Q4 2021 Wabash National Corp Earnings Call
Good morning.
Speaker 1: Good morning.
Speaker 2: My name is David and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Wabash 4th quarter 2021 earnings call. Today's conference is being recorded.
My name is David and I'll be your conference operator today at this time I'd like to welcome everyone to the Wabash fourth quarter 2021 earnings call today's conference is being recorded.
Speaker 2: All lines have been placed on mute to prevent any background noise. After the speakers remarks, there'll be a question and answer session. If you'd like to ask a question during this time, simply press the star key followed by the number one on your telephone keypad. If you'd like to withdraw your question, press star one once again. Thank you, Ryan Reed, Director of Investor Relations. You may begin your conference.
All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you'd like to ask a question. During this time simply prestige Starkey followed by the number one on your telephone keypad, if you'd like to withdraw your question Press Star one once again, thank you Ryan Reed director of Investor Relations you may begin.
In your conference.
Thank you.
Speaker 3: Thank you. Good morning, everyone, and thanks for joining us on this call. With me today, our Brent Yeggy, President and Chief Executive Officer, and Mike Pettit, Chief Financial Officer.
Morning, everyone and thanks for joining us on this call with me today are Brent <unk>, President and Chief Executive Officer, and Mike Pettit, Chief Financial Officer.
Speaker 3: 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-GAP reconciliation are all available at our Investored site at 1wavash.com.
A couple of items before we get started first.
First please note that this call is being recorded I would also like to point out that our earnings release, the slide presentation supplementing today's call and any non-GAAP reconciliations are all available in our investor site at one Wabash Dot com.
Speaker 3: Please refer to slide two in our earnings deck for the company's Safe Harbor disclosure addressing forward-looking statements.
Please refer to slide two 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 May 19th Investor meeting on our Investor website, we're looking forward to the opportunity to address trends in our markets. The changes we've made in support of our refresh strategy and our longer term outlook I will now hand, it off to Brian .
Speaker 3: Also just a quick reminder that registration is open for our May 19th investor meeting on our investor website. We're looking forward to the opportunity to address trends in our markets, the changes we've made in support of our refreshed strategy, and our longer-term outlook. I'll now hand it off to...
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.
Speaker 4: 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 courses.
Speaker 4: with our investors and other stakeholders. We often talk about the momentous transition that's happening in transportation with logistics and distribution, as the industry adapts to a compilation of forces.
At Wabash, which has different future reality that our competition in the context of social technological and logistics changes and we chosen to go down a substantially different paths to reshape the industry and pull that future for our customers.
Speaker 4: At Wabash, we see a different future reality than our competition in the context of social, technological, and logistics 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 trailer manufacturer thanks to the way we do that acts the way, we do that is making the kind of sweeping changes prepare our customers for a very different world.
Speaker 4: There is no other truck body or trailer manufacturer that thinks the way we do, that acts the way we do, or that is making the kinds of sleeping changes to prepare our customers for a very different world. One that is coming fast and the force disruption.
One that is coming fast and workforce disruption.
Speaker 4: On our last earnings call, we announced the change of our company name from Wabash National to Wabash, which signals a strategic shift in the market.
On our last earnings call, we announced the change of our company name from Wabash National to Wabash, which signals 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 Ram that unites our products, our people and our customers and our business partners.
Speaker 4: 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, and our customers.
Speaker 4: as released in our AK Disclosure in early January . All legacy grants, including Supreme, Walker, Rinner, Volk, Transcraft and Benson. We'll henceforth go...
As released in our 8-K disclosure in early January all legacy brands, including screen Walker Renter.
Transcript and Benson.
Hence forth go to market as Walsh over.
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 eco next technology one of the most environmentally conscious materials in the market to advance sustainability throughout the transportation logistics and distribution industries.
Speaker 4: 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 industry.
Moving on to capacity and product updates are conventional reefer dry van capacity.
Speaker 4: Moving on to capacity and product updates, our conventional reefer and dry-band capacity timeline.
Timeline remains on track.
Given historic capacity constraints and associated production inefficiencies.
Speaker 4: Given historic capacity constraints and its associated production and efficiency.
Merging sets of new customers with digital brokers and private fleets are asking trailer pools and a cat dealer network capable of further increases in sales we see this as a critical opportunity to grow our production capacity.
Speaker 4: emerging sets of new customers with digital brokers and private fleets and massing trailer pools and a catapult dealer network capable of further increases in sales. We see this as a critical opportunity to grow our production capacity.
