WNC - Earnings call 3 2023 | Wabash National Corporation

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Operator

Good day. My name is Rob, and I will be your conference operator today. At this time, I would like to welcome everyone to the Wabash Third Quarter 2023 Earnings Conference.

Thank you. Ryan Reed, Senior Director of Investor Relations and Corporate Development, you may begin your conference.

Ryan Reed

morning, good and you, everyone. Thank joining We this on appreciate you call. us President today Financial Executive are me and Officer. Brent Chief With Pettit, Yeagy, Chief Mike Officer; and

safe Before any our to in earnings call disclosure the statements. slide Please that harbor also we refer today's our to are release, please our call available supplementing for recorded. ir.onewabash.com. and like that X being the reconciliations forward-looking earnings I'd this out point presentation get started, non-GAAP Slide company's is addressing deck note at

hand Brent. I'll it off now to

Brent Yeagy

joining you, today. quarter morning, Thank which execution Good everyone, Ryan. financial strategic strong pleased and continue another thanks announce our for demonstrate successful against us to to results, I'm vision. of

product complements a offering partners. elevating for With and services . transportation parts our our solutions, further and remain portfolio the value final industry broad dedicated that growing our group, of equipment we first even to proposition mile to

recently, have In their Rockland most addition on suppliers X with across demand bolster pivotal dynamic commitment is Hydro, adding Flooring. with agreements strategic to of customers, securing to Wabash's supply partner look and as positioning by we Ryerson, agreements executing also like value key relational focused our ecosystem we will planning for trailers within long-standing wood enhance supplier flooring Rockland our and industry. a strategic

as as more parts differentiated digital of of our similar our set value collaboratively our have to Transportation efficient within embracing on offerings customers evolving amplifying the with creation make customers services Solutions our suppliers, well continue working power capabilities enhanced best-in-class provide redefining parts Just of we by relationships our and pursuit by focus distribution as leveraging network offering with our in and strategic to by transformation. business dealer we direct key

our JV to announce collaboration capabilities tech, Firmway a strategically distinguished significant record aimed industrial a an joint Network a end-to-end digital accelerate excited anticipated Firmway ecosystem. and Trailers a dealers, Wabash development and I'm and distribution and and parts Parks through spanning is with partner Group. to e-commerce our the services boasts set expansion we an customers Service significantly The both our and of enhancing this and traditional our of and track of a broad will nontraditional scaling new platform provides landscape. experience suppliers transportation, to industry-leading as that logistics growth in venture of

using scale Wabash within is to address participants with that central logistics a positioned as efficiency work to of unique with our Firmway closely to industry networks. to we to increasingly figure innovation transportation, complex challenges of will endeavors an positioning and forward enhance help ecosystem look projects or transformative

joint like I'd thank and our engagement has strategic take process to also of at the venture moment forming active of the throughout instrumental. Directors, oversight been dose to Board a whose

guidance collective closer for reinvigorated a you growth. their has to recent support this joint path pivotal I If encourage long well-worn our and a always, journey. to organic most to appeared at from As a been a departure respectfully look take experience, path would Wabash, of venture

long-term time share transformation. profound by a that restructured, ahead financial we was per of which come XXXX $X.XX manufacturing target. our sweeping set EPS have and our schedule. At yielded our included the ambitious undergone has debt We've a unveiled have recapitalize company an investor accomplishments our These viewed new an of as financial meeting, rebranded, years, few changes of past substantial resegmented, the which goal Over XXXX, refinance operations. targets, at

our for for And as can have EPS of achieved $X.XX this we first look of importantly, earnings what a through performance. best just our we within quarters XXXX, company. financial to For of to in the expected score strong soften through parts those trough posting all conditions fully expect in power tank of like put trailers with continue the shines demand setting X process performance are bar portfolio services, and in truck, and home, keeping the new as XXXX, demand as peak

this that will achieve full in to on the the called resides like is figure meaningfully volume done past, we earnings reiterate While I'd record and being unit that out in I utilization. factory so below XXXX

