UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


(Mark One)
☒			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended ~~June 30, 2021~~March 31, 2022


☐			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to _

Commission File Number: 001-10883

WABASH NATIONAL CORPORATION

(Exact name of registrant as specified in its charter)


Delaware		52-1375208
(State of Incorporation)		(IRS Employer Identification Number)

3900 McCarty Lane
Lafayette	Indiana	47905
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (765) ~~771-5300~~771-5310

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 par value

WNC

New York Stock Exchange

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐☒	Accelerated filer	☒☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of common stock outstanding at ~~July 23, 2021~~April 20, 2022 was ~~50,009,288.~~49,032,640.

Table of Contents

WABASH NATIONAL CORPORATION

FORM 10-Q

TABLE OF CONTENTS


		Page
PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets at ~~June~~ 3 0March 31 , ~~2021~~202 2 and December 31, ~~2020~~20 2 1	3

	Condensed Consolidated Statements of Operations for the three ~~and~~ ~~six~~months ended ~~June 30~~March 31 , ~~2021~~202 2 and ~~2020~~202 1	4

	Condensed Consolidated Statements of Comprehensive Income ~~(Loss)~~ for the three ~~and six~~ months ended ~~June~~ 3 0March 31 , ~~2021~~202 2 and ~~2020~~202 1	5

	Condensed Consolidated Statements of Cash Flows for the ~~three~~ ~~and six~~ three months ended ~~June 30~~March 31 , ~~2021~~202 2 and ~~2020~~202 1	6

	Condensed Consolidated Statements of Stockholders’ Equity for the three ~~and six~~ months ended ~~June 30~~March 31, 2022 ~~, 2021~~ and ~~2020~~202 1	7

	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2523

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	4135

Item 4.	Controls and Procedures	4136

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	4236

Item 1A.	Risk Factors	4236

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4236

Item 6.	Exhibits	4237

	~~Signatur~~esSignatures	4338

Table of Contents

Part I - FINANCIAL INFORMATION

Item 1. Financial Statements

WABASH NATIONAL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)


		June 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
		(Unaudited)					(Unaudited)
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	134,375	$	217,677	Cash and cash equivalents	$	72,794	$	71,778
Accounts receivable, net	Accounts receivable, net	121,390		101,301		Accounts receivable, net	290,035		176,511
Inventories, net	Inventories, net	252,550		163,750		Inventories, net	286,734		237,621
Prepaid expenses and other	Prepaid expenses and other	79,669		63,036		Prepaid expenses and other	46,374		43,795
Total current assets	Total current assets	587,984		545,764		Total current assets	695,937		529,705
Property, plant, and equipment, net	Property, plant, and equipment, net	207,369		209,676		Property, plant, and equipment, net	232,037		232,425
Goodwill	Goodwill	188,438		199,560		Goodwill	188,438		188,443
Intangible assets, net	Intangible assets, net	154,048		166,887		Intangible assets, net	109,402		114,441
Other assets	Other assets	42,661		39,583		Other assets	41,043		42,057
Total assets	Total assets	$	1,180,500	$	1,161,470	Total assets	$	1,266,857	$	1,107,071
Liabilities and Stockholders’ Equity	Liabilities and Stockholders’ Equity					Liabilities and Stockholders’ Equity
Current liabilities:	Current liabilities:					Current liabilities:
Current portion of long-term debt	Current portion of long-term debt	$	0	$	0	Current portion of long-term debt	$	—	$	—
Current portion of finance lease obligations	Current portion of finance lease obligations	206		348		Current portion of finance lease obligations	—		59
Accounts payable	Accounts payable	171,377		104,425		Accounts payable	258,643		173,950
Other accrued liabilities	Other accrued liabilities	110,966		130,980		Other accrued liabilities	114,017		115,316
Total current liabilities	Total current liabilities	282,549		235,753		Total current liabilities	372,660		289,325
Long-term debt	Long-term debt	418,900		447,979		Long-term debt	484,354		428,315
Finance lease obligations		0		30

Deferred income taxes	Deferred income taxes	52,517		46,777		Deferred income taxes	40,510		36,019
Other non-current liabilities	Other non-current liabilities	26,554		26,052		Other non-current liabilities	27,080		27,873
Total liabilities	Total liabilities	780,520		756,591		Total liabilities	924,604		781,532
Commitments and contingencies	Commitments and contingencies	0		0		Commitments and contingencies	0		0
Stockholders’ equity:	Stockholders’ equity:					Stockholders’ equity:
Common stock 200,000,000 shares authorized, $0.01 par value, 50,464,034 and 52,536,482 shares outstanding, respectively		758		755
Common stock 200,000,000 shares authorized, $0.01 par value, 49,032,640 and 48,954,482 shares outstanding, respectively						Common stock 200,000,000 shares authorized, $0.01 par value, 49,032,640 and 48,954,482 shares outstanding, respectively	764		759
Additional paid-in capital	Additional paid-in capital	650,358		644,695		Additional paid-in capital	656,863		653,978
Retained earnings	Retained earnings	114,445		107,233		Retained earnings	100,120		92,111
Accumulated other comprehensive income	Accumulated other comprehensive income	31,158		7,633		Accumulated other comprehensive income	14,687		859
Treasury stock at cost, 25,422,064 and 23,004,607 common shares, respectively		(396,739)		(355,437)
Treasury stock at cost, 27,454,978 and 27,013,275 common shares, respectively						Treasury stock at cost, 27,454,978 and 27,013,275 common shares, respectively	(430,181)		(422,168)
Total stockholders' equity	Total stockholders' equity	399,980		404,879		Total stockholders' equity	342,253		325,539
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	1,180,500	$	1,161,470	Total liabilities and stockholders’ equity	$	1,266,857	$	1,107,071

The accompanying notes are an integral part of these Condensed Consolidated Statements.

Table of Contents

WABASH NATIONAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited – dollars in thousands, except per share amounts)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
Net sales	Net sales	$	449,422	$	339,153	$	841,425	$	726,227	Net sales	$	546,761	$	392,003
Cost of sales	Cost of sales	393,814		304,832		738,651		655,163		Cost of sales	488,706		344,837
Gross profit	Gross profit	55,608		34,321		102,774		71,064		Gross profit	58,055		47,166
General and administrative expenses	General and administrative expenses	22,907		19,633		45,774		45,825		General and administrative expenses	26,332		22,867
Selling expenses	Selling expenses	6,065		4,886		12,730		12,884		Selling expenses	6,209		6,665
Amortization of intangible assets	Amortization of intangible assets	5,799		5,493		11,597		10,988		Amortization of intangible assets	5,039		5,798

Impairment and other, net	Impairment and other, net	(1,847)		(1,690)		(1,226)		105,424		Impairment and other, net	340		621
Income (loss) from operations		22,684		5,999		33,899		(104,057)
Income from operations										Income from operations	20,135		11,215
Other income (expense):	Other income (expense):									Other income (expense):
Interest expense	Interest expense	(6,034)		(5,882)		(12,184)		(12,154)		Interest expense	(4,913)		(6,150)
Other, net	Other, net	(413)		285		(427)		405		Other, net	(71)		(14)
Other expense, net	Other expense, net	(6,447)		(5,597)		(12,611)		(11,749)		Other expense, net	(4,984)		(6,164)
Income (loss) before income tax expense (benefit)		16,237		402		21,288		(115,806)
Income tax expense (benefit)		3,985		548		5,819		(9,013)
Net income (loss)		$	12,252	$	(146)	$	15,469	$	(106,793)
Income before income tax expense										Income before income tax expense	15,151		5,051
Income tax expense										Income tax expense	3,077		1,834
Net income										Net income	$	12,074	$	3,217

Net income (loss) per share:
Net income per share:										Net income per share:
Basic	Basic	$	0.24	$	0.00	$	0.30	$	(2.01)	Basic	$	0.25	$	0.06
Diluted	Diluted	$	0.24	$	0.00	$	0.29	$	(2.01)	Diluted	$	0.24	$	0.06
Weighted average common shares outstanding (in thousands):	Weighted average common shares outstanding (in thousands):									Weighted average common shares outstanding (in thousands):
Basic	Basic	51,272		52,874		51,697		53,015		Basic	49,004		52,126
Diluted	Diluted	51,989		52,874		52,472		53,015		Diluted	49,730		53,044

Dividends declared per share	Dividends declared per share	$	0.08	$	0.08	$	0.16	$	0.16	Dividends declared per share	$	0.08	$	0.08

The accompanying notes are an integral part of these Condensed Consolidated Statements.

Table of Contents

WABASH NATIONAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ~~(LOSS)~~

(Unaudited – dollars in thousands)

Three Months Ended
June 30, Six Months Ended
June 30,
2021 2020 2021 2020
Net income (loss) $ 12,252 $ (146) $ 15,469 $ (106,793)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment 667 318 364 (1,318)
Unrealized gain (loss) on derivative instruments 8,631 2,264 23,161 (1,619)
Total other comprehensive income (loss) 9,298 2,582 23,525 (2,937)
Comprehensive income (loss) $ 21,550 $ 2,436 $ 38,994 $ (109,730)


	Three Months Ended March 31,
	2022		2021
Net income	$	12,074	$	3,217
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	243		(303)
Unrealized gain on derivative instruments	13,585		14,530
Total other comprehensive income	13,828		14,227
Comprehensive income	$	25,902	$	17,444

The accompanying notes are an integral part of these Condensed Consolidated Statements.

Table of Contents

WABASH NATIONAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited – dollars in thousands)


		Six Months Ended June 30,					Three Months Ended March 31,
		2021		2020			2022		2021
Cash flows from operating activities	Cash flows from operating activities					Cash flows from operating activities
Net income (loss)		$	15,469	$	(106,793)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities
Net income						Net income	$	12,074	$	3,217
Adjustments to reconcile net income to net cash used in operating activities						Adjustments to reconcile net income to net cash used in operating activities
Depreciation	Depreciation	12,881		11,657		Depreciation	8,225		6,432
Amortization of intangibles	Amortization of intangibles	11,597		10,988		Amortization of intangibles	5,039		5,798
Net gain on sale of property, plant and equipment and business divestiture		(2,043)		(1,690)
Loss on debt extinguishment		452		0
Net gain on sale of property, plant and equipment						Net gain on sale of property, plant and equipment	(645)		(193)

Deferred income taxes	Deferred income taxes	(1,799)		(2,648)		Deferred income taxes	(50)		661
Stock-based compensation	Stock-based compensation	4,216		416		Stock-based compensation	2,277		2,032
Impairment	Impairment	817		107,114		Impairment	986		817
Non-cash interest expense	Non-cash interest expense	591		535		Non-cash interest expense	213		296
Accounts receivable	Accounts receivable	(25,758)		48,785		Accounts receivable	(113,524)		(33,059)
Inventories	Inventories	(89,733)		(14,154)		Inventories	(49,113)		(63,422)
Prepaid expenses and other	Prepaid expenses and other	2,500		(8,195)		Prepaid expenses and other	2,913		(7,031)
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	56,074		(22,126)		Accounts payable and accrued liabilities	98,284		61,789
Other, net	Other, net	1,650		(1,235)		Other, net	(1,246)		259
Net cash (used in) provided by operating activities		(13,086)		22,654
Net cash used in operating activities						Net cash used in operating activities	(34,567)		(22,404)
Cash flows from investing activities	Cash flows from investing activities					Cash flows from investing activities
Capital expenditures		(11,063)		(10,921)
Proceeds from the sale of assets and business divestiture		20,978		2,725
Cash payments for capital expenditures						Cash payments for capital expenditures	(9,949)		(4,165)
Proceeds from the sale of assets						Proceeds from the sale of assets	1,445		203

Net cash provided by (used in) investing activities		9,915		(8,196)
Net cash used in investing activities						Net cash used in investing activities	(8,504)		(3,962)
Cash flows from financing activities	Cash flows from financing activities					Cash flows from financing activities
Proceeds from exercise of stock options	Proceeds from exercise of stock options	1,450		0		Proceeds from exercise of stock options	613		1,235
Dividends paid	Dividends paid	(8,437)		(8,742)		Dividends paid	(4,337)		(4,253)

Borrowings under revolving credit facilities	Borrowings under revolving credit facilities	232		45,449		Borrowings under revolving credit facilities	56,284		114
Payments under revolving credit facilities	Payments under revolving credit facilities	(232)		(45,449)		Payments under revolving credit facilities	(318)		(114)
Principal payments under finance lease obligations	Principal payments under finance lease obligations	(172)		(162)		Principal payments under finance lease obligations	(59)		(85)
Principal payments under term loan credit facility		(30,000)		0

Debt issuance costs paid	Debt issuance costs paid	0		(12)		Debt issuance costs paid	(83)		—
Stock repurchases	Stock repurchases	(41,302)		(10,065)		Stock repurchases	(8,013)		(19,321)
Net cash used in financing activities		(78,461)		(18,981)
Net cash provided by (used in) financing activities						Net cash provided by (used in) financing activities	44,087		(22,424)
Cash and cash equivalents:	Cash and cash equivalents:					Cash and cash equivalents:
Net decrease in cash, cash equivalents, and restricted cash		(81,632)		(4,523)
Net increase (decrease) in cash, cash equivalents, and restricted cash						Net increase (decrease) in cash, cash equivalents, and restricted cash	1,016		(48,790)
Cash, cash equivalents, and restricted cash at beginning of period	Cash, cash equivalents, and restricted cash at beginning of period	217,677		140,516		Cash, cash equivalents, and restricted cash at beginning of period	71,778		217,677
Cash, cash equivalents, and restricted cash at end of period	Cash, cash equivalents, and restricted cash at end of period	$	136,045	$	135,993	Cash, cash equivalents, and restricted cash at end of period	$	72,794	$	168,887
Supplemental disclosures of cash flow information:	Supplemental disclosures of cash flow information:					Supplemental disclosures of cash flow information:
Cash paid for interest	Cash paid for interest	$	11,508	$	11,732	Cash paid for interest	$	273	$	1,436
Refunds received for income taxes	Refunds received for income taxes	$	(247)	$	(520)	Refunds received for income taxes	$	(8,825)	$	(403)
Period end balance of payables for property, plant, and equipment						Period end balance of payables for property, plant, and equipment	$	2,960	$	1,781

The accompanying notes are an integral part of these Condensed Consolidated Statements.

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WABASH NATIONAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited – dollars in thousands)

Common Stock Additional
Paid-In
Capital Retained
Earnings Accumulated
Other
Comprehensive
Income Treasury
Stock Total
Shares Amount
Balances at December 31, 2020 52,536,482 $ 755 $ 644,695 $ 107,233 $ 7,633 $ (355,437) $ 404,879
Net income for the period 3,217 3,217
Foreign currency translation (303) (303)
Stock-based compensation 101,083 1 2,031 2,032
Stock repurchase (1,038,674) (19,321) (19,321)
Common stock dividends (3,967) (3,967)
Unrealized gain on derivative instruments, net of tax 14,530 14,530
Common stock issued in connection with:
Stock option exercises 112,400 1 1,234 1,235
Balances at March 31, 2021 51,711,291 $ 757 $ 647,960 $ 106,483 $ 21,860 $ (374,758) $ 402,302
Net income for the period 12,252 12,252
Foreign currency translation 667 667
Stock-based compensation 37,147 1 2,183 2,184
Stock repurchase (1,304,214) (21,981) (21,981)
Common stock dividends (4,290) (4,290)
Unrealized gain on derivative instruments, net of tax 8,631 8,631
Common stock issued in connection with:
Stock option exercises 19,810 215 215
Balances at June 30, 2021 50,464,034 $ 758 $ 650,358 $ 114,445 $ 31,158 $ (396,739) $ 399,980


	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income		Treasury Stock		Total
	Shares	Amount
Balances at December 31, 2021	48,954,482	$	759	$	653,978	$	92,111	$	859	$	(422,168)	$	325,539
Net income for the period						12,074						12,074
Foreign currency translation								243				243
Stock-based compensation	277,124	5		2,272								2,277
Stock repurchase	(247,174)									(8,013)		(8,013)

Common stock dividends						(4,065)						(4,065)
Unrealized gain on derivative instruments, net of tax								13,585				13,585
Common stock issued in connection with:
Stock option exercises	48,208			613								613
Balances at March 31, 2022	49,032,640	$	764	$	656,863	$	100,120	$	14,687	$	(430,181)	$	342,253

Common Stock Additional
Paid-In
Capital Retained
Earnings Accumulated
Other
Comprehensive
Losses Treasury
Stock Total
Shares Amount
Balances at December 31, 2019 53,473,620 $ 750 $ 638,917 $ 221,841 $ (3,978) $ (336,542) $ 520,988
Net loss for the period (106,647) (106,647)
Foreign currency translation (1,636) (1,636)
Stock-based compensation 141,223 3 (920) (917)
Stock repurchase (766,122) (10,051) (10,051)
Common stock dividends (3,885) (3,885)
Unrealized loss on derivative instruments, net of tax (3,883) (3,883)
Balances at March 31, 2020 52,848,721 $ 753 $ 637,997 $ 111,309 $ (9,497) $ (346,593) $ 393,969
Net loss for the period (146) (146)
Foreign currency translation 318 318
Stock-based compensation 57,394 — 1,333 1,333
Stock repurchase (14) (14)
Common stock dividends (4,507) (4,507)
Unrealized gain on derivative instruments, net of tax 2,264 2,264
Balances at June 30, 2020 52,906,115 $ 753 $ 639,330 $ 106,656 $ (6,915) $ (346,607) $ 393,217


	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income		Treasury Stock		Total
	Shares	Amount
Balances at December 31, 2020	52,536,482	$	755	$	644,695	$	107,233	$	7,633	$	(355,437)	$	404,879
Net income for the period						3,217						3,217
Foreign currency translation								(303)				(303)
Stock-based compensation	101,083	1		2,031								2,032
Stock repurchase	(1,038,674)									(19,321)		(19,321)

Common stock dividends						(3,967)						(3,967)
Unrealized gain on derivative instruments, net of tax								14,530				14,530
Common stock issued in connection with:
Stock option exercises	112,400	1		1,234								1,235
Balances at March 31, 2021	51,711,291	$	757	$	647,960	$	106,483	$	21,860	$	(374,758)	$	402,302

The accompanying notes are an integral part of these Condensed Consolidated Statements.

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WABASH NATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. BASIS OF PRESENTATION & DESCRIPTION OF THE BUSINESS

The condensed consolidated financial statements of Wabash National Corporation (the “Company,” “Wabash,” “we,” “our,” or “us”) have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) 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 its 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 Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

As further described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, on January 10, 2022, the Company completed its review and approval of its plan for rebranding as Wabash®. As part of the planning process, the Company assessed its usage of trade names and brand names in connection with the long-term growth strategy as One Wabash. Under the plan as approved, the Company no longer plans to use certain trade names or brand names, and will predominantly use Wabash (or variations thereof) to refer to the Company.

2. NEW ACCOUNTING PRONOUNCEMENTS

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” which provides practical expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments in this update apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued as a result of reference rate reform. These amendments are not applicable to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. ASU No. 2020-04 is effective as of March 12, 2020 through December 31, 2022 and may be applied to contract modifications and hedging relationships from the beginning of an interim period that includes or is subsequent to March 12, 2020. The Company will adopt this standard when LIBOR is discontinued. The Company is evaluating the impact the new standard will have on our condensed consolidated financial statements and related disclosures but does not anticipate a material impact.

3. REVENUE RECOGNITION

The Company recognizes revenue from the sale of its products when obligations under the terms of a contract with our customers are satisfied; this occurs with the transfer of control of our products and replacement parts or throughout the completion of service work. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring promised goods or services to a customer and excludes all taxes collected from the customer. Shipping and handling fees are included in Net sales and the associated costs included in Cost of sales in the Condensed Consolidated Statements of Operations. For shipping and handling costs that take place after the transfer of control, the Company applies the practical expedient and treats such costs as a fulfillment cost. Incidental items that are immaterial in the context of the contract are recognized as expense. For performance obligations satisfied over time, which include certain equipment-related sales within our ~~Diversified Products~~Parts & Services reportable segment that have no alternative use and contain an enforceable right to payment, as well as service work whereby the customer simultaneously receives and consumes the benefits provided, the Company recognizes revenue on the basis of the Company’s efforts or inputs to the satisfaction of these performance obligations, measured by actual total cost incurred to the total estimated costs for each project. Total revenue recognized over time was not material to the condensed consolidated financial statements for all periods presented.

The Company has identified 3 separate and distinct performance obligations: 1)(1) the sale of a trailer or equipment, 2)(2) the sale of replacement parts, and 3)(3) service work. For trailer, truck body, equipment, and replacement part sales, control is transferred and revenue is recognized from the sale upon shipment to or pick up by the customer in accordance with the contract terms. The Company does not have any material extended payment terms as payment is received shortly after the point of sale. Accounts receivable are recorded when the right to consideration becomes unconditional. The Company does have customers who pay for the product prior to the transfer of control which is recorded as customer deposits in Other accrued liabilities as shown in Note 10. Customer deposits are recognized as revenue when the Company performs its obligations under the contract and transfers control of the product.

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4. GOODWILL & OTHER INTANGIBLE ASSETS

~~Goodwill~~Segment Realignment

As further described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, beginning in September 2021 the Company realigned its operating and reportable segments. Based on these changes, the Company has established 2 operating and reportable segments: Transportation Solutions (“TS”) and Parts & ~~Extract Technology~~® ~~Divestiture~~Services (“P&S”). These operating and reportable segments have also been determined to be the applicable reporting units for purposes of goodwill assignment and evaluation.

As of ~~June 30, 2021,~~March 31, 2022, goodwill allocated to ~~our Commercial Trailer Products, Diversified Products (“DPG”),~~the TS and ~~Final Mile Products (“FMP”)~~P&S segments was approximately ~~$2.6 million, $113.9~~$120.5 million and ~~$71.9~~$67.9 million, respectively. The Company considered whether there were any indicators of impairment during the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and concluded there were none.

~~Table of Contents~~Extract Technology

® Divestiture

~~As further described in Note 17, during~~During the second quarter of 2021, the Company sold its Extract Technology® (“Extract”) business that manufactured stainless steel isolators and downflow booths, as well as custom-fabricated equipment, including workstations and drum booths for the pharmaceutical, fine chemical, biotech, and nuclear end markets. Prior to the divestiture, Extract was an operating unit within the ~~Diversified Products~~Parts & Services reporting unit. In accordance with the relevant accounting guidance, as part of the sale the Company allocated $11.1 million of goodwill based upon the relative fair value of the Extract operating unit compared to the ~~Diversified Products~~ reporting unit as a whole. This goodwill was included in the carrying value of the disposed assets and the resulting net gain recognized in connection with the sale. Prior to and subsequent to the divestiture, the Company performed an impairment assessment for the ~~Diversified Products~~ reporting unit and concluded the fair value of the reporting unit continued to exceed the carrying value.

