Wabash Announces First Quarter 2023 Results

April 26, 2023
  • Quarterly revenue of $621.0 million
  • Record operating income of $69.9 million with operating margin of 11.3% on strong material margin, operational efficiency, and product mix
  • Record earnings per share of $1.04 , exceeding prior quarterly outlook range
  • Continued robust backlog of $3.1B
  • 2023 EPS outlook increased to $4.25 midpoint

LAFAYETTE, Ind., April 26, 2023 (GLOBE NEWSWIRE) -- Wabash (NYSE: WNC), the innovation leader of connected solutions for the transportation, logistics and distribution industries, today reported results for the quarter ended March 31, 2023.

Net sales for the first quarter 2023 of $621.0 million increased 13.6% versus the prior year quarter as the Company continued to execute well on customer demand. Consolidated gross profit was $116.0 million, or 18.7% of sales. Operating income was $69.9 million, or 11.3% of sales during the quarter. Margins exceeded prior expectations as a result of strong material margin, operational efficiency and product mix. First quarter diluted earnings per share was $1.04, which exceeded the Company's prior quarterly outlook.

Total Company backlog as of March 31, 2023 was approximately $3.1 billion, which is an increase of 31 percent versus the first quarter of 2022 and also represents an all-time first quarter record. Backlog expected to be shipped within the following 12-months was approximately $2.6 billion as of March 31, 2023.

“During the first quarter, Wabash achieved record quarterly EPS of $1.04," said Brent Yeagy, president and chief executive officer. “Our first quarter financial results are a significant achievement, and all the more exciting when viewed through the lens of strategic progress. We have purposefully created a different Wabash over the last four years. With a new strategy, new management system and a new strategic deployment process we have acted on the business to strategically position our portfolio for the future and drive to new and higher levels of business execution.”

For the full-year ending December 31, 2023, the Company maintained its revenue outlook with a range of $2.8 billion to $3.0 billion and a revenue midpoint of $2.9 billion. The Company increased its EPS guidance to a range of $4.00 to $4.50 with an EPS midpoint of $4.25.

“Our backlog remains strong and, combined with our first quarter performance, gives us confidence to guide to a record year," explained Yeagy. "With freight rates pressured and uncertainty regarding the timing of a market rebound, we expect customers to diligently manage capital spending, but remain optimistic about their prioritization of van trailers and we continue to be excited about the strength in our tank trailer, truck body and parts & services businesses. We expect the power of our first to final mile portfolio to allow us to continue posting financial performance that exceeds results from prior cycles.”

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 first quarter of 2023 and 2022. A complete disclosure of the results by individual segment is included in the tables following this release.

    Wabash National Corporation        
Three Months Ended March 31,     2023       2022          
New Units Shipped                
Trailers     11,780       11,865          
Truck bodies     3,815       3,485          
                 
    Transportation Solutions   Parts & Services
Three Months Ended March 31,     2023       2022       2023       2022  
    (Unaudited, dollars in thousands)
Net sales   $ 578,071     $ 502,065     $ 47,140     $ 46,708  
Gross profit   $ 103,604     $ 47,682     $ 12,423     $ 10,522  
Gross profit margin     17.9 %     9.5 %     26.4 %     22.5 %
Income from operations   $ 87,116     $ 31,697     $ 9,209     $ 6,789  
Income from operations margin     15.1 %     6.3 %     19.5 %     14.5 %
                                 

Transportation Solutions’ net sales for the first quarter were $578.1 million, an increase of 15.1%, as compared to the prior year quarter, as operations continued to scale up. Operating income was $87.1 million or 15.1% of sales during the quarter.

Parts & Services' net sales for the first quarter were $47.1 million, an increase of 0.9% as compared to the prior year quarter as the segment continued to achieve milestones along its path of strategic growth. Operating income was $9.2 million, or 19.5% of sales during the quarter.

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, free cash flow, adjusted operating income and margin, adjusted net income attributable to common stockholders, adjusted diluted earnings per share, adjusted segment EBITDA, and adjusted segment EBITDA margin. 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 includes noncontrolling interest and is defined as earnings before interest, taxes, depreciation, amortization, stock-based compensation, impairment and other, net, and other non-operating income and expense (including any loss on debt extinguishment charges). 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, the most comparable GAAP financial measure, is included in the tables following this release.

