Wabash National Corporation · NYSE:WNC
Wabash National — Investor Presentation (September 2016)
38 slides from Wabash National's investor presentation, Sep 1, 2016
Slide 1: Wabash National Corporation Investor Update September 2016
WABASH NATIONAL CORPORATION Investor Update September 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
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 23.8 % as of 6/30/2016 ▪ $ 357M of liquidity or 18% of revenue as of 6/30/2016 ▪ 0.4x net leverage as of 6/30/2016 ▪ Signi
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: Growth Initiatives Driving Record Results: Diversification
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 - 62,000 Units Revenue $2.03B Flattish to down slightly GM% 15.0% No Guidance OM% 8.9% No Guidance SGA% 5.0% ~5.5% CapEx $21M $25 - 30M Tax Rate 36.1% ~36% Adjusted EPS $1.49 $1.80 - 1.90 WNC Poised for Another
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 Growth $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 Asset
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: Mergers & Acquisitions
18 M ERGERS & A CQUISITIONS ▪ Tank Trailers ▪ Process Systems ▪ Aviation & Truck Equipment Transformative Acquisition (2012) Platform Expanding Acquisition (2013) ▪ Aluminum 406 ▪ Dry Bulk Tanks Prior Acquisitions Strategic M&A Criteria Growth Through Acquisition Remains a Strategic Component Value
Slide 19: Market Dynamics
WABASH NATIONAL CORPORATION Market Dynamics
Slide 20: Trailer Demand Drivers
20 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 21: Market Drivers: Trailer Products
21 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 A bove R eplacement L evels
Slide 22: Market Drivers: Trailer Products
22 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 23: Market Drivers: Diversified Products
23 M ARKET D RIVERS : D IVERSIFIED P RODUCTS ▪ Worldwide pharmaceutical R&D spend to grow 2.0% (CAGR) to $ 160B in 2020 ▪ Growing milk production supports demand for dairy silos, mixers and food - grade tank trailers Strong Pharma & Dairy Environment DPG Markets Forecasting Growth
Slide 24: Market Drivers: Diversified Products
24 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 25: Financial Overview
WABASH NATIONAL CORPORATION Financial Overview
Slide 26: Financial Performance
26 F INANCIAL P ERFORMANCE Trailing Twelve Month (TTM) Revenue Significantly improved results : ▪ TTM revenue ~ $ 2.0B, up approximately $800M since 2011 ▪ TTM Operating Income increases $198M since 2011 ▪ WNC Gross Margin levels reach 17.3% on TTM basis TTM Operating Income and Gross Margin $1,187
Slide 27: Financial Performance: Net Leverage Ratio
27 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 leverage TTM Operating EBITDA (1) Liquidity (2) 2 Defined as cash on hand plus available borrowing capacity o
Slide 28: Historical Financial Performance: Comparing Cyclical Upturns
28 $169 $230 $269 9.1% 11.3% 13.5% 0% 5% 10% 15% 2014 2015 Q2 2016 (TTM) Operating EBITDA Margin (%) 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 -
Slide 29: Historical Financial Performance: Comparing Cyclical Upturns
29 H ISTORICAL F INANCIAL P ERFORMANCE : C OMPARING C YCLICAL U PTURNS ‘05 - ’06 Upturn *Source: ACT $617 $583 $578 12.5% 19.5% 23.8% 0% 5% 10% 15% 20% 25% 2014 2015 Q2 2016 ROIC (%) $312 $386 16.2% 3.7% $0 $100 $200 $300 $400 $500 $600 $700 2005 2006 Invested Capital ($ mils) Industry Volumes * ‘14
Slide 30: Capital Allocation Strategy
30 C APITAL A LLOCATION S TRATEGY • Maintain liquidity to support the core business and fund growth opportunities across business cycle Liquidity • Target net debt to maintain credit rating (BB) throughout economic cycle and position for next credit rating upgrade • Manage net debt to <3x EBITDA at
Slide 31: Financial Performance: Adjusted EPS Growth
31 F INANCIAL P ERFORMANCE – A DJUSTED EPS G ROWTH ▪ 2016: Sixth straight year of Adjusted EPS growth ▪ 2011 – 2016 Adjusted EPS CAGR is 68% $0.14 $0.57 $0.70 $0.89 $1.49 $1.85 22.8% 27.1% 67.4% 24.2% $- $0.25 $0.50 $0.75 $1.00 $1.25 $1.50 $1.75 $2.00 2011ᵃ 2012ᵇ 2013 2014 2015 2016F ᶜ Adjusted EPS
Slide 32: Appendix
WABASH NATIONAL CORPORATION Appendix
Slide 33: Consolidated Income Statement
33 C ONSOLIDATED I NCOME S TATEMENT ($ in thousands, except per share amounts) 2011 2012 2013 2014 2015 YTD Q2 2016 Net sales 1,187,244$ 1,461,854$ 1,635,686$ 1,863,315$ 2,027,489$ 919,117$ Cost of sales 1,120,524 1,298,031 1,420,563 1,630,681 1,724,046 748,527 Gross profit 66,720$ 163,823$ 215,123$
Slide 34: Consolidated Balance Sheet
34 C ONSOLIDATED B ALANCE S HEET ($ in thousands) 2011 2012 2013 2014 2015 Q2 2016 ASSETS Current assets Cash and cash equivalents 19,976$ 81,449$ 113,262$ 146,113$ 178,853$ 187,600$ Accounts receivable 52,219 96,590 120,358 135,206 152,824 131,951 Inventories 189,533 189,487 184,173 177,144 166,982
Slide 35: Consolidated Cash Flows
35 C ONSOLIDATED C ASH F LOWS ($ in thousands) 2011 2012 2013 2014 2015 YTD Q2 2016 Cash flows from operating activities Net (loss) income 15,042$ 105,631$ 46,529$ 60,930$ 104,289$ 63,055$ Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities Depreciation
Slide 36: Reconciliation of Non-GAAP Measures
36 R ECONCILIATION OF N ON - GAAP M EASURES ($ 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 rounding. 2005 2006 2011 2012 2013 2014 2015
Slide 37: Reconciliation of Non-GAAP Measures
37 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 asso cia ted with the three West Coast Retail branches in 2015 $ Per Share $ Per Share $ Per Share $ Per Share $ Per Share Net Incom
Slide 38: Potential Dilutive Impact of Senior Convertible Notes
38 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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