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 Reed, Vice President, Investor Relations. You may begin your conference.

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 Kesslin, 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.1wabash.com. Please refer to slide 2 on our earnings deck from the company's Safe Harbor Disclosure addressing forward-looking statements. I'll hand it off now to Brent.

Brent Scholar Thank you, Ryan. Again, 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're 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 achieve 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 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 service 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 and 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 Econnext 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 buy space by allowing customers to get pre-configured fleet equipment. 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 remain remarkably upbeat and resilient. Their optimism about the future provided an interesting contrast to the current softness in equipment demand, and that contrast serves 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 continue with initiatives from the current administration on the regulatory front the epa recently announced the review of their 2027 phase 3 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 25 and 26. While no decisions regarding the review has been announced, we'll continue to monitor the situation as removal of these regulations would be a near-term positive. 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 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 and orders our total backlog ending q1 was approximately 1.2 billion dollars 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 midpoints 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.

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 life cycle 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 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, lift gates, 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 up-fit 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 task 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're not just expanding our capabilities organically. With our acquisition of TrailerHawk, we're working to embed cargo security technology directly into our task 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 aren't just bells and whistles. They're mission-critical tools in today's supply chain where cargo theft is a significant and growing problem that needs to be addressed. We're also fortunate to have Brett Summa, Trailerhawk's founder, join us as part of the acquisition. Having spent years in numerous logistics roles, including as the founder of Lonesmith, a freight brokerage that was an early task 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. So 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. And we're just getting started. With that, I'll hand it over to Pat for his comments.

Thanks, Mike. Beginning with the review, 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 negative 7.2% during the quarter. In the first quarter, adjusted EBITDA was negative 9 million or negative 2.4% of sales. Finally, for the quarter, adjusted net income attributable to common stockholders was negative 24.8 million or negative 58 cents per diluted share moving on to our reporting segments transportation solutions generated revenue of 347 million and operating loss of negative 10 million overall demand did not fill in as expected in some of our equipment businesses that experience 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, so 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 31st. 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 $20 to $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 negative $0.85 to negative $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. Full 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 and demand flow through 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 to $460 million and EPS of minus $0.25 to minus $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 size cost structure moving on to capital deployment expectations for 2025 we continue to anticipate traditional capital investment to be between 50 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 drop, 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.

Thank you. At this time, I would like to remind everybody that in order to ask a question, please press star, follow 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 Schleske with D.A. Davidson. Your line is opened.

Good afternoon, and thanks for taking my questions here. So you're updated for your outlook. It seems to imply direct amount margins is about 75%. And 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 steel, pricing of steel, or anything else that kind of throwing off the margin profile very temporarily here other than trailer volumes?

Yeah, so we'll have to reconcile those detrimental margins with you, Mike. We don't quite have that big of a drop, but 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're going to see in our backlog right now from the end sale so i wouldn't i wouldn't say that there we expect a uh oversized reduction in our profitability certainly over the past three quarters from the first half of 2024 we've seen some some pricing pressure relative to that period but as it as it plays out for the rest of the year we should see 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?

Yeah, I think just in the quarter we reported on, one of the issues is we had aspects of our business that were still, you know, in the February, beginning of March, in an expansion mode with still receiving feedback post-tariff, call it saber-rattling in that direction from a customer standpoint. And that precipitously dropped probably by the mid-March time frame. And so there's a level of labor imbalance that was created very quickly, both vans. That's less about what we've made and much more about a substantial amount of labor was ineffective and had to be quickly right-sized with changing market dynamics.

Okay. Okay. Thanks for that, Cutler. 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?

Yeah, the day hasn'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. And that's what we've always thought could happen, and we're seeing that in real time. and we do continue to sell most of those parts into the same end market. So there's cyclicality there, but it's much less and we've got some growth to offset some of the cyclicality that exists. So it's 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. So it's not going up from what we said at the year-end call, but we're able to maintain it.

Just to follow up there on the profitability, I know there was tough cops, but it was down quite a bit over the prior year in the parking 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?

