GlobeNewswire Inc | Jul 29, 2020 06:55AM EDT

July 29, 2020

-- Second quarter revenue of $339M, earnings per share of $0.00 -- Rapid cost containment leads to exceptional decremental margin management at 15% -- Liquidity position strengthens sequentially, repaid previous advances on revolver -- Second quarter backlog of approximately $750 million gives visibility into the second half of 2020 -- Anticipate positive free cash flow in 2020, remain committed to dividend

LAFAYETTE, Ind., July 29, 2020 (GLOBE NEWSWIRE) -- Wabash National Corporation (NYSE: WNC), the innovation leader of engineered solutions for the transportation, logistics and distribution industries, today reported results for the quarter ended June30, 2020.

Net sales for the second quarter 2020 were $339.2 million as operations were able to maintain productivity levels in the face of unprecedented business and operating conditions brought on by COVID-19. Additionally, customer pick-ups of new equipment improved following disruption seen during the first quarter in the lead-up to COVID-19-related shutdowns. Operating income was $6.0 million during the quarter as rapid implementation of cost control measures limited decremental margins to 15 percent. Earnings per share was $0.00 for the second quarter.

Total Company backlog as of June 30, 2020 was approximately $750 million compared to backlog of approximately $1.0 billion ending March 2020 as normal seasonal trends indicate an expected sequential softening in backlog during the second quarter.

The second quarter was the most uniquely challenging time I've experienced in my career. Balancing continued operations to support our customers during a global pandemic while implementing meaningful short-term cost control measures as well as longer-term initiatives to optimize our organizational structure took a remarkable level of dedication from every level of our organization, and I'd like to acknowledge the tremendous efforts of our people, said Brent Yeagy, president and chief executive officer. "To limit decremental margins to fifteen percent during the second quarter reflects the dedication of our people as well as the long-term improvements we've made to our business portfolio and within our operating system. The cost reductions we've made allow us to control expense in the short-term while preserving the business' ability to quickly accelerate when market conditions invariably improve."

Liquidity as of the end of the second quarter was $304 million with cash of $136 million and a fully untapped revolving credit line of $168 million following the second quarter repayment of a proactive drawdown of the revolver during the first quarter. Overall liquidity increased by $27 million sequentially as positive cash flow from operations was supplemented by a release of working capital. The Company's nearest debt maturity, amounting to $135 million, is in March of 2022. Additionally, the Company's debt carries no financial covenants.

"Our backlog combined with second quarter shipments shows that orders continued to flow at a moderate pace during the second quarter, which normally sees sales outpace new orders. We continue to be pleased with the state of our order book and the visibility it provides for the second half of the year," continued Yeagy. "Our goal for 2020 remains positive free cash flow generation and our second quarter results serve to strengthen our expectations of achieving that target. We aim to demonstrate how our free cash flow profile has improved from previous cycles by maintaining our dividend through this challenging time and continuing to deploy capital in the best interest of our long-term shareowners."

Business Segment Highlights

The table below is a summary of select segment operating and financial results prior to the elimination of intersegment sales for the second quarter of 2020 and 2019. A complete disclosure of the results by individual segment is included in the tables following this release.

Commercial Trailer Diversified Products Final Mile Products ProductsThreeMonths 2020 2019 2020 2019 2020 2019Ended June30, (dollars in thousands)Newtrailers 8,000 14,250 400 750 ? ? shippedNet sales $ 232,254 $ 400,864 $ 63,951 $ 97,026 $ 50,832 $ 134,817 Gross $ 22,392 $ 46,906 $ 10,761 $ 20,123 $ 1,963 $ 21,289 profitGrossprofit 9.6 % 11.7 % 16.8 % 20.7 % 3.9 % 15.8 %marginIncome(loss) $ 18,599 $ 39,918 $ 2,242 $ 8,911 $ (6,569 ) $ 9,221 fromoperationsIncome(loss)from 8.0 % 10.0 % 3.5 % 9.2 % (12.9 %) 6.8 %operationsmargin

Commercial Trailer Products net sales for the second quarter were $232.3 million, a decrease of 42.1 percent as compared to the prior year quarter as a result of a reduction in market demand. Operating income was $18.6 million or 8.0% of sales during the quarter.

Diversified Products net sales for the second quarter were $64.0 million, a decrease of 34.1 percent as compared to the prior year as a result of lower market demand. Operating income was $2.2 million or 3.5 percent of sales during the quarter.

Final Mile Products net sales for the second quarter totaled $50.8 million, a decrease of 62.3 percent, as compared to the prior year, due to softer market demand. Operating loss was $6.6 million during the quarter as a result of weaker volume leverage over fixed costs.

