Wabash National Corporation · NYSE:WNC
Wabash National — Investor Day (August 2015)
111 slides from Wabash National's investor day presentation, Aug 18, 2015
Slide 1: 2015 Analyst/Investor Day
2015 ANALYST/INVESTOR DAY August 18, 2015 Wabash National Corporation
Slide 2: Agenda
2 A GENDA 7:45 – 8:00 a.m. Agenda & Safety Overview – PPE Handout 8:00 – 9:30 a.m. Plant Tours (tour groups determined by the color on name tag) 9:30 – 9:40 a.m. Break/Product Displays 9:40 – 11:40 a.m. Management Presentations 11:40 – 12:10 p.m. Panel Q&A: Dick , Jeff, Mark, Brent and Rick 12:10 –
Slide 3: EH&S Mission
3 EH&S M ISSION Wabash National is committed to our associates, customers and shareholders to manage all of our business activities in a responsible manner, with our highest value being the health and safety of our associates. We believe that all injuries and occupational illnesses, as well as envir
Slide 4: Emergency procedures
‘ANU BOGE 5 2 om ASs MEDICAL EMERGENCY TRANSPORTATION ee FIREIEXPLOSION CHEMICAL SPILL EVACUATION
Slide 5: Basic Safety Requirements
5 B ASIC S AFETY R EQUIREMENTS Plant Tour Safety • Steel - toed shoes • Safety glasses with side - shields • Ear plugs or ear muffs for hearing protection • Stay in the pedestrian aisles where available • No walking through overhead doors • No cell phone use
Slide 6: General Plant Hazards
6 G ENERAL P LANT H AZARDS Plant Tour Safety • Noise levels make communication difficult • Industrial truck traffic • Line cart traffic • Overhead cranes/hoists • All parts are extremely sharp and generally heavy • ~450 welders throughout the plant
Slide 7: Tour PPE
7 T OUR PPE • Safety Glasses • Radio headsets • Steel toe overshoe
Slide 8: Forward-looking statements
8 First, please note this presentation is being recorded. Second, 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,
Slide 9: Dick Giromini, President and CEO
2015 ANALYST/INVESTOR DAY Dick Giromini President and Chief Executive Officer Wabash National Corporation August 18, 2015
Slide 10: Company Facts and Figures
10 Company Facts and Figures ▪ Founded in 1985 ▪ 2014 Revenue: $1.86B ▪ Publicly Traded (NYSE:WNC) Since 1991 ▪ Nearly 6,000 Associates Worldwide (Full time & Contract) ▪ Corporate Headquarters in Lafayette, Indiana ▪ 12 Manufacturing Locations in 3 Countries W ABASH N ATIONAL C ORPORATION ▪ 15 Comp
Slide 11: Vision, Mission & Values
11 Mission To provide ever - increasing value to all of our stakeholders, including customers, shareholders, associates, suppliers, and our community. Based on core values of integrity, trust and mutual respect , we will drive continuous improvement, thus assuring leadership positions in: ▪ safety p
Slide 12: The 2007 Strategic Plan
12 T HE 2007 S TRATEGIC P LAN – W HERE O UR G ROWTH B EGAN ... set the core principles and activities that will guide our decision to acquire, ally, and build new businesses to maximize the value of the company. ...a living , dynamic document. ...every associate is helping move the company in the sa
Slide 13: Strategic Plan Goals/Objectives
13 S TRATEGIC P LAN G OALS /O BJECTIVES Diversify the Business Operational Excellence Grow the Business Objectives Goals Enhanced Shareholder Value Reduce Cyclicality Improve Profitability Drive Top - Line Growth Focus on High - Margin Opportunities
Slide 14: Corporate Strategy
14 Corporate Strategy • Aligned with Vision, Mission, and Values • 5 - yr Strategic Goals • Encompasses Growth and Diversification Objectives Segment Strategy Portfolio Strategy • Aligned with Corporate Strategy • 5 - yr Strategic Goals • Encompasses Segment Specific Growth Initiatives • Aligned wit
Slide 15: Progress to Date (WNC Revenue Since 2009)
15 $338 $640 $1,187 $1,462 $1,636 $1,863 $2,025 Progress to Date (WNC Revenue Since 2009)
Slide 16: Strategic Segments in 2007
16 S TRATEGIC S EGMENTS IN 2007 Wabash National Corporation Manufacturing 2007 Sales: $1,015M • Dry & Refrigerated Vans • Platform Trailers Retail 2007 Sales: $ 150M • 11 Retail Locations in U.S. • New & Used Trailer Sales • Parts & Service Revenue Heavily Dependent on a Single, Cyclical Market Segm
