Slide 1: Investor Presentation October 7th, 2024
Investor Presentation October 7th, 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: Today's Presenters
Today’s Presenters Andy Nemeth Chairman & Chief Executive Officer Andy Roeder Chief Financial Officer 3 Matthew Filer Chief Accounting Officer
Slide 4: Company Overview
Company Overview
Slide 5: Empowering Enthusiasts: Outdoor Enthusiast Markets
EMPOWERING ENTHUSIASTS Outdoo r E n th u sia stM arkets 5 Q2’24 TTM NET SALES 45% 17% 31% 7%POWERSPORTS RV HOUSING MARINE ~10,000 TEAM MEMBERS BRANDS 85+ STATES 23 NET SALES (Q2’24 TTM) $3.6B VALUE PROPOSITION Patrick (NASDAQ: PATK) is a leading component solutions provider for the RV, Marine, Power
Slide 6: Ongoing Story of Growth
6 2010 - 2016 2017 - 2023 2024+ OPTIMIZE OUR LEGACY BUSINESSES DIVERSIFY OUR PORTFOLIO ACCELERATE OUR TRANSFORMATION Leverage realized synergies, utilize innovation playbook, and optimize core capabilities +28% PATK Net Sales CAGR Entered Marine market and invested in higher-engineered and aftermark
Slide 7: Serving the Outdoor Enthusiast and Housing Markets
7 Serving the Outdoor Enthusiast and Housing Markets POWERSPORTSRV HOUSING Leading Component Solutions Provider to RV OEMs $1.62B Q2’24 TTM Net Sales 45% % of Net Sales $239M Q2’24 TTM Net Sales 7% % of Net Sales Expanding OEM Relationships Through Customer Service and Scalability $1.10B Q2’24 TTM N
Slide 8: Established Supplier of Choice for RV OEMs
ESTABLISHED SUPPLIER OF CHOICE FOR RV OEMS MARINE POWERSPORTS HOUSINGRV MARKETS $1.62B NET SALES (Q2’24 TTM) % OF NET SALES (Q2’24 TTM) 45% CABINET DOORS FURNITURE PAINT ALUMINUM SIDEWALLS FIBERGLASS FLOORING LAMINATED PANELS FAUCETS & SINKS SOLAR COUNTERTOPS Featured product categories are only a s
Slide 9: Expected Market Bottoming with Low Dealer Inventory Levels
POWERSPORTSMARINE HOUSINGRV MARKETS $1,434 $1,287 $1,392 $2,404 $2,593 $1,503 $1,624 2018 2019 2020 2021 2022 2023 Q2'24 TTM RV NET SALES ($ in millions) +2% CAGR 2018-Q2’24 TTM END MARKET NET SALES DRIVERS RV net sales grew 17% y/y in Q2’24, fueled by a 7% improvement in RV wholesale unit shipments
Slide 10: Leading Supplier of Highly-Engineered, Value-Added Products (Marine)
MARINE POWERSPORTS HOUSINGRV MARKETS LEADING SUPPLIER OF HIGHLY- ENGINEERED, VALUE-ADDED PRODUCTS $631M NET SALES (Q2’24 TTM) % OF NET SALES (Q2’24 TTM) 17% TOWERS AND METAL FABRICATED & BILLET PARTS DESIGN SERVICES FOAM FLOORING ELECTRICAL (DASHES/ HELMS/HARNESS & AUDIO) PLYWOOD CANVAS & PROTECTIVE
Slide 11: Disciplined OEM Production in Higher Interest Rate Environment
POWERSPORTSMARINE HOUSINGRV MARKETS $274 $329 $339 $665 $914 $783 $631 2018 2019 2020 2021 2022 2023 Q2'24 TTM MARINE NET SALES ($ in millions) END MARKET NET SALES DRIVERS Wholesale powerboat unit shipments were down 27% in Q2’24 leading to a 30% decline in net sales y/y; during the same period ski
Slide 12: Solidifying Industry Leading Powersports Platform
$239M NET SALES (Q2’24 TTM) % OF NET SALES (Q2’24 TTM) 7% ROOFS/CANOPIES MIRRORS PREMIUM WINDSHIELDS COWLS INTEGRATED DOOR SYSTEMS AUDIO FENDER FLARES SOLIDIFYING INDUSTRY LEADING POWERSPORTS PLATFORM MARINE POWERSPORTS HOUSINGRV MARKETS LEADING PLATFORM OF BRANDS BUMPERS Featured product categories
Slide 13: Powersports Net Sales
$103 $122 $239 2022 2023 Q2'24 TTM POWERSPORTSMARINE HOUSINGRV MARKETS POWERSPORTS NET SALES ($ in millions) END MARKET NET SALES DRIVERS Sportech acquisition outperformed our initial expectations in the second quarter Utility side-by-side market remained resilient compared to broader powersports ca
Slide 14: Key Supplier to the Affordable Housing Sector
Featured product categories are only a sampling of Patrick’s capabilities. A more complete listing can be found in our most recent 10-K. KEY SUPPLIER TO THE AFFORDABLE HOUSING SECTOR MARINE POWERSPORTS HOUSINGRV MARKETS $1.10B NET SALES (Q2’24 TTM) % OF NET SALES (Q2’24 TTM) 31% LIGHTING & FIXTURES
Slide 15: Continued Strong Demand for Affordable Housing
$2,849 $4,616 $4,580 $5,153 $6,243 $6,372 $6,427 2018 2019 2020 2021 2022 2023 Q2'24 TTM POWERSPORTSMARINE HOUSINGRV MARKETS $555 $721 $756 $1,008 $1,272 $1,060 $1,103 2018 2019 2020 2021 2022 2023 Q2'24 TTM HOUSING NET SALES ($ in millions) END MARKET NET SALES DRIVERS MH shipments improved 19% y/y
Slide 16: Strategic Priorities
