WNC - Earnings call transcript Q1 2024 | Wabash National Corporation

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Operator

Good day, and welcome to the Wabash National Corporation First Quarter 2024 Earnings Call. [Operator Instructions] And finally, I would like to advise all participants that this call is being recorded. Thank you. I'd now like to welcome Ryan Reed, VP, Corporate Development and Investor Relations to begin the conference. Ryan, over to you.

Ryan Reed

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

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

Brent Yeagy

afternoon, to weaker. us due fell expectations Good of that year a emphasize seasonally slightly the demand, Ryan. XXXX, everyone, Beginning quarter like our of to Thanks, particularly tends and for slower thanks joining first to weaker income be short of today. customer for our pickups QX and revenue equipment. I'd with of

products size production quarterly quarter to equipment delta anticipated up revenue their of QX. the into on revenue. versus will subsequent associated particularly to rely and said, flow Additionally, were recognize customers during our the quarters income that our first pick shipments to during XXXX, That we necessitates before the we the able outstripped our

capabilities marketplace has is comprehensive benefit quarter. the growth Parts to and platform objective connectivity, the to facilitate discuss version of potential TAAS a of for at sets and to opportunities our logistics trailer from Wabash offerings. Also, year ultimate stage As or is will we focuses Dealers services industry focus and advanced outlook Wabash our reaching with dealers, and we chain in parts range and network. as parts, team providers, will on we initial connected technology on transforms the our XXXX. of Collaborating an services, Marketplace efficient, Through first venture, leading aim as particular customers user-friendly. launched dealer unchanged. From standards financial later, and our solutions the perspective, making Trailers through a we'll integrated and partner locations. enhance the seeks it a new Parts in wide strategy that our to additional XX distribution ecosystem for and for of end-to-end a that up customer-centric remains streamline more suppliers. platform supply network experience Utilizing improved an the for continue distribution technology with our maturity opening marketplace the to a of joint deliver Marketplace experience, Service Wabash capacity. The Wabash customers expansion digital develop The the value-added meaningful our significant JV the growth initial that access for

not strategic marks through comprehensive to Services customers our Marketplace course, position supporting value more previously by chapter affirms Final and trailer First synergy our for the to more have had that Of broadly one a for the course in year Parts between equipment portfolio, Wabash, down new add the opportunity and its in life and as explore. Mile Wabash initiatives investing growth during cycle. Confidently industry this we Parts in market our Wabash the our to of a seek equipment segment we the

of for the mitigate see relative our gain our We in the for we trailers, important helps clarity which decade. anticipated grown last demand dry in demand decline this tank emphasize it's over year. and As truck more to that bodies XXXX, resilience the portfolio stability van has customer

cycles transportation, This well logistics and continue leadership shifts backdrop industries. on trucking, and our best-in-breed with foundation enhances from for to capitalize participants layering retail, strategic but the stability In expanded stronger our diversified innovation market addition relationships strategic provides to growth. on in customer in and our us only positions and market equipment portfolio and logistics a benefiting not also through distribution

As individuals. In commitment, community, aspects systems being relationships we employee we values that leads At which and that a succeed. our implementing range our bring work These communities in locations, wide and building vision teams. This a people of of strategic consistency also these values, all fostering formed culture where are and higher ideas flexibility and These but dedicated line growth objectives, areas have a represent levels shareholders with teams an improved a to and emphasizes environment. represented the changes component organizational this and sustainability at core standards, to financial multiyear of aimed for environment, to cross-functional addressing is have tasked we are working initiative council, strategic of our acceleration internal employees our various believe embodies environment advance our value of our performance. and in critical we to to our teams advance Wabash, ensuring a the aligned enhanced of culture established engagement, creating only across with and and our investment leadership perspectives vital we creation. elevation autonomy, affect continue life, execution while and not of processes. To being Wabash, functions geographical our our include positively in can with everyone the partners, responsibilities customers, increasing and interest in respect

to market on Moving conditions.

