Attached files
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| 8-K - FORM 8-K - WABASH NATIONAL Corp | tv478148_8k.htm |
Exhibit 99.1
| 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 |
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Wabash National Corporation Announces Third Quarter 2017 Results
| · | Successfully completed the acquisition of Supreme Industries with integration efforts on schedule |
| · | GAAP and non-GAAP earnings of $0.30 per diluted share and $0.34 per diluted share, respectively |
| · | Net sales of $425 million, down 8 percent as compared to the third quarter of 2016 |
| · | Operating income of $26.6 million and 6.3 percent of net sales; excluding acquisition related costs, achieved operating income of $35.3 million and 8.3 percent of net sales |
| · | 2017 full-year shipment guidance updated to 53,500 to 55,500 trailers; full-year earnings per diluted share guidance adjusted to $1.33 to $1.37 per diluted share |
LAFAYETTE, Ind. – October 31, 2017 – 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 quarter ending September 30, 2017.
Net income for the third quarter of 2017 was $18.9 million, or $0.30 per diluted share, compared to third quarter 2016 net income of $33.4 million, or $0.51 per diluted share. Third quarter 2017 non-GAAP adjusted earnings decreased $11.7 million over the prior year period to $21.2 million, or $0.34 per diluted share. Non-GAAP adjusted earnings for the third quarter of 2017 excludes one-time acquisition expenses of $8.7 million related to the purchase of Supreme Industries, Inc. (“Supreme”) on September 27, 2017 and gains realized on the transition of former branch facilities to third-party dealers. Non-GAAP adjusted earnings for the third quarter of 2016 also excluded gains related to the transition of branch locations.
Net sales for the third quarter of 2017 were $425 million, a decrease of 8 percent as compared to the third quarter of 2016. Operating income decreased 52 percent to $26.6 million, due to lower trailer volume, compared to operating income of $54.9 million for the third quarter of 2016. Operating EBITDA, a non-GAAP measure that excludes the effects of certain recurring and non-recurring items, for the third quarter of 2017 was $46.6 million, a decrease of $20.3 million, or 30 percent, compared to Operating EBITDA for the prior year period. On a trailing twelve month basis, net sales totaled $1.7 billion, generating Operating EBITDA of $191.5 million, or 11.4 percent of net sales.
The following is a summary of select operating and financial results for the past five quarters:
| Three Months Ended | ||||||||||||||||||||
| (Dollars in thousands, except per | September 30, | December 31, | March 31, | June 30, | September 30, | |||||||||||||||
| share amounts) | 2016 | 2016 | 2017 | 2017 | 2017 | |||||||||||||||
| Net Sales | $ | 464,272 | $ | 462,057 | $ | 362,716 | $ | 435,903 | $ | 425,098 | ||||||||||
| Gross Profit Margin | 18.0 | % | 15.5 | % | 16.4 | % | 15.5 | % | 14.3 | % | ||||||||||
| Income from Operations | $ | 54,855 | $ | 40,621 | $ | 30,264 | $ | 38,668 | $ | 26,591 | ||||||||||
| Income from Operations Margin | 11.8 | % | 8.8 | % | 8.3 | % | 8.9 | % | 6.3 | % | ||||||||||
| Net Income | $ | 33,378 | $ | 23,000 | $ | 20,173 | $ | 22,945 | $ | 18,947 | ||||||||||
| Diluted EPS | $ | 0.51 | $ | 0.36 | $ | 0.32 | $ | 0.36 | $ | 0.30 | ||||||||||
| Non-GAAP Measures(1): | ||||||||||||||||||||
| Operating EBITDA | $ | 66,821 | $ | 53,606 | $ | 41,930 | $ | 49,450 | $ | 46,561 | ||||||||||
| Operating EBITDA Margin | 14.4 | % | 11.6 | % | 11.6 | % | 11.3 | % | 11.0 | % | ||||||||||
| Adjusted Earnings | $ | 32,901 | $ | 24,213 | $ | 19,517 | $ | 23,189 | $ | 21,214 | ||||||||||
| Adjusted Diluted EPS | $ | 0.50 | $ | 0.38 | $ | 0.31 | $ | 0.37 | $ | 0.34 | ||||||||||
Notes:
| (1) | See “Non-GAAP Measures” below for explanation of the non-GAAP results included above. |
Dick Giromini, chief executive officer, stated, “Following prior year record performance is never easy, especially when operating in a somewhat more challenging environment. Throw in an acquisition, and the headlines get even more muddied. That said, we are nonetheless pleased to have delivered a historically solid performance in the third quarter, but not up to the lofty standards that we have become accustomed to in the past couple years. Looking forward, we are encouraged by recent market demand trends, and excited about what next year will bring as we integrate and leverage our newest addition, Supreme Industries, into our family.”
