Wabash National Corp. reported net sales for the third quarter 2020 were steady compared with prior quarters at $351.6 million as the company continued to produce equipment “to satisfy customer demand volumes.”
Consolidated gross margin of 12.3% was the strongest rate since Q4 of 2019 as the company continued to achieve greater efficiency operating within the constraints of COVID-19 protocols, Wabash noted. Operating income of $8.4 million, or 2.4% of sales includes the positive impact of cost savings stemming from strategic organizational realignment actions completed during the quarter.
Total backlog as of Sept. 30 was approximately $1 billion as new order activity markedly accelerated during the September time frame. Backlog rose 37% compared June 2020 and was 29% above September 2019.
“We are pleased to deliver a profitable quarter that builds upon our purposeful financial management during the first half of 2020,” said Brent Yeagy, president and CEO. “We successfully executed strategic cost reductions that have not only preserved our organization's strength, but have enhanced our company's culture by eliminating silos and allowed us to provide a more seamless experience for customers who purchase across our unmatched portfolio of first to final mile solutions.”
Operating cash flow was $107.1 million and free cash flow was $93.4 million year to date at the close of the third quarter, which compares to significant cash burn during each of the two prior economic recessions, according to Wabash.
"Our increased backlog reflects strong underpinnings within the freight markets as rebounding freight activity has contributed to significant gains in spot and contract rates,” Yeagy said. “While we're looking forward to a demand environment that looks poised to improve into 2021, we also remain focused on executing in the final quarter of 2020 completing a year that we expect will demonstrate the benefits of our company's diversification efforts over the last decade as well as actions over the past two years to significantly strengthen the management system."
"Our broadened and synergistic portfolio has resulted in considerable improvement in trough performance across an array of key financial metrics like operating income, EBITDA, and free cash flow."
The Wabash Commercial Trailer Products segment shipped 7,975 trailers for the quarter, compared to 13,700 in the third quarter of 2019. Through the first three quarters, the CTP segment has shipped 24,500 trailers, compared to 40,350 trailer for the same period a year ago.