Wabash National - Earnings Call - Q1 2025

Executive Summary

• Q1 2025 revenue of $380.9M and adjusted diluted EPS of $(0.58) both missed consensus; GAAP EPS was $5.36 due to a $342M legal gain from a reduced verdict. Revenue fell 26.1% year over year and gross margin compressed to 5.0% on weaker Transportation Solutions demand and labor inefficiencies.
• Management cut FY25 guidance to ~$1.8B revenue and adjusted EPS range of $(0.85)–$(0.35), citing tariff-related uncertainty that is delaying customers’ CapEx and slowing order flow; backlog ended Q1 at ~$1.2B (seq +5%, YoY −32%).
• Parts & Services grew revenue 5.5% YoY to $52.0M, with continued momentum in Trailers as a Service (TaaS) and upfit, while segment margins declined vs prior year on mix; Transportation Solutions posted an operating loss.
• Near-term catalysts: clarity on tariffs/regulation, stabilization of order activity, and execution on Parts & Services/TaaS initiatives (including TrailerHawk.ai integration and UP.Labs AI tools).

What Went Well and What Went Wrong

What Went Well

• Parts & Services delivered sequential and year-over-year revenue growth to $52.0M, supported by doubled upfit volumes and expanding TaaS fleet (>1,000 trailers deployed).
• Strategic progress in technology and services: acquisition of TrailerHawk.ai to enhance cargo security and TaaS, and UP.Labs partnership to build AI-powered configuration and parts intelligence tools.
• Backlog held at ~$1.2B (seq +5%), providing visibility despite industry uncertainty; management emphasized long-term tailwinds from potential revitalization of U.S. manufacturing.

Management quotes:

• “Non-GAAP adjusted EPS was $(0.58)…revenue came in below our expectations…We have since reduced direct labor to align cost with market conditions.” – CEO Brent Yeagy.
• “We expect sequential growth in Parts & Services through Q2, Q3 and Q4.” – Chief Growth Officer Mike Pettit.
• “We’re collaborating [with UP.Labs] to build…an AI-powered equipment configuration tool…and parts intelligence to optimize inventory levels.” – Mike Pettit.

What Went Wrong

• Transportation Solutions demand weakened materially; segment net sales fell 26.3% YoY and posted a $(9.8)M operating loss; gross margin compressed to 2.4% from 13.4%.
• Labor overexposure and poor fixed-cost absorption as anticipated quick-turn equipment demand failed to materialize late in the quarter; gross margin fell to 5.0% at the consolidated level.
• Tariff-related uncertainty led customers to delay equipment investments, driving guidance reductions for FY25 and muted near-term order flow; backlog down 32% YoY.

Transcript

Operator (participant)

Thank you for standing by. My name is Ian, and I will be your conference operator today. At this time, I would like to welcome everyone to the Wabash First Quarter 2025 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star, followed by the number one on your telephone keypad to enter the question queue. Once again, that is star, followed by the number one. If you'd like to withdraw your question, again, press star one. Thank you. I would like to hand the call over to Ryan Reid, Vice President, Investor Relations. You may begin your conference.

Ryan Reid (VP of Investor Relations)

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 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.wabash.com. Please refer to slide two in our earnings deck from the company's safe harbor disclosure addressing forward-looking statements. I'll hand it off now to Brent.

Brent Yeagy (President and CEO)

Thank you, Ryan. Let me start by level setting where we are in terms of the business environment. Compared to what we expected at the beginning of the year, there's no question that conditions have softened. We're seeing it across the board. Our customers are sharing that their own customers are delaying decision-making, which is creating a cascading effect that slows activity across our business. As a result, third-party industry forecasts for 2025 have been steadily revised downward over the past several months, and we've seen recent confirmation during this earnings cycle with many carriers reducing their CapEx estimates for the year. This isn't isolated to any one product or market. It's a broader macro-driven slowdown, and while the situation certainly presents a fresh set of challenges, in some ways, it's reinforcing the strategic importance of how we've organized Wabash over the last few years.

