Slide 1: Second Quarter 2014 Investor Presentation
Second Quarter 2014 INVESTOR PRESENTATION [resona pa]
Slide 2: Patrick Industries, Inc.
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Slide 3: Forward-Looking Statements
aabii 2) Forward-Looking Statements This presentation contains certain statements related to future results, or states our intentions, beliefs and expectations or predictions for the future which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act o
Slide 4: Patrick Industries Highlights
aE TITS, Patrick Industries Highlights Patrick is a leading national manufacturer and distributor of a wide variety of building and component products for the RV, MH and Industrial markets. Strong leadership team and key players - top to bottom alignment and entrepreneurial culture Solid balance she
Slide 5: Patrick Industries Overview
Patrick Industries Overview « Leading national RV market: 75% of 6M’14 revenues supplier serving the - Includes laminated panels, countertops, fabricated RV. MH & Industrial aluminum and FRP products, wrapped mouldings, cabinet doors, wiring/electrical/plumbing, furniture, interior = markets passage
Slide 6: Nationwide network of manufacturing and distribution centers
Patrick's nationwide network of manufacturing and distribution centers reduces in-transit delivery time and cost to our customers. Hof Centers (as of 06/29/14) Manufacturing 29 Distribution 16
Slide 7: Sales Concentration By Market
Sales Concentration By Market The Increase In wholesale unit shipments in the RV market, new product introductions, and the Impact of acquisitions over the last 4 years contributed to an increase in our RV market sales concentration. +) 2012 Actual Industry 2013 Actual Industry Six Months 2014 Actua
Slide 8: RV Market Growth Factors
Ee | ei #8 RV Market Growth Factors __ Drivers of Consumer Demand Market Growth ‘Number of aging Changing lifestyle trends Availability of sumer financing confidence Consumer Demand + RV sales will continue to benefit from the aging baby-boomers. + Buyers aged 35 to 54 are the largest growing segmen
Slide 9: RV Industry Shipment Trends
RV Industry Shipment Trends After a dramatic rebound in 2010 from a 58% decline In unit shipments during the period 2006-2009, the RV industry has experienced steady growth. Trended shipment levels indicate that there continues to be potential for future growth based on the depth of the last cycle.
Slide 10: #039;s Sold / RV Unit Shipped
= = & J $’s Sold / RV Unit Shipped* saasedon TIM Average RV Content Per Unit RV unit content has increased 16% compared to Q2 ‘13 — driven by new products and $1,600 $1,400 ($) 31 49d quaquoy, = =a a
Slide 11: MH Market Growth Factors
ye MH Market Growth Factors Drivers of Consumer Demand Market Growth Quality credit Affordability standards and quality Job growth availability Connumen Demand + There is opportunity for moderate year-over-year growth, with limited downside risk in the near-term, if volumes maintain their historical
Slide 12: MH Shipment Trends / Residential Housing Starts
MH Shipment Trends / Residential Housing Starts = = On average over the last 40 years, approximately three-fourths of total residential housing starts have a been single family housing starts. Wholesale unit shipments in the MH industry averaged approximately 10% of the level of single-family housin
Slide 13: MH Shipment Trends
= MH Shipment Trends = = The recent decline and subsequent rebound in the MH industry has been impacted by the = = residential housing crisis and related factors, some of which were very similar to those that = caused the MH market to collapse in 1999. 400 350 300 250 200 150 Shipments (000's) 100 5
Slide 14: MH Content Per Unit
MH Content Per Unit = Our content per unit shipped has remained fairly consistent despite the impact of vertical integration by = -\ _ 9ur largest MH customer in prior periods. We believe we are well-positioned to participate in the = = continued expected Improvement of this industry. = #039;s Sold / M