freight challenging like years. couple while at sector, important levels While indicators have the the market abating a surveys of have index been leading of ISM that working headwinds the over experience XX, customers the continue environment, last seen manufacturing shippers suggest returning expansion inventory indicating destocking to against rising from to we our freight above

the early our $XXX of America. Shifting $X.X figure these conditions, with the with may shipped North billion has like the we billion into you strengthening a the XX industry and of cycle, first but from the improvements the to the on sequentially, roughly next markets in backlog. resurgence that shortages ], since the on revenue freight pair activity stability we bullish note downturn only be to persistent meaningful driver the for At of orders. XXXX. Thinking be our within to beyond total had close Both power it's relative were benefiting While to current secular in in months. in volumes quarter, million the the with quarter, figures improved macro began translate remain horizon of market core that near-shoring million implies focus to orders, we freight yet optimistic trends $XXX our [ of important by $X.X see capacity of that over of the backdrop new lower continue when backlog that transportation meaningfully we expected that indicators are amount positive have left

financial our outlook. to Moving

Mile strength Service this Final the underscores Parts execution for freight of growing of of maintain cycle. diverse of our reiterating in equipment I XXXX. of backlog, EPS. In paired believe of positioning portfolio First by $X.X we benefit a provided With on are the revenue visibility the to projects our business, to and opportunities minimal ability positioned a leverage our is Wabash we organic at $X.XX future. guidance year the on With XXXX further and unique and of of market are strength sizable with our the growth strategic stage midpoint capitalizing with closing, unprecedented presented our a full focused by environment billion the

engaging deepen that and we to the new culture employee distribution transportation, well We within on working with strategy. remain well committed our dealers, players improvement interesting of to are fostering are logistics suppliers equipped experience, to with and landscape. Simultaneously, our continuous our actively relationships ensuring within as own a customers act as we

to enhance for for not our will are of only that cycle, grow the sustainably points hand in creation to comments. Mike financial over enable this stakeholders. With it confident Wabash approach also all We level at all that, value his I'll our performance but

Mike Pettit

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

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

customer margin quarter we pickups Brent we revenue do equipment we opportunity on anticipate goods saw sales. quarters, million in finished X.X%. In of operating delays was of some of or sales in during margin operating the during first As XX.X% subsequent EBITDA $XX while recognize first second and quarter, of mentioned, quarter. Gross to the quarter, X.X% generated the came these at in the including

million million for of Transportation generated operating $XX million million. diluted $XX what operating Solutions per of million $XX cash was Parts sheet, the liquidity, net repurchase was We $XX.X invested our in Finally, income back-ended both million common dividends comprises revenue $XXX first and reflecting and available Services $X.XX with quarterly in which and projects, March ratio operating quarter, income capital to quarter $XX million. allocation, $XX.X of $XXX and the we million. Year-to-date, a perspective, income XX. as segment stockholders outflow is of of X.Xx. On of borrowings million leverage shares a and net capital debt of revenue finished an share. From attributable of paid our of utilized was typically QX $XX QX. Concerning during quarter, or balance generated $X.X cash shipments million, to

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

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

our to outlook for XXXX. on Moving

backlog revenue an $X.XX a share guidance billion new order and well a We by at We midpoint $X.X flow of range continued during to and first of a of with this pace is $X.XX. to of a per the reasonable reiterating range are a stable $X quarter. billion $X.X supported ] with of midpoint $X.X EPS that believe outlook [ billion;

for through $XXX in our portfolio those share. We accelerate dry businesses revenue growth and Services come to tank be and particular, forces and we as and to Parts year-on-year within anticipate move for our million $X.XX In expectation stronger EPS in as Services XXXX relative is continue our remain Parts per we million and second to body, conditions as about specifically quarter, to XXXX. Thinking market trailers to in between see van. $XXX truck between $X.XX stabilizing and in

XXXX. of XXXX growth Moving We planned expenditures between on for $XX expectations to as in strategic result to anticipate million a $XX to be and support capital traditional capital million deployment investments initiatives. our

that the invest specific revenue a to immediately opportunity but be comes profile financial Trailers excited the for program. will as that Service at will guidance would expect as units company. back also to least be loaded, we program anticipate we an demonstrate give generating we our believe XXXX focus We we We as take will in through expect more conclusion, and in investment half through-the-cycle in improved XXXX. In CapEx what I'm the X,XXX is about into figure

most top more our grow to us allow Additionally, line we're our a currently of our to strategic capacity demonstrate to as contributor eager become in and the Service to enjoys Wabash significant pursuing by the to the Parts business growth a company's history for adjacencies this potential and whole. portfolio meaningful

that And to believe and transportation progress will an equipment industries, strategic in we our distribution look of this chapter leader to positioned at industry on industry this a transportation, and you. I'll of logistics to As up ecosystem you the of open the turn firmly platform updating Wabash well the the Marketplace complex diverse via area participants back stakeholders initiative. We next the to have reaches for in of unique an to opportunity within questions. challenges world call we'll journey our change it digital Parts the epicenter Wabash increasingly distribution the address operator, unite forward how now business. define as the as we growth

