Wabash National Corporation (NYSE:WNC) reported record gross profit and income in the second quarter.
Net income was $28.6 million, or $0.41 per diluted share, compared to second quarter 2014 net income of $16.2 million, or $0.23 per diluted share. Second quarter 2015 non-GAAP adjusted earnings increased $6.7 million to $23.6 million, or $0.33 per diluted share, from $16.9 million, or $0.24 per diluted share, for the second quarter 2014.
Non-GAAP adjusted earnings for the second quarter of 2015 excludes $8.3 million of gains from the sale of two former Retail locations during the quarter and a $0.3 million charge in connection with the refinancing of the company’s asset based lending facility in June 2015. Non-GAAP adjusted earnings for the second quarter of 2014 includes charges totaling $1.1 million related to the early extinguishment of debt and the transition of three Retail locations to independent dealer facilities.
For the second quarter of 2015, the company’s net sales increased 6 percent to $515 million from $486 million in the prior year quarter, and operating income increased 24 percent to a record quarter of $42.1 million compared to operating income of $33.9 million for the second quarter of 2014. Operating EBITDA, a non-GAAP measure that excludes the effects of certain recurring and non-recurring items, for the second quarter of 2015 was $53.7 million, an increase of $8.0 million compared to Operating EBITDA for the previous year period.
Dick Giromini, president and chief executive officer, stated, “We are very pleased with the ongoing progress and our ability to deliver second-quarter results that represent record achievement levels for gross profit and income from operations. Sustained improvement in the company’s overall operating performance demonstrates and validates the transformative nature of our strategic growth efforts as our diversification and operational improvement initiatives are paying strong dividends.
“While all segments contributed positively to the record performances this quarter, Commercial Trailer Products lead the way with its ongoing commitment to margin improvement and manufacturing excellence. Through the first six months of 2015 we have continued the momentum generated last year with strong operational execution and an accelerated pace of improvement from our record breaking 2014.”
“New trailer shipments for the second quarter were approximately 16,900, coming in at the top-end of our previous guidance of 16,000 to 17,000 trailers. The year-over-year increase in total trailer demand as evidenced by our strong backlog of $1.1 billion, along with ongoing demand strength being projected by both ACT Research and FTR, provides us even greater confidence that 2015 will prove to be our fourth consecutive year of record performance. As such, we are now increasing our full-year shipment and adjusted earnings guidance to 63,000 to 66,000 trailers and $1.25 to $1.35 per diluted share, respectively.”
Commercial Trailer Products’ achieved new quarterly records for net sales, gross margin and operating income. Net sales were $395 million, an increase of $59 million, or 17.4 percent, on shipments of 16,150 trailers, or 2,250 more trailers than the prior year period. This increase in revenue was primarily due to a 16.2 percent increase in trailer shipments during the quarter as well as the ongoing commitment to improve the financial performance within the core trailer business. Driven by higher volumes, an improved pricing environment and continued operational improvements, gross profit and gross profit margin increased $18.2 million and 340 basis points, respectively, as compared to the same period last year. Operating income increased by $17.0 million to $39.0 million from the second quarter last year.
Diversified Products’ net sales decreased $21 million, or 17.9 percent, as compared to the previous year period primarily due to reduced demand for composite product offerings and non-trailer related equipment as well as fewer tank trailer shipments due to delays in customer pick-ups. Gross profit margin for the second quarter of 22.1 percent remained consistent with the previous year period, however, gross profit and operating income declined $4.7 million and $5.2 million, respectively, compared to the prior year period, primarily due to lower overall net sales and continued competitive market pressures on certain products.
Retail’s net sales of $45 million decreased 11.9 percent compared with the prior year period, primarily due to fewer retail locations resulting from the transition of three West Coast locations to independent dealers in May 2014 as demand for trailers and parts and service remained healthy throughout the quarter. On a same store basis, net sales increased $2 million, or 5.0 percent, compared with the prior year period.