The Company reported operating income of $5.1 million for the second quarter of 2011, compared to an operating loss of $5.7 million for the second quarter of 2010. For the six months ended June 30, the Company reported operating income of $9.1 million for 2011 as compared to an operating loss of $16.9 million for 2010. The improvement in operating results of $10.8 million and $26.1 million for the three and six month periods, respectively, resulted primarily from higher new trailer shipments of 11,400 and 20,300 units, representing increases of 111 percent and 154 percent, respectively, from the prior year periods.
The following is a summary of select operating and financial results for the past five quarters:
Three Months Ended
--------------------------------------------------
(Dollars in June 30, September December March 31, June
thousands) 2010 30, 2010 31, 2010 2011 30,2011
--------- --------- --------- --------- ---------
New Trailer Units
Sold 5,400 6,800 10,100 8,900 11,400
Net Sales $ 149,699 $ 170,848 $ 241,550 $ 221,984 $ 287,095
Gross Profit
Margin 3.5% 3.8% 7.2% 7.4% 5.7%
(Loss) Income
from Operations $ (5,715) $ (4,206) $ 5,736 $ 4,009 $ 5,117
Net (Loss) Income $ (5,602)(1) $ (1,938)(1) $ 4,859 $ 3,197 $ 3,302
Operating EBITDA
(Non-GAAP) $ (493) $ 643 $ 10,752 $ 8,802 $ 9,737
Notes: (1) Quarterly Net (Loss) Income includes a non-cash benefit of approximately $1.9 million and $3.3 million for the second and third quarters of 2010, respectively, related to the decrease in the fair value of the Company's warrant which was issued to a private investor in 2009 and fully exercised in the third quarter of 2010.
Dick Giromini, President and Chief Executive Officer, stated, "Never before has our industry experienced such a rapid recovery in demand as we have seen over the past 12 to 18 months. Despite some temporary challenges associated with this unprecedented demand, our associates did a commendable job of keeping pace and we are pleased to have delivered noteworthy year-over-year improvement in our operating results for the seventh consecutive quarter. However, increases in commodity and component costs coupled with the inherent challenges associated with the capacity ramp-up to support the increased demand impacted our gross margin for the quarter. But, the improved leverage in our business was evident as we were able to maintain operating income margin consistent with the first quarter at 1.8 percent. In addition, our efforts to further diversify the business continued to gain traction as sales of our non-trailer related DuraPlate® products reached record levels, exceeding $15 million for the quarter."
Mr. Giromini continued, "New trailer shipments of 11,400 for the second quarter were just off guidance as customers again found it difficult to quickly adjust their pick-up rates in-line with our significantly increased production levels. However, this is only a timing event and we are increasing our new trailer shipment expectations for full year 2011 to an estimated 46,000 to 48,000 units. With shipments now reaching pre-recession levels, a continued strong backlog of $736 million, and the outlook for further growth in trailer demand, we remain confident on our strategic positioning of the Company to deliver improved margin performance over the cycle and continued diversification of the business."
On a non-GAAP basis, the Company's Operating EBITDA of $9.7 million was better than the second quarter of 2010 by approximately $10.2 million on approximately 6,000 additional new trailer shipments. A discussion of the Company's use of Operating EBITDA as a non-GAAP measure is included below, and a reconciliation of Operating EBITDA to net income (loss) is provided in the supplemental schedules included in this release.
Finally, and as previously announced, on June 28, 2011 the Company entered into a new, five-year $150 million revolving credit facility that increases borrowing capacity, reduces borrowing rate and provides additional flexibility to capitalize on the continued momentum within the trailer industry. The new facility also provides an option to increase the total facility borrowing capacity up to $200 million, subject to a borrowing base and lender agreement.
