Wabash National Corporation · NYSE:WNC
Wabash National — Investor Day (March 2008)
67 slides from Wabash National's investor day presentation, Mar 26, 2008
Slide 1: 2008 Analyst Day
2008 Analyst Day March 26, 2008 Dick Giromini President and Chief Executive Officer
Slide 2: NextSteps
NextSteps WABASH NATIONAL
Slide 3: Presenters
Presenters Dick Giromini - President and Chief Executive Officer Joe Zachman - Sr. Vice President and Chief Operating Officer Steve Miller - Vice President - Supply Chain Management Rod Ehrlich - Sr. Vice President - Chief Technology Officer Rob Hancock - Vice President - Product Engineering Jamie S
Slide 4: 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 5: Investment Highlights
Investment Highlights Market leader: #1 position in North American trailer market Superb brand recognition: Supported by diverse, long-standing customer relationships Innovation leader: Best-in-class technology (e.g., DuraPlate(r)) New leadership: Strong management team & Continuous Improvement (CI)
Slide 6: Company At-A-Glance
Company At-A-Glance Key Facts: Founded as a start-up in 1985 IPO in 1991 - NYSE: WNC Headquartered in Lafayette, IN 3,100 employees 2007 sales of $1.1B 2007 trailer production of ~ 46,500 units #1 North American Designer, Manufacturer and Marketer of Truck Trailers and Related Transportation Equipme
Slide 7: WNC Product Offering
DuraPlate(r) Pups Arctic Lite(r) Vans Transcraft (r) Flatbeds DuraPlate HD(r) Dry Vans RoadRailer(r) DuraPlate(r) Dry Vans WNC Product Offering FreightPro(r) Dry Vans Dry Vans Refrigerated Doubles Vans Intermodal Platforms
Slide 8: Strategic Plan
Strategic Plan NextSteps WABASH NATIONAL
Slide 9: Sustainable Value Creation - Our Purpose
Sustainable Value Creation - Our Purpose Productivity & People Technology & Innovation Differentiation & Customer Value Value Creation
Slide 10: Key Elements of the Plan
Key Elements of the Plan Increase Diversification Improve Operational Excellence Capture Additional Growth Opportunities Reduce Cyclicality Improve Profitability Drive Higher Growth Goal: Transform Wabash National into a diversified industrial manufacturer and service provider by leveraging core com
Slide 11: Strategic Pyramid
Strategic Pyramid Executable Initiatives Tactical Actions Value Creation Innovation Customer Focus People Corporate Growth Operational Excellence
Slide 12: Strategic Pyramid - Executable Initiatives
Develop New Non-core Business Opportunities Develop Global Joint Ventures/ Alliances Make Strategic Acquisitions Optimize Manufacturing Costs Accelerate Strategic Sourcing Initiative Optimize Inventory Mgmt. Create Purchasing Consortium Expand Customer Base Leverage the WNC Brand. Optimize and Grow
Slide 13: Operational Excellence
Operational Excellence Optimize Manufacturing Process Southern Plant Lafayette Transformation Strategic Sourcing Purchasing Consortium Inventory Optimization Offset the impact of rising raw materials prices Reduce capital allocation to inventory management Lower materials costs through greater purch
Slide 14: People
People Succession Planning Leadership Development Associate Development Bench Strength Plan for future growth Identify future leaders Develop leadership skills Corporate citizenship and involvement Identify, develop, hire and retain talent Enhance skills and knowledge Community involvement and suppo
Slide 15: People - A Focus on Safety
People A Focus on Safety - Our number one value and number one priority Record-setting performance each year Industry-leading workplace organization and housekeeping A Focus on Development - Preparing for the future Associate Development Leadership Development Executive Development Technical Excelle
Slide 16: Industry and Community Leadership
Industry and Community Leadership 2004 U.S. Senate Productivity Award United Way Best Practices Award 2005 AME Manufacturing Excellence Award ISO 14001 Registration United Way Best Overall Campaign Customer of the Year - The Wabash Center 2006 Industry Week "50 Best" Manufacturing Companies 2007 Uni
Slide 17: People Really Do Matter at WNC
People Really Do Matter at WNC
Slide 18: Customer Focus
Customer Focus Expand the Customer Base Leverage the Brand Optimize Sales Channels Continue to grow mid-market presence Extend product line Bundle products and services Increase distribution footprint Improve sales force productivity
Slide 19: Innovation
Innovation Next Gen Dry Van Lighter, stronger, lower cost to produce Globally competitive Next Gen Reefer Fuel Savings Technology Lighter, stronger, lower cost to produce Globally competitive Improved fuel efficiency Enhanced aerodynamics