One of the key benefits of our work structure is that it allows us to be agile. While we're running our downturn playbook on transportation solutions to take costs out where necessary to align with near-term demand conditions, we're continuing to execute without distraction on growth opportunities within the parts and services side of the business, which achieved positive year-on-year revenue growth during the first quarter. We expect our sustained efforts to grow parts and services and strategically integrate these offerings across our equipment solutions portfolio to play a key role in helping us achieve greater balance over cyclicality as we move forward. As I mentioned, during a difficult quarter for equipment demand, we were able to grow revenue in our parts and services business. I'd like to call out a couple of highlights from the quarter.

First off, I'd like to congratulate our upfit team for their efforts to lead a doubling in year-over-year upfit volumes in Q1. Another exciting development within parts and services during the first quarter is the continued expansion of our trailers as a service initiative. Mike will give more color on these topics in a few minutes, but these are both accomplishments that give us a sense of parts and services' ability to contribute enhanced stability within our overall portfolio as we continue to scale our offerings. During the first quarter, our team appreciated the opportunity to connect with customers at a couple of important industry events: TMC and Work Truck Week. Both provided valuable opportunities to reinforce Wabash's position as a technology-forward leader. At TMC, we connected with industry professionals to show off our capabilities and innovation.

We showcased our new, more efficient dry van manufacturing capacity, which increases line rates while driving enhanced consistency in build quality. We also used the event to highlight our 40-year history of innovation and partnership. At NTEA's Work Truck Week, we showcased our AccuTherm refrigerated truck body with EcoNext technology. These units deliver 25% better thermal efficiency compared to conventional refrigerated products, which translates directly to lower fuel costs and reduced maintenance. We also promoted our ready-to-mount program, which provides our Wabash competitive advantage within the truck body space by allowing customers to get pre-configured fleet equipment faster than ever before. At the end of the day, the time we invest in building and strengthening relationships during down years like this will pay dividends as the demand environment recovers.

Even in the face of a transportation market characterized by near-term unprecedented uncertainty, we find that customers at these recent events remained remarkably upbeat and resilient. Their optimism about the future provided an interesting contrast to the current softness in equipment demand, and that contrast serves as a reminder that sentiment often leads to fundamentals. Let me pivot to tariffs now. This has been obviously a frequent market topic with everyone from suppliers to customers to investors alike, so allow me to unpack how we think about these both in the short-term and the longer-term implications. Our exposure is very limited from a manufacturing perspective. Outside of one small tank trailer facility in Mexico, our manufacturing footprint is distributed entirely throughout the United States. Additionally, about 95% of our materials are sourced domestically.

That proximity not only shields us from potential volatility and trade barriers, but also allows us to manufacture with speed and reliability. That said, we're not completely immune from secondary impacts. Tariffs on raw materials like steel and aluminum can create pricing pressure even from domestic suppliers, and more impactfully, uncertainty tends to inhibit our customers' ability to deploy capital for equipment. In our recent experience, companies aren't posturing to make speculative bets in this environment. There's an increased willingness to preserve cash until we have greater clarity. Still, we see a bright spot. It seems clear that the current administration has a goal of revitalization of the U.S. manufacturing sector. That would be a significant structural tailwind for us because manufacturing carries an outsized impact on freight activity.

More domestic production means a multiplier on freight moves, more trailers, and more demand for exactly the kinds of solutions Wabash offers. Because we've been consistent in calling out the long-term benefits of nearshoring on our business, it's important to draw a comparison between nearshoring and revitalization of American manufacturing that has recently become a part of the discussion. On the surface, they may appear to be similar concepts, but the implications differ in meaningful ways. Nearshoring suggests a growing role for Mexico in a broader North American manufacturing strategy. What we're hearing from the current administration, however, indicates a major emphasis on rebuilding domestic U.S. manufacturing capacity. That distinction matters. A U.S.-focused manufacturing resurgence changes logistics patterns, supply chain dynamics, and freight flows in a way that more directly impacts our customers and ultimately demand for trailers and equipment solutions.

