Wabash National Corporation (WNC) Earnings Call Transcript & Summary

Good morning, and welcome to the 2021 Annual Meeting of Shareholders of Wabash National Corporation. I'm Larry Magee, Chairman of the Board of Directors of the company, and I will act as Chairman of this meeting. On behalf of the Board of Directors and management, I thank you for joining us today. Given the unprecedented times in which we're living today, we certainly appreciate that each of you registered online and are joining us virtually here today. We believe that this format is prudent in light of the ongoing COVID-19 pandemic and that this format provides greater access to all of our stockholders and maximizes their ability to engage meaningfully with us. Kristin Glazner, our General Counsel, will serve as Secretary of this meeting. All of the directors of the company are also attending virtually. Beginning on Page 17 of the 2021 Wabash proxy statement, you will find the biographies for each of these directors who are up for election. I would like to introduce them now. The directors who are up for election are: Therese Bassett; Jack Boss; John Kunz; myself, Larry Magee; Ann Murtlow; Scott Sorensen; Stuart Taylor II and Brent Yeagy, our President and Chief Executive Officer. I'd also like to introduce other members of our management team who are attending today as well. Again, Kristin Glazner, our Chief Human Resource Officer, General Counsel and Corporate Secretary; Kevin Page, our Senior Vice President of Customer Value Creation; Mike Pettit, our Chief Financial Officer; and Dustin Smith, our Senior Vice President, Global Operations. Finally, I'd like to introduce Rob Hofinger and Doug Hunter of the company's independent registered public accounting firm, Ernst & Young, who are also attending this virtual meeting. We provided notice of this meeting on March 29, 2021 to stockholders of record as of March 12, 2021. I now call the 2021 Annual Meeting of Stockholders of the company to order. At this time, I appoint Kevin Chau of The Carideo Group as Inspector of Elections. Mr. Chau, please confirm that you are present at this meeting.

I am present. On March 12, 2021, the record date for this annual meeting, there were 51,882,958 shares of common stock outstanding, each having one vote. 49,141,117 shares are represented by proxy. Therefore, a quorum is present.

Thank you. Based on the foregoing, I declare that this meeting is open for the conduct of business. The text of the agenda items and the proposals to be voted upon are included in the company's proxy statement sent to all stockholders in connection with this meeting. No stockholder has requested that any item be included on the agenda. The electronic polls for your voting on the proposals at this annual meeting will remain open through the conclusion of the presentations for all matter. Kristin, would you please address the formalities of the meeting.

Thank you. Good morning. The first agenda item is the election of 8 directors. The Board of Directors has nominated: Therese M. Bassett, John G. Boss, John E. Kunz, Larry J. Magee, Ann D. Murtlow, Scott K. Sorensen, Stuart A. Taylor II and Brent L. Yeagy to serve as directors of Wabash National Corporation until the 2022 Annual Meeting or until their successors are duly elected and qualified. The company has an advanced notice provision in its bylaws, and no nominations were received in accordance with that provision. Accordingly, all nominations are closed. The Board recommends a vote for the election of each of the 8 director nominees. If there are any questions or comments, please indicate that question at this time. Proposal 2. The second agenda item is an advisory vote on the compensation of the company's named executive officers. The Board recommends a vote for this proposal. If there are any questions or comments, please indicate that question at this time. Proposal 3. The third agenda item is the ratification of the appointment of Ernst & Young LLP as the independent registered public accounting firm for Wabash National Corporation for the year ending December 31, 2021. The Board recommends a vote for this proposal. If there are any questions or comments, please indicate that question at this time. Because no further business is scheduled to come before the stockholders, I declare the polls for each matter to be voted on at this meeting open and direct that a vote for the stockholders be taken by written ballot on the following matters. Each holder of common stock is entitled to one vote for each share of common stock held of record at the close of business on March 12, 2021. Each stockholder or such stockholders' proxy has electronic voting capability at this time and is entitled to vote at this meeting. Any stockholder who has previously given his or her proxy need not vote unless he or she desires to revoke the proxy and vote by electronic ballot at this meeting.

Does anyone still need to vote electronically or speak to the Inspector of Election? Hearing none, I declare the polls for each matter voted upon this meeting closed and direct the Inspector of Elections to review and tabulate the votes. Given the number of shares voted by proxy, the Inspector of Election is now able to provide a preliminary report on the voting results for each of the proposals. Because these results are preliminary, they are subject to final tabulation and verification by the Inspector of Elections. I recognize Mr. Chau, the Inspector of Elections.

Thank you, Mr. Magee. I have completed a count of the proxies submitted and determined that a sufficient number of votes have been cast by proxy for me to provide this preliminary report. The preliminary report show that all our director nominees were elected and each of the other proposals were approved with at least the requisite stockholder majorities.

