Patrick Industries, Inc. · NASDAQ:PATK
Patrick Industries — Investor Presentation (January 2020)
33 slides from Patrick Industries's investor presentation, Jan 8, 2020
Slide 1: Investor Presentation January 2020
August 2019 - Draft p Investor Presentation (Mockup version) Investor Presentation January 2020
Slide 2: Forward-Looking Statements
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 of 1995. Th
Slide 3: Company Highlights & Overview
Company Highlights & Overview PATK LISTED NASDAQ
Slide 4: Company Snapshot
Company Snapshot Founded in 1959 as a Today, operates as a key component manufacturer and supplier Manufactured Housing Supplier to the RV, Marine, Manufactured Housing and Industrial Markets Headquartered in Elkhart, Indiana Operates coast-to-coast in 23 states in the U.S. and in Canada, China and
Slide 5: Market Platform
Market Platform Over the last several years, we have strategically engaged in diversifying our market position in order to align our revenue stream with wholesale and retail trends across all four of our primary end markets Sales Composition 2016 2017 2018 RV – 72% RV – 69% RV – 63% Marine – 3% Mari
Slide 6: Strategic End Markets Overview
Strategic End Markets Overview Lifestyle & Leisure Housing & Industrial RV Marine Manufactured Industrial Housing Net Sales $1,299 million $339 million $400 million $281 million (LTM 9/29/19) Portfolio of Expertise Lamination/Custom Components Hardwoods/Softwoods/Cabinetry Thermoforming/Plastics Cou
Slide 7: Indicators and Demographics
Indicators and Demographics PATK LISTED NASDAQ
Slide 8: Macro Economic Indicators
Macro Economic Indicators While we have been experiencing some secular recalibration in each of our markets, we believe there are solid fundamental indicators that signal opportunities for growth in all of our end markets as we start the new year Good Caution Commentary Interest Rates Three rate cut
Slide 9: Favorable Demographic Trends
Favorable Demographic Trends A key population demographic supporting the industries we serve indicates future market upside potential US Population age 35 – 44 50,000 Key Key population population demographic is demographic poised to return to 48,000 begins to growth after a 14 decline year decline
Slide 10: Demographic Trends Across End Markets
Demographic Trends Across End Markets Favorable Demographic Trends Favorable Demographic Trends Lifestyle & Leisure Housing & Industrial Outdoor activities participation of U.S. U.S. adult population estimated to population has averaged 49% over the expand by 12 million between 2019 last five year
Slide 11: Industry Trends
Industry Trends PATK LISTED NASDAQ
Slide 12: Leisure Lifestyle Markets
Leisure Lifestyle Markets North American RV Unit Shipments1 U.S. Marine Retail Units Wholesale Units Retail Units (in thousands) (in thousands) 505 484 492 470 431 405 416 374 357 353 375 336 321 2007 - 2018 Average = 178,000 286 264 252 237 242 217 202 205 189 179 166 166 155 146 146 132 134 . Rece
Slide 13: RV Industry Trends
RV Industry Trends RV Market The prior 18 month RV trends continued into the third quarter with wholesale shipment declines still outpacing retail leaving dealer unit inventories at their lowest point since 2014 RV Shipments (shipments in thousands) Wholesale Retail 173.1 162.7 159.6 139.9 137.1 143
Slide 14: RV Retail & Inventories
RV Retail & Inventories RV Market RV Shipments Change YoY Wholesale Retail 40% Wholesale +5% Wholesale +15% Wholesale +17% Wholesale -4% Q3'19 YTD Wholesale -18% Retail +13% Retail +11% Retail +13% Retail +4% Q3'19 YTD Retail -7% 30% 20% 10% The destocking that has 0% -7% occurred over the last 18 m
Slide 15: RV Content per Unit
RV Content per Unit RV Market Folding Camper (Calculated on a TTM basis) 100% Truckmarket Camper share in $8,000 our existing products wouldMotorized: yield a total Type B potentialType C content/unit Total B & ofC $8,000 $3,132 $2,875 ASP -2017 Towables: $2,009 $2,123 $1,488 $1,703 9% growthTra
Slide 16: Marine Industry Trends
Marine Industry Trends Marine Market Marine continues to have strong fundamental consumer demand, combined with aging boat inventories and the replacement cycle. Marine dealers and OEMs began to destock inventory in Q3 in reaction to first half of the year retail headwinds from volatile interest rat
Slide 17: Marine Content per Unit
Marine Content per Unit Marine Market (Powerboat Retail Unit - Calculated on a TTM Basis) 100% market share in our $9,000 existing products would yield a total potential content/unit of $9,000 55% growth in $1,623 $1,049 TTM content $417 $82 $144 per unit – Q3’19 vs. Q3’18 TTM Addressable Market
