Wabash Q4 2025 Wabash National Corp Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Wabash National Corp Earnings Call
Remarks. We will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand.
I will now hand the conference over to John Cummings, senior director of fpna and investor relations. Please go ahead.
Thank you and good afternoon, everyone. We appreciate you joining us on this call.
With me today are Brent, yagi, president and chief executive officer?
Pat, keslin Chief Financial Officer and Mike Pettit Chief growth officer.
Before we get started, please note that this call is being recorded. I'd also like to point out that our earnings release the slide presentation supplement in today's call and any non-gaap reconciliations are available at ir1 wach.com
Please refer to slide 2 in our earnings deck for the company's Safe. Harbor disclosure addressing forward-looking statements.
I'll hand it off now to Brent.
Before turning to the fourth quarter results in Outlook, I want to reflect briefly on 2025.
It was a challenging year across the transportation industry with prolonged softness and demand and heightened uncertainty affecting customers spending decisions. While these conditions, pressured our financial results, they also tested, and ultimately reinforced, the strength and resilience of our organization.
Throughout the year, we remain disciplined, and proactive preserving, a strong balance sheet, maintaining liquidity and taking actions to align. Our cost structure with market conditions, that Financial resilience gives us flexibility as we navigate the near-term and positions as well to respond. When demand begins to recover.
Most importantly, I want to thank our employees and a difficult operating environment. Our team stepped up with professionalism, adaptability and unwavering commitment to our customers and each other.
Their efforts enabled us to continue executing supporting our customers and making progress on key. Strategic priorities. Even in a down cycle.
As we look ahead, we believe that the actions taken in 2025 have strengthened Wall, Bashas foundation and improved their ability to perform through the cycle.
John: Chief Growth Officer. Before we get started, 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 available at ir.onewabash.com. Please refer to slide two in our earnings deck for the company's safe harbor disclosure addressing forward-looking statements. I'll hand it off now to Brent.
John Cummings: Chief Growth Officer. Before we get started, 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 available at ir.onewabash.com. Please refer to slide two in our earnings deck for the company's safe harbor disclosure addressing forward-looking statements. I'll hand it off now to Brent.
Speaker #1: Growth Officer. Before we get started, 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 available at ir.onewabash.com.
While we continue to execute in a challenging environment, in the near term, we enter 2026 with great. Operational flexibility, a resilient balance sheet and competence in our long-term strategy.
As we close out the fourth quarter conditions across the transportation industry, remain challenging, and continue to pressure. Our near-term financial performance
Speaker #1: Please refer to slide two in our earnings deck for the company's safe harbor disclosure addressing forward-looking statements. I'll hand it off now to Brent.
While we are beginning to see early incremental sides of stabilization in certain parts of the freight Transportation Market.
It is not reached the level of sustained magnitude to positively Drive increased demand for our products and services yet.
Brent Yeagy: Thanks, John. Before turning to the fourth quarter results and outlook, I want to reflect briefly on 2025. It was a challenging year across the transportation industry, with prolonged softness in demand and heightened uncertainty affecting customer spending decisions. While these conditions pressured our financial results, they also tested and ultimately reinforced the strength and resilience of our organization. Throughout the year, we remained disciplined and proactive, preserving a strong balance sheet, maintaining liquidity, and taking actions to align our cost structure with market conditions. That financial resilience gives us flexibility as we navigate the near term and positions us well to respond when demand begins to recover. Most importantly, I want to thank our employees. In a difficult operating environment, our team stepped up with professionalism, adaptability, and unwavering commitment to our customers and each other.
Brent Yeagy: Thanks, John. Before turning to the fourth quarter results and outlook, I want to reflect briefly on 2025. It was a challenging year across the transportation industry, with prolonged softness in demand and heightened uncertainty affecting customer spending decisions. While these conditions pressured our financial results, they also tested and ultimately reinforced the strength and resilience of our organization. Throughout the year, we remained disciplined and proactive, preserving a strong balance sheet, maintaining liquidity, and taking actions to align our cost structure with market conditions. That financial resilience gives us flexibility as we navigate the near term and positions us well to respond when demand begins to recover. Most importantly, I want to thank our employees. In a difficult operating environment, our team stepped up with professionalism, adaptability, and unwavering commitment to our customers and each other.
Please remain cautious Capital spending decisions, continue to be highly managed. And as a result, our fourth quarter performance came in below expectations.
We also expect that demand environment are in difficult as we move into the first quarter as customers seek sustainability in the current early signs of a Freight Market rebound.
Before turning to the fourth quarter results and outlook, I want to reflect briefly on 2025. It was a challenging year across the transportation industry, with prolonged softness in demand and heightened uncertainty affecting customer spending decisions. While these conditions pressured our financial results, they also tested, and ultimately reinforced, the strength and resilience of our organization.
Across our end markets demand remains soft as Freight construction and Industry activity. Continued to operate below. Normalized levels that said there are some encouraging indicators developing beneath the surface.
Great volumes have begun to stabilize off. Recent lows dealer inventories, remain lean and legalization. Rates are gradually improving.
Throughout the year, we remain disciplined and proactive, preserving a strong balance sheet, maintaining liquidity, and taking actions to align our cost structure with market conditions. That financial resilience gives us flexibility as we navigate the near term and positions us well to respond when demand begins to recover.
However, these early signs of, yet to translate into increased order activity. And then we do not expect them to have a material impact on our financial results in the near term.
Brent Yeagy: Their efforts enabled us to continue executing, supporting our customers, and making progress on key strategic priorities, even in a down cycle. As we look ahead, we believe the actions taken in 2025 have strengthened Wabash's foundation and improved our ability to perform through the cycle. While we continue to execute in a challenging environment in the near term, we enter 2026 with great operational flexibility, a resilient balance sheet, and confidence in our long-term strategy. As we closed out Q4, conditions across the transportation industry remained challenging, and continue to pressure our near-term financial performance. While we are beginning to see early incremental signs of stabilization in certain parts of the freight transportation market, it has not reached a level of sustained magnitude to positively drive increased demand for our products and services yet.
Brent Yeagy: Their efforts enabled us to continue executing, supporting our customers, and making progress on key strategic priorities, even in a down cycle. As we look ahead, we believe the actions taken in 2025 have strengthened Wabash's foundation and improved our ability to perform through the cycle. While we continue to execute in a challenging environment in the near term, we enter 2026 with great operational flexibility, a resilient balance sheet, and confidence in our long-term strategy. As we closed out Q4, conditions across the transportation industry remained challenging, and continue to pressure our near-term financial performance. While we are beginning to see early incremental signs of stabilization in certain parts of the freight transportation market, it has not reached a level of sustained magnitude to positively drive increased demand for our products and services yet.
Most importantly, I want to thank our employees during a difficult operating environment. Our team stepped up with professionalism, adaptability, and unwavering commitment to our customers and each other.
More broadly, the industry continues to work through an extended break downturn with replacement Cycles lengthening and Order patterns remaining uneven.
Their efforts enabled us to continue executing supporting our customers and making progress on key. Strategic priorities. Even in a down cycle.
While this environment is contributing to Growing pent-up demand, as the industry has been well below replacement levels for multiple years, visibility remains limited and the timing of a broader recovery remains uncertain.
As we look ahead, we believe the actions taken in 2025 have strengthened Wabash's foundation and improved our ability to perform through the cycle.
Against this backdrop, our Focus remains on what we can control.
We are taking additional actions to align costs with demand.
While we continue to execute in a challenging environment, in the near term, we enter 2026 with great operational flexibility, a resilient balance sheet, and confidence in our long-term strategy.
Reserve liquidity protect margins while continuing to pursue market, share opportunities and invest selectively in areas that strengthen our long-term positions.
Notably our parts and service business. Again, delivered sequential and year-over-year growth in the court.
As we close out the fourth quarter conditions across the transportation industry, remain challenging, and continue to pressure. Our near-term financial performance
Underscoring, its resilience and its role in providing stability through the cycle.
While we are beginning to see early incremental signs of stabilization in certain parts of the freight Transportation Market.
While near-term headwinds persist.
Our long-term conviction is not changed.
Brent Yeagy: Fleets remain cautious, capital spending decisions continue to be highly managed, and as a result, our Q4 performance came in below expectations. We also expect the demand environment to remain difficult as we move into Q1, as customers seek sustainability in the current early signs of a freight market rebound. Across our end markets, demand remains soft as freight, construction, and industry activity continue to operate below normalized levels. That said, there are some encouraging indicators developing beneath the surface. Freight volumes have begun to stabilize off recent lows, dealer inventories remain lean, and fleet utilization rates are gradually improving. However, these early signs have yet to translate into increased order activity, and we do not expect them to have a material impact on our financial results in the near term.
Brent Yeagy: Fleets remain cautious, capital spending decisions continue to be highly managed, and as a result, our Q4 performance came in below expectations. We also expect the demand environment to remain difficult as we move into Q1, as customers seek sustainability in the current early signs of a freight market rebound. Across our end markets, demand remains soft as freight, construction, and industry activity continue to operate below normalized levels. That said, there are some encouraging indicators developing beneath the surface. Freight volumes have begun to stabilize off recent lows, dealer inventories remain lean, and fleet utilization rates are gradually improving. However, these early signs have yet to translate into increased order activity, and we do not expect them to have a material impact on our financial results in the near term.
It has not reached the level of sustained magnitude to positively drive increased demand for our products and services yet.
We believe the early signs of Industry stabilization combined with structural progress, we've made across the organization position while Bosch to respond powerfully, when demand begins to normalize.
Please remain cautious. Capital spending decisions continue to be highly managed, and as a result, our fourth quarter performance came in below expectations.
Until then we remain focused on disciplined execution and financial Prudence. As we navigate the current environment.
We also expect that the demand environment will be difficult as we move into the first quarter, as customers seek sustainability in the current early signs of a freight market rebound.
Ocean.
Across their end, markets, demand remains soft as Freight construction and Industry activity. Continued to operate below. Normalized levels. That said there are some encouraging indicators developing beneath the surface.
These actions were taken to better align our production capacity with current demand levels and to manage near-term, operating costs. But are also part of a longer-term play to reduce overall fixed costs and other cost drivers over the next Market cycle.
Freight volumes have begun to stabilize off recent lows. Dealer inventories remain lean and bleed. Utilization rates are gradually improving.
However, these early signs, if you have to translate them into increased order activity, we do not expect to have a material impact on our financial results in the near term.
Brent Yeagy: More broadly, the industry continues to work through an extended freight downturn, with replacement cycles lengthening and order patterns remaining uneven. While this environment is contributing to growing pent-up demand, as the industry has been well below replacement levels for multiple years, visibility remains limited and the timing of a broader recovery remains uncertain. Against this backdrop, our focus remains on what we can control. We are taking additional actions to align costs with demand, reserve liquidity, protect margins, while continuing to pursue market share opportunities and invest selectively in areas that strengthen our long-term position. Notably, our parts and service business again delivered sequential and year-over-year growth in the quarter, underscoring its resilience and its role in providing stability through the cycle. While near-term headwinds persist, our long-term conviction has not changed.
Brent Yeagy: More broadly, the industry continues to work through an extended freight downturn, with replacement cycles lengthening and order patterns remaining uneven. While this environment is contributing to growing pent-up demand, as the industry has been well below replacement levels for multiple years, visibility remains limited and the timing of a broader recovery remains uncertain. Against this backdrop, our focus remains on what we can control. We are taking additional actions to align costs with demand, reserve liquidity, protect margins, while continuing to pursue market share opportunities and invest selectively in areas that strengthen our long-term position. Notably, our parts and service business again delivered sequential and year-over-year growth in the quarter, underscoring its resilience and its role in providing stability through the cycle. While near-term headwinds persist, our long-term conviction has not changed.
We continue to evaluate or manufacturing footprint and cost structure now and into the future. And we will adjust our operations as appropriate to reflect near-term reality, and the improve our overall cost structure when producing at scale.
More broadly. The industry continues to work through an extended breakdown turn with replacement Cycles, lengthening and Order patterns remaining uneven.
The idling of Our Little Falls and go to facilities resulted in a proximately 16 million dollars of total charges during the quarter, all of which were non-cash.
While this environment is contributing to growing pent-up demand, as the industry has been well below replacement levels for multiple years, visibility remains limited and the timing of a broader recovery remains uncertain.
Against this backdrop, our focus remains on what we can control.
We are taking additional actions to align costs with demand.
Reserve liquidity, protect margins.
While continuing to pursue market, share opportunities, and invest selectively in areas that strengthen our long-term positions.
We expect to recognize an additional 4 to 5 million in charges, in the first half of 2026 of which approximately 1 to 2 million dollars is expected to result. In cash, expenditures primarily related to Severance and other exit related costs. These actions are expected to generate approximately 10 million dollars on ongoing annualized cost savings primarily related to fixed manufacturing overhead and operating expenses as we align. Our cost structure with current demand levels, we will continue to evaluate the timing and magnitude of these impacts as the actions are fully implemented.
Notably our parts and service business. Again, delivered sequential and year-over-year growth in the court.
Underscoring, its resilience and its role in providing stability through the cycle.
While near-term headwinds persist.
2026 trailer quoting in Q4 reflected a highly competitive market as the industry navigates, the bottom of the current protracted Market cycle.
Brent Yeagy: We believe the early signs of industry stabilization, combined with structural progress we've made across the organization, position Wabash to respond powerfully when demand begins to normalize. Until then, we remain focused on disciplined execution and financial prudence as we navigate the current environment. During the quarter, we implemented additional cost actions in response to current market conditions, including the idling of our manufacturing facilities in Little Falls and Goshen. These actions were taken to better align our production capacity with current demand levels and to manage near-term operating costs, but are also part of a longer-term play to reduce overall fixed costs and other cost drivers over the next market cycle. We continue to evaluate our manufacturing footprint and cost structure now and into the future, and we will adjust our operations as appropriate to reflect near-term reality and to improve our overall cost structure when producing at scale.
Brent Yeagy: We believe the early signs of industry stabilization, combined with structural progress we've made across the organization, position Wabash to respond powerfully when demand begins to normalize. Until then, we remain focused on disciplined execution and financial prudence as we navigate the current environment. During the quarter, we implemented additional cost actions in response to current market conditions, including the idling of our manufacturing facilities in Little Falls and Goshen. These actions were taken to better align our production capacity with current demand levels and to manage near-term operating costs, but are also part of a longer-term play to reduce overall fixed costs and other cost drivers over the next market cycle. We continue to evaluate our manufacturing footprint and cost structure now and into the future, and we will adjust our operations as appropriate to reflect near-term reality and to improve our overall cost structure when producing at scale.
Volume lead pricing and we look forward to a more balanced Market as we move through 2026 and into the 2027 Order season later this year.
Our long-term conviction has not changed. We believe the early signs of industry stabilization, combined with structural progress we've made across the organization, position Wabash to respond powerfully when demand begins to normalize.
Until then we remain focused on disciplined execution and financial Prudence. As we navigate the current environment.
Separately, the domestic trailer industry has filed, anti-dumping and countervailing Duty petitions with the US Department of Commerce and US International Trade Commission, concerning certain imported Trailer Products.
