CONDITION AND RESULTS OF OPERATIONS

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report of Wabash National Corporation (the "Company", "Wabash" or "we") contains "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"). Forward-looking statements may include the words "may," "will," "estimate," "intend," "continue," "believe," "expect," "plan" or "anticipate" and other similar words. Our "forward-looking statements" include, but are not limited to, statements regarding:

· our business plan;

· the pending acquisition of Walker, the amount of transaction costs associated with the acquisition, our ability and plans to finance the acquisition and our ability to effectively integrate Walker and realize expected synergies and benefits from the Acquisition;

· our expected revenues, income or loss and capital expenditures;

· plans for future operations;

· financing needs, plans and liquidity, including for working capital and capital expenditures;

· our ability to achieve sustained profitability;

· reliance on certain customers and corporate relationships;

· our ability to diversify the product offerings of non-trailer businesses;
· availability and pricing of raw materials;

· availability of capital and financing;

· dependence on industry trends;

· the outcome of any pending litigation;

· export sales and new markets;

· engineering and manufacturing capabilities and capacity;

· acceptance of new technology and products;

· government regulation; and

· assumptions relating to the foregoing.

Although we believe that the expectations expressed in our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and are subject to inherent risks and uncertainties, such as those disclosed in this Quarterly Report. Important risks and factors that could cause our actual results to be materially different from our expectations include the factors that are disclosed in "Item 1A. Risk Factors" in our Form 10-K for the year ending December 31, 2011 and elsewhere herein, including, but not limited to, Item 1A of Part II hereof.Each forward-looking statement contained in this Quarterly Report reflects our management's view only as of the date on which that forward-looking statement was made. We are not obligated to update forward-looking statements or publicly release the result of any revisions to them to reflect events or circumstances after the date of this Quarterly Report or to reflect the occurrence of unanticipated events.

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 Ended
                                                         March 31,
                                                  2012               2011
        Net sales                                    100.0 %            100.0 %
        Cost of sales                                 92.9               92.6
        Gross profit                                   7.1                7.4

        General and administrative expenses            3.3                4.3
        Selling expenses                               1.3                1.3
        Acquisition expenses                           0.5                  -
        Income from operations                         2.0                1.8

        Interest expense                              (0.3 )             (0.4 )
        Other, net                                       -                  -
        Income before income taxes                     1.7                1.4

        Income tax benefit                             0.1                  -
        Net income                                     1.8 %              1.4 %

For the three month period ended March 31, 2012, we recorded net sales of $277.7 million, compared to $222.0 million in the prior year period. Net sales increased in the current year period as new trailer volumes increased by approximately 1,400 trailers, or 15.7%, and sales of our Wabash Composite and Energy and Environmental Solutions product offerings increased in the current year period by approximately $9.3 million, or 100.2%, compared to the prior year period. Gross profit margin was 7.1% in the first quarter of 2012 compared to 7.4% in the prior year period. We continue to be encouraged by the strengthening of the overall trailer market throughout the first three months of 2012 and our expectation is that overall shipment and production levels will continue to be strong as we progress further into 2012. In addition, we continue to gain positive momentum in our efforts to diversify our business through our Diversified Products segment and expect to increase our market penetration and overall acceptance of our product offerings.

Though demand levels have improved as compared to the prior year period and the pricing environment in the current year period for new trailer orders has become more favorable, our current results are being unfavorably impacted by the shipment of trailer orders that were priced at fixed levels during an environment of soft demand and prior to increases in component and raw material commodities such as steel, aluminum, plastic and tires. Selling, general and administrative expenses slightly increased in the first quarter of 2012 as compared to the same period in 2011 due primarily to higher employee compensation costs resulting from the reinstatement of compensation levels that were reduced in prior years in response to the decreased market demand. However, as a percentage of net sales, selling, general and administrative expenses decreased to 4.6% as compared to 5.6% in the prior year period as we continue to leverage the improvements made to our overhead structure and benefit from the higher demand levels.

Our management team continues to be focused on sizing our operations to match the current demand environment, maintaining our cost savings initiatives, strengthening our capital structure, developing innovative products, positioning the Company to optimize profits as the industry continues to improve, selecting product introductions that meet the needs of our customers and diversifying our product offering through growth in non-trailer products. As a recognized industry leader, we continue to focus on product innovation, lean manufacturing, strategic sourcing and workforce optimization in order to strengthen our industry position and improve operating results.