Slide 15: Industrial Market Growth Factors
Industrial Market Growth Factors Drivers of Consumer Demand Market Growth New residential Consumer Existing housing Demand home sales construction + 56% of Company's industrial revenue base tied directly to residential housing market + National Association of Home Builders (NAHB) predicts a 6% incre
Slide 16: New Housing Starts Trends
eaEE I?) New Housing Starts Trends We estimate that approximately 56% of our Industrial revenue base Is directly tied to the residential housing market which appears to have begun Its recovery. Our products have applicability in both new construction and remodel! markets. 2,500 2068 ze 2000 3 1801 3
Slide 17: Acquisition Strategy
Acquisition Strategy S We target organizations with: © Solid management teams © High quality product lines © Strong customer and supplier relationships Patrick provides the acquired businesses with: © Opportunity to allow the creative entrepreneurial sprit of each to continue to thrive © Capital and
Slide 18: Growth Through Acquisition
Growth Through Acquisition 2008-2010 Acquisition Highlights (2010-2014): "17 companies = $115MM aggregate purchase price = $273MM annualized sales « Primarily RV industry-based SePATRICIC
Slide 19: Acquisition Summary (2010 - 2014)
Acquisition Summary (2010 - 2014) Date Net Purchase | Annualized mple Busi Pri Sales*_| Segment Industry Prod = ADORN =] 01/2010 Quality Hardwoods Sales | ® | x 08/2010 Blazon International Group Loon (om 06/2011 The Praxis Group & 092011 ALA. Countertops, LLC Infinity Graphics (formerly 122011 Perf
Slide 20: Acquisition Summary (2010 - 2014) (continued)
= =I Acquisition Summary (2010 — 2014) (continued) Date Purchase| Annual complete Busines: Pri Segment | Indu Products FRONT] 09/2013 09/2013 09/2013 06/2014 06/2014 Fronttine Mfg., Inc. Premier Concepts, Inc. fuse West side Furniture o=sa5 Precision Painting Group Foremost Fabricators, LLC $5.2MM $
Slide 21: Financial Review
= = =I SS =I = = | = June 29, 2014 Financial Review
Slide 22: Patrick Industries 2nd Quarter 2014 Results
Patrick Industries 2nd Quarter 2014 Results ls tossnse copes cnro carn | acral | ans | acu) "caus $ in thousands exes r share data} Actual Sales Actual Sales = Net Sales $ 187,855 $ 159,576 = Cost of Goods Sold 186,036 83.1% 134,416 84.2% Gross Profit 31,819 16.9% 25,160 15.8% Warehouse & Delivery 6
Slide 23: Patrick Industries Six Months 2014 Results
Patrick Industries Six Months 2014 Results = = & Toto Net % (sm tnousands except per share aatay] 82072014 | %oNet [08079 | to Net MM = Net Sales $ 358,005 $ 301,696 Cost of Goods Sold 299,039 83.5% 254,100 84.2% Gross Profit 58,966 16.5% 47,596 15.8% Warehouse & Delivery 12,771 3.6% 9.246 3.1% Sell
Slide 24: Balance Sheet Summary
Balance Sheet Summary Trade Receivables, net 45,475 22,644 $ 31,963 = Inventories 73,334 56,510 51,674 e Other Current Assets 9,780 8,545 14,143 Property, Plant & Equipment, net 46,763 42,117 37,589 Goodwill 29,470 16,495 10,362 Intangible Assets, net 47,990 25,611 18,179 Other Non-Current Assets 24
Slide 25: Cash Flow Summary
REESE 213! Cash Flow Summary Msinmovsangsy | scyzone | “eso 3013 ‘Cash Flows From Operating Activities: Net income Depreciation & amortization Deferred financing amortization Slock compensationtdeferred compensation/OTA/other Changes in operating assets & liabilities, net Net cash provided by operat
Slide 26: Net Sales
= =| (miions) $700 $600 $500 $400 $300 $200 $100 $437 $308 % Be % Net Sales * 2014 sales increased 17.7% — RV: 19% revenue increase & 75% of 20'14 sales — MH: 5% revenue increase & 14% of 20'14 sales — Industrial markets: 23% revenue increase & 11% of 20’14 sales $358 $302 + 6M ‘14 sales increased 1
Slide 27: Gross Margin Trends
