Wabash National Annual Report 2008

Plain-text annual report

Table of ContentsUNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549Form 10-K(Mark One)  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2008 ORoo TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 1-10883WABASH NATIONAL CORPORATION(Exact name of registrant as specified in its charter) Delaware(State or other jurisdiction ofincorporation or organization)1000 Sagamore Parkway South Lafayette, Indiana (Address of Principal Executive Offices) 52-1375208 (IRS EmployerIdentification Number)47905(Zip Code)Registrant’s telephone number, including area code: (765) 771-5300Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Common Stock, $.01 Par Value New York Stock ExchangeSeries D Preferred Share Purchase Rights New York Stock ExchangeSecurities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No  Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No  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 of1934 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 suchfiling requirements for the past 90 days. Yes  No o Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, tothe best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendmentto this Form 10-K. o Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. Seedefinitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):Large accelerated filer oAccelerated filer Non-accelerated filer oSmaller reporting company o (Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No  The aggregate market value of voting stock held by non-affiliates of the registrant as of June 30, 2008 was $226,731,786 based upon the closing priceof the Company’s common stock as quoted on the New York Stock Exchange composite tape on such date. The number of shares outstanding of the registrant’s common stock as of April 8, 2009 was 31,153,669. Part III of this Form 10-K incorporates by reference certain portions of the registrant’s Proxy Statement for its Annual Meeting of Stockholders to befiled within 120 days after December 31, 2008. TABLE OF CONTENTSWABASH NATIONAL CORPORATIONFORM 10-K FOR THE FISCALYEAR ENDED DECEMBER 31, 2008 PagesPART I Item 1 Business 3 Item 1A Risk Factors 12 Item 1B Unresolved Staff Comments 18 Item 2 Properties 18 Item 3 Legal Proceedings 18 Item 4 Submission of Matters to a Vote of Security Holders 19 PART II Item 5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases ofEquity Securities 19 Item 6 Selected Financial Data 21 Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations 22 Item 7A Quantitative and Qualitative Disclosures about Market Risk 36 Item 8 Financial Statements and Supplementary Data 38 Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 65 Item 9A Controls and Procedures 66 Item 9B Other Information 68 PART III Item 10 Executive Officers of the Registrant 68 Item 11 Executive Compensation 68 Item 12 Security Ownership of Certain Beneficial Owners and Management and Related StockholderMatters 68 Item 13 Certain Relationships and Related Transactions, and Director Independence 68 Item 14 Principal Accounting Fees and Services 68 PART IV Item 15 Exhibits and Financial Statement Schedules 69 SIGNATURES 71 EX-21.00 EX-23.01 EX-31.01 EX-31.02 EX-32.012Table of ContentsFORWARD LOOKING STATEMENTSThis Annual Report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21Eof the Securities Exchange Act of 1934 (the “Exchange Act”). Forward-looking statements may include the words “may,” “will,”“estimate,” “intend,” “continue,” “believe,” “expect,” “plan” or “anticipate” and other similar words. Our “forwarding-lookingstatements” include, but are not limited to, statements regarding: • our business plan; • our expected revenues, income or loss and capital expenditures; • plans for future operations; • financing needs, plans and liquidity; • our ability to achieve sustained profitability; • reliance on certain customers and corporate relationships; • availability and pricing of raw materials; • availability of capital; • dependence on industry trends; • the outcome of any pending litigation; • export sales and new markets; • engineering and manufacturing capabilities and capacity; • acceptance of new technology and products; • government regulation; and • assumptions relating to the foregoing.Although we believe that the expectations expressed in our forward-looking statements are reasonable, actual results could differmaterially from those projected or assumed in our forward-looking statements. Our future financial condition and results of operations, aswell as any forward-looking statements, are subject to change and are subject to inherent risks and uncertainties, such as those disclosedin this Annual Report. Each forward-looking statement contained in this Annual Report reflects our management’s view only as of the dateon which that forward-looking statement was made. We are not obligated to update forward-looking statements or publicly release theresult of any revisions to them to reflect events or circumstances after the date of this Annual Report or to reflect the occurrence ofunanticipated events.Currently known risks and uncertainties that could cause actual results to differ materially from our expectations are describedthroughout this Annual Report, including in “Item 1A. Risk Factors”. We urge you to carefully review that section for a more completediscussion of the risks of an investment in our securities.PART IITEM 1 — BUSINESSFounded in 1985 as a start-up company, Wabash National Corporation (“Wabash,” “Company,” “us,” “we” or “our”) is one ofNorth America’s leaders in designing, manufacturing and marketing standard and customized truck trailers and related transportationequipment. We believe our success has been the result of our longstanding relationships with our core customers, our demonstrated abilityto attract new customers, our broad and innovative product lines, our technological leadership and our large distribution and servicenetwork. Our management team is focused on rightsizing our manufacturing and retail operations to match the current demandenvironment, implementing our cost savings initiatives, strengthening our capital structure, developing innovative products, improvingearnings and selective production introductions that meet the needs of our customers.3Table of ContentsWe seek to identify and produce proprietary products that offer exceptional value to customers with the potential to generate higherprofit margins than those of standardized products. We believe that we have the engineering and manufacturing capability to producethese products efficiently. We introduced our proprietary composite product, DuraPlate, in 1996. Composite trailers have achievedwidespread industry acceptance accounting for approximately one out of every three dry van trailers sold in 2008. Since 2002, sales ofour DuraPlate trailers represented approximately 90% of our total new dry van trailer sales. We are also a competitive producer ofstandardized sheet and post and refrigerated trailer products and we strive to become the low-cost producer of these products within ourindustry. Through our Transcraft subsidiary we also manufacture steel flatbed and dropdeck trailers. As part of our commitment toexpand our customer base, diversify our revenues and extend our market leadership, Transcraft acquired in July 2008 certain operatingassets of Benson International LLC, and its affiliates (Benson), a manufacturer of aluminum flatbeds, dump trailers and other truckbodies. In addition, in December 2008, the Company announced a multi-year agreement to build and service all of PODS®1 portablestorage container requirements as part of our strategy to leverage our DuraPlate® panel technology into other industry segments. We expectto continue a program of product development and selective acquisitions of quality proprietary products that further differentiate us fromour competitors and increase shareholder value.We market our transportation equipment under the Wabash, DuraPlate, DuraPlateHD, FreightPro, ArcticLite®, RoadRailer®,Transcraft®, Eagle®, Eagle II®, D-Eagle® and BensonTM trademarks directly to customers, through independent dealers and through ourCompany-owned retail branch network. Historically, we have focused on our longstanding core customers representing many of thelargest companies in the trucking industry. Our relationships with our core customers have been central to our growth since inception.Beginning in 2003, we have actively pursued the diversification of our customer base by focusing on what we refer to as the mid-market.These carriers, which represent approximately 1,250 carriers, operate fleets of between 250 to 7,500 trailers, which we estimate in totalaccount for approximately one million trailers.Longstanding core customers include — Averitt Express, Inc.; Crete Carrier Corporation; FedEx Corporation; Heartland Express,Inc.; J.B. Hunt Transport Services, Inc.; Knight Transportation, Inc.; Old Dominion Freight Lines, Inc.; SAIA Motor Freightlines, Inc.;Schneider National, Inc.; Swift Transportation Corporation; U.S. Xpress Enterprises, Inc.; Werner Enterprises, Inc.; and YRCWorldwide, Inc.Mid-market customers include — Alliance Shippers, Inc.; Aurora LLC; C&S Wholesale Grocers, Inc.; CR England, Inc.; CeladonGroup, Inc.; Con-way Truckload (formerly CFI); Cowan Systems, LLC; Frozen Food Express Industries, Inc.; Gordon Trucking, Inc.;Landair Transport, Inc.; New Penn Motor Express, Inc.; Prime, Inc.; Roehl Transport, Inc.; Star Transport, Inc.; USA Logistics; USFCorporation; and Xtra Lease, Inc.Our 11 Company-owned full service retail branches provide additional opportunities to distribute our products and also offernationwide services and support capabilities for our customers. In addition, we maintain four used fleet sales centers to focus on sellingboth large and small fleet trade packages to the wholesale market. Our retail branch network’s sale of new and used trailers, aftermarketparts and service through our retail branch network generally provides enhanced margin opportunities. We also utilize a network ofapproximately 24 independent dealers with approximately 48 locations throughout North America to distribute our van trailers. Inaddition, we distribute our flatbed and dropdeck trailers through a network of over 80 independent dealers with approximately 110locations throughout North America.Wabash was incorporated in Delaware in 1991 and is the successor by merger to a Maryland corporation organized in 1985. Weoperate in two reportable business segments: (1) manufacturing and (2) retail and distribution. Financial results by segment, includinginformation about revenues from customers, measures of profit and loss, total assets, and financial information regarding geographicareas and export sales are discussed in Note 15, Segments and Related Information, of the accompanying Consolidated FinancialStatements. Our internet website is www.wabashnational.com. We make our electronic filings with the SEC, including our annual reportson Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to these reports available on our websitefree of charge as soon as practicable after we file or furnish them with the SEC. Information on the website is not part of this Form 10-K. 1 PODS® is a registered trademark of PODS, Inc. and Pods Enterprises, Inc.4Table of ContentsStrategyWe are committed to a corporate strategy that seeks to maximize shareholder value by executing on the core elements of our strategicplan: • Value Creation. We intend to continue our focus on improved earnings and cash flow. • Operational Excellence. We are focused on reducing our cost structure by adhering to continuous improvement and leanmanufacturing initiatives. • People. We recognize that in order to achieve our strategic goals we must continue to develop the organization’s skills to advanceour associates capabilities and to attract talented people. • Customer Focus. We have been successful in developing longstanding relationships with core customers and we intend tomaintain these relationships while expanding new customer relationships through the offering of tailored transportation solutionsto create new revenue opportunities. • Innovation. We intend to continue to be the technology leader by providing new differentiated products and services thatgenerate enhanced profit margins. • Corporate Growth. We intend to expand our product offering and competitive advantage by entering new markets andacquiring strong brands to grow and diversify the Company.In addition, the Board of Directors has authorized management to pursue and evaluate a wide range of strategic alternatives,including, but not limited to, select business divestitures, changes to our capital structure, or a possible sale, merger or other businesscombination. There can be no assurance that this review will result in any specific transaction.Industry and CompetitionTrucking in the U.S., according to the American Trucking Association (ATA), was estimated to be a $650 billion industry in2008, representing about 5% of U.S. Gross Domestic Product. The ATA estimates that approximately 70% of all freight tonnage is carriedby trucks at some point during its shipment. Trailer demand is a direct function of the amount of freight to be transported. As theeconomy improves, it is forecasted that truck carriers will need to both expand and replace their fleets, which typically results inincreased trailer orders. According to A.C.T. Research Co., LLC (ACT), there are approximately 3.0 million trailers in use today and totaltrailer replacement demand is estimated at approximately 185,000 trailers per year.Transportation in the U.S., including trucking, is a cyclical industry. Transportation has experienced three cycles over the last20 years. Truck freight tonnage, according to ATA statistics, has been negative year-over-year since mid-2006 through most of 2007.Even though tonnage volumes increased 0.7% year-over-year in 2008, recent data shows further weakening of freight tonnage. Three U.S.economic downturns have occurred during the last 20 years and in each instance the decline in freight tonnage preceded the generaleconomic decline by approximately two and one-half years and its recovery has generally preceded that of the economy as a whole. Thetrailer industry generally follows the transportation industry, experiencing cycles in the early and late 90’s lasting approximately 58 and67 months, respectively. The current cycle began in early 2001 and, based on current ACT estimates, appears to be approaching thebottom. In our view, an upturn in the trailer industry will require improvements in general freight demand, improved credit markets, anda recovery of the housing and construction markets.Wabash, Great Dane and Utility are generally viewed as the top three trailer manufacturers and have accounted for greater than 50%of new trailer market share in recent years, including approximately 55% in 2008. In 2008, our market share of total trailer shipmentswas approximately 23%. Trailer manufacturers compete primarily through the quality of their products, customer relationships, serviceavailability and cost.The table below, as provided by Trailer Body Builders Magazine, sets forth new trailer production for Wabash, its largestcompetitors and for the trailer industry as a whole within North America. The data represents all segments of the market, exceptcontainers and chassis. For the years included below, we have primarily participated in the van segment of the market. In addition,through our recent acquisitions of Transcraft Corporation in March5Table of Contents2006 and select assets of Benson in July 2008, we also participate in the platform and dump trailer segments. Van production has grownfrom a low of approximately 96,000 units in 2002 to a high of approximately 198,000 units in 2006. In 2008, van trailer productionamounted to 98,000 units. For the current year, our market share for van trailers was approximately 30%, an increase from 2007 of over3%. 2008 2007 2006 2005 2004 2003 Wabash(1) 32,000 46,000 60,000(2) 52,000 48,000 36,000 Great Dane 29,000 48,000 60,000 55,000 55,000 41,000 Utility 23,000 31,000 37,000 34,000 31,000 24,000 Hyundai Translead 7,000 13,000 14,000 12,000 9,000 9,000 Stoughton 5,000 11,000 19,000 17,000 15,000 9,900 Other principal producers 20,000 25,000 40,000 34,000 33,000 25,000 Total Industry 152,000 218,000(3) 283,000(3) 245,000 228,000 174,000(3) (1) Does not include approximately 700, 2,300, 1,500 and 1,300 intermodal containers in 2006, 2005, 2004 and 2003, respectively. (2) The 2006 production includes Transcraft volumes on a full-year pro forma basis. (3) Data revised by publisher in a subsequent year.Competitive StrengthsWe believe our core competitive strengths include: • Long-Term Core Customer Relationships — We are the leading provider of trailers to a significant number of top tiertrucking companies, generating a revenue base that has helped to sustain us as one of the market leaders. • Innovative Product Offerings — Our DuraPlate proprietary technology offers what we believe to be a superior trailer, whichcommands premium pricing. A DuraPlate trailer is a composite plate trailer using material that contains a high-densitypolyethylene core bonded between a high-strength steel skin. We believe that the competitive advantages of our DuraPlatetrailers compared to standard trailers include the following: – Extended Service Life — operate three to five years longer; – Lower Total Cost of Ownership — less costly to maintain; – Less Downtime — higher utilization for fleets; – Extended Warranty — warranty period for DuraPlate panels is ten years; and – Improved Resale — higher trade-in values. We have been manufacturing DuraPlate trailers for over 13 years and through December 2008 have sold approximately 360,000units. This proven experience, combined with ownership and knowledge of the DuraPlate panel technology, helps ensurecontinued industry leadership in the future. We have also successfully introduced innovations in our ArcticLite® refrigeratedtrailers and other product lines. For example, we introduced the DuraPlateHD® trailer and the FreightPro® sheet and post trailerin 2003. • Significant Market Share and Brand Recognition — We have been one of the two largest manufacturers of trailers in NorthAmerica since 1994, with one of the most widely recognized brands in the industry. We are one of the largest producers of vantrailers in North America. Our Transcraft subsidiary, acquired in March 2006, has been the second leading producer ofplatform trailers over this time period. • Committed Focus on Operational Excellence — Safety, quality, on-time delivery, productivity and cost reduction are thecore elements of our program of continuous improvement. We currently maintain an ISO 14001 registration of ourEnvironmental Management System. • Technology — We are recognized by the trucking industry as a leader in developing technology to reduce trailer maintenance. In2008, we completed the standardization of all dry and refrigerated van products. This effort is expected to result inmanufacturing and efficiency improvements and part and repair commonality for all of these products. Also in 2008, weintroduced our first products made with6Table of Contents structural adhesives instead of mechanical fasteners. The use of adhesives results in improved appearance, leak reduction, andtrailers that are easier and faster to repair. During 2007, we introduced to our customers fuel saving technologies on DuraPlatetrailers with the Smartway® certification, as approved by the U.S. Environmental Protection Agency. In 2006, we introduced ahigh performance liner for our refrigerated trailers, which helps reduce interior damage and associated maintenance costs. Also in2006, we introduced a DuraPlate trailer built on our new semi-automated Alpha production line. This technology has changedthe way that trailers are traditionally manufactured and increases both efficiency of manufacturing and the quality of finishedproducts. • Corporate Culture — We benefit from a value driven management team and dedicated workforce. • Extensive Distribution Network — Our 11 Company-owned retail branches and four used trailer locations extend our salesnetwork throughout North America, diversify our factory direct sales, provide an outlet for used trailer sales and support ournational service contracts. Additionally, we utilize a network of approximately 24 independent dealers with approximately 48locations throughout North America to distribute our van trailers, and our Transcraft distribution network consists of over 80independent dealers with approximately 110 locations throughout North America.RegulationTruck trailer length, height, width, maximum weight capacity and other specifications are regulated by individual states. Thefederal government also regulates certain safety features incorporated in the design of truck trailers, including regulations that require anti-lock braking systems (ABS) and that define rear-impact guard standards. Manufacturing operations are subject to environmental lawsenforced by federal, state and local agencies (see “Environmental Matters”).ProductsSince our inception, we have expanded our product offerings from a single truck trailer product to a broad range of trailer-relatedtransportation equipment. Our manufacturing segment specializes in the development of innovative proprietary products for our keymarkets. Manufacturing segment sales represented approximately 83%, 86% and 85% of consolidated Wabash net sales in 2008, 2007and 2006, respectively. Our current transportation equipment products primarily include the following: • DuraPlate Trailers. DuraPlate trailers utilize a proprietary technology that consists of a composite plate wall for increaseddurability and greater strength. Our DuraPlate trailers include our DuraPlateHD, a heavy duty version of our regularDuraPlate trailers. • Smooth Aluminum Trailers. Smooth aluminum trailers, commonly known as “sheet and post” trailers, are the commoditytrailer product purchased by the trucking industry. Starting in 2003, we began to market our FreightPro® trailer to provide acompetitive offering for this market segment. • Platform Trailers. Platform trailers are sold under Transcraft®, Eagle® and BensonTM trademarks. The acquisition of certainassets from Benson in July 2008 provides the ability to offer a premium all-aluminum platform trailer. Platform trailers consistof a trailer chassis with a flat or “drop” loading deck without permanent sides or a roof. These trailers are primarily utilized tohaul steel coils, construction materials and large equipment. • Refrigerated Trailers. Refrigerated trailers have insulating foam in the walls, roof and floor, which improves both theinsulation capabilities and durability of the trailers. Our refrigerated trailers use our proprietary SolarGuard® technology,coupled with our novel foaming process, which we believe enables customers to achieve lower costs through reduced operatinghours of refrigeration equipment and therefore reduced fuel consumption. • RoadRailer® Equipment. The RoadRailer® intermodal system is a patented bimodal technology consisting of a truck trailer anda detachable rail “bogie” that permits a trailer to run both over the highway and directly on railroad lines.7Table of Contents • Dump Equipment. The acquisition of certain assets from Benson in July 2008 provides the ability to offer premium aluminumand steel dump equipment sold under the name of BensonTM. This dump equipment is primarily used in the coal industry. • DuraPlate® Products. The DuraPlate® Products Group was initiated in 2008 to expand the use of DuraPlate® compositepanels, already a proven product in the semi-trailer market for over 13 years, into new product and market applications. InDecember we signed a multi-year agreement to build and service all of PODS® portable storage container requirements with ournew DuraPlate® container. We are actively exploring new opportunities to leverage proprietary technology into new industries andapplications.Our retail and distribution segment focuses on the sale of new and used trailers and on providing parts and service as describedbelow: • We sell new trailers produced by the manufacturing segment. Additionally, we sell specialty trailers produced by third partiesthat are purchased in smaller quantities for local or regional transportation needs. The sale of new transportation equipmentthrough the retail branch network represented approximately 8.2%, 6.5% and 7.0% of net sales during 2008, 2007 and 2006,respectively. • We provide replacement parts and accessories and maintenance service for our own and competitors’ trailers and relatedequipment. Sales of these products and service represented less than 5% of net sales during 2008, 2007 and 2006. • We sell used transportation equipment including units taken in trade from our customers upon the sale of new trailers. Theability to remarket used equipment promotes new sales by permitting trade-in allowances and offering customers an outlet for thedisposal of used equipment. The sale of used trailers represented less than 5% of net sales during 2008, 2007 and 2006,respectively.CustomersOur customer base has historically included many of the nation’s largest truckload common carriers, leasing companies, privatefleet carriers, less-than-truckload (LTL) common carriers and package carriers. We successfully diversified our customer base fromapproximately 60% of total units sold to large core customers in 2002 to approximately 30% in 2008 by continuing to expand our customerbase and by diversifying into the broader trailer market through the recent acquisitions of Transcraft and Benson assets. This has beenaccomplished while maintaining our relationships with our core customers. Our five largest customers together accounted forapproximately 35%, 20% and 20% of our aggregate net sales in 2008, 2007 and 2006, respectively. No single customer represented 10%or greater of net sales. International sales, primarily to Canadian customers, accounted for less than 10% of net sales for each of the lastthree years.We have established relationships as a supplier to many large customers in the transportation industry, including the following: • Truckload Carriers: Averitt Express, Inc.; Crete Carrier Corporation; Heartland Express, Inc.; J.B. Hunt Transport Services,Inc.; Knight Transportation, Inc.; Schneider National, Inc.; Swift Transportation Corporation; U.S. Xpress Enterprises, Inc.;and Werner Enterprises, Inc. • Leasing Companies: Aurora LLC; GE Trailer Fleet Services; and Xtra Lease, Inc. • Private Fleets: C&S Wholesale Grocers, Inc.; Dillard’s, Inc.; The Kroger Co.; and Safeway, Inc. • Less-Than-Truckload Carriers: FedEx Corporation; Old Dominion Freight Lines, Inc.; SAIA Motor Freightlines, Inc.; VitranExpress, Inc.; and YRC Worldwide, Inc.8Table of ContentsMarketing and DistributionWe market and distribute our products through the following channels: • factory direct accounts; • Company-owned distribution network; and • independent dealerships.Factory direct accounts are generally large fleets, with over 7,500 trailers, that are high volume purchasers. Historically, we havefocused on the factory direct market in which customers are highly knowledgeable of the life-cycle costs of trailer equipment and,therefore, are best equipped to appreciate the design and value-added features of our products. Since late 2003, we have actively pursuedthe diversification of our customer base focusing on what we refer to as the mid-market. These approximately 1,250 carriers operate fleetsof between 250 to 7,500 trailers, which we estimate in total account for approximately one million trailers. Since implementing our mid-market sales strategy, we have added approximately 280 new mid-market customers accounting for over 19,600 new trailer orders.Our Company-owned distribution network generates retail sales of trailers to smaller fleets and independent operators located ingeographic regions where our branches are located. This branch network enables us to provide maintenance and other services tocustomers. The branch network and our used trailer centers provide an outlet for used trailers taken in trade upon the sale of new trailers,which is a common practice with fleet customers.We also sell our van trailers through a network of approximately 24 independent dealers with over 48 locations throughout NorthAmerica. Our platform trailers are sold through over 80 independent dealers with approximately 110 locations throughout North America.The dealers primarily serve mid-market and smaller sized carriers and private fleets in the geographic region where the dealer is locatedand occasionally may sell to large fleets. The dealers may also perform service work for their customers.Raw MaterialsWe utilize a variety of raw materials and components including steel, plastic, aluminum, lumber, tires and suspensions, which wepurchase from a limited number of suppliers. Significant price fluctuations or shortages in raw materials or finished components mayadversely affect our results of operations. In 2009 and for the foreseeable future, we expect that the raw materials used in the greatestquantity will be steel, aluminum, plastic and wood. Our component suppliers have advised us that they have adequate capacity to meetour current and expected demands during 2009. In 2009, we expect there to be continued price volatility for our primary commodity rawmaterials of aluminum, steel and plastic. Our Harrison, Arkansas laminated hardwood floor facility provides the majority of ourrequirements for trailer floors.BacklogOrders