Patrick Industries, Inc. · NASDAQ:PATK

Patrick Industries — Investor Presentation (December 2017)

41 slides from Patrick Industries's investor presentation, Dec 19, 2017

  1. Slide 1: Investor Presentation December 2017

    Investor Presentation December 2017

  2. Slide 2: Forward-Looking Statements

    Forward-Looking Statements This presentation contains certain statements related to future results or states 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. T

  3. Slide 3: Patrick History

    2 0 1 5 Company taken public (NASDAQ) Date of Incorporation Patrick History 3 1 9 5 9 Company founded 1 9 6 1 1 9 6 8 2 0 0 7 Acquired Adorn Holdings, Inc. – the largest acquisition in the Company’s history 2 0 0 8 Todd Cleveland named President (‘08) and CEO (‘09) Completed 3-for-2 common stock spl

  4. Slide 4: Patrick at a Glance

     Founded in 1959 and incorporated in Indiana in 1961  Headquartered in Elkhart, Indiana – the “RV Capital of the World”  Leading national manufacturer and supplier of building and component products to the RV, MH, marine and select industrial markets  Operates over 90 facilities in 20 states & C

  5. Slide 5: Market Platform: Sales by End Market

    Marine 6% of Patrick’s Sept-YTD Sales Industrial 12% of Patrick’s Sept-YTD Sales MH 13% of Patrick’s Sept-YTD Sales RV 69% of Patrick’s Sept-YTD Sales 5 Market Platform Lifestyle & Leisure Housing & Industrial

  6. Slide 6: Strong Brands

    6 Differentiated, customer-centric brand strategy and business model  Portfolio of brands enable OEM customers to differentiate their products to consumers  Brands retain significant autonomy to maintain entrepreneurial spirit and brand individuality enabling continuation of legacy value propositi

  7. Slide 7: Portfolio of Expertise

    Portfolio of Expertise Plastics/Thermoforming Furniture & Sourcing / Specialty Bath, Shower & Closet Systems Solid Surface/Granite Countertops & Fabrication Metal Fabrication/Fuel Tanks Fiberglass Products/Tooling/ Engineering & Design Services Warehousing/Distribution/ Comprehensive Design Center E

  8. Slide 8: Nationwide Network of Facilities

    8 Strategically aligned with OEM customers offering a nationwide network Over 90 facilities in 20 states with approximately 6,800 employees Headquarters Existing Patrick Facility Patrick Facility Profile *There is one manufacturing facility located in China that was part of the November 2017 LMI acq

  9. Slide 9: RV Market: Demographic Trends

    Demographic Trends  Overall camping experiences and RV awareness are driving growth among younger and more diverse participants  Younger campers looking for affordable recreation experience  38% of all campers are millennials (ages 18-35)  34% of new RVs sold in 2016 were to first time buyers 

  10. Slide 10: RV Market Stats: Towable vs Motorized

    Market Stats  87% of industry 2016 unit sales  61% of estimated 2016 retail dollar sales, or $10.7 billion  Retail cost $5,000 to $160,000+ per unit  Average $29,000  13% of industry 2016 unit sales  39% of estimated 2016 retail dollar sales, or $7.0 billion  Retail cost $43,000 to $500,000+

  11. Slide 11: RV Shipment Trends

    RV Shipment Trends  Retail unit shipment growth has consistently been in line with or exceeded wholesale unit shipment growth  October adjusted retail is up 11% YTD, aligned with wholesale growth  Dealer inventory channels are balanced and well-positioned  Used inventories are low and order book

  12. Slide 12: RV Industry Outlook

    Industry Outlook 12 Gulf War 9/11 Attacks Residential Housing Crisis It is our belief that trended shipment levels indicate continued potential for future growth trajectory based on current demographic indicators, discipline in the space, overall economic conditions and resilience and strength of th

  13. Slide 13: Manufactured Housing: Affordable Form of Home Ownership

    Affordable Form of Home Ownership  Average structure cost per sq. ft. (2016) $48.82 (MH) vs. $107.18 (single family home)  Average MH retail price (2016) $70,600 for 1,446 sq. ft. (home only) Overview MH Market Statistics  Approximately 9 million households with 22 million people living in manufa

  14. Slide 14: MH Industry Outlook

    Industry Outlook 14 Source: 1990-2016: MHI; 2017F - 2020F Company Estimates, NAHB The MH industry continues to perform at historical lows reflecting the residual impacts from the residential housing market crash, including tight credit standards and lending. We believe, however, that there is pent-u

  15. Slide 15: Marine Market Overview

    Statistics  36% of the U.S. adult population participated in recreational boating in 2016  Estimated 141.6 million people went boating in 2016  11.9 million registered powerboats in the U.S. Overview Marine Market Outdoor Recreational Lifestyle  Continued core recreational boater demand  Three

