WNC - Earnings call 4 2023 | Wabash National Corporation

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Operator

Thank you for standing by, and welcome to the Wabash Fourth Quarter 2023 Earnings Call. I would now like to welcome Ryan Reed, VP of Investor Relations, to begin the call. Ryan, over to you.

Ryan Reed

Thank you. Good morning, everyone, and thanks for joining us on this call. Brent Chief and items Financial get are and Executive before today started. Pettit, Mike Officer.A me Yeagy, Chief President Officer; we With couple of

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

Brent Yeagy

on Thanks, Ryan. any and substantially thanks in us the company's joining the exceeded been for team like of we've year has a significant Good morning, I'd achievement. which in everyone, today. congratulate history. XXXX performance the the financial to year Wabash

more forward the to connections, I'm our our progress like of how Beyond relationships strategic have XXXX in XXXX, theme going accomplishments, us customers and to it our our made stakeholders.In positions I'd emphasize our performance for financial excited the stronger about thinking during networks. about and other strategic employees, accomplishments and even even generate we

transformation Our organization longer-term be to of parties recurring innovative a well profound contribute through to for problems technology with Trailers our ecosystem enhancing enhanced customer insights our can add journey also customers advancements with understanding dry of partners. beyond customer The partners as cycle. of our allow van core business a greater opportunities, customers of have have power on valuable our By our transaction. parts offerings our These like created are as with Wabash and the deepened began Service our capacity, services, able we connection connection pivotal ability their enriched elevate customers. that to as performance our our focus together only and more the success.The bringing greater customer and a more collaborations initial that to value through customer-centric change. with a not has but our with points supplier been our and We more with other enhances to share gaining engagement, suppliers, technology our collective more

specific is to the recurring logistics HTI and and solidified enabling within have ecosystem. partnerships Wabash the which revenue grow Group, Fernweh We distribution our with transportation,

HTI revolutionize dealer Our for services, to our network also Wabash our of traditional performance. in venture dealers, financial and a capabilities, our of parts. significant and playing nontraditional experience Parts our our role crucial portfolio employees. digital aftermarket allow that now deepening joint the of established capabilities online with efficient distribution the superior advancing access parts employee that appreciate both Group We relationship our aim engagement set to with customers comprehensive to is enables a which Fernweh strong made logistics transportation vast and landscape.We've suppliers and across commitment a spanning rapidly broad

as capability Wabash and with drives an Our their focus to change is sense unity a to and day employees an just and This opportunities to part not where goals. commitment atmosphere high-performance individual the center a the of about respected, marking best feels something complex spirit. address increasingly to logistics is openness achieving its a by, our goes distribution and is innovative purpose, It's within for that them for that leader an every selves corporate fostering work respect that keeps environment empowering visionary every by ecosystem. a cultivating and confidently culture on culture front about and valued transportation, bring bigger.With and of a work role

emerging enhanced our we've harness from support operations Glazner our required the role will will few and set Administrative engaged this attained Chief Chief in instrumental recent very Chief strategic expanding much value phase. ecosystem strategy will the all create operational on most led Dustin strategy manufacturing positioning now and has contemplated years, to for deployment parties.As our of Our to capabilities intends we To focus In of we focus the time. Dustin refresh strategy to been our on Strategy past has our foster over and business. to Officer have scale Operating years. our bringing Smith to legal lead in through shift Officer. capabilities transitioned in and growth life. enhance Officer to effectively, Kristin longer-term continue to His our to plans Kristin the our over people vital December, accelerate functions we our to made organization decision ensure

ensure As drives new Chief that achievable in respect highest capabilities act performance. levels she culture that change the to for embraces on capacity to a business to processes business Officer, levels, and business the to will a people and of manner required Administrative scale we the possess our our

Kristin Our our team financial earnings to XXXX our goal congratulations the fourth like our performance $X.XX. of XX%. set earnings year we is roles.Moving excited XXXX, full new Dustin and to and on $X.XX EPS my achieved their share of surpassing brings these XXXX This share, quarter about changes, to by in to I'd on per during extend per

level our this repeatability While achievement, in supported favorable financial execution, we conditions of as market firmly the the this well of of performance. believe sustainability as

cycle, billion. to to customers, the higher financial increase backlog, when our activity showing new that attention market of our backlog phases performance and achieve strengthen allowed order exceeds are XXXX.Turning conditions will all that the we performance fourth the during market quarter $X.X we to financial confident for sequentially of levels conditions and We through are our XX-month

