Wabash National Corporation · NYSE:WNC
Wabash National — Investor Day (February 2019)
97 slides from Wabash National's investor day presentation, Feb 28, 2019
Slide 1: Wabash 2019 Investor Day
Wabash 2019 Investor Day February 28 | NYC Wabash 2019 Investor Day 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains certain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements convey the Company’s current expectations or forecasts of future events. All statements contained in this presentation ot
Slide 3: Agenda
Agenda 8:30 am Welcome & Opening Remarks 10:20 am Diversified Products Ryan Reed Kevin Page Director of IR SVP & Group President, Diversified Products Company Overview & Strategy Commercial Trailer Products Brent Yeagy Dustin Smith President & CEO SVP & Group President, Commercial Trailer Products F
Slide 4: Company Overview & Strategy
Company Overview & Strategy Brent Yeagy | President & CEO Wabash 2019 Investor Day 4
Slide 5: Key Messages
Key Messages 1. 2. 3. 4. 5. Passionate, Transforming Best-in-class, Accelerate Leverage Experienced Organization to Technologically Profitable Financial Management Tap into New Innovative Growth with Strength for Team Fostering Ways of Creating Products and Continued Focus Disciplined Cultural Value
Slide 6: Wabash at a Glance
Wabash at a Glance (NYSE: WNC) 1985 Lafayette, IN ~$800M1 ~7,100 12 $2.3B 6.1%2 $78M Founded Headquarters Market-cap Global Employees Manufacturing 2018 Revenue 2018 Operating 2018 FCF Locations Margin 2018 Revenue by Segment by Product 16% Commercial Trailer Products Dry Van Trailers 27% 17% Divers
Slide 7: Portfolio of Diversified Industrial Solutions
Portfolio of Diversified Industrial Solutions COMMERCIAL TRAILER DIVERSIFIED PRODUCTS FINAL MILE $1.5B1 $394M1 $358M1 PRODUCTS (CTP) GROUP (DPG) PRODUCTS (FMP) ▪ Dry and Refrigerated Van Trailers ▪ Tank Trailers and Truck-Mounted Tanks ▪ Truck-Mounted Dry Bodies ▪ Platform Trailers ▪ Composite Panel
Slide 8: We Are Wabash: Core Values
We Are Wabash CORE VALUES of Integrity, Trust and Mutual Respect Best-in-class Continuous Voice of Breakthrough Stakeholder Best-value Products and Improvement Customer Innovation Value Producer Services Culture A Values-Driven Organization Wabash 2019 Investor Day 8
Slide 9: Corporate Social Responsibility | Taking Action for the Greater Good
Corporate Social Responsibility | Taking Action for the Greater Good SAFETY SUSTAINABILITY COMMUNITY #1 Value and Priority ▪ Design innovations that improve fleet ▪ Donate time, needed materials and fuel economy financial resources to support the ▪ Apply innovation to engineer safer communities wher
Slide 10: Our Vision is Engrained in Our Culture
Our Vision is Engrained in Our Culture PEOPLE PURPOSE PERFORMANCE ▪ Safety is our #1 value and priority ▪ Do everything with a clear purpose, ▪ Perform as one team to leverage new including production process changes technology and leading manufacturing ▪ Cultural transformation built on honesty, an
Slide 11: The Wabash Management System
The Wabash Management System (WMS) | Scaling Best-in-Class Performance WABASH MANAGEMENT SYSTEM Our internal and external Our philosophy for human systems, metrics and purposeful capital management includes collaboration used to maintain recruiting, retaining and the highest levels of alignment deve
Slide 12: Proven and Experienced Leadership
Proven and Experienced Leadership with 150+ Years Combined Experience Jeff Taylor Melanie Margolin Kristin Glazner SVP & CFO SVP & General Counsel SVP & CHRO 2012 2018 2010 Brent Yeagy President & CEO Joined: 2003 Kevin Page Mike Pettit Dustin Smith SVP & Group President, SVP & Group President, SVP
Slide 13: Strategic Transformation
