WNC - Earnings call transcript Q3 2024 | Wabash National Corporation

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Operator

Thank you for standing by. My name is Jeanie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Wabash Third Quarter 2024 Earnings Call. [Operator Instructions]

I would now like to turn the conference over to Ryan Reed.

begin. may You

Ryan Reed

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

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

I'll now to off hand it Brent.

Brent Yeagy

Thanks, Ryan. joining for you everyone, Good and thank us. afternoon,

expectations. Let's our start line third that out quarter prior adjusted level largely financial by setting results our in with

the the our of to get and on updates strategic we I'd some continuing how quarter, we the Before address to unfold. provide into see like growth path details

trends serving longer clear that especially some rationale van well. cyclicality happening XXXX crisis logistics become a after our the were financial and mega industrial step within few we change the becoming reflect and of was we've CEO, set company transportation, want of was the to of and Wabash highlighting where current on the reached to address more I When headed. diversified of most no while fundamental journey the back found, role it our core our how our last to the position the us distribution. behind dry the trajectory strategy challenges of markets of and I promising stage, see of performance To assumed growth years the

capitalized core complement with greater line an created for value van but fully Expanding our on relationships We need to product that closer potential. refocus equipment dry customers, The haven't deeper portfolio opportunity we and to our home. we our can pandemic more the definition a expand from strategy where an to customer-centric be value a product-centric could a model restructure and both organization created. of go-to-market how to our latter one, opportunity quickly provided with shifting to the

also multiple we a equipment us to to shift value By customers, into deeper contract, future business products has further and we foster types what streamlining were us and for we commercial point the gave their beyond our single insight needs problems provide plan innovation. to significant time. us through for enabling It make closer access and the solutions at jointly our the customers. brought This created the

with position gives a resilient strategically Suppliers revenue our solutions We for business allowing the willingness conducted, enhance of next greater combining us total manner relationship more provide aligning which Wabash's supply of resilient efforts a are even the quo chain as improve us, to serve deeper and recognize status set are customer engage reason to industry the and of to to customers, to can up collectively value strengths to be benefits The more the now able our responsiveness within our more transportation customer. industry to portfolio streams. particularly with cycle.

capacity key manufacturing this a reimagined also Our in will asset be regard.

will area responsiveness as previous One compared focus upturns. cyclic to of allow improved resiliency Our initiative. major our us been and increased service and has outperform parts strategic to

higher demand in now previous balancing diversification. for growing is drive opportunity that the core recognize revenue our to overlooked this years, simple for transportation element this business of equipment. For was We recurring a margin, nature

our equipment. a but in as critical potential about not the parts maximize the it's life services, cycle mechanism to and revenue of excited a just support We're driver,

enhanced customer the relationships. core this to growth through continue excited increasingly are journey drive we aspects are uncovering of and about needs We unmet our

efficient dealer instrumental The network HDI rapidly access capabilities, with in with Fernweh broad established distribution to HDI Wabash Our Parts a partnerships our of Group customers aftermarket extensive [ parts. venture ]and are joint providing growth. this and portfolio fleet with

Meanwhile, our our through our the the dealers manner engaging the experience engaging differently digital our capability the and our the Wink the providing and us and how enhancing with provide Fernweh of ways. suppliers is in vast customers provided ability and different capabilities, Group solutions the JV to brand logistics we Wabash and solutions customers which the within landscape. revolutionize to transportation we problems

and the capabilities of of for company. next profitable the for growth scale positioned this have where We well increase development the company chapter will continued the investment

to formerly growth, key internal organizational recognizing align will the to To mission scale and and be live our and thought Mike these we overseeing achievements CFO how reaches changing now manner focus parts him of fully parts focus, accelerate of Collectively, both you to and as the our for of Officer, we Growth needed the scale. and from bring further refine service our day-to-day services, engineering. will that Pettit, serve been leveraged a world at on his digital free Chief areas has CFO changes. some to enablement leader to made Mike in catalyst a our purpose business to responsibilities the

Mike update call yours, the as over Growth Officer. first turn to for Mike? me his all Chief Let It's

