America’s leading producer of semi-trailers and liquid transportation systems, today reported results for the quarter ending March 31, 2017.

 

Net income for the first quarter of 2017 was $20.2 million, or $0.32 per diluted share, compared to first quarter 2016 net income of $27.5 million, or $0.42 per diluted share. First quarter 2017 non-GAAP adjusted earnings decreased $8.3 million over the prior year period to $19.5 million, or $0.31 per diluted share. Non-GAAP adjusted earnings for the first quarter of 2017 includes the net gain on closure of former facilities offset by charges related to the early extinguishment of debt in connection with the Company’s amendment to its term loan credit facility. Non-GAAP adjusted earnings for the first quarter of 2016 included an early extinguishment of debt charge related to the Company’s repurchase of a portion of its outstanding convertible senior notes.

 

Net sales for the first quarter decreased 19 percent to $363 million while operating income decreased 37 percent, or to $30.3 million, due to lower trailer demand, compared to operating income of $48.2 million for the first quarter of 2016. Operating EBITDA, a non-GAAP measure that excludes the effects of certain recurring and non-recurring items, for the first quarter of 2017 was $41.9 million, a decrease of $17.9 million, or 30 percent, compared to operating EBITDA for the prior year period. On a trailing twelve month basis, net sales totaled $1.8 billion, generating Operating EBITDA of $235.1 million, or 13.4 percent of net sales, a year-over-year improvement of 110 basis points. The solid operating performance is attributable to the successful execution of the Company’s growth and diversification strategies, strong pricing environment within its Commercial Trailer Products segment and operational improvements across the Company’s manufacturing facilities.

 

 

 

 

The following is a summary of select operating and financial results for the past five quarters:

 

  Three Months Ended 
(Dollars in thousands, except per share   March 31,   June 30,   September 30,   December 31,   March 31, 
amounts)  2016   2016   2016   2016   2017 
Net Sales  $447,676   $471,438   $464,272   $462,057   $362,716 
                          
Gross Profit Margin   17.8%   19.3%   18.0%   15.5%   16.4%
                          
Income from Operations  $48,185   $58,872   $54,855   $40,621   $30,264 
                          
Income from Operations Margin   10.8%   12.5%   11.8%   8.8%   8.3%
                          
Net Income  $27,524   $35,531   $33,378   $23,000   $20,173 
                          
Diluted EPS  $0.42   $0.53   $0.51   $0.36   $0.32 
                          
Non-GAAP Measures(1):                         
                          
Operating EBITDA  $59,820   $72,752   $66,821   $53,606   $41,930 
                          
Operating EBITDA Margin   13.4%   15.4%   14.4%   11.6%   11.6%
                          
Adjusted Earnings  $27,831   $36,610   $32,901   $24,213   $19,517 
                          
Adjusted Diluted EPS  $0.42   $0.55   $0.50   $0.38   $0.31 

 

Notes:

(1)See “Non-GAAP Measures” below for explanation of the non-GAAP results included above.

 

Dick Giromini, chief executive officer, stated, “We are pleased with first quarter operating results, with Operating Income of $30.3 million representing the second strongest first quarter in our Company’s history. Performance targets in cost management and execution were achieved within both Commercial Trailer Products and Diversified Products, as gross margins delivered were consistent with expectations previously communicated, despite trailer shipments slightly below prior guidance due strictly to timing of customer pick-up. Backlog grew once again, coming in at a seasonally and historically strong $863 million, continuing to support our long-standing belief that trailer fleet age, regulatory compliance requirements, and customer profitability provide strong support for a continued favorable demand environment.”

 

“Additionally, we remain focused on driving further productivity improvements throughout the business, optimizing the cost structure and performance of our Diversified Products segment, and developing growth opportunities through new product and market expansion efforts. Based on all these factors, we are updating and increasing our full-year guidance for both trailer shipments and earnings to 52,000 to 56,000 new trailers and $1.44 to $1.56 earnings per diluted share, respectively.”

 

 

 

 

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 first quarter of 2017 and 2016. A complete disclosure of the results by individual segment is included in the tables following this release.

