Key Takeaways

  • Wabash's backlog grew 14% sequentially to $956 million, marking the first second-quarter backlog increase in company history as customers began committing to replacement purchases, executives said on the July 29 earnings call.
  • Executives said the company opened its 2027 order book earlier than the traditional sales cycle after customers requested earlier visibility into pricing and production scheduling.
  • Wabash reported second-quarter revenue of $417 million, beating expectations. CFO Patrick Keslin said financial performance improved substantially in the quarter and "represented a significant step forward from the bottom."

Deep Dive

Wabash executives said fleets are shifting from deferring trailer purchases to committing to replacement orders as the freight market fundamentals recover.

CEO Brent Yeagy said customers have begun locking in production slots after the company opened its 2027 order book in late June, boosting Wabash's confidence in future orders.

"The response we've received is customers following up with active inquiries, early negotiations, and commitments so they can secure capacity allocations and scheduling times," Yeagy said.

Yeagy said in an email to Trucking Dive that the company's expanded South Plant in Lafayette, Indiana, has an additional 10,000 units of dry van capacity to meet growing demand. He added that the recently closed plants in Goshen, Indiana, and Little Falls, Minnesota, are unrelated to the dry van business, and idling those facilities reflects a reasonable adjustment of capacity for the truck body business.

"We have ample capacity to serve the truck body market today and in the future," Yeagy said. "There are currently no plans to reopen those two plants."

Meanwhile, as demand improves, Wabash has begun implementing "significant price increases" on new orders to recover higher material costs absorbed during the prolonged freight downturn. However, these higher-priced orders have not yet been reflected in margins, resulting in an operating margin loss of 5.6% in the second quarter.

Keslin expects third-quarter margins to be similar to the second quarter, then gradually improve in the fourth quarter. He said the current backlog supports a 200 to 300 basis point improvement in material margins in the fourth quarter.

"There is still work to be done, but assessing the growing backlog and improving market sentiment, we remain cautiously optimistic about the outlook," Keslin said.