Wabash National Corporation (NYSE: WNC) reported year-over-year improvement across a number of financial and operating metrics for the first quarter.
The Company reported net income of $5.7 million, or $0.08 per diluted share, on net sales of $324 million. Results include full-quarter results of Walker Group Holdings, LLC, acquired by the company on May 8, 2012. The company’s first-quarter results include the impact of one-time costs related to the acquisition of Walker and of certain bankruptcy assets of Beall Corporation, acquired on February 4, 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. The company reported net income of $5.1 million, or $0.07 per diluted share, on net sales of $278 million during the same period last year. The prior period results also include non-recurring charges related to expenses in connection with the company’s acquisition of Walker, totaling of $1.7 million, and excluding the impact of these costs, non-GAAP adjusted earnings were $6.7 million, or $0.10 per diluted share.
Wabash reported income from operations totaling $14.9 million for the first quarter of 2013, compared to operating income of $5.4 million for the first quarter of 2012. Non-GAAP operating EBITDA, which excludes the effects of certain costs related to the Walker and Beall acquisitions, as well as other recurring and non-recurring items, for the first quarter of 2013 was $27.1 million, an improvement of $14.8 million compared to the previous year period.
On a trailing 12-month basis, the company’s revenues have increased to approximately $1.5 billion generating operating EBITDA of $133.3 million, or 8.8 percent. 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 and diversification into higher margin opportunities through the acquisition of Walker, which accounted for approximately $95 million of the current quarter’s net sales.
“We are pleased with our first-quarter performance, the continued execution of our long-term strategic plan, and the progress we have made in transforming Wabash National into a diversified industrial manufacturer,” said Dick Giromini, president and chief executive officer. “First-quarter results demonstrate the benefit of our diversification strategy, including a more balanced contribution from our three segments to both the top-line and bottom-line. We also continued to demonstrate our commitment to protecting and enhancing the margins in the Commercial Trailer Products segment while extending our reach in the higher margin Diversified Products segment. This was reflected in the significant margin improvements across all three segments compared to the prior year period. In addition, we strengthened the diversified product portfolio by expanding our tank trailer product offering through our acquisition of certain Beall assets, which was completed during the quarter.
“New trailer shipments for the first quarter were approximately 8,600, consistent with our previous guidance of 8,000 to 9,000 trailers. We anticipate a significant increase in customer pickups during the second quarter with trailer shipments expected to be between 11,000 to 12,000 trailers. We continue to expect the full-year trailer shipments to be between 45,000 and 48,000 units. Our backlog increased during the quarter and remains at a healthy level of approximately $674 million as of March 31, 2013.
“Longer-term, we believe the demand environment for trailers will remain strong as key drivers support continued demand for new trailers such as fleet age, customer profitability, used trailer values, regulatory compliance and access to financing all support continued demand for new trailers. On the backdrop of these industry tailwinds, we remain focused on delivering the most innovative and highest quality products with the best value to our customers across all of our business segments.”
Commercial Trailer Products’ net sales decreased $45.3 million or 18.6 percent, on 8,000 units, 2,400 fewer units than the prior year period. However, consistent with the company’s efforts last year to improve pricing on our products, to recover material cost increases, and to improve the product mix, the company’s average selling prices increased $1,100 or 4.7 percent compared to the prior year period. As a result, gross margin improved 110 basis points to 5.9 percent compared to the prior year period. Operating income decreased to $5.3 million which was $0.9 million lower than first quarter last year primarily due to lower trailer shipments.
Diversified Products’ net sales increased $80.4 million, or 255 percent, with Walker contributing $88.1 million in the current quarter. Gross margins improved by 280 basis points from 20.4 percent to 23.2 percent, driven by the Walker acquisition and productivity improvements realized in the Wabash Wood Products business. Operating income increased 151 percent or $8.1 million as compared to the same period last year, primarily due to the Walker acquisition, partially offset by lower volume in our composite product offerings.
Retail’s net sales increased $15.7 million or 63 percent, gross margins increased 200 basis points to 11.9 percent and operating income improved $0.9 million for the quarter. Results were favorably impacted by the contribution of the Walker parts and service business and an increase in new trailer shipments of approximately 300 units, or 100 percent.