Additionally, piece peak, business service a by time expect of we make back market the in would parts to next portfolio. the be margin-accretive and our the way to we our

activity shipment in have surprising transportation challenging Turning our our seasonality the to not third attention surprising shifting rates typical the orders stages customers which bump the as the and market activity freight time new frame. of given order conditions softening with, is to quarter, conditions it's continued that demand outpace conditions along Considering later contending backlog, to towards Simplifile. with been market see also not the of

order total QX, XX-month do through while we season in underway. billion, and achieve Ending expect uptick our was backlog $X.X $X.X with at order flow billion, stood now our backlog an QX to

that every the durable month to freight participants the to have more the industry additional languish, be. expect continues and recovery As noted, inevitable stronger we market

belief markets we persistent as the are shortages resurgence and within driver Over from North secular core [indiscernible], term, our that power reshoring of America. maintain our such benefiting long activity trends

Moving on financial outlook. to our

pleased outlined the map. freight been in execute with it's strategic meaningful point ever unique guidance are leverage Wabash we XXXX in our the our our of With in the this raise of $X.XX. first again as we and EPS our well In is focused midpoint outstripping cycle, the minimal from history, quarters growth X $X.XX execution EPS in to on prepared year to closing, to year the are XXXX. continue to full at XXXX company's road strong ability as projects on organic

van but capabilities in performance the within us to we during a demand that of van segment energy demand facets year, so recently expect will the year, major remaining reduction XXXX. next We dry in other navigate of as the the with to strong will proved business do with coming accelerate rebounds and allow

markets deepen point in as and Yes, see our we happening XXXX, expand as may We and and from will back with in certain nothing dealers, our well logistics suppliers and within pull strategic mission. the derail purpose customers players interesting will new our that XXXX is distribution a as us where relationships time but landscape. transportation,

are all performance our cycle value of We points in our to financial for improves level grow the at for facilitates the stakeholders. to all executing to plan opportunities and that Wabash continue creation

I'll that, over With hand for Mike it comments. his to

Michael Shlisky

our review was of quarterly Beginning results. revenue In third consolidated Thanks, million. our the $XXX quarter, Brent. with a financial

approximately During new truck X,XXX we trailers the quarter, bodies. shipped and XX,XXX

decision we reward truck order Given preserve coming while XX.X% and what $XX we . Gross sales. might quarter, benefits remain including spots services see of accounted new portfolio. favorable These the have the quarter, operating strong a during made to as bodies, some remain targeted of quarter downtime combination figures we sales trailer shipments slightly In This in margin near-term XX.X% environment the and for we for or our Vans, our main to maintained what changes. at operating in take expected material to and of tank margin in parts market demand was XX.X%. respond costs vast factors, EBITDA came our of production third facility. doing the due strong flexibility trailers to million to mix bright below achieved majority In our in have ago. X this, full-time the employees in we at of

attributable or income per $XX.X net quarter, the share. to diluted $X.XX common for stockholders million was Finally,

perspective, $XX.X Services of $XX and Solutions From million. income million and million $XXX a segment of Transportation operating revenue of million. generated of $XX revenue income Parts operating generated and

in of in XX% again Our for excess Service Firmway future with the our partnership business. during our segment Parts confidence grew increases & potential quarter, and this revenue the Group

next to we the year, parts forward continue and at services Looking growing clip. XX% expect to

the and note And net debt X.Xx. that lowest upgraded in context $XXX capital was financial expenditure leverage the by of significant sheet, We XX. performance. third our as is liquidity, was the ratio Year-to-date million our Concerning XXXX. quarter. balance which Wabash's S&P. of available debt ratio both our $XX company September Even free This rating $XXX generated operating of borrowings, since the QX cash via growth of I'd was also a leverage reflecting cash flow million our quarter comprises like flow cash $XX million, strong to million, with finished investment during during of