 

(dollars in thousands)  Commercial Trailer Products   Diversified Products 
                 
   2017   2016   2017   2016 
New trailers shipped   10,400   14,000    500    500 
Net sales  $274,789   $364,040   $89,910   $86,289 
Gross profit  $42,127   $60,395   $17,593   $20,210 
Gross profit margin   15.3%   16.6%   19.6%   23.4%
Income from operations  $33,392   $50,257   $4,604   $6,990 
Income from operations margin   12.2%   13.8%   5.1%   8.1%

 

Commercial Trailer Products’ net sales for the first quarter were $275 million, a decrease of $89 million, or 25 percent, as compared to the prior year. Gross profit margin for the first quarter decreased 130 basis points as compared to the prior year period. The year-over-year declines in net sales and gross profit margin were primarily due to lower new trailer shipments. Operating income decreased $16.9 million, or 34 percent, from the first quarter last year to $33.4 million, or 12.2 percent of net sales.

 

Diversified Products’ net sales for the first quarter increased $4 million, or 4 percent, due primarily to higher demand for the Company’s composite product offerings as tank trailer shipments were comparable to the prior year period. Gross profit and gross profit margin as compared to the prior year period decreased $2.6 million and 380 basis points, respectively, as the historically weak industry demand for tank trailers driven by continued softness within the chemical and energy end markets negatively impacted this segment. Operating income for the first quarter of 2017 was $4.6 million, or 5.1 percent of net sales, a decrease of $2.4 million compared to the same period last year.

 

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, operating EBITDA margin, adjusted earnings 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, impairment of goodwill and other intangible assets, 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 earnings and adjusted earnings per diluted share for the three month periods ending March 31, 2017 and 2016 reflect adjustments for charges incurred in connection with the losses attributable to the Company’s extinguishment of debt as well as 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 adjusted earnings and adjusted earnings per diluted share to net income and net income per diluted share is included in the tables following this release.

 

First Quarter 2017 Conference Call

 

Wabash National will conduct a conference call to review and discuss its first quarter results on April 25, 2017, at 10:00 a.m. EDT.  Access to the live webcast will be available 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 July 17, 2017. Meeting access also will be available via conference call at 800-708-4539, participant code 44704481.

 

About Wabash National Corporation

 

Headquartered in Lafayette, Indiana, Wabash National Corporation (NYSE: WNC) is a diversified industrial manufacturer and North America’s leading producer of semi-trailers 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, aircraft refueling 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®, Garsite, Progress Tank, Transcraft®, Walker Engineered Products, and Walker Transport. Visit www.wabashnational.com to learn more.

 

 

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 shipments, backlog, expectations regarding demand levels for trailers, 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 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 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, risks in implementing and sustaining improvements in the Company’s manufacturing operations and cost containment, dependence on industry trends and timing 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 STATEMENTS OF OPERATIONS

(Dollars in thousands, except per share amounts)

(Unaudited)

 

 

   Three Months Ended
March 31,		 
   2017   2016 
         
Net sales  $362,716   $447,676 
Cost of sales   303,360    368,150 
Gross profit   59,356    79,526 
           
General and administrative expenses   18,418    19,392 
Selling expenses   6,173    6,961 
Amortization of intangibles   4,501    4,988 
Income from operations   30,264    48,185 
           
Other income (expense):          
Interest expense   (2,990)   (4,095)
Other, net   1,333    (398)
Income before income taxes   28,607    43,692 
Income tax expense   8,434    16,168 
Net income  $20,173   $27,524 
Dividends declared per share  $0.06   $- 
Basic net income per share  $0.34   $0.42 
Diluted net income per share  $0.32   $0.42 
           
Comprehensive income          
Net income  $20,173   $27,524 
Foreign currency translation adjustment   478    (97)
Net comprehensive income  $20,651   $27,427 
           
           
Basic net income per share:          
Net income applicable to common stockholders  $20,173   $27,524 
Weighted average common shares outstanding   60,143    65,037 
Basic net income per share  $0.34   $0.42 
           
Diluted net income per share:          
Net income applicable to common stockholders  $20,173   $27,524 
           
Weighted average common shares outstanding   60,143    65,037 
Dilutive shares from assumed conversion of convertible senior notes   1,683    - 
Dilutive stock options and restricted stock   1,564    1,187 
Diluted weighted average common shares outstanding   63,390    66,224 
Diluted net income per share  $0.32   $0.42 

