Good day and thank you for standing-by. Welcome to Wabash National Corporation Third Quarter 2021 Earnings Call. [Operator Instructions] I would like to hand the call over to your speaker today, Mr. Ryan Reed. Please go ahead..

Thank you. Good morning everyone, thanks for joining us on this call. With me today are Brent Yeagy, President and Chief Executive Officer; and Mike Pettit, Chief Financial Officer. 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 ir.wabashnational.com. Please refer to Slide 2 on our earnings deck for the Company’s Safe Harbor disclosure addressing forward-looking statements. I’ll now hand it off to Brent..

Thank you, Ryan. Good morning, everyone and thank you for joining us today. We have a number of exciting updates to share with you.

Upon becoming CEO, our team began this journey of repositioning Wabash as an innovation leader of engineering solutions for the transportation, logistics and distribution markets with a unifying purpose of changing how the world reaches you.

We have made deliberate organizational structural changes over the last few years that further enable and accelerate the deployment of our strategy.

First with portfolio, our first to final mile equipment, which positions us to have the most complete set of solutions for our customers as they respond to changing logistics environments, primarily driven by the growth of e-commerce.

Second, we implemented the Wabash management system, a lean-based and enterprise focused process development effort that drives breakthrough and scalable business capabilities. Lastly, we introduced the One Wabash approach to focus all aspects of our business, our processes and our people to create and deliver value to our customers.

These significant advances to our company, structure and culture have been made with the goal of enhancing collaboration, innovation, and customer centricity across the enterprise.

We now go-to-market as One Wabash, we provide our customers with an improved experience as they continue to increase purchasing from across our product and service portfolio.

Our innovation, product development and manufacturing capabilities from across all businesses are overseen by one centralized team, which enables our talent to focus on solving the most pressing needs for our customers, focusing on deployment of resources, while driving the highest levels of innovation within our markets.

This structure enables the Wabash management system, the foundation of how we do things to drive connected thinking, problem solving and alignment, so that we can create breakthroughs and an increasingly rapid pace.

These changes have not only enabled a better customer experience, but also allowed Wabash to be more productive, as evidenced by our $20 million of structural cost efficiencies achieved during 2020. This enhanced platform for growth positions Wabash to seize the opportunities created by an increasingly disruptive logistics landscape.

The Wabash management system has also enabled the company to focus on the growing opportunities within the transportation, logistics and distribution markets. Our team has worked hard to align our portfolio businesses with the new strategy and as a result, we have adapted three non-core businesses, Garsite, Beall and Extract.

These decisions all follow the principles of our system, such as the sharing resources are focused on the deployment of the strategy. Powerful redeployment capital and focus is critical to our success.

The outstanding efforts of our extended leadership team and all of our employees to accept and drive change has received strategically reposition Wabash to execute the next phase of our growth strategy.

Cold Chain, the growth in e-commerce and parts and services offer numerous secular growth opportunities within the transportation logistics and distribution markets. And we intend to leverage our people, our technologies and our existing and growing capabilities in order to faster profitable growth in these attractive markets.

Our Cold Chain initiative leverages new technologies to add value within the rapidly growing refrigerated transportation and logistics space. The e-commerce space has been experiencing dynamic growth and our product portfolios expanding to better serve that market from First to Final Mile.

And our parts and service platform initiative is one where we are excited to build upon existing revenue streams target growth of higher margin, more recurrent sales as we deliver to our customers changing needs. We’ll deliver on this growth from a market leadership position while continuing to innovate and deliver industry leading customer service.

The opportunities for profitable growth over the next decade had never been as significant in the company’s history. And Wabash is positioned to seize this moment. This moment is special. Transportation, logistics and distribution markets are going through a momentous transition as they adapt to a compilation of forces.

We see a different future reality than our competition in a context of social, technological and logistics changes, and we’ve chosen to go down a substantially different pattern to reshape the industry and pull that inter forward for our customers.

It is time to be bold, and send the message to all of our stakeholders that we choose to take the next step forward and our maturity as a company, as a solution provider, and as part of a greater contributor to the sustainability and social awakening of the world.

