Slide 1: Investor Presentation
& PATRICK INDUSTRIES, INC. Investor Presentation July 14, 2015 es. NASDAQ: PATK|
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
Slide 3: Company Overview
Company Overview
Slide 4: Patrick Industries, Inc.
PATRICK INDUSTRIES. INC. & PARRICK
Slide 5: Patrick History
Patrick History finances Credit, ‘Requires Adorn Holdings, Serene ey sete Inc. —the largest shareholder and completes Refinancing via $50MM ABL Company's history. (5/02), Credit Facility led by Wells Fargoto execute on strategic growth and acquisition plans 1) ‘Company taken public ee dd Cleveland n
Slide 6: Patrick Industries Fact Sheet
Patrick Industries Fact Sheet = Leading national manufacturer and RV market: 78% of 3M ‘15 revenues i ‘Idi - Includes laminated panels, countertops, fabricated supplier of building and aluminum and FRP products, wrapped mouldings, cabinet component products to doors, wiring/electrical/plumbing, furn
Slide 7: Majority of Patrick's businesses are strategically located in Indiana to serve the major RV OEMs
Majority of Patrick’s businesses are strategically located in Indiana to serve the major RV OEMs + Approximately 85% of all RVs manufactured in the U.S. in 2014 were produced in Indiana. Close proximity to RV OEMs enables just-in-time delivery and the realization of cost efficiencies for customers,
Slide 8: Why Patrick Industries
Why Patrick Industries Patrick Industries supports a growth-oriented business model, driven by a performance- oriented culture focused on growing revenue and earnings, and maximizing shareholder value. + $16.8 billion addressable expanding RV & MH markets ‘+ Emerging industrial and housing market *
Slide 9: Financial Performance
Financial Performance
Slide 10: Historical Performance
{5 inmilions) 3800 $700 600 $500 400 $300 $200 100 30 2010 Historical Performance Sales growth of 28% compounded annually from 2010 to 2014 - driven by strategic acquisitions, market share gains, product expansion and market improvement in all 3 segments we serve. Sales Growth 2010-2014 Net Income a
Slide 11: Organic & Acquisition Growth
Organic & Acquisition Growth Sales growth of $523 million from 2009 to 2014 driven by $308 million in acquisitions and $215 million of organic growth. Acquisitions since 2010 accounted for 42% of our 2014 revenues. Sales Growth 2009 -2014 (5 inmitions) $800 $23 $18 a $700 == 3600 $174 $500 ) : $400
Slide 12: Gross and Operating Margin Improvement
Gross and Operating Margin Improvement Our acquisition strategy and our focus on continually leveraging our fixed cost structure has contributed to an increase in trended gross and operating margins. 1% seo%t6A%16.4% $140 15.7% 15.7% 10% 15a 15.2% 46,0116, 0% 15.24 15.1%4 159% 158% 120 1% s 1% 113%
Slide 13: Patrick Execution Objectives Aligned with Shareholder Goals
Patrick Execution Objectives Aligned with Shareholder Goals Seek long-term, sustainable, profitable growth to maximize shareholder value Maximbe Returns ROA of 12.396 for2014 from (1.6%) in 2010, ROE 0f30.6% for2014 from (6.7%) in 2010 to Company ROIC of 15.4% for 2014 from (2.2%) in 2010 Ps Acquire
Slide 14: The RV Market
The RV Market
Slide 15: RV Market Quick Facts
RV Market Quick Facts 20g «Ott {# of U.S. RV-owning households 7.9 million 9.0 million lAverage age of typical RV owner 49 years 48 years Median income of RVers $62,000 Ownership rates: 33 - 54 years (fastest growing segment) 9.0% 11.2% 55 years of older (highest rate of RV ownership) 8.6% 9.3% RV O
Slide 16: PATK Sales Mix by Industry
78% PATK Sales Mix by Industry Array of Attraction Consumer product to you ch buyers confidence Economical vacation M - Industry reports indicate that RV dealer inventory levels continue to be in line with retail demand + Given favorable demographic trends, the RV industry has a positive long-term o
Slide 17: RV Shipments - Towables vs. Motorized
my RV Shipments - Towables vs. Motorized Since 2010, RV towables and motorized wholesale unit shipments have averaged approximately 89% and 11%, respectively, of total RV industry shipments. Beginning in 2013, there was a slight shift in the mix towards a higher percentage of motorized. RV Shipments
Slide 18: RV Towable Shipments
