Patrick Industries, Inc. · NASDAQ:PATK
Patrick Industries — Investor Presentation (November 2023)
25 slides from Patrick Industries's investor presentation, Nov 7, 2023
Slide 1: Investor Presentation November 2023
INVESTOR PRESENTATION November 2023
Slide 2: Forward-looking statements and non-GAAP measures
This presentation contains certain statements related to future results, 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. These forward-looking statements invol
Slide 3: Q3'23 TTM Highlights and Value Proposition
3 Team members 10,000 Years of Success 64 Facilities 250+ Q3’23 TTM Revenue $3.6B Q3’23 TTM Diluted EPS $6.78 Pro Forma Adjusted EBITDA $442M1 Free Cash Flow $412M1 Liquidity $700M Total Net Leverage 2.5x1,2 1 Non-GAAP metric. See appendix for reconciliation to closest GAAP metric | 2 As defined by
Slide 4: Sales by End Market
RV MARINE HOUSING PATRICK Sales by End Market 43% 28% 29% Q3’23 TTM RV HOUSING MARINE 69%7% 24% FY 2017 Extensive Supplier to OEMs with Growing Aftermarket Presence Strong OEM Relationships alongside Big Box Direct-To- Consumer Offerings $3.6B $1.6B Leading Component Solutions Provider to OEMs 43% Q
Slide 5: Strategically Built An Incredible Organization
$308 $437 $595 $736 $920 $1,222 $1,636 $2,263 $2,337 $2,487 $4,078 $4,882 $3,639 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Q1 23 TTm $8 $28 $24 $31 $42 $56 $86 $120 $90 $97 $225 $328 $152 $21 $37 $53 $71 $106 $122 $200 $280 $250 $329 $531 $674 $442 $0.37 $1.17 $0.99 $1.27 $1.81 $2.
Slide 6: Net Sales Grew by $2.0 Billion Since 2017
43% 28% 29% RV Marine Housing $3.6B Net Sales Grew by $2.0 Billion Since 2017 $1.6B Diversifying our Portfolio (Net Sales Composition as %) Q3’23 TTM Growing Marine Market Penetration Consistent Net Sales and Margin Growth (2017-Q3’23 TTM) Experienced Provider in RV and Affordable Housing Gross Marg
Slide 7: Target Demographic Continues to Grow
71 WGO Industries third annual spotlight survey | 2 US Census Bureau | 3RV Industry Association/SSI/Company Estimates | 4 NAR Realtor Confidence Index September 2023 | 5 The 2023 North American Camping & Outdoor Hospitality Report sponsored by Kampgrounds of America, Inc. | 6 Boat Trader Survey 2023
Slide 8: Industry shipments and 2023 outlook
Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Retail Wholesale Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Retail Wholesale FY 2021 FY 2022 WholesaleWholesale 493,300 1 Company estimates based on data published by the National Marine Manufacturers Associatio
Slide 9: Market Insight: Marine
Marine OEMs showcasing disciplined production in response to a dealer and consumer base impacted by higher interest rates We remain focused on growing our presence in marine and its aftermarket, which tends to be higher margin and more resilient MARINE NET SALES ($ in millions) TTM CONTENT PER WHOLE
Slide 10: Market Insight: RV
Q3’23 TTM revenue 12% higher than 2020 despite RV wholesale unit shipments being 27% lower End-consumer demographic trending younger and more diverse Disciplined OEM production improves long-term health of the market Dealers continued to reduce inventory through Q3’23 leaving inventory lean heading
Slide 11: Market Insight: Housing
Strong demand for affordable housing with limited inventory available MH remains an attractive option to those seeking affordable housing High mortgage rates are limiting the number of homes on the secondary market, further constricting supply $396 $555 $721 $756 $1,008 $1,251 $1,072 2017 2018 2019
Slide 12: Team Delivered Solid Performance in Dynamic Environment
TEAM DELIVERED SOLID PERFORMANCE IN DYNAMIC ENVIRONMENT DRIVING LONG-TERM GROWTH • Experienced, tested leadership team • Diverse end markets continue to support success • Solid cost control and strong balance sheet • Strategic deployment of capital BUSINESS TRANSFORMATION EVIDENT IN Q3 RESULTS Q3 20
Slide 13: Q3 2023 financial results
