News Details

• Net sales of $553 million is the second highest quarter in company history and a 30 percent increase from prior year
• Backlog increased 80 percent to $1.3 billion compared to the prior year
• Gross profit increased 7 percent compared to the prior year
• Third quarter GAAP and non-GAAP earnings of $0.08 and $0.29 per diluted share, respectively
• Company reaffirms full-year 2018 guidance for new trailer shipments of 60,000 to 62,000 trailers and GAAP and non-GAAP earnings of $1.41 to $1.46 per diluted share and $1.50 to $1.55 per diluted share, respectively

LAFAYETTE, Ind., Oct. 30, 2018 (GLOBE NEWSWIRE) --  Wabash National Corporation (NYSE: WNC), a diversified industrial manufacturer and a leading producer of semi-trailers, truck bodies and liquid transportation systems, today reported results for the quarter ending September 30, 2018.

Net sales for the third quarter 2018 increased 30 percent to $553 million from $425 million in the prior year quarter.  In addition to the favorable impact of the inclusion of Supreme Industries, Inc. (“Supreme”), acquired at the end of the third quarter of 2017, each of the Company’s three segments contributed to the strong top-line growth as market demand remained strong.  Gross profit increased $4.2 million and profit margin decreased 250 basis points as compared to the prior year period.  The decrease in the profit margin was due primarily to higher material and component costs, supplier disruptions leading to production inefficiencies and delays in shipments, and higher labor instability that continued to create additional cost pressures at many of the Company’s facilities.  Operating income decreased 38 percent to $16.5 million compared to operating income of $26.6 million for the third quarter 2017.  Excluding the impact of impairment charges in 2018 and acquisition expenses in 2017, operating income decreased 19 percent to $28.5 million compared to $35.3 million for the third quarter of 2017.

“The third quarter was a difficult quarter for the Company as a whole,” explained Brent Yeagy, president and chief executive officer. “All three of our reporting segments faced increasing operating pressures which negatively impacted our financial results.  Net sales and operating performance metrics were negatively impacted in the quarter by the strong freight demand market impacting shipments and availability of chassis and other components, as well as a higher commodity cost environment and the continued tight labor market in many of the locations we operate.  Despite these tough operating environments, we generated quarterly net sales of $553 million, which is 30 percent higher than the previous year and represents the second highest top-line performance in the Company’s 33-year history.  The year-over-year growth is primarily attributable to the addition of Supreme and strong market demand in all three segments.” 

Mr. Yeagy continued, “Overall, the continued strong market demand has driven our backlog to a new record level of $1.3 billion, an increase of 80 percent compared to the prior year quarter.  Trailer and truck body demand has remained strong continuing the trend from the previous quarters and supporting our belief in the growing secular demand in e-commerce and home delivery.  We continue to take steps to reduce the margin impact of U.S. tariff policy, raw material inflation, supply base disruptions and a very tight labor market on our business for the remainder of 2018 and into 2019.  Looking forward, we expect sequential improvement in the fourth quarter operating results as we manage the various challenges impacting our business, and as the core trailer business expects stronger pricing and a more favorable sales mix.  As a result, we are maintaining our full-year guidance for 2018 new trailer shipments to 60,000 to 62,000 units and GAAP and non-GAAP earnings of $1.41 to $1.46 per diluted share and $1.50 to $1.55 per diluted share, respectively.”

Net income for the third quarter 2018 was $4.7 million, or $0.08 per diluted share, compared to the third quarter 2017 net income of $18.9 million, or $0.30 per diluted share.  Third quarter 2018 non-GAAP adjusted earnings were $16.5 million, or $0.29 per diluted share, a $4.7 million decrease compared to the prior year period.  Non-GAAP adjusted earnings for the third quarter 2018 excludes a $12.0 million non-cash impairment charge related to goodwill and long-lived assets in our Diversified Products segment and discrete tax charges incurred related to the deductibility of executive compensation.  Non-GAAP adjusted earnings for the third quarter 2017 excludes $8.7 million of one-time acquisition expenses related to the purchase of Supreme and gains realized on the transition of former branch facilities to third-party dealers. 

Operating EBITDA, a non-GAAP measure that excludes the effects of certain items, for the third quarter 2018 was $41.9 million, a decrease of $4.7 million compared to operating EBITDA for the prior year period.  On a trailing twelve-month basis, net sales totaled $2.2 billion, generating operating EBITDA of $190.8 million, or 8.7 percent of net sales.

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.

