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Wabash National Corporation Announces Third Quarter 2021 Results

11/09/2021
  • Record backlog of $1.9 billion up 87% YoY
  • Revenue of $482.6 million on increasing new trailer shipments
  • Operating income of $18.3 million
  • Earnings per share of $0.22, exceeding prior outlook
  • 2022 EPS outlook of $1.70 on stronger production run-rates and pricing

LAFAYETTE, Ind., Nov. 09, 2021 (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 September 30, 2021.

Net sales for the third quarter 2021 of $482.6 million increased 37.3% versus the prior year quarter as the company continued to scale its ability to serve strong customer demand. Consolidated gross profit was $51.0 million, or 10.6% of sales. Operating income was $18.3 million, or 3.8% of sales during the quarter. Earnings per share was $0.22 on both a GAAP and non-GAAP basis.

Total company backlog as of September 30, 2021 was approximately $1.9 billion - an increase of $600 million sequentially from Q2 2021. Wabash National's backlog of $1.9 billion represents an increase of 87% compared to September of 2020 and is an all-time record for the Company.

“Wabash continues to execute well in the midst of an uneven business and manufacturing environment,” explained Brent Yeagy, President and Chief Executive Officer. “Generating earnings per share exceeding our prior outlook speaks to our employees' agile performance and this management team's ability to provide credible guidance. We continue to monitor changes in the supply chain and offer our best look at future financial performance.”

For the full year ending December 31, 2021, the company modified its EPS outlook to $0.60 to $0.65.

“As we fine-tune our guidance for the remainder of 2021 to reflect increased supply chain and material cost headwinds, we are excited by the record strength in our order book and the opportunity for strong financial performance in 2022," said Yeagy. "Assuming little change in labor and supply chain conditions, the combination of a stronger jumping off point in build rates and a hard reset on pricing within our 2022 order book allows us to offer an initial EPS outlook of $1.70 for 2022.”

Business Segment Highlights

Effective in the third quarter of 2021, Wabash has updated its segment reporting structure to align with how the business is operated and how the company goes to market.

"Following our One Wabash organizational changes, we are excited to present a refreshed segment view that is consistent with how we are now managing our business," said Mike Pettit, Senior Vice President and Chief Financial Officer. "Our new segmentation structure reflects our enhanced focus on new growth opportunities and also aligns how we discuss the business with how we operate the business. This will create enhanced transparency and a more simplified discussion of how and where value is created at Wabash for our employees, our customers, and our shareholders."

The table below is a summary of select segment operating and financial results prior to the elimination of intersegment sales for the third quarter of 2021 and 2020. A complete disclosure of the results by individual segment is included in the tables following this release.

    Wabash National Corporation        
Three Months Ended September 30,   2021   2020        
New Units Shipped                
Trailers   12,455     8,485          
Truck bodies   3,780     3,600          
                 
    Transportation Solutions   Parts & Service
Three Months Ended September 30,   2021   2020   2021   2020
    (dollars in thousands)
Net sales   $ 442,636     $ 307,357     $ 41,903     $ 47,258  
Gross profit   $ 44,705     $ 34,528     $ 8,268     $ 10,113  
Gross profit margin   10.1 %     11.2%     19.7 %     21.4%  
Income (loss) from operations   $ 25,970     $ 13,522     $ 4,148     $ 5,878  
Income (loss) from operations margin   5.9 %     4.4%     9.9 %     12.4%  
Adjusted income (loss) from operations   $ 25,970     $ 13,522     $ 4,148     $ 5,878  
Adjusted income (loss) from operations margin   5.9 %     4.4%     9.9 %     12.4%  

Transportation Solutions’ net sales for the third quarter were $442.6 million, an increase of 44.0% as compared to the prior year quarter, as operations scaled to meet improved customer demand. Operating income was $26.0 million or 5.9% of sales during the quarter.

