Wabash National Corporation (NYSE:WNC) reported net income of $60.9 million in 2014, up 31% from $46.5 million in 2013, along with record net sales of $1.86 billion.
New trailer shipments of 57,350 for the year represent an increase of 10,550 trailers, or 22.5%, as compared to the previous year.
Wabash set its third straight quarterly record for net income, with $19.1 million in the fourth quarter of 2014, compared to fourth quarter 2013 net income of $10.4 million, on net sales of $458 million. Earnings for the quarter included the impact of an early extinguishment of debt charge totaling $0.6 million related to a $20 million term loan prepayment made in December 2013. Excluding the impact of this item, non-GAAP adjusted earnings for the fourth quarter of 2013 were $10.8 million, or $0.15 per diluted share.
The company reported operating income of $34.1 million for the fourth quarter of 2014, compared to operating income of $24.1 million for the fourth quarter of 2013. Operating EBITDA, a non-GAAP measure that excludes the effects of certain recurring and non-recurring items, for the fourth quarter of 2014 was $46.1 million, an increase of $10.5 million compared to operating EBITDA for the previous year period.
For full year 2014, the company achieved record operating EBITDA of $169.0 million, or 9.1 percent of net sales, as compared to $149.9 million, or 9.2 percent of net sales, for the previous year. The year-over-year improvement in operating performance is attributable to the successful execution of the company's growth and diversification strategies as well as operational improvements across the Company's manufacturing facilities.
Dick Giromini, president and chief executive officer, stated, "We are very pleased with our results for 2014 as we achieved new record levels of performance across several key financial metrics. The growth and diversification initiatives driven by our long-term strategic plan to transform the company into a diversified industrial manufacturer with a higher growth and margin profile have continued to gain momentum.
“This is demonstrated by the achievement of record net sales and operating income for the third consecutive year of $1.86 billion and $122.4 million, respectively, as well as a 30 basis point improvement in operating income margin to 6.6 percent, equaling our best operating income margin ever. Our performance for the year further substantiates the significant progress we have made in our transformation efforts, and underscores our commitment to long-term profitable growth. As always, we continue to implement operational improvements throughout the business and remain committed to further enhancing our margins and growth profile.
"We look forward to 2015 with a healthy backlog of orders totaling $1.09 billion, an increase of 54 percent as compared to the prior year period and representing the highest levels in more than a decade, and a trailer demand forecast well above replacement levels for a fourth consecutive year. Fleet age, customer profitability, used trailer values, regulatory compliance and access to financing all support continued strong trailer demand and provide a favorable pricing environment within specific product lines."
Commercial Trailer Products' net sales, prior to the elimination of intersegment sales, increased $54 million, or 16.7 percent, on shipments of 15,750 trailers, representing 2,300 more trailers than the prior year period. This increase in revenue was primarily driven by a 17.1 percent increase in new trailer shipments during the quarter as well as a 2.8 percent increase in average selling prices as compared to the prior year period due to improved pricing and product mix. As a result of higher volumes and improved pricing, gross profit and gross profit margin increased $9.7 million and 160 basis points, respectively, compared to the same period last year. Operating income increased by $10.9 million, or 76.4 percent, to $25.2 million compared to the fourth quarter of 2013, due to increased volume, improved pricing and continued operational improvements.
Diversified Products' net sales, prior to the elimination of intersegment sales, totaled $138 million for the fourth quarter of 2014, an increase of $16 million, or 12.7 percent, due primarily to higher volume of tank trailers and non-trailer truck mounted equipment offset slightly by reduced sales of engineered products and composite products. Compared to the fourth quarter of 2013, gross profit increased $1.2 million on higher volumes while gross profit margin declined 150 basis points primarily due to higher operating costs related to wood flooring operations and continued pricing pressures on certain composite products. Operating income for the fourth quarter of 2014 was $14.7 million, or 10.7 percent of net sales, an increase of $1.2 million compared to the same period last year.