Wabash National Corporation Announces Record Fourth Quarter and Full Year 2014 Results

• Record net sales for the third consecutive year of $1.86 billion, up 13.9 percent over prior year
• Record operating income for the third consecutive year of $122.4 million, up 18.6 percent over prior year
• Record quarterly net sales of $527 million, up 15.1 percent over prior year period
• Fourth quarter and full year GAAP earnings of $0.27 and $0.85 per diluted share, up 80.0 percent and 26.9 percent, respectively, over prior year
• Full year non-GAAP adjusted earnings of $0.89 per diluted share

LAFAYETTE, Ind., Feb. 3, 2015 (GLOBE NEWSWIRE) -- Wabash National Corporation WNC, a diversified industrial manufacturer and North America's leading producer of semi-trailers and liquid transportation systems, today reported results for the fourth quarter and full year periods ending December 31, 2014.

Net income for the fourth quarter of 2014 was $19.1 million, or $0.27 per diluted share on net sales of $527 million, a quarterly record for the third consecutive quarter, compared to fourth quarter 2013 net income of $10.4 million, or $0.15 per diluted share on net sales of $458 million. Earnings for the quarter ended December 31, 2013 included the impact of an early extinguishment of debt charge totaling $0.6 million related to a $20 million term loan prepayment made in December 2013. Excluding the impact of this item, non-GAAP adjusted earnings for the fourth quarter of 2013 were $10.8 million, or $0.15 per diluted share.

For the twelve months ended December 31, 2014, the Company reported net income of $60.9 million, or $0.85 per diluted share, on record net sales of $1.86 billion, compared to net income of $46.5 million, or $0.67 per diluted share, on net sales of $1.64 billion for the twelve months ended December 31, 2013. Full year 2014 results included one-time charges net of tax totaling $2.0 million, or $0.03 per diluted share, related to the early extinguishment of debt incurred with the Company's term loan prepayments during the current year, the transition of three Retail branch locations to independent dealer facilities in May 2014 and the revaluation of deferred income taxes due to changes in statutory tax rates. Excluding the impact of these items, non-GAAP adjusted earnings for the full year 2014 were $63.0 million, or $0.89 per diluted share. Full year 2013 results included one-time charges net of tax totaling $1.7 million, or $0.03 per diluted share, related to the early extinguishment of debt and costs associated with the recent acquisitions of Walker and certain assets of Beall. Excluding the impact of these items, non-GAAP adjusted earnings for the full year 2013 were $48.2 million, or $0.70 per diluted share.

The Company reported operating income of $34.1 million for the fourth quarter of 2014, compared to operating income of $24.1 million for the fourth quarter of 2013. Operating EBITDA, a non-GAAP measure that excludes the effects of certain recurring and non-recurring items, for the fourth quarter of 2014 was $46.1 million, an increase of $10.5 million compared to operating EBITDA for the previous year period. For full year 2014, the Company achieved record operating EBITDA of $169.0 million, or 9.1 percent of net sales, as compared to $149.9 million, or 9.2 percent of net sales, for the previous year. The year-over-year improvement in operating performance is attributable to the successful execution of the Company's growth and diversification strategies as well as operational improvements across the Company's manufacturing facilities.

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

Dick Giromini, president and chief executive officer, stated, "We are very pleased with our results for 2014 as we achieved new record levels of performance across several key financial metrics. The growth and diversification initiatives driven by our long-term strategic plan to transform the Company into a diversified industrial manufacturer with a higher growth and margin profile have continued to gain momentum. This is demonstrated by the achievement of record net sales and operating income for the third consecutive year of $1.86 billion and $122.4 million, respectively, as well as a 30 basis point improvement in operating income margin to 6.6 percent, equaling our best operating income margin ever. Our performance for the year further substantiates the significant progress we have made in our transformation efforts, and underscores our commitment to long-term profitable growth. As always, we continue to implement operational improvements throughout the business and remain committed to further enhancing our margins and growth profile."

Mr. Giromini continued, "New trailer shipments of 57,350 for the year were consistent with our recently updated guidance and represents an increase of 10,550 trailers, or 22.5 percent, as compared to the previous year. We look forward to 2015 with a healthy backlog of orders totaling $1.09 billion, an increase of 54 percent as compared to the prior year period and representing the highest levels in more than a decade, and a trailer demand forecast well above replacement levels for a fourth consecutive year. Fleet age, customer profitability, used trailer values, regulatory compliance and access to financing all support continued strong trailer demand and provide a favorable pricing environment within specific product lines."