Parts & Service's net sales for the third quarter were $41.9 million, a decrease of 11.3% as compared to the prior year quarter, primarily due to the divestiture of Extract Technology on June 30, 2021. Operating income was $4.1 million, or 9.9% of sales during the quarter.

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, free cash flow, adjusted operating income (loss), adjusted net income (loss), adjusted earnings per share, adjusted segment EBITDA, and adjusted segment EBITDA margin. 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 income (loss), 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 Company’s 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 income (loss), is beneficial to an investor’s understanding of the Company’s operating performance. A reconciliation of operating EBITDA to net income (loss) is included in the tables following this release.

Free cash flow is defined as net cash (used in) provided by operating activities minus capital expenditures. Management believes providing free cash flow is useful for investors to understand the Company’s 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 investor’s understanding of the Company’s operating performance. A reconciliation of free cash flow to cash (used in) provided by operating activities is included in the tables following this release.

Adjusted operating income (loss) and margin, non-GAAP financial measures, exclude 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 Company’s operating results as they are not indicative of the Company’s core operating results or may obscure trends useful in evaluating the Company’s continuing activities. Accordingly, the Company presents adjusted operating income (loss) and margin 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) and margin to provide investors with a better understanding of the Company’s 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 release.

Adjusted net income (loss) and adjusted earnings per diluted share reflect adjustments for the impact of sales and divestitures, debt transactions, and non-cash impairment, and the related tax effects of these adjustments. Management believes providing adjusted measures and excluding certain items facilitates comparisons to the Company’s prior year periods and, when combined with the GAAP presentation of net income (loss) and diluted net income (loss) per share, is beneficial to an investor’s understanding of the Company’s performance.

Adjusted segment EBITDA, a non-GAAP financial measure, is calculated by adding back segment depreciation and amortization expense to segment operating income (loss), and excludes certain costs, expenses, other charges, gains or income that are included in the determination of operating income (loss) under GAAP, but that management would not consider important in evaluating the quality of the Company’s segment operating results as they are not indicative of each segment's core operating results or may obscure trends useful in evaluating the segment's continuing activities. Adjusted segment EBITDA Margin is calculated by dividing Adjusted segment EBITDA by segment total net sales. A reconciliation of adjusted segment EBITDA to income (loss) from operations is included in the tables following this release.

Third Quarter 2021 Conference Call

Wabash National will discuss its results during its quarterly investor conference call on Tuesday, November 9, 2021, beginning at 10:00 a.m. EST. The call and an accompanying slide presentation will be accessible on the "Investors" section of the Company’s website www.wabashnational.com. The conference call will also be accessible by dialing (833) 476-0947, conference ID 3504758. A replay of the call will be available on the site shortly after the conclusion of the presentation.

About Wabash National Corporation

As the innovation leader of engineered solutions for the transportation, logistics and distribution industries, Wabash National Corporation (NYSE: WNC) is Changing How the World Reaches You™. Headquartered in Lafayette, Indiana, the company’s mission is to enable customers to succeed with breakthrough ideas and solutions that help them move everything from first to final mile. Wabash National designs and manufactures a diverse range of products, including: dry freight and refrigerated trailers, platform trailers, liquid tank trailers, dry and refrigerated truck bodies, structural composite panels and products, trailer aerodynamic solutions and specialty food grade equipment. Its innovative products are sold under the following brand names: Wabash National®, Benson®, Brenner® Tank, Bulk Tank International, DuraPlate®, 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 Company’s 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 Company’s 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 Company’s 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 Company’s 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 Company’s 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 Company’s reports to its stockholders and periodic reports on Forms 10-K and 10-Q.