Now, continuing with initiatives from the current administration, on the regulatory front, the EPA recently announced the review of their 2027 phase III emission standards for heavy trucks. This initiative is part of a broader reassessment of regulations generally viewed as burdensome. While these changes targeted a reduction in CO2 emissions, they did so at the expense of a significant increase in truck cost, which has led to a short-term prioritization of truck refreshment relative to trailers. I believe it's a consensus view that assuming the implementation of these standards, some diversion of CapEx is set to act as a headwind for trailer demand in 2025 and 2026. While no decisions regarding the review have been announced, we'll continue to monitor the situation as removal of these regulations would be a near-term positive for trailer demand.

I also want to briefly touch on the ongoing legal matter stemming from the 2019 motor vehicle accident. As many of you know, a jury in St. Louis originally returned a verdict of $462 million in damages against Wabash, but in March, the trial court amended the judgment down to $119.5 million. We stand firmly behind the safety and integrity of our products and remain confident in our ultimate legal position as such. We filed notice of appeal and obtained the necessary appeal bond in April as we continue to pursue all available legal options to achieve a more reasonable outcome. Turning back to market conditions and our outlook in terms of demand, we've seen a notable shift in customer behavior recently that coincides with the step-up in uncertainty created by tariffs.

Although there's a lot of noise in the environment right now, I think it's fair to say that the signal is clear. The trailer industry has already experienced eight consecutive quarters of contraction in orders. Our total backlog ending Q1 was approximately $1.2 billion, and while this showed a slight sequential step-up like most data through March, we believe there is a level of retrenchment happening now given the uncertainty being generated by tariffs. Forecasts for trailer volumes this year indicate shipments will undercut basic replacement demand, resulting in the aging of fleets across the industry. The last time we saw this dynamic play out was in 2020 when pent-up demand built and was later unleashed as the freight market recovered. There are similarities between the two time periods where an external shock causes CapEx retrenchment that results in a building of pent-up demand.

For now, we've undertaken a reassessment of 2025 and now expect the midpoint of $1.8 billion in revenue and negative $0.60 of adjusted EPS. I'll now turn the call over to Mike for additional comments.

Mike Pettit (Chief Growth Officer)

Thanks, Brent. I'd like to take a moment to expand on how we're continuing to move Wabash toward being a more durable, resilient, and higher-margin business. Central to that work is our strategic initiative to grow our parts and services revenue, generating greater recurring revenue to reduce the company's exposure to cyclicality. Our parts and services offerings sit at the intersection of seamlessly serving our customers, our first-to-final-mile portfolio, and connected services that deliver lifecycle solutions. During the quarter, we were able to demonstrate tangible progress in all these areas through organic and strategic growth coupled with some nice technological accelerators. I'd like to personally thank Dave Hill and his parts and services team for their Q1 sequential and year-over-year growth in the face of a very challenging industry and macroeconomic backdrop. One area where we've seen outside growth is in our upfit value stream.

In the first quarter, we doubled the volume of units moving through this business, which includes shelving systems, liftgates, partitions, roof racks, thermal solutions, and most recently, ready-to-mount truck bodies. These offerings allow customers to tailor their equipment to their specific operational needs, and our growing competency in this space is allowing customers to increasingly see Wabash not just as an equipment provider, but as a solutions partner. As demand for upfit solutions grows, Wabash is building a national network that delivers faster turnaround times and brings deep industry expertise to customers. With the support of our national dealer network, our momentum is being driven by an expanding footprint of parts and services locations underscored by a new Chicagoland upfit location opening in Q2 of this year and an Atlanta location opening in the second half of 2025.