“A number of factors in the third quarter, including shipment pick-up delays impacted by the recent hurricanes, ongoing investment in our molded structural composites start-up, and a tighter labor market, and costs associated with our acquisition of Supreme, all combined to create a veil over all of the good things that are going on in the business that set us up for a strong 2018. With backlog totaling $670 million, excluding Supreme, as of September 30, 2017, we believe we are in a solid position as the 2018 order season enters its strongest period.”
Mr. Giromini continued, “In the near term, while many of the aforementioned short-term operational issues are behind us, others will linger throughout the balance of the year. Based on the mix of these factors, we are updating our full-year guidance for trailer shipments to 53,500 to 55,500 new trailers, and adjusting our earnings guidance range to $1.33 to $1.37 per diluted share.”
2018 Outlook
“Looking forward to next year, a strengthening economy driving increased trucking demand, strong year-over-year backlog, increasing market interest in our proprietary molded structural composite technology, the addition of Supreme, and the upcoming payback from increased investment in productivity-enhancing technologies in our van operations, all have me excited about what we will deliver in 2018 and beyond. Overall demand for van trailers within our Commercial Trailer Products segment is projected to remain historically strong for next year, combined with a much-improved demand environment for tank trailers and flatbed equipment. This belief is further supported by several factors, including a growing replacement cycle for 2004-2006 dry vans, a more stringent regulatory environment influencing both carrier and driver behaviors and the continued need to refresh equipment,” Mr. Giromini explained. “In addition, we expect top- and bottom-line improvements in our Diversified Products segment due to the improving market conditions served by this segment as well as realization of various productivity improvement initiatives in both Commercial Trailer Products and Diversified Products segments. Couple these growth and performance opportunities with the addition of Supreme and our Final Mile Products segment, we currently project full-year 2018 earnings expectation of $1.55 to $1.75 per share.”
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 2017 and 2016. A complete disclosure of the results by individual segment is included in the tables following this release.
| (dollars in thousands) | Commercial Trailer Products | Diversified Products | ||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| New trailers shipped | 13,350 | 14,900 | 550 | 550 | ||||||||||||
| Net sales | $ | 339,492 | $ | 380,514 | $ | 88,850 | $ | 87,450 | ||||||||
| Gross profit | $ | 43,849 | $ | 64,681 | $ | 17,378 | $ | 18,947 | ||||||||
| Gross profit margin | 12.9 | % | 17.0 | % | 19.6 | % | 21.7 | % | ||||||||
| Income from operations | $ | 36,319 | $ | 55,043 | $ | 5,179 | $ | 6,224 | ||||||||
| Income from operations margin | 10.7 | % | 14.5 | % | 5.8 | % | 7.1 | % | ||||||||
Commercial Trailer Products’ net sales for the third quarter were $339 million, a decrease of $41 million, or 11 percent, as compared to the prior year. Gross profit margin for the third quarter decreased 410 basis points as compared to the prior year period. The year-over-year declines in net sales and gross profit margin were primarily due to lower new trailer shipments, increases in commodity costs and labor shortages resulting in higher levels of overtime to meet current production levels. Operating income decreased $18.7 million, or 34 percent, from the third quarter of last year to $36.3 million, or 10.7 percent of net sales.
Diversified Products’ net sales for the third quarter increased $1 million, or 2 percent, as compared to the prior year period primarily due to increased demand for liquid tank trailers and process systems businesses. Gross profit and gross profit margin as compared to the prior year period decreased $1.6 million and 210 basis points, respectively, as continued softness within the chemical and energy end markets for tank trailers and increases in commodity costs negatively impacted this segment. Operating income for the third quarter of 2017 was $5.2 million, or 5.8 percent of net sales, a decrease of $1.0 million compared to the same period last year.
