Richard J. Giromini – President and Chief Executive Officer Jeffery L. Taylor – Senior Vice President and Chief Financial Officer.

A. Brad Delco – Stephens Inc. Alexander E. Potter – Piper Jaffray & Co. Steven L. Dyer – Craig-Hallum Capital Group LLC John R. Mims – FBR Capital Markets & Co. Jeffrey A. Kauffman – Buckingham Research Group.

Welcome to the Second Quarter Earnings Call. My name is Vivian, and I will be your operator for today’s call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. I will now turn the call over to Mr. Dick Giromini, President and CEO. Mr.

Giromini, you may begin..

Thank you, Vivian, and good morning. Welcome to the Wabash National Corporation 2014 Second Quarter Earnings Call. This is Dick Giromini, President and Chief Executive Officer. Joining me today is Jeff Taylor, Senior Vice President and Chief Financial Officer.

Following this introduction, I will provide highlights for the second quarter, followed by a look at the current operating environment and our outlook for the remainder of the year, after which Jeff will provide an overview of our financial results.

At the conclusion of our prepared remarks, we’ll open the call for questions from the listening audience. Before we begin, I would like to cover two items.

First, as with all of these types of presentations, this morning’s call contains certain forward-looking information, including statements about the company’s prospects, the industry outlook, backlog information, financial condition and other matters.

As you know, actual results could differ materially from those projected in forward-looking statements. These statements should be viewed in light of the cautionary statements and risk factors set forth from time-to-time in the company’s filings with the Securities and Exchange Commission. Second, please note that this call is being recorded.

I’ll begin by saying that we’re pleased with the Company’s overall performance this quarter and the ongoing financial and operating improvements, we’re experiencing in most areas of the business, particularly the Commercial Trailer Products segment.

Our solid second quarter results are further evidence of our ability to consistently deliver on our commitment to continually improve our overall performance and to grow the business through broader array of products, end markets and geographies, but, we look forward to even better days ahead as the actions that we have put in place to address some previously reported temporary headwinds related to lumber pricing are now taking hold and will benefit us as we proceed through the balance of the year.

Additionally, continued strong demand is providing a favorable environment in support of stronger pricing for our truckload product offerings as we enter the 2015 quoting season.

We continue to gain considerable momentum as we execute our broad-based strategic plan and further transform Wabash National into a diversified industrial manufacture with higher growth and margin profile.

In the second quarter, we achieved all-time record revenue in operating income for the company as we benefited from historically strong shipment and exceptional performance in our commercial trailer products group.

Trailer shipments across the business for the quarter were approximately 14950 units exceeding our previous guidance of 13500 to 14500 units as customers pick-up accelerated and gained considerable momentum throughout the quarter.

Second quarter build levels totaled approximately 14550 units, up some 1650 units over the prior quarter in consistent with our earlier projects. Net sales for the quarter were an all-time record $486 million, representing a $73 million or 18% increase compared to second quarter of 2013.

In addition, adjusted earnings for the quarter increased more than $2.2 million or 15% year-over-year to $16.9 million. Operating EBITDA, which we believe is an important metric to highlight the Company's progress increased by 8% or $3.4 million to a best-ever $45.7 million in the second quarter.

Operating income for the second quarter was $33.9 million, representing a $3.4 million or 11% increase year-over-year, while gross margin in the quarter did show a deterioration of 150 basis points and year-over-year comparison to 12.7%.

The improvement in operating income was driven by the significant improvement in commercial trailer products and partially offset by the decline in diversified products, while the year-over-year change in gross margin was largely attributable to the segment mix shift between commercial trailer products and diversified products with CTP representing 64% of total company revenue in the current quarter as compared to 59% in the prior year quarter.

I’ll provide more color around segment performance in a moment. Overall, we had a solid second quarter with strong trailer shipments, builds and revenue, which translated into strong profitability and operating EBITDA.

We achieved new quarterly records for operating performance, as evidenced by our revenue, operating income and operating EBITDA results during the second quarter.

Quote and order activity remained strong throughout the quarter and in contrast typical seasonal expectations for the second quarter our backlog increased during the quarter to $842 million the highest levels since 2000, consistent with the strong industry wide trailer net order levels being reported by A.C.T. Research.

With six months of reporting now in industry wide trailer and net orders totaled 156,000 units versus 107,000 units through the same period last year.

This certainly supports our longstanding belief that this could turn out to be a protracted cycle of strong demand for our industry, driven by excessively age fleets, the demanding regulatory environment and an improved pricing environment for our customers leading to improved profitability in investment in new equipment.

Looking-forward we see a continuance of a strong and solid demand environment supporting pricing stability and opportunity for continued growth in the core trailer business and as you will hear in a moment the sentiment is supported by strengthening forecast from those A.C.T. and FTR.

With that let’s shift focus to some highlights from each of our reporting segments and Jeff will follow with additional details regarding financial performance. We’ll start with the Commercial Trailer Product segment, consisting of our dry and refrigerated van products, platforms trailers and fleet trade used trailer sales.

This segment continues to perform well in executing its optimization strategy setting records across a number of financial and performance metrics in the quarter. Net sales for this segment increased $70 million or 26% on shipment of 13,900 trailer or 3200 more trailers than the prior year period.

This increasing revenue was primarily due to a nearly 30% increase in trailer shipments during the quarter partially offset by our products and sales channel mix shift impacting ASPs by over $600 including a higher incidence of customer supply tires impacting van trailer ASPs by $400 during the quarter versus the year-ago period.

Both causing nice gains made in pricing and spec mix of $500 per unit to loose visibility in the numbers. Net sales of $336 million for the quarter is the highest ever reported for this segment has now constituted.

On the margin side of the equation, the business is performing well and gaining momentum as the group generated gross margins of 8.6%, a 70 basis points improvement over the same period last year, representing the highest gross margin, ever reported for this segment is now constituted and based on the current backlog and build schedule, we would expect the gross margin to improve further in the third quarter, consistent with normal seasonality and continued performance improvement.

As we’ve discussed in the past several quarters the CTP team remains focused on the goal of achieving a double-digit gross margin quarter by the end of next year with a longer term goal of sustaining that level on an ongoing basis.

