Wabash National Corporation · NYSE:WNC
Wabash National — Investor Presentation (November 2015)
45 slides from Wabash National's investor presentation, Nov 10, 2015
Slide 1: Wabash National Corporation Investor Update November 2015
WABASH NATIONAL CORPORATION Investor Update November 2015
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: Strategic Segments
3 S TRATEGIC S EGMENTS Wabash National Corporation Commercial Trailer Products 2014 Sales: $ 1.3B • Dry & Refrigerated Vans • Platform Trailers • Dry & Refrigerated Truck Bodies • Fleet Used Trailers Diversified Products 2014 Sales: $466M • Tank Trailers • Truck - Mounted Tanks • Aircraft Refueling
Slide 4: 2014 Segment Revenue and Product Mix
4 2014 S EGMENT R EVENUE AND P RODUCT M IX New Markets. New Innovation. New Growth. 2014 Consolidated Revenue: $1.86B
Slide 5: Leading Market Positions
5 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 6: Diversification Efforts Driving Results
6 2007 Higher Growth and Margin Profile, Less Cyclicality 2014 D IVERSIFICATION E FFORTS D RIVING R ESULTS Revenue Manufacturing Retail 14% 86% 24% Commercial Trailer Products Diversified Products Retail 66% 10% Operating Income Manufacturing Retail Diversified Products Commercial Trailer Products 3
Slide 7: Long-Term Growth Drivers
7 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 p arts and s ervice capabilities Organic Growth ▪ Proven abilit
Slide 8: Segment Growth Initiatives
8 S EGMENT G ROWTH I NITIATIVES New Markets. New Innovation. New Growth. CTP DPG Retail ▪ Bonded Technology ▪ DuraPlate ® Nose ▪ Integrated Logistics ▪ Roof and Sidewall ▪ High Strength Steel Coupler ▪ MaxClearance ™ Door System ▪ Heavy Duty Truck Bodies ▪ First Mile/Last Mile Focus ▪ Cold Chain Dev
Slide 9: Transportation Sector Outlook
9 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 Positive Freight Trend and Trucking Conditions Trucking Indicators
Slide 10: Trailer Sector Outlook
10 ACT Forecast by Segment 2013 2014 2015 2016 2017 2018 2019 Dry Van 134,586 155,909 180,800 177,500 162,000 148,000 153,800 Refrigerated 35,879 38,616 45,600 41,000 37,500 38,000 40,000 Platform 22,122 25,749 31,700 27,500 28,200 24,000 23,000 Liquid Tanks 8,301 8,656 7,600 7,200 6,700 6,700 7,200
Slide 11: Trailer Demand Drivers
11 T RAILER D EMAND D RIVERS Strong demand above replacement levels Fleet Age and Regulations Driving Trailer D emand Fleet Equipment Dynamics ▪ Average age of equipment remains near record high ▪ 3 + years of significant underbuy (2008 - 2010) ▪ Improved access to financing ▪ Trailer population exp
Slide 12: Trailer Demand Drivers: Carrier Operating Environment
12 T RAILER D EMAND D RIVERS Fleets Benefitting from Tight Capacity, Freight Volumes ▪ Active truck utilization expected to stay high for several years due to regulatory impact ▪ Truckload rates elevated ▪ Fleet profitability near record levels Carrier Operating Environment
Slide 13: Commercial Trailer Products: Trucking to Remain Dominant Transportation Mode
13 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 14: Industry-Wide Trailer Order-to-Shipment Cycle
14 I NDUSTRY - W IDE T RAILER O RDER - TO - S HIPMENT C YCLE Order - to - Shipment Cycle Trends Show Distinct Seasonality Reflects Order - to - Shipment Cycles: 2010 - 2014 Source: ACT
Slide 15: Market Demand Drivers
15 M ARKET D EMAND D RIVERS ▪ Projected growth in Truck Body market drives DuraPlate® panel sales growth ▪ CARB compliance requirements continue to drive demand for aerodynamic products ▪ Housing starts support potential moving and storage growth and need for portable storage containers
Slide 16: Segment Outlook: Diversified Products
