UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C.  20549





FORM
10-Q





(Mark
One)


x
              QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
                THE
      SECURITIES EXCHANGE ACT OF 1934FOR
      THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2009
                OR ̈
              TRANSITION
      REPORT UNDER SECTION 13 OR 15 (d) OF
                THE
      SECURITIES EXCHANGE ACT OF 1934





For
the transition period from ____________ to ____________





Commission
File Number:  1-10883





WABASH NATIONAL
CORPORATION


( Exact
name of registrant as specified in its charter)





Delaware
                        (State
      of Incorporation)
                        
                        1000
      Sagamore Parkway South,
                        Lafayette, Indiana
                        (Address
      of Principal
                        Executive
      Offices)
                      
                      52-1375208
                        (IRS
      Employer
                        Identification
      Number)
                        
                        47905
                        (Zip
      Code)


Registrant’s telephone
number, including area code:  (765) 771-5300





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.


Yes x No  ̈





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding
12 months (or for such shorter period that the registrant was required to submit
and post such files).


Yes o    No  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.  See definitions of “large accelerated filer,” “accelerated
filer” and “smaller reporting company” in Rule 12b-2 of the Exchange
Act.


Large
      accelerated filero
                  
                  Accelerated
      filer  xNon-accelerated
      filer  o
                  (Do
      not check if a smaller reporting company)
                  Smaller
      reporting company   ̈





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).


Yes  ̈ No x





The
number of shares of common stock outstanding at October 30, 2009 was
31,201,125.





WABASH
NATIONAL CORPORATION





INDEX





FORM
10-Q





PagePART
      I – FINANCIAL INFORMATIONItem
      1.
                                      Financial
      StatementsCondensed
      Consolidated Balance Sheets at
                                        September
      30, 2009 and December 31, 2008
                                      
                                      3Condensed
      Consolidated Statements of Operations
                                        for
      the three and nine months ended September 30, 2009 and
      2008
                                      
                                      4Condensed
      Consolidated Statements of Cash Flows
                                        for
      the nine months ended September 30, 2009 and 2008
                                      
                                      5Notes
      to Condensed Consolidated Financial Statements
                                      
                                      6Item
      2.
                                      Management’s
      Discussion and Analysis of Financial Condition and
      Results of Operations
                                      
                                      18Item
      3.
                                      Quantitative
      and Qualitative Disclosures about Market Risks
                                      
                                      32Item
      4.
                                      Controls
      and Procedures
                                      
                                      33PART
      II – OTHER INFORMATIONItem
      1A.
                                      Risk
      Factors
                                      
                                      33Item
      6.
                                      Exhibits
                                      
                                      34Signature
                                      
                                      34


2


WABASH
NATIONAL CORPORATION


CONDENSED
CONSOLIDATED BALANCE SHEETS


(Dollars
in thousands)





September
      30,
                        
                        
                        December
      31,2009
                        
                        
                        2008(Unaudited)ASSETSCURRENT
      ASSETSCash
      and cash equivalents
                        
                        $
                        2,798
                        
                        
                        $
                        29,766Accounts
      receivable, net
                        
                        
                        22,854
                        
                        
                        
                        37,925Inventories
                        
                        
                        59,507
                        
                        
                        
                        92,896Prepaid
      expenses and other
                        
                        
                        3,222
                        
                        
                        
                        5,307Total
      current assets
                        
                        
                        88,381
                        
                        
                        
                        165,894PROPERTY,
      PLANT AND EQUIPMENT, net
                        
                        
                        112,333
                        
                        
                        
                        122,035INTANGIBLE
      ASSETS
                        
                        
                        26,730
                        
                        
                        
                        29,089OTHER
      ASSETS
                        
                        
                        13,053
                        
                        
                        
                        14,956$
                        240,497
                        
                        
                        $
                        331,974LIABILITIES AND STOCKHOLDERS'
      EQUITYCURRENT
      LIABILITIESCurrent
      portion of long-term debt
                        
                        $
                        -
                        
                        
                        $
                        80,008Current
      portion of capital lease obligation
                        
                        
                        337
                        
                        
                        
                        337Accounts
      payable
                        
                        
                        34,720
                        
                        
                        
                        42,798Other
      accrued liabilities
                        
                        
                        35,711
                        
                        
                        
                        45,449Warrant
                        
                        
                        67,208
                        
                        
                        
                        -Total
      current liabilities
                        
                        
                        137,976
                        
                        
                        
                        168,592LONG-TERM
      DEBT
                        
                        
                        30,069
                        
                        
                        
                        -CAPITAL
      LEASE OBLIGATION
                        
                        
                        4,553
                        
                        
                        
                        4,803OTHER
      NONCURRENT LIABILITIES AND CONTINGENCIES
                        
                        
                        4,115
                        
                        
                        
                        5,142PREFERRED
      STOCK, net of discount, 25,000,000 shares authorized, $0.01 par
      value,
                          35,000
      and 0 shares issued and outstanding, respectivelySeries
      E, 20,000 and 0 shares issued and outstanding
                        
                        
                        10,694
                        
                        
                        
                        -Series
      F, 5,000 and 0 shares issued and outstanding
                        
                        
                        2,773
                        
                        
                        
                        -Series
      G, 10,000 and 0 shares issued and outstanding
                        
                        
                        5,937
                        
                        
                        
                        -STOCKHOLDERS'
      EQUITYCommon
      stock 75,000,000 shares authorized, $0.01 par value, 30,331,970 and
      29,842,945 shares issued and outstanding, respectively
                        
                        
                        331
                        
                        
                        
                        324Additional
      paid-in capital
                        
                        
                        355,276
                        
                        
                        
                        352,137Retained
      deficit
                        
                        
                        (285,750
                        )
                        
                        
                        (172,031
                        )Accumulated
      other comprehensive income
                        
                        
                        -
                        
                        
                        
                        (1,516
                        )Treasury
      stock at cost, 1,675,600 common shares
                        
                        
                        (25,477
                        )
                        
                        
                        (25,477
                        )Total
      stockholders' equity
                        
                        
                        44,380
                        
                        
                        
                        153,437$
                        240,497
                        
                        
                        $
                        331,974





See Notes
to Condensed Consolidated Financial Statements


3


WABASH
NATIONAL CORPORATION


CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS


(Dollars
in thousands, except per share amounts)


(Unaudited)





Three
      Months
                    
                    
                    Nine
      MonthsEnded
      September 30,
                    
                    
                    Ended
      September 30,2009
                    
                    
                    2008
                    
                    
                    2009
                    
                    
                    2008NET
      SALES
                    
                    $
                    88,324
                    
                    
                    $
                    242,953
                    
                    
                    $
                    252,467
                    
                    
                    $
                    605,498COST
      OF SALES
                    
                    
                    88,645
                    
                    
                    
                    233,965
                    
                    
                    
                    273,495
                    
                    
                    
                    579,832Gross
      profit
                    
                    
                    (321
                    )
                    
                    
                    8,988
                    
                    
                    
                    (21,028
                    )
                    
                    
                    25,666GENERAL
      AND ADMINISTRATIVE EXPENSES
                    
                    
                    7,320
                    
                    
                    
                    10,060
                    
                    
                    
                    24,493
                    
                    
                    
                    32,016SELLING
      EXPENSES
                    
                    
                    2,566
                    
                    
                    
                    3,420
                    
                    
                    
                    8,669
                    
                    
                    
                    10,189Loss
      from operations
                    
                    
                    (10,207
                    )
                    
                    
                    (4,492
                    )
                    
                    
                    (54,190
                    )
                    
                    
                    (16,539
                    )OTHER
      INCOME (EXPENSE)Increase
      in fair value of warrant
                    
                    
                    (53,983
                    )
                    
                    
                    -
                    
                    
                    
                    (53,983
                    )
                    
                    
                    -Interest
      expense
                    
                    
                    (1,148
                    )
                    
                    
                    (1,154
                    )
                    
                    
                    (3,459
                    )
                    
                    
                    (3,349
                    )(Loss)
      Gain on debt extinguishment
                    
                    
                    (303
                    )
                    
                    
                    -
                    
                    
                    
                    (303
                    )
                    
                    
                    151Other,
      net
                    
                    
                    (818
                    )
                    
                    
                    28
                    
                    
                    
                    (729
                    )
                    
                    
                    (174
                    )Loss
      before income taxes
                    
                    
                    (66,459
                    )
                    
                    
                    (5,618
                    )
                    
                    
                    (112,664
                    )
                    
                    
                    (19,911
                    )INCOME
      TAX BENEFIT
                    
                    
                    (55
                    )
                    
                    
                    (1,288
                    )
                    
                    
                    (41
                    )
                    
                    
                    (5,991
                    )NET
      LOSS
                    
                    
                    (66,404
                    )
                    
                    
                    (4,330
                    )
                    
                    
                    (112,623
                    )
                    
                    
                    (13,920
                    )PREFERRED
      STOCK DIVIDENDS
                    
                    
                    1,096
                    
                    
                    
                    -
                    
                    
                    
                    1,096
                    
                    
                    
                    -NET
      LOSS APPLICABLE TO COMMON STOCKHOLDERS
                    
                    $
                    (67,500
                    )
                    
                    $
                    (4,330
                    )
                    
                    $
                    (113,719
                    )
                    
                    $
                    (13,920
                    )COMMON
      STOCK DIVIDENDS DECLARED
                    
                    $
                    -
                    
                    
                    $
                    0.045
                    
                    
                    $
                    -
                    
                    
                    $
                    0.135BASIC
      AND DILUTED NET LOSS PER SHARE
                    
                    $
                    (2.23
                    )
                    
                    $
                    (0.15
                    )
                    
                    $
                    (3.77
                    )
                    
                    $
                    (0.47
                    )COMPREHENSIVE
      LOSSNet
      loss
                    
                    $
                    (66,404
                    )
                    
                    $
                    (4,330
                    )
                    
                    $
                    (112,623
                    )
                    
                    $
                    (13,920
                    )Reclassification
      adjustment for interest rate swaps included in net
    loss
                    
                    
                    1,167
                    
                    
                    
                    -
                    
                    
                    
                    1,398
                    
                    
                    
                    -Changes
      in fair value of derivatives (net of tax)
                    
                    
                    -
                    
                    
                    
                    (140
                    )
                    
                    
                    118
                    
                    
                    
                    (140
                    )NET
      COMPREHENSIVE LOSS
                    
                    $
                    (65,237
                    )
                    
                    $
                    (4,470
                    )
                    
                    $
                    (111,107
                    )
                    
                    $
                    (14,060
                    )





See Notes
to Condensed Consolidated Financial Statements.


4


WABASH
NATIONAL CORPORATION


CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS


(Dollars
in thousands)


(Unaudited)





Nine
      Months Ended September 30,2009
                    
                    
                    2008CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      loss
                    
                    $
                    (112,623
                    )
                    
                    $
                    (13,920
                    )Adjustments
      to reconcile net loss to net cash (used in) provided by operating
      activitiesDepreciation
      and amortization
                    
                    
                    14,432
                    
                    
                    
                    15,535Net
      loss on the sale of assets
                    
                    
                    5
                    
                    
                    
                    236Loss
      (Gain) on debt extinguishment
                    
                    
                    303
                    
                    
                    
                    (151
                    )Increase
      in fair value of warrant
                    
                    
                    53,983
                    
                    
                    
                    -Deferred
      income taxes
                    
                    
                    -
                    
                    
                    
                    (5,849
                    )Excess
      tax benefits from stock-based compensation
                    
                    
                    -
                    
                    
                    
                    (6
                    )Stock-based
      compensation
                    
                    
                    2,906
                    
                    
                    
                    3,452Changes
      in operating assets and liabilitiesAccounts
      receivable
                    
                    
                    15,071
                    
                    
                    
                    (7,104
                    )Inventories
                    
                    
                    33,389
                    
                    
                    
                    (19,716
                    )Prepaid
      expenses and other
                    
                    
                    2,084
                    
                    
                    
                    2,028Accounts
      payable and accrued liabilities
                    
                    
                    (17,020
                    )
                    
                    
                    33,705Other,
      net
                    
                    
                    (76
                    )
                    
                    
                    85Net
      cash (used in) provided by operating activities
                    
                    
                    (7,546
                    )
                    
                    
                    8,295CASH
      FLOWS FROM INVESTING ACTIVITIESCapital
      expenditures
                    
                    
                    (669
                    )
                    
                    
                    (8,037
                    )Proceeds
      from the sale of property, plant and equipment
                    