Slide 17: Where We Have Been 2007-2011
17 W HERE W E H AVE B EEN 2007 – 2011 Weather the Downturn » Downturn of all downturns » Accelerate cost optimization » Optimize operating footprint » Continue to develop internal processes and efficiencies » Initiate diversification of the business » Weather the storm through capital raise » Improv
Slide 18: Strategic Segments Since 2012
18 S TRATEGIC S EGMENTS S INCE 2012 Wabash National Corporation Commercial Trailer Products 2014 Sales: $1.3B • Dry & Refrigerated Vans • Platform Trailers • Fleet Used Trailers Diversified Products 2014 Sales: $466M • Tank Trailers • Truck - Mounted Tanks • Aircraft Refueling Equipment • Composite
Slide 19: Where We Have Been
19 W HERE W E H AVE B EEN 2007 – 2011 2012 – 2014 Weather the Downturn Recovery, Growth & Diversification » Downturn of all downturns » Accelerate cost optimization » Optimize operating footprint » Continue to develop internal processes and efficiencies » Initiate diversification of the business » W
Slide 20: 2014 Organizational Structure and Brands
20 2014 O RGANIZATIONAL S TRUCTURE AND BRANDS Wabash National Corporation Commercial Trailer Products Diversified Products Retail Wabash Composites Wood Products Walker Group Engineered Products Transportation Integrated Walker Group and Beall into DPG
Slide 21: 2015 Organizational Structure and Brands
21 2015 O RGANIZATIONAL S TRUCTURE AND BRANDS Composites Tank Trailer Aviation & Truck Equip. Process Systems Wabash National Corporation Commercial Trailer Products Diversified Products Retail Enhancing Alignment Between Product Lines and Markets
Slide 22: 2014 Segment Revenue and Product Mix
22 2014 S EGMENT R EVENUE AND P RODUCT M IX New Markets. New Innovation. New Growth. 2014 Consolidated Revenue: $1.86B
Slide 23: Diversification Efforts Driving Results
23 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
Slide 24: 2013 Investor Day Stated Goals
24 2013 I NVESTOR D AY S TATED G OALS 2012 Stated Goals (3, 4) Revenue $1.5B > $ 2.0B Diversified Products Revenue (1) $321M (2) > $600M Consolidated Gross Margins 11.2% > 13% CTP Gross Margins 7.1% > 10% Operating EBITDA Margins 8.1% > 10% Net Leverage 3.1x < 2.0x Executing Against Our Strategic Pl
Slide 25: 2013 Investor Day Stated Goals vs Results
25 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 26: Future Growth Initiatives
26 Future Growth Initiatives
Slide 27: Wabash 2020
WABASH [ 2020 | oH"
Slide 28: Long-Term Growth Drivers
28 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 29: 2020 Goals
29 2020 G OALS 2014 2015 Consensus Consolidated Revenue $1.9B $2.0B Consolidated Operating Margin 6.6% 8.1% EPS Growth $0.89 $1.29 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 30: DPG Organic Growth Initiatives
30 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 31: CTP Organic Growth Initiatives
31 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 32: Retail Growth Initiatives
32 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 33: Strategic Acquisitions
33 S TRATEGIC A CQUISITIONS Growth Through Acquisition Remains a Viable Option 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
Slide 34: Commercial Trailer Products
2015 ANALYST/INVESTOR DAY Commercial Trailer Products August 18, 2015 Brent Yeagy Group President – CTP
Slide 35: Segment Profile: Commercial Trailer Products
35 Best - in - Class, Technologically Innovative Products Financial Performance ▪ 2014 New Trailer Shipments: 53,550 ▪ Comprehensive portfolio: dry vans, refrigerated vans, platform trailers ▪ Leading brands and long - standing customer relationships ▪ Industry leader in van and platform trailer man
Slide 36: CTP's Path to Double Digit Gross Margin
36 Dramatic Margin Improvement Since 2011 CTP’ S P ATH TO D OUBLE D IGIT G ROSS M ARGIN GM% past 5 years 2014 – 8.1% 2013 – 7.8% 2012 – 7.1% 2011 – 3.8% 2010 – 3.0% 11.7% GM in Q2
Slide 37: Long-Term Growth Drivers
37 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 38: Final Mile
WABASH D 2020 | Final Mile
Slide 39: What Is Final Mile?
