Slide 1: Fourth Quarter 2013 Investor Presentation
2PATR rINIDLUISTRIES | INC. Fourth Quarter 2013 INVESTOR PRESENTATION = NASDAQ: PATK |
Slide 2: INDUSTRIES, INC. =
INDUSTRIES, INC. = : PATRICK : OQ : STOM INYLS EF —~ <«@ ®& & ~ Sieber niente Customer —({R YL) st Interior COMPONENTS: FAY my Lida) IARDWOO) r wee. (<" DWOOI S +, Wow (77 St Si de rw Caw FRONTLIN MANUFACTURIN Q , Becorarive “ - YNAMICS ere Stuck on Quality Gravure Ink@® ie PAT R KCI<
Slide 3: Forward-Looking Statements
Forward-Looking Statements This presentation contains certain statements related to future results, or states our i intentions, beliefs and expectations or predictions for the future which are forward-looking me statements as that term is defined in the Private Securities Litigation Reform Act of 19
Slide 4: Patrick Industries Highlights
BEER E23 y i Patrick Industries Highlights Patrick is a leading national manufacturer and distributor of a wide variety of building and component products for the RV, MH and Industrial markets. oo Strong leadership team and key players - top to bottom alignment and entrepreneurial culture Solid bala
Slide 5: Patrick Industries Overview
Patrick Industries Overview _ «Leading national RV market: 72% of 12M‘13 revenues oo supplier serving the , Ey - Includes laminated panels, countertops, | RV, MH & Industrial Trail wrapped mouldings, cabinet doors, markets HI wiring/electrical/plumbing, furniture, interior passage doors, exterior gr
Slide 6: Nationwide network of manufacturing and distribution centers
Patrick’s nationwide network of manufacturing and distribution centers reduces in-transit delivery time and cost to our customers. # of Centers (as of 12/31/13) Manufacturing 18 Distribution 16 PATRICK In
Slide 7: Sales Concentration By Market
Sales Concentration By Market The Increase In wholesale unit shipments In the RV market, new product _ Introductions, and the Impact of acquisitions over the lest 4 years contributed | = to an Increase In our RV market sales concentration. San] Ss { 2011 Actual Industry 2012 Actual Industry 2013 Act
Slide 8: RV market demand drivers
Pe eee EE Ef, Number of aging “Baby Boomers” Job security Changing & disposable lifestyle income trends Array of Attraction product to younger Availability of Consumer choices buyers financing confidence Demand Economical vacation + RV sales will continue to benefit from the aging baby-boomers. + Bu
Slide 9: RV Industry Shipment Trends
RV Industry Shipment Trends = After a dramatic rebound in 2070 from a 58% decline In unit shipments during the ' =I period 2006-2000, the RV industry has experienced steady growth. Trended shipment fen __ levels Indicate that there continues to be potential for future growth based on the depth | = o
Slide 10: RV Content Per Unit
= RV Content Per Unit = meat bs =I Se = With market share gains, new products and extension growth, and Bes : acquisitions, our RV unit content has grown 28% since Q4 of ‘42. "s $1,550 ; - - a $’s Sold / RV Unit Shipped* 8 $1,450 = o Lael N r?-4 $1,350 a N S g $1,250 a = oe nN 3 oe e $1,150 3 = = $1
Slide 11: MH Market Growth Factors
Affordability and quality Financing/ Genelimer credit E availability LS a confidence MH Market Growth Factors Market Growth Quality credit standards Number of aging Alternative housing availability incentives There is opportunity for moderate growth, with limited downside risk in the near-term, if v
Slide 12: MH Shipment Trends / Residential Housing Starts
MH Shipment Trends / Residential Housing Starts On average over the last 40 years, approximately three-fourths of total residential housing starts have been single family housing starts. Wholesale unit shipments in the MH industry averaged approximately 10% of the level of single-family housing star
Slide 13: MH Shipment Trends
MH Shipment Trends The recent deciine and subsequent rebound In the MH Industry hes been impacted by the residential housing crisis end related factors, some of which = were very similar to those thet caused the MH market to collapse in 1999. Ee Shipments (000's) 400 350 300 250 200 150 100 50 Loose
