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WABASH NATIONAL Corp - Quarter Report: 2007 September (Form 10-Q)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
     
þ   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2007
OR
     
o   TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission File Number: 1-10883
WABASH NATIONAL CORPORATION
( Exact name of registrant as specified in its charter)
         
Delaware       52-1375208
         
(State of Incorporation)       (IRS Employer
        Identification Number)
    (WABASH LOGO)    
1000 Sagamore Parkway South,        
Lafayette, Indiana       47905
         
(Address of Principal       (Zip Code)
Executive Offices)        
Registrant’s telephone number, including area code: (765) 771-5300
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.
Large accelerated filer o       Accelerated filer þ       Non-accelerated filer o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No þ
The number of shares of common stock outstanding at October 29, 2007 was 30,293,503.
 
 

 


 

WABASH NATIONAL CORPORATION
INDEX
FORM 10-Q
             
        Page
PART I – FINANCIAL INFORMATION        
 
           
Item 1.
  Financial Statements        
 
  Condensed Consolidated Balance Sheets at September 30, 2007 and December 31, 2006     3  
 
  Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2007 and 2006     4  
 
  Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2007 and 2006     5  
 
  Notes to Condensed Consolidated Financial Statements     6  
  Management’s Discussion and Analysis of Financial Condition and Results of Operations     12  
  Quantitative and Qualitative Disclosures about Market Risks     20  
  Controls and Procedures     21  
 
           
PART II – OTHER INFORMATION        
 
           
  Risk Factors     21  
  Unregistered Sales of Equity Securities and Use of Proceeds     22  
  Exhibits     22  
 
  Signature     22  
 Certification of Principal Executive Officer
 Certification of Principal Financial Officer
 Section 906 Written Statement of CEO and CFO

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WABASH NATIONAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
                 
    September 30,     December 31,  
    2007     2006  
    (Unaudited)          
ASSETS
CURRENT ASSETS:
               
Cash and cash equivalents
  $ 21,657     $ 29,885  
Accounts receivable, net
    100,342       110,462  
Inventories
    154,294       133,133  
Deferred income taxes
    22,423       26,650  
Prepaid expenses and other
    1,821       4,088  
 
           
Total current assets
    300,537       304,218  
 
               
PROPERTY, PLANT AND EQUIPMENT, net
    124,307       129,325  
 
               
GOODWILL
    66,317       66,692  
 
               
INTANGIBLE ASSETS
    33,384       35,998  
 
               
OTHER ASSETS
    19,057       20,250  
 
           
 
  $ 543,602     $ 556,483  
 
           
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
               
Accounts payable
  $ 77,493     $ 90,632  
Other accrued liabilities
    56,086       58,706  
 
           
Total current liabilities
    133,579       149,338  
 
               
LONG-TERM DEBT
    125,000       125,000  
 
               
DEFERRED INCOME TAXES
    3,550       1,556  
 
               
OTHER NONCURRENT LIABILITIES AND CONTINGENCIES
    3,608       2,634  
 
               
STOCKHOLDERS’ EQUITY:
               
Preferred stock, 25,000,000 shares authorized, no shares issued or outstanding
           
Common stock 75,000,000 shares authorized, $0.01 par value, 29,842,931 and 30,480,034 shares issued and outstanding, respectively
    321       319  
Additional paid-in capital
    346,052       342,737  
Retained deficit
    (46,345 )     (52,887 )
Accumulated other comprehensive income
    3,314       2,975  
Treasury stock at cost, 1,687,982 and 974,900 common shares, respectively
    (25,477 )     (15,189 )
 
           
Total stockholders’ equity
    277,865       277,955  
 
           
 
  $ 543,602     $ 556,483  
 
           
See Notes to Condensed Consolidated Financial Statements

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WABASH NATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
                                 
    Three Months     Nine Months  
    Ended September 30,     Ended September 30,  
    2007     2006     2007     2006  
 
                               
NET SALES
  $ 291,017     $ 362,290     $ 844,720     $ 957,981  
 
                               
COST OF SALES
    266,424       336,177       772,110       881,805  
 
                       
 
                               
Gross profit
    24,593       26,113       72,610       76,176  
 
                               
GENERAL AND ADMINISTRATIVE EXPENSES
    13,173       12,068       38,332       36,998  
 
                               
SELLING EXPENSES
    3,916       3,651       12,029       10,446  
 
                       
 
                               
Income from operations
    7,504       10,394       22,249       28,732  
 
                               
OTHER INCOME (EXPENSE):
                               
Interest expense
    (1,416 )     (2,081 )     (4,410 )     (5,163 )
Foreign exchange, net
    65       (28 )     461       (28 )
Other, net
    (86 )     (365 )     (592 )     (123 )
 
                       
 
                               
Income before income taxes
    6,067       7,920       17,708       23,418  
 
                               
INCOME TAX EXPENSE
    2,289       2,931       7,059       9,045  
 
                       
 
                               
NET INCOME
  $ 3,778     $ 4,989     $ 10,649     $ 14,373  
 
                       
 
                               
COMMON STOCK DIVIDENDS DECLARED
  $ 0.045     $ 0.045     $ 0.135     $ 0.135  
 
                       
 
BASIC NET INCOME PER SHARE
  $ 0.13     $ 0.16     $ 0.35     $ 0.46  
 
                       
 
                               
DILUTED NET INCOME PER SHARE
  $ 0.12     $ 0.15     $ 0.35     $ 0.44  
 
                       
 
                               
COMPREHENSIVE INCOME
                               
Net income
  $ 3,778     $ 4,989     $ 10,649     $ 14,373  
Foreign currency translation adjustment
    113       86       339       843  
 
                       
NET COMPREHENSIVE INCOME
  $ 3,891     $ 5,075     $ 10,988     $ 15,216  
 
                       
See Notes to Condensed Consolidated Financial Statements.

