Marine Industry Performance - The company's marine revenue mix is concentrated towards higher dollar units, particularly in the fiberglass and ski & wake segments, which began to see softness in demand in the second half of 2023[32] - U.S. retail expenditures on boats, engines, accessories, and related costs totaled approximately $59.3 billion in 2022, up approximately 4.4% from 2021[33] - Marine powerboat retail unit shipments decreased approximately 5% in 2023 compared to 2022, while marine wholesale unit shipments increased approximately 2% in 2023[34] Manufactured Housing Industry - The manufactured housing (MH) industry saw wholesale unit shipments increase from approximately 49,800 units in 2009 to approximately 89,200 units in 2023, after reaching a 15-year high of 112,900 units in 2022[36] Acquisitions and Financials - The company completed acquisitions for approximately $30 million in 2023 and approximately $804 million over the last three years[44] - A 100-basis point increase in Secured Overnight Financing Rate (SOFR) would result in an additional annual interest cost of approximately $1.3 million, based on average borrowings of $129.4 million[222] - The company’s debt obligations are primarily under SOFR-based interest rates, with a significant portion related to a Term Loan due in 2027[222] Customer Base and Sales - As of December 31, 2023, the company had approximately 4,400 active customers, with sales to Forest River and Thor accounting for 29%, 38%, and 42% of consolidated net sales for the years ended December 31, 2023, 2022, and 2021, respectively[53] Capital Expenditures and Inventory Management - Capital expenditures for 2023 consisted of $59 million, primarily for advanced manufacturing automation and equipment upgrades[47] - The company reduced its inventory in alignment with lower OEM production levels, believing that inventory levels as of December 31, 2023, are appropriately balanced with expected OEM production[57] Research and Development - The company’s research and development efforts are aimed at maintaining leadership positions in core products and developing new products and applications[52] Environmental Compliance - The company’s operations are subject to various environmental laws and regulations, including compliance with emission standards developed by the California Air Resources Board[58] Workforce and Human Capital Management - As of December 31, 2023, the company had approximately 10,000 team members, with 83% being hourly employees[65] - The company emphasizes human capital management, focusing on safety, well-being, and development programs for team members[66] - The company has implemented various leadership development and recruitment programs to foster an inclusive and diverse culture[67] - The company’s human capital management programs include mental health assistance and tuition reimbursement for team members[67] Risk Management and Operational Strategies - The company has a structured approach to risk management, including job safety analysis and ergonomic assessments to ensure a safe working environment[66] - The company’s operational strategies are influenced by seasonal industry trends and economic conditions affecting RV and marine sales[64] Community Involvement - The company has a commitment to community involvement initiatives, enhancing team member engagement and corporate responsibility[67] Commodity Price Exposure - The company is exposed to commodity price volatility, particularly for key raw materials like aluminum and fiberglass, which have fluctuated in 2023[223]

Patrick Industries, Inc. (NASDAQ:PATK) Q4 2023 Results Conference Call February 8, 2024 10:00 AM ET Company Participants Steve O’Hara - Vice President of Investor Relations Andy Nemeth - CEO Jeff Rodino - President RV Matt Filer - Interim CFO Kip Ellis - President, Powersports and Housing Conference Call Participants Mike Swartz - Truist Securities Craig Kennison - Baird Daniel Moore - CJS Securities Tristan Thomas-Martin - BMO Capital Markets Noah Zatzkin - KeyBanc Capital Markets Brandon Rollé - D.A. Davi ...

