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, 2022~~March 31, 2023


☐			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) 771-5310

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 20, 2022~~April 19, 2023 was ~~48,550,417.~~47,480,037.

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 30~~March 31, 2023 ~~, 2022~~ and December 31, ~~2021~~20 2 2	3

	Condensed Consolidated Statements of Operations for the three ~~and six~~ months ended ~~June 30~~March 31, 2023 ~~, 2022~~ and ~~2021~~20 22	4

	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three ~~and six~~ months ended ~~June 30~~March 31, 2023 ~~, 2022~~ and ~~2021~~20 22	5

	Condensed Consolidated Statements of Cash Flows for the ~~six~~ three months ended ~~June 30~~March 31, 2023 ~~, 2022~~ and ~~2021~~20 22	6

	Condensed Consolidated Statements of Stockholders’ Equity for the three ~~and six~~months ended ~~June 30~~March 31, 2023 ~~, 2022~~ and ~~2021~~202 2	7

	Notes to Condensed Consolidated Financial Statements	98

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2824

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	4336

Item 4.	Controls and Procedures	4436

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	4437

Item 1A.	Risk Factors	4437

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4437

Item 6.	Exhibits	4538

	Signatures	4639

Table of Contents

Part I - FINANCIAL INFORMATION

Item 1. Financial Statements

WABASH NATIONAL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)


		June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
		(Unaudited)					(Unaudited)
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	138,484	$	71,778	Cash and cash equivalents	$	68,245	$	58,245
Accounts receivable, net	Accounts receivable, net	231,625		176,511		Accounts receivable, net	256,598		255,577
Inventories, net	Inventories, net	305,338		237,621		Inventories, net	315,643		243,870
Prepaid expenses and other	Prepaid expenses and other	31,980		43,795		Prepaid expenses and other	42,434		34,927
Total current assets	Total current assets	707,427		529,705		Total current assets	682,920		592,619
Property, plant, and equipment, net	Property, plant, and equipment, net	242,636		232,425		Property, plant, and equipment, net	288,823		271,116
Goodwill	Goodwill	188,440		188,443		Goodwill	188,422		188,434
Intangible assets, net	Intangible assets, net	105,599		114,441		Intangible assets, net	96,027		99,231
Other assets	Other assets	46,203		42,057		Other assets	52,955		52,123
Total assets	Total assets	$	1,290,305	$	1,107,071	Total assets	$	1,309,147	$	1,203,523
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	$	—	$	—	Current portion of long-term debt	$	—	$	—
Current portion of finance lease obligations		—		59

Accounts payable	Accounts payable	304,761		173,950		Accounts payable	250,557		189,141
Other accrued liabilities	Other accrued liabilities	127,927		115,316		Other accrued liabilities	173,844		158,327
Total current liabilities	Total current liabilities	432,688		289,325		Total current liabilities	424,401		347,468
Long-term debt	Long-term debt	454,506		428,315		Long-term debt	395,977		395,818

Deferred income taxes	Deferred income taxes	33,864		36,019		Deferred income taxes	27,719		27,758
Other non-current liabilities	Other non-current liabilities	30,889		27,873		Other non-current liabilities	35,912		34,354
Total liabilities	Total liabilities	951,947		781,532		Total liabilities	884,009		805,398
Commitments and contingencies	Commitments and contingencies	0		0		Commitments and contingencies
Noncontrolling interest	Noncontrolling interest	187		—		Noncontrolling interest	695		512
Wabash National Corporation stockholders’ equity:	Wabash National Corporation stockholders’ equity:					Wabash National Corporation stockholders’ equity:
Common stock 200,000,000 shares authorized, $0.01 par value, 48,701,087 and 48,954,482 shares outstanding, respectively		764		759
Common stock 200,000,000 shares authorized, $0.01 par value, 47,626,067 and 47,675,796 shares outstanding, respectively						Common stock 200,000,000 shares authorized, $0.01 par value, 47,626,067 and 47,675,796 shares outstanding, respectively	774		766
Additional paid-in capital	Additional paid-in capital	659,355		653,978		Additional paid-in capital	668,843		665,941
Retained earnings	Retained earnings	118,771		92,111		Retained earnings	235,399		188,241
Accumulated other comprehensive (loss) income		(5,226)		859
Treasury stock at cost, 27,816,488 and 27,013,275 common shares, respectively		(435,493)		(422,168)
Accumulated other comprehensive loss						Accumulated other comprehensive loss	(554)		(882)
Treasury stock at cost, 29,852,263 and 28,972,928 common shares, respectively						Treasury stock at cost, 29,852,263 and 28,972,928 common shares, respectively	(480,019)		(456,453)
Total Wabash National Corporation stockholders' equity	Total Wabash National Corporation stockholders' equity	338,171		325,539		Total Wabash National Corporation stockholders' equity	424,443		397,613
Total liabilities, noncontrolling interest, and equity	Total liabilities, noncontrolling interest, and equity	$	1,290,305	$	1,107,071	Total liabilities, noncontrolling interest, and equity	$	1,309,147	$	1,203,523

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,
		2022		2021		2022		2021			2023		2022
Net sales	Net sales	$	642,769	$	449,422	$	1,189,530	$	841,425	Net sales	$	620,952	$	546,761
Cost of sales	Cost of sales	564,735		393,814		1,053,441		738,651		Cost of sales	504,925		488,706
Gross profit	Gross profit	78,034		55,608		136,089		102,774		Gross profit	116,027		58,055
General and administrative expenses	General and administrative expenses	30,944		22,907		57,276		45,774		General and administrative expenses	36,040		26,332
Selling expenses	Selling expenses	7,376		6,065		13,585		12,730		Selling expenses	6,884		6,209
Amortization of intangible assets	Amortization of intangible assets	3,803		5,799		8,842		11,597		Amortization of intangible assets	3,203		5,039

Impairment and other, net	Impairment and other, net	3		(1,847)		343		(1,226)		Impairment and other, net	—		340
Income from operations	Income from operations	35,908		22,684		56,043		33,899		Income from operations	69,900		20,135
Other income (expense):	Other income (expense):									Other income (expense):
Interest expense	Interest expense	(5,218)		(6,034)		(10,131)		(12,184)		Interest expense	(4,994)		(4,913)
Other, net	Other, net	(327)		(413)		(398)		(427)		Other, net	387		(71)
Other expense, net	Other expense, net	(5,545)		(6,447)		(10,529)		(12,611)		Other expense, net	(4,607)		(4,984)
Income before income tax expense	Income before income tax expense	30,363		16,237		45,514		21,288		Income before income tax expense	65,293		15,151
Income tax expense	Income tax expense	7,624		3,985		10,701		5,819		Income tax expense	13,897		3,077
Net income	Net income	22,739		12,252		34,813		15,469		Net income	51,396		12,074
Net income attributable to noncontrolling interest	Net income attributable to noncontrolling interest	187		—		187		—		Net income attributable to noncontrolling interest	183		—
Net income attributable to common stockholders	Net income attributable to common stockholders	$	22,552	$	12,252	$	34,626	$	15,469	Net income attributable to common stockholders	$	51,213	$	12,074

Net income attributable to common stockholders per share:	Net income attributable to common stockholders per share:									Net income attributable to common stockholders per share:
Basic	Basic	$	0.46	$	0.24	$	0.71	$	0.30	Basic	$	1.07	$	0.25
Diluted	Diluted	$	0.46	$	0.24	$	0.70	$	0.29	Diluted	$	1.04	$	0.24
Weighted average common shares outstanding (in thousands):	Weighted average common shares outstanding (in thousands):									Weighted average common shares outstanding (in thousands):
Basic	Basic	49,034		51,272		49,019		51,697		Basic	47,770		49,004
Diluted	Diluted	49,535		51,989		49,662		52,472		Diluted	49,136		49,730

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,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
Net income	Net income	$	22,739	$	12,252	$	34,813	$	15,469	Net income	$	51,396	$	12,074
Other comprehensive income (loss), net of tax:	Other comprehensive income (loss), net of tax:									Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	Foreign currency translation adjustment	(303)		667		(60)		364		Foreign currency translation adjustment	564		243
Unrealized (loss) gain on derivative instruments	Unrealized (loss) gain on derivative instruments	(19,610)		8,631		(6,025)		23,161		Unrealized (loss) gain on derivative instruments	(236)		13,585
Total other comprehensive (loss) income		(19,913)		9,298		(6,085)		23,525
Total other comprehensive income										Total other comprehensive income	328		13,828
Comprehensive income	Comprehensive income	2,826		21,550		28,728		38,994		Comprehensive income	51,724		25,902
Comprehensive income attributable to noncontrolling interest	Comprehensive income attributable to noncontrolling interest	187		—		187		—		Comprehensive income attributable to noncontrolling interest	183		—
Comprehensive income attributable to common stockholders	Comprehensive income attributable to common stockholders	$	2,639	$	21,550	$	28,541	$	38,994	Comprehensive income attributable to common stockholders	$	51,541	$	25,902

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,
		2022		2021			2023		2022
Cash flows from operating activities	Cash flows from operating activities					Cash flows from operating activities
Net income	Net income	$	34,813	$	15,469	Net income	$	51,396	$	12,074
Adjustments to reconcile net income to net cash provided by (used in) operating activities	Adjustments to reconcile net income to net cash provided by (used in) operating activities					Adjustments to reconcile net income to net cash provided by (used in) operating activities
Depreciation	Depreciation	16,482		12,881		Depreciation	6,493		8,225
Amortization of intangibles	Amortization of intangibles	8,842		11,597		Amortization of intangibles	3,203		5,039
Net gain on sale of property, plant and equipment and business divestiture		(642)		(2,043)
Loss on debt extinguishment		—		452
Net gain on sale of property, plant and equipment						Net gain on sale of property, plant and equipment	—		(645)

Deferred income taxes	Deferred income taxes	(139)		(1,799)		Deferred income taxes	39		(50)
Stock-based compensation	Stock-based compensation	4,647		4,216		Stock-based compensation	2,766		2,277
Impairment	Impairment	986		817		Impairment	—		986
Non-cash interest expense	Non-cash interest expense	426		591		Non-cash interest expense	244		213
Accounts receivable	Accounts receivable	(55,114)		(25,758)		Accounts receivable	(1,021)		(113,524)
Inventories	Inventories	(67,717)		(89,733)		Inventories	(71,773)		(49,113)
Prepaid expenses and other	Prepaid expenses and other	814		2,500		Prepaid expenses and other	(3,156)		2,913
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	142,869		56,074		Accounts payable and accrued liabilities	81,735		98,284
Other, net	Other, net	(3,593)		1,650		Other, net	(442)		(1,246)
Net cash provided by (used in) operating activities	Net cash provided by (used in) operating activities	82,674		(13,086)		Net cash provided by (used in) operating activities	69,484		(34,567)
Cash flows from investing activities	Cash flows from investing activities					Cash flows from investing activities
Cash payments for capital expenditures	Cash payments for capital expenditures	(22,369)		(11,063)		Cash payments for capital expenditures	(31,423)		(9,949)
Proceeds from the sale of assets	Proceeds from the sale of assets	1,445		20,978		Proceeds from the sale of assets	—		1,445

Net cash (used in) provided by investing activities		(20,924)		9,915
Net cash used in investing activities						Net cash used in investing activities	(31,423)		(8,504)
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	735		1,450		Proceeds from exercise of stock options	144		613
Dividends paid	Dividends paid	(8,278)		(8,437)		Dividends paid	(4,551)		(4,337)

Borrowings under revolving credit facilities	Borrowings under revolving credit facilities	56,739		232		Borrowings under revolving credit facilities	43,294		56,284
Payments under revolving credit facilities	Payments under revolving credit facilities	(30,773)		(232)		Payments under revolving credit facilities	(43,294)		(318)
Principal payments under finance lease obligations	Principal payments under finance lease obligations	(59)		(172)		Principal payments under finance lease obligations	—		(59)
Principal payments under term loan credit facility		—		(30,000)

Debt issuance costs paid	Debt issuance costs paid	(83)		—		Debt issuance costs paid	(88)		(83)
Stock repurchases	Stock repurchases	(13,325)		(41,302)		Stock repurchases	(23,566)		(8,013)
Net cash provided by (used in) financing activities		4,956		(78,461)
Net cash (used in) provided by financing activities						Net cash (used in) provided by financing activities	(28,061)		44,087
Cash and cash equivalents:	Cash and cash equivalents:					Cash and cash equivalents:
Net increase (decrease) in cash, cash equivalents, and restricted cash		66,706		(81,632)
Net increase in cash, cash equivalents, and restricted cash						Net increase in cash, cash equivalents, and restricted cash	10,000		1,016
Cash, cash equivalents, and restricted cash at beginning of period	Cash, cash equivalents, and restricted cash at beginning of period	71,778		217,677		Cash, cash equivalents, and restricted cash at beginning of period	58,245		71,778
Cash, cash equivalents, and restricted cash at end of period	Cash, cash equivalents, and restricted cash at end of period	$	138,484	$	136,045	Cash, cash equivalents, and restricted cash at end of period	$	68,245	$	72,794
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	$	10,177	$	11,508	Cash paid for interest	$	231	$	273
Refunds received for income taxes		$	(3,312)	$	(247)
Net refunds received for income taxes						Net refunds received for income taxes	$	(19)	$	(8,825)
Period end balance of payables for property, plant, and equipment	Period end balance of payables for property, plant, and equipment	$	9,288	$	4,274	Period end balance of payables for property, plant, and equipment	$	10,975	$	2,960

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

Table of Contents

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				Common Stock					Additional Paid-In Capital				Retained Earnings				Accumulated Other Comprehensive Income				Treasury Stock				Total
		Shares	Amount										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
Net income for the period									22,552									22,552
Balances at December 31, 2022																					Balances at December 31, 2022	47,675,796			$	766			$	665,941			$	188,241			$	(882)			$	(456,453)			$	397,613
Net income attributable to common stockholders for the period																					Net income attributable to common stockholders for the period										51,213												51,213
Foreign currency translation	Foreign currency translation										(303)							(303)			Foreign currency translation														564								564
Stock-based compensation	Stock-based compensation	16,416	0		2,370													2,370			Stock-based compensation	480,463			8		2,758																2,766
Stock repurchase	Stock repurchase	(360,659)												(5,312)				(5,312)			Stock repurchase	(540,875)																	(23,566)				(23,566)

Common stock dividends	Common stock dividends								(3,901)									(3,901)			Common stock dividends										(4,055)												(4,055)
Unrealized loss on derivative instruments, net of tax	Unrealized loss on derivative instruments, net of tax										(19,610)							(19,610)			Unrealized loss on derivative instruments, net of tax														(236)								(236)
Common stock issued in connection with:	Common stock issued in connection with:																				Common stock issued in connection with:
Stock option exercises	Stock option exercises	12,690			122													122			Stock option exercises	10,683					144																144
Balances at June 30, 2022		48,701,087	$	764	$	659,355			$	118,771	$	(5,226)		$	(435,493)			$	338,171
Balances at March 31, 2023																					Balances at March 31, 2023	47,626,067			$	774	$	668,843			$	235,399			$	(554)			$	(480,019)			$	424,443


	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

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

~~Table of Contents~~

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

~~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. DESCRIPTION OF THE BUSINESS & BASIS OF PRESENTATION

Wabash National Corporation (the “Company,” “Wabash,” “we,” “our,” or “us”) was founded in 1985 and incorporated as a corporation in Delaware in 1991, with its principal executive offices in Lafayette, ~~Indiana~~Indiana. The Company was founded as a dry van trailer ~~manufacturer. The~~manufacturer—today, the Company enables customers to thrive by providing insight into tomorrow and delivering pragmatic solutions today to move everything from first to final mile. Wabash designs, manufactures, and ~~manufactures~~services a diverse range of products, including dry freight and refrigerated trailers, platform trailers, ~~bulk~~ tank trailers, dry and refrigerated truck bodies, structural composite panels and products, trailer aerodynamic solutions, and specialty food grade processing equipment. This diversification has been achieved through acquisitions, organic growth, and product innovation.