~~Q1 2020 Impairment~~

The Company did not perform in-line with expectations during the first quarter of 2020, partially as a result of the COVID-19 pandemic. In addition, subsequent to December 31, 2019, the Company’s share price and market capitalization declined. As a result, indicators of impairment were identified and the Company performed an interim quantitative assessment as of March 31, 2020, utilizing a combination of the income and market approaches, which were weighted evenly. The results of the quantitative analysis indicated the carrying value of the FMP and Tank Trailers (which is within the DPG segment) reporting units exceeded their respective fair values and, accordingly, goodwill impairment charges of $95.8 million and $11.0 million, respectively, were recorded during the first quarter of 2020. The goodwill impairment charges, which were based on Level 3 fair value measurements, are included in ~~Impairment and other, net~~ ~~in the Condensed Consolidated Statements of Operations.~~

The changes in the carrying amounts of goodwill from December 31, ~~2019~~2020 through the ~~six-month~~three-month period ended ~~June 30, 2021~~March 31, 2022 were as follows (in thousands):


		Commercial Trailer Products		Diversified Products		Final Mile Products		Total			Transportation Solutions		Parts & Services		Total

Balance at December 31, 2019
Goodwill		4,288		140,686		167,715		312,689
Accumulated impairment losses		(1,663)		0		0		(1,663)
Net balance as of December 31, 2019		2,625		140,686		167,715		311,026
Goodwill impairments		0		(10,971)		(95,766)		(106,737)
Impact of divestiture on goodwill		0		(4,685)		0		$	(4,685)
Effects of foreign currency		0		(44)		0		(44)

Balance at December 31, 2020	Balance at December 31, 2020									Balance at December 31, 2020
Goodwill	Goodwill	4,288		135,957		167,715		307,960		Goodwill	$	188,775	$	119,185	$	307,960
Accumulated impairment losses	Accumulated impairment losses	(1,663)		(10,971)		(95,766)		(108,400)		Accumulated impairment losses	(68,257)		(40,143)		(108,400)
Net balance as of December 31, 2020	Net balance as of December 31, 2020	2,625		124,986		71,949		199,560		Net balance as of December 31, 2020	120,518		79,042		199,560
Impact of divestiture on goodwill										Impact of divestiture on goodwill	—		(11,101)		(11,101)
Effects of foreign currency										Effects of foreign currency	(11)		(5)		(16)
Balance at December 31, 2021										Balance at December 31, 2021
Goodwill										Goodwill	188,764		108,079		296,843
Accumulated impairment losses										Accumulated impairment losses	(68,257)		(40,143)		(108,400)
Net balance as of December 31, 2021										Net balance as of December 31, 2021	120,507		67,936		188,443

Effects of foreign currency	Effects of foreign currency	0		(8)		0		(8)		Effects of foreign currency	(3)		(2)		(5)
Balance at March 31, 2021
Balance at March 31, 2022										Balance at March 31, 2022
Goodwill	Goodwill	4,288		135,949		167,715		307,952		Goodwill	188,761		108,077		296,838
Accumulated impairment losses	Accumulated impairment losses	(1,663)		(10,971)		(95,766)		(108,400)		Accumulated impairment losses	(68,257)		(40,143)		(108,400)
Net balance as of March 31, 2021		2,625		124,978		71,949		199,552
Net balance as of March 31, 2022										Net balance as of March 31, 2022	$	120,504	$	67,934	$	188,438

Impact of divestiture on goodwill		0		(11,101)		0		(11,101)
Effects of foreign currency		0		(13)		0		(13)
Balance at June 30, 2021
Goodwill		4,288		124,835		167,715		296,838
Accumulated impairment losses		(1,663)		(10,971)		(95,766)		(108,400)
Net balance as of June 30, 2021		$	2,625	$	113,864	$	71,949	$	188,438

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5. INVENTORIES, NET

Inventories are stated at the lower of cost, determined on either the first-in, first-out or average cost method, or net realizable value. Inventories, net of reserves, consist of the following components (in thousands):

June 30,
2021 December 31,
2020
Raw materials and components $ 144,078 $ 99,418
Finished goods 90,456 44,695
Work in progress 11,074 11,592
Aftermarket parts 5,628 6,567
Used trailers 1,314 1,478
$ 252,550 $ 163,750


	March 31, 2022		December 31, 2021
Raw materials and components	$	198,678	$	174,915
Finished goods	67,880		42,933
Work in progress	13,732		14,133
Aftermarket parts	5,445		4,903
Used trailers	999		737
	$	286,734	$	237,621

6. PREPAID EXPENSES AND OTHER

Prepaid expenses and other current assets consist of the following (in thousands):


		June 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Chassis converter pool agreements	Chassis converter pool agreements	$	14,661	$	17,767	Chassis converter pool agreements	$	4,923	$	18,185
Assets held for sale	Assets held for sale	350		1,897		Assets held for sale	—		350
Income tax receivables	Income tax receivables	11,054		18,073		Income tax receivables	3,836		10,386
Restricted cash		1,670		0

Insurance premiums & maintenance/subscription agreements	Insurance premiums & maintenance/subscription agreements	8,226		4,384		Insurance premiums & maintenance/subscription agreements	7,054		3,290
Commodity swap contracts	Commodity swap contracts	39,621		13,750		Commodity swap contracts	27,067		7,963
All other	All other	4,087		7,165		All other	3,494		3,621
		$	79,669	$	63,036		$	46,374	$	43,795

Chassis converter pool agreements represent chassis transferred to the Company on a restricted basis by the manufacturer, who retains the sole authority to authorize commencement of work on the chassis and to make certain other decisions with respect to the chassis including the terms and pricing of sales to the manufacturer’s dealers. Assets held for sale ~~are~~as of December 31, 2021 related to property, plant, and equipment assets that ~~are~~were unused and ~~are~~were actively being marketed for sale. Insurance premiums and maintenance/subscription agreements are charged to expense over the contractual life, which is generally one year or less. As further described in Note 8, commodity swap contracts relate to our hedging activities (that are in an asset position) to mitigate the risks associated with fluctuations in commodity prices. Other items primarily consist of ~~contract assets related to contracts for which the Company recognizes revenue over time, and~~ investments held by the Company’s captive insurance ~~subsidiary.~~subsidiary as well as other various prepaid and other assets. As of ~~June 30, 2021, restricted cash included in prepaid expenses~~March 31, 2022 and ~~other current assets totaled approximately $1.7 million. As of~~ December 31, ~~2020,~~2021, there was 0no restricted cash included in prepaid expenses and other current assets.

The following table provides a summary of cash, cash equivalents, and restricted cash amounts reported on the Condensed Consolidated Balance Sheets that reconcile the total of such amounts as shown on the Condensed Consolidated Statements of Cash Flows:

June 30,
2021 December 31,
2020
Cash and cash equivalents $ 134,375 $ 217,677
Restricted cash included in prepaid expenses and other 1,670 0
Total cash, cash equivalents, and restricted cash $ 136,045 $ 217,677

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7. DEBT

Long-term debt consists of the following (in thousands):


		June 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Senior Notes due 2025		$	315,000	$	315,000
Senior Notes due 2028						Senior Notes due 2028	$	400,000	$	400,000
Revolving Credit Agreement						Revolving Credit Agreement	89,001		33,035

New Term Loan Credit Agreement due 2027		108,835		138,835
		423,835		453,835			489,001		433,035
Less: unamortized discount and fees	Less: unamortized discount and fees	(4,935)		(5,856)		Less: unamortized discount and fees	(4,647)		(4,720)
Less: current portion	Less: current portion	0		0		Less: current portion	—		—
		$	418,900	$	447,979		$	484,354	$	428,315

~~Senior Notes~~

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~~On September 26, 2017, the Company issued~~ Senior Notes due ~~2025 (the “Senior Notes”) with~~2028

On October 6, 2021, the Company closed on an offering of $400 million in aggregate principal amount of ~~$325 million.~~its 4.50% unsecured Senior Notes due 2028 (the “New Senior Notes”). The New Senior Notes were issued pursuant to an indenture dated as of October 6, 2021, by and among the Company, certain subsidiary guarantors named therein (the “Guarantors”) and Wells Fargo Bank, National Association, as trustee (the “Indenture”). The New Senior Notes bear interest at the rate of ~~5.50% per annum from the date of issuance,~~4.50% and pay interest semi-annually in cash in arrears on April 115 and October 115 of each ~~year.~~year, beginning on April 15, 2022. The New Senior Notes will mature on October 15, 2028. At any time prior to October 15, 2024, the Company ~~used~~may redeem some or all of the ~~net~~New Senior Notes for cash at a redemption price equal to 100% of the aggregate principal amount of the New Senior Notes being redeemed plus an applicable make-whole premium set forth in the Indenture and accrued and unpaid interest to, but not including, the redemption date.

Prior to October 15, 2024, the Company may redeem up to 40% of the New Senior Notes at a redemption price of 104.500% of the principal amount, plus accrued and unpaid interest to, but not including, the redemption date, with the proceeds of ~~$318.9 million from the sale~~certain equity offerings so long as if, after any such redemption occurs, at least 60% of the aggregate principal amount of the New Senior Notes remain outstanding. On and after October 15, 2024, the Company may redeem some or all of the New Senior Notes at redemption prices (expressed as percentages of principal amount) equal to ~~finance~~102.250% for the twelve-month period beginning on October 15, 2024, 101.125% for the twelve-month period beginning October 15, 2025 and 100.000% beginning on October 15, 2026, plus accrued and unpaid interest to, but not including, the redemption date. Upon the occurrence of a Change of Control (as defined in the Indenture), unless the Company has exercised its optional redemption right in respect of the New Senior Notes, the holders of the New Senior Notes will have the right to require the Company to repurchase all or a portion of the ~~acquisition~~New Senior Notes at a price equal to 101% of ~~Supreme~~the aggregate principal amount of the New Senior Notes, plus any accrued and unpaid interest to, ~~pay related fees and expenses.~~ but not including, the date of repurchase.

The New Senior Notes are guaranteed on a senior unsecured basis by all direct and indirect existing and future domestic restricted subsidiaries, subject to certain restrictions. The New Senior Notes and related guarantees are the Company’s and the ~~guarantors’~~Guarantors’ general unsecured senior obligations and ~~are subordinate~~will be subordinated to all of the ~~Company’s~~Company and the ~~guarantors’~~Guarantors’ existing and future secured debt to the extent of the assets securing that secured obligation. In addition, the New Senior Notes are structurally ~~subordinate~~subordinated to any existing and future debt of any of the Company’s subsidiaries that are not ~~guarantors,~~Guarantors, to the extent of the assets of those subsidiaries. ~~The Senior Notes will mature on October 1, 2025.~~

~~The indenture for~~Subject to a number of exceptions and qualifications, the ~~Senior Notes~~Indenture restricts the Company’s ability and the ability of certain of its subsidiaries ~~subject to certain exceptions and qualifications,~~ to: (i) incur additional indebtedness; (ii) pay dividends or make other distributions in respect of, or repurchase or redeem, its capital stock or with respect to any other interest or participation in, or measured by, its profits; (iii) make loans and certain investments; (iv) sell assets; (v) create or incur liens; (vi) enter into transactions with affiliates; and (vii) consolidate, merge or sell all or substantially all of its assets. These covenants are subject to a number of important exceptions and qualifications.

During any time when the New Senior Notes are rated investment grade by at least two of Moody’s, Fitch and Standard & Poor’s Ratings Services and no Default (as defined in the Indenture) has occurred and is continuing, many of such covenants will be suspended and the Company and its subsidiaries will cease to be subject to such covenants during such period.

The ~~indenture for the Senior Notes~~Indenture contains customary events of default, including payment defaults, breaches of covenants, failure to pay certain judgments and ~~covenants.~~certain events of bankruptcy, insolvency and reorganization. If an event of default occurs and is continuing, the principal amount of the New Senior Notes, plus accrued and unpaid interest, if any, may be declared immediately due and payable. These amounts automatically become due and payable if an event of default relating to certain events of bankruptcy, insolvency or reorganization occurs. As of ~~June 30, 2021,~~March 31, 2022, the Company was in compliance with all covenants.

Contractual coupon interest expense and accretion of ~~discount and~~ fees for the New Senior Notes for the ~~three- and six-month periods~~three-month period ended ~~June 30, 2021~~March 31, 2022 was $4.5 million and ~~$9.0~~$0.2 million, respectively, ~~compared to $4.6 million~~ and ~~$9.3 million~~are included in Interest expense in the Company’s Condensed Consolidated Statements of Operations. There was no contractual coupon interest expense and accretion of fees for the ~~three- and six-month periods~~New Senior Notes during the three-month period ended ~~June 30, 2020, respectively.~~ March 31, 2021.

Contractual coupon interest expense and accretion of discount and fees for the Senior Notes due 2025, which were redeemed in full during the fourth quarter of 2021, for the three-month period ended March 31, 2021 was $4.5 million, which are included in Interest expense on the Company’s Condensed Consolidated Statements of Operations.

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Revolving Credit Agreement

On December 21, 2018, the Company entered into the Second Amended and Restated Credit Agreement (the “Second Amended and Restated Credit Agreement”) among the Company, certain of its subsidiaries as borrowers (together with the Company, the “Borrowers”), the lenders from time to time party thereto, ~~and~~ Wells Fargo Capital Finance, LLC as the administrative agent, joint lead arranger and joint bookrunner (the “Revolver Agent”), and Citizens Business Capital, a division of Citizens Asset Finance, Inc., as syndication agent, joint lead arranger and joint bookrunner, which amended and restated the Company’s existing amended and restated revolving credit agreement, dated as of May 8, 2012.

On September 28, 2020, the Company entered into the First Amendment to Second Amended and Restated Credit Agreement (the ~~“Amendment,” and together with the Second Amended and Restated Credit Agreement, the “Revolving Credit Agreement” or “Revolving Facility”~~“First Amendment”) among the Company, certain of its subsidiaries party thereto, the lenders party thereto, and the Revolver Agent. The First Amendment primarily made conforming changes to the provisions in the Revolving Credit Agreement to reflect modifications made under the ~~new term~~Term Loan Credit Agreement, dated September 20, 2020, among the Company, the lenders from time to time parties thereto, and Wells Fargo Bank, National Association, as the administrative agent, providing for a secured loan facility of $150 million (the “New Term Loan Credit Agreement”).

On September 28, 2021, the Company entered into an Increase Agreement Regarding Incremental Revolver Commitments and Second Amendment to Second Amended and Restated Credit Agreement (the “Second Amendment”, and together with the First Amendment and Second Amended and Restated Credit Agreement, the “Revolving Credit Agreement” or “Revolving Facility”), which exercised an option under the Revolving Credit Agreement to increase the total revolving credit ~~agreement,~~commitments by $50 million from $175 million to $225 million. The Revolving Credit Agreement continues to include an increase option, which ~~is described~~would allow the Company, subject to certain terms and conditions set forth in ~~more detail below.~~the Revolving Credit Agreement (including the approval of the lenders providing the applicable increase), to increase the total revolving credit commitments under the Revolving Credit Agreement by a further $50 million to a maximum of $275 million.

The Revolving Credit Agreement is guaranteed by certain subsidiaries of the Company (the “Revolver Guarantors”) and is secured by (i) first priority security interests (subject only to customary permitted liens and certain other permitted liens) in substantially all personal property of the Borrowers and the Revolver Guarantors, consisting of accounts receivable, inventory, cash, deposit and securities accounts and any cash or other assets in such accounts and, to the extent evidencing or otherwise related to such property, all general intangibles, licenses, intercompany debt, letter of credit rights, commercial tort claims, chattel paper, instruments, supporting obligations, documents and payment intangibles (collectively, the “Revolver Priority Collateral”), and (ii) second-priority liens on and security interests in customary permitted liens and certain other permitted liens (A) equity interests of each direct subsidiary held by the Borrowers and each Revolver Guarantor (subject to customary limitations in the case of the equity of foreign subsidiaries), and (B) substantially all other tangible and intangible assets of the Borrowers and the Revolver Guarantors including equipment, general intangibles, intercompany notes, insurance policies, investment property and intellectual property (in each case, except to the extent constituting Revolver Priority Collateral), but excluding real property ~~(the~~(collectively, including certain material owned real property that does not constitute collateral under the Revolving Credit Agreement, the “Term Priority Collateral”).

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The Revolving Credit Agreement has a scheduled maturity date of December 21, ~~2023, subject to certain springing maturity events.~~2023.

Under the Revolving Credit Agreement, the lenders agree to make available to the Company a $175 million revolving credit facility. The Company has the option to increase the total commitment under the facility to up to $275 million, subject to certain conditions. Subject to availability, the Revolving Credit Agreement provides for a letter of credit subfacility in an amount not in excess of $15 million, and allows for swingline loans in an amount not in excess of $17.5 million. Outstanding borrowings under the Revolving Credit Agreement ~~will~~ bear interest at an annual rate, at the Borrowers’ election, equal to (i) London Interbank Offer Rate (“LIBOR”) plus a margin ranging from 1.25% to 1.75% or (ii) a base rate plus a margin ranging from 0.25% to 0.75%, in each case depending upon the monthly average excess availability under the ~~revolving loan facility.~~Revolving Loan Facility. The Borrowers are required to pay a monthly unused line fee equal to 0.20% times the average daily unused availability along with other customary fees and expenses thereunder.

The Revolving Credit Agreement contains ~~various~~ customary ~~covenants.~~covenants limiting the ability of the Company and certain of its affiliates to, among other things, pay cash dividends, incur debt or liens, redeem or repurchase stock, enter into transactions with affiliates, merge, dissolve, repay subordinated indebtedness, make investments and dispose of assets. In addition, the Company will be required to maintain a minimum fixed charge coverage ratio of not less than 1.0 to 1.0 as of the end of any period of 12 fiscal months when excess availability under the Revolving Credit Agreement is less than 10% of the total revolving commitment. The Company was in compliance with all covenants as of ~~June 30, 2021.~~March 31, 2022.

~~During the three-month period ended June 30, 2021 and as of June 30, 2021, there were 0 amounts outstanding under the Revolving Facility. The Company paid 0 interest~~If availability under the Revolving Credit Agreement ~~during~~is less than 15% of the ~~three-~~total revolving commitment or if there exists an event of default, amounts in any of the Borrowers’ and ~~six-month periods ended June 30, 2021.~~

~~During~~ the three-month period ended March 31, 2020, the Company drew $45.0 million under the Revolving Credit Agreement as a precautionary measure in response to the uncertainty caused by the COVID-19 pandemic. During the second quarter of 2020, the Company repaid the $45.0 million in outstanding borrowings and as of June 30, 2020 there were 0 amounts outstanding under the Revolving Credit Facility. For the three- and six-month periods ended June 30, 2020, the Company paid approximately $0.2 million of interest under the Revolving Credit Agreement.

The Company’s liquidity position, defined as cash and restricted cash on hand and available borrowing capacity on the Revolving Facility, amounted to $304.3 million as of June 30, 2021 and $384.0 million as of December 31, 2020.

~~New and Old Term Loan Credit Agreements~~

~~On September 28, 2020, the Company entered~~Revolver Guarantors’ deposit accounts (other than certain excluded accounts) will be transferred daily into a Term Loan Credit Agreement (the “New Term Loan Credit Agreement”) among the Company, the lenders from time to time party thereto, and Wells Fargo Bank, National Association, as the administrative agent (the “Term Agent”), providing for a senior secured term loan facility of $150 million that was advanced at closing. The New Term Loan Credit Agreement refinanced and replaced that certain Term Loan Credit Agreement, dated as of May 8, 2012 (as amended, restated, supplemented or otherwise modified from time to time, the “Old Term Loan Credit Agreement”), among the Company, the lenders party thereto and Morgan Stanley Senior Funding, Inc., as the administrative agent.

The New Term Loan Credit Agreement is guaranteed by certain subsidiaries of the Company (the “Term Loan Guarantors”) and is secured by (i) second priority security interests (subject only to the liens securing the Revolving Credit Agreement, customary permitted liens, and certain other permitted liens) in substantially all personal property of the Company and the Term Loan Guarantors, consisting of accounts receivable, inventory, cash, deposit and securities accounts and any cash or other assets in such accounts and, to the extent evidencing or otherwise related to such property, all general intangibles, licenses, intercompany debt, letter of credit rights, commercial tort claims, chattel paper, instruments, supporting obligations, documents and payment intangibles, and (ii) first priority security interests (subject only to customary permitted liens and certain other permitted liens) in (A) subject to certain limitations, equity interests of each direct subsidiaryblocked account held by the Company and each Term Loan Guarantor, and (B) substantially all other tangible and intangible assets of the Company and the Term Loan Guarantors, including equipment, general intangibles, intercompany notes, investment property and intellectual property, but excluding real property. The respective priorities of the security interests securing the New Term Loan Credit Agreement and the Revolving Credit Agreement are governed by an Intercreditor Agreement, dated as of September 28, 2020, between the TermRevolver Agent and applied to reduce the ~~Revolver Agent (the “Intercreditor Agreement”). The New Term Loan Credit Agreement has a scheduled maturity date of September 28, 2027. The loans~~outstanding amounts under the ~~New Term Loan Credit Agreement amortize in quarterly installments equal to 0.25% of the original principal amount of the term loans issued thereunder, with the balance payable at maturity.~~

Outstanding borrowings under the New Term Loan Credit Agreement bear interest at a rate, at the Company’s election, equal to (i) LIBOR (subject to a floor of 0.75% per annum) plus a margin of 3.25% per annum or (ii) a base rate plus a margin of 2.25% per annum.

The New Term Loan Credit Agreement contains customary covenants limiting the ability of the Company and its subsidiaries to, among other things, pay cash dividends, incur debt or liens, redeem or repurchase stock, enter into transactions with affiliates,facility.

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~~merge, dissolve, pay off subordinated indebtedness, make investments and dispose of assets. As of June 30, 2021, the Company was in compliance with all covenants.~~

~~Subject to the terms of the Intercreditor Agreement, if~~If the covenants under the ~~New Term Loan~~Revolving Credit Agreement are breached, the lenders may, subject to various customary cure rights, require the immediate payment of all amounts outstanding and foreclose on collateral. Other customary events of default in the ~~New Term Loan~~Revolving Credit Agreement include, without limitation, failure to pay obligations when due, initiation of insolvency proceedings, defaults on certain other indebtedness, and the incurrence of certain judgments that are not stayed, satisfied, bonded or discharged within 6030 days.

During the three-month period ended March 31, 2022, the Company borrowed $56.0 million under the Revolving Credit Agreement. As of ~~June 30,~~March 31, 2022, there was $89.0 million outstanding under the Revolving Credit Facility. Interest expense under the Revolving Credit Agreement for the three-month period ended March 31, 2022, was approximately $0.3 million. During the three-month period ended March 31, 2021, and as of March 31, 2021, there were no amounts outstanding under the Revolving Facility. The Company paid no interest under the Revolving Credit Agreement during the three-month period ended March 31, 2021.

