OMB APPROVAL
--------------------------
OMB Number: 3235-0059
Expires: February 28, 2006
Estimated average burden
hours per response...12.75
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY
RULE 14a-6(e)(2))
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
Wabash National Corporation
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
--------------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
--------------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------------------------
5) Total fee paid:
--------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
--------------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
--------------------------------------------------------------------------------
3) Filing Party:
--------------------------------------------------------------------------------
4) Date Filed:
--------------------------------------------------------------------------------
PERSONS WHO POTENTIALLY ARE TO RESPOND TO THE COLLECTION OF INFORMATION
CONTAINED IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A
CURRENTLY VALID OMB CONTROL NUMBER.
SEC 1913 (02-02)
LETTER FROM THE PRESIDENT...
I am pleased to report that Wabash National Corporation has completed in a very
timely manner our first phase of our turn-around story. Much was accomplished in
2003 culminating in the successful recapitalization of the business in the third
quarter. Some highlights of our efforts are:
- SAFETY. Wabash National is a much safer place to work, significantly better
than National Safety Standards for like manufacturers. We expect our
workers compensation claims will drop substantially in the future. Some key
metrics during 2003 were:
- Achieved 50% Total Recordable Incident Rate reduction
- Achieved 51% Days Away From Work case reduction
- QUALITY. It is essential that Wabash National lead the industry in
providing the highest quality product. Waste is our enemy. As we move
toward 100% First Pass Yield there will be significant cost, productivity
and working capital improvements. We accomplished much in 2003, including:
- Achieved 88% First Pass Yield in December
- Developed and integrated a Commercialization Process within the
Company
- PRODUCTIVITY. Continuous Improvement has become a part of our culture. A
great many of our associates regularly participate on teams to improve our
processes. Their great effort has paid some very handsome dividends in
2003, including:
- Achieved 48% productivity improvement
- Completed over 230 formal "CI" events
- COST REDUCTION. CI events are not only attuned to productivity improvement.
As we work these events we also focus on cost take-outs. Our key intent is
to be the lowest cost producer of trailers in North America. In 2003, we
achieved another stellar year, including:
- Achieved $18 million in annualized labor cost savings
- Achieved $ 11.2 million in purchased materials savings
- WORKING CAPITAL MANAGEMENT. A significant amount of our working capital is
in the form of new and used trailers which have been sitting on our lots.
Over the past three years we have made a considerable effort to turn this
inventory into cash and use it to pay down debt. Total inventory at
December 31, 2003 was $85 million compared to a peak of $330,000 in 2001;
this is the lowest level of inventory the Company has achieved since 1994.
During 2003 we again made significant progress, including:
- Reduced inventory by $50 million year over year
- The used trailer "overhang" is gone
- RESEARCH & DEVELOPMENT. Our success going forward begins with new
innovative technology designed and successfully commercialized to solve our
customer's problems and make them more efficient. We always listen and
respond to their needs. During 2003, our accomplishments continued with our
tradition, including:
- Launched new container, WABASH(R) FreightPro(TM) and WABASH(R)
DuraPlate(R) HD(TM) products
- Initiated Project "10" with the intent to offer a 10 year maintenance
free DuraPlate(R) trailer
- NEW TRAILER SALES. Our focus has historically been on the mega-sized
fleets. These are the fleets that readily recognize the "Total Cost of
Ownership" or the life cycle cost of capital equipment. As such, they have
and continue to be proponents of our DuraPlate(R) technology. As we enter
2004, our DuraPlate(R) trailers have withstood the test of time; it's
everything we said it would be. Our customers have saved significant
dollars by using DuraPlate(R) trailers versus standard sheet and post
trailers. This customer base represents only a small fraction of the
available market, which we call the "mid-market". The "mid-market" fleets
tend to emulate the leaders. We see a large market opportunity ahead of us;
- Initiated focus on "mid-market" fleets with over 650 targeted accounts
- Acquired over 200 new customers in 2003
- RETAIL/BRANCH OPERATIONS. A continuing challenge has been the integration
of our diverse retail/branch system. This was an operation that was made up
of three separate acquisitions with diverse operating cultures. It was
almost immediately saddled with and became more known as a used trailer
dumping ground as Wabash National moved thousands of fleet trades onto the
lots. We lost focus and many key associates. On top of all this, we sold
our rental and leasing business and our wholesale aftermarket parts
business in 2003. The road to recovery has been long and difficult. We are
basically rebuilding this business from the ground up.