The condensed consolidated financial statements of the Company 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 Company consolidates into its financial statements the accounts of the Company and any partially owned subsidiary it has the ability to control (see Note 5). The Company does not have any subsidiaries it consolidates based solely on the power to direct the activities and significant participation in the entity’s expected results that would not otherwise be consolidated based on control through voting interests. Further, its affiliates are businesses established and maintained in connection with its operating strategy and are not special purposes entities. All intercompany transactions and balances have been eliminated.

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, ~~2021.~~2022.

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~~has reviewed recently issued accounting standards, which have not yet been adopted, in order to determine their potential effect, if any, on its financial condition or results of operations. Based on the review of recently issued standards, the Company ~~is evaluating the impact the new standard~~does not currently believe that any of those accounting pronouncements will have a significant effect on ~~our condensed consolidated~~its current or future financial ~~statements and related disclosures but does not anticipate a material impact.~~condition, results of operations, cash flows, or disclosures.

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 Parts & Services reportable segment that have no alternative use and contain an enforceable right~~primarily relate 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.

~~Table of Contents~~

The Company has identified 3three separate and distinct performance obligations: (1) the sale of a trailer or equipment, (2) the sale of replacement parts, and (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 11. 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

~~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,~~Note 19, the Company has established 2two operating and reportable segments: Transportation Solutions (“TS”) and Parts & 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, 2022,~~March 31, 2023, goodwill allocated to the TS and P&S segments was approximately $120.5 million and $67.9 million, respectively. The Company considered whether there were any indicators of impairment during the three ~~and six~~ months ended ~~June 30, 2022~~March 31, 2023 and concluded there were none.

~~Extract Technology~~® ~~Divestiture~~

~~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 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 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 reporting unit and concluded the fair value of the reporting unit continued to exceed the carrying value.

~~Table of Contents~~

The changes in the carrying amounts of goodwill from December 31, ~~2020~~2021 through the ~~six-month~~three-month period ended ~~June 30, 2022~~March 31, 2023 were as follows (in thousands):


		Transportation Solutions		Parts & Services		Total			Transportation Solutions		Parts & Services		Total

Balance at December 31, 2020
Goodwill		$	188,775	$	119,185	$	307,960
Accumulated impairment losses		(68,257)		(40,143)		(108,400)
Net balance as of December 31, 2020		120,518		79,042		199,560
Impact of divestiture on goodwill		—		(11,101)		(11,101)
Effects of foreign currency		(11)		(5)		(16)

Balance at December 31, 2021	Balance at December 31, 2021							Balance at December 31, 2021
Goodwill	Goodwill	188,764		108,079		296,843		Goodwill	$	188,764	$	108,079	$	296,843
Accumulated impairment losses	Accumulated impairment losses	(68,257)		(40,143)		(108,400)		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		Net balance as of December 31, 2021	120,507		67,936		188,443

Effects of foreign currency	Effects of foreign currency	(3)		(2)		(5)		Effects of foreign currency	(5)		(4)		(9)
Balance at March 31, 2022
Balance at December 31, 2022								Balance at December 31, 2022
Goodwill	Goodwill	188,761		108,077		296,838		Goodwill	188,759		108,075		296,834
Accumulated impairment losses	Accumulated impairment losses	(68,257)		(40,143)		(108,400)		Accumulated impairment losses	(68,257)		(40,143)		(108,400)
Net balance as of March 31, 2022		120,504		67,934		188,438
Net balance as of December 31, 2022								Net balance as of December 31, 2022	120,502		67,932		188,434
Effects of foreign currency	Effects of foreign currency	1		1		2		Effects of foreign currency	(8)		(4)		(12)
Balance at June 30, 2022
Balance at March 31, 2023								Balance at March 31, 2023
Goodwill	Goodwill	188,762		108,078		296,840		Goodwill	188,751		108,071		296,822
Accumulated impairment losses	Accumulated impairment losses	(68,257)		(40,143)		(108,400)		Accumulated impairment losses	(68,257)		(40,143)		(108,400)
Net balance as of June 30, 2022		$	120,505	$	67,935	$	188,440
Net balance as of March 31, 2023								Net balance as of March 31, 2023	$	120,494	$	67,928	$	188,422

5. NONCONTROLLING INTEREST AND VARIABLE INTEREST ENTITIES (“VIEs”)

VIEs & Consolidation

The Company consolidates those entities in which it has a direct or indirect controlling financial interest based on either the variable interest model (the “VIE model”) or the voting interest model (the “VOE model”).

VIEs are entities that, by design, either (i) lack sufficient equity to permit the entity to finance its activities without additional subordinated financial support from other parties, or (ii) have equity investors that do not have the ability to make significant decisions relating to the entity’s operations through voting rights, or do not have the obligation to absorb the expected losses, or do not have the right to receive the residual returns of the entity.

The primary beneficiary of a VIE is required to consolidate the assets and liabilities of the VIE. The primary beneficiary is the party that has both (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance; and (ii) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE through its interest in the VIE.

To assess whether the Company has the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, the Company considers all the facts and circumstances, including its role in establishing the VIE and its ongoing rights and responsibilities. This assessment includes identifying the activities that most significantly impact the VIE’s economic performance and identifying which party, if any, has power over those activities. In general, the parties that make the most significant decisions affecting the VIE (typically management and representation on the board of directors as well as control of the overall strategic direction of the entity) and have the right to unilaterally remove those decision-makers are deemed to have the power to direct the activities of a VIE.

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To assess whether the Company has the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE, the Company considers all of its economic interests, which primarily include the obligation to absorb losses or fund expenditures or losses (if needed), that are deemed to be variable interests in the VIE. This assessment requires the Company to apply judgment in determining whether these interests, in the aggregate, are considered potentially significant to the VIE. Factors considered in assessing the significance include: the design of the VIE, including its capitalization structure; subordination of interests; payment priority; relative share of interests held across various classes within the VIE’s capital structure; and the reasons why the interests are held by the Company.

At the VIE’s inception, the Company determines whether it is the primary beneficiary and if the VIE should be consolidated based on the facts and circumstances. The Company then performs on-going reassessments of the VIE based on reconsideration events and reevaluates whether a change to the consolidation conclusion is required each reporting period. If the Company is not deemed to be the primary beneficiary in a VIE, the Company accounts for the investment or other variable interests in a VIE in accordance with the applicable GAAP.

Entities that do not qualify as a VIE are assessed for consolidation under the VOE model. Under the VOE model, the Company consolidates the entity if it determines that it, directly or indirectly, has greater than 50% of the voting shares and that other equity holders do not have substantive voting, participating or liquidation rights. The Company has no entities consolidated under the VOE model.

At each reporting period, the Company reassesses whether it remains the primary beneficiary for VIEs consolidated under the VIE model.

Wabash Parts LLC

During the second quarter of 2022, the Company unified and expanded its parts and distribution capabilities by executing an agreement with a partner to create a new legal entity (Wabash Parts LLC, “WP”) to operate a parts and services distribution platform. The Company holds 50% ownership in WP while its partner holds the remaining 50%. Initial capital contributions were insignificant. WP has no debt or other financial obligations other than typical operating expenses and costs. Creditors of WP do not have recourse to the general credit of the Company. The operating agreement requires excess cash distributions, as defined in the agreement, no later than 30 days after the end of the second and fourth quarters of each year in proportion to the respective ownership interests.

The operating agreement provides the Company’s partner with a put right that would require the Company to purchase its partner’s interest in WP. Upon receiving notice that the Company’s partner has exercised the put right, a valuation will occur as stipulated within the operating agreement. Such put right has not been exercised by the Company’s partner and is therefore not mandatorily redeemable as of the current period end date, however the existence of the put right that is beyond the Company’s control requires the noncontrolling interest to be presented in the temporary equity section of the Company’s Condensed Consolidated Balance Sheets.

Because the entity does not have sufficient equity at risk to permit it to carry on its activities without additional financial support, the Company concluded that WP is a VIE. The Company has the power to direct the activities of WP through majority representation on the Board of Directors as well as control related to the management and overall strategic direction of the entity. In addition, the Company has the obligation to absorb the benefits and losses of WP that could potentially be significant to the entity. The Company also has a requirement to provide funding to the entity if needed. Given the facts and circumstances specific to WP, the Company concluded that it is the primary beneficiary and, as such, is required to consolidate the entity. WP’s results of operations are included in the Parts & Services operating and reportable segment. Through ~~June 30, 2022,~~March 31, 2023, the Company did not provide financial or other support to this VIE that it was not contractually obligated to provide. As of ~~June 30, 2022,~~March 31, 2023, the Company does not have any obligations to provide financial support to WP.

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The following table presents the assets and liabilities of the WP VIE consolidated on the Company’s Condensed Consolidated Balance Sheets as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 (in thousands):


	June 30, 2022		December 31, 2021
~~Assets~~
~~Current assets:~~
~~Cash and cash equivalents~~	$	~~664~~	$	—
~~Accounts receivable, net~~	~~1,312~~		—
~~Inventories, net~~	~~253~~		—
~~Prepaid expenses and other~~	—		—
~~Total current assets~~	~~2,229~~		—
~~Property, plant, and equipment, net~~	—		—
~~Other assets~~	~~147~~		—
~~Total assets~~	$	~~2,376~~	$	—
~~Liabilities~~
~~Current liabilities:~~
~~Accounts payable~~	$	~~2,003~~	$	—
~~Other accrued liabilities~~	—		—
~~Total current liabilities~~	~~2,003~~		—
~~Other non-current liabilities~~	—		—
~~Total liabilities~~	$	~~2,003~~	$	—


	March 31, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	2,165	$	1,379
Accounts receivable, net	1,735		1,509
Inventories, net	151		138
Prepaid expenses and other	77		16
Total current assets	4,128		3,042
Property, plant, and equipment, net	—		—
Other assets	290		141
Total assets	$	4,418	$	3,183
Liabilities
Current liabilities:
Accounts payable	$	2,996	$	2,136
Other accrued liabilities	32		23
Total current liabilities	3,028		2,159
Other non-current liabilities	—		—
Total liabilities	$	3,028	$	2,159

The following table is a rollforward of activities in the Company’s noncontrolling interest (in thousands):


	2023		2022
Balance at January 1	$	512	$	—
Net income attributable to noncontrolling interest	183		—
Other comprehensive income (loss)	—		—
Distributions declared to noncontrolling interest	—		—
Balance at March 31	$	695	$	—

~~Six Months Ended~~
~~June 30, 2022~~

Six Months Ended
June 30, 2021

~~Balance at beginning of period~~

—

~~Net income attributable to noncontrolling interest~~

~~187~~

—

~~Other comprehensive income (loss)~~

—

~~Distributions declared to noncontrolling interest~~

—

~~Balance at end of period~~

~~187~~

—

6. 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, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Raw materials and components	Raw materials and components	$	196,283	$	174,915	Raw materials and components	$	187,432	$	176,080
Finished goods	Finished goods	83,185		42,933		Finished goods	108,466		50,005
Work in progress	Work in progress	18,694		14,133		Work in progress	12,009		9,983
Aftermarket parts	Aftermarket parts	6,186		4,903		Aftermarket parts	7,121		7,065
Used trailers	Used trailers	990		737		Used trailers	615		737
		$	305,338	$	237,621		$	315,643	$	243,870

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7. PREPAID EXPENSES AND OTHER

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


		June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Chassis converter pool agreements	Chassis converter pool agreements	$	11,217	$	18,185	Chassis converter pool agreements	$	23,423	$	20,345
Assets held for sale	Assets held for sale	—		350		Assets held for sale	—		—
Income tax receivables	Income tax receivables	3,356		10,386		Income tax receivables	106		2,358

Insurance premiums & maintenance/subscription agreements	Insurance premiums & maintenance/subscription agreements	9,594		3,290		Insurance premiums & maintenance/subscription agreements	8,619		3,949
Commodity swap contracts	Commodity swap contracts	4,280		7,963		Commodity swap contracts	3,947		2,674
All other	All other	3,533		3,621		All other	6,339		5,601
		$	31,980	$	43,795		$	42,434	$	34,927

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~~There were no assets held for sale as of ~~December 31, 2021 related to property, plant, and equipment assets that were unused and were actively being marketed for sale.~~either date presented. 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 9, 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 investments held by the Company’s captive insurance subsidiary ~~as well as~~and other various prepaid and other assets. As of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, there was no restricted cash included in prepaid expenses and other current assets.

8. DEBT

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


		June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Senior Notes due 2028	Senior Notes due 2028	$	400,000	$	400,000	Senior Notes due 2028	$	400,000	$	400,000
Revolving Credit Agreement	Revolving Credit Agreement	59,000		33,035		Revolving Credit Agreement	—		—

		459,000		433,035			400,000		400,000
Less: unamortized discount and fees	Less: unamortized discount and fees	(4,494)		(4,720)		Less: unamortized discount and fees	(4,023)		(4,182)
Less: current portion	Less: current portion	—		—		Less: current portion	—		—
		$	454,506	$	428,315		$	395,977	$	395,818

Senior Notes due 2028

On October 6, 2021, the Company closed on an offering of $400 million in aggregate principal amount of its 4.50% unsecured Senior Notes due 2028 (the ~~“New Senior~~“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 4.50% and pay interest semi-annually in cash in arrears on April 15 and October 15 of each year. The ~~New~~ Senior Notes will mature on October 15, 2028. At any time prior to October 15, 2024, the Company may redeem some or all of the ~~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 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 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 ~~New~~ Senior Notes at a price equal to 101% of the aggregate principal amount of the ~~New~~ Senior Notes, plus any accrued and unpaid interest to, but not including, the date of repurchase.

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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’ general unsecured senior obligations and will be subordinated to all of the Company and 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 subordinated to any existing and future debt of any of the Company’s subsidiaries that are not Guarantors, to the extent of the assets of those subsidiaries.

Subject to a number of exceptions and qualifications, the Indenture restricts the Company’s ability and the ability of certain of its subsidiaries 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 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, 2022,~~March 31, 2023, the Company was in compliance with all covenants.

Contractual coupon interest expense and accretion of fees for the ~~New~~ Senior Notes for ~~the three-~~each three-month period ended March 31, 2023 and ~~six-month periods ended June 30,~~ 2022 was $4.5 million and $0.2 ~~million, and $9.0 million and $0.3~~ million, respectively. Contractual coupon interest expense and accretion of fees for the Senior Notes 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 New Senior Notes during the three- and six-month periods ended June 30, 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- and six-month periods ended June 30, 2021 was $4.5 million and $9.0 million, respectively. Contractual coupon interest expense and accretion of discount and fees are included in ~~Interest expense~~ ~~on the Company’s Condensed Consolidated Statements of Operations.~~

Revolving Credit Agreement

On ~~December 21, 2018,~~September 23, 2022, the Company entered into the Third Amendment to 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”), certain of its subsidiaries as guarantors, 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”~~“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 “First Amendment”) among~~dated as of December 21, 2018 (as amended from time to time, the ~~Company, certain of its subsidiaries party thereto,~~“Revolving Credit Agreement”).