The Company’s liquidity position, defined as cash on hand and available borrowing capacity on the Revolving Facility, amounted to $203.1 million as of March 31, 2022 and $258.0 million as of December 31, 2021.

During the fourth quarter of 2021, the Company drew $50.0 million under the Revolving Credit Agreement, a portion of which was used along with the proceeds of the New Senior Notes to fund the redemption in full of the Senior Notes due 2025, to repay in full the $108.8 million of outstanding borrowings under the New Term Loan Credit Agreement, and to pay all related fees and expenses of the New Senior Notes.

New Term Loan Credit Agreement

As of March 31, 2021, the Company had ~~$108.8~~$138.8 million outstanding under the New Term Loan Credit Agreement (which was repaid in full during the fourth quarter of 2021), none of which ~~NaN~~ was classified as current on the Company’s Condensed Consolidated Balance Sheets. For the ~~three- and six-month periods~~three-month period ended ~~June 30,~~March 31, 2021, ~~the Company paid interest of $1.3 million and $2.7 million, respectively,~~ under the New Term Loan Credit Agreement. In addition, during the three months ended June 30, 2021, the Company made principal payments totaling $30.0 million and recognized loss on debt extinguishment charges of approximately $0.5 million. The extinguishment charges are included in ~~Other, net~~ ~~in the Condensed Consolidated Statements of Operations.~~

~~For the three- and six-month periods ended June 30, 2020, under the Old~~ Term Loan Credit Agreement the Company paid interest of ~~$1.0 million and $2.4~~$1.4 million and made 0no principal ~~payments during either period.~~payments.

For ~~each~~the three-month period ended ~~June 30,~~March 31, 2021, ~~and 2020,~~ the Company incurred charges of less than $0.1 million ~~and $0.1 million for each six-month period ended June 30, 2021 and 2020,~~ for amortization of fees and original issuance ~~discount. Amortization of fees and original issuance~~ discount, which are included in Interest expense in the Condensed Consolidated Statements of Operations.

8. FINANCIAL DERIVATIVE INSTRUMENTS

Commodity Pricing Risk

As of ~~June 30, 2021,~~March 31, 2022, the Company was party to commodity swap contracts for specific commodities with notional amounts of approximately ~~$110.8~~$131.7 million. The Company uses commodity swap contracts to mitigate the risks associated with fluctuations in commodity prices impacting its cash flows related to inventory purchases from suppliers. The Company does not hedge all commodity price risk.

At inception, the Company designated the commodity swap contracts as cash flow hedges. The contracts mature at specified monthly settlement dates and will be recognized into earnings through January ~~2022.~~2023. The effective portion of the hedging transaction is recognized in Accumulated Other Comprehensive Income (“AOCI”) and transferred to earnings when the forecasted hedged transaction takes place or when the forecasted hedged transaction is no longer probable to occur.

~~Table of Contents~~F

~~Financial~~inancial Statement Presentation

As of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the fair value carrying amount of the Company’s derivative instruments were recorded as follows (in thousands):


			Asset / (Liability) Derivatives						Asset / (Liability) Derivatives
		Balance Sheet Caption	June 30, 2021		December 31, 2020			Balance Sheet Caption	March 31, 2022		December 31, 2021
Derivatives designated as hedging instruments	Derivatives designated as hedging instruments						Derivatives designated as hedging instruments
Commodity swap contracts	Commodity swap contracts	Prepaid expenses and other	$	39,621	$	13,750	Commodity swap contracts	Prepaid expenses and other	$	27,067	$	7,963
Commodity swap contracts	Commodity swap contracts	Accounts payable and Other accrued liabilities	(1,408)		(366)		Commodity swap contracts	Accounts payable and Other accrued liabilities	(4,353)		(5,121)
Total derivatives designated as hedging instruments	Total derivatives designated as hedging instruments		$	38,213	$	13,384	Total derivatives designated as hedging instruments		$	22,714	$	2,842

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The following table summarizes the gain or loss recognized in AOCI as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 and the amounts reclassified from AOCI into earnings for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ (in thousands):


		Amount of Gain Recognized in AOCI on Derivatives (Effective Portion, net of tax)					Location of Gain (Loss) Reclassified from AOCI into Earnings (Effective Portion)		Amount of Gain (Loss) Reclassified from AOCI into Earnings										Amount of Gain Recognized in AOCI on Derivatives (Effective Portion, net of tax)					Location of Gain (Loss) Reclassified from AOCI into Earnings (Effective Portion)		Amount of Gain (Loss) Reclassified from AOCI into Earnings

						June 30, 2021			December 31, 2020			Three Months Ended June 30,					Six Months Ended June 30,						March 31, 2022			December 31, 2021			Three Months Ended March 31,
				2021				Location of Gain (Loss) Reclassified from AOCI into Earnings (Effective Portion)		2020			2021		2020						2022				Location of Gain (Loss) Reclassified from AOCI into Earnings (Effective Portion)		2021
Derivatives instruments	Derivatives instruments																	Derivatives instruments
Commodity swap contracts	Commodity swap contracts	$	32,976	$	9,815		Cost of sales			$	(2,398)		$	9,410	$	(4,183)	Commodity swap contracts		$	16,433	$	2,848		Cost of sales			$	1,035

Over the next 12 months, the Company expects to reclassify approximately ~~$44.1~~$21.9 million of pretax deferred gains, related to the commodity swap contracts, from AOCI to cost of sales as inventory purchases are settled.

9. LEASES

The Company records a right-of-use ("ROU") asset and lease liability for substantially all leases for which it is a lessee, in accordance with Accounting Standards Codification (“ASC”) 842. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company has no significant lease agreements in place for which the Company is a lessor. At inception of a contract, the Company considers all relevant facts and circumstances to assess whether or not the contract represents a lease by determining whether or not the contract conveys the right to control the use of an identified asset, either explicit or implicit, for a period of time in exchange for consideration.

The Company leases certain industrial spaces, office spaces, land, and equipment. Some leases include one or more options to renew, with renewal terms that can extend the lease term from generally one to 5 years. The exercise of lease renewal options is at the Company’s sole discretion, and are included in the lease term only to the extent such renewal options are reasonably certain of being exercised at lease commencement. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. During the three months ended ~~June 30, 2021,~~March 31, 2022, leased assets obtained in exchange for new operating lease liabilities totaled approximately ~~$1.9~~$1.3 million. During the three months ended ~~June 30, 2020,~~March 31, 2021, leased assets obtained in exchange for new operating lease liabilities ~~totaled approximately $0.6 million. Obligations related to operating leases that the Company has executed but have not yet commenced~~ were ~~insignificant as~~insignificant. As of ~~June 30, 2021. Subsequent to June 30, 2021,~~March 31, 2022, obligations related to operating leases that the Company has executed but have not yet commenced totaled approximately ~~$2.5~~$1.4 million on a non-discounted basis, which the Company generally expects to be recognized over the next 5five years.

~~Table~~During the three months ended March 31, 2022, the Company entered into sale-leaseback-sublease transactions. Amounts related to these transactions during the first quarter of ~~Contents~~

2022 were insignificant. In addition, certain of the transactions occurred with a related party—such transactions were at market value and arm’s length.

Leased assets and liabilities included within the Condensed Consolidated Balance Sheets consist of the following (in thousands):


	Classification	March 31, 2022		December 31, 2021
Right-of-Use Assets
Operating	Other assets	$	11,754	$	11,379


Liabilities
Current
Operating	Other accrued liabilities	$	3,746	$	3,507
Finance	Current portion of finance lease obligations	—		59
Noncurrent
Operating	Non-current liabilities	8,008		7,872
Finance	Finance lease obligations	—		—
Total lease liabilities		$	11,754	$	11,438

Classification June 30, 2021 December 31, 2020
Right-of-Use Assets
Operating Other assets $ 10,533 $ 10,842
Finance Property, plant and equipment, net of depreciation 2,730 2,802
Total leased ROU assets $ 13,263 $ 13,644
Liabilities
Current
Operating Other accrued liabilities $ 3,585 $ 4,117
Finance Current portion of finance lease obligations 206 348
Noncurrent
Operating Non-current liabilities 7,222 6,967
Finance Finance lease obligations 0 30
Total lease liabilities $ 11,013 $ 11,462

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Lease costs included in the Condensed Consolidated Statements of Operations consist of the following (in thousands):

Classification Three Months Ended
June 30, 2021 Three Months Ended
June 30, 2020
Operating lease cost Cost of sales, selling expenses and general and administrative expense $ 1,229 $ 1,229
Finance lease cost
Amortization of ROU leased assets Depreciation and amortization within Cost of sales 36 36
Interest on lease liabilities Interest expense 7 12
Net lease cost $ 1,272 $ 1,277


		Classification	Six Months Ended June 30, 2021		Six Months Ended June 30, 2020			Classification	Three Months Ended March 31, 2022		Three Months Ended March 31, 2021
Operating lease cost	Operating lease cost	Cost of sales, selling expenses and general and administrative expense	$	2,484	$	2,627	Operating lease cost	Cost of sales, selling expenses and general and administrative expense	$	1,109	$	1,255
Finance lease cost	Finance lease cost						Finance lease cost
Amortization of ROU leased assets	Amortization of ROU leased assets	Depreciation and amortization within Cost of sales	72		72		Amortization of ROU leased assets	Depreciation and amortization within Cost of sales	36		36
Interest on lease liabilities	Interest on lease liabilities	Interest expense	15		33		Interest on lease liabilities	Interest expense	1		8
Net lease cost	Net lease cost		$	2,571	$	2,732	Net lease cost		$	1,146	$	1,299

Maturity of the Company’s lease liabilities as of ~~June 30, 2021~~March 31, 2022 is as follows (in thousands):

Operating Leases Finance Leases Total
2021 (remainder) $ 2,281 $ 180 $ 2,461
2022 3,342 30 3,372
2023 2,516 0 2,516
2024 1,397 0 1,397
2025 799 0 799
Thereafter 1,719 0 1,719
Total lease payments $ 12,054 $ 210 $ 12,264
Less: interest 1,247 4
Present value of lease payments $ 10,807 $ 206

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	Operating Leases		Finance Leases		Total
2022 (remainder)	$	3,248	$	—	$	3,248
2023	3,600		—		3,600
2024	2,485		—		2,485
2025	1,476		—		1,476
2026	990		—		990
Thereafter	1,173		—		1,173
Total lease payments	$	12,972	$	—	$	12,972
Less: interest	1,218		—
Present value of lease payments	$	11,754	$	—

As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Remaining lease term and discount rates are as follows:


		June 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Weighted average remaining lease term (years)	Weighted average remaining lease term (years)					Weighted average remaining lease term (years)
Operating leases	Operating leases	4.2		3.6		Operating leases	4.0		4.3
Finance leases	Finance leases	0.6		1.1		Finance leases	0.0		0.1
Weighted average discount rate	Weighted average discount rate					Weighted average discount rate
Operating leases	Operating leases	5.09	%	5.07	%	Operating leases	5.10	%	5.12	%
Finance leases	Finance leases	6.16	%	6.16	%	Finance leases	—	%	6.16	%

Lease costs included in the Condensed Consolidated Statements of Cash Flows are as follows (in thousands):


		Six Months Ended June 30, 2021		Six Months Ended June 30, 2020			Three Months Ended March 31, 2022		Three Months Ended March 31, 2021
Cash paid for amounts included in the measurement of lease liabilities	Cash paid for amounts included in the measurement of lease liabilities					Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	Operating cash flows from operating leases	$	2,450	$	2,604	Operating cash flows from operating leases	$	1,120	$	1,258
Operating cash flows from finance leases	Operating cash flows from finance leases	$	9	$	19	Operating cash flows from finance leases	$	1	$	5
Financing cash flows from finance leases	Financing cash flows from finance leases	$	172	$	162	Financing cash flows from finance leases	$	59	$	85

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10. OTHER ACCRUED LIABILITIES

The following table presents the major components of Other accrued liabilities (in thousands):


		June 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Warranty	Warranty	$	20,985	$	20,570	Warranty	$	22,144	$	22,045
Chassis converter pool agreements	Chassis converter pool agreements	14,661		17,767		Chassis converter pool agreements	4,923		18,185
Payroll and related taxes	Payroll and related taxes	17,009		16,163		Payroll and related taxes	15,550		15,679
Customer deposits	Customer deposits	19,752		37,792		Customer deposits	21,972		17,646
Self-insurance	Self-insurance	14,198		12,086		Self-insurance	11,158		11,152
Accrued interest	Accrued interest	4,366		4,368		Accrued interest	8,799		4,288
Operating lease obligations	Operating lease obligations	3,585		4,117		Operating lease obligations	3,746		3,507
Accrued taxes	Accrued taxes	5,583		4,790		Accrued taxes	13,762		8,425
All other	All other	10,827		13,327		All other	11,963		14,389
		$	110,966	$	130,980		$	114,017	$	115,316

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


		2021		2020			2022		2021
Balance as of January 1	Balance as of January 1	$	20,570	$	22,575	Balance as of January 1	$	22,045	$	20,570
Provision for warranties issued in current year	Provision for warranties issued in current year	2,652		2,302		Provision for warranties issued in current year	946		1,397

Payments	Payments	(2,237)		(2,944)		Payments	(847)		(1,309)
Balance as of June 30		$	20,985	$	21,933
Balance as of March 31						Balance as of March 31	$	22,144	$	20,658

The Company offers a limited warranty for its products with a coverage period that ranges between one and 5 years, except that the coverage period for DuraPlate® trailer panels is 10 years. The Company passes through component manufacturers’ warranties to our customers. The Company’s policy is to accrue the estimated cost of warranty coverage at the time of the sale.

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11. FAIR VALUE MEASUREMENTS

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

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

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

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

Recurring Fair Value Measurements

The Company maintains a non-qualified deferred compensation plan which is offered to senior management and other key employees. The amount owed to participants is an unfunded and unsecured general obligation of the Company. Participants are offered various investment options with which to invest the amount owed to them, and the plan administrator maintains a record of the liability owed to participants by investment. To minimize the impact of the change in market value of this liability, the Company has elected to purchase a separate portfolio of investments through the plan administrator similar to those chosen by the participant.

The investments purchased by the Company include mutual funds, which are classified as Level 1, and life-insurance contracts valued based on the performance of underlying mutual funds, which are classified as Level 2. Additionally, upon the Company’s acquisition of Supreme in 2017, the Company acquired a pool of investments made by a wholly owned captive insurance subsidiary. These investments are comprised of mutual funds, which are classified as Level 1.

The fair value of the Company’s derivatives is estimated with a market approach using third-party pricing services, which have been corroborated with data from active markets or broker ~~quotes.~~quotes, and are classified as Level 2.

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Fair value measurements and the fair value hierarchy level for the Company’s assets and liabilities measured at fair value on a recurring basis as of March 31, 2022 and December 31, 2021 are shown below (in thousands):


		Frequency	Asset / (Liability)	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)		Frequency	Asset / (Liability)		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
June 30, 2021
March 31, 2022							March 31, 2022
Commodity swap contracts	Commodity swap contracts	Recurring	38,213	0	38,213	0	Commodity swap contracts	Recurring	$	22,714	$	—	$	22,714	$	—
Mutual funds	Mutual funds	Recurring	7,134	7,134	0	0	Mutual funds	Recurring	$	6,097	$	6,097	$	—	$	—
Life-insurance contracts	Life-insurance contracts	Recurring	18,535	0	18,535	0	Life-insurance contracts	Recurring	$	17,391	$	—	$	17,391	$	—
December 31, 2020
December 31, 2021							December 31, 2021
Commodity swap contracts	Commodity swap contracts	Recurring	13,384	0	13,384	0	Commodity swap contracts	Recurring	$	2,842	$	—	$	2,842	$	—
Mutual funds	Mutual funds	Recurring	5,331	5,331	0	0	Mutual funds	Recurring	$	6,183	$	6,183	$	—	$	—
Life-insurance contracts	Life-insurance contracts	Recurring	16,930	0	16,930	0	Life-insurance contracts	Recurring	$	18,670	$	—	$	18,670	$	—

Estimated Fair Value of Debt

The estimated fair value of debt at ~~June 30, 2021~~March 31, 2022 consists primarily of the Senior Notes due ~~2025~~2028 and borrowings under the ~~New Term Loan~~Revolving Credit ~~Agreement.~~Agreement (see Note 7). The fair value of the Senior Notes due ~~2025 and New Term Loan Credit Agreement~~2028 are based upon third party pricing sources, which generally do not represent daily market activity or represent data obtained from an exchange, and are classified as Level 2. The interest rates on the Company’s borrowings under the Revolving Facility are adjusted regularly to reflect current market rates and thus ~~when any amounts are outstanding~~ carrying value approximates fair value for ~~these~~any borrowings.

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The Company’s carrying and estimated fair value of debt at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 were as follows (in thousands):

June 30, 2021 December 31, 2020
Carrying
Value Fair Value Carrying
Value Fair Value
Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Instrument
Senior Notes due 2025 $ 311,695 $ 0 $ 319,098 $ 0 $ 311,357 $ 0 $ 319,140 $ 0
New Term Loan Credit Agreement 107,205 0 107,339 0 136,622 0 136,280 0
$ 418,900 $ 0 $ 426,437 $ 0 $ 447,979 $ 0 $ 455,420 $ 0


	March 31, 2022								December 31, 2021
	Carrying Value		Fair Value						Carrying Value		Fair Value
			Level 1		Level 2		Level 3				Level 1		Level 2		Level 3
Instrument
Senior Notes due 2028	$	395,353	$	—	$	357,795	$	—	$	395,280	$	—	$	399,727	$	—
Revolving Facility	89,001		—		89,001		—		33,035		—		33,035		—

	$	484,354	$	—	$	446,796	$	—	$	428,315	$	—	$	432,762	$	—

The fair value of debt is based on current public market prices for disclosure purposes only. Unrealized gains or losses are not recognized in the financial statements as long-term debt is presented at carrying value, net of unamortized premium or discount and unamortized deferred financing ~~costs.~~costs in the condensed consolidated financial statements.

12. COMMITMENTS AND CONTINGENCIES

As of ~~June 30, 2021,~~March 31, 2022, the Company was named as a defendant or was otherwise involved in numerous legal proceedings and governmental examinations, in connection with the conduct of its business activities, in various jurisdictions, both in the United States and internationally. On the basis of information currently available to it, management does not believe that existing proceedings and investigations will have a material impact on our consolidated financial condition or liquidity if determined in a manner adverse to the Company. However, such matters are unpredictable, and we could incur judgments or enter into settlements for current or future claims that could materially and adversely affect our financial statements. Costs associated with the litigation and settlements of legal matters are reported within General and administrative expenses in the Condensed Consolidated Statements of Operations.

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Environmental Disputes

In August 2014, the Company received notice as a potentially responsible party (“PRP”) by the South Carolina Department of Health and Environmental Control (the “DHEC”) pertaining to the Philip Services Site located in Rock Hill, South Carolina pursuant to the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) and corresponding South Carolina statutes. PRPs include parties identified through manifest records as having contributed to deliveries of hazardous substances to the Philip Services Site between 1979 and 1999. The DHEC’s allegation that the Company was a PRP arises out of four manifest entries in 1989 under the name of a company unaffiliated with Wabash National Corporation (or any of its former or current subsidiaries) that purport to be delivering a de minimis amount of hazardous waste to the Philip Services Site “c/o Wabash National Corporation.” As such, the Philip Services Site PRP Group (the “PRP Group”) notified Wabash in August 2014 that it was offering the Company the opportunity to resolve any liabilities associated with the Philip Services Site by entering into a Cash Out and Reopener Settlement Agreement (the “Settlement Agreement”) with the PRP Group, as well as a Consent Decree with the DHEC. The Company has accepted the offer from the PRP Group to enter into the Settlement Agreement and Consent Decree, while reserving its rights to contest its liability for any deliveries of hazardous materials to the Philips Services Site. The requested settlement payment is immaterial to the Company’s financial conditions and results of operations, and as a result, if the Settlement Agreement and Consent Decree are finalized, the payment to be made by the Company thereunder is not expected to have a material adverse effect on the Company’s financial condition or results of operations.

On November 13, 2019, the Company received a notice that it was considered one of several PRPs by the Indiana Department of Environmental Management (“IDEM”) under CERCLA and state law related to substances found in soil and groundwater at a property located at 817 South Earl Avenue, Lafayette, Indiana (the “Site”). The Company has never owned or operated the Site, but the Site is near certain of the Company’s owned properties. The Company has agreed to implement a limited work plan to further investigate the source of the contamination at the Site and have worked with IDEM and other PRPs to finalize the terms of the work plan. The Company submitted its initial site investigation report to IDEM during the third quarter of 2020, indicating that the data collected by the Company’s consultant confirmed that the Company’s properties are not the source of contamination at the Site. IDEM issued to the PRPs a request for a Further Site Investigation (“FSI”) work plan, and with IDEM’s permission the Company submitted a Work Plan Addendum on December 17, 2020 for limited additional groundwater sampling work in lieu of a full FSI work plan. IDEM approved the Work Plan Addendum and the additional work was ~~conducted~~completed in ~~March~~ 2021. The ~~results were analyzed, and~~Company submitted to IDEM the final, written report in December 2021, which states that its position is that the Company ~~submitted~~is not a ~~follow-up Work Plan Addendum to IDEM on June 8, 2021.~~responsible party and has no liability for any contamination. As of ~~June 30, 2021,~~March 31, 2022, based on the information available, the Company does not expect this matter to have a material adverse effect on its financial condition or results of operations.

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Chassis Converter Pool Agreements

The Company, through Supreme, obtains most vehicle chassis for its specialized vehicle products directly from the chassis manufacturers under converter pool agreements. Chassis are obtained from the manufacturers based on orders from customers, and in some cases, for unallocated orders. The agreements generally state that the manufacturer will provide a supply of chassis to be maintained at the Company’s facilities with the condition that we will store such chassis and will not move, sell, or otherwise dispose of such chassis except under the terms of the agreement. In addition, the manufacturer typically retains the sole authority to authorize commencement of work on the chassis and to make certain other decisions with respect to the chassis including the terms and pricing of sales of the chassis to the manufacturer’s dealers. The manufacturer also does not transfer the certificate of origin to the Company nor permit the Company to sell or transfer the chassis to anyone other than the manufacturer (for ultimate resale to a dealer). Although the Company is party to related finance agreements with manufacturers, the Company has not historically settled, nor expects to in the future settle, any related obligations in cash. Instead, the obligation is settled by the manufacturer upon reassignment of the chassis to an accepted dealer, and the dealer is invoiced for the chassis by the manufacturer. Accordingly, as of ~~June 30, 2021,~~March 31, 2022, the Company’s outstanding chassis converter pool with the manufacturer totaled ~~$14.7~~$4.9 million and the Company has included this financing agreement on the Company’s Condensed Consolidated Balance Sheets within Prepaid expenses and other and Other accrued liabilities. All other chassis programs through its Supreme subsidiary are handled as consigned inventory belonging to the manufacturer and totaled approximately ~~$2.6~~$0.5 million. Under these agreements, if the chassis is not delivered to a customer within a specified time frame, the Company is required to pay a finance or storage charge on the chassis. Additionally, the Company receives finance support funds from manufacturers when the chassis are assigned into the Company’s chassis pool. Typically, chassis are converted and delivered to customers within 90 days of the receipt of the chassis by the Company.