RV Towable Shipments Travel trailers have been slowly increasing as a % of total RV towable shipments over the last 9 years. They now account for 72% of all RV towable shipments. RV Towable Shipments (000's) 2007 +2008 2009 2010 2011 2012 2013 2014 May'1S YTD @ Travel Trailers @ Travel Trailers - Fi
Slide 19: RV Motorized Shipments
RV Motorized Shipments Since 2010, the RV motorized shipment mix has been relatively stable, RV Motorized Shipments (000's) with a slight increase in van campers and minis. A 5 2006 2007 2008 2009 2010 92011 2012 = 2013 2014 May'15 YTD ™ Conventional (Class A) @ Van Campers (ClassC) CO Mini (Class B
Slide 20: RV Industry Annual Shipment Trends
Consumer Confidence Source: 1990 - 2015F RV Annual Shipments per RVIA; Consumer Confidence per The Conference Board Inc. (2015F is the average through 5/31/15). & PARRICK RV Industry Annual Shipment Trends The RV industry has experienced steady growth over the last five years following a 58% decline
Slide 21: RV Towables Quarterly Trend - Retail vs. Wholesale
RV Towables Quarterly Trend - Retail vs. Wholesale 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 Towable RV US Dealer / US Retail Shipments yn ny nD A NY WN WY nd NY ANY ANY Ny 9h anh nh who ye eTrd PX ero O US Dealer BUS Retail **Dealer Shipments—RVIA (80%) /Retail Shipments- Stati
Slide 22: RV Motorized Quarterly Trend - Retail vs. Wholesale
RV Motorized Quarterly Trend - Retail vs. Wholesale Motorized RV US Dealer / US Retail Shipments 12,000 10,000 8,000 6,000 = Ghd 2,000 NY ANY NY Ny wh nh a sere” S a s Ss Ss ee” US Dealer US Retail - **Dealer Shipments—RVIA (80%) /Retail Shipments- Statistical Surveys**
Slide 23: Patrick RV Content Per Unit
Patrick RV Content Per Unit RV content per unit has increased consistently with our acquisition and organic growth over the last 5 years and we estimate total RV content available in the current product lines that we sell of approximately $5,000 per unit. $’s Sold / RV Unit Shipped* $1,800 $1,600 $1
Slide 24: RV Product Opportunities
RV Product Opportunities We estimate over $1.1 billion in potential organic and strategic growth opportunities in our current product categories assuming we had 100% of all current product sales, and estimate the total market for component products in excess of $9 billion. Current RV Patrick Product
Slide 25: Patrick Product Lines — RV Interior
Additional supplied Products: Patrick Product Lines — RV Interior Closet _ Closet & Passage Doors Hardware Fiberglass Bath Fixtures & Shower Doors Kitchen & Bath Microwaves Faucets & Sinks Laminated Panels & Vanity Mirrors Printed Vinyl Laminate & Ceramic Flooring Cabinet Doors Mattresses Electronic
Slide 26: Patrick Product Lines — RV Exterior
Patrick Product Lines — RV Exterior Exterior Front and Graphics Speakers Rear Caps Additional Product Lines: Saal * Full Body Paint Sa Al Do - Aluminum Gauges =i and Steel = SteelGauges + Sit & Embossed Steel GA Mill Finish & Pre- + RP Coil & Sheet 7 / 4 r RV Power Cords & RV Grills & Accessories In
Slide 27: Patrick RV Products Growth Potential
Gauges Insulation " Patrick RV Products | ad Growth Potential g LEE = Appliances Roofing Window Coverings Toilets/Plumbing | Holding Dashboards Tanks & Components Windshield Water Wipers Heaters Captains Chairs Carpeting i Tires & Rims Hardware Rolled Flooring ‘Aluminum Framing &PARRICK
Slide 28: The MH Market
The MH Market
Slide 29: MH Market Quick Facts
MH Market Quick Facts = Average structure cost per sq. ft. (2013): $44 (MH) vs. $94 (single family home) = Average MH retail price (2013): $64,000 for 1,470 sq. ft. = Multiple exterior options and interior floor plans available; customized to meet consumer needs = Engineered for wind safety and ener
Slide 30: MH Market Indicators
MH Market Indicators Drivers of Consumer Demand Market Growth Alternative housing aging“ lity Boomers’ Consumer Demand = Opportunity for moderate year-over-year growth; limited downside risk in near-term if volumes maintain historical : relationship with new housing starts. be ~ + Unit shipments hav
Slide 31: 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 32: MH Annual Shipment Trends
Shipments (00's) MH Annual Shipment Trends 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. MH Wholesale Unit Shipments Loose MH Credit@, Loose Residential Housing Cragit &
Slide 33: Patrick MH Content Per Unit
