Wabash National Corporation (WNC) Q2 2014 Earnings Report, Transcript and Summary

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

Thank you, Vivian, and good morning. Welcome to the Wabash National Corporation 2014 Second Quarter Earnings Call. This is Dick Giromini, President and Chief Executive Officer. Joining me today is Jeff Taylor, Senior Vice President and Chief Financial Officer. Following this introduction, I will provide highlights for the second quarter, followed by a look at the current operating environment and our outlook for the remainder of the year, after which Jeff will provide an overview of our financial results. At the conclusion of our prepared remarks, we’ll open the call for questions from the listening audience. Before we begin, I would like to cover two items. First, as with all of these types of presentations, this morning’s call contains certain forward-looking information, including statements about the company’s prospects, the industry outlook, backlog information, financial condition and other matters. As you know, actual results could differ materially from those projected in forward-looking statements. These statements should be viewed in light of the cautionary statements and risk factors set forth from time-to-time in the company’s filings with the Securities and Exchange Commission. Second, please note that this call is being recorded. I’ll begin by saying that we’re pleased with the Company’s overall performance this quarter and the ongoing financial and operating improvements, we’re experiencing in most areas of the business, particularly the Commercial Trailer Products segment. Our solid second quarter results are further evidence of our ability to consistently deliver on our commitment to continually improve our overall performance and to grow the business through broader array of products, end markets and geographies, but, we look forward to even better days ahead as the actions that we have put in place to address some previously reported temporary headwinds related to lumber pricing are now taking hold and will benefit us as we…

Thanks Dick and good morning. In addition to the press release, we filed the 10-Q after the market closed yesterday. So I plan to hit the highlights. With that let’s get started. As Dick mentioned, consolidated revenue for the quarter is $486 million, an increase of $73 million or 18 % compared to the second quarter of last year and a the best ever quarterly revenue for the company. Total new trailer shipments were 14950 units, 450 units above the top end of our guidance range for the quarter and 3550 units higher year-over-year. Sequentially consolidated revenue increased $128 million or approximately 36%, primarily due to an increase in new trailer shipments of 5000 units driven by our core trailer business. Commercial trailer products’ net sales were $336 million, which represents a $70 million or 26% increase on a year-over-year basis due to higher new trailer shipments of approximately 3200 units. Year-over-year average new trailer selling prices decreased approximately $600 per unit to $23,200 primarily due to two factors, first we are experiencing higher incidence of customer supplied components in particular to tires this year especially with the larger fleets which accounts for approximately two-thirds of the change. Second the customer mix continues to skewed towards the large fleet customers with lower spec and lower price trailer as we discussed in prior quarters. Sequentially, revenue increased $108 million or 48% on new trailer shipments of 13900 units up 50%. Average selling price was flat sequentially as the customer mix remain stable with around 60% direct channel and 40% indirect channel. Diversified products net sales for flat year-over-year at $135 million. Walker Group revenue was lower primarily due to the timing of shipment of non-trailer truck mounted equipment and customer acceptance for other engineered products. New trailer shipments increased by approximately…

Thank you (Operator Instruction) and our first question comes form Brad Delco. Brad, please go ahead. A. Brad Delco – Stephens Inc.: Good morning, Dick, Good morning Jeff.

Good morning Brad.

Good morning. A. Brad Delco – Stephens Inc.: Dick you made some comments about the wood products division and the margin pressure you saw and the color on what steps are being taken to address that. It sounds like we will some corrective actions in the third quarter and hope to fully recover by fourth quarter. With $3 million of I guess year-over-year head wins this quarter, can you give us some more quantification as to what we might see in the third quarter and then maybe fourth quarter in terms of how this phases out or how quickly this phases out?

Yes, it moves over during the third quarter, it get progressively better as we progress through the quarter. So you look at the $3.5 million by the time we get to the fourth quarter that’s behind us, but in the third quarter probably something less than a $1 million of impact as we progress through. Yes I think back to the timeframe in which we put the actions in places and that was about midway through the past quarter and when you look at the backlog that we already had in place. So the actions to get all of the initiatives in place, the recovery actions in place, so we are starting to see the impact, but it slowly builds up as we progress through the quarter. So I would suggest something less than a $1 million of favorable impact relative to the position we are in the second quarter for the third quarter and then full recover in the fourth quarter. A. Brad Delco – Stephens Inc.: Got it. So when we think about sort of your – not in the silly guidance, but the parameters you sort of set for gross margin expectations for diversified products segment. Being in that sort of 21% to 24% range isn’t out of the norm, but maybe we see a little bit of pressure continue in the third quarter, I mean can you be in that range third quarter or is it going to be something closer to what we saw?