                    
                    125
                    
                    
                    
                    131Net
      cash used in investing activities
                    
                    
                    (544
                    )
                    
                    
                    (7,906
                    )CASH
      FLOWS FROM FINANCING ACTIVITIESProceeds
      from exercise of stock options
                    
                    
                    -
                    
                    
                    
                    97Excess
      tax benefits from stock-based compensation
                    
                    
                    -
                    
                    
                    
                    6Borrowings
      under revolving credit facilities
                    
                    
                    179,018
                    
                    
                    
                    139,250Payments
      under revolving credit facilities
                    
                    
                    (228,957
                    )
                    
                    
                    (60,250
                    )Payments
      under long-term debt obligations
                    
                    
                    -
                    
                    
                    
                    (104,133
                    )Principal
      payments under capital lease obligations
                    
                    
                    (250
                    )
                    
                    
                    (107
                    )Proceeds
      from issuance of preferred stock and warrant
                    
                    
                    35,000
                    
                    
                    
                    -Debt
      issuance costs paid
                    
                    
                    (1,275
                    )
                    
                    
                    (4
                    )Preferred
      stock issuance costs paid
                    
                    
                    (2,414
                    )
                    
                    
                    -Common
      stock dividends paid
                    
                    
                    -
                    
                    
                    
                    (4,127
                    )Net
      cash used in financing activities
                    
                    
                    (18,878
                    )
                    
                    
                    (29,268
                    )NET
      DECREASE IN CASH AND CASH EQUIVALENTS
                    
                    
                    (26,968
                    )
                    
                    
                    (28,879
                    )CASH
      AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
                    
                    
                    29,766
                    
                    
                    
                    41,224CASH
      AND CASH EQUIVALENTS AT END OF PERIOD
                    
                    $
                    2,798
                    
                    
                    $
                    12,345





See Notes
to Condensed Consolidated Financial Statements


5


WABASH
NATIONAL CORPORATION


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)





1.
            GENERAL





The
condensed consolidated financial statements of Wabash National Corporation (the
“Company”) have been
prepared without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission.  Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
rules and regulations.  In the opinion of management, the accompanying
condensed consolidated financial statements contain all material adjustments
(consisting only of normal recurring adjustments) necessary to present fairly
the consolidated financial position of the Company, its results of operations
and cash flows. The condensed consolidated financial statements included herein
should be read in conjunction with the consolidated financial statements and the
notes thereto included in the Company’s 2008 Annual Report on Form
10-K/A.  Note 1 to the Company’s consolidated financial statements
included in the Company’s 2008 Annual Report on Form 10-K/A include a discussion
of factors that raise substantial doubt about the Company’s ability to continue
as a going concern.  The Company believes that the liquidity provided
by the $35 million investment in the Company by Trailer Investments, LLC, on
August 3, 2009, and the amendment and restatement of  the Company’s
existing revolving credit facility effective on August 3, 2009, will be adequate
to fund expected operating losses, working capital requirements and capital
expenditures in 2009 and 2010, which is expected to be a period of economic
uncertainty; therefore, the outstanding balances on the Company’s Revolving
Facility have been classified as long term.  Additionally, the
warrant, which is classified as a current liability, contains a put option for
cash in the event of a specific default.  If cash settlement of the
warrant is required, it would have a material adverse impact on the Company’s
liquidity.  See Notes 4 and 5 herein for further discussions
related to these agreements.





2.
            NEW
      ACCOUNTING PRONOUNCEMENTS





In June
2009, the Financial Accounting Standards Board (the “FASB”) issued a Statement
on Accounting Standards Codification.  The Statement establishes the
Codification as the single official source of authoritative United States
accounting and reporting standards for all non-governmental entities (other than
guidance issued by the Securities Exchange Commission (the
“SEC”)).  The Codification changes the referencing and organization on
financial standards and is effective for interim and annual periods ending on or
after September 15, 2009.  The Company began applying the Codification
to its disclosures in the third quarter of 2009.  As Codification is
not intended to change the existing accounting guidance, its adoption has not
had an impact on the Company’s financial position, results of operations or cash
flows.





In May
2009, the FASB issued a Statement on Subsequent Events.  The Statement
establishes a general standard of accounting for and disclosures of events that
occur after the balance sheet date but before financial statements are issued or
are available to be issued.  Specifically, the Statement sets forth
the period after the balance sheet date during which management should evaluate
events or transactions that may occur for potential recognition or disclosure in
the financial statements, the circumstances under which an entity should
recognize events or transactions occurring after the balance sheet date in its
financial statements, and the disclosures that an entity should make about
events or transactions that occurred after the balance sheet date.  In
addition, the Company shall disclose the date through which subsequent events
have been evaluated and whether that date is the date the financial statements
were issued or the date the financial statements were available to be
issued.  The requirements of the Statement were effective for interim
and annual financial periods ending after June 15, 2009.  The Company
evaluated its September 30, 2009 consolidated financial statements for
subsequent events through the time of filing on November 4, 2009, which is the
date that the Company’s consolidated financial statements were filed with the
SEC.  See Note 14 for further discussion in regards to subsequent
event activities.


6


In March
2008, the FASB issued a Statement on Derivative Instruments and Hedging
Activities.  The Statement requires enhanced disclosures for
derivative and hedging activities, including information that would enable
financial statement users to understand how and why a company uses derivative
instruments, how derivative instruments and related hedged items are accounted
for and how derivative instruments and related hedged items affect an entity’s
financial position, financial performance and cash flows.  This
Statement was effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008, and was adopted by the
Company in the first quarter of 2009.  As the Statement only requires
enhanced disclosures, it has not had a material impact on the Company’s
financial position, results of operations or cash flows.  See Note 6
for further discussion of derivative instruments and hedging
activities.





In
September 2006, the FASB issued a Statement on Fair Value
Measurements.  The Statement provides guidance for using fair value to
measure assets and liabilities and only applies when other standards require or
permit the fair value measurement of assets and liabilities.  It does
not expand the use of fair value measurement.  In February 2008, the
FASB announced that it was deferring the effective date to fiscal years
beginning after November 15, 2008 for certain non-financial assets and
non-financial liabilities, except those that are recognized or disclosed at fair
value in the financial statements on a recurring basis.  For these
financial and non-financial assets and liabilities that are remeasured at least
annually, this statement was effective for fiscal years beginning after November
15, 2007.  Derivative instruments and hedging activities are carried
at fair value.  The adoption of this Statement has not had a material
impact on the Company’s financial position, results of operations or cash
flows.  See Note 7 for further discussion of fair value
measurements.





In
June 2008, the FASB issued a Statement on Determining Whether Instruments
Granted in Share-Based Payment Transactions are Participating
Securities.  The Statement identifies that unvested share-based
payment awards that contain non-forfeitable rights to dividends or dividend
equivalents (whether paid or unpaid) are participating securities and shall be
included in the computation of earnings per share pursuant to the two-class
method.  This Statement is effective for financial statements issued
for fiscal years beginning after December 15, 2008, and interim periods within
those years.  All prior period earnings per share data presented shall
be adjusted retrospectively to conform to the provisions of this
Statement.  While the Company’s computations of earnings per share
have been retrospectively restated, the adoption of this Statement did not have
a material impact on the Company’s results of operations, financial position or
earnings per share for any period presented.


7


3.
            INVENTORIES





Inventories
are stated at lower of cost, determined on the first-in, first-out (FIFO)
method, or market.  The cost of manufactured inventory includes raw
material, labor and overhead.  Inventories consisted of the following
(in thousands):





September
      30,
                    
                    
                    December
      31,2009
                    
                    
                    2008Raw
      materials and components
                    
                    $
                    20,600
                    
                    
                    $
                    23,758Work
      in progress
                    
                    
                    3,176
                    
                    
                    
                    373Finished
      goods
                    
                    
                    25,830
                    
                    
                    
                    48,997Aftermarket
      parts
                    
                    
                    4,432
                    
                    
                    
                    6,333Used
      trailers
                    
                    
                    5,469
                    
                    
                    
                    13,435$
                    59,507
                    
                    
                    $
                    92,896





4.
            DEBT





In March 2007, the Company entered into
a loan and security agreement (the “Revolving Facility”) with its
lenders.  As amended, the Revolving Facility had a capacity of $200
million, subject to a borrowing base, with a maturity date of March 6,
2012.  On April 1, 2009, events of default occurred under the
Revolving Facility, which permitted the lenders to increase the interest on the
outstanding principal by 2%, to cause an acceleration of the maturity of
borrowings, to restrict advances, and to terminate the Revolving
Facility.  The events of default under the Revolving Facility
included: the Company’s failure to deliver audited financial statements for
fiscal year 2008 by March 31, 2009; that the report of the Company’s independent
registered public accounting firm accompanying the Company’s audited financial
statements for fiscal year 2008 included an explanatory paragraph with respect
to the Company’s ability to continue as a going concern; the Company’s failure
to deliver prompt written notification of name changes of subsidiaries; the
Company’s failure to have a minimum fixed charge coverage ratio of 1.1:1.0 when
the available borrowing capacity under the Revolving Facility is below
$30 million; and, the Company requesting loans under the Revolving Facility
during the existence of a default or event of default under the Revolving
Facility.  In accordance with the terms of the Revolving Facility, on
April 1, 2009, the agent increased the interest on the outstanding principal
under the Revolving Facility by 2% and implemented availability reserves that
result in a reduction of the Company’s borrowing base under the Revolving
Facility by $25 million.





On April 28, 2009, the Company entered
into a Forbearance Agreement with the lenders under the Revolving
Facility.  Pursuant to the Forbearance Agreement, the lenders agreed
to refrain from accelerating maturity of the Revolving Facility due to specified
existing or anticipated events of default, as described above, through the
earlier of May 29, 2009 or the occurrence or existence of any event of default
other than the existing or anticipated events of default.





On
May 28, 2009, the Company entered into a First Amendment to Forbearance
Agreement and Fourth Amendment to Second Amended and Restated Loan and Security
Agreement (Amendment) with the lenders under the Revolving
Facility.  Pursuant to the Amendment, the lenders agreed to continue
to refrain from accelerating maturity of the Revolving Facility due to specified
existing or anticipated events of default, as described above, through the
earlier of July 31, 2009 or the occurrence or existence of any event of
default other than the existing or anticipated events of default.  In
addition to the extension of the forbearance period, the Amendment reduced the
availability reserve to $17.5 million through July 31, 2009 and
decreased the borrowing availability of eligible accounts receivable from 90% to
85%.





Pursuant
to the terms of the Amendment, (i) the parties agreed to increase the
applicable margin interest rate on the base rate portion of the revolving credit
loans from 2.25% to 2.75% and on the LIBOR rate portion of the revolving credit
loans from 3.75% to 4.25%, (ii) the Company agreed to provide the
administrative agent under the Revolving Facility, by the third business day of
each calendar week from and after May 28, 2009, a report setting forth a
13-week cash flow forecast for the Company as well as a comparison of the actual
and projected cash flow statements for the immediately preceding calendar week,
and (iii) on or before June 15, 2009, the Company agreed to deliver to
the administrative agent a written report, in form and substance satisfactory to
the administrative agent, updating the lenders on the status of its evaluation
of strategic business alternatives.


8


On July 17, 2009, the Company entered
into the Third Amended and Restated Loan and Security Agreement with its
lenders, effective August 3, 2009 (the "Amended Facility"), with a maturity date
of August 3, 2012.  The Amended Facility has a capacity of $100
million, subject to a borrowing base, a $12.5 million reserve and other
discretionary reserves.  The lenders waived certain events of default
that had occurred under the previous credit facility and waived the right to
receive default interest during the time the events of default had
continued.  The interest rate on borrowings under the Amended Facility
from the date of effectiveness through July 31, 2010 is LIBOR plus 4.25% or
the prime rate of Bank of America, N.A. (the “Prime Rate”) plus 2.75%. After
July 31, 2010, the interest rate is based upon average unused availability
and will range between LIBOR plus 3.75% to 4.25% and the Prime Rate plus 2.25%
to 2.75%. The Company is required to pay a monthly unused line fee equal to
0.375% times the average daily unused availability along with other customary
fees and expenses of the agent and the lenders.