Slide 18: MH Industry Trends
MH Industry Trends MH Market Declining interest rates, reduced commodities and pent-up demand for quality, affordable housing should help drive opportunities for MH growth in Q4 MH Wholesale Shipment Trends 24% 23% 16% 14% 15% 15% 13% 11% 9% 9% 9% 7% 7% 7% 5% 2% -4% -9% -12% Q1-15 Q2-15 Q3-15 Q4-15
Slide 19: Growing Housing Demand
Growing Housing Demand MH Market Housing starts are a major driver for both Manufactured Homes and Industrial sales Total New Housing Starts 1990 – 2007 Average = 1.5MM 2012 – 2018 Average = 1.1MM 17% 18% 19% 19% 20% 21% 21% 21% 22% 18% 21% 23% 21% 13% 23% 14% 30% 25% 29% 33% 36% 17% 35% 29% 33% 20%
Slide 20: MH Content per Unit
MH Content per Unit MH Market (Calculated on a TTM basis) 100% market share in our existing products would yield a total $11,000 potential content/unit of $11,000 65% growth in $4,327 TTM content per unit – $2,628 $1,820 $1,901 $2,159 Q3’19 vs. Q3’18 TTM Addressable Market: ~$1.05 billion Single
Slide 21: Housing Market Trends
Housing Market Trends Industrial Market Lower interest rates, reduced commodities, and strength in the overall economy are driving new housing starts growth in Q4 New Housing Start Trends 17% 16% 13% 12% 7% 7% 8% 8% 5% 4% 4% 2% 2% 1% 0% -2% -1% -6% -8% Q1-15 Q2-15 Q3-15 Q4-16 Q1-17 Q2-17 Q3-17 Q4-18
Slide 22: Growth Initiatives & Capital Allocation Strategy
Growth Initiatives & Capital Allocation Strategy PATK LISTED NASDAQ
Slide 23: Organic and Strategic Growth
Organic and Strategic Growth Strong sales growth continues to be evident and reflects organic and strategic impact leading to more balanced and diverse end-markets Sales Growth Trends Sales Mix ($ in millions) 11% 11% 12% 11% 13% 12% Total CAGR = 32% 15% 14% 13% 13% 12% 18% 1% 2% 3% 7% +38% 12% $2,3
Slide 24: Cash Flow Generation and Growth
Cash Flow Generation and Growth ($ in millions except per share data) Strong free cash flow generation provides flexibility across operational, financial and strategic objectives Cash Flow from Free Cash Flow* Free Cash Flow per Share* Operating Activities* $7.03 89% $6.81 84% 86% 77% $200 $195 74%
Slide 25: Capital Allocation Strategy
Capital Allocation Strategy Our capital allocation strategy is centered around the utilization of strong cash flows, a balanced disciplined leverage position, and capital resources to grow and reinvest in the business model Historical Capital Allocation $ in millions $93 $171 $160 $274 $485 $48 Acqu
Slide 26: Capital Deployment
Capital Deployment Strategically and opportunistically deployed approximately $1.1B of capital over the last 5 years, while maintaining a disciplined leverage profile Capital Deployment Highlights $1.1B capital deployed . Strong cash flow generation $ in millions $485 . Flexible balance sheet and ef
Slide 27: Patrick Industries, Inc.
PAT IRICK< INDUSTRIES, INC. oe
Slide 28: Appendix
Appendix PATK LISTED NASDAQ
Slide 29: RV Products Overview – Interior
RV Products Overview – Interior Closet Closet & Passage Doors Fiberglass Bath Fixtures Cabinet Doors Hardware Mattresses & Shower Doors Kitchen & Bath Electronics Lighting Faucets & Sinks Vanity/Wall Microwaves Laminated Panels & Printed Vinyl Drawer Mirrors Laminate & Fronts & Countertops Sides Cer
Slide 30: RV Products Overview – Exterior
RV Products Overview – Exterior Dash Panels Front and Bow Trusses Exterior Speakers Rear Caps Additional Product Lines: . Softwoods . Full Body Paint . Aluminum Gauges . Steel Gauges . Mill Finish & Pre- Painted Aluminum and Steel . Slit & Embossed Steel . FRP Coil & Sheet . Trim Panels . Fuel Syste
Slide 31: Marine Products Overview
Marine Products Overview Electronics Helms Boat covers, tops, towers & frames Ladders Wire Harnesses Wire Screens Electronics Dash Assemblies Aluminum Fuel & Holding Tanks Dash Assemblies Seats Handrails Wire Harnesses Boat Hull Design & Tooling Aluminum Fuel & PATK Holding Tanks LISTED NASDAQ 31
Slide 32: MH Products Overview
MH Products Overview Kitchen & Bath Fiberglass Bath Fixtures & Shower Gypsum (Drywall & Faucets & Sinks Doors & Enclosures Drywall Finishing Wrapped Profile Moldings Plumbing Products Products) Siding Interior & Exterior Decorative Ceiling Fans Trusses Shingles Lighting Fixtures • Ventilation System
Slide 33: Non-GAAP Reconciliations
Non-GAAP Reconciliations Reconciliation of Cash Flow from Operations to Free Cash Flow ($ in millions) 2014 2015 2016 2017 2018 LTM 9/29/19 Cash Flow from Operations $ 46 $ 67 $ 97 $ 100 $ 200 $ 195 Less: Capital Expenditures (7) (8) (15) (22) (34) (31) Free Cash Flow $ 39 $ 59 $ 82 $ 77 $ 166 $ 164
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