WABASH NATIONAL Corp Q3 FY2024 earnings call

• Strategic updates: Recognized the need to refocus closer to core markets of transportation, logistics, and distribution, shifting from product-centric to customer-centric model. Parts and service initiative is a key focus as it's a higher margin, recurring revenue business. - Organizational changes: Mike Pettit moved to Chief Growth Officer to oversee parts and services, digital enablement, and engineering. - Ecosystem partnerships: Hosted Ignite Conference with ecosystem partners, signed strategic supply agreement with Steel Dynamics, and Trailers as a Service partnership with Kodiak. - Legal update: A St. Louis jury found Wabash liable for $12 million in compensatory damages and $450 million in punitive damages related to a 2019 motor vehicle accident, with post judgment proceedings ongoing. - Backlog and financial outlook: Total bookings at end of third quarter were just over $1 billion, down from Q2. Adjusted full-year 2024 revenue outlook lowered to ~$1.95 billion and EPS to ~$1.25. Parts and service revenue streams continue to grow. - Capital allocation: Well positioned to invest in strategic growth initiatives, focus on parts and service growth, competitive dividend, and evaluate between repurchases and M&A.

Transportation Solutions generated revenue of $416 million, which is a significant portion of the total. Parts and services generated revenue of $52 million. In terms of operating income, Transportation Solutions had operating income of $29 million and Parts and services had operating income of $8.3 million. Revenue contribution: Transportation Solutions contributed a larger percentage to the total consolidated revenue, while Parts and services contributed a smaller but growing percentage.

• 2024: Lowered full-year revenue outlook to roughly $1.95 billion and EPS to approximately $1.25 due to rebalancing of Q4 dry van demand and capacity. - 2025: Too early to quantify expectations, but believe 2025 EPS performance can exceed that of 2024. Anticipate Q4 call will provide more detail. - 2025 outlook: Parts and service revenue streams will have broader and deeper offerings, and truck body business is being thoughtfully increased incrementally to prepare for 2025.

• Legal risk: A St. Louis jury found Wabash liable for $12 million in compensatory damages and $450 million in punitive damages in connection with a 2019 motor vehicle accident. The verdict is not supported by facts or law, and there will be post judgment proceedings before a final judgment for appeal. Wabash is working with external legal counsel, accounting, and insurance firms to evaluate legal options.

Q: Thoughts on parts and service business growth, given efforts made?

A: Foundational elements in place, parts and services are more resilient than most revenue streams but not immune to cyclic demand. Stability in market will provide tailwind in 2025. There are different revenue streams in parts and services, with some growth and progress seen but also some weakness in OE component parts related to overall freight landscape.

Q: Ballpark of max amount broader trailer market can be down and Wabash still have flat to up year in earnings for 2025?

A: Hesitant to give specific bottom for guidance, but parts and service growth and truck body growth could offset softness in dry van specific unit count