Patrick Industries, Inc. · NASDAQ:PATK
Patrick Industries — Investor Presentation (May 2017)
39 slides from Patrick Industries's investor presentation, May 24, 2017
Slide 1: Investor Presentation May 2017
Investor Presentation May 2017
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 History
2 0 1 5 Company taken public (NASDAQ) Date of Incorporation Patrick History 4 1 9 5 9 Company founded 1 9 6 1 1 9 6 8 2 0 0 7 Acquires Adorn Holdings, Inc. – the largest acquisition in the Company’s History 2 0 0 8 Todd Cleveland named President (‘08) and CEO (‘09) Completes 3-for-2 common stock spl
Slide 5: 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 80 facilities in 19 states A
Slide 6: Market Platform: RV, MH, Industrial, Marine
Marine Industrial MH RV 6 Market Platform
Slide 7: Product Portfolio
P ro d u ct Port fo li o 7 RV •Q1-17 shipment growth 12% •72% of Q1-17 Patrick sales Wall and ceiling panels Pressed and hardwood doors Countertops Fabricated aluminum & FRP products Wrapped mouldings Cabinet doors Electrical, wiring, plumbing Furniture and mattresses Fiberglass products RV painting
Slide 8: Strong Brands
8 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 proposit
Slide 9: Patrick Facility Profile
Patrick Facility Profile 9 9 Strategically aligned with OEM customers with a nationwide network Over 80 facilities in 19 states with approximately 6,000 employees Headquarters Existing Patrick Facility
Slide 10: 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
Slide 11: Key Role in the Value Chain
Key Role in the Value Chain 11 Activities and Value Proposition Success Drivers Component Suppliers OEMs Dealers Source raw materials and select products Innovate on design, product and materials to meet consumer preferences Manufacture and distribute select components Source components De
Slide 12: RV Market Long-Term Market Growth
RV Market 12 Long- Term Market Growth Industry Strength Economy Demographics Lifestyle 2016 was the 7th consecutive year of wholesale unit shipment growth; Q1-17 continuing momentum with 12% growth Retail demand is strong New innovative designs and products Attractive product mix and price p
Slide 13: Industry Demographics
Millennials are 2x as likely to say that outdoor recreation activities are important Technology is allowing campers to stay connected, providing greater flexibility and promoting longer stays Camping with children is increasing at a rapid pace The % of campers with children in their homes: 46% i
Slide 14: RV Industry Trends
Industry Trends 14 Towables 86% Motorized 14% Wholesale shipment growth is up 12% in Q1 2017 compared to prior year Led by travel trailers and Class B & C Retail shipments increased 11% for the quarter versus prior year period Shipment composition remains steady from prior year Towables is
Slide 15: RV Industry Outlook
173 163 203 228 +21% 259 247 248 255 293 +24% 321 300 257 311 321 370 384 +22% 391 353 237 166 242 252 286 321 357 374 431 RV Wholesale Unit Shipments Consumer Confidence RV Annual Shipments 480 500 Industry Outlook 15 Gulf War 9/11 Attacks Residential Housing Crisis It is our belief that trended sh
Slide 16: MH Market Conditions & Consumer Trends
Market Conditions & Consumer Trends 16 Approximately 9 million households with 22 million people living in manufactured homes (9% of nation’s single family housing stock) Affordable form of home ownership: Average structure cost per sq. ft. (2015): $47.55 (MH) vs. $100.65 (single family home)
Slide 17: MH Industry Outlook
Industry Outlook 17 Source: 1990-2016: Manufactured Housing Institute (MHI); 2017F Company Estimate 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, tha
Slide 18: Industrial Market: Growth in Housing Market
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 ( 00 0's ) Growth in Housing Market Driving Demand New Housin
Slide 19: Marine Market Trends
Market Trends 19 95% of powerboats in the U.S. are manufactured in the U.S. 36% of the U.S. adult population participated in recreational boating 72% of boat owners have a household income of less than $100K ~ middle-class 95% of boats on the water in the U.S. are less than 26’ in length Marine Mark
Slide 20: U.S. Marine Outlook
U.S. Marine Outlook - 100,000 200,000 300,000 400,000 500,000 600,000 19 65 19 66 19 67 19 68 19 69 19 70 19 71 19 72 19 73 19 74 19 75 19 76 19 77 19 78 19 79 19 80 19 81 19 82 19 83 19 84 19 85 19 86 19 87 19 88 19 89 19 90 19 91 19 92 19 93 19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20
Slide 21: Marine Retail Stats
Marine Retail Stats 21 New Boat Retail Growth Accelerating 10 20 30 40 50 60 70 80 90 Jan '14 Mar '14 May '14 Jul '14 Sep '14 Nov '14 Jan '15 Mar '15 May '15 Jul '15 Sep '15 Nov '15 Jan '16 Mar '16 May '16 Jul '16 Sep '16 Nov '16 Jan '17 Current Conditions 3-5 Year Outlook Positive Dealer Sentiment
Slide 22: Patrick's Marine History Timeline
A u g . 201 6 Patrick’s Marine History Timeline 22 L e g ac y N o v. 201 4 F e b . 201 5 Electronics Distribution First step into the marine market Strategic acquisition to gain traction in new marine markets Strategic acquisition to expand presence in RV & marine markets Fiberglass Helms Dash
Slide 23: Marine Core Competencies
Marine Core Competencies 23 Thermoforming plastics Dash and instrument panel assemblies Fiberglass design, engineering and manufacturing Electrical wiring and harnesses CNC plugs and molds; open/closed composite molds Aluminum fuel and holding tanks Electronics distribution Strategic
Slide 24: Focused Capital Allocation
Use strong cash flow to reduce debt and reload growth capacity 24 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
Slide 25: 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
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 • Solid Surface • Hardwood Products • Pressed Products • Industrial • Interior Doors TEXAS SOUTHEAST NORTHEAST • Softwoods • Paint • Solid Surface • Hardwood Products
Slide 27: Capital Expenditures
Capital Expenditures We will continue to invest in our infrastructure to drive enterprise wide efficiency and flex our capital spend when necessary to align with our demand levels $2.5 $4.2 $0.3 $1.4 $2.4 $7.9 $8.7 $6.5 $8.0 $15.4 $16.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017F ($ in m
Slide 28: Appendix
Appendix
Slide 29: 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 Both RV and MH content per unit increase of 14% in Q1 2017 compared to 2016 Strategic Growth Initiatives Acquiring
Slide 30: Acquisition Summary by Year
Acquisition Summary by Year 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 Acquisition
Slide 31: 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
Slide 32: 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
Slide 33: Acquisition Summary 2016-2017
Acquisition Summary 2016 2017 Parkland Plastics The Progressive Group Cana Cabinetry Mishawaka Sheet Metal L.S. Manufacturing, Inc. BH Electronics, Inc. Sigma Wire & KRA Intl. Medallion Plastics, Inc. Marine Concepts & Design Concepts Marine Electrical Products Florida Marine Tanks Date of Acquisiti
Slide 34: Patrick Product Lines – RV Interior
Patrick Product Lines – RV Interior 34 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
Slide 35: Patrick Product Lines – RV Exterior
Patrick Product Lines – RV Exterior 35 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
Slide 36: Patrick RV Products Growth Potential
Patrick RV Products Growth Potential 36 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
Slide 37: Patrick Product Lines – MH Interior & Exterior
Patrick Product Lines – MH 37 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 Cabinet Doors & Components Microwaves Countertops Ele
Slide 38: Patrick MH Products Growth Potential
Patrick MH Products Growth Potential 38 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
Slide 39: Patrick Industries
PATRICK INDUSTR
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