Wabash National Corporation Announces Fourth Quarter and Full Year 2020 Results
- Strengthening demand drives fourth quarter revenue of $404.1 million
- Fourth quarter operating income of $10.0 million, decremental margin of 12 percent
- Fourth quarter earnings per diluted share of $0.10
- Backlog shows $500M sequential increase to $1.5 billion
- 2021 EPS outlook initiated at $0.75 per diluted share; range of $0.70 to $0.80
LAFAYETTE, Ind., Feb. 03, 2021 (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 and full year ended December 31, 2020.
Net sales for the fourth quarter 2020 were $404.1 million while operating income was $10.0 million or 2.5% of net sales. For the full year 2020, total revenue totaled $1.5 billion while generating an operating loss of $(85.6) million or operating income of $22.5 million on a non-GAAP adjusted basis.
Net income for the fourth quarter 2020 was $5.5 million, or $0.10 per diluted share. For the full year of 2020, net loss was $(97.4) million or earnings per diluted share of $(1.84). On a non-GAAP adjusted basis, full year 2020 net income was $7.8 million or earnings per diluted share of $0.15. Operating EBITDA, a non-GAAP measure that excludes the effects of certain items, for the fourth quarter 2020 was $25.2 million, or 6.2% of net sales, and full year operating EBITDA was $73.6 million, or 5.0% of net sales.
Total Company backlog as of December 31, 2020 was approximately $1.5 billion as new order activity remained strong during the fourth quarter. Backlog rose 43% compared to September 2020 and was 32% above December 2019.
“While we’re all looking forward to 2021 with optimism, I want to make sure we take time to highlight Wabash National’s resilient financial performance during challenging market conditions in 2020,” explained Brent Yeagy, president and chief executive officer. “Full year decremental margin of 14%, free cash flow generation of $104 million and maintaining our dividend through the cycle all show meaningful improvement in the company’s financial performance.”
Outlook
For the full year ending December 31, 2021, the company has issued guidance of $1.9 billion to $2.0 billion in sales and an earnings per diluted share midpoint of $0.75 with a range of $0.70 to $0.80.
Mr. Yeagy continued, “Conditions strengthened throughout 2020 in many of our customers’ end markets and equipment demand is poised to improve in 2021. While we are focused in the near-term on executing on this cyclical upturn, we also continue to work on strategic initiatives to profitably grow the company in the long-term. Bringing new technologies to market combined with our focus on building out adjacent revenue streams will provide us with opportunities for growth beyond what the cycle gives us.”
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 2020 and 2019. A complete disclosure of the results by individual segment is included in the tables following this release.
Commercial Trailer Products’ net sales for the fourth quarter were $283.0 million, a decrease of 29.1% compared to the prior year quarter, as a result of demand coming off peak levels but rebounding throughout the year. Operating income was $25.5 million, or 9.0% of sales during the quarter. Adjusting for a gain on the sale of a former branch location, CTP’s fourth quarter non-GAAP operating income was $23.3 million, or 8.2% of sales during the quarter.
Diversified Products’ net sales for the fourth quarter were $75.2 million, a decrease of 20.6% compared to the prior year quarter, as a result of reduced market demand. Operating income was $1.2 million, or 1.6% of sales during the quarter. Adjusting for a loss on the sale of a business, DPG’s fourth quarter non-GAAP operating income was $3.3 million, or 4.4% of sales during the quarter.
Final Mile Products’ net sales for the fourth quarter totaled $51.9 million, a decrease of 44.0% due to building to scheduled production during the quarter, while ramping to accommodate improved 2021 demand. Operating loss during the fourth quarter was $4.5 million as a result of weaker volume leverage over fixed costs.
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, debt issuance costs expensed within General & administrative expenses related to the closing of the New Term Loan Credit Agreement, impairment and other, net, and other non-operating income and expense (which includes loss on debt extinguishment charges). 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 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 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 and adjusted earnings per diluted share each reflect adjustments for sales of assets, non-cash impairment and debt transactions, 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 net income (loss) per share, is beneficial to an investor’s understanding of the Company’s performance. A reconciliation of adjusted net income and adjusted earnings per diluted share to net income (loss) and net income (loss) per diluted share 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 (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.
Fourth Quarter 2020 Conference Call
Wabash National will discuss its results during its quarterly investor conference call on Wednesday, February 3, 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 (833) 476-0947, conference ID 1619249. 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 and pharmaceutical equipment. Its innovative products are sold under the following brand names: Wabash National®, 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 a continued or prolonged shutdown or reduction of our operations, substantially reduced customer orders or order 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.