WABASH NATIONAL Corp

Previous wording

▪the highly cyclical nature of our business;

Current wording

▪the highly cyclical nature of our business and impact of economic conditions on markets, customers, and demand for our products;

Previous wording

The following table sets forth certain operating data as a percentage of net sales for the three and nine months ended September 30, 2024 and 2023:

Current wording

The following table sets forth certain operating data as a percentage of net sales for the three months ended March 31, 2025 and 2024:

Previous wording

For the three-month period ended September 30, 2024, we recorded net sales of $464.0 million compared to $632.8 million in the prior year period. Net sales for the three-month period ended September 30, 2024, decreased $168.8 million, or 26.7%, compared to the prior year period. New trailer shipments decreased 29.5% and new truck body shipments decreased 12.7%. The decrease in new trailer (primarily dry vans) shipments drove the overall decrease in revenue, and was partially offset by higher per unit revenue on truck bodies. Net sales within the P&S reportable segment decreased $4.1 million compared to the prior year period, primarily due to a decrease in sales within our Process Systems and Components businesses, partially offset by an increase in sales in our Upfitting Solutions and Services and Aftermarket Parts businesses. Overall, gross profit margin decreased to 12.1% in the third quarter of 2024 compared to 19.4% in the prior year period primarily driven by lower sales volumes and higher fixed costs. We continue to focus on positioning ourselves to profitably capitalize on current demand while being vigilant to respond to any key changes to the industry and overall economy.

Current wording

For the three-month period ended March 31, 2025, we recorded net sales of $380.9 million compared to $515.3 million in the prior year period. Net sales for the three-month period ended March 31, 2025, decreased $134.4 million, or 26.1%, compared to the prior year period. New trailer shipments decreased 26.0% and new truck body shipments decreased 18.7%. The decrease in new trailer (primarily dry vans) shipments drove the overall decrease in revenue. Net sales within the P&S reportable segment increased $2.7 million compared to the prior year period, primarily due to an increase in sales within our Services and Process Systems businesses, partially offset by a decrease in our Components business. Overall, gross profit margin decreased to 5.0% in the first quarter of 2025 compared to 14.8% in the prior year period primarily driven by lower sales volumes. We continue to focus on positioning ourselves to profitably capitalize on current demand while being vigilant to respond to any key changes to the industry and overall economy.

Previous wording

For the three-month period ended September 30, 2024, selling, general and administrative expenses increased $444.3 million as compared to the same period in 2023. As a percentage of net sales, selling, general and administrative expenses were 104.8% in the third quarter of 2024 as compared to 6.6% in the prior year period. The overall increase in selling, general and administrative expenses in the current year period compared to the same period in the prior year was driven by the impacts of the Product Liability Matter, partially offset by a decrease of $5.8 million in employee-related costs, including benefits and incentive programs.

Current wording

For the three-month period ended March 31, 2025, selling, general and administrative expenses declined $342.0 million as compared to the same period in 2024. As a percentage of net sales, selling, general and administrative expenses were (78.3)% in the first quarter of 2025 as compared to 8.5% in the prior year period. The overall decrease in selling, general and administrative expenses in the current year period compared to the same period in the prior year was driven by the impacts of the Product Liability Matter, partially offset by an increase of $3.0 million in employee-related costs, including benefits and incentive programs.

Previous wording

Net sales in the third quarter of 2024 decreased $168.8 million, or 26.7%, compared to the third quarter of 2023. By business segment, prior to the elimination of intercompany sales, sales and related units sold were as follows (dollars in thousands):

Current wording

Net sales in the first quarter of 2025 decrease $134.4 million, or 26.1%, compared to the first quarter of 2024. By business segment, prior to the elimination of intercompany sales, sales and related units sold were as follows (dollars in thousands):

Previous wording

TS segment sales, prior to the elimination of intersegment sales, were $415.5 million for the third quarter of 2024, a decrease of $167.4 million, or 28.7%, compared to the third quarter of 2023. New trailers shipped during the third quarter of 2024 totaled 7,585 trailers compared to 10,765 trailers in the prior year period, a decrease of 29.5%, which was primarily driven by lower new trailer shipments (primarily dry vans). New truck bodies shipped during the third quarter of 2024 totaled 3,630 truck bodies compared to 4,160 truck bodies in the prior year period, a decrease of 12.7%, offset by favorable mix of higher priced units resulting in a slight increase in truck body revenue. Overall, the decrease in new trailer shipments outpaced the increase in revenue per unit in truck bodies, driving the overall decrease in revenue.

Current wording

TS segment sales, prior to the elimination of intersegment sales, were $346.8 million for the first quarter of 2025, a decrease of $123.6 million, or 26.3%, compared to the first quarter of 2024. New trailers shipped during the first quarter of 2025 totaled 6,290 trailers compared to 8,500 trailers in the prior year period, a decrease of 26.0%, which was primarily driven by lower dry van shipments. New truck bodies shipped during the first quarter of 2025 totaled 3,000 truck bodies compared to 3,690 truck bodies in the prior year period, a decrease of 18.7%, partially offset by favorable mix of higher priced units.

Previous wording

P&S segment sales, prior to the elimination of intersegment sales, were $52.3 million for the third quarter of 2024, a decrease of $4.1 million, or 7.3%, compared to the third quarter of 2023. The overall decrease in sales for this segment was due primarily to lower sales in our Process Systems and Components businesses of $3.0 million and $7.0 million, respectively. The overall decrease in sales was partially offset by higher sales within our Upfitting Solutions and Services business and our Aftermarket Parts business of $4.7 million and $4.2 million, respectively.

