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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowShares of Wabash National Corp. fell 10 percent, to $1.10 each, this morning after the company announced late yesterday that its deteriorating financial condition could force it to pursue a sale.
The Lafayette-based truck-trailer manufacturer capped a dismal 2008 with an even worse fourth quarter, losing $110.7 million, or $3.69 per share, in the three months ended Dec. 31.
For the year, Wabash lost $124.7 million, or $4.16 per share, on revenue of $836.2 million. In 2007, the company reported a profit of $16.3 million on net sales of $1.1 billion.
Demand for trucks and trailers have slumped as truck lines suffer slow freight orders. High diesel prices last year also put a crimp on truck sales.
Hundreds of trucking operations have gone out of business nationally, flooding the market with used trailers. Some trucking lines have had difficulty obtaining credit to buy new units.
Besides a potential sale, Wabash also is considering divesting certain business units and making changes to its capital structure.
The company said it missed a critical deadline with lenders by failing to finalize year-end financial statements by March 31, throwing its loans into default. Lenders now can increase the outstanding principal on Wabash’s loans by 2 percent, accelerate due dates, restrict advances or terminate its revolving credit line.
Wabash is negotiating to avoid the penalties and continues to evaluate its future, President and CEO Dick Giromini said in a written statement.
“Our priority continues to be working diligently with our lenders to renegotiate our revolving credit facility and improving our liquidity position,” he said. “However, we recognize our responsibility to act prudently, and thus, we are exploring all of our options to maximize shareholder value.”
Analyst John Barnes of North Carolina-based BB&T Capital Markets covers the company and placed a “sell” recommendation on Wabash stock eight months ago, he said.
He declined to comment this morning on the company’s troubles, saying he “didn’t feel the need to pile on.”
The stock had reached a 52-week high of $11.69.
Wabash has made several previously announced cost-cutting moves to help it weather the recession, including staff reductions of 180 salaried employees. Those layoffs brought total salaried headcount reductions to more than 30 percent since early 2007.
The company also has reduced base salaries of all officers and remaining salaried employees by 10 percent, and delayed non-critical development and capital projects.
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