Patrick Industries, Inc. · NASDAQ:PATK
Patrick Industries — Investor Presentation (September 2020)
33 slides from Patrick Industries's investor presentation, Sep 16, 2020
Slide 1: Investor Presentation September 2020
INVESTOR PRESENTATION September 2020
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS 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 forwa
Slide 3: Company Overview & Highlights
COMPANY OVERVIEW & HIGHLIGHTS Investor Presentation
Slide 4: Key Messages
KEY MESSAGES Prioritization of team members safety, commitment to maintaining a 1 safe work environment while continuing to serve our customers Well-prepared for strong resurgence in our end markets as a result 2 of increased consumer demand Quick response to initial COVID-19 and flexible business m
Slide 5: Patrick Industries at a Glance
PATRICK INDUSTRIES AT A GLANCE (NASDAQ: PATK) Key Component Manufacturer and Supplier to RV, Marine, Manufactured Housing and Industrial Markets KEY FACTS SUSTAINABLE COMPETITIVE ADVANTAGES Founded 1959 Experienced management team with an average of 20+ years of industry experience Headquartered Elk
Slide 6: Strategic End Markets Overview
STRATEGIC END MARKETS OVERVIEW Sales Composition ($MM) Lifestyle & Leisure Housing & Industrial RV Marine MH Industrial Net Sales (LTM as of 6/28/20) $1,128MM $285MM $424MM $292MM $2,337 $2,263 Areas of Expertise 12% $2,129 Lamination/Custom Components ✔ ✔ ✔ 13% 14% Hard/Softwoods Cabinetry ✔ ✔ ✔ 12
Slide 7: Leading Market Position in All Product Categories
LEADING MARKET POSITION IN ALL PRODUCT CATEGORIES Significant organic growth opportunities with current product categories in RV, Marine and MH markets; addressable industrial market is very large and fragmented, resulting in significant growth opportunities Recreational Vehicle Marine Primary Marke
Slide 8: Clear Strategic Path Forward for Profitable Growth
CLEAR STRATEGIC PATH FORWARD FOR PROFITABLE GROWTH Pursue Execute Disciplined Focus on Exercise a Prudent Organic Growth Acquisition Strategy Geographic Expansion Financial Policy o Invest in internal growth o Leverage fragmentation in o Leverage existing product o Use strong cash flow to via cross-
Slide 9: Increased Focus on ESG Responsibilities and Best Practices
INCREASED FOCUS ON ESG RESPONSIBILITIES AND BEST PRACTICES Environmental o Established transportation / resource usage program to reduce costs, fuel consumption and emissions o Build leading safety culture with continuous improvement and training o Ongoing conservation efforts to reduce waste, recyc
Slide 10: Operations & Short-Term Outlook
OPERATIONS & SHORT-TERM OUTLOOK We remain disciplined with a flexible business model that enables us to shift production across like-product We remain disciplinedfacilities with and a flexible provides business additional levers model to remainthat allows efficient for the ability to shift productio
Slide 11: Favorable Long-Term Demographic Trends
FAVORABLE LONG-TERM DEMOGRAPHIC TRENDS Investor Presentation
Slide 12: Strong, Favorable Demographic Trends Across End Markets
STRONG, FAVORABLE DEMOGRAPHIC TRENDS ACROSS END MARKETS Lifestyle and Leisure Housing and Industrial o Participation in outdoor activities of U.S. population o U.S. adult population estimated to expand by 12MM has averaged 49% over the last five years between 2019 – 2024 o Improved consumer savings
Slide 13: Key Population Demographic Supports Future Market Upside Potential
Specific Specific population is within familybuilding stages of lifecycle INCREASING InvestorPresentation Company, Euromonitor, Sources: RVIA & TheNews 36,000 38,000 40,000 42,000 44,000 46,000 48,000 50,000 1990 Key Population Demographic Supports Future Market Upside PotentialUpside Market FutureS
Slide 14: End Market Trends
END MARKET TRENDS Investor Presentation
Slide 15: Diverse End Markets: RV End Market Overview
DIVERSE END MARKETS WITH FAVORABLE SECULAR TRENDS RV End Market Overview o Despite further drawback, 2019 marked the fourth most historical units ever shipped o Shipments of wholesale units expected to be up low single-digits in 2020 reflecting very low dealer inventory and strong retail demand that
Slide 16: Diverse End Markets: Marine End Market Overview
DIVERSE END MARKETS WITH FAVORABLE SECULAR TRENDS Marine End Market Overview o 1M boats are expected to be retired in the next 3 – 4 years due to increasing average age of boats in service (estimate 25 years) o $10.5B in retail sales of new powerboats in 2018 U.S. Retail Unit Shipments (000s) Marine
Slide 17: Diverse End Markets: Manufactured Housing End Market Overview
DIVERSE END MARKETS WITH FAVORABLE SECULAR TRENDS Manufactured Housing End Market Overview o Demand for new construction due to low housing supply and low mortgage rates o Pent up housing demand and improving credit combined with low inventory and affordability to drive continued growth o Shipments
Slide 18: Diverse End Markets: Industrial End Market Overview
