Financial Data and Key Metrics Changes - In Q1 2025, consolidated revenue was $381 million, with a shortfall of approximately $55 million due to lower than expected shipments of trailers and truck bodies [30] - Adjusted net income attributable to common stockholders was negative $24.8 million, or negative $0.58 per diluted share [31] - Adjusted EBITDA was negative $9 million, representing negative 2.4% of sales [30] Business Line Data and Key Metrics Changes - Transportation Solutions generated revenue of $347 million with an operating loss of negative $10 million, impacted by lower demand and labor cost exposure [31] - Parts and Services generated revenue of $52 million with operating income of $6.9 million, showing year-over-year revenue growth despite market conditions [31][32] Market Data and Key Metrics Changes - The total backlog at the end of Q1 was approximately $1.2 billion, indicating a slight sequential increase [18] - The trailer industry has experienced eight consecutive quarters of contraction in orders, leading to an aging of fleets across the industry [18] Company Strategy and Development Direction - The company is focusing on growing its parts and services revenue to create a more durable and resilient business model, reducing exposure to cyclicality [20][28] - The strategic initiative includes expanding the Trailers as a Service (TaaS) offering, which has over 1,000 trailers deployed [23][29] Management's Comments on Operating Environment and Future Outlook - Management noted a broader macro-driven slowdown affecting customer decision-making and capital expenditure plans, leading to a downward revision of industry forecasts for 2025 [5][6] - The updated guidance for 2025 revenue is approximately $1.8 billion, reflecting a reduction of about $200 million from previous estimates [33] Other Important Information - The company is navigating ongoing legal matters related to a 2019 motor vehicle accident, with a reduced judgment amount of $119.5 million [17] - The company has a liquidity position of $310 million as of March 31, 2025, including cash and available borrowings [32] Q&A Session Summary Question: Concerns about decremental margins and EPS loss - Management clarified that pricing pressure around commodities is accounted for in the full-year guidance, and they do not expect an oversized reduction in profitability [39][40] Question: Outlook for parts and services - Management expressed optimism about maintaining growth in parts and services despite weakness in original equipment sales, expecting sequential growth throughout the year [44] Question: Total TaaS units and growth expectations - The company reported over 1,000 TaaS units deployed and anticipates growth in this segment throughout 2025 [53][55] Question: Liquidity and capital allocation - Management discussed their liquidity strategy, emphasizing flexibility in capital allocation based on market conditions [62] Question: Impact of weather on Q1 performance - Management acknowledged that weather affected manufacturing and cost alignment, but they expect improved conditions in Q2 [64][66]

Financial Data and Key Metrics Changes - In Q1, consolidated revenue was $381 million, with a revenue shortfall of approximately $55 million due to lower than expected shipments [30][31] - Adjusted net income attributable to common stockholders was negative $24.8 million, or negative $0.58 per diluted share [31] - Adjusted EBITDA was negative $9 million, or negative 2.4% of sales [30] Business Line Data and Key Metrics Changes - Transportation Solutions generated revenue of $347 million with an operating loss of negative $10 million, indicating a decline in demand for equipment [31] - Parts and Services generated revenue of $52 million and operating income of $6.9 million, showing year-over-year revenue growth despite market conditions [31][32] Market Data and Key Metrics Changes - The total backlog at the end of Q1 was approximately $1.2 billion, showing a slight sequential increase [17] - The trailer industry has experienced eight consecutive quarters of contraction in orders, leading to aging fleets across the industry [18] Company Strategy and Development Direction - The company is focusing on growing parts and services revenue to reduce exposure to cyclicality, with a strategic initiative to integrate these offerings across its equipment solutions portfolio [20][28] - The company is expanding its Trailers as a Service initiative, which includes maintenance, repair, and telematics, to provide a comprehensive solution for customers [23][24] Management's Comments on Operating Environment and Future Outlook - Management noted a broader macro-driven slowdown affecting customer decision-making and capital expenditure plans, leading to a cautious outlook for 2025 [4][5] - The updated guidance for 2025 revenue is approximately $1.8 billion, reflecting a reduction of about $200 million from previous estimates [33][34] Other Important Information - The company is navigating ongoing legal matters related to a 2019 motor vehicle accident, with a jury initially awarding $462 million in damages, later amended to $119.5 million [16] - The company has a liquidity position of $310 million as of March 31, with a net debt leverage ratio of 3.2 times [32] Q&A Session Summary Question: Concerns about decremental margins and EPS loss - Management clarified that pricing pressure around commodities is accounted for in the full-year guidance, and they do not expect an oversized reduction in profitability [41][42] Question: Outlook for parts and services - Management expressed optimism about maintaining growth in parts and services despite weakness in original equipment sales, expecting sequential growth into Q2, Q3, and Q4 [45][46] Question: Total TOS units and growth potential - Management reported over 1,000 trailers deployed in the Trailers as a Service initiative, with expectations for continued growth throughout the year [55][56] Question: Liquidity and capital allocation - Management discussed their liquidity strategy, emphasizing flexibility in capital allocation based on market conditions, including traditional CapEx and share repurchases [63][64] Question: Impact of weather on Q1 performance - Management acknowledged that weather affected manufacturing and cost alignment, but they expect improved conditions in Q2 [66][67]

Core Insights - Large organizations in Europe and the US are prioritizing reindustrialization investments to address supply chain pressures, rising tariffs, and trade disputes, focusing on long-term strategies over short-term profitability [2][4][5] Reindustrialization Strategies - Approximately 60% of executives are committed to reindustrialization efforts despite increased costs, with 65% reducing reliance on Chinese products and planning to invest in 'friendshoring' over the next three years [2][10] - Two-thirds of organizations have an active or in-progress reindustrialization strategy, an increase from 59% in 2024 [3] Drivers of Reindustrialization - Supply chain resilience (95%) and proximity to customers (92%) are the top drivers for reindustrialization, with rising tariffs being a significant concern for 93% of executives [5][6] - More than half of executives in key sectors view tariffs as a catalyst for reshoring and reindustrialization efforts [6] Investment Trends - Cumulative investments in reindustrialization are projected to reach $4.7 trillion over the next three years, up from $3.4 trillion in 2024 [8] - Over half of organizations have invested in nearshoring or reshoring, with 35% planning to increase nearshoring investments in 2025 [8][9] Manufacturing Capacity Changes - Onshore and nearshore operations are expected to account for 48% and 24% of total manufacturing capacity, respectively, in the next three years [9] - 'Friendshoring' is anticipated to account for 41% of total manufacturing capacity, increasing from 37% in 2024 [10] Technological Advancements - 62% of organizations are focusing on upgrading manufacturing facilities with advanced technologies, with over half achieving more than 20% cost savings through digital technologies [11] - Critical technologies such as data analytics and AI/Machine Learning are being prioritized to support reindustrialization efforts [12] Sustainability Focus - 73% of organizations believe reindustrialization will promote sustainable and eco-friendly manufacturing practices, a significant increase from 56% in 2024 [13]