Wabash National Corp. (WNC, Financial) filed Quarterly Report for the period ended 2009-09-30.
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 $57.5 million; its shares were traded at around $1.84 with and P/S ratio of 0.1.
Retail and distribution segment sales were $16.4 million in the third quarter of 2009, down $26.7 million, or 61.9% compared to the prior year third quarter. Weak market demand across all product lines yielded reduced volumes as compared to the previous year period. New trailer sales decreased $18.9 million, or 82.6%, due to an 88.9% reduction in volumes. Used trailer sales were down $7.0 million, or 63.1%, primarily due to a 63.6% reduction in volumes. Parts and service sales were down $0.8 million, or 8.6%.
Cost of sales for the third quarter of 2009 was $88.6 million, a decrease of $145.3 million, or 62.1% compared to the third quarter of 2008. As a percentage of net sales, cost of sales was 100.4% in the third quarter of 2009 compared to 96.3% in the third quarter of 2008.
Manufacturing segment cost of sales, as detailed in the following table, was $72.3 million for the third quarter of 2009, a decrease of $120.2 million, or 62.4%, compared to the 2008 period. As a percentage of net sales, cost of sales was 100.6% in the third quarter of 2009 compared to 96.3% in the 2008 period.
As shown in the table above, cost of sales is composed of material costs, a variable expense, and other manufacturing costs, comprised of both fixed and variable expenses, including direct and indirect labor, outbound freight, and overhead expenses. Material costs were 73.3% of net sales compared to 74.1% in the 2008 period. The 0.8% decrease results from decreases in raw material commodity and component costs, primarily steel and aluminum. In addition, our other manufacturing costs increased from 22.2% of net sales in the third quarter of 2008 to 27.3% in the 2009 period. The 5.1% increase is primarily the result of the inability to reduce fixed costs in proportion to the 60.2% decrease in new trailer volumes.
Retail and distribution segment cost of sales was $16.4 million in the second quarter of 2009, a decrease of $25.2 million, or 60.6%, compared to the 2008 period. As a percentage of net sales, cost of sales was 100.0% in the second quarter of 2009 compared to 96.5% in the 2008 period. The 3.5% increase was primarily the result of an 11.5% increase as a percent of net sales in direct and indirect labor and overhead expenses due to the inability to reduce these costs in proportion to the 88.9% and 63.6% reductions in new and used trailer volumes, respectively. This increase in cost of sales as a percentage of net sales compared to the prior year period was further magnified by valuation reserves required due to the depressed market conditions for both new and used trailers.
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 $57.5 million; its shares were traded at around $1.84 with and P/S ratio of 0.1.
Highlight of Business Operations:
In the three and nine month periods ended September 30, 2009, we recorded net sales of $88.3 million and $252.5 million, respectively, compared to $243.0 million and $605.5 million in the prior year periods as sales of new trailer units declined 62.9% and 60.4% for the three and nine month periods ending September 30, 2009, respectively, as compared to the prior year periods. We continue to be affected by, and concerned with, the global economy, especially the credit markets, as well as the decline in the housing and construction-related markets in the U.S. Gross profit margin was negative 0.4% in the third quarter of 2009 compared to 3.7% in the third quarter of 2008. Gross profit margin versus the prior year period was negatively impacted by a 62.9% reduction in new trailer volumes. Third quarter 2009 gross profit margin of negative 0.4% represents an improvement of 5.7% in gross profit margin in the three month period ended September 30, 2009 as compared to the three month period ended June 30, 2009, which was primarily a result of a 12.5% increase in new trailer volumes as well as our continued cost reduction initiatives, including the full quarter s impact of reductions to hourly and salaried headcount as well as wage and base salary reductions. Operating income was positively impacted in the third quarter by a decrease in general and administrative and selling expenses compared to the 2008 period due to a reduction in headcount and salaries, employee related expenses and other various controllable cost reductions. These expense reductions are primarily a result of our cost cutting initiatives and efforts to adjust our cost structure to match the current market demand. Included in other income and expense is a $54.0 million non-cash charge relating to the fair value adjustment of our warrant issued to Trailer Investments, LLC (“Trailer Investments”) as a part of the Securities Purchase Agreement entered into on July 17, 2009.Retail and distribution segment sales were $16.4 million in the third quarter of 2009, down $26.7 million, or 61.9% compared to the prior year third quarter. Weak market demand across all product lines yielded reduced volumes as compared to the previous year period. New trailer sales decreased $18.9 million, or 82.6%, due to an 88.9% reduction in volumes. Used trailer sales were down $7.0 million, or 63.1%, primarily due to a 63.6% reduction in volumes. Parts and service sales were down $0.8 million, or 8.6%.
Cost of sales for the third quarter of 2009 was $88.6 million, a decrease of $145.3 million, or 62.1% compared to the third quarter of 2008. As a percentage of net sales, cost of sales was 100.4% in the third quarter of 2009 compared to 96.3% in the third quarter of 2008.
Manufacturing segment cost of sales, as detailed in the following table, was $72.3 million for the third quarter of 2009, a decrease of $120.2 million, or 62.4%, compared to the 2008 period. As a percentage of net sales, cost of sales was 100.6% in the third quarter of 2009 compared to 96.3% in the 2008 period.
As shown in the table above, cost of sales is composed of material costs, a variable expense, and other manufacturing costs, comprised of both fixed and variable expenses, including direct and indirect labor, outbound freight, and overhead expenses. Material costs were 73.3% of net sales compared to 74.1% in the 2008 period. The 0.8% decrease results from decreases in raw material commodity and component costs, primarily steel and aluminum. In addition, our other manufacturing costs increased from 22.2% of net sales in the third quarter of 2008 to 27.3% in the 2009 period. The 5.1% increase is primarily the result of the inability to reduce fixed costs in proportion to the 60.2% decrease in new trailer volumes.
Retail and distribution segment cost of sales was $16.4 million in the second quarter of 2009, a decrease of $25.2 million, or 60.6%, compared to the 2008 period. As a percentage of net sales, cost of sales was 100.0% in the second quarter of 2009 compared to 96.5% in the 2008 period. The 3.5% increase was primarily the result of an 11.5% increase as a percent of net sales in direct and indirect labor and overhead expenses due to the inability to reduce these costs in proportion to the 88.9% and 63.6% reductions in new and used trailer volumes, respectively. This increase in cost of sales as a percentage of net sales compared to the prior year period was further magnified by valuation reserves required due to the depressed market conditions for both new and used trailers.
Read the The complete ReportWNC is in the portfolios of Arnold Schneider of Schneider Capital Management, Charles Brandes of Brandes Investment.