Strategic Transformation 2018+ 2011-2017 Leverage innovative culture to optimize our business and pursue 2008-2010 Strategic acquisitions to diversify revenue new technologies streams ▪ New President & CEO 2002-2007 Weather financial downturn and rebuild Brent Yeagy driving cultural transformation w
Slide 14: An Increasingly Diversified Transportation Solutions Provider
An Increasingly Diversified Transportation Solutions Provider OPPORTUNITIES Commercial Trailer Products (CTP) ▪ Advanced materials and light weight applications 2018 Diversified Products Group (DPG) 2015 51% ▪ Transformation for scalable 42% 49% $2.3B platform Non-Dry Non-Dry Dry Van Van $2.0B 58% V
Slide 15: Broadening Exposure to Diverse Transportation Segments
Broadening Exposure to Diverse Transportation Segments FIRST MILE MIDDLE MILE FINAL MILE ▪ Long-haul routes of goods ▪ Products moved into or redistributed ▪ Delivery of goods to home or final among fulfillment centers destination ▪ Driven by freight activity ▪ Driven by strategic positioning of goo
Slide 16: Strategic Diversification from Supreme Acquisition
Strategic Diversification from Supreme Acquisition WNC Strategic M&A Filters Supreme Benefits from Adding Final Mile Products to Our Portfolio Value-added, engineered products and ▪ Accelerating Wabash’s organic growth in the ~$3.5B services manufactured at scale to ✓ final mile equipment market pro
Slide 17: Our Distribution Scale is a Key Competitive Advantage
Our Distribution Scale is a Key Competitive Advantage WABASH NATIONAL NORTH AMERICAN FOOTPRINT Manufacturing Locations Dealer Network Creating Scale, Expanding Addressable Market and Optimizing Footprint Wabash 2019 Investor Day 17
Slide 18: Our Sustainable Competitive Advantages
Our Sustainable Competitive Advantages Industry-leading Innovative Operational Strong Customer Product Portfolio Technology Excellence Relationships ▪ Leverage our 30+ years of ▪ Customer-focused engineered ▪ Emphasizing manufacturing ▪ Built on industry-leading, engineering and mfg. solutions in al
Slide 19: Mega Trends Driving Growth
Mega Trends Driving Growth Energy & Chemical Urbanization, Final Mile & Expansion of Cold Chain & Increased Regulation Production, Storage & Home Delivery Food Equipment (GHG1, ELDs2, Food Safety) Transportation ▪ New and existing designs ▪ New patent-pending ▪ Low cost energy supports ▪ Advanced li
Slide 20: Expanding Our Total Addressable Market
Expanding Our Total Addressable Market Market Size 3-year Industry CAGR1 Commercial Trailer Products ~$7.0B -6% to -8% $14B Total Addressable Diversified Products Group ~$3.2B 2% to 3% Market Final Mile Products ~$3.5B 4% to 6% Evolving to Serve More Diverse Markets 1 Source: Industry reports and Co
Slide 21: Illustrative Business Portfolio Analysis
Illustrative Business Portfolio Analysis¹ High Commercial Trailer Products (CTP) ▪ Strong cash generation ▪ Above market growth driven by technology and improved sales FMP channels Final Mile Products (FMP) Growth ▪ Building cash generation ▪ Strong growth opportunity; early stages of new product de
Slide 22: Strategic Path Forward
Strategic Path Forward both in the Near- and Long-term ▪ Continue innovation leadership INNOVATE ▪ Develop new capabilities and capacity to enable growth ▪ Improve durability and reduce weight with material technologies ▪ Margin enhancement through integration, alignment and shared services activiti
Slide 23: Continuous Pursuit of Breakthrough, Innovative Technology
Continuous Pursuit of Breakthrough, Innovative Technology Our Approach to Innovation Key Focus Areas | Superior Advanced Materials ▪ Leverage deep Cell Core MSC Honeycomb relationships to provide customer- focused engineered solutions ▪ Expanding addressable markets with breakthrough innovation Our