Unknown Executive

Brent. Thanks,

provides to Before enjoy growth while through my to organization. I more genuinely diving like about excited mention my position the new CFO, I'm and that focus the consistently in, time I'd as it drive

ecosystem emerging ways, distribution of leveraging is Wabash the logistics transportation, is the shifts navigate industries On opportunities. and the growth, leading and One topic to our by of within seize

alone. partnerships carriers, crossroads market As. A and a with unique single providers. in tackle dealers, no brand site These transportation complex shippers technology could challenges suppliers, and us leader to cloud Wabash allow equipment, solve entity

transforming hosted process, in partners together over While our really bringing together. of of broader ecosystem Conference, to we're Night challenges once our was gathering XXX a supply collaborative second attendees. demonstrates ecosystem solving our what This still as a commitment this October, chain at at gathering key capable into we viewed early in basic

proof already are of to points I'd There couple a like highlight.

demand. like producer. coils This North [ and with [indiscernible] to strengthens meet agreement Steel agreement supply customer to excellence. priority needs, face high ] position members of steel cross operational lines adds recently leader XX-year chain, Dynamics, Wabash American constraints. during critical First, with signed help will a a we This This supply a ensuring Steel in as with when during times Dynamics strategic other our and may us periods even steel reliability components leading supply manufacturers access similar

Secondly, in our Trailers as is a partnership Service Kodiak, autonomous significant technology forward. a truck with step leader another

reliable create program provides support. Kodiak Wabash managed that Our repair of is a This via access handles managed developing together capabilities offering focused brings care acting autonomous subscription while and and logistics a growing partner maintenance, to lot trailer fleet Wabash unique network TaaS for parties. an a connective utilization, Wabash tissue This and with uptime service care management on dealer and maintenance Kodiak technology a by flexible all solution, our a technology, supplemented services. with a care includes trailers value to as of through managed

are is and partnerships, getting we by excited Our these team just started.

for the be We and in position look ecosystem. to transformative of to Wabash laying the that for XXXX distribution years create been our next logistics have as growth for will couple we prove by foundation opportunities in transportation, to the we and leveraging believe forward these continuing

over With Brent. to that, call hand I'll back the

Brent Yeagy

we and of Mike. strategic this his and are Many call following. Wabash Mike Thanks, direction passionate know you on the to

him forward role. in to to this have strategic seeing We look our like new drive we a are him growth leader and drive lucky to forward,

Wabash progressed positions excited most for the leadership roles, the we move XX and as recently he know joined Pat through several equally [ of to that with as Wabash directly I to I and spending chapter Finance. company. Honeywell at have directly goals. with XXXX, and CFO into next what he need joined has duties in in work worked strategic and Pat take ] this I'm various Kaplan we achieve I since has our Mike Pat VP After of years as finance

our quarter, Moving significant see to and financial impact on you'll verdict. XXXX due September results between a jury our the to of non-GAAP GAAP a third divergence

involved the As XXXX vehicle in in million we've a damages passenger with unobstructed for trailer. previously with and punitive speed at a nearly stopped struck back accident. view of compensatory This incident jury liable motor in a found shared, Wabash $XXX XXXX million Louis a traveling $XX a an that damages vehicle connection St. high Wabash

be related despite verdict the contrary, to the drivers legal at and the While the prevented critical are evidence law. supported hole this the we women Among things, abnormally precedent over the court judgment hearing from final charge and passenger kept the case, nor driver, not proceedings a the time There the during or also booked the seatbelt, of was the product, the is the firms, a level jury. was damages high are was was believe wearing accident and jury enters we meantime, other from to be blood post will the including we accounting judgment before quarter purpose the in our evaluating at a for legal by the in legal insurance with noncash the options. of the facts we'll external all and counsel, but appeal available closely the working and

will appropriate. as share We to continue updates

we behind stand do stop contribute challenge [indiscernible]. from of the this safety to and continuing to quality what firmly us innovative continues products, and to and can create to products not ourselves Wabash our to will new

QX. end to end to at Turning $X bookings financial totaled about outlook. and of billion just our third $X.X the of at the compares billion. backlog Total This quarter over the

