Wabash National Corp. (WNC, Financial) filed Quarterly Report for the period ended 2009-03-31.
Wabash National Corporation is one of the leading manufacturers of semi trailers in North America. Established in 1985 the company specializes in the design and production of dry freight vans refrigerated vans flatbed trailers drop deck trailers and intermodal equipment. Its innovative core products are sold under the DuraPlate ArcticLite and Eagle brand names. The company operates two wholly owned subsidiaries: Transcraft Corporation a manufacturer of flatbed and drop deck trailers; and Wabash National Trailer Centers a retail distributor of new and used trailers and aftermarket parts throughout the U.S. and Canada. Wabash National Corp. has a market cap of $46.6 million; its shares were traded at around $1.52 with and P/S ratio of 0.1.
Retail and distribution segment sales were $20.6 million in the first quarter of 2009, down $7.8 million, or 27.5% compared to the prior year first quarter. New trailer sales decreased $4.9 million, or 43.5%, due to a 50.0% reduction in volumes primarily as a result of weak market demand. Used trailer sales were down $2.1 million, or 27.1%, due to lower volumes and lower average selling prices as depressed market conditions for used trailers have driven values down. Parts and service sales were down $0.7 million, or 7.2%, in the first quarter of 2009 compared to the prior year period due to continued weak market demand.
In March 2007, we entered into the Revolving Facility with our lenders. The Revolving Facility replaced our prior facility. As amended the Revolving Facility has a capacity of $200 million, subject to a borrowing base, with a maturity date of March 6, 2012. Subsequent to the quarter ending March 31, 2009, events of default occurred under the Revolving Facility, which permits the lenders to increase the interest on the outstanding principal by 2%, to cause an acceleration of the maturity of borrowings, to restrict advances, and to terminate the Revolving Facility. The events of default under the Revolving Facility include: our failure to deliver audited financial statements for fiscal year 2008 by March 31, 2009; that our report of the independent registered public accounting firm accompanying our audited financial statements for fiscal year 2008 included an explanatory paragraph with respect to our ability to continue as a going concern; our failure to deliver prompt written notification of name changes of subsidiaries; our failure to have a minimum fixed charge coverage ratio of 1.1:1.0 when the available borrowing capacity under the Revolving Facility is below $30 million; and, requesting loans under the Revolving Facility during the existence of a default or event of default under the Revolving Facility. In accordance with the terms of the Revolving Facility, on April 1, 2009, the agent increased the interest on the outstanding principal under the Revolving Facility by 2% and implemented availability reserves that result in a reduction of our borrowing base under the Revolving Facility by $25 million.
Cash provided by operating activities in the first quarter of 2009 amounted to $2.7 million compared to $6.3 million used in operating activities in the same period of 2008. The change was primarily a result of a $27.5 million improvement in working capital offset by a $18.5 million reduction in net income, adjusted for non-cash items. The following is a discussion of factors impacting certain working capital items in the first quarter of 2009 compared to the prior year period:
Investing activities used $0.5 million during the first quarter of 2009 compared to $1.7 million in the prior year period. The decrease of $1.2 million from the prior year was due to reduced capital spending and our efforts to limit capital spending to required maintenance projects and other cost reduction initiatives.
As of March 31, 2009, our liquidity position, defined as cash on hand and available borrowing capacity, net of availability reserves as established in our Forbearance Agreement, amounted to approximately $14.9 million and total debt and capital lease obligations amounted to approximately $58.0 million. Our borrowing capacity has been adversely impacted by the events of default under our
Read the The complete ReportWNC is in the portfolios of Arnold Schneider of Schneider Capital Management, Charles Brandes of Brandes Investment.
Wabash National Corporation is one of the leading manufacturers of semi trailers in North America. Established in 1985 the company specializes in the design and production of dry freight vans refrigerated vans flatbed trailers drop deck trailers and intermodal equipment. Its innovative core products are sold under the DuraPlate ArcticLite and Eagle brand names. The company operates two wholly owned subsidiaries: Transcraft Corporation a manufacturer of flatbed and drop deck trailers; and Wabash National Trailer Centers a retail distributor of new and used trailers and aftermarket parts throughout the U.S. and Canada. Wabash National Corp. has a market cap of $46.6 million; its shares were traded at around $1.52 with and P/S ratio of 0.1.
Highlight of Business Operations:
Manufacturing segment sales were $57.3 million in the first quarter of 2009, down $75.4 million, or 56.8%, compared to the first quarter of 2008. The reduction in sales is due primarily to the continued weak market demand for new trailers as sales decreased approximately 3,400 units, or $73.7 million. The decreases in sales volume in the first quarter of 2009 as compared to the prior year period were slightly offset by higher average selling prices.Retail and distribution segment sales were $20.6 million in the first quarter of 2009, down $7.8 million, or 27.5% compared to the prior year first quarter. New trailer sales decreased $4.9 million, or 43.5%, due to a 50.0% reduction in volumes primarily as a result of weak market demand. Used trailer sales were down $2.1 million, or 27.1%, due to lower volumes and lower average selling prices as depressed market conditions for used trailers have driven values down. Parts and service sales were down $0.7 million, or 7.2%, in the first quarter of 2009 compared to the prior year period due to continued weak market demand.
In March 2007, we entered into the Revolving Facility with our lenders. The Revolving Facility replaced our prior facility. As amended the Revolving Facility has a capacity of $200 million, subject to a borrowing base, with a maturity date of March 6, 2012. Subsequent to the quarter ending March 31, 2009, events of default occurred under the Revolving Facility, which permits the lenders to increase the interest on the outstanding principal by 2%, to cause an acceleration of the maturity of borrowings, to restrict advances, and to terminate the Revolving Facility. The events of default under the Revolving Facility include: our failure to deliver audited financial statements for fiscal year 2008 by March 31, 2009; that our report of the independent registered public accounting firm accompanying our audited financial statements for fiscal year 2008 included an explanatory paragraph with respect to our ability to continue as a going concern; our failure to deliver prompt written notification of name changes of subsidiaries; our failure to have a minimum fixed charge coverage ratio of 1.1:1.0 when the available borrowing capacity under the Revolving Facility is below $30 million; and, requesting loans under the Revolving Facility during the existence of a default or event of default under the Revolving Facility. In accordance with the terms of the Revolving Facility, on April 1, 2009, the agent increased the interest on the outstanding principal under the Revolving Facility by 2% and implemented availability reserves that result in a reduction of our borrowing base under the Revolving Facility by $25 million.
Cash provided by operating activities in the first quarter of 2009 amounted to $2.7 million compared to $6.3 million used in operating activities in the same period of 2008. The change was primarily a result of a $27.5 million improvement in working capital offset by a $18.5 million reduction in net income, adjusted for non-cash items. The following is a discussion of factors impacting certain working capital items in the first quarter of 2009 compared to the prior year period:
Investing activities used $0.5 million during the first quarter of 2009 compared to $1.7 million in the prior year period. The decrease of $1.2 million from the prior year was due to reduced capital spending and our efforts to limit capital spending to required maintenance projects and other cost reduction initiatives.
As of March 31, 2009, our liquidity position, defined as cash on hand and available borrowing capacity, net of availability reserves as established in our Forbearance Agreement, amounted to approximately $14.9 million and total debt and capital lease obligations amounted to approximately $58.0 million. Our borrowing capacity has been adversely impacted by the events of default under our
Read the The complete ReportWNC is in the portfolios of Arnold Schneider of Schneider Capital Management, Charles Brandes of Brandes Investment.
