ITEM 7—MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) describes the matters that we consider to be important to understanding the results of our operations for the years ending December 31, 2025 and December 31, 2024. In addition, we address our capital resources and liquidity as of December 31, 2025. Our discussion begins with our assessment of the condition of the North American trailer industry along with a summary of the actions we have taken to strengthen the Company. We then analyze the results of our operations for the last two years, including trends in the overall business and our operating segments, followed by a discussion of our cash flows and liquidity, capital market events, debt obligations, and contractual commitments. We conclude with a review of critical accounting judgments and estimates and information on recent accounting pronouncements that we adopted during the year, if any, as well as those not yet adopted that may have a material impact on our financial accounting practices, if any.
For a discussion of results of operations for the year ended December 31, 2024 compared to the results of operations for the year ended December 31, 2023, see Part II, Item 7,—”Management's Discussion and Analysis of Financial Condition and Results of Operations” of our 2024 Annual Report on Form 10-K, filed with the SEC on February 18, 2025.
Executive Summary
In 2025, the company continued to build on our strategic accomplishments of 2024 by demonstrating improved resilience during an industry down-cycle and maintaining a forward posture by continuing to invest in strategic growth in a manner that's unprecedented relative to market conditions. Operating profit in 2025 totaled $307.5 million and the operating margin was 19.9%. The Company’s operating profit includes a $418.6 million non-cash charge for punitive damages stemming from the Product Liability Matter as further described in Note 15 in the Notes to Consolidated Financial Statements. Additional discussion related to financial results are included in the “Results of Operations” section below.
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Throughout 2025, we have continued to create more points of connection with our customers with greater focus on Parts & Services as well as innovative offerings like Trailers as a Service (TaaS)SM that allow us to add recurring, longer-term value beyond an initial transaction. These advancements have not only deepened our customer engagement but have also enriched our collaborations with supplier and technology partners. We have solidified specific partnerships that are enabling us to grow our recurring revenue within the transportation, logistics and infrastructure ecosystem. Our Wabash Parts joint venture rapidly established significant distribution capabilities that allow our dealer network efficient access to our comprehensive portfolio of aftermarket parts. In 2025, Wabash exercised its option to acquire its joint venture partner’s 51% membership interest in Linq Venture Holdings, LLC, a transaction that makes it a wholly-owned subsidiary. Linq Venture Holdings, LLC continues to play a crucial role in advancing our digital capabilities, which aim to revolutionize the online experience for our dealers, traditional and non-traditional suppliers of both parts and services and a broad set of customers spanning across the vast transportation and logistics landscape. Additionally, our 2023 investment to add 20% more dry van manufacturing capacity at our Lafayette facility has reinforced our go-to-market strategy with a portfolio-based selling approach that leverages the breadth of our products.
In addition to our commitment to sustain profitable growth within each of our existing reporting segments, our long-term strategic initiatives include a focus on diversification efforts, both organic and strategic, to continue to transform Wabash into a lean, visionary leader of connected solutions with a higher growth and margin profile to successfully deliver a greater value to our shareholders. Our strategy is centered around our ability to scale core competencies by growing in and around core markets with known customers.
Our ability to generate solid margins and cash flows and a healthy balance sheet should position the Company with ample resources to (1) fund our internal capital needs to support both organic growth and productivity improvements, (2) optimize our debt leverage and other financial ratios, (3) return capital to shareholders, and (4) selectively pursue strategic acquisitions. We will continue our internal effort to strategically identify potential acquisition or partnership targets that we believe can create shareholder value and accelerate our growth and diversification efforts, while leveraging our strong competencies in manufacturing execution, sourcing and innovative engineering leadership to assure strong value creation. Organically, our focus is on profitably growing and diversifying our operations through leveraging our existing assets, capabilities, and technology into higher margin products and markets and thereby providing value-added customer solutions.
Throughout 2025, we demonstrated our commitment to being responsible stewards of the business by maintaining a balanced approach to capital allocation. The resilience of our operations and our strong financial position provided us the opportunity to take specific actions as part of our ongoing commitment to prudently manage the overall financial risks of the Company, returning capital to our shareholders, and optimizing our capital structure for long-term growth. These actions included repurchasing $30.9 million (inclusive of excise tax) of common stock under the share repurchase program approved by our Board of Directors and paying dividends of $13.8 million. In addition, as further described in the “Liquidity and Capital Resources” section below, in September 2022 we amended our Revolving Credit Agreement. The amendment increased the total credit facility to $350 million, extended the maturity to September 2027, which is the nearest maturity date of our long-term debt, and as of December 31, 2025, there was $45.0 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.
In addition to overall industry risks, there are downside risks relating to issues with both the domestic and global economies, including the housing, energy, and construction-related markets in the U.S. Other potential risks as we proceed into 2026 primarily relate to the fact that 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, 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 a historically normalized overall demand level while maintaining or growing margins through improvements in product pricing as well as productivity and other operational excellence initiatives.
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As we enter 2026, we will continue to adjust to changes in the current environment, preserve the strength of our balance sheet, prioritize the safety of our employees, and ensure the liquidity and financial well-being of the Company. We believe we remain well-positioned for both near-term and long-term success in the transportation, logistics, and infrastructure industries because: (1) our core customers are among the major participants in these industries; (2) our technology and innovation provides value-added solutions for our customers by reducing operating costs, improving revenue opportunities, and solving unique transportation problems; (3) our Wabash Management System (“WMS”) principles and processes and enterprise-wide lean efforts drive focus on the interconnected processes that are critical for success across our business; (4) our significant brand recognition, presence throughout North America, and the utilization of our extensive dealer network to market and sell our products; and (5) our One Wabash approach to create a consistent, superior experience for all customers who seek our connected solutions in the transportation, logistics, and infrastructure markets. By continuing to be a premier provider of diverse solutions aimed at optimizing end-to-end supply chains across the transportation, logistics, and infrastructure industries we expect to leverage our existing assets and capabilities into higher margin products and markets by delivering connected value-added customer solutions.
Operating Performance
We generally measure our operating performance in five key areas – Safety/Morale, Quality, Delivery, Cost Reduction, and Environment. We maintain a continuous improvement mindset in each of these key performance areas.
Safety/Morale. The safety of our employees is a core value. We demonstrate this core value by working on innovations to protect the people who operate our equipment and partnering with others to promote higher standards in transportation and manufacturing. We continually focus on reducing the severity and frequency of workplace injuries to create a safe environment for our employees and minimize workers compensation costs. We believe that our improved environmental, health, and safety management translates into higher labor productivity and lower costs as a result of less time away from work and improved system management. See the “Human Capital Resources and Management” section in Part I, Item 1, "Business" of this Annual Report on Form 10-K for additional detail on our commitment to safety and human capital.
Quality. Our commitment to quality and safety is backed by a robust concern reporting system and associated processes. Any Wabash employee can report a potential safety-related concern that could cause an unreasonable risk of harm. Potential or reported safety concerns are routed to a cross-functional Product Safety Team that includes members from Quality, Warranty, Engineering, Sales and Strategic Sourcing. The Product Safety Team investigates submissions and serves as an initial filter of potential safety issues. Issues that need to be escalated are sent to the Product Safety Council, which consists of executive team members who will coach and give final direction to the Product Safety Team. We monitor product quality on a continual basis through a number of means for both internal and external performance as follows:
▪Internal performance. Key process indicators for our quality measurement include both First Time Quality (“FTQ”) and Defects Per Unit (“DPU”). FTQ is a performance metric that measures the impact of all aspects of the business on our ability to ship our products at the end of the production process and DPU is a measurement of defects found at the end of the production process. As with previous years, the expectations of the highest quality product continue to increase while maintaining FTQ performance and reducing rework. In addition, we currently maintain ISO 9001 registrations at our Lafayette, Indiana (since 2012) and Cadiz, Kentucky facilities (since 2014).
▪External performance. We actively track our warranty claims and costs to identify and drive improvement opportunities in quality and reliability for our customers. Early lifecycle warranty claims for our van trailers are trended for performance monitoring. Using a unit-based warranty reporting process to track performance and document failure rates, early lifecycle warranty units per 100 van trailers shipped averaged approximately 2.5, 2.8, and 2.6 units in 2025, 2024 and 2023, respectively. Continued low claim rates have been driven by our successful execution of continuous improvement programs centered on process variation reduction and responding to the input from our customers. We expect that these activities will continue to allow us to manage our total warranty cost profile.
In addition to managing a robust quality management system for Wabash’s operations for internal and external performance, we expect all direct and indirect suppliers to meet certain standards of quality, engineering, delivery, and management. Our supplier audit process is a comprehensive assessment performed at the supplier’s facility focusing on their system capabilities and how they measure to Wabash’s established requirements. Based on a supplier’s overall rating, action plans are developed to identify improvement opportunities, corrective actions, and timelines to ensure proper closure.
Delivery/Productivity. We measure productivity on many fronts. Some key indicators include production line throughput, labor hours per trailer or truck body, labor cost as a percentage of revenue, scrap rates, and inventory levels. Improvements over the last several years in these areas have translated into significant improvements in our ability to better manage inventory flow, control costs, and analyze material and contribution margins.
▪During the past several years, we have focused on productivity enhancements across all of our product lines within manufacturing assembly and sub-assembly areas through developing the capability for mixed model production.
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▪Through deployment of the Wabash Management System (“WMS”), all of our business reporting segments have focused on increasing velocity at all our manufacturing locations. We have engaged in extensive lean training and over the last several years have deployed purposeful capital to accelerate our productivity initiatives.
▪Our manufacturing leadership teams have developed competencies to isolate process constraints, and then address those constraints through multiple avenues that drive additional throughput and cost reductions.
Cost Reduction and our Operating System. The WMS allows us to develop and scale high standards of excellence across the organization. We believe in our One Wabash approach and standardized processes to drive and monitor performance inside our manufacturing facilities. Continuous improvement is a fundamental component of our operational excellence focus. Our focus on leveraging One Wabash and the WMS mindset across the Company, for example, has allowed us to make strides in all areas of manufacturing including safety, quality, on-time delivery, cost reduction, employee morale, and environment. We continue to maintain focus on continuous improvement. In the past several years, we made adjustments throughout our processes to align variable and fixed costs with capacity and created leaner internal processes in multiple areas. In addition, we continued to invest capital in our processes to reduce variable cost, lowered inherent safety risk in our processes, improved overall consistency in our manufacturing processes, and maintained our assets to capitalize on any economic and/or industry upswings.
Environment. We have been on a sustainability journey since the Company’s inception. Uniquely incentivized to improve product designs by utilizing new composite materials to reduce the weight and improve the durability of our products, we are a leader in creating value for customers by facilitating improved fuel efficiency and ensuring the quality and longevity of our equipment. We commit to our employees, customers, and shareholders to conduct our business responsibly, protect the environment through pollution prevention, and uphold employee health and safety as a core company value. Energy conservation efforts are another critical part of our commitment to continuous improvement and environmental stewardship, and we drive energy conservation efforts across all of our facilities. This policy includes improving operational efficiency as well as upgrading to energy-conserving equipment where possible.
We demonstrate our commitment to sustainability by maintaining ISO 14001 registration of our Environmental Management System at our Lafayette, Indiana; Cadiz, Kentucky; San José Iturbide, Mexico; and Harrison, Arkansas locations. In 2005, our Lafayette, Indiana facility was one of the first trailer manufacturing operations in the world to be ISO 14001 registered. Being ISO 14001 registered requires us to demonstrate quantifiable and third-party verified environmental improvements.
During 2024, our recycling programs and use of recycled materials saved 213,000 cubic yards of landfill space, 53,000,000 kilowatt-hours of electricity, 57,800 metric tons of greenhouse gas emissions, and 31,600 mature trees. In addition, in December 2025, we were recognized among Newsweek’s America’s Most Responsible Companies 2026.
In addition, manufacturers across multiple industries choose our proprietary DuraPlate® composite technology for its versatility and strength. Each DuraPlate® panel and product contains between 15% and 30% post-consumer resin (“PCR”). By using PCR in the manufacture of DuraPlate®, Wabash has diverted the equivalent of more than 1.93 billion plastic bottles from landfills including 75.4 million bottles in 2024. Furthermore, at the end of the product lifespan, DuraPlate® is recyclable.
Our annual Corporate Responsibility Report is available on our website (ir.onewabash.com) and references the ongoing environmental, social, and governance (“ESG”) initiatives that demonstrate our commitment to sustainability and social responsibility. The content on any website referred to in this Annual Report on Form 10-K is not incorporated by reference into this Annual Report on Form 10-K unless expressly noted.
Industry Trends
Trailer demand is a direct function of the amount of freight to be transported. To monitor the state of the industry, we evaluate a number of indicators related to trailer manufacturing and the transportation industry. Recent trends we have observed include the following:
Transportation / Trailer Cycle. The trailer industry generally follows the transportation industry cycles. The most recent estimates from industry forecasters ACT Research Co. (“ACT”) and FTR Associates (“FTR”) indicate total United States trailer production levels for 2025 of approximately 196,000 and 195,000, respectively, which represents a decrease of approximately 16.6% and 15.2%, respectively, from 2024 production levels.