16 S EGMENT O UTLOOK : D IVERSIFIED P RODUCTS ▪ Growing milk production supports demand for dairy silos, mixers and food - grade tank trailers ▪ Pharmaceutical R&D is expected to increase through 2018 ▪ Lower cost access to natural gas driving increased capital spending and output in the domestic ch
Slide 17: Segment Outlook: Diversified Products
17 S EGMENT O UTLOOK : D IVERSIFIED P RODUCTS ▪ World air passenger traffic is projected to steadily increase over the next 20 years ▪ World air cargo traffic is projected to more than double over the next 20 years RTK: Revenue Ton Kilometers (a single ton of goods that is transported for one kilome
Slide 18: Value Proposition
18 V ALUE P ROPOSITION New Markets. New Innovation. New Growth. Superior Product ▪ Leading producer of semi - trailers and liquid transportation systems for 14 of the past 21 years* ▪ Long history of innovation with over 200 patents ▪ Customer - focused solutions ▪ Products that revolutionize the tr
Slide 19: 2013 Investor Day Stated Goals
19 2013 I NVESTOR D AY S TATED G OALS 2012 2013 2014 Stated Goals (3, 4) Revenue $1.5B $1.6B $1.9B > $ 2.0B Diversified Products Revenue (1) $321M (2) $459M (2) $466M (2) > $600M Consolidated Gross Margins 11.2% 13.2% 12.5% > 13% CTP Gross Margins 7.1% 7.8% 8.1% > 10% Operating EBITDA Margins 8.1% 9
Slide 20: 2020 Goals
20 2020 G OALS 2014 2015 Consensus Consolidated Revenue $1.9B $2.0B Consolidated Operating Margin 6.6% 8.7% EPS Growth $0.89 $1.39 ROIC (1) 12.5% Notes: (1) ROIC = Net Operating Profit After Tax/Invested Capital Promises Delivered – Accelerating Diversification Strategy 2020 Goals > $3.0B > 10% > 20
Slide 21: Financial Overview
WABASH NATIONAL CORPORATION Financial Overview
Slide 22: Financial Performance
22 $338 $640 $1,187 $1,462 $1,636 $1,863 $2,011 $0 $300 $600 $900 $1,200 $1,500 $1,800 $2,100 12/09 12/10 12/11 12/12 12/13 12/14 9/15 ($ millions) F INANCIAL P ERFORMANCE Trailing Twelve Month (TTM) Revenue FY 2014 Revenue and Operating Income Set New Records ($ millions) Significantly improved fin
Slide 23: Financial Performance: Operating EBITDA and Net Leverage
23 F INANCIAL P ERFORMANCE TTM Operating EBITDA at $207M and Net Leverage of 0.7x Net Leverage Ratio Improved top - line and margins lead to: ▪ Record FY Operating EBITDA and year end liquidity in 2014 ▪ Cash generation leading to lower net debt leverage ($43) $5 $39 $119 $150 $169 $207 ($100) ($50)
Slide 24: Capital Allocation: 2012-2015F
24 • Share repurchases: $41M repurchased in 2015 YTD • $380M of acquisitions with Walker and Beall • Debt Profile: >$100M of debt reduction over past 3 years • Total Capital Expenditures: Approx. $75M Organic Growth Investment/ CapEX Debt Reduction Strategic Investment/ Acquisitions Liquidity C APIT
Slide 25: Strategic Acquisitions
25 S TRATEGIC A CQUISITIONS 1. Value - added, engineered products and services, where we can provide value - added customer solutions 2. Operating Margins > 10% 3. Strong management teams that are a cultural fit 4. Aligned with core competencies in purchasing, operations, distribution and product de
Slide 26: Financial Performance – Adjusted EPS Growth 2011-15
26 F INANCIAL P ERFORMANCE – A DJUSTED EPS G ROWTH 2011 – 2015 Adjusted EPS CAGR is 78% 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 27: Appendix
WABASH NATIONAL CORPORATION Appendix
Slide 28: Segment Profile: Commercial Trailer Products
28 Best - in - Class , Technologically Innovative Products Financial Performance ▪ 2014 New Trailer Shipments: 53,550 ▪ Comprehensive portfolio: dry vans, refrigerated vans, platform trailers, truck bodies ▪ Leading brands and long - standing customer relationships ▪ Industry leader in van and platf
Slide 29: CTP Organic Growth Initiatives