39 W HAT IS F INAL M ILE ? Final Mile: The technologies, processes and equipment used to connect the end customer, now typically represented as the “ Home,” to the last leg of the logistics network . The final mile is often stated in terms of the “final - mile problem,” because the end link between
Slide 40: J.B. Hunt - An Example of Looking Toward the Future
40 We’re J.B. Hunt Final Mile Services. We bring a coast - to - coast network of equipment, technology, cross docks and, most importantly, a strategy to every customer. As one of the largest final mile providers, we have the resources to tackle the biggest transportation and logistics challenges. Bu
Slide 41: Final Mile Delivery - The Next Wave of Logistics Change
41 F INAL M ILE D ELIVERY – T HE N EXT W AVE OF L OGISTICS C HANGE “Final Mile” Market is Fragmented Carrier’s Truck / Fleet Size 1 ▪ 160 carriers profiled ▪ Nearly 80% have 250 trucks or less ▪ For reference, USPS has ~100,000 delivery vehicles Carrier’s Coverage 1 ▪ 252 carriers profiled ▪ Nearly
Slide 42: Indirect Channel Expansion
42 Indirect Channel Expansion
Slide 43: Simple Reasoning for Indirect Channel Expansion
43 S IMPLE R EASONING FOR I NDIRECT C HANNEL E XPANSION Comprehensive Product Focus: ▪ Dry Van ▪ Refrigerated Van ▪ Steel Platform ▪ Aluminum Platform Successful campaigns executed in the West and Upper Midwest
Slide 44: Examples of Indirect Channel Expansion Success
44 E XAMPLES OF I NDIRECT C HANNEL E XPANSION S UCCESS Locations: 15 Locations – Washington, Oregon, California Volume: 1,800 Vans, 300 Platforms Awards: 60+ Awards from Volvo, ATA, Mack, ATDA Brands: Volvo, Mack, Hino, Wabash, Benson, Transcraft Locations: 11 Locations – Michigan, Illinois, Indiana
Slide 45: Aftermarket Part Manufacturing
45 Aftermarket Part Manufacturing
Slide 46: Aftermarket Manufactured Part Growth
46 A FTERMARKET M ANUFACTURED P ART G ROWTH To scale our core manufacturing capabilities to more broadly serve the aftermarket part transportation space. ▪ Operating Income to grow at a 30 - 40% CAGR over plan period ▪ Strategic expansion of dedicated and flexible aftermarket manufacturing capabilit
Slide 47: Advanced Design
WABASH D 2020 | Advanced Design
Slide 48: Advanced Design
48 A DVANCED D ESIGN Incorporation of viable aspects of new technological offerings to continue to differentiate our products in our current markets and provide opportunity to enter new markets. Weight Reduction Improvement in Refrigerated Efficiency Material Cost Reduction Reduction of Corrosive St
Slide 49: Advanced Design Overview
49 A DVANCED D ESIGN O VERVIEW Advanced Design 2020 Bonding (2014+) HSS Components (2015+) Composite Components (2015+) Lightweight Panel Technology (2017) Flush Mount Intermediate Logistics (2017) Advanced Structures (2016+) Advanced Coatings (2016+) Coming Soon Coming Soon
Slide 50: In Closing
WABASH D 2020 | In Closing
Slide 51: Shaping CTP Initiatives - Reason to Believe
51 S HAPING CTP INITIATIVES – R EASON TO B ELIEVE Proven Ability to Execute Industry Leading Brand Manufacturing Leverage and Scale “The Innovation Leader” for 30 Years Aligned, Engaged and Motivated Associates Indisputable Mega Forces Final Mile Cold Chain Advanced Materials Indirect Channel Afterm
Slide 52: CTP Focus & Strengths
52 C OMMERCIAL T RAILER P RODUCTS F OCUS & S TRENGTHS Opportunity Awaits Us We Face Real Market Forces of Change Just as We Promised We Performed As We Should We Ran Our Business The Market Responds When We Innovate It’s With Impact When We Invest And We Do It with the Best People and Brands in the
Slide 53: Thank You
53 T HANK Y OU The Best People and Most Respected Brand in Our Industry
Slide 54: Diversified Products
2015 ANALYST/INVESTOR DAY Diversified Products August 18, 2015 Mark Weber Group President – DPG
Slide 55: Segment Profile: Diversified Products
55 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 56: 2014 Organizational Structure and Brands
56 2014 O RGANIZATIONAL S TRUCTURE AND BRANDS Wabash National Corporation Commercial Trailer Products Diversified Products Retail Wabash Composites Wood Products Walker Group Engineered Products Transportation “Walker Group” Central in Previous Segment Structure