During stretch capacity having the we're new see With XXXX. this of has activity macro we alleviated as activity the in abates, into typical year, more pressure contracted that order freight we've space. seen see expect historically Moreover, destocking quarter environments, first XX now manufacturing transportation sector. rates to exit to months, normalized the as the for on it's mid-cycle watching

timing the last to the Wabash to of shift billion of to financial us entire consumer the year economic unlikely the a has lengthy to $X.XX. an particularly to to $X.X seems of already industry market the bold about of experienced $X.XX the the of on soft with that clear in inflation cuts predictions with shy combination will the outlook, through factors, sustained revenue And these to back a billion spending cooling market, well labor of landing, interest corrective XXXX. making likely drive as and rebound, relatively rate a considering the participants XXXX our winds EPS about range we're freight $X.X prepared guidance likelihood space although is forward.Moving supports seems transportation on be strong addition downcycle accelerate and the initiating recession. horizon.It potential our In

demonstrate While EPS to results performance this balance it's with be our the XXXX and of the the and through support manufacturing to outlook enhanced organic Wabash's leveraging a strength, is the connections collective to of midpoint deploy Wabash. both market.In capabilities company's during In generated to of operational footprint the by is the been annual ease in our easily multitude from for advancements to sheet had XXXX the second immediate performance. XXXX more difficult achievement has decisively Wabash ecosystem, history the no equipment, services. a expect through we period history, strategic from results digital most us record financial headwinds important best leverage ability our create XXXX growth This a a line the our of of record year will connect we best to financial in across which can immediately, the of vision closing, and our to transformation achieved has post guidance programmatic locations that of strategic readied the parts XX our our will declining to downturn progress have At and revenue. march time backlog be the make network to dealer to in greater and customer continue will steady to access financial moderation performance, term, tied note

Mike well As transitions market for upswing, in the to are on potential an and it to over comments. the his I'll downturn beyond.With capitalize anticipated that, improvements market XXXX prepared hand freight we into

Mike Pettit

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

we while $XX.X and margin quarter, of points XXX XX.X%. XXX margin respectively. or operating XX.X% Gross XXX quarter, During new fourth basis was improvement quarter year-over-year shipped sales, year. and represents basis million, points, of basis which for was bodies. a quarter of the prior of at the This Operating XX.X% versus truck fourth XX,XXX EBITDA the the improvement the point X,XXX was approximately in came during sales trailers

and financial operating Parts Finally, for reflecting flow XX.X% income cash segment and XX.X% a perspective, of of per million, of was was of revenue $XX.X or million and Solutions of sales.Year-to-date, income performance. $X.XX generated the quarter, revenue operating or diluted sales. $XX.X million $XXX million, Transportation $XX.X share.From of $XXX Service generated million, million or $XX.X income strong net our operating

fourth $XXX to operating quarter, upgrade the fourth upgraded paid was of quarter, revenue-generating million. repurchase CapEx our $XX dividend the out $XXX on expenditures assets, the earlier And quarter, flow amounted a to million flow million was business.Net rating of million EBITDA of invested XX-month assets, to in the even the utilized $X also over million capital free free followed of generation generation which year.Turning and leverage I'd S&P during during in million expenditures capital $XXX allocation resulting to by a capital revenue-generating expenditures of For and call million in during shares, another invested $XXX like for of our of $X fourth of to quarterly flow for in quarter. in year million full million that $XX compared we $XX X.Xx. million, cash credit operating record trailing year cash we our Moody's, $X and by cash when

watermark year, our $X invested expenditures call to and assets to a million out count count approximately the of million that in shareholders on This share share the XXXX. back about $XX repurchases million XX since shares, I'd we share returning for to count to reduced from shares by million repurchase equates our on dividend.Stepping in full XX% our allocated $XX of XXXX. in $XX high capital specifically, via expenditures, like we've revenue-generating million reduction For while share

