Good morning. My name is David and I’ll be your conference operator today. At this time, I would like to welcome everyone to the Wabash Fourth Quarter 2021 Earnings Call. Today’s conference is being recorded. Thank 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 of items before we get started. First, please note that 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 all available at our investor site at onewabash.com. Please refer to Slide 2 in our earnings deck for the company’s Safe Harbor disclosure addressing forward-looking statements. Also just a quick reminder that registration is open for our Investor Meeting on May 19 on our investor website. We’re looking forward to the opportunity to address trends in our market, the changes we’ve made in support of our refreshed strategy and our longer-term outlook. I’ll now hand it off to Brent.

Thanks, Ryan. I’d like to start today’s call with an important announcement about the next step we are taking in our company’s transformation. With our investors and other stakeholders, we often talk about the momentous transition that’s happening in transportation, logistics, and distribution as the industry adapts to a compilation of forces. At Wabash, we see a different future reality in our competition, in the context of social, technological, and logistic changes and we’ve chosen to go down a substantially different path to reshape the industry and pull that future forward for our customers. There is no other truck body or trailer manufacturer that thinks the way we do, that acts the way we do, that is making the kind of significant changes to prepare our customers for a very different world. One that is coming fast with forced disruption. On our last earnings call, we announced the change of our company name from Wabash National to Wabash. We signaled a strategic shift in our brand strategy. Today, we're excited to reveal that Wabash National and our family of brands have rebranded under one powerful Wabash Brand that unites our products, our people, our customers, and our business partners. As released in our 8-K disclosure in early January, all legacy brands, including Supreme, Walker, Brenner, Bulk, Transcraft and Benson will henceforth share the market as Wabash. Over the next year, we will also introduce new brands to the market, including a new brand for our proprietary molded structural composite technology, which will go to market as EcoNex Technology, one of the most environmentally conscious materials in the market to advance sustainability throughout the transportation, logistics, and distribution industries. Moving on to capacity and product updates. Our conventional reefer and dry van capacity timeline remains on track. Given historic capacity constraints and associated production inefficiencies, emerging sets of new customers with digital brokers and private fleets and trailer pools and a dealer network capable of further increases in sales, we see this as a critical opportunity to grow our production capacity. While stakeholder questions about adding capacity during a period of elevated industry demand are certainly valid, this additional dry van capacity is key to the growth of our entire portfolio through customer cross-selling opportunities and strategically positions Wabash for the next decade rather than just capitalizing on strong market conditions over the next few years. In terms of specific efforts to grow and diversify our revenue streams through product development, during the fourth quarter, we announced the launch of a new light-duty refrigerated home delivery truck body that was developed in collaboration with a national grocer. We're excited to commercialize this new product that serves a growing market with needed and desirable features like multi-temperature zones, maximized cargo capacity, and user-friendly driver access. Additionally, the use of EcoNex allows our customers improved operating efficiency while also producing environmental impact with 25% to 30% thermal efficiency, as well as reduced truck body weight. While our initial builds are on internal combustion engine chassis, we expect this truck body to translate very well to electric chassis applications. During the fourth quarter, we announced the development kick-off of the next generation walk-in van to further broaden our product offerings in support of efficient delivery of items to the home. We have engaged the leading engineering firms to utilize our combined expertise to optimize the product design and continue to leverage Wabash’s material technology expertise to offer a lighter design. We're looking forward to moving from development validation on key customer testing later this year. Additionally, we have partnered with Purdue University to enhance our speed to market with these projects. We are excited to leverage Purdue's expertise in areas including advanced engineering, material