to interest our cheap see in in also be pleased consisting debt issuance our with which with X is Given value of structure, for environment principal late priorities. environment, the currently of simple, debt rate very and rate notes in today's and we part of mature are no reason repayment we allocation of capital current These a $XXX million X.X%. XXXX,

pay quarterly of We as million $XX we quarter, third of $X capital million. a revenue-generating $XX $X.X assets allocation, in topic the platform. in On shares projects during million repurchase to and the utilized and for our trailers capital million Service dividends invested

annual to support above Our our to of organic order maintenance CapEx prioritize spend to capital million and capital allocation $XX continues in focus $XX expenditure million beyond initiatives. growth our

We to alongside are we evaluate dividend . share and bolt-on maintaining committed anticipate repurchase continuing a our for to opportunities then M&A.

Moving for on to outlook our XXXX.

$X.XX EPS midpoint per range of at per are $X.X the we share $X.XX outlook $X.XX This midpoint per billion, $X.XX now approximately previous of share. outlook financial outlook contemplates our a EPS and to revenue to by Our increasing share. per for with to share compares the $X.XX of

as flagship meaningfully expect cash dry XXXX we of product in manufacturing a continue as flow recapitalized for well year free during growth. providing additional $XXX future capacity have We million of our where line van to the

outlook, Our share per expect financial fourth of the we share. $X.XX range per to year earnings $X.XX per in quarter

guidance, helpful the the in While necessary of next year. provide the XXXX for hope to precise thinking like we're I still in that inputs insights gathering about are all process outlook to I'd

this forward seen We First, in the those mentioned, more calendarization something that fortunate season to strong and actively our as customers many perspective. usual Vans more cadence season orders in fourth a of we years. XXXX close order XXXX XXXX mid-cycle can and pullback pre-COVID demand quarter. demand been of industry aligned with is conditions year to XXXX exceedingly with forecasters expect far and to were the resemble years. similar have though level a that the the further much as we've a XXXX, promoted, Brent during were for seems most for to from What territory. historical negotiations modest for so poised we

commentary Vans. to is that specific Now

services. Together, it be reflecting other excludes and dry our to gross bodies, potential bodies, generate continued expect and To to strength $X contribution years in XXXX. profit XXXX, these like poised and trailers consolidated segments services. from clear, the significantly robust truck and the within in figure potential parts to within of vans, and trailers to and alone surpasses tank XXXX regard With the like with million our areas truck parts that are performance around we profit gross contribute tank see businesses,

X to than financial raise more I'm to I'm signals year ahead about what thrilled be years a meaningful more conclusion, long-term target, guidance able In but off even come. performance our to for year, XXXX this years our to pleased of check full schedule. financial excited also again

We able full the still capability have our that a very enthusiastic generated innings also early XXXX. surprisingly, for performance, strong record our and realizing XXXX Perhaps about in we I'm prospects company. the believe of we're of remade has our team

to years, For we've Wabash been potential First cyclicality. to One Final Mile designed over plan, the X exploring the company's of transform our

ecosystem As transportation, an ahead complex historical progress positioned equipment, transportation center distribution. position we're continued stabilizing at Wabash as the XXXX, of competent in and we've achieved occupies showcase within is volatility. a leader poised of in earnings we to the and logistics look an to increasingly participants industry Wabash's

collaborating bring firmly marketplace the initiative to value capability exciting will industry the are crafting an define chapter ecosystem diverse we're world with industry digital reaches to how that continue you. our the alongside next address by a stakeholders We actively It's our and this in eager stakeholders. time, of believe to this the challenges. shaping to partners We to journey future change and Firmway

I'll the who the to it questions. back for call open turn now will operator, up

Operator

from of your Instructions] And first Long from question line [Operator Justin comes the Stephens.