Free cash flow is defined as net cash provided by (used in) operating activities minus cash payments for capital expenditures. Management believes providing free cash flow is useful for investors to understand the Company’s performance and results of cash generation period to period with the exclusion of the item identified above. Management believes the presentation of free cash flow, when combined with the GAAP presentations of cash provided by operating activities, is beneficial to an investor’s understanding of the Company’s operating performance. A reconciliation of free cash flow to cash used in operating activities, the most comparable GAAP financial measure, is included in the tables following this release.

Adjusted operating income and margin, non-GAAP financial measures, exclude certain costs, expenses, other charges, gains or income that are included in the determination of operating income under U.S. GAAP, but 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. Accordingly, the Company presents adjusted operating income and margin excluding these special items to help investors evaluate our operating performance and trends in our business consistent with how management evaluates such performance and trends. Further, the Company presents adjusted operating income and margin to provide investors with a better understanding of the Company’s view of our results as compared to prior periods. Adjusted operating income margin is calculated by dividing adjusted operating income by total net sales. A reconciliation of adjusted operating income to operating income, the most comparable GAAP financial measure, is included in the tables following this release.

Adjusted net income attributable to common stockholders and adjusted diluted earnings per share reflect adjustments for non-cash impairment, debt transactions, and the impact of sales and divestitures, and the related tax effects of these adjustments. 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 net income attributable to common stockholders and adjusted diluted earnings per share to net income attributable to common stockholders and diluted earnings per share, the most comparable GAAP financial measures, are included in the tables following this release.

Adjusted segment EBITDA, a non-GAAP financial measure, includes noncontrolling interest and is calculated by adding back segment depreciation and amortization expense to segment operating income, and excludes certain costs, expenses, other charges, gains or income that are included in the determination of operating income under GAAP, but that management would not consider important in evaluating the quality of the Company’s segment operating results as they are not indicative of each segment's core operating results or may obscure trends useful in evaluating the segment's continuing activities. Adjusted segment EBITDA Margin is calculated by dividing Adjusted segment EBITDA by segment total net sales. A reconciliation of adjusted segment EBITDA to income from operations, the most comparable GAAP financial measure, is included in the tables following this release.

Information reconciling any forward-looking Operating EBITDA, Operating EBITDA Margin, Adjusted Operating Income, Adjusted Operating Income Margin, Free Cash Flow, Adjusted EBITDA Margin, and Adjusted EPS to GAAP financial measures is unavailable to us without unreasonable effort. We cannot provide reconciliations of the above noted forward looking non-GAAP measures to GAAP financial measures because certain items required for such reconciliations are outside of our control and/or cannot be reasonably predicted. Preparation of such reconciliations would require a forward-looking balance sheet, statement of income and statement of cash flows, prepared in accordance with GAAP, and such forward-looking financial statements are unavailable to us without unreasonable effort.

First Quarter 2023 Conference Call

Wabash will discuss its results during its quarterly investor conference call on Wednesday, April 26, 2023, beginning at 11:00 a.m. EDT. The call and an accompanying slide presentation will be accessible on the "Investors" section of the Company’s website at www.onewabash.com. The conference call will also be accessible by dialing (888) 440-6928, conference ID 6579482. A replay of the call will be available on the site shortly after the conclusion of the presentation.

About

Wabash (NYSE: WNC) is the visionary leader of connected solutions for the transportation, logistics and distribution industries that is Changing How the World Reaches You®. Headquartered in Lafayette, Indiana, the company enables customers to thrive by providing insight into tomorrow and delivering pragmatic solutions today to move everything from first to final mile. Wabash designs, manufactures, and services a diverse range of products, including: dry freight and refrigerated trailers, flatbed trailers, tank trailers, dry and refrigerated truck bodies, structural composite panels and products, trailer aerodynamic solutions, and specialty food grade processing equipment. Learn more at www.onewabash.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 highly cyclical nature of our business, uncertain economic conditions including the possibility that customer demand may not meet our expectations, our backlog may not reflect future sales of our products, 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, costs of indebtedness, and our ability to execute on our long-term strategic plan. 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.