- Completed divesture of 12 Retail/Branch locations and the Lafayette
Mod Center with annualized savings of over $5 million
- Fully integrated all Branch's under common product and business plan
- FINANCIAL CONDITION. A consistent initiative within Wabash National is to
become debt free as soon as possible. We were faced with the difficult task
of meeting a large payment of our existing debt in April, 2004. The efforts
during the past three years to rationalize our manufacturing capacity,
normalize our used trailer inventories, divest international operations and
to improve our manufacturing operations were critical to our
recapitalization of the Company during 2003. For the second consecutive
year, we reduced our total indebtedness by over $100 million, reducing our
total debt since 2001 by 46%. Through our recapitalization efforts, we were
successful in lowering our average cost of debt from over 10% to
approximately 4%, an annual savings of approximately $20 million. As of
December 31, 2003, over 50% of our outstanding indebtedness consisted of
convertible notes. Effective January 1, 2004, all of the conditions for
conversion of these notes into common stock of Wabash were met. As a
result, we can envision the day when the Company is debt-free. Our
recapitalization efforts included:
- Sold $125 million 3 1/4% convertible notes
- Established new $222 million bank line
After two very brutal years of trailer demand, we have finally seen the industry
show signs of improvement. Production for trailers improved roughly 30% over
2002, although industry production was relatively flat throughout the year.
Quote and order rates showed significant strength in the last four months of
2003. This activity has continued into the new-year. During 2003 most trailer
manufacturers followed a similar path in an industry downturn and used pricing
as a means to fill their plant capacity. We chose not to pursue some business,
especially in the reefer and commodity sheet and post markets. During the fourth
quarter, we began to experience commodity price increases, which we believe will
continue throughout 2004. These commodity increases and a growing industry
backlog have begun to firm trailer pricing.
Going forward into 2004, we see continued strength in the industry. A key
forecaster, America's Commercial Transportation (ACT) Publications, is
predicting another 30% growth in trailer production versus 2003. We certainly
expect to grow with this demand and in addition, we expect to see our market
share in the mid-market expand as we close more new accounts. We will continue
to improve all aspects of our manufacturing operations with emphasis on safety,
quality, and productivity and further cost reduction. Our Retail/Branch
operations will significantly improve their performance. And we will certainly
continue to pay down debt.
Wabash National Corporation increased its market cap by over $500 million during
2003. All of the associates appreciate the confidence implied in them and fully
intend to meet or exceed expectations.
We wish to thank our suppliers, customers, stockholders and our associates for
their support during these past few years as we have now positioned the Company
to achieve performance levels never before attained.
Sincerely,
/s/ William P. Greubel
President, Chief Executive Officer and Director
STOCKHOLDER INFORMATION
EXECUTIVE OFFICERS DIRECTORS
David C. Burdakin
William P. Greubel President
President, Chief Executive Officer and Director HON Company
Rodney P. Ehrlich William P. Greubel
Senior Vice President - Chief Technology Officer President and Chief Executive Officer
Wabash National Corporation
Richard J. Giromini
Senior Vice President - Chief Operating Officer John T. Hackett
Chairman of the Board of Directors
Mark R. Holden Wabash National Corporation
Senior Vice President - Chief Financial Officer
Dr. Martin C. Jischke
Timothy J. Monahan President
Senior Vice President - Human Resources Purdue University
Ludvik F. Koci
AUDITORS President
Ernst & Young Penske Transportation Components LLC
111 Monument Circle
Suite 2600 Stephanie K. Kushner
Indianapolis, Indiana 46204-5120 Vice President and Chief Financial Officer
Federal Signal Corporation
TRANSFER AGENT
National City Bank REQUESTS
Corporate Trust Operations If stockholders request information or
PO Box 92301 assistance, please write or telephone:
Cleveland, Ohio 44193-0900
(800) 622-6757 Wabash National Corporation
c/o Investor Relations
PO Box 6129
STOCK LISTING Lafayette, Indiana 47903-6129
Symbol: WNC (765) 771-5310
New York Stock Exchange
INTERNET ADDRESS
http://www.wabashnational.com
April 1, 2004