Wabash National Corporation (NYSE:WNC) reported that net sales for the third quarter were $425 million, a decrease of 8 percent as compared to the third quarter of 2016.
Net income for the third quarter of 2017 was $18.9 million, or $0.30 per diluted share, compared to third-quarter 2016 net income of $33.4 million, or $0.51 per diluted share. Third-quarter 2017 non-GAAP adjusted earnings decreased $11.7 million over the prior year period to $21.2 million, or $0.34 per diluted share.
Non-GAAP adjusted earnings for the third quarter of 2017 excludes one-time acquisition expenses of $8.7 million related to the purchase of Supreme Industries, Inc. on September 27, 2017, and gains realized on the transition of former branch facilities to third-party dealers. Non-GAAP adjusted earnings for the third quarter of 2016 also excluded gains related to the transition of branch locations.
Operating income decreased 52 percent to $26.6 million, due to lower trailer volume, compared to operating income of $54.9 million for the third quarter of 2016. Operating EBITDA, a non-GAAP measure that excludes the effects of certain recurring and non-recurring items, for the third quarter of 2017 was $46.6 million, a decrease of $20.3 million, or 30 percent, compared to Operating EBITDA for the prior year period. On a trailing twelve month basis, net sales totaled $1.7 billion, generating Operating EBITDA of $191.5 million, or 11.4 percent of net sales.
“Following prior year record performance is never easy, especially when operating in a somewhat more challenging environment,” said Dick Giromini, chief executive officer. “Throw in an acquisition, and the headlines get even more muddied. That said, we are nonetheless pleased to have delivered a historically solid performance in the third quarter, but not up to the lofty standards that we have become accustomed to in the past couple years. Looking forward, we are encouraged by recent market demand trends, and excited about what next year will bring as we integrate and leverage our newest addition, Supreme Industries, into our family.”
“A number of factors in the third quarter, including shipment pick-up delays impacted by the recent hurricanes, ongoing investment in our molded structural composites start-up, and a tighter labor market, and costs associated with our acquisition of Supreme, all combined to create a veil over all of the good things that are going on in the business that set us up for a strong 2018. With backlog totaling $670 million, excluding Supreme, as of September 30, 2017, we believe we are in a solid position as the 2018 order season enters its strongest period.
“In the near term, while many of the aforementioned short-term operational issues are behind us, others will linger throughout the balance of the year. Based on the mix of these factors, we are updating our full-year guidance for trailer shipments to 53,500 to 55,500 new trailers, and adjusting our earnings guidance range to $1.33 to $1.37 per diluted share.”
2018 Outlook
“Looking forward to next year, a strengthening economy driving increased trucking demand, strong year-over-year backlog, increasing market interest in our proprietary molded structural composite technology, the addition of Supreme, and the upcoming payback from increased investment in productivity-enhancing technologies in our van operations, all have me excited about what we will deliver in 2018 and beyond. Overall demand for van trailers within our Commercial Trailer Products segment is projected to remain historically strong for next year, combined with a much-improved demand environment for tank trailers and flatbed equipment.
“This belief is further supported by several factors, including a growing replacement cycle for 2004-2006 dry vans, a more stringent regulatory environment influencing both carrier and driver behaviors and the continued need to refresh equipment. In addition, we expect top- and bottom-line improvements in our Diversified Products segment due to the improving market conditions served by this segment as well as realization of various productivity improvement initiatives in both Commercial Trailer Products and Diversified Products segments. Couple these growth and performance opportunities with the addition of Supreme and our Final Mile Products segment, we currently project full-year 2018 earnings expectation of $1.55 to $1.75 per share.”