  16. Slide 16: Retail Powerboat Trends

    Retail Powerboat Trends  The traditional powerboat market continues to recover with 2016 being the 6th consecutive year of steady annual growth  Average selling price (“ASP”) has steadily increased as OEMs continue to add content to boats Marine Market Source: 2016 Recreational Boating Statistical

  17. Slide 17: U.S. Marine Outlook

    U.S. Marine Outlook Industry Volume Source: NMMA (traditional powerboat retail excluding jet boats); 2017F is Company estimate 1965-1991 Average 401,000 1992-2006 Average 306,000 The U.S. marine market continues its steady recovery with the potential for a long runway of steady growth with leisure l

  18. Slide 18: Non-Residential Industrial End-Markets

    Big Box Retail  Kitchen cabinets  Custom wardrobe and shower systems  Electronics distribution  Polymer-based wall panels, adhesives and accessories Non-Residential End-Markets Industrial Market Retail and Commercial Fixtures  Store fixtures  Slotwall  Casework and office furnishings  Solid

  19. Slide 19: Residential End-Markets: Housing Market Driving Demand

    554 587 609 781 925 1,003 1,112 1,174 4,340 4,190 4,260 4,660 5,090 4,940 5,250 5,450 3,900 4,100 4,300 4,500 4,700 4,900 5,100 5,300 5,500 400 500 600 700 800 900 1,000 1,100 1,200 1,300 Existing Hom e Sales (000's)Ne w Hou sin g Start s (0 00' s) Growth in Housing Market Driving Demand New Housing

  20. Slide 20: Focused Capital Allocation

    Use strong cash flow to reduce debt and reload growth capacity 20 Maintain efficient and flexible balance sheet through measured use of leverage to drive growth and strong ROE with prepayable debt Invest in internal growth and cost savings opportunities including geographic locations, product extens

  21. Slide 21: Cash Flow Generation and Growth

    Cash Flow Generation and Growth ($ in millions) 21 $22 $46 $66 $97 2013 2014 2015 2016 Cash Flows from Operating Activities Cash Flows from Operating Activities $51 $65 $87 $96 2013 2014 2015 2016 Working Capital Working Capital $14 $39 $58 $82 2013 2014 2015 2016 Free Cash Flow Free Cash Flow Stron

  22. Slide 22: Acquisition Strategy

    Acquisition Strategy Expand into adjacent markets to further leverage core manufacturing and distribution capabilities, gain new growth platforms and diversify end-market exposure Introduce new, innovative product lines complementary to core competencies Cross sell extensive product catalog to custo

  23. Slide 23: Geographic and Product Expansion

    Geographic and Product Expansion 1 2 3 4 5 PACIFIC NORTHWEST1 SOUTHERN CALIFORNIA • Lamination • Aluminum • FRP • Fiberglass • Paint • Solid Surface • Hardwood Products • Pressed Products • Industrial • Interior Doors TEXAS SOUTHEAST NORTHEAST • Softwoods • Paint • Solid Surface • Hardwood Products

  24. Slide 24: Capital Expenditures

    Capital Expenditures We will continue to invest in our infrastructure to drive efficiency and capacity and flex our capital spend when necessary to align with our demand levels ($ in millions) Strategic Capital Spending:  New Process / Automation  Increased Capacity  Increased Efficiencies 24 Str

  25. Slide 25: Leverage Capacity

    Leverage Capacity 25 We expect to continue to utilize our leverage and cash flow in alignment with our capital allocation strategy. Our strong free cash flow, combined with our recent equity offering and increased credit facility, provide us with ample dry powder to continue our strategic growth ini

  26. Slide 26: Appendix

    Appendix

  27. Slide 27: Sales & Earnings Growth

    ​ $437 +36% $595 +24% $736 +25% $920 +33% $1,222 2012 2013 2014 2015 2016 Sales Growth Sales Sales & Earnings Growth  Sales continue to grow and outpace their respective markets, driven by acquisitions, new products and extension growth and market share gains  Net Income and EPS continue steady gr

  28. Slide 28: Content per Unit

    Content per Unit  Our focus on strategic acquisitions and organic growth have resulted in significant increases in our content per unit and sales outpacing our respective markets  RV and MH content per unit increase of 6% and 15%, respectively in Q3 2017 compared to 2016  Strategic Growth Initiat

  29. Slide 29: Acquisition Summary by Year

    Acquisition Summary by Year 29 2010 Acquisition Highlights 2014 Acquisition Highlights • 2 companies • 7 companies • $6MM aggregate purchase price • $72MM aggregate purchase price • $22MM annualized sales • $126MM annualized sales • Primarily RV market-based • Primarily RV market-based 2011 Acquisit

