Wabash National Corporation · NYSE:WNC
Wabash National — Investor Presentation (November 2016)
35 slides from Wabash National's investor presentation, Nov 1, 2016
Slide 1: Wabash National Corporation Investor Update November 2016
WABASH NATIONAL CORPORATION Investor Update November 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: Financial Highlights: Strong, Disciplined Financial Performance
3 ▪ Earnings up 548% since 2011 ($ 0.23/ sh in 2011 to $ 1.49/ sh in 2015 ) ▪ Strong free cash flow with >100 % cash conversion; $ 132M in Operating Cash Flow in 2015 ▪ TTM ROIC 23.7% as of 9 /30/2016 ▪ $ 359M of liquidity or 19% of revenue as of 9 /30/2016 ▪ 0.4x net leverage as of 9 /30/2016 ▪ Sig
Slide 4: Company Facts and Figures
4 2006 | 2013 | 2015 | 2016 Company Facts and Figures ▪ Founded in 1985 ▪ Publicly traded s ince 1991 (NYSE:WNC) ▪ 2015 Revenue: $2.0B ▪ 2015 New Trailer Shipments: 64,700 ▪ Nearly 6,000 associates worldwide (full time & contract) ▪ Headquarters in Lafayette, Indiana ▪ 12 manufacturing l ocations in
Slide 5: Leading Brands in Diverse End Markets and Industries
5 W ABASH N ATIONAL C ORPORATION Wabash National offers a wide selection of products … …that span a diverse set of markets and industries. …to a nationwide customer base of blue - chip companies … Commercial Transportation Food, Dairy & Beverage Pharmaceutical & Biotech 2015 Sales: $ 1.6B ▪ Dry and
Slide 6: Growth Initiatives Driving Record Results
6 G ROWTH I NITIATIVES D RIVING R ECORD R ESULTS 2005 2015 Consolidated Revenue 2005 vs. 2015 Dry Vans All Other Products $2.0B $ 1.2B Dry Vans $1.0B (77% of Total Revenue) Dry Vans $1.2B ( 59% of Total Revenue) 67% Revenue Improvement with Less Dependency on Dry Vans 2013: Beall Acquisition 2014: A
Slide 7: Diversification Yields Higher Margins, Less Cyclicality
7 G ROWTH I NITIATIVES D RIVING R ECORD R ESULTS 2005 2015 Revenue Manufacturing Retail & Distribution 22% Commercial Trailer Products (CTP) Diversified Products Group (DPG) Operating Income Manufacturing Gross Profit/ Margin 12.5% 23.4% 15.0% 0% 5% 10% 15% 20% 25% CTP Consol. DPG 11.7% 8.1% 11.1% 0
Slide 8: Industry-Leading Product Portfolio: CTP End Markets
8 General Freight - Truckload , 71% Refrigerated Freight , 10% Less Than Truckload Freight , 8% Platform Freight , 8% Other , 3% I NDUSTRY - L EADING P RODUCT P ORTFOLIO : CTP E ND M ARKETS Innovative Product Growth ▪ 2015: Introduced Final Mile and Cold Chain Series Truck Bodies ▪ Future : Continue
Slide 9: Industry-Leading Product Portfolio: CTP Overview
9 I NDUSTRY - L EADING P RODUCT P ORTFOLIO : CTP O VERVIEW Van & Platform Trailers Transportation Products & Services DuraPlate® Dry Van DuraPlate HD® Dry V an ArcticLite® Refrigerated V an DuraPlate Pup Trailer Benson® Aluminum T railers Transcraft® Steel and Combo Trailers Transcraft® Coil H aul T
Slide 10: Industry-Leading Product Portfolio: DPG End Markets
10 Food, Dairy, Beverage 29% Chemical 28% General Freight 12% Aviation 7% Pharmaceutical 6% Refined Fuel 6% O&G 5% Aerodynamic Devices 4% Other 3% I NDUSTRY - L EADING P RODUCT P ORTFOLIO : DPG E ND M ARKETS Innovative Product Growth ▪ 2015: Expanded production capacity for dairy silos and tank trai
Slide 11: Industry-Leading Product Portfolio: DPG Overview