As reflected in our results, we continue to make consistent progress toward achieving these goals driven by our stated initiatives of margin growth through selective order intake, pricing, manufacturing productivity optimization and supply chain cost initiatives.

We expect trailer demands remain strong throughout 2014 with both industry forecasters expecting total demand significantly above both replacement levels and last years demand.

In fact the trailer outlook both internally and externally remain strong with our increase to the full-year trailer guidance in addition to A.C.T and FTR respectively raising the trailer shipment and trailer production forecast for 2014. Obviously we’re very pleased with the current performance in this segment and look forward to continued progress.

Moving on to the Diversified Products segment, which includes the Walker Group, Wabash Composites and Wabash Wood Products, this story is a little different.

Following eight quarters of exceptional performance DPG segment took a temporary step back as it face the combined impact at of the continued headwinds related lumber pricing along with unanticipated startup cost challenges for a new product introduction within the Wabash Composites business.

Although challenge this segment still generated net sale of $135 million consistent with the prior year period while gross margin for the segment declined by 480 basis point compared to the prior period to 18.6%, driven notably by the higher wood material cost of $3.5 million along with new product startup cost within Wabash Composites of approximately $1 million related to the introduction and ramp up of the new truck box..

Absent just these two temporary cost issues gross margins for DPG in the second quarter would implied more normalized 22.0% and 13.6% on a consolidated basis for the company.

On the revenue side some less favorable tank trailer mix and shipment delays related to non-trailer truck mounted equipment and other engineered products impacted topline growth year-over-year. That too should correct itself as we proceed through the balance of the year.

Similar to the actions we put in place in 2012, to address significant higher cost inflation faced at that time we currently have a active lumber cost recovery initiative underway along with lumber cost increased protection language now incorporated in all our new growths.

While these actions were put in place mid-way during this past quarter the effect of these actions will begin to be realized during the current third quarter. And our expected to put this particular headwind issue fully behind us, well before year-end.

Our Wabash Composites business delivered somewhat mix performance a strong AeroSkirt truck body demand led to best ever quarterly revenue. Counter by a less favorable product mix is compared to last year and the aforementioned truck box start-up costs. All combined negatively impacting operating results by nearly $900,000 year-over-year.

On the new product growth front as referenced to Wabash Composites team begin manufacturing new DuraPlate based mobile truck box for a large LTL carrier providing improved efficiency for loading and unloading of goods.

With the launch cost challenges now behind us, we see excellent growth potential for this product as it means the significantly enhanced efficiency, productivity and velocity for LTL carriers.

In addition to finding new applications in mobile transportation of storage the team continues its work and developing new aerodynamic solutions to support increasing demand for improve fuel efficiency. As aftermarket demand, for DuraPlate AeroSkirt sales continues to grow and with five new products plan for launch during the balance of the year.

We look forward to continued top and bottom line growth for this business for the foreseeable future. Finally, our retail segment experiences a strong quarter with year-over-year improvement in revenue and profitability.

Net sales of approximately $52 million; represent a $4 million increase year-over-year, primarily due to higher new and used trailer sales assisted by higher parts and service revenue.

Gross margin dollars rose in the quarter to a strong $5.7 million our gross margin present were slightly lower to 11.1% as the increase in sales was offset by higher costs to support our strategic growth initiatives for this business.

As we announced in May regarding the addition of TEC Equipment incorporated as a new independent dealer to support the West Coast region our retail segment transitioned operation of three Wabash International trailer centers to TEC in an effort to aid our core CTP business and further expanding sales and service support in the region given TECs extensive footprint in industry connections.

Although this had minimal of impact on our overall business during the quarter we expect this relationship will pay dividends through higher sales of new trailers for CTP business and the pull through of aftermarket parts in the region.

Obviously this move will result and lower revenue for the retail segment going forward, but with even greater positive impact CTP revenue and profits longer term, as unit sales from this expanded coverage region are expected to more than double.

That said we remain focused on executing our retail strategy to profitably grow this segment by increasing our presence in the tank repair and services business through expansion of the number of legacy WNTC locations with the capability to perform this service.

Expanding our mobile fleet and increasing the number of customer site service locations that we operate. In that regard we are pleased to announce we’ve entered into agreements to operate five additional customer site service locations bringing the total now eight locations at which we provide the service, down the road, more to come.

Before I discuss Wabash financials specific expectations for the third quarter and full-year of 2014, let me comment on few key economic indicators and industry dynamics we monitor closely to provide broader context for our expectations.

Following the slowdown of economic activity in the first quarter of the year due to severe weather, macro economic indicators improved in the second quarter, manufacturing activity, industrial production retail sales in the labor market of all seeing solid growth in recent months.

Yeah more improvement opportunity existing housing sector of the economy were the recovery base installed at the end of last year. Most analyst, now anticipate return to expansion for the years to come in during this next six months with both residential and non-residential construction activity anticipated to contributed growth.

And as released just this morning GDP growth of 4.0% was reported for the second quarter. Consistent with just reported GDP strength, key indicators and forecast within the trucking industry reflect growing confidence and demand strength and longevity.

ATA's TruckTonnage Index decline 0.8% in June to 128.6 following a 0.9% increase in May, the Index was 2.3% higher in June then in the same month last year and as increased 2.8% year-to-date versus the same period last year.

Catching up to or not even exceeding our own early year internal projections of 5% to 7% year-over-year demand growth, the latest report form A.C.T Research now forecast 2014 trailer shipments at just over 262000 up 9.5% year-over-year and just under 265000 trailers in 2015 up another 0.9% sequentially.

With the continued belief by A.C.T that potential legislation to permit 33-foot doubles is gaining support and would be included in a new transportation bill anticipated to be signed into law in mid-2015, which would drive even stronger demand in the 2016 through 2019 timeframe.

FTR is also adjusted its projections upward now forecasting 259000 trailers to be produced for 2014 an increase 10.2% year-over-year and projecting 244000 units to be produced in 2015.

According to FTR the Class 8 active truck utilization rate was at 99% during the first half of the year equaling the historic high from 2004 with expectations at active truck utilization will average 99% in 2014 and 98% of 2015 resulting in a very tight market supporting strong rate increases for carriers.

From a regulatory standpoint, Senator Susan Collins recently introduced a provision to the transportation appropriations bill to night funding to the hours of service, restart roles.