sciences, and electrification to help bring solutions to market faster through the transportation, logistics, and distribution industries. It is clear that the refinement of our strategy and vision to focus on solutions for transportation and related distribution markets combined with customer alignment with an organizational structure has accelerated our internal rate of change and focused on development activities on innovative products and services that will create value for our targeted set of customers. Wabash has always led the industry in product designs and future weight reduction as a key customer benefit, and in recent years that value proposition has gained increased customer focus as part of environmental impact strategies. Our products will continue to extend benefits like cost savings and thermal efficiency as competitive differentiators in a world that is likely to increasingly prioritize ESG initiatives at an accelerated pace. As one of the very few public companies among our array of competitors in different product segments, we view ESG and corporate responsibility as opportunities for competitive differentiation. Our cross-functional corporate responsibility team has brought us a long way in a very short period of time regarding our public disclosures on ESG initiatives, and I encourage you to review our latest sustainability report to learn more about our accomplishments in this important area. One new development I'd like to highlight is Wabash being recognized as one of America's most responsible companies by Newsweek. This ranking was compiled by evaluating information across environmental, social, and corporate governance areas to determine companies that take these responsibilities more seriously than others. We intend to keep pushing forward with a continuous improvement mindset on how Wabash can continue to extend our leadership position on engaging with customers, communities, and other constituencies on these important topics, and I look forward to talking more about this in our upcoming Investor Meeting. In addition to our corporate responsibility team, I'd also like to thank our Board of Directors for their engagement and careful stewardship on ESG matters. Employee engagement is critical, but the involvement of our board of directors allows us to push our commitment to the next level. Moving on to market conditions and our backlog, freight rates remain at strong levels for carriers throughout peak season and have continued to remain elevated in 2022. Industry reports show strength in new trailer order activity during certain months in Q3 and Q4, and orders naturally tail off as order books have become practically full across the industry. Overall, our backlog ended the fourth quarter at approximately $2.5 billion, up sequentially by approximately $600 million from the end of Q3. This represents a 31% sequential increase in backlog or a 70% increase versus the same quarter of 2021. While our van business is essentially fully booked for 2022, our other Transportation Solutions products support higher than normal backlogs, which continue to indicate constructive market demand conditions for 2022. As we’ve executed well relative to our competition to contain any 2021 backlog slippage to the first quarter of 2022, we will continue to maintain a forward-looking posture by collaborating with customers on longer-term deals to include 2023. Far from broadly opening up the order book, the industry is well-positioned to work in partnership with select customers who purchased from across our first to final mile portfolio, the plans on how we best serve their demand for equipment in the future years, while purposely maximizing the incremental capacity we bring online. Our outlook for 2022 is essentially unchanged with a small suite at the revenue line and a moderate adjustment on the income statement for reduced amortization as a result of the changes to our product branding strategy. I'll let Mike cover that in further detail, but I'd like to reiterate that we are looking at 2022 as a year where we can achieve significant revenue, operating income, and earnings per share expansion, even if the supply chain shows no improvement. As our backlog clearly indicates, we have upside to our outlook if supply chain conditions have improved. I'd like to conclude my comments by reinforcing how excited I am to announce our product brand strategy because the way Wabash goes to market has undergone a considerable shift during my tenure as CEO, and the refreshed brand strategy is the final piece of the puzzle. With accelerating innovation and product development activities shaped by the changing transportation landscape and intensified focus on sustainability, I believe Wabash is well-positioned to move our industry forward. With that, I’ll ask Mike to provide additional details on our 2021 financial performance and our 2022 outlook.