Yes, it should improve somewhat, but I will be low-end of the range that we provided in the past and then be more normalized as we get into that fourth quarter as the example I gave earlier about the 22%. If we fully address the two elements the limber costs issue and the start-up costs issue going away it’s a more normalized 22%. So, in that 21% to 24% range that we’ve kind of spelled before. So, yes it’s going to be pressure but on the lower end in the third quarter for certain.

Right, the other facts that will come into play there Brad the seasonality of Wabash Composites is slightly different than the core trailer business and for the past couple of years, their strongest quarter has been Q2 and then they typically pull back a little in Q3. So, that’s the normal seasonal pattern that we see for Wabash Composites as well which could play a role in the third quarter results. A. Brad Delco – Stephens Inc.: Gotcha and then maybe final question Dick in your comments you also said you expect gross margin to improve in the third quarter. Are you specifically calling out gross margin dollars or how do we think about the seasonality of gross profit margin percent from second to third quarter and what could be affecting that?

Yes Brad I think obviously commercial trailer products is two-thirds of the company on topline revenue, so that’s going to be a big driver and the shipment guidance that we gave there, we have a healthily backlog and so given the strong builds, the strong shipment which we've discussed many times in regard to that seasonal pattern, Q3 is typically our strongest quarter there and so that will be a big driving factor and then we expect diversified products to improved sequentially as well as we just discussed in retail to perform also. A. Brad Delco – Stephens Inc.: Got you. So looking specifically though at Commercial Trailer Products and not taking the mix between the segments. If I look back historically you typically improved your gross profit margins in that trailer business by about 20 bips, what could effect that one way or the other, it seems like you guys are running close to 90% utilization, pricing should be a little bit more pronounced and maybe those margins could be better. What could work against you in terms of that normal sequential change?

It should improve second quarter to third quarter. A. Brad Delco – Stephens Inc.: Okay. All right guys. Thanks for the time. I’ll get back in queue.

Thank you Brad.

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

Hi, good morning, guys. First question I guess just looking at the implied shipments into the back half of the year. It looks like right now, you are calling for a little bit of a sequential step down from 3Q to 4Q that would be larger than what we’ve seen over the past few years. And so, is that just a matter of waiting for a little bit more backlog support in those numbers or just looking for a little bit more details on that implied guide?

Yes, Joe I think we've consistently said, we typically would expect Q3 to be slightly stronger than Q4, just as a normal seasonal pattern and our guidance for Q3 is 15000 to 16000, I think if you do the math that you will see that Q4 is slightly below that, but it will depend upon customer pickups during Q3 and Q4. We are predicting a really nice healthy strong second half of the year and I think that’s real important message from the guidance we have given.

Okay and then maybe just a little bit bigger picture. When you talk about a double digit margin in CTP, you think about that kind of volumes you will have in the back half, I mean those are very supportive volume. So for that kind of target I mean is that on types of volumes that we’ll be seeing in the back half and could you just talk about kind of the operational steps that you have planned to then drive toward that double digit margin target?

Yes, obviously the strong market is certainly supporting those efforts, so higher volume obviously brings the potential to get some leverage on it, but the action is that the team has been very focused on being – favoring the margin improvement over volume. So in other words not going after orders just for the second getting orders or trying to get the best of what’s available out there. In this environment you get a lot of large orders from key customers because there are very healthy and they are replacing some very aged equipment. And that’s where our comments earlier about the mix being in that I believe was 64% or 60% to 40% some ratio like that in the large direct versus the indirect segment. So it’s still skewed heavily toward that group I think it’s like 60% to 40%. And the second element of course is that ability to push the pricing through the market and we had worth of backlog at the end of the first quarter, so if you think about what the remaining opportunities for quoting as we completed through the second quarter and now in the third quarter while pricing is continuing to be pushed, the impact is less impactful than what it will be for the 2015 calendar year and which we’re just entering that quoting season. So we continue to push as all new quotes come in, we are trying to take advantage of the stronger demand environment to continue to push pricing and ultimately improve those margin. The other factors that come in, the normal actions that we take under all conditions and that’s continuing to drive operational improvements on the factory floor through our continuous improvement efforts improving the proficiencies of the workforce, the capabilities, running lean events to optimize line velocity and inefficiencies on the factory floor. And then, the initiatives we take in our supply chain side on our supply components and materials pricing initiatives with suppliers as we enter into new agreements from year-to-year. So, all of those factors play into getting to that double-digit margin and hopefully beyond once we get there for a quarter then we get that to be sustainable for full-year and then continue to look at ways to further enhance it through different product offerings, and different end markets that we can get into.

