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Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Wabash Third Quarter 2025 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Jacob Page. Please go ahead.

Thank you, and good morning, everyone. We appreciate you joining us on this call. With me today are Brent Yeagy, 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 supplementing today's call and any non-GAAP reconciliations are available at ir.onewabash.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.

Thanks, Jake. As we look back on the third quarter, it's clear that the softer market conditions we've been navigating through the year persisted and, in some cases, intensified. Demand across the transportation industry remained below expectations as customers continue to delay capital spending decisions, creating further pressure on order activity. This environment contributed to our Q3 performance coming in below plan. Turning to our truck body business. Market conditions remain difficult through the third quarter, evidenced by continued softness across medium-duty chassis production. Demand continued to ease across most end markets as freight activity, construction and industrial sectors slowed further. Larger fleets have also pulled back, influenced by ongoing housing market stagnation, a sharp reduction in household relocations and persistent uncertainty around consumer confidence. While these dynamics have weighed on near-term demand, they're also setting a stage for a potential snapback in truck body orders once replacement needs and end market confidence begin to rebuild. More broadly, the industry continues to work through the effects of prolonged freight recession and an extended replacement cycle following the elevated purchasing that occurred post pandemic. As a result, order intake and backlog came in below expectations and revenue finished below our guidance range. Looking ahead, we anticipate market conditions will remain soft in the near term, especially through the fourth quarter. In the meantime, we're focused on what we can control, maintaining cost discipline, pursuing share gains and strengthening our service and distribution capabilities so that we're well positioned to capture growth when demand begins to recover. While near-term headwinds have intensified, they also underscore the importance of the steps we've taken to strengthen Wabash's foundation. Our organizational structure and diversified portfolio enable us to respond quickly and align costs with demand. Within Transportation Solutions, we're executing additional actions to further adjust to the current environment. At the same time, our parts and service business once again delivered both sequential and year-over-year revenue growth in Q3, demonstrating its resilience and critical role it plays in providing stability to our overall performance. We recognize that the coming quarter will remain challenging, and we revised our guidance accordingly. However, our long-term view remains unchanged. We're confident that the structural progress we've made, particularly the continued expansion of parts and services, positions Wabash to emerge stronger when demand normalizes and capital spending resumes. With the recent inclusion of dry van and refrigerated trailers in the Section 232 steel and aluminum derivative tariffs, we expect to see gradual effects on the competitive landscape as the industry adjusts over the coming quarters. This development may ultimately serve as a catalyst for improved market share dynamics as the cycle strengthens through 2026. However, we recognize that these effects may take time to materialize as competitors evaluate their sourcing strategies and pricing responses. Our focus remains on maintaining cost stability and supply chain resiliency, areas where Wabash holds a clear structural advantage. Through our long-term agreements with partners such as Hydro and Ryerson, our 95% domestically sourced supply chain and our vertically integrated composite panel production, we are far better positioned than our peers to manage input cost volatility. As the full impact of the 232 tariff action unfolds over the coming months, it's important that we continue to educate our customers on the growing risk of pricing instability within the market. Wabash's consistent and reliable supply chain represents a distinct value differentiator, particularly as customers prepare for the next freight up cycle and look to manage profitability in the early stages of recovery. We remain disciplined and focused on execution, maintaining cost rigor and operational control while avoiding premature assumptions about pricing benefits. Our structural advantages position us to respond quickly and capture value as market pricing strengthens naturally over time. During the third quarter, we finalized a settlement related to the 2019 legal matter involving one of our trailers. The case had previously resulted in a jury verdict that included punitive damages exceeding $450 million, along with approximately $12 million in compensatory damages. Following post-trial motions, the court substantially reduced the verdict amount prior to the settlement. Under the terms of the settlement, Wabash payment obligation is approximately $30 million, with the remaining amount covered by insurance. As a result of this resolution, we recorded a net adjustment of approximately $81 million in the third quarter. The evidence in the product liability matter was undisputed that the trailer fully complied with all applicable regulations. Despite precedent to the contrary, the jury was prevented from hearing critical evidence in the case, including that the driver's alcohol level was over the legal limit at the time of the accident and the fact that neither the driver nor the passenger were wearing seatbelts. Unfortunately, this case reflects a troubling trend in America's courts, where aggressive plaintiffs' attorneys target reputable companies regardless of the facts. Verdicts like this threat not only innovation, but the stability of manufacturing and transportation companies that serve as economic anchors in communities across the country. While this matter has a significant overhang on the business, its resolution provides meaningful clarity and removes a source of uncertainty from our financial outlook. Wabash remains committed to maintaining rigorous safety, quality and compliance standards across our operations as well as a disciplined approach to risk management. We continue to manage our balance sheet prudently and prioritize capital allocation decisions that drive long-term shareholder value. Turning to the broader market environment. Demand across both the trailer and truck body industries remain soft with limited signs of near-term improvement. This slowdown is reflected in our own business with backlog declining to about $800 million at the end of the third quarter. Given these conditions, we're lowering our full year 2025 guidance to midpoints of $1.5 billion in revenue and approximately negative $2 in adjusted EPS. We expect the fourth quarter to be the weakest of the year, both in terms of revenue and operating margins. As a result, we're taking this opportunity to evaluate our cost structure to better align with near-term market demand and expect to share more on this topic in the quarters ahead. Even with this revised outlook, we still expect to be near cash flow breakeven for the year, including approximately $40 million of investment related to our Trailers as a Service initiative. Looking ahead, our 2026 order book is now open, and we're already seeing a few early wins in the fourth quarter. The bulk of larger fleet orders typically comes together between now and year's end, which will give us much better visibility into next year's demand profile. Based on early customer discussions and the most recent forecast, we remain cautiously optimistic that 2026 could mark the beginning of a gradual recovery, supported by pent-up replacement needs and improving freight conditions. Additionally, we're beginning to see signs of capacity exiting the market at an accelerating rate, driven in part by new driver qualification standards such as the English proficiency requirements that are reducing available labor supply. Over time, this tightening capacity should rebalance the freight market, setting the stage for a healthier demand environment as conditions stabilize. As always, we stay disciplined, aligned with our customers and ready to capture profitable growth as the market finds its footing. I'll now turn the call over to Mike for his comments.