Thanks, Brent. Turning to our review of our quarterly financial results. On a consolidated basis, fourth quarter revenue was $479 million with new trailer and truck body shipments of 11,655 units and 3,230 units respectively. In terms of operating results, consolidated gross profit for the quarter was $42.6 million or 8.9% of sales. On a GAAP basis, the company recorded an operating loss of approximately $19 million. This result includes a non-cash charge for impairment of trade names and trademarks related to the retirement of legacy product brand names. On a non-GAAP basis, adjusted for the non-cash impairment, operating income was $9.7 million or 2% of sales during the fourth quarter. Operating EBITDA for the fourth quarter was $23.8 million or 4.8% of sales. Finally, for the quarter, GAAP net loss was $25.3 million or negative $0.51 per diluted share. On a non-GAAP basis, adjusted for the impairment of trade names and trademarks, as well as debt transaction costs, net income was $3.7 million or $0.07 per share. These quarterly results were somewhat below our expectations as the supply chain continued to struggle to support our production activity with issues temporarily causing acute disruption within certain product lines. Additionally, COVID-related absenteeism spiked toward year-end in relation to the Omicron variant as we saw absenteeism rates in late November and December increase well over rates experienced during the rest of 2021. From a segment perspective, transportation solutions reported an operating income of $80 million or 4.1% of sales. Parts and services revenue was $38.1 million and non-GAAP adjusted operating income was $4.4 million or 11.6% of sales. While operating cash outflows of approximately $7 million for the year show the impact on working capital driven by significant year-on-year revenue growth, I'd like to point out that from Q3 to Q4 we generated $66 million of cash from operations as both accounts receivable and inventory declined. During 2021, our capital spending was $49 million as an investment in projects that we expect to be highly impactful to our future growth initiatives. As a reminder, in late September and early October, we upsized our revolving credit facility by $50 million to $225 million, and closed the issuance of $400 million in senior secured notes respectively. After repaying our previous senior notes and term loans, our improved debt structure results in $3 million in annual interest expense savings and we began to see flow-through during the fourth quarter. More importantly, these transactions create a reasonably priced patient debt structure that allows us to invest in our business and enhances our opportunity to create value with a lower cost of capital. With regard to capital allocation during the fourth quarter, we utilized $21 million for capital investments as spending on our incremental dry van capacity began. We allocated $12 million to repurchase shares and paid our quarterly dividend of $4 million. Our capital allocation focus continues to prioritize reinvestment in the business through growth capital expenditures while also maintaining our dividend and evaluating opportunities for share repurchase alongside both our M&A opportunities. Moving on to our financial guidance for 2022. Our prior outlook remains unchanged, with an expectation of the midpoint increasing by $50 million to $2.3 billion, while remaining conservative in our assumptions about the production activity current supply chain conditions will allow. We did add 275 employees during Q4, which will allow us to continue to increase line rates. Operating income increased versus our prior guidance as a result of lower amortization going forward, as well as an accompanying improvement due to the slightly improved revenue outlook. These changes result in our EPS outlook ticking up to $1.75 from $1.70 per share previously. I'd like to reiterate that our guidance continues to assume no change in supply chain conditions. As Brent mentioned, we believe our backlog shows that there is clear upside opportunity to improve our 2022 financial outlook if the supply chain improves. We also believe our parts and service segment will begin charting a path of sustainable growth during 2022 by prioritizing expansion of recurring revenue. Services grew revenue and operating income year-over-year by 27 million and 5.8 million respectively. I like to remind everyone that Q1 tends to be our lowest quarter in terms of revenue and EPS generation. Additionally, we do expect Q1 of 2022 to be the lone quarter affected by backlog pushed into 2022, resulting in an unfavorable margin mix compared to the remaining quarters of calendar year 2022. Our expectations for the first quarter revenue to come in between $470 million and $500 million, and to be between $0.10 and $0.15 per share from an EPS perspective. Operating margin in our full-year 2022 guidance is expected to be approximately 6% and with continued growth next year, we believe we can achieve our 8% operating margin target in 2023. In closing, I believe we are well positioned to execute the next steps of our strategic plan while also continuing to serve strong near-term customer demand for our first to final mile solutions. Our One Wabash team has done an admirable job of embracing significant strategic and organizational change. We’re all excited to move forward under a unified product brand strategy, knowing that we will be able to leverage the strength of our Wabash brand name as we continue to grow our business with unique new products and services.

