Patrick Industries, Inc. · NASDAQ:PATK
Patrick Industries — Investor Presentation (March 2024)
30 slides from Patrick Industries's investor presentation, Mar 11, 2024
Slide 1: Investor Presentation March 2024
INVESTOR PRESENTATION March 2024
Slide 2: Forward-Looking Statements
This presentation includes contains statements that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally identified by words such as “estimates,” “guidance,” “expects,” ”anticipates,” “intends,” “plans,”
Slide 3: Patrick at a Glance
3 Team members 10,000 Years of Success 65 Facilities 250+ 2023 Revenue $3.5B 2023 Diluted EPS $6.50 Pro Forma Adjusted EBITDA $431M1 Free Cash Flow $350M1 Liquidity $780M Total Net Leverage 2.4x1,2 1 Non-GAAP metric. See appendix for reconciliation to closest GAAP metric | 2 As defined by credit agr
Slide 4: Leadership in the Markets We Serve
LEADERSHIP IN THE MARKETS WE SERVE RV MARINE HOUSING PATRICK Sales by End Market 43% 27% 30% FY 2023 RV HOUSING MARINE 69% 7% 24% FY 2017 Extensive Supplier to OEMs with Growing Aftermarket Presence Strong OEM Relationships Built Through Customer Service and Scalability $3.5B $1.6B Leading Component
Slide 5: Sportech Acquisition Enhances Coverage of the Outdoor Enthusiast Ecosystem
SPORTECH ACQUISITION ENHANCES COVERAGE OF THE OUTDOOR ENTHUSIAST ECOSYSTEM $2B+ Incremental TAM Strong Team & Cultural Fit Customer-Focused Scalable RV Platform, with “Good, Better, Best” range of products Highly-engineered products, serving OEMs and customers from early-design phase through the aft
Slide 6: Our Story
$308 $437 $595 $736 $920 $1,222 $1,636 $2,263 $2,337 $2,487 $4,078 $4,882 $3,468 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 $143 $21 $37 $53 $71 $106 $122 $200 $280 $250 $329 $531 $674 $431 $0.37 $1.17 $0.99 $1.27 $1.81 $2.
Slide 7: The Continued Evolution of Patrick Portfolio
43% 27% 30% $3.5B Net Sales Grew by Almost $2.0 Billion Since 2017 $1.6B Diversifying our Portfolio (Net Sales Composition as %) FY 2023 Consistent Net Sales and Margin Growth (2017-2023) Gross Margin 17.1% 22.6% + 550 bps Free Cash Flow $77M $350M + $273MM EBITDA Margin1 9.5% 11.7% + 220 bps FY 201
Slide 8: Favorable Long-Term Trends
FAVORABLE LONG-TERM TRENDS 1 WGO Industries third annual spotlight survey | 2 US Census Bureau | 3RV Industry Association/SSI/Company Estimates | 4 NAR Realtor Confidence Index December 2023 | 5 The 2023 North American Camping & Outdoor Hospitality Report sponsored by Kampgrounds of America, Inc. |
Slide 9: Marine & RV Markets Normalizing After Recent Period of Volatile Demand
FY 2022 Wholesale 493,300 1 Company estimates based on data published by the National Marine Manufacturers Association/ Statistical Surveys Inc. (SSI) I 2 Company estimates based on data from RV Industry Association/SSI Retail Wholesale 187,100 206,200 FY 2022 Retail 447,900 19,100 45,400 MARINE & R
Slide 10: Market Insight: Marine
Marine OEMs showcasing disciplined production in response to a dealer and consumer base impacted by higher interest rates We remain focused on growing our presence in marine and its aftermarket, which tends to be higher margin and more resilient MARINE NET SALES ($ in millions) TTM CONTENT PER WHOLE
Slide 11: Market Insight: RV
2023 revenue 33% higher than 2017 despite RV wholesale unit shipments being 38% lower End-consumer demographic trending younger and more diverse Disciplined OEM production improves long-term health of the market Dealers continued to reduce inventory in 2023, leaving inventory lean heading into 2024
Slide 12: Market Insight: Housing
Solid 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 $1,041 2017 2018 2019 2
Slide 13: Market Insight: Powersports