Looking spend over about annual expenditures over period, growth time maintenance that of million shares to of initiatives. to support $XX continues capital allocation order X.X $XX CapEx the focus our or repurchased million capital organic above X-year XX% our million last in to prioritize shares, period.Our we've

XXXX, of see to continued outlook new $X.X billion midpoint by to revenue of opportunities and outlook past for we share as anticipate evaluate we We our continuing M&A.Moving then maintaining the expect years, to we supported activity $X.X backlog in for billion order a repurchases, billion. is and January. have that XX-month This a demonstrated are with on to dividend, $X.X committed our to meaningful X in

to continue truck forces as conditions We and stabilizing in those businesses to serve and trailers, in tank Services dry expect stronger as body, relative XXXX market Parts remain vans. to

and from act have truck will volumes both through and benefit Management execution. businesses as and business the trailers these focus organizational Tank experienced to Additionally, System. Wabash we bodies our improved continue have on

considerable large million to we we're strategic through segment's an an Services lead Fernweh in $XXX $X.XX $XX Wabash call, Marketplace. strategic XXXX, on XXXX below venture organizational generate with like as perspective, it.From million $X.XX see a to with Marketplace planned at and comes Group focus with building that of digitally-enabled pull share to XXXX XX% EPS background, per our Sid approximately expenditures expenses expectations entity initiatives. mention have receiving with thrilled deployment $X.X to recurring by or him Parts as between $XX that in an we in midpoint support Since operating of X%. and, results expect to Additionally, growth to announced share.I'd to is broader named million Director as we margins in million revenue.Moving to QX we investment a outlook Sarangi we of about and result diverse tech grow income $X.XX to run income. revenue the base a the within to scaling course, Wabash operating the the Managing of for charged rapid a with and leadership growth for accretive per come and our XXXX, seek This our expect revenue this of of be on joint of anticipate have capital continue Sid JV recurring capital we traditional businesses, midpoint,

that a will generating CapEx as We also Service expect invest to in immediately through revenue be program. Trailers our

we lowest as separately a expect that give As our this QX figure and program out comes in to terms reminder, as do focus.As to to it a anticipated to reminder, we typical we'll EPS grow to year allocation give that continue in guidance full be into year-over-year, our generation. break investment our and program capital more it's and At specific TAAS revenue for investment grows. point, visibility will in the of quarter

quarter Our strategic come for for XXXX and expectation $X.XX million in years $XXX to that I'm results to execution. team's team exceeded is achievement This share.In be of is generating schedule. for between X between and our testament and proud $X.XX of revenue first ahead XXXX a financial Wabash our EPS million and dedication $XXX summary, our plan to a extremely

complement core ahead, focus provide our this performance financial momentum our sticky maintain in we to of and business. growth cycle expect to more at as that initiatives we improved Looking the equipment phases with revenue reinforce all verticals on strategic

expect to continue year financial for to through market less conditions up market recovers.I'll strategic with resilience the back forward to performance pushing now a which our and as the the open XXXX's As it company position to be operator, we're we we we'll the turn call demonstrate transition, XXXX, freight growth to the and poised surpass questions. of robust enter inevitably

Operator

Shlisky first from [Operator the Our line with comes D.A. Davidson. of Michael Instructions] question

Michael Shlisky

-- So the bit you a the down. about talked little being XXXX for for of trailers some meaningfully outlook

mentioned a in not you there you -- had that's be think recovery surprise. a I the also Then works. could

metrics here. was have of other complete that here almost interest curious trailers a this X they're of to a year? like in where you it if you just the if Or you by XXXX industry kind going the cetera, tell prior you kind back at be Could that full happen? be fully can confidently rates, year confident comment happen other becoming you on, get you us of in away If look big as see I'm whether can XXXX? snapback forecasters, And to better with agree statement. can XXXX increase some say do we'll it a could long saying summer, or as to rates to things that's et need that next snapback

Brent Yeagy

from will great Michael, a has unpack one to complete question. what Yes, of Obviously, it our attempt but to ball be, I'll crystal no point XXXX view.

