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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
[X] THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JUNE 30, 2003
OR
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
[ ] THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM________ TO___________
COMMISSION FILE NUMBER: 1-10883
WABASH NATIONAL CORPORATION
---------------------------
( Exact name of registrant as specified in its charter)
Delaware 52-1375208
-------- ----------
(State of Incorporation) (IRS Employer
Identification Number)
1000 Sagamore Parkway South,
Lafayette, Indiana 47905
------------------ -----
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code: (765) 771-5300
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months and has been subject to such filing requirements
for the past 90 days.
YES X NO __
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
YES X NO __
The number of shares of common stock outstanding at August 5, 2003 was
25,798,400.
WABASH NATIONAL CORPORATION
INDEX
FORM 10-Q
PART I - FINANCIAL INFORMATION Page
----
Item 1. Financial Statements
Condensed Consolidated Balance Sheets at
June 30, 2003 and December 31, 2002 3
Condensed Consolidated Statements of Operations
For the three and six months ended June 30, 2003 and 2002 4
Condensed Consolidated Statements of Cash Flows
For the six months ended June 30, 2003 and 2002 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 12
Item 3. Quantitative and Qualitative Disclosures about Market Risk 22
Item 4. Controls and Procedures 23
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 23
Item 2. Changes in Securities and Use of Proceeds 24
Item 3. Defaults upon Senior Securities 24
Item 4. Submission of Matters to a Vote of Security Holders 24
Item 5. Other Information 25
Item 6. Exhibits and Reports on Form 8-K 30
Signature 31
2
WABASH NATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, December 31,
2003 2002
---- ----
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 6,615 $ 35,659
Accounts receivable, net 85,846 34,396
Current portion of finance contracts 7,962 9,528
Inventories 139,461 134,872
Prepaid expenses and other 21,409 18,299
--------- ---------
Total current assets 261,293 232,754
PROPERTY, PLANT AND EQUIPMENT, net 137,096 145,703
EQUIPMENT LEASED TO OTHERS, net 64,867 100,837
FINANCE CONTRACTS, net of current portion 16,890 22,488
GOODWILL, net 35,444 34,652
OTHER ASSETS 17,929 29,135
--------- ---------
$ 533,519 $ 565,569
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $ 155,593 $ 42,961
Current maturities of capital lease obligations 45,733 12,860
Accounts payable 65,018 60,457
Other accrued liabilities 60,324 61,424
--------- ---------
Total current liabilities 326,668 177,702
LONG-TERM DEBT, net of current maturities 134,184 239,043
LONG-TERM CAPITAL LEASE OBLIGATIONS, net of current maturities 1,945 51,993
OTHER NONCURRENT LIABILITIES AND CONTINGENCIES 21,654 22,847
STOCKHOLDERS' EQUITY:
Preferred stock, 352,000 shares issued and
outstanding with an aggregate liquidation
value of $17,600 3 3
Common stock, $0.01 par value, 25,753,068 and 25,674,060
shares issued and outstanding, respectively 258 257
Additional paid-in capital 238,494 237,489
Retained deficit (188,588) (162,222)
Accumulated other comprehensive income (loss) 180 (264)
Treasury stock at cost, 59,600 common shares (1,279) (1,279)
--------- ---------
Total stockholders' equity 49,068 73,984
--------- ---------
$ 533,519 $ 565,569
========= =========
See Notes to Condensed Consolidated Financial Statements.
3
WABASH NATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
-------------------------- --------------------------
2003 2002 2003 2002
---- ---- ---- ----
NET SALES $ 230,231 $ 210,251 $ 452,739 $ 372,203
COST OF SALES 206,542 204,024 406,709 365,937
LOSS ON ASSET IMPAIRMENT 28,500 -- 28,500 --
--------- --------- --------- ---------
Gross profit (loss) (4,811) 6,227 17,530 6,266
GENERAL AND ADMINISTRATIVE EXPENSES 7,894 14,807 18,433 28,898
SELLING EXPENSES 6,022 6,030 11,240 11,779
--------- --------- --------- ---------
Loss from operations (18,727) (14,610) (12,143) (34,411)
OTHER INCOME (EXPENSE):
Interest expense (10,391) (7,816) (18,259) (13,489)
Trade receivables facility costs (403) (1,902) (625) (3,633)
Foreign exchange gains and losses, net 2,733 2,211 5,589 1,958
Other, net (480) 440 (400) 1,362
--------- --------- --------- ---------
Loss before income taxes (27,268) (21,677) (25,838) (48,213)
INCOME TAX BENEFIT -- -- -- (11,947)
--------- --------- --------- ---------
Net loss (27,268) (21,677) (25,838) (36,266)
PREFERRED STOCK DIVIDENDS 264 443 528 886
--------- --------- --------- ---------
NET LOSS APPLICABLE TO COMMON STOCKHOLDERS $ (27,532) $ (22,120) $ (26,366) $ (37,152)
========= ========= ========= =========
BASIC AND DILUTED NET LOSS PER SHARE $ (1.07) $ (0.96) $ (1.03) $ (1.61)
========= ========= ========= =========
COMPREHENSIVE LOSS
Net loss (27,268) $ (21,677) $ (25,838) $ (36,266)
Foreign currency translation adjustment 243 171 444 166
--------- --------- --------- ---------
NET COMPREHENSIVE LOSS $ (27,025) $ (21,506) $ (25,394) $ (36,100)
========= ========= ========= =========
See Notes to Condensed Consolidated Financial Statements.
4
WABASH NATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Six Months Ended June 30,
--------------------------
2003 2002
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(25,838) $ (36,266)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 13,327 15,017
Net gain on the sale of assets (429) (137)
Provision for losses on accounts receivable and finance contracts 940 7,129
Cash used for restructuring activities (159) (699)
Trailer valuation charges 2,057 6,101
Loss contingencies -- 6,000
Loss on asset impairment 28,500 --
Change in operating assets and liabilities:
Accounts receivable (52,104) (41,786)
Inventories 2,823 48,809
Refundable income taxes 886 24,596
Prepaid expenses and other 3,792 4,731
Accounts payable and accrued liabilities 2,479 25,429
Other, net (1,224) (373)
-------- ---------
Net cash provided by (used in) operating activities (24,950) 58,551
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (3,460) (1,860)
Additions to equipment leased to others -- (8,497)
Additions to finance contracts -- (7,786)
Proceeds from sale of leased equipment and finance contracts 4,805 3,556
Principal payments received on finance contracts 4,389 5,850
Proceeds from the sale of property, plant and equipment 1,749 34
-------- ---------
Net cash provided by (used in) investing activities 7,483 (8,703)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from:
Issuance of bank term loan -- 80,402
Borrowings under trade receivable facility 40,918 --
Revolving bank line of credit 15,500 24,048
Issuance of common stock 756 180
Payments:
Revolving bank line of credit (49) (113,741)
Payments under trade receivable facility (18,600) --
Debt and capital lease obligations (48,571) (38,497)
Preferred stock dividends -- (443)
Debt issuance costs (1,531) (3,805)
-------- ---------
Net cash used in financing activities (11,577) (51,856)
-------- ---------
NET DECREASE IN CASH AND CASH EQUIVALENTS (29,044) (2,008)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 35,659 11,135
-------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 6,615 $ 9,127
======== =========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 14,941 $ 12,845
Income taxes refunded, net (754) (24,455)
======== =========
See Notes to Condensed Consolidated Financial Statements.
5
WABASH NATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. GENERAL
The condensed consolidated financial statements of Wabash National Corporation
and its subsidiaries (the Company) have been prepared without audit, pursuant to
the rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. In the opinion of
management, the accompanying condensed consolidated financial statements contain
all material adjustments (consisting only of normal recurring adjustments)
necessary to present fairly the consolidated financial position of the Company,
its results of operations and cash flows. The condensed consolidated financial
statements included herein should be read in conjunction with the consolidated
financial statements and the notes thereto included in the Company's 2002 Annual
Report on Form 10-K.
Certain items previously reported in specific condensed consolidated financial
statement captions have been reclassified to conform to the 2003 presentation.
2. INVENTORIES
Inventories consisted of the following (in thousands):
June 30, December 31,
2003 2002
---- ----
Raw material and components $ 28,489 $ 27,646
Work in process 10,738 14,447
Finished goods 61,795 55,523
After-market parts 14,044 15,054
Used trailers 24,395 22,202
-------- --------
$139,461 $134,872
======== ========
3. NEW ACCOUNTING PRONOUNCEMENTS
Variable Interest Entities
In 2003, the Financial Accounting Standards Board (FASB) issued Interpretation
No. 46 (FIN 46), Consolidation of Variable Interest Entities. FIN 46 defines a
variable interest entity (VIE) as a corporation, partnership, trust or any other
legal structure that does not have equity investors with a controlling financial
interest or has equity investors that do not provide sufficient financial
resources for the entity to support its activities. FIN 46 requires
consolidation of a VIE by the primary beneficiary of the assets, liabilities,
and results of activities effective for 2003. FIN 46 also requires certain
disclosures by all holders of a significant variable interest in a VIE that are
not the primary beneficiary. The Company is currently evaluating the impacts of
FIN 46 to its consolidated financial statements and does not believe that the
adoption of FIN 46 will have a material impact on its consolidated results of
operations, financial position or liquidity.