 

WABASH NATIONAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited - dollars in thousands)
 
  September 30,
2021
  December 31,
2020
Assets      
Current assets:      
Cash and cash equivalents $ 49,374      $ 217,677   
Accounts receivable, net 213,808      101,301   
Inventories, net 259,635      163,750   
Prepaid expenses and other 59,347      63,036   
Total current assets 582,164      545,764   
Property, plant, and equipment, net 208,456      209,676   
Goodwill 188,443      199,560   
Intangible assets, net 148,418      166,887   
Other assets 43,859      39,583   
Total assets $ 1,171,340      $ 1,161,470   
Liabilities and Stockholders’ Equity      
Current liabilities:      
Current portion of long-term debt $ —      $ —   
Current portion of finance lease obligations 119      348   
Accounts payable 181,251      104,425   
Other accrued liabilities 106,607      130,980   
Total current liabilities 287,977      235,753   
Long-term debt 419,130      447,979   
Finance lease obligations —      30   
Deferred income taxes 49,465      46,777   
Other non-current liabilities 28,574      26,052   
Total liabilities 785,146      756,591   
Commitments and contingencies      
Stockholders’ equity:      
Common stock 200,000,000 shares authorized, $0.01 par value, 49,574,651 and 52,536,482 shares outstanding, respectively 759      755   
Additional paid-in capital 652,530      644,695   
Retained earnings 121,495      107,233   
Accumulated other comprehensive income 21,866      7,633   
Treasury stock at cost, 26,358,147 and 23,004,607 common shares, respectively (410,456 )   (355,437 )
Total stockholders' equity 386,194      404,879   
Total liabilities and stockholders’ equity $ 1,171,340      $ 1,161,470   

 

WABASH NATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited - dollars in thousands, except per share amounts)
 
  Three Months Ended September 30,   Nine Months Ended September 30,
  2021   2020   2021   2020
Net sales $ 482,566     $ 351,584     $ 1,323,991     $ 1,077,811  
Cost of sales 431,521     308,390     1,170,172     963,553  
Gross profit 51,045     43,194     153,819     114,258  
General and administrative expenses 20,966     22,749     66,740     68,574  
Selling expenses 5,590     6,510     18,320     19,394  
Amortization of intangible assets 5,631     5,496     17,228     16,484  
Impairment and other, net 595     31     (631 )   105,455  
Income (loss) from operations 18,263     8,408     52,162     (95,649 )
Other income (expense):              
Interest expense (5,847 )   (5,749 )   (18,031 )   (17,903 )
Other, net 232     (57 )   (195 )   348  
Other expense, net (5,615 )   (5,806 )   (18,226 )   (17,555 )
Income (loss) before income tax expense (benefit) 12,648     2,602     33,936     (113,204 )
Income tax expense (benefit) 1,640     (1,285 )   7,459     (10,298 )
Net income (loss) $ 11,008     $ 3,887     $ 26,477     $ (102,906 )
               
Net income (loss) per share:              
Basic $ 0.22     $ 0.07     $ 0.52     $ (1.94 )
Diluted $ 0.22     $ 0.07     $ 0.51     $ (1.94 )
Weighted average common shares outstanding (in thousands):              
Basic 49,974     52,912     51,116     52,980  
Diluted 50,581     53,380     51,785     52,980  
               
Dividends declared per share $ 0.08     $ 0.08     $ 0.24     $ 0.24  

 

WABASH NATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - dollars in thousands)
 