Slide 20: Next Generation Dry Van and Refrigerated Trailers
Capture Additional Growth Opportunities Innovation Develop next generation dry van and refrigerated trailers Dry Van Trailer Potential Designs: Bonded sidewalls Thermoplastic roof Lightweight sidewall core Higher load-rated HD concept Improved fuel efficiency Targeted introduction in 2012 Refrigerat
Slide 21: Corporate Growth
Corporate Growth Non-core Business Development DuraPlate(r) Products Group CI Services RoadRailer Global Licensing Joint Ventures & Alliances Strategic Acquisitions Contract manufacturing Collaborative sales alliances Global alliances/JVs Complementary products and services Focus on shareholder valu
Slide 22: Corporate Growth - Alcoa Relationship
Corporate Growth Relationship allows WNC to: Sell composite technology into all markets (excluding building cladding applications) Market Alcoa's Aluplate aluminum product Other opportunities to further include technology sharing DuraPlate Products Group Expand into new markets with Alcoa relationsh
Slide 23: Corporate Growth - Global Expansion and Acquisitions
Corporate Growth Opportunities for global expansion Diversify into non-cyclical / counter cyclical markets Industries targeted: Aftermarket parts Aluminum flatbeds Trailer refurbishment Benefits: Gain access to new customers Cost savings (e.g., overhead, marketing) Acquisitions Expand presence in th
Slide 24: Operational Excellence
Operational Excellence Joe Zachman, SVP and Chief Operating Officer
Slide 25: Enhance Manufacturing Process
Operational Excellence Enhance Manufacturing Process Lower manufacturing cost and strengthen competitive position New Southern Plant Start date: TBD State-of-the-art production facility in Franklin, Kentucky 300,000 square foot facility DuraPlate and FreightPro assembly Full capacity within approxim
Slide 26: Southern Plant Project
Southern Plant Project Establish a strategically located, cost-leading, state-of-the-art manufacturing facility in Kentucky Reduce shipping costs for large customer base in the area Provide manufacturing capabilities in closer proximity to new customers Create opportunities to expand capacity at a l
Slide 27: Project Risk Management
Project Risk Management Risk Mitigation High degree of confidence in Project's success Construction will commence as leading market indicators dictate Retain start date flexibility to manage macro-economic risks No line design compromises caused by existing infrastructure limitations Building design
Slide 28: Southern Plant Relative Timeline
Southern Plant Relative Timeline Site Prep Bldg Construction Equipment Installation Workforce Development Pre-Production Launch Production ramp to rate Equipment Refurb, Design, and Build Start 3 6 9 12 15 18 21 24 Months
Slide 29: Lafayette Transformation
Lafayette Transformation Streamline production processes and improve manufacturing efficiency Optimize existing line configurations Drive margin improvement Improve material handling processes Consolidate dislocated warehouse facilities Reduce labor dependency in tight Lafayette market Create additi
Slide 30: Lafayette Operations Transformation
Lafayette Operations Transformation Q2 2008 Q3 2008 Q4 2008 Pup Line Consolidation DuraPlate Line Consolidation Freight Pro Consolidation Removal of lines Q2 2009 Q1 2009 Warehouse Consolidation
Slide 31: Lafayette North Campus - Current State
Controlled Storage Production Line Lafayette South Campus Lafayette North Campus - Current State DCO 3
Slide 32: Lafayette North Campus - Future Layout
Shipping Consolidated Warehouse Production Line Lafayette South Campus Lafayette North Campus - Future Layout DCO 3
Slide 33: Lafayette North Campus - Future Layout
Lafayette North Campus - Future Layout Shipping Space Made Available Consolidated Warehouse Production Line Lafayette South Campus Over 190,000 square feet of space under roof made available for other opportunities. DCO 3
Slide 34: Operational Excellence - Supply Chain Management
Operational Excellence Steve Miller, VP - Supply Chain Management
Slide 35: Supply Chain
Supply Chain Supply Chain Management Inbound Transportation Materials Management Purchasing Strategic Sourcing Key Focus: Strategic suppliers devoted to lowest total supply chain cost: Superior value (lower cost over life of product) Higher quality products Reliable delivery and services Leverage in
Slide 36: Spend Breakdown
