Wabash National Corporation · NYSE:WNC
Wabash National — Baird's 2004 Industrial Conference
31 slides from Wabash National's conference presentation, Nov 9, 2004
Slide 1: Baird's 2004 Industrial Conference
(r) Baird's 2004 Industrial Conference November 9, 2004 William P. Greubel - President & CEO Robert J. Smith - Sr. Vice President, CFO
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: Management Presenters
William P. Greubel President and CEO Robert J. Smith Sr. Vice President, CFO Management Presenters
Slide 4: Highlights
#1 brand Long-standing core customer partnerships with major fleets Significant traction in Middle Market customer growth initiative Leading innovator of proprietary products Disciplined operational focus on lean manufacturing and continuous improvement initiatives Flexible, efficient manufacturing
Slide 5: Company Overview
Founded as start-up in 1985 Rapid sales growth throughout 1990s Leading industry position since 1994 ~50,000 trailer annual production (2004 estimate) vs. ~70,000 peak (1999) Dramatic turnaround in operating margin structure Company Overview Wabash is positioned for a prolonged period of increased d
Slide 6: Our Commitment
Achieve Operating Results Diversify and Grow Customer Base Prepare For All Industry Cycle Dynamics Continue Structural Margin Improvement Grow Earnings and Cash Flow Strengthen Balance Sheet Attain Operational Excellence & Financial Strength Our Commitment
Slide 7: Positioned for Significant Earnings Growth
Accelerating industry recovery Leading product innovator / maintenance commitment Dominant core customers Middle Market customer growth Continued operational excellence Positioned for Significant Earnings Growth The Company has fundamentally restructured itself to achieve profitability through all i
Slide 8: Freight Tonnage Showing Strength
Freight Tonnage Showing Strength Continued strength in manufacturing should keep freight volumes growing ATA's Truck Tonnage Index (Seasonally Adjusted; 1993=100) Truck Tonnage 1/1/2000 150 2/1/2000 149 3/1/2000 143 4/1/2000 137.5 5/1/2000 137 6/1/2000 140 7/1/2000 139 8/1/2000 138 9/1/2000 139 10/1
Slide 9: Net Orders Trending Upward
4/1/1999 7/1/1999 10/1/1999 1/1/2000 4/1/2000 7/1/2000 10/1/2000 1/1/2001 4/1/2001 7/1/2001 10/1/2001 1/1/2002 4/1/2002 7/1/2002 10/1/2002 1/1/2003 4/1/2003 7/1/2003 10/1/2003 1/1/2004 4/1/2004 7/1/2004 Oct-04E Industry Complete Trailers 86343 67402 77180 83568 70050 35185 43188 40566 30020 39189 23
Slide 10: Positive Industry Momentum
1999 2000 2001 2002 2003 2004E 2005E 2006E 2007E 2008E Class 8 Trucks 280722 206555 118682 148236 141429 202316 240362 253848 224150 282673 Total Trailers 318788 275223 140100 142658 183162 235062 284020 303079 330812 349009 Positive Industry Momentum Units Source: ACT Research U.S. Truck & Trailer
Slide 11: Van Trailer Forecast
Van Trailer Forecast Middle Market initiative should drive increased market share in a growing marketplace Source: Van projections based on ACT Research Industry Production (Units) Wabash's Market Share Dry Vans Reefers Trailer Replacement
Slide 12: Developments Impacting Future Trailer Demand
Developments Impacting Future Trailer Demand Industry Wabash Technology ? ? Improved trailer utilization Lower trailer-to-tractor ratios Extended trailer lives - DuraPlate Maintenance free trailer Federal Hours-of-Service Rules ? ? Business Cycle ? ? Raw Material Costing ? ? Fleet Profitability ? ?