Thanks, Brent. Dating back to when we formed this segment 4 years ago, we discussed how we would be able to use a parts and service network to become an enterprise that can provide more value add to our customers as well as produce higher margins with a more predictable revenue stream. It was validating to see a revenue number in the third quarter that was among the best we've recorded in a very challenging freight environment. We believe this continues to prove we have established a revenue stream that will prove more resilient in all phases of the freight cycle. Third quarter margins were lower than what we would have expected to see on an ongoing basis as we are experiencing some soft demand in our high-margin OE parts supply business as well as some start-up costs at upfit as we successfully opened 2 new upfit centers in the quarter. We would expect margins in Q4 to be higher than Q3, but still below our longer-term expectation of high teens EBITDA. In the third quarter, the segment grew 16% year-over-year and about 2% sequentially. We have seen this growth in a market that is down over 40% in OE equipment from the peak in 2023, and that gives us confidence that we are seeing structural growth. One of the clearest proof points behind the parts and services momentum sits in our upfit business. Our upfit offerings let us deliver fully tailored equipment in just a couple of weeks, combining the scale of truck body production with the deep customer intimacy that defines parts and services. This is also a business where we are introducing some of our latest cutting-edge digital tools. Using AI, we are now able to quote and upfit a truck body almost instantaneously, allowing our customers to make pricing decisions in real time and place orders for their chassis and truck body together. This process has historically taken days or weeks in the truck body market. We shipped over 540 units in Q3 and about 1,500 units year-to-date. As discussed on the Q2 call, we did open 2 new upfit centers in Q3, one in Northwest Indiana and another in Atlanta, giving us capability in 2 strategic markets and keeping us on pace to exceed 2,000 units in 2025. We would expect to open another new location in Phoenix in the fourth quarter. These 3 new sites established in the second half of 2025 will set the stage for continued growth in this business into 2026 and beyond. We expect to do over 2,500 updated truck bodies in 2026. Trailers as a Service or TaaS, continues to help Wabash extend our manufacturing and distribution leadership through business model innovation. We continue to sign shippers, carriers and brokers across North America, many of whom bundle the trailer with preventative maintenance, telematics, nationwide uptime support and repair management. Wabash continues to redefine trailer accessibility with new trailers as a service offerings that have expanded to include TaaS pools. With pools, we continue to develop solutions that enable logistics providers to grow with flexible, scalable trailer solutions. TAS pools provide shippers with a universal trailer pool that replaces the complexity of managing fragmented pools across different partners. Shippers gain access to a nationwide pool of trailers positioned to support their operations. Every trailer in the pool is supported by Wabash Fleet Care for maintenance and compliance, giving customers confidence that equipment is always road ready. We continue to accelerate the technology road map inside TAS and have either launched or will soon be launching predictive analytics, alerts and automated tracking and billing, capabilities that turn raw data into actionable, measurable savings. We have continued to prepare our physical and digital capabilities for the eventual market upturn, and we'll be ready to ramp TaaS when our customers require it. We believe access to the flexible capacity that TaaS offers will become even more attractive as the market rebounds. We also continue to expand our aftermarket parts and service offerings in both physical locations and digital solutions. With our world-class dealer groups at the backbone, the parts network is extending our reach for our customers as well as providing a nationwide service network that underpins TaaS and fleet care. We've continued to expand our PPN network to over 115 locations, and each new location broadens our network and extends our reach and continues to fulfill our aim of providing more holistic aftersales support for our customers. In conclusion, parts and services provides our customers with connected support that keeps assets running day in and day out. We continue to layer entirely new forms of customer value, creating improvements with our parts and services offerings. From TaaS to upfit to aftermarket parts, these initiatives are closely linked to provide value for our customer. Importantly, we have been able to continue to develop these capabilities in a tough market, ensuring we'll be able to scale quickly as demand returns. The rationale behind scaling parts and services continues to be clear. While the freight market has continued to put pressure on equipment orders in Transportation Solutions, parts and services deliver secular growth and helps in stabilizing earnings through the cycle. As this segment expands, its higher margins will play an ever larger role in Wabash's bottom line and cash flow generation. We continue to grow because we found innovative ways to serve customers, solutions that extend value beyond the original equipment sale and well into the life of the asset. With that, I'll turn the call over to Pat for his comments.

