Patrick Industries, Inc. · NASDAQ:PATK
Patrick Industries — Investor Day (December 2024)
108 slides from Patrick Industries's investor day presentation, Dec 3, 2024
Slide 1: Patrick Industries Investor Day
Patrick Industries Investor Day December 3, 2024
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation and related remarks by management may include “forward-looking statements” within the meaning of the U.S. federal securities laws. Forward-looking statements are any statements other than statements of historical fact. Forward-looking statements represent
Slide 3: Agenda
Agenda Time (EST) Agenda Overview Steve O’Hara, VP – Investor Relations 10:30am Welcome & Overview Andy Nemeth, Chief Executive Officer 10:50 - 11:20am End Market Performance & Future Growth RV Jeff Rodino, President – RV Marine Rick Reyenger, President – Marine Powersports Kip Ellis, President – Po
Slide 4: Welcome and Company Overview
Welcome and Company Overview Andy Nemeth, Chief Executive Officer 4
Slide 5: Welcome: Investor Day Takeaways
Welcome Investor Day Takeaways • Company Vision • Strength and Experience of the Team • Competitive Advantage • Earnings Power • Shareholder Value 5
Slide 6: Our Purpose: We Are Enthusiasts
Our Purpose: We Are Enthusiasts Andy Nemeth Jeff Rodino Kip Ellis Richard Reyenger Andy Roeder Stacey Amundson Hugo Gonzalez Chairman & CEO President - RV President – Powersports, President - Marine EVP – Finance, EVP & Chief HR Officer EVP – Operations & Technology & Housing CFO & Treasurer COO Joe
Slide 7: Patrick at a glance: leading component solutions provider
RV MARINE POWERSPORTS HOUSING Q3’24 TTM Revenue Q3’24 TTM Revenue Q3’24 TTM Revenue Q3’24 TTM Revenue $1.62B $596M $298M $1.14B Patrick (NASDAQ: PATK) is a leading component solutions provider for the RV, Marine, Powersports and Housing markets NET SALES (Q3’24 TTM) $3.7B OUTDOOR ENTHUSIAST Adjusted
Slide 8: Accelerated Growth Through Strategic Diversification
Accelerated Growth Through REVENUE MIX % Strategic Diversification Q3 2024 TTM : $3.7B POWERSPORTS REVENUE MIX % 8% 2017 : $1.6B REVENUE MIX % 2010 : $278M HOUSING HOUSING RV 24% 31% 45% RV HOUSING 7% 69% RV MARINE 42% 58% MARINE 16% $6,518 $298 CPU PER $4,887 $3,936 MARKET1,2 $1,576 $662 $0 REVENUE
Slide 9: Patrick Timeline
Patrick Timeline Marine Tontine Capital Market Aftermarket Strategy Patrick Public Investment in Strategy & Platform with Patrick Founding Listing Patrick Execution RecPro Acquisition 1959 1971 2005 2016 2024 1961 2007 2010 2022 Patrick Patrick Acquires RV Market Strategy Powersports Market Incorpor
Slide 10: Component Supplier Brand Based Strategy
Component Supplier Brand Based Strategy We Are BETTER Together! • Acquirer of choice in our markets • Entrepreneurial spirit, focus, and strategy • Maintain Brand "DNA" and talent • Customer 1st trusted relationships and business model • Customers associate with the individual brands and the brand v
Slide 11: Track Record of Growth Driven by the Entrepreneurial Spirit
Track Record of Growth Driven by the Entrepreneurial Spirit NET SALES ($ IN MILLIONS) Powersports Marine $4,882 Housing RV $4,078 $3,651 $3,468 $2,487 $2,263 $2,337 $1,636 $1,222 $920 $595 $736 $437 $308 $278 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Q3'24 TTM RV Market S
Slide 12: Track Record of Margin and EPS Growth
Track Record of Margin and EPS Growth Driven by Diversification and Strategy Gross Margin 22.6% 22.7% 21.7% Diluted EPS (GAAP) 19.6% 18.4% 18.1% 18.5% 16.6% 17.1% $13.49 16.1% 16.5% 15.0% 15.3% 14.4% $9.63 10.7% $6.97 $6.50 $4.93 $3.85 $4.20 $3.48 $2.43 $1.81 $1.17 $0.99 $1.27 $0.06 $0.37 2010 2011
Slide 13: Vision & Capital Allocation Execution
Vision & Capital Allocation Execution Capital Allocation Execution - Acquisitions Vision Execution Plan REVENUE MIX • Capital Allocation - Up to ~$400M to Q3’24 TTM Aftermarket $500M Annually for Acquisitions Other Aftermarket 10%-15% 15% 5%-10% • Priority on Outdoor Enthusiasts Markets Housing and
Slide 14: Favorable Industry and Macro Trends