We recognize that potential for meaningful value creation sits at the intersection of where we can wrap services around our industry-leading equipment portfolio, as we demonstrated in Q1 upfit services is a good example of this. In leveraging our integration skills to coordinate between our equipment, multiple suppliers, and value-added components and the end customer, our upfit service is a microcosm of our broader parts and services goals. Turning now to trailers as a service, we're excited to have added customers to our offering in Q1. Shippers, carriers, and brokers are seeing the value of using our TAS solution to access capacity on demand across the U.S. They're not just gaining trailer units, but a comprehensive bundle that includes maintenance, repair, telematics, and national uptime support. It's both a capital-light and capital-efficient way for them to expand their network while maintaining flexibility.

We have over 1,000 trailers deployed into our fleet and are increasing our operational capabilities by the day. We are not just expanding our capabilities organically. With our acquisition of TrailerHawk, we are working to embed cargo security technology directly into our TAS platform and ultimately across our product portfolio. This allows customers to monitor freight conditions in real time, manage trailer access digitally, and validate the entire custody chain from origin to delivery. These are not just bells and whistles. They are mission-critical tools in today's supply chain where cargo theft is a significant and growing problem that needs to be addressed. We are also fortunate to have Brett Suma, TrailerHawk's founder, join us as part of the acquisition.

Having spent years in numerous logistics roles, including as the founder of Load Smith, a freight brokerage that was an early TAS customer, his experience, as well as that of his team and insight, will be instrumental as we scale this offering. We're also advancing our capabilities through a partnership with Uplabs, a pioneering corporate venture studio. We're collaborating to build two high-impact startups that will simultaneously create value within Wabash's operations. The first is an AI-powered equipment configuration tool that simplifies how customers choose equipment specifications and powerfully enables Wabash to execute faster and more efficiently. Instead of a slow manual process, users will be able to generate real-time proposals that clearly lay out trade-offs in cost, time, and performance.

Wabash keeps the customer at the center of how we structure our organization, and we expect this tool to enhance our customers' experience and continue to elevate Wabash's ease of doing business. The second venture is focused on parts intelligence. This tool uses predictive analytics to optimize inventory levels through the channel, ensuring the right part is in the right place at the right time. It helps reduce downtime, improve customer satisfaction, and eliminate excess capital tied up in parts stock. This enables breakthrough ability to meet customer demand across our aftermarket, our supply chain, and our distribution operations. Together, these two initiatives represent a big step forward in how we serve our customers and enable our dealers and service partner network. 2025 is a year we will show the full breadth of capabilities and growth potential within parts and services.

Whether it's through internal initiatives, partnerships, or acquisitions, our focus is clear. We're building parts and services capabilities that deliver for our customers regardless of what's happening in the broader economy. Surrounding our industry-leading equipment with a growing set of capabilities and offerings is a model that brings value, scale, and enhances the power of our portfolio. We're just getting started. With that, I'll hand it over to Pat for his comments.

Pat Keslin (CFO)

Thanks, Mike. Beginning with the review of our quarterly financial results, in the first quarter, our consolidated revenue was $381 million. During the quarter, we shipped approximately 6,290 new trailers and 3,000 truck bodies. First-quarter shipments were below our prior expectations and resulted in a revenue shortfall of about $55 million, while the weaker-than-anticipated volumes resulted in less fixed cost absorption, leading to lower-than-expected gross margins of 5% and adjusted operating margins of -7.2% during the quarter. In the first quarter, adjusted EBITDA was $-9 million or -2.4% of sales. Finally, for the quarter, adjusted net income attributable to common stockholders was $-24.8 million or $-0.58 per diluted share. Moving on to our reporting segments, transportation solutions generated revenue of $347 million and operating loss of $-10 million.

Overall, demand did not fill in as expected in some of our equipment businesses that experienced quick turnarounds from order to shipment, leaving us overexposed to labor costs in those areas during the quarter. We have taken action to right-size direct labor and production support costs going forward. Parts and services generated revenue of $52 million and operating income of $6.9 million. While parts and services is certainly less cyclical, it's also not immune from freight market conditions. We view the year-over-year revenue growth in this segment as a particularly positive sign. Year-to-date operating cash flow was flat, with sequential working capital trends in Q1 being incrementally helpful to operating cash, driven primarily by widening out of accounts payable during the quarter. Additionally, the increase in inventory experienced during the first quarter was due to a gap between equipment production and shipments during the quarter.