Current estimates from ACT and FTR for 2026 United States trailer production are 183,000 and 180,000, respectively, representing a decrease of approximately 6.6% and a decrease of 7.7%, respectively, versus 2025. These estimates are generally in-line with our expectations as trailer manufacturers manage a continued weak of 2026 demand compared to previous years due to the continuing freight recession.
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ACT is forecasting annual new trailer production levels for 2027, 2028, 2029, and 2030 of approximately 257,000, 297,000, 307,000, and 299,000, respectively. In addition, FTR is forecasting annual new trailer production for 2027, 2028, 2029 of approximately 231,000, 291,000, and 298,000, respectively. These estimates are generally more consistent with historical trailer industry production levels, and in some years higher than historical production levels. However, overall economic uncertainty and continued soft demand in the industry for certain of our products could continue to impact these estimates. This uncertainty and softness are evident in the ACT and FTR forecasts, particularly for 2026 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.
Transportation Regulations and Legislation. There are several different areas within both federal and state government regulations and legislation that are expected to have an impact on trailer demand, including:
▪The Canadian Department of the Environment continues to delay the trailer portions of Canada’s greenhouse gas regulations (“GHG2”), essentially following the California Air Resource Board (“CARB”), who will provide at least a six-month notice prior to commencement of enforcing GHG2. This rule mirrored the EPA GHG2 regulations and would only apply to Wabash trailers registered in Canada.
▪On December 3, 2019, CARB issued an official advisory notifying trailer manufacturers that CARB will be suspending enforcement of GHG2 trailer requirements and will provide at least a six-month written notice prior to commencement of enforcing GHG2. If we were to receive CARB’s six-month advance notice of enforcement, more stringent van trailer standards would potentially become effective for various model years—requiring more advanced fuel efficiency technologies, such as rear boat tails and higher percentage improvement side skirts and tires. CARB continues to suspend enforcement as a six-month written notice has not been issued. We will continue to monitor the status of the regulation.
▪CARB Advanced Clean Fleet (“ACF”) legislation sets requirements for organizations to reduce the overall emissions of the vehicle fleets they operate. These standards applied to fleets owned and operated by Wabash at the Moreno Valley and Perris, California facilities as well as many Wabash customers who own and operate fleets in California. In early 2025, CARB withdrew a waiver request from EPA and will not enforce ACF regulations for high-priority (large commercial) and drayage fleets. State and local government fleets remain subject to the regulation.
▪CARB’s Advanced Clean Truck (“ACT”) regulations impact the truck body chassis manufacturers that supply to Wabash by setting an annual zero emission sales requirement. Congress has since revoked previously-issued waivers for CARB’s ACT through a Congressional Review Act. This regulation is being challenged by multiple states as well as the EPA and DOJ. However, CARB is continuing efforts to advance electric vehicle deployment and adoption and has issued a report outlining potential means for doing the same. Wabash will continue to monitor the lawsuits surrounding this regulation while gathering information from customers and suppliers regarding any continued push to drive larger market penetration of electric commercial trucks over the coming years beyond an immediate compliance-only driven solution.
▪In 2024, CARB zero-emissions Transport Refrigeration Unit (“TRU”) rules went into effect. Like ACF, these requirements impacted Wabash customers and worked to drive greater demand for electric TRUs that are installed on Wabash vehicles. CARB requested and received a partial waiver from EPA for TRUs. CARB withdrew the portion of the waiver request that covered the TRU zero emission requirements. While CARB withdrew their waiver request for some of their zero emissions related regulations, we believe that innovation will continue to drive the industry toward a lower emission solution that provides a value proposition to the customers over and above a compliance-only driven solution.
▪EPA’s American Innovation and Manufacturing Act (“AIM”) continues to phase-down the production and consumption of hydrofluorocarbons (“HFCs”) in the United States. The AIM Act currently mandates that EPA provide Wabash with application-specific allowances to manufacture EcoNexTM Technology products. Such allowances operate to increase certainty that HFCs are made available to Wabash during the time that the application-specific provisions are active. EPA has extended the allocation program for another five years or through 2031. Wabash has not been impacted by any reduction in availability or increase in cost of HFCs and did not request allowances for 2026 based on current demand as well as existing inventory.
▪Updates to the proposed CARB 2024 Heavy-Duty Engine and Vehicle Omnibus regulation provided greater flexibility to chassis manufacturers for 2024–2026 engine model years. While this should help OEMs as they develop near-term engine updates, OEMs will be required to comply with 2027 emission regulations in the long-term. While the number of chassis manufacturers registering EVs continued to grow (albeit largely in the traditional OEM space), hydrogen fuel cell manufacturers also started to register. While the numbers were small (primarily testing and over-the-road applications), this was a positive sign for the future of work trucks. In December 2024, the EPA issued a waiver officially giving CARB federal permission to enforce the rule.
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▪PFAS regulations are being developed and issued by EPA and various states. We are monitoring the regulations and their applicability to our operations and products. Minnesota’s Pollution Control Agency (“MPCA”) has issued a reporting requirement for manufacturers who distribute for sale into the state any product or component that contains intentionally-added PFAS. The MPCA regulation includes a ban on non-essential uses beginning in 2032. Wabash is working closely with its suppliers to understand whether any supplied components or materials contain any such PFAS under this regulation.
Other Developments. Other developments and potential impacts on the industry include:
▪While EPA and the National Highway Traffic Safety Administration (“NHTSA”) are unable to regulate trailers due to a previous ruling, which reduces the risk to trailer manufacturers in the near term, CARB continues to seek additional states to join their position in attempting to drive regulation at the state level.
▪While we believe the need for trailer equipment will be positively impacted by the legislative and regulatory changes addressed above, these demand drivers could be offset by factors that contribute to the increased concentration and density of loads.
▪Trucking company profitability, which can be influenced by factors such as fuel prices, freight tonnage volumes, and government regulations, is highly correlated with the overall economy of the U.S.; carrier profitability significantly impacts demand for, and the financial ability to, purchase new trailers.
▪We expect that the majority of freight in our industry will continue to be moved by truck and, according to ATA, total freight transportation revenue is expected to increase from an estimated $921 billion in 2025 to $1.46 trillion in 2035.
▪The ongoing transition from diesel tractors (and their coolant systems) to electric or fuel cell vehicles changes how heated or cooled trailers can regulate temperature. This creates a market need for alternate heating and cooling solutions.
▪The impacts of the continued near-shoring trend should be positive for trucking. It will continue to impact current supply chain routes, with possible movement of logistics hubs.
▪Oversupply of refrigerated trailers in 2022-2023 has led to a surplus of inventory in the market, which put downward pressure on supply since 2024. The long-term outlook of the market still remains strong, and is expected to follow the same industry trend as the total trailer market as demand softness subsides.
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Results of Operations
2025 Compared to 2024
Net Sales
Net sales in 2025 decreased $404.0 million, or 20.8%, compared to 2024. By business segment, net sales prior to intersegment eliminations and related trailer units sold were as follows (dollars in thousands):
Year Ended December 31, Change
(prior to elimination of intersegment sales)
Sales by Segment
New Units Shipped (units)
Used Units Shipped (units)
—————————
(1) Trailer shipments for 2025 and 2024 do not include TaaS units transferred of 1,262 and 63 units, respectively.
TS segment sales, prior to the elimination of intersegment sales, were $1,344.4 million in 2025, a decrease of $410.8 million, or 23.4% compared to 2024. The decrease in sales was primarily due to a decline in shipments due to lower demand. New trailers shipped during 2025 totaled 27,770 compared to 32,100 trailers in prior year, a decrease of 13.5%. New truck bodies shipped during 2025 totaled 10,600 compared to 14,255 truck bodies in prior year, a decrease of 25.6%. The decrease in shipments was primarily driven by lower demand due to the softening freight market.
P&S segment sales, prior to the elimination of intersegment sales, were $237.1 million in 2025, an increase of $32.1 million, or 15.6%, compared to 2024. The overall increase in sales for this segment was due primarily to the growth of our Upfitting centers and our Trailers as a Service (TaaS)SM offerings, which combined grew by $24.7 million compared to 2024.
Cost of Sales
Cost of sales was $1,472.8 million in 2025, a decrease of $208.8 million, or 12.4%, compared to 2024. 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.
TS segment cost of sales was $1,318.7 million in 2025, a decrease of $218.9 million, or 14.2%, compared to 2024. The decrease in cost of sales, which was primarily driven by lower shipment volumes, resulted in a decrease in materials costs of $133.7 million, or 13.5%, a decrease in labor and employee related costs of $46.7 million, or 15.8%, along with a decrease in certain other manufacturing costs.
P&S segment cost of sales, prior to the elimination of intersegment sales, was $192.9 million in 2025, an increase of $35.3 million, or 22.4%, compared to 2024. The increase in cost of sales, which was primarily driven by higher sales, resulted in an increase in materials costs of $24.8 million, or 23.6%, offset by an increase in labor and employee related costs of $3.0 million, or 10.0%, and an increase in certain other overhead costs associated with increased sales and growth initiatives within the segment.
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Gross Profit
Gross profit was $69.9 million in 2025, a decrease of $195.2 million, or 73.6% from 2024. Gross profit as a percentage of sales, or gross margin, was 4.5% in 2025 as compared to 13.6% in 2024. Gross profit by segment was as follows (in thousands):
Year Ended December 31, Change
Gross Profit by Segment
TS segment gross profit was $25.7 million in 2025 compared to $217.6 million in 2024, a decrease of $191.9 million. Gross profit, as a percentage of net sales prior to the elimination of intersegment sales, was 1.9% in 2025 as compared to 12.4% in 2024, a decrease of 10.5%. The overall decrease in gross profit from the prior year period was primarily driven by the decline in shipments across all of our product lines. Conversion costs that did not decline as much as sales further reduced gross profit as a percentage of net sales.
P&S segment gross profit was $44.2 million in 2025 compared to $47.5 million in 2024. Gross profit, as a percentage of net sales prior to the elimination of intersegment sales, was 18.6% in 2025 compared to 23.1% in 2024, a decrease of 4.5%. The overall decrease in gross profit was primarily related additional costs associated with business growth and differences in the mix of revenues within the segment.
General and Administrative Expenses
General and administrative expenses were $(286.8) million in 2025, which decreased $867.5 million, or 149.4%, compared to 2024. The year-over-year decrease was primarily driven by developments related to the Product Liability Matter, as defined and further described in Note 15 to the Consolidated Financial Statements. In 2024, Wabash recorded a $450 million loss related to this matter. In 2025, following a reduction in the judgment, the Company recognized a $418 million gain. This favorable impact was partially offset by an increase in employee-related general and administrative costs, including wages, benefits, and incentive compensation programs, of approximately $8.7 million. As a percentage of net sales, general and administrative expenses were (18.6)% in 2025 compared to 29.8% in 2024. The year-over-year change as a percentage of net sales was primarily attributable to the impact of the Product Liability Matter.
Selling Expenses
Selling expenses were $24.4 million in 2025, a decrease of $3.6 million, or 12.8%, compared to 2024. The decrease was primarily attributable to a decrease in advertising and promotional expense of approximately $3.1 million, which is due in part to expenses incurred during the 2024 period related to our Ignite Conference. As a percentage of net sales, selling expenses were 1.6% in 2025 compared to 1.4% in 2024. The overall increase in selling expenses as a percentage of net sales was primarily attributable to the decrease in sales outpacing the decrease in selling expenses.
Amortization of Intangibles
Amortization of intangibles was $11.2 million in 2025 compared to $12.0 million in 2024. Amortization of intangibles was the result of expenses recognized for intangible assets recorded from previous acquisitions. In 2025, trademark intangibles acquired in conjunction with the Trailerhawk acquisition began amortization, and are included in the $11.2 million of spend in 2025 . There were certain technology-related intangible assets that became fully amortized 2024.
Impairment and Other, Net
Impairment and other, net was a net loss of $13.6 million during 2025 and a net loss of $0.5 million during 2024. Activity during the current year period primarily related to the Company’s announcement of its plan to idle its facilities in Little Falls, Minnesota and in Goshen, Indiana. The Company reviewed the asset group for impairment and as a result, machinery and equipment assets at the Little Falls, Minnesota facility previously valued at $17.2 million were determined to have a fair value of $3.8 million, resulting in a $13.4 million impairment charge recognized in the fourth quarter of 2025. Little Falls, Minnesota production is a part of the Transportation Solutions segment. The review of the Goshen, Indiana asset group , which also is a part of the Transportation Solutions segment, did not result in an impairment.
Other Income
Interest expense in 2025 totaled $21.3 million compared to $19.8 million in 2024. Interest expense relates to interest and non-cash accretion charges on our Senior Notes and Revolving Credit Agreement. Interest expense in the current year period increased compared to the 2024 period due to borrowing activities under the Revolving Credit Facility in 2025.
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Other, net for 2025 represented income of $4.0 million as compared to income of $5.4 million for 2024. Income for both the current and prior year period primarily relates to interest income.