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WABASH NATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
                 
    Nine Months  
    Ended September 30,  
    2007     2006  
CASH FLOWS FROM OPERATING ACTIVITIES:
               
Net income
  $ 10,649     $ 14,373  
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
               
Depreciation and amortization
    14,477       15,587  
Net loss on the sale of assets
    106       54  
Deferred income taxes
    6,596       8,007  
Excess tax benefits from stock-based compensation
    (33 )     (339 )
Stock-based compensation
    3,213       3,029  
Changes in operating assets and liabilities:
               
Accounts receivable
    10,120       (25,380 )
Finance contracts
    7       1,393  
Inventories
    (21,211 )     (56,987 )
Prepaid expenses and other
    2,260       2,394  
Accounts payable and accrued liabilities
    (9,991 )     30,727  
Other, net
    819       1,464  
 
           
Net cash provided by (used in) operating activities
    17,012       (5,678 )
 
               
CASH FLOWS FROM INVESTING ACTIVITIES:
               
Capital expenditures
    (5,196 )     (10,899 )
Acquisition, net of cash acquired
    (4,500 )     (69,307 )
Proceeds from the sale of property, plant and equipment
    124       1,890  
 
           
Net cash used in investing activities
    (9,572 )     (78,316 )
 
               
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Proceeds from exercise of stock options
    74       713  
Excess tax benefits from stock-based compensation
    33       339  
Borrowings under revolving credit facilities
    99,424       205,496  
Payments under revolving credit facilities
    (99,424 )     (168,521 )
Repurchases of common stock
    (11,668 )     (507 )
Payments under long-term debt obligations
          (500 )
Common stock dividends paid
    (4,107 )     (4,252 )
 
           
Net cash (used in) provided by financing activities
    (15,668 )     32,768  
 
           
 
               
NET DECREASE IN CASH AND CASH EQUIVALENTS
    (8,228 )     (51,226 )
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
    29,885       67,437  
 
           
CASH AND CASH EQUIVALENTS AT END OF PERIOD
  $ 21,657     $ 16,211  
 
           
See Notes to Condensed Consolidated Financial Statements.

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WABASH NATIONAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. GENERAL
     The condensed consolidated financial statements of Wabash National Corporation (the Company) have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the accompanying condensed consolidated financial statements contain all material adjustments (consisting only of normal recurring adjustments) necessary to present fairly the consolidated financial position of the Company, its results of operations and cash flows. The condensed consolidated financial statements included herein should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s 2006 Annual Report on Form 10-K, as amended.
     Certain items previously reported in specific condensed consolidated financial statement captions have been reclassified to conform to the 2007 presentation. These reclassifications had no impact on net income for the period previously reported.
2. NEW ACCOUNTING PRONOUNCEMENTS
     Income Taxes. On January 1, 2007, the Company adopted the Financial Accounting Standards Board (FASB) Final Interpretation Number 48, “Accounting for Uncertainty in Income Taxes” (FIN 48). The Company has no adjustment to report in respect of the effect of adoption of FIN 48.
     The Company’s policy with respect to interest and penalties associated with reserves or allowances for uncertain tax positions is to classify such interest and penalties in income tax expense in the Statements of Operations. As of January 1, 2007, the total amount of unrecognized income tax benefits computed under FIN 48 was approximately $1.1 million, all of which, if recognized, would impact the effective income tax rate of the Company. As of January 1, 2007, the Company had recorded a total of $0.4 million of accrued interest and penalties related to uncertain tax positions. The Company foresees no significant changes to the facts and circumstances underlying its reserves and allowances for uncertain income tax positions as reasonably possible during the next 12 months. As of January 1, 2007, the Company is subject to unexpired statutes of limitation for U.S. federal income taxes for the years 2001-2007. The Company is also subject to unexpired statutes of limitation for Indiana state income taxes for the years 1998-2007.
     Fair Value Measurements. In September 2006, the FASB issued Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements. The Statement provides guidance for using fair value to measure assets and liabilities and only applies when other standards require or permit the fair value measurement of assets and liabilities. It does not expand the use of fair value measurement. This Statement is effective for fiscal years beginning after November 15, 2007. The Company is evaluating the impact that this Statement will have on the Company’s financial position, results of operations and cash flows.
     Fair Value Option. In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. This Statement permits entities to choose to measure many financial instruments and certain other items at fair value. This Statement is effective for fiscal

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years beginning after November 15, 2007. The adoption of this Statement is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.
3. ACQUISITION
     As part of the Company’s commitment to expand its customer base and grow its market leadership, Wabash National Corporation acquired all of the outstanding shares of Transcraft Corporation on March 3, 2006, for approximately $73.8 million in cash, including a payment of $4.5 million in 2007 based on Transcraft’s achievement of 2006 performance targets.
     Unaudited Pro forma Results
     The results of Transcraft are included in the Consolidated Statements of Operations from the date of acquisition. The following unaudited pro forma information is shown below as if the acquisition of Transcraft had been completed as of the beginning of the fiscal year presented (in thousands, except per share amounts).
                 