Spend Breakdown 2007 Spend Profile
Slide 37: Total Cost of Ownership
Total Cost of Ownership Wabash National Supplier Supplier's Supplier Customer Customer's Customer Greater control of pricing scheme Eliminates middle layer of costs (i.e., mark-ups) Increases WNC value proposition to customers Old WNC Model New WNC Model Purchase Pay Lowers total cost of ownership:
Slide 38: Key Supply Chain Initiatives
Subject Matter Expertise Current State Assessment Commodity Management Contracts Admin/Management Procurement Cards ERP Process Utilization Supply Base Collaboration Transportation & Logistics Supply Chain Strategy Training, Education, & Mentoring Key Supply Chain Initiatives Secondary Initiatives:
Slide 39: Inventory Management
Inventory Management Accomplishments: Warehouse consolidation (15 to 10) Improved ERP utilization $30M inventory reduction in 2007 Notable improvement in inventory turns Storage Off Site MFG Transcraft WWP Total PLAN 12/1/2006 30.7 4.4 11.2 4.5 7.3 58.1 59 1/1/2007 31 5.3 12 4.3 7.7 60.3 58 2/1/2007
Slide 40: Strategic Sourcing
Strategic Sourcing Continually improve purchasing activities Develop new suppliers, with focus internationally Emphasis in Asia Build low-cost global sourcing platform Currently 5% of materials are purchased internationally Goal is to move 20% of parts and components to low cost countries (LCC) Area
Slide 41: Low Cost Country Sourcing
Low Cost Country Sourcing Asia Strategy Gain access to Asian market through strategic intermediary TOCA Enterprises: Previous supplier of castings to WNC Wabash's presence "on the ground" in Asia Three year LTA signed (12/06) for LCC sourcing Key Benefits: Strong relationships with Asian manufacture
Slide 42: Purchasing Consortium
Wabash National Truck Body Cargo Vans Specialty Trailer Mfg. Aftermarket Parts Key Participants: Purchasing Consortium Participative Consortium (WNC as Principal) Established five consortium members Administered and maintained by WNC with deminimis costs Leverage similar purchasing requirements Appr
Slide 43: Purchasing Consortium Launch
Purchasing Consortium Launch purchase consortium in 2Q'08 Un-tap significant cost savings opportunities Target 3% annual savings on $350M in spend initially Additional cost savings opportunities as consortium matures Next Steps: WNC Savings: Approximately $1M in 2008 and $5M in 2009
Slide 44: Innovation
Innovation Rod Ehrlich, SVP and Chief Technology Officer Rob Hancock, VP - Product Engineering
Slide 45: Innovations Introduced at Mid-America Trucking Show
Capture Additional Growth Opportunities Innovation Introduced at the Mid-America Trucking Show (MATS), Louisville, KY Wabash National 4.0 Electrical System TrustLock Plus Bonding Technologies: Sidewalls and Logistics Skylights and D-Rings DuraPlate Arched Roof New DuraPlate HD Fuel Efficiency/Saving
Slide 46: Electrical Innovation
Capture Additional Growth Opportunities Electrical Innovation Wabash 4.0 Electrical System Standardized LED systems utilizing new lighting manufacturing technology Improve reliability (electronic circuit protection) Reduce cost of ownership Eliminate known failure modes Use industry proven connector
Slide 47: Door Locking Innovation
Capture Additional Growth Opportunities Door Locking Innovation TrustLock Plus Door Locking System TrustLock Plus significantly outperforms the conventional two-lock per door system Improve ease of use (ergonomic closing mechanism) Reduce weight Reduce cost of ownership Improve security Improve seal
Slide 48: Bonding Innovation - Sidewalls and Logistics
Capture Additional Growth Opportunities Bonding Innovation Bonding Technologies - Sidewalls and Logistics (Support Beams and Ties) Improve appearance (decal) Simplify repairs Reduce leaks Improve thermal insulation Increase standardization Simplify manufacturing process Producible on all manufacturi
Slide 49: Bonding Innovation - Skylight and D-Ring
Capture Additional Growth Opportunities Bonding Innovation Bonding Technologies - Skylight and D- Ring Improve appearance (decal) Simplify repairs Reduce leaks Bonded D-Ring Previous Skylight Bonded Skylight Old D-Ring Key Customer Benefits: Available in 2Q08, process simplification and replaces tra
Slide 50: DuraPlate Innovation
Capture Additional Growth Opportunities DuraPlate Innovation New DuraPlate HD Widest interior available (101.5") Increase standardization Improve floor rating Provide interior forklift protection Enhance durability Expand to Mexican market Available in 2Q09, product refinement and market expansion K
