Wabash National(US:WNC)2026-02-04 18:02Financial Data and Key Metrics Changes - In the fourth quarter, consolidated revenue was $321 million, with adjusted EBITDA at -$26.2 million, or -8.1% of sales, and adjusted net income attributable to common stockholders at -$37.8 million, or -$0.93 per diluted share [20][21] - Adjusted gross margin was -1.1% of sales, and adjusted operating margin was -13.6% [20] - Full-year operating cash generation totaled $12 million, with -$31 million of free cash flow in 2025 [22] Business Line Data and Key Metrics Changes - Transportation Solutions generated revenue of $263 million, with non-GAAP operating income of -$31.7 million, or -12.1% of sales [21] - Parts and Services generated revenue of $64.5 million and operating income of $5.1 million, or 7.9% of sales, continuing a trend of sequential and year-over-year growth [21][13] Market Data and Key Metrics Changes - The transportation industry faced prolonged softness in demand, with freight, construction, and industrial activity operating below normalized levels [3][5] - Early signs of stabilization in freight volumes were noted, but these have not yet translated into increased order activity [5][10] Company Strategy and Development Direction - The company is focused on aligning costs with demand, preserving liquidity, and protecting margins while pursuing market share opportunities [6][7] - Actions taken in 2025 are believed to strengthen the company's foundation and improve its ability to perform through the cycle [4] - The company is investing in parts and services as a more durable revenue stream, with a growth of 33% year-over-year in this segment [13][14] Management's Comments on Operating Environment and Future Outlook - The management noted that the demand environment is expected to remain difficult in the first quarter of 2026, with revenue guidance set between $310 million and $330 million [11][24] - There is confidence that 2026 will represent an improvement from 2025, despite the uncertainty in the timing and shape of the demand recovery [11][25] Other Important Information - The idling of manufacturing facilities resulted in approximately $16 million of total charges during the quarter, all of which were non-cash [8] - The company expects to recognize an additional $4 million-$5 million in charges in the first half of 2026, primarily related to severance and exit-related costs [8] Q&A Session Summary Question: Impact of idling capacity on refrigerated truck bodies - Management confirmed that they are not exiting the refrigerated market and are repositioning products for an improving market [32][33] Question: Continuation of parts and services run rate into 2026 - Management expects nice growth in 2026, with quarterly averages continuing from Q4, but margins may face pressure due to market conditions [34][36] Question: Changes in refrigerated truck bodies and cost structure - Management assured that capacity for refrigerated truck bodies remains intact and that strategic actions taken will optimize overhead [45][46] Question: Customer optimism and market recovery - Management noted that initial tailwinds for trailer demand are stabilizing, but it is too early to predict a significant recovery [51][52] Question: Tariff impacts on cost of goods sold - Management clarified that the impact of tariffs on material costs is minimal, with market price competition being the primary driver of margin compression [92]