Slide 24: Disciplined and Strategic Profitable Growth
Disciplined and Strategic Profitable Growth Leverage Technology Across Business for Scale and Efficiency to Enable Ability to Penetrate Adjacent Markets Significant Growth and Strategic Opportunities Leveraging Breakthrough Pursue Development Revenue Diversification to Enhance Recurring Advanced Mat
Slide 25: Continuous Focus on Optimization
Continuous Focus on Optimization ▪ Integrate, align and leverage a “One Wabash” business system strategy ▪ Simplification of business systems ▪ Use of digital tools and data for insight, speed & efficiency ▪ Reduction in overall SG&A through Corporate Centers of Excellence Improvement to ▪ Increase
Slide 26: Financial Goals as a More Diversified Transportation Solutions Provider
Financial Goals as a More Diversified Transportation Solutions Provider 2018 FY Results 2021 Goals 2018 – 2021 Assumptions ▪ U.S. annual GDP growth of 2-3% REVENUE $2.27B ~$2.2B ▪ Trailer market to decline mid/high-single digits CAGR ADJUSTED OPERATING ▪ Truck body market to grow mid- MARGIN1 6.1% ~
Slide 27: Key Takeaways
Key Takeaways 1. 2. 3. 4. 5. Passionate, Transforming Best-in-class, Accelerate Leverage Financial Experienced Organization to Technologically Profitable Growth Strength for Management Tap into New Ways Innovative with Continued Disciplined Team Fostering of Creating Value Products and Focus on Grow
Slide 28: Final Mile Video
Final Mile Video Wabash 2019 Investor Day 28
Slide 29: Final Mile Products
Final Mile Products Mike Pettit – SVP & Group President Wabash 2019 Investor Day 29
Slide 30: FMP Key Messages
FMP Key Messages 1. 2. 3. 4. 5. A Leader in Integrating Best Favorable Industry In Early Stages of Continuous Rapidly-evolving Practices and Trends Including Optimization and Improvement Final Mile Space Leveraging Proven Significant e- New Product Mindset as we with Technologies, Business and Sales
Slide 31: Final Mile Products Overview
Final Mile Products Overview DESCRIPTION 2018 FINANCIALS ▪ Technologies, processes and $358M 13.6% $8.7M 2.4% equipment used to Revenue Gross Margin Adj. Operating Income¹ Adj. Operating Margin connect the end customer, now typically represented as the 2018 REVENUE MIX KEY END MARKETS SERVED “Home,”
Slide 32: FMP Products by Class
FMP Products by Class Upfitting & Class 1 Class 2 Class 3 Class 4-5 Class 6-8 ≤ 6,000 lbs. 6,001 – 10,000 lbs. 10,001 – 14,000 lbs. 14,001 – 19,500 lbs. 19,501 – 33,000 lbs. • Refrigerated • Truck Bed Delete • Cutaway and Cab • Cutaway and Cab • Cab Chassis • Cab Chassis Modification Chassis Chassis
Slide 33: Final Mile Market Delivery
Final Mile Market Delivery | The Next Wave of Logistics Change DRY TRUCK BODIES REFRIGERATED TRUCK BODIES UPFITTING PARTS & SERVICES ▪ Adding panel technology to new and ▪ Enhanced Kold King product features ▪ Proximate parts and service location in all existing products: DuraPlate, DuraPlate lightw
Slide 34: Why Final Mile Will Continue to Succeed
Why Final Mile Will Continue to Succeed | Sustainable Competitive Advantages… Innovative Design for Mixed Model and High Breakthrough Panel Manufacturability Velocity Manufacturing Technology …Driven by Continuous Improvement Mindset Wabash 2019 Investor Day 34
Slide 35: Market Drivers: Final Mile Products
Market Drivers: Final Mile Products Demand for parcel delivery vans and dry freight vans is estimated to increase due to growing e-commerce sales, which are projected to grow at 8% to 12% CAGR1 over the next few years All product segments are expected to benefit from growth ▪ Refrigerated/insulated
