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Wabash National (NYSE:WNC)
Q4 2019 Earnings Call
Feb 12, 2020, 10:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Operator

Good day, ladies and gentlemen, and welcome to the Q4 2019 Wabash National earnings conference call. [Operator instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Mr. Ryan Reed, director of investor relations.

Please go ahead, sir.

Ryan Reed -- Director of Investor Relations

Thank you, Katrina. Good morning, everyone. And thanks for joining us on this call. With me today are Brent Yeagy, president and chief executive officer; and Mike Pettit, chief financial officer.

A couple items before we get started. 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 available at ir.wabashnational.com. Please refer to Slide 2 in our earnings deck for the company's safe harbor disclosure addressing forward-looking statements.

I will now hand it over and ask that you please refer to Slide 3 as Brent gets us started with his highlights.

Brent Yeagy -- President and Chief Executive Officer

Thanks, Ryan. Hello, and good morning to everyone with us on the call today. Let's start by first looking at our full year. We are pleased to have continued revenue growth, while also growing operating income, net income and EPS versus the prior year.

Additionally, cash generation continued to be strong, and I'm very pleased to add them to our streak of what is now seven consecutive years of free cash conversion of 100% or greater. We took action to divest business assets that were not part of our strategy or core to our business. We also made major strides in further transforming Wabash in line with the strategic vision that we have for this company, which I will outline in additional details further on the call. Let's transition and discuss our fourth quarter.

During the fourth quarter, we continued strong top-line performance that is characterized in the full year of 2019. We generated record sales of just over $2.3 billion during the full year of 2019 with $579 million of revenue in the quarter. Overall top line for the year and the quarter were driven by strong market performance and pricing in all three operating segments. Operating conditions in the quarter were somewhat challenging as we navigated through the end of year scheduling and demand fluctuations.

Our CTP and DPG segments were able to mitigate the majority of these challenges through pricing actions and their ability to leverage leaner and more nimble operations characterized by their overall Wabash Management System maturity. However, our FMP business had a more difficult time executing through those challenges. As such, profitability for the quarter was slightly below expectations on a consolidated basis. And as previously stated, CTP and DPG were solid performers, but unable to offset FMP's challenges for the quarter.

So let me give you a little bit more detail about FMP's fourth-quarter environment. New customer inflow and traditional customer order pattern variation challenged the operating systems within final mile products, which weighed on profitability in the quarter. This business is in the envious position of having to execute on both new growth and a change in customer demographic that is being brought on by secular market trends and a new and growing final mile products' value proposition based on improved on-time delivery and innovation. The reality is that our operating systems within final mile products have further improvements to make in order to more efficiently execute on its growth trajectory.

Changes are afoot within final mile products and Wabash National to accelerate final mile products' operational improvement to more fully incorporate the Wabash Management System into its everyday operating environment. So a matter of time until a greater level of bottom-line performance emerges within this exciting business. Now I would like to take a moment to share what we've been doing beyond the numbers to position Wabash for the future. As part of the leadership transition in 2018, we spent time assessing the company's history, legacy, competitive advantages and culture, all with the purpose to better align the organization and create a new organizational set of capabilities to deliver on our revised strategy.

As a result, we have realigned our purpose, vision, mission and values to reflect how Wabash National can best position the organization to provide breakthrough customer value, long-term profitable growth, sustainable results and an exciting and rewarding future for our employees. Beginning at the top, we see our purpose or the reason we exist as changing how the world reaches you. Wabash products already touch everything in the logistics chain, nothing moves without our products. And our purpose speaks to how we will align our innovation resources, the scale of our desired impact and the legacy that we will create as an organization.

Our vision is what and how we fulfill our purpose. Our vision is to be the innovation leader of engineered solutions for the transportation, logistics and distribution industries. We believe this vision appropriately captures our foundation as innovators and is also broad enough to define where we will grow, yet specific enough to show where we will win. Our mission is how we intend to act now.

We will enable customer success with breakthrough ideas and solutions that help them move everything from first to final mile. The customer is at the center of our mission and directs us in how we'll innovate and provide real change to assure all of our stakeholders are successful. We've also updated our values and leadership principles to reflect a more refined, inclusive and enabling culture that were in the early stages of building at our company. They may not look traditional, but we don't intend to be traditional in the future.