Thank you, Mr. Chau. Based on the inspector's report, I hereby declare that each of Therese M. Bassett, John G. Boss, John E. Kunz, Larry J. Magee, Ann D. Murtlow, Scott K. Sorensen, Stuart A. Taylor II and Brent L. Yeagy have been elected as a director of Wabash National Corporation to serve as directors of the company until the 2022 Annual Meeting or until his or her successor has been duly elected and qualified. I further declare that the compensation paid to the Wabash National Corporation named executive officers as disclosed in the company's proxy statement has been approved by advisory vote. And finally, I declare the appointment of Ernst & Young LLP as the independent registered public accounting firm for Wabash National Corporation for the year ending December 31, 2021 has been ratified. The Inspector of Elections will provide the Secretary with a written report of the final vote count with respect to all the matters voted on today, which shall be included in the minutes of this meeting and reflected in our SEC filings. There being no further business, I declare this annual meeting adjourned. Now I'd like to turn the meeting over to Mr. Brent Yeagy to present the Chief Executive Officer's report. Mr. Yeagy?

Thank you, Larry. Before I begin, I will refer you all to the safe harbor statement included as part of this presentation. We are making our future come alive as one Wabash National. We are working under a new set of purpose, vision and mission statements that our entire organization now understands and is acting upon to change how the world reaches you, to be the innovation leader of engineered solutions for the transportation, logistics and distribution industries, and we look to enable our customers to succeed with all breakthrough ideas and solutions that help them move everything from first to final mile. Together, we're creating a new organization with new capabilities to deliver for our employees, our customers and our shareholders. As we have all been personally impacted by the ongoing pandemic, Wabash National is not alone navigating these uncharted waters. What I'm very proud of to say is that we've stayed focused on our strategic journey along the way. We remain committed to our mission of helping our customers move everything from first to final mile. As we stayed focused, we were able to scale our core competencies, increase our commitment to leverage innovation, act on our desire for a One Wabash organization, and we're able to continue to deploy solutions that will support rapid changes in transportation, logistics and distribution. We organized our company to enable our strategy. We positioned our organization to create value for all of our customers. We eliminated silos across our business. We accelerated the pace of deployment of our Wabash Management System. We simplified our organization and removed the waste along the way. And we continue to stay focused on footprint optimization and business rationalization. We acted on our organization. As a result, we effectively managed our 2020 decremental margins of 14% on revenue which declined 38%, unheard of in the history of Wabash National during trough-like conditions. Our 2020 trough free cash flow generation was consistent with peak years, proving the growth and resiliency within our business, and we maintained our dividend throughout a crisis as a sign of both stronger customer portfolio management and strong free cash flow profile. I want to stress that our new organizational structure benefits all of our stakeholders. Specifically for our customers, it enhances our ability to innovate to support rapidly changing transportation needs. For our employees, it provides for a stronger company with greater focus on innovation and exciting growth markets. And for our shareholders, improved cost structure through elimination of organizational redundancies, acceleration of growth through greater customer intimacy, increasing share of wallet and enhancing our focus on margin-accretive parts and service initiatives. We continue to organize around undeniable changes in logistics. Specifically, the following platforms enable us to grow beyond the cycle. First, within cold chain, we plan to expand share in markets driven by movement of goods through temperature-controlled cold chain activities. Two, e-commerce, specifically understanding that this affects our entire portfolio from first to final mile as we grow in the expanding market of home delivery of goods. And lastly, for parts and service, unifying our historically disparate parts and service revenue streams to drive alignment and growth focus. With all that's evolving rapidly around us, we continue to advance our ESG priorities for all of our stakeholders. Corporate responsibility is a vehicle to deliver on our existing purpose and strategy accordingly, delivering sustainability to our customers through innovation and collaboration, engaging employees and business partners in impactful philanthropy, supporting a culture that emphasizes diversity, equity and inclusion and ensuring the highest standards of integrity and best practices in Board governance. We have a role in our society and in our communities to provide needed leadership. Wabash National is not retreating from that responsibility. In closing, Wabash National is a purpose, vision and mission-driven One Wabash organization. And we are reshaping ourselves for the purpose of breakthrough performance by investing additional resources in innovation, by removing organizational waste and enabling our people through lean thinking and tools, by changing who we are to ensure our customers succeed in a changing world and by accepting our responsibility and necessity to ensure a diverse, equitable and inclusive workspace for all of our employees. We are forging a path to be better, to be uniquely different and to lead in a world of forthcoming change. Thank you. And I'll now entertain any questions from those on the call. If there are no further questions, once again, thank you for attending. This concludes our presentation.