Non-GAAP Measures

In addition to disclosing financial results calculated in accordance with United States generally accepted accounting principles (GAAP), the financial information included in this release contains non-GAAP financial measures, including operating EBITDA, adjusted operating income (loss), adjusted net (loss) income and adjusted earnings per share. These non-GAAP measures should not be considered a substitute for, or superior to, financial measures and results calculated in accordance with GAAP, including net (loss) income, and reconciliations to GAAP financial statements should be carefully evaluated.

Operating EBITDA is defined as earnings before interest, taxes, depreciation, amortization, stock-based compensation, impairment and other, net, and other non-operating income and expense. Management believes providing operating EBITDA is useful for investors to understand the Companys performance and results of operations period to period with the exclusion of the items identified above. Management believes the presentation of operating EBITDA, when combined with the GAAP presentations of operating income (loss) and net (loss) income, is beneficial to an investors understanding of the Companys operating performance. A reconciliation of operating EBITDA to net (loss) income is included in the tables following this release.

Free cash flow is defined as net cash provided by operating activities minus capital expenditures. Management believes providing free cash flow is useful for investors to understand the Companys performance and results of cash generation period to period with the exclusion of the item identified above. Management believes the presentation of free cash flow, when combined with the GAAP presentations of cash provided by operating activities, is beneficial to an investors understanding of the Companys operating performance. A reconciliation of free cash flow to cash provided by operating activities is included in the appendix to this release.

Adjusted operating income (loss), a non-GAAP financial measure, excludes certain costs, expenses, other charges, gains or income that are included in the determination of operating income (loss) under U.S. GAAP, but that management would not consider important in evaluating the quality of the Companys operating results as they are not indicative of the Companys core operating results or may obscure trends useful in evaluating the Companys continuing activities. Accordingly, the Company presents adjusted operating income (loss) excluding these Special Items to help investors evaluate our operating performance and trends in our business consistent with how management evaluates such performance and trends. Further, the Company presents adjusted operating income (loss) to provide investors with a better understanding of the Companys view of our results as compared to prior periods. A reconciliation of adjusted operating income (loss) to operating income (loss), the most comparable GAAP financial measure, is included in the tables following this press release.

Adjusted net (loss) income and adjusted earnings per basic (2020) or diluted (2019) share, each reflect adjustments for non-cash impairment and other, net, and the related tax effects of these adjustments. Management believes providing adjusted measures and excluding certain items facilitates comparisons to the Companys prior year periods and, when combined with the GAAP presentation of net (loss) income and basic (2020) and diluted (2019) net (loss) income per share, is beneficial to an investors understanding of the Companys performance. A reconciliation of each of adjusted net (loss) income and adjusted earnings per basic or diluted share to net (loss) income and net (loss) income per basic or diluted share is included in the tables following this release.

Second Quarter 2020 Conference Call

Wabash National will discuss its results during its quarterly investor conference call on Wednesday, July29, 2020, beginning at 10:00 a.m. EDT. The call and an accompanying slide presentation will be accessible on the "Investors" section of the Companys website www.wabashnational.com. The conference call will also be accessible by dialing (844) 778-4139, conference ID 5580198. A replay of the call will be available on the site shortly after the conclusion of the presentation.

About Wabash National Corporation

Headquartered in Lafayette, Indiana, Wabash National Corporation (NYSE: WNC) is a diversified industrial manufacturer and a leading producer of semi-trailers, truck bodies and liquid transportation systems. Established in 1985, the Company manufactures a diverse range of products including: dry freight and refrigerated trailers, platform trailers, bulk tank trailers, dry and refrigerated truck bodies, truck-mounted tanks, intermodal equipment, structural composite panels and products, trailer aerodynamic solutions, and specialty food grade and pharmaceutical equipment. Its innovative products are sold under the following brand names: Wabash National, Beall, Benson, Brenner Tank, Bulk Tank International, DuraPlate, Extract Technology, Supreme, Transcraft, Walker Engineered Products, and Walker Transport. Learn more at www.wabashnational.com.