We intend to be different, and we intend to be better. Lastly, we will do so with an enterprise lean mindset, while lean is something that many people think about as a tool used only on the shop floor. The Wabash Management System applies these same principles to every aspect of the company, and we're enlarging our commitment to the organization to identify and eliminate waste, enhance process and establish stable and effective standard work in every aspect of our business. I'm encouraged by the growing understanding that a Wabash Management System is not about just solely reducing waste and cost, it's not about just using tools, it's about freeing resources through process improvement and connecting systems to enable profitable growth and advancement of the strategy for our people, our customers and our shareholders.

Our reality is that we are at the early stages of broad organizational deployment to the vision we have for our Wabash Management System. While this means that we have a journey in front of us, it also indicates the opportunity that awaits us in the future. To better align the organization, we've recently announced some changes. Mike Pettit has taken over as chief financial officer, and I expect the rate of change in his organization to meaningfully accelerate as the finance function executes its vital role in leading the implementation of the Wabash Management System and the enablement of both an enterprise lean mindset and a growth mindset across our business.

I would like to thank Jeff Taylor for his leadership as CFO and wish him all the best in the future. He is a man of exceptional integrity, and he worked diligently to make Wabash a better place. As part of those organizational changes, we have Kevin Page, who has led our diversified products group, also assuming responsibility for final mile products. Kevin brought over 20 years of executive level final mile and truck body experience to Wabash in 2017, and we are excited for him to leverage that background.

We have made numerous changes underneath Kevin to support the new structure and assure that we position additional talent to accelerate the final mile's business profitable growth trajectory. As a reminder, we previously made the organizational change to centralized product innovation from the operating segments to drive breakthrough results in line with our purpose: to change how the world reaches you. We will continue to provide updates on further calls to communicate how we are working on the business to create and acquire new capability, further align the organization, as well as more quantifiable impacts as we enhance our future performance and trajectory of our strategic vision. Now we'll discuss current backlog and market conditions.

Our backlog ended the fourth quarter at approximately $1.1 billion, up sequentially by approximately $300 million from the end of Q3. For the trailer market specifically, industry reports have shown backlog effectively flat from the end of Q3 to Q4. So we expect at this early stage that we've outperformed the market, just as we expected. The market has certainly taken on a more normal seasonal pattern for 2020, and we expect fleets to manage orders in a more traditional manner heading into 2020.

ACT and FTR's estimates are around 239,000 and 270,000 units, respectively, for 2020. We are planning on an environment in this range of approximately 250,000 units. But we're certainly ready if the market turns out to be stronger than we've initially planned. Within the final mile space, we continue to expect outpace growth in the longer term, but we expect customer demand to reflect a more subdued level of overall market growth in 2020.

Additionally, we anticipate seeing a seasonal shift in demand that favors the second half of the year and supports growing levels of customer optimism pointing to stronger 2021 demand within the truck body space. Now we'll talk about capital allocation. Our primary focus remains repaying debt. In the quarter, we reduced our debt by $20 million, funded our dividend and repurchased $11 million of shares.

In addition, we've been able to properly fund the necessary capital investments to operate the business and invest in the future. Going forward, deliberate deployment of cash to further strengthen our balance sheet will remain a core part of our capital allocation strategy, while we continue to invest in our business while returning capital to our shareholders. However, we believe that the value of the stock has experienced significant dislocation at recent levels. As we move forward, we won't hesitate to redirect additional capital toward share repurchase if we feel that is in the best long-term interest of the shareholders.

Now we'll talk about our 2020 outlook. We are providing a full-year revenue outlook of approximately $2.1 billion in the environment we are seeing earnings per share of $1.20 at the midpoint with a range of $1.10 to $1.30 per share. We feel that this sequential increase in our backlog speaks to our ability to capture share as we move into a new phase of the cycle. Additionally, the relative strength of our backlog speaks to the differentiation that customers experience not only in our products, but the overall experience of doing business with Wabash National.

I would like to conclude my comments by thanking the entire team for their hard work in 2019 and their continued dedication in 2020 as we push forward with our transformation efforts. With that, I will ask Mike to provide additional color on both our financial performance and our 2020 outlook.

Questions & Answers:


Operator

Thank you, sir. [Operator instructions] Your first question is from Justin Long from Stephens. Your line is open.

Justin Long -- Stephens Inc. -- Analyst

Thanks. Good morning. And Mike, congrats on the new role.

Mike Pettit -- Chief Financial Officer

Thanks, Justin. Appreciate that.