Three Months Ended March 31, 2012



Net Sales



Net sales in the first quarter of 2012 increased $55.7 million, or 25.1%,
compared to the first quarter of 2011. By business segment, net external sales
and related units sold were as follows (dollars in millions):



                                              Three Months Ended March 31,
                                           2012            2011        % Change
          Sales by Segment
          Commercial Trailer Products   $     233.6       $ 185.7           25.8
          Diversified Products                 19.0           9.6           97.9
          Retail                               25.1          26.7           (6.0 )
          Total                         $     277.7       $ 222.0           25.1

          New Trailers                             (units)
          Commercial Trailer Products        10,000         8,300           20.5
          Retail                                300           600          (50.0 )
          Total                              10,300         8,900           15.7

          Used Trailers                            (units)
          Commercial Trailer Products           600           400           50.0
          Retail                                400           300           33.3
          Total                               1,000           700           42.9

Commercial Trailer Product segment sales were $233.6 million for the first quarter of 2012, up $47.9 million, or 25.8%, compared to the first quarter of 2011. The increase in sales is due primarily to a 20.5% increase in new trailer shipments as approximately 10,000 trailers shipped in the first quarter of 2012 compared to 8,300 trailers shipped in the prior year period as a result of the continued strengthening in market demand. Additionally, average selling prices increased by 4.7% in the first quarter of 2012 compared to the prior year period due to increased pricing necessary to offset higher raw material costs as well as customer and product mix. Used trailer sales increased $1.8 million, or 79.3%, compared to the previous year period as a result of a 50.0% increase in shipments as well as an increase of 1.7% in average selling prices resulting from favorable mix.

Diversified Products segment sales, net of intersegment sales, were $19.0 million for the first quarter of 2012, up $9.4 million, or 97.9%, compared to the same period in 2011. The increase in sales is primarily due to increased demand across all our Wabash Composite and Energy and Environmental Solutions product offerings and new business opportunities identified during the past year as we continue to gain positive momentum in our efforts to diversify our business and increase our market penetration and overall acceptance of our product offerings.

Retail segment sales were $25.1 million in the first quarter of 2012, down $1.6 million, or 6.0%, compared to the prior year period. New trailer sales decreased $3.7 million, or 27.1%, due to an approximate 300 unit decrease in shipments as compared to the prior year period due to timing. Used trailer sales increased $0.8 million, or 29.9%, primarily due to a 33.3% increase in shipments compared to the prior year period due to increased market demand. Parts and service sales were up $1.3 million, or 12.5%, due to increased market demand.

Cost of Sales

Cost of sales for the first quarter of 2012 was $258.0 million, an increase of $52.5 million, or 25.5%, compared to the first quarter of 2011. As a percentage of net sales, cost of sales was 92.9% in the first quarter of 2012 compared to 92.6% in the first quarter of 2011.

Commercial Trailer Product segment cost of sales, as detailed in the following table, was $221.9 million for the first quarter of 2012, an increase of $47.0 million, or 26.9%, compared to the first quarter of 2011. As a percentage of net sales, cost of sales was 95.0% for the current quarter compared to 94.2% in the prior year period.

                                                   Three Months Ended March 31,
   Commercial Trailer Products Segment            2012                       2011
                                                       (dollars in millions)
                                                      % of Net                   % of Net
                                                       Sales                      Sales
   Material Costs                        $ 176.2           75.4 %   $ 138.4           74.5 %
   Other Manufacturing Costs                45.7           19.6 %      36.5           19.7 %
                                         $ 221.9           95.0 %   $ 174.9           94.2 %

Cost of sales is composed of material costs, a variable expense, and other manufacturing costs, comprised of both fixed and variable expenses, including direct and indirect labor, outbound freight, and overhead expenses. Material costs were 75.4% of net sales in the first quarter of 2012 compared to 74.5% for the same period in 2011. The 0.9% increase results from increases in component costs as well as higher raw material and commodity costs, primarily related to tires and steel as well as lumber, plastic and aluminum which we were unable to fully pass along to our customers. Other manufacturing costs increased $9.2 million in the current year period as compared to the prior year period primarily the result of the additional costs related to increases in new trailer production volumes as compared to the prior year. As a percentage of sales, other manufacturing costs decreased slightly from the prior year period.