The agencies have initiated formal investigations which are currently in the early stages.
As part of the process, the Department of Commerce will guide away, whether Imports are being sold at less than their fair value or our subsidized. While the International Trade Commission will assess, whether the domestic industry has been materially injured.
During the quarter, we implemented additional cost actions in response to current market conditions, including the islanding of our manufacturing facilities in Little Falls and Ocean. These actions were taken to better align our production capacity with current demand levels and to manage near-term operating costs, but are also part of a longer-term play to reduce overall fixed costs and other cost drivers over the next market cycle.
The international trade commission's, preliminary determination is currently expected on or about February 6th.
Brent Yeagy: The idling of our Little Falls and Goshen facilities resulted in approximately $60 million of total charges during the quarter, all of which were non-cash. We expect to recognize an additional $4 to 5 million in charges in the first half of 2026, of which approximately $1 to 2 million is expected to result in cash expenditures, primarily related to severance and other exit-related costs. These actions are expected to generate approximately $10 million in ongoing annualized cost savings, primarily related to fixed manufacturing overhead and operating expenses, as we align our cost structure with current demand levels. We will continue to evaluate the timing and magnitude of these impacts as the actions are fully implemented. 2026 trailer quoting in Q4 reflected a highly competitive market as the industry navigates the bottom of the current protracted market cycle.
Brent Yeagy: The idling of our Little Falls and Goshen facilities resulted in approximately $60 million of total charges during the quarter, all of which were non-cash. We expect to recognize an additional $4 to 5 million in charges in the first half of 2026, of which approximately $1 to 2 million is expected to result in cash expenditures, primarily related to severance and other exit-related costs. These actions are expected to generate approximately $10 million in ongoing annualized cost savings, primarily related to fixed manufacturing overhead and operating expenses, as we align our cost structure with current demand levels. We will continue to evaluate the timing and magnitude of these impacts as the actions are fully implemented. 2026 trailer quoting in Q4 reflected a highly competitive market as the industry navigates the bottom of the current protracted market cycle.
We continue to evaluate our manufacturing footprint and cost structure now and into the future. And we will adjust our operations as appropriate to reflect near-term reality and to improve our overall cost structure. When producing at scale.
So the date to be impacted by government shutdown. And preliminary determinations from the Commerce Department are expected later in the year with final determinations, following their after.
We will continue to monitor the process as it progresses.
Facilities resulted in approximately 16 million dollars of total charges during the quarter, all of which were non-cash.
Turning to the broader Market. Environment demand across both the trailer and truck body Industries, remain soft. While conditions on the ground are improving for our customers. We have limited visibility in the timing pace and sustainability of the Freight Market recovery with that said, the underlying conditions for a strong trailer demand response is growing once the Freight Market recovery threshold is met and our customers, look to recapture profitability and get back to a growth mindset.
We expect to recognize an additional $4 to $5 million in charges in the first half of 2026, of which approximately $1 to $2 million is expected to result in cash expenditures, primarily related to severance and other exit-related costs. These actions are expected to generate approximately $10 million in ongoing annualized cost savings, primarily related to fixed manufacturing overhead and operating expenses, as we align our cost structure with current demand levels. We will continue to evaluate the timing and magnitude of these impacts as the actions are fully implemented.
Brent Yeagy: Volume leads pricing, and we look forward to a more balanced market as we move through 2026 and into the 2027 order season later this year. Separately, the domestic trailer industry has filed antidumping and countervailing duty petitions with the US Department of Commerce and the US International Trade Commission concerning certain imported trailer products. The agencies have initiated formal investigations, which are currently in the early stages. As part of the process, the Department of Commerce will evaluate whether imports are being sold at less than their fair value or are subsidized, while the International Trade Commission will assess whether domestic industry has been materially injured. The International Trade Commission's preliminary determination is currently expected on or about 6 February, though the date could be impacted by government shutdown, and preliminary determinations from the Commerce Department are expected later in the year, with final determinations following thereafter.
Brent Yeagy: Volume leads pricing, and we look forward to a more balanced market as we move through 2026 and into the 2027 order season later this year. Separately, the domestic trailer industry has filed antidumping and countervailing duty petitions with the US Department of Commerce and the US International Trade Commission concerning certain imported trailer products. The agencies have initiated formal investigations, which are currently in the early stages. As part of the process, the Department of Commerce will evaluate whether imports are being sold at less than their fair value or are subsidized, while the International Trade Commission will assess whether domestic industry has been materially injured. The International Trade Commission's preliminary determination is currently expected on or about 6 February, though the date could be impacted by government shutdown, and preliminary determinations from the Commerce Department are expected later in the year, with final determinations following thereafter.
2026 trailer quoting in Q4 reflected a highly competitive market as the industry navigates the bottom of the current protracted market cycle.
But for now, our customers continuing to defer Capital spending decisions and Order patterns remain uneven, reflecting a highly managed near-term, reality across Freight construction and Industrial and markets. Given these conditions in the current lack of visibility, we are providing guidance only for the first quarter of 2026 and are not fully issuing full year 2026 guidance at this time.
Volume leads pricing and we look forward to a more balanced Market as we move through 2026 and into the 2027 Order season later this year.
Separately, the domestic trailer industry has filed anti-dumping and countervailing duty petitions with the U.S. Department of Commerce and the U.S. International Trade Commission concerning certain imported trailer products.
For the first quarter, we expect Revenue to be in the range of 310 million to 330 million and adjusted earnings per share to be in the range of -95 cents to $15 based on current order activity and customer discussions, we expect the first quarter to be the weakest of the year, in terms of Revenue and operating margins.
The agencies have initiated formal investigations which are currently in the early stages.
While near-term conditions, remain challenging customer engagement around 2026, purchasing decisions is ongoing and many free order commitments for the year. Remain open and active.
It positive departure from historic norms for this period of the sales cycle for trailers.
As part of the process, the Department of Commerce will evaluate whether Imports are being sold at less than their fair value or subsidized. While the International Trade Commission will assess, whether domestic industry has been materially injured,
The International Trade Commission's preliminary determination is currently expected on or about February 6.
Based on these discussions, and early order activity, We Believe fully year, 2026 revenue, and operating margin is likely to be higher than 2025. Even though the timing and shape of the demand recovery remains uncertain.
Brent Yeagy: We will continue to monitor the process as it progresses. Turning to the broader market environment, demand across both the trailer and truck body industries remains soft. While conditions on the ground are improving for our customers, we have limited visibility into timing, pace, and sustainability of the freight market recovery. With that said, the underlying conditions for a strong trailer demand response is growing once the freight market recovery threshold is met and our customers look to recapture profitability and get back to a growth mindset. But for now, our customers continue to defer capital spending decisions, and order patterns remain uneven, reflecting a highly managed near-term reality across freight, construction, and industrial end markets. Given these conditions and the current lack of visibility, we are providing guidance only for Q1 2026 and are not fully issuing full-year 2026 guidance at this time.
Brent Yeagy: We will continue to monitor the process as it progresses. Turning to the broader market environment, demand across both the trailer and truck body industries remains soft. While conditions on the ground are improving for our customers, we have limited visibility into timing, pace, and sustainability of the freight market recovery. With that said, the underlying conditions for a strong trailer demand response is growing once the freight market recovery threshold is met and our customers look to recapture profitability and get back to a growth mindset. But for now, our customers continue to defer capital spending decisions, and order patterns remain uneven, reflecting a highly managed near-term reality across freight, construction, and industrial end markets. Given these conditions and the current lack of visibility, we are providing guidance only for Q1 2026 and are not fully issuing full-year 2026 guidance at this time.
though the date to the impact is by government shutdown, and preliminary determinations from the Commerce Department are expected later in the year with final determinations following thereafter,
We will continue to monitor the process as it progresses.
We will continue to evaluate market conditions and customer activity as the year progresses and expect to provide additional guidance. Once visibility improves as always, our Focus remains on discipline execution, maintaining liquidity and positioning the business through capture profitable growth as market conditions stabilize. I'll now turn the call over to Mike for his comments.
Turning to the broader market, environment demand across both the trailer and truck body industries remains soft. While conditions on the ground are improving for our customers, we have limited visibility into the timing, pace, and sustainability of the freight market recovery. With that said, the underlying conditions for a strong trailer demand response are growing once the freight market recovery threshold is met and our customers look to recap for profitability and get back to a growth mindset.
But for now, our customers continue to defer capital spending decisions, and order patterns remain uneven, reflecting a highly managed near-term reality across freight, construction, and industrial markets.
Thanks, Brent. When we formed this segment 4 years ago, we were very clear about the role Parts and Services could play in sidewalks. Extending customer value beyond the original equipment sales while generating higher margin, more predictable Revenue that thesis continues to be validated despite a challenging Freight environment. The segment delivered, another sell a quarter reinforcing, our belief that Parts and Services is becoming a more durable and resilient earning stream through the cycle.
Brent Yeagy: For Q1, we expect our revenue to be in the range of $310 to 330 million and Adjusted Earnings Per Share to be in the range of -$0.95 to -$0.05. Based on current order activity and customer discussions, we expect Q1 to be the weakest of the year in terms of revenue and operating margins. While near-term conditions remain challenging, customer engagement around 2026 purchasing decisions is ongoing, and many fleet order commitments for the year remain open and active, a positive departure from historic norms for this period of the sales cycle for trailers. Based on these discussions and early order activity, we believe full-year 2026 revenue and operating margin is likely to be higher than 2025, even though the timing and shape of the demand recovery remains uncertain.
Brent Yeagy: For Q1, we expect our revenue to be in the range of $310 to 330 million and Adjusted Earnings Per Share to be in the range of -$0.95 to -$0.05. Based on current order activity and customer discussions, we expect Q1 to be the weakest of the year in terms of revenue and operating margins. While near-term conditions remain challenging, customer engagement around 2026 purchasing decisions is ongoing, and many fleet order commitments for the year remain open and active, a positive departure from historic norms for this period of the sales cycle for trailers. Based on these discussions and early order activity, we believe full-year 2026 revenue and operating margin is likely to be higher than 2025, even though the timing and shape of the demand recovery remains uncertain.
Given these conditions in the current lack of visibility, we are providing guidance only for the first quarter of 2026 and are not fully issuing full year 2026 guidance at this time.
The broader OE equipment Market remains down more than 40% from its 2023 Peak.
For the first quarter, we expect Revenue to be in the range of 310 million to 330 million and adjusted earnings per share to be in the range of -95 cents to negative dollar 5 cents based on current order activity and customer discussions. We expect the first quarter to be the weakest of the year in terms of Revenue and operating margins.
Fourth quarter margins, continue to be soft as we work through. Weak demand in our higher margin. OE Parks business and continue to absorb startup costs associated with recent update expansions while margins remain below our longer term expectations, the underlying trajectory remains intact. Over time, we continue to expect this business to operate in the High Teens ibaas.
While near-term conditions remain challenging, customer engagement around 2026 purchasing decisions is ongoing, and many fleet order commitments for the year remain open and active.
A positive departure from historic norms for this period of the sales cycle for trailers.
Brent Yeagy: We will continue to evaluate market conditions and customer activity as the year progresses and expect to provide additional guidance once visibility improves. As always, our focus remains on disciplined execution, maintaining liquidity, and positioning the business to recapture profitable growth as market conditions stabilize. I'll now turn the call over to Mike for his comments.
Brent Yeagy: We will continue to evaluate market conditions and customer activity as the year progresses and expect to provide additional guidance once visibility improves. As always, our focus remains on disciplined execution, maintaining liquidity, and positioning the business to recapture profitable growth as market conditions stabilize. I'll now turn the call over to Mike for his comments.
Based on these discussions and early order activity, we believe full-year 2026 revenue and operating margin is likely to be higher than 2025, even though the timing and shape of the demand recovery remains uncertain.
Let me say again in the fourth quarter, the segment grew 33% year-over-year and approximately 6% sequentially. Even as the broader early Market remains down, more than 40% from the 2023 Peak growth. In this environment, gives us confidence that what we're seeing here is structural not cyclical and reinforces the Strategic importance of this segment, to our Enterprise, our confidence continues to grow, that we are building an exciting foundation for continued, and more profitable growth within this segment, that will heavily leveraged improving market conditions.
Mike Pettit: Thanks, Brent. When we formed this segment four years ago, we were very clear about the role parts and services could play inside Wabash. Extending customer value beyond the original equipment sale, while generating higher margin, more predictable revenue. That thesis continues to be validated. Despite a challenging freight environment, the segment delivered another solid quarter, reinforcing our belief that parts and services is becoming a more durable and resilient earnings stream through the cycle. In the fourth quarter, the segment grew 33% year-over-year and approximately 6% sequentially, even as the broader OE equipment market remains down more than 40% from its 2023 peak. Fourth quarter margins continue to be soft as we work through weak demand in our higher-margin OE parts business and continue to absorb startup costs associated with recent upfit expansions.
Mike Pettit: Thanks, Brent. When we formed this segment four years ago, we were very clear about the role parts and services could play inside Wabash. Extending customer value beyond the original equipment sale, while generating higher margin, more predictable revenue. That thesis continues to be validated. Despite a challenging freight environment, the segment delivered another solid quarter, reinforcing our belief that parts and services is becoming a more durable and resilient earnings stream through the cycle. In the fourth quarter, the segment grew 33% year-over-year and approximately 6% sequentially, even as the broader OE equipment market remains down more than 40% from its 2023 peak. Fourth quarter margins continue to be soft as we work through weak demand in our higher-margin OE parts business and continue to absorb startup costs associated with recent upfit expansions.
We will continue to evaluate market conditions and customer activity as the year progresses and expect to provide additional guidance. Once visibility improves, as always, our focus remains on discipline and execution, maintaining liquidity, and positioning the business to capture profitable growth as market conditions stabilize. I'll now turn the call over to Mike for his comments.
1 of the strongest proof points behind the momentum continues to be our upfit business. Upfit allows us to deliver fully customized equipment in weeks, rather than months, pairing the scale and efficiency of our manufacturing footprint with the customer service, that defines parts and services.
In the fourth quarter, we shipped approximately 550 units, bringing fully your volume to roughly 2,050 units.
2025, full year volume, is more than double our 2023 volume, demonstrating the growth we're experiencing in the space, despite a weaker overall demand environment.
Thanks, Brent. When we formed this segment four years ago, we were very clear about the role Parts and Services could play in Sidewalks, extending customer value beyond the original equipment sale. While generating higher-margin, more predictable revenue, that thesis continues to be validated despite a challenging freight environment. The segment delivered another solid quarter, reinforcing our belief that Parts and Services is becoming a more durable and resilient earnings stream through the cycle.
As discussed previously. We opened 3, new outfit centers in the second half of 2025, Northwest, Indiana, Atlanta, and Phoenix. These new sites materially expand our Geographic, reach and position us to exceed, 25,500 units in 2026. And we continue to see multiple Pathways for continued growth in this business, well, into the future.
In the fourth quarter, the segment, grew 33% year-over-year and approximately 6% sequentially. Even as the broader OE equipment Market remains down more than 40% from its 2023 Peak.