Acquisition of Supreme
On September 27, 2017, the Company completed the previously announced acquisition of Supreme, a leading manufacturer of truck bodies, following a cash tender offer by a subsidiary of the Company for all outstanding shares of Supreme, for $21 per share. Commenting on the transaction, Mr. Giromini said, “We are excited to add the Supreme business to our Company in order to leverage the urbanization and ecommerce trends which are fueling a consumer preference for home delivery. Wabash intends to be at the forefront of the final mile evolution in the transportation market, and the addition of Supreme to our portfolio advances that strategy.” The truck body and final mile industry continues to demonstrate a healthy demand environment as the backlog of Supreme at quarter end was $70 million, representing a 32 percent increase as compared to the prior year period.
The Company financed the acquisition of Supreme and related fees and expenses using the proceeds of the Company’s offering of a $325 million aggregate principal amount senior unsecured notes due 2025 (“Senior Notes”) and available cash and cash equivalents. The Senior Notes will bear interest at a rate of 5.50% and were issued at par. As of September 30, 2017, the Company had liquidity, or cash plus available borrowings, of approximately $323 million.
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 adjusted operating income, 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, acquisition expenses, impairment of goodwill and other intangible assets 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, 2017 and 2016 reflect adjustments for charges incurred in connection with acquisition related costs, the losses attributable to the Company’s extinguishment of debt, income or losses recognized on the sale and/or closure of former Company locations, one-time executive severance costs and impairment of goodwill charges. 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.
Third quarter 2017 Conference Call
Wabash National will conduct a conference call to review and discuss its third quarter results on November 1, 2017, 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, 2018. Meeting access also will be available via conference call at 800-708-4540, participant code 45791234.
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, 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 shipments, backlog, expectations regarding demand levels for trailers, 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 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 successful 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, risks in implementing and sustaining improvements in the Company’s manufacturing operations 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 September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Net sales | $ | 425,098 | $ | 464,272 | $ | 1,223,717 | $ | 1,383,387 | ||||||||
| Cost of sales | 364,134 | 380,813 | 1,035,718 | 1,129,338 | ||||||||||||
| Gross profit | 60,964 | 83,459 | 187,999 | 254,049 | ||||||||||||
| General and administrative expenses | 16,075 | 17,206 | 53,511 | 55,093 | ||||||||||||
| Selling expenses | 5,497 | 6,415 | 17,568 | 20,421 | ||||||||||||
| Amortization of intangibles | 4,097 | 4,983 | 12,693 | 14,961 | ||||||||||||
| Acquisition Expenses | 8,704 | - | 8,704 | - | ||||||||||||
| Impairment of goodwill | - | - | - | 1,663 | ||||||||||||
| Income from operations | 26,591 | 54,855 | 95,523 | 161,911 | ||||||||||||