Income Taxes
We recognized income tax expense of $71.5 million in 2025 compared to income tax benefit of $93.5 million in 2024. The effective tax rate for 2025 was 25.3% compared to 24.8% for 2024. The effective tax rate for both 2025 and 2024 differs from the U.S. Federal statutory rate of 21.0% primarily due to the impact of state and local taxes and discrete items, including stock-based compensation. Net cash refunds for income taxes in 2025 was $1.3 million compared to net cash paid during 2024 of $29.8 million.
Liquidity and Capital Resources
Capital Structure
Our capital structure is comprised of a mix of debt and equity. As of December 31, 2025, our debt-to-equity ratio was approximately 1.2:1.0. 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. Our Board of Directors designated a Finance Committee to assist the Board in overseeing the Company’s capital structure, financing, investment, and other financial matters of importance.
Throughout 2025, in keeping with this balanced approach, we repurchased $30.9 million (inclusive of excise tax) of common stock under the share repurchase program approved by our Board of Directors and paid dividends of $13.8 million. Additionally, as described in the “Debt Agreements and Related Amendments” section below, in September 2022 we amended our Revolving Credit Agreement. The amendment increased the total revolving commitments to $350 million and extended the maturity to September 2027, the nearest maturity date of our long-term debt. As of December 31, 2025, there was $45.0 million outstanding under the Revolving Credit Agreement. Collectively, these demonstrate our confidence in the Company’s long-term financial outlook and ability to generate cash flow both near and long term. They reinforce our commitment to delivering shareholder value while maintaining the flexibility to execute our strategic plan for profitable growth and diversification.
Our liquidity position, defined as cash on hand and available borrowing capacity under the Revolving Credit Facility, was $235.3 million as of December 31, 2025, compared to $421.9 million as of December 31, 2024, representing a decrease of 44%. The decrease in liquidity from the prior year is primarily attributable to a lower cash balance and lower available revolver capacity at December 31, 2025, resulting from a reduction in cash provided by operating activities in 2025 versus 2024. For 2026, we expect to continue our commitment to fund our working capital requirements and capital expenditures from net cash provided by operations or available borrowing capacity under the Revolving Credit Agreement, as needed. Along with these investments, we will also 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 and 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.
Debt Agreements and Related Amendments
Senior Notes
On October 6, 2021, we closed on an offering of $400 million in aggregate principal amount of our 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 us, certain subsidiary guarantors named therein (the “Guarantors”) and Computershare Trust Company, N.A., 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.
We may redeem some or all of the Senior Notes at redemption prices (expressed as percentages of principal amount) equal to 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 our 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.
The Senior Notes are guaranteed on a senior unsecured basis by all direct and indirect existing and future domestic restricted subsidiaries, subject to certain restrictions. The Senior Notes and related guarantees are our and the Guarantors’ general unsecured senior obligations and will be subordinated to all of our and the Guarantors’ existing and future secured debt to the extent of the assets securing that secured obligation. In addition, the Senior Notes are structurally subordinated to any existing and future debt of any of our subsidiaries that are not Guarantors, to the extent of the assets of those subsidiaries.
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Subject to a number of exceptions and qualifications, the Indenture restricts our ability and the ability of certain of our subsidiaries to: (i) incur additional indebtedness; (ii) pay dividends or make other distributions in respect of, or repurchase or redeem, our capital stock or with respect to any other interest or participation in, or measured by, our profits; (iii) make loans and certain investments; (iv) sell assets; (v) create or incur liens; (vi) enter into transactions with affiliates; and (vii) consolidate, merge or sell all or substantially all of our assets. These covenants are subject to a number of important exceptions and qualifications.
During any time when the Senior Notes are rated investment grade by at least two of Moody’s, Fitch and Standard & Poor’s Ratings Services and no Default (as defined in the Indenture) has occurred and is continuing, many of such covenants will be suspended and we and our subsidiaries will cease to be subject to such covenants during such period.
The Indenture contains customary events of default, including payment defaults, breaches of covenants, failure to pay certain judgments and certain events of bankruptcy, insolvency and reorganization. If an event of default occurs and is continuing, the principal amount of the Senior Notes, plus accrued and unpaid interest, if any, may be declared immediately due and payable. These amounts automatically become due and payable if an event of default relating to certain events of bankruptcy, insolvency or reorganization occurs. As of December 31, 2025, we were in compliance with all covenants.
From time to time we may evaluate various alternatives available with respect to addressing the October 2028 maturity of the Senior Notes, including the purchase, redemption, refinancing, amending, exchanging, extending or otherwise retiring any amount of our outstanding indebtedness at any time, in open market or privately negotiated transactions with the holders of such indebtedness or otherwise. No final decisions have been made at this time, and the timing, structure and terms of any such transactions will depend on capital market conditions and other relevant factors.
Contractual coupon interest expense and accretion of fees for the Senior Notes for the years ended December 31, 2025, 2024 and 2023 were $18.0 million and $0.7 million, $18.0 million and $0.7 million, and $18.0 million and $0.6 million, respectively. Contractual coupon interest expense and accretion of discount and fees are included in Interest expense on the Company’s Consolidated Statements of Operations.
Revolving Credit Agreement
On September 23, 2022, we entered into the Third Amendment to the Second Amended and Restated Credit Agreement among us, certain of our subsidiaries as borrowers (together with us, the “Borrowers”), certain of our subsidiaries as guarantors, the lenders party thereto, and Wells Fargo Capital Finance, LLC, as the administrative agent (the “Agent”), which amended our existing Second Amended and Restated Credit Agreement, dated as of December 21, 2018 (as amended from time to time, the “Revolving Credit Agreement”).
Under the Revolving Credit Agreement, the lenders agree to make available a $350 million revolving credit facility to the Borrowers with a scheduled maturity date of September 23, 2027. We have the option to increase the total commitments under the facility by up to an additional $175 million, subject to certain conditions, including obtaining agreements from one or more lenders, whether or not party to the Revolving Credit Agreement, to provide such additional commitments. Availability under the Revolving Credit Agreement is based upon quarterly (or more frequent under certain circumstances) borrowing base certifications of the Borrowers’ eligible inventory, eligible leasing inventory and eligible accounts receivable, and is reduced by certain reserves in effect from time to time.
Subject to availability, the Revolving Credit Agreement provides for a letter of credit subfacility in the amount of $25 million and allows for swingline loans in the amount of $35 million. Outstanding borrowings under the Revolving Credit Agreement bear interest at an annual rate, at the Borrowers’ election, equal to (i) adjusted term Secured Overnight Financing Rate 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. The Borrowers 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 the Agent and the lenders.
The Revolving Credit Agreement is guaranteed by certain of our subsidiaries (the “Guarantors”) and is secured by substantially all personal property of the Borrowers and the Guarantors.
The Revolving Credit Agreement contains customary covenants limiting our ability and certain of our subsidiaries to, among other things, pay cash dividends, incur debt or liens, redeem or repurchase stock, enter into transactions with affiliates, merge, dissolve, repay subordinated indebtedness, make investments and dispose of assets. In addition, we will be required to maintain a minimum fixed charge coverage ratio of not less than 1.0 to 1.0 as of the end of any period of 12 fiscal months when excess availability under the Revolving Credit Agreement is less than the greater of (a) 10% of the lesser of (i) the total revolving commitments and (ii) the borrowing base (such lesser amount, the “Line Cap”) and (b) $25 million. As of December 31, 2025, we were in compliance with all covenants.
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If availability under the Revolving Credit Agreement is less than the greater of (i) 10% of the Line Cap and (ii) $25 million for three consecutive business days, or if there exists an event of default, amounts in any of the Borrowers’ and the Guarantors’ deposit accounts (other than certain excluded accounts) will be transferred daily into a blocked account held by the Agent and applied to reduce the outstanding amounts under the facility.
The Revolving Credit Agreement contains customary events of default. If an event of default occurs and is continuing, the lenders may, among other things, require the immediate payment of all amounts outstanding and foreclose on collateral. In addition, in the case of an event of default arising from certain events of bankruptcy or insolvency, the lenders’ obligations under the Revolving Credit Agreement would automatically terminate, and all amounts outstanding under the Revolving Credit Agreement would automatically become due and payable.
For the year ended December 31, 2025, we had payments of principal totaling $82.4 million and borrowings of principal totaling $127.4 million under the Revolving Credit Agreement. As of December 31, 2025, there was $45.0 million outstanding.
During the year ended December 31, 2024, we had payments of principal totaling $0.9 million and borrowings of principal totaling $0.9 million under the Revolving Credit Agreement. As of December 31, 2024, there were no amounts outstanding.
Interest expense under the Revolving Credit Agreement for the years ended December 31, 2025, 2024, and 2023, was approximately $2.3 million, $0.8 million, and $0.9 million, respectively. Interest expense under the Revolving Credit Agreement is included in Interest expense on the Company’s Consolidated Statements of Operations.
Cash Flow
2025 Compared to 2024
Cash provided by operating activities for 2025 totaled $11.7 million, compared to cash provided by operating activities of $117.3 million in 2024. The cash provided by operations during the current year was the result of net income adjusted for various non-cash activities, including depreciation, amortization, deferred taxes, stock-based compensation, and working capital. Changes in key working capital accounts for 2025 and 2024 are summarized below (in thousands):
Source (Use) of cash:
Accounts receivable decreased $24.1 million in 2025 and decreased $39.0 million in 2024. Days sales outstanding, a measure of working capital efficiency that measures the amount of time a receivable is outstanding, was approximately 34 days and 31 days for the year-ended December 31, 2025 and 2024, respectively. The decrease in accounts receivable in 2025 was primarily due to the decrease in shipments compared to 2024. Inventories decreased in 2025 by $77.7 million compared to an increase in 2024 of $8.8 million. The overall decrease in inventory for 2025 was primarily attributable to the lower inventory requirements of reduced production compared to prior year. Our inventory turns, a commonly used measure of working capital efficiency that measures how quickly inventory turns per year, were approximately 7 and 6 times in 2025 and 2024, respectively. Accounts payable and accrued liabilities decreased $6.2 million in 2025 compared to a decrease of $68.7 million for 2024. Days payable outstanding, a measure of working capital efficiency that measures the amount of time a payable is outstanding, was 40 days in 2025 and 35 days in 2024.
Investing activities used $92.7 million during 2025 compared to $94.8 million used in 2024. Investing activities for 2025 included capital expenditures for property, plant, and equipment of $24.7 million, which was a decrease compared to $72.2 million during 2024. In addition, expenditures related to revenue generating assets totaled approximately $47.5 million and expenditures related to investment in unconsolidated entities totaled approximately $18.9 million. Cash used in investing activities in 2025 was primarily related to investments in our TaaS activities. In 2024, cash used in investing activities was primarily related to capital expenditures to support growth and improvement initiatives at our facilities.
Financing activities used $2.5 million during 2025 as compared to using $86.3 million during 2024. Net cash used in 2025 primarily relates to common stock repurchases of $33.8 million and cash dividend payments to our shareholders of $13.8 million. Borrowings under our Revolving Credit Agreement totaled $127.4 million which were partially offset by payments of principal, interest, and unused fees made under our Revolving Credit Agreement of $82.4 million. We repurchased common stock of $70.9 million and paid cash dividends to our shareholders of $14.8 million in 2024.
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Our liquidity position, defined as cash on hand and available borrowing capacity under the Revolving Credit Facility, was $235.3 million as of December 31, 2025 compared to $421.9 million as of December 31, 2024, representing a decrease of 44%. The decrease in liquidity from the prior year was primarily attributable to a lower cash balance and lower available revolver capacity at December 31, 2025, resulting from a reduction in cash provided by operating activities in 2025 versus 2024. Total debt obligations amounted to $445.0 million as of December 31, 2025.
For 2026 and forward, we expect to continue our commitment to fund our working capital requirements and capital expenditures from net cash provided by operations or available borrowing capacity under the Revolving Credit Agreement (as needed). Along with these investments, we will also maintain our assets to capitalize on any economic and/or industry upswings, while also responsibly returning capital to our shareholders. We will continue to move rapidly to adjust to the current environment 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.
Contractual Obligations and Commercial Commitments
A summary of our contractual obligations and commercial commitments, both on and off-balance sheet, as of December 31, 2025 are as follows (in thousands):
Debt:
Revolving Credit Agreement (due 2027) $ — $ 45,000 $ — $ — $ — $ — $ 45,000
Other:
Other Commercial Commitments:
Raw Material Purchase Commitments 21,500 — — — — — 21,500
Chassis Agreements and Programs 59,599 — — — — — 59,599
Total Other Commercial Commitments 86,714 — — — — — 86,714
(1) Future interest payments on variable rate long-term debt (if any) are estimated based on the rate in effect as of December 31, 2025, and only include interest payments (not unused line fees).
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 year ended December 31, 2025, we had payments of principal of $82.4 million and borrowings of principal of $127.4 million under the Revolving Credit Agreement, and as of December 31, 2025, there was $45.0 million outstanding.
The Senior Notes bear interest at the rate of 4.5% per annum from the date of issuance, payable semi-annually on April 15 and October 15.
