Attached files
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| 8-K - 8-K - WABASH NATIONAL Corp | wnc201912318k.htm |
Media Contact:
Dana Stelsel
Director, Corporate Communications
(765) 771-5766
dana.stelsel@wabashnational.com
Investor Relations:
Ryan Reed
Director of Investor Relations
(765) 771-5805
ryan.reed@wabashnational.com
Wabash National Corporation Announces Fourth Quarter and Full Year 2019 Results
• | Full year revenue of $2.3 billion is highest in company history; operating income, net income and EPS increase vs 2018 |
• | Strong demand drives $579.0 million in Q4 2019 revenue |
• | Q4 2019 earnings per diluted share of $0.34 |
• | Strong cash generation continued in 2019 |
• | Q4 2019 backlog shows sequential increase growing to $1.1 billion |
• | 2020 EPS outlook initiated at $1.20 per diluted share; range of $1.10 to $1.30 |
LAFAYETTE, Ind. – February 12, 2020 – Wabash National Corporation (NYSE: WNC), the innovation leader of engineered solutions for the transportation, logistics and distribution industries, today reported results for the full year and quarter ended December 31, 2019.
Net sales for the fourth quarter 2019 were $579.0 million while operating income was $31.8 million or 5.5 percent of net sales. For the full year of 2019, total revenue reached a new record of $2.3 billion while generating operating income of $142.8 million or 6.2 percent of net sales.
Net income for the fourth quarter 2019 was $18.4 million, or $0.34 per diluted share. For the full year of 2019, net income was $89.6 million or earnings per diluted share of $1.62. Operating EBITDA, a non-GAAP measure that excludes the effects of certain items, for the fourth quarter 2019 was $44.2 million, or 7.6 percent of net sales, and full year operating EBITDA of $194.2 million, or 8.4 percent of net sales.
“I’m pleased to achieve a new all-time sales record of $2.3 billion in 2019 while also generating stronger operating income, net income and EPS versus the prior year," explained Brent Yeagy, president and chief executive officer. "Additionally, full year cash generation was strong and I’m excited to add to our streak of what is now 7 consecutive years of free cash conversion of 100% or greater.”
Outlook
For the full year ending December 31, 2020, the company has issued guidance of $2.05 to $2.15 billion in sales and an earnings per diluted share midpoint of $1.20 with a range of $1.10 to $1.30.
Mr. Yeagy continued, “Moderating trailer demand in 2020 has been expected for some time and we've taken a proactive approach toward strengthening our balance sheet and planning to execute in such an environment. I am confident in our team's ability to succeed in any phase of the cycle and also to continue moving forward with our strategic initiatives under the guidance of the Wabash Management System.”
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 fourth quarter of 2019 and 2018. A complete disclosure of the results by individual segment is included in the tables following this release.
Commercial Trailer Products | Diversified Products | Final Mile Products | ||||||||||||||||||||||
Three Months Ended December 31, | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||
New trailers shipped | 14,300 | 16,750 | 650 | 750 | — | — | ||||||||||||||||||
Net sales | $ | 399,288 | $ | 438,667 | $ | 94,661 | $ | 102,322 | $ | 92,740 | $ | 74,532 | ||||||||||||
Gross profit | $ | 50,384 | $ | 45,170 | $ | 16,324 | $ | 17,420 | $ | 6,239 | $ | 7,362 | ||||||||||||
Gross profit margin | 12.6 | % | 10.3 | % | 17.2 | % | 17.0 | % | 6.7 | % | 9.9 | % | ||||||||||||
Income (loss) from operations | $ | 43,135 | $ | 39,075 | $ | 5,610 | $ | (6,111 | ) | $ | (5,914 | ) | $ | (1,463 | ) | |||||||||
Income (loss) from operations margin | 10.8 | % | 8.9 | % | 5.9 | % | (6.0 | )% | (6.4 | )% | (2.0 | )% | ||||||||||||
Commercial Trailer Products’ net sales for the fourth quarter totaled $399.3 million, a decrease of $39.4 million, or 9.0 percent. Gross profit margin for the fourth quarter increased 230 basis points as compared to the prior year period primarily due to successful efforts to recover cost pressures as well as product and customer mix. Operating income increased $4.1 million, or 10.4 percent, from the fourth quarter last year to $43.1 million, or 10.8 percent of net sales.