6
Derivatives
In April 2003, the FASB issued Statement of Financial Accounting (SFAS) No. 149,
Amendment of Statement 133 on Derivative Instruments and Hedging Activities.
This statement amends and clarifies financial accounting and reporting for
derivative instruments and hedging activities under FASB Statement No. 133,
Accounting for Derivative Instruments and Hedging Activities, by requiring
contracts with similar characteristics to be accounted for comparably. The
Company does not expect adoption of SFAS No. 149, effective for contracts
entered into or modified after June 30, 2003, to have a material effect on
financial position, results of operations, or cash flow.
Financial Instruments
In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity. This statement
changes the accounting for certain financial instruments that, under previous
guidance, issuers could account for as equity. SFAS No. 150 may require that
those instruments be classified as liabilities. SFAS No. 150 is effective for
financial instruments entered into or modified after May 31, 2003, and otherwise
is effective at the interim period beginning after June 15, 2003. The Company
currently has no such instruments and the adoption of SFAS No. 150 will have no
impact on its financial position and results of operations.
4. RESTRUCTURING AND OTHER RELATED CHARGES
Charges totaling $48.2 million ($46.6 million in 2000, $1.4 million in 2001 and
$0.2 million in 2002) were recorded in connection with the Company's exit from
manufacturing product for export outside the North American market,
international leasing and financing activities, and the consolidation of certain
domestic operations. To date, $40.0 million has been utilized. The remaining
balance at June 30, 2003 relates to the following (in thousands):
Equipment Guarantees $6,216
Financial Guarantees 1,161
Other Charges 827
------
$8,204
======
Although certain guarantee obligations do not contractually expire until 2018,
the Company anticipates substantially completing all activities related to this
restructuring plan by the end of 2004.
5. DEBT AND CAPITAL LEASE OBLIGATIONS
In April 2003, the Company completed the amendment of its Bank Term Loan, Bank
Line of Credit, Senior Notes, Trade Receivables Facility and Sale and Leaseback
Facility. The agreements amended debt covenants with its lenders and cured a
technical violation of prior covenants. Among other provisions, the amendments:
- Limit capital expenditures to $4.0 million within a fiscal year;
- Specify minimum levels of earnings before interest, taxes,
depreciation and amortization (EBITDA) and shareholders' equity and
a maximum debt to assets ratio; and
- Require that the Company have a commitment to refinance, amend or
restructure its debt and capital lease obligations prior to January
31, 2004.
Additionally, the amended covenants contain a subjective acceleration clause
related to material adverse changes.
7
Due to either scheduled maturities or a commitment to refinance, amend or
restructure existing debt and capital lease obligations by the end of the first
quarter of 2004, the Company has classified the portion of its June 30, 2003
Bank Term Loan, Bank Line of Credit, Senior Notes, Trade Receivables Facility
and Sale and Leaseback Facility not repaid with the net proceeds from the notes
offering discussed below, as current.
On July 15, 2003, the Company announced the selection of Fleet Capital to lead
and fully underwrite a new syndicated bank financing for the Company.
Subsequently, the Company and Fleet Capital reached agreement on a three-year
asset-based arrangement that will include a $175 million revolver and a $47.5
million term loan. The new financing, which is subject to final Wabash board
approval and definitive documentation, will be used to replace existing
indebtedness and will substantially lower the Company's cost of debt. Closing on
the transaction is expected to occur during September 2003.
On August 1, 2003, the Company completed the sale of $125 million of 3.25%
five-year senior unsecured convertible notes convertible into shares of the
Company's stock, subject to market and other conditions. The Company used the
net proceeds to repay a portion of its outstanding indebtedness. The notes have
a conversion price of $19.20 or a rate of 52.0833 shares per $1,000 principal
amount of note. The notes bear interest at 3.25% per annum payable semi-annually
on February 1 and August 1.
6. STOCK-BASED COMPENSATION
The Company follows APB No. 25, Accounting for Stock Issued to Employees, in
accounting for its stock options and, accordingly, no compensation cost has been
recognized for stock options in the consolidated financial statements. In
accordance with SFAS No. 148, Accounting for Stock Based Compensation Transition
and Disclosure, the following table illustrates the effect on net loss and net
loss per share as if the Company had applied the fair value recognition
provisions of SFAS No. 123, Accounting for Stock Based Compensation to
stock-based employee compensation (in thousands, except per share amounts):
Three Months Ended June 30, Six Months Ended June 30,
---------------------------- -----------------------------
2003 2002 2003 2002
---- ---- ---- ----
Reported net loss $ (27,268) $ (21,677) $ (25,838) $ (36,266)
Pro forma stock-based compensation
expense (net of tax) (643) (433) (1,102) (810)
---------- ---------- ---------- ----------
Pro forma net loss $ (27,911) $ (22,110) $ (26,940) $ (37,076)
========== ========== ========== ==========
Basic and diluted loss per share:
Reported net loss per share $ (1.07) $ (0.96) $ (1.03) $ (1.61)
Pro forma stock-based compensation
expense (net of tax) per share (0.03) (0.02) (0.04) (0.04)
---------- ---------- ---------- ----------
Pro forma net loss per share $ (1.10) $ (0.98) $ (1.07) $ (1.65)
========== ========== ========== ==========
7. CONTINGENCIES
A. LITIGATION
Various lawsuits, claims and proceedings have been or may be instituted or
asserted against the Company arising in the ordinary course of business,
including those pertaining to product liability, labor and health related
matters, successor liability, environmental and possible tax assessments. While
the amounts claimed could be substantial, the ultimate liability cannot now be
determined because of the considerable uncertainties that exist. Therefore, it
is possible that results of operations or liquidity in a particular
8
period could be materially affected by certain contingencies. However, based on
facts currently available, management believes that the disposition of matters
that are currently pending or asserted will not have a material adverse effect
on the Company's financial position, liquidity or results of operations.
Brazil Joint Venture
In March 2001, Bernard Krone Industria e Comercio de Maquinas Agricolas Ltda.
("BK") filed suit against the Company in the Fourth Civil Court of Curitiba in
the State of Parana, Brazil. This action seeks recovery of damages plus pain and
suffering. Because of the bankruptcy of BK, this proceeding is now pending
before the Second Civil Court of Bankruptcies and Creditors Reorganization of
Curitiba, State of Parana (No.232/99).
This case grows out of a joint venture agreement between BK and the Company,
which was generally intended to permit BK and the Company to market the
RoadRailer(R) trailer in Brazil and other areas of South America. When BK was
placed into the Brazilian equivalent of bankruptcy late in 2000, the joint
venture was dissolved. BK subsequently filed its lawsuit against the Company
alleging that it was forced to terminate business with other companies because
of the exclusivity and non-compete clauses purportedly found in the joint
venture agreement. The lawsuit further alleges that Wabash did not properly
disclose technology to BK and that Wabash purportedly failed to comply with its
contractual obligations in terminating the joint venture agreement. In its
complaint, BK asserts that it has been damaged by these alleged wrongs by the
Company in the approximate amount of $8.4 million.
The Company answered the complaint in May 2001, denying any wrongdoing and
pointing out that, contrary to the allegation found in the complaint, a merger
of the Company and BK, or the acquisition of BK by the Company, was never the
purpose or intent of the joint venture agreement between the parties; the only
purpose was the business and marketing arrangement as set out in the agreement.
The Company believes that the claims asserted against it by BK are without merit
and intends to defend itself vigorously against those claims. The Company
believes that the resolution of this lawsuit will not have a material adverse
effect on its financial position, liquidity or future results of operations;
however, at this early stage of the proceeding, no assurance can be given as to
the ultimate outcome of the case.
E-Coat System
During the second quarter of 2003, the Company concluded litigation with PPG
Industries and others regarding the PPG electrocoating system. The parties to
the litigation resolved the matter by agreement. The resolution of the lawsuit
did not have a material impact on the Company's financial position, liquidity or
future results of operations.
Environmental
In 2000, the Company received a grand jury subpoena requesting certain documents
relating to the discharge of wastewaters into the environment at a Wabash
facility in Huntsville, Tennessee. The subpoena sought the production of
documents and related records concerning the design of the facility's discharge
system and the particular discharge in question. On May 16, 2001, the Company
received a second grand jury subpoena that sought the production of additional
documents relating to the discharge in question. The Company is fully
cooperating with federal officials with respect to their investigation into the
matter. The Company received an oral communication from the government's lawyer
in the matter that he intends to seek charges under the federal Clean Water Act.
Subsequent to that oral communication, in December 2002 the Company and its
outside counsel met with the government's lawyer to discuss potential
resolutions to this matter, and we are continuing our discussions with the
9
government. At this time, the Company is unable to predict the outcome of the
federal grand jury inquiry into this matter, but does not believe it will result
in a material adverse effect on its financial position, liquidity or future
results of operations; however, at this stage of the proceedings, no assurance
can be given as to the ultimate outcome of the case.