more say, probably of results there are in beginning within and, measurable itself, absolutely, on become I signs the materiality is think, that midsummer. I initial and correct heal market would to and it those verge should customers by the much our

say, on clearly, recent of most continuation prevailing see the is March, the that actually that based reduce Now, the that we'll hinges feedback rates thought -- Fed. interest after in -- from on we'll

means better for I think the from a I that U.S. things standpoint, quo, obviously, But time we acting period. economy change status want is doesn't much sets think materially on in the geopolitical -- current up a XXXX. that that us the that

that I bit pull I few Now, into you case. needs [ Is moving first in I on would it market have little into -- on believe function probably different necessarily of we we -- But I 'XX. unpacked. I where have a perspective a ] the XXXX? a will what months see a still we XXXX? significant be to definition think demand think sitting a snapback think see difference we're back -- step is that. those And can position the going change is a and -- we see a to should in be the of

at robustness planning probable build XXXX, And this business throughout be most of off it I material. being think the you'll based see that that moment. think we I our and can are outcome

Michael Shlisky

follow up a then. with question can I Maybe Mike for

about pieces a increases versus working cash company fairly the a end lot here? in the keep but 'XX, at given kind already, if see be free to capital, the confident to 'XX, end of level the pretty like feel -- some still of you're high year do I'd us 'XX you you need the capital to working that outlook here obviously for you've you'll curious of On

Mike Pettit

Yes. revenue what of 'XX less see demand capital expect, the little with the would profile, in expect a we That capital same seasonality from depend would on the or a step-back working either happen at would 'XX, But we'd with bit slightly XXXX. obviously, to in to year-end. you see obviously would working

be free see that. should enabler flow. it an So to tend cash We to

back year the expect do cash what to to but would need working year. another we increase in 'XX we flow to XXXX, strong So really in up free expect on into unless 'XX, of not depended ramp an snaps see capital would early in

Brent Yeagy

Yes.

a be mix increase you integrate chains are getting There the to in safety factors. time, Bu at supply moving raws. have better. the is more capital increased will prepare going more There it's reduction I away relative same that and stock 'XX. think for the into in some and from of We're to 'XX. working

to there's lot integrate there. So a

echo that There's big shouldn't factors deal really that in I So moving of a Mike. lot go says, it into be 'XX. a

Michael Shlisky

one me update I driver your 'XX whether much got in maybe And stuff I launch launching. Great. that the in a how kind stabilize think in broad other a going Can you've reefers 'XX? last about about you business and us products growth and comments. help 'XX. hear know will to didn't one prepared in new Minnesota roll that lined 'XX the out. the as new driver reefers timeline you maybe of be Just to to for and real material for

Brent Yeagy

strategic be going be growing It stable it'll well on part environment growing we'll a Parts XXXX. product that. 'XX where think aspect up to will I just see as off platform a our side. think be of our in reefer Services I and a do of the dry are from complementing as don't see XXXX in it's profile we in just driver every with portfolio, portfolio be of overall coming it with bodies all. as continue from very demand to it vans. We'll a pick significantly Truck will

about product those capabilities lines and different service pretty So all I feel 'XX. good in

Mike Pettit

to Yes, growth also them, I just on effect and we've provide with so check profile. Minnesota, that but I reefers there in and add hit done helped earnings reiterate, has bodies, in box in is but just there's the the stabilizing important, want X definitely we'll truck Brent that agree. which 'XX, really what the parts and there's in we're are 'XX, do pieces to that tanks. stabilization It see ] [ seeing

Operator

from Stephens. Justin next Our of Long comes line with the question

Justin Long

of with provided start on that that for you I Mike. is pressure cadence to step-down of the XQ there but of XQ perspective you in year, drivers on the an other the curious Maybe the -- Obviously, question a this earnings. know And we front? saw quarters first a from pretty Or look year? any about sequentially in quarter, quarterly over any if outlook the EPS seasonality, guidance, is you versus big speak over ramp Is can more was remainder just you of kind you that the think causing the that fourth cadence color as those the to could there's I -- some a And do looks the earnings are course similar? think like pretty give quarter. to us what just