Thank you. And we’ll take our first question from Felix Boeschen with Raymond James.

Hey, good morning, everybody.

Good morning.

Good morning.

I wanted to start off on some of the comments around the backlog and sort of forward sales expectations, but obviously the backlog is actually a little bit higher than your 2022 sales guidance as of now. So, I’m just trying to understand and recall the incremental $200 million. Is there a chance that we’d get booked in 2022 or is that specifically earmarked for 2023 at this point?

Yes. Thanks, Felix. I'll take that one. So, as a whole, we have done a really outstanding job of constructing a backlog that gives us a tremendous amount of optionality. And that was very purposeful in how we looked at managing the supply chain and available capacity in 2022. So, with the guidance being predicated on the supply chain not getting better, we wanted to make sure that when it does improve, we have the ability to pull that backlog into 2022, assuming timing allows. That gives us tremendous flexibility and that’s why we say we constructed the backlog in a way to allow for constructive upside to be possible. We’re working every day to see if we can make that happen.

Okay. Got it. That’s super helpful. And then Brent in the release, you specifically mentioned some of the new pricing initiatives and specifically about pricing related to raw materials. Can you broadly comment on how that pricing change has been received by your customers? And I just want to clarify, is this exclusively on the trailer book or truck bodies also?

Yeah. So, first off, let me say, I am exceptionally pleased with how we are executing based on how our commercial group is executing our variable pricing model and how we've been successful passing through incremental inflation even in the last 30 days as we manage component and other related price increases. So, I feel very good about that. It is primarily where most of the work has been done to date on the van side of the business. However, we are implementing purposeful variations to that same mindset across the entire business throughout 2022. So, we are managing well on that front.

Okay. Helpful. And then just my last one, maybe this was better from Mike, but just around the Q1 guidance, you mentioned that there would be some of the 2021 backlog that's going into 2022 that is going to be a negative. Is there any way to quantify how much of the Q1 sales is going to be a 2021 backlog? And I kind of understand how we can isolate some of the mixed dynamics in that guide.

Yes. It is – I would say you could have a look at generally the shipment and build mix that we had in Q4 is really the main piece that pushes into 2022. It's not a build and ship, but it is going to be a headwind so you've got really two factors of much lower than what we'll see in Q2 to Q4. As the shipments are always a little bit lower in Q1 and we have that overhang. I would say the build is going to be in the 5% to 10% range of what you have pushed in some of that ballpark.

I'll add a little bit more beyond your question, just anticipating others. When we think about Q1 as it carries forward, not only do you have that moderate margin headwind that Mike is talking about, but when we think about Q4 and what we shipped and how we execute on the production front, the Omicron reality did create a pretty forceful event in the December timeframe. And just as the world and the United States are dealing with it, that's continued through really the month of January. We're now starting to see it trail off, just as we're seeing it around the country. So, that's another reason when we think about Q1 being not only our most seasonal lowest quarter of the year but a very challenging quarter.

Got it. Very helpful. I’ll stop there.

Thank you.

Next we'll go to Justin Long with Stephens.

Thanks and good morning.

Hi, Justin.

I wanted to ask about new trailer ASP, obviously, a lot of momentum on that front. Any updated thoughts on how that metric could trend going into 2022? And if I look at the fourth quarter, I know there's been the re-segmentation, but it looks like new trailer ASP actually went up a good bit sequentially, maybe 10% or so in the fourth quarter, but margins in the Transportation Solutions segment actually went down. So, Brent, you may have answered this question a moment ago with Omicron, is that really what drove that discrepancy or is there anything else that’s contributing to that?

We continue to see into 2022, which we talked about a lot in the Q3 call. We also mentioned that Q4 would be the peak paying quarter of the price-cost relationship. So, what you really are seeing is the price starting to catch up, but you still have that extra material cost in Q4 that wasn’t fully priced in, which we knew would happen in 2021. We believe most of that is behind us in 2022. If you continue to see the ASP increase and the material costs will essentially flatten out is the best way to think about that. Also, as you mentioned and Brent mentioned, Omicron did impact us in December, which affected some of the conversion costs. The majority of that margin compression is on the material cost versus price relationship.

Yes. I guess a little bit more on the Omicron piece. Mike alluded to the fact that we've been very successful in the last quarter bringing in additional headcount to meet our 2022 capacity plan requirements. The additional headcount that we brought in was able to mitigate some absenteeism that spiked in December. But it did preclude us from building the extra volume that we planned on getting from that. All conversion cost math, when you think about the quarter, right? But the bright side of that is we have labor in place, we continue to add in preparation for 2022. While we're taking a little bit of conversion costs in the near term, we're setting the table for full 2022.

Okay, that makes sense. And that's helpful around your guidance for the first quarter versus the remainder of the year in terms of the cadence of EPS and maybe where you're expecting to exit the year, kind of what's embedded in the guidance once pricing catches up with cost?

