Patrick Industries, Inc. · NASDAQ:PATK
Patrick Industries — Investor Presentation (September 2019)
34 slides from Patrick Industries's investor presentation, Sep 19, 2019
Slide 1: Investor Presentation September 2019
August 2019 - Draft p Investor Presentation (Mockup version) Investor Presentation September 2019
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. Th
Slide 3: Company Highlights & Overview
Company Highlights & Overview PATK LISTED NASDAQ
Slide 4: Company Snapshot
Company Snapshot Founded in 1959 as a Today, operates as a key component manufacturer and supplier Manufactured Housing Supplier to the RV, Marine, Manufactured Housing and Industrial Markets Headquartered in Elkhart, Indiana Operates coast-to-coast in 22 states in the U.S. and in Canada, China and
Slide 5: Market Platform
Market Platform Over the last several years, we have strategically engaged in diversifying our market position in order to align our revenue stream with wholesale and retail trends across all four of our primary end markets Sales Composition 2016 2017 2018 RV – 72% RV – 69% RV – 63% Marine – 3% Mari
Slide 6: Markets Served & Trends
Markets Served & Trends PATK LISTED NASDAQ
Slide 7: Demographic Trends Across End Markets
Demographic Trends Across End Markets Favorable Demographic Trends Favorable Demographic Trends Lifestyle & Leisure Housing & Industrial Outdoor activities participation of U.S. U.S. adult population estimated to expand population has averaged 49% over the last by 12 million between 2019 and 202
Slide 8: Favorable Demographic Trends
Favorable Demographic Trends A key trending population demographic in the industries we serve began to increase in 2017 indicating future market upside potential in all of our markets. US Population age 35 – 44 50,000 Key Key population population demographic is demographic poised to return to 48,00
Slide 9: Industry Trends RV Market
Industry Trends RV Market Favorable Industry Trends 79 million household campers in the U.S. 7 million new campers have started camping since 2014 72 million millennials in the U.S. 41% of all campers are millennials 53% of millennials are interested in buying an RV, with 26% calling themselves “hig
Slide 10: Industry Outlook RV Market
Industry Outlook RV Market (shipments in thousands) RV Wholesale Unit Shipments +29% Residential 505 Gulf War 9/11 Attacks Housing Crisis 484 431 +22% 391 384 374 370 353 Inventory +24% 357 321 destocking 311 321 321 293 +21% 286 259 255 300 247 248 242 228 237 216 257 252 203 188 173 163 166 2018 2
Slide 11: RV Retail & Inventories
RV Retail & Inventories RV Market RV Shipments Change YoY Wholesale Retail 40% Wholesale +5% Wholesale +15% Wholesale +17% Wholesale -4% Q2'19 YTD Wholesale -20% Retail +13% Retail +11% Retail +13% Retail +4% Q2'19E YTD Retail - 7% 30% 2019 Trends 20% • Retail continues to 10% outpace wholesale – 0%
Slide 12: RV Content per Unit
RV Content per Unit RV Market Folding Camper (Calculated on a TTM basis) 100%Truck Campermarket share in $8,000 our existing products wouldMotorized: yield a total Type B potentialType C content/unit Total B & C of $8,000 $3,135 ASP -2017 $2,639 Towables: $1,930 $2,101 $1,682 19% growth in TTM $
Slide 13: Industry Trends Marine Market
Industry Trends Marine Market Favorable Industry Trends $10.5 billion retail sales of new powerboats in 2018 37% of the U.S. adult population participated in recreational boating in 2017 12 million registered boats in the U.S. in 2018 One out of every 10 houses in U.S. had a registered boater (2017)
Slide 14: U.S. Marine Outlook
U.S. Marine Outlook Marine Market Industry Volume 600,000 1965-1991 500,000 Average 401,000 400,000 1992-2006 Average 306,000 300,000 2011-2018 Average 175,000 200,000 100,000 Long runway of slow & steady growth with aging inventory of used boats - 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1
Slide 15: Marine Content per Unit
Marine Content per Unit Marine Market 100% market (Powerboat Retail Unit – Calculated on a TTM Basis) $9,000 share in our existing products would yield a total potential content/unit of $9,000 $1,655 93% growth in $856 $57 $119 $306 TTM content per unit – Q2’19 vs. Q2’18 TTM Addressable Market:
Slide 16: Industry Trends MH Market
Industry Trends MH Market Favorable Industry Trends 9 million households with 22 million people living in manufactured homes (“MH”) $50 per sq. ft. average structure cost compared to $111 for a single family home $71,900 average MH retail price for 1,426 sq. ft. (home only) 84% of all new homes sold
Slide 17: Industry Outlook MH Market
Industry Outlook MH Market (shipments in thousands) 373 363 Sub-prime boom 353 349 for site-built Residential 340 housing Housing Crisis 304 254 251 211 188 193 171 168 131 147 131 118 96 93 97 82 81 71 60 64 50 50 52 55 MH Units MH % of Single Family Home Starts The MH industry continues to perform
Slide 18: MH Content per Unit
