Wabash National(WNC) - 2025 Q2 - Quarterly Results

Executive Summary This section provides an overview of Wabash's second quarter 2025 financial performance, full-year outlook, and management's strategic commentary Second Quarter 2025 Financial Highlights Wabash reported a 16.7% decrease in Q2 2025 net sales to $458.8 million, resulting in a GAAP operating loss of $4.8 million and diluted EPS of $(0.23) Q2 Financial Performance (Millions) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (%) | | :-------------------------------- | :------------------- | :------------------- | :--------- | | Net Sales | $458.8 | $550.6 | -16.7% | | Consolidated Gross Profit | $41.4 | $89.7 | -53.9% | | Gross Profit (% of Sales) | 9.0% | 16.3% | -7.3 pp | | GAAP Operating (Loss) Income | $(4.8) | $43.8 | -110.9% | | Non-GAAP Adjusted Operating (Loss) Income | $(0.1) | N/A | N/A | | GAAP Diluted EPS | $(0.23) | $0.64 | -135.9% | | Non-GAAP Adjusted Diluted EPS | $(0.15) | N/A | N/A | - The GAAP operating loss of $4.8 million includes a $5 million loss related to an appeal bond and contingent interest expense from a legal verdict[3][5] Full-Year 2025 Outlook Wabash has reduced its full-year 2025 revenue outlook to approximately $1.6 billion and its Non-GAAP adjusted EPS guidance to a range of $(1.30) to $(1.00), reflecting ongoing market challenges Full-Year 2025 Outlook | Metric | Previous Outlook | Revised Outlook | | :-------------------------- | :--------------- | :-------------- | | Full-Year 2025 Revenue | N/A | ~$1.6 billion | | Full-Year 2025 Non-GAAP Adjusted EPS | N/A | $(1.30) to $(1.00) | | Total Backlog (as of June 30, 2025) | N/A | ~$1.0 billion | - The total backlog as of June 30, 2025, was approximately $1.0 billion, as customers maintain a cautious approach to capital spending[4][5] Management Commentary Management noted muted trailer industry demand, revised 2025 shipment forecasts downward, and expects near free cash flow breakeven, with cautious optimism for 2026 growth - Demand remains muted across the trailer industry, with 2025 shipment volumes expected to fall well below basic replacement demand[6] - The company expects to be near free cash flow breakeven for 2025, excluding capital investments in Trailers as a Service[6] - Wabash is cautiously optimistic for a return to growth in 2026, based on early customer discussions and current industry forecasts[6] Business Segment Performance The company's segments showed divergent performance, with Transportation Solutions declining significantly while Parts & Services achieved positive growth Transportation Solutions The Transportation Solutions segment experienced a significant decline in Q2 2025, with net sales decreasing by 19.7% year-over-year to $400.2 million and operating income turning into a loss of $12.5 million Transportation Solutions Financials (Thousands) | Metric | Q2 2025 (Thousands) | Q2 2024 (Thousands) | Change (%) | | :-------------------------- | :------------------ | :------------------ | :--------- | | Net Sales | $400,214 | $498,705 | -19.7% | | Gross Profit | $28,600 | $74,689 | -61.7% | | Gross Profit Margin | 7.1% | 15.0% | -7.9 pp | | Income from Operations | $12,518 | $56,918 | -78.0% | | Income from Operations Margin | 3.1% | 11.4% | -8.3 pp | Transportation Solutions Units Shipped | Units Shipped | Q2 2025 | Q2 2024 | Change (%) | | :-------------- | :------ | :------ | :--------- | | Trailers | 8,640 | 9,245 | -6.6% | | Truck bodies | 3,190 | 3,925 | -18.8% | Parts & Services The Parts & Services segment showed positive growth in Q2 2025, with net sales increasing by 8.8% year-over-year to $59.7 million and maintaining a strong operating income margin of 15.2% Parts & Services Financials (Thousands) | Metric | Q2 2025 (Thousands) | Q2 2024 (Thousands) | Change (%) | | :-------------------------- | :------------------ | :------------------ | :--------- | | Net Sales | $59,744 | $54,901 | +8.8% | | Gross Profit | $12,800 | $14,969 | -14.5% | | Gross Profit Margin | 21.4% | 27.3% | -5.9 pp | | Income from Operations | $9,060 | $12,087 | -25.0% | | Income from