    Three Months Ended   Nine Months Ended
    September 30, 2006   September 30, 2006
Sales
  $ 362,290     $ 988,938  
Income from operations
    10,394       29,468  
Net income
    4,989       14,793  
Basic net income per share
    0.16       0.47  
Diluted net income per share
    0.15       0.45  
4. INVENTORIES
     Inventories consisted of the following (in thousands):
                 
    September 30, 2007     December 31, 2006  
Raw materials and components
  $ 39,760     $ 50,398  
Work in process
    4,924       1,157  
Finished goods
    93,570       64,299  
After-market parts
    5,341       5,770  
Used trailers
    10,699       11,509  
 
           
 
  $ 154,294     $ 133,133  
 
           
5. DEBT
     On March 6, 2007, the Company entered into a Second Amended and Restated Loan and Security Agreement (Revolving Facility) with its lenders. The Revolving Facility replaced the Company’s prior facility. The Revolving Facility increased the capacity under the facility from $125 million to $150 million, subject to a borrowing base, and extended the maturity date of the facility from September 30, 2007 to March 6, 2012.
     On September 24, 2007, the Company entered into Amendment No. 1 to Second Amended and Restated Loan and Security Agreement (Amendment) with its lenders. The Amendment increases the Company’s borrowing capacity under the Revolving Facility from $150 million to $200 million, subject

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to a borrowing base, and allows borrowing under the Revolving Facility to fund the repurchase of the Company’s $125 million Senior Convertible Notes, subject to the conditions set forth in the Amendment.
     The Amendment requires that no later than May 1, 2008, the Company do one or more of the following in connection with its Senior Convertible Notes, which are due in August 2008: (i) repurchase all or a portion of the Senior Convertible Notes with the proceeds of a convertible note offering or proceeds from the Revolving Facility, so long as immediately after making any such payment with proceeds of the Revolving Facility the Company has availability under the Revolving Facility of at least $40 million, (ii) defease any outstanding indebtedness evidenced by the Senior Convertible Notes, so long as immediately after making any such payment the Company has availability under the Revolving Facility of at least $40 million or (iii) institute cash reserves equal to any outstanding principal balance of the Senior Convertible Notes, which reserves shall remain in place until all indebtedness evidenced by the Senior Convertible Notes has been paid in full, and shall be used only to pay in full the outstanding indebtedness evidenced by the Senior Convertible Notes, so long as immediately after instituting any cash reserves from the proceeds of the Revolving Facility the Company has availability under the Revolving Facility of at least $40 million.
     The Company’s $125 million Senior Convertible Notes are, if not converted, due on August 1, 2008. In accordance with SFAS No. 6, Classification of Short-Term Obligations Expected to be Refinanced, the Company has the intent and the ability to refinance the Senior Convertible Notes on a long-term basis by utilizing the available capacity on the Company’s Revolving Facility. Thus, the Company has reflected the Senior Convertible Notes as long-term debt as of September 30, 2007.
     As of September 30, 2007, the Company was in compliance with all covenants of the Revolving Facility.
6. STOCK-BASED COMPENSATION
     At the May 2007 Annual Meeting of Stockholders, the 2007 Omnibus Incentive Plan was approved making available 2.5 million shares of common stock for issuance. The plan allows the Company to grant stock options to purchase shares of common stock at a price not less than market price at the date of grant. Options that have been granted to employees under the plan vest in annual installments over three years and expire 10 years after the date of grant. The plan also allows the Company to grant shares of restricted stock. Restricted stock that has been granted to employees under the plan vests three years from the date of the grant.
     The Company adopted Statement of Financial Accounting Standards (SFAS) No. 123(R), Share-Based Payment, on January 1, 2006 using the modified prospective method. This Statement requires that all share-based payments to employees, including grants of employee stock options, be recognized in the financial statements based upon their fair value.
     SFAS No. 123(R) requires the use of a valuation model to calculate the fair value of stock option awards. The Company has valued new stock option awards granted subsequent to the adoption of SFAS No. 123(R) using a binomial model, which incorporates various assumptions including volatility, expected life, dividend yield and risk-free interest rates. The expected life and volatility assumptions are based on the Company’s historical experience as well as the terms and conditions of the stock option awards it grants to employees.
     The Company’s policy is to recognize expense for awards subject to graded vesting using the straight-line attribution method. The amount of after-tax compensation costs related to nonvested stock

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options and restricted stock not yet recognized was $7.2 million at September 30, 2007, for which the expense will be recognized through 2010.
7. STOCKHOLDERS’ EQUITY
     On July 26, 2007, the Company’s Board of Directors approved an amendment extending the current stock repurchase program from September 15, 2007 to September 15, 2008. As of September 30, 2007, $25.8 million remained available under a $50 million authorization. For the first nine months of 2007, the Company repurchased 700,700 shares for $10.3 million.
8. CONTINGENCIES
     Various lawsuits, claims and proceedings have been or may be instituted or asserted against the Company arising in the ordinary course of business, including those pertaining to product liability, labor and health related matters, successor liability, environmental and possible tax assessments. While the amounts claimed could be substantial, the ultimate liability cannot now be determined because of the considerable uncertainties that exist. Therefore, it is possible that results of operations or liquidity in a particular period could be materially affected by certain contingencies. However, based on facts currently available, management believes that the disposition of matters that are currently pending or asserted will not have a material adverse effect on the Company’s financial position, liquidity or results of operations.
9. NET INCOME PER SHARE
     Per share results have been computed based on the average number of common shares outstanding. The computation of basic and diluted net income per share is determined using net income as the numerator and the number of shares included in the denominator as follows (in thousands, except per share amounts):
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2007     2006     2007     2006  
Basic net income per share:
                               
Net income applicable to common stockholders
  $ 3,778     $ 4,989     $ 10,649     $ 14,373  
 
                       
Weighted average common shares outstanding
    29,874       31,174       30,132       31,148  
 
                       
Basic net income per share
  $ 0.13     $ 0.16     $ 0.35     $ 0.46  
 
                       
 
                               
Diluted net income per share:
                               
Net income applicable to common stockholders
  $ 3,778     $ 4,989     $ 10,649     $ 14,373  
After-tax equivalent of interest on convertible notes
    741       741       2,222       2,222  
 
                       
Diluted net income applicable to common stockholders
  $ 4,519     $ 5,730     $ 12,871     $ 16,595  
 
                       
 
                               
Weighted average common shares outstanding
    29,874       31,174       30,132       31,148  
Dilutive stock options/shares
    234       154       255       191  
Convertible notes equivalent shares
    6,692       6,619       6,675       6,598  
 