Operating leases represent the total future minimum lease payments for leases that have commenced. As of December 31, 2025, obligations related to operating leases that we have executed but have not yet commenced were nominal.
We have standby letters of credit totaling $5.6 million issued in connection with workers compensation claims and surety bonds.
We have $21.5 million in purchase commitments through December 2026 for various raw material commodities, including aluminum, steel, polyethylene, and nickel, as well as other raw material components which are within normal production requirements.
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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 in some cases, for unallocated orders. The agreements generally state that the manufacturer will provide a supply of chassis to be maintained at our 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. In addition, the manufacturer typically retains 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 December 31, 2025, our outstanding chassis converter pool with the manufacturer totaled $59.6 million and we have included this financing agreement on our Consolidated Balance Sheets within Other accrued liabilities. Typically, chassis are converted and delivered to customers within 90 days of our receipt of the chassis.
The total amount of gross unrecognized tax benefits for uncertain tax positions, including positions impacting only the timing of tax benefits, was $1.5 million at December 31, 2025. Payment of these obligations would result from settlements with taxing authorities. Due to the difficulty in determining the timing of settlements, these obligations are not included in the table above. We do not expect to make a tax payment related to these obligations within the next year that would significantly impact liquidity.
Significant Accounting Policies and Critical Accounting Estimates
Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States. Our significant accounting policies are more fully described in Note 2 of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K.
Certain of our accounting policies require the application of significant judgment by management in selecting the appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty and are based on our historical experience, terms of existing contracts, evaluation of industry trends, information provided by our customers, and information available from other outside sources, as appropriate.
We consider an accounting estimate to be critical if it requires us to make assumptions about matters that were uncertain at the time we were making the estimate or changes in the estimate or different estimates that we could have selected would have had a material impact on our financial condition or results of operations.
Legal and Other Contingencies. The outcomes of legal proceedings and claims brought against us and other loss contingencies are subject to significant uncertainty. We establish legal contingency reserves when we determine that it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. In determining the appropriate accounting for loss contingencies, we consider the likelihood of loss or the occurrence of a liability, as well as our ability to reasonably estimate the amount of loss. We regularly evaluate current information available to us to determine whether an accrual should be established or adjusted. Estimating the probability that a loss will occur and estimating the amount of a loss or a range of loss involves significant judgment and such matters are unpredictable. We could incur judgments or enter into settlements for current or future claims that could materially impact our results of operations.
Impairment of Long-Lived Assets and Definite-Lived Intangible Assets. We review, on at least a quarterly basis, the financial performance of each business unit for indicators of impairment. In reviewing for impairment indicators, we also consider events or changes in circumstances such as business prospects, customer retention, market trends, potential product obsolescence, competitive activities, and other economic factors. An impairment loss is recognized when the carrying value of an asset group exceeds the future net undiscounted cash flows expected to be generated by that asset group. The impairment loss recognized is the amount by which the carrying value of the asset group exceeds its fair value.
Goodwill. We assess goodwill for impairment at the reporting unit level on an annual basis as of October 1st, after the annual planning process is complete. More frequent evaluations may be required if we experience changes in our business climate or as a result of other triggering events that may take place. If the carrying value exceeds fair value, the asset is considered impaired and is reduced to its fair value.
In assessing goodwill for impairment, we may choose to initially evaluate qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the qualitative assessment is not conclusive, then an impairment analysis for goodwill is performed at the reporting unit level using a quantitative approach. The quantitative test is a comparison of the fair value of the reporting unit, determined using a combination of the income and market approaches, to its recorded amount. If the recorded amount exceeds the fair value, an impairment is recorded to reduce the carrying amount to fair value, but will not exceed the amount of goodwill that is recorded.
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The process of evaluating goodwill for impairment is subjective and requires significant judgment at many points during the analysis. If we elect to perform an optional qualitative analysis, we consider many factors including, but not limited to, general economic conditions, industry and market conditions, financial performance and key business drivers, long-term operating plans, and potential changes to significant assumptions used in the most recent fair value analysis for the reporting unit. When performing a quantitative goodwill impairment test, we generally determine fair value using a combination of an income-based approach and a market-based approach. The fair value determination consists primarily of using significant unobservable inputs (Level 3) under the fair value measurement standards. We believe the most critical assumptions and estimates in determining the estimated fair value of our reporting units include, but are not limited to, the amounts and timing of expected future cash flows which is largely dependent on expected EBITDA margins, the discount rate applied to those cash flows, and terminal growth rates. The assumptions used in determining our expected future cash flows consider various factors such as historical operating trends and long-term operating strategies and initiatives. The discount rate used by each reporting unit is based on our assumption of a prudent investor’s required rate of return assuming the risk of investing in a particular company. The terminal growth rate reflects the sustainable operating income a reporting unit could generate in a perpetual state as a function of revenue growth, inflation, and future margin expectations.
Annual Goodwill Impairment Test
As of December 31, 2025, goodwill allocated to our TS and P&S segments was approximately $120.5 million and $70.7 million, respectively. For the 2025 annual goodwill impairment test conducted as of October 1, 2025, the Company chose to use a quantitative assessment to determine if it was more likely than not that the fair value of the TS and P&S reporting units were less than their respective carrying amounts. In accordance with the relevant accounting guidance, in order to perform the quantitative assessment, the Company considered many factors including, but not limited to, general economic conditions, industry and market conditions, financial performance and key business drivers, future operating plans, and potential changes to significant assumptions used in the most recent quantitative fair value analysis for each reporting unit. Based on the analysis of the factors and considerations described above, the Company concluded that it was more likely than not that the fair value of each reporting unit continued to be greater than the respective carrying value. Therefore, no impairment charges were recorded.
During the fourth quarter of 2024, the Company performed its annual goodwill impairment test using a quantitative assessment, whereas a qualitative assessment was utilized in 2023. Based on the results of these assessments, the Company determined it was more likely than not that the fair value of its reporting units was greater than their respective carrying amounts and no additional impairment of goodwill was recognized during the years ended December 31, 2024 or 2023.
Other
Inflation
Inflation impacts prices paid for labor, materials and supplies. Significant increases in the costs of production or certain commodities, raw materials, and components could have an adverse impact on our results of operations. As has been our practice, we will endeavor to offset the impact of inflation through selective price increases, productivity improvements, and hedging activities. Our ability to mitigate the impact of inflation through selective price increases may be limited by our backlog in cases of orders without inflation-based price adjustment provisions.
New Accounting Pronouncements
For information related to new accounting standards, see Note 3 of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K.
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ITEM 7A–QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
In addition to the risks inherent in our operations, we have exposure to financial and market risk resulting from volatility in commodity prices, interest rates, and foreign exchange rates. The following discussion provides additional detail regarding our exposure to these risks.
Commodity Price Risks
We are exposed to fluctuation in commodity prices through the purchase of various raw materials that are processed from commodities such as aluminum, steel, lumber, nickel, copper, and polyethylene. Given the historical volatility of certain commodity prices, this exposure can significantly impact product costs. We manage some of our commodity price changes by entering into fixed price contracts with our suppliers and through financial derivatives. To the extent that we are unable to offset the increased commodity costs in our product prices, our results would be materially and adversely affected. As of December 31, 2025, we had $21.5 million in raw material purchase commitments through December 2026 for materials that will be used in the production process, as compared to $15.0 million as of December 31, 2024. The increase from the prior year is primarily attributable to an increase in the use of fixed price contracts for aluminum and expectations for fluctuations in pricing. As of December 31, 2025, a hypothetical ten percent change in commodity prices based on our raw material purchase commitments through December 2026 would result in a corresponding change in cost of goods sold over a one-year period of approximately $2.2 million. This sensitivity analysis does not account for the change in the competitive environment indirectly related to the change in commodity prices and the potential managerial action taken in response to these changes.
Interest Rates
As of December 31, 2025, we had $45.0 million floating rate debt outstanding under our Revolving Facility. The only other outstanding debt on our Consolidated Balance Sheets as of December 31, 2025 were the Senior Notes, which carry a fixed interest rate of 4.50%. Based on the current borrowings under our Revolving Facility, a hypothetical 100 basis-point change in the floating interest rate would result in $0.5 million corresponding change in interest expense over a one-year period. This sensitivity analysis does not account for the change in the competitive environment indirectly related to the change in interest rates and the potential managerial action taken in response to these changes.
Foreign Exchange Rates
We are subject to fluctuations in the Mexican peso exchange rates that impact transactions with our foreign subsidiaries, as well as U.S. denominated transactions between these foreign subsidiaries and unrelated parties. A ten percent change in the Mexican peso exchange rates would have an immaterial impact on our results of operations. We do not hold or issue derivative financial instruments for speculative purposes.
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ITEM 8—FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Page
Report of Independent Registered Public Accounting Firm (PCAOB ID: 42) 51
Consolidated Balance Sheets as of December 31, 2025 and 2024 53
Notes to Consolidated Financial Statements 58
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Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Wabash National Corporation
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Wabash National Corporation (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 18, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.
Valuation of Goodwill
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/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2002.
Indianapolis, Indiana
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WABASH NATIONAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
December 31,
Assets
Current assets:
Investment in unconsolidated entities 7,250 7,250
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $ — $ —
Commitments and contingencies
Wabash National Corporation stockholders' equity:
Accumulated other comprehensive loss (398) (3,229)
Total Wabash National Corporation stockholders' equity 367,358 188,830
Total liabilities, noncontrolling interest, and equity $ 1,171,181 $ 1,411,529
The accompanying notes are an integral part of these Consolidated Statements.
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WABASH NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
Year Ended December 31,
Other income (expense):
Net income attributable to noncontrolling interest 188 996 603
Net income (loss) attributable to common stockholders per share:
Weighted average common shares outstanding (in thousands):
Dividends declared per share $ 0.32 $ 0.32 $ 0.32
The accompanying notes are an integral part of these Consolidated Statements.
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WABASH NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Dollars in thousands)
Year Ended December 31,
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment 1,762 (2,183) 975
Unrealized gain (loss) on derivative instruments 1,069 (618) (521)
Total other comprehensive income (loss) 2,831 (2,801) 454
Comprehensive income attributable to noncontrolling interest 188 996 —
The accompanying notes are an integral part of these Consolidated Statements.
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WABASH NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Dollars in thousands)
Shares Amount
Net income attributable to common stockholders for the year 231,252 231,252
Foreign currency translation 975 975
Unrealized loss on derivative instruments, net of tax (521) (521)
Common stock issued in connection with:
Net loss attributable to common stockholders for the year (284,071) (284,071)
Foreign currency translation (2,183) (2,183)
Unrealized loss on derivative instruments, net of tax (618) (618)
Common stock issued in connection with:
Net income attributable to common stockholders for the year 211,451 211,451
Unrealized gain on derivative instruments, net of tax 1,069 1,069
Common stock issued in connection with:
The accompanying notes are an integral part of these Consolidated Statements.
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WABASH NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Year Ended December 31,
Cash flows from operating activities:
Equity in loss from unconsolidated entity 6,982 6,089 803
Cash flows from investing activities:
Expenditures for revenue generating assets (47,544) (6,948) (5,650)
Acquisitions, net of cash acquired (1,666) —
Notes receivable issued to unconsolidated entity (18,900) (20,100) (2,450)
Cash flows from financing activities:
Proceeds from exercise of stock options 11 28 155
Debt issuance costs paid (1) (5) (117)
Distribution to noncontrolling interest (603) (512)
Cash and cash equivalents:
Supplemental disclosures of cash flow information:
Net cash (refunds) payments for income taxes $ (1,334) $ 29,831 $ 82,589
The accompanying notes are an integral part of these Consolidated Statements.
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WABASH NATIONAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. DESCRIPTION OF THE BUSINESS
Wabash National Corporation, which we refer to herein as “Wabash,” the “Company,” “us,” “we,” or “our,” is Changing How the World Reaches You®. Wabash was founded in 1985 and incorporated as a corporation in Delaware in 1991, with its principal executive offices in Lafayette, Indiana, as a dry van trailer manufacturer. Today we combine physical and digital technologies to deliver innovative, end-to-end solutions that optimize supply chains across transportation, logistics, and infrastructure markets.
To that end, we design, manufacture, and service a diverse range of products supporting first-to-final mile operations, including dry freight and refrigerated trailers, platform trailers, tank trailers, dry and refrigerated truck bodies, structural composite panels and products, trailer aerodynamic solutions, and specialty food grade processing equipment. In addition, through Wabash Hub, customers gain access to a nationwide parts and service network, Trailers as a Service (TaaS)SM, and advanced tools designed to streamline operations and drive growth. We have achieved this diversification through acquisitions, organic growth, and product innovation.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Consolidation.The consolidated financial statements reflect the accounts of the Company and its wholly-owned and majority-owned subsidiaries. All significant intercompany profits, transactions, and balances have been eliminated in consolidation.
Use of Estimates.The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that directly affect the amounts reported in its consolidated financial statements and accompanying notes. Actual results could differ from these estimates.
Cash and Cash Equivalents. Cash and cash equivalents include all highly liquid investments with a maturity of three months or less at the time of purchase.