Diversified Products’ net sales for the fourth quarter were $94.7 million, a decrease of $7.7 million, or 7.5 percent, as compared to the prior year quarter, due primarily to the impact from the divestiture of a business. Gross profit margin as compared to the prior year period increased 20 basis points, primarily due to product and customer mix. Operating income in the fourth quarter of 2019 was $5.6 million, or 5.9 percent of net sales, compared to a loss of $6.1 million on a GAAP basis or income of $6.9 million on a non-GAAP Adjusted basis during the fourth quarter 2018.
Final Mile Products’ net sales for the fourth quarter totaled $92.7 million, an increase of $18.2 million or 24.4 percent. Gross profit and gross profit margin for the fourth quarter were $6.2 million and 6.7 percent, respectively. Operating loss during the fourth quarter was $5.9 million, or 6.4 percent of net sales. While the business saw continued growth, operating results were negatively impacted during the quarter by operational inefficiencies as the business encountered headwinds relating to demand fluctuations and product mix.
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, adjusted operating income, adjusted net income 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 and related 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 Segment EBITDA, a non-GAAP financial measure, is calculated by adding back segment depreciation and amortization expense to segment operating income (loss), 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.
Adjusted operating income, a non-GAAP financial measure, excludes 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 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 to provide investors with a better understanding of the Company’s view of our results as compared to prior periods. A reconciliation of adjusted operating income to operating income, the most comparable GAAP financial measure, is included in the tables following this press release.
Adjusted net income and adjusted earnings per diluted share, each reflect adjustments for income or losses recognized on the sale and/or closure of former Company locations, the losses attributable to the Company's extinguishment of debt, a non-cash impairment of assets, acquisition expenses and related charges, and tax reform and other discrete tax 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 each of adjusted net income and adjusted earnings per diluted share to net income and net income per diluted share is included in the tables following this release.
Fourth Quarter 2019 Conference Call
Wabash National will discuss its results during its quarterly investor conference call on Wednesday, February 12th, beginning at 10:00 a.m. EST. The call and an accompanying slide presentation will be accessible on the "Investors" section of the Company’s website www.wabashnational.com. The conference call will also be accessible by dialing 844-778-4139, participant code 5877386. A replay of the call will be available on the site shortly after the conclusion of the presentation.
About Wabash National Corporation
As the innovation leader of engineered solutions for the transportation, logistics and distribution industries, Wabash National Corporation (NYSE:WNC) is changing how the world reaches you. Headquartered in Lafayette, Indiana, the company’s mission is to enable customers to succeed with breakthrough ideas and solutions that help them move everything from first to final mile. Wabash National designs and manufactures a diverse range of products, including: dry freight and refrigerated trailers, platform trailers, bulk tank trailers, dry and refrigerated truck bodies, 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®, 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.