Justin Long

move and understand help saw And that So early into margin from positive fourth see we impact how then maybe year, in wondering progressing? was to the you you material I quarter? quarter if us the you third could start, next as

Mike Pettit

some Yes. call sourcing-related versus noncommodity-related it, original driver that QX, We that positive fee not. did into to in guide. see material cost And some our was some of a impact our that QX, continue will will partial

I little So our into which bit a embedded a down in QX expect ton. but margin, our is material of step in a guidance, would not

maintain you to perspective. expect were the seeing would will gap, that benefits a step we a So some the see bit little down of of share of from margin

Justin Long

point will normalized level? second and that year? manufacturing the at Or first Okay. to get more And would of we expect normalize you a quarter in to margin what next kind

Mike Pettit

we'd XXXX say, we I of so expect from a Yes, to from perspective. to to QX we But perspective work in what still would official backlog margin give much have lot obviously see a, do any a closer guidance. be before can will

So didn't yet. give we XXXX guidance for

will So to I but will the QX that level. to run see in be say a expect can't closer margin profile, what be we'd rate exact

Justin Long

some potential the you Okay. speak facilities if there XXXX how Understood. And at could you're you outcomes X takes took you you on what And the you manage maybe you managing on XXXX? makes some how that to quarter. and you for helpful under thinking totally following in that resources for gave and I the business point, XXXX, the about But just up heard for I how just said, curious challenging, could the but forecasting in resources your to targeted you range of any are based puts comment if macro that environment and appreciate at on have thoughts you say range range? downtime of third X maybe range?

Mike Pettit

order in Yes. we resource we're of normal mentioned is majority feel prepared that pre-COVID QX we're believe fill. inflow question. can the start and seeing you of to see going some going the part And which and of going other in take clearly pretty days, income -- But Absolutely. and we what that Brent go some in back not was QX maybe We their XXXX. to backlog good we nice I'll we to not let I'll year-end, fill into the into then calendarization that that getting if remarks, about in the of deliver a thing. the order QX,

And specific driving also, that's very much comment. a

XXXX, we are lot a we those that parts other are we lot of and revenue a feel truck mentioned, I bodies in in will tank talked have of about. provide streams finding and the As support trailer

a is the you're happens we that from we reduction expect guidance, why give would see it's we not expect give So formal to -- a wide didn't any seeing that would we'll range, have based revenue, sure, but we which orders would see ACCFCR, from trailer on a of more at the our in year-end from see value have in and big vans what the streams, that other of around drop for dry goal. we'll a we lot some and color support context

Brent Yeagy

it talking about about just think primarily I ship structure you so headcount, you're a when Justin, -- So hourly and from think on.

as an got way the of we're are story. to think of XXXX look into that to of and see overall time of demand see out the XXXX. how we into entire specifically playing to our half XXXX we in bridge I this increase that in period the making great a and support it first absolutely sure is react to and end tail we position the go at headcount 'XX We to we position current to that QX QX managing

to we year. that does stay on do a for and changes nice believe the for using the early sitting is baseline dry solidly with to that the have that the our the we clarity think means opportunistic second operation potential with the the we of we part market and be what So with flex this us and that to can of year can We give half demand specifically the year. in solid throughout actually able the has van operation, X-shift prepare overtime of grow even mean? in issues ability What XXXX today.

parts, aspects business, on the of we truck headcount the market on a point position to business drivers XXXX demand we're not today. and known tanks, we in maintaining, meet the those where growing Mike's the that and actually in table if in rest specifically are To of the bodies have

XXXX. a are of great still, what in we going how about resource I an outlook we So would robust active into having think in net-net, say, terms management position do and

Operator

line the from question of Davidson. Your D.A. next from Mike comes Shlisky

Michael Shlisky

the Can know year you that bit update Can for business on -- XXXX? and/or that moment. the up a transition that didn't ramp next decades transition to reefer X mention and of that I you the we 'XX Minnesota for was and topic how start it's a at us off business. there's might

Brent Yeagy

Yes.