5.
            ISSUANCE
      OF PREFERRED STOCK AND WARRANT





On July 17, 2009, the Company entered
into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with
Trailer Investments, LLC (“Trailer Investments”) pursuant to which Trailer
Investments purchased 20,000 shares of Series E redeemable preferred stock
(“Series E Preferred”), 5,000 shares of Series F redeemable preferred stock
(“Series F Preferred”), and 10,000 shares of Series G redeemable preferred stock
(“Series G Preferred”, and together with the Series E Preferred and the Series F
Preferred, the “Preferred Stock”) for an aggregate purchase price of $35.0
million.  Trailer Investments also received a warrant that is
exercisable at $0.01 per share for 24,762,636 newly issued shares of the
Company’s common stock representing, on August 3, 2009, the date the warrant was
delivered, 44.21% of the Company’s issued and outstanding common stock after
giving effect to the issuance of the shares underlying the warrant, subject to
upward adjustment to  maintain that percentage if currently
outstanding options are exercised. The number of shares of common stock subject
to the warrant is also subject to upward adjustment to an amount equivalent to
49.99% of the issued and outstanding common stock of the Company outstanding
immediately after the closing after giving effect to the issuance of the shares
underlying the warrant in specified circumstances where the Company loses its
ability to utilize its net operating loss carryforwards, including as a result
of a stockholder of the Company acquiring greater than 5% of the outstanding
common stock of the Company.  Of the aggregate amount of $35.0 million
received, approximately $13.2 million was attributed to the warrant and $21.8
million was attributed to the preferred stock based on the estimated fair values
of these instruments as of the agreement date.  The difference between
the initial value and the liquidation value of the Preferred Stock, including
issuance costs of approximately $2.5 million, will be accreted as preferred
stock dividends over a period of five years using the effective interest
method.





The Series E Preferred, Series F
Preferred and Series G Preferred pay an annual dividend rate of 15%, 16% and
18%, respectively.  The dividend on each series of Preferred Stock is
payable quarterly and subject to increase by 0.5% every quarter if the
applicable series of Preferred Stock is still outstanding after August 3,
2014.  During the first two years following the issuance of the
Preferred Stock, the Company may elect to accrue these dividends
unpaid.  The Preferred Stock also provides the holders with certain
rights including an increase in the dividend rate upon the occurrence of any
event of noncompliance.





The Company may at any time after one
year from the date of issuance redeem all or any portion of the Preferred Stock
at a liquidation value of $1,000 per share plus any accrued and unpaid dividends
plus a premium adjustment ranging between 15% and 20% if redemption occurs
before August 3, 2014.  The premium for early redemption would be
applied to the sum of the liquidation value and any accrued and unpaid
dividends.


9




Upon occurrence of a change of control
of the Company (as defined in the Certificates of Designation for the Preferred
Stock, including if more than 50% of the voting power is transferred or acquired
by any person other than Trailer Investments and its affiliates unless Trailer
Investments or its affiliates acquire the Company), the Preferred Stock becomes
immediately redeemable at the election of the holder at a premium of 200% of the
sum of the liquidation price plus all accrued and unpaid dividends for the
Series E Preferred and Series F Preferred and a premium of 225% for the Series G
Preferred.  The change of control provisions for the Preferred Stock
are subject to a look-back provision, whereby if the shares of Preferred Stock
are redeemed pursuant to the voluntary redemption provisions within 12 months
prior to the occurrence of a change of control, the Company would still have to
pay the additional amount to the holders of the Preferred Stock that was
redeemed so that such holders would receive the aggregate payments equal to the
change of control redemption amounts.





The
warrant contains several conditions, including, among other things, an upward
adjustment of shares upon the occurrence of certain contingent events and an
option by the holder to settle the warrant for cash in event of a specific
default.  These provisions result in the classification of the warrant
as a liability that is adjusted to fair value at each balance sheet
date.





The warrant liability was recorded
initially at fair value with subsequent changes in fair value reflected in
earnings.  Estimating fair value of the warrant requires the
development of significant and subjective estimates that may, and are likely to,
change over the duration of the warrant with related changes in internal and
external market factors.  In addition, option-based techniques are
highly volatile and sensitive to changes in the trading market price of the
Company’s common stock, which has a high historical volatility.  Since
the warrant is initially and subsequently carried at fair value, the Company’s
Statements of Operations will reflect the volatility in these estimate and
assumption changes.  The fair value of the warrant was estimated using
a binomial valuation model.





6.
            DERIVATIVE
      INSTRUMENTS AND HEDGING ACTIVITIES





As
discussed in Note 2, the Company adopted the provisions of a Statement issued by
the FASB on Derivative Instruments and Hedging Activities during the first
quarter of 2009.  The Statement requires enhanced disclosures for
derivative instruments and hedging activities.





During
2008, the Company entered into two-year interest rate swap agreements (Swaps)
whereby the Company pays a fixed interest rate and receives a variable interest
rate.  The Company had designated these Swaps as cash flow hedges in
an effort to reduce its exposure to fluctuations in interest rates by converting
a portion of its variable rate borrowings to a fixed rate for a specific period
of time.  The effective portion of the change in the fair value of a
derivative designated as a cash flow hedge is recorded in accumulated other
comprehensive income (loss) (OCI) and is recognized in the statement of
operations when the hedged item affects net income.  If and when a
derivative is determined not to be highly effective as a hedge, or the
underlying hedged transaction is no longer likely to occur, or the derivative is
terminated, hedge accounting is discontinued.  Any past or future changes
in the derivative’s fair value, which will not be effective as an offset to the
income effects of the item being hedged, are recognized currently in the income
statement.


10


In April
2009, the Company and its counterparty mutually agreed to terminate the existing
Swaps and settle based on the fair value of the Swap contracts of approximately
$1.4 million.  These contracts were originally set to mature through
October 2010.  The total amounts paid or payable under the terms of
these contracts have been charged to interest or other expense and totaled $1.6
million in the first nine months of 2009.  As of September 30, 2009,
there was no amount of loss remaining in OCI as the forecasted transaction is
considered no longer probable. The cash flows from these contracts were recorded
as operating activities in the consolidated statement of cash
flows.





7.
            FAIR
      VALUE MEASUREMENTS




As discussed in Note 2, in
September 2006, the FASB issued a Statement on Fair Value Measurements,
which addresses aspects of expanding the application of fair value accounting.
The Company adopted the provisions of this Statement as of the beginning of the
2008 fiscal year as it relates to recurring financial assets and liabilities. As
of the beginning of the 2009 fiscal year, the Company adopted the provisions of
this Statement as it relates to nonrecurring fair value measurement requirements
for nonfinancial assets and liabilities.





This FASB
statement establishes a three-level valuation hierarchy for fair value
measurements.  These valuation techniques are based upon the
transparency of inputs (observable and unobservable) to the valuation of an
asset or liability as of the measurement date.  Observable inputs
reflect market data obtained from independent sources, while unobservable inputs
reflect the Company’s market assumptions.  These two types of inputs
create the following fair value hierarchy:





·
            Level
      1 — Valuation is based on quoted prices for identical assets or
      liabilities in active markets;





·
            Level
      2 — Valuation is based on quoted prices for similar assets or liabilities
      in active markets, or other inputs that are observable for the asset or
      liability, either directly or indirectly, for the full term of the
      financial instrument; and





·
            Level
      3 — Valuation is based upon other unobservable inputs that are significant
      to the fair value measurement.





The
following table sets forth by level within the fair value hierarchy the
Company’s financial assets and liabilities that were accounted for at fair value
on a recurring basis (in thousands):





September 30, 2009
                      
                      
                      December 31, 2008Level 1
                      
                      
                      Level 2
                      
                      
                      Level 3
                      
                      
                      Total
                      
                      
                      Level 1
                      
                      
                      Level 2
                      
                      
                      Level 3
                      
                      
                      TotalLiabilitiesWarrant
                      
                      $
                      -
                      
                      
                      $
                      67,208
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -Interest
      rate derivatives
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      1,516
                      
                      
                      
                      1,516Total
                      
                      $
                      -
                      
                      
                      $
                      67,208
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      1,516
                      
                      
                      $
                      1,516





Financial instruments classified as
Level 3 in the fair value hierarchy represent derivative contracts in which
management has used at least one significant unobservable input in the valuation
model.  The following table presents a reconciliation of activity for
such derivative contracts on a net basis (in thousands):


11





Nine Months EndedSeptember 30, 2009Balance
      at beginning of period
                      
                      $
                      (1,516
                      )Total
      unrealized gains included in othercomprehensive
      income
                      
                      
                      118Purchases,
      sales, issuances, and settlements
                      
                      
                      1,398Transfers
      in and (or) out of Level 3
                      
                      
                      -Balance
      at end of period
                      
                      $
                      -





The
carrying amounts of cash and cash equivalents, accounts receivable and accounts
payable reported in the Condensed Consolidated Balance Sheets approximate fair
value.





The fair
value of total borrowings is estimated based on current quoted market prices for
similar issues or debt with the same maturities.  The interest rates
on the Company’s bank borrowings under its Revolving Facility are adjusted
regularly to reflect current market rates and thus carrying value approximates
fair value.





8.
            STOCK-BASED
      COMPENSATION





The
Company recognizes all share-based payments to employees, including grants of
employee stock options, in the financial statements based upon their fair
value.  The Company uses a binomial valuation model, which
incorporates various assumptions including volatility, expected life, dividend
yield and risk-free interest rates, to value new stock option awards it
grants.  The expected life and volatility assumptions are based on the
Company’s historical experience as well as the terms and conditions of stock
option awards granted to employees.





The
Company’s policy is to recognize expense for awards subject to graded vesting
using the straight-line attribution method.  The amount of
compensation costs related to nonvested stock options and restricted stock not
yet recognized was $9.6 million at September 30, 2009, for which the expense
will be recognized through 2012.





9.
            CONTINGENCIES





Various
lawsuits, claims and proceedings have been or may be instituted or asserted
against the Company arising in the ordinary course of business, including those
pertaining to product liability, labor and health related matters, successor
liability, environmental matters and possible tax assessments.  While
the amounts claimed could be substantial, the ultimate liability cannot now be
determined because of the considerable uncertainties that
exist.  Therefore, it is possible that results of operations or
liquidity in a particular period could be materially affected by certain
contingencies.  However, based on facts currently available,
management believes that the disposition of matters that are currently pending
or asserted will not have a material adverse effect on the Company's financial
position, liquidity or results of operations.  Costs associated with
the litigation and settlement of legal matters are reported within General and Administrative
Expenses in the Consolidated Statements of Operations.





Brazil
Joint Venture





In March
2001, Bernard Krone Indústria e Comércio de Máquinas Agrícolas Ltda. ("BK")
filed suit against the Company in the Fourth Civil Court of Curitiba in the
State of Paraná, Brazil.  Because of the bankruptcy of BK, this
proceeding is now pending before the Second Civil Court of Bankruptcies and
Creditors Reorganization of Curitiba, State of Paraná (No.
232/99).


12





The case
grows out of a joint venture agreement between BK and the Company related to
marketing of RoadRailerâ
trailers in Brazil and other areas of South America.  When BK was
placed into the Brazilian equivalent of bankruptcy late in 2000, the joint
venture was dissolved.  BK subsequently filed its lawsuit against the
Company alleging that it was forced to terminate business with other companies
because of the exclusivity and non-compete clauses purportedly found in the
joint venture agreement.  BK asserts damages of approximately $8.4
million.





The
Company answered the complaint in May 2001, denying any
wrongdoing.  The Company believes that the claims asserted by BK are
without merit and it intends to defend its position.  A trial date
originally scheduled for December 2008 was continued indefinitely by the trial
court.  The Company believes that the resolution of this lawsuit will
not have a material adverse effect on its financial position, liquidity or
future results of operations; however, at this stage of the proceeding no
assurances can be given as to the ultimate outcome of the case.





Intellectual
Property





In October 2006, the Company filed a
patent infringement suit against Vanguard National Corporation (“Vanguard”)
regarding Wabash 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 (Civil Action No.
4:06-cv-135).  The Company amended the Complaint in April
2007.  In May 2007, Vanguard filed its Answer to the Amended
Complaint, along with Counterclaims seeking findings of non-infringement,
invalidity, and unenforceability of the subject patents.  The Company
filed a reply to Vanguard’s counterclaims in May 2007, denying any wrongdoing or
merit to the allegations as set forth in the counterclaims.  The case
has currently been stayed by agreement of the parties while the U.S. Patent and
Trademark Office undertakes a reexamination of U.S. Patent Nos.
6,986,546.  It is unknown when the stay will be lifted.





The
Company believes that the claims asserted by Vanguard are without merit and the
Company intends to defend its position.  The Company believes that the
resolution of this lawsuit and the reexamination proceedings will not have a
material adverse effect on its financial position, liquidity or future results
of operations; however, at this stage of the proceeding, no assurance can be
given as to the ultimate outcome of the case.





