Exhibit 99.4

 

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

 

Wabash National Corporation (“Wabash National”) completed the acquisition of Supreme Industries, Inc. (“Supreme”) following a cash tender offer by the Company for all outstanding shares of Supreme’s Class A and Class B common stock for $21 per share and an aggregate consideration paid of $360.4 million. Wabash National financed the Supreme acquisition and related fees and expenses using the proceeds of the Company’s $325.0 million offering in aggregate principal amount of 5.50% senior unsecured notes due 2025 and available cash and cash equivalents.

 

The following unaudited pro forma consolidated financial statements are based on Wabash National’s historical consolidated financial statements and Supreme’s historical consolidated financial statements as adjusted to give effect to the acquisition and the offering. The unaudited pro forma consolidated statements of operations for the six months ended June 30, 2017 and the twelve months ended December 31, 2016 have been prepared as if the transactions had taken place on January 1, 2016. The unaudited pro forma consolidated balance sheet as of June 30, 2017 has been prepared as if the transactions had taken place on June 30, 2017.

 

The financial information for Supreme is based on a 52- or 53-week fiscal year ending the last Saturday in December. As a result, the fiscal year ended December 31, 2016 contained 53 weeks and the historical unaudited pro forma consolidated statements of operations for the six months ended June 2017 contains 26-weeks for the period ending July 1, 2017. The historical unaudited pro forma consolidated balance sheet as of June 30, 2017 for Supreme has been prepared as of July 1, 2017.

 

Assumptions and estimates underlying the pro forma adjustments are described in the notes below, which should be read in conjunction with the unaudited pro forma consolidated financial statements. Because the pro forma financial statements have been prepared based upon preliminary estimates and assumptions, the final amounts recorded may differ materially from the information presented herein. These estimates and assumptions are subject to change pending further ongoing review of the assets acquired and liabilities assumed, and as additional information becomes available.

 

The unaudited pro forma consolidated balance sheet and unaudited pro forma consolidated statement of operations reflect the following transactions as if they occurred at the dates noted above:

 

·

the Supreme acquisition for a cash purchase price of $360.4 million and the repayment of Supreme’s outstanding indebtedness;

·

the issuance of $325.0 million principal amount of notes to finance a portion of the acquisition purchase price; and

·

the payment of estimated costs of issuances of the notes.

 

 

 

 

Wabash National Corporation

Unaudited Pro Forma Consolidated Balance Sheet

(dollars in thousands)

            

		As of June 30, 2017
		Wabash				Supreme
		Historical				Historical				Adjustments				Pro forma
Cash and cash equivalents		$	178,633			$	24,828			$	319,303	(a)		$	155,232
											(367,532	)(b)
Investments			-				4,152				-				4,152
Accounts receivable			122,978				33,446				-				156,424
Inventories			199,276				30,692				1,296	(c)			231,264
Prepaid expenses & other			19,198				4,931				707	(d)			24,836
Total current assets			520,085				98,049				(46,226	)			571,908
Property, plant and equipment			136,299				41,481				19,077	(d)			196,857
Deferred income taxes			20,285				-				-				20,285
Goodwill			148,268				-				169,997	(f)			318,265
Intangible assets			85,909				-				158,000	(e)			243,909
Other assets			21,565				-				-				21,565
Total assets			932,411				139,530				300,849				1,372,790
Current portion of long-term debt			45,822				7,014				(7,014	)			45,822
Current portion of capital lease obligations			427				-				-				427
Accounts payable			109,595				10,937				-				120,532
Other accrued liabilities			89,355				10,685				25,011	(g)			125,051
Total current liabilities			245,199				28,636				17,997				291,832
Long-term debt			186,098				-				319,303	(a)			505,401
Capital lease obligations			1,172				-				-				1,172
Deferred income taxes			486				2,011				69,514	(h)			72,011
Other noncurrent liabilities			26,006				-				2,918	(g)			28,924
Common stock			737				1,874				(1,874	)(i)			737
Additional paid-in capital			648,614				75,647				(75,647	)(i)			648,614
Retained earnings			38,930				46,917				(46,917	)(i)			38,930
Accumulated other comprehensive loss			(2,076	)			(62	)			62	(i)			(2,076	)
Treasury stock			(212,755	)			(15,493	)			15,493	(i)			(212,755	)
Total Stockholders equity			473,450				108,883				(108,883	)			473,450
Total liabilities and stockholders equity			932,411				139,530				300,849				1,372,790

 

See accompanying notes to the Unaudited Pro Forma Consolidated Financial Statements 

 

 

Wabash National Corporation

Unaudited Pro Forma Consolidated Statements of Operations

(dollars in thousands, except per share)

               

 

