Q3 2024 Wabash National Corp Earnings Call
Julianne: Thank you for standing by my name is Julianne and I will be your conference operator today. At this time, I would like to welcome everyone to the Wabash 3rd Quarter 2020 for earnings call.
Julianne: All lines have been placed on mute to prevent any background noise.
Julianne: and the speaker's remarks. There will be a question and answer session.
Julianne: If you would like to ask a question during this time, simply press star, followed by the number one on your telephone keypad.
Julianne: If you would like to withdraw your question, press star one again. Thank you.
Speaker Change: I would now like to turn the conference over to Ryan Reed. You may begin.
Ryan Reed: Thank you in good morning everyone. We appreciate you joining us on this call. With me today, our Brent Yeagy, President and Chief Executive Officer, Pat Tethlin, Chief Financial Officer and Mike Pettit, Chief Growth Officer.
Ryan Reed: Before we get started, we built this call as being recorded. I'd also like to point out that our earnings release is wide presentation and supplemented today's call. And any non-gap reconciliation are all available at IR.1-wabash.com.
Ryan Reed: Please report a slide to in our early in-stack for the company's safe Harvard disclosure addressing forward looking statements.
Speaker Change: will hand it off now to Brent.
Brent Yeagy: Thanks, Ryan. Good afternoon, everyone. And thank you for joining us. Let's start out by level setting that are adjusted third quarter financial results largely aligned with their prior expectations.
Brent Yeagy: Before we get into the details on the quarter, I'd like to provide some strategic updates to address how we see the paths of our growth continuing to unfold. To set the stage, I want to step back and reflect on the last few years of returning to change the growth and performance trajectory of law-bash.
Brent Yeagy: Hi, Liding, how we've reached our current position and where we see the company head.
Brent Yeagy: When I assume the role to you, our strategy becoming a more diverse, fight industrial was no longer serving as well.
Brent Yeagy: While the fundamental rationale behind it to address drive-and-circuit quality was found, especially after the challenge of the 2009 financial crisis, it has become clear that some of the most promising megatrims were happening with our core markets of transportation, logistics and distribution.
Brent Yeagy: We need to re-thoke as closer to home.
Brent Yeagy: expanding our equipment portfolio, the compliment our core drive-and-product line, created greater value and an opportunity for deeper relationships with our customers.
Brent Yeagy: and Boy Capilies on that potential. The pandemic provided an opportunity to quickly restructure both our organization and to go to market strategy with a ladder shift to a product centric model to a more customer centric one where we can expand the definition of how value you could be created.
Brent Yeagy: By three-lining access, the multiple equipment types through a single commercial one contact, we created significant value for our customers.
Brent Yeagy: The shift has brought us closer to our customers enabling us to jointly plan for the future and foster innovation. It also gave us further insight into what their deeper problems and business needs were beyond the products we make in the solutions we provide in time.
Brent Yeagy: We are now able to position our total portfolio, transportation solutions as a more resilient set of revenue streams.
Brent Yeagy: The value of a deeper customer relationship gives us reasons engaged more strategically with our supply chain to enhance the manner which business can be conducted, allowing the more resilient responsiveness and willingness to collectively serve the customer.
Brent Yeagy: Suppliers recognize wall vations efforts to improve the industry status quo and are aligning with us. Good mining strength to provide even greater benefits to our customers, particularly within the next in the three-up cycle. Our reimagined manufacturing capacity will also be a key asset in this regard.
Brent Yeagy: Our increased resiliency and improved responsiveness will allow us to outperform as compared to previous cyclic up turns.
Brent Yeagy: One major area strategic focus has been our part in service initiative.
Brent Yeagy: For years, this opportunity was overlooked and our previous drive for diversification. We now recognize that growing this tire margin, recurring revenue business, is a core element to balancing the cyclic nature of the man for transportation equipment.
Brent Yeagy: We're excited about the potential in parts and surfaces, not just as a revenue driver, but as a critical support mechanism to maximize the life cycle of our equipment.
Brent Yeagy: We continue to drive the Corrospects in this earth journey and are increasingly excited about unmet needs during covering Durran Hanskussman relationships.
Brent Yeagy: Our partnership with HDI and Burnway Group, our instrumental in this growth. The Waldeys Park joint venture with HDI rapidly established extensive distribution capabilities, providing our dealer network and fleet customers with efficient access to the raw portfolio of aftermarket parts.