Mike Pettit: While margins remain below our longer-term expectations, the underlying trajectory remains intact. Over time, we continue to expect this business to operate in the high teens EBITDA. Let me say again, in Q4, the segment grew 33% year-over-year and approximately 6% sequentially, even as the broader OE market remains down more than 40% from its 2023 peak. Growth in this environment gives us confidence that what we're seeing here is structural, not cyclical, and reinforces the strategic importance of this segment to our enterprise. Our confidence continues to grow that we are building an exciting foundation for continued and more profitable growth within this segment that will heavily leverage improving market conditions. One of the strongest proof points behind the momentum continues to be our upfit business.
Mike Pettit: While margins remain below our longer-term expectations, the underlying trajectory remains intact. Over time, we continue to expect this business to operate in the high teens EBITDA. Let me say again, in Q4, the segment grew 33% year-over-year and approximately 6% sequentially, even as the broader OE market remains down more than 40% from its 2023 peak. Growth in this environment gives us confidence that what we're seeing here is structural, not cyclical, and reinforces the strategic importance of this segment to our enterprise. Our confidence continues to grow that we are building an exciting foundation for continued and more profitable growth within this segment that will heavily leverage improving market conditions. One of the strongest proof points behind the momentum continues to be our upfit business.
Fourth quarter margins, continue to be soft as we work through. Weak demand in our higher margin. OE Parks business and continue to absorb startup costs associated with recent update expansions
Our efforts to expand digital product enablement, and our trailers as a service, or task service concept continues to grow while Bashas Innovation leadership through the generation of a much deeper. Understanding of challenges. Our customers are facing allowing us to bring physical digital and business model Innovation to life.
While margins remain below our longer-term expectations, the underlying trajectory remains intact. Over time, we continue to expect this business to operate in the high teens EBITDA.
We continue to expand the Leisure of shippers carriers and Brokers North America. Who look to bundle preventive maintenance programs, operational and maintenance based telematic Solutions Nationwide, uptime support and repair and service management with trailer assets to enable their growth needs.
we will be showcasing our cargo Assurance solution at manifest in Las Vegas in February and at TMC in Nashville, in March,
For the segment group, we saw 33% year-over-year growth and approximately 6% sequentially, even as the broader OEM market remains down more than 40% from the 2023 peak growth. In this environment, it gives us confidence that what we're seeing here is structural, not cyclical, and reinforces the strategic importance of this segment to our enterprise. Our confidence continues to grow that we are building an exciting foundation for continued and more profitable growth within this segment, that will heavily leverage improving market conditions.
Mike Pettit: Upfit allows us to deliver fully customized equipment in weeks rather than months, pairing the scale and efficiency of our manufacturing footprint with the customer service that defines parts and services. In the fourth quarter, we shipped approximately 550 units, bringing full-year volume to roughly 2,050 units. 2025 full-year volume is more than double our 2023 volume, demonstrating the growth we are experiencing in this space despite a weaker overall demand environment. As discussed previously, we opened three new upfit centers in the second half of 2025: Northwest Indiana, Atlanta, and Phoenix. These new sites materially expand our geographic reach and position us to exceed 2,500 units in 2026, and we continue to see multiple pathways for continued growth in this business well into the future.
Mike Pettit: Upfit allows us to deliver fully customized equipment in weeks rather than months, pairing the scale and efficiency of our manufacturing footprint with the customer service that defines parts and services. In the fourth quarter, we shipped approximately 550 units, bringing full-year volume to roughly 2,050 units. 2025 full-year volume is more than double our 2023 volume, demonstrating the growth we are experiencing in this space despite a weaker overall demand environment. As discussed previously, we opened three new upfit centers in the second half of 2025: Northwest Indiana, Atlanta, and Phoenix. These new sites materially expand our geographic reach and position us to exceed 2,500 units in 2026, and we continue to see multiple pathways for continued growth in this business well into the future.
We are taking a new approach to overcoming the growing cargo theft challenges. With our trailer Hawk technology platform with this platform. We'll be highlighting how the trailer itself becomes part of the secure connected system that helps prevent theft.
One of the strongest proof points behind the momentum continues to be our Upfit business. Upfit allows us to deliver fully customized equipment in weeks, rather than months, pairing the scale and efficiency of our manufacturing footprint with the customer service that defines parts and services.
We've continued to invest in both physical and digital Readiness during the downturn ensuring, we're well positioned to scale when the market rebounds with more Innovative and valuable solutions for our customers.
In the fourth quarter, we ship approximately 550 units, bringing full-year volume to roughly 2,050 units.
2025 full-year volume is more than double that of 2023 volume, demonstrating the growth we're experiencing in this space despite a weaker overall demand environment.
We also remain convinced that flexible capacity Solutions, such as tasks will become increasingly attractive to our customers. As they look for innovative ways to acquire capacity and operate in an increasingly challenging business liability and Regulatory environment.
As discussed previously, we opened 3 new, upfit centers in the second half of 2025, Northwest, Indiana, Atlanta, and Phoenix. These new sites materially expand our Geographic, reach and position us to exceed, 25,500 units in 2026. And we continue to see multiple Pathways for continued growth in this business, well, into the future.
Mike Pettit: Our efforts to expand digital product enablement and our Trailers as a Service, or TaaS, service concept continues to grow Wabash's innovation leadership through the generation of a much deeper understanding of challenges our customers are facing, allowing us to bring physical, digital, and business model innovation to life. We continue to expand the ledger of shippers, carriers, and brokers across North America who look to bundle preventive maintenance programs, operational and maintenance-based telematics solutions, nationwide uptime support, and repair and service management with trailer assets to enable their growth needs. We will be showcasing our Cargo Assurance solution at Manifest in Las Vegas in February and at TMC in Nashville in March. We are taking a new approach to overcoming the growing cargo theft challenges with our Trailer Hawk technology platform.
Mike Pettit: Our efforts to expand digital product enablement and our Trailers as a Service, or TaaS, service concept continues to grow Wabash's innovation leadership through the generation of a much deeper understanding of challenges our customers are facing, allowing us to bring physical, digital, and business model innovation to life. We continue to expand the ledger of shippers, carriers, and brokers across North America who look to bundle preventive maintenance programs, operational and maintenance-based telematics solutions, nationwide uptime support, and repair and service management with trailer assets to enable their growth needs. We will be showcasing our Cargo Assurance solution at Manifest in Las Vegas in February and at TMC in Nashville in March. We are taking a new approach to overcoming the growing cargo theft challenges with our Trailer Hawk technology platform.
In closing Parts and Services continues to deliver connected end-to-end support, that keeps customer assets running day in and day out. We're not just growing this segment. We're layering in new forms of customer value across a bit Services, flexible capacity Solutions and aftermarket, parts, and services, all designed to work together as an integrated ecosystem.
As this segment continues to expand its margin profile and cash flow contribution through extended scale and enhanced offerings. It will be a core element in W. Bashas overall financial performance and resiliency into the future.
Our efforts to expand digital product enablement, and our trailers as a service, or task service concept continues to grow while Bashas Innovation leadership through the generation of a much deeper. Understanding of challenges. Our customers are facing allowing us to bring physical digital and business model Innovation to life.
We are growing in this space right now during obviously difficult market conditions because we're finding better ways to serve our customers. This gives us great confidence that we are laying the foundation for wash to create Mutual value. Far beyond the initial sale of the trailer or a Truck Body and throughout the life of the asset.
We continue to expand the Leisure of shippers carriers and Brokers North America, who look to bundle preventive maintenance programs, operational maintenance, based telematics Solutions Nationwide, uptime support and repair and service management with trailer assets to enable their growth needs.
With that, I'll turn it over to Pat for his comments.
we will be showcasing our cargo Assurance solution at manifest in Las Vegas in February and at TMC in Nashville, in March,
Thanks Mike. Beginning with the review of our quarterly Financial results in the fourth quarter, Consolidated Revenue was 321 million.
Mike Pettit: With this platform, we'll be highlighting how the trailer itself becomes part of a secure, connected system that helps prevent theft.... We've continued to invest in both physical and digital readiness during the downturn, ensuring we're well-positioned to scale when the market rebounds with more innovative and valuable solutions for our customers. We also remain convinced that flexible capacity solutions, such as TaaS, will become increasingly attractive to our customers as they look for innovative ways to acquire capacity and operate in an increasingly challenging business liability and regulatory environment. In closing, parts and services continues to deliver connected end-to-end support that keeps customer assets running day in and day out. We're not just growing this segment, we're layering in new forms of customer value across upfit services, flexible capacity solutions, and aftermarket parts and services, all designed to work together as an integrated ecosystem.
Mike Pettit: With this platform, we'll be highlighting how the trailer itself becomes part of a secure, connected system that helps prevent theft.... We've continued to invest in both physical and digital readiness during the downturn, ensuring we're well-positioned to scale when the market rebounds with more innovative and valuable solutions for our customers. We also remain convinced that flexible capacity solutions, such as TaaS, will become increasingly attractive to our customers as they look for innovative ways to acquire capacity and operate in an increasingly challenging business liability and regulatory environment. In closing, parts and services continues to deliver connected end-to-end support that keeps customer assets running day in and day out. We're not just growing this segment, we're layering in new forms of customer value across upfit services, flexible capacity solutions, and aftermarket parts and services, all designed to work together as an integrated ecosystem.
We are taking a new approach to overcoming the growing cargo theft challenges. With our trailer Hawk technology platform with this platform. We'll be highlighting how the trailer itself becomes part of the secure connected system that helps prevent theft.
We've continued to invest in both physical and digital readiness during the downturn, ensuring we're well positioned to scale when the market rebounds with more innovative and valuable solutions for our customers.
Operating margin came in at -3.6 %.
As a reminder, our adjusted non-gaap results. Exclude the impact of the non-cash charges related to the idling of the Little Falls and Goan facilities.
We also remain convinced that flexible capacity solutions, such as tasks, will become increasingly attractive to our customers as they look for innovative ways to acquire capacity and operate in an increasingly challenging business, liability, and regulatory environment.
In the fourth quarter, adjusted ibitta was -26.2 million or negative 8.1% of sales.
And adjusted net income attributable. To Common stockholders, was -37.8 million or -93 cents per diluted share.
Mike Pettit: As this segment continues to expand its margin profile and cash flow contribution through extended scale and enhanced offerings, it will be a core element in Wabash's overall financial performance and resiliency into the future. We are growing in this space right now during obviously difficult market conditions because we're finding better ways to serve our customers. This gives us great confidence that we are laying the foundation for Wabash to create mutual value far beyond the initial sale of a trailer or a truck body, and throughout the life of the asset. With that, I'll turn it over to Pat for his comments.
Mike Pettit: As this segment continues to expand its margin profile and cash flow contribution through extended scale and enhanced offerings, it will be a core element in Wabash's overall financial performance and resiliency into the future. We are growing in this space right now during obviously difficult market conditions because we're finding better ways to serve our customers. This gives us great confidence that we are laying the foundation for Wabash to create mutual value far beyond the initial sale of a trailer or a truck body, and throughout the life of the asset. With that, I'll turn it over to Pat for his comments.
In closing, Parts and Services continues to deliver connected, end-to-end support that keeps customer assets running day in and day out. We're not just growing this segment; we're layering in new forms of customer value, of cross, upfit services, flexible capacity solutions, and aftermarket parts and services—all designed to work together as an integrated ecosystem.
As this segment continues to expand its margin profile and cash flow contribution through extended scale and enhanced offerings, it will be a core element in Wabash's overall financial performance and resiliency into the future.
Moving on to our reporting segments, Transportation Solutions, generated revenue of 263 million and non-gaap operating income of -31.7 million, or negative -2.1 of sales.
Parts and Services generated revenue of 64.5 million and operating income of 5.1 million or 7.9% of sales, continuing the 2025 trend of both sequential and year-over-year revenue growth in the segment.
We are growing in this space right now during obviously difficult market conditions because we're finding better ways to serve our customers. This gives us great confidence that we are laying the foundation for Waste to create. Mutual value. Far beyond the initial sale of the trailer or a Truck Body and throughout the life of the asset.
With that, I'll turn it over to Pat for his comments.
Patrick Keslin: Thanks, Mike. Beginning with a review of our quarterly financial results, in Q4, consolidated revenue was $321 million. During the quarter, we shipped approximately 5,901 new trailers and 1,343 truck bodies. Lower than expected production volumes within the truck body business created operational inefficiencies, which contributed to an adjusted gross margin of -1.1% of sales during the quarter, while adjusted operating margin came in at -13.6%. As a reminder, our adjusted Non-GAAP results exclude the impact of the non-cash charges related to the idling of the Little Falls and Goshen facilities.
Patrick Keslin: Thanks, Mike. Beginning with a review of our quarterly financial results, in Q4, consolidated revenue was $321 million. During the quarter, we shipped approximately 5,901 new trailers and 1,343 truck bodies. Lower than expected production volumes within the truck body business created operational inefficiencies, which contributed to an adjusted gross margin of -1.1% of sales during the quarter, while adjusted operating margin came in at -13.6%. As a reminder, our adjusted Non-GAAP results exclude the impact of the non-cash charges related to the idling of the Little Falls and Goshen facilities.
Thanks, Mike. Beginning with the review of our quarterly financial results in the fourth quarter, consolidated revenue was $321 million.
For your operating cash. Generation total 12 million with -31 million of free. Cash flow in 2025, excluding the 30 million legal settlement paid in the fourth quarter, reflecting strong execution, and disciplined work in Capital Management.
During the quarter, we shipped approximately 5,901 new trailers and 1,343 Truck Bodies. Lower than expected production volumes within the truck body business created operational inefficiencies which contributed to an adjusted gross margin of negative 1.1% of sales during the quarter while adjusted operating margin came in at -3.6 percent.
Regarding our balance sheet, our liquidity, which comprises both cash and available borrowing was 235 million ending, December 31st throughout the difficult market conditions, prioritizing liquidity, and the resulting Financial resilience enables us to continue navigating the near-term. Headwinds without losing sight of our key, strategic priorities and longer term initiatives,
Patrick Keslin: In the Q4, Adjusted EBITDA was negative $26.2 million, or -8.1% of sales, and adjusted net income attributable to common stockholders was negative $37.8 million, or negative $0.93 per diluted share. Moving on to our reporting segments, Transportation Solutions generated revenue of $263 million, and non-GAAP operating income of negative $31.7 million, or -12.1% of sales. Parts and Services generated revenue of $64.5 million and operating income of $5.1 million, or 7.9% of sales, continuing the 2025 trend of both sequential and year-over-year revenue growth in the segment.
Patrick Keslin: In the Q4, Adjusted EBITDA was negative $26.2 million, or -8.1% of sales, and adjusted net income attributable to common stockholders was negative $37.8 million, or negative $0.93 per diluted share. Moving on to our reporting segments, Transportation Solutions generated revenue of $263 million, and non-GAAP operating income of negative $31.7 million, or -12.1% of sales. Parts and Services generated revenue of $64.5 million and operating income of $5.1 million, or 7.9% of sales, continuing the 2025 trend of both sequential and year-over-year revenue growth in the segment.