8. PER SHARE OF COMMON STOCK
Per share results have been computed based on the average number of common
shares outstanding. The following table presents the number of incremental
weighted average shares used in computing diluted per share amounts (in
millions):
Three Months Six Months
Ended June 30, Ended June 30,
----------------- -----------------
2003 2002 2003 2002
---- ---- ---- ----
Average shares outstanding basic 25.7 23.0 25.7 23.0
Options -- -- -- --
Preferred Stock -- -- -- --
---- ---- ---- ----
Average shares outstanding diluted 25.7 23.0 25.7 23.0
==== ==== ==== ====
The average shares outstanding diluted excluded the antidilutive effects of
preferred stock convertible into 823,200 shares and 1,194,700 shares in 2003 and
2002, respectively, and 174,000 shares and 11,600 shares of stock options for
the quarter, and 89,600 shares and 23,200 shares of stock options for the six
months in 2003 and 2002, respectively.
9. LOSS ON ASSET IMPAIRMENT
During the second quarter of 2003, the Company evaluated certain assets of its
leasing and rental and aftermarket parts businesses for impairment and concluded
that the estimated undiscounted cash flows were not sufficient to support the
carrying value of the assets. Therefore, an impairment charge of $28.5 million
was recorded for the difference between the estimated fair value and the
carrying value of those assets.
On July 22, 2003, the Company signed a definitive agreement to sell certain of
the assets, at approximately book value, of its leasing and rental and
aftermarket parts businesses for $55 million in cash due at closing. The
transaction is expected to close in the third quarter of 2003 and is subject to
buyer financing. Net proceeds from the sale will be used to repay a portion of
its outstanding indebtedness.
10. SEGMENTS
The Company has two reportable segments: manufacturing and retail and
distribution. The manufacturing segment produces and sells new trailers to the
retail and distribution segment or to customers who purchase trailers direct or
through independent dealers. The retail and distribution segment includes the
sale, leasing and financing of new and used trailers, as well as the sale of
aftermarket parts and service through its retail branch network. In addition,
the retail and distribution segment includes the sale of aftermarket parts
through Wabash National Parts.
10
Reportable segment information is as follows (in thousands):
Retail and Consolidated
Manufacturing Distribution Eliminations Totals
------------- ------------ ------------ ------
THREE MONTHS ENDED JUNE 30, 2003
Net Sales
External customers $ 155,095 $ 75,136 $ -- $ 230,231
Intersegment sales 12,388 239 (12,627) --
--------- --------- --------- ---------
Total Net Sales $ 167,483 $ 75,375 $ (12,627) $ 230,231
========= ========= ========= =========
Income (Loss) from Operations $ 10,592 $ (29,595) $ 276 $ (18,727)
Assets $ 397,772 $ 301,020 $(165,273) $ 533,519
THREE MONTHS ENDED JUNE 30, 2002
Net Sales
External customers $ 121,695 $ 88,556 $ -- $ 210,251
Intersegment sales 9,153 708 (9,861) --
--------- --------- --------- ---------
Total Net Sales $ 130,848 $ 89,264 $ (9,861) $ 210,251
========= ========= ========= =========
Income (Loss) from Operations $ (1,701) $ (13,038) $ 129 $ (14,610)
Assets $ 410,495 $ 391,302 $(165,130) $ 636,667
SIX MONTHS ENDED JUNE 30, 2003
Net Sales
External customers $ 299,621 $ 153,118 $ -- $ 452,739
Intersegment sales 34,519 613 (35,132) --
--------- --------- --------- ---------
Total Net Sales $ 334,140 $ 153,731 $ (35,132) $ 452,739
========= ========= ========= =========
Income (Loss) from Operations $ 18,815 $ (31,257) $ 299 $ (12,143)
Assets $ 397,772 $ 301,020 $(165,273) $ 533,519
SIX MONTHS ENDED JUNE 30, 2002
Net Sales
External customers $ 199,354 $ 172,849 $ -- $ 372,203
Intersegment sales 13,895 2,768 (16,663) --
--------- --------- --------- ---------
Total Net Sales $ 213,249 $ 175,617 $ (16,663) $ 372,203
========= ========= ========= =========
Income (Loss) from Operations $ (18,196) $ (16,786) $ 571 $ (34,411)
Assets $ 410,495 $ 391,302 $(165,130) $ 636,667
Retail and distribution assets decreased from December 31, 2002 primarily due to
the asset impairment discussed in Note 9.
11
Product Information
The following table sets forth the major product category and their percentage
of total net sales (dollars in thousands):
Three Months Ended June 30, Six Months Ended June 30,
------------------------------------------- -------------------------------------------
2003 2002 2003 2002
------------------ ------------------- ------------------- -------------------
$ % $ % $ % $ %
------- ----- ------- ----- ------- ----- ------- -----
New Trailers 172,767 75.0 144,006 68.5 337,439 74.5 240,079 64.5
Used Trailers 17,131 7.4 24,786 11.8 36,759 8.1 49,153 13.2
Parts 25,811 11.2 26,010 12.4 49,942 11.0 50,451 13.6
Other 14,522 6.4 15,449 7.3 28,599 6.4 32,520 8.7
------- ----- ------- ----- ------- ----- ------- -----
Total Net Sales 230,231 100.0 210,251 100.0 452,739 100.0 372,203 100.0
======= ===== ======= ===== ======= ===== ======= =====
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report, including documents incorporated herein by reference, contains
forward-looking statements. Additional written or oral forward-looking
statements may be made by the Company from time to time in filings with the
Securities and Exchange Commission or otherwise. The words "believe," "expect,"
"anticipate," and "project" and similar expressions identify forward-looking
statements, which speak only as of the date the statement is made. Such
forward-looking statements are within the meaning of that term in Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Such statements may include, but are not
limited to, information regarding revenues, income or loss, capital
expenditures, acquisitions, number of retail branch openings, plans for future
operations, financing needs or plans, the impact of inflation and plans relating
to services of the Company, as well as assumptions relating to the foregoing.
Forward-looking statements are inherently subject to risks and uncertainties,
some of which cannot be predicted or quantified. Future events and actual
results could differ materially from those set forth in, contemplated by or
underlying the forward-looking statements. Statements in this report, including
those set forth in "Risk Factors" and in "Management's Discussion and Analysis
of Financial Condition and Results of Operations," describe factors, among
others, that could contribute to or cause such differences.
Although we believe that our expectations that are expressed in these
forward-looking statements are reasonable, we cannot promise that our
expectations will turn out to be correct. Our actual results could be materially
different from and worse than our expectations. Important risks and factors that
could cause our actual results to be materially different from our expectations
include the factors that are disclosed elsewhere herein, in Item 5 of Part II
hereof and in the Company's Form 10-K as filed with the Securities and Exchange
Commission on April 15, 2003.
12
RESULTS OF OPERATIONS
The following table sets forth certain operating data as a percentage of net
sales for the periods indicated:
Percentage of Net Sales
----------------------------------------------
Three Months Six Months
Ended June 30, Ended June 30,
------------------- --------------------
2003 2002 2003 2002
---- ---- ---- ----
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales 89.7 97.0 89.8 98.3
Loss on asset impairment 12.4 -- 6.3 --
----- ----- ----- -----
Gross profit (loss) (2.1) 3.0 3.9 1.7
General and administrative expense 3.4 7.0 4.1 7.8
Selling expense 2.6 2.9 2.5 3.1
----- ----- ----- -----
Loss from operations (8.1) (6.9) (2.7) (9.2)
Interest expense 4.5 3.7 4.0 3.6
Trade receivables facility costs 0.2 0.9 0.1 1.0
Foreign exchange gains and losses, net (1.2) (1.0) (1.2) (0.5)
Other, net 0.2 (0.2) 0.1 (0.4)
----- ----- ----- -----
Loss before income taxes (11.8) (10.3) (5.7) (12.9)
Income tax benefit -- -- -- (3.2)
----- ----- ----- -----
Net loss (11.8)% (10.3)% (5.7)% (9.7)%
===== ===== ===== =====
THREE MONTHS ENDED JUNE 30, 2003
NET SALES
Net sales improved 9% from the second quarter of 2002, which was the first
quarter in which industry sales improved since the downturn that began in 2000.
Slow but steady progress has been noted since the first quarter of last year and
on a sequential basis, net sales are up approximately 3% from the first quarter
of 2003. By business segment, net external sales and related units sold were as
follows (dollars in millions):
Three Months Ended June 30,
-----------------------------
2003 2002 % Change
---- ---- --------
Sales by segment:
Manufacturing $155.1 $121.7 27%
Retail and Distribution 75.1 88.6 (15)
------ ------
Total $230.2 $210.3 9%
====== ======
New trailer units:
Manufacturing 9,200 8,200 12%
Retail and Distribution 1,000 900 11
------ ------
Total 10,200 9,100 12%
====== ======
Used trailer units 3,300 5,100 (35)%
====== ======
13
The manufacturing segment's sales improvement was driven by demand for new
trailers and an improved product mix. The second quarter of 2002 included
approximately 2,200 units of lower priced containers compared to approximately
200 units in 2003.