Brent Yeagy: Meanwhile, our Wayne J.V. with the Fernway Group is enhancing our digital capabilities, providing us to keep the ability of engaging our customers differently and engaging in solutions to problems in different ways.
Brent Yeagy: The ability to revolutionize power dealers and our suppliers and customers experience the wall-dash brand through the solutions we provide and the manner which we provide it within the vast transportation which is the plan scheme.
Brent Yeagy: We had positioned the company well for this next chapter where the continued investment and the development capabilities were increased to scale profitable growth for the company.
Brent Yeagy: The further refine our focus, we made some key organizational changes. My Pettit formerly CFO has been both a thought leader and interned catalyst for our Parks and Service
Brent Yeagy: Recognizing that we needed to free him from the day-to-day CFO responsibilities to allow him to fully focus on the mission to accelerate the scale of our achievements. Michael now served as Chief Robb Officer, overseeing person services, digital enablement and engineering.
Brent Yeagy: Collectively, these areas of the business will be leveraging a manner to bring our purpose of changing how the world reaches you to life at scale.
Speaker Change: Let me turn it all over to Mike for his first update as he broke off Sir. Sawyer's Mike.
Mike: Thanks, Brent. Before diving and I'd like to mention that while I genuinely enjoyed my time at CFO, I'm excited about my new position and that focus is to provide some more consistently drive growth through the organization.
Mike: On the topic of growth, one of the ways law-vastions leading within the transportation logistics and distribution industries is by leveraging our ecosystem to navigate shifts and see the merging opportunities.
Mike: and Mark and Reed are in transportation equipment, while that's just that you need products from the collaborate with suppliers, dealers, carriers, shipers, and technology providers.
Mike: These partnerships allow us to tackle complex challenges and no single entity could solve along.
Mike: While we're still early in this process, and that's how we're rehearsing our second gathering of key-o ecosystem partners at our mate conference. Bring in together over 310Ds.
Mike: This gathering really demonstrates our commitment to transforming what was once viewed as a basic supply chain into a collaborative ecosystem capable of solving broader challenges together.
Mike: There are already a couple of proof points that I'd like to highlight. First, we recently signed in 10 years to keep it supply of stimulus, Jill Van Innes, a leading North American steel producer.
Mike: This is Raymond Strancers, our supply chain, ensuring priority access to clinical components like steel coils and cross numbers during periods of high demand. This will help us meet customer needs even during times when other manufacturers may face constraints.
Mike: This agreement was filled with dynamics as the similar ones with feedback, Ryerson, or Rockling Floyd, positioned Wavash as a leader and supply, reliability and operational excellence.
Mike: Second, we are trailers in the service partnership with Koliak. A leader in autonomous truck technology is another significant step forward.
Mike: Our test program provides code to equity, flexible solution, offering access to a fleet of reliable trailer via subscription that includes maintenance, repair, and managed care support.
Mike: This will ask Cody Act to focus on developing their autonomous technology while while their channels will ensure that the trailer utilization, uptime management and maintenance through our managed care services.
Mike: This brings together a unique technology partner and Huawei's dealer service capabilities supplemented by a growing managed care network with Huawei acting as a connected tissue to create value for all parties.
Mike: Our team is excited by these partnerships and we are just getting started. We have been laying the foundation for the role of in 2024 that we believe will prove to be transformative for Wavash the next couple of years as it was forward to continuing to create these opportunities by leveraging our position in the transportation, logistics, and distribution ecosystem.
Speaker Change: What's that on end of Call Back Over's Run? Thanks, Mike. Many of you in a skull know Mike as passionate for Wal-Bash and the strategic direction we are following.
Speaker Change: We are lucky to have a leader like him, drive our strategic road forward and we look forward to saying him drive in this new road.
Speaker Change: I'm Nick Leaks-Side at Propac Castle and take the duties of CFO and we're directly with Mike and I to the Chief Arts for Teasley Golds.
Speaker Change: After spending 15 years in Honeywell in various financial roles, Pat joined Wallvasion and spread her out through several leadership positions, most recently as BP at finance. I've worked directly with Pat since he joined Wallvasion 2017, and I know that he has what we need as we move into the next chapter of the company.
Speaker Change: Moving on to our third quarter, you'll see a significant divergence between our gap and non-dap financial results due to the impact of a September 2024 jury verdict.
Speaker Change: As we previously shared, a St. Louis-Journey found wall-bash liable for $12 million in compensatory damages and $450 million in tune into damages in connection with a 2019 motor vehicle act to them.
