Wabash National(US:WNC)2022-04-27 19:07Financial Performance - The company reported consolidated first quarter revenue of $547 million, with new trailer shipments of approximately 11,695 and new truck body shipments of 3,540 [27] - Revenue increased nearly 40% year-over-year, and gross margin was 10.6% of sales, while operating margins were 3.7% [16][28] - Net income for the quarter was $12.1 million, or $0.24 per diluted share [29] Business Segment Performance - Transportation solutions generated revenues of $502 million with operating income of $32 million, while Parts & Services generated revenue of $47 million and operating income of $6.8 million [29] - The Parts & Services segment is expected to chart a path of sustainable growth during 2022 [29] Market Conditions - The company has zero revenue exposure to Europe following the divestiture of Extract Technology in 2021, and its supply chain is highly leveraged in North America [17][19] - The backlog stood at a record $2.3 billion, representing a 50% increase compared to the same period last year [22] - The company expects continued strong demand driven by structural changes in logistics and e-commerce [21] Company Strategy and Industry Position - The company is focusing on sustainability and social responsibility as core elements of its strategy, with a commitment to providing innovative solutions for alternative powered vehicles [10][15] - A new technology alliance with Clarience Technologies aims to enhance trailer applications and connectivity as electric and autonomous vehicles come to market [13] - The company is positioned to benefit from structural changes in logistics driven by e-commerce, which is expected to create a higher tractor-trailer ratio across the logistics spectrum [47] Management Commentary on Future Outlook - The company raised its 2022 EPS outlook to $1.90, citing strong backlog and improved margin structure [23][24] - Management expressed confidence in the ability to ramp production and meet strong demand, with expectations for revenue of $2.5 billion in 2022 [33] - The company anticipates operating margins to improve to approximately 6% at the midpoint for the full year [34] Other Important Information - Year-to-date operating cash flow was negative $35 million, but the company expects a release of working capital as production ramps up [30] - The company has a liquidity position of $203 million as of March 31, 2022, with $73 million in cash and cash equivalents [31] Q&A Session Summary Question: Pricing on new trailers and cost offset - Management indicated that any price costs not covered in Q1 were due to backlog from 2021, and they expect improved margins moving forward with a full mix of 2022 priced units [40][41] Question: 2023 order books - Management noted that while order books for 2023 are not officially open, they are engaged in discussions with customers and expect to open them earlier than in 2022 [44] Question: Structural changes in trailer usage - Management confirmed that there are structural changes in logistics driven by e-commerce, leading to increased demand for trailers across various segments [47] Question: Monthly margin progression - Management observed a step-up in margins throughout Q1, with expectations for Q2 margins to return to pre-pandemic levels [56][59] Question: SG&A guidance - Management explained that the decrease in SG&A as a percentage of revenue is due to revenue growth and continued cost control measures [76] Question: Trailer deliveries and capacity addition - Management confirmed that the capacity addition plan remains intact and expects normal seasonality in trailer deliveries for the rest of the year [79][96] Question: Impact of spot rates on customer mix - Management indicated that their strategic customers are less affected by spot rate fluctuations and are optimistic about contract rates [63] Question: Changes in trailer configuration for EVs - Management discussed the need for advanced technology in trailer design to accommodate electric and autonomous vehicles, emphasizing their commitment to sustainability [106][110]