The decrease in the retail and distribution segment's sales resulted primarily
from the closing of seven underperforming or non-strategic locations during
2002. On an equivalent store basis, new trailer sales saw an increase from
units, offset by product mix compared to 2002. Overall, sales of used trailers
declined due to the lower inventory levels and trade-in volumes as the Company
completed its wholesale liquidation initiative during the first half of 2002.
Leasing revenues declined as a result of the August 2002 bankruptcy of a large
customer and the Company's decision not to reinvest in this business.
GROSS PROFIT (LOSS)
Gross profit for the second quarter of 2003 included a $28.5 million asset
impairment charge taken on certain of its rental and leasing and aftermarket
parts assets. Excluding the impact of this charge, gross profit as a percent of
sales was 10.3%. As discussed below, both of the Company's segments contributed
as follows (in millions):
Three Months Ended June 30,
-----------------------------
2003 2002 $ Change
---- ---- --------
Gross Profit (Loss) by segment:
Manufacturing $17.7 $ 7.3 $10.4
Retail and Distribution (22.8) (1.2) (21.6)
Eliminations 0.3 0.1 0.2
----- ----- -----
Total Gross Profit (Loss) $(4.8) $ 6.2 $(11.0)
===== ===== =====
The manufacturing segment's gross profit increased due to higher volumes and
improved product mix, coupled with realizing cost savings in both labor and
materials as our continuous improvement initiatives yielded positive results.
The retail and distribution segment's gross profit for 2003 was negatively
impacted by the $28.5 million asset impairment charge and $0.4 million in used
trailer valuation charges. Additionally, the 2003 gross profit was affected by
reduced sales in the trailer leasing, rental and finance businesses and the
aftermarket parts distribution business. Gross profit for 2002 was negatively
impacted by a $6.0 million loss contingency for a large customer that went into
bankruptcy in August 2002 and $3.9 million in used trailer valuation charges.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses decreased $6.9 million to $7.9 million for
the three months ended June 30, 2003, compared to $14.8 million for the same
period in 2002. The 2003 quarter included $1.4 million in debt refinancing
costs, offset by $1.0 million for the collection of tax receivables. The 2002
quarter included $4.1 million in bad debt expense mainly related to reserves
taken in the finance and leasing businesses, $1.6 million in severance accruals
and a $1.1 million write-down in the value of the Company's airplane that was
sold in December 2002.
14
OTHER INCOME (EXPENSE)
Interest expense totaled $10.4 million for the quarter, an increase of $2.6
million from the prior year period. The increase reflects the accelerated
amortization of deferred debt costs, offset in part by reduced average
borrowings. The accelerated amortization coincides with March 2004 debt
maturities under the April 2003 amended debt and capital lease agreements.
Trade receivables facility costs declined as the 2002 quarter included $1.5
million in facility restructuring costs.
Foreign exchange gains and losses, net were gains of $2.7 million for the three
months ended June 30, 2003, compared to gains of $2.2 million for the same
period in 2002. The gains reflect a strengthening of the Canadian dollar
compared to the U.S. dollar.
Other, net for the second quarter of 2003 was a net expense of $0.5 million
compared to a net income of $0.4 million for the same period in 2002. In 2003,
other, net included a $1.3 million charge for the settlement of a legacy
RoadRailer transaction, offset by $0.4 million in miscellaneous income and $0.4
million in gains on the sale of branch properties. In 2002, other, net included
$0.9 million in miscellaneous income and $0.8 million in gains on the sale of
branch properties, offset by $1.3 million in debt restructuring costs.
INCOME TAXES
The Company recorded no income tax benefit for the second quarter of 2003 due to
uncertainties surrounding the realizability of benefits associated with net
operating losses (NOL). Because of uncertainty related to the realizability of
NOLs in excess of those utilized, a full valuation allowance is recorded against
the related deferred tax assets at June 30, 2003.
SIX MONTHS ENDED JUNE 30, 2003
NET SALES
Net sales improved 22% from 2002. The first quarter of 2002 is believed to have
been the low point of the industry downturn that began in 2000. By business
segment, net external sales and related units sold were as follows (dollars in
millions):
Six Months Ended June 30,
----------------------------
2003 2002 % Change
---- ---- --------
Sales by segment:
Manufacturing $299.6 $199.4 50%
Retail and Distribution 153.1 172.8 (11)
------ ------
Total $452.7 $372.2 22%
====== ======
New trailer units:
Manufacturing 17,700 12,700 39%
Retail and Distribution 2,100 1,900 11
------ ------
Total 19,800 14,600 36%
====== ======
Used trailer units 6,800 10,200 (33)%
====== ======
15
The manufacturing segment's sales improvement was driven by demand for new
trailers and improved product mix. The 2002 sales included approximately 4,100
units of lower revenue dollar containers compared to approximately 200 units in
2003.
The decrease in the retail and distribution segment's sales results primarily
from the closing of seven underperforming or non-strategic locations during
2002. On an equivalent store basis, new trailer sales were up 12% compared to
2002, primarily driven by increased units sold. Sales of used trailers declined
due to lower inventory levels and trade-in volumes as the Company completed its
wholesale liquidation initiative during the first half of 2002. Leasing revenues
declined as a result of the August 2002 bankruptcy of a large customer and the
Company's decision not to reinvest in this business.
GROSS PROFIT (LOSS)
Gross profit as a percent of sales was 10.2% for the first half of 2003 before
the $28.5 million asset impairment charge, compared to 1.7% for the same period
in 2002. The asset impairment charge was taken on certain of its rental and
leasing and aftermarket parts assets. As discussed below, both of the Company's
segments contributed as follows (in millions):
Six Months Ended June 30,
----------------------------------
2003 2002 $ Change
Gross Profit (Loss) by segment:
Manufacturing $ 33.9 $ (0.1) $ 34.0
Retail and Distribution (16.7) 5.8 (22.5)
Eliminations 0.3 0.6 (0.3)
--------- --------- -------
Total Gross Profit $ 17.5 $ 6.3 $ 11.2
========= ========= =======
The manufacturing segment's gross profit increased due to higher volumes and
improved product mix, coupled with realizing cost savings driven by our
continuous improvement initiatives.
The retail and distribution segment's gross profit for 2003 was negatively
impacted by the $28.5 million asset impairment charge and $2.0 million in used
trailer valuation charges. Additionally, the 2003 gross profit was affected by
reduced sales in the trailer leasing, rental and finance businesses and the
aftermarket parts distribution business. Gross profit for 2002 was negatively
impacted by a $6.0 million loss contingency for a large customer that went into
bankruptcy in August 2002 and $3.9 million in used trailer valuation charges.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses decreased $10.5 million to $18.4 million for
2003, compared to $28.9 million for the same period in 2002. The 2003 expense
included $3.1 million in refinancing costs, offset by $1.0 million for the
collection of tax receivables. The 2002 expense included $7.1 million in bad
debt expense mainly related to reserves taken in the finance and leasing
businesses, $1.6 million in severance accruals, and a $1.1 million write-down in
the value of the Company's airplane that was sold in December 2002.
16
OTHER INCOME (EXPENSE)
Interest expense totaled $18.3 million for 2003, an increase of $4.8 million
from the prior year period. The increase reflects the accelerated amortization
of deferred debt costs to coincide with amended debt and capital lease
agreements and higher interest rates resulting from the 2002 and 2003 debt
restructurings, offset in part by reduced average borrowings.
Trade receivables facility costs declined as 2002 included $3.0 million in
facility restructuring costs.
Foreign exchange gains and losses, net were gains of $5.6 million for 2003,
compared to gains of $2.0 million for the same period in 2002. The gains reflect
a strengthening of the Canadian dollar compared to the U.S. dollar.
Other, net for 2003 was a net expense of $0.4 million compared to a net income
of $1.4 million for the same period in 2002. The 2003 period included a $1.3
million charge for the settlement of a legacy RoadRailer transaction, offset by
$0.5 million in miscellaneous income and $0.4 million in gains on the sale of
branch properties. The 2002 period included $1.9 million in miscellaneous income
and $0.8 million in gains on the sale of branch properties, offset by $1.3
million in debt restructuring costs.
INCOME TAXES
The Company recorded no income tax benefit in 2003 due to uncertainties
surrounding the realizability of benefits associated with NOLs. The 2002 benefit
recorded represents an additional realizable Federal NOL carry-back claim filed
and received under the provisions of the Job Creation and Worker Assistance Act
of 2002, which revised the permitted carry-back period for NOLs generated during
2001 from two years to five years. Because of uncertainty related to the
realizability of NOLs in excess of those utilized, a full valuation allowance is
recorded against the related deferred tax assets at June 30, 2003.