Slide 36: Megatrends Changing Distribution
Megatrends Changing Distribution ▪ E-commerce in early stages of growth ▪ Year-end backlog up over 20% versus prior-year when normalizing for seasonal variations U.S. E-commerce Retail Sales1 $500,000 10% 9% $400,000 8% 7% $300,000 6% 5% $200,000 4% 3% $100,000 2% 1% $0 0% 2000 2001 2002 2003 2004 2
Slide 37: Record Backlog with Secular and Cyclical Growth
Record Backlog with Secular and Cyclical Growth “E-commerce Set for Global “E-commerce Logistics “Record 2.5B E-commerce “Amazon Says it Delivered Domination – But at Different Market to Rise at 20.6% CAGR Deliveries Were Made this 1 Billion Holiday ‘Items’ for Speeds” Due to Increasing Border Holid
Slide 38: FMP Total Addressable Market
FMP Total Addressable Market Market Size 3-year Industry CAGR1 Dry Truck Bodies ~$1.8B 3% to 4% ~$3.5B Total Addressable Refrigerated Bodies ~$0.5B 4% to 6% Market Upfitting Parts and Services ~$1.2B 7%+ Growth in All FMP End Markets 1 Management estimates, Specialty Transportation, NTEA Wabash 2019
Slide 39: Strategic Path Forward
Strategic Path Forward ▪ Incorporate proven Wabash technologies (Panel Tech and Trailer Designs) INNOVATE ▪ Develop lighter weight delivery vehicles ▪ Utilize WMS for profitable and consistent growth OPTIMIZE ▪ Solving delivery challenges by utilizing proven business and sales processes ▪ Expand pre
Slide 40: Pulling Materials Technology into Truck Body
Pulling Materials Technology into Truck Body DuraPlate Next Gen Material Technologies MSC ▪ Converting big customers to ▪ Transitioning DuraPlate customers ▪ 100th MSC Truck Body sold in DuraPlate to Cell Core January ▪ 23,000 DuraPlate bodies shipped ▪ DuraPlate Honeycomb or GRP by end of 2021 Hone
Slide 41: Optimize FMP
Optimize FMP | Leveraging the Wabash Management System ▪ Operational Excellence ▪ Improve Safety, Quality and Delivery Performance ▪ 25% increase in asset utilization – reduction of manufacturing lines with more output on fewer lines ▪ Velocity ▪ Lead industry in On Time Delivery – bring FMP to Waba
Slide 42: Upfit, Parts & Service
Upfit, Parts & Service Existing Upfit Business Market Growth Potential ▪ 1,200 Cargo vans ▪ $1.2B market that is presently very fragmented Upfitting, ▪ ~35-40% of FMP production gets some level of upfit at Parts & our factories today Service ▪ 7%+ annual growth rate ~$1.2B Dry Truck Bodies ~$1.8B ▪
Slide 43: Refrigerated Product Update
Refrigerated Product Update FMP Refrigerated Units By Year Market Potential 3000 ▪ FSMA requirements are pushing end users to purchase new equipment for compliance 2500 ▪ Grocery/home delivery will ensure growth continues, 2000 both for truck bodies and upfit/insert ▪ Product development and upgrade
Slide 44: Refrigerated Market Growth – Kold King and Cold Chain
Refrigerated Market Growth – Kold King and Cold Chain Successful Legacy Product gets an Upgrade Cold Chain Product Introduction ▪ Improved materials for longer useful life for customers ▪ Eliminates steel substructure removing corrosion concerns ▪ Trailer style header, eliminating major leak and dam
Slide 45: Key Takeaways
Key Takeaways 1. 2. 3. 4. 5. A leader in rapidly- Integrating best Favorable industry In early stages of Continuous evolving Final Mile practices and trends including optimization and improvement space with leveraging proven significant e- new product mindset as we technologies, business and sales c
Slide 46: Q&A Session
Q&A Session Brent Yeagy – President & CEO Mike Pettit – SVP & Group President Wabash 2019 Investor Day 46
Slide 47: Break
Break 10 minutes Wabash 2019 Investor Day 47
Slide 48: Diversified Products
Diversified Products Kevin Page – SVP & Group President Wabash 2019 Investor Day 48