that have been confirmed by the customer in writing and can be produced during the next 18 months are included in ourbacklog. Orders that comprise backlog may be subject to changes in quantities, delivery, specifications and terms. Our backlog of ordersat December 31, 2008 and 2007 were approximately $110 million and $336 million, respectively. We expect to complete the majority ofour backlog orders within the next 12 months.Patents and Intellectual PropertyWe hold or have applied for 57 patents in the U.S. on various components and techniques utilized in our manufacture oftransportation equipment. In addition, we hold or have applied for 62 patents in two foreign countries. Our patents include intellectualproperty related to the manufacture of trailers using our proprietary DuraPlate product, which we believe offers us a significantcompetitive advantage. The patents in our DuraPlate® portfolio have expiration dates ranging from 2009 to 2024. In our view there are nomeaningful patents having an expiration date prior to 2016.9Table of ContentsWe also hold or have applied for 42 trademarks in the U.S., as well as 25 trademarks in foreign countries. These trademarksinclude the Wabash®, Wabash National®, Transcraft® and BensonTM brand names as well as trademarks associated with ourproprietary products such as DuraPlate, RoadRailer, Eagle® and BensonTM trailers. We believe these trademarks are important for theidentification of our products and the associated customer goodwill; however, our business is not materially dependent on suchtrademarks.Research and DevelopmentResearch and development expenses are charged to earnings as incurred and were $3.2 million, $3.4 million and $4.3 million in2008, 2007 and 2006, respectively.Environmental MattersOur facilities are subject to various environmental laws and regulations, including those relating to air emissions, wastewaterdischarges, the handling and disposal of solid and hazardous wastes, and occupational safety and health. Our operations and facilitieshave been and in the future may become the subject of enforcement actions or proceedings for non-compliance with such laws or forremediation of company-related releases of substances into the environment. Resolution of such matters with regulators can result incommitments to compliance abatement or remediation programs and in some cases the payment of penalties (see Item 3 “LegalProceedings”).We believe that our facilities are in substantial compliance with applicable environmental laws and regulations. Our facilities haveincurred, and will continue to incur, capital and operating expenditures and other costs in complying with these laws and regulations.However, we currently do not anticipate that the future costs of environmental compliance will have a material adverse effect on ourbusiness, financial condition or results of operations.EmployeesAs of December 31, 2008 and 2007, we had approximately 2,800 and 3,100 full-time associates, respectively. At December 31,2008, all of our active associates were non-union. During 2008, less than 10% of our total production workforce included temporaryassociates. We place a strong emphasis on employee relations through educational programs and quality improvement teams. We believeour employee relations are good.Executive Officers of Wabash National CorporationThe following are the executive officers of the Company:Name Age PositionRichard J. Giromini 55 President and Chief Executive Officer, DirectorLawrence M. Cuculic 52 Senior Vice President — General Counsel and SecretaryRodney P. Ehrlich 62 Senior Vice President — Chief Technology OfficerBruce N. Ewald 57 Senior Vice President — Sales and MarketingTimothy J. Monahan 56 Senior Vice President — Human ResourcesRobert J. Smith 62 Senior Vice President — Chief Financial OfficerJoseph M. Zachman 48 Senior Vice President — Chief Operating OfficerRichard J. Giromini. Mr. Giromini was promoted to President and Chief Executive Officer on January 1, 2007. He had beenExecutive Vice President and Chief Operating Officer from February 28, 2005 until December 2005 when he was appointed President anda Director of the Company. Prior to that, he had been Senior Vice President — Chief Operating Officer since joining the Company on July15, 2002. Mr. Giromini was with Accuride Corporation from April 1998 to July 2002, where he served in capacities as Senior VicePresident — Technology and Continuous Improvement; Senior Vice President and General Manager — Light Vehicle Operations; andPresident and CEO of AKW LP. Previously, Mr. Giromini was employed by ITT Automotive, Inc. from 1996 to 1998 serving as theDirector of Manufacturing. Mr. Giromini also serves on the board of directors of Robbins & Myers, Inc., a global supplier of highlyengineered equipment and systems for critical applications in energy, industrial, chemical and pharmaceutical markets, which he joinedin October 2008. Mr. Giromini holds a Bachelor of Science degree in mechanical and industrial engineering and a Master of Science degreein industrial management, both from Clarkson10Table of ContentsUniversity. He is a graduate of the Advanced Management Program at the Duke University Fuqua School of Management.Lawrence M. Cuculic. Mr. Cuculic was named Senior Vice President — General Counsel and Secretary in January 2008. Prior tothat, from August 2006 through December 2007, Mr. Cuculic was Vice President Legal and Secretary of American Commercial LinesInc., a diversified marine transportation and service company. Mr. Cuculic served as Corporate Counsel for Wabash fromSeptember 2002 to August 2006. Prior to that date he was engaged in private practice serving as outside counsel for the Company.Mr. Cuculic retired as a Lieutenant Colonel from the United States Army after 20 years, holding various legal positions of increasingresponsibility, including appointment as a Circuit Judge. Mr. Cuculic holds a Bachelor of Science degree from the United States MilitaryAcademy, West Point, and a Juris Doctor degree from the University of Notre Dame Law School.Rodney P. Ehrlich. Mr. Ehrlich has been Senior Vice President — Chief Technology Officer of the Company since January 2004.From 2001 to 2003, Mr. Ehrlich was Senior Vice President of Product Development. Mr. Ehrlich has been in charge of the Company’sengineering operations since the Company’s founding. Prior to Wabash National, Mr. Ehrlich started with Monon Trailer Corporation in1963 working various positions until becoming Chief Engineer in 1973, Director of Engineering in 1978, and serving until joining thefounders of Wabash National in 1985. Mr. Ehrlich has obtained over 50 patents in trailer related design during his 45 year trailer career.Mr. Ehrlich holds a Bachelor of Science degree in Mechanical Engineering from Purdue University.Bruce N. Ewald. Mr. Ewald’s original appointment was Vice President and General Manager of Wabash National Trailer Centers,Inc. when he joined the Company in March 2005. In October 2005, he was promoted to Senior Vice President — Sales and Marketing.Mr. Ewald has nearly 25 years experience in the transportation industry. Most recently, Mr. Ewald was with PACCAR from 1991 toFebruary 2005 where he served in a number of executive-level positions. Prior to PACCAR, Mr. Ewald spent 10 years with Genuine PartsCo. where he served in several positions, including President and General Manager, Napa Auto Parts/Genuine Parts Co. Mr. Ewald holdsa Bachelor of Science degree in Business from the University of Minnesota.Timothy J. Monahan. Mr. Monahan has been Senior Vice President — Human Resources since joining the Company onOctober 15, 2003. Prior to that, Mr. Monahan was with Textron Fastening Systems from 1999 to October 2003 where he served as VicePresident — Human Resources for the Commercial Solutions Group and later Global Vice President — Human Resources. Previously,Mr. Monahan served as Vice President — Human Resources at Beloit Corporation. Mr. Monahan serves on the board of directors ofNorth American Tool Corporation, a global producer of special cutting tools. He holds a Bachelor of Science degree from Milton Collegeand has attended the Duke University Fuqua School of Management — Executive Management Program.Robert J. Smith. Mr. Smith was appointed Senior Vice President — Chief Financial Officer in October 2004, after serving as ourActing Chief Financial Officer since June 2004, and our Vice President and Controller since joining us in March 2003. Before joining us,Mr. Smith served from 2000 to 2001 as Director of Finance for KPMG Consulting, Inc., now BearingPoint, Inc.; from 1993 to 2000 withGreat Lakes Chemical Corp. (serving from 1998 to 2000 as vice president and controller); and from 1983 to 1993 with OlinCorporation, including as chief financial officer for several of its divisions. Early in his career he spent 11 years with Peat, Marwick,Mitchell & Co., a predecessor to KPMG LLP. Mr. Smith earned his Bachelor of Arts degree in Economics from Fairfield University andattended the Masters Program in Finance at Pace University.Joseph M. Zachman. In March 2008, Mr. Zachman was appointed to Senior Vice President — Chief Operating Officer.Mr. Zachman joined the Company in May 2005 as Vice President of Manufacturing and in June 2006 he was promoted to Senior VicePresident — Manufacturing. Prior to joining Wabash in May 2005, Mr. Zachman was with TTM Technologies where he served as VicePresident and General Manager from December 2002 until December 2004. Previously, Mr. Zachman served as President of CDRCorporation from September 2001 until December 2002; Director of Operations of Sanmina Corporation from September 1997 untilSeptember 2001; and worked at Delco Electronics Corporation from January 1984 until September 1997 where he served in numerouspositions of increasing responsibility in engineering and manufacturing management. Mr. Zachman holds a Bachelor of Science degreefrom Purdue University and Masters of Sciences degree from Kettering University (formerly GMI). He is a graduate of the AdvancedManagement Program at the Duke University Fuqua School of Management.11Table of ContentsITEM 1A — RISK FACTORSYou should carefully consider the risks described below in addition to other information contained or incorporated by reference inthis Annual Report before investing in our securities. Realization of any of the following risks could have a material adverse effect on ourbusiness, financial condition, cash flows and results of operations.Risks Related to Our Business, Strategy and OperationsThere is substantial doubt about our ability to continue as a going concern.In our consolidated financial statements for the year ended December 31, 2008, we have classified all amounts outstanding underour Second Amended and Restated Loan and Security Agreement (Revolving Facility) as a current liability. As a result of this, the adverseconditions in the economy in general and the trailer industry in particular, and the other factors discussed in Note 1 to our consolidatedfinancial statements for the year ended December 31, 2008, our independent registered public accounting firm has included anexplanatory paragraph with respect to our ability to continue as a going concern in its report on our consolidated financial statements. Thepresence of the going concern explanatory paragraph may have an adverse impact on our relationship with third parties with whom we dobusiness, including our customers, vendors and employees and could make it challenging and difficult for us to raise additional debt orequity financing to the extent needed, all of which could have a material adverse impact on our business, results of operations andfinancial condition.We are in default under our Revolving Facility, and the lenders could, among other actions, terminate the facility and demandimmediate repayment of any outstanding debt.While we were in compliance with our financial covenants under our Revolving Facility at December 31, 2008, subsequent to yearend, events of default have occurred under the Revolving Facility which permits the lenders to increase the interest on the outstandingprincipal by 2%, to cause an acceleration of the maturity of borrowings, to restrict advances, and to terminate the Revolving Facility. OnApril 1, 2009, we received written notice from the administrative agent for the Revolving Facility asserting the existence of events ofdefault under the Revolving Facility relating to the failure to deliver the required financial statements, failure to deliver notice of the changein name of a Company subsidiary, and requests for borrowings during the pendency of an event of default. In accordance with the termsof the Revolving Facility, as of April 1, 2009, the agent has increased the interest on the outstanding principal under the RevolvingFacility by 2% and implemented availability reserves that result in a reduction of our borrowing base under the Revolving Facility by$25 million.In addition to the events of default for which the agent has already provided notice, on April 1, 2009, we also incurred an event ofdefault related to our borrowing capacity and fixed charge coverage ratio. Our Revolving Facility contains a financial covenant thatprovides that when our available borrowing capacity drops below $30 million, we are subject to a minimum fixed charge coverage ratio of1.1:1.0. As a result of draws on April 1, 2009, our available borrowing capacity is now below $30 million and we do not meet the fixedcharge coverage ratio requirements. Furthermore, because the report of our independent registered public accounting firm contained in thisForm 10-K includes an explanatory paragraph with respect to our ability to continue as a going concern, we have incurred an additionalevent of default.Our Revolving Facility provides that as a result of the events of default identified in the written notice of the administrative agent, aswell as the other events of defaults referenced above, our lenders could elect to declare all amounts outstanding under the RevolvingFacility, together with accrued interest, to be immediately due and payable. While the administrative agent’s notice did not terminate theRevolving Facility or demand immediate repayment of any outstanding debt and the payment of accrued interest thereunder, it doesreserve the rights of the lenders to do any of the foregoing or seek any other available remedies. There can be no assurance that theseactions will not occur at any time as a result of the events of default referenced in the notice or the occurrence of other events of default.We are in discussions with the lenders concerning the aforementioned events of default and negotiation of a forbearance agreement toaddress the consequences of the defaults and to provide additional liquidity while we continue discussions to amend the RevolvingFacility and to waive any events of default. There can be no assurance that a forbearance agreement will be entered into or that anamendment or waiver will be obtained.12Table of ContentsWe have limited liquidity and may need to arrange for additional liquidity on terms that are unfavorable to our stockholders,if we are able to obtain additional liquidity at all.Our liquidity remains constrained such that it may not be sufficient to meet our cash operating needs in this period of economicuncertainty. Our ability to fund our working capital needs and capital expenditures is limited by the net cash provided by operations,cash on hand and the liquidity available under the Revolving Facility. Additional declines in net cash provided by operations, furtherdecreases in the availability under the Revolving Facility or changes in the credit our suppliers provide to us, could rapidly exhaust ourliquidity. Our inability to increase our liquidity would adversely impact our future performance, operations and results of operations. Ourliquidity problems have worsened as a result of the events of default under our Revolving Facility. There is no assurance that we will beable to enter into a forbearance agreement under our Revolving Facility. Additionally, even if we are able to enter into a forbearanceagreement, we believe that an amendment and waiver will also be necessary under our Revolving Facility. There can be no assurance thata forbearance agreement will be entered into or that an amendment or waiver will be obtained.In order to increase our liquidity, a forbearance agreement and amendment and waiver to our Revolving Facility will likely not beenough. We will likely need to issue new common equity, preferred equity, or obtain modification to, or additional sources of, debt. Anynew issuance may take the form of public or private offerings for debt or equity. Our ability to obtain additional liquidity will dependupon a number of factors, including our future performance and financial results and general economic and capital market conditions.We cannot be sure that we will be able to raise additional capital on commercially reasonable terms, or at all.Our continued failure to comply with the financial covenants contained in our Revolving Facility could have a material adverseimpact on our business as a whole.In addition to the current events of default under our Revolving Facility, we may be subject to further events of default in the future.The Revolving Facility includes certain covenants that restrict, among other things, our ability to: • incur additional debt; • pay any distributions, including dividends on our common stock in excess of $20 million per year, so long as no event ofdefault is continuing; • consolidate, merge or transfer all or substantially all of our assets; • make certain investments, loans, mergers and acquisitions; • enter into operating leases with aggregate rentals payable in excess of $10 million during any 12 consecutive months; and • create certain liens.Our current Revolving Facility has a stated capacity of $200 million, subject to a borrowing base, with a maturity date of March 6,2012. Borrowing capacity is calculated weekly, monthly or quarterly based on availability levels using allowable percentages of eligibleaccounts receivable and inventory as well as appraised property values, net of required depreciation. Availability under the RevolvingFacility has been impacted negatively in light of the current market demand for trailers. As a result of the current events of default, theagent for the Revolving Facility reduced our availability by a $25 million reserve. The Revolving Facility contains a financial covenantthat provides that when our available borrowing capacity drops below $30 million, we are subject to a minimum fixed charge coverageratio of 1.1:1.0. As a result of draws on April 1, 2009, our available borrowing capacity is now below $30 million and we do not meet thefixed charge coverage ratio requirements. Because we do not meet the fixed charge coverage ratio requirements, we have incurred anadditional default under the Revolving Facility and our lenders could now elect to declare all amounts outstanding under our debtagreements, together with accrued interest, to be immediately due and payable.The Revolving Facility also contains additional customary affirmative covenants and events of default, including among otherevents, certain cross defaults, business disruption, condemnation and change in ownership. In addition, a material adverse effect clause,which permits the lenders to subjectively determine when a material13Table of Contentsadverse change in our business or financial condition occurs, could result in an event of default and an early termination of our RevolvingFacility.Our Board of Directors has authorized management to pursue and evaluate a wide range of strategic alternatives, whichmay not result in a favorable transaction for our stockholders.The Board of Directors has also authorized management to pursue and evaluate a wide range of strategic alternatives. Strategicalternatives to be considered may include, but are not limited to, select business divestitures, changes to our capital structure, or apossible sale, merger or other business combination. There can be no assurance that this evaluation will result in any specific transaction.Furthermore, our current financial condition could result in a weakened negotiating position if we do enter into a strategic transaction, andthat could impact our ability to maximize value for our stockholders and could result in a transaction that is not as favorable to ourstockholders as it otherwise might have been,Recent turmoil in the credit markets and the financial services industry has had a negative impact on our business, results ofoperations, financial condition and liquidity.Recently, the credit markets and the financial services industry have been experiencing a period of unprecedented turmoil andupheaval characterized by the bankruptcy, failure, collapse or sale of various financial institutions, an unprecedented level of interventionfrom the United States federal government and foreign governments and tighter availability of credit. While the ultimate outcome of theseevents cannot be predicted, our liquidity and financial condition would worsen if our ability to borrow money to finance operations orobtain credit from trade creditors were to deteriorate from its current state. In addition, the recent economic crisis may adversely impactour customers’ ability to purchase or pay for products from us or our suppliers’ ability to provide us with product. If these adverseconditions continue or worsen, our business and results of operations will be negatively impacted.Our business is highly cyclical, which has had, and could have further, adverse affects on our sales and results of operations.The truck trailer manufacturing industry historically has been and is expected to continue to be cyclical, as well as affected byoverall economic conditions. Customers historically have replaced trailers in cycles that run from five to 12 years, depending on serviceand trailer type. Poor economic conditions can adversely affect demand for new trailers and have historically and has currently, led to anoverall aging of trailer fleets beyond this typical replacement cycle. Customers’ buying patterns can also reflect regulatory changes, suchas federal hours-of-service rules and federal emissions standards.While we have taken steps to diversify the Company through the implementation of our strategic plan, we are not immune to thecyclicality. As a result, during downturns, we operate with a lower level of backlog and have had to temporarily slow down or haltproduction at some or all of our facilities, including idling our Mt. Sterling, Kentucky facility that we are now holding for sale, extendingnormal shut down periods, and reducing salaried headcount levels. We could be forced to further slow down or halt additionalproduction. An economic downturn may reduce, and in the current situation has reduced, demand for trailers, resulting in lower salesvolumes, lower prices and decreased profits and losses.A change in our customer relationships or in the financial condition of our customers has had, and could have further, adverseaffects on our business.We have longstanding relationships with a number of large customers to whom we supply our products. We do not have long-termagreements with these customers. Our success is dependent, to a significant extent, upon the continued strength of these relationships andthe growth of our core customers. We often are unable to predict the level of demand for our products from these customers, or the timingof their orders. In addition, the same economic conditions that adversely affect us also often adversely affect our customers and in thecurrent environment has led to reduced demand. As some of our customers are highly leveraged and have limited access to capital, theircontinued existence may be uncertain. The loss of a significant customer or unexpected delays in product purchases could furtheradversely affect our business and results of operations.14Table of ContentsDemand for new trailers has been and will continue to be sensitive to economic conditions over which we have no control andthat may further adversely affect our revenues and profitability.Demand for trailers is sensitive to changes in economic conditions such as the level of employment, consumer confidence, consumerincome, new housing starts, government regulations and the availability of financing and interest rates. These risks and uncertaintiesperiodically have an adverse effect on truck freight and the demand for and the pricing of our trailers, which has, and could further,result in the inability of customers to meet their contractual terms or payment obligations, which could further cause our operatingrevenues and profits to decline.Our backlog is not necessarily indicative of the level of our future revenues.Our backlog is future production for which we have written orders from our customers that can be produced or sold in the next18 months. Our reported backlog may not be converted to revenue in any particular period and actual revenue from such orders may notequal our backlog revenues. Therefore, our backlog is not necessarily indicative of the level of our future revenues.Our technology and products may not achieve market acceptance or competing products could gain market share, which couldadversely affect our competitive position.We continue to optimize and expand our product offerings to meet our customer needs through our established brands, such asDuraPlate®, DuraPlateHD®, FreightPro®, ArcticLite®, Transcraft Eagle® and BensonTM. While we target product development to meetcustomer needs, there is no assurance that our product development efforts will be embraced and that we will meet our sales projections.Companies in the truck transportation industry, a very fluid industry in which our customers primarily operate, make frequent changesto maximize their operations and profits.Over the past several years, we have seen a number of our competitors follow our leadership in the development and use ofcomposite sidewalls that compete directly with our DuraPlate products. Our product development is focused on maintaining ourleadership on these products but competitive pressures may erode our market share or margins. We continue to take steps to protect ourproprietary rights in our new products. However, the steps we have taken to protect them may not be sufficient or may not be enforced bya court of law. If we are unable to protect our proprietary rights, other parties may attempt to copy or otherwise obtain or use our productsor technology. If competitors are able to use our technology, our ability to effectively compete could be harmed.We have a limited number of suppliers of raw materials; increases in the price of raw materials or the inability to obtainraw materials could adversely affect our results of operations.We currently rely on a limited number of suppliers for certain key components in the manufacturing of our products, such as tires,landing gear, axles and specialty steel coil used in DuraPlate® panels. From time to time, there have been and may in the future beshortages of supplies of raw materials, or our suppliers may place us on allocation, which would have an adverse impact on our ability tomeet demand for our products. Raw material shortages and allocations may result in inefficient operations and a build-up of inventory,which can negatively affect our working capital position. In addition, the recent price volatility in commodity pricing has negativelyimpacted our operating margins and further volatility could cause further adverse affects. The loss of any of our suppliers or theirinability to meet our price, quality, quantity and delivery requirements could have a significant impact on our results of operations.Disruption of our manufacturing operations would have an adverse effect on our financial condition and results of operations.We manufacture our products at two van trailer manufacturing facilities in Lafayette, Indiana, a flatbed trailer facility in Anna,Illinois, an aluminum flatbed and dump-body trailer facility in Cadiz, Kentucky, and a hardwood floor facility in Harrison, Arkansas.An unexpected disruption in our production at any of these facilities for any length of time would have an adverse effect on our business,financial condition and results of operations.15Table of ContentsThe inability to attract and retain key personnel could adversely affect our results of operations.Our ability to operate our business and implement our strategies depends, in part, on the efforts of our executive officers and otherkey employees. Our future success depends, in large part, on our ability to attract and retain qualified personnel, includingmanufacturing personnel, sales professionals and engineers. The unexpected loss of services of any of our key personnel or the failure toattract or retain other qualified personnel could have a material adverse effect on the operation of our business.The inability to reduce our cost structure to support the reduced market demand and realize additional cost savings couldweaken our competitive position.If we are unable to continue to successfully implement our program of cost reductions and continuous improvements, we may notrealize additional anticipated cost savings, which could weaken our competitive position. Similarly, our cost structure is not entirelyassociated with the level of our sales, and we have not been able to fully reduce our cost structure commensurate with the level of reduceddemand for our products. If we are unable to continue to reduce costs to reflect lower levels of demand, our competitive position could befurther weakened and it could make it