29 CTP O RGANIC G ROWTH I NITIATIVES New Markets. New Innovation. New Growth. 2015 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 30: Long-Term Growth Drivers
30 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 & New Market Needs ▪ Capture New Customers through New Channels Po
Slide 31: Segment Profile: Diversified Products
31 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 32: 2015 Organizational Structure and Brands
32 2015 O RGANIZATIONAL S TRUCTURE AND BRANDS Composites Tank Trailer Aviation & Truck Equip. Process Systems Wabash National Corporation Commercial Trailer Products Diversified Products Retail Strategically Focused & Rationalized Brands
Slide 33: DPG – Business Profiles
33 Strong Platforms for Growth DPG – B USINESS P ROFILES Diversified Products Group Tank Trailers 53% of Total • Chemical • Sanitary • Refined Fuel • Crude Oil • Corrosive Materials • Asphalt • Agriculture • Dry Bulk • Used Trailers • Parts Aviation & Truck Equip. Process Systems Composites 12% of T
Slide 34: DPG – Product Overview
34 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 35: DPG Organic Growth Initiatives
35 DPG O RGANIC G ROWTH I NITIATIVES New Markets. New Innovation. New Growth. 2015 2016 2017 2018 2019 2020 ▪ Aluminum Trailer Growth Nationally ▪ MCR Product Line Expansion ▪ Aerodynamic Products Portfolio Growth ▪ LTL Truck Boxes ▪ Mexico Silo Growth ▪ Custom Tank Container Solutions ▪ Energy Rela
Slide 36: Segment Profile: Retail
36 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 37: Retail Growth Initiatives
37 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 2015 2016 2017 20
Slide 38: Key Customers
38 K EY C USTOMERS Large and Diverse Customer Profile Commercial Trailer Products Diversified Products Group
Slide 39: Consolidated End Markets
39 C ONSOLIDATED E ND M ARKETS Note: All information based on 2014 revenues New Markets. New Innovation. New Growth.
Slide 40: Consolidated Income Statement
40 C ONSOLIDATED I NCOME S TATEMENT New Markets. New Innovation. New Growth. ($ in thousands, except per share amounts) 2009 2010 2011 2012 2013 2014 YTD Q3 2015 Net sales 337,840$ 640,372$ 1,187,244$ 1,461,854$ 1,635,686$ 1,863,315$ 1,483,778$ Cost of sales 360,750 612,289 1,120,524 1,298,031 1,420
Slide 41: Consolidated Balance Sheet
41 C ONSOLIDATED B ALANCE S HEET New Markets. New Innovation. New Growth. ($ in thousands) 2009 2010 2011 2012 2013 2014 Q3 2015 ASSETS Current assets Cash and cash equivalents 1,108$ 21,200$ 19,976$ 81,449$ 113,262$ 146,113$ 197,187$ Accounts receivable 17,081 37,853 52,219 96,590 120,358 135,206 1
Slide 42: Consolidated Cash Flows
42 C ONSOLIDATED C ASH F LOWS New Markets. New Innovation. New Growth. ($ in thousands) 2009 2010 2011 2012 2013 2014 YTD Q3 2015 Cash flows from operating activities Net (loss) income (101,765)$ (141,760)$ 15,042$ 105,631$ 46,529$ 60,930$ 71,002$ Adjustments to reconcile net (loss) income to net ca
Slide 43: Reconciliation of Non-GAAP Measures
43 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 44: Reconciliation of Non-GAAP Measures
44 R ECONCILIATION OF N ON - GAAP M EASURES Note: This table reconciles annual net income for the periods presented to the non - GAAP measure of adjusted earnings and adjust ed earnings per share. Differences may exist in the calculation of adjusted earnings per share due to rounding. $ Per Share $
Slide 45: Potential Dilutive Impact of Senior Convertible Notes
45 Hypothetical Quarterly Average Share Price (NYSE: WNC) (1) Potential Incremental Shares for Diluted EPS (in 000s shares) (2) 11.50$ - 12.00$ 316 12.50$ 816 13.00$ 1,277 13.50$ 1,704 14.00$ 2,101 14.50$ 2,471 15.00$ 2,816 15.50$ 3,138 16.00$ 3,441 16.50$ 3,725 17.00$ 3,992 17.50$ 4,244 18.00$ 4,48
Wabash National — Investor Presentation (November 2015) on 6ix