Safe Harbor Statement

This press release contains certain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements convey the Companys current expectations or forecasts of future events. All statements contained in this press release other than statements of historical fact are forward-looking statements. These forward-looking statements include, among other things, all statements regarding the Companys outlook for trailer and truck body shipments, backlog, expectations regarding demand levels for trailers, truck bodies, non-trailer equipment and our other diversified product offerings, pricing, profitability and earnings, cash flow and liquidity, opportunity to capture higher margin sales, new product innovations, our growth and diversification strategies, our expectations for improved financial performance during the course of the year and our expectations with regards to capital allocation. These and the Companys other forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those implied by the forward-looking statements. Without limitation, these risks and uncertainties include a continued or prolonged shutdown or reduction of our operations, substantially reduced customer orders or sales volumes and supply disruptions due to the coronavirus (COVID-19) outbreak, the continued integration of Supreme into the Companys business, adverse reactions to the transaction by customers, suppliers or strategic partners, uncertain economic conditions including the possibility that customer demand may not meet our expectations, increased competition, reliance on certain customers and corporate partnerships, risks of customer pick-up delays, shortages and costs of raw materials including the impact of tariffs or other international trade developments, risks in implementing and sustaining improvements in the Companys manufacturing operations and cost containment, dependence on industry trends and timing, supplier constraints, labor costs and availability, customer acceptance of and reactions to pricing changes and costs of indebtedness. Readers should review and consider the various disclosures made by the Company in this press release and in the Companys reports to its stockholders and periodic reports on Forms 10-K and 10-Q.

Media Contact:Dana StelselDirector, Corporate Communications(765) 771-5766dana.stelsel@wabashnational.com

Investor Relations:Ryan ReedDirector, Investor Relations(765) 490-5664ryan.reed@wabashnational.com

WABASH NATIONAL CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS(Unaudited - dollars in thousands)

June 30, December 31, 2020 2019Assets Current assets: Cash and cash equivalents $ 135,993 $ 140,516 Accounts receivable, net 123,952 172,737 Inventories 201,068 186,914 Prepaid expenses and other 41,836 41,222 Total current assets 502,849 541,389 Property, plant, and equipment, net 218,637 221,346 Goodwill 204,418 311,026 Intangible assets, net 178,836 189,898 Other assets 37,525 40,932 Total assets $ 1,142,265 $ 1,304,591 Liabilities and Stockholders? Equity Current liabilities: Current portion of long-term debt $ ? $ ? Current portion of finance lease obligations 337 327 Accounts payable 124,747 134,821 Other accrued liabilities 107,030 124,230 Total current liabilities 232,114 259,378 Long-term debt 455,800 455,386 Finance lease obligations 206 378 Deferred income taxes 35,179 37,576 Other non-current liabilities 25,749 30,885 Total liabilities 749,048 783,603 Commitments and contingencies Stockholders? equity: Common stock 200,000,000 shares authorized, $0.01par value, 52,906,115 and 53,473,620 shares 753 750 outstanding, respectivelyAdditional paid-in capital 639,330 638,917 Retained earnings 106,656 221,841 Accumulated other comprehensive losses (6,915 ) (3,978 )Treasury stock at cost, 22,500,750 and 21,640,109 (346,607 ) (336,542 )common shares, respectivelyTotal stockholders' equity 393,217 520,988 Total liabilities and stockholders? equity $ 1,142,265 $ 1,304,591

WABASH NATIONAL CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited - dollars in thousands, except per share amounts)

Three Months Ended June Six Months Ended June 30, 30, 2020 2019 2020 2019Net sales $ 339,153 $ 626,053 $ 726,227 $ 1,159,227 Cost of sales 304,832 538,403 655,163 1,002,887 Gross profit 34,321 87,650 71,064 156,340 General andadministrative 19,633 26,509 45,825 56,649 expensesSelling expenses 4,886 8,494 12,884 16,717 Amortization of 5,493 5,109 10,988 10,238 intangible assetsImpairment and (1,690 ) ? 105,424 ? other, netIncome (loss) from 5,999 47,538 (104,057 ) 72,736 operationsOther income (expense):Interest expense (5,882 ) (7,020 ) (12,154 ) (14,110 )Other, net 285 1,081 405 912 Other expense, net (5,597 ) (5,939 ) (11,749 ) (13,198 )Income (loss) beforeincome tax expense 402 41,599 (115,806 ) 59,538 (benefit)Income tax expense 548 10,639 (9,013 ) 13,798 (benefit)Net (loss) income $ (146 ) $ 30,960 $ (106,793 ) $ 45,740 Net (loss) income per share:Basic $ 0.00 $ 0.56 $ (2.01 ) $ 0.83 Diluted $ 0.00 $ 0.56 $ (2.01 ) $ 0.82 Weighted averagecommon shares outstanding (inthousands):Basic 52,874 55,197 53,015 55,233 Diluted 52,874 55,668 53,015 55,719 Dividends declared $ 0.08 $ 0.08 $ 0.160 $ 0.160 per share

WABASH NATIONAL CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited - dollars in thousands)

