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Wabash National Corporation announces Q3 results

LAFAYETTE, Ind. –- WNC logoWabash National Corporation (NYSE: WNC) reported year-over year improvements across nearly all financial and operating metrics. They have reported an operating loss of $4.2 million for the third quarter of 2010, compared to an operating loss of $10.2 million for the third quarter of 2009. For the nine months ended September 30, WNC reported operating losses of $21.2 million and $54.2 million for 2010 and 2009, respectively. According to Wabash National, improvement in operating loss of $6.0 million and $33.0 million for the three and nine month periods, respectively, resulted from higher production volumes, as well as cost and manufacturing optimization enhancements implemented throughout 2008 and 2009.

The following is a summary of select operating and financial results for the past five quarters:

                                                              Three Months Ended                                      
                                ------------------------------------------------------------------------------  
                                September 30,   December 31,     March 31,       June 30,        September 30,
   (Dollars in thousands)          2009             2009           2010            2010               2010
                                -------------   ------------   -----------    -----------      ---------------
   New Trailer Units Sold              3,600          3,300         2,600          5,400                6,800
   Net Sales                     $    88,324     $   85,373     $  78,274      $ 149,699        $     170,848
   Gross Profit Margin                 -0.4%          -2.2%         -1.2%           3.5%                 3.8%
   Loss from Operations          $  (10,207)     $ (11,884)     $ (11,232)     $  (5,715)       $    ( 4,206)
   Net (Loss) Income             $  (66,404)(1)  $   10,858(1)  $(139,079)(1)  $  (5,602)(1)    $    ( 1,938)(1)
   Operating EBITDA (Non-GAAP)   $   (4,607)     $  (6,255)     $  (5,975)         $(493)       $         643


   Notes: (1) Quarterly Net (Loss) Income includes a non-cash benefit (charge) of approximately ($54.0) million,
              $20.5 million, ($126.8) million, $1.9 million and $3.3 million related to the change in the fair 
              value of the Company’s warrant for the third and fourth quarters of 2009 and the first, second, 
              and third quarters of 2010, respectively.
        

President and Chief Executive Officer, Dick Giromini said, “While much remains to be done, we are pleased to deliver significant year-over-year improvement in our operating results for the fourth consecutive quarter. Importantly, we generated positive operating EBITDA of $0.6 million for the first time in two years and continued to improve gross margins during the quarter. Additionally, new order activity remained strong throughout the third quarter, which is typically a seasonally lower order period. As a result, we entered the fourth quarter with a healthy backlog of $334 million as of September 30, up from $137 million at year-end, and $96 million at the end of the third quarter of 2009. During the first month of the fourth quarter, quote and order activity strengthened further and we are encouraged by the continued momentum of trailer demand and fleet activity.

“While much remains to be done, we are pleased to deliver significant year-over-year improvement in our operating results for the fourth consecutive quarter. Importantly, we generated positive operating EBITDA of $0.6 million for the first time in two years and continued to improve gross margins during the quarter. Additionally, new order activity remained strong throughout the third quarter, which is typically a seasonally lower order period. As a result, we entered the fourth quarter with a healthy backlog of $334 million as of September 30, up from $137 million at year-end, and $96 million at the end of the third quarter of 2009. During the first month of the fourth quarter, quote and order activity strengthened further and we are encouraged by the continued momentum of trailer demand and fleet activity.”

Giromini continued, “While new trailer shipments of 6,800 units for the third quarter were slightly below our guidance of 7,000 to 8,000 units, customer orders and production during the quarter supported sales near the high-end of our estimate. The disconnect between trailer production and shipments will correct itself throughout the current quarter as customers have now adjusted to our higher daily build rates. Our projection of new trailer shipments for the year of 23,000 to 25,000 units remains unchanged, which equates to an expectation of fourth quarter shipments of 8,000 to 10,000 units.”

Operating results for the third quarter of 2010 showed sequential improvement across most areas and reached levels not experienced since 2008. On a non-GAAP basis, the Company’s Operating EBITDA of $0.6 million was better than the second quarter of 2010 by approximately $1.1 million on approximately 1,400 additional new trailer shipments. A discussion of the Company’s use of Operating EBITDA as a non- GAAP measure is included below, and a reconciliation of Operating EBITDA to net income (loss) is provided in the supplemental schedules included in this release.

Equity Offering
On September 13, 2010 Trailer Investments, LLC (a wholly-owned entity of Lincolnshire Equity Fund III, L.P.) sold its entire position in the Company through the sale and exercise of its Warrant in a public offering through Morgan Stanley & Co. Incorporated. Trailer Investments, LLC sold 9,349,032 shares, at a purchase price of $6.75 per share. As a result, the Warrant held by Trailer Investments, LLC was fully exercised and is no longer outstanding. The Company did not receive any proceeds from the sale of common stock. As a result of the sale of shares by Trailer Investments, LLC, shares of common stock outstanding as of September 30, 2010 was 68,294,580.

Financial Results
The Company reported a net loss of $1.9 million and $0.03 per diluted share for the third quarter of 2010 on net sales of $171 million. For the same quarter last year, the Company reported a net loss of $66.4 million, or $2.23 per diluted share, on net sales of $88 million. Third quarter new trailer sales totaled 6,800 units, an increase of 3,200 units from the prior year period.

Results for the three months ended September 30, 2010 include a non-cash benefit of $3.3 million related to the decrease in the fair value of the warrant or an impact of $0.05 per diluted share. Results for the three months ended September 30, 2009 include a non-cash charge of $54.0 million related to the increase in the fair value of the warrant or an impact of $1.78 per diluted share.

Third Quarter 2010 Conference Call
Wabash National Corporation will conduct a conference call to review and discuss its third quarter results on November 3, 2010, at 10:00 a.m. EDT. The phone number to access the conference call is 877-407- 8035. The call can also be accessed live on the Company’s website at www.wabashnational.com. For those unable to participate in the live webcast, the call will be archived at www.wabashnational.com within three hours of the conclusion of the live call and will remain available through January 26, 2011.

Non-GAAP Measures
In addition to disclosing financial results calculated in accordance with United States generally accepted accounting principles (GAAP), the financial information regarding the results of the three and nine months ended September 30, 2010 contain the non-GAAP financial measure Operating EBITDA that excludes, among other things, charges incurred as a result of the fair value accounting of the Company’s warrants outstanding during the quarter. The charge or benefit associated with these warrants is presented separately within Other Income and Expense on the Company’s Condensed Consolidated Statements of Operations for the three and nine month periods ended September 30, 2010.

Operating EBITDA should not be considered a substitute for, or superior to, financial measures and results calculated in accordance with GAAP, including net loss, and reconciliations to GAAP financial statements should be carefully evaluated.

Operating EBITDA is defined as earnings before interest, taxes, preferred stock dividends, depreciation, amortization, stock-based compensation, and other non-operating income and expense, as well as, any other non-cash special charges. Management believes Operating EBITDA provides useful information to investors regarding our results of operations. We provide this because we believe it is useful for investors to understand our performance period to period with the exclusion of the recurring and non-recurring items identified above. Management believes the presentation of Operating EBITDA, when combined with the primary GAAP presentation of operating income, is beneficial to an investor’s complete understanding of our operating performance. A reconciliation of Operating EBITDA to net income (loss) is included in the tables following this release.

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