Current wording

P&S segment sales, prior to the elimination of intersegment sales, were $52.0 million for the first quarter of 2025, an increase of $2.7 million, or 5.5%, compared to the first quarter of 2024. The overall increase in sales for this segment was due primarily to higher sales in our Services and Process Systems businesses of $3.4 million and $2.3 million, respectively. The overall increase in sales was partially offset by lower sales within our Components business of $2.0 million.

Previous wording

Cost of sales was $408.0 million in the third quarter of 2024, a decrease of $101.9 million, or 20.0%, compared to the prior year period. Cost of sales is comprised of material costs, a variable expense, and other manufacturing costs, comprised of both fixed and variable expenses, including direct and indirect labor, outbound freight, overhead expenses, and depreciation.

Current wording

Cost of sales was $361.9 million in the first quarter of 2025, a decrease of $76.9 million, or 17.5%, compared to the prior year period. Cost of sales is comprised of material costs, a variable expense, and other manufacturing costs, comprised of both fixed and variable expenses, including direct and indirect labor, outbound freight, overhead expenses, and depreciation.

Previous wording

TS segment cost of sales was $370.6 million in the third quarter of 2024, a decrease of $104.8 million, or 22.0%, compared to the prior year period. The decrease in cost of sales, which was primarily driven by lower shipment volumes, was due to a decrease in material costs of $85.2 million, or 26.6%, along with a decrease in certain other manufacturing costs.

Current wording

TS segment cost of sales was $338.4 million in the first quarter of 2025, a decrease of $68.9 million, or 16.9%, compared to the prior year period. The decrease in cost of sales, which was primarily driven by lower shipment volumes, was due to a decrease in material costs of $47.4 million, or 18.1%, along with a decrease in certain other manufacturing costs.

Previous wording

Gross profit was $56.0 million in the third quarter of 2024, a decrease of $66.9 million from the prior year period. Gross profit as a percentage of net sales was 12.1% for the third quarter of 2024, compared to 19.4% for the same period in 2023. Gross profit by segment was as follows (dollars in thousands):

Current wording

Gross profit was $19.0 million in the first quarter of 2025, a decrease of $57.4 million from the prior year period. Gross profit as a percentage of net sales was 5.0% for the first quarter of 2025, compared to 14.8% for the same period in 2024. Gross profit by segment was as follows (dollars in thousands):

Previous wording

TS segment gross profit was $44.9 million for the third quarter of 2024 compared to $107.5 million for the third quarter of 2023. Gross profit, prior to the elimination of intersegment sales, as a percentage of net sales, was 10.8% in the third quarter of 2024 compared to 18.5% in the comparative 2023 period. The overall decrease in gross profit from the prior year period was primarily driven by a decrease in new trailer shipments with our dry van products accounting for approximately $48.5 million of the decrease in gross profit. This was partially offset by favorable product mix across product lines.

Current wording

TS segment gross profit was $8.4 million for the first quarter of 2025 compared to $63.1 million for the first quarter of 2024. Gross profit, prior to the elimination of intersegment sales, as a percentage of net sales, was 2.4% in the first quarter of 2025 compared to 13.4% in the comparative 2024 period. The overall decrease in gross profit from the prior year period was primarily driven by a decrease in new trailer shipments with our dry van products accounting for approximately $44.5 million of the decrease in gross profit.

Previous wording

P&S segment gross profit was $11.1 million for the third quarter of 2024 compared to $15.4 million for the third quarter of 2023. Gross profit, prior to the elimination of intersegment sales, as a percentage of net sales, was 21.2% in the third quarter of 2024 compared to 27.2% in the 2023 period. The overall decrease in gross profit was primarily related to the decrease in sales in our Process Systems and Components businesses.

Current wording

P&S segment gross profit was $10.6 million for the first quarter of 2025 compared to $13.3 million for the first quarter of 2024. Gross profit, prior to the elimination of intersegment sales, as a percentage of net sales, was 20.4% in the first quarter of 2025 compared to 27.1% in the 2024 period. The overall decrease in gross profit was primarily related to the increase in depreciation and other overheads, whose growth outpaced the increase in costs associated with higher sales.

Previous wording

General and administrative expenses for the third quarter of 2024 increased $443.2 million, or 1236.8%, from the prior year period. The increase from the prior year period was driven by the impacts of the Product Liability Matter, partially offset by a decrease of $5.4 million in employee-related costs, including benefits and incentive programs. As a percentage of net sales, general and administrative expenses were 103.2% for the third quarter of 2024 compared to 5.7% for the third quarter of 2023. The overall increase in general and administrative expenses as a percentage of net sales was primarily attributable to the impacts of the Product Liability Matter and lower net sales in the third quarter.

Current wording

General and administrative expenses for the first quarter of 2025 decreased $341.4 million, or 930.8%, from the prior year period. The decrease from the prior year period was driven by the impacts of the Product Liability Matter, partially offset by an increase of $3.4 million in employee-related costs, including benefits and incentive programs. As a percentage of net sales, general and administrative expenses were (80.0)% for the first quarter of 2025 compared to 7.1% for the first quarter of 2024. The overall decrease in general and administrative expenses as a percentage of net sales was primarily attributable to the impacts of the Product Liability Matter in the first quarter.