The amendment with suspend the night rest requirement and the once weak limitation on the restart until September 30, 2015, or when the FMCSA completes new hours of service impact study call for in the amendment. In the meantime, carriers continued to report productivity losses as a result of the hours of service rule.

As we stated in previously calls these productivity losses combined with compliance challenges related to CSA, ELD’s and car mainly to increase demand for additional drivers and equipment to fill the gap. That said continuing growing driver shortage or car changes and driver compensation as recently alluded to by numerous trucking fleets.

So the combination of a slowly strengthening economy solid TruckTonnage and improving rate environment an increasing regulatory impact of fleet productivity all support to potential for increase trailer demand overall higher industry. With that, let me share Wabash National’s expectations for the full-year 2014 in the third quarter.

We believe overall demand for trailers we’re remain solid and significantly above replacement levels in 2014 and beyond. Consistent with A.C.T and FTR projections as key drivers all remain positive.

Fleet age, customer profitability, used trailer values, regulatory compliance and access to finance all supported continued strong longer-term demand environment. Historically second quarter performance is typically a good indicator for the remainder of the year in our core trailer business.

Total shipments of nearly 15000 units exceed our previous guidance and based on the strength of build levels during the quarter along with backlog growth we are clearly well positioned as we progress through the second half of the year. As a result, we now expect third quarter consolidated shipments to be between 15000 and 16000 units.

As stated quote and order activity remain strong during the second quarter consistent with our growing backlog.

Additionally, with the recent stronger demand projections form both A.C.T and FTR for the current year along with our backlog fill for the year, we are extremely comfortable with our internal projections that full-year industry shipments will exceed those experienced in 2013.

While still remaining committed to favor margin growth over volume, we’re confident now raising our expectations for full-year shipments to be between 53000 and 55000 units.

In summary, we are obviously pleased to have delivered a solid quarter overcoming some temporary headwinds within our diversified products business segment and continue our momentum from our record setting year in 2013. Some new records were accomplished, but as always much opportunity remains.

We’re making progress but still need to make further progress in leveling out the current seasonality in numerous parts of our business the cost concern for external stake holders and operational and efficiency for those within, those efforts continue.

We need to continue the progress we made thus far to further improve gross margins in our commercial trailer products business and find more attractive higher margin growth opportunities to drive its topline. Those efforts continue and are beginning to bear fruit.

We need to accelerate the topline growth of our diversified products business to leverage the attractive margins inherent within its offerings.

Again, well underway with new product offerings new markets now, we need to improve our launch execution of those new offerings and we need to leverage the higher margin tank parts and remote service opportunities for growth of our retail segment. Same here underway has exhibited by the expansion of customer site service locations.

So a much as been done, plenty of work remains, we are now a much more diversified as a business and far different form the lavish of old [ph], leaving historical comparisons with little meaning.

We will continue to look at opportunities to strategically but selectively grow and diversify our business in addition to the organic growth initiatives already underway, while continuing to be responsible stewards of the business to assure that the proper balance between risk and reward is considers in all decisions.

And we’ll continue to manage for the long term to build value and sustainability. In closing we are extremely well positioned at this point delivering another year of top and bottom-line growth with a solid backlog and demand environments continue to gain moment and the number of new products nearing launch stage.

With that I will turn the call over to Jeffery Taylor, Chief Financial Officer to provide more detail around the numbers. Jeff..

Thanks Dick and good morning. In addition to the press release, we filed the 10-Q after the market closed yesterday. So I plan to hit the highlights. With that let’s get started.

As Dick mentioned, consolidated revenue for the quarter is $486 million, an increase of $73 million or 18 % compared to the second quarter of last year and a the best ever quarterly revenue for the company.

Total new trailer shipments were 14950 units, 450 units above the top end of our guidance range for the quarter and 3550 units higher year-over-year. Sequentially consolidated revenue increased $128 million or approximately 36%, primarily due to an increase in new trailer shipments of 5000 units driven by our core trailer business.

Commercial trailer products’ net sales were $336 million, which represents a $70 million or 26% increase on a year-over-year basis due to higher new trailer shipments of approximately 3200 units.

Year-over-year average new trailer selling prices decreased approximately $600 per unit to $23,200 primarily due to two factors, first we are experiencing higher incidence of customer supplied components in particular to tires this year especially with the larger fleets which accounts for approximately two-thirds of the change.

Second the customer mix continues to skewed towards the large fleet customers with lower spec and lower price trailer as we discussed in prior quarters. Sequentially, revenue increased $108 million or 48% on new trailer shipments of 13900 units up 50%.

Average selling price was flat sequentially as the customer mix remain stable with around 60% direct channel and 40% indirect channel. Diversified products net sales for flat year-over-year at $135 million.

Walker Group revenue was lower primarily due to the timing of shipment of non-trailer truck mounted equipment and customer acceptance for other engineered products. New trailer shipments increased by approximately 100 units compared to the prior year reflecting continued strong demand for liquid tank trailers.

Wabash Composites revenue was up slightly year-over-year as a result of continued strong truck body demand and demand for DuraPlate AeroSkirt with the Conway AeroSkrit retrofit program being a strong contributed in the quarter.

Wabash Wood Products revenue was up 42% over the prior year period as a result of increased wood requirements reflecting the higher demand for new trailer in commercial trailer product.

On the sequential basis diversified products net sale increased $15 million or 13% primarily due to the increased second quarter demand for composite products and wood products consisted with expected seasonal patterns.

Revenue from the retail segment increased more than $3 million or 7% compared to the same period last year on higher sales of new trailers by approximately 100 units, as well as higher used trailer sales and continued strong demand for parts and service.

While the TEC agreement had minimal impact over retail results in the current quarter it will impact future results with the three retail locations being transitioned to TEC or independent dealer on the West Coast. These three locations sold approximately 600 new trailers in 2013 and we expect to double this amount in the current year with TEC.

However, the new trailer sales will be credited to Commercial Trailer Products going forward. Additionally, these branch locations accounted for approximately $13 million of Parts & Service revenue in 2013.

Sequentially, net sales from retail increased approximately $6 million or 13% driven primarily by higher new and used trailer shipments in the current quarter consistent with normal seasonality.