Slide 49: DPG Key Messages
DPG Key Messages 1. 2. 3. 4. 5. Driving Stable and Building on a Long Leading Further Leveraging New Accelerated Growing Markets History of Trusted Product ERP System and Operational Contributing to Brands with Diversification and Corporate Centers Execution for Revenue Gains; Strong Market Differen
Slide 50: Diversified Products Overview
Diversified Products Overview DESCRIPTION 2018 FINANCIALS ▪ Diverse portfolio of products with leading $394M 17.4% $21.9M 5.6% brands and long- Revenue Gross Margin Adj. Operating Income¹ Adj. Operating Margin standing relationships with blue-chip customer base 2018 REVENUE MIX² KEY END MARKETS SERV
Slide 51: Innovative and Wide Array of Product Offerings
Innovative and Wide Array of Product Offerings TANK TRAILERS PROCESS SYSTEMS COMPOSITES ▪ Primarily comprised of chemical and ▪ Primarily comprised of sanitary ▪ Primarily comprised of composite panel food/dairy/beverage trailers equipment serving the food, dairy and technology for transportation so
Slide 52: Why DPG Will Continue to Succeed
Why DPG Will Continue to Succeed | Sustainable Competitive Advantages… Strong brands, deep Technology and customer relationships innovation that delivers Significant opportunity to and leading market unique solutions to optimize cost structure positions in a wide create meaningful and achieve improv
Slide 53: Market Drivers: Trailer Products
Market Drivers: Trailer Products Strong End Market Environments ▪ Chemical and oil markets gaining strength, resulting in a rise in tank trailer production ▪ Growing milk production supports demand for dairy silos, mixers and food-grade tank trailers U.S. Refinery Production1 U.S. Basic Chemicals Pr
Slide 54: DPG Total Addressable Market
DPG Total Addressable Market Market Size 3-year Industry CAGR1 Tank Trailer ~$0.7B -1% to 1% ~$3.2B Total Addressable Process Systems ~$1.5B 2% to 3% Market Composites² ~$1.0B 4% to 8% Stable Growth in Diversified End Markets 1 Source: Management estimates, ACT Research, Markets and Markets; 2 Near-
Slide 55: Strategic Path Forward
Strategic Path Forward ▪ Differentiate with composite material technology INNOVATE ▪ Focusing innovation and design toward broadening Tank Trailer portfolio while enhancing margin increasing features ▪ Invest in operations including process improvement, automation and velocity OPTIMIZE ▪ Business si
Slide 56: Product Development
Product Development Margin Enhancement Market Opportunity ▪ Rationalize non-standard product proliferation ▪ Product portfolio expansion to compete in new market segments ▪ Design for assembly, material cost and weight optimization Stainless – General Chemical Stainless – 3A Sanitary/Food Grade Refi
Slide 57: Technology Development
Technology Development Composites Provide Compelling Advantages Over Traditional Materials DPG SOLUTIONS ✓ DuraPlate for high durability ✓ DuraPlate Cell Core for lighter DuraPlate weight panel with durability Sheet & Post Steel Plywood ✓ Honeycomb solutions for Customer Requirements for Lower Total
Slide 58: Optimize DPG
Optimize DPG | Leveraging the Wabash Management System ▪ Operational Excellence ▪ Increased product standardization resulting in a decrease in product variation and an increase in manufacturing velocity ▪ Driving Overall Equipment Effectiveness for all business units focused on scrap reduction, chan
Slide 59: Key Takeaways
Key Takeaways 1. 2. 3. 4. 5. Driving accelerated Stable and growing Building on a long Leading further Leveraging new operational markets history of trusted product ERP system and execution for contributing to brands with strong diversification and corporate centers margin expansion revenue gains; m