Previous wording

Selling expenses were $7.1 million in the third quarter of 2024, an increase of $1.0 million, or 17.1%, compared to the prior year period. The increase was primarily attributable to higher advertising and promotional expenses of approximately $1.3 million offset partially offset by a decrease in employee costs related to benefits and incentive programs of approximately $0.4 million. As a percentage of net sales, selling expenses were 1.5% for the third quarter of 2024 compared to 1.0% for the third quarter of 2023. The increase in selling expenses as a percentage of net sales was due in part to lower overall sales and an increase in advertising and promotional expenses.

Current wording

Selling expenses were $6.4 million in the first quarter of 2025, a decrease of $0.7 million, or 9.4%, compared to the prior year period. The decrease was primarily attributable to a decrease in employee costs related to benefits and incentive programs of approximately $0.4 million. As a percentage of net sales, selling expenses were 1.7% for the first quarter of 2025 compared to 1.4% for the first quarter of 2024. The increase in selling expenses as a percentage of net sales was due in part to lower overall sales.

Previous wording

Amortization of intangibles was $2.9 million during the third quarter of 2024 compared to $3.2 million in the prior year period. Amortization of intangibles was the result of expenses recognized for intangible assets recorded from previous acquisitions. The decrease from the prior year period is related to certain intangible assets recorded upon the acquisition of Supreme in September 2017 that became fully amortized at December 31, 2023.

Current wording

Amortization of intangibles was $2.8 million during the first quarter of 2025 compared to $3.2 million in the prior year period. Amortization of intangibles was the result of expenses recognized for intangible assets recorded from previous acquisitions. The decrease from the prior year period is related to continued amortization of certain intangible assets recorded upon the acquisition of Supreme in September 2017.

Previous wording

Interest expense totaled $5.0 million during the third quarter of 2024 and $4.9 million during the third quarter of 2023. Interest expense relates to interest and non-cash accretion charges on our Senior Notes due 2028 and Revolving Credit Agreement.

Current wording

Interest expense totaled $5.0 million during the first quarter of 2025 and $5.0 million during the first quarter of 2024. Interest expense relates to interest and non-cash accretion charges on our Senior Notes due 2028 and Revolving Credit Agreement.

Previous wording

Other, net for the third quarter of 2024 represented income of $1.4 million as compared to income of $0.8 million for the prior year period. Income for the current and prior year periods primarily relate to interest income.

Current wording

Other, net for the first quarter of 2025 represented income of $1.6 million as compared to income of $1.6 million for the prior year period. Income for the current and prior year periods primarily relate to interest income.

Previous wording

We recognized an income tax benefit of $108.4 million in the third quarter of 2024 compared to income tax expense $18.1 million for the same period in the prior year. The effective tax rate for this period was 24.7% compared to a rate of 24.6% for the same period in the prior year. The effective tax rate for both the third quarter of 2024 and the third quarter of 2023 differs from the U.S. Federal statutory rate of 21% primarily due to the impact of state taxes.

Current wording

We recognized an income tax expense of $78.1 million in the first quarter of 2025 compared to income tax expense of $6.4 million for the same period in the prior year. The effective tax rate for this period was 25.3% compared to a rate of 26.0% for the same period in the prior year. The effective tax rate for both the first quarter of 2025 and the third quarter of 2024 differs from the U.S. Federal statutory rate of 21% primarily due to the impact of state taxes.

Previous wording

Our capital structure is comprised of a mix of debt and equity. As of September 30, 2024, our debt-to-equity ratio was approximately 2.0:1.0. Our long-term objective is to generate operating cash flows sufficient to support the growth within our businesses and increase shareholder value. This objective will be achieved through a balanced capital allocation strategy of sustaining strong liquidity, maintaining healthy leverage ratios, investing in the business, both organically and strategically, and returning capital to our shareholders. The Board of Directors has designated a Finance Committee for the primary purpose of assisting the Board in its oversight of the Company’s capital structure, financing, investment, and other financial matters of importance to the Company.

Current wording

Our capital structure is comprised of a mix of debt and equity. As of March 31, 2025, our debt-to-equity ratio was approximately 1.0:1.0. Our long-term objective is to generate operating cash flows sufficient to support the growth within our businesses and increase shareholder value. This objective will be achieved through a balanced capital allocation strategy of sustaining strong liquidity, maintaining healthy leverage ratios, investing in the business, both organically and strategically, and returning capital to our shareholders. The Board of Directors has designated a Finance Committee for the primary purpose of assisting the Board in its oversight of the Company’s capital structure, financing, investment, and other financial matters of importance to the Company.

Previous wording

During the first nine months of 2024, in keeping with this balanced approach, we paid dividends of approximately $11.3 million and repurchased shares under our Board approved share repurchase program totaling $55.7 million (inclusive of excise tax). Our Revolving Credit Agreement has total revolving commitments of $350.0 million and a maturity date of September 2027, which is the nearest maturity date of our long-term debt. As of September 30, 2024, there were no amounts outstanding under the Revolving Credit Agreement. Collectively, these actions demonstrate our confidence in the financial outlook of the Company and our ability to generate cash flow, both near and long term, and reinforce our overall commitment to deliver shareholder value while maintaining the flexibility to continue to execute our strategic plan for profitable growth and diversification.

