Form 8-K WABASH NATIONAL CORP For: Apr 27

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):

April 27, 2015

 

Wabash National Corporation

(Exact name of registrant as specified in its charter)

 

Delaware		1-10883		52-1375208
(State or other jurisdiction of incorporation)		(Commission File No.)		(IRS Employer Identification No.)

 

1000 Sagamore Parkway South, Lafayette, Indiana	47905
(Address of principal executive offices)	(Zip Code)

 

Registrant’s telephone number, including area code:
(765) 771-5300

 __________________

 

Not applicable

(Former name or former address, if changed since last report)

  

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

  

INFORMATION TO BE INCLUDED IN THE REPORT

 

Section 2 – Financial Information

 

Item 2.02 Results of Operations and Financial Condition.

 

On April 27, 2015, Wabash National Corporation (the “Company”) issued a press release announcing its financial results for the quarter ended March 31, 2015. A copy of the Registrant’s press release is attached as Exhibit 99.1 and is incorporated herein by reference.

 

Section 9 – Financial Statements and Exhibits

 

Item 9.01 Financial Statements and Exhibits.

 

(d)

Exhibits:

 

99.1 Wabash National Corporation press release dated April 27, 2015.

  

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

	WABASH NATIONAL CORPORATION
Date:  April 27, 2015	By:	/s/ Jeffery L. Taylor
		Jeffery L. Taylor
		Senior Vice President and Chief Financial Officer

  

 

EXHIBIT INDEX

 

Exhibit No.		Description
99.1		Wabash National Corporation Press Release dated April 27, 2015

 

 

 

 

Exhibit 99.1

 

Media Contact: Dana Stelsel Corporate Communications Manager (765) 771-5766 [email protected] Investor Relations: Mike Pettit Vice President – Finance and Investor Relations (765) 771-5581 [email protected]

 

FOR IMMEDIATE RELEASE

 

Wabash National Corporation Announces First Quarter 2015 Results; 

Achieves Best First Quarter Performance in Company’s 30-Year History 

and Increases Full-Year Outlook

 

·

Net sales of $438 million for first quarter 2015, up 22 percent over prior year

·

Operating income of $27.3 million for first quarter 2015, up 40 percent over prior year

·

GAAP earnings of $0.15 per diluted share improves 50 percent over prior year

·

Non-GAAP adjusted earnings per share improves 58 percent from prior year to $0.19 per diluted share

 

LAFAYETTE, Ind. – April 27, 2015 – 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 first quarter ended March 31, 2015.

 

Net income for the first quarter of 2015 was $10.5 million, or $0.15 per diluted share, compared to the first quarter 2014 net income of $7.3 million, or $0.10 per diluted share. First quarter 2015 non-GAAP adjusted earnings were $13.8 million, or $0.19 per diluted share, after excluding a $5.3 million charge related to the extinguishment of debt incurred in connection with the refinancing of the Company’s term loan credit facility in March 2015. The Company’s prior year period results included the impact of one-time costs related to a change in statutory income tax rates. Excluding the impact of this item, non-GAAP adjusted earnings for the quarter ended March 31, 2014 were $8.3 million, or $0.12 per diluted share.

 

For the first quarter of 2015, the Company’s net sales increased 22 percent to $438 million from $358 million in the prior year quarter, and operating income increased 40 percent to $27.3 million compared to operating income of $19.5 million for the first quarter of 2014. Operating EBITDA, a non-GAAP measure that excludes the effects of certain recurring and non-recurring items, for the first quarter of 2015 was $39.1 million, an increase of $8.5 million compared to Operating EBITDA for the previous year period. On a trailing twelve month basis, the Company’s net sales exceeded $1.9 billion, generating Operating EBITDA of $177.6 million, or 9.1 percent of net sales. Continued improvement in operating performance is attributable to the successful execution of the Company’s growth and diversification strategy as well as a disciplined approach to improving profitability. Through these initiatives the Company has enhanced its growth and margin profile and now derives its revenues and earnings from a broad array of products, customers, end markets and geographies.

 

 

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

 

		Three Months Ended
(Dollars in thousands, except per share		March 31,				June 30,				September 30,				December 31,				March 31,
amounts)		2014				2014				2014				2014				2015
Net Sales		$	358,120			$	486,021			$	491,697			$	527,477			$	437,597
Gross Profit Margin			13.0	%			12.7	%			12.5	%			11.9	%			13.1	%
Income from Operations		$	19,465			$	33,855			$	34,929			$	34,137			$	27,263
Net Income		$	7,296			$	16,239			$	18,307			$	19,088			$	10,474
Diluted EPS		$	0.10			$	0.23			$	0.25			$	0.27			$	0.15
Non-GAAP Measures(1):
Operating EBITDA		$	30,618			$	45,664			$	46,619			$	46,147			$	39,135
Operating EBITDA Margin			8.5	%			9.4	%			9.5	%			8.7	%			8.9	%
Adjusted Earnings		$	8,337			$	16,924			$	18,630			$	19,088			$	13,788
Adjusted Diluted EPS		$	0.12			$	0.24			$	0.26			$	0.27			$	0.19

 

Notes:

(1)

See “Non-GAAP Measures” below for explanation of the non-GAAP results included above.