Favorable Industry and Macro Trends Target Demographic (US 35-44) Continues to Grow 1 50,000 48,000 46,000 Population (in thousands) 44,000 42,000 40,000 38,000 36,000 34,000 32,000 30,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2025E 2030E 2035E 1 2 U.S. Census Bureau
Slide 15: Our Markets and our Operating Model are Well-Positioned
Our Markets and our Operating 2 Wholesale Shipments (in thousands) 2024E 1 Model are Well-Positioned RV 600 505 484 493 Flexible business model to quickly align with 431 430 Average 406 industry demand 357 374 313 High variable cost model Flexible working capital 325 Highly scalable capacity M
Slide 16: Multiple Growth Avenues Exist
Organic Growth1 We target 2-3% organic growth annually Over the last 5 years, organic growth averaged 4% net of pricing Strategic Acquisitions MULTIPLE We have specifically identified an acquisition pipeline within our Outdoor GROWTH Enthusiast markets representing ~$4B with acquisition targets rang
Slide 17: Guided by the Entrepreneurial Spirit and Ready for the Future
2025+ Guided by the Entrepreneurial Spirit Our Markets are Poised for the next Upcycle with Lean and Ready for the Future Inventories in the Channel Demographic Trends are Positive We are focused on being a Component Solutions 2010 - 2024 Provider to our Markets Our Acquisition Pipeline is Strategic
Slide 18: RV End Market
RV End Market Jeff Rodino, President – RV
Slide 19: RV End Market Ready for Rebound
RV End Market Ready for Rebound We believe the RV industry is positioned for a rebound, with dealer inventory levels well below historical averages. With interest rates easing and inflation stabilizing, we believe the roadblocks to a retail demand inflection have been reduced. MARKETS RV MARINE POWE
Slide 20: Strategic Portfolio Development: RV
Strategic Portfolio Development Strength Resilience Results Quality Hardwoods Blazon International Group 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 RV Market Strategy Execution 20
Slide 21: RV: $1.6B Revenue and Content Per Unit
RV REVENUE & RV WHOLESALE SHIPMENTS ($ IN MILLIONS) $2,593 $2,404 $1,503 $1,620 $1,287 $1,392 REVENUE (Q3’24 TTM) $1.6B 406K UNITS 331K 324K UNITS UNITS % OF REVENUE (Q3’24 TTM) 2019 2020 2021 2022 2023 Q3'24 TTM 45% RV CONTENT PER UNIT1,2 TAM CPU CAGR 2019-Q3’24 TTM $12,000 +10% $5,257 $4,800 $4,88
Slide 22: Established Supplier of Choice for RV OEMs
Established Supplier of Choice for RV OEMs CAPABILITIES AND EXPERTISE • Lamination • Hardwood and softwood manufacturing • Countertop fabrication • Interior design • Fiberglass manufacturing • Metal fabrication • Wire fabrication • Plastics & adhesives • Transportation • Furniture • Distribution and
Slide 23: Established Supplier of Choice for RV OEMs
Established Supplier of Choice for RV OEMs ROOFING & FIBERGLASS & TRUSSES COMPOSITES CABINET DOORS DASH PANELS SOLAR & POWER SOLUTIONS PAINT PLASTICS & COUNTERTOPS ADHESIVES FAUCETS & SINKS LAMINATED PANELS FLOORING HOLDING FURNITURE TANKS ALUMINUM SIDEWALLS Featured product categories are only a sa
Slide 24: Establishing our Presence in Aftermarket with RecPro
Establishing our Presence in Aftermarket We believe we can expect to double with RecPro RecPro’s revenues within 3-5 years 3 Key Initiatives Expanded Product Offerings 1 Brand Content Development Expansion Brand Control New OEM Product Introduction OEM 2 and Dealer Custom Part Number-based Packages
Slide 25: RV Competitive Advantages and TAM
Competitive TAM 1 Advantages Our Total Addressable Market is more than double our Q3’24 TTM CPU • Customer Relationships $12,000 • Experienced and Seasoned Team • Scalability and Financial Resources $4,887 • Patrick Studio and Design Center Q3’24 TTM TAM • Component Solutions Model • Advanced Produc
Slide 26: Marine End Market
Marine End Market Rick Reyenger, President – Marine
Slide 27: Marine End Market: Poised to Deliver
Marine End Market Poised to Deliver Diversification gains have transitioned into accelerated portfolio optimization efforts as the marine industry experienced a down cycle the last 18 months. Market-leading innovation efforts coupled with harmonization within the portfolio will continue to create va