Current wording

During the first three months of 2025, in keeping with this balanced approach, we paid dividends of approximately $3.9 million and repurchased shares under our Board approved share repurchase program totaling $13.7 million (inclusive of excise tax). Our Revolving Credit Agreement has total revolving commitments of $350.0 million and a maturity date of September 2027, which is the nearest maturity date of our long-term debt. As of March 31, 2025, there was $20.0 million outstanding under the Revolving Credit Agreement. Collectively, these actions demonstrate our confidence in the financial outlook of the Company and our ability to generate cash flow, both near and long term, and reinforce our overall commitment to deliver shareholder value while maintaining the flexibility to continue to execute our strategic plan for profitable growth and diversification.

Previous wording

Our liquidity position, defined as cash on hand and available borrowing capacity under the Revolving Credit Agreement, amounted to $404.9 million as of September 30, 2024, a decrease of 9% compared to $447.0 million as of September 30, 2023 and a decrease of 22% from $516.1 million as of December 31, 2023. The decrease as of September 30, 2024 compared to September 30, 2023 was primarily attributable to a lower available capacity on the Revolving Credit Agreement and a lower cash balance as of September 30, 2024. The decrease as of September 30, 2024 compared to December 31, 2023 was primarily attributable to a lower cash balance as of September 30, 2024. For the remainder of 2024, we expect to continue our commitment to fund our working capital requirements, capital expenditures, and our Trailers as a Service (TAAS)SM initiative from operations or available borrowing capacity under the Revolving Credit Agreement (as needed). We will continue to maintain our assets to react to any economic and/or industry changes, while also responsibly returning capital to our shareholders. We will continue to move rapidly to adjust to the current environment, including to the softening of demand for certain of our products, to preserve the strength of our balance sheet, while prioritizing the safety of our employees and ensuring the liquidity and financial well-being of the Company.

Current wording

Our liquidity position, defined as cash on hand and available borrowing capacity under the Revolving Credit Agreement, amounted to $310.0 million as of March 31, 2025, a decrease of 20% compared to $389.0 million as of March 31, 2024 and a decrease of 27% from $421.9 million as of December 31, 2024. The decreases as of March 31, 2025 compared to both December 31, 2024 and March 31, 2024 were primarily attributable to lower available capacities on the Revolving Credit Agreement and lower cash balances as of December 31, 2024 and March 31, 2025. For the remainder of 2025, we expect to continue our commitment to fund our working capital requirements, capital expenditures, and our Trailers as a Service (TAAS)SM initiative from operations or available borrowing capacity under the Revolving Credit Agreement (as needed). We will continue to maintain our assets to react to any economic and/or industry changes, while also responsibly returning capital to our shareholders. We will continue to move rapidly to adjust to the current environment, including to the softening of demand for certain of our products, to preserve the strength of our balance sheet, while prioritizing the safety of our employees and ensuring the liquidity and financial well-being of the Company.

Previous wording

On October 6, 2021, we closed on an offering of $400 million in aggregate principal amount of its 4.50% unsecured Senior Notes due 2028 (the “Senior Notes”). The Senior Notes were issued pursuant to an indenture dated as of October 6, 2021, by and among Wabash, certain subsidiary guarantors named therein (the “Guarantors”) and Wells Fargo Bank, National Association, as trustee (the “Indenture”). The Senior Notes bear interest at the rate of 4.50% and pay interest semi-annually in cash in arrears on April 15 and October 15 of each year. The Senior Notes will mature on October 15, 2028. At any time prior to October 15, 2024, we may redeem some or all of the Senior Notes for cash at a redemption price equal to 100% of the aggregate principal amount of the Senior Notes being redeemed plus an applicable make-whole premium set forth in the Indenture and accrued and unpaid interest to, but not including, the redemption date.

Current wording

On October 6, 2021, we closed on an offering of $400 million in aggregate principal amount of its 4.50% unsecured Senior Notes (the “Senior Notes”). The Senior Notes were issued pursuant to an indenture dated as of October 6, 2021, by and among Wabash, certain subsidiary guarantors named therein (the “Guarantors”) and Wells Fargo Bank, National Association, as trustee (the “Indenture”). The Senior Notes bear interest at the rate of 4.50% and pay interest semi-annually in cash in arrears on April 15 and October 15 of each year. The Senior Notes will mature on October 15, 2028.

Previous wording

Prior to October 15, 2024, we may redeem up to 40% of the Senior Notes at a redemption price of 104.500% of the principal amount, plus accrued and unpaid interest to, but not including, the redemption date, with the proceeds of certain equity offerings so long as if, after any such redemption occurs, at least 60% of the aggregate principal amount of the Senior Notes remain outstanding. On and after October 15, 2024, we may redeem some or all of the Senior Notes at redemption prices (expressed as percentages of principal amount) equal to 102.250% for the twelve-month period beginning on October 15, 2024, 101.125% for the twelve-month period beginning October 15, 2025 and 100.000% beginning on October 15, 2026, plus accrued and unpaid interest to, but not including, the redemption date. Upon the occurrence of a Change of Control (as defined in the Indenture), unless we have exercised its optional redemption right in respect of the Senior Notes, the holders of the Senior Notes will have the right to require us to repurchase all or a portion of the Senior Notes at a price equal to 101% of the aggregate principal amount of the Senior Notes, plus any accrued and unpaid interest to, but not including, the date of repurchase.