Regarding our balance sheet, our liquidity, which comprises both cash and available borrowings, was $310 million as of March 31. We finished Q1 with a net debt leverage ratio of 3.2 times. On capital allocation during the first quarter, we directed $9 million to traditional CapEx, invested $20.1 million in revenue-generating assets to support our trailers-as-a-service initiative, utilized $13.7 million to repurchase shares, and returned $3.9 million to shareholders via our quarterly dividend. Our capital allocation priorities continue to focus on capital expenditure above and beyond our annual maintenance CapEx spend of $20million-$25 million in order to support our organic growth initiatives. We are committed to maintaining our dividend, and we will continue to evaluate opportunities for share repurchase alongside of bolt-on M&A. I'll provide a bit more on our capital allocation outlook more specific to 2025 in a few minutes.

Moving on to our guidance for 2025, we are reducing our revenue outlook to approximately $1.8 billion and EPS to a range of $-0.85 - $-0.35. From previous midpoints, this represents a reduction of roughly $200 million in revenue and $1.55 of EPS. As Brent mentioned, the level of tariff-related uncertainty in the business environment has been a constraint on our customers' capital expenditure plans in the short term, and we're updating our guidance to fully read through the impact of this heightened uncertainty on our financial outlook. More plainly, we have not seen the level of order flow we had previously anticipated, and given prevailing uncertainty combined with the importance of seasonal timing to annual order flows, we believe it's prudent to adjust our outlook accordingly.

The most significant changes from our prior outlook come from a reduction in volumes within transportation solutions flowing through to a decrease in gross profit equivalent to $1.70 in EPS versus our prior guidance. This is partially offset by cost containment actions taken within SG&A that recoup approximately $0.15 of EPS. As I mentioned, the weakness in demand flow during the first quarter resulted in a higher cost structure, an issue that has been addressed. We believe that the organization is now better situated to manage through the remainder of 2025, and we do not anticipate the weakness seen in first-quarter financial performance to reoccur without significant macro degradation. Our updated guidance implies second-quarter revenue of $420 million-$460 million and EPS of $-0.25 - $-0.35.

This guidance implies modestly positive EPS during the second half of the year as we anticipate volumes to stabilize at lower levels paired with a right-sized cost structure. Moving on to capital deployment expectations for 2025, we continue to anticipate traditional capital investment to be between $50 million and $60 million. That said, given the heightened uncertainty in 2025, our capital expenditure plans are flexible. While it would not be our preference, we do have room to bring down capital outlays if the outlook dictates. The same goes for the rest of our capital allocation priorities. I would say that generally we do have quite a bit of flexibility with regard to how we allocate capital in 2025, depending on how market conditions evolve.

While 2025 is shaping up to be a more difficult year than anyone assumed during our last earnings call, we've been through cycle troughs before, and we're taking the necessary actions to reduce costs, and we structure our liquidity position to be able to withstand these experiences. We've also seen what follows cycle trough, which is typically an upcycle that exceeds expectations, and we will be ready to capitalize on this once tariff uncertainty eventually clears way for freight markets to improve and, more importantly, businesses to regain the necessary level of clarity to increase capital investments. I'll now turn the call back to the operator, and we'll open it up for questions.

Operator (participant)

Thank you. At this time, I would like to remind everybody that in order to ask a question, please press star, followed by the number one on your telephone keypad to enter the question queue. Once again, that is Star, followed by the number one. Our first question comes from the line of Mike Schlisky with D.A. Davidson. Your line is opened.

Michael Shlisky (Managing Director and Senior Research Analyst)

Good afternoon, and thanks for taking my questions here.

