LAFAYETTE, Ind. — Wabash National Corporation (NYSE: WNC) reported a net loss of $110.7 million, or $3.69 per diluted share, for the fourth quarter of 2008 on net sales of $230.7 million. For the same quarter last year, the Company reported net income of $5.6 million, or $0.18 per diluted share, on net sales of $257.8 million. For the twelve months ending December 31, 2008, net losses totaled $124.7 million, or $4.16 per diluted share, on net sales of $836.2 million. For the comparable period in 2007, the Company reported net income of $16.3 million, or $0.52 per diluted share, on net sales of $1.1billion.
Fourth quarter and full year 2008 results include previously announced non-cash charges related to a goodwill impairment of $66.3 million and a charge to income tax expense of approximately $23.1 million related to establishing a full valuation allowance on previously established net deferred tax assets. Results for the fourth quarter and full year 2007 include the recognition of $3.3 million of foreign currency gains related to the Company’s sale of its Canadian branches and a gain of $0.5 million on the early retirement of long-term debt.
Dick Giromini, President and Chief Executive Officer, stated, “Today’s operating environment within the markets we serve is as challenging as any in the history of Wabash National and the broader industry. As expected, the fourth quarter proved to be the most difficult quarter of the year, as margins were adversely impacted by the overhang of high raw material costs from prior periods, combined with a challenging pricing environment. To a lesser extent, our performance during the quarter was also impacted by fewer production days related to the holiday season and an extended annual shutdown. Despite these challenges, we nonetheless were successful in increasing our market share as a result of our industry-leading product offerings and the strength of our customer base. Additionally, our diversification efforts received a jumpstart with the award of the PODS manufacturing agreement, and the ramp-up of our Cadiz, KY aluminum flatbed and dump acquisition.
“Our order backlog as of December 31, 2008 was approximately $110 million driven by slow order placement as customers continue to maintain a wait and see approach,” continued Giromini. “In response to the near-term outlook for the broader economy, our industry, and for Wabash National, we continue to proactively and aggressively implement cost reduction actions to improve both our operating performance and our liquidity. Recent actions include:
- Staffing reductions now totaling 180 salaried associates, bringing total salaried headcount reductions to over 30% since the beginning of the industry downturn in early 2007,
- Base salary reductions of 10% for all Officers of the Company and temporary reductions of 10% of annualized base salary for all remaining salaried associates,
- Continued close monitoring of the costs associated with hourly associates including the elimination of certain incentives,
- Cancelled or delayed non-critical development and capital projects.
“We are successfully working with our suppliers on improved prices and terms, and we have initiated discussions with our bank group to modify our revolving credit facility to seek to assure continued availability at appropriate levels in light of current operating conditions. These discussions are at an early stage but members of our bank group were with us in the tough times earlier this decade and we feel we have a good and constructive relationship with the group. We are also exploring ways to strengthen our financial position through capital-raising or other steps.
“We will continue to closely monitor our cost structure going forward and will act decisively to right size the business further if market dynamics dictate. We are confident we are taking the necessary steps to prudently manage the business in spite of a very difficult operating environment.”
Non-Cash Charges
During the fourth quarter, the Company recorded non-cash charges relating to goodwill impairment and income tax expense. After reviewing goodwill for impairment during the fourth quarter, the Company determined that its goodwill, related to its platform trailer (resulting from the acquisition of Transcraft) and wood products manufacturing operations, was impaired and recorded a charge of $66.3 million. The determination that goodwill was impaired was made after considering the current macroeconomic environment, the depressed market price of the Company’s common stock, and the present value of expected future cash flows.
Additionally, the Company reported a fourth quarter charge to income tax expense of $23.1 related to establishing a full valuation allowance on its previously established net deferred tax assets. The Company considered all available evidence, both positive and negative, and concluded that it was no longer more likely than not that it would realize the value of its net deferred tax assets.
Director Resignation
Effective February 12, 2009, Mr. William Greubel, resigned as a member of our Board of Directors. We thank Bill for his dedicated service to Wabash National since 2002 as President and CEO, Chairman of the Board of Directors, and most recently as Director.
Fourth Quarter and Full Year 2008 Conference Call
Wabash National Corporation conducted a conference call to review and discuss its fourth quarter, and full year results on Tuesday, February 17, 2009, at 10:00 a.m. EST. The call has been archived at www.wabashnational.com and will remain available through May 12, 2009.