Six Months Ended June 30, 2020 2019Cash flows from operating activities Net (loss) income $ (106,793 ) $ 45,740 Adjustments to reconcile net (loss) income to net cash provided by operating activitiesDepreciation 11,657 10,957 Amortization of intangibles 10,988 10,238 Net (gain) loss on sale of property, plant and (1,690 ) 481 equipmentLoss on debt extinguishment ? 53 Deferred income taxes (2,648 ) (2,214 )Stock-based compensation 416 5,377 Impairment 107,114 ? Non-cash interest expense 535 523 Accounts receivable 48,785 10,886 Inventories (14,154 ) (80,163 )Prepaid expenses and other (8,195 ) (325 )Accounts payable and accrued liabilities (22,126 ) 58,210 Other, net (1,235 ) 1,210 Net cash provided by operating activities $ 22,654 $ 60,973 Cash flows from investing activities Capital expenditures (10,921 ) (14,995 )Proceeds from the sale of property, plant, and 2,725 38 equipmentNet cash used in investing activities $ (8,196 ) $ (14,957 )Cash flows from financing activities Proceeds from exercise of stock options ? 55 Dividends paid (8,742 ) (9,061 )Borrowings under revolving credit facilities 45,449 288 Payments under revolving credit facilities (45,449 ) (288 )Principal payments under finance lease obligations (162 ) (152 )Principal payments under term loan credit facility ? (15,470 )Debt issuance costs paid (12 ) (71 )Stock repurchase (10,065 ) (13,852 )Net cash used in financing activities $ (18,981 ) $ (38,551 )Cash and cash equivalents: Net (decrease) increase in cash, cash equivalents, $ (4,523 ) $ 7,465 and restricted cashCash, cash equivalents and restricted cash at 140,516 132,690 beginning of periodCash, cash equivalents, and restricted cash at end $ 135,993 $ 140,155 of period

WABASH NATIONAL CORPORATIONSEGMENTS AND RELATED INFORMATION(Unaudited - dollars in thousands)

Three CommercialMonths Trailer Diversified Final Mile Corporate and ConsolidatedEnded June Products Products Products Eliminations30,2020 Newtrailers 8,000 400 ? ? 8,400 shippedUsedtrailers 185 35 ? ? 220 shipped New $ 218,753 $ 28,176 $ ? $ ? $ 246,929 TrailersUsed 2,273 1,323 ? ? 3,596 TrailersComponents,parts and 9,571 22,166 2,453 (7,884 ) 26,306 serviceEquipment 1,657 12,286 48,379 ? 62,322 and otherTotal netexternal $ 232,254 $ 63,951 $ 50,832 $ (7,884 ) $ 339,153 salesGross $ 22,392 $ 10,761 $ 1,963 $ (795 ) $ 34,321 profitIncome(loss) from $ 18,599 $ 2,242 $ (6,569 ) $ (8,273 ) $ 5,999 operations 2019 Newtrailers 14,250 750 ? ? 15,000 shippedUsedtrailers ? 25 ? ? 25 shipped New $ 385,842 $ 49,325 $ ? $ ? $ 435,167 TrailersUsed 13 739 ? ? 752 TrailersComponents,parts and 10,622 29,007 4,447 (6,575 ) 37,501 serviceEquipment 4,387 17,955 130,370 (79 ) 152,633 and otherTotal netexternal $ 400,864 $ 97,026 $ 134,817 $ (6,654 ) $ 626,053 salesGross $ 46,906 $ 20,123 $ 21,289 $ (668 ) $ 87,650 profitIncome(loss) from $ 39,918 $ 8,911 $ 9,221 $ (10,512 ) $ 47,538 operations

Six Months Commercial Diversified Final Mile CorporateEnded June Trailer Products Products and Consolidated30, Products Eliminations2020 Newtrailers 16,525 1,050 ? ? 17,575 shippedUsedtrailers 220 70 ? ? 290 shipped New $ 456,654 $ 71,488 $ ? $ ? $ 528,142 TrailersUsed 2,591 2,533 ? ? 5,124 TrailersComponents,parts and 18,843 48,248 6,175 (14,984 ) 58,282 serviceEquipment 5,141 24,640 104,927 (29 ) 134,679 and otherTotal netexternal $ 483,229 $ 146,909 $ 111,102 $ (15,013 ) $ 726,227 salesGross $ 46,235 $ 25,902 $ 1,719 $ (2,792 ) $ 71,064 profitIncome(loss) from $ 34,470 $ (3,828 ) $ (114,610 ) $ (20,089 ) $ (104,057 )operations 2019 Newtrailers 26,650 1,450 ? ? 28,100 shippedUsedtrailers 50 50 ? ? 100 shipped New $ 711,661 $ 95,124 $ ? $ ? $ 806,785 TrailersUsed 150 1,326 ? ? 1,476 TrailersComponents,parts and 20,955 64,891 7,863 (14,495 ) 79,214 serviceEquipment 9,143 35,333 227,803 (527 ) 271,752 and otherTotal netexternal $ 741,909 $ 196,674 $ 235,666 $ (15,022 ) $ 1,159,227 salesGross $ 82,846 $ 40,222 $ 34,813 $ (1,541 ) $ 156,340 profitIncome(loss) from $ 66,239 $ 16,955 $ 11,090 $ (21,548 ) $ 72,736 operations