 
WABASH NATIONAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited - dollars in thousands)
 
  March 31,
2023
  December 31,
2022
Assets      
Current assets:      
Cash and cash equivalents $ 68,245     $ 58,245  
Accounts receivable, net   256,598       255,577  
Inventories, net   315,643       243,870  
Prepaid expenses and other   42,434       34,927  
Total current assets   682,920       592,619  
Property, plant, and equipment, net   288,823       271,116  
Goodwill   188,422       188,434  
Intangible assets, net   96,027       99,231  
Other assets   52,955       52,123  
Total assets $ 1,309,147     $ 1,203,523  
Liabilities and Stockholders’ Equity      
Current liabilities:      
Current portion of long-term debt $     $  
Accounts payable   250,557       189,141  
Other accrued liabilities   173,844       158,327  
Total current liabilities   424,401       347,468  
Long-term debt   395,977       395,818  
Deferred income taxes   27,719       27,758  
Other non-current liabilities   35,912       34,354  
Total liabilities   884,009       805,398  
Commitments and contingencies      
Noncontrolling interest   695       512  
Wabash National Corporation stockholders’ equity:      
Common stock 200,000,000 shares authorized, $0.01 par value, 47,626,067 and 47,675,796 shares outstanding, respectively   774       766  
Additional paid-in capital   668,843       665,941  
Retained earnings   235,399       188,241  
Accumulated other comprehensive loss   (554 )     (882 )
Treasury stock at cost, 29,852,263 and 28,972,928 common shares, respectively   (480,019 )     (456,453 )
Total Wabash National Corporation stockholders' equity   424,443       397,613  
Total liabilities, noncontrolling interest, and equity $ 1,309,147     $ 1,203,523  
               

 

WABASH NATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited - dollars in thousands, except per share amounts)
 
  Three Months Ended March 31,
    2023       2022  
Net sales $ 620,952     $ 546,761  
Cost of sales   504,925       488,706  
Gross profit   116,027       58,055  
General and administrative expenses   36,040       26,332  
Selling expenses   6,884       6,209  
Amortization of intangible assets   3,203       5,039  
Impairment and other, net         340  
Income from operations   69,900       20,135  
Other income (expense):      
Interest expense   (4,994 )     (4,913 )
Other, net   387       (71 )
Other expense, net   (4,607 )     (4,984 )
Income before income tax expense   65,293       15,151  
Income tax expense   13,897       3,077  
Net income   51,396       12,074  
Net income attributable to noncontrolling interest   183        
Net income attributable to common stockholders $ 51,213     $ 12,074  
       
       
Net income attributable to common stockholders per share:      
Basic $ 1.07     $ 0.25  
Diluted $ 1.04     $ 0.24  
Weighted average common shares outstanding (in thousands):      
Basic   47,770       49,004  
Diluted   49,136       49,730  
       
Dividends declared per share $ 0.08     $ 0.08  
               

 

WABASH NATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - dollars in thousands)
 
  Three Months Ended March 31,
    2023       2022  
Cash flows from operating activities      
Net income $ 51,396     $ 12,074  
Adjustments to reconcile net income to net cash provided by (used in) operating activities      
Depreciation   6,493       8,225  
Amortization of intangibles   3,203       5,039  
Net gain on sale of property, plant and equipment         (645 )
Deferred income taxes   39       (50 )
Stock-based compensation   2,766       2,277  
Impairment         986  
Non-cash interest expense   244       213  
Accounts receivable   (1,021 )     (113,524 )
Inventories   (71,773 )     (49,113 )
Prepaid expenses and other   (3,156 )     2,913  
Accounts payable and accrued liabilities   81,735       98,284  
Other, net   (442 )     (1,246 )
Net cash provided by (used in) operating activities   69,484       (34,567 )
Cash flows from investing activities      
Cash payments for capital expenditures   (31,423 )     (9,949 )
Proceeds from the sale of assets         1,445  
Net cash used in investing activities   (31,423 )     (8,504 )
Cash flows from financing activities      
Proceeds from exercise of stock options   144       613  
Dividends paid   (4,551 )     (4,337 )
Borrowings under revolving credit facilities   43,294       56,284  
Payments under revolving credit facilities   (43,294 )     (318 )
Principal payments under finance lease obligations         (59 )
Debt issuance costs paid   (88 )     (83 )
Stock repurchases   (23,566 )     (8,013 )
Net cash (used in) provided by financing activities   (28,061 )     44,087  
Cash and cash equivalents:      
Net increase in cash, cash equivalents, and restricted cash   10,000       1,016  
Cash, cash equivalents, and restricted cash at beginning of period   58,245       71,778  
Cash, cash equivalents, and restricted cash at end of period $ 68,245     $ 72,794  
               