LIQUIDITY AND CAPITAL RESOURCES
CASH FLOW
Operating activities consumed $25.0 million in cash during 2003 compared to
providing $58.6 million during 2002. Operating activities for 2003 saw
improvements in net loss adjusted for non-cash items offset by increased levels
of accounts receivable resulting from higher sales. The 2002 period benefited
from reduced new and used trailer inventories, the collection of tax refunds and
accounts payable timing, offset by higher levels of receivables as sales
increased.
Investing activities provided $7.5 million in cash during 2003 as the Company
did not reinvest in its financing and leasing businesses.
Net cash used in financing activities of $11.6 million during 2003 was primarily
due to scheduled debt and capital lease payments of $48.6 million, offset by net
borrowings under the Company's trade receivable facility of $22.3 million and
revolving credit facilities of $15.5 million to support operations.
SOURCES AND USES OF CAPITAL
As of June 30, 2003, the Company's liquidity position, defined as cash on hand
and available borrowing capacity under existing credit agreements, amounted to
approximately $50 million compared to approximately $78 million as of December
31, 2002. Debt and lease obligations, both on and off the balance sheet,
amounted to approximately $355 million compared to $367 million as of December
31,
17
2002. The majority of these debt and lease obligations are due and payable in
the first quarter of 2004. Based upon the Company's projections, it is unlikely
that the Company will be able to repay these obligations from operations.
Debt Amendment
In April 2003, the Company completed the amendment of its revolving line of
credit, senior notes, trade receivables facility and lease facility. The
agreements amended debt covenants with its lenders and cured a technical
violation of a prior covenant. Among other provisions, the amendments:
- Limit capital expenditures to $4.0 million within a fiscal year;
- Specify minimum levels of EBITDA and shareholders' equity and a
maximum debt to assets ratio; and
- Require that the Company have a commitment to refinance, amend or
restructure its debt and capital lease obligations prior to January
31, 2004.
Additionally, the amendments contain a subjective acceleration clause related to
material adverse changes. As of June 30, 2003, the Company's performance against
the covenants was as follows (dollars in millions):
Actual
Required Attained
-------- --------
Minimum EBITDA $ 5.0 $ 36.3
Minimum stockholders' equity $ 35.0 $ 97.5
Maximum debt to assets ratio 0.95 0.75
Annual limitations on capital expenditures $ 4.0 $ 3.5
Under the loan agreements: EBITDA is defined as income (loss) from operations
before depreciation and amortization and eligible charges. Stockholders' equity
is defined as Total Stockholders' Equity plus eligible charges. Debt to asset
ratio is defined as the ratio of outstanding amounts under the Bank Term Loan,
excluding letters of credit, Bank Line of Credit and Senior Notes agreements to
the sum of cash and cash equivalents, net inventory, prepaid expenses and other,
and property, plant and equipment.
In summary, the Company's ongoing liquidity and its ability to continue as a
going concern depends on its ability to maintain positive operating results,
continue to borrow under its bank line of credit and trade receivables facility,
manage cash resources, meet the financial covenants under its new debt
agreements and obtain the required commitment to refinance, amend or restructure
its debt and capital lease obligations prior to January 31, 2004. In the event
the Company is unsuccessful in meeting its debt service obligations or if
expectations regarding the management and generation of cash resources are not
met, the Company would need to implement severe cost reductions, reduce capital
expenditures, sell additional assets, restructure all or a portion of its
existing debt and/or obtain additional financing.
The goals for 2003 are to reduce debt by $100 million through a combination of
cash flows from operations, divestitures and working capital improvements and to
refinance the remaining obligations.
Asset Divestitures
On July 22, 2003, the Company signed a definitive agreement to sell certain of
the assets, at approximately book value, of its leasing and rental and
aftermarket parts businesses for $55 million in cash due at closing. The
transaction is expected to close in the third quarter of 2003 and is subject to
18
buyer financing. Net proceeds from the sale will be used to repay a portion of
its outstanding indebtedness.
The Company continues to pursue opportunities to divest other non-core assets in
order to further reduce indebtedness.
Refinancing
On July 15, 2003, the Company announced the selection of Fleet Capital to lead
and fully underwrite a new syndicated bank financing for the Company.
Subsequently, the Company and Fleet Capital reached agreement on a three-year
asset-based arrangement that will include a $175 million revolver and a $47.5
million term loan. The new financing, which is subject to final Wabash board
approval and definitive documentation, will be used to replace existing
indebtedness and is expected to substantially lower the Company's cost of debt.
Closing on the transaction is expected to occur during September 2003.
On August 1, 2003, the Company completed the sale of $125 million of 3.25%
five-year senior unsecured convertible notes convertible into shares of the
Company's stock, subject to market and other conditions. The Company used the
net proceeds to repay a portion of its outstanding indebtedness. The notes have
a conversion price of $19.20 or a rate of 52.0833 shares per $1,000 principal
amount of note. The notes bear interest at 3.25% per annum payable semi-annually
on February 1 and August 1.
Successfully refinancing existing debt through the notes offering and bank
financing will result in charges of approximately $24 million, including
prepayment penalties of approximately $20 million and a non-cash charge of
approximately $4 million for the write-off of previously deferred debt costs,
all of which will be recognized when the financing is completed.
The culmination of these two new financing arrangements, along with finalizing
the sale of certain of the assets of the Company's leasing and rental and
aftermarket parts businesses, will result in the Company repaying and/or
refinancing substantially all of its existing indebtedness as of June 30, 2003.
The Company believes that the new arrangements will provide the Company with the
resources and flexibility to fund its operations, as well as reduce its cost of
capital by more than half.
EBITDA
The Company uses EBITDA and Adjusted EBITDA, income (loss) before income taxes,
interest expense, depreciation and amortization; and specific identified charges
in the case of adjusted EBITDA, as an internal measure of performance, and
believes it is a useful and commonly used measure of financial performance in
addition to income (loss) before income taxes and other profitability measures
of performance under GAAP. EBITDA should not be construed as an alternative to
operating income and income (loss) before taxes as an indicator of the Company's
operation in accordance with GAAP. The Company's definition of EBITDA can differ
from that of other companies.
19
The following table reconciles net loss, the most comparable measure under GAAP,
to EBITDA and Adjusted EBITDA for the periods indicated (in millions).
Three Months Six Months
Ended June 30, Ended June 30,
---------------------- -----------------------
2003 2002 2003 2002
---- ---- ---- ----
EBITDA reconciliation:
Net loss $ (27.3) $ (21.7) $ (25.8) $ (36.3)
Income tax benefit -- -- -- (11.9)
Interest expense 10.4 7.8 18.3 13.5
Depreciation and amortization 6.6 7.6 13.3 15.0
------- ------- ------- -------
EBITDA (10.3) (6.3) 5.8 (19.7)
Loss on asset impairment 28.5 -- 28.5 --
------- ------- ------- -------
Adjusted EBITDA $ 18.2 $ (6.3) $ 34.3 $ (19.7)
======= ======= ======= =======
As noted above, the Company is required to maintain a minimum level of EBITDA to
be in compliance with a covenant contained in its loan agreements. EBITDA for
this purpose is defined as income from operations before depreciation and
amortization and eligible charges. The following table reconciles income from
operations, the most comparable measure under GAAP to EBITDA for the periods
indicated (in millions):
Three Months Six Months
Ended June 30, Ended June 30,
----------------------- -----------------------
2003 2002 2003 2002
---- ---- ---- ----
Loss from operations $ (18.7) $ (14.6) $ (12.1) $ (34.4)
Add (subtract):
Depreciation and amortization 6.6 7.6 13.3 15.0
Eligible charges 29.8 20.2 35.1 28.7
------- ------- ------- -------
EBITDA $ 17.7 $ 13.2 $ 36.3 $ 9.3
======= ======= ======= =======
BRANCH NETWORK REORGANIZATION
In July 2003, the Company began the process of closing ten retail branch
locations and its Lafayette Modification Center. The majority of the branch
closings are for sales only locations throughout the US and Canada. Going
forward, the Company will have 21 full service and four retail only branches.
The Company expects to reduce branch headcount by 20% and realize annualized
cost savings of approximately $5 million. The Company will record a charge in
the third quarter of approximately $2 million in connection with the closings.
The majority of the closures will be completed by the end of the third quarter.
The Company expects to use the proceeds from real estate sales to pay down
indebtedness.
EQUIPMENT OFF BALANCE SHEET AND RELATED CUSTOMER CREDIT RISK
The Company subleased certain highly specialized RoadRailer(R) equipment to
two customers, Amtrak and Grapo Transportation Maritima Mexicana SA (TMM), who
are experiencing financial difficulties. Due to the nature of the equipment,
recovery value is considered to be minimal. As of June 30, 2003, the
20
unamortized lease value related to the Amtrak equipment is approximately $4.5
million; additionally, the Company has approximately $10.0 million and $5.8
million with Amtrak and TMM, respectively, of finance contracts recorded on the
condensed consolidated balance sheet. Both customers' obligations to the Company
are current and as a result no provision for losses has been recorded.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that directly affect the amounts
reported in its consolidated financial statements and accompanying notes.
