Wabash National Corporation · NYSE:WNC
Wabash National — Investor Presentation (February 2016)
49 slides from Wabash National's investor presentation, Feb 9, 2016
Slide 1: Wabash National Corporation Investor Update February 2016
WABASH NATIONAL CORPORATION Investor Update February 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 ▪ Gross Margin 8.3 % 15.0% ▪ Operating Margin 2.4% 8.9% ▪ Earnings up 187% since 2007 ($0.52/sh. to $1.49/sh.) ▪ Strong free cash flow with > 100% cash conversion ▪ TTM ROIC 19.5% ▪ $348M of liquidity or 17% of revenue ▪ 0.6x net leverage ▪ Significant capacity to fund future g rowth W A
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
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 p arts and s ervice capabilities Organic Growth ▪ Proven abilit
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
13 ACT Forecast by Segment 2014 2015 2016 2017 2018 2019 2020 Dry Van 155,909 180,170 167,500 142,000 138,000 145,800 152,000 Refrigerated 38,616 46,483 42,000 37,500 38,000 40,000 43,000 Platform 25,749 30,730 24,500 27,500 26,000 23,000 24,000 Liquid Tanks 8,656 7,499 7,100 6,700 6,800 7,200 7,300
Slide 14: Trailer Demand Drivers
14 T RAILER D EMAND D RIVERS Strong demand above replacement levels Fleet Dynamics and Regulations Driving Trailer D emand 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
Slide 15: Trailer Demand Drivers – Fleet Profitability
15 T RAILER D EMAND D RIVERS Fleet Profitability is Rising ▪ Active truck utilization expected to rise due to regulatory impact ▪ Truckload rates anticipated to increase with capacity utilization ▪ Fleet profitability near 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: Industry-Wide Trailer Order-to-Shipment Cycle
17 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 - 2015 Source: ACT
Slide 18: Segment Outlook: Diversified Products
18 S EGMENT O UTLOOK : D IVERSIFIED P RODUCTS ▪ 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 conta
Slide 19: Segment Outlook: Diversified Products
19 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 20: Segment Outlook: Diversified Products
20 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 21: Long-Term Objectives
WABASH NATIONAL CORPORATION Long - Term Objectives
Slide 22: Value Proposition
22 V ALUE P ROPOSITION New Markets. New Innovation. New Growth. Superior Product ▪ Leading producer of semi - trailers and liquid transportation systems for 15 of the past 22 years* ▪ Long history of innovation with over 200 patents ▪ Customer - focused solutions ▪ Products that revolutionize the tr
Slide 23: 2013 Investor Day Stated Goals
23 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 24: 2020 Goals
24 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 25: Financial Overview
WABASH NATIONAL CORPORATION Financial Overview
Slide 26: Financial Performance
26 $338 $640 $1,187 $1,462 $1,636 $1,863 $2,027 $0 $300 $600 $900 $1,200 $1,500 $1,800 $2,100 12/09 12/10 12/11 12/12 12/13 12/14 12/15 ($ millions) F INANCIAL P ERFORMANCE Trailing Twelve Month (TTM) Revenue FY 2015 Set New Records Across Multiple Metrics ($ millions) Significantly improved financi
Slide 27: Financial Performance – Operating EBITDA and Net Leverage
27 F INANCIAL P ERFORMANCE TTM Operating EBITDA at $230M and Net Leverage of 0.6x 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 ($100) ($50)
Slide 28: Capital Allocation: 2012–2015
28 • $60M shares repurchased in 2015 • $100M approved for repurchase in 2016 - 2017 • $380M of acquisitions with Walker and Beall • Debt Profile: >$125M of debt reduction over past 3 years • $38M committed in 2016 • Total Capital Expenditures: Approx. $74M Organic Growth Investment/ CapEX Debt Reduc
Slide 29: Strategic Acquisitions
29 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 30: Financial Performance – Adjusted EPS Growth 2011–15
30 F INANCIAL P ERFORMANCE – A DJUSTED EPS G ROWTH 2011 – 2015 Adjusted EPS CAGR is 81% 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 31: Appendix
WABASH NATIONAL CORPORATION Appendix
Slide 32: Segment Growth Initiatives
32 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 33: Segment Profile: Commercial Trailer Products
33 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 platf
Slide 34: CTP Organic Growth Initiatives
34 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 35: Long-Term Growth Drivers
35 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 c ustomers through new channels
Slide 36: Segment Profile: Diversified Products
36 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 37: Organizational Structure and Brands
37 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 38: DPG – Business Profiles
38 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 39: DPG – Product Overview
39 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 40: DPG Organic Growth Initiatives
40 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 41: Segment Profile: Retail
41 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 42: Retail Growth Initiatives
42 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 43: Key Customers
43 K EY C USTOMERS Large and Diverse Customer Profile Commercial Trailer Products Diversified Products Group
Slide 44: Consolidated Income Statement
44 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 Net sales 337,840$ 640,372$ 1,187,244$ 1,461,854$ 1,635,686$ 1,863,315$ 2,027,489$ Cost of sales 360,750 612,289 1,120,524 1,298,031 1,420,563 1,
Slide 45: Consolidated Balance Sheet
45 C ONSOLIDATED B ALANCE S HEET New Markets. New Innovation. New Growth. ($ in thousands) 2009 2010 2011 2012 2013 2014 2015 ASSETS Current assets Cash and cash equivalents 1,108$ 21,200$ 19,976$ 81,449$ 113,262$ 146,113$ 178,853$ Accounts receivable 17,081 37,853 52,219 96,590 120,358 135,206 152,
Slide 46: Consolidated Cash Flows
46 C ONSOLIDATED C ASH F LOWS New Markets. New Innovation. New Growth. ($ in thousands) 2009 2010 2011 2012 2013 2014 2015 Cash flows from operating activities Net (loss) income (101,765)$ (141,760)$ 15,042$ 105,631$ 46,529$ 60,930$ 104,289$ Adjustments to reconcile net (loss) income to net cash (us
Slide 47: Reconciliation of Non-GAAP Measures
47 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 48: Reconciliation of Non-GAAP Measures
48 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 presen
Slide 49: Potential Dilutive Impact of Senior Convertible Notes
49 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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