Speaker 4: While stakeholder questions about adding capacity during a period of elevated industry demand are certainly valid, this additional drive and capacity is key to the growth of our entire portfolio through customer cross-selling opportunities and strategically positions wall bash for the next decade rather than just capitalizing on strong market conditions over the next few years.
Stakeholder questions about adding capacity during a period of elevated industry demand are certainly that would this additional drive and 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.
Speaker 4: In terms of specific efforts to grow and diversify our revenue stream 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 the National Grocery.
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.
Speaker 4: We're excited to commercialize this new product with surge in a growing market.
Cited commercialize this new product with services in a growing market.
With needed a desirable features like multi temperature zones maximize cargo capacity an easier driver access.
Speaker 4: With needed and to get our features like multi-temperature zones, maximized cargo capacity, and EZR driver X.
Additionally, the use of Epo nex, formerly known as molded structural composites allows our customers improved operating efficiency, while also reducing environmental impact with 25% to 30% greater thermal efficiency as well as reduce truck body weight.
Speaker 4: Additionally, the use of HECO next, formerly known as multi-structural deposits, allows our customers improved operating efficiency while also reducing environmental impact with 25 to 30% greater thermal efficiency, as well as reduced truck body weight.
Speaker 4: While our initial builds are on internal combustion engine chassis, we expect this truck body to translate very well to electric chassis application.
While our initial builds our own internal combustion engine chassis. We expect this truck body to translate very well to electric chassis applications.
Additionally, during the fourth quarter, we announced the development kickoff of our next generation walk in van that further broaden our product offerings in support of efficient delivery of items too.
Speaker 4: Additionally, during the fourth quarter, we announced the development kickoff of the next generation walk-in van, the further broadener product offerings and supportive efficient delivery of items to the home. We have engaged the leading mobility engineering firm, EDA, to utilize our combined expertise to optimize the product design and continue to leverage wallbashes, material technology expertise, offer a lightweight design. We're looking forward to moving from development to validation and on the key customer testing later this year.
We are engaged with leading mobility engineering firm ebay to utilize our combined expertise to optimize the product design and continue to elaborate wabash's material technology expertise to offer a lightweight design, we're looking forward to moving from development to validation and all the key customer testing later this year.
Additionally, we have partnered with Purdue University to enhance our speed to market with these other projects. We are excited to leverage produced expertise in areas, including advanced engineering material Sciences, and electrification to help bring solutions to market faster with the transportation logistics and distribution industries. It is clear that the refinement of our.
Speaker 4: Additionally, we have partnered with Purdue University to enhance our speed in the market with these other projects. We are excited to leverage Purdue's expertise scenarios, including advanced engineering, material sciences, and electrification to help bring solutions to market faster for the transportation, logistics, and distribution.
Speaker 4: is clear that the refinement of our strategy and vision, the focus on solutions for transportation, logistics, and distribution markets, combined with customer alignment with then our organizational structure, has accelerated our internal rate of change, and folks start developing activities on innovative products and services that will create value for our targeted set of customers.
Strategy and vision to focus on solutions for transportation logistics and distribution markets combined with customer alignment within our organizational structure has accelerated our internal rate of change and focused our development activities on innovative products and services that will create value for our targeted set of customers.
<unk> has always led the industry and product designs that are featured weight reduction as a key customer benefit and in recent years that value proposition has gained increased customer focus as part of environmental impact and carbon reduction strategy.
Speaker 4: Wallbache has always let the industry in product designs that have featured weight reduction as a key customer benefit. And in recent years, that value proposition has gained increased customer focus as part of the environmental impact in carbon reduction strategy.
Our products will continue to extend benefits like weight savings and thermal efficiency as competitive differentiators in a world that is briefly has been increasingly prioritizing ESG initiatives at an accelerated pace.
Speaker 4: as one of the very few public companies among our array of competitors in different product segments. We look at ESG and corporate responsibility as additional opportunities for competitive differentiation. Our cross-frontal 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.
As one of the very few public companies among our array of competitors in different product segments, we still look at ESG and corporate responsibility.
Opportunities for our 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 learn more about our accomplishments in this important area.
One new development I'd like to highlight as well as 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 at other constituencies on these important topics and 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 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 remained at strong levels for carriers throughout peak season, and have continued to remain elevated in 2020 to.
Industry reports showed strength of new trailer order activity during certain months in Q3, and Q4 and orders naturally tailed off as order books have become practically fall 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 vans business is essentially fully booked for 2022, our other transportation solutions products scored higher than normal backlogs, which continues to indicate constructive market demand conditions for 2022.