Speaker Change: This incident involved a passenger vehicle traveling in a high speed with an unobstretched view that struck the back of a nearly stop 2004 wall-based trailer. While we looked at non-cash sharks during the quarter-related to this project, we believe the damages are normally high and the verdict is not supported by the facts or the law.
Speaker Change: A long other thing, and despite precedent to the contrary, the jury was prevented from hearing critical evidence in the case, including that the driver's blood out the whole level was over a little woman at the time of the accident, and any of the driver, nor the passenger, was wearing a seat belt, was also kept from the jury.
Speaker Change: There will be post-judgment proceedings people with a court enters a final judgment to the purpose of the field. But in the meantime, we are working closely with our external legal counsel accounting and insurance firms and we will be evaluating all available legal options. We will continue to share updates as appropriate.
Speaker Change: While as continues, Stanford will be behind the quality of safety of our products. This will not stop us from continuing to challenge ourselves to create new and innovative products and do what we can to contribute to safer roads.
Speaker Change: Turning to our backlog in financial outlook, total looking at the end of the third quarter, total just over $1 billion. This compares to about $1.3 billion at the end of the Q2.
Speaker Change: As we've expected, the dry van, large deal season is pushing to the latter stages of multiple seasonality in 2024 and we anticipate the flow of new orders to increase in Q4 and into early Q1 of 2025.
Speaker Change: with the Drive-in picture for 2025, yet to be fully developed. We feel that's prudent to adjust capacity in our bands' facility. In order to ensure we are optimizing our current labor structure for now, and to what we expect to mean, immediate term improvement.
Speaker Change: In the areas such as truck bodies, we're buffly increasing incrementally to prepare for a positive of 2025.
Speaker Change: Our partner service revenue streams continue to add capability and we will have both a broader and deeper set of offerings as we enter into the new year and continue our march, the higher levels of growth in this key area for business.
Speaker Change: For now, the renouncing of our Q4 Drive-and-Demanding capacity necessitates that we will our full-year revenue outlook to roughly $1.95 billion in an EPS to approximately $1.25.
Speaker Change: While it's too early to quantify expectations for 2020-25, I do believe our 2025 EPS performance can exceed that of 2024.
Speaker Change: Will it force providing more detail on our Q4 call?
Speaker Change: Finally, I'd like to touch on capital augitation priorities as we move forward.
Speaker Change: Reiterating at the significant legal charge in the third quarter was not cash. We remain well positioned to invest in the company strategic growth initiatives with a focus on funding part and service strength.
Speaker Change: We believe our current dividend is competitive with our peer stat and we expect to continue evaluating between potential returns we can generate the repurchases compared to M&A.
Speaker Change: In closing, we believe by adjusting our operations to a line with the current market reality, we're optimizing our future earnings power.
Speaker Change: We have made significant changes throughout the company to increase wild-assure customer diet creation, and we believe the company is well positioned to grow our parts and services revenue streams, which will complement the transportation solution side of our portfolio, other further enhance our dieting proposition to customers, and our financial performance to shareholders.
Speaker Change: Our ecosystem approach to grow value is showing early signs of success and it accompanies new organizational structure designed to accelerate and create focus on how we build our collective future. With that, I'll hand it over to Pat for his comments.
Pat Tethlin: Thanks Brent and good afternoon everyone. I'm excited to be here and honor to step into the role of CFO. Michael's been an excellent mentor and I look forward to building on his accomplishments.
Pat Tethlin: As we continue transforming law vash into a visionary leader in connected solutions for the transportation logistics and distribution industries. I'm eager to work with all our stakeholders.
Pat Tethlin: Beginning with the review of our quarterly financial results, in the third quarter, our consolidated revenue was 464 million.
Pat Tethlin: In the quarter we ship approximately 7,585 new trailers and 3,630 truck bodies.
Pat Tethlin: Gross margin was 12.1% of sales during the quarter while adjusted operating margin came in a 3.7%
Pat Tethlin: In the third quarter, we generated a just-it-edit of 34 million or 7.4% of sales.
Pat Tethlin: Finally, for the quarter, a Justin Net income attributable to common stockholders was 8.6 million or 19 cents per diluted share.
Pat Tethlin: A Justice EPS generation for the quarter was slightly short of our prior quarterly outlook range. However, I'd like to mention that we did incur higher than expected legal expense of 1.4 million or 2 cents of EPS in connection with the St. Louis Legal Verget.
Pat Tethlin: We did not include these costs and they not have to have adjustments made for Q3 as they may be recurring while we move forward to find an acceptable resolution to the matter.