As a reminder, our adjusted non-GAAP results exclude the impact of the non-cash charges related to the idling of the Little Falls and Goan facilities.
turning to Capital allocation during the fourth quarter, we invested 5 million via capital expenditure and invested, 7 million in Revenue, generating assets, for our trailers, as a service initiative,
In the fourth quarter, adjusted EBITDA was negative $26.2 million, or negative 8.1% of sales.
We utilize 0.7 million to repurchase shares and paid. Our quarterly dividends of 3.2 million.
Was -37.8 million or -93 cents per diluted share.
Moving on to our reporting segments.
For the full year we invested 25 million in traditional Capital expenditures invested, 48 million in Revenue, generating assets.
Allocated 34 million to repurchase shares and returned, 13.8 million to shareholders via our dividend.
Transportation Solutions generated revenue of $263 million and non-GAAP operating income of -$31.7 million, or -12.1% of sales.
As we continue to manage through the persisting uncertainty in the market, we're maintaining a prudent and conservative approach to cash management into 2026.
Parts and Services generated revenue of $64.5 million and operating income of $5.1 million, or 7.9% of sales.
Continuing the 2025 trend of both sequential and year-over-year revenue growth in the segment.
Patrick Keslin: Full-year operating cash generation totaled $12 million, with -$31 million of free cash flow in 2025, excluding the $30 million legal settlement paid in the fourth quarter, reflecting strong execution and disciplined work in capital management. Regarding our balance sheet, our liquidity, which comprises both cash and available borrowings, was $235 million, ending December 31. Throughout the difficult market conditions, prioritizing liquidity and the resulting financial resilience enables us to continue navigating the near-term headwinds without losing sight of our key strategic priorities and longer-term initiatives. Turning to capital allocation during the fourth quarter, we invested $5 million via capital expenditure and invested $7 million in revenue-generating assets for our Trailers-as-a-Service initiative. We utilized $0.7 million to repurchase shares and paid our quarterly dividend of $3.2 million.
Patrick Keslin: Full-year operating cash generation totaled $12 million, with -$31 million of free cash flow in 2025, excluding the $30 million legal settlement paid in the fourth quarter, reflecting strong execution and disciplined work in capital management. Regarding our balance sheet, our liquidity, which comprises both cash and available borrowings, was $235 million, ending December 31. Throughout the difficult market conditions, prioritizing liquidity and the resulting financial resilience enables us to continue navigating the near-term headwinds without losing sight of our key strategic priorities and longer-term initiatives. Turning to capital allocation during the fourth quarter, we invested $5 million via capital expenditure and invested $7 million in revenue-generating assets for our Trailers-as-a-Service initiative. We utilized $0.7 million to repurchase shares and paid our quarterly dividend of $3.2 million.
For our trailers as a service initiative. In particular, we do not anticipate any more near-term Investments, as we have established, the foundation and groundwork for this business in 2025,
Full year operating cash generation totaled $12 million, with negative free cash flow of $31 million in 2025. Excluding the $30 million legal settlement paid in the fourth quarter, this reflects strong execution and disciplined work in capital management.
Until we have greater insight into the timing and shape of the market return. Our Focus will remain on preserving liquidity and maintaining Financial flexibility while positioning ourselves to act quickly and intentionally when demand begins to recover.
Regarding our balance sheet, our liquidity, which comprises both cash and available borrowing, was $235 million, ending December 31.
Throughout the difficult market conditions, prioritizing liquidity and the resulting financial resilience enables us to continue navigating the near-term headwinds without losing sight of our key strategic priorities and longer-term initiatives.
Moving on to our outlook for the first quarter. We expect Revenue in the range of 310 million to 330 million. An operating margin midpoint of approximately negative -5% and adjusted earnings per share in the range of -95 cents to negative, a dollar and 5 cents as deferred Capital spending decisions and persistent uncertainty carry into 2026.
As previously mentioned, we expect to provide additional guidance as visibility improves throughout the year.
Turning to capital allocation during the fourth quarter, we invested $5 million via capital expenditure and invested $7 million in revenue-generating assets for our Trailers as a Service initiative.
However, we do expect the first quarter to be the weakest of the year in terms of both revenue and operating margins.
Patrick Keslin: For the full year, we invested $25 million in traditional capital expenditures, invested $48 million in revenue-generating assets, allocated $34 million to repurchase shares, and returned $13.8 million to shareholders via our dividend. As we continue to manage through the persisting uncertainty in the market, we're maintaining a prudent and conservative approach to cash management into 2026. For our Trailers as a Service initiative, in particular, we do not anticipate any more near-term investments, as we have established the foundation and groundwork for this business in 2025. Until we have greater insight into the timing and shape of the market return, our focus will remain on preserving liquidity and maintaining financial flexibility, while positioning ourselves to act quickly and intentionally when demand begins to recover.
Patrick Keslin: For the full year, we invested $25 million in traditional capital expenditures, invested $48 million in revenue-generating assets, allocated $34 million to repurchase shares, and returned $13.8 million to shareholders via our dividend. As we continue to manage through the persisting uncertainty in the market, we're maintaining a prudent and conservative approach to cash management into 2026. For our Trailers as a Service initiative, in particular, we do not anticipate any more near-term investments, as we have established the foundation and groundwork for this business in 2025. Until we have greater insight into the timing and shape of the market return, our focus will remain on preserving liquidity and maintaining financial flexibility, while positioning ourselves to act quickly and intentionally when demand begins to recover.
We utilized $0.7 million to repurchase shares and paid our quarterly dividends of $3.2 million.
while we continue to assess the shape and timing of a recovery, we remain confident that 2026 will represent an improvement from 2025
For the full year, we invested $25 million in traditional capital expenditures and $48 million in revenue-generating assets.
Allocated 34 million to repurchase shares in returned, 13.8 million to shareholders via our dividend.
Our strategic decisions throughout 2025 continued focus on recurring revenue and realigned cost structure will enable us to effectively manage near-term headwinds and position us to deliver improved financial performance as demand returns.
As we continue to manage through the persisting uncertainty in the market, we're maintaining a prudent and conservative approach to cash management into 2026.
as Brent noted, 2025 presented significant challenges, across Transportation industry, but it also reinforced the resilience of our organization
For our Trailers as a Service initiative, in particular, we do not anticipate any more near-term investments, as we have established the foundation and groundwork for this business in 2025.
Patrick Keslin: Moving on to our outlook for Q1, we expect revenue in the range of $310 million to $330 million, an operating margin midpoint of approximately -15%, and adjusted earnings per share in the range of -$0.95 to -$1.05, as deferred capital spending decisions and persistent uncertainty carry into 2026. As previously mentioned, we expect to provide additional guidance as visibility improves throughout the year. However, we do expect Q1 to be the weakest of the year in terms of both revenue and operating margins. While we continue to assess the shape and timing of a recovery, we remain confident that 2026 will represent an improvement from 2025.
Patrick Keslin: Moving on to our outlook for Q1, we expect revenue in the range of $310 million to $330 million, an operating margin midpoint of approximately -15%, and adjusted earnings per share in the range of -$0.95 to -$1.05, as deferred capital spending decisions and persistent uncertainty carry into 2026. As previously mentioned, we expect to provide additional guidance as visibility improves throughout the year. However, we do expect Q1 to be the weakest of the year in terms of both revenue and operating margins. While we continue to assess the shape and timing of a recovery, we remain confident that 2026 will represent an improvement from 2025.
Until we have greater insight into the timing and shape of the market return, our focus will remain on preserving liquidity and maintaining financial flexibility while positioning ourselves to act quickly and intentionally when demand begins to recover.
Our cost structure to today's environment while ensuring we are, well, positioned to capitalize on a market rebound and continue investing in the capabilities that support long-term growth.
I'll now turn the call back to the operator and we'll open it up for questions.
Thank you. We will now begin the question and answer session. Please limit yourself to 1 question and 1 follow-up.
If you would like to ask a question, please press star 1 to raise your hand.
Please stand by while we compile the Q&A roster.
Moving on to our outlook for the first quarter. We expect revenue in the range of $310 million to $330 million, an operating margin midpoint of approximately negative 15%, and adjusted earnings per share in the range of negative $0.95 to negative $0.015, as deferred capital spending decisions and persistent uncertainty carry into 2026.
First question comes from the line of Michael shlisky of Da Davidson your line is open. Please go ahead.
As previously mentioned, we expect to provide additional guidance as visibility improves throughout the year.
However, we do expect the first quarter to be the weakest of the year in terms of both revenue and operating margins.
Patrick Keslin: Our strategic decisions throughout 2025, continued focus on recurring revenue, and realigned cost structure will enable us to effectively manage near-term headwinds and position us to deliver improved financial performance as demand returns. As Brent noted, 2025 presented significant challenges across the transportation industry, but it also reinforced the resilience of our organization. Our employees rose to the occasion, demonstrating focus, accountability, and a strong commitment to our customers and each other. Looking ahead, we remain disciplined in our execution and focused on aligning our cost structure to today's environment, while ensuring we are well-positioned to capitalize on a market rebound and continue investing in the capabilities that support long-term growth. I'll now turn the call back to the operator, and we'll open it up for questions.
Patrick Keslin: Our strategic decisions throughout 2025, continued focus on recurring revenue, and realigned cost structure will enable us to effectively manage near-term headwinds and position us to deliver improved financial performance as demand returns. As Brent noted, 2025 presented significant challenges across the transportation industry, but it also reinforced the resilience of our organization. Our employees rose to the occasion, demonstrating focus, accountability, and a strong commitment to our customers and each other. Looking ahead, we remain disciplined in our execution and focused on aligning our cost structure to today's environment, while ensuring we are well-positioned to capitalize on a market rebound and continue investing in the capabilities that support long-term growth. I'll now turn the call back to the operator, and we'll open it up for questions.
While we continue to assess the shape and timing of a recovery, we remain confident that 2026 will represent an improvement from 2025.
Hello, can you hear me? Okay? Yep. Okay, okay, great.
All right, thanks for all those great comments, guys. Um, maybe a couple of quick questions. Um,
The I don't think a capacity in Little Falls, actually, both of the facilities. I always thought that
Our strategic decisions throughout 2025, continued focus on recurring revenue, and realigned cost structure will enable us to effectively manage near-term headwinds and position us to deliver improved financial performance as demand returns.
since you did the expansion in at Lafayette, most of your products, whatever they were were made in 1 place. So I thought, Little Falls was meant for reefers.
so does this mean you're not making any more Reapers at least for the time being
As Brent noted, 2025 presented significant challenges across the transportation industry, but it also reinforced the resilience of our organization.
and or has anything changed to what product lines you're making and not making and are you actually exiting any businesses entirely with the island of capacity here?
Our employees rose to the occasion, demonstrating focus, accountability, and a strong commitment to our customers and each other. Looking ahead, we remain disciplined in our execution and focused on aligning our cost structure to today's environment, while ensuring we are well positioned to capitalize on a market rebound and continue investing in the capabilities that support long-term growth.
Operator: Thank you. We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. Please stand by while we compile the Q&A roster. First question comes from the line of Michael Shlisky of D.A. Davidson. Your line is open. Please go ahead.
Operator: Thank you. We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. Please stand by while we compile the Q&A roster. First question comes from the line of Michael Shlisky of D.A. Davidson. Your line is open. Please go ahead.
I'll now turn the call back to the operator, and we'll open it up for questions.
Thank you. We will now begin the question and answer session. Please limit yourself to one question and one follow-up.
1 to raise your hand.
Yeah. Um I'll take that that's it's this is Brent, good questions. Uh, no. We are not pulling out of um, the specifically the refrigerated Market. As we sit here right now with the Little Falls closure, we are, um, what I would say, looking at, how do we reposition the product going forward, specifically into the improving Market which we believe will exist in the 2027. It's just a prudent move that we're making right now, as we kind of re-envision, what our fixed cost structure will be uh, as we position for the market upswing. So, we're taking a timeout to be able to let those things take place, which will ultimately
Please stand by while we compile the Q&A roster.
Put a better product on the road to have a better cost structure and the market will be more responsive uh when we do that.
First question comes from the line of Michael schlitzie of Da Davidson your line is open. Please go ahead.
Michael Shlisky: Hello. Can you hear me okay?
Michael Shlisky: Hello. Can you hear me okay?
Operator: Yep.
Brent Yeagy: Yep.
Michael Shlisky: Okay. Okay, great. All right, thanks for all those great comments, guys. Maybe a couple of quick questions. The idling of capacity in Little Falls, actually, both of the facilities, I always thought that since you did the expansion in Lafayette, most of your products, whatever they were, were made in one place. So I thought Little Falls was meant for reefers. So does this mean you're not making any more reefers, at least for the time being, and, or has anything changed as to what product lines you're making and not making? And are you actually exiting any businesses entirely with the idling of capacity here?
Michael Shlisky: Okay. Okay, great. All right, thanks for all those great comments, guys. Maybe a couple of quick questions. The idling of capacity in Little Falls, actually, both of the facilities, I always thought that since you did the expansion in Lafayette, most of your products, whatever they were, were made in one place. So I thought Little Falls was meant for reefers. So does this mean you're not making any more reefers, at least for the time being, and, or has anything changed as to what product lines you're making and not making? And are you actually exiting any businesses entirely with the idling of capacity here?
Hello, can you hear me? Okay? Yep. Okay, okay, great.
All right, thanks for all those great comments, guys. Um, maybe a couple of quick questions. Um,
The, I think, capacity in Little Falls—actually both of the facilities—I always thought that...
Specifically with uh, refrigerated truck bodies. We retain refrigerated truck body capacity throughout our Network. Um, that is not compromised in any way, shape, or form the removal, or the shutdown of the Goan facility is really about overhead optimization and taking advantage of structural changes that we've made over the last several years, to be able to service the overall truck body market and a more efficient way. Uh the market allows us to pull the the the lever on that right now. It's a it's a move to make a stronger going forward. There's nothing that takes away. Our ability to serve the market as we move into what we believe will be a better Market in 2027.
Since you did the expansion in at Lafayette, most of your products—whatever they were—were made in one place. So I thought Little Falls was meant for reefers.
So does this mean you're not making any more Reapers, at least for the time being?
Brent Yeagy: Yeah, I'll take that. That's it. This is Brent. Good questions. No, we are not pulling out of the specifically the refrigerated market as we sit here right now with the Little Falls closure. We are what I would say, looking at how do we reposition the product going forward, specifically into the improving market, which we believe will exist in the 2027. It's just a prudent move that we're making right now as we kind of re-envision what our fixed cost structure will be, as we position for the market upswing. So we're taking a timeout to be able to let those things take place, which will ultimately put a better product on the road. It'll have a better cost structure, and the market will be more responsive, when we do that.
Brent Yeagy: Yeah, I'll take that. That's it. This is Brent. Good questions. No, we are not pulling out of the specifically the refrigerated market as we sit here right now with the Little Falls closure. We are what I would say, looking at how do we reposition the product going forward, specifically into the improving market, which we believe will exist in the 2027. It's just a prudent move that we're making right now as we kind of re-envision what our fixed cost structure will be, as we position for the market upswing. So we're taking a timeout to be able to let those things take place, which will ultimately put a better product on the road. It'll have a better cost structure, and the market will be more responsive, when we do that.