Operator (participant)

Hey, Mike.

Michael Shlisky (Managing Director and Senior Research Analyst)

Your updated four-year outlook seems to imply direct demand margins of about 75%. I mean, when I look back to previous downturns prior to the pandemic, things were kind of similar back then. I mean, there's now an EPS loss coming up here in 2025. I thought you had made quite a few strides since those last down cycles to avoid such a big decline in the EPS. I'm kind of just curious, have you had any problems or issues with purchasing skill, pricing of skill, or anything else that's kind of throwing off the margin profile very temporarily here other than trailer volumes?

Pat Keslin (CFO)

Yeah. We'll have to reconcile those decremental margins with you, Mike. We do not quite have that big of a drop. As it pertains to your specific question, all of the pricing pressure around commodities is built into our full-year guide, as well as the price that we are going to see in our backlog right now from the end sale. I would not say that we expect an oversized reduction in our profitability. Certainly, over the past three quarters from the first half of 2024, we have seen some pricing pressure relative to that period. As it plays out for the rest of the year, we should see Q2 through Q4 being in a similar position to what we saw in the first quarter in terms of price and profitability.

Brent Yeagy (President and CEO)

Yeah. I think just in the quarter we reported on, one of the issues is we had aspects of our business that were still in the February, beginning of March in an expansion mode with still receiving feedback post-tariff, call it saber rattling, that we're still moving forward in that direction from a customer standpoint. That precipitously dropped over the last three to four weeks, really probably by the mid-March timeframe was starting to come out. There is a level of labor imbalance that was created very quickly, both in truck bodies and vans, that had a hangover through the balance of the quarter. That is less about what structural changes we've made and much more about a short period of time where a substantial amount of labor was ineffective and had to be quickly right-sized with changing market dynamics.

Michael Shlisky (Managing Director and Senior Research Analyst)

Okay. Okay. Thanks for that, Collar. I also want to just ask about parts and parts and service as well. Concerns about new volumes coming in, I can understand that. Does that imply that maybe the outlook for parts and service actually may have improved for the rest of the year, given if people are being asked to maintain their old trailer fleets a little bit longer, or have things kind of stabilized from where you thought they were last quarter?

Mike Pettit (Chief Growth Officer)

Yeah. They haven't gone up, Mike, but what we are really excited about is the fact that we're able to maintain what that implied level of growth was in parts and services, even though we've seen some weakness in the OE side of the business. That is what we've always thought could happen, and we're seeing that in real time. We do continue to sell most of those parts into the same end market. There is cyclicality there, but it's much less, and we've got some growth to offset some of the cyclicality that exists. It is a really good story, we think, that we can grow the business and continue to grow it. We expect to see sequential growth into Q2, Q3, and Q4. It is not going up from what we said at the year-end call, but we're able to maintain it.

Michael Shlisky (Managing Director and Senior Research Analyst)

Just to follow up there on the profitability, I know there were tough comps, but it was down quite a bit over the prior year in the parts and service segment from an operating margin standpoint. Can you maybe share what might have been going on there? I mean, you had higher sales. What would be the reason for a decline in the profitability?

Mike Pettit (Chief Growth Officer)

Yeah. Now, you hit on it. We had a really strong Q1 2024. We did expect to see a year-over-year step down. I've said pretty consistently, we think this business will be a high teens EBITDA business across the full year. We expect still to be that high teens. We're a little below that in Q1. There's a little bit of mix in Q1 2025 that caused that to be a little lower than we hoped. We came up from Q4 2024, which we expected. We expect to step margins up into the second half of 2025. We expect to finish the year in that high teens EBITDA level for parts and services in 2025.

Michael Shlisky (Managing Director and Senior Research Analyst)

Great. Thanks for that information. I'll pass it along. Appreciate it.

Brent Yeagy (President and CEO)

Thanks, Mike.

Jeffrey Kauffman (Senior Research Analyst)

Thanks, Mike.