Slide 14: MH Content Per Unit
MH Content Per Unit Our content per unit shipped hes remained feiriy consistent despite the impect of our lergest Mi customer continuing to vertically integrate. While we may see content | variability on e periodic basis due to the market share this customer currently maintains, we believe we are we
Slide 15: Industrial Market Growth Factors
industrial Market Growth Factors Drivers of Consumer Demand Market Growth New construction growth NE 4 residential Consumer Existing housing Demand home construction Affordable interest rates Government incentives * 60% of Company's industrial revenue base tied directly to residential housing market
Slide 16: New Housing Starts Trends
New Housing Starts Trends =| We estimate thet approximately 60% of our Industrial revenue base is = directly tled to the residential housing market which eppears to have begun = its recovery. Our products have applicability in both new construction and =I remodel markets. 2,500 i. ry = ioe 2,068 2,0
Slide 17: Acquisition Strategy
EEERS EST: Acquisition Strategy We target organizations with: o Solid management teams o High quality product lines o Strong customer and supplier relationships ~ Patrick provides the acquired businesses with: o Opportunity to allow the creative entrepreneurial sprit of each to continue to thrive o
Slide 18: Growth Through Acquisition
- Growth Through Acquisition 2 Decor Mfg., Guely LLC (03/12) . " Hardwoods Adorn Holdings, Inc ne (01/10) largest acquisition in the Company’s hist 05/07 The Praxis Group (06/11) Creative Blazon Wood West Side Internationa of Designs, Inc. Furniture Group (09/12) (09/13) (08/10) he Side to 2008 2009
Slide 19: Acquisition Summary (2010 – 2013)
Acquisition Summary (2010 — 2013) PS Completed Price Sales* g Products & ADORN 01/2010 Quality Hardwoods Sales $2.0 MM $2 MM Manufacturing RV Cabinet Doors . ® : : : [Sas | paTRTcx Wiring, electrical, plumbing, ie 08/2010 Blazon International Group $3.8 MM $20 MM Distribution RV & MH and other build
Slide 20: Acquisition Summary (2010 - 2013) (continued)
Acquisition Summary (2010 - 2013) (continued) = se ees] Date Net Purchase] Annualized = “eal Completed Price Sales* Products tons ; bil =D RV,MH& Fiberglass bath fixtures . 09/2013 Frontline Mfg., Inc. $5.2 MM $15MM Manufacturing Industrial including tubs and showers EP RV, MH & 09/2013 Premier Conc
Slide 21: Financial Review
BREEEAI E12 PREY, December 31, 2013 Financial Review ie PAT R KCI<
Slide 22: Fourth Quarter Financial Summary
Tee Fourth Quarter Financial Summary Patrick Industries 4th Quarter 2013 Results % to Net ($ in thousands except per share data) 12/31/2013 Sales 12/31/2012 Net Sales $ 146,612 $ 106,128 Cost of Goods Sold 125,008 85.3% 91,560 86.3% Gross Profit 21,604 14.7% 14,568 13.7% Warehouse & Delivery 5,619 3
Slide 23: Twelve Months Financial Summary
Twelve Months Financial Summary =a Patrick Industries Twelve Months 2013 Results fase = = 9 ° i ($ in thousands except per share data) | 12/31/2013 | “CNet | 42/31/2012 | @1° Net be “in| Sales Sales ie = tess ic Net Sales $ 594,931 $ 437,367 one Cost of Goods Sold 503,908 84.7% 371,623 85.0% Gross P
Slide 24: Balance Sheet Summary
Balance Sheet Summary ($ in thousands) 12/31/2013 12/31/201 Trade Receivables, net $ 22,644 §$ 17,858 . Inventories 56,510 46,992 as Other Current Assets 8,545 8,820 Is Property, Plant & Equipment, net 42,117 37,069 Goodwill 16,495 10,362 Intangible Assets, net 25,611 19,219 Other Non-Current Assets
Slide 25: Cash Flow Summary
th d Twelve Months | Twelve Months (Sin thousands) 12/31/2013 12/31/2012 Cash Flows From Operating Activities: Net income S$ 24,040 $ 28,095 Depreciation & amortization 7,297 5,586 Stock warrants revaluation/ deferred financing amort/debt discount 430 3,106 Stock compensation/deferred compensation/o
Slide 26: Net Sales