Slide 28: Marine: $596M Revenue and Content Per Unit
MARINE REVENUE & WHOLESALE SHIPMENTS ($ IN MILLIONS) $914 $783 $665 $596 REVENUE (Q3’24 TTM) $329 $339 $596M 190K UNITS 151K UNITS % OF REVENUE (Q3’24 TTM) 2019 2020 2021 2022 2023 Q3'24 TTM 16% MARINE CONTENT PER UNIT1,2 TAM REVENUE CAGR 2019-Q3’24 TTM +13% $17,000 $3,356 $4,430 $4,069 $3,936 $1,73
Slide 29: Strategic Portfolio Development: Marine
Strategic Portfolio Development Strength Resilience Results 2016 2017 2018 2019 2020 2021 2022 2023 2024 Marine Market Strategy Execution 2016 29
Slide 30: Marine capabilities and expertise
From product design and development to aftermarket accessories, our brands deliver added value through CAPABILITIES AND EXPERTISE innovative, highly-engineered component solutions • Concept and design, engineering, and tooling fiberglass plugs, molds and stringer systems • Metal fabrication • Fiberg
Slide 31: Marine product categories
From product design and development to aftermarket accessories, our brands deliver added value through innovative, highly-engineered component solutions TOWERS & T-TOPS PROTECTIVE COVERS SHADE SOLUTIONS WINDSHIELDS DESIGN SERVICES AUDIO & ELECTRICAL SOLUTIONS SEATING & FURNITURE DASH ASSEMBLIES SEAD
Slide 32: Full Solutions Vision: From Concept to Completion
Full Solutions Vision From CONCEPT to COMPLETION • Providing marine manufacturers, a comprehensive and cohesive tooling design during model conception inclusive of Patrick brands leveraging the Marine Concepts design partnership • Design center in key Florida location to showcase to customers our st
Slide 33: Geographically Aligned with OEMs
Geographically Aligned KEY OEM LOCATIONS PATRICK MARINE LOCATIONS with OEMs We are strategically positioned near our customers to enhance timely delivery and collaboration Growing our core brands in alignment with strategic customers allows us to capitalize on our relationships and continue to drive
Slide 34: Marine Competitive Advantages and TAM
Competitive TAM 1 Advantages Estimated Total Addressable Market is more than 4x Q3’24 TTM CPU • Customer Relationships • Experienced and Seasoned Team $17,000 • Proximity to Customers • Scalability and Financial Resources $3,936 • Innovation and Advanced Product Group Q3’24 TTM TAM • Full Solutions
Slide 35: Powersports End Market
Powersports End Market Kip Ellis, President – Powersports, Technology and Housing
Slide 36: Powersports: Fueling Strategic Innovation
Powersports End Market Fueling Strategic Innovation Our powersports business fuels outdoor adventure with cutting-edge innovation and premium component solutions. From advanced engineering expertise to a robust aftermarket channel, we deliver next-level products to our customers. By harnessing our i
Slide 37: Strategic Portfolio Development: Powersports
Strategic Portfolio Development Strength Resilience Results 2022 2023 2024 Sportech Solidifies Powersports Market Strategy Powersports Execution Platform 2022 37
Slide 38: Powersports: $298M Revenue, $2B TAM
POWERSPORTS REVENUE ($ IN MILLIONS) $298 REVENUE (Q3’24 TTM) $298M $122 $103 % OF REVENUE (Q3’24 TTM) 8% 2022 2023 Q3'24 TTM REVENUE CAGR 2022-Q3’24 TTM +83% $2B TAM Including UTV and Recreational Segments within Powersports Not including potential in golf, motorcycles, and other adjacent segments M
Slide 39: Solidifying Industry Leading Powersports Platform
Solidifying Industry Leading Powersports Platform CAPABILITIES AND EXPERTISE • Roofs/Canopies • Wiper Systems • Integrated Door Systems • Premium Audio • Thermoforming • Windshield Systems • Drape Forming • Metal Fabrication • Fender Flares • Rear Panels • Manufacturing, Distribution and Rep Sales F
Slide 40: Powersports product categories
Solidifying Industry Leading Powersports Platform ROOFS / CANOPIES AUDIO REAR PANELS PREMIUM MIRRORS WINDSHIELDS WIPER SYSTEMS INTEGRATED DOOR SYSTEMS COWLS FENDER FLARES Featured product categories are only a sampling of Patrick’s capabilities. A more complete listing can be found in our most recen