Current wording

We may redeem some or all of the Senior Notes at redemption prices (expressed as percentages of principal amount) equal to 102.250% for the twelve-month period beginning on October 15, 2024, 101.125% for the twelve-month period beginning October 15, 2025 and 100.000% beginning on October 15, 2026, plus accrued and unpaid interest to, but not including, the redemption date. Upon the occurrence of a Change of Control (as defined in the Indenture), unless we have exercised its optional redemption right in respect of the Senior Notes, the holders of the Senior Notes will have the right to require us to repurchase all or a portion of the Senior Notes at a price equal to 101% of the aggregate principal amount of the Senior Notes, plus any accrued and unpaid interest to, but not including, the date of repurchase.

Previous wording

Contractual coupon interest expense and accretion of fees for the Senior Notes for each three- and nine-month period ended September 30, 2024 was $4.5 million and $0.2 million, and $13.5 million and $0.5 million, respectively. Contractual coupon interest expense and accretion of fees for the Senior Notes for each three- and nine-month period ended September 30, 2023 was $4.5 million and $0.2 million, and $13.5 million and $0.5 million, respectively. Contractual coupon interest expense and accretion of fees for the Senior Notes are included in Interest expensein our Condensed Consolidated Statements of Operations.

Current wording

Contractual coupon interest expense and accretion of fees for the Senior Notes for each three-month period ended March 31, 2025 and 2024 was $4.5 million and $0.2 million, respectively. Contractual coupon interest expense and accretion of fees for the Senior Notes are included in Interest expensein the Company’s Condensed Consolidated Statements of Operations.

Previous wording

Interest expense under the Revolving Credit Agreement for the three- and nine-month periods ended September 30, 2024 was approximately $0.2 million and $0.6 million, respectively. During the three- and nine-month periods ended September 30, 2023, interest expense under the Revolving Credit Agreement was approximately $0.2 million and $0.7 million, respectively. Interest expense under the Revolving Credit Agreement is included in Interest expensein our Condensed Consolidated Statements of Operations.

Current wording

Interest expense under the Revolving Credit Agreement for each three-month period ended March 31, 2025 and 2024 was approximately $0.3 million and $0.2 million, respectively. Interest expense under the Revolving Credit Agreement is included in Interest expensein the Company’s Condensed Consolidated Statements of Operations.

Previous wording

Cash provided by operating activities for the first nine months of 2024 totaled $36.4 million, compared to providing $204.6 million during the same period in 2023. Cash provided by operations during the current year period was the result of net loss adjusted for various non-cash activities including depreciation, amortization, deferred income taxes, stock-based compensation, equity in loss of unconsolidated entity, legal matter expense and a $75.3 million increase in working capital. Changes in key working capital accounts for 2024 and 2023 are summarized below (in thousands):

Current wording

Cash used in operating activities for the first three months of 2025 totaled $0.3 million, compared to using $17.4 million during the same period in 2024. Cash used in operations during the current year period was the result of net income adjusted for a large non-cash reduction in legal matter expenses. Changes in key working capital accounts for 2025 and 2024 are summarized below (in thousands):

Previous wording

Accounts receivable increased $55.7 million in the first nine months of 2024 as compared to a $44.4 million decrease in the prior year period. Days sales outstanding, a measure of working capital efficiency that measures the amount of time a receivable is outstanding, was 47 days and 30 days for the three months ended September 30, 2024 and 2023, respectively. The increase in accounts receivable during the first nine months of 2024 compared to 2023 was primarily due to the timing of shipments and receipt of customer payments. Inventory decreased by $7.0 million during the first nine months of 2024 as compared to an increase of $100.4 million in the 2023 period. Our inventory turns, a commonly used measure of working capital efficiency that measures how quickly inventory turns per year, was approximately 7 times in each of the 2024 and 2023 periods. The decrease in inventory for the 2024 period was primarily attributable to lower raw material inventory due to lower production in 2024 versus 2023. Accounts payable and accrued liabilities decreased by $24.0 million during the first nine months of 2024 compared to an increase of $39.3 million for the same period in 2023. Days payable outstanding, a measure of working capital efficiency that measures the amount of time a payable is outstanding, was 41 days for the three months ended September 30, 2024 compared to 36 days for the three months ended September 30, 2023.

Current wording

Accounts receivable increased $27.7 million in the first three months of 2025 as compared to a $64.7 million increase in the prior year period. Days sales outstanding, a measure of working capital efficiency that measures the amount of time a receivable is outstanding, was 41 days and 43 days for the three months ended March 31, 2025 and 2024, respectively. The increase in accounts receivable during the first three months of 2025 compared to 2024 was primarily due to the timing of shipments and receipt of customer payments. Inventory increased by $19.8 million during the first three months of 2025, compared to an increase of $10.9 million in the 2024 period. Our inventory turns, a commonly used measure of working capital efficiency that measures how quickly inventory turns per year, was approximately 6 times in the three months ended March 31, 2025, a decrease of 1 time from the 2024 period. The increase in inventory for the 2025 period was primarily attributable to higher raw material inventory and lower production and shipments in compared to the 2024 period. Accounts payable and accrued liabilities increased by $73.2 million during the first three months of 2025 compared to an increase of $22.2 million for the same period in 2024. Days payable outstanding, a measure of working capital efficiency that measures the amount of time a payable is outstanding, was 53 days for the three months ended March 31, 2025 compared to 43 days for the three months ended March 31, 2024.