 

Dick Giromini, president and chief executive officer, stated, “We are very pleased to deliver first quarter results that were the best in the Company’s history achieving a record first quarter performance for net sales, gross profit and income from operations. Momentum generated coming out of 2014 has accelerated with strong operational execution throughout the business, combined with a continuing strong demand environment.”

 

Mr. Giromini continued, “New trailer shipments for the first quarter were approximately 14,350, exceeding our previous guidance of 12,000 to 13,000 trailers as a result of strong customer demand. The year-over-year increases in total trailer demand now being projected by both ACT Research and FTR, along with our record backlog of $1.2 billion, further support the continuing strength in the trailer industry and provides us even greater confidence that 2015 will prove to be our fourth consecutive year of record performance. As such, we are now increasing our full-year shipment and adjusted earnings guidance to 62,000 to 66,000 trailers and $1.15 to $1.25 per diluted share, respectively.”

 

 

First 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 first quarter of 2015 and 2014, respectively. A complete disclosure of the results by individual segment is included in the tables following this release.

 

(dollars in thousands)		Commercial				Diversified
		Trailer Products				Products				Retail
Three months ended March 31,
2015
New trailers shipped			13,600				850				750
Net sales		$	314,504			$	103,992			$	43,140
Gross profit		$	29,633			$	23,373			$	4,853
Gross profit margin			9.4	%			22.5	%			11.2	%
Income from operations		$	22,770			$	10,611			$	1,126
Income from operations margin			7.2	%			10.2	%			2.6	%
2014
New trailers shipped			9,250				800				800
Net sales		$	227,951			$	108,053			$	45,636
Gross profit		$	14,995			$	25,754			$	5,381
Gross profit margin			6.6	%			23.8	%			11.8	%
Income from operations		$	8,760			$	13,397			$	1,050
Income from operations margin			3.8	%			12.4	%			2.3	%

 

Commercial Trailer Products’ net sales increased $87 million, or 38.0 percent, on shipments of 13,600 trailers, or 4,350 more trailers than the prior year period. This increase in revenue was primarily due to the 47.0 percent increase in trailer shipments during the quarter, partially offset by a higher mix of pup trailers and converter dollies which carry a lower selling price. Driven by higher volumes, an improved pricing environment and continued operational improvements, gross profit and gross profit margin increased $14.6 million and 280 basis points, respectively, as compared to the same period last year. Operating income increased by $14.0 million to $22.8 million from the first quarter last year.

 

Diversified Products’ net sales decreased $4 million, or 3.8 percent, as increases in tank trailer shipments as compared to the previous year period were more than offset by the reduced demand for non-trailer truck mounted equipment and timing of shipments for engineered products. Gross profit and operating income declined $2.4 million and $2.8 million, respectively, compared to the prior year period, primarily due to lower overall net sales and continued pricing pressures on certain products. First quarter gross profit margin of 22.5 percent represents the highest recorded for this segment since the 23.8 percent gross profit margin recorded in the first quarter of 2014.

 

Retail’s net sales of $43 million decreased 5.5 percent compared with the prior year period, primarily due to fewer retail locations resulting from the transition of three West Coast branches to independent dealers in May 2014 as demand for trailers and parts and service remained healthy throughout the quarter. On a same store basis, net sales increased $5 million, or 14.0 percent, compared with the prior year period. Gross profit margin of 11.2 percent declined slightly from 11.8 percent in the prior year period primarily due to product mix with a higher percentage of lower-margined new trailer sales. Operating income of $1.1 million remained consistent from the same period last year and increased $0.3 million on a same store basis.

 

 

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 contain 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, and other non-operating income and expense. Management believes Operating EBITDA provides useful information to investors regarding our results of operations. The Company provides this measure because we believe it is useful for investors to understand our 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 reflect adjustments for non-recurring charges related losses incurred in connection with the Company’s extinguishment of debt and revaluation of deferred income tax assets due to changes in statutory tax rates. Management believes providing this measure and excluding these items facilitate 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.

 

First Quarter 2015 Conference Call

Wabash National will conduct a conference call to review and discuss its first quarter results on April 28, 2015, 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 July 21, 2015. Meeting access also will be available via conference call at 888-771-4371, participant code 39454984.