Slide 13: Leading Product Innovator - DuraPlate
Proprietary composite trailers offer several advantages vs. standardized equipment Longer trailer life Low maintenance cost Increased durability Enhanced trade in values Leading Product Innovator - DuraPlate(r) DuraPlate Volume % of Total Units Excellent product acceptance Significant additional sha
Slide 14: DuraPlate Maintenance Commitment: Ten Year Trailer
The DuraPlate(r) box is essentially maintenance free vs. competition and lasts 2 x's longer Major fleet maintenance issues: Tires Brakes Corrosion Lights Panel Replacement Reduced maintenance equals significant cost savings, increased utilization and revenue gains for fleets (Significant "OR") Wabas
Slide 15: Core Customers
Core Customers EEE, WERNER ENTERPRISES SAFEWAY neds” Ex. ENTERPRISES, IMC. “ig “eaten AVERITTEXPAESS
Slide 16: Our Core Customers Driving Consolidation
Others Top 10 Carriers East 0.99 0.01 Others Top 10 Carriers East 0.89 0.11 Others Top 10 Carriers East 0.8 0.2 Our Core Customers Driving Consolidation Source: Eno Transportation Foundation Top-10 Carriers - 1% Other - 99% 1980 2000 Top-10 Carriers - 11% Other - 89% 2010E Top-10 Carriers - 20+% Oth
Slide 17: Expanding Customer Base
Expanding Customer Base Non-Partner Partner East 0.39 0.61 While growing our overall revenues and continuing to service our largest core partners, Wabash has attracted new customers to diversify and grow its revenue sources Non-Partner Partner East 51 49 Non-Partner Partner East 0.67 0.33 2002 2003
Slide 18: Targeting the Middle Market for Growth
Targeting the Middle Market for Growth WNC defines 'Mid-Market' as Carriers with 250 - 7,500 trailers in their fleet (Excludes Top 50 Mega-Carriers) Approximately 1,250 Fleets Accounts for approximately 60% of the total dry freight and refrigerated trailers in operation Represents a trailer populati
Slide 19: Mid-Market: Early Success
Mid-Market: Early Success ant war Ni reansront pw USA CEeetaton — [TpY Loxiscics . Holland Lanol UsF_Hollan TRANSPORT AC. , Ww JACOBSON COMPANIES Forward Air, Inc." Covenant Transport, Inc.
Slide 20: Attaining Operational Excellence
Attaining Operational Excellence Wabash has completed over 300 improvement events since Summer 2002... More to come... Safety: 4x improvement in total reportable incident rate Quality: Significant improvement in operating costs First pass yield improved from 20% to 88% (September: 93%) Warranty (34%
Slide 21: Branch Operations Excellence
The Branch network is a strategic part of Wabash Provides needed service / parts support to Mid-Market Creates outlets for re-sale of used trailer trades Augments factory direct sales to smaller fleets Significant progress has already been made Nearly $5 million Y-O-Y improvement in operating income
Slide 22: Financial Review
Financial Review
Slide 23: Multiple Earnings Growth Catalysts
Multiple Earnings Growth Catalysts Income Statement Catalysts Improving Cycle Share Gain / Mid-Market Sheet & Post and Container Growth Pricing Improvement Continuous Improvement - Labor Continuous Improvement - Material Quality Excellence Absorption / Incremental Contribution Retail / Process Simpl
Slide 24: Structural Margin Improvement
Structural Margin Improvement Achieving peak margins today, yet at only 73% of peak volumes Source: ACT Research and WNC estimates
Slide 25: Operating Cash Flow
Operating Cash Flow Q3 - 03 Q4 - 03 Q1 - 04 Q2 - 04 Q3 - 04 Earnings, adj. for non-cash items -5.8 5.9 11.5 23 25.5 AR, Inventory and AP 23.4 45.4 -21.4 -9.3 -47.4 Other 5.5 -7.6 0.33 -0.048 -1.1 $ in millions 23.0 Net (9.6) 13.7 (23.0) 43.7
Slide 26: Common Stock Sale
Offering Size 3,450,000 Diluted Shares Outstanding: 35.4mm shares (Sept. 30, 2004) Proceeds: $75.7 Repay indebtedness Common Stock Sale
Slide 27: Pro Forma Capitalization
Pro Forma Capitalization $ in Milions ‘As of September 30, 2004 Actual Adjustment Pro Forma Cash and Equivalents $148 $14.8 Term Loans a7 (317) oo Revolving Credit Facility 833 (44.0) 39.3 3.25% Convertible Notes 126.0 126.0 Other Debt 30 30 Total Debt 243.0 (75.7) 167.3 Total Equity 746 5A 149.7 To
Slide 28: Poised to Generate Significant Free Cash Flows
Poised to generate significant Free Cash Flows Wabash Restructured to Achieve Profitability Wabash to achieve profitability through all industry cycles with dramatic upside potential during peak periods
Slide 29: Summary
Summary
Slide 30: Our Commitment: Getting the Job Done!
Achieve Operating Results Diversify and Grow Customer Base Prepare For All Industry Cycle Dynamics Continue Structural Margin Improvement Grow Earnings and Cash Flow Strengthen Balance Sheet Attain Operational Excellence & Financial Strength Getting the Job Done! Our Commitment
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