As we have 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 our 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 plan for 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 was essentially unchanged with a small tweak 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.
Income and earnings per share expansion EBIT at the supply chain shows no improvement as our backlog clearly indicates we have upside to our outlook and supply chain conditions improve.
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 a refreshed brand strategy is the final piece of the puzzle.
With accelerating innovation and product development activities shaped by the changing transportation landscape.
<unk> focus on sustainability I believe Wabash is well positioned to move our industry forward with that.
To provide additional color on both our 2021 financial performance and our 2022 outlook.
Thanks, Brian turning to a review of our quarterly financial results on a consolidated basis fourth quarter revenue was $479 million with new trailer and truck body shipments of 11655 units and 3230 units respectively.
In terms of operating results consolidated gross profit for the quarter was $42 6 million or eight 9% of sales.
On a GAAP basis, the company recorded an operating loss of approximately $19 million.
This result includes a noncash charge for impairment of trade names and trademarks related to the retirement of legacy product brand names.
On a non-GAAP basis adjusting for the noncash impairment operating income was $9 $7 million or 2% of sales during the fourth quarter.
Operating EBITDA for the fourth quarter was $22 8 million or four 8% of sales.
Finally for the quarter GAAP net loss was $25 $3 million.
Or negative <unk> 51 per diluted share on.
On a non-GAAP basis, adjusting for impairment of trade names and trademarks as well as debt transactions costs net income was $3 7 million or <unk> <unk> 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-19 related absenteeism spike towards towards year end in relation to the Omnicom variant as we saw absenteeism rates in late November and December increase well rates experienced during the rest of 2021.
From a segment perspective transportation solutions generated revenue of $443 million and non-GAAP adjusted operating income of $18 million or four 1% of sales.
Parts and services logged revenue up $38 1 million and non-GAAP adjusted operating income of $4 4 million or 11, 6% of sales.
While operating cash outflows of approximately $7 million for the year shows the impact on working capital driven by a 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 of $49 million was right on target and prioritize 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 an issuance of $400 million in senior secured notes respectively.
After repaying our previous senior notes and term loan our improved debt structure results in $3 million of annual interest expense savings that we began to see flow through the flow through during the fourth quarter.
More importantly, these transactions create reasonably priced patient debt structure that allows us to invest in our business and enhances our opportunity to integrate value with a lower cost of capital.
With regard to capital allocation during the fourth quarter, we utilized $21 million for capital investment and spending on our incremental dry van capacity began 12.
$12 million to repurchase shares and paid our quarterly dividend of $4 million.
For the full year, we repurchased about $4 million of shares at an average price of $16 64 per share.
Our capital allocation focus continues to prioritize reinvestment in the business your growth Capex, while also maintaining our dividend and evaluate opportunities for share repurchase alongside of bolt on M&A opportunities.
Moving onto our financial guidance for 2020 to our prior outlook remains largely intact. We've increased our revenue expectation at the midpoint by $50 million to $2 3 billion to reflect our significant backlog, Phil 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 increase versus our prior guidance range already a combination of lower amortization going forward as well as an accompanying increase 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 Brett mentioned, we believe our backlog infers that there is clear upside opportunity to our 2022 financial outlook sugar supply chain improve.
We also believe our parts and service segment will begin charting a path of sustainable growth during 2022.
By prioritizing expansion of recurring revenue.
When excluding sold or discontinued operations parts and services grew revenue and operating income year over year by $27 million and $5 8 million respectively.
I would 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 or 2021 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 Entyvio.
And to be between 10, and 15 cents per share from an EPS perspective.
Operating margin and 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.
I'll now turn the call back to the operator, and we'll open it up for questions.
Thank you at this time I'd like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad, we'll pause for just a moment to compile the Q&A roster and we will take our first question from Felix motion with Raymond James.
Hey, good morning, everybody.
Morning.
Hey, 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.
I'm, just trying to understand I'm going to call. It the incremental $200 million is there a chance that would get booked into 'twenty, two or is that specifically sort of earmarked for.
For 2023 at this point.
Yeah. Thanks, Neil it's I'll take that one so our sales group and commercial organization as a whole has done a really outstanding job of constructing a backlog that gives us a tremendous amount of optionality 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 if it did when it does we have the ability of pulling that backlog into 2022.
Assuming timing allows so that gives us tremendous flexibility. That's why we say there is we've constructed the backlog in a way to allow a constructive upside to be possible and we're working everyday to see if we can make that happen.