And, or, has anything changed to what product lines you're making and not making? And are you actually exiting any businesses entirely with the islanding of capacity here?
Okay. Okay okay um I only got 1 follow-up call follow-up questions so I'll just choose carefully here. I got a bunch of other questions to maybe just maybe 1 from uh from Mike um the part of services run rate that we saw on the fourth quarter. Can that continue in in into 2026 and possibly with better margins? You know, obviously the trail business has pretty pretty low visibility but I'm kind of wondering if you can give us a little bit more um, additional detail on the parts and service side that might have better visibility. Just some details as to what to expect there and could that be a very solid year? Shipping up for that business? Yeah, we should, we should expect to see nice growth in 2026 versus 2025. So we what we are able to deliver in Q4 for the resident,
Yeah. Um, I'll take that. That's—it's—this is Brent. Good questions. Uh, no, we are not pulling out of, um, specifically the refrigerated market. As we sit here right now, with the Little Falls closure, we are, um, what I would say, looking at how do we reposition the product going forward, specifically into the improving market which we believe will exist in 2027. It's just a prudent move that we're making right now as we kind of reinvent what our fixed cost structure will be, uh, as we position for the market upswing. So, we're taking a time out to be able to let those things take place, which will ultimately—
Brent Yeagy: Specifically, with refrigerated truck bodies, we retain refrigerated truck body capacity throughout our network, that is not compromised in any way, shape, or form. The removal or the shutdown of the Goshen facility is really about overhead optimization and taking advantage of structural changes that we've made over the last several years to be able to service the overall truck body market in a more efficient way. The market allows us to pull the lever on that right now. It's a move to make us stronger going forward. There's nothing that takes away our ability to serve the market as we move into what we believe will be a better market in 2027.
Brent Yeagy: Specifically, with refrigerated truck bodies, we retain refrigerated truck body capacity throughout our network, that is not compromised in any way, shape, or form. The removal or the shutdown of the Goshen facility is really about overhead optimization and taking advantage of structural changes that we've made over the last several years to be able to service the overall truck body market in a more efficient way. The market allows us to pull the lever on that right now. It's a move to make us stronger going forward. There's nothing that takes away our ability to serve the market as we move into what we believe will be a better market in 2027.
Put a better product on the road to have a better cost structure, and the market will be more responsive when we do that.
In perspective. Uh, you, you could, you could see that type of uh, that quarterly type average continuing into into 20 uh, to 26, for sure. Uh, I would say the margin side. The, the struggle we have is that we've got, uh, markets that we serve are still down. So while we've been able to continue to get growth, we are, we are having to fight through, uh, a, a market that no 1's. Really that excited about even even sometimes by repair parts for their equipment. So, we have seen some marginal compression. We've also seen some OE, uh, where we sell into the into the actual OE. Uh,
Specifically, with refrigerated truck bodies—we retain refrigerated truck body capacity throughout our network. That is not compromised in any way, shape, or form. The removal, or the shutdown, of the Goan facility is really about overhead optimization and taking advantage of structural changes that we've made over the last several years to be able to service the overall truck body market in a more efficient way. The market allows us to pull the...
Michael Shlisky: Okay. Okay. I only get one follow-up call, follow-up question, so I'll just choose carefully here. I got a bunch of other questions. So maybe just maybe one from, from Mike. The parts and services run rate that we saw in Q4, can that continue in, in, into 2026, and possibly with better margins? You know, obviously, the trailer business has pretty low visibility, but I'm kind of wondering if you can give us a little more, additional detail on the parts and service side that might have better, visibility. Just some detail as to what to expect there, and could that be a very solid year shaping up for that business?
Michael Shlisky: Okay. Okay. I only get one follow-up call, follow-up question, so I'll just choose carefully here. I got a bunch of other questions. So maybe just maybe one from, from Mike. The parts and services run rate that we saw in Q4, can that continue in, in, into 2026, and possibly with better margins? You know, obviously, the trailer business has pretty low visibility, but I'm kind of wondering if you can give us a little more, additional detail on the parts and service side that might have better, visibility. Just some detail as to what to expect there, and could that be a very solid year shaping up for that business?
Lever on that right now. It's a move to make us stronger going forward. There's nothing that takes away our ability to serve the market as we move into what we believe will be a better market in 2027.
Saying in the second half of the year for sure. Yeah. I'll add a little bit to that. Um, when you, when you look at the second half of the year, uh, for 2025 we had multiple moves.
In terms of the standing up of this upfit locations, um, we have other upfit locations that we will be standing up in uh, throughout 2020.
6, we have Phoenix. That will be coming online here soon. So those are all potentially additive, uh,
let me say it differently, they will be added to the overall Revenue profile throughout 2026
Patrick Keslin: Yeah, we should expect to see nice growth in 2026 versus 2025. So what we were able to deliver in Q4 from a revenue perspective, you could see that type of that quarterly type average continue into 2026, for sure. I would say on the margin side, the struggle we have is that we've got markets that we serve are still down. So while we've been able to continue to get growth, we are having to fight through a market that no one's really that excited about, even sometimes buying repair parts for their equipment. So we have seen some margin compression.
Patrick Keslin: Yeah, we should expect to see nice growth in 2026 versus 2025. So what we were able to deliver in Q4 from a revenue perspective, you could see that type of that quarterly type average continue into 2026, for sure. I would say on the margin side, the struggle we have is that we've got markets that we serve are still down. So while we've been able to continue to get growth, we are having to fight through a market that no one's really that excited about, even sometimes buying repair parts for their equipment. So we have seen some margin compression.
Um so the ability of continuing to scale within the points of distribution that we have as well as new coming online gives us you know somewhat of a unique ability to continue to grow even in a difficult Market.
That's true for aftermarket parts. That's true for update and you know so that gives us a tremendous amount of confidence in the way.
That we believe we can continue to grow in the market, even when it is challenging.
So I will, I will jump back into you.
Okay, okay um I only got 1 follow-up call follow-up questions so I'll just choose carefully. I got a bunch of other questions to maybe just maybe 1 from uh from Mike um the part of services run rate that we saw on the fourth quarter. Can that continuing in into 2026 and possibly with better margins? You know, obviously the trail business has pretty pretty low visibility but I'm kind of wondering if you can give us a little bit more um, additional detail on the parts and service side, that might have better visibility, just some details to what to expect there and could that be a very solid year? Shipping up for that business? Yeah, we should we should expect to see nice growth in 2026 versus 2025. So we what we were able to deliver in Q4 for the revenue perspective? Uh, you, you could, you could see that type of uh, that quarterly type adverts continue into into 20, uh, to 26, for sure. Uh, I would say the margin side. The, the struggle we have is that
Your next question comes from the line of Jeff. Kaufmann of vertical research partners.
Your line is open, please go ahead.
Patrick Keslin: We've also seen some OE where we sell into the actual OE part of the industry pull back. So those things, as well as our growth in upfit, while very positive, does require a little bit of startup costs. But that will normalize probably after Q1. Q1 will be the weakest quarter from a margin perspective in parts and services, but we should see the margins bounce up off what we're seeing in the second half of the year, for sure.
Patrick Keslin: We've also seen some OE where we sell into the actual OE part of the industry pull back. So those things, as well as our growth in upfit, while very positive, does require a little bit of startup costs. But that will normalize probably after Q1. Q1 will be the weakest quarter from a margin perspective in parts and services, but we should see the margins bounce up off what we're seeing in the second half of the year, for sure.
We've got, uh, markets that we serve are still down. So while we've been able to continue to get growth, we are, we are having to fight through, uh, a, a market that no 1 is really that excited about even, even sometimes buying repair parts for their equipment. So, we have seen some marginal compression. We've also seen some OE, uh, where we sell into the into the actual OE. Uh,
Uh, hey, can you hear me? Yep, you're here.
Okay, beautiful, get used to the new structure here. Um,
Brent Yeagy: Yeah, I'll add a little bit to that. When you, when you look at the second half of the year, for 2025, we had multiple moves in terms of the standing up of those upfit locations. We have other upfit locations that we will be standing up in, throughout 2026, we have Phoenix that will be coming online here soon. So those are all potentially additive. Let me say it differently. They will be additive to the overall revenue profile throughout 2026. So the ability of continuing to scale within the points of distribution that we have, as well as new coming online, gives us, you know, somewhat of a unique ability to continue to grow, even in a difficult market.
Brent Yeagy: Yeah, I'll add a little bit to that. When you, when you look at the second half of the year, for 2025, we had multiple moves in terms of the standing up of those upfit locations. We have other upfit locations that we will be standing up in, throughout 2026, we have Phoenix that will be coming online here soon. So those are all potentially additive. Let me say it differently. They will be additive to the overall revenue profile throughout 2026. So the ability of continuing to scale within the points of distribution that we have, as well as new coming online, gives us, you know, somewhat of a unique ability to continue to grow, even in a difficult market.
Part of the of the industry, pull back. So those things as well as our growth and upfit, while very positive does require a little bit of of startup cost. But I will normalize probably after q1 q1 will be the weakest quarter from a market perspective in uh, in parts and services. But we should see the margins uh, bounce up off what we're seeing in the second half of the year for sure. Yeah. I'll add a little bit to that. Um, when you, when you look at the second half of the year, uh, for 2025, we had multiple moves.
So uh, with the actions that were taken. I I got a I'm going to follow up on Mike's question a little bit. Um, he was asking about reefer trailers, I'm asking about the refrigerated, um, truck bodies, is that something that is effective going forward? Does it not really affect it based on the actions, uh, taken on the factories and kind of how we think about truck bodies for 26.
In terms of the standing up of these update locations, we have other upfit locations that we will be standing up throughout 2020.
Six, we have Phoenix. That will be coming online here soon.
To the overall revenue profile throughout 2026.
Brent Yeagy: That's true for aftermarket parts, that's true for upfit, and so that gives us a tremendous amount of confidence in the way that we believe we can continue to grow in the market, even when it is challenging.
Brent Yeagy: That's true for aftermarket parts, that's true for upfit, and so that gives us a tremendous amount of confidence in the way that we believe we can continue to grow in the market, even when it is challenging.
Um, so the ability of continuing to scale within the points of distribution that we have, as well as new [points] coming online, gives us, you know, somewhat of a unique ability to continue to grow, even in a difficult market.
Now our our ability to meet, um, we'll call it customer demand for refrigerated truck. Bodies is really not encumbered in any way shape or form. Uh, we retain ample capacity, uh, to do that with our existing facilities. And that's an area that we're still continuing to work to grow in. We see opportunity for that when we think 25 or I'm sorry 2026 and Beyond, so there's no wavering in commitment or opportunity in that way. Uh, we are able to refine the manner at which we do it that we think will be more profitable for us and, um, more, uh, well better positioned for the C customer for consumption.
That's true for aftermarket parts. That's true for update. And, you know, so that gives us a tremendous amount of confidence in the way that we believe we can continue to grow in the market, even when it is challenging.
Patrick Keslin: Got it. All right, well, thanks so much. I will jump back in the queue.
Michael Shlisky: Got it. All right, well, thanks so much. I will jump back in the queue.
Brent Yeagy: Thanks, Mike.
Brent Yeagy: Thanks, Mike.
Got it. All right. Well, thanks so much. I will jump back in queue.
Operator: Your next question comes from the line of Jeff Kauffman of Vertical Research Partners. Your line is open. Please go ahead.
Operator: Your next question comes from the line of Jeff Kauffman of Vertical Research Partners. Your line is open. Please go ahead.
Your next question comes from the line of Jeff Kaufmann of Vertical Research Partners.
Your line is open. Please go ahead.
Jeff Kauffman: Hey, can you hear me?
Jeff Kauffman: Hey, can you hear me?
Brent Yeagy: Yep, you're here.
Brent Yeagy: Yep, you're here.
Jeff Kauffman: Okay, beautiful. Getting used to the new structure here. With the actions that were taken, I gotta assume, I'm gonna follow up on Mike's question a little bit. He was asking about reefer trailers. I'm asking about the refrigerated truck bodies.
Jeff Kauffman: Okay, beautiful. Getting used to the new structure here. With the actions that were taken, I gotta assume, I'm gonna follow up on Mike's question a little bit. He was asking about reefer trailers. I'm asking about the refrigerated truck bodies.
Uh, hey, can you hear me? Yep, you're here.
Okay, beautiful. Getting used to the new structure here. Um,
Okay. And then a follow-up on that. Uh, more for Pat. Hey, Pat. Um, with some of the Strategic actions you've taken, uh, it looks like Goodwill, uh, balance change a little bit. Uh, I I think the intangible amortization similar but, uh, how does this affect the cost structure in the, uh, trailer business? And it looked like the operating expense going from gross margin line down to operating income line was a little high this quarter. Um, were there other things that affected that on a temporary basis or is 20 million? A good go forward base for for kind of gross to operating margin. Differential on the trailers.
Brent Yeagy: Mm-hmm.
Brent Yeagy: Mm-hmm.
Jeff Kauffman: Is that something that is affected going forward? Does it not really affect it based on the actions taken on the factories? And kind of, how are we thinking about truck bodies for 2026?
Jeff Kauffman: Is that something that is affected going forward? Does it not really affect it based on the actions taken on the factories? And kind of, how are we thinking about truck bodies for 2026?
So, uh, with the actions that were taken, I—I guess I'm going to follow up on Mike's question a little bit. Um, he was asking about reefer trailers; I'm asking about the refrigerated, um, truck bodies. Is that something that is affected going forward? Does it not really affect it based on the actions, uh, taken on the factories and kind of how we’re thinking about truck?
Brent Yeagy: No, our ability to meet, we'll call it, customer demand for refrigerated truck bodies, is really not encumbered in any way, shape, or form. We retain ample capacity to do that with our existing facilities, and that's an area that we're still continuing to work to grow in. We see opportunity for that when we think 25, or I'm sorry, 2026 and beyond. So there's no wavering in commitment or opportunity in that way. We are able to refine the manner in which we do it, that we think will be more profitable for us and, more, well, better positioned for the customer per consumption.
Mike Pettit: No, our ability to meet, we'll call it, customer demand for refrigerated truck bodies, is really not encumbered in any way, shape, or form. We retain ample capacity to do that with our existing facilities, and that's an area that we're still continuing to work to grow in. We see opportunity for that when we think 25, or I'm sorry, 2026 and beyond. So there's no wavering in commitment or opportunity in that way. We are able to refine the manner in which we do it, that we think will be more profitable for us and, more, well, better positioned for the customer per consumption.
Bodies for 26.
Yeah. So so we did have related to the shutdowns. Uh significant impairment of the assets of Little Falls. Um and then a reserve taken against the remaining raw material um sitting at Little Falls. So all all in all, uh, the adjustment was roughly 16 million dollars in the fourth quarter. Um, so you'll see that in our Gap, uh, results, and then we adjusted out in what we reported as non- dap. Um, and then related to the shutdown, we'll we'll also see in the first quarter and additional, uh, 4 to 5 million of expense, um, come through as 1 time, which will again adjust out in our non-gaap results and of that queue.
1 expense uh roughly 1 to 2 million of that will be a cash expense, but all other expenses related to the shutdown are are not in cash.