EcoNex we not make XXXX. be want when about we So about we relative also lineup, of foothold a XXXX. of lineup, establish of cold and total our we in chain vans. actually in the truck an chain just slightly but been place additive nice expansion amount That's are product van, with the now on it going on to an cold in service a can seeing output We're of we've parts talk in, overall opportunity That's think that amount and maintaining we our think pulling additional total revenue if area able sure a refeer we in for XXXX. in where reefer in revenue medium-duty in bodies be product a to not to XXXX, growing combination through and EcoNex potential us

Michael Shlisky

a back single like Got it. just that it there year confidence makes I where just you're will I'd And And about in regulations thinking of downturn, you step a be a out then fact, currently or just It trough. be think similar guess should 'XX that anything will, just like year? about to that, calling XXXX. know taking year Is sounds already be the 'XX you a simile on trough. feel that your like

Brent Yeagy

Yes.

in Mike, us, know yet what and when happen I -- globally domestically. you well you unfold as as I think will around first both saw look mean, to off, world I the we do,

recovering is to portfolio, I say the a the think happen a their be do in ability to anticipate call can to us will I freight conversations XXXX, with to give lean less So the is with Fed still more if overall it's that view allows how a and as in else move But those about it. understand they everyone business direction about strategic keep XXXX. in they to growth industry on of can't to They has might for how if players tend trough place That's end the confidence we how we're that with worst view to the case customers XXXX important, the in to happen. that of more to what the backlog/customer changes, decent say, we it Those forward view, would share, X that create. We're we'll on to we view what strongest degree I rate somewhat XXXX. I XXXX gain look as speculate right with tail market we while aspirations we're based customers deal start should them really now. they in into to

demand pointed what Wabash itself little we a come based why so earliest in that's the So off signal it signaling that respond think to it, We be to do ahead actually notice bit the be with. customers is will will when market that the, overall at call preparing that to business ready comes. of

Michael Shlisky

no because or components weeks? not holding auto around there Can parts chassis off the X the will trailer here. autos been just sure of if I sense you X update over be are been us couple UAW I squeeze side, ordering on last speeds some Can impact strike supply side, of And if you business. they're themselves country? issues has last they've on and excess there your there's of truck exacerbated getting Outstanding. the the shipped body capacity in being that on of the on orders the are a on the guess,

Brent Yeagy

part believe question take don't really the of I yes. Yes. the I'll last first.

on through. of -- of a a in of the exposed not impact off XXXX of what's series strike material that it's strike haven't metrics impacts It's iterative an that UAW but terms out them type . there, the know what based seen more say I'd I've that behavior to of going they're current going with even all, We We of state all the the think yet. to, that call process quote I'm are not in of been UAW least I order we at seeing strike. hitting real impact. significant truly freight there's a really any full

don't quarter would into decision-making. think So to at demand It's a okay. from material item long. in I be might first it that on into the standpoint the high for any it's it to does impact it or I which a front carriers yet until something then, And think risk last Wabash's And we get limited be don't somewhat not that management really profile. even

standpoint, about maneuver sporadic they're And impact XXXX, call amount limited will a because see we nature it this it all impact, first nuisance, had able But their moment. call the limited incremental, probably we've not not this how right When right the body again this quarter them I a we wouldn't at to the were that from is what XXXX. a into we'll impact. we're is rolling to they've truck of think incremental we've time or of and I in that that out, word, the with needs larger headache. get to see a If would protracted good way full, of were is so taking a a this lead but enough bad got around done

adjust the how fill move enough year, the first chassis maneuver first out call in the half away of to other We Big half have X pool, to but supply, of there's from to businesses, line specifically we to of plan demand the time during it, we're plenty the accordingly. able year of there,

the management. how point, operationally demand on while being it impact Wabash. material this of output see So a I change it not would At actual may we do

Mike Pettit

Yes.