Operations Margin | 15.2% | 22.0% | -6.8 pp | Non-GAAP Financial Measures This section defines and explains the utility of various non-GAAP financial measures used by management to assess core operational performance Adjusted Operating (Loss) Income Adjusted operating (loss) income is a non-GAAP measure that excludes certain costs and expenses, such as those related to the Missouri legal matter, to provide a clearer view of the company's core operating results and trends - Adjusted operating (loss) income excludes costs, expenses, and other charges not considered indicative of core operating results, aiding in evaluating performance and trends[11] Adjusted EBITDA Adjusted EBITDA is a non-GAAP measure that adds back interest, taxes, depreciation, amortization, stock-based compensation, and other specific non-operating items to net (loss) income, offering insights into the company's operational performance - Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortization, stock-based compensation, the Missouri legal matter, impairment and other, net, and other non-operating income and expense[12] - Management believes Adjusted EBITDA helps investors understand the Company's performance by excluding items not directly related to core operations[12] Adjusted Net (Loss) Income and Diluted EPS Adjusted net (loss) income attributable to common stockholders and adjusted diluted (loss) earnings per share are non-GAAP measures that account for the Missouri legal matter and its related tax effects, facilitating period-to-period comparisons - These adjusted measures reflect an adjustment for the Missouri legal matter and its related tax effect[13] - Management uses these adjusted figures to provide a better understanding of the Company's performance compared to prior periods[13] Free Cash Flow Free cash flow is a non-GAAP measure calculated as net cash from operating activities minus capital expenditures and expenditures for revenue-generating assets, providing insight into the company's cash generation capabilities - Free cash flow is defined as net cash (used in) provided by operating activities minus cash payments for capital expenditures minus expenditures for revenue generating assets[14] - This measure helps investors understand the Company's cash generation performance period-to-period[14] Adjusted Segment EBITDA and Margin Adjusted segment EBITDA and Margin are non-GAAP measures that add back depreciation and amortization to segment operating income, providing insights into segment-specific performance and trends - Adjusted segment EBITDA is calculated by adding back segment depreciation and amortization expense to segment operating income, excluding certain non-core costs[15] - Adjusted segment EBITDA Margin is calculated by dividing Adjusted segment EBITDA by segment total net sales[15] Company Information This section provides details on the Q2 2025 conference call, an overview of Wabash's business, and a safe harbor statement regarding forward-looking information Second Quarter 2025 Conference Call Wabash held its quarterly investor conference call on July 25, 2025, at 12:00 p.m. EDT, with access available via the company's website and a dedicated dial-in number - The conference call was held on Friday, July 25, 2025, at 12:00 p.m. EDT[17] - Access to the call and accompanying slide presentation was available on the 'Investors' section of www.onewabash.com, or by dialing (800) 715-9871 with conference ID 9986205[17] About Wabash Wabash (NYSE: WNC) is a leader in connected solutions for the transportation, logistics, and distribution industries, headquartered in Lafayette, Indiana - Wabash is a visionary leader of connected solutions for the transportation, logistics, and distribution industries[18] - The company's product range includes dry freight and refrigerated trailers, flatbed trailers, tank trailers, dry and refrigerated truck bodies, structural composite panels, trailer aerodynamic solutions, and specialty food grade processing equipment[18] Safe Harbor Statement This section outlines the forward-looking nature of certain statements