Accounts Receivable.Accounts receivable are shown net of expected losses and primarily include trade receivables. The Company records expected losses for customers based upon a variety of factors including the Company’s historical collection experience, the length of time the account has been outstanding, and the financial condition of the customer. If the circumstances related to specific customers were to change, the Company’s estimates of expected losses with respect to the collectability of the related accounts could be further adjusted. The Company’s policy is to write-off receivables when they are determined to be uncollectible. Expected losses are charged to General and administrative expenses and Selling expenses in the Consolidated Statements of Operations.The following table presents the changes in expected losses (in thousands):
Years ended December 31,
Write-offs, net of recoveries (4) (58) —
Inventories. Inventories are stated at the lower of cost, determined on either the first-in, first-out or average cost method, or net realizable value. The cost of manufactured inventory includes raw material, labor and overhead.
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Prepaid Expenses and Other. Prepaid expenses and other as of December 31, 2025 and 2024 consists of the following (in thousands):
December 31,
Chassis converter pool agreements $ 61,925 $ 57,109
Insurance premiums & maintenance/subscription agreements 7,503 5,595
Chassis converter pool agreements represent chassis transferred to the Company on a restricted basis by the manufacturer, who retains 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 to the manufacturer’s dealers. As further described in Note 12, commodity swap contracts relate to our hedging activities (that are in an asset position) to mitigate the risks associated with fluctuations in commodity prices. Insurance premiums and maintenance/subscription agreements are charged to expense over the contractual life, which is generally one year or less. Other items primarily consist of investments held by the Company’s captive insurance subsidiary and other various prepaid and other assets.
Property, Plant, and Equipment.Property, plant, and equipment are recorded at cost, net of accumulated depreciation. Maintenance and repairs are charged to expense as incurred, while expenditures that extend the useful life of an asset are capitalized. Depreciation is recorded using the straight-line method over the estimated useful lives of the depreciable assets. The estimated useful lives are up to 33 years for buildings and building improvements and range from three to ten years for machinery and equipment.
Goodwill.Goodwill represents the excess purchase price over fair value of the net assets acquired. The Company determines its reporting units at the individual operating segment level, or one level below, when there is discrete financial information available that is regularly reviewed by segment management for evaluating operating results. The Company reviews goodwill for impairment, at the reporting unit level, annually on October 1 and whenever events or changes in circumstances indicate its carrying value may not be recoverable. In accordance with ASC 350, Intangibles - Goodwill and Other, goodwill is reviewed for impairment utilizing either a qualitative assessment or a quantitative process.
The Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. An entity has an unconditional option to bypass the qualitative assessment in any period and proceed directly to performing the quantitative impairment test, which is the option the Company has historically chosen.
For reporting units in which the Company performs the quantitative analysis, the Company compares the carrying value, including goodwill, of each reporting unit with its estimated fair value. If the fair value of the reporting unit exceeds its carrying value, the goodwill is not considered impaired. If the carrying value is greater than the fair value, the difference is recognized as an impairment loss charged to the reporting unit. After an impairment loss is recognized, the adjusted carrying amount of goodwill shall be its new accounting basis.
As of December 31, 2025, goodwill allocated to the Transportation Solutions (“TS”) and Parts & Services (“P&S”) segments was approximately $120.5 million and $70.7 million, respectively.
Long-Lived Assets.Long-lived assets, consisting primarily of intangible assets and property, plant, and equipment, are reviewed for impairment whenever facts and circumstances indicate that the carrying amount may not be recoverable. Specifically, this process involves comparing an asset’s carrying value to the estimated undiscounted future cash flows the asset is expected to generate over its remaining life. If this process were to result in the conclusion that the carrying value of a long-lived asset would not be recoverable, a write-down of the asset to fair value would be recorded through a charge to operations. Fair value is determined based upon discounted cash flows or appraisals as appropriate.
Other Assets.The Company capitalizes the cost of computer software developed or obtained for internal use. Capitalized software is amortized using the straight-line method over three to seven years. As of December 31, 2025 and 2024, the Company had software costs, net of amortization, of $13.7 million and $9.9 million, respectively. Amortization expense for 2025, 2024, and 2023 was $3.4 million, $3.4 million, and $1.9 million, respectively.
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The Company maintains life insurance policies on certain employees. These contracts are reported at their net cash surrender value, which represents the amount that would be realized upon surrender of the policies, determined by the insurer as the cash value minus any surrender charges or outstanding loans. As of December 31, 2025 and 2024, the Company had policy cash surrender values of $26.9 million and $22.4 million, respectively.
Warranties.The Company offers a limited warranty for its products with a coverage period that ranges between one and five years, except that the coverage period for DuraPlate® trailer panels is ten years. The Company passes through component manufacturers’ warranties to our customers. The Company’s policy is to accrue the estimated cost of warranty coverage at the time of the sale.
The following table presents the changes in the product warranty accrual included in Other accrued liabilities (in thousands):
Provision and revisions to estimates 2,703 2,581
Self-Insured Liabilities.The Company is self-insured up to specified limits for medical and workers’ compensation coverage. The self-insurance reserves have been recorded to reflect the undiscounted estimated liabilities, including claims incurred but not reported, as well as catastrophic claims as appropriate.
The following table presents the changes in the self-insurance accrual included in Other accrued liabilities (in thousands):
Income Taxes. The Company determines its provision or benefit for income taxes under the asset and liability method. The asset and liability method measures the expected tax impact at current enacted rates of future taxable income or deductions resulting from differences in the tax and financial reporting basis of assets and liabilities reflected in the Consolidated Balance Sheets. Future tax benefits of tax losses and credit carryforwards are recognized as deferred tax assets. Deferred tax assets are reduced by a valuation allowance to the extent management determines that it is more-likely-than-not the Company would not realize the value of these assets.
The Company accounts for income tax contingencies by prescribing a “more-likely-than-not” recognition threshold that a tax position is required to meet before being recognized in the financial statements.
Concentration of Credit Risk. Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash, cash equivalents, and customer receivables. We place our cash and cash equivalents with high quality financial institutions. Generally, we do not require collateral or other security to support customer receivables.
Research and Development.Research and development expenses are charged to Cost of sales and General and administrative expenses in the Consolidated Statements of Operations as incurred and were $5.9 million, $8.6 million, and $7.5 million in 2025, 2024, and 2023, respectively.
3. NEW ACCOUNTING PRONOUNCEMENTS
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which is intended to enhance the transparency, decision usefulness and effectiveness of income tax disclosures. The amendments in this ASU require a public entity to disclose a tabular tax rate reconciliation, using both percentages and currency, with specific categories. A public entity is also required to provide a qualitative description of the states and local jurisdictions that make up the majority of the effect of the state and local income tax category and the net amount of income taxes paid, disaggregated by federal, state and foreign taxes and also disaggregated by individual jurisdictions. The amendments also remove certain disclosures that are no longer considered cost beneficial. The amendments are effective prospectively for annual periods beginning after December 15, 2024, and retrospective application is permitted. The Company implemented these required income tax disclosures retrospectively.
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In November 2024, FASB issued ASU No. 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” which requires additional disclosure of the nature of expenses included in the consolidated financial statements. The effective date of this ASU is for annual periods beginning after December 15, 2026. The Company is evaluating the effect this guidance will have on the consolidated financial statements.
4. REVENUE RECOGNITION
The Company recognizes revenue from the sale of its products when obligations under the terms of a contract with our customers are satisfied; this occurs with the transfer of control of our products and replacement parts or throughout the completion of service work. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring promised goods or services to a customer and excludes all taxes collected from the customer. Shipping and handling fees are included in Net sales and the associated costs are included in Cost of sales in the Consolidated Statements of Operations. For shipping and handling costs that take place after the transfer of control, the Company applies the practical expedient and treats it as a fulfillment cost. Incidental items that are immaterial in the context of the contract are recognized as expense.
The Company has identified three separate and distinct performance obligations: (1) the sale of a trailer or equipment, (2) the sale of replacement parts, and (3) service work. For trailer, truck body, equipment, and replacement part sales, control is transferred and revenue is recognized from the sale upon shipment to or pick up by the customer in accordance with the contract terms. The Company does not have any material extended payment terms as payment is received shortly after the point of sale. Accounts receivable are recorded when the right to consideration becomes unconditional. The Company does have customers who pay for the product prior to the transfer of control, which is recorded as customer deposits in Other accrued liabilities as shown in Note 10. Customer deposits are recognized as revenue when the Company performs its obligations under the contract and transfers control of the product.
5. BUSINESS COMBINATIONS
Trailerhawk.AI, LLC
The Company accounts for acquisitions in accordance with guidance found in ASC 805, Business Combinations (“ASC 805”). The guidance requires consideration given, including contingent consideration, assets acquired, and liabilities assumed to be valued at their fair values at the acquisition date. The guidance further provides that: (1) acquisition costs will generally be expensed as incurred, (2) restructuring costs associated with a business combination will generally be expensed subsequent to the acquisition date; and (3) changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally will affect income tax expense. ASC 805 requires that any excess of purchase price over fair value of assets acquired, including identifiable intangibles and liabilities assumed, be recognized as goodwill.
On February 3, 2025, the Company acquired substantially all of the assets and certain of the liabilities of TrailerHawk.ai, LLC, a Delaware limited liability company (“Trailerhawk”), from Loadsmith Holding Corporation for an initial purchase price of $2.5 million less an allowance of $0.8 million for 2025 development activities, plus the release of $3.0 million and accrued interest of $0.1 million on convertible promissory notes, and contingent consideration related to the earnout liability as described below. Trailerhawk is an innovation leader leveraging artificial intelligence and telematics to create digital solutions that allow customers to protect trailer and cargo through the logistics chain. This investment is synergistic with our recurring revenue initiatives, particularly for our Linq Venture Holdings, LLC and Trailers as a Service (TaaS)SM offerings. Trailerhawk is included within the Parts and Services reportable segment. The acquisition agreement includes a purchase price adjustment clause that provides for the possibility of additional earnout payments of up to $15.0 million over a period of seven years after the closing date of the transaction based on certain profitability metrics as a percentage of revenue for each of the subsequent seven years from the acquisition.
The purchase accounting for the business combination was finalized in the fourth quarter of 2025, with identifiable intangible assets of software valued at $2.5 million, trademark intangibles of $0.3 million, goodwill of $2.8 million, and earnout liability of $1.2 million. The Goodwill from this transaction is deductible for tax purposes.
6. GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill and Related Annual Impairment Assessments
As of December 31, 2025, goodwill allocated to the Transportation Solutions (“TS”) and Parts & Services (“P&S”) segments was approximately $120.5 million and $70.7 million, respectively.
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During the fourth quarters of both 2025 and 2024, the Company chose to use a quantitative assessment to determine if it was more likely than not that the fair value of the TS and P&S reporting units were less than their respective carrying amounts. In accordance with the relevant accounting guidance, in order to perform the quantitative assessment, the Company considered many factors including, but not limited to, general economic conditions, industry and market conditions, financial performance and key business drivers, and future operating plans. Based on the analysis of the factors and considerations described above, the Company concluded that it was more likely than not that the fair value of each reporting unit continued to be greater than the respective carrying value. Therefore, no impairment charges were recorded.
For the years ended December 31, 2025, 2024, and 2023, the changes in the carrying amounts of goodwill were as follows (in thousands):
Transportation Solutions Parts & Services Total
Effects of foreign currency 20 12 32
Acquisition of Trailerhawk AI, LLC — 2,801 2,801
Effects of foreign currency (8) (12) (20)
Balance as of December 31, 2025
Intangible Assets
Intangible asset amortization expense was $11.2 million, $12.0 million, and $12.8 million for 2025, 2024, and 2023, respectively. Annual intangible asset amortization expense for the next 5 fiscal years is estimated to be $10.7 million in 2026; $10.2 million in 2027; $9.7 million in 2028; $9.3 million in 2029; and $8.9 million in 2030. As of December 31, 2025, the balances of intangible assets, other than goodwill, were as follows (in thousands):
As of December 31, 2024, the balances of intangible assets, other than goodwill, were as follows (in thousands):
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7. NONCONTROLLING INTEREST, VARIABLE INTEREST ENTITIES (“VIEs”) AND INVESTMENTS
VIEs & Consolidation
The Company consolidates those entities in which it has a direct or indirect controlling financial interest based on either the variable interest model (the “VIE model”) or the voting interest model (the “VOE model”).
VIEs are entities that, by design, either (i) lack sufficient equity to permit the entity to finance its activities without additional subordinated financial support from other parties, or (ii) have equity investors that do not have the ability to make significant decisions relating to the entity’s operations through voting rights, or do not have the obligation to absorb the expected losses, or do not have the right to receive the residual returns of the entity.
The primary beneficiary of a VIE is required to consolidate the assets and liabilities of the VIE. The primary beneficiary is the party that has both (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance; and (ii) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE through its interest in the VIE.
To assess whether the Company has the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, the Company considers all the facts and circumstances, including its role in establishing the VIE and its ongoing rights and responsibilities. This assessment includes identifying the activities that most significantly impact the VIE’s economic performance and identifying which party, if any, has power over those activities. In general, the parties that make the most significant decisions affecting the VIE (typically management and representation on the board of directors as well as control of the overall strategic direction of the entity) and have the right to unilaterally remove those decision-makers are deemed to have the power to direct the activities of a VIE.