Diversified Products segment cost of sales was $12.5 million in the first quarter of 2012, an increase of $6.4 million, or 105.6%, compared to the same 2011 period. As a percentage of net sales, cost of sales was 66.0% in the first quarter of 2012 compared to 63.5% in the first quarter of 2011. The 2.5% increase as a percentage of net sales was the result of mix across most of our Wabash Composite and Energy and Environmental Solutions product offerings, including frac tanks, truck bodies and DuraPlate AeroSkirts® as we continue to focus our efforts on diversifying our business model.

Retail segment cost of sales was $22.6 million in the first quarter of 2012, a decrease of $1.8 million, or 7.4%, compared to the same 2011 period. As a percentage of net sales, cost of sales was 90.1% in the first quarter of 2012 compared to 91.6% in the first quarter of 2011. This improvement as a percentage of net sales was primarily the result of a higher percentage of sales from the higher margin parts and service product line for the 2012 period as compared to the prior year period.

Gross Profit

Gross profit was $19.7 million in the first quarter of 2012, an improvement of $3.2 million from the prior year period. Gross profit as a percent of sales was 7.1% for the current quarter compared to 7.4% for the same period in 2011. Gross profit by segment was as follows (in millions):

                                           Three Months Ended March 31,
                                            2012                   2011
         Gross Profit by Segment:
         Commercial Trailer Products   $         11.6         $         10.8
         Diversified Products                     6.5                    3.5
         Retail                                   2.5                    2.2
         Corporate and Eliminations              (0.9 )                    -
         Total                         $         19.7         $         16.5

Commercial Trailer Products segment gross profit was $11.6 million for the first quarter of 2012 compared to $10.8 million for the first quarter of 2011. Gross profit as a percentage of sales was 5.0% in the first quarter of 2012 as compared to 5.8% in the 2011 period. The decrease in gross profit as a percentage of net sales was primarily driven by increased material costs, primarily related to steel and tires, which was only partially offset by improved pricing.

Diversified Products segment gross profit was $6.5 million for the first quarter of 2012 compared to $3.5 million in the first quarter of 2011. Gross profit, prior to the elimination of intersegment sales, as a percentage of sales was 20.4% in the first quarter of 2012 compared to 17.5% in the first quarter of 2011. The increase in gross profit and gross profit margin was driven by increased demand across all of our Wabash Composite and Energy and Environmental Solutions product offerings, including frac tanks, DuraPlate AeroSkirts® and portable storage containers as well as improved margins from our wood floor operations due to the increased demand requirements for our dry van trailers during the current period.

Retail segment gross profit was $2.5 million for the first quarter of 2012, an increase of $0.3 million compared to the same period in 2011. Gross profit as a percentage of sales for the first quarter of 2012 was 9.9% compared to 8.4% for the prior year period. The increase in gross profit margin is primarily due to product mix as parts and service sales, which carry a higher margin, increased 12.5% and new trailer sales, which carry a lower margin, decreased 27.1% as compared to the prior year period.

General and Administrative Expenses

General and administrative expenses of $9.1 million for the first quarter of 2012 decreased $0.4 million, or 4.3%, from the prior year period primarily as a result of a $0.6 million reduction in professional services due to reduced legal defense costs in the current period as compared to the prior year period. This decrease was partially offset by an increase of $0.4 million in salaries and other employee related costs due to the full reinstatement of compensation levels that were reduced in previous years to adjust our cost structure to match market demand. As a percentage of sales, general and administrative expenses decreased to 3.3% for the current quarter, as compared to 4.3% for the first quarter of 2011, as we continue to leverage the improvements made to our overhead structure and benefit from the increased demand levels.

Selling Expenses

Selling expenses were $3.5 million in the first quarter of 2012, an increase of $0.5 million, or 17.4%, compared to the prior year period. This increase was the result of a $0.3 million increase in salaries and other employee related costs due to the full reinstatement of compensation levels that were reduced in previous years to adjust our cost structure to match market demand, as well as higher advertising and promotional activities. As a percentage of net sales, selling expenses were 1.3% for the first quarter of 2012 which is consistent with the prior year period.