Got it. Thanks very much.

You are welcome. Thank you.

And our next question comes from Alex Potter. Alex, please go ahead. Alexander E. Potter – Piper Jaffray & Co.: Thanks. Hi guys.

Hi, Alex. Alexander E. Potter – Piper Jaffray & Co.: I was wondering if we could touch again on diversified products obviously there is the new products startup costs and there is the wood and all of this, but it sounds like also there was some mix impacts. I notice the ASPs on new trailers came down quiet a bit in that segments and you called mix out as well. I was just wondering if you could flush that out a little bit more what was going on there specifically kind of in Layman's terms and then do you expect that to correct or is that something that’s going to persist.

Yes. Alex the mix that impacted in the diversified products let me start with the Walker Group and I think that’s probably the biggest area of impact there, those liquid tank trailers there is a lot of variation in that space and the average price of liquid tank trailers in a fairly normal range is somewhere between $60,000 and $120,000 for each unit and certainly you know very unique units can be even significantly higher than in that high end. But with that wider range for that the normal product variation and then you are going to see some variation in ASP and we saw that in the second quarter where we had some other issue units that were on the lower end of the range there and that what contributed some to the product mix. In addition you notice that the unit volume was up a 100 units quarter-over-quarter from the prior year and we did have some larger order size that shift and obviously those the bigger orders put some pressure on pricing as well and that also impacted the quarter that’s what’s we’ve been described as customer mix.

How is it proceed going forward, and we look at the average selling price that we have right now is kind of within the normal range so we would expect to see the normal variation continue there, it could go up or it could go down. Alexander E. Potter – Piper Jaffray & Co.: Okay, interesting. Thank you. I was wondering also if we talk about within that liquid tank business, obviously its fracking, holding liquids, holding water into an out of the those oil and gas fields is kind of a secular trend into the expanse that your mix in Walker shifts more to move towards that segment, generally speaking with that be a positive or negative or a neutral for emergence?

I think the – you’re talking about the energy in oil and gas and a couple of years ago, that market was really hard and the margins were pretty inflated. I think based on what we see in the current environment of those margins are within the normal range of what we see in the liquid tank trailer space so... Alexander E. Potter – Piper Jaffray & Co.: Okay, very good. Thanks guys.

You’re welcome. Thank you.

And our next question comes form Steve Dyer. Steve, please go ahead. Steven L. Dyer – Craig-Hallum Capital Group LLC: Good morning, Dick. Good morning, Jeff.

Hi, Steve.

Hello. Steven L. Dyer – Craig-Hallum Capital Group LLC : So, most of might have been answer, so I want to make sure kind of – I’m thinking about the mass correct so it sounds like mix sort of what it has been in terms of CTP versus DPG and it sounds like kind of gross margins in the trailer business kind of remaining where they are, maybe a little bit of improvement as we go here and then a little bit of improvement in Q3 and more in Q4 for DPG margin. So, I mean safe to assume that the gross margin in aggregate improves in Q3?

Yeah, I think your assessment in terms of the individual segments found it pretty accurate from what we talked about. The only factor that comes into play there is the segment mix where DPG not DPG but CTP can grow proportionately to the rest of the company and represent a higher percentage of the total revenue and Dick mentioned that in his comments for this quarter to the extent that you have a little bit of that movement in Q3 than we don’t have to do the math and work that out for segment mix, but I think your analysis of the individual segments mix sounds consistent with what we said. Steven L. Dyer – Craig-Hallum Capital Group LLC : So given that were I guess a month through that quarter and you kind of know what you have in the backlog would you expect the trailer mix that the CTP mix to grow proportionate or grow in excess of the rest in Q3 or do you expect kind of that 64% , 65% of level?