Justin Long -- Stephens Inc. -- Analyst

So maybe to start, the midpoint of your 2020 trailer delivery guidance implies a decline of around 11% year over year, and it sounds like the expectation for the market is down about 25% based on what you said in the prepared remarks. So that implies a pretty significant level of outperformance relative to the market. Could you talk in a little bit more detail about what is driving that? And I know you mentioned product mix, but maybe comment on customer mix and if there's any change in terms of strategic pricing as well?

Brent Yeagy -- President and Chief Executive Officer

Yes, Justin, this is Brent. I'll start that off, Mike can follow up as he needs to. I would start with, and just repeat what we've been saying almost for, I'd say, three to four years, and specifically, how we have positioned commercial trailer products. First off, we've reconditioned the customer base that we sell to today.

And we're seeing that pull-through with, we'll call it, the direct portion of orders flowing through the order backlog at this time. We've continued to improve the channel mix, specifically strengthening the indirect channel that we believe will pull through as we move through the remainder of the first half or the remainder of the summer and the second half of the year. We can go back to the dealers that we've added really since 2013. We see that happening.

The other piece to it is the relative stable pricing that we see moving in from 2019 to 2020, again, representing the premium and the reflection of the product that we put on the road for our customers. We see that, we can measure it and we got $1.1 billion in the backlog to validate that at this time. So that's moving into our calculus at this point on the CTP front. We've positioned that business well.

We're going to see it pull through. We've also talked about, while there's a level of absorption issues that come through anytime that you come off of a higher volume number, we're also picking up a little bit of efficiency because we are running at peak volumes really for the last two years, right? So over time, comes out, and there's just a level of efficiency gain offset by other issues, that helps prop up our decrementals when you think through what will be going on in 2020. So that's a high level at this point.

Mike Pettit -- Chief Financial Officer

I would just add, it represents a strong mix of customers in our direct channel. As Brent mentioned, a strong and improving indirect channel. And obviously, a belief from our customers and a very strong value proposition of Wabash products.

Brent Yeagy -- President and Chief Executive Officer

Yes. I think the other piece is that the diversification strategy that we've implemented over the last six to eight years starts to come through in a cycle like this. We've got a growing revenue base within our final mile products due to secular demand. We've got the ability of improving those operating margins with work that we're going to implement in 2020, and we'll be working on that.

Finally, diversified products have shown a higher level of revenue stability. Specifically, we will experience that in a trough environment as their cycle is a little bit different. And ACT actually just raised their expectation by a couple of hundred units for 2020. So we'll see that stability, coupled with the fact that they would stabilized their margins and had shown the opportunity to continue to work on those with the performance they've had so far in 2020 as well.

So there's a lot of things coming together, and we've alluded to that, all going back to the investor day that we talked about in March of 2019.

Justin Long -- Stephens Inc. -- Analyst

OK, great. That's all really helpful color. Maybe to circle back on the next question, back to what you said on operating margins. Mike, I think you mentioned in the first quarter, somewhere between 1.5% to 2.5%.

If you look at that compared to the full-year guidance for 2020, it implies a pretty nice pickup sequentially over the balance of the year. So can you talk a little bit more about how you -- I guess, the quarterly cadence of operating margins over the course of this year? And where you expect to exit 2020 from a margin perspective?

Mike Pettit -- Chief Financial Officer

Sure. I won't break down each quarter, but what I will say is, typically Q1 is our seasonally weakest quarter. And then that's being added to this year. As we mentioned, we do have some headwinds from FMP coming into Q1, which is embedded in our 1.5% to 2.5% guidance for the first quarter.

What you do see typically in this business, and we expect it again this year, is much stronger Q2 and Q3 performance. As the business ramps through the first quarter, you will see strong production exiting Q1, and then you will see sometimes that shipment lag will move into Q2. And that's why we very regularly see very strong Q2 and Q3 quarters within the overall Wabash National business. Furthermore, we expect final mile products to improve as we go through the year, both in operational performance and in the demand environment.

So we would expect the second half of that business to provide a lift for the overall margins, and that lift will be provided as we exit 2020. So that's all embedded in our guidance of a softer Q1 and a much stronger Q2 to Q4.

Justin Long -- Stephens Inc. -- Analyst

OK, and maybe just one last question, and then I'll hop back in the queue. But looking at the revenue guidance for the full year, could you speak to what's getting baked in for the DPG and FMP segments?