Net Sales = = = = oy . = = (millions) ¢ 4Q ‘13 sales increased 38.1% hse = $700 * — RV: 43% revenue increase & 71% of a $595 4Q'13 sales $600 — MH: 13% revenue increase & 16% of 4Q'13 sales $500 — Industrial markets: 57% revenue $437 increase & 13% of 4Q’'13 sales #a00 * 12 Months ’13 sales increase
Slide 27: Gross Margin Trends
Gross Margin Trends Our gross margins have been improving consistent with our acquisition | and strategic growth plens. We co experience quarterly variability In gross = margins based on commodity pricing end competitive market conditions. | 18% 16% 14% ge Percenta: eat 2% 10% 8% 6% 17.0% 16.0% 45 g
Slide 28: Net Income & Diluted EPS Summary
ee) u peRTEETT Ii) Net income &, Diluted EPS Summary (Reported / Adjusted) 2010 - 2013 Net Income Net Income — Adjusted* (millions) (millions) $35.0 $28.1 $35.0 Me J $23.6 $25.0 $25.0 $14.7 $15.0 $15.0 ( $5.0 $5.0 ($5.0) 2010 2044 2042 2013 ($5.0) 2040 2044 2042 2043 Diluted EPS * $2.64 Diluted EPS
Slide 29: Supplementary Schedules
Supplementary Schedules ($ In thousands) 2010 2011 2012 2013 4Q°12 49°13 Reported net income (GAAP) $ 1,226 | $ 8470}$ 28,095] $ 24,040) $ 3,217 | $ 5,012 Adjustment factors: Write-off unam ortized discount on subordinated notes ie} ie} 685 ie} 685 ie} Premiums paid on prepayment of subordinated not
Slide 30: Leverage Position
Leverage Position Our leverage position improved significantly since the recession end we have emple cushion to Increese leverage to support our future growth opportunities in conjunction with our capital ellocation strategy and strategic pian. Leverage Position Trend ns aN Leverage (Funded Debt / E
Slide 31: Closing Stock Price
Closing Stock Price Stock Price Trend (Jan. 2011 - Feb. 2014) Our stock price performance has experienced drametic growth and has $45.00 $40.00 $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $0.00 trended consistent with our operating and finenciel results. Monthly Closing Stock Price Trend $42.19
Slide 32: Patrick's Products and Segments
BREEEAI III; !) rrr TT? Pee Patrick’s Products and Segments ie PAT R KCI<
Slide 33: Patrick's Manufactured Products
MaRS ETI Ti! KY ADORN Patrick’s Manufactured Products Gravure Ink @ Rc remii FRONTLINE CP Olay ARD WOOD: roducts ie PAT R KCI< POSSESS
Slide 34: Manufactured Products
VVVVVVV VV WV Manufactured Products Made-to-order laminated products ti including vinyl, paper, veneers and high pressure laminates (HPL) » Cut to size, boring, foiling & edge- banding Solid surface, granite & quartz countertop fabrication Wrapped profile mouldings Cabinet doors & components Hardwoo
Slide 35: Manufactured Products
ae a nS a Manufactured Produc ~ » Made-to-order laminated products including vinyl, paper, veneers and high pressure laminates (HPL) » Cutto size, boring, foiling & edge- banding Solid surface, granite & quartz countertop fabrication Wrapped profile mouldings Cabinet doors & components Hardwood furn
Slide 36: Patrick's Distribution Products
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Slide 37: Distribution Products
VVVVVVVV VV VV Distribution Products Pre-finished wall and ceiling panels Drywall & drywall finishing products Electronics Wiring, electrical & plumbing products Interior & exterior lighting products Interior passage doors Recliners, mattresses & other furniture Roofing products Laminate flooring Ce
Slide 38: Distribution Products
Distribution Produ Pre-finished wall and ceiling panels Drywall & drywall finishing products Electronics Wiring, electrical & plumbing products Interior & exterior lighting products Interior passage doors Recliners, mattresses & other furniture Roofing products Laminate ceramic flooring Cement sidin
Slide 39: Information Contacts
Tee information Contacts Andy Nemeth Chief Financial Officer (874) 294-7511 nemetha@patrickind.com Julie Ann Kotowski Director of Investor Relations (674) 294-7511 kotowskj@patrickind.com Analyst Coverage CJS Securities Daniel Moore dmoore@cjs-securities.com Sidoti & Company, LLC Scott Stember sstem