# # #
WABASH NATIONAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited - dollars in thousands)
December 31, 2019 | December 31, 2018 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 140,516 | $ | 132,690 | |||
Accounts receivable, net | 172,737 | 181,064 | |||||
Inventories | 186,914 | 184,404 | |||||
Prepaid expenses and other | 41,222 | 51,261 | |||||
Total current assets | 541,389 | 549,419 | |||||
Property, plant, and equipment, net | 221,346 | 206,991 | |||||
Goodwill | 311,026 | 311,084 | |||||
Intangible assets | 189,898 | 210,328 | |||||
Other assets | 40,932 | 26,571 | |||||
Total assets | $ | 1,304,591 | $ | 1,304,393 | |||
Liabilities and Stockholders' Equity | |||||||
Current liabilities: | |||||||
Current portion of long-term debt | $ | — | $ | 1,880 | |||
Current portion of finance lease obligations | 327 | 299 | |||||
Accounts payable | 134,821 | 153,113 | |||||
Other accrued liabilities | 124,230 | 116,384 | |||||
Total current liabilities | 259,378 | 271,676 | |||||
Long-term debt | 455,386 | 503,018 | |||||
Finance lease obligations | 378 | 714 | |||||
Deferred income taxes | 37,576 | 34,905 | |||||
Other non-current liabilities | 30,885 | 20,231 | |||||
Total liabilities | 783,603 | 830,544 | |||||
Commitments and contingencies | |||||||
Stockholders' equity: | |||||||
Common stock, $0.01 par value: 200,000,000 shares authorized; 53,473,620 and 55,135,788 shares outstanding, respectively | 750 | 744 | |||||
Additional paid-in capital | 638,917 | 629,039 | |||||
Retained earnings | 221,841 | 150,244 | |||||
Accumulated other comprehensive loss | (3,978 | ) | (3,343 | ) | |||
Treasury stock, at cost: 21,640,109 and 19,372,735 common shares, respectively | (336,542 | ) | (302,835 | ) | |||
Total stockholders' equity | 520,988 | 473,849 | |||||
Total liabilities and stockholders' equity | $ | 1,304,591 | $ | 1,304,393 | |||
WABASH NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited - dollars in thousands, except per share amounts)
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net sales | $ | 579,001 | $ | 610,196 | $ | 2,319,136 | $ | 2,267,278 | |||||||
Cost of sales | 506,694 | 541,140 | 2,012,754 | 1,983,627 | |||||||||||
Gross profit | 72,307 | 69,056 | 306,382 | 283,651 | |||||||||||
General and administrative expenses | 26,272 | 21,194 | 108,274 | 95,114 | |||||||||||
Selling expenses | 9,136 | 7,455 | 34,851 | 33,046 | |||||||||||
Amortization of intangible assets | 5,118 | 4,650 | 20,471 | 19,468 | |||||||||||
Acquisition expenses | — | — | — | 68 | |||||||||||
Impairment | — | 12,979 | — | 24,968 | |||||||||||
Income from operations | 31,781 | 22,778 | 142,786 | 110,987 | |||||||||||
Other income (expense): | |||||||||||||||
Interest expense | (6,517 | ) | (7,110 | ) | (27,340 | ) | (28,759 | ) | |||||||
Other, net | 40 | 1,290 | 2,285 | 13,776 | |||||||||||
Other expense, net | (6,477 | ) | (5,820 | ) | (25,055 | ) | (14,983 | ) | |||||||
Income before income tax | 25,304 | 16,958 | 117,731 | 96,004 | |||||||||||
Income tax expense | 6,929 | 5,374 | 28,156 | 26,583 | |||||||||||
Net income | $ | 18,375 | $ | 11,584 | $ | 89,575 | $ | 69,421 | |||||||
Net income per share: | |||||||||||||||
Basic | $ | 0.34 | $ | 0.21 | $ | 1.64 | $ | 1.22 | |||||||
Diluted | $ | 0.34 | $ | 0.21 | $ | 1.62 | $ | 1.19 | |||||||