Slide 41: Unlocking Synergies & Realized Wins from Sportech
ACCELERATING INNOVATION AND REALIZING SYNERGIES THROUGH ACQUISITION OF SPORTECH Unlocking Synergies & Leveraging Expertise Realized Wins …So far • Manufacturing Excellence & Technology Integration • Glass Sourcing • Comprehensive Solutions for Customers • Audio Roof • Growth Potential in Key Compone
Slide 42: Powersports Competitive Advantages and TAM
Competitive TAM 1 Advantages Total Addressable Market* is approximately 4x Q3’24 TTM revenue • Customer Relationships $2.0B • Experienced and Seasoned Team ~$0.4B • Innovation and Advanced Products 2024E TAM • Intellectual Property *Includes UTV and Recreational Segments of Powersports • Solution Mo
Slide 43: Housing End Market
Housing End Market Kip Ellis, President – Powersports, Technology and Housing
Slide 44: Housing End Market: Foundations for Growth
Housing End Market Foundations for Growth Affordable housing demand continues to be robust. As interest rates ease, our housing business is well- positioned with scalable operations and low capital needs. Our housing business provides a solid foundation and cash flow to invest across our diverse por
Slide 45: Housing: $1.14B Revenue and Content Per Unit
HOUSING REVENUE & MH WHOLESALE SHIPMENTS ($ IN MILLIONS) $1,272 $1,137 $1,008 $1,060 $721 $756 100K REVENUE (Q3’24 TTM) UNITS $1.14B 95K UNITS % OF REVENUE (Q3’24 TTM) 2019 2020 2021 2022 2023 Q3'24 TTM 31% MH CONTENT PER UNIT1,2 TAM REVENUE CAGR 2019-Q3’24 TTM +10% $13,000 $6,243 $6,372 $6,518 $4,6
Slide 46: Key Supplier to the Affordable Housing Sector
Key Supplier to the Affordable Housing Sector CAPABILITIES AND EXPERTISE • Plumbing • Flooring • Vinyl • Wood Mouldings • Lighting & Fixtures • Interior Finishes • Cabinets & Countertops • Wiring & Electrical • Walls & Framing • Kitchen & Bath • Roofing • Appliances • Manufacturing & Distribution Fe
Slide 47: Housing product categories
Key Supplier to the Affordable Housing Sector ROOFING INTERIOR FINISHES WIRING & PLUMBING ELECTRICAL WALLS & FRAMING LIGHTING & FIXTURES KITCHEN & BATH FLOORING CABINETRY APPLIANCES Featured product categories are only a sampling of Patrick’s capabilities. A more complete listing can be found in our
Slide 48: Delivering Component Solutions and Earning Customer Trust
Energy-efficient components becoming increasingly important in Delivering Component Manufactured Housing Solutions and Earning Patrick is the exclusive distributor of Rheem Customer Trust water heaters and Carrier furnaces, delivering half the points necessary for a home to be a Zero Energy Ready Ho
Slide 49: Lean Fixed Cost Model and Scalable Operational Structure
Lean Fixed Cost Model and Scalable Operational Structure Low capital Synergies with RV Market, expenditure Our Largest End Market footprint helps drive strong RV and Manufactured Housing share materials and components, creating low barriers and efficient maintenance cash flow Ability to shift conver
Slide 50: Housing Competitive Advantages and TAM
13% Competitive revenue growth YoY in Housing in Q3’24 TTM Advantages TAM 1 Our Manufactured Housing Total Addressable Market is double • Customer Relationships our current CPU at ~$6,500/MH unit • Experienced and Seasoned Team $13,000 • Scalable Operating Model $6,518 • National Distribution Footpr
Slide 51: Operational Excellence
Operational Excellence Hugo Gonzalez, Chief Operating Officer
Slide 52: Patrick Operational Structure
Operational Structure Safety First Agile Model The right environment Scalable to Meet the for success Market Patrick Cost Efficient Empowering Experts Going Above & Beyond Operational Flexible & Financially Structure Sound Fostering Innovation Brands Empowered Solutions Model by Patrick 52
Slide 53: This is Who We Are – Our People
This is Who We Are – Our People The Heart of Our Organization Our Team Total Brands ~10K 85+ Manufacturing Facilities Warehouse & Distribution Centers 170+ 60+ Transport Vehicles 1K+ 53