Mike Pettit -- Chief Financial Officer

Yes, we don't typically break that out among the three segments, but I will say that those businesses, as Brent alluded to, what I expect is as much growth in FMP as we've seen in the last couple of years and then DPG as well, I would think, would trend generally in the same trailer shipment guidance that we gave for the overall business.

Brent Yeagy -- President and Chief Executive Officer

Yes. The only thing I would add is on the -- I would say, on the demand performance side, echoing what Mike said to a degree, I think we're not looking for diversified products to make any large steps in terms of share necessarily this year. We need them to execute their business. They have a stable demand to do that, and they need to work on their margins accordingly.

On the final mile products space, the market is going to have some down pressure. We've got some growth opportunities. We'll see how those offset each other and that's factored in. CTP, that's a story we keep wanting to tell.

We should see a level of share expansion in 2020, as we already have seen in our backlog numbers. We're not going to get into what that share number is at this point, but we do clearly see the fruits of our labor is paying off. So CTP is going to be a big part of the revenue story this year, and that's always been part of our strategy.

Justin Long -- Stephens Inc. -- Analyst

OK, great. I'll leave it at that. I appreciate the time.

Mike Pettit -- Chief Financial Officer

Thank you.

Operator

Next question is from Felix Boeschen from Raymond James. Your line is open.

Felix Boeschen -- Raymond James -- Analyst

Hey, good morning, guys.

Mike Pettit -- Chief Financial Officer

Good morning.

Brent Yeagy -- President and Chief Executive Officer

Good morning.

Felix Boeschen -- Raymond James -- Analyst

So maybe if I could follow up on some of the comments around really trailer pricing. I think, obviously, you're reaping some of the benefits from some pricing recoups really from higher raw material costs, but curious if you could touch on your expectations for pricing through 2020, maybe first half versus second half of the year and really what you're seeing in the market right now?

Brent Yeagy -- President and Chief Executive Officer

Yes. I mean, we've got so many products in so many different markets. I'll quickly say, for the FMP and DPG business, just based on the demand environments they've got in the customer base, I think we're still looking at, we call it, stable pricing from 2019 to 2020, and that's baked in our guidance. For CTP, I think the general layman's expectation is that we would be seeing higher levels of pricing pressure at this stage of the game.

And what we're seeing right now is relatively stable pricing as we execute the innovation work that we put into our product. We're launching multiple commercialization efforts in 2020, as well as garnishing what we did in 2019. So I would just say, we are very happy with how pricing is entering into 2020. But I will stress, it is a dynamic year, and there are some different channels that still need to come through based on traditional timing, specifically the indirect channel.

We look for that to be a general positive story with the work that we've done, but that's an aspect of the overall trailer channel makeup that is really a Q2, Q3 activity under normal traditional calendarization of orders.

Felix Boeschen -- Raymond James -- Analyst

OK, that's helpful. And then just shifting gears sort of back to final mile here. I mean, obviously, margins were maybe a bit softer than expected in 4Q. Do you mind maybe elaborating a little bit more on that? Is there anything in there that we could point to as maybe more onetime in nature? I get some of it will roll over into 1Q '20, but I'm really trying to understand sort of what's the go-forward run rate as we really approach the second half of 2020 here?

Brent Yeagy -- President and Chief Executive Officer

Yes. So for diversified products, when we think about their margins, and we alluded to it in Q4, from a Wabash Composites perspective, that kind of weighed on margins in the fourth quarter. A big part of the revenue stream for that business unit is really driven off of dry van volume and converted truck body volume to DuraPlate technology and that began to show itself in Q4 just based on demand loading at that time. That's a normal.

Wabash Composites is always pressured in the fourth quarter. We saw it a little bit more with those input items. And that's what affected that margin accordingly. Our other business segments inside of the tank trailer and Process Systems did well for the market condition that they had.

So really, what we should see as CTP continues to perform, and we kind of alluded to why we believe that will be the case, that will prop up Wabash Composites through Q1 to Q3 accordingly, but it will still weigh on to a degree in Q4.

Felix Boeschen -- Raymond James -- Analyst

Ok. But anything else you guys can say around final mile products specifically sort of as we look in the cadence of margins into next year?

Mike Pettit -- Chief Financial Officer

Yeah. So what we mentioned in the remarks was that Q4 represented a pretty significant shift in their order demand and profile, which we see starting Q1 period off as well. So that's really what caused the margin compression and softness. We are seeing some nice order intake as we move through Q1.