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13. NET INCOME ~~(LOSS)~~ PER SHARE

Basic earnings per share is calculated based on the weighted average number of common shares outstanding during the period, including vested shares deferred under our non-qualified deferred compensation plan. Diluted earnings per share is determined based on the weighted average number of common shares outstanding during the period combined with the incremental average common shares that would have been outstanding assuming the conversion of all potentially dilutive common shares into common shares as of the earliest date possible. The calculation of basic and diluted net income ~~(loss)~~ per share is determined using net income ~~(loss)~~ applicable to common stockholders as the numerator and the number of shares included in the denominator as shown below (in thousands, except per share amounts). ~~Due to the net loss applicable to common stockholders for the three and six months ended June 30, 2020, 0 securities had a dilutive impact for these periods.~~

Three Months Ended
June 30, Six Months Ended
June 30,
2021 2020 2021 2020
Basic net income (loss) per share:
Net income (loss) applicable to common stockholders $ 12,252 $ (146) $ 15,469 $ (106,793)
Weighted average common shares outstanding 51,272 52,874 51,697 53,015
Basic net income (loss) per share $ 0.24 $ 0.00 $ 0.30 $ (2.01)
Diluted net income (loss) per share:
Net income (loss) applicable to common stockholders $ 12,252 $ (146) $ 15,469 $ (106,793)
Weighted average common shares outstanding 51,272 52,874 51,697 53,015
Dilutive stock options and restricted stock 717 0 775 0
Diluted weighted average common shares outstanding 51,989 52,874 52,472 53,015
Diluted net income (loss) per share $ 0.24 $ 0.00 $ 0.29 $ (2.01)


	Three Months Ended March 31,
	2022		2021
Basic net income per share:
Net income applicable to common stockholders	$	12,074	$	3,217
Weighted average common shares outstanding	49,004		52,126
Basic net income per share	$	0.25	$	0.06

Diluted net income per share:
Net income applicable to common stockholders	$	12,074	$	3,217

Weighted average common shares outstanding	49,004		52,126
Dilutive stock options and restricted stock	726		918
Diluted weighted average common shares outstanding	49,730		53,044
Diluted net income per share	$	0.24	$	0.06

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14. STOCK-BASED COMPENSATION

The Company recognizes all share-based payments based upon their grant date fair value. The Company grants restricted stock units subject to specific service, performance, and/or market conditions. The Company’s policy is to recognize expense for awards that have service conditions only subject to graded vesting using the straight-line attribution method. The fair value of service and performance-based units is based on the market price of a share of underlying common stock at the date of grant. The fair values of the awards that contain market conditions are estimated using a Monte Carlo simulation approach in a risk-neutral framework to model future stock price movements based upon historical volatility, risk-free rates of return, and correlation matrix. The amount of compensation costs related to restricted stock units and performance units not yet recognized was ~~$15.3~~$17.9 million at ~~June 30, 2021,~~March 31, 2022, for which the expense will be recognized through ~~2024.~~2025.

15. STOCKHOLDERS’ EQUITY

Share Repurchase Program

In ~~November 2018,~~August 2021, the Company announced that the Board of Directors approved the repurchase of an additional ~~$100~~$150 million in shares of common stock over a three-year period. This authorization was an increase to the previous $100 million repurchase programs approved in November 2018, February 2017, and February 2016. The repurchase program is set to expire ~~on February 28, 2022.~~in August 2024. Stock repurchases under this program may be made in the open market or in private transactions at times and in amounts determined by the Company. As of ~~June 30, 2021, $11.4~~March 31, 2022, $131.4 million remained available under the program.

Common and Preferred Stock

The Board of Directors has the authority to issue common and unclassed preferred stock of up to 200 million shares and 25 million shares, respectively, with par value of $0.01 per share, as well as to fix dividends, voting and conversion rights, redemption provisions, liquidation preferences, and other rights and restrictions.

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Accumulated Other Comprehensive Income (Loss)

Changes in AOCI by component, net of tax, for the ~~six~~three months ended ~~June 30,~~March 31, 2022 are summarized as follows (in thousands):


	Foreign Currency Translation		Derivative Instruments		Total
Balances at December 31, 2021	$	(1,989)	$	2,848	$	859
Net unrealized gains (losses) arising during the period(a)	243		17,555		17,798
Less: Net realized gains (losses) reclassified to net income(b)	—		3,970		3,970
Net change during the period	243		13,585		13,828
Balances at March 31, 2022	$	(1,746)	$	16,433	$	14,687

—————————

(a) Derivative instruments net of $5.9 million of tax liability for the three months ended March 31, 2022.

(b) Derivative instruments net of $1.3 million of tax liability for the three months ended March 31, 2022.

Changes in AOCI by component, net of tax, for the three months ended March 31, 2021 are summarized as follows (in thousands):


		Foreign Currency Translation		Derivative Instruments		Total			Foreign Currency Translation		Derivative Instruments		Total
Balances at December 31, 2020	Balances at December 31, 2020	$	(2,182)	$	9,815	$	7,633	Balances at December 31, 2020	$	(2,182)	$	9,815	$	7,633
Net unrealized gains (losses) arising during the period~~(a)~~(c)	Net unrealized gains (losses) arising during the period~~(a)~~(c)	(303)		15,305		15,002		Net unrealized gains (losses) arising during the period~~(a)~~(c)	(303)		15,305		15,002
Less: Net realized gains (losses) reclassified to net income(b)		0		775		775
Less: Net realized gains (losses) reclassified to net loss(d)								Less: Net realized gains (losses) reclassified to net loss(d)	—		775		775
Net change during the period	Net change during the period	(303)		14,530		14,227		Net change during the period	(303)		14,530		14,227
Balances at March 31, 2021	Balances at March 31, 2021	(2,485)		24,345		21,860		Balances at March 31, 2021	$	(2,485)	$	24,345	$	21,860
Net unrealized gains (losses) arising during the period(c)		667		14,895		15,562
Less: Net realized gains (losses) reclassified to net income(d)		0		6,264		6,264
Net change during the period		667		8,631		9,298
Balances at June 30, 2021		(1,818)		32,976		31,158

—————————

~~(a)~~(c) Derivative instruments net of $5.2 million of tax liability for the three months ended March 31, 2021.

~~(b)~~(d) Derivative instruments net of $0.3 million of tax liability for the three months ended March 31, 2021.

~~(c)~~ ~~Derivative instruments net of $5.0 million of tax liability for the three months ended June 30, 2021.~~

~~(d)~~ ~~Derivative instruments net of $2.1 million of tax liability for the three months ended June 30, 2021.~~

~~Table of Contents~~

~~Changes in AOCI by component, net of tax, for the six months ended June 30, 2020 are summarized as follows (in thousands):~~

Foreign Currency Translation Derivative Instruments Total
Balances at December 31, 2019 $ (1,866) $ (2,112) $ (3,978)
Net unrealized gains (losses) arising during the period(e)
(1,636) (5,217) (6,853)
Less: Net realized gains (losses) reclassified to net loss(f)
0 (1,334) (1,334)
Net change during the period (1,636) (3,883) (5,519)
Balances at March 31, 2020 (3,502) (5,995) (9,497)
Net unrealized gains (losses) arising during the period(g)
318 470 788
Less: Net realized gains (losses) reclassified to net income(h)
0 (1,794) (1,794)
Net change during the period 318 2,264 2,582
Balances at June 30, 2020 (3,184) (3,731) (6,915)

~~—————————~~

~~(e)~~ ~~Derivative instruments net of $1.8 million of tax benefit for the three months ended March 31, 2020.~~

~~(f)~~ ~~Derivative instruments net of $0.5 million of tax benefit for the three months ended March 31, 2020.~~

~~(g)~~ ~~Derivative instruments net of $0.2 million of tax liability for the three months ended June 30, 2020.~~

~~(h)~~ ~~Derivative instruments net of $0.6 million of tax benefit for the three months ended June 30, 2020.~~

16. INCOME TAXES

For the three months ended ~~June 30, 2021,~~March 31, 2022, the Company recognized income tax expense of ~~$4.0~~$3.1 million compared to ~~$0.5 million for the same period in the prior year. The Company recognized income tax expense of $5.8 million in the first six months of 2021 compared to an income tax benefit of $9.0~~$1.8 million for the same period in the prior year. The effective tax rates for the first ~~six~~three months of 2022 and 2021 were 20.3% and ~~2020 were 27.3% and 7.8%~~36.3%, respectively. For the first ~~six~~three months of 2022, the effective tax rate differs from the US Federal statutory rate of 21% primarily due to the impact of state and local taxes and discrete items incurred related to stock-based compensation. For the first three months of 2021, the effective tax rate differs from the US Federal statutory rate of 21% primarily due to the impact of state and local taxes and discrete items incurred related to stock-based compensation. For the first six months of 2020, the effective tax rate differs from the US Federal statutory rate of 21% primarily due to the impact of state and local taxes, impairment of non-deductible goodwill, provisions related to the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) passed in March 2020, and discrete items incurred related to stock-based compensation.

Certain provisions of the CARES Act had a significant impact on the effective tax rate, income tax payable, and deferred income tax positions of the Company for 2020. The CARES Act permits net operating losses (“NOLs”) incurred in tax years 2020, 2019, and 2018 to offset 100% of taxable income and be carried-back to each of the five preceding taxable years to generate a refund of previously paid income taxes. The Company evaluated the impact of the CARES Act during the year ended December 31, 2020 and recorded an income tax receivable of $13.2 million for the benefit of carrying back the NOL for the year ended December 31, 2020. As the Company is carrying the losses back to years beginning before January 1, 2018, the receivable was recorded at the previous 35% federal tax rate rather than the current statutory rate of 21%.

17. ~~DIVESTITURES~~IMPAIRMENT, SALES, AND PROPERTY, PLANT, AND EQUIPMENT

During the ~~second~~first quarter of ~~2021,~~2022, the Company impaired approximately $1.0 million of construction-in-progress projects that were no longer expected to be completed. In addition, the Company sold ~~its Extract Technology~~® ~~(“Extract”) business that manufactured stainless steel isolators and downflow booths, as well as custom-fabricated equipment, including workstations and drum booths~~a building (and the related land) for ~~the pharmaceutical, fine chemical, biotech, and nuclear end markets. Proceeds~~net proceeds of ~~the sale, net of transaction costs and cash divested, totaled approximately $20.8~~$1.1 million. ~~Prior to the sale, Extract was an operating unit within the Diversified Products reporting segment.~~ A gain on sale of approximately ~~$1.9~~$0.7 million was recognized ~~in connection with the divestiture, and a portion~~as part of the ~~net proceeds from the sale were used to pay down outstanding principal under the New Term Loan Credit Agreement as further described in Note 7.~~sale. The impairment and gain on sale isare included in Impairment and other, net in the Condensed Consolidated Statements of Operations. In accordance with the relevant accounting guidance, as part of the sale the Company allocated $11.1 million of goodwill based upon the relative fair value of the Extract operating unit compared to the Diversified Products reporting unit as a whole. This goodwill, along with net intangible assets of approximately $1.3 million, were included in the carrying value of the disposed assets and the resulting gain recognized in connection with the sale.

During the first quarter of 2021, the Company impaired unused and obsolete property, plant, and equipment assets totaling approximately $0.8 million. The impairment charges are included in Impairment and other, net in the Condensed Consolidated Statements of Operations.

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During the second quarter of 2020, the Company sold property, plant, and equipment assets for proceeds totaling $2.7 million and recognized a net gain on sale of approximately $1.7 million. The net gain on sale is included in ~~Impairment and other, net~~ ~~in the Condensed Consolidated Statements of Operations.~~

18. SEGMENTS

a. Segment Reporting

~~The~~As further described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, beginning in September 2021 the Company realigned its operating and reportable segments based on how the Chief Operating Decision Maker (“CODM”) manages ~~its~~the business, ~~in 3 segments:~~allocates resources, makes operating decisions, and evaluates operating performance. Based on this realignment, the Company eliminated the historical Commercial Trailer Products, Diversified Products, and Final Mile ~~Products.~~Products segments and established 2 operating and reportable segments: Transportation Solutions and Parts & Services.

Additional information related to the composition of each segment is included below.

▪Transportation Solutions (“TS”): The ~~Commercial Trailer Products~~TS segment ~~manufactures standard~~comprises the design and ~~customized~~manufacturing operations for the Company’s transportation-related equipment and products. This includes dry and refrigerated van ~~and~~trailers, platform trailers, and ~~other transportation related equipment for customers who purchase directly from~~ the ~~Company or through independent dealers.~~Company’s wood flooring production facility, all of which were previously reported in the CTP segment. The ~~Diversified Products~~Company’s EcoNex™ products that were historically included in both the CTP and FMP segments are now reported in the TS segment. In addition, the TS segment includes tank trailers and truck-mounted tanks that were historically reported in the DPG segment. Finally, truck-mounted dry and refrigerated bodies and service and stake bodies that were previously reported in the FMP segment are also in the TS segment.

▪Parts & Services (“P&S”): The P&S segment is comprised of ~~3 strategic~~each of the Company’s historical segments’ parts and services businesses as well as the upfitting component of our truck bodies business. In addition, the Company’s Composites business, ~~units including, Tank Trailer, Process Systems and Composites,~~which focuses on the ~~Company’s commitment to expand its customer base, diversify its product offerings and revenues and extend its market leadership by leveraging its proprietary~~use of DuraPlate® ~~panel technology, drawing on its core manufacturing expertise and making available products that are complementary to truck and tank trailers and transportation equipment. The Final Mile Products~~composite panels beyond the semi-trailer market, is also part of the P&S segment ~~manufactures truck bodies for customers~~(previously reported in the ~~final mile space.~~DPG segment). Finally, the P&S segment includes the Company’s Engineered Products business (previously reported in the DPG segment), including stainless-steel storage tanks and silos, mixers, and processors for a variety of end markets. Growing and expanding the parts and services businesses is a key strategic initiative for the Company moving forward.

The accounting policies of the TS and P&S segments are the same as those described in the summary of significant accounting policies except that the Company evaluates segment performance based on income (loss) from operations. The Company has not allocated certain corporate related administrative costs, interest and income taxes included in the corporate and eliminations segment to the Company’s other reportable segments. The Company accounts for intersegment sales and transfers at ~~cost plus~~cost. Segment assets are not presented as it is not a ~~specified mark-up.~~measure reviewed by the CODM in allocating resources and assessing performance.

Reportable segment information is as follows (in thousands):


Three Months Ended March 31, 2022	Transportation Solutions		Parts & Services		Corporate and Eliminations		Consolidated
Net sales
External customers	$	501,040	$	45,721	$	—	$	546,761
Intersegment sales	1,025		987		(2,012)		—
Total net sales	$	502,065	$	46,708	$	(2,012)	$	546,761

Income (loss) from operations	$	31,697	$	6,789	$	(18,351)	$	20,135


Three Months Ended March 31, 2021	Transportation Solutions		Parts & Services		Corporate and Eliminations		Consolidated
Net sales
External customers	$	344,338	$	47,665	$	—	$	392,003
Intersegment sales	781		930		(1,711)		—
Total net sales	$	345,119	$	48,595	$	(1,711)	$	392,003

Income (loss) from operations	$	16,623	$	6,384	$	(11,792)	$	11,215

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~~Reportable segment information is as follows (in thousands):~~
Three Months Ended June 30, 2021 Commercial
Trailer Products Diversified
Products Final Mile
Products Corporate and
Eliminations Consolidated
Net sales
External customers $ 296,103 $ 72,296 $ 81,023 $ — $ 449,422
Intersegment sales 239 4,282 0 (4,521) —
Total net sales $ 296,342 $ 76,578 $ 81,023 $ (4,521) $ 449,422
Income (loss) from operations $ 32,299 $ 5,824 $ (3,247) $ (12,192) $ 22,684
Assets $ 310,179 $ 256,905 $ 375,336 $ 238,080 $ 1,180,500
Three Months Ended June 30, 2020 Commercial
Trailer Products Diversified
Products Final Mile
Products Corporate and
Eliminations Consolidated
Net sales
External customers $ 232,247 $ 56,074 $ 50,832 $ — $ 339,153
Intersegment sales 7 7,877 0 (7,884) —
Total net sales $ 232,254 $ 63,951 $ 50,832 $ (7,884) $ 339,153
Income (loss) from operations $ 18,599 $ 2,242 $ (6,569) $ (8,273) $ 5,999
Assets $ 347,072 $ 289,927 $ 370,915 $ 134,351 $ 1,142,265
Six Months Ended June 30, 2021 Commercial
Trailer Products Diversified
Products Final Mile
Products Corporate and
Eliminations Consolidated
Net sales
External customers $ 542,874 $ 140,463 $ 158,088 $ — $ 841,425
Intersegment sales 1,177 10,123 0 (11,300) —
Total net sales $ 544,051 $ 150,586 $ 158,088 $ (11,300) $ 841,425
Income (loss) from operations $ 53,164 $ 11,913 $ (7,194) $ (23,984) $ 33,899
Assets $ 310,179 $ 256,905 $ 375,336 $ 238,080 $ 1,180,500
Six Months Ended June 30, 2020 Commercial
Trailer Products Diversified
Products Final Mile
Products Corporate and
Eliminations Consolidated
Net sales
External customers $ 483,192 $ 131,933 $ 111,102 $ — $ 726,227
Intersegment sales 37 14,976 0 (15,013) —
Total net sales $ 483,229 $ 146,909 $ 111,102 $ (15,013) $ 726,227
Income (loss) from operations $ 34,470 $ (3,828) $ (114,610) $ (20,089) $ (104,057)
Assets $ 347,072 $ 289,927 $ 370,915 $ 134,351 $ 1,142,265

b. Product Information

The Company offers products primarily in 4 general categories: (1) new trailers, (2) used trailers, (3) components, parts and ~~service,~~services, and (4) equipment and ~~other.~~other (which includes truck bodies). The following table sets forth the major product categories and their percentage of consolidated net sales (dollars in thousands):

~~Table of Contents~~


Three Months Ended June 30, 2021		Commercial Trailer Products		Diversified Products		Final Mile Products		Eliminations		Consolidated
Three Months Ended March 31, 2022														Three Months Ended March 31, 2022	Transportation Solutions		Parts & Services		Eliminations		Consolidated
New trailers	New trailers	$	287,741	$	34,090	$	0	$	0	$	321,831	71.6	%	New trailers	$	437,963	$	54	$	(311)	$	437,706	80.1	%
Used trailers	Used trailers	19		359		0		0		378		0.1	%	Used trailers	—		569		—		569		0.1	%
Components, parts and service		5,529		27,544		3,965		(4,282)		32,756		7.3	%
Components, parts and services														Components, parts and services	—		33,564		(1,701)		31,863		5.8	%
Equipment and other	Equipment and other	3,053		14,585		77,058		(239)		94,457		21.0	%	Equipment and other	64,102		12,521		—		76,623		14.0	%
Total net sales	Total net sales	$	296,342	$	76,578	$	81,023	$	(4,521)	$	449,422	100.0	%	Total net sales	$	502,065	$	46,708	$	(2,012)	$	546,761	100.0	%

Three Months Ended June 30, 2020		Commercial Trailer Products		Diversified Products		Final Mile Products		Eliminations		Consolidated
Three Months Ended March 31, 2021														Three Months Ended March 31, 2021	Transportation Solutions		Parts & Services		Eliminations		Consolidated
New trailers	New trailers	$	218,753	$	28,176	$	0	$	0	$	246,929	72.8	%	New trailers	$	268,931	$	—	$	—	$	268,931	68.6	%
Used trailers	Used trailers	2,273		1,323		0		0		3,596		1.1	%	Used trailers	165		847		—		1,012		0.3	%
Components, parts and service		9,571		22,166		2,453		(7,884)		26,306		7.8	%
Components, parts and services														Components, parts and services	—		35,498		(1,711)		33,787		8.6	%
Equipment and other	Equipment and other	1,657		12,286		48,379		0		62,322		18.4	%	Equipment and other	76,023		12,250		—		88,273		22.5	%
Total net sales	Total net sales	$	232,254	$	63,951	$	50,832	$	(7,884)	$	339,153	100.0	%	Total net sales	$	345,119	$	48,595	$	(1,711)	$	392,003	100.0	%

Six Months Ended June 30, 2021		Commercial Trailer Products		Diversified Products		Final Mile Products		Eliminations		Consolidated
New trailers		$	526,406	$	64,356	$	0	$	0	$	590,762	70.2	%
Used trailers		184		1,206		0		0		1,390		0.2	%
Components, parts and service		11,470		57,510		7,688		(10,125)		66,543		7.9	%
Equipment and other		5,991		27,514		150,400		(1,175)		182,730		21.7	%
Total net sales		$	544,051	$	150,586	$	158,088	$	(11,300)	$	841,425	100.0	%

Six Months Ended June 30, 2020		Commercial Trailer Products		Diversified Products		Final Mile Products		Eliminations		Consolidated
New trailers		$	456,654	$	71,488	$	0	$	0	$	528,142	72.7	%
Used trailers		2,591		2,533		0		0		5,124		0.7	%
Components, parts and service		18,843		48,248		6,175		(14,984)		58,282		8.0	%
Equipment and other		5,141		24,640		104,927		(29)		134,679		18.5	%
Total net sales		$	483,229	$	146,909	$	111,102	$	(15,013)	$	726,227	100.0	%

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report of Wabash National Corporation (together with its subsidiaries, the “Company,” “Wabash,” “we,” “our,” or “us”) contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (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 ability to effectively manage and operate our business given the ongoing uncertainty caused by the COVID-19 pandemic;~~

▪the highly cyclical nature of our business;

▪demand for our ~~products;~~products and the sensitivity of demand to economic conditions;

▪economic weakness and its impact on the markets and customers we serve;

▪our backlog and indicators of the level of our future revenues;

▪the ~~relative strength~~COVID-19 pandemic, or ~~weakness~~other outbreaks of ~~the overall economy;~~disease or similar public health threats;

▪reliance on a limited number of suppliers of raw materials and components, price increases of raw materials and components, and our ~~expected revenues, income or loss;~~ability to obtain raw materials and components;

▪our ability to ~~achieve sustained profitability;~~

▪~~dependence on industry trends;~~

▪~~our strategic plan~~attract and ~~plans for future operations;~~

▪~~availability and pricing of raw materials, including the impact of tariffs~~retain key personnel or ~~other international trade developments;~~

▪~~the level of competition that we face;~~

▪~~reliance on certain customers, suppliers and corporate relationships;~~a sufficient workforce;

▪our ability to ~~develop~~execute on our long-term strategic plan and ~~commercialize new products;~~

▪~~acceptance of new technologies and products;~~

▪~~export sales and new markets;~~

▪~~engineering and manufacturing capabilities and capacity, including~~growth initiatives or to meet our ~~ability to attract and retain qualified personnel;~~

▪~~government regulations;~~

▪~~the outcome of any pending litigation or notice of environmental dispute;~~

▪~~the risks associated with climate change and related government regulation;~~

▪~~availability of capital and financing, including for working capital and capital expenditures;~~long-term financial goals;

▪our ability to ~~manage~~successfully execute our strategic initiatives;

▪volatility in the supply of vehicle chassis and other vehicle components;

▪changes in our customer relationships or in the financial condition of our customers;

▪significant competition in the industries in which we operate including offerings by our competitors of new or better products and services or lower prices;

▪our competition in the highly competitive specialized vehicle industry;

▪market acceptance of our technology and products or market share gains of competing products;

▪disruptions of manufacturing operations;

▪reliance on information technology to support our operations and our ability to protect against service interruptions or security breaches;

▪current and future governmental laws and regulations and costs related to compliance with such laws and regulations;

▪increased risks of international operations;

▪changes in U.S. trade policy, including the imposition of tariffs and the resulting consequences;

▪the effects of product liability and other legal claims;

▪climate change and related public focus from regulators and various stakeholders;

▪impairment in the carrying value of goodwill and other long-lived intangible assets;

▪our ability to continue a regular quarterly dividend;

▪our ability to generate sufficient cash to service all of our indebtedness;

▪our ~~ability~~indebtedness, financial condition and fulfillment of obligations thereunder;

▪changes to ~~effectively integrate Supreme~~U.S. or foreign tax laws and ~~realize expected synergies~~the effects on our effective tax rate and ~~benefits from~~ future profitability;

▪provisions of our New Senior Notes which could discourage potential future acquisitions of us by a third party;

▪the ~~Supreme acquisition;~~risks related to restrictive covenants in our New Senior Notes indenture and Revolving Credit Agreement (each, as defined below), including limits on financial and operating flexibility;

▪price and trading volume volatility of our common stock; and

▪assumptions relating to the foregoing.