Weighted average common shares outstanding (in thousands): | |||||||||||||||
Basic | 53,917 | 55,543 | 54,695 | 56,996 | |||||||||||
Diluted | 54,613 | 56,290 | 55,290 | 58,430 | |||||||||||
Dividends declared per share | $ | 0.080 | $ | 0.080 | $ | 0.320 | $ | 0.305 | |||||||
WABASH NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - dollars in thousands)
Year Ended December 31, | |||||||
2019 | 2018 | ||||||
Cash flows from operating activities | |||||||
Net income | $ | 89,575 | $ | 69,421 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation | 21,886 | 21,215 | |||||
Amortization of intangibles | 20,471 | 19,468 | |||||
Net gain on sale of property, plant and equipment | (109 | ) | (10,148 | ) | |||
Loss on debt extinguishment | 165 | 280 | |||||
Deferred income taxes | 2,671 | (2,976 | ) | ||||
Stock-based compensation | 9,036 | 10,169 | |||||
Non-cash interest expense | 1,045 | 1,745 | |||||
Impairment of goodwill and other long-lived assets | — | 24,968 | |||||
Accounts receivable | 8,327 | (39,539 | ) | ||||
Inventories | (2,510 | ) | (18,713 | ) | |||
Prepaid expenses and other | (2,536 | ) | 4,548 | ||||
Accounts payable and accrued liabilities | (2,887 | ) | 32,653 | ||||
Other, net | 1,150 | (620 | ) | ||||
Net cash provided by operating activities | 146,284 | 112,471 | |||||
Cash flows from investing activities | |||||||
Capital expenditures | (37,645 | ) | (34,009 | ) | |||
Proceeds from sale of property, plant and equipment | 785 | 17,776 | |||||
Acquisitions, net of cash acquired | — | — | |||||
Other, net | — | 3,060 | |||||
Net cash used in investing activities | (36,860 | ) | (13,173 | ) | |||
Cash flows from financing activities | |||||||
Proceeds from exercise of stock options | 848 | 961 | |||||
Borrowings under senior notes | — | — | |||||
Dividends paid | (17,797 | ) | (17,768 | ) | |||
Borrowings under revolving credit facilities | 619 | 937 | |||||
Payments under revolving credit facilities | (619 | ) | (937 | ) | |||
Principal payments under finance lease obligations | (308 | ) | (290 | ) | |||
Proceeds from issuance of term loan credit facility | — | — | |||||
Principal payments under term loan credit facility | (50,470 | ) | (1,880 | ) | |||
Principal payments under industrial revenue bond | — | (93 | ) | ||||
Debt issuance costs paid | (164 | ) | (476 | ) | |||
Convertible senior notes repurchase | — | (80,200 | ) | ||||
Stock repurchase | (33,707 | ) | (58,383 | ) | |||
Net cash (used in) provided by financing activities | (101,598 | ) | (158,129 | ) | |||
Cash and cash equivalents: | |||||||
Net increase (decrease) in cash, cash equivalents, and restricted cash | 7,826 | (58,831 | ) | ||||
Cash, cash equivalents, and restricted cash at beginning of year | 132,690 | 191,521 | |||||
Cash, cash equivalents, and restricted cash at end of year | $ | 140,516 | $ | 132,690 | |||
WABASH NATIONAL CORPORATION
SEGMENTS AND RELATED INFORMATION
(Unaudited - dollars in thousands)
Three Months Ended December 31, | Commercial Trailer Products | Diversified Products | Final Mile Products | Corporate and Eliminations | Consolidated | |||||||||||||||
2019 | ||||||||||||||||||||
New trailers shipped | 14,300 | 650 | — | — | 14,950 | |||||||||||||||
Used trailers shipped | 25 | 15 | — | — | 40 | |||||||||||||||