| Other income (expense): | ||||||||||||||||
| Interest expense | (3,187 | ) | (3,906 | ) | (9,065 | ) | (11,938 | ) | ||||||||
| Other, net | 6,271 | 830 | 7,929 | 226 | ||||||||||||
| Income before income taxes | 29,675 | 51,779 | 94,387 | 150,199 | ||||||||||||
| Income tax expense | 10,728 | 18,401 | 32,321 | 53,766 | ||||||||||||
| Net income | $ | 18,947 | $ | 33,378 | $ | 62,066 | $ | 96,433 | ||||||||
| Dividends declared per share | $ | 0.06 | $ | - | $ | 0.18 | $ | - | ||||||||
| Basic net income per share | $ | 0.32 | $ | 0.52 | $ | 1.04 | $ | 1.50 | ||||||||
| Diluted net income per share | $ | 0.30 | $ | 0.51 | $ | 0.99 | $ | 1.45 | ||||||||
| Comprehensive income | ||||||||||||||||
| Net income | $ | 18,947 | $ | 33,378 | $ | 62,066 | $ | 96,433 | ||||||||
| Foreign currency translation adjustment | 57 | (288 | ) | 829 | (944 | ) | ||||||||||
| Net comprehensive income | $ | 19,004 | $ | 33,090 | $ | 62,895 | $ | 95,489 | ||||||||
| Basic net income per share: | ||||||||||||||||
| Net income applicable to common stockholders | $ | 18,947 | $ | 33,378 | $ | 62,066 | $ | 96,433 | ||||||||
| Weighted average common shares outstanding | 58,994 | 63,604 | 59,675 | 64,488 | ||||||||||||
| Basic net income per share | $ | 0.32 | $ | 0.52 | $ | 1.04 | $ | 1.50 | ||||||||
| Diluted net income per share: | ||||||||||||||||
| Net income applicable to common stockholders | $ | 18,947 | $ | 33,378 | $ | 62,066 | $ | 96,433 | ||||||||
| Weighted average common shares outstanding | 58,994 | 63,604 | 59,675 | 64,488 | ||||||||||||
| Dilutive shares from assumed conversion of convertible senior notes | 1,701 | 1,172 | 1,713 | 743 | ||||||||||||
| Dilutive stock options and restricted stock | 1,541 | 1,256 | 1,526 | 1,222 | ||||||||||||
| Diluted weighted average common shares outstanding | 62,236 | 66,032 | 62,914 | 66,453 | ||||||||||||
| Diluted net income per share | $ | 0.30 | $ | 0.51 | $ | 0.99 | $ | 1.45 | ||||||||
WABASH NATIONAL CORPORATION
SEGMENTS AND RELATED INFORMATION
(Dollars in thousands)
(Unaudited)
| Commercial | Diversified | Corporate and | ||||||||||||||
| Three Months Ended September 30, | Trailer Products | Products | Eliminations | Consolidated | ||||||||||||
| 2017 | ||||||||||||||||
| New trailers shipped | 13,350 | 550 | - | 13,900 | ||||||||||||
| Used trailers shipped | 300 | 50 | - | 350 | ||||||||||||
| New Trailers | $ | 319,463 | $ | 35,225 | $ | - | $ | 354,688 | ||||||||
| Used Trailers | $ | 3,245 | $ | 601 | $ | - | 3,846 | |||||||||
| Components, parts and service | $ | 12,255 | $ | 27,881 | $ | (3,244 | ) | 36,892 | ||||||||
| Equipment and other | $ | 4,529 | $ | 25,143 | $ | - | 29,672 | |||||||||
| Total net external sales | $ | 339,492 | $ | 88,850 | $ | (3,244 | ) | $ | 425,098 | |||||||
| Gross profit | $ | 43,849 | $ | 17,378 | $ | (263 | ) | $ | 60,964 | |||||||
| Income (Loss) from operations | $ | 36,319 | $ | 5,179 | $ | (14,907 | ) | $ | 26,591 | |||||||
| 2016 | ||||||||||||||||
| New trailers shipped | 14,900 | 550 | - | 15,450 | ||||||||||||
| Used trailers shipped | 200 | 50 | - | 250 | ||||||||||||
| New Trailers | $ | 360,023 | $ | 32,280 | $ | (89 | ) | $ | 392,214 | |||||||
| Used Trailers | 2,923 | 621 | - | 3,544 | ||||||||||||
| Components, parts and service | 14,038 | 29,308 | (3,603 | ) | 39,743 | |||||||||||
| Equipment and other | 3,530 | 25,241 | - | 28,771 | ||||||||||||
| Total net external sales | $ | 380,514 | $ | 87,450 | $ | (3,692 | ) | $ | 464,272 | |||||||
| Gross profit | $ | 64,681 | $ | 18,947 | $ | (169 | ) | $ | 83,459 | |||||||