 

 

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 specializes in the design and production of dry freight vans, refrigerated vans, platform trailers, liquid tank trailers, intermodal equipment, engineered products, and composite products. Its innovative products are sold under the following brand names: Wabash National^®, Transcraft^®, Benson^®, DuraPlate^®, ArcticLite^®, Walker Transport, Walker Defense Group, Walker Barrier Systems, Walker Engineered Products, Brenner^® Tank, Beall^®, Garsite, Progress Tank, TST^®, Bulk Tank International and Extract Technology^®. To learn more, visit 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, statements regarding the Company’s outlook for trailer shipments, backlog, expectations regarding demand levels for trailers, non-trailer truck mounted equipment and our other engineered products, profitability and earnings, opportunity to capture higher margin sales, and the expectations regarding the Company’s 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 demand expectations may not result in order increases for us, 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.

 

# # #

 

 

WABASH NATIONAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except per share amounts)

(Unaudited)

 

		Three Months Ended March 31,
		2015				2014
Net sales		$	437,597			$	358,120
Cost of sales			380,400				311,448
Gross profit			57,197				46,672
General and administrative expenses			18,051				14,472
Selling expenses			6,569				7,264
Amortization of intangibles			5,314				5,471
Income from operations			27,263				19,465
Other income (expense):
Interest expense			(5,173	)			(5,717	)
Loss on debt extinguishment			(5,286	)			-
Other, net			(96	)			32
Income before income taxes			16,708				13,780
Income tax expense			6,234				6,484
Net income		$	10,474			$	7,296
Basic net income per share		$	0.15			$	0.11
Diluted net income per share		$	0.15			$	0.10
Comprehensive income
Net income		$	10,474			$	7,296
Foreign currency translation adjustment			(303	)			161
Net comprehensive income		$	10,171			$	7,457
Basic net income per share:
Net income applicable to common stockholders		$	10,474			$	7,296
Undistributed earnings allocated to participating securities			-				(61	)
Net income applicable to common stockholders excluding amounts
applicable to participating securities		$	10,474			$	7,235
Weighted average common shares outstanding			68,731				68,669
Basic net income per share		$	0.15			$	0.11
Diluted net income per share:
Net income applicable to common stockholders		$	10,474			$	7,296
Undistributed earnings allocated to participating securities			-				(61	)
Net income applicable to common stockholders excluding
amounts applicable to participating securities		$	10,474			$	7,235
Weighted average common shares outstanding			68,731				68,669
Dilutive shares from assumed conversion of convertible senior notes			1,729				1,591
Dilutive stock options and restricted stock			1,097				828
Diluted weighted average common shares outstanding			71,557				71,088
Diluted net income per share		$	0.15			$	0.10

 

 

 

WABASH NATIONAL CORPORATION

SEGMENTS AND RELATED INFORMATION

(Dollars in thousands)

(Unaudited)

 

		Commercial				Diversified								Corporate and
Three Months Ended March 31,		Trailer Products				Products				Retail				Eliminations				Consolidated
2015
New trailers shipped			13,600				850				750				(850	)			14,350
Used trailers shipped			100				50				200				-				350
New Trailers		$	307,680			$	54,017			$	19,857			$	(20,283	)		$	361,271
Used Trailers			2,170				1,169				2,571				(327	)			5,583
Components, parts and service			1,392				23,394				19,941				(2,911	)			41,816
Equipment and other			3,262				25,412				771				(518	)			28,927
Total net external sales		$	314,504			$	103,992			$	43,140			$	(24,039	)		$	437,597
Gross profit		$	29,633			$	23,373			$	4,853			$	(662	)		$	57,197
Income (Loss) from operations		$	22,770			$	10,611			$	1,126			$	(7,244	)		$	27,263
2014
New trailers shipped			9,250				800				800				(900	)			9,950
Used trailers shipped			1,700				50				400				-				2,150
New Trailers		$	213,436			$	54,847			$	20,271			$	(20,436	)		$	268,118
Used Trailers			11,248				1,178				3,639				-				16,065
Components, parts and service			617				23,210				20,973				(3,102	)			41,698
Equipment and other			2,650				28,818				753				18				32,239
Total net external sales		$	227,951			$	108,053			$	45,636			$	(23,520	)		$	358,120
Gross profit		$	14,995			$	25,754			$	5,381			$	542			$	46,672
Income (Loss) from operations		$	8,760			$	13,397			$	1,050			$	(3,742	)		$	19,465

 

 

WABASH NATIONAL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

 