more difficult for us to return to profitability or could result in increased losses.The issuance of common or preferred equity or additional debt could adversely affect our common stockholders.The issuance of common or preferred equity or debt could adversely affect the voting power of holders of our common stock, andreduce the likelihood that our common stockholders receive dividend payments and payments upon liquidation. The issuance of commonor preferred equity or debt could also decrease the market price of our common stock, or have terms and conditions that could discouragea takeover or other transactions that might involve a premium price for our shares or that our stockholders might believe to be in their bestinterests.We rely significantly on our integrated Enterprise Resource Planning (ERP) solution to support our operations.We rely on an ERP system and telecommunications infrastructure to integrate departments and functions, to enhance the ability toservice customers, to improve our control environment and to manage our cost reduction initiatives. Any issues involving our criticalbusiness applications and infrastructure may adversely impact our ability to manage operations and the customers we serve.Significant competition in the industry in which we operate may result in our competitors offering new or better products andservices or lower prices, which could result in a loss of customers and a decrease in our revenues.The truck trailer manufacturing industry is highly competitive. We compete with other manufacturers of varying sizes, some ofwhich have substantial financial resources. Trailer manufacturers compete primarily on the quality of their products, customerrelationships, service availability and cost. Barriers to entry in the standard truck trailer manufacturing industry are low. As a result, it ispossible that additional competitors could enter the market at any time. In the recent past, manufacturing over-capacity and high leverageof some of our competitors, along with bankruptcies and financial stresses that affected the industry, contributed to significant pricingpressures.If we are unable to compete successfully with other trailer manufacturers, we could lose customers and our revenues may decline. Inaddition, competitive pressures in the industry may affect the market prices of our new and used equipment, which, in turn, mayadversely affect our sales margins and results of operations.We are subject to extensive governmental laws and regulations, and our costs related to compliance with, or our failure tocomply with, existing or future laws and regulations could adversely affect our business and results of operations.The length, height, width, maximum weight capacity and other specifications of truck trailers are regulated by individual states.The federal government also regulates certain truck trailer safety features, such as lamps, reflective devices, tires, air-brake systems andrear-impact guards. Changes or anticipation of changes in these16Table of Contentsregulations can have a material impact on our financial results, as our customers may defer purchasing decisions and we may have to re-engineer products. We are subject to various environmental laws and regulations dealing with the transportation, storage, presence, use,disposal and handling of hazardous materials, discharge of storm water and underground fuel storage tanks and may be subject toliability associated with operations of prior owners of acquired property. In addition, we are subject to laws and regulations relating to theemployment of our associates and labor-related practices.If we are found to be in violation of applicable laws or regulations in the future, it could have an adverse effect on our business,financial condition and results of operations. Our costs of complying with these or any other current or future regulations may bematerial. In addition, if we fail to comply with existing or future laws and regulations, we may be subject to governmental or judicial finesor sanctions.Product liability and other claims.As a manufacturer of products widely used in commerce, we are subject to product liability claims and litigation as well aswarranty claims. From time to time claims may involve material amounts and novel legal theories, and any insurance we carry may proveinadequate to insulate us from material liabilities for these claims.Risks Related to an Investment in Our Common StockOur common stock has experienced, and may continue to experience, price volatility and a low trading volume.The trading price and volume of our common stock has been and may continue to be subject to large fluctuations. The market priceand volume of our common stock may increase or decrease in response to a number of events and factors, including: • trends in our industry and the markets in which we operate; • changes in the market price of the products we sell; • the introduction of new technologies or products by us or by our competitors; • changes in expectations as to our future financial performance, including financial estimates by securities analysts andinvestors; • operating results that vary from the expectations of securities analysts and investors; • announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures, financingsor capital commitments; • changes in laws and regulations; • general economic and competitive conditions; and • changes in key management personnel.This volatility may adversely affect the prices of our common stock regardless of our operating performance. To the extent that theprice of our common stock remains low or declines further, our ability to raise funds through the issuance of equity or otherwise use ourcommon stock as consideration will be reduced. These factors may limit our ability to implement our operating and growth plans.Declines in the price of our common stock could have an adverse effect on our liquidity.Our common stock is currently listed on the New York Stock Exchange (NYSE). The NYSE maintains continued listingrequirements relating to, among other things, market capitalization and minimum stock price (including that the average closing price ofcommon stock be not less than $1.00 for 30 consecutive trading days). On February 26, 2009, the NYSE notified issuers that it hadsubmitted to the SEC an immediately effective rule that would suspend the $1.00 minimum price requirement and other capitalizationstandards on a temporary basis initially through June 30, 2009. Although we are currently in compliance with NYSE listingrequirements, our stock price declined severely during 2008. If in the future we are unable to satisfy the NYSE criteria for continuedlisting, we would be notified by the NYSE and given an opportunity to take corrective action. If we are not brought into compliance afterthe cure period (generally six months), our stock could be subject to delisting. A delisting of17Table of Contentscommon stock could negatively impact us by reducing the liquidity and market price of our common stock and reducing the number ofinvestors willing to hold or acquire our common stock. This could negatively impact our ability to raise additional funds through equityfinancing, which in turn could materially and adversely affect our business, financial condition and results of operations.ITEM 1B — UNRESOLVED STAFF COMMENTSNone.ITEM 2 — PROPERTIESManufacturing FacilitiesWe own or lease, and operate trailer manufacturing facilities in Lafayette, Indiana; Anna, Illinois; and Cadiz, Kentucky, as well asa trailer floor manufacturing facility in Harrison, Arkansas. We also have a trailer manufacturing facility in Mt. Sterling, Kentucky thatwe idled in 2007 and which is currently held for sale. Our main Lafayette facility is a 1.2 million square foot facility that houses trucktrailer and composite material production, tool and die operations, research laboratories and offices. The second Lafayette facility is0.6 million square feet, primarily used for the production of refrigerated trailers. The plants located in Anna and Cadiz are approximately0.1 million and 0.2 million square feet, respectively, and conduct the manufacturing operations of our flatbed trailer business. In additionto flatbeds, the Cadiz facility also produces dump trailers and dump bodies. In total, our facilities have the capacity to produce in excessof 100,000 trailers annually on a three-shift, five-day workweek schedule.Retail and Distribution FacilitiesRetail and distribution facilities include 11 full service branches and four used trailer centers (four of which are leased). Each salesand service branch consists of an office, parts warehouse and service space, and ranges in size from 20,000 to 50,000 square feet perfacility. The 15 facilities are located in 11 states.Wabash-owned properties are subject to security interests held by our lenders.ITEM 3 — LEGAL PROCEEDINGSVarious lawsuits, claims and proceedings have been or may be instituted or asserted against Wabash arising in the ordinary courseof business, including those pertaining to product liability, labor and health related matters, successor liability, environmental mattersand possible tax assessments. While the amounts claimed could be substantial, the ultimate liability cannot now be determined because ofthe considerable uncertainties that exist. Therefore, it is possible that results of operations or liquidity in a particular period could bematerially affected by certain contingencies. However, based on facts currently available, management believes that the disposition ofmatters that are currently pending or asserted will not have a material adverse effect on our financial position, liquidity or results ofoperations. Costs associated with the litigation and settlement of legal matters are reported within General and Administrative Expensesin the Consolidated Statements of Operations.Brazil Joint VentureIn March 2001, Bernard Krone Indústria e Comércio de Máquinas Agrícolas Ltda. (“BK”) filed suit against Wabash in the FourthCivil Court of Curitiba in the State of Paraná, Brazil. Because of the bankruptcy of BK, this proceeding is now pending before theSecond Civil Court of Bankruptcies and Creditors Reorganization of Curitiba, State of Paraná (No. 232/99).The case grows out of a joint venture agreement between BK and Wabash related to marketing of RoadRailer trailers in Brazil andother areas of South America. When BK was placed into the Brazilian equivalent of bankruptcy late in 2000, the joint venture wasdissolved. BK subsequently filed its lawsuit against Wabash alleging that it was forced to terminate business with other companiesbecause of exclusivity and non-compete clauses purportedly found in the joint venture agreement. BK asserts damages of approximately$8.4 million.18Table of ContentsWe answered the complaint in May 2001, denying any wrongdoing. We believe that the claims asserted by BK are without merit andwe intend to defend our position. A trial date originally scheduled for December 2008 was continued indefinitely by the trial court. Webelieve that the resolution of this lawsuit will not have a material adverse effect on our financial position, liquidity or future results ofoperations; however, at this stage of the proceeding, no assurances can be given as to the ultimate outcome of the case.Intellectual PropertyIn October 2006, we filed a patent infringement suit against Vanguard National Corporation (“Vanguard”) regarding Wabash’s U.S.Patent Nos. 6,986,546 and 6,220,651 in the U.S. District Court for the Northern District of Indiana (Civil Action No. 4:06-cv-135).We amended the Complaint in April 2007. In May 2007, Vanguard filed its Answer to the Amended Complaint, along with Counterclaimsseeking findings of non-infringement, invalidity, and unenforceability of the subject patents. We filed a reply to Vanguard’scounterclaims in May 2007, denying any wrongdoing or merit to the allegations as set forth in the counterclaims.We believe that the claims asserted by Vanguard are without merit and we intend to defend our position. We believe that the resolutionof this lawsuit will not have a material adverse effect on our financial position, liquidity or future results of operations; however, at thisstage of the proceeding, no assurance can be given as to the ultimate outcome of the case.EnvironmentalIn September 2003, we were noticed as a potentially responsible party (PRP) by the U.S. Environmental Protection Agency pertainingto the Motorola 52nd Street (Phoenix, Arizona) Superfund Site pursuant to the Comprehensive Environmental Response, Compensationand Liability Act. PRPs include current and former owners and operators of facilities at which hazardous substances were allegedlydisposed. EPA’s allegation that we were a PRP arises out of the operation of a former branch facility located approximately five miles fromthe original site, which we acquired and subsequently sold. According to the notice, the site currently encompasses an area of groundwatercontaminated by volatile organic compounds seven miles long and one mile wide. The site was placed on the National Priorities List in1989. Motorola has been operating an interim groundwater containment remedy since 2001. We do not expect that these proceedings willhave a material adverse effect on our financial condition or results of operations.In January 2006, we received a letter from the North Carolina Department of Environment and Natural Resources indicating that asite that we formerly owned near Charlotte, North Carolina has been included on the state’s October 2005 Inactive Hazardous Waste SitesPriority List. The letter states that we were being notified in fulfillment of the state’s “statutory duty” to notify those who own and thosewho at present are known to be responsible for each Site on the Priority List. No action is being requested from us at this time. We do notexpect that this designation will have a material adverse effect on our financial condition or results of operations.ITEM 4 — SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERSNone.PART IIITEM 5 — MARKET FOR REGISTRANT’S COMMON STOCK, RELATED STOCKHOLDER MATTERS AND ISSUERPURCHASES OF EQUITY SECURITIESInformation Regarding our Common StockOur common stock is traded on the New York Stock Exchange (ticker symbol: WNC). The number of record holders of ourcommon stock at April 8, 2009 was 990.We declared quarterly dividends of $0.045 per share on our common stock from the first quarter of 2005 through the third quarterof 2008. In December 2008, we suspended the payment of our quarterly dividend due to the continued weak economic environment andthe uncertainty as to the timing of a recovery as well as our effort to enhance liquidity. Our amended asset-based loan agreement limits thepayment of cash dividends to $20 million per19Table of Contentsyear, so long as no event of default is continuing. Additionally, further restrictions on our loan agreement would limit our ability to paydividends because our available borrowing capacity has dropped below $30 million. The reinstatement of quarterly cash dividends willdepend on our future earnings, capital availability and financial condition.High and low stock prices as reported on the New York Stock Exchange for the last two years were: High Low 2007 First Quarter $17.22 $14.50 Second Quarter $15.81 $13.97 Third Quarter $14.80 $11.29 Fourth Quarter $11.60 $6.78 2008 First Quarter $9.50 $6.96 Second Quarter $10.59 $7.55 Third Quarter $11.69 $6.85 Fourth Quarter $9.37 $3.26 Performance GraphThe following graph shows a comparison of cumulative total returns for an investment in our Common Stock, the S&P 500Composite Index and the Dow Jones Transportation Index. It covers the period commencing December 31, 2003 and ending December 31,2008. The graph assumes that the value for the investment in our common stock and in each index was $100 on December 31, 2003 andthat all dividends were reinvested.Comparative of Cumulative Total ReturnDecember 31, 2003 through December 31, 2008among Wabash National Corporation, the S&P 500 Indexand the Dow Jones Transportation IndexPurchases of Our Equity SecuritiesOur stock repurchase program (Repurchase Program), which allowed for the repurchase of common stock up to $50 million,expired September 15, 2008 with $25.8 million remaining available under the program. During 2008, there were no stock repurchasesunder the Repurchase Program. During the fourth quarter of 2008, shares surrendered or withheld to cover withholding tax obligationsupon vesting of restricted stock awards totaled 2,755 shares.During 2008, we purchased and retired the remaining $104.5 million of our Senior Convertible Notes, eliminating the possibilitythat 5.6 million shares could have been converted upon maturity.20Table of ContentsITEM 6 — SELECTED FINANCIAL DATAThe following selected consolidated financial data with respect to Wabash for each of the five years in the period ended December 31,2008, have been derived from our consolidated financial statements. The following information should be read in conjunction withManagement’s Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statementsand notes thereto included elsewhere in this Annual Report. Years Ended December 31, 2008 2007 2006 2005 2004 (Dollars in thousands, except per share data) Statement of Operations Data: Net sales $836,213 $1,102,544 $1,312,180 $1,213,711 $1,041,096 Cost of sales 815,289 1,010,823 1,207,687 1,079,196 915,310 Gross profit 20,924 91,721 104,493 134,515 125,786 Selling, general and administrative expenses 58,384 65,255 66,227 54,521 57,003 Impairment of goodwill 66,317 - 15,373 - - (Loss) Income from operations (103,777) 26,466 22,893 79,994 68,783 Interest expense (4,657) (5,755) (6,921) (6,431) (10,809)Foreign exchange, net (156) 3,818 (77) 231 463 Gain (loss) on debt extinguishment 151 546 - - (607)Other, net (323) (387) 407 262 1,175 (Loss) Income before income taxes (108,762) 24,688 16,302 74,056 59,005 Income tax (benefit) expense 17,064 8,403 6,882 (37,031) 600 Net (loss) income $(125,826) $16,285 $9,420 $111,087 $58,405 Basic net (loss) income per common share $(4.20) $0.54 $0.30 $3.57 $2.10 Diluted net (loss) income per common share $(4.20) $0.52 $0.30 $3.06 $1.80 Cash dividends declared per common share $0.135 $0.18 $0.18 $0.18 $- Balance Sheet Data: Working capital $(2,698) $146,616 $154,880 $213,201 $108,101 Total assets $331,974 $483,582 $556,483 $548,653 $432,046 Total debt and capital leases $85,148 $104,500 $125,000 $125,500 $127,500 Stockholders’ equity $153,437 $279,929 $277,955 $278,702 $164,574 21Table of ContentsITEM 7 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONSManagement’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) describes the matters that weconsider to be important to understanding the results of our operations for each of the three years in the period ended December 31, 2008,and our capital resources and liquidity as of December 31, 2008. Our discussion begins with our assessment of the condition of theNorth American trailer industry along with a summary of the actions we have taken to strengthen Wabash. We then analyze the results ofour operations for the last three years, including the trends in the overall business and our operations segments, followed by a discussionof our cash flows and liquidity, capital markets events and transactions, our credit facility and contractual commitments. We alsoprovide a review of the critical accounting judgments and estimates that we have made that we believe are most important to anunderstanding of our MD&A and our consolidated financial statements. These are the critical accounting policies that affect therecognition and measurement of our transactions and the balances in our consolidated financial statements. We conclude our MD&A withinformation on recent accounting pronouncements that we adopted during the year, as well as those not yet adopted that are expected tohave an impact on our financial accounting practices.We have two reportable segments: manufacturing and retail and distribution. The manufacturing segment produces trailers that aresold to customers who purchase trailers directly or through independent dealers and to the retail and distribution segment. The retail anddistribution segment includes the sale of new and used trailers, as well as the sale of aftermarket parts and service through our retailbranch network.Executive SummaryOur 2008 results reflect the challenges that the trailer industry faced during the year. Throughout the year, the factors negativelyimpacting demand for new trailers became more intense and pervasive across the United States. As a result, the already difficultconditions within the industry became progressively more challenging. High commodity prices and elevated fuel costs prevailed for mostof the year, combined with a weak housing market and overall weak consumer confidence. The effects of these factors were furthermagnified by credit tightening and severe shortages of liquidity in the financial markets. The liquidity shortage has caused concern aboutthe viability of many financial institutions and has negatively impacted the economy. These factors combined together caused our revenueand gross profits to be significantly reduced. Despite these adverse conditions, we were able to achieve strong safety performance,improved process yield and productivity, increased market share and diversification through the acquisition of certain Bensonmanufacturing assets and the successful product launch of portable storage containers.Due to the declining market conditions discussed above, we evaluated the recoverability of our goodwill and net deferred tax assets.Our goodwill and net deferred tax asset evaluations reflected our expectation of continued and increasing challenges in the trailer industry,and our belief that these challenging conditions will persist for some time. Based on our evaluations, and as a result of our fourth quarterresults and market values, we recorded a significant non-cash impairment charge for goodwill and a full valuation allowance against ournet deferred tax assets, which materially affected our operating results during 2008.We expect the overall trailer market for 2009 to decline further from 2008. As a result, we will focus on rightsizing ourmanufacturing and retail operations to match the current demand environment, implementing cost savings initiatives, strengthening ourcapital structure and improving liquidity, improving earnings and selective production introductions that meet the needs of our customers.Going ConcernDue to the events of default under our Second Amended and Restated Loan and Security Agreement (Revolving Facility), which arediscussed in Liquidity and Capital Resources below, we have classified all amounts outstanding under our Revolving Facility as acurrent liability in our consolidated financial statements for the year ended December 31, 2008. As a result of this, the adverse conditionsin the economy in general and the trailer industry in particular, and the other factors discussed in Note 1 to our consolidated financialstatements, our independent registered public accounting firm has included an explanatory paragraph with respect to substantial doubtabout our ability to continue as a going concern in its report on our consolidated financial statements. The presence of the going concernexplanatory paragraph may have an adverse impact on our relationship with third parties with whom we do business,22Table of Contentsincluding our customers, vendors and employees and could make it challenging and difficult for us to raise additional debt or equityfinancing to the extent needed, all of which could have a material adverse impact on our business, results of operations and financialcondition.Strategic AlternativesThe Board of Directors has authorized management to pursue and evaluate a wide range of strategic alternatives, including, but notlimited to, select business divestitures, changes to our capital structure, or a possible sale, merger or other business combination. Therecan be no assurance that this evaluation will result in any specific transaction.Operating PerformanceWe measure our operating performance in four key areas — Safety/Environmental, Quality, Productivity and Cost Reduction. Ourobjective of being better today than yesterday and better tomorrow than we are today is simple, straightforward and easily understood byall our associates. • Safety/Environmental. We have made improvements to our total recordable incident rate resulting in a 5% reduction in ourworkers compensation costs in 2008 compared to 2007. We maintain ISO 14001 registration of our Environmental ManagementSystem. We believe that our improved environmental, health and safety management translates into higher labor productivityand lower costs as a result of less time away from work and improved system management. • Quality. We monitor product quality on a continual basis through a number of means for both internal and external performanceas follows: – Internal performance. Our primary internal quality measurement is Process Yield (PY). PY is a performance metric thatmeasures the impact of all aspects of the business on our ability to ship trailers at the end of the production process. In2008, quality expectations were increased while maintaining PY performance and reducing rework. – External performance. We actively measure and track our warranty claims and costs. Early life cycle warranty claims aretrended for performance monitoring and have shown a steady improvement from an average of approximately 6 claims per100 trailers in 2005 to 3 claims per 100 trailers in 2008. This information is utilized, along with other data, to drivecontinuous improvement initiatives relative to product quality and reliability. Through these efforts, we continue to realizeimproved quality, which has resulted in a sustained decrease for warranty payments over the past four years. • Productivity. We measure productivity on many fronts. Some key indicators include production line speed, man-hours pertrailer and inventory levels. Improvements over the last several years in these areas have translated into significant improvementsin our ability to better manage inventory flow and control costs. • Cost Reduction. We believe Continuous Improvement (CI) is a fundamental component of our operational excellence focus. In2008, we focused on productivity enhancements within manufacturing assembly and sub-assembly areas through developingthe capability for mixed model production. We also established a central warehousing and distribution center to improve materialflow, inventory levels and inventory accuracy within our supply chain. The final components of the warehousing consolidationproject were completed in the end of the first quarter 2009, thus realizing significant savings in the supply chain operation. Wedeployed value engineering and analysis teams to improve product and process costs thus keeping us competitive in themarketplace. In 2008, we also took actions to reduce costs by temporarily slowing down production at some of our facilities,extending normal shutdown periods and reducing salaried headcount levels. We deployed an operational excellence strategy toenhance a culture of daily continuous improvement. We believe the improvements generated to date provide the flexibility neededto support our customers as well as provide the foundation for enhanced performance going forward.23Table of ContentsIndustry TrendsTruck transportation in the U.S., according to the ATA, was estimated to be a $650 billion industry in 2008, representing about5% of U.S. Gross Domestic Product. ATA estimates that approximately 70% of all freight tonnage is carried by trucks at some pointduring its shipment. Trailer demand is a direct function of the amount of freight to be transported. To monitor the state of the industry, weevaluate a number of indicators related to trailer manufacturing and the transportation industry. Recent trends we have observed includethe following: • Transportation / Trailer Cycle. Transportation, including trucking, is a cyclical industry that has experienced three cyclesover the last 20 years. Truck freight tonnage, according to ATA statistics, has been negative year-over-year from mid 2006through most of 2007. Even though tonnage volumes increased 0.7% year-over-year in 2008, recent data shows furtherweakening of freight tonnage. The trailer industry generally precedes transportation industry cycles. The current cycle began inearly 2001 when industry shipments totaled approximately 140,000, reached a peak in 2006 with shipments of approximately280,000 and, based on current ACT estimates, is expected to reach the bottom in 2009. According to ACT, shipments in 2008amounted to approximately 144,000 units and will be approximately 76,000 and 136,000 in 2009 and 2010, respectively. Ourview is generally consistent with that of ACT. • Age of Trailer Fleets. During the three-year period ending December 31, 2007 (the latest such information available), theaverage age of the top 11 publicly traded truckload motor carrier trailer fleets increased from 4.5 years to 5 years. However, theaverage age of the total population during this same period remained relatively unchanged at approximately 7 years, increasing to7.5 years for 2008. The stability of overall fleet age suggests a replacement demand estimated at 185,000 per year. • New Trailer Orders. According to ACT, quarterly industry order placement rates have experienced year-over-year declines ineach of the last nine quarters through the quarter ended December 31, 2008. Total trailer orders in 2008 were 112,000 units, a34% decrease from the 170,000 units ordered