Company Overview - Patrick Industries is a supplier of components for RVs, manufactured homes, and marine sectors, led by CEO Todd Cleveland since 2009 [2] - The company has successfully integrated multiple acquisitions annually, benefiting from growth in the RV market and increased spending from baby boomers and millennials [2] Financial Performance - In 2022, Patrick Industries reported a 20% increase in sales to $4.88 billion, with operating profits of $496 million, slightly over 10% of sales [4] - Net earnings for 2022 were $328 million, equating to $13.49 per share, despite a $1.15 per share charge related to convertible notes [4] - The company experienced a decline in fourth-quarter revenues by 17% to $952 million, with GAAP earnings down to $1.68 per share [4] Recent Trends - Shares of Patrick Industries have seen significant volatility, dropping to $40 in 2022 due to inflation and growth concerns, but recovering to around $100 per share [4][6] - The business mix has diversified, with RV sales now accounting for less than half of total sales, while growth has been observed in the marine sector [4] 2023 Outlook - First quarter sales for 2023 fell by a third to $900 million, with quarterly EBITDA down to $97 million [5] - The company is projected to generate about $3.5 billion in annual sales and approximately $200 million in realistic earnings for the year, translating to around $9 per share [5] - A recent increase in the quarterly dividend to $0.55 per share reflects increased confidence, yielding just over 2% [5] Market Position - Patrick Industries is viewed as a long-term investment opportunity, with shares recently rallying about 40% since early November [6] - The company’s diversified business model and lower earnings multiples position it favorably in the market, despite facing inflationary pressures and economic concerns [6]

Thank you. Sure, Scott, this is Andy. I think that our aftermarket business was actually down just a little bit, which has been consistent with where it's been for a lot of the year. That being said, the margin profile on that business for us is very strong. And so it's performing a little bit better than our expectations as it relates to the margin, which is some of the benefit we've seen on that aftermarket side. So we're optimistic about it. I think, especially as you look at trends that we would expect ...

Company Participants Scott Stember - ROTH MKM Partners Noah Zatzkin - KeyBanc Capital Markets Craig Kennison - Robert W. Baird & Co. Daniel Moore - CJS Securities Griffin Bryan - D.A. Davidson & Co. Rafe Jadrosich - Bank of America Merrill Lynch Michael Swartz - Truist Securities Greetings, and welcome to the Patrick Industries Second Quarter 2023 Earnings Conference Call. [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Steve O'Hara, V ...

So it's -- I feel like we're in a really good spot overall an the investments that we made in our infrastructure, in our automation, in our IT and that we're making today, I believe are positioning us very well for when the market does pivot. We believe we'll be able to take advantage of that and leverage off those investments. So overall yes the answer is I believe we have a -- we continue to drive a solid value proposition as a buyer but also as Patrick overall. Operator A lot of speculation that was fuel ...

2004 2007 11:20 11 11 % PATRICK 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 forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from either historical or anticipated results depending on a variety of factors. These r ...

Financial Performance - In 2021, U.S. retail expenditures on boats, engines, accessories, and related costs totaled approximately $56.7 billion, up approximately 13% from 2020[34]. - Marine powerboat retail unit shipments decreased approximately 15% in 2022 compared to 2021, while marine wholesale unit shipments increased approximately 7% in 2022 compared to 2021[35]. - The manufactured housing (MH) industry saw wholesale unit shipments increase from approximately 49,800 units in 2009 to approximately 112,900 units in 2022, although still below historical levels[37]. - The Company completed acquisitions for approximately $250 million in 2022 and approximately $1.09 billion over the last three years[45]. - Approximately 70% to 80% of the Company's industrial net sales in 2022 were associated with the U.S. residential housing market[41]. Customer and Sales Information - The Company had approximately 4,500 active customers as of December 31, 2022, with sales to Forest River and Thor accounting for 38%, 42%, and 39% of consolidated net sales in 2022, 2021, and 2020, respectively[53]. Capital Expenditures and Inventory - Capital expenditures for 2022 consisted of $80 million primarily for advanced manufacturing automation and capacity increases[47]. - The Company’s inventory levels remained elevated as of December 31, 2022, compared to historical norms, due to supply chain constraints[57]. Workforce and Culture - Approximately 83% of the Company's team members are hourly employees, totaling approximately 11,000 as of December 31, 2022[64]. - The company emphasizes a merit-based, inclusive, and diverse culture to enhance team member engagement and retention, which is critical for serving customers effectively[66]. - Leadership development programs are in place to cultivate a diverse talent pool, aimed at advancing team members' careers and enhancing organizational capabilities[67]. - The company has implemented various human capital management programs, including free mental health assistance and tuition reimbursement, to support team members' well-being and professional growth[67]. - The company is committed to maintaining a safe working environment, with initiatives such as job safety analysis and OSHA preparedness training[67]. - The company’s focus on teamwork, empowerment, and respect is integral to its operational philosophy, fostering a collaborative and productive work environment[67]. Executive Leadership - The executive team includes experienced leaders, such as CEO Andy L. Nemeth, who has over 31 years of industry experience, and CFO Jacob R. Petkovich, who has a strong background in leveraged finance[69][72]. Community Engagement - The company actively engages in community involvement initiatives, providing team members opportunities to contribute to local communities[67]. Transparency and Compliance - The company’s website offers free access to various reports, including the Annual Report on Form 10-K and quarterly reports, ensuring transparency and compliance with SEC regulations[75]. Pricing and Cost Management - The company has been able to pass on price adjustments to customers during periods of volatile commodity prices, which include lauan, gypsum, fiberglass, and aluminum, although future cost increases may not always be fully passed on[216]. Debt Obligations - As of December 31, 2022, the company's total debt obligations under the 2021 Credit Agreement amounted to $217.2 million, with a potential additional annual interest cost of approximately $2.2 million for a 100-basis point increase in SOFR rates[215].