 

WABASH NATIONAL CORPORATION
SEGMENTS AND RELATED INFORMATION
(Unaudited - dollars in thousands)
 
    Wabash National Corporation        
Three Months Ended March 31,     2023     2022        
Units Shipped                
New trailers     11,780     11,865        
New truck bodies     3,815     3,485        
Used trailers     15     20        
                 
Three Months Ended March 31,   Transportation Solutions   Parts & Services   Corporate and
Eliminations
  Consolidated
2023                
New Trailers   $ 485,248   $ 124   $ (362 )   $ 485,010
Used Trailers         539           539
Components, parts and service         35,682           35,682
Equipment and other     92,823     10,795     (3,897 )     99,721
Total net external sales   $ 578,071   $ 47,140   $ (4,259 )   $ 620,952
Gross profit   $ 103,604   $ 12,423   $     $ 116,027
Income (loss) from operations   $ 87,116   $ 9,209   $ (26,425 )   $ 69,900
Adjusted income (loss) from operations1   $ 87,116   $ 9,209   $ (26,425 )   $ 69,900
                 
2022                
New Trailers   $ 437,963   $ 54   $ (311 )   $ 437,706
Used Trailers         569           569
Components, parts and service         33,564     (1,701 )     31,863
Equipment and other     64,102     12,521           76,623
Total net external sales   $ 502,065   $ 46,708   $ (2,012 )   $ 546,761
Gross profit   $ 47,682   $ 10,522   $ (149 )   $ 58,055
Income (loss) from operations   $ 31,697   $ 6,789   $ (18,351 )   $ 20,135
Adjusted income (loss) from operations1   $ 31,697   $ 6,789   $ (18,351 )   $ 20,135
                           

1 Adjusted operating income (loss), a non-GAAP financial measure, excludes certain costs, expenses, other charges, gains or income that are included in the determination of operating income (loss) under U.S. GAAP, but 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. Accordingly, the Company presents adjusted operating income (loss) excluding these special items to help investors evaluate our operating performance and trends in our business consistent with how management evaluates such performance and trends. Further, the Company presents adjusted operating income (loss) to provide investors with a better understanding of the Company’s view of our results as compared to prior periods.

WABASH NATIONAL CORPORATION
SEGMENT AND COMPANY FINANCIAL INFORMATION
(Unaudited - dollars in thousands)
 
Adjusted Operating Income 1 Three Months Ended
March 31,
    2023       2022  
Transportation Solutions      
Income from operations $ 87,116     $ 31,697  
Adjustments:      
N/A          
Adjusted operating income   87,116       31,697  
       
Parts & Services      
Income from operations   9,209       6,789  
Adjustments:      
N/A          
Adjusted operating income   9,209       6,789  
       
Corporate      
Loss from operations   (26,425 )     (18,351 )
Adjustments:      
N/A          
Adjusted operating loss   (26,425 )     (18,351 )
       
Consolidated      
Income from operations   69,900       20,135  
Adjustments:      
N/A          
Adjusted operating income $ 69,900     $ 20,135  
               

1 Adjusted operating income (loss), a non-GAAP financial measure, excludes certain costs, expenses, other charges, gains or income that are included in the determination of operating income (loss) under U.S. GAAP, but 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. Accordingly, the Company presents adjusted operating income (loss) excluding these special items to help investors evaluate our operating performance and trends in our business consistent with how management evaluates such performance and trends. Further, the Company presents adjusted operating income (loss) to provide investors with a better understanding of the Company’s view of our results as compared to prior periods.