Operator

of [Operator of Mike question line the Shlisky first your And comes D.A. from Davidson. Instructions]

Michael Shlisky

Yes.

issues and some first logistical of their industry-wide based I'm get So Wabash beyond during quarter with from country. might I the in to or the phenomenon? this it have an having people just [ an that second pickup elsewhere changed quarter ] trailers -- wanted issue get didn't if Was guess they're about and the have curious, to and I [indiscernible] and year. to the issue first other was elsewhere things an ask the to

curious if facing, something everyone is to should strictly as issue? Just thinking that be or a see is Wabash this is of we just it

Brent Yeagy

down is on across board we a mean any normal year, are feels of we at when to said we normal the only and situation not it, type time release vans. type quarter I to compounded and the the of mean call of our industry there. have. narrative this the out year, in that dry I a issue This as the Mike. by is that put customary actual, in Yes, in, relative first but being a

time point. to terms this throughout is in everyone to industry general, of to be it So of needs pickups is be feeling the at this overall And year. understand people in as at what the weak put are expected service in working

short little what a those industry itself in So customary we a normal phenomenon expectations is while were are, fact. the and

Michael Shlisky

Okay.

and want understand maybe just Mike, a that revenue Do model is [ model put of inventory as to to attachment? units. what mention Trailer I'm like there. and we about units incurring least of ] model at per how I to start out? sure numbers current far do you or also get Service. se. ask details leasing it outlined sales, X,XXX rental you won't to to as with as as in did per units couple you start mean that X,XXX ] guidance that X,XXX into guidance I a attached what's [ Okay. that actual I But my business concerned. not we

Mike Pettit

Yes.

show as will a from P&L expense. lease-type Mike, So perspective, up a it

leasing-type would ship a model. a wouldn't a unit It see be of You you recognition like will ]. [ full revenue

a see expense. revenue in So monthly you'll ] and the [ associated monthly see you'll expense

it From it And be -- a property in as of it in out you'll break will our up we a from our cash cash flow revenue-generating see normal statement show plant equipment. flows separate perspective, asset.

units line our in So service cash see flow that you get as can into on will put up show that statement. those

Michael Shlisky

of to get probably and I between over last that curious is the used exiting there one current few largely you what away capacity thoughts, whether in or of the market -- I Okay. some they we've about demand guess Brent, had in and improve that see today over those the used much if for I'm will large market equipment had the I might the newer high that think last has market end couple market, mean in may large loads, units some improve from Maybe one from sorry. guess months, happen one up to new bankruptcies levels? exiting [indiscernible] market units whether next orders the XX up me. a back didn't of the older go some be quarters. the taking

Brent Yeagy

are evident think make I continue what ] direction. We're are leave there is happening. is Mike, of it it to to -- when of seeing things most needs the number the path beginning kind happen We're mixed the manufacturing what our at the signals is it activity begin confusing a already improvements So to industry is most market. market within to needs level been gross a of actually I always to Yes, to think on move when that when mixed improve. get And that capacity that is has the right? imports [ The of be upswing, we happening. seeing seeing need happening are the

and spot sitting a have happen freight incrementally as from of the to we're That's -- don't where it the should and real-time what course effect X going next the they market. right Now now. on months over

to it's drive for So be and estimates already do questioned needs is Fed in play Fed is at factoring happen. The now. one thing where from The going an play. standpoint. market forces by happening for XXXX. still from that. to set are everything the, the deviation up in already is really And no is say, interest the up the what gets It's from ACT lines that the new out what are in It's I in exactly rate nothing there forces -- I'll FTR, for forecasts that play, should there to already right think that

have interest into going the until Fed if an QX, will the probably waits materially affect that XXXX. let's that is drive forces say, just to reduction, to not the So rate upswing

happening. set itself that's needs think work the just called. I is over It's out It been So time. to play