In terms of channel mix, I think the backlog.

Destocking them mix between segments

Mix between the segments, yeah. The driving factor there is going to be the shipment guidance that we gave Steve, so we said 15,000 to 16,000 units in Q3 we did 14,950 in Q2 so it will be up slightly for CTP but once again you just need to do the math. Steven L. Dyer – Craig-Hallum Capital Group LLC : Well, but you didn’t give release but I heard DPG guidance directionally by for any so to specifics for Q3 over Q2. So lets I am trying to get the sense of kind of what’s you see more growth from an ultimately what the mix is in Q3?

Yeah, I think we expect DPG to perform fairly consistent with kind of historical patterns there. Steven L. Dyer – Craig-Hallum Capital Group LLC : Okay thank you.

You are welcome. Thank you.

And our next question comes from John Mims. John, please go ahead. John R. Mims - FBR Capital Markets & Co.: Hey good morning guys, thanks.

Hi, John. John R. Mims – FBR Capital Markets & Co.: And Dick let me there has been a lot of numbers kind of turnaround. So I just want to make sure I understand what you are saying that margins in the progression in third quarter. In the DPG Group, so you said would pressure at the low end of the range if 21% to 24%, but then you typically would see some seasonal softness from Q2 to Q3 so and if what you know now and realize it still somewhat fluid, but is pressured mean you below that typical range or just at the low end. So I am make sure understand what’s you are saying right.

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

Yes John we are not trying to be a elusive or evasive it’s difficult to project even at this point in the quarter what the ultimate shipments are, we recognize revenue we could actually ship the equipment we can do some internal modeling, but at the end of the day it really comes down to what mix of products ends up shipping for the quarter that’s what’s the elusive thing and trying to respond to that question. John R. Mims – FBR Capital Markets & Co.: Okay. Yes that makes sense and that’s what I wanted to clear up because I feel like go into 21% and then realize that’s you get – you could probably get their above fourth quarter but that’s a lot to make up when you are still working through some of that backlog. So just whether sure if I misinterpreted you know that the range come out but that’s helpful. Let me ask on the commercial trailer side given that orders are strong as they have been backlog as where it is. Are you totally full from a build standpoint for the rest of this year or do you have some triage and kind of flexibility as far as what you can do to leverage more pricing from guides in the back half?

There is always some opportunity to leverage capacity and we can do that through over time and that the areas were we probably have the least amount of open available capacity would be in the drive-in segment, orders have been very, very strong in the drive-in segment in the refrigerator there is always some opportunity in the flat-bed business that typically doesn’t have the long lead times, its typically 12 to 15 weeks more typical than what you know when you see about six months we are talking about in the aggregate. So that area of the business continually is quoting and taking orders even for the current model year the current calendar year. So these are some flexibility if an opportunity comes along there is a dedicated contract orders that customer gets it’s a reasonably short lead item that they need and there willing to pay the premium to have us open up some week end slots then we may consider taking advantage of that opportunity so we always have some flexibility. John R. Mims – FBR Capital Markets & Co.: Okay that makes sense. So I mean assuming and where you comment if I'm right or not, but given the industry the order trends and how tight most people are that you are getting more pricing power even in your standard dry vans now than you were earlier in this year and certainly at this point last year. So if everybody is kind of enjoying a little bit of that tailwind, when is it reasonable, it is moreover of a 2015 or maybe a little bit earlier. That it’s reasonable to see a pick-up in ASPs, again just on to your standard dry products.

Yes, let me touch on, because that brings up a couple of points I want to reinforce. The ASP and I know that we threw a lot of numbers at you earlier on what happened with ASPs in the commercial trailer products business. A good portion of that was I think $400 of that deterioration was strictly tied to the significant increase and customers opting to supply tires. So the tire value is not included in the price of those trailers, when they get shipped and recognized. So, that’s a little bit unique and when we look at year-over-year basis this 2014 customer supplied tires were at the highest level ever, between 3.5 times to 4 times on a percentage of units that customers elected to do that. So, that moves to needle on that. So, that one is unpredictable as to what they would elected to do as we quote for the 2015 calendar year, whether they elect to supply tires on their own or have us procure tires in the marketplace. So, it’s not a deterioration in price and I know some folks have looked at it and thinking that price deteriorated quite opposite, price was improving during the same time, but it was in a way overwhelmed in the numbers by the customer supply tire side of it, but as we get into the 2015 quoting season that’s when some nice gains can be made in pricing. If we go back to the normal quote and order patterns for the CTP business in particular, recall that during the fall and early spring or actually early winter season of the year, so the October November, December, January, February months tend to be very, very strong months for large customer, larger order intake. And by the time you get…