Operator (participant)

Our next question comes from the line of Jeff Kauffman with Vertical Research Partners. Your line is opened.

Jeffrey Kauffman (Senior Research Analyst)

Hey, guys. Thank you. A couple of questions. Mike, you mentioned you were still growing costs despite the environment. Where are total cost units today?

Mike Pettit (Chief Growth Officer)

They're just over 1,000, Jeff. I commented they were between 500 and 1,000 at the year-end call. Now they're just over 1,000. We're actually seeing some demand for that product even beyond some of the weakness you see on the, call it the asset sale trailer. We think we can grow that business throughout this year. We're trying to really evaluate the market. We don't know exactly how that's going to perform through the rest of the year, but we do think we can see growth in TAS through 2025.

Brent Yeagy (President and CEO)

Yeah. I would add that the unit, Jeff, as Brent, from a unit standpoint, Mike alluded to that. I think the other piece to it is that if you were to look back six months ago, we had a handful of prospective customers that were working through the process of getting business agreements in place, comfortable starting to experience the service. When you sit here today, we have between 20 and 25 customers that are engaged in understanding how they will use the product. They're either using the product, they're sampling the product, they are putting the business contracts in place, receiving pricing so that they are poised and ready to use it in a scaled manner as the market decides whatever the market's going to do.

When we think about the positioning of this from a growth standpoint, all the right things are happening to put it in the right position.

Mike Pettit (Chief Growth Officer)

Yeah. The capability set is increasing as well. As customers become more interested, we're developing the capabilities necessary to support.

Jeffrey Kauffman (Senior Research Analyst)

That is helpful. Thank you. Also, it kind of looks like the earnings forecast is kind of flat from this point to the rest of the year, give or take. I know you talked about costs in the first quarter and how you flushed out some of those excess costs, and there's going to be more G&A to match the environment. I guess I was wondering, you gave a revenue outlook of about $420 million-$460 million for the second quarter, about $1.8 billion on the year. What kind of deliveries, whether they be trailer deliveries or final mile deliveries, are kind of underlying those revenue forecasts?

Brent Yeagy (President and CEO)

Yeah, Jeff, we've got a slight step up in trailer shipments in Q2. We've got, again, a slight step up in truck body shipments. Really not looking for anything heroic in Q2.

Jeffrey Kauffman (Senior Research Analyst)

For the full year, I'm assuming that you're not undercutting the ACC Research forecast at this point, which has come down, I think, to about 205 on the year, give or take. If I look at the market share that you had in the first quarter, and who knows if that's the right way to think about it, about 13.3% in the first quarter. Are we thinking kind of use that as a guide to similar percentage for the year so we can kind of, I'm in the 28,000 range on trailer deliveries based on that. How should I think about 6,290 in the first quarter, slight step up in the second? Is that the right way to think about it?

Brent Yeagy (President and CEO)

It is. Yeah. I think all of your inputs there are going to be certainly in the right ballpark, Jeff.

Jeffrey Kauffman (Senior Research Analyst)

Okay. Good enough for me. Thank you also for giving the liquidity update because I think with the shares trading where they are, we're shifting from valuing you on earnings to valuing on liquidity. Could you kind of walk through that liquidity? I see the cash on the balance sheet, and I see the total liquidity number. If this environment's a little worse than expected, I know there's levers you can pull, but how should we think about access to liquidity if needed?

Pat Keslin (CFO)

Yeah. We have the high-yield bonds of $400 million that mature in 2028. On top of that, we have our revolver, which provides additional liquidity. The $310 million that I mentioned as of the end of the first quarter includes that cash on the balance sheet plus the availability on the revolver. As we think about capital allocation, I'll say that we're going to weigh our options, and a lot of our investment decisions will depend on the way that the markets evolve over time. We right now have a plan to that capital number that I mentioned of $50 million. We also pay the dividend just like we always do. We will continue to do that.