 

 

 

 

WABASH NATIONAL CORPORATION

SEGMENTS AND RELATED INFORMATION

(Dollars in thousands)

(Unaudited)

 

 

  Commercial   Diversified   Corporate and     
Three Months Ended March 31,  Trailer Products   Products   Eliminations   Consolidated 
2017               
New trailers shipped   10,400    500    -    10,900 
Used trailers shipped   50    50    -    100 
New Trailers  $257,190   $30,695   $-   $287,885 
Used Trailers  $887   $1,219   $-    2,106 
Components, parts and service  $12,743   $33,675   $(1,983)   44,435 
Equipment and other  $3,969   $24,321   $-    28,290 
Total net external sales  $274,789   $89,910   $(1,983)  $362,716 
Gross profit  $42,127   $17,593   $(364)  $59,356 
Income (Loss) from operations  $33,392   $4,604   $(7,732)  $30,264 
                     
2016                   
New trailers shipped   14,000    500    -    14,500 
Used trailers shipped   250    50    -    300 
New Trailers  $342,033   $29,776   $-   $371,809 
Used Trailers  $3,852   $901   $-    4,753 
Components, parts and service  $14,203   $27,388   $(2,653)   38,938 
Equipment and other  $3,952   $28,224   $-    32,176 
Total net external sales  $364,040   $86,289   $(2,653)  $447,676 
Gross profit  $60,395   $20,210   $(1,080)  $79,525 
Income (Loss) from operations  $50,257   $6,990   $(9,062)  $48,185 

 

 

 

 

WABASH NATIONAL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

 

 

   March 31,   December 31, 
   2017   2016 
   (Unaudited)     
ASSETS          
Current assets          
Cash and cash equivalents  $211,215   $163,467 
Accounts receivable   117,281    153,634 
Inventories   190,220    139,953 
Deferred income taxes   -    - 
Prepaid expenses and other   17,981    24,351 
Total current assets  $536,697   $481,405 
           
Property, plant and equipment   132,658    134,138 
           
Deferred income taxes   20,343    20,343 
           
Goodwill   148,333    148,367 
           
Intangible assets   89,927    94,405 
           
Other assets   21,325    20,075 
   $949,283   $898,733 
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
Current liabilities          
Current portion of long-term debt  $49,584   $2,468 
Current portion of capital lease obligations   424    494 
Accounts payable   109,912    71,338 
Other accrued liabilities   95,182    92,314 
Total current liabilities  $255,102   $166,614 
           
Long-term debt   186,407    233,465 
           
Capital lease obligations   1,308    1,409 
           
Deferred income taxes   486    499 
           
Other noncurrent liabilities   25,132    24,355 
           
Stockholders' equity  $480,848    472,391 
   $949,283   $898,733 

 

 

 

 

WABASH NATIONAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)

 

 

  Three Months Ended March 31, 
  2017  2016 
          
Cash flows from operating activities          
Net income  $20,173   $27,524 
Adjustments to reconcile net income to net cash provided by operating activities          
Depreciation   4,202    4,176 
Amortization of intangibles   4,501    4,988 
Net gain on the sale of assets   (2,456)   - 
Deferred income taxes   (13)   7,595 
Excess tax benefits from stock-based compensation   -    (1,090)
Loss on debt extinguishment   640    487 
Stock-based compensation   2,963    2,470 
Non-cash interest expense   520    948 
Changes in operating assets and liabilities          
Accounts receivable   36,353    (6,619)
Inventories   (51,692)   (41,227)
Prepaid expenses and other   5,214    (3,763)
Accounts payable and accrued liabilities   41,395    46,316 
Other, net   428    1,099 
Net cash provided by operating activities  $62,228   $42,904 
           
Cash flows from investing activities          
Capital expenditures   (3,173)   (2,976)
Proceeds from the sale of property, plant, and equipment   3,761    - 
Other, net   1,218    - 
Net cash provided by (used in) investing activities  $1,806   $(2,976)
           