Environmental
Disputes





In
September 2003, the Company was noticed as a potentially responsible party (PRP)
by the U.S. Environmental Protection Agency pertaining 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 were
allegedly disposed.  EPA’s allegation that the Company was a PRP
arises out of the operation of a former branch facility located approximately
five miles from the original site.  The Company does not expect that
these proceedings will have a material adverse effect on the 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 Resources indicating that a site that the Company
formerly owned near Charlotte, North Carolina has been included on the state's
October 2005 Inactive Hazardous Waste Sites Priority List.  The letter
states that the Company was being notified in fulfillment of the state's
“statutory duty” 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 being
requested from the Company at this time.  The Company does not expect
that this designation will have a material adverse effect on its financial
condition or results of operations.


13


10.
            NET LOSS PER
      SHARE





Per share
results have been computed based on the average number of common shares
outstanding. The computation of basic and diluted net loss per share is
determined using net loss applicable to common stockholders as the numerator and
the number of shares included in the denominator as follows (in thousands,
except per share amounts):





Three Months Ended
                      September 30,
                    
                    
                    Nine Months Ended
                      September 30,2009
                    
                    
                    2008
                    
                    
                    2009
                    
                    
                    2008Net
      loss applicable to common stockholders
                    
                    $
                    (67,500
                    )
                    
                    $
                    (4,330
                    )
                    
                    $
                    (113,719
                    )
                    
                    $
                    (13,920
                    )Dividends
      paid on unvested restricted shares
                    
                    
                    -
                    
                    
                    
                    (34
                    )
                    
                    
                    -
                    
                    
                    
                    (100
                    )Net
      loss applicable to common stockholders excluding amountsapplicable
      to unvested restricted shares, basic and diluted
                    
                    $
                    (67,500
                    )
                    
                    $
                    (4,364
                    )
                    
                    $
                    (113,719
                    )
                    
                    $
                    (14,020
                    )Basic
      and diluted weighted average common sharesoutstanding
                    
                    
                    30,331
                    
                    
                    
                    29,993
                    
                    
                    
                    30,196
                    
                    
                    
                    29,933Basic
      and diluted net loss per share
                    
                    $
                    (2.23
                    )
                    
                    $
                    (0.15
                    )
                    
                    $
                    (3.77
                    )
                    
                    $
                    (0.47
                    )





The
computation of diluted net loss per share for the three and nine month periods
ending September 30, 2008 excludes the after-tax equivalent of interest on the
Company’s Senior Convertible Notes (Convertible Notes) of $0.1 million and $0.8
million, respectively.  Average diluted shares outstanding for the
three and nine month periods ending September 30, 2009 and 2008 also exclude the
antidilutive effects of the following potential common shares (in
thousands):





Three Months Ended
                    September 30,
                  
                  
                  Nine Months Ended
                    September 30,2009
                  
                  
                  2008
                  
                  
                  2009
                  
                  
                  2008Convertible
      Notes equivalent shares
                  
                  
                  -
                  
                  
                  
                  472
                  
                  
                  
                  -
                  
                  
                  
                  2,281Stock
      options and restricted stock
                  
                  
                  -
                  
                  
                  
                  125
                  
                  
                  
                  11
                  
                  
                  
                  107Redeemable
      warrants
                  
                  
                  20,333
                  
                  
                  
                  -
                  
                  
                  
                  6,852
                  
                  
                  
                  -Options
      to purchase common shares
                  
                  
                  2,143
                  
                  
                  
                  1,502
                  
                  
                  
                  2,164
                  
                  
                  
                  1,618




11.
            INCOME
      TAXES





The Company has experienced cumulative
operating losses over the most recent three year period.  After
considering these operating losses and other available evidence, both positive
and negative, management determined that it was necessary to record a full
valuation allowance against its deferred tax assets created during the quarter
and year to date periods ended September 30, 2009.  As a result, the
effective income tax benefit for the first nine months of 2009 was less than
$0.1 million.





The following table provides
reconciliation of differences from the U.S. federal statutory rate of 35% (in
thousands):


14





Nine Months Ended September 30,2009
                      
                      
                      2008Pretax
      book loss
                      
                      $
                      (112,664
                      )
                      
                      $
                      (19,911
                      )Federal
      tax expense at 35% statutory rate
                      
                      
                      (39,432
                      )
                      
                      
                      (6,969
                      )State
      and local income taxes
                      
                      
                      (5,621
                      )
                      
                      
                      (724
                      )Provision
      for valuation allowance for net operatinglosses
      - U.S. and state
                      
                      
                      22,873
                      
                      
                      
                      786Foreign
      Taxes
                      
                      
                      -
                      
                      
                      
                      94Benefit
      of liquidation of Canadian subsidiary, netof
      reserves
                      
                      
                      -
                      
                      
                      
                      (361
                      )Effect
      of non-deductible adjustment to FMV of warrants
                      
                      
                      21,593
                      
                      
                      
                      -Effect
      of non-deductible stock-based compensation
                      
                      
                      755
                      
                      
                      
                      269Other
                      
                      
                      (209
                      )
                      
                      
                      914Total
      income tax expense (benefit)
                      
                      $
                      (41
                      )
                      
                      $
                      (5,991
                      )




As of
September 30, 2009, the Company had approximately $152 million of remaining U.S.
federal income tax net operating loss carryforwards (“NOLs”), which will expire
in 2022 if unused.  The Company’s NOLs, including any future NOLs that
may arise, are subject to limitations on use under the Internal Revenue Service
rules, including Section 382 of the Internal Revenue Code of 1986, as
revised.  Section 382 limits the ability of a company to utilize NOLs
in the event of an ownership change.  The Company would undergo an
ownership change if, among other things, the stockholders, or group of
stockholders, who own or have owned, directly or indirectly, 5% or more of the
value of the Company’s stock or are otherwise treated as 5% stockholders under
Section 382 and the regulations promulgated thereunder increase their
aggregate percentage ownership of the Company’s stock by more than 50 percentage
points over the lowest percentage of its stock owned by these stockholders at
any time during the testing period, which is generally the three-year period
preceding the potential ownership change.




In the
event of an ownership change, Section 382 imposes an annual limitation on
the amount of post-ownership change taxable income a corporation may offset with
pre-ownership change NOLs and certain recognized built-in losses. The limitation
imposed by Section 382 for any post-change year would be determined by
multiplying the value of our stock immediately before the ownership change
(subject to certain adjustments) by the applicable long-term tax-exempt rate in
effect at the time of the ownership change. Any unused annual limitation may be
carried over to later years, and the limitation may under certain circumstances
be increased by built-in gains that may be present in assets held by us at the
time of the ownership change that are recognized in the five-year period after
the ownership change.  It is expected that any loss of the Company’s
NOLs would cause its effective tax rate to go up significantly when we return to
profitability.




Accordingly,
the Company undertook a study to ensure that the change in ownership related to
the issuance of the warrant did not result in a Section 382 limitation during
the third quarter of 2009 and believes that such a limitation was not
triggered.  However, there can be no assurance that a subsequent
change in ownership, as defined by the Section 382 guidelines, may trigger this
limitation.


15


12.
            PRODUCT
      WARRANTIES





The following table presents the
changes in the product warranty accrual included in Other Accrued Liabilities (in
thousands):





2009
                  
                  
                  2008Balance
      as of January 1
                  
                  $
                  17,027
                  
                  
                  $
                  17,246Provision
      for warranties issued in current year
                  
                  
                  861
                  
                  
                  
                  2,250Additional
      provisions for pre-existing warranties
                  
                  
                  82
                  
                  
                  
                  635Payments
                  
                  
                  (1,979
                  )
                  
                  
                  (3,320
                  )Balance
      as of September 30
                  
                  $
                  15,991
                  
                  
                  $
                  16,811




The
Company offers a limited warranty for its products.  With respect to
Company products manufactured prior to 2005, the limited warranty coverage
period is five years.  Beginning in 2005, the coverage period for
DuraPlate® trailer
panels was extended to ten years, with all other products remaining at five
years.  The Company passes component manufacturers’ warranties on to
its customers.  The Company’s policy is to accrue the estimated cost
of warranty coverage at the time of the sale.




13.
            SEGMENTS




a.  Segment
Reporting





The
Company has two reportable segments: manufacturing and retail and
distribution.  The manufacturing segment produces and sells new
trailers to the retail and distribution segment or to customers who purchase
trailers directly from the Company or through independent
dealers.  The retail and distribution segment includes the sale of new
and used trailers, as well as the sale of after-market parts and service,
through its retail branch network.





Reportable
segment information is as follows (in thousands):


16





Retail and
                  
                  
                  
                  
                  
                  ConsolidatedManufacturing
                  
                  
                  Distribution
                  
                  
                  Eliminations
                  
                  
                  TotalsThree
      Months Ended September 30, 2009Net
      salesExternal
      customers
                  
                  $
                  71,914
                  
                  
                  $
                  16,410
                  
                  
                  $
                  -
                  
                  
                  $
                  88,324Intersegment
      sales
                  
                  
                  3,457
                  
                  
                  
                  -
                  
                  
                  
                  (3,457
                  )
                  
                  $
                  -Total
      net sales
                  
                  $
                  75,371
                  
                  
                  $
                  16,410
                  
                  
                  $
                  (3,457
                  )
                  
                  $
                  88,324(Loss)
      Income from operations
                  
                  $
                  (8,284
                  )
                  
                  $
                  (1,961
                  )
                  
                  $
                  38
                  
                  
                  $
                  (10,207
                  )Assets
                  
                  $
                  370,935
                  
                  
                  $
                  99,714
                  
                  
                  $
                  (230,152
                  )
                  
                  $
                  240,497Three
      Months Ended September 30, 2008Net
      salesExternal
      customers
                  
                  $
                  199,838
                  
                  
                  $
                  43,115
                  
                  
                  $
                  -
                  
                  
                  $
                  242,953Intersegment
      sales
                  
                  
                  17,819
                  
                  
                  
                  -
                  
                  
                  
                  (17,819
                  )
                  
                  $
                  -Total
      net sales
                  
                  $
                  217,657
                  
                  
                  $
                  43,115
                  
                  
                  $
                  (17,819
                  )
                  
                  $
                  242,953(Loss)
      Income from operations
                  
                  $
                  (3,221
                  )
                  
                  $
                  (1,381
                  )
                  
                  $
                  110
                  
                  
                  $
                  (4,492
                  )Assets
                  
                  $
                  582,014
                  
                  
                  $
                  131,377
                  
                  
                  $
                  (230,500
                  )
                  
                  $
                  482,891Nine
      Months Ended September 30, 2009Net
      salesExternal
      customers
                  
                  $
                  197,175
                  
                  
                  $
                  55,292
                  
                  
                  $
                  -
                  
                  
                  $
                  252,467Intersegment
      sales
                  
                  
                  9,721
                  
                  
                  
                  -
                  
                  
                  
                  (9,721
                  )
                  
                  $
                  -Total
      net sales
                  
                  $
                  206,896
                  
                  
                  $
                  55,292
                  
                  
                  $
                  (9,721
                  )
                  
                  $
                  252,467(Loss)
      Income from operations
                  
                  $
                  (48,113
                  )
                  
                  $
                  (6,250
                  )
                  
                  $
                  173
                  
                  
                  $
                  (54,190
                  )Assets
                  
                  $
                  370,935
                  
                  
                  $
                  99,714
                  
                  
                  $
                  (230,152
                  )
                  
                  $
                  240,497Nine
      Months Ended September 30, 2008Net
      salesExternal
      customers
                  
                  $
                  493,201
                  
                  
                  $
                  112,297
                  
                  
                  $
                  -
                  
                  
                  $
                  605,498Intersegment
      sales
                  
                  
                  42,837
                  
                  
                  
                  32
                  
                  
                  
                  (42,869
                  )
                  
                  $
                  -Total
      net sales
                  
                  $
                  536,038
                  
                  
                  $
                  112,329
                  
                  
                  $
                  (42,869
                  )
                  
                  $
                  605,498(Loss)
      Income from operations
                  
                  $
                  (14,613
                  )
                  
                  $
                  (2,767
                  )
                  
                  $
                  841
                  
                  
                  $
                  (16,539
                  )Assets
                  
                  $
                  582,014
                  
                  
                  $
                  131,377
                  
                  
                  $
                  (230,500
                  )
                  