Yes, the vast, vast majority of orders that have been accepted are for 2014 builds just to clarifying, so its not that we are taking small orders for 2015 at this point, but the same notion does hold true in what you are saying is that the position we are in today does provide and the strong demand environment and the expectations for continued strong demand for next year does put us in a much better position than we were a year-ago at this time when it comes to pricing those very large customer, large order quotes. John R. Mims – FBR Capital Markets & Co.: And then just a quick comment on July order trends versus normal seasonality.

The quote activity has continued to be favorable relative to prior periods when you look at on a seasonally adjusted basis, and you look historically the trends that we've seen over this quoting year had been favorable to what we had seen in previous years. So that has given us more and more confidence in our projections, in our ability to be a little bit more bold about the projections. We wanted to be sure the last quarter before we went and changed anything, we were out ahead of A.C.T as you recall at the beginning of the year, they were at the 1.5% to 2% year-over-year projection, we were at 5% to 7%, some folks thought we were being too aggressive, but we were confident based on conversations with our customers and what we were receiving from early quote activity. And what we did know is would that be able to continue with the strength as we progress throughout the second quarter and as we now know it has, even surprised us with the amount of strength that’s continued and of course of both A.C.T and FTR have caught and had passed us but now with the backlog fill that we’ve been able to gain, we feel confident in going out with the much stronger numbers. John R. Mims – FBR Capital Markets & Co.: How much that do you think is more still a replacement, driven versus real kind of fleets, I mean trailer fleet growth the drop and hook and all of those sort of secular trends?

Yes, its always hard to sort out, customer don’t tell us they want a 1000 trailers they don’t say 700 of them for replacement and 300 are for additional drop and hook. We don’t know how they actually use the fleet. My belief is that the was majority are driven by replacement, you are always going to have some growth at some customer trying to gain some new lanes and new customers that they are going to have some needs, but the vast majority is really catch-up replacement as a result of the very deep and protracted down term we went through where very few people were spending any money on replacing equipment and now the fleet is excessively aged and you have got this very, very tough regulatory environment and with the CSA regs and [indiscernible] that putting even more pressure on fleets. So the vast majority is replacement. John R. Mims – FBR Capital Markets & Co.: Great. Well yeah it sounds like it can continue for a while. Thank you so much for all the time.

And our last question comes from Jeff Kauffman. Jeff, please go ahead. Jeffrey A. Kauffman – Buckingham Research Group: Thanks so much. Hey guys.

Hey Jeff.

Hi, Jeff. Jeffrey A. Kauffman – Buckingham Research Group: Question of a quality type, there is a lot of cash on the balance sheet which is great, I know you are paying down debt I know you haven’t made any acquisitions yet this year, but we should getting a more positive working capital profile in the second half of the year which means more cash. What are your thoughts on managing that cash right now?

Thanks Jeff, I was wondering if we were going to get through the call without having the capital structure question, but I think taking that. Yes, I think the answer to that is its stay the course; we've said I think for the last four to six quarters that we’re focused on managing our debt. And, as you mentioned we did make an additional $20 million voluntary prepayment against the term loan in the second quarter. So, that’s the primary focus managing debt and evaluation strategic opportunities to grow the business. I think to your point we do typically recover working capital in the second half of the year. And in my comments I did mention that we could see a slight increase in working capital in the third quarter, but in general the second quarter is very favorable for us from a recovery perspective in generating good cash flow. So.