Table of Contents

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 Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. 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, except as required by law.

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COVID-19 Update

In March 2020, a global pandemic was declared by the World Health Organization (the “WHO”) related to COVID-19. ~~This~~The pandemic created significant uncertainties and disruptions in the global economy. We ~~are closely monitoring~~continue to monitor the pandemic and remain focused on the health and safety of our employees, as well as the health of our business. In addition, we ~~track, evaluate, and~~ manage our operating plans ~~in light of~~considering the most recent developments including the changes to best practice guidelines by health experts, the ~~availability of vaccines, the~~ drop in new cases in the United States, and ~~individual states ending their respective shut-down orders. Further,~~changing local, state, and federal requirements. As new cases continue to drop, we ~~remain focused on maintaining business continuity and ensuring our facilities remain operational where safe and appropriate to do so.~~

~~The safety and well-being~~are shifting from the crises of ~~our employees have been, and will remain, our highest priority. In early March 2020, we assembled~~ a pandemic ~~response team~~ to ~~manage~~managing the ~~changes necessary~~ongoing challenges of an endemic infection.

While we are moving to ~~adapt to~~an endemic phase, the ~~rapidly-changing environment. This response team~~COVID-19 pandemic has had lasting effects and continues to ~~meet with our senior leadership team to provide updates~~cause supply chain, labor, and ~~continuously monitor the most recent developments. Actions~~raw material constraints that impact global markets. As a result, we have ~~taken to protect~~experienced inflation across our ~~employees include, but are not limited to:~~

▪~~We implemented pandemic continuity plans.~~

▪~~We continue to evaluate best-practice safe guidelines by recognized health experts.~~

▪~~We are informing our employees about the availability of vaccines~~supply chain, increased freight and ~~encouraging them to get vaccinated.~~

▪~~We are encouraging employees~~logistics costs, and volatility in connection with ~~symptoms to stay home.~~

~~As the pandemic evolves along with the guidance from~~ ~~federal, state and local public health authorities, we may take additional actions based on their requirements and recommendations.~~

~~We also worked with local food banks, schools, healthcare facilities, and other nonprofit organizations to support agencies and families in need, including the following:~~

▪~~We manufactured thousands of full splash protective face shields that were donated to hospitals, cancer centers, surgery centers, dentist offices and other healthcare facilities.~~

▪~~We manufactured partitions so a local gym could open safely.~~

▪~~We moved refrigerated trailers from our lots to assist hospitals. We also coordinated movement of refrigerated product from our dealer lots across the country to serve a similar need.~~

▪~~We donated refrigerated trailers to transport food for school lunch pickups.~~

▪~~We provided FEMA and local governments descriptions of capabilities as they amass their options and determine next steps for today, tomorrow, and into the future.~~

▪~~We manufactured vessels which are used in rapid COVID-19 testing.~~

labor shortages. While the global market downturn and overall impacts on our operations are expected to be temporary, the duration of the impacts cannot be estimated at this time. ~~Should~~However, should the disruptions continue for an extended period of time or worsen, the impact on our production, supply chain, demand for our products, and overall business could have a material adverse effect on our results of operations, financial condition, and cash flows.

~~Table of Contents~~

Results of Operations

The following table sets forth certain operating data as a percentage of net sales for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020:~~2021:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
Net sales	Net sales	100.0	%	100.0	%	100.0	%	100.0	%	Net sales	100.0	%	100.0	%
Cost of sales	Cost of sales	87.6	%	89.9	%	87.8	%	90.2	%	Cost of sales	89.4	%	88.0	%
Gross profit	Gross profit	12.4	%	10.1	%	12.2	%	9.8	%	Gross profit	10.6	%	12.0	%

General and administrative expenses	General and administrative expenses	5.1	%	5.8	%	5.4	%	6.3	%	General and administrative expenses	4.8	%	5.8	%
Selling expenses	Selling expenses	1.3	%	1.4	%	1.5	%	1.8	%	Selling expenses	1.1	%	1.7	%
Amortization of intangibles	Amortization of intangibles	1.3	%	1.6	%	1.4	%	1.5	%	Amortization of intangibles	0.9	%	1.5	%
Impairment and other, net	Impairment and other, net	(0.4	%)	(0.5	%)	(0.1	%)	14.5	%	Impairment and other, net	0.1	%	0.2	%
Income (loss) from operations		5.1	%	1.8	%	4.0	%	(14.3	%)
Income from operations										Income from operations	3.7	%	2.8	%

Interest expense	Interest expense	(1.3	%)	(1.7	%)	(1.4	%)	(1.7	%)	Interest expense	(0.9	%)	(1.6	%)
Other, net	Other, net	(0.1	%)	0.1	%	(0.1	%)	0.1	%	Other, net	—	%	—	%
Income (loss) before income tax expense (benefit)		3.7	%	0.2	%	2.5	%	(15.9	%)
Income before income tax expense										Income before income tax expense	2.8	%	1.2	%

Income tax expense (benefit)		0.9	%	0.2	%	0.7	%	(1.2	%)
Net income (loss)		2.8	%	—	%	1.8	%	(14.7	%)
Income tax expense										Income tax expense	0.6	%	0.5	%
Net income										Net income	2.2	%	0.7	%

For the three-month period ended ~~June 30, 2021,~~March 31, 2022, we recorded net sales of ~~$449.4~~$546.8 million compared to ~~$339.2~~$392.0 million in the prior year period. Net sales for the three-month period ended ~~June 30, 2021~~March 31, 2022 increased ~~$110.3~~$154.8 million, or ~~32.5%~~39.5%, compared to the prior year period, due primarily to ~~increases of 37.6% and 57.0%~~an increase in new trailer ~~and truck body unit~~ shipments ~~respectively,~~of 21.1% on account of stronger demand in ~~these markets.~~this market. This increase was partially offset by a decrease in truck body shipments of 25.6%, which was primarily attributable to supply chain constraints. The higher new trailer shipment volumes drove ~~increases~~an increase of ~~27.6% and 59.4%~~45.5% in net sales within the ~~Commercial Trailer Products and Final Mile Products~~TS reportable ~~segments, respectively. In addition,~~segment. The increase in net sales within the ~~Diversified Products~~TS reportable segment was partially offset by a decrease of $1.9 million in the P&S reportable segment. This decrease was driven by the sale of Extract Technology® in the second quarter of 2021 ($5.4 million in net sales during the first quarter of 2021) and closure of 17 service locations during the first nine months of 2021 (decrease in net sales of approximately $3.6 million from the prior year period). On a comparable revenue basis (excluding the impacts of the divestiture and closure of service locations), P&S segment net sales increased ~~19.7%~~approximately $7.4 million from the prior year period. Gross profit margin ~~increased~~decreased to ~~12.4%~~10.6% in the ~~second~~first quarter of ~~2021~~2022 compared to ~~10.1%~~12.0% in the prior year period primarily driven by higher ~~volumes~~materials and ~~continued realization of cost containment measures implemented during 2020, including headcount reductions.~~manufacturing costs. While we have observed an increase in overall industry demand thus far during ~~2021 compared to 2020’s suppressed levels,~~2022, we continue to experience some challenges as we ramp-up production, manage our supply chain, and hire additional labor. However, we ~~are~~remain focused on positioning ourselves to profitably capitalize on the current increase in demand and industry upswings.

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For the three-month period ended ~~June 30, 2021,~~March 31, 2022, selling, general and administrative expenses increased ~~$4.5~~$3.0 million as compared to the same period in ~~2020.~~2021. As a percentage of net sales, selling, general and administrative expenses decreased to ~~6.5%~~6.0% in the ~~second~~first quarter of ~~2021~~2022 as compared to ~~7.2%~~7.5% in the prior year period, partially due to the continued realization of cost containment measures implemented during 2020, including headcount reductions, as well as Company-wide furloughs during the second quarter of 2020.period. The overall increase in selling, general and administrative expenses in the current year period compared to the same period in the prior year was ~~primarily attributable to higher employee-related costs, including employee incentive and benefit programs, which was~~ largely due to ~~Company-wide furloughs during the second quarter of 2020.~~an increase in professional fees and outside services/labor costs.

Our management team continues to be focused on increasing overall stockholder value by optimizing our manufacturing operations to match the current demand environment, implementing cost savings initiatives and enterprise lean techniques, strengthening our capital structure and maintaining strong liquidity, developing innovative products that enable our customers to succeed, improving earnings, and continuing diversification of the business into higher margin opportunities that leverage our intellectual and process capabilities.

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Three Months Ended ~~June 30, 2021~~March 31, 2022 Compared with the Three Months Ended ~~June 30, 2020~~March 31, 2021

Net Sales

Net sales in the ~~second~~first quarter of ~~2021~~2022 increased ~~$110.3~~$154.8 million, or ~~32.5%~~39.5%, compared to the ~~second~~first quarter of ~~2020.~~2021. By business segment, prior to the elimination of intercompany sales, sales and related units sold were as follows (dollars in thousands):

Three Months Ended June 30, Change
2021 2020 Amount %
(prior to elimination of intersegment sales)
Sales by Segment
Commercial Trailer Products $ 296,342 $ 232,254 $ 64,088 27.6 %
Diversified Products 76,578 63,951 12,627 19.7 %
Final Mile Products 81,023 50,832 30,191 59.4 %
Eliminations (4,521) (7,884) 3,363
Total $ 449,422 $ 339,153 $ 110,269 32.5 %
New Trailers (units)
Commercial Trailer Products 11,090 8,000 3,090 38.6 %
Diversified Products 500 400 100 25.0 %
Total 11,590 8,400 3,190 38.0 %
Used Trailers (units)
Commercial Trailer Products — 185 (185) (100.0 %)
Diversified Products 15 35 (20) (57.1 %)
Total 15 220 (205) (93.2 %)


	Three Months Ended March 31,				Change
	2022		2021		Amount		%
	(prior to elimination of intersegment sales)
Sales by Segment
Transportation Solutions	$	502,065	$	345,119	$	156,946	45.5	%
Parts & Services	46,708		48,595		(1,887)		(3.9	%)

Eliminations	(2,012)		(1,711)		(301)
Total	$	546,761	$	392,003	$	154,758	39.5	%

New Units Shipped	(units)
Trailers	11,695		9,660		2,035		21.1	%
Truck bodies	3,540		4,760		(1,220)		(25.6	%)
Total	15,235		14,420		815		5.7	%

Used Units Shipped	(units)
Trailers	20		40		(20)		(50.0	%)

~~Commercial Trailer Products~~TS segment sales, prior to the elimination of intersegment sales, were ~~$296.3~~$502.1 million for the ~~second~~first quarter of ~~2021,~~2022, an increase of ~~$64.1~~$156.9 million, or ~~27.6%~~45.5%, compared to the ~~second~~first quarter of ~~2020.~~2021. New trailers shipped during the ~~second~~first quarter of ~~2021~~2022 totaled ~~11,090~~11,695 trailers compared to ~~8,000~~9,660 trailers in the prior year period, an increase of ~~38.6%~~21.1%. New truck bodies shipped during the first quarter of 2022 totaled 3,540 truck bodies compared to 4,760 truck bodies in the prior year period, a decrease of 25.6% primarily due to supply chain constraints. The increase in new trailer shipments resulted in ~~a 31.5%~~an overall increase in new trailer revenue, driven by strong demand for our dry van, tank, and platform trailers. The decrease in truck body shipments drove a 19.0% decrease in truck body revenue. Revenue per new trailer unit ~~decreased 5.0% from the prior year period~~and truck body increased across each of our product lines, due in part to ~~product mix (a higher mix of pup trailers~~pricing actions to partially offset the increase in the current year). Sales of our parts and service product offerings totaled $5.5 million for the second quarter of 2021, a decrease of $4.0 million, or 42.2%, as compared to the prior year period, primarily due to the closure of several service locations.commodity costs.

~~Diversified Products~~P&S segment sales, prior to the elimination of intersegment sales, were ~~$76.6~~$46.7 million for the first quarter of 2022, a decrease of $1.9 million, or 3.9%, compared to the first quarter of 2021. The overall decrease in sales for this segment is primarily attributable to the sale of our Extract Technology® business during the second quarter of 2021, ~~an increase~~which had sales totaling approximately $5.4 million during the first quarter of ~~$12.6 million, or 19.7%, compared~~2021. We also completed the closure of 17 service locations during the first nine months of 2021 that attributed to the second quarter of 2020. New trailer shipments for the second quarter of 2021 totaled 500 units compared to 400 units in the prior year period, resulting in an increase in new trailer revenue of $5.9 million, or 21.0%. The increases in new trailer shipments and revenue are primarily attributable to stronger demand in this market segment compared to the prior year,decrease by approximately $3.6 million. These decreases were partially offset by ~~the sale of Beall~~® ~~in Q4 2020, which accounted for approximately $5.1 million of revenue during the second quarter of 2020. Sales of our parts~~higher sales and ~~service product offerings totaled $27.5 million for the second quarter of 2021, an increase of $5.4 million, or 24.3%, as compared to the prior year period due to strong~~increased demand in ~~this market segment. Equipment~~our other parts, services, and ~~other revenue increased $2.3 million, or 18.7%, compared to the prior year period.~~upfitting offerings.

Final Mile Products segment sales, prior to the elimination of intersegment sales, were $81.0 million in the second quarter of 2021, an increase of $30.2 million, or 59.4%, compared to the second quarter of 2020. New truck body sales increased $28.5 million, or 59.7%. The increase in truck body sales is primarily due to a 58.4% increase in truck body unit shipments in the second quarter of 2021 compared to the prior year period. Sales of our parts and service product offerings totaled $4.0 million for the second quarter of 2021, an increase of $1.5 million, or 61.7%, as compared to the prior year period. The overall increase in net sales compared to the prior year period is attributable to stronger demand in this market segment.

Cost of Sales

Cost of sales was ~~$393.8~~$488.7 million in the ~~second~~first quarter of ~~2021,~~2022, an increase of ~~$89.0~~$143.9 million, or ~~29.2%~~41.7%, compared to the prior year period. Cost of sales is comprised of material costs, a variable expense, and other manufacturing costs, comprised of both fixed and variable expenses, including direct and indirect labor, outbound freight, overhead expenses, and depreciation.

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~~Commercial Trailer Products~~TS segment cost of sales was ~~$257.7~~$454.4 million in the ~~second~~first quarter of ~~2021,~~2022, an increase of ~~$47.9~~$147.6 million, or ~~22.8%~~48.1%, compared to the prior year period. The increase in cost of sales, which was primarily driven by higher sales and production volumes on account of stronger demand, was also due to an increase in materials costs of ~~$37.5~~$115.1 million, or ~~24.7%~~55.5%, and higher labor and employee-related costs of approximately ~~$16.1~~$5.6 million. ~~These increases were partially offset by lower fixed~~An additional increase related to other manufacturing costs, ~~due to higher volume leverage~~including outside services and ~~in part to the continued realization of cost containment measures implemented during 2020.~~repairs and maintenance totaling approximately $3.1 million.

~~Diversified Products~~P&S segment cost of sales was ~~$64.4~~$36.2 million in the ~~second~~first quarter of ~~2021, an increase~~2022, a decrease of ~~$11.2~~$1.9 million, or ~~21.1%~~5.0%, compared to the prior period. The ~~increase~~decrease in cost of sales was primarily due to ~~higher sales volumes, which resulted in higher materials costs of $12.7 million and an increase in labor costs of approximately $1.2 million. These increases were partially offset by~~ the sale of ~~Beall~~our Extract Technology® ~~in Q4 2020, as well as certain fixed manufacturing costs due in part to the continued realization of cost containment measures implemented~~business during ~~2020.~~

~~Final Mile Product segment cost of sales was $74.9 million in~~ the second quarter of 2021 ~~an increase~~and the closure of ~~$26.0 million, or 53.2%, compared to~~17 service locations during the ~~prior period. The increase, which was primarily driven~~first nine months of 2021. These decreases were partially offset by ~~higher sales and production volumes on stronger demand, was due to~~ an ~~$18.8 million~~ increase in materials costs ~~and higher labor costs~~ of approximately ~~$8.3 million. These increases were partially offset by lower fixed costs, due to higher volume leverage and in part to the continued realization of cost containment measures implemented during 2020.~~$2.4 million, or 9.2%.

Gross Profit

Gross profit was ~~$55.6~~$58.1 million in the ~~second~~first quarter of ~~2021,~~2022, an increase of ~~$21.3~~$10.9 million from the prior year period. Gross profit as a percentage of net sales was ~~12.4%~~10.6% for the ~~second~~first quarter of ~~2021,~~2022, compared to ~~10.1%~~12.0% for the same period in ~~2020.~~2021. Gross profit by segment was as follows (dollars in thousands):

Three Months Ended June 30, Change
2021 2020 Amount %
Gross Profit by Segment
Commercial Trailer Products $ 38,623 $ 22,392 $ 16,231 72.5 %
Diversified Products 12,151 10,761 1,390 12.9 %
Final Mile Products 6,147 1,963 4,184 213.1 %
Corporate and Eliminations (1,313) (795) (518)
Total $ 55,608 $ 34,321 $ 21,287 62.0 %


	Three Months Ended March 31,				Change
	2022		2021		Amount		%
Gross Profit by Segment
Transportation Solutions	$	47,682	$	38,328	$	9,354	24.4	%
Parts & Services	10,522		10,466		56		0.5	%

Eliminations	(149)		(1,628)		1,479
Total	$	58,055	$	47,166	$	10,889	23.1	%

~~Commercial Trailer Products~~TS segment gross profit was ~~$38.6~~$47.7 million for the ~~second~~first quarter of ~~2021~~2022 compared to ~~$22.4~~$38.3 million for the ~~second~~first quarter of ~~2020.~~2021. Gross profit, prior to the elimination of intersegment sales, as a percentage of net sales, was ~~13.0%~~9.5% in the ~~second~~first quarter of ~~2021~~2022 compared to ~~9.6%~~11.1% in the comparative ~~2020~~2021 period. The overall increase in gross profit from the prior year period was primarily driven by an increase in our dry van products on account of stronger demand and shipments. This increase was partially offset by net decreases in certain other product lines, which were primarily attributable to higher manufacturing costs as well impacts of supply chain disruptions. While we took pricing actions to partially offset the increase in overall materials and manufacturing costs, gross profit as a percentage of net sales was largely due to higher volume leverage and in part as a result of our cost containment measures implemented throughout 2020. Primarily because of these reasons, gross profit as a percentage of net sales for the second quarter of 2021 increased compared todecreased from the prior year period.

~~Diversified Products~~P&S segment gross profit was ~~$12.2~~$10.5 million for the ~~second~~first quarter of ~~2021~~2022 compared to ~~$10.8~~$10.5 million for the ~~second~~first quarter of ~~2020.~~2021. Gross profit, prior to the elimination of intersegment sales, as a percentage of net sales, was ~~15.9%~~22.5% in the first quarter of 2022 compared to 21.5% in the 2021 period. We sold our Extract Technology® business during the second quarter of 2021, ~~compared to 16.8%~~which had gross profit totaling approximately $1.1 million during the first quarter of 2021. This decrease was generally offset by higher gross profit in our other parts, services, and upfitting offerings in the ~~2020 period. Despite~~current year period as well as exit costs during the increase in new trailer shipments and revenue and the continued realization of cost containment efforts implemented throughout 2020 to reduce our operating costs, gross profit as a percentage of net sales decreased from the prior year. This was primarily attributable to higher materials and variable costs as a percentage of revenue.

~~Final Mile Products segment gross profit was $6.1 million for the second~~first quarter of 2021 ~~compared to $2.0 million in the same quarter of 2020. Gross profit, prior~~related to the ~~elimination~~closure of intersegment sales, as a percentage of net sales, was 7.6% in the second quarter of 2021 compared to 3.9% in the 2020 period. The overall increase in gross profit as a percentage of net sales was largely attributable to the 59.4% increase in sales while cost of sales increased only 53.2% compared to the prior year period. Fixed costs as a percentage of sales decreased from the prior year period largely due to higher volume leverage and in part as a result of our cost containment measures implemented throughout 2020.service locations.