MH Content per Unit MH Market (Calculated on a TTM basis) 100% market share in our existing products would yield a total $11,000 potential content/unit of $11,000 54% growth in TTM content $3,889 per unit – $2,520 Q2’19 vs. $1,790 $1,827 $2,084 Q2’18 TTM Addressable Market: ~$1.05 billion Single
Slide 19: Industry Trends Industrial Market
Industry Trends Industrial Market of Patrick’s Industrial sales are linked to 60% of Patrick’s Industrial sales are linked to 40% the non-residential housing market which includes: the residential housing market: new / remodels big box retail, retail & commercial fixtures and high 4% increase in sin
Slide 20: Growing Housing Demand
Growing Housing Demand Housing starts are a major driver for both Manufactured Homes and Industrial sales Total New Housing Starts 1990 – 2007 Average = 1.5MM 2012 – 2018 Average = 1.1MM 17% 18% 19% 19% 20% 21% 21% 21% 22% 18% 21% 23% 21% 13% 23% 14% 30% 25% 29% 33% 36% 17% 35% 29% 33% 20% 31% 20% 3
Slide 21: Growth Initiatives & Capital Allocation Strategy
Growth Initiatives & Capital Allocation Strategy PATK LISTED NASDAQ
Slide 22: Cash Flow Generation and Growth
Cash Flow Generation and Growth ($ in millions except per share data) Strong free cash flow generation provides flexibility across operational, financial and strategic objectives Cash Flows from Free Cash Flow* Free Cash Flow per Share* Operating Activities $7.20 $6.81 $200 $203 $166 $164 $3.57 $3.1
Slide 23: Capital Allocation Strategy
Capital Allocation Strategy Our capital allocation strategy is centered around the utilization of strong cash flows, a balanced disciplined leverage position, and capital resources to grow and reinvest in the business model Acquisitions Historical Capital Allocation Stock Repurchases 7% 5% 10% 8% 7%
Slide 24: Organic and Strategic Growth
Organic and Strategic Growth Strong sales growth continues to be evident and reflects organic and strategic impact leading to more balanced and diverse end-markets Sales Growth Trends Sales Mix ($ in millions) Total CAGR = 32% 11% 11% 12% 11% 13% 11% 13% 15% 14% 13% 12% 18% +38% 1% 2% 3% 7% $2,263 $
Slide 25: Acquisition Execution
Acquisition Execution Demonstrated ability to source, acquire and integrate while increasingly executing on opportunities across diverse end-markets Acquisition Momentum Acquisition End-Market Mix ($ in millions) 6% 5% 3% 8% 21% 21% $319MM Avg. 28% Revenues Acquired 7% $568 4% 29% 28% 27% 3% 91% $59
Slide 26: Capital Expenditures
Capital Expenditures We will continue to invest in our infrastructure to drive efficiency and capacity, and flex our capital spend when necessary to align with our demand levels Annual Capital Spending ($ in millions) $34.5 $25-$30 $22.5 $15.4 $8.7 $7.9 $8.0 $6.5 Maintenance capex approximately $5MM
Slide 27: Geographic and Product Expansion
Geographic and Product Expansion We have executed on 8 geographic expansions over the last 4 years with expansion opportunities of $500MM market potential Targeted Product Lines: . Lamination . Solid Surface . Aluminum . Hardwood Products . FRP . Pressed Products . Fiberglass . Interior Doors . Pain
Slide 28: Patrick Industries, Inc.
PAT IRICK< INDUSTRIES, INC. oe
Slide 29: Appendix
Appendix PATK LISTED NASDAQ
Slide 30: RV Products Overview – Interior
RV Products Overview – Interior Closet Closet & Passage Doors Fiberglass Bath Fixtures Cabinet Doors Hardware Mattresses & Shower Doors Kitchen & Bath Electronics Lighting Faucets & Sinks Laminated Panels & Vanity/Wall Microwaves Printed Vinyl Drawer Mirrors Laminate & Fronts & Countertops Sides Cer
Slide 31: RV Products Overview – Exterior
RV Products Overview – Exterior Dash Panels Front and Bow Trusses Exterior Speakers Rear Caps Additional Product Lines: . Softwoods . Full Body Paint . Aluminum Gauges . Steel Gauges . Mill Finish & Pre- Painted Aluminum and Steel . Slit & Embossed Steel . FRP Coil & Sheet . Trim Panels . Fuel Syste
Slide 32: Marine Products Overview
Marine Products Overview Electronics Helms Boat covers, tops, towers & frames Wire Harnesses Wire Screens Electronics Aluminum Fuel & Dash Assemblies Holding Tanks Dash Assemblies Wire Harnesses Boat Hull Design & Tooling Aluminum Fuel & PATK Holding Tanks LISTED NASDAQ 32
Slide 33: MH Products Overview
MH Products Overview Kitchen & Bath Fiberglass Bath Fixtures & Shower Gypsum (Drywall & Faucets & Sinks Doors & Enclosures Drywall Finishing Wrapped Profile Moldings Plumbing Products Products) Siding Interior & Exterior Decorative Ceiling Fans Trusses Shingles Lighting Fixtures • Ventilation System
Slide 34: Non-GAAP Reconciliations
Non-GAAP Reconciliations Reconciliation of Cash Flow from Operations to Free Cash Flow ($ in millions) 2014 2015 2016 2017 2018 LTM 6/30/19 Cash Flow from Operations $ 46 $ 67 $ 97 $ 100 $ 200 $ 203 Less: Capital Expenditures (7) (8) (15) (22) (34) (39) Free Cash Flow $ 39 $ 59 $ 82 $ 77 $ 166 $ 164
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