Michael Shlisky

seasonality with that is of start year I'll us. in lowest The the one a normal typically year the first. Sure. QX for quarter

that. going we're see to so, And

want part, in QX a other when QX with seasonal the last little in to in relatively quarters see flat the be going volume QX relatively uncommon. biggest year. QX, obviously 'XX There's but bit but calendarization that for then, Might of believe is the right the demand. to be I to you'll So from for of QX, it's to It there, seasonality step-down is And to year-over-year be flat. will to we the And little the in we of going the the for driver. -- going pricing a to really again, can be caveat, lot. for be see start but X. step-up QX, We think in low pull, earnings a see most not to X now, a higher QX a now, time time

Justin Long

trailer helpful. better think, Okay. moderating. you you in plan you've on on to is and building of mentioned guess doing in I is that talked the to That's last And so, strategically, next this question, production I puts And kind maintain the Brent, your to headcount about thing position that in respond a call, that environment that one this despite upturn.

think the to of be longer-term that? and about pain you year So or might what gain? for this implications is there earnings the a taking of near-term financial headwind And kind way is cost the the

Brent Yeagy

Yes.

which not So headcount we'd truck not aspects holding business, way. frame backlog at is as -- the a across is board. secure way. of in labor. looking the holding we order in had utilize we're think We it a to be headcount bodies not business versus labor We've answer we're it this sales that When efficiency across manner and and and one And we'll with headcount. where are a headcount to that is standard -- in trailers, able been filling it the about or some such non-utilized adding underutilized

side, right our has the to So a taking little no, been third our added cost van again, capacity leveling shift, and there the a to from we standpoint shed impact within out then dry intact. right we detrimental sizing Most would capacity shifting of And X-shift leaving on workforce online volume been the then, now, the of what I on operation. full-time margins. that call, temporary would labor our workforce has plant brought be have through

Mike Pettit

some there's in would add mass you opposed is, to thing to about plant. the plant if believe downtime this only think in layoffs since as a it, short-term that more The we is of the I thing,

by handle change. we're because without trying how a some Brent as come we We're it's that cost back. That's that's we So cost, going we're significant -- to that taking believe maintain downtime taking mentioned, having to -- temporary normalizing that.

Brent Yeagy

we upside have we throughout it's for our, on Yes. then, into prepare we workforce and and of capability bring have really higher right call, more throughput XXXX, And really, utilize this manage manufacturing And as I scale there's as of dry say, how today. at what want the to added added efficient, 'XX us with allows to vans we'd we headcount demand then, the for not the periods as about in now. inefficiency we'd as XXXX, capability years. to not throughout way outer, to and that So about really accepting and much in right? move added a take headcount prevent defer efficient building we cost inefficiency call, It's

Justin Long

are Okay. me, And on production. lastly have I That's the a you've ACT tweaked helpful. if for really far, forecasts bit guess, thus been real seen the season a quickly from guess if best for curious ACT maybe But I that feel any Mike, at includes guidance, buybacks. impact on this forecasts trailer then, based curious still think little just order you the good XXXX that point.And on I'm just those

Mike Pettit

feel ACT as impact guidance I far think the as the But we buyback. generally that's from does not include forecast, like ballpark. No, in

Brent Yeagy

third forward-looking behavior, reflective customer views in the provide customer right really call even that general Yes. they and with where The market. were at sentiment, the line are us of quarter they are

I on the they market. think right be based ACT as can as is

Operator

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

Jeffrey Kauffman

first, a and I new follow other last I [indiscernible] the maybe bit want up about guess, these some Congratulations on XXXX. of little question then businesses talk new or on focuses. to

and got the set know guide, the we I of to somewhere. So in looking terms bar at

year. forecast the down the for has So about coming XX% trailers Research ACT

you or and your line trailers in the capacity XX,XXX had in I capacity probably shouldn't give that dry, this don't you as were to XX,XXX But out down trailers because also production reefer trailers, argue take, X,XXX Now, of I were worth switching out, in industry know, year. you facility. in you the with were come other would about

down to in the capacity back, should So industry. production starts as theory, be that not as much your come as

and that that So got to the billion there, implies it? to on think Or bring the about, putting to back in when how you and I'm about going that it And I've look math, 'XX but you that newly got and something okay, can capacity am look got the back, implicit wrong? $X.X well, fair then, bring trailer capacity do trailers how Transportation reefers revenue my way market? coming XX,XXX business. back, XX% I about to thinking think at Solutions about think made bringing I at I down units out to billion you do you to I'm Is me own are I that about a do $X.X going