Management bases its estimates on historical experience and other assumptions
that it believes to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying value of assets and
liabilities that are not readily apparent from other sources. Management
continually evaluates the information used to make such estimates as its
business and economic environment changes and has discussed these estimates with
the Audit Committee of the Board of Directors. The use of estimates is pervasive
throughout the Company's financial statements, but the accounting polices and
estimates management considers most critical are as follows:
a. Revenue Recognition
The Company recognizes revenue from the sale of trailers and aftermarket parts
when the customer has made a fixed commitment to purchase the trailers for a
fixed or determinable sales price, collection is reasonably assured under the
Company's normal billing and credit terms and ownership and all risks of loss
have been transferred to the buyer, which is normally upon shipment or pick up
by the customer.
b. Allowance for Doubtful Accounts
The Company records and maintains a provision for doubtful accounts for
customers based upon a variety of factors including the Company's historical
experience, the length of time the receivable has been outstanding and the
financial condition of the customer. If the circumstances related to specific
customers were to change, the Company's estimates with respect to the
collectibility of the related receivables could be further adjusted.
c. Inventories
Inventories are primarily stated at the lower of cost, determined on the
first-in, first-out (FIFO) method, or market. The cost of manufactured inventory
includes raw material, labor and overhead.
d. Asset Impairment including Long-Lived Assets, Goodwill and Other
Intangible Assets
Long-lived assets are reviewed for impairment in accordance with SFAS No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets, whenever facts
and circumstances indicate that the carrying amount may not be recoverable.
Specifically, this process involves comparing an asset's carrying value to the
estimated undiscounted future cash flows the asset is expected to generate over
its remaining life. If this process were to result in the conclusion that the
carrying value of a long-lived asset would not be recoverable, a write-down of
the asset to fair value would be recorded through a charge to operations. Fair
value is determined based upon discounted cash flows or appraisals, as
appropriate.
Goodwill and other intangible assets are subject to periodic evaluations when
circumstances warrant, or at least once a year, in accordance with SFAS No. 142,
Goodwill and Other Intangible Assets. This evaluation involves the comparing of
the carrying value of the goodwill or intangible assets to its fair
21
value. The fair value is estimated based upon the present value of future cash
flows. In estimating the future cash flows, the Company takes into consideration
the overall and industry economic conditions and trends, market risk of the
Company and historical information. All of the factors involve a high degree of
judgment and complexity and any changes in these factors could affect the
carrying value of the assets in the future.
e. Accrued and Contingent Liabilities
The Company's warranty policy generally provides coverage for components of the
trailers the Company produces or assembles. Typically, the coverage period is
five years. The Company's policy is to accrue the estimated cost of warranty
coverage at the time of the sale.
The Company provides for environmental and legal exposures. The Company's
environmental reserves represent the estimated cost to remediate any known
contamination at any of its current or formerly owned locations. The reserve is
evaluated quarterly to assess the range of potential clean-up cost on a
site-by-site once an environmental issue has been identified. The Company
determines its necessary legal reserves based upon a probability of potential
outcome.
f. Income Taxes
The Company currently has a full valuation allowance equal to its net deferred
tax assets based upon the realizability of those values. The level of the
Company's net operating losses over the past three years, industry economic
conditions and the financial struggles of the Company have all affected the
assessment of the Company's ability to realize the assets in the future. As of
June 30, 2003, the Company has approximately $150 million in NOLs. The Company
believes that its estimates for the valuation allowance reserved against
deferred tax assets are appropriate based on current facts and circumstances.
BACKLOG
The Company's backlog of orders was approximately $226 million and $208 million
at June 30, 2003 and December 31, 2002, respectively. Orders that comprise the
backlog may be subject to changes in quantities, delivery, specifications and
terms. Orders that have been confirmed by the customer in writing and can be
produced and/or shipped during the next 18 months are included in backlog. The
Company expects to fill a majority of its existing backlog of orders within the
next twelve months.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
In addition to the risks inherent in its operations, the Company has 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 the Company's exposure to these risks.
A. COMMODITY PRICE RISKS
The Company is exposed to fluctuation in commodity prices through the purchase
of raw materials that are processed from commodities such as aluminum, steel,
wood and virgin plastic pellets. Given the historical volatility of certain
commodity prices, this exposure can significantly impact product costs. The
Company may manage aluminum price changes by entering into fixed price contracts
with its suppliers upon a customer sales order being finalized. Because the
Company typically does not set prices for its products in advance of its
commodity purchases, it can take into account the cost of the commodity
22
in setting its prices for each order. To the extent that the Company is unable
to offset the increased commodity costs in its product prices, the Company's
results would be materially and adversely affected.
B. INTEREST RATES
As of June 30, 2003, the Company had approximately $144 million of floating rate
debt outstanding under its various financing agreements. A hypothetical 100
basis-point increase in the floating interest rate from the current level would
correspond to approximately a $1.4 million increase in interest expense over a
one-year period. This sensitivity analysis does not account for the change in
the Company's competitive environment indirectly related to the change in
interest rates and the potential managerial action taken in response to these
changes.
C. FOREIGN EXCHANGE RATES
The Company is subject to fluctuations in the Canadian dollar exchange rate and
that impact on intercompany transactions between the Company and its Canadian
subsidiary, as well as U.S. denominated transactions between the Canadian
subsidiaries and unrelated parties. Since acquiring its Canadian subsidiary, the
Company has not undertaken any activities, such as hedging activities, to
mitigate this exposure. A five cent change in the Canadian exchange rate would
result in an approximately $1.3 million impact on results of operations. As of
June 30, 2003, the Company had no foreign currency contracts outstanding. In
July 2003, the Company purchased $3.6 million in Canadian dollar foreign
currency forward contracts covering the second half of 2003 in an effort to
mitigate potential Canadian currency fluctuation impact on working capital
requirements. The contracts will be marked-to-market and not subject to hedging
accounting. The Company does not hold or issue derivative financial instruments
for speculative purposes.
ITEM 4. CONTROLS AND PROCEDURES
The principal executive officer and principal financial officer of the Company
have evaluated the effectiveness of the 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"), as required by paragraph(b) of Rules
13a-15 and 15d-15 under the Exchange Act), and have concluded that as of the end
of the period covered by this report the disclosure controls and procedures were
effective at meeting their objectives.
There was no change in the Company's internal control over financial reporting
identified in connection with the evaluation required by paragraph(d) of Rules
13a-15 and 15d-15 under the Exchange Act during the Company's last fiscal
quarter that materially affected, or is reasonably likely to materially affect,
the Company's internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Concerning material changes in legal proceedings from the items disclosed in the
Company's Annual Report on Form 10-K filed with the Securities and Exchange
Commission, on September 17, 2001 the Company commenced an action against PPG
Industries, Inc. ("PPG") in the United States District Court, Northern District
of Indiana, Hammond Division at Lafayette, Indiana, Civil Action No. 4:01 CV 55.
In the lawsuit, the Company alleged that it sustained substantial damages
stemming from the failure of the PPG electrocoating system (the "E-coat system")
and related products that PPG provided for the Company's Huntsville, Tennessee
plant. The Company alleged that PPG was responsible for defects in
23
the design of the E-coat system and defects in PPG products that have resulted
in malfunctions of the E-coat system and poor quality coatings on numerous
trailers.
PPG filed a Counterclaim seeking damages in excess of approximately $1.35
million based upon certain provisions of the Investment Agreement between it and
the Company. The Company filed a Reply to the Counterclaim denying liability for
the claims asserted. The Company subsequently amended its complaint to include
two additional defendants, U.S. Filter and Wheelabrator Abrasives Inc., who
designed, manufactured, or provided equipment for the E-coat system.
The litigation has concluded. The parties to the litigation resolved the matter
by agreement. The resolution of the lawsuit did not have a material impact on
the Company's financial position, liquidity or future results of operations.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
Not Applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
(a) Not Applicable
(b) The Company is in arrears with respect to payment of dividends on the
following classes of preferred stock as of June 30, 2003:
Series B 6% Cumulative Convertible Exchangeable Preferred Stock -
$1,364,000
Our current debt agreements have restrictive covenants that prohibit us
from paying dividends on our common and preferred stock. Upon nonpayment
of required dividends to holders of our Series B Preferred Stock for six
financial quarters, the number of directors on our Board of Directors will
automatically be increased by two directors. The holders of Series B
Preferred Stock, voting as a single class, would then be entitled to fill
the newly created directorships. The right to vote as a single class to
elect two directors continues until all dividends in default are paid in
full. As a result of dividend restrictions under our debt agreements, we
have not paid any dividends on our Series B Preferred Stock for five
quarters. Accordingly, if we do not resume the payment of dividends in the
third quarter of 2003, the holders of our Series B Preferred Stock will
have the right to elect two directors to serve on our Board of Directors.
