Lafayette-based Wabash National Corp. (NYSE: WNC) is reporting second quarter net income of $14.1 million, compared to $1.9 million during the same period last year. Chief Executive Officer Dick Giromini says the growth was spurred in part by the company's composite products segment, which exceeded expectations.
July 31, 2013
Lafayette, Ind. — Wabash National Corporation (NYSE: WNC) reported second quarter 2013 net income of $14.1 million, or $0.20 per diluted share on net sales of $413 million compared to second quarter 2012 net income of $1.9 million, or $0.03 per diluted share on net sales of $362 million. The Company’s second quarter 2013 results include the impact of non-recurring acquisition expenses and the early extinguishment of debt related to a $20 million term loan prepayment made in May 2013. Excluding the impact of these items, non-GAAP adjusted earnings for the quarter ended June 30, 2013 were $14.7 million, or $0.21 per diluted share. The second quarter 2012 results also included non-recurring charges related to the Company’s acquisition of Walker Group Holdings LLC (“Walker”), totaling $13.6 million. Excluding the impact of these costs, non-GAAP adjusted earnings for the quarter ended June 30, 2012 were $15.5 million, or $0.23 per diluted share. If the prior period results were tax affected at 40.0 percent consistent with the current period, non-GAAP earnings per share would have been lower by $0.08 per diluted share. Net sales for the second quarter of 2013 also included a full quarter impact from the Walker acquisition completed in May 2012 as well as the acquisition of certain assets of Beall Corporation (“Beall”) completed in the first quarter of 2013.
The Company reported operating income totaling $30.5 million for the second quarter of 2013, compared to operating income of $8.6 million for the second quarter of 2012. Non-GAAP operating EBITDA, which excludes the effects of certain costs related to the acquisition of Walker and certain assets of Beall, as well as other recurring and non-recurring items, for the second quarter of 2013 was $42.2 million, an improvement of $12.6 million compared to the previous year period. On a trailing twelve months basis, the Company’s net sales increased to approximately $1.56 billion, generating operating EBITDA of $145.9 million, or 9.4 percent of net sales. The improvement in operating performance is attributed to the successful execution of the Company’s growth strategy and disciplined approach to improving profitability, including an improved mix of higher-margin trailer orders, diversification into higher margin opportunities through the acquisitions of Walker and certain assets of Beall, and operational improvements in our manufacturing facilities.
Dick Giromini, president and chief executive officer, stated, “We are very pleased to report such a strong second quarter. Our results were driven by the broad-based execution of our long-term strategy to transform Wabash National into a diversified manufacturer, while implementing operational improvements throughout the business and enhancing our long-term margin and growth profile through the integration of strategic acquisitions. The benefits of our diversification initiatives are evident in our second quarter results including a more balanced contribution from each of our segments to both our top-line and bottom-line. In particular, our composite products exceeded our expectations and recorded the strongest quarter in its history. We maintained the momentum generated during 2012 and followed the first quarter with solid growth during the second quarter, and based on current order rates and industry indicators, we expect continued strong performance in the second half of the year.”
Mr. Giromini continued, “New trailer shipments for the second quarter were approximately 11,400, consistent with our previous guidance of 11,000 to 12,000 trailers. We anticipate a significant increase in customer pickups during the third quarter with trailer shipments expected to be between 12,500 to 13,500 trailers. We now expect the full year trailer shipments to be between 45,500 and 47,500 units. Our backlog increased slightly during the quarter and continues to be at a healthy level of approximately $680 million as of June 30, 2013. Longer-term, we believe the demand environment for trailers remains strong as fleet age, customer profitability, used trailer values, regulatory compliance and improved access to financing all support continued demand for new trailers.”
Commercial Trailer Products' net sales decreased $14.9 million or 5.3 percent, on 10,700 trailers, or 1,000 fewer trailers than the prior year period. However, consistent with the Company’s efforts to improve pricing of our products, to recover material cost increases, and to improve the product mix, the Company’s average selling prices increased $500, or 2.3 percent compared to the prior year period. As a result, gross margin improved 120 basis points to 7.9 percent compared to the prior year period. Operating income increased to $14.6 million, or $0.8 million higher than the second quarter last year due to improved pricing and operational improvements.
Diversified Products' net sales increased $63.3 million, or 87.8 percent, with our recent acquisitions of Walker and certain Beall assets contributing $98 million during the second quarter of 2013 as compared to $40 million for the previous year quarter. Gross profit improved $15.2 million compared to the prior year period, while gross margin increased 50 basis points from 22.9 percent to 23.4 percent, primarily attributed to the mix effect of Walker being a larger portion of Diversified Products this year. Operating income increased 107 percent, or $10.0 million, as compared to the same period last year, primarily due to the full quarter impact of Walker in 2013 as compared to the partial quarter in 2012 and also due to a strong quarter from our composite products.
Retail's net sales increased $10.0 million, or 26.1 percent, and gross profit improved $1.4 million, gross margins increased 70 basis points to 11.5 percent, and operating income improved $0.2 million during the second quarter of 2013 as compared to the previous year quarter. Results were favorably impacted by the contribution of the Walker parts and service business as well as an increase in new trailer shipments of approximately 200 units.
Second Quarter 2013 Conference Call
Wabash National will conduct a conference call to review and discuss its second quarter results on July 31, 2013, 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 October 23, 2013. Meeting access also will be available via conference call at 888-771-4371, participant code 35282310.
About Wabash National Corporation
Headquartered in Lafayette, Indiana, Wabash National Corporation (NYSE: WNC) is a diversified 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, intermodal equipment, liquid tank trailers, frac tanks, engineered products, and composite products. Wabash National operates three wholly-owned subsidiaries: Transcraft Corporation, Walker Group Holdings LLC, and Wabash National Trailer Centers, Inc. Its innovative products are sold under the following brand names: Wabash National, Transcraft, Benson, DuraPlate, ArcticLite, Walker Transport, Walker Stainless Equipment, Walker Defense Group, Walker Barrier Systems, Walker Engineered Products, Brenner Tank, Garsite, Progress Tank, TST, Bulk Tank International,