Okay got it that's super helpful. And then Brian in the release, you specifically mentioned some of the new pricing initiatives and specifically about pass through arrangements on raw materials.
Can you broadly comment on how that pricing change has been received by your customers.
I just wanted to clarify that.
Is this exclusively on the trailer book our truck bodies also.
Yeah. So.
First off let me say I am exceptionally pleased with how we are executing.
In an inflationary environment as we lead into 2022 I do not have reservations 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 other related price increases so I feel very good.
That it is primarily based where most of the work has been done to date on the <unk> side of the business.
However, we are implementing.
I will call it purposeful variations to that same mindset across the entire business throughout 2022. So we are we are managing well on that front.
Okay helpful. And then just my last one maybe this is better for Mike, but just around the <unk> guidance you.
You mentioned.
There would be some of the 2022 or 2021 backlog that's going into 2022 that is going to be at a negative margin drag is there any way to quantify how much of the <unk> sales is going to be a 2021 backlog pushed into 2022, just trying to kind of understand how we can isolate some of the mix dynamics in it.
And that guidance yes.
Yes.
<unk>.
I would say you could probably look at generally.
The shipment and build Miss that we had in Q4 is really the main piece that pushes into 2022.
It's not a huge percentage of the 2020 to Q1.
Build and ship, but it is going to be a headwind and I remind people that it is always Q1 is always our weakest shipment quarter. So you've got really two factors are going to make Q1 look.
Much lower than what we'll see in Q2 to Q4 that is the shipments are always a little bit lower in Q1, and we have that overhang.
I would say it's.
The build is going to be in the.
5% to 10% range is what got pushed in.
Oliver I'll add a little bit more beyond your question.
Just anticipating others Wouldnt, we think about Q1 as it carries forward not only do you have the I'll call it that.
Thats.
Moderate.
Margin headwind that Mike's talking about.
When we think about Q4 and what was shipped in how we executed on the production front. The omicron reality did create a pretty.
For slow that in the December timeframe, and just as the world in the United States is dealing with it that's continued through really the month of January we are 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.
Not only our most seasonal lowest quarter of the year, but we got a little bit of that headwind leading into it as well there is nothing surprising about that based off of what's going on around the world.
Got it very helpful I'll stop there.
Thank you thanks, everyone.
Next we'll go to Justin long with Stephens.
Thanks, and good morning.
Okay.
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 theres been a 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 <unk>.
Transportation solutions segment actually went down so Brian you may have answered. This question a moment ago with almond crop is that really what drove that discrepancy or is there anything else that was contributing to that.
Yes.
Jeff This is Mike so first of all.
Youre starting to see the ASP.
Push but youll continue to see into 2022, which we talked about that a lot of the Q3 call. We also mentioned that Q4 would be our peak pain quarter of the price cost.
Relationship. So what you really are seeing is youre seeing the price starting to catch up but you still have that extra material cost in Q4 that was a fully 100% price down which we knew was going to happen. In 2021. We believe most of that is behind us in 2022 deals continue to see the ASP increase and the material costs will essentially flatten out.
The best way to think about that also as you mentioned and Brent mentioned Amazon did get us at the in December which was some of the conversion cost, but the majority of that margin Youre seeing compression is an immaterial cost versus price relationship.
A little bit more on the <unk> piece, Mike alluded to the fact that we've been very successful in the last quarter, bringing in additional head count to meet.
Our 2022.
Capacity plan requirements, our supply plan requirements that happened.
And that was very favorable in the context of what the absenteeism rates spiking in December the additional head count that we brought in was able to mitigate that to some degree.
But it did preclude us from building the extra volume that we had planned on getting from that.
All of that adds into the inefficiency and conversion cost.
Matt when you think about the quarter right.
On the bright side to that is that we have labor in place we continue to add that labor to meet the supply plan for all of 2022.
While we're taking a little bit of conversion costs lumps in the near term we are setting the table for full 2022.
Okay that makes sense and that's helpful.
Mike you gave that guidance for the first quarter I was curious if you could give some color on the remainder of the year in terms of the cadence of EPS, and maybe where well where youre expecting to exit the year.
Kind of what's embedded in the guidance one pricing catches up with cost.
Yes.
To see the big step up is going to be from Q1 into Q2.
And.
Again, some of the units that.
We pushed from Q4 to Q1 to the ammo Crown that Brent mentioned for Q1, and the lower shipments is going to be the lowest and you'll see the big step up into Q2, Youll see some moderate increase from there.