Under the Revolving Credit Agreement, the lenders ~~party thereto, and the Revolver Agent. The First Amendment primarily made conforming changes~~agree to make available a $350 million revolving credit facility to the ~~provisions in~~Borrowers with a scheduled maturity date of September 23, 2027. The Company has the option to increase the total commitments under the facility by up to an additional $175 million, subject to certain conditions, including obtaining agreements from one or more lenders, whether or not party to the Revolving Credit Agreement, to reflect modifications made under the 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 optionprovide such additional commitments. Availability under the Revolving Credit Agreement to increase the total revolving credit commitments by $50 million from $175 million to $225 million. The Revolving Credit Agreement continues to include an increase option, which would allow the Company, subject tois based upon quarterly (or more frequent under certain ~~terms and conditions set forth in the Revolving Credit Agreement (including the approval~~circumstances) borrowing base certifications 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.~~

~~Table of Contents~~

~~The Revolving Credit Agreement~~Borrowers’ eligible inventory, eligible leasing inventory and eligible accounts receivable, and is ~~guaranteed~~reduced by certain ~~subsidiaries of the Company (the “Revolver Guarantors”) and is secured by (i) first priority security interests (subject only~~reserves in effect from time 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 (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.time.

Subject to availability, the Revolving Credit Agreement provides for a letter of credit subfacility in anthe amount ~~not in excess~~ of ~~$15~~$25 million and allows for swingline loans in anthe amount ~~not in excess~~ of ~~$17.5~~$35 million. Outstanding borrowings under the Revolving Credit Agreement bear interest at an annual rate, at the Borrowers’ election, equal to (i) ~~London Interbank Offer~~adjusted term Secured Overnight Financing 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.~~Credit Agreement. 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.~~of the Agent and the lenders.

The Revolving Credit Agreement is guaranteed by certain subsidiaries of the Company (the “Guarantors”) and is secured by substantially all personal property of the Borrowers and the Guarantors.

The Revolving Credit Agreement contains customary covenants limiting the ability of the Company and certain of its ~~affiliates~~subsidiaries 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%~~the greater of (a) 10.0% of the lesser of (i) the total revolving ~~commitment. The~~commitments and (ii) the borrowing base (such lesser amount, the “Line Cap”) and (b) $25 million. As of March 31, 2023, the Company was in compliance with all ~~covenants as~~covenants.

Table of ~~June 30, 2022.~~Contents

If availability under the Revolving Credit Agreement is less than ~~15%~~the greater of (i) 10% of the ~~total revolving commitment~~Line Cap and (ii) $25 million for three consecutive business days, or if there exists an event of default, amounts in any of the Borrowers’ and the ~~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 facility.

~~If the covenants under the~~The Revolving Credit Agreement ~~are breached,~~contains customary events of default. If an event of default occurs and is continuing, the lenders may, ~~subject to various customary cure rights,~~among other things, require the immediate payment of all amounts outstanding and foreclose on collateral. ~~Other customary~~In addition, in the case of an event of default arising from certain events of ~~default in~~bankruptcy or insolvency, the ~~Revolving Credit Agreement include, without limitation, failure to pay~~lenders’ 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 30 days.~~

During the three-month period ended June 30, 2022, the Company repaid $30.0 million of principal under the Revolving Credit Agreement. As of June 30, 2022, there was $59.0 million outstanding under the Revolving Facility. Interest expense under the Revolving Credit Agreement ~~for the three-~~would automatically terminate, and six-month periods ended June 30, 2022, was approximately $0.5 million and $0.8 million, respectively. During the three- and six-month periods ended June 30, 2021, and as of June 30, 2021, there were noall amounts outstanding under the Revolving ~~Facility. The Company paid no interest under the Revolving~~ Credit Agreement ~~during the three-and six-month periods ended June 30, 2021.~~would automatically become due and payable.

The Company’s liquidity position, defined as cash on hand and available borrowing capacity on the Revolving ~~Facility,~~Credit Agreement, amounted to ~~$298.1~~$410.4 million as of ~~June 30, 2022~~March 31, 2023 and ~~$258.0~~$401.2 million as of December 31, ~~2021.~~2022.

During the ~~fourth quarter of 2021,~~three-month period ended March 31, 2023, the Company ~~drew $50.0~~had net payments of principal of $43.0 million and net borrowings of principal of $43.0 million. As of March 31, 2023, there were no amounts outstanding under the Revolving Credit Agreement.

During the three-month period ended March 31, 2022, the Company borrowed $56.0 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.

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~~New Term Loan Credit Agreement~~

Agreement. As of ~~June 30, 2021, the Company had $108.8~~March 31, 2022, there was $89.0 million outstanding under the ~~New Term Loan~~Revolving Credit Agreement.

Interest expense under the Revolving Credit Agreement ~~(which was repaid in full during~~for the ~~fourth quarter of 2021), none of which was classified as current on the Company’s Condensed Consolidated Balance Sheets. For the three- and six-month~~three-month periods ended ~~June 30, 2021,~~March 31, 2023 and March 31, 2022, was approximately $0.2 million and $0.3 million, respectively. Interest expense under the ~~New Term Loan~~Revolving Credit Agreement the Company paid interest of $1.3 million and $2.7 million, respectively. 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, 2021, the Company incurred charges of less than $0.1 million and $0.1 million for amortization of fees and original issuance discount. Amortization of fees and original issuance discount areis included in Interest expensein the Company’s Condensed Consolidated Statements of Operations.

9. FINANCIAL DERIVATIVE INSTRUMENTS

Commodity Pricing Risk

As of ~~June 30, 2022,~~March 31, 2023, the Company was party to commodity swap contracts for specific commodities with notional amounts of approximately ~~$90.3~~$73.3 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 ~~2023.~~2024. The effective portion of the hedging transaction is recognized in Accumulated Other Comprehensive Income (Loss) (“AOCI”) and transferred to earnings when the forecasted hedged transaction takes place or when the forecasted hedged transaction is no longer probable to occur.

Financial Statement Presentation

As of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, 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, 2022		December 31, 2021			Balance Sheet Caption	March 31, 2023		December 31, 2022
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	$	4,280	$	7,963	Commodity swap contracts	Prepaid expenses and other	$	3,947	$	2,674
Commodity swap contracts	Commodity swap contracts	Accounts payable and Other accrued liabilities	(5,798)		(5,121)		Commodity swap contracts	Accounts payable and Other accrued liabilities	(2,228)		(1,653)
Total derivatives designated as hedging instruments	Total derivatives designated as hedging instruments		$	(1,518)	$	2,842	Total derivatives designated as hedging instruments		$	1,719	$	1,021

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The following table summarizes the gain or loss recognized in AOCI as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 and the amounts reclassified from AOCI into earnings for the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~ (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, 2022			December 31, 2021			Three Months Ended June 30,					Six Months Ended June 30,						March 31, 2023			December 31, 2022			Three Months Ended March 31,
				2022				Location of Gain (Loss) Reclassified from AOCI into Earnings (Effective Portion)		2021			2022		2021						2023				Location of Gain (Loss) Reclassified from AOCI into Earnings (Effective Portion)		2022
Derivatives instruments	Derivatives instruments																	Derivatives instruments
Commodity swap contracts	Commodity swap contracts	$	(3,177)	$	2,848		Cost of sales			$	8,374		$	12,563	$	9,410	Commodity swap contracts		$	673	$	909		Cost of sales			$	5,298

Over the next 12 months, the Company expects to reclassify approximately ~~$4.2~~$0.9 million of pretax deferred ~~losses,~~gains, related to the commodity swap contracts, from AOCI to cost of sales as inventory purchases are settled.

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10. 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~~1 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,~~March 31, 2023, leased assets obtained in exchange for new operating lease liabilities totaled approximately $0.3 million. During the three months ended March 31, 2022, leased assets obtained in exchange for new operating lease liabilities totaled approximately ~~$8.9~~$1.3 million. ~~During the three months ended June 30, 2021, leased assets obtained in exchange for new operating lease liabilities were insignificant.~~ As of ~~June 30, 2022,~~March 31, 2023, obligations related to operating leases that the Company has executed but have not yet commenced ~~totaled~~were insignificant. Subsequent to March 31, 2023, the Company executed operating leases and obligations related to these leases totaling approximately ~~$0.2~~$0.4 million on a non-discounted basis, which the Company generally expects to be recognized over the next ~~three~~five years.

~~During~~As described in the ~~three and six months~~Company Annual Report on Form 10-K for the year ended ~~June 30,~~December, 31, 2022, during 2022, the Company entered into sale-leaseback-sublease transactions. ~~Amounts related to~~Such contracts were entered into in contemplation of each other and are thus recorded on a net basis. The net revenue from these ~~transactions during~~contracts was insignificant for the ~~second quarter of 2022 were insignificant.~~three months ended March 31, 2023 and 2022. In addition, certain of the transactions occurred with a related party—such transactions were at market value and arm’s length. As of March 31, 2023, the Company has no other significant lease agreements in place for which the Company is a lessor or sublessor.

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


		Classification	June 30, 2022		December 31, 2021			Classification	March 31, 2023		December 31, 2022
Right-of-Use Assets	Right-of-Use Assets						Right-of-Use Assets
Operating	Operating	Other assets	$	19,139	$	11,379	Operating	Other assets	$	21,747	$	23,003
Finance		Property, plant and equipment, net of depreciation	—		2,658
Total leased ROU assets			$	19,139	$	14,037

Liabilities	Liabilities						Liabilities
Current	Current						Current
Operating	Operating	Other accrued liabilities	$	5,160	$	3,507	Operating	Other accrued liabilities	$	5,994	$	6,120
Finance		Current portion of finance lease obligations	—		59

Noncurrent	Noncurrent						Noncurrent
Operating	Operating	Non-current liabilities	13,980		7,872		Operating	Other non-current liabilities	15,753		16,883
Finance		Finance lease obligations	—		—

Total lease liabilities	Total lease liabilities		$	19,140	$	11,438	Total lease liabilities		$	21,747	$	23,003

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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, 2022 Three Months Ended
June 30, 2021
Operating lease cost Cost of sales, selling expenses and general and administrative expense $ 1,209 $ 1,229
Finance lease cost
Amortization of ROU leased assets Depreciation and amortization within Cost of sales — 36
Interest on lease liabilities Interest expense — 7
Net lease cost $ 1,209 $ 1,272

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Classification Six Months Ended
June 30, 2022 Six Months Ended
June 30, 2021
Operating lease cost Cost of sales, selling expenses and general and administrative expense $ 2,318 $ 2,484
Finance lease cost
Amortization of ROU leased assets Depreciation and amortization within Cost of sales 36 72
Interest on lease liabilities Interest expense 1 15
Net lease cost $ 2,355 $ 2,571


	Classification	Three Months Ended March 31, 2023		Three Months Ended March 31, 2022
Operating lease cost	Cost of sales, selling expenses and general and administrative expense	$	1,871	$	1,109
Finance lease cost
Amortization of ROU leased assets	Depreciation and amortization within Cost of sales	—		36
Interest on lease liabilities	Interest expense	—		1
Net lease cost		$	1,871	$	1,146

Maturity of the Company’s lease liabilities as of ~~June 30, 2022~~March 31, 2023 is as follows (in thousands):


		Operating Leases		Finance Leases		Total			Operating Leases		Finance Leases		Total
2022 (remainder)		$	3,089	$	—	$	3,089
2023		5,523		—		5,523
2023 (remainder)								2023 (remainder)	$	5,301	$	—	$	5,301
2024	2024	4,408		—		4,408		2024	6,083		—		6,083
2025	2025	3,386		—		3,386		2025	5,019		—		5,019
2026	2026	2,894		—		2,894		2026	4,463		—		4,463
2027								2027	2,364		—		2,364
Thereafter	Thereafter	2,025		—		2,025		Thereafter	794		—		794
Total lease payments	Total lease payments	$	21,325	$	—	$	21,325	Total lease payments	$	24,024	$	—	$	24,024
Less: interest	Less: interest	2,185		—				Less: interest	2,277		—
Present value of lease payments	Present value of lease payments	$	19,140	$	—			Present value of lease payments	$	21,747	$	—

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, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Weighted average remaining lease term (years)	Weighted average remaining lease term (years)					Weighted average remaining lease term (years)
Operating leases	Operating leases	4.2		4.3		Operating leases	4.1		4.3
Finance leases		0.0		0.1

Weighted average discount rate	Weighted average discount rate					Weighted average discount rate
Operating leases	Operating leases	5.02	%	5.12	%	Operating leases	4.91	%	4.92	%
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, 2022		Six Months Ended June 30, 2021			Three Months Ended March 31, 2023		Three Months Ended March 31, 2022
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	$	2,342	$	2,450	Operating cash flows from operating leases	$	1,895	$	1,120
Operating cash flows from finance leases	Operating cash flows from finance leases	$	1	$	9	Operating cash flows from finance leases	$	—	$	1
Financing cash flows from finance leases	Financing cash flows from finance leases	$	59	$	172	Financing cash flows from finance leases	$	—	$	59

1916

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11. OTHER ACCRUED LIABILITIES

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


		June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Warranty	Warranty	$	21,206	$	22,045	Warranty	$	21,557	$	22,061
Chassis converter pool agreements	Chassis converter pool agreements	11,217		18,185		Chassis converter pool agreements	23,423		20,345
Payroll and related taxes	Payroll and related taxes	17,772		15,679		Payroll and related taxes	18,208		29,219
Customer deposits	Customer deposits	26,456		17,646		Customer deposits	34,999		32,129
Self-insurance	Self-insurance	11,073		11,152		Self-insurance	11,291		10,718
Accrued interest	Accrued interest	3,885		4,288		Accrued interest	8,372		3,854
Operating lease obligations	Operating lease obligations	5,160		3,507		Operating lease obligations	5,994		6,120
Accrued taxes	Accrued taxes	16,976		8,425		Accrued taxes	37,218		24,793
All other	All other	14,182		14,389		All other	12,782		9,088
		$	127,927	$	115,316		$	173,844	$	158,327

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


		2022		2021			2023		2022
Balance as of January 1	Balance as of January 1	$	22,045	$	20,570	Balance as of January 1	$	22,061	$	22,045
Provisions and revisions to estimates	Provisions and revisions to estimates	663		2,652		Provisions and revisions to estimates	756		946

Payments	Payments	(1,502)		(2,237)		Payments	(1,260)		(847)
Balance as of June 30		$	21,206	$	20,985
Balance as of March 31						Balance as of March 31	$	21,557	$	22,144

The Company offers a limited warranty for its products with a coverage period that ranges between ~~one~~1 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.

12. 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, the Company holds 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, 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 ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 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, 2022
March 31, 2023											March 31, 2023
Commodity swap contracts	Commodity swap contracts	Recurring	$	(1,518)	$	—	$	(1,518)	$	—	Commodity swap contracts	Recurring	$	1,719	$	—	$	1,719	$	—
Mutual funds	Mutual funds	Recurring	$	6,300	$	6,300	$	—	$	—	Mutual funds	Recurring	$	8,237	$	8,237	$	—	$	—
Life-insurance contracts	Life-insurance contracts	Recurring	$	15,226	$	—	$	15,226	$	—	Life-insurance contracts	Recurring	$	16,141	$	—	$	16,141	$	—
December 31, 2021
December 31, 2022											December 31, 2022
Commodity swap contracts	Commodity swap contracts	Recurring	$	2,842	$	—	$	2,842	$	—	Commodity swap contracts	Recurring	$	1,021	$	—	$	1,021	$	—
Mutual funds	Mutual funds	Recurring	$	6,183	$	6,183	$	—	$	—	Mutual funds	Recurring	$	6,579	$	6,579	$	—	$	—
Life-insurance contracts	Life-insurance contracts	Recurring	$	18,670	$	—	$	18,670	$	—	Life-insurance contracts	Recurring	$	15,509	$	—	$	15,509	$	—

Estimated Fair Value of Debt

The estimated fair value of debt at ~~June 30, 2022~~March 31, 2023 consists primarily of the Senior Notes due 2028 and any borrowings under the Revolving Credit Agreement (see Note 8). The fair value of the Senior Notes due 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~~Credit Agreement are adjusted regularly to reflect current market rates and thus carrying value approximates fair value for any borrowings.