in the press release, emphasizing that actual results may differ materially due to various risks and uncertainties - The press release contains forward-looking statements regarding outlook for shipments, backlog, demand, profitability, cash flow, and strategic plans[19] - Actual results could differ materially due to risks such as the Missouri product liability action, the cyclical nature of the business, uncertain economic conditions, increased competition, and raw material shortages[19] Consolidated Financial Statements This section presents the company's condensed consolidated balance sheets, statements of operations, and statements of cash flows for relevant periods Condensed Consolidated Balance Sheets As of June 30, 2025, Wabash reported total assets of $1,376.0 million, a decrease from $1,411.5 million at December 31, 2024, with total stockholders' equity increasing significantly Condensed Consolidated Balance Sheets (Thousands) | Metric (Thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :---------------- | | Total Current Assets | $623,921 | $594,488 | | Total Assets | $1,376,034 | $1,411,529 | | Total Current Liabilities | $372,391 | $308,409 | | Total Liabilities | $989,580 | $1,221,703 | | Total Wabash National Corporation Stockholders' Equity | $385,217 | $188,830 | - Cash and cash equivalents decreased from $115.5 million at year-end 2024 to $57.4 million by Q2 2025[22] - Retained earnings increased substantially from $105.6 million to $320.3 million[22] Condensed Consolidated Statements of Operations For Q2 2025, Wabash reported a net loss of $9.6 million, a significant decline from a net income of $29.2 million in Q2 2024, influenced by decreased net sales and a GAAP operating loss Condensed Consolidated Statements of Operations (Thousands) | Metric (Thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Sales | $458,816 | $550,610 | $839,706 | $1,065,886 | | Gross Profit | $41,400 | $89,658 | $60,403 | $166,104 | | (Loss) Income from Operations | $(4,751) | $43,763 | $309,800 | $73,338 | | Net (Loss) Income | $(9,603) | $29,204 | $221,593 | $47,491 | | Diluted EPS | $(0.23) | $0.64 | $5.21 | $1.03 | - General and administrative expenses for the six months ended June 30, 2025, show a significant negative value of $(267,676) thousand, which likely includes a large gain or reversal related to the Missouri legal matter, impacting the income from operations[24][32][34] Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, net cash used in operating activities increased to $16.1 million, while net cash used in investing activities also rose, and financing activities provided cash Condensed Consolidated Statements of Cash Flows (Thousands) | Metric (Thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net Cash Used in Operating Activities | $(16,106) | $(6,388) | | Net Cash Used in Investing Activities | $(47,786) | $(43,388) | | Net Cash Provided by (Used in) Financing Activities | $5,831 | $(52,210) | | Net Decrease in Cash and Cash Equivalents | $(58,061) | $(101,986) | | Cash and Cash Equivalents at End of Period | $57,423 | $77,285 | - Expenditures for revenue generating assets amounted to $20.9 million in the first six months of 2025, compared to none in the same period of 2024[26] - Stock repurchases decreased to $26.9 million in 2025 from $43.8 million in 2024[26] Segment and Non-GAAP Reconciliations This section provides detailed GAAP segment information and reconciliations of various non-GAAP financial measures to their most directly comparable GAAP equivalents Segment and Related Information (GAAP) This section provides detailed GAAP financial results for the Transportation Solutions and Parts & Services segments, including net sales by product type, gross profit, and income from operations Three Months Ended June 30, 2025 (Thousands) | Segment | New Trailers Sales | Equipment and Other Sales | Total Net External Sales | Gross Profit | Income (Loss) from Operations | | :---------------------- | :----------------- | :------------------------ | :----------------------- | :----------- | :---------------------------- | | Transportation