We expect that our new credit facilities will permit the payment of
preferred stock dividends in the third quarter.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its annual meeting of security-holders on June 2, 2003, at
which time the following nominees were elected to the Board of Directors:
WITHHOLD AUTHORITY
NOMINEES FOR TO VOTE
-------- --- -------
David C. Burdakin 23,411,301 122,105
William P. Greubel 23,420,221 113,185
John T. Hackett 23,403,380 130,026
Martin C. Jischke 23,406,373 127,033
Ludvik F. Koci 16,570,940 6,962,466
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ITEM 5. OTHER INFORMATION
RISK FACTORS
You should carefully consider the risks described below in addition to
other information contained in this report and our other SEC filings.
Realization of any of the following risks could have a material adverse effect
on our business, financial condition, cash lows and results of operations.
RISKS RELATED TO OUR SUBSTANTIAL INDEBTEDNESS
WE HAVE LIMITED CAPITAL RESOURCES; IF WE DO NOT COMPLETE OUR REFINANCING
PLAN, WE MAY BE UNABLE TO SATISFY OUR DEBT OBLIGATIONS AND MEET OUR OPERATING
REQUIREMENTS.
Our ability to access the capital markets is dependent on perceived
current and future business prospects, as well as our current financial
condition. We have experienced liquidity problems in the past and were in
technical violation of certain of our financial covenants under our debt
agreements on February 28, 2003 for the reporting period ended January 31,
2003. We received a waiver of the violations from our lenders and subsequently
amended certain of our debt agreements in April 2003. These amendments modified
debt maturities and principal payment schedules; increased the cost of funds;
and added financial covenants and a subjective acceleration clause, which
provides for an event of default upon the occurrence of a material adverse
change, as defined in the agreements. The amendments also contained provisions
requiring us to have a commitment letter prior to January 31, 2004 to
refinance, amend or restructure our debt and capital lease obligations in order
to avoid an event of default.
Additionally, $201.3 million of debt and capital lease obligations are
scheduled to be due and payable during the first quarter of 2004. Based upon our
forecasted operating results for 2003, it is unlikely that we will be able to
repay all of the debt and capital lease obligations due in 2004 from operations.
If we are unable to comply with the terms of our amendment debt agreements or
refinance existing obligations, we could be forced to further modify our
operations or we may be unable to continue as a going concern, as our lenders
could foreclose on our assets. The ability to continue as a going concern is
also dependent on our ability to manage our business to meet our lenders'
financial requirements. As a result, we have limited availability and access to
capital to fund future operations and expansions, which cold adversely affect
our continuing operations.
The recent sale of our unsecured 3.25% Convertible Senior Notes due 2008
was part of a plan to strengthen our balance sheet by refinancing our
outstanding debt and capital lease obligations. Additional elements of that plan
include a proposed new bank facility led by Fleet Bank and sale of our leasing
and aftermarket parts businesses. We may not be able to complete our refinancing
plan in the manner we expect, or at all. Our ability to complete the refinancing
plan in such manner or on other acceptable terms is subject to market conditions
and various other factors, many of which are beyond our control.
OUR SUBSTANTIAL INDEBTEDNESS COULD ADVERSELY AFFECT OUR FINANCIAL CONDITION.
We are highly leveraged and have substantial debt in relation to our
shareholders' equity. As of June 30, 2003, we had an aggregate of $337 million
of outstanding indebtedness. Although our recent offering of our unsecured 3.25%
Convertible Senior Notes due 2008 and the proposed debt refinancing are intended
to strengthen our balance sheet, we will continue to be highly leveraged
following the completion of these transactions.
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Our high level of debt could have important consequences to our investors,
including:
o we may not be able to secure additional funds for working capital,
capital expenditures, debt service requirements or general corporate
purposes;
o we will need to use a substantial portion of our cash flow from
operations to pay principal of and interest on our debt, which will
reduce the amount of funds available to us for other purposes;
o we may be more highly leveraged than our competitors, which could put
us at a competitive disadvantage; and
o we may not be able to adjust rapidly to changing market conditions,
which may make us more vulnerable in the event of a downturn in general
economic conditions of our business.
WE WILL REQUIRE A SIGNIFICANT AMOUNT OF CASH TO SERVICE OUR DEBT, AND OUR
ABILITY TO GENERATE CASH DEPENDS ON MANY FACTORS BEYOND OUR CONTROL.
To service our indebtedness, we will need to generate a significant amount
of cash. Our ability to generate cash is subject to general economic,
financial, competitive, regulatory and other factors that are beyond our
control. If the cash flow from our operating activities is insufficient, we may
take actions, such as attempting to restructure or refinance our debt, selling
assets or operations or seeking additional equity capital. Any or all of these
actions may not be sufficient to allow us to service our debt obligations.
Further, we may be unable to take any of these actions on satisfactory terms,
in a timely manner, or at all. The failure to generate sufficient funds to pay
our debts or to successfully undertake any of these actions could, among other
things, have an adverse effect on our financial condition.
RESTRICTIVE COVENANTS IN OUR DEBT INSTRUMENTS COULD LIMIT OUR FINANCIAL AND
OPERATING FLEXIBILITY AND SUBJECT US TO OTHER RISKS.
The agreements governing our indebtedness include certain covenants that
restrict, among other things, our ability to:
o incur additional debt;
o pay dividends on our equity or repurchase our equity;
o make certain investments;
o create certain liens; and
o consolidate, merge or transfer all or substantially all of our assets.
We anticipate that the debt agreements we enter into in connection with
the proposed refinancing will contain similar but less restrictive
prohibitions. Our ability to continue to comply with such agreements may be
affected by events beyond our control, including prevailing economic, financial
and industry conditions. In addition, upon the occurrence of an event of
default under our debt agreements, the lenders could elect to declare all
amounts outstanding under our debt agreements, together with accrued interest,
to be immediately due and payable. We refer you to Note 5 of our Notes to
Condensed Consolidated Financial Statements for a more detailed discussion of
our debt and certain financial ratios we must satisfy under our existing debt
agreements.
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THE INABILITY TO COMPLETE THE SALE OF CERTAIN ASSETS OF OUR AFTERMARKET PARTS
BUSINESS AND RENTAL AND LEASING BUSINESS COULD ADVERSELY AFFECT OUR FINANCIAL
CONDITION.
On July 22, 2003, we announced a definitive agreement to sell certain
assets of our aftermarket parts business and rental and leasing business for
cash proceeds of $55 million at closing, subject to adjustment. We anticipate
that the sale will close in the third quarter of 2003. The closing of the sale
is subject to the satisfaction of various conditions, including the buyer
obtaining financing and other conditions, which are beyond our control. We
cannot assure you that we will be able to complete the sale on the terms
currently contemplated, or at all.
RISKS RELATED TO OUR BUSINESS, STRATEGY AND OPERATIONS
AN ADVERSE CHANGE IN OUR CUSTOMER RELATIONSHIPS OR IN THE FINANCIAL CONDITION
OF OUR CUSTOMERS COULD ADVERSELY AFFECT OUR BUSINESS.
We have corporate partnering relationships with a number of customers where
we supply the requirements of these customers. Our success is dependent, to a
significant extent, upon the continued strength of these relationships and the
growth of our corporate partners. We often are unable to predict the level of
demand for our products from these partners, or the timing of their orders. In
addition, the same economic conditions that adversely affect us also often
adversely our customers. As some of our customers are highly leveraged and have
limited access to capital, their continued existence may be uncertain. One of
our customers located in Mexico is experiencing financial difficulties. Although
this customer is current in its payment obligation to us, the customer owes us
$6 million secured by highly specialized RoadRailer(R) equipment, which due to
the nature of the equipment, has a minimal recovery value. In addition, we have
subleased certain highly specialized RoadRailer(R) equipment to Amtrak, which is
experiencing financial difficulties. Due to the highly specialized nature of
this equipment, the recovery value of the equipment is considered to be minimal.
The unamortized lease value of this arrangement with Amtrak was approximately
$4.5 million as of June 30, 2003. In addition, we have approximately $10.0
million in finance contracts related to Amtrak recorded on our balance sheet.
The loss of significant customer or unexpected delays in product purchases could
adversely affect our business and results of operations.
OUR TECHNOLOGY AND PRODUCTS MAY NOT ACHIEVE MARKET ACCEPTANCE, WHICH COULD
ADVERSELY AFFECT OUR COMPETITIVE POSITION.
We continue to introduce new products such as the DuraPlate(R) HD, and the
Freight-Pro(R) trailer. We cannot assure you that these or other new products
or technologies will achieve sustained market acceptance. In addition, new
technologies or products that our competitors introduce may render our products
obsolete or uncompetitive. We have taken steps to protect our proprietary
rights in our new products. However, the steps we have taken to protect them
may not be sufficient or may not be enforced by a court of law. If we are
unable to protect our proprietary rights, other parties may attempt to copy or
otherwise obtain or use our products or technology. If competitors are able to
use our technology, our ability to compete effectively could be harmed.