Pat Tethlin: Moving on to our reporting segments, Transportation Solutions generated revenue of 416 million and operating income of 29 million.
Pat Tethlin: Parks and Services generated revenue of 52 million and operating income of 8.3 million.
Pat Tethlin: Year-to-date operating cash generation was 36 million. With sequential working capital trends in Q3 being incrementally helpful to operating cash.
Pat Tethlin: Ragharding our balance sheet, our liquidity which comprises both cash and available borrowings was 405 million as of September 30.
Pat Tethlin: We've finished Q3 with net depth leverage ratio of 1.5 times.
Pat Tethlin: On capital allocation, during the third quarter, we direct $15 million to traditional capital.
Pat Tethlin: [inaudible]
Pat Tethlin: Our capital allocation focus continues to prioritize capital expenditure above and beyond our annual maintenance capex spend of $20 to $25 million in order to support our organic growth initiatives.
Speaker Change: As Brent mentioned, we are committed to maintaining our dividends and we will continue to evaluate opportunities for share repurchase alongside of bolt-on M&A.
Speaker Change: Moving on to our guidance for 2024, we are reducing our revenue outlook to approximately $1.95 billion and EPS to roughly $1.25.
Speaker Change: From previous midpoints, this represents a reduction of 150 million in revenue and 30 cents of EPS.
Speaker Change: The most significant changes from our prior outlook come from reduced revenue stemming from level loading of line rates, as well as some step-up in G&A related to increased legal expenses as our team works to address the aforementioned jury verdict.
Speaker Change: Our updated guidance implies fourth quarter revenue of $425 million to $450 million and modestly positive Q4 EPS.
Speaker Change: Moving on to Capital Deployment Expectations for 2024.
Speaker Change: We anticipate traditional capital investment to be between $70 million and $80 million in 2024 as a result of planned expenditures to support our strategic growth initiatives.
Speaker Change: We also expect to continue with a modest level of investment in CapEx that will be immediately revenue generating through our Trailers-as-a-Service program.
Speaker Change: While we expect to have a more complete picture of 2025 by our Q4 call, we continue to believe that we have opportunity to generate stronger adjusted financial performance in 2025 relative to 2024.
Speaker Change: As the dry van market troughs and we achieve improving performance from our truck body, tank trailer, and parts and services businesses, we believe 2025 adjusted EPS can eclipse that of 2024.
Speaker Change: I'll now turn the call back to the operator and we'll open it up for questions.
Speaker Change: Michael Shlisky, Brent Yeagy,
Speaker Change: Thank you. The floor is now open for questions. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue.
Speaker Change: If you would like to withdraw your question, simply press star 1 again.
Speaker Change: If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question.
Speaker Change: Again, press star 1 to join the queue.
Speaker Change: And your first question comes from the line of Jeff Kaufman with Vertical Research. Please go ahead.
Jeff Kaufman: Thank you very much and congratulations in a tough environment.
Jeff Kaufman: I want to take a look at the bigger picture, kind of. We know the markets.
Jeff Kaufman: are slowing down right now because of the pressure on industry P&L that's out there. We know that trailers are getting hurt a little harder than trucks just because fleets are nervous about 2070 PA and they're holding on to their truck purchasing commitments for the year.
Jeff Kaufman: As you talk to your customers about 2025, you know, on a lot of the truckload earnings calls I've heard, companies are saying, hey, we may...
Jeff Kaufman: spent less than $25 than we are in $24. What have your customers told you so far about their $25 intentions versus their $24 intentions? You know, Act Research just
Jeff Kaufman: reduce their their forecast for 25 below 24. What parts of your customer base are seeing the greatest pressure versus what parts of your customer base are actually holding in pretty well despite the environment?
Speaker Change: Thanks, Jeff.
Speaker Change: Complicated question, complicated answer. What in the past would be much more enabled to give very
Speaker Change: discreet answers relative to the segments.
Speaker Change: that make up our customers.
Speaker Change: The way I would explain it today is that it is varied amongst customers regardless of segment. So, while there, I'll use LTL, while there is relative
Speaker Change: Thank you.
Speaker Change: a more relative robust environment for the LTL players.
Speaker Change: We have some LTL players that are holding the level of volume.
Speaker Change: that they gave in 2024. We have other customers that are signaling, waiting on the sidelines, at least for the time being, to figure out what the market's going to do. And we have some that are having conversations about how they would add additional units.