DIVERSE END MARKETS WITH FAVORABLE SECULAR TRENDS Industrial End Market Overview o Expanded portfolio of products, driven primarily through acquisitions, allows Patrick to capture more of forecasted market growth o Due to our array of capabilities and diversified geographic presence, we can shift ca
Slide 19: Financial Overview
FINANCIAL OVERVIEW Growth Initiatives and Capital Allocation Strategy Investor Presentation
Slide 20: Strong Trajectory of Sales and Earnings Growth
STRONG TRAJECTORY OF SALES AND EARNINGS GROWTH Sales Growth ($MM) Earnings Growth $2,337 $200 $6.00 $2,263 +42% $2,129 $180 $4.93 +3% $5.00 +38% $160 (22%) +43% $1,636 $140 $3.85 $3.48 $120 $4.00 $120 +34% $1,222 +34% +40% $90 $100 $2.73 $3.00 $86 (25%) +42% $2.43 $920 +33% $80 $1.81 +54% $63 $56 $2
Slide 21: Q2 2020 Financial Results
Q2 2020 FINANCIAL RESULTS ($ MILLIONS EXCEPT PER SHARE DATA) OPERATING CASH FLOW FROM NET SALES DILUTED EPS INCOME & MARGIN OPERATIONS (30.8%) (73.2%) (97.4%) (58.0%) $93.8 $613.2 $45.2 $1.18 $424.0 $39.4 7.4% $12.1 2.9% $0.03 Q2 2019 Q2 2020 Q2 2019 Q2 2020 Q2 2019 Q2 2020 6M 2019 6M 2020 . Decline
Slide 22: Track Record of Strong Cash Flow Generation
TRACK RECORD OF STRONG CASH FLOW GENERATION Cash Flow from Free Cash Flow1 ($MM) Free Cash Flow per Share2 Operating Activities ($MM) $250 $8.00 $180 $166 $165 350% $7.08 $160 $7.00 $6.81 $200 $200 $192 300% $140 $132 $6.00 $5.72 $15 $120 $0.65 $153 250% $5.00 $150 $15 $117 $5.07 $100 200% $138 $4.0
Slide 23: Balance Sheet, Cash Flow and Liquidity
BALANCE SHEET, CASH FLOW AND LIQUIDITY The strength of our cash flows, combined with our liquidity continue to provide us with the flexibility to navigate a variety of scenarios through these unprecedented times DEBT STRUCTURE AND MATURITIES NET LEVERAGE1 ($ in millions) . $550MM Senior Secured Revo
Slide 24: Disciplined Capital Allocation Strategy
DISCIPLINED CAPITAL ALLOCATION STRATEGY Our capital allocation strategy is centered around the utilization of strong cash flows, a balanced disciplined leverage position, and capital resources to grow and reinvest in the business model Historical Capital Allocation ($MM) Future Priorities Opportunis
Slide 25: Key Investment Highlights
KEY INVESTMENT HIGHLIGHTS MARKET BUSINESS LEADERSHIP STRATEGIC LIQUIDITY POSITION MODEL Market leader in our Deep industry Flexible, high Disciplined cost Strong balance primary market experience and variable cost management sheet with no near- sectors; uniquely proven track record business model to
Slide 26: Appendix
APPENDIX Investor Presentation
Slide 27: End Market Product Categories
END MARKET PRODUCT CATEGORIES RV PRODUCT CATEGORIES1 TOWABLE MOTORIZED Shipments: 89% Wholesale | 64% Retail Value Shipments: 11% Wholesale | 36% Retail Value Travel Trailer | ASP: $25,300 Fifth Wheel | ASP: $55,200 Class A | ASP: $214,000 Class B & C | ASP: $95,800 Total Retail Value of Shipments i
Slide 28: Patrick Product Lines: RV Exterior
PATRICK PRODUCT LINES: RV EXTERIOR Front & Dash Panels Bow Trusses Exterior Speakers Rear Caps Additional Product Lines: o Softwoods o Full Body Paint o Aluminum Gauges o Steel Gauges o Mill Finish & Pre-painted Aluminum and Steel o Slit & Embossed Steel o FRP Coil & Sheet o Trim Panels o Fuel Syste
Slide 29: Patrick Product Lines: RV Interior
PATRICK PRODUCT LINES: RV INTERIOR Closet & Passage Fiberglass Bath Fixtures Doors & Shower Doors Closet Hardware Lighting Microwaves Backsplashes Mattresses Laminated Panels Electronics Laminate & Vanity/Wall & Printed Vinyl Ceramic Flooring Mirrors Additional Supplied Products: Furniture o Exit Li
Slide 30: Patrick Product Lines: Marine
PATRICK PRODUCT LINES: MARINE Wire Harnesses Electronics Wire Screens Aluminum Fuel & Marine Growth: Holding Tanks o Wind Shields (Glass) o Plastic Fuel & Holding Tanks o Fuel System Related Components Ladder Helms o Plastic Seat Bases & Components Dash Assemblies o Vinyls (Biminis, Covers) o Fabric
Slide 31: Patrick Product Lines: Manufactured Housing
PATRICK PRODUCT LINES: MANUFACTURED HOUSING Kitchen & Bath Fiberglass Bath Fixtures & Shower Faucets & Sinks Doors & Enclosures Gypsum (Drywall & Drywall Wrapped Profile Moldings Plumbing Products Finishing Products) Siding Trusses Ceiling Fans Interior & Exterior Decorative Lighting Fixtures Interi
Slide 32: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Reconciliation of Cash Flow from Operations to Free Cash Flow ($ in millions) 2015 2016 2017 2018 2019 LTM 6/28/20 Cash Flow from Operations $ 67 $ 97 $ 100 $ 200 $ 192 $ 138 Less: Capital Expenditures (8) (15) (22) (34) (28) (21) Free Cash Flow $ 59 $ 82 $ 77 $ 166 $ 165 $
Slide 33: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Reconciliation of Net Income to EBITDA to LTM Adjusted EBITDA ($ in millons) LTM 6/28/20 Net income $ 63.2 + Depreciation & amortization 67.2 + Interest expense, net 40.3 + Income taxes 21.3 EBITDA 192.0 + Stock compensation expense 13.6 + Acquisition proforma, transaction-r
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