2018 2023 DRIVERS Powersports OEMs have been increasingly focused on UTV unit premiumization, driven by increasing cab content / full cab solutions, growing end user applications and use-case specific design. Sportech partners with its customers to facilitate unit premiumization and content innovati
Slide 14: Dedicated Team Drove Solid Results
DEDICATED TEAM DROVE SOLID RESULTS INVESTING IN OUR BUSINESSES • Diversification of end markets helps dampen cyclicality • Aggressive cost control, working capital management and strong balance sheet • Strategic deployment of capital • Experienced team members executing playbook through cycles BUSIN
Slide 15: Q4 2023 Quarterly Highlights
Q4 2023 QUARTERLY HIGHLIGHTS • RV revenue declined due to lower pricing passed on to customers, mix of entry-level units and continued decline in wholesale unit shipments • Marine OEMs maintained conservative stance given dealers sensitivity to higher floorplan costs and limited visibility into cons
Slide 16: Financial Strength to Support Growth
2024 2025 2026 2027 2028 2029 Revolver/Term Bond 1 As of 12/31/23 I 2 As defined by credit agreement I 3 Free Cash Flow / Net Income FINANCIAL STRENGTH TO SUPPORT GROWTH By Design: No Major Debt Obligations until 2027 Consolidated Net Leverage Ratio2 – 2.38x (Used for Pricing Purposes Only) Consolid
Slide 17: Covenants, Debt Structure and Liquidity
COVENANTS AND RATIOS1 DEBT STRUCTURE AND MATURITIES1 NET LEVERAGE2 ($ millions) LIQUIDITY1 ($ millions) 1 As of 12/31/23; 2 As defined by credit agreement Strong Balance Sheet and Favorable Capital Structure to Support Investments and Pursue Attractive Growth Opportunities • $150.0M Term Loan ($129.
Slide 18: 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 $22 Acquisitions Capital Expenditures Share Buybacks Dividends Q1 Q2 Q3 Q4 ($ in millions) Our Capital Allocation Strategy Seeks To Balance Prioritizing Shareholder Value With Strategic Business Growth For
Slide 19: FY 2024 Outlook
FY ‘23 Actual FY ‘24 Estimated2 Operating Margin 7.5% Up 30 to 50 bps Operating Cash Flows $409M $390M - $400M Free Cash Flow $350M $310M+ RV Wholesale Unit Shipments 313K 330K – 350K RV Retail Unit Shipments 379K Down 5 – 10% Marine Wholesale Powerboat Unit Shipments 192K Down 5 - 10% Marine Retail
Slide 20: Profitable Growth Engine
These Growth Initiatives 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 adjace
Slide 21: M&A Criteria and Filters for Successful Strategic Investments
M&A CRITERIA AND FILTERS FOR SUCCESSFUL STRATEGIC INVESTMENTS 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 >
Slide 22: 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 23: Appendix
APPENDIX
Slide 24: 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 25: RV, Marine and Manufactured Housing Product Categories
Single-Section Homes Multi-Section Homes ASP: $86,100 | 45% of Market ASP: $158,633 | 55% of Market TOWABLE Shipments: 85% Wholesale | 65% Retail Value MOTORIZED Shipments: 15% Wholesale | 35% Retail Value Travel Trailer | ASP: $32,100 Fifth Wheel | ASP: $74,200 Class A | ASP: $257,800 Class B & C |
Slide 26: Patrick Product Lines: RV Exterior
PATRICK PRODUCT LINES: RV EXTERIOR 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 26
Slide 27: Patrick Product Lines: RV Interior
PATRICK PRODUCT LINES: RV INTERIOR 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 Swi
Slide 28: Patrick Product Lines: Marine
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 29: Patrick Product Lines: Housing
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
Slide 30: Powersports
POWERSPORTS Sportech acquisition provides a unique opportunity to capitalize on strong organic growth in the expanding SxS/UTV market and unlocks a new M&A landscape to add depth and dimension to Patrick’s powersports Complementary Product Portfolio and Capabilities Across Powersports, Marine and RV
Patrick Industries — Investor Presentation (March 2024) on 6ix