Wabash National Corporation

Thank you for standing by, and welcome to the Wabash Fourth Quarter 2023 Earnings Call. I would now like to welcome Ryan Reed, VP of Investor Relations, to begin the call. Ryan, over to you.

Thank you. Good morning, everyone, and thanks for joining us on this call. With me today are Brent Yeagy, President and Chief Executive Officer and Mike Pettit, Chief Financial Officer. A couple items before we get started. First, please note this call is being recorded. I'd also like to point out that our earnings release, the slide presentation supplementing today's call, and any non-GAAP reconciliations are available at ir.onewabash.com. Please refer to slide two in our earnings deck for the company's safe harbor disclosure addressing forward-looking statements. I'll hand it off now to Brent.

Thanks, Ryan. Good morning, everyone, and thanks for joining us today. 2023 has been a year in which we've substantially exceeded the financial performance in any year of the company's history. I'd like to congratulate the Wabash team on the significant achievement. Beyond our financial accomplishments, I'm even more excited about the strategic progress we have made during 2023 and how it positions us to generate even stronger performance going forward for our employees, our customers, and our other stakeholders. In thinking about our strategic accomplishments in 2023, I'd like to emphasize the theme of connections, relationships, and networks. Our journey began with enhancing the core of our business through greater connection with our customers. The transformation to be a more customer-centric organization has been a pivotal change. We've created more points of connection with our customers with enhanced drive-in capacity, greater focus on parts and services, as well as innovative offerings like trailers as a service that allow Wabash to add recurring, longer-term value beyond our initial transaction. These advancements have not only deepened our customer engagement, but have also enriched our collaborations with supplier and technology partners. By gaining a more profound understanding of our customer problems and their opportunities, we are more able to share valuable insights with our suppliers, our technology partners, and other parties that can contribute to customer success. The power of bringing our ecosystem together for our customers enhances our collective ability to elevate performance through the cycle. We have solidified specific partnerships with HDI and the Firmway Group, which is enabling Wabash to grow our recurring revenue within the transportation, logistics, and distribution ecosystem. Our Wabash Parts joint venture with HDI rapidly established significant distribution capabilities that allow our dealer network efficient access to our comprehensive portfolio of aftermarket parts. Fernway Group is now playing a crucial role in advancing our digital capabilities, which aim to revolutionize the online experience for our dealers, traditional and non-traditional suppliers of both parts and services, and a broad set of customers spanning across the vast transportation and logistics landscape. We've also made a commitment to deepening our relationship with our employees. We appreciate that strong employee engagement enables superior financial performance. Our focus is on cultivating a work environment and a culture that keeps respect for our employees front and center by empowering them to confidently bring their best selves to work and an atmosphere that drives an openness for change and innovative spirit. This commitment to a high-performance culture is not just about achieving corporate goals. It's about fostering a sense of unity and purpose where every individual feels respected, valued, and part of something bigger. With every day that goes by, Wabash is enlarging its role as a visionary leader with the capability to address the opportunities with an increasingly complex transportation, logistics, and distribution ecosystem. Our strategy very much intends to harness our expanding ecosystem to create enhanced value for all engaged parties. As we've contemplated the strategic positioning we've attained in most recent years, our emerging set of capabilities will continue to scale over time to ensure we accelerate effectively we have made the decision to shift our organization to enhance our focus on bringing our longer-term strategy plans to life. In December, Dustin Smith transitioned from Chief Strategy Officer to Chief Operating Officer and Kristen Glazner to Chief Administrative Officer. Dustin has been instrumental in our strategy refresh and will now lead our operations through this vital phase. His role will focus on the deployment of operational and manufacturing capabilities required to foster growth in our businesses. Kristen has led our legal and people support functions over the past few years. As Chief Administrative Officer, she will ensure we possess the required capabilities and business processes to act on our business in a manner that drives respect for people to the highest achievable levels, a culture that embraces change, and the capacity to scale our business to new levels of performance. Our team is excited about these changes, and I'd like to extend my congratulations to Dustin and Kristen on their new roles. Moving on to our financial performance during the fourth quarter of 2023, we achieved earnings per share of $1.07. This brings our full year earnings to $4.81 per share, surpassing our 2025 EPS goal set in 2022 by 39%. While favorable market conditions supported this achievement, we firmly believe in the sustainability of our execution, as well as the repeatability of this level of financial performance. We are showing higher levels of financial performance through all phases of the cycle, and we are confident that when the market conditions strengthen for our customers, we will achieve financial performance that exceeds 2023. Turning our attention to market conditions and backlog, new order activity during the fourth quarter allowed our 12-month backlog to increase sequentially to $1.6 billion. During more normalized mid-cycle environments, it's typical to see new order activity stretch into the first quarter of the year, as we expect to see in 2024. With freight rates having contracted for now 24 months, we're watching capacity exit the transportation space. Moreover, as macro destocking activity abates, this has historically alleviated pressure that we've seen on the manufacturing sector. In addition to these corrective factors, the combination of a relatively strong labor market, sustained consumer spending, and cooling inflation supports the likelihood of an economic soft landing, particularly considering potential interest rate cuts on the horizon. It seems clear that the transportation space has already experienced a lengthy recession, and although industry participants will likely be shy about making bold predictions about the timing of a rebound, the freight down cycle seems unlikely to last to the entirety of 2024. Wabash is well prepared to accelerate as the winds of the market shift to our back and drive us forward. Moving on to our financial outlook, we're initiating 2024 guidance with revenue in the range of $2.2 billion to $2.4 billion, with EPS of $2 to $2.50. While this outlook is in moderation from our 2023 performance, it's important to note that the midpoint of our 2024 EPS guidance is in line with our results from 2022 and would be tied for the second best annual financial performance in the company's history, which would easily be the best results achieved during a period of declining revenue. At no time in Wabash's history have we had the balance sheet strength, the strategic vision, and the collective will to decisively continue our programmatic march through the headwinds of a difficult market. In closing, 2023 has been a year of both record financial achievement and strategic advancements for Wabash. This progress has readied us to deploy enhanced operational and manufacturing capabilities to support organic growth generated by the multitude of connections Wabash can make through our ecosystem. Most immediately, leveraging digital transformation to connect the footprint 78 dealer locations to create greater ease of customer access across the network to equipment, parts, and services. In the more immediate term, we expect to leverage our steady backlog to demonstrate our ability to post record downturn financial performance. As the freight market downturn transitions into an upswing, we are well prepared to capitalize on the potential market improvements anticipated in 2025 and beyond. With that, I'll hand it over to Mike for his comments.