Previous wording

Investing activities used $59.6 million during the first nine months of 2024, as compared to using $89.0 million during the same period in 2023. Investing activities for the first nine months of 2024 related to capital expenditures for property, plant, and equipment of $50.8 million and an additional $10.2 million of investments into unconsolidated entities. Investing activities for the first nine months of 2023 related to capital expenditures for property, plant, and equipment of $85.1 million and $4.0 million of expenditures for revenue generating assets. Proceeds from the sale of assets for the first nine months of 2024 totaled $2.8 million. In the first nine months of 2023, investing activities included no proceeds from the sale of assets.

Current wording

Investing activities used $33.8 million during the first three months of 2025, as compared to using $19.2 million during the same period in 2024. Investing activities for the first three months of 2025 related to capital expenditures for property, plant, and equipment of $8.7 million, $20.1 million for revenue generating assets and an additional $3.4 million for a note receivable issued to an unconsolidated entity. Investing activities for the first three months of 2024 related to capital expenditures for property, plant, and equipment of $19.2 million.

Previous wording

Financing activities used $74.2 million during the first nine months of 2024 as compared to using $68.5 million during the same period in 2023. Net cash used by financing activities during the current year period primarily relates to common stock repurchases and withholdings of $62.3 million and cash dividend payments of $11.3 million. Borrowings under our Revolving Credit Agreement totaled $0.7 million, which were fully offset by principal, interest, and unused fee payments made under our Revolving Credit Agreement totaling $0.7 million. Net cash used by financing activities during the first nine months of 2023 primarily related to common stock repurchases and withholdings of $55.9 million and cash dividend payments to our shareholders of $12.2 million. In addition, borrowings under our Credit Agreement totaled $104.0 million, fully offset by principal, interest, and unused fee payments made under our Credit Agreement of $104.0 million.

Current wording

Financing activities used $0.4 million during the first three months of 2025 as compared to using $26.9 million during the same period in 2024. Net cash used by financing activities during the current year period primarily relates to common stock repurchases and withholdings of $16.5 million and cash dividend payments of $3.9 million offset by net borrowings under our Revolving Credit Agreement of $20.0 million. Net cash used by financing activities during the first three months of 2024 primarily related to common stock repurchases and withholdings of $22.1 million and cash dividend payments to our shareholders of $4.2 million. In addition, borrowings under our Credit Agreement totaled $0.2 million, fully offset by principal, interest, and unused fee payments made under our Credit Agreement of $0.2 million.

Previous wording

As of September 30, 2024, our liquidity position, defined as cash on hand and available borrowing capacity under our Revolving Credit Agreement, amounted to $404.9 million, representing a decrease of $42.1 million or 9% compared to September 30, 2023 and a decrease of $111.2 million or 22% compared to December 31, 2023. The decrease as of September 30, 2024 compared to September 30, 2023 was attributable to a lower available capacity on the Revolving Credit Agreement and a lower cash balance as of September 30, 2024. The decrease as of September 30, 2024 compared to December 31, 2023 was primarily attributable to a lower cash balance as of September 30, 2024 which decreased by $97.4 million. Total debt obligations amounted to $400.0 million as of September 30, 2024.

Current wording

As of March 31, 2025, our liquidity position, defined as cash on hand and available borrowing capacity under our Revolving Credit Agreement, amounted to $310.0 million. This represents a decrease of $79.0 million, or 20%, compared to March 31, 2024, and a decrease of $111.8 million, or 27%, compared to December 31, 2024. The decreases in liquidity as of March 31, 2025, compared to both March 31, 2024, and December 31, 2024, was primarily attributable to a lower available capacity on the Revolving Credit Agreement and a lower cash balance. Total debt obligations amounted to $420.0 million as of March 31, 2025.

Previous wording

Capital spending related to property, plant, and equipment amounted to approximately $50.8 million for the first nine months of 2024. In addition, there were $1.4 million expenditures for revenue generating assets for the first nine months of 2024.

Current wording

Capital spending related to property, plant, and equipment amounted to approximately $8.7 million for the first three months of 2025. In addition, there were $20.1 million in expenditures for revenue generating assets for the first three months of 2025.

Previous wording

We considered whether there were any indicators of impairment during the three and nine months ended September 30, 2024 and concluded there were none.

Current wording

We considered whether there were any indicators of impairment during the three months ended March 31, 2025 and concluded there were none.

Previous wording

1 Future interest payments on variable rate long-term debt (if any) are estimated based on the rate in effect as of September 30, 2024, and only include interest payments (not unused line fees). However, as of September 30, 2024, there was no variable rate debt (Revolving Credit Agreement) outstanding.

Current wording

1 Future interest payments on variable rate long-term debt are estimated based on the rate in effect as of March 31, 2025, and only include interest payments (not unused line fees).