The Company’s carrying and estimated fair value of debt at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 were as follows (in thousands):


		June 30, 2022											December 31, 2021												March 31, 2023											December 31, 2022
		Carrying Value			Fair Value								Carrying Value			Fair Value									Carrying Value			Fair Value								Carrying Value			Fair Value
				Level 1			Level 2			Level 3					Level 1			Level 2			Level 3						Level 1			Level 2			Level 3					Level 1			Level 2			Level 3
Instrument	Instrument																									Instrument
Senior Notes due 2028	Senior Notes due 2028	$	395,506		$	—		$	307,107		$	—	$	395,280		$	—		$	399,727		$	—	Senior Notes due 2028	$	395,977		$	—		$	346,480		$	—	$	395,818		$	—		$	337,237		$	—
Revolving Facility		59,000			—			59,000			—		33,035			—			33,035			—
Revolving Credit Agreement																								Revolving Credit Agreement	—			—			—			—		—			—			—			—

		$	454,506		$	—		$	366,107		$	—	$	428,315		$	—		$	432,762		$	—		$	395,977		$	—		$	346,480		$	—	$	395,818		$	—		$	337,237		$	—

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 in the condensed consolidated financial statements.

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13. COMMITMENTS AND CONTINGENCIES

As of ~~June 30, 2022,~~March 31, 2023, the Company was named as a defendant or was otherwise involved in numerous legal proceedings and governmental examinations, including class action lawsuits, 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.~~Company except for the matter described in further detail below. 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.

21Legal Matter Estimated Liability

~~Table~~As of ~~Contents~~March 31, 2023, the Company was named as a defendant in California state court in two purported class action lawsuits, alleging wage and hour claims under California-specific employment laws (collectively, “the Matters”). The defense of both lawsuits is being handled in conjunction with one another. During the three months ended March 31, 2023, in accordance with Accounting Standards Codification (“ASC”) 450, the Company concluded a liability related to the Matters was probable and estimable. As such, an estimated liability of $3.0 million is included in

General & administrative expenses in the Condensed Consolidated Statements of Operations. Subsequent to March 31, 2023, the Company reached an agreement to resolve the Matters via settlement for an amount materially consistent with the estimated liability.

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~~In 2020, 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. In December 2021, after completing further groundwater sampling work, the Company submitted to IDEM a supplemental written report, which again stated that the Company is not a responsible party and the Company’s properties are not a source of any contamination. In June 2022, the Company and other PRPs finalized Work Plan Addendum No. 3, which provides for additional groundwater sampling on another PRP property in the next ~~90 days.~~six months. As of ~~June 30, 2022,~~March 31, 2023, 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 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, 2022,~~March 31, 2023, the Company’s outstanding chassis converter pool with the manufacturer totaled ~~$11.2~~$23.4 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 are handled as consigned inventory belonging to the manufacturer and totaled approximately ~~$0.4~~$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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14. NET INCOME PER COMMON SHARE

Basic earnings per common 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 common 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 attributable to common stockholders per common share is determined using net income attributable to common stockholders as the numerator and the number of shares included in the denominator as shown below (in thousands, except per share amounts).


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
Basic net income attributable to common stockholders per share:	Basic net income attributable to common stockholders per share:									Basic net income attributable to common stockholders per share:
Net income attributable to common stockholders	Net income attributable to common stockholders	$	22,552	$	12,252	$	34,626	$	15,469	Net income attributable to common stockholders	$	51,213	$	12,074
Weighted average common shares outstanding	Weighted average common shares outstanding	49,034		51,272		49,019		51,697		Weighted average common shares outstanding	47,770		49,004
Basic net income attributable to common stockholders per share	Basic net income attributable to common stockholders per share	$	0.46	$	0.24	$	0.71	$	0.30	Basic net income attributable to common stockholders per share	$	1.07	$	0.25

Diluted net income attributable to common stockholders per share:	Diluted net income attributable to common stockholders per share:									Diluted net income attributable to common stockholders per share:
Net income attributable to common stockholders	Net income attributable to common stockholders	$	22,552	$	12,252	$	34,626	$	15,469	Net income attributable to common stockholders	$	51,213	$	12,074

Weighted average common shares outstanding	Weighted average common shares outstanding	49,034		51,272		49,019		51,697		Weighted average common shares outstanding	47,770		49,004
Dilutive stock options and restricted stock	Dilutive stock options and restricted stock	501		717		643		775		Dilutive stock options and restricted stock	1,366		726
Diluted weighted average common shares outstanding	Diluted weighted average common shares outstanding	49,535		51,989		49,662		52,472		Diluted weighted average common shares outstanding	49,136		49,730
Diluted net income attributable to common stockholders per share	Diluted net income attributable to common stockholders per share	$	0.46	$	0.24	$	0.70	$	0.29	Diluted net income attributable to common stockholders per share	$	1.04	$	0.24

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15. 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. In addition, the Company’s policy is to estimate expected forfeitures on share-based awards. 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, excluding estimated forfeitures, was ~~$16.2~~$21.5 million at ~~June 30, 2022,~~March 31, 2023, for which the expense will be recognized through ~~2025.~~2026.

16. STOCKHOLDERS’ EQUITY

Share Repurchase Program

In August 2021, the Company announced that the Board of Directors approved the repurchase of an additional $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 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, 2022, $126.1~~March 31, 2023, $91.0 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, 2023 are summarized as follows (in thousands):


	Foreign Currency Translation		Derivative Instruments		Total
Balances at December 31, 2022	$	(1,791)	$	909	$	(882)
Net unrealized gains (losses) arising during the period(a)	564		130		694
Less: Net realized gains (losses) reclassified to net income(b)	—		366		366
Net change during the period	564		(236)		328
Balances at March 31, 2023	$	(1,227)	$	673	$	(554)

—————————

(a) Derivative instruments net of less than $0.1 million of tax liability for the three months ended March 31, 2023.

(b) Derivative instruments net of $0.1 million of tax liability for the three months ended March 31, 2023.

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


		Foreign Currency Translation		Derivative Instruments		Total			Foreign Currency Translation		Derivative Instruments		Total
Balances at December 31, 2021	Balances at December 31, 2021	$	(1,989)	$	2,848	$	859	Balances at December 31, 2021	$	(1,989)	$	2,848	$	859
Net unrealized gains (losses) arising during the period~~(a)~~(c)	Net unrealized gains (losses) arising during the period~~(a)~~(c)	243		17,555		17,798		Net unrealized gains (losses) arising during the period~~(a)~~(c)	243		17,555		17,798
Less: Net realized gains (losses) reclassified to net income(b)		—		3,970		3,970
Less: Net realized gains (losses) reclassified to net loss(d)								Less: Net realized gains (losses) reclassified to net loss(d)	—		3,970		3,970
Net change during the period	Net change during the period	243		13,585		13,828		Net change during the period	243		13,585		13,828
Balances at March 31, 2022	Balances at March 31, 2022	(1,746)		16,433		14,687		Balances at March 31, 2022	$	(1,746)	$	16,433	$	14,687
Net unrealized gains (losses) arising during the period(c)		(303)		(14,165)		(14,468)
Less: Net realized gains (losses) reclassified to net income(d)		—		5,445		5,445
Net change during the period		(303)		(19,610)		(19,913)
Balances at June 30, 2022		$	(2,049)	$	(3,177)	$	(5,226)

—————————

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

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

~~(c)~~ ~~Derivative instruments net of $4.7 million of tax benefit for the three months ended June 30, 2022.~~

~~(d)~~ ~~Derivative instruments net of $1.8 million of tax liability for the three months ended June 30, 2022.~~

~~Changes in AOCI by component, net~~

Table of ~~tax, for the six months ended June 30, 2021 are summarized as follows (in thousands):~~

Foreign Currency Translation Derivative Instruments Total
Balances at December 31, 2020 $ (2,182) $ 9,815 $ 7,633
Net unrealized gains (losses) arising during the period(e)
(303) 15,305 15,002
Less: Net realized gains (losses) reclassified to net loss(f)
— 775 775
Net change during the period (303) 14,530 14,227
Balances at March 31, 2021 (2,485) 24,345 21,860
Net unrealized gains (losses) arising during the period(g)
667 14,895 15,562
Less: Net realized gains (losses) reclassified to net income(h)
— 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

~~—————————~~

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

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

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

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

17. INCOME TAXES

For the three months ended ~~June 30, 2022,~~March 31, 2023, the Company recognized income tax expense of ~~$7.6~~$13.9 million compared to ~~$4.0 million for the same period in the prior year. The Company recognized income tax expense of $10.7 million in the first six months of 2022 compared to $5.8~~$3.1 million for the same period in the prior year. The effective tax rates for the first ~~six~~three months of 2023 and 2022 were 21.3% and ~~2021 were 23.5% and 27.3%~~20.3%, respectively. For the first ~~six~~three months of 2023 and 2022, the effective tax rate differs from the USU.S. Federal statutory rate of 21% primarily due to the impact of state and local taxes net of discrete items incurred related to stock-based compensation. For the first six 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.

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18. IMPAIRMENT AND SALES OF PROPERTY, PLANT, AND EQUIPMENT

There were no material impairments or sales of property, plant, and equipment during the three months ended March 31, 2023. During the first quarter of 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 a building (and the related land) for net proceeds of $1.1 million. A gain on sale of approximately $0.7 million was recognized as part of the sale. The impairment and gain on sale are included in Impairment and other, net in the Condensed Consolidated Statements of Operations.

~~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. Proceeds of the sale, net of transaction costs and cash divested, totaled approximately $20.8 million. Prior to the sale, Extract was an operating unit within the Diversified Products reporting segment. A gain on sale of approximately $1.9 million was recognized in connection with the divestiture, and a portion 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 8. The gain on sale is 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.~~

19. SEGMENTS

a. Segment Reporting

~~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~~Based on how the Chief Operating Decision Maker (“CODM”) manages the business, allocates resources, makes operating decisions, and evaluates operating ~~performance. Based on this realignment,~~performance, the Company ~~eliminated the historical Commercial Trailer Products, Diversified Products, and Final Mile Products segments and established 2~~manages its business in two 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 TS segment comprises the design and manufacturing operations for the Company’s transportation-related equipment and products. This includes dry and refrigerated van trailers, platform trailers, and the Company’s wood flooring production ~~facility, all of which were previously reported in the CTP segment.~~facility. The Company’s EcoNex™ products, ~~that were historically included in both~~which are under the ~~CTP and FMP segments~~Company’s AcuthermTM portfolio of solutions designed for intelligent thermal management, are ~~now~~also 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.~~tanks. 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 ~~each of~~ the Company’s ~~historical segments’~~ parts and services ~~businesses~~business as well as the upfitting component of our truck bodies business. In addition, the Company’s Composites business, which focuses on the use of DuraPlate® composite panels beyond the semi-trailer market, is also part of the P&S segment. This segment ~~(previously reported~~also includes the Wabash Parts LLC parts and distribution entity we created with our partner during the second quarter of 2022 as further described in ~~the DPG segment).~~Note 5. Finally, the P&S segment includes the Company’s Engineered Products business, ~~(previously reported in the DPG segment), including~~which manufactures 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. Segment assets are not presented as it is not a measure reviewed by the CODM in allocating resources and assessing performance.

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Reportable segment information is as follows (in thousands):

Three Months Ended June 30, 2022 Transportation Solutions Parts & Services Corporate and
Eliminations Consolidated
Net sales
External customers $ 593,125 $ 49,644 $ — $ 642,769
Intersegment sales 2,857 751 (3,608) —
Total net sales $ 595,982 $ 50,395 $ (3,608) $ 642,769
Income (loss) from operations $ 47,973 $ 8,138 $ (20,203) $ 35,908
Three Months Ended June 30, 2021 Transportation Solutions Parts & Services Corporate and
Eliminations Consolidated
Net sales
External customers $ 401,085 $ 48,337 $ — $ 449,422
Intersegment sales 1,092 415 (1,507) —
Total net sales $ 402,177 $ 48,752 $ (1,507) $ 449,422
Income (loss) from operations $ 26,815 $ 8,061 $ (12,192) $ 22,684
Six Months Ended June 30, 2022 Transportation Solutions Parts & Services Corporate and
Eliminations Consolidated
Net sales
External customers $ 1,094,165 $ 95,365 $ — $ 1,189,530
Intersegment sales 3,882 1,738 (5,620) —
Total net sales $ 1,098,047 $ 97,103 $ (5,620) $ 1,189,530
Income (loss) from operations $ 79,670 $ 14,927 $ (38,554) $ 56,043
Six Months Ended June 30, 2021 Transportation Solutions Parts & Services Corporate and
Eliminations Consolidated
Net sales
External customers $ 745,423 $ 96,002 $ — $ 841,425
Intersegment sales 1,873 1,345 (3,218) —
Total net sales $ 747,296 $ 97,347 $ (3,218) $ 841,425
Income (loss) from operations $ 43,438 $ 14,445 $ (23,984) $ 33,899

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Three Months Ended March 31, 2023	Transportation Solutions		Parts & Services		Corporate and Eliminations		Consolidated
Net sales
External customers	$	575,296	$	45,656	$	—	$	620,952
Intersegment sales	2,775		1,484		(4,259)		—
Total net sales	$	578,071	$	47,140	$	(4,259)	$	620,952

Income (loss) from operations	$	87,116	$	9,209	$	(26,425)	$	69,900


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

b. Product Information

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


Three Months Ended June 30, 2022		Transportation Solutions		Parts & Services		Eliminations		Consolidated
Three Months Ended March 31, 2023												Three Months Ended March 31, 2023	Transportation Solutions		Parts & Services		Eliminations		Consolidated
New trailers	New trailers	$	508,430	$	188	$	(361)	$	508,257	79.1	%	New trailers	$	485,248	$	124	$	(362)	$	485,010	78.1	%
Used trailers	Used trailers	—		1,120		—		1,120		0.2	%	Used trailers	—		539		—		539		0.1	%
Components, parts and services	Components, parts and services	—		37,473		—		37,473		5.8	%	Components, parts and services	—		35,682		—		35,682		5.7	%
Equipment and other	Equipment and other	87,552		11,614		(3,247)		95,919		14.9	%	Equipment and other	92,823		10,795		(3,897)		99,721		16.1	%
Total net sales	Total net sales	$	595,982	$	50,395	$	(3,608)	$	642,769	100.0	%	Total net sales	$	578,071	$	47,140	$	(4,259)	$	620,952	100.0	%

Three Months Ended June 30, 2021		Transportation Solutions		Parts & Services		Eliminations		Consolidated
Three Months Ended March 31, 2022												Three Months Ended March 31, 2022	Transportation Solutions		Parts & Services		Eliminations		Consolidated
New trailers	New trailers	$	321,833	$	—	$	—	$	321,833	71.6	%	New trailers	$	437,963	$	54	$	(311)	$	437,706	80.1	%
Used trailers	Used trailers	—		378		—		378		0.1	%	Used trailers	—		569		—		569		0.1	%
Components, parts and services	Components, parts and services	—		34,260		—		34,260		7.6	%	Components, parts and services	—		33,564		(1,701)		31,863		5.8	%
Equipment and other	Equipment and other	80,344		14,114		(1,507)		92,951		20.7	%	Equipment and other	64,102		12,521		—		76,623		14.0	%
Total net sales	Total net sales	$	402,177	$	48,752	$	(1,507)	$	449,422	100.0	%	Total net sales	$	502,065	$	46,708	$	(2,012)	$	546,761	100.0	%

