Wabash National Corporation (NYSE:WNC) reported record net sales and operating income in 2015 for the fourth consecutive year of $2.03 billion and $180.4 million, respectively.
Full-year 2015 results included the benefit for adjustments, net of tax, totaling $0.9 million, or $0.01 per diluted share, as gains realized on the sale of the company’s former retail branch locations were offset by charges for the impairment of certain intangible assets related to streamlining of product branding and the early extinguishment of debt incurred in connection with the refinancing of the company’s term loan credit facility and repurchases of a portion of the outstanding convertible senior notes.
Excluding the impact of these items, non-GAAP adjusted earnings for the full year 2015 were $103.4 million, or $1.49 per diluted share.
For 2015, Wabash achieved record operating EBITDA of $229.5 million, or 11.3 percent of net sales, as compared to $169.0 million, or 9.1 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 extremely pleased with our results for 2015 as we set new records across several key financial metrics. The overall strength in the company’s operating performance highlights the success of our 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, while maintaining our focus and expertise in lean and six sigma optimization initiatives. This is demonstrated by the achievement of record net sales and operating income for the fourth consecutive year of $2.03 billion and $180.4 million, respectively, as well as a 230 basis point improvement in operating income margin to a record level of 8.9 percent. 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.
“New trailer shipments of 64,700 for the year exceeded our previous guidance due to strong customer pick-up and represents an increase of 7,350 trailers, or 12.8 percent, as compared to the previous year. We look forward to 2016 with a healthy backlog of orders totaling $1.2 billion, representing an increase of 10 percent as compared to the prior year period, and a trailer demand expected to be well above replacement levels for a fifth 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.”
Net income for the fourth quarter of 2015 was $33.3 million, or $0.50 per diluted share, compared to fourth quarter 2014 net income of $19.1, or $0.27 per diluted share. Fourth quarter 2015 non-GAAP adjusted earnings increased $15.0 million as compared to the prior year period to $34.1 million, or $0.51 per diluted share. Non-GAAP adjusted earnings for the fourth quarter of 2015 includes the impairment of certain intangible assets of $1.1 million related to streamlining of product branding and an early extinguishment of debt charge of $0.2 million incurred with regards to the company’s repurchase of a portion of the outstanding convertible senior notes.
Net sales for the fourth quarter increased 3 percent to a record $544 million from $527 million in the prior year quarter and operating income increased 60 percent to $54.7 million compared to operating income of $34.1 million for the fourth quarter of 2014. Operating EBITDA, a non-GAAP measure that excludes the effects of certain recurring and non-recurring items, for the fourth quarter of 2015 was $68.6 million, an increase of $22.5 million compared to operating EBITDA for the previous year quarter.
Commercial Trailer Products achieved new quarterly records for revenues, gross profit, operating income and operating margin. Net sales were $413 million, an increase of $35 million, or 9.3 percent, on shipments of 16,100 trailers, representing 350 more trailers than the prior year period.
This increase in revenue was primarily due to an improved pricing environment and the 2.2 percent increase in new trailer shipments during the quarter. Supported by the improved pricing environment, continued strong demand and outstanding operational execution, gross profit and gross profit margin increased $27.7 million and 600 basis points to $58.5 million and 14.2%, respectively, and operating income increased by $26.2 million, or 104.1 percent, to $51.4 million compared to the same period last year.
Diversified Products’ net sales decreased $17 million, or 13.9 percent, as compared to the previous year period as decreases in tank trailer shipments were only partially offset by increased sales of the company’s aviation refuelers and composite product offerings. Gross profit decreased $1.6 million, or 6.0 percent, on lower sales; however, gross profit margin improved 200 basis points as compared to the prior year period to 23.6 percent as a result of strong operational execution. Operating income margin, excluding the charges for impairment of intangible assets during the current quarter, was 11.9 percent, an improvement of 30 basis points as compared to the prior year period.
Retail’s net sales of $37 million decreased 22.9 percent compared with the prior year period primarily due to lower shipments of new trailers as a result of channel optimization activities and early depletion of build slots, which were partially offset by the continued strong demand for parts and service activities.
“We enter 2016 with great momentum from a record 2015, a strong trailer demand environment generating a strong backlog, continued excellence in operational performance across all business segments and the potential for organic growth through diversification and innovative new product introductions,” Giromini said. “With that backdrop, coupled with a strong industry demand forecast, our current expectations are for 2016 to deliver a very strong year.”