| Income (Loss) from operations | $ | 55,043 | $ | 6,224 | $ | (6,412 | ) | $ | 54,855 | |||||||
| Nine Months Ended September 30, | ||||||||||||||||
| 2017 | ||||||||||||||||
| New trailers shipped | 37,300 | 1,600 | - | 38,900 | ||||||||||||
| Used trailers shipped | 450 | 100 | - | 550 | ||||||||||||
| New Trailers | $ | 906,058 | $ | 99,210 | $ | - | $ | 1,005,268 | ||||||||
| Used Trailers | $ | 5,368 | $ | 2,457 | $ | - | 7,825 | |||||||||
| Components, parts and service | $ | 38,100 | $ | 93,750 | $ | (8,291 | ) | 123,559 | ||||||||
| Equipment and other | $ | 12,895 | $ | 74,170 | $ | - | 87,065 | |||||||||
| Total net external sales | $ | 962,421 | $ | 269,587 | $ | (8,291 | ) | $ | 1,223,717 | |||||||
| Gross profit | $ | 136,857 | $ | 52,120 | $ | (978 | ) | $ | 187,999 | |||||||
| Income (Loss) from operations | $ | 111,865 | $ | 14,844 | $ | (31,186 | ) | $ | 95,523 | |||||||
| 2016 | ||||||||||||||||
| New trailers shipped | 44,250 | 1,600 | - | 45,850 | ||||||||||||
| Used trailers shipped | 750 | 100 | - | 850 | ||||||||||||
| New Trailers | $ | 1,061,819 | $ | 96,285 | $ | (89 | ) | $ | 1,158,015 | |||||||
| Used Trailers | 10,202 | 2,615 | - | 12,817 | ||||||||||||
| Components, parts and service | 43,108 | 88,653 | (9,900 | ) | 121,861 | |||||||||||
| Equipment and other | 11,638 | 79,056 | - | 90,694 | ||||||||||||
| Total net external sales | $ | 1,126,767 | $ | 266,609 | $ | (9,989 | ) | $ | 1,383,387 | |||||||
| Gross profit | $ | 194,104 | $ | 62,095 | $ | (2,150 | ) | $ | 254,049 | |||||||
| Income (Loss) from operations | $ | 162,435 | $ | 23,471 | $ | (23,995 | ) | $ | 161,911 | |||||||
WABASH NATIONAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
| September 30, | December 31, | |||||||
| 2017 | 2016 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 153,702 | $ | 163,467 | ||||
| Accounts receivable | 152,603 | 153,634 | ||||||
| Inventories | 245,674 | 139,953 | ||||||
| Prepaid expenses and other | 33,453 | 24,351 | ||||||
| Total current assets | $ | 585,432 | $ | 481,405 | ||||
| Property, plant and equipment | 196,275 | 134,138 | ||||||
| Deferred income taxes | 20,265 | 20,343 | ||||||
| Goodwill | 313,626 | 148,367 | ||||||
| Intangible assets | 239,867 | 94,405 | ||||||
| Other assets | 23,662 | 20,075 | ||||||
| $ | 1,379,127 | $ | 898,733 | |||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities | ||||||||
| Current portion of long-term debt | $ | 46,081 | $ | 2,468 | ||||
| Current portion of capital lease obligations | 375 | 494 | ||||||
| Accounts payable | 129,744 | 71,338 | ||||||
| Other accrued liabilities | 112,886 | 92,314 | ||||||
| Total current liabilities | $ | 289,086 | $ | 166,614 | ||||
| Long-term debt | 504,620 | 233,465 | ||||||
| Capital lease obligations | 1,112 | 1,409 | ||||||
| Deferred income taxes | 66,879 | 499 | ||||||
| Other noncurrent liabilities | 29,702 | 24,355 | ||||||
| Stockholders' equity | $ | 487,728 | 472,391 | |||||
| $ | 1,379,127 | $ | 898,733 | |||||
WABASH NATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2017 | 2016 | |||||||
| Cash flows from operating activities | ||||||||
| Net income | $ | 62,066 | $ | 96,433 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities | ||||||||
| Depreciation | 12,709 | 12,241 | ||||||
| Amortization of intangibles | 12,693 | 14,961 | ||||||
| Net (gain) loss on the sale of assets | (8,060 | ) | 40 | |||||
| Deferred income taxes | 59 | (935 | ) | |||||
