Wabash National Corporation, the innovation leader of engineered solutions for the transportation, logistics and distribution industries, today reported results for the quarter ended June 30, 2020.
Net sales for the second quarter 2020 were $339.2 million as operations were able to maintain productivity levels in the face of unprecedented business and operating conditions brought on by COVID-19. Additionally, customer pick-ups of new equipment improved following disruption seen during the first quarter in the lead-up to COVID-19-related shutdowns. Operating income was $6.0 million during the quarter as rapid implementation of cost control measures limited decremental margins to 15 percent. Earnings per share was $0.00 for the second quarter.
Total Company backlog as of June 30, 2020 was approximately $750 million compared to backlog of approximately $1.0 billion ending March 2020 as normal seasonal trends indicate an expected sequential softening in backlog during the second quarter.
“The second quarter was the most uniquely challenging time I've experienced in my career. Balancing continued operations to support our customers during a global pandemic while implementing meaningful short-term cost control measures as well as longer-term initiatives to optimize our organizational structure took a remarkable level of dedication from every level of our organization, and I'd like to acknowledge the tremendous efforts of our people,” said Brent Yeagy, president and chief executive officer. "To limit decremental margins to fifteen percent during the second quarter reflects the dedication of our people as well as the long-term improvements we've made to our business portfolio and within our operating system. The cost reductions we've made allow us to control expense in the short-term while preserving the business' ability to quickly accelerate when market conditions invariably improve."
Liquidity as of the end of the second quarter was $304 million with cash of $136 million and a fully untapped revolving credit line of $168 million following the second quarter repayment of a proactive drawdown of the revolver during the first quarter. Overall liquidity increased by $27 million sequentially as positive cash flow from operations was supplemented by a release of working capital. The Company's nearest debt maturity, amounting to $135 million, is in March of 2022. Additionally, the Company's debt carries no financial covenants.
"Our backlog combined with second quarter shipments shows that orders continued to flow at a moderate pace during the second quarter, which normally sees sales outpace new orders. We continue to be pleased with the state of our order book and the visibility it provides for the second half of the year," continued Yeagy. "Our goal for 2020 remains positive free cash flow generation and our second quarter results serve to strengthen our expectations of achieving that target. We aim to demonstrate how our free cash flow profile has improved from previous cycles by maintaining our dividend through this challenging time and continuing to deploy capital in the best interest of our long-term shareowners."