Okay, so treat those as as odd of the events. Uh, if you were a 1 timers and then we
Now, our our ability to meet, um, we'll call it customer demand for refrigerated truck. Bodies is really not encumbered in any way shape or form. Uh, we retain ample capacity, uh, to do that with our existing facilities. And that's an area that we're still continuing to work to grow in, uh, we see opportunity for that when we think 25, I'm sorry, 2026 and Beyond. So there's no wavering in commitment or opportunity in that way. Uh, we are able to refine the manner, in which we do it that we think will be more profitable for us and, um, more, uh, well better positioned for the C customer for consumption.
Jeff Kauffman: Okay, and then a follow-up on that, more for Pat. Hey, Pat, with some of the strategic actions you've taken, it looks like goodwill balance changed a little bit. I think the intangible amortization is similar, but how does this affect the cost structure in the trailer business? And it looked like the operating expense going from gross margin line down to operating income line was a little high this quarter. Were there other things that affected that on a temporary basis, or is $20 million a good go-forward base for kind of gross to operating margin differential on the trailers?
Jeff Kauffman: Okay, and then a follow-up on that, more for Pat. Hey, Pat, with some of the strategic actions you've taken, it looks like goodwill balance changed a little bit. I think the intangible amortization is similar, but how does this affect the cost structure in the trailer business? And it looked like the operating expense going from gross margin line down to operating income line was a little high this quarter. Were there other things that affected that on a temporary basis, or is $20 million a good go-forward base for kind of gross to operating margin differential on the trailers?
Um, and then final question, I'll get back in queue. Um,
Brent and your initial comments you were talking about customer optimism, some encouraging signs, but you know, nothing really come across the transom yet. Um, I know some of the truck
Pre buy back into the class 8 numbers, 40,000 units, higher, but they're not really.
Patrick Keslin: Yeah, so we did have, related to the shutdowns, significant impairment of the assets at Little Falls, and then a reserve taken against the remaining raw material sitting at Little Falls. So all in all, the adjustment was roughly $16 million in Q4. So you'll see that in our GAAP results, and then we adjusted out in what we reported as non-GAAP. And then related to the shutdown, we'll also see, in Q1, an additional $4 to 5 million of expense come through as one time, which we'll again adjust out in our non-GAAP results. And of that Q1 expense, roughly $1 to 2 million of that will be a cash expense. But all other expenses related to the shutdown are non-cash.
Mike Pettit: Yeah, so we did have, related to the shutdowns, significant impairment of the assets at Little Falls, and then a reserve taken against the remaining raw material sitting at Little Falls. So all in all, the adjustment was roughly $16 million in Q4. So you'll see that in our GAAP results, and then we adjusted out in what we reported as non-GAAP. And then related to the shutdown, we'll also see, in Q1, an additional $4 to 5 million of expense come through as one time, which we'll again adjust out in our non-GAAP results. And of that Q1 expense, roughly $1 to 2 million of that will be a cash expense. But all other expenses related to the shutdown are non-cash.
Okay. And then a follow-up on that uh, more for Pat. Hey, Pat. Um, with some of the Strategic actions you've taken, uh, it looks like Goodwill, uh, balance changed a little bit. Uh, I I think the intangible amortization similar but, uh, how does this affect the cost structure in the, uh, trailer business? And it looked like the operating expense going from gross margin line down to operating income line was a little high this quarter. Um, were there other things that affected that on a temporary basis or is 20 million? A good go forward base for for kind of gross to operating margin. Differential on the trailers.
Getting enthusiastic about trailers for 2026 and I think they're believing the trailers are kind of another lackluster year, kind of flattish on the whole year. Um, what are you seeing that either confirms what act is saying or or maybe suggests that, uh, things could be a little better for the industry uh, than 1 would think?
Yeah, the way I I look at it right now Jeff, is that what we're seeing? Uh, in terms of we'll call it positive initial uh Tailwind forming uh for the
Uh what I call the trailer industry as a whole as measured by performance in the freight markets. By our carriers is really more stabilizing in terms of the initial projections that we're given for uh the trailer demand in 2026.
Jeff Kauffman: Okay, so treat those as out of the events, if you will-
Jeff Kauffman: Okay, so treat those as out of the events, if you will-
And that's the way that that we're approaching it right now. It's too early to say on in whether they will to manifest the positivity that they're experiencing into we'll call it second half of the Year demand.
Yeah. So so we did have related to the shutdowns. Uh significant impairment of the assets of Little Falls um and then a reserve taken against the remaining raw material um sitting at Little Falls. So all all in all, uh the adjustment was roughly 16 million dollars in the fourth quarter. Um, so you'll see that in our Gap, uh, results, and then we adjusted out in what we reported as non-gaap. Um and then related to the shutdown, will will also see in the first quarter, an additional uh 4 to 5 million of expense. Um, come through as 1 time which will again adjust out in our non-gaap results and of that q1 expense. Uh, roughly 1 to 2 million of that will be a cash expense, but all other expenses related to the shutdown are are non-cash.
Patrick Keslin: Correct
Mike Pettit: Correct
Jeff Kauffman: - one-timers, and then final question, I'll get back in queue. Brent, in your initial comments, you were talking about customer optimism, some encouraging signs, but, you know, nothing really come across the transom yet. I know some of the truck OEMs are getting a little more confident, and, and I know PACCAR called for bottom of the cycle in Q1, and, and then things get better. When I look at the ACT Research conversation, it looks like they're putting pre-buy back into the Class 8 numbers, 40,000 units higher, but they're not really getting enthusiastic about trailers for 2026. And I think they're believing the trailers are kind of another lackluster year, kind of flattish on the whole year.
Jeff Kauffman: - one-timers, and then final question, I'll get back in queue. Brent, in your initial comments, you were talking about customer optimism, some encouraging signs, but, you know, nothing really come across the transom yet. I know some of the truck OEMs are getting a little more confident, and, and I know PACCAR called for bottom of the cycle in Q1, and, and then things get better. When I look at the ACT Research conversation, it looks like they're putting pre-buy back into the Class 8 numbers, 40,000 units higher, but they're not really getting enthusiastic about trailers for 2026. And I think they're believing the trailers are kind of another lackluster year, kind of flattish on the whole year.
Okay, so treat those as Oddity events. Uh, if you want, one timer and then we...
Um, and then final question, I'll get back in the queue. Um,
Um, I would say if I'm a betting person, we'll see what we will see is that translate into quoting activity for 2027 as they've prepared and think about deploying Capital um for that time frame, if they want to run into the 27 Market, when they can actually utilize the asset uh to generate Revenue. I think that's probably what's going to happen. Um,
and so I again I I don't think it's necessarily, um,
Brent and your initial comments you were talking about customer optimism, some encouraging signs, but you know, nothing really come across the transom yet. Um, I know some of the truck oems are getting a little more confident and and I know pack our called for bottom of the cycle in 1 q and and then things get better. Um, when I look at the ACT research,
In conversation, it looks like they're putting pre-B buyback into the Class 8 numbers—40,000 units higher—but they're not, really.
What I would say a revision. This type activity, where where act FTR will be revising up. I think we're in a position where we're able to stabilize and, and some will have a better idea of what demand's going to be this year.
Jeff Kauffman: What are you seeing that either confirms what ACT is saying or maybe suggests that things could be a little better for the industry than one would think?
Jeff Kauffman: What are you seeing that either confirms what ACT is saying or maybe suggests that things could be a little better for the industry than one would think?
Okay. So the positivism positive um I can't pronounce it today.
The positive thoughts are less bad.
Is is the way I should think about it. Um, all right. Well, best of luck with everything and thank you.
Yeah, sure. Thanks good.
Brent Yeagy: Yeah, the way I look at it right now, Jeff, is that what we're seeing in terms of we'll call it positive initial tailwinds forming for the trailer industry as a whole, as measured by performance in the freight markets by our carriers, is really more stabilizing in terms of the initial projections that were given for the trailer demand in 2026. That's the way that we're approaching it right now. It's too early to say whether they will manifest this positivity that they're experiencing into we'll call it second half of the year demand.
Mike Pettit: Yeah, the way I look at it right now, Jeff, is that what we're seeing in terms of we'll call it positive initial tailwinds forming for the trailer industry as a whole, as measured by performance in the freight markets by our carriers, is really more stabilizing in terms of the initial projections that were given for the trailer demand in 2026. That's the way that we're approaching it right now. It's too early to say whether they will manifest this positivity that they're experiencing into we'll call it second half of the year demand.
Getting enthusiastic about trailers for 2026, and I think they're believing the trailers are kind of another lackluster year—kind of flattish on the whole year. Um, what are you seeing that either confirms what ACT is saying, or maybe suggests that things could be a little better for the industry than with one with thing?
Your next question comes from the line of Michael shlisky of Da Davidson.
Line is open. Please go ahead.
If I look at it right now, Jeff, is that what we're seeing? Uh, in terms of, we'll call it a positive initial, uh, tailwind forming, uh, for the—
All right. Can you hear me? Okay? Yes, all right, second round of questions, here. Just, uh, 2 more. Uh, if you would maybe quickly on the
On the The Dumping uh, comments you made. And the um the issue that I was standing um what changed is has anything changed over the last few quarters with respect to the imported trailers and and the potential dumping of those trailers are there any near-term costs. You've got to undertake surrounding the effort to get that case, resolved.
Brent Yeagy: I would say if I'm a betting person, we'll see what we will see is that translate into quoting activity for 2027 as they prepare and think about deploying capital, for that timeframe, because they want to run into the 2027 market, and they can actually utilize the asset to generate revenue. I think that's probably what's gonna happen. And so I, again, don't think it's necessarily what I would say, a revisionist type activity where ACT will be revising up. I think we're in a position where we're able to stabilize and somewhat have a better idea of what demand's going to be this year.
Mike Pettit: I would say if I'm a betting person, we'll see what we will see is that translate into quoting activity for 2027 as they prepare and think about deploying capital, for that timeframe, because they want to run into the 2027 market, and they can actually utilize the asset to generate revenue. I think that's probably what's gonna happen. And so I, again, don't think it's necessarily what I would say, a revisionist type activity where ACT will be revising up. I think we're in a position where we're able to stabilize and somewhat have a better idea of what demand's going to be this year.
And if it's resolved favorably, are you do any payments or penalties that?
I don't know, the offending parties might have to pay.
Uh I call it the trailer industry as a whole as measured by performance in the Freight Market Square. Carriers is really more stabilizing in terms of the initial projections that were given for, uh, the trailer demand in 2026. And that's the way that that we're approaching it right now. It's too early to say on in whether they will uh, to Manifest this positivity that they're experiencing into. We'll call it second half of the Year demand. Um I would say if I'm a betting person we'll see what we will see is that translate into quoting activity for 2027 as they prepare and think about deploying Capital. Um for that time frame, if they want to run into the 27 Market, when they can actually utilize the asset uh to generate Revenue. I think that's probably what's going to happen. Um,
And so, again, I—I don't think it's necessarily, um,
Yeah so it doesn't exactly work that way. Uh in terms of the the process that you go through W Bosch is in no position where it will be negatively impacted with fees or any type of uh material costs related to this um in terms of how it may or may not affect.
Those that have been named uh, in the um, uh the process that the international uh, located competitors.
What I would say, as a revision, this type of activity, where FTR will be revising up. I think we're in a position where we're able to stabilize and, and somewhat have a better idea of what demand is going to be this year.
Jeff Kauffman: Okay, so the positivism, I can't pronounce it today. The positive thoughts are less bad, the way I should think about it. All right, well, best of luck with everything, and thank you.
Jeff Kauffman: Okay, so the positivism, I can't pronounce it today. The positive thoughts are less bad, the way I should think about it. All right, well, best of luck with everything, and thank you.
Okay. So, the positivism—positive, um, I can't pronounce it today. The positive thoughts are less bad.
as we think about the next step in the process, if that can continues to be at affirmative position, we'll see a level of Duties and um, penalties applied at the February 6th hearing
Brent Yeagy: Yep.
Mike Pettit: Yep.
Patrick Keslin: Thanks, guys.
Patrick Keslin: Thanks, guys.
Is this the way I should think about it? Um, all right. Well, best of luck with everything, and thank you. Yeah, thanks, guys.
Operator: Your next question comes from the line of Michael Shlisky of D.A. Davidson. Line is open. Please go ahead.
Operator: Your next question comes from the line of Michael Shlisky of D.A. Davidson. Line is open. Please go ahead.
Your next question comes from the line of Michael Schlieske of D.A. Davidson.
Mine is open. Please go ahead.
Michael Shlisky: All right. Can you hear me okay?
Michael Shlisky: All right. Can you hear me okay?
Brent Yeagy: Yes, we can.
Brent Yeagy: Yes, we can.
Michael Shlisky: All right. Second round of questions here. Just two more, if you would. Maybe quickly on the dumping comments you made and the issue that's outstanding. What changed? Has anything changed over the last couple few quarters with respect to the imported trailers and the potential dumping of those trailers? Are there any near-term costs you've got to undertake surrounding the effort to get that case resolved? And if it's resolved favorably, are you due any payments or penalties that, I don't know, the offending parties might have to pay?
Michael Shlisky: All right. Second round of questions here. Just two more, if you would. Maybe quickly on the dumping comments you made and the issue that's outstanding. What changed? Has anything changed over the last couple few quarters with respect to the imported trailers and the potential dumping of those trailers? Are there any near-term costs you've got to undertake surrounding the effort to get that case resolved? And if it's resolved favorably, are you due any payments or penalties that, I don't know, the offending parties might have to pay?
At that time, uh, they would be potentially subject to the enforcement of those penalties while the process goes through further review. Um, and a final determination in the second half, generally the October time frame of 2026, uh, and that's an impact that would be completely on, um, those named competitors, not with wall Bash.
All right. Can you hear me? Okay? Yes. All right. Second round of questions here. Just, uh,
Two more, uh, if you would, maybe quickly on the
Um, does that help answer the question? Well, yeah, just to clarify. So be that would happen if it were in your favorite plus a more favorable environment post, the the decision, a more fair environment,
but yes, but I guess, yeah.
On the dumping, uh, comments you made, and the, um, the issue that's outstanding, um, what changed? Has anything changed over the last few quarters with respect to the imported trailers and the potential dumping of those trailers? Are there any near-term costs you've got to undertake as part of the effort to get that case resolved?
And if it's resolved favorably, are you due any payments or penalties for that?
I just wanted to to go back to the root causes. Has this been like a a few quarters in the making is this always been this way and you saw that recently or what's the what's know? There's nothing in the in the last few quarters in and of itself that has you know explicitly framed the issue. This is much more of a longer term. Um
Brent Yeagy: Yeah, so it doesn't exactly work that way in terms of the process you go through. Wabash is in no position where it will be negatively impacted with fees or any type of material costs related to this. In terms of how it may or may not affect those that have been named in the process, the international located competitors. As we think about the next step in the process, if that continues to be an affirmative position, we'll see a level of duties and penalties applied at the 6 February hearing. At that time, they would be potentially subject to the enforcement of those penalties while the process goes through further review and a final determination in the second half, generally the October timeframe of 2026.