                  $
                  482,891





b.  Product
Information





The
Company offers products primarily in three general categories: new trailers,
used trailers and parts, service and other.  The following table sets
forth the major product categories and their percentage of consolidated net
sales (dollars in thousands):





Three Months Ended September 30,
                  
                  
                  Nine Months Ended September 30,2009
                  
                  
                  2008
                  
                  
                  2009
                  
                  
                  2008$
                  
                  
                  %
                  
                  
                  $
                  
                  
                  %
                  
                  
                  $
                  
                  
                  %
                  
                  
                  $
                  
                  
                  %New
      trailers
                  
                  
                  72,802
                  
                  
                  
                  82.4
                  
                  
                  
                  215,978
                  
                  
                  
                  88.9
                  
                  
                  
                  201,777
                  
                  
                  
                  79.9
                  
                  
                  
                  530,213
                  
                  
                  
                  87.6Used
      trailers
                  
                  
                  4,097
                  
                  
                  
                  4.6
                  
                  
                  
                  11,097
                  
                  
                  
                  4.6
                  
                  
                  
                  15,530
                  
                  
                  
                  6.2
                  
                  
                  
                  29,560
                  
                  
                  
                  4.9Parts,
      service and other
                  
                  
                  11,425
                  
                  
                  
                  13.0
                  
                  
                  
                  15,878
                  
                  
                  
                  6.5
                  
                  
                  
                  35,160
                  
                  
                  
                  13.9
                  
                  
                  
                  45,725
                  
                  
                  
                  7.5Total
      net sales
                  
                  
                  88,324
                  
                  
                  
                  100.0
                  
                  
                  
                  242,953
                  
                  
                  
                  100.0
                  
                  
                  
                  252,467
                  
                  
                  
                  100.0
                  
                  
                  
                  605,498
                  
                  
                  
                  100.0




17


14.
            SUBSEQUENT
      EVENT





In
accordance with the Statement issued by the FASB on Subsequent Events, the
Company's management has evaluated subsequent events through the time of filing
on November 4, 2009, which is the date that the Company's condensed consolidated
financial statements were filed with the SEC.





On
November 3, 2009, the Company announced the sale of its Anna, Illinois
production facility.  The Company also announced that it will
consolidate the production of all Transcraft®product
lines to its production facility located in Cadiz, Kentucky, a facility
currently used to produce the Company’s aluminum platform and dump trailer
product lines.  The sale of the Anna facility will complete the
consolidation process of the Company’s platform business.  This
consolidation initiative is intended to optimize the production
process and assist in further reducing the Company’s overhead cost
structure.  Production at the Anna facility is expected
to cease during the first half of 2010 at which time the new production
lines at the Cadiz facility are expected to be fully
operational.





ITEM
      2.
            MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS





CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS





This
Quarterly Report of Wabash National Corporation (the “Company”, “Wabash” or
“we”) contains “forward-looking statements” within the meaning of
Section 27A of the Securities Act and Section 21E of 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 “forward-looking
statements” 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, including for working capital and capital
      expenditures;





•
            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;




18




•
              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 differ materially from those projected or
assumed in our forward-looking statements. Our future financial condition and
results of operations, as well as any forward-looking statements, are subject to
change and are subject to inherent risks and uncertainties, such as those
disclosed in this Quarterly Report.  Important risks and factors that
could cause our actual results to be materially different from our expectations
include the factors that are disclosed in “Item 1A. Risk Factors” in our Form
10-K/A for the year ended December 31, 2008 and elsewhere herein, including, but
not limited to, Item 1A of Part II hereof. Each forward-looking statement
contained in this Quarterly Report reflects our management’s view only as of the
date on which that forward-looking statement was made. We are not obligated to
update forward-looking statements or publicly release the result of any
revisions to them to reflect events or circumstances after the date of this
Quarterly Report or to reflect the occurrence of unanticipated
events.
 
 RESULTS
OF OPERATIONS
 
 The
following table sets forth certain operating data as a percentage of net sales
for the periods indicated:
 
 Percentage of Net SalesThree Months Ended
                            September 30,
                          
                          
                          Nine Months Ended
                            September30,2009
                          
                          
                          2008
                          
                          
                          2009
                          
                          
                          2008Net
      sales
                          
                          
                          100.0
                          %
                          
                          
                          100.0
                          %
                          
                          
                          100.0
                          %
                          
                          
                          100.0
                          %Cost
      of sales
                          
                          
                          100.4
                          
                          
                          
                          96.3
                          
                          
                          
                          108.3
                          
                          
                          
                          95.8Gross
      profit
                          
                          
                          (0.4
                          )
                          
                          
                          3.7
                          
                          
                          
                          (8.3
                          )
                          
                          
                          4.2General
      and administrative expenses
                          
                          
                          8.3
                          
                          
                          
                          4.1
                          
                          
                          
                          9.7
                          
                          
                          
                          5.3Selling
      expenses
                          
                          
                          2.9
                          
                          
                          
                          1.4
                          
                          
                          
                          3.5
                          
                          
                          
                          1.6Loss
      from operations
                          
                          
                          (11.6
                          )
                          
                          
                          (1.8
                          )
                          
                          
                          (21.5
                          )
                          
                          
                          (2.7
                          )Increase
      in fair value of warrant
                          
                          
                          (61.1
                          )
                          
                          
                          -
                          
                          
                          
                          (21.4
                          )
                          
                          
                          -Interest
      expense
                          
                          
                          (1.3
                          )
                          
                          
                          (0.5
                          )
                          
                          
                          (1.4
                          )
                          
                          
                          (0.6
                          )Other,
      net
                          
                          
                          (1.2
                          )
                          
                          
                          -
                          
                          
                          
                          (0.3
                          )
                          
                          
                          -Loss
      before income taxes
                          
                          
                          (75.2
                          )
                          
                          
                          (2.3
                          )
                          
                          
                          (44.6
                          )
                          
                          
                          (3.3
                          )Income
      tax benefit
                          
                          
                          -
                          
                          
                          
                          (0.5
                          )
                          
                          
                          -
                          
                          
                          
                          (1.0
                          )Net
      loss
                          
                          
                          (75.2
                          )
      %
                          
                          
                          (1.8
                          )
      %
                          
                          
                          (44.6
                          )
      %
                          
                          
                          (2.3
                          )
      %
 
 19


In the
three and nine month periods ended September 30, 2009, we recorded net sales of
$88.3 million and $252.5 million, respectively, compared to $243.0 million and
$605.5 million in the prior year periods as sales of new trailer units declined
62.9% and 60.4% for the three and nine month periods ending September 30, 2009,
respectively, as compared to the prior year periods.  We continue to
be affected by, and concerned with, the global economy, especially the credit
markets, as well as the decline in the housing and construction-related markets
in the U.S.  Gross profit margin was negative 0.4% in the third
quarter of 2009 compared to 3.7% in the third quarter of 2008.  Gross
profit margin versus the prior year period was negatively impacted by a 62.9%
reduction in new trailer volumes.  Third quarter 2009 gross profit
margin of negative 0.4% represents an improvement of 5.7% in gross profit margin
in the three month period ended September 30, 2009 as compared to the three
month period ended June 30, 2009, which was primarily a result of a 12.5%
increase in new trailer volumes as well as our continued cost reduction
initiatives, including the full quarter’s impact of reductions to hourly and
salaried headcount as well as wage and base salary
reductions.  Operating income was positively impacted in the third
quarter by a decrease in general and administrative and selling expenses
compared to the 2008 period due to a reduction in headcount and salaries,
employee related expenses and other various controllable cost
reductions.  These expense reductions are primarily a result of our
cost cutting initiatives and efforts to adjust our cost structure to match the
current market demand.  Included in other income and expense is a
$54.0 million non-cash charge relating to the fair value adjustment of our
warrant issued to Trailer Investments, LLC (“Trailer Investments”) as a part of
the Securities Purchase Agreement entered into on July 17, 2009.





Our
management team continues to be focused on rightsizing our operations to match
the current demand environment, implementing our cost savings initiatives,
strengthening our capital structure, developing innovative products, improving
earnings and selective product introductions that meet the needs of our
customers.





As a
recognized industry leader, we continue to focus on product innovation, lean
manufacturing, strategic sourcing and workforce rationalization in order to
strengthen our industry position and improve operating results.





Three Months Ended September
30, 2009





Net
Sales





Net sales in the third quarter of 2009
decreased $154.7 million, or 63.7%, compared to the third quarter of
2008.  By business segment, net external sales and related units sold
were as follows (dollars in millions):





Three
      Months Ended September 30,2009
                  
                  
                  2008
                  
                  
                  %
      ChangeSales
      by segmentManufacturing
                  
                  $
                  71.9
                  
                  
                  $
                  199.9
                  
                  
                  
                  (64.0
                  )Retail
      and distribution
                  
                  
                  16.4
                  
                  
                  
                  43.1
                  
                  
                  
                  (61.9
                  )Total
                  
                  $
                  88.3
                  
                  
                  $
                  243.0
                  
                  
                  
                  (63.7
                  )(units)New
      trailer unitsManufacturing
                  
                  
                  3,500
                  
                  
                  
                  8,800
                  
                  
                  
                  (60.2
                  )Retail
      and distribution
                  
                  
                  100
                  
                  
                  
                  900
                  
                  
                  
                  (88.9
                  )Total
                  
                  
                  3,600
                  
                  
                  
                  9,700
                  
                  
                  
                  (62.9
                  )Used
      trailer units
                  
                  
                  800
                  
                  
                  
                  2,200
                  
                  
                  
                  (63.6
                  )





Manufacturing
segment sales were $71.9 million in the third quarter of 2009, down $128.0
million, or 64.0%, compared to the third quarter of 2008.  The
reduction in sales is due primarily to the continued weak market demand as new
trailer sales volume decreased approximately 5,300 units, or
60.2%.  Average selling prices declined slightly in the third quarter
of 2009 as compared to the prior year period due to customer and product
mix.


20





Retail
and distribution segment sales were $16.4 million in the third quarter of 2009,
down $26.7 million, or 61.9% compared to the prior year third quarter. Weak
market demand across all product lines yielded reduced volumes as compared to
the previous year period. New trailer sales decreased $18.9 million, or 82.6%,
due to an 88.9% reduction in volumes. Used trailer sales were down $7.0 million,
or 63.1%, primarily due to a 63.6% reduction in volumes. Parts and service sales
were down $0.8 million, or 8.6%.





Cost
of Sales





Cost of sales for the third quarter of
2009 was $88.6 million, a decrease of $145.3 million, or 62.1% compared to the
third quarter of 2008. As a percentage of net sales, cost of sales was 100.4% in
the third quarter of 2009 compared to 96.3% in the third quarter of
2008.





Manufacturing
segment cost of sales, as detailed in the following table, was $72.3 million for
the third quarter of 2009, a decrease of $120.2 million, or 62.4%, compared to
the 2008 period.  As a percentage of net sales, cost of sales was
100.6% in the third quarter of 2009 compared to 96.3% in the 2008
period.





Three
      Months Ended September 30,Manufacturing
      Segment
                      
                      2009
                      
                      
                      2008(dollars
      in millions)%
      of Net
                        Sales
                      
                      
                      
                      
                      
                      %
      of Net
                        SalesMaterial
      Costs
                      
                      $
                      52.7
                      
                      
                      
                      73.3
                      %
                      
                      $
                      148.2
                      
                      
                      
                      74.1
                      %Other
      Manufacturing Costs
                      
                      
                      19.6
                      
                      
                      
                      27.3
                      %
                      
                      
                      44.3
                      
                      
                      
                      22.2
                      %$
                      72.3
                      
                      
                      
                      100.6
                      %
                      
                      $
                      192.5
                      
                      
                      
                      96.3
                      %





As shown
in the table above, cost of sales is composed of material costs, a variable
expense, and other manufacturing costs, comprised of both fixed and variable
expenses, including direct and indirect labor, outbound freight, and overhead
expenses.  Material costs were 73.3% of net sales compared to 74.1% in
the 2008 period.  The 0.8% decrease results from decreases in raw
material commodity and component costs, primarily steel and
aluminum.  In addition, our other manufacturing costs increased from
22.2% of net sales in the third quarter of 2008 to 27.3% in the 2009
period.  The 5.1% increase is primarily the result of the inability to
reduce fixed costs in proportion to the 60.2% decrease in new trailer
volumes.