in 2007. • Other Developments. Other developments and our view of their potential impact on the industry include: – U.S. federal truck emission regulations took effect on January 1, 2007, resulting in cleaner, yet less fuel-efficient and morecostly tractor engines. Trucking companies accelerated purchases of tractors prior to the effective date of the regulation,significantly reducing the historical trailer-to-tractor ratio. In 2010, additional emission regulations are scheduled to takeeffect which may result in reoccurrence of accelerated truck purchases, again reducing the trailer-to-tractor ratio. We believethat on average the trailer-to-tractor ratio is unlikely to return to prior historic norms. – Continuing improvements in trailer quality and durability resulting from technological advances like DuraPlate composite,as well as increased trailer utilization due to growing adoption of trailer tracking could result in reduced trailer demand. – Trucking company profitability, which can be influenced by factors such as fuel prices, freight tonnage volumes, andgovernment regulations, is highly correlated with the overall economy of the U.S. Decreases in trucker profitability reducethe demand for, and financial ability to purchase, new trailers. – Truck driver shortages experienced over the past several years have constrained and are expected to continue to constrainfreight market capacity growth. As a result, trucking companies are under increased pressure to look for alternative ways tomove freight, leading to more intermodal freight movement. We believe that railroads are at or near capacity, which will limittheir ability to grow. We therefore expect that the majority of freight will still be moved by truck.24Table of ContentsResults of OperationsThe following table sets forth certain operating data as a percentage of net sales for the periods indicated: Years Ended December 31, 2008 2007 2006 (Percentage of Net Sales) Net sales 100.0% 100.0% 100.0%Cost of sales 97.5 91.7 92.0 Gross profit 2.5 8.3 8.0 General and administrative expenses 5.3 4.5 4.0 Selling expenses 1.7 1.4 1.1 Impairment of goodwill 7.9 - 1.2 (Loss) Income from operations (12.4) 2.4 1.7 Interest expense (0.6) (0.5) (0.5)Foreign exchange, net - 0.3 - (Loss) Income before income taxes (13.0) 2.2 1.2 Income tax expense 2.0 0.7 0.5 Net (loss) income (15.0)% 1.5% 0.7%2008 Compared to 2007Net SalesNet sales in 2008 were $836.2 million, a decrease of $266.3 million, or 24.2%, compared to 2007. By business segment, netexternal sales and related units sold were as follows (dollars in millions): Year Ended December 31, 2008 2007 % Change Sales by Segment Manufacturing $694.2 $952.8 (27.1)Retail and Distribution 142.0 149.7 (5.1)Total $836.2 $1,102.5 (24.2) New Trailers (units) Manufacturing 30,800 43,400 (29.0)Retail and Distribution 2,500 3,000 (16.7)Total 33,300 46,400 (28.2)Used Trailers 6,600 4,400 50.0 Manufacturing segment sales for 2008 were $694.2 million, a decrease of $258.6 million, or 27.1%, compared to 2007. Due to acontinued weak market demand and declines in the housing and construction markets, new trailer sales decreased 12,600 units, orapproximately $269.7 million. Higher average selling prices impacted sales by $16.1 million in efforts to offset material price increases.Retail and distribution segment sales were $142.0 million in 2008, a decrease of $7.7 million, or 5.1%, compared to 2007. Newtrailer sales decreased $3.9 million, or 5.4%, compared to 2007 due to lower volumes primarily as a result of the overall decline in theU.S. market. Used trailer sales were flat compared to the prior year25Table of Contentsas higher volumes were offset by lower average selling prices as depressed market conditions have driven used trailer values downthroughout 2008. Parts and service sales were $37.1 million in 2008, a decrease of $3.5 million, or 8.6%, compared to 2007 due tocontinued weak customer demand.Gross ProfitGross profit in 2008 was $20.9 million, down $70.8 million, or 77.2%, compared to 2007. Gross profit as a percent of sales was2.5% in 2008 compared to 8.3% in 2007. Gross profit by segment was as follows (in millions): Year Ended December 31, 2008 2007 % Change Gross Profit by Segment: Manufacturing $13.8 $82.8 (83.3)Retail and Distribution 6.1 9.4 (35.1)Intercompany Profit Eliminations 1.0 (0.5) Total $20.9 $91.7 (77.2)Manufacturing segment gross profit was $13.8 million in 2008, a decrease of $69.0 million, or 83.3%, compared to 2007. Grossprofit as a percentage of sales was 2.0% in 2008 compared to 8.7% in 2007. The decrease in gross profit and gross profit marginpercentage was primarily driven by the 29.0% decline in volumes and continued increases in raw material costs that outpaced increases inselling prices.Retail and distribution segment gross profit was $6.1 million in 2008, a decrease of $3.3 million, or 35.1%, compared to 2007.Gross profit as a percentage of sales was 4.3% compared to 6.3% in 2007 due to pricing pressures on used trailers and reduced parts andservice volumes.General and Administrative ExpensesGeneral and administrative expenses decreased $5.4 million to $44.1 million in 2008 compared to the prior year primarily due tolower professional services, salaries and employee related costs, which were partially offset by severance costs incurred from headcountreduction actions. These cost reductions are partially a result of our cost cutting initiatives and efforts to adjust our cost structure tomatch the current market demand.Selling ExpensesSelling expenses decreased $1.5 million to $14.3 million in 2008 compared to the prior year primarily due to decreases in salaries,employee related costs, advertising and promotional activities, which were partially offset by severance costs incurred from headcountreduction actions. These cost reductions are partially a result of our cost cutting initiatives and efforts to adjust our cost structure tomatch the current market demand.Impairment of GoodwillWe reviewed our goodwill during the fourth quarter of 2008 and, based on a combination of factors, including the significant declinein our market capitalization as well as the current decline in the U.S. economy, we concluded that indicators of potential impairment werepresent. Under Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets, the measurement ofimpairment of goodwill consists of a two step process. The first step requires us to compare the fair value of the reporting unit to itscarrying value. During the fourth quarter, we completed a valuation of the fair value of our reporting units that incorporated existingmarket based considerations as well as discounted cash flows based on current and projected results. Based on this evaluation, it wasdetermined that the carrying value of both our platform trailer and wood product manufacturing operations exceeded fair value. Thesecond step involves determining an implied fair value of each reporting unit’s goodwill as compared to its carrying value. Aftercalculating the implied fair value of the goodwill by deducting the fair value of all tangible and intangible net assets of the reporting unitfrom the fair value of the reporting unit, it was determined that the recorded goodwill of $66.3 million was fully impaired. Based on thesefacts and circumstances, we recorded a non-cash goodwill impairment of $66.3 million.26Table of ContentsOther Income (Expense)Gain on debt extinguishment in 2008 of $0.2 million represents the gain recognized on the extinguishment of $104.5 million of ourSenior Convertible Notes, which were purchased at a discount to par value, net of related deferred debt issuance costs.Income TaxesIn 2008, we recognized income tax expense of $17.1 million compared to $8.4 million in 2007. The effective rate for 2008 was(15.7%). This rate differs from the U.S. federal statutory rate of 35% primarily due to the recognition of a full valuation allowanceagainst our net deferred tax asset and the write-off of non-deductible goodwill. As of December 31, 2008, we had $93.1 million ofremaining U.S. federal income tax net operating loss carryforwards, which will expire in 2022 if unused, and which may be subject toother limitations on use under I.R.S. rules.2007 Compared to 2006Net SalesNet sales in 2007 were $1.1 billion, a decrease of $209.6 million, or 16.0%, compared to 2006. By business segment, net externalsales and related units sold were as follows (in millions, except unit data): Year Ended December 31, 2007 2006 % Change Sales by Segment: Manufacturing $952.8 $1,120.7 (15.0)Retail and Distribution 149.7 191.5 (21.8)Total $1,102.5 $1,312.2 (16.0) New Trailers: (units) Manufacturing 43,400 55,500 (21.8)Retail and Distribution 3,000 3,900 (23.1)Total 46,400 59,400 (21.9)Used Trailers 4,400 6,600 (33.3)Manufacturing segment sales for 2007 were $952.8 million, a decrease of $167.9 million, or 15.0%, compared to 2006. Thisdecrease was primarily due to a decline in van sales of 11,800 units, or approximately $229.6 million, due to weak market demand.This decrease was partially offset by higher average selling prices for vans, which had a positive impact of $67.7 million. Sales priceimprovements resulted from the effort to offset material price increases and a favorable product mix as we shipped a larger number of thehigher-priced refrigerated units and fewer lower-priced FreightPro®, pup trailers and converter dollies in 2007 compared to 2006. Sales ofplatform units decreased $4.0 million compared to 2006 as the impact of owning Transcraft for an additional two months was more thanoffset by the decline in volume.Retail and distribution segment sales were $149.7 million in 2007, a decrease of $41.7 million, or 21.8%, compared to 2006. Newand used trailer sales decreased $19.7 million and $19.1 million, respectively, compared to 2006 primarily as a result of the overalldecline in the market. Parts and service sales were $40.6 million in 2007, a decrease of $1.6 million, or 3.8%, compared to 2006 due toweak customer demand.Gross ProfitGross profit in 2007 was $91.7 million compared to $104.5 million in 2006, a decrease of $12.8 million, or 12.2%. Gross profitas a percent of sales was 8.3% in 2007 compared to 8.0% in 2006. Gross profit by segment was as follows (in millions):27Table of Contents Year Ended December 31, 2007 2006 % Change Gross Profit by Segment: Manufacturing $82.8 $89.5 (7.5)Retail and Distribution 9.4 15.4 (39.0)Intercompany Profit Eliminations (0.5) (0.4) Total $91.7 $104.5 (12.2)Manufacturing segment gross profit as a percentage of sales was 8.7% compared to 8.0% in 2006. Gross profit was $82.8 million in2007, a decrease of $6.7 million, or 7.5%, compared to 2006. The gross profit margin percentage was favorably impacted by increasesin the overall average selling prices for new trailers that outpaced increased raw material costs and effective management of operatingcosts. Offsetting these improvements was the 21.8% decline in new trailer units sold in 2007 compared to 2006. Additionally, we wereable to regain operating efficiencies that were adversely impacted in 2006 as a result of implementing a new ERP system. Transcraft’scontributions to gross profit increased in 2007 from the prior year period due to Transcraft having an additional two months in thecurrent year.Retail and distribution segment gross profit in 2007 was $9.4 million, a decrease of $6.0 million, or 39.0%, compared to 2006. As apercentage of sales, gross profit margin was 6.3% compared to 8.0% in 2006, primarily due to declines in new and used trailer unit salesand margins and reduced demand for parts and service.General and Administrative ExpensesGeneral and administrative expenses decreased $1.6 million to $49.5 million in 2007. The decrease was largely due to reduction insalaries and other employee-related costs which were slightly offset by increases in bad debt expense and legal and technology costs.Selling ExpensesSelling expenses increased $0.7 million to $15.7 million in 2007 primarily due to an increase in employee-related costs and theimpact of reporting Transcraft an additional two months in 2007 as compared to 2006.Other Income (Expense)Foreign exchange, net for 2007 includes $3.3 million of accumulated foreign currency translation gains recognized as a result of thesale of our Canadian branches. Upon finalization of this sale, the operational activities pertaining to this entity were consideredsubstantially liquidated as of December 31, 2007, and, in accordance with FASB Statement No. 52, Foreign Currency Translation, allaccumulated foreign currency translation gains were recognized.Gain on debt extinguishment in 2007 of $0.5 million represents the gain recognized on the extinguishment of $20.5 million of ourSenior Convertible Notes, which were purchased at a discount to par value, net of related deferred debt issuance costs.Income TaxesIn 2007, we recognized income tax expense of $8.4 million compared to tax expense of $6.9 million in 2006. The effective rate for2007 was 34.0%. This rate is lower than the U.S. Federal statutory rate as it includes recognition of a portion of the benefit of certain taxdeductions related to the liquidation of our Canadian subsidiary of $0.8 million. As of December 31, 2007, we had $62.6 million ofremaining U.S. federal income tax net operating loss carryforwards, which will expire in 2022 if unused, and which may be subject toother limitations on use under I.R.S. rules.In 2006, we recognized the reversal of valuation allowance and reserves primarily resulting from the settlement of certain stateincome tax positions totaling $4.8 million. We also recognized $5.6 million of valuation allowance against foreign losses incurred duringthe year.28Table of ContentsLiquidity and Capital ResourcesCapital StructureWe continue to assess our financial position and liquidity requirements in light of recent and ongoing economic conditions that havenegatively impacted our operating results and caused instability in the capital markets. As part of this process, we have been negotiatingamendments to our Revolving Facility. While we were in compliance with the financial covenants under our Revolving Facility atDecember 31, 2008, subsequent to year end, events of default have occurred under the Revolving Facility which permits the lenders toincrease the interest on the outstanding principal by 2%, to cause an acceleration of the maturity of borrowings, to restrict advances and toterminate the Revolving Facility. We are negotiating a forbearance agreement with our lenders to address the consequences of the defaultand to provide additional liquidity while we continue discussions to amend the Revolving Facility and to waive any events of default.There can be no assurance that a forbearance agreement will be entered into or that an amendment or waiver will be obtained. Based onthese events, the Company has classified its obligations outstanding under the Revolving Facility as current liabilities in theaccompanying consolidated balance sheet as of December 31, 2008. Further, our Board of Directors authorized management to pursueand evaluate a wide range of strategic alternatives including, but not limited to, select business divestures, changes to our capitalstructure, or a possible sale, merger, or business combination. There can be no assurance this evaluation will result in any specifictransaction.Today, our capital structure is comprised of a mix of equity and debt. As of December 31, 2008, our debt to equity ratio wasapproximately 0.6:1.0. The increase in our debt to equity ratio as compared to our ratio a year earlier is primarily due to the increase in ourretained deficit resulting from losses in 2008. Our long-term objective is to generate operating cash flows sufficient to fund normalworking capital requirements, to fund capital expenditures, to be positioned to take advantage of market opportunities and to fundpotential dividends or stock repurchases. For 2009 we expect to fund working capital requirements and capital expenditures through cashflows from operations as well as available borrowings under our Revolving Facility. We utilized our Revolving Facility in 2008 primarilyto repurchase $104.5 million aggregate principal amount of Senior Convertible Notes that matured.Debt AgreementsOn March 6, 2007, we entered into the Revolving Facility with our lenders. The Revolving Facility replaced our prior facility. Asamended the Revolving Facility has a capacity of $200 million, subject to a borrowing base, with a maturity date of March 6, 2012.While we were in compliance with our financial covenants under the Revolving Facility at December 31, 2008, subsequent to year end,events of default have occurred under the Revolving Facility which permits the lenders to increase the interest on the outstanding principalby 2%, to cause an acceleration of the maturity of borrowings, to restrict advances, and to terminate the Revolving Facility. On April 1,2009, we received written notice from the administrative agent for the Revolving Facility asserting the existence of events of default underthe Revolving Facility relating to the failure to deliver the required financial statements, failure to deliver notice of the change in name of aCompany subsidiary, and requests for borrowings during the pendency of an event of default. In accordance with the terms of theRevolving Facility, as of April 1, 2009, the agent has increased the interest on the outstanding principal under the Revolving Facility by2% and implemented availability reserves that result in a reduction of our borrowing base by $25 million.In addition to the events of default for which the agent has already provided notice, on April 1, 2009, we also incurred an event ofdefault related to our borrowing capacity and fixed charge coverage ratio. Our Revolving Facility contains a financial covenant thatprovides that when our available borrowing capacity drops below $30 million, we are subject to a minimum fixed charge coverage ratio of1.1:1.0. As a result of draws on April 1, 2009, our available borrowing capacity is now below $30 million and we do not meet the fixedcharge coverage ratio requirements. Furthermore, because the report of our independent registered public accounting firm contained in thisForm 10-K includes an explanatory paragraph with respect to our ability to continue as a going concern, we have incurred an additionalevent of default.Our Revolving Facility provides that as a result of the events of default identified in the written notice of the administrative agent, aswell as the other events of defaults referenced above, our lenders could elect to declare all amounts outstanding under our debt agreements,together with accrued interest, to be immediately due and payable. While the administrative agent’s notice did not terminate the RevolvingFacility or demand immediate repayment of any outstanding debt and the payment of accrued interest thereunder, it does reserve the rightsof the29Table of Contentslenders to do any of the foregoing or seek any other available remedies. There can be no assurance that these actions will not occur at anytime as a result of the events of default referenced in the notice or the occurrence of other events of default.We are in discussions with the lenders concerning the events of default and negotiation of a forbearance agreement to address theconsequences of the defaults and to provide additional liquidity while we continue discussions to amend the Revolving Facility and towaive any events of default. There can be no assurance that a forbearance agreement will be entered into or that an amendment or waiverwill be obtained.The Revolving Facility provides an option to increase the credit facility by up to an additional $50 million during the term of thefacility, subject to a borrowing base and so long as no event of default is continuing and we have a minimum fixed charge coverage ratioof 1.1:1.0 for the 12 month period prior to such increase. The lenders under the Revolving Facility are under no obligation to provide anyadditional commitments and any increase in commitments will be subject to customary conditions precedent. Furthermore, we arecurrently discussing amendments to the Revolving Facility that would reduce the capacity under the Revolving Facility.Interest Rate and Fees. Borrowings under the Revolving Facility bear interest at a rate equal to, at our option, either (1) a base ratedetermined as Bank of America, N.A.’s prime rate for commercial loans; or (2) a LIBOR rate determined on the basis of the offered ratesfor deposits in U.S. dollars, for a period of time comparable to the applicable interest rate period, which appears on the Telerate page 3750as of 11a.m. (London time), on the day that is two London banking days preceding the first day of the interest period, in each case plusan applicable margin. The applicable margin for borrowings under the Revolving Facility ranges from 0.00% to 0.75% for base rateborrowings and 1.25% to 2.25% for LIBOR borrowings, subject to adjustment based on the average availability under the RevolvingFacility. As noted above, during the pendency of an event of default, our lenders may and as previously mentioned have increased theinterest on the outstanding principal by 2%, and we have been notified by our lenders on April 1, 2009 that they have done so.In addition to paying interest on the outstanding principal under the Revolving Facility, we are required to pay an annual agency feeto our administrative agent in the amount of $50,000 each year the Revolving Facility is outstanding other than the first year. We are alsorequired to pay an unused line fee equal to 0.25% on the unused portion of the Revolving Facility and other customary fees.Mandatory Repayments. If we receive proceeds from the sale of any collateral or certain other dispositions, we are required to repaya sum equal to 100% of the net proceeds (including insurance payments but net of costs and taxes incurred in connection with the sale orevent). If we issue any additional indebtedness, we are required to repay a sum equal to 100% of the net proceeds of the issuance of theindebtedness. If we issue equity other than certain customary exceptions, we are required to repay a sum equal to 50% of the net proceedsof the issuance.Further, if we receive proceeds from any tax refunds, indemnity payments or pension plan reversions, we are required to repay asum equal to 100% of the proceeds.Any repayment shall be applied to reduce the outstanding principal balance of the Revolving Facility but shall not permanentlyreduce the capacity to borrow under the facility.If an event of default has occurred, we may be required to repay the outstanding balance under the Revolving Facility, together withaccrued and unpaid interest thereon and all other fees and obligations accrued thereunder.Voluntary Repayments. We may repay the outstanding balance under the Revolving Facility from time to time without premium orpenalty other than customary breakage costs with respect to LIBOR loans. In addition, we may opt to reduce the capacity under theRevolving Facility in an aggregate amount not to exceed $25 million during the term of the Revolving Facility. Upon 30 days prior writtennotice, we may terminate the Revolving Facility if we have satisfied all outstanding obligations under the Revolving Facility and cashcollateralized any outstanding letters of credit and letters of credit guaranties.Guarantees and Security. Certain of our subsidiaries unconditionally guarantee all obligations under the Revolving Facility. Allobligations under the Revolving Facility, and the guarantees of those obligations, are30Table of Contentssecured, subject to certain exceptions, by a first-priority security interest in, or pledge of, certain personal and real property of theCompany and certain direct and indirect subsidiaries, including inventory, accounts receivable, certain investment property, shares ofcapital stock in each domestic subsidiary, general intangibles, intellectual property, certain security and deposit accounts and certainrelated assets and proceeds of the foregoing.Certain Covenants and Events of Default. The Revolving Facility includes certain covenants that restrict, among other things andsubject to certain exceptions, our ability and the ability of our subsidiaries to: • incur additional debt; • pay any distributions, including dividends on our common stock in excess of $20 million per year, so long as no event ofdefault is continuing; • repurchase our common stock if, among other conditions, immediately after the repurchase we have availability of less than$40 million under the Revolving Facility; • consolidate, merge or transfer all or substantially all of our assets; • make certain investments, loans, mergers and acquisitions; • enter into material transactions with affiliates unless in the ordinary course, upon fair and reasonable terms and no lessfavorable than would be obtained in a comparable arms-length transaction; • use proceeds from the Revolving Facility to make payment on certain indebtedness; • amend the terms of certain indebtedness; • sell, lease or dispose of certain assets; • amend our organizational documents in certain circumstances; • enter into operating leases with aggregate rentals payable in excess of $10 million during any 12 consecutive months; • change in any material respect the nature of our business conducted as of March 6, 2007; and • create certain liens.Availability under the Revolving Facility has been impacted negatively in light of the current market demand for trailers. Asdiscussed above, the Revolving Facility provides that if our available borrowing capacity drops below $30 million, we are subject to aminimum fixed charge coverage ratio of 1.1:1.0, which could limit our ability to make capital expenditures and impact our operations.This ratio is based on a factor of earnings before interest, taxes, depreciation and amortization (EBITDA) adjusted for various items,included but not limited to the charges for impairment of fixed or intangible assets, expenses for stock-based compensation, income taxes,capital expenditures and distributions for any stock repurchases or dividends compared with the total of payments made for scheduledprincipal payments on outstanding indebtedness, including capital lease obligations, and interest expense. At December 31, 2008, we werein compliance with this covenant of the Revolving Facility as our availability was approximately $34.7 million. However, as a result ofdraws on April 1, 2009, our availability fell below $30 million, and we do not meet the fixed charge coverage ratio requirements. As aresult, our lenders could elect to declare all amounts outstanding under our Revolving Facility, together with accrued interest, to beimmediately due and payable.The Revolving Facility contains additional customary affirmative covenants and events of default, including among other events,certain cross defaults, business disruption, condemnation, change in ownership and failure to deliver an unqualified opinion of ourindependent registered public accounting firm on our consolidated financial statements. In addition, a material adverse effect clause,which permits the lenders to subjectively determine when a material adverse change in our business or financial condition occurs, couldresult in an event of default and an early termination of our Revolving Facility.On July 24, 2008, the Company entered into a three-year capital lease for a manufacturing facility located in Cadiz, Kentucky. Thelease includes a bargain purchase option. As of December 31, 2008, the present value of future minimum lease payments totaled$5.1 million with annual minimum payments of $0.6 million, $0.6 million and $4.6 million for the years ending 2009, 2010 and 2011,respectively, including interest of approximately $0.6 million.31Table of ContentsCash FlowCash provided by operating activities for 2008 amounted to $30.7 million compared to $59.3 million in 2007. The change wasprimarily a result of a $31.2 million improvement in working capital offset by a $59.8 million reduction in net income, adjusted for non-cash items. The following is a discussion of factors impacting certain working capital items 2008 compared to the prior year: • Accounts receivable decreased $30.8 million during 2008 compared to a decrease of $41.7 million in 2007. The decrease for2008 is due to a reduction in sales volumes and improved collections. Days sales outstanding, a measure of working capitalefficiency that measures the amount of time a receivable is outstanding, improved to approximately 16 days in 2008 comparedto 25 days in 2007. • Inventory decreased $20.2 million during 2008 compared to a decrease of $20.0 million in 2007. The 2008 decrease is due tolower new trailer inventories resulting from reduced demand and continued improvements in inventory management. Inventoryturns, a commonly used measure of working capital efficiency that measures how quickly inventory turns per year, wasapproximately seven times in both 2008 and 2007. • Accounts payable and accrued liabilities decreased $5.7 million in 2008 compared to a decrease of $48.5 million in 2007.Prior year change was primarily due to reduced raw material levels, improved inventory management and lower productionvolumes.Investing activities used $12.4 million in 2008 compared to $11.1 million used in the prior year period. The 2008 period includes$2.8 million used to acquire certain equipment from Benson International LLC, a manufacturer of aluminum flatbeds, dump trailers andother truck bodies. The 2007 period included an additional $4.5 million purchase price payment based on Transcraft’s achievement of2006 performance targets.Financing