To assess whether the Company has the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE, the Company considers all of its economic interests, which primarily include the obligation to absorb losses or fund expenditures or losses (if needed), that are deemed to be variable interests in the VIE. This assessment requires the Company to apply judgment in determining whether these interests, in the aggregate, are considered potentially significant to the VIE. Factors considered in assessing the significance include: the design of the VIE, including its capitalization structure; subordination of interests; payment priority; relative share of interests held across various classes within the VIE’s capital structure; and the reasons why the interests are held by the Company.
At the VIE’s inception, the Company determines whether it is the primary beneficiary and if the VIE should be consolidated based on the facts and circumstances. The Company then performs on-going reassessments of the VIE based on reconsideration events and reevaluates whether a change to the consolidation conclusion is required each reporting period. If the Company is not deemed to be the primary beneficiary in a VIE, the Company accounts for the investment or other variable interests in a VIE in accordance with the applicable GAAP.
Entities that do not qualify as a VIE are assessed for consolidation under the VOE model. Under the VOE model, the Company consolidates the entity if it determines that it, directly or indirectly, has greater than 50% of the voting shares and that other equity holders do not have substantive voting, participating or liquidation rights. The Company has no entities consolidated under the VOE model.
At each reporting period, the Company reassesses whether it remains the primary beneficiary for VIEs consolidated under the VIE model.
If the Company concludes it is not the primary beneficiary of a VIE, the Company evaluates whether it has the ability to exercise significant influence over operating and financial policies of the entity requiring the equity method of accounting. The Company’s judgment regarding the level of influence over an equity method investment includes, but is not limited to, considering key factors such as the Company’s ownership interest (generally represented by ownership of at least 20 percent but not more than 50 percent), representation on the board of directors, participation in policy making decisions, technological dependency, and material intercompany transactions. Generally, under the equity method, investments are recorded at cost and subsequently adjusted by the Company’s share of equity in income or losses after the date of the initial investment. Equity in income or losses is recorded according to the Company’s level of ownership; if losses accumulate, the Company records its share of losses until the investment has been fully depleted. If the Company’s investment has been fully depleted, the Company recognizes additional losses only when it is committed to provide further financial support. Dividends received from equity method reduce the amount of the Company’s investment when received and do not impact the Company’s earnings. The Company evaluates its equity method investments for an other-than-temporary impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable.
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Linq Venture Holdings LLC
During the fourth quarter of 2023, the Company continued to unify and expand its parts and services capabilities and ecosystem by executing an agreement with a partner to create Linq Venture Holdings LLC, (“Linq”). Linq aims to develop and scale a digital marketplace in and for the transportation and logistics distribution industry. It intends to serve as the digital channel for marketing Wabash equipment and parts & services, as well as non-Wabash parts & services, in a digital marketplace format to end-customers as well as dealers.
The Company held 49% ownership of the membership units in Linq while its partner held 51%. Initial capital contributions to Linq were in proportion to the respective ownership interests, with the Company contributing approximately $2.5 million and its partner’s contribution was approximately $2.6 million. At its formation, Linq had no debt or other financial obligations beyond typical operating expenses. Creditors of Linq do not have recourse to the general credit of the Company. The operating agreement requires excess cash distributions, as defined in the agreement, no later than 30 days after the end of the second and fourth quarters of each year, in proportion to the respective ownership interests.
The operating agreement provided the Company’s partner with put rights that would require the Company to purchase its partner’s interest in Linq. In addition, the operating agreement provided the Company with call rights that would allow it to purchase its partner’s interest in Linq. These put and call rights vary depending upon when they may be exercised, which is generally from formation of Linq up to and including the seven-year anniversary of formation. Upon receiving notice that the Company’s partner has exercised the put right or the Company has exercised the call right, a valuation will occur as stipulated within the operating agreement. On October 1, 2025, the Company delivered notice of the Company’s exercise of a call right to its partner (the “Exercise Notice”). The Exercise Notice provides for the Company’s purchase of its partner’s entire equity position in Linq, at an aggregate purchase price of $6.4 million and the forgiveness of the loan receivable for amounts borrowed under the Wabash Notes and closed on January 1, 2026. See Note 24 (Subsequent Events) for additional information.
Because Linq does not have sufficient equity at risk to permit it to carry on its activities without additional financial support, the Company concluded that Linq is a VIE. The Company had the ability to significantly influence the activities of Linq through minority representation on the Board of Directors as well as through participation in certain management and strategic decisions of Linq. The Company’s partner was responsible for the overall development and management of the digital marketplace, the primary purpose for which Linq was formed. Both the Company and its partner had a requirement to provide funding to Linq if needed.
As part of the formation of Linq, the Company executed a credit agreement with Linq, providing a $10.0 million revolving line of credit (the “Wabash Note”) with a 7% simple accrued interest rate, paid quarterly. During the fourth quarter of 2024, an additional $15 million Wabash Note was approved by the Board of Directors, increasing the revolving line of credit to $25 million. The commitment under the Wabash Note may be increased to $35.0 million subject to the approval of the Board of Directors as stipulated in the operating agreement. In the years ended December 31, 2025 and 2024, $18.9 million and $11.1 million, respectively was borrowed under the Wabash Notes and as of December 31, 2025 and December 31, 2024, there was $30.0 million and $11.1 million, respectively outstanding. Interest income resulting from the Wabash Note for the years ended December 31, 2025 and 2024 was $1.4 million and $0.4 million, respectively. Interest income under the Wabash Note is included in Other, net in the Company’s Consolidated Statements of Operations. The Company did not provide financial or other support to Linq that it was not contractually obligated to provide.
Given the facts and circumstances specific to Linq, as of December 31, 2025, the Company concluded that it is not the primary beneficiary of this VIE. However, the Company had the ability to exercise significant influence over the operating and financial policies of Linq. The Company’s maximum exposure to loss in this unconsolidated VIE is limited to the Company’s initial capital contribution and any amounts borrowed under the Wabash Note. The partner’s put right did not have a standalone value as it was based upon a fair value calculation when exercised, as stipulated in the operating agreement.
The Company’s equity method investment in Linq is recorded in Investment in unconsolidated entity on its Consolidated Balance Sheets. Any amounts borrowed under the Wabash Note are recorded in Other assets on the Company’s Consolidated Balance Sheets. Linq is considered operationally integral. The Company’s share of the results from its equity method investment is included in Loss from unconsolidated entity in the Consolidated Statements of Operations.
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The following table is a rollforward of activities related to the Company’s equity method investment (in thousands):
Balance at January 1 $ — $ 1,647
Loss from unconsolidated entity (1,842) (1,486)
Equity deficit applied to note (1) 1,842 —
Loss from unconsolidated entity (2,203) (1,415)
Equity deficit applied to note (1) 2,203 1,254
Balance at June 30 — —
Loss from unconsolidated entity (1,845) (1,676)
Equity deficit applied to note (1) 1,845 1,676
Balance at September 30 — —
Loss from unconsolidated entity (1,092) (1,512)
Equity deficit applied to note (1) 1,092 1,512
Balance at December 31 $ — $ —
(1) As the Company is not required to advance additional funds to Linq, excess losses beyond its initial investment have been recorded against the basis of its other investments in Linq, which is comprised of the loan receivable for amounts borrowed under the Wabash Note.
Wabash Parts LLC
During the second quarter of 2022, the Company unified and expanded its parts and distribution capabilities by executing an agreement with a partner to create (Wabash Parts LLC, “WP”) to operate a parts and services distribution platform. The Company holds 50% ownership in WP while its partner holds the remaining 50%. Initial capital contributions were insignificant. WP has no debt or other financial obligations other than typical operating expenses and costs. Creditors of WP do not have recourse to the general credit of the Company. The operating agreement requires excess cash distributions, as defined in the agreement, no later than 30 days after the end of the second and fourth quarters of each year in proportion to the respective ownership interests.
The operating agreement provides the Company’s partner with a put right that would require the Company to purchase its partner’s interest in WP. Upon receiving notice that the Company’s partner has exercised the put right, a valuation will occur as stipulated within the operating agreement. Such put right has not been exercised by the Company’s partner and is therefore not mandatorily redeemable as of the current period end date, however the existence of the put right that is beyond the Company’s control requires the noncontrolling interest to be presented in the temporary equity section of the Company’s Consolidated Balance Sheets.
Because the entity does not have sufficient equity at risk to permit it to carry on its activities without additional financial support, the Company concluded that WP is a VIE. The Company has the power to direct the activities of WP through majority representation on the Board of Directors as well as control related to the management and overall strategic direction of the entity. In addition, the Company has the obligation to absorb the benefits and losses of WP that could potentially be significant to the entity. The Company also has a requirement to provide funding to the entity if needed. Given the facts and circumstances specific to WP, the Company concluded that it is the primary beneficiary and, as such, is required to consolidate the entity. WP’s results of operations are included in the Parts & Services operating and reportable segment. Through December 31, 2025, the Company did not provide financial or other support to this VIE that it was not contractually obligated to provide. As of December 31, 2025, the Company does not have any obligations to provide financial support to WP.
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The following table presents the assets and liabilities of the WP VIE consolidated on the Company’s Consolidated Balance Sheets as of December 31, 2025 and December 31, 2024 (in thousands):
Assets
Current assets:
Cash and cash equivalents $ 2,455 $ 4,131
Inventories, net 5 30
Prepaid expenses and other 177 7
Liabilities
Current liabilities:
Other accrued liabilities 27 29
The following table is a rollforward of activities in the Company’s noncontrolling interest (in thousands):
Net income attributable to noncontrolling interest 188 996 603
Distributions declared to noncontrolling interest — (603) (512)
UpLabs Ventures, LLC
During the third quarter of 2024, the Company established a collaborative framework with UpLabs Ventures, LLC to identify, design, incubate, develop, and launch new businesses (Portfolio Companies) in the mobility and digital solutions sector. This partnership aims to leverage the strengths of both parties to create innovative solutions and new market opportunities. The agreement includes detailed provisions for investment, equity sharing, intellectual property, revenue recognition, indemnification, purchase options, governance, and terminations, ensuring a structured and mutually beneficial partnership.
The Company’s initial capital investment in the fourth quarter of 2024, was $6.0 million to launch venture labs aimed at providing solutions that optimize customer end-to-end supply chains across transportation, logistics and infrastructure markets. The $6.0 million nonrefundable investment covered the 2025 contract period. An additional $6.0 million nonrefundable investment for the 2026 contract period will be paid in the first quarter of 2026. The cost method investment is recorded in Other assets on the Company’s Consolidated Balance Sheets.
Additionally, for each contract year of the collaboration during the term, the Company will pay fees in the amount of 2% of the investment amount, inclusive of any inflation adjustments and expenses of $0.5 million, subject to equivalent upward inflation adjustment based on the Consumer Price Index, compounded annually. For the 2025 contract year, the Company paid fees and expenses totaling $0.6 million.
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8. INVENTORIES
Inventories, net of reserves, consist of the following (in thousands):
December 31,
9. PROPERTY, PLANT, AND EQUIPMENT
Depreciation expense on property, plant, and equipment, which is recorded in Cost of sales and General and administrative expenses in the Consolidated Statements of Operations, as appropriate, was $47.6 million, $45.0 million, and $32.5 million in 2025, 2024, and 2023, respectively.
See Note 22 for information related to property, plant, and equipment sales and impairment charges.
Property, plant, and equipment, net consist of the following (in thousands):
December 31,
10. OTHER ACCRUED LIABILITIES
The following table presents the major components of Other accrued liabilities (in thousands):
December 31,
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11. LONG-TERM DEBT
Long-term debt consists of the following (in thousands):
Revolving Credit Agreement 45,000 —
Less: unamortized discount and fees (2,148) (2,858)
Less: current portion — —
Senior Notes
On October 6, 2021, the Company 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 the Company, certain subsidiary guarantors named therein (the “Guarantors”) and Computershare Trust Company, N.A., 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.
The Company may redeem some or all of the Senior Notes at redemption prices (expressed as percentages of principal amount) equal to 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 the Company has exercised its optional redemption right in respect of the Senior Notes, the holders of the Senior Notes will have the right to require the Company 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.
The Senior Notes are guaranteed on a senior unsecured basis by all direct and indirect existing and future domestic restricted subsidiaries, subject to certain restrictions. The Senior Notes and related guarantees are the Company’s and the Guarantors’ general unsecured senior obligations and will be subordinated to all of the Company and the Guarantors’ existing and future secured debt to the extent of the assets securing that secured obligation. In addition, the Senior Notes are structurally subordinated to any existing and future debt of any of the Company’s subsidiaries that are not Guarantors, to the extent of the assets of those subsidiaries.