Six Months Ended June 30, 2022		Transportation Solutions		Parts & Services		Eliminations		Consolidated
New trailers		$	946,393	$	242	$	(672)	$	945,963	79.5	%
Used trailers		—		1,689		—		1,689		0.1	%
Components, parts and services		—		71,037		—		71,037		6.0	%
Equipment and other		151,654		24,135		(4,948)		170,841		14.4	%
Total net sales		$	1,098,047	$	97,103	$	(5,620)	$	1,189,530	100.0	%

Six Months Ended June 30, 2021		Transportation Solutions		Parts & Services		Eliminations		Consolidated
New trailers		$	590,763	$	—	$	—	$	590,763	70.2	%
Used trailers		165		1,225		—		1,390		0.2	%
Components, parts and services		—		26,362		—		26,362		3.1	%
Equipment and other		156,368		69,760		(3,218)		222,910		26.5	%
Total net sales		$	747,296	$	97,347	$	(3,218)	$	841,425	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~~“Wabash,” “Company,” ~~“Wabash,~~“us,” “we,” ~~“our,”~~ or ~~“us”~~“our”) 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, as amended (the “Exchange Act”). Forward-looking statements may include the words “may,” “will,” “estimate,” “intend,” “continue,” “believe,” “expect,” “plan” or “anticipate” and other similar words. Forward-looking statements convey the Company’s current expectations or forecasts of future events. Our “forward-looking statements” include, but are not limited to, statements regarding:

▪~~the highly cyclical nature of our business;~~

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

▪the highly cyclical nature of our business;

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

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

▪ongoing inflation;

▪the COVID-19 pandemic, or other outbreaks of 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 ability to obtain raw materials and components;

▪our ability to realize all of the expected enhanced revenue, earnings, and cash flow from our agreement to create Wabash Parts LLC;

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

▪our ability to attract and retain key personnel or a sufficient workforce;

▪our ability to execute on our long-term strategic plan and growth initiatives or to meet our long-term financial goals;

▪~~our ability to 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~~effectively manage, safeguard, design, manufacture, service, ~~interruptions or security breaches;~~repair, and maintain our leased (or subleased) trailers;

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

▪~~increased risks of international operations;~~changes to U.S. or foreign tax laws and the effects on our effective tax rate and future profitability;

▪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;

▪our ability to meet environmental, social, and governance (“ESG”) expectations or standards or to achieve our ESG goals;

▪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 indebtedness, financial condition and fulfillment of obligations thereunder;

▪~~changes to U.S. or foreign tax laws and the effects on our effective tax rate and future profitability;~~increased risks of international operations;

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

▪the 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.

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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, ~~2021.~~2022. 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”)~~declared a global pandemic related to COVID-19. ~~The~~This pandemic has created significant uncertainties and disruptions in the global economy. We continue to monitor the ~~pandemic~~ongoing challenges of an endemic infection and remain focused on the health and safety of our employees, as well as the health of our ~~business. In addition,~~business, as we manage our operating plans ~~considering~~and consider the most recent developments, ~~including~~ the ~~changes to~~ best practice guidelines by health experts, the ~~drop in new~~number of cases in the United States, and ~~changing~~ local, state, and federal requirements. ~~As new cases continue to drop, we are shifting from~~While the ~~crises of a pandemic to managing~~public health emergency has ended in the ~~ongoing challenges of an endemic infection.~~

~~While we are moving to an endemic phase,~~United States, the COVID-19 pandemic has had lasting effects and continues to cause supply chain, labor, and raw material constraints that impact global markets. As

Inflationary Cost Environment and Supply Chain Disruption

During the three months ended March 31, 2023, we continued to experience a ~~result, we have experienced~~certain degree of inflation across our supply chain, increased freight and logistics costs, and volatility in connection with labor shortages. While we continue to expect the global market downturn and overall impacts on our operations ~~are expected~~ to be temporary, the duration and severity of the impacts cannot be estimated at this time. ~~However, should the~~Continued or worsening disruptions ~~continue for an extended period of time or worsen, the impact~~to, and impacts 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.

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, 2022~~March 31, 2023 and ~~2021:~~2022:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
Net sales	Net sales	100.0	%	100.0	%	100.0	%	100.0	%	Net sales	100.0	%	100.0	%
Cost of sales	Cost of sales	87.9	%	87.6	%	88.6	%	87.8	%	Cost of sales	81.3	%	89.4	%
Gross profit	Gross profit	12.1	%	12.4	%	11.4	%	12.2	%	Gross profit	18.7	%	10.6	%

General and administrative expenses	General and administrative expenses	4.8	%	5.1	%	4.8	%	5.4	%	General and administrative expenses	5.8	%	4.8	%
Selling expenses	Selling expenses	1.1	%	1.3	%	1.1	%	1.5	%	Selling expenses	1.1	%	1.1	%
Amortization of intangibles	Amortization of intangibles	0.6	%	1.3	%	0.7	%	1.4	%	Amortization of intangibles	0.5	%	0.9	%
Impairment and other, net	Impairment and other, net	—	%	(0.4	%)	—	%	(0.1	%)	Impairment and other, net	—	%	0.1	%
Income from operations	Income from operations	5.6	%	5.0	%	4.7	%	4.0	%	Income from operations	11.3	%	3.7	%

Interest expense	Interest expense	(0.8	%)	(1.3	%)	(0.9	%)	(1.4	%)	Interest expense	(0.8	%)	(0.9	%)
Other, net	Other, net	(0.1	%)	(0.1	%)	—	%	(0.1	%)	Other, net	0.1	%	—	%
Income before income tax expense	Income before income tax expense	4.7	%	3.6	%	3.8	%	2.5	%	Income before income tax expense	10.5	%	2.8	%

Income tax expense	Income tax expense	1.2	%	0.9	%	0.9	%	0.7	%	Income tax expense	2.2	%	0.6	%
Net income	Net income	3.5	%	2.7	%	2.9	%	1.8	%	Net income	8.3	%	2.2	%

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For the three-month period ended ~~June 30, 2022,~~March 31, 2023, we recorded net sales of ~~$642.8~~$621.0 million compared to ~~$449.4~~$546.8 million in the prior year period. Net sales for the three-month period ended ~~June 30, 2022~~March 31, 2023 increased ~~$193.3~~$74.2 million, or ~~43.0%~~13.6%, compared to the prior year period, due primarily to an increase in revenue per new trailer unit and truck body. New trailer shipments decreased 0.7% primarily due to our previously announced intentional ramp-down of ~~17.9% on account~~manufacturing conventional refrigerated van trailers. In addition, despite a certain degree of ~~stronger demand in this market. Despite a decrease~~continued supply chain challenges, new truck body shipments increased 9.5%, which drove an increase in truck body ~~shipments~~revenue of ~~17.3%, which was primarily attributable to continued supply chain constraints, truck body revenue increased~~ approximately ~~$5.0~~$26.1 million. The higher new trailer (excluding conventional refrigerated van trailers) and truck body shipment volumes drove an increase of ~~48.2%~~15.1% in net sales within the TS reportable segment. ~~In addition, net~~Net sales within the P&S reportable segment increased ~~$1.6~~$0.4 million ~~despite the sale of Extract Technology~~® in the second quarter of 2021 (approximately $6.2 million in net sales during the second quarter of 2021) and closure of 17 service locations during the first nine months of 2021 (decrease in net sales of approximately $2.4 million fromcompared to the prior year ~~period). The increase in net sales within the P&S reportable segment~~period, which was due in part to the Wabash Parts LLC parts and distribution entity we created with our partner during the second quarter of 2022 as further described in Note ~~5, as well as overall higher demand for our parts, services, and upfitting offerings.~~5. Gross profit margin ~~decreased~~increased to ~~12.1%~~18.7% in the ~~second~~first quarter of ~~2022~~2023 compared to ~~12.4%~~10.6% in the prior year period primarily driven by higher ~~materials costs~~revenue per new trailer unit and truck body that ~~outweighed certain pricing actions to partially offset~~increased proportionately higher than our manufacturing costs. We generally observed continued strong demand for our products during the ~~increase in commodity costs. While we have observed a sustained increase in overall industry demand thus far during 2022,~~first quarter of 2023. In addition, we continue to experience some challenges as we ramp-up production, manage our supply chain, and hire additional labor. However, we remain focused on positioning ourselves to profitably capitalize on current demand while being vigilant to respond to any potential softening of the ~~current increase in demand~~industry and ~~industry upswings.~~

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overall economy.

For the three-month period ended ~~June 30, 2022,~~March 31, 2023, selling, general and administrative expenses increased ~~$9.3~~$10.4 million as compared to the same period in ~~2021.~~2022. As a percentage of net sales, selling, general and administrative expenses ~~decreased to 6.0%~~were 6.9% in the ~~second~~first quarter of ~~2022~~2023 as compared to ~~6.4%~~6.0% in the prior year 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 largely due to an increase in professional fees and outside services costs (including the estimated liability for the Matters, as defined and further described in Note 13), as well as higher employee-related costs, including benefits and incentive programs.

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.

Three Months Ended ~~June 30, 2022~~March 31, 2023 Compared with the Three Months Ended ~~June 30, 2021~~March 31, 2022

Net Sales

Net sales in the ~~second~~first quarter of ~~2022~~2023 increased ~~$193.3~~$74.2 million, or ~~43.0%~~13.6%, compared to the ~~second~~first quarter of ~~2021.~~2022. 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					Three Months Ended March 31,				Change
		2022		2021		Amount		%			2023		2022		Amount		%
		(prior to elimination of intersegment sales)									(prior to elimination of intersegment sales)
Sales by Segment	Sales by Segment									Sales by Segment
Transportation Solutions	Transportation Solutions	$	595,982	$	402,177	$	193,805	48.2	%	Transportation Solutions	$	578,071	$	502,065	$	76,006	15.1	%
Parts & Services	Parts & Services	50,395		48,752		1,643		3.4	%	Parts & Services	47,140		46,708		432		0.9	%

Eliminations	Eliminations	(3,608)		(1,507)		(2,101)				Eliminations	(4,259)		(2,012)		(2,247)
Total	Total	$	642,769	$	449,422	$	193,347	43.0	%	Total	$	620,952	$	546,761	$	74,191	13.6	%

New Units Shipped	New Units Shipped	(units)								New Units Shipped	(units)
Trailers	Trailers	13,670		11,595		2,075		17.9	%	Trailers	11,780		11,865		(85)		(0.7	%)
Truck bodies	Truck bodies	3,970		4,800		(830)		(17.3	%)	Truck bodies	3,815		3,485		330		9.5	%
Total	Total	17,640		16,395		1,245		7.6	%	Total	15,595		15,350		245		1.6	%

Used Units Shipped	Used Units Shipped	(units)								Used Units Shipped	(units)
Trailers	Trailers	40		15		25		166.7	%	Trailers	15		20		(5)		(25.0	%)

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TS segment sales, prior to the elimination of intersegment sales, were ~~$596.0~~$578.1 million for the ~~second~~first quarter of ~~2022,~~2023, an increase of ~~$193.8~~$76.0 million, or ~~48.2%~~15.1%, compared to the ~~second~~first quarter of ~~2021.~~2022. New trailers shipped during the ~~second~~first quarter of ~~2022~~2023 totaled ~~13,670~~11,780 trailers compared to ~~11,595~~11,865 trailers in the prior year period, a decrease of 0.7%, which was primarily driven by our previously announced intentional ramp-down of manufacturing conventional refrigerated van trailers. Despite a certain degree of continued supply chain challenges, new truck bodies shipped during the first quarter of 2023 totaled 3,815 truck bodies compared to 3,485 truck bodies in the prior year period, an increase of ~~17.9%~~9.5%. New truck bodies shipped during the second quarter of 2022 totaled 3,970 truck bodies compared to 4,800 truck bodies in the prior year period, a decrease of 17.3% primarily due to continued supply chain constraints. The increase in new trailer shipments and revenue per trailer unit across each of our product lines (excluding conventional refrigerated van trailers) and the increase in truck body shipments and revenue per truck body unit resulted in an overall increase in new trailer revenue, driven by strong demand for our van, tank, and platform trailers. Despite the decrease in truck body shipments from the prior year period, truck body revenue increased approximately 6.6%. Revenue per new trailer unit and truck body revenue. The increases were primarily due to strong demand, increased ~~across each of~~pricing to account for inflation, our curated customer portfolio, improved pricing processes, and improving mix from certain product ~~lines, due in part to pricing actions to partially offset the increase in commodity costs.~~lines.

P&S segment sales, prior to the elimination of intersegment sales, were ~~$50.4~~$47.1 million for the ~~second~~first quarter of ~~2022,~~2023, an increase of ~~$1.6~~$0.4 million, or ~~3.4%~~0.9%, compared to the ~~second~~first quarter of ~~2021.~~2022. The overall increase in sales for this segment was due ~~in part~~primarily to the Wabash Parts LLC parts and distribution entity, ~~we created with our partner as further described in Note 5 to our condensed consolidated financial statements,~~ which had approximately ~~$3.6~~$4.6 million of sales during the ~~second~~first quarter of ~~2022, as well as overall higher demand for our parts, services, and upfitting offerings. These increases were partially offset by the sale of our Extract Technology~~® business during the second quarter of 2021, which had sales totaling approximately $6.2 million during the second quarter of 2021. We also completed the closure of 17 service locations during the first nine months of 2021 that attributed approximately $2.4 million during the prior period.

~~Cost of Sales~~

Cost of sales was $564.7 million in the second quarter of 2022, an increase of $170.9 million, or 43.4%, 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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TS segment cost of sales was $530.1 million in the second quarter of 2022, an increase of $174.6 million, or 49.1%, 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 due to an increase in materials costs of $137.6 million, or 55.1%, and higher labor and employee-related costs of approximately $10.6 million. An additional increase related to other manufacturing costs, including outside services, operating supplies, and repairs and maintenance, which totaled approximately $6.6 million.

P&S segment cost of sales was $38.6 million in the second quarter of 2022, an increase of $0.1 million, or 0.2%, compared to the prior period. The increase in cost of sales for this segment was due in part to the Wabash Parts LLC parts and distribution entity we created with our partner as further described in Note 5 to our condensed consolidated financial statements, as well as overall higher demand for our parts, services, and upfitting solutions, which drove an overall increase in materials costs of approximately $3.8 million, or 14.1%.2023. This increase was ~~mostly~~partially offset by a decrease in ~~cost of sales due to the sale~~certain of our ~~Extract Technology~~® ~~business during the second quarter of 2021 and the closure of 17 service locations during the first nine months of 2021.~~

~~Gross Profit~~

Gross profit was $78.0 million in the second quarter of 2022, an increase of $22.4 million from the prior year period. Gross profit as a percentage of net sales was 12.1% for the second quarter of 2022, compared to 12.4% for the same period in 2021. Gross profit by segment was as follows (dollars in thousands):

Three Months Ended June 30, Change
2022 2021 Amount %
Gross Profit by Segment
Transportation Solutions $ 66,055 $ 46,660 $ 19,395 41.6 %
Parts & Services 11,830 10,262 1,568 15.3 %
Corporate & Eliminations 149 (1,314) 1,463
Total $ 78,034 $ 55,608 $ 22,426 40.3 %

TS segment gross profit was $66.1 million for the second quarter of 2022 compared to $46.7 million for the second quarter of 2021. Gross profit, prior to the elimination of intersegment sales, as a percentage of net sales, was 11.1% in the second quarter of 2022 compared to 11.6% in the comparative 2021 period. The overall increase in gross profit from the prior year period was primarily driven by an increase in our dry vans products and our truck bodies, platforms, and tank trailers, all of which were generally attributable to higher demand for these products compared to the prior year period. Gross profit as a percentage of net sales decreased from the prior year period primarily due to an increase in overall materials costs, which were partially offset by our pricing actions.