                       
Diluted weighted average common shares outstanding
    36,800       37,947       37,062       37,937  
 
                       
Diluted net income per share
  $ 0.12     $ 0.15     $ 0.35     $ 0.44  
 
                       

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10. INCOME TAXES
     The Company recognized income tax expense of $7.1 million in the first nine months of 2007 compared to $9.0 million in the prior year period. The effective tax rate for the nine months of 2007 was 39.9% compared to 38.6% for the prior year period. The increase results primarily from additional losses in foreign jurisdictions for which no income tax benefit was provided during either period.
     The following table provides reconciliation of differences from the U.S. federal statutory rate of 35% (in thousands):
                 
    Nine Months Ended September 30,  
    2007     2006  
Pretax book income
  $ 17,708     $ 23,418  
 
               
Federal tax expense at 35% statutory rate
    6,198       8,196  
State and local income taxes
    755       1,138  
Other
    106       (289 )
 
           
Total income tax expense
  $ 7,059     $ 9,045  
 
           
11. PRODUCT WARRANTIES
     The following table presents the changes in the product warranty accrual included in Other Accrued Liabilities (in thousands):
                 
    2007     2006  
Balance at January 1
  $ 14,978     $ 10,217  
Provision for warranties issued in current year
    3,238       4,004  
Additional provisions for pre-existing warranties
    2,133       2,384  
Transcraft acquisition
          2,100  
Payments
    (3,341 )     (4,859 )
 
           
Balance at September 30
  $ 17,008     $ 13,846  
 
           
     The Company’s warranty policy generally provides coverage for components of trailers the Company produces or assembles. Typically, the coverage period is five years for trailers sold prior to 2005. Beginning in 2005, the coverage period for DuraPlate® trailer panels was extended to ten years, with all other components remaining at five years. The Company’s policy is to accrue the estimated cost of warranty coverage at the time of the sale.
12. SEGMENTS
     a. Segment Reporting
     Under the provisions of SFAS No. 131, Disclosure about Segments of an Enterprise and Related Information, the Company has two reportable segments: manufacturing and retail and distribution. The manufacturing segment produces and sells new trailers to the retail and distribution segment or to customers who purchase trailers direct or through independent dealers. The retail and distribution segment includes the sale of new and used trailers, as well as the sale of after-market parts and service, through its retail branch network.

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     Reportable segment information is as follows (in thousands):
                                 
            Retail and             Consolidated  
    Manufacturing     Distribution     Eliminations     Totals  
Three Months Ended September 30, 2007
                               
Net sales
                               
External customers
  $ 256,847     $ 34,170     $     $ 291,017  
Intersegment sales
    13,207       544       (13,751 )      
 
                       
Total net sales
  $ 270,054     $ 34,714     $ (13,751 )   $ 291,017  
 
                       
Income (loss) from operations
  $ 8,165     $ (699 )   $ 38     $ 7,504  
Assets
  $ 654,252     $ 125,924     $ (236,574 )   $ 543,602  
 
                               
Three Months Ended September 30, 2006
                               
Net sales
                               
External customers
  $ 310,866     $ 51,424     $     $ 362,290  
Intersegment sales
    25,976             (25,976 )      
 
                       
Total net sales
  $ 336,842     $ 51,424     $ (25,976 )   $ 362,290  
 
                       
Income (loss) from operations
  $ 9,467     $ 1,183     $ (256 )   $ 10,394  
Assets
  $ 721,009     $ 159,914     $ (231,478 )   $ 649,445  
 
                               
Nine Months Ended September 30, 2007
                               
Net sales
                               
External customers
  $ 727,695     $ 117,025     $     $ 844,720  
Intersegment sales
    49,516       544       (50,060 )      
 
                       
Total net sales
  $ 777,211     $ 117,569     $ (50,060 )   $ 844,720  
 
                       
Income (loss) from operations
  $ 24,212     $ (1,337 )   $ (626 )   $ 22,249  
Assets
  $ 654,252     $ 125,924     $ (236,574 )   $ 543,602  
 
                               
Nine Months Ended September 30, 2006
                               
Net sales
                               
External customers
  $ 813,169     $ 144,812     $     $ 957,981  
Intersegment sales
    57,190             (57,190 )      
 
                       
Total net sales
  $ 870,359     $ 144,812     $ (57,190 )   $ 957,981  
 
                       
Income (loss) from operations
  $ 27,091     $ 2,092     $ (451 )   $ 28,732  
Assets
  $ 721,009     $ 159,914     $ (231,478 )   $ 649,445  
  b.   Product Information
     The Company offers products primarily in three general categories: new trailers, used trailers and parts and service. Other sales include leasing and freight revenue. The following table sets forth the major product categories and their percentage of consolidated net sales (dollars in thousands):
                                                                 
    Three Months Ended September 30,   Nine Months Ended September 30,
    2007   2006   2007   2006
    $   %   $   %   $   %   $   %
New trailers
    265,020       91.1       329,114       90.8       763,489       90.4       858,890       89.7  
Used trailers
    8,098       2.8       13,233       3.7       29,763       3.5       44,414       4.6  
Parts and service
    14,811       5.1       14,431       4.0       43,500       5.2       42,052       4.4  
Other
    3,088       1.0       5,512       1.5       7,968       0.9       12,625       1.3  
 
                                                               
Total net sales
    291,017       100.0       362,290       100.0       844,720       100.0       957,981       100.0  
 
                                                               