General and Administrative Expenses

General and administrative expenses for the ~~second~~first quarter of ~~2021~~2022 increased ~~$3.3~~$3.5 million, or ~~16.7%~~15.2%, from the prior year period. The increase from the prior year period was largely due to an increase of approximately ~~$2.7~~$2.8 million in professional fees and outside services/labor. In addition, depreciation, rental, and maintenance expenses increased a total of approximately $0.8 million. These increases were partially offset by a decrease of approximately $0.6 million in employee-related costs, including benefits and incentive ~~programs, which was primarily attributable to Company-wide furloughs during the second quarter of 2020. In addition, outside services costs increased by approximately $0.5 million.~~programs. As a percentage of net sales, general and administrative expenses were ~~5.1%~~4.8% for the ~~second~~first quarter of ~~2021~~2022 compared to 5.8% for the ~~second~~first quarter of ~~2020.~~2021. The

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overall decrease in general and administrative expenses as a percentage of net sales was ~~due~~primarily attributable to the increase in ~~part~~sales compared to ~~our implementation of cost containment measures during 2020, including headcount reductions.~~the prior year period.

Selling Expenses

Selling expenses were ~~$6.1~~$6.2 million in the ~~second~~first quarter of ~~2021, an increase~~2022, a decrease of ~~$1.2~~$0.5 million, or ~~24.1%~~6.8%, compared to the prior year period. The ~~increase~~decrease was primarily attributable to ~~higher~~lower employee-related costs, including benefits and incentive programs, of approximately ~~$0.7 million, which~~$1.3 million. This decrease was ~~largely attributable to Company-wide furloughs during the second quarter of 2020. In addition,~~partially offset by an increase in advertising costs and outside services ~~and travel-related costs increased $0.3 million and $0.1 million, respectively.~~expense totaling approximately $0.7 million. As a percentage of net sales, selling expenses were ~~1.3%~~1.1% for the ~~second~~first quarter of ~~2021~~2022 compared to ~~1.4%~~1.7% for the ~~second~~first quarter of ~~2020.~~2021. The ~~slight~~overall decrease in selling expenses as a percentage of net sales was ~~partially~~primarily attributable to ~~our implementation~~the decrease in employee-related costs, including benefits and incentive programs.

Table of ~~cost containment measures during 2020, including headcount reductions.~~Contents

Amortization of Intangibles

Amortization of intangibles was ~~$5.8~~$5.0 million for the ~~second~~first quarter of ~~2021~~2022 compared to ~~$5.5~~$5.8 million in the prior year period. Amortization of intangibles was the result of expenses recognized for intangible assets recorded from the acquisitions of Walker in May 2012 ~~certain~~and Supreme in September 2017. The decrease from the prior year period is primarily attributable to the write-off of approximately $28.3 million in trade name and trademark intangible assets ~~of Beall~~® ~~in February 2013 (which was sold~~ during the fourth quarter of ~~2020~~2021 as part of our rebranding as Wabash®, which is further described in our Annual Report on Form 10-K for the year ended December 31, ~~2020),~~2021. In addition, we sold our Extract Technology® business during the second quarter of 2021 and ~~Supreme in September 2017.~~wrote-off the related intangible assets as part of the sale.

Impairment and Other, Net

Impairment and other, net ~~were gains~~was a net loss of ~~$1.8 million and $1.7~~$0.3 million for the three months ended ~~June 30, 2021 and 2020, respectively. During~~March 31, 2022 compared to a net loss of $0.6 million for the three months ended ~~June 30,~~March 31, 2021. The net loss during the current year period primarily related to the impairment of $1.0 million of construction-in-progress projects that were no longer expected to be completed, partially offset by the sale of a building (and the related land) as further described in Note 17. During the first quarter of 2021, we impaired unused and obsolete property, plant, and equipment assets totaling approximately $0.8 million and sold ~~our Extract Technology~~® ~~business~~property, plant, and ~~recognized~~equipment assets resulting in a gain on sale of approximately $1.9 million. The gain on sale was partially offset by insignificant items. Activity during the second quarter of 2020 relates to the net gain on sale of property, plant, and equipment assets for proceeds totaling $2.7$0.2 million.

Other Income (Expense)

Interest expense for the ~~second~~first quarter of ~~2021~~2022 totaled ~~$6.0~~$4.9 million compared to ~~$5.9~~$6.2 million in the ~~second~~first quarter of ~~2020.~~2021. Interest expense relates to interest and non-cash accretion charges on our ~~New~~Senior Notes due 2028 (during 2022), Revolving Credit Agreement (during 2022), Senior Notes due 2025 (during 2021), and ~~Old (during 2020)~~New Term Loan Credit ~~Agreements, Senior Notes, and Revolving Credit Agreement.~~Agreement (during 2021). The ~~increase~~decrease from the prior year period is primarily ~~due~~attributable to ~~a higher interest rate on our~~the repayment of the New Term Loan Credit Agreement in full during the fourth quarter of 2021, partially offset by ~~our prepayments over~~interest on borrowings under the ~~last 12 months.~~Revolving Credit Agreement during the first quarter of 2022.

Other, net for the ~~second~~first quarter of ~~2021~~2022 represented expense of ~~$0.4~~$0.1 million as compared to ~~income~~expense of ~~$0.3~~less than $0.1 million for the prior year period. Expense for both the current year period is primarily attributable to debt extinguishment charges totaling $0.5 million in connection with the $30.0 million principal payments under our New Term Loan Credit Agreement during the second quarter, partially offset by interest income. Income for theand prior year ~~period~~periods is ~~primarily~~ related to ~~interest income.~~individually insignificant items.

Income Taxes

We recognized income tax expense of ~~$4.0~~$3.1 million in the ~~second~~first quarter of ~~2021~~2022 compared to ~~$0.5~~$1.8 million for the same period in the prior year. The effective tax rate for this period was ~~24.5%~~20.3% compared to ~~136.3%~~a tax benefit rate of 36.3% for the same period in the prior year. For the ~~second~~first quarter of ~~2021,~~2022, the effective tax rate differs from the US Federal statutory rate of 21% primarily due to the impact of state and local taxes and discrete items incurred related to stock-based compensation. For the second quarter of 2020, the effective tax rate differs from the US Federal statutory rate of 21% primarily due to the impact of state and local taxes, provisions related to the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), and discrete items incurred related to stock-based compensation.

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~~Six Months Ended June 30, 2021 Compared with the Six Months Ended June 30, 2020~~

~~Net Sales~~

Net sales in the first six months of 2021 increased $115.2 million, or 15.9%, compared to the first six months of 2020. By business segment, prior to the elimination of intercompany sales, sales and related units sold were as follows (dollars in thousands):

Six Months Ended June 30, Change
2021 2020 Amount %
(prior to elimination of intersegment sales)
Sales by Segment
Commercial Trailer Products $ 544,051 $ 483,229 $ 60,822 12.6 %
Diversified Products 150,586 146,909 3,677 2.5 %
Final Mile Products 158,088 111,102 46,986 42.3 %
Eliminations (11,300) (15,013) 3,713
Total $ 841,425 $ 726,227 $ 115,198 15.9 %
New Trailer Shipments (units)
Commercial Trailer Products 20,340 16,525 3,815 23.1 %
Diversified Products 920 1,050 (130) (12.4) %
Total 21,260 17,575 3,685 21.0 %
Used Trailer Shipments (units)
Commercial Trailer Products 15 220 (205) (93.2) %
Diversified Products 40 70 (30) (42.9) %
Total 55 290 (235) (81.0) %

Commercial Trailer Products segment sales prior to the elimination of intersegment sales were $544.1 million for the first six months of 2021, an increase of $60.8 million, or 12.6%, compared to the first six months of 2020. Trailers shipped during the first six months of 2021 totaled 20,340 trailers compared to 16,525 trailers in the prior year period, a 23.1% increase on stronger demand in this segment. The increase in new trailer shipments compared to the prior year period resulted in a $69.8 million, or 15.3%, increase in new trailer revenue. Revenue per new trailer unit decreased 6.3% from the prior year period due to product mix (a higher mix of pup trailers in the current year) and customer mix for a portion of the current year period. Parts and service revenue for the six-month period of 2021 totaled $11.5 million, a decrease of $7.4 million, or 39.1%, from the prior year period primarily due to the closure of several service locations. Used trailer sales decreased $2.4 million compared to the prior year period due to a 205 unit decrease in used trailer shipments in the first six months of 2021 compared to the prior year period.

Diversified Products segment sales prior to the elimination of intersegment sales were $150.6 million for the first six months of 2021, an increase of $3.7 million, or 2.5%, compared to the same period of 2020. Trailers shipped during the first six months of 2021 totaled 920 trailers compared to 1,050 trailers in the prior year period, a 12.4% decrease. The decrease in new trailer shipments compared to the prior year period resulted in a $7.1 million, or 10.0%, decrease in sales. This is largely attributable to the sale of Beall® in Q4 2020, which accounted for approximately $10.9 million of revenue during the first six months of 2020, as well as production ramp-up issues and certain raw material shortages that occurred primarily during the first quarter of 2021. Compared to the prior year period, equipment sales increased $2.9 million, or 11.7%, while parts and service sales increased $9.3 million, or 19.2%. These increases are attributable to stronger demand in these markets.

Final Mile Products segment sales, prior to the elimination of intersegment sales, were $158.1 million for the first six months of 2021, an increase of $47.0 million, or 42.3% from the first six months of 2020. Increased truck body unit shipments of 46.3% drove a $45.5 million, or 44.1%, increase in new truck body sales compared to the prior year period. Sales of our parts and service product offerings totaled $7.7 million for the second quarter of 2021, an increase of $1.5 million, or 24.5%, as compared to the prior year period. The overall increase in net sales compared to the prior year period is attributable to stronger demand in this market segment.

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~~Cost of Sales~~

Cost of sales was $738.7 million in the first six months of 2021, an increase of $83.5 million, or 12.7%, compared to the prior year period. Cost of sales is comprised of material costs, a variable expense, and other manufacturing costs, comprised of both fixed and variable expenses, including direct and indirect labor, outbound freight, overhead expenses, and depreciation.

Commercial Trailer Products segment cost of sales was $478.2 million in the first six months of 2021, an increase of $41.3 million, or 9.4%, compared to the prior year period. The increase in cost of sales, which was primarily driven by higher sales and production volumes on stronger demand, was due to a $33.7 million increase in materials costs and a $20.3 million increase in labor costs. These increases were partially offset by lower fixed costs, due to higher volume leverage and in part to the continued realization of cost containment measures implemented during 2020.

Diversified Products segment cost of sales was $123.3 million in the first six months of 2021, an increase of $2.3 million, or 1.9%, compared to the prior period. Despite lower shipment volumes compared to the prior year period, cost of sales increased primarily due to higher materials costs of $10.1 million. In addition, labor costs increased approximately $0.3 million compared to the prior year period. These increases were partially offset by the sale of Beall® ~~in Q4 2020, as well as certain fixed manufacturing costs due in part to the continued realization of cost containment measures implemented during 2020.~~

Final Mile Product segment cost of sales was $145.5 million in the first six months of 2021, an increase of $36.0 million, or 32.9%, compared to the prior year period. The increase was driven by a $26.4 million increase in materials costs and a $15.2 million increase in labor, both of which were primarily related to increased sales volumes. These increases were partially offset by lower fixed costs, due to higher volume leverage and in part to the continued realization of cost containment measures implemented during 2020.

~~Gross Profit~~

Gross profit was $102.8 million in the first six months of 2021, an increase of $31.7 million from the prior year period. Gross profit as a percentage of sales was 12.2% for the first six months, compared to 9.8% during the same period in 2020. Gross profit by segment was as follows (dollars in thousands):

Six Months Ended June 30, Change
2021 2020 $ %
Gross Profit by Segment
Commercial Trailer Products $ 65,858 $ 46,235 $ 19,623 42.4 %
Diversified Products 27,254 25,902 1,352 5.2 %
Final Mile Products 12,603 1,719 10,884 633.2 %
Corporate (2,941) (2,792) (149)
Total $ 102,774 $ 71,064 $ 31,710 44.6 %

Commercial Trailer Products segment gross profit was $65.9 million for the first six months of 2021 compared to $46.2 million for the prior year period. Gross profit prior to the elimination of intersegment sales, as a percentage of net sales, was 12.1% in 2021 compared to 9.6% in the prior period. The overall increase in gross profit as a percentage of net sales was largely due to higher volume leverage and in part as a result of our cost containment measures implemented throughout 2020. Because of these reasons, along with a favorable product mix for a portion of the current year period, gross profit as a percentage of net sales for the second quarter of 2021 increased compared to the prior year period.

Diversified Products segment gross profit was $27.3 million for the first six months of 2021 compared to $25.9 million in the same period of 2020. Gross profit prior to the elimination of intersegment sales, as a percentage of net sales, was 18.1% in the 2021 period compared to 17.6% in the prior period. Despite lower shipment volumes compared to the prior year period, gross profit as a percentage of net sales increased 0.5% largely due to the continued realization of cost containment efforts implemented throughout 2020 to reduce our operating costs.

Final Mile Products segment gross profit was $12.6 million for the first six months of 2021 compared to $1.7 million in the same period of 2020. Gross profit as a percentage of sales was 8.0% in the first six months of 2021 compared to 1.5% in the prior year period. The overall increase in gross profit as a percentage of net sales was largely attributable to the 42.3% increase in sales while cost of sales increased only 32.9% compared to the prior year period. Fixed costs as a percentage of sales decreased from the prior year period largely due to higher volume leverage and in part as a result of our cost containment measures implemented throughout 2020.

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~~General and Administrative Expenses~~

General and administrative expenses for the first six months of 2021 decreased $0.1 million, or 0.1%, from the prior year period. The decrease from the prior year period was due to a decrease of approximately $0.7 million in professional and other service expenses, as well as a $0.2 million decrease in travel-related expenses. Additional decreases were individually insignificant. These decreases were partially offset by higher employee-related costs, including benefits and incentive programs, of approximately $0.7 million, which was largely attributable to Company-wide furloughs during the second quarter of 2020. As a percentage of sales, general and administrative expenses were 5.4% for the 2021 period as compared to 6.3% for the same period of 2020. The decrease in general and administrative expenses as a percentage of net sales was due in part to our implementation of cost containment measures during 2020, including headcount reductions.

~~Selling Expenses~~

Selling expenses were $12.7 million in the first six months of 2021, a decrease of $0.2 million, or 1.2%, compared to the prior year period. This decrease was due to lower advertising and promotional expenses of approximately $1.0 million, as well as a $0.3 million decrease in travel-related expenses. These decreases were partially offset by higher employee-related costs, including benefits and incentive programs, of approximately $0.5 million, which was largely attributable to Company-wide furloughs during the second quarter of 2020, and higher outside services costs of $0.6 million. As a percentage of net sales, selling expenses were 1.5% for the 2021 period as compared to 1.8% for the same period of 2020. The decrease in selling expenses as a percentage of net sales was partially attributable to our implementation of cost containment measures during 2020, including headcount reductions.

~~Amortization of Intangibles~~

Amortization of intangibles was $11.6 million for the first six months of 2021 compared to $11.0 million in the prior year period. Amortization of intangibles for both periods was the result of expenses recognized for intangible assets recorded from the acquisitions of Walker in May 2012, certain assets of Beall in February 2013 (which was sold during the fourth quarter of 2020 as further described in our Annual Report on Form 10-K for the year ended December 31, 2020), and Supreme in September 2017.

~~Impairment and Other, Net~~

~~Impairment and other, net~~ was a gain of $1.2 million during the first six months of 2021 compared to a loss of $105.4 million during the first six months of 2020. During the second quarter of 2021, we sold our Extract Technology® business and recognized a gain on sale of approximately $1.9 million. This gain was partially offset by the impairment of unused and obsolete property, plant, and equipment assets during the first quarter of 2021 totaling approximately $0.8 million. In addition, during the three months ended March 31, 2021, we sold property, plant, and equipment assets resulting in a gain on sale of approximately $0.2 million. Activity during the first six months of 2020 was primarily the result of impairment charges related to goodwill within the Final Mile Products and Diversified Products segments totaling $106.8 million during the first quarter of 2020. These impairment charges were partially offset by the net gain on sale of property, plant, and equipment assets during the second quarter of 2020.

~~Other Income (Expense)~~

~~Interest expense~~ for the first six months of 2021 totaled $12.2 million compared to $12.2 million in the prior year period. Interest expense relates to interest and non-cash accretion charges on our New Term Loan Credit Agreement, Old Term Loan Credit Agreement, Senior Notes, and Revolving Credit Agreement. Our prepayments over the last 12 months were offset by a higher interest rate on our New Term Loan Credit Agreement.

~~Other, net~~ for the first six months of 2021 represented expense of $0.4 million as compared to income of $0.4 million for the prior year period. Expense for the current year period is primarily attributable to debt extinguishment charges totaling $0.5 million in connection with the $30.0 million principal payments under our New Term Loan Credit Agreement during the second quarter, partially offset by interest income. Income for the prior year period is primarily related to interest income.

~~Income Taxes~~

The Company recognized income tax expense of $5.8 million in the first six months of 2021 compared to an income tax benefit of $9.0 million for the same period in the prior year. The effective tax rate for the first six months of 2021 and 2020 were 27.3% and 7.8%, respectively. For the first six months of 2021, the effective tax rate differs from the USU.S. Federal statutory rate of 21% primarily due to the impact of state and local taxes and discrete items incurred related to stock-based compensation. For the first ~~six months~~quarter of ~~2020,~~2021, the effective tax rate differs from the USU.S. Federal statutory rate of 21% primarily due to the impact of state and local taxes ~~impairment of non-deductible goodwill, provisions related to the CARES Act,~~ and discrete items incurred related to stock-based compensation.

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Liquidity and Capital Resources

Capital Structure

Our capital structure is comprised of a mix of debt and equity. As of ~~June 30, 2021,~~March 31, 2022, our debt to equity ratio, including ~~our~~any finance lease obligations, was approximately ~~1.0:~~1.4:1.0. Our long-term objective is to generate operating cash flows sufficient to support the growth within our businesses and increase shareholder value. This objective will be achieved through a balanced capital allocation strategy of sustaining strong liquidity, maintaining healthy leverage ratios, investing in the business, both organically and strategically, and returning capital to our shareholders. As of May 11, 2021, the Board of Directors has designated a Finance Committee for the primary purpose of assisting the Board in its oversight of the Company’s capital structure, financing, investment, and other financial matters of importance to the Company.

During the first ~~six~~three months of ~~2021,~~2022, in keeping towith this balanced approach, we paid dividends of approximately ~~$8.4~~$4.3 million and repurchased shares under our share repurchase program totaling ~~$40.0~~$4.7 million. Also, as further described ~~in Note 7, during the second quarter of 2021 we made principal payments under our New Term Loan Credit Agreement totaling $30.0 million. In addition, as disclosed~~ in our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, in September 2021 we exercised an option under the Revolving Credit Agreement to increase the total revolving credit commitments by $50 million from $175 million to $225 million. In addition, during the ~~third~~fourth quarter of ~~2020~~2021 we used the net proceeds ~~from our $150.0~~of the New Senior Notes due 2028 and a portion of the increased capacity under the Revolving Credit Agreement to fund the redemption in full of the Old Senior Notes due 2025, to repay in full the $108.8 million of outstanding borrowings under the New Term Loan Credit Agreement, and to pay ~~off the $135.2 million outstanding balance on the Old Term Loan Credit Agreement. We used the remaining proceeds to pay~~all related ~~issuance costs~~fees and ~~expenses as well as repay $10.0 million against our Senior Notes, which are now our nearest maturity of outstanding debt due October 2025.~~expenses. Collectively, these actions demonstrate our confidence in the financial outlook of the Company and our ability to generate cash flow, both near and long term, and reinforce our overall commitment to deliver shareholder value while maintaining the flexibility to continue to execute our strategic plan for profitable growth and diversification.

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Our liquidity position, defined as ~~cash and restricted~~ cash on hand and available borrowing capacity on the Revolving ~~Facility,~~Credit Agreement, amounted to ~~$304.3~~$203.1 million as of ~~June 30, 2021,~~March 31, 2022, a ~~slight increase~~decrease of 40% compared to ~~$303.6~~$337.3 million as of ~~June 30, 2020~~March 31, 2021 and a decrease of 21% from ~~$384.0~~$258.0 million as of December 31, ~~2020. While~~2021. These decreases as of March 31, 2022 are primarily attributable to capital allocation priorities and working capital needs as we ~~believe a certain degree~~scale operations to meet increased demand for our products. For the remainder of uncertainty remains in the industry due in part to the COVID-19 pandemic, we believe we are well-positioned to capitalize on the expected increase in industry demand and production throughout 2021 and beyond. For 2021,2022, we expect to continue our commitment to fund our working capital requirements and capital expenditures, including ~~maintaining~~our plans to add 20% more dry van manufacturing capacity beginning in 2023, which will be achieved by ramping down traditional refrigerated trailer capacity and converting the floor space to create additional dry van production. Along with the increased dry van manufacturing capacity, we will also maintain our assets to capitalize on any economic and/or industry upswings, while also responsibly returning capital to our shareholders. We will continue to move rapidly to adjust to ~~changes in~~ the current environment to preserve the strength of our balance sheet, ~~prioritize~~while prioritizing the safety of our employees and ~~ensure~~ensuring the liquidity and financial well-being of the Company.

Debt Agreements and Related Amendments

Senior Notes due 2028

On ~~September 26, 2017,~~October 6, 2021, we ~~issued Senior Notes due 2025 (the “Senior Notes”) with~~closed on an offering of $400 million in aggregate principal amount of ~~$325 million.~~its 4.50% unsecured Senior Notes due 2028 (the “New Senior Notes”). The New Senior Notes were issued pursuant to an indenture dated as of October 6, 2021, by and among Wabash, certain subsidiary guarantors named therein (the “Guarantors”) and Wells Fargo Bank, National Association, as trustee (the “Indenture”). The New Senior Notes bear interest at the rate of ~~5.50% per annum from the date of issuance,~~4.50% and ~~will~~ pay interest semi-annually in cash in arrears on April 115 and October 115 of each ~~year. We used~~year, beginning on April 15, 2022. The New Senior Notes will mature on October 15, 2028. At any time prior to October 15, 2024, we may redeem some or all of the ~~net~~New Senior Notes for cash at a redemption price equal to 100% of the aggregate principal amount of the New Senior Notes being redeemed plus an applicable make-whole premium set forth in the Indenture and accrued and unpaid interest to, but not including, the redemption date.

Prior to October 15, 2024, we may redeem up to 40% of the New Senior Notes at a redemption price of 104.500% of the principal amount, plus accrued and unpaid interest to, but not including, the redemption date, with the proceeds of ~~$318.9 million from the sale~~certain equity offerings so long as if, after any such redemption occurs, at least 60% of the aggregate principal amount of the New Senior Notes remain outstanding. On and after October 15, 2024, we may redeem some or all of the New Senior Notes at redemption prices (expressed as percentages of principal amount) equal to ~~finance~~102.250% for the twelve-month period beginning on October 15, 2024, 101.125% for the twelve-month period beginning October 15, 2025 and 100.000% beginning on October 15, 2026, plus accrued and unpaid interest to, but not including, the redemption date. Upon the occurrence of a Change of Control (as defined in the Indenture), unless we have exercised its optional redemption right in respect of the New Senior Notes, the holders of the New Senior Notes will have the right to require us to repurchase all or a portion of the ~~acquisition~~New Senior Notes at a price equal to 101% of ~~Supreme~~the aggregate principal amount of the New Senior Notes, plus any accrued and unpaid interest to, ~~pay related fees and expenses.~~ but not including, the date of repurchase.

