1. WABASH NATIONAL CORPORATION (NYSE:WNC)
Presented on Dec,
Investment Managers
Sashikanth (Sash) Yenika
Siwei (Lerissa) Li
Vanditha M Ravindranath

2. Agenda Screening Criteria Company Introduction Segment Profiles
Industry Overview
Key Macroeconomic Drivers
Comparable Valuation
Financial Analysis
Financial Projections
DCF Valuation
Technical Analysis
Recommendation

3. Screening Criteria Market Cap < $1B
Industry – NOT(Energy, Financials, IT, Healthcare)
Market Cap < $1B
Piotroski Score > 5
3 Year Avg. Revenue Growth > 10%
P/E < 15x
P/BV < 2x
Current Share Price < 1.2*52wk low

4. Company Introduction WABASH NATIONAL CORPORATION
Founded in 1985; 2014 Revenue: $1.86B
Designs, manufactures and markets standard and customized truck and tank trailers, and related transportation equipment
WABASH NATIONAL CORPORATION
Commercial Trailer Products
Diversified Products
Retail
Composites
Aviation & Truck Equip.
Tank Trailer
Process Systems
Source: Annual report 2014

5. Segment Profile: Commercial Trailer
SALES & GROSS PROFIT MARGINS
2014 Sales: $1.3B
2014 new trailer shipments: 53,550
Portfolio: Dry vans, refrigerated vans, platform trailers
Industry leader in van and platform trailer manufacturing
In USD m
PRODUCT MIX
END MARKETS
Dramatic margin improvement since 2010
Source: Investor Presentation August 2015, November 2015 and Annual reports

6. Segment Profile: Diversified Products
SALES & GROSS PROFIT MARGINS
2014 Sales: $0.5B
Higher growth (81% - CAGR and higher margin businesses
Portfolio: Sanitary, chemical trailers, aircraft refueler, vertical silos, portable storage containers
Possess industry leading stainless steel trailer brands: Walker, Brenner, Bulk
In USD m
PRODUCT MIX
END MARKETS
Diverse Products and End Markets
Source: Investor Presentation August 2015, November 2015 and Annual reports

7. Segment Profile: Retail
2014 Sales: $0.2B
Dealership model, selling new and used trailers, aftermarket parts, and maintenance and repair services
Expansion into new markets with mobile service and third party maintenance
SALES & GROSS PROFIT MARGINS
In USD m
PRODUCT MIX
COMPANY-OWNED RETAIL LOCATIONS
Source: Investor Presentation August 2015, November 2015 and Annual reports

8. Overview - Truck Trailer Manufacturing
KEY PRODUCTS
MAJOR PLAYERS
Flatbed trailer
Refrigerated trailers
Freight trailers
LIFECYCLE
OUTLOOK
Mature stage of the industry’s life cycle
Slight product saturation has been reached
Trailer with fuel saving technologies for heavy duty trucks will spur new sales during the next five years
Industry will face cost pressures from product development
Source: IBISWorld

9. Porter’s Five Analysis
Rivalry
High: high price competition, lack of products differentiation
Bargain Power of Supplier
Moderate: volatile price of steel and aluminum
Bargain Power of Buyer
Moderate: high price competition
Threats of New Entrants
Moderate: high initial capital cost, limited access to competitive raw material price
Threats of Substitution
Low: no substitute for trailer
Source: IBISWorld

10. Truck Trailer Manufacturing
Industry Drivers
Key Economics Drivers
Price of crude oil
Total trade value
Price of Steel
Supply Industries
Aluminum manufacturing
Iron & Steel manufacturing
Demand Industries
Local freight
trucking
Long-distance freight trucking
Tank & refrigeration trucking
Truck Trailer Manufacturing
Source: IBISWorld

11. Economic Drivers
Increase in the total trade value will lead to increased demand for truck trailer manufacturing
Increasing price of steel and crude oil may pose potential threat for the industry
Source: IBISWorld

12. Demand Industry
Growing demand industries revenue will lead to increased demand for truck trailer manufacturing industry
Source: IBISWorld

13. Comparable Companies
Provide mechanical, mechatronic and electronic technologies for braking, stability and transmission automation systems for commercial truck, bus and trailer manufacturers
Revenue: $2.6B
Market Cap: $5.74B
Provide axle, brake and suspension solutions to commercial truck, trailer, bus and coach and off-highway machinery manufacturers
Revenue: $3.8B
Market Cap: $0.8B

14. Comparable Valuation
Source: Bloomberg, Capital IQ, Annual Reports

15. Activity Ratios & Profitability Ratios
The Value of Profit Margin is high due to the income tax benefit that they received in 2012
Source: Annual reports 2014, 2013, 2012

16. Profitability & Leverage Ratios
PROFITABILITY RATIOS
LEVERAGE RATIOS
The Value of ROE is very high due to the income tax benefit received in 2012
Adjusted Net Margin is the value of Net Profit Margin had the tax benefit not been availed
Source: Annual reports 2014, 2013, 2012

17. DuPont Analysis & Greenblatt Ratios
This was considered as NM as the value was an outlier
2010
2011
2012
2013
2014
Tax Burden
118%
99%
217%
60%
62%
Interest Burden NM
77%
57%
75%
80%
Operating Profit Margin
(2%) 2% 6% 7%
Asset Turnover 3x 2x
Leverage
ROE
11%
51%
16%
17%
GREENBLATT RATIOS
Source: Annual reports 2014, 2013, 2012, Ycharts

18. I/S PROJECTION
Source: Annual Reports and Investor update Nov-2015

19. WEIGHTED AVERAGE COST OF CAPITAL
KEY INPUTS
KEY INPUTS
WEIGHTED AVERAGE COST OF CAPITAL
Source: Yahoo! Finance

20. Present Value of Equity
DISCOUNTED CASH FLOW
Present Value of Equity
SENSITIVITY ANALYSIS
Source: Annual report, industry report

21. Technical Analysis
Source: Yahoo! Finance – Dec 7, 2015

22. Recommendation: BUY 500 shares at Market Price
Expanding Margins
Increased Share Repurchase
Strategic Acquisitions
Entry to diversified growth markets and less cyclical industries
Recommendation: BUY 500 shares at Market Price
Target Price: $14.77
Current Stock Price:$11.55
DCF Valuation: $13.63
Relative Valuation: $19.31
Stock Price
Stock Price
Global Economic Weakness
Rise in raw materials & competition
Stringent Regulations
DIVERSIFICATION OF EXISTING PORTFOLIO
Source: Yahoo! Finance