Looking at our various product lines, new trailer sales of $385 million on 14950 units increased $78 million or 25% year-over-year including approximately 850 liquid tank trailers in our diversified product segment. This year-over-year increase is due to strong demand for new trailers across all business segments.

Used trailer revenue was approximately $15 million on 1750 units, an increase of approximately $4 million from the prior quarter as a result of increased fleet trades within commercial trailer products. As you know, fleet trades tend to be seasonal and are generally front end loaded in the first half of the year.

Component, parts and service revenue was approximately $52 million in the quarter, essentially flat from a year ago, with strong demand for composite products, as well as Parts & Service through our retail locations offset by a decline in Commercial Trailer Products non-trailer transportation equipment sales.

Finally, equipment and other revenue on a year-over-year basis decreased by $8 million to $35 million for the quarter; this decrease was primarily driven by lower sales from the non-trailer truck mounted equipment within diversified products.

In terms of operating results, consolidated gross profit for the quarter was $61.6 million or 12.7% of sales compared to $58.9 million in the same period last year. This represents a $2.7 million or 5% improvement year-over-year.

Commercial trailer products was the largest contributor to the gross profit increase, with retail also making a positive contribution. Diversified products gross profit decreased primarily due to the temporary or one-time headwinds faced during the quarter, which Dick mentioned and I will address momentarily.

With that let’s look at the segments in more detail. Commercial trailer products’ gross margin improved 70 basis points over last year resulting in a 36% increase in gross profit or $7.7 million. Sequentially, gross profit increased $13.9 million or 93% on seasonally higher trailer volume, while gross margin improved 200 basis points.

Production during the quarter was 13700 units, up by approximately 1650 units sequentially as production ramped up from the first quarter consistent with seasonal expectations and reflecting the strong industry demand. On a year-over-year basis, production was up 2700 units due to strong demand.

Diversified product gross profits decreased 6.6 million and gross margin declined 480 basis points compared to the prior year period due to multiple headwinds experienced in the quarter.

Wabash wood products declined $3.5 million year-over-year and the largest factor was the higher lumber cost as the base price of lumber increased 45% since the second quarter of last year.

The good news is that lumber prices have been stable for the past 10-weeks albeit at historically elevated levels and as Dick mentioned earlier we have implemented cost recovery and new order cost protection actions.

Additionally as Dick mentioned after adjusting for the wood price impact and the composite new product start-up cost diversified products gross margin would be 22%. The Wabash Composites Business Group gross profit decreased year-over-year due to start-up cost of approximately $1 million for a new mobile freight container.

Walker Group profit declined in the period due to lower net sales for non-trailer products and changes in customer and product mix resulting in lower average selling prices the liquid tank trailers.

Lastly, the retail segments gross profit in the quarter increased $0.2 million or 4% year-over-year due to increased new and used trailer sales as well as continued strength in parts of services. On the total company basis adjusting for the wood impact and composite new product start-up cost consolidated gross margin would have been 13.6%.

The company generated operating income of $33.9 million in the quarter and increased of $3.4 million or 11% year-over-year with solid attribution from all three operating segments, and 7% of sales operating margin was approximately excuse me 40 basis points lower than the prior year quarter.

Sequentially operating income was higher by $14.4 million primarily driven by higher shipments of new trailers in the Commercial Trailer Product segment due to normal seasonality and reflecting the strong demand environment in the core trailer business.

Operating EBITDA for the second quarter was $45.7 million, a year-over-year increase of $3.4 million or 8% resulting from the strong second quarter performance from Commercial Trailer Products and solid contributions from diversified products and retail.

Sequentially, operating EBITDA increased by $15.0 million on stronger seasonal second quarter demand. On a trailing 12 month basis, total company revenue now exceeds $1.7 billion, with operating EBITDA of approximately $157 million or 9% of revenue.

Selling general and administrative excluding amortization for the quarter was $22.3 million, a decrease of $0.4 million or 2% over the second quarter of last year. This year-over-year decrease is primarily related to lower professional service and bad debt expense, partially offset by higher employee relating costs.

Sequentially, SGA expense for the quarter increased by $0.6 million and higher employee related costs, however, SGA expenses as a percent of revenue decreased to 4.6% of sales on higher net sales in the current quarter. We expect SGA as a percentage of revenue to be approximately 5.5% or lower for the full-year.

Intangible amortization for the quarter was $5.5 million essentially flat with the prior quarter and the prior year period. The intangible amortization in the current quarter is consistent with the guidance previously provided and is expected to continue at this level for the remainder of 2014.

Interest expense consist primarily of borrowing cost totaling approximately $5.7 million, a year-over-year decrease of $0.8 million primarily related to the re-pricing of the term loan in May of 2013and $60 million of voluntary term loan prepayments we made in 2013.

Lastly, approximately 1.5 million of reported interest expenses non-cash and primarily relates to the attrition charges associated with the convertible notes.

In regards, to managing our capital structure and debt we made another $20 million voluntary debt prepayment on the term loan in late June, brining our total voluntary prepayments up to $80 million since the second quarter of 2013.

The annualized impact of the cumulative voluntary prepayments to the term loan is $3.6 million per year of reduced interest cost. Lastly, the outstanding balance on the term loan was $213.5 million as of June 30. We’ve recognized income tax expense of $10.8 million in the second quarter, the effective tax rate for the quarter was 40.0%.

However, we continue to expect the full-year effective tax rate to be approximately 39.0% to 39.5%. At June 30 we have effectively utilized all of the U.S. federal income tax net operating loss carry forwards which were available at the beginning of this year. As a result the company expects to become a cash tax payer of U.S.

federal income taxes in the second half of 2014.

Finally for the quarter, net income was $16.2 million or $0.23 per diluted share on a GAAP basis, on a non-GAAP adjusted basis after adjusting for expenses related to the early extinguishment of debt and transitions in our West Coast branch locations to independent dealer facilities, net income was $16.9 million or $0.24 per diluted shares.

In comparison the non-GAAP adjusted earnings for the second quarter 2013 were $14.7 million or $0.21 per diluted share, which exclude non-recurring charges related to the early extinguishment of debt and acquisition expenses related to the Walker acquisition and the purchase of deal assets.

With that let’s move to the balance sheet and liquidity networking capital increased during the current quarter by approximately $10 million resulting from increased production and higher sales compared to the prior quarter.