WE HAVE A LIMITED NUMBER OF SUPPLIERS OF RAW MATERIALS; AN INCREASE IN THE
PRICE OF RAW MATERIALS OR THE INABILITY TO OBTAIN RAW MATERIALS COULD
ADVERSELY AFFECT OUR RESULTS OF OPERATIONS.
We currently rely on a limited number of suppliers for certain key
components in the manufacturing of truck trailers. The loss of our suppliers or
their inability to meet our price, quality, quantity and delivery requirements
could have a significant impact on our results of operations.
27
DISRUPTION OF OUR MANUFACTURING OPERATIONS OR MANAGEMENT INFORMATION SYSTEMS
WOULD HAVE AN ADVERSE EFFECT ON OUR FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
We manufacture our products at two facilities in Lafayette, Indiana, with
our primary manufacturing facility accounting for approximately 85% of our
manufacturing output. An unexpected disruption in our production at either of
these facilities or in our management information systems for any length of
time would have an adverse effect on our business, financial condition and
results of operations.
THE LOSS OF KEY PERSONNEL COULD ADVERSELY AFFECT OUR RESULTS OF OPERATIONS.
Many of our executive officers are critical to the management and
direction of our business. Our future success depends, in large part, on our
ability to retain these officers and other capable management personnel. The
unexpected loss of the services of any of our key personnel could have an
adverse effect on the operation of our business, as we may be unable to find
suitable management to replace departing executives on a timely basis.
THE INABILITY TO REALIZE ADDITIONAL COSTS SAVINGS COULD WEAKEN OUR
COMPETITIVE POSITION.
If we are unable to continue to successfully implement our program of cost
reduction and continuous improvement, we may not realize additional anticipated
cost savings, which could weaken our competitive position.
WE ARE SUBJECT TO CURRENCY EXCHANGE RATE FLUCTUATIONS, WHICH COULD ADVERSELY
AFFECT OUR FINANCIAL PERFORMANCE.
We are subject to currency exchange rate risk related to sales through our
factory-owned retail distribution centers in Canada. We currently hedge
approximately 70% of our estimated Canadian cash flow. For the six month period
ended June 30, 2003, currency exchange rate fluctuations had a favorable impact
of $5.6 million on our results of operations. However, we cannot assure you
that we will continue to experience such benefits or that currency exchange
rate fluctuations will not have an adverse affect on our results of operations.
OUR COMMON STOCK HAS EXPERIENCED, AND MAY CONTINUE TO EXPERIENCE, PRICE
VOLATILITY AND A LOW TRADING VOLUME.
The trading price of our common stock has been and may continue to be
subject to large fluctuations and, therefore, the trading price of the notes
may fluctuate significantly, which may result in losses to investors. Our stock
price may increase or decrease in response to a number of events and factors,
including:
o trends in our industry and the markets in which we operate;
o changes in the market price of the products we sell;
o the introduction of new technologies or products by us or our
competitors;
o changes in expectations as to our future financial performance,
including financial estimates by securities analysts and investors;
o operating results that vary from the expectations of securities
analysts and investors;
o announcements by us or our competitors of significant contracts,
acquisitions, strategic partnerships, joint ventures, financings or
capital commitments;
o changes in laws and regulations; and
o general economic and competitive conditions.
This volatility may adversely affect the prices of our common stock and
our unsecured 3.25% Convertible Senior Notes due 2008 regardless of our
operating performance. In addition, our common stock has experienced low trading
volume in the past.
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RISKS PARTICULAR TO THE INDUSTRIES IN WHICH WE OPERATE
OUR BUSINESS IS HIGHLY CYCLICAL, WHICH COULD ADVERSELY AFFECT OUR SALES AND
RESULTS OF OPERATIONS.
The truck trailer manufacturing industry historically has been and is
expected to continue to be cyclical, as well as affected by overall economic
conditions. New trailer production for the trailer industry as a whole
decreased to 139,658 in 2002 as compared to 140,084 units in 2001, 270,817
units in 2000 and 305,869 units in 1999. According to ACT, the current forecast
for industry shipments in 2003 is approximately 182,000 units. Customers
historically have replaced trailers in cycles that run from five to twelve
years, depending on service and trailer type. Poor economic conditions can
adversely affect demand for new trailers and in the past have led to an overall
aging of trailer fleets beyond this typical replacement cycle. Our business is
likely to continue to be adversely affected unless economic conditions improve.
We cannot assure you that the industry will achieve the forecasted sales for
2003 or that our unit sales in the future will return to the levels experienced
in the late 1990s and 2000.
SIGNIFICANT COMPETITION IN THE INDUSTRIES IN WHICH WE OPERATE MAY RESULT IN
OUR COMPETITORS OFFERING NEW OR BETTER PRODUCTS AND SERVICES OR LOWER PRICES,
WHICH COULD RESULT IN A LOSS OF CUSTOMERS AND A DECREASE IN OUR REVENUES.
The truck trailer manufacturing industry is highly competitive. We compete
with other manufacturers of varying sizes, some of which may have greater
financial resources than we do. Barriers to entry in the standard truck trailer
manufacturing industry are low. As a result, it is possible that additional
competitors could enter the market at any time. In addition, we believe that
the manufacturing over-capacity and high leverage of some of our competitors,
along with the recent bankruptcies and financial stresses that have affected
the industry, have contributed to significant pricing pressures.
If we are unable to compete successfully with other trailer manufacturers,
we could lose customers and our revenues may decline. In addition, competitive
pressures in the industry may affect the market prices of our new and used
equipment, which, in turn, may adversely affect our sales margins and results
of operations.
WE ARE SUBJECT TO EXTENSIVE GOVERNMENTAL LAWS AND REGULATIONS, AND OUR COSTS
RELATED TO COMPLIANCE WITH, OR OUR FAILURE TO COMPLY WITH, EXISTING OR FUTURE
LAWS AND REGULATIONS COULD ADVERSELY AFFECT OUR BUSINESS AND RESULTS OF
OPERATIONS.
The length, height, width, maximum weight capacity and other
specifications of truck trailers are regulated by individual states. The
Federal government also regulates certain safety features incorporated in the
design of truck trailers. Changes or anticipation of changes in these
regulations can have a material impact on our financial results, as our
customers may defer customer purchasing decisions and we may have to reengineer
products. In addition, we are subject to various environmental laws and
regulations
29
dealing with the transportation, storage, presence, use, disposal and handling
of hazardous materials, discharge or stormwater and underground fuel storage
tanks and may be subject to liability associated with operations of prior
owners of acquired property. If we are found to be in violation of applicable
laws or regulations, it could have an adverse effect on our business, financial
condition and results of operations. Our costs of complying with these or any
other current or future environmental regulations may be significant. In
addition, if we fail to comply with existing or future laws and regulations, we
may be subject to governmental or judicial fines or sanctions. See "Legal
Proceedings" for a discussion of the ongoing federal investigation related to
our former facility in Huntsville, Tennessee.
A DECLINE IN THE VALUE OF USED TRAILERS COULD ADVERSELY AFFECT OUR RESULTS OF
OPERATIONS.
General economic and industry conditions, as well as the supply of used
trailers, influences the value of used trailers. As part of our normal business
practices, we maintain used trailer inventories and equipment held for lease,
and have entered into finance contracts secured by used trailers, as well as
residual guarantees and purchase commitments for used trailers. Declines in the
market value for used trailers or the need to dispose of excess inventories has
had, and could in the future have, an adverse effect on our business, financial
condition and results of operations.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits filed as part of the report are listed below:
10.01 Second Amendment to Executive Employment Agreement dated June
2, 2003 between the Company and William P. Greubel
31.01 Certification of Principal Executive Officer
31.02 Certification of Principal Financial Officer
32.01 Written Statement of Chief Executive Officer and Chief
Financial Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)
(b) Reports on Form 8-K:
1. Form 8-K furnished May 14, 2003 reporting under Item 9: Regulation
FD Disclosure.
2. Form 8-K furnished May 19, 2003 reporting under Item 9: Regulation
FD Disclosure.
3. Form 8-K furnished June 2, 2003 reporting under Item 9: Regulation
FD Disclosure.
4. Form 8-K furnished July 23, 2003 reporting under Item 9: Regulation
FD Disclosure.
5. Form 8-K furnished July 24, 2003 reporting under Item 9: Regulation
FD Disclosure.
6. Form 8-K furnished July 24, 2003 reporting under Item 9: Regulation
FD Disclosure.
7. Form 8-K furnished July 24, 2003 reporting under Item 9: Regulation
FD Disclosure.
8. Form 8-K furnished July 29, 2003 reporting under Item 5: Other
Events and Required FD Disclosure and Item 7: Financial Statements,
Pro Forma Financial Information and Exhibits.
9. Form 8-K furnished July 31, 2003 reporting under Item 5: Other
Events and Required FD Disclosure and Item 7: Financial Statements,
Pro Forma Financial Information and Exhibits.
30
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: August 14, 2003 By: /s/ Mark R. Holden
--------------- ------------------
Mark R. Holden
Senior Vice President and
Chief Financial Officer
(Principal Accounting Officer
And Duly Authorized Officer)