| Excess tax benefits from stock-based compensation | - | (509 | ) | |||||
| Loss on debt extinguishment | 767 | 487 | ||||||
| Stock-based compensation | 8,311 | 8,618 | ||||||
| Impairment of goodwill | - | 1,663 | ||||||
| Non-cash interest expense | 1,569 | 2,718 | ||||||
| Changes in operating assets and liabilities | ||||||||
| Accounts receivable | 26,185 | (5,117 | ) | |||||
| Inventories | (77,923 | ) | (29,587 | ) | ||||
| Prepaid expenses and other | (187 | ) | (11,021 | ) | ||||
| Accounts payable and accrued liabilities | 23,702 | 15,478 | ||||||
| Other, net | (772 | ) | 496 | |||||
| Net cash provided by operating activities | $ | 61,119 | $ | 105,966 | ||||
| Cash flows from investing activities | ||||||||
| Capital expenditures | (15,401 | ) | (15,045 | ) | ||||
| Proceeds from the sale of property, plant, and equipment | 12,608 | 14 | ||||||
| Acquisition, net of cash acquired | (323,487 | ) | - | |||||
| Other, net | 6,230 | 2,268 | ||||||
| Net cash used in investing activities | $ | (320,050 | ) | $ | (12,763 | ) | ||
| Cash flows from financing activities | ||||||||
| Proceeds from exercise of stock options | 5,781 | 2,341 | ||||||
| Borrowings under senior notes | 325,000 | - | ||||||
| Excess tax benefits from stock-based compensation | - | 509 | ||||||
| Dividends paid | (11,547 | ) | - | |||||
| Borrowings under revolving credit facilities | 520 | 455 | ||||||
| Payments under revolving credit facilities | (520 | ) | (455 | ) | ||||
| Principal payments under capital lease obligations | (416 | ) | (633 | ) | ||||
| Proceeds from issuance of term loan credit facility | 189,470 | - | ||||||
| Principal payments under term loan credit facilities | (198,058 | ) | (1,446 | ) | ||||
| Principal payments under industrial revenue bond | (446 | ) | (386 | ) | ||||
| Debt issuance costs paid | (6,472 | ) | - | |||||
| Stock repurchase | (46,633 | ) | (40,739 | ) | ||||
| Convertible senior notes repurchase | (7,513 | ) | (42,061 | ) | ||||
| Net cash used in financing activities | $ | 249,166 | $ | (82,415 | ) | |||
| Net increase in cash and cash equivalents | $ | (9,765 | ) | $ | 10,788 | |||
| Cash and cash equivalents at beginning of period | 163,467 | 178,853 | ||||||
| Cash and cash equivalents at end of period | $ | 153,702 | $ | 189,641 | ||||
WABASH NATIONAL CORPORATION
RECONCILIATION OF GAAP FINANCIAL MEASURES TO
NON-GAAP FINANCIAL MEASURES
(Dollars in thousands, except per share amounts)
(Unaudited)
| Operating EBITDA1: | ||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Net income | $ | 18,947 | $ | 33,378 | $ | 62,066 | $ | 96,433 | ||||||||
| Income tax expense | 10,728 | 18,401 | 32,321 | 53,766 | ||||||||||||
| Interest expense | 3,187 | 3,906 | 9,065 | 11,938 | ||||||||||||
| Depreciation and amortization | 8,386 | 9,052 | 25,402 | 27,202 | ||||||||||||
| Stock-based compensation | 2,881 | 2,915 | 8,311 | 8,618 | ||||||||||||
| Impairment of intangibles | - | - | - | 1,663 | ||||||||||||
| Acquisition expenses | 8,704 | - | 8,704 | - | ||||||||||||
| Other non-operating (income) expense | (6,271 | ) | (830 | ) | (7,929 | ) | (226 | ) | ||||||||
| Operating EBITDA | $ | 46,561 | $ | 66,822 | $ | 137,941 | $ | 199,394 | ||||||||
| Three Months Ended | Trailing Twelve Months | |||||||||||||||||||
| December 31, 2016 | March 31, 2017 | June 30, 2017 | September 30, 2017 | September 30, 2017 | ||||||||||||||||
| Net income | $ | 23,000 | $ | 20,173 | $ | 22,945 | $ | 18,947 | $ | 85,065 | ||||||||||
| Income tax expense | 12,217 | 8,434 | 13,160 | 10,728 | 44,539 | |||||||||||||||
