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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
September 19, 2003
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Date of Report (Date of earliest event reported)
Wabash National Corporation
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(Exact name of registrant as specified in its charter)
Delaware 1-10883 52-1375208
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(State or other (Commission (IRS Employer
jurisdiction File No.) Identification No.)
of incorporation)
1000 Sagamore Parkway South, Lafayette, Indiana 47905
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (765) 771-5310
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Not applicable
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(Former name or former address, if changed since last report)
Exhibit Index on Page 7
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Item 2. Acquisition or Disposition of Assets
On September 19, 2003, the Company closed the sale (the "Asset Sale") of certain
of the assets of its trailer leasing and rental, and wholesale aftermarket parts
distribution businesses to Aurora Trailer Holdings, LLC ("Aurora"). BB&T Capital
Markets served as the financial advisor to the Company on the asset sale. As a
result of arm's length negotiations and a process involving multiple interested
parties, the Company received approximately $53.3 million in cash. A copy of the
press release announcing the asset divestiture is attached hereto as Exhibit
99.2 and is incorporated herein by reference. The Asset Purchase Agreement, as
amended, which contains the terms of the transaction and the consideration
received, is attached hereto as Exhibit 2.01 and 2.02.
Derek Nagle, the former Senior Vice President of the Company and former
President of its North American Trailer Centers, is an officer of Aurora and we
expect will be involved in the management of the operation of the assets as
acquired by Aurora.
Pro Forma financial information reflecting the estimated effects of the Asset
Sale and the bank financing, described below, and the previously announced
Unsecured Convertible Notes offering (the "Refinancing") are included herein in
Item 7.
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Item 5. Other Events and Required FD Disclosure
On September 23, 2003, the Company announced the closing and funding of a new
three year $222 million bank financing package. The Loan and Security Agreement
is attached hereto as Exhibit 10.51. In connection with the Asset Sale and the
Refinancing, the Company incurred approximately $21 million in debt
extinguishment costs and approximately $2 million in asset disposition charges.
A copy of the press release announcing the refinancing is attached hereto as
Exhibit 99.1 and is incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements
None
(b) Pro Forma Financial Information
Unaudited Pro Forma Consolidated Statement of Operations For
the Year Ended December 31, 2002
Unaudited Pro Forma Consolidated Statement of Operations For
the Six Months Ended June 30, 2003
Unaudited Pro Forma Consolidated Balance Sheet as of June 30,
2003
Notes to Unaudited Pro Forma Consolidated Financial Statements
2
Pro Forma Financial Information
Wabash has prepared the following unaudited pro forma consolidated financial
statements to illustrate the estimated effects of the Asset Sale and the
Refinancing. The Unaudited Pro Forma Consolidated Statements of Operations for
the year ended December 31, 2002 and for the six month period ended June 30,
2003 give effect to the transactions as if they had occurred as of the beginning
of the respective periods. The Unaudited Pro Forma Condensed Consolidated
Balance Sheet gives effect to the transactions as if they had occurred on June
30, 2003. The transactions and the related adjustments are described in the
accompanying notes. The Pro Forma Financial Statements are based upon available
information and certain assumptions that management believes are reasonable. The
Pro Forma Financial Statements do not purport to represent what the Company's
results of operations or financial condition would actually have been had the
transactions in fact occurred on such dates or to project the Company's results
of operations or financial condition for any future period or date. The Pro
Forma Financial Statements should be read in conjunction with the historical
financial statements of the Company and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" contained in the Company Form
10-K for the year ended December 31, 2002 and its Form 10-Q for the quarter
ended June 30, 2003.