Solutions | $312,931 | $87,283 | $400,214 | $28,600 | $12,518 | | Parts & Services | — | $25,869 | $59,744 | $12,800 | $9,060 | Six Months Ended June 30, 2025 (Thousands) | Segment | New Trailers Sales | Equipment and Other Sales | Total Net External Sales | Gross Profit | Income from Operations | | :---------------------- | :----------------- | :------------------------ | :----------------------- | :----------- | :--------------------- | | Transportation Solutions | $563,976 | $183,041 | $747,017 | $37,014 | $2,720 | | Parts & Services | — | $44,822 | $111,699 | $23,389 | $15,970 | Units Shipped - Three Months Ended June 30 | Type | 2025 | 2024 | | :--------- | :--- | :--- | | New trailers | 8,640 | 9,245 | | New truck bodies | 3,190 | 3,925 | | Used trailers | 30 | 20 | Units Shipped - Six Months Ended June 30 | Type | 2025 | 2024 | | :--------- | :--- | :--- | | New trailers | 14,930 | 17,745 | | New truck bodies | 6,190 | 7,615 | | Used trailers | 65 | 35 | Reconciliation of Adjusted Operating (Loss) Income This reconciliation details the adjustments made to GAAP operating income to arrive at adjusted operating (loss) income, primarily highlighting the impact of the Missouri legal matter Three Months Ended June 30 (Thousands) | Segment | Income from Operations | Adjustments (Missouri legal matter) | Adjusted Operating (Loss) Income | | :---------------------- | :--------------------- | :---------------------------------- | :------------------------------- | | Transportation Solutions | $12,518 | — | $12,518 | | Parts & Services | $9,060 | — | $9,060 | | Corporate | $(26,329) | $4,613 | $(21,716) | | Consolidated | $(4,751) | $4,613 | $(138) | Six Months Ended June 30 (Thousands) | Segment | Income from Operations | Adjustments (Missouri legal matter) | Adjusted Operating (Loss) Income | | :---------------------- | :--------------------- | :---------------------------------- | :------------------------------- | | Transportation Solutions | $2,720 | — | $2,720 | | Parts & Services | $15,970 | — | $15,970 | | Corporate | $291,110 | $(337,387) | $(46,277) | | Consolidated | $309,800 | $(337,387) | $(27,587) | - The Missouri legal matter adjustment significantly impacted corporate and consolidated operating results, particularly for the six months ended June 30, 2025, where it was a $(337,387) thousand adjustment[32] Reconciliation of Adjusted EBITDA This reconciliation provides the calculation of Adjusted EBITDA by adding back various non-cash and non-operating expenses, including the Missouri legal matter, to net (loss) income Three Months Ended June 30 (Thousands) | Metric | 2025 | 2024 | | :-------------------------- | :----- | :----- | | Net (Loss) Income | $(9,603) | $29,204 | | Income Tax (Benefit) Expense | $(2,692) | $9,768 | | Interest Expense | $5,308 | $4,948 | | Depreciation and Amortization | $14,070 | $13,719 | | Stock-based Compensation | $2,374 | $3,372 | | Missouri Legal Matter | $4,613 | — | | Adjusted EBITDA | $16,320 | $61,851 | Six Months Ended June 30 (Thousands) | Metric | 2025 | 2024 | | :-------------------------- | :----- | :----- | | Net (Loss) Income | $221,593 | $47,491 | | Income Tax (Benefit) Expense | $75,409 | $16,191 | | Interest Expense | $10,334 | $9,936 | | Depreciation and Amortization | $29,102 | $26,455 | | Stock-based Compensation | $5,623 | $6,618 | | Missouri Legal Matter | $(337,387) | — | | Adjusted EBITDA | $7,121 | $107,408 | - Adjusted EBITDA for Q2 2025 was $16.3 million, a significant decrease from $61.9 million in Q2 2024. Year-to-date Adjusted EBITDA also saw a substantial drop from $107.4 million in 2024 to $7.1 million in 2025, primarily due to the Missouri legal matter adjustment[34] Reconciliation of Adjusted Net (Loss) Income and Diluted EPS This reconciliation adjusts GAAP net (loss) income and diluted EPS for the impact of the Missouri legal matter and its associated tax effects, providing a clearer view of underlying profitability Three Months Ended June 30 | Metric | 2025 | 2024 | | :------------------------------------------ | :----- | :----- | | Net (Loss) Income Attributable to Common Stockholders (Thousands) | $(9,589) | $28,958 | | Adjustments (Missouri legal matter) (Thousands) | $4,613 | — | | Tax Effect of Aforementioned Items (Thousands) | $(1,163) | — | | Adjusted Net (Loss) Income Attributable to Common Stockholders (Thousands) | $(6,139) | $28,958 | | Diluted (Loss) Earnings Per Share | $(0.23) | $0.64 | | Adjustments (Missouri legal matter) | $0.11 | — | | Tax Effect of Aforementioned Items | $(0.03) | — | | Adjusted Diluted (Loss) Earnings Per Share | $(0.15) | $0.64 | Six Months Ended June 30 | Metric | 2025 | 2024 | | :------------------------------------------ | :----- | :----- | | Net (Loss) Income Attributable to Common Stockholders (Thousands) | $221,352 | $47,125 | | Adjustments (Missouri legal matter) (Thousands) | $(337,387) | — | | Tax Effect of Aforementioned Items (Thousands) | $85,090 | — | | Adjusted Net (Loss) Income Attributable to Common Stockholders (Thousands) | $(30,945) | $47,125 | | Diluted (Loss) Earnings Per Share | $5.21 | $1.03 | | Adjustments (Missouri legal matter) | $(7.95) | — | | Tax Effect of Aforementioned Items | $2.01 | — | | Adjusted Diluted (Loss) Earnings Per Share | $(0.73) | $1.03 | - The adjusted diluted EPS for Q2 2025 was $(0.15), compared to GAAP diluted EPS of $(0.23). For the six months ended June 30, 2025, adjusted diluted EPS was $(0.73), a significant decrease from GAAP diluted EPS of $5.21, primarily due to the Missouri legal matter adjustment[34] Reconciliation of Free Cash Flow This reconciliation shows the calculation of free cash flow by deducting capital expenditures and expenditures for revenue-generating assets from net cash (used in) provided by operating activities Three Months Ended June 30 (Thousands) | Metric | 2025 | 2024 | | :------------------------------------------ | :------- | :------- | | Net Cash (Used in) Provided by Operating Activities | $(15,834) | $11,022 | | Cash Payments for Capital Expenditures | $(6,227) | $(17,103) | | Expenditures for Revenue Generating Assets | $(741) | — | | Free Cash Flow | $(22,802) | $(6,081) | Six Months Ended June 30 (Thousands) | Metric | 2025 | 2024 | | :------------------------------------------ | :------- | :------- | | Net Cash (Used in) Provided by Operating Activities | $(16,106) | $(6,388) | | Cash Payments for Capital Expenditures | $(14,925) | $(36,288) | | Expenditures for Revenue Generating Assets | $(20,885) | — | | Free Cash Flow | $(51,916) | $(42,676) | - Free cash flow for Q2 2025 was $(22.8) million, a significant increase in cash usage compared to $(6.1) million in Q2 2024. Year-to-date free cash flow was $(51.9) million, compared to $(42.7) million in the prior year[36] Reconciliation of Adjusted Segment EBITDA and Margin This reconciliation provides the Adjusted Segment EBITDA and Adjusted Segment EBITDA Margin for Transportation Solutions and Parts & Services, by adding back depreciation and amortization to segment operating income Three Months Ended June 30 (Thousands) | Segment | Income from Operations | Depreciation and Amortization | Adjusted Segment EBITDA | Adjusted Segment EBITDA Margin | | :---------------------- | :--------------------- | :---------------------------- | :---------------------- | :----------------------------- | | Transportation Solutions | $12,518 | $11,686 | $24,204 | 6.0% | | Parts & Services | $9,060 | $1,265 | $10,325 | 17.3% | Six Months Ended June 30 (Thousands) | Segment | Income from Operations | Depreciation and Amortization | Adjusted Segment EBITDA | Adjusted Segment EBITDA Margin | | :---------------------- | :--------------------- | :---------------------------- | :---------------------- | :----------------------------- | | Transportation Solutions | $2,720 | $24,384 | $27,104 | 3.6% | | Parts & Services | $15,970 | $2,417 | $18,387 | 16.5% | - Transportation Solutions' Adjusted Segment EBITDA margin decreased from 13.8% in Q2 2024 to 6.0% in Q2 2025, and from 12.9% to 3.6% year-to-date[38] - Parts & Services maintained a strong Adjusted Segment EBITDA margin, at 17.3% for Q2 2025 and 16.5% year-to-date[38]