activities used $29.7 million during 2008 as borrowings under the Revolving Facility were used to purchase and retire$104.1 million of Senior Convertible Notes. On December 15, 2008, the Company announced that it would suspend the payment ofdividends to conserve cash and expand liquidity in a period of economic uncertainty.As of December 31, 2008, our liquidity position, defined as cash on hand and available borrowing capacity, amounted toapproximately $64.5 million and total debt and capital lease obligations amounted to approximately $85.1 million. This amount has beenadversely impacted by the events of default under our Revolving Facility and resulting actions of our lenders. Any amendment to ourRevolving Facility may also result in a lower level of liquidity.Our liquidity remains constrained such that it may not be sufficient to meet our cash operating needs in this period of economicuncertainty. Our ability to fund our working capital needs and capital expenditures is limited by the net cash provided by operations,cash on hand and the liquidity available under the Revolving Facility. Additional declines in net cash provided by operations, furtherdecreases in the availability under the Revolving Facility or changes in the credit our suppliers provide to us, could rapidly exhaust ourliquidity. Our liquidity problems have worsened as a result of the events of default under our Revolving Facility. There is no assurancethat we will be able to enter into a forbearance agreement under our Revolving Facility. And, even if we are able to enter into a forbearanceagreement, an amendment and waiver will also be necessary under our Revolving Facility. There can be no assurance that a forbearanceagreement will be entered into or that an amendment or waiver will be obtained.In order to increase our liquidity, a forbearance agreement and amendment and waiver to our Revolving Facility will likely not beenough. We will likely need to issue new common equity, preferred equity, or obtain modification to, or additional sources of, debt. Anynew issuance may take the form of public or private offerings for debt or equity. Our ability to obtain additional liquidity will dependupon a number of factors, including our future performance and financial results, and general economic and capital market conditions.We cannot be sure that we will be able to raise additional capital on commercially reasonable terms, or at all.32Table of ContentsIn light of current uncertain market and economic conditions, we are aggressively managing our cost structure, capital expendituresand cash position. In 2009, we implemented additional cost reduction actions that will substantially decrease our corporate overhead andoperating costs to include: • salaried workforce headcount reductions of approximately 100 associates, or 20%, bringing total salaried headcount reductionsto over 35%, or approximately 200 associates, since the beginning of the industry downturn in early 2007; • a 16.75% reduction in base salary for Executive Officers; • a temporary reduction of 15% of annualized base salary for all remaining exempt-level salaried associates, combined with areduction in the standard work week for most from 40 hours to 36 hours; • a temporary reduction in the standard paid work week from 40 hours to 36 hours for all non-exempt associates; • a temporary 5% reduction in hourly wages; • a temporary suspension of the 401(k) company match; • the introduction of a voluntary unpaid layoff program with continuation of benefits; and, • the continued close regulation of the work-day and headcount of hourly associates.These actions were substantially complete and in effect by February 1, 2009, and are incremental to previous actions taken duringthis downturn. Previous actions included idling of plants and assembly lines, consolidation and transformation initiatives at ourLafayette facility, salaried workforce reductions, reductions in total compensation awards to executives and other eligible participants, thesuspension of any company match for non-qualified plan participants, as well as the suspension of our quarterly dividend.Capital ExpendituresCapital spending amounted to $12.6 million during 2008, including $2.8 million for the assets purchased on July 24, 2008 fromBenson International LLC, and is anticipated to be approximately $2.0 million for 2009. The spending for 2009 will be limited torequired maintenance and cost reduction initiatives in efforts to manage cash flows and enhance liquidity.Off-Balance Sheet TransactionsAs of December 31, 2008, we had approximately $3.8 million in operating lease commitments. We did not enter into any materialoff-balance sheet debt or operating lease transactions during the year.OutlookWe face significant uncertainty regarding the demand for trailers during the current economic environment. According to the mostrecent ACT estimates, total trailer industry shipments for 2009 are expected to be down 47% from 2008 to approximately 76,000 units.ACT estimates that shipments in 2010 will grow to approximately 136,000 units. The biggest concerns going into 2009 relate to the globaleconomy, especially credit markets, as well as the continued decline in housing and construction-related markets in the U.S.Management’s expectation is that the trailer industry will remain challenging throughout 2009 and, as a result, it is likely that we willincur net losses in 2009, which will further reduce our stockholders’ equity.By product type, ACT is estimating that van trailer shipments will be down approximately 49% in 2009 compared to 2008. ACT isforecasting that platform trailer shipments will decline approximately 46% and dump trailer shipments will fall approximately 41% in2009. The decrease in the demand for trailers reflects the weakness of truck freight, which has trended down since the latter part of 2006as a result of general economic conditions and, more particularly, declines in new home construction and the automotive industry.33Table of ContentsWe believe we are well-positioned in the industry because: (1) our core customers are among the dominant participants in thetrucking industry; (2) our DuraPlate® trailer continues to have increased market acceptance; (3) our focus is on developing solutions thatreduce our customers’ trailer maintenance costs; and (4) we expect some expansion of our presence into the mid-market carriers. In 2008,we added approximately 20 new mid-market customers accounting for orders of over 800 new trailers. Since implementing our mid-market sales strategy five years ago, we have added 280 new mid-market customers accounting for orders of approximately 20,000 newtrailers.Pricing will be difficult in 2009 due to weak demand and fierce competitive activity. Raw material and component costs are expectedto be volatile based on world commodity prices for oil, steel, and aluminum. As has been our policy, we will endeavor to pass along rawmaterial and component price increases to our customers. We have a focus on continuing to develop innovative new products that bothadd value to our customers’ operations and allow us to continue to differentiate our products from the competition to increase profitability.Based on industry forecasts, along with conversations with our customers regarding their requirements, and assuming we maintainour current market share, we estimate that for the full year 2009 total units will be between 18,000 and 22,000, a 46% to 34% reductionfrom 2008.Contractual Obligations and Commercial CommitmentsA summary of payments of our contractual obligations and commercial commitments, both on and off balance sheet, as ofDecember 31, 2008 are as follows (in millions): 2009 2010 2011 2012 2013 Thereafter Total DEBT: Revolving Facility $80.0 $- $- $- $- $- $80.0 Capital Lease (including principal and interest) 0.6 0.6 4.6 - - - 5.8 TOTAL DEBT $80.6 $0.6 $4.6 $- $- $- $85.8 OTHER: Operating Leases $1.6 $1.1 $0.4 $0.3 $0.3 $0.1 $3.8 TOTAL OTHER $1.6 $1.1 $0.4 $0.3 $0.3 $0.1 $3.8 OTHER COMMERCIAL COMMITMENTS: Letters of Credit $7.3 $- $- $- $- $- $7.3 Purchase Commitments 29.4 - - - - - 29.4 Residual Guarantees 0.5 - - - - - 0.5 TOTAL OTHER COMMERCIALCOMMITMENTS $37.2 $- $- $- $- $- $37.2 TOTAL OBLIGATIONS $119.4 $1.7 $5.0 $0.3 $0.3 $0.1 $126.8 Residual guarantees represent commitments related to certain new trailer sales transactions prior to 2002, where we had entered intoagreements to guarantee end-of-term residual value. The agreements also contain an option for us to purchase the used equipment at apredetermined price. We have purchase options of $0.5 million on the aforementioned trailers.Operating leases represent the total future minimum lease payments.We have $29.4 million in purchase commitments through December 2009 for aluminum, which is within normal productionrequirements.34Table of ContentsSignificant Accounting Policies and Critical Accounting EstimatesOur significant accounting policies are more fully described in Note 2 to our consolidated financial statements. Certain of ouraccounting policies require the application of significant judgment by management in selecting the appropriate assumptions for calculatingfinancial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. These judgments are based on ourhistorical experience, terms of existing contracts, our evaluation of trends in the industry, information provided by our customers andinformation 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; and • changes in the estimate or different estimates that we could have selected would have had a material impact on our financialcondition or results of operations.The table below presents information about the nature and rationale for our critical accounting estimates: Critical Estimate Nature of Estimates Assumptions/ Balance Sheet Caption Item Required Approaches Used Key Factors Other accrued liabilities and othernon-current liabilities Warranty Estimating warrantyrequires us to forecast theresolution of existing claimsand expected future claimson products sold. We base our estimate onhistorical trends of unitssold and paymentamounts, combined withour current understandingof the status of existingclaims, recall campaignsand discussions with ourcustomers. Failure rates andestimated repair costs Accounts receivable, net Allowance fordoubtful accounts Estimating the allowance fordoubtful accounts requiresus to estimate the financialcapability of customers topay for products. We base our estimates onhistorical experience, thetime an account isoutstanding, customer’sfinancial condition andinformation from creditrating services. Customer financialcondition Inventories Lower of cost or marketwrite-downs We evaluate futuredemand for products,market conditions andincentive programs. Estimates are based onrecent sales data, historicalexperience, external marketanalysis and third partyappraisal services. Market conditionsProduct type Property, plant and equipment,goodwill, intangible assets, andother assets Valuation of long- livedassets and investments We are required periodicallyto review the recoverabilityof certain of our assetsbased on projections ofanticipated future cashflows, including futureprofitability assessments ofvarious product lines. We estimate cash flowsusing internal budgetsbased on recent sales data,and independent trailerproduction volumeestimates. Future productionestimatesDiscount rate Deferred income taxes Recoverability of deferredtax assets - in particular,net operating loss carry-forwards We are required to estimatewhether recoverability ofour deferred tax assets ismore likely than not basedon forecasts of taxableearnings. We use projected futureoperating results, basedupon our business plans,including a review of theeligible carry-forwardperiod, tax planningopportunities and otherrelevant considerations. Variances in futureprojected profitability,including by taxing entityTax law changesIn addition, there are other items within our financial statements that require estimation, but are not as critical as those discussedabove. Changes in estimates used in these and other items could have a significant effect on our consolidated financial statements. Thedetermination of the fair market value of new and used trailers is subject to variation, particularly in times of rapidly changing marketconditions. A 5% change in the valuation of our inventories would be approximately $5 million.35Table of ContentsOtherInflationWe have historically been able to offset the impact of rising costs through productivity improvements as well as selective priceincreases. As a result, inflation has not had, and is not expected to have, a significant impact on our business.New Accounting PronouncementsDerivative Instruments and Hedging ActivitiesIn March 2008, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards(SFAS) No. 161, Disclosures about Derivative Instruments and Hedging Activities – an amendment of FASB Statement No. 133.The statement requires enhanced disclosures for derivative and hedging activities, including information that would enable financialstatement users to understand how and why a company uses derivative instruments, how derivative instruments and related hedged itemsare accounted for under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, and how derivative instrumentsand related hedged items affect an entity’s financial position, financial performance and cash flows. This statement is effective forfinancial statements issued for fiscal years and interim periods beginning after November 15, 2008 and will be applicable to our financialstatements beginning in the first quarter of 2009. As SFAS No. 161 only requires enhanced disclosures, we do not anticipate that thisstandard will have a material impact on our financial position, results of operations or cash flows.Fair Value MeasurementsIn September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. The Statement provides guidance for using fairvalue to measure assets and liabilities and only applies when other standards require or permit the fair value measurement of assets andliabilities. It does not expand the use of fair value measurement. In February 2008, the FASB announced that it was deferring the effectivedate to fiscal years beginning after November 15, 2008 for certain non-financial assets and non-financial liabilities, except those that arerecognized or disclosed at fair value in the financial statements on a recurring basis. For these financial and non-financial assets andliabilities that are remeasured at least annually, this statement was effective for fiscal years beginning after November 15, 2007. Weadopted SFAS No. 157 for financial and non-financial assets and liabilities that are remeasured at least annually which for usrepresented derivative instruments and hedging activities which are carried at fair value. The adopted provision of SFAS No. 157 has notand the deferred adoption is not expected to have a material impact on our financial position, results of operations or cash flows. See Note4 of our Notes to Condensed Consolidated Financial Statements for further discussion of fair value for derivative instruments.ITEM 7A — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKIn addition to the risks inherent in our operations, we have exposure to financial and market risk resulting from volatility incommodity prices and interest rates. The following discussion provides additional detail regarding our exposure to these risks.a. Commodity Price RisksWe are exposed to fluctuation in commodity prices through the purchase of raw materials that are processed from commodities suchas aluminum, steel, wood and polyethylene. Given the historical volatility of certain commodity prices, this exposure can significantlyimpact product costs. Historically, we have managed aluminum price changes by entering into fixed price contracts with our suppliers.As of December 31, 2008, we had $29.4 million in raw material purchase commitments through December 2009 for materials that will beused in the production process. We typically do not set prices for our products more than 45-90 days in advance of our commoditypurchases and can, subject to competitive market conditions, take into account the cost of the commodity in setting our prices for eachorder. To the extent that we are unable to offset the increased commodity costs in our product prices, our results would be materially andadversely affected.36Table of Contents b. Interest Rates During 2008, we entered into two interest rate swap agreements that fixed a portion of our underlying variable rate borrowings underour Revolving Facility at rates of 3.753% and 2.990%. This compares to the variable rate of the three-month LIBOR plus the applicablemargin set forth within the Revolving Facility. The notional amount of the interest rate swap agreements entered into totaled $40 millionwith $30 million expiring in September 2010 and the remaining $10 million expiring in October 2010. Based on amounts outstanding atDecember 31, 2008, (after taking into account the effect of the interest rate swap agreement) if the interest rate on our variable rate debtwere to change by a hypothetical 100 basis-points, the interest expense over a one-year period would change by approximately$0.4 million. This sensitivity analysis does not account for the change in the competitive environment indirectly related to the change ininterest rates and the potential managerial action taken in response to these changes.37Table of ContentsITEM 8 — FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Pages Report of Independent Registered Public Accounting Firm 39 Consolidated Balance Sheets as of December 31, 2008 and 2007 40 Consolidated Statements of Operations for the years ended December 31, 2008, 2007 and 2006 41 Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2008, 2007 and 2006 42 Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2007 and 2006 43 Notes to Consolidated Financial Statements 44 38Table of ContentsReport of Independent Registered Public Accounting FirmThe Board of Directors and Shareholders of Wabash National CorporationWe have audited the accompanying consolidated balance sheets of Wabash National Corporation as of December 31, 2008 and 2007, andthe related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years in the period endedDecember 31, 2008. These financial statements are the responsibility of the Company’s management. Our responsibility is to express anopinion on these financial statements based on our audits.We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position ofWabash National Corporation at December 31, 2008 and 2007, and the consolidated results of its operations and its cash flows for eachof the three years in the period ended December 31, 2008, in conformity with U.S. generally accepted accounting principles.The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussedin Note 1 to the Consolidated Financial Statements, the Company’s industry continued to experience a significant downturn which hashad an adverse impact on the Company’s results of operations, financial position and liquidity. The Company has incurred a loss fromoperations in 2008 and subsequent to December 31, 2008, the Company has experienced events of default under its Second Amended andRestated Loan and Security Agreement which gives the lenders the right to declare all amounts outstanding immediately due and payable,to restrict advances and to terminate the facility. These factors raise substantial doubt about the Company’s ability to continue as a goingconcern. Management’s plans concerning these matters are also discussed in Note 1 to the Consolidated Financial Statements. The 2008financial statements do not include any adjustments that might result from the outcome of this uncertainty.As discussed in Note 13 to the Consolidated Financial Statements, effective January 1, 2007, the Company adopted Financial AccountingStandards Board Interpretation No. 48, “Accounting for Uncertainty in Income Taxes,” an interpretation of Financial AccountingStandards No. 109.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), WabashNational Corporation’s internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control— Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated April9, 2009 expressed an unqualified opinion thereon.ERNST & YOUNG LLPIndianapolis, IndianaApril 9, 200939Table of ContentsWABASH NATIONAL CORPORATIONCONSOLIDATED BALANCE SHEETS(Dollars in thousands) December 31, 2008 2007 ASSETSCURRENT ASSETS: Cash and cash equivalents $29,766 $41,224 Accounts receivable, net 37,925 68,752 Inventories 92,896 113,125 Deferred income taxes - 14,514 Prepaid expenses and other 5,307 4,046 Total current assets 165,894 241,661 PROPERTY, PLANT AND EQUIPMENT, net 122,035 122,063 DEFERRED INCOME TAXES - 2,772 GOODWILL - 66,317 INTANGIBLE ASSETS 29,089 32,498 OTHER ASSETS 14,956 18,271 $331,974 $483,582 LIABILITIES AND STOCKHOLDERS’ EQUITYCURRENT LIABILITIES: Current portion of long-term debt $80,008 $- Current portion of capital lease obligation 337 - Accounts payable 42,798 40,787 Other accrued liabilities 45,449 54,258 Total current liabilities 168,592 95,045 LONG-TERM DEBT - 104,500 CAPITAL LEASE OBLIGATION 4,803 - OTHER NONCURRENT LIABILITIES AND CONTINGENCIES 5,142 4,108 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, 30,026,010 and29,842,945 shares issued and outstanding, respectively 324 321 Additional paid-in capital 352,137 347,143 Retained deficit (172,031) (42,058)Accumulated other comprehensive income (1,516) - Treasury stock at cost, 1,675,600 common shares (25,477) (25,477)Total stockholders’ equity 153,437 279,929 $331,974 $483,582 The accompanying notes are an integral part of these Consolidated Statements.40Table of ContentsWABASH NATIONAL CORPORATIONCONSOLIDATED STATEMENTS OF OPERATIONS(Dollars in thousands, except per share amounts) Years Ended December 31, 2008 2007 2006 NET SALES $836,213 $1,102,544 $1,312,180 COST OF SALES 815,289 1,010,823 1,207,687 Gross profit $20,924 $91,721 $104,493 GENERAL AND ADMINISTRATIVE EXPENSES 44,094 49,512 51,157 SELLING EXPENSES 14,290 15,743 15,070 IMPAIRMENT OF GOODWILL 66,317 - 15,373 (Loss) Income from operations $(103,777) $26,466 $22,893 OTHER INCOME (EXPENSE): Interest expense (4,657) (5,755) (6,921) Foreign exchange, net (156) 3,818 (77) Gain on debt extinguishment 151 546 - Other, net (323) (387) 407 (Loss) Income before income taxes $(108,762) $24,688 $16,302 INCOME TAX EXPENSE 17,064 8,403 6,882 Net (loss) income $(125,826) $16,285 $9,420 COMMON STOCK DIVIDENDS DECLARED $0.135 $0.18 $0.18 BASIC NET (LOSS) INCOME PER SHARE $(4.20) $0.54 $0.30 DILUTED NET (LOSS) INCOME PER SHARE $(4.20) $0.52 $0.30 COMPREHENSIVE (LOSS) INCOME Net (loss) income $(125,826) $16,285 $9,420 Changes in fair value of derivatives (1,516) - - Reclassification adjustment for foreign exchange gains included in netincome - (3,322) - Foreign currency translation adjustment - 347 617 NET COMPREHENSIVE (LOSS) INCOME $(127,342) $13,310 $10,037 The accompanying notes are an integral part of these Consolidated Statements.41Table of ContentsWABASH NATIONAL CORPORATIONCONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY(Dollars in thousands) Additional Retained Other Common Stock Paid-In Earnings Comprehensive Treasury Shares Amount Capital (Deficit) Income (Loss) Stock Total BALANCES, December 31, 2005 31,079,958 $315 $337,327 $(56,653) $2,358 $(4,645) $278,702 Net income for the year - - - 9,420 - - 9,420 Foreign currency translation - - - - 617 - 617 Stock-based compensation 14,492 3 3,975 - - - 3,978 Stock repurchase (726,300) - - - - (10,544) (10,544)Common stock dividends - - - (5,654) - - (5,654)Tax benefit from stock-based compensation - - 352 - - - 352 Common stock issued under: Employee stock bonus plan 970 - 4 - - - 4 Stock option plan 90,278 1 761 - - - 762 Outside directors’ plan 20,636 - 318 - - - 318 BALANCES, December 31, 2006 30,480,034 $319 $342,737 $(52,887) $2,975 $(15,189) $277,955 Net income for the year - - - 16,285 - - 16,285 Foreign currency translation - - - - 347 - 347 Foreign currency translation realized ondisposition of Canadian subsidiary - - - - (3,322) - (3,322)Stock-based compensation 46,734 2 4,356 - - - 4,358 Stock repurchase (716,068) - (214) - - (10,288) (10,502)Common stock dividends - - - (5,456) - - (5,456)Tax benefit from stock-based compensation - - (125) - - - (125)Common stock issued under: Stock option plan 10,636 - 74 - - - 74 Outside directors’ plan 21,609 - 315 - - - 315 BALANCES, December 31, 2007 29,842,945 $321 $347,143 $(42,058) $- $(25,477) $279,929 Net loss for the year - - - (125,826) - - (125,826)Stock-based compensation 155,852 3 4,987 - - - 4,990 Stock repurchase (17,714) - (138) - - - (138)Common stock dividends - - - (4,147) - - (4,147)Tax benefit from stock-based compensation - - (222) - - - (222)Interest rate swap - - - - (1,516) - (1,516)Common stock issued under: Stock option plan 11,267 - 97 - - - 97 Outside directors’ plan 33,660 - 270 - - - 270 BALANCES, December 31, 2008 30,026,010 $324 $352,137 $(172,031) $(1,516) $(25,477) $153,437 The accompanying notes are an integral part of these Consolidated Statements.42Table of ContentsWABASH NATIONAL CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS(Dollars in thousands) Years Ended December 31, 2008 2007 2006 CASH FLOWS FROM OPERATING ACTIVITIES Net (loss) income $(125,826) $16,285 $9,420 Adjustments to reconcile net (loss) income to net cash provided by operating activities Depreciation and amortization 21,467 19,467 20,598 Net loss (gain) on the sale of assets 606 116 (796)Foreign exchange gain on disposition of Canadian subsidiary - (3,322) - Gain on early debt extinguishment (151) (546) - Deferred income taxes 17,286 8,182 7,744 Excess tax benefits from stock-based compensation (6) (33) (352)Stock-based compensation 4,990 4,358 3,978 Impairment of goodwill 66,317 - 15,373 Changes in operating assets and liabilities Accounts receivable 30,827 41,710 26,141 Finance contracts - 7 1,497 Inventories 20,229 19,958 (20,332)Prepaid expenses and other 436 6 1,716 Accounts payable and accrued liabilities (5,657) (48,487) (15,649)Other, net 149 1,625 2,431 Net cash provided by operating activities $30,667 $59,326 $51,769 CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (12,613) (6,714) (12,931)Acquisition, net of cash acquired - (4,500) (69,307)Proceeds from the sale of property, plant and equipment 213 147 7,121 Net cash used in investing activities $(12,400) $(11,067) $(75,117) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from exercise of stock options 97 74 762 Excess tax benefits from stock-based compensation 6 33 352 Borrowings under revolving credit facilities 202,908 103,721 243,313 Payments under revolving credit facilities (122,900) (103,721) (243,313)Payments under long-term debt obligations (104,133) (19,852) (500)Principal payments under capital lease obligation (193) - - Repurchase of common stock - (11,668) (9,164)Common stock dividends paid (5,510) (5,507) (5,654)Net cash used in financing activities $(29,725) $(36,920) $(14,204) NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS $(11,458) $11,339 $(37,552)CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 41,224 29,885 67,437 CASH AND CASH EQUIVALENTS AT END OF YEAR $29,766 $41,224 $29,885 Supplemental disclosures of cash flow information Cash paid during the period for Interest $5,247 $4,870 $5,266 Income taxes (received) paid, net $(4) $890 $41 The accompanying notes are an integral part of these Consolidated Statements.43Table of ContentsWABASH NATIONAL CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS1.DESCRIPTION OF THE BUSINESS, LIQUIDITY AND GOING CONCERNa. Description of the BusinessWabash National Corporation (the Company) designs, manufactures and markets standard and customized truck trailers andintermodal equipment under the Wabash, DuraPlate, DuraPlateHD, FreightPro, ArcticLite®, RoadRailer, Transcraft, Eagle,Eagle II, D-Eagle and BensonTM trademarks. The Company’s wholly-owned subsidiary, Wabash National Trailer Centers, Inc.