Slide 54: Simplicity in Managing - Scorecard Methodology
Simplicity in Managing - Scorecard Methodology Operating Performance Date Date Date Our OPERATIONAL STRENGTH is Sales empowering our PEOPLE Safety Key Metrics Material Cost: Critical to Quality Creating the Right Environment – It all Starts Operations Labor Planning with Safety Expense Controls Year
Slide 55: Automation for Enhanced Operational Excellence
Automation for Enhanced Operational Excellence Our Capital Deployment Strategy 1 Full Solutions Model 3 Process Improvement 2 Harnessing Robotics 55
Slide 56: Full Solutions Model: Gravure Ink
Gravure Ink is the leading PVC rotogravure printer for the RV industry We implemented a new extension of our laminates, giving our customers a new option for laminates that mostly come from overseas Reduced Inventory Increased Turns Added New Product Line Shortened Lead Time By 1 Full Solution
Slide 57: Process Improvement: Frontline
Frontline is the top tub and shower manufacturer in the region Frontline streamlined their process fabricating tubs and showers through an automated monorail Added Capacity Improved Organization Enhanced Work Environment Efficiency Improvement Process Improvement 2 +33% 57
Slide 58: Harnessing Robotics: NAFP
NAFP is a softwood mill & the largest roof truss manufacturer for the RV Industry NAFP’s investment in an automated truss assembly line that required 83% less human capital to operate, with opportunity to utilize our team in other areas Optimized Workflow Reduced Injury Risks Increased Capacit
Slide 59: With Our Capital Strategy Our Focus Is
With Our Capital Strategy Our Focus Is: We are creating the processes and products of the future Standardize difficult processes Ensure higher quality 1 standards Full Solutions Model Increase consistency Create new processing standards 3 Process Improvement 2 Generate new solutions for ou
Slide 60: Innovation and Growth Strategy
Innovation and Growth Strategy Through Our Brands and Entrepreneurs Increase our focus through our Advanced Product Group Acquire product lines 4 to enhance our end market offerings Generate innovative 3 products ahead of our markets 2 Create product extensions 1 TRANSFORMING the industry one SOLUTI
Slide 61: Advanced Product Group
Advanced Product Group Jim Schultz, VP – Operations
Slide 62: Transforming Our Industries With Advanced Innovation
Transforming Our Industries With Advanced Innovation Value Proposition Enhance customer relationships through partnership and development of innovative products in the spirit of the Full Solutions Model Strategic Goals Organic Growth Market Share Gains Margin Accretion 62
Slide 63: Advanced Product Group Revenue Streams
Advanced Product Group Revenue Streams 1 Customer Specific Developed for key customer partner to satisfy a solution gap 2 Introduction of highly innovative Disruptive for All products into the marketplace that can be sold to all OEMs 3 Aftermarket Solutions Solutions designed for Aftermarket channel
Slide 64: New Developments become Integral to Customers
New Developments become Integral to Customers, Solidifying Partnerships Discover Design Develop Deliver Conceptual Drawings Industrial Designs & Renderings CAD & BOM Development • Leading innovators are industry enthusiasts generating ideas for our customers to WIN in the marketplace • Product conce
Slide 65: Premium glass windshield solution for ski and wake market
Premium glass windshield solution for the ski and wake market with growth potential within entire powerboat industry • First to market with fully integrated windshield system • Enhances full suite of windshield solutions 65
Slide 66: Versatile composite component solution
Versatile composite component solution for Roofs, Ceilings, Interior and Exterior Sidewalls and Flooring Applications • 3-year development • Improved durability and supply chain reliability, increased capacity • Weight savings • More sustainable solution with better features and ease of installation
Slide 67: Cross-Market Opportunities with Acquired Brands