WABASH NATIONAL CORPORATIONSEGMENT AND COMPANY FINANCIAL INFORMATION(Unaudited - dollars in thousands)

Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019Commercial Trailer Products Income from operations $ 18,599 $ 39,918 $ 34,470 $ 66,239 Adjustments: Impairment ? ? 377 ? Adjusted operating income $ 18,599 $ 39,918 $ 34,847 $ 66,239 Diversified Products Income (loss) from operations 2,242 8,911 (3,828 ) 16,955 Adjustments: Impairment ? ? 10,971 ? Adjusted operating income 2,242 8,911 7,143 16,955 Final Mile Products (Loss) income from operations (6,569 ) 9,221 (114,610 ) 11,090 Adjustments: Impairment ? ? 95,766 ? Adjusted operating (loss) (6,569 ) 9,221 (18,844 ) 11,090 income Corporate Loss from operations (8,273 ) (10,512 ) (20,089 ) (21,548 ) Consolidated Income (loss) from operations 5,999 47,538 (104,057 ) 72,736 Adjustments: Impairment ? ? 107,114 ? Adjusted operating income $ 5,999 $ 47,538 $ 3,057 $ 72,736

WABASH NATIONAL CORPORATIONRECONCILIATION OF GAAP FINANCIAL MEASURES TONON-GAAP FINANCIAL MEASURES(Unaudited - dollars in thousands, except per share amounts)

Operating EBITDA^1: Three Months Ended June Six Months Ended June 30, 30, 2020 2019 2020 2019Net (loss) income $ (146 ) $ 30,960 $ (106,793 ) $ 45,740 Income tax expense 548 10,639 (9,013 ) 13,798 (benefit)Interest expense 5,882 7,020 12,154 14,110 Depreciation and 11,526 10,646 22,645 21,195 amortizationStock-based compensation 1,333 2,791 416 5,377 Impairment and other, net (1,690 ) ? 105,424 ? Other, net (285 ) (1,081 ) (405 ) (912 )Operating EBITDA $ 17,168 $ 60,975 $ 24,428 $ 99,308

Adjusted Net (Loss) Income^ Three Months Ended Six Months Ended June 30,2: June 30, 2020 2019 2020 2019Net (loss) income $ (146 ) $ 30,960 $ (106,793 ) $ 45,740 Adjustments: Impairment ? ? 107,114 ? Tax effect of aforementioned ? ? (2,786 ) ? itemsAdjusted net (loss) income $ (146 ) $ 30,960 $ (2,465 ) $ 45,740

Adjusted Basic (2020) and Diluted Three Months Ended Six Months Ended(2019) Earnings Per Share^2: June 30, June 30, 2020 2019 2020 2019Basic (2020) and diluted (2019) $ 0.00 $ 0.56 $ (2.01 ) $ 0.82 earnings per shareAdjustments: Impairment ? ? 2.01 ? Tax effect of aforementioned items ? ? (0.05 ) ? Adjusted basic (2020) and diluted $ 0.00 $ 0.56 $ (0.05 ) $ 0.82 (2019) earnings per share Weighted average basic (2020) anddiluted (2019) shares outstanding 52,874 55,668 53,015 55,719 (in thousands)

1Operating EBITDA is defined as earnings before interest, taxes, depreciation, amortization, stock-based compensation, impairment and other, net, and other non-operating income and expense.2Adjusted net (loss) income and adjusted basic (2020) and diluted (2019) earnings per share reflect adjustments for non-cash impairment and the related tax effects of these adjustments.

WABASH NATIONAL CORPORATIONRECONCILIATION OF FREE CASH FLOW(Unaudited - dollars in thousands)

Six Months Ended June 30, 2020 2019Net cash provided by operating activities $ 22,654 $ 60,973 Capital expenditures (10,921 ) (14,995 )Free cash flow^1 $ 11,733 $ 45,978

1 Free cash flow is defined as net cash provided by operating activities minus capital expenditures.