XXXX, to into stages of orders As anticipate new we and QX season of XXXX. QX we early the of in to the and pushing seasonality have expected, the deal dry normal in van large is latter flow increase

to feel in medium-term optimizing we to and picture facility in labor for structure van now what dry the for current With for XXXX capacity to to we ensure a adjust developed, that's be expect Vans fully we prudent our are ] improvement. [ our order be yet

are we incrementally positive areas such truck the to as a In XXXX. increasing for bodies, thoughtfully prepare

service have offerings to this we broader and of enter business. key and set year and to continue march area continue the our as we levels streams of parts in Our and growth will add both the new higher capability deeper into of revenue a

and dry now, $X.XX. our to capacity our an For demand year that lower revenue $X.XX rebalancing QX approximately full necessitates outlook billion roughly and we the of EPS van to

QX it's expectations We do I While quantify XXXX of on XXXX. to look our believe EPS to XXXX, our exceed call. for can that early more providing performance detail forward too

our competitive we focus in to remain as noncash, with returns to in generate service Finally, initiatives forward. priorities quarter we potential that growth and a via allocation capital growth. is was third touch funding on strategic on we to evaluating between move continue to the legal dividend significant the well compared set, parts expect I'd peer M&A. We and charge with invest repurchases reiterating company's believe positioned the our we current like can

current we the align future reality, closing, we're by power. with market optimizing believe In operations our adjusting to our earnings

believe and we positioned and further throughout have made changes side complement our increase parts revenue our which services of Wabash's the our grow customer creation, company and proposition significant our portfolio is streams, to shareholders. solutions to customers the to well We value performance to transportation financial company value will enhance the to

Our accelerate and ecosystem to showing to and value structure organizational future. create the our we focus company's new is designed build approach collective signs grow of how is early success on

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

Unknown Executive

step and excited everyone. of I'm here good to and been role into the has Brent, accomplishments. on Mike afternoon, Thanks, his forward to to excellent mentor I look building be and an honored

continue we to industries. and solutions connected distribution Wabash leader for visionary in logistics transforming stakeholders. all with work transportation, our a the As eager I'm into

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

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

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

to to the did quarterly verdict. the St be forward we made QX EPS our an in million outlook or we recurring of $X.XX incur on did higher-than-expected short find may like for However, the move We non-GAAP $X.X with mention matter. legal while Adjusted acceptable not Louis legal they the to I'd generation was connection EPS adjustments as expense include resolution for of slightly costs of quarter range that prior these

Moving and generation operating on and working of $XX to being generated helpful revenue to million reporting $X.X $XX generated cash cash. and sequential Solutions million capital Parts million. $XXX revenue income QX operating our of of income incrementally $XX operating million. million was in segments. services Year-to-date with trends Transportation operating of

which liquidity, our as XX. ratio borrowings, sheet, balance available our $XXX with Regarding net and finished both million We September cash of debt comprises QX of was leverage X.Xx.

our invested million CapEx, shares to during dividends assets to paid of allocation, directed third Trailers utilized million. in capital we $X.X $XX.X via On revenue-generating traditional as a the $X.X $XX quarterly initiative, and repurchase quarter, million million Service

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

As to and dividend will Brent mentioned, are M&A. evaluate of committed our opportunities we bolt-on maintaining repurchase share for continue we to alongside

for guidance our to on XXXX. Moving

prior We our stemming million billion from from jury verdict. our legal some roughly $X.XX of The are G&A as of most in outlook and reducing rates $X.XX $XXX as our EPS outlook loading approximately represents EPS. come in the revenue team line address previous expenses significant to well level revenue works midpoint, reduced aforementioned increase $X.XX. to from From of related a step-up and to changes reduction this as revenue to

$XXX million $XXX EPS. Our implies updated positive million and guidance of quarter modestly QX revenue fourth to

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

We continue a that also in service level will program. modest expect of a to investment immediately with trailers our as generating CapEx through revenue be

expect have call, QX stronger to that XXXX to continue our adjusted we more believe performance to opportunity relative we of in have generate financial we complete and While XXXX XXXX. by picture a to

trailer EPS As our from and XXXX. that van and XXXX businesses, market [ performance and achieved adjusted can ] we and truck the of tank body dry improving parts we services trough eclipse believe

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

Operator

with Research. Kauffman from [Operator of the Jeff your line first question Vertical Instructions] comes And

Jeffrey Kauffman

her a market's are the commitments tough environment. a of to kind harder just I are year. know ] purchasing holding down know truck to about on in they're now [ take XX because bigger because We that's little fleets trucks the out industry the picture, that of. getting a want and slowing on in We right Congratulations pressure P&L for trailers the PA nervous there.