New Trailers | $ | 386,037 | $ | 51,222 | $ | — | $ | — | $ | 437,259 | ||||||||||
Used Trailers | 199 | 301 | — | — | 500 | |||||||||||||||
Components, parts and service | 9,350 | 24,343 | 2,858 | (7,447 | ) | 29,104 | ||||||||||||||
Equipment and other | 3,702 | 18,795 | 89,882 | (241 | ) | 112,138 | ||||||||||||||
Total net external sales | $ | 399,288 | $ | 94,661 | $ | 92,740 | $ | (7,688 | ) | $ | 579,001 | |||||||||
Gross profit | $ | 50,384 | $ | 16,324 | $ | 6,239 | $ | (640 | ) | $ | 72,307 | |||||||||
Income (Loss) from operations | $ | 43,135 | $ | 5,610 | $ | (5,914 | ) | $ | (11,050 | ) | $ | 31,781 | ||||||||
2018 | ||||||||||||||||||||
New trailers shipped | 16,750 | 750 | — | — | 17,500 | |||||||||||||||
Used trailers shipped | 100 | 50 | — | — | 150 | |||||||||||||||
New Trailers | $ | 424,131 | $ | 48,950 | $ | — | $ | — | $ | 473,081 | ||||||||||
Used Trailers | 824 | 1,025 | — | — | 1,849 | |||||||||||||||
Components, parts and service | 9,214 | 27,141 | 2,628 | (5,282 | ) | 33,701 | ||||||||||||||
Equipment and other | 4,498 | 25,206 | 71,904 | (43 | ) | 101,565 | ||||||||||||||
Total net external sales | $ | 438,667 | $ | 102,322 | $ | 74,532 | $ | (5,325 | ) | $ | 610,196 | |||||||||
Gross profit | $ | 45,170 | $ | 17,420 | $ | 7,362 | $ | (896 | ) | $ | 69,056 | |||||||||
Income (Loss) from operations | $ | 39,075 | $ | (6,111 | ) | $ | (1,463 | ) | $ | (8,723 | ) | $ | 22,778 | |||||||
Twelve Months Ended December 31, | Commercial Trailer Products | Diversified Products | Final Mile Products | Corporate and Eliminations | Consolidated | |||||||||||||||
2019 | ||||||||||||||||||||
New trailers shipped | 54,650 | 2,850 | — | — | 57,500 | |||||||||||||||
Used trailers shipped | 75 | 75 | — | — | 150 | |||||||||||||||
New Trailers | $ | 1,464,636 | $ | 198,043 | $ | — | $ | — | $ | 1,662,679 | ||||||||||
Used Trailers | 435 | 2,044 | — | — | 2,479 | |||||||||||||||
Components, parts and service | 40,344 | 113,024 | 15,023 | (27,902 | ) | 140,489 | ||||||||||||||
Equipment and other | 16,126 | 71,405 | 426,887 | (929 | ) | 513,489 | ||||||||||||||
Total net external sales | $ | 1,521,541 | $ | 384,516 | $ | 441,910 | $ | (28,831 | ) | $ | 2,319,136 | |||||||||
Gross profit | $ | 177,190 | $ | 74,588 | $ | 57,815 | $ | (3,211 | ) | $ | 306,382 | |||||||||
Income (Loss) from operations | $ | 145,877 | $ | 29,748 | $ | 9,804 | $ | (42,643 | ) | $ | 142,786 | |||||||||
2018 | ||||||||||||||||||||
New trailers shipped | 59,500 | 2,650 | — | — | 62,150 | |||||||||||||||
Used trailers shipped | 950 | 150 | — | — | 1,100 | |||||||||||||||
New Trailers | $ | 1,473,583 | $ | 164,790 | $ | — | $ | — | $ | 1,638,373 | ||||||||||
Used Trailers | 9,618 | 3,514 | — | — | 13,132 | |||||||||||||||
Components, parts and service | 34,994 | 122,099 | 9,968 | (21,811 | ) | 145,250 | ||||||||||||||
Equipment and other | 18,743 | 103,568 | 348,281 | (69 | ) | 470,523 | ||||||||||||||
Total net external sales | $ | 1,536,938 | $ | 393,971 | $ | 358,249 | $ | (21,880 | ) | $ | 2,267,278 | |||||||||
Gross profit | $ | 168,343 | $ | 68,428 | $ | 48,771 | $ | (1,891 | ) | $ | 283,651 | |||||||||
Income (Loss) from operations | $ | 141,793 | $ | (3,033 | ) | $ | 7,909 | $ | (35,682 | ) | $ | 110,987 | ||||||||
WABASH NATIONAL CORPORATION
SEGMENT and COMPANY FINANCIAL INFORMATION