Slide 57: 2015 Organizational Structure and Brands
57 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 58: DPG - Business Profiles
58 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 59: DPG - Product Overview
59 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 60: Tank Trailers - Growth in Aluminum Products
60 Transition Beall from a Regional to a National Brand T ANK T RAILERS – G ROWTH IN A LUMINUM P RODUCTS Beall Aluminum Petroleum Tank Trailer (406) Beall Aluminum Dry Bulk Trailer (Pneumatic) ▪ Industry - leading stainless steel trailer brands: ▪ 2013 acquisition of the Beall brand and Portland, OR
Slide 61: Process Systems - Silo Expansion into Mexico
61 P ROCESS S YSTEMS – S ILO E XPANSION INTO M EXICO New Geographic Growth Opportunities with Existing Products ▪ Strong and steady growth dynamics in the Mexican food, dairy and beverage market ▪ Expansion of WNC’s Mexico tank trailer facility is now complete to provide Walker silos for the local m
Slide 62: Process Systems - Life Sciences
62 P ROCESS S YSTEMS – L IFE S CIENCES Growth Opportunities Through New Innovation ▪ Developing new Mobile Clean Room (MCR) offerings for domestic and international use in new markets ▪ Developing standard product offerings for key end markets and customers around the globe Mobile Clean Rooms Isolat
Slide 63: Aviation & Truck Equipment - Innovative Refined Fuel Truck
63 A VIATION & T RUCK E QUIPMENT – I NNOVATIVE R EFINED F UEL T RUCK Growth Opportunities Through New Innovation ▪ Unique Auxiliary Power Unit (APU) for fuel savings & extended life of the truck ▪ Integrated safety shutdowns ▪ Dual tank design (stainless steel and aluminum) to provide convenient del
Slide 64: Composites Product Platforms
64 Aerodynamic Solutions Panel Solutions Custom Solutions Mobile Solutions Broad and Diverse Portfolio OHD Application Swing Door Application LTL Conveyor System Specialty Vehicle Ramp LTL Dividers Non - Stack PSC European Dry Van Trailer Stackable PSC LTL Decking System LTL Pup Aero Package AeroFin
Slide 65: Mobile Solutions - Truck Box
65 Turning Customer Solutions into Market Solutions • Truck Box containers expand ground cargo network operations • Multiple designs to be used in various parts of the operation • Made with proprietary DuraPlate ® panels • Incorporates aircraft - style base for increased versatility • Domestic and I
Slide 66: DPG Growth Initiatives
66 DPG 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 Related Produ
Slide 67: Retail
2015 ANALYST/INVESTOR DAY Retail August 18, 2015 Rick Klein Vice President & General Manager – Retail
Slide 68: Segment Profile: Retail
68 Company - Owned Retail Locations 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 ▪ Expansion into new markets with mobile service and 3
Slide 69: Retail: Mission
69 R ETAIL : M ISSION Tank Services Market Recognized Customer Value New Trailer Sales Used Trailer Sales Parts Service Geographic Locations Brand Strength Parts & Service Expertise 3 rd Party Service Capability Create a fully integrated, national dealership organization recognized for value - added
Slide 70: Retail: Trends Driving Aftermarket Growth
70 INDUSTRY Ɣ Fleet Age Near Record High Ɣ Truck Tonnage at Historical Highs Ɣ Loadings Index Closing in on 2007 Record Levels Ɣ Truck Utilization Rates at 95% + Strong Demand for Aftermarket Service and Parts R ETAIL : T RENDS D RIVING A FTERMARKET G ROWTH I NITIATIVES GROWTH Ɣ Hours of Service (HO
Slide 71: Retail: Growth - Tank Parts & Service
71 R ETAIL : G ROWTH – T ANK P ARTS & S ERVICE x Leverage Combined Footprint to Capture Higher - Margin Tank Parts & Service x Low CapEx Investment Required for Wabash National Trailer Centers x Expand Support of DPG Brand Products Nationally x Accelerate National Parts Sales Growth x 5 Legacy Store
Slide 72: Retail: Growth - Customer Site Service
