Patrick Industries, Inc. · NASDAQ:PATK

Patrick Industries — Investor Presentation (January 2018)

49 slides from Patrick Industries's investor presentation, Jan 10, 2018

1. Slide 1: Investor Presentation January 2018

   Investor Presentation January 2018

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: Company Overview

   Company Overview

4. Slide 4: Patrick at a Glance

   Patrick at a Glance  Founded in 1959 and incorporated in Indiana in 1961  Headquartered in Elkhart, Indiana – the “RV Capital of the World”  Operates over 90 facilities in 20 states & China  Approximately 6,800 employees  Listed on the NASDAQ under ticker PATK  Approximately $1.5B in LTM reven

5. Slide 5: Sales by Market Platform

   Marine 6% of Patrick‟s Q3-17 YTD Sales Industrial 12% of Patrick‟s Q3-17 YTD Sales MH 13% of Patrick‟s Q3-17 YTD Sales RV 69% of Patrick‟s Q3-17 YTD Sales 5 Market Platform Lifestyle & Leisure Housing & Industrial

6. Slide 6: Nationwide network of facilities aligned with OEM customers

   6 6 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 a

7. Slide 7: Portfolio of Expertise with Key Capabilities

   Portfolio of Expertise with Key Capabilities 7 RV Marine MH Industrial Plastics / Thermoforming Furniture & Sourcing/Specialty Bath, Shower & Closet Systems Solid Surface / Granite / Quartz Countertops & Fabrication Metal Fabrication / Fuel Tanks Fiberglass Component Products / Tooling / Hulls / Eng

8. Slide 8: Outperforming End-Market Growth

   non-res construction spend (commercial), YoY chg. 609 781 925 1,003 1,112 1,174 $46 $52 $71 $81 $101 $147 2011 2012 2013 2014 2015 2016 Residential Housing Starts Patrick Industrial Sales Outperforming End-Market Growth 8 ($ in millions, shipments in thousands) 8 RV Sales Growth Industrial Sales Gro

9. Slide 9: Market Update: Lifestyle & Leisure

   Market Update: Lifestyle & Leisure

10. Slide 10: 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 

11. Slide 11: RV Shipment Trends

    Wholesale Shipment Growth vs. Prior Year Wholesale Retail RV Shipment Trends  Retail unit shipment growth has consistently been in line with or exceeded wholesale unit shipment growth  November adjusted retail is up 14% YTD, aligned with wholesale growth  Dealer inventory channels are balanced an

12. Slide 12: Industry Outlook: RV Market

    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: Marine Market Outdoor Recreational Lifestyle

    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

14. Slide 14: 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

15. Slide 15: Market Update: Housing & Industrial

    Market Update: Housing & Industrial

16. Slide 16: 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

17. Slide 17: Industry Outlook: MH Market

    Industry Outlook 17 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

18. Slide 18: Residential End-Markets

    Residential End-Markets 18  Product Lines: • Kitchen cabinets and components • Household furniture • Solid surface countertops • Shower doors • Bathroom & closet systems  New housing starts are well below the prior peak and there continues to be pent-up demand, providing continued runway in new ho

19. Slide 19: Residential Home Buying Strength

    Residential Home Buying Strength 19 Sources: Euromonitor, BofA Merrill Lynch Global Research The key home buying population demographic began to increase in recent years following a 14 year decline 36,000 38,000 40,000 42,000 44,000 46,000 48,000 50,000 19 90 19 91 19 92 19 93 19 94 19 95 19 96 19 9

20. Slide 20: Non-Residential 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

21. Slide 21: Capital Allocation Strategy

    Capital Allocation Strategy

22. Slide 22: Focused Capital Allocation

    Focused Capital Allocation Acquisitions Capital Expenditures Expansions Stock Repurchases Debt Reduction 22 Maintain efficient and flexible balance sheet through measured use of cash flows and leverage to drive growth and strong ROE Our capital allocation strategy is centered around the utilization