The New Senior Notes are guaranteed on a senior unsecured basis by all ~~of our~~ direct and indirect existing and future domestic restricted subsidiaries, subject to certain restrictions. The New Senior Notes and related guarantees are our and ~~our guarantors’~~the Guarantors’ general unsecured senior obligations and ~~are subordinate~~will be subordinated to all of our and ~~our guarantors’~~the Guarantors’ existing and future secured debt to the extent of the assets securing that secured obligation. In addition, the New Senior Notes are structurally ~~subordinate~~subordinated to any of existing and future debt of any of our subsidiaries that are not ~~guarantors,~~Guarantors, to the extent of the assets of those subsidiaries. ~~The Senior Notes will mature on October 1, 2025.~~

~~The indenture for~~Subject to a number of exceptions and qualifications, the ~~Senior Notes~~Indenture restricts our ability and the ability of certain of ~~our~~its subsidiaries ~~subject to certain exceptions and qualifications,~~ to: (i) incur additional indebtedness; (ii) pay dividends or make other distributions in respect of, or repurchase or redeem, ~~our~~its capital stock or with respect to any other interest or participation in, or measured by, ~~our~~its profits; (iii) make loans and certain investments; (iv) sell assets; (v) create or incur liens; (vi) enter into transactions with affiliates; and (vii) consolidate, merge or sell all or substantially all of its assets. These covenants are subject to a number of important exceptions and qualifications.

During any time when the New Senior Notes are rated investment grade by at least two of Moody’s, Fitch and Standard & Poor’s Ratings Services and no Default (as defined in the Indenture) has occurred and is continuing, many of such covenants will be suspended and we and our ~~assets.~~subsidiaries will cease to be subject to such covenants during such period.

The ~~indenture for the Senior Notes~~Indenture contains customary events of default, including payment defaults, breaches of covenants, failure to pay certain judgments and certain events of bankruptcy, insolvency and reorganization. If an event of default occurs and is continuing, the principal amount of the New Senior Notes, plus accrued and unpaid interest, if any, may be declared immediately due and payable. These amounts automatically become due and payable if an event of default relating to certain events of bankruptcy, insolvency or reorganization occurs. As of ~~June 30, 2021,~~March 31, 2022, we were in compliance with all ~~covenants,~~covenants.

Contractual coupon interest expense and ~~while~~accretion of fees for the ~~duration~~New Senior Notes for the three-month period ended March 31, 2022 was $4.5 million and ~~severity~~$0.2 million, respectively, and are included in Interest expense in our Condensed Consolidated Statements of Operations. There was no contractual coupon interest expense and accretion of fees for the ~~ongoing COVID-19 pandemic are unknown at this time, we do not anticipate that~~New Senior Notes during the ~~pandemic will impact our ability to remain in compliance with these covenants.~~three-month period ended March 31, 2021.

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Contractual coupon interest expense and accretion of discount and fees for the Senior Notes due 2025, which were redeemed in full during the fourth quarter of 2021, for the ~~three- and six-month periods~~three-month period ended ~~June 30,~~March 31, 2021 was $4.5 million, and $9.0 million, respectively, compared to $4.6 million and $9.3 million for the three- and six-month periods ended June 30, 2020, respectively. Contractual coupon interest expense and accretion of discount and feeswhich are included in Interest expense on our Condensed Consolidated Statements of Operations.

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Revolving Credit Agreement

On December 21, 2018, we entered into the Second Amended and Restated Credit Agreement (the ~~“Revolving~~“Second Amended and Restated Credit Agreement”), among us, certain of ~~our~~its subsidiaries as borrowers (together with us, the “Borrowers”), the lenders from time to time party thereto, Wells Fargo Capital Finance, LLC as the administrative agent, joint lead arranger and joint bookrunner (the “Revolver Agent”), and Citizens Business Capital, a division of Citizens Asset Finance, Inc., as syndication agent, joint lead arranger and joint bookrunner, which amended and restated our existing amended and restated revolving credit agreement, dated as of May 8, 2012.

On September 28, 2020, we entered into the First Amendment to Second Amended and Restated Credit Agreement (the ~~“Amendment,” and together with the Second Amended and Restated Credit Agreement, the “Revolving Credit Agreement” or “Revolving Facility”~~“First Amendment”) among us, certain of our subsidiaries party thereto, the lenders party thereto, and the Revolver Agent. The First Amendment primarily made conforming changes to the provisions in the Revolving Credit Agreement to reflect modifications made under the ~~new term~~Term Loan Credit Agreement, dated September 20, 2020, among the Company, the lenders from time to time parties thereto, and Wells Fargo Bank, National Association, as the administrative agent, providing for a secured loan facility of $150 million (the “New Term Loan Credit Agreement”).

On September 28, 2021, we entered into an Increase Agreement Regarding Incremental Revolver Commitments and Second Amendment to Second Amended and Restated Credit Agreement (the “Second Amendment”, and together with the First Amendment and Second Amended and Restated Credit Agreement, the “Revolving Credit Agreement” or “Revolving Facility”), which exercised an option under the Revolving Credit Agreement to increase the total revolving credit ~~agreement,~~commitments by $50 million from $175 million to $225 million. The Revolving Credit Agreement continues to include an increase option, which ~~is described~~would allow us, subject to certain terms and conditions set forth in ~~more detail below.~~the Revolving Credit Agreement (including the approval of the lenders providing the applicable increase), to increase the total revolving credit commitments under the Revolving Credit Agreement by a further $50 million to a maximum of $275 million.

The Revolving Credit Agreement is guaranteed by certain of our subsidiaries (the “Revolver Guarantors”) and is secured by (i) first priority security interests (subject only to customary permitted liens and certain other permitted liens) in substantially all personal property of the Borrowers and the Revolver Guarantors, consisting of accounts receivable, inventory, cash, deposit and securities accounts and any cash or other assets in such accounts and, to the extent evidencing or otherwise related to such property, all general intangibles, licenses, intercompany debt, letter of credit rights, commercial tort claims, chattel paper, instruments, supporting obligations, documents and payment intangibles (collectively, the “Revolver Priority Collateral”), and (ii) second-priority liens on and security interests in customary permitted liens and certain other permitted liens (A) equity interests of each direct subsidiary held by the Borrowers and each Revolver ~~Guarantors,~~Guarantor (subject to customary limitations in the case of the equity of foreign subsidiaries), and (B) substantially all other tangible and intangible assets of the Borrowers and the Revolver Guarantors including equipment, general intangibles, intercompany notes, insurance policies, investment property and intellectual property (in each case, except to the extent constituting Revolver Priority Collateral), but excluding real property ~~(the~~(collectively, including certain material owned real property that does not constitute collateral under the Revolving Credit Agreement, the “Term Priority Collateral”).

The Revolving Credit Agreement has a scheduled maturity date of December 21, ~~2023, subject to certain springing maturity events.~~2023.

Under the Revolving Credit Agreement, the lenders agree to make available to us a $175 million revolving credit facility. We have the option to increase the total commitment under the facility to up to $275 million, subject to certain conditions. Subject to availability, the Revolving Credit Agreement provides for a letter of credit subfacility in an amount not in excess of $15 million, and allows for swingline loans in an amount not in excess of $17.5 million. Outstanding borrowings under the Revolving Credit Agreement bear interest at an annual rate, at the Borrowers’ election, equal to (i) ~~LIBOR~~London Interbank Offer Rate (“LIBOR”) plus a margin ranging from 1.25% to 1.75% or (ii) a base rate plus a margin ranging from 0.25% to 0.75%, in each case depending upon the monthly average excess availability under the ~~revolving loan facility.~~Revolving Facility. The Borrowers are required to pay a monthly unused line fee equal to 0.20% times the average daily unused availability along with other customary fees and expenses thereunder.

The Revolving Credit Agreement contains customary covenants limiting our ability and certain of our affiliates to, among other things, pay cash dividends, incur debt or liens, redeem or repurchase stock, enter into transactions with affiliates, merge, dissolve, repay subordinated indebtedness, make investments and dispose of assets. In addition, we will be required to maintain a minimum fixed charge coverage ratio of not less than 1.0 to 1.0 as of the end of any period of 12 fiscal months ~~(commencing with the month ending December 31, 2018)~~ when excess availability under the Revolving Credit Agreement is less than 10% of the total revolving commitment. We were in compliance with all covenants as of June 30, 2021, and while the duration and severity of the ongoing COVID-19 pandemic remain unknown at this time, we do not anticipate that the pandemic will impact our ability to remain in compliance with these covenants.March 31, 2022.

~~During the three-month period ended June 30, 2021 and as of June 30, 2021, there were no amounts outstanding under the Revolving Facility. We paid no interest~~If availability under the Revolving Credit Agreement ~~during~~is less than 15% of the ~~three-~~total revolving commitment or if there exists an event of default, amounts in any of the Borrowers’ and ~~six-month periods ended June 30, 2021.~~

~~During~~ the ~~three-month period ended March 31, 2020, we drew $45.0 million~~Revolver Guarantors’ deposit accounts (other than certain excluded accounts) will be transferred daily into a blocked account held by the Revolver Agent and applied to reduce the outstanding amounts under the Revolving Credit Agreement as a precautionary measure in response to the uncertainty caused by the COVID-19 pandemic. During the second quarter of 2020, we repaid the $45.0 million in outstanding borrowings and as of June 30, 2020 there were no amounts outstanding under the Revolving Credit Facility. For the three- and six-month periods ended June 30, 2020, we paid approximately $0.2 million of interest under the Revolving Credit Agreement.

Our liquidity position, defined as cash and restricted cash on hand and available borrowing capacity on the Revolving Facility, amounted to $304.3 million as of June 30, 2021, a decrease of 21% from $384.0 million as of December 31, 2020 and a slight increase from June 30, 2020.facility.

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~~New and Old Term Loan Credit Agreements~~

On September 28, 2020, we entered into a Term Loan Credit Agreement (the “New Term Loan Credit Agreement”) among us, the lenders from time to time party thereto, and Wells Fargo Bank, National Association, as the administrative agent (the “Term Agent”), providing for a senior secured term loan facility of $150 million that was advanced at closing. The New Term Loan Credit Agreement refinanced and replaced that certain Term Loan Credit Agreement, dated as of May 8, 2012 (as amended, restated, supplemented or otherwise modified from time to time, the “Old Term Loan Credit Agreement”), among us, the lenders party thereto and Morgan Stanley Senior Funding, Inc., as the administrative agent.

The New Term Loan Credit Agreement is guaranteed by certain of our subsidiaries (the “Term Loan Guarantors”) and is secured by (i) second priority security interests (subject only to the liens securing the Revolving Credit Agreement, customary permitted liens, and certain other permitted liens) in substantially all of our personal property and the Term Loan Guarantors, consisting of accounts receivable, inventory, cash, deposit and securities accounts and any cash or other assets in such accounts and, to the extent evidencing or otherwise related to such property, all general intangibles, licenses, intercompany debt, letter of credit rights, commercial tort claims, chattel paper, instruments, supporting obligations, documents and payment intangibles, and (ii) first priority security interests (subject only to customary permitted liens and certain other permitted liens) in (A) subject to certain limitations, equity interests of each direct subsidiary held by us and each Term Loan Guarantor, and (B) substantially all of our other tangible and intangible assets and the Term Loan Guarantors, including equipment, general intangibles, intercompany notes, investment property and intellectual property, but excluding real property. The respective priorities of the security interests securing the New Term Loan Credit Agreement and the Revolving Credit Agreement are governed by an Intercreditor Agreement, dated as of September 28, 2020, between the Term Agent and the Revolver Agent (the “Intercreditor Agreement”). The New Term Loan Credit Agreement has a scheduled maturity date of September 28, 2027. The loans under the New Term Loan Credit Agreement amortize in quarterly installments equal to 0.25% of the original principal amount of the term loans issued thereunder, with the balance payable at maturity.

Outstanding borrowings under the New Term Loan Credit Agreement bear interest at a rate, at our election, equal to (i) LIBOR (subject to a floor of 0.75% per annum) plus a margin of 3.25% per annum or (ii) a base rate plus a margin of 2.25% per annum.

The New Term Loan Credit Agreement contains customary covenants limiting our ability and our subsidiaries to, among other things, pay cash dividends, incur debt or liens, redeem or repurchase stock, enter into transactions with affiliates, merge, dissolve, pay off subordinated indebtedness, make investments and dispose of assets. As of June 30, 2021, we were in compliance with all covenants, and while the duration and severity of the ongoing COVID-19 pandemic remain unknown at this time, we do not anticipate that the pandemic will impact our ability to remain in compliance with these covenants.

During the three-month period ended March 31, 2022, we borrowed $56.0 million under the Revolving Credit Agreement. As of ~~June 30,~~March 31, 2022, there was $89.0 million outstanding under the Revolving Facility. Interest expense under the Revolving Credit Agreement for the three-month period ended March 31, 2022, was approximately $0.3 million. During the three-month period ended March 31, 2021, and as of March 31, 2021, there were no amounts outstanding under the Revolving Facility. We paid no interest under the Revolving Credit Agreement during the three-month period ended March 31, 2021.

Our liquidity position, defined as cash on hand and available borrowing capacity on the Revolving Facility, amounted to $203.1 million as of March 31, 2022 and $258.0 million as of December 31, 2021.

During the fourth quarter of 2021, we drew $50.0 million under the Revolving Credit Agreement, a portion of which was used along with the proceeds of the New Senior Notes to fund the redemption in full of the Senior Notes due 2025, to repay in full the $108.8 million of outstanding borrowings under the New Term Loan Credit Agreement, and to pay all related fees and expenses of the New Senior Notes.

New Term Loan Credit Agreement

As of March 31, 2021, we had ~~$108.8~~$138.8 million outstanding under the New Term Loan Credit Agreement (which we repaid in full during the fourth quarter of 2021), none of which ~~none~~ was classified as current on our Condensed Consolidated Balance Sheets. For the ~~three- and six-month periods~~three-month period ended ~~June 30,~~March 31, 2021, ~~we paid interest of $1.3 million and $2.7 million, respectively,~~ under the New Term Loan Credit Agreement. In addition, during the three months ended June 30, 2021, we made principal payments totaling $30.0 million and recognized loss on debt extinguishment charges of approximately $0.5 million. The extinguishment charges are included in ~~Other, net~~ ~~in the Condensed Consolidated Statements of Operations.~~

~~For the three- and six-month periods ended June 30, 2020, under the Old~~ Term Loan Credit Agreement we paid interest of ~~$1.0 million and $2.4~~$1.4 million and made no principal ~~payments during either period.~~payments.

For ~~each~~the three-month period ended ~~June 30,~~March 31, 2021, ~~and 2020,~~ we incurred charges of less than $0.1 million ~~and $0.1 million for each six-month period ended June 30, 2021 and 2020,~~ for amortization of fees and original issuance ~~discount. Amortization of fees and original issuance~~ discount, which are included in Interest expense in the Condensed Consolidated Statements of Operations.

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Cash Flows

Cash used in operating activities for the first ~~six~~three months of ~~2021~~2022 totaled ~~$13.1~~$34.6 million, compared to ~~providing $22.7~~using $22.4 million during the same period in ~~2020.~~2021. Cash used in operations during the current year period was the result of net income adjusted for various non-cash activities including depreciation, amortization, net gain on the sale of assets, ~~and business divestiture,~~ deferred taxes, stock-based compensation, impairment, accretion of debt fees and discount, ~~loss on debt extinguishment,~~ and a ~~$56.9~~$61.4 million increase in working capital. Changes in key working capital accounts for ~~2021~~2022 and ~~2020~~2021 are summarized below (in thousands):


		Six Months Ended June 30,							Three Months Ended March 31,
		2021		2020		Change			2022		2021		Change
Source (Use) of cash:	Source (Use) of cash:							Source (Use) of cash:
Accounts receivable	Accounts receivable	$	(25,758)	$	48,785	$	(74,543)	Accounts receivable	$	(113,524)	$	(33,059)	$	(80,465)
Inventories	Inventories	(89,733)		(14,154)		(75,579)		Inventories	(49,113)		(63,422)		14,309
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	56,074		(22,126)		78,200		Accounts payable and accrued liabilities	98,284		61,789		36,495
Net use of cash	Net use of cash	$	(59,417)	$	12,505	$	(71,922)	Net use of cash	$	(64,353)	$	(34,692)	$	(29,661)

Accounts receivable increased ~~$25.8~~$113.5 million in the first ~~six~~three months of ~~2021~~2022 as compared to a ~~$48.8~~$33.1 million ~~decrease~~increase in the prior year period. Days sales outstanding, a measure of working capital efficiency that measures the amount of time a receivable is outstanding, was 2648 days and 31 days infor the ~~2021~~three months ended March 31, 2022 and ~~2020 periods,~~2021, respectively. The increase in accounts receivable during the first ~~six~~three months of ~~2021~~2022 was primarily due to the increase in shipments from the prior year period as well as the timing of shipments and receipt of customer payments. Inventory increased by ~~$89.7~~$49.1 million during the first ~~six~~three months of ~~2021~~2022 as compared to an increase of ~~$14.2~~$63.4 million in the ~~2020~~2021 period. Our inventory turns, a commonly used measure of working capital efficiency that measures how quickly inventory turns per year, was approximately 6 times in the ~~2021~~2022 period and 86 times in the ~~2020~~2021 period. The increase in inventory for the ~~2021~~2022 period was primarily attributable to ~~higher finished goods inventory due to the timing of customer pick-ups and~~ higher raw materials inventory to adjust to anticipated production for the remainder of ~~2021.~~2022 as well as higher finished goods inventory. Accounts payable and accrued liabilities increased by ~~$56.1~~$98.3 million in ~~2021~~2022 compared to ~~a decrease~~an increase of ~~$22.1~~$61.8 million for the same period in ~~2020.~~2021. Days payable outstanding, a measure of working capital efficiency that measures the amount of time a payable is outstanding, was 4248 days infor the ~~2021 period~~three months ended March 31, 2022 compared to 3445 days ~~during~~for the ~~same period in 2020.~~three months ended March 31, 2021.

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Investing activities ~~provided $9.9~~used $8.5 million during the first ~~six~~three months of ~~2021,~~2022, as compared to using ~~$8.2~~$4.0 million during the same period in ~~2020.~~2021. Investing activities for the first ~~six~~three months of ~~2021~~2022 include capital expenditures of ~~$11.1~~$9.9 million, which was an increase compared to ~~$10.9~~$4.2 million during the same period in ~~2020.~~2021. For the first ~~six~~three months of ~~2021,~~2022, investing activities also include proceeds from the sale of assets ~~and business divestiture~~ of ~~$21.0~~approximately $1.4 million. Proceeds from the sale of assets during the first ~~six~~three months of ~~2020~~2021 were ~~$2.7~~approximately $0.2 million.

Financing activities ~~used $78.5~~provided $44.1 million during the first ~~six~~three months of ~~2021~~2022 as compared to using ~~$19.0~~$22.4 million during the same period in ~~2020.~~2021. Net cash ~~used in~~provided by financing activities during the current year period primarily relates to borrowings under our Revolving Facility totaling $56.3 million and proceeds from the exercise of stock options of $0.6 million. These items were partially offset by common stock repurchases and withholdings of ~~$41.3 million, principal payments under our New Term Loan Credit Agreement of $30.0~~$8.0 million and cash dividend payments to our shareholders of ~~$8.4~~$4.3 million. Net cash used in financing activities during the first three months of 2021 primarily relates to common stock repurchases and withholdings of $19.3 million and cash dividend payments to our shareholders of $4.3 million, partially offset by proceeds from the exercise of stock options of $1.5 million. Cash used in financing activities in the first six months of 2020 primarily relate to common stock repurchases and withholdings of $10.1 million and cash dividends paid to our shareholders of $8.7$1.2 million.

As of ~~June 30, 2021,~~March 31, 2022, our liquidity position, defined as ~~cash and restricted~~ cash on hand and available borrowing capacity under our Revolving Facility, amounted to ~~$304.3~~$203.1 million, representing ~~an increase~~a decrease of ~~$0.7~~$134.2 million (or 40%) compared to ~~June 30, 2020~~March 31, 2021 and a decrease of ~~$79.7~~$55.0 million (or 21%) compared to December 31, ~~2020.~~2021. Total debt ~~and finance lease~~ obligations amounted to ~~$424.0~~$489.0 million as of ~~June 30, 2021. In addition,~~March 31, 2022. These decreases as of March 31, 2022 are primarily attributable to capital allocation priorities and working capital needs as we scale operations to meet increased demand for our ~~nearest debt maturity is not until October 2025. While~~products, as well as increased borrowings under the Revolving Facility. For the remainder of 2022, we ~~believe a certain degree of uncertainty remains~~expect to continue our commitment to fund our working capital requirements and capital expenditures, including our plans to add 20% more dry van manufacturing capacity beginning in 2023, which will be achieved by ramping down traditional refrigerated trailer capacity and converting the ~~industry due in part~~floor space to create additional dry van production. Along with the ~~COVID-19 pandemic,~~increased dry van manufacturing capacity, we ~~continue to believe we are well-positioned~~will also maintain our assets to capitalize on any economic and/or industry upswings, while also responsibly returning capital to our shareholders. We will continue to move rapidly to adjust to the ~~expected increase in industry demand~~current environment to preserve the strength of our balance sheet, while prioritizing the safety of our employees and ~~production throughout 2021~~ensuring the liquidity and ~~beyond.~~financial well-being of the Company.

Capital Expenditures

Capital spending amounted to approximately ~~$11.1~~$9.9 million for the first ~~six~~three months of ~~2021. Because~~2022, and we believe our capital expenditures for 2022 will be in the range of $80 to $90 million. In addition to the previously announced actions to retool our existing capacity to support expanded dry van production, ~~we are increasing our capital expenditures estimate for 2021 by $20 million to an anticipated range of $55 to $60 million. In addition to the capacity expansion,~~ capital spending for ~~2021~~2022 has been and is expected to be utilized to support maintenance and productivity improvement initiatives within our facilities.

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Goodwill

As further described in our Annual Report on Form 10-K for the year ended December 31, 2021, beginning in September 2021 we realigned our operating and reportable segments. Based on these changes, we established two operating and reportable segments: TS and P&S. These operating segments have also been determined to be the applicable reporting units for purposes of goodwill assignment and evaluation. In accordance with the relevant accounting guidance, we performed a quantitative impairment assessment of goodwill immediately prior to and subsequently following the change in segments and reporting units. The quantitative analyses did not result in any impairment charges as the fair value of each reporting unit exceeded the carrying value. In addition, as part of the change in segment structure, we reassigned goodwill from the historical CTP, DPG, and FMP reporting units to the TS and P&S reporting units using a relative fair value allocation approach as required by the relevant accounting guidance.