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 quarter of 2018 and 2017.  Final Mile Products segment did not exist as a separate segment in the third quarter of 2017; therefore, only 2018 highlights are shown.  A complete disclosure of the results by individual segment is included in the tables following this release.

Commercial Trailer Products’ net sales for the third quarter increased $28.9 million, or 8 percent, to $368 million.  Gross profit margin for the third quarter decreased 230 basis points as compared to the prior year period primarily due to increases in material costs, higher labor costs due to tight labor markets, supplier induced production interruptions, and an unfavorable sales mix.  Operating income decreased $3.9 million, or 11 percent, from the third quarter last year to $32.5 million, or 8.8 percent of net sales.

Diversified Products’ net sales for the third quarter were $102 million, an increase of $13.5 million, or 15 percent, as compared to the prior year, due primarily to the increased demand for liquid tank trailers.  Gross profit and profit margins as compared to the prior year period decreased $0.4 million and 300 basis points, respectively, primarily due to increased material costs and labor inefficiencies, including higher overtime levels to meet strong demand requirements and supplier induced production interruptions.  Operating income in the third quarter of 2018, excluding the $12.0 million non-cash impairment charge, was $5.6 million, or 5.5 percent of net sales, representing an increase of $0.5 million as compared to the prior year period. 

Final Mile Products’ net sales for the third quarter totaled $87 million.  Gross profit and gross profit margin for the third quarter were $9.0 million and 10.3 percent, respectively.  Operating loss was $1.5 million, or 1.7 percent of net sales.  Operating results were negatively impacted during the quarter by higher material costs and chassis availability issues causing production inefficiencies and delayed shipments. 

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, charges incurred in connection with the acquisition and integration of Supreme, impairment charges, and other non-operating income and expense.  Management believes providing operating EBITDA is useful for investors to understand the Company’s performance and results of operations period to period with the exclusion of the items identified above.  Management believes the presentation of operating EBITDA, when combined with the GAAP presentations of operating income and net 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, 2018 and 2017 reflect adjustments for charges incurred in connection with acquisition and integration of Supreme, the losses attributable to the Company’s extinguishment of debt, impairment charges, executive severance costs, income or losses recognized on the sale of former branch locations, adjustments related to the Company’s deferred tax assets as a result of IRS guidance on application of the Tax Cuts and Jobs Act of 2017, and reversal of reserves for uncertain tax positions.  Management believes providing adjusted measures and excluding certain items facilitates comparisons to the Company’s prior year periods and, when combined with the 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 net income per diluted share is included in the tables following this release.

The Company provides guidance on adjusted earnings per diluted share, a non-GAAP financial measure.  Adjusted earnings per diluted share reflect adjustments for certain costs, expenses, other charges, gains or income, that management would not consider important in evaluating the quality of the Company’s operating results as they are not indicative of the Company’s core operating results or may obscure trends useful in evaluating the Company’s continuing activities.  Included in the tables following this release is a reconciliation of the non-GAAP guidance provided to the most comparable GAAP measure. 

Third Quarter 2018 Conference Call
Wabash National will conduct a conference call to review and discuss its third quarter results on October 31, 2018 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 23, 2019.  Meeting access also will be available via conference call at 844-778-4139, participant code 1851979.

About Wabash National Corporation

Headquartered in Lafayette, Indiana, Wabash National Corporation (NYSE: WNC) is a diversified industrial manufacturer and a leading producer of semi-trailers, truck bodies 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, Supreme^®, Transcraft^®, Walker Engineered Products, and Walker Transport. Learn more at www.wabashnational.com.

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, all statements regarding the Company’s outlook for trailer and truck body shipments, backlog, expectations regarding demand levels for trailers, truck bodies, non-trailer equipment and our other diversified product offerings, pricing, profitability and earnings, cash flow and liquidity, opportunity to capture higher margin sales, new product innovations, our growth and diversification strategies, our expectations for improved financial performance during the course of the year and our expectations with regards to capital allocation.  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 continued integration of Supreme into the Company’s business, adverse reactions to the transaction by customers, suppliers or strategic partners, 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 including the impact of tariffs or other international trade developments, risks in implementing and sustaining improvements in the Company’s manufacturing operations and cost containment, dependence on industry trends and timing, supplier constraints, labor costs and availability, customer acceptance of and reactions to pricing changes 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
Director, Corporate Communications
(765) 771-5766
[email protected]

Investor Relations:
Jeff Taylor
Senior Vice President, Chief Financial Officer
(765) 771-5310
[email protected]

Source: Wabash National Corporation