Operator

of from of comes Justin Long Stephens. the question line next Your

Justin Long

way the can as your is the guidance? then quarter back step there catch headwind the the of any And color in year, the I to at quarter. in guess is first just shipments any is take provide that second help delayed getting quantify just trailer the think to you over and there could on up what a we was versus that pickup reflected the balance expectation of So in to you cadence trailers, back the quarterly us through see look

Mike Pettit

QX, disconnect that stepping that between guidance saw say the we we would pickups generally, you results some see the delayed then versus in of our We expect into little guidance largely EPS continue with and and I had. revenue QX QX moderate QX. increases obviously, EPS, a that to in and that back to revenue would And higher half in significant. was not see Yes. but

the QX and Brent what calendarization will XXXX. stronger that what do had that can affirming the compass we obviously, we much a [indiscernible] up be QX ] full miss year and further mentioned, for to So a you our then just little set pickup think [ with

Brent Yeagy

Yes.

to saw kind the mid-February. pickups the gap color tail the some to we put in pace in quarter. And additional were improve January that as I -- then moved Just first then as of, the it. we into I'll dramatically continuing to say, pickups we put would on of Most and second quarter move early and of into end

generally And gap So that they're to February understand they really it in half and about piece of environment abated. working up, for they to, of to them they're that year. of because kind is into the is operating pick fleets putting move of need them really what and first remember, timing trying into create Where has that the when do January revenue. that rounding trailers the the areas to service

right? just and be. there. saw So see move, Then we that from to they're going they waiting once happen, it And know, flows where to they that's then

Justin Long

of you're full that I were X%. year That's quarter, along lines, if X%. cadence The I talk is Okay. could balance wondering was of it. you around the year. below the for touch If guidance first And look the expecting helpful. you at a over similar margins I the Got guess the operating about

So above need implies up. to average kind that that we level to be of

get will So improvement that more expecting just through wanted what color sequentially the you're drive to the cadence and some on year?

Mike Pettit

Yes, a I and holding and [ expect half the volume follow down We naturally described X.X% year revenue ] think year. going of a contribution as less largely full at at held X% below little X%. into number that's earlier finished what's QX margin move over grow it that it's to I of because the QX QX fixed in second our we and impact largely the lower we will

The also other continue tailwind a Parts the Parts margin in well we the to year margin get and compared to Service component of the is our Services second to will thing our we as grow perform the half performance talked OE outsized this that delivers remarks expect be half and we about second business and year. an of our in into as side. to That

Justin Long

Got areas one the you've think it. other I Service talked to for resiliency me being And are the tank the of in historically about lines, those truck last areas business. as business body trailer Parts and addition along X and

So what's in growth are segments, the about talk a if you X guidance areas? expecting more I'm little into getting those could those bit XXXX you for curious baked

Mike Pettit

shipments expect pretty for the to to also do truck Yes, weaker in but sequential side, a we were truck a were bit little we But nice things than very we the see would expect hoped some bodies truck bit body the some specific bodies. our year-over-year we trailer trailer in body was growth commentary, on business. in discussed of QX sure. -- it for step-ups QX a truck pertains little for we bit

we that's transportation So OE saying increase stable that that and tanks to year-over-year less back really in growth growth to selling there we while been see more stool see it's all is cyclicality, bit legs [ ] dry our circle see bodies on year. our a see year, logistics of products the to always Parts excited a industries, in van to form has [indiscernible] in we'll more we've off we Wabash. truck earnings year. cyclical is truck of pullback continue business should in these so broader this calls, this participate see have and in less little the business, we'll Tank than seen we're it I and we've show van some a we And actually -- And in this business. which dry stable of had bodies to -- and dry would than year-over-year -- in Services shipments X of vans. And what at conversations earnings, classic tanks, tanks but think to won't

cycles, we all So while than be participate vans. to they has less in they in that an industry see cyclical dry tend

Brent Yeagy

experiencing can affecting segments we more much ability have Yes. see that markets set evident in differently. different a resiliency The today are in different to secular overall be the nature forces sub We're different not where where of courses it's of This forces the XXXX groups We're leverage event. to not simultaneously. affect negative allows type experiencing a resiliency a which the of all is really of macro portfolio. that set us segment-based

Operator

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

Jeffrey Kauffman

everybody. Congratulations,

Brent Yeagy

Thank you, Jeff.