As it pertains to share repurchases, traditional CapEx investments, more investment in TAS, all of those items we will evaluate on an as-needed basis, certainly to what our liquidity position looks like and what we expect the future markets to look like.

Jeffrey Kauffman (Senior Research Analyst)

All righty. Just kind of a swag question, and who knows the right answer, but I'm asking you for your best guess. We had a weird first quarter, right? I mean, weather was a factor. We did not talk much about it, but it did affect the manufacturing facilities and the number of days they worked. There was probably not an alignment of costs relative to volume. There was a function of kind of how the market surprised in the quarter, and you talked about how we have got that back to where it should be as of quarter end. I think we got this surprising operating loss relative to the units you delivered. I think Mike Schliske kind of hinted at it. How did margins do this? Because we thought margins were stronger than this. If you would not have had the weather, right?

Let's figure out the weather impact as best we can. You had your cost structure in the right place from the beginning of the quarter. What might this quarter have looked like?

Brent Yeagy (President and CEO)

I think a good way to attack that, Jeff, is we feel like in Q2 here, we do have the cost stack in better condition, and we're guiding to a quarter that looks roughly like a $0.30 loss for Q2, just given where volumes are at. Again, they're not exactly the same, but I think volumes from Q1 to Q2 are going to be in a similar ballpark. I think that's probably a good way to think about what Q1 could have looked like with maybe better information.

Mike Pettit (Chief Growth Officer)

Yeah. One aspect I would add to that, Jeff, is that even looking at everything that Ryan said absolutely is correct. I would say in addition, when we think about Q2 and Q3 specifically, we are still navigating through a period of whether it be uncertainty increase or uncertainty reduction. That is a crystal ball that we are all trying to search for. There is still some level of assumption built in even to that level of projected Q2 earnings that estimates that we are still saddled with, I will just call it, the disruptive nature of the uncertainty movement within the schedule, just noise that weighs on the profitability of the business. We have to take that into account.

Even with what Ryan said, if magically executive policy change and some level of stability was obtained, that would be positive relative to how we would operate in Q2 and Q3, which would dramatically both improve the cost and absolutely in Q3 improve the volume that we're seeing right now. The noise is affecting us in a very non-traditional way than how you would think about the normal execution of cost and execution inside the business.

Jeffrey Kauffman (Senior Research Analyst)

No, that's helpful. Last follow-up. You lost $0.58 in the first quarter. The midpoint of the guidance is $0.60 for the whole year. You've guided to a midpoint of $0.30 loss for the second quarter. The implication there is the net of 3Q and 4Q are going to be positive $0.30, however that plays out. Is that based on the idea that at some point we get clarity in the next couple of months and that clarity drives better industry volume in the second half of the year? Kind of what's driving that expectation that we're going to make $0.30 in the second half of 2025?

Brent Yeagy (President and CEO)

It is, I would say it is an assumption that uncertainty does not go up and therefore does not worsen. It is not necessarily assuming that we get a near-term meaningful improvement in demand and operating conditions. That is how I would frame it right now because we cannot necessarily know how to predict that. We are assuming there is a level of noise that perpetuates the year at this point. It is based on what we know, not what we need it to be.

Jeffrey Kauffman (Senior Research Analyst)

Okay. On the theory that at some point we will have an upcycle and we will go back to buying trailers. I get that. Good luck.

Brent Yeagy (President and CEO)

Yep. Tell me that.

Jeffrey Kauffman (Senior Research Analyst)

Yeah. Good luck and thank you.

Brent Yeagy (President and CEO)

Thanks, Jeff.

Jeffrey Kauffman (Senior Research Analyst)

Great. Thank you.

Brent Yeagy (President and CEO)

Thank you.

Operator (participant)

There are no further questions at this time. I'll hand things back over to Ryan Reed for closing remarks.

Brent Yeagy (President and CEO)

Thanks, Ian. Thanks, everybody, for joining us today. We'll look forward to following up during the quarter.

Operator (participant)

This concludes today's conference call. You may now disconnect. Have a good day.