		Twelve months ended December 31, 2016
		Wabash				Supreme
		Historical				Historical				Adjustments				Pro Forma
Net sales			1,845,444				298,972				(5,012	)(l)			2,139,404
Cost of sales			1,519,910				231,860				(5,012	)(l)			1,747,099
											341	(d)
Gross profit			325,534				67,112				(341	)			392,305
General and administrative expenses			74,129				26,438								100,567
Selling expenses			27,270				12,105								39,375
Amortization of intangibles			19,940				-				4,846	(j)			24,786
Other operating expenses (income)			1,663				(334	)			334	(o)			1,663
Income from operations			202,532				28,903				(5,521	)			225,914
Other income (expense)
Interest expense			(15,663	)			(459	)			(17,977	)(k)			(34,099	)
Other, net			(1,452	)			-				(156	)(m)			(1,274	)
											334	(o)
Income before income taxes			185,417				28,444				(23,320	)			190,541
Income tax expense			65,984				9,407				(8,302	)(n)			67,089
Net income			119,433				19,037				(15,018	)			123,452
Net income per share:
Basic			1.87												1.94
Diluted			1.82												1.88

 

See accompanying notes to the Unaudited Pro Forma Consolidated Financial Statements 

 

 

 

Wabash National Corporation

Unaudited Pro Forma Consolidated Statements of Operations

(dollars in thousands, except per share)

 

						Six months ended June 30, 2017
		Wabash				Supreme
		Historical				Historical				Adjustments				Pro Forma
Net sales			798,619				164,140				(4,921	)(l)			957,838
Cost of sales			671,584				132,041				(4,921	)(l)			798,875
											171	(d)
Gross profit			127,035				32,099				(171	)			158,964
General and administrative expenses			37,436				13,630								51,066
Selling expenses			12,070				6,497								18,567
Amortization of intangibles			8,597				-				3,002	(j)			11,599
Other operating expenses (income)			-				(10	)			10	(o)			-
Income from operations			68,932				11,982				(3,183	)			77,732
Other income (expense)
Interest expense			(5,878	)			(478	)			(8,992	)(k)			(15,348	)
Other, net			1,657				-				(162	)(m)			1,505
											10	(o)
Income before income taxes			64,711				11,504				(12,327	)			63,889
Income tax expense			21,593				3,339				(4,113	)(n)			20,819
Net income			43,118				8,165				(8,214	)			43,070
Net income per share:
Basic			0.72												0.72
Diluted			0.68												0.68

 

See accompanying notes to the Unaudited Pro Forma Consolidated Financial Statements 

 

  

Note 1. Basis of Presentation and Financing Transaction

 

The historical consolidated financial statements have been adjusted in the unaudited pro forma consolidated financial statements to give effect to the pro forma events that are (1) directly attributable to the business combination, (2) factually supportable and (3) with respect to the pro forma consolidated statements of operations, expected to have a continuing impact to the combined results following the business combination.

 

The business combination was accounted for under the acquisition method of accounting in accordance with Accounting Standards Codification Topic 805, Business Combinations. As the acquirer for accounting purposes, Wabash National has estimated the fair value of Supreme’s assets acquired and liabilities assumed. The pro forma combined financial statements do not necessarily reflect what the combined company’s financial condition or results of operations would have been had the acquisition occurred on the dates indicated. They also may not be useful in predicting the future financial condition and results of operations of the combined company. The actual financial position and results of operations may differ significantly from the unaudited pro forma amounts reflected herein due to a variety of factors. The combined pro forma financial information does not reflect the realization of any expected cost savings or other synergies from the acquisition.

 

The unaudited pro forma consolidated statements of operations for the six months ended June 30, 2017 and the twelve months ended December 31, 2016 have been prepared as if the transactions had taken place on January 1, 2016. The unaudited pro forma consolidated balance sheet as of June 30, 2017 has been prepared as if the transactions had taken place on June 30, 2017.

 

The unaudited pro forma consolidated balance sheet and unaudited pro forma consolidated statements of operations reflect the following transactions as if they occurred at the dates noted above:

 

·

the Supreme acquisition for a cash purchase price of $360.4 million and the repayment of Supreme’s outstanding indebtedness;

·

the issuance of $325.0 million principal amount notes to finance a portion of the acquisition purchase price; and

·

the payment of estimated costs of issuances of the notes.

 

Note 2. Pro Forma Adjustments and Assumptions

 

The unaudited pro forma adjustments described below are based on assumptions and estimates, which should be read in conjunction with the unaudited pro forma consolidated financial statements. Since the pro forma financial statements have been prepared based upon preliminary estimates and assumptions, the final amounts recorded may differ materially from the information presented. These estimates and assumptions are subject to change pending further ongoing review of the assets acquired and liabilities assumed, and as additional information becomes available. The final purchase price allocation could differ materially from the preliminary allocations used in the unaudited pro forma consolidated financial statements. The final allocation may include (1) changes to fair value of property, plant and equipment, (2) changes in allocations to intangible assets such as trade names, customer relationships and goodwill and (3) other changes to assets acquired and liabilities assumed.