Fourth 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 fourth quarter of 2014 and 2013, respectively. A complete disclosure of the results by individual segment is included in the tables following this release. 

Commercial Trailer Products' net sales, prior to the elimination of intersegment sales, increased $54 million, or 16.7 percent, on shipments of 15,750 trailers, representing 2,300 more trailers than the prior year period. This increase in revenue was primarily driven by a 17.1 percent increase in new trailer shipments during the quarter as well as a 2.8 percent increase in average selling prices as compared to the prior year period due to improved pricing and product mix. As a result of higher volumes and improved pricing, gross profit and gross profit margin increased $9.7 million and 160 basis points, respectively, compared to the same period last year. Operating income increased by $10.9 million, or 76.4 percent, to $25.2 million compared to the fourth quarter of 2013, due to increased volume, improved pricing and continued operational improvements.

Diversified Products' net sales, prior to the elimination of intersegment sales, totaled $138 million for the fourth quarter of 2014, an increase of $16 million, or 12.7 percent, due primarily to higher volume of tank trailers and non-trailer truck mounted equipment offset slightly by reduced sales of engineered products and composite products. Compared to the fourth quarter of 2013, gross profit increased $1.2 million on higher volumes while gross profit margin declined 150 basis points primarily due to higher operating costs related to wood flooring operations and continued pricing pressures on certain composite products. Operating income for the fourth quarter of 2014 was $14.7 million, or 10.7 percent of net sales, an increase of $1.2 million compared to the same period last year. 

Retail's net sales, prior to the elimination of intersegment sales, totaled $48 million for the fourth quarter of 2014. Results for the current quarter, which were consistent with the prior year period, reflect continued strong demand for parts and services despite fewer locations as a result of the transition of three West Coast branches to independent dealers in May 2014. Gross profit margin increased 20 basis points compared to the prior year period to 9.9 percent, primarily as a result of product mix. Operating income for the fourth quarter of 2014 was $0.6 million, an improvement of $0.6 million compared to the same period last year.

2015 Outlook

Mr. Giromini further commented, "Base-loaded with our strongest backlog in more than a decade, we enter 2015 with great momentum from a record 2014, an exceptionally strong trailer demand environment, and operational execution progress being made at an accelerated pace. With that backdrop, and even greater demand projected by industry forecasters, with which we concur, our current expectations are for 2015 demand and performance to exceed 2014."

Stock Repurchase Program

As part of Wabash National's effort to further enhance shareholder value, the Company announced a stock repurchase program in December 2014 authorizing management to repurchase, from time to time at the Company's discretion and subject to market conditions, up to $60 million of the Company's common stock over a two year period ending December 31, 2016. Purchases may be made in open-market transactions, block transactions on or off an exchange, or in privately negotiated transactions.

Non-GAAP Measures

In addition to disclosing financial results calculated in accordance with United States generally accepted accounting principles (GAAP), the financial information included in this release contains non-GAAP financial measures, including operating EBITDA, operating EBITDA margin, adjusted earnings and adjusted earnings per diluted share.

These non-GAAP measures should not be considered a substitute for, or superior to, financial measures and results calculated in accordance with GAAP, including net income, and reconciliations to GAAP financial statements should be carefully evaluated.

Operating EBITDA is defined as earnings before interest, taxes, depreciation, amortization, stock-based compensation, and other non-operating income and expense, as well as certain charges in connection with the Company's recent acquisitions. Management believes operating EBITDA provides useful information to investors regarding the Company's results of operations. The Company provides this measure because we believe it is useful for investors to understand the Company's 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 to the Company's acquisitions of Walker and certain assets of Beall, losses incurred in connection with the Company's extinguishment of debt, revaluation of deferred income tax assets due to changes in statutory tax rates and net losses recognized upon transitioning certain retail assets to independent dealer facilities. 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.

Fourth Quarter 2014 Conference Call

Wabash National will conduct a conference call to review and discuss its fourth quarter results on February 4, 2015, at 10:00 a.m. EST.  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 April 29, 2015. Meeting access also will be available via conference call at 888-771-4371, participant code 38835983.

About Wabash National Corporation

Headquartered in Lafayette, Indiana, Wabash National Corporation 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 trailer demand levels, profitability and earnings, opportunity to capture higher margin sales, execution of our capital allocation strategy and whether, how much and the Company's ability to repurchase shares of common stock of the Company, 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.