(WNTC), sells new and used trailers through its retail network and provides aftermarket parts and service for the Company’s andcompetitors’ trailers and related equipment.b. Liquidity and Going ConcernAs of December 31, 2008, the Company’s liquidity position, defined as cash on hand of $29.8 million and available borrowingcapacity under the Company’s Second Amended and Restated Loan and Security Agreement (Revolving Facility) of approximately$34.7 million, amounted to $64.5 million.While the Company was in compliance with its financial covenants under its Revolving Facility at December 31, 2008, subsequentto year end, events of default have occurred under the Revolving Facility which permits the lenders to increase the interest on theoutstanding principal by 2%, to cause an acceleration of the maturity of borrowings, to restrict advances, and to terminate the RevolvingFacility. On April 1, 2009, the Company received written notice from the administrative agent for the Revolving Facility asserting theexistence of events of default under the Revolving Facility relating to the failure to deliver the required financial statements, failure todeliver notice of the change in name of a Company subsidiary, and requests for borrowings during the pendency of an event of default. Inaccordance with the terms of the Revolving Facility, as of April 1, 2009, the agent has increased the interest on the outstanding principalunder the Revolving Facility by 2% and implemented availability reserves that result in a reduction of the Company’s borrowing baseunder the Revolving Facility by $25 million.In addition to the events of default for which the agent has already provided notice, on April 1, 2009, the Company incurred anevent of default related to its borrowing capacity and fixed charge coverage ratio. The Revolving Facility contains a financial covenant thatprovides that when the Company’s available borrowing capacity drops below $30 million, it becomes subject to a minimum fixed chargecoverage ratio of 1.1:1.0, as defined. As a result of draws on April 1, 2009, the Company’s available borrowing capacity dropped below$30 million and the Company does not meet the fixed charge coverage ratio requirements. Furthermore, because the report of theCompany’s independent registered public accounting firm on these consolidated financial statements includes an explanatory paragraphwith respect to the Company’s ability to continue as a going concern, the Company has incurred an additional event of default.The Revolving Facility provides that as a result of the events of default identified in the written notice of the administrative agent, aswell as the other events of defaults referenced above, the lenders could elect to declare all amounts outstanding under the RevolvingFacility, together with accrued interest, to be immediately due and payable. While the administrative agent’s notice did not terminate theRevolving Facility or demand immediate repayment of any outstanding debt and the payment of accrued interest thereunder, it doesreserve the rights of the lenders to do any of the foregoing or seek any other available remedies. There can be no assurance that theseactions will not occur at any time as a result of the events of default referenced in the notice or the occurrence of other events of default.The Revolving Facility also contains additional customary affirmative covenants and events of default, including among otherevents, certain cross defaults, business disruption, condemnation and change in ownership. In addition, a material adverse effect clause,which permits the lenders to subjectively determine when a material adverse change in our business or financial condition occurs, couldresult in an event of default and an early termination of the Revolving Facility.44Table of ContentsThe Company is in discussions with the lenders concerning the events of default and negotiation of a forbearance agreement toaddress the consequences of the defaults and to provide additional liquidity while the Company continues discussions to amend theRevolving Facility and to waive any events of default. There can be no assurance that a forbearance agreement will be entered into or thatan amendment or waiver will be obtained. Based on these events, the Company has classified its obligations outstanding under theRevolving Facility as current liabilities in the accompanying consolidated balance sheet as of December 31, 2008.Operationally, the Company faces significant uncertainty regarding the demand for trailers within the current economic environment.According to the most recent A.C.T. Research Co., LLC (ACT) estimates, total trailer industry shipments for 2009 are expected to bedown 47% from 2008 to approximately 76,000 units. The decrease in the demand for trailers reflects the weakness of truck freight, whichhas trended down since the latter part of 2006 as a result of general economic conditions and, more particularly, declines in new homeconstruction and the automotive industry. ACT estimates that shipments in 2010 will increase approximately 79% to a total of 136,000units. The biggest concerns going into 2009 relate to the global economy, especially credit markets, as well as the continued decline inhousing and construction-related markets in the U.S. The Company’s expectation is that the trailer industry will remain challengingthroughout 2009 before a recovery in 2010. Based on industry forecasts, conversations with its customers regarding their requirements,and assuming the Company maintains its current market share, the Company estimates that for the full year 2009 total units will bebetween 18,000 and 22,000, a 46% to 34% reduction from 2008. As a result, it is likely that it will incur net losses in 2009, which willfurther reduce the Company’s stockholders’ equity. The Company’s liquidity remains constrained such that it may not be sufficient tomeet the Company’s cash operating needs in this period of economic uncertainty. If the Company would require liquidity in excess ofwhat is available under its Revolving Facility, there is no assurance that the Company can obtain additional liquidity on commerciallyreasonable terms, if at all.In light of current uncertain market and economic conditions, the Company is aggressively managing its capital expenditures, coststructure and cash position. Capital spending in 2008 amounted to approximately $12.6 million, including $2.8 million for the assetspurchased in July 2008 from Benson International LLC, and is anticipated to be approximately $2.0 million for 2009. The spending for2009 will be limited to required maintenance and cost reduction initiatives in efforts to manage cash flows and enhance liquidity.In 2009, the Company has implemented additional cost reduction actions that will substantially decrease its corporate overhead andoperating costs, including: • salaried workforce headcount reductions of approximately 100 associates, or 20%, bringing total salaried headcount reductionsto over 35%, or approximately 200 associates, since the beginning of the industry downturn in early 2007; • a 16.75% reduction in base salary for Executive Officers; • a temporary reduction of 15% of annualized base salary for all remaining exempt-level salaried associates, combined with areduction in the standard work week for most from 40 hours to 36 hours; • a temporary reduction in the standard paid work week from 40 hours to 36 hours for all non-exempt associates; • a temporary 5% reduction in hourly wages; • a temporary suspension of the 401(k) company match; • the introduction of a voluntary unpaid layoff program with continuation of benefits; and, • the continued close regulation of the work-day and headcount of hourly associates.These actions were substantially complete and in effect by February 1, 2009, and are incremental to previous actions taken duringthis downturn. Previous actions included idling of plants and assembly lines, consolidation and transformation initiatives at theCompany’s Lafayette facility, salaried workforce reductions, reductions in total compensation awards to executives and other eligibleparticipants, the suspension of any company match for non-qualified plan participants, as well as the suspension of its quarterlydividend.In addition to the continued focus on generation and preservation of cash, the Company is also focused on increasing its liquidity. Inorder to accomplish this goal, the Company will likely need to issue new common equity, preferred equity, or obtain modification to, oradditional sources of, debt. Any new issuance may take the form of public or private offerings for debt or equity. The Company’s abilityto obtain additional liquidity will depend upon a number of factors, including its future performance and financial results and generaleconomic and capital market45Table of Contentsconditions. The Company cannot be sure that it will be able to raise additional capital on reasonable terms or at all, if needed.The Board of Directors has also authorized management to pursue and evaluate a wide range of strategic alternatives available to theCompany. Strategic alternatives to be considered may include but are not limited to, select business divestitures, changes to theCompany’s capital structure, or a possible sale, merger or other business combination involving the Company. There can be noassurance that this evaluation will result in any specific transaction.The factors noted above raise substantial doubt about the Company’s ability to continue as a going concern. The accompanyingconsolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa. Basis of ConsolidationThe 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.b. Use of EstimatesThe preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requiresmanagement to make estimates and assumptions that directly affect the amounts reported in its consolidated financial statements andaccompanying notes. Actual results could differ from these estimates.c. Foreign Currency AccountingThe financial statements of the Company’s Canadian subsidiary have been translated into U.S. dollars in accordance withFinancial Accounting Standards Board (FASB) Statement No. 52, Foreign Currency Translation. Assets and liabilities have beentranslated using the exchange rate in effect at the balance sheet date. Revenues and expenses have been translated using a weighted-averageexchange rate for the period. The resulting translation adjustments are recorded as Accumulated Other Comprehensive Income inStockholders’ Equity. Gains or losses resulting from foreign currency transactions are included in Foreign Exchange, net on theCompany’s Consolidated Statements of Operations.As a result of the sale of the remaining assets assigned to the Company’s Canadian subsidiary, the operational activities pertainingto this entity were considered substantially liquidated during 2007, and, in accordance with FASB Statement No. 52, Foreign CurrencyTranslation, the Company recorded accumulated foreign currency translation gains of $3.3 million to Foreign Exchange, net in theConsolidated Statement of Operations for the year ended December 31, 2007.d. Revenue RecognitionThe Company recognizes revenue from the sale of trailers and aftermarket parts when the customer has made a fixed commitment topurchase the trailers for a fixed or determinable price, collection is reasonably assured under the Company’s billing and credit terms andownership and all risk of loss has been transferred to the buyer, which is normally upon shipment to or pick up by the customer.Revenues exclude all taxes collected from the customer.e. Used Trailer Trade Commitments and Residual Value GuaranteesThe Company has commitments with certain customers to accept used trailers on trade for new trailer purchases. Thesecommitments arise in the normal course of business related to future new trailer orders at the time a new trailer order is placed by thecustomer. The Company acquired used trailers of approximately $20.7 million, $21.0 million and $36.9 million in 2008, 2007 and2006, respectively. As of December 31, 2008 and 2007, the Company had approximately $4.9 million and $23.8 million, respectively, ofoutstanding trade commitments. On46Table of Contentsoccasion, the amount of the trade allowance provided for in the used trailer commitments may exceed the net realizable value of theunderlying used trailer. In these instances, the Company’s policy is to recognize the loss related to these commitments at the time the newtrailer revenue is recognized. The net realizable value of the used trailers subject to the remaining outstanding trade commitments wasestimated by the Company to be approximately $4.8 million and $23.0 million as of December 31, 2008 and 2007, respectively.f. Cash and Cash EquivalentsCash equivalents consist of highly liquid investments, which are readily convertible into cash and have maturities of three monthsor less.g. Accounts ReceivableAccounts receivable are shown net of allowance for doubtful accounts and primarily include trade receivables. The Companyrecords and maintains a provision for doubtful accounts for customers based upon a variety of factors including the Company’shistorical experience, the length of time the account has been outstanding and the financial condition of the customer. If the circumstancesrelated to specific customers were to change, the Company’s estimates with respect to the collectibility of the related accounts could befurther adjusted. Provisions to the allowance for doubtful accounts are charged to both General and Administrative Expenses andSelling Expenses in the Consolidated Statements of Operations. The activity in the allowance for doubtful accounts was as follows (inthousands): Years Ended December 31, 2008 2007 2006 Balance at beginning of year $1,770 $1,417 $1,807 Expense (income) 689 560 36 Write-offs, net (276) (207) (426)Balance at end of year $2,183 $1,770 $1,417 h. InventoriesInventories are primarily stated at the lower of cost, determined on the first-in, first-out (FIFO) method, or market. The cost ofmanufactured inventory includes raw material, labor and overhead. Inventories consist of the following (in thousands): December 31, 2008 2007 Raw materials and components $23,758 $29,666 Work in progress 373 1,023 Finished goods 48,997 64,772 Aftermarket parts 6,333 5,324 Used trailers 13,435 12,340 $92,896 $113,125 i. Prepaid Expenses and OtherPrepaid expenses and other as of December 31, 2008 and 2007 were $5.3 million and $4.0 million, respectively. Prepaid expensesand other primarily included items such as insurance premiums, computer software maintenance, and assets held for sale. Assets heldfor sale, which consists of a closed manufacturing facility in Mt. Sterling, Kentucky, was $1.7 million as of December 31, 2008.j. Property, Plant and EquipmentProperty, plant and equipment are recorded at cost. Maintenance and repairs are charged to expense as incurred, while expendituresthat extend the useful life of an asset are capitalized. Depreciation is recorded using the straight-line method over the estimated useful livesof the depreciable assets. The estimated useful lives are up to 3347Table of Contentsyears for buildings and building improvements and range from three to ten years for machinery and equipment. Depreciation expense onproperty, plant and equipment was $15.3 million, $13.1 million and $12.8 million for 2008, 2007 and 2006, respectively. In July 2008,the Company entered into a non-cash capital lease obligation for its manufacturing facility in Cadiz, Kentucky totaling $5.3 million. Asof December 31, 2008, the assets related to this facility were recorded within Property, Plant and Equipment in the CondensedConsolidated Balance Sheet for the amount of $5.3 million, net of less than $0.1 million of accumulated depreciation.Property, plant and equipment consist of the following (in thousands): December 31, 2008 2007 Land $21,654 $21,468 Buildings and building improvements 92,443 89,045 Machinery and equipment 152,723 148,508 Construction in progress 6,949 3,028 273,769 262,049 Less accumulated depreciation (151,734) (139,986) $122,035 $122,063 k. GoodwillThe changes in the carrying amount of goodwill in the manufacturing reportable segment are as follows (in thousands): Total Balance as of January 1, 2007 $66,692 Acquisition adjustment — Transcraft (375)Balance as of December 31, 2007 $66,317 Impairment of goodwill (66,317)Balance as of December 31, 2008 $– In accordance with Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets, theCompany tests goodwill for impairment on an annual basis or more frequently if an event occurs or circumstances change that couldmore likely than not reduce the fair value of a reporting unit below its carrying amount. The Company estimates fair value based upon thepresent value of future cash flows as well as considering the estimated market value of the Company and its reporting units. In estimatingthe future cash flows, the Company takes into consideration the overall and industry economic conditions and trends, market risk of theCompany and historical information.During the fourth quarter of 2008, the Company reviewed its goodwill for impairment and, based on a combination of factors,including the significant decline in the Company’s market capitalization as well as the current decline in the U.S. economy, the Companyconcluded that indicators of potential impairment were present. Under SFAS No. 142, the measurement of impairment of goodwillconsists of two steps. The first step requires the Company to compare the fair value of the reporting unit to its carrying value. During thefourth quarter, the Company completed a valuation of the fair value of its reporting units which incorporated existing market basedconsiderations as well as discounted cash flows based on current and projected results. Based on this evaluation, it was determined thatthe carrying value of both the Company’s platform trailer and wood product manufacturing operations exceeded its fair value. The secondstep involves determining the implied fair value of each reporting unit’s goodwill as compared to its carrying value. After calculating theimplied fair value of the goodwill by deducting the fair value of all tangible and intangible net assets of the reporting unit from the fairvalue of the reporting unit, it was determined that the recorded goodwill of $66.3 million was fully impaired. Based on these facts andcircumstances, the Company recorded a non-cash goodwill impairment of $66.3 million.48Table of ContentsIn 2006, as part of the Company’s review of its goodwill for impairment, it determined that the goodwill within the retail anddistribution reporting unit was impaired. The Company determined that the book value of the reporting unit exceeded the estimated fairvalue of the reporting unit as determined using the present value of expected future cash flows on the assessment date. After calculating theimplied fair value of the goodwill by deducting the fair value of all tangible and intangible net assets of the reporting unit from the fairvalue of the reporting unit, it was determined that the recorded goodwill of $15.4 million was fully impaired. The goodwill impairment in2006 was the result of the revised outlook as determined by Company’s budgeting process for future periods. Future periods were beingimpacted by changes in the pattern of used trailer trade activity by larger fleet operators resulting in longer trade cycles and increasedlevels of direct sales of the used trailers by customers. These changes impact both the profitability of used trailers and parts and servicesoperations. Also impacting future periods is the continued reduction of our retail locations.l. Intangible AssetsThe Company has intangible assets including patents, licenses, trade names, trademarks, customer relationships and technologycosts, which are being amortized on a straight-line basis over periods ranging up to 20 years. As of December 31, 2008 and 2007, theCompany had gross intangible assets of $54.0 million. Amortization expense for 2008, 2007 and 2006 was $3.4 million, $3.5 millionand $4.6 million, respectively, and is estimated to be $3.1 million, $3.1 million, $3.0 million, $3.0 million and $3.0 million for years2009 through 2013.m. Other AssetsThe Company capitalizes the cost of computer software developed or obtained for internal use in accordance with Statement ofPosition No. 98-1, Accounting for the Costs of Computer Software Developed or Obtained for Internal Use. Capitalized software isamortized using the straight-line method over three to seven years. As of December 31, 2008 and 2007, the Company had software costs,net of amortization, of $10.1 million and $12.4 million, respectively. Amortization expense for 2008, 2007 and 2006 was $2.5 million,$2.4 million and $1.6 million, respectively.n. Long-Lived AssetsLong-lived assets are reviewed for impairment in accordance with SFAS No. 144, Accounting for the Impairment or Disposal ofLong-Lived Assets, whenever facts and circumstances indicate that the carrying amount may not be recoverable. Specifically, thisprocess involves comparing an asset’s carrying value to the estimated undiscounted future cash flows the asset is expected to generate overits remaining life. If this process were to result in the conclusion that the carrying value of a long-lived asset would not be recoverable, awrite-down of the asset to fair value would be recorded through a charge to operations. Fair value is determined based upon discountedcash flows or appraisals as appropriate.o. Other Accrued LiabilitiesThe following table presents the major components of Other Accrued Liabilities (in thousands): Years Ended December 31, 2008 2007 Warranty $17,027 $17,246 Payroll and related taxes 8,450 10,040 Self-insurance 7,555 8,548 Accrued taxes 6,348 5,951 Customer deposits 1,980 4,616 All other 4,089 7,857 $45,449 $54,258 49Table of ContentsThe following table presents the changes in the product warranty accrual included in Other Accrued Liabilities (in thousands): 2008 2007 Balance as of January 1 $17,246 $14,978 Provision for warranties issued in current year 3,052 4,181 Additional provisions for pre-existing warranties 808 2,291 Payments (4,079) (4,204)Balance as of December 31 $17,027 $17,246 The Company offers a limited warranty for its products. With respect to Company products manufactured prior to 2005, thelimited warranty coverage period is five years. Beginning in 2005, the coverage period for DuraPlate® trailer panels was extended to tenyears, with all other products remaining at five years. The Company passes through component manufacturers’ warranties to ourcustomers. 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 self-insurance accrual included in Other Accrued Liabilities (in thousands): Self-Insurance Accrual Balance as of January 1, 2007 $8,742 Expense 27,436 Payments (27,630)Balance as of December 31, 2007 $8,548 Expense 24,411 Payments (25,404)Balance as of December 31, 2008 $7,555 The Company is self-insured up to specified limits for medical and workers’ compensation coverage. The self-insurance reserveshave been recorded to reflect the undiscounted estimated liabilities, including claims incurred but not reported, as well as catastrophicclaims as appropriate.p. Income TaxesThe Company determines its provision or benefit for income taxes under the asset and liability method. The asset and liabilitymethod measures the expected tax impact at current enacted rates of future taxable income or deductions resulting from differences in thetax and financial reporting basis of assets and liabilities reflected in the Consolidated Balance Sheets. Future tax benefits of tax losses andcredit carryforwards are recognized as deferred tax assets. Deferred tax assets are reduced by a valuation allowance to the extent theCompany concludes there is uncertainty as to their realization.The Company accounts for income tax contingencies in accordance with FASB issued Interpretation No. 48, Accounting forUncertainty in Income Taxes, an interpretation of Financial Accounting Standard 109, Accounting for Income Taxes (FIN 48). FIN48 clarifies accounting for income taxes by prescribing a minimum recognition threshold that a tax position is required to meet beforebeing recognized in the financial statements.q. New Accounting PronouncementsDerivative Instruments and Hedging Activities. In March 2008, the Financial Accounting Standards Board (FASB) issuedStatement of Financial Accounting Standards (SFAS) No. 161, Disclosures about Derivative Instruments and Hedging Activities –an amendment of FASB Statement No. 133. The statement requires enhanced disclosures for derivative and hedging activities, includinginformation that would enable financial statement users to understand how and why a company uses derivative instruments, howderivative instruments and related hedged items are accounted for under SFAS No. 133, Accounting for Derivative Instruments andHedging Activities, and50Table of Contentshow derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. Thisstatement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008 and will beapplicable to the Company in the first quarter of 2009. As SFAS No. 161 only requires enhanced disclosures, the Company does notanticipate that this standard will have a material impact on its financial position, results of operations or cash flows.Fair Value Measurements. In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. The Statementprovides guidance for using fair value to measure assets and liabilities and only applies when other standards require or permit the fairvalue measurement of assets and liabilities. It does not expand the use of fair value measurement. In February 2008, the FASB announcedthat it was deferring the effective date to fiscal years beginning after November 15, 2008 for certain non-financial assets and non-financialliabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis. For these financialand non-financial assets and liabilities that are remeasured at least annually, this statement was effective for fiscal years beginning afterNovember 15, 2007. The Company adopted SFAS No. 157 for financial and non-financial assets and liabilities that are remeasured atleast annually which represented derivative instruments and hedging activities which are carried at fair value. The adopted provision ofSFAS No. 157 has not and the deferred adoption is not expected to have a material impact on the Company’s financial position, results ofoperations or cash flows. See Note 4 for further discussion of fair value for derivative instruments.3.DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIESIn September 2008, the Company entered into a two-year interest rate swap agreement (“Swap”) whereby the Company pays a fixedrate of 3.753% on $30 million of notional principal to its counterparty, and the counterparty pays to the Company a variable rate on thesame notional amount based on the three-month London Interbank Offered Rate (“LIBOR”). In October 2008, the Company entered intoan additional two-year Swap whereby the Company pays a fixed rate of 2.99% on $10 million of notional principal. The Company isexposed to credit loss in the event of nonperformance by the counterparty. However, the Company considers this risk to be low.Under the provisions of SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended andinterpreted, the Company has designated both Swaps as cash flow hedges in an effort to reduce its exposure to fluctuations in interestrates by converting a portion of its variable rate borrowings to a fixed rate for a specific period of time. The changes in the fair value of aderivative designated as a cash flow hedge are recorded in other comprehensive income and are recognized in the statement of operationswhen the hedged item affects net income.As of December 31, 2008, the Company estimates the fair value of the $30 million notional Swap and the $10 million notionalSwap identified above to be liabilities of $1.2 million and $0.3 million, respectively. The fair values of the Swaps are estimated usingLevel 3 inputs, as described in Note 4. The fair value is an estimate of the net amount that the Company would be required to pay orwould receive on December 31, 2008, if the agreements were transferred to another party or cancelled by the Company.4.FAIR VALUE MEASUREMENTSAs discussed in Note 2, in September 2006, the FASB issued SFAS No. 157 which addresses aspects of expanding the applicationof fair value accounting. Effective January 1, 2008, the Company adopted certain provisions of SFAS No. 157. Pursuant to theprovisions of FSP No. 157-2, the Company has deferred the adoption of SFAS No. 157 for non-financial assets and liabilities that arerecognized or disclosed at fair value in the financial statements on a nonrecurring basis.SFAS No. 157 establishes a three-level valuation hierarchy for fair value measurements. These valuation techniques are based uponthe transparency of inputs (observable and unobservable) to the valuation of an asset or liability as of the measurement date. Observableinputs 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:51Table of Contents •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 areobservable 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.The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that wereaccounted for at fair value on a recurring basis as of December 31, 2008 (in thousands): Level 1 Level 2 Level 3 Quoted Prices in Active Significant Markets for Other Significant Identical Assets Observable Unobservable Or Liabilities Inputs Inputs Total Assets Interest rate derivatives $- $- $- $- Liabilities Interest rate derivatives $- $- $1,516 $1,516 Financial instruments classified as Level 3 in the fair value hierarchy represent derivative contracts in which management has usedat least one significant unobservable input in the valuation model. The following table presents a reconciliation of activity for suchderivative contracts on a net basis (in thousands): Year Ended December 31, 2008 Balance at beginning of period $- Total unrealized losses included in other comprehensive income (1,516)Purchases, sales, issuances, and settlements - Transfers in and (or) out of Level 3 - Balance at end of period $(1,516)5.FAIR VALUE OF FINANCIAL INSTRUMENTSSFAS No. 107, Disclosures About Fair Value of Financial Instruments, requires disclosure of fair value information for certainfinancial instruments. The differences between the carrying amounts and the estimated fair values, using the methods and assumptionslisted below, of the Company’s financial instruments at December 31, 2008, and 2007 were immaterial, with the exception of the SeniorConvertible Notes.Cash and Cash Equivalents, Accounts Receivable and Accounts Payable. The carrying amounts reported in the ConsolidatedBalance Sheets approximate fair value.Debt. The fair value of total borrowings is estimated based on current quoted market prices for similar issues or debt with the samematurities. The interest rates on the Company’s bank borrowings under its Revolving Facility are adjusted regularly to reflect currentmarket rates.52Table of Contents6.ACQUISITIONAs part of the Company’s commitment to expand its customer base and grow its market leadership, Wabash acquired all of theoutstanding shares of