Slide 51: Roofing Innovation
Capture Additional Growth Opportunities Roofing Innovation DuraPlate Arched Roof Improve damage resistance Reduce weight (liners) Extend interior height Improve roof performance Reduce warranty Key Customer Benefits: Available in 2Q09, high potential for automotive standard
Slide 52: Energy Innovation
Capture Additional Growth Opportunities Energy Innovation Fuel Efficiency/Savings Initiative EPA Smartway certified - practical solutions to improve fuel efficiency Improve fuel efficiency Weight reduction through components Reduce drag Reduce transportation costs Provide manufacturing integrated so
Slide 53: DuraPlate Products Group
DuraPlate(r) Products Group Jamie Scarcelli, Vice President DuraPlate Products Group
Slide 54: DuraPlate Composite Panels
DuraPlate Composite Panels High density polyethylene (HDPE) core bonded between two sheets of high-strength steel. Composite panel is extremely strong, lightweight, and damage resistant. Composite characteristics allow it to flex and absorb impact which helps reduce damage. Pre-coated galvanized ste
Slide 55: Corporate Growth Initiative - DuraPlate
Corporate Growth Initiative - DuraPlate Non-Core Business Development Leverage materials and skills into business opportunities in addition to selling trailers Grow DuraPlate product sales Find and develop new business opportunities to diversify and grow the company Diversification into new markets
Slide 56: DuraPlate Products Business Plan
DuraPlate(r) Products Business Plan Keys to Success: Focus - Dedicated group, with ability to develop and drive new business opportunities Authority - Clearly defined responsibilities, with authority to make decisions necessary to drive the business Service - Consistent delivery, with strong custome
Slide 57: Current DuraPlate Products Markets
Current DuraPlate(r) Products Markets Utility Truck Bodies/Cargo Trailers Expanding relationship with Utilimaster Developing opportunities with other truck body OEMs Working on Cargo Trailer OEM segment Utilimaster DuraPlate(r) Truck Body Morgan DuraPlate(r) Refrigerated Truck Body Concept Wells Car
Slide 58: Portable Storage Containers Opportunity
Portable Storage Containers Opportunity Portable Containers Industry Concept of residential portable storage containers introduced in 1998 Storage containers delivered directly to customer, packed at their leisure, and then picked up and moved across town, country, or to a local storage facility Cur
Slide 59: DuraPlate Products Group Business Opportunities
Innovation and technical expertise has been the foundation for Wabash National's success, from custom design engineering services to manufacturing Focused on becoming a full-service solutions partner (not just a supplier) of customized lightweight composite panels Just a sampling of the business opp
Slide 60: Significant upside potential
Significant upside potential DuraPlate(r) Products Group '03 '04 '05 '06 '07 '08E '09E '10E '11E '12E DuraPlate Panels 0.79 3.7 2.9 5 6 15.8 35.6 50.9 65.6 81.7 in $MM
Slide 61: Financial Overview
Financial Overview Bob Smith, SVP and Chief Financial Officer
Slide 62: Strategic Initiatives
Strategic Initiatives Reduce Cyclicality Top-Line Growth Improve Margins Productivity Improvements Earnings Growth Middle Market Strategy/Increased Market Share ^ ^ ^ ^ Process Technology Innovation ^ ^ ^ ERP System ^ ^ ^ Operational Excellence ^ ^ ^ Strategic Sourcing ^ ^ New Leg ^ ^ ^ New Products
Slide 63: Key Metrics Scorecard
Key Metrics Scorecard Strategic Initiative Key Metrics Operational Excellence Southern Plant Full utilization within 24 months from start Lafayette Transformation Assembly line update completed in 1H'09 Warehouse consolidation completed by 2Q'09 Strategic Sourcing 5% sourced internationally in 2007
Slide 64: Financial Outlook
Financial Outlook Expectations 2006 2007 Long-term Revenue $1.3B $1.1B >$1.5B Market Share (total trailers) 21% 21% 23% Non-trailer Revenue <$5M <$5M > $75M Gross Margins 8% 8% > 10% EBITDA Margins 3.3% 4.5% > 8%
Slide 65: Wrap-up
Wrap-up Dick Giromini, President and Chief Executive Officer
Slide 66: Strategic Pyramid - Executable Initiatives
Develop New Non-core Business Opportunities Develop Global Joint Ventures/ Alliances Make Strategic Acquisitions Optimize Manufacturing Costs Accelerate Strategic Sourcing Initiative Optimize Inventory Mgmt. Create Purchasing Consortium Expand Customer Base Leverage the WNC Brand. Optimize and Grow
Slide 67: Strategic Plan Thank You
Strategic Plan Thank You