Slide 60: Commercial Trailer Products
Commercial Trailer Products Dustin Smith – SVP & Group President Wabash 2019 Investor Day 60
Slide 61: CTP Key Messages
CTP Key Messages 1. 2. 3. 4. 5. Leading Brands Product Larger and More Strong Focused on due to Long Superiority with Advanced Sales Operational Driving Above History of Breakthrough Channel to Foundation with Market Growth Innovation and Technologies; Leverage a Leadership in All Product Long-stand
Slide 62: Commercial Trailer Products Overview
Commercial Trailer Products Overview DESCRIPTION 2018 FINANCIALS ▪ Leading brands and long-standing customer $1,537M 11.0% $142M 9.2% relationships Revenue Gross Margin Operating Income Operating Margin ▪ Industry leader in van and platform trailer 2018 REVENUE MIX KEY END MARKETS SERVED manufacturi
Slide 63: Commercial Trailer Products Overview
Commercial Trailer Products Overview DRY VANS REFRIGERATED VANS PLATFORMS ▪ #1 or #2 OEM 25 out of last 30 years ▪ Respected product offering in a stable ▪ Diverse offerings in both steel and segment aluminum segments ▪ Birthplace of DuraPlate, revolutionizing the dry van industry ▪ Improved sales c
Slide 64: Why CTP Will Continue to Succeed
Why CTP Will Continue to Succeed | Sustainable Competitive Advantages… Continued Breakthrough Strong leadership team strengthening of dealer technologies; with talent in all levels channel that increases introduction of of management drives our reach and Molded Structural customer confidence diversi
Slide 65: Market Drivers: Trailer Products
Market Drivers: Trailer Products Trailer Demand Forecasts ▪ Strong demand above replacement levels forecast for next 4 years ▪ Fleet equipment dynamics and regulations key drivers of trailer demand U.S. Trailer Production Forecasts U.S. Trailer Production1 Total Trailers: Population & Average Age1 3
Slide 66: CTP Total Addressable Market
CTP Total Addressable Market Market Size 3-year Industry CAGR1 Dry Vans ~$4.5B -6% to -8% $7.0B Refrigerated Vans ~$1.4B -4% to -6% Total Addressable Market Platforms ~$1.0B -12% to -14% All Other (Converter Gear) ~$0.1B -3% to -5% Focused on Opportunities for Market Share Gains Driven by Technology
Slide 67: Strategic Path Forward
Strategic Path Forward ▪ Commercialization of advanced materials and lightweight INNOVATE applications drive breakthrough customer value ▪ Optimization of sales channel enhances customer mix and improves geographical coverage OPTIMIZE ▪ High quality management team drives customer experience ▪ Optim
Slide 68: Legacy of Industry Leadership in Value-Added Innovation
Legacy of Industry Leadership in Value-Added Innovation Aluminum Plate Trailer DuraPlate® HD Bonded Sidewall Dry Van MSC Refrigerated Truck Body ▪ WNC leading industry ▪ High Performance ▪ Fewer lead points ▪ Lighter producer ▪ Extremely durable ▪ Smooth exterior ▪ Better thermal efficiency ▪ Wide,
Slide 69: In Early Stages of MSC Opportunity
In Early Stages of MSC Opportunity Significant Barriers to Entry Are Being Established Proprietary Technology → Protected Designs → Patented Processes → Realized Product 5+ Patent Issued 10+ Patent Prisma Beams MSC Panels MSC Assemblies MSC Refrigerated Van Applications Substantial Ramp in < 30 mont
Slide 70: Optimize CTP
Optimize CTP | Leveraging the Wabash Management System ▪ People/Management ▪ Strong leadership team with diversity of experience and high quality reputations in the industry ▪ In an mature industry, we have a strong pipeline of diverse talent for future leadership positions ▪ The management team str
Slide 71: Sales Channel Optimization
Sales Channel Optimization 2013 2018 Dealer Sales Upgrading Underserved Regions with High Quality Partners Wabash 2019 Investor Day 71