The decision that dropped National from our name, while on the surface may seem insignificant, is in fact a powerful change and symbolic from significant strategic changes that we’ve made as One Wabash and we’ll continue to make on our growth journey.

We’re redefining and reimagining our identity with customers, dealers, suppliers, employees, and shareholders. Wabash has become a more dynamic place to work, we are reshaped to grow beyond our traditional markets. And we have a visionary mindset and the capacity to prosper in a changing world.

So today, we are announcing our name change, and in the near-future, we will outline our plan to adapt our brand strategy to reflect our vision of the future. In addition to changing our identity, we are changing our segment reporting structure to align with how we operate the business and how we go-to-market.

Given we now have one face to the customer for our First to Final Mile portfolio of equipment will now have two reportable segments. The first new segment transportation solutions comprises advance platforms, tank trailers and truck bodies, and accounts for about 90% of our year-to-date sales.

We continue to provide disclosure of new trailer unit shipment volumes, and we have disclosure on unit shipment volumes for truck bodies provide visibility to what we anticipate will be a strong growth trajectory for that business going forward.

The second new segment is parts and services, a higher margin more repeatable business that is poised to benefit from a changing logistics landscape, new and emerging customer needs and the rise of the digital marketplace.

While we currently generate a small portion of our company’s total revenue from parts and service businesses, we appreciate the cyclicality dampening effects, and the margin uplift that parts and surfaces can create OEMs.

As such, we have shifted significant talent to lead our parts and service team and they’re focused on executing aggressive plans that now underpin our growth initiatives in the space.

Aftermarket parts, repair and maintenance services and outfitting as well as equipment services all present compelling opportunities for revenue growth and margin expansion.

We expect parts and services to benefit from our planned capital allocation activities to drive both organic and inorganic growth enabled by significant free cash flow generation by our transportation solution segment.

With a matured strategic deployment process is one of our many new capabilities installed under the Wabash management system, this will be an area of extreme focus and will benefit from our enhanced ability to create scalable and profitable growth in both OEM and aftermarket parts focus service and update offerings as well as other service offerings.

Our new segmentation structure reflects our enhanced focus on new growth opportunities, as well as lines how we discuss the business with how we operate the business. This will create enhanced transparency, and a more simplified discussion of how and where value is created at Wabash for our employees, our customers and our shareholders.

I will now discuss our plans shifting capacity from traditional refrigerated vans to dry vans and the scale growth of our composite refrigerated products which includes load structural composite technology. I am pleased to report that our progress remains on track for additional drive and production that began in early 2023.

As we discussed these capacity changes with the investment community over the last quarter, I’d like to revisit a few points that I believe are helpful in explaining our rationale for these changes and the forthcoming benefits.

Going to market as One Wabash allows a portfolio selling approach that leverages the unrivaled breadth of our products and capabilities to meet this new customer demand more fully for our flagship drive-end product is tremendously important in supporting our portfolio selling approach.

Additionally, our enhanced dry van capacity will allow us to more adequately supply products for Wabash exclusive and industry leading dealer network. This added capacity is also necessary to supply logistics market that continues to drive changes in the way trailers are utilized.

Drop and hook is a strategy carriers use to maximize drivers time on the road. Driver shortages are a persistent problem, but have become more severe since 2020 with little clarity on how or when the situation will materially improve.

Overall, our customers incremental economics of adding a trailer to a tractor have meaningfully increased and represent a compelling value proposition in the marketplace. Additionally, incremental truck demand for dry van trailers is being generated by customers that did not consume trailers 5 to 10 years ago.

Private fleets and freight brokers are building trailer pools to ensure consistent access to capacity and more effectively leverage power only capacity. Given our efforts to grow, drive and production, we have also planned several steps ahead to ensure stability of component supply.

As one example, our management team has spent time with our supply partners at Hydro, a global leader in aluminum extrusions, which have historically been in high demand during times of elevated trailer industry buildings.

The Hydro team appreciates the vision of Wabash’s working to bring to life and Hydro has agreed to be a key supplier for Wabash over the life of a 10-year supply agreement, which is a meaningful development increasing supply certainly for both our existing and new dry van capacity.

When considering the differentiation, facilitated by our industry leading lightweight panel technology, we believe this capacity expansion creates incredible long-term opportunity for Wabash.