As further described in ~~Note 17,~~our Annual Report on Form 10-K for the year ended December 31, 2021, during the second quarter of 2021 we sold our Extract Technology® (“Extract”) business that manufactured stainless steel isolators and downflow booths, as well as custom-fabricated equipment, including workstations and drum booths for the pharmaceutical, fine chemical, biotech, and nuclear end markets. Prior to the divestiture Extract was an operating unit within the ~~Diversified Products~~historical DPG reporting unit. In accordance with the relevant accounting guidance, as part of the sale we allocated $11.1 million of goodwill based upon the relative fair value of the Extract operating unit compared to the ~~Diversified Products~~historical DPG reporting unit as a whole. This goodwill was included in the carrying value of the disposed assets and the resulting net gain recognized in connection with the sale. Prior to and subsequent to the divestiture, we performed an impairment assessment for the ~~Diversified Products~~historical DPG reporting unit and concluded the fair value of the reporting unit continued to exceed the carrying value.

We assess goodwill for impairment at the reporting unit level on an annual basis as of October 1 and whenever events or changes in circumstances indicate a possible impairment. Subsequent to December 31, 2019, our share price and market capitalization declined. In addition, as a result of the COVID-19 pandemic and related impact on our results of operations, the Company did not perform in-line with expectations. As a result, indicators of impairment were identified and we performed an interim quantitative assessment as of March 31, 2020, utilizing a combination of the income and market approaches, which were weighted evenly. Key assumptions used in the analysis were discount rates of 17.0% and 13.5% for Final Mile Products (“FMP”) and Tank Trailers (which was within the Diversified Products (“DPG”) segment), respectively, EBITDA margins, and a terminal growth rate of 3.0%. The results of the quantitative analysis indicated the carrying value of the FMP and Tank Trailers reporting units exceeded their fair values and, accordingly, goodwill impairment charges of $95.8 million and $11.0 million, respectively, were recorded during the first quarter of 2020. The goodwill impairment charges, which were based on Level 3 fair value measurements, are included in ~~Impairment and other, net~~ ~~in the Condensed Consolidated Statements of Operations.~~

In addition, the results of the quantitative analysis performed as of March 31, 2020 indicated the fair value of the Process Systems reporting unit, which was within the DPG segment, exceeded the carrying value by approximately 3%. Key assumptions used in the analysis were a discount rate of 14.5%, EBITDA margin, and a terminal growth rate of 3.0%. The Process Systems reporting unit designs and manufactures a broad range of products, such as isolators, stationary silos, and downflow booths used in a number of unique markets, including the chemical, dairy, food and beverage, pharmaceutical and nuclear markets. We believe this reporting unit’s broad range of innovative products in unique industries will result in sufficient future earnings. Based on the results of the interim quantitative test, we performed sensitivity analyses around the key assumptions used in the analysis, the results of which were: (a) a 100 basis point decrease in the EBITDA margin used to determine expected future cash flows would have resulted in an impairment of approximately $4.6 million, (b) a 100 basis point increase in the discount rate would have resulted in an impairment of approximately $4.5 million, and (c) a 100 basis point decrease in the terminal growth rate would have resulted in an impairment of approximately $1.2 million.

Future events and changing market conditions may require a re-evaluation of the assumptions used in the determination of fair value for each of our reporting units, including key assumptions used in the expected EBITDA margins and cash flows, as well as other key assumptions with respect to matters out of our control, such as discount rates and market multiple comparables.

We considered whether there were any indicators of impairment during the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and concluded there were none.

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Contractual Obligations and Commercial Commitments

A summary of payments of our contractual obligations and commercial commitments, both on and off balance sheet, as of ~~June 30, 2021~~March 31, 2022 are as follows (in thousands):


		2021		2022		2023		2024		2025		Thereafter		Total			2022		2023		2024		2025		2026		Thereafter		Total
Debt:	Debt:															Debt:
New Term Loan Credit Agreement (due 2027)		$	—	$	—	$	—	$	—	$	—	$	108,835	$	108,835

Revolving Facility (due 2023)	Revolving Facility (due 2023)	—		—		—		—		—		—		—		Revolving Facility (due 2023)	$	—	$	89,001	$	—	$	—	$	—	$	—	$	89,001
Senior Notes (due 2025)		—		—		—		—		315,000		—		315,000
Interest payments on Revolving Facility, New Term Loan Credit Agreement, and Senior Notes 1		10,839		21,678		21,678		21,678		17,347		7,618		100,838
Finance Leases (including principal and interest)		180		30		—		—		—		—		210
Senior Notes (due 2028)																Senior Notes (due 2028)	—		—		—		—		—		400,000		400,000
Interest payments on Revolving Facility and Senior Notes due 20281																Interest payments on Revolving Facility and Senior Notes due 20281	19,586		19,473		18,000		18,000		18,000		36,000		129,059

Total debt	Total debt	11,019		21,708		21,678		21,678		332,347		116,453		524,883		Total debt	19,586		108,474		18,000		18,000		18,000		436,000		618,060
Other:	Other:															Other:
Operating Leases	Operating Leases	2,281		3,342		2,516		1,397		799		1,719		12,054		Operating Leases	3,248		3,600		2,485		1,476		990		1,173		12,972
Total other	Total other	2,281		3,342		2,516		1,397		799		1,719		12,054		Total other	3,248		3,600		2,485		1,476		990		1,173		12,972
Other commercial commitments:	Other commercial commitments:															Other commercial commitments:
Letters of Credit	Letters of Credit	6,740		—		—		—		—		—		6,740		Letters of Credit	5,702		—		—		—		—		—		5,702
Raw Material Purchase Commitments	Raw Material Purchase Commitments	110,780		—		—		—		—		—		110,780		Raw Material Purchase Commitments	131,700		—		—		—		—		—		131,700
Chassis Converter Pool Agreements		17,261		—		—		—		—		—		17,261
Chassis Agreements and Programs																Chassis Agreements and Programs	5,423		—		—		—		—		—		5,423
Total other commercial commitments	Total other commercial commitments	134,781		—		—		—		—		—		134,781		Total other commercial commitments	142,825		—		—		—		—		—		142,825
Total obligations	Total obligations	$	148,081	$	25,050	$	24,194	$	23,075	$	333,146	$	118,172	$	671,718	Total obligations	$	165,659	$	112,074	$	20,485	$	19,476	$	18,990	$	437,173	$	773,857

1 Future interest payments on variable rate long-term debt are estimated based on the rate in effect as of ~~June 30, 2021.~~March 31, 2022.

Borrowings under the New Term Loan Credit Agreement bear interest at a rate, at our election, equal to (i) LIBOR (subject to a floor of 0.75% per annum) plus a margin of 3.25% per annum or (ii) a base rate plus a margin of 2.25% per annum.

Borrowings under the Revolving Facility bear interest at a variable rate based on the LIBOR or a base rate determined by the lender’s prime rate plus an applicable margin, as defined in the agreement. ~~Outstanding~~Any outstanding borrowings under the Revolving Facility bear interest at a rate, at our election, equal to (i) LIBOR plus a margin ranging from 1.25% to 1.75% or (ii) a base rate plus a margin ranging from 0.25% to 0.75%, in each case depending upon the monthly average excess availability under the Revolving Facility. We are required to pay a monthly unused line fee equal to 0.20% times the average daily unused availability along with other customary fees and expenses of our agent and lenders. During the three-month period ended March 31, 2022, we borrowed $56.0 million under the Revolving Facility and made payments totaling approximately $0.3 million. As of ~~June 30, 2021, we had no amounts~~March 31, 2022, there was $89.0 million outstanding under ~~our~~the Revolving Facility.

The Senior Notes due 2028 bear interest at the rate of ~~5.5%~~4.5% per annum from the date of issuance, payable semi-annually on April 115 and October 1.15.

~~Finance leases represent future minimum lease payments including interest.~~ Operating leases represent the total future minimum lease ~~payments. Obligations related to operating leases~~payments that we have ~~executed but have not yet commenced were insignificant as~~commenced. As of ~~June 30, 2021. Subsequent to June 30, 2021,~~March 31, 2022, obligations related to operating leases that we have executed but have not yet commenced totaled approximately ~~$2.5~~$1.3 million on a non-discounted basis, which we generally expect to be recognized over the next 5five years.

We have standby letters of credit totaling ~~$6.7~~$5.7 million issued in connection with workers compensation claims and surety bonds.

We have ~~$110.8~~$131.7 million in purchase commitments ~~with our suppliers and through financial derivatives~~ through December ~~2021~~2022 for various raw material commodities, including aluminum, steel, ~~nickel~~polyethylene and ~~polyethylene~~nickel as well as other raw material components which are within normal production requirements.

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We, through our subsidiary Supreme, obtain most vehicle chassis for our specialized vehicle products directly from the chassis manufacturers under converter pool agreements. Chassis are obtained from the manufacturers based on orders from customers, and to a lesser extent, for unallocated orders. Although each manufacturer’s agreement has different terms and conditions, the agreements generally state that the manufacturer will provide a supply of chassis to be maintained from time to time at our various facilities with the condition that we will store such chassis and will not move, sell, or otherwise dispose of such chassis except under the terms of the agreement. The manufacturer transfers the chassis to us on a “restricted basis,” retaining the sole authority to authorize commencement of work on the chassis and to make certain other decisions with respect to the chassis including the terms and pricing of sales of the chassis to the manufacturer’s dealers. The manufacturer also does not transfer the certificate of origin to us nor permit us to sell or transfer the chassis to anyone other than the manufacturer (for ultimate resale to a dealer). Although we are party to related finance agreements with manufacturers, we have not historically settled, nor expect to in the

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future settle, any related obligations in cash. Instead, the obligation is settled by the manufacturer upon reassignment of the chassis to an accepted dealer, and the dealer is invoiced for the chassis by the manufacturer. Accordingly, as of ~~June 30, 2021~~March 31, 2022 our outstanding chassis converter pool with the manufacturer totaled ~~$14.7~~$4.9 million and we have included this financing agreement on our Condensed Consolidated Balance Sheets within Prepaid expenses and other and Other accrued liabilities. All other chassis programs through our Supreme subsidiary are handled as consigned inventory belonging to the manufacturer and totaled approximately ~~$2.6~~$0.5 million. Under these agreements, if the chassis is not delivered to a customer within a specified time frame, we are required to pay a finance or storage charge on the chassis. Additionally, we receive finance support funds from ~~the manufacturer~~manufacturers when the chassis are assigned into our chassis pool. Typically, chassis are converted and delivered to customers within 90 days of our receipt of the chassis.

Backlog

Orders that have been confirmed by customers in writing, have defined delivery time frames, and can be produced during the next 18 months are included in our backlog. Orders that comprise our backlog may be subject to changes in quantities, delivery, specifications, terms, or cancellation. Our backlog of orders was approximately ~~$1,342~~$2,339 million at ~~June 30, 2021,~~March 31, 2022, which is a 9%7% decrease from approximately ~~$1,482~~$2,526 million at December 31, ~~2020~~2021 and a ~~77%~~51% increase from ~~$757~~$1,547 million at ~~June 30, 2020. Consistent with the disclosure~~March 31, 2021. The increase from Q1 2021 is primarily related to increased demand for our products in ~~our Annual Report on Form 10-K for the year ended December 31, 2020, we continue to~~2022. We believe our backlog of orders is strong ~~especially considering~~and shows the ~~COVID-19 pandemic’s impact on~~strength of our ~~industry, operations, and demand for our products.~~customers’ businesses from first to final mile. We expect to complete the majority of our backlog orders as of ~~June 30, 2021~~March 31, 2022 within 12 months of this date.

Outlook

The trailer industry generally follows the transportation industry’s cycles. According to ACT Research Company (“ACT”), total United States trailer production in ~~2020~~2021 was approximately ~~206,000~~267,000 trailers, a ~~38% decrease~~30% increase from ~~2019 production levels. As we enter~~2020’s softened demand that was worsened and magnified by the ~~third quarter of 2021 with a certain degree of continued~~ uncertainty ~~from~~and economic impact caused by the COVID-19 pandemic. While there remains some uncertainty of the full impact of the COVID-19 pandemic, particularly around supply chain disruptions and labor shortages, the outlook for the overall trailer market is strong, and we believe our backlog of orders continues to provide a solid foundation for ~~2021 indicates some recovery from suppressed 2020 levels. The most recent~~2022. Current estimates from ~~industry forecasters~~ ACT and FTR ~~Associates~~Associations (“FTR”) ~~indicate total~~for 2022 United States trailer production ~~levels for~~are 300,000 and 315,000, respectively, representing increases from 2021 of approximately ~~291,000~~12% and ~~295,000, respectively, which~~18%, respectively. These increases are generally in-line with our expectations as trailer manufacturers continue to ramp-up production for strong 2022 demand. We believe that these estimates for production will remain above replacement demand over the next several years.

ACT is forecasting annual new trailer production levels for 2023, 2024, 2025, 2026, and 2027 of approximately 333,000, 318,000, 305,000, 286,000, and 298,000, respectively. In addition, FTR is forecasting annual new trailer production levels of 335,000 and 310,000 for 2023 and 2024, respectively. While these estimates are more historically consistent production levels in the trailer ~~industry. In addition, as noted above we believe our backlog of orders is strong, which is consistent with~~industry, and in some cases higher, industry forecasters ~~who have indicated~~note that ~~backlogs~~certain issues, such as continued supply chain disruptions and staffing challenges, could impact these estimates. We continue to believe we are ~~expected~~well positioned to ~~remain at high levels thus continuing to provide a solid foundation for the remainder~~capitalize on strong demand in 2022.

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ACT estimates production levels for 2022, 2023, 2024, 2025, and 2026 to be 333,000, 295,000, 272,000, 295,000, and 286,000, respectively. In addition, as of July 2021, FTR estimates 2022 and 2023 new trailer production to be approximately 320,000 and 330,000, respectively. These estimates from ACT and FTR for the next several years are generally expected to be above replacement demand. While we believe these estimates to generally be reasonable, the unknown duration and severity of the COVID-19 pandemic and related impacts creates some uncertainty in the industry and actual production and/or demand could vary significantly from these estimates.

Other potential risks we face for ~~the remainder of 2021 will~~2022 primarily relate to our ability to effectively manage our manufacturing operations, including ongoing labor shortages, disruption of our supply chain, and our overall business with the expected increase in ~~production.~~production to meet demand. In addition, the cost ~~and supply~~ of raw materials, commodities, and components ~~is a~~are also potential ~~risk.~~risks as we enter 2022 with increased demand. Significant increases in the cost of certain commodities, raw materials or components have had, and may continue to have, an adverse effect on our results of operations. As has been our practice, we will endeavor to pass raw material and component price increases to our customers in addition to continuing our cost management and hedging activities in an effort to minimize the risk that changes in material costs could have on our operating results. In addition, we rely on a limited number of suppliers for certain key components and raw materials in the manufacturing of our products, including tires, landing gear, axles, suspensions, aluminum extrusions, chassis and specialty steel ~~coil, and chassis.~~coil. At the current and expected demand levels, there may be additional or increased shortages of supplies of raw materials or components ~~or labor~~ which would have an adverse impact on our ability to meet demand for our products. Despite these risks, we believe we are well positioned to capitalize on the expected strong overall demand levels while maintaining or growing margins through improvements in product pricing as well as productivity and other operational excellence initiatives.

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For the remainder of ~~2021,~~2022, we will continue to adjust to changes in the current environment, preserve the strength of our balance sheet, prioritize the safety of our employees, and ensure the liquidity and financial well-being of the Company. We believe we remain well-positioned for both near-term and long-term success in the trailer industry because: (1) our core customers are among the major participants in the trucking industry; (2) our technology and innovation provides value-added solutions for our customers by reducing trailer operating costs, improving revenue opportunities, and solving unique transportation problems; (3) our Wabash Management System (“WMS”) principles and processes and ~~focus on enterprise~~enterprise-wide lean ~~drives~~efforts drive focus on the interconnected processes that are critical for success across our business; ~~and~~ (4) our significant brand recognition, ~~and~~including our January 2022 rebranding as Wabash®, presence throughout North America, and the utilization of our extensive dealer network to market and sell our ~~products.~~products; and (5) our One Wabash approach to create a consistent, superior experience for all customers who seek our solutions in the transportation, logistics, and distribution markets. By continuing to be an innovation leader in the transportation, logistics, and distribution industries we expect to leverage our existing assets and capabilities into higher margin products and markets by delivering value-added customer solutions. Optimizing our product portfolio, operations, and processes to enhance manufacturing efficiency and agility is expected to well-position the Company to drive margin expansion, reinforce our customer relationships, and deliver greater value to our customers and stakeholders.

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 for the year ended December 31, ~~2020.~~2021. There have been no material changes to the summary provided in that report.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

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

Commodity Prices

We are exposed to fluctuation in commodity prices through the purchase of various raw materials that are processed from commodities such as aluminum, steel, lumber, nickel, copper, and polyethylene. Given the historical volatility of certain commodity prices, this exposure can significantly impact product costs. We manage some of our commodity price changes by entering into fixed price contracts with our suppliers and through financial derivatives. To the extent that we are unable to offset the increased commodity costs in our product prices, our results would be materially and adversely affected. As of ~~June 30, 2021,~~March 31, 2022, we had ~~$110.8~~$131.7 million in raw material purchase commitments through December ~~2021~~2022 for materials that will be used in the production process, as compared to ~~$86.9~~$129.6 million as of December 31, ~~2020.~~2021. 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. ToAs of March 31, 2022, a hypothetical ten percent change in commodity prices based on our raw material purchase commitments through December 2022 would result in a corresponding change in cost of goods sold over a one-year period of approximately $13.2 million. This sensitivity analysis does not account for the ~~extent that we are unable~~change in the competitive environment indirectly related to ~~offset~~ the ~~increased~~change in commodity ~~costs~~prices and the potential managerial action taken in ~~our product prices, our results would be materially and adversely affected.~~response to these changes.

Interest Rates

~~During the three- and six- month periods ended June 30, 2021, and as~~As of ~~June 30, 2021, there were no amounts~~March 31, 2022, we had $89.0 million of floating rate debt outstanding under ~~the~~our Revolving Facility. As ~~of June 30,~~further described in our Annual Report on Form 10-K for the year ended December 31, 2021, we ~~had~~repaid the outstanding ~~borrowings~~balance in full under our New Term Loan Credit Agreement ~~totaling approximately $108.8 million that bears interest at~~during the fourth quarter of 2021, which had a floating rate ~~subject to a minimum interest rate.~~of interest. Based on ~~any~~the current borrowings under our Revolving Facility, ~~and the outstanding indebtedness under our New Term Loan Credit Agreement,~~ a hypothetical 100 basis-point change in the floating interest rate would result in a corresponding change in interest expense over a one-year period of approximately ~~$1.1~~$0.9 million. 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.

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Foreign Exchange Rates

We are subject to fluctuations in the Mexican peso exchange rates that impact transactions with our foreign subsidiaries, as well as U.S. denominated transactions between these foreign subsidiaries and unrelated parties. A ten percent change in the Mexican peso exchange rates would have an immaterial impact on results of operations. We do not hold or issue derivative financial instruments for speculative purposes.

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 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) were effective as of ~~June 30, 2021.~~

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March 31, 2022.

Changes in Internal Controls over Financial Reporting

There were no changes in the Company’s internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during the ~~second~~first quarter of fiscal year ~~2021~~2022 that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

Part II - OTHER INFORMATION

Item 1. Legal Proceedings

See Item 3 of Part I of our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. See also Note 12, “Commitments and Contingencies”, to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report.

Item 1A. Risk Factors

You should carefully consider the risks described in our Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 including those under the heading “Risk Factors” appearing in Item 1A of Part I of the Form 10-K and other information contained in this Quarterly Report before investing in our securities. Realization of any of these risks could have a material adverse effect on our business, financial condition, cash flows, and results of operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of Our Equity Securities

Period Total Number of
Shares Purchased Average Price
Paid per
Share Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs Maximum Amount That May Yet Be Purchased Under the Plans or Programs
($ in millions)
April 1 - 30, 2021 282,662 $ 18.56 282,662 $ 28.0
May 1 - 31, 2021 412,307 $ 16.67 412,307 $ 21.2
June 1 - 30, 2021 616,060 $ 16.01 609,245 $ 11.4
Total 1,311,029 $ 16.77 1,304,214 $ 11.4


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Amount That May Yet Be Purchased Under the Plans or Programs ($ in millions)
January 1 - 31, 2022	151,662	$	20.24	151,662	$	133.0
February 1 - 28, 2022	289,691	$	17.04	95,512	$	131.4
March 1 - 31, 2022	350	$	16.94	—	$	131.4
Total	441,703	$	18.14	247,174	$	131.4

In ~~November 2018,~~August 2021, the Company announced that the Board of Directors approved the repurchase of an additional ~~$100~~$150 million in shares of common stock over a three-year period. This authorization was an increase to the previous $100 million repurchase programs approved in November 2018, February 2017, and February 2016. The repurchase program is set to expire ~~on February 28, 2022.~~in August 2024. For the quarter ended ~~June 30, 2021,~~March 31, 2022, we repurchased ~~1,304,214~~247,174 shares pursuant to our repurchase program. Additionally, during this period there were ~~6,815~~194,529 shares repurchased to cover minimum employee tax withholding obligations upon the vesting of restricted stock awards.

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Item 6. Exhibits


(a)	Exhibits
	31.1	Certification of Principal Executive Officer
	31.2	Certification of Principal Financial Officer
	32.1	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)
	101	The following materials from Wabash National Corporation’s Quarterly Report on Form 10-Q for the quarter ended ~~June 30, 2021~~March 31, 2022 are filed herewith, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, (ii) the Condensed Consolidated Statements of Operations for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ (iii) the Condensed Consolidated Statements of Comprehensive Income ~~(Loss)~~ for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ (iv) the Condensed Consolidated Statements of Cash Flows for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ (v) the Condensed Consolidated Statements of Stockholders’ Equity for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ and (vi) Notes to Condensed Consolidated Financial Statements. The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.
	104	Cover Page Interactive Data File (formatting as Inline XBRL and contained in Exhibit 101)

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SIGNATURES

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


		WABASH NATIONAL CORPORATION

Date: ~~July 28, 2021~~April 27, 2022	By:	/s/ Michael N. Pettit
		Michael N. Pettit
		Senior Vice President and Chief Financial Officer (Principal Financial Officer)

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	Classification	Three Months Ended June 30, 2021		Three Months Ended June 30, 2020
Operating lease cost	Cost of sales, selling expenses and general and administrative expense	$	1,229	$	1,229
Finance lease cost
Amortization of ROU leased assets	Depreciation and amortization within Cost of sales	36		36
Interest on lease liabilities	Interest expense	7		12
Net lease cost		$	1,272	$	1,277