  30. Slide 30: Acquisition Summary 2010-2012

    Acquisition Summary 2010 2011 2012 Quality Hardwoods Sales Blazon International Group The Praxis Group A.I.A. Countertops, LLC Infinity Graphics Décor Mfg., LLC Gustafson Lighting Creative Wood Designs, Inc. Middlebury Hardwood Products, Inc. Date of Acquisition: 01/2010 08/2010 06/2011 09/2011 12/2

  31. Slide 31: Acquisition Summary 2013-2015

    Acquisition Summary 2013 2014 2015 Frontline Mfg., Inc. Premier Concepts, Inc. West Side Furniture Precision Painting Group Foremost Fabricators, LLC PolyDyn3, LLC Charleston Corporation Better Way Partners, LLC Structural Composites of Indiana, Inc. North American Forest Products & North American M

  32. Slide 32: Acquisition Summary 2016

    Acquisition Summary 32 ($ in millions) 2016 Parkland Plastics The Progressive Group Cana Cabinetry Mishawaka Sheet Metal L.S. Manufacturing, Inc. BH Electronics, Inc. Sigma Wire & KRA Intl. Date of Acquisition: 02/2016 03/2016 05/2016 06/2016 07/2016 07/2016 12/2016 Final Purchase Price: $25.2 $10.9

  33. Slide 33: Acquisition Summary 2017

    Acquisition Summary 33 ($ in millions) Medallion Plastics, Inc. Marine Concepts Marine Electrical Products Florida Marine Tanks Wire Design Baymont Indiana Transport LMI, Inc. & Related Cos. Nickell Moulding Date of Acquisition: 03/2017 07/2017 09/2017 11/2017 11/2017 12/2017 Final Purchase Price: $

  34. Slide 34: RV Product Overview

    Product Overview Class A Class B Class C ASP $175,304 $112,732 $90,482 2016 Wholesale Units 22.7K 4.1K 28.0K 2016 Market Size $4.0B $0.5B $2.5B Length 21 – 40 feet 16 – 22 feet 21 – 35 feet General Description  Built on a heavy truck chassis  Diesel and Gas models feature different performance cap

  35. Slide 35: Patrick Product Lines – RV Interior

    Patrick Product Lines – RV Interior 35 Additional Supplied Products:  Exit Lighting  Ceiling Fans  Power Cords & Inlets  RV Tank Heater Pads  Fire Extinguishers  Electric Fireplaces  Wiring, Electrical & Plumbing Products  Inverters  Tire Pressure Monitors  Electrical Switches, Receptacles

  36. Slide 36: Patrick Product Lines – RV Exterior

    Patrick Product Lines – RV Exterior 36 Exterior Speakers Paint & Paint Mask LED Lighting Aluminum & FRP Side Walls Laminated Side Walls Additional Product Lines:  Softwoods  Full Body Paint  Aluminum Gauges  Steel Gauges  Mill Finish & Pre- Painted Aluminum and Steel  Slit & Embossed Steel  F

  37. Slide 37: Patrick RV Products Growth Potential

    Patrick RV Products Growth Potential 37 Heating, Ventilating, Air Conditioning Window Coverings Rolled Flooring Bedding Exterior Mirrors Carpeting Windshield Wipers Holding Tanks Captains Chairs Appliances Toilets/Plumbing Water Heaters Gauges Dashboards & Components Hardware Tires & Rims Roofing In

  38. Slide 38: Patrick Product Lines – MH Interior & Exterior

    Patrick Product Lines – MH 38 Interior & Exterior Decorative Lighting Fixtures Interior Passage Doors Kitchen & Bath Faucets & Sinks Gypsum (Drywall & Drywall Finishing Products) Laminate & Ceramic Flooring Fiberglass Bath Fixtures & Shower Doors & Enclosures Cabinet Doors & Components Microwaves Co

  39. Slide 39: Patrick MH Products Growth Potential

    Patrick MH Products Growth Potential Composite Decking Carpet & Carpet Pad Hardware Alternative Roofing Insulation Lumber Windows Additional Supplied Products: • Water Heaters • Appliances • Toilets/Plumbing • HVAC Solar Panels Brackets/Braces & Hardware 39

  40. Slide 40: Marine Products

    Marine Products Aluminum Fuel & Holding Tanks Boat Hull Design & Tooling 40 Aluminum Fuel & Holding Tanks Electronics Dash Assemblies Wire Harnesses Wire Screens Helms Dash Assemblies Electronics Marine Growth Potential:  Wind Shields (Glass)  Plastic fuel & holding tanks  Fuel system related com

  41. Slide 41: Patrick Industries

    PATRICK INDUSTR

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