P&S segment gross profit was $11.8 million for the second quarter of 2022 compared to $10.3 million for the second quarter of 2021. Gross profit, prior to the elimination of intersegment sales, as a percentage of net sales, was 23.5% in the second quarter of 2022 compared to 21.0% in the 2021 period. This increase was generally related to higher gross profit in ourother parts, services, and upfitting offerings in the current year period, including Wabash Parts LLC, as well as exit costs incurred during the second quarter of 2021 related to the closure of service locations. These increases were partially offset by the sale of our Extract Technology® ~~business during the second quarter of 2021, which had gross profit totaling approximately $1.0 million during the second quarter of 2021.~~

~~General and Administrative Expenses~~

~~General and administrative expenses for the second quarter of 2022 increased $8.0 million, or 35.1%, from the prior year~~ period. The increase from the prior year period was due in part to an increase of approximately $3.7 million in professional fees and outside services/labor. There was also an increase in employee-related costs, including benefits and incentive programs, of approximately $1.5 million. In addition, depreciation, rental, and maintenance expenses increased a total of approximately $1.3 million. As a percentage of net sales, general and administrative expenses were 4.8% for the second quarter of 2022 compared to 5.1% for the second quarter of 2021. The overall decrease in general and administrative expenses as a percentage of net sales was primarily attributable to the increase in sales compared to the prior year period.

~~Selling Expenses~~

Selling expenses were $7.4 million in the second quarter of 2022, an increase of $1.3 million, or 21.6%, compared to the prior year period. The increase was primarily attributable to an increase in advertising costs and outside services expense totaling approximately $1.2 million. As a percentage of net sales, selling expenses were 1.1% for the second quarter of 2022 compared to 1.3% for the second quarter of 2021. The overall decrease in selling expenses as a percentage of net sales was primarily attributable to the increase in sales compared to the prior year period.

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~~Amortization of Intangibles~~

Amortization of intangibles was $3.8 million for the second quarter of 2022 compared to $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 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 during the fourth quarter of 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, 2021. In addition, we sold our Extract Technology~~® business during the second quarter of 2021 and wrote-off the related intangible assets as part of the sale. Finally, certain of the intangible assets recorded upon the acquisition of Walker in May 2012 became fully amortized during the second quarter of 2022.

~~Impairment and Other, Net~~

~~Impairment and other, net~~ was insignificant for the three months ended June 30, 2022 compared to a net gain of $1.8 million for the three months ended June 30, 2021. During the three months ended June 30, 2021, we sold our Extract Technology® ~~business and recognized a gain on sale of approximately $1.9 million. The gain on sale was partially offset by insignificant items.~~

~~Other Income (Expense)~~

~~Interest expense~~ for the second quarter of 2022 totaled $5.2 million compared to $6.0 million in the second quarter of 2021. Interest expense relates to interest and non-cash accretion charges on our Senior Notes due 2028 (during 2022), Revolving Credit Agreement (during 2022), Senior Notes due 2025 (during 2021), and New Term Loan Credit Agreement (during 2021). The decrease from the prior year period is primarily attributable to the repayment of the New Term Loan Credit Agreement in full during the fourth quarter of 2021, partially offset by interest on borrowings under the Revolving Credit Agreement during the second quarter of 2022.

~~Other, net~~ for the second quarter of 2022 represented expense of $0.3 million as compared to expense of $0.4 million for the prior year period. Expense for current year period is related to individually insignificant items. Expense for the prior 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 of 2021, partially offset by interest income.

~~Income Taxes~~

We recognized income tax expense of $7.6 million in the second quarter of 2022 compared to $4.0 million for the same period in the prior year. The effective tax rate for this period was 25.1% compared to a rate of 24.5% for the same period in the prior year. For the second quarter of 2022, the effective tax rate differs from the U.S. Federal statutory rate of 21% primarily due to the impact of state and local taxes net of discrete items incurred related to stock-based compensation. For the second quarter of 2021, the effective tax rate differs from the U.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.

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~~Six Months Ended June 30, 2022 Compared with the Six Months Ended June 30, 2021~~

~~Net Sales~~

Net sales in the first six months of 2022 increased $348.1 million, or 41.4%, compared to the first six months of 2021. 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
2022 2021 Amount %
(prior to elimination of intersegment sales)
Sales by Segment
Transportation Solutions $ 1,098,047 $ 747,296 $ 350,751 46.9 %
Parts & Service 97,103 97,347 (244) (0.3) %
Eliminations (5,620) (3,218) (2,402)
Total $ 1,189,530 $ 841,425 $ 348,105 41.4 %
New Units Shipped (units)
Trailers 25,545 21,255 4,290 20.2 %
Truck bodies 7,510 9,570 (2,060) (21.5) %
Total 33,055 30,825 2,230 7.2 %
Used Units Shipped (units)
Trailers 60 55 5 9.1 %

TS segment sales prior to the elimination of intersegment sales were $1,098.0 million for the first six months of 2022, an increase of $350.8 million, or 46.9%, compared to the first six months of 2021. Trailers shipped during the first six months of 2022 totaled 25,545 trailers compared to 21,255 trailers in the prior year period, a 20.2% increase. New truck bodies shipped during the first six months of 2022 totaled 7,510 truck bodies compared to 9,570 truck bodies in the prior year period, a decrease of 21.5%. The increase in new trailer shipments resulted in an overall increase in new trailer revenue, driven by strong demand for our van, tank, and platform trailers. The decrease in truck body shipments from the prior year period resulted in a decrease in truck body revenue of approximately 5.9%. Revenue per new trailer unit and truck body increased, due in part to pricing actions to partially offset the increase in commodity costs.

P&S segment sales prior to the elimination of intersegment sales were $97.1 million for the first six months of 2022, a decrease of $0.2 million, or 0.3%, compared to the same period of 2021. The overall decrease in sales was partially attributable to the sale of our Extract Technology® business during the second quarter of 2021, which had sales totaling approximately $11.7 million during the first six months of 2021. We also completed the closure of 17 service locations during the first nine months of 2021 that attributed to the decrease by approximately $6.0 million. These decreases were partially offset by the Wabash Parts LLC parts and distribution entity we created with our partner as further described in Note 5 to our condensed consolidated financial statements, which had approximately $3.6 million of sales during the first six months of 2022, as well as overall higher demand for our parts, services, and upfitting offerings compared to the prior year period.

Cost of Sales

Cost of sales was ~~$1,053.4~~$504.9 million in the first ~~six months~~quarter of ~~2022,~~2023, an increase of ~~$314.8~~$16.2 million, or ~~42.6%~~3.3%, 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.

TS segment cost of sales was ~~$984.5~~$474.5 million in the first ~~six months~~quarter of ~~2022,~~2023, an increase of ~~$322.2~~$20.1 million, or ~~48.6%~~4.4%, 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~~strong demand, was due to an increase in labor and employee-related costs of approximately $14.7 million and higher materials costs of ~~$252.7 million, or 55.3%, and higher labor costs of approximately $16.1~~$5.5 million. An additional increase related to other manufacturing costs, including outside services, operating supplies, and repairs and maintenance ~~which totaled~~totaling approximately ~~$11.9~~$5.4 million.

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P&S segment cost of sales was ~~$74.8~~$34.7 million in the first ~~six months~~quarter of ~~2022,~~2023, a decrease of ~~$1.9~~$1.5 million, or ~~2.4%~~4.1%, compared to the prior period. The ~~overall~~ decrease in cost of sales for this segment was due in part to ~~the sale~~a decrease in materials costs of ~~our Extract Technology~~® ~~business during the second quarter of 2021 and the closure of 17 service locations during the first nine months of 2021 totaling~~ approximately ~~$17.5 million.~~$2.6 million, or 9.2%, as well as a decrease in certain other manufacturing costs. These decreases were partially offset by ~~increases due to the Wabash Parts LLC parts~~higher labor and ~~distribution entity we created with our partner as further described in Note 5 to our condensed consolidated financial statements,~~employee-related costs of approximately $1.2 million as well as ~~overall higher demand for our other parts, services, and upfitting offerings.~~cost of sales related to Wabash Parts LLC.

Gross Profit

Gross profit was ~~$136.1~~$116.0 million in the first ~~six months~~quarter of ~~2022,~~2023, an increase of ~~$33.3~~$58.0 million from the prior year period. Gross profit as a percentage of net sales was ~~11.4%~~18.7% for the first ~~six months,~~quarter of 2023, compared to ~~12.2% during~~10.6% for the same period in ~~2021.~~2022. Gross profit by segment was as follows (dollars in thousands):


		Six Months Ended June 30,				Change					Three Months Ended March 31,				Change
		2022		2021		$		%			2023		2022		Amount		%
Gross Profit by Segment	Gross Profit by Segment									Gross Profit by Segment
Transportation Solutions	Transportation Solutions	$	113,737	$	84,988	$	28,749	33.8	%	Transportation Solutions	$	103,604	$	47,682	$	55,922	117.3	%
Parts & Services	Parts & Services	22,352		20,728		1,624		7.8	%	Parts & Services	12,423		10,522		1,901		18.1	%

Corporate & Eliminations	Corporate & Eliminations	—		(2,942)		2,942				Corporate & Eliminations	—		(149)		149
Total	Total	$	136,089	$	102,774	$	33,315	32.4	%	Total	$	116,027	$	58,055	$	57,972	99.9	%

TS segment gross profit was ~~$113.7~~$103.6 million for the first ~~six months~~quarter of ~~2022~~2023 compared to ~~$85.0~~$47.7 million for the ~~prior year period.~~first quarter of 2022. Gross profit, prior to the elimination of intersegment sales, as a percentage of net sales, was ~~10.4%~~17.9% in ~~2022~~the first quarter of 2023 compared to ~~11.4%~~9.5% in the ~~prior~~comparative 2022 period. The overall increase in gross profit from the prior year period was primarily driven by an increase in our dry vans products ~~and~~of approximately $38.7 million. In addition, our truck bodies, platforms, and tank trailers ~~all of which were generally attributable to higher demand for these products compared to~~had increases from the prior year period. ~~Gross~~Each of these increases, as well as the increase in gross profit as a percentage of net sales, ~~decreased from the prior year period~~was primarily attributable to higher revenue per new trailer unit and truck body due to ~~an increase in overall materials costs, which were partially offset by~~increased pricing to account for inflation, our curated customer portfolio, improved pricing ~~actions.~~processes, and improving mix from certain product lines.

P&S segment gross profit was ~~$22.4~~$12.4 million for the first ~~six months~~quarter of ~~2022~~2023 compared to ~~$20.7~~$10.5 million infor the ~~same period~~first quarter of ~~2021.~~2022. Gross profit, prior to the elimination of intersegment sales, as a percentage of net sales, was ~~23.0%~~26.4% in the ~~2022 period~~first quarter of 2023 compared to ~~21.3%~~22.5% in the ~~prior~~2022 period. This increase was ~~generally~~primarily related to ~~higher~~ gross profit ~~in our parts, services, and upfitting offerings in~~for the ~~current year period, including~~ Wabash Parts LLC ~~as well as exit costs incurred during the second quarter~~parts and distribution entity.

Table of ~~2021 related to the closure of service locations. These increases were partially offset by the sale of our Extract Technology~~Contents® ~~business during the second quarter of 2021, which had gross profit totaling approximately $2.2 million during the first six months of 2021.~~

General and Administrative Expenses

General and administrative expenses for the first ~~six months~~quarter of ~~2022~~2023 increased ~~$11.5~~$9.7 million, or ~~25.1%~~36.9%, from the prior year period. The increase from the prior year period was due in part to an increase in professional and outside services costs of approximately ~~$6.2~~$4.8 million, which includes the estimated liability for the Matters, as defined and further described in Note 13. In addition, there was an increase of approximately $4.5 million in ~~professional fees~~general and ~~outside services/labor. In addition, depreciation,~~administrative employee-related costs, including benefits and incentive programs. Also, rental and maintenance expenses increased a total of approximately ~~$2.1 million. There was also an increase in employee-related costs, including benefits and incentive programs, of approximately $0.7~~$0.4 million. As a percentage of net sales, general and administrative expenses were 5.8% for the first quarter of 2023 compared to 4.8% for the ~~2022 period as compared to 5.4% for the same period~~first quarter of ~~2021.~~2022. The overall ~~decrease~~increase in general and administrative expenses as a percentage of net sales was primarily attributable to the increase in ~~sales compared to the prior year period.~~professional and outside services costs and employee-related costs.

Selling Expenses

Selling expenses were ~~$13.6~~$6.9 million in the first ~~six months~~quarter of ~~2022,~~2023, an increase of ~~$0.9~~$0.7 million, or ~~6.7%~~10.9%, compared to the prior year period. ~~This~~The increase was primarily ~~due~~attributable to ~~higher~~an increase in sales employee-related costs, including benefits and incentive programs, of approximately $0.8 million. In addition, advertising and promotional expenses ~~outside service costs, and professional fees totaling~~increased approximately ~~$1.9~~$0.4 million. These increases were partially offset by a decrease in ~~employee-related~~professional and outside services costs ~~including benefits and incentive programs,~~ of approximately ~~$1.2~~$0.6 million. As a percentage of net sales, selling expenses were 1.1% for each the ~~2022 period as compared to 1.5% for~~first quarter of 2023 and the ~~same period~~first quarter of ~~2021.~~2022. The overall ~~decrease~~consistency in selling expenses as a percentage of net sales was primarily attributable to sales increasing in proportion to the increase in ~~sales compared to the prior year period.~~

~~Table of Contents~~

selling expenses.

Amortization of Intangibles

Amortization of intangibles was ~~$8.8~~$3.2 million for the first ~~six months~~quarter of ~~2022~~2023 compared to ~~$11.6~~$5.0 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 and Supreme in September 2017. The decrease from the prior year period is ~~primarily attributable~~related to ~~the write-off of approximately $28.3 million in trade name and trademark intangible assets during the fourth quarter of 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, 2021. In addition, we sold our Extract Technology~~® ~~business during the second quarter of 2021 and wrote-off the related intangible assets as part of the sale. Finally,~~ certain of the intangible assets recorded upon the acquisition of Walker in May 2012 that became fully amortized during the second quarter of 2022.

Impairment and Other, Net

Impairment and other, net was nominal for the three months ended March 31, 2023 compared to a net loss of $0.3 million for the three months ended March 31, 2022. Activity during the ~~first six months of 2022 compared to a net gain of $1.2 million during the first six months of 2021. The net loss during the current~~prior year period is 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. These items are further described in Note 18. ~~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.

Other Income (Expense)

Interest expense for the first ~~six months~~quarter of ~~2022~~2023 totaled ~~$10.1~~$5.0 million compared to ~~$12.2~~$4.9 million in the ~~prior year period.~~first quarter of 2022. Interest expense relates to interest and non-cash accretion charges on our Senior Notes due 2028 ~~(during 2022),~~and Revolving Credit Agreement (during 2022), Senior Notes due 2025 (during 2021), and New Term Loan Credit Agreement (during 2021). The decrease from the prior year period is primarily attributable to the repayment of the New Term Loan Credit Agreement in full during the fourth quarter of 2021, partially offset by interest on borrowings under the Revolving Credit Agreement during the first six months of 2022.Agreement. Interest expense was materially consistent year-over-year.

