Wabash National Corporation · NYSE:WNC
Wabash National — Investor Presentation (May 2016)
47 slides from Wabash National's investor presentation, May 17, 2016
Slide 1: Wabash National Corporation Investor Update May 2016
WABASH NATIONAL CORPORATION Investor Update May 2016
Slide 2: Safe Harbor Statement
2 This presentation contains certain forward - looking statements, as defined by the Private Securities Litigation Reform Act of 1995. All statements other than historical facts are forward - looking statements, including without limit, those regarding shipment outlook, Operating EBITDA, backlog, de
Slide 3: Wabash National – Case for Investment
3 2007 2015 TTM ▪ Gross Margin 8.3% 15.0% 16.0% ▪ Operating Margin 2.4% 8.9% 9.9% ▪ Earnings up 187% since 2007 ($0.52/ sh in ‘07. to $1.49/sh. in ‘15) ▪ Strong free cash flow with > 100% cash conversion ▪ TTM ROIC 21.8% as of 3/31/2016 ▪ $338M of liquidity or 17% of revenue as of 3/31/2016 ▪ 0.5x n
Slide 4: Strategic Segments
4 S TRATEGIC S EGMENTS Wabash National Corporation Commercial Trailer Products 2015 Sales: $1.5B • Dry & Refrigerated Vans • Platform Trailers • Dry & Refrigerated Truck Bodies • Fleet Used Trailers Diversified Products 2015 Sales: $428M • Tank Trailers • Truck - Mounted Tanks • Aircraft Refueling E
Slide 5: 2015 Segment Revenue and Product Mix
5 2015 S EGMENT R EVENUE AND P RODUCT M IX New Markets. New Innovation. New Growth. 2015 Consolidated Revenue: $2.0B
Slide 6: Leading Market Positions
6 L EADING M ARKET P OSITIONS DPG End Markets CTP End Markets DPG Market Positions #1 All liquid transportation systems in North America #1 Stainless steel liquid tank trailers in North America (chemical and food markets) #1 Aircraft refuelers worldwide* #1 Isolators and downflow booths worldwide *
Slide 7: Diversification Efforts Driving Results
7 2007 Higher Growth and Margin Profile, Less Cyclicality 2015 D IVERSIFICATION E FFORTS D RIVING R ESULTS Revenue Manufacturing Retail 14% 86% 20% Commercial Trailer Products Diversified Products Retail 72% 8% Operating Income Manufacturing Retail Diversified Products Commercial Trailer Products 23
Slide 8: Long-Term Growth Drivers
8 L ONG - T ERM G ROWTH D RIVERS ▪ Pricing discipline ▪ Operational efficiency / lean manufacturing ▪ Supply chain optimization Margin Expansion ▪ New end markets and geographies ▪ Product innovations / portfolio expansion ▪ Aftermarket parts and service capabilities Organic Growth ▪ Proven ability
Slide 9: Strategic Growth Initiatives
9 S TRATEGIC G ROWTH I NITIATIVES New Markets. New Innovation. New Growth. Urbanization, Final Mile & Home Delivery Energy and Chemical Production, Storage & Transportation Expansion of Cold Chain/Food Equipment Increased Regulation (GHG, ELDs, Food Safety) • Advanced lightweight materials • Full su
Slide 10: Strategic Growth Initiatives – Truck Body
10 S TRATEGIC G ROWTH I NITIATIVES – T RUCK B ODY New Markets. New Innovation. New Growth. • Dry Truck Body market estimated to be in excess of 50,000 units annually • Refrigerated Truck Body market estimated to be in excess of 10,000 units annually • 5 - year objective is to have Truck Body busines
Slide 11: Market Conditions & Outlook
WABASH NATIONAL CORPORATION Market Conditions & Outlook
Slide 12: Transportation Sector Outlook
12 T RANSPORTATION S ECTOR O UTLOOK Strong demand above replacement levels ▪ Truck Tonnage at or near record levels ▪ Truck Loadings continue to rise ▪ Trucking Conditions outlook remains strong Freight and Trucking Conditions Favorable Trucking Indicators
Slide 13: Trailer Sector Outlook: ACT Forecast by Segment
