Patrick Industries(PATK) - 2023 Q4 - Annual Report

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$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$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]