Thanks, Mike. Starting with our third quarter financial results. Consolidated revenue was $382 million. During the quarter, we shipped approximately 6,940 new trailers and 3,065 truck bodies. Challenging market conditions, particularly in our truck body business, led to softer-than-expected demand and revenue coming in below our guidance range of $390 million to $430 million. The lower production volumes also created operational inefficiencies, which contributed to a gross margin of 4.1% and an adjusted operating margin of negative 6.2%, both below our expectations for the quarter. As a reminder, our adjusted non-GAAP results exclude the impact of items related to the settlement of the Missouri legal verdict. In the third quarter, adjusted EBITDA was negative $5 million or negative 1.4% of sales. Adjusted net income attributable to common stockholders was negative $21.2 million or negative $0.51 per diluted share, below expectations, primarily due to lower volumes. Moving on to our reporting segments. Transportation Solutions generated $334 million in revenue and negative $13 million in operating income. Parts and services delivered $61 million in revenue and $6.6 million in operating income, marking our third consecutive quarter of both sequential and year-over-year revenue growth. Despite the challenging market backdrop, we continue to execute on our strategy to build more resilient and recurring revenue streams through our parts and services business. This performance reinforces the stabilizing role of parts and services in our portfolio and highlights the value of a balanced business model as we navigate this down cycle and prepare for recovery. Year-to-date operating cash flow totaled $69.1 million with $60.6 million of free cash flow generated in the third quarter, reflecting strong execution and disciplined working capital management. Turning to the balance sheet. Total liquidity, including cash and available borrowings stood at $356 million as of September 30. On capital allocation, during the third quarter, we invested $5 million in traditional CapEx, $19.3 million in revenue-generating assets to support our Trailers as a Service initiative, repurchased $6.2 million of shares and returned $3.3 million to shareholders through our quarterly dividend. I'll provide additional commentary on our future capital deployment plans shortly. Turning to guidance. Our outlook for the fourth quarter includes revenue in the range of $300 million to $340 million and EPS between negative $0.70 and negative $0.80. This brings our full year 2025 outlook to approximately $1.5 billion in revenue and EPS between minus $1.95 and minus $2.05. From previous midpoints, this represents a reduction of roughly $100 million in revenue and $0.85 in EPS. The most significant changes from our prior outlook stem from lower volumes in Transportation Solutions, driven primarily by the truck body business, which Brent discussed earlier. In addition, the pricing required to fill our remaining Q4 backlog came in lower than anticipated. Combined, these factors have resulted in a gross profit reduction of roughly $0.85 per share versus our prior guidance. As Brent highlighted, this environment underscores the importance of being responsive and disciplined. With much of our 2025 cost structure already set, our focus in the fourth quarter is on realigning costs to current market realities while preserving flexibility to capture opportunities amid continued uncertainty. Looking ahead to 2025 capital deployment, we've adjusted our plans to reflect the current environment. We now expect traditional capital investment in the range of $25 million to $30 million. As you recall, our initial guidance for traditional capital spending for the year was in the range of $50 million to $60 million. We now expect to spend approximately half of that amount as we are managing our cash and balance sheet to reflect market conditions. Year-to-date free cash flow is $9 million, and we now expect to be near breakeven for the full year, including approximately $40 million of investment to support our Trailers as a Service initiative. We're taking a prudent and conservative approach to cash management as we move through this period of uncertainty. Until we have greater clarity on how 2026 shapes up, our focus will be on preserving liquidity and maintaining financial flexibility while positioning ourselves to act quickly when demand begins to recover. With that, I'll turn it back to Brent for closing comments.

