Wabash National Corporation · NYSE:WNC
Wabash National — Deutsche Bank Global Transportation Conference 2004
34 slides from Wabash National's conference presentation, Feb 11, 2004
Slide 1: Deutsche Bank Global Transportation Conference, February 2004
(r) William P. Greubel, President & CEO Mark R. Holden, Senior Vice President & CFO Deutsche Bank Global Transportation Conference - February 11 & 12, 2004
Slide 2: Forward-Looking Statements
This presentation will contain certain forward-looking statements, as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements are, however, subject to certain risks and uncertainties that could cause actual results to differ materially from those implied by
Slide 3: Company Overview
Founded as a start-up in 1985 Rapid growth throughout 1990's - revenue focused Leading industry position since 1994 Dedicated union-free workforce ~50,000 trailer annual production (2004 estimate) vs. ~70,000 peak (1999) Historic industry downturn was a catalyst for change Successful financial and o
Slide 4: Investment highlights
Accelerating Industry Recovery Dominant Core Customers Leading Product Offering Middle Market Initiative Continued Operational Excellence Solid Financial Footing Positioned for Significant Earnings Growth
Slide 5: Accelerating Industry Recovery
Accelerating Industry Recovery
Slide 6: Positive Industry Momentum: U.S. Trailer Industry Shipments
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004E 2005E 2006E Total Trailers 179000 173000 164000 161000 161000 147677 120156 162881 185304 233189 279242 202952 235517 285230 318788 275223 140100 139658 184000 240000 278000 278000 Positive Industry
Slide 7: Industry Dynamics Trending Positive
Industry Dynamics Trending Positive '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 25 30 35 40 45 50 55 Months Average Age of Truckload Carrier Trailer Fleet Data Source: ACT Research Co., LLC: Copyright 2003 Many fleets have deferred new trailer purchases during the past 3 years Pent up replacement demand
Slide 8: Net Orders Accelerating
Net Orders Accelerating Units Units Source: ACT Research Co., LLC: Copyright 203 and Company Data
Slide 9: Momentum Continues Into 2004
Momentum Continues Into 2004 Branches Dealers Factory Direct Total 2004 Goal 4700 13800 32221 50721 2004 Attainment 1443 9023 16003 26459 2004 Booked Business as of 1/30/2004 52% Attainment of 2004 Goal Units
Slide 10: Developments Impacting Future Trailer Demand
Developments Impacting Future Trailer Demand Industry WNC Development Impact Impact 1) 2007 Emission Standards Potential pre-buy effect Short Term (2004, 2005, mid-2006) Mid-Term (late 2006 & 2007) 2) Technology Improved trailer utilization Lower trailer-to-tractor ratios DuraPlate - extended traile
Slide 11: Dominant Core Customers
Dominant Core Customers
Slide 12: 2002 Domestic Transportation Markets
2002 Domestic Transportation Markets Source: Cass Logistics 2002 State of Logistics Report $580 Billion Total Freight Revenue $481 Billion Truck Segment of Freight Market Trucking dominates the domestic transportation market Wabash's focus has historically been on the Mega-Carriers 23
Slide 13: Consolidation Trend Continues
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Other 0.8 27.4 90 20.4 Top Ten Carriers 0.2 Consolidation Trend Continues 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Other 0.89 27.4 90 20.4 Top Ten Carriers 0.11 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Other 0.99 27.4 90 20.4 Top Ten Carriers 0.01 Other - 99% Top-10 Carriers - 1% 1980
Slide 14: Dominant Core Customers
Dominant Core Customers U.S. XPRESS ENTERPRISES, INC. Deutsche Bank
Slide 15: Leading Product Offering
Leading Product Offering
Slide 16: Leading Product Offering - DuraPlate
1997 1998 1999 2000 2001 2002 2003 Annual Capacity East 7288 17983 36649 36755 24782 27275 30260 60000 West 15.1 29.5 52.5 55.5 78.2 78.6 78.4 Leading Product Offering - DuraPlate(r) DuraPlate Volume % of Total Units Excellent product acceptance Reduced Total Cost of Ownership (TCO) Increased durabi
