Wabash wins financial waiver

Truck-trailer maker Wabash National Corp. has received a financial waiver from its lenders that relieves it from meeting certain cash flow targets through April 15. CFO Mark Holden said the company sought the waiver because the truck-trailer market remains depressed and is not expected to improve any time soon. "We are in constant dialogue with our lenders who continue to work with us and support our efforts in building a stronger and more flexible capital structure," he said. "This waiver provides the company and our lenders with time to develop and document a new set of covenants for the remainder of 2003."He also noted that Wabash returned to a cash-flow positive status at the end of 2002, despite the poor market and two years of heavy financial losses. "We don't expect any problems renegotiating our covenants for this year," Holden said. "We paid down over $100 million in debt last year, continue to meet all of our debt payment obligations, and are cash-flow positive, even as we continue to experience low production levels." Holden said the trailer manufacturing industry produced just 140,000 trailers last year, down from a high of 314,000 in 1999. He noted that Wabash produced 34,000 trailers in 2002, compared to around 70,000 in 1999. The forecast for 2003 is for approximately 176,000 units. However, that's still well below the nominal year-over-year trailer replacement demand of 200,000 units. The threat of war in Iraq, high fuel prices and a slow U.S. economic recovery has exacerbated the continued slump in trailer demand, Holden added. "There's been a pretty severe pullback in trailer demand," Holden said. "We think the market will come back, but it is just taking much longer than anyone thought."