Previous wording

Borrowings under the Revolving Credit Agreement bear interest at a variable rate based on the Secured Overnight Financing Rate (“SOFR”) or a base rate determined by the lender’s prime rate plus an applicable margin, as defined in the agreement. Any outstanding borrowings under the Revolving Credit Agreement bear interest at a rate, at our election, equal to (i) adjusted term SOFR plus a margin ranging from 1.25% to 1.75% or (ii) a base rate plus a margin ranging from 0.25% to 0.75%, in each case depending upon the monthly average excess availability under the Revolving Credit Agreement. We are required to pay a monthly unused line fee equal to 0.20% times the average daily unused availability along with other customary fees and expenses of our agent and lenders. During the nine-month period ended September 30, 2024, we had borrowings of principal and payments of principal totaling $0.7 million under the Revolving Credit Agreement. As of September 30, 2024, there were no amounts outstanding under the Revolving Credit Agreement.

Current wording

Borrowings under the Revolving Credit Agreement bear interest at a variable rate based on the Secured Overnight Financing Rate (“SOFR”) or a base rate determined by the lender’s prime rate plus an applicable margin, as defined in the agreement. Any outstanding borrowings under the Revolving Credit Agreement bear interest at a rate, at our election, equal to (i) adjusted term SOFR plus a margin ranging from 1.25% to 1.75% or (ii) a base rate plus a margin ranging from 0.25% to 0.75%, in each case depending upon the monthly average excess availability under the Revolving Credit Agreement. We are required to pay a monthly unused line fee equal to 0.20% times the average daily unused availability along with other customary fees and expenses of our agent and lenders. During the three-month period ended March 31, 2025, we had payments of principal totaling $0.4 million and borrowings of principal totaling $20.4 million under the Revolving Credit Agreement. As of March 31, 2025, there was $20.0 million outstanding under the Revolving Credit Agreement.

Previous wording

We have $19.1 million in purchase commitments through December 2024 for various raw material commodities, including aluminum, steel, polyethylene and nickel as well as other raw material components which are within normal production requirements.

Current wording

We have $12.3 million in purchase commitments through December 2025 for various raw material commodities, including aluminum, polyethylene and nickel as well as other raw material components which are within normal production requirements.

Previous wording

We obtain vehicle chassis for our specialized vehicle products directly from the chassis manufacturers under converter pool agreements. Chassis are obtained from the manufacturers based on orders from customers, and to a lesser extent, for unallocated orders. Although each manufacturer’s agreement has different terms and conditions, the agreements generally state that the manufacturer will provide a supply of chassis to be maintained from time to time at our various facilities with the condition that we will store such chassis and will not move, sell, or otherwise dispose of such chassis except under the terms of the agreement. The manufacturer transfers the chassis to us on a “restricted basis,” retaining the sole authority to authorize commencement of work on the chassis and to make certain other decisions with respect to the chassis including the terms and pricing of sales of the chassis to the manufacturer’s dealers. The manufacturer also does not transfer the certificate of origin to us nor permit us to sell or transfer the chassis to anyone other than the manufacturer (for ultimate resale to a dealer). Although we are party to related finance agreements with manufacturers, we have not historically settled, nor expect to in the future settle, any related obligations in cash. Instead, the obligation is settled by the manufacturer upon reassignment of the chassis to an accepted dealer, and the dealer is invoiced for the chassis by the manufacturer. Accordingly, as of September 30, 2024 our outstanding chassis converter pool with the manufacturer totaled $32.6 million and we have included this financing agreement on our Condensed Consolidated Balance Sheets within Prepaid expenses and otherand Other accrued liabilities. All other chassis programs are handled as consigned inventory belonging to the manufacturer and totaled approximately $1.3 million. Under these agreements, if the chassis is not delivered to a customer within a specified time frame, we are required to pay a finance or storage charge on the chassis. Additionally, we receive finance support funds from manufacturers when the chassis are assigned into our chassis pool. Typically, chassis are converted and delivered to customers within 90 days of our receipt of the chassis.

Current wording

We obtain vehicle chassis for our specialized vehicle products directly from the chassis manufacturers under converter pool agreements. Chassis are obtained from the manufacturers based on orders from customers, and to a lesser extent, for unallocated orders. Although each manufacturer’s agreement has different terms and conditions, the agreements generally state that the manufacturer will provide a supply of chassis to be maintained from time to time at our various facilities with the condition that we will store such chassis and will not move, sell, or otherwise dispose of such chassis except under the terms of the agreement. The manufacturer transfers the chassis to us on a “restricted basis,” retaining the sole authority to authorize commencement of work on the chassis and to make certain other decisions with respect to the chassis including the terms and pricing of sales of the chassis to the manufacturer’s dealers. The manufacturer also does not transfer the certificate of origin to us nor permit us to sell or transfer the chassis to anyone other than the manufacturer (for ultimate resale to a dealer). Although we are party to related finance agreements with manufacturers, we have not historically settled, nor expect to in the future settle, any related obligations in cash. Instead, the obligation is settled by the manufacturer upon reassignment of the chassis to an accepted dealer, and the dealer is invoiced for the chassis by the manufacturer. Accordingly, as of March 31, 2025 our outstanding chassis converter pool with the manufacturer totaled $91.9 million and we have included this financing agreement on our Condensed Consolidated Balance Sheets within Prepaid expenses and otherand Other accrued liabilities. All other chassis programs are handled as consigned inventory belonging to the manufacturer and totaled approximately $3.1 million. Under these agreements, if the chassis is not delivered to a customer within a specified time frame, we are required to pay a finance or storage charge on the chassis. Additionally, we receive finance support funds from manufacturers when the chassis are assigned into our chassis pool. Typically, chassis are converted and delivered to customers within 90 days of our receipt of the chassis.

