Wabash National(US:WNC)2025-04-30 20:04PART I – FINANCIAL INFORMATION Financial Statements Wabash National reported Q1 2025 net sales of $380.9 million, with net income surging to $230.9 million due to a $342 million liability reduction Condensed Consolidated Balance Sheets Total assets remained stable at $1.415 billion, while liabilities decreased significantly to $1.010 billion, boosting equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $81,036 | $115,484 | | Total current assets | $657,568 | $594,488 | | Total assets | $1,415,193 | $1,411,529 | | Liabilities & Equity | | | | Total current liabilities | $415,364 | $308,409 | | Long-term debt | $417,317 | $397,142 | | Other non-current liabilities | $177,420 | $516,152 | | Total liabilities | $1,010,101 | $1,221,703 | | Total stockholders' equity | $403,841 | $188,830 | Condensed Consolidated Statements of Operations Net sales decreased to $380.9 million, but a legal liability reduction boosted net income to $230.9 million Q1 2025 vs Q1 2024 Statement of Operations (in thousands, except per share amounts) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net sales | $380,890 | $515,276 | | Gross profit | $19,003 | $76,446 | | Income from operations | $314,551 | $29,575 | | Net income attributable to common stockholders | $230,941 | $18,167 | | Diluted EPS | $5.36 | $0.39 | | Dividends declared per share | $0.08 | $0.08 | Condensed Consolidated Statements of Cash Flows Net cash used in operations improved to $0.3 million, while investing and financing activities used $33.8 million and $0.4 million respectively Q1 2025 vs Q1 2024 Cash Flows (in thousands) | Cash Flow Category | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(272) | $(17,410) | | Net cash used in investing activities | $(33,818) | $(19,185) | | Net cash used in financing activities | $(358) | $(26,890) | | Net decrease in cash and cash equivalents | $(34,448) | $(63,485) | | Cash and cash equivalents at end of period | $81,036 | $115,786 | Notes to Condensed Consolidated Financial Statements Notes detail the TrailerHawk.ai acquisition, a $342 million product liability adjustment, and segment performance - On February 3, 2025, the Company acquired TrailerHawk.ai, LLC for an initial purchase price of $2.5 million (less a $0.8 million allowance), release of $3.1 million in notes, and potential earnout payments up to $15.0 million The acquisition added $8.2 million to Goodwill30 - The company's product liability matter award was reduced by the court to an 'Adjusted Award' of $119.5 million ($108 million punitive, $11.5 million compensatory) This resulted in a $342 million reduction to the previously recorded charge, which was recognized as a credit to General and Administrative expenses in Q1 2025105106 Segment Performance - Q1 2025 (in thousands) | Segment | Total Net Sales | Gross Profit | (Loss) Income from Operations | | :--- | :--- | :--- | :--- | | Transportation Solutions | $346,803 | $8,414 | $(9,798) | | Parts & Services | $51,955 | $10,589 | $6,910 | - The company repurchased 1,033,764 shares during the quarter as part of its buyback program As of March 31, 2025, $110.5 million remained available under the program, which expires in February 2027115195 Management's Discussion and Analysis of Financial Condition and Results of Operations Net sales decreased 26.1% to $380.9 million, while liquidity remained strong at $310.0 million despite market uncertainty Results of Operations Net sales declined 26.1% to $380.9 million, driven by lower Transportation Solutions sales, while G&A expenses decreased significantly Net Sales by Segment (in thousands) | Segment | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Transportation Solutions | $346,803 | $470,428 | (26.3%) | | Parts & Services | $51,955 | $49,234 | 5.5% | | Total | $380,890 | $515,276 | (26.1%) | - New trailer shipments decreased by 26.0% to 6,290 units, and new truck body shipments decreased by 18.7% to 3,000 units compared to Q1 2024133 - Gross profit margin decreased to 5.0% in Q1 2025 from 14.8% in Q1 2024, primarily due to lower sales volumes, especially in the Transportation Solutions segment where the margin fell to 2.4% from 13.4%130138 Liquidity and Capital Resources Liquidity stood at $310.0 million, with cash used for dividends and stock repurchases, and debt primarily from Senior Notes - Total liquidity (cash plus available borrowings) was $310.0 million as of March 31, 2025, down from $421.9 million at December 31, 2024147162 - In Q1 2025, the company used cash for $16.5 million in stock repurchases and $3.9 million in dividend payments, offset by $20.0 million in net borrowings under the revolving credit facility168 Contractual Obligations Summary as of March 31, 2025 (in thousands) | Obligation | Total | | :--- | :--- | | Total debt (including interest) | $494,822 | | Operating Leases | $39,670 | | Other commercial commitments | $111,372 | | Total Obligations | $645,864 | Backlog and Outlook Total backlog increased 5% sequentially to $1.224 billion but decreased 32% year-over-year, reflecting softened demand and revised industry forecasts Backlog Comparison (in millions) | Backlog Type | Mar 31, 2025 | Dec 31, 2024 | Mar 31, 2024 | | :--- | :--- | :--- | :--- | | 12-month backlog | $841 | $813 | $1,507 | | Total backlog | $1,224 | $1,169 | $1,803 | - Industry forecasts for 2025 U.S. trailer production are down, with ACT projecting 204,000 units and FTR projecting 217,000 units, representing decreases of 13.9% and 5.7% from 2024, respectively180 - Longer-term forecasts from ACT and FTR predict a recovery, with production levels expected to rise to between 245,000 and 299,000 units annually from 2026 to 2030181 Quantitative and Qualitative Disclosures About Market Risk The company manages market risks from commodity prices, interest rates, and foreign exchange, with limited impact from hypothetical changes - A hypothetical 10% change in commodity prices would result in a $1.2 million change in cost of goods sold based on purchase commitments of $12.3 million through December 2025186 - Interest rate risk is primarily tied to the $20.0 million outstanding on the Revolving Credit Agreement A 100 basis-point change in the floating rate would impact annual interest expense by approximately $0.2 million187 - Foreign exchange rate risk, mainly from the Mexican peso, is deemed to have an immaterial impact on the company's results of operations188 Controls and Procedures Management concluded disclosure controls and procedures were effective, with no material changes to internal control over financial reporting - The Company's principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of March 31, 2025189 - No material changes to internal control over financial reporting occurred during the first quarter of 2025190 PART II – OTHER INFORMATION Legal Proceedings The company refers to Note 14 for legal proceedings, highlighting the product liability case with a reduced award under appeal - For information on legal proceedings, the report directs readers to Note 14, "Commitments and Contingencies" in Part I, Item 1191 Risk Factors The primary risk is the product liability lawsuit; failure to further reduce the $119.5 million award could materially impact financials - The company emphasizes the risk from the 'Product Liability Matter' where a court reduced a punitive damage award to $108 million, with a compensatory award of $11.5 million193 - The company has filed a notice of appeal and warns that failure to further reduce the award could materially and adversely affect its financial condition, results of operations, and cash flows194 Unregistered Sales of Equity Securities and Use of Proceeds The company repurchased 1,261,527 shares for $16.4 million in Q1 2025, with $110.5 million remaining for buybacks Share Repurchases - Q1 2025 | Month (2025) | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | January | 272,675 | $16.25 | | February | 596,225 | $12.69 | | March | 392,627 | $11.22 | | Total | 1,261,527 | $13.00 | - As of March 31, 2025, $110.5 million remained available for repurchase under the company's stock buyback program195 Other Information No directors or executive officers adopted or terminated Rule 10b5-1 trading arrangements during Q1 2025 - No directors or executive officers adopted or terminated any Rule 10b5-1 trading arrangements in Q1 2025196 Exhibits The report lists filed exhibits, including officer certifications and iXBRL formatted financial statements