News Details

• Third quarter net income per diluted share of $0.51 increases $0.04 per share, or 9 percent, over prior year
• Non-GAAP earnings of $0.50 per diluted share exceeds prior year period by $0.03 per share, or 6 percent
• Gross margin and operating income margin of 18.0 percent and 11.8 percent, respectively, represents year over year improvements of 180 basis points and 120 basis points, respectively
• Strong operating performances continue as trailing twelve-month operating income margins increase to 11.2 percent, a year over year improvement of 320 basis points

LAFAYETTE, Ind., Oct. 24, 2016 (GLOBE NEWSWIRE) -- Wabash National Corporation (NYSE:WNC), a diversified industrial manufacturer and North America’s leading producer of semi-trailers and liquid transportation systems, today reported results for the third quarter ended September 30, 2016. 

Net income for the third quarter of 2016 was $33.4 million, or $0.51 per diluted share, compared to the third quarter 2015 net income of $31.9 million, or $0.47 per diluted share.  Third quarter 2016 non-GAAP adjusted earnings increased $1.0 million, or 3 percent, over the prior year period to $32.9 million.  Non-GAAP adjusted earnings for the third quarter of 2016 excludes a $0.7 million gain related to the transition of a former branch location to a third-party dealer.

Net sales for the third quarter decreased 13 percent to $464 million from $531 million in the prior year quarter while operating income decreased 3 percent to $54.9 million compared to $56.4 million for the prior year period as favorable pricing and operational execution across the business was offset by lower volumes.  Operating EBITDA, a non-GAAP measure that excludes the effects of certain recurring and non-recurring items, for the third quarter of 2016 was $66.8 million, a decrease of $1.2 million, or 2 percent, compared to operating EBITDA for the prior year period.  On a trailing twelve month basis, net sales totaled $1.9 billion, generating Operating EBITDA of $268.0 million, or 13.9 percent of net sales.  The continued strong operating performances are attributable to the successful execution of the Company’s growth and diversification strategy, strong demand within the Commercial Trailer Products segment and outstanding operational execution across the Company’s manufacturing facilities.

The following is a summary of select operating and financial results for the past five quarters:

Notes:
(1) See “Non-GAAP Measures” below for explanation of the non-GAAP results included above.

Dick Giromini, chief executive officer, stated, “Third quarter results represent another quarter of delivering strong financial results that validate our long-term strategic plan and further demonstrate the progress we have made in executing that plan to profitably grow and diversify the business.  Despite lower top-line revenues as compared to the prior year, we were able to improve gross and operating profit margins by 180 basis points and 120 basis points, respectively.  The continued strong financial performances of the Company over the past several quarters further demonstrates our commitment to operational excellence leveraging our long-standing expertise in lean manufacturing and process improvements in addition to our ongoing strategy to favor margin over volume in the core trailer business.”

Mr. Giromini continued, “New trailer shipments for the third quarter were approximately 15,450, just shy of previous guidance of 15,500 to 16,500 trailers, driven by timing of customer pick-ups and continued slow demand in our tank trailer business.  With three quarters now complete, a seasonally strong backlog of $643 million and proven strong operational execution, we look forward to completing 2016 as our fifth consecutive year of record operating performance.  In addition, we also now expect 2016 total units to be at the low end of our 60,000 to 62,000 shipment range communicated previously.  Longer term, while we do expect to see order volumes moderate, we continue to believe the demand environment for trailers will remain healthy as fleet age, regulatory compliance requirements and customer profitability all support an extended trailer cycle. Additionally, we expect continued efforts driving productivity improvements throughout the business, developing growth opportunities through new product introductions and market expansion opportunities to contribute in growing our top line and margins as well as in capitalizing on macro growth trends.”

Third Quarter Business Segment Highlights

The table below is a summary of select segment operating and financial results prior to the elimination of intersegment sales for the third quarters of 2016 and 2015, respectively.  As announced in the prior quarter, the Company realigned its reporting segments effective in the second quarter of 2016.  The former Retail segment will now be reported within both Commercial Trailer Products and Diversified Products, as applicable.  The decision to strategically realign the Retail segment was made to strengthen the alignment between the Company’s manufacturing businesses and its retail sales and service operations, improve profitability and capitalize on growth opportunities.  Prior year periods have been restated to reflect this new segment alignment.  A complete disclosure of the results by individual segment is included in the tables following this release.

Commercial Trailer Products’ net sales decreased $26 million, or 6 percent, primarily due to a decline in new trailer shipments as compared to the prior year period related to the timing of customer pick-ups.  Despite the lower revenues, gross profit and gross profit margin increased $9.3 million and 340 basis points, respectively, as compared to the same period last year due to continued execution of a pricing strategy committed to favoring margin over volume, operational excellence within our manufacturing facilities and continued material cost optimization.  Operating income increased $9.3 million, or 20 percent, from the third quarter last year to $55.0 million.

