LAFAYETTE, Ind. — Just like the train in the legendary “Wabash Cannonball” country classic, this continent’s largest publicly-traded dry van maker is back in the game, with a jingle rumble roar.
The Lafayette, Ind.-based trailer builder that was so close to being king-pins-up a year ago has received financial resuscitation, sales have improved and shareholders are thrilled.
At least that’s the story from BusinessWeek magazine, which tracks publicly traded companies.
Since this time last year, Wabash’s stock has almost quadrupled. Trailer sales in 2009 had sunk more than 80 percent from their peak in 2006 – from 60,000 to under 13,000 three years later.
Share prices fell from a high of almost $10 to a low of 53 cents, recorded on July 16, 2009. Jobs were lost. Factories were closed.
That was then.
Wabash has just posted its second-quarter results and started hiring again. Even though second-quarter results yielded an EBITDA (earnings before interest, taxes, depreciation and amortization) loss of half a million dollars, that’s considerably better than the $6-million loss in the first quarter and the $10-million loss a year earlier.
Sales also climbed to about $150 million, which is almost twice the preceding quarter. Maybe even more significantly, it’s almost 75 percent more than a year before.
Wabash took orders for 5,400 new trailers in the first quarter and the company is adding almost 1,000 workers in response to the improved demand.
Wabash’s list of woes was longer than a convoy of Australian train trucks. Just when it started working on its financial problems, along came the market downturn.
The dramatic drop in demand for non-reefer vans was unprecedented. And on the verge of bankruptcy, a $35 million investment from New York-based private equity Lincolnshire in August 2009 gave the investors 44 percent of the outstanding shares in preferred stocks and warrants. Lincolnshire (already invested in a flatbed company) had already learned that the trailer market was volatile and believed in Wabash’s future.
According to industry watchers, the injection staved off bankruptcy and the shares began to climb. Trailer market watchers expect the industry to continue expansion, with up to 50 percent more trailers selling this year than last.
And Wabash is working on capturing the lion’s share. The company has stated it originally planned to sell about 20,000 units this year; that projection has just increased to between 23,000 and 25,000.
Remember all those stories about Wabash’s imminent demise? Just file them under “trailer trash.”