We expect networking capital to be relatively stable during the third quarter, however, it is possible that networking capital increases slightly due to higher trailer builds, higher trailer shipments and increased revenue. Capital spending was approximately $2.1 million for the quarter and $4.2 million year-to-date.

At this stage, we anticipate full-year 2014 capital spending to be approximately $20 million consistent with our previous guidance.

Our liquidity, our cash plus available borrowing as of June 30 was approximately $222 million, an increase of $16 million from the end of the prior quarter, inclusive of the $20 million debt prepayment that have previously discussed. Cash on the balance sheet was the driver of increased liquidity is the asset based revolver remains on that.

The pro forma total and net debt leverage were 2.4 times and 1.9 times respectively, you may recall from our Investor Day presentation in May of 2013, to one of our long-term financial objectives was the lower our net leverage ratio below two times. And we accomplish this goal in the second quarter.

In addition, our senior secured leverage ratio under the term loan credit agreement was 0.9 times, significantly below the current government requirement of 4.0 times or less. With that, let me wrap up with some overall financial highlights.

The company performed very well during the quarter, despite the significant, but temporary headwinds impacting the Diversified Products Group. We are pleased with the financial results and particular the record levels of revenue, operating income and operating EBITDA. However, we see the potential for further improvement.

The balance sheet remains strong with a solid cash balance and strong liquidity. Our leverage ratios and debt covenants remain in comfortable territory; the business is generating strong cash from operations and operating EBITDA.

Looking forward we are well positioned going into the third quarter with a very solid backlog of $842 million and more experience in capable workforce which is reflected in the operational improvements across the company and trailer industry forecast from both A.C.T and FTR with suggest the current strength in the trailer market it sustainable not only in the near-term, but also into the foreseeable future.

Lastly, we are very pleased with standard reports recently upgraded our corporate credit rating one notch from B+ to BB- siding improved profits and cash flow with a stable outlook. Thank you. And I’ll now turn the call back to the operator and we will take any questions that’s you have..

Thank you (Operator Instruction) and our first question comes form Brad Delco. Brad, please go ahead..

Good morning, Dick, Good morning Jeff..

Good morning Brad..

Good morning..

Dick you made some comments about the wood products division and the margin pressure you saw and the color on what steps are being taken to address that. It sounds like we will some corrective actions in the third quarter and hope to fully recover by fourth quarter.

With $3 million of I guess year-over-year head wins this quarter, can you give us some more quantification as to what we might see in the third quarter and then maybe fourth quarter in terms of how this phases out or how quickly this phases out?.

Yes, it moves over during the third quarter, it get progressively better as we progress through the quarter. So you look at the $3.5 million by the time we get to the fourth quarter that’s behind us, but in the third quarter probably something less than a $1 million of impact as we progress through.

Yes I think back to the timeframe in which we put the actions in places and that was about midway through the past quarter and when you look at the backlog that we already had in place.

So the actions to get all of the initiatives in place, the recovery actions in place, so we are starting to see the impact, but it slowly builds up as we progress through the quarter.

So I would suggest something less than a $1 million of favorable impact relative to the position we are in the second quarter for the third quarter and then full recover in the fourth quarter..

Got it. So when we think about sort of your – not in the silly guidance, but the parameters you sort of set for gross margin expectations for diversified products segment.

Being in that sort of 21% to 24% range isn’t out of the norm, but maybe we see a little bit of pressure continue in the third quarter, I mean can you be in that range third quarter or is it going to be something closer to what we saw?.

Yes, it should improve somewhat, but I will be low-end of the range that we provided in the past and then be more normalized as we get into that fourth quarter as the example I gave earlier about the 22%. If we fully address the two elements the limber costs issue and the start-up costs issue going away it’s a more normalized 22%.

So, in that 21% to 24% range that we’ve kind of spelled before. So, yes it’s going to be pressure but on the lower end in the third quarter for certain..

Right, the other facts that will come into play there Brad the seasonality of Wabash Composites is slightly different than the core trailer business and for the past couple of years, their strongest quarter has been Q2 and then they typically pull back a little in Q3.

So, that’s the normal seasonal pattern that we see for Wabash Composites as well which could play a role in the third quarter results..

Gotcha and then maybe final question Dick in your comments you also said you expect gross margin to improve in the third quarter.

Are you specifically calling out gross margin dollars or how do we think about the seasonality of gross profit margin percent from second to third quarter and what could be affecting that?.

Yes Brad I think obviously commercial trailer products is two-thirds of the company on topline revenue, so that’s going to be a big driver and the shipment guidance that we gave there, we have a healthily backlog and so given the strong builds, the strong shipment which we've discussed many times in regard to that seasonal pattern, Q3 is typically our strongest quarter there and so that will be a big driving factor and then we expect diversified products to improved sequentially as well as we just discussed in retail to perform also..

Got you. So looking specifically though at Commercial Trailer Products and not taking the mix between the segments.

If I look back historically you typically improved your gross profit margins in that trailer business by about 20 bips, what could effect that one way or the other, it seems like you guys are running close to 90% utilization, pricing should be a little bit more pronounced and maybe those margins could be better.

What could work against you in terms of that normal sequential change?.

It should improve second quarter to third quarter..

Okay. All right guys. Thanks for the time. I’ll get back in queue..

Thank you Brad..

And our next question comes from Joel O'day [ph]. Joel please go ahead..

Hi, good morning, guys. First question I guess just looking at the implied shipments into the back half of the year. It looks like right now, you are calling for a little bit of a sequential step down from 3Q to 4Q that would be larger than what we’ve seen over the past few years.

And so, is that just a matter of waiting for a little bit more backlog support in those numbers or just looking for a little bit more details on that implied guide?.

Yes, Joe I think we've consistently said, we typically would expect Q3 to be slightly stronger than Q4, just as a normal seasonal pattern and our guidance for Q3 is 15000 to 16000, I think if you do the math that you will see that Q4 is slightly below that, but it will depend upon customer pickups during Q3 and Q4.

We are predicting a really nice healthy strong second half of the year and I think that’s real important message from the guidance we have given..

Okay and then maybe just a little bit bigger picture. When you talk about a double digit margin in CTP, you think about that kind of volumes you will have in the back half, I mean those are very supportive volume.

