Wabash’s Income Soars in 3Q on 100% Increase in Trailer Shipments
Nov 2, 2011 2:46 PM
With trailer shipments for Wabash National Corporation (NYSE: WNC) increasing 100% in the third quarter and 129% for the year to date, the company reported an improvement in operating results of $6.5 million and $32.6 million for the three- and nine-month periods, respectively.
Dick Giromini, President and Chief Executive Officer, said full-year new trailer shipments are estimated to be between 47,000 and 48,000 units.
Operating income was $2.3 million for the third quarter of 2011, compared to an operating loss of $4.2 million for the third quarter of 2010. For the nine months ending September 30, the company reported operating income of $11.4 million for 2011, compared to an operating loss of $21.2 million for 2010.
Trailer shipments were 13,600 for this past quarter and 33,900 units for the year to date.
Wabash reported significant reported third-quarter net income of $1.1 million, or $0.02 per diluted share on net sales of $336 million -- compared to a net loss of $1.9 million, or $0.03 per diluted share, on net sales of $171 million for the third quarter of 2010.
For the nine months ending September 30, the company reported net income of $7.6 million, or $0.11 per diluted share, on net sales of $846 million for 2011 compared to a net loss of $146.6 million, or $3.93 per diluted share, on net sales of $399 million for 2010. Results for the nine months ending September 30, 2011, include a one-time charge of $0.7 million, or $0.01 per diluted share, related to the early extinguishment of the company’s prior revolving credit facility that was replaced during
the second quarter. Results for the three and nine months ended September 30, 2010 included a noncash benefit of $3.3 million, or $0.05 per diluted share, and a charge of $121.6 million, or $2.78 per diluted share, respectively, related to the change in the fair value of the company’s warrant which was issued in 2009 to a private investor and fully exercised in the third quarter of 2010.
“We are pleased to have delivered noteworthy year-over-year improvement in our operating results for the eighth consecutive quarter,” Giromini said. “As expected, the third quarter presented the most significant cost and performance challenges of the year related to the peak effect of higher raw material costs; fixed-price, lower-margin orders accepted early in the cycle; and labor inefficiencies associated with capacity ramp-up. However, we made progress in working through these challenges as we moved through the third quarter.
“Going forward, we firmly expect to deliver improved financial performance that is more reflective of current demand and, more importantly, our positioning in the marketplace. Our efforts to further diversify the business continued to show positive momentum as sales of our non-trailer related DuraPlate and Allied products totaled $16 million for the quarter, an increase of approximately 153 percent as compared to the prior year.
“For the third quarter, new trailer shipments increased to 13,600, representing the highest shipment quarter since 2006. We expect to see a similar shipment level for the fourth quarter with 2011 full-year new trailer shipments estimated to be approximately 47,000 to 48,000 units and supported by a backlog of $513 million as of September 30, 2011. With the third quarter now behind us, we look forward to improving margins through the continued optimization initiatives and an improving mix of higher margin orders. Longer-term, as we enter the 2012 order season, we are committed to improving pricing and margins and we remain confident in our strategic positioning to deliver improved operating performance throughout the cycle along with continued diversification of the business. Our industry is still early in the recovery cycle and we are well positioned to capitalize on the increasing demand for new trailers.”
On a non-GAAP basis, the company’s Operating EBITDA of $6.6 million represents an increase of $5.9 million as compared to the third quarter of 2010 on approximately 6,800 additional new trailer shipments. A discussion of the company’s use of Operating EBITDA as a non-GAAP measure is included below, and a reconciliation of Operating EBITDA to net income (loss) is provided in the supplemental schedules included in this release.
Finally, and as previously announced, on August 22, 2011, the company entered into an amendment to its existing credit agreement further increasing the borrowing capacity from $150 million to $175 million. Under the credit agreement, the company had the option, subject to a borrowing base and lender agreement, to request up to two increases in minimum increments of $25 million and not to exceed $50 million. As a result, liquidity, or cash plus available borrowings, at September 30, 2011, amounted to approximately $107 million.
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