Brent Yeagy: Yeah, so it doesn't exactly work that way in terms of the process you go through. Wabash is in no position where it will be negatively impacted with fees or any type of material costs related to this. In terms of how it may or may not affect those that have been named in the process, the international located competitors. As we think about the next step in the process, if that continues to be an affirmative position, we'll see a level of duties and penalties applied at the 6 February hearing. At that time, they would be potentially subject to the enforcement of those penalties while the process goes through further review and a final determination in the second half, generally the October timeframe of 2026.
I don't know, the offending parties might have to pay.
You know, technically would have, you know, started, you know, upon Inception of, when we started to see, uh, International competitors, enter the um, the landscape. Now, the process itself.
Only looks at a period of time. Roughly uh this is directionally um the case, you know really 2022 through 2024 that's the relevant time period at which they are basing. Their determination.
Yeah, so it doesn't exactly work that way. Uh, in terms of the process you go through, Wabash is in no position where it will be negatively impacted with fees or any type of, uh, material costs related to this. Um, in terms of how it may or may not affect, uh, those that have been named, uh, in the, um, uh, the process that the international, uh, located competitors.
As we think about the next step in the process, if that can continues to be at an affirmative position, we'll see a level of duties and, um, penalties applied at the February 6th hearing.
Um, so that you know, nothing in the last few quarters, they're really going to do it off of what have been the Dynamics in the industry. And what is the data say, through the investigative process that, uh, must be disclosed by the international competitors, uh, to defend, um, the position that we've taken as a set of domestic manufacturers, uh, to counter the information that we've provided as part of the investigation.
Okay, okay.
Brent Yeagy: And that's an impact that would be completely on those named competitors, not with Wabash. Does that help answer the question?
Brent Yeagy: And that's an impact that would be completely on those named competitors, not with Wabash. Does that help answer the question?
At that time, uh, they would be potentially subject to the enforcement of those penalties while the process goes through further review. Um, and a final determination in the second half, generally the October time frame of 2026, uh, and that's an impact that would be completely on, um, those named competitors, not with Wabash.
Michael Shlisky: Well, yeah, just to clarify. So if that would happen, if it were in your favor, plus a more favorable environment post the decision, a more fair environment.
Michael Shlisky: Well, yeah, just to clarify. So if that would happen, if it were in your favor, plus a more favorable environment post the decision, a more fair environment.
They may, man. That's 1 where I was. Just a quick modeling question. If you would, uh, guys, um, if you're not investing in the fleet so much in 2026 is what's your broader capex Outlook?
And whatever you're doing this year effectively. Just maintenance capex at this point.
Brent Yeagy: Yes.
Brent Yeagy: Yes.
Michael Shlisky: But I guess.
Michael Shlisky: But I guess.
Um, does that help answer the question? Well, yeah, just to clarify. So that would happen if it were in your favor, plus a more favorable environment post—the decision, a more fair environment.
Brent Yeagy: Yep.
Brent Yeagy: Yep.
Michael Shlisky: Yeah, but I just wanted to go back to the root causes. Has this been, like, a few quarters in the making? Has this always been this way-
Michael Shlisky: Yeah, but I just wanted to go back to the root causes. Has this been, like, a few quarters in the making? Has this always been this way-
But yes, but I guess, yeah.
Brent Yeagy: No.
Brent Yeagy: No.
Michael Shlisky: And you saw that recently, or what's this?
Michael Shlisky: And you saw that recently, or what's this?
Brent Yeagy: No, there's nothing in the last few quarters in and of itself that has explicitly framed the issue. This is much more of a longer-term effect that, you know, technically would've started, you know, upon inception of when we started to see international competitors enter the landscape. Now, the process itself only looks at a period of time, roughly; this is directionally the case, you know, really 2022 through 2024. That's the relevant time period at which they are basing their determination.
Brent Yeagy: No, there's nothing in the last few quarters in and of itself that has explicitly framed the issue. This is much more of a longer-term effect that, you know, technically would've started, you know, upon inception of when we started to see international competitors enter the landscape. Now, the process itself only looks at a period of time, roughly; this is directionally the case, you know, really 2022 through 2024. That's the relevant time period at which they are basing their determination.
Yeah, I would say our our outlook for 26 for, uh, maintenance capex. Would look similar to what we spent in 25, uh, which was, uh, 26 million. Um, but we would, we do not anticipate any near-term expenditures and, and the revenue generating assets,
But I just wanted to to go back to the root causes, has this been like a a few quarters in the making. And there's always been this way. You saw that recently or what's the what's now there's nothing in the in the last few quarters in and of itself that has you know explicitly framed the issue. This is much more of a longer term. Um
But again like growth capex around the parts and service around the the parts part of it. That's all been done. Basically this point
Uh, effect that, you know, technically would have, you know, started, you know, upon inception of when we started to see, uh, international competitors enter the, um, the landscape. Now, the process itself.
There's no, no. That that would be included in the uh, Capital expenditures, the roughly, you know, year-over-year of 26 million and 2025, uh, very similar number that we expect in 2026 that would include some growth capex in it.
Just not anything related to tax.
Got it. Okay. Thanks so much, everybody. Appreciate it. Yep.
Are basing, their determination.
Brent Yeagy: So that, nothing in the last few quarters, they're really gonna do it off of what have been the dynamics in the industry and what does the data say through the investigative process that must be disclosed by the international competitors to defend the position that we've taken as a set of domestic manufacturers to counter the information that we provided as part of the investigation.
Brent Yeagy: So that, nothing in the last few quarters, they're really gonna do it off of what have been the dynamics in the industry and what does the data say through the investigative process that must be disclosed by the international competitors to defend the position that we've taken as a set of domestic manufacturers to counter the information that we provided as part of the investigation.
Your next question comes from the line of Jeff. Kaufmann of vertical research Partners mind is open. Please go ahead.
Mute. There you go. All right. Am I live? You are awesome. Awesome. Sorry it's the Jeff and Mike show here in Q&A. Um
Um, so that—no, nothing in the last few quarters. They're really going to do it off of what have been the dynamics in the industry. And what does the data say, through the investigative process that, uh, must be disclosed by the international competitors, uh, to defend, um, the position that we've taken as a set of domestic manufacturers, uh, to counter the information that we've provided as part of the investigation.
Michael Shlisky: Okay. Okay. And maybe, maybe, Matt, one more, just a quick modeling question, if you would, guys. If you're not investing in the fleet so much in 2026, just what's your broader CapEx outlook, and is whatever you're doing this year effectively just maintenance CapEx at this point?
Michael Shlisky: Okay. Okay. And maybe, maybe, Matt, one more, just a quick modeling question, if you would, guys. If you're not investing in the fleet so much in 2026, just what's your broader CapEx outlook, and is whatever you're doing this year effectively just maintenance CapEx at this point?
Okay, okay.
They may, man. That's one. Where—just a quick modeling question, if you will, guys. Um, if you're not investing in the fleet so much in 2026, what's your broader capex outlook?
Patrick Keslin: Yeah, I would say our, our outlook for 2026 for maintenance CapEx would look similar to what we spent in 2025, which was $26 million. But we would, we do not anticipate any near-term expenditures in the revenue-generating assets.
Patrick Keslin: Yeah, I would say our, our outlook for 2026 for maintenance CapEx would look similar to what we spent in 2025, which was $26 million. But we would, we do not anticipate any near-term expenditures in the revenue-generating assets.
And is whatever you're doing this year effectively just maintenance CapEx at this point?
Michael Shlisky: Yes, but again, like, growth CapEx around the parts and service, around the parts part of it, that's all been done basically at this point? There's no growth-
Michael Shlisky: Yes, but again, like, growth CapEx around the parts and service, around the parts part of it, that's all been done basically at this point? There's no growth-
Yeah, I would say our our outlook for 26 for, uh, maintenance capex. Would look similar to what we spent in 25, uh, which was, uh, 26 million. Um, but we would, we do not anticipate any near-term expenditures and, and the revenue generating assets,
Patrick Keslin: No, that would be included in the capital expenditures, the roughly, you know, year-over-year of $26 million in 2025. Very similar numbers that we expect in 2026. That would include some growth CapEx in it, just not anything related to TaaS.
Patrick Keslin: No, that would be included in the capital expenditures, the roughly, you know, year-over-year of $26 million in 2025. Very similar numbers that we expect in 2026. That would include some growth CapEx in it, just not anything related to TaaS.
It's, but again, like growth CapEx around the parts and service, around the parts part of it—that's all been done basically at this point.
So, uh, just a couple quick modeling questions. So, uh, just based on your comments on, on capex. And, uh, you know, what we're thinking about the market, I, I guess the good news is, it looks like you should be throwing off some cash flow even after the dividend is your thought on uh Capital allocation more debt reduction since you did take on some debt in 2025, is your view that we can split it probably between Sheri purchase and and balance sheet. Uh, freeing up, I guess just kind of big picture thoughts. If the environment gets less bad to neutral at some point this year. Uh, what are your thoughts on Capital deployment Beyond capex and dividends? Yeah. We're uh, so we're 45 million dollars pulled on the abl as of the end of 2025, which is what you're seeing as the debt increase. Um, so certainly as cash comes available, um, our primary use would be to to pay down that abs
No, no. So that would be included in the, uh, capital expenditures—the roughly, you know, year-over-year of $26 million in 2025. Uh, very similar number that we expect in 2026. That would include some growth CapEx in it.
Michael Shlisky: Got it. Okay. Thanks so much, everybody. Appreciate it.
Michael Shlisky: Got it. Okay. Thanks so much, everybody. Appreciate it.
Just not anything related to tasks.
Patrick Keslin: Yep. Thanks, Mike.
Patrick Keslin: Yep. Thanks, Mike.
Got it. Okay. Thanks so much, everybody. Appreciate it. Yep.
Operator: Your next question comes to the line of Jeff Kauffman of Vertical Research Partners. Line is open. Please go ahead.
Operator: Your next question comes to the line of Jeff Kauffman of Vertical Research Partners. Line is open. Please go ahead.
Know. Um, but beyond that we'll we'll stick to the same Capital allocation, uh, plan that we've had, which is, you know, paying the dividend uh uh using it to to fund our uh internal capex. Um and then whatever is remaining will will reevaluate for for share repurchases or paying down of the the high yield bonds that are due in 2028.
Your next question comes from the line of Jeff Kaufmann of Vertical Research Partners. Line is open. Please go ahead.
Okay, great. And then last question? Yeah, if you let me add just a little bit there,
Jeff Kauffman: Mute.
Jeff Kauffman: Mute.
Brent Yeagy: There you go.
Brent Yeagy: There you go.
Jeff Kauffman: All right. Am I live?
Jeff Kauffman: All right. Am I live?
Just round the, the framing of of we'll call it markets.
Brent Yeagy: You are.
Brent Yeagy: You are.
Jeff Kauffman: Awesome. Awesome. Sorry, it's the Jeff and Mike show here in Q&A. So, just a couple quick modeling questions. So, just based on your comments on CapEx and you know, what we're thinking about the market, I guess the good news is it looks like you should be throwing off some cash flow even after the dividend. Is your thought on capital allocation more debt reduction, since you did take on some debt in 2025? Is your view that we can split it probably between share repurchase and balance sheet, freeing up? I guess, just kind of big picture thoughts, if the environment gets less bad to neutral at some point this year, what are your thoughts on capital deployment beyond CapEx and dividends?
Jeff Kauffman: Awesome. Awesome. Sorry, it's the Jeff and Mike show here in Q&A. So, just a couple quick modeling questions. So, just based on your comments on CapEx and you know, what we're thinking about the market, I guess the good news is it looks like you should be throwing off some cash flow even after the dividend. Is your thought on capital allocation more debt reduction, since you did take on some debt in 2025? Is your view that we can split it probably between share repurchase and balance sheet, freeing up? I guess, just kind of big picture thoughts, if the environment gets less bad to neutral at some point this year, what are your thoughts on capital deployment beyond CapEx and dividends?
Mute. There you go. All right, am I—am I live? You are. Awesome. Awesome, awesome, sorry. It's the Jeff and Mike show here in Q&A. Um
Uh, and how and it forms, how we think about capital investment, how we think about liquidity management? How do we think about incremental options to use capital in the, the called the second half of the year?
And it goes to your previous question. You know what, what are the markets doing and what do we see?
So, uh, just a couple quick modeling questions. So, uh, just based on your comments on, on capex, and, uh,
if we're sitting here right now,
very,
Are getting.
Substantially better from where they've been.
There are.
The rate of change of that has been fairly significant in the last 90, to 120 days, which is pique people's interests.
Patrick Keslin: Yeah, we're so we're $45 million pulled on the ABL as of the end of 2025, which is what you're seeing as the debt increase. So certainly as cash comes available, our primary use would be to pay down that ABL. But beyond that, we'll stick to the same capital allocation plan that we've had, which is, you know, paying the dividend, using it to fund our internal CapEx, and then whatever is remaining, we'll reevaluate for share repurchases or paying down of the high yield bonds that are due in 2028.
Patrick Keslin: Yeah, we're so we're $45 million pulled on the ABL as of the end of 2025, which is what you're seeing as the debt increase. So certainly as cash comes available, our primary use would be to pay down that ABL. But beyond that, we'll stick to the same capital allocation plan that we've had, which is, you know, paying the dividend, using it to fund our internal CapEx, and then whatever is remaining, we'll reevaluate for share repurchases or paying down of the high yield bonds that are due in 2028.
You know what we're thinking about the market? I I guess the good news is it looks like you should be throwing off some cash flow even after the dividend is your thought on uh Capital allocation more debt reduction since you did take on some debt in 2025 is your view that we can split it. Probably between Sheree purchase and and balance sheet. Uh, freeing up, I guess just kind of big picture thoughts. If the environment gets less bad, the neutral at some point this year. Uh, what are your thoughts on Capital deployment behind capex and dividends?
If those can remain sustainable.
Into the second half of the year.
I'm sorry through the second quarter.
It absolutely can change the feeling of what is the forthcoming Market.
Not the less bad.
But to good.
How will reflect that is? How how do we think about? Um, it's somewhat possibly pricing in the second half of the Year, Still Remains to be seen. There may be, uh, some specifically with dedicated related deals, some positive second half of the Year impact from a revenue standpoint.
Jeff Kauffman: Okay, great.
Jeff Kauffman: Okay, great.
Yeah. We're uh, so we're 45 million dollars pulled on the abl as of the end of 2025, which is what you're seeing as the debt increase. Um, so certainly as cash comes available, um, our primary use would be to to pay down that abl. Um but beyond that we'll we'll stick to the same Capital allocation, uh, plan that we've had, which is, you know, paying the dividend uh uh using it to to fund our uh, internal capex. Um and then whatever is remaining will will reevaluate for for Sheriff purchases or paying down of the, the high yield bonds that are due in 2028.
Brent Yeagy: Yeah.
Brent Yeagy: Yeah.
Jeff Kauffman: And then last question.
Jeff Kauffman: And then last question.
Brent Yeagy: Yeah.
Brent Yeagy: Yeah.
Jeff Kauffman: Yeah.
Jeff Kauffman: Yeah.