Slide 17: Middle Market Initiative
Middle Market Initiative
Slide 18: Middle Market Overview
Middle Market Overview 'Mid-Market' Definition WNC has defined 'Mid-Market' as Carriers with 250 - 5,000 trailers in their fleet, excluding the Top 50 Mega-Carriers Approximately 1,250 Fleets Owns approximately 60% of the total dry freight and refrigerated trailers in operation Represents a trailer
Slide 19: U.S. Trailer Market by Type
U.S. Trailer Market by Type Dry Van Segment U.S. Trailer Market 2.8 million trailers Source: ACT & Company Estimates 1.7 million trailers
Slide 20: Sample of Early Success
Sample of Early Success MSPhotoEd.3 MSPhotoEd.3
Slide 21: Diversified Customer Mix
Diversified Customer Mix 2002 2003 2004 Goal Core Customers 21844 18961 17371 All Others 13284 19765 33350 Total Units 35128 38726 50721 100% 100% 100% 38% 51% 66% 62% 49% 34% Units Generally, more favorable pricing environment outside of core customers
Slide 22: Operational Excellence
Operational Excellence
Slide 23: Operational Turnaround: Safety and Quality
Operational Turnaround Safety Quality Capacity Productivity Standardization Branch Optimization Safety 400% Improvement in TRIR since June of 2002 Sixth consecutive quarter-over-quarter safety-metrics improvement 6,500 fewer days away from work due to injury in 2003 than in 2002 Workers compensation
Slide 24: Operational Turnaround: Capacity and Productivity
Operational Turnaround Safety Quality Capacity Productivity Standardization Branch Optimization Capacity Added $200 million of capacity with 300 additional associates Available capacity to produce over 75,000 units annually on a five day work week 23% greater volume/day with 1,200 fewer associates P
Slide 25: Operational Turnaround: Standardization and Branch Optimization
Operational Turnaround Safety Quality Capacity Productivity Standardization Branch Optimization Standardization Production has been substantially streamlined Significant reduction in the number of options More opportunities remain, $3-$5 million in 2004 Branch Optimization 13 branch locations closed
Slide 26: Financial Review
Financial Review
Slide 27: Debt Reduction
Debt Reduction 2001 2002 2003 2004* Off Balance Sheet Debt 94 20 12 7.3 Bank Debt & Other 347 347 102 50 Convertible Bonds 0 0 125 125 $367 $441 $239 $182 *Company Estimates $ in millions 59% Reduction in Debt
Slide 28: Significantly Reduced Interest Expense
Significantly Reduced Interest Expense Interest Expense Blended Interest Rate 2001 2002 2003 2004* 21.292 30.873 30.308 10.566 2001 2002 2003 2004* East 0.064 0.097 0.077 0.04 *Street Estimates $ in millions
Slide 29: Earnings Growth Catalysts
Earnings Growth Catalysts Income Statement Sales Gross Margin S,G&A Interest Expense Catalysts Improving Cycle Share Gain/Mid-Market HOS Pricing Continuous Improvement - Labor Continuous Improvement - Material Absorption/Incremental Contribution Retail Process Simplification Fees & Services Interest
Slide 30: Truckload Rates vs. DuraPlate Pricing
Truckload Rates vs. Duraplate Pricing Pricing Opportunities ? Source: Wall Street Estimates Our house is in order 2% price increase on a $17,000 trailer equates to $2/month in depreciation Must earn reasonable returns to remain viable enterprise
Slide 31: Significant Operating Leverage
Significant Operating Leverage 1999 2000 2001 2002 2003 2004* Units 69952 63996 36700 34400 41000 50000 % 0.091 0.087 0.049 0.086 0.115 Units *Street Estimates 26% Improvement Over Peak Margins on 40% Less Volume Gross Profit
Slide 32: Summary
Summary
Slide 33: Numbers Must Be Achieved - No Excuses!
Numbers Must Be Achieved - No Excuses! Industry Cycle Dynamics Structural Margin Improvement Grow Earnings Operational Excellence & Financial Strength We Control Our Destiny
Slide 34: Slide 34
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