As we close out the third quarter, I want to emphasize that we stay true to our values while making the prudent but sometimes difficult decisions needed to manage the cost basis of our business in this environment. Our balance sheet is working, and our liquidity provides the flexibility we need to both navigate near-term headwinds and invest in long-term growth. We remain active in advancing our strategic growth initiatives, building capability and scale even as we align our operations to current demand. We're growing share in dry vans, driven by improved on-time performance and higher customer satisfaction. And our new dry van manufacturing capacity is now fully online, delivering efficiency benefits today and ready to scale as demand improves. Across the organization, we continue to work on the business, strengthening our systems and processes, developing our talent and driving continuous improvement to position Wabash for the future. We will continue to align our structure and strategy with the environment we face today while also preparing for the inevitable freight recovery ahead, one that we believe will allow us to create outsized value for our shareholders, our customers and our people. We are not standing still. I'll now turn the call back to the operator, and we'll open it up for questions.

Our first question will come from the line of Jeff Kauffman with Vertical Research Partners.

So Brent, can we dive into the tariff question because now we have the Section 232, which I guess is supposed to level the playing field for domestic OEMs versus the OEMs that produce in Mexico. Can you talk a little bit about how you were hit by tariffs in your third quarter, whether it was steel and aluminum on the trailers or parts or things like that? And then you mentioned that the Section 232 is going to help a little more in '26. I assume that's because you have to kind of register different parts or different aspects of your costs with Department of Commerce and get it approved before you can get the rebate. And kind of walk us through how that's going to level the playing field or level margins and maybe address competition your product versus your competitors that build in Mexico.

Sure. Let me talk about the larger question about how the 232 tariff works and what specifically it's intended to do. And then I'll let Pat talk about what was the Q3 specific tariff impact to Wabash. So the 232 finding from the federal government was specifically framed around the steel and aluminum that is purchased and then incorporated into our non-U.S. domestic competitors. So it doesn't take into account the full trailer cost structure. It's just the specific steel and aluminum content, both the base metal and then the aluminum and steel incorporated into the procured subassemblies as applicable. So the way we think about it is that once that ruling is done, and so we're roughly about 45 days old on that, you go through a period of language writing that makes up the literal tariff structure that will then be put in place. That typically takes multiple months to occur and then gets put in place over the course and for us, that would primarily be -- or for the industry in the first and somewhat second quarter. That's when it starts to become real for the industry and for our competitors. And then you'll see a period of their decisions after that on how they manage it, in terms of how they look at pricing, how much they pass along to their customers, and then we'll respond accordingly. The 232, in this case, specifically, again, deals with steel and aluminum, it does not exactly level the playing field in all aspects that we're looking at in terms of the reality of how our competitors play in the marketplace. Those are ongoing conversations that we're having on how best to deal with that going forward, specifically in the climate that we're in right now. That's why we say that the 232 will primarily have an impact to a degree in the latter half of 2026, really setting up primarily for the 2027 buying season.

