Wabash National Corp., the longtime leading trailer manufacturer, will be no more. Instead, the company will rebrand as simply “Wabash,” described as “a powerful change” by President, CEO, and Director Brent Yeagy during a conference call Tuesday with investment analysts.
“We see a different future reality than our competition in the context of social, technological, and logistic changes, and we've chosen to go down a substantially different pattern to reshape the industry and pull that future forward for our customers,” Yeagy said. “It is time to be bold and send a message to all of our stakeholders that we choose to take the next step forward in our maturity as a company, as a solution provider and as part of a greater contributor to the sustainability and social awakening of the world.”
Wabash has also changed its segment reporting structure, dropping its three previous divisions: Commercial Trailer Products, Diversified Products Group, and Final Products. Instead, the company will focus on Transportation Solutions (generally, its trailer and body business—or about 90% of current sales) and on Parts & Service, “a higher margin, more repeatable business,” Yeagy explained.
“While we currently generate a small portion of our company's total revenue from the Parts & Service businesses, we appreciate the cyclicality dampening effects in the margin uplift that parts and services can create for OEMs,” Yeagy said. “The environment is clamoring for some business innovation in the way parts and services are delivered today, with the changing logistics marketplace. So we really feel that if we can approach it in a more innovative manner, a more modern manner, that the sky is the limit on where we can go with this.”
He also noted that, “between organic and inorganic opportunities,” the Parts & Service business could easily double “and we'll see where we go from there.”
Q3 numbers and outlook
Oh, and by the way, Wabash (which will continue to trade on the New York Stock Exchange under the ticker symbol WNC) expects to nearly triple its earnings in 2022.
“As we fine-tune our guidance for the remainder of 2021 to reflect increased supply chain and material cost headwinds, we are excited by the record strength in our order book and the opportunity for strong financial performance in 2022," said Yeagy. "Assuming little change in labor and supply chain conditions, the combination of a stronger jumping off point in build rates and a hard reset on pricing within our 2022 order book allows us to offer an initial EPS outlook of $1.70 for 2022.”
That compares to an expected 2021 full-year EPS of $0.60 to $0.65.
Yeagy added that the outlook could even be a little conservative.
"Clearly, we hope that as time goes on the supply chain situation improves, but we're not building that level of optimism into our outlook," he said.
By the numbers from the latest report, net sales for the third quarter of $482.6 million increased 37.3% versus the prior year quarter. Consolidated gross profit was $51 million, or 10.6% of sales. Operating income was $18.3 million, or 3.8% of sales during the quarter.
In Q3 Wabash shipped 12,455 trailers and 3,780 truck bodies, up from 8,485 trailers and 3,600 truck bodies the 2020 third quarter.
Total company backlog as of Sept. 30 was an all-time record at approximately $1.9 billion, an increase of $600 million sequentially from Q2 and an increase of 87% compared to September 2020.