11 Sanitary Trailer Refined Fuel Truck Processor Downflow Booth Isolator Aircraft Refueler Dry Bulk Trailer Vertical Silos Above Ground Storage Tanks Mobile Clean Room Hydrant Cart FRP Trailer Vacuum Truck Refined Fuel Truck & Pull Chemical Trailer Truck Body Panels Aerodynamic Fairings Ground Freig
Slide 12: Our Future Outlook
WABASH NATIONAL CORPORATION Our Future Outlook
Slide 13: Key Financial Outlook
13 K EY F INANCIAL O UTLOOK 2015 FY Results 2016 FY Outlook Shipments 64,700 Units ~60,000 Units Revenue $2.03B No Guidance GM% 15.0% No Guidance OM% 8.9% No Guidance SGA% 5.0% ~5.5% CapEx $21M <$25M Tax Rate 36.1% ~35.5% Adjusted EPS $1.49 $1.81 - 1.86 WNC Poised for Another Strong Year
Slide 14: Long-Term Corporate Goals
14 L ONG - T ERM C ORPORATE G OALS 2014 2015 Consolidated Revenue $1.9B $2.0B Consolidated Operating Margin 6.6% 8.9% EPS $0.89 $1.49 ROIC 1 12.5% 19.5% > $3.0B > 10% > 20% > $2.50 NOTE: 1. ROIC = NOPAT/ Invested Capital NOPAT = Operating Income * (1 - tax rate) Invested Capital = Total Assets less
Slide 15: Long-Term Growth Drivers
15 L ONG - T ERM G ROWTH D RIVERS Margin Expansion - Pricing discipline - Operational efficiency / lean manufacturing - Supply chain optimization Organic Growth - New end markets and geographies - Product innovations / portfolio expansion - Aftermarket parts and service capabilities Mergers & Acquis
Slide 16: Mega Trends Drive Growth Initiatives
16 M EGA T RENDS D RIVE G ROWTH I NITIATIVES ▪ Advanced lightweight materials ▪ Full suite of aero products ▪ Aftermarket parts growth ▪ Mobile and On - Site Customer Service ▪ Low cost energy supports chemical production ▪ $158B* of committed chemical production investment ▪ Market share growth in
Slide 17: Organic Growth Initiatives: Truck Body Spotlight
17 O RGANIC G ROWTH I NITIATIVES : T RUCK B ODY S POTLIGHT ▪ Dry Truck Body Market > 50,000 units annually ▪ Refrigerated Truck Body Market > 10,000 units annually ▪ Objective is to grow Truck Body business to > $ 100M revenue by 2020 ▪ Utilizes industry - leading DuraPlate® panels ▪ Robust heavy -
Slide 18: Market Dynamics
WABASH NATIONAL CORPORATION Market Dynamics
Slide 19: Trailer Demand Drivers
19 T RAILER D EMAND D RIVERS ▪ 2008 - 2010: Significant under buy of new trailers ▪ More than 40% of dry van trailers > 10 years old ▪ Active dry van trailers < 15 years old still below 2007 levels ▪ Continued access to financing ▪ Hours of Service (HOS), ELDs, speed limiters, and others » Pressurin
Slide 20: Market Drivers: Trailer Products
20 M ARKET D RIVERS : T RAILER P RODUCTS ▪ Strong demand above replacement levels forecast for next 5 years ▪ Fleet equipment dynamics and regulations key drivers of trailer demand Trailer Demand Forecasts Strong Demand Above Replacement Levels
Slide 21: Market Drivers: Trailer Products (Carrier Operating Environment)
21 M ARKET D RIVERS : T RAILER P RODUCTS ▪ Active truck utilization expected to rise due to regulatory impact ▪ Truck Tonnage and Fleet profitability at or near record levels Carrier Operating Environment Demand Environment Still Positive for Carriers
Slide 22: Market Drivers: Diversified Products
22 M ARKET D RIVERS : D IVERSIFIED P RODUCTS ▪ 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 $160B in 2020 Strong Dairy & Pharma Environment DPG Markets Forecasting Growth
Slide 23: Market Drivers: Diversified Products (Chemical & Oil)
23 M ARKET D RIVERS : D IVERSIFIED P RODUCTS ▪ Lower cost access to natural gas driving increased domestic chemical industry output; $158B of committed chemical production investment ▪ As the chemical and oil industries have continued to expand, so has production of tank trailers Growing Chemical &
