Slide 1: May 2023 Investor Presentation
May 2023 INVESTOR PRESENTATION
Slide 2: Forward-looking statements and non-GAAP disclosure
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: Patrick at a Glance
3 Team members 11,000 Years of Success 64 Facilities 250+ Q1’23 TTM Revenue $4.4B Q1’23 TTM Diluted EPS $10.25 Breadth and depth of talent and resources drives innovative customer solutions Strong portfolio unifies historically fragmented landscape Investments in automation, human capital and IT sup
Slide 4: Nationwide footprint and end-market positioning
Nationwide manufacturing and distribution footprint provides geographic advantage over competitors Aligned with long-term secular growth in housing demand, specifically for affordable housing through manufactured housing (“MH”) and multifamily builds Home improvement and DIY activity driven by work-
Slide 5: Executive management team
Andy Nemeth CEO Jeff Rodino President Jake Petkovich CFO Kip Ellis COO 31 years Industry experience 29 years Industry experience 27 years Industry experience 26 years Industry experience • 100+ years of industry experience spanning across multiple economic cycles • Management team is adaptable and e
Slide 6: Net sales, net income, EBITDA and EPS history
$308 $437 $595 $736 $920 $1,222 $1,636 $2,263 $2,337 $2,487 $4,078 $4,882 $4,440 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 $246 $21 $37 $53 $71 $106 $122 $200 $280 $250 $329 $531 $674 $566 $0.37 $1.17 $0.99 $1.27 $1.81 $2.
Slide 7: Net sales and margin growth, portfolio broadening
48% 25% 27% RV Marine Housing $4.4B Net Sales Grew by $2.8 Billion after Five Years $1.6B Broadening our Portfolio (Net Sales Composition as %) Q1’23 TTM Growing Marine Market Penetration Impressive Net Sales and Margin Growth (2017-Q1’23 TTM) Experienced Provider in RV and Affordable Housing Gross
Slide 8: Patrick
PATRICK
Slide 9: Nimble model with strategies for various economic environments
Levers Available in Downturn • Reduce discretionary capex / low level of maintenance capex • Flex direct labor rapidly / wage reductions • Monetization of working capital • Facility consolidations / capacity rationalization Strategies for Leveraging Growth • Investing in margin-accretive businesses
Slide 10: Market insights: Marine
MARKET INSIGHTS: RV • Supply chain relief improving depleted dealer inventories headed into spring selling season • Growing aftermarket presence MARINE NET SALES ($M) TTM CONTENT PER WHOLESALE UNIT $274 $329 $339 $665 $1,038 $1,092 2018 2019 2020 2021 2022 Q1 '23 TTM $1,169 $1,730 $2,069 $3,632 $5,1
Slide 11: Market insights: RV
: RV • Young and Diverse groups purchasing RVs • Expecting a return to normal seasonal patterns • Disciplined OEM production provides long-term market health RV NET SALES ($M) TTM CONTENT PER WHOLESALE UNIT $1,434 $1,287 $1,392 $2,404 $2,593 $2,139 2018 2019 2020 2021 2022 Q1'23 TTM $2,965 $3,170 $3
Slide 12: RV and marine industry shipments
FY 2021 FY 2022FY 2020 WholesaleWholesaleWholesale Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Retail Wholesale 493,300 Retail Wholesale 234,800 163,700 1 Company estimates based on data published by the National Marine Manufacturers Association/ Statistical Surveys
Slide 13: Market insights: Housing
MARKET INSIGHTS: RV • Despite historically low affordable home ownership and limited home supply, total stick-built housing starts continue to decline in part due to rising interest rates • MH offers solution to the affordable housing shortage HOUSING NET SALES ($M) MH TTM CONTENT PER WHOLESALE UNIT
Slide 14: Q1 2023 highlights
• Marine revenue growth partially offset revenue declines in RV and Housing end markets • RV OEMs reduced production to better align dealer inventory with end user demand • Marine inventory continued to rebuild as estimated powerboat shipments increased year-over-year • Housing revenue declined due
Slide 15: Q1 2023 results by end market
28% of Q1’23 Sales Revenue of $276M Revenue of $257M Industry Shipments1 Housing Starts (Y/Y) CPU3 of $5,349 CPU3 of $5,266 MH CPU3 of $6,353 Industry Shipments2 Manufactured Housing (“MH”) Industry Shipments2 (55%) +22% (54%) +25% +14% +27% 31% of Q1’23 Sales41% of Q1’23 Sales Revenue of $367M (14%
Slide 16: End market outlook and industry drivers
MH BASKET COMPANIES2: PATK: (29%) 78,600 84,000 53,800 34,300 • OEMs acting with discipline, maintaining reduced production schedules to manage dealer inventories • Favorable long-term demographic trends, including growing penetration of Millennial and Gen Z consumers • Certain commodity and freight
Slide 17: Q1 2023 net sales, operating income and EPS
Series1 Series2 Series3 $4.54 $1.35 $162 $56 12.1% 6.2% • Net Sales declined 33% as Marine revenue growth partially mitigated a 55% reduction in RV revenue and 14% reduction in Housing revenue • Gross margin remained stable due to improved mix of Marine revenue despite sharp RV industry volume decli
Slide 18: Debt, liquidity and covenants
• $150.0M Term Loan ($135.0M o/s), scheduled quarterly installments; balance due August 2027 • $775.0M ($310.0M 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 M
Slide 19: Capital allocation
$117 $212 $66 $91 $11 $8 $29 $45 $53 $9 $121 $202 $50 $264 $80 $256 $183 $68 $35 $152 $35 Acquisitions Capital Expenditures Share Buybacks Dividends ($ millions) Our capital allocation strategy seeks to balance prioritizing shareholder value with strategic business growth for near and long-term succ
Slide 20: Growth engine
These Growth Initiatives have resulted in Patrick becoming a leading component solutions provider in the Leisure Lifestyle and Housing markets GROWTH ENGINE STRATEGIC ACQUISITIONS Pursue accretive acquisition opportunities to further strengthen primary markets and explore potential adjacent markets
Slide 21: Acquisition strategic criteria
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 > Cost of Capital Accretive to Profit Margins 21
Slide 22: Our values
22 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 co
Slide 23: Appendix
Slide 24: Reconciliation of net leverage
RECONCILIATION OF NET LEVERAGE Use of Non-GAAP Financial Information * As defined by credit agreement which includes debt and cash balances -Earnings before interest, taxes, depreciation and amortization (“EBITDA”), Pro-Forma Adjusted EBITDA, and Net Debt to Pro-Forma Adjusted EBITDA are non-GAAP fi
Slide 25: RV, marine and manufactured housing product categories
Single-Section Homes Multi-Section Homes ASP: $72,600 | 42% of Market ASP: $132,000 | 58% of Market TOWABLE Shipments: 91% Wholesale | 68% Retail Value MOTORIZED Shipments: 9% Wholesale | 32% Retail Value Travel Trailer | ASP: $28,300 Fifth Wheel | ASP: $67,100 Class A | ASP: $257,600 Class B & C |
Slide 26: Products by end market
Fiberglass and Plastic Thermoformed Helm Systems Wiring and Wire Harnesses Electrical Systems and Components Fabricated Aluminum and Steel Components Boat Covers, Towers, Tops and Frames Anchoring, Docking and Boarding Vinyl and Paper Laminated Products Surface, Granite and Quartz Countertops Vinyl,
Slide 27: 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 27
Slide 28: 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 29: Additional supplied products: RV and 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 30: Additional supplied products: 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