Other, net for the first ~~six months~~quarter of ~~2022~~2023 represented ~~expense~~income of $0.4 million as compared to expense of ~~$0.4~~$0.1 million for the prior year period. Income for the current year period primarily relates to interest income. Expense for ~~current~~the prior year period is related to individually insignificant items. Expense for the prior 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 Taxes

~~The Company~~We recognized income tax expense of ~~$10.7~~$13.9 million in the first ~~six months~~quarter of ~~2022~~2023 compared to ~~income tax expense of $5.8~~$3.1 million for the same period in the prior year. The effective tax ~~rates~~rate for this period was 21.3% compared to a rate of 20.3% for the ~~first six months of 2022 and 2021 were 23.5% and 27.3%, respectively.~~same period in the prior year. For the first ~~six~~three months of 2023 and 2022, the effective tax rate differs from the USU.S. Federal statutory rate of 21% primarily due to the impact of state and local taxes net of discrete items incurred related to stock-based compensation. For the first six 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.

Liquidity and Capital Resources

Capital Structure

Our capital structure is comprised of a mix of debt and equity. As of ~~June 30, 2022,~~March 31, 2023, our ~~debt to equity~~debt-to-equity ratio was approximately ~~1.3:~~0.9:1.0. 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.

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During the first ~~six~~three months of ~~2022,~~2023, in keeping with this balanced approach, we paid dividends of approximately ~~$8.3~~$4.6 million and repurchased shares under our Board approved share repurchase program totaling ~~$10.0 million, and repaid $30.0 million under the Revolving Credit Agreement.~~$14.0 million. Also, as further described in our Annual Report on Form 10-K for the year ended December 31, ~~2021, in~~2022, during the third quarter of 2022 we amended our Revolving Credit Agreement. The amendment increased the total revolving commitments to $350.0 million and extended the maturity to September ~~2021 we exercised an option~~2027, which is the nearest maturity date of our long-term debt. As of March 31, 2023, there were no amounts outstanding 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 fourth quarter of 2021 we used the net proceeds 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 all related fees and expenses.Agreement. 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.

Our liquidity position, defined as cash on hand and available borrowing capacity onunder the Revolving Credit Agreement, amounted to ~~$298.1~~$410.4 million as of ~~June 30, 2022, a decrease~~March 31, 2023, an increase of 2%102% compared to ~~$304.3~~$203.1 million as of ~~June 30, 2021~~March 31, 2022 and an increase of ~~16%~~2% from ~~$258.0~~$401.2 million as of December 31, ~~2021.~~2022. The increase as of ~~June 30, 2022~~March 31, 2023 compared to ~~December~~March 31, ~~2021~~2022 is primarily attributable to a higher ~~cash balance partially offset by lower~~ available capacity on the Revolving Credit ~~Agreement.~~Agreement (which as noted above was amended during the third quarter of 2022). For the remainder of ~~2022,~~2023 and continuing into 2024, we expect to continue our commitment to fund our working capital requirements, ~~and~~ capital expenditures, ~~including~~and our ~~previously announced plans to add~~Trailers as a Service (TAAS)SM initiative from operations or available borrowing capacity under the Revolving Credit Agreement (as needed). This includes adding 20% more dry van manufacturing capacity, ~~beginning~~with production scheduled to begin during the second quarter of 2023. We continue to believe this additional manufacturing capacity will allow us to go-to-market with a portfolio-based selling approach that leverages the breadth of our products. In addition, in ~~2023, which will~~August 2022 we announced a $20 million investment to be ~~achieved by ramping down traditional~~made in our manufacturing capacity to scale our EcoNexTM technology within refrigerated ~~trailer capacity~~vans, truck bodies, and ~~converting the floor space to create additional dry van production.~~other transportation and logistics related products. Along with ~~the increased dry van manufacturing capacity,~~these investments, we will also maintain our assets to ~~capitalize on~~react to any economic and/or industry ~~upswings,~~changes, while also responsibly returning capital to our shareholders. We will continue to move rapidly to adjust to the current environment to preserve the strength of our balance sheet, while prioritizing the safety of our employees and ensuring the liquidity and financial well-being of the Company.

Debt Agreements and Related Amendments

Senior Notes due 2028

On October 6, 2021, we closed on an offering of $400 million in aggregate principal amount of its 4.50% unsecured Senior Notes due 2028 (the ~~“New Senior~~“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 4.50% and pay interest semi-annually in cash in arrears on April 15 and October 15 of each year. 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 ~~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 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 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 ~~New~~ Senior Notes at a price equal to 101% of the aggregate principal amount of the ~~New~~ Senior Notes, plus any accrued and unpaid interest to, 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 our and the Guarantors’ general unsecured senior obligations and will be subordinated to all of our and 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 subordinated to any existing and future debt of any of our subsidiaries that are not Guarantors, to the extent of the assets of those subsidiaries.

Subject to a number of exceptions and qualifications, the Indenture restricts our ability and the ability of certain of its subsidiaries 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.

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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 subsidiaries will cease to be subject to such covenants during such period.

Contractual coupon interest expense and accretion of fees for the ~~New~~ Senior Notes for ~~the three-~~each three-month period ended March 31, 2023 and ~~six-month periods ended June 30,~~ 2022 was $4.5 million and $0.2 ~~million, and $9.0 million and $0.3~~ million, respectively. Contractual coupon interest expense and accretion of fees for the Senior Notes 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 New Senior Notes during the three- and six-month periods ended June 30, 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- and six-month periods ended June 30, 2021 was $4.5 million and $9.0 million, respectively. Contractual coupon interest expense and accretion of discount and fees are included in ~~Interest expense~~ ~~on our Condensed Consolidated Statements of Operations.~~

Revolving Credit Agreement

On ~~December 21, 2018,~~September 23, 2022, we entered into the Third Amendment to Second Amended and Restated Credit Agreement ~~(the “Second Amended and Restated Credit Agreement”)~~ among us, certain of ~~its~~our subsidiaries as borrowers (together with us, the “Borrowers”), certain of our subsidiaries as guarantors, 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”~~“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 “First Amendment”) among us, certain~~dated as of ~~our subsidiaries party thereto,~~December 21, 2018 (as amended from time to time, the “Revolving Credit Agreement”).

Under the Revolving Credit Agreement, the lenders ~~party thereto, and the Revolver Agent. The First Amendment primarily made conforming changes~~agree to make available a $350 million revolving credit facility to the ~~provisions in~~Borrowers with a scheduled maturity date of September 23, 2027. We have the option to increase the total commitments under the facility by up to an additional $175 million, subject to certain conditions, including obtaining agreements from one or more lenders, whether or not party to the Revolving Credit Agreement, to reflect modifications made under the Term Loan Credit Agreement, dated September 20, 2020, among us, 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 optionprovide such additional commitments. Availability under the Revolving Credit Agreement to increase the total revolving credit commitments by $50 million from $175 million to $225 million. The Revolving Credit Agreement continues to include an increase option, which would allow us, subject tois based upon quarterly (or more frequent under certain ~~terms and conditions set forth in the Revolving Credit Agreement (including the approval~~circumstances) borrowing base certifications 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~~Borrowers’ eligible inventory, eligible leasing inventory and eligible accounts receivable, and is ~~guaranteed~~reduced by certain ~~of our subsidiaries (the “Revolver Guarantors”) and is secured by (i) first priority security interests (subject only~~reserves in effect from time 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 (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.

time.~~Table of Contents~~

Subject to availability, the Revolving Credit Agreement provides for a letter of credit subfacility in anthe amount ~~not in excess~~ of ~~$15~~$25 million and allows for swingline loans in anthe amount ~~not in excess~~ of ~~$17.5~~$35 million. Outstanding borrowings under the Revolving Credit Agreement bear interest at an annual rate, at the Borrowers’ election, equal to (i) ~~London Interbank Offer~~adjusted term Secured Overnight Financing 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 ~~Facility.~~Credit Agreement. 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.~~of the Agent and the lenders.

The Revolving Credit Agreement is guaranteed by certain of our subsidiaries (the “Guarantors”) and is secured by substantially all personal property of the Borrowers and the Guarantors.

The Revolving Credit Agreement contains customary covenants limiting our ability and certain of our ~~affiliates~~subsidiaries 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 when excess availability under the Revolving Credit Agreement is less than ~~10%~~the greater of (a) 10.0% of the lesser of (i) the total revolving ~~commitment. We~~commitments and (ii) the borrowing base (such lesser amount, the “Line Cap”) and (b) $25 million. As of March 31, 2023, we were was in compliance with all ~~covenants as of June 30, 2022.~~covenants.

During the three-month period ended June 30, 2022, we repaid $30.0 million of principal under the Revolving Credit Agreement. As of June 30, 2022, there was $59.0 million outstanding under the Revolving Facility. Interest expense under the Revolving Credit Agreement ~~for the three-~~would automatically terminate, and six-month periods ended June 30, 2022, was approximately $0.5 million and $0.8 million, respectively. During the three- and six-month periods ended June 30, 2021, and as of June 30, 2021, there were noall amounts outstanding under the Revolving ~~Facility. We paid no interest under the Revolving~~ Credit Agreement ~~during the three-and six-month periods ended June 30, 2021.~~would automatically become due and payable.

Our liquidity position, defined as cash on hand and available borrowing capacity on the Revolving ~~Facility,~~Credit Agreement, amounted to ~~$298.1~~$410.4 million as of ~~June 30, 2022~~March 31, 2023 and ~~$258.0~~$401.2 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 June 30, 2021, we had $108.8 million outstanding under the New Term Loan Credit Agreement (which was repaid in full during the fourth quarter of 2021), none of which was classified as current on our Condensed Consolidated Balance Sheets. For the three- and six-month periods ended June 30, 2021, under the New Term Loan Credit Agreement we paid interest of $1.3 million and $2.7 million, respectively. 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, 2021, we incurred charges of less than $0.1 million and $0.1 million for amortization of fees and original issuance discount. Amortization of fees and original issuance discount are included in ~~Interest expense~~ ~~in the Condensed Consolidated Statements of Operations.~~2022.

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During the three-month period ended March 31, 2023, we had net payments of principal of $43.0 million and net borrowings of principal of $43.0 million. As of March 31, 2023, there were no amounts outstanding under the Revolving Credit Agreement.

During the three-month period ended March 31, 2022, we borrowed $56.0 million under the Revolving Credit Agreement. As of March 31, 2022, there was $89.0 million outstanding under the Revolving Credit Agreement.

Interest expense under the Revolving Credit Agreement for the three-month periods ended March 31, 2023 and March 31, 2022, was approximately $0.2 million and $0.3 million, respectively. Interest expense under the Revolving Credit Agreement is included in Interest expense in our Condensed Consolidated Statements of Operations.

Cash Flows

Cash provided by operating activities for the first ~~six~~three months of ~~2022~~2023 totaled ~~$82.7~~$69.5 million, compared to using ~~$13.1~~$34.6 million during the same period in ~~2021.~~2022. Cash provided by 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,~~ deferred taxes, stock-based compensation, ~~impairment,~~ accretion of debt fees and discount, and a ~~$20.9~~$5.8 million decrease in working capital. Changes in key working capital accounts for ~~2022~~2023 and ~~2021~~2022 are summarized below (in thousands):


		Six Months Ended June 30,							Three Months Ended March 31,
		2022		2021		Change			2023		2022		Change
Source (Use) of cash:	Source (Use) of cash:							Source (Use) of cash:
Accounts receivable	Accounts receivable	$	(55,114)	$	(25,758)	$	(29,356)	Accounts receivable	$	(1,021)	$	(113,524)	$	112,503
Inventories	Inventories	(67,717)		(89,733)		22,016		Inventories	(71,773)		(49,113)		(22,660)
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	142,869		56,074		86,795		Accounts payable and accrued liabilities	81,735		98,284		(16,549)
Net source (use) of cash	Net source (use) of cash	$	20,038	$	(59,417)	$	79,455	Net source (use) of cash	$	8,941	$	(64,353)	$	73,294

Accounts receivable increased ~~$55.1~~$1.0 million in the first ~~six~~three months of ~~2022~~2023 as compared to a ~~$25.8~~$113.5 million 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 3237 days and 2448 days for the three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively. The increase in accounts receivable during the first ~~six~~three months of ~~2022~~2023 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 ~~$67.7~~$71.8 million during the first ~~six~~three months of ~~2022~~2023 as compared to an increase of ~~$89.7~~$49.1 million in the ~~2021~~2022 period. Our inventory turns, a commonly used measure of working capital efficiency that measures how quickly inventory turns per year, was approximately 67 times in the ~~2022~~2023 period and 6 times in the ~~2021~~2022 period. The increase in inventory for the ~~2022~~2023 period was primarily attributable to higher finished goods inventory as well as higher raw materials inventory ~~to adjust to~~for anticipated production for the remainder of ~~2022 as well as higher finished goods inventory.~~2023. Accounts payable and accrued liabilities increased by ~~$142.9~~$81.7 million in ~~2022~~2023 compared to an increase of ~~$56.1~~$98.3 million for the same period in ~~2021.~~2022. Days payable outstanding, a measure of working capital efficiency that measures the amount of time a payable is outstanding, was 4945 days for the three months ended ~~June 30, 2022~~March 31, 2023 compared to 3948 days for the three months ended ~~June 30, 2021.~~March 31, 2022.

Investing activities used ~~$20.9~~$31.4 million during the first ~~six~~three months of ~~2022,~~2023, as compared to ~~provided~~using $8.5 million during the same period in 2022. Investing activities for the first three months of 2023 included capital expenditures of $31.4 million, which was an increase compared to $9.9 million during the same period in ~~2021. Investing activities for~~2022. For the first ~~six~~three months of ~~2022 include capital expenditures~~2023, investing activities included no proceeds from the sale of ~~$22.4 million, which was an increase~~assets compared to ~~$11.1~~approximately $1.4 million during the first three months of 2022.

Financing activities used $28.1 million during the first three months of 2023 as compared to providing $44.1 million during the same period in 2021. For the first six months of 2022, investing activities also included proceeds from the sale of assets of approximately $1.4 million. Proceeds from the sale of assets during the first six months of 2021 were approximately $21.0 million.

~~Financing activities provided $5.0 million during the first six months of 2022 as compared to using $78.5 million during the same period in 2021.~~2022. Net cash ~~provided~~used by financing activities during the current year period primarily relates to ~~borrowings~~common stock repurchases and withholdings of $23.6 million and cash dividend payments of $4.6 million. Borrowings under our Revolving ~~Facility totaling $56.7~~Credit Agreement totaled $43.3 million, ~~partially~~which were fully offset by principal, interest, and unused fee payments made under our Revolving ~~Facility~~Credit Agreement totaling $43.3 million. Net cash provided by financing activities during the first three months of ~~$30.8~~2022 primarily related to borrowings under our Revolving Credit Agreement 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 ~~$13.3~~$8.0 million and cash dividend payments ~~to our shareholders~~ of $8.3 million. Net cash used in financing activities during the first six months of 2021 primarily relates to common stock repurchases and withholdings of $41.3 million, principal payments under the New Term Loan Credit Agreement totaling $30.0 million, and cash dividend payments to our shareholders of $8.4$4.3 million.

As of ~~June 30, 2022,~~March 31, 2023, our liquidity position, defined as cash on hand and available borrowing capacity under our Revolving ~~Facility,~~Credit Agreement, amounted to ~~$298.1~~$410.4 million, representing ~~a decrease~~an increase of ~~$6.2~~$207.3 million (or 102%) compared to March 31, 2022 and an increase of $9.2 million (or 2%) compared to ~~June 30, 2021 and an increase of $40.1 million (or 16%) compared to~~ December 31, ~~2021. Total debt obligations amounted to $459.0 million as of June 30,~~ 2022. The increase ~~in liquidity~~ as of ~~June 30, 2022~~March 31, 2023 compared to ~~December~~March 31, ~~2021~~2022 is primarily attributable to a higher ~~cash balance partially offset by lower~~ available capacity on the Revolving Credit ~~Agreement.~~ Agreement (which as noted above was amended during the third quarter of 2022). Total debt obligations amounted to $400.0 million as of March 31, 2023.

