Financial Data and Key Metrics Changes - Consolidated revenue for Q3 was $382 million, below the guidance range of $390 to $430 million due to challenging market conditions [25][31] - Gross margin was 4.1% and adjusted operating margin was negative 6.2%, both below expectations [25] - Adjusted EBITDA was negative $5 million, or negative 1.4% of sales, with adjusted net income attributable to common stockholders at negative $21.2 million, or negative $0.51 per diluted share [25][26] - Full-year 2025 revenue guidance was lowered to approximately $1.5 billion, with EPS expected between negative $1.95 and negative $2.05 [31][32] Business Line Data and Key Metrics Changes - Transportation Solutions generated $334 million in revenue with negative $13 million in operating income [26] - Parts and Services delivered $61 million in revenue and $6.6 million in operating income, marking the third consecutive quarter of revenue growth [26][24] - Parts and Services segment grew 16% year-over-year and about 2% sequentially, demonstrating resilience in a down market [16][24] Market Data and Key Metrics Changes - Demand across the transportation industry remained below expectations, with order intake and backlog coming in below expectations [3][4] - Backlog declined to about $800 million at the end of Q3 [10] - The truck body business faced significant challenges, with larger fleets pulling back due to ongoing housing market stagnation and reduced consumer confidence [4][10] Company Strategy and Development Direction - The company is focused on maintaining cost discipline, pursuing share gains, and strengthening service and distribution capabilities [5][6] - Continued expansion of Parts and Services is seen as a key strategy to emerge stronger when demand normalizes [6][24] - The company is preparing for a potential recovery in 2026, driven by replacement needs and improving freight conditions [11][12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that market conditions are expected to remain soft in the near term, particularly through Q4 [4][10] - There is cautious optimism for a gradual recovery in 2026, supported by tightening capacity in the market [11][12] - The company remains committed to maintaining rigorous safety, quality, and compliance standards while managing risks [9] Other Important Information - A settlement related to a 2019 legal matter resulted in a net adjustment of approximately $81 million in Q3, with the company's payment obligation being around $30 million [8][9] - Total liquidity, including cash and available borrowings, stood at $356 million as of September 30 [27] Q&A Session Summary Question: Can you discuss the impact of Section 232 tariffs on your business? - Management explained that the Section 232 tariffs are intended to level the playing field for domestic OEMs, with a minimal direct impact of about $1 million from vendor price increases due to tariffs in Q3 [40][50] Question: What is the expected shipment count for Q4 based on your revenue guidance? - Management indicated that truck body shipments are expected to be significantly lower in Q4, estimating around 2,000 units compared to approximately 3,000 in Q3 [52][56] Question: Are you seeing any growth in the platform trailer market? - Management noted that there are tailwinds in the platform trailer segment, with customer sentiment indicating a potential uptick in freight demand [68][70] Question: How is the pricing environment shaping up as you look into 2026? - Management stated that while there are opportunities for positive pricing influence in certain niches, overall ASPs are lower compared to 18 months ago, aligning with market expectations for 2026 [77] Question: What is the current state of the national trailer fleet and capacity? - Management anticipates a meaningful level of capacity will exit the market over the next six months, which could positively influence freight pricing dynamics [78][80]

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $21.6 million for Q2 2025, which was over 70% greater than street expectations, primarily driven by a 31% increase in higher margin parts and services revenue [5][8] - Company-wide revenues, including Diamond Power, were $170.8 million, slightly ahead of street expectations, while revenues from continuing operations without Diamond Power were $144.1 million, roughly the same as Q2 2024 [7][13] - Adjusted EBITDA from continuing operations was $15.1 million in Q2 2025, a 90% increase compared to $8 million in Q2 2024 [8][16] Business Line Data and Key Metrics Changes - The parts and services business saw a 31% increase in revenues compared to 2024, driven by rising demand for power and electricity from AI-driven data centers and increased base load generation usage [4][14] - Global parts and service revenue increased by $15.4 million compared to 2024, reflecting the growing need for electricity from fossil fuels [14][16] Market Data and Key Metrics Changes - The company anticipates an increase in base load generation by up to 120 gigawatts over the next ten years, primarily driven by data centers [4][25] - The backlog at the end of Q2 was $418.1 million, a 49% increase compared to the same period in 2024, indicating strong demand for services [11] Company Strategy and Development Direction - The company is focusing on exiting certain large new build projects internationally while expanding its parts and services presence globally [6] - The strategic vision includes exploring the sale of non-strategic assets and refinancing options to reduce debt obligations [10][17] - The company is actively pursuing large upgrades and new builds in the U.S. to support power generation needs, with key announcements expected by the end of the year [6][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to positive cash flows in 2025, driven by asset sales, debt reduction, and improved cash flows [9][17] - The company is well-positioned to capitalize on the growing demand for baseload generation while supporting energy security and transition [19] Other Important Information - The sale of Diamond Power International for gross proceeds of $177 million significantly improved the company's balance sheet and net leverage ratios [9][10] - The company has entered into a private bond exchange to reduce annual interest expenses and extend debt maturity [10] Q&A Session Summary Question: Current demand for energy on the thermal side of the business - Management noted an expected increase in baseload generation demand in North America, with potential new coal-fired generation projects being explored [24][25] Question: Thoughts on the second half of the year - Management anticipates a strong year due to the higher margin parts and services aspect, with guidance to be provided before the end of the year [29] Question: Confidence in returning to positive free cash flow in 2025 - Management expressed confidence that the second half of the year will generate positive cash flow, supported by asset sales and growing parts and services revenue [30][31] Question: Dynamic of extending the life of plants on parts and service business - Extending the life of plants creates opportunities for increased parts and services revenue as plants require ongoing maintenance and efficiency improvements [37][38] Question: Bright Loop pipeline and potential projects - Management indicated that there are well over 10 projects in the BrightLoop pipeline, focusing on producing steam and hydrogen while offering CO2 capture options [40][42]