Wabash National Corporation Announces Third Quarter 2020 Results
Wabash National Corporation (the “Company”), the innovation leader of engineered solutions for the transportation, logistics and distribution industries, reported results for the quarter ended September 30, 2020.
Net sales for the third quarter 2020 were steady compared with prior quarters at $351.6 million as the Company continued to produce equipment to satisfy customer demand volumes. Consolidated gross margin of 12.3% was the strongest rate since Q4 of 2019 as the company continued to achieve greater efficiency operating within the constraints of COVID-19 protocols. Operating income of $8.4 million, or 2.4% of sales, on a GAAP basis, includes the positive impact of cost savings stemming from strategic organizational realignment actions completed during the quarter. The Company’s previously announced target of $20M in run rate savings from these realignment actions has been completed ahead of schedule and helped to limit decremental margins to 13% during the third quarter. Earnings per share was $0.07 on a GAAP basis or $0.09 on an adjusted non-GAAP basis for the third quarter.
Total Company backlog as of September 30, 2020 was approximately $1.0 billion as new order activity markedly accelerated during the September time frame. Backlog rose 37% compared June 2020 and was 29% above September 2019.
“We are pleased to deliver a profitable quarter that builds upon our purposeful financial management during the first half of 2020. We successfully executed strategic cost reductions that have not only preserved our organization’s strength, but have enhanced our company’s culture by eliminating silos and allowed us to provide a more seamless experience for customers who purchase across our unmatched portfolio of first to final mile solutions,” said Brent Yeagy, president and chief executive officer.
Operating cash flow was $107.1 million and free cash flow was $93.4 million year to date at the close of the third quarter 2020, which compares to significant cash burn during each of the two prior economic recessions. Liquidity as of the end of the third quarter was $383 million with $216 million of cash and a fully untapped revolving credit line of $167 million. Following the successful refinancing of the Company’s term loan, the Company’s nearest material debt maturity is now October 2025.
“Our increased backlog reflects strong underpinnings within the freight markets as rebounding freight activity has contributed to significant gains in spot and contract rates. While we’re looking forward to a demand environment that looks poised to improve into 2021, we also remain focused on executing in the final quarter of 2020 completing a year that we expect will demonstrate the benefits of our Company’s diversification efforts over the last decade as well as actions over the past two years to significantly strengthen the management system of the Company.” continued Yeagy. “Our broadened and synergistic portfolio has resulted in considerable improvement in trough performance across an array of key financial metrics like operating income, EBITDA, and free cash flow.”
Business Segment Highlights
Commercial Trailer Products’ net sales for the third quarter were $226.5 million, a decrease of 40.4% as compared to the prior year quarter as a result of a reduction in market demand. Operating income was $19.7 million or 8.7% of sales during the quarter.
Diversified Products’ net sales for the third quarter were $72.0 million, a decrease of 22.7% as compared to the prior year as a result of lower market demand. Operating income was $4.2 million or 5.8% of sales during the quarter.
Final Mile Products’ net sales for the third quarter totaled $55.3 million, a decrease of 51.2%, as compared to the prior year, due to softer market demand. Operating loss was $4.4 million during the quarter as a result of weaker volume leverage over fixed costs.
For the full third quarter results, click here.
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.
Dana Stelsel – Director Corporate Communications – firstname.lastname@example.org – (765) 771-5766
Source: Wabash National Corporation