Yeah. We’re going to see a big step up from Q1 to Q2. And that again, some of the units that we pushed from Q4 to Q1, as well as the Omicron impact that Brent mentioned, so Q1 with lower shipments will be the lowest quarter. You’ll see the big step up into Q2. You'll see some moderate increase from there and then as we progress to Q4, but it’s going to be much smoother EPS profiles in Q2 to Q4 with a moderate step-up. If you calendarize Q4 into 2023, that's when the real EPS strength will materialize.

Okay. And last question I had was just given the re-segmentation, can you give us some help around gross margin by segment and what's getting baked into the guidance?

Obviously, you're going to see a much larger step up in gross margin from 2021 in the transportation segment, as that's where we have the real price material cost disconnect. So, you'll see that normalize in 2022. I don't expect to see a significant change in the gross margins on the parts and services business. We're really happy with the steadiness of that business. Underneath the hood, I said in my prepared remarks, but it's worth mentioning again, I said that we divested the extraction business last year and we discontinued some on-site operations. We see really nice growth into 2021 from our remaining business, which continues. So, I don't expect a lot of margin improvement in that business, but I would expect some pretty nice top line and bottom line growth in the parts and services business.

Great. Thanks for the time.

Thank you, Justin.

Next we’ll go to Mike Shlisky with D.A. Davidson.

Hey guys, good morning.

Good morning, Mike.

So, can you tell, first off, are there any unusual one-time expenses that have been incurred in 2022 as you rebrand all the other companies and segments under the One Wabash system?

No, we took that whole charge in the Q4 financials on our GAAP presentation of the financials for Q4. All of the charges related to the One Wabash branding changes were taken in Q4. There'll be some minor, obviously signage and branding things, but nothing as material to call out for 2022.

Great. Maybe just a little deeper on that. I was curious about the Supreme brand changeover as well. I mean, that's a pretty big well-established company that you bought a few years back and the brand name was really important there. I know you had an impairment here, but just tell us about a little bit like the steps you’re taking to ensure the old brand fades out, and the new brand comes in a way that doesn't challenge customer brand recognition or the way customers view those products.

Yeah, this is Brent. When we undertook this initiative to understand the right direction going forward regarding how we represent the company to all of our stakeholders, we conducted a significant amount of third-party research facilitated by outside partners to ensure that we had real data on what was the truth on the ground across that stakeholder group. The feedback has been overwhelmingly positive that when we think about how the strategy is being executed, how to bring engineered solutions to the world, the Wabash brand is what carries. This does not take away necessarily from any of the brands we’ve had, but to ensure that we have a One Wabash approach that aligns how we operate internally, how we'll represent ourselves to the customers, and how we'll sell to them versus the final mile solutions. The Wabash brand has been tested and shown to carry across all of that. We feel extremely comfortable based on feedback from our largest customers that our dealer body is enthused with the direction that we're going. Where we anticipated possible pushback, we received the opposite, which was an embrace of the idea.

Got it. That's great color. I also wanted to ask about the new upcoming walk-in brand product. That is a market that's been somewhat under-penetrated. Can you give us a little more color as to how you intend to compete there? Is your product being designed with EVs solely in mind? Will it be an only EV type product or do you plan to also cater to the other chances that are out there today?

Let me answer the second part of your question. The design application that we're working on will be compatible with all engine types or power going forward. That was a key design criterion as we looked to meet our customers’ expectations. There is a limited amount of competitive entry into the specific space from a body type standpoint. How we approach this is really being pulled by our customers. As we sell first to final mile, our customers are asking us to get into this space and provide a superior solution that differs from what's being presented with different materials and to do it with a different mindset. This is our entry into that space. It is very holistic in the way that we're approaching it. You can think about our portfolio strategy with customers aligned with us. We are giving them very specific solutions that address their needs.

Got it. Well said. Thank you very much.

Thanks Mike.

Thanks David, and thanks everyone for joining us today. We'll look forward to following up with you during the quarter.

And that does conclude today's conference. We thank you for your participation. You may now disconnect.