parts seeing are truckload customers What XX XX base XXXX, What earnings reduce well companies may lot despite pressure 'XX% in told a are about we you below intentions? forecast the 'XX? so intentions And of just As customers than the of 'XX 'XX. about their for parts pretty are your customer greatest customer are in their the you we versus environment? versus saying, the heard your in holding talk your I've hey, of your far research less what base actually to spend than calls have

Brent Yeagy

up Complicated Jeff. past, answer. regardless Thanks, the varied be I enabled that question, relative has The would of is to way Yes. answers would it to complicated amongst the more it In customers. explain much make today that give very discrete our customers segment. segments it

LTL. there while use -- So I

have is environment we there of gave they are players, relative robust some level While players that LTL the in volume for LTL holding XXXX. the that

We to the do. time other going least have signaling is that what the market on to being customers at the waiting figure are sidelines at out

how about throughout year would warrants. market the are the if that conversations add And some having we they units have additional

the it's the landscape. load would And a it's just there. say similar I is very truck varied in So LTL,

We were players That first medium-sized FTR's in in the has have and quarter not same position really of changed, they which goes are XXXX. the numbers. still all and into second ATT revised and small that

they have application larger where waiting what get some is it isn't. It And some do it a their again, their decision-making are purposeful cycle. in on that and customer clarity a purchasing what replacement to a by behind of sidelines cycle, maintaining have more that level are in is of past. broad market or There pushing rigid are brush they why independent again, right players decision, there want off to are, either, they not see very or the now, is holding we not process to which assign more the the

Jeffrey Kauffman

this about a If I XXX,XXX who company year. for different can think side, is in units out the this the depending forecast more you way, to, from I talk year, come on

the If accounts dip then kind in that to rate basis, months way forecast on may or winter unit the for to you for you a all production summer How maybe back down the the kind where years look ago, changed a XXX,XXX moving have XXX the volatility? having and months. model over kind with you be of quarterly XXX we of the operating couple of of volume pricing -- do a margins at manage annualized past? switch made with that And thinking that then should differently they than about in

Brent Yeagy

That's a answer. multipart

then part, I'll chime on the in. first start Yes. others me and let Let

First pricing we off, experiencing go van further than world are are with backlog XXXX. a the I'll what -- will for pricing from you have standpoint, question now from a the asked, round just for ACT we dry in we're feel maybe I that think for of FTR the the -- XXXX the XXXX, that is ballpark the we a right is absolutely to our out little indicative out we pricing experienced that how start estimates

we like that probably So of. we relatively clear off can point a the bridge off can of that's data and feel bridge Street

a From nature, we've doing been XX-plus this years. Jeff, for dynamic

in the what in dynamics, isn't past. bad experienced of the world So as this we've as

But right than our level managing within take the profile right alluded with size moves how you well a us. ever advantage gave of create months. capability obviously with that the dynamic call now are market that it, it on next we have. X over a to to we of guidance whatever with do to the an manage eye to better better, reductions net capacity gives that margin preserve we revised today capability. we're So making and the we

So that's qualitative what a I narrative from would standpoint. say

other any color? Pat, to And I'll look

Unknown Executive

operating pricing we're To right seen we've in your expect Yes. into at levels answer about what to past. it now now. flow relative the hit XXXX. that question Brent to specifically we margins where the with the

past able would time a it's an see expect been there So what to we've do improvement trough to we pricing. with given

Jeff. answers that So hopefully, your question,

Brent Yeagy

I Yes. would body integrate position of you where add we business. with sit to really that is have truck And what our improved the in

health is better set trough compared we've to streams service the in additional history. we starting point than have a top tough diverse our A the perspective time performance. what parts during a the a any to in of at van add more of revenue the and You dry from had of that's on had position this ever in

Jeffrey Kauffman

to congratulate Hoosier All want anything. an capable just right. I for It you we're of shows your And CFO. you as Indiana hiring

Operator

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

Michael Shlisky

just Maybe thought -- answer on last on that the gave. a you follow-up that

your processes If change? you've old? mix a the flat XXXX? for the mix what got volumes side, and have just year there as learnings are that a down on facility, your new Now ramped margin between little up trailer for a is next producing your that And together? you've and you've there bit there change been that's new kind the positive your of you're any and tailwind does gotten Is open does you as year