We also remain on track with our plans to scale our innovative molded structural composite technology within refrigerated vans, truck bodies and other transportation logistics and distribution related products.

We believe we have a unique technology and operational capability that has the ability to disrupt the broad Cold Chain product market, as well as change operating models for carriers and shippers.

These composite technologies facilitate improved operating efficiency for our customers, changes the model of asset usage of life, while also supporting a customer base has increasingly focused on sustainability and reducing their carbon footprint.

We now have over 25 million miles log today and we are excited to scale this opportunity as we move into full commercialization of this product technology.

Finally, we believe long-term investors will be rewarded in the near-term by our dry van capacity project has our converted traditional refrigerated vans facility will produce 10,000 units post conversion, which is twice as many dry vans as compared to the reefer that were previously manufactured.

Notably, dry vans carry a higher margin compared with our conventional refrigerated product. All told, we expect to realize $0.15 to $0.20 of annual EPS accretion in 2023 and beyond as a result of this near-term capacity movement.

This capacity project will also enable us to further create shareholder value as we fully commercialize the breakthrough all composite refrigerated technology over the next several years.

Moving to market conditions, demand for freight remains robust and supply continues to be constrained by a multitude of factors, strong business investment and consumer spending paired with persistently low inventory levels continue to propagate robust levels of freight activity.

We see the overall freight environment remaining positive through 2022 and well into 2023.

Coupled with structural changes as previously discussed in terms of e-commerce related logistics disruption, the entry of new customers and the emergence of large trailer pools, we see demand remaining robust for an extended period of time, possibly the strongest period of demand we’ve seen in history.

As a reminder, the trailer industry has a strong seasonal pattern of ordering activity in which OEM backlogs built during the second half of the calendar year. The strength within our customer businesses from First to Final Mile has been well reflected in our backlog, which increased by $600 billion sequentially in Q3 to a total of $1.9 billion.

This represents an 87% increase versus the same period last year. $1.9 billion in backlog also establishes a new record for our order book, which is testament to our new commercial structure end-market strength, as well as changing dynamics of how the market utilizes trailers.

The strength in our backlog creates the visibility necessary to offer an initial EPS outlook for 2020 $1.70 assuming no improvement in supply chain conditions. In closing, we’re excited to announce our identity change and the realignment of our external reporting with our operating structure, our growth initiatives and our strategy going forward.

Our portfolio of transportation solutions positioned us to leverage unmatched product breath as a competitive advantage shored-up by unify commercial structure and go-to-market strategy.

We expect our increased dry van capacity to be a linchpin to many new and expanded customer relationships and our shift all composite refrigerated technology to drive growth well into the future. Driving focus in our parts and service business enhances visibility to our higher margin, more reefer business that features ample potential for growth.

These reporting changes are the combination of modifications to our organization to facilitate our refresh strategy and we’re eager to share our progress with you as the new reporting structure enables more effective communication.

We believe a story that started with a change in vision and a deep desire by so many at Wabash to be different to be better. Ultimately, we’re living our purpose with action to change how the world reached you. With that, I’ll hand it over to Mike for his comments..

Thanks, Brent. I’d like to start by offering some brief thoughts on the announcements Brent just discussed. Following our strategic organizational and capacity update, today’s company branding and segmentation refreshes are the culmination of work that has been going on behind the scenes for the last few years.

Our decision to narrow our strategic focus to transportation, logistics and distribution markets comes at a time of dramatic and exciting changes within the industry.

And we are tremendously excited with how the following moves have positioned us to leverage our commercial organization and innovation and product development capabilities to lead our market forward.

Turning to a review of our third quarter financial results, consolidated third quarter revenue of $483 million with new trailer and truck buyers shipment of approximately 12,455 units and 3,708 units respectively. Gross margin was 10.6% of sales during the quarter, all operating margin came in at 3.8%.

Operating EBITDA for the third quarter was $33 million or 6.8%. Finally, for the quarter net income was $11 million dollars or $0.22 cents per diluted share. From a segment perspective, transportation solutions generated revenue of $443 million and operating income was $26 million.