 

The following adjustments have been reflected in the unaudited pro forma consolidated financial information:

 

(a)

Reflects the net proceeds to Wabash National of $319.3 million from the issuance of $325.0 million principal amount of notes after deducting issuance costs of approximately $5.7 million. These costs will be capitalized and amortized through interest expense over the life of the notes using the effective interest method.

 

(b)

Reflects the purchase price of Supreme of $360.4 million; however, does not reflect a use of cash to make approximately $27.9 million in change in control payments further described in note (g) below (such payments have been or are expected to be settled in cash). Adjustments also reflect the repayment of Supreme’s outstanding debt of $7.2 million. The effect of cash to be used to pay expected fees and expenses associated with the acquisition of approximately $10 million has been excluded.

 

 

(c)

Reflects an adjustment to record Supreme’s inventory at fair value. The estimated fair value of inventory was $32.0 million at July 1, 2017 compared to a carrying value of $30.7 million resulting in a total increase to inventory of $1.3 million.

 

(d)

Reflects the adjustment to increase Supreme’s assets held for sale and property, plant and equipment to fair value, based on preliminary estimates, with the corresponding impact on depreciation expense based on estimated depreciable lives of the assets.

 

(e)

Reflects an adjustment to record intangible assets, based on a preliminary appraisal, related to Supreme at fair value consisting of the following (in millions):

 

		June 30, 2017
Trade names & trade marks (20 years)		$	20.0
Customer and supplier relathipships (15 years)			138.0
Total		$	158.0

  

(f)

Reflects the estimated goodwill arising from the transaction. Goodwill was determined as follows (in millions):

 

		June 30, 2017
Purchase price of Supreme		$	360.4
Estimated fair value of liabilities assumed			58.6
Estimated deferred tax liability assumed			69.5
Estimated fair value of assets acquired			(318.6	)
Estimated goodwill arising from the transaction		$	169.9

 

(g)

Reflects additional liabilities assumed by Wabash National as a result of the transaction and change of control provisions for management of Supreme including the Supreme Industries’ Ownership Transaction Incentive Plan, severance agreements and other cash incentives.

 

(h)

Reflects the recognition of $69.5 million of deferred tax liabilities generated by the preliminary allocation of the purchase price to identifiable tangible and intangible assets.

 

(i)

Reflects elimination of Supreme’s historical equity balances.

 

(j)

Reflects the adjustments for amortization of the intangible assets described in note (e). Wabash National plans to amortize the tradename intangible asset utilizing a straight-line approach and the customer relationship intangible asset using an alternative method that follows the pattern in which the economic benefits of the asset are expected to be realized.

 

 

 

(k)

Reflects net change in interest expense as a result of the issuance of the notes. After the consummation of the transactions (as described in Note 1), Wabash National’s outstanding indebtedness on a pro forma basis as of June 30, 2017 consists of (i) outstanding letters of credit of $5.4 million on the amended $175.0 million senior secured revolving credit facility that bears interest at LIBOR plus a spread of 150 to 200 basis points, (ii) $188.5 million of borrowings under the senior secured first lien term loan facility that bears interest at LIBOR plus 325 basis points, (iii) $44.9 million of borrowings under the convertible senior notes that bear interest at 3.375% and (iv) $325.0 million of borrowings under the notes issued in connection with the acquisition. The individual components of the net change in interest expense are as follows (in millions):

 

		Twelve months ending				Six months    ending
		December 31, 2016				June 30, 2017
Historical interest expense as reported by Wabash		$	15.7			$	5.9
Historical interest expense as reported by Supreme			0.5				0.5
Total historical interest expense as reported		$	16.1			$	6.4
Less: Removal of Supreme interest expense associated with term loan paid in full at acquistion			(0.6	)			(0.3	)
Pro forma interest expense			18.6				9.3
Pro forma adjusted interested expense		$	34.1			$	15.4
Pro forma adjustment		$	18.0			$	9.0

  

(l)

Reflects the elimination of sales from Wabash National to Supreme as well as the related cost of sales. There is no estimated impact to working capital or gross profit on the pro forma consolidated financial statements.

 

(m)

Reflects net change in interest income as a result of the cash used for the transaction.

 

(n)

Reflects the adjustments to record income tax expense for the income before income taxes on the pro forma adjustments at an effective tax rate of 35.6% for the twelve month period ending December 31, 2016 and 33.4% for the six month period ending June 30, 2017.

 

(o)

Certain reclassifications have been made in the historical Supreme financial statements to conform to Wabash National’s financial statement presentation. These reclassifications have no impact on net income or stockholders’ equity.