Wabash Reports Higher Q2 Results
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Wabash National Corp. announced plans to dedicate more space to building dry van trailers as it reported gains in second-quarter income and revenue as trailer shipments rose to meet strong customer demand.
“We are witnessing a new and high level of collaboration and coordination amongst our employees as we navigate possibly the most difficult external environment I have seen in my career,” as the company focuses on the transportation, logistics and distribution industries, Wabash CEO Brent Yeagy said. He said the company was managing headwinds from rising materials costs, the supply chain and ongoing labor shortages.
Amid these challenges, the company said it will reduce floor space used to build its conventional refrigerated trailers and use it, instead, for increasing output of dry vans.
The company’s net income for the period ended June 30 was $12.2 million, or 24 cents per diluted share, on revenue of $449.4 million. That compared with a net loss of $146,000, or no earnings per share, on revenue of $339.1 million a year earlier amid the pandemic.
The quarter’s EPS were above expectations, Yeagy noted.
Strong underpinnings are in place for ongoing freight activity well into 2022, Yeagy added, including rising retail sales and depressed retail inventory, along with increased manufacturing activity — leading to very favorable spot and contract rates for Wabash’s customers.
In the Wabash commercial trailer products division the number of new trailers shipped in Q2 jumped to 11,090 compared with 8,000 a year earlier, and to 500 compared with 400 in the 2020 period at its diversified products unit, the Lafayette, Ind.-based company reported.
The commercial unit’s revenue rose to $296.3 million compared with $232.2 million a year earlier. The diversified unit posted revenue of $76.5 million. That compared with $63.9 million in the 2020 period. The final-mile segment had revenue of $81 million compared with $50.8 million a year earlier.
The company’s order backlog reached $1.3 billion, a 77% increase from a year earlier.
“Our backlog for 2022 has not yet been fully opened,” he said, and the company was in “difficult but necessary” conversations with its customers on adjusting the prices for orders already placed.
In particular, demand has exceeded capacity in the production of dry vans despite Wabash employees working significant overtime and many weekends, Yeagy said. “Even then we left customers wanting.”
Today we take the next step in our growth journey & hit the accelerator on strategic plans to add profitable capacity that will meet current & future demand. Hear more about this on our Q2 earnings call: https://t.co/ohiybuUzdp. Jump to 08:05 for the capacity announcement. $WNC pic.twitter.com/uz7ChUDWAd — Wabash National (@WabashNational) July 28, 2021
In fact, demand for dry vans at Wabash has grown over the past decade, which compelled the company to make the manufacturing shift to capitalize on that trend.
“We are announcing the transition of existing manufacturing workspace to produce [more] dry vans beginning in 2023 and we expect to be able to produce an incremental 10,000 dry vans annually,” as a result, Yeagy said.
That will be a 20% increase in its own dry van capacity and a 5% increase for the industry, he said.
“To facilitate this move,” Yeagy said, “we will be ramping down manufacturing of our conventional refrigerated van product and converting that floor space to dry van production over the next 18 months. This aligns with our intent to transition our conventional refrigerated product technology to far superior and industry leading molded structural composite technology coupled with a more efficient and innovative future refrigerated van production capability.”
He said an additional announcement on reefer van assembly capacity will be made in the coming quarters.
“When we started our journey to disrupt the refrigerated industry several years ago, we did so with the specific intent to jump over the competition with superior technology. We have now reached the point where conventional reefer design is the past,” Yeagy said. “And we are all in on commercializing the future.”
Wabash National designs and manufactures a diverse range of products, including dry freight and refrigerated trailers, platform trailers, liquid tank trailers, dry and refrigerated truck bodies, structural composite panels and products, trailer aerodynamic solutions and specialty food grade equipment. Its products are sold under the brand names Wabash National, Benson, Brenner Tank, Bulk Tank International, DuraPlate, Supreme, Transcraft, Walker Engineered Products and Walker Transport.
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