Cash flows from financing activities          
Proceeds from exercise of stock options   5,408    192 
Excess tax benefits from stock-based compensation   -    1,090 
Dividends paid   (3,893)   - 
Borrowings under revolving credit facilities   152    175 
Payments under revolving credit facilities   (152)   (175)
Principal payments under capital lease obligations   (171)   (225)
Proceeds from issuance of term loan credit facility   189,470    - 
Principal payments under term loan credit facility   (189,944)   (482)
Principal payments under industrial revenue bond   (177)   (127)
Debt issuance costs paid   (354)   - 
Stock repurchase   (16,625)   (8,757)
Convertible senior notes repurchase   -    (42,061)
Net cash used in financing activities  $(16,286)  $(50,370)
           
Net increase (decrease) in cash and cash equivalents  $47,748   $(10,442)
Cash and cash equivalents at beginning of period   163,467    178,853 
Cash and cash equivalents at end of period  $211,215   $168,411 

 

 

 

 

WABASH NATIONAL CORPORATION

RECONCILIATION OF GAAP FINANCIAL MEASURES TO

NON-GAAP FINANCIAL MEASURES

(Dollars in thousands, except per share amounts)

(Unaudited)

 

 

Operating EBITDA1:

 

   Three Months Ended
March 31,		 
   2017   2016 
Net income  $20,173   $27,524 
Income tax expense   8,434    16,168 
Interest expense   2,990    4,095 
Depreciation and amortization   8,704    9,164 
Stock-based compensation   2,963    2,470 
Other non-operating (income) expense   (1,333)   398 
Operating EBITDA  $41,930   $59,819 

 

   Three Months Ended   Trailing Twelve Months 
   June 30,
2016		   September 30,
2016		   December 31,
2016		   March 31,
2017		   March 31,
2017		 
Net income  $35,531   $33,378   $23,000   $20,173   $112,082 
Income tax expense   19,197    18,401    12,217    8,434    58,249 
Interest expense   3,937    3,906    3,725    2,990    14,558 
Depreciation and amortization   8,986    9,052    9,565    8,704    36,307 
Stock-based compensation   3,232    2,915    3,420    2,963    12,530 
Impairment of Intangibles   1,663    -    -    -    1,663 
Other non-operating (income) expense   206    (831)   1,679    (1,333)   (279)
Operating EBITDA  $72,752   $66,821   $53,606   $41,930   $235,109 

 

Adjusted Earnings2:

 

   Three Months Ended March 31, 
   2017   2016 
   $   Per Share   $   Per Share 
                 
Net Income  $20,173   $0.32   $27,524   $0.42 
                     
Adjustments:                    
Facility transactions3   (1,673)   (0.03)   -    - 
Loss on debt extinguishment, net of taxes   640    0.01    487    0.01 
Tax effect of aforementioned items   372    0.01    (180)   - 
                     
Adjusted earnings  $19,512   $0.31   $27,831   $0.42 
                     
Weighted Average # of Diluted Shares O/S   63,390         66,224      

 

   Three Months Ended 
   June 30, 2016   September 30, 2016   December 31, 2016 
   $   Per Share   $   Per Share   $   Per Share 
                         
Net Income  $35,531   $0.53   $33,378   $0.51   $23,000   $0.36 
                               
Adjustments:                              
Facility transactions3   -    -    (740)   (0.01)   450    0.01 
Impairment of goodwill and other intangibles   1,663    0.02    -    -    -    - 
Loss on debt extinguishment   -    -    -    -    1,408    0.02 
Tax effect of aforementioned items   (584)   (0.01)   263    -    (645)   (0.01)
                               
Adjusted earnings  $36,610   $0.55   $32,901   $0.50   $24,213   $0.38 
                               
Weighted Average # of Diluted Shares O/S   67,115         66,032         63,701      

 

1Operating EBITDA is defined as earnings before interest, taxes, depreciation, amortization, stock-based compensation, impairment of intangibles, and other non-operating income and expense.  

 

2Adjusted earnings and adjusted earnings per diluted share reflect adjustments for income (loss) recognized on the sale of the Company's former facilities as well as charges related to losses incurred in connection with the Company’s extinguishment of debt and impairment of goodwill or other intangible assets.  

  

3Facility transactions in 2016 and 2017 relate to gains and/or losses incurred for the sale or closure of our locations in Phoenix, Denver, Miami, and Findlay.