WABASH NATIONAL CORPORATION
RECONCILIATION OF GAAP FINANCIAL MEASURES TO
NON-GAAP FINANCIAL MEASURES
(Unaudited - dollars in thousands, except per share amounts)
 
Operating EBITDA 1 : Three Months Ended March 31,
    2023       2022
Net income $ 51,396     $ 12,074
Income tax expense   13,897       3,077
Interest expense   4,994       4,913
Depreciation and amortization   9,696       13,264
Stock-based compensation   2,766       2,277
Impairment and other, net         340
Other, net   (387 )     71
Operating EBITDA $ 82,362     $ 36,016

 

Adjusted Net Income Attributable to Common Stockholders 2 : Three Months Ended March 31,
    2023     2022
Net income attributable to common stockholders $ 51,213   $ 12,074
Adjustments:      
N/A      
Adjusted net income attributable to common stockholders $ 51,213   $ 12,074

 

Adjusted Diluted Earnings Per Share 2 : Three Months Ended March 31,
    2023     2022
Diluted earnings per share $ 1.04   $ 0.24
Adjustments:      
N/A      
Adjusted diluted earnings per share $ 1.04   $ 0.24
       
Weighted average diluted shares outstanding (in thousands)   49,136     49,730
           

1 Operating EBITDA includes noncontrolling interest and is defined as earnings before interest, taxes, depreciation, amortization, stock-based compensation, impairment and other, net, and other non-operating income and expense (including any loss on debt extinguishment charges). 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.

2 Adjusted net income attributable to common stockholders and adjusted diluted earnings per share reflect adjustments for debt transactions and the impact of sales and divestitures, and the related tax effects of these adjustments.

WABASH NATIONAL CORPORATION
RECONCILIATION OF FREE CASH FLOW 1
(Unaudited - dollars in thousands)
 
  Three Months Ended March 31,
    2023       2022  
Net cash provided by (used in) operating activities $ 69,484     $ (34,567 )
Cash payments for capital expenditures   (31,423 )     (9,949 )
Free cash flow1 $ 38,061     $ (44,516 )
               

1 Free cash flow is defined as net cash provided by (used in) operating activities minus cash payments for capital expenditures. Management believes providing free cash flow is useful for investors to understand the Company’s performance and results of cash generation period to period with the exclusion of the item identified above. Management believes the presentation of free cash flow, when combined with the GAAP presentations of cash used in operating activities, is beneficial to an investor’s understanding of the Company’s operating performance.

WABASH NATIONAL CORPORATION
RECONCILIATION OF ADJUSTED SEGMENT EBITDA 1
AND ADJUSTED SEGMENT EBITDA MARGIN 1
(Unaudited - dollars in thousands)
 
  Transportation Solutions   Parts & Services
Three Months Ended March 31,   2023       2022       2023       2022  
Income from operations $ 87,116     $ 31,697     $ 9,209     $ 6,789  
Depreciation and amortization   8,626       11,533       497       1,036  
Impairment and other, net         (621 )           (10 )
Adjusted segment EBITDA $ 95,742     $ 42,609     $ 9,706     $ 7,815  
               
Adjusted segment EBITDA margin   16.6 %     8.5 %     20.6 %     16.7 %
                               

1 Adjusted segment EBITDA, a non-GAAP financial measure, includes noncontrolling interest and is calculated by adding back segment depreciation and amortization expense to segment operating income, and excludes certain costs, expenses, other charges, gains or income that are included in the determination of operating income under GAAP, but that management would not consider important in evaluating the quality of the Company’s segment operating results as they are not indicative of each segment's core operating results or may obscure trends useful in evaluating the segment's continuing activities. Adjusted segment EBITDA margin is calculated by dividing Adjusted segment EBITDA by segment total net sales.

Media Contact:
Dana Stelsel
Director, Communications
(765) 771-5766
[email protected]

Investor Relations:
Ryan Reed
Sr Director, Corporate Development & Investor Relations
(765) 490-5664
[email protected]


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Source: Wabash