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ITEM 2.     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
     This report contains forward-looking statements. Additional written or oral forward-looking statements may be made by Wabash National Corporation (the Company) from time to time in filings with the Securities and Exchange Commission or otherwise. The words “believe,” “expect,” “anticipate,” and “project” and similar expressions identify forward-looking statements, which speak only as of the date the statement is made. Such forward-looking statements are within the meaning of that term in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements may include, but are not limited to, information regarding our business plan, our expected revenues, income or loss, capital expenditures, acquisitions, divestitures, financing and refinancing plans, plans for future operations, our enterprise resource planning (ERP) system, commodity pricing and our ability to obtain commodities, financing needs or plans, the impact of inflation and plans relating to services of the Company, as well as assumptions relating to the foregoing. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Future events and actual results could differ materially from those set forth in, contemplated by or underlying the forward-looking statements. Statements in this report, including those set forth in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” describe factors, among others, that could contribute to or cause such differences.
     Although we believe that our expectations that are expressed in these forward-looking statements are reasonable, we cannot promise that our expectations will turn out to be correct. Our actual results could be materially different from and worse than our expectations. Important risks and factors that could cause our actual results to be materially different from our expectations include the factors that are disclosed under the heading “Risk Factors” in our Form 10-K, as amended, for the year ended December 31, 2006 and elsewhere herein.

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RESULTS OF OPERATIONS
     The following table sets forth certain operating data as a percentage of net sales for the periods indicated:
                                 
    Percentage of Net Sales
    Three Months Ended   Nine Months Ended
    September 30,   September 30,
    2007   2006   2007   2006
Net sales
    100.0 %     100.0 %     100.0 %     100.0 %
Cost of sales
    91.5       92.8       91.4       92.0  
 
                               
Gross profit
    8.5       7.2       8.6       8.0  
 
                               
General and administrative expenses
    4.5       3.3       4.5       3.9  
Selling expenses
    1.4       1.0       1.5       1.1  
 
                               
Income from operations
    2.6       2.9       2.6       3.0  
 
                               
Interest expense
    (0.5 )     (0.6 )     (0.5 )     (0.6 )
Foreign exchange, net
                0.1        
Other, net
          (0.1 )     (0.1 )      
 
                               
Income before income taxes
    2.1       2.2       2.1       2.4  
 
                               
Income tax expense
    0.8       0.8       0.8       0.9  
 
                               
Net income
    1.3 %     1.4 %     1.3 %     1.5 %
 
                               
     In the three-month and nine-month periods ended September 30, 2007, we recorded net sales of $291.0 million and $844.7 million, respectively, compared to $362.3 million and $958.0 million in the prior year periods. Despite an increase in average selling prices for van trailers, net sales declined year over year due to lower van trailer volumes offset in part by higher platform trailer volumes due to the inclusion of a full nine months of platform trailer sales from the acquisition of Transcraft Corporation in March 2006. Gross profit margin improved to 8.5% in the third quarter of 2007 compared to 7.2% in the third quarter of 2006. The gross profit margin increase was due to higher average selling prices resulting from our concerted effort to recoup material cost increases, improved manufacturing effectiveness and the effects of continued efforts to reduce other operating costs. Income from operations in the three-month and nine-month periods ended September 30, 2007, was $7.5 million and $22.2 million, respectively, compared to $10.4 million and $28.7 million for the same periods in 2006. Operating income as a percentage of net sales was negatively impacted in the third quarter by an increase in general and administrative costs compared to the 2006 period primarily related to litigation costs.
     As a recognized industry leader, we continue to focus on product innovation, manufacturing automation, strategic sourcing and workforce rationalization in order to strengthen our industry position and increase profitability.
Three Months Ended September 30, 2007
Net Sales
     Net sales decreased $71.3 million, or 19.7%, compared to the third quarter of 2006. By business segment, net external sales and related units sold were as follows (dollars in millions):

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    Three Months Ended September 30,  
    2007     2006     % Change  
    (millions)
Sales by segment:
                       
Manufacturing
  $ 256.8     $ 310.9       (17.4 )
Retail and distribution
    34.2       51.4       (33.5 )
 
                   
Total
  $ 291.0     $ 362.3       (19.7 )
 
                   
 
               
New trailers:
  (units)          
Manufacturing
    11,500       15,400       (25.3 )
Retail and distribution
    600       1,200       (50.0 )
 
                   
Total
    12,100       16,600       (27.1 )
 
                   
Used trailers
    1,000       1,700       (41.2 )
 
                   
     Manufacturing segment sales were $256.8 million in the third quarter of 2007, down $54.1 million, or 17.4%, compared to the third quarter of 2006. New trailer sales declined 3,900 units, or approximately $77.3 million, due to weak market demand. The decrease was partially offset by higher average selling prices totaling $23.9 million attributable to both the efforts made to offset material price increases and product mix as we shipped a larger number of the higher priced refrigerated units and fewer lower priced FreightProâ and pup trailers in 2007 compared to the same period in 2006.
     Retail and distribution segment sales were $34.2 million in the third quarter of 2007, down $17.2 million, or 33.5% compared to the prior year period. New trailer sales decreased $10.8 million as a result of a decline in unit volume, offset in part by higher average selling prices and favorable product mix. Used trailer sales were down $5.1 million due to lower unit volumes. Parts and service sales decreased $0.9 million in 2007 due to weak customer demand.
Gross Profit
     Gross profit was $24.6 million for the third quarter of 2007 compared to $26.1 million in the third quarter of 2006. Gross profit as a percent of sales was 8.5% for the quarter compared to 7.2% for the same period in 2006. Gross profit by segment was as follows (in millions):
                         
    Three Months Ended September 30,  
    2007     2006     % Change  
Gross profit by segment:
                       
Manufacturing
  $ 21.9     $ 21.5       1.9  
Retail and distribution
    2.7       4.9       (44.9 )
Eliminations
          (0.3 )        
 
                   
Total gross profit
  $ 24.6     $ 26.1       (5.7 )
 
                   
     The manufacturing segment gross profit in the third quarter of 2007 was $21.9 million, an increase of $0.4 million, or 1.9%, compared to the third quarter of 2006, despite a $54.1 million decrease in sales. As a percentage of sales, gross profit margin was 8.5% compared to 6.9% for the prior year period. The improvements reflect an increase in selling prices that outpaced increases in raw material