Wabash National Corporation
Pro Forma Statement of Operations for the Year Ended December 31, 2002
Dollars in Thousands, Except Per Share Amounts
(Unaudited)
Adjustments
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Historical Asset Sale(a) Refinancing(c) Pro forma
---------- ---------- -------------- ----------
Net Sales 819,568 $ (80,353) $ -- $ 739,215
Cost of Sales 779,117 (60,885) -- 718,232
--------- --------- --------- ---------
Gross Profit (Loss) 40,451 (19,468) -- 20,983
G & A 53,897 (3,248) -- 50,649
Selling 23,501 (3,438) -- 20,063
Restructuring Charges 1,813 -- -- 1,813
--------- --------- --------- ---------
Income (Loss) from Operations (38,760) (12,782) -- (51,542)
Other Income (Expense):
Interest Expense (30,873) 2,965 10,108 (17,800)
Trade Receivable Facility Costs (4,072) -- 4,072 --
Foreign Exchange Gains and Losses, Net 5 -- -- 5
Other, net 2,232 (28) -- 2,204
--------- --------- --------- ---------
Income (Loss) before Income Taxes (71,468) (9,845) 14,180 (67,133)
Income Tax (Benefit) Expense (15,278) -- -- (15,278)
--------- --------- --------- ---------
Net Income (Loss) (56,190) (9,845) 14,180 (51,855)
Preferred Stock Dividends 1,563 -- -- 1,563
--------- --------- --------- ---------
Net Loss Applicable to Common Stockholders $ (57,753) $ (9,845) $ 14,180 $ (53,418)
========= ========= ========= =========
Basic and Diluted Net Loss Per Share $ (2.43) $ (2.25)
========= =========
Weighted average shares outstanding 23,791 23,791
========= =========
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Wabash National Corporation
Pro Forma Statement of Operations for the Six Months Ended June 30, 2003
Dollars in Thousands, Except Per Share Amounts
(Unaudited)
Adjustments
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Historical Asset Sale (a) Refinancing (c) Pro forma
---------- ---------- ----------- ---------
Net Sales $ 452,739 $ (40,855) $ -- $ 411,884
Cost of Sales 406,709 (33,759) -- 372,950
Loss on Asset Impairment 28,500 (28,500) -- --
--------- --------- --------- ---------
Gross Profit (Loss) 17,530 21,404 -- 38,934
--
G & A 18,433 (1,047) -- 17,386
Selling 11,240 (1,342) -- 9,898
--------- --------- --------- ---------
Income (Loss) from Operations (12,143) 23,793 -- 11,650
Other Income (Expense):
Interest Expense (18,259) 1,279 9,380 (7,600)
Trade Receivable Facility Costs (625) -- 625 --
Foreign Exchange Gains and Losses, Net 5,589 -- -- 5,589
Other, net (400) 27 -- (373)
--------- --------- --------- ---------
Income (Loss) before Income Taxes (25,838) 25,099 10,005 9,266
Income Tax (Benefit) Expense -- -- -- --
--------- --------- --------- ---------
Net Income (Loss) (25,838) 25,099 10,005 9,266
Preferred Stock Dividends 528 -- -- 528
--------- --------- --------- ---------
Net Income (Loss) Applicable to
Common Stockholders $ (26,366) $ 25,099 $ 10,005 $ 8,738
========= ========= ========= =========
Basic and Diluted Net Earnings (Loss)
Per Share $ (1.03) $ 0.34
========= =========
Weighted average shares outstanding 25,700 25,700
========= =========
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Wabash National Corporation
Pro Forma Balance Sheet as of June 30, 2003
Dollars in Thousands
(Unaudited)
Adjustments
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Historical Asset Sale (a) Refinancing Pro Forma
---------- ---------- ----------- ---------
Current Assets
Cash and cash equivalents $ 6,615 $ 143 $ -- $ 6,758
Accounts receivable, net 85,846 (6,888) -- 78,958
Current portion of finance contracts 7,962 -- -- 7,962
Inventories 139,461 (7,829) -- 131,632
Prepaid expenses and other 21,409 (53) (8,220)(d) 13,136
--------- --------- --------- ---------
Total current assets 261,293 (14,627) (8,220) 238,446
Property, Plant and Equipment, net 137,096 (643) -- 136,453
Equipment Leased to Others, net 64,867 (34,002) -- 30,865
Finance Contracts, net of current portion 16,890 -- -- 16,890
Goodwill, net 35,444 -- -- 35,444
Other Assets 17,929 -- 7,700 (e) 25,629
--------- --------- --------- ---------
$ 533,519 $ (49,272) $ (520) $ 483,727
========= ========= ========= =========
Current Liabilities
Current maturities of long-term debt $ 155,593 $ -- $(145,465)(f) $ 10,128
Current maturities of capital lease obligations 45,733 (42,227) -- 3,506
Accounts payable 65,018 (6,420) -- 58,598
Other accrued liabilities 60,324 775 -- 61,099
--------- --------- --------- ---------
Total current liabilities 326,668 (47,872) (145,465) 133,331
Long-Term Debt, net of current maturities 134,184 -- 166,165 (f) 300,349
Long-Term Capital Lease Obligations, net of current maturities 1,945 -- -- 1,945
Other Non Current Liabilities and Contingencies 21,654 -- -- 21,654
Stockholders' Equity
Preferred stock 3 -- -- 3
Common stock 258 -- -- 258
Additional paid-in-capital 238,494 -- -- 238,494
Retained deficit (188,588) (1,400) (21,220)(g) (211,208)
Accumulated other comprehensive loss 180 -- -- 180
Treasury stock at cost (1,279) -- -- (1,279)
--------- --------- --------- ---------
Stockholders' Equity 49,068 (1,400) (21,220) 26,448
--------- --------- --------- ---------
$ 533,519 $ (49,272) $ (520) $ 483,727
========= ========= ========= =========
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WABASH NATIONAL CORPORATION