  Nine Months Ended September 30,
  2021   2020
Cash flows from operating activities      
Net income (loss) $ 26,477     $ (102,906 )
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities      
Depreciation 19,593     18,656  
Amortization of intangibles 17,228     16,484  
Net gain on sale of property, plant and equipment and business divestiture (1,447 )   (1,669 )
Loss on debt extinguishment 452     219  
Deferred income taxes (1,756 )   (753 )
Stock-based compensation 5,889     2,278  
Impairment 817     107,114  
Non-cash interest expense 882     807  
Accounts receivable (118,176 )   68,095  
Inventories (96,818 )   (14,596 )
Prepaid expenses and other 1,054     (3,086 )
Accounts payable and accrued liabilities 65,424     20,128  
Other, net 6,152     (3,672 )
Net cash (used in) provided by operating activities $ (74,229 )   $ 107,099  
Cash flows from investing activities      
Capital expenditures (20,192 )   (13,719 )
Proceeds from the sale of assets and business divestiture 21,967     2,726  
Net cash provided by (used in) investing activities $ 1,775     $ (10,993 )
Cash flows from financing activities      
Proceeds from exercise of stock options 1,949     44  
Dividends paid (12,470 )   (13,015 )
Borrowings under revolving credit facilities 347     45,584  
Payments under revolving credit facilities (347 )   (45,584 )
Principal payments under finance lease obligations (259 )   (244 )
Borrowings under term loan credit facility, net of original issuance discount     148,500  
Principal payments under term loan credit facility (30,000 )   (135,228 )
Principal payments against senior notes     (10,000 )
Debt issuance costs paid (50 )   (792 )
Stock repurchases (55,019 )   (10,065 )
Net cash used in financing activities $ (95,849 )   $ (20,800 )
Cash and cash equivalents:      
Net (decrease) increase in cash, cash equivalents, and restricted cash $ (168,303 )   $ 75,306  
Cash, cash equivalents, and restricted cash at beginning of period 217,677     140,516  
Cash, cash equivalents, and restricted cash at end of period $ 49,374     $ 215,822  

 

WABASH NATIONAL CORPORATION
SEGMENTS AND RELATED INFORMATION
(Unaudited - dollars in thousands)
 
    Wabash National Corporation        
Three Months Ended September 30,   2021   2020        
Units Shipped                
New trailers   12,455     8,485          
New truck bodies   3,780     3,600          
Used trailers   15     140          
                 
Three Months Ended September 30,   Transportation
Solutions
  Parts & Service   Corporate and
Eliminations
  Consolidated
2021                
New Trailers   $ 375,430     $     $     $ 375,430  
Used Trailers       465         465  
Components, parts and service       31,974     (1,973 )   30,001  
Equipment and other   67,206     9,464         76,670  
Total net external sales   $ 442,636     $ 41,903     $ (1,973 )   $ 482,566  
Gross profit   $ 44,705     $ 8,268     $ (1,928 )   $ 51,045  
Income (loss) from operations   $ 25,970     $ 4,148     $ (11,855 )   $ 18,263  
Adjusted income (loss) from operations1   $ 25,970     $ 4,148     $ (11,855 )   $ 18,263  
                 
2020                
New Trailers   $ 251,998     $ 1,510     $ (444 )   $ 253,064  
Used Trailers   505     1,456         1,961  
Components, parts and service       29,369     (2,587 )   26,782  
Equipment and other   54,854     14,923         69,777  
Total net external sales   $ 307,357     $ 47,258     $ (3,031 )   $ 351,584  
Gross profit   $ 34,528     $ 10,113     $ (1,447 )   $ 43,194  
Income (loss) from operations   $ 13,522     $ 5,878     $ (10,992 )   $ 8,408  
Adjusted income (loss) from operations1   $ 13,522     $ 5,878     $ (9,836 )   $ 9,564  

1 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 Company’s operating results as they are not indicative of the Company’s core operating results or may obscure trends useful in evaluating the Company’s 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 Company’s view of our results as compared to prior periods.

 

WABASH NATIONAL CORPORATION
SEGMENTS AND RELATED INFORMATION
(Unaudited - dollars in thousands)
 
    Wabash National Corporation        
Nine Months Ended September 30,   2021   2020        
Units Shipped                
New trailers   33,710     26,030          
New truck bodies   13,330     10,130          
Used trailers   70     430          
                 