Slide 72: Organic Growth Initiatives – Points of Impact
Organic Growth Initiatives – Points of Impact Dry Van Refrigerated Van Platforms $4.5B $1.4B Key $1.0B Focus Areas +50% +50% $1.2B $140M $100M Significant Levers to Capture Opportunity ✓ Advanced Materials and Light Weight ✓ Sales Channel Optimization ✓ Strong Management Team TAM WNC Today WNC 2021
Slide 73: Key Takeaways
Key Takeaways 1. 2. 3. 4. 5. Leading brands Product Larger and more Strong Focused on due to long superiority with advanced sales operational driving above history of breakthrough channel to foundation with market growth in innovation and technologies; leverage product a leadership all product long-
Slide 74: Financial Overview
Financial Overview Jeff Taylor – SVP & CFO Wabash 2019 Investor Day 74
Slide 75: Finance Key Messages
Finance Key Messages 1. 2. 3. 4. 5. Strong Earnings Driving Margin Disciplined Focused on Well Positioned and Cash Expansion and Balance Sheet Profitable with Financial Generation Operating Management Growth with Strength to be Profile Leverage and Balanced Recurring and Actionable Capital Diversifi
Slide 76: Historical Financial Performance
Historical Financial Performance $2,267 $2,028 $1,863 $1,845 $1,767 $1,636 $1,462 $1,214 $1,312 $1,187 Annual $1,041 $1,103 $836 $640 Revenue ($M) $338 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 $204 $182 $146 $137 $122 $103 Annual Adjusted $69 $80 $85 $38 $27 $20 Ope
Slide 77: Cash Flow Profile
Cash Flow Profile ▪ Improvement in the base FCF ($M) & FCF Conversion1 (%) business through productivity improvement $18 0 400 % and operational excellence $16 0 $158 350 % is driving higher cash flow $14 0 300 % $118 ▪ Walker and Supreme $12 0 $111 250 % acquisitions driving higher $10 0 levels of
Slide 78: Disciplined Balance Sheet Management
Disciplined Balance Sheet Management Strong Balance Sheet Liquidity¹ ($M) Net Debt to Operating EBITDA ▪ Cash balance of $133M at 12/31/2018 $361 3.2x $348 $333 ▪ Untapped ABL Credit Facility: $290 $300 ▪ $175M Facility $254 ▪ Increased expansion feature to $100M 2.1x $224 1.9x 1.9x ▪ Extended term
Slide 79: Capital Allocation History
Capital Allocation – 4 Year History $567M Cash Flow from Operations $101M $232M $323M $260M $33M Capital Expenditures Debt Repayments M&A Share Repurchases Dividends Building a Strong Capital Allocation Track Record Wabash 2019 Investor Day 79
Slide 80: Balanced Capital Allocation Strategy
Balanced Capital Allocation Strategy LIQUIDITY Managing the business for the long-term DEBT Target net debt leverage of 1.0x to 3.0x MANAGEMENT Focus on debt reduction and lowering net debt leverage to ~1.0x in 24-36 months1 REINVEST FOR Capital expenditures / R&D to support organic growth and comme
Slide 81: 2021 Revenue Growth Scenarios
2021 Revenue Growth Scenarios 2021 Sensitivity Analysis 2018 Results 10% Revenue Decline Flat Revenue 10% Revenue Growth Revenue $2.3B $2.1B $2.3B $2.5B Operating Margin 6.1% ~6-7% >8% ~9-10% Net Debt Leverage1 2.1x ~1.4x ~1.0x ~0.8x 1 Assumes ~$30-$50M of annual voluntary debt payment Wabash 2019 I
Slide 82: Financial Goals as a More Diversified Transportation Solutions Provider
Financial Goals as a More Diversified Transportation Solutions Provider 2018 FY Results 2021 Goals 2018 – 2021 Assumptions ▪ U.S. annual GDP growth of 2-3% REVENUE $2.27B ~$2.2B ▪ Trailer market to decline mid/high-single digits CAGR ADJUSTED OPERATING ▪ Truck body market to grow mid- MARGIN1 6.1% ~
Slide 83: Key Takeaways
Key Takeaways 1. 2. 3. 4. 5. Strong Earnings Driving Margin Disciplined Focused on Well Positioned and Cash Expansion and Balance Sheet Profitable with Financial Generation Operating Management and Growth with Strength to be Profile Leverage Balanced Capital Recurring and Actionable Allocation Diver