Previous wording

The decrease in rolling 12-month backlog and total backlog from December 31, 2023 is primarily attributable to the fulfillment of orders during the first nine months of 2024 outpacing new orders. The decrease in rolling 12-month backlog and total backlog from September 30, 2023 is primarily related to the softened new trailer and truck body demand stemming from uncertainty in the 2024 markets.

Current wording

The increase in rolling 12-month backlog and total backlog from December 31, 2024 is primarily attributable to new orders during the first three months of 2024 outpacing the fulfillment of orders. The decrease in rolling 12-month backlog and total backlog from March 31, 2024 is primarily related to the softened new trailer and truck body demand stemming from uncertainty in the 2025 markets.

Previous wording

The trailer industry generally follows the transportation industry’s cycles. According to ACT Research Company (“ACT”), total United States trailer production in 2023 was approximately 318,000 trailers, a 3.2% increase from 2022. While there remains uncertainty in the industry, including but not limited to overall economic conditions and softening of demand for certain of our products, current estimates from ACT and FTR Associations (“FTR”) for 2024 United States trailer production are 235,000 and 228,000, respectively, representing a 26.1% and 27.4% decrease, respectively compared to 2023.

Current wording

The trailer industry generally follows the transportation industry’s cycles. According to ACT Research Company (“ACT”), total United States trailer production in 2024 was approximately 237,000 trailers, a 26.9% decrease from 2023. There remains uncertainty in the industry, including but not limited to overall economic conditions and softening of demand for certain of our products, which is reflected in market outlooks. Current estimates from ACT and FTR Associations (“FTR”) for 2025 United States trailer production are 204,000 and 217,000, respectively, representing a 13.9% and 5.7% decrease, respectively compared to 2024.

Previous wording

ACT is forecasting annual new trailer production levels for 2025, 2026, 2027, 2028, and 2029 of approximately 221,000, 262,000, 302,000, 307,000, and 291,000, respectively. In addition, FTR is forecasting annual new trailer production levels of 253,000 and 290,000 for 2025 and 2026, respectively. These estimates are generally consistent with historical trailer industry production levels. However, overall economic uncertainty and softening demand in the industry for certain of our products could continue to impact these estimates. This uncertainty and softening are evident in the ACT and FTR forecasts, particularly for 2024 production. However, we believe that our strategic plan and actions taken over the last several years have positioned us to remain well-suited to adapt to changes in the industry and demand environment due to our strong balance sheet, liquidity profile, and diversification.

Current wording

ACT is forecasting annual new trailer production levels for 2026, 2027, 2028, 2029, and 2030 of approximately 245,000, 298,000, 308,000, 290,000, and 299,000, respectively. In addition, FTR is forecasting annual new trailer production levels of 264,000 and 297,000 for 2026 and 2027, respectively. These estimates are generally consistent with historical trailer industry production levels. However, overall economic uncertainty and softening demand in the industry for certain of our products could continue to impact these estimates. This uncertainty and softening are evident in the ACT and FTR forecasts, particularly for 2025 production. However, we believe that our strategic plan and actions taken over the last several years have positioned us to remain well-suited to adapt to changes in the industry and demand environment due to our strong balance sheet, liquidity profile, and diversification.

Previous wording

Other potential risks we face for the remainder of 2024 primarily relate to our ability to effectively manage our manufacturing operations, including economic uncertainty, and our overall business. In addition, the cost of raw materials, commodities, and components are also potential risks. Significant increases in the cost of certain commodities, raw materials or components have had, and may continue to have, an adverse effect on our results of operations. As has been our practice, we will endeavor to pass raw material and component price increases to our customers in addition to continuing our cost management and hedging activities in an effort to minimize the risk that changes in material costs could have on our operating results. In addition, we rely on a limited number of suppliers for certain key components and raw materials in the manufacturing of our products, including tires, landing gear, axles, suspensions, aluminum extrusions, chassis and specialty steel coil. While we have taken actions to mitigate certain of these risks, which include our previously announced supply agreements at the current and expected demand levels, there may be additional or increased shortages of supplies of raw materials or components which would have an adverse impact on our ability to meet demand for our products. Despite these risks, we believe we are well positioned to capitalize on overall demand when it returns to normalized levels.

Current wording

Other potential risks we face for the remainder of 2025 primarily relate to our ability to effectively manage our manufacturing operations, including economic uncertainty and the uncertainty caused by recently proposed tariffs and the related disruptions to international trade, and our overall business. In addition, the cost of raw materials, commodities, and components are also potential risks. Significant increases in the cost of certain commodities, raw materials or components, including increases due to the imposition, or proposed imposition, of tariffs have had, and may continue to have, an adverse effect on our results of operations. As has been our practice, we will endeavor to pass raw material and component price increases to our customers in addition to continuing our cost management and hedging activities in an effort to minimize the risk that changes in material costs could have on our operating results. In addition, we rely on a limited number of suppliers for certain key components and raw materials in the manufacturing of our products, including tires, landing gear, axles, suspensions, aluminum extrusions, chassis and specialty steel coil. While we have taken actions to mitigate certain of these risks, which include our previously announced supply agreements at the current and expected demand levels, there may be additional or increased shortages of supplies of raw materials or components which would have an adverse impact on our ability to meet demand for our products. Despite these risks, we believe we are well positioned to capitalize on overall demand when it returns to normalized levels.