Wabash National Corporation Announces Second Quarter 2021 Results
- Revenue of $449.4 million on increasing new trailer shipments
- Operating income of $22.7 million on a GAAP basis or $20.8 million on a non-GAAP adjusted basis
- Earnings per share of $0.24 on a GAAP basis or $0.21 on a non-GAAP adjusted basis
- Backlog of $1.3 billion up 77% YoY; outperforms normal sequential seasonality
- 2021 EPS outlook maintained, updated for divestiture impact at $0.72 per diluted share; range of $0.67 to $0.77
LAFAYETTE, Ind. – (Trailer Technician) — Wabash National Corporation (NYSE: WNC), the innovation leader of engineered solutions for the transportation, logistics and distribution industries, today reported results for the quarter ended June 30, 2021.
Net sales for the second quarter 2021 of $449.4 million increased 32.5% versus the prior year quarter as the company continued to scale its ability to serve strong customer demand. Consolidated gross profit was $55.6 million, or 12.4% of sales. Operating income was $22.7 million, or 5.0% of sales during the quarter. On a non-GAAP adjusted basis, operating income was $20.8 million. GAAP earnings per share were $0.24, or $0.21, on a non-GAAP adjusted basis.
Total company backlog as of June 30, 2021 was approximately $1.3 billion. Normal seasonal order patterns generally dictate that the backlog declines sequentially in Q2; however, during the second quarter of 2021, the backlog softened less than usual and remained up 77% compared to June of 2020.
“While the manufacturing environment continued to be broadly challenging during the second quarter, Wabash National is successfully navigating the issues created by labor scarcity and material cost increases compounded by exceptionally strong demand in our industry and in the economy as a whole,” explained Brent Yeagy, president and chief executive officer. “Our strong financial results are a testament to our employees’ dedication to serve our customers as well as our diligent cost control through the year.”
For the full year ending December 31, 2021, the company maintained its EPS outlook and updated it for the impact of the divestiture of Extract Technology, which closed on June 30, 2021. The midpoint for earnings per diluted share is anticipated to be $0.72 with a range of $0.67 to $0.77.
“We are pleased that new trailer shipments remain on an upward trajectory and that the ramp in trailer production continues to meet our expectations. Freight markets remain very strong and our customers are looking to trailers as a way to address intensified driver shortages and network imbalances. We will continue to manage through short-term commodity headwinds and labor challenges as we work toward maximizing our factory capacity and positioning ourselves to capitalize on continued strong customer demand in 2021 and beyond.”
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 second quarter of 2021 and 2020. A complete disclosure of the results by individual segment is included in the tables following this release.
Commercial Trailer Products’ net sales for the second quarter were $296.3 million, an increase of 27.6% as compared to the prior year quarter, as operations scaled to meet improved customer demand. Operating income was $32.3 million or 10.9% of sales during the quarter.
Diversified Products’ net sales for the second quarter were $76.6 million, an increase of 19.7% as compared to the prior year quarter, as operations worked to ramp up. Revenue in this business was impacted by the divestiture of the Beall brand of tank trailers on December 31, 2020. Operating income was $5.8 million, or 7.6% of sales during the quarter.
Final Mile Products’ net sales for the second quarter totaled $81.0 million, an increase of 59.4% as compared to the prior year, as operations scaled to be able to satisfy stronger market demand. Operating loss was $3.2 million during the quarter while adjusted segment EBITDA improved to $1.3 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 operating EBITDA, free cash flow, adjusted operating income (loss), adjusted net income (loss), adjusted earnings per share, adjusted segment EBITDA, and adjusted segment EBITDA margin. These non-GAAP measures should not be considered a substitute for, or superior to, financial measures and results calculated in accordance with GAAP, including net income (loss), and reconciliations to GAAP financial statements should be carefully evaluated.
Operating EBITDA is defined as earnings before interest, taxes, depreciation, amortization, stock-based compensation, impairment and other, net, 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 (loss) and net income (loss), is beneficial to an investor’s understanding of the Company’s operating performance. A reconciliation of operating EBITDA to net income (loss) is included in the tables following this release.
Free cash flow is defined as net cash (used in) provided by operating activities minus capital expenditures. Management believes providing free cash flow is useful for investors to understand the Company’s performance and results of cash generation period to period with the exclusion of the item identified above. Management believes the presentation of free cash flow, when combined with the GAAP presentations of cash provided by operating activities, is beneficial to an investor’s understanding of the Company’s operating performance. A reconciliation of free cash flow to cash (used in) provided by operating activities is included in the tables following this release.
Adjusted operating income (loss), a non-GAAP financial measure, excludes certain costs, expenses, other charges, gains or income that are included in the determination of operating income (loss) under U.S. GAAP, but that management would not consider important in evaluating the quality of the Company’s operating results as they are not indicative of the Company’s core operating results or may obscure trends useful in evaluating the Company’s continuing activities. Accordingly, the Company presents adjusted operating income (loss) excluding these special items to help investors evaluate our operating performance and trends in our business consistent with how management evaluates such performance and trends. Further, the Company presents adjusted operating income (loss) to provide investors with a better understanding of the Company’s view of our results as compared to prior periods. A reconciliation of adjusted operating income (loss) to operating income (loss), the most comparable GAAP financial measure, is included in the tables following this release.
Adjusted net income (loss) and adjusted earnings per diluted (2021) and basic (2020) share reflect adjustments for the impact of sales and divestitures, debt transactions, and non-cash impairment, and the related tax effects of these adjustments. Management believes providing adjusted measures and excluding certain items facilitates comparisons to the Company’s prior year periods and, when combined with the GAAP presentation of net income (loss) and diluted (2021) and basic (2020) net income (loss) per share, is beneficial to an investor’s understanding of the Company’s performance.
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 (loss) under GAAP, but that management would not consider important in evaluating the quality of the Company’s segment operating results as they are not indicative of each segment’s core operating results or may obscure trends useful in evaluating the segment’s continuing activities. Adjusted segment EBITDA Margin is calculated by dividing Adjusted segment EBITDA by segment total net sales. A reconciliation of adjusted segment EBITDA to income (loss) from operations is included in the tables following this release.
Second Quarter 2021 Conference Call
Wabash National will discuss its results during its quarterly investor conference call on Wednesday, July 28, 2021, beginning at 10:00 a.m. EDT. 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 (833) 476-0947, conference ID 3994951. 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, liquid tank trailers, dry and refrigerated truck bodies, structural composite panels and products, trailer aerodynamic solutions and specialty food grade equipment. Its innovative products are sold under the following brand names: Wabash National®, Benson®, Brenner® Tank, Bulk Tank International, DuraPlate®, 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 a continued or prolonged shutdown or reduction of our operations, substantially reduced customer orders or sales volumes and supply disruptions due to the coronavirus (COVID-19) outbreak, 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.