Gross Margin Trends = Our gross margins have been improving consistent with our acquisition and strategic 5 growth plans, We do experience quarterly variability in gross margins based on = commodity pricing and competitive market conditions, MaEE TILE 18% aad 16.9% 15.8% 15.8% a8 16% 15.4%. 10.2%, 8
Slide 28: Net Income & Diluted EPS Summary
Net Income & Diluted EPS Summary (Reported / Adjusted) 2011 - Six Months 2014 | Net Income Net Income — Adjusted* = | toitions) (rnitions) = =< & 50 eso $30.0 SE 230 5250 $200 $147 $16.1 $15.0 $150“ g55 si09 — ma = = soo (55.0) 20112012 2013613614 Pan oe Diluted EPS Diluted EPS — Adjusted* (per shar
Slide 29: Supplementary Schedules
Supplementary Schedules |Ropocod net income (GAAP) [acjustment factors \Wite-off unamorized deoburt on suborinaled noes Premiums paid on prepayment of subordinated notes Gain on sale offixed assets & aoquistion of business ‘Stook warrants revaluation Recelvabis recovery Income taxes (credit) [Adjust
Slide 30: Leverage Position
Leverage Position = — = Our leverage position improved significantly since the recession and we have ample 5 = cushion to increase leverage to support our future growth opportunities in conjunction | _ with our capital allocation strategy and strategic plan. Leverage Position Trend Leverage (Funded
Slide 31: Stock price performance and market capitalization
= = Our stock price performance has experienced dramatic growth and has trended Stock Price Trend (Jan. 2011 - July 2014) & consistent with our operating and financial results. $45.00 $40.00 $35.00 $30.00 Price & 25.00 i $20.00 $15.00 stoa $10.00 $5.00 $0.00 Monthly Closing Stock Price Trend 5 *,%,
Slide 32: Stock Trading Volumes (Jan. 2011 - July 2014)
Stock Trading Volumes (Jan. 2011 - July 2014) ‘After our monthly trading volumes spiked in fiscal 2012, we are continuing to see solid = average dally volumes at much higher share prices. BRST EY: Monthly Stock Trading Volumes
Slide 33: Patrick's Products and Segments
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Slide 34: Patrick's Manufactured Products
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Slide 35: Made-to-order laminated products
Made-to-order laminated products luding vinyl, paper, veneers and igh pressure laminates (HPL) > ‘Gatto size, botng fling & edge- banding is * = Sold surface, granite & quartz Countertop fabrication Wrapped profile mouldings Cabinet doors & components Hardwood furniture Countertops, Fabricated alumi
Slide 36: Manufactured Products
Manufactured Products » Made-to-order laminated products including vinyl, paper, veneers and high pressure laminates (HPL) * "Gut to size, boring olin & edge banding is * ” > Solid surface, granite & quartz Countertop fabrication Wrapped profile mouldings Cabinet doors & components Hardwood furnitur
Slide 37: Patrick's Distribution
MaEE TILE Patrick’s Distribution —_
Slide 38: Distribution Products
Distribution Products Pre-finished wall and ceiling panels r= I a 2 Drywall & drywall finishing products Electronics Wiring, electrical & plumbing products Interior & exterior lighting products Interior passage doors Recliners, mattresses & other furniture | Roofing products FRP sheet & coil Laminat
Slide 39: Distribution Products
Distribution Produ Pre-finished wall and ceiling panels Drywall & drywall finishing products Electronics Wiring, electrical & plumbing products Interior & exterior lighting products Interior passage doors Recliners, mattresses & other furniture Roofing products FRP sheet & coil Laminate ceramic floo
Slide 40: Information Contacts
Information Contacts ‘Andy Nemeth Chief Financial Officer (574) 294-7511 nemetha@patrickind.com Airy Julie Ann Kotowski Director of Investor Relations (574) 294-7511 kotowskj@patrickind.com _ Analyst Coverage y > CIs Securities Daniel Moore dmoore@¢js-securi ve A ‘Sidoti & Company, LLC Scott Stember