And we believe that a lot of what we saw in Q4 that caused that step-down significantly from earlier part of the year will pass throughout Q1, and then we'll see much better margins in the Q2 to Q4 period.

Felix Boeschen -- Raymond James -- Analyst

OK, thanks, guys. I'll leave it there.

Brent Yeagy -- President and Chief Executive Officer

Thanks.

Operator

Next question is from Ryan Sigdahl from Craig-Hallum Capital. Your line is open.

Ryan Sigdahl -- Craig-Hallum Capital Group LLC -- Analyst

Good morning, guys. And congrats on the new role, Mike.

Mike Pettit -- Chief Financial Officer

Thank you.

Ryan Sigdahl -- Craig-Hallum Capital Group LLC -- Analyst

So given, maybe just on guidance, it's fairly back-half weighted and you guys have talked some about it, but I guess, how much that business is in the existing backlog that you have versus maybe indications of orders or expectations of future orders, maybe between those three buckets?

Brent Yeagy -- President and Chief Executive Officer

Yes, so I think you might be aware, I mean, for the majority of that backlog, obviously, within our commercial trailer products business. That backlog is relatively evenly spread throughout the full calendarization of the year at this point. That's mainly coming from the direct channel that makes up the bulk of our CTP demand profile. So we factor that into the guidance itself.

We know what the trailers are laid in. We know quote and order activity has indicated, where that will come in the future. So we're very comfortable right now with how we have laid out the distribution of revenue in our guidance.

Mike Pettit -- Chief Financial Officer

Yeah, I would just add that, traditionally, the truck body business or the final mile products segment would not have much backlog beyond Q2 at this point of the year ever. So they would expect to see those orders starting to roll in as we get into late Q1, early Q2.

Ryan Sigdahl -- Craig-Hallum Capital Group LLC -- Analyst

And then just on CTP pricing, you mentioned innovation technology is certainly helping you guys from a pricing, as well as market share standpoint. Are you guys seeing any pricing pressure in the industry from competitors and you guys are just offsetting that? Or is the industry actually holding up maybe better than feared, given the demand environment?

Brent Yeagy -- President and Chief Executive Officer

I don't think it's one or the other at this point. I mean, it's kind of twofold. Yes, we are seeing some level of pricing pressures in certain markets for certain products and certain customers. And I know that's a mouthful, but that's the way that we look at it.

The way we've positioned our customer base buffers us from that to a large degree. So while we see it, we know it's going on. We've been able to avoid it in most cases with the bulk of the demand coming in for our CTP products. I will say this, I am pleasantly surprised with the level of rationality that we're seeing with our competitors at this moment in time.

Ryan Sigdahl -- Craig-Hallum Capital Group LLC -- Analyst

Good, that's it for me. Good luck, guys.

Mike Pettit -- Chief Financial Officer

Thank you.

Operator

Next question from Joel Tiss from BMO. Your line is open.

Joel Tiss -- BMO Capital Markets -- Analyst

Hey, guys. How is it going?

Brent Yeagy -- President and Chief Executive Officer

Hey, Joel.

Joel Tiss -- BMO Capital Markets -- Analyst

Can you talk a little bit about your 2020 free cash flow expectations? And just kind of your preference, like which way you are leaning with your $140 million of cash that you already have for share repo versus debt reduction?

Mike Pettit -- Chief Financial Officer

Sure. So I would expect another year of 100% plus free cash conversion. So you can get to that with our implied guidance, what we would expect kind of minimum of free cash to be. In terms of our existing cash and new cash being generated in 2020, as we mentioned, debt paydown and delever remains a priority for the business, as well as investing in some really good growth projects we have.

We had some really nice organic growth opportunities. MSC remains a real positive area for us to invest capital. And then depending on what happens with the share price, that's always an opportunity for us to continue to move some capital if evaluations point us in that direction.

Joel Tiss -- BMO Capital Markets -- Analyst

OK. Can you give us a little bit more color on what some of the cost savings targets are for 2020? Any numbers you have around that?

Mike Pettit -- Chief Financial Officer

In terms of like our productivity projects?

Joel Tiss -- BMO Capital Markets -- Analyst

Yeah.