Acquisition Expenses

Acquisition expenses in the first quarter of 2012 of $1.7 million represents acquisition related costs incurred related to our agreement to purchase Walker Group Holdings LLC ("Walker") from Walker Group Resources LLC ("Seller"), the parent of Walker. Total acquisition related expenses expected to be incurred in conjunction with the Walker Acquisition are expected to be in the range of $12 million to $15 million, inclusive of costs related to the senior secured bridge facility (see "Liquidity and Capital Resources" discussion below).

Income Taxes

We have experienced cumulative operating losses over the most recent three year period. After considering these operating losses and other available evidence, both positive and negative, we have recorded a full valuation allowance against our net deferred tax assets as of March 31, 2012.

Liquidity and Capital Resources

Capital Structure

Our capital structure is comprised of a mix of debt and equity. As of March 31, 2012, our debt to equity ratio was approximately 0.5:1.0. Our long-term objective is to generate operating cash flows sufficient to fund normal working capital requirements, to fund capital expenditures and to be positioned to take advantage of market opportunities. For the remainder of 2012, we expect to fund operations, working capital requirements and capital expenditures through cash flows from operations as well as from available borrowings under our existing or replacement credit facility. Furthermore, in connection with our announcement to acquire Walker (see "Amendment of Existing Credit Agreement and Issuance of Convertible Senior Notes" and "Anticipated Amendment and Restatement of Existing Credit Agreement and New Term Loan" below for additional details), we are currently contemplating the financing arrangements to fund the Acquisition, which include the completed issuance of $150 million in aggregate principal amount of convertible senior notes and the anticipated new $300 million term loan facility. These sources of cash would be used to fund this acquisition, repay a portion of our outstanding borrowings under our existing revolving credit facility and pay all commissions, financing fees and other acquisition related expenses incurred in connection with this transaction.

Debt Agreements and Related Amendments

Existing Credit Agreement

In June 2011, we entered into a credit agreement (the "Existing Credit Agreement") with Wells Fargo Capital Finance, LLC ("WFCF"), as joint lead arranger, joint bookrunner and administrative agent (the "Agent"), and RBS Citizens Business Capital, a division of RBS Citizens, N.A., as joint lead arranger, joint bookrunner and syndication agent, as well as certain other lender participants. The Existing Credit Agreement is guaranteed by certain of our subsidiaries and secured by a first priority security interest on substantially all of our assets. Under the Existing Credit Agreement, we had a $150 million revolving credit facility (the "Revolver") with the option to increase the total commitment to $200 million, subject to certain conditions. The Existing Credit Agreement has a scheduled maturity date of June 28, 2016.

In August 2011, we entered into an amendment to the Existing Credit Agreement (the "First Amendment") with the lenders under our Existing Credit Agreement. The First Amendment was entered into to permit an increase to the total commitment of the Revolver from $150 million to $175 million. Under the Existing Credit Agreement we had the option, subject to certain conditions, to request up to two increases to the $150 million Revolver in minimum increments of $25 million and not to exceed $50 million in the aggregate (any such increase, a "Revolver Increase"). Pursuant to the First Amendment, we requested a Revolver Increase of $25 million. All lenders under the Existing Credit Agreement agreed to participate in the Revolver Increase and the Revolver Increase was effective in August 2011. We continue to have the option, subject to certain conditions, to request one additional Revolver Increase of $25 million.

Availability under the Revolver is based upon monthly (or more frequent under certain circumstances) borrowing base valuations of our inventory, accounts receivable, equipment and real property and reduced by certain reserves in effect from time to time. A portion of the borrowings under the Revolver not in excess of $15 million is available for the issuance of letters of credit. Another portion of the borrowings under the Revolver not in excess of $10 million may be utilized for swingline loans. Outstanding borrowings under the Revolver bear interest at a rate, at our election, equal to (i) LIBOR plus a margin ranging from 2.00% to 2.50% or (ii) the Agent's prime rate plus a margin ranging from 1.00% to 1.50%, in each case depending upon the average daily unused availability under the Revolver. We are required to pay a monthly unused line fee equal to 0.375% times the average daily unused availability along with other customary fees and expenses of the Agent and the lenders.

