Wabash National Corp. (NYSE: WNC) beat top- and bottom-line estimates in the second quarter. It maintained some production as truck makers shut down for April and part of May because of the coronavirus pandemic.
Net sales were $339.2 million. The builder of dry and refrigerated vans, tanker bodies and last-mile products used strict cost control measures to hold its profit margin decline to 15% on operating income of $6 million. Earnings per share were $0.00.
“The cost reductions we’ve made allow us to control expenses in the short-term while preserving the business’ ability to quickly accelerate when market conditions invariably improve,” president and CEO Brent Yeagy said in a statement.
Analysts surveyed by investor site Seeking Alpha predicted a loss of 20 cents per share on sales of $303.27 million.
Production of liquid-hauling and last-mile products continued. But fleet orders for new dry and refrigerated vans dropped to a trickle. Customer pickups of finished vans improved after a first-quarter disruption that anticipated pandemic-induced plant shutdowns.
Order book in good shape
The company’s approximately $750 million backlog of products waiting to be built as of June 30 was down from a $1 billion backlog at the end of the first quarter. The softening is consistent with seasonal trends.
“We continue to be pleased with the state of our order book and the visibility it provides for the second half of the year,” Yeagy said.
Wabash repaid a draw from its bank credit line in the first quarter as protection against the impacts of the coronavirus. Cash at the end of the second quarter stood at $304 million with an untapped credit line of $168 million. The company’s nearest maturing debt is $135 million in March 2022.
“Our goal for 2020 remains positive free cash flow generation and our second quarter results serve to strengthen our expectations of achieving that target,” Yeagy said. “We aim to demonstrate how our free cash flow profile has improved from previous cycles by maintaining our dividend.”
A common stock dividend of 8 cents per share was, payable July 23, to stockholders of record on July 2.
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