We it. pretty percentage the truck have Brent I to click medium is duty of significant just not think [indiscernible]. a on build body and but our add, there, dependent in double just do on to mentioned

lot there's impacted that at our of isn't all. a So mix

Operator

Vertical comes from question from next of line Kauffman Your Partners. . Jeff the Research

Jeffrey Kauffman

Congratulations.

stronger. our you're seeing have better We're a rest So going I hear bottom. the 'XX, numbers your make that in business going We're rest message, to to is use which to already.

be today piece about talked and as that the bigger pie. in announcement will big and the service well, of parts You

a over the year to Number X took So ceded you up to the share the for Minnesota. last questions the dry transition do move vans, factory here. you've down you one, little reefer because

XX,XXX do year, track take. on to you're or this So trailers about . give

even So XX,XXX industry could opportunity? down the is I or know and to what saying, I is potentially reefer you trailer that you still this based be, total on making and capacity is if next XX% given what be about that am up possible number dry as about that so you're going real it ramp year, wrong? don't new trailers up you ramp market some of Or your the thinking

Brent Yeagy

it Jeff, X you refers questions. correct the of now, had and you at there's going would up what literal all, ramping transition that dry of we I Well, What on affects astute call is would way, really right? 'XX as between, real math think gross has doesn't. always, impact our 'XX, I'm know that the any share to no I tell van as would ask call material I market some but our what really about thing 'XX, very I manufacturing in

more as freight XXXX, the about maintain We level a supplier premium that conditions. market the organization that's the into by an deliberate of felt think overall in maintaining second of as security a the demand caused decision pricing was we in paramount market in When the to half year to pricing management drive is off based share this pricing much of about been order also do of match business we XXXX. be into prepare That against the we for would to going no capacity hit [indiscernible] run order up the level plan. happens move pricing to to season is the so for smoothing not It to XXXX. the just reason and and 'XX, be chase needed in an there'd as smartest a to inefficiency on into that

you're adjust we the think be we when inherently XXXX, the think in ground absolutely with will on much in over for nice have we in I seen range about share plus starting of market we've capacity XXXX. probably you're that that be a the pricing at a what our than level ballpark maintain available still premium still place market to us market, be is in past So the the to we'll that in or share cycles that can minus, higher alluding as

Jeffrey Kauffman

then about there I question following none this of And thinking Mike's in pre-buy the a situation, of up of know probably better. that tractor even big single for EPA we P&L 'XX, it that which know. year. backward want all kind start 'XX, And follow But just out truck in means in even and on you a that. is fleets us to And on, 'XX, mandate get 'XX Okay. if some just in I'm is unfortunately, course, may

Gap] a year, to to better. respite, respite industry of You But probably that the are may few early thinking I'm of part for we're right, the maybe trailers a then of about going demand maybe, buying But it tractor crowding we get not, in of still start running we the out capital get into starts shape a customers then 'XX, for requirement see who knows. little just of next 'XX, years, get bit the [Audio to a lot a this going have

Brent Yeagy

think, be, Gap]. We're to from somewhat [Audio an going offered I

will And curve think segment in community. I when I so of be think based curve, different the about different that parts overall the off of buying

Jeffrey Kauffman

the if [Audio Gap] 'XX thinking amount now? question, right of as CapEx last and to right out Mike. Mike, be look I X this 'XX One for about we can, should I

Mike Pettit

'XX be in the projects, future. growth foreseeable from you will high -- But 'XX 'XX seen to we what for expect kind depending on I to doing Yes. from lot the we right change It's have may say projects XX be we 'XX exceed what CapEx but of that we be somewhat. that and will highly know, have will would of see will historically XX% and the have a levels. to down some now spend will accretive be 'XX year-end exactly have But to you point what that to the 'XX. as because, growth won't the can of XX% saw Wabash, difficult in it 'XX number

Operator

the closing And no this I some Ryan back will over are turn time. Reed there questions for to further remarks. now at call

Ryan Reed

everyone, thanks, for day. We joining forward us look and during quarter. up Rob, Thanks, the Have today. a following great to

Michael Shlisky

for This call. you conference concludes your Thank participation. today's

now may disconnect. You

Wabash National (WNC) 25 Oct 232023 Q3 Earnings call transcript