72 $10 $15 $20 $25 $30 $35 $40 Customer Site Service Revenue Growth A Repeatable Service Model for Future Growth R ETAIL : G ROWTH – C USTOMER S ITE S ERVICE x Full Service Capability – minor to major repairs, national parts pricing and supply, OEM trained technicians x Favorably impacts trailer fle
Slide 73: Retail: Growth - Mobile Service
73 R ETAIL : G ROWTH – M OBILE S ERVICE 4 2 10 2 1 6 2 4 15 25 35 45 55 Mobile Unit Deployment x CSA regulation will drive demand x Expands retail location effective service radius x Amplifies fleet service capability x Accelerates customer response time x Reduces elapsed “unit downtime” x Provides
Slide 74: Retail Growth Initiatives
74 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 75: Financial Overview
2015 ANALYST/INVESTOR DAY Financial Overview August 18, 2015 Jeff Taylor Chief Financial Officer
Slide 76: Financial Performance - TTM Revenue and Operating Income
76 $338 $640 $1,187 $1,462 $1,636 $1,863 $1,972 $0 $300 $600 $900 $1,200 $1,500 $1,800 $2,100 12/09 12/10 12/11 12/12 12/13 12/14 6/15 ($ millions) F INANCIAL P ERFORMANCE Trailing Twelve Month (TTM) Revenue FY 2014 Revenue and Operating Income Set New Records ($ millions) Significantly improved fin
Slide 77: Financial Performance - TTM Operating EBITDA and Net Leverage
77 F INANCIAL P ERFORMANCE TTM Operating EBITDA at $186M and Net Leverage of 1.1x 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 $186 ($100) ($50)
Slide 78: Free Cash Flow
78 $111 $76 $114 240% 125% 122% 0% 50% 100% 150% 200% 250% $- $20 $40 $60 $80 $100 $120 2013 A 2014 A 2015 F* ($ millions) Free Cash Flow Free Cash Conversion $110 - 115 Became a cash tax payer in 2014 Proven Track Record of Strong FCF Conversion Free Cash Conversion defined as Free Cash Flow divide
Slide 79: Capital Allocation: 2012-2015F
79 • Share repurchases: $40M repurchased in 2015 YTD • $380M of acquisitions with Walker and Beall • Debt Profile: >$100M of debt reduction over past 3 years • Total Capital Expenditures: $78M Organic Growth Investment/ CapEX Debt Reduction Strategic Investment/ Acquisitions Liquidity C APITAL A LLO
Slide 80: Improved Debt Profile - Active Management of the Balance Sheet
80 • Completed Walker strategic acquisition, transforming the company Financing: • $300M Term Loan B • $150M of Conv. Notes • Retired $56M Revolver balance and refinanced instrument • Refinance Term Loan B – reduced rate by 125 bps • Voluntary prepayment of $60M on the Term Loan B • Voluntary prepay
Slide 81: Improved Debt Profile - Flexible and Patient Capital Structure
81 Strong Balance Sheet ▪ Cash Balance of $140M at 6/30/15 ▪ Untapped ABL Revolver – $168M available ▪ Total liquidity of $308M at 6/30/15 ▪ Net working capital of ~12% of revenue ▪ Minimal debt repayment requirements before 2018 ▪ Modest CapEx requirements: ▪ ~$25 million for 2015 or 1.2% of revenu
Slide 82: Share Repurchase Program
82 S HARE R EPURCHASE P ROGRAM Share Repurchase Program – BOD authorized $60M over 2 - year period ( 2015 – 2016 ) Significant Progress Toward Return of Capital Initiative 2/3 of authorization completed in 1/4 of authorized period Share Shares (millions) Value Repurchased Q1-15 18.3$ 1.3 Q2-15 21.7$
Slide 83: Strategic Acquisitions
83 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 84: Recent Organic Growth Initiatives
84 Final Mile Facility: Focusing on products to service growth in Home Delivery business to consumer shipping trends Launch: Q3 2015 R ECENT O RGANIC G ROWTH I NITIATIVES Frankfort Facility: Focusing on Wabash Composite Products that directly benefit from greenhouse gas regulation and leverage Final
Slide 85: A Platform for Future Growth
85 A Solid Foundation for Organic and Strategic Growth Wabash National’s corporate s trategy focused on organic and strategic g rowth coupled with a disciplined capital allocation plan and supported by strong business performance and a solid financial position A P LATFORM FOR F UTURE G ROWTH
Slide 86: Projected Revenue Growth
86 $1,636 $1,863 $2,025 $3,000 - 500 1,000 1,500 2,000 2,500 3,000 2013 2014 2015* 2020 $ - millions $3B of Revenue by 2020 Average Annual Revenue Growth of ~8% to Achieve Strategic Objective P ROJECTED R EVENUE G ROWTH * 2015 Revenue represents consensus estimates