Retail
and distribution segment cost of sales was $16.4 million in the second quarter
of 2009, a decrease of $25.2 million, or 60.6%, compared to the 2008
period.  As a percentage of net sales, cost of sales was 100.0% in the
second quarter of 2009 compared to 96.5% in the 2008 period.  The 3.5%
increase was primarily the result of an 11.5% increase as a percent of net sales
in direct and indirect labor and overhead expenses due to the inability to
reduce these costs in proportion to the 88.9% and 63.6% reductions in new and
used trailer volumes, respectively.  This increase in cost of sales as
a percentage of net sales compared to the prior year period was further
magnified by valuation reserves required due to the depressed market conditions
for both new and used trailers.


21


Gross
Profit





Gross
profit was negative $0.3 million in the third quarter of 2009, down $9.3 million
from the prior year period. Gross profit as a percent of sales was negative 0.4%
for the quarter compared to 3.7% for the same period in 2008.  Gross
profit by segment was as follows (in millions):





Three
      Months Ended
                    September30,2009
                  
                  
                  2008Gross
      profit by segmentManufacturing
                  
                  $
                  (0.4
                  )
                  
                  $
                  7.4Retail
      and distribution
                  
                  
                  -
                  
                  
                  
                  1.5Eliminations
                  
                  
                  0.1
                  
                  
                  
                  0.1Total
      gross profit
                  
                  $
                  (0.3
                  )
                  
                  $
                  9.0





The
manufacturing segment lost $0.4 million in gross profit in the third quarter of
2009 due primarily to the 60.2% decline in new trailer volumes as compared to
the prior year period.





Retail
and distribution segment gross profit in the third quarter of 2009 was $0.0
million, a decrease of $1.5 million compared to the 2008
period.  Gross profit as a percentage of sales was 0.0% compared to
3.5% for the prior year period due to decreased trailer and parts and service
volumes coupled with continued pricing pressures for new and used trailer
sales.





General
and Administrative Expenses





General
and administrative expenses decreased $2.7 million, or 27.2%, to $7.3 million in
the third quarter of 2009 compared to the prior year period.  This
decrease was the result of our cost cutting initiatives to adjust our cost
structure to match the current market demand, which resulted in a $1.8 million
reduction in salaries and employee related costs due to headcount and base pay
reductions made in the current year.





Selling
Expenses





Selling
expenses were $2.6 million in the third quarter of 2009, a decrease of $0.9
million, or 25.0%, compared to the prior year period.  This decrease
was the result of our cost cutting initiatives to adjust our cost structure to
match the current market demand, which resulted in a $0.5 million reduction in
salaries and employee related costs due to both headcount and base pay
reductions made in the current year.





Other
Income (Expense)





Increase in fair value of
warrant of $54.0 million represents the expense recognized as a result of
the fair value adjustment for the warrant issued to Trailer Investments as a
part of the Securities Purchase Agreement entered into on July 17,
2009.





Loss on debt extinguishment
of $0.3 million represents a proportionate write-off of deferred debt issuance
costs recognized on the extinguishment of the Company’s previous Revolving
Credit Facility, which was amended and restated effective on August 3,
2009.


22





Other, netincludes an
expense of $0.9 million relating to the termination of our interest rate swaps
previously designated as cash flow hedges.  The current quarter charge
includes the acceleration of amounts previously reported through Other
Comprehensive Income (Loss) as the designated hedged transaction was considered
no longer probable.





Income
Taxes





We have experienced cumulative
operating losses over the most recent three year period.  After
considering these operating losses and other available evidence, both positive
and negative, we have recorded a full valuation allowance against our deferred
tax assets created during the quarter ended September 30, 2009.  As a
result, the income tax benefit for the third quarter of 2009 was less than $0.1
million.





Nine Months Ended September
30, 2009





Net
Sales





Net sales for the first nine months
were $252.5 million, a decrease of $353.0 million, or 58.3%, compared to the
2008 period.  By business segment, net external sales and related
units sold were as follows (dollars in millions):





Nine
      Months Ended September 30,2009
                  
                  
                  2008
                  
                  
                  %
      ChangeSales
      by segmentManufacturing
                  
                  $
                  197.2
                  
                  
                  $
                  493.2
                  
                  
                  
                  (60.0
                  )Retail
      and distribution
                  
                  
                  55.3
                  
                  
                  
                  112.3
                  
                  
                  
                  (50.8
                  )Total
                  
                  $
                  252.5
                  
                  
                  $
                  605.5
                  
                  
                  
                  (58.3
                  )(units)New
      trailer unitsManufacturing
                  
                  
                  9,000
                  
                  
                  
                  22,000
                  
                  
                  
                  (59.1
                  )Retail
      and distribution
                  
                  
                  500
                  
                  
                  
                  2,000
                  
                  
                  
                  (75.0
                  )Total
                  
                  
                  9,500
                  
                  
                  
                  24,000
                  
                  
                  
                  (60.4
                  )Used
      trailer units
                  
                  
                  2,500
                  
                  
                  
                  5,300
                  
                  
                  
                  (52.8
                  )





Manufacturing
segment sales were $197.2 million for the first nine months of 2009, down $296.0
million, or 60.0%, compared to the first nine months of 2008.  The
reduction in sales is due primarily to the continued weak market demand as new
trailer sales decreased approximately 13,000 units, or 59.1%, as well as a
slight decrease in average selling prices in the first nine months of 2009 as
compared to the prior year period due to customer and product mix.





Retail
and distribution segment sales were $55.3 million in the first nine months of
2009, down $57.0 million, or 50.8%, compared to the prior year
period.  Weak market demand across all segment product lines yielded
reduced volumes as compared to the previous year period.  New trailer
sales decreased $39.3 million, or 73.2%, due to a 75.0% reduction in
volumes and used trailer sales were down $14.0 million, or 47.5%, due to a 52.8%
reduction in volumes.  The decreases in used trailer sales volume were
partially offset by higher average selling prices as compared to the prior year
period due to the mix of used trailers sold.  Parts and service sales
were down $3.5 million, or 12.3%.


23


Cost
of Sales





Cost of sales for the first nine months
of 2009 was $273.5 million, a decrease of $306.3 million, or 52.8% compared to
the 2008 period.  As a percentage of net sales, cost of sales was
108.3% for the first nine months of 2009 compared to 95.8% for the 2008
period.





Manufacturing
segment cost of sales, as detailed in the following table, was $218.6 million
for the first nine months of 2009, a decrease of $255.7 million, or 53.9%,
compared to the 2008 period.  As a percentage of net sales, cost of
sales was 110.9% for the first nine months of 2009 compared to 96.2% in the 2008
period.





Nine
      Months Ended September 30,Manufacturing
      Segment
                      
                      2009
                      
                      
                      2008(dollars
      in millions)%
      of Net
                        Sales
                      
                      
                      
                      
                      
                      %
      of Net
                        SalesMaterial
      Costs
                      
                      $
                      152.2
                      
                      
                      
                      77.2
                      %
                      
                      $
                      358.4
                      
                      
                      
                      72.7
                      %Other
      Manufacturing Costs
                      
                      
                      66.4
                      
                      
                      
                      33.7
                      %
                      
                      
                      115.9
                      
                      
                      
                      23.5
                      %$
                      218.6
                      
                      
                      
                      110.9
                      %
                      
                      $
                      474.3
                      
                      
                      
                      96.2
                      %





As shown
in the table above, cost of sales is composed of material costs, a variable
expense, and other manufacturing costs, comprised of both fixed and variable
expenses, including direct and indirect labor, outbound freight, and overhead
expenses.  Material costs were 77.2% of net sales compared to 72.7% in
the 2008 period.  The 4.5% increase results from increases in raw
material commodity and component costs, primarily steel and aluminum, which
could not be offset by increases in selling prices.  In addition, our
other manufacturing costs increased from 23.5% of net sales in the first nine
months of 2008 to 33.7% in the 2009 period.  The 10.2% increase is
primarily the result of the inability to reduce fixed costs in proportion to the
59.1% decrease in new trailer volumes.





Retail
and distribution segment cost of sales was $55.1 million in the first nine
months of 2009, a decrease of $51.3 million, or 48.2%, compared to the 2008
period.  As a percentage of net sales, cost of sales was 99.6% in the
first nine months of 2009 compared to 94.7% in the 2008 period.  The
4.9% increase was primarily the result of a 10.3% increase in direct and
indirect labor and overhead expenses due to the inability to reduce these costs
in proportion to the 75.0% and 52.8% reductions in new and used trailer volumes,
respectively.  This increase in cost of sales as a percentage of net
sales compared to the prior year period was further magnified by valuation
reserves required due to the depressed market conditions for both new and used
trailers.





Gross
Profit





Gross
profit for the first nine months of 2009 was negative $21.0 million, a decrease
of $46.7 million compared to the first nine months of 2008.  Gross
profit as a percent of sales was negative 8.3% compared to 4.2% for the same
period in 2008.  Gross profit by segment was as follows (in
millions):


24





Nine
      Months Ended
                    September
      30,2009
                  
                  
                  2008Gross
      profit by segmentManufacturing
                  
                  $
                  (21.4
                  )
                  
                  $
                  18.9Retail
      and distribution
                  
                  
                  0.2
                  
                  
                  
                  5.9Eliminations
                  
                  
                  0.2
                  
                  
                  
                  0.9Total
      gross profit
                  
                  $
                  (21.0
                  )
                  
                  $
                  25.7





The
manufacturing segment lost $21.4 million in gross profit in the first nine
months of 2009 due to a 59.1% decline in new trailer volumes coupled with higher
raw material and component part costs as compared to the prior year
period.





Retail
and distribution segment gross profit was $0.2 million for the first nine months
of 2009, a decrease of $5.7 million compared to the 2008
period.  Gross profit as a percentage of sales was 0.4% compared to
5.3% for the prior year period due to decreased trailer and parts and service
volumes coupled with continued pricing pressures for new trailer
sales.





General
and Administrative Expenses





General
and administrative expenses decreased $7.5 million, or 23.5%, to $24.5 million
in the first nine months of 2009 compared to the prior year
period.  This decrease was the result of our cost cutting initiatives
to adjust our cost structure to match the current market demand, which resulted
in a $4.8 million reduction in salaries and employee related costs due to
headcount and base pay reductions made in the current year as well as spending
reductions in other various discretionary costs totaling approximately $3.0
million.





Selling
Expenses





Selling
expenses decreased $1.5 million, or 14.9%, to $8.7 million in the first nine
months of 2009 compared to the prior year period.  This decrease was
the result of our cost cutting initiatives to adjust our cost structure to match
the current market demand, which resulted in a $1.0 million reduction in
salaries and employee related costs due to both headcount and base pay
reductions made in the current year as well as reductions of approximately $0.4
million in advertising and promotional related activities.





Other
Income (Expense)





Increase in fair value of
warrant of $54.0 million represents the expense recognized as a result of
the fair value adjustment for the warrant issued to Trailer Investments as a
part of the Securities Purchase Agreement entered into on July 17,
2009.





Loss on debt extinguishment
of $0.3 million represents a proportionate write-off of deferred debt issuance
costs recognized on the extinguishment of the Company’s previous Revolving
Credit Facility, which was amended on August 3, 2009.





Other, netincludes an
expense of $0.9 million relating to the termination of our interest rate swaps
previously designated as cash flow hedges.  The current nine month
period ending September 30, 2009 includes the acceleration of amounts previously
reported through Other Comprehensive Income (Loss) as the designated hedged
transaction was considered no longer probable.


25


Income
Taxes





We have experienced cumulative
operating losses over the most recent three year period.  After
considering these operating losses and other available evidence, both positive
and negative, we determined that it was necessary to record a full valuation
allowance against our deferred tax assets created during the nine month period
ending September 30, 2009.  As a result, the effective income tax
benefit for the first nine months of 2009 was less than $0.1 million compared to
a benefit of $6.0 million for the prior year period.  The effective
tax rate for the first nine months of 2009 was effectively 0.0% compared to
30.1% for the prior year period.