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands, except as noted)
(a) Asset Sale
On September 19, 2003, the Company completed the sale of certain of the
assets of its leasing and rental and aftermarket parts businesses for
approximately $53.3 million in cash. Net proceeds from the sale were used
to repay a portion of its outstanding indebtedness. Loss on the disposition
amounted to approximately $29.9 million, including a $28.5 million asset
impairment charge recorded in the 2003 second quarter. Additionally, the
Company anticipates a $0.6 million loss on the disposition of retained
assets. The $1.4 million loss was derived as follows:
Assets sold $ 53,100
Transaction costs 1,600
Less proceeds 53,300
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$ 1,400
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(b) Refinancing
On August 1, 2003, the Company completed the sale of $125 million of 3.25%
five-year senior unsecured convertible notes convertible into shares of the
Company's stock, subject to market and other conditions. The Company used
the net proceeds to repay a portion of its outstanding indebtedness. The
notes have a conversion price of $19.20 or a rate of 52.0833 shares per
$1,000 principal amount of note. The notes bear interest at 3.25% per annum
payable semi-annually on February 1 and August 1. Costs associated with the
transaction amounted to approximately $4.2 million and will be amortized
over the term of the notes.
On September 23, 2003, the Company entered into a $222 million three-year
asset-based loan arrangement that includes a $47 million term loan and a
$175 million revolver. The new financing will replace existing indebtedness
and is expected to substantially lower the Company's cost of debt.
The term loan is secured by Company's property plant and equipment. The
revolver is secured by inventory and accounts receivable and the amount
available to borrow varies in relation to the balances of those accounts.
Interest on the term loan is variable, based on the London Interbank Offer
Rate (LIBOR) plus 300 basis points, decreasing to 275 basis points after
six months, or the banks alternative rate as defined in the agreement.
Interest on the revolver is at LIBOR plus 275 basis points, decreasing to
250 basis points after six months. The Company pays a commitment fee on the
unused portion of the facility at a rate of 37.5 basis points per annum.
Additionally, the Company estimates fee associated with the transaction
will amount to approximately $3.5 million, which will be amortized over the
term of the loan.
The term loan requires quarterly principal payments of $1.7 million
commencing on January 1, 2004, with the balance due on September 23, 2006.
The revolver is due on September 23, 2006. Beginning in March 2005, excess
cash flow, as defined, is required to be used to reduce term loan
indebtedness.
The loan agreement contains covenants that require, among other things,
minimum fixed charge coverage and maximum senior debt to EBITDA coverage.
Also, the agreement place limits on capital expenditure and additional
borrowings.
(c) To record the effects of the refinancing. Interest expense on the
convertible notes is 3.25%. Interest on the term loan is LIBOR plus 300
basis points, decreasing to 275 basis points after six months. Interest on
the revolver is at LIBOR plus 275 basis points, decreasing to 250 basis
points after six months. Additionally,
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interest expense includes an unused facility fee at a rate of 37.5 basis
points per annum, letter of credit fees and amortization of deferred loan
costs. The average of the 30 day LIBOR was 1.76% for the year ended
December 31, 2002 and 1.33% for the six months ended June 30, 2003. The
effect of a 12.5 basis point change in LIBOR would change interest expense
approximately $0.2 million and $0.1 million for the year and six month
periods, respectively.
(d) To record the write off of the unamortized balance of deferred loan costs
associated with debt being paid.
(e) To record the deferred loan costs incurred with the refinancing.
(f) To record the net effect of the refinancing as follows:
Payment of existing debt $ 145,465
Additional borrowing related to:
Loan fees and cost 7,700
Make whole fees 13,000
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$ 166,165
=========
(g) To record the expense associated with the early extinguishment of debt,
including the write off deferred loan costs, as follows:
Write-off of deferred debt cost $ 8,220
Make whole fees 13,000
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$ 21,220
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(c) Exhibits
2.01 Asset Purchase Agreement dated July 22, 2003.
2.02 Amendment No. 1 to Asset Purchase Agreement dated September 19, 2003.
10.51 Loan and Security Agreement dated September 23, 2003.
99.1 Press Release of Wabash National Corporation issued September 23, 2003.
99.2 Press Release of Wabash National Corporation issued September 23, 2003.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WABASH NATIONAL CORPORATION
Date: September 29, 2003 By: /s/ Robert J. Smith
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Robert J. Smith
Vice President & Controller
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