Slide 24: Financial Overview
WABASH NATIONAL CORPORATION Financial Overview
Slide 25: Financial Performance: TTM Revenue and Operating Income
25 F INANCIAL P ERFORMANCE Trailing Twelve Month (TTM) Revenue Significantly improved results : ▪ TTM revenue ~$1.9B , up approximately $740M since 2011 ▪ TTM Operating Income increases $197M since 2011 ▪ WNC Gross Margin levels reach 17.7% on TTM basis TTM Operating Income and Gross Margin $1,187 $
Slide 26: Financial Performance: EBITDA, Liquidity and Net Leverage
26 $39 $119 $150 $169 $230 $268 $0 $50 $100 $150 $200 $250 $300 2011 2012 2013 2014 2015 Q3 2016 ($ mils) F INANCIAL P ERFORMANCE 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 levera
Slide 27: Historical Financial Performance: Comparing Cyclical Upturns
27 H ISTORICAL F INANCIAL P ERFORMANCE : C OMPARING C YCLICAL U PTURNS ‘05 - ’06 Upturn $97 $63 8.0% 4.8% $0 $50 $100 $150 $200 $250 $300 2005 2006 TTM Operating EBITDA ($ mils) Industry Volumes * ‘14 - ’16 Upturn $1,214 $1,312 $1,863 $2,027 $1,927 $0 $500 $1,000 $1,500 $2,000 $2,500 2005 2006 2014
Slide 28: Historical Financial Performance: ROIC Comparison
28 H ISTORICAL F INANCIAL P ERFORMANCE : C OMPARING C YCLICAL U PTURNS ‘05 - ’06 Upturn *Source: ACT $312 $386 16.2% 3.7% $0 $100 $200 $300 $400 $500 $600 $700 2005 2006 Invested Capital ($ mils) Industry Volumes * ‘14 - ’16 Upturn 2005 2006 2014 2015 2016 256k 281k 269k 307k 283k $617 $583 $575 12.
Slide 29: Appendix
WABASH NATIONAL CORPORATION Appendix
Slide 30: Consolidated Income Statement
30 C ONSOLIDATED I NCOME S TATEMENT ($ in thousands, except per share amounts) 2011 2012 2013 2014 2015 YTD Q3 2016 Net sales 1,187,244$ 1,461,854$ 1,635,686$ 1,863,315$ 2,027,489$ 1,383,387$ Cost of sales 1,120,524 1,298,031 1,420,563 1,630,681 1,724,046 1,129,338 Gross profit 66,720$ 163,823$ 215,
Slide 31: Consolidated Balance Sheet
31 C ONSOLIDATED B ALANCE S HEET ($ in thousands) 2011 2012 2013 2014 2015 Q3 2016 ASSETS Current assets Cash and cash equivalents 19,976$ 81,449$ 113,262$ 146,113$ 178,853$ 189,641$ Accounts receivable 52,219 96,590 120,358 135,206 152,824 157,941 Inventories 189,533 189,487 184,173 177,144 166,982
Slide 32: Consolidated Cash Flows
32 C ONSOLIDATED C ASH F LOWS ($ in thousands) 2011 2012 2013 2014 2015 YTD Q3 2016 Cash flows from operating activities Net income 15,042$ 105,631$ 46,529$ 60,930$ 104,289$ 96,433$ Adjustments to reconcile net income to net cash (used in) provided by operating activities Depreciation 12,636 14,975
Slide 33: Reconciliation of Non-GAAP Measures
33 R ECONCILIATION OF N ON - GAAP M EASURES ($ in millions) Note: This table reconciles annual net income for the periods presented to the non - GAAP measure of Operating EBITDA. Differences may exist in the calculation of Operating EBITDA due to rounding. 2005 2006 2011 2012 2013 2014 2015 Q3 2016
Slide 34: Reconciliation of Non-GAAP Measures (Per Share)
34 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 Phoenix, Arizona branch in 2016 as well as real estate associated with the three West Coast Retail branches in 2015 $ Per Share $ Per Share $ Pe
Slide 35: Potential Dilutive Impact of Senior Convertible Notes
35 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
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