Diversified Products’ net sales decreased $40 million, or 32 percent, due primarily to the decline in tank trailer shipments compared to the previous year period.  The decrease in tank trailer demand is primarily due to continued softness in the chemical and energy end markets.  As a result of the lower demand levels, gross profit and gross profit as a percentage of net sales decreased $12.0 million and 250 basis points, respectively.  Operating income for the third quarter of 2016 was $6.2 million, or 7.1 percent of net sales, a decrease of $11.4 million compared to the same period last year. 

Non-GAAP Measures

In addition to disclosing financial results calculated in accordance with United States generally accepted accounting principles (GAAP), the financial information included in this release contains non-GAAP financial measures, including operating EBITDA, operating EBITDA margin, adjusted earnings and adjusted earnings per diluted share.

These non-GAAP measures should not be considered a substitute for, or superior to, financial measures and results calculated in accordance with GAAP, including net income, and reconciliations to GAAP financial statements should be carefully evaluated.

Operating EBITDA is defined as earnings before interest, taxes, depreciation, amortization, stock-based compensation, impairment of goodwill and other intangible assets, and other non-operating income and expense.  Management believes operating EBITDA provides useful information to investors regarding the Company’s results of operations.  The Company provides this measure because we believe it is useful for investors to understand the Company’s performance period to period with the exclusion of the recurring and non-recurring items identified above.  Management believes the presentation of operating EBITDA, when combined with the primary GAAP presentation of operating income, is beneficial to an investor’s understanding of the Company’s operating performance.  A reconciliation of operating EBITDA to net income is included in the tables following this release.

Adjusted earnings and adjusted earnings per diluted share for the three- and nine-month periods ending September 30, 2016 and 2015 reflect adjustments for non-recurring charges incurred in connection with the impairment of goodwill and other intangible assets, losses attributable to the Company’s extinguishment of debt as well as income or losses recognized on sale of former retail branch locations.  Management believes providing adjusted measures and excluding certain items facilitates comparisons to the Company’s prior year periods and, when combined with the primary GAAP presentation of net income and diluted net income per share, is beneficial to an investor’s understanding of the Company’s performance.  A reconciliation of adjusted earnings and adjusted earnings per diluted share to net income and diluted net income per share is included in the tables following this release.

Third Quarter 2016 Conference Call

Wabash National will conduct a conference call to review and discuss its third quarter results on October 25, 2016, 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 January 17, 2017.  Meeting access also will be available via conference call at 888-771-4371, participant code 43560432.

About Wabash National Corporation

Headquartered in Lafayette, Indiana, Wabash National Corporation (NYSE:WNC) is a diversified industrial manufacturer and North America’s leading producer of semi-trailers and liquid transportation systems. Established in 1985, the Company manufactures a diverse range of products including: dry freight and refrigerated trailers, platform trailers, bulk tank trailers, dry and refrigerated truck bodies, truck-mounted tanks, intermodal equipment, aircraft refueling equipment, structural composite panels and products, trailer aerodynamic solutions, and specialty food grade and pharmaceutical equipment. Its innovative products are sold under the following brand names: Wabash National^®, Beall^®, Benson^®, Brenner^® Tank, Bulk Tank International, DuraPlate^®, Extract Technology^®, Garsite, Progress Tank, Transcraft^®, Walker Engineered Products, and Walker Transport. Visit www.wabashnational.com to learn more.

Safe Harbor Statement

This press release contains certain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements convey the Company’s current expectations or forecasts of future events. All statements contained in this press release other than statements of historical fact are forward-looking statements. These forward-looking statements include, among other things, the Company’s outlook for trailer shipments, backlog, expectations regarding demand levels for trailers, non-trailer equipment and our other diversified products, pricing, profitability and earnings, cash flow and liquidity, opportunity to capture higher margin sales, new product innovations, and our growth and diversification strategies.  These and the Company’s other forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those implied by the forward-looking statements. Without limitation, these risks and uncertainties include the uncertain economic conditions including the possibility that customer demand may not meet our expectations, increased competition, reliance on certain customers and corporate partnerships, risks of customer pick-up delays, shortages and costs of raw materials, risks in implementing and sustaining improvements in the Company’s manufacturing capacity and cost containment, dependence on industry trends and timing and costs of indebtedness.  Readers should review and consider the various disclosures made by the Company in this press release and in the Company’s reports to its stockholders and periodic reports on Forms 10-K and 10-Q.

Media Contact:
Dana Stelsel
Corporate Communications Manager
(765) 771-5766
dana.stelsel@wabashnational.com

Investor Relations:
Mike Pettit
Vice President, Finance & Investor Relations
(765) 771-5581
michael.pettit@wabashnational.com