Jeffrey Kauffman

want every A I get not It back what happens is. modeling is this I units just mean the of to that then. to on picked and up couple now questions. it were time.

just then sake, see number X/X work when we the happen? in guys XXX the haven't quarter. is, the third we don't How argument's first quarter. one for Let's say, in like in what the I it something doesn't all It and was would quarter happen thrown have out. the you X/X necessarily, normally know it right? But maybe of this following XQ typically this and of does in number that

Brent Yeagy

No, Jeff.

know for long generally this And doing that world how a it works. been You've the say approximation I works. enough is to how would good

Jeffrey Kauffman

was might what truck look and tanks give little being stronger little bit of you Could like I would was mix trailer little for then bit. down pretty levels the the I ASP strong, is issue off a what costs without driving feel looking great. ASP. material us with than us stronger bodies All assume raw and at idea a for, a in both right. And trailers, body give of coming an higher ASP ASP a truck in But which was

Mike Pettit

obviously, I'll with about, have start I you would long say, say trailers. as -- a think I Yes. we backlog would business.

times shows that in the price ASP for through at all that the the revenue the different over or year in So so. shows last quarter comes

So you reduction through see some as go XXXX. ASP would we

the in down we go I think increase come year. ASP you'll as volume see through

But For speaking, -- it environment can more that represents business. some saying, think is to truck that business I bodies, just it we've stable generally there be pricing that demand what mix in strong in been able a have [indiscernible]. borderline

as So move wouldn't a we of truck go the bodies as you in of and through trailers, pricing go for second the I we expect as will much through step the down But year. a half QX see year.

Brent Yeagy

all changes better and this that in commentary, portfolio our I general some exceeded and dog-eat-dog which trailers, pricing the in pricing platform a we're really the made of a through of an is resiliency the we doing of have more segments, cases, environment that expect maybe would just nature little the starting movement shining we've of has, would minus in and product And expectations channel say part pricing that for just effect how value Jeff, of the we're in. it. I pricing is kind manage the the past. on the We're a mutes might of to you And market the I think just actual say, impact seeing that -- that overall across net, big

Jeffrey Kauffman

very a and operating Parts lot is we've this margins margins a that because fantastic. but Is And margin which XX%, operating gross of which was don't a Parts basis, forget. XQ? you things bunch Great. times, what's remember Okay. better flow-through bit this that changed a margin lastly, Service? of The Service. little in I've something sustainable? in there more strong, was seen sometimes number then is level on I I pretty you reached in as but that is And impressive Brent, the seeing expected, these new Or and than an And mentioned, helped

Mike Pettit

Yes. guide to wouldn't Jeff. XX%, something I over

maintain -- that. been XX%. I that's teens And have of We would upwards high saying

we the a that something strong it model had in performance wouldn't in So QX. we business. rest that to a the stream XX% compared while portfolio, really And in now, say, high still margin be road years can something above the want few may forward. is to revenue of I to teens outsized from while down going in XX% I the do up would

Jeffrey Kauffman

And final then Okay. question.

a ask what be for. Could Trailers I talked You Service you a going accounted as back about -- you you to repeat could entirely I go because how is said clear. little just and bit to wasn't

You talked show the really expense I going that's about lease wasn't revenue. and the sure up. to where

Mike Pettit

cash will So from -- how the service in then expense will a revenue in we many the through. you'll flows. of And field revenue will months or up if -- is lease the see a coming a statement perspective, that will asset capital up unit show show as and as it revenue-generating in our

Brent Yeagy

to will So come and Parts Services... Jeff, that

Mike Pettit

question? Yes. that your Is

Jeffrey Kauffman

Yes. question. Service. Parts my was That and Okay.

Mike Pettit

and Parts sorry. Service, I'm [indiscernible]

Jeffrey Kauffman

challenging congratulations, environment, Well, solid of Best Awesome. Okay. results. luck.

Brent Yeagy

you. Thank

Mike Pettit

Jeff. Thanks,

Operator

further no time. this questions are There at

like Ryan. hand I'd to back to So

Ryan Reed

today. Thanks, to great Kevin. Have a the look Thanks, everybody, day. for We'll quarter. following joining forward up us during

Operator

you Thank That does conclude today. our for conference for participating.

disconnect. may You now all

Wabash National (WNC) 24 Apr 242024 Q1 Earnings call transcript