13 ACT Forecast by Segment 2013 2014 2015 2016 2017 2018 2019 2020 2021 Dry Van 134,586 155,909 180,170 184,000 162,000 145,000 145,800 155,000 170,000 Refrigerated 35,879 38,616 46,483 47,000 39,000 35,000 39,000 43,000 42,500 Platform 22,122 25,749 30,730 23,000 27,500 26,000 23,000 24,000 25,000
Slide 14: Trailer Demand Drivers
14 T RAILER D EMAND D RIVERS Strong demand above replacement levels Fleet Dynamics and Regulations Driving Trailer Demand Fleet Equipment Dynamics ▪ 3+ years of significant underbuy (2008 – 2010) ▪ Trailer age expected to return to 2007 level in 2017 ▪ Trailer population expected to return to 2007 l
Slide 15: Trailer Demand Drivers: Carrier Operating Environment
15 T RAILER D EMAND D RIVERS Fleet Profitability is at Record Levels ▪ Active truck utilization expected to rise due to regulatory impact ▪ Truckload rates anticipated to increase with capacity utilization ▪ Fleet profitability at record levels Carrier Operating Environment
Slide 16: Trucking to Remain Dominant Transportation Mode
16 C OMMERCIAL T RAILER P RODUCTS T RUCKING T O R EMAIN D OMINANT T RANSPORTATION M ODE Long - Term Outlook for Trucking Positive Overall Freight Trends • Total tonnage projected to increase from 14.5B tons in 2014 to 19.2B tons in 2026 • Total freight revenue projected to increase from $872B in 201
Slide 17: Market Drivers: Diversified Products
17 M ARKET D RIVERS : D IVERSIFIED P RODUCTS DPG Markets Forecasting Growth ▪ Growing milk production supports demand for dairy silos, mixers and food - grade tank trailers ▪ Worldwide pharmaceutical R&D spend to grow 2.0% (CAGR) to $160 Bn in 2020 ▪ Lower cost access to natural gas driving increase
Slide 18: Market Drivers: Diversified Products
18 M ARKET D RIVERS : D IVERSIFIED P RODUCTS ▪ Projected growth in Truck Body market drives DuraPlate® panel sales growth ▪ CARB and GHG requirements continue to drive demand for aerodynamic products ▪ Housing starts support moving and storage activity and demand for portable storage containers ▪ Av
Slide 19: Long-Term Objectives
WABASH NATIONAL CORPORATION Long - Term Objectives
Slide 20: 2013 Investor Day Stated Goals
20 2013 I NVESTOR D AY S TATED G OALS 2012 2013 2014 2015 Stated Goals (3) Revenue $1.5B $1.6B $1.9B $2.0B > $ 2.0B Diversified Products Revenue (1) $321M (2) $459M (2) $466M (2) $428M > $600M Consolidated Gross Margins 11.2% 13.2% 12.5% 15.0% > 13% CTP Gross Margins 7.1% 7.8% 8.1% 12.4% > 10% Opera
Slide 21: 2020 Goals
21 2020 G OALS 2014 2015 Consolidated Revenue $1.9B $2.0B Consolidated Operating Margin 6.6% 8.9% EPS Growth $0.89 $1.49 ROIC (1) 12.5% 19.5% Notes: (1) ROIC = Net Operating Profit After Tax/Invested Capital Promises Delivered – Accelerating Diversification Strategy 2020 Goals > $3.0B > 10% > 20% >
Slide 22: Financial Overview
WABASH NATIONAL CORPORATION Financial Overview
Slide 23: 2016 FY Outlook
23 2016 FY O UTLOOK Key Financial Metrics 2015 FY Results 2016 FY Outlook Shipments 64,700 Units 60 - 62,000 Units Revenue $2.03B Flattish to down slightly GM% 15.0% No Guidance OM% 8.9% No Guidance SGA% 5.0% ~5.0% CapEx $21M $25 - 30M Tax Rate 36.1% 36 - 37% NWC % of Revenue Adjusted EPS 10.9% $1.4
Slide 24: Financial Performance: TTM Revenue
24 $338 $640 $1,187 $1,462 $1,636 $1,863 $2,027 $2,038 $0 $300 $600 $900 $1,200 $1,500 $1,800 $2,100 12/09 12/10 12/11 12/12 12/13 12/14 12/15 3/16 ($ millions) F INANCIAL P ERFORMANCE Trailing Twelve Month (TTM) Revenue FY 2015 Set New Records Across Multiple Metrics ($ millions) Significantly impr
Slide 25: Financial Performance: TTM Operating EBITDA and Net Leverage