Mike Pettit -- Chief Financial Officer

Yeah, so what we -- they're, obviously, all implied in our guidance, but we had several projects in the half through our commercial trailer products group, diversified products and final mile products, all have active. We spent $38 million of capital last year, and a good chunk of that is on projects that we believe will come through into 2020. Final mile is a good example of one where we deployed some capital last year that we believe will help significantly to be able to expand the margins of what you saw into the second half of 2020 into 2021 based on that capital deployed in the business. I'm not going to break out specific margin expansion by business based on those projects, but a good chunk of our capital that's been deployed organically into the business, which has been in the high $30 million range over the last couple of years has been devoted to those productivity projects.

Brent Yeagy -- President and Chief Executive Officer

Yeah. I would add just at a little bit more granular level. We have three to four plans, line velocity lean, we'll call it, deployed initiatives that are either actively or actively being worked on or will be worked on in 2020, some are within final mile products, some are within tank trailer, as well as within commercial trailer products. Two to three major Six Sigma projects.

One of those will be at our Wabash Wood Products facility to improve productivity there and yield, that will be meaningful. And when we look at all of those at a minimum target, we want to offset at a minimum labor inflation as just a general rule in what we try to do. That's a given. That's baked into our numbers.

And then there's always the potential for upside. We don't necessarily bake that all into our guidance because nor do we bake in all the risk, right? We need those projects to help offset and countermeasure other things that will happen in the course of an operating year. So we have a lot going on, and we've expanded the work that we're doing from what we saw in 2018 and 2019, as we're in this period, now that we've got a little bit of -- and this is kind of gift that we get. With a little bit of reduced demand, we can get into some of the operations that maybe we couldn't in the past and do some work.

And those have been planned out for a period of time, and we'll engage in that in 2020. We'll see the fruits of that, most of that, really in 2021 and 2022 as we ride the upcycle up. And that's a big part of our strategy going forward. That is something Wabash National has not been able to execute in the prior, we'll call it, relative downturn periods.

And people need to keep an eye on that in terms of how we're going to perform over the next three years and how we're positioned going forward.

Joel Tiss -- BMO Capital Markets -- Analyst

That's great. And then last, can you just give us a little bit of a benchmark on the FMP loss in the first quarter? Is it going to be similar to fourth quarter or better? Or any help you can give us there? Thank you.

Mike Pettit -- Chief Financial Officer

Not specific guidance, Joel, but we will say that we would expect it to improve as we go through the quarter. And I would definitely expect Q1 to be weaker than Q1 of 2019. But I'll leave it at that. We're seeing improvement as we move through Q1 today.

Joel Tiss -- BMO Capital Markets -- Analyst

OK, thank you very much.

Brent Yeagy -- President and Chief Executive Officer

Thanks, Joel.

Operator

Last question is from Jeff Kauffman from Loop Capital Markets. Your line is open.

Jeff Kauffman -- Loop Capital Markets -- Analyst

Thank you very much. Good morning, gentlemen. How are you?

Mike Pettit -- Chief Financial Officer

Good.

Brent Yeagy -- President and Chief Executive Officer

Good morning, Jeff.

Jeff Kauffman -- Loop Capital Markets -- Analyst

OK, so just a couple of mop-up questions here. You gave us the revenue outlook for 2020. You told us you were going to pick up market share. I can't remember, did you give a vehicle range for 2020?

Brent Yeagy -- President and Chief Executive Officer

Yes. Yes. So the vehicle range we got, I don't have that in front of me right here. I think it's 58,000 to 62,000, but let me double check that, and I'll get back to you off-line.

Jeff Kauffman -- Loop Capital Markets -- Analyst

For 2020, and the 58,000 would include final mile, I guess?

Brent Yeagy -- President and Chief Executive Officer

Sorry, we've got a slide here.

Ryan Reed -- Director of Investor Relations

No, we've really given trailer guidance.

Brent Yeagy -- President and Chief Executive Officer

Sorry, 49,000 to 53,000 on the trailer.

Jeff Kauffman -- Loop Capital Markets -- Analyst

OK, that sounds a little better. OK. So actually, if we take that against, let's call it, the midpoint of ACT and FTR 250, that's implying almost a 200-basis-point market share gain, no?

Mike Pettit -- Chief Financial Officer

That would hold. Yes, that's correct.

Jeff Kauffman -- Loop Capital Markets -- Analyst

OK. Just want to make sure we're on the same page. And how much did you say was left on the repurchase. I was writing as quick as I could, but I didn't get the number.

Mike Pettit -- Chief Financial Officer

Yeah, 69 million.