Parts and service generated revenue of $42 million and operating income of $4.1 million. Year-to-date, operating cash flow was negative $74 million. Shipments that were skewed very late in the quarter caused their receivables to increase significantly from Q2.

We have also increased inventory in certain areas of our business to help buffer supply chain interactions. We would expect Q4 to have a significant amount of free cash generation..

Our current target for 2021 capital spending is approximately $50 million, which is higher than normal as we catch up on projects that were deferred during COVID and prepare for our strategic capacity expansion and the conversion of our Lafayette base cell plant from reefer capacity to drive that capacity.

With regard to our balance sheet, our liquidity or cash plus available borrowing as of September 30 was $269 million with $49 million of cash and cash equivalents and approximately $220 million of availability on a revolving credit facility.

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 notes respectively.

After repaying our previous senior notes and term loan, our improved debt structure will result in $3 million of annual interest expense savings and more importantly 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 third quarter, we utilized $14 million to repurchase shares and our quarterly dividend of $4 million and invested $9 million in capital projects.

Our capital allocation focus continues to prioritize reinvestment in the business through growth CapEx and also maintain our dividends and evaluate opportunities for share repurchase alongside both on M&A opportunities.

Thinking about the next three to five years, I expect our capital allocation to continue to support our internal opportunities for organic growth. We have exciting opportunities to generate rates of return well in excess of our cost of capital as we progress with initiatives and our transportation solutions and parts and services segment.

Our dividend also remains an important element of returning capital to shareholders. Given that we expect our future free cash flow profile to remain robust. We will continue to evaluate opportunity to repurchase shares when we consider them to be undervalued.

While we will continue to evaluate smaller acquisition opportunities that would easily fold into our existing operations, I believe any large deals will be a lesser priority compared to the internal opportunities we have in front of us. Moving on to our outlook for 2021, we do expect Q4 to represent [Indiscernible] margin perspective.

This submitted quarter well its price cost most heavily works against us as we produce for orders that were booked in late 2020 afterwards, material costs have risen substantially. We expect revenue in the range of $490 million to $520 million and EPS of $0.10 to $0.15 in the quarter.

As Brent mentioned, our record backlog allows us to offer an initial outlook for 2022 of $1.70 per share. I’d like to be clear about the assumptions behind our 2022 outlook.

Pricing recovery from commodity headwinds experienced in 2021 had been effective and we expect average selling prices for trailers to increase in the range of $5,000 to $6,000, year-over-year. This would represent a $0.50 tailwind in the bridge from our anticipated $0.62 of EPS in 2021 to our guide of $1.70 in 2022.

I’d like to emphasize a modification to our pricing contracts in 2022, where we have implemented pass-through commodity pricing with many trailer customers. We have targeted a certain margin and have agreed to pass-through commodity costs. We feel this provides more certainty around it or financial expectations.

And we hope to continue with this framework in future years. We’re also assuming over $0.90 cents from improved build rates, which are based on the ramp and factory floor associate count we’ve been able to achieve to-date.

We expect to gain a total of 10 sets from the combination of reduced year-over-year share count, as well as lower interest expense. Fixed overhead and SG&A will partially offset these significant gains as a result of the impact from the current inflationary environment. We are assuming no improvement in supply chain in our guidance.

Clearly, we hope that as time goes on the supply chain situation improves. But we’re not building that level of optimism into our outlook. However, this clearly provides upside opportunity should the present state of supply chain improve.

Operating margins are expected to be approximately 6% at the midpoint and we are well on our way to achieving our 8% operating margin target by 2023.

We’re excited about our opportunity to meaningfully expand the company’s profitability and earnings per share year-over-year and about the strong underpinnings of the demand for our products driven by both strong demand conditions and structural changes in the market.

In conclusion, the announcements we made today are a combination of work that has been going on behind the scenes for the last three years. Our strategic focus is well set to leverage the company’s strengths as our organizational structure improvements proactively position us to drive innovation at a time when the market is most needed.

Additionally, our new segment structure provides visibility to our important parts and service business.

I’d like to reinforce that our parts and services team is working on initiatives meant to holistically benefit Wabash, which means more thoroughly flowing through the lifetime value of our equipment for customers, further enhancing Wabash value to our industry leading dealer network and effectively leveraging our carefully curetted supplier partnerships.