Q4 2022 EARNINGS PRESENTATION February 9, 2023 Q4 2022 Earnings Presentation 1 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 forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from either hi ...

Financial Data and Key Metrics Changes - Operating cash flow increased 63% to $412 million for the full year [1] - Full-year revenue was $4.9 billion, marking a 20% increase or $804 million [58] - Net income for the full year increased 46% to $328 million, with diluted earnings per share at $13.49, a 40% improvement year-over-year [96] - Gross margin for the year increased by 210 basis points to 21.7% [110] Business Line Data and Key Metrics Changes - RV revenues decreased 39% to $411 million in Q4, representing 43% of consolidated sales [98] - Marine revenues increased 35% to $255 million in Q4, contributing 27% to consolidated sales [100] - Full-year Marine revenue increased 56% to $1 billion, while RV revenue increased 8% to $2.6 billion [108] - MH revenue for Q4 grew 3% to $155 million and increased 29% to $705 million for the year [109] Market Data and Key Metrics Changes - RV wholesale unit shipments decreased 47% to approximately 78,000 units in Q4 [98] - Estimated industry wholesale unit shipments increased 11%, while retail unit shipments declined by an estimated 23% to 25% [70] - MH estimated wholesale unit shipments decreased 12% [72] - Total residential housing starts for Q4 decreased 16% [103] Company Strategy and Development Direction - The company aims to leverage its investment and diversification strategy to add durable value to its portfolio [57] - Focus on automation and technological improvements to drive scalability and operational efficiencies [83] - Continued emphasis on strategic acquisitions to enhance market presence and revenue durability [77][141] Management's Comments on Operating Environment and Future Outlook - Management expects retail trends to suggest a decline in RV retail shipments of approximately 15% to 20% for 2023 [85] - The company anticipates that macroeconomic headwinds will continue to impact consumers in 2023 [65] - Management remains optimistic about the long-term prospects for the RV industry, supported by consumer interest in leisure lifestyles [68] Other Important Information - The company repurchased approximately $77 million in shares and paid $33 million in dividends for a total of $110 million returned to shareholders [2] - The Board increased the authorized amount of the share repurchase program to $100 million [2] - Capital expenditures were $80 million for the year, with plans to invest $65 million to $75 million in 2023 [83][141] Q&A Session All Questions and Answers Question: What are you hearing from the OEMs regarding production for the first quarter? - Management noted that OEMs are adjusting production levels to manage dealer inventories effectively [146][147] Question: Can you discuss the expectations for wholesale and retail shipments? - Management expects retail shipments to slightly exceed wholesale shipments, with wholesale anticipated to be down approximately 30% to 35% [143][148] Question: How do you view the impact of commodity pricing on your business? - Management indicated that commodity prices have stabilized, and they are passing through some pricing decreases to customers [124]