So for that kind of target I mean is that on types of volumes that we’ll be seeing in the back half and could you just talk about kind of the operational steps that you have planned to then drive toward that double digit margin target?.

Yes, obviously the strong market is certainly supporting those efforts, so higher volume obviously brings the potential to get some leverage on it, but the action is that the team has been very focused on being – favoring the margin improvement over volume.

So in other words not going after orders just for the second getting orders or trying to get the best of what’s available out there. In this environment you get a lot of large orders from key customers because there are very healthy and they are replacing some very aged equipment.

And that’s where our comments earlier about the mix being in that I believe was 64% or 60% to 40% some ratio like that in the large direct versus the indirect segment. So it’s still skewed heavily toward that group I think it’s like 60% to 40%.

And the second element of course is that ability to push the pricing through the market and we had worth of backlog at the end of the first quarter, so if you think about what the remaining opportunities for quoting as we completed through the second quarter and now in the third quarter while pricing is continuing to be pushed, the impact is less impactful than what it will be for the 2015 calendar year and which we’re just entering that quoting season.

So we continue to push as all new quotes come in, we are trying to take advantage of the stronger demand environment to continue to push pricing and ultimately improve those margin.

The other factors that come in, the normal actions that we take under all conditions and that’s continuing to drive operational improvements on the factory floor through our continuous improvement efforts improving the proficiencies of the workforce, the capabilities, running lean events to optimize line velocity and inefficiencies on the factory floor.

And then, the initiatives we take in our supply chain side on our supply components and materials pricing initiatives with suppliers as we enter into new agreements from year-to-year.

So, all of those factors play into getting to that double-digit margin and hopefully beyond once we get there for a quarter then we get that to be sustainable for full-year and then continue to look at ways to further enhance it through different product offerings, and different end markets that we can get into..

Got it. Thanks very much..

You are welcome. Thank you..

And our next question comes from Alex Potter. Alex, please go ahead..

Thanks. Hi guys..

Hi, Alex..

I was wondering if we could touch again on diversified products obviously there is the new products startup costs and there is the wood and all of this, but it sounds like also there was some mix impacts. I notice the ASPs on new trailers came down quiet a bit in that segments and you called mix out as well.

I was just wondering if you could flush that out a little bit more what was going on there specifically kind of in Layman's terms and then do you expect that to correct or is that something that’s going to persist..

Yes.

Alex the mix that impacted in the diversified products let me start with the Walker Group and I think that’s probably the biggest area of impact there, those liquid tank trailers there is a lot of variation in that space and the average price of liquid tank trailers in a fairly normal range is somewhere between $60,000 and $120,000 for each unit and certainly you know very unique units can be even significantly higher than in that high end.

But with that wider range for that the normal product variation and then you are going to see some variation in ASP and we saw that in the second quarter where we had some other issue units that were on the lower end of the range there and that what contributed some to the product mix.

In addition you notice that the unit volume was up a 100 units quarter-over-quarter from the prior year and we did have some larger order size that shift and obviously those the bigger orders put some pressure on pricing as well and that also impacted the quarter that’s what’s we’ve been described as customer mix..

How is it proceed going forward, and we look at the average selling price that we have right now is kind of within the normal range so we would expect to see the normal variation continue there, it could go up or it could go down..

Okay, interesting. Thank you.

I was wondering also if we talk about within that liquid tank business, obviously its fracking, holding liquids, holding water into an out of the those oil and gas fields is kind of a secular trend into the expanse that your mix in Walker shifts more to move towards that segment, generally speaking with that be a positive or negative or a neutral for emergence?.

I think the – you’re talking about the energy in oil and gas and a couple of years ago, that market was really hard and the margins were pretty inflated. I think based on what we see in the current environment of those margins are within the normal range of what we see in the liquid tank trailer space so....

Okay, very good. Thanks guys..

You’re welcome. Thank you..

And our next question comes form Steve Dyer. Steve, please go ahead..

Good morning, Dick. Good morning, Jeff..

Hi, Steve..

Hello..

So, most of might have been answer, so I want to make sure kind of – I’m thinking about the mass correct so it sounds like mix sort of what it has been in terms of CTP versus DPG and it sounds like kind of gross margins in the trailer business kind of remaining where they are, maybe a little bit of improvement as we go here and then a little bit of improvement in Q3 and more in Q4 for DPG margin.

So, I mean safe to assume that the gross margin in aggregate improves in Q3?.

Yeah, I think your assessment in terms of the individual segments found it pretty accurate from what we talked about.

The only factor that comes into play there is the segment mix where DPG not DPG but CTP can grow proportionately to the rest of the company and represent a higher percentage of the total revenue and Dick mentioned that in his comments for this quarter to the extent that you have a little bit of that movement in Q3 than we don’t have to do the math and work that out for segment mix, but I think your analysis of the individual segments mix sounds consistent with what we said..

So given that were I guess a month through that quarter and you kind of know what you have in the backlog would you expect the trailer mix that the CTP mix to grow proportionate or grow in excess of the rest in Q3 or do you expect kind of that 64% , 65% of level?.

In terms of channel mix, I think the backlog..

Destocking them mix between segments.

Mix between the segments, yeah. The driving factor there is going to be the shipment guidance that we gave Steve, so we said 15,000 to 16,000 units in Q3 we did 14,950 in Q2 so it will be up slightly for CTP but once again you just need to do the math..

Well, but you didn’t give release but I heard DPG guidance directionally by for any so to specifics for Q3 over Q2.

So lets I am trying to get the sense of kind of what’s you see more growth from an ultimately what the mix is in Q3?.

Yeah, I think we expect DPG to perform fairly consistent with kind of historical patterns there..

Okay thank you..

You are welcome. Thank you..

And our next question comes from John Mims. John, please go ahead..

Hey good morning guys, thanks..

Hi, John..

And Dick let me there has been a lot of numbers kind of turnaround. So I just want to make sure I understand what you are saying that margins in the progression in third quarter.

In the DPG Group, so you said would pressure at the low end of the range if 21% to 24%, but then you typically would see some seasonal softness from Q2 to Q3 so and if what you know now and realize it still somewhat fluid, but is pressured mean you below that typical range or just at the low end.

So I am make sure understand what’s you are saying right..