Slide 87: Projected EPS Growth
87 P ROJECTED EPS G ROWTH $0.70 $0.89 $1.30 $2.50 $- $0.50 $1.00 $1.50 $2.00 $2.50 2013 2014 2015* 2020 Earnings Per Share * 2015 EPS represents the mid - point of communicated range Average Annual EPS Growth of ~14% to Achieve Strategic Objective $2.50 of EPS by 2020
Slide 88: The Path to Value Creation
88 Wabash National Transforms into a Diversified Industrial Top Line & Bottom Line Growth • ~8% Rev. CAGR • 10 - 15% EPS CAGR Significant Cash Generation • >$100M FCF in ’15 • >100% Cash Conversion Improved Operating Margins • >10% OM% Improved ROIC • >20% ROIC Industry: WNC Peer Group including: AC
Slide 89: Questions? Thank You
89 Questions? T HANK Y OU Panel Questions And Answers
Slide 90: Appendix
WABASH NATIONAL CORPORATION Appendix
Slide 91: Leading Market Positions
91 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 92: Transportation Sector Outlook
92 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 93: Trailer Sector Outlook
93 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 43,500 40,000 37,500 38,000 40,000 Platform 22,122 25,749 33,300 32,000 27,200 24,000 23,000 Liquid Tanks 8,301 8,656 7,700 7,200 6,700 6,700 7,200
Slide 94: Trailer Demand Drivers
94 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 95: Trailer Demand Drivers - Carrier Operating Environment
95 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 96: Trucking to Remain Dominant Transportation Mode
96 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 97: Industry-Wide Trailer Order-to-Shipment Cycle
97 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 98: Market Demand Drivers
98 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 99: Segment Outlook: Diversified Products
99 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 100: Segment Outlook: Diversified Products
100 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 kilom
Slide 101: Value Proposition
101 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 t
Slide 102: Financial Performance - Adjusted EPS Growth
102 F INANCIAL P ERFORMANCE – A DJUSTED EPS G ROWTH 2011 – 2015 Adjusted EPS CAGR is 75% 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
Slide 103: Key Customers
103 K EY C USTOMERS Large and Diverse Customer Profile Commercial Trailer Products Diversified Products Group
Slide 104: Consolidated End Markets
104 C ONSOLIDATED E ND M ARKETS Note: All information based on 2014 revenues New Markets. New Innovation. New Growth.
Slide 105: Consolidated Income Statement
105 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 Q2 2015 Net sales 337,840$ 640,372$ 1,187,244$ 1,461,854$ 1,635,686$ 1,863,315$ 952,428$ Cost of sales 360,750 612,289 1,120,524 1,298,031 1,420,
Slide 106: Consolidated Balance Sheet
106 C ONSOLIDATED B ALANCE S HEET New Markets. New Innovation. New Growth. ($ in thousands) 2009 2010 2011 2012 2013 2014 Q2 2015 ASSETS Current assets Cash and cash equivalents 1,108$ 21,200$ 19,976$ 81,449$ 113,262$ 146,113$ 139,564$ Accounts receivable 17,081 37,853 52,219 96,590 120,358 135,206
Slide 107: Consolidated Cash Flows
107 C ONSOLIDATED C ASH F LOWS New Markets. New Innovation. New Growth. ($ in thousands) 2009 2010 2011 2012 2013 2014 YTD Q2 2015 Cash flows from operating activities Net (loss) income (101,765)$ (141,760)$ 15,042$ 105,631$ 46,529$ 60,930$ 39,122$ Adjustments to reconcile net (loss) income to net c
Slide 108: Reconciliation of Non-GAAP Measures
108 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 rou
Slide 109: Reconciliation of Non-GAAP Measures
109 R ECONCILIATION OF N ON - GAAP M EASURES ($ in millions) Note: This table reconciles the trailing twelve month net income (loss) for the periods presented above to the non - GAAP measure of Operating EBITDA. Differences may exist in the calculation of Operating EBITDA due to rounding. New Market
Slide 110: Reconciliation of Non-GAAP Measures
110 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 111: Potential Dilutive Impact of Senior Convertible Notes
111 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$ 4,4