Nine Months Ended September 30,   Transportation
Solutions
  Parts & Service   Corporate and
Eliminations
  Consolidated
2021                
New Trailers   $ 966,193     $     $     $ 966,193  
Used Trailers   165     1,690         1,855  
Components, parts and service       101,747     (5,205 )   96,542  
Equipment and other   223,815     35,586         259,401  
Total net external sales   $ 1,190,173     $ 139,023     $ (5,205 )   $ 1,323,991  
Gross profit   $ 129,776     $ 28,912     $ (4,869 )   $ 153,819  
Income (loss) from operations   $ 69,492     $ 18,509     $ (35,839 )   $ 52,162  
Adjusted income (loss) from operations1   $ 69,492     $ 16,635     $ (35,839 )   $ 50,288  
                 
2020                
New Trailers   $ 781,497     $ 3,098     $ (3,390 )   $ 781,205  
Used Trailers   2,979     4,106         7,085  
Components, parts and service       92,500     (7,437 )   85,063  
Equipment and other   169,673     34,785         204,458  
Total net external sales   $ 954,149     $ 134,489     $ (10,827 )   $ 1,077,811  
Gross profit   $ 87,195     $ 31,301     $ (4,238 )   $ 114,258  
Loss from operations   $ (43,098 )   $ (21,466 )   $ (31,085 )   $ (95,649 )
Adjusted income (loss) from operations1   $ 25,159     $ 17,391     $ (29,929 )   $ 12,621  

1 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 Company’s operating results as they are not indicative of the Company’s core operating results or may obscure trends useful in evaluating the Company’s 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 Company’s view of our results as compared to prior periods.

 

WABASH NATIONAL CORPORATION
SEGMENT AND COMPANY FINANCIAL INFORMATION
(Unaudited - dollars in thousands)
 
Adjusted Operating Income (Loss) 1 Three Months Ended
September 30,
  Nine Months Ended
September 30,
  2021   2020   2021   2020
Transportation Solutions              
Income (loss) from operations $ 25,970     $ 13,522     $ 69,492     $ (43,098 )
Adjustments:              
Impairment             68,257  
Adjusted operating income $ 25,970     $ 13,522     $ 69,492     $ 25,159  
               
Parts & Service              
Income (loss) from operations 4,148     5,878     18,509     (21,466 )
Adjustments:              
Impairment             38,857  
Gain on divestiture of Extract Technology         (1,874 )    
Adjusted operating income 4,148     5,878     16,635     17,391  
               
Corporate              
Loss from operations (11,855 )   (10,992 )   (35,839 )   (31,085 )
Adjustments:              
Debt transactions     1,156         1,156  
Adjusted operating loss (11,855 )   (9,836 )   (35,839 )   (29,929 )
               
Consolidated              
Income (loss) from operations $ 18,263     $ 8,408     $ 52,162     $ (95,649 )
Adjustments:              
Impairment             107,114  
Gain on divestiture of Extract Technology         (1,874 )    
Debt transactions     1,156         1,156  
Adjusted operating income $ 18,263     $ 9,564     $ 50,288     $ 12,621  

1 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 Company’s operating results as they are not indicative of the Company’s core operating results or may obscure trends useful in evaluating the Company’s 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 Company’s view of our results as compared to prior periods.

 

WABASH NATIONAL CORPORATION
RECONCILIATION OF GAAP FINANCIAL MEASURES TO
NON-GAAP FINANCIAL MEASURES
(Unaudited - dollars in thousands, except per share amounts)
 
Operating EBITDA 1 : Three Months Ended September 30,   Nine Months Ended September 30,
  2021   2020   2021   2020
Net income (loss) $ 11,008     $ 3,887     $ 26,477     $ (102,906 )
Income tax expense (benefit) 1,640     (1,285 )   7,459     (10,298 )
Interest expense 5,847     5,749     18,031     17,903  
Depreciation and amortization 12,343     12,495     36,821     35,140  
Stock-based compensation 1,673     1,862     5,889     2,278  
Debt issuance costs expensed     1,156         1,156  
Impairment and other, net 595     31     (631 )   105,455  
Other, net (232 )   57     195     (348 )
Operating EBITDA $ 32,874     $ 23,952     $ 94,241     $ 48,380  