Brent Yeagy

it, the as sit the we're XX,XXX Jeff, your business. dry -- is, growing I'd in would leading today call call which of, I we'd keep capacity market in absolutely Yes. bringing we'd do We thesis same you're the correctness. And are relative production XXXX, it, we a on, of the to trailer able At the we'd price presenting headcount. gain very that, van in call say position maintaining existing units with be. it, ballpark say share our we here in in line market, is a nice time, to place as our

van of that little you we're do environment [ today big will about And demand entire didn't relationships ability build think that so, we doing -- I be a think allow system. taking are and the -- there dry of the backlog ] a will that across So manufacturing set going and strain to to real able demand customer the sustain, putting to price. deal, even price in grow on bit work think in efficient in be a itself an allows that in right? a We a without it to market 'XX. 'XX, which way maybe is leading the there's pricing The

here pricing much customers that -- of see we a want a the And that meeting we being efficiently. the XXX%, place able want those We utilized to environment is at at very so, and capacity business efficient And run time strategic maintaining advantageous straight Wabash be forward, not capacity. needs manufacturing core is of run while to to most our it strategy XXX% call more going that home.

sets -- there, well things up there's and up a XXXX together going of beyond. So but lot for it sets for

Jeffrey Kauffman

Okay. new the with start refrigerated And think product? trailer side push you the we when on see the to do

Brent Yeagy

Great question.

the I it's next over months. materializing think still to XX XX

based capacity, going again, the to additional manufacturing utilized technology are, well is that to being that's capacity see is We add to But of of process additional in be pressure being off to adding in capacity developed. going us and require some capacity. that new XXXX, seems the backlog which we

that So as that more deserves. and outgoing capacity as X we coincide. add And we are continues down years. have every the pressured But to that, product go that long to proposition value path, we'll absolutely the in things for those to more pricing establishing day again, be believe that

Mike Pettit

just a in market truck seeing that of to the and reminder, hope truck we're EcoNex it that soon. trailers. will there's it's we We're in, space. not we body well segments And play truck body think bodies, And growth to seeing just in other some bring

Brent Yeagy

want business. to allocation about Yes. And frame now. se. glad capacity total Mike remiss, not really terms to per because for compete said Mike's that even it makes I'm technology discussions we because right point, And internally, of That seeing I'm capacity It's scaling. vans that in for the Cold return interesting we're to Chain really it's reefer as opportunities about now

Jeffrey Kauffman

one then, one, And can. if I Okay. last

and Service So the manufacturing the have business, Parts from separate you business.

that volumes? 'XX Or business before an respite You've year is investment Service we a before capability of more that an some environment in to this may industry to 'XX? growth in back and you that 'XX, a help be grow go in moves higher partners in it brought think in forward should Parts on that industry push taking Is area.

Mike Pettit

confident grow XXXX to Investor We Yes. revenue million that and believe of remain can business. $XXX in and our year, Parts target very continue Day we this in Jeff, of Services, in we by

million, we million $XXX $XXX So at finished just XXXX. in

path reasons space, bear 'XX in environment. a which aftermarket really million to market and in glide rightful can -- we of XXXX, play an we're to demand the trailer can place believe to otherwise in softer the one we of some we that in We Wabash grow that So bringing bit grow require that would to again $XXX a -- to us just grow runway then 'XX. has we've got quite capture believe and

Brent Yeagy

Yes.

an the really which us a think grow with we're in attacking way, continue Jeff, pool the competing, on need I new Services, doing going We blue purpose. I Parts say, we're capabilities pool. in same capability. allows everyone into it, in just, areas as paramount the need no and and right, market guess, I we with ocean to to that blocking underserved unserved to to The jump not is some grow, the understand it's old and find equal way, else. after it to that's would that, way all There's tackling

Jeffrey Kauffman

you All a insights right. year. and your for congratulations on Well, fantastic thank

Operator

are no further questions at time. There this

Ryan Reed

today. us to joining forward during Look with for everybody, Thanks, quarter. following up you the

Operator

concludes call. today's This

now may disconnect. You

Wabash National (WNC) 1 Feb 242023 Q4 Earnings call transcript