Yeah, 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 teen so we're a little below that in q1 a little bit of mixing q1 2025 that cause that to be a little lower we hope but we came up from q4 24 which we expected we expect the step margins up into the second half of 2025 so we expect to finish the year in the high teens EBITDA level for parts and services in 2025 great uh thanks for that information i'll pass it along appreciate it thanks mike thanks mike our next question comes from the line of jeff kaufman with vertical research partners your line

is open hey guys thank you um so a couple questions uh mike you mentioned you were still growing toss despite the environment where are total toss units today so they're they're uh just over a thousand Jeff, they were, I commented they were between 500 and 1,000 at the year-end call, and 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. So 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.

Yeah, I would add that the unit, Jeff is Brent, from a unit standpoint, Mike alluded to that, but 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 are either using the product, they are 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 is going to do. So 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.

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

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

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

And then, you know, for the full year, I'm assuming that you're not undercutting the ACT 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, you know, 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 on trailer deliveries based on that um how should i think about you know 62 90 in the first quarter slight step up in the second um is that the right way to think about it it is yeah so i think all of your inputs there are going to be certainly in the right Okay, good enough for me. Thank you also for giving the liquidity update, because I think with the shares trading where they are, you know, we're shifting from valuing you on earnings to valuing on liquidity. So could you kind of walk through that liquidity? I see the cash on the balance sheet, and I see the total liquidity number.

But, you know, 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 yeah so we we have the the high yield bonds uh of 400 million uh that mature in 2028 um and then on top of that we have our revolver um which uh provides additional liquidity so the 310 million that i mentioned as of the end of the first quarter uh includes that cash on the balance sheet plus the availability on on the revolver As we think about capital allocation, I'll say that, you know, 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. So 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, but then as it pertains to share repurchases, traditional CapEx investments, more investment in TAFs, 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. all righty and then just kind of a swag uh question and who knows the right answer but i'm asking you for your best guess um we had a weird first quarter right i mean weather

was a factor we didn't talk much about it but you know it did affect the manufacturing facilities and and the number of days they worked um you know the there was probably not an alignment of cost relative to volume you know there was a function of kind of how the market surprised in the quarter and you talked about how we we've got that back to where it should be as of quarter end so i i think we got this surprising operating loss relative to the units you delivered and and i think mike schlisky kind of hinted at it you know how did margins do this because we we thought margins were stronger than this if you wouldn't have the weather right so let's figure out the weather impact as best we can and you had your cost structure in the right place uh from the beginning of the quarter. What might this quarter have looked like?

So I think a good way to attack that, Jeff, is, you know, 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 30 cent loss for Q2, just given where volumes are at. And again, you know, they're not exactly the same, but I think volumes from Q1 to Q2 are going to be in a similar ballpark.

So I think that's probably a good way to think about what q1 could have looked like uh you know with maybe better information yeah one aspect i would add to that jeff is that even looking at everything that ryan said absolutely is is correct but i say in additional when you when we think about q2 and q3 specifically we are still navigating through a a period of whether the uncertainty increase or uncertainty reduction and that's a crystal ball that we're all trying to search for uh there is still some level of assumption built in even to that level of projected q2 earnings that estimates that we're still saddled with i'll just call it the disruptive nature of the uncertainty movement within the schedule just noise that um weighs on the profitability of the business we have to take that into account So even with what Ryan said, if magically executive policy changed 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. So this is, the noise is affecting us in a very nontraditional way than how you would think about the normal execution of cost and execution inside the business.

No, that's helpful. Last follow-up. So you lost 58 cents in the first quarter. The midpoint of the guidance is 60 cents for the whole year. You've guided to a midpoint of 30 cent 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 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? time?

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

Okay. And on the theory that at some point, we will have an upcycle and we will go back to buying trailers. I get that. Well, good luck.

Yeah, good luck and thank you. there are no further questions at this time i'll hand things back over to ryan reed for closing remarks thanks ian and thanks everybody for joining us today we'll look forward to following up during the quarter