(Unaudited - dollars in thousands)
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Commercial Trailer Products | |||||||||||||||
Income from operations | $ | 43,135 | $ | 39,077 | $ | 145,877 | $ | 141,795 | |||||||
Diversified Products | |||||||||||||||
Income from operations | 5,610 | (6,111 | ) | 29,748 | (3,033 | ) | |||||||||
Adjustments: | |||||||||||||||
Impairment | — | 12,979 | — | 24,968 | |||||||||||
Adjusted operating income | 5,610 | 6,868 | 29,748 | 21,935 | |||||||||||
Final Mile Products | |||||||||||||||
Income from operations | (5,914 | ) | (1,465 | ) | 9,804 | 7,907 | |||||||||
Adjustments: | |||||||||||||||
Acquisition expenses and related charges | — | — | — | 751 | |||||||||||
Adjusted operating income | (5,914 | ) | (1,465 | ) | 9,804 | 8,658 | |||||||||
Corporate | |||||||||||||||
Income from operations | (11,050 | ) | (8,723 | ) | (42,643 | ) | (35,682 | ) | |||||||
Adjustments: | |||||||||||||||
Acquisition expenses and related charges | — | — | — | 68 | |||||||||||
Executive severance | — | 180 | — | 180 | |||||||||||
Facility transactions | — | 413 | — | 413 | |||||||||||
Adjusted operating income | (11,050 | ) | (8,130 | ) | (42,643 | ) | (35,021 | ) | |||||||
Consolidated | |||||||||||||||
Income from operations | 31,781 | 22,778 | 142,786 | 110,987 | |||||||||||
Adjustments: | |||||||||||||||
Impairment | — | 12,979 | — | 24,968 | |||||||||||
Acquisition expenses and related charges | — | — | — | 819 | |||||||||||
Executive severance | — | 180 | — | 180 | |||||||||||
Facility transactions | — | 413 | — | 413 | |||||||||||
Adjusted operating income | $ | 31,781 | $ | 36,350 | $ | 142,786 | $ | 137,367 | |||||||
WABASH NATIONAL CORPORATION
RECONCILIATION OF GAAP FINANCIAL MEASURES TO
NON-GAAP FINANCIAL MEASURES
(Unaudited - dollars in thousands, except per share amounts)
Operating EBITDA1: | Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income | $ | 18,375 | $ | 11,584 | $ | 89,575 | $ | 69,421 | |||||||
Income tax expense | 6,929 | 5,374 | 28,156 | 26,583 | |||||||||||
Interest expense | 6,517 | 7,110 | 27,340 | 28,759 | |||||||||||
Depreciation and amortization | 10,746 | 10,164 | 42,357 | 40,683 | |||||||||||
Stock-based compensation | 1,674 | 1,690 | 9,036 | 10,169 | |||||||||||
Impairment | — | 12,979 | — | 24,968 | |||||||||||
Acquisition expenses | — | — | — | 68 | |||||||||||
Other non-operating income | (40 | ) | (1,290 | ) | (2,285 | ) | (13,776 | ) | |||||||
Operating EBITDA | $ | 44,201 | $ | 47,611 | $ | 194,179 | $ | 186,875 | |||||||
Adjusted Net Income2: | Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income | $ | 18,375 | $ | 11,584 | $ | 89,575 | $ | 69,421 | |||||||
Adjustments: | |||||||||||||||
Facility transactions3 | — | 194 | — | (10,585 | ) | ||||||||||
Loss on debt extinguishment | — | 106 | — | 280 | |||||||||||
Impairment | — | 12,979 | — | 24,968 | |||||||||||
Acquisition expenses and related charges | — | — | — | 819 | |||||||||||
Executive severance expense | — | 180 | — | 180 | |||||||||||
Tax effect of aforementioned items | — | (3,499 | ) | — | (4,072 | ) | |||||||||
Tax reform and other discrete tax adjustments | — | — | — | 3,084 | |||||||||||
Adjusted net income | $ | 18,375 | $ | 21,544 | $ | 89,575 | $ | 84,095 | |||||||
