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Wabash National Corp. reported higher earnings and record third-quarter revenue, citing growth in final-mile and commercial trailer products, and higher sale prices.
Net income for the period ended Sept. 30 jumped to $25.4 million, or 46 cents per diluted share, compared with $4.6 million, or 8 cents, a year earlier.
Revenue rose 5% to $580.9 million, a record level for the third quarter, compared with $553 million in the same 2018 period.
The number of trailers shipped in the quarter dipped to 13,700 compared with 14,450 a year earlier. The average price per trailer, however, increased by $2,000 — as the company used the increase to offset higher materials costs in 2018.
The company’s overall operating margin increased to 6% compared with 4.6% a year earlier.
“[Third quarter] is a significant milestone of the process improvements we’ve implemented over the last year that have allowed us to stabilize challenges in the manufacturing environment and excel operationally,” CEO Brent Yeagy said in an earnings release. “Our team has executed on initiatives like supply chain optimization, transforming information flows from chassis original equipment manufacturers, and enhanced sales and operational planning to unlock capacity necessary for growth in final-mile.
“In any environment, 140 basis points of overall operating margin improvement is a significant accomplishment. Similarly, 580 basis points of margin expansion in Final Mile Products shows considerable underlying improvements.”
Commercial Trailer Products’ revenue hit $380 million, an increase of $12 million, or 3.3%, compared with the prior-year quarter.
“CTP is commercializing cell core [weight saving] technology across its dry van product line for 2020,” he said, and the division will launch a new flatbed product in 2020 “in order to execute better-than-market growth within that business,” Yeagy said.
He said the division was well positioned for the next market period of the trailer cycle with “talent, systems and products to carry it forward to breakthrough performance in the next market upswing.”
Wabash said trailer production was likely to be at a more normal level of 265,000 to 275,000 units in 2020 — following 2018 production of 323,000 that is expected to increase to 329,700 this year, according to ACT Research.
Wabash intends to provide more detailed commentary on its expectations for 2020 when it reports fourth-quarter results, he said.
Final Mile Products’ revenue reached $113.5 million, an increase of $26.5 million, or 30.4%, compared with a year earlier, amid strong customer demand.
“That pace of growth continues to exceed our expectations,” Yeagy said during the earnings call Nov. 6.
Among the quarter’s highlights was the opening of a Supreme Upfit Solutions and Service location in Tampa, Fla.
“The Tampa location will enhance our truck-body penetration in the Florida market, as well as position us to grow in the areas of medium- and light-duty body and van updating solutions,” he said.
A large inventory of Supreme truck bodies are in stock for quick installation and upfit. Upfit solutions include shelving for package delivery, trade-specific packages, partitions, roof racks, aluminum and steel flatbed bodies, hitches, thermal solutions, liftgates, telematics, backup camera systems, accessories, and more.
Another highlight, Yeagy said, was a year-over-year 20% increase in truck-body production at its plant in Goshen, Ind., coupled with a 30% improvement in manufacturing productivity there.
At the same time, Diversified Products’ revenue fell to $93 million, a decrease of $9.2 million, or 9%, compared with a year earlier. That was attributed to the impact from the divestiture of a business, partially offset by increased demand for tank trailers.
The company’s backlog stood at $800 million.
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