Trusted Partner and Supplier of Choice Strategic Priorities 16 Support our brands’ organic growth while remaining poised and ready to execute on strategic opportunities across the Outdoor Enthusiast and Housing markets CONTINUE STRATEGIC DIVERSIFICATION Maintain strong balance sheet and robust cash
Slide 17: Credit Highlights
Credit Highlights
Slide 18: Key Credit Highlights
Key Credit Highlights Track Record of Growth Driven by PATK’s Entrepreneurial Spirit Well-Positioned for Long-Term, Stable Growth Highlighted by Continued Diversification Nimble Platform Allows for Successful Navigation Through Economic Cycles Deep and Highly Experienced Leadership Team Robust Free
Slide 19: Track Record of Growth Driven by PATK's Entrepreneurial Spirit
$0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Q2'24 TTM RV Housing Marine Powersports $21 $37 $52 $71 $105 $138 $200 $280 $250 $329 $531 $674 $431 $492 Track Record of Growth Driven by PATK’s Entrepreneurial Spir
Slide 20: Robust Free Cash Flow Generation Across Cycles
$165 $128 $187 $332 $350 $348 63% $0 $0 $0 $1 $1 $1 $1 $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 2019 2020 2021 2022 2023 Q2'24 TTM Free Cash Flow Avg. Free Cash Flow Conversion $ in millions Robust Free Cash Flow Generation Across Cycles 2 FY’21 - ’22 Significant Free Cash Flow1 During Periods
Slide 21: Prudent Capital Allocation
Prudent Capital Allocation and… $93 $384 $650 $439 $146 $437 2019 2020 2021 2022 2023 Q2'24 TTM Acquisitions Capital Expenditures Share Buybacks Dividends Cash Flow Priorities Invest in Cash Flow Accretive Projects Automation and Investments in IT to Manage Costs Historic Use of Cash ($ in millions)
Slide 22: Favorable Demographic Trends
Favorable Demographic Trends Target Demographic (US 35-44) Continues to Grow 2 HOUSING RV MARINE OUTDOOR ENTHUSIAST Of current RV owners are between ages 18-341 22% Of Millennial and Gen Z RV owners plan to buy another RV of which 78% prefer to buy a new model1 84% Of realtors reported that properti
Slide 23: Nimble Platform Allows for Successful Navigation Through Economic Cycles
o High variable cost model o Flexible manufacturing process o Can adjust output quickly based on capacities and demand o Non-capital-intensive businesses o Flexible working capital Nimble Platform Allows for Successful Navigation Through Economic Cycles Flexible, high variable cost business model 1
Slide 24: Well-Positioned For Long-Term Stable Growth
Well-Positioned For Long-Term Stable Growth… These growth initiatives have resulted in Patrick becoming a leading component solutions provider in the Outdoor Enthusiast and Housing markets STRATEGIC ACQUISITIONS INNOVATION STRATEGIC GEOGRAPHIC POSITION Pursue accretive acquisition opportunities to f
Slide 25: Highlighted by Continued Diversification
$ in millions FY 2019 Q2’24 TTM Δ Wholesale RV Shipments 406,070 326,940 (19)% Total Net Sales $2,337 $3,597 +54% Total RV Sales $1,287 $1,624 +26% Total Marine Sales* $329 $631 +92% Total Housing Sales $721 $1,103 +53% Total Powersports Sales - $239 NM Gross Margin 18.1% 22.6% +450 bps Adjusted Ope
Slide 26: Deep and Highly Experienced Management Team
Deep and Highly Experienced Management Team o Average management team industry experience of ~25 years, spanning multiple economic cycles o Senior leadership team managed the Company through the last recession and have subsequently transformed the Company o Given deep industry experience, the manage
Slide 27: Financial Overview
Financial Overview
Slide 28: Historical Financial Overview
Historical Financial Overview $27 $32 $65 $80 $59 $55 2019 2020 2021 2022 2023 Q2'24 TTM $2,337 $2,487 $4,078 $4,882 $3,468 $3,597 2019 2020 2021 2022 2023 Q2'24 TTM $250 $329 $531 $674 $431 $492 10.7% 13.2% 13.0% 13.8% 12.4% 13.7% 2019 2020 2021 2022 2023 Q2'24 TTM PF Adj. EBITDA Margin Net Sales P
Slide 29: Q&A
Q&A
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Slide 31: Use of Non-GAAP Financial Information
Use of Non-GAAP Financial Information * As defined by credit agreement -Earnings before interest, taxes, depreciation and amortization (“EBITDA”), Pro-Forma Adjusted EBITDA, EBITDA Margin, Free Cash Flow, Adjusted Operating Margin, Net Debt and Pro Forma Total Net Leverage are non-GAAP financial mea
Slide 32: Empowering Enthusiasts
EMPOWERING Pol