Adjusted Diluted Earnings Per Share2: | Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Diluted earnings per share | $ | 0.34 | $ | 0.21 | $ | 1.62 | $ | 1.19 | |||||||
Adjustments: | |||||||||||||||
Facility transactions3 | — | — | — | (0.18 | ) | ||||||||||
Loss on debt extinguishment | — | — | — | 0.01 | |||||||||||
Impairment | — | 0.23 | — | 0.43 | |||||||||||
Acquisition expenses and related charges | — | — | — | 0.01 | |||||||||||
Executive severance expense | — | — | — | — | |||||||||||
Tax effect of aforementioned items | — | (0.06 | ) | — | (0.07 | ) | |||||||||
Tax reform and other discrete tax adjustments | — | — | — | 0.05 | |||||||||||
Adjusted diluted earnings per share | $ | 0.34 | $ | 0.38 | $ | 1.62 | $ | 1.44 | |||||||
Weighted Average # of Diluted Shares O/S | 54,613 | 56,290 | 55,290 | 58,430 | |||||||||||
1Operating EBITDA is defined as earnings before interest, taxes, depreciation, amortization, stock-based compensation, acquisition expenses and related charges, impairments, and other non-operating income and expense.
2Adjusted net income and adjusted earnings per diluted share reflect adjustments for acquisition expenses, the losses attributable to the Company’s extinguishment of debt, impairment charges, executive severance costs, income or losses recognized on the sale and/or closure of former Company 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.
3Facility transactions in 2018 relate to gains and/or losses incurred for the sale or closure of former Company locations.
WABASH NATIONAL CORPORATION
RECONCILIATION OF FREE CASH FLOW AND
FREE CASH FLOW CONVERSION
(Unaudited - dollars in thousands)
Twelve Months Ended December 31, | |||||||
2019 | 2018 | ||||||
Net cash provided by operating activities | $ | 146,284 | $ | 112,471 | |||
Capital expenditures | (37,645 | ) | (34,009 | ) | |||
Free cash flow1 | $ | 108,639 | $ | 78,462 | |||
Free cash flow | $ | 108,639 | $ | 78,462 | |||
Divided by: Net income | $ | 89,575 | $ | 69,421 | |||
Free cash flow conversion2 | 121 | % | 113 | % | |||
1 Free cash flow is defined as net cash provided by operating activities minus capital expenditures.
2 Free cash flow conversion is defined as free cash flow divided by net income.
WABASH NATIONAL CORPORATION
RECONCILIATION OF ADJUSTED SEGMENT EBITDA1
AND ADJUSTED SEGMENT EBITDA MARGIN1
(Unaudited - dollars in thousands)
Commercial Trailer Products | Diversified Products | Final Mile Products | |||||||||||||||||||||
Twelve Months Ended December 31, | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||
Income (Loss) from operations | $ | 145,877 | $ | 141,795 | $ | 29,748 | $ | (3,033 | ) | $ | 9,804 | $ | 7,907 | ||||||||||
Depreciation and amortization | 10,667 | 9,631 | 18,621 | 21,177 | 11,361 | 8,314 | |||||||||||||||||
Impairment | — | — | — | 24,968 | — | — | |||||||||||||||||
Acquisition expenses and related charges | — | — | — | — | — | 751 | |||||||||||||||||
Adjusted Segment EBITDA | $ | 156,544 | $ | 151,426 | $ | 48,369 | $ | 43,112 | $ | 21,165 | $ | 16,972 | |||||||||||
Adjusted Segment EBITDA Margin | 10.3 | % | 9.9 | % | 12.6 | % | 10.9 | % | 4.8 | % | 4.7 | % | |||||||||||
1 Adjusted Segment EBITDA, a non-GAAP financial measure, is calculated by adding back segment depreciation and amortization expense to segment operating income (loss), 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.