Brent Yeagy

Again, ability industry that in to that call the say relative it, complicated first I of demand Wabash better I a position flat levels we has from The all, being generate 'XX the would XXXX, relative 'XX. -- with, market. even to question the to of would in say,

type your most look got. how we you tend of absolute -- limiting The we we in with and -- assets that your just mix level to has to capitalize that, on pricing will we believe by mix we that volume on you we get the environment. as can of will effectively or that this utilize do effect a so And that look

full we per get but at impact we of full should it it expect XXXX. level volume And necessarily a up running a the to running. positive would will not and by throughout get ship be having capital, So the new of effect

build so see but helpful. outstrip environment, to at demand most year full we where trying strip, to should outperform then looking And that. actively tailor of now or we to It fit as we'll working kind demand a effectively we that the it. we can And and contribution of specifically are be not are looked

Michael Shlisky

Okay.

that see if Okay. and on And I please asked a made. I later service just Makes business, late, the talk the and it. talking parts are bit having next you about asks hopped questions was you've surprised with little that One a sense. substantial growth X given you little didn't business. to the in bit answered, on efforts

fruits think, that but confident like I few sluggish and out months. the the would quarters? seeing feel you you'll we're a broadly, to just there see effect just next market of whether growth kind rolled efforts, your You I over guess for few new efforts your portal, the the of bearing last some is feel over all I are

Brent Yeagy

Yes.

are right, us going relative position performance, we immune still our 'XX. into not in call, tough that come think that what online we've just the at that, XX% that have to there place, when that. On months has moment the the fact that in very few we're plus and we coming but to debt, we alluded in relative aspect elements the -- this online scripted and the what I It's where the of sluggish would confident online last after a will is grew really The were. put coming foundational a be out get nothing we not month market about next great debt, say to

and a more are parts than resilient But And like circle most our services are in that's market And our characteristics numbers. of revenue not this. they immune of think I demand streams. showing absolutely from

buying and just it decisions the are decisions will to the to figure one that, not in maybe XXXX. next, tailwind buying So trying as stability having complete worse. compared quarter optimal. with is to that's going get out. a in proving And That better customers and makes for provide to or XXXX market, out delayed When

of help parts Just business. our stability level the regardless service will and

Unknown Executive

sell to, too, component for we're there's in, and different remember, and in some streams into some parts services do from it's farm growth of but you think OE alluded space roll a that important up nice I seeing lot we hat. progress revenue the Mike, lot Yes, what A to of

where see much as You initiative base our the in release, our see the some parts in that than mentioned, of can actually weakness resilient press in those more Brent some business. you itself is

You of stability freight it the this within overall can providing it thought year. does would. we're a still landscape see that we that the But operate lot

Brent Yeagy

Yes.

retail guess, and pretty of are with. terms consumed, I the provide be in demand. directly parts the to even rest which our OEM to service, side we happy our of So I'd that same are What more of the directly components specific directly place related in part They're business is in.

Michael Shlisky

trailer Kind max more Got question. other Okay. next even my of the also, that Also, see is for I'm it. forecast me an there drive what appreciate maybe be be the have chance us knows and that it. van business. It your some reductions the good earnings? but to still Got can to in down it. end like who growth up maybe a growth to ballpark have the can the just There'll to be last there's we if you hear I tremendous Wabash you flat direction, additional commentary But could year, broader use in amount could no also auto been a come. market year for downward. curious, or step in earnings dry there's maybe

Brent Yeagy

right give I that for expect that unit that to integrate answering I absolutely right not room van to hesitant to lot said we dry that I'm be from in factors a now. there's in we as in specific that, see not going of but that our -- of sure now ability would do here count. for would offset guidance. would beyond would to there's growth services, I I necessarily see would parts and expect occur, I to type to bottom think growth question that be truck a so do say

Operator

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

Ryan Reed

Thank look to and thanks, up much, you today. forward following joining for everyone, us quarter. during the very We

Operator

That you for concludes today's call. joining. Thank

You may now disconnect.

Wabash National (WNC) 24 Oct 242024 Q3 Earnings call transcript