Subject to a number of exceptions and qualifications, the Indenture restricts the Company’s ability and the ability of certain of its subsidiaries to: (i) incur additional indebtedness; (ii) pay dividends or make other distributions in respect of, or repurchase or redeem, its capital stock or with respect to any other interest or participation in, or measured by, its profits; (iii) make loans and certain investments; (iv) sell assets; (v) create or incur liens; (vi) enter into transactions with affiliates; and (vii) consolidate, merge or sell all or substantially all of its assets. These covenants are subject to a number of important exceptions and qualifications.
During any time when the Senior Notes are rated investment grade by at least two of Moody’s, Fitch and Standard & Poor’s Ratings Services and no Default (as defined in the Indenture) has occurred and is continuing, many of such covenants will be suspended and the Company and its subsidiaries will cease to be subject to such covenants during such period.
The Indenture contains customary events of default, including payment defaults, breaches of covenants, failure to pay certain judgments and certain events of bankruptcy, insolvency and reorganization. If an event of default occurs and is continuing, the principal amount of the Senior Notes, plus accrued and unpaid interest, if any, may be declared immediately due and payable. These amounts automatically become due and payable if an event of default relating to certain events of bankruptcy, insolvency or reorganization occurs. As of December 31, 2025, the Company was in compliance with all covenants.
From time to time the Company may evaluate various alternatives available with respect to addressing the October 2028 maturity of the Senior Notes, including the purchase, redemption, refinancing, amending, exchanging, extending or otherwise retiring any amount of our outstanding indebtedness at any time, in open market or privately negotiated transactions with the holders of such indebtedness or otherwise. No final decisions have been made at this time, and the timing, structure and terms of any such transactions will depend on capital market conditions and other relevant factors.
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Contractual coupon interest expense and accretion of fees for the Senior Notes for the years ended December 31, 2025, 2024 and 2023 were $18.0 million and $0.7 million, $18.0 million and $0.7 million, and $18.0 million and $0.6 million, respectively. Contractual coupon interest expense and accretion of fees for the Senior Notes are included in Interest expense on the Company’s Consolidated Statements of Operations.
Revolving Credit Agreement
On September 23, 2022, the Company entered into the Third Amendment to the Second Amended and Restated Credit Agreement among the Company, certain of its subsidiaries as borrowers (together with the Company, the “Borrowers”), certain of its subsidiaries as guarantors, the lenders party thereto, and Wells Fargo Capital Finance, LLC, as the administrative agent (the “Agent”), which amended the Company’s existing Second Amended and Restated Credit Agreement, dated as of December 21, 2018 (as amended from time to time, the “Revolving Credit Agreement”).
Under the Revolving Credit Agreement, the lenders agree to make available a $350 million revolving credit facility to the Borrowers with a scheduled maturity date of September 23, 2027. The Company has the option to increase the total commitments under the facility by up to an additional $175 million, subject to certain conditions, including obtaining agreements from one or more lenders, whether or not party to the Revolving Credit Agreement, to provide such additional commitments. Availability under the Revolving Credit Agreement is based upon quarterly (or more frequent under certain circumstances) borrowing base certifications of the Borrowers’ eligible inventory, eligible leasing inventory and eligible accounts receivable, and is reduced by certain reserves in effect from time to time.
Subject to availability, the Revolving Credit Agreement provides for a letter of credit subfacility in the amount of $25 million, and allows for swingline loans in the amount of $35 million. Outstanding borrowings under the Revolving Credit Agreement bear interest at an annual rate, at the Borrowers’ election, equal to (i) adjusted term Secured Overnight Financing Rate 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. The Borrowers 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 the Agent and the lenders.
The Revolving Credit Agreement is guaranteed by certain subsidiaries of the Company (the “Guarantors”) and is secured by substantially all personal property of the Borrowers and the Guarantors.
The Revolving Credit Agreement contains customary covenants limiting the ability of the Company and certain of its subsidiaries to, among other things, pay cash dividends, incur debt or liens, redeem or repurchase stock, enter into transactions with affiliates, merge, dissolve, repay subordinated indebtedness, make investments and dispose of assets. In addition, the Company will be required to maintain a minimum fixed charge coverage ratio of not less than 1.0 to 1.0 as of the end of any period of 12 fiscal months when excess availability under the Revolving Credit Agreement is less than the greater of (a) 10% of the lesser of (i) the total revolving commitments and (ii) the borrowing base (such lesser amount, the “Line Cap”) and (b) $25 million. As of December 31, 2025, the Company was in compliance with all covenants.
If availability under the Revolving Credit Agreement is less than the greater of (i) 10% of the Line Cap and (ii) $25 million for three consecutive business days, or if there exists an event of default, amounts in any of the Borrowers’ and the Guarantors’ deposit accounts (other than certain excluded accounts) will be transferred daily into a blocked account held by the Agent and applied to reduce the outstanding amounts under the facility.
The Revolving Credit Agreement contains customary events of default. If an event of default occurs and is continuing, the lenders may, among other things, require the immediate payment of all amounts outstanding and foreclose on collateral. In addition, in the case of an event of default arising from certain events of bankruptcy or insolvency, the lenders’ obligations under the Revolving Credit Agreement would automatically terminate, and all amounts outstanding under the Revolving Credit Agreement would automatically become due and payable.
During the year ended December 31, 2025, the Company had payments of principal totaling $82.4 million and borrowings of principal totaling $127.4 million under the Revolving Credit Agreement. As of December 31, 2025, there was $45.0 million outstanding.
During the year ended December 31, 2024, the Company had payments of principal totaling $0.9 million and borrowings of principal totaling $0.9 million under the Revolving Credit Agreement. As of December 31, 2024, there were no amounts outstanding.
Interest expense under the Revolving Credit Agreement for the years ended December 31, 2025, 2024, and 2023, was approximately $2.3 million, $0.8 million, and $0.9 million, respectively. Interest expense under the Revolving Credit Agreement is included in Interest expense on the Company’s Consolidated Statements of Operations.
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12. FINANCIAL DERIVATIVE INSTRUMENTS
Commodity Pricing Risk
The Company was party to commodity swap contracts for specific commodities with notional amounts of approximately $21.5 million as of December 31, 2025 and $15.0 million as of December 31, 2024. The Company uses commodity swap contracts to mitigate the risks associated with fluctuations in commodity prices impacting its cash flows related to inventory purchases from suppliers. The Company does not hedge all commodity price risk.
At inception, the Company designated the commodity swap contracts as cash flow hedges. The contracts mature at specified monthly settlement dates and will be recognized into earnings through November 2026. The effective portion of the hedging transaction is recognized in Accumulated Other Comprehensive Income (Loss) (“AOCI”) and transferred to earnings when the forecasted hedged transaction takes place or when the forecasted hedged transaction is no longer probable to occur.
Financial Statement Presentation
As of December 31, 2025 and 2024, the fair value carrying amount of the Company’s derivative instruments were recorded as follows (in thousands):
Asset / (Liability) Derivatives
Derivatives designated as hedging instruments
Commodity swap contracts Prepaid expenses and other $ 1,422 $ 163
Total derivatives designated as hedging instruments $ 1,396 $ (136)
The following table summarizes the gain or loss recognized in AOCI as of December 31, 2025 and 2024 and the amounts reclassified from AOCI into earnings for the years ended December 31, 2025, 2024, and 2023 (in thousands):
Year Ended December 31,
Derivatives instruments
Within the next 12 months, the Company expects to reclassify approximately $1.1 million of pretax deferred gains related to the commodity swap contracts from AOCI to cost of sales as inventory purchases are settled.
13. LEASES
Lessee Activities
The Company records a right-of-use ("ROU") asset and lease liability for substantially all leases for which it is a lessee, in accordance with ASC 842. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company recognizes lease expense for leases on a straight-line basis over the lease term. At inception of a contract, the Company considers all relevant facts and circumstances to assess whether or not the contract represents a lease by determining whether or not the contract conveys the right to control the use of an identified asset, either explicit or implicit, for a period of time in exchange for consideration.
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The Company leases certain industrial spaces, office space, land, and equipment. Some leases include one or more options to renew, with renewal terms that can extend the lease term from generally one to 5 years. The exercise of lease renewal options is at the Company’s sole discretion, and are included in the lease term only to the extent such renewal options are reasonably certain of being exercised upon lease commencement. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term unless there is a transfer of title or purchase option reasonably certain of exercise. Leased assets obtained in exchange for new operating lease liabilities during the year ended December 31, 2025 and December 31, 2024 were approximately $12.1 million and $13.2 million, respectively. As of December 31, 2025, obligations related to leases that the Company has executed but have not yet commenced were insignificant.
Leased assets and liabilities included within the Consolidated Balance Sheets consist of the following (in thousands):
Right-of-Use Assets
Liabilities
Current
Operating Other accrued liabilities $ 13,319 $ 11,782
Noncurrent
Operating Other non-current liabilities 23,184 24,641
Lease costs included in the Consolidated Statements of Operations consist of the following (in thousands):
Maturity of the Company’s lease liabilities for leases that have commenced is as follows (in thousands):
Operating Leases Total
Present value of lease payments $ 36,503
As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Remaining lease term and discount rates are as follows:
Weighted average remaining lease term (years)
Operating leases 3.4 3.5
Weighted average discount rate
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Lease costs included in the Consolidated Statements of Cash Flows are as follows (in thousands):
Twelve Months Ended December 31, 2025 Twelve Months Ended December 31, 2024
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases $ 15,222 $ 12,130
Lessor and Sublessor Activities
The Company leases dry van trailers to customers under full-service lease agreements and operating lease agreements. At the inception of a contract, in accordance with the applicable accounting guidance (ASC 842, Leases) the Company considers whether the arrangement contains a lease and, as applicable, performs the required lease classification tests. The Company, as a lessor, has no material sales-type or direct financing lease arrangements as of December 31, 2025.
The Company’s full-service lease agreements are an integrated service that include lease component amounts related to the use of the trailer, as well as non-lease components for preventative maintenance, certain repairs as defined in the related agreement, and ad valorem taxes. In accordance with the applicable accounting guidance (ASC 842, Leases), the Company has elected to combine lease and non-lease components when reporting revenue for the full-service underlying class of leased assets.
Initial lease terms are generally three to five years. Certain of the Company’s leases provide customers with renewal options that provide the ability to extend the lease term for a period of generally one to five years. In addition, some leases include options for the customer to purchase the trailers at fair market value, as determined by the Company at or near the end of the lease. The Company’s lease agreements generally do not have residual value guarantees nor permit customers to terminate the lease agreements prior to natural expiration. As stipulated in the lease agreements, the Company may receive reimbursements from customers for certain damage or required repairs to the trailers. We expect to derive an immaterial amount from the underlying assets following the end of the respective lease terms.
During the year ended December 31, 2022, the Company entered into sale-leaseback-sublease transactions. Such contracts were entered into in contemplation of each other and are thus recorded on a net basis. The net revenue from these contracts was insignificant for all periods presented but such revenue is included in the tables below.
Certain of the Company’s leases and subleases are with a related party—such transactions were at market value and entered into at arm’s length.
Lease income is included in Net sales on the Company’s Consolidated Statements of Operations and is recorded in the P&S operating segment. For the twelve months ended December 31, 2025 and 2024, the Company’s lease income consisted of the following components (in thousands):
Twelve Months Ended December 31, 2025 Twelve Months Ended December 31, 2024
Operating lease income
Variable lease income — —
—————————
(1) As noted above, net revenue related to subleases was insignificant for all periods presented but such revenue is included in the tables above.
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The following table shows the Company’s future contractual receipts from noncancelable operating leases for the years ended December 31 as of December 31, 2025 (in thousands):
Operating Leases(1)
Thereafter —
Total contractual receipts $ 5,167
—————————
(1) The future contractual receipts due under the Company’s full-service operating leases include amounts related to preventative maintenance, certain repairs as defined in the related agreements, and ad valorem taxes. Net revenue related to the Company’s subleases are also included in the table above.
The leased trailers are recorded on the Company’s Consolidated Balance Sheets within Other assets at cost, net of accumulated depreciation. Depreciation is recorded using the straightline method over the estimated useful lives of the trailers, which is generally 12 years. Revenue generating assets, net consists of the following (in thousands):
Less: accumulated depreciation (3,694) (746)
Revenue generating assets, net $ 52,196 $ 6,711
14. FAIR VALUE MEASUREMENTS
The Company’s fair value measurements are based upon a three-level valuation hierarchy. These valuation techniques are based upon the transparency of inputs (observable and unobservable) to the valuation of an asset or liability as of the measurement date. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs create the following fair value hierarchy:
▪Level 1 — Valuation is based on quoted prices for identical assets or liabilities in active markets;
▪Level 2 — Valuation is based on quoted prices for similar assets or liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for the full term of the financial instrument; and
▪Level 3 — Valuation is based upon other unobservable inputs that are significant to the fair value measurement.
Recurring Fair Value Measurements
The Company maintains a non-qualified deferred compensation plan which is offered to senior management and other key employees. The amount owed to participants is an unfunded and unsecured general obligation of the Company. Participants are offered various investment options with which to invest the amount owed to them, and the plan administrator maintains a record of the liability owed to participants by investment. To minimize the impact of the change in market value of this liability, the Company has elected to purchase a separate portfolio of investments through the plan administrator similar to those chosen by the participant.
