Aebi Schmidt (NASDAQ:AEBI) reported higher third-quarter sales and adjusted earnings, but revised its full-year 2026 guidance as supply chain disruptions and rising material costs weighed on performance.
The company reported net sales of $493 million, up 4.6% from a year earlier, and adjusted EBITDA of $44.2 million, an increase of 4.9%. Its adjusted EBITDA margin remained unchanged at 9.0%, while gross margin fell to 19.2% from 20.0% a year earlier.
Order intake rose 2% to $528 million, and the company ended the quarter with a $1.3 billion backlog, up 16% from the prior year. Chairman and Group CEO Barend Fruithof said strong orders were helping the company navigate softness in selected markets.
Guidance revised amid supply constraints
Aebi Schmidt now expects full-year net sales of $1.95 billion to $2 billion, adjusted EBITDA of $170 million to $180 million and leverage below 2.5 times. Fruithof described the change as a slight update to guidance in response to market headwinds and disruptions.
Asked about the revision, Group CFO Marco Portmann said supply chain disruptions accounted for the larger share of the change, with a sizable impact in Europe and some disruption in the United States.
The company faced the insolvency of two European suppliers, restrictions on U.S. original equipment manufacturer chassis supplies and temporary production disruptions. Henning Schröder, CEO of Europe and Rest of World, said during the question-and-answer session that the European supply issues had been addressed and operations were back to normal.
Portmann said material cost inflation contributed to the gross margin decline. Aebi Schmidt has implemented pricing actions intended to cover realized and expected cost increases, although their effect will take time to appear because of the company’s long backlog. Cost controls and operational improvements offset the lower gross margin at the adjusted EBITDA level, he said.
Fruithof said tariffs were not a major direct issue for the company, but energy and steel prices were affecting margins. Portmann said changes in commodities, energy prices or tariffs generally take about two to three quarters to show up in results.
Walk-in vans drive North American growth
North American sales increased nearly 8% in the quarter, supported by municipal production improvements and strength in walk-in van operations. Adjusted EBITDA in the region rose more than 8% to $37.2 million, despite higher material costs and weaker aftermarket activity, particularly at Utilimaster.
Steffen Schewerda, CEO of North America, said Aebi Schmidt had become the leading walk-in van upfitter and estimated the market at $500 million to $600 million. Fruithof said the business had a backlog extending well into 2027.
Schewerda said the chassis shortages discussed on the call were concentrated in commercial pickup trucks rather than walk-in vans. For the walk-in van business, he said existing allocations had secured supply through 2027 until a second supplier ramps up.
The company is operating close to capacity in walk-in vans, municipal products and airport equipment, Schewerda said. Two shifts are possible, although staffing constraints remain.
In Europe and the rest of the world, third-quarter net sales fell 3.6%, as weaker demand in China and the Middle East and the supplier disruptions offset strength in core European markets. Schröder said core European order intake and organic net sales each grew 13% in the first nine months of 2026 from the same period a year earlier.
Acquisition and debt reduction
Aebi Schmidt expects to close its planned acquisition of municipal and commercial upfitter O.J. Watson before the end of 2026. Fruithof said the business generates approximately $28 million in annual sales and would give Aebi Schmidt a direct presence in the Rocky Mountain region. The company expects the deal to add to earnings per share in its first year after closing.
Fruithof said O.J. Watson has a margin profile similar to Aebi Schmidt’s broader North American business. He also said the company has other potential acquisitions on its radar as it works toward a 2030 strategy that calls for adding roughly 400 million euros in revenue through acquisitions.
Net debt declined to $446 million at quarter-end, bringing leverage to 2.66 times. Portmann said the company expects further deleveraging by year-end, supported by seasonally strong fourth-quarter operating cash flow.
The company also remains on track to realize $37 million in synergies by year-end from its July 2025 acquisition of Shyft Group, with another $5 million expected next year, Fruithof said. Portmann reaffirmed Aebi Schmidt’s 2030 adjusted EBITDA margin target of at least 13%.
About Aebi Schmidt (NASDAQ:AEBI)
Aebi Schmidt develops and manufactures specialized vehicles and equipment for road maintenance, snow and ice control, airport operations, and other municipal and infrastructure applications. Its products include snowplows and spreaders, street sweepers, airport snow-clearing and deicing equipment, and compact vehicles and machinery for challenging terrain. The company serves public agencies, airports, contractors, and other commercial customers, with operations and markets across North America and Europe.