Transcraft on March 3, 2006, for approximately $73.8 million in cash, including a payment of $4.5 million in2007 based on Transcraft’s achievement of 2006 performance targets.The results of Transcraft are included in the Consolidated Statements of Operations from the date of acquisition. The followingunaudited pro forma information is shown below as if the acquisition of Transcraft had been completed as of the beginning of the fiscalyear presented (in thousands, except per share amounts): Twelve Months Ended December 31, 2006 Net sales $1,343,137 Income from operations 28,629 Net income 9,840 Basic net income per share 0.32 Diluted net income per share 0.31 The information presented above is for informational purposes only and is not necessarily indicative of the actual results that wouldhave occurred had the acquisition been consummated at the beginning of the fiscal year presented, nor are they necessarily indicative offuture operating results of the combined companies under the ownership and management of the Company.7.PER SHARE OF COMMON STOCKPer share results have been computed based on the average number of common shares outstanding. The computation of basic anddiluted net (loss) income per share is determined using net (loss) income applicable to common stockholders as the numerator and thenumber of shares included in the denominator as follows (in thousands, except per share amounts): Years Ended December 31, 2008 2007 2006 Basic net (loss) income per share Net (loss) income applicable to common stockholders $(125,826) $16,285 $9,420 Weighted average common shares outstanding 29,954 30,060 31,102 Basic net (loss) income per share $(4.20) $0.54 $0.30 Diluted net (loss) income per share Net (loss) income applicable to common stockholders $(125,826) $16,285 $9,420 After-tax equivalent of interest on convertible notes – 2,905 – Diluted net (loss) income applicable to common stockholders $(125,826) $19,190 $9,420 Weighted average common shares outstanding 29,954 30,060 31,102 Dilutive stock options/shares – 207 189 Convertible notes equivalent shares – 6,549 – Diluted weighted average common shares outstanding 29,954 36,816 31,291 Diluted net (loss) income per share $(4.20) $0.52 $0.30 Average diluted shares outstanding in 2008 and 2006 exclude the antidilutive effects of the Company’s Senior Convertible Notes. For2008 and 2006, the after-tax equivalent of interest on the Senior Convertible Notes was $0.8 million and $3.0 million, respectively, andthe Senior Convertible Notes equivalent shares were 1.7 million and 6.6 million, respectively. Diluted shares outstanding for 2008 alsoexclude the antidilutive effects of potentially dilutive stock options and restricted stock totaling 0.1 million shares of common stock.53Table of ContentsThe computation of diluted earnings per share excludes options to purchase 1.5 million, 0.6 million and 0.4 million shares ofcommon stock in 2008, 2007 and 2006, respectively, because the impact of such options would have been antidilutive.8.OTHER LEASE ARRANGEMENTSThe Company leases office space, manufacturing, warehouse and service facilities and equipment under operating leases, themajority of which expire through 2010. Future minimum lease payments required under these lease commitments as of December 31,2008 are as follows (in thousands): Payments 2009 $1,594 2010 1,132 2011 431 2012 304 2013 269 Thereafter 75 $3,805 Total rental expense was $3.8 million, $4.5 million and $4.7 million for 2008, 2007 and 2006, respectively. As of December 31,2008 the total minimum rentals to be received in future periods under these lease commitments was approximately $1.0 million.9.DEBTa. BorrowingsTotal borrowings as of December 31, 2008 and 2007 were $85.1 million and $104.5 million, respectively. The total annualprincipal payments of the outstanding borrowings as of December 31, 2008 were $80.3 million, $0.3 million and $4.5 million for theyears ending 2009, 2010 and 2011, respectively. As described in Note 1, all outstanding borrowings under the Company’s RevolvingFacility are reflected as current at December 31, 2008.b. Bank FacilityOn March 6, 2007, the Company entered into the Revolving Facility with its lenders. The Revolving Facility replaced theCompany’s prior facility. As amended the Revolving Facility has a capacity of $200 million, subject to a borrowing base, with a maturitydate of March 6, 2012. While the Company was in compliance with its financial covenants under the Revolving Facility at December 31,2008, subsequent to year end, events of default have occurred under the Revolving Facility which permits the lenders to increase theinterest on the outstanding principal by 2%, to cause an acceleration of the maturity of borrowings, to restrict advances, and to terminatethe Revolving Facility. On April 1, 2009, the Company received written notice from the administrative agent for the Revolving Facilityasserting the existence of events of default under the Revolving Facility relating to the failure to deliver the required financial statements,failure to deliver notice of the change in name of a Company subsidiary, and requests for borrowings during the pendency of an event ofdefault. In accordance with the terms of the Revolving Facility, as of April 1, 2009, the agent has increased the interest on the outstandingprincipal under the Revolving Facility by 2% and implemented availability reserves that result in a reduction of our borrowing base underthe Revolving Facility by $25 million.In addition to the events of default for which the agent has already provided notice, on April 1, 2009, the Company incurred anevent of default related to the Company’s borrowing capacity and fixed charge coverage ratio. The Revolving Facility contains a financialcovenant that provides that when the Company’s available borrowing capacity drops below $30 million, the Company is subject to aminimum fixed charge coverage ratio of 1.1:1.0. As a result of draws on April 1, 2009, the Company’s available borrowing capacity isnow below $30 million and the Company does not meet the fixed charge coverage ratio requirements. Furthermore, because the report ofthe Company’s independent registered public accounting firm on these consolidated financial statements contains an explanatoryparagraph with respect to the Company’s ability to continue as a going concern, the Company has incurred an additional event of default.54Table of ContentsThe Revolving Facility provides that as a result of the events of default identified in the written notice of the administrative agent, aswell as the other events of defaults referenced above, the Company’s lenders could elect to declare all amounts outstanding under theRevolving Facility, together with accrued interest, to be immediately due and payable. While the administrative agent’s notice did notterminate the Revolving Facility or demand immediate repayment of any outstanding debt and the payment of accrued interest thereunder,it does reserve the rights of the lenders to do any of the foregoing or seek any other available remedies. There can be no assurance thatthese actions will not occur at any time as a result of the events of default referenced in the notice or the occurrence of other events ofdefault.The Company is in discussions with the lenders concerning the events of default and negotiation of a forbearance agreement toaddress the consequences of the defaults and to provide additional liquidity while it continues discussions to amend the RevolvingFacility and to waive any events of default. There can be no assurance that a forbearance agreement will be entered into or that anamendment or waiver will be obtained.The Revolving Facility provides the Company with an option to increase the credit facility by up to an additional $50 million duringthe term of the facility, subject to a borrowing base and so long as no event of default is continuing and we have a minimum fixed chargecoverage ratio of 1.1:1.0 for the 12 month period prior to such increase. The lenders under the Revolving Facility are under no obligationto provide any additional commitments and any increase in commitments will be subject to customary conditions precedent.All obligations under the Revolving Facility, and the guarantees of those obligations, are secured, subject to certain exceptions, bysubstantially all assets of the Company.The Revolving Facility includes certain covenants that restrict, among other things and subject to certain exceptions, the Company’sability and the ability of its subsidiaries to: •incur additional debt; •pay any distributions, including dividends on our common stock in excess of $20 million per year, so long as no event of defaultis continuing; •repurchase the Company’s common stock if, among other conditions, immediately after the repurchase the Company hasavailability of less than $40 million under the Revolving Facility; •consolidate, merge or transfer all or substantially all of the Company’s assets; •make certain investments, loans, mergers and acquisitions; •enter into material transactions with affiliates unless in the ordinary course, upon fair and reasonable terms and no less favorablethan would be obtained in a comparable arms-length transaction; •use proceeds from the Revolving Facility to make payment on certain indebtedness; •amend the terms of certain indebtedness; •sell, lease or dispose of certain assets; •amend our organizational documents in certain circumstances; •enter into operating leases with an aggregate rentals payable in excess of $10 million during any 12 consecutive months; •change in any material respect the nature of our business conducted as of March 6, 2007; and •create certain liens.Availability under the Revolving Facility has been impacted negatively in light of the current market demand for trailers. Asdiscussed above, the Revolving Facility provides that if the Company’s available borrowing capacity drops below $30 million, theCompany will be subject to a minimum fixed charge coverage ratio of 1.1:1.0, which would limit its ability to make capital expendituresand stock repurchases and further limit the amount of dividends it could pay. This ratio is based on a factor of earnings before interest,taxes, depreciation and amortization (EBITDA) adjusted for various items, included but not limited to the charges for impairment of fixedor intangible assets, expenses for stock-based compensation, income taxes, capital expenditures and distributions for55Table of Contentsany stock repurchases or dividends compared with the total of payments made for scheduled principal payments on outstandingindebtedness, including capital lease obligations, and interest expense. At December 31, 2008, the Company was in compliance with theRevolving Facility as availability was approximately $34.7 million. As of April 1, 2009, availability fell below $30 million, and theCompany did not meet the fixed charge coverage ratio requirements. As a result, the Company’s lenders could elect to declare all amountsoutstanding under the Revolving Facility, together with accrued interest, to be immediately due and payable. Based on these events, theCompany has classified its obligations outstanding under the Revolving Facility as current liabilities in the accompanying consolidatedbalance sheet as of December 31, 2008.The Revolving Facility also contains additional customary affirmative covenants and events of default, including among otherevents, certain cross defaults, business disruption, condemnation and change in ownership. In addition, a material adverse effect clause,which permits the lenders to subjectively determine when a material adverse change in our business or financial condition occurs, couldresult in an event of default and an early termination of the Revolving Facility.Borrowings under the Revolving Facility bear interest at a variable rate based on the London Interbank Offer Rate (LIBOR) or a baserate determined by the lender’s prime rate plus an applicable margin, as defined in the agreement. The applicable margin for borrowingsunder the Amendment ranges from 0.00% to 0.75% for base rate borrowings and 1.25% to 2.25% for LIBOR borrowings, subject toadjustment based on the average availability under the Revolving Facility. During the pendency of an event of default, the lenders mayand as previously mentioned have increased the interest on the outstanding principal by an additional 2%. The Company also pays acommitment fee on the unused portion of the facility at a rate of 0.25%. All interest and fees are paid monthly.As of December 31, 2008 and 2007, borrowing capacity available to the Company was $34.7 million and $164.1 million,respectively.For the quarter ended December 31, 2008, the weighted average interest rate was 4.9%.c. Capital LeaseOn July 24, 2008, the Company entered into a three-year lease for a manufacturing facility located in Cadiz, Kentucky. The leaseincludes a bargain purchase option. As of December 31, 2008, the present value of future minimum lease payments totaled $5.1 millionwith annual minimum payments of $0.6 million, $0.6 million and $4.6 million for the years ending 2009, 2010 and 2011, respectively,including interest of approximately $0.6 million.d. Senior Convertible NotesThe Company purchased and retired its remaining $104.5 million of Senior Convertible Notes by the date that they were due,August 1, 2008, eliminating 5.6 million shares that could have been converted upon maturity.10. STOCKHOLDERS’ EQUITYa. Common StockThe Company’s stock repurchase program (Repurchase Program), which allowed for the repurchase of common stock up to$50 million, expired September 15, 2008 with $25.8 million remaining available under the program.In 2008 and 2007, the Company declared dividends of $4.1 million and $5.5 million, respectively.b. Preferred StockThe Company has a series of 300,000 shares of Preferred Stock designated as Series D Junior Participating Preferred Stock, parvalue $.01 per share. As of December 31, 2008, the Company had no shares issued or outstanding.56Table of ContentsThe Board of Directors has the authority to issue up to 25 million shares of unclassified preferred stock and to fix dividends,voting and conversion rights, redemption provisions, liquidation preferences and other rights and restrictions.c. Stockholders’ Rights PlanThe Company has a Stockholders’ Rights Plan (the “Rights Plan”) that is designed to deter coercive or unfair takeover tactics in theevent of an unsolicited takeover attempt. It is not intended to prevent a takeover of the Company on terms that are favorable and fair to allstockholders and will not interfere with a merger approved by the Board of Directors. Each right entitles stockholders to buy one one-thousandth of a share of Series D Junior Participating Preferred Stock at an exercise price of $120. The rights will be exercisable only if aperson or a group acquires or announces a tender or exchange offer to acquire 20% or more of the Company’s common stock or if theCompany enters into other business combination transactions not approved by the Board of Directors. In the event the rights becomeexercisable, the Rights Plan allows for the Company’s stockholders to acquire stock of the Company or the surviving corporation,whether or not the Company is the surviving corporation having a value twice that of the exercise price of the rights. The rights will expireDecember 28, 2015 or are redeemable for $0.01 per right by the Company’s Board of Directors under certain circumstances.11. STOCK-BASED COMPENSATIONIn May 2007, the Company adopted the 2007 Omnibus Incentive Plan (Omnibus Plan). This plan provides for the issuance ofstock appreciation rights (SARs), restricted stock and the granting of common stock options to directors, officers and other eligibleemployees and makes available approximately 3.5 million shares for issuance, subject to adjustment for stock dividends,recapitalizations and the like. Stock options are awarded under the Omnibus Plan with an exercise price equal to the market price on thedate of grant and become exercisable three to five years after the date of grant. All options granted expire ten years after the date of grant.Restricted stock awards vest over a period of three to five years and may be based on achievement of specific corporate financialperformance metrics. These shares are valued at the market price on the grant date, are forfeitable in the event of terminated employmentprior to vesting and include the right to vote and receive dividends.In accordance with SFAS No. 123(R), Share-Based Payment, the Company recognizes all share-based payments, including thegrants of employee stock options, to employees based upon its fair value. The fair value of each option award is estimated on the date ofgrant using a binomial model. The expected volatility is based upon the Company’s historical experience. The expected term of optionsgranted represents the period of time that options granted are expected to be outstanding. The risk-free rates utilized for periods throughoutthe contractual life of the options are based on U.S. Treasury security yields at the time of grant.Principal weighted-average assumptions used in applying these models were as follows: Valuation Assumptions 2008 2007 2006 Risk-free interest rate 3.61% 4.86% 4.95% Expected volatility 53.4% 51.7% 49.7% Expected dividend yield 2.10% 1.27% 1.07% Expected term 6 yrs. 6 yrs. 6 yrs. 57Table of ContentsA summary of all stock option activity during 2008 is as follows: Weighted Weighted Average Aggregate Average Remaining Intrinsic Number of Exercise Contractual Value ($ in Options Price Life millions) Options Outstanding at December 31, 2007 1,676,514 $15.35 Granted 446,700 $8.58 Exercised (11,267) $9.40 $- Forfeited (96,603) $13.60 Expired (38,174) $17.99 Options Outstanding at December 31, 2008 1,977,170 $13.89 6.9 $- Options Exercisable at December 31, 2008 1,127,202 $15.57 5.5 $- The estimated fair value of the options granted in 2008, 2007 and 2006 were $3.98, $7.02 and $8.23 per option, respectively. Thetotal intrinsic value of stock options exercised during 2008, 2007 and 2006 was less than $0.1 million, $0.1 million and $0.7 million,respectively.A summary of all restricted stock activity during 2008 is as follows: Weighted Average Grant Date Fair Number of Shares Value Restricted Stock Outstanding at December 31, 2007 621,652 $17.92 Granted 448,900 $8.58 Vested (155,852) $17.64 Forfeited (86,455) $15.02 Restricted Stock Outstanding at December 31, 2008 828,245 $13.21 During 2008, 2007 and 2006, the Company granted 448,900, 250,900 and 272,890 shares of restricted stock with aggregate fairvalues on the grant date of $3.9 million, $3.6 million and $4.5 million, respectively. The total fair value of restricted stock that vestedduring 2008, 2007 and 2006 was $1.2 million, $0.6 million and $0.2 million, respectively.During 2008, 2007 and 2006 the Company’s total stock-based compensation expense was $5.0 million, $4.4 million and$4.0 million, respectively. The amount of after-tax compensation cost related to non-vested stock options and restricted stock not yetrecognized was $11.6 million at December 31, 2008, for which the weighted average remaining life was approximately 1.5 years.12. EMPLOYEE SAVINGS PLANSSubstantially all of the Company’s employees are eligible to participate in a defined contribution plan that qualifies as a safe harborplan under Section 401(k) of the Internal Revenue Code. The Company also provides a non-qualified defined contribution plan for seniormanagement and certain key employees. Both plans provide for the Company to match, in cash, a percentage of each employee’scontributions up to certain limits. As of September 1, 2008, the Company reduced the matching contribution for its 401(k) plan andsuspended all matching contributions to the non-qualified plan. The Company’s matching contribution and related expense for theseplans was approximately $3.2 million, $3.9 million and $3.7 million for 2008, 2007 and 2006, respectively.58Table of Contents13. INCOME TAXESa. Income Before Income TaxesThe consolidated (loss) income before income taxes for 2008, 2007 and 2006 consists of the following: 2008 2007 2006 Domestic $(108,437) $23,480 $32,441 Foreign (325) 1,208 (16,139)Total (loss) income before income taxes $(108,762) $24,688 $16,302 b. Income Tax ExpenseThe consolidated income tax expense for 2008, 2007 and 2006 consists of the following components (in thousands): 2008 2007 2006 Current U.S. Federal $13 $- $976 Foreign 14 13 - State (27) 333 (1,838)Deferred 17,064 8,057 7,744 Total consolidated expense $17,064 $8,403 $6,882 The Company’s following table provides a reconciliation of differences from the U.S. Federal statutory rate of 35% as follows (inthousands): 2008 2007 2006 Pretax book (loss) income $(108,762) $24,688 $16,302 Federal tax expense at 35% statutory rate (38,067) 8,641 5,706 State and local income taxes (4,650) 1,012 1,300 Reversal of tax valuation allowance and reserves - - (4,763)Provisions for (utilization of) valuation allowance for net operating losses — U.S. 48,272 124 (219)Foreign taxes 114 (424) - Effect of non-deductible impairment of goodwill 10,212 - 5,649 Benefit of liquidation of Canadian subsidiary, net of reserves (361) (831) - Other 1,544 (119) (791)Total income tax expense $17,064 $8,403 $6,882 c. Deferred TaxesThe Company’s deferred income taxes are primarily due to temporary differences between financial and income tax reporting for thedepreciation of property, plant and equipment, amortization of intangibles, compensation adjustments, other accrued liabilities and taxcredits and losses carried forward.Under SFAS No. 109, Accounting for Income Taxes, deferred tax assets are reduced by a valuation allowance when, in the opinionof management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. During 2008, theCompany recorded an additional $48.3 million valuation allowance. SFAS No. 109 requires companies to assess whether valuationallowances should be established against their deferred tax assets based on the consideration of all available evidence, both positive andnegative, using a “more59Table of Contentslikely than not” standard. In making such judgments, significant weight is given to evidence that can be objectively verified.The Company assesses, on a quarterly basis, the realizability of its deferred tax assets by evaluating all available evidence, bothpositive and negative, including: (1) the cumulative results of operations in recent years, (2) the nature of recent losses, (3) estimates offuture taxable income and (4) the length of operating loss carryforward periods. The operating results from the quarter endedDecember 31, 2008 resulted in a cumulative three-year loss. The cumulative three-year loss is considered significant negative evidencewhich is objective and verifiable. Additional negative evidence considered included the uncertainty regarding the magnitude and length ofthe current economic recession and the highly competitive nature of the transportation market. Positive evidence considered by theCompany in its assessment included lengthy operating loss carryforward periods, a lack of unused expired operating loss carryforwardsin Company’s history and estimates of future taxable income. However, there is uncertainty as to the Company’s ability to meet itsestimates of future taxable income in order to recover its deferred tax assets in the United States.After considering both the positive and negative evidence management determined that it was no longer more-likely-than-not that itwould realize the value of its deferred tax assets. As a result, the Company established a full valuation allowance against its deferred taxassets as of December 31, 2008. In 2007, the Company recorded approximately $9.4 million of reserves for unrecognized tax benefits. Infuture periods, the Company will continue to evaluate the deferred income tax asset valuation allowance and adjust the allowance whenmanagement has determined that it is more-likely than not, after considering both the positive and negative evidence, that the realizabilityof the related deferred tax assets, or a portion thereof, has changed as provided by the criteria set forth in SFAS. No. 109.The Company has a U.S. federal tax net operating loss carryforward of $93.1 million, which will expire beginning in 2022, ifunused, and which may be subject to other limitations under IRS rules. The Company has various, multistate income tax net operatingloss carryforwards which have been recorded as a deferred income tax asset of approximately $12.8 million, before valuation allowances.The Company has various U.S. federal income tax credit carryforwards, which will expire beginning in 2013, if unused.The components of deferred tax assets and deferred tax liabilities as of December 31, 2008 and 2007 were as follows (in thousands): 2008 2007 Deferred tax assets Tax credits and loss carryforwards $49,947 $38,085 Accrued liabilities 7,734 7,797 Incentive compensation 7,658 6,727 Other 5,915 3,916 71,254 56,525 Deferred tax liabilities Property, plant and equipment (3,579) (4,427)Intangibles (1,456) (17,055)Other (883) (1,308) (5,918) (22,790)Net deferred tax asset before valuation allowances and reserves 65,336 33,735 Valuation allowances (55,931) (7,044)FIN 48 reserves (9,405) (9,405)Net deferred tax asset $— $17,286 d. FIN 48 Tax ReservesOn January 1, 2007, the Company adopted FIN 48, Accounting for Uncertainty in Income Taxes. The Company has noadjustment to report in respect of the effect of adoption of FIN 48.60Table of ContentsThe Company’s policy with respect to interest and penalties associated with reserves or allowances for uncertain tax positions is toclassify such interest and penalties in income tax expense in the Statements of Operations. As of December 31, 2008, the total amount ofunrecognized income tax benefits computed under FIN 48 was approximately $10.1 million, all of which, if recognized, would impact theeffective income tax rate of the Company. As of December 31, 2008, the Company had recorded a total of $0.4 million of accrued interestand penalties related to uncertain tax positions. The Company foresees no significant changes to the facts and circumstances underlyingits reserves and allowances for uncertain income tax positions as reasonably possible during the next 12 months. As of December 31,2008, the Company is subject to unexpired statutes of limitation for U.S. federal income taxes for the years 2001-2008. The Company isalso subject to unexpired statutes of limitation for Indiana state income taxes for the years 2001-2008.A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): Balance at January 1, 2007 $721 Increases related to prior year tax positions 2 Decreases related to prior year tax positions (65)Increases related to current year tax positions 9,417 Balance at December 31, 2007 $10,075 Increases related to prior year tax positions 5 Decreases related to prior year tax positions — Increases related to current year tax positions — Balance at December 31, 2008 $10,080 14. COMMITMENTS AND CONTINGENCIESa. LitigationVarious lawsuits, claims and proceedings have been or may be instituted or asserted against the Company arising in the ordinarycourse of business, including those pertaining to product liability, labor and health related matters, successor liability, environmentalmatters and possible tax assessments. While the amounts claimed could be substantial, the ultimate liability cannot now be determinedbecause of the considerable uncertainties that exist. Therefore, it is possible that results of operations or liquidity in a particular periodcould be materially affected by certain contingencies. However, based on facts currently available, management believes that thedisposition 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. Costs associated with the litigation and settlement of legal matters are reported within General andAdministrative Expenses in the Consolidated Statements of Operations.Brazil Joint VentureIn March 2001, Bernard Krone Indústria e Comércio de Máquinas Agrícolas Ltda. (“BK”) filed suit against the Company in theFourth Civil Court of Curitiba in the State of Paraná, Brazil. Because of the bankruptcy of BK, this proceeding is now pending beforethe Second Civil Court of Bankruptcies and Creditors Reorganization of Curitiba, State of Paraná (No. 232/99).The case grows out of a joint venture agreement between BK and the Company related to marketing of RoadRailer trailers in Braziland other areas of South America. When BK was placed into the Brazilian equivalent of bankruptcy late in 2000, the joint venture wasdissolved. BK subsequently filed its lawsuit against the Company alleging that it was forced to terminate business with other companiesbecause of the exclusivity and non-compete clauses purportedly found in the joint venture agreement. BK asserts damages ofapproximately $8.4 million.The Company answered the complaint in May 2001, denying any wrongdoing. The Company believes that the claims asserted byBK are without merit and it intends to defend its position. A trial date originally scheduled for December 2008 was continued indefinitelyby the trial court. The Company believes that the resolution of this61Table of Contentslawsuit will not have a material adverse effect on its financial position, liquidity or future results of operations; however, at this stage ofthe proceeding no assurances can be given as to the ultimate outcome of the case.Intellectual PropertyIn October 2006, the Company filed a patent infringement suit against Vanguard National Corporation (“Vanguard”) regardingWabash National’s U.S. Patent Nos. 6,986,546 and 6,220,651 in the U.S. District Court