Step treads for RV market Cross-Market Opportunities with Acquired Brands & Product Capabilities • Enhances brand strength • Compounding benefits with full solution efforts • Significant run-way with recently acquired brands of Sportech and RecPro 67
Slide 68: M&A is in our DNA
M&A is in our DNA Andy Nemeth, CEO Andrea Williams, VP – Finance
Slide 69: Patrick Industries: Acquirer of Choice
Patrick Industries: Acquirer of Choice Building our Pipeline Through Industry Trust and Relationships Brand-fronted model We are a ‘plug and play' anchors strategy as acquirer targets are drawn to our commitment to We are a team of independence, growth, enthusiasts, seeking like- and preserving thei
Slide 70: M&A Process is Metrics Driven And Values Based
M&A Process is Metrics Driven And Values Based Metric & Value Driven Delivery Expectations Strong management team & cultural fit Margin accretion within the first year Successful business model Synergies: Within 12 – 18 months of close, we expect a 1 turn Innovative product lines improve
Slide 71: Acquisition Playbook
Due Diligence & Resources & Onboarding Synergies Diligence with integration in mind Driving value and scalability • Modular playbook tailored to each • Full solution model – sales & innovation transaction – risks & opportunities • Strategic sourcing leverage & emphasis transportation • Transaction c
Slide 72: M&A Difference Makers
M&A Difference Makers How our leadership and playbook drives results Deliver on performance Acquisition expectations playbook • Earnings accretion and Consistent modularity equals thoughtful execution of leadership team deliberate deals synergies driving effective • Strategic intent determines • Gro
Slide 73: Measuring Success: Investment Performance
Measuring Success: Investment Performance EBITDA MULTIPLE TARGET POST ACQUISITION1 RANGES FOR ACQUISITIONS BY END MARKET < 3 Years > 3 Years Effective multiple today 5x-6.5x 6x-7.5x 6x-7.5x around 3 turns lower 5x-6x Aftermarket RV Marine Powersports Housing Cumulative Current Effective Cumulative C
Slide 74: Building on Our Momentum in M&A
Building on Our Momentum in M&A • Driving Growth: Disciplined, strategic acquisitions are central to our growth • Entrepreneurial Culture: We seek acquisitions that align with our culture and enhance our portfolio • Proven Track Record: Our structured scoring approach drives continuous improvement •
Slide 75: Empowering Enthusiasts
Empowering Enthusiasts Anna Parker, VP – Marketing
Slide 76: Unlocking Brand Power
Unlocking Brand Power 2009 – 2016 STOCK PRICE % CHANGE Best Performing Stocks Since February 2009 1 Patrick Industries (PATK) 16000% 2 Jazz Pharmaceuticals (JAZZ) 13400% 3 Mitek Systems (MITK) 11900% 4 Natural Health Trends (NHTC) 8400% 5 MGP Ingredients (MGPI) 7200% 76
Slide 77: Betterway Products as Geremarie Patrick
BETTERWAY PRODUCTS AS GEREMARIE PATRICK
Slide 78: The Shift: From Behind-the-Scenes Supplier to Empowering Leader
The Shift: From Behind-the-Scenes Supplier to Empowering Leader FROM A humble, behind-the-scenes supplier content to take a back seat to the brands we serve and empower. 78
Slide 79: The Shift: From Behind-the-Scenes Supplier to Empowering Leader
The Shift: From Behind-the-Scenes Supplier to Empowering Leader FROM A humble, behind-the-scenes supplier content to take a back seat to the brands we serve and empower. TO An empowering leader—visible yet supportive, elevating our brands and customers by showcasing the people, Empowered by produ
Slide 80: Our Brand Strategy: Empowering Enthusiasts
Our Brand Strategy: Empowering Enthusiasts 1 2 3 Raising the Supporting our Growing with profile of our business units the outdoor brand and our to impact sales enthusiast brands markets 80
Slide 81: Harnessing the Enthusiast Spirit for Real Results
Harnessing the Enthusiast Spirit for Real Results EARNED MEDIA TRADE COVERAGE NATIONAL NEWSMEDIA SOCIAL GROWTH +70% Meta. Feb ‘24 – Nov ‘24 RECORD ENGAGEMENT 5,300+ QR CODE SCANS Flowcode. Scans Oct. '23 - Nov. '24 HIGH EFFICIENCY AI POWERED CONTENT INHOUSING 81