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For the remainder of ~~2022,~~2023 and continuing into 2024, we expect to continue our commitment to fund our working capital requirements, ~~and~~ capital expenditures, ~~including~~and our ~~plans to add~~Trailers as a Service (TAAS)SM initiative from operations or available borrowing capacity under the Revolving Credit Agreement (as needed). This includes adding 20% more dry van manufacturing capacity, ~~beginning~~with production scheduled to begin during the second quarter of 2023. We continue to believe this additional manufacturing capacity will allow us to go-to-market with a portfolio-based selling approach that leverages the breadth of our products. In addition, in ~~2023, which will~~August 2022 we announced a $20 million investment to be ~~achieved by ramping down traditional~~made in our manufacturing capacity to scale our EcoNexTM technology within refrigerated ~~trailer capacity~~vans, truck bodies, and ~~converting the floor space to create additional dry van production.~~other transportation and logistics related products. Along with ~~the increased dry van manufacturing capacity,~~these investments, we will also maintain our assets to ~~capitalize on~~react to any economic and/or industry ~~upswings,~~changes, while also responsibly returning capital to our shareholders. We will continue to move rapidly to adjust to the current environment to preserve the strength of our balance sheet, while prioritizing the safety of our employees and ensuring the liquidity and financial well-being of the Company.

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Capital Expenditures

Capital spending amounted to approximately ~~$22.4~~$31.4 million for the first ~~six~~three months of ~~2022, and we~~2023. We believe our capital expenditures for ~~2022~~2023 related to traditional property, plant, and equipment will be in the range of ~~$80~~$100 to ~~$90~~$110 million, while capital expenditures supporting our Trailers as a Service (TAAS)SM growth initiative with revenue generating assets are expected to be in the range of $35 to $40 million. In addition to the previously announced actions to retool our existing capacity to support expanded dry van production, capital spending for ~~2022~~2023 has been and is expected to be utilized to support our growth strategies (including TAAS) as well as our maintenance and productivity improvement initiatives within our facilities.

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 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 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 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 historical DPG reporting unit and concluded the fair value of the reporting unit continued to exceed the carrying value.

We considered whether there were any indicators of impairment during the three ~~and six~~ months ended ~~June 30, 2022~~March 31, 2023 and concluded there were none.

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, 2022~~March 31, 2023 are as follows (in thousands):


		2022		2023		2024		2025		2026		Thereafter		Total			2023		2024		2025		2026		2027		Thereafter		Total
Debt:	Debt:															Debt:

Revolving Facility (due 2023)		$	—	$	59,000	$	—	$	—	$	—	$	—	$	59,000
Revolving Credit Agreement (due 2027)																Revolving Credit Agreement (due 2027)	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Senior Notes (due 2028)	Senior Notes (due 2028)	—		—		—		—		—		400,000		400,000		Senior Notes (due 2028)	—		—		—		—		—		400,000		400,000
Interest payments on Revolving Facility and Senior Notes due 20281		9,897		19,744		18,000		18,000		18,000		36,000		119,641
Interest payments on Revolving Credit Agreement and Senior Notes due 20281																Interest payments on Revolving Credit Agreement and Senior Notes due 20281	18,000		18,000		18,000		18,000		18,000		18,000		108,000

Total debt	Total debt	9,897		78,744		18,000		18,000		18,000		436,000		578,641		Total debt	18,000		18,000		18,000		18,000		18,000		418,000		508,000
Other:	Other:															Other:
Operating Leases	Operating Leases	3,089		5,523		4,408		3,386		2,894		2,025		21,325		Operating Leases	5,301		6,083		5,019		4,463		2,364		794		24,024
Total other	Total other	3,089		5,523		4,408		3,386		2,894		2,025		21,325		Total other	5,301		6,083		5,019		4,463		2,364		794		24,024
Other commercial commitments:	Other commercial commitments:															Other commercial commitments:
Letters of Credit	Letters of Credit	5,702		—		—		—		—		—		5,702		Letters of Credit	5,702		—		—		—		—		—		5,702
Raw Material Purchase Commitments	Raw Material Purchase Commitments	90,300		—		—		—		—		—		90,300		Raw Material Purchase Commitments	73,300		—		—		—		—		—		73,300
Chassis Agreements and Programs	Chassis Agreements and Programs	11,617		—		—		—		—		—		11,617		Chassis Agreements and Programs	23,923		—		—		—		—		—		23,923
Total other commercial commitments	Total other commercial commitments	107,619		—		—		—		—		—		107,619		Total other commercial commitments	102,925		—		—		—		—		—		102,925
Total obligations	Total obligations	$	120,605	$	84,267	$	22,408	$	21,386	$	20,894	$	438,025	$	707,585	Total obligations	$	126,226	$	24,083	$	23,019	$	22,463	$	20,364	$	418,794	$	634,949

1 Future interest payments on variable rate long-term debt (if any) are estimated based on the rate in effect as of ~~June 30, 2022.~~

~~Table~~March 31, 2023, and only include interest payments (not unused line fees). However, as of ~~Contents~~March 31, 2023, there was no variable rate debt (Revolving Credit Agreement) outstanding.

Borrowings under the Revolving ~~Facility~~Credit Agreement bear interest at a variable rate based on the ~~LIBOR~~Secured Overnight Financing Rate (“SOFR”) or a base rate determined by the lender’s prime rate plus an applicable margin, as defined in the agreement. Any outstanding borrowings under the Revolving ~~Facility~~Credit Agreement bear interest at a rate, at our election, equal to (i) ~~LIBOR~~adjusted term SOFR 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.~~Credit Agreement. 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 ~~June 30, 2022,~~March 31, 2023, we ~~repaid $30.0 million~~had borrowings of principal and payments of principal of $43.3 million under the Revolving ~~Facility.~~Credit Agreement. As of ~~June 30, 2022,~~March 31, 2023, there ~~was $59.0 million~~were no amounts outstanding under the Revolving ~~Facility.~~Credit Agreement.

The Senior Notes due 2028 bear interest at the rate of 4.5% per annum from the date of issuance, payable semi-annually on April 15 and October 15.

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Operating leases represent the total future minimum lease payments that have commenced. As of ~~June 30, 2022,~~March 31, 2023, obligations related to operating leases that ~~the Company has~~we have executed but have not yet commenced were insignificant. Subsequent to March 31, 2023, we executed operating leases which have not yet commenced—obligations related to these leases totaled approximately ~~$0.2~~$0.4 million on a non-discounted basis, which ~~the Company~~we generally ~~expects~~expect to be recognized over the next ~~three~~five years.

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

We have ~~$90.3~~$73.3 million in purchase commitments through December ~~2022~~2023 for various raw material commodities, including aluminum, steel, polyethylene and nickel as well as other raw material components which are within normal production requirements.

We 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 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, 2022~~March 31, 2023 our outstanding chassis converter pool with the manufacturer totaled ~~$11.2~~$23.4 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 are handled as consigned inventory belonging to the manufacturer and totaled approximately ~~$0.4~~$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 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 and have defined delivery ~~time frames, and can be produced during the next 18 months~~timeframes are included in our backlog. Orders that comprise our backlog may be subject to changes in quantities, delivery, specifications, terms, or cancellation. ~~Our~~The following table presents backlog information as of ~~orders was approximately $2,297 million at June 30,~~March 31, 2023, December 31, 2022, ~~which is a 2% decrease from approximately $2,339 million at~~and March 31, 2022 (in millions):


	March 31, 2023		December 31, 2022		Change	March 31, 2023		March 31, 2022		Change
12-month backlog	$	2,615	$	2,787	(6)%	$	2,615	$	2,339	12%
Total backlog	$	3,068	$	3,396	(10)%	$	3,068	$	2,339	31%

The decrease in rolling 12-month backlog and ~~a 71% increase~~total backlog from ~~$1,342 million at June 30, 2021.~~December 31, 2022 is primarily attributable to the fulfillment of orders during the first three months of 2023 outpacing new orders (which we generally expected). The increase in rolling 12-month backlog and total backlog from ~~Q2 2021~~March 31, 2022 is primarily related to ~~increased~~high demand for our products in ~~2022.~~2023, higher expected production and revenue per trailer and truck body unit, and long-term relationship agreements with certain strategic customers (including J.B. Hunt Transport Inc., which we announced in January 2023). We believe our backlog of orders isremains strong ~~and shows the strength of our customers’ businesses from first to final mile. We expect to complete the majority of our backlog orders~~ as of ~~June 30, 2022 within 12 months of this date.~~March 31, 2023—refer to the “Outlook” section below for additional details related to industry and market conditions.

Outlook

The trailer industry generally follows the transportation industry’s cycles. According to ACT Research Company (“ACT”), total United States trailer production in ~~2021~~2022 was approximately ~~267,000~~306,000 trailers, a ~~30%~~15% increase from ~~2020’s softened demand that was worsened and magnified by the uncertainty and economic impact caused by the COVID-19 pandemic.~~2021. While there remains some uncertainty ofin the ~~full impact of the COVID-19 pandemic, particularly around~~industry, including but not limited to overall economic conditions, supply chain disruptions, and labor shortages, the outlook for the overall trailer market is generally strong, and we believe our backlog of orders continues to provide a solid foundation for ~~2022.~~2023. Current estimates from ACT and FTR Associations (“FTR”) for ~~2022~~2023 United States trailer production are ~~311,000~~306,000 and ~~305,000,~~313,000, respectively, representing ~~increases from 2021 of approximately 17% and 14%, respectively.~~materially consistent production levels compared to 2022. These increases are generally in-line with our expectations due to strong ~~2022~~2023 demand throughout the industry. ~~We believe that these estimates for production will remain above replacement demand over the next several years.~~

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ACT is forecasting annual new trailer production levels for ~~2023,~~ 2024, 2025, 2026, 2027, and ~~2027~~2028 of approximately ~~318,000, 283,000, 305,000, 286,000,~~277,000, 310,000, 295,000, 313,000, and ~~298,000,~~312,000, respectively. In addition, FTR is forecasting annual new trailer production levels of ~~330,000~~250,000 and ~~310,000~~286,000 for ~~2023~~2024 and ~~2024,~~2025, respectively. While these estimates are in general more ~~historically~~ consistent with historical trailer industry production levels, ~~in the trailer industry,~~ and in some ~~cases~~years higher ~~industry forecasters note that certain issues, such as continued~~than historical production levels, overall economic uncertainty, supply chain disruptions, and staffing challenges have begun to soften demand in the industry to a certain degree and could continue to impact these estimates. ~~We continue~~This uncertainty and potential softening are evident in the ACT and FTR forecasts, particularly for 2024 production—however, we believe that our strategic plan and actions taken over the last several years have positioned us to ~~believe we are well positioned to~~not only capitalize on ~~strong~~ demand in ~~2022~~2023, but to remain well-suited to adapt to changes in the industry and ~~beyond.~~demand environment due to our strong balance sheet and liquidity profile.

Other potential risks we face for ~~2022~~the remainder of 2023 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 increase in production to meet demand. In addition, the cost of raw materials, commodities, and components are also potential ~~risks in 2022 with increased demand.~~risks. 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. AtWhile we have taken actions to mitigate certain of these risks, which include our previously announced supply agreements with Hydro and Ryerson, at the current and expected demand levels, there may be additional or increased shortages of supplies of raw materials or components 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 strong overall demand levels while maintaining or growing margins through improvements in product pricing as well as productivity and other operational excellence initiatives.

For the remainder of ~~2022,~~2023, 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~~transportation, logistics, and distribution industries because: (1) our core customers are among the major participants in the ~~trucking industry;~~transportation, logistics, and distribution industries; (2) our technology and innovation ~~provides~~provide 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 enterprise-wide lean efforts drive focus on the interconnected processes that are critical for success across our business; (4) our significant brand recognition, 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; and (5) our One Wabash approach to create a consistent, superior experience for all customers who seek our connected solutions in the transportation, logistics, and distribution markets. By continuing to be ~~the visionary~~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 connected, value-added customer solutions.

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, ~~2021.~~2022. There have been no material changes to the summary provided in that report.

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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, 2022,~~March 31, 2023, we had ~~$90.3~~$73.3 million in raw material purchase commitments through December ~~2022~~2023 for materials that will be used in the production process, as compared to ~~$129.6~~$59.2 million as of December 31, ~~2021.~~2022. 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. As of ~~June 30, 2022,~~March 31, 2023, a hypothetical ten percent change in commodity prices based on our raw material purchase commitments through December ~~2022~~2023 would result in a corresponding change in cost of goods sold ~~over a one-year period~~ of approximately ~~$9.0~~$7.3 million. This sensitivity analysis does not account for the change in the competitive environment indirectly related to the change in commodity prices and the potential managerial action taken in response to these changes.

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Interest Rates

As of ~~June 30, 2022,~~March 31, 2023, we had ~~$59.0 million of~~no floating rate debt outstanding under our Revolving ~~Facility. As further described in~~Credit Agreement. The only other outstanding debt on our ~~Annual Report on Form 10-K for~~Condensed Consolidated Balance Sheets as of March 31, 2023 were the ~~year ended December 31, 2021, we repaid the outstanding balance in full under our New Term Loan Credit Agreement during the fourth quarter of 2021,~~Senior Notes, which ~~had~~carry a ~~floating~~fixed interest rate of ~~interest.~~4.50%. Based on the current borrowings under our Revolving ~~Facility,~~Credit Agreement, a hypothetical 100 basis-point change in the floating interest rate would result in ano corresponding change in interest expense over a one-year ~~period of approximately $0.6 million.~~period. This sensitivity analysis does not account for the change in the competitive environment indirectly related to the change in interest rates and the potential managerial action taken in response to these changes.

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, 2022.~~March 31, 2023.

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 ~~2022~~2023 that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

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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, ~~2021.~~2022. See also Note 13, “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, ~~2021~~2022 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, 2022 — $ — — $ 131.4
May 1 - 31, 2022 153,648 $ 14.73 152,797 $ 129.1
June 1- 30, 2022 207,862 $ 14.63 207,862 $ 126.1
Total 361,510 $ 14.67 360,659 $ 126.1

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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, 2023	120,890	$	24.80	120,890	$	102.2
February 1 - 28, 2023	556,705	$	27.87	218,245	$	96.1
March 1 - 31, 2023	201,740	$	25.03	201,740	$	91.0
Total	879,335	$	26.80	540,875	$	91.0

In August 2021, the Company announced that the Board of Directors approved the repurchase of an additional $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 in August 2024. For the quarter ended ~~June 30, 2022,~~March 31, 2023, we repurchased ~~360,659~~540,875 shares pursuant to our repurchase program. Additionally, during this period there were ~~851~~338,460 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, 2022~~March 31, 2023 are filed herewith, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, (ii) the Condensed Consolidated Statements of Operations for the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss) for the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ (iv) the Condensed Consolidated Statements of Cash Flows for the ~~six~~three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ (v) the Condensed Consolidated Statements of Stockholders’ Equity for the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ 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 27, 2022~~April 26, 2023	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, 2022		Three Months Ended June 30, 2021
Operating lease cost	Cost of sales, selling expenses and general and administrative expense	$	1,209	$	1,229
Finance lease cost
Amortization of ROU leased assets	Depreciation and amortization within Cost of sales	—		36
Interest on lease liabilities	Interest expense	—		7
Net lease cost		$	1,209	$	1,272