Wabash National NYSE: WNC reported second-quarter revenue of $417 million, above the expectations it provided on its first-quarter earnings call, as the trailer manufacturer said freight-market indicators and its order backlog pointed to an emerging recovery in replacement demand.
The company posted an adjusted net loss attributable to common shareholders of $21.6 million, or $0.53 per diluted share, and adjusted EBITDA of negative $9 million. Adjusted gross margin returned to positive territory at 4.1% of sales, while adjusted operating margin was negative 5.6%.
Chief Executive Officer Brent Yeagy said the company is seeing a combination of supply-side changes, federal safety-focused enforcement and improving carrier economics that could support increased trailer replacement spending. He cited strengthening spot and contract rates, higher tender rejection rates and improving manufacturing and logistics indicators.
Backlog Rises as Wabash Opens 2027 Order Book
Wabash ended the quarter with backlog of $956 million, up 14% sequentially. Yeagy said the increase marked the first time in the company’s history that backlog grew during the second quarter, a period when backlog would typically decline.
“That tells us that the customers are beginning to move from deferral to committed demand as they work to stop the three years of fleet aging,” Yeagy said.
The company opened its order book for 2027 production in late June, earlier than customary, in response to customer requests for greater visibility into delivery timing and pricing. Yeagy said customers have followed through with active quoting, negotiations and deal closings, while dealer activity has also begun earlier than in the past two years.
Management said dry-van demand is expected to be the primary driver of a broader trailer-market recovery. Yeagy said Wabash sees market conditions supporting demand for 135,000 to 145,000 dry vans, which he characterized as a replacement-level environment.
During the quarter, Wabash shipped 8,292 new trailers and 1,380 truck bodies. Chief Financial Officer Pat Keslin said truck-body volumes were in line with expectations, with the second quarter expected to be the low point of the year. The company expects a moderate sequential improvement in truck-body demand during the second half, though it expects that recovery to lag the dry-van business.
Pricing Recovery Expected to Build Into 2027
Management said margins remain pressured by material costs that have not yet been fully recovered through pricing. Keslin said the company’s second-quarter adjusted results excluded costs associated with idling its Little Falls and Goshen facilities.
Yeagy said pricing has improved since the middle of the second quarter, but much of the higher-priced business will flow through the income statement later in the year and into 2027. He said Wabash has implemented “substantial pricing increases” at roughly three-week intervals over the past nine to 12 weeks.
Keslin said third-quarter material margins, defined as price adjusted for material costs, are expected to be similar to second-quarter levels. However, he expects material margin percentage to improve by 200 to 300 basis points in the fourth quarter, supported by orders already in backlog.
For 2027 business, management said current pricing is sufficient to support a return to a more normalized EBITDA range if industry demand reaches replacement levels. Keslin said the company could return to approximately $150 million to $170 million of EBITDA under that scenario. He cautioned that the profitability seen in 2023 and 2024 should not be treated as a model for future performance, while describing 2022 as a more relevant comparison.
Yeagy said the company’s pricing outlook is based on recovering inflationary costs incurred over the past two to three years and does not include potential benefits from antidumping or countervailing-duty actions.
Segment Results and Liquidity Actions
Transportation Solutions generated $355 million in revenue and an adjusted operating loss of $12.1 million. The segment returned to positive gross margin, helped by higher volume and improved cost-base leverage, according to Keslin.
Parts & Services reported $63 million in revenue and $6 million in adjusted operating income. Keslin said profitability improved from the prior quarter as new upfit sites began to ramp and generated better results after carrying startup costs with limited revenue in the first quarter.
The company is also developing digital technology and artificial intelligence-powered tools intended to improve parts findability and availability. Keslin said these capabilities could create revenue opportunities while improving mix, efficiency and margins over time.
Operating cash flow was $5.1 million in the quarter, producing free cash flow of $3.1 million. At June 30, Wabash had total liquidity of $193 million, including cash and available borrowings, up 17% from the prior quarter.
After quarter-end, the company issued convertible senior notes that provided $150 million of additional liquidity, net of associated expenses. Management said the proceeds will be used for general corporate purposes, including repayment of outstanding amounts under existing credit agreements, as well as working-capital needs during an expected production ramp.
Wabash also said multiple lenders have committed to extend and fund a revolving credit agreement of up to $300 million, with formal completion expected before the existing agreement becomes current in September.
Third-Quarter Outlook
For the third quarter, Wabash forecast revenue of $440 million to $460 million, an operating margin of about negative 4%, and an adjusted loss of $0.50 to $0.40 per share. The company expects positive EBITDA in the second half of 2026, an outlook that Keslin said remains unchanged.
Management expects fourth-quarter revenue to decline from third-quarter levels due to normal seasonality, while earnings per share improve sequentially as pricing actions begin to flow through results and cost-control measures continue.
Yeagy said Wabash remains cautious about potential macroeconomic disruptions and geopolitical developments, but said the company is positioning its expanded dry-van capacity, U.S.-centric supply chain and strengthened liquidity to capture demand as the market improves.
About Wabash National (NYSE:WNC)
Wabash National Corporation NYSE: WNC is a leading designer and manufacturer of transportation equipment and supply chain solutions. The company's product portfolio includes dry freight van trailers, refrigerated vans, tank trailers, platform trailers, flatbeds and composite bodies. Wabash National also offers railcar products and modular building solutions, serving customers in a wide range of end markets such as food and beverage, chemicals, agriculture, waste management and construction.
Founded in 1985 and headquartered in Lafayette, Indiana, Wabash National has built a reputation for innovation in lightweight materials, advanced manufacturing processes and telematics integration.
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