Wabash National Corporation

Ladies and gentlemen, thank you for joining us and welcome to the Wabash fourth quarter 2025 earnings call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. I will now hand the conference over to John Cummings, Senior Director of FP&A 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 Yeagy, President and Chief Executive Officer, Pat Kesslin, 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 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.

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 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. 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. 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 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 close out the fourth quarter, conditions across the transportation industry remain 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. 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 the demand environment to remain difficult as we move into the first quarter 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. 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, preserve 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 port, 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 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'll adjust our operations as appropriate to reflect near-term reality and to improve our overall cost structure when producing at scale. The idling of our Little Falls and Goshen facilities resulted in approximately $16 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. 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. 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 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 6th, 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 thereafter. 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 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. 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 the first quarter of 2026 and are not fully issuing full-year 2026 guidance at this time. 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 negative 95 cents to negative $1.05. 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. 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. 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 to recapture profitable growth as market conditions stabilize. And I'll turn the call over to Mike for his comments.