Following this introduction, you will hear from Dick Giromini, Chief Executive Officer of Wabash National, on highlights for the second quarter, the current operating environment and our outlook. After Dick, Mark Weber, our Chief Financial Officer, will provide a detailed description of our financial result. At the conclusion of our prepared portion of our presentation, we will open the call for questions from the listening audience.And with that, it is my pleasure to turn the call over Mr. Dick Giromini, Chief Executive Officer. Dick Giromini Thank you, Jeff, and welcome to the team. With that let's discuss second quarter results. The second quarter provided us with significant momentum as we continued to execute our strategic plan to enhance our overall business structure through selective organic and external growth initiatives. With the addition of the Walker Group, our transformation from a trailer manufacture to a diversified manufacturing business has been considerable traction. When combined with our other diversification initiatives, we have established a strong platform for higher margin product lines, more consistent financial performance and numerous avenues for continued growth. Our impressive quarterly results, which I will highlight in just a moment, were underpinned by the successful execution of key strategic initiatives, including diversifying our business beyond our core product offering to address new market opportunities and enhance our financial profile, particularly through our Wabash Composites and our Energy & Environmental Solutions products groups. Executing the acquisition and integration of Walker, which has added an attractive higher margin business and another layer of diversification in terms of products, end-markets, customers and geographies, and driving price and enhancing margins than our core Commercial Trailer Products business. The combination of these initiatives, not only drove net sales to $362 million, up 26%, but drove adjusted earnings up almost 300% year-over-year. Excluding acquisition related expenses, we generated adjusted earnings of $15.5 million, representing $11.5 million increase over second quarter 2011 adjusted earnings of $4.0 million.
Gross margins exceeded internal expectations moving at the double-digit for the first time since 2005, reaching 10.9%, up from 7.1% attained in the first quarter of this year. As mix of higher margin shipments improved during the quarter within our Commercial Trailer Products group and our higher margins Diversified Products business more than doubled in profit contribution with the addition of Walker.Operating income excluding the impact of certain acquisition related expenses for the second quarter of 2012 was $22.2 million, representing a fourfold improvement as compared to the previous year period. Excluding acquisition related expenses, operating EBITDA totaled $29.7 million, which represents an increase of $20 million when compared to the second quarter of 2011. Overall, we're particularly pleased with these results and the continued improvement in our business performance since 2011. Recall, we viewed the fourth quarter 2011 as an important inflection point in our business. And I'm pleased to say we've made good on that promise and we remain encouraged by our prospects for continued progress going forward. With that, let's discuss the financial performance of each of our reporting segments, beginning with our Commercial Trailer Product segment. Year-over-year net sales for the second quarter increased by approximately $28 million or 11% when compared to the second quarter 2011 on 400 additional new trailer shipments. Gross margins advanced to 6.7%, up 340 basis points from the prior-year quarter, as the effects of tax pricing improvement action continue to take hold and were realized in the quarter. Operating income for second quarter 2012 was $13.7 million a fourfold improvement of $10.4 million when compared to the previous year period resulting from a higher margin mix of new trailer shipments for the quarter of 11,700 units. While shipment volume came up shy of our expectations, this is directly attributed to our commitment to drive price and margin enhancement through more selective order acceptance as we opted to decline to low-margin high-volume opportunities in favor of capturing higher margin orders. As a result, gross margins more than doubled from the year ago, driven by a richer mix of smaller batch sized higher spec trailers requiring increased takt times to build. Read the rest of this transcript for free on seekingalpha.com