Lafayette-based Wabash National Corp. (NYSE: WNC) is reporting first quarter net income of $7.3 million, compared to $5.7 million for the same period a year earlier. Chief Executive Officer Dick Giromini says the company's three operating segments experienced “strong growth” and believes 2014 could be a record year. April 28, 2014
LAFAYETTE, Ind. – 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 first quarter ended March 31, 2014. Highlights include:
Net sales of $358 million for first quarter 2014, up 10 percent over prior year
Operating income of $19.5 million for first quarter 2014, up 31 percent over prior year
Non-GAAP adjusted earnings per share improves 33 percent from prior year to $0.12 per diluted share
Net income for the first quarter of 2014 was $7.3 million, or $0.10 per diluted share, compared to the first quarter 2013 net income of $5.7 million, or $0.08 per diluted share. First quarter 2014 non-GAAP adjusted earnings were $8.3 million, or $0.12 per diluted share, after excluding a $1.0 million charge related to a change in statutory income tax rates. The Company's prior year period results included the impact of one-time costs related to the acquisitions of Walker Group Holdings, LLC (“Walker”) in May 2012 and certain assets of Beall Corporation (“Beall”) in February 2013 totaling $0.6 million, or $0.01 per diluted share. Excluding the impact of these items, non-GAAP adjusted earnings for the quarter ended March 31, 2013 were $6.1 million, or $0.09 per diluted share.
For the first quarter of 2014, the Company's net sales increased 10 percent to $358 million from $324 million in the prior year quarter, and operating income increased 31 percent to $19.5 million compared to operating income of $14.9 million for the first quarter of 2013. Operating EBITDA, a non-GAAP measure that excludes the effects of costs related to the acquisitions of Walker and certain assets of Beall, as well as other recurring and non-recurring items, for the first quarter of 2014 was $30.6 million, an increase of $3.5 million compared to Operating EBITDA for the previous year period. On a trailing twelve month basis, the Company's net sales increased to $1.7 billion generating Operating EBITDA of $153.4 million, or 9.2 percent of net sales. Continued improvement in operating performance is attributable to the successful execution of the Company's growth and diversification strategy as well as a disciplined approach to improving profitability. Through these initiatives the Company has enhanced its growth and margin profile and now derives its revenues and earnings from a broad array of products, customers, end markets and geographies.
Dick Giromini, president and chief executive officer, stated, “We are very pleased with our first quarter performance and the strong start to the current year across all of our operating segments. We maintained the momentum we generated in 2013 and further validated the transformative nature of our growth and diversification initiatives. We generated strong growth and healthy margins across each of our three operating segments, which gives us confidence in our business as we look to the remainder of 2014.”
Mr. Giromini continued, “New trailer shipments for the first quarter were approximately 9,900, at the top end of our previous guidance of 9,000 to 10,000 trailers. We were encouraged by the overall strength of the demand in the first quarter taking into account the difficulties most of our customers faced due to the extreme weather conditions throughout much of the country, which limited our ability to ship trailers in the quarter. The recent upward adjustments to total trailer shipments and production by ACT Research and FTR, respectively, further support the strength in trailer demand and substantiate our prior guidance for top line growth compared to last year. As such, we affirm our full-year trailer shipment guidance of 47,000 to 50,000 units. Our backlog remains healthy at approximately $791 million as of March 31, 2014, an increase of approximately $117 million, or 17 percent, from March 31, 2013. Additionally, current industry forecasts point to strong demand levels with projections well above replacement demand and exceeding previous year levels. Based on these factors coupled with direct customer feedback regarding their needs, we continue to believe 2014 has the potential to exceed the record performances achieved last year.”
Commercial Trailer Products' net sales increased $29 million, or 14.8 percent, on shipments of 9,200 trailers, or 1,200 more trailers than the prior year period. This increase in revenue was primarily due to the 15.0 percent increase in trailer shipments during the quarter, offset by a 2.7 percent reduction in average selling prices compared to the prior year period due to customer and product mix. Driven by higher volumes, gross profit and gross profit margin increased $3.3 million and 70 basis points, respectively, as compared to the same period last year. Operating income increased by $3.6 million to $8.9 million from the first quarter last year, due to increased volume and continued operational improvements.
Diversified Products' net sales increased $8 million, or 7.1 percent, primarily attributed to increased tank trailer shipments as compared to the previous year period. Gross profit and gross profit margin declined $0.5 million and 200 basis points, respectively, compared to the prior year period, primarily due to higher raw material costs related to our wood flooring operations. Operating income decreased $0.7 million as compared to the same period last year due to higher material costs and increased intangible amortization charges associated with the recent acquisitions of Walker and certain assets of Beall.
Retail's net sales of $46 million increased 11.7 percent compared with the prior year period, primarily due to increased shipments of new trailers, as well as continued strong demand for parts and services. Gross profit margin of 11.8 percent was consistent with the previous year period as higher volumes offset increased cost of services supporting our strategic growth initiatives. Operating income increased $0.2 million during the first quarter of 2014 as compared to the same period last year as increased volumes were slightly offset by higher selling and administrative expenses related to our strategic growth initiatives.
First Quarter 2014 Conference Call
Wabash National will conduct a conference call to review and discuss its first quarter results on April 29, 2014, 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 22, 2014. Meeting access also will be available via conference call at 888-771-4371, participant code 37103303.
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 specializes in the design and production of dry freight vans, refrigerated vans, platform trailers, liquid tank trailers, intermodal equipment, engineered products, and composite products. Its innovative products are sold under the following brand names: Wabash National, Transcraft, Benson, DuraPlate, ArcticLite, Walker Transport, Walker Defense Group, Walker Barrier Systems, Walker Engineered Products, Brenner Tank, Beall, Garsite, Progress Tank, TST, Bulk Tank International and Extract Technology. To learn m