Patrick MH Content Per Unit Our content per unit shipped has remained fairly consistent despite the impact of vertical integration in prior periods by our largest MH customer. We believe we are well-positioned to participate in the continued expected improvement of this industry. We estimate total M
Slide 34: MH Product Opportunities
MH Product Opportunities We estimate approximately $285 million in potential organic and strategic growth opportunities in our current product categories assuming we had 100% of all product sales, and estimate the total market for component products of approximately $2 billion, at current shipment l
Slide 35: Patrick Product Lines - MH
Patrick Product Lines - MH Kitchen & Bath Fiberglass Bath Fixtures & Gypsum (Drywall & Faucets & Sinks Shower Doors Drywall Finishing Products) ‘Wrapped Profile Moldings Daurmbiia | Prowticts; Siding Interior & Exterior Decorative Ceiling Fans shinaise Ventilation System & Ridge Cap Lighting Fixture
Slide 36: Patrick MH Products Growth Potential
Patrick MH Products Growth Potential Alternative Solar Panels Roofing Insulation | Hardware Composite + Water Heaters es Decking Carpet Pad + Appliances + Toilets/Plumbing Lumber BracketsiBraces. + HVAC & Hardware & PARRICK
Slide 37: The Industrial Market
The Industrial Market
Slide 38: Industrial Market Indicators
Industrial Market Indicators Drivers of Consumer Demand Market Growth New construction coh PATK Sales Mix by Industry Consumer Demand a 51% of the Company's industrial revenue base is tied directly to the residential housing market (new construction and remodel) Our sales to the industrial market ge
Slide 39: New Housing Starts Trends
New Housing Starts (00's) New Housing Starts Trends We estimate that approximately 51% of our industrial revenue base is directly tied to the residential housing market which appears to have begun its recovery. Our products have applicability in both new construction and remodel! markets. 2,500 2,06
Slide 40: Strategy Execution
Strategy Execution
Slide 41: Capital Allocation
Capital Allocation Our capital allocation strategy is centered around the utilization of our leverage and capital resources to grow the business model. — Acquisitions — Investments in infrastructure and capital expenditures — Debt reduction & leverage position *« Weexpect to utilize availability und
Slide 42: Acquisition Strategy
Acquisition Strategy = We target organizations with: + Solid management teams with strong customer and supplier relationships and operational talent + High quality product lines + Strong growth potential + Strategic value proposition to our business model = Patrick provides the acquired businesses w
Slide 43: Acquisition Summary by Year (2010 - 2015)
Acquisition Summary by Year (2010 - 2015) Acquisitions continue to be a part of our strategic growth plan as we have acquired an average of over $80MM of annualizedrevenues in each of the past 3 years. In 2015, we have already acquired almost $70MM of annualized revenues. 2010 Acquisition Highlights
Slide 44: Acquisitions
Acquisitions From 2010-2014 we averaged $59 million in revenues acquired through acquisitions in each of the respective years. For May 2015 YTD, we have acquired $68 million in annualized revenues. Acquired Annualized Revenues 2010-2014 {8 inmilions) $140 $120 $100 $80 $60 $126 $40 $80 $42 “ = $0 20
Slide 45: Reinvesting in the Business - Capital Expenditures
Reinvesting in the Business - Capital Expenditures We will continue to invest in our infrastructure and flex our capital spends where necessary to align with our demand levels. (S inthousande) $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 so s1ace 12.095 $10,605 $3,669 $3,503 Ed $7,395 $7,505 $7,480
Slide 46: Returning Capital to Investors
Returning Capital to Investors Since the inception of the stock buyback program in February 2013 through May of $19.38 - 51% below the May 29, 2015 closing stock price of $39.87. 1,600 * $45.00 1324 $40.00 1,400 4,200 2 z $30.00 3 1,000 5 $25.00 = 800 a 2 $20.00 = 600 8 $15.00 a an $10.00 cl $5.00 0
Slide 47: Capital Allocation
Capital Allocation Since year-end 2009-2014 we have spent approximately $132 million on acquisitions, $27 million on capital expenditures and $20 million on share repurchases, while only increasing debt by $59 million (5 inmilions) $300 $250 $150 $101 $100 ($120) $50 $0 & PARRICK