Liquidity and Capital
Resources





Capital
Structure





In light of the economic conditions
that negatively impacted our operating results and caused instability in the
capital markets, on July 17, 2009, we entered into a Securities Purchase
Agreement with Trailer Investments, LLC (“Trailer Investments”) pursuant to
which Trailer Investments purchased 20,000 shares of Series E redeemable
preferred stock (“Series E Preferred”), 5,000 shares of Series F redeemable
preferred stock (“Series F Preferred”), and 10,000 shares of Series G redeemable
preferred stock (“Series G Preferred”, and together with the Series E Preferred
and the Series F Preferred, the “Preferred Stock”) for an aggregate purchase
price of $35.0 million.  Trailer Investments also received a warrant
that is exercisable at $0.01 per share for 24,762,636 newly issued shares of our
common stock representing, on August 3, 2009, the date the warrant was
delivered, 44.21% of our issued and outstanding common stock after giving
effect to the issuance of the shares underlying the warrant, subject to upward
adjustment to maintain that percentage if currently outstanding options are
exercised. The number of shares of common stock subject to the warrant is also
subject to upward adjustment to an amount equivalent to 49.99% of the issued and
outstanding common stock outstanding immediately after the closing after giving
effect to the issuance of the shares underlying the warrant in specified
circumstances where we lose the ability to utilize our net operating loss
carryforwards, including as a result of a stockholder acquiring greater than 5%
of our outstanding common stock.  Of the aggregate amount of $35.0
million received, approximately $13.2 million was attributed to the warrant and
$21.8 million was attributed to the preferred stock based on the estimated fair
values of these instruments as of the date of issuance.  The
difference between the initial value and the liquidation value of the Preferred
Stock, including issuance costs of approximately $2.5 million, will be accreted
as preferred stock dividends over a period of five years using the effective
interest method.





The Series E Preferred, Series F
Preferred and Series G Preferred pay an annual dividend rate of 15%, 16% and
18%, respectively.  The dividend on each series of Preferred Stock is
payable quarterly and subject to increase by 0.5% every quarter if the
applicable series of Preferred Stock is still outstanding after August 3,
2014.  During the first two years following the issuance of the
Preferred Stock, we may elect to accrue these dividends unpaid.  The
Preferred Stock also provides the holders with certain rights including an
increase in the dividend rate upon the occurrence of any event of
noncompliance.





We may at any time after one year from
the date of issuance redeem all or any portion of the Preferred Stock with a
liquidation value of $1,000 per share including a premium adjustment ranging
between 15% and 20% if redemption occurs before August 3, 2014.  The
premium for early redemption would be applied to the sum of the liquidation
value and any accrued and unpaid dividends.


26


Upon occurrence of a change of control
of the Company, including if more than 50% of the voting power is
transferred or acquired by any person other than Trailer Investments and its
affiliates unless Trailer Investments or its affiliates acquire the Company, the
Preferred Stock becomes immediately redeemable at the election of the holder at
the liquidation value plus a  premium of 200% of the sum of the
liquidation price plus all accrued and unpaid dividends for Series E Preferred
and Series F Preferred and at the liquidation value plus a premium of 225% for
Series G Preferred.  The change of control provisions for the
Preferred Stock are subject to a look-back provision, whereby if the shares of
Preferred Stock are redeemed pursuant to the voluntary redemption provisions
within 12 months prior to the occurrence of a change of control, we would still
have to pay the additional amount to the holders of the Preferred Stock that was
redeemed so that such holders would receive the aggregate payments equal to the
change of control redemption amounts.





The Securities Purchase Agreement
included a warrant that is exercisable at $0.01 per share for 24,762,636 newly
issued shares of our common stock.  The warrant contains several
conditions, including, among other things, an upward adjustment of shares upon
the occurrence of certain contingent events and an option by the holder to
settle the warrant for cash in event of a specific default.  These
provisions result in the classification of the warrant as a liability that is
adjusted to fair value at each balance sheet date.   If the
option to settle the warrant for cash is required, it would have a material
adverse impact on our liquidity.





The warrant liability was recorded
initially at fair value with subsequent changes in fair value reflected in
earnings.  Estimating fair values of the warrants requires the
development of significant and subjective estimates that may, and are likely to,
change over the duration of the instrument with related changes in internal and
external market factors.  In addition, option-based techniques are
highly volatile and sensitive to changes in the trading market price of our
common stock, which has a high historical volatility.  Since
derivative financial instruments are initially and subsequently carried at fair
value, our Statements of Operations will reflect the volatility in these
estimate and assumption changes.  The fair value of the warrant was
estimated using a binomial valuation model.





In accordance with the Securities
Purchase Agreement, Trailer Investments has the right to nominate five out of
twelve members of our board of directors. Furthermore, Trailer Investments also
has the following rights: rights to information delivery and access to
information and our management team; veto rights over certain significant
aspects of our operations and business (including payments of dividends,
issuance of our securities, incurrence of indebtedness, liquidation and sale of
assets, changes in the size of our board of directors, amendments of
organizational documents of the Company and its subsidiaries and other material
actions by the Company) subject to certain thresholds and limitations; right of
first refusal to participate in any future private financings; and certain other
customary rights granted to investors in similar transactions. We are also
required to promptly file a registration statement to permit resale of the
warrant shares to the maximum extent possible.





Concurrent with entering into the
Securities Purchase Agreement, we entered into a Third Amended and Restated Loan
and Security Agreement (the “Amended Facility”) that amended and restated our
current Revolving Facility.  The Amended Facility has a capacity of
$100 million, subject to a borrowing base, a $12.5 million reserve and
other discretionary reserves.  The maturity date of the Amended
Facility is August 3, 2012.  The interest rate on borrowings under the
Amended Facility from the date of effectiveness through July 31, 2010 is
LIBOR plus 4.25% or the prime rate of Bank of America, N.A. (the “Prime Rate”)
plus 2.75%. After July 31, 2010, the interest rate is based upon average
unused availability and will range between LIBOR plus 3.75% to 4.25% and the
Prime Rate plus 2.25% to 2.75%. We are required to pay a monthly unused line fee
equal to 0.375% times the average daily unused availability along with other
customary fees and expenses of the Agent and the lenders.  In
connection with the Amended Facility, the lenders waived certain events of
default that had occurred under the previous credit facility and waived the
right to receive default interest during the time the events of default had
continued.


27





As of
September 30, 2009, our debt to equity ratio was approximately
0.8:1.0.  The increase in our debt to equity ratio as compared to our
ratio a year earlier is primarily due to the increase in our retained deficit
resulting from losses incurred in 2008 and the first nine months of
2009.  Our long-term objective is to generate operating cash flows
sufficient to fund normal working capital requirements, to fund capital
expenditures, to be positioned to take advantage of market opportunities and,
subject to the limitations in our Amended Facility and the documents creating
our preferred stock, to fund potential dividends or stock
repurchases.  For 2009 and 2010 we expect to fund operating results,
working capital requirements and capital expenditures through cash flows from
operations as well as available borrowings under our Revolving
Facility.





Cash
Flow





Cash used
in operating activities for the nine months ended September 30, 2009 was $7.5
million compared to $8.3 million provided by operating activities in the same
period of 2008.  The change was primarily a result of a $40.3 million
reduction in net income, adjusted for non-cash items, offset by a $24.5 million
improvement in working capital.  Changes in key working capital
accounts for the first nine months of 2009 compared to the prior year period are
summarized below (in millions):





2009
                  
                  
                  2008
                  
                  
                  ChangeAccounts
      receivable
                  
                  $
                  15.1
                  
                  
                  $
                  (7.1
                  )
                  
                  $
                  22.2Inventories
                  
                  
                  33.4
                  
                  
                  
                  (19.7
                  )
                  
                  
                  53.1Accounts
      payable and accrued liabilities
                  
                  
                  (17.0
                  )
                  
                  
                  33.7
                  
                  
                  
                  (50.7
                  )





During
2009, accounts receivable decreased by $15.1 million as compared to a $7.1
million increase in 2008. The decrease for 2009 was primarily a result of a
reduction in sales volumes as reported within our Consolidated Statements of
Operations coupled with an improvement in the timing of cash receipts from
customers.  Days sales outstanding, a measure of working capital
efficiency that measures the amount of time a receivable is outstanding,
improved to approximately 26 days in 2009 compared to 29 days in
2008.  Inventory decreased $33.4 million during 2009 compared to an
increase of $19.7 million in 2008.  Inventory turns, a commonly used
measure of working capital efficiency that measures how quickly inventory turns
per year, was approximately six times in both 2009 and 2008. The decrease in
inventory for the 2009 period is due to lower new and used trailer inventories
resulting from reduced demand as well as the continued improvements in our
inventory management system.  Accounts payable and accrued liabilities
decreased $17.0 million in 2009 compared to an increase of $33.7 million in
2008.  The decrease in the current year period was primarily due to
lower production volumes.  Days payable outstanding, a measure of
working capital efficiency that measures the amount of time a payable is
outstanding, was 35 days for the 2009 period compared to 31 days for the same
period last year.





Investing
activities used $0.5 million during the first nine months of 2009 compared to
$7.9 million in the prior year period.  The decrease of $7.4 million
from the prior year was due to limiting capital spending to required replacement
projects and cost reduction initiatives.





Financing
activities used $18.9 million during the first nine months of 2009 as the
proceeds received from the issuance of preferred stock and a warrant to Trailer
Investments were more than offset by debt payments made on outstanding
borrowings under the Revolving Facility.  Dividend payments were
suspended as of December 2008.


28





As of
September 30, 2009, our liquidity position, defined as cash on hand and
available borrowing capacity, net of availability reserves as established in our
Amended Facility, amounted to approximately $36.0 million and total debt and
capital lease obligations amounted to approximately $35.0 million.  As
a result of the August 3, 2009 investment and concurrent with our Amended
Facility, described in the Capital Structure section above, we believe our
liquidity is adequate to meet our expected operating results, working capital
needs and capital expenditures for 2009 and 2010, a period of economic
uncertainty.





In light
of current uncertain market and economic conditions, we are aggressively
managing our cost structure, capital expenditures and cash
position.  In 2009, we have continued to implement various cost
reduction actions that have substantially decreased our corporate overhead and
operating costs and include:





·
            salaried
      workforce headcount reductions of approximately 150 associates, or 25%,
      bringing total salaried headcount reductions to over 40%, or approximately
      225 associates, since the beginning of the industry downturn in early
      2007;


·
            a
      temporary 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 a reduction 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 16.7% reduction of director cash
  compensation;


·
            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 are incremental to previous actions taken during this
downturn.  Previous actions included idling of plants and assembly
lines, consolidation and transformation initiatives at our Lafayette facility,
salaried workforce reductions, reductions in total compensation awards to
executives and other eligible participants, the suspension of any company match
for non-qualified plan participants, as well as the suspension of our quarterly
dividend.





Capital
Expenditures





Capital
spending amounted to approximately $0.7 million for the first nine months of
2009 and is anticipated to be approximately $1.0 million in the aggregate for
2009. The spending for 2009 and 2010 will be limited to required replacement
projects and cost reduction initiatives in efforts to manage cash flows and
enhance liquidity.





Off-Balance
Sheet Transactions





As of September 30, 2009, we had
approximately $2.6 million in operating lease commitments.  We did not
enter into any material off-balance sheet debt or operating lease transactions
during the quarter ended September 30, 2009.


29





Subsequent
Event





In
accordance with the Statement issued by the FASB on Subsequent Events, we have
evaluated subsequent events through the time of filing on November 4, 2009,
which is the date that our condensed consolidated financial statements were
filed with the Securities Exchange Committee (“SEC”).





On
November 3, 2009, we announced the sale of our Anna, Illinois production
facility.  We also announced that we will consolidate the production
of all our Transcraft®product
lines to our production facility located in Cadiz, Kentucky, a facility
currently used to produce our aluminum platform and dump trailer product
lines.  The sale of the Anna facility will complete the consolidation
process of our platform business.  This consolidation
initiative is intended to optimize the production process and assist
in further reducing our overhead cost structure.  Production at the
Anna facility is expected to cease sometime in the first half of 2010
at which time the new production lines at the Cadiz facility are expected
to be fully operational.





Contractual Obligations and
Commercial Commitments





We have
included a summary of our Contractual Obligations and Commercial Commitments in
our annual report on Form 10-K/A, for the year ended December 31,
2008.  With the exception of the changes to our Revolving Facility, as
amended and restated, and the Preferred Stock and warrant issued to Trailer
Investments in connection with the Securities Purchase Agreement, as discussed
in Notes 4 and 5, respectively, of the Condensed Consolidated Financial
Statements, there have been no material changes to the summary provided in that
report.





Backlog





Orders
that have been confirmed by customers in writing and can be produced during the
next 18 months are included in backlog. Orders that comprise the backlog may be
subject to changes in quantities, delivery, specifications and terms. Our
backlog of orders was approximately $96 million at September 30, 2009 compared
to $110 million at December 31, 2008.  We expect to complete the
majority of our existing backlog orders within the next 12 months.