Yes Jeff, I’ll just add that, we made a commitment one to address the debt side and we’ve gotten to one of our first thresholds and that was getting under the two times on a net basis ratio that we want it. We’ve also made the commitment to continue to look for ways to grow and diversify this business both with our organic efforts which due take investment from time-to-time, but also strategically through acquisition and we are now in a much better position to be able to look at those types of opportunities with a lot more confidence and maybe we were a year ago, because us wanting to put the heavy priority on the debt reduction and getting our ratio more comfortable level. So we gotten ourselves with a lot more flexibility to take advantage of some opportunities that we may have considered overtime Jeffrey A. Kauffman – Buckingham Research Group: All right. So I guess the way I interpret that is if we don’t see strategic opportunity in the second half of the year do we maybe think about getting even more aggressive with the pace of debt reduction?

Yes, Jeff I think we look at the, those actions on a quarter-by-quarter basis that’s the process we’ve had for the last like I said four quarters to six quarters. I think that’s the process will continue its work for well for us. So we will take it quarter-by-quarter and see where we are and see what opportunities we have in the company. Over evaluate where we get the best flexibility and the best return from the various options we have available to us and we’ll makes decision at that point. Jeffrey A. Kauffman – Buckingham Research Group: Okay. Well, please remind me. When do we start to anniversary these mix imbalances on the CTP side?

Yes I think, that’s a fair question Jeff. If we were to go back year ago we have target at the go to 50/50 target between the large direct accounts the indirect speaking to the CTP business because that’s where the mixed effect really placed when within the segment. We are always going to have to deal with and discuss mixed issues related from segment-to-segment as one segment may grow faster than another or they cyclical demands are seasonal demands for CTP which overshadows the DPG. So that the part of it won’t go away, but within the segment within CTP, I think what we are seeing now as we get into this level in the cycle with the big guys really going after addressing the replacement of fleets. While we are going to continue to push for the 50/50 it’s probably more likely that the 60/40 ratio is probably going to be more realistic. there is just so much buying power that the larger guys have that I think it’s going to be tougher and tougher to get for the 50/50 without just walk in a way from some other. So that’s your point. The anniversaries have we are probably get into that point where it looks like quarter-over-quarter. We may have some benefit from one quarter to the next, but over the course of the year’s time. Maybe we’ll say 55 to 60 rather 60 to 60/40 would be 55/45 might be about as good as and get and we will just see how goes, but we don’t want to make it a significant issue from quarter-to-quarter it’s not our intention. We are just trying to lay it out for you that we do have that issue and because of the huge difference between ASPs within CTP type product versus ASPs within DPG that it can really move the need when you have some shifts like that so. Jeffrey A. Kauffman – Buckingham Research Group: Okay I understood the TEC trailer conversions where we are going to start to see some of those retail trailers show up and CTP I think you mentioned 600 trailers. Number one is that an annual, number two when should we start seeing that transition into the CTP numbers?

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

Effective June 1st and TEC is our West Coast dealer representing us in three states out there. Jeffrey A. Kauffman – Buckingham Research Group: Okay then one last question, you mentioned the start-up cost related to a new product and I think I heard you say Modal box that sounds a lot like a container to me, could you give us a better idea, you are getting back into the container business or is this something kind of unique for a very specific customer purpose?

Yes, it’s a unique solution, its referred to as a mobile truck box and it actually its an efficiency improvement on how hand load materials are managed for LTL instead of manually loading one box at a time, they are staged in these boxes external to the trucks and then this box is put within the truck, within the trailer and its just an operational efficiency improvement that has some really nice potential related to it. It speeds up, improves velocity for the LTL and being able to manage when they do their loading and unloading. So form distribution center, so it’s in our mind a big improvement in operational efficiency, its in its early stage, but the launch was more challenging than what had been anticipated and a little bit unique in what we have experienced with these type of launches and that’s why it was notable. We hope we don’t have any more notable ones to have to speak up and going forward, so there was a big lessons learned review on this whole thing to identify what went wrong in the launch of it. So that we don’t have a recurrence of that going forward, so we are expecting that to be a one and only and we will see how we do on that. Jeffrey A. Kauffman – Buckingham Research Group: All right guys, well congratulations and thank you.

Thanks Jeff.

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

Thank you, Vivian. Well in collusion, we are pleased with the results we are able to deliver overall in the second quarter 2014. And that said, we continue to see further opportunities to accelerate topline growth, expand our product to market breadth and to deliver even greater performance in almost all aspects of our business. With a key focus on execution and delivering results, I'm certainly confident that we will do just that. Thank you for your interest and support of Wabash National Corporation. Jeff and I look forward to speaking with all of you again on our next call. Thank you.

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