Slide 48: Capital Allocation
Capital Allocation We continue to manage our capital allocation year-to-year with a focus on strategic growth, balanced with maintaining healthy debt levels. {5 inmilions) & PARRICK
Slide 49: Balance Sheet Strength
Balance Sheet Strength We expect to, and continue to utilize our leverage for strategic acquisitions, followed Shortly thereafter by an accelerated deleverage cycle based on strong operating cash flows. We are confident in our ability to size the business model according to the revenue stream based
Slide 50: Shareholder Value
te in an approxima: ves has resulted 3000% return to shareholders during the period of 2010 - June 2015. tiati gic init ¥ iy e S cd Shareholder Value Monthly Closing Stock Price Trend $590 million as of June 30, 2015 Patrick has approximately 15.5 million shares outstanding and a market capitalizati
Slide 51: Sales / Net Income / Diluted EPS Summary (Reported)
Sales / Net Income / Diluted EPS Summary (Reported) 2012 — Q1 ‘15 (Sin mitions) Net Income Sales i 30.7 (Sin millions) a0 74 200 34.9 sa00 = 00 sso i soz $69 $700 S100 80 $600 ‘0.0 me ees $500 $400 : 5 Diluted EPS $300 191 $223 2.00 1.76, $170 1.49 $200 ae 100 51.00 | sis - 22 20 mss TTS 003 soso so
Slide 52: Sales / Net Income / Diluted EPS Summary (Adjusted)
Sales / Net Income / Diluted EPS Summary (Adjusted) 2012 - Q1 “15 Net Income - Adjusted* ($15 mllions) ($in millions) Sales $40.0 30.7 $736 $320.0 $235 $20.0 $14.7 = = SEB ss $0.0 $437 21220132014 AAs $370 es Diluted EPS - Adjusted* (pershare) SLOL =e 1.46 2012-2013, «2014 a4 ass or $0.92 $1.00 $0.5
Slide 53: Supplementary Schedules
Supplementary Schedules Reconciliation of GAAP Net Income/Diluted EPS to Adjusted Net Income/DilutedEPS in thousands) 012 2013 2014 Q1'14 Qi Reported net income (GAAP) $s 28095|$ 24040/$ 30674|$ 6e06|s 9.150 [Adjustment factors: \Write-off unamortized discount on subordinated notes 685 = = = = Premi
Slide 54: Investor Contacts
Investor Contacts Andy Nemeth Chief Financial Officer (574) 294-7511 nemetha@patrickind.com Julie Ann Kotowski Director of Investor Relations (574) 294-7511 kotowskj@patrickind.com Analyst Coverage CJS Securities Daniel Moore dmoore@cjs-securities.com CL King & Associates Scott Stember sstember@clki
Slide 55: Appendix
Appendix
Slide 56: Acquisition Summary (2010 - 2015)
Acquisition Summary (2010 - 2015) Completed Business Price Sales* Segment Industr Products rs ADORN 01/2010 Quality Hardwoods Sales $2.0 MM $2MM Manufacturing RV Cabinet Doors onion Wiring, electrical, plumbing, and 08/2010 _Blazon international Grou 20 MM. ion RV&MH__otherbuildingproducts Painted c
Slide 57: Acquisition Summary (2010 - 2015) (continued)
Acquisition Summary (2010 - 2015) (continued) FRONT —) RV,MH& Fiberglass bath fixtures including tubs Sep-13 Frontline Mfg,, inc. $.2MM 15MM Manufacturing Industrial and showers ®> wv. amie Sep-13 Premier Concepts, Inc. $2.6MM $I0MM Manufacturing industrial Solid surface countertops fae Rediners, ma
Slide 58: Patrick's Products and Segments
Patrick’s Products and Segments
Slide 59: Manufactured
Manufactured Gravure Ink Products <> @ Zi @PolyDyn* veers ~~ CHARLESTON o> > ms CUP Qiecons pain aCwo ‘Crearive Wooo Desions Patrick’s EQ GS & PARRICK
Slide 60: Manufactured Products
Manufactured Products Made-to-order laminated products including | Wy > Cut tosize, boring, foiling &edge- vinyl, paper, veneersand high pressure banding a laminates (HPL) Solid surface, granite & quartz countertop fabrication Wrapped profile mouldings Cabinet doors & components Hardwood furniture C
Slide 61: Manufactured Products
Manufactured Products > Made-to-order laminated products including vinyl, paper, veneers and pressure laminates (HPL) > Cut to size, boring, foiling & edge- banding Solid surface, granite & quartz countertop fabrication Wrapped profile mouldings Cabinet doors & components Hardwood furniture Fabricat
Slide 62: Patrick's Distribution Products
P) 1) PATRIC RICK Gustafson Sivtbecte® Lightin Patrick’s Distribution Las Products a a fan MBs Ny! & PARRICK
Slide 63: Distribution Products
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 FRP sheet & coil Laminate flooring
Slide 64: Distribution Products
Distribution Produc 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 FRP sheet & coil Laminate ceramic flo