25 F INANCIAL P ERFORMANCE TTM Operating EBITDA at $250M and Net Leverage of 0.5x Net Leverage Ratio Improved top - line and margins lead to: ▪ Record FY Operating EBITDA and year end liquidity in 2015 ▪ Cash generation leading to lower net debt leverage ($43) $5 $39 $119 $150 $169 $230 $250 ($100)
Slide 26: Capital Allocation: 2012–2016F
26 • $66M repurchased 2015 – Qtr1 2016 • $94M still eligible to repurchase through 2017 • $380M of acquisitions with Walker and Beall • Debt Profile: >$175M of debt reduction over past 4 years • Total Capital Expenditures: Approx. $100M Organic Growth Investment/ CapEX Debt Reduction Strategic Inves
Slide 27: Strategic Acquisitions
27 S TRATEGIC A CQUISITIONS 1. Value - added, engineered products and services, where we can provide value - added customer solutions 2. Operating Margin levels > 10% 3. Strong management teams that are a cultural fit 4. Aligned with core competencies in purchasing, operations, distribution and prod
Slide 28: Financial Performance – Adjusted EPS Growth 2011–16
28 F INANCIAL P ERFORMANCE – A DJUSTED EPS G ROWTH 2011 – 2016 Adjusted EPS CAGR is 66% a) 2011 Reported Non - GAAP EPS was $0.23 per diluted share Adjusted EPS as shown of $ 0.14 per diluted share has been tax effected @40% as the tax rate for 2011 was impacted by full valuation allowances on our N
Slide 29: Appendix
WABASH NATIONAL CORPORATION Appendix
Slide 30: Segment Growth Initiatives
30 S EGMENT G ROWTH I NITIATIVES New Markets. New Innovation. New Growth. CTP DPG Retail ▪ Bonded Technology ▪ DuraPlate ® Nose ▪ Roof and Sidewall ▪ Advanced Materials and High Strength Steel ▪ Refrigerated Truck Bodies ▪ Dry Truck Bodies ▪ First Mile/Last Mile Focus ▪ Cold Chain Development ▪ Weig
Slide 31: Segment Profile: Commercial Trailer Products
31 Best - in - Class, Technologically Innovative Products Financial Performance ▪ 2015 New Trailer Shipments: 61,350 ▪ Comprehensive portfolio: dry vans, refrigerated vans, platform trailers, truck bodies ▪ Leading brands and long - standing customer relationships ▪ Industry leader in van and platfo
Slide 32: CTP Organic Growth Initiatives
32 CTP O RGANIC G ROWTH I NITIATIVES New Markets. New Innovation. New Growth. 2016 2017 2018 2019 2020 ▪ Aftermarket Parts Distribution ▪ LTL Growth, Double Drops ▪ Reefer Truck Body ▪ Indirect Channel Growth ▪ Dry Truck Body ▪ 33’ Stretch ▪ Advanced Materials
Slide 33: Long-Term Growth Drivers
33 L ONG - T ERM G ROWTH D RIVERS New Markets. New Innovation. New Growth. ▪ Align to serve “Final Mile” needs for today and beyond ▪ Configure manufacturing for efficiency and capability ▪ Align supply chain for further optimization and new market needs ▪ Capture new customers through new channels
Slide 34: Segment Profile: Diversified Products
34 Diverse Products and End Markets Financial Performance Key Brands ▪ Divisions: Tank Trailers, Aviation & Truck Equipment, Process Systems, and Composites ▪ Diverse portfolio of products serving a variety of customers and attractive end markets ▪ Leading brands and long - standing relationships wi
Slide 35: Organizational Structure and Brands
35 O RGANIZATIONAL S TRUCTURE AND BRANDS Composites Tank Trailers Aviation & Truck Equip. Process Systems Wabash National Corporation Commercial Trailer Products Diversified Products Retail Strategically Focused & Rationalized Brands
Slide 36: DPG – Business Profiles
36 Strong Platforms for Growth DPG – B USINESS P ROFILES Diversified Products Group Tank Trailers 55% of Total • Chemical • Sanitary • Refined Fuel • Crude Oil • Corrosive Materials • Asphalt • Agriculture • Dry Bulk • Used Trailers • Parts Aviation & Truck Equip. Process Systems Composites 11% of T
