Wabash National(WNC) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q1 2025, consolidated revenue was $381 million, with a shortfall of approximately $55 million due to lower than expected shipments of trailers and truck bodies [30] - Adjusted net income attributable to common stockholders was negative $24.8 million, or negative $0.58 per diluted share [31] - Adjusted EBITDA was negative $9 million, representing negative 2.4% of sales [30] Business Line Data and Key Metrics Changes - Transportation Solutions generated revenue of $347 million with an operating loss of negative $10 million, impacted by lower demand and labor cost exposure [31] - Parts and Services generated revenue of $52 million with operating income of $6.9 million, showing year-over-year revenue growth despite market conditions [31][32] Market Data and Key Metrics Changes - The total backlog at the end of Q1 was approximately $1.2 billion, indicating a slight sequential increase [18] - The trailer industry has experienced eight consecutive quarters of contraction in orders, leading to an aging of fleets across the industry [18] Company Strategy and Development Direction - The company is focusing on growing its parts and services revenue to create a more durable and resilient business model, reducing exposure to cyclicality [20][28] - The strategic initiative includes expanding the Trailers as a Service (TaaS) offering, which has over 1,000 trailers deployed [23][29] Management's Comments on Operating Environment and Future Outlook - Management noted a broader macro-driven slowdown affecting customer decision-making and capital expenditure plans, leading to a downward revision of industry forecasts for 2025 [5][6] - The updated guidance for 2025 revenue is approximately $1.8 billion, reflecting a reduction of about $200 million from previous estimates [33] Other Important Information - The company is navigating ongoing legal matters related to a 2019 motor vehicle accident, with a reduced judgment amount of $119.5 million [17] - The company has a liquidity position of $310 million as of March 31, 2025, including cash and available borrowings [32] Q&A Session Summary Question: Concerns about decremental margins and EPS loss - Management clarified that pricing pressure around commodities is accounted for in the full-year guidance, and they do not expect an oversized reduction in profitability [39][40] Question: Outlook for parts and services - Management expressed optimism about maintaining growth in parts and services despite weakness in original equipment sales, expecting sequential growth throughout the year [44] Question: Total TaaS units and growth expectations - The company reported over 1,000 TaaS units deployed and anticipates growth in this segment throughout 2025 [53][55] Question: Liquidity and capital allocation - Management discussed their liquidity strategy, emphasizing flexibility in capital allocation based on market conditions [62] Question: Impact of weather on Q1 performance - Management acknowledged that weather affected manufacturing and cost alignment, but they expect improved conditions in Q2 [64][66]