And then when you get to Q4, but it's going to be much more much much smoother EPS profile from Q2 to Q4 with a moderate step up and then if your calendar is Q4 into 2023. That's when you can really start to see the EPS power that we'll have in 2023.
Okay and last question I had was just given the re segmentation.
Can you give us some help around gross margins by segment and what's getting baked into the guidance for 2022.
Obviously, youre going to see you're going to see a much larger step up in gross margin.
From 2021, and the transportation solutions business, because thats, where youre getting that's why we have the rail.
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.
The steadiness of that business.
Underneath the Hood I said in my prepared remarks, but it's worth mentioning again is don't forget we divested the extract business last year and we discontinued some.
Onsite.
Their work, we are doing for a customer and both of those are.
If you net those out you see really nice growth into 2021 from 2020 and into 2022, we expect that to continue so I don't expect a lot of margin improvement in that business.
I would expect some pretty nice topline and bottom line growth in the parts and services business.
Great. Thanks for the time.
Thank you Jonathan.
And as a reminder, ladies and gentlemen to ask a question press Star one on your telephone Keypad next we will go to Mike <unk> with D. A Davidson.
Hey, guys good morning.
Good morning, Mike.
So can you tell us goes off.
Are there any unusual one time expenses that have to take place in 2022.
As you rebrand all the other companies.
Under the one Wabash system.
No we took that whole charge in the Q4 financials on a GAAP.
Presentation of the financials for Q4, all of the charges related to the one Wabash and branding changes in Q4 there'll be some minor obviously signage and branding things, but nothing that's material to call out for 2022.
Great.
Maybe we should just go a little deeper on that I was curious about the about the.
The Supreme Brennan changeover as well I mean, that's a pretty big well established company that you bought it.
Curious back in the brand name was really important to that I know you had had an impairment here.
Just tell us about a little bit like boots on the ground what are the steps you're taking to kind of ensure.
The old brand fades out the new brand comes in in a way that doesn't.
Challenge customer brand recognition.
The way customers view.
Those products.
Yes, the spread.
I would say is that when we took on this initiative to understand what was the right direction going forward with how we represent the company.
To all of our stakeholders, we did a significant amount of third party research facilitated by outside partners to make sure that we had real data on what was the truth on the ground.
Cross that stakeholder group.
The feedback has been overwhelming.
That when we think about how the strategy is being executed how we're positioning the company the relative strength of the Wabash brand carries through what it means to bring engineered solutions to the world.
The Wabash brand is what carries now that does not take away necessarily from any of the brands that we've had.
But to make sure that we have a.
<unk> approach.
That matches, how we operate internally how will represent to the customer how we will sell them first to final mile solutions.
The Wabash brand is what tested it was shown to carry across all of that.
So we feel extremely comfortable.
Based on feedback from our largest customers.
That moves the needle that they are enthused as well as our dealer body isn't boost with the direction that we're going so where we anticipated.
Yoko possible pushback, we got the opposite which was embracing of the idea.
Got it that's great color.
I also wanted to ask about.
The new upcoming walk in van product.
That is.
And that's been dominated by only.
Few players over the years, obviously, you're also a big player as well, but not in that category.
Can you give us a little bit more color as to how you intend to compete there as your product being developed with <unk>.
Evs solely in mind will it be an only UV type product.
Do you plan to try and go on to some of the existing IC chassis that are that are out there today.
Let me, let me answer the second part of the question first so the design.
Vacation that we're working on would be compatible with all engine types or power types going forward that was a key design criteria as we look to meet our customers' expectations.
Yes, there is a limited amount.
Call it 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 and we sold them a full portfolio. They are asking us to get into this and provide a superior solution than what's being presented today to do it differently to deal with different materials and to do it with a different mindset. This is our.
Entry into that space is very.
So let's stick in the way that we're approaching it.
And so you can think about our portfolio strategy with customers. Those are the most strategically aligned with that.
That we are giving them very specific solutions the pull through to do the initial conversion of product once we build a platform.
<unk> design.
Capability will then look at how we can broaden that to a larger market segment.
But we have our hands full just meeting the expectations of the large customers that are asking us to do something different.
Got it got it well said thank you very much.
Okay. Thanks, Mike.
Well there are no further questions at this time I'll now turn the call back over to Ryan Reed for any additional or closing remarks. Thanks.
Thanks, David and thanks, everyone for joining us today, we 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.
Okay.
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