Slide 82: Empowered by Patrick: Leveraging the Network Effect
Empowered by Patrick: Leveraging the Network Effect of our Company BRANDING EFFICIENCY 82
Slide 83: Empowered by Patrick: Leveraging the Network Effect
Empowered by Patrick: Leveraging the Network Effect of our Company We are using our collective power and content marketing to position our brands as leaders, and Patrick as champion of the great outdoors, and the great indoors. 83
Slide 84: The Unstoppable Rise of Outdoor Recreation
The Unstoppable Rise of Outdoor Recreation $640 BILLION ENDURING DEMAND DRIVERS Outdoor recreation’s • The quest for adventure contribution to GDP in • The power of nature to restore us and connect us 2023, growing faster • The pull to find our tribe than overall U.S • The desire for both freedom an
Slide 85: Empowering Our People - The BETTER Together Way
Empowering Our People - The BETTER Together Way Todd Gongwer, EVP – Leadership and Cultural Development
Slide 86: BETTER TOGETHER
BETTER TOGETHER BETTER – Kaizen: Continuous improvement mindset TOGETHER – Synergy: Constant collaboration mindset Our commitment to being our best while striving to bring out the best in one another as we join forces individually, as teams, with our business units, with our customers, our communiti
Slide 87: Patrick Culture Structure
Patrick Culture Structure RV Housing Powersports Marine Leadership Leadership Leadership Leadership CUSTOMER CULTURE & ORGANIZATIONAL DELIVER THE INTRINSIC FOCUS STRATEGIC COMMUNITY STRATEGIC BUSINESS OPERATIONAL VALUE GROWTH OBJECTIVES EXCELLENCE EFFECTIVE LEADERSHIP BETTER VALUES PURPOSE PRACTICES
Slide 88: Leadership & Culture Development Methodology
Leadership & Culture 8,000+ TOTAL BETTER TOGETHER TEAM MEMBER IMMERSION HOURS Development Methodology BETTER Together Cultural Strength 80+% BRANDS COMPLETED BETTER TOGETHER IMMERSION 10K+ Brand Cultural Development “…[made me think about] how I can be a better person in life and for the company.” 2
Slide 89: Principles of Effective Leadership
Principles of Effective Leadership The Patrick Culture Communicate With Excellence Better Together Values Lead For Positive Embrace Influence Responsibility B BALANCE Lead With Humility E EXCELLENCE Build Healthy Lead With Accurate Self And Social Awareness T TRUST Accountability Be A Servant T TEAM
Slide 90: Financials & Outlook
Financials & Outlook Andy Roeder, EVP – Finance, Chief Financial Officer, and Treasurer
Slide 91: Key Financial Takeaways
Key Financial Takeaways 1 Strategic diversification 2 Expanding and durable margins 3 Strong cash flows and balance sheet 4 Disciplined capital allocation 5 We are well positioned for the next up-cycle 91
Slide 92: Market Outperformance / Strategic Diversification
Market Outperformance / Strategic Diversification RV End Market Marine End Market Powersports End Market Strategy Strategy Execution Strategy Execution Execution and Aftermarket Expansion Patrick PATK Average Quarterly PATK Revenue PATK Revenue Acquires CAGR Organic Growth 2023 – Q3’24 Adorn, LLC
Slide 93: 5-Year Financial Overview
5-Year Financial Overview 2019 to Q3 2024 TTM NET SALES GROSS & OPERATING MARGIN $ in millions 22.6% 22.7% 21.7% $4,882 19.6% $4,078 18.1% 18.5% $3,468 $3,651 $2,337 $2,487 10.2% Post Covid-19 8.6% 7.0% 7.5% 7.6% Surge in Demand 6.6% 2019 2020 2021 2022 2023 Q3'24 TTM 2019 2020 2021 2022 2023 Q3'24
Slide 94: Robust Free Cash Flow Generation Across Cycles
Robust Free Cash Flow Generation Across Cycles $450 700 $ in millions Q3’24 TTM Free Cash Flow1 $400 600 $277M $350 $350 406K $332 UNITS 500 $300 $277 Average Free Cash Flow1 400 Conversion2 2018 – 2023 $250 331K UNITS 147% $200 $166 $165 $187 300 $150 $128 200 $100 Aftermarket Solid free cash flow1
Slide 95: October 2024 Refinancing Reinforces Strong Balance Sheet
October 2024 Refinancing Reinforces Our Commitment to a Strong Balance Sheet and Ability to Execute on Growth Strategy Maturity Schedule at Quarter End (9/29/2024) Improved Maturity Schedule 1 Next major maturity in 2027 First major maturity in 2028 2024 2025 2026 2027 2028 2029 2024 2025 2026 2027