 

Adjusted Net Income 2 : Three Months Ended September 30,   Nine Months Ended September 30,
  2021   2020   2021   2020
Net income (loss) $ 11,008     $ 3,887     $ 26,477     $ (102,906 )
Adjustments:              
Debt transactions3     1,375     452     1,375  
Impairment             107,114  
Gain on divestiture of Extract Technology         (1,874 )    
Tax effect of aforementioned items     (564 )   327     (3,350 )
Adjusted net income $ 11,008     $ 4,698     $ 25,382     $ 2,233  

 

Adjusted Diluted Earnings Per Share 2 : Three Months Ended September 30,   Nine Months Ended September 30,
  2021   2020   2021   2020
Diluted earnings per share $ 0.22     $ 0.07     $ 0.51     $ (1.94 )
Adjustments:              
Debt transactions3     0.03     0.01     0.03  
Impairment             2.02  
Gain on divestiture of Extract Technology         (0.04 )    
Tax effect of aforementioned items     (0.01 )   0.01     (0.06 )
Adjusted diluted earnings per share $ 0.22     $ 0.09     $ 0.49     $ 0.04  
               
Weighted average diluted shares outstanding (in thousands) 50,581     53,380     51,785     53,299  

1 Operating EBITDA is defined as earnings before interest, taxes, depreciation, amortization, stock-based compensation, debt issuance costs expensed within General & administrative expenses related to the closing of the New Term Loan Credit Agreement, impairment and other, net, and other non-operating income and expense. Management believes providing operating EBITDA is useful for investors to understand the Company’s 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 income (loss), is beneficial to an investor’s understanding of the Company’s operating performance.

2 Adjusted net income and adjusted earnings per diluted share reflect adjustments for the impact of sales and divestitures, debt transactions, and non-cash impairment, and the related tax effects of these adjustments. Management believes providing adjusted measures and excluding certain items facilitates comparisons to the Company’s prior year periods and, when combined with the GAAP presentation of net income (loss) and diluted net income (loss) per share, is beneficial to an investor’s understanding of the Company’s performance.

3 Debt transactions include debt issuance costs within General & administrative expenses related to the closing of the New Term Loan Credit Agreement and loss on debt extinguishment charges included in Other, net.

 

WABASH NATIONAL CORPORATION
RECONCILIATION OF FREE CASH FLOW1
(Unaudited - dollars in thousands)
 
  Nine Months Ended September 30,
  2021   2020
Net cash (used in) provided by operating activities $ (74,229 )   $ 107,099   
Capital expenditures (20,192 )   (13,719 )
Free cash flow1 $ (94,421 )   $ 93,380   

1 Free cash flow is defined as net cash (used in) provided by operating activities minus capital expenditures. Management believes providing free cash flow is useful for investors to understand the Company’s 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 investor’s understanding of the Company’s operating performance.

 

WABASH NATIONAL CORPORATION
RECONCILIATION OF ADJUSTED SEGMENT EBITDA1
AND ADJUSTED SEGMENT EBITDA MARGIN1
(Unaudited - dollars in thousands)
 
  Transportation Solutions   Parts & Service
Three Months Ended September 30, 2021 2021   2020   2021   2020
Income from operations $ 25,970     $ 13,522     $ 4,148     $ 5,878  
Depreciation and amortization 10,617     10,278     1,062     1,337  
Impairment and other, net 109     108     492     (156 )
Adjusted segment EBITDA $ 36,696     $ 23,908     $ 5,702     $ 7,059  
               
Adjusted segment EBITDA margin 8.3 %   7.8 %   13.6 %   14.9 %

 

  Transportation Solutions   Parts & Service
Nine Months Ended September 30, 2021 2021   2020   2021   2020
Income (loss) from operations $ 69,492     $ (43,098 )   $ 18,509     $ (21,466 )
Depreciation and amortization 31,455     29,437     3,674     4,024  
Impairment and other, net 935     66,231     (1,560 )   39,229  
Adjusted segment EBITDA $ 101,882     $ 52,570     $ 20,623     $ 21,787  
               