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costs and the continued improvement of production efficiency subsequent to the implementation of our ERP system in 2006.
     Retail and distribution segment gross profit in the third quarter of 2007 was $2.7 million, a decrease of $2.2 million, or 44.9%, compared to the 2006 period. The decline is a result of reduced volume. As a percentage of sales, gross profit margin was 7.9% compared to 9.5% for the prior year period. The decrease reflects an unfavorable product mix and the impact of reduced volume.
General and Administrative Expenses
     General and administrative expenses increased $1.1 million in the third quarter of 2007 to $13.2 million from $12.1 million in the prior year period primarily due higher litigation-related costs and an increase in bad debt expense. These increases were partially offset by lower salaries and other employee-related costs.
Selling Expenses
     Selling expenses increased $0.3 million to $3.9 million in the third quarter of 2007 due to an increase in employee-related costs.
Income Taxes
     We recognized income tax expense of $2.3 million for the three months ending September 30, 2007, compared to $2.9 million in the prior year period. The effective tax rate for the third quarter of 2007 was 37.7% compared to 37.0% for the third quarter of 2006.
Nine Months Ended September 30, 2007
Net Sales
     Net sales for the first nine months of 2007 decreased $113.3 million, or 11.8%, compared to the 2006 period. By business segment, net external sales and related units sold were as follows:
                         
    Nine Months Ended September 30,  
    2007     2006     % Change  
    (millions)          
Sales by segment:
                       
Manufacturing
  $ 727.7     $ 813.2       (10.5 )
Retail and distribution
    117.0       144.8       (19.2 )
 
                   
Total
  $ 844.7     $ 958.0       (11.8 )
 
                   
 
                       
New trailers:
  (units)                
Manufacturing
    33,300       41,100       (19.0 )
Retail and distribution
    2,300       2,900       (20.7 )
 
                   
Total
    35,600       44,000       (19.1 )
 
                   
Used trailers
    3,600       5,100       (29.4 )
 
                   

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     Manufacturing segment sales for 2007 declined $85.5 million, or 10.5%, compared to the prior year period. Weak market demand resulted in lower van sales volumes having an impact of $158.7 million, partially offset by higher average selling prices for vans having an impact of $63.0 million. Sales price improvements result from the effort to offset material price increases and a favorable product mix. Sales of platform units have increased $11.3 million compared to the prior year period due primarily to the inclusion of a full nine months impact of Transcraft sales.
     Retail and distribution segment sales were $117.0 million for the first nine months of 2007, down $27.8 million, or 19.2%, compared to the prior year period. This decrease was primarily due to lower trailer volumes as a result of weak market conditions and unfavorable product mix in the first nine months of 2007.
Gross Profit
     Gross profit for the first nine months of 2007 was $72.6 million compared to $76.2 million for the first nine months of 2006. Gross profit as a percent of sales was 8.6% compared to 8.0% for the same period in 2006. Gross profit by segment was as follows (in millions):
                         
    Nine Months Ended September 30,  
    2007     2006     % Change  
Gross profit by segment:
                       
Manufacturing
  $ 65.0     $ 64.6       0.6  
Retail and distribution
    8.3       12.0       (30.8 )
Eliminations
    (0.7 )     (0.4 )        
 
                   
Total gross profit
  $ 72.6     $ 76.2       (4.7 )
 
                   
     Manufacturing segment gross profit was $65.0 million for the nine month period of 2007, an increase of $0.4 million, or 0.6%, compared to the prior year period. As a percentage of sales, gross profit margin was 8.9% compared to 7.9% for the first nine months of 2006. The gross profit margin percentage was favorably impacted by increases in the average selling prices that outpaced increased raw material costs. Additionally, the gross profit margins for 2006 include production inefficiencies and outages resulting from the implementation of our ERP system. Transcraft’s contributions to gross profit increased in the first nine months of 2007 from the prior year period due to Transcraft having nine months of results in the current year period as compared to seven months in the prior year period.
     Retail and distribution segment gross profit for the first nine months of 2007 was $8.3 million, a decrease of $3.7 million, or 30.8%, compared to the prior year period. As a percentage of sales, gross profit margin was 7.1% compared to 8.3% in the prior year period due to the decreased volume of trailer sales and unfavorable product mix.
General and Administrative Expenses
     General and administrative expenses increased $1.3 million to $38.3 million in the first nine months of 2007. This increase was due to higher professional fees for legal and information technology and an increase in bad debt expense. These increases were partially offset by decreases in salaries and other employee-related costs.