Brent Yeagy: If you let me add just a little bit there-
Brent Yeagy: If you let me add just a little bit there-
Jeff Kauffman: Mm-hmm
Jeff Kauffman: Mm-hmm
Brent Yeagy: ... just around the framing of, we'll call it markets, and how it forms how we think about capital investment, how we think about liquidity management, how do we think about incremental options to use capital in the, we'll call it, second half of the year. And it goes to your previous question, you know, what are the markets doing and what do we see? If we're sitting here right now, just in a very pragmatic way, there's a lot of reasons to believe and trust that the market fundamentally at the freight level and the drivers of that are getting substantially better from where they've been.
Brent Yeagy: ... just around the framing of, we'll call it markets, and how it forms how we think about capital investment, how we think about liquidity management, how do we think about incremental options to use capital in the, we'll call it, second half of the year. And it goes to your previous question, you know, what are the markets doing and what do we see? If we're sitting here right now, just in a very pragmatic way, there's a lot of reasons to believe and trust that the market fundamentally at the freight level and the drivers of that are getting substantially better from where they've been.
Okay, great. And then, last question—yeah, if you let me add just a little bit there,
Just around the, the framing of, we'll call it, markets.
But the majority of it just based on the sales cycle, the timing and the Dynamics are going to probably find its way most likely into the quoting, uh, and the early stage, um, order activity as people want to make sure they are, well, positioned to receive assets, which and probably a relatively constrained supply chain related, uh, industry.
So they can.
Uh, and how it forms, how we think about capital investment, how we think about liquidity management, how do we think about incremental options to use capital in the, we'll call, the second half of the year?
And it goes to your previous question. You know, what are the markets doing and what do we see?
There there's a whole definition of what's good and bad is relative to the time frame at which you are framing it.
If we're sitting here right now,
very,
We are absolutely moving into a world that if it can sustain is moving into good.
The reality of it is it's all set.
It's in a very pragmatic way. There's a lot of reasons to believe, uh, and trust that the market, fundamentally at the freight level, and the drivers of that.
Are getting.
Jeff Kauffman: Mm-hmm.
Jeff Kauffman: Mm-hmm.
Brent Yeagy: The rate of change of that has been fairly significant in the last 90 to 120 days, which has piqued people's interests. If those can remain sustainable into the second half of the year, or I'm sorry, through Q2, it absolutely can change the feeling of what is the forthcoming market, not to less bad, but to good. How we'll reflect that is how do we think about, it's somewhat possibly pricing in the second half of the year, still remains to be seen. There may be some, specifically with dedicated related deals, some positive second half of the year impact from a revenue standpoint.
Brent Yeagy: The rate of change of that has been fairly significant in the last 90 to 120 days, which has piqued people's interests. If those can remain sustainable into the second half of the year, or I'm sorry, through Q2, it absolutely can change the feeling of what is the forthcoming market, not to less bad, but to good. How we'll reflect that is how do we think about, it's somewhat possibly pricing in the second half of the year, still remains to be seen. There may be some, specifically with dedicated related deals, some positive second half of the year impact from a revenue standpoint.
Substantially better from where they've been. There are
The rate of change of that has been fairly significant in the last 90 to 120 days, which has piqued people's interests.
If those can remain sustainable.
End of the second half of the year.
I'm sorry, through the second quarter.
A couple quarters from what it will feel in the moment and we'll have to navigate those 2, conflicting stories at exactly the same time and that will impact how we deploy Capital, how we prepare for growth, how we staff the operation. Um as those Dynamics will be very changing uh and fluid as we go forward, and we're prepared to do that, right to operate in both those environments.
Um, we're positioning wash.
Market, not to less bad.
But to good.
On 1 hand to prepare for the reality of the moment.
And on the other hand, absolutely preparing for a much better environment as we move into the second half of the Year, getting ready for 27.
You know, just to throw that out there again.
Brent Yeagy: But the majority of it, just based on the sales cycle, the timing and the dynamics, are going to probably find its way, most likely, into the quoting, and the early stage, order activity as people want to make sure they are well positioned to receive assets, which and probably a relatively constrained supply chain related, industry. So they can... The whole definition of what's good and bad is relative to the time frame at which you are framing it. We are absolutely moving into a world that, if it can sustain, is moving into good. The reality of it is, it's offset a couple of quarters from what it will feel in the moment, and we'll have to navigate those two conflicting stories at exactly the same time.
Brent Yeagy: But the majority of it, just based on the sales cycle, the timing and the dynamics, are going to probably find its way, most likely, into the quoting, and the early stage, order activity as people want to make sure they are well positioned to receive assets, which and probably a relatively constrained supply chain related, industry. So they can... The whole definition of what's good and bad is relative to the time frame at which you are framing it. We are absolutely moving into a world that, if it can sustain, is moving into good. The reality of it is, it's offset a couple of quarters from what it will feel in the moment, and we'll have to navigate those two conflicting stories at exactly the same time.
How will reflect that is? How—how do we think about, um, it's somewhat possibly pricing in the second half of the year still remains to be seen. There may be, uh, some—specifically with dedicated related deals—some positive second half of the year impact from a revenue standpoint.
No, I I appreciate that clarity. Thank you very much. Um, as always, you don't want to get over your skis, but on the other hand, you know, if the first time in a couple years, there's a reason to be enthusiastic about a couple quarters down the road.
But the majority of it, just based on the sales cycle, the timing, and the dynamics, are going to probably find its way, most likely, into the quoting and the early-stage order activity, as people want to make sure they are well positioned to receive assets—which, in probably a relatively constrained supply chain-related industry, is important.
So they can.
There's a whole definition of what's good and bad that is relative to the time frame at which you are framing it.
You got it. So, 1 1, last question. Um, if I look at cost of goods, sold, you know, it's it's not going down as quickly as Revenue, which would make sense with some of the Tariff related costs, uh, where I want to draw that down to is, you know, tremendous growth in Parts as as Mike Pettit was talking about. Uh, but the margins were down about 130 basis points. Um, how much of a structural drag is what's going on with tariffs, creating for cost of goods sold and, and you know, when do you think we can try to recapture that in in terms of passing those increases through the customers?
We are absolutely moving into a world that, if it can sustain, is moving into good.
The reality of it is, it's all set.
Jeff Kauffman: Mm.
Jeff Kauffman: Mm.
Brent Yeagy: That will impact how we deploy capital, how we prepare for growth, how we staff the operation, as those dynamics will be very changing and fluid as we go forward. And we're prepared to do that, right? To operate in both those environments. We're positioning Wabash, on one hand, to prepare for the reality of the moment, and on the other hand, absolutely preparing for a much better environment as we move into the second half of the year, getting ready for 2027. You know, just to throw that out there again.
Brent Yeagy: That will impact how we deploy capital, how we prepare for growth, how we staff the operation, as those dynamics will be very changing and fluid as we go forward. And we're prepared to do that, right? To operate in both those environments. We're positioning Wabash, on one hand, to prepare for the reality of the moment, and on the other hand, absolutely preparing for a much better environment as we move into the second half of the year, getting ready for 2027. You know, just to throw that out there again.
A couple of quarters from what it will feel in the moment, and we'll have to navigate those two conflicting stories at exactly the same time, and that will impact how we deploy capital, how we prepare for growth, how we staff the operation. Those dynamics will be very changing and fluid as we go forward, and we're prepared to do that.
Right to operate in both those environments.
Yeah, it's we we talked about this uh, at the last call as well. Jeff, the the direct impact to our material costs directly. Due from tariffs is is pretty minimal. Uh, the phenomenon, you're seeing in our financials is really, uh, more of a market price, uh, driven reality. Um, as things have become more competitive with less units out there, uh, We've, uh, We've, uh, been in a pricing competition to, to win units, uh, which is impacted margins. Uh, when you look at a 24 to 25 that
Um, we're positioning W Bash.
On one hand, to prepare for the reality of the moment.
That is much more the driver of of what you're seeing there. Squeezing, gross margins. Um then material cost and specifically material cost driven by tariffs.
And on the other hand, absolutely preparing for a much better environment as we move into the second half of the year, getting ready for '27.
Okay, thank you for that Clarity and uh, thank you for your answers.
Jeff Kauffman: No, I appreciate that clarity. Thank you very much. As always, you don't want to get over your skis, but on the other hand, you know, for the first time in a couple of years, there's a reason to be enthusiastic about a couple quarters down the road.
Jeff Kauffman: No, I appreciate that clarity. Thank you very much. As always, you don't want to get over your skis, but on the other hand, you know, for the first time in a couple of years, there's a reason to be enthusiastic about a couple quarters down the road.
You know, just to throw that out there again.
Yep. Yeah and Jeffrey the question 1 Clarity Pointe. Uh,
Brent Yeagy: You got it.
Brent Yeagy: You got it.
Jeff Kauffman: So one last question. If I look at cost of goods sold, you know, it's not going down as quickly as revenue, which would make sense with some of the tariff-related costs. Where I want to draw that down to is, you know, tremendous growth in parts, as Mike Pettit was talking about, but the margins were down about 130 basis points. How much of a structural drag is what's going on with tariffs creating for cost of goods sold? And, you know, when do you think we can try to recapture that in terms of passing those increases through to customers?
Jeff Kauffman: So one last question. If I look at cost of goods sold, you know, it's not going down as quickly as revenue, which would make sense with some of the tariff-related costs. Where I want to draw that down to is, you know, tremendous growth in parts, as Mike Pettit was talking about, but the margins were down about 130 basis points. How much of a structural drag is what's going on with tariffs creating for cost of goods sold? And, you know, when do you think we can try to recapture that in terms of passing those increases through to customers?
No, I appreciate that clarity. Thank you very much. Um, as always, you don't want to get over your skis, but on the other hand, you know, if for the first time in a couple of years there's a reason to be enthusiastic about a couple of quarters down the road.
You got it. So, 1-1, last question. Um, if I look at cost of
For both of you um when we think about the anti-dumping and countervailing duties, the next round specifically that we will go through on February 6th will be at initial. Um, determination of where do they want if it's affirmative? What what we're talking about in terms of what the uh, uh,
Percentage penalties could actually be.
Patrick Keslin: Yeah, we talked about this at the last call as well, Jeff. The direct impact to our material cost directly due from tariffs is pretty minimal. The phenomenon you're seeing in our financials is really more of a market price driven reality. As things have become more competitive with less units out there, we've been in a pricing competition to win units, which has impacted margins. When you look at it, 2024 to 2025, that is much more the driver of what you're seeing there, squeezing gross margins, than material cost and specifically material cost driven by tariffs.
Patrick Keslin: Yeah, we talked about this at the last call as well, Jeff. The direct impact to our material cost directly due from tariffs is pretty minimal. The phenomenon you're seeing in our financials is really more of a market price driven reality. As things have become more competitive with less units out there, we've been in a pricing competition to win units, which has impacted margins. When you look at it, 2024 to 2025, that is much more the driver of what you're seeing there, squeezing gross margins, than material cost and specifically material cost driven by tariffs.
Good sold. You know, it's it's not going down as quickly as Revenue, which would make sense with some of the Tariff related costs, uh, where I want to draw that down to is, you know, tremendous growth in Parts. As as Mike, pett was talking about. Uh, but the margins were down about 130 basis points. Um, how much of a structural drag is what's going on with tariffs, creating for cost of goods sold and, and you know, when do you think we can try to recapture that in in terms of passing those increases through the customers?
Uh, collection of those which because it requires, you know, everything to change in terms of tariff codes and all the things that have to be done to pull that off. Uh, but there'll be an understanding within the industry of what the impact could be, um, sooner than later, uh, they're not actual impact will occur later in the year.
So with that said you know we're really appreciate all the questions and I'll turn it back over to John to finish up.
Thank you everyone for joining us today. We look forward to following up with you throughout the quarter and have a great day.
This concludes today's call, thank you for attending. You may now disconnect
Yeah, it's we we talked about this uh, at the last call as well. Jeff, the the direct impact to our material costs directly do from tariffs is is pretty minimal. Uh, the phenomenon, you're seeing in our financials is really, uh, more of a market price, uh, driven reality. Um, as things have become more competitive with less units out there, uh, We've, uh, We've, uh, been in a pricing competition to, to win units, uh, which is impacted margins. Uh, when you look at a 24 to 25, that is much more the driver of of what you're seeing there. Squeezing, gross margins. Um, then material cost and specifically material costs driven by tariffs.
Jeff Kauffman: Okay, thank you for that clarity, and thank you for your answers.
Jeff Kauffman: Okay, thank you for that clarity, and thank you for your answers.
Brent Yeagy: Yep. Yes, and Jeff, appreciate the question. One clarity point for both of you. When we think about the Antidumping and Countervailing Duties, the next round specifically that we will go through on 6 February will be an initial determination of where do they-- one, if it's affirmative, what we're talking about in terms of what the percentage penalties could actually be. Once it moves through the process, and then it gets the final determination, we'll actually implement the physical collection of those, which, because it requires, you know, everything to change in terms of tariff codes and all the things that have to be done to pull that off. But there'll be an understanding within the industry of what the impact could be sooner than later, then that actual impact will occur later in the year.
Brent Yeagy: Yep. Yes, and Jeff, appreciate the question. One clarity point for both of you. When we think about the Antidumping and Countervailing Duties, the next round specifically that we will go through on 6 February will be an initial determination of where do they-- one, if it's affirmative, what we're talking about in terms of what the percentage penalties could actually be. Once it moves through the process, and then it gets the final determination, we'll actually implement the physical collection of those, which, because it requires, you know, everything to change in terms of tariff codes and all the things that have to be done to pull that off. But there'll be an understanding within the industry of what the impact could be sooner than later, then that actual impact will occur later in the year.
Okay, thank you for that clarity, and uh, thank you for your answers.
Yep. Yep. And, Jeffrey, the question 1, Clarity Pointe. Uh,
For both of you, um, when we think about the anti-dumping and countervailing duties, the next round specifically that we will go through on February 6th will be an initial, um, determination of where do they want—if it's affirmative—what, what we're talking about in terms of what the, uh, uh, percentage penalties could actually be.
Once it moves through the process and then it gets the final determination, we'll actually implement the physical, uh, collection of those, which—because it requires, you know, everything to change in terms of tariff codes and all the things that have to be done to pull that off. Um, but there’ll be an understanding within the industry of what the impact could be, um, sooner than later. Uh, then that actual impact will occur later in the year.
Brent Yeagy: So with that said, you know, we really appreciate all the questions, and I'll turn it back over to John to finish up.
Brent Yeagy: So with that said, you know, we really appreciate all the questions, and I'll turn it back over to John to finish up.
John: Thank you, everyone, for joining us today. We look forward to following up with you throughout the quarter, and have a great day.
John Cummings: Thank you, everyone, for joining us today. We look forward to following up with you throughout the quarter, and have a great day.
Thank you, everyone, for joining us today. We look forward to following up with you throughout the quarter, and have a great day.
Mike Pettit: This concludes today's call. Thank you for attending. You may now disconnect.
Mike Pettit: This concludes today's call. Thank you for attending. You may now disconnect.
This concludes today's call. Thank you for attending. You may now disconnect.