Slide 96: Capital Allocation Strategy
Capital Allocation Strategy to Historic Use of Cash (2019 - Q3’24 TTM)1 Seize Opportunities While Returning Value to Shareholders 8% Growth Initiatives Share 8% Buybacks Strategic capital expenditures Annual Maintenance 14% Dividends • $310M+ allocated since 2019 Capex ~$25 - $35M Capital Expenditur
Slide 97: Potential Capital Deployment Scenario
Key Developments • Upsized share repurchase authorization to $200 million Potential Capital Deployment Scenario • Increased quarterly dividend by 9% to $0.60 per share • Increased revolver capacity & extended maturity from 2027 to 2029 • Announced upcoming 3-for-2 stock split Excess liquidity ~$100M
Slide 98: Outlook for 2025
Outlook for 2025 Patrick Financial Outlook Adjusted Operating Margin1 2025 Assumptions +70 to 90 bps YoY Operating Cash Flow $390M to $410M Capital Expenditures $75M to $85M o Modest interest rate relief o Flat industry retail environment Industry Outlook2 Wholesale Retail o Moderate inflation RV +5
Slide 99: Operating Margin Target Range
Adjusted Annual Operating Margin Target Range Margin Growth Potential Remains Significant • Accretive acquisitions in RV, Marine, 16.0% Powersports & Aftermarket with high- 16% value, higher margin products 14% • Investments in automation driving operational efficiency 12% 12.0% • Utilizing our scal
Slide 100: Revenue Opportunity when RV and Marine Markets Inflect
Revenue Opportunity when RV and Marine Markets Inflect 45.0 RV Marine 40.0 Additional Revenue Marine Historical WOH1,2 Upside Available Through 35.0 Content Expansion 30.0 Driven By: RV Historical WOH1,2 25.0 • Market share gains 20.0 • RV OEMs shift away from 15.0 entry-level units 10.0 2015 2016 2
Slide 101: Significant Total Addressable Market Exists
Significant Total Addressable Market Exists CPU PER MARKET IN Q3 2024 VS. CPU TAM 2024E VS. REVENUE TAM $17,000 $13,000 $12,000 $2.0B $6,518 $4,887 $3,936 $0.4B Q3’24 CPU TAM Q3’24 CPU TAM Q3’24 CPU TAM 2024E TAM RV MARINE MH POWERSPORTS Company estimates of TAM only include product categories for w
Slide 102: Creating Value for our Shareholders
Creating Value for our Shareholders Market Capitalization Progression PATK Stock Performance vs. Russell 2000 (^RUT) +$1.9B in Five Years ~$3.2B $600 +430% $500 $400 ~$1.3B $300 $200 Aftermarket +65% $100 $0 2019 2020 2021 2022 2023 2024 YTD Patrick Industries, Inc. Russell 2000 *The stock price per
Slide 103: Conclusion
Conclusion Investor Day Takeaways • Company Vision • Strength and Experience of the Team • Competitive Advantage • Earnings Power • Shareholder Value 103
Slide 104: Empowering
EMPOWERING
Slide 105: Full Year 2024 Outlook
Full Year 2024 Outlook Patrick Industry Outlook Patrick Financial Outlook RV Wholesale RV Retail Unit Shipments 1 Unit Shipments 1 Adjusted Operating Margin 320K – 330K Down 8 – 10% Down 20 - 30 bps 3 vs 2023 vs 2023 vs 2023 313K 380K 7.5% Marine Wholesale Powerboat Marine Retail Powerboat Operating
Slide 106: Non-GAAP Reconciliations
Non-GAAP Reconciliations 1 Appendix Q3’24 RECONCILIATION OF ($ in millions) TTM NET INCOME TO Use of Non-GAAP Financial EBITDA TO PRO Net Income $155 Information FORMA ADJUSTED + Interest Expense, net 76 * As defined by credit agreement which EBITDA + Income Taxes 45 includes debt and cash balances
Slide 107: Non-GAAP Reconciliations
Non-GAAP Reconciliations 1 Appendix Q3 2024 TTM 2019 Use of Non-GAAP Financial RECONCILIATION OF Diluted earnings per common share $6.97 $3.85 Information ADJUSTED DILUTED Transaction costs, net of tax 0.17 0.01 EARNINGS PER Acquisition related fair-value inventory * As defined by credit agreement w
Slide 108: Balance Sheet and Liquidity as of Q3 2024
Balance Sheet and Liquidity as of Q3 2024 Appendix Strong Balance Sheet and Favorable Capital Structure to Support Investments and Pursue Attractive Growth Opportunities DEBT STRUCTURE AND MATURITIES NET LEVERAGE1 ($ in millions) • $150.0M Term Loan ($125.6M o/s), scheduled quarterly Total Debt Outs