Yes, so I think what Dick was saying was that considering all of factors that are impacting us in the current quarter in the comments we made relative to the Q3 that we would expect the DPG margins to be near the low end of that range, I don’t think we can give specific guidance and comments as to whether its slightly as above or slightly below and both of those are in the play?.

Yes John we are not trying to be a elusive or evasive it’s difficult to project even at this point in the quarter what the ultimate shipments are, we recognize revenue we could actually ship the equipment we can do some internal modeling, but at the end of the day it really comes down to what mix of products ends up shipping for the quarter that’s what’s the elusive thing and trying to respond to that question..

Okay. Yes that makes sense and that’s what I wanted to clear up because I feel like go into 21% and then realize that’s you get – you could probably get their above fourth quarter but that’s a lot to make up when you are still working through some of that backlog.

So just whether sure if I misinterpreted you know that the range come out but that’s helpful. Let me ask on the commercial trailer side given that orders are strong as they have been backlog as where it is.

Are you totally full from a build standpoint for the rest of this year or do you have some triage and kind of flexibility as far as what you can do to leverage more pricing from guides in the back half?.

There is always some opportunity to leverage capacity and we can do that through over time and that the areas were we probably have the least amount of open available capacity would be in the drive-in segment, orders have been very, very strong in the drive-in segment in the refrigerator there is always some opportunity in the flat-bed business that typically doesn’t have the long lead times, its typically 12 to 15 weeks more typical than what you know when you see about six months we are talking about in the aggregate.

So that area of the business continually is quoting and taking orders even for the current model year the current calendar year.

So these are some flexibility if an opportunity comes along there is a dedicated contract orders that customer gets it’s a reasonably short lead item that they need and there willing to pay the premium to have us open up some week end slots then we may consider taking advantage of that opportunity so we always have some flexibility..

Okay that makes sense. So I mean assuming and where you comment if I'm right or not, but given the industry the order trends and how tight most people are that you are getting more pricing power even in your standard dry vans now than you were earlier in this year and certainly at this point last year.

So if everybody is kind of enjoying a little bit of that tailwind, when is it reasonable, it is moreover of a 2015 or maybe a little bit earlier. That it’s reasonable to see a pick-up in ASPs, again just on to your standard dry products..

Yes, let me touch on, because that brings up a couple of points I want to reinforce. The ASP and I know that we threw a lot of numbers at you earlier on what happened with ASPs in the commercial trailer products business.

A good portion of that was I think $400 of that deterioration was strictly tied to the significant increase and customers opting to supply tires. So the tire value is not included in the price of those trailers, when they get shipped and recognized.

So, that’s a little bit unique and when we look at year-over-year basis this 2014 customer supplied tires were at the highest level ever, between 3.5 times to 4 times on a percentage of units that customers elected to do that. So, that moves to needle on that.

So, that one is unpredictable as to what they would elected to do as we quote for the 2015 calendar year, whether they elect to supply tires on their own or have us procure tires in the marketplace.

So, it’s not a deterioration in price and I know some folks have looked at it and thinking that price deteriorated quite opposite, price was improving during the same time, but it was in a way overwhelmed in the numbers by the customer supply tire side of it, but as we get into the 2015 quoting season that’s when some nice gains can be made in pricing.

If we go back to the normal quote and order patterns for the CTP business in particular, recall that during the fall and early spring or actually early winter season of the year, so the October November, December, January, February months tend to be very, very strong months for large customer, larger order intake.

And by the time you get through that period you have got a good portion of your backlog for the year already established and the pricing at that time is lower than what it’s going to be this coming fall. So I just say that because it’s a smaller order, the smaller customers that were able to continue to push pricing as we go throughout the year.

Once we locked with the big guys it’s locked for the full-year. So if the orders that they are placed in the October, November, December timeframe are for all 12-months of the following year, so you have those locks.

So it does take time when you have your pricing initiatives to start showing and taking hold and that’s why as we progress to the year and we have shown this in the last two to three years that we continue to have some pricing improvement because of the smaller orders coming, it gives us the opportunity to access what the market is and our ability to continue to push pricing into the market.

So is this next quote season as we’re just entering now, we feel very good about where the demand environment is and the ability to be able to continue to push pricing for the 2015..

Sure that makes total sense.

And I understand the tire disparity, I didn’t think that was a decline in price at all, but I guess what I was asking more, you seen kind of in May and June from industry basis the sort of bucking of seasonal trends for orders have stayed really strong instead of kind of starting to fall off and maybe you can comment on how that’s trending in July, but if you are taking more and more of these small orders now and you are starting to push maybe production for some of these into 2015 as you enter the big order season this fall are you in the scenario where there is already enough build capacity taken up from the orders that you are receiving now that you can be more aggressive with pricing with the bigger guys? That makes sense?.

Yes, the vast, vast majority of orders that have been accepted are for 2014 builds just to clarifying, so its not that we are taking small orders for 2015 at this point, but the same notion does hold true in what you are saying is that the position we are in today does provide and the strong demand environment and the expectations for continued strong demand for next year does put us in a much better position than we were a year-ago at this time when it comes to pricing those very large customer, large order quotes..

And then just a quick comment on July order trends versus normal seasonality..

The quote activity has continued to be favorable relative to prior periods when you look at on a seasonally adjusted basis, and you look historically the trends that we've seen over this quoting year had been favorable to what we had seen in previous years.

So that has given us more and more confidence in our projections, in our ability to be a little bit more bold about the projections.

We wanted to be sure the last quarter before we went and changed anything, we were out ahead of A.C.T as you recall at the beginning of the year, they were at the 1.5% to 2% year-over-year projection, we were at 5% to 7%, some folks thought we were being too aggressive, but we were confident based on conversations with our customers and what we were receiving from early quote activity.

And what we did know is would that be able to continue with the strength as we progress throughout the second quarter and as we now know it has, even surprised us with the amount of strength that’s continued and of course of both A.C.T and FTR have caught and had passed us but now with the backlog fill that we’ve been able to gain, we feel confident in going out with the much stronger numbers..

How much that do you think is more still a replacement, driven versus real kind of fleets, I mean trailer fleet growth the drop and hook and all of those sort of secular trends?.

Yes, its always hard to sort out, customer don’t tell us they want a 1000 trailers they don’t say 700 of them for replacement and 300 are for additional drop and hook. We don’t know how they actually use the fleet.