$2.43 $1.81 $93 $71 8.3% 8.2% • Net Sales declined 22%, mainly driven by a decline in shipments across our end markets and lower pricing, which was passed on to our customers to reflect changes in certain commodity costs, partially offset by market share gains • Gross margin improved 170 basis point
Slide 14: Debt, liquidity and covenants
• $150.0M Term Loan ($131.3M o/s), scheduled quarterly installments; balance due August 2027 • $775.0M ($85.0M o/s) Senior Secured Revolver, due August 2027 • $300.0M 7.50% Senior Notes, due October 2027 • $258.8M 1.75% Convertible Senior Notes, due December 2028 • $350.0M 4.75% Senior Notes, due Ma
Slide 15: Capital Allocation Strategy
$117 $212 $66 $91 $11 $8 $29 $45 $53 $9 $121 $202 $50 $264 $80 $256 $183 $68 $35 $152 $35 $60 $22 Acquisitions Capital Expenditures Share Buybacks Dividends Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 ($ in millions) Our Capita l Allocation Stra tegy Seeks To Balance Prioritizing Shareholder Value With Stra tegic Busin
Slide 16: Growth Initiatives: Leading Component Solutions Provider
These Growth Initia tives Have Resulted In Patrick Becoming A Leading Component Solutions Provider In The Leisure Lifestyle And Housing Markets PROFITABLE GROWTH ENGINE STRATEGIC ACQUISITIONS Pursue accretive acquisition opportunities to further strengthen primary markets and explore potential adjac
Slide 17: Strategic Criteria for Acquisitions
Strategic Criteria Strong Leadership Team and Cultural Fit Executable Revenue Synergies Geographic / Market Expansion Market Leadership Strong Track Record of Operational Success Key Market Category EPS Accretion in First Full Year ROIC > Internal hurdle rate Accretive to Profit Margins 17
Slide 18: Our Values
BALANCE We work to build a healthy work environment that encourages excellence, happiness, and peace in both our work and our home life. EXCELLENCE We strive to meet the highest possible standards of achievement in our work and relationships. TRUST We do what we say we will do every time — and commu
Slide 19: Appendix
Slide 20: Reconciliation of Net Leverage
RECONCILIATION OF NET LEVERAGE* -Earnings before interest, taxes, depreciation and amortization (“EBITDA”), Pro-Forma Adjusted EBITDA, and Net Debt to Pro-Forma Adjusted EBITDA are non-GAAP financial measures. In addition to reporting financial results in accordance with accounting principles genera
Slide 21: Product Categories: RV, Marine, Manufactured Housing
Single-Section Homes Multi-Section Homes ASP: $72,600 | 42% of Market ASP: $132,000 | 58% of Market TOWABLE Shipments: 88% Wholesale | 65% Retail Value MOTORIZED Shipments: 12% Wholesale | 35% Retail Value Travel Trailer | ASP: $32,100 Fifth Wheel | ASP: $74,200 Class A | ASP: $257,800 Class B & C |
Slide 22: Additional Supplied Products
Additional Supplied Products • Softwoods • Full Body Paint • Aluminum Gauges • Steel Gauges • Mill Finish & Pre-painted Aluminum and Steel • Slit & Embossed Steel • FRP Coil & Sheet • Trim Panels • Fuel Systems • Metal Extrusions 22
Slide 23: Additional Supplied Products
Additional Supplied Products • Exit Lighting • Power Cords & Inlets • RV Tank Heater Pads • Fire Extinguishers • Electric Fireplaces • Wiring, Electrical & Plumbing • Inverters • Tire Pressure Monitors • Electrical Switches, Receptacles, & Outlets • RV Transfer Switches • Battery Selector Switches •
Slide 24: Additional Supplied Products
Additional Supplied Products Softwoods Full Body Paint Aluminum Gauges Steel Gauges Mill Finish & Pre-painted Aluminum and Steel Slit & Embossed Steel FRP Coil & Sheet Trim Panels Fuel Systems Metal Extrusions Aluminum / Plastic Fuel & Holding Tanks Wire Harnesses Electronics Das
Slide 25: Additional Supplied Products
Additional Supplied Products Softwoods Full Body Paint Aluminum Gauges Steel Gauges Mill Finish & Pre-painted Aluminum and Steel Slit & Embossed Steel FRP Coil & Sheet Trim Panels Fuel Systems Metal Extrusions Interior Passage Doors Kitchen & Bath Faucets & Sinks Gypsum (Drywall
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