Adjusted segment EBITDA margin 8.6 %   5.5 %   14.8 %   16.2 %

1 Adjusted segment EBITDA, a non-GAAP financial measure, is calculated by adding back segment depreciation and amortization expense to segment operating income (loss), and excludes certain costs, expenses, other charges, gains or income that are included in the determination of operating income (loss) under GAAP, but that management would not consider important in evaluating the quality of the Company’s segment operating results as they are not indicative of each segment's core operating results or may obscure trends useful in evaluating the segment's continuing activities. Adjusted segment EBITDA margin is calculated by dividing Adjusted segment EBITDA by segment total net sales.

 

WABASH NATIONAL CORPORATION
TRANSPORTATION SOLUTIONS AND PARTS & SERVICE SEGMENTS - SELECTED DATA
(Unaudited - dollars in thousands)
                                           
  Q3 2021   Q2 2021   Q1 2021   Q4 2020   Q3 2020   Q2 2020   Q1 2020   Q4 2019   Q3 2019   Q2 2019   Q1 2019
REVENUE                                          
Transportation Solutions $ 442,636     $ 402,300     $ 345,236     $ 361,279     $ 307,358     $ 302,687     $ 344,104     $ 533,640     $ 533,385     $ 572,376     $ 475,408  
Parts & Service $ 41,903     $ 48,633     $ 48,487     $ 44,985     $ 47,258     $ 40,354     $ 46,877     $ 50,023     $ 51,814     $ 60,224     $ 63,958  
                                           
OPERATING INCOME (LOSS) AND ADJUSTED OPERATING INCOME 1
                                           
Transportation Solutions                                          
Operating income (loss) $ 25,970     $ 26,848     $ 16,674     $ 13,396     $ 13,522     $ 9,069     $ (65,689 )   $ 37,475     $ 41,687     $ 48,769     $ 25,958  
Adjustments:                                          
Loss on divestiture of Beall brand $     $     $     $ 2,119     $     $     $     $     $     $     $  
Impairment $     $     $     $     $     $     $ 68,257     $     $     $     $  
Adjusted operating income1 $ 25,970     $ 26,848     $ 16,674     $ 15,515     $ 13,522     $ 9,069     $ 2,568     $ 37,475     $ 41,687     $ 48,769     $ 25,958  
                                           
Parts & Service                                          
Operating income (loss) $ 4,148     $ 8,028     $ 6,333     $ 8,807     $ 5,878     $ 5,132     $ (32,476 )   $ 5,356     $ 6,609     $ 9,275     $ 10,282  
Adjustments:                                          
Gain on divestiture of Extract Technology $     $ (1,874 )   $     $     $     $     $     $     $     $     $  
Gain on sale of Columbus branch $     $     $     $ (2,257 )   $     $     $     $     $     $     $  
Impairment $     $     $     $     $     $     $ 38,857     $     $     $     $  
Adjusted operating income1 $ 4,148     $ 6,154     $ 6,333     $ 6,550     $ 5,878     $ 5,132     $ 6,381     $ 5,356     $ 6,609     $ 9,275     $ 10,282  
                                           
UNITS                                          
New trailers 12,455   11,595   9,660   10,585   8,485   8,425   9,120   14,980   14,470   14,965   13,095
New truck bodies 3,780   4,790   4,760   3,300   3,600   3,025   3,505   5,090   6,460   8,060   6,225
Used trailers 15   15   40   170   140   220   70   40   35   30   45

1 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 Company’s operating results as they are not indicative of the Company’s core operating results or may obscure trends useful in evaluating the Company’s 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 Company’s view of our results as compared to prior periods.

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

Investor Relations:
Ryan Reed
Director, Corporate Development & Investor Relations
(765) 490-5664
ryan.reed@wabashnational.com


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