23. Slide 23: Acquisition Summary by Year

    Acquisition Summary by Year 23 From 2014 – 2017…  We have executed on 21 acquisitions, acquiring 29 different companies with total revenues of ~$850 million  Averaged 5 acquisitions with ~$212 million in annualized acquired revenue over the last four years 2014 Acquisition Highlights 2016 Acquisit

24. Slide 24: Demonstrated Ability to Source, Acquire and Integrate

    $22 $26 $80 $42 $126 $233 $167 $309 2010 2011 2012 2013 2014 2015 2016 2017 Demonstrated Ability to Source, Acquire and Integrate 24 ($ in millions) $59MM Avg. Revenues Acquired  Commitment to expanding product portfolio within our core markets has resulted in over 40 strategic acquisitions since 2

25. Slide 25: Strong Brands & Product Expertise in Core Markets

    Recreational Vehicle 25 Strong Brands & Product Expertise in Core Markets Li festyle & Leisur e Ho u sin g & In d us tria l Marine Manufactured Housing Industrial

26. Slide 26: Geographic and Product Expansion

    Geographic and Product Expansion 1 2 3 4 5 PACIFIC NORTHWEST 1 SOUTHERN CALIFORNIA  Lamination  Aluminum  FRP  Fiberglass  Paint  Shower Doors TEXAS SOUTHEAST NORTHEAST 2 3 4 5 Focus on expansion opportunities with $250MM market potential 26 Financial Overview  Solid Surface  Hardwood Produc

27. Slide 27: 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 27 Str

28. Slide 28: Cash Flow Generation and Growth

    Cash Flow Generation and Growth ($ in millions) 28 $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

29. Slide 29: Leverage Capacity

    Leverage Capacity 29 We expect to continue to utilize our leverage and cash flow in alignment with our capital allocation strategy Target Leverage Range (1) Leverage is the consolidated total indebtedness to consolidated adjusted EBITDA as defined by the 2015 Credit Agreement per Company 10-Q (1 ) 0

30. Slide 30: 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

31. Slide 31: Appendix

    Appendix

32. Slide 32: Patrick History

    2 0 1 5 Company taken public (NASDAQ) Date of Incorporation Patrick History 32 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 sp

33. Slide 33: Stock Performance

    Stock Performance 33 As of December 31, 2017, our split-adjusted closing stock price was $69.45, approximately 236% of our pre-split closing stock price of $29.32 on December 31, 2014, and generating a 255% total shareholder return over that time period. Split Adjusted Stock Performance Source: NASD

34. Slide 34: Steady Increase In Content Per Unit

    Steady Increase In 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  Strat

35. Slide 35: Acquisition Summary by Year

    Acquisition Summary by Year 35 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

36. Slide 36: 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

37. Slide 37: 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

38. Slide 38: 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

39. Slide 39: Acquisition Summary 2016

    Acquisition Summary 39 ($ 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

40. Slide 40: Acquisition Summary 2017

    Acquisition Summary 40 ($ 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: $

41. Slide 41: 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

42. Slide 42: Patrick Product Lines – RV Interior

    Patrick Product Lines – RV Interior 42 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

43. Slide 43: Patrick Product Lines – RV Exterior

    Patrick Product Lines – RV Exterior 43 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

44. Slide 44: Patrick RV Products Growth Potential

    Patrick RV Products Growth Potential 44 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

45. Slide 45: RV Market Stats

    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+

46. Slide 46: Patrick Product Lines – MH Interior & Exterior

    Patrick Product Lines – MH 46 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

47. Slide 47: 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 47

48. Slide 48: Marine Products

    Marine Products Aluminum Fuel & Holding Tanks Boat Hull Design & Tooling 48 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

49. Slide 49: Patrick Industries

    PATRICK INDUSTR

Patrick Industries — Investor Presentation (January 2018) on 6ix