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Selling Expenses
     Selling expenses increased $1.6 million to $12.0 million in the first nine months of 2007, compared to $10.4 million in the prior year period, primarily due to an increase in employee-related costs.
Income Taxes
     We recognized income tax expense of $7.1 million in the nine months ended September 30, 2007 compared to $9.0 million in the prior year period. The effective tax rate for the nine months ended September 30, 2007 was 39.9% compared to 38.6% for the prior year period. The increase results primarily from additional losses in foreign jurisdictions for which no income tax benefit was provided during either period.
Liquidity and Capital Resources
Capital Structure
     Our capital structure is comprised of a mix of equity and debt. As of September 30, 2007, our debt to equity ratio was approximately 0.4:1.0. Our objective is to generate operating cash flows sufficient to fund normal working capital requirements, capital expenditures, pay dividends, fund potential stock repurchases and take advantage of market opportunities.
Debt Amendment
     On March 6, 2007, we entered into a Second Amended and Restated Loan and Security Agreement (Revolving Facility) with our lenders. The Revolving Facility replaced our prior facility. The Revolving Facility increased the capacity under the facility from $125 million to $150 million, subject to a borrowing base, and extended the maturity date of the facility from September 30, 2007 to March 6, 2012.
     On September 24, 2007, we entered into Amendment No. 1 to Second Amended and Restated Loan and Security Agreement (Amendment) with our lenders. The Amendment increases our borrowing capacity under the Revolving Facility from $150 million to $200 million, subject to a borrowing base, and allows borrowing under the Revolving Facility to fund the repurchase of our $125 million Senior Convertible Notes, subject to the conditions set forth in the Amendment.
     The Amendment requires that no later than May 1, 2008, we do one or more of the following in connection with our Senior Convertible Notes, which are due in August 2008: (i) repurchase all or a portion of the Senior Convertible Notes with the proceeds of a convertible note offering or proceeds from the Revolving Facility, so long as immediately after making any such payment with proceeds of the Revolving Facility we have availability under the Revolving Facility of at least $40 million, (ii) defease any outstanding indebtedness evidenced by the Senior Convertible Notes, so long as immediately after making any such payment we have availability under the Revolving Facility of at least $40 million or (iii) institute cash reserves equal to any outstanding principal balance of the Senior Convertible Notes, which reserves shall remain in place until all indebtedness evidenced by the Senior Convertible Notes has been paid in full, and shall be used only to pay in full the outstanding indebtedness evidenced by the Senior Convertible Notes, so long as immediately after instituting any cash reserves from the proceeds of the Revolving Facility we have availability under the Revolving Facility of at least $40 million. We continue to actively review alternatives available for refinancing our Senior Convertible Notes.

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     Our $125 million Senior Convertible Notes are, if not converted, due on August 1, 2008. In accordance with SFAS No. 6, Classification of Short-Term Obligations Expected to be Refinanced, we have the intent and the ability to refinance the Senior Convertible Notes on a long-term basis by utilizing the available capacity on our Revolving Facility. Thus, we have reflected the Senior Convertible Notes as long-term debt as of September 30, 2007.
Cash Flow
     Cash provided by operating activities amounted to $17.0 million for the first nine months of 2007 compared to $5.7 million used in operating activities in the 2006 period. The increase was primarily the result of a $28.4 million improvement in working capital offset by a $5.7 million reduction in net income, adjusted for non-cash items, as compared to the prior year period. The following is a discussion of factors impacting certain working capital items in the first nine months of 2007 as compared to the first nine months of 2006:
  -   Accounts receivable decreased $10.1 million in the 2007 period compared to a $25.4 million increase in the 2006 period. Days sales outstanding, a measure of working capital efficiency that measures the amount of time a receivable is outstanding, was 32 days at September 30, 2007, a decrease of nine days versus the prior year period. The improvement in days sales outstanding was primarily due to the timing of collections.
 
  -   Inventory increased $21.2 million in the 2007 period compared to an increase of $57.0 million in the 2006 period. The 2007 increase is primarily due to higher new trailer inventories. Inventory turns, a commonly used measure of working capital efficiency that measures how quickly inventory turns, decreased to approximately 6.9 times versus 7.9 times in the prior year period.
 
  -   Accounts payable and accrued liabilities decreased $10.0 million in the 2007 period compared to an increase of $30.7 million in the 2006 period. The year over year change is due to the improved inventory management and lower production volume.
     Investing activities used $9.6 million during the 2007 period compared to $78.3 million used in the 2006 period. The decrease of $68.7 million from the prior year period was primarily due to the Transcraft acquisition in the first quarter of 2006. The current year period includes the additional purchase price payment of $4.5 million based on Transcraft’s achievement of 2006 performance targets.
     Financing activities used $15.7 million in the 2007 period, primarily due to the repurchases of common stock and payment of dividends.
     As of September 30, 2007, our liquidity position, defined as cash on hand and available borrowing capacity, was $205.2 million and total debt and lease obligations was $129.6 million, including $4.6 million of operating lease commitments. We expect that in 2007, we will be able to generate sufficient cash flow from operations to fund working capital, capital expenditure requirements, stock repurchases and quarterly dividend payments.
Capital Expenditures
     Capital spending amounted to $5.2 million for the first nine months of 2007 and is anticipated to be in the range of $7-10 million for 2007.

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Off-Balance Sheet Transactions
     As of September 30, 2007, we had approximately $4.6 million in operating lease commitments. We did not enter into any material off-balance sheet debt or operating lease transactions during the quarter.
Contractual Obligations and Commercial Commitments
     We have included a summary of our Contractual Obligations and Commercial Commitments on our annual report on Form 10-K, as amended, for the year ended December 31, 2006. There have been no material changes to the summary provided in that report.
Backlog
     Orders that have been confirmed by the customer in writing and can be produced during the next 18 months are included in backlog. Orders that comprise the backlog may be subject to changes in quantities, delivery, specifications and terms. Our backlog of orders was approximately $393 million at September 30, 2007 compared to $512 million at December 31, 2006. We expect to complete the majority of our existing backlog orders within the next 12 months.
OUTLOOK
     According to the most recent A.C.T. Research Company, LLC (ACT) estimates, total trailer industry shipments are expected to be down from 280,000 units in 2006 to approximately 223,000 units in 2007 and 220,000 units in 2008. Our view of the market is similar to the current 2007 ACT forecast.
     ACT is estimating that the industry will ship 155,000 van units and 25,000 platform units in 2007 compared to 194,000 and 34,000, respectively, shipped in 2006. We expect to ship approximately 41,000 vans and 5,000 platforms in 2007 compared to 52,000 vans and 6,000 platforms, including Transcraft volumes on a full-year pro forma basis, in 2006. This industry decrease reflects continued weakness in the overall freight demand environment resulting from slower economic growth and a drop in the new housing construction market during 2007. Despite this market softness, we view this as an opportunity to build a stronger, more profitable company from which to grow longer term. Key to this growth will be continued efforts to achieve business process improvement and cost reduction throughout our operations, with a special focus on our margin expansion initiatives, most notably, strategic pricing and sourcing strategies. While we have reduced our expectations for 2007, we remain optimistic that the current downturn in the trailer market will not be protracted.
     We believe we are in a strong position in the industry because (1) our core customers are among the largest and most dominant participants in the trucking industry, (2) our DuraPlate® trailer continues to have strong market acceptance, (3) our focus is on developing solutions that reduce our customers’ trailers maintenance costs, and (4) our sales initiative to expand and diversify our customer base.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
     We have included a summary of our Critical Accounting Policies and Estimates in our annual report on Form 10-K, as amended, for the year ended December 31, 2006. There have been no material changes to the summary provided in that report.