		March 31,				December 31,
		2015				2014
		(Unaudited)
ASSETS
Current assets
Cash and cash equivalents		$	125,609			$	146,113
Accounts receivable			156,892				135,206
Inventories			243,002				177,144
Deferred income taxes			15,437				16,993
Prepaid expenses and other			6,987				10,203
Total current assets		$	547,927			$	485,659
Property, plant and equipment			141,247				142,892
Deferred income taxes			770				-
Goodwill			149,690				149,603
Intangible assets			131,641				137,100
Other assets			13,697				13,397
		$	984,972			$	928,651
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current portion of long-term debt		$	2,429			$	496
Current portion of capital lease obligations			1,399				1,458
Accounts payable			142,907				96,213
Other accrued liabilities			99,621				88,690
Total current liabilities		$	246,356			$	186,857
Long-term debt			326,629				324,777
Capital lease obligations			5,457				5,796
Deferred income taxes			3,205				2,349
Other noncurrent liabilities			19,111				18,040
Commitments and contingencies
Stockholders' equity			384,214				390,832
		$	984,972			$	928,651

 

 

WABASH NATIONAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)

 

			Three Months Ended March 31,
			2015				2014
Cash flows from operating activities
Net income		$	10,474			$	7,296
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Depreciation			4,138				4,042
Amortization of intangibles			5,314				5,471
Deferred income taxes			1,642				5,988
Loss on debt extinguishment			5,286				-
Stock-based compensation			2,420				1,640
Accretion of debt discount			1,185				1,195
Changes in operating assets and liabilities
Accounts receivable			(21,686	)			1,494
Inventories			(65,843	)			(78,742	)
Prepaid expenses and other			3,216				(1,565	)
Accounts payable and accrued liabilities			57,625				8,815
Other, net			458				311
Net cash provided by (used in) operating activities		$	4,229			$	(44,055	)
Cash flows from investing activities
Capital expenditures			(2,975	)			(2,078	)
Net cash used in investing activities		$	(2,975	)		$	(2,078	)
Cash flows from financing activities
Proceeds from exercise of stock options			719				1,517
Borrowings under revolving credit facilities			163				175
Payments under revolving credit facilities			(163	)			(175	)
Principal payments under capital lease obligations			(432	)			(603	)
Proceeds from issuance of term loan credit facility			192,845				-
Principal payments under term loan credit facility			(192,845	)			(693	)
Principal payments under industrial revenue bond			(122	)			(117	)
Debt issuance costs paid			(1,994	)			-
Stock repurchase			(19,929	)			(1,497	)
Net cash used in financing activities		$	(21,758	)		$	(1,393	)
Net decrease in cash and cash equivalents		$	(20,504	)		$	(47,526	)
Cash and cash equivalents at beginning of period			146,113				113,262
Cash and cash equivalents at end of period		$	125,609			$	65,736

 

 

WABASH NATIONAL CORPORATION

RECONCILIATION OF GAAP FINANCIAL MEASURES TO

NON-GAAP FINANCIAL MEASURES

(Dollars in thousands, except per share amounts)

(Unaudited)

 

Operating EBITDA:

 

		Three Months Ended March 31,
		2015				2014
Net income		$	10,474			$	7,296
Income tax expense			6,234				6,484
Interest expense			5,173				5,717
Depreciation and amortization			9,452				9,513
Stock-based compensation			2,420				1,640
Other non-operating income (expense)			5,382				(32	)
Operating EBITDA		$	39,135			$	30,618

 

		Three Months Ended
		June 30, 2014				September 30, 2014				December 31, 2014
Net income		$	16,239			$	18,307			$	19,088
Income tax expense			10,835				10,558				9,655
Interest expense			5,733				5,454				5,261
Depreciation and amortization			9,851				9,779				9,686
Stock-based compensation			1,958				1,911				2,324
Other non-operating expense			1,048				610				133
Operating EBITDA		$	45,664			$	46,619			$	46,147

 

Adjusted Earnings:

 

		Three Months Ended March 31,
		2015								2014
		$				Per Share				$				Per Share
Net Income		$	10,474			$	0.15			$	7,296			$	0.10
Adjustments:
Revaluation of net deferred income tax assets
due to changes in statutory tax rates			-				-				1,041				0.02
Loss on debt extinguishment, net of taxes			3,314				0.05				-				-
Adjusted earnings		$	13,788			$	0.19			$	8,337			$	0.12
Weighted Average # of Diluted Shares O/S			71,557								71,088

 

		Three Months Ended
		June 30, 2014								September 30, 2014								December 31, 2014
		$				Per Share				$				Per Share				$				Per Share
Net Income		$	16,239			$	0.23			$	18,307			$	0.25			$	19,088			$	0.27
Adjustments:
Loss on debt extinguishment, net of taxes			320				-				323				-				-				-
Loss on transitioning Retail branch locations, net of taxes			365				0.01				-				-				-				-
Adjusted earnings		$	16,924			$	0.24			$	18,630			$	0.26			$	19,088			$	0.27
Weighted Average # of Diluted Shares O/S			71,557								71,919								69,685

 

 

 

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