Wabash National Corporation (NYSE: WNC) reported operating income of $5.7 million for the fourth quarter of 2010—its best since 3Q 2007, and a dramatic improvement over its operating loss of $11.9 million for the fourth quarter of 2009.
Fourth-quarter new trailer sales totaled 10,100 units, an increase of 6,800 units, or 206% from the prior year period. New-trailer production for the period improved approximately 5% sequentially; however, shipments improved approximately 49% from the third quarter as customer delivery rates on new trailers improved significantly.
For the twelve months ended December 31, the company reported an operating loss of $15.4 million and $66.1 million for 2010 and 2009, respectively. The improvement in operating income of $17.6 million and $50.7 million for the three- and 12-month periods, respectively, resulted from higher production and shipment volumes; as well as, cost and manufacturing optimization enhancements implemented by the company throughout 2008 and 2009. In addition, the fourth quarter and full year 2010 results benefited from the favorable experience on trailer warranties which expired of $2.8 million and $3.2 million, respectively.
"Our operating results improved sequentially each quarter during 2010, culminating in our operating results for the fourth quarter which were our best since 2007,” said Dick Giromini, President and Chief Executive Officer. “Of note, the company generated positive operating EBITDA of $10.8 million in the fourth quarter, which drove our full year 2010 operating EBITDA to a positive $4.9 million. Moreover, gross profit margin of 7.2% represents a year-over-year improvement of 940 basis points. These results were driven by our continued efforts throughout 2010 to optimize our cost structure, improve operational efficiency, enhance our capital structure, and position the business to meet higher demand levels as the industry recovered during the second half of the year.
"New trailer shipments of 10,100 for the fourth quarter met and slightly exceeded the high-end of our guidance, reflecting a healthier demand environment and improved pick-up performance by our customers during the quarter. Full year, new trailer shipments of 24,900, which were nearly double the level from 2009, combined with a backlog of approximately $480 million as of December 31, 2010, reinforces our belief that the recovery in our industry is well under way and that we are poised to capitalize on the improvement in demand. In fact, both FTR and ACT have recently increased their forecasts for 2011 industry trailer volumes to 174,000 units and 191,000 units, respectively, representing an approximate increase of 30 to 60 percent over 2010 levels."
Quarterly Operating EBITDA during 2010 showed sequential improvement and reached levels not experienced since 2007. On a non-GAAP basis, the company’s operating EBITDA of $10.8 million was better than the third quarter of 2010 by approximately $10.1 million on approximately 3,300 additional new trailer shipments.
The company reported net income of $4.9 million and $0.07 per diluted share for the fourth quarter of 2010 on net sales of $242 million. Results for the three months ended December 31, 2010, include a benefit of $2.8 million related to the favorable experience on trailer warranties which expired, or an impact of $0.04 per diluted share. For the same quarter last year, the company reported net income of $10.9 million, or $0.15 per diluted share, on net sales of $85 million. Results for the three months ended December 31, 2009 include a non-cash benefit of $20.5 million related to the decrease in the fair value of the company’s warrant which was issued in 2009 to a private investor and fully exercised in the third quarter of 2010, or an impact of $0.68 per diluted share.