Wabash National Corp has decided to withdraw from the domestic intermodal container market by March 31, 2006. The decision to exit this business will negatively impact first quarter pre-tax results by about $1.5 million, including approximately $1.0 million related to the write-off of assets. Over the past three years, container sales have averaged less than 3.5% of annual unit volume and have been one the company's lowest-margin products.
The company also expects new van trailer unit shipments in the first quarter of 2006 to be around 12,500, an increase of some 12% compared with the first quarter of 2005. Sales to core customers are expected to represent approximately 30% of units sold in the first quarter of 2006, more than double that of the 2005 quarter.
Bill Greubel, chief executive officer, said, “It has become increasingly clear that corrugated steel boxes from China and Korea adequately satisfy customer requirements at prices significantly lower than our container offering. As a result, we have decided to focus our efforts on more rewarding opportunities. Customer pick-up units represent a higher than historical percentage of shippable equipment and is constraining first quarter volume. Van trailer quote and order activity remains strong, and orders currently represent approximately 70% of a targeted 60,000 units for 2006.”