We are building something exciting by filling in the right space around our traditional First to Final Mile portfolio of transportation solutions.

Also narrowing our strategy to focus on transportation, logistics and distribution restructuring organization around these customers and going to market as One Wabash the most effectively leverages the breadth of our portfolio solutions as build a new identity for a company. This new identity is underlined by a modification of our company’s name.

Our ticker will remain WNC, the Wabash will stand for changing how the world reaches you. I’ll now turn the call back to the operator and we’ll open it up for questions..

Thank you. [Operator Instructions] The first question comes from the line of Justin Long from Stephens. Your line is open..

So, I wanted to start with the question around trailer delivery expectations going forward. I didn’t see anything and I could have missed it on trailer delivery expectations for the fourth quarter.

And then, as we think about next year in this bridge that you just walked through Mike, it’s a pretty significant tailwind from increased volume, despite the clear capacity constraints that we’re seeing in the market today.

So, can you just kind of help us think through what level of trailer deliveries is needed to achieve this 2022 guidance and just your comfort and visibility in seeing that ramp?.

Yes, sure. So we didn’t give a specific unit guidance for Q4, we didn’t get a revenue range, which is slightly a slight uptick from Q3.

If you look at going in the run rates, what’s important to know is, we have clearly been able to match our installed capacity to be able to come out of the gates in Q1 of 2022 and hit the guidance that we laid-out and we’re running faster today than we were earlier in the year.

So we just allocate how and normalize where we were first half, step it up into second half and then take it into Q1 and 2022. You’ll see we’ve done some of the hard work already.

But there’s obviously in our implied guidance we gave for 2022 we’re nowhere near some of the run rates we would have seen in 2018 and 2019 from a unit count perspective, and that’s the upside that still exists if the supply chain improved.

So we are basically baking there and we have visibility obviously on the demand side with our backlog of $1.9 billion. We have the demand and backlog surety hit the rates. And we’ve maintained some conservatives around the supply chain.

But I think the other point is that we do have the installed manpower to do what we need to do to hit the run rates in 2022..

I think another point of optimism as we go into the fourth quarter, and we are still thinking about the first quarter of 2022, that we’ve been very successful over the last 45 days to 60 days were on-boarding new associates, we really saw that change in the middle of September.

And the other good piece is we’re hearing the similar output throughout our supply base as well, that is capacity and resilience that will come into the supply base, really in the first quarter of 2022.

That gives us a much better feeling in the stability of the supply base going forward, which gives us a very nice jumping off point with the labor that we’ve been able to bring at a minimum maintain, but more than likely able to incrementally do better from a general production standpoint, going into the first of the year..

And maybe another way that to ask it is when you look at the ACT research forecast for industry trailer production in 2022, I think they’re up just under 20% next year, There’s the message that you would at least expect to be kind of in line with that level of growth may be a bit above..

I think that’s a fair assessment..

And then Mike, maybe just following up on the EPS guidance for 2022, so for the fourth quarter, we’re going to be at $0.10 to $0.15 of EPS, you kind of run the math on where we’re headed next year, and it’s a pretty significant step up.

So I was wondering if you could help us think through the cadence of earnings you’re expecting next year, even if it’s just kind of high level, first half versus second half as we think about, how things should ramp over the course of next year?.

Absolutely. So, you would expect Q1 to be the lowest quarter of the year for an EPS generation perspective. But that’s normal for Wabash National, if you look back over the last seven to eight years pre-pandemic, it was very normal for Q1, based on how equipments picked up from our customers that Q1 be the lowest.

So you also see a little bit of overhang from Q4 units that pushed into Q1 from the supply disruptions that we’ll work through in the first part of the quarter.

And then you’ll see Q2, we should be off to the races at that point with a re-priced backlog from 2022 order season, a fully staffed manufacturing facilities and we would hope to see at that point, even more stability from the supply chain. So Q2, I think is where you’re going to see meaningfully step up from Q1.

And then I would say, Q2, Q3 and Q4 should all be relatively similar in terms of EPS generation after a big step up in Q1..