My belief is that the was majority are driven by replacement, you are always going to have some growth at some customer trying to gain some new lanes and new customers that they are going to have some needs, but the vast majority is really catch-up replacement as a result of the very deep and protracted down term we went through where very few people were spending any money on replacing equipment and now the fleet is excessively aged and you have got this very, very tough regulatory environment and with the CSA regs and [indiscernible] that putting even more pressure on fleets.

So the vast majority is replacement..

Great. Well yeah it sounds like it can continue for a while. Thank you so much for all the time..

And our last question comes from Jeff Kauffman. Jeff, please go ahead..

Thanks so much. Hey guys..

Hey Jeff..

Hi, Jeff..

Question of a quality type, there is a lot of cash on the balance sheet which is great, I know you are paying down debt I know you haven’t made any acquisitions yet this year, but we should getting a more positive working capital profile in the second half of the year which means more cash.

What are your thoughts on managing that cash right now?.

Thanks Jeff, I was wondering if we were going to get through the call without having the capital structure question, but I think taking that. Yes, I think the answer to that is its stay the course; we've said I think for the last four to six quarters that we’re focused on managing our debt.

And, as you mentioned we did make an additional $20 million voluntary prepayment against the term loan in the second quarter. So, that’s the primary focus managing debt and evaluation strategic opportunities to grow the business. I think to your point we do typically recover working capital in the second half of the year.

And in my comments I did mention that we could see a slight increase in working capital in the third quarter, but in general the second quarter is very favorable for us from a recovery perspective in generating good cash flow. So..

Yes Jeff, I’ll just add that, we made a commitment one to address the debt side and we’ve gotten to one of our first thresholds and that was getting under the two times on a net basis ratio that we want it.

We’ve also made the commitment to continue to look for ways to grow and diversify this business both with our organic efforts which due take investment from time-to-time, but also strategically through acquisition and we are now in a much better position to be able to look at those types of opportunities with a lot more confidence and maybe we were a year ago, because us wanting to put the heavy priority on the debt reduction and getting our ratio more comfortable level.

So we gotten ourselves with a lot more flexibility to take advantage of some opportunities that we may have considered overtime.

All right.

So I guess the way I interpret that is if we don’t see strategic opportunity in the second half of the year do we maybe think about getting even more aggressive with the pace of debt reduction?.

Yes, Jeff I think we look at the, those actions on a quarter-by-quarter basis that’s the process we’ve had for the last like I said four quarters to six quarters. I think that’s the process will continue its work for well for us. So we will take it quarter-by-quarter and see where we are and see what opportunities we have in the company.

Over evaluate where we get the best flexibility and the best return from the various options we have available to us and we’ll makes decision at that point..

Okay. Well, please remind me.

When do we start to anniversary these mix imbalances on the CTP side?.

Yes I think, that’s a fair question Jeff. If we were to go back year ago we have target at the go to 50/50 target between the large direct accounts the indirect speaking to the CTP business because that’s where the mixed effect really placed when within the segment.

We are always going to have to deal with and discuss mixed issues related from segment-to-segment as one segment may grow faster than another or they cyclical demands are seasonal demands for CTP which overshadows the DPG.

So that the part of it won’t go away, but within the segment within CTP, I think what we are seeing now as we get into this level in the cycle with the big guys really going after addressing the replacement of fleets.

While we are going to continue to push for the 50/50 it’s probably more likely that the 60/40 ratio is probably going to be more realistic. there is just so much buying power that the larger guys have that I think it’s going to be tougher and tougher to get for the 50/50 without just walk in a way from some other. So that’s your point.

The anniversaries have we are probably get into that point where it looks like quarter-over-quarter. We may have some benefit from one quarter to the next, but over the course of the year’s time.

Maybe we’ll say 55 to 60 rather 60 to 60/40 would be 55/45 might be about as good as and get and we will just see how goes, but we don’t want to make it a significant issue from quarter-to-quarter it’s not our intention.

We are just trying to lay it out for you that we do have that issue and because of the huge difference between ASPs within CTP type product versus ASPs within DPG that it can really move the need when you have some shifts like that so..

Okay I understood the TEC trailer conversions where we are going to start to see some of those retail trailers show up and CTP I think you mentioned 600 trailers.

Number one is that an annual, number two when should we start seeing that transition into the CTP numbers?.

Yes Jeff that is an annual number that was the new trailer shipments form those three locations in 2013. So it’s a full-year number. That transition was effective, I think June 1st..

June 1st?.

Effective June 1st and TEC is our West Coast dealer representing us in three states out there..

Okay then one last question, you mentioned the start-up cost related to a new product and I think I heard you say Modal box that sounds a lot like a container to me, could you give us a better idea, you are getting back into the container business or is this something kind of unique for a very specific customer purpose?.

Yes, it’s a unique solution, its referred to as a mobile truck box and it actually its an efficiency improvement on how hand load materials are managed for LTL instead of manually loading one box at a time, they are staged in these boxes external to the trucks and then this box is put within the truck, within the trailer and its just an operational efficiency improvement that has some really nice potential related to it.

It speeds up, improves velocity for the LTL and being able to manage when they do their loading and unloading.

So form distribution center, so it’s in our mind a big improvement in operational efficiency, its in its early stage, but the launch was more challenging than what had been anticipated and a little bit unique in what we have experienced with these type of launches and that’s why it was notable.

We hope we don’t have any more notable ones to have to speak up and going forward, so there was a big lessons learned review on this whole thing to identify what went wrong in the launch of it. So that we don’t have a recurrence of that going forward, so we are expecting that to be a one and only and we will see how we do on that..

All right guys, well congratulations and thank you..

Thanks Jeff..

We have no further questions at this time. I will now turn the call back over to Dick. Please go ahead..

Thank you, Vivian. Well in collusion, we are pleased with the results we are able to deliver overall in the second quarter 2014. And that said, we continue to see further opportunities to accelerate topline growth, expand our product to market breadth and to deliver even greater performance in almost all aspects of our business.

With a key focus on execution and delivering results, I'm certainly confident that we will do just that. Thank you for your interest and support of Wabash National Corporation. Jeff and I look forward to speaking with all of you again on our next call. Thank you..

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect..