WNC - Earnings call transcript Q2 2024 | Wabash National Corporation

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Operator

Thank you for standing by I am Arista, and I will be a conference operator today. At this time, I would like to welcome everyone to the Wabash Second Quarter 2024 Earnings Call. [Operator Instructions]. I would now like to turn the cost over to Mr. Ryan Reed, President Corporate Development, Investor Relations. ahead. go Please

Ryan Reed

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

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

Brent Yeagy

Thanks, Ryan. margin end performance. previous our guidance of today. quarter XXXX, stronger us Good while per outlook range, our on our of joining our earnings was morning, share lower and for quarterly surpassed with the second thanks Beginning the revenue everyone, at

efforts. like industry. continued our employees Our for year team well their the transitional has during to commend this to I'd execute for

will narrowing year As we that a importance Wabash to balance customer made the organization, portfolio, strategic our years. streamlining markets. optimizing transportation, for underscores distribution focus and this solidifying our over we and the at By XXXX sheet the have past changes industry, our overall several strategic of acknowledge be the the our down logistics

the to positioned more pursue company opportunities. have resilient We higher margin revenue and

our than in and parts on this services developmental focus to XXXX. place strategic work the speaks taking more Nothing and

our which a provide us excited to customers. through are the emerging So we to marketplace, value-added trailers to about our provides services additional service enable capability our Wabash digitally as platform

together maintenance financial fulfilled a preferred positioned begin of Wabash raising scaling XXXX, on digitally is to now joint by partner ceiling venture. continue and services full our in assortment In network customers and to connect the performance. parts coming can structured our Wabash all the addition, linked With to both Parts Wabash our floor of Wabash with for we

performance. equipment transportation side parts revenues services portfolio. stable provide focus our more stabilizing they is will critical services and our equipment than a ultimately to scale, financial emerging on as and the of Parts But our strategic these back within ties and force

ongoing the Mile recognize all demand of the is On vary are First across for to portfolio how it of market conditions by in changes is freight Given in this Final call, worth equipment bands activity our in market drivers to well analyzing do freight, conditions. dry certainly influenced verticals. general aware we

influenced of meaningful truck different market such our drivers. However, and by portfolio, very as businesses, bodies trailer equipment are parts tank

transportation, middle range that over-the-road is truck for the demand a of much equipment distribution warehouse are as Within trailers for utilized that dairy, end by calls demonstrates drivers. are general our set rates, This but business, to to tank home our pieces delivery. body applications mile of more truck freight of body of freight wide conditions. specialized a not by compared example, these over broader such for chains which customers stability are For used redistribution and logistics part significantly diversity means driven time chemical supply or

manner. a and It's continue of and us this enable lows not reaping not resilient Extensive products across profitability gone demand developing highs more the from of has range transportation about same. serve higher will array and business services about doing are more mile. in strategic the market, we approach trajectory customers should a and first-to-final we financial diversity portfolio. our foundation this our performance. of measured portfolio, shaping and solutions necessary steps the be and influence a of Instead, of and factors now the taking planning build Wabash into to boldly that It's are very diverse to our we not dynamic a equipment to of and single resilience is current and that benefits pursuing higher

Turning conditions. there of is I both pockets ahead. optimism weakness. believe strength about [indiscernible], and We see to market what lies

Our demand ongoing plans XXXX normal of although most freight how recession, drive to truckload half a within seasonality, had seems experiencing said, recovery. return this market certainly That their would way have rates. to still as well relief year. as market in for on downward freight van reality customers freight back bring path be little expenditure odds is the moderate the unfolding balance of the with The from a of have point thought the capital XXXX improvements customers at positive both to the revised the

spending have indicators time macro it some for to the positive production turned of the impacting in on state a have manifest important moved like like potentially carrier a excess I'd address While macro to the markets. factors will Also trailers. supporting bit outlook the take levels prebuy industrial from balance, and truck of further on inventory heavy-duty freight out, to narrative

XXXX to the EDA's mandates, demand agreed anticipate for the we above of diversion trucks. emissions boost from at we capital temporarily underpinning trailers While significant trucks economics don't trend, to a

billion the we in RFPs, specifying tractor this are by inefficiency mandates chassis trailer in had and like continue to this billion grow. emphasize expect only years. second next portion for XX receive At tractor strong shippers the a few Shifting trailer segment higher to future. imply and certain that nearshoring. into and the freight higher do expected the of that earmarked impact orders on figure will their trends operations, quarter, remain bullish close to classes EPA in is the backlog. XXXX. shipped impact remain I'll over we in months we Additionally, ratios shortages and body to that of that only secular to over set be Wabash ratios of our significant a power-only driven with $X to focus which persistent next Many truck term, $X.X driver increase The long being the total the of

customer orders to during as indicates in frame pullback they months a and summer deal XXXX. as season focus prepare it to large to occurs in shift the softer time the the backlog traditionally our XXXX, fall begin see capital also carriers for seasonal intentions which difficult expenditure While is

on our With full CapEx at $X.X outlook. on XXXX to midpoint revenue our $X.XX year midpoint in we customers' billion Moving guidance in of information to of a greater reducing are a financial EPS. plans,

performance As to our correction we track it to unchanged. outlook record have Wabash in the that year, continued fee refine is our best our for industry. financial remember remains during the to is on important financial on achieve overarching

and on Finally, I'd touch year. capital allocation like for to quarter second both full the priorities

well constantly invest growth positive significantly in which to anticipate performance. we elevate free generating company's we we strategic financial the the flow cash Given are continue initiatives, to this will year, positioned Wabash's

of Additionally, the the what we our second taking compressed we quarter, during have a repurchases as viewed of pace advantage valuation. increased share

be We does to opportunistic cash to not align repurchases our seem market to potential our free valuation. agile, continue current reflected with as and continue most medium-term earnings flow the reality. remain expect the we to recent In generation operations making in long-term company's and fully adjusting even closing,

squarely for With That far well future. said, parts driven midpoint portfolio Wabash made of we portfolio Reflecting service by cyclical XXXX Wabash have of mile freight is outlook structural benefiting years is general set by from influences our of EPS the within and our our and and middle business, the focused building resilience falls performance significant improvements the our base conditions. peak less of $X.XX built the reiterate, we a first-to-final diversity positioned business. and XXXX. on to To the in beyond enhanced of financial equipment have within

to capitalize better been never period freight on positioned has of expansion. Wabash the next

that both We Mike for are I'll more our continuing achieving profitable. more over hand is outsized resilient his it and growth on focused progress With strategic comments. that, toward to

Mike Pettit

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

we sales operating Gross was X,XXX X,XXX shipped In new or sales. trailers quarter, came margin the EBITDA XX.X% generated X.X%. $XX at truck while and the adjusted during second During in we of the million of approximately XX.X% quarter, margin of bodies. quarter,

per revenue Finally, million Transportation income of or common share. income million. to $XX operating From $XXX net $XX a and stockholders attributable for million was perspective, quarter, generated Solutions the segment $X.XX of diluted

$XX.X by April Parts driven and of busier was June $X receivables a in reflecting outflow of million million. income operating generated in revenue and shipments and of May. relative to operating increase million, of Year-to-date, an an month services cash $XX

our million as in quarterly Regarding of $XXX with a our million. of shares balance June utilized X.Xx. of during was projects, to capital repurchase sheet, $X.X liquidity, $XX both dividends cash We paid million which borrowings, available and On allocation, XX. we $XX.X the QX leverage invested debt finished ratio and second quarter, million capital comprises net

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

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

buyback assessing account I the and to the our addition In our models plan between the valuation opportunity for just takes our factors company. value into by current the of internal mentioned, driven DCF our X-year GAAP market process

undervalued. feel X.X XXXX is buyback opportunity, when a just accelerated reduction which to year-to-date to a to valuation, versus activity of run and the X% view share based continue QX this shares we of bringing We repurchase on we'll count. over Brent compressed $XX in our or we've roughly million we the activity average buyback equates assess approximately million float company our mentioned, share continually As as our process significantly engage what to the

Moving the of a of billion billion on $X to of reducing with to $X.X EPS of midpoint and revenue a $X.XX. range $X.X billion an outlook to guidance $X.XX, range for XXXX. to $X.XX midpoint We're with

] half. to and market businesses stronger specifically within parts our services We stabilizing services and In in our as conditions move body into Thinking drive third vans. mention about relative back EPS year-on-year continue our between to particular, XXXX as to come XXXX. be quarter, A year, will implied those portfolio of [ to for financial million would in I'd see provide growth during and remain not into we second the are for $X.XX anticipate expectation yet truck is while positioned and performance extrapolating the territory forces we against parts to $X.XX. to $XXX $XXX and guidance our between caution and XXXX fourth like the million quarter in I next that for revenue and

gain fill more to to XXXX expect on align We to be large clarity our as better approaches. backlog conditions we our deal as with flex season cost market able structure

our Services also segment. and to accelerating and We are Parts see growth continued expecting in higher-margin

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

generating be service to also through invest program. our trailers in that We expect will immediately CapEx of a revenue

into comes on focus. somewhat forward the more markets, evolution the is guidance dependent the investment giving of freight look to this figure specific As as we'll

parts want I we're emphasize conclusion, a further our profile show valuation. improved been our through the company service to to with of that diversity the strategic along opportunity the enhancement working in our XXXX represents cycle adequately In reflected with exposure. improvement to We portfolio has believe in contemplated and the recent by to the our supplement have not further that plans financial significant that portfolio, driven equipment

We medium over the to are term. confident this repurchase will allocation that be activity prove capital share to savvy long year's of

the To generated expand $X.XX falls and of of years, the in XXXX. $X.XX previous XXXX Brent's and on expected XXXX in XXXX to XXXX adjusted our EPS between XXXX, comparisons with midpoint of peak $X.XX EPS

this XX,XXX XXXX team in new and anticipated in achieved range the the XX,XXX XXXX. low fundamental underscores for $XX,XXX improvements the trailer our across has in business. compared Additionally, XXXX believe shipments I to

than go has can reality recognize XXXX incrementally that out both market ways. gap initially turned So and forecast to important expected. between It's market weaker the

lower, to now next XXXX trailers and the specifically, EPS open EPS well body Service, believe back our business, Although and in industry continued broadly truck a generation. our market we as environments forecast more XXXX to Wabash growth it operator, generate make Furthermore, call up growth is the as XXXX. turn revised in the questions. I'll across year broad services for we'll early parts for view to and range With the too in been year-over-year we a it's call. for have of confidence situated floor

Operator

Instructions]. [Operator

our from For Shlisky first Mike D.A. Davidson. question,

Michael Shlisky

So -- that from let onetime quarter Transportation made question me margins. a about quarter of start pickups was first a I that sort a of know second. in Solutions bit the off some benefit kind weren't in the there there of the pushed with were

year? Or back the unusually be unusual the half without revenue for was cost. coming Are segment. of rest will there year of that just that that some see a you've you using normalized some So give movements maybe large was thought the in, kind do segment? good orders there us of about profitable any some year or back Can of lot half margins of the got you in during the more

Mike Pettit

We So yes, in QX. Mike, out to a pickup did see your pickups. little we called in point,

We expected that.

guide. lower of in So you're the be but it the was to guiding be that going in to see, second But it normalized, that going our half it large revenue will reduced then part we're because is to.

you look margin we're it project than the full calendarization, so necessitate and how half. our it the first in transportation but year a we if year, kind be forecast solution of QX, But will expect So would or QX. there's anomalies no normal lower one-off, it a at full to be lower in

Michael Shlisky

pricing. want just the a get And XXs mentioned Okay. I Mike, had kind number feel of you a low shipments the trailers for of I full of guess to year for

previous bit pricing it, look you like that back in half, of thought We could just kind were down little any a from the sort can what the of quarter but will on of You back the quarter. appreciated. in be into trailers might