Slide 37: DPG – Product Overview
37 Sanitary Trailer Refined Fuel Truck Processor Downflow Booth Isolator Aircraft Refueler Dry Bulk Sand Trailer Vertical Silos Above Ground Storage Tanks Mobile Clean Room Hydrant Cart FRP Corrosives Trailer Lift & Hoist Vacuum Truck Refined Fuel Truck & Pull Chemical Trailer Truck Body Panels Aero
Slide 38: DPG Organic Growth Initiatives
38 DPG O RGANIC G ROWTH I NITIATIVES New Markets. New Innovation. New Growth. ▪ Aluminum Trailer Growth Nationally ▪ MCR Product Line Expansion ▪ Aerodynamic Products Portfolio Growth ▪ LTL Truck Boxes ▪ Mexico Silo Growth ▪ Custom Tank Container Solutions ▪ Energy Related Products ▪ Custom Cargo Bo
Slide 39: Segment Profile: Retail
39 Company - Owned Retail Locations Strategic Footprint Providing National Support Financial Performance ▪ Dealership model, selling new and used trailers, aftermarket parts, and maintenance and repair services ▪ Integrated with OEM to deliver best practices and innovation in the aftermarket ▪ Expan
Slide 40: Retail Growth Initiatives
40 R ETAIL G ROWTH I NITIATIVES New Markets. New Innovation. New Growth. ▪ Build Initial Customer Site Service Footprint ▪ Leverage Tank & Trailer Combined Footprint ▪ Expand Mobile Service Fleet ▪ Accelerate Tank Parts & Service Sales Growth ▪ Expand Customer Site Service Offering 2016 2017 2018 20
Slide 41: Key Customers
41 K EY C USTOMERS Large and Diverse Customer Profile Commercial Trailer Products Diversified Products Group
Slide 42: Consolidated Income Statement
42 C ONSOLIDATED I NCOME S TATEMENT New Markets. New Innovation. New Growth. ($ in thousands, except per share amounts) 2009 2010 2011 2012 2013 2014 2015 Q1 2016 Net sales 337,840$ 640,372$ 1,187,244$ 1,461,854$ 1,635,686$ 1,863,315$ 2,027,489$ 447,676$ Cost of sales 360,750 612,289 1,120,524 1,298
Slide 43: Consolidated Balance Sheet
43 C ONSOLIDATED B ALANCE S HEET New Markets. New Innovation. New Growth. ($ in thousands) 2009 2010 2011 2012 2013 2014 2015 Q1 2016 ASSETS Current assets Cash and cash equivalents 1,108$ 21,200$ 19,976$ 81,449$ 113,262$ 146,113$ 178,853$ 168,411$ Accounts receivable 17,081 37,853 52,219 96,590 120
Slide 44: Consolidated Cash Flows
44 C ONSOLIDATED C ASH F LOWS New Markets. New Innovation. New Growth. ($ in thousands) 2009 2010 2011 2012 2013 2014 2015 Q1 2016 Cash flows from operating activities Net (loss) income (101,765)$ (141,760)$ 15,042$ 105,631$ 46,529$ 60,930$ 104,289$ 27,524$ Adjustments to reconcile net (loss) income
Slide 45: Reconciliation of Non-GAAP Measures
45 R ECONCILIATION OF N ON - GAAP M EASURES New Markets. New Innovation. New Growth. ($ in millions) Note: This table reconciles annual net income (loss) for the periods presented to the non - GAAP measure of Operating EBITDA. Di fferences may exist in the calculation of Operating EBITDA due to roun
Slide 46: Reconciliation of Non-GAAP Measures
46 R ECONCILIATION OF N ON - GAAP M EASURES a.) Branch Transactions are comprised of the sale of assets for three West Coast Retail branches in 2014 and the real estate ass ociated with the three West Coast Retail branches in 2015 Note: This table reconciles annual net income for the periods present
Slide 47: Potential Dilutive Impact of Senior Convertible Notes
47 P OTENTIAL D ILUTIVE I MPACT OF S ENIOR C ONVERTIBLE N OTES (UNAUDITED) Table below illustrates the potential dilutive shares that would be included in the calculation of the Company’s reported earnings per share in a future period assuming various hypothetical quarterly average market prices for