These investments purchased by the Company include mutual funds, which are classified as Level 1. An additional pool of investments is made by a wholly owned captive insurance subsidiary. These investments are also comprised of mutual funds and classified as Level 1.
The fair value of the Company’s derivatives is estimated with a market approach using third-party pricing services, which have been corroborated with data from active markets or broker quotes.
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Fair value measurements and the fair value hierarchy level for the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 and 2024 are shown below (in thousands):
Commodity swap contracts Recurring $ 1,396 $ — $ 1,396 $ —
Commodity swap contracts Recurring $ (136) $ — $ (136) $ —
Life-insurance contracts Recurring $ 22,358 $ — $ 22,358 $ —
Estimated Fair Value of Debt
The estimated fair value of debt at December 31, 2025 consists of the Senior Notes (see Note 11). The interest rates on the Company’s borrowings under the Revolving Credit Agreement are adjusted regularly to reflect current market rates and thus carrying value approximates fair value for any borrowings. The fair value of the Senior Notes as of December 31, 2025 and 2024 are based upon third party pricing sources, which generally do not represent daily market activity or represent data obtained from an exchange, and are classified as Level 2.
The Company’s carrying and estimated fair value of debt at December 31, 2025 and December 31, 2024 were as follows (in thousands):
Fair Value Fair Value
CarryingValue Level 1 Level 2 Level 3 CarryingValue Level 1 Level 2 Level 3
Instrument
Revolving Credit Agreement 45,000 — 45,000 — — — — —
The fair value of debt is based on current public market prices for disclosure purposes only. Unrealized gains or losses are not recognized in the financial statements as long-term debt is presented at carrying value, net of any unamortized premium or discount and unamortized deferred financing costs in the consolidated financial statements.
15. COMMITMENTS AND CONTINGENCIES
a. Litigation
As of December 31, 2025, the Company was named as a defendant or was otherwise involved in numerous legal proceedings and governmental examinations, including class action lawsuits, in connection with the conduct of its business activities, in various jurisdictions, both in the United States and internationally. Accruals for losses have been recorded in accordance with GAAP. Based on the information currently available, management does not believe that existing proceedings and investigations will have a material impact on our consolidated financial condition or liquidity if determined in a manner adverse to the Company except as otherwise described below. However, such matters are unpredictable, and we could incur judgments or enter into settlements for current or future claims that could materially and adversely affect our financial statements. Costs associated with the litigation and settlements of legal matters are reported within General and administrative expenses in the Consolidated Statements of Operations.
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Legal Matter Estimated Liability
The Company has been named as a defendant in California state court in a purported class action lawsuit, alleging wage and hour claims under California-specific employment laws (“Pending Class Action”). During the fourth quarter of 2025, in accordance with ASC 450, the Company concluded a liability related to the Matters was probable and estimable. As such, an estimated liability of $0.7 million was included in General & administrative expenses in the Consolidated Statements of Operations for the year ended December 31, 2025. During the fourth quarter of 2025, the Company reached an agreement to resolve the Pending Class Action via settlement for an amount materially consistent with the estimated liability. The court continues to evaluate the settlement agreement, so the matter remains open until the agreement is approved by the court and satisfied.
Product Liability Claims
The Company is and has been, and may in the future be, subject to product liability claims and litigation incidental to the Company’s normal operating activities. On October 9, 2025, the Company finalized a settlement (the “Settlement”) with the plaintiffs in a lawsuit, Eileen Williams, Elizabeth Perkins, et al. v. Wabash National Corporation, et al., filed in the Circuit Court of the City of St. Louis, Missouri (the “Product Liability Matter”), in which the Company was named as co-defendant. The Product Liability Matter related to a vehicle accident that resulted in two fatalities following a rear-end collision by a passenger vehicle with an unobstructed view which struck the back of a nearly stopped tractor-trailer owned and operated by co-defendant GDS Express Inc.
The Settlement was covered by insurance, other than a $30 million contribution made by the Company. In 2025, the Company, after taking into account the insurance coverage, recognized an $418.6 million gain as a reduction to the $450 million charge taken in 2024, as previously reported within General and Administrative expenses in the Company’s Consolidated Statements of Operation. In addition, the Company paid a total of $4.6 million for bond and contingent penalty interest expenses in 2025
As previously disclosed in the Company’s filings with the SEC, on September 5, 2024, a jury awarded compensatory damages of $12.0 million and punitive damages of $450 million against the Company in the Product Liability Matter. On November 22, 2024, applying an offset related to the plaintiff’s settlement with a separate defendant, the Circuit Court entered judgment in the Product Liability Matter consisting of compensatory damages of $11.5 million and punitive damages of $450 million. On March 20, 2025, the Circuit Court determined that the punitive damage award in the Product Liability Matter did not comport with the Company’s constitutional rights. Accordingly, the Circuit Court ordered the punitive damages award reduced to $108 million with the compensatory damages award remaining at $11.5 million (collectively, the “Adjusted Award”).
The evidence in the Product Liability Matter was undisputed that the trailer fully complied with all applicable regulations. Despite precedent to the contrary, the jury was prevented from hearing critical evidence in the case, including that the driver’s blood alcohol level was over the legal limit at the time of the accident and the fact that neither the driver nor the passenger was wearing a seatbelt.
The Settlement does not constitute an admission of liability or wrongdoing by the Company. The Product Liability Matter is now closed.
Environmental Disputes
In August 2014, the Company received notice as a potentially responsible party (“PRP”) by the South Carolina Department of Health and Environmental Control (the “DHEC”) pertaining to the Philip Services Site located in Rock Hill, South Carolina pursuant to the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) and corresponding South Carolina statutes. PRPs include parties identified through manifest records as having contributed to deliveries of hazardous substances to the Philip Services Site between 1979 and 1999. The DHEC’s allegation that the Company was a PRP arises out of four manifest entries in 1989 under the name of a company unaffiliated with Wabash National Corporation (or any of its former or current subsidiaries) that purport to be delivering a de minimis amount of hazardous waste to the Philip Services Site “c/o Wabash National Corporation.” As such, the Philip Services Site PRP Group (the “PRP Group”) notified Wabash in August 2014 that it was offering the Company the opportunity to resolve any liabilities associated with the Philip Services Site by entering into a Cash Out and Reopener Settlement Agreement (the “Settlement Agreement”) with the PRP Group, as well as a Consent Decree with the DHEC. The Company has accepted the offer from the PRP Group to enter into the Settlement Agreement and Consent Decree, while reserving its rights to contest its liability for any deliveries of hazardous materials to the Philips Services Site. The requested settlement payment is immaterial to the Company’s financial condition and results of operations, and as a result, if the Settlement Agreement and Consent Decree are finalized, the payment to be made by the Company thereunder is not expected to have a material adverse effect on the Company’s financial condition or results of operations.
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On November 13, 2019, the Company received a notice that it was considered one of several PRPs by the Indiana Department of Environmental Management (“IDEM”) under CERCLA and state law related to substances found in soil and groundwater at a property located at 817 South Earl Avenue, Lafayette, Indiana (the “Site”). The Company has never owned or operated the Site, but the Site is near certain of the Company’s owned properties. In 2020, the Company agreed to implement a limited work plan to further investigate the source of the contamination at the Site and worked with IDEM and other PRPs to finalize the terms of the work plan. The Company submitted its initial site investigation report to IDEM during the third quarter of 2020, indicating that the data collected by the Company’s consultant confirmed that the Company’s properties are not the source of contamination at the Site. In December 2021, after completing further groundwater sampling work, the Company submitted to IDEM a supplemental written report, which again stated that the Company is not a responsible party and the Company’s properties are not a source of any contamination. In June 2022, the Company and other PRPs finalized Work Plan Addendum No. 3, which provided for additional groundwater sampling on another PRP property. The Company completed all additional sampling and submitted supplemental reports to IDEM as of the first quarter of 2024. All available information and reports establish there is no source of any contamination on the Company’s owned properties. As of December 31, 2025, based on the information available, the Company does not expect this matter to have a material adverse effect on its financial condition or results of operations.
On December 1, 2025, the Company received a notice that it was considered one of several PRP’s by the Environmental Protection Agency (“EPA”) under CERCLA pertaining to the Motorola, Inc. 52nd Street Superfund Site in Maricopa, Arizona. The Superfund Site is divided into three operable units (“OUs"). The EPA’s allegation that the Company was a PRP arises out of the Company’s acquisition of a former branch facility located approximately five miles from the original Superfund Site. The Company acquired this facility in 1997, operated the facility until 2000, and sold the facility to a third party in 2002. In June 2010, the Company was contacted by the Roosevelt Irrigation District (“RID”) informing it that the Arizona Department of Environmental Quality (“ADEQ”) had approved a remediation plan in excess of $100 million for the RID portion of the Superfund Site, and demanded that the Company contribute to the cost of the plan or be named as a defendant in a CERCLA action to be filed in July 2010. The Company initiated settlement discussions with the RID and the ADEQ in July 2010 to provide a full release from the RID, and a covenant not-to-sue and contribution protection regarding the former branch property from the ADEQ, in exchange for payment from the Company. In May 2016, the Company, the ADEQ and the RID executed the originally proposed settlement agreements and, following a statutorily required 30-day public comment period, the settlement agreements were finalized and the Company paid $0.2 million, which had been accrued by the Company since 2010. ADEQ is the lead agency for OU1 and OU2 of the Superfund Site, while EPA is the lead agency for OU3. In October 2025, EPA finalized a Record of Decision for a final remedy for OU3, in which it approved a remediation plan for targeted in-situ injection and monitored attenuation, with an estimated cost of $12.9 million as to all relevant parties. As of December 31, 2025, based on the information available, the Company does not expect this matter to have a material adverse effect on its financial condition or results of operations.
b. Environmental Litigation Commitments and Contingencies
The Company generates and handles certain material, wastes and emissions in the normal course of operations that are subject to various and evolving federal, state and local environmental laws and regulations.
The Company assesses its environmental liabilities on an on-going basis by evaluating currently available facts, existing technology, presently enacted laws and regulations as well as experience in past treatment and remediation efforts. Based on these evaluations, the Company estimates a lower and upper range for treatment and remediation efforts and recognizes a liability for such probable costs based on the information available at the time. As of December 31, 2025, the Company had reserved an insignificant amount for estimated remediation costs for activities at existing and former properties which are recorded within Other accrued liabilities on the Consolidated Balance Sheets.
c. Letters of Credit
As of December 31, 2025, the Company had standby letters of credit totaling $5.6 million issued in connection with workers compensation claims and surety bonds.
d. Purchase Commitments
The Company had $21.5 million in purchase commitments at December 2025 for various raw material commodities, including aluminum, steel, nickel, and polyethylene, as well as other raw material components which are within normal production requirements.
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e. Chassis Converter Pool Agreements
The Company obtains vehicle chassis for its specialized vehicle products directly from the chassis manufacturers under converter pool agreements. Chassis are obtained from the manufacturers based on orders from customers, and in some cases, for unallocated orders. The agreements generally state that the manufacturer will provide a supply of chassis to be maintained at the Company’s 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. In addition, the manufacturer typically retains 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 the Company nor permit the Company to sell or transfer the chassis to anyone other than the manufacturer (for ultimate resale to a dealer). Although the Company is party to related finance agreements with manufacturers, the Company has not historically settled, nor expects 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 December 31, 2025, the Company’s outstanding chassis converter pool with the manufacturer totaled $59.6 million and has included this financing agreement on the Company’s Consolidated Balance Sheets within Other accrued liabilities. Typically, chassis are converted and delivered to customers within 90 days of the receipt of the chassis by the Company.
16. NET INCOME (LOSS) PER SHARE OF COMMON STOCK
Basic earnings per share is calculated based on the weighted average number of common shares outstanding during the period. Diluted earnings per share is determined based on the weighted average number of common shares outstanding during the period combined with the incremental average common shares that would have been outstanding assuming the conversion of all potentially dilutive common shares into common shares as of the earliest date possible. The calculation of basic and diluted net income (loss) attributable to common stockholders per share is determined using net income (loss) applicable to common stockholders as the numerator and the number of shares included in the denominator as shown below (in thousands, except per share amounts). Due to the net loss applicable to common stockholders, 235 and 548 shares, respectively of potentially dilutive securities are not included in diluted weighted average common shares outstanding for the year ended December 31, 2025 and December 31, 2024, because to do so would be antidilutive for this period.
Year Ended December 31,
Basic net income (loss) attributable to common stockholders per share:
Diluted net income (loss)attributable to common stockholders per share:
Dilutive stock options and restricted stock 235 — 1,019
For the years ended December 31, 2025, 2024, and 2023, there were no options excluded from average diluted shares outstanding as the average market price of the common shares was greater than the exercise price.
17. STOCK-BASED COMPENSATION
On May 14, 2025, the shareholders of the Company approved the 2025 Omnibus Incentive Plan (the “2025 Incentive Plan”) which authorizes 2,190,570 shares for issuance under the plan. Awards granted under the 2025 Incentive Plan may be in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, other share-based awards, and cash awards to directors, officers, and other eligible employees of the Company.
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