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NEW ACCOUNTING PRONOUNCEMENTS
Income Taxes
     On January 1, 2007, we adopted the Financial Accounting Standards Board (FASB) Final Interpretation Number 48, “Accounting for Uncertainty in Income Taxes” (FIN 48). We have no adjustment to report in respect of the effect of adoption of FIN 48.
     Our policy with respect to interest and penalties associated with reserves or allowances for uncertain tax positions is to classify such interest and penalties in income tax expense in the Statements of Operations. As of January 1, 2007, the total amount of unrecognized income tax benefits computed under FIN 48 was approximately $1.1 million, all of which, if recognized, would impact our effective income tax rate. As of January 1, 2007, we had recorded a total of $0.4 million of accrued interest and penalties related to uncertain tax positions. We foresee no significant changes to the facts and circumstances underlying its reserves and allowances for uncertain income tax positions as reasonably possible during the next 12 months. As of January 1, 2007, we are subject to unexpired statutes of limitation for U.S. federal income taxes for the years 2001-2007. We are also subject to unexpired statutes of limitation for Indiana state income taxes for the years 1998-2007.
Fair Value Measurements
     In September 2006, the FASB issued Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements. The Statement provides guidance for using fair value to measure assets and liabilities and only applies when other standards require or permit the fair value measurement of assets and liabilities. It does not expand the use of fair value measurement. This Statement is effective for fiscal years beginning after November 15, 2007. We are evaluating the impact that this Statement will have on the Company’s financial position, results of operations and cash flows.
Fair Value Option
     In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. This Statement permits entities to choose to measure many financial instruments and certain other items at fair value. This Statement is effective for fiscal years beginning after November 15, 2007. The adoption of this Statement is not expected to have a material impact on our financial position, results of operations or cash flows.
ITEM 3.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
     In addition to the risks inherent in its 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 Prices
     We are exposed to fluctuations in commodity prices through the purchase of raw materials that are processed from commodities such as aluminum, steel, wood and polyethylene. Given the historical volatility of certain commodity prices, this exposure can significantly impact product costs. Historically, we have managed aluminum price changes by entering into fixed price contracts with our suppliers. As of September 30, 2007, we had $26.6 million in raw material purchase commitments through June 2008 for materials that will be used in the production process. We typically do not set prices for our products more

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than 45-90 days in advance of our commodity purchases and can, subject to competitive market conditions, take into account the cost of the commodity in setting our prices for each order. 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.
Interest Rates
     As of September 30, 2007, we had no floating rate debt outstanding. For the three-month period ending September 30, 2007, we maintained an average floating rate borrowing level of $0.2 million. A hypothetical 100 basis-point change in the floating interest rate from the current level would have an immaterial impact on interest expense over a one-year period. This sensitivity analysis does not account for a change in the competitive environment indirectly related to the change in interest rates and potential managerial action taken in response to these changes.
Foreign Exchange Rates
     We are subject to fluctuations in the Canadian dollar exchange rate that impact United States dollar denominated transactions between our Canadian subsidiary and unrelated parties. A five cent change in the Canadian exchange rate would result in an immaterial impact on our results of operations. We do not hold or issue derivative financial instruments.
ITEM 4.      CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
     Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures (as defined in Rules 14a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act)) were effective as of September 30, 2007.
Changes in Internal Controls
     There were no changes in the Company’s internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during the second quarter of fiscal 2007 that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.
PART II — OTHER INFORMATION
ITEM 1A.      RISK FACTORS
     You should carefully consider the risks described in our Annual Report on Form 10-K, as amended, for the year ended December 31, 2006, including those under the heading “Risk Factors” appearing in Item 1A of Part I of the Form 10-K, as amended, and other information contained in this Quarterly Report before investing in our securities. Realization of any of these risks could have a material adverse effect on our business, financial condition, cash flows and results of operations.

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ITEM 2.      UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
     Our Board of Directors approved an amendment to the current stock repurchase program (Repurchase Program) on July 26, 2007, extending the Repurchase Program from September 15, 2007 to September 15, 2008. The Repurchase Program allows repurchases of common stock up to $50 million.
     For the quarter ending September 30, 2007, we made the following repurchases of common stock:
                         
                    Maximum Amount of
    Total Number           Available Funds to
    of Shares   Average Price   Purchase Shares Under
Period   Purchased   Paid Per Share   the Repurchase Program
 
                  (in millions)
July 2007
    209,600     $ 14.32     $ 25.8  
ITEM 6.      EXHIBITS
(a)      Exhibits:
     
10.1
  Amendment No. 1 to Second Amended and Restricted Loan and Security Agreement (Incorporated by reference to Exhibit 10.4 to the Registrants current Report on Form 8-K filed September 26, 2007 (File No. 1-10883))
31.01
  Certification of Principal Executive Officer
31.02
  Certification of Principal Financial Officer
32.01
  Written Statement of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
         
      WABASH NATIONAL CORPORATION
 
 
              Date: November 2, 2007  By:   /s/ Robert J. Smith    
    Robert J. Smith   
    Senior Vice President and Chief Financial Officer
(Principal Financial Officer) 
 
 

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