| Interest expense | 3,725 | 2,990 | 2,888 | 3,187 | 12,790 | |||||||||||||||
| Depreciation and amortization | 9,565 | 8,704 | 8,315 | 8,386 | 34,970 | |||||||||||||||
| Stock-based compensation | 3,420 | 2,963 | 2,467 | 2,881 | 11,731 | |||||||||||||||
| Acquisition expenses | - | - | - | 8,704 | 8,704 | |||||||||||||||
| Other non-operating (income) expense | 1,679 | (1,333 | ) | (325 | ) | (6,271 | ) | (6,250 | ) | |||||||||||
| Operating EBITDA | $ | 53,606 | $ | 41,930 | $ | 49,450 | $ | 46,561 | $ | 191,547 | ||||||||||
| Adjusted Earnings2: | ||||||||||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||||||||||
| $ | Per Share | $ | Per Share | $ | Per Share | $ | Per Share | |||||||||||||||||||||||||
| Net Income | $ | 18,947 | $ | 0.30 | $ | 33,378 | $ | 0.51 | $ | 62,066 | $ | 0.99 | $ | 96,433 | $ | 1.45 | ||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||||||||
| Facility transactions3 | (5,165 | ) | (0.08 | ) | (740 | ) | (0.01 | ) | (6,820 | ) | (0.11 | ) | (740 | ) | (0.01 | ) | ||||||||||||||||
| Impairment of goodwill and other intangibles | - | - | - | - | - | - | 1,663 | 0.03 | ||||||||||||||||||||||||
| Loss on debt extinguishment | 3 | - | - | - | 768 | 0.01 | 487 | 0.01 | ||||||||||||||||||||||||
| Executive severance expense | - | - | - | - | 238 | - | - | - | ||||||||||||||||||||||||
| Acquisition expenses | 8,704 | 0.14 | - | - | 8,704 | 0.14 | - | - | ||||||||||||||||||||||||
| Tax effect of aforementioned items | (1,275 | ) | (0.02 | ) | 263 | - | (1,040 | ) | (0.02 | ) | (505 | ) | (0.01 | ) | ||||||||||||||||||
| Adjusted earnings | $ | 21,214 | $ | 0.34 | $ | 32,901 | $ | 0.50 | $ | 63,916 | $ | 1.02 | $ | 97,338 | $ | 1.46 | ||||||||||||||||
| Weighted Average # of Diluted Shares O/S | 62,236 | 66,032 | 62,914 | 66,453 | ||||||||||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||||||
| December 31, 2016 | March 31, 2017 | June 30, 2017 | ||||||||||||||||||||||
| $ | Per Share | $ | Per Share | $ | Per Share | |||||||||||||||||||
| Net Income | $ | 23,000 | $ | 0.36 | $ | 20,173 | $ | 0.32 | $ | 22,945 | $ | 0.36 | ||||||||||||
| Adjustments: | ||||||||||||||||||||||||
| Facility transactions3 | 450 | 0.01 | (1,665 | ) | (0.03 | ) | 18 | - | ||||||||||||||||
| Loss on debt extinguishment | 1,408 | 0.02 | 640 | 0.01 | 125 | - | ||||||||||||||||||
| Executive severance expense | 238 | - | ||||||||||||||||||||||
| Tax effect of aforementioned items | (645 | ) | (0.01 | ) | 369 | 0.01 | (137 | ) | - | |||||||||||||||
| Adjusted earnings | $ | 24,213 | $ | 0.38 | $ | 19,517 | $ | 0.31 | $ | 23,189 | $ | 0.37 | ||||||||||||
| Weighted Average # of Diluted Shares O/S | 63,701 | 63,390 | 63,207 | |||||||||||||||||||||
1Operating EBITDA is defined as earnings before interest, taxes, depreciation, amortization, stock-based compensation, acquisition expenses, impairment of goodwill and other intangibles, and other non-operating income and expense.
2Adjusted earnings and adjusted earnings per diluted share reflect adjustments for charges incurred in connection with acquistion related costs, the losses attributable to the Company's extinguishment of debt, income or losses recognized on the sale and/or closure of former Company locations, one-time executive severance costs and impairment of goodwill or other intangible asset charges.
3Facility transactions in 2016 and 2017 relate to gains and/or losses incurred for the sale or closure of our locations in Phoenix, Denver, Miami, Findlay, Dallas, and San Antonio.