Wabash National Announces Record Year
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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowLafayette-based Wabash National Corp. (NYSE: WNC) is reporting record full-year net income of nearly $70 million, compared to $46.5 million in 2013. Chief Executive Officer Dick Giromini says forecasts point to a strong demand for trailers in 2015 and the company has its largest backlog of orders in more than a decade. February 4, 2015
News Release
LAFAYETTE, Ind. (February 3, 2015) – 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 fourth quarter and full year periods ending December 31, 2014.
Net income for the fourth quarter of 2014 was $19.1 million, or $0.27 per diluted share on net sales of $527 million, a quarterly record for the third consecutive quarter, compared to fourth quarter 2013 net income of $10.4 million, or $0.15 per diluted share on net sales of $458 million. Earnings for the quarter ended December 31, 2013 included the impact of an early extinguishment of debt charge totaling $0.6 million related to a $20 million term loan prepayment made in December 2013. Excluding the impact of this item, non-GAAP adjusted earnings for the fourth quarter of 2013 were $10.8 million, or $0.15 per diluted share.
For the twelve months ended December 31, 2014, the Company reported net income of $60.9 million, or $0.85 per diluted share, on record net sales of $1.86 billion, compared to net income of $46.5 million, or $0.67 per diluted share, on net sales of $1.64 billion for the twelve months ended December 31, 2013. Full year 2014 results included one-time charges net of tax totaling $2.0 million, or $0.03 per diluted share, related to the early extinguishment of debt incurred with the Company's term loan prepayments during the current year, the transition of three Retail branch locations to independent dealer facilities in May 2014 and the revaluation of deferred income taxes due to changes in statutory tax rates. Excluding the impact of these items, non-GAAP adjusted earnings for the full year 2014 were $63.0 million, or $0.89 per diluted share. Full year 2013 results included one-time charges net of tax totaling $1.7 million, or $0.03 per diluted share, related to the early extinguishment of debt and costs associated with the recent acquisitions of Walker and certain assets of Beall. Excluding the impact of these items, non-GAAP adjusted earnings for the full year 2013 were $48.2 million, or $0.70 per diluted share.
The Company reported operating income of $34.1 million for the fourth quarter of 2014, compared to operating income of $24.1 million for the fourth quarter of 2013. Operating EBITDA, a non-GAAP measure that excludes the effects of certain recurring and non-recurring items, for the fourth quarter of 2014 was $46.1 million, an increase of $10.5 million compared to operating EBITDA for the previous year period. For full year 2014, the Company achieved record operating EBITDA of $169.0 million, or 9.1 percent of net sales, as compared to $149.9 million, or 9.2 percent of net sales, for the previous year. The year-over-year improvement in operating performance is attributable to the successful execution of the Company's growth and diversification strategies as well as operational improvements across the Company's manufacturing facilities.
Dick Giromini, president and chief executive officer, stated, “We are very pleased with our results for 2014 as we achieved new record levels of performance across several key financial metrics. The growth and diversification initiatives driven by our long-term strategic plan to transform the Company into a diversified industrial manufacturer with a higher growth and margin profile have continued to gain momentum. This is demonstrated by the achievement of record net sales and operating income for the third consecutive year of $1.86 billion and $122.4 million, respectively, as well as a 30 basis point improvement in operating income margin to 6.6 percent, equaling our best operating income margin ever. Our performance for the year further substantiates the significant progress we have made in our transformation efforts, and underscores our commitment to long-term profitable growth. As always, we continue to implement operational improvements throughout the business and remain committed to further enhancing our margins and growth profile.”
Mr. Giromini continued, “New trailer shipments of 57,350 for the year were consistent with our recently updated guidance and represents an increase of 10,550 trailers, or 22.5 percent, as compared to the previous year. We look forward to 2015 with a healthy backlog of orders totaling $1.09 billion, an increase of 54 percent as compared to the prior year period and representing the highest levels in more than a decade, and a trailer demand forecast well above replacement levels for a fourth consecutive year. Fleet age, customer profitability, used trailer values, regulatory compliance and access to financing all support continued strong trailer demand and provide a favorable pricing environment within specific product lines.”
Fourth Quarter Business Segment Highlights
Commercial Trailer Products' net sales, prior to the elimination of intersegment sales, increased $54 million, or 16.7 percent, on shipments of 15,750 trailers, representing 2,300 more trailers than the prior year period. This increase in revenue was primarily driven by a 17.1 percent increase in new trailer shipments during the quarter as well as a 2.8 percent increase in average selling prices as compared to the prior year period due to improved pricing and product mix. As a result of higher volumes and improved pricing, gross profit and gross profit margin increased $9.7 million and 160 basis points, respectively, compared to the same period last year. Operating income increased by $10.9 million, or 76.4 percent, to $25.2 million compared to the fourth quarter of 2013, due to increased volume, improved pricing and continued operational improvements.
Diversified Products' net sales, prior to the elimination of intersegment sales, totaled $138 million for the fourth quarter of 2014, an increase of $16 million, or 12.7 percent, due primarily to higher volume of tank trailers and non-trailer truck mounted equipment offset slightly by reduced sales of engineered products and composite products. Compared to the fourth quarter of 2013, gross profit increased $1.2 million on higher volumes while gross profit margin declined 150 basis points primarily due to higher operating costs related to wood flooring operations and continued pricing pressures on certain composite products. Operating income for the fourth quarter of 2014 was $14.7 million, or 10.7 percent of net sales, an increase of $1.2 million compared to the same period last year.
Retail's net sales, prior to the elimination of intersegment sales, totaled $48 million for the fourth quarter of 2014. Results for the current quarter, which were consistent with the prior year period, reflect continued strong demand for parts and services despite fewer locations as a result of the transition of three West Coast branches to independent dealers in May 2014. Gross profit margin increased 20 basis points compared to the prior year period to 9.9 percent, primarily as a result of product mix. Operating income for the fourth quarter of 2014 was $0.6 million, an improvement of $0.6 million compared to the same period last year.
2015 Outlook
Mr. Giromini further commented, “Base-loaded with our strongest backlog in more than a decade, we enter 2015 with great momentum from a record 2014, an exceptionally strong trailer demand environment, and operational execution progress being made at an accelerated pace. With that backdrop, and even greater demand projected by industry forecasters, with which we concur, our current expectations are for 2015 demand and performance to excee