Jeff Kauffman -- Loop Capital Markets -- Analyst

69 million. OK, thank you. OK. Let me shift gears on final mile because, obviously, I think that was the big surprise relative to expectations.

So when you look at this, Mike and Brett, is this an issue where the industry acted in a way you didn't anticipate or is this more of a growing pain, and this kind of happens from time to time in the fourth quarter and it just caught us off guard?

Mike Pettit -- Chief Financial Officer

I would say it was more of a growing pain, Jeff, where you had a business that was growing rapidly through 2018, 2019. We're simultaneously putting in business process improvements that we believe will bear fruit over the long term that got hit with a shift in the market more from a mix and demand profile perspective and overall weakening that kind of got the business in a position where they were struggling to flow products, as well as they had earlier in the year.

Jeff Kauffman -- Loop Capital Markets -- Analyst

All right. So this would be something that once you resolve what you need to resolve at your end. Your view on the ultimate profitability or the ultimate opportunity is no different?

Mike Pettit -- Chief Financial Officer

The long-term view of the performance of the business has not changed at all.

Jeff Kauffman -- Loop Capital Markets -- Analyst

OK, so when you're saying it's a change in product mix, it's not that the market is shifting, it's just that the fourth quarter caught you off guard is what you're saying?

Mike Pettit -- Chief Financial Officer

The specific mix in the fourth quarter caught us off guard, right.

Brent Yeagy -- President and Chief Executive Officer

Yes. To be very operational, when you talk about it, this business, you're doing discrete capacity planning, typically two to three months in advance based on order flow into that business. And you're having to make decisions on how you're going to operate in that, it's built in differently than how we have positioned the business. And it affected not only the shop floor, but the average order size, it affected everything to engineering to supply chain, just simply an average order size phenomenon.

It just came out that way, right? So it will take care of itself as we move through the year.

Jeff Kauffman -- Loop Capital Markets -- Analyst

OK, and then final question. You mentioned there's a lot of exciting new products coming to market in 2020. Can you give us an idea of the timing of different product introductions through the year? I think you said a little more back-half loaded, but when are some of these products coming out? And are they going to be visible at truck shows and things like that early in the year? Is it going to be something where we see more of this toward the end of the year?

Brent Yeagy -- President and Chief Executive Officer

Yeah. So the bulk of the commercialization efforts are launched. They will phase in throughout 2020. We've launched our new perforated core DuraPlate count.

We have active orders that we deployed really in the fourth quarter, opened up for sales in 2019 to fill into the 2020 backlog. That has, I wouldn't say met our expectations in terms of product adoption. Aside from that an innovative piece, it's also a margin-enhancing opportunity for CTP. We've continued -- we've just launched our new revised Eagle II platform trailer.

And that is now active for orders right now and will gain momentum throughout the year. We've got a handful of smaller innovation items within our tank trailer business, motor structural composites, specifically the refrigerated trailer is going through additional revisions right now to broaden the, we'll call it, addressable market for that product that we'll see in the second half of 2020. And we're doing additional things with motor structural composite truck bodies to enlarge its applicable market in 2020. That's going to be a second half of the year phenomenon.

Mike, you want to say anything on top of that?

Mike Pettit -- Chief Financial Officer

I think you've got most of them.

Brent Yeagy -- President and Chief Executive Officer

Got it.

Jeff Kauffman -- Loop Capital Markets -- Analyst

OK, great guys. Congratulations, and thank you.

Mike Pettit -- Chief Financial Officer

Thanks, Jeff.

Brent Yeagy -- President and Chief Executive Officer

Thanks, Jeff.

Operator

I am showing no further questions at this time. I would now like to turn the conference back to Mr. Reed.

Ryan Reed -- Director of Investor Relations

Thanks, Katrina, and thanks, everyone, for joining us today. We look forward to following up during the quarter.

Operator

[Operator signoff]

Duration: 51 minutes

Call participants:

Ryan Reed -- Director of Investor Relations

Brent Yeagy -- President and Chief Executive Officer

Justin Long -- Stephens Inc. -- Analyst

Mike Pettit -- Chief Financial Officer

Felix Boeschen -- Raymond James -- Analyst

Ryan Sigdahl -- Craig-Hallum Capital Group LLC -- Analyst

Joel Tiss -- BMO Capital Markets -- Analyst

Jeff Kauffman -- Loop Capital Markets -- Analyst

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