Speaker Change: throughout the year if the market warrants. So it's just in the LTL, it's a varied landscape.
Speaker Change: and I would say the truck load is very similar.
Speaker Change: We have
Speaker Change: Small and medium-sized players are still in the same position that they were really at, you know, in the first and second quarter of 2025 That has not changed Which all goes into ACT and FTR's revised numbers
Speaker Change: There are some larger players that are maintaining their level of buy, where they have a more rigid-slash-purposeful replacement cycle, and they do not want to get behind like they have in the past.
Speaker Change: and there are some that are either again waiting on the sidelines or holding off to assign more clarity to their purchasing decision which is why we see it pushing in the cycle.
Speaker Change: It is a very customer-independent
Speaker Change: decision-making process right now, not a broad-brush application of what the market is or isn't.
Speaker Change: Thank you for that answer. If I can come at it a different way, more from the company side. I think the forecast this year, depending on who you talk to, is for about 235,000 units this year. If you look at the production forecast,
Speaker Change: for Thank you.
Speaker Change: on a quarterly basis, that may dip all the way down to kind of 180,000 unit annualized rate over the winter months, and then maybe bounce back to kind of a 230 or 240 in the summer months. How do you manage for that kind of volatility? And then would the...
Speaker Change: Pricing model having changed, where you made that switch a couple years ago, should we be thinking about operating margins moving with volume differently than they have in the past?
Speaker Change: and Michael Pettit. Thank you. Thank you.
Speaker Change: That's a multi-part answer. Let me start on the first part and then I'll let others chime in.
Speaker Change: First off, I think the ACT-FTR estimates for 2025 are absolutely in the ballpark for the world that we're experiencing right now.
Speaker Change: I'll go a little further with the question than maybe what you asked. The pricing, from a pricing standpoint, the pricing that we are...
Speaker Change: that we have experienced, just to round out our drive-in backlog for 2024.
Speaker Change: we feel is indicative of how we will start out 2025. So we feel like that's a relatively clear data point that we can bridge off of and probably the street can bridge off of.
Speaker Change: from a dynamic nature.
Speaker Change: Jeff, you know, we've been doing this for 20 plus years, so in the world of dynamics, this isn't as bad as what we've experienced in the past, so well within our capability of managing, and we manage it better today than we ever have.
Speaker Change: but with the capacity reductions that we allude to with revised guidance that we gave are the moves that we're making right now to right size to create a better call it net margin profile over the next six months.
Speaker Change: with an eye on how do you preserve a level of dynamic capability to obviously take advantage of whatever the market gives us.
Speaker Change: So that's what I would say from a narrative qualitative standpoint, and I'll look to Pat if there's any other color. Yeah, Brent hit it with the pricing where we expect the levels that we're at right now to flow into 2025.
Speaker Change: They answer your question specifically about operating margins now relative to what we've seen in the past.
Speaker Change: So past trough times, we would expect to see an improvement there, given what we've been able to do with pricing.
Pat Tethlin: So hopefully that answers your question, Jeff. Yeah, and what I would add is that you really have to integrate in the improved position of where we sat with our truck body business. You have to add in the additional parts and service on top of what is a
Speaker Change: better starting position at this point in the trough from a dry-dam perspective compared to any other time we've had in our history. We have a more diverse set of revenue streams than we've ever had during a trough environmental crisis, which will help performance in a down year.
Speaker Change: Thank you very much.
Speaker Change: Thank you. Bye.
Speaker Change: Your next question comes from the line of Mike Shlisky with D.A. Davidson. Please go ahead.
Speaker Change: Yes, hi, good afternoon, and thank you for taking my questions.
Speaker Change: May I follow up on that? Hey, just follow up on that last answer you gave, if you've got volumes that are flattened a little bit down next year on the trailer side, does the mix change, not as you've ramped up your new facility, does the mix change between what you're producing you're new and you're old and is there a margin tailwind just as you may have learning as that's been open for a year and you've gotten
Speaker Change: your processes together. Is there any kind of positive there for 2025?
Speaker Change: Again, complicated question relative to the market.
Speaker Change: First off, I would say that Long Bash has the ability of-
Speaker Change: I would say being in a better position relative to the demand that we generate in 2025, even with FLAC industry levels from 24 to 25. So we will look to capitalize on that and we believe we can do that with the pricing that we've got.
Speaker Change: The mix that you tend to get, or just your absolute level of volume by mix, has a limiting effect on how you utilize your assets most effectively in this type of environment.