The Existing Credit Agreement contains customary covenants limiting our ability to, among other things, pay cash dividends, incur debt or liens, redeem or repurchase stock, enter into transactions with affiliates, merge, dissolve, pay off subordinated indebtedness, make investments and dispose of assets. In addition, we are required to maintain a minimum fixed charge coverage ratio of 1.1 to 1.0 as of the end of any period of 12 fiscal months when availability under the Revolver is less than 12.5% of the total revolving commitment.

If availability under the Revolver is less than 15% of the total revolving commitment or if there exists an event of default, amounts in any of our deposit accounts (other than certain excluded accounts) will be transferred daily into a blocked account held by the Agent and applied to reduce the outstanding amounts under the Revolver.

If the covenants under the Existing Credit Agreement are breached, the lenders may, subject to various customary cure rights, require the immediate payment of all amounts outstanding and foreclose on the collateral. Other customary events of default in the Existing Credit Agreement include, without limitation, failure to pay obligations when due, initiation of insolvency proceedings, defaults on certain other indebtedness and the incurrence of certain judgments that are not stayed, satisfied, bonded or discharged within 30 days.

As of March 31, 2012, we were in compliance with all covenants of the Existing Credit Agreement.

Amendment of Existing Credit Agreement and Issuance of Convertible Senior Notes

On March 26, 2012, we entered into a Purchase and Sale Agreement (the "Agreement") with Walker and Seller, as previously described in the Current Report on Form 8-K filed on March 27, 2012, pursuant to which we will purchase Walker for total consideration of $360 million in cash, subject to purchase price adjustments related to the acquired working capital (the "Acquisition").

Walker is a leading manufacturer of liquid-transportation systems and engineered products based in New Lisbon, Wisconsin with over 1,200 employees located in four countries. Walker has a strong existing management team that shares our focus on manufacturing based on innovation, quality and continuous improvement. We believe the Acquisition of Walker, which will become part of our Diversified Products segment, supports our commitment to grow and diversify the business outside of the core trailer products and will be a good strategic fit, meeting our criteria of industry leadership, diversification and financial profile. Walker has a leading market position and strong brand recognition across many of the markets it serves complementing our historical leadership position in dry, refrigerated and platform trailer manufacturing. Walker will also provide us with further diversification in products, end-markets, customers and geographies while also maintaining a focus on core manufacturing capabilities that the combined companies share.

Walker has manufacturing facilities for its liquid-transportation products in New Lisbon, Wisconsin; Fond du Lac, Wisconsin; Kansas City, Missouri; and Queretaro, Mexico with parts and service centers in Houston, Texas; Baton Rouge, Louisiana; Findlay, Ohio; Chicago, Illinois; Mauston, Wisconsin; West Memphis, Arkansas; and Ashland, Kentucky. Manufacturing facilities for Walker's engineered products are located in New Lisbon, Wisconsin; Elroy, Wisconsin; and Huddersfield, United Kingdom with parts and service centers in Tavares, Florida; Dallas, Texas; and Philadelphia, Pennsylvania.

Although there can be no assurances, the Acquisition is expected to be consummated in the second quarter of 2012. We have incurred acquisition related costs of approximately $1.7 million during the current quarter which were recorded as Acquisition Expenses in the Condensed Consolidated Statement of Operations. We plan to finance the Acquisition using a combination of convertible debt and long-term bank debt as described below. Consummation of the Acquisition is subject to various conditions, including, among others, the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. We received notice that early termination of the waiting period occurred on April 23, 2012. The Agreement also contains specified termination rights for the parties, including, among others, if the Acquisition fails to close on or before June 25, 2012. The Agreement may be terminated by Seller if all the conditions to closing the Acquisition have been satisfied, we fail to consummate the transaction, and Seller was ready, willing and able to consummate the Acquisition (a "Wabash Termination Event"). The Agreement further provides that we are required to pay a fee equal to $20 million in the event that the Agreement is terminated due to
(i) a breach by us of our representations, warranties or covenants, or (ii) the occurrence of a Wabash Termination Event.

In connection with entering into the Agreement with Walker and Seller (as described above), we entered into a commitment letter (the "Commitment Letter") with Morgan Stanley Senior Funding, Inc. ("Morgan Stanley"), Wells Fargo Securities, LLC ("WFS"), Wells Fargo Bank, National Association ("Wells Fargo") . . .