So Brent, quick question. Maybe it applies differently to trailers than the truck OEs. But I thought there was a rebate component of the 232 that could be used to offset the steel and aluminum tariff cost to U.S.-based production or, let's say, the component of the parts that may come from outside the U.S. that are tariff. I thought that was supposed to kind of also help the U.S.-based producing guys.

That is a very unique construct that is specific to the steel and aluminum related tariffs that were part of the heavy-duty tractor-related, 232 binding. That is not applicable to the specific trailer 232 binding. Those are 2 different things. Our 232 binding is a much more traditional methodology and application.

Okay. So the real benefit to you is just leveling the playing field to some degree versus your competition that builds trailers in Mexico and around the U.S.

And flipping follow up on your question about the third quarter.

Yes. So we've talked about it in the past couple of quarters about our ability to insulate Wabash from direct impact of tariffs because of our mostly domestic sourced position. That doesn't mean there isn't the secondary impacts where our vendors, some of our vendors are getting hit with tariffs and then passing those along to us or engaging in negotiations with our team to pass those along. So the estimate that we have for the Q3 actual results is about $1 million, but those would be not from direct tariffs to Wabash, but price increases from our vendors that were passed through to us related to tariffs that are being imposed on them. So that's a fairly minimal number for the third quarter. We would expect to see a similar number in the fourth quarter. But then as we turn to 2026, we would expect those sorts of increases coming from our suppliers to increase into '26, and we're pricing our trailers and truck bodies accordingly with the anticipation of those second derivative tariffs coming to us get baked into our finished good price as well.

Okay. And then one last follow-up. Just based on the guidance you're giving for fourth quarter on a revenue basis, $320 million at the midpoint, can you give us a rough idea of what the implied shipment count is beneath that in terms of you did 69-40 this quarter. What level in the fourth quarter would underlie that, that $320 million midpoint?

That is just the trailers, Jeff?

Yes, trailers and truck bodies, whatever you're comfortable.

Yes. Truck bodies will be less than Q3, significantly less. We did roughly 3,000. We're looking at probably around 2,000 in the fourth quarter. That will be the biggest impact sequentially from Q3 to Q4.

Okay. And then for trailer deliveries?

It will be slightly lower. I don't have an exact number that I could give you right now.

No, that's fine. I was just looking for a little ballpark there.

Our final question will come from the line of Mike Shlisky with D.A. Davidson.

As I look to some of the data in the market and talk to some folks, if there's a bright spot in the trailer market right now, it's in platform trailers. I'm not exactly sure, Brent, if you have any commentary as to what's behind that, whether it's either under construction and some of the large components needed to ship or people are anticipating an off-highway machinery improvement next year that would need more of these kind of trailers or what? I'd be curious whether you're participating in that kind of upside, if that's been a bright spot for you as well. I know it's a somewhat small size of the business, but any commentary you can tell us about how you might be able to find some growth in platforms in the near term, that would be helpful.

Sure. So for the platform business, that was a business that led into the freight recession almost 2.5, 3 years ago. It has been stable. There are absolutely some tailwinds that are starting to form, and there is a significant amount of customer rhetoric. We just got back from ATA, and it was there. There is some belief across that customer base that we could see a meaningful uptick in freight demand within the Platform segment. Hopefully, that results, right, in trailer purchases. A big part of it is the AI data center alcohol-related infrastructure actions that are coming to fruition. You're seeing a further increase in just general infrastructure spending as permits, building permits that were issued 18, 24 months ago are now becoming actionable. And so we see those types of activities kind of coming into the forecast for that specific segment. We look for...

Hello? Did I lose you guys? Can you hear me?