Speaker Change: So we would not expect to necessarily get the full effect.
Speaker Change: of the new capital, but we will get a level of positive impact by having it up and running, and it should be running at a full purchase volume throughout 2025.
Speaker Change: So we'll see a full year contribution of that, which should be helpful.
Speaker Change: and then we are actively working as we looked at kind of outstrip or not outstrip but to outperform the demand environment. We are specifically looking and trying to tailor that demand to fit where we can most effectively build it.
Speaker Change: and Michael Pettit. Thank you. Thank you.
Speaker Change: Okay, okay.
Speaker Change: Makes sense. And I hopped on a little bit late, so if our next two questions are having to be asked and answered, please just tell me to talk to you later on it. One asked about the parts and service business. I was a little bit surprised you didn't see.
Speaker Change: substantial growth in that business given your effort that you've made. You rolled out the new portal, I think, over the last few months.
Speaker Change: I guess I'd like to just get a feel for whether your efforts are bearing fruits and all we're seeing is just the effect of just a sluggish market broadly, but your efforts, we feel confident that you'll see some growth there over the next few quarters.
Speaker Change: Yeah, and on the scripted aspect of the call, we've alluded to the fact that we are very confident that the foundational elements that we have put in place, plus what is coming online.
Speaker Change: are what has come online in the last few months and what will be coming online in the next months after that give us a great position relative to 24 going into 25.
Speaker Change: The relative depth, not really depth, but I would just say more sluggish performance, right? Still grew.
Speaker Change: when you think about where we were.
Speaker Change: It's a tough market out there at this moment, and we're not immune to that.
Speaker Change: Parts and surfaces are not immune from the cyclic demand characteristics of a market like this.
Speaker Change: They are absolutely more resilient than most of our revenue streams, and I think that's showing in our numbers.
Speaker Change: When customers are trying to figure out one quarter to the next, is it going to get better or worse, that makes for delayed buying decisions and incomplete buying decisions and maybe not optimal.
Speaker Change: Just stability, regardless of the level, will help our parts and service business.
Speaker Change: Yeah, I think it's important to remember too, Mike, there's a lot of different revenue streams that roll up in a bars and services and.
Speaker Change: A lot of what you alluded to, we're seeing some nice growth and progress in, but we do sell some into the OE space from component parts for the Wabash. You can actually see that in our
Speaker Change: and our press release where you'll see some weakness in some of those parts, as Brent mentioned. The initiative itself is much more resilient than the base business, you can see that. It's providing the stability that we thought it would, but it still does operate within the overall freight landscape.
Speaker Change: have been a lot of thoughts on this issue. Yeah, so I guess I'd even be more specific. The retail side of our parts and service.
Speaker Change: Pretty good, pretty happy with. What we directly provide in terms of part components that are directly consumed, which are directly related to OEM demand, they're in the same place the rest of our business is in.
Speaker Change: Yep.
Speaker Change: Okay, got it, got it.
Speaker Change: Also, maybe my last question, I also appreciate your commentary that there's a good chance for growth in earnings next year, even if there's no tremendous growth in the dry van business.
Speaker Change: But you alluded to also, you know, there have been some reductions to the drive-in forecast, and who knows, there could be more to come. It could be the other direction, but we could see an additional step downward. I'm just curious, can you maybe like maybe ballpark for us?
Speaker Change: What is the max amount that maybe the broader trailer market can be down for Wabash to still have a flat to up year in earnings in 2020?
Speaker Change: Thanks a lot. Bye. Bye.
Speaker Change: I'm not sure. I think that would be going beyond our ability right now to give that type of bottom floor guidance. I would be hesitant to do that as I said here right now.
Speaker Change: There's absolutely room for that to occur, but I do not necessarily, there's a lot of factors that integrate in answering that question. I would say we would expect to see growth in parts and services, we'd expect to see growth in truck body, and so that would offset some softness in drive-ins.
Speaker Change: and I'll break it down to specific.
Speaker Change: Thank you.
Speaker Change: and many more. Thank you. Thank you.
Speaker Change: Okay, that's totally fair. I appreciate the answers. I'll pass it along.
Speaker Change: Thanks, Mike.
Speaker Change: That concludes our Q&A session. I will now turn the conference back over to Ryan Reed for closing remarks.
Ryan Reed: Thank you very much and thanks everyone for joining us today. We look forward to following up during the quarter. Have a great day.
Speaker Change: That concludes today's call. Thank you for joining. You may now disconnect.