Mike Pettit

staying We're down be the but pricing, prudent Yes. with second in it will half. Mike,

down but lot, from like it we're we're it'll whole position but pretty QX. we going QX in a going a sequential it's but to at And coming the to be that then see profitability pricing to freight -- from it's down, solid sequentially. you within it's cycle, the still be down level So for will feel step -- not some generate come QX, will down

Michael Shlisky

it. Got

of like this numbers how way, year is into as might and buying that upward maybe on if decent things ready a be service sound going fundamentals I'm but year how in and sized you to decent the trailer-as-a-service mentioned timing. on shippers comment You may great 'XX, might impact interested if out. timing does numbers share to launching they're you're play Could that in it's you like opposed any see also some next really number. turn be it it not sure kind new good if in of not to wondering whether

rather be of to customer larger freight think market about do maybe couple worried service later quarters, capacity than role big play road. permanent order you first down trailer in your And upturn as the in with there'll The ready Do for want they get and a a think you the a there's for the to temporary solution. landscape. it then might to any sooner

Brent Yeagy

Yes.

of the offering So the when we're positioning comes. excited about upturn the

carrier So with as place space a full we believe that enter broker do trailer a it could opposed be to the good as-a-service offering for a a to shipper or buys. into

happen, besides we exactly giving happens, feel We're have upturn. but is another are ready for our customers ready why not guidance, it excited be for we certain we're good will about less outright as that it really when offering buy. So we just which when does and being that the specific option to

Michael Shlisky

feel half any year. the onetime and ask year unusual I the in I for, first costs one Maybe of to don't in even squeeze the just the or your about rest in of last want To one. know,

margins As guidance. the I'm at that. and you look you're are, at what it's trailers, new just But midpoint in but probably admin investing the curious, documental like in some not costs trailers-as-a-service, and things software XX% the

were decremental normalized when parts if the You're and see And figured might got trailer what market. be structure also now of excluded? we your you've that bit as investing margin, in the well all do sales what margin an other more Kind areas. would think you cost that new a be the channel out incremental in also upturn do stuff

Mike Pettit

think is decremental. incremental it of Yes. good a as We to XX% like

happening are first think there's two the in half. that I things

good to we of some pricing a You there's some you some XX%. as to already higher production grow. always But get them. expect making decrementals costs. There we and the range on is output, puts be lower I and the really compression XX% which in say some we takes a mentioned, of those little would It's hit obviously than are But benefits start cost. some can incremental which

Operator

Vertical Research. next question comes with Kauffman Jeff from Your

Jeffrey Kauffman

Hey, very everybody. Thank terrific A much. you quarter.

look missed the kind kind deliveries thinking could out behind for look you XX%, don't I So where could so of I Mike, getting. kind the quick. you number Are range. thought guess, the XX%, we're repeat of it XX% of threw you you is message be? are year? the forward, do you deliveries Where in think

Brent Yeagy

that that's Yes, correct, XXs, in somewhere range.

Jeffrey Kauffman

Okay.

of trailer So a And Is we're ASP prices it Is a is expecting? coming different wide it that pretty it Or looks different type like a down? margin. mix? trailer are down.

Mike Pettit

down. coming mix. But price some always we see There's

tanks or above trailer versus versus also You can vans in LTL all bands, there's can long types, mix the types a you specs. of different that. to But between see see and the

Brent Yeagy

one Jeff, Yes, I is Brent. of think the -- this

the be of typically has is, And order in spec. of it's somewhat -- of a and a just the think on be the the the changes size the type a I by on this those indirect year, contributor and our typically, this market higher muted one market would nature channel spec ASPs given year, of that. customer can nature stronger a to equal

So And that begins pickup once fully. on a us turn more that on would the that's channel market turns too weighing and be back to ASP. natural

Jeffrey Kauffman

All right.

pressure. you XX,XXX feet truck from under P&Ls is got industry thought my So

hold So like trailer people right build now. would pools, to maybe on but that's

I'm okay, try XX%. down The right trucks my in your knows? EPA down the my So XX, trailers a orders term to XX-ish 'XX maybe of got now. cut You not hold are about that maybe and but in I'm trailers orders budget of kind 'XX terms 'XX, out to I are are on point, cannibalization to for short who the of for got more customers lot and there because capital. the trucks limited going saying, in and worried

this Or tourniquet into kind applying conversations is of think this order more and a that to relationship until think you 'XX versus up? we And normal Based how in with customers, the that 'XX a of ] half your on 'XX? customers 'XX? your are second more shape go XXXX? P&Ls of kind we do [ extends risk in early fall season pick indicating there's truck industry of back

Brent Yeagy

Yes.

impact there's a of Jeff. think there, lot I

just on plausibility of what's at some looking by just degree leveling continued We call is the is unit is could demand that there weakening. some orders forward. we to pre-buy, in focus think going it on I going on some somewhat kind that a but of call we 'XX know what tractors, tractor but that

[indiscernible]. even So

Mike Pettit

yesterday. We saw PACCAR with that

Brent Yeagy

Yes. Yes. Exactly.

So when will multiple XXXX. we of you're what think profiles into look demand the think 'XX of maybe, second somewhat regardless say across that or about safe all I think things we -- I how of all that, that pretty to half increasing it's at first integrating half

demand We Conversations will are a quantify first in initial not what not In It's stage time. started, point really where you can enough, and too be. at understand qualitatively gain this June... but at half conclusion can it sum a we even that early. have up

Jeffrey Kauffman

customers we as I don't speak. revising mean, your busy I budgets even think know. they're

yes. So

Brent Yeagy

days XX% to be way, That's would kind We're would January that towards first away guidance the higher having a it it And XX I momentum, July -- June, it to off turn, shape any in right that at right specificity. to somewhere over market on looking or a now. from start that's a than swing see holding why probably now. could right we're work within good. what X% begin the be half. course form you up the would but we'll in right And say XX, time as those really now. even basically begins be little If not we're the we're that's of just conversations and I call if That calling you that frame. how and of climb would I'm and catches now. some

Jeffrey Kauffman

Okay.

customers of this don't then right? So now. what's really But think knows worst going right based Who what's on going? you're or in sitting, who getting expect know next your and as on where we relationship early 'XX. of a knows? of year. the And more to even half you the would pool be I back this maybe to probably into normal capital get split the year second then mitigating

Brent Yeagy

of we see. we cycle. curve as sitting get on into moving a to I would would would that's today materially back 'XX, we general Yes. the here we what demand into the say that Yes, upward be begin expect upswing

Jeffrey Kauffman

argue Okay. If 'XX per question. look profit at higher now? back inflation, of level to 'XX look ways a And a previously, normalized, than at more cost pretty I years. but good something out then of were we're like right trailer, level you of different probably because though final we we lot even something to there's that, would were at but kind and we're normalizing getting

Brent Yeagy

Yes.

impact think a the relief change at internally -- plus itself trailer Wabash, that inflation And going then a we'll I per that on having it the in positive would of has we field add skewed again, what I not safe there's profit us call we also profit need what of going given or inflation And that's point case, that think per unit profitability forward. on, has seeing assumption. a to we're we're I absolutely, Even now. standpoint. evaluate think base I right what's that inside

we're from. to I'm years. course on for a see X the the to looking still the where We're the of word we're position -- to good of depending cycle that starting X, continue the going part going over But long that next upswing how X, profitability is. resetting of some be over what's climb to in think I market

jumping good -- point off is where the a punchline. So

Mike Pettit

That's true, all Jeff.

there The is is is that breadth in positive a the the of that thing portfolio. other

than was to 'XX. higher are solutions specifically there 'XX, looking it prior transportation So truck That's in bodies and profitability. at

helpful tailwind. sustainable that's believe, So we a

Operator

marks. Q&A I the back will for our over closing now Reed Ryan concludes conference turn session. That to

Ryan Reed

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

Wabash National (WNC) 24 Jul 242024 Q2 Earnings call transcript