This is the operator. I apologize but there will be a slight delay in today's call.

So I'm not sure where we got cut off, but let me follow up and ask that we fully address your question.

Yes. I sound like, hey, is going well in platforms. There's some specifics there on data centers and infrastructure. All sounds great. What I did want to just get the final part of the answer was how is Wabash capitalizing? Are you seeing the orders increase at least for that part of the business currently? And maybe...

Where we're at right now is that we absolutely see it stabilizing the momentum that we've relatively had throughout 2025. I would say right now, we are in the quoting and discussion phase of how our customers are interpreting where they think the market is going, specifically in platforms in 2026. Those look to be, we'll call it, beneficial at this point, but we have to work those through the actual sales process to get those back into the backlog.

Got you. Great. And then I just wanted to touch on the orders you've gotten so far last month or the last few weeks here in the fourth quarter. Pricing-wise, are you seeing any major trends there? Are people really asking -- are you getting a lot of pushback on price and you even raise price, et cetera? Just get a sense for the kind of environment there.

Yes. I would say the pricing environment is exactly what we thought it would be going into 2026. There are aspects of the market, certain products with I'll call it, certain industry niches that there are opportunities to have some level of, we'll call positive pricing influence. There are absolutely areas that there is a holding of serve in terms of just generally lower ASPs as compared to maybe where we were 18 months ago, but it is appropriate for what we would expect for the market as forecasted in 2026 sitting here right now.

Got you. And then maybe one last one. I guess I was curious, you touched on it in your comments about some fleet some fleets kind of winding down business. I know some of these are beloved customers or long-time customers. I've been seeing a little bit of that, too, just looking at social media, people kind of starting off, things of that nature. But can you quantify -- I mean, if you can ballpark what percent of maybe the national trailer fleet has maybe taken a step back? And how far along do you think we are as far as what inning we're in or what quarter we're in to seeing the correct national fleet kind of go forward?

I want to make sure I'm perfectly clear on your question. You're talking about where are we at in terms of the ongoing, we'll call it, fleet construct as capacity comes out of the market?

Yes. I hate to use the word fleet bankruptcies, but I just want to make sure is how far along are we to find the correct national fleet size?

We'll call it fleet rightsizing. So I think we are going to see a fairly measurable -- I don't want to necessarily use the word substantial because it's relative, but a meaningful level of capacity come out of the market over the next 6 months at a faster rate than what we have seen over the previous 6, which was faster than the 6 before that. And I think we are right at that level where we can break through a level of equilibrium and begin to create some positive influences in the overall freight pricing dynamics, which our customers desperately need, and we'd be very thankful for. The -- we'll call it, underlying information and data is showing this. We see through the data that we talked to. And again, we just came from ATA we somewhat got it from the horse's mouth that the data that they track is also creating some optimism on their part that if sustained, can absolutely begin to tilt the market in the first half of -- begin to tilt the market meaningfully in the first half of 2026, changing the freight lands into the latter half of '26.

If we start seeing fleets file do you anticipate a period of transition where there's asset liquidation has to take place first of some generally used units prior to new?

No. Because I mean, there can be some, I won't call it reconciliation of assets. But honestly, most of the carriers that tend to fall out at this stage are already -- they're past the first and second level use of these assets. So they play within a different market that we are very much arm's distance away from. So we see much less of an impact. What will primarily be the case is that as they see that meaningful level of capacity come out, our customers are just on the level of anxiety in terms of their lack of keeping up with replacement and cost per mile management is significant. They just need to know that they -- that it is a solid investment to begin to replace and to make up for the gap in replacement for them to begin to meaningfully come to the table with asset purchases as early as midyear 2026. That's all we're looking for right now. And I think that's where most of the, we'll call it, precipitated activity will be for us when we see this capacity come out. And that's before we even get into a growth conversation. Let's say that for 2027, just coming back to replacement and beginning to chew into replacement has very meaningful impact for us in terms of volume, not only now for vans, but for truck bodies, tanks and platforms. So it really serves itself up for a very interesting point acceleration as this capacity comes out.

And that will conclude our question-and-answer session. I'll hand the call back to Jacob Page for any closing comments.

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