Slide 84: Closing Remarks
Closing Remarks Brent Yeagy | Chief Executive Officer Wabash 2019 Investor Day 84
Slide 85: Wabash Investment Summary
Wabash Investment Summary WABASH MANAGEMENT SYSTEM TO SCALE BEST-IN-CLASS PERFORMANCE Alignment of Our Strategy with Passionate, Experienced Long-term Shareholder Management Team Fostering Value Creation Cultural Transformation Build upon Resilient Transforming Organization to Tap Financial Profile
Slide 86: Q&A Session
Q&A Session All Presenters Wabash 2019 Investor Day 86
Slide 87: Appendix
Appendix Wabash 2019 Investor Day 87
Slide 88: Reconciliation of Adjusted Consolidated Operating Income
Reconciliation of Adjusted Consolidated Operating Income Unaudited ($M) 2008 2012 2013 2014 2015 2016 2017 2018 Income from Operations $ (103.8) $ 70.5 $ 103.2 $ 122.4 $ 180.4 $ 202.5 $ 130.8 $ 111.0 Adjustments: Impairment 66.3 - - - 1.1 1.7 - 25.0 Acquisition expenses and related charges - 14.4 -
Slide 89: Reconciliation of Adjusted Segment Operating Income
Reconciliation of Adjusted Segment Operating Income Unaudited – ($000s) Wabash 2019 Investor Day 89
Slide 90: Reconciliation of Adjusted Diluted Earnings Per Share
Reconciliation of Adjusted Diluted Earnings Per Share Unaudited – dollars per share Wabash 2019 Investor Day 90
Slide 91: Reconciliation of Operating EBITDA
Reconciliation of Operating EBITDA Twelve Months Ended December 31, Unaudited ($M) 2011 2012 2013 2014 2015 2016 2017 2018 Net income $ 15.0 $ 105.6 $ 46.5 $ 60.9 $ 104.3 $ 119.4 $ 111.4 $ 69.4 Income tax (benefit) expense 0.2 (57.1) 31.1 37.5 59.0 66.0 11.1 26.6 Interest expense 4.1 21.7 26.3 22.2
Slide 92: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow Unaudited ($M) 2014 2015 2016 2017 2018 Net cash provided by operating activities $ 92.6 $ 131.8 $ 178.8 $ 144.4 $ 112.5 Capital expenditures 20.0 20.8 20.3 26.1 34.0 Free cash flow $ 72.6 $ 111.0 $ 158.5 $ 118.3 $ 78.5 Free cash flow $ 72.6 $ 111.0 $ 158.5 $ 118.3 $
Slide 93: Brent Yeagy
Brent Yeagy | President & CEO Brent L. Yeagy is an industrial manufacturing leader with more than 20 years of experience in the automotive and commercial transportation industries. Since June 2018, Mr. Yeagy has been responsible for the strategic direction and operations of Wabash National in his ro
Slide 94: Jeff Taylor
Jeff Taylor | CFO & Senior Vice President Jeff Taylor was appointed to Senior Vice President and Chief Financial Officer on January 1, 2014. He joined Wabash National in July 2012 as Vice President of Finance and Investor Relations. Prior to Wabash National, Mr. Taylor served as Vice President, Fina
Slide 95: Dustin Smith
Dustin Smith | SVP & Group President, Commercial Trailer Products Dustin Smith was appointed to Senior Vice President and Group President, Commercial Trailer Products on October 1, 2017. Most recently he served as Senior Vice President and General Manager, Commercial Trailer Products. Mr. Smith join
Slide 96: Kevin Page
Kevin Page | SVP & Group President, Diversified Products Kevin Page was appointed to Senior Vice President and Group President, Diversified Products on October 1, 2017. Mr. Page joined Wabash National in February 2017 as Vice President and General Manager, Final Mile and Distributed Services. Prior
Slide 97: Mike Pettit
Mike Pettit | SVP & Group President, Final Mile Products Mike Pettit was appointed to Senior Vice President and Group President, Final Mile Products on January 1, 2018. He previously served as Vice President of Finance and Investor Relations since 2014. He joined Wabash National in 2012 as Director