for the Northern District of Indiana (CivilAction No. 4:06-cv-135). The Company amended the Complaint in April 2007. In May 2007, Vanguard filed its Answer to the AmendedComplaint, along with Counterclaims seeking findings of non-infringement, invalidity, and unenforceability of the subject patents. TheCompany filed a reply to Vanguard’s counterclaims in May 2007, denying any wrongdoing or merit to the allegations as set forth in thecounterclaims.The Company believes that the claims asserted by Vanguard are without merit and the Company intends to defend its position. TheCompany believes that the resolution of this lawsuit will not have a material adverse effect on its financial position, liquidity or futureresults of operations; however, at this stage of the proceeding, no assurance can be given as to the ultimate outcome of the case.Environmental DisputesIn September 2003, the Company was noticed as a potentially responsible party (PRP) by the U.S. Environmental Protection Agencypertaining to the Motorola 52nd Street, Phoenix, Arizona Superfund Site pursuant to the Comprehensive Environmental Response,Compensation and Liability Act. PRPs include current and former owners and operators of facilities at which hazardous substances wereallegedly disposed. EPA’s allegation that the Company was a PRP arises out of the operation of a former branch facility locatedapproximately five miles from the original site. The Company does not expect that these proceedings will have a material adverse effect onthe Company’s financial condition or results of operations.In January 2006, the Company received a letter from the North Carolina Department of Environment and Natural Resourcesindicating that a site that the Company formerly owned near Charlotte, North Carolina has been included on the state’s October 2005Inactive Hazardous Waste Sites Priority List. The letter states that the Company was being notified in fulfillment of the state’s “statutoryduty” to notify those who own and those who at present are known to be responsible for each Site on the Priority List. No action is beingrequested from the Company at this time. The Company does not expect that this designation will have a material adverse effect on itsfinancial condition or results of operations.b. Environmental Litigation Commitments and ContingenciesThe Company generates and handles certain material, wastes and emissions in the normal course of operations that are subject tovarious 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, theCompany estimates a lower and upper range for treatment and remediation efforts and recognizes a liability for such probable costs basedon the information available at the time. As of December 31, 2008, the Company had reserved estimated remediation costs of $0.4 millionfor activities at a former branch property.c. Letters of CreditAs of December 31, 2008, the Company had standby letters of credit totaling $7.3 million issued in connection with workerscompensation claims and surety bonds.d. Purchase CommitmentsThe Company has $29.4 million in purchase commitments through December 2009 for aluminum, which is within normalproduction requirements.62Table of Contents15. SEGMENTS AND RELATED INFORMATIONa. Segment ReportingUnder the provisions of SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information, the Companyhas two reportable segments: manufacturing and retail and distribution. The manufacturing segment produces and sells new trailers to theretail and distribution segment or to customers who purchase trailers direct or through independent dealers. The retail and distributionsegment includes the sale of new and used trailers, as well as the sale of after-market parts and service, through its retail branch network.The accounting policies of the segments are the same as those described in the summary of significant accounting policies except thatthe Company evaluates segment performance based on income from operations. The Company has not allocated certain corporate relatedcharges such as administrative costs, interest and income taxes from the manufacturing segment to the Company’s other reportablesegment. The Company accounts for intersegment sales and transfers at cost plus a specified mark-up. Reportable segment information isas follows (in thousands):63Table of Contents Retail and Combined Consolidated Manufacturing Distribution Segments Eliminations Total 2008 Net sales External customers $694,187 $142,026 $836,213 $- $836,213 Intersegment sales 50,712 32 50,744 (50,744) $- Total net sales $744,899 $142,058 $886,957 $(50,744) $836,213 Depreciation and amortization 20,356 1,111 21,467 - 21,467 Impairment of goodwill 66,317 - 66,317 - 66,317 Income (Loss) from operations (98,840) (5,991) (104,831) 1,054 (103,777)Reconciling items to net loss Interest income (236)Interest expense 4,657 Foreign exchange, net 156 Gain on debt extinguishment (151)Other income, net 559 Income tax expense 17,064 Net loss $(125,826)Capital expenditures $12,221 $392 $12,613 $- $12,613 Assets $442,614 $119,647 $562,261 $(230,287) $331,974 2007 Net sales External customers $952,814 $149,730 $1,102,544 $- $1,102,544 Intersegment sales 62,155 760 62,915 (62,915) $- Total net sales $1,014,969 $150,490 $1,165,459 $(62,915) $1,102,544 Depreciation and amortization 18,153 1,314 19,467 - 19,467 Income (Loss) from operations 30,568 (3,556) 27,012 (546) 26,466 Reconciling items to net income Interest income (433)Interest expense 5,755 Foreign exchange, net (3,818)Gain on debt extinguishment (546)Other income, net 820 Income tax expense 8,403 Net income $16,285 Capital expenditures $6,273 $441 $6,714 $- $6,714 Assets $591,433 $123,761 $715,194 $(231,612) $483,582 2006 Net sales External customers $1,120,717 $191,463 $1,312,180 $- $1,312,180 Intersegment sales 76,966 - 76,966 (76,966) $- Total net sales $1,197,683 $191,463 $1,389,146 $(76,966) $1,312,180 Depreciation and amortization 18,117 2,481 20,598 - 20,598 Impairment of goodwill - 15,373 15,373 - 15,373 Income (Loss) from operations 36,782 (13,487) 23,295 (402) 22,893 Reconciling items to net income Interest income (710)Interest expense 6,921 Foreign exchange, net 77 Other income, net 303 Income tax expense 6,882 Net income $9,420 Capital expenditures $12,569 $362 $12,931 $- $12,931 Assets $659,808 $128,123 $787,931 $(231,448) $556,483 b. Geographic InformationInternational sales, primarily to Canadian customers, accounted for less than 10% in each of the last three years.64Table of Contentsc. Product InformationThe Company offers products primarily in three general categories; new trailers, used trailers, and parts and service. Other salesinclude leasing and freight revenue. The following table sets forth the major product category sales and their percentage of consolidated netsales (dollars in thousands): 2008 2007 2006 New Trailers $741,011 88.6% $998,538 90.6% $1,184,167 90.2%Used Trailers 36,512 4.4 36,699 3.3 55,770 4.3 Parts and Service 53,093 6.3 56,907 5.2 54,712 4.2 Other 5,597 0.7 10,400 0.9 17,531 1.3 Total Sales $836,213 100.0% $1,102,544 100.0% $1,312,180 100.0%16. CONSOLIDATED QUARTERLY FINANCIAL DATA (UNAUDITED)The following is a summary of the unaudited quarterly results of operations for fiscal years 2008, 2007 and 2006 (dollars inthousands except per share amounts). First Second Third Fourth Quarter Quarter Quarter Quarter 2008 Net sales $161,061 $201,484 $242,953 $230,715 Gross profit 5,905 10,773 8,988 (4,742)Net loss(1)(2) (6,387) (3,203) (4,330) (111,906)Basic net loss per share(3) (0.21) (0.11) (0.14) (3.73)Diluted net loss per share(3) (0.21) (0.11) (0.14) (3.73)2007 Net sales $258,854 $294,849 $291,017 $257,824 Gross profit 20,185 27,832 24,593 19,111 Net income(4) 996 5,875 3,778 5,636 Basic net income per share(3) 0.03 0.19 0.13 0.19 Diluted net income per share(3) 0.03 0.18 0.12 0.18 2006 Net sales $262,119 $333,572 $362,290 $354,199 Gross profit 22,791 27,272 26,113 28,317 Net income (loss)(1)(2) 4,337 5,047 4,989 (4,953)Basic net income (loss) per share(3) 0.14 0.16 0.16 (0.16)Diluted net income (loss) per share(3) 0.13 0.15 0.15 (0.16) (1) The fourth quarter of 2008 and 2006 included $66.3 and $15.4 million, respectively, of expense related to the impairment of goodwill as discussed inNote 2. (2) The fourth quarter of 2008 included $23.1 million of expense related to establishing a full tax valuation allowance. The fourth quarter of 2006 included$4.8 million of income related to the reversal of tax valuation allowances and reserves. (3) Net income (loss) per share is computed independently for each of the quarters presented. Therefore, the sum of the quarterly net income (loss) pershare may differ from annual net income (loss) per share due to rounding. Diluted net income (loss) per share for all quarters of 2008 and the fourthquarter of 2006 excludes the antidilutive effects of convertible notes and stock options/shares, as applicable. (4) The fourth quarter of 2007 included $3.3 million in foreign exchange gains recognized upon disposition of the Company’s Canadian subsidiary asdiscussed in Note 2.ITEM 9—CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIALDISCLOSURENone65Table of ContentsITEM 9A — CONTROLS AND PROCEDURESDisclosure Controls and ProceduresWe maintain disclosure controls and procedures that are designed to provide reasonable assurance to our management and board ofdirectors that information required to be disclosed in the reports we file or submit under the Securities Exchange Act of 1934, as amended,is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rulesand forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer andChief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Based on an evaluation conducted underthe supervision and with the participation of the Company’s management, including our Chief Executive Officer and our Chief FinancialOfficer, of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2008, includingthose procedures described below, we, including our Chief Executive Officer and our Chief Financial Officer, determined that thosecontrols and procedures were effective.Changes in Internal ControlsThere were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under theExchange Act, during the fourth quarter of fiscal 2008 that have materially affected or are reasonably likely to materially affect ourinternal control over financial reporting.Report of Management on Internal Control over Financial ReportingThe management of Wabash National Corporation (the Company), is responsible for establishing and maintaining adequate internalcontrol over financial reporting. The Company’s internal control over financial reporting is a process designed to provide reasonableassurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith U.S. generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of theassets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financialstatements in accordance with U.S. generally accepted accounting principles; (3) provide reasonable assurance that receipts andexpenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and(4) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of theCompany’s assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because ofchanges in conditions, or that the degree of compliance with the policies and procedures may deteriorate.Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2008, basedon criteria for effective internal control over financial reporting described in Internal Control — Integrated Framework issued by theCommittee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, we have concluded thatinternal control over financial reporting is effective as of December 31, 2008.Ernst & Young LLP, an Independent Registered Public Accounting Firm, has audited the Company’s consolidated financialstatements as of and for the period ended December 31, 2008, which appears on the following page. Richard J. Giromini President and Chief Executive OfficerRobert J. Smith Senior Vice President and Chief Financial OfficerApril 9, 200966Table of ContentsReport of Independent Registered Public Accounting FirmThe Board of Directors and Shareholders of Wabash National CorporationWe have audited Wabash National Corporation’s internal control over financial reporting as of December 31, 2008, based on criteriaestablished in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the TreadwayCommission (the COSO criteria). Wabash National Corporation’s management is responsible for maintaining effective internal controlover financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in theaccompanying Report of Management on Internal Control over Financial Reporting. Our responsibility is to express an opinion on thecompany’s internal control over financial reporting based on our audit.We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control overfinancial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control overfinancial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. Webelieve that our audit provides a reasonable basis for our opinion.A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accountingprinciples. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenanceof records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordancewith generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financialstatements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because ofchanges in conditions, or that the degree of compliance with the policies or procedures may deteriorate.In our opinion, Wabash National Corporation maintained, in all material respects, effective internal control over financial reportingas of December 31, 2008, based on the COSO criteria.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), theconsolidated balance sheets of Wabash National Corporation as of December 31, 2008 and 2007, and the related consolidated statementsof operations, shareholder’s equity, and cash flows for each of the three years in the period ended December 31, 2008 of Wabash NationalCorporation and our report dated April 9, 2009 expressed an unqualified opinion thereon that included an explanatory paragraphregarding Wabash National Corporation’s ability to continue as a going concern.Ernst & Young LLPIndianapolis, IndianaApril 9, 200967Table of ContentsITEM 9B — OTHER INFORMATIONNone.PART IIIITEM 10 — EXECUTIVE OFFICERS OF THE REGISTRANTThe Company hereby incorporates by reference the information contained under the heading “Executive Officers of WabashNational Corporation” from Item 1 Part I of this Annual Report.The Company hereby incorporates by reference the information contained under the headings “Section 16(a) Beneficial OwnershipReporting Compliance” or “Election of Directors” from its definitive Proxy Statement to be delivered to stockholders of the Company inconnection with the 2009 Annual Meeting of Stockholders to be held May 14, 2009.As required by the New York Stock Exchange (NYSE) rules, in 2008, the CEO certified to the NYSE that he was not aware of anyviolation by the Corporation of NYSE corporate governance listing standards.Code of EthicsAs part of our system of corporate governance, our Board of Directors has adopted a Code of Business Conduct and Ethics (Codeof Ethics) that is specifically applicable to our Chief Executive Officer and Senior Financial Officers. This Code of Ethics is available onthe Investors page of the Company Info section of our website at www.wabashnational.com/about. We will disclose any waivers for ourChief Executive Officer or Senior Financial Officers under, or any amendments to, our Code of Ethics. We will provide a copy of ourCode of Ethics to any person without charge, upon request.ITEM 11 — EXECUTIVE COMPENSATIONThe Company hereby incorporates by reference the information contained under the headings “Executive Compensation” and“Director Compensation” from its definitive Proxy Statement to be delivered to the stockholders of the Company in connection with the2009 Annual Meeting of Stockholders to be held May 14, 2009.ITEM 12 — SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATEDSTOCKHOLDER MATTERSThe Company hereby incorporates by reference the information contained under the headings “Beneficial Ownership of CommonStock” and “Equity Compensation Plan Information” from its definitive Proxy Statement to be delivered to the stockholders of theCompany in connection with the 2009 Annual Meeting of Stockholders to be held on May 14, 2009.ITEM 13 — CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEThe Company hereby incorporates by reference the information contained under the headings “Election of Directors” and “RelatedParty Transactions” from its definitive Proxy Statement to be delivered to the stockholders of the Company in connection with the 2009Annual Meeting of Stockholders to be held on May 14, 2009.ITEM 14 — PRINCIPAL ACCOUNTING FEES AND SERVICESInformation required by Item 14 of this form and the audit committee’s pre-approval policies and procedures regarding theengagement of the principal accountant are incorporated herein by reference to the information contained under the heading “Ratificationand Appointment of Independent Registered Public Accounting Firm” from the Company’s definitive Proxy Statement to be delivered to thestockholders of the Company in connection with the 2009 Annual Meeting of Stockholders to be held on May 14, 2009.68Table of ContentsPART IVITEM 15 — EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) Financial Statements: The Company has included all required financial statements in Item 8 of this Form 10-K. Thefinancial statement schedules have been omitted as they are not applicable or the required information is included in the Notesto the consolidated financial statements.(b) Exhibits: The following exhibits are filed with this Form 10-K or incorporated herein by reference to the document set forthnext to the exhibit listed below:2.01 Stock Purchase Agreement by and among the Company, Transcraft Corporation and Transcraft Investment Partners, L.P.dated as of March 3, 2006(12)3.01 Certificate of Incorporation of the Company(1)3.02 Certificate of Designations of Series D Junior Participating Preferred Stock(10)3.03 Amended and Restated By-laws of the Company as amended(19)4.01 Specimen Stock Certificate(2)4.02 Rights Agreement between the Company and National City Bank as Rights Agent dated December 28, 2005(11)10.01#1992 Stock Option Plan(1)10.02#2000 Stock Option Plan(3)10.03#Executive Employment Agreement dated June 28, 2002 between the Company and Richard J. Giromini(4)10.04#Non-qualified Stock Option Agreement dated July 15, 2002 between the Company and Richard J. Giromini(4)10.05#Non-qualified Stock Option Agreement between the Company and William P. Greubel(4)10.06 Asset Purchase Agreement dated July 22, 2003(5)10.07 Amendment No. 1 to the Asset Purchase Agreement dated September 19, 2003(5)10.08#2004 Stock Incentive Plan(6)10.09#Form of Associate Stock Option Agreements under the 2004 Stock Incentive Plan(7)10.10#Form of Associate Restricted Stock Agreements under the 2004 Stock Incentive Plan(7)10.11#Form of Executive Stock Option Agreements under the 2004 Stock Incentive Plan(7)10.12#Form of Executive Restricted Stock Agreements under the 2004 Stock Incentive Plan(7)10.13#Restricted Stock Unit Agreement between the Company and William P. Greubel dated March 7, 2005(8)10.14#Stock Option Agreement between the Company and William P. Greubel dated March 7, 2005(8)10.15#Corporate Plan for Retirement — Executive Plan(9)10.16#Change in Control Policy(15)10.17#Executive Severance Policy(15)10.18#Form of Restricted Stock Unit Agreement under the 2004 Stock Incentive Plan(13)10.19#Form of Restricted Stock Agreement under the 2004 Stock Incentive Plan(13)10.20#Form of CEO and President Restricted Stock Agreement under the 2004 Stock Incentive Plan(13)10.21#Form of Stock Option Agreement under the 2004 Stock Incentive Plan(13)10.22#Form of CEO and President Stock Option Agreement under the 2004 Stock Incentive Plan(13)10.23#Executive Director Agreement dated January 1, 2007 between the Company and William P. Greubel(14)10.24#Amendment to Executive Employment Agreement dated January 1, 2007 between the Company and Richard J. Giromini(14)10.25#Form of Non-Qualified Stock Option Agreement under the 2007 Omnibus Incentive Plan(15)10.26#Form of Restricted Stock Agreement under the 2007 Omnibus Incentive Plan(15)10.27 Amendment No. 1 to Second Amendment and Restated Loan and Security Agreement dated March 6, 2007(16)10.28 Amendment No. 2 to Second Amendment and Restated Loan and Security Agreement dated March 6, 2007(17)10.29 Second Amended and Restated Loan and Security Agreement dated March 6, 2007(18)10.30#2007 Omnibus Incentive Plan, as amended(19)21.00 List of Significant Subsidiaries(20)23.01 Consent of Ernst & Young LLP(20)31.01 Certification of Principal Executive Officer(20)31.02 Certification of Principal Financial Officer(20)69Table of Contents 32.01 Written Statement of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Actof 2002 (18 U.S.C. Section 1350)(20) # Management contract or compensatory plan. (1) Incorporated by reference to the Registrant’s Registration Statement on Form S-1 (No. 33-42810) or the Registrant’s Registration Statement on Form 8-A filed December 6, 1995 (item 3.02 and 4.02) (2) Incorporated by reference to the Registrant’s registration statement Form S-3 (Registration No. 333-27317) filed on May 16, 1997 (3) Incorporated by reference to the Registrant’s Form 10-Q for the quarter ended March 31, 2001 (File No. 1-10883) (4) Incorporated by reference to the Registrant’s Form 10-Q for the quarter ended June 30, 2002 (File No. 1-10883) (5) Incorporated by reference to the Registrant’s Form 8-K filed on September 29, 2003 (File No. 1-10883) (6) Incorporated by reference to the Registrant’s Form 10-Q for the quarter ended June 30, 2004 (File No. 1-10883) (7) Incorporated by reference to the Registrant’s Form 10-Q for the quarter ended September 30, 2004 (File No. 1-10883) (8) Incorporated by reference to the Registrant’s Form 8-K filed on March 11, 2005 (File No. 1-10883) (9) Incorporated by reference to the Registrant’s Form 10-Q for the quarter ended March 31, 2005 (File No. 1-10883) (10) Incorporated by reference to the Registrant’s Form 8-K filed on December 28, 2005 (File No. 1-10883) (11) Incorporated by reference to the Registrant’s registration statement on Form 8-A12B filed on December 28, 2005 (File No. 1-10883) (12) Incorporated by reference to the Registrant’s Form 8-K filed on March 8, 2006 (File No. 1-10883) (13) Incorporated by reference to the Registrant’s Form 8-K filed on May 18, 2006 (File No. 1-10883) (14) Incorporated by reference to the Registrant’s Form 8-K filed on January 8, 2007 (File No. 1-10883) (15) Incorporated by reference to the Registrant’s Form 8-K filed on May 24, 2007 (File No. 1-10883) (16) Incorporated by reference to the Registrant’s Form 8-K on September 26, 2007 (File No. 1-10883) (17) Incorporated by reference to the Registrant’s Form 10-Q for the quarter ended March 31, 2008 (File No. 1-10883) (18) Incorporated by reference to the Registrant’s Form 10-K for the year ended December 31, 2006 (File No. 1-10883) (19) Incorporated by reference to the Registrant’s Form 10-K for the year ended December 31, 2007 (File No. 1-10883) (20) Filed herewith70Table of ContentsSIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report tobe signed on its behalf by the undersigned, thereunto duly authorized.WABASH NATIONAL CORPORATION April 14, 2009 By: /s/ Robert J. Smith Robert J. Smith Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalfof the registrant in the capacities and on the date indicated. Date Signature and Title April 14, 2009 By: /s/ Richard J. Giromini Richard J. Giromini President and Chief Executive Officer, Director (Principal Executive Officer) April 14, 2009 By: /s/ Robert J. Smith Robert J. Smith Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) April 14, 2009 By: /s/ Martin C. Jischke Dr. Martin C. Jischke Chairman of the Board of Directors April 14, 2009 By: /s/ James D. Kelly J.D. (Jim) Kelly Director April 14, 2009 By: /s/ Stephanie K. Kushner Stephanie K. Kushner Director April 14, 2009 By: /s/ Larry J. Magee Larry J. Magee Director April 14, 2009 By: /s/ Scott K. Sorensen Scott K. Sorensen Director April 14, 2009 By: /s/ Ronald L. Stewart Ronald L. Stewart Director71EXHIBIT 21.00SUBSIDIARIES OF THE COMPANY ANDOWNERSHIP OF SUBSIDIARY STOCK STATE/COUNTRY OF % OF SHARES OWNEDNAME OF SUBSIDIARY INCORPORATION BY THE CORPORATION* Wabash National Trailer Centers, Inc. Delaware 100% Wabash Wood Products, Inc. Arkansas 100% Wabash National, L.P. Delaware 100% Wabash National Manufacturing, L.P. Delaware 100% Wabash National Services, L.P. Delaware 100% Continental Transit Corporation Indiana 100% FTSI Canada, Ltd. Canada 100% Transcraft Corporation Delaware 100% * Includes both direct and indirect ownership by the parent, Wabash National Corporation72Exhibit 23.01Consent of Independent Registered Public Accounting FirmWe consent to the incorporation by reference in the following Registration Statements:(1) Registration Statement (Form S-3 No. 333-109375) of Wabash National Corporation (2) Registration Statement (Form S-8 No. 333-54714) pertaining to the 2000 Stock Option and Incentive Plan of Wabash National Corporation (3) Registration Statement (Form S-8 No. 333-29309) pertaining to the 1992 Stock Option Plan and Stock Bonus Plan of Wabash National Corporation (4) Registration Statement (Form S-8 No. 33-49256) pertaining to the 1992 Stock Option Plan of Wabash National Corporation (5) Registration Statement (Form S-8 No. 33-65698) pertaining to the 1993 Employee Stock Purchase Plan of Wabash National Corporation (6) Registration Statement (Form S-8 No. 33-90826) pertaining to the Directors and Executives Deferred Compensation Plan of Wabash National Corporation (7) Registration Statement (Form S-8 No. 333-115682) pertaining to the 2004 Stock Incentive Plan of Wabash National Corporation (8) Registration Statement (Forms S-8 No. 333-113157) pertaining to the Non-Qualified Stock Option Agreements for William P. Greubel, Richard J.Giromini and Timothy J. Monahan of Wabash National Corporationof our reports dated April 9, 2009, with respect to the consolidated financial statements of Wabash National Corporation and internal control over financialreporting of Wabash National Corporation, included in this Annual Report (Form 10-K) for the year ended December 31, 2008./s/ Ernst & Young LLPIndianapolis, IndianaApril 9, 200973Exhibit 31.01CERTIFICATIONSI, Richard J. Giromini, certify that:1. I have reviewed this report on Form 10-K of Wabash National Corporation;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in ExchangeAct Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrantand have:a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensurethat material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision,to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles;c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectivenessof the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscalquarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, theregistrant’s internal control over financial reporting; and5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likelyto adversely affect the registrant’s ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting.Date: April 14, 2009 /s/ Richard J. Giromini Richard J. Giromini President and Chief Executive Officer(Principal Executive Officer) 74Exhibit 31.02CERTIFICATIONSI, Robert J. Smith, certify that:1. I have reviewed this report on Form 10-K of Wabash National Corporation;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in ExchangeAct Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrantand have:a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensurethat material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,particularly during the period in which this report is being prepared;b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision,to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles;c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectivenessof the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscalquarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, theregistrant’s internal control over financial reporting; and5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likelyto adversely affect the registrant’s ability to record, process, summarize and report financial information; andb) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting.Date: April 14, 2009 /s/ Robert J. Smith Robert J. Smith Senior Vice President and Chief Financial Officer (PrincipalFinancial Officer) 75Exhibit 32.01Written Statement of Chief Executive Officer and Chief Financial OfficerPursuant to Section 906of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)The undersigned, the Chief Executive Officer and the Senior Vice President, Chief Financial Officer of Wabash National Corporation (the “Company”), eachhereby certifies that, to his knowledge, on April 14, 2009:(a) the Form 10K Annual Report of the Company for the year ended December 31, 2008 filed on April 14, 2009, with the Securities and ExchangeCommission (the “Report”) fully complies with the requirements of Section 13(a) of 15(d) of the Securities Exchange Act of 1934; and (b) information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Richard J. GirominiRichard J. Giromini President and Chief Executive Officer April 14, 2009 /s/ Robert J. Smith Robert J. Smith Senior Vice President and Chief Financial Officer April 14, 2009 76

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