OUTLOOK





We face
significant uncertainty regarding the demand for trailers during the current
economic environment.  According to the most recent A.C.T. Research
Company, LLC (ACT) estimates, total trailer industry shipments for 2009 are
expected to be down 47% from 2008 to approximately 76,000 units.  By
product type, ACT is estimating that van trailer shipments will be down
approximately 50% in 2009 compared to 2008.  ACT is forecasting that
platform trailer shipments will decline approximately 33% and dump trailer
shipments will fall approximately 53% in 2009.  For 2010, ACT
estimates that shipments will grow approximately 42% to a total of 108,000
units.  The biggest concerns for 2009 relate to the global economy,
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, we will incur net losses in 2009, which will further reduce our
stockholders’ equity.





We
believe we are well-positioned for long-term growth in the industry because: (1)
our core customers are among the dominant participants in the trucking industry;
(2) our DuraPlate® trailer
continues to have increased market acceptance; (3) our focus is on developing
solutions that reduce our customers’ trailer maintenance costs; and (4) we
expect some expansion of our presence into the mid-market
carriers.


30





Pricing
will be difficult in 2009 due to weak demand and fierce competitive
activity.  Raw material and component costs have declined relative to
their highs in the fourth quarter of 2008.  As has been our policy, we
will endeavor to pass along raw material and component price increases to our
customers.  We have a focus on continuing to develop innovative new
products that both add value to our customers’ operations and allow us to
continue to differentiate our products from the competition in order to return
to profitability.





Based on
industry forecasts, conversations with our customers regarding their current
requirements and our existing backlog of orders, we estimate that for the full
year 2009 total units sold will be between 11,000 and 13,000, a reduction from
2008 of 67% and 61%, respectively.





CRITICAL
ACCOUNTING POLICIES AND ESTIMATES





We have included a summary of our
Critical Accounting Policies and Estimates in our annual report on Form 10-K/A,
for the year ended December 31, 2008.  There have been no material
changes to the summary provided in that report.





NEW
ACCOUNTING PRONOUNCEMENTS





In June
2009, the Financial Accounting Standards Board (FASB) issued a Statement on
Accounting Standards Codification.  The Statement establishes the
Codification as the single official source of authoritative United States
accounting and reporting standards for all non-governmental entities (other than
guidance issued by the SEC).  The Codification changes the referencing
and organization on financial standards and is effective for interim and annual
periods ending on or after September 15, 2009.  We began applying the
Codification to our disclosures in the third quarter of 2009.  As
Codification is not intended to change the existing accounting guidance, the
adoption has not had an impact on our financial position, results of operations
or cash flows.





In May
2009, the FASB issued a Statement on Subsequent Events.  The Statement
establishes a general standard of accounting for and disclosures of events that
occur after the balance sheet date but before financial statements are issued or
are available to be issued.  Specifically, the Statement sets forth
the period after the balance sheet date during which management should evaluate
events or transactions that may occur for potential recognition or disclosure in
the financial statements, the circumstances under which an entity should
recognize events or transactions occurring after the balance sheet date in its
financial statements and the disclosures that an entity should make about events
or transactions that occurred after the balance sheet date.  In
addition, an entity shall disclose the date through which subsequent events have
been evaluated and whether that date is the date the financial statements were
issued or the date the financial statements were available to be
issued.  The requirements of the Statement were effective for interim
and annual financial periods ending after June 15, 2009.  The adoption
of this Statement has had no impact on our financial position, results of
operations or cash flows as we already followed an approach similar to this
statement prior to adoption.  We evaluated our September 30, 2009
consolidated financial statements for subsequent events through time of filing
on November 4, 2009, which is the date that our condensed consolidated financial
statements were filed with the Securities Exchange Committee
(“SEC”).  See Note 15 of our Notes to Condensed Consolidated Financial
Statements for further discussion of subsequent event activities.





In March
2008, the FASB issued a Statement on Derivative Instruments and Hedging
Activities.  The Statement requires enhanced disclosures for
derivative and hedging activities, including information that would enable
financial statement users to understand how and why a company uses derivative
instruments, how derivative instruments and related hedged items are accounted
for and how derivative instruments and related hedged items affect an entity’s
financial position, financial performance and cash flows.  This
Statement was effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008, and was applicable to
our financial statements beginning in the first quarter of 2009.  As
the Statement only requires enhanced disclosures, this standard has not and will
not have a material impact on our financial position, results of operations or
cash flows.  See Note 6 of our Notes to Condensed Consolidated
Financial Statements for further discussion of derivative instruments and
hedging activities.


31





In
September 2006, the FASB issued a Statement on Fair Value
Measurements.  The Statement provides guidance for using fair value to
measure assets and liabilities and only applies when other standards require or
permit the fair value measurement of assets and liabilities.  It does
not expand the use of fair value measurement.  In February 2008, the
FASB announced that it was deferring the effective date to fiscal years
beginning after November 15, 2008 for certain non-financial assets and
non-financial liabilities, except those that are recognized or disclosed at fair
value in the financial statements on a recurring basis.  For these
financial and non-financial assets and liabilities that are remeasured at least
annually, this Statement was effective for fiscal years beginning after November
15, 2007.  Derivative instruments and hedging activities are carried
at fair value.  The adoption of this Statement has not had a material
impact on our financial position, results of operations or cash
flows.  See Note 7 of our Notes to Condensed Consolidated Financial
Statements for further discussion of fair value measurements.





In
June 2008, the FASB issued a Statement on Determining Whether Instruments
Granted in Share-Based Payment Transactions are Participating
Securities.  This Statement identifies that unvested share-based
payment awards that contain non-forfeitable rights to dividends or dividend
equivalents (whether paid or unpaid) are participating securities and shall be
included in the computation of earnings per share pursuant to the two-class
method.  This Statement is effective for financial statements issued
for fiscal years beginning after December 15, 2008, and interim periods within
those years.  All prior period earnings per share data presented shall
be adjusted retrospectively to conform to the provisions of this
Statement.  While the computation of earnings per share has been
retrospectively restated, the adoption of this Statement did not have a material
impact on our results of operations, financial position or earnings per share
for any period presented.





ITEM
      3.
            QUANTITATIVE AND
      QUALITATIVE DISCLOSURES ABOUT MARKET
  RISKS





In addition to the risks inherent in
our operations, we have exposure to financial and market risk resulting from
volatility in commodity prices and interest rates.  The following
discussion provides additional detail regarding our exposure to these
risks.





Commodity
Prices





We are
exposed to fluctuations in commodity prices through the purchase of raw
materials that are processed from commodities such as aluminum, steel, wood and
polyethylene.  Given the historical volatility of certain commodity
prices, this exposure can materially impact product
costs.  Historically, we have managed aluminum price changes by
entering into fixed price contracts with our suppliers.  As of
September 30, 2009, we had $11.4 million in raw material purchase commitments
through December 2010 for materials that will be used in the production
process.  We typically do not set prices for our products more than
45-90 days in advance of our commodity purchases and can, subject to competitive
market conditions, take into account the cost of the commodity in setting our
prices for each order.  To the extent that we are unable to offset the
increased commodity costs in product prices, our results would be materially and
adversely affected.


32





Interest
Rates





As of
September 30, 2009, we had $30.1 million of floating rate debt outstanding under
our revolving facility.  A hypothetical 100 basis-point change in the
floating interest rate from the current level would result in a corresponding
$0.3 million change in interest expense over a one-year period.  This
sensitivity analysis does not account for the change in the competitive
environment indirectly related to the change in interest rates and the potential
managerial action taken in response to these changes.


ITEM
      4.
            CONTROLS AND
      PROCEDURES





Disclosure
Controls and Procedures





Based on
an evaluation under the supervision and with the participation of the Company’s
management, the Company’s principal executive officer and principal financial
officer have concluded that the Company’s disclosure controls and procedures (as
defined in Rules 14a-15(e) and 15d-15(e) under the Securities Exchange Act of
1934, as amended (the “Exchange Act”)) were effective as of September 30,
2009.





Changes
in Internal Controls





There were no changes in the Company’s
internal control over financial reporting, as defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act, during the third quarter of fiscal 2009 that
have materially affected or are reasonably likely to materially affect the
Company’s internal control over financial reporting.





PART
II - OTHER INFORMATION





ITEM
      1A.
            RISK
      FACTORS





You
should carefully consider the risks described in our Annual Report on Form
10-K/A, for the year ended December 31, 2008, including those under the heading
“Risk Factors” appearing in Item 1A of Part I of the Form 10-K/A, those under
the heading “Risk Factors” appearing in Item 1A of Part II of our Quarterly
Report on Form 10-Q for the quarterly period ended June 30, 2009, and other
information contained in this Quarterly Report before investing in our
securities.  In addition, the following risk factors are provided to
supplement and update the Risk Factors previously disclosed in the Risk Factors
section of our Annual Report on Form 10-K/A and previously supplemented by the
Risk Factors previously disclosed in the Risk Factors section of our Quarterly
Report on Form 10-Q for the quarterly period ended June 30,
2009.  Realization of any of these risks could have a material adverse
effect on our business, financial condition, cash flows and results of
operations.





Our
results of operations have declined significantly in recent periods, and the
impact of the current global economic downturn and its effects on our industry
could continue to harm our operations and financial performance.





For the
year ended December 31, 2008 and nine month period ended September 30, 2009, we
recorded net sales of $836.2 million and $252.5 million, respectively, and we
recorded a net loss for these periods of $125.8 million and $112.6 million,
respectively.  This compares to net sales of $1.1 billion and $605.5
million for the year ended December 31, 2007 and the nine month period ended
September 30, 2008, respectively, net income for the year ended December 31,
2007 of $16.3 million and net loss for the nine months ended September 30, 2008
of $13.9 million.  These declines in our results of operations reflect
the conditions in the markets we serve and the general condition of the global
economy.  The global economic downturn has caused demand for new
trailers to decline and has led to, in some cases, the cyclical timeframe for
trailer replacement to be pushed out due to economic pressures.  We
believe that the overall industry in which we operate has been affected
similarly.  For example, according to a July 2009 report by ACT, total
trailer industry shipments in 2008 were approximately 146,000, which reflected a
decline of approximately 33% from the 216,000 trailers it reported for the year
ended December 31, 2007.  By comparison, we shipped 33,300 new
trailers in 2008, which reflected a decline of approximately 28% from the 46,400
new trailers we shipped in the year ended December 31, 2007.


33


We
continue to be affected by the global economy, especially the credit markets, as
well as the decline in the housing and construction-related markets in the
U.S.  The same general economic concerns faced by us are also faced by
our customers.  We believe that many of our customers are highly
leveraged, have limited access to capital, and may be reliant on liquidity from
global credit markets and other sources of external financing.  If the
current conditions impacting the credit markets and general economy are
prolonged, we may be faced with unexpected delays in product purchases or the
loss of customers, which could further materially impact our financial position,
results of operations and cash flow.  Further, lack of liquidity by
our customers could impact our ability to collect amounts owed to
us.  While we have taken steps to address these concerns through the
implementation of our strategic plan, we are not immune to the pressures being
faced by our industry and our results of operations may continue to
decline.





We
have filed a registration statement for the sale of a substantial number of
shares of our common stock into the public market by the selling stockholder,
named therein, which may result in significant downward pressure on the price of
our common stock and could affect the ability of our stockholders to realize the
current trading price of our common stock.





Sales of
a substantial number of shares of our common stock in the public market could
cause a reduction in the market price of our common stock.  As of
October 30, 2009, there were 31,201,125 shares of our common stock
outstanding.  The selling stockholder named in our registration
statement on Form S-1 has the right to acquire 24,762,636 shares of our common
stock, subject to upward adjustment, issuable upon exercise of the Warrant,
which represented approximately 44.21% of our issued and outstanding common
stock as of August 3, 2009, the date on which the Warrant was
delivered.  The selling stockholder may sell these shares pursuant to
the prospectus that is part of that registration statement, if and when that
registration statement is declared effective, or otherwise.  Investors
should be aware that the current or future market price of their shares of our
common stock could be negatively impacted by the sale or perceived sale of all
or a significant number of the shares that are available for sale.





ITEM
      6.
            EXHIBITS





(a)
                Exhibits:31.01
                Certification
      of Principal Executive Officer31.02
                Certification
      of Principal Financial Officer32.01
                Written
      Statement of Chief Executive Officer and Chief Financial Officer Pursuant
      to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section
      1350)





SIGNATURE





Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.





WABASH
      NATIONAL CORPORATIONDate:  November
      4, 2009
                  By:
                  /s/ Mark J. WeberMark
      J. WeberSenior
      Vice President and Chief Financial Officer
                    (Principal
      Financial
Officer)


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