And last one for me, when you just look at what the guidance implies for this step up in SG&A next year, it’s around $40 million.

Can you kind of help us unpack the key drivers to that increase and does that include any kind of temporary operating expense associated with adding capacity before we actually see that revenue pointing out in 2023?.

Yes, there’s a lot that goes into that when we talk about the step up in SG&A.

But obviously, we are going to have to add some SG&A for our ramp facilities that we’ve got both [Indiscernible] for MSC and the surge, but I think part of that actually is just some of the normalization of inflation you see throughout the business, and from low levels and 2020 and 2021 in some areas, incentive comp and other areas of business that are returned to more normal levels in 2022..

Thank you. Next up, we have Joel Tiss from BMO. Your line is open, sir..

I wonder if you could talk a little bit about any signs. I know if well, everyone’s disrupted out there.

And I wondered if there’s any sign that you guys are seeing about gaining share in the market in some of your new targeted areas?.

Yes, what I would say is that, where do you want to start? So when we think about the various trailer segments that we have, we’ll start there. And we have say, you can see by our backlog that we’ve been very successful of leaning into the beginning of the order season.

And that really illustrates the amount of demand we had for our product really since the beginning of the year. What I can tell you is that we are specifically targeting customers for the purposes of building out our portfolio. We’re also targeting customers that understand the value proposition of our product.

And that’s maybe a more important way of thinking about how we go forward in building out our portfolio. Now, we’re also setting up to your explicit point of market share, purposely building and expanding market share slightly in 2022.

But what will be more interesting is how we talk about the mix of what that customer portfolio is as we come out of the first quarter. And we’re excited about talking about what that is and it goes hand-in-hand with having a very robust and quite pragmatic view of the pricing that we’re getting as we go into 2022.

I think that’s probably the most important thing to take away from it. Now if I want to expand out of trailers, I think about MSC reefers. While it may not be necessarily a market share gain today, I want to talk about where we’re at with that.

This year, we’ll build somewhere between 220 and 250 based on the limited amount of capacity that we had in pre-commercialization phase of launch. As we move into 2022, we’re looking at scaling that up to approximately 1,000 units only factoring in from the availability of a mitigating factor, which we’ll look to resolve.

And we’re approximately already at 50% booked as we sit here today for that product. We’re already doubled the amount of MSC booked orders today. And still our processing has zero concern of filling out that backlog to approximately 1,000 for 2022 that’s almost a 400% improvement from where we are.

We are investing in our platform business to increase specifically aluminum related trailers. And that business is effectively booked for the year at full capacity based-off of labor availability today.

And our truck body business is just beginning to open up and I think what we would see there is relatively same-same market share just a expanding market. So that would be the color I would give right now..

And then can you give us a sense like, I don’t know how to measure, are you gaining your fair share, do you have your fair share in parts and service or maybe the better way to ask it is where do you think this business could be in 5 years or 10 years, whatever longer term timeframe you want to put on it?.

No, the reality of it, Joel is that we at Wabash National have really underserved the parts and service segment of our business for the last 20 plus years.

We see this as a tremendous growth opportunity, something that can easily double in terms of revenue and probably with some level of margin improvement along the borders of the greatest growth scale.

The environment is clamoring for a -- we’ll call it at some business innovation in the way parts and services are delivered today with the changing logistics marketplace. So we really feel if we approach it in a more innovative manner, more modern manner. That sky’s the limit on where we can go with this.

As Mike talked about, we also see it as a destination for deployed capital to be very specific and aggressive in the way that we grow that. So between organic and inorganic opportunities, I will today say I have no concern in doubling it. And we’ll see where we go from there..

And then the last one for me is can you just talk a little bit about acquisitions? In your view, do you think we would be a little more technology focused or more capacity focused or more spreading out the product line, just a little bit of color in that direction? And then I’m done. Thank you..

So when I think about capital allocation, in terms of acquisitions, technology is absolutely an area of capital deployment that would be useful, assuming that it fits into our innovation pathway as we target our portfolio customers.

Second, I think there are opportunities from a capital deployment standpoint to shore up our supply chain, whether that’s a level of vertical integration or expanding our ability to buffer those concerns over the next several years, let’s say for the next half decade, I think that’s an opportunity.

And we absolutely are going to look at capital deployment for the purposes of capability enhancement for our parts and service business, around out a very extensive what I want to say worldly portfolio of service capabilities, business capabilities, and in some cases, I’d say capacity, but it’s much more about organic capability that we want to hold on..

Yes..

I think there’s a lot of opportunities. As Brent mentioned, in parts and services do for corporate development that may not be pure M&A, that’s capital light with partnerships and other ventures that could really help us round out that initiative. And we’ll be talking more about that over the coming quarters..

Thank you. Your next question comes from the line of Jeff Kauffman from Vertical Research. Your line is open..

Thank you, very much. Well, this sounds exciting. Could I ask just a couple detailed notes? With the new reporting structure, I know we’re blending everything together.

But can you break out kind of where your volumes were between say, dry reefer and tank in the quarter?.

We’ve never broken out dry and reefer tank, tank was separate in CPT. I would say the mix between tank and classic CPT volume was similar in Q3 as it was in Q2..

Traditional mix of volume really historical standpoint for years..

And then you said when you break out the 10,000 new capacity for dry, that’s almost double what you were doing before I’m assuming the application is about 5,000 for reefer?.

4,000 to 5,000..

And then you mentioned that you’ll be around 1,000 MSC units next year.

So when fully built out and we’re going forward in ‘23 and ‘24 is MSC going to be around that 4,000 to 5,000 level that reefer was before is there kind of a ramp build or where do we see that MSC business size for its long-term?.

So when we think about, let me be very specific when we talk about MSC as a technology and I want to break it into its product applications. I would say minimum expectation is that we are equal to our conventional historical production.

So in that 4,000 to 5,000 range, we obviously have sites to be greater than that based off of our commercialization efforts and how those truly panned out. That being that will be directionally around in 2022, I think 4,000 to 5,000 is a reasonable target at this time.

In addition, we are planning to build at least 900 to 1,000 MSC related truck bodies, which I would cast as primarily market shares/new business creation in the way that we’re applying it.

I think some things that you will be giving to the streets in the next several weeks with detail is some output with some very interesting work that we’ve been doing with multiple players in the area of refrigerated delivery and how we’re partnering with them to give them some very unique use solutions with MSC.

So when we think about MSC in total, well maybe 4,000 to 5000 refrigerated vans, we may be well over that, we will be well over that in terms of MSC utilization as we weighed into the marketplace, Jeff..

That was really helpful. Just one last follow up if I can thank you. What you’re going to do with the parts business sounds exciting. I was just kind of wondering how do we affect the growth of parts when you’ve largely gotten out of the dealership business.

How do we double parts over time? How do we distribute, kind of help me understand how that business grows?.

Well, first off, well Wabash National historically, obviously you’ve been covering Wabash for a long time. What you’re really referencing is our Wabash owns service dealerships that we had as part of the [Indiscernible] acquisition of assets back in 1999.

While we have to transition those, what we did for the most part is transition those into independent dealer entities, right. Those still remain Wabash National independent dealer relationships.

And as a result, we have created the most expensive, deepest and most talented group of dealers in the industry, we plan on leveraging that in a very purposeful way that really hasn’t been harnessed in the past 20 years for Wabash National.

We’re going to do that with enhanced distribution that will be both was to say, partnership like in the way that we look at that. We’re going to go further in the way that we digitally enable that beyond what the offerings are to the street today.

And we’re going to couple that with bringing together not only truck body parts, but also van and tank parts that have again, a First to Final Mile total portfolio solution in a way that we do it. No one else can do that, Jeff.

So we think we can create the premier over time, a premier portal for the distribution of parts across those companies that value going to a one stop shop..

So your point is that even though it’s not a Wabash own network, your ability to use a distributor network to get out there is still very much intact..

Absolutely everything we can do in a very capital efficient way as a result..

Thank you. Presenters, there are no further questions at this time. I will turn the call over back to Mr. Ryan Reed for any closing remarks